Central Perk

luni, 2 iunie 2014

Seth's Blog : Treating people with kindness

Treating people with kindness

One theory says that if you treat people well, you're more likely to encourage them to do what you want, making all the effort pay off. Do this, get that.

Another one, which I prefer, is that you might consider treating people with kindness merely because you can. Regardless of what they choose to do in response, this is what you choose to do. Because you can.

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duminică, 1 iunie 2014

Mish's Global Economic Trend Analysis

Japan Orders and Output Decline Second Month; Does it Mean Anything?

Posted: 01 Jun 2014 10:12 PM PDT

Orders and output in Japan contracted for the second month. However, the decline was small and it comes on the heels of a tax increase that shifted demand forward a couple months ago.

Markit reports Slower Decline in Japanese Manufacturing Output in May

Key Points:

Output and new orders fall for the second month running, but at slower pace
Exports continue to fall
Rate of job creation eases

Summary:

Japanese manufacturing firms saw a decline in output for the second month running in May alongside a con tinued fall in new orders and new export orders. That said, rates of decline for both new orders and output eased from those seen in April. Employment numbers grew in May for the tenth month running, albeit at a slower pace. The headline seasonally adjusted Markit/JMMA Purchasing Managers' Index™ (PMI™) – a composite indicator designed to provide a single - figure snapshot of the performance of the manufacturing economy – posted at 49.9 in May, up from 49.4 in April. This signalled a broad stabilisation in business conditions in the sector, following the decline in April.

Output fell for the second month running in May. Similar to April, panellists commented on a decline in demand due to the sales tax increase. That said, the deterioration in output eased in comparison to the previous month. Following a similar trend, new orders continued to fall with panellists again blaming the sales tax rise. However, the decline in new orders was only slight and weaker than in the previous month, with the seasonally adj usted New Orders Index moving closer to the 50.0 no - change mark. Alongside the falls in output and new orders was also a reduction in new export business.

May recorded the fastest fall in work outstanding since July 2013. Japanese manufacturing companies attributed this to a drop in business after the increase in sales tax. Despite falls in output and new orders, Japanese manufacturers in May saw employment growth for the tenth month running as companies took on extra staff in anticipation of workload growth. That said, the rate of job creation eased to the slowest since last November.

Too Early To Tell

The positive aspect in the report is the strength in jobs, yet job growth has slowed. The weak aspect is declining exports which cannot be blamed on a sales tax hike.

Moreover, the Yen has been fairly stable recently so one cannot blame the drop in exports on a strengthening currency.

All things considered, the report is somewhat a mixed bag. It will take another month or two to assess Japan properly.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Mish Reader Who Speaks Russian and Reads Ukrainian Updates the Situation in Ukraine

Posted: 01 Jun 2014 10:24 AM PDT

News media reporting of the situation in Ukraine has nearly vanished in the past couple of weeks. Here is an update from reader Jacob Dreizin, a US citizen who is fluent in Russian and can read Ukrainian.

Mish,

Just wanted to give you an update on Ukraine. A lot has happened since I wrote you last.

The rebels in the eastern regions are clearing their hinterland of minor government positions, and securing their supply lines from Russia. The Russian government has started to allow volunteers and weapons to move across the border without interference from its side.

Whether intended or not, it is the classic insurgent battle plan. Once this stage is completed, the remaining government forces in Donetsk and Lugansk regions will be so isolated as to have no choice but to "temporarily redeploy and regroup", that is, to retreat.

The rebels now have MANPADS, Man-Portable-Air-Defense-Systems as suggested by the below photo.

Keep in mind that the average Ukrainian soldier is being paid around $100 per month, which often arrives late. Most of these people have no motivation to risk their lives in a prolonged war of subjugation and occupation in the eastern regions. So far, Kiev has been compensating for this with its better-paid special police detachments as well as with various yahoo militias funded by the oligarch Igor Kolomoisky, owner of Ukraine's largest bank.

This cannot last. At some point, the body count will be such that a critical mass of the security forces will simply refuse to fight or even to be deployed in the war zones. We are already starting to see this. According to the Ministry of Interior, 13 west Ukrainian paramilitary police were fired today for refusing deployment to the eastern regions. There was also a recent case where around 100 soldiers in one reserve unit refused call-up orders.

Moreover, it is well known that the military is poorly fed, subsisting on donations as well as shipments of American MREs (meals ready to eat). There is a lot of grumbling in the ranks, and at some point we are going to start seeing mutinies and mass desertions.

Eventually, the Ukrainian war effort will grind down and then collapse. Meanwhile, the rebels grow stronger by roughly 100 men each day, on average. If Russia cuts off the gas in a few days, as threatened, this will be a huge blow, as it will degrade European support for Kiev.

Finally, please take a look at the video below of a pre-funeral memorial service for five rebel militiamen in a small city in the east. Pay special attention to the segment between 1:48 and 2:07. It looks to me like around two thousand people turned out for this event. So when you read that these rebels are "terrorists" and that theirs' is not a popular movement, and that the recent independence vote was a total fraud, and that it is all the work of Russia, you know you are reading Western media bias.

If you want, I can start sending you photos of destroyed homes and dead civilians, just to show that it is happening, and the media here couldn't care less.

All the best,

Jacob Dreizin

For Jacob's previous email, please see Inside Ukraine: Mish Reader Who Speaks Ukrainian and Russian Challenges Western Media View of Events

Alternative Viewpoints

Clearly Jacob's point of view is completely different than that presented by Western media.

Is it accurate?

I really do not know. However, it certainly is possible, even though some may consider the his viewpoint to be nothing but pro-Russian propaganda.

In a propaganda-war, the truth is frequently somewhere in the middle. But where in the middle? I will leave that for the reader to decide.

Meanwhile, my own opinion has been the Eastern regions will not become part of Russia for the simple reason Russia does not want the associated problems.

Will the issue of natural gas supply bring the crisis to head sooner rather than later? We will find out shortly.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : The people who started Staples didn't do it...

The people who started Staples didn't do it...

because they love office supplies.

They did it because they love organizing and running profitable retail businesses. They love hiring and leasing and telling a story that converts prospects into customers. Postits are sort of irrelevant.

You shouldn't become a middle school math teacher because you love math. You should do it because you love teaching.

I hope Staples has a senior buyer who actually does love office supplies. I hope that textbooks get written by people who love, really love, the topic they're writing about. It's easy, though, to fool ourselves into believing that going up the ladder means we get to do more of the thing we started out doing.

It's often the case that the people we surround ourselves with (and the tasks we do) have far more to do with job satisfaction and performance than the subject of our work.

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sâmbătă, 31 mai 2014

Mish's Global Economic Trend Analysis

Wine Country Conference II Videos: Stephanie Pomboy "Confessions of Ben Bernanke", Mebane Faber “Global Stock Valuations”

Posted: 31 May 2014 10:25 AM PDT

A second set of Wine Country Conference Speaker Presentation videos is now available.

This set features Stephanie Pomboy on the "Confessions of Ben Bernanke", Mebane Faber on "Global Stock Valuations", and panel a discussion with John Hussman, Mebane Faber, Stephanie Pomboy. The final set will be out next week.

This Year's Charity

As with last year, Wine Country Conference II was for charity. This year's cause was Autism. Many of the speakers donated all or part of their expense honorarium to the cause. I did as well, losing money, to put this event on.

Once again, John Hussman and the Hussman Foundation was amazingly generous. The foundation will match donations dollar for dollar, up to $50,000!

If you enjoy the videos (or even if you don't) please Make a Donation to the Autism Society.

Stephanie Pomboy "Confessions of Ben Bernanke"

Mebane Faber "Global Stock Valuations"

John Hussman, Mebane Faber, Stephanie Pomboy Panel Discussion

Here is a link to the first set of videos: Wine Country Conference II Videos: Introduction and Hussman on "A Very Mean Reversion"

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Reducing Carbon Pollution in Our Power Plants

Featured

Weekly Address: Reducing Carbon Pollution in Our Power Plants

In this week's address, President Obama discussed new actions by the Environmental Protection Agency to cut dangerous carbon pollution, a plan that builds on the efforts already taken by many states, cities and companies. These new commonsense guidelines to reduce carbon pollution from power plants were created with feedback from businesses, and state and local governments, and they would build a clean energy economy while reducing carbon pollution.

The President discussed this new plan from the Children's National Medical Center in Washington, D.C., where he visited children whose asthma is aggravated by air pollution. As a parent, the President said he is dedicated to make sure our planet is cleaner and safer for future generations.

Click here to watch this week's Weekly Address.

Mish's Global Economic Trend Analysis

Balancing the Budget and the Trade Deficit is Easy: Return to Gold Standard

Posted: 30 May 2014 10:47 AM PDT

The Daily Ticker's Lauren Lyster conducted an interesting interview today with British Member of Parliament Kwasi Kwarteng on gold and balancing the budget.

To play the video, click on the preceding link.

Kwarteng is author of War and Gold, a Five-Hundred-Year History of Empires, Adventures, and Debt.

Kwarteng notes the historic stability under gold standards, specifically citing the 2008 financial crisis and national debt level as problems related to the Fed and printing paper money.

"The credit crunch, the credit bubble that preceded it, and the huge amounts of debt and deficits that we have are related to paper money," says Kwarteng.

Laruen asked "After the Fed has printed trillions of dollars, just to look at the past several years of expanding the money supply, how do you put the genie back in the bottle?"

"If the Chinese unilaterally declared that the renminbi would be pegged to gold it would essentially recreate the gold standard," responds Kwarteng.

Yet, Kwarteng admits that China's export policy likely precludes that from happening.

Missing the Boat on Trade

My one disagreement in an otherwise excellent discussion is that Kwarteng misses the boat on trade in a major way. He maintains that the UK cannot go back to the gold standard because of trade deficits. His take is governments need to balance budgets and increase exports first.

He has that point backwards. Trade deficits will not fix themselves. Competitive, beggar-thy-neighbor tactics would prevent that. And if the UK and US balanced their budgets, the pound and dollar would soar, and exports would drop.

In contrast, a return to the gold standard will not only fix deficit spending, but it will cure trade deficits in a flash.

That's what I mean by "easy". Certainly, the current political environment and the ensuing short-term pain would be anything but "easy".

The trade issue is extremely important. For a recap, please see Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Seth's Blog : "But I might get rejected"

"But I might get rejected"

Indeed, you might.

You might get your hopes up only to find them dashed.

You might decide on where you want to go, and then not get there.

You might fall in love with a vision of the future and then discover it doesn't happen.

How much would that hurt? How much would it hurt to have those hopes, those decisions and that love turn out to be all for nothing?

Of course, it's not for nothing. In fact, those hopes, those decisions and that love is the foundation for a path worth pursuing. It's what makes us better.

This post was inspired by my new seminar. Sure, the odds are against you, but I think that's a lousy reason to avoid exploring something. "Will I get in?" is not nearly as good a question as, "Is it worth trying?"

Don't apply (to this or to anything else) just because you can, but yes, apply to something that matters to you, something worth dreaming about.

You might get rejected. So what?

Leap.

[I want to make an essential distinction here:

There's a huge difference between the internal cost of being rejected (you feel bad, you feel like a failure, you feel like a fraud), and the external cost.

The external cost might be the time you wasted working on something that didn't work. It might be that you offended someone by asking the wrong way, or by spamming, or by being selfish. And it might be that you wasted an opportunity by going for the longshot or the shortcut when you would have been better off settling in and succeeding in the long run.

This post is about the internal cost. It's so easy to talk ourselves into failure before it even shows up.]

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luni, 2 iunie 2014

Seth's Blog : Treating people with kindness

Treating people with kindness

More Recent Articles

duminică, 1 iunie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : The people who started Staples didn't do it...

The people who started Staples didn't do it...

More Recent Articles

sâmbătă, 31 mai 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Reducing Carbon Pollution in Our Power Plants

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : "But I might get rejected"

"But I might get rejected"

More Recent Articles

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