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luni, 11 mai 2015

My first week as a digital executive

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Toasted

Just about everything tastes better toasted.

One reason is the physics of the maillard reaction.

But more than that, I think, is the realization that toast is:

Custom made (for you)

With care (so it doesn't burn)

Ephemeral (cold toast is worthless)

Here's a little treat, something extra I did that wasn't necessary, for you, right now, here, I made this.

I wonder what else (ideas, services, products, relationships) could be toasted? Just about everything, I think.

• Email to a friend •

duminică, 10 mai 2015

Mish's Global Economic Trend Analysis

Merkel's Own Party Ready to Give Up on Greece; Another Week of Deadlines; Reflections on Can Kicking
Capitalism for Me, Socialism for Thee; Progressive Capitalism?
What Remains of the UK Middle?

Merkel's Own Party Ready to Give Up on Greece; Another Week of Deadlines; Reflections on Can Kicking

Posted: 10 May 2015 11:12 PM PDT

German Chancellor Angela Merkel is increasingly isolated in her stance on Greece.

Growing Pressure From Within the ranks of her own party bloc to give up on Greece for the sake of the euro.

Members of Merkel's Christian Democratic bloc are openly challenging her stance of keeping Europe's most-indebted country in the 19-nation currency region. Even some officials in the Finance Ministry are leaning toward the conclusion that the euro area would be better off without Greece, two people familiar with the matter said.

"The euro would be strengthened if Greece left," Alexander Radwan, a Merkel-affiliated lawmaker who voted for granting Greece a temporary extension of its bailout in February, said in an interview. "The other countries could then move closer together and apply the rules more strictly."

Finance Minister Wolfgang Schaeuble, a prominent German advocate of European unity for decades, has given plenty of signs of exasperation with Greece since Tsipras and Finance Minister Yanis Varoufakis took office in January on an anti-austerity platform.

He told an Austrian television interviewer on March 12 that he could envisage a Greek exit from 19-nation currency. On a panel in Berlin the next week, he accused Greek authorities of lying to voters by failing to tell Greeks that they "lived way above their means" for decades.

As talks between Greece and its creditors drag on, the view that the euro would be stronger without Greece is gaining ground in Merkel's Christian Democratic-led bloc, according to two lawmakers. They asked not to be identified because they don't want to publicly challenge Merkel.

"Having its own currency could help Greece get back on its feet," Hans-Peter Friedrich, one of 29 lawmakers from Merkel's bloc who voted against extending Greece's aid program, said in an e-mailed answer to questions.

Another Week of Deadlines

Bloomberg reports Greece Readies for Another Week of Deadlines.

Warnings of an accidental default loom over debt-swamped Greece as Prime Minister Alexis Tsipras' anti-austerity government heads for another confrontation with an increasingly testy German-led bloc of creditors.

Greece needs at least a symbolic show of progress at Monday's meeting of euro-area finance ministers in Brussels to persuade the European Central Bank to keep emergency funds flowing to Greek banks at the current pace. The next hurdle comes just a day later, when Greece has to pay about 750 million euros ($840 million) to the International Monetary Fund.

"Experience elsewhere in the world has shown that a country can suddenly become unable to pay its bills," German Finance Minister Wolfgang Schaeuble said in an interview with Frankfurter Allgemeine Sonntagszeitung published Saturday. Schaeuble said if Greece is forced out of the euro "it won't be because of us."

An accord "will surely not be reached at the Eurogroup meeting on Monday," Dutch Finance Minister Jeroen Dijsselbloem, the meeting's chairman, told Italy's Corriere della Sera newspaper. "We will need more time, but I don't know how much." The meeting starts at 3 p.m.

Whether Greece yields before the northern creditor governments' patience snaps is an open question.

Inevitable Taking Forever

The inevitable default is damn near taking forever. Even if all the parties come to some sort of agreement for June, Greece is going to need a third bailout and the whole process starts over.

This time though, everyone needs to seal the deal on not one but two agreements in a very short period of time.

Why has this taken forever?

Because Merkel's position appears to be "not on my watch", and no one in Greece wants to take the blame. So everyone pretends that some sort of lasting solution is possible.

Can kicking can only last as long as there is a can to kick. This can is nearly rusted away.

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

Capitalism for Me, Socialism for Thee; Progressive Capitalism?

Posted: 10 May 2015 04:25 PM PDT

A self-proclaimed "progressive capitalist" (hypocrite) store owner in San Francisco complains about Proposition J which voters passed with a 77% approval rate hiking the minimum wage to $15.

Capitalism for Me Socialism for Thee

The National Review details the plight of Brian Hibbs, owner and operator of Comix Experience, an iconic comic-book and graphic-novel shop on San Francisco's Divisadero Street, of the city's new minimum-wage law.

Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. "I was appalled!" he says. "My jaw dropped. Eighty-thousand a year! I didn't know that. I thought we were talking a small amount of money, something I could absorb."

He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It's not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can't raise prices, because comic books and graphic novels have their retail prices printed on the cover.

Hibbs is not the first person to encounter this problem. On February 1, San Francisco's renowned science-fiction bookstore Borderlands Books published the following on its website:

Although all of us at Borderlands support the concept of a living wage in principle and we believe that it's possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st.

Its plight eventually drew the attention of The New Yorker, and a crowdfunding campaign thought up by concerned customers found some 300 sponsors, all of whom agreed to pay $100 to help keep the store afloat until at least March 31, 2016.

Hibbs has considered doing the same but notes two problems: "By saying, 'Give me money,' you're sort of saying you're not viable." Furthermore, "There's a limitation on how much crowdfunding can be done. When you're the tenth one, I don't know if it's going to be easy for you."

"Despite being a progressive living in San Francisco, I do believe in capitalism. I'd like to have the market solve this problem."

"We're for a living wage, for a minimum wage, in principle. . . . But I think any law that doesn't look at whether people can pay may not be the best way to go."

"Why," he asks, "can't two consenting people make arrangements for less than x dollars per hour?"

Progressive Capitalism?

There is no such thing as "progressive capitalism". The idea is as ridiculous as being a Jewish Christian Atheist.

Curiously he asks "Why can't two consenting people make arrangements for less than x dollars per hour?"

Yes, good question. I have another: did you vote for that inane proposition?

"By saying, 'Give me money,' you're sort of saying you're not viable", says Hibbs.

Then, to stay in business Hibbs launched a "Graphic Novel-of-the-Month Club". The website does little more than beg for money disguised as a campaign to "HELP KEEP COMIX EXPERIENCE ALIVE!".

Just as with crowd sourcing, such tactics may help one or two businesses for a while, until the novelty of the "save the bookstore" mentality wears off.

With Proposition J, San Francisco put thousands of small businesses out of business. That's what "progressive" living wages do, no matter what ridiculous label you put on it. One thing is for sure, it isn't capitalism.

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

What Remains of the UK Middle?

Posted: 10 May 2015 10:55 AM PDT

In regards to the UK election, a friend recently commented something along the lines of "this is a victory for the middle" whereas I stated Clean Sweep by UK Conservatives Masks Huge Rifts.

Here's a nice Tweet by Simon Hix that shows a more polarized election.

Result

SNP, the Scotland National Party, is just as extreme if not more extreme than the Labour income distribution fruitcakes. The difference is SNP wants out of the UK. Thus, the left went more left albeit with a nationalist twist.
UKIP is the third largest party and they want out of the EU.

This was a victory for Cameron's election strategy. It was not a victory for the "middle" in any realistic sense.

If Cameron keeps his word, an up-down vote on the UK leaving the EU is around the corner.

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

Seth's Blog : "But how can you be sure?"

"But how can you be sure?"

100% certainty is not a variation of 96% or even 99%. It's a totally different category.

Certainty is binary, yes or no. The question, "are you sure it will work" is not about the work, it's about the sure. If you need to know that it's going to work, then you've committed to a very clear path. Some people go to work or school and do nothing except the things that they are sure about.

The other path is to do things that might not work. Work, projects designed to land on the spectrum of not sure.

When someone asks, "Do you have any case studies and rules of thumb from my industry about how someone in precisely the same circumstances did x and got y," it's pretty clear that they seek reassurance and a promise of certainty.

But all the good stuff comes from leaping. From doing the things that might not work.

• Email to a friend •

sâmbătă, 9 mai 2015

Mish's Global Economic Trend Analysis

Atlanta Fed "Keeps Faith in Strong Recovery"

Posted: 09 May 2015 09:54 AM PDT

Eyes on the Consumer

The Atlanta Fed Macrobblog has All Eyes on the Consumer.

It appears that the first quarter may have been even worse than we thought. The CNBC Rapid Update consensus estimates from a panel of forecasters registered a decline of 0.3 percent as of yesterday.

Clearly, the year didn't start out so well, but here at the Atlanta Fed we have not yet lost faith. We are sticking to the narrative that 2015 will be another solid year of recovery.

Faith Based Economy

Why does the Macroblog have faith in a strong recovery? They base it on faith of A Linchpin of Consumer Spending] Growth of Atlanta Fed governor Dennis Lockhart.

What's up with the consumer? It's puzzling. The fundamentals supporting consumption growth seem strong. I consider consumer fundamentals to be real personal income growth, household wealth, access to credit, and consumer confidence. Consumer confidence is, in turn, highly influenced by the broad employment outlook.

Let's look at these factors. Growth of real disposable income (income after taxes, inflation-adjusted) jumped in the first quarter, partly because falling gasoline prices brought a decline in overall consumer prices. And real income is up almost 4 percent over the past year.

Puzzling Not

I don't believe it's puzzling. Incomes are up, but so are medical costs. Fast food prices are poised to jump due to minimum wages hikes.

Here's the most important factor: 1 in 4 renters spend half their income on housing, a paycheck away from homelessness

For more than one in four renters in the US, housing and utility costs take up at least half of their family's income, according to a new analysis of Census data. That number is up 26 percent since the beginning of the Great Recession in 2007.

The situation is nearly as dire across the nation. In Ohio, Alabama, Maine, Tennessee, Montana, and South Carolina, about 25 percent of renters dedicate half their income to rent and utilities. In fact, at least 20 percent of renters in every state, excepting Alaska, South Dakota, and Wyoming, face similar situations, according to the nonprofit's analysis of 2013 Census figures.

It's not just lower income Americans who are in precarious positions. A third of higher income Americans are living paycheck-to-paycheck -- even when they earn $75,000 a year -- due to a lack of prioritizing for retirement, according to a recent survey.

And those are 2013 figures. Rent has gone up more than wages. So has cost of medical care. And who needs more junk anyway?

Nonetheless Macroblog presses on based on a model.

Spending Model

The chart below illustrates an experiment based on a simple model that incorporates President Lockhart's description of "fundamentals." To be even more precise, we ask the following question: What would we have predicted for consumer spending growth during the past four months based on the history of actual consumer spending and its relationship to income, employment (and unemployment), confidence measures, and wealth (specifically, equity prices)? We also threw inflation and oil prices into the mix for good measure.

In other words, the "fundamentals" suggest the four-month annualized growth of consumer spending should have been in excess of 4 percent, as opposed to the approximately 1.5 percent we actually saw. That is a story we don't expect to persist, and our current view of the year is that first-quarter consumer spending results are not indicative of future performance.

Consumers are, of course, a forward-looking bunch, and it is possible the recent weak spending reflects a looming reality not captured by the simple model described above. But our forecast for now is that consumers will move to the fundamentals, and not vice versa.

As President Lockhart said in Louisiana: "Stay tuned."

Stay Tuned

Yes, please stay tuned. Meanwhile, note Gasoline Prices Rev Up for Summer. The price of gas at the pump is up 31% since January.

But hey, keep the faith.

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

luni, 11 mai 2015

My first week as a digital executive

Seth's Blog : Toasted

Toasted

More Recent Articles

duminică, 10 mai 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Seth's Blog : "But how can you be sure?"

"But how can you be sure?"

More Recent Articles

sâmbătă, 9 mai 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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