Central Perk

vineri, 16 ianuarie 2015

Seth's Blog : You are what you share

You are what you share

I have a friend who can always be counted on to have a great book recommendation handy. Another who can not only tell you the best available movie currently in theatres, but confidently stand behind his recommendations.

And some people are eager to share a link to an article or idea that's worth reading.

Most people, though, hesitate. "What if the other person doesn't like it..."

The fear of being judged is palpable, and the digital trail we leave behind makes it feel more real and more permanent. We live in an ever-changing culture, and that culture is changed precisely by the ideas we engage with and the ones we choose to share.

Sharing an idea you care about is a generous way to change your world for the better.

The culture we will live in next month is a direct result of what people like us share today. The things we share and don't share determine what happens next.

As we move away from the top-down regime of promoted movies, well-shelved books and all sorts of hype, the recommendation from person to person is now the most powerful way we have to change things.

It takes guts to say, "I read this and you should too." The guts to care enough about our culture (and your friends) to move it forward and to stand for something.

We'll judge you most on whether you care enough to change things.

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joi, 15 ianuarie 2015

Mish's Global Economic Trend Analysis

Contagion Catch 22; Finland Opposes Greece Bailout Deal; No Scope for Solutions

Posted: 15 Jan 2015 03:04 PM PST

Alexis Tsipras, head of the Greek radical-left party Syriza, currently in the lead in national elections, wants a new bailout deal for Greece, including huge debt writeoffs.

Socialist policies aside, on that score Tsipras is correct. Greece cannot possibly pay back the €245 billion it owes creditors.

Contagion Catch 22

Germany fears contagion in the form of demands by other countries that will also want bailout deals or rule changes if Greece gets one.

Yet, yet a much more destructive contagion via a cascade of defaults is all but assured if Greece is forced into default.

New Hurdle in Finland

Making matters worse, Finland has joined the no bailout parade. Even if Germany was willing to offer Greece some concessions, Finland does not want to go along.

This poses an additional problem for the eurozone block that must agree unanimously to all such deals.

With that backdrop, please consider Finland Emerges as Major Hurdle to Greek Bailout Deal.

Finland has emerged as the biggest stumbling block to negotiating a new bailout deal with an incoming Greek government, telling its eurozone partners that it will not support debt forgiveness and is reluctant to back another extension of the €172bn rescue.

In an interview, Finland's prime minister [Alex Stubb] said he would give a "resounding no" to any move to forgive Greece's debts and warned that a new government in Athens would have to stick to the terms of the existing bailout.

"We will remain tough. It is clear that we would say a resounding no to forgiving the loans," Mr Stubb said.

"We naturally do not want to influence the Greek elections," Mr Stubb added. "But I think it's fair to Greeks and Finns to say out loud that some of the statements by Greek parties, and their presentations and ideas about the current programmes are simply unacceptable for Finland."

The bailout of Greece has been a lightning rod for anti-euro sentiment in Finland. It was arguably the most enthusiastic cheerleader for austerity during the euro crisis. In an unusually tough stance that angered other European countries, it insisted in 2011 on receiving collateral from Athens before giving its backing to one of the Greek bailouts.

"We believe there is no going back on the loans or any of the other programmes. We should keep crystal clear in mind that the loans have already been eased many different times."

Limited Scope for Solutions

Even if Finland was agreeable to bailout changes, the Size of Greece's Debt Limits Scope for Solutions.

Eurozone finance ministers agreed in November 2012 to consider further debt relief for Greece once it reached a budget surplus before interest payments, which it did for the last two years, and as long as it stuck to its promises of austerity and reform.

But how much scope is there to reduce Greece's debt burden?

Around three-quarters of Greek public debt — or around €270bn out of a total of €317bn — is held by the official sector — the EFSF eurozone rescue fund, the European Central Bank as well as the IMF, according to IMF figures.

Of the €270bn, defaulting on the €24bn owed to the IMF is considered the ultimate taboo, even by Syriza.

The ECB and national central banks are owed €54bn. The ECB is unable to offer any relief, since it could constitute illegal monetary financing of national governments.

According to an analysis of options by the Bruegel think-tank, reducing interest rates on the €53bn in bilateral loans to the three-month borrowing costs of each eurozone governments would reduce Greece's debt mountain by 3.4 per cent of GDP by 2050 (in net present value terms). A further 10-year maturity extension would shave off another 4.5 per cent of GDP.

On its €142bn in EFSF loans, Greece only pays 1 basis point over the rescue fund's borrowing costs, so there is little room for cutting the interest rate. But a 10-year maturity extension would cut the debt pile by a further 8.1 per cent of GDP.

Together, these concessions would reduce Greece's debt burden to only around 160 per cent of GDP, a long way from Syriza's objective. But EU officials argue that the overall total matters less if annual payments are low and spread out over several decades.

Other options, such as cheap fixed rate loans, or a much more radical debt forgiveness scheme along the lines of the Paris club, would impose direct losses on lenders and could be impossible for Greece's eurozone partners to swallow.

High-Growth Impossibility

The burden of debt in and of itself rules out the "high-growth" scenario. Yet all other options leave Greece with debt-to-GDP near 150% for as far as the eye can see.

Recall that the Troika once said that debt over 120% of GDP was untenable. Now officials conveniently argue "the overall total matters less if annual payments are low and spread out over several decades".

The longer this stretches out, the longer Greece will remain a mess.

Now vs. Then

Recall that the Troika forced €245 billion of bailout debt on Greece just to prevent default on €40 to €50 billion or so in obligations.

Bailouts never made any sense. However, what makes the most sense now, is to recognize what cannot be paid back, won't.

Given that Germany and now Finland don't want to make that kind of ruling, outright default and a eurozone exit looks increasingly likely. Should that happen, the creditor countries will all be worse off than if they did grant a change in terms.

Financial Chicken

What's going on is an amazing game of financial chicken, arguably coupled with financial ignorance. Let's take a look at Finland and Germany's Responsibility should Greece default.

Here is some charts and commentary from Bluff of the Day: Germany Warns "Greece is No Longer of Systemic Importance For the Euro".

Eurozone Financial Stability Contribution Weights

Country	Guarantee Commitments (EUR) Millions	Percentage
Austria	€ 21,639.19	2.78%
Belgium	€ 27,031.99	3.47%
Cyprus	€ 1,525.68	0.20%
Estonia	€ 1,994.86	0.26%
Finland	€ 13,974.03	1.79%
France	€ 158,487.53	20.32%
Germany	€ 211,045.90	27.06%
Greece	€ 21,897.74	2.81%
Ireland	€ 12,378.15	1.59%
Italy	€ 139,267.81	17.86%
Luxembourg	€ 1,946.94	0.25%
Malta	€ 704.33	0.09%
Netherlands	€ 44,446.32	5.70%
Portugal	€ 19,507.26	2.50%
Slovakia	€ 7,727.57	0.99%
Slovenia	€ 3,664.30	0.47%
Spain	€ 92,543.56	11.87%
Eurozone 17	€ 779,783.14	100%

The above table from European Financial Stability Facility

Here's a second table that will put a potential €245 billion default into proper perspective based on percentage liabilities.

Responsibility in Euros

Country	Percentage	Greek Debt Responsibility
Austria	2.78%	6.79875
Belgium	3.47%	8.49317
Cyprus	0.20%	0.479465
Estonia	0.26%	0.62671
Finland	1.79%	4.3904
France	20.32%	49.79527
Germany	27.06%	66.308515
Greece	2.81%	6.88009
Ireland	1.59%	3.88913
Italy	17.86%	43.75651
Luxembourg	0.25%	0.611765
Malta	0.09%	0.221235
Netherlands	5.70%	13.96451
Portugal	2.50%	6.12892
Slovakia	0.99%	2.42795
Slovenia	0.47%	1.151255
Spain	11.87%	29.076355
Eurozone 17	100%	245

The idea that Greece is responsible to cover its own default is of course ridiculous, so mentally spread Greece's €6.88 billion liability to the other countries.

Where is Spain going to come up with €30 billion? Italy €45 billion? France €51 billion?

A quick check shows that Finland would need to come up with €4.3 billion? To Finland, that's a huge pile of money.

Where will any of these countries come up with their share?

The simple answer is they aren't. So, does the ECB print the money in violation of rules and pass it out?

If not, who's bluffing whom regarding "systemic importance" of Greece?

Extreme Irony

Greece was no systemic threat to the eurozone until the Troika foolishly threw €245 billion at Greece hoping to prevent a default.

Curiously, the Troika made Greece a systemic threat by pretending it was, when it really wasn't. And now that it is, they pretend that it isn't.

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

Rabbit Hole Intervention Fails: Wild Moves in Swiss Franc as Switzerland Abandons Euro Peg; Morals of the Story

Posted: 15 Jan 2015 11:50 AM PST

Today in a surprise announcement, the Swiss National Bank abandoned its silly policy of defending a peg to the euro.

Previously, the bank had set a line in the sand, defending the peg at all costs. That policy meant Swiss accumulation of hundreds-of-billions of euros that today plunged in price.

Wild Swings

click on chart for sharper image

32% Move in 30 Minutes

As the above chart from Investing.Com shows, the Swiss Franc soared in value from 1.20-per-euro all the way to 0.82-per Euro.

That is a 32% currency move vs. the euro in a matter 30 minutes! Since then, the Franc declined back to 1.03-per euro.

One week from today, the ECB is expected to announce a massive €1 trillion QE intervention. If the euro declined as expected, the Swiss National Bank would have to accumulate billions more euros to defend the peg.

With that, the Swiss National Bank finally threw in the towel on the euro peg that it promised just last month would defend with "the utmost determination".

Swiss Franc Rockets

The Financial Times has some interesting comments in Swiss Franc Rockets as Currency Ceiling Scrapped.

The SNB's decision highlights the difficulties that central banks of smaller economies such as Switzerland and the UK face as they navigate the turbulent waters between the US Federal Reserve, which is closer to tightening monetary policy, and the ECB, which is poised to loosen it.

It also marks a dramatic volte-face for the SNB, which insisted as recently as December that it remained committed to preventing the franc from strengthening beyond SFr1.20 to the euro, adding that it would enforce the policy with "the utmost determination".

Thomas Jordan, chairman of the SNB's governing board, defended the decision though, saying that once it was clear that the policy was no longer sustainable, it was important to act quickly. "It is better to do it now than in six or 12 months when it would hurt more," he said.

Simon Derrick, chief market strategist at BNY Mellon, said that the SNB had clearly anticipated a huge surge of inflows into Swiss franc assets in the coming days and "saw little reason to provide buyers with an artificially cheap rate".

Rabbit Hole Intervention

Anyone recall my frequent comments about currency intervention?

First in regards to the Japanese yen, then in regards to the Swiss Franc, then in regards to the Russian Ruble, I said currency intervention doesn't work.

In this case, the Swiss National Bank is no longer willing to follow the euro further down the rabbit hole. Can you blame them?

Switzerland's foreign exchange reserves have swelled dramatically since the SFr1.20 target was introduced. At the end of December they had reached SFr495bn — or almost 80 per cent of Swiss economic output — up from SFr257bn at the end of 2011.

Lessons for Polish and Hungarian Borrowers

Borrowed money in Swiss Francs? If so you are now in serious trouble. Please consider Swiss move hits Polish and Hungarian borrowers.

The abrupt move by Switzerland's central bank to abandon its policy of restraining the franc sparked a financial rout on Thursday in Poland and Hungary, where hundreds of thousands of mortgages are priced in the Swiss currency.

Hungarian borrowers will be shielded from a nearly 25 per cent surge in repayment costs, thanks to a conversion programme introduced by prime minister Viktor Orban in November to protect borrowers from foreign exchange risks.

By contrast, the more than €30bn worth of Polish mortgages tied to the franc enjoy no such protection. Citibank estimated that the various currency moves would increase Poles' average repayment costs for franc-denominated mortgages by 17 per cent, which could boost the rate of non-performing loans from its current level of about 3 per cent.

This sparked concerns among lenders on Thursday that public anger could ultimately force Warsaw to try to enact a similar measure retroactively.

Swiss franc denominated credit accounts for about 8 per cent of Poland's total bank assets, but 37 per cent of its total home loans, making it a potential political issue with a general election set to take place in nine months.

Morals of the Story

Don't borrow money in other currencies, especially long-term mortgages.
Don't expect currency interventions to work forever.
Don't believe statements made by central bankers. They are not the economic wizards they are made out to be, and they often lie when it suits their purpose.

Additional Repercussions

This move will shock all of Europe very badly. I doubt it could have come at a worse time. Europe was already heading for a serious recession. This shock wave will make matters worse. And to top it off, the QE coming from the ECB is doomed to fail. It too will make matters worse.

For a discussion of why QE will doom Europe, please consider Steen Jakobsen Warns "Euro is Not a Good Idea and ECB About to Make Biggest Mistake in History"

Gold is up about $25 dollars today, an arguably muted response but certainly in the appropriate direction given all the central bank foolishness that is doomed to fail.

Addendum:

I added point number three. It's an important one: Don't believe statements made by central bankers. They are not the economic wizards they are made out to be, and they often lie when it suits their purpose.

Today may very well be the start of the "recognition phase" that central banks are not in as much control as widely thought.

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

Damn Cool Pics

Your Girl Is Watching You

Posted: 15 Jan 2015 02:48 PM PST

One guy went out on the town with his buddies. Opened his phone to this.

What Macaulay Culkin Is Really Up To Nowadays

Posted: 15 Jan 2015 02:42 PM PST

A lot of rumors get spread around about Macaulay Culkin and his lifestyle. But the truth is he's doing just fine and having a lot of fun with his band The Pizza Underground.

Seth's Blog : Getting unstuck (a one week challenge)

Getting unstuck (a one week challenge)

Winnie failed.

Winnie Kao, who has been leading special projects over the last few months in my office, has something to share. You can check it out here.

She's running a mutual support sprint to help people get on track (or back on track) with their habit of shipping. Here's how it works: Participants commit to posting 1 blog post every day for 7 days. The goal is to practice shipping with a like-minded community and to push yourself to simply start.

Check out her site and the video where Winnie explains the inspiration for the event and details on how to submit your posts. There'll be a Tumblr page featuring everyone's posts, a daily chat room at noon to connect, tweets with #YourTurnChallenge, and an audiostream broadcast at the end to celebrate.

This is a chance to practice shipping for one week within a community. It might be hard but it's doable and it might change you. I hope you'll give it a shot.

PS it works even if you haven't read my new book yet.

PPS of course, Winnie didn't fail at all. She's succeeding, because connecting, leading and doing the work are precisely what we all need to do.

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E-Commerce KPI Study: There's (Finally) a Benchmark for That

Posted: 14 Jan 2015 04:16 PM PST

Posted by ProfAlfonso

Being a digital marketer, I spend my day knee-deep in data. The time I don't spend analysing it, I spend explaining its significance to a client or junior colleague or arguing its significance with a client or senior colleague.

But after many debates over the importance of bounce rate, time on site, mobile conversion rate and the colour grey for buttons (our designer partook in that last one), we're never much closer to an agreement on significance.

Our industry is swimming in data (thanks Google Analytics), but at times we're drowning in it.

Numbers without context mean nothing. Data in the hands of even the savviest marketer is useless without a context to evaluate its performance against competitors or the industry at large.

Which is why we need benchmarks. Through benchmarking, marketers can contextualise data to identify under-performing elements and amplify what is over-performing. They can focus on the KPIs that are important, and recognise whether they are achievable.

Benchmarks also give context to those who aren't familiar with data. One pain point that digital marketers face globally is communicating their performance upwards. There are very few 'digital natives' sitting in company boardrooms these days but plenty of executives who know their numbers inside out.

Industry benchmark data arms us with perspective and framework when we need to communicate upwards. It ensures we get pats on the back when deserved and additional budget released when required.

Google Analytics Benchmarking Reports

Google, you might argue, have already solved these problems.

The upgrade and roll-out of Google Analytics Benchmarking Reports has been met with plenty of excitement for these reasons. With its large data set and nifty options to chop up the data by geography and website size, for a minute it certainly seemed like the benchmarking of our dreams. And while we recognise its usefulness to benchmark against real-time data (comparing a surge of traffic from a particular location for example, or seasonal demands), it still left us short of the hard data insights we were looking for.

We wanted reliable KPI data that went beyond user behaviour. We wanted average conversion rates and average transaction values as well as 'softer' engagement metrics such as bounce rate and time on site.

Most importantly, we wanted to know which engagement metrics actually correlated with the conversion rate, so we could narrow our field of analysis and efforts in pursuit of a healthier bottom line.

Which is why we went out and got our own and generated this e-commerce KPI report.

Data and methodology

We analysed the 56 million visits and approximately $252 million (€214 million) in revenue that flowed through 30 participating websites between August 1, 2013 and July 30, 2014. The websites were in the retail and travel sectors and included both online-only and those with a physical store as well as an e-commerce site.

We averaged stats on a per-website basis, so that websites with high levels of traffic didn't skew the stats. We had more retail participants than travel participants so the average e-commerce figures are not the midpoint between travel and retail but the average figure across all study participants. Revenue is attributed on a last-click basis.

Results

Here is a highlight of some of our most relevant and interesting findings. For all the data and results, download the full report on WolfgangDigital.com.

Average KPIs: Bounce rate, time on site, and conversion rate

First, we calculated some averages across engagement KPIs and commercial KPIs. If you are an e-commerce website in the travel or retail business, you can use these numbers to evaluate how your website is performing when set against a broad swath of your industry peers.

Well, remember the conversion measured here is a sale. If your conversion rate is lower than the study average don't fire your CMO straight away; check if your average transaction value (ATV) is higher. If they balance each other out you are all good – if they don't, it's time to start digging deeper. Does the 1.4% conversion rate give you a smug tingly feeling or a stab of panic?

We often break down conversion rate into two parts: website-to-basket and basket-to-checkout. Industry norms tell us expect about 5% CR on website-to-basket and 30% on basket-to-checkout. Check which one of these conversion rates is most out of kilter on your site, then focus your attention there. This exercise will often give greater visibility on where the hole in your bucket is, Dear Liza.

Another factor in this analysis is that online-only retailers tend to enjoy higher conversion rates as the consumer must transact via the website. If you have an offline presence, a lower conversion rate comes with the physical territory as your site visitors may convert in store.

KPIs by device: Mobile under scrutiny

Next, we segmented the data by device: desktop, tablet and mobile.

We found that although mobile and tablet together accounted for nearly half of website traffic (43%), they contributed to just over a quarter of revenue (26%).

Mobile alone accounted for 26% of traffic but only 10% of revenue. This suggests that while mobile is a favoured device for browsing and researching, it's the desktop where users are more likely to whip out the credit card.

When we looked at conversion rates by device, this confirmed it.

What data matters: The correlations

We wanted to know which engagement figures had an influence (if any) on commercial ones.

Then we'd know which behavioural metrics were worth trying to improve to lift conversion rate, and which metrics we could finally label insignificant.

We did this by calculating correlations. A correlation ranges from 0 to 1, so 0 indicates on no correlation at all, while 1 signifies a clear correlation. A negative correlation indicates that as one variable increases the other decreases.

Time on site (0.34) and pages viewed (0.35) both had positive correlations with conversion rate, so our advice is to look at how to improve these metrics for your site to benefit from a higher conversion rate.

We delved into the device data and found mobile was the only device with positive traffic (0.29) and revenue (0.45) correlations to overall conversion rate. In fact, that 0.45 correlation rate between mobile revenue % and conversion rate was actually the strongest correlation rate across all factors we measured.

We infer that while the mobile conversion rate is depressingly low, a mobile user is still somebody with purchase intent who is likely to convert later on another device. The lesson we took from this is to make sure your website is mobile-optimised, particularly for ease of research and browsing content.

Finally, the time came to talk about bounce rate. Our Excel wizard had converted the data to an 'un-bounce rate' (1 minus the bounce rate) for consistency with positive time on site and pages viewed metrics. We gathered round the spreadsheet.

He revealed there is actually a negative correlation (-0.12) between un-bounce rate and conversion rate. This correlation signals that it couldn't be less influential on conversion rate, so for those unable to sleep at night for bounce anxiety, we're delighted to let you sleep easy.

Increasing your conversion rate may not be as complex a task as it seems.

Our KPI study shows that if you can increase pages viewed and time on site it will push up your conversion rate (content marketing for conversion optimisation anybody?).

We've also proved that mobile matters. Don't be discouraged if your mobile conversion rate pales against desktop's performance; keep driving mobile traffic and revenue (however minor) and you'll see the difference in your bottom line.

Read the full results broken down by industry level by downloading from the Wolfgang Digital e-commerce KPI Study.

Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Seth's Blog : Plyometrics

Plyometrics

Explosive action. Training by jumping from a standing start. Not worrying about getting up to speed, but going from standing still to flight.

Not everyone needs to be good at this, but you can bet that most organizations need people who are.

Not, "I'll think about it," or, "I'll ask Susan what her take is," or, "Let's reconvene tomorrow..." but, instead, words like, "go," and "now."

Plyometrics is an attitude, the willingness (the bravery) to try things on small groups, in controlled situations, to say, "here, I made this."

It's not a slipshod way of doing business for your core customers (that's another form of hiding). No, it's the posture of urgency.

Will you leap?

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vineri, 16 ianuarie 2015

Seth's Blog : You are what you share

You are what you share

More Recent Articles

joi, 15 ianuarie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Seth's Blog : Getting unstuck (a one week challenge)

Getting unstuck (a one week challenge)

More Recent Articles

E-Commerce KPI Study: There's (Finally) a Benchmark for That