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Last week, I had the pleasure of attending the NARM presentation), and had adjusted his presentation to be a response of sorts to mine. Except it wasn’t. His presentation was yet another great example of a musician who understood exactly what works in the industry, even as he thought he disagreed with me. We later chatted briefly about it, and realized we’re actually very much in agreement about where we stand on the industry. The confusion came about because he is really focused on the music, and felt that my presentation focused too much on the money aspect.

And, indeed, my presentation did focus somewhat on how to make money, but that’s because if I just focus on the music, people complain that no one will make money and then no one will make music. But, of course, that’s ridiculous. None of these models work particularly well if you don’t make great music. And Òlafur Arnalds makes great music — and once we started talking, even he admitted that in order to do what he does, he needs (and wants) to make a living (which he does). And his actual presentation was about how to do just that. It was all about how he closely connected with his fans and gave them a reason to buy (even if he didn’t like to think that way). Instead, he noted that he needed to come up with a good story to go with the music, that would help attract his fans, better connect them to him while also giving them a reason to support him monetarily.

So, with that idea (having a story behind the music) as his basis, he came up with a great project called ‘Found Songs’, where he would write, record and release a new song every single day for seven straight days. He did it all out of his bedroom. His fans then stepped up and created artwork for each song, and in some cases, amazing videos, such as this one below, which is truly beautiful, and within days had thousands upon thousands of views:

You can watch the videos, look at the artwork people created for the songs and even download all the songs for free as mp3s. But, there’s also a store where you can buy the beautifully packaged vinyl or CD versions of the album, and some higher quality digital downloads. In other words, it was yet another perfect example of connecting with fans and giving them a reason to buy (and, yes, it involved great music as well — which is, in fact, key). The importance of having a good story to go along with things, as we’ve seen with other projects, is a particularly good point. And, again, it shows how an infinite good (a good story) can increase the value of a scarce good (the products you’re selling). He also showed how his own fanbase increased massively after doing this project — much more so than when he was out opening for Sigur Rós. So, in the end, we absolutely agreed, and I found out about some more great music and yet another great story and example to go along with all the others.

Beyond that, I met a bunch of fascinating people doing very interesting and unique things in the music industry in the Nordic region. All of the Nordic countries are working hard to help enable their bands to adapt to a changing music environment, and there are definitely some very creative indie labels, artists and managers who are thinking through and implementing some great ideas that left me quite enthusiastic for what comes next. I also got a chance to meet Moto Boy, who took part in our CwF+RtB experiment, and see him perform live (which was fantastic). Overall, a very encouraging trip.

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When using traditional sweet potato casserole recipes, with their sugar, butter, eggs, nuts, and toasted marshmallow topping, Thanksgiving cooks across the U.S. will be cooking up the most fattening and unhealthy side dish on the Thanksgiving Day buffet. There are healthier sweet potato recipes, however, that can turn the traditional Thanksgiving tuber into a […]

The book reviewed here is ‘Socialnomics’ by Erik Qualman and narrated by Nick Sullivan. I was interested in listening to this audiobook in order to gain insights into wider cultural changes driven by social media technology. Such cultural changes are closely intertwined with illness in numerous ways and whilst illness is not the subject of the book I expected that the material would be indirectly relevant. Sullivan gives a solid performance as the narrator, using subtle changes in intonation at time to highlight the more important material. Turning to Qualman’s work itself, I found that this covered a variety of social media technologies such as YouTube, Google and Facebook. He looks at how social media transformed politics with the example of Barack Obama’s political campaign in the run-up to his election as president. Qualman also addresses the business sector illustrating how social media will affect their relationship with customers. I was puzzled by Qualman’s use of the term ’schizophrenic behaviour’ when referring to behaviour that changed from one situation to another. I thought perhaps what Qualman was referring to here was persona, the promotion of a behaviour appropriate to the social context and indeed a little after the initial reference he indeed refers to persona. He even recognises the serious nature of schizophrenia and emphasises this when using the term although. Apart from this Qualman covers a broad range of material, suggesting future trends in places and speculating on potentially successful strategies for companies. There are a number of stories that feature throughout the work that serve as exemplars of the phenomenon that Qualman is describing. One of the themes that emerged within the book was that social media is accessed by people of all ages. Qualman also discussed how social media is influencing the relationship between employers and employees. On a broader note, I thought many of the points could be generalised to the relationship between organisations of varying sizes and individuals both inside and outside of these organisations. Thus a number of the arguments could be applicable to non-business organisations e.g. government and non-government organisations. These in turn would have some relevance to healthcare delivery on a number of levels. I found Qualman’s book to be informative and helpful in providing an overview of the influence that social media is having on wider society.

References

Erik Qualman. Socialnomics. Narrated by Nick Sullivan. Audible inc. 2009.

Twitter

You can follow ‘The Amazing World of Psychiatry’ Twitter by clicking on this link

Podcast

You can listen to this post on Odiogo by clicking on this link (there may be a small delay between publishing of the blog article and the availability of the podcast).

TAWOP Channel

You can follow the TAWOP Channel on YouTube by clicking on this link

Responses

If you have any comments, you can leave them below or alternatively e-mail [email protected]

Disclaimer

The comments made here represent the opinions of the author and do not represent the profession or any body/organisation. The comments made here are not meant as a source of medical advice and those seeking medical advice are advised to consult with their own doctor. The author is not responsible for the contents of any external sites that are linked to in this blog.

Briefing note: 19 November 2009
Impact of genetically engineered crops on pesticide use: US Organic Center report evaluation by PG Economics

PG Economics welcomes the Organic Center (OC) latest release Impacts of genetically engineered crops on pesticide use: the first thirteen years by Charles Benbrook, which confirms the positive impact biotech crops have had on reducing insecticide use and associated environmental impacts. However, the OC’s assessment of the impact of biotech herbicide tolerant traits (HT) is disappointingly inaccurate, misleading and fails to acknowledge several of the benefits US farmers and citizens have derived from use of the technology.

For those reviewing the issues examined in the OC report, the following should be noted:

• Confirmation: of biotech insect resistant (IR) impact on insecticide use: the OC paper confirms the findings of other work that the use of IR technology has resulted in important reductions in
insecticide use on these crops that would otherwise have been used with conventional
technology;

• Failure to acknowledge the environmental benefits arising from use of HT technology. These include facilitation of no/reduced tillage production systems [2] which has resulted in important reductions in greenhouse gas emissions. For example, US HT biotech crops contributed, in
2007, to the equivalent of removing 9.48 billion pounds (4.3 billion kg) of carbon dioxide from
the atmosphere or equal to removing nearly 1.9 million cars from the road for one year. In
addition, whilst usage of broad spectrum herbicides, notably glyphosate (and to a lesser
extent glufosinate) has increased significantly, usage of less environmentally benign products
such as pendimethalin, metribuzin, fluazifop and metalochlor has fallen substantially, leading to net benefits to the environment [3];

• Inaccuracies: It uses assumptions relating to herbicide use on biotech crops in the US that do
not concur with actual practice. As a result, it overstates herbicide use on US biotech crops
significantly. For example, it overstates herbicide use on the HT crops of corn, cotton and
soybeans for the period between 1998 and 2008 by 63.4 million pounds (28.75 million kg) of
active ingredient;

• Misleading use of official data: The OC report states many times that the pesticide impact data
is based on official, government (USDA NASS) pesticide usage data. Whilst this dataset is
used, its limitations (namely not covering pesticide use on some of the most recent years and
not providing disaggregated breakdowns of use between conventional and biotech crops)
mean that the author’s analysis relied on own-estimates of usage and cannot reasonably claim
to be based on official sources. As a result, the herbicide usage assumptions on conventional
crops, if they replaced biotech HT traited crops, are significantly understated and unreliable.
Combined with the overstated use assumptions on HT biotech crops, it is therefore not surprising that the document concluded that biotech crops lead to an increase in US herbicide use. This contrasts sharply with the findings of PG Economics’ peer reviewed analysis [4] that estimated that biotech crop adoption in the US has reduced pesticide spraying in the US, eg, by 357 million lbs (162 million kg: -7.1% 1996-2007) relative to what might reasonably be expected if the crops were all planted to conventional varieties;

• Weak approach: the approach of the OC report author is based on personal assumptions of
herbicide use for biotech versus conventional crops and extrapolation of average trends in
total crop active ingredient use (from an incomplete dataset). It also does not present any
information about typical weed control regimes that might be expected in conventional
systems. Not surprisingly, this resulted in significant over estimation of herbicide use on
biotech HT crops (see above) and under estimation of usage on conventional alternatives. As
such, the approach delivers unreliable and unrepresentative outcomes. It is noted that the
OC author is critical of the approach used by other analysts5 to estimate the herbicide usage
regimes that might reasonably be expected on conventional crops if biotech HT traits were
not used in the US corn, cotton and soybean crops over the last thirteen years. The NCFAP/PG Economics approach, criticized by the OC report, is to present and estimate the conventional alternatives based on a survey of opinion from over 50 extension advisors in almost all states growing these three crops. Observers should note the key differences between the two approaches with the NCFAP & PG Economics approach being much more
reliable and representative.

Given the complexities of agricultural production systems and the nature of weed and pest control
systems, more detailed comment and critique of the OCS report is detailed below.(see linked PG Economics site for details).

For additional information: contact Graham Brookes, PG Economics on 00 44 1531 650123 or
[email protected]

PG Economics Home page

Some earlier GMO Pundit posts on Dr Benbrook:

Commentary on Charles Benbrook’s anti-GM tour heats up

US Big picture at variance with Benbrook comments

Most major racing disciplines around the world have a clear and comprehensive framework to allow aspiring drivers to learn the ropes. Pretty much everyone starts in karting, but from there F1 hopefuls go on to Formula Renault and other open-wheeled series; NASCAR aspirants to ARCA and the Nationwide Series; rally prodigees to local championships; and so on and so forth. But teams fielding Le Mans prototypes had to recruit from other disciplines. That is, until now.

Earlier this year, the Automobile Club de l’Ouest – the organization behind Le Mans and its associated series – launched Formula Le Mans, known in America as the Le Mans Prototype Challenge. The idea was simple: everybody driving the same cars, designed on the same model as LMP1 and LMP2 racers, in support races to existing LMS events. French racing team (and, since acquiring Courage Competition, chassis constructor) Oreca was contracted to design and build the cars and help organize the series.

The purpose-built chassis known as the FLM09 packs a Chevy LS3 tuned to 430 horsepower with Magneti Marelli engine management, driving an Xtrac six-speed sequential gearbox to Michelin slicks housing Brembo carbon-ceramic brakes. Eight teams participated in the inaugural season this year, fielding some 50 drivers at races at Spa-Francorchamps, La Sarthe, Algarve, the Nurburgring, Silverstone and Magny-Cours.

The opening season was a success, prompting ACO and Oreca to launch a winter series, currently under way. But for next year’s series, Formula Le Mans will be fully integrated into the Le Mans Series as another category, much as they’ve been run in the American Le Mans Series since their inception. In order to separate the FLM cars from the higher-level LMP2 and keep them running for the full race distance, however, the Oreca FLM09s be equipped with restrictor plates. The integration of FLM into the full series ought to make for some interesting racing and a more hands-on training ground for aspiring drivers when they join the grid next year, but for now you can read the full press release after the jump and browse the mega gallery by hitting the thumbnails below.

[Source: Formula Le Mans]

Continue reading Formula Le Mans joins the big boys in the Le Mans Series

Formula Le Mans joins the big boys in the Le Mans Series originally appeared on Autoblog on Thu, 19 Nov 2009 18:27:00 EST. Please see our terms for use of feeds.

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Filed under: Sedan, Etc., Audi

Audi’s centennial celebration is winding down, but the German brand isn’t quite ready to switch off the lights. There’s at least one more big model debut planned for its 100th anniversary, and in just over a week Audi will pull the sheets off the all-new 2011 Audi A8. Although the uber-sedan will take the stage at the LA Auto Show in two weeks, the world will get its first official look on the opposite coast at Design Miami.

Audi has erected a special temporary art museum for the design show, providing a backdrop for the unveiling of the brand’s new flagship. According to Audi, the sedan will be surrounded by an exhibit from the Rubell Family collection called “Beg Borrow and Steal.” There will also be an installation called the “Light Light” made of LEDs and aluminum — a fitting tribute to the new A8’s aluminum structure and LED lighting. So far, all we have is images of the Audi pavilion and a few teasers of the sedan, so stay tuned for more next week.

Continue reading 2011 Audi A8 to debut November 30th at Design Miami

2011 Audi A8 to debut November 30th at Design Miami originally appeared on Autoblog on Thu, 19 Nov 2009 17:59:00 EST. Please see our terms for use of feeds.

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 Canadian Dollars – The US in Real Terms – … In Canadian-dollar terms, US GDP is the lowest it has been since the first quarter of 1998. While significant inflation has yet to show  up in US CPI numbers, it is apparent that the US ‘growth’ of the past decade was largely a money-illusion. ... – Plan B Economics

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Welcome to the 2009 Worldwide Bull Market Rally – Mark Perry’s Carpe Diem Blog

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Charts: Betting Your Dollar’s Bottoming – by RANDALL W. FORSYTH – … Veteran technical analyst Martin Pring sees signs the Dollar Index may be on the verge of a rebound. In his weekly note to subscribers, Pring says the dollar has the potential to rally as it is “challenging” its downward sloping trend line while its rate of change is turning positive. At the same time, however, there also is a potential for the Dollar Index to break down as it has been moving in an ever-narrowing channel.  “The battle lines then, are at 77 on the upside and 74.4 on the downside,” Pring writes.  … – Barron’s

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Investors strategize for Fed’s exit from MBS market – By Julie Haviv and Daniel Bases –  Investors who reaped robust gains in U.S. mortgage-backed securities by piggy-backing on the Federal Reserve’s $1.25 trillion buying program are bracing for the end to the central bank’s support — and positioning themselves for a new round of profits as prices cheapen – Reuters

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2 interviews – Danielle Park Provides More Sense on Cents – we hare half way thorugh a aseclar bear market says Danielle – good thoughts on risk – Larry Doyle – Sense on Cents

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Carry Trade and market rallies – The Fed’s airheaded bubble orthodoxy – By Steven Pearlstein – … For many investors, in fact, the cost of money is effectively less than zero, as economist Nouriel Roubini likes to point out. If you borrow dollars at near zero percent interest in the United States, exchange the dollars for Thai bhat, and invest the bhat in government bonds paying 4 or 5 percent, you not only get the benefit of the interest rate arbitrage but you also gain when you sell the bond and exchange the bhat back into dollars that have since depreciated. Roubini calls it “the mother of all carry trades,” … – Washington Post

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How US investors can play the carry trade – Felix Salmon – has a list – When I wrote my blog entry on currency ETCs yesterday, I wasn’t aware of the various carry-trade products available on US exchanges. But after a very informative conversation with Morningstar’s Bradley Kay this morning, I’m now much more up to speed. And while there’s nothing in the US quite like the UK products, there are still a fair few carry-trade vehicles to choose from. – Reuters Blogs

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Picture du Jour: Plunging dollar erodes non-US investors’ returns – Posted by Prieur du Plessis – … The graph below shows the performance of US 10-year Treasury Notes since the beginning of March in both US dollar terms (red line) and euro terms (blue line). Whereas US investors are showing a poor return of -2.8% for the period, European investors are completely under water to the tune of -17.5%.  … – Investment Postcards from Cape Town 

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New York Fed Bringing Mortgage Bond Purchasing In-House, Halves External Managers – Submitted by Tyler Durden  – … has chosen to throw sand in the eyes of all those who claim its days of secrecy must end, and has decided to beginning purchasing the QE allocated portion of MBS/Agency bonds directly from the market using in-house personnel, and bypassing external managers. This way, most information leakage will be prevented, the Fed can buy (never sell) however many MBS it wants while disclosing whatever (if anything) it chooses, with nobody being the wiser, and 30 year mortgage rates continuing their inexorable creep to zero percent. – Zero Hedge

Filed under: Sedan, Rolls-Royce, Electric

Adding fuel to the rumormill fire, Autocar reports that a pure electric version of the Rolls-Royce Phantom could hit the streets within 12 months. Rolls’ parent company, BMW, has been getting heavily involved in EVs and the Phantom would be an obvious choice to launch its new drivetrain considering the price premium already tacked onto the brand’s offerings.

Since Phantom owners tend to be driven rather than drive and rarely use their luxo-barges for long road trips (that’s what the jet is for), the decision to offer an EV Phantom makes sense on many levels. Given the size and mass of the Phantom, the bulk of the batteries wouldn’t affect performance or comfort, and cost… well, that’s not an issue when you’re dealing with $300,000+ vehicles. In spite of that, Rolls-Royce may end up only leasing the initial batch of electric Phantoms in small numbers just as BMW has done with the MINI E.

[Source: Autocar]

REPORT: Electric Rolls-Royce Phantom could arrive within a year originally appeared on Autoblog on Thu, 19 Nov 2009 17:33:00 EST. Please see our terms for use of feeds.

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Description: The student will be in charge of writing 5-15 stories a month, varying in length, on nonprofit and community issues facing the Greater Richmond Area and, from time to time, state/national news.

Students will be expected to generate story ideas on a regular basis but will also be handed story leads from ConnectNetwork and ConnectRichmond staff. Stories may also develop from community events, symposiums and forums occurring in the region, at which the student will be expected to attend and report out.

Stories will be published weekly on the ConnectRichmond Web site and additional venues as fit. Additional responsibilities might also include day-to-day work with the ConnectNetwork and ConnectRichmond staff. Total work hours will be approximately 10 – 15 hours per week. (This is an unpaid internship.)

Qualifications: Students must have excellent writing, editing and verbal skills as well as a high degree of professionalism. They must be self-starters, willing to take initiative to chase down interviewees and facts with persistency.

Work will be structured by deadlines, so timeliness and ability to work independently is crucial. Students with a genuine interest and knowledge of Richmond’s community news and happenings will be strongly preferred.

ConnectRichmond is a nonprofit organization located on VCU’s Monroe Park campus — at 809 Cathedral Place. Interested candidates should e-mail their cover letter, resume and three writing or multimedia samples to Ryan Smartt, director of ConnectRichmond, at [email protected].

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More about ConnectRichmond

ConnectRichmond is designed for citizens who want to strengthen our community. We provide information, resources and instant access to nonprofits, civic leaders, volunteers and others interested in improving metro Richmond. Find out more at www.connectrichmond.org.

Every so often, internet pontificators try to come up with ways to “kill Google.” It’s a silly game, but in an oddly timed move, three people (who have all put forth “how to kill Google” ideas in the past) all suddenly published similar ideas, yet again. Jason Calacanis, Mark Cuban and Tom Foremski all posted similar ideas about how certain sites (such as the top sites in the top search results) could all choose to opt-out of Google and, say, join another search engine like Bing. It’s one of those ideas that sounds good for about 5 seconds. And then you actually think about it. First, the numbers being tossed around concerning how much it would cost, say, Microsoft, to convince most of these sites to opt-out of their number one driver of traffic is significantly higher than what’s being mentioned in these articles. Many of these sites rely on Google traffic to make a ton of money, and they’re not going to throw that away easily. At least in Calacanis’ plan he suggests Microsoft offer “50% more than they make in Google referrals” which certainly beats Cuban’s idea that many sites would opt-out of Google for $1,000.

Here’s the thing, though. Most of those sites worked hard to get to the top of Google for a very good reason: they understand the value of being easily findable. As such, they also recognize that it makes little sense to make themselves less findable at almost any price. Getting anyone to opt-out first (other than suicidal sites like Rupert Murdoch’s News Corp.) is going to be nearly impossible. Who would want to risk that? Because the instant they opt-out, someone else would take their place. Quickly. And decisively.

There’s value in being found these days, and to be found you need to be easily findable from anywhere if someone’s looking for you. Not only would traffic decrease, but so would basic reputation. Even if Microsoft pays you a ton to drop out of Google, people are going to search for your business in Google and when they can’t find it, they’re not going to care how much Microsoft paid, they’re going to think you’re a small-time nobody. The best strategy these days, as most web site operators know, is to be as widely available as possible. Opt-ing out of Google because someone pays you some money is a lot more costly than just the lack of traffic.

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If there was ever a contest for blurriest photos taken post-haste, this image of a Motorola CLIQ look-alike, rumored to be called Motus, takes the cake. There isn’t much to be said or gathered about the Motus so far, except that it looks like a CLIQ with a flat keyboard and no D-pad for navigation. Said to be coming out in Q1 2010, rumors also peg this device as packing Android 1.6 and a 5 megapixel camera, so it’s not as if anything terribly special is going on. Unfortunately, the image is far too blurry to really make out the left side of the keyboard and what the bright yellow spot is. Maybe image stabilization should be standard on camera phones now.

Thanks, Vitala!

Read

Traditionally, the natural sciences have been divided into two branches: the biological and the physical sciences. Today, an increasing number of scientists are addressing problems lying at the intersection of the two. These problems are most often biological in nature, but examination through the lens of the physical sciences can yield exciting results and opportunities. For example, one area producing effective cross-research opportunities centers on the dynamics of systems. Equilibrium, multistability and stochastic behavior–concepts familiar to physicists and chemists–are useful in tackling issues for living systems such as adaptation, feedback and emergent behavior.

Research at the Intersection of the Physical and Life Sciences discusses how some of the mysteries of the biological world have been solved using tools and techniques developed in the physical sciences. It presents five major challenges that must be addressed before further research at this intersection can be conducted effectively. This additional research will advance our understanding of fundamental questions of science, as well as significantly impact public health, technology and stewardship of the environment.

Research at the Intersection of the Physical and Life Sciences recommends several ways to accelerate progress in the field. Many of these recommendations are directed towards those administering the faculties and resources of our great research institutions, making this book an excellent resources for academic and research institutions, scientists, universities, and federal and private funding agencies.

Filed under: Motorsports, Coupe, Performance, BMW, Motorcycle

Valentino Rossi drives the BMW M3 GTS – Click above for high-res image gallery

After securing his record ninth MotoGP title, there’s little doubt that Valentino Rossi is the fastest man on two wheels. And BMW has acknowledged the Italian rider’s speed by awarding him a brand-spankin’-new M3 sedan.

The German automaker is a sponsor of the motorbike racing series, providing organizers with safety cars and other vehicles, and even using it to debut the new X6 M crossover earlier this year. And every year BMW gifts a car to the rider who proved the fastest in qualifying over the course of the season. Rossi’s won the “M Award” five times now, but before he drove off in his new V8 sports sedan, BMW gave him a rare opportunity to sample the new hardcore M3 GTS.

So what did the fastest man on two wheels think of the fastest Bimmer on four? Quite a lot, apparently, as the multiple world champion said he wants to be first on the list when the M3 GTS goes on sale next year. That’s quite a glowing endorsement, and all it cost them was a test drive. Click on the thumbnails below for a high-res image gallery.

[Source: BMW M Division]

Valentino Rossi samples the BMW M3 GTS, drives away in M3 sedan originally appeared on Autoblog on Thu, 19 Nov 2009 16:55:00 EST. Please see our terms for use of feeds.

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Not many major retailers would take their online store offline for more than a day to conduct planned maintenance. That’s what Burlington Coat Factory did this week, allowing its main web site to go dark for nearly 36 hours as the company performed a major software and hardware refresh, which included an upgrade to an Oracle app server, according to Storefront Backtalk (link via The Server Room) .

Although the outage was planned, the site displayed a message saying “The Burlington Coat Factory site is temporarily unavailable. Please check back later.”  Burlington Coat Factory web supervisor Jack Follansbee said the messaging on the site” could clearly have been better,” but said the extended downtime was a necessity.

“We needed a full 24-hour outage to do the upgrade,” Follansbee told SB. “Wednesday is actually the lowest revenue day for our Web site.”

(This guest post originally appeared at the author’s blog)

Merrill Lynch downgraded several semiconductor names this morning citing unfavorable cyclical trends and a normalization in inventory restocking.  The semis are tanking 3.5% on the report and many investors fear the inventory restocking that has powered much of the fundamental strength in the sector could be slowing.  The Merrill analysts wrote:

“We are downgrading our view on the sector given unfavorable indications from our cyclical framework. In particular, our industry model suggests that following a period of rapid replenishment of inventory and normalization of semi shipments to true consumption levels, inventories in the supply chain are approaching a level suggesting a modest overshoot versus equilibrium levels. While we see limited risk to near-term estimates, we think the longer this persists the greater the risk of a correction in the supply chain. Barring a sharp upturn in the global economies, this, in our view, renders the risk reward associated with ownership of chip stocks unattractive.”

Notable Calls has more details:

In some ways, the firm thinks the current backdrop reflects a striking contrast to the conditions that prevailed at the time of Merrill’s upgrade. Specifically, at the time, supply chain inventories were at abnormally depressed levels, economic forecasts were poised to improve but as yet depressed, and indications of an inflection in electronic demand had just started to manifest themselves. Fast forward two quarters, and the picture looks completely different. To wit economic growth forecasts have trended higher, as have expectations of electronic demand growth, and supply chain inventories are perking above what they’d consider to be a normal equilibrium level. Last but not the least, sentiment around growth prospects for the group has also seen a marked improvement. Simply put, the ideal mixture of investor skepticism coupled with the potential for sharp upward revisions – which served as potent fuel for the semiconductor rally – no longer prevails. This then begs the question: What is the incentive to own chip stocks, esp. on the heels of a spectacular move up (SOX +83%) over the last 12 months?

For those looking for real world confirmation of the potential inventory adjustment being forecasted by Merrill’s industry model, the firm would point to indications from the Asia PC supply chain suggesting a material downward bias to desktop forecasts in the near-term. In particular they note that their Taiwan Hardware analyst Tony Tseng is now projecting ~flat Q/Q growth in PCs (desktop motherboards and notebooks included) into Q4. Merrill notes that it represents a sharp downward revision (esp. on the motherboard front) vs. just a month ago, in turn suggestive of slowing momentum in the PC space – the lynchpin for semiconductor industry growth. Serving as further corroboration of waning momentum are resale trends out of Asia distribution suggesting recent monthly sales trends that have been solidly below seasonal. Importantly, they’d note that above seasonal trends in the distribution data in late 2008/early 2009 had served as a harbinger of the cyclical upturn, thus, in Merrill’s view, underscoring the importance of the data.

Last but not the least, for those looking for a smoking gun, Merrill has one: namely, foundry utilization. Using TSMC utilization as a loose proxy for trends in overall foundry utilization rates, they’d note that a sale of the SOX every time TSMC’s utilization rates hit 100% would have put you on the right side of the trade in short order. As counterintuitive as this might sound (after all isn’t tighter capacity great for chip ASPs etc.?), the fact is that there is such a thing as too much of a good thing. When it comes to foundry utilizations, 100% seems to be the magic number, simply because “sold out capacity” – esp. in the face of an improving perception around the economy and by extension end demand – is often a catalyst for double/excess ordering in the supply chain. After all who wants to be caught short on semiconductor parts, which average a paltry $1.00-1.50 in ASPs, when demand is improving?

The downgraded the following names:

• Intel (INTC): To Neutral, from Buy.
• LSI (LSI): To Neutral, from Buy.
• Microchip (MCHP): To Underperform, from Neutral.
• Marvell (MRVL): To Neutral from Buy.
• Maxim (MXIM): To Underperform, from Neutral.
• National Semi (NSM): To Underperform from Neutral.
• Power Integrations (POWI): To Underperform, from Neutral.
• Texas Instruments (TXN): To Neutral from Buy.

Join the conversation about this story »

See Also:

• Today Was A Win For The Bulls!
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WATER INTOXICATION, WHICH CAN LEAD TO HYPONATREMIA IS A SERIOUS MEDICAL CONDITION WHICH RESULTS WHEN SOMEONE DRINKS TOO MUCH WATER TOO QUICKLY. WATER INTOXICATION DOWNS THE CELLS OF THE BODY IN FRESH WATER. IF A LARGE AMOUNT OF FLUID IS CONSUMED OVER A SHORT PERIOD OF TIME, THE CELLS WILL BEGIN TO SWELL BECAUSE THE KIDNEYS CANNOT PROCESS THE WATER QUICKLY ENOUGH. THE WATER STARTS TO DILUTE THE ELECTROLYTE LEVELS IN THE BODY AND IF ENOUGH WATER IS CONSUMED THE CELLS COULD ACTUALLY BURST. A LOW LEVEL OF ELECTROLYTES CAN RESULT IN AN IRREGULAR HEARTBEAT, BRAIN MALFUNCTION AND COULD LEAD TO SEIZURES AND DEATH. THE CONDITION IS EASILY TREATABLE IN EARLY STAGES BY INJECTING ELECTROLYTES INTO THE BODY AND LIMITING WATER CONSUMPTION UNTIL THE BODY HAS BEGUN TO PROCESS THE EXCESS. WATER INTOXICATION IS ALSO CALLED WATER POISONING, BECAUSE IT ACTS ON THE BODY LIKE A TOXIN. A PERSON USUALLY DOES NOT ENOUGH WATER TO RESULT IN WATER INTOXICATION , BUT SOMETIMES WHEN JUDGEMENT IS IMPAIRED BY HEAT STROKE, DRUG USE OR STRESS A LARGE AMOUTN OF WATER MAY BE CONSUMED TOO QUICKLY. WHEN COMBINED WITH SITUATIONS LIKE DRUGUSAGE AND HEAT IT CAN BE DIFFICULT TO TELL IF WATER INTOXICATION WAS THE CAUSE, MAKING TREATMENT DIFFICULT. PLEASE WATCH YOUR WATER CONSUMPTION AND YOUR ELECTROLYTE LEVELS.