Wednesday, December 31, 2008

2008: An Extraordinarily Long Year

2008 is rapidly winding down. If it seems like it's been a long year, it's because it has been.

Tick tock ... tick: Extra second added to 2008
Those eager to put 2008 behind them will have to hold their good-byes for just a moment this New Year's Eve.

The world's official timekeepers have added a "leap second" to the last day of the year on Wednesday, to help match clocks to the Earth's slowing spin on its axis, which takes place at ever-changing rates affected by tides and other factors.

The U.S. Naval Observatory, keeper of the Pentagon's master clock, said it would add the extra second on Wednesday in coordination with the world's atomic clocks at 23 hours, 59 minutes and 59 seconds Coordinated Universal Time, or UTC.

That corresponds to 6:59:59 p.m. EST (23:59:59 GMT), when an extra second will tick by -- the 24th to be added to UTC since 1972, when the practice began.

The first leap second was introduced into UTC on June 30, 1972. The last was added on December 31, 2005.
Five Themes For 2009

Please take more than an extra second to ponder Five Themes You Need to Know for 2009.
Before we get to 2009, first, think back to a year ago. Deflation was barely on the radar of mainstream economists and financial media. Most viewed it as an impossibility, focusing instead on what was supposed to be the resurrection of the commodities bull market.

Even today, while paying deflation minor lip service here and there, the vast majority of economists and financial media are ill-prepared for just how severe this ongoing deflationary credit contraction and debt unwind is going to be.

Consequently, if there is one theme that stands above all else in 2009, it will be this: The despair that unfolds as the point of recognition emphasizes the "de-" in deflation. The fat is in the fire.

....

2. Putting the "De-" In Deflation

As declining risk appetites manifest in nearly everything in 2009, from our collective views on financial risk to our tastes in culture, music, film and fashion, we will see a focus on declines, destruction and devaluation. Perhaps nowhere will this be more obvious than in the disintegration of large-scale social networks into smaller, more focused and intimate groups.

While peak social mood helped propel the movement toward increasingly open social networking platforms and large scale interactions, the rush to disassociate from the crowd will inevitably manifest as a reduction in broad network exposure and a preference for close-knit, tighter communities. Beneficiaries of this movement will be families, small groups and, to an extent, neighborhoods.

...

5. Markets: Gold Declines, Dollar Rises, Interest Rates Hover at Unimaginable Lows

I recently covered in the article, "Bear Markets Ain't Over 'Til They're Over," the reasons why I believe probabilities favor dramatic new stock market lows in 2009, but what about the other asset classes, gold, currencies and bonds?

It is no secret that in a deflationary debt unwind all asset classes suffer absolute declines. In a relative sense some asset classes may fare better than others, but the problem remains that you can't spend negative relative outperformance.

As for commodities and precious metals, look for 2009 to begin optimistically with commodities retracing some of their disastrous declines this year. Gold is also in the late stages of another attempt at cracking the $1,000 level. Unfortunately, the purpose of deflationary debt unwinds is to crush the spirits (and speculative juices) of all who attempt to participate in financial markets. The point of recognition for this deflationary debt unwind will culminate in another wave of intense selling pressure as the last speculators standing give up.

There has been no shortage of top callers in the bond market of late. From a technical standpoint bonds certainly begin the year with the rubber band stretched painfully to the upside. But do not underestimate the power of deflationary forces to keep a floor under bond prices as interest rates hover at lows that, as recently as a year ago, seemed unimaginable.

So there you have it. Only 366 days until 2010. That's the good news. When all is said and done, perhaps the best thing that will be said of 2009 is that it only lasted a year.
Kevin Depew is always a great read. I encourage you to read the above article in entirety. There's three more points well worth reading. You may even wish to consider bookmarking him. I have.

However, I would be remiss if I did not point out the following: 2009 will be one day and an additional second shorter than 2008. We can all be thankful for that.

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

How to improve your visual memory for artist part 1

How to improve your visual memory and skill.
Visual and photographic memory slot in your head is very important and the most valuable asset if you are an artist.
Here are some tips to help you improve you visual ability and collect more images, visual, and photographic memory capacity in you mainframe.

Cognitive level
In the evening, make a film of the day and review it in your imagination; visualize the most impressive events and all the people you've seen When you think of someone, try to see him in your visual imagination.

When you are reading or typing something on your computer, pay special attention to the actual form of the letters and words with their correct spelling. Close your eyes and see the words or even the numbers mentally.

Behavior level
Imagine that you are being watched. Pay attention to the expression on your face, smile when talking to people, make funny faces.

Think of the world as a movie screen, think of yourself as an actor facing his/her audience. Visualize yourself in a positive way.

The benefits of developing visual skills
Sight is a very stimulating sense. When you pay attention to images you can keep yourself alert and busy.

Mental images contain enormous amounts of information so it is a great way to help your memory and maintain a sharp mind.

When you are conscious of your image, it helps you to improve it and it even requires you to do so as it would be difficult to tolerate an unflattering image once you are conscious of it on a regular basis. You then dress better, you take better care of yourself and this can increase your self esteem.

Anyway, I hope this help some how.
Cheers and looking forward for everyone to step forward ad improve in every way in 2009.

Related posted:
-Painting Checklist for artists

New tutorials:
-Draw Female spy comics style
-How to draw witch hunter
-How to draw a woman
-How to draw Manga female character
-Draw Metal Gear girl assassin.
-Drawing Manga woman face, hair, and torso
-Painting portrait front view
-Painting portrait profile or side view
-Painting portrait 3/4 view

FEATURE TUTORIAL:
Environmental Concept Sketch Tutorial
Face Constructed: How to draw faces
Face Constructed: How to paint portraits
-Draw and Paint Women Body Tutorial I: Female Manga Fusion I
-Draw and Paint Women Body Tutorial II: Female Manga Fusion II
-Character Design Tutorial: Dark Valkyrie

** If you have any basic questions or specific please looked up Q/A section. Most of the time your questions has already been answered in Q/A.

If you need any help or support you can
-post questions or comment on the post (seems to be the fastest way to get response)
Peace,

Year in review

Well chickees...this is my 99th post! Holy crap, I'm not kidding. Interesting, because I started this blog in May, and only had about 20 posts in my first four months. Shows you how into this bloggy stuff I got in about...September or so?

For my 100th post I have a very cute (but small) giveaway to give to one of you. Can't wait to show you. It's not really a big deal, just fun. :)

What's with me just DYING to take down Christmas early this year? I usually wait till the 1st or after but I have been chomping at the BIT to get it down this year. What's the deal? I can barely wait to get it up and LOVE it during the season. There is just something about this time of year though too -- the clean, fresh house. I swear I fall it love with our home all over again right after the holidays. It's so cleared out and simple.

So Jules over at The Roost is having a fun New Year's Party that I thought would be fun to join. I put a different spin on it though, and picked the top ten commented posts to highlight here for your pleasure. (Or to help you take a nap, whatever works.)

Heeeeeeeere we GOOOOOOOOOOOOOO!!














No. 4: Big Fat Honkin' Monogram.






No. 2: One of my favorite before and afters.






Well there you go ladies! A year -- well, eight months, in review. I hope you have enjoyed reading as much as I have enjoyed writing and sharing. Here's to another year of fun ideas and tons o' comments!

Happy New Year!!

CS-CPI Negative 3.1% Year over Year in November

"Owners' Equivalent Rent" (OER) is the largest component in the government measure of the Consumer Price Index (CPI). OER is a process in which the BEA estimates what it would cost if owners were to rent the homes they own from themselves. I do not believe this to be a valid pricing baramoter.

By ignoring housing prices, CPI massively understated inflation for years. The CPI is massively overstating inflation now.

The following chart (courtesy of my friend "TC") shows what happens If one substitutes the Case-Shiller housing index for Owners' Equivalent Rent in the CPI.

Case-Shiller-CPI (CS-CPI)



click on chart for sharper image.

In spite of massive cuts in the Fed Funds Rate to zero, real interest rates are still positive by 3.1%!

Data for the above chart is from two sources.


CPI for All Urban Consumers (CPI-U)



click on chart for sharper image

On a seasonally adjusted basis, the CPI-U decreased 1.7 percent in November, the second consecutive record decrease. For the 12 month period ending in November the CPI was up 1.1 percent, compared to 5.6 percent for the twelve months ending July of this year.

Notice the numbers in the red box. The BLS is reporting housing dropped .1 percent month over month but rose 2.7% year over year. In contrast the Case-Shiller 20 city composite is down 18% year over year.

Those watching the CS-CPI have not been shocked by the dramatic plunge in long term interest rates. Those watching CPI-U were screaming "bond bubble" and shorting treasuries at 5%.

10-year treasuries are now close to 2% and most missed the biggest bond rally in history.

In normal times with rents in sync with home prices, it did not matter much if one used OER or actual home prices. It's a remarkably different story now. We have just seen the biggest housing bubble in the history of the world. At the peak of insanity, home prices were 3 standard deviations above rental prices and 3 standard deviation above wage growth.

Now, the important factor is that home prices are crashing, with quite a big drop still needed to get back to historic norms. With that in mind, housing can be expected to be weak for quite some times.

The treasury market seems to have figured all this out quite nicely. Those screaming "treasury bubble" clearly have not.

In summer of 2005 the above chart shows the CPI at just over 4% with the Fed Funds Rate just under 4%. CS-CPI, a better measure of the CPI, was near a whopping 8%. Thus real interest rates were stunningly low starting in 2003. The Fed kept interest rates too low for two years. This clearly contributed to the housing bubble.

The Situation reversed in Autumn of 2006 with the Fed Funds rate at 5.25% and CS-CPI under 1%. This helped pop the bubble (a good thing) but it would have been better to not have the bubble in the first place.

Notes From "TC"

1. The "relative importance" or weight of OER has changed over time - it was 19.10 in 1987 and is now 23.942. I've included the yearly weight within the data.

2. The Case-Shiller 20 city composites represent sales that are a couple months old while the CPI reflects the previous month.

3. I've modified the CS-CPI to reflect the 20 city Case-Shiller index vs. the National Case Shiller index used in last month's chart. The quarterly national index lags by far too much.

4. For Nov 2008 the CS-CPI was a whopping negative 3.1% YOY as compared to a positive 1.7% for CPI-U.

5. The divergence between the two CPIs is increasing as the Government OER data continues to move higher. In fact since the housing market's peak in July 2006 the 20 city Case-Shiller index has declined over 24% while the Government's OER has increased nearly 7%. Deflation is clearly here, and the treasury market is responding to it. You just have to know where to look.

Do home prices belong in the basket?

I have had many people over past year tell me they do not care about home prices because they rent, or tell me that do not care about home prices because they own their home outright, or tell me they do not care about home prices because their house is a long term investment.

People may not care (or more realistically they may think they do not care), but the treasury market sure cares about something, and the most likely something is the destruction of wealth in housing along with the ramifications the housing market has on bank credit, corporate earnings, consumer attitudes, etc.

It's true that a person does not buy a home every week but that same person does buy food and gasoline every week. However, that does not make the price decline any less real. More importantly, it is naive to think treasuries should ignore the ongoing destruction of wealth in housing and the bank writeoffs that bust is causing.

Let's look at this from a practical standpoint. What's more important, home prices dropping $50,000 to $250,000 in value over the course of a few years or the price of gasoline going from $2.00 a gallon to $4.00 a gallon over the course of those same few years?

From a macro-economic standpoint, the correct answer to the above question is housing even though consumers were constantly griping about gasoline prices until the recent selloff. The easily seen is gasoline price hikes because people buy it every week. Practically speaking, the destruction of housing wealth matters far more. Here is the question to ask: How many tanks of gas will it take to equal the loss of $50,000 on a house?

On this basis, the so-called "irrational behavior" of the long bond specifically, and the entire treasury curve in general, does not seem so irrational.

Is there Justification For This Methodology?

For the record, I do not think it is possible to easily define and measure the prices of a representative basket of goods and services. However, CS-CPI makes more sense than the widely used CPI basket. It at least explains the so-called "irrational bond market" and also "Greenspan's Conundrum". I argue the treasury market could see the deflationary credit bust coming that Greenspan helped create.

Thus while one can dismiss the theory, I counter that it explains what happened in practice, and that is what matters. From a practical standpoint alone, housing is a consumption item requiring continual maintenance, not a bond one can hold to maturity and forget about. Also from a practical standpoint, CS-CPI properly accounts for home ownership instead of attempting to figure out how much rent one would pay renting a house from oneself.

Finally, the CS-CPI clearly show that the Fed overshot in both directions by misinterpreting or just plain ignoring the data that it had. This is further proof that it is time to abolish the Fed and let the market set rates.

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

Case Shiller and CAR Analysis December 2008 Release

California Association of Realtors C.A.R. Data

The following chart is from my friend "TC" who has been monitoring California Association of Realtors (C.A.R.) and DQNews data. C.A.R. data contains resale single family residences and new homes. DQNews data contains resale single family residences and new homes.



Median nominal prices in CA are now down 52% according to CAR and 46% according to DQNews - and those declines are in 18-19 months!

Case-Shiller is a more accurate way of looking at home prices than median prices. Case-Shiller data follows.

Case Shiller December Release

Inquiring minds are considering the Case Shiller Home Price Release for December 2008.

New York, December 30, 2008 � Data through October 2008, released today by Standard & Poor�s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, shows continued broad based declines in the prices of existing single family homes across the United States, with 14 of the 20 metro areas showing record rates of annual decline and 14 now reporting declines in excess of 10% versus October 2007.

The chart below depicts the annual returns of the 10-City Composite and the 20-City Composite Home Price Indices. Following the lead of the 14 metro areas described above, the 10-City and 20-City Composites set new records, with annual declines of 19.1% and 18.0%, respectively.

�The bear market continues; home prices are back to their March, 2004 levels.� says David M. Blitzer, Chairman of the Index Committee at Standard & Poor�s. �Both composite indices and 14 of the 20 metro areas are reporting new record rates of decline.

As of October 2008, the 10-City Composite is down 25.0% from its mid-2006 peak, and the 20-City Composite is down 23.4%. In October, we also saw three new markets enter the �double-digit� club. Atlanta, Seattle and Portland are reporting annual rates of decline of 10.5%, 10.2% and 10.1%, respectively.



click on chart for sharper image

Case-Shiller Declines Since Peak

The following charts were produced by my friend "TC" who has been monitoring Case-Shiller Data. Although individual cities topped at varying times, the top-10 and top-20 city composites peaked in a June-July 2006 timeframe.

Case-Shiller Declines Since Peak Current Data



click on chart for sharper image

Case-Shiller Declines Since Peak Futures Data



click on chart for sharper image

"TC" writes:
With regards to today's release of the Case-Shiller index it's more of the same. Prices continue to head south as all 20 metros tracked by CS moved lower in Oct 2008.

Prices have now declined by 10% or for all but 3 metros and only Charlotte and Dallas have escaped any meaningful decline. Lastly, the futures continue to indicate a Fall 2010/Spring 2011 rebound; although this needs to be viewed skeptically as the volume is razor thin.
Thanks "TC"

With unemployment poised to rise in 2009 it is extremely unlikely that housing bottoms anytime soon.

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

200,000 Retail Store Closings Coming in 2009

This Christmas season was the worst ever for many retailers. And with too many stores and too few customers, expect to see A Rash of Retailer Closings in 2009.
The most dramatic pullback in consumer spending in decades could transform the retail landscape, as thousands of stores and whole malls close down. And analysts expect prolonged woes in the industry as the dramatic changes in shopping behavior could linger for another two or three years amid worries about the deteriorating economy and rising layoffs.

"You are going to see a substantial retrenchment in the retail industry," said Rick Chesley, partner in the global bankruptcy and restructuring group at international law firm Paul Hastings. "The downturn has been catastrophic."

The retail casualties, which were first among home furnishing stores and then many apparel stores over the past year or so, are expected to cut across all sectors as shoppers have slashed their spending on non-essentials, from TVs to jewelry.

About 160,000 stores will have closed this year and 200,000 more could close next year, said Burt P. Flickinger III, managing director of consulting firm Strategic Resource Group. That would be the industry's biggest contraction in 35 years. Flickinger expects 2,000 to 3,000 malls to close in March and April.

AlixPartners, a turnaround consulting firm, predicts that 25.8 percent of 182 major retailers it tracks are facing major financial distress or will face a significant risk of filing for bankruptcy next year or in 2010 -- the highest level in the 10 years that the firm has been compiling the figures. That compares with the 4 percent to 7 percent that it predicted would face financial woes in the previous two years.
Wave of Bankruptcies and Closures Coming

International Council of Shopping Centers comes up with a different set of numbers numbers as reported by Bloomberg in Holiday Sales Drop to Force Bankruptcies, Closings.
U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years.

Retailers may close 73,000 stores in the first half of 2009, according to the International Council of Shopping Centers. Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.

�You�ll see department stores, specialty stores, discount stores, grocery stores, drugstores, major chains either multi- regionally or nationally go out,� Flickinger, managing director of Strategic Resource Group, a retail-industry consulting firm in New York, said today in a Bloomberg Radio interview. �There are a number that are real causes for concern.�

Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said this month during a panel discussion held at Bloomberg LP�s New York offices. Only retailers with healthy balance sheets will survive the recession, according to Matthew Katz, a managing director at consulting firm AlixPartners LLP.

The ICSC predicts, using U.S. Bureau of Labor Statistics data, that 148,000 stores will shut down in 2008. That would be the largest number since 151,000 closings in 2001, during the last recession, according to ICSC Chief Economist Michael Niemira.

Retailers� pricing models are being challenged by consumers, according to Richard Hastings, consumer strategist at Global Hunter Securities LLC of Newport Beach, California.

�The whole pricing system is becoming an old-fashioned bazaar,� Hastings said today in a telephone interview. �They�re going into the stores and they�re looking at the stuff and they�re saying �You know what? I know that that price is way too high,� and they have figured out that the signage doesn�t mean that much.�
List of Retail Store Closings

Terri Potratz has a List of Retail Store Closings in US. Most will recognize the names on the list.

Evidence is now irrefutable that the Shopping Center Economic Model Is History.

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

Tuesday, December 30, 2008

Painting Lesson check list, tip and technique for artists

Painting Lesson check list, tip and technique for artists.
Here are the checklist that you should have them memorized or make a flashcard. It is very useful to look at it before, during and finishing the painting.
FYI: I adopted the following key point in this check list for digital painting from master painter Richard Schmid. It is very useful key points for me to check my own painting over the past year or so. Observation and criticism of your work is the key.

Here are the painting check list to make you work the best it could possibly be
1) Careless drawing (accurate measurement and such)
2) Too many sharp edges.
3) Trying to paint things instead of shapes (Very KEY*** patches or shapes of value)
4) Painting more values than are necessary
5) Incorrect temperature transition (if you have cool shadow then the shadow stay only cool shade)
6) Muddy color or not confident blurry color
7) Unsuitable brushes
8) Working too much on detail instead of focusing on the overall image.
9) Overwork what should be left alone.
10) Values and edges
11) Too many highlights or hot spots.
12) Aimless brush strokes hoping to get lucky.
13) Poor selection of pigments and palette.
14) Timidity and lack of confident (fear of making mistake usually resulting in muddy)
15) Color should be clean and clear

These are some what a basic check list that will help you improve every time you paint. If you wonder why is your painting is not coming out the way you would like it to be then go through this list one by one...I am sure you will find this very helpful.

This list is up to your own interpretation because I didn't come up with it. But if you have any question I will try to point you the best I can, in my own interpretation, to the correct way.

Peace!

New tutorials:
-How to draw X-men, Gene Gray
-Draw Female spy comics style
-How to draw witch hunter
-How to draw a woman
-How to draw Manga female character
-Draw Metal Gear girl assassin.
-Drawing Manga woman face, hair, and torso
-Painting portrait front view
-Painting portrait profile or side view
-Painting portrait 3/4 view

** If you have any basic questions or specific please looked up Q/A section. Most of the time your questions has already been answered in Q/A.

If you need any help or support you can
-post questions or comment on the post (seems to be the fastest way to get response)
Peace,

Economic Potpourri December 30, 2008

The barrage of noteworthy economic news continues as we head into the new year. Here are a few headline news reports of interest from the past couple days.

Japan mulls scheme to buy bad loans
Japan's government and central bank are considering a $110 billion scheme to buy bad loans and other financial assets from banks to ease a credit crunch gripping the country's businesses, daily Sankei Shimbun said on Tuesday.

Such a scheme would come on top of Tokyo's efforts to keep the world's second-largest economy from sliding deeper into recession as the global credit crisis hurts exports and corporate funding conditions tighten.

The government has announced extra spending plans and its biggest ever budget for the next fiscal year, while the central bank cut interest rates to near zero and offered to temporarily buy commercial paper outright earlier this month, echoing some of the emergency steps taken by the U.S. Federal Reserve.
Venezuela to seize gold concessions as oil falls
Venezuela will seize several gold mining concessions that previous governments granted private operators, in a bid to supplement falling oil prices with proceeds from state-controlled gold, President Hugo Chavez said Saturday.

Chavez named no specific contracts or companies to be affected, but his mining minister has vowed to next year take over the nation's largest mine, Las Cristinas, which is operated by Canadian mining company Crystallex International Corp.

"We are taking back some concessions that former governments have given, and whose permits are still held by some rich people," in order to reduce public reliance on oil, Chavez said.

Chavez acknowledges that oil prices � down 70 percent since topping $147 a barrel in July � will affect Venezuela, but he insists the wealthy will suffer more than the country's poor, who benefit from social spending programs that he vows to continue.

"Social investment will not be halted," Chavez said Friday. "This, for us, is sacred."
Saks, Macy�s Discounts Spark Vendor Spat After Holiday Slump
Clothing makers, balking at the deep holiday discounts offered by retailers such as Macy�s Inc., may force department stores to eat more of the markdowns.

Liz Claiborne Inc., HMS Productions Inc. and a raft of apparel companies plan to push back at the retailers who have slashed some prices by 70 percent amid what�s shaping up as the worst holiday shopping season in four decades.

Apparel manufacturers and department stores will meet before the retail fiscal year ends on Jan. 31 to determine how to split discount costs. Vendors, as is customary, pledged six to nine months ago to compensate retailers for price cuts needed to sell their goods with so-called markdown dollars.

Department-store owners typically set discounts with input from their suppliers and in previous years have had leverage in passing on markdown costs. This time, the retailers may be willing to shoulder more of the burden to help keep vendors solvent, said Michael Appel, a managing director at Quest Turnaround Advisors LLC, a Purchase, New York-based firm that provides crisis management services to retailers.

Department stores have gone beyond �what the markdown rate ought to be,� Liz Claiborne Chief Executive Officer Bill McComb said on a Nov. 11 conference call. �There�s no way that every vendor is going to be paying 100 percent of their liabilities here.�
Markdowns are the new reality. If vendors won't eat the markdowns stores will order less, if at all.

Toyota May Modify Just-in-Time to Ease Supplier Shock
Toyota Motor Corp. and Honda Motor Co., Japan�s two largest carmakers, may modify their so-called �just-in-time� manufacturing system to avoid possible supplier bankruptcies disrupting production.

�We continue contingency planning� even after the bailout, Mike Goss, a spokesman for Toyota�s North American manufacturing unit in Erlanger, Kentucky, said by e-mail. �We hope the loans provided to Detroit will also help to stabilize suppliers, but the very slow market remains a concern for all.�
Ford Hopes Self-Parking Vehicles Boost Curb Appeal
Ford Motor Co. plans to offer two Lincoln models next year that can park themselves, the latest move in a strategy aimed at improving the public's image of the auto maker.

The automatic parallel-parking system will be shown next month at the North American International Auto Show in Detroit, and will be offered as an option on the Lincoln MKS sedan and MKT crossover-utility vehicle.

Similar technology is already available from Toyota Motor Corp.'s Lexus division, but Ford's push reflects a wider effort championed by Chief Executive Alan Mulally to cast the company in a more favorable light. At the Detroit show, Ford also will show a hybrid version of the Ford Fusion sedan rated at 41 miles a gallon in city driving -- eight more than Toyota's Camry hybrid.

Ford's system requires less driver input and reduces the risk of selecting a too-small spot, said Ali Jammoul, Ford's chief engineer for steering systems.
Hospitals ill from more bad debt, credit troubles
Gainesville's first community hospital has been on life support since the Shands Healthcare system in northern Florida bought it a dozen years ago.

Like many U.S. hospitals, Shands is being squeezed by tight credit, higher borrowing costs, investment losses and a jump in patients -- many recently unemployed or otherwise underinsured -- not paying their bills.

All that has begun to trigger more hospital closings -- from impoverished Newark, N.J., to wealthy Beverly Hills, Calif. -- as well as layoffs, other cost-cutting and scrapping or delaying building projects. More closings and mergers are on the way, industry consultants predict.

"They'll get swallowed up by somebody else, if they need to exist, and if they don't, they'll just close," said Tuck Crocker, vice president of the health care practice at management consultant BearingPoint.

Most endangered are rural hospitals and urban ones in areas with excess hospital beds and a lot of poor, uninsured patients.
Some U.S. Meat Plants Lose Right to Export to Mexico
About 30 U.S. slaughterhouses were refused certification to export meat to Mexico, the U.S. Department of Agriculture said, without giving a reason.

Some of the plants are owned by Tyson Foods Inc., the largest U.S.-based meat producer, and process poultry, pork and beef, a report on the USDA Web site showed. Facilities owned by Smithfield Foods Inc. were also included on the list of plants that can�t ship some meats to Mexico.

The move will probably hurt U.S. export sales, reducing demand for hogs, cattle and poultry and causing prices to fall, said Chris Lehner, the brokerage division manager at CommStock Investments in Royal, Iowa.

�Mexico is one of our better export destinations,� Lehner said. �It�s going to hurt at a time when financial problems are hurting the beef or pork industries.�

U.S. authorities pulled the certification of the plants as part of an accord with Mexico, said Marco Antonio Sifuentes, a spokesman for the Latin American country�s Agriculture Ministry. Any plant that fails on three consecutive occasions to meet sanitary and quality standards automatically loses its right to export, he said by telephone from Mexico City.

�This is a common practice,� Sifuentes said. The plants may be certified for export in the future, he said. Some Mexican plants were barred from exporting to the U.S. following a similar review about three months ago, he said.
This looks like a clear case of Tit for Tat Protectionism

Family finds $10,000 cash in a box of crackers

The box of Annie's Sour Cream and Onion Cheddar Bunny crackers was green � but the Rogoff family had no idea that its contents were green, too.

Sandra Rogoff reached into the cupboard on Oct. 10 and opened a box of crackers, only to find an unmarked white envelope taking up residence next to the bagged crackers. She opened it to discover $10,000 in $100 bills.

Police went to Whole Foods where managers told them an elderly customer came in a few days earlier, hysterical after she realized she had mistakenly returned the box of crackers with her life savings inside. Frightened by the government takeover of several banks, the Lake Forest woman, whose identity was not released, had decided to take her money out of the bank and hide it in her home.

Police told Rogoff that Whole Foods usually sends returned food to a composting facility in the Inland Empire, and store managers told the woman her money was likely gone. An apparent mix-up led the box of crackers to be restocked on the shelves, where an unsuspecting Debra Rogoff purchased them. She guesses that the elderly woman glued the box shut after putting the money in, "because I'm a pretty careful shopper. I would have noticed if the box was open."

The woman was reunited with her money. The Rogoffs never heard from her and didn't receive any sort of reward. But Debra did return to Whole Foods a couple of weeks later.

"I asked them if I could have another box of crackers," she said with a laugh. The store obliged.
A box of Annie's Sour Cream and Onion Cheddar Bunny Crackers is the new safe place to stash cash.

"Shaped like our favorite mascot, Bernie the Bunny, these yummy, crisp crackers are made with organic wheat flour and real cheddar cheese. All of our flavors - Original Cheddar, Sour Cream & Onion, White Cheddar, and Whole Wheat, are flavorful, wholesome, and healthy snacks for kids and Annie's fans of all ages."

Focus on Weatherization Is Shift on Energy Costs

In the forgotten corners of tens of millions of American attics and basements, near the old Trivial Pursuit games and out-of-season clothes, are flaws that waste vast amounts of energy. Buildings often resemble colanders. Leaking ducts bleed heated air into areas outside living space. Cold-air returns suck in dust and mold from attics, or gas and oil fumes from garden equipment stored in basements. Long-neglected air filters clog, forcing furnaces or air-conditioners to work harder.

Correct those flaws, and heating and cooling costs are typically cut by 20 percent to 30 percent, a saving of more than $1,000 annually in some households. In addition, carbon dioxide emissions and the strain on the national electric and gas systems are reduced.

About 140,000 houses will be weatherized with public help this year, a total that President-elect Barack Obama has promised to raise to one million, to reduce energy consumption and cut energy costs for households and taxpayers, who often absorb those costs for the poor. This would represent a historic shift in emphasis for the federal and state governments, reducing poor people�s energy bills instead of helping to pay them.

Weatherizing a million homes annually would also create about 78,000 jobs for a year, according to the federal Energy Department�s weatherization project director, Gil Sperling.

The current 140,000 annual total creates about 8,000 jobs, Mr. Sperling said.

Although that is a tiny fraction of the five million green-collar jobs that Mr. Obama promised in the campaign, �it�s a decent number of jobs per dollar spent,� said Harry J. Holzer, an economist at Georgetown University and at the Urban Institute, a nonprofit group in Washington. �The work is productive, and the jobs are at a mix of skill levels.�

Congress added $250 million to the weatherization budget for the fiscal year that began Oct. 1. Energy experts say that money could be effectively spent in low-income households and in households that have no need of public assistance.
City of Immigrants Fills Jail Cells With Its Own
Few in this threadbare little mill town gave much thought to the Donald W. Wyatt Detention Facility, the maximum-security jail beside the public ball fields at the edge of town. Even when it expanded and added barbed wire, Wyatt was just the backdrop for Little League games, its name stitched on the caps of the team it sponsored.

Then people began to disappear: the leader of a prayer group at St. Matthew�s Roman Catholic Church; the father of a second grader at the public charter school; a woman who mopped floors in a Providence courthouse.

After days of searching, their families found them locked up inside Wyatt � only blocks from home, but in a separate world.

In this mostly Latino city, hardly anyone had realized that in addition to detaining the accused drug dealers and mobsters everyone heard about, the jail held hundreds of people charged with no crime � people caught in the nation�s crackdown on illegal immigration. Fewer still knew that Wyatt was a portal into an expanding network of other jails, bigger and more remote, all propelling detainees toward deportation with little chance to protest.

Wyatt offers a rare look into the fastest-growing, least-examined type of incarceration in America, an industry that detains half a million people a year, up from a few thousand just 15 years ago. The system operates without the rules that protect criminal suspects, and has grown up with little oversight, often in the backyards of communities desperate for any source of money and work.
The above article is long, a full 6 pages. There are many sides to the story. What do you do with a child born in the US who is a legal US citizen, perhaps in grade school, but his father and mother are not US citizens, and one of them is in prison and his family ho idea where?

Here is a link to an interactive map showing the Growing Detention Network in the US.

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

Treasury Makes Subprime Auto Loans

One day after the treasury (taxpayers) injected $6 billion into the failing auto industry GM, GMAC ease lending rules to entice car buyers.
General Motors Corp and its GMAC funding affiliate launched programs on Tuesday to lure U.S. car and truck buyers back into showrooms as the largest U.S. automaker tries to revive its sagging fortunes.

GM began offering zero-percent financing on some models, and GMAC resumed lending to a wider range of potential customers, after the government said it will inject billions of dollars to help ensure that both survive.

Through January 5, GM will offer zero percent to 4.9 percent financing on loans of up to five years on some 2008 model-year vehicles, and 3.9 to 5.9 percent on some 2009 vehicles. Many of the vehicles also carry cash discounts of $500 to $4,250.

GMAC, meanwhile, will extend loans to retail buyers with credit scores, known as FICO, of 621 or higher. In October, it had restricted loans to borrowers with scores of 700 or higher.

Many analysts consider borrowers with credit scores of 620 or lower to be "subprime." The median U.S. credit score is 723, according to Fair Isaac Corp's myFICO unit.

"The bottom line is much better access to funding," said Mark LaNeve, GM's vice president for North American sales, on a conference call with reporters. He said GMAC may now be able to fund 75 to 80 percent of new vehicle purchases, up from 40 percent since October.
The bottom line is more taxpayer risk. Of course GM will proclaim those are "prime" loans because they are 1 FICO point above the minimum. This is the lipstick on a pig play once again.

Elephant In the Room

I discussed the bailout yesterday in Paulson's $6 Billion Foot In The Door Play. Today the Treasury upped the taxpayer ante by offering subprime auto loans with our money. But only so many cars will be sold, period. And with the massive overcapacity issue, and near-subprime lending, taxpayers are further at risk.

Kevin Depew on Minyanville discusses this situation today in Automakers, Banks Ignore Elephant In the Room.
Ordinarily, when a business/industry fails from poor management and/or (in the case of the banks) overleveraging, what happens?

You know what happens intuitively, even if you've never opened an economics
textbook. It is very simple. Entrepreneurs, seeing the mistakes made by those business/industry operators, rush in to start competing businesses to 1) take advantage of the weakened competition, and 2) operate the business better than the competition having the benefit of seeing their mistakes.

Under normal circumstances, this process happens in every industry. It is the normal cycle of capitalism.

But look at what is happening now. Are there any entrepreneurs setting out to start automotive manufacturing businesses? What about entrepreneurs setting out to charter new banks? You already know the answer to that. The question, then, is why?

First, and most important, it is because the business models within those industries have failed. Second, because the government (taxpayer) has now stepped in to prop up those businesses with their failed business models, it is no longer economically viable for an entrepreneur to try and compete with the government even if the entrepreneur has a better business model. Third, even if it were economically viable, the government is installing roadblocks via the FDIC and other agencies to purposefully make it difficult for entrepreneurs to compete against the failed businesses in those two industries.

Make no mistake, the inevitable outcome will be failure. What is taking place is the extension of that failure to a decade or more. That is what the government is purchasing with the bailout monies; an extension, life support, even though death is inevitable. Why? Why would government do this? Because those who are demanding the monies and the extensions have more political clout than you do.
The more money wasted on stupidity like this, the longer the recession, and the slower the recovery. There is only so much capital, and using that capital to keep failed business models alive is sickening.

Addendum:

In Paulson's $6 Billion Foot In The Door Play I asked the following question: "How much GM and GMAC bonds is First Pacific Advisors sitting on?"

That question was in response to a quote in the Bloomberg article I was referring to.
�This is a good start by the federal government,� said Thomas Atteberry, who helps manage $3.5 billion in fixed-income assets at First Pacific Advisors in Los Angeles. Still unknown, he said, is whether the government cash will �make it palatable for new investors to come in.�
I was cynical because there have been instances by PIMCO and others positioning for a bailout of Fannie and Freddie then asking, almost demanding a bailout.

Tom Atteberry just pinged me with this:
I can understand your cynical comment asking how many GMAC bonds does First Pacific Advisors own. As a partner at the firm, Co Portfolio Manager of the FPA New Income Fund, and Portfolio Manager for the firm's fixed income accounts we do not own any GMAC or GM bonds nor have we owned them in the past. As an aside the reporter for Bloomberg asked me the same question. I assume because my answer is none he felt no need to mention that fact in his article.

Our firm is not a proponent of government bail outs of private industry which in today's society is a minority view. If the government decides to bail out an industry the least it can do is set the situation up where it could attract private capital and thus enable the government to exit the transaction. In the case of GMAC I doubt that will happen. In the case of AIG the government at least asked the CEO to leave. In this case there is no management change request or new board.

In both cases the management and board of GMAC ran the company into the ground. I would submit that the same is true for GM. I am surprised to see little mentioned about a strong need to replace management. Under new management maybe new private capital could be attracted to the company. With the same old management in place that created the problem why would a new investor put a dime into either company. Finally we should be asking the question why was Cerberus allowed to continue to have an equity stake. At a minimum the taxpayer or a new equity owner should be put in place and the Cerberus position reduced to "0".
Thanks Tom.

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

Growing Unrest In Russia Amidst Economic Crisis

Falling oil prices, a collapsing Ruble, and a souring economy have Russia in the worst crisis in over a decade. The Financial Times is talking about this in Russian economy: The Putin defence.
When a top economic adviser to Vladimir Putin approached his boss in September to argue that the rapid fall in the oil price meant he would have to devalue the rouble, the answer was a firm nyet. �He said he would not be the prime minister of devaluation,� one insider said.

But even before the oil price failed to recover on output cuts by the Opec producers� cartel earlier this month, Mr Putin�s room for manoeuvre was running out. As crude has fallen from $147 a barrel this summer to less than $40, Russia�s oil-fuelled economic boom has come abruptly to an end. A country that was growing at a rate of 7 per cent only six months ago now faces a looming recession � and Mr Putin, almost exactly nine years since Boris Yeltsin handed him the presidency on New Year�s Eve, is stalked by the same prospect of economic failure as his ill-fated predecessor.

He must also contend with growing unrest. This month has seen thousands of Russians protest against the government�s handling of the crisis in a series of demonstrations across the country. With some 400,000 losing their jobs in November alone and around 2 per cent of those in work facing wage arrears, tensions are likely to rise further.

As well as suffering from a marked drop in demand for commodities, Russia�s economy is also being choked by Mr Putin�s rouble policy. His decision to stave off a sharp devaluation is starting to look to some economists as ill-advised as Yeltsin�s similar attempt in 1998. The central bank has already lost more than a quarter of its foreign currency reserves as a result of its efforts to stem the rouble exodus that began in August, when foreign investors fled Russia in the wake of the war with neighbouring Georgia.

Russia�s reserves of some $451bn (�321bn, �309bn) may still be the third largest in the world, but the sharp drop in the oil price is limiting its ability to replenish them. Propping up the rouble is currently costing the government $6bn to $10bn a week; if this continues, Mr Putin may be unable to assuage popular unrest as he did in 2003, when he defused a row over social benefits by spending freely.

Also at risk is the country�s ability to refinance the foreign debt held by Russian companies. With international credit markets closed, the government has so far pledged $50bn for this purpose. But with up to $170bn due next year, analysts say, the reserves could be quickly exhausted.

�The situation is starting to look like 1998 when, in anticipation of devaluation, the credit market is frozen and there is an enormous contraction of the economy,� says Anton Strouchenevsky, an economist at Troika Dialog, the Moscow investment bank.
There is much more in the article including detailed discussion of the Baltic states.

Ruble Falls to Record Low Versus Euro

Bloomberg is reporting Ruble Falls to Record Low Versus Euro as Russia Weakens Defense.
The ruble fell to a record low against the euro as Russia devalued the currency for the 12th time in seven weeks after the government forecast its first budget deficit in a decade.

The managed currency weakened 2.6 percent to 41.7245 per euro, the lowest since the European currency started trading in 1999. It fell 0.7 percent to 29.1797 versus the dollar, a four- year low. Bank Rossii allowed the ruble to fall 1.7 percent against its basket of 55 percent dollars and 45 percent euros, the most since the measure was introduced in February 2005, according to a central bank official who declined to be identified, citing bank policy.

The ruble may need to fall another one-fifth against the basket if oil prices don�t rise and Bank Rossii doesn�t change its policy, said Evgeny Gavrilenkov, chief economist at Troika Dialog in Moscow. Gavrilenkov called in October for a one-time depreciation of as much as 20 percent, when oil prices were above $60 a barrel.
Looking For Someone To Blame

Minyanville professor Vitaliy Katsenelson is writing Mother Russia Looks For Someone To Blame.
Russia's economy is deteriorating at a very fast pace. The Stabilization Fund of the Russian Federation -- a giant $450 billion savings account -- has been depleted by a quarter since September as Russia has tried to defend its currency. But in spite of these attempts, the ruble still declined.

Russian companies are facing $170 billion in debt rollover next year. Since the rest of the world isn't willing to finance companies in a stable political regime, getting financing for Russian companies will present a problem. President Dmitry Medvedev and his boss, Vladimir Putin, will have to spend another quarter of the reserve to fund Russian corporations.

These whispers will magnify as things get worse. But what concerns me is the inevitable response. I visited Russia in September for the first time since I left in 1991, and even though at the time the country was prospering (the economic crisis was still weeks away), I felt this broad anti-American attitude.

Now that things are getting worse by the minute, Putin will likely attempt to shift the blame to -- you guessed it -- the US. America will be made a scapegoat for the global crisis, for manipulating oil markets and for anything else that goes wrong in Russia.

The relationship between the countries is liable to get a lot worse.
The New York Times is reporting Gazprom, Once Mighty, Is Reeling
A year ago, Gazprom, the Russian natural gas monopoly, aspired to be the largest corporation in the world. Buoyed by high oil prices and political backing from the Kremlin, it had already achieved third place judging by market capitalization, behind Exxon Mobil and General Electric.

Today, Gazprom is deep in debt and negotiating a government bailout. Its market cap, the total value of all the company�s shares, has fallen 76 percent since the beginning of the year. Instead of becoming the world�s largest company, it has tumbled to 35th place. And while bailouts are increasingly common, none of Gazprom�s big private sector competitors in the West is looking for one.

That Russia�s largest state-run energy company needs a bailout so soon after oil hit record highs last summer is a telling postscript to a turbulent period. Once the emblem of the pride and the menace of a resurgent Russia, Gazprom has become a symbol of this oil state�s rapid economic decline.

During the boom times, Gazprom and the other Russian state energy company, Rosneft, became vehicles for carrying out creeping renationalization.

As oil prices rose, so did their stocks. But rather than investing sufficiently in drilling and exploration, Russia�s president at the time, Vladimir V. Putin, used them to pursue his agenda of regaining public control over the oil fields, and much of private industry beyond.

As a result, by the time the downturn came, they entered the credit crisis deeply in debt and with a backlog of capital investment needs. (Under Mr. Putin, now the prime minister, Gazprom and Rosneft are so tightly controlled by the Kremlin that the companies are not run by mere government appointees, but directly by government ministers who sit on their boards.)

Mr. Medvedev [the Gazprom executive] said the share price �does not reflect the company�s value� and blamed the financial crisis that began on Wall Street for the company�s woes.
Putin nationalized Gazprom, swallowed up everything in the industry (stealing from the rightful owners at then favorable prices to the state), and now blames Wall Street.

�I can describe the Russian economy as water in a sieve,� Yulia L. Latynina, a commentator on Echo of Moscow radio, said of the chronic waste in Russian industry.

Substitute "world economy" for "Russian economy" and Yulia has it right. Chronic waste is everywhere, it's only a question of degree.

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

Holiday "Cards"

At home we, like most people, put our Xmas and other cards on the bookshelf in our living room. With that in mind I thought I'd display a handful of the "cards" I received via e-mail this season.

xmas08-arx.jpg
ARX Portugal Arquitectos

xmas08-jds.jpg
JDS / Julien de Smedt Architects

xmas08-leeser.jpg
Leeser Architecture

xmas08-papress.jpg
Princeton Architectural Press

xmas08-supercolossal.jpg
Super Colossal

Monday, December 29, 2008

Paulson's $6 Billion Foot In The Door Play

The US Treasury continues to throw $billions around like peanut shells. Bloomberg is reporting Treasury to Buy $5 Billion GMAC Stake, Expand GM Loan.
The U.S. Treasury committed $6 billion to support GMAC LLC, the financing arm of General Motors Corp., the latest step in the government�s widening effort to keep the largest U.S. automaker out of bankruptcy.

Treasury said it will purchase a $5 billion stake in GMAC, and lend $1 billion to GM so the automaker can participate in a rights offering at GMAC to support the lender�s reorganization as a bank holding company. The loan is in addition to $13.4 billion the Treasury agreed earlier this month to lend to GM and Chrysler LLC.

�This is a good start by the federal government,� said Thomas Atteberry, who helps manage $3.5 billion in fixed-income assets at First Pacific Advisors in Los Angeles. Still unknown, he said, is whether the government cash will �make it palatable for new investors to come in.�
My Question: How much GM and GMAC bonds is First Pacific Advisors sitting on?
A Treasury official said there is no cap or deadline for aid to automakers under the TARP. Congress �will need to release� the second half of the $700 billion TARP under Treasury�s rescue plan, the official said on condition of anonymity during a conference call with reporters.
Separately, GMAC said it has accepted all bonds tendered in a debt swap designed to reduce its debt load.

�Once the offers are settled, which we expect to do promptly, results will be disclosed,� said spokeswoman Gina Proia in an e-mail.

GMAC joins more than 190 regional banks, commercial lenders, insurers and credit-card issuers seeking funds from the Treasury�s bailout program for financial firms. American Express Co., the biggest U.S. card company by sales, and CIT Group Inc., the biggest independent commercial lender last year, won capital infusions last week after converting into banks.

The Fed has since granted approval before the swap was finished.

GMAC, which had 26,700 employees as of Dec. 31, 2007, had about $161 billion of unsecured and secured debt as of Sept. 30, according to a filing last month. The proposal asked holders of $38 billion of debt to swap for as little as 55 cents on the dollar in cash or a combination of new notes and preferred stock. Individual owners of about $15 billion of debt were excluded from the exchange.
Foot In The Door Play

With hundreds of $billions handed out so far, another $6 billion seems like peanut shells. However, by agreeing to waste $6 billion on GMAC, the Treasury now needs to tap the second $350 billion because it has already squandered every bit of the first $350 billion.

In total, the Treasury has now committed to squander $700 billion and that is before Obama squanders anywhere from $750 billion to $1 trillion trying to prop up a dying consumer-based economy that really can't be propped up.

Addendum:

I am very cynical of statements regarding bailouts because there have been many instances by PIMCO and others positioning for bailouts then asking, almost demanding them, promising Armageddon if the bailouts are not granted. The automakers used the same ploy.

With that in mind, I asked: "How much GM and GMAC bonds is First Pacific Advisors sitting on?" (see context above).

Tom Atteberry at First Pacific Advisors just pinged me with this:
I can understand your cynical comment asking how many GMAC bonds does First Pacific Advisors own. As a partner at the firm, Co Portfolio Manager of the FPA New Income Fund, and Portfolio Manager for the firm's fixed income accounts we do not own any GMAC or GM bonds nor have we owned them in the past. As an aside the reporter for Bloomberg asked me the same question. I assume because my answer is none he felt no need to mention that fact in his article.

Our firm is not a proponent of government bail outs of private industry which in today's society is a minority view. If the government decides to bail out an industry the least it can do is set the situation up where it could attract private capital and thus enable the government to exit the transaction. In the case of GMAC I doubt that will happen. In the case of AIG the government at least asked the CEO to leave. In this case there is no management change request or new board.

In both cases the management and board of GMAC ran the company into the ground. I would submit that the same is true for GM. I am surprised to see little mentioned about a strong need to replace management. Under new management maybe new private capital could be attracted to the company. With the same old management in place that created the problem why would a new investor put a dime into either company. Finally we should be asking the question why was Cerberus allowed to continue to have an equity stake. At a minimum the taxpayer or a new equity owner should be put in place and the Cerberus position reduced to "0".
Thanks Tom.

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

Cheap gift tags (FREE!)

First of all, thanks for your kind words about my last post. I appreciate hearing from all of you and to know I'm not the only one who feels that way sometimes. I know it is a GOOD thing to be so grateful, but I should try not to worry so much too. :)

So I have seen this idea a couple times in blogland and the first time I saw it, I knew this easy peasy project was just for me. Do you keep your old Christmas cards every year?? I do. Don't have a clue why -- I do the same thing with birthday cards, I can't let go of them.


Well it's like I've kept them all these years JUST for this! All you need is a puncher outer thingy:



(Ignore my banged-up coffee table. I like to call it "rustic" a la The Bub.)


Grab a card:


You may have to do some trimming to get it to fit in the puncher right. I turn mine upside down to see what I'm punching. I do it on the floor too -- much easier to punch. (These things are a work out!!):


Voila!! Instant tags for next year! I even cut out some of the messages inside the cards:


Aren't they just ADORABLE?? Caaaauuute I say! I am dying to get my hands on more cards from this year. I'm trying to be patient and am keeping them up just a couple more days. Argh, I HATE delayed gratification!!

These were some of my favorites:


The puncher was originally about $15, but I got it half off. Otherwise, this is F.R.E.E. chickees! Have fun!
**Edited to add: YES the photo cards make this harder -- I know they are easier people, but come on...I need tags!! BUT I forgot to mention that I took the puncher thingy to some of the cardboard gift boxes that were torn up. (The one's with a design on top.) Those are adorable too!

ALERT!! The puncher thingys are half off at Hob Lob this week! Run, don't walk!

5 Best Practices for any Campaign

Burger King recently launched a TV ad that directed visitors to WhopperVirgins.com. I learned about this on AdAge.com which wote:

�What if you don't remember the exact Web address and Google it? You still better remember the domain name. While WhopperVirgins.com ranks first in Google for "whopper virgins," it's invisible when you omit the plural. �

AdAge writes further:

�This is a major missed opportunity. Google Trends shows that recently, the volume of searches for the singular and plural versions have been nearly equal. "Whopper virgin" searchers must either go to an intermediary site or refine their search. Why can't consumers 'have it their way' and get to Burger King's site even if they're off by a letter? This multimillion-dollar branding campaign could have covered all its bases with a $10,000 search marketing investment. As it stands now, Burger King risks frustrating consumers instead of serving up one whopper of a video.�

AdAge listed following three areas of neglect:


  • The domain: WhopperVirgin.com is a parked domain filled with ads for Burger King store listings, Virgin Mobile gifts, Virgin Atlantic flights, Virgin Islands vacations and Virgin Mary checks.

  • Search engine optimization: The microsite doesn't appear on the first three pages of Google results for "whopper virgin" searches.

  • Paid search: While reviewing Google's listings over several days, there hasn't been a search ad running on "whopper virgin" queries.


In addition to above another area which was partially neglected by Burger King was Web Analytics. I found two main issues with the web analytics


  1. Web Analytics Tool Implementation - This site did not have any web analytics code implemented on the landing page. However the video does start as soon as user lands on the site which then fires WebTrends code. With this implementation I am not sure if they are getting an referring site or search engine information.

  2. Data Analysis - Clearly Burger King is using web analytics tool. I am sure they were passing the web analytics reports around but I am assume that they were not doing any meaningful analysis. If they were doing any analysis at all they would have uncovered the SEO/SEM issues listed by AdAge.

  3. Simple keyword analysis using their web analytics tool would have helped them uncover these issues. (Lesson: If you are spending millions of dollars on the campaign you should also keep aside few thousands for deeper analysis. Just passing the reports around is not enough).
    It is very common to report on top 10 -20 keywords but these keywords alone don�t tell the whole story. Yes they can be good ego boosters but you have to look beyond top keywords and analyze the keyword that are either in the long tail or are not driving any traffic at all. Doing some basic analysis on search engine keywords would have shown them that they were not getting any traffic (or are getting very little traffic) from �Whopper Virgin� or �Burger King Virgin� keywords (I am sure there are more variations).

I hope Burger King learned its lesson and will be smarter next time they run campaign. (Note: All campaigns, offline or online end up having an impact on the site, search engines and online media)

Below are the 5 lessons that all marketers can learn from Burger King Campaign and apply to their own campaigns in the future:

  1. Search Engine Optimization - Make SEO an Integral Part of your any micro-sites and campaigns (offline or online).

  2. Paid Search - Plan to spend few thousand dollars from your campaign budget to SEM to augment or fill any gaps in SEO.

  3. Web Analytics Tool Implementation - Plan to spend few thousand dollars from your campaign on Web analytics tools (which they did). Make sure the tool is properly configured to capture the accurate data. As I mentioned above, it appeared that the site did not have any code on the landing page, which means they were missing a lot of data and hence not getting the whole picture. Conduct an accuracy audit of the tool implementation; it can potentially save you millions of dollars by providing you data beyond click-throughs.

  4. Data AnalysisAnalysis is different from reporting. Web Analytics tools and SEM reports just provide you a view into the data. You have to conduct a full analysis to understand what the data means and what actions to take to generate a higher ROI from your campaigns. Plan to conduct an analysis on all the data you collect from various tools. Learn from this analysis, it will tell you where you are wasting your money and what�s working for you. Use the insights gained from the analysis and take appropriate actions to improve your campaigns.

  5. Online Reputation Monitoring - Monitor news sites, Social Media (conversations/actions that happen away from your site) etc., look at what people are talking about your campaign and your brand. Learn from it and take appropriate actions. A simple tool like Google Alert can provide this to you this for free. I believe Burger King did pay attention to what was being talked about and as a result now you can see Burger King�s Paid Search campaign for �Whopper Virgin� and �Burger King Virgin� keywords.


Comments? Questions?

----------------------------------------------------------------------------
Looking to fill your Web Analytics or Online Marketing position?
Post your open jobs on http://www.web-analytics-jobs.com/

Latest Position: Director, Analytics at Resource Interactive (Columbus, OH)
----------------------------------------------------------------------------
Site: AnilBatra.com
Twitter: http://www.twitter.com/anilbatra

1998 Olympus digital camera

1998 Olympus digital camera,camera, digital, dslr, digital camera, dslr camera
1998 Olympus digital camera, originally uploaded by mazdamiata.

Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina

Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina,camera, digital, dslr, digital camera, dslr camera
Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina, originally uploaded by cl9893250.

Visit www.epathchina.com to purchase this cheap Digital Cameras

Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina

Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina,camera, digital, dslr, digital camera, dslr camera
Best Digital Cameras, Digital Still Camera, China Digital Camera from ePathChina, originally uploaded by cl9893250.

Visit www.epathchina.com to purchase this cheap Digital Cameras

DIY Digital Pinhole Camera

DIY Digital Pinhole Camera,camera, digital, dslr, digital camera, dslr camera
DIY Digital Pinhole Camera, originally uploaded by Rolf F..

Canon S5 IS Powershot Digital Camera & Speedlite 430EX External Flash Review

Canon S5 IS Powershot Digital Camera & Speedlite 430EX External Flash Review,camera, digital, dslr, digital camera, dslr camera
Canon S5 IS Powershot Digital Camera & Speedlite 430EX External Flash Review, originally uploaded by paul79uf.

Minolta DiMage 5 Digital Camera

Minolta DiMage 5 Digital Camera,camera, digital, dslr, digital camera, dslr camera
Minolta DiMage 5 Digital Camera, originally uploaded by Capt Kodak.

Manufactured 2001 by Minolta Camera Co. of Osaka, Japan. An �SLR-Like� 3.3 Megapixel digital camera. It used a Minolta GT 35mm to 250mm (equivalent in 35mm film camera) f/2.8-3.5 lens and a 1/1.8 inch CCD to produce a 3.3 Megapixels or 2048x1536 pixels image. Storage was to Compact Flash cards or MicroDrive. It had a TTL metering system selectable to either 256 Segment Metering, Center-Weighted Average or Spot mode. This supported operation modes of full Program, Aperture preferred automatic, Shutter preferred automatic and fully manual. It also had special program �Scene� modes: Portrait, Sports, Sunset, Night and Text. It simulated ISO ratings of 100 to 800. It was NOT interchangeable lens, but did give the feel of a small 35mm SLR. It could shoot continuously for at approx. 1.1 fps for 4 images and supported shutter speeds up to 1/2000 of a second. There was no optical viewfinder�it used an electronic viewfinder using a Ferroelectric LCD (4.8mm, 71,000 24-bit color pixels) that could be swiveled upwards through 90 degrees, provided a frame coverage of 100%, had diopter adjustment and an automatic mode to detect locality of eye to turn it on. In short�you could see all the information that would normally be displayed on the 1.8 inch TFT LCD on the back of the camera in the viewfinder�even in bright sun! It used high end Minolta accessories such as dedicated flash units and wired remote controls. It could focus as close as 4 inches in macro mode. It had a small built-in flash which could perform red-eye reduction or do fill flash outdoors. It used contrast detection to focus, allowing the user to select from 3 "wide area" auto selected zones or a Spot AF - flex focus point (movable focus point). Manual focus was provided by an electronic "focus by wire" ring at rear of lens barrel. In short�you could do just about anything you could do with a high end 35mm SLR on the market at that time EXCEPT change the lens. It was powered by four AA cells�your choice of Alkaline, Lithium or NiMH rechargeables.

Two items of note: First the lens�what a lens! It�s the Minolta GT lens made up of 16 glass elements in 13 groups, 2 anti-dispersion elements, 2 aspherical elements and was multi coated. This lens proved to be a real winner for Minolta. It graces not only the DiMage 5, but the 7, 7i, 7Hi, A1, A2 and A200.

Second, the DiMage 5 and 7 have the distinction of NOT having a UV filter permanently affixed to the front of the CCD sensor. What does this mean? With the application of a Dark Red 092 (89B) Infrared filter to the front of the camera, you can take true infrared pictures!

See also: www.dpreview.com/reviews/specs/Konica_Minolta/minolta_dim...

 
Copyright 2010 Camera Dashboard. All rights reserved.
Themes by Ex Templates Blogger Templates l Home Recordings l Studio Rekaman