Deflation in 2012, inflation in 2014

The argument for deflation is rather straightforward. The boom in the US and much of the world from 1982 until 2008 was partially the result of financial innovations and massive leveraging. That process has come to its end, and the private sector is deleveraging and will do so even further as the economy softens and we slip into the next recession. Governments are coming to the end of their ability to borrow money at reasonable rates in Europe, and soon in Japan and eventually in the US (and that time is not as far off as we would like).

The next big deflationary force is the slowing of the velocity of money. I have written numerous e-letters and devoted a lot of space in the book to the velocity of money and won't go into it again here. It has been falling for five years, pretty much as I wrote it would, back in 2006. (I was writing about the velocity of money at least as far back as 2001, and probably earlier. It is a very important concept to grasp.) We are now close to the historical average velocity of money, but since velocity is mean-reverting it will go well below the historical average. This process takes years; it is not something that is going to end any time soon.

A slow-growth, Muddle-Through economy is deflationary. High and persistent unemployment is deflationary.

Absent some new piece of data that I can't see now, we are in for lower bond yields in the US. Rates are going lower and are going to stay low for longer than any of us can imagine.

I think the Fed will respond to the government acting in a fiscally responsible manner, which is inherently deflationary, by fighting that deflation with the only tool it has left; and that is outright monetization of debt. They will call it something else, of course, but that will be the actual outcome.

And they will be able to monetize more than you think they can without causing a repeat of the 1970s. Eventually it will catch up to us, as there is no free lunch, but they are betting they will be able to reduce some of the threat of actual inflation by cutting back on the money supply and raising rates. But we are years off from that. So, yes, at some point inflation will be back.

Anybody who says they know the timing is a lot more confident in his/her crystal ball than I am. Mine is rather cloudy on this topic. But I think I can see out a year or so, and it looks like continued low rates and deflation. By the way, just to appease the gold bugs among my readers, given my deflationary call, I will note in passing that solid gold stocks were up hugely during the deflationary Great Depression of the '30s. Even with the dollar on the gold standard. Just saying. John Mauldin

Global Top Marketing. TV is dead

Social media marketing company Global Top Marketing starts video digests http://www.facebook.com/pages/global-top-marketing/177232165736687

Why TV is dead?

• "Networks" are completely meaningless. We don't know or care which network owns the rights to a show or where it was broadcast. The only question that's relevant is whether it's available on Netflix, Hulu, Amazon, or iTunes. This means that one of the key traditional "businesses" of TV--the network--is obsolete.
• The majority of what we pay our cable company is wasted. We get broadband Internet from our cable company, and we use that constantly. But we also get 500 channels that we almost never watch, along with a couple (HBO, Tennis Channel) that we pay extra for and do watch occasionally.
• We rarely watch TV ads, and when we do, we're usually doing something else at the same time--like typing. Also, the ads seem startlingly intrusive, because we're not used to them.

More directly, what this means is this:

• The vast majority of money TV advertisers spend to reach our household (~$750 a year, ~$60/month) is wasted, because we rarely watch TV content with ads, and, when we do, we rarely watch the ads.
• The vast majority of money we pay our cable company for live TV (~$1,200 a year / ~$100/month) is wasted, because we almost never watch live TV and we can get most of what we want to watch from iTunes, Netflix, Hulu, and Amazon.

This user behavior has been changing for a while, and, so far, it has had almost no impact on the TV business. On the contrary, the networks and cable companies are still fat and happy, and they're coining more and more money every year.

But remember what happened in the newspaper business.

When the Internet arrived, user behavior started to change. It took a decade for this change in behavior to hit the business. But when it hit the business, it hit it hard--and it destroyed it shockingly quickly.

And the same thing seems likely to happen to the TV business.

Read more: http://www.businessinsider.com/tv-business-collapse-2012-6#ixzz1wl4Glu3g

Mobile is best trend

In 2011, global spending on mobile media topped $100 billion for the first time, according to a report released by Strategy Analytics.  The total amount spent by consumers on data plans, apps and media content was $121.8 billion, and that number is projected to jump more than 13% to $138.2 billion this year.  

Of the nearly $139 billion estimated to be spent on mobile media, the lion's share, or 60%, is projected to go toward data plans as data-hungry consumers are estimated to spend $82.8 billion on data plans alone, up 9.5% form last year. This makes mobile operators key beneficiaries of the significant chunks of money being spent on mobile. 

The amount spent on smartphone apps is anticipated to jump over 30% to $26.1 billion, making apps the second biggest source of revenue in mobile media. 

More than 23 billion smartphone apps were downloaded last year, and this year could see as many as 32 billion. For this reason, apps are quickly displacing mobile display ads as the place to spend marketing dollars. In the USA and Western Europe alone, $1.7 billion was spent on in-app advertising vs just under $1 billion for display ads on the mobile Web.  

Video on mobile devices is growing as well, as 280 billion videos are estimated to be viewed this year, almost tripling the 108 billion videos watched in 2011. But even though revenue from video is expected to grow 24% this year, revenue is expected to be $3.6 billion, accounting for 2.4% of total mobile media revenue. 

Mobile ad growth nearly doubling

While spending on apps and data plans is significantly higher than the amount of money marketers currently spend to advertise on mobile devices, mobile advertising is growing at a faster clip. 

The amount advertisers and marketers are projected to spend is $11.6 billion, nearly double the $6.3 billion spent in 2011. This brings total media spending - $139 billion (for apps, data plans) plus $11.6 billion (mobile advertising) - to just below $150 billion this year, up 17% from last year.

The Strategy Analytics report says that advertising revenue on mobile apps in the U.S. will increase by 118% this year, but there is some question as to whether that money is being spent wisely.

A report by Nielsen in March of this year found that U.S. consumers were actually less likely to make purchases based on mobile ads than those in European countries. That report stated that only 6% of U.S. Smartphone owners went out and bought an item they saw advertised on their phone, compared with 18% in Italy, 15% in Germany and 14% in the UK. When asked if they made a purchase directly from their device based on an ad, only 4% of U.S. Smartphone users answered yes, while 7% of UK respondents, 8% of Germans and 12% of Italians said yes.

Nielsen also found that only 26% of U.S. consumers trusted mobile ads, while 46% trusted TV advertisements and over 50 % trusted ads on branded websites. 

Mobile Informational Capital

Foursquare's last round, a $50 million raise in June 2011, valued the company at $600 million.

It's starting to look like all that hype was unwarranted.

Foursquare is no longer the only social network built for the mobile Internet user – now there is Instagram and Path and a few others – and it is definitely not the most exciting new social network since Facebook; that's Pinterest.

The biggest problem for Foursquare is that, compared with other mobile social networking products, not that many people seem to use it.

On its about page, Foursquare says it has 15 million registered users. By comparison, Instagram has 35 million users.

According to AppData, 570,000 people share Foursquare data into Facebook every day, 3 million every month. Pinterest, which only launched in 2010 has 1 million users sharing data with Facebook every day, and 10 million sharing every month. For Instagram, the numbers are 2 million and 11.5 million.

Apple's iTunes store doesn't expose how many times an app has been downloaded, but one rough measurement of an app's downloads and user engagement are the number of reviews users have written.

Simply put: not that many people are using Foursquare, certainly not compared to the amount of people using Instagram, Pinterest, or even Yelp.

The good news for Foursquare is that CEO Dennis Crowley wisely capitalized on the app's early hype to raise a boatload of cash last summer (with minor dilution). Foursquare only has about 100 employees right now, and with $50 million in the bank, it can probably afford to keep them employed for another three or four years.

The even better news for Foursquare is that investors and executives know the company needs to pivot in some way, and they are trying to figure out how.

One idea we've heard is being floated around is to turn Foursquare into more of a Web company and less of a mobile-only platform. It could be something like Yelp or MenuPages.com – with a search engine-friendly Web page full of user-reviews and tips for every restaurant on the planet. That's a good idea, especially since Foursquare tips are very useful.

That kind of pivot would also make Foursquare a more useful product to the majority of users out there who just want to consume data, not create it through a gimmick like "checking-in." (Likewise, most YouTube users don't upload videos; they just view them.)

The only downside is that Foursquare investors probably were hoping the company would turn into more than another Yelp. Yelp, now a publicly traded company, has a $1.5 billion market cap. Venture investors expect more than a 3X return.  But then again, there are worse fates for startups with lots of early hype and little user-adoption three years in.

 http://www.businessinsider.com/foursquare-may-not-be-toast-yet-but-its-browning-at-the-edges-2012-4?

The most important trends in global economy 2012

Trend #1 according to foresight expert Edward Musinski - 

Asian investments around the world.

Only some examples.

1.The Qatar Investment Authority (QIA) is a major player in European real estate, whether it is a finished asset or development.  Qatar Holdings LLC has made its first investment in a class-A office project in Poland. http://www.swfinstitute.org/swf-news/qatar-holdings-buys-warsaw-office-development/

2. The Qatari Diar Real Estate Investment Co, which is a sovereign wealth enterprise of the Qatar Investment Authority (QIA), plans to invest €250 million (US$ 337.4) in developing an Adriatic resort in Montenegro.  http://www.swfinstitute.org/swf-news/qatari-diar-montenegro-resort-dev/

3. China Investment Corporation (CIC) is a sovereign wealth fund. Since then, CIC's assets have grown to $500 billion at the end of 2011.

China Investment Corp. (CIC), who wrote that China was keen to make equity investments in Western infrastructure, especially in Britain. http://www.hurriyetdailynews.com/default.aspx?pageid=438&n=china-eyes-to-buy-european-assets-2011-11-28

Now let’s take a look at ten areas where we expect to see trends making a major impact in 2012!

1. BRIC & beyond rising: Markets, competitors, mindsets and systems
2. Financial and economic uncertainty explodes:  New roles for power brokers?
3. Geopolitical tensions: Politics as a barrier to economic and social stability, versus an enabler
4. Food, water and energy security: Growing challenges
5. Cybercontrols & cyberwars: The new frontlines of authority and crime
6. Technology breakthroughs: Are we serious and will we pay the price?
7. Beyond the Gang of 4:  The fight for controlling the interface
8. The democratization of everything: Facing the tensions of globalization and fragmentation
9. Redefining playing fields:  Fighting to own the new consumer
10. Generations Y and Z moving to the forefront:  Preparing for the digital natives

http://vsocial.livejournal.com/141290.html

10 predictions for Web Trends 2012

#1: social will go away, but that the next generation of social apps will be about doing things more efficiently and saving time
http://znacomstva.blogspot.com/2012/01/10-predictions-for-web-trends-2012.html

Tech M&A trends are positive http://goo.gl/fb/TxDCZ

M&A activity in 2011

For the entire year, 460 companies were bought for $46.4 billion, down 13% from the activity seen in 2010. But the deals were valued much higher as the total amount spent for the purchases was 30% higher than the $35.6 billion spent in 2010. 

The median price paid for a company catapulted 77% to $71 million last year, with the median amount raised down 12% to $17 million before reaching an M&A or buyout exit. The drop in funds reflect the lower start-up costs needed to start a company these days. 

"Acquisitions of companies liquidating their assets were halved in 2011 and companies are benefiting from lower start-up costs by taking capital farther toward a larger acquisition,” said Jessica Canning, global research director for Dow Jones VentureSource, in a release.

The largest acquisitions in 2011 include Plexxikon bought by Daiichi Sankyo for $805 million, Medtronic's $800 million purchase of Ardian, Shire's $750 million acquisition of Advanced BioHealing and Electronic Arts purchase of PopCap Games for $732 million. 

As for the largest transactions in the consumer technology space, PopCap was the largest, followed by Quidsi's sale to Amazon for $545 million, Tiny Prints $406 million sale to Shutterfly, Wal-Mart Stores $300 million purchase of Kosmix, and KAR Auction Services' acquisition of Openlane for $250 million. 

Read more - http://w.po.st/share/entry/redir?publisherKey=vator&url=http%3A%2F%2Fvator.tv