Central Perk

luni, 24 octombrie 2011

We Can't Wait

Your Daily Snapshot for
Monday, October 24, 2011

We Can't Wait

Since we can't wait for Congress to act, President Obama heads to Las Vegas to highlight steps he's taking to create jobs and improve the economy.

Up first are policies that make it easier for some homeowners to refinance their mortgages, and later this week there will be measures to help students better manage their student loan debt. These steps aren’t a substitute for the bold action we need to create jobs and grow the economy, but they’ll make a difference.

Learn more about what President Obama is doing because "We Can't Wait"

American Jobs Act by the Numbers: $1,500

Inaction won't work for American families that are just scraping by. That's why this week we're continuing to pull out different aspects of the American Jobs Act to show how it will impact you, like the expansion of the payroll tax cut passed last year that will provide a $1,500 tax cut to the typical American family in 2012.

Seth's Blog : Form and function

Form and function

When the form changes, so does the underlying business model, which of course changes the function as well.

Mail ---> email

Books ---> ebooks

DVD ---> YouTube/Netflix

1040 ---> Online taxes

Visa ---> Paypal

Open outcry ---> Electronic trading

Voice call centers ---> forums and online chat

Direct mail ---> permission marketing

In each case, the original players in the legacy industry decided that the new form could be bolted onto their existing business model. And in each case they were wrong. Speed and marginal cost and ubiquity and a dozen other elements of digitalness changed the interaction itself, and so the function changes too.

The question that gets asked about technology, the one that is almost always precisely the wrong question is, "How does this advance help our business?"

The correct question is, "how does this advance undermine our business model and require us/enable us to build a new one?"

There are projects that are possible with ebooks or Kickstarter or email that could never have worked in an analog universe. Most of the money made in the stock market today is via trading approaches that didn't even exist thirty years ago.

When a change in form comes to your industry, the first thing to discover is how it will change the function.

• Email to a friend •

duminică, 23 octombrie 2011

Mish's Global Economic Trend Analysis

China Still Fails to Participate in Two Week Global Rally

Posted: 23 Oct 2011 07:35 PM PDT

A quick look at the Asia Pacific Markets this evening shows Australia (AORD) up 1.89%, HSI Han Seng (Hong Kong) up 2.44%, the Nikkei (Japan) up 1.4%, Seoul (South Korea) up 2.18%, Taiwan up 2.36% and once again SSEC, the Shanghai composite is not participating.

$SSEC Shanghai Composite Daily

click on chart for sharper image

Europe is in recession, the US is headed there (or already in recession), and China is slowing far more than anyone thinks. This does not bode well for strong commodity demand looking ahead.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

EU is reporting "Progress" but None of it is Meaningful

Posted: 23 Oct 2011 01:04 PM PDT

EU leaders are announcing "progress" but there is little progress to be found. Banks have "volunteered" to 40% haircuts but EU leaders want 50% minimum. Is that progress?

Germany won a major arguments with France, the latter wanting unlimited bailout access (printing) by the ECB. Since no one expected France to win that argument, that is not much progress either, except from the point of view we no longer have to listen to asinine proposals from France.

Otherwise the bickering still continues as to how best to leverage the EFSF when the best thing to do is not use leverage at all. As soon as leverage is used France will likely lose its AAA rating.

Then again France will soon enough lose that AAA rating anyway as it attempts to bailout French banks.

Otherwise, here is the misleading headline from Bloomberg: EU Sees Progress on Banks

European leaders outlined plans to aid banks and ruled out tapping the European Central Bank's balance sheet to boost the rescue fund, inching toward a revamped strategy to contain the Greece-fueled debt crisis.

Europe's 13th crisis-management summit in 21 months also excluded a forced restructuring of Greece's debt, sticking with the policy of enticing bondholders to accept "voluntary" losses to help restore the country's finances.

Bank capital needs -- estimated at 100 billion euros by a person familiar with the deliberations -- will be met first by banks themselves, then by national governments, the European officials agreed.

Only when national efforts fail can governments tap the main rescue fund, the 440 billion-euro European Financial Stability Facility, for cash to channel to banks.

"What I can tell you is that this only will happen under strict conditions," Dutch Prime Minister Mark Rutte said.

Germany pushed through one of its main summit aims, defeating French efforts to bulk up the rescue fund by enabling it to borrow potentially limitless sums from the independent central bank. Policy makers are headed toward using the EFSF to guarantee government bond sales as a way to extend its reach. A second option is to set up an EFSF-insured fund that would seek outside investment in troubled bonds.

The goal is to complete the technical details within 24 hours, a European official said. The next summit will consider the two options as well as ways of getting the International Monetary Fund to boost its rescue role, the official told reporters.

After a year of sparring with the ECB over burden sharing for bondholders, Merkel was on the central bank's side this time, sparing it from a role in financing state deficits.

What wasn't decided is the fate of bond purchases by the Frankfurt-based ECB. The central bank has bought 165 billion euros of bonds, justifying the purchases as a way of smoothing markets and helping transmit its interest-rate decisions through the economy.

Central bankers have expressed reluctance to step up the purchases, which started with Greece, Ireland and Portugal last year and widened to Italy and Spain in August as those markets came under attack.

"One shouldn't demand more from the ECB than it can achieve according to its statutes," Austrian Chancellor Werner Faymann said today.

Central bankers are at the center of the dispute over writedowns for Greek bondholders. A reminder came on Oct. 21 when the ECB put a dissenting footnote into an assessment of Greece's finances that envisioned writedowns as high as 60 percent.

The IMF wants haircuts of 60%, the bankers agreed to 40% voluntary cuts. Of course the haircuts are not voluntary and never were.

EU officials are still bickering over how to do a 100 billion euro bank recapitalization when four times that amount is needed.

Leveraged EFSF will not work, but EI officials are still arguing over how to do it.

Is this progress?

Odds are overwhelming there is not going to be progress. I'm on vacation, so I'm going golfing.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

SEOptimise

Redefining “SEO Copywriting”

Posted: 21 Oct 2011 03:45 AM PDT

Here at SEOptimise we've been thinking a lot about copywriting recently. More than usual, that is! As the person responsible for overseeing copywriting at SEOptimise, I thought I'd share a few thoughts on the frankly quite lamentable state of what has become known as "SEO copywriting".

Any copywriter worth their salt will doubtless share my opinion that so-called "SEO copywriting" gives the world of copywriting a bad name. Despite using the name "copywriting", it couldn't be further from this highly skilled profession. As we all know, this lesser species of copywriting has evolved because once upon a time, it was considered acceptable to throw together a quick article on "the secret to cheap international calls" or whatever, and submit it to a dozen or so article directories for a few quick links. But Google quite rightly recognised that that kind of rubbish was not remotely helpful to its users, and has been banging on about high-quality content with renewed vigour ever since.

In the light of the Panda update we made the conscious decision, as an agency, that the content we produce for our clients during the course of routine link building activities would have to take a big step up from the typical article directory fodder which has unfortunately come to be associated with the SEO world. Moving away from devalued article directories, it becomes necessary to intensify link building efforts in other areas; guest blogging is one area which immediately springs to mind, and one in which we have been met with considerable success for most of, if not all, our clients. But for this strategy to be successful, and to gain good links from high-authority blogs which have a high readership, it's necessary to produce decent pieces of writing that bloggers will actually want to feature.

It's just a shame that a lot of professional copywriting services seem to be stuck in the past when it comes to churning out the kind of copy regularly to be seen gracing the spammier article directories. Haven't they heard of the Panda update? Don't they realise that this sort of crappy copy doesn't cut it anymore? In the past, we've been through a string of copywriting services and the blog posts we've had written have been very much of the article directory ilk – ill-thought-out, boring and, I might add, riddled with typos and fundamental grammatical errors. If you've read my previous posts or if you follow me on Twitter, you may remember that I take a dim view of poor grammar, so you can imagine my reaction to finding it in the work of professional copywriters. I also recently completed a Diploma in Copywriting, and the course material for that wasn't much better. A woeful state of affairs!

At SEOptimise our rationale is that investing more in copywriting ultimately pays dividends. An interesting, insightful piece of writing that takes an original look at a topic will quite simply do far better for your SEO efforts than the sort of lazily spun "how to" articles churned out by "content generation" companies. Not only will you have far greater success in publishing the work on decent sites, but you'll also find that it's far more likely to be shared in the social media networks and you'll reach a much bigger audience. And more exposure means more links! To use a buzzword that I'm not altogether fond of (I don't like buzzwords either), it's pretty much a win-win situation!

So I would argue that it's time for a rethink of how we – the SEO community – view copywriting. Rather than thinking of it as "SEO copywriting" or "content generation", our focus needs almost to shift back to a more traditional, journalistic approach to writing, with the emphasis on tackling new subjects, providing readers with meaningful insights and embracing the limitless possibilities of the English language beyond the narrow confines of article directory spam.

And on that note, if you'd like to write full time for SEOptimise, we're currently expanding our copywriting team: check out our copywriter job vacancy for more details.

Image credit: jjpacres on Flickr.

Seth's Blog : When is it okay to start worrying?

When is it okay to start worrying?

A friend was waiting to hear about the results of a job interview. He hadn't heard in a while and he asked me, "how long before I should start worrying?"

Of course, the answer is, "you should never start worrying."

Worrying is not a useful output. Worrying doesn't change outcomes. Worrying ruins your day. Worrying distracts you from the work at hand. You may have fooled yourself into thinking that it's useful or unavoidable, but it's not. Now you've got one more thing to worry about.

• Email to a friend •

sâmbătă, 22 octombrie 2011

Mish's Global Economic Trend Analysis

"Resurrection of Dead" Stories by The Telegraph

Posted: 22 Oct 2011 10:36 PM PDT

Inquiring minds are investigating "resurrection of the dead" stories such as New euro 'empire' plot by Brussels by The Telegraph.

The proposal, put forward by Herman Van Rompuy, the European Council president, would be the clearest sign yet of a new "United States of Europe" — with Britain left on the sidelines.

The plan comes as European governments desperately trying to save the euro from collapse last night faced a new bombshell, with sources at the International Monetary Fund saying it would not pay for a second Greek bail-out.

The single Treasury plan emerged in Brussels yesterday as Europe's finance ministers tried to find a way out of the crisis engulfing the eurozone. A full-scale rescue plan could cost about £1.75 trillion.

British sources said Mr Van Rompuy, who is regarded as being close to the German government, suggested plans for a "finance ministry" to be based either in Frankfurt or Paris. The EU already has its own "foreign ministry", headed by Baroness Ashton, the former British Labour minister, and based in Brussels.

A senior Coalition source told The Sunday Telegraph: "I am well aware of arguments in Brussels and elsewhere in favour of a single Treasury. You'd get any number of different versions of 'Europe' all running at very different speeds."

A series of meetings are due to be held over the next few days on the eurozone crisis that will involve the leaders of EU member states.

Resurrection of the Dead

I am tired of nonsensical headlines that have a zero percent chance of happening.

Anyone who gives any credence to blowhards like Herman Van Rompuy is a complete fool or is looking to gain hits via absurd headlines.

There is NOT going to be a single treasury for the EU because it will require a referendum from German voters whom will not go along with it. For that matter nor will Finland, Austria, the Netherlands and possibly other countries.

More importantly, there is a zero % chance the Telegraph does not realize that.

To be sure Van Rompuy, keeps attempting to resurrect dead ideas, However, the 10th attempt does not deserve a headline like "New euro empire plot by Brussels".

Instead the headline should be openly mocking of the Van Rompuy.

The only way the Telegraph headline makes any sense is if it was done on purpose, to gather hits. The Telegraph got hits from me, but likely ones they do not want.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

EU Finance Ministers Decide to Force Banks to Take Bigger Greek Bond Losses, Recapitalize by $140 Billion; Amount Insufficient, Few Other Details

Posted: 22 Oct 2011 05:01 PM PDT

Details are sketchy but Reuters reports Banks under pressure in Europe crisis, pushed to raise capital, take Greek losses

On Saturday, the finance ministers of the 27-country European Union decided to force the bloc's biggest banks to substantially increase their capital buffers -- an important move to ensure that they are strong enough to withstand the panic that a steep cut to Greece's debt could trigger on financial markets.

A European official said the new capital rules would force banks to raise just over euro100 billion ($140 billion), but finance ministers did not provide details on their decision. The official was speaking on condition of anonymity because it had been agreed to let leaders unveil the deal at their first summit Sunday.

The deal on banks was likely to be the only major breakthrough ready to announce on Sunday, leaving many important decisions and negotiations to be completed by Wednesday night.

On Friday, the first day of the marathon talks, the finance ministers of the 17 countries that use the euro -- and which have found themselves at the center of the crisis because of the currency they share -- agreed to demand Greece's private creditors take big losses on their bondholdings.

But they still have get the banks to come along and convince them that the cuts are the best way to ensure that Athens can eventually repay its remaining debts.

The picture in Greece, whose troubles kicked off the crisis almost two years ago, is bleaker than ever. A new report from Athens' international debt inspectors -- the European Commission, the European Central Bank and the International Monetary Fund -- proved that a preliminary deal for a second package of rescue loans reached in July is already obsolete.

The report showed that in the past three months Greece's economic situation has deteriorated so dramatically that for the bank deal to remain in place, the official sector would have to provide some euro252 billion ($347 billion) in loans. Alternatively, to keep official loans at euro109 billion ($150 billion), banks would have to accept cuts of about 60 percent to the value of their Greek bonds.

"I believe we are now arriving at a more realistic view of the situation in Greece," said German Chancellor Angela Merkel, the country that has long been advocating a more radical solution to Athens' problems.

But Merkel and her eurozone counterpart were on for tough negotiations with the banks.

Charles Dallara, who has been representing private investors in the talks with the eurozone, said Saturday that negotiations that carried on sporadically throughout Saturday were making only slow progress.

"We're nowhere near a deal," he told The Associated Press in an interview.

Germany and France still disagree over how to give the EFSF more firepower. France wants the fund to be allowed to tap the ECB's massive cash reserves -- an option that Germany rejects. Weaker economies, meanwhile, are wary of signing up to the other two parts of the grand plan -- bigger bank capital and cuts to Greece's debt -- without assurance that sufficient buffers are in place.

Recapitalization Insufficient

100 Million Euros is insufficient. The IMF pegged the amount between 100 million and 200 million. There is absolutely no reason to suspect the minimum is needed. Indeed, there is every reason to expect 400 million euros is insufficient.

Capital Shortfall Estimates of European Banks Range from 8 to 413 Billion Euros

The Wall Street Journal reports widely varying analyst ranges in its article European Banks Face New Scrutiny Over Capital Needs

Analyst Estimates

Citigroup estimates there is a capital shortfall of between €64 billion and €216 billion for banks to achieve a minimum core Tier 1 ratio of 7% to 9%, respectively.

Credit Suisse came up with a similar figure of €220 billion for the potential 9% scenario.

Analysts at Espirito Santo said write-downs at current market prices on Greek, Portuguese, Irish, Italian and Spanish bonds, along with a higher minimum capital ratio of around 9%, could require as much as €413 billion in new capital across the sector.

Merrill Lynch analysts in turn came up with estimates of between €7.6 billion and €143 billion in required capital for the region's major banks, depending on various scenarios.

These ranges provide more questions than answers. Moreover, low-end lowball estimates such as €7.6 billion by Merrill Lynch are preposterous under all but the most ludicrous scenarios in the third round of "stress-free" tests now underway.

Deutsche Bank AG Chief Executive Josef Ackermann says it isn't clear recapitalization efforts will help solve the crisis.

Hey, let's just not recognize any bank losses ever.

Credit Suisse Estimates

Zero Hedge has some interesting charts of capital shortfalls as estimated by Credit Suisse.
Commentary and charts below from Credit Suisse. No link provided. Click on charts for sharper image.

One of our conclusions was that the overall European banking sector is facing a €400bn capital shortfall which compares to a current market cap of €541bn.

The table below details the breakdown of our estimated capital shortfall.

Figure 6: European banks – Capital deficit in CS 'accelerated sovereign shock

I believe 400 million Euros will prove way insufficient once Portugal, then Spain, then Italy get into trouble.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

luni, 24 octombrie 2011

We Can't Wait

Seth's Blog : Form and function

Form and function

More Recent Articles

duminică, 23 octombrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

SEOptimise

SEOptimise

Seth's Blog : When is it okay to start worrying?

When is it okay to start worrying?

More Recent Articles

sâmbătă, 22 octombrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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luni, 24 octombrie 2011

More Recent Articles

duminică, 23 octombrie 2011

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sâmbătă, 22 octombrie 2011

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