duminică, 30 iunie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


China Manufacturing Conditions Deteriorate, New Export Orders Fall at Fastest Rate Since March 2009

Posted: 30 Jun 2013 08:06 PM PDT

In what should be no surprise to Mish readers, the HSBC China Manufacturing PMI™ shows Operating conditions deteriorate at quickest pace since last September, and new export orders plunge.
Key points

Output contracts for first time since last October
New export orders fall at the joint-fastest rate since March 2009
Job shedding intensified

Manufacturing PMI



After adjusting for seasonal factors, the HSBC Purchasing Managers' Index™ (PMI™) – a composite indicator designed to provide a single-figure snapshot of operating conditions in the manufacturing economy – posted at 48.2 in June, down from 49.2 in May, signalling a modest deterioration of business conditions. Operating conditions have now worsened for two successive months.

Chinese manufacturers signalled a first reduction of output for eight months in June. The rate of contraction was modest, and generally attributed to weaker client demand, as total new orders declined for the second month in a row. New business from abroad also fell in June, with the rate of contraction the fastest since last September, and the joint-sharpest in over four years. Anecdotal evidence suggested that reduced client demand, particularly from Europe and the US, led to fewer new export orders.

Comment

Commenting on the China Manufacturing PMI™ survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: "Falling orders and rising inventories added pressure to Chinese manufacturers in June. And the recent cash crunch in the interbank market is likely to slow expansion of off-balance sheet lending, further exacerbating funding conditions for SMEs. As Beijing refrains from using stimulus, the ongoing growth slowdown is likely to continue in the coming months."
I frequently disagree with Markit economic comments but these comments from Hongbin Qu are spot on.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

Spying Out of Control: NSA Bugs EU Offices, Gathers Routine Info On US Citizens; Is NSA Surveillance Legal? Constitutional?

Posted: 30 Jun 2013 12:13 PM PDT

Just to show how far out of line NSA surveillance has gotten, the US is gathering routine information on US citizens and has also been bugging EU offices.

Der Spiegel reports "Senior European Union officials are outraged by revelations that the US spied on EU representations in Washington and New York. Some have called for a suspension of talks on the trans-Atlantic free trade agreement."

Please consider Spying 'Out of Control': EU Official Questions Trade Negotiations
Europeans are furious. Revelations that the US intelligence service National Security Agency (NSA) targeted the European Union and several European countries with its far-reaching spying activities have led to angry reactions from several senior EU and German politicians.

"We need more precise information," said European Parliament President Martin Schulz. "But if it is true, it is a huge scandal. That would mean a huge burden for relations between the EU and the US. We now demand comprehensive information."

Schulz was reacting to a report in SPIEGEL that the NSA had bugged the EU's diplomatic representation in Washington and monitored its computer network (full story available on Monday). The EU's representation to the United Nations in New York was targeted in a similar manner. US intelligence thus had access to EU email traffic and internal documents. The information appears in secret documents obtained by whistleblower Edward Snowden, some of which SPIEGEL has seen.

The documents also indicate the US intelligence service was responsible for an electronic eavesdropping operation in Brussels. SPIEGEL also reported that Germany has been a significant target of the NSA's global surveillance program, with some 500 million communication connections being monitored every month. The documents show that the NSA is more active in Germany than in any other country in the European Union.

German Justice Minister Sabine Leutheusser-Schnarrenberger, who has been sharply critical of the US since the beginning of the Prism scandal, was furious on Sunday. "If media reports are correct, then it is reminiscent of methods used by enemies during the Cold War," she said in a statement emailed to the media. "It defies belief that our friends in the US see the Europeans as their enemies. There has to finally be an immediate and comprehensive explanation from the US as to whether media reports about completely unacceptable surveillance measures of the US in the EU are true or not. Comprehensive spying on Europeans by Americans cannot be allowed."

Elmar Brok, chairman of the Foreign Affairs Committee in European Parliament added his opprobrium. "The spying has reached dimensions that I didn't think were possible for a democratic country. Such behavior among allies is intolerable." The US, he added, once the land of the free, "is suffering from a security syndrome," added Brok, a member of Chancellor Angela Merkel's conservative Christian Democrats. "They have completely lost all balance. George Orwell is nothing by comparison."

Green Party floor leader in European Parliament Daniel Cohn-Bendit went even further. "A simple note of protest is not enough anymore. The EU must immediately suspend negotiations with the US over a free trade agreement," he said. "First, we need a deal on data protection so that something like this never happens again. Only then can we resume (free-trade) negotiations."

The US has thus far declined to respond to the revelations printed in SPIEGEL. "I can't comment," Deputy National Security Advisor Ben Rhodes told journalists on Saturday in Pretoria, according to the German news agency DPA.
Evidence Overwhelming

The US has not officially acknowledged that fact but nor has the US denied it. But the evidence is overwhelming. "I can't comment". is the best the US can do.

The Financial Times comments on the mess in EU demands answers over claims US bugged its offices
A diplomatic row over communications surveillance deepened as European ministers reacted with disbelief and fury to reports that EU offices were bugged by US intelligence services.

Der Spiegel said it had gained partial access to a NSA document dated 2010, which was obtained by Edward Snowden, the NSA contractor turned whistleblower.

The document revealed the NSA had placed bugs and tapped into internal computer networks at the EU's offices in Washington, as well as at the EU's mission to the UN, according to Der Spiegel. The White House declined to comment.

In Germany, especially, where sensitivities over spying remain acute because of large amounts of snooping conducted before 1989 by the Stasi, the East German secret police, the revelations about extensive US surveillance have caused a political furore.

"It defies all belief that our friends in the US see Europeans as enemies," Ms Leutheusser-Schnarrenberger said. "If EU offices in Brussels and Washington were indeed monitored by US intelligence services, that can hardly be explained with the argument of fighting terrorism."

Although Germany and the US co-operate extensively on intelligence matters, the partnership is not as deep as that between the US and UK. Together with Australia, New Zealand and Canada, the UK enjoys a privileged status. However, Germany is classified as a "third-class" partner.

"We can attack the signals of most foreign third-class partners, and we do it too," Der Spiegel quoted a passage in an NSA document as saying.

Meanwhile, Rafael Correa, Ecuadorean president, said on Sunday that Mr Snowden's fate was in the hands of Russian authorities. The man who first brought the snooping allegations out in the open is thought to still be in a Moscow airport transit zone awaiting news of his asylum request from the South American country.

Legal But Unconstitutional

Washington Post writer Laura K. Donohue, professor at Georgetown University Law Center and director of Georgetown's Center on National Security and the Law, says NSA surveillance may be legal — but it's unconstitutional.
The National Security Agency's recently revealed surveillance programs undermine the purpose of the Foreign Intelligence Surveillance Act, which was established to prevent this kind of overreach. They violate the Fourth Amendment's guarantee against unreasonable search and seizure. And they underscore the dangers of growing executive power.

The intelligence community has a history of overreaching in the name of national security. In the mid-1970s, it came to light that, since the 1940s, the NSA had been collecting international telegraphic traffic from companies, in the process obtaining millions of Americans' telegrams that were unrelated to foreign targets. From 1940 to 1973, the CIA and the FBI engaged in covert mail-opening programs that violated laws prohibiting the interception or opening of mail. The agencies also conducted warrantless "surreptitious entries," breaking into targets' offices and homes to photocopy or steal business records and personal documents. The Army Security Agency intercepted domestic radio communications. And the Army's CONUS program placed more than 100,000 people under surveillance, including lawmakers and civil rights leaders.

After an extensive investigation of the agencies' actions, Congress passed the 1978 Foreign Intelligence Surveillance Act (FISA) to limit sweeping collection of intelligence and create rigorous oversight. But 35 years later, the NSA is using this law and its subsequent amendments as legal grounds to run even more invasive programs than those that gave rise to the statute.

We've learned that in April, the Foreign Intelligence Surveillance Court (FISC) ordered Verizon to provide information on calls made by each subscriber over a three-month period. Over the past seven years, similar orders have been served continuously on AT&T, Sprint and other telecommunications providers.

Another program, PRISM, disclosed by the Guardian and The Washington Post, allows the NSA and the FBI to obtain online data including e-mails, photographs, documents and connection logs. The information that can be assembledabout any one person — much less organizations, social networks and entire communities — is staggering: What we do, think and believe.

To the extent that the FISC sanctioned PRISM, it may be consistent with the law. But it is disingenuous to suggest that millions of Americans' e-mails, photographs and documents are "incidental" to an investigation targeting foreigners overseas.

Congress didn't pass Section 215 to allow for the wholesale collection of information. As Rep. F. James Sensenbrenner Jr. (R-Wis.), who helped draft the statute, wrote in the Guardian: "Congress intended to allow the intelligence communities to access targeted information for specific investigations. How can every call that every American makes or receives be relevant to a specific investigation?"

Illegal And Unconstitutional

New York Times op-ed contributors Jennifer Stisa Granick and Christopher Jon Sprigman make the case that the NSA Actions are both illegal and unconstitutional in their article The Criminal N.S.A.
THE twin revelations that telecom carriers have been secretly giving the National Security Agency information about Americans' phone calls, and that the N.S.A. has been capturing e-mail and other private communications from Internet companies as part of a secret program called Prism, have not enraged most Americans. Lulled, perhaps, by the Obama administration's claims that these "modest encroachments on privacy" were approved by Congress and by federal judges, public opinion quickly migrated from shock to "meh."

 It didn't help that Congressional watchdogs — with a few exceptions, like Senator Rand Paul, Republican of Kentucky — have accepted the White House's claims of legality. The leaders of the Senate Intelligence Committee, Dianne Feinstein, Democrat of California, and Saxby Chambliss, Republican of Georgia, have called the surveillance legal. So have liberal-leaning commentators like Hendrik Hertzberg and David Ignatius.

This view is wrong — and not only, or even mainly, because of the privacy issues raised by the American Civil Liberties Union and other critics. The two programs violate both the letter and the spirit of federal law. No statute explicitly authorizes mass surveillance. Through a series of legal contortions, the Obama administration has argued that Congress, since 9/11, intended to implicitly authorize mass surveillance. But this strategy mostly consists of wordplay, fear-mongering and a highly selective reading of the law. Americans deserve better from the White House — and from President Obama, who has seemingly forgotten the constitutional law he once taught.

 Edward J. Snowden, the former N.S.A. contract employee and whistle-blower, has provided evidence that the government has phone record metadata on all Verizon customers, and probably on every American, going back seven years. This metadata is extremely revealing; investigators mining it might be able to infer whether we have an illness or an addiction, what our religious affiliations and political activities are, and so on.

The law under which the government collected this data, Section 215 of the Patriot Act, allows the F.B.I. to obtain court orders demanding that a person or company produce "tangible things," upon showing reasonable grounds that the things sought are "relevant" to an authorized foreign intelligence investigation. The F.B.I. does not need to demonstrate probable cause that a crime has been committed, or any connection to terrorism.

Even in the fearful time when the Patriot Act was enacted, in October 2001, lawmakers never contemplated that Section 215 would be used for phone metadata, or for mass surveillance of any sort.

Representative F. James Sensenbrenner Jr., a Wisconsin Republican and one of the architects of the Patriot Act, and a man not known as a civil libertarian, has said that "Congress intended to allow the intelligence communities to access targeted information for specific investigations." The N.S.A.'s demand for information about every American's phone calls isn't "targeted" at all — it's a dragnet. "How can every call that every American makes or receives be relevant to a specific investigation?" Mr. Sensenbrenner has asked. The answer is simple: It's not.

 Let's turn to Prism: the streamlined, electronic seizure of communications from Internet companies. In combination with what we have already learned about the N.S.A.'s access to telecommunications and Internet infrastructure, Prism is further proof that the agency is collecting vast amounts of e-mails and other messages — including communications to, from and between Americans.

The government justifies Prism under the FISA Amendments Act of 2008. Section 1881a of the act gave the president broad authority to conduct warrantless electronic surveillance. If the attorney general and the director of national intelligence certify that the purpose of the monitoring is to collect foreign intelligence information about any non­American individual or entity not known to be in the United States, the Foreign Intelligence Surveillance Court can require companies to provide access to Americans' international communications. The court does not approve the target or the facilities to be monitored, nor does it assess whether the government is doing enough to minimize the intrusion, correct for collection mistakes and protect privacy. Once the court issues a surveillance order, the government can issue top-secret directives to Internet companies like Google and Facebook to turn over calls, e-mails, video and voice chats, photos, voice­over IP calls (like Skype) and social networking information.

Leave aside the Patriot Act and FISA Amendments Act for a moment, and turn to the Constitution.

The Fourth Amendment obliges the government to demonstrate probable cause before conducting invasive surveillance. There is simply no precedent under the Constitution for the government's seizing such vast amounts of revealing data on innocent Americans' communications.

 One of the most conservative justices on the Court, Samuel A. Alito Jr., wrote that where even public information about individuals is monitored over the long term, at some point, government crosses a line and must comply with the protections of the Fourth Amendment. That principle is, if anything, even more true for Americans' sensitive nonpublic information like phone metadata and social networking activity.

We may never know all the details of the mass surveillance programs, but we know this: The administration has justified them through abuse of language, intentional evasion of statutory protections, secret, unreviewable investigative procedures and constitutional arguments that make a mockery of the government's professed concern with protecting Americans' privacy. It's time to call the N.S.A.'s mass surveillance programs what they are: criminal.
Criminal is Correct Viewpoint

There is no doubt that actions by the NSA are both illegal and unconstitutional.

Yet, instead of going after the perpetrators of crimes, the US is going after Edward Snowden, the former U.S. intelligence contractor who leaked the documents detailing the illegal surveillance to various news agencies.

Rand Paul on Snowden

Finally, please consider Rand Paul: Clapper Lied, Snowden Told the Truth.
Senator Rand Paul told CNN yesterday that NSA whistleblower Edward Snowden will be historically viewed as a truth teller whereas Obama national security director James Clapper will be judged as a liar for telling Congress that the NSA was not spying on Americans.

"I would say that Mr. Snowden hasn't lied to anyone," Paul told CNN's Candy Crowley. "He did break his oath of office, but part of his oath of office is to the Constitution, and he believes that, when James Clapper came in March, our national director of intelligence came and lied, that he [Snowden] was simply coming forward and telling the truth that your government was lying. This is a big concern of mine, because it makes me doubt the administration and their word to us when they talk to us, because they have now admitted they will lie to us if they think it is in the name of national security."

Paul is referring to Clapper's March testimony in front of the Senate intelligence committee, during which he claimed that the National Security Agency did "not wittingly" collect data on Americans' communications.

Following Snowden's revelations about the PRISM program, Clapper tried to clarify his remarks by stating, "I responded in what I thought was the most truthful, or least untruthful, manner by saying 'no.'"

"Mr Clapper lied in Congress in defiance of the law in the name of security – Mr. Snowden told the truth in the name of privacy, so I think there will be a judgment because both of them broke the law and history will have to determine," added Paul.
So, who is the criminal here, and who is the hero? One is wanted on charges of treason, the other is not wanted or charged with anything.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Damn Cool Pics


Top 10 Reasons for Online Video [Infographic]

Posted: 29 Jun 2013 08:34 PM PDT

Video can seem like an engaging way to drive visitors to your site and keep them there, but is there good evidence that this is really the case? Why should site owners make an effort to include video?

Click on Image to Enlarge.

Via: www.mindboxproductions.com

5 Ways to Spruce up Your Walls Without Paint! [Infographic]

Posted: 29 Jun 2013 08:32 PM PDT

Want to add a little something extra to your walls without using paint? Maybe you're pressed for time. Maybe painting is too expensive. Maybe you're a renter. Maybe it's just too messy. Whatever your reasons for avoiding paint, here are some tips to make your walls fabulous!

Click on Image to Enlarge.

Via: Wall Decal World

Seth's Blog : Thinking about money

 

Thinking about money

Many marketers work overtime to confuse us about money. They take advantage of our misunderstanding of the time value of money, of our aversion to reading the fine print, of our childish need for instant gratification and most of all, our conflicted emotional connection to money.

Confusing customers about money can be quite profitable if that's the sort of work you're willing to do.

A few things to keep in mind:

  1. The amount of money you have has nothing to do with whether or not you're a good person. Being good with money is a little like being good with cards. People who are good at playing cards aren't better or worse than anyone else, they're just better at playing crazy eights.
  2. Money spent on one thing is still the same as money spent on something else. A $500 needless fee on a million-dollar mortgage closing is just as much money as a $500 tip at McDonalds.
  3. If you borrow money to make money, you've done something magical. On the other hand, if you go into debt to pay your bills or buy something you want but don't need, you've done something stupid. Stupid and short-sighted and ultimately life-changing for the worse.
  4. To go along with #3: getting out of debt as fast as you possibly can is the smartest thing you can do with your money. If you need proof to confirm this, ask anyone with money to show you the math. Hint: credit card companies make more profit than just about any other companies in the world.
  5. There's no difference (in terms of the money you have) between spending money and not earning money, no difference between not-spending money and getting a raise (actually, because of taxes, you're even better off not-spending). If you've got cable TV and a cell phone, you're spending $4,000 a year. $6,000 before taxes.
  6. If money is an emotional issue for you, you've just put your finger on a big part of the problem. No one who is good at building houses has an emotional problem with hammers. Place your emotional problems where they belong, and focus on seeing money as a tool.
  7. Like many important, professional endeavors, money has its own vocabulary. It won't take you long to learn what opportunity cost, investment, debt, leverage, basis points and sunk costs mean, but it'll be worth your time.
  8. Never sign a contract or make an investment that you don't understand at least as well as the person on the other side of the transaction.
  9. If you've got a job, a steady day job, now's the time to figure out a way to earn extra income in your spare time. Freelancing, selling items on Etsy, building a side business--two hundred extra dollars every week for the next twenty years can create peace of mind for a lifetime.
  10. The chances that a small-time investor will get lucky by timing the stock market or with other opaque investments are slim, fat and none.
  11. The way you feel about giving money to good causes has a lot to do with the way you feel about money.
  12. Don't get caught confusing money with security. There are lots of ways to build a life that's more secure, starting with the stories you tell yourself, the people you surround yourself with and the cost of living you embrace. Money is one way to feel more secure, but money alone won't deliver this.
  13. Rich guys busted for insider trading weren't risking everything to make more money for the security that money can bring. In fact, the very opposite is starkly shown here. The insatiable need for more money is directly (and ironically) related to not being clear about what will ultimately bring security. Like many on this path, now they have neither money nor security.
  14. In our culture, making more money feels like winning, and winning feels like the point.
  15. Within very wide bands, more money doesn't make people happier. Learning how to think about money, though, usually does.
  16. In the long run, doing work that's important leads to more happiness than doing work that's merely profitable.
 
     

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sâmbătă, 29 iunie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Bill Gross Discusses the "Tipping Point" For Bonds; Does He Miss the Boat?

Posted: 29 Jun 2013 10:23 AM PDT

Bill Gross did not see this major selloff in bonds coming. He discusses the setup in his recent Investment Outlook called The Tipping Point.

Much of the article is about how he almost tipped a ship while in the Navy. He uses the tipped ship metaphor to talk about the position in bonds.

Gross says "Markets just had too much risk, and in PIMCO's opinion, too much hope for a constant QE and for the growth that it would produce. In effect, the ship was top heavy with too little ballast. Guess I should have known, huh?"

That's water over the dam at this point so the question Gross asks now is "Well where does the ship go from here?"

Here is a snip of Gross' explanation.

Should you as a bond investor jump overboard and risk the cold money market Atlantic Ocean at near zero degrees? We don't think so – and not because we want to keep you on board – we just don't think so. Why not?

1) The Fed's forecast of the economy which prompted tapering panic is far too optimistic. If 7% unemployment is tapering's final port of call, we simply think that we're much further away than the Fed's compass would suggest. We argue for structural headwinds – demographic, globalization, and technology influences – that have had and will continue to have dampening effects on domestic and global growth. The Fed, we would argue, is too cyclically oriented, focusing substantially on housing prices and car sales. And speaking of housing, since mortgage rates have risen by 1½% in the last six months and the average monthly check for a new home buyer is up by 20–25% as well, then as I tweeted several weeks ago, "Mr. Chairman are you serious?" Growth will be negatively influenced.

2) Inflation, according to the Fed's own statistics is running close to a 1% pace. The Fed has told us that they "target," " target" 2% and for the next 1–2 years are willing to accept even 2½% until they reverse engines. Fed Governor Bullard of the St. Louis Fed was in our opinion correct where he dissented from the majority decision several weeks ago, citing the distant shores of 2%+ inflation and the seeming inability to even move in that direction. 

3) Yields have adjusted by too much. While T.V. and the press focus on 10-year Treasuries at 2.55% as their guiding star, subjective stabs by yours truly or anyone else are difficult day to day. ... To my eye, Fed Funds will not increase until at least mid-2015 and even then subject to a consistently strong economy that produces 2%+ inflation. I wonder if we can get there in this decade to tell you the truth. But the beauty of this North Star Fed Funds sextant is that it can be rather directly observed in futures markets, either for Fed Funds or for Eurodollars, which are a close companion. Right now, Fed Funds futures markets are predicting a 75 basis point yield in 2015, and Eurodollars validating a similar conclusion. That would suggest a mispricing, despite the obvious caveat of professional observers that some of the 75 is a surcharge for potential volatility. In any case, if frontend curves are up to 50 basis points cheap, then intermediate curves – the 10-year Treasury – may be as much as 35 basis points too cheap. They belong in our opinion at 2.20% instead of 2.55%.

So there you have it, fellow passengers and paying clients. Don't jump ship now. We may have reached an inflection point of low Treasury, mortgage and corporate yields in late April, but this is overdone.

Emphasis by Bill Gross

A Tipping Point That Won't Tip

Gross' message is clearly "the ship has reached a tipping point but don't worry, the ship won't tip". Let's discuss each of Gross' three main points.

1) "The Fed's forecast is far too optimistic".

I certainly agree with Gross that the Fed (and almost everyone else) is overly optimistic.

But what if growth is not the Fed's only concern? What if the Fed is concerned about the bubbles it has blown in stocks and bonds? What if the Fed is concerned about renewed speculation in housing?

Perhaps that scenario far-fetched, perhaps not, but at least some Fed governors have those concerns.

2) "The Fed's inflation target is 2%"

OK, the Bernanke Fed has an inflation target of 2%.  But Bernanke will soon be gone. Will the next Fed have the same target? Any target? Given that Janet Yellen is likely the next Fed Chairperson, it is likely but not a given.

And how does one measure inflation? Will the Fed ignore housing like it did between 2002 and 2007? Will it at all look at brewing bubbles?

3) "Yields have adjusted too much"

Have they? Let's assume that Gross is correct.

Gross emphasizes the yield on a 10-year note belongs at "2.20% instead of 2.55%".

Lovely! Let's once again assume Gross is right. The upside is 35 basis points. And what is the downside if Gross is wrong?

Is this what things have come to? That's it's necessary to speculate on a gain of 35 basis points because that is fair value? And where was Gross on "fair value" when the yield was 1.5%?

If it is correct to play for 35 basis points now, why was he in bonds when the yield was 70 basis points too low? Can you have this both ways?

And why is this suddenly a "3–5% for both stocks and bonds" when he tweeted "@PIMCO The secular 30-yr bull market in bonds likely ended 4/29/2013. PIMCO can help you navigate a likely lower return 2 - 3% future."

So, is this a 3-5% world or a 2-3% world?

Questions abound and answers are few.

I actually suspect Gross may have this correct, but what is the risk-reward if he is wrong? What if the bond revolt continues? What if the Fed has lost control? That's what Gross does not discuss, and that's where he missed the boat.

For further discussion, please see Calmer Waters for the Bond Market? Gold? Worst Over?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

FHA Swamped By Defaults; Congressional Report Shows FHA Could Suffer Losses as High as $115 Billion; Shut Down Fannie, Freddie, FHA

Posted: 28 Jun 2013 11:21 PM PDT

An alleged "worst case scenario" shows the FHA could lose as much as $115 Billion. Since these worst case scenarios are always famously optimistic, the best course of action would be to shut the agency down.

I was quoted as saying just that by the Heartland in Congressional Report Raises Spectre of FHA Bailout.
The Federal Housing Administration's (FHA) losses over the next 30 years could be much higher than originally projected, according to the findings of a congressional committee. The dismal forecast has some bracing for another taxpayer-financed bailout.

The House Oversight and Government Reform Committee, chaired by Rep. Darrell Issa (R-Calif.) is reporting that a worst-case scenario stress test conducted last year estimated the FHA could suffer losses as high as $115 billion. That forecast is significantly worse than the one reported by independent auditor Integrated Financial Engineering Inc., which projected losses of $65 billion for the 79-year old agency.

Swamped by Defaults

The primary cause of the FHA's troubles is the plague of underwater mortgages that has struck the housing sector in recent years. During the late housing bubble, the FHA lost market share as more private lenders sold "subprime" loans to home buyers. But with the collapse of the housing market in 2007-08, much of that business returned to the FHA. While the agency has played a major role in propping up home prices, it has also been overwhelmed by defaults.

John Ligon, senior policy analyst at the conservative Heritage Foundation, writes:

The FHA has a core mission of providing targeted support to creditworthy low- and moderate-income, minority, and first-time homebuyers. The FHA cannot responsibly achieve these intended objectives when it is expanding its market share and competing with the conventional market for high-cost mortgage loans.

According to Ligon, the only way the FHA can avoid a bailout is to reduce its market share by lowering maximum loan limits to $325,000 over the next four years, raise credit requirements for borrowers, and institute "burden sharing" with loan originators by reducing insurance coverage from the current 100 percent to 50 percent by 2016.

While these reforms may improve FHA's balance sheet over the long term, they would also reduce market liquidity, which in turn could cause home prices to fall. Thus homeowners with little home equity now could find themselves underwater on their mortgages, which could trigger more defaults.

But it is precisely this apparent dilemma that government-sponsored enterprises like FHA have created with their meddling into the market that has some calling for a more radical approach.

'Shut Down Fannie, Freddie, FHA'

"I would shut down Fannie Mae, Freddie Mac, the FHA, HUD, and such similar programs and agencies," says Mike "Mish" Shedlock, a market analyst and host of the Web site Mish's Global Economic Trend Analysis. "The more money government threw at housing, the less affordable housing became until the bubble popped."

He says numerous government agencies and programs "should be shut down and things would be far better off because government can never allocate money better than the free market."
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Using The New Adwords Keyword Planner For Local SEO Keyword Research

Using The New Adwords Keyword Planner For Local SEO Keyword Research


Using The New Adwords Keyword Planner For Local SEO Keyword Research

Posted: 28 Jun 2013 05:57 AM PDT

Posted by Casey_Meraz

Let's face it. Local keywords research has never been that easy since the Venice update. While we have always been able to use the Google Keyword Tool to find out search volumes for keywords with Geo Modifiers such as "City Name + Keyword" we have been lacking some reasonable data regarding keywords that do not already have a Geo Modifier.

My frustration has always been this: So what if Google tells me there are 12,100 searches for "Personal Injury Lawyer"? My client is in a local city and I want to know how many people in his city are searching for his services. The good news is that there is now an adequate solution to this problem we have long been plagued by.

Let me introduce you to the Google AdWords Keyword Planner. This new tool combines the data from the Keyword Tool and Traffic Estimator which are nowbeing replaced by this nifty piece of software. The good news is that this data that we were previously lacking is now available in this great tool! So let's dive into a practical exercise of how to get this data.

Start with some good local keyword data

Before you start, make sure you are setup for success by doing some preliminary keyword research in your niche. While the Google Adwords Keyword Planner is a great tool by itself, you can generate even more ideas for keyword variants by using a few tools already available. I prefer to use:

  • Mike Blumenthal's Category Tool - To get some ideas on locally based keyword categories and synonyms
  • Local Marketing Source's Keyword Research Tool - This will help you get an idea of surrounding areas you want to focus on
  • Google Analytics - Check your analytics and see what keywords are already bringing traffic. There may be opportunities to increase your visibility on something that's already preforming.

Using these tools and collecting some good data up front will make the process more laser focused. Make sure that you always focus on converting keywords that provide the searcher (and then website visitor) with the proper intent.

So how do you use this fancy new tool? Let's get started!

Before you get started make sure you have a Google Account because to access the planner you will need to be logged in. Once you are logged in simply visit the Google AdWords Keyword Planner here.

Google Keyword Planner Intro Screen

Step 1: Log in and input your keywords

Start by logging into the Google Adwords Keyword Planner and select the option "Search for keyword and add group ideas." In this box you should put the variants you typically might use for your industry. For example, if you're a personal injury lawyer, you could put in variants related to your practice area including:

  • Personal Injury Lawyer
  • Personal Injury Attorneys
  • Car Accident Lawyers
  • Auto Accident Lawyer

This is also a good place to put in the keywords you found in your preliminary research.

Put your keywords in this box

Step 2: Remove the country targeting

This is where it starts to get real cool! Using this new tool you can see the search volumes for your keywords in certain geographic areas. By default, you will likely see your country in the list. To use this tool to its full potential for a city, you will want to click on the country name under targeting and select the remove option.

Remove the country

Pro Tip: If you don't remove the country as mentioned above you will find that your searches will also combine the data from the entire country which defeats the purpose.

Step 3: Add your first city or cities

Since we are using this for local keyword research, we want to find out how many people in our city or surrounding areas are searching for our keywords. Under the targeting area, make sure to add the cities you want to focus on. As a general rule of thumb, the larger cities with higher populations will generate more results for your keywords. Where there are more devices, there are more searches.

How to add your cities in Google Keyword Planning Tool

Pro tip: Keep in mind that this tool is using actual city boundaries defined in Google Maps. Getting to visualize this data will show you if you need to add more cities, etc.

Google Cities Visualization in the Google Keyword Planning Tool

But what if you want to target surrounding areas?
Using this new tool, Google also integrated the "Surrounding Areas" option which allows you to add surrounding cities and also visualize the data. To access this information simply click the "Surrounding Areas" option. As you will see below it will come up with some recommendations, but also allow you to add your own information including "a country, city, or region."

Surrounding Areas in Google Keyword Planning Tool

Step Four: Get Ideas & See Exact Matches

After you have inputted your keywords and selected the cities you want to target, hit the "Get Ideas" button at the bottom to be taken to the results page. If this is done correctly, it should display the areas that you're targeting on the left side of the screen. To see the exact keywords you entered, make sure to select the Keyword Idea's tab in the top middle. By default, it will likely show the "Ad Group Ideas" tab. Typically, I will also select the exact match option as seen below.

Keyword Ideas Results from Google Keyword Planning Tool

Just like the old Google Keyword Tool, you can also scroll below the keywords you input and have access to other keywords that Google believes is relevant to your search term. Of course, the more work you put into finding initial results, the better the results will be.

Other Keyword Results also show as normal

How Can You Use This Data?

There are many great ways you can use this data, but I'll point out a couple that are important to me. For starters, you can now provide clients with accurate information on the searches for their business that are happening in the area they service. You can target your campaign towards cities where you know search volumes already exist and scoop up the business. Another thing you can do is start developing strong content marketing strategies to provide great information on the web and reach potential customers through long tail searches. If you looked on in horror when you saw the low volumes for these searches, it's important to remember that all searchers are different. This is where a long tail strategy comes into play. Put yourself in other's shoes and create content that actual customers would want.

Overall, the good news is that the days of not knowing where geographic searches are coming from are at an end. I give Google props for making this tool available for use and I'm looking forward to see what they will be releasing in the future.


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Confronting the Growing Threat of Climate Change

Here's What's Happening Here at the White House
 
 
 
 
 
 
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Confronting the Growing Threat of Climate Change

In this week’s address, President Obama told the American people about a plan he unveiled a few days ago that confronts the growing threat of climate change, which will cut carbon pollution, protect our country from the impacts of climate change, and lead the world in a coordinated assault on a changing climate.

Watch this week's Weekly Address.

In this week’s address, President Obama told the American people about a plan he unveiled a few days ago that confronts the growing threat of climate change, which will cut carbon pollution, protect our country from the impacts of climate change, and lead the world in a coordinated assault on a changing climate.

 
 
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Watch the West Wing Week here.

Meeting with Business Leaders: President Obama met with CEOs, business owners and entrepreneurs on Monday to discuss the economic benefits of comprehensive immigration reform. “We have a situation in which millions of individuals are in the shadow economy,” President Obama said, “oftentimes exploited at lower wages, and that hurts those companies that are following the rules, because they end up being at a disadvantage to some of these less scrupulous companies.”

On Thursday, a bipartisan group of Senators voted to reform our nation’s immigration system. Although the Senate approved the bill, lawmakers in the House of Representatives still need to act.

Texting with the President: Students from all across the country sent texts to President Obama this week, asking about his plans to keep interest rates on student loans from doubling in July. Working with DoSomething.org, President Obama responded to concerns from these students.

Curbing Climate Change: On Tuesday, President Obama traveled across town to Georgetown University to lay out his plan to cut carbon pollution. The President explained the moral obligation we have to future generations – to “leave them a cleaner, safer, more stable world.”

Leaders in the business community and the media support the President’s climate initiative. Check out an infographic explaining the President’s plan here.

Marriage Equality: The Supreme Court announced a historic ruling on Wednesday morning, ruling the Defense of Marriage Act unconstitutional. “This ruling is a victory for couples who have long fought for equal treatment under the law,” President Obama said, “for children whose parents’ marriages will now be recognized, rightly, as legitimate; for families that, at long last will get the respect and protection they deserve; and for friends and supporters who have wanted nothing more than to see their loved ones treated fairly and have worked hard to persuade their nation to change for the better.”

Three Country Tour: The First Family boarded Air Force One on Wednesday, beginning their three-country tour of Africa. As they took off, we launched Instagram accounts for the First Lady and the White House.

First stop – Senegal. Following an arrival ceremony and bilateral meeting with President Sall, the Presidents held a press conference. Later, President Obama discussed the importance of an independent judiciary system and respect for the rule of law in a meeting with judicial leaders across Africa.

While the President was meeting with President Sall, First Lady Michelle Obama visited an all-girls middle school in Dakar, Martin Luther King School. At MLK School, the First Lady spoke with a ninth grade class where she encouraged them to continue studying and to be role models for girls all over the world.

After the President met with leaders, the First Family visited a former slave house at Gorée Island. Gorée Island now serves as a hub for political activists – and President Obama acknowledged that by meeting with a group of advocates before returning to Dakar, the country’s capital.

 

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