China cannot believe its luck over new investment bank - New York times

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Tom Mitchell in Beijing

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What began as a seemingly quixotic defection to the AIIB by the UK — the first US partner to turn a deaf ear to American protestations about the bank — has turned into an unalloyed strategic triumph for Beijing. 

More than 50 countries, including traditional US military allies such as Australia and South Korea, have signed up. Only Japan has — so far — stood by Washington’s side, echoing the Obama administration’s concerns about governance and transparency standards at the new bank.

The Chinese government’s success with the AIIB is not just luck, however, it is the fruit of a very smart policy adjustment.

From its declaration of an air defence identification zone over the East China Sea in November 2013 to its deployment of an oil rig near Vietnam last May, Beijing’s assertion of “hard power” appeared to be putting it on a collision course with almost all of its regional neighbours.

The nadir came on May 26, when a small Vietnamese fishing vessel harassing the oil rig was run down and sunk by a much larger Chinese trawler. The incident, which arguably amounted to attempted homicide on the high seas, has since been immortalised on YouTube. 

In private, Chinese foreign policy experts acknowledge that the violent protests that erupted across Vietnam after the over-reach in the South China Sea provided a powerful wake-up call. With the annual Asia Pacific Economic Co-operation summit scheduled to be held in Beijing just six months later, the Chinese government decided to ditch hard-power projection for soft-power persuasion.

At APEC, the Chinese government backed down from a looming confrontation with Japan over the contested Senkaku or Diaoyu islands; signed unexpected environmental and military accords with the US; and unveiled a $40bn fund to support an infrastructure-focused “New Silk Road” linking Asia to Europe. The AIIB will contribute at least another $100bn to this initiative in which Beijing intends to assume the role once held by Venetian bankers along the old Silk Road. 

China’s strategic volte face has benefited from an almost comic series of mis-steps by its great geopolitical rival. US congressional reluctance to sign off on reforms giving China and other developing nations a greater role at the World Bank and International Monetary Fund has been compounded by the Obama administration’s inability to, as they like to say on Capitol Hill, “count the votes” on the AIIB.

It is one thing to oppose an institution behind-the-scenes and fail quietly; it is quite another to do so brazenly. Worse for Mr Obama, his standing in the Asia-Pacific region will deteriorate even further if he cannot secure congressional “fast-track” authority to seal the deal on the Trans-Pacific Partnership trade talks, which pointedly exclude China.

Should TPP fail, then the economic component of the US president’s “pivot” towards Asia will — to Beijing’s surprise and delight — have completely unravelled.

Chinese President Xi Jinping cannot, however, celebrate just yet. While 2015 may have started out as an annus mirabilis for Beijing, an evolving diplomatic mess in Sri Lanka is a reminder of how quickly geostrategic momentum can change.

China’s crisis in Colombo is largely of its own making, having bankrolled some $5bn-worth of infrastructure projects on the assumption that Mr Xi’s erstwhile ally there, Mahinda Rajapaksa, had as firm a grip on power as the Chinese Communist party does.

Mr Rajapaksa’s shock election defeat in January has exposed China’s Sri Lankan infrastructure investments — and related lending packages — to unwelcome scrutiny from the new government in Colombo. If proven, the accusations there of a lack of transparency and worse will perfectly illustrate Washington and Tokyo’s worst fears about potential governance lapses at the AIIB.

Beijing’s challenge now is to ensure that the mistakes in Sri Lanka are not repeated under the auspices of its popular new bank.

AIIB: China outsmarts US diplomacy on Asia bank - New York Times

http://www.theage.com.au/comment/aiib-china-outsmarts-us-diplomacy-on-asia-bank-20150330-1maoq7.html

March 31, 2015

• Hugh White

Canberra's U-turn on the Asia bank suggests Australian politicians finally accept that a new era has dawned in our region's politics.

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China's new Asia Infrastructure Investment Bank (AIIB) is a very big deal for Asia's economic future, but the way its establishment has played out makes it an even bigger deal for Asia's changing political and strategic order. And Canberra's announcement last weekend that Australia will join the AIIB despite the objections of the United States may come to be seen as marking a  historic shift in Australian foreign policy.

For the first time, Australia has unambiguously defied Washington by acknowledging China's claims to a major regional leadership role. The government might not admit it, but they quietly crossed a Rubicon on Sunday.

It is quite clear that Obama argued against the AIIB precisely because it would strengthen China's leadership in Asia, and hence erode the US's. He expected loyal allies like Tony Abbott to fall in line. 

We can see why the AIIB is so significant by looking both at why China has set it up, and why the United States has opposed it. China's motives are partly economic, and the logic for this is clear. To reach its economic potential Asia needs to invest about $1 trillion each year over the next decade on infrastructure of all kinds.

China's President Xi Jinping (4th from the right) and guests at the Asian Infrastructure Investment Bank (AIIB) launch ceremony at the Great Hall of the People in Beijing last October. Photo: Reuters

Existing outfits like the World Bank and the Asian Development Bank have neither the money nor the expertise to begin to meet this challenge. China alone has the money needed to get things moving and the expertise, built up through its extraordinary achievements in developing its own infrastructure over the past decade. No country in history has ever built so much, so quickly.

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that is only half the story. China understands that leading this kind of effort will deliver huge strategic benefits as well, not just consolidating China's position as Asia's economic hub but also building its credentials as the region's political leader too. No one watching its foreign policy over the past decade could doubt how important that goal has become to Beijing.

This is exactly what worries Washington. People there know better than anyone how much the US's leading role in the World Bank and IMF has served US political and strategic interests since World War II. They know that the AIIB can help China contest US primacy in Asia and take a bigger share of regional leadership for itself, and that is precisely what Washington wants to avoid. That is what President Obama's "Pivot to Asia" is all about.

Six months ago, when China first asked Australia and other countries to join the AIIB, President Obama hit the phones, asking them to say "no". In public US officials said it was simply concerned about some technical questions about the way the AIIB would be run. Privately, however, it is quite clear that Obama argued against the AIIB precisely because it would strengthen China's leadership in Asia, and hence erode the US's. He expected loyal allies like Tony Abbott to fall in line.

At first, that is exactly what Abbott did. After speaking to Obama, he apparently reversed a prior cabinet decision and announced that Australia would not join - despite the very clear economic arguments in favour. Now, just a few months later, he has changed his mind. What happened to cause this shift?

One powerful factor has been the collapse of good will between the Obama administration and the Abbott government.  Despite the fulsome rhetoric, relations between Washington and Canberra have been quietly cooling for some time, but they went into the deep freeze after Obama used a major speech in Brisbane last November during the G20 to attack the Abbott government over climate change. Not surprisingly, Abbott took this very personally.

beyond the personal and political atmospherics, there has been a much more important shift under way. Ever since Obama first announced it in a speech to our Parliament in 2011, Australian governments of both parties have accepted the underlying premise of his Pivot to Asia. This was that the US could remain the uncontested leader of Asia, and make no concessions to China's ambitions to play a bigger regional role, even as China's economy overtook America's to become the largest in the world, and its diplomatic and military heft grew too as a result.

This was always an absurd illusion. Much as we might wish that US leadership could last forever, it simply defies the laws of strategic gravity that Asia's economic order could change so radically while leaving its political order unaffected. As China's wealth and power grow, its leadership role in Asia is going to grow too. Only when the rest of us recognise this essential fact can we start to work out how best to respond to it.

Over the past couple of weeks, countries around the region and beyond, including close US allies like Britain, South Korea and Australia, have rejected America's concerns and agreed to join the AIIB, knowing full well what that means for Asia's political order. In a fit of anger a senior US official criticised Britain for "accommodating" China's ambitions, and no doubt they are equally dismayed by Canberra's decision.

And no wonder: this is a massive diplomatic defeat for Washington, as so many of its friends reject the logic underlying US policy in Asia, and embrace a future in which China is increasingly acknowledged and accepted as a regional leader in its own right.

America's mistake has been to assume that the appeal of China's economic opportunities would be outweighed by fears of how China would behave as a regional leader, so that countries like Australia would resist the opportunities offered by the AIIB in favour of supporting the US's refusal to make its own accommodation with China. Hopefully they now know better.

Australia's mistake, under recent governments both Labor and Coalition, has been to assume that Washington knew what it was doing and had a credible strategy to respond to China's rise. Hopefully they now know better as well. The lesson of all this is that Washington needs to think anew about its response to China's rise, and we in Australia need to start thinking for ourselves about it, and stop looking to Washington for answers.

Of course this is not about acquiescing in a Chinese bid to dominate Asia over coming decades. It is about recognising that as wealth and power shifts in Asia, the region needs to build a new order that is dominated neither by the US nor by China, but in which leadership is shared between them. Australia needs to contribute to that process, doing whatever we can to ensure it works out in our interest. Sunday's announcement was a vital first step.    

Hugh White is an Age columnist and professor of strategic studies at the Strategic and Defence Studies Centre, ANU.

Emerging markets: The great unravelling - Financial Times

April 3, 2015 at 11:26pm

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April 1, 2015 7:27 pm

Emerging markets: The great unravelling

James Kynge and Jonathan Wheatley

Developing economies are suffering their biggest capital outflows since the financial crisis

Faced with recession, decade- high inflation, a fiscal crisis and water rationing, more than 1m Brazilians took to the streets last month to protest against corruption and mismanagement in their government. In China, growth is slowing as property prices fall, propelling more than 1,000 iron ore mines toward financial collapse. The patriotic citizens of Russia, meanwhile, are deserting their nation’s banks, switching savings into US dollars.Such snapshots of growing distress in the world’s largest emerging markets are echoed among many of their smaller counterparts. Several countries in Sub-Saharan Africa are beset by dwindling revenues and rising debts. Even the turbo-powered petroeconomies of the Gulf, hit by a halving in the price of oil over the past six months to $55 a barrel, are moving into a slower lane.

Though these expressions of distress derive from disparate sources, one big and insidious trend is working to forge a common destiny for almost all emerging markets .
The gush of global capital that flowed into their economies in the six years since the 2008-09 financial crisis is in most countries now either slowing to a trickle or reversing course to find a safer home back in developed economies.
Highest outflows since 2009
On an aggregate basis, the 15 largest emerging economies experienced their biggest absolute capital outflow since the crisis in the second half of last year, as a strong US dollar drove emerging market currencies into a swoon and investors grew nervous over the prospect of a tightening in US monetary policy, according to data compiled by ING. At the same time, low commodity prices slammed GDP growth rates across the developing world.
These trends, analysts say, signal a “great unravelling” of an emerging markets debt binge that has swollen to unprecedented dimensions. Importantly, the pain inflicted by this capital flight is being felt beyond financial markets in the real economies of vulnerable countries and in a surging number of emerging market corporations that are forecast to default on their debts.
“Certain parts of the world are looking really vulnerable,” says Maarten-Jan Bakkum, senior emerging market strategist at ING Investment Management. “Places like Brazil, Russia, Colombia and Malaysia, that rely heavily on commodity exports, are going to get hit even harder, while those countries that have borrowed most excessively like Thailand, China and Turkey also look risky.”

Analysts say that while emerging markets have been the setting for several recent financial squalls, the current exodus of capital could herald more fundamental changes. Indeed, although the “taper tantrum” of mid-2013 — triggered by the US Federal Reserve signalling its intention to unwind its monetary stimulus — caused turmoil in financial markets, its impact on real emerging market economies was transitory.
This time around, though, things look more serious. The International Monetary Fund said this week that total foreign currency reserves held by emerging markets in 2014 — a key indicator of capital flows — suffered their first annual decline since records began in 1995.
Without steady capital inflows, emerging market countries have less money to pay their debts, finance their deficits and spend on infrastructure and corporate expansion.
Real economic growth is set to suffer this year, analysts say. Capital Economics expects GDP growth in emerging markets to fall to 4 per cent from 4.5 per cent in 2014, as Russia slips deeper into recession, Brazil continues to struggle and China is hampered by its ailing property market.

Underlying such sober projections is a sense that an inflection point has been reached with the end of the commodity “supercycle” and the advent of low oil prices. “What is going on is a great unravelling of the market conditions of the past 15 years,” says Paul Hodges of International eChem, a chemicals and commodities consultancy.
Mr Bakkum also sees a significant reversal in the animating forces of global capitalism. “The EM capital outflows represent the gradual unwinding of the excessive inflows into the emerging world during the years of zero interest rates in the US,” he says.
However, the outlook is not universally bad. Investors have flocked to India, which has a reform-minded government and has gained from falling energy prices that have helped it slash its current account deficit. Indonesia and Mexico are also attracting investment for similar reasons.
Foreign exchange slump
Nevertheless, according to data collated by ING for the leading 15 emerging market economies, net capital outflows in the second half of last year totalled $392.4bn. This compared to a total of $545.9bn in capital outflows over three quarters during the 2008-09 crisis. If the first quarter of this year also shows a capital outflow, the total loss from emerging markets over three quarters could get close to that seen during the crisis. It is possible, analysts say, that outflows will not only continue in the first quarter of this year but may actually accelerate to eclipse the $250.2bn seen in the final three months of 2014.

While in 2008-09 the US was a key catalyst of emerging market distress, this time China is seen as the chief bugbear. Slowing Chinese GDP growth, coupled with a slowdown in construction, is triggering a large bout of capital flight as investors think they will earn more by parking their money elsewhere.
The main expression of this reversal is the implosion of the “China carry trade”, in which Chinese investors borrowed at low rates of interest abroad to pump back into Chinese property and a range of shadowy financial products . But such investments now seem more risky, and a record $91bn fled the country in the final quarter of last year.
“It’s all China, directly and indirectly,” says Frederic Neumann, economist at HSBC. “Despite a solid current account surplus, capital outflows over the past six months have drained reserves from China’s vast forex chest . . . and with the renminbi more fairly valued today it is difficult to see China running big balance of payment surpluses again.”
In Brazil, fragility stems from a combination of falling commodity prices and the rising US dollar. Although the country managed to attract net capital inflows in the second half of last year, the cost of doing so was a punitive interest rate environment in which the policy lending rate is 12.75 per cent.
Paying debts
Like many emerging markets, critics say, Brazil failed to use its boom years to make the tough decisions needed to drive productivity growth. “To reform while you are facing headwinds is very difficult,” says Sergio Trigo Paz, head of EM debt at BlackRock. “Some emerging markets will struggle to keep their investment grade ratings.”
According to a study by McKinsey, total emerging market debt rose to $49tn at the end of 2013, accounting for 47 per cent of the growth in global debt since 2007. That is more than twice its share of debt growth between 2000 and 2007.

Some of the most significant capital outflows are originating from countries that piled debts up the quickest. South Korea, for instance, saw its debt to GDP ratio rise by 45 percentage points between 2007 and 2013, while China, Malaysia, Thailand and Taiwan experienced debt surges of 83, 49, 43, and 16 percentage points respectively.
But it is not only countries that are vulnerable. Another area of concern is the rise of the emerging market corporate hard currency bond market. Ten years ago, it hardly existed. Today, it is estimated at more than $2tn, making it bigger than the $1.6tn US high yield bond market, an asset class familiar to investors for decades. Its growth was fuelled by expansionary monetary policies in the US and elsewhere and by the hunt for yield among investors and fund managers with targets that could no longer be met in developed markets.
But US policy is changing course. David Spegel, head of emerging market bond strategy at BNP Paribas, is among those expecting conditions for emerging market borrowers to deteriorate. In a recent report, “Harbingers of Default”, he underlined the dangers posed by capital outflows: “The persistent higher cost of funding will continue to erode credit quality for related higher-risk issuers, if sustained . . . Since most defaults typically coincide with significant investor outflows, we continue to believe that further bouts of EM distress may yet come to bear on the market, as forced selling is exacerbated by already low liquidity conditions.”
Indeed, Mr Spegel notes, current bond prices suggest investors expect the rate of default for non-investment grade EM bonds — about a third of the total — to rise from 2.8 per cent on Wednesday to 12 per cent in January 2017.
If the upshot of all this is merely that countries and companies that have engorged themselves irresponsibly on debt are set to receive a dose of market discipline, then all well and good. The danger for emerging markets, and the wider world, is that the capital outflows will snowball to an extent that robs EM countries of the lifeblood they require to create jobs and engender their people with hope for the future.

3 Charts That Show Why We’re Addicted to Our Phones - TIME

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• http://time.com/3765694/smartphone-dependence/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29
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• Jack Linshi @jacklinshi
 

April 1, 2015

    

They make us feel happy and productive

A new report from Pew Research Center takes a sobering look at why many Americans just can’t be without their smartphones.

Many Americans need — yes, need — their phones to access the Internet, according to Pew’s survey of U.S. adult smartphone owners, published Wednesday. About 7% of respondents said they required their phone to go online since they did not have broadband or any other options for Internet access. The most “total smartphone-dependent” Americans, as Pew termed this category, tended to be in low-income and non-white groups:

Pew’s survey also found the 36% of U.S. adults didn’t own a smartphone, suggesting how millions of Americans, believe it or not, are getting by just fine without their Apple iPhone or Samsung Galaxy. In fact, most smartphone owners can complete tasks just fine when their phones aren’t by their sides:

But in the end, Americans probably won’t ditch their smartphones if they don’t have to. Though about half of respondents said their phones made them feel distracted, the overwhelming majority also said their phones made them feel happy and productive.

That love-hate relationship might be why some scientists believe cell phone addiction is real — and also why some research shows you that it might actually be beneficial to always have your phone. In that case, everyone needs their phones.

To save the euro,To save the euro, let Greece go - Financial Times

April 1, 2015 at 9:01pm

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http://blogs.ft.com/the-exchange/2015/03/31/to-save-the-euro-let-greece-go/

To save the euro, let Greece go

DeAnne Julius | Mar 31 05:30 

Another deadline is approaching for Greece and its fate within the eurozone. The tripwire is April 9, when the next loan repayment instalment of €450m is due to the International Monetary Fund. So far, the European Central Bank has been willing to keep Greece afloat through its weekly approval of emergency liquidity assistance, but this is only available to banks that are considered solvent. If Greece defaulted on its IMF debt then the country’s banks could no longer qualify for ECB emergency funding. They would close, the government would have to impose exchange controls and the economy would come to a sudden and painful halt.
There are historical precedents, from Argentina and post-war Greece itself, that indicate how the economy would eventually recover. But it would probably involve a temporary period of high inflation as a new currency was introduced and devalued. This is not the outcome that the Greek people want or that Germany and the other eurozone members want to provoke. However, the alternative carries high long-term risks for the survival of the single currency and little prospect of a sustainable growth path for Greece. It is a classic case of being caught between the Scylla and Charybdis of Greek legend.
On one side, the Greek government of Alexis Tsipras wishes to impose its democratic mandate to escape from the conditions of the bailout agreed between the previous government and the IMF, ECB and the EU. On the other side, Germany and other members of the eurozone fear that relaxation of those terms for Greece would not only undermine any future ECB conditionality, but also weaken the domestic political support for other governments in the single currency that have implemented tough austerity measures that are only now beginning to show positive results. These double-edged economic and political risks of giving in to Greek demands have stiffened the other eurozone members’ resolve.

Greece was embroiled in lengthy talks at the weekend with lenders that are demanding the implementation of reforms before they will unlock about €7.2bn in bailout funds. It is tempting to portray these negotiations as a game of chicken. Each side believes that the other has too much to lose from a breakdown to allow that to happen. But this may be a miscalculation by Greece for three reasons.
First, the eurozone economy outside Greece appears to be recovering, either because of the ECB’s programme of quantitative easing or because of the impact of supply-side measures taken by governments, or both. There is little urgency or appetite for a change of direction. Second, the eurozone governments and banks are better prepared than in the past for a Greek exit from the euro. Banks are better capitalised and Greek debt is a smaller portion of their reserves now than two years ago. Finally, the rise of anti-euro protest parties in Spain, France and even Germany has shifted the debate from dry economics to fiery politics. The willingness of other electorates to foot the bill for the generous retirement benefits and weak tax collection in Greece has worn thin.
This Greek tragedy will not end happily for any of the protagonists. If the past is any guide, negotiations will continue until the last minute and concessions on the Greek side may enable the eurozone leaders to “extend and pretend” one more time. But, if so, this will not be the final act. The unfolding drama has exposed the fundamental weakness of imposing a common currency on such disparate societies without the central mechanisms either to enforce constraints on budget deficits or to trigger large inter-country subsidies. If the eurozone is to prosper under a single currency over the next decades, the Greek threat will have to be removed – not because Germany insists, but through the solidarity and resolve of all remaining members.
The writer is a former member of the Monetary Policy Committee of the Bank of England

The Iran nuclear talks Spinning towards agreement - The Economist

http://www.economist.com/news/briefings/21647610-hard-pounding-lausanne-nuts-and-bolts?fsrc=scn/tw/te/pe/ed/GettingIranAgreement

But there is still work to be done to convince the sceptics

Apr 1st 2015  | From the print edition

TALKs in Lausanne between Iran and six world powers on a ground-breaking deal to constrain its nuclear programme, in return for the staged lifting of sanctions, ran straight through their March 31st deadline; the negotiators decided in the wee hours of April 1st to give themselves another day to haggle. The cause of the over-run was tension between the fuzzy declaration of principles that the Iranians would prefer and the detailed framework agreement that the Americans need to persuade a sceptical Congress to postpone a vote on new sanctions when it returns on April 14th.

The Americans want precise numbers on how many uranium enrichment centrifuges Iran can spin, how much uranium it can hold and how much plutonium can come out of a reactor at Arak. The Iranians want to avoid specifics on nuclear limits at this stage, while securing firm commitments on the lifting of sanctions, particularly those imposed by the UN. On sanctions, the West wants automatic “snap-back” if any serious violation by Iran is detected, which the Iranians reject.

All this makes it unlikely that whatever comes of these negotiations will be seen as historic. If a comprehensive agreement is signed by the end of June it will be regarded as an important milestone passed on the way. But if the process collapses, this accord will have been the high-water mark of a brave effort that met with failure.

The apparent inability to nail down critical details and the number of issues that remained unresolved means that the next round of the negotiations will be even harder than these. The broad aim is to leave Iran free from most sanctions and far enough from the ability to make a nuclear weapon that, if it were to head in that direction, America and its allies would have time to forestall it. This would reduce the incentives for other regional powers, such as Saudi Arabia and Egypt, to move towards the nuclear threshold themselves.

The yardstick is Iran’s “breakout capability”—the time it would take to produce enough weapons-grade uranium for one device. Extending it from a couple of months—the situation today—to at least a year is a sensible, quantifiable goal. Iran had previously indicated it would cut its number of operating centrifuges to about 6,500. Not yet agreed is the amount of low-enriched uranium Iran will be allowed to stockpile—a variable that dictates the number of centrifuges it can keep.

Centrifugal forces

However, the biggest problems which still need to be tackled lie elsewhere. There remains ambiguity about what rights the Iranians will have to continue nuclear research and development. They are working on centrifuges up to 20 times faster than today’s which they want to start deploying when the agreement’s first ten years are up. The worry is that better centrifuges reduce the size of the clandestine enrichment facilities that Iran would need to build if it were intent on escaping the agreement’s strictures.

That leads to the issue on which everything else will eventually hinge. Iran has a long history of lying about its nuclear programme. It only declared its two enrichment facilities, Natanz and Fordow, after Western intelligence agencies found out about them. A highly intrusive inspection and verification regime is thus essential, and it would have to continue long after other elements of an agreement expire. Inspectors from the IAEA would have to be able to inspect any facility, declared or otherwise, civil or military, on demand.

Such powers for the IAEA are a lot more sweeping than those it has under the safeguard agreements that are part of the Nuclear Non-Proliferation Treaty. They go beyond those that the so-called “additional protocol” gives the IAEA, powers that allow it not only to verify that declared nuclear material is not being squirrelled away for military use but also to check for undeclared nuclear material and activities. But in Iran’s case such unprecedented powers are seen as essential.

For a deal to be done in June, Iran will have to consent to such an inspection regime. It will also have to address about a dozen questions posed by the IAEA over the “possible military dimensions” of its nuclear programme. Yet on March 23rd Yukiya Amano, the agency’s director, said that Iran had replied to only one of those questions. Parchin, a military base which the IAEA believes may have been used for testing the high-explosive fuses that are needed to implode, and thus set off, the uranium or plutonium at the core of a bomb, remains out of bounds. Nor has the IAEA been given access to Mohsen Fakhrizadeh, the physicist and Revolutionary Guard officer alleged to be at the heart of the weapons development research. The IAEA’s February 19th report on Iran stated that it “remains concerned about the possible existence—of undisclosed nuclear-related activities—including activities related to the development of a nuclear payload for a missile.”

Iran says that it will sign up to stringent new inspections only when all the main elements of the deal are in place. But its lack of cooperation with the IAEA does not bode well. Even if this week produces a limited success, it would be well to remember the negotiator’s watchword: “Nothing is agreed until everything is agreed.”

7 Ways to Eliminate (Almost) All of Your Pre-Interview Jitters - TIME

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• Lily Zhang / The Muse
 

March 7, 2015

    

Getting an invitation to interview is always exciting—but the second that post-interview invitation glow wears off and the pre-interview jitters sets in, it’s all downhill from there. Your anxiety builds and builds, and by the time the meeting rolls around, you’re just a ball of nerves. It doesn’t help that first impressions are so critical.

To make sure you don’t walk into your next big interview a sweaty and nervous mess, here are a few strategies to try out prior to the big day.

1. Meditate and Breathe

You’ve probably read all about the benefits of meditation. If you haven’t tried it, now (before your interview) would be the time. The good news is, it doesn’t have to be this big serious thing with a floor pillow and Buddha statue. Try this quick and simple two-minute exercise a little bit before walking into the interview to help clear your mind and rid yourself of those clammy hands.

2. Eat a Banana

Musicians do this all the time before a big audition or concert. Supposedly, some combination of tryptophan, potassium, and beta-blockers found naturally in bananas calms shaky nerves. While there’s some debate over how true this is, even the placebo effect of thinking a banana will calm you down helps your body actually relax.

3. Exercise

The benefit of eating bananas before an interview might be disputed, but exercising for a little endorphin rush is pretty well established. Try waking up extra early and hitting the gym, taking a yoga class, or doing a run around the neighborhood to get an extra little burst of natural energy and to clear your head. It might take a little more effort than, say, meditating for two minutes, but it’s worth it if you want to be at the top of your game for the interview.

4. Visualize Success

It’s easy to let your mind run wild with ways you could completely bomb your interview, but you’re not doing yourself any favors by letting it. You’re much better off visualizing yourself charming your interviewer, nailing all the questions, and being offered the job before you even walk out of the door. Your brain favors proving itself right, so go ahead and be generous with yourself.

5. Do a Power Pose

Your uncontrollable mind obviously has a lot to do with getting worked up over an interview, but as it turns out, your body has some control over this, too. According to Amy Cuddy, professor at Harvard Business School, positioning your body in stance of power or powerlessness actually impacts the way you behave. To take advantage of this, do a “power pose” for two minutes (watch the video for samples of poses) prior to your interview. You’ll magically be more calm and charismatic.

6. Smile Like You Mean It

Want to be cheerful on the big day? Force yourself to smile. Can’t do it on your own? Put a pencil between your teeth. Like power poses, smiling tricks your brain—the physical act, even if it’s forced, will prompt you to actually feel happier. It’s a neat little pick-me-up from your brain for when you’re feeling a bit down.

7. Practice

This is all great advice for getting the most out of your brain and body, but in the end nothing will trump practice. The more practice you can get answering interview questions (start with these) aloud, the more confident you’ll be when the real thing happens. End of story. Certainly do follow the tips and tricks—even professional performers do it, after all—but don’t make the mistake of relying on them for the actual meat of your interview. Confidence comes from ignorance or experience. Source yours from the latter.

11 Ways to Generate Valuable Ideas for Your Blog - StartupCollective

http://time.com/3758938/generate-ideas-blog/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• StartupCollective
 

March 26, 2015

    

Question: What’s one way I can generate valuable ideas for my company blog or social media?

Follow the Energy

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“We do not assign content creation, and yet, we create pages every day. It all begins with where the energy flows. We send out a daily email to our staff with inspiring quotes our clients have shared that day. If one resonates with a staff member, they get to claim it and create something around it. I won’t let them write until the fire in the belly is there, so I inspire them.” — Corey Blake, Round Table Companies

“Look at the questions your audience is asking. There are a number of resources that your audience is already using to find out more about services like yours (e.g., Q&A sites, your social media pages, industry-related FAQ pages, etc.). Scanning through these will give you a wealth of information about what topics your potential customers want to know more about.” — Phil Laboon, Eyeflow Internet Marketing

Listen to Your Clients

“Client feedback is a great tool for improving your business. It’s also a great way to keep your finger on the pulse of what matters to your clients, what they are interested in and what they want to know more about. By listening to your clients’ concerns and responding, you can generate a whole host of valuable topics to explore via your company blog or social media.” — David Ehrenberg, Early Growth Financial Services

Survey Your Email List

“If you want to produce valuable content for your audience, surveys can help you discover what information would be valuable to them. For example, we host webinars every month. A couple weeks before the webinar, we survey our email database asking what specific topics people would like us to cover and what questions they have. This helps us provide content that our audience will value.” — Pete Kennedy, Main Street ROI

Find the Best Sources and Disconnect

“Ironically, blogging and social media inspiration doesn’t happen behind a computer, phone, tablet or any other device. Get out there, talk to the smartest people you know in your industry, have face-to-face conversations, create space to think critically (away from your daily routine) and find time to disconnect. Reading is also invaluable — but pick only the best 10 sources.” — Sharam Fouladgar-Mercer, AirPR

Don’t Just Write About Yourself

“All too often, a company’s blog and its social media accounts are devoted to pushing products and services. It’s fine to share successes, but nobody is going to become a regular reader if that’s all you do. It’s good to read widely about the topics you’re interested in, and then re-pot and riff off of these. This approach provides value rather than making readers feel like they’re reading ads.” — Grant Gordon, Solomon Consulting Group

Visit Google Trends

“Google Trends is an amazing tool that allows you to create relevant content. Simply go to Google Trends, look at what the world is talking about and see how your company could potentially contribute to the conversation. Not only will your content be relevant on social media channels, but you may be able to capture search traffic to your site as well.” — Brett Farmiloe, Markitors

Read Trade Publications

“A simple way to stay on top of your industry is to read as many relevant trade publications as possible. Identify industry trends, and relate them to your business and your products. Educate yourself first, then educate and engage your readers.” — Elliot Fabri, EcoCraft Homes

Borrow Ideas From Other Sites

“The great thing about being a small business is that there are a lot of bigger businesses in the world that you can emulate. Look for companies that are doing a great job with their company blogs or social media, and figure out how to replicate those ideas on your own properties. Make sure your search is broad enough to include industries other than your own.” — Brittany Hodak, ZinePak

Use Google

“One of the easiest ways to find new content is to Google around and see what your competitors are writing about. I’m not suggesting you copy their content, but usually what’s relevant to them is relevant to you too — just put your own unique spin on it.” — Emerson Spartz, Spartz

Ask the People Around You

“Look to your friends, mentors and people in your industry, and ask what content they are looking for. Take those ideas to help create great content that people can read and share.” — Amanda L., shatterbox

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

This article was originally published on StartupCollective.

The 10 Commandments of Leadership - TIME

http://time.com/3758898/10-commandments-leadership/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Geoffrey James / Inc.
 

March 26, 2015

    

A group of archeologists digging through ancient corporate archives recently uncovered two mysterious tablets (aka “wall plaques”) engraved with the following laws:

I. Thou shalt remain optimistic.

Since thy employees look to thee for leadership, thou must not let thy worries and concerns cast a black cloud over everyone else, for that way lies certain failure.

II. Thou shalt set a clear direction.

If thou wouldst be a leader, thou must create a vision in the minds of your followers whence and whither thou art leading them. Fail at this, and thy organization will wander into the wilderness.

III. Thou shalt create a workable plan.

While no plan should be engraved in stone and plans should be amended when conditions change, if thou hast failed to plan, then verily thou hast also planned to fail.

IV. Thou shalt secure sufficient resources.

While it is written truly that faith can move mountains, that faith must be accompanied by bulldozers, dump trucks, and paid employees who know how to use them.

V. Thou shalt listen more than talk.

Leadership doth not consist of giving lectures and then issuing orders. Leadership consists of understand what others desire and harnessing that desire to serve the common good.

VI. Thou shalt not hold meetings without agendas.

Before each meeting send out a decree defining what will be discussed and for how long. Then adhere to thy own decree as if the productivity of the entire team depended on it. For verily it doth.

VII. Thou shalt not criticize in public.

Though thy staff and colleagues consist of fools and rogues, public shaming creates resentment. Should a follower deserve a reprimand, provide it in the privacy of thy office.

VIII. Thou shalt not ask an employee to do something that thou wouldst not do thyself.

Truly great leaders, should they perceive a scrap of litter on the floor of a hallway, will bend down, pick it up and throw it into the trash.

IX. Thou shalt not make of thyself a bottleneck.

If thou insist upon making every final decision, the progress of thy organization will grind to a halt. If thou canst not delegate, thou hast no business pretending to be a leader.

X. Thou shalt give thy team the credit.

True leaders accept the blame when things go awry and take no credit when things go right. Thy rightful reward will the love and commitment of those who continue to work for thee.

5 Tips to Increase Clicks and Shares on Your Social Media Posts - TIME

http://time.com/3760112/increase-clicks-shares-social-media/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Minda Zetlin / Inc.
 

March 27, 2015

    

Have you ever tried to unravel the mysteries of what makes a blog post or article go viral, capturing readers’ interest so that they share it again and again across social media platforms?

To explore this question, the content marketing company Fractlteamed up with content analyzer Buzzsumo. They reviewed shares of 1 million articles from 190 top publishers (including this one) across five social media platforms over six months–2.7 billion shares in all. The findings were thought-provoking (check out the full report at the bottom of this post):

1. Different social media have different moods.

It turns out 70 percent of the 500 most-shared items on LinkedIn were positive in sentiment. Similarly, 65 percent of the top shares on Pinterest were positive. That contrasts with Twitter, where only 40 percent of the top 500 shares were positive, 46 percent were negative, and 14 percent were neutral. Google+ was only slightly more upbeat, with 45 percent positive stories, 38 percent negative stories, and 17 percent neutral.

On Facebook, negative stories were much more successful, making up 47 percent of the top 500 most-shared, with 36 percent positive, and 17 percent neutral. Correct for the relatively uplifting effects of Buzzfeed, Upworthy, and ViralNova, and you have an even darker mood: Only 30 percent of the most-shared stories are positive, and 57 percent are negative.

Does this mean that LinkedIn users are happy-go-lucky souls and Facebook users are incorrigible curmudgeons? Not necessarily, the study’s authors warn. “The emotional landscape of each network may be more a reflection of the publishers who are succeeding best at sharing on a particular platform,” they note. Still, it seems likely that matching the emotional mood of your content to the prevailing mood of shares on each platform may help you get more attention and more page views.

2. Surprise and mystery always appeal.

Wondering just what sorts of stories or posts will appeal most to readers? Analyzing the pieces’ headlines only, the researchers discovered what many readers already know: Pieces that make you go “huh!” as in “I didn’t know that,” or “huh?” as in “I want to know more,” are always the most popular. “Headlines that incorporated surprise and built on the reader’s feelings of curiosity dominated the Top 10 regardless of topic or content format,” the study’s authors report.

But if you’re tempted to write clickbait headlines whose stories don’t deliver the goods–don’t. Keep in mind that we’re looking for shares here, and not just fooling people into clicking a headline and then regretting it. You’ll get nowhere unless readers find your content compelling enough to read through and pass on to their friends.

3. No surprise–Facebook dominates shares.

Well, of course it does. With 1.3 billion active users, there are so many more people on Facebook than any other social platform that it can’t help but have many more shares than the others. Still, although Facebook has about 62 percent of the total users of the five social media platforms, it gets about 82 percent of the shares, indicating that users are either more engaged with Facebook, likelier to share content there, or both.

On the other hand, Twitter appears to be punching above its weight. Though the Pew Research Institute recently named it the smallest of the major social networks, Twitter saw four times as many shares as similarly sized LinkedIn.

4. It’s tough to get huge amounts of attention.

Even among top publishers, getting a lot of attention for content can be tough slogging. Ninety-three percent of the publishers in the study averaged fewer than 5,000 shares per article. and only two, BuzzFeed and ViralNova, averaged more than 25,000 each. But those two had impressive share rankings with more than 60,000 shares on average per article.

Why? Probably because they put a lot of thought into the science of garnering shares. This analysis of Buzzfeed and Upworthy by study author Kelsey Libert provides some clues as to what they’re doing right.

5. You can stop feeling guilty.

If you’re like most people (including me) you’re in a constant state of guilt over the many social media platforms you’re ignoring. I, for instance, have a Pinterest account that I never use, even though I’ve written about Pinterest.

I’ve been feeling bad about this, but it turns out there’s no need. Even for large publishers, it’s tough to get significant traction on more than one platform at once. Though the study’s authors set out to name the five best publishers at getting shared on multiple social media platforms at once, there weren’t enough to fill up the roster. My interpretation: It’s fine to limit your attention to one or two platforms.

Many Young Adults Need Parents’ Help to Buy a Home - TIME

http://time.com/3756425/many-young-adults-need-parents-help-to-buy-a-home/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

• Martha C. White
 

March 26, 2015

    

Daniel Acker—Bloomberg /Getty Images

At least they’re out of the basement

Three out of four young adults who recently bought their first home needed their parents’ help to afford the down payment, closing costs or other expenses, a new survey finds.

Interest in homeownership is picking up, especially among first-time buyers, and mortgage lender loanDepot LLC commissioned a survey to find out how today’s millennials — 97% of whom will take out a mortgage to buy their homes — plan to pay for their investment.

It seems the “bank of mom and dad” is a fallback most count on, with 75% of young adults who recently bought a home saying their parents helped them out. Another survey, this one from BMO Harris Bank, finds that about a quarter of first-time homebuyers expect to get money from their parents or other relatives.

Among parents of future would-be homebuyers, 17% of respondents to the loanDepot survey say they expect to have to chip in, up four percentage points from five years ago — a gap that suggests a number of today’s wanna-be homeowners expecting financial assistance probably shouldn’t hold their breath.

There are some indications that, even as young adults expect more assistance from their parents, the older generation has a dwindling amount of resources they can use to help. Over the past five years, just under three-quarters of parents who helped their kids buy homes used their savings, but that number is expected to fall to about two-thirds in the future, according to the survey. Instead, more parents will refinance their own homes, take out personal loans and borrow against their 401(k)s — potentially risking their own financial security.

And parents are digging deeper into their pockets to help out in other ways, too: Almost a third say they’ll pay some of their kids’ other expenses to help the younger generation save money, and 18% plan to help their kids pay down their student loans. Of the parents who are contributing to their kids’ investments, half say they’ll help their kids make the down payment, 20% say they’ll help with closing costs and 20% say they’ll actually co-sign the loan.

This might be reasonable in markets where high down payments are the norm, but experts warn that parental assistance sometimes can mask the fact that the home just isn’t affordable for the aspiring homebuyers. “One of our clients helped the child buy into the same neighborhood they lived in. The parents were excited, but it turned out to be a huge burden for the kids,” Brett Gookin, principal at wealth management firm Aspiriant, told SFGate.com last year. (San Francisco has the second-highest average down payment in the country, just behind New York City.)

The Neurochemistry of Positive Conversations - Harvard Business Review

http://blogs.hbr.org/2014/06/the-neurochemistry-of-positive-conversations/

by Judith E. Glaser and Richard D. Glaser  |   11:00 AM June 12, 2014

• 
  

Why do negative comments and conversations stick with us so much longer than positive ones?

A critique from a boss, a disagreement with a colleague, a fight with a friend – the sting from any of these can make you forget a month’s worth of praise or accord. If you’ve been called lazy, careless, or a disappointment, you’re likely to remember and internalize it. It’s somehow easier to forget, or discount, all the times people have said you’re talented or conscientious or that you make them proud.
Chemistry plays a big role in this phenomenon. When we face criticism, rejection or fear, when we feel marginalized or minimized, our bodies produce higher levels of cortisol, a hormone that shuts down the thinking center of our brains and activates conflict aversion and protection behaviors. We become more reactive and sensitive. We often perceive even greater judgment and negativity than actually exists. And these effects can last for 26 hours or more, imprinting the interaction on our memories and magnifying the impact it has on our future behavior. Cortisol functions like a sustained-release tablet – the more we ruminate about our fear, the longer the impact.
Positive comments and conversations produce a chemical reaction too. They spur the production of oxytocin, a feel-good hormone that elevates our ability to communicate, collaborate and trust others by activating networks in our prefrontal cortex. But oxytocin metabolizes more quickly than cortisol, so its effects are less dramatic and long-lasting.

This “chemistry of conversations” is why it’s so critical for all of us –especially managers – to be more mindful about our interactions. Behaviors that increase cortisol levels reduce what I call “Conversational Intelligence” or “C-IQ,” or a person’s ability to connect and think innovatively, empathetically, creatively and strategically with others. Behaviors that spark oxytocin, by contrast, raise C-IQ.
Over the past 30 years, I’ve helped leaders at companies including Boehringer Ingelheim, Clairol, Donna Karen, Exide Technologies, Burberry, and Coach learn to boost performance with better C-IQ. Recently, my consultancy, The CreatingWE Institute, also partnered with Ryan Smith, CEO ofQualtrics, the world’s largest online survey software company, to analyze the frequency of negative (cortisol-producing) versus positive (oxytocin-producing) interactions in today’s workplaces. We asked managers how often they engaged in several behaviors — some positive, and others negative — on a scale of 0 through 5, in which 0 was “never” and 5 was “always.”

The good news is that managers appear to be using positive, oxytocin and C-IQ elevating behaviors more often than negative behaviors. Survey respondents said that they exhibited all five positive behaviors, such as “showing concern for others” more frequently than all five negative ones, such as “pretending to be listening.” However, most respondents – approximately 85% — also admitted to “sometimes” acting in ways that could derail not only specific interactions but also future relationships. And, unfortunately, when leaders exhibit both types of behaviors it creates dissonance or uncertainty in followers’ brains, spurring cortisol production and reducing CI-Q.
Consider Rob, a senior executive from Verizon. He thought of himself as a “best practices” leader who told people what to do, set clear goals, and challenged his team to produce high quality results. But when one of his direct reports had a minor heart attack, and three others asked HR to move to be transferred off his team, he realized there was a problem.

Observing Rob’s conversational patterns for a few weeks, I saw clearly that the negative (cortisol-producing) behaviors easily outweighed the positive (oxytocin-producing) behaviors. Instead of asking questions to stimulate discussion, showing concern for others, and painting a compelling picture of shared success, his tendency was to tell and sell his ideas, entering most discussions with a fixed opinion, determined to convince others he was right. He was not open to others’ influence; he failed to listen to connect.
When I explained this to Rob, and told him about the chemical impact his behavior was having on his employees, he vowed to change, and it worked. A few weeks later, a member of his team even asked me: “What did you give my boss to drink?”
I’m not suggesting that you can’t ever demand results or deliver difficult feedback. But it’s important to do so in a way that is perceived as inclusive and supportive, thereby limiting cortisol production and hopefully stimulating oxytocin instead. Be mindful of the behaviors that open us up, and those that close us down, in our relationships. Harness the chemistry of conversations.