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Saturday, December 20, 2014 3:23 PM


Evolution of YouTube: Will it Supplant Mainstream TV, Vanish, Evolve, or Languish?


What will become of YouTube?

It started from nowhere about 10 years ago as an idea with no revenue and no content, then pretty quickly lots of content coupled with a plethora of copyright infringement lawsuits.

Today, YouTube gets 300 million hours of watching every day. Top content producers have millions of followers and make millions of dollars.

But where to from here?

New Play Button

The New York Times tackles that question in a fascinating story YouTube’s Chief, Hitting a New ‘Play’ Button.

The article is about Susan Wojcicki, the chief executive of YouTube, how she got her start, and in turn how Google got its start. Wojcicki was Google's 16th employee, and she is still with Google.

The Times notes Smosh, a pair of 20-something lip-syncing comedians, have roughly 30 million subscribers to their various YouTube channels. PewDiePie, a 24-year-old Swede who provides humorous commentary while he plays video games, has a following of similar size.

"Every day, one billion people around the world watch more than 300 million hours of videos on YouTube. In November, 83 percent of Internet users in the United States watched a video on YouTube, according to comScore. In contrast successful network television shows like 'NCIS: New Orleans' or 'The Big Bang Theory' average a little more than half that in weekly viewership."

I'm at the other end of the extreme. I watch very little TV. In fact, I have never even heard of 'NCIS' or 'Big Bang'

It's a fascinating success story for 46-year old Ms. Wojcicki, one of the most powerful media executives in the world.

Where To Next?

We can all speculate, but "where-to from here" is unknown. Not even Wojcicki knows.

Things are always changing. Part of being successful here is being comfortable with not knowing what’s going to happen,” said Wojcicki.

One thing for sure is that You-Tube will evolve. Expect more internet content, not less. Also expect  more forays by Google into TV-land material.

From what we have seen so far, Wojcicki is still the right person to lead the way.

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

Friday, December 19, 2014 9:24 PM


Russia Not Selling Gold, It's Buying; Reflections on Extremely Sloppy Reporting


On December 17, ZeroHedge asked Will Putin's Next Step Be To Sell Gold?

On December 18, ZeroHedge answered his own question wrongly with Russia Has Begun Selling Its Gold, According To SocGen.

I did not believe that when I saw it yesterday, and I sure don't today after viewing a few charts from Nick at Gold Charts "R" Us.

Russia Gold Reserves Up 600,000 Ounces for November



In US dollar terms, Russia's gold reserves are worth about $0.4 billion less.

Russia Gold Reserves in US Dollars



Of course, Russia may have started selling in December, but that's not precisely what happened either.

Gold Chat Debunks Russia Selling Gold Rumor

Please consider this snip from the December 19 Gold Chat article ZH fail on Soc Gen fail on Russia selling its gold.

As is common in internet land, people pick up stuff by others without doing basic drilling down to the source. The reason you have to do this is because people often misinterpret the source. Other times the source is wrong.

ZH quote the following from Soc Gen: "It appears possible that the Central Bank of Russia has started to sell off some of its gold reserves in December, with some sources reporting that official gold reserves dropped by $4.3 billion in the first week of the month."

Now that is a very specific figure, $4.3b. It seems that Soc Gen got it from this Business Insider republication of a Vesti Finance article which said "On Thursday, the Central Bank of Russia announced that gold reserves dropped by $US4.3 billion in just one week, reports Vesti Finance."

However, if we check the [Vesti] source link [using Google Translate] we get the following:

"Russia's international reserves for the week from November 28 to December 5, decreased from $ 420.5 billion to $ 416.2 billion, the central bank said on Thursday. ... For the previous week, from 21 to 28 November, gold reserves increased from $ 420.4 billion to $ 420.5 billion. On November 14th the size of gold reserves stood at $ 420.6 billion, on November 7 - $421,400,000,000 rubles."

Now the decrease they are talking about is $4.3b in total reserves but the headline mistakenly assumes it is all gold. The gold specific figures they mention show completely different numbers.
Link Sloppiness

This is precisely what happens when you are sloppy with links.

My major criticism is not that ZeroHedge posted something inaccurately, but that he frequently fails to link to stories.

On many occasions ZeroHedge states things like "Bloomberg says" and I spend 15 minutes looking and cannot find anywhere Bloomberg said anything remotely close to what was being attributed.

I realize sometimes there is no link. On such occasions, I will say something like via email, no link available.

In this case it appears the source of this misrepresentation was Business Insider who also got the story amazingly wrong.

On December 12, Business Insider reported Russia Is Fighting Its Financial Problems By Selling The Gold They Have Been Hoarding.
Russia is finally using all that gold they have been hoarding.

On Thursday, the Central Bank of Russia announced that gold reserves dropped by $US4.3 billion in just one week, reports Vesti Finance.

Which isn’t all that surprising. ....

In the third quarter alone, Russia added more gold to its reserves than any other nation, according to the Telegraph. And over the last decade, Russia has tripled its gold stocks, according to data from the World Gold Council.

Until recently, Russia hasn’t dipped into these enormous reserves.

But now that the ruble is getting pummelled following the decline in oil prices and sanctions imposed on Russia’s economy by the West, Russia’s central bank is apparently selling off some of its gold reserves to fight inflation and the ruble’s decline.
Business Insider Sloppy Reporting

Russia is not selling gold, rather the US$ value of its international reserves fell by $4.3. Billion. Here is the opening sentence "Russia's international reserves for the week from November 28 to December 5, decreased from $ 420.5 billion to $ 416.2 billion, the central bank said on Thursday."

Gold Chat ended with ...

"Editor's Note: Earlier it was reported that the Central Bank's gold reserves decreased by $4.3 billion, quoting Vesti Finance. However, in actuality, it is international reserves assets that have decreased — not gold. Appropriate changes have been made."

Now how hard was that fact checking Soc Gen and ZH?

ZeroHedge messed up another gold story as well. Please consider the December 17 Gold Chat article Zero Hedge fail on undocumented gold supply story

This kind of nonsense is precisely why I am meticulous with links. I ask others to carry the same standard.

Bloomberg is also terrible. In fact, mainstream media is horrendous in general.

Many mainstream media news outlets only link to themselves. And when that happens there is no way to check the facts. Then nonsense like this happens. I rest my case.

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

2:54 PM


Spain to Abolish Rent Controls; 20,000 Small Businesses May Close; Good Thing or Not?


Abolition of rent controls in Spain this month has prompted some landlords to increase fees by tens of thousands of euros. The Guardian claims Spanish rent changes ‘could close 20,000 small businesses’.

Is this a good thing? Ponder that question for a moment, but also consider a few snips from the article.

Up to 20,000 small Spanish businesses could be forced to close when rent controls are abolished at the end of this month, according to the self-employed workers union. Many of the closures will be emblematic shops that shape the urban landscape in cities such as Madrid, Granada and Barcelona.

The Camisería Hernando has been in business since 1857 and has occupied the same shop on Madrid’s Gran Vía for 50 years but is closing after the rent shot up from €3,000 to €30,000 a month.

Barcelona has already lost a toy shop and a secondhand bookstore that have been a feature of the old part of the city for more than a century. Both premises have been occupied by retail clothing chains. Other gems such as the modernista Monge stamp shop and the Quiles grocery are also under threat as the city succumbs to an influx of chain stores.

Local government officials have refused to intervene to preserve the city’s heritage but local artists and intellectuals are taking the case of Monge to court. While some landlords have been prepared to negotiate affordable rent hikes, many shops are in buildings owned by banks and funds that simply notify the shopkeepers of the impending rise.

“About 60% of the 200,000 affected businesses have been able to negotiate a rise of around 35%,” César García, of the self-employed workers union, said. “But most of the rest have received a letter telling them the rent is going up by thousands of euros and that it’s not negotiable.”

“We’re closing after 72 years,” said Susana Esnarriega, owner of Así, a doll shop on Madrid’s Gran Via. “The landlord is giving us till Epiphany to get out but he hasn’t even made us an offer.”
Good Thing or Not?

Is this a good thing?

That's a somewhat misleading question because I was not specific.

Did I mean a good thing that 20,000 small businesses may close, or that rent controls will be abolished? Then again, does it really matter which question I meant? Let's start with rent controls and work our way through.

Without a doubt abolishing rent controls is a good idea. Government interference in the free market is never a good thing.

Will rents soar really from €3,000 to €30,000 a month? I rather doubt it, except perhaps in rare cases of a superb high-traffic location.

And in such cases, if an owner can really collect that much in rent, then yes, it is a very good thing the existing store closes. A new store would have to generate lots of income and create a lot of jobs to be able to pay that kind of rent.

Fear-Mongering

The closing of stores is in and of itself neither a good nor bad thing, but more productive uses of capital are always a good thing. In this case, if stores close and new ones open (which is what one would expect if rents go up) then yes, that's a very good thing.

The fear-mongering 20,000 store guesstimate by the small business association is highly questionable. But the more stores that close, the faster the Spanish economy is likely to grow as the land-owners will make better use of their land.

This was a superb decision by Spain to abolish rent controls. France and Italy should take note of such free-market reforms, because it's going to work.

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

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