Conflicting Issues In China: Inflation And Economic Contraction [View article]
While I agree with most of your article here, I find this statement rather misleading:
"Recently China put economic growth contracting at 8.1% versus previous readings approaching 9-10%."
"Growth" is not "contracting at 8.1%". Growth is expanding at 8.1%, but the RATE of growth is contracting (not at 8.1% - at a much higher rate.)
"For them, this is a contraction."
In no way is 8.1% growth a contraction. This is an economy that is still growing at 8.1%, a rate faster than any other major economy, so you should make it clear that their RATE of growth is what's contracting, not the growth itself. If China's GDP growth were to level off at 8% and not drop further, they would be absolutely thrilled, which would *not* be true if their economy was actually contracting.
Is Chanos Finally Getting It Right On China? [View article]
These are some good points, and I wouldn't overlook the significance of a slowdown in residential real estate - when construction slows down in the clearly-overheated residential construction sector due to lower prices, a lot of people will be out of work, from construction workers to steel workers to electricians to accountants, all the way down the line. And then the demand from those people for housing will dry up, as will their ability to pay off their current mortgages (even if they are low LTV.) And then...you have a vicious cycle and housing prices fall. Remember, in the US, it wasn't the slowdown in real estate itself that triggered the recession, but the accompanying job losses and resulting unpaid and/or underwater mortgages.
The author stated that the Chinese aren't planning on selling their homes if they lose 10% of their value - of course; no one would. But, but if they lose 20% and it looks like they might lose another 20% soon, that story will change quickly, no matter how much equity they have in the properties.
China Easing May Trigger Property Bubble [View article]
You mentioned "massive pent-up demand" - do you have a sense of whether that demand is from people who want to buy homes as residences or as investments? If the intention is to buy a residence, I agree, the demand will remain strong, but if the intention is to buy as residences, a loss of confidence in rising prices could dry up that demand rather quickly.
Household Incomes By Age Bracket: A Disappointing 21st Century So Far [View article]
Regarding the continued rise in income for the oldest cohort, Social Security certainly plays a role, but what about later retirement age? If more people are working past 65 and collecting a full income rather than just SS, it could be lifting that line dramatically.
Accounting Frauds Push Chinese To Buy Property [View article]
Indeed, the troublesome debt in the equation is that taken on by the developers, not the individual homeowners. And when buyers no longer think that prices will always go up, that debt will become problematic, and you'll see construction slow down significantly, which will not do good things for the Chinese economy as a whole considering 50% of their GDP is going towards such investments.
Commercial Paper's Outstanding December 2010 [View article]
Sold, thanks for the chart, but what do you think it means? Do companies not need to borrow? Are they not borrowing because they're scared/conservative? Are they unable to borrow? Clear CP is way down, but I'm not sure what conclusions to draw from that.
Is Facebook a Friend That Investors Need? [View article]
Facebook ads actually convert just fine, in some cases better than Google AdWords, and they keep improving their system, so it's likely to just keep getting better. For some types of campaigns AdWords is better, but for others, Facebook is the way to go. For instance, Facebook is much better at helping brands create long-term relationships with customers than AdWords, but AdWords is better at ads that drive to a simple transaction.
I work in the space and use their ad system personally, so I'm very familiar with it. I haven't seen any other posts here from people who seem to be familiar with the space at all, rather they're quoting old stories about online ads in general or anecdotes of how "no ones I know clicks on ads." The data just doesn't support these claims, or Facebook wouldn't be making upwards of $1B/year (see link in my comment below.)
If you want to complain about a site that doesn't monetize, Twitter is the one you want.
Is Facebook a Friend That Investors Need? [View article]
I work in the social media/marketing space and I actually purchase ads on Facebook, and I can tell you that those ads do work. They get clickthrough rates and ROI easily comparable to Google AdWords. Anecdotal stories about how "no one clicks on ads" are misleading to say the least.
I follow sites like allfacebook.com and insidefacebook.com, and you can read real marketing success stories all the time, not only from small business but also from large advertisers like Sears, Gap, etc. Is their advertising system perfect? No, of course not, but it's much stronger than your characterization would lead people to believe.
igggy is right on with his/her comment about the data that Facebook has on its users. I can target my ads specifically to people who say they are interested in "car speakers" for instance, and at very granular demographic levels. The ROI tracking is in its infancy, but there is just as much potential to advertise profitably as there is on AdWords. For some campaigns, I've found Facebook ads to be MORE profitable.
Lastly, while FB hasn't publicly stated their revenues, they're estimated anywhere from $500M - $1B/year NOW, before I'd even say their advertising system is fully fleshed out. (reference: techcrunch.com/2010/06.../) There is a ton of potential here.
There's also good potential in their ability to sell aggregated data about what people are interested in. Their partnership with Bing is just the start in this arena.
Karl, I'm a regular reader, and I really respect your work, but I think some more research is on order on this topic. If I can be of any help, please feel free to drop me a line.
Why We Should Cut Deficits and What Should Guide the Process [View article]
Rorty, I've been reading this argument from a few writers, and I have yet to see an answer to this question: When does the debt-to-gdp become a problem? When is it so bad that it threatens growth? What signs do we look for to know when our debt is truly out of hand?
Cullen, I read your articles regularly, and thanks for all the great work; you've really been helping me understand a lot of things about our current monetary system and all the QE nonsense.
I do have a question - at what point do you think our debt will become a problem? When do we need to start worrying about it, if it isn't now?
John, how do you see the coming wave of residential housing ARM resets in 2011 affecting the big picture? Even if we were starting to improve the jobs picture gradually as you say, I fear that we'll see a new wave of foreclosures because people won't be able to sell or refi, resulting in both decreased spending power in the low-to-middle classes *and* a new string of losses in the financial sector that will finally need to be recognized.
The premise of this article is flawed in that Google "going down" as a whole is impossible. They have so much redundancy in both data storage, hardware, and connectivity to the internet that even if one data center fell into the ocean, you wouldn't know the difference - the other data centers would all pick right up. Any outages on Google's part would be localized - maybe Docs might go down, or Gmail, but they won't be down for long. A scenario where all of Google's businesses are unavailable is almost impossible to imagine short of a catastrophic failure of the entire Internet, which is also almost impossible to imagine due to its inherently distributed nature.
The Cloud is inevitable and highly useful. As another commenter mentioned, people have a hard enough time keeping information safe on their own computers - that's exactly why I'd rather keep my data on a server that's being maintained by professionals, ideally by a large public company that would have a lot to lose if 1) they lost my data or 2) they were discovered to have been poking around in my data.
Let's face it - everyone forgets to back up regularly, and that's why cloud storage is ideal. Someone else takes care of the backups, and if my house burns down, I don't lose all my data. Sure, it's great to back up data locally, but it's critical to have off-site backups, and cloud storage services provide this. All technology driven businesses already have off-site backups, and it's fantastic that with today's bandwidth and storage availability I can now afford to have off-site backups, too.
Conflicting Issues In China: Inflation And Economic Contraction [View article]
"Recently China put economic growth contracting at 8.1% versus previous readings approaching 9-10%."
"Growth" is not "contracting at 8.1%". Growth is expanding at 8.1%, but the RATE of growth is contracting (not at 8.1% - at a much higher rate.)
"For them, this is a contraction."
In no way is 8.1% growth a contraction. This is an economy that is still growing at 8.1%, a rate faster than any other major economy, so you should make it clear that their RATE of growth is what's contracting, not the growth itself. If China's GDP growth were to level off at 8% and not drop further, they would be absolutely thrilled, which would *not* be true if their economy was actually contracting.
Is Chanos Finally Getting It Right On China? [View article]
The author stated that the Chinese aren't planning on selling their homes if they lose 10% of their value - of course; no one would. But, but if they lose 20% and it looks like they might lose another 20% soon, that story will change quickly, no matter how much equity they have in the properties.
China Easing May Trigger Property Bubble [View article]
Household Incomes By Age Bracket: A Disappointing 21st Century So Far [View article]
Accounting Frauds Push Chinese To Buy Property [View article]
Commercial Paper's Outstanding December 2010 [View article]
Is Facebook a Friend That Investors Need? [View article]
I work in the space and use their ad system personally, so I'm very familiar with it. I haven't seen any other posts here from people who seem to be familiar with the space at all, rather they're quoting old stories about online ads in general or anecdotes of how "no ones I know clicks on ads." The data just doesn't support these claims, or Facebook wouldn't be making upwards of $1B/year (see link in my comment below.)
If you want to complain about a site that doesn't monetize, Twitter is the one you want.
Is Facebook a Friend That Investors Need? [View article]
I follow sites like allfacebook.com and insidefacebook.com, and you can read real marketing success stories all the time, not only from small business but also from large advertisers like Sears, Gap, etc. Is their advertising system perfect? No, of course not, but it's much stronger than your characterization would lead people to believe.
igggy is right on with his/her comment about the data that Facebook has on its users. I can target my ads specifically to people who say they are interested in "car speakers" for instance, and at very granular demographic levels. The ROI tracking is in its infancy, but there is just as much potential to advertise profitably as there is on AdWords. For some campaigns, I've found Facebook ads to be MORE profitable.
Lastly, while FB hasn't publicly stated their revenues, they're estimated anywhere from $500M - $1B/year NOW, before I'd even say their advertising system is fully fleshed out. (reference: techcrunch.com/2010/06.../) There is a ton of potential here.
There's also good potential in their ability to sell aggregated data about what people are interested in. Their partnership with Bing is just the start in this arena.
Karl, I'm a regular reader, and I really respect your work, but I think some more research is on order on this topic. If I can be of any help, please feel free to drop me a line.
Why We Should Cut Deficits and What Should Guide the Process [View article]
Why We Should Cut Deficits and What Should Guide the Process [View article]
Sheila Bair: Part of the Problem [View article]
I do have a question - at what point do you think our debt will become a problem? When do we need to start worrying about it, if it isn't now?
Recessions Are on the Margin [View article]
Is Google Too Big to Fail? [View article]
The Cloud is inevitable and highly useful. As another commenter mentioned, people have a hard enough time keeping information safe on their own computers - that's exactly why I'd rather keep my data on a server that's being maintained by professionals, ideally by a large public company that would have a lot to lose if 1) they lost my data or 2) they were discovered to have been poking around in my data.
Let's face it - everyone forgets to back up regularly, and that's why cloud storage is ideal. Someone else takes care of the backups, and if my house burns down, I don't lose all my data. Sure, it's great to back up data locally, but it's critical to have off-site backups, and cloud storage services provide this. All technology driven businesses already have off-site backups, and it's fantastic that with today's bandwidth and storage availability I can now afford to have off-site backups, too.