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Yesterday I wrote Part 1 of the series on the changes to the software industry over the past decade that has led to changes in the venture capital industry itself. If you don’t want to read that post, the summary is: - Open source computing drove computing costs down 90%, which spurred innovation in technology
- Open cloud led by Amazon with their AWS services drove total operating costs down by 90%. This led to an explosion in startups.
- Amazon in turn led to the formation of an earlier stage of venture capital now led by what I call “micro VCs” who typically invest $250-500k in companies rather than the $5-7 million that VCs used to invest.
These trends have put pressure on traditional VCs. Some have done earlier-stage deals and done well. Others have chased earlier-stage but lack the skills or relationships to do this effectively. Some have moved into later stage investments in an effort to “put logos on their websites.” Surprisinly, this strategy works well with many entrepreneurs. I’m less sure it will work well for returns. Or at least venture-style returns. People are moving into everybody else’s space. It’s as though we forgot the management mantra of the 90′s about “core competencies” or the most common VC advice to entrepreneurs: Focus. Funny, that. Everybody seems to want what everybody else has. You know the old saying from Harry Met Sally, “I’ll have what she’s having!” Remember also that Meg was faking it. This will continue while we’re in a tech bull market and I predict will wane when we’re not. The Blurring of Investment Lines
With new micro VC entrants into to early-stage investing plus increased competition from angels, incubators and the like – traditional VCs have taken notice. So VCs spent a couple of years experimenting with earlier-stage investing, which is OK. The best of them: Spark Capital, USV, Foundry Group also understood that how they worked with these management teams was changing and I believe firms like this will continue to excel at early-stage investing. There are also others. I would put my firm, GRP Partners in with the group working with teams in different ways. But obviously I’m biased. I believe some VCs have entered the early-stage market as simply an option on future financing rounds. I doubt this will end well for those VCs or for the entrepreneurs they backed. I don’t think purely option-based investing in startups suits the long-term brand of the investor. The other major trend seems to be pulling in the opposite direction. As some of the last generation of startups have gotten bigger many VCs have also chased later-stage investments that were traditionally dominated by growth equity or mezzanine funds. It is less clear to me that this is a smart strategy but we’ll see over time. It feels more opportunistic than an “investment strategy” to me. It’s one thing to invest in a later-stage (say a C round) to help with growth, it’s another to fund companies who are already valued in the billions. Will public investments come next? And of course hedge funds and growth-equity funds can’t resist trying to get earlier-stage exposure again. As I said, the traditional investment lines of stage-based investors has blurred. But all of this is normal and we saw it all in the late 90′s. In a bull market many players see drift in their activities. In a correction the best people focus exclusively on their core competencies. I think Micro VCs are best at what they do, A/B round investors ought to be mostly A/B round investors and late-stage investors out to focus on companies that are already profitable and growing rapidly. Hedge funds out to be, well, hedge funds. The LP Community Hasn’t Yet Caught Up
As I’ve started to get to know the other side of the VC industry lately (the people who invest in VC funds or “LPs”) one thing has occurred to me. As a generalization LPs seem to recognize this general trend requiring less capital to start businesses and are arguing for smaller VC funds. That’s wise. But most LPs don’t seem geared up to fund new entrants in the Micro VC category. Many LPs want to write checks of $10 million or $25 million because they themselves have billions of dollars to manage. And the more “small checks” they write, the more VC managers they have to manage. They also often don’t want to be more than a certain percentage of a fund. So if a VC wants to raise a $30 million Micro VC fund and if an LP doesn’t want to be more than 15% of a single fund, the math collides. Maybe Micro VCs will get larger and emulate a multiple-partner strategy like True Ventures or First Round Capital. I think some will do this. Others will want to stay small. My best guess is that new LP funds will be set up in the future to service Micro VCs. So far I only know of one that has set up a focused LP fund to focus on this strategy. Hats off to Michael Kim of Cendana Capital – the first person I’ve spotted who focuses just on Micro VC. And no prizes for guessing that he’s getting into some of the best Micro VC funds. I think people who invest in LP funds ought to take notice of Michael’s leadership position. (disclosure: I’m an advisor to Michael’s fund. But I only agreed to do this because I know he’s really on to something others haven’t yet spotted.) The Explosion in Early-Stage Innovation
The Amazon AWS-led revolution of startup innovation has led to a massive increase in the aggregate number of startups. This in turn has fueled incubation programs like YCombinator, TechStars, 500 Startups & many more to help early-stage teams launch businesses led by most technical founders who are getting coaching from seasoned management teams. In addition it is much easier to get distribution than it was in the pre Facebook, pre iPhone world. It is not uncommon to see a team out of Utah, Texas or for that matter Finland with 8-10 developers build iPhone apps that get 10′s of millions of downloads and doing hundreds of millions of monthly page views. All of this innovation is awesome and there have even been new online tools such as AngelList to help entrepreneurs raise money more easily from angels or early-stage funds. Much credit for the mindset of keeping companies lean, having them launch & experiment on products and trying to “find product / market fit” goes to Steve Blank (author of the much respected Four Steps to Epiphany) and Eric Ries, spiritual leader of the “Lean Startup” movement. The explosion of startups coupled with lower costs to build in the early days and the freely available capital at the sub $1 million funding level has led to a lot of talk about whether the old Venture Capital model is still relevant. It’s my judgment that VC is as relevant to helping today’s startups become large businesses as it was 20 years ago but perhaps the skills of VCs themselves have to adapt. I believe that most companies can exist in the experimentation mode for 3-4 years. They should start “lean.” If they hit a product / market fit (meaning you suddenly see a massive uptick in usage and/or revenue) then these companies need to go “fat.” If they don’t the industry titans around them will eat their lunch. Enter VC. You can’t scale a large business quickly on your $500,000 alone. The Venture Capitalists can help these young founding teams scale their engineering departments, develop business development relationships, deal with onslaught of PR, handle executive management challenges, etc. Not to mention providing the capital for growth. People who believe that you can easily build a huge company quickly for just $500,000 are mistaken. The other argument against venture capital is that all of these new startups can exist on their own without ever raising venture capital and they can build meaningful, but small businesses. I acknowledge that is true for some segment of the market and there’s no shame in having a $15 million / year, 15% growth business churning out 20% annual profits. In fact, that’s pretty awesome. But that will be the minority of these startups. For those that do survive without VC because they figure out how to make enough revenue, many of them will be “ramen profitable.” Ramen profitable is good while you’re in search of a more scalable business model but is not sustainable for most companies in the long term. Most ramen profitable businesses achieve profitability because the founding team is paying themselves very little and hiring almost no staff. This can be sustainable for a young team for 3-4 years but beyond that the teams start to fracture. Some people get married, have kids, want to buy a house or simply get lured away by the next hot idea. In either case, venture capital will remain an attractive option for teams who want to pursue their business ideas and scale. Tomorrow’s post will focus on the coming brick wall that I see in Venture Capital caused by a massive increase in seed-stage & angel deals couple with a reduction in the number of VCs by 2/3rds. Read more posts on Both Sides of the Table » Please follow SAI on Twitter and Facebook. Join the conversation about this story »
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NEW YORK (AP) — A.J. Burnett pitched neatly into the eighth inning, Russell Martin hit a three-run homer and the New York Yankees kept rolling right along with a 5-2 victory over the Milwaukee Brewers on Wednesday night. Robinson Cano tripled to start a four-run fourth inning and Jorge Posada rounded the bases twice on his solo shot in the sixth, which was changed to a home run after umpires watched the video replay. Nick Swisher had an RBI single for the Yankees, who have won four straight and 14 of 18 overall. By taking the first two games against Milwaukee in an interleague matchup of division leaders, New York clinched its sixth consecutive series victory since getting swept at home by Boston from June 7-9. The AL East leaders announced good news on three injured All-Stars, too. Derek Jeter could rejoin the team next week in Cleveland, ready to resume his pursuit of 3,000 hits. Phil Hughes was sharp in a rehab start for Double-A Trenton and could be back in the rotation real soon. And fellow right-hander Bartolo Colon is lined up to pitch Saturday against the Mets if all goes well this week. Without them, the Yankees are doing just fine. They improved to 11-3 since Jeter went on the 15-day disabled list with a strained right calf — he was eligible to come off Wednesday, but wasn't ready yet. Jeter's replacement at shortstop, Eduardo Nunez, made a throwing error to start the eighth that allowed leadoff batter Rickie Weeks to reach safely. That was it for Burnett (8-6), who left to a standing ovation after losing three of his previous four starts. Helped by three double plays, the right-hander gave up two runs and seven hits while walking two and striking out four. With runners at the corners, David Robertson threw a called third strike past Corey Hart to end the inning, painting the outside corner with a 95 mph fastball. Mariano Rivera got three outs for his 21st save in 24 chances. New York goes for a sweep Thursday afternoon, with CC Sabathia pitching against the Brewers for the first time since he carried them to the 2008 NL playoffs. Ryan Braun had three singles and an RBI for the Brewers, extending his career-best hitting streak to 19 games. Shaun Marcum (7-3) allowed four runs and five hits in five innings after being limited to four innings over his previous two starts by a strained left hip flexor. Milwaukee dropped to 15-26 on the road, the worst record among winning teams in the majors. By comparison, the NL Central leaders are 29-11 at home. Marcum kept the Yankees off the scoreboard until giving up four consecutive rockets to begin the fourth. Nyjer Morgan crashed hard into the center-field fence while chasing Cano's triple, but seemed to be fine and stayed in the game. Swisher followed with a single and Posada ripped a long single off the base of the right-field wall. Martin lifted a low 0-2 pitch into the left-field seats for his first extra-base hit in 68 at-bats since his last homer on May 24. That was the longest drought of his career, the Yankees said, according to information provided by the Elias Sports Bureau. Posada sent a liner to right in the sixth that barely cleared the wall, caroming off a ledge behind the fence and then a fan before bounding back toward the field. Umpires originally ruled the ball in play and called Posada out when the Brewers tagged him between first and second. Posada pointed toward the right-field stands and then rounded the bases as the umpires huddled. He waited at first base while the umps went inside for a look at the replay, then trotted around again when they came out and correctly signaled home run. Yankees center fielder Curtis Granderson made a terrific, over-the-shoulder catch to start a double play in the second, with Hart doubled off first base. Milwaukee loaded the bases with one out in the sixth, but Burnett retired Prince Fielder on an RBI groundout and then induced a grounder from Hart to end the inning. NOTES: Brewers manager Ron Roenicke spoke with Zack Greinke to make sure the right-hander understood why he was lifted after two ineffective innings Tuesday night. Roenicke felt he was quoted out of context after the game and wanted to make sure none of his comments were misconstrued. ... Slumping 3B Casey McGehee was dropped from fifth to seventh in the lineup, with Hart batting fifth. ... Roenicke said RHP Marco Estrada was fine after leaving Tuesday night's game when he was hit in the left foot by Alex Rodriguez's sharp grounder. But after throwing 62 pitches in that game, Estrada won't be available out of the bullpen until this weekend. ... As long as he handles drills OK over the next couple of days, the Yankees anticipate Colon (strained right hamstring) will be able to come off the disabled list Saturday to start against the Mets at Citi Field. If not, journeyman Brian Gordon will go again. ... New York is 10-4 in interleague play. ... Christie Brinkley and Dick Ebersol were in the crowd of 46,450. Please follow Sports Page on Twitter and Facebook. Join the conversation about this story » See Also:
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Check out some of the latest MakeUseOf discoveries. Most of the listed websites are FREE or come with a decent free account option. If you want to have similar cool website round-ups delivered to your daily email, subscribe here. Add Your Website Here! | | Hazeover – If you are a heavy multi-tasker on the desktop, there will be times where having too many windows hinders your focus on that one app that you need to get your critical task done. Fortunately, a Mac app called Hazeover helps you stay focused only on the active window by dimming all your inactive windows. Read more: Hazeover: Dim Inactive Windows For Better Focus (OSX) |
| | Axess – is a web based tool for planning and organizing meetings. What differentiates it from the other meeting planners out there is its list of advanced features. It provides the ability to capture data and information related to the meeting, collaborate with the attendees, analyze things using its built-in tools, etc. Read more: Axess: Create Web Pages Instantly & Without Registering | | | | Free Online Photo Editor – Photo editing applications often require you to have the image stored on your computer. But if you are looking for an online photo editor that handles computer images as well as online images, you need to check out Free Online Photo Editor. It lets you edit images stored on your computer and it also accepts direct URLs of images stored online. Read more: Free Online Photo Editor: Easily Edit Your Photographs Online | | | | PawnSearcher – A simple reminder can be very helpful in ensuring that chores and tasks do not slip your mind. Numerous web services let you set up reminders for different tasks. One of the fastest and simplest of these tools is MsgMe.at, a simple and free to use web service that helps you quickly set up email reminders for various tasks. Read more: PawnSearcher: Get Pawnshops To Provide You With Competitive Prices | |
| | | ChangeColors – At times a website's color scheme makes the text on it hard to read. In such cases you will find it helpful to view the site in your own preferred colors. Using a tool called ChangeColors, you can now easily customize and view websites in colors you like. It lets you quickly change the color scheme of any website according to your preferences. Read more: ChangeColors: Cusstomize & View Websites In Colors You Like [Chrome] | Add Your Website Here!These are just half of the websites that we discovered in the last couple of days. If you want us to send you daily round-ups of all cool websites we come across, leave your email here. Or follow us via RSS feed. Cool Websites and Tools [June 29th] is a post from: MakeUseOf More articles about: cool web apps
Similar articles:Read more posts on MakeUseOf.com » Please follow SAI: Tools on Twitter and Facebook. Join the conversation about this story »
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Buried under news of the President Barack Obama's press conference, the White House issued another important release today outlining the Obama administration's counterterrorism strategy. While the 16-page unclassified report doesn't reveal any major strategic or policy changes, tt does emphasize a shift from large military engagements to a more targeted approach focused on dismantling Al Qaeda. It also stresses the need to prevent homegrown, or "lone wolf," attacks inspired by Al Qaeda. "Going forward, we will be mindful that if our nation is threatened, our best offense won’t always be deploying large armies abroad but delivering targeted, surgical pressure to the groups that threaten us," John Brennan, the president's top counterterrorism advisor, said in a speech timed to coincide with today's release. "Just as our strategy is precise about who our enemy is, it is clear about our posture and our goal," he said. "We seek nothing less than the utter destruction of this evil that calls itself al-Qaeda." Brennan's remarks about U.S. precision are no doubt thinly-veiled references to the targeted killings and secret unmanned drone strikes that have become central to Obama's counterterrorism approach. The strategy — and his comments — are further indication that the administration plans to increasingly rely on expanded special operations forces and covert drone strikes to go after the terrorist network. You can read Brennan's speech here > Please follow Politics on Twitter and Facebook. Join the conversation about this story » See Also:
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Forget those passé get-rich-quick schemes of the 90’s. Anyone who bought into those ideals then, let their greed play them out to the 411 scams of the millennium. And while opus magnum ideas do propel some from obscurity to the financial superstardom – it’s best to go along with better laid plans, just in case.
Great financial goals are great thing to have, though can be frustrating during the best of times, and the worse of times when we feel we’re just not doing well enough. Let’s face it, times are tough. Most of us carrying on with business and employment may be just starting to forget the last financial crisis – and trying to ignore the news of Europe’s immanent collapse. And pray it don’t affect the rest of the world. So if you’re stuck in a mid-year rut, here’s some money advice from the world’s filthy rich to inspire: 1. Read The Richest Man in Babylon. Some say it’s the money-equivalent of The Secret when it comes to becoming money savvy. They say anyone who’s ever made any money in business and investing calls this book their bedtime story. What have you really got to lose? 2. Manage your personal finances. Review your budget regularly -- see where your blind spots are. I know people who don't count entertainment or alcohol or whatever -- everything must be accounted for. Even a tiny leak can sink a ship. The same with finances. – Donald Trump 3. Don’t spend, reinvest: The temptation to spend money can be huge, but if you’re following in the footsteps of Warren Buffet you should reinvest your earnings. 4. Maintain austerity in prosperous times (in times when the cow is fat with milk); it accelerates corporate development and avoids the need for drastic change in times of crisis. – Carlos Slim 5. Patience is a virtue. “I think in business, you have to learn to be patient. Maybe I'm not very patient myself. And I think what I've learned the most is be able to wait for something and get it when it's the right time.” - Bernard Arnault 6. Be determined to succeed and create wealth. “Everyone experiences tough times, it is a measure of your determination and dedication how you deal with them and how you can come through them.” - Lakshmi Mittal 7. Invest for long-haul. We are now investing in each of our businesses to achieve substantial earnings growth in the future and create further value for millions of our shareholders. - Mukesh Ambani Related: The 10 Richest People on the Planet: Where All that Stimulus Money Went
Related: Asia’s Millionaires Overtake Their European Counterparts
Related: The 10 Richest Young People in the World Please follow Money Game on Twitter and Facebook. Join the conversation about this story »
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Illegal sports’ gambling exists all over the world. Even in the US, most sports gambling is still controlled by the mafia. It is a multi-billion pound industry and the profits for organized crime are comparable with the drug trade. The world capital of illegal gambling, however, is undoubtedly Asia, where it is several times as large as the European and US gambling markets. Though accurate figures are hard to obtain, the US journal Foreign Policy estimated in 2006, that the total size of the Asian gambling market was worth $450 billion. Oxford University’s Dr Declan Hill, the author of ‘The Fix: Soccer and Organized Crime’ compares the gambling culture in Asia to prohibition-era America, where a huge illegal industry grew up to provide something US citizens desired which was banned. Substitute gambling for alcohol and the pattern in Asia is the same. Large numbers of Asians want to gamble, but their Government will not let them, and a whole illegal industry has set up to provide a taboo product. The heads of the gangs are some of the richest men in Asia, who are supported by a huge network of bookies and agents. The power of the Asian gangs is such that their tentacles reach out all over the world. Dr Hill, who received his doctorate from the University of Oxford for research into match-fixing in football, risked his life to expose the scale of involvement by Asian match-fixing gangs at every international football tournament. “I exposed three great scandals in my book ‘The Fix’,” he said. “The first is the existence of marriages between local criminals and Asian match-fixers to fix European games. The second is that match-fixing gangs have been at the under-17 World Cup, the under-20 World Cup, the Women’s World Cup, the Olympic Soccer Tournament and the World Cup itself, for at least the last 20 years. They have approached many, many different players and referees to fix matches,” he said. Dr Hill gathered evidence for his thesis by infiltrating an Asian gang who was at the World Cup in Germany in 2006. “I did this at great personal risk. I then went to different players, referees and officials and corroborated what I saw. The evidence is deep and convincing,” he said. There is a third aspect to the football betting scandal, which is that many high-level football officials know what is going on, but choose to look the other way. “There were a few soccer officials who were the exception, such as Michel Platini,” said Dr Hill. “I sent him a copy of the book with a letter saying, ‘This is a controversial book, but it is not sensational. It is based on solid evidence and also my doctoral work at the University of Oxford. If there is anything I can do to help clean up the game, let me know’.” Two weeks after receiving the book, Platini’s UEFA had established an integrity unit to protect football. “This was exactly, what I called for in the book and my media interviews. Three weeks after that, I was flown to UEFA headquarters at Nyon, in Switzerland, to meet with senior officials to give advice on how to set up these units.” The gangs’ influence on the football, and other sporting leagues in their Asian homelands is also enormous. Chinese President Hu Jintao described the Chinese soccer league as a “national disgrace”. Other soccer leagues in Vietnam, Hong Kong, Indonesia, Cambodia, Hong Kong, Laos, Thailand, Malaysia and Singapore have had similar levels of scandal. The Taiwanese Baseball League has lost five of its original nine sides in the past few years to match-fixing scandals. Japanese Sumo wrestling is also notoriously corrupt. “In some Asian sports leagues, it is as common for a fan to watch a fixed match as a normally played one,” said Dr Hill. Illegal betting has also infested the cricket world in sub-continental Asia, where the game is a religion to millions of fans. According to police assessments, illegal betting on cricket in India is worth more than $5 billion per year, although other commentators put the figure much higher. The illegal betting has also inspired a lucrative money-laundering business to foreign banks and accounts. ...Continued Read the Full Article: Illegal Bookies, Crooked Players & Asian Gangs
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The Euro-zone is faltering. Bogged down by the ails of the PIIGS, the Euro-zone is fragile and susceptible to a potential economic meltdown.
With Greece heading towards an inevitable default, despite the recent announcement of a second bailout in just over a year, the word on the street is not about whether the other Euro-zone countries would once again leap to Greece's rescue when this happens but rather on whether Greece would eventually be kicked out of the Euro-zone – a potential precursor to a dissolution of the Euro-zone. But for the moment at least, the Euro-zone is putting on a united front. Speaking on the behalf of the German government, Steffen Seibert told the press that,
“an exit from the euro zone by Greece is not the right way forward. That cannot be the solution.”
Seibert added that a Greek exit was never a consideration for the Euro-zone, even as a “Plan B” option to tackle the debt crisis.
This announcement by the German government does not come as a surprise for political and economic observers in Europe. Alongside France, Germany is one of the strongest advocates of the Euro-zone and has regularly stated its desire to keep the Euro-zone together.
As the largest economy in the Euro-zone, Germany is expected to be among the largest contributors for Greece’s upcoming second bailout, as well as being at the frontlines to tackle any of Europe’s future problems.
In 2010, Germany demonstrated astounding resilience to the global financial crisis – emerging as one of the strongest advanced economies in the world. Germany's GDP (PPP) grew by 4.49 percent to US$2.81 trillion, while unemployment fell to 6.85 percent in 2010.
Related: Germany Economy
Related: Germany Economic Forecast
However, despite Germany’s strong economic performance, the Euro-zone has been marred by weak Euro-zone nations facing a sovereign debt crisis coupled with high unemployment rates more than double than that of Germany’s.
The German economy has also been affected. Due to the high levels of connectivity among the Euro-zone nations, it is likely that Germany would have seen better economic growth, if not for the weak currency as well as the constant provision of funds from its own taxpayers to bail out other Euro-zone nations.
According to the New York Times, half of the €35 billion, or US$49 billion, which German Chancellor Angela Merkel pledged in bailout loans to Greece could potentially be lost, in addition to any extra money required to recapitalize German banks exposed to the Greek debt.
Faced with the burden of fixing a seemingly unfixable problem, one might wonder why Germany and its policy makers persist in its convictions for the Eurozone, especially when a break-up could potentially solve some of the region’s problems as well lightening the load for the major economies.
So, should Germany stay in the Eurozone? Please follow Europe on Twitter and Facebook. Join the conversation about this story »
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A former Portuguese colony located on the Western African shore of the Atlantic Ocean and bordered by Senegal and Guinea, Guinea-Bissau faced problems such as an untrained public administration, a highly fragmented social structure and an extremely unstable political system when it declared its independence in 1974. Since then, Guinea-Bissau has been plagued by social and political instability that has caused a lull in economic activity. The country’s economy relies almost exclusively on its agriculture sector as well as any foreign assistance it can get. Guinea-Bissau’s Cashew Nut Industry Guinea-Bassau possesses fertile, arable land as well as an ideal climate suitable for growing a large variety of crops, cashew nut production dominates Guinea-Bissau’s agriculture sector. As the sixth largest producer of cashew nuts in the world, the industry represents 20 percent of Guinea-Bissau’s total GDP as well as 85 percent of all jobs in the country. Yet despite being a vital part of Guinea-Bissau’s economy, the industry is extremely underdeveloped. According to the African Economic Outlook, cashew nut production in Guinea-Bissau could easily be tripled or quadrupled with the implementation of modern technology and infrastructure. The lack of cashew nut processing facilities in the country has also caused their cashew nuts to be sold well below international market prices. Read all about Guinea-Bissau's Economy on EconomyWatch Guinea-Bissau’s Industry Sectors These problems have also manifested in the rest of Guinea-Bissau’s agriculture sector as well as the other industry sectors. Guinea-Bissau’s agriculture sector made up 62 percent of Guinea-Bissau’s GDP in 2008; services and industrial sectors contributed 23 percent and 15 percent respectively. However much of Guinea-Bissau’s economy remains unaccounted for. According to the African Economic Outlook, Guinea-Bissau’s informal sector is the main source of income within the capital of Bissau, with only 75 firms registered in the entire country. Illegal drug trafficking is also rampant in Guinea-Bissau with an estimate of nearly one tonne of cocaine passing through the country every day enroute to Europe. It's believed that a month’s cocaine shipments through Guinea-Bissau is approximately equal to ten times Guinea-Bissau’s gross annual national earnings. Find out more about Guinea-Bissau’s Industry Sectors. Guinea-Bissau’s Export, Import and Trade Much of Guinea-Bissau’s current trade is centred around the cashew nut industry. According to the African Economic Outlook, cashew nut production was responsible for more than 95 percent of Guinea-Bissau’s total exports in 2009. India was their largest export partner, purchasing almost 70 percent of Guinea-Bissau’s cashew nuts. On the other hand, most of Guinea-Bissau’s imports are primarily consumer and capital goods. In 2009, 60 percent of its imports were made up of commodities such as rice, flour and sugar, while a further 30 percent of their total imports came from oil. Due to the contrast between the value of their imports and exports, Guinea-Bissau is currently operating under a trade deficit. Declining cashew nut prices has also resulted in an even greater trade imbalance. In 2006, Guinea-Bissau’s exports were valued at US$133 million while its imports amounted to US$200 million. Find out more about Guinea-Bissau’s Export, Import and Trade Guinea-Bissau’s Economic Structure Among its 1.657 million population, 632,700 are officially considered to be part of the Labour force. However, a large portion of Guinea-Bissau’s youths are already working. One explanation could be Guinea-Bissau’s high mortality and low life-expectancy rates. According to the UN, Guinea-Bissau has the 8th highest mortality rate in the world, while its population only has an average life expectancy of 46.4 years, ranking it among the bottom ten nations in the world. Many Guinea-Bissauans also receive little to no form of education. According to the African Economic Outlook, only 48 percent of children finished primary school in 2006, while barely 17 percent of students finish secondary school. The education system also faces the problem of poorly trained teachers, lack of teaching materials as well as sporadic attendance particularly during the cashew harvest season. Find out more about Guinea-Bissau’s Economic Structure Guinea-Bissau’s Economic Forecast Guinea-Bissau's economic forecast is bleak. The country should generally experience growth over the next five years, however this growth will not be able to lift Guinea-Bissau out of the depression. Guinea-Bissau’s economic forecast is also conditional to future structural reforms as well as continual foreign assistance. From 2011 to 2015, Guinea-Bissau’s GDP (PPP) is likely to see an annual growth of between 5.69 to 6.51 percent while nominal GDP (current prices, US dollars) will increase by 3.15 to 6.67 percent during the same time period. By 2015, Guinea-Bissau’s GDP (PPP) and nominal GDP (current prices, US dollars) are predicted to hit US$2.42 billion and US$1.087 billion respectively. Find out more about Guinea-Bissau’s Economic Forecast Please follow Business Insider on Twitter and Facebook. Join the conversation about this story »
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Emerging and developing economies are often transitional economies, shifting from closed economies to open market economies. Often, the transition involves structural or policy reforms such as currency or capital market changes. The level of foreign investment is also critical for an emerging economy. In most cases, increased foreign investment is a sign the economy has potential. The injection of foreign currency into the local economy aids long-term investment to its infrastructure.
For foreign investors on the other hand, an emerging economy is an ideal investment opportunity as it often promises massive returns on investment. However, the risks involved in investing in an emerging economy are often larger than those in a developed economy. EconomyWatch adopts IMF’s classification of emerging and developing economies. There are however multiple lists created by various organizations based on their interpretation of the term.
Read more about Emerging Markets Economy on EconomyWatch Emerging and Developing Economies Export, Import & Trade Emerging and developing economies were responsible for driving global trade growth by more than 8 percent annually in 2011 and 2012 according to the Organization for Economic Co-operation and Development (OECD). As the five largest emerging economies in the world, BRICS account for 18 percent of global trade and about 45 percent of current growth. Brazil, Russia and South Africa focus primarily on raw material exports, while India and China’s key exports lie in manufacturing and services. In April 2011, economic and trade ministers from the BRICS nations came together in a summit and vowed to “oppose trade protectionism in all its forms” by creating a task force designed to come up with suggestions to improve and expand economic cooperation between BRICS and other developing economies. Full Article: Emerging and Developing Economies' Export, Import & Trade Emerging and Developing Economies Industry Sectors Emerging economies also tend to experience a shift from agriculture to the industrial and services industries. The agriculture sector is often seen as a vital component of an emerging economy’s GDP, however most emerging and developing economies will seek to diversify into more high-value industries. A classic example is China. In 2001, agriculture was responsible for 17.7 percent of China’s GDP while the industrial and services industries took up 49.3 percent and 33 percent respectively. However in less than ten years, the importance of China’s agriculture industry shrunk to 9.6 percent of GDP while the services industry experienced massive growth of 43.6 percent of China’s GDP in 2010. The industrial industry, which has long been China’s main driver for economic growth, has also decreased to 46.8 percent of China’s GDP in 2010. Full Article: Emerging and Developing Economies' Industry Sectors Emerging and Developing Economies Economic Structure China, like larger emerging economies has a massive population that makes up a large market and sizeable Labour force. Eight out of the top ten most populous nations in the world are emerging economies. China, India, Indonesia, Brazil, Pakistan, Nigeria, Bangladesh and Russia account for 52.173 percent of the world’s total population. A large population can be often seen to be an economic asset as there is higher potential demand within the country. Most advanced economies face an aging population, while emerging economies such as India now possess the world’s largest working-age population. Full Article: Emerging and Developing Economies Economic Structure Emerging and Developing Economies Economic Forecast Emerging and developing economies now have a 47.139 percent share of the world’s total GDP (PPP). By 2013, the total GDP (PPP) for emerging and developing economies is expected to account for more than half of the world’s total share, eventually reaching 52.137 percent of the world’s total GDP (PPP) by 2015. The total GDP (PPP) for emerging and developing economies in 2015 is expected to be US$52.174 trillion. Full Article: Emerging and Developing Economies Economic Forecast
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Google+ just launched yesterday. Invite only for an exclusive hand picked group by Google. Today that changes. I have invites and would be happy to send you one. How to get a Google invite 1) Follow me @MattPRD
2) Tweet at me with your email address and #googleplus
3) I will send you a Google+ invite :) See you there!
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Steve Ballmer is literally shouting down the critics who think he should be leaving his post as CEO of Microsoft. Geekwire has a great audio clip of Ballmer speaking at the Seattle Rotary Club where someone asked him for his reaction to people that say it's time for him to leave. He bellowed as only he can, "YOU TELL ME IF I LACK ENERGY OR CONVICTION, or we're not driving all the change we need to drive." (That was met with applause from the Rotary Club.) We don't think anyone has ever questioned Ballmer's energy or conviction. It's always been about his ability to execute and see around the corner that has been under question. Microsoft is driving more change with the introduction of Windows Phone, but it's really late to the party and so far it's completely missing out on the next wave of computing -- tablets like the iPad. Ballmer was also asked about Windows 8 and what it means to Microsoft. His response: "You cut me open and saw what was inside: Windows. Windows. Windows. Windows ... Our company was born on the back of Windows. Windows underpins a huge percentage of all of our success, all of our profitability, all of the important things that we do. So, how important is it? Very, would be a very fair answer." It's worth your time to go over to Geekwire and listen to the whole clip » Please follow SAI on Twitter and Facebook. Join the conversation about this story » See Also:
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Bank of America's trading losses will amount to around $9.1 billion this quarter. Sadly this had to happen: Bank of America cut 60 people in sales and trading recently, as layoffs hit across practically all Wall Street firms. Reuters says: The firm sought to trim its "least-productive employees" globally... The equities division employs about 2,500 people globally. With the bank's recent announcement that it will settle with BlackRock, the Federal Bank of New York, and others who sued over investments made in bad mortgages, you have to think there are going to be more than 60 people laid off. The settlement cost $8.5 billion and it will lead to trading losses this quarter of $9.1 billion. Please follow Clusterstock on Twitter and Facebook. Join the conversation about this story » See Also:
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Today was a perfect commercial against capitalism: Markets surged on the same news that made people riots in the street in Greece today. The blog LOL Greece has a fantastic post today about the collapse of Greek democracy, and the meaninglessness of the bailout, when freedoms are lost and police have carte blanche to strike at protesters. Don't think that's what happened? Check out this video. Please follow Europe on Twitter and Facebook. Join the conversation about this story » See Also:
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The HP Touchpad is "no match" for the iPad, says gadget guru Walt Mossberg of All Things D. It doesn't have enough apps to make it worth buying, and the hardware is pretty weak. The software has some nice touches but it's still pretty buggy. Here are the key takeaways from Mossberg: - "I’ve been testing the TouchPad for about a week and, in my view, despite its attractive and different user interface, this first version is simply no match for the iPad. It suffers from poor battery life, a paucity of apps and other deficits."
- "But the tablet’s hardware is bulbous and heavy compared with the iPad 2 or the svelte Samsung Galaxy Tab 10.1, an Android tablet. Worse, it’s missing some key features common on the other tablets, like a rear camera or even a camera app for taking videos and still pictures. It has a front camera that can be used only for video chats."
- "I also ran into plenty of bugs in my tests, even though H-P said I was testing a production unit. For instance, on various occasions, the email app failed to display the contents of messages, the photos app failed to display pictures, and the game “Angry Birds” crashed repeatedly. All of these problems required a reboot of the device to resolve."
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I was on one of my first dates after I had separated from my wife and the girl asked straight out what my net worth was within five minutes of sitting down. I had met the girl in an elevator the night before. I was walking into a building to visit another woman. I noticed this girl and I prayed to God that she would enter the elevator with me. She did. She hit floor #9. I hit floor #10. God is good. Somewhere around the fourth floor she turned to me and said, "please tell me 2009 is going to be better than 2008". She was about five feet tall and had thick blonde hair, light blue eyes. I told her it definitely was. 2008 was bad for everyone in every way. It couldn’t get worse. It was horrible for me, I said. I had gotten separated. A month earlier I had been on the floor in a fetal position and then put ads on Craigslist pretending to be a psychic. In my "psychic" capacity I told the future to about 20 different people. And probably tried to hit on ten of them. I got off the elevator on her floor instead of the tenth floor. We talked for ten minutes. My phone kept ringing. My friend on the tenth floor (a woman) wanted to know where I was since the doorman had announced my presence about fifteen minutes earlier. Somewhere Between the first and tenth floor I got lost in a maze it would take me two months to exit. My new friend's father had died during the year. And her husband, twenty years older, had cheated on her and divorced her that year. She was crying. She asked where I lived. I said, "The Chelsea Hotel". She said, "I've never had sex in the Chelsea Hotel". My phone kept ringing while we were talking. "Who is that?" she said. And I said it was a girl who lived on the tenth floor. So I had to go. The next day I sent her flowers and a teddy bear. I called her and we agreed to go to dinner. Right away she asked me my net worth, what the specific details of my divorce were going to be, why wasn't I working, what were my plans for the future, what political party I was a member of, everything. I told her what I had going on. She was skeptical. She said, “those sorts of things never work out.” She asked me a million questions. I was honest about everything. She said, “I didn’t think you were a good looking guy last night.” Welcome to New York dating post-marriage. Her conclusion: "you're completely insane. I can't go out with you." We went out for two months but she broke up with me at least once a week. It was really painful. I didn't have enough self-confidence to stay broken up. She'd break up with me in the morning and then call me later and say, "lets go out for a drink" and I would drop all other plans to go out with her again. I was drinking non-stop. During this time, thestreet.com wanted to "rework" my contract, which resulted in me getting fired two years after I sold Stockpickr to them. The Financial Times lost their advertiser for the page I was writing on so they effectively fired me. CNBC no longer needed a bullish guy when the stock market was going down every day so they stopped using me. I let one business fail and started another business that was doomed to fail. I invested in a few other businesses but I had no idea then what would happen to those. And still I kept getting broken up with at least once a week if not more. My kids would come over every other weekend but since this girl would break up with me every Friday I had no idea what she was doing on a Saturday night and I'd get anxious about it. I'd arrange for my kids to get their nails done or something and I'd try calling this girl but no pickup. I stopped returning calls from co-investors and my business partner, Dan, had to explain I was sick or busy, or dealing with divorce, or whatever he did to explain to people. None of my friends wanted to meet this new girl because they were all 100% sure that it would not work out. I started meeting other girls via dating services to fill in the gaps when the first girl would break up with me. One girl was the host of her own TV show on ABC. Her dog shit on my rug. She wanted me to only wear suits. She wanted my teeth whitened. She wanted my hair cropped close to head (ugh!) "I've written a book on dating," she said, "so you have to have a certain look or else I can't be seen with you." "You need to be groomed," she said. It didn't work out. Anyone who looks at me can see I can't be groomed even if I wanted to. And being groomed like a dog is hard work! Another girl asked me, "how do you deal with all the girls who want you for your millions?" And I was like, "i'm not sure where you're getting your information from but it's not what you think." That didn't work out. She wrote me a letter at the end (two weeks later), "you have mental problems and should see someone about that." She was a pyschiatrist so she was an expert. She had said to me a week earlier, "If you use Ikea to buy furniture for your new apartment I'm going to have to break up with you." She had to break up with me. Another girl I introduced to some of my friends. People I had been friends with for about ten years. During the evening she got so drunk her breasts kept falling out of her dress and she wouldn't notice at all. She would keep talking with her breasts fully out of her dress and people at all the other tables looking at us. So I walked her home. On the way back to her place she kept laughing and saying, "your friends really hate you. They only like you because they don't know who you really are." I got her into her apartment, dropped her on her bed, and then left and I still think about what she said and wonder if she was right. I moved into a two bedroom apartment so my kids could visit me. The last time they had visited me in the Chelsea Hotel I saw a used condom on the staircase of the hotel. Not a good environment for kids. The new apartment, right on Wall Street, had a bed for me, two beds for the kids, a couch in the living room, a table but no chairs and no other furniture. The kids and I would keep our clothes on the floor. We’d eat on the floor. We played Monopoly all day long on the floor. By the time they left each weekend the floor was covered with food, games, books, videos, whatever. And a housecleaner would come on Monday and clean up. Then I'd see my friend again on Mondays and she'd break up with me on Tuesday. I was exhausted of being broken up with. I was broken. It was like I had returned from outerspace after a 12 year visit around the planet Mars. But the planet had undergone a nuclear war and everyone was radioactive so I couldn't touch them. "Isn't there anyone out there who isn't radioactive?" I would ask out loud but I had nobody to talk to. My apartment was empty. My day was empty. I’d walk around doing nothing. I finally decided to take it seriously. No more second dates if I knew there was no serious relationship. No more drinking. Back to the Daily Practice for the first time in three years. I defined for myself very clearly what I wanted. I liked being married. I wanted to meet someone I would marry. I’m an ugly guy and had no prospects in life at that moment so not the easiest thing. It was a fulltime job for me. I spent three or four hours a day writing girls on various dating services. I wanted to meet someone. Finally there was a girl who had an interesting picture who said she was from Buenos Aires. This was on J-Date, a dating site for Jewish people. She was clearly not Jewish. I wrote to her and said she seemed really different. Maybe we could meet for dinner? She said, "no dinner. Just tea." I wanted to push for dinner. Maybe something could happen. "No. Tea!" She was from Buenos Aires. I wrote and said, "Oh, I've always wanted to go to Brazil." She wrote back and said, "That's nice that you want to go to Brazil but Buenos Aires is in Argentina. They speak Portuguese in Brazil." (South America is all the same to me) We met for tea early in the afternoon one day. She told me she was into yoga and that's what she mostly thought about. She told me all the benefits she felt yoga had. How it was a spiritual discipline as well a physical one. She told me she would take me to yoga and I laughed and said, “maybe next lifetime“. I told her how when I was a kid I was obsessed with trying to have psychic powers to see naked girls. I told her I had two kids. I told her how depressed I had been in my worst moments years earlier. She told me her stories. We talked for a long time and it was nice. We took a walk and sat down on a park bench in Tompkins Square Park. We didn't say anything to each other. We had already run out of topics to talk about. There was nothing but silence until she had to go. But I felt calm. It had been a very long time since I had felt calm. We must have sat like that in silence for about fifteen minutes. It’s hard to sit in silence with someone but it wasn’t hard this time. Eventually she got up to go. She had to catch a train. While she was walking to the train she told me she was selling her house. I asked her where she was going to move. She said, “maybe the East Village”. No you aren’t, I thought to myself. You’re going to move to the corner of Wall Street and Broad. Where I live. In a month from today we'll have our first year wedding anniversary. — Follow me on Twitter (Claudia has an excellent blog at ClaudiaYoga.com. We are starting work on my next book together. It will be a jointly written book). Read more posts on The Altucher Confidential » Please follow Clusterstock on Twitter and Facebook. Join the conversation about this story »
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On news that the Fed is proposing swipe fees higher than those originally expected, at $0.21 per swipe, credit card company stock has spiked. The original cap was set at $0.12. Visa shares surged and MasterCard took a big jump too. In after hours trading, Visa is hovering above $87; Mastercard shares are lingering above $311. That's going to make several hedge fund managers very happy -- that is, if they more or less maintained the holdings in Mastercard and Visa that they owned in Q1. For fun, we thought we'd check out the possible gains made by some of the big names. The following firms were some of the largest hedge fund holders of Mastercard and Visa stock as of March 31, according to 13F filings. The closing price of Mastercard on March 31 was $251.72. The stock is hovering at about $311 now. So if the following firms more or less maintained the holdings in Mastercard: - Columbus Circle Investments ~ 808,800 shares, would be worth about $251.3 million (up almost $50 million)
- Lone Pine ~ 692,800 shares, would be worth about $215.3 million (up about $40 million)
- Tiger Global 585,000 shares, would be worth about $181.8 million (up about $34 million)
- RenTech ~ 395,900 shares, would be worth about $123 million (up about $23 million)
- Citadel ~284,800 shares, would be worth about $88.5 million (up about $17 million)
- Caxton Associates ~ 169,000 shares, would be worth about $52.5 million (up about $10 million)
- DE Shaw ~ 169,000 shares, would be worth $52.5 million (up about $10 million)
The closing price of Visa on March 31 was $73.62. The stock is hovering at about $87 now. So if the following firms more or less maintained their Q1 holdings in Visa: - Columbus Circle Investments ~2.29 million shares, would be worth ~$199.5 million (up about $30 million)
- Tiger Global ~1.5 million shares, would be worth ~$130.6 million (up about $20 million)
- Citadel ~ 795,760 shares, would be worth ~ $69.3 million (up about $10 million)
- RenTech ~ 631,000 shares, would be worth ~ $55 million (up about $9 million)
- DE Shaw ~ 597,400 shares, would be worth ~$52 million (up about $8 million)
- Caxton Associates ~ 553,400 shares, would be worth ~ $48.2 million (up about $7 million)
A bet on Mastercard, clearly the real winner. See also: The 11 hedge funders likely to retire next > Please follow Clusterstock on Twitter and Facebook. Join the conversation about this story » See Also:
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This week saw stocks go on one of their best winning streaks in recent memory as the S&P 500 gained close to 3.1% since the market opened on Monday. Most of these gains came as traders and investors alike bought up securities ahead of the Greek austerity measure decision on Wednesday, assuming that Athens would vote in the plan. Traders were proved correct on Wednesday as the austerity measures squeaked by with a five vote margin, allowing Greece to obtain another tranche of capital from the EU in order to avoid default–at least for the time being. Closer to home, issues regarding a potential American debt crisis could soon move towards the forefront as a deal to raise the debt ceiling is still elusive. Time is running out for the U.S. to raise the level before a default event happens later this summer and many are growing increasingly worried that the two parties will not be able to resolve their differences in time. As a result, many traders are slowly moving out of some T-Bills thanks to this risk of a catastrophe, preferring to venture back into risky assets for the time being–at least until the U.S. gets its fiscal house in some semblance of order. With these developments taking shape, some of our ETF plays from Monday have done well, while others were hit hard by a greater appetite for risk. That was something that we were not anticipating for the most part, especially considering the large risks that remain in both the U.S. and Europe. Nevertheless, you can’t fight the market: we took this as an opportunity to shift some exposure in our all-ETF portfolio in order to better position ourselves for the weeks ahead: Pro Membership Required to Continue Reading To continue reading this article, you must be an ETFdb Pro member. Please login or begin your 7-day free trial to continue reading. There are several benefits to becoming an ETFdb Pro member today: - Get valuable insight from our analysts in the ETFdb Category reports, with in-depth breakdown every ETF niche, large or small.
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Architect Phillip Johnson's Farney house has been on the market since the summer of 2009; it just can't sell. It started at $35 million, and now it's down to $29.5 million. The design of the house is unique. Almost all the rooms have huge windows, constantly letting in the sun, similar to his famous Glass House in Connecticut. At 5,000 square feet, the house has eight bedrooms, seven bathrooms. It sits on 3.6 acres of beachfront property and features a tennis court, basketball court, putting green, pool, and a boardwalk with private beach access. An aerial view of the 5,000 square foot house 
The deck leading to the beach 
The house is on almost four acres of land 
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The daring raid that killed Osama Bin Laden marked a turning point not only in U.S-Pakistan ties but also in power relations within Pakistan. Most observers have focused on the first, but have failed to understand how worsening civil-military relations in Pakistan have contributed to the recent meltdown between Washington and Islamabad. President Obama’s decision to launch Operation Neptune Spear without informing Pakistan exploded the myth of the U.S.-Pakistani “strategic partnership.” The discovery of Bin Laden close to the Pakistani Military Academy in Abbotabad—almost certainly protected by elements of its “deep state”—marked Pakistan as a “frenemy” rather than the “ally” it regularly claimed to be. The consequent upsurge in American resentment, in turn, reinforced the Pakistani military view of Washington as a formidable but fickle friend. This peculiar marriage of convenience, where America was minimally appeased as long as the generals were well compensated and their interests protected, was torn asunder by the events of May 2, 2011. But what escalated the crisis in U.S.-Pakistan relations since that day was something unanticipated: the army’s plummeting credibility in the eyes of its own populace. The shock that the United States could discover Bin Laden from thousands of miles away in a cantonment town, when he was overlooked by the military and its powerful intelligence services, confronted the Pakistani public with one of two possibilities: either their army was malicious, harboring an enemy whose allies were ravaging Pakistan every day, or it was incompetent, incapable of its discharging its principal task of protecting the nation. In either case, the Bin Laden affair raised the fundamental question of why such a military was offered preferential access to the public trough given its debilitating failures. The ease with which homegrown insurgents were able to attack a major Pakistani naval base, even as the intelligence services, for all their fecklessness, were widely suspected of torturing and killing a prominent Pakistani journalist who had uncovered connections between the deep state and extremists, filled the Pakistani populace with dismay and revulsion. Not since the disastrous Kargil war of 1999 has the army’s reputation fallen so low. In a praetorian state, a loss of credibility is a threat to survival—and, hence, the Pakistani army struck back resolutely and early. In the immediate aftermath of the Bin Laden raid, it looked like Pakistan might have finally seized a moment for introspection. In his phone conversation with President Obama, Pakistan’s president, Asif Ali Zardari, struck exactly the right note, recognizing correctly that Bin Laden’s death was a victory for both the United States and Pakistan. Given the disasters Islamist radicals have wreaked in Pakistan, his elimination—however achieved—was welcome news and the main task for both countries was to resolutely pursue the antiterrorism campaign because, as Zardari later put it, “the forces of modernity and moderation remain under serious threat.” Unfortunately for Zardari, Rawalpindi—the headquarters of the Pakistani military—did not get the memo. Within days of his conversation with Obama, the army began hounding the civilian government for betraying the national interest by weakly opposing American military action after first having liberally issued visas to U.S. operatives that allegedly made the intrusion both inevitable and easy. Before long, Pakistan’s Prime Minister Yusuf Raza Gilani would be threatening the United States with a military response in the event of another similar operation, while defending the honor of the military and the intelligence services. Far from exploiting the opening created by Bin Laden’s death for reflection on Pakistan’s continued dalliance with jihadism, the official debate pressed by the army now centered on Pakistani sovereignty and the contempt conveyed by the United States in breaching it. Except for small bastions of Pakistani liberalism, which persisted in asking the hard questions about the army’s involvement in Bin Laden’s sanctuary and what that meant for Pakistan’s future, the deep state successfully kept up the diversionary drumbeat about bruised sovereignty—a particularly ironic focus given that the purported ignorance about Bin Laden’s presence illuminated Pakistan’s empty sovereignty even more than the ensuing American raid. A strong civilian government might have used this moment to demand the resignation of the Pakistani Chief of Army Staff and the Director-General of the Inter-Services Intelligence (ISI), holding them accountable for their failures. In Pakistan, however, the opposite happened: in a particularly galling moment, some civilian politicians close to the army actually called on Zardari and Gilani to resign on the grounds that the Bin Laden episode demonstrated that their management of national security—on which they exercise no oversight, let alone control—was found wanting! Operation Neptune Spear has thus proved to be a turning point—but not in the manner expected, at least concerning Pakistan. Far from strengthening civilian authority, the army’s embarrassment has provided new opportunities to decisively undermine counterterrorism cooperation with the United States and further weaken the civilian regime—even as the Pakistani military sold fantastic stories about the army chief’s struggle to keep his job because of “excessive” cooperation with the United States. While recent Pakistani actions, such as the arrest of U.S. informants who supported the Bin Laden mission, the compromise of operations targeting facilities that produce improvised explosive devices, the reduction of Special Forces components training the Pakistani Frontier Corps, the sharply increased constraints on clandestine American counterterrorism operations inside Pakistan, the demanded diminution in the size and the status of the U.S. military assistance mission in Islamabad and the continued support of jihadi groups that continue to target U.S. troops in Afghanistan, remain disconcerting, the United States will find ways to circumvent these problems, albeit at greater cost and with greater risks. More significant, however, is the damaging enervation of Pakistan’s already-frail civilian authority. While continuing American appeasement of its generals has contributed mightily to this outcome, the demise of the civilian government on issues of national security will not only undermine President Zardari’s bold assurance that “the war on terrorism is as much Pakistan’s war as it is America’s,” but it will also subvert Pakistan’s stability by further strengthening the power of the very military that has taken the country to perdition repeatedly since its formation. This post originally appeared at Carnegie Endowment for International Peace. Please follow Politics on Twitter and Facebook. Join the conversation about this story » See Also:
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39% of Americans believe the US economy has now entered "permanent decline" according to a new poll from CBS and NYT. That particular stat was tweeted out by CBS' Mark Knoller. Some other stats, via NYT: - Obama's approval is down to 47%.
- Disapproval is at 44%.
- 63% of the country believe it is headed in the wrong direction.
- Just 28% believe it is headed din the right direction.
- 2/3 of GOP voters are not enthusiastic about any candidate.
The full poll results aren't out yet. If there are more good nuggets in there, we'll publish them. Please follow Business Insider on Twitter and Facebook. Join the conversation about this story » See Also:
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 The Israel-Palestinian conflict has been largely out of the news in the six weeks since President Barack Obama called for reinstating the 1967 borders—an idea Israeli Prime Minister Benjamin Netanyahu dismissed as "pointless." But with another flotilla sailing for Gaza this week, Palestinians pushing for statehood in September, and continued uprisings across the Arab world, this could be a pivotal summer in this conflict.
As an adviser on the Israel-Palestinian conflict for six secretaries of state, Aaron David Miller played a crucial role in structuring American involvement in peace talks in the region. His 2008 book, The Much Too Promised Land: America's Elusive Search For Arab-Israeli Peace, drew widespread praise as an even-handed, insightful mix of diplomatic history and personal memoir. Business Insider spoke to Miller to get a sense of where things are now, and where they might go from here: 1. Palestinians recently dropped their demand that Israel freeze all settlement construction before peace talks can start again. It seems that their confidence in the U.N. route is faltering as U.S. resistance becomes more apparent. Will these revised preconditions have any effect on the peace process? Does this seem to indicate the Palestinians are negotiating from a position of weakness heading into September? I don't know that they actually dropped that demand. It's unclear what exactly their conditions would be until they are faced with an offer to talk. You can't treat these as formal conditions. It's virtually impossible to understand this on a day-to-day or week-to-week basis. This is going to change all the way up to September or to the point where the United States makes a proposal.
I don't think the Palestinians have given up on going to the U.N. in September, at least not from a bargaining point of view. Now that some Europeans have backed away from supporting it, Abbas may be less enthusiastic. They cannot gain membership at the U.N. At most what they'll get is a General Assembly resolution with no legs. Or maybe they'll try to gain permanent observer status. None of this is going to translate into sovereignty. Even if they succeed at the U.N., they'll face a major problem. All of this is going to leave the Palestinian public dissatisfied. It's a no-win situation for President Abbas: if they drop the initiative, Abbas will be accused of giving in to the Americans, as he did with the Goldstone Report. If they succeed, they will face what I’ve been calling "the day after problem." A resolution won’t produce statehood. 2. There were widespread fears a few months ago in Israel and among American Jews that regime change in Egypt would be bad news for Israel and bad news for the Jews. In hindsight, were these fears warranted? How do things stand now? I wrote a piece in the Washington Post early in the Arab Spring—which I actually call the Arab Winter, I think it's more appropriate—arguing that we've come out somewhere between business as usual on the one hand and Armageddon on the other. You're not going to see the Egyptian peace treaty with Israel collapse, you're not going to see the Muslim Brotherhood come to power. Who would want to run Egypt right now? Foreign exchange reserves are running out, there's a 30% decline in tourism, and rising expectations of the population. The Brotherhood does not want to run Egypt any more than the army does. Freedom of the press and open public discourse have already led to a toughening of the public posture toward Israel, though you are also seeing a warming of the Israeli-Egyptian military relationship. We are somewhere near where I thought we might be, somewhere between where we were when Mubarak was president and the revolutionary change that the Arab Spring promised. 3. Many of the same questions can be raised regarding Syria. Do you buy the devil-you-know argument about Syria, which says that Israel would rather see President Bashar al-Assad stay in power than face the uncertainty of what comes next? Does Israel have a dog in this fight? I don't buy the devil-you-know argument, I never have. The arc on the Assads is heading south, and I don't fear the consequences of the end of this regime. It's going to be messy, it's going to be complicated—we don't know where this is going. The opposition cannot overthrow the regime, and the regime cannot quell the opposition. One plausible scenario is the end of the Assads, but the continuation of some Alawi coalition with Sunnis and a weaker regime. The important thing with regard to Israel is that no successor government in Syria will have a stake in heating up the Golan Heights. The Syrians tried that twice last month by orchestrating the Palestinian border crashers. It didn’t work and that tactic was proven to be counterproductive. The same logic with Egypt applies here, too. Syria and Israel have maintained the quietest border in the region, and that will probably remain even if the Assads go. 4. A new flotilla is setting sail this week to the blockaded Gaza Strip. Last year, of course, a similar attempt ended with Israel killing nine people and receiving international approbation. Do you see Israel learning any lessons from last year? What options do they have? Israel has to be smart about this. But so do the Palestinians. There is no conceivable explanation for sending a large group of ships other than to create a P.R. extravaganza and to provoke or risk violence. I heard a quote today that there will be no goods and no guns on the boats. If that's the case, what's the point? This is theater, and it will be bloody theater if both sides push this. I think the Israelis have a problem. You have a maritime blockade, and we can argue for days about whether it's within Israel's legal rights to maintain it; and whether it's smart.
I think the odds are that this time you are going to see a different outcome. Neither side will be able to declare clear-cut victory. For Israel, the question is, how do you balance your needs? How do you establish the fact that the blockade must be respected without a deadly confrontation? 5. Where do things stand regarding Israeli pre-emptive action against a potentially nuclear Iran? It's a question of probabilities. I judge the probability of Israel launching a unilateral military strike on Iran to eliminate a nuclear weapons program as slim to none in the next year. The same goes for the U.S. If the Israelis do it, we will be viewed as complicit. If we do it, we will face serious consequences. Iran has the means to strike back. The price of oil will skyrocket. Withdrawal from Afghanistan and Iraq would become a lot messier because Iran would turn up the heat there. Still, the odds of an unprovoked American or Israeli attack on Iran in the next year are low. Please follow Politics on Twitter and Facebook. Join the conversation about this story » See Also:
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This latest Greek vote/bailout has been particularly hard to come by, in part because everyone is getting clued into the fact that austerity doesn't actually work. Greece (it seems) is basically insolvent, and cutting spending and raising taxes has only made the economy worse, thus counteracting debt payback. It's conceivable, though, that there could be a debt restructuring that actually loosened the noose around Athens, giving the economy a chance to survive. Hopes are now pinned to a debt rollover plan that's emanated out of French banks. DB Strategist Mohit Kumar has a good explanation of what the plan is. Here are his 5 key points: Recent market commentary has suggested a convergence towards a voluntary roll-over approach where bonds maturing over the next three years horizon would be exchanged for securities with longer maturity. ...
It is proposed to exchange securities maturing over the next three years into 30Y securities with a 50:30:20 split where 50% gets rolled into a 30Y GGB security, 20% is allocated to a fund invested in AAA securities and 30% is paid as cash. The coupon on the 30Y GGBs is proposed to be a 5.5%
plus an uplift depending on the GDP performance.
Three issues that need to be considered from a bondholders perspective are the NPV impact, accounting treatment of the rolled over securities and liquidity considerations. The transaction appears to be NPV positive on aggregate for bondholders participating in the roll-over process, which acts as an incentive to encourage a large participation rate.
Now there are a couple key points here, the first is that there's some question about whether such a radical restructuring would count as a default. This matters a) for triggering credit default swaps and b) the ECB can't take Greek debt as collateral when Greece is in default. Well, word is -- according to Reuters -- that the ratings agencies are actually okay with the plan. This might be stunning, since really, this is a radical restructuring, but then when you have European politicians regularly blasting the ratings agencies, or even talking about coming up with their own homegrown ones, why rock the boat? The other issue, as noted above, is that this move could cause major losses for some investors, particularly if you're holding Greek debt at face value on the grounds that you're holding it to maturity. As Deutsche Bank notes, this plan should be NPV positive, meaning that on net, it benefits the bondholders who have been marking their Greek debt to market, more than it hurts the bondholders who are holding to maturity. As for Greece, well... A successful voluntary roll-over exercise could provide much needed liquidity relief to Greece and would pave the path for a multi-year support package for Greece. The rollover would enable Greece to refinance a portion of the maturing bonds with the EFSF loans at an effective rate of 5.5%. Assuming a participation rate of EUR 30bn, the remaining EUR 63bn of maturing bonds are effectively refinanced at 5.5% (cost of funding obtained via the EU/IMF), which is significantly lower than the prevailing
yield level for Greece. With a lower long term sustainable rate of around 7%, a successful rollover would imply a net NPV relief for Greece of EUR 8bn, on the EUR 63bn of funding obtained via the EU/IMF (assuming a loan term of 7 years).
As we have highlighted before, a voluntary roll-over is a liquidity solution rather than a solvency one. It buys time for Greece to move towards a primary surplus and the stronger countries to ring fence their institutions. Even if a successful voluntary roll-over is engineered, we note the ball would lie in Greece’s court and further aid to Greece would likely be conditional on Greece delivering on the
austerity measures. Thus the base scenario remains one of “extend and pretend” with a successful voluntary rollover pushing the situation further down the road. Basically, as noted above, it's a noose-loosener, not a cure-all by any stretch. The economics of Greece within the euro do not look sound, and the anarchic reaction to today's vote do not inspire confidence. But for Europe - and perhaps Greece - this looks like the best way forward. Please follow Money Game on Twitter and Facebook. Join the conversation about this story » See Also:
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Yes, you read that right, the latest model to join Jaeger-LeCoultre’s illustrious Reverso line has been christened the Email. What next? The Reverso Twitter? The Reverso DHL? Yeah yeah, we know, email is French for enamel. And that’s apt because this very handsome Reverso comes with a gloriously bright blue enamel dial. But – seriously guys – in a global market where English is the common denominator, who thought this was a sensible name for a watch? Anyway, let’s put our cheap jibes about the name to one side for a minute and look at this thing. Any Reverso is instantly recognisable and instantly a classic. The guys and girls in Le Sentier know it and they’re not about to stray too far from the honey pot. The Email retains the classic (‘golden ration’) lines of all Reversos but presented in a large, more modern size. With its arabic numerals and bright blue dial, it’s more playful than the ultra-restrained and sophisticated 1931 Tribute but, to our eyes, it’s still absolutely beautiful. Incidentally, if you’d like to hear more about the importance of the Reverso, its design and what makes it so pleasing, check out our Talking Hands video review of the Grande Reservo. Inside the gorgeous body of the Email you’ll find Jaeger-LeCoultre’s mechanically-wound and well-regarded Calibre 822 movement. Oh and just one last thing: the Reverso Email is limited to 50 pieces worldwide. We can’t help wondering why so few? Problems with JLC’s spam filter perhaps? Sorry, we couldn’t resist… Please follow The Life on Twitter and Facebook. Join the conversation about this story »
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This is why Andrew Leonard (h/t Yves Smith) gets paid for blogging and I don't. He tries to do the impossible: make sense out of Michelle Bachmann's "economics":
1) The interest can easily be paid for ...
Bachmann is making the argument here that the U.S. can choose to pay its creditors -- the various holders of government-issued debt -- first, and thus not technically be in default. It's an open question whether credit rating agencies and bond investors will accept that technicality. China might get paid in full, but millions of Americans would immediate get stiffed. Of course, Bachmann doesn't mention that choosing such a strategy would require extraordinarily severe and immediate spending cuts -- around $4.5 billion a day -- in programs such as Social Security, Medicare, defense, unemployment benefits, et cetera. Economists generally agree -- the negative economic impacts of such drastic short-term cuts in government spending would almost surely drive the U.S. straight back into recession.
Furthermore, a failure to reach agreement on the debt limit would guarantee bond market jitters, pushing up interest rates and raising the cost at which the U.S. government can borrow funds -- and thus end up increasing the deficit.
So what happened today? There was a seven-year Treasury auction:
Today the 7 yr saw a yield of 2.43%, 3 bps above the when issued
The WI is where that same note was trading even as it was being auctioned. Which works out to be about a 19.2 cent reduction per $100 of security.
19.2 cents doesn't sound like much, but there was almost $30 Billion in securities issued. So that's $55,642,170.61
that didn't get paid to the U.S. Treasury (or $57,433,535.95, if you're counting the Open Market Activities).
Even if you want to be generous and assume—it's crazy optimistic, but let's be really generous—that half a basis point of that is just a long tail (not entirely unreasonable, but rather generous), there are still $46,376,843.78 (or $47,869,917.64) that just got left on the table out of fear of near-term deficit issues.
Not incidentally, that's $46-57 million that isn't available for maneuvering to avoid an official default, as opposed to the practical default that has been in effect for almost two months now.
But not raising the debt ceiling won't mean anything. Michelle Bachmann assures us that just because Social Security/Disability/Medicare etc. payments won't be made for August 3rd, it's not a problem.
Sooner or later, we'll be talking about really money. Right now, it's just your mother's livelihood. But at least that money has been saved by those who are investing in seven-year Treasuries. Maybe they'll loan her some of that savings. Oh, right:
At least we know where they got the money to buy the notes.
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Email remains one of the most essential and vibrant parts of any essential marketing mix, despite everybody trying to kill it off. Whether you're iTunes hyping up weekly album deals, a mom-and-pop shop wanting to keep it personal with a  small base of customers, or a B2B outfit that supplies corporations with tradeshow wares, email marketing is a big piece of the pie. And if it crumbles upon plating, then you're going to start losing subscribers. If you lose subscribers, then you lose business. Nobody wants to not make money. But there are a lot of email dispatches out there that might make you think otherwise. Here are the 15 things they are doing that probably undermine their bottom-line. | | |
Wharton Business School's West Coast campus is moving to a beautiful new site, 
