Mish's Global Economic Trend Analysis

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Japan GDP Plunges 6.8%, Consumption Down 19.2%, Private Investment Down 9.7% Posted: 12 Aug 2014 09:22 PM PDT In the wake of an inane sales tax hike Japan's GDP Shrinks 6.8%, Most Since 2011 Gross domestic product shrank an annualized 6.8 percent in the three months through June, the Cabinet Office said. That was less than the median estimate of 37 economists surveyed by Bloomberg News for a 7 percent drop. Unadjusted for price changes, GDP declined 0.4 percent. "The probability is high that the July-September quarter will see a rebound," said Takeshi Minami, chief economist at Norinchukin Research Institute Co. in Tokyo. "But the fall in real incomes and weakness in production could weigh on the recovery." The contraction followed a surge in growth in the three months through March when consumers and companies rushed to make purchases before the tax rose. Abe is striving to sustain a recovery after initial success in fighting off two decades of economic stagnation. Household consumption plummeted at an annualized pace of 19.2 percent from the previous quarter, while private investment sank 9.7 percent, highlighting the damage to demand by the 3 percentage point increase in the levy. The higher sales tax hit consumers who've seen little growth in incomes and rising costs of living as the Bank of Japan stokes inflation with unprecedented easing. Consumer prices rose 3.6 percent in June from a year earlier -- nine times the increase in total cash earnings -- with food prices climbing 5.1 percent. Imports tumbled an annualized 20.5 percent while exports fell 1.8 percent. That's sapping the manufacturing sector and shows the yen's 16 percent drop against the dollar over Abe's term has yet to drive outbound shipments. The windfall in corporate profits that the weaker yen delivered to many Japanese manufacturers last year also shows signs of fading. "Price increases are spreading," said Koya Miyamae, senior economist at SMBC Nikko Securities Inc. in Tokyo. "It's highly likely the government will declare Japan is out of deflation this year before making a decision on the next sales-tax hike." Hooray!  Prices are up 3.6% (nine times earnings), spending is down, exports are down,  corporate profits fading, food prices up 5.1%. but other than that, Abenomics is a glowing success. Please look on the bright side: Japanese consumers have to pay more for goods than their salaries  have gone up. As idiotic as that sounds, it is exactly what Japan wants, until this blows up in Japan's face. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

First-Time Home Buyer Dilemma: Overpay or Be Shut Out; Home "Ownership" Slavery Posted: 12 Aug 2014 11:57 AM PDT Supply of homes at the bottom-third of the market is down 17 percent from a year ago. Meanwhile the top-third home supply is up 15 percent while the middle is up a modest 3 percent according to Redfin. The bottom third is anything priced below $198,000. But $150,000 or $200,000 does not buy in terms of size and location what it did just a few years ago. Overpay or Be Shut Out So once again, first-time buyers face the question "overpay or be shut out?" And once again it appears many make a very poor choice. Bloomberg has some examples in First-Time Buyers Shut Out of Expanding U.S. Home Supply. The four-bedroom house that Ilia Nielsen-Dembe purchased in west Denver earlier this year wasn't her top choice. The first-time buyer had to settle on a home in a neighborhood with a high crime rate after losing out on bids for five properties in more desirable areas. "I definitely sacrificed in terms of location," said Nielsen-Dembe, 33, who lives with her husband and two daughters in the house she bought in April for $184,500. "I had to cross streets that were not ideal in order to get a house." In Denver, entry-level listings in June were down 51 percent from a year earlier, while the upper-end supply was up 4 percent, according to Redfin. Austin, Texas, inventory jumped 14 percent in the top third of the market and fell 34 percent at the bottom. In Atlanta, where Wall Street-backed investors descended to buy homes to turn into rentals, low-end supply declined 13 percent. Top-third listings rose 18 percent. Sharlene Hensrud, a Realtor with Re/Max Results in Plymouth, Minnesota, said buyers of cheaper homes have had to adjust expectations because the bargains have been picked over. She recently took a couple on a tour of homes for about $140,000 and said they were quickly discouraged that a one-bedroom, one-bath house with no garage was all they could afford. A few years ago, a three-bedroom property would have been in their range, Hensrud said. Some properties aren't available because homebuyers are taking advantage of the strong rental market and leasing out their previous homes. Others who want to list their houses can't. Owners of inexpensive houses are three times more likely than those with costly homes to owe more than their property is worth, according to Zillow (Z) Inc. About a third of mortgaged homes in the bottom price tier were in negative equity in the first quarter, compared with 18 percent in the middle and 11 percent at the top, Zillow data show. New Homes First-time purchasers accounted for 28 percent of all sales of previously owned homes in June, down from about 40 percent historically, according to NAR. The contrast is starker in the new-housing market, where homebuilders are focusing on move-up buyers. In May, homebuilders reported that only 16 percent of new-home purchases were made by first-time buyers, the lowest in 15 years of data, according to David Crowe, chief economist for the Washington-based National Association of Homebuilders. That's further limiting supply as builders shift away from constructing entry-level homes. Tight credit has made it more difficult for young buyers, who have relatively high unemployment, weak wage growth and lower credit scores, Crowe said. Nielsen-Dembe, a nursing assistant who took on two full-time jobs to qualify for her mortgage, said she wanted to buy because she was tired of the relatively high costs of renting. She expected getting financing to be her biggest challenge. Instead, she struggled with finding a single-family home in her price range. It took six months because of heated competition. Three of the houses she bid on went instead to cash buyers. Sleep Math Nielsen-Dembe took on two full-time jobs to buy a home in a high-crime neighborhood, admitting "I had to cross streets that were not ideal in order to get a house." If those are 8-hours-a-day jobs, assuming a half-hour commute each way to one of the jobs, no commute to the other job, and a 1 hour lunch break for each job, on many days, she will get to spend a mere 5 hours a day in the house, to sleep.  If those are 7-hours-a-day jobs,  she will get 7 hours of sleep. Is this owning a home or being slave to the home? Questions What happens if you lose one of those two jobs? What happens if prices tumble again? Will you be able to sell and move? Or will you be stuck in a bad neighborhood like others who are underwater, hoping to one day list their house for what they paid? Is free time worth nothing? Unfortunately, such questions are far too late for Nielsen-Dembe. They are not too late for others facing the dilemma "Overpay or Be Shut Out?" It's Already Too Late If you face the overpay question, especially for homes in undesirable neighborhoods, please consider "It's Too Late" before you act. There really is no dilemma, is there? Rather, we see the same "act now before it's too late" mentality taking hold. For many, I suspect this will end similar to how it ended the last time. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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Damn Cool Pics

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• These People Will Only Make One Trip
• Hilarious Babysitter Photoshops
• The Cast Of Friends In The First And Last Episode
• Zahia Dehar Wears The Tightest Dress

These People Will Only Make One Trip Posted: 12 Aug 2014 05:48 PM PDT There's no way these people are going to make more than one trip, it's just not going to happen.

Hilarious Babysitter Photoshops Posted: 12 Aug 2014 05:39 PM PDT When you're getting chased by a T-Rex while babysitting you really have to wonder if it's worth the money.

The Cast Of Friends In The First And Last Episode Posted: 12 Aug 2014 03:59 PM PDT A whole lot can change over the course of a few seasons.

Zahia Dehar Wears The Tightest Dress Posted: 12 Aug 2014 03:55 PM PDT The dress that Zahia Dehar might even be a little too tight, but we're not complaining.

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The Latest Developments in Iraq

Here's what's going on at the White House today.         DAILY SNAPSHOT Tuesday, August 12, 2014             Featured The Latest Developments in Iraq Yesterday afternoon, President Obama gave an update about the situation in Iraq. He noted that U.S. forces have "successfully conducted targeted airstrikes to prevent terrorist forces from advancing on the city of Erbil, and to protect American civilians there." He also addressed our ongoing humanitarian efforts to help those who are stranded on Mount Sinjar, adding that we've deployed a USAID Disaster Assistance Response Team to help. The President reiterated that "the only lasting solution is for Iraqis to come together and form an inclusive government," and highlighted important steps Iraq is taking in that effort. Watch President Obama's full statement here:       Top Stories President Obama on the Passing of Robin Williams: "He Was One of a Kind" President Obama released a statement following the passing of legendary stand-up comedian and actor Robin Williams: "He made us laugh. He made us cry. He gave his immeasurable talent freely and generously to those who needed it most." READ MORE Delivering a Customer-Focused Government Through Smarter IT Yesterday, the Administration launched the U.S. Digital Service -- a small team made up of our country's brightest digital talent. They will work with agencies to remove barriers to exceptional service delivery and help remake the digital experience that people and businesses have with their government. READ MORE Airstrikes in Iraq: What You Need to Know The President takes no decision more seriously than the use of military force. So it's worth taking a few minutes to make sure you understand exactly what is happening in Iraq right now, who is involved, and why we are taking action. READ MORE   Facebook     Twitter    |   More Ways to Engage Did Someone Forward This to You? Sign Up for Email Updates This email was sent to e0nstar1.blog@gmail.com Unsubscribe | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Experiment: We Removed a Major Website from Google Search, for Science!

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Experiment: We Removed a Major Website from Google Search, for Science! Posted: 11 Aug 2014 05:08 PM PDT Posted by Cyrus-Shepard The folks at Groupon surprised us earlier this summer when they reported the results of an experiment that showed that up to 60% of direct traffic is organic. In order to accomplish this, Groupon de-indexed their site, effectively removing themselves from Google search results. That's crazy talk! Of course, we knew we had to try this ourselves. We rolled up our sleeves and chose to de-index Followerwonk, both for its consistent Google traffic and its good analytics setup—that way we could properly measure everything. We were also confident we could quickly bring the site back into Google's results, which minimized the business risks. (We discussed de-indexing our main site moz.com, but... no soup for you!) We wanted to measure and test several things: How quickly will Google remove a site from its index? How much of our organic traffic is actually attributed as direct traffic? How quickly can you bring a site back into search results using the URL removal tool? Here's what happened. How to completely remove a site from Google The fastest, simplest, and most direct method to completely remove an entire site from Google search results is by using the URL removal tool.  CAUTION: Removing any URLs from a search index is potentially very dangerous, and should be taken very seriously. Do not try this at home; you will not pass go, and will not collect $200! After submitting the request, Followerwonk URLs started disappearing from Google search results in 2-3 hours.  The information needs to propagate across different data centers across the globe, so the effect can be delayed in areas. In fact, for the entire duration of the test, organic Google traffic continued to trickle in and never dropped to zero. The effect on direct vs. organic traffic In the Groupon experiment, they found that when they lost organic traffic, they actually lost a bunch of direct traffic as well. The Groupon conclusion was that a large amount of their direct traffic was actually organic—up to 60% on "long URLs". At first glance, the overall amount of direct traffic to Followerwonk didn't change significantly, even when organic traffic dropped. In fact, we could find no discrepancy in direct traffic outside the expected range. I ran this by our contacts at Groupon, who said this wasn't totally unexpected. You see, in their experiment they saw the biggest drop in direct traffic on long URLs, defined as a URL that is at least as long enough to be in a subfolder, like https://followerwonk.com/bio/?q=content+marketer. For Followerwonk, the vast majority of traffic goes to the homepage and a handful of other URLs. This means we didn't have a statistically significant sample size of long URLs to judge the effect. For the long URLs we were able to measure, the results were nebulous.  Conclusion: While we can't confirm the Groupon results with our outcome, we can't discount them either. It's quite likely that a portion of your organic traffic is attributed as direct. This is because of different browsers, operating systems and user privacy settings can potentially block referral information from reaching your website. Bringing your site back from death After waiting 2 hours, we deleted the request. Within a few hours all traffic returned to normal. Whew! Does Google need to recrawl the pages? If the time period is short enough, and you used the URL removal tool, apparently not. In the case of Followerwonk, Google removed over 300,000 URLs from its search results, and made them all reappear in mere hours. This suggests that the domain wasn't completely removed from Google's index, but only "masked" from appearing for a short period of time. What about longer periods of de-indexation? In both the Groupon and Followerwonk experiments, the sites were only de-indexed for a short period of time, and bounced back quickly. We wanted to find out what would happen if you de-indexed a site for a longer period, like two and a half days? I couldn't convince the team to remove any of our sites from Google search results for a few days, so I choose a smaller personal site that I often subject to merciless SEO experiments. In this case, I de-indexed the site and didn't remove the request until three days later. Even with this longer period, all URLs returned within just a few hours of cancelling the URL removal request. In the chart below, we revoked the URL removal request on Friday the 25th. The next two days were Saturday and Sunday, both lower traffic days. Test #2: De-index a personal site for 3 days Likely, the URLs were still in Google's index, so we didn't have to wait for them to be recrawled.  Here's another shot of organic traffic before and after the second experiment. For longer removal periods, a few weeks for example, I speculate Google might drop these semi-permanently from the index and re-inclusion would comprise a much longer time period. What we learned While a portion of your organic traffic may be attributed as direct (due to browsers, privacy settings, etc) in our case the effect on direct traffic was negligible. If you accidentally de-index your site using Google Webmaster Tools, in most cases you can quickly bring it back to life by deleting the request. Reinclusion happens quickly even after we removed a site for over 2 days. Longer than this, the result is unknown, and you could have problems getting all the pages of your site indexed again. Further reading Moz community member Adina Toma wrote an excellent YouMoz post on the re-inclusion process using the same technique, with some excellent tips for other, more extreme situations. Big thanks to Peter Bray for volunteering Followerwonk for testing. You are a brave man! Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

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