Taupe: It’s Not Just For The Oval Office Anymore

Whether it’s politics or business one thing remains the same: if you are designated or perceived as the leader, everything you say or do is viewed with an eye searching for obvious and hidden meanings. While at the same time the higher the level or more commanding the position, that search goes from the naked […]

The Ladder


We’ve all got to start somewhere, just don’t delude yourself that because you’ve started you deserve to be successful.

There are a number of routes to take, some of which can be combined.

Skills cannot be emphasized enough. Knowing how to play your instrument, sing or deejay, gives you a floor upon which you can build. But, once again, talented people are a dime a dozen.

Furthermore, creativity is king at this level. What can you do that both sounds professional and sounds different? When you’re starting at the bottom you jump to the top by creating that which can get instant airplay, instant success. Managers and labels are not looking for me-too. They can get that from “Idol” and the “Voice.” They’re looking for unique.


You need a finished product. Best to learn how to make it yourself, whether it be on GarageBand, Pro Tools, Logic or…

Today you’re both the creator and the producer. And so many producers are creators. The roles have merged. Knowing how to work the equipment and get what you want, and experience happy accidents, pays dividends down the road.

Rather than pay a name producer to cut demos, you should do them yourself.

The truth is, no pro the labels are really interested in is gonna do your demo, they’re inundated with offers from true talents/famous people. Rather, you’ll get someone over the hill or who never quite made it. That does not mean they’re not talented, just that working with them won’t give you much of a jump. Every week someone e-mails me that they cut demos with a name, which, unfortunately, I’ve usually never heard of. Yes, there are many who will take your money despite having no real c.v. So what you end up with in most cases is a polished turd.

No one said the music business was easy. In order to move forward on the board you’ve got to capture the zeitgeist, which is damn near impossible.


Don’t talk about money, don’t talk about streaming royalties, just place your music where everybody can hear it. Jason Flom found Lorde’s “Royals” from an online posting. If your music is not available, you’ll never make it. The way the music business works is you get screwed first, sometimes a few times, and then you make the money. I’m not saying to sign a bad deal, I’m just saying if you’re thinking about getting paid from the get-go, you’re on the wrong track.



The road splits, you take one way or the other.

Let’s say you make Top Forty music, the kind you hear on the radio. Then the most important thing is to have the track and an online presence, that’s how labels judge your success. How many followers you have, how many likes, how many YouTube plays. Yes, if you’re going the Top Forty route, you should have a video, which features you, yourself, in all your glory. Either you’ve got to be beautiful or demonstrate charisma or both. That’s what sells today, your looks and personality, it’s key to major companies investing in you.

Or, you don’t make Top Forty music…

Then you’ve got to penetrate deeper into the scene you’re in. Make friends with traction, get them to allow you to open. Sure, you can do it yourself, but it’s much easier with friends. Which is where you truly start, if the people you know and can reach easily are not rabid, no one else will be, don’t delude yourself. The people you know would love to spread the word on you if you’re good. Don’t get caught up in hater/jealousy mind games. If you’ve got no virality, even at the tiny friend level in your own hometown, no one else will care.


You’re building your resume. You’re selling to the tippity-top most level, because to make it in radio you need bucks behind you, and only the major label has these. Oh, you also need relationships. So even if a billionaire will fund you, that’s irrelevant, he can’t get you on the radio.

Keep working it and being innovative, trying to get to the point where the label will find you! Followers are not enough, there must be substance. YouTube stars are a dime a dozen, but all they’ve got is their will to be famous and a willingness to do anything. Everything revolves around your music. If you don’t have a good or unique voice, find another career. Because Top Forty is a massaged medium. They’ll find someone else to write the hits, the only thing they can’t change is you, what you sound like and look like.


Yup, you’re sweating it out on the boards. It’s less about a digital presence/social networking, than finding places to play and building your fan base.

You want to build up your mailing list. Yes, that may sound antique, but it’s the only thing that’s real. You want to be able to reach your people and motivate them, e-mail is the best way.

You can spam everybody else, but no one will care.

You can send tracks to Pitchfork and other sites, but unless they’re one listen smashes, you will get no traction.

You’re building your fan base live and figuring out your act, you’re getting onstage experience, discovering yourself off the grid.


Top Forty

In both Top Forty and road act paradigms, it pays to know someone, because they can gain you access. But they’ll only provide this if they think it’s of benefit, they don’t want to abuse their relationships, everyone’s overwhelmed, no one’s got any time.

So when you’ve got something that’s already ready for Top Forty radio, that might need only a few tweaks, then you press the button and get it to the decision-maker, not a moment before. It’s a business, they want to make money, can you make them some?

So you’re one step away from success, but it’s a huge chasm, most people never cross it. And now, more than ever before, the majors take fewer chances, they want to know you’re gonna succeed, they just don’t want to throw it against the wall. Are you Beyonce, Rihanna? If not, you probably won’t get an investment.

Road Act

Keep building your fan base, and once you get traction sell them something, merch, vinyl, t-shirts…

A road act has to constantly put out new material, their hard core fans demand it. And if you grow bigger, you can get an indie label deal, oftentimes through someone you know who knows…

What the indie will do is get you a little publicity/notoriety. Indies are legendary for disappointing, not doing what they say they will and not paying either. But the more major ones, like Merge, mean something to tastemakers, if you’re on their label, people pay attention. But you must deliver, you don’t get endless chances.


Every great act has one. One can argue that the manager is more important than the act, never mind the label. The manager believes in you and promotes you. It doesn’t matter if the manager is famous if they’re not committed to you. Furthermore, a scrappy young person will pay further dividends, they’re banking their progress/career on you.


Don’t sign anything without one. Especially a management or label deal. And not just any attorney, one who specializes in music. There are a ton in New York and L.A. without famous names who want to rise with you. Do your research. If you’re unsure about signing a deal with a manager or label, don’t. They can always find another act, your career might be hamstrung forever.


With a Top Forty act it means you’re on the radio. Congratulations, you’ve made it.

With a road act it means you can sell a thousand tickets all by your lonesome, almost anywhere.

But neither of the above mean you will sustain, that you will get rich, they’re really just a start. Now the truly hard work begins. Going from someone some people have heard of to someone everybody has heard of. It’s hard work and it cannot be done alone. Align yourself with the best team and good luck.


You’re making a living, you’ve not only given up your day job, you’re being inundated with offers, everybody wants to be in business with you.

If you don’t think you’ve got shelf life, if you want to go to graduate school, sign everything, take all the bucks.

If you want to last, pick very carefully. Everything’s got a cost. Your one asset is your fan base, don’t do anything to alienate those who believe in you and sustain you.


It’s not that complicated, but it depends on the music, creativity and hard work.

The music is the question mark. Good is no longer good enough. Your tunes have to resonate, people must be clamoring to hear them again, your inbox must be blowing up or you’re not there yet.

And you’ve got no idea of the amount of work involved. As Shep Gordon so famously said, if the manager does his job right, it’ll probably kill you!


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Restaurant Performance Index declined in July

From the National Restaurant Association: Restaurant Performance Index Dipped in July
Due in part to a dampened outlook among restaurant operators, the National Restaurant Association’s Restaurant Performance Index (RPI) registered a modest decline in July. The RPI – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 101.0 in July, down from a level of 101.3 in June and the second consecutive monthly decline. Despite the recent downticks, the RPI remained above 100 for the 17th consecutive month, which signifies expansion in the index of key industry indicators.

“Although restaurant operators reported positive same-store sales and customer traffic results in July, the RPI edged down as a result of a mixed outlook for the months ahead,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators were less bullish about the direction of the overall economy, and rising wholesale food costs are once again starting to pose a significant challenge.”
emphasis added
Restaurant Performance Index Click on graph for larger image.

The index decreased to 101.0 in July, down from 101.3 in June. (above 100 indicates expansion).

Restaurant spending is discretionary, so even though this is "D-list" data, I like to check it every month.  Even with the recent declines in the index, this is still a decent level.

Eurozone Currency Dispute Intensifies: France Wants More ECB Action to Correct Overvalued Euro, Germany Doesn’t

The currency and fiscal battleground front lines in Europe remains the same. France wants QE, fiscal stimulus, and more leeway on meeting fiscal deficit targets. Germany doesn't. And the fighting has strengthened.

The idea that ECB can produce nirvana by devaluing the euro is ridiculous. Yet, that's the battle cry of the day.

Bloomberg reports France Asks for More Action From ECB to Correct Overvalued Euro.
French Prime Minister Manuel Valls called for more action from the European Central Bank to lower the value of the euro, amid concerns the 18-nation region might be headed toward deflation.

“The monetary policy has started to change,” Valls said today in a speech made at the Socialist Party’s summer school in La Rochelle, France. While he called the ECB’s package of measures taken in June a “strong signal,” he also said that “one will have to go even further.”

Valls’s comments come after ECB President Mario Draghi, who’ll meet French President Francois Hollande tomorrow in Paris, signaled that declining inflation expectations are pushing the central bank toward introducing quantitative easing. Policy makers will gather in Frankfurt on Sept. 4 for their monetary-policy meeting.  

Inflation in the currency bloc slowed to 0.3 percent in August from a year earlier, the lowest since 2009, compared with an ECB target for price growth of just under 2 percent. Draghi has said that the ECB stands ready to embark on unconventional measures such as broad-based asset purchases to avoid a deflationary spiral of falling prices and households postponing their spending plans.  

In his speech, Draghi also called for complementary action on a European level and “a large public investment program.” German Chancellor Angela Merkel was disgruntled with the comments and called Draghi to ask if the ECB had changed course on austerity, Der Spiegel reported, without saying where it got the information.

The magazine’s assertion that Merkel “demanded answers” from Draghi “in no way corresponds to the facts,” Merkel spokesman Steffen Seibert said in a text message.
Inflation Won't Cure France

Contrary to popular belief, inflation will not spur consumer spending. Nor will inflation create any jobs or cause wage inflation.

Nonetheless, France demands the ECB wizards fix something that cannot be fixed by monetary policy.

Problem number one is the eurozone itself. The euro is fatally flawed. In addition, France's problem is that it is not competitive with Germany and arguably even Spain, not that the Euro is too high.

France desperately needs structural reforms.

  • It is nearly impossible to fire someone in France, so businesses are reluctant to hire. 
  • Government and union rules on everything are sheer madness.  
  • France seeks to save local bookstores by taxing online retailers and elimination of free shipping. 
  • Agricultural subsidies to save inefficient French farms (at great expense to the rest of Europe) are inane. 
  • Pension rules need fixes, and the retirement age needs to increase.
  • The "French way of life" is incompatible with rising productivity, especially on a relative basis, so France is increasingly left behind.

How is QE supposed to fix all that? It can't and it won't, but it increasingly looks as if the ECB may give it a try.

Mike "Mish" Shedlock

More Of The Same

The only interesting trade of interest is it looks like oil has a trade able move.  But I would not get too excited about it, or other commodities as Draghi may finally get the monetization action in the Euro zone out in the open, and that will further strengthen the dollar.  Besides, there is simply no way Obama is going to let oil prices rise into an election cycle.

The broad markets look like they are going to continue to rise, probably going into mid September, gold, silver, and the miners are uninteresting, and probably a good short if they start rolling down, and my view is volatility will squeeze down until we get closer to the Fed meeting in September.

I tried a video instead of posting charts.  If you like it I'll do more of them.  It is pretty quick and zippy.

Enjoy.  WWW.realtimetradingsignals.com  if you want real time buy and sell signals.


What Savings Glut?

Joe Stiglitz in a review of Martin Wolf's new book "The Shifts and the Shocks":

... If I have a point of difference with Wolf’s analysis, it is that he ... is insufficiently critical of the “savings glut” hypothesis advanced by former Federal Reserve chairman Ben Bernanke, among others, which presents what used to be a virtue (savings) as a vice, shifting blame to China and (less vocally) to Germany. Yet the investment needs of today are staggering: for infrastructure in the developing world, let alone in the US; for retrofitting the global economy to cope with global warming; even for small and medium-sized enterprises starved of capital in much of the world. This should make it obvious that the problem is not an excess of savings but a financial system that is more fixated on speculation than on fulfilling its societal role of intermediation ... in which scarce savings are allocated to the investments of highest social returns.

The problem goes beyond a "financial system that is more fixated on speculation":

It is striking how much Wolf, like so many advocates of financial reform, focuses on protecting us against the banks: making sure that they don’t engage in excessive risk-taking... Wolf doesn’t dwell much on some of the more antisocial aspects evidenced in the aftermath of the crisis: the market manipulation (as in the Libor and forex scandals), the anti-competitive practices, the predatory and discriminatory lending, the lack of transparency, the fraudulent behavior. Presumably, this is because he believes, or hopes, that even too-big-to-fail and too-big-to-jail banks won’t be politically powerful enough to continue such behavior unimpaired. But he says too little about what might be done to make banks actually fulfill the societal role that they should be playing. ...

‚Where Danger Lurks‘

Olivier Blanchard (a much shortened version of his arguments, the entire piece is worth reading):

Where Danger Lurks: Until the 2008 global financial crisis, mainstream U.S. macroeconomics had taken an increasingly benign view of economic fluctuations in output and employment. The crisis has made it clear that this view was wrong and that there is a need for a deep reassessment. ...
That small shocks could sometimes have large effects and, as a result, that things could turn really bad, was not completely ignored by economists. But such an outcome was thought to be a thing of the past that would not happen again, or at least not in advanced economies thanks to their sound economic policies. ... We all knew that there were “dark corners”—situations in which the economy could badly malfunction. But we thought we were far away from those corners, and could for the most part ignore them. ...
The main lesson of the crisis is that we were much closer to those dark corners than we thought—and the corners were even darker than we had thought too. ...
How should we modify our benchmark models—the so-called dynamic stochastic general equilibrium (DSGE) models...? The easy and uncontroversial part of the answer is that the DSGE models should be expanded to better recognize the role of the financial system—and this is happening. But should these models be able to describe how the economy behaves in the dark corners?
Let me offer a pragmatic answer. If macroeconomic policy and financial regulation are set in such a way as to maintain a healthy distance from dark corners, then our models that portray normal times may still be largely appropriate. Another class of economic models, aimed at measuring systemic risk, can be used to give warning signals that we are getting too close to dark corners, and that steps must be taken to reduce risk and increase distance. Trying to create a model that integrates normal times and systemic risks may be beyond the profession’s conceptual and technical reach at this stage.
The crisis has been immensely painful. But one of its silver linings has been to jolt macroeconomics and macroeconomic policy. The main policy lesson is a simple one: Stay away from dark corners.

That may be the best we can do for now (have separate models for normal times and "dark corners"), but an integrated model would be preferable. An integrated model would, for example, be better for conducting "policy and financial regulation ... to maintain a healthy distance from dark corners," and our aspirations ought to include models that can explain both normal and abnormal times. That may mean moving beyond the DSGE class of models, or perhaps the technical reach of DSGE models can be extended to incorporate the kinds of problems that can lead to Great Recessions, but we shouldn't be satisfied with models of normal times that cannot explain and anticipate major economic problems.

Morning Must-Read: Free Exchange: Germany’s Hyperinflation-Phobia

Free Exchange: Germany's Hyperinflation-Phobia: "John Maynard Keynes, as early as 1919...

...recognised the threat inflation posed to modern capitalist societies:

Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency… [he] was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

The German public, it seems, is particularly fearful of letting inflation getting out of control. This is, in part, due to the legacy of the German hyperinflation of 1922-3.... Present discomfort within Germany with policies designed to reflate the euro-zone economy has been stoked by the assertion of a linkage between hyperinflation and the rise to power of the Nazis.... Yet academics paint a very different picture... than the story... in the German press. The Nazi party did not become a popular political force until long after the hyperinflation period ended. The Nazis only won 32 Reichstag seats in the election of May 1924, and just 12 in 1928. As Paul Krugman has pointed out, 'the 1923 hyperinflation didn’t bring Hitler to power; it was the Brüning deflation' of the early-1930s....

The hyperinflation of 1923 created winners and losers among the middle classes.... Middle-class votes subsequently splintered between several different parties.... Yet virtually all classes lost out when Brüning’s government reacted to a projected fiscal deficit and gold outflows in 1930 with deflationary policies.... The experience of deflation made Hitler’s promises to conquer unemployment and stabilise prices by any means necessary attractive to a wide range of groups.... Deflation is now a greater risk than inflation in Europe.... A selective memory of the past may prove worse than no memory at all....

[See:] T. Balderston (2002): Economics and Politics in the Weimar Republic... A. Fergusson (1975): When Money Dies: The Nightmare of the Weimar Hyper-Inflation... J. M. Keynes (1919): The Economic Consequences of the Peace... A. Tooze (2006): *The Wages of Destruction: The Making and Breaking of the Nazi Economy... F. Taylor, (2013): The Downfall of Money: Germany’s Hyperinflation and the Destruction of the Middle Class"

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