The Bondholders are Strangling the World Economy!

credit crunchCredit Crunch Image by HappyHaggis via Flickr
Bondholders of the world, beware, you are under attack!

Nobel Prize economist Paul Krugman has just come out with another brilliant article, this one on the "rule by rentiers", as he calls it.  Great term! At least one French blogger (see article below) was thrilled by the use of this French word. Of course, what Krugman means are bondholders - and the credit rating agencies that "oversee" sovereign debt.

Krugman in his article doesn't mention the credit rating agencies by name, but the reference is implicit. By rating a country's debt, like for example Iceland or Greece, and lowering it repeatedly, sometimes down to junk status, they signal to bondholders that they should stay away from bonds issued by those countries. Result? Those countries have to pay a much higher interest rate to refinance themselves, which means it costs more to carry the debt (and run the government), causing untold pain to the average, hapless tax-paying citizen. Because in the end, it's the little guy who gets it in the teeth. You and me.

End result? A slowdown in recovery (or even none at all) and more unemployment! And while that is exactly what is happening both in the US and in Europe, it is a highly unfashionable subject, as Krugman notes.

The media on both sides of the Atlantic is full of news about budget deficits and how governments should adopt austerity programmes to cut expenses and raise taxes. Politicians, from the US Republicans Tea Party to UK's Conservative PM Cameron and Germany's Chancellor Angela Merkel are wed to the idea of cutting deficits. Even Bernanke's Federal Reserve which so far had fought the slowdown with a monetary "easing" policy has said it will do nothing more. Nothing about how to deal with unemployment. Mum's the word.

In this context, the latest news on Greece come as no surprise: don't restructure the debt, don't force bondholders to take a "haircut" (a dainty term for loss), just keep throwing more bailout funds at the government in exchange for more austerity measure and more taxes. And hope for the best.

Bondholders have to be preserved at all costs, and in this case, one of the biggest holders of Greek bonds is...the European Central Bank. No wonder Trichet won't hear of restructuring the Greek debt! Yet the Greek economy has already contracted 4% (and probably worse to come). The contraction is so bad that tax revenues continue to drop and at this rate, there's no way Greece will ever manage to pay its debt back. How much more should its economy contract before bondholders are finally told to shut up?

Cutting government expenses and raising taxes are a surefire way to kill off any budding economic recovery and ensure that unemployment remains intractable. This, I know, places me among the "liberal" economists who believe that Keynes had it right and the conservatives had it wrong. By "conservatives" I mean those who are ideologically committed to Small Government = Big Economy, convinced the key to growth is the private sector.

Sure, the private sector is the key to growth but when difficult times come (like now), the public sector has a role to play: it should counterbalance the economic slowdown, ease the pain of unemployment and lay the basis for the next growth cycle. How? By doing everything that is needed from incentives to innovation, in particular supporting small innovative startups with grants or at least tax holidays, all the way to structural investment in areas that are not normally attractive to private investors because they don't easily generate profits - mainly two areas: innovations that have yet "to prove themselves" as profit-earners (like much of green energy) and humanitarian public services that level the income inequalities in society (like public provision of health services and minimum pensions).

This is a roundabout way of saying that one of the government's fundamental roles in society is to take care of the poor.

But as Krugman says, this approach to economic governance has gone out the door. To describe what has happened, he uses striking images: the "rule of rentiers" govern capital markets, the "pain caucus" has put a stop to any attempts at solving the unemployment problem.  The political class is aligned with the interests of bondholders worldwide (including the Chinese government). There is, as Krugman suggests, reason to suspect a conspiracy of the wealthy bonholders, brought together in a "pain caucus" to wield their "rentier rule" against the rest of us.

If you consider that we are living in an increasingly unequal society where the rich are getting richer and the middles classes are losing ground, there is indeed something to worry about. Some statistics are astonishing: for example, 50% of American consumption expenses come from 10% of American households. That's how skewed the society is!

Bondholders are only thinking of defending their wealth - and the rest of the economy be damned! Small wonder the bonholders are strangling the world economy. Because make no mistake about this: the Chinese economy may well be the second most important one in the world, but is is dependent for its growth on the American and European markets. They are all linked, and if we go down, so will they.

And ultimately, so will the bonholders who will be paying for their shortsightedness. Unfortunately so will we!

Link to Paul Krugman's full article here

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E.Coli Disaster: Germany vs. Europe - Where are we going?

Loss!Loss! Image by Xtream_i via Flickr
Germany has repeatedly turned against Europe. Last year, after Angela Merkel dragged her feet for three months, the Greek debt problem that could have easily been resolved within Europe, exploded, rocking the Euro-zone and putting at risk recovery from the Great Recession, even in the United States. In the breach Germany created by its testy tardiness, the IMF wiggled itself in, vying with the European Central Bank for a prime role in the bailout of Greece - those were in the heydays of IMF Director Dominique Strauss Kahn, when he was still toying with the idea of displacing Sarkozy as President, and Greece provided him with a perfect opportunity to show his face in Europe.

Now, with the e.coli disaster that has claimed so far the lives of 31 European citizens (all Germans, one Swede) and caused painful sickness in thousands of others, including some foreigners who had recently traveled to Northern Germany, the Germans have done it again. We were treated to the spectacle of regional authorities in Hamburg talking to the media, pointing the finger first at Spanish cucumbers, and then at tomato and lettuce, all without any shred of solid evidence. They just "suspected" that might be the case and rushed to issue warnings. With the immediate result of causing a panic , with consumers turning away from all the incriminated vegetables, across Europe - even as far as Russia that banned exports of all European vegetables.

As a consequence, farmers and wholesalers have suffered millions of Euros of losses and started screaming for compensation. We were treated to the usual spectacles: piles of cucumbers to be destroyed, a meeting of EU Agriculture Ministers haggling over the details of what compensation should be paid for farmers for their losses. A sorry spectacle compounded by the weak proposals coming from the EU Agriculture Commissioner who talked to the press of finding some €130 million in EU coffers to cover about 30% of the losses (!) and the Spanish Agriculture Minister, livid with anger, obviously refusing.

How much farmers and wholesalers will eventually get once the haggling is over (and the fuss in the media has died down) is anybody's guess. One thing is certain, it is the European taxpayer who is going to pay as usual for the incredible inefficiency, laxness and unprofessionalism of its political class.

Because that is what is most striking in this whole deplorable story: the European political class's inability to come to grips with an emergency situation, even though Europe had given itself a specific European institution to deal with food safety. Created in January 2002, after the BSE "mad cow" disease emergency had rocked Europe for a decade, finding the continent unprepared, the European Food Safety Authority (EFSA), installed in splendid headquarters in Parma, Italy, was supposed to be running "at full capacity" by 2004/5. It took a little longer than that to get it going (no surprise there!), but it is supposed to be fully operative since at least 2008/9. It has even undergone an internal reorganization to make it more "effective" and the new structure should be in place by January 2012. Of course, internal reforms can be profoundly disruptive and this may go some way to explain EFSA's absence in this story. Still EFSA, with a staff of some 450 professionals and a whole series of scientific panels, is on-going and operative: there's no reason to assume that it shouldn't be able to play its role.

What is EFSA supposed to do? It's interesting to read its mandate - in a nutshell, it's supposed to position itself in the public mind "as the independent guardian of food safety in the EU with a strong scientific focus. It should be the first point of reference for expertise on food safety." (Highlighting added).

Did you hear them say anything during the e.coli crisis? Okay, we all know that in the European power play, European institutions like EFSA are politically tied and told to shut up. We also know that in the EU context, risk assessment is done separately from risk management. But the point here is that the panic was caused by local authorities (in Hamburg) issuing a false alarm. Surely, if risk assessment was the business of EFSA, why didn't it move? Why didn't the German authorities defer to the EFSA?

I don't know, I don't have the answers, and nobody is asking either the German Minister of Agriculture - and much less the local authorities in Hamburg -  or the EFSA why they didn't collaborate on this one. Or why the EU itself didn't move. Both EU Commissioners concerned - the one for Agriculture and the one for Health (and thus food safety) - seemed to be dumb-struck, and the EU head, Barroso, didn't fare any better.

Why is Brussels so silent? The best the EU Commissioner for Health could come up with was a weak defense for the Germans: "We have to understand that people in certain situations do have a responsibility to inform their citizens as soon as possible of any danger that could exist to them," John Dalli said in Brussels. As soon as possible? Yes, but do it responsibly! And that was precisely the role of EFSA: ensure responsibility and confidence, by reference to solid scientific evidence.

Two elements seem to have been at work here to cause this disastrous situation. One, the famous "precaution principle" Europeans are so enamoured with. Because of the precaution principle, Europeans reject American-promoted OGMs, chemical additives etc - and often, quite rightly so: until all the scientific evidence is in, the precaution principle dictates that one should reject such new-fangled ideas. But here we were dealing with sick people, suffering from bleeding diarrhea and exposed to a life-threatening bacteria. So the precaution principle undoubtedly inspired local authorities in Hamburg to issue warnings, rather than remain accused afterwards of having caused possibly unnecessary deaths. One of these guys had probably a bad memory of an unhappy vacation in Spain so the Spanish cucumbers were immediately accused. In the rush to issue warnings, they forgot to get EFSA's opinion. Or did they? We shall never know. But they were clearly speaking for themselves and never made any reference to any European institution.

And here we get to the second and more serious element: in an emergency such as this one, no one turned to the EFSA although it had been fully functioning for some years already.  And the German Minister of Agriculture, by allowing local authorities to speak ahead of itself, is particularly remiss in this. Because if local authorities may forget that Europe exists, surely the Minister of Agriculture of a big country like Germany does not and cannot.

Why was no reference, no attempt to defer to European institutions made?

Who knows. My guess is that a certain, home-made, throw-back form of chauvinism is at work in Europe. Because World War II memories have faded and fallen behind the horizon, people have begun to forget what it means to be European. All they see is their nose. All Europeans seem to be this way nowadays: only concerned for their own well-being and Europe be damned. This renewed sense of patriotism seems to be particularly strong in Germany, where more and more people appear to be besotted with the Greatness of Great Germany.

This is a real pity. Because after Greece and the e.coli disaster, the great loser in all this is Europe. And along with the European ideal, all of us European citizens, in the hands of incompetent politicians who have little common sense and no scientific knowledge - yet both are essential in our increasingly technological world. This e.coli crisis would never have happened if somebody hadn't started to grow soya bean sprouts in a technologically advanced greenhouse south of Hamburg, duplicating the moist tropical environment necessary for bean sprouts in Northern Germany. And to think that the incriminated farm is supposed to be "biological"!

In my view, the lessons from this story are clear: don't trust local authorities, or European institutions or bio agriculture! What a mess!

What do you think?

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Amazon vs. Book Stores: Another Crushing Victory?

Amazon may well be the Next Big Publisher, but it is already one of the biggest book distributor, both for printed books and ebooks, if not the biggest. Does that spell out the end for your traditional corner bookstore?

The rumour around the blogsophere leaves little doubt as to the answer: Amazon is not only the biggest online bookstore but could well become the biggest bookstore in the United States, period.

We've all heard how the Kindle, introduced only three and half years ago, has changed the parameters of online book sales.

This year, the company is expected to sell 17.5 million devices for a total $ 2 billion: not bad! And for us over here in Europe, it has come out with a really good model (see pix above). It can be used anywhere without having to remember passwords etc to link into a local Wi-Fi system: the 3G model works no matter where you are. And whenever you feel like it, you can tap into the Kindle Store from your device and buy anyone of the million titles available (yes, one million, that isn't a typo!). It will be delivered to you in a matter of one or two minutes (probably less if you live in the US). Amazon charges about $2 to "whispernet" it to you if you live in Europe, but that is still a very reasonable expense and unbeatable if you happen to be in Timbouctou, far away from any bookstore of any kind...
Corner Bookstore, Washington St., BostonCorner Bookstore Washington St. BostonImage via Wikipedia
The Kindle was - and is - an obvious winning card, but not only.

What really makes the difference, as recently pointed out by Mike Shatzkin  in his widely read Shatzkin Files, is the sea change Amazon has brought to "book curation" - the term used to describe the work and role of bookstores. In Mike Shatzkin's words, here is what curation is all about (highlights added): 

In a shop, curation begins with with what the store management puts on the shop shelves. The overwheming majority of customers in a brick bookstore who buy something choose from what is in the store.

The second line of curation in a shop is in the details of the shelving itself. Is the book face out or spined? Is it at eye-level or ankle-level? Is it on a front table in a stack? Is it displayed in more than one section of the store, which would increase the likelihood it will be seen?

And the third line of curation in a brick bookstore is what the sales personnel know and tell the customers.

That describes pretty accurately what a traditional bookstore is all about.

How does Amazon differ? From the start, when it was a young upstart online bookstore, it had to come up with a different curation model, one that works from your computer. Again, as Mike Shatzkin says:

Until Amazon, if you wanted any particular book or if you didn’t know exactly what you wanted, your best strategy was to go to the shop with the biggest selection to try to find it. Once Amazon happened, the magnet of in-store selection lost its power for many customers. If you knew what you wanted and you didn’t need it right this minute, the most efficient way to buy it would be to go to Amazon and order it. Customers who would have been browsing store aisles and, if necessary, placing special orders with their bookstore, now just shopped online.

But the sea-change didn't stop here. There was more to it, in Mike's words, recalling his own experience at Brentano's: 

I had grown up with the Brentano’s “selection” story and had seen it demonstrated over and over again throughout my career that increasing the title selection in a location increased the traffic and increased the sales. Technology had changed the reality. The magnetic power of a physical space full of books to bring in shoppers had been weakened. The surest way to find something that wasn’t as ubiquitous as a current bestseller remained a visit to the store with the most selection. But that store was no longer in a building. It was in your computer.

And, ultimately, that is the single most powerful force bringing the era of the super bookstore to an end.

Yes, and that spells out the end of traditional bookstores and of course, goes a long way to explain the demise of Borders.

So are we stepping into a completely different world in which bookstores will be no more?

Mike Shatzkin points out that not all aspects of book curation are that well done online, in particular the guidance and advice that a good bookstore personnel can provide to its customers. As he says (and I've said it also in an earlier post) at least three Big Publishers have realized this and set up Bookish.com for that very purpose, in an attempt to link readers with the legacy publisher's traditional role as "taste gatekeeper". Naturally, Amazon has not held back and has also tried to remedy this, setting up readers forum and savvy editors'advice via Amazon Omnivoracious daily digest.

Beyond this, I think it's a little premature to expect all bookstores to go the way Borders went and close down. It is certainly not the case yet in Europe but of course the impact of the digital revolution has yet to be felt.  But it is perhaps not even the case in the United States.

What bookstore owners need to understand is that ebooks and printed books are NOT two different products and they can showcase BOTH. That is what Barnes & Noble does, and with its Nook, a device equivalent to the Kindle, it has managed to avoid Borders' fate so far.

But bookstores can do more to remain relevant to their neighborhood clientele. They can organize community events, conferences, meetings with celebrities etc They can provide additional "comfort" services, like a Starbucks-type coffee shop/lounge where clients would be enticed to stay, read and write...and walk off with a book purchase, whether ebook or printed book, it doesn't matter.

Again Barnes & Noble has partnered with Starbucks and is moving towards a "Nookcafé"...clever! But small non-chain bookstores are waking up too, and carving out their own space with success. Take the Harvard Book Store in Cambridge, Mass: it has an attractive website and a carrousel of events every month - things like Fiction Friday with 15% off on purchases online that day.

In Germany also there are such bookstores, and I don't mean a big chain store but simple local bookstores, that are developing following this model, both physical and online. And you can probably come up with examples in your own area.bookstoreBook Shelf CharmImage by darwin.wins via Flickr

Whatever sea change the digital revolution brings, it will not kill off either the printed book or the traditional bookstore - just like the movies did not kill off the theater, or mp3 players displaced concert halls and music festivals. People like to get together around what they love to do - in this case, read books.

In my view, those able to and smart enough to play on both fields - in the real and in the virtual world - will be the winners - or at least the big survivors!

What do you think? Are the cities of the future going to be without bookstores?

Link toMike Shatzkin Files here for more on "book curation" and a fascinating historical overview of how it evolved over the past 50 years and  Passive Voice here for further illuminating comments  on Amazon's role as a primary online bookstore.

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Self-publishing: Go with a YA Novel?

The stigma attached to self-publishing has just about disappeared thanks to the digital revolution and the likes of Amanda Hocking. She started out in 2010 with book one of her Trylle Trilogy selling it for 99 cents. Within a year she had made $1 million on e-book sales and signed up with one of the Big Six traditional publishers for a $2 million deal, saying she wanted to reach out to more people than those reading the Kindle. "I want to become a household name", she declared, referring to all those people out there who read printed books.

Good for her, everyone is drooling over this fabulous story of rags to riches. But how did she do it?

Two things stand out.

First the product: she struck out with a YA paranormal trilogy (of course, she's got more out now - modern authors are famous serial writers). Yes, three books right away and all centered on youthful vampiric romance - ok, a little like Stephanie Meyer's Twilight, but that's important. You want to have a winning model in mind when you start out. And Amanda Hocking's marketing strategy: she priced the books at 99 cents - a great promotional tool since it works on impulse buying. Who's going to hesitate when the layout is so small, less than a coffee? It is also reported that she relied heavily on Twitter and, as far as I can tell (I follow her on Twitter) she still does.

I, along with every other new writer, have little hope of duplicating such a stupendous performance. But surely something can be learned.

Let's set aside this question of price: it is only a promotional ploy and anyone can do it (I am! Check me out on the right upper corner! And of course, I'm not going to leave that low price for very long...So hurry...And if you think that's brash marketing, you're right, it is!)

More interesting is the question of whether it make sense to come out with a YA novel.

The publishing industry is generally convinced books for YA are in a winning category all on its own, covering all sorts of genres and sub-genres, and whose unifying feature is that they are aimed at young adults. There are some grumbles about this, most recently coming from the Wall Street Journal's Ms. Gurdon, who complains that too much YA literature is lurid, violent and in bad taste - perhaps even damaging for teens. That, predictably has caused a strong reaction in the YA blogosphere  (for a couple of fiery examples see below). But of course, I have never had any intentions of producing a violent book - actually that's not something that turns me on: I never liked Grand Guignol whether in the visual arts, the theatre, the movies or books. Grand Guignol in my view is cheap, debasing and a waste of time...There I said it!

So I rummaged in my past publications (for which I have the rights) and decided to use the plot of a paranormal/historical romance I published in Italian a few years ago - doing a total rewrite in English to adapt it to a YA audience.  When I presented my YA proposal - a paranormal trilogy called Fear of the Past -  to a literary agent sometime ago, the discussion bizarrely veered on my protagonist's age.  I thought he should be 19, the agent persuaded me that YA novels call for protagonists who are not over 18...Discussing his age this way seemed slightly Kafkaesque...Later I checked it on Wikipedia:  the agent was right, YA is defined as a teen audience not over 18 (!) But I wanted to go beyond the age question. I wanted to know whether my story was adapted to a YA audience, and beyond the question of audience, did she (the agent) feel it was a good yarn? I've always felt that "a good yarn" is what made the difference.

She stared at me and told me she'd give me the answer when my query letter turned up in her email thread. Immediately I imagined an email string as long as the Mississippi River: as I had first sent my query out to her six months earlier, I assumed I'd have to wait another six months before she got to it (by the way, I'm still waiting...).

Was she right? Wrong? Let me try to give you in a nutshell what this book is about and see what you think.

Forget the Past (the first book of the trilogy) starts with Tony suffering from burnout: a computer whiz kid and a top video game programmer since the age of 14, he's fed up and feels like an old man at age 17 (yes, I gave in to the agent: 17 not 19!).  He sets off looking for his roots in Sicily,  the homeland of his father. When he walks into an abandoned palazzo with a weird name on the front door: Circolo di Conversazione (Conversation Club), he meets the ghosts of his ancestors, going back 900 years. Among them is the Duchess of Floridia, a famous 18th century beauty. He falls in love and tries to escape with her to his own time. Can he make it?

That was my pitch but it didn't work. The agent was a little non-plussed by the idea: what, she said, he falls in love with an ancestor of his? Making it sound as if this was a novel form of incest. I weakly tried to defend myself, pointing out that 200 years separated them - a lot of generations. Actually, I bet many of us are closer to each other than we think, and  not worse off than young Tony and his Duchess of Floridia!

So much for Book One, then it is followed by Book Two, Reclaim the Present, where Tony meets a present-day Sicilian woman who reminds him of the Duchess (and she's older than him - yes, I have this fixation with age!) and Book Three, Remember the Future, where his self-quest comes to a happy conclusion. As you can see, all three sub-titles - referring to the passage of time -  tie neatly in the overall trilogy called Fear the Past. I thought that was rather clever, but it didn't cut any ice.

So I began to worry. Had I got my YA trilogy wrong? It covers several genres, and I thought that for YA that was supposed to be okay.

It's part paranormal : all the ancestors Tony meets in the palazzo are ghosts.

It's part time-travel: the ghosts act out the defining moments in their lives in short plays. The plays are meant to be a sort of after-life therapy, a way to prepare themselves for Judgment Day. Yet the Circolo di Conversazione is not set in a particular century: it  is a place out of time, where dead people linked by family ties meet and "live"  in a limited way since all they can do is talk and act in plays. Incidentally, I had trouble getting across the idea: a historical novel that uses historical figures yet is not a reconstruction of a particular time period didn't apparently fit into any category.

It's part romance: Tony falls in love with a more mature woman, the Duchess of Floridia, who teaches him about love and its limits. That of course sounds a little sulfurous but it's an important part of growing up...

It's part psychological: Tony is on a self quest and his coming-of-age experience doesn't come (as it does for most people) from interacting with his friends and immediate family. It comes from his ancestors and the wrenching discovery that he has more in common with an English adventurer who settled in Sicily in the 1800s (and transmitted his genes to him) than with his own father.

That part (in my humble view) is what really makes it a YA novel: the self-quest. But of course, that is also what makes it interesting for adults. If you think about it, as you live through your life, you are continually on a self-quest: the terms are different in different periods of your life, but the self-quest is always there. Probably the reason why so many adults read so-called YA literature: it is said that every Harry Potter book was eagerly awaited by parents as much as their kids... 

It also raises existential nurture vs. nature questions: to what extent does your immediate family determine who you are? Are you a throwback to some unknown ancestor? Tony is in a unique position: meeting all his ancestors in "the flesh" as it were, he's able to determine who he really takes after (the English adventurer).

Do we all harbor some form of "genetic memory" that makes us behave in sometimes unexpected ways? Young people as they grow up are confronted by comments coming from the adults around them,  like "he looks like his grandfather", "she behaves like her aunt" etc Most aggravating, especially when you realize there's probably some truth in them! And then, who knows to what ancestor your looks and your behavior hark back to?

Again, too many questions underlying a work of fiction make it sound too intellectual - egg-head stuff. Pretentious. Once more a no-no.

Okay, let's set aside these questions.

Bottom line, what I really want to know:  is a good YA novel a mixture of genres? Am I right in my conviction that YA is focused on a self-quest? Since Catcher in the Rye days (that was back in the late 1950s), self-quests are the determining feature of YA literature (something Ms Gurdon of the WSJ forgot to mention).

Just take a look at the basic strategy here: since self-publishing has become a real option, is a YA novel the best way to go?

I see this as an experiment. The digital revolution opens up options that did not exist before. But, as I've said in a previous post, in my view there's no reason to give up on the traditional road to publishing - either seeking out one of the Big Six or smaller, independent "niche" presses. I've got ready a novel that neatly fits into women's fiction (lucky,  this time it goes into a well-defined genre!). It's only wise to hedge one's bets...

But I'm eaten up by self doubts. Am I right to engage in this e-book experiment?

There are so many questions that need answering. Is anyone out there thinking of self-publishing too? And if you've made the jump, what happened next?  How did you do your marketing? How do you balance the marketing (it takes a lot of time and energy) with the writing you need to do? And with all those successful serial writers out there, à la Amanda Hocking, you really need to put that pen to paper, or bang, or click on your computer like mad!

Please share your thoughts!
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BLOGS: their Number is UP, Comments are DOWN. How Come?

Symbol commentsSymbol commentsImage via Wikipedia

Blogs are UP and comments are DOWN! Is that a probable picture of what is happening to bloggers these days?  It seems high-level, veteran bloggers are finding a slowdown in the number of comments to their posts. Judy Dunn on her fascinating Cat's Eye Writer.com has a great post on this subject, here's the link:

And would you know it? She got an unusually large number of comments reacting to her post, close to 70, easily double her average!

The blogosphere is full of advice on how to raise the number of comments on your blog: take a look below, I've collected some of the more interesting articles for you.

At the end of the day, what is really good advice?

I confess that not being tech-savvy, I'm a little lost. I've had one reader tell me I should make my comment box more visible. I use Disqus which I find very useful (sends me the comments straight to my email box and makes it easy for me to reply directly, right under the comment made) and apparently there's also a lot of good to be said for Livefyre.

But I don't think it's the comments technology that can make that much difference. It's the sheer NUMBER of blogs out there - overwhelming information! Even online communities have a plethora of fora and threads. It may well be that this abundance discourages people from stopping by and taking the time to make comments. If you do that - actually write down a comment, even a short one - you always have the ghastly feeling that you're wasting your time on a particular site when so much more interesting things might be happening elsewhere!

Only Twitter seems to be able to appease this particular angst - no doubt why twitter is fast becoming such a big success: there are even twitter bloggers now, and (I just discovered) Twitter poets!

Another thing: I'm quite convinced you can have an interesting blog and yet few comments because you don't elicit either negative or positive reactions: you just don't leave people space for expressing their reaction. You've covered the whole ground, you've done it objectively and convincingly, so there's nothing to add. Maybe one should write posts that are a little screwy, unfinished, opened to question to get good reactions!

Or you can write in a "niche" providing good advice: that's what Konrath does for aspiring writers, encouraging them to self-publish. That message has had a resounding success and his blog is widely read (and commented upon - but then writers are probably the easiest kind of readers who'll take to their pen to respond: writing is in their nature!)

Or you can be someone people look up to or want something from. A celebrity, a big writer, or even just a professional with useful advice, like for example a literary agent giving out advice to aspiring writers about how the publishing industry works, how to write a winning query letter etc. 

Or you can focus on the visual. I've got a friend on my Facebook page (in the news feed) who posts a new picture she has taken everyday - sometimes it's a donkey, or a litter of fluffy kittens, or a red sunset on the sea, whatever, but it's sure to be nice looking, full of colors and (to my taste) rather, well...
cliché (I suppose that's appropriate for a photograph!) But she gets far more comments that I ever get with my "serious", so-called "interesting" posts. Dozens of comments every time she posts a picture! Amazing!

Just yesterday I got a reader commenting on one of my short stories. She loved it and I was very moved: few people comment on fiction work, I don't know why. In case you're interested,  it's in my archives on this blog, here's the link: I am not leaving you behind . It's flash fiction - a sci-fi piece on what would happen if we ever conquered aging and dropped dead while still looking young. So I checked out her blog and discovered she lives in Singapore and has surrounded herself with a wonderful world of pictures that she shares with her followers - here are the links to beautiful ones (an antique Chinese fashion show) and funny ones (weird portraits of an interchanging man and woman). And notice the number of comments! With lovely photographs, she manages to get 20 to 30 comments every time! And deservedly so.

As a friend of mine said, ours is a "culture of the image". And no wonder, images are immediate, you get it right away, as fast - nay faster! - than Twitter!

What's your take on this? What do you think makes readers want to comment? Why do you ever want to comment?

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IMF Top Post: Can a Woman Make it?

Oslo Conference 2010Lagarde and Strauss KahnImage by International Monetary Fund via Flickr

Tall, elegant French Finance Minister Christine Lagarde is in pole position to succeed her countryman, Dominique Strauss Kahn, in the top job at the International Monetary Fund. We should have the results by 30 June. Lagarde was hesitant at first, but once she decided to go for it, she hit the campaign trail running: first garnering support in India, then at the G8 meeting in Deauville, with Russia coming out in favor, and now Brazil, just ahead of her Mexican rival.

Indeed, Mexico’s Carstens is the only other serious contender: he served as IMF deputy managing director from 2003 to 2006, then as Mexico's finance minister, and finally, since January 2010, as its central banker. With a Ph.D. in economics from the University of Chicago, he is a heavyweight in precisely the area where Lagarde is lacking: economics. She's a lawyer, albeit a remarkable one, who made it as the first woman head of the big Chicago-based firm Baker McKenzie (and a foreigner to boot - after 25 years in the US, her American-accented English is excellent).

2011 G-20 PresserImage by International Monetary Fund via Flickr

Why is this race so fascinating? First, because no woman has ever held that post since the IMF was founded in 1946. And having a woman like Lagarde following on a man suspected of rape seems to be a perfect answer. She is certain to put order in the IMF's rather unsatisfactory code of conduct, one (stringent) for the employees, and another ("vague") for the board of directors. A woman, at this point in time, is just what's needed!

For that matter, no woman has ever run the World Bank either: next time there's a change there, a woman candidate should be brought up... Both institutions created after World War II to bring some order to the world economy (largely as a result of Keynes' efforts), have traditionally been run by men, always an American at the helm of the World Bank and a European at the IMF - and the Third World be damned!

Strauss Kahn had started to bring change to the IMF's vote composition, giving hope to emerging economies that they would play a larger role. Under his stewardship, their share rose to 42 percent (from 40.5 percent, not such a big change...). This was mostly achieved at the expense of European Union countries who now hold about 31 percent, while the US retains close to 17 percent. For Lagarde to make it, these numbers signify she only needs a slight nudge from countries outside Europe and the US. While the US has not yet formally announced its support for Lagarde, Geithner has manifested approval and in any case, there is no reason at all why the US would not support a European: if it didn't, the pact would be broken and the US would risk "losing" the World Bank.

Lagarde in her campaign is careful to make all the right noises and assuring emerging market and developing countries that she will give them more IMF power. 

Furthermore, the fact that she is a French citizen following on another French citizen is not disturbing anybody: it's happened before at the IMF with one French Managing Director following another (Camdessus following Larosière).

So is her nomination good and done?

Not quite. There are a few problems. She could be placed under investigation for ordering an out-of-court arbitration in which Bernard Tapie, a former business tycoon and friend of Sarkozy, obtained a € 403 million settlement from the French state.

There is increasing noise in the media about the fact that she hasn't been a particularly good finance minister and is one of the architects of the bailouts in the Eurozone (Greece, Ireland, Portugal) that many view as disastrous; that she is no economist, has never made her voice heard in France on such matters; that she is merely Nicolas Sarkozy's mouthpiece.

And emerging economies in all this? They might vote for her, but perhaps not for a full mandate. Brazil has been muttering about that, saying she should stay only to the end of Strauss Kahn's mandate...But that would leave her stranded with no job in 2013. She has made it quite clear that she wants a full mandate...

So the bets are on...If you could vote, who'd you vote for? Christine Lagarde, the brilliant corporate lawyer or Carstens, the central banker and ex-IMF deputy managing director?
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Amazon: the Next Big Publisher?

Giant!Image by freebird4 via Flickr
The evidence is piling up: Amazon is gearing itself to become the next big publisher. Will it make it?

First take a look at the evidence: the drums have been rolling  recently around the birth of two new imprints, Thomas & Mercer for mysteries and thrillers and Montlake Romance, thus bringing the total to five (with Amazon Encore, AmazonCrossing and the Domino Project).

The biggest news last week were, of course, the appointment of Larry Kirschbaum as the new manager, as of July 5th, of a new general imprint yet to be named that will publish an  array of diverse things, fiction and non-fiction presumably known to be high selling. In fact, the announced categories are rather broad: business and general non-fiction, literary and commercial fiction, young adults - to be published in both print and digital formats. Basically this will be the top-of-the-line imprint covering everything except genre. The avowed goal according to Amazon management is to eventually cover everything Amazon's "voracious readers" are reading.  

Why is the hiring of  Kirschbaum such big news? Because as the former CEO of Time Warner's book division and  founder of a highly successful literary agency with 40 agents, he is a heavyweight in the traditional publishing industry. He is bringing not only his experience but an aura of  "legacy publisher" to Amazon. That's important because for many people Amazon is still nothing but an aggressive, upstart mail and digital library. In an interview to the Wall Street Journal, Kirschbaum acknowledged  he had been trying to find a way to do some publishing as an agent, but  in the end realized "it was cleaner to do this working for a company totally committed to digital publishing and that has the resources and structures to make this successful".

Cleaner? Yes, there have been questions raised in the industry about the possibility of conflicts of interest for writers if their agents cease to represent them and instead go straight to publishing them. So Kirschbaum's decision is undoubtedly cleaner from an ethical standpoint, avoiding all possible code of conduct problems.

Is Amazon, as he puts it, "a company totally committed to digital publishing"? Not quite the case, since the imprint he'll manage will publish printed books in addition to digital. But in the sense that Amazon's strength resides in its digital publishing capacity, it is indeed the case. In fact, therein lies its winning card, and I'm sure Kirschbaum knew what he was talking about when he referred to Amazon as "having the resources and structures to make this successful".

Because Amazon, compared to traditional publishers, has an extraordinary winning card that none of them have (at least for the time being) - and neither do traditional bookstores like Borders (hence its demise). Only those who go digital, cleverly combining the physical with the digital, like Barnes & Noble (vide its Nook, a real rival to the Kindle), can look forward to a serene future in the digital age.

What am I talking about? Those of you who have a Kindle will know right away what I am referring to: their computers' capacity to track your digital purchases, memorize them and the next time you turn up in the Kindle shop looking for a new book, to propose new titles to you on the basis of what you've bought. This is a very powerful tool to catch customers. Physical libraries have traditionally used shelf space, organizing them by genres and types of books to help their customers and make new titles accessible.

This possibility is of course denied to Amazon as an Internet company. They have had to devise digital search tools to make books accessible - but in so doing, they've developed an incredibly powerful marketing tool. Much more powerful than the "genre" system used by traditional publishers which is necessarily based on the history of past sales of their stable of authors.

Herein lies the main difference: traditional publishers know what their authors sold (how many copies, when, where, in what genre) but they don't know who bought them. Amazon does - perforce, it's on Internet, every transaction is written, a complete contract between seller and buyer, with credit card and home address. It's not like when you buy a book in a bookstore or at the WalMart with cash. And at the end of the day, knowing who bought what is going to win the race.

Provided, naturally, that Amazon keeps playing the game above board. I know of one person who got upset when she searched for the latest thrillers published by traditional publishers and instead got a whole lot of indies thrown at her. That happened, of course, because in the past she had bought (or looked, downloading a sample - that counts too) at a lot of self-published authors, and the machine, not being intelligent, thought she wanted to keep doing the same thing. Clearly, with the millions buying on Amazon, computers cannot give the required individual attention, but surely search functions can be improved, to respond better to every kind of requests, including the unexpected ones. My bet is that Amazon will be careful about this sort of glitch, it is in their interest.

Amazon has already started to put this knowledge to good use. For example, in publishing international literature in English with its imprint AmazonCrossing,  it is careful to pick the winners on the basis of customer feedback from Amazon stores worldwide. Result? Its first title, the Hangman's Daughter, sold 100,000 copies in the first six months after publication. And it seems AmazonCrossing is fast becoming a roaring success in the US market that is not particularly given to reading foreign authors.

Then you have the example of author Barry Eisler who just signed up with Amazon's imprint for thrillers and mysteries, saying it was the best, most straightforward contract he had ever signed (remember, he's the guy who walked away from a $500,000 advance with St Martin's Press, saying he wanted to self-publish). His advance was "comparable" to traditional deals and his royalty rate would be 70% since his book would first come out in digital edition (with the standard low royalty on the printed edition to follow). This too is interesting: the traditional model followed by legacy publisher (come out first with a printed edition then follow with digital) is here reversed: first digital, next printed.

So is this Brave New Publishing World going to be a paradise for authors and readers? Hard to say. Some of my friends worry that the craze of self-publishing on Kindle, particularly at the 99 cents price, will create an unmanageable slushpile that will demean the art of writing and turn off readers.

Maybe so but so far it hasn't happened. Amazon makes money on every title sold (even at 99 cents) because it costs next to nothing to deliver it by whispernet and the rest of the expenses (editing, book cover, marketing etc) is the author's, not Amazon's concern. And if the book is bad, the reader will blame the author, not Amazon and simply stop buying books from that author. So the slushpile stays there, unread, invisible, hidden somewhere in an internet cloud.

On the other hand, if a self-published author starts selling a lot of copies, Amazon will necessarily notice. They let famous Amanda Hocking walk away. Remember her? The paranormal romance writer who made such a splash last year, when she signed up with St Martin's press for a reportedly $4 million deal. But now they're not likely to let others get away. A friend of mine noticed recently that a self-published thriller author who'd acquired a consistent following and ranking on Kindle made it into their Thomas & Mercer imprint. More are sure to follow.

So, as blogger Jane Friedman said, will self-publishing on the Kindle replace the query letter to agents? Will publishing on one of Amazon's imprints become a goal as important for writers as reaching one of the Big Six publishers?

My guess is yes.

What do you think?
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The EURO Crisis: Is Greece the Culprit, a Victim or a Scapegoat?

Euro ManImage by rockcohen via Flickr
With the Euro crisis we're back to where we started a year ago: Greece is being battered from all sides.

Let me count the ways:

(1) By the credit rating agencies - but that's no surprise, those agencies are basically in the pay of big banks and multinational corporations all out to cover their backs as investors;

(2) By the biggies in the Euro-zone, in particular France but especially Germany - nothing new here, Ms. Merkel has piled up nasty comments, knowing how well they resonate back home and she needs votes at the next election;

(3) By neighbouring countries, Italy and Spain - and that's something new, although not very surprising: both the Italians and Spaniards are worried that Greece's pains will ricochet to them, as investors realize they share the same kind of troubles (high debt, high unemployment, no or little growth);

(4) By the EU that is asking for Greece to reform asap, in particular pursue privatization of telecommunications, electricity and the port of Athens.

(5) By the International Monetary Fund (IMF) - Dominique Strauss Kahn, reputed to be a friend of Greece, is no longer at the helm, but that doesn't change one iota in IMF demands for policy reform and austerity;

(6) By the European Central Bank (ECB), aligned with the IMF: it will not hear of any form of debt restructuring.

Where does that leave Greece and the Euro?

Athens clearly risks default if it doesn't get more EU funding. Adding insult to injury, the IMF won't release its June aid payment if funding support is not guaranteed by the Europeans (this was announced by the Greek Finance Minister).

The privatization measures the EU is so keen on will bring relief (some €50 billion), but surely this is not the best of times to sell the crown jewels and results might be far less than expected. And in any case, sales will take time.

So can Athens avoid default if nothing is done?

Greek debt stands at €327 billion, 150% of gross domestic product, and is expected to reach 160% in 2013 - patently unsustainable. This is a fact, and a solution MUST be found.

But it doesn't look like the one major European institution that should be concerned is reacting with any sense of either rationality or responsibility: the ECB is adamant it won't accept any Greek debt as collateral in its refinancing operations. That sounds very technical but it means simply that Greek banks and insurers will go kaput under the weight of their debts. And, as we know when Trichet (the head of ECB) walked out on European finance ministers in Luxembourg last Monday, the ECB won't hear about any "soft restructuring" proposal. Greece must follow the EU/IMF programme completely or else!

What's the solution? Any ideas?  Before you say with glee "I told you so", the Euro was always ill-conceived and cannot survive, please consider that if Greece pulls out of the Euro, the solution will be worse than the problem. Because the Greek financial system - and all payments throughout its economy, from the bank to the small store owner - will necessaily grind to a halt while Greece sets up a new currency. Establishing a new, functional currency takes time, and, though Greece is a small, peripheral country,  it still means destabilization for the Euro-zone for an extended period.

And a destabilized Euro is dangerous for the whole world! Personally, I think Europeans have no choice but give the IMF the required guarantees before June and cough up the necessary funding, embark on "soft retructuring" and/or do whatever is needed to save the Euro.

In my view, Greece is not just a test for the Euro but a scapegoat: a reason not to take the measures that SHOULD be taken, including fiscal reform, pension reform etc and  not just in Greece but throughout the Euro-zone!

What do you think?
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Young Adult Fiction: is it really a "genre" that sells books?

Cover of "The Shadow of the Wind"Cover of The Shadow of the Wind
The publishing industry has always relied on "genre" as a marketing tool to push its wares, and among them, the most bizarre is YA.

How to reach out to Young Adults is of course a legitimate concern but lately, with Rowlands' winning Harry Potter series, everybody from literary agents to editors to publishers just drools about it. YA is growing fast. YA is where money is made. YA is the place to be. Even as an indie: look at Amanda Hocking and how she became a publishing wonder with her YA trilogy published on the Kindle.

So about six month ago, since everybody seemed so excited about it, I thought I should try to "break out" with a YA novel. But first I did some research to try and figure out what YA meant.

First surprise: YA is not a genre as such. It is a cross-cutting genre by definition: it means different things to different people. A YA novel can be a romance, a dystopian fantasy, a historical, a paranormal laden with vampires and werewolves, in short, just about anything, one, several or all of them together.

What makes all these sub-genres (also found in adult fiction) particularly YA? I dug in further and ...

Second surprise: nothing in particular, not even the age of the protagonist. Yet, that's what (according to Wikipedia and all the pundits) is precisely what defines YA: young adults are people between the age of 12 and 18. Thus, characters should be within that age bracket.

How pervasive this view is within the publishing industry was confirmed to me about a month ago in a conversation I had with a savvy literary agent. It was amazing. I was trying to pitch my newly-minted YA trilogy Fear of the Past - by newly minted, I mean I'd just rewritten it for the American market in English (it was originally published in Italian in 2007 and meant as a historical/paranormal romance for the adult market). She asked me the age of my protagonist, and I said my Tony was 19. She shuddered, I thought because he was male (a lot of agents are firm believers that female protags have more market value than male ones because more women than men read fiction). No, I was wrong. She shuddered because he was 19. "That's too old," she said, "for a YA Main Character".

I was astounded. Too old? How old should he be, I asked. "Not over 18", she replied with confidence, "especially if it's going to be a trilogy". Presumably that's because he's going to be older in the next two books, so if you start him at 18, he could be 20 or 22 by the time you finish. I opened my mouth to tell her that my time arc was much shorter than that, that this guy was on a self-quest that resolved itself in the course of a single year: by the end of the trilogy, he'd be just about one year older. Then I shut my mouth again.

What could I say? That some of the most successful  novelists who write for YA audiences in recent years have protagonists that are both young and old?

Actually, their characters begin young and then grow old - damn it, that's life! I won't go down the list, but look at Carlos Ruiz Zafòn's books, starting with that absolute masterpiece, Shadow of the Wind, set in a dark, mysterious Barcelona touched by Gaudì craziness and a magical cemetery of Forgotten Books. How I love that book! And all the others he wrote...

I can't see where YA differs from great literature for so-called "adult" audiences. Recently, someone pointed out that Romeo and Juliet was a YA tale. Have you ever thought of Shakespeare as a YA author?! And classified as a YA only because his protags - especially Juliet - are so tender and young, in their teens...

What Carlos Ruiz Zafòn himself has to say about YA is extremely interesting. When asked what he thought were "the most important differences" when writing for adult readers and young adult readers, his answer was an eye-opener and I can't resist quoting him (you'll find the whole interview on his Amazon page):

I don't think they're that many differences, really. You just have to write the best possible story in the most efficient way you are capable of. It is all about the language, the style, the atmosphere, the characters, the plot, the images and textures… If anything, I believe that younger readers are even more demanding and sincere about their feelings about what they're reading, and you have to be honest, never condescending. I don't think younger readers are an ounce less smart than adult ones. I think they are able to understand anything intellectually but perhaps there are emotional elements that they have not experienced in their lives yet, although they will eventually. Because of this, I think it is important to include a perspective in the work that allows them to find an emotional core that they can relate to not just intellectually. Other than that, I think you should work as hard as you can for your audience, respect them and try to bring the best of your craft to the table. My own personal view is that there’s just good writing and bad writing. All other labels are, at least to me, irrelevant.

Do you think he's right? Are young readers more demanding? Do you agree when he says YA is not a genre as such, but only a matter of including "a perspective" that allows Young Adults to find "an emotional core that they can relate to".

Just let me add as a footnote: many people suspect that the Harry Potter series was as much of a success with adults as with young readers. That says something about YA, doesn't it? The best YA novels happen to be damn good stories well told - and a YA classification adds nothing to that. Or does it? What is your view?

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Genre as a Marketing Tool: Does it really Work?

Barnstar of Harry PotterImage via WikipediaThe publishing industry is battered by the digital revolution - and in particular by the 99 cent e-book that blows to smithereens the economics of traditional publishing - yet everyone holds on to "genre" as the one, major, solid, reliable marketing tool.

Do you think that's reasonable? Do you really read in one single genre or are you like me, the genre-flitting kind, moving from paranormal to historical to romance to whatever, damn it, is a real GOOD story? Please take the poll (top of the right-hand side column) and let me know!

Yet traditional publishers rely on genre classification not only as a basic way to direct book distribution to the "right" shelves in bookstores - because that's what works best in the real world to ensure "discoverability" of a new title - but to track the size of the market. Everybody knows that romance is the biggest selling genre, it generated nearly $1.4 billion in sales in 2009. That's where it's easiest for new writers to break in, that's where the biggest advances are paid (most of the time - but the advance question is another one that needs to be looked at: it has taken a tremendous beating with the digital revolution...).

Genre therefore is an easy-to-use marketing tool: it classifies books and places them in nice little boxes, giving a sense of order. And woe to writers whose works don't fit into a genre: their literary agent may kindly speak of "crossover genre" but s/he knows it means it's going to take twice the effort to sell such a book to publishers. Nobody likes people who rock the boat!

In short, genre makes life simple, it neatly divides up the readers in predictable segments. Thanks to genre, publishers (and literary agents) can track past performance of any given market and predict the future with a fair degree of confidence.

You come to them with a romance, sci-fi, thriller or what not, and they feel they know exactly where they're going with it.

Or do they?

It's easy to blast the publishing industry pointing to all the numerous occasions when a book suddenly made the NYT bestseller list and no one expected it, starting with Rowland's Harry Potter series, going on with the Khaled Hosseini's Kite Runner and ending with Stieg Larsson...Nassim Taleb famously labelled such books as "black swans" - those unexpected events that occur on the low tail of the Bell curve and that statisticians can never predict (mainly because they can't tell you where you happen to be sitting on that Bell curve).

What do all these "unexpected" black swan bestsellers have in common? Adherence to the requirements/features of a given "genre"?

Not at all: they were hard-to-classify, "cross-over genres" at the time they came out. But they had one thing in common: they were all damn good STORIES.

So what made them so superlative?

Is it a question of "voice" (or what used to be called 40 years ago, "writing style") ? Yes, it matters but that's not the whole of it. You could even argue that the writing shows shortcomings. For example, Stieg Larsson's books can be overly long and plodding, and I'm sure you can think up all sorts of writing defects in bestsellers you've read...

So is it the plot, the suspense? Sure, the book has to be a "page-turner". But above all, in my view, a black swan bestseller brings something new on the table: it is always chock full of IDEAS - yes, ideas, things people had never thought of in that particular context. Take the Kite Runner: it opened up new vistas not only on the war in Afghanistan, but on war in general, and on cultural differences that in the end are no differences at all, but merely aspects of the human condition. And I could go on and on about what makes a story really GOOD: relevance to our lives, to the issues that matter to us, to our fears, to our hopes, to everything that makes us up as human beings. The closer to the human condition, the better.

So no wonder readers are titillated, happy!

Do you agree with this analysis? And if so, what should publishers do to improve a book's "discoverability"? Genre works up to a point but it is obviously nothing but a gross tool. Much more is needed, and maybe (what a frightening thought for traditional paper book-lovers), in the virtual world of publishing, you can twist genres so that they become cross-over genre monsters that encompass every possible choice. As Passive Guy so aptly pointed out and I quote him:
Amazon has just begun the process of creating a million genres with its categories – Mystery & Thrillers > Thrillers > Spy Stories & Tales of Intrigue. We’re already beginning to see genre busters and there will be more. Look for Historical > Zombie > Arab > Arthurian > Cookbook

A million genres! Wow, what do you think of that?!