luni, 28 noiembrie 2011

What Every SEO Should Know About IIS

What Every SEO Should Know About IIS


What Every SEO Should Know About IIS

Posted: 27 Nov 2011 01:47 PM PST

Posted by Dave Sottimano

IIS Server through the eyes of an SEO

Disclaimer: This post is long and technical, but has been lovingly paraphrased for the benefit of non-technical SEOs to get involved and step out of their comfort zone. Recently, I’ve had to deal with sites running on IIS and rather than just prescribing universal SEO fixes, I decided to get my hands really, really dirty. This is what I’ve learned…

In this post: (Use the navigation links, trust me!)

  1. Brief explanation of what IIS is
  2. Why SEOs should care about IIS
  3. How to get a free, super powerful crawler – You need Windows 7
  4. IIS "out of the box SEO faults" you need to know about
  5. The Chaining 301 disease and a way to fix it
  6. Interview / SEO Resource guide for IIS 7+ - with Mark Ridley
  7. Possible sexual attraction to Microsoft products
 

Internet Information Services (IIS) is the second most popular web server in the world to Apache. IIS’s first big gig was in 1995 and still continues to power a massive portion of the internet today. Read more about Microsoft's history on the web

 
  • You’ll likely have a client sooner or later that uses IIS
  • There are some common SEO faults with IIS that you need to know
  • Fixing those default "faults" can significantly improve the site's SEO
  • You need to understand how this beast works before you say “301” or “clean URL”
  • I will show you how to get a free kickass crawler – You need Windows 7 on your machine
  • If you can speak IIS, those super smart developers will instantly warm up to you
  • IIS popularity is growing (see image below)

IIS trends

IIS isn’t going anywhere, in fact it’s growing. Whether you appreciate Microsoft products or not, there are many that do and there’s no doubt that you’ll likely have to consult a client running IIS.

 

Requirements: Windows 7 (automatically comes with IIS 7.5)Sorry Mac! – muhahaha
How: IIS server & SEO toolkit on your Windows 7 machine
Why: It’s frickin incredible – It will make your SEO life much much easier.
Difficulty: Easy
Estimated Completion time: 5-7 minutes

 

Why it's so cool!

Watch this video, and tell me you DON'T need this beast :)

  • Reports on content, SEO and other violations. Tells you how to fix it in plain english
  • You can add your own custom violations
  • Fully functional database of what's going on with your site
  • Tons and tons of custom reporting, including mapping navigation paths
  • Find orphaned pages from Sitemap
  • And much much more. You expected that right :)

 

We can get you up and running in 10 minutes (minimum requirements): follow these instructions– this is EASY.

First, install IIS Server

  1. Start > Settings > Control Panel
  2. Programs & Features
  3. Click on "Turn Windows Features on/off"
  4. Find the Internet Information Services folder, expand it
  5. Expand the Web Management tools folder
  6. Make sure IIS Management Console is checked, click OK

Next, the IIS toolkit - Post here with screenshots

  1. Download the IIS Web Platform Installer, and install it
  2. Click on Start, search for "Web platform installer", open it up
  3. Once in the web platform, type in "SEO" in the search bar - top right
  4. It should be the last item in the list "Search Engine Optimisation Toolkit", click add, then install
  5. Click on start, type in: inetmgr
  6. Look for the Icon that says "Search Engine Optimisation Toolkit", and double click
  7. You're done! You now have an insane, free crawler on your machine :)

Now you need to:

  1. Crawl a site!
  2. Understand the analysis!
  3. Enjoy, you'll love it :)

Read Microsoft's official instructions for the IIS SEO toolkit

 

Read more about this here. Example of a default document: www.example.com/index.html www.example.com - will return the same content, different URLs

  • Case insensitive
  • IIS by default will serve the same content regardless of casing Example: www.example.com/BLOG and www.example.com/blog are the same content, different URLs
  • Works with www and non www (site canonicalization)
  • By default, like most servers you'll get the same content from www.example.com and example.com

Why it’s a problem: You get a hard earned inbound link to the wrong URL and it doesn’t give you full credit – “but it’s the same page!” No, it’s not, and no, Google doesn’t magically fix this even though they try.

But hey! No one is going to link to your site like this! Right? cc Matt Cutts 2006

  • www.example.com/
  • example.com/
  • www.example.com/index.html
  • example.com/INDEX.html

Yes, yes they do. Not on purpose, but they do.

This is a very real problem for older, larger sites that hadn’t canonicalized their domain, or bothered with consistent URL structure in the past. Fast forward to 2011 and we SEOs start nitpicking for every bit of link juice and we notice that we’re missing out on all of these external links because we’re not redirecting these inbound links to the right pages. We need to write some permanent redirect rules to catch these.

Simple, right? When someone links to our real page www.example.com/blog/ like this: example.com/Blog

We just do a 301 redirect back to www.example.com/blog/ ! Happy days right? Please continue…

 

It’s best to explain this by example. Open up this page from Cheapflights.co.uk.

Notice the capital L (london)? What happens when we request http://www.cheapflights.co.uk/flights/london/?

 

Brilliant! Even if someone incorrectly links to the lowercase version, we get a 301 redirect to the correct page http://www.cheapflights.co.uk/flights/London/

Here’s where I get crazy. Let’s say I decide to link to http://cheapflights.co.uk/flights/london

I want you to notice a couple of things here:

  1. No www
  2. London is london
  3. Monitor the http requests, try HTTPFOX for FireFox

 

Whoa! Two 301 redirects! We know one 301 loses link juice, but 2?The point here is that Google is far less likely to pass on PageRank with each chained redirect, you should always aim for no more than one 301 redirect.

This is referred to as chaining 301 redirects (My example is specific to IIS)

Why is this happening?

When you are creating redirect rules, the server usually obeys each condition depending on what it finds. As a good SEO, you should always canonicalise the domain – as a smart SEO you’ll probably want to stop any uppercasing goofs too, maybe even trailing slashes while you’re at it!

 

My obsession – I noticed this all over the web and I was obsessed with finding the “catch all” redirect rule that would only redirect once, to the right URL.

I failed, until I got some very clever friends involved. Meet Daniel Furze, developer at Reed.co.uk.

A way to fix the chain for common SEO issues

I'm nicknaming this the "Furze Method" :) This method has been tried and tested, so we know it works. You should add this rule base in web.config for a .net app. Learn more here.

We're using IIS 7 and the url rewrite 2.0 module here which allows us to run regex rules against different parts of the url and then either Redirect or Rewrite them. The ability to rewrite is what I'm using to make sure we keep 301 chaining to a minimum. It allows us to run several rules against the url, cleaning it up in stages before doing one final Redirect. The trick to this is that when a rewrite rule matches and it does it's job it adds a _ to the path of the url. The final rules look for any path beginning with _ and will then strip this out and redirect. Let's have a look at the rules and then break them down in to sections.

Section 1

<rule name="WhiteList - resources" stopProcessing="true">

<match url="^resources/" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false" />

<action type="None" />

</rule>

The first rule is very important here as there is no need to be cleaning up resource requests (remember all requests pass through here including image, css and js files with an integrated pipe).

Section 2

<rule name="SEO - remove default.aspx" stopProcessing="false">

<match url="(.*?)/?default\.aspx$" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_METHOD}" pattern="GET" />

</conditions>

<action type="Rewrite" url="_{R:1}" />

</rule>

<rule name="SEO - Remove trailing slash" stopProcessing="false">

<match url="(.+)/$" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_METHOD}" pattern="GET" />

<add input="{REQUEST_FILENAME}" matchType="IsDirectory" negate="true" />

<add input="{REQUEST_FILENAME}" matchType="IsFile" negate="true" />

</conditions>

<action type="Rewrite" url="_{R:1}" />

</rule>

<rule name="SEO - ToLower" stopProcessing="false">

<match url="(.*)" ignoreCase="false" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_METHOD}" pattern="GET" />

<add input="{R:1}" pattern="[A-Z]" ignoreCase="false" />

</conditions>

<action type="Rewrite" url="_{ToLower:{R:1}}" />

</rule>

The 2nd section of 3 rules will tidy up different parts of the url

  1. remove default.aspx, since we are using .net we want to clean up any stray default.aspx from the path (less important with a greenfield mvc app), you can change this rule for any other document types that you like including index.html.
  2. clean up trailing slashes from the path of the url ie www.yoursite.com/news/ becomes www.yoursite.com/news
  3. lowercase the whole path part of the url, the querystring isn't touched as these are often case sensitive so www.yoursite.com/News becomes www.yoursite.com/news

Section 3

<rule name="SEO - http canonical redirect" stopProcessing="true">

<match url="^(_*)(.*)" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_HOST}" pattern="^www\.yoursite\.org$" negate="true" />

<add input="{HTTP_METHOD}" pattern="GET" />

<add input="{SERVER_PORT}" pattern="80" />

</conditions>

<action type="Redirect" url="http://www.yoursite.org/{R:2}" />

</rule>

<rule name="SEO - https canonical redirect" stopProcessing="true">

<match url="^(_*)(.*)" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_HOST}" pattern="^www\.yoursite\.org$" negate="true" />

<add input="{HTTP_METHOD}" pattern="GET" />

<add input="{SERVER_PORT}" pattern="443" />

</conditions>

<action type="Redirect" url="https://www.yoursite.org/{R:2}" />

</rule>

<rule name="SEO - non-canonical redirect" stopProcessing="true">

<match url="^(_+)(.*)" />

<conditions logicalGrouping="MatchAll" trackAllCaptures="false">

<add input="{HTTP_METHOD}" pattern="GET" />

</conditions>

<action type="Redirect" url="{R:2}" />

</rule>

The 3rd part is a little more tricky, this is the part that does the actual Redirect but it is also responsible for one last tidy-up as well. The first 2 rules will fix missing www and then redirect while also respecting the port the requested url was using ie http://yoursite.com becomes http://www.yoursite.com and the same for https. The reason these 2 rules are separate is that I haven't figured out how to add www without also specifying either http or https. The 3rd rule will do a redirect if any of the SEO Rewrite rules caught but the url already had www in it. You can see that these last 3 rules pay attention to _ which might be in the path from the previous rewrite rules.

One final gotcha is to make sure you don't actually have any geniune urls that begin with _ , if you do then you can substitute this for another special character but you will have to make sure it all still works. And also to pay attention to which ones have stopProcessing="true" on them, typically a Redirect will stop and a SEO rewrite will carry on. If you are wanting to put in any other rules for say redirecting email links or migrating old pages to new pages then I would recommend putting them in between any Whitelist rules you have and the SEO rules at the bottom.

The final result is a very mangled url like:

http://yoursite/NeWs/default.aspx?id=123 will redirect to http://www.yoursite/news?id=123 with only one 301.

You can see how it works live here..please disregard the domain name!http://a4uexpobavarianbeerandsausageonstand50.org/ArTIcle/

You'll notice that our non www, uppercase and trailing slash version 301's to http://www.a4uexpobavarianbeerandsausageonstand50.org/article with one 301! Cool!

 

Mark Ridley is the Head of Development & an IIS expert at Reed and a personal friend of mine that I called for help. Oh feel free to bug him on Twitter, just say I told you to :)

I need to 301 redirect page A to page B, how can we do this?

Dave: This is fairly easy, we won't reinvent the wheel - please see detail instructions here. Updated: Another great resource (full tutorial) has been discovered thanks to Alan in the comments

We are migrating a site and we know which pages to redirect to, can you send us the rewrite map template so we can fill it out? (Basically explain that the Devs could send a rewrite map template and then just apply rules)

Dave: Yes, it is possible. Get a developer to send you a template, use this resource here.

How will ASP, .net, PHP react to our redirect rules? Are there any common pitfalls?

IIS URL Rewrite rules will execute before any rewrites or redirects that your application insists upon. There are some very technical reasons for this. Essentially, the web server thinks it's more important than your code, which is probably correct. The only pitfalls to watch out for, exactly as with Apache, is that you're making sensible rules on the web server. It is a little bit too easy to make infinite redirect loops, or at least very long chains of redirects that won't make you popular with search engines

Is there anything Apache can do that IIS can't?

There's WAY better community support for Apache, and a much wider adoption. That doesn't mean that IIS has poor support, just that the number of articles telling you about Apache is going to outnumber IIS by orders of magnitude, partially why this article is important. Other than that - yes, some Apache modules make Apache do things that IIS can't, but there aren't many things that will trouble the 80% of 'normal' users.

Do you prefer IIS or Apache? Why?

I refuse to get involved in a religious argument! Both are very capable web servers (number 1 and 2 in the market according to Netcraft), and often the decision to use one or the other is not based on the capability of the web server itself. Microsoft houses will use IIS and Free/Open Source or *nix houses will use Apache (or nginx). It doesn't hurt anyone to understand both, especially as your client will have made the decision to use one or the other, and probably won't want to change. It's enough to know that both are sensible choices depending on your reasons.

How can I speed up page load time with IIS?

IIS, like Apache's mod_gzip, allows you to turn on gzip compression of both static and dynamic content. It's a very simple change that will make a massive difference to your page download speed, and your bandwidth costs! This was added in IIS7 and was a long overdue feature. All modern browsers support content compression, and there is almost no downside to enabling it.

A more technical, and complex solution is also available in addition to content compression, which is output caching (http://learn.iis.net/page.aspx/710/configure-iis-7-output-caching/). This is probably something best left to the developers and server administrators to argue over, as whilst it can have benefits they are less obvious and harder to achieve than compression.

Can you easily give me log files? What information can I get? What software do you recommend to parse the logs?

Of course! IIS logs just the same way Apache does - writing log files into a folder. You can use exactly the same format as Apache, or several other popular web log formats, which are simple configuration options in IIS. Log parsing is often now less common with the massive improvements in online services, such as Google Analytics, Webtrends or Omniture. With Google Analytics being free, you're in a position to do away with pesky logs and let your marketeers do the analysis without worrying about the underlying technology. The free 'Live' view which is currently in Beta in GA is also amazing, and will sell itself to execs and marketing folk, as they can see who is on your site right at the moment. If you want a little more detail from your own logs for a reasonable price, I've often used Sawmill to great effect. AWStats is also popular with the more technical FOS community.

Can you explain (basic) how you set up a dev server and then deploy to live? (what are common issues)?

This is enormously variable based on your server architecture, your connections and your technical decisions. On a Microsoft stack, Microsoft provide tools such as Web Farm Framework and Web Deploy which can be a great help and offer a lot of heavy lifting. Some people with simpler sites are happy with FTP or WebDAV deployments. We use our own cocktail of Powershell scripts and Robocopy to manage our servers and keep them up to date, but we won't test you on that afterwards.

How can you define a custom 404 page easily?

IIS has standard support for all the common (and any custom) error pages. The easiest route is to create an HTML page with your 404 content and save it to a folder on your live servers. In the IIS configuration, you then simply locate this page and IIS will do the rest. With more complex ASP.NET MVC sites, you may want to handle your own 404s, bug again that's best left to the developers.

Can you explain how to make friendly (SEO) urls in IIS? What is the process?

Exactly the same way as with any other web server! Name your content well. Avoid special characters, use lower case filenames, be consistent with naming, use slugs where possible to make URLs that search engines will appreciate. If you're writing an application which pulls content from a database, make the URLs as meaningful as possible and avoid varied query strings. All of this is second nature for good SEOs. ASP.NET (or any other flavour) MVC helps even more as the URL routing allows the developers more control of exactly what the URL will look like, rather than having to rely only on filenames. If you use a content management system, make sure that you know how to configure correctly - most popular CMS products have this boiled in these days.

What do you mean by rewriting as opposed to redirecting?

In simple terms, imagine you have two files - a.htm and b.htm.

If you are using rewriting, someone will look at a.htm in a browser (and the address bar will still show http://site.com/a.htm), but you will actually see the content of b.htm.

If you are using the more common redirect method, when someone asks for a.htm with their browser, they will be sent to b.htm in the server. The address bar will now show http://www.site.com/b.htm For SEO purposes, this means that a spider won't be able to tell the difference between a.htm and b.htm if you're rewriting. If you're redirecting, you can give powerful instructions to the spider, such as a 301 response, asserting that the value of the b.htm should now be carried to a.htm. In most cases, you probably only need to worry about using redirects, as these are widely used and understood. Rewriting is often an edge case, or something used by developers for their own nefarious purposes.

Give me a good reason why I should use IIS 7 over previous versions?

IIS7 - now actually IIS7.5 in Windows 2008 R2 - was a huge improvement over IIS6. Native support for gzip compression, the newly integrated ASP.NET pipeline and performance and security improvements should be enough. If not, Windows 2008 is a far nicer Operating System to use than 2003 (now it's been patched a few times), and migrating will make your life a much more pleasant place to be. Do watch out for slow file copying though, a relic of it's Windows Vista brethren.

A few more helpful links

 

Feel free to follow me on Twitter @dsottimano, don't forget to randomly hug a developer - even if they say they don't like it :)


Do you like this post? Yes No

Photo of the Day: What is the First Family Reading?

The White House Your Daily Snapshot for
Monday, Nov. 28, 2011
 

Photo of the Day: What is the First Family Reading?

On Saturday, President Obama and his daughters, Sasha and Malia, visited a local bookstore in support of Small Business Saturday.

Photo of the Day

President Barack Obama and daughters Sasha and Malia shop at Kramerbooks & Afterwords Cafe in Washington, D.C., Saturday, Nov. 26, 2011. (Official White House Photo by Pete Souza)

In Case You Missed It

Here are some of the top stories from the White House blog.

Nearly 1.9 Million White House Visitor Records Released
A new release of White House visitor records brings the grand total of records that this White House has released to nearly 1.9 million.

The White House Christmas Tree Arrives
First Lady Michelle Obama receives this year's White House Christmas Tree, which will be displayed in the Blue Room and decorated to honor military families.

Thank a Hero
First Lady Michelle Obama encourages all Americans to send a message of Thanks From Everywhere to our military families this Thanksgiving.

Today's Schedule

All times are Eastern Standard Time (EST).

10:30 AM: The President receives the Presidential Daily Briefing

11:45 AM: The President hosts a summit meeting with the leaders of the European Union

12:15 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

12:30 PM: The President hosts an EU summit lunch

1:40 PM: The President, European Council President Herman Van Rompuy, and European Commission President José Manuel Barroso deliver statements

WhiteHouse.gov/live
Indicates that the event will be live-streamed on WhiteHouse.gov/Live

Get Updates

Sign up for the Daily Snapshot

Stay Connected

This email was sent to e0nstar1.blog@gmail.com
Manage Subscriptions for e0nstar1.blog@gmail.com
Sign Up for Updates from the White House

Unsubscribe e0nstar1.blog@gmail.com | 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

 

Seth's Blog : Who comes on opening night?

Who comes on opening night?

I understand the folks who wait for a creative work to come out in paperback, to be free on TV, the ones that get the half-price tickets at TKTS near the end of the run. They're cheap, at least when it comes to this particular sort of art.

I understand the audience that waits to read the reviews, that wants to hear from friends and anointed critics before they spend their money. They're careful.

So who comes on opening night? No discounts, no reviews, no warning...

The patrons come. For them, part of the attraction of art is that they don't know in advance if they're going to like it. They come for a simple reason: it feels good to support something because they can, not merely because it's a good value.

And the true fans come. They come because the artist has earned their trust. "If you made it, that's good enough for me," they say. They come because to not come is to not be a true fan, with all that entails.

Opening night is vitally important, of course. The critics come, word of mouth begins, the producers find enthusiasm and the guts to start work on their next play.

I guess the real question is: who would come to your opening? And the follow up is: what would happen after that?

 

More Recent Articles

[You're getting this note because you subscribed to Seth Godin's blog.]

Don't want to get this email anymore? Click the link below to unsubscribe.




Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

duminică, 27 noiembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


ICAP Testing Trades In Greek Drachma Against Dollar and Euro

Posted: 27 Nov 2011 04:55 PM PST

ICAP Plc, the world's largest inter-dealer broker (one that carries out transactions for financial institutions rather than private individuals), is now Testing Trades In Greek Drachma Against Dollar, Euro
ICAP Plc is preparing its electronic trading platforms for Greece's potential exit from the euro and a return to the drachma, senior executives at the inter-dealer broker said Sunday.

ICAP is the latest firm to disclose such preparations, joining the growing ranks of banks, governments and other key players in the global financial system whose officials are worried enough about the stability of the common currency to be making contingency plans for a possible break-up.

The firm has been testing systems that would allow dealer banks to trade the drachma against both the dollar and the euro, the ICAP executives said, cautioning that the measures taken in recent weeks were precautionary. They said the currency pairs would not be accessible for trading unless required by market events, and may never be used.

Certain decisions, such as how many decimal places would be used when representing the drachma's exchange rate, have not been finalized. But ICAP said the currency templates could be tweaked depending on dealer requests, and that the project could be used as a roadmap for how to prepare for an outcome involving multiple currencies leaving the euro. So far, testing has only involved the drachma, no other currencies.

ICAP has reloaded the drachma templates for spot foreign exchange and derivatives called nondeliverable forwards that were removed from the system when Greece's old currency was replaced by the euro in 2001.

A Barclays Capital research report last week showed that nearly half of 1,000 investors surveyed thought at least one country will leave the euro in 2012.

Separately, a Bank of America Merrill Lynch research report Friday titled: "Eurozone: thinking the unthinkable," said a partial union with only some countries exiting the euro was the "most probable scenario" out of all the breakup possibilities. But the researchers stressed that while the currency implications were "worth examining," a breakup of the euro was still a far-fetched event.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Still More Inane Attempts to Leverage EFSF; IMF to the Rescue?

Posted: 27 Nov 2011 09:50 AM PST

Politicians never give up on bad idea except by death or removal from office.

In spite of obvious failures to leverage the EFSF fund (still without rules as to how the fund even works), French president Nicolas Sarkozy is back at it, hoping to create a three-fold expansion of the EFSF via tradeable insurance certificates with guarantees on as much as 30 percent of the bonds.

Bloomberg reports Euro Rescue Fund May Insure 30 Percent of Bonds
The European Financial Stability Facility may insure bonds of troubled countries with guarantees of between 20 percent and 30 percent of each issue to be determined in light of market circumstances, according to EFSF guidelines to be considered by finance ministers this week.

The insurance would be in the form of tradable partial protection certificates, to be issued by an independent Luxemburg-based special purpose vehicle, the guidelines show. The step is one of several new tools including setting up private funds with investors and selling short-term debt aimed at increasing the EFSF's power to combat the debt crisis.

Euro-area finance ministers are due to meet in Brussels on Nov. 29 as governments bid to regain the confidence of financial markets.

The proposal to attach guarantees of up to 30 percent of future EFSF bond issuances' worth may create a threefold expansion of the 440 billion-euro ($583 billion) fund, according to the guidelines distributed to lawmakers in Berlin. The EFSF's pool of potential aid would also be increased by setting up so- called credit investment funds with private investors to buy the bonds of euro-region states that struggle to sell their debt.

French President Nicolas Sarkozy has said that the bailout fund might be worth $1.4 trillion after European governments agreed last month on steps to leverage existing guarantees as much as fivefold. European leaders are next due to hold a summit on Dec. 8-9.

The new instruments may need to be supplemented further, German Finance Minister Wolfgang Schaeuble told reporters in Berlin on Nov. 25 following talks with Dutch Finance Minister Jan Kees de Jager and Finnish Finance Minister Jutta Urpilainen.

Leaders will seek a "separate path" of help from the International Monetary Fund to boost the EFSF, Schaeuble said. IMF help must be "substantial enough to help Italy and Spain," de Jager told reporters, saying that talks on creating credit investment funds had run into "problems."
Given there are few details on the proposal it's difficult to say precisely how this will fail, but fail it will, more than likely within a few days of announcement.

Assuming the guarantees are separately tradeable as stated, the guarantees themselves may (or may not) trade at a reasonable valuation, but what about the underlying junk?

Also recall the bigger the leverage, the faster the EFSF will eat up its principle.

Then what?

IMF to the Rescue?

Not a single one of these clowns is taking into consideration the fact the German Supreme court has said "no more". What happens when the EFSF is quickly consumed on Portuguese, Spanish, and Italian debt?

Is that when the IMF is supposed to come to the rescue? Or before?

In Latest Rumor Sees €600 Billion Bailout Of Italy From US, Pardon IMF, ZeroHedge says Forget about it.
The European desperation is palpable ahead of the EURUSD open in a few hours, which has to deal with the aftermath of the Friday afternoon downgrade of Belgium, the junking of Portugal and Hungary, and the prospect of an imminent downgrade of AAA-stalwarts Austria and France. So what does Europe do instead of actually proposing the inevitable debt repudiation that is the only and final outcome? Why more rumors of course.

To wit: last night saw the preannouncement of Welt am Sonntag indicating that in order to bypass the lengthy process of treaty changes, Europe would instead proceed with bilateral agreements that would somehow enforce fiscal stability and convince the market that European states would follow the German leader. Well since that is sure to have absolutely no impact, overnight Italian La Stampa is out with a fresh new rumor which cites "IMF sources" according to which the US-headquartered and funded organization would provide a €600 billion loan to Italy at 4-5%. In other words, Uncle Sam, in his role as primary funding agent of the IMF would lose massive amount of money on the "market to fair value" arbitrage, only to bail out the latest European domino.

From Dow Jones:
The International Monetary Fund could offer Italy between EUR400 billion and EUR600 billion in financial support to give Italian Prime Minister Mario Monti a window of 12 to 18 months to enact reforms sufficient to restore waning market confidence in Italy's ability to repay its debt, Turin daily La Stampa reported Sunday, citing IMF sources.

The IMF "Italy package" would consist of loans at an interest rate of between 4% and 5%, compared with the 7% to 8% the country paid at its most recent bond auctions, the report says.
However, ZeroHedge also points out a Dow Jones wire from September ...
The IMF board of governors agreed in December to roughly double quotas from around $375 billion to around $750 billion. But out of the 187 member countries, only 17 have legally accepted the increase, including Japan, the U.K. and Korea. Most of the countries with the biggest quotas, such as the U.S., China and Germany, haven't yet gone through the legal process, such as parliamentary or congressional approval, need to hand over their promised dues.
Think this Congress will throw more money at the IMF? I don't.

Thus, once again, all we have for another week is more nonsensical rumors and a rehash of leverage ideas that have already failed in the market.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Seth's Blog : The Confusion of Logistics and Strategy Problem

The Confusion of Logistics and Strategy Problem

So widespread, it deserves an acronym: CLASP.

You have a clasp when people criticize your new strategy because they don't know how to execute it.

Yes, a new strategy has to be executable, or it's merely a wish. No, the logistics behind it don't have to be tried and true. It's one job to dream up a strategy and another job to execute it. Whining about how hard the logistics are is just fine, but don't conflate this with thoughtful feedback about whether your strategy makes sense.

Just about every great new project couples a brilliant strategy with impossible logistics that somehow get handled.

 

More Recent Articles

[You're getting this note because you subscribed to Seth Godin's blog.]

Don't want to get this email anymore? Click the link below to unsubscribe.




Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

sâmbătă, 26 noiembrie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


House of horrors: Prices Falling in 8 of 16 Measured Countries; Is the US Undervalued?

Posted: 26 Nov 2011 08:02 PM PST

The Economist is frequently a mixed bag. Here is an article on the global housing market that pretty much hits the right spot. Please consider House of horrors, part 2
The bursting of the global housing bubble is only halfway through.

MANY of the world's financial and economic woes since 2008 began with the bursting of the biggest bubble in history. Never before had house prices risen so fast, for so long, in so many countries. Yet the bust has been much less widespread than the boom. Home prices tumbled by 34% in America from 2006 to their low point earlier this year; in Ireland they plunged by an even more painful 45% from their peak in 2007; and prices have fallen by around 15% in Spain and Denmark. But in most other countries they have dipped by less than 10%, as in Britain and Italy. In some countries, such as Australia, Canada and Sweden, prices wobbled but then surged to new highs. As a result, many property markets are still looking uncomfortably overvalued.

The latest update of The Economist's global house-price indicators shows that prices are now falling in eight of the 16 countries in the table, compared with five in late 2010.

Home Price Indicators

To assess the risks of a further slump, we track two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio, which is a bit like the price-to-earnings ratio used to value companies. Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers). If both of these measures are well above their long-term average, which we have calculated since 1975 for most countries, this could signal that property is overvalued.

Based on the average of the two measures, home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden (see table). Indeed, in the first four of those countries housing looks more overvalued than it was in America at the peak of its bubble. Despite their collapse, Irish home prices are still slightly above "fair" value—partly because they were incredibly overvalued at their peak, and partly because incomes and rents have fallen sharply. In contrast, homes in America, Japan and Germany are all significantly undervalued. In the late 1990s the average house price in Germany was twice that in France; now it is 20% cheaper.

This raises two questions. First, since American homes now look cheap, are prices set to rebound? Average house prices are 8% undervalued relative to rents, and 22% undervalued relative to income (see chart). Prices may have reached a floor, but this is no guarantee of an imminent bounce. In Britain and Sweden in the mid-1990s, prices undershot fair value by around 35%. Prices in Britain did not really start to rise for almost four years after they bottomed.

....

Jingle mail

American prices fell sharply, even though homes were less overvalued than they were in many other countries, because high-risk mortgages and a surge in unemployment caused distressed sales. In most other countries, lenders avoided the worst excesses of subprime lending, and unemployment rose by less, so there were fewer forced sales dragging prices down. America is also unusual in having non-recourse mortgages that let borrowers walk away with no liability.

An optimist could therefore argue that our gauges overstate the extent to which house prices are overvalued, and that if markets are only a bit too expensive they can adjust gradually without a sharp fall. It is important to remember, however, that lower interest rates and rising populations were used to justify higher prices in America and Ireland before their bubbles burst so spectacularly.

Another concern is that Australia, Britain, Canada, the Netherlands, New Zealand, Spain and Sweden all have even higher household-debt burdens in relation to income than America did at the peak of its bubble. Overvalued prices and large debts leave households vulnerable to a rise in unemployment or higher mortgage rates. A credit crunch or recession could cause house prices to tumble in many more countries.
Implications

That analysis is about as good as mainstream media gets. However, The Economist fails to address the global implications.

What happens if home prices plunge (and they will) in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden?

How will those central banks react?

Except for France which has no direct control, I will tell you how. Central banks will cut interest rates and/or launch various quantitative easing programs.

All other things being equal, that is net US dollar supportive.

Moreover, if prices and transaction volumes collapse in China (and they will), what will that do to the demand for commodities? In turn, what would falling demand for commodities in China do to the economies of Canada and Australia?

The Economist asks "Since American homes now look cheap, are prices set to rebound?"

That is a good question.

The Economist answers (correctly) "Average house prices are 8% undervalued relative to rents, and 22% undervalued relative to income (see chart). Prices may have reached a floor, but this is no guarantee of an imminent bounce."

However, The Economist fails to discuss the possibility that US rents are artificially high due to people seeking rental properties after being foreclosed on.

Moreover, income statistics are very skewed. Most of the gains in income are on the "high end", not people in financial trouble.

Still, as I said, this article is about as balanced as one can expect from mainstream media. It provides much opportunity for further commentary (both positive and negative) from bloggers.

The Economist correctly states "The bursting of the global housing bubble is only halfway through."

However, it's the non-discussed ramifications that are important.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Merkozy Proposes Quick, New, Drastic "Stability Pact" to Fight the Euro Zone Sovereign Debt Crisis; Maastricht Treaty Trashed by Committee

Posted: 26 Nov 2011 04:43 PM PST

German chancellor Angela Merkel and French President Nicolas Sarkozy proposed a "quick new stability pact" that allegedly will bypass the need for treaties. However, there is already disagreement over the role of the ECB.

Please consider Germany, France plan quick new Stability Pact
German Chancellor Angela Merkel and French President Nicolas Sarkozy are planning more drastic means - including a quick new Stability Pact - to fight the euro zone sovereign debt crisis, Welt am Sonntag reported on Sunday.

The report, which echoed a Reuters report on Friday from Brussels, quoted German government sources as saying that the crisis fighting plan could possibly be announced by Merkel and Sarkozy in the coming week.

The report said that because it would take too long to change existing European Union treaties, euro zone countries should avoid such delays be agreeing to a new Stability Pact among themselves - possibly implemented at the start of 2012.
Desperate Logic

Excuse me! There does not need to be treaty changes because a subset of the treaty signers can agree among themselves to trash it? Exactly what kind of desperate logic is that?
Among the countries in the Stability Pact there would be a treaty spelling out strict deficit rules and control rights for national budgets.

The European Central Bank should also emerge more as a crisis fighter in the euro zone. The ECB is independent and governments cannot tell it what to do. But the expectations on the ECB are clear, Welt am Sonntag wrote.

"Based upon these measures, there should be a majority within the ECB for a stronger intervention in capital markets," Welt am Sonntag said. It quotes a central banker as saying: "If the politicians can agree to a comprehensive step, the ECB will jump in and help."
ECB to Jump in and Help?!

Excuse Me! Since when will Germany agree to that? Since when will the ECB agree to that?
The European Commission, the EU executive arm, put forward proposals on Wednesday to grant it intrusive powers of approval of euro zone budgets before they are submitted to national parliaments, which, if approved, would effectively mean ceding some national sovereignty over budgets.

This could lead to joint debt issuance for the euro zone, where countries would be liable for each others' debts.

Germany strongly opposes the joint issuance idea fearing spendthrift countries would piggyback on its low borrowing costs - meaning no gain for the virtuous and no pain for the sinners.
Maastricht Treaty Trashed by Committee

I see Germany does not agree to that. Does the ECB?

What about other countries that might not like to see the Maastricht Treaty trashed because a handful of countries agree to do just that?

This is an incredibly slippery slope, and hopefully the German Supreme Court puts an end to the idea before it gets too much further along.

As a side note, Merkel has lost her mind.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


In Fiery Protest Against Fractional Reserve Lending, Disgruntled Ex-Employee of Chairman of Rural Bank of New Zealand Sets Car on Fire in Mall

Posted: 26 Nov 2011 08:39 AM PST

The New Zealand Herald reports Fiery protest Against Fractional Reserve Lending 'Endangered Public'
A Bay of Plenty farmer who set a car alight in a protest in central Wellington this afternoon has been arrested and charged with arson.

The 40-year-old man set his car on fire in Wellinton's Cuba mall at about 1.30pm.

The man said in a video posted on Facebook that he was an ex-employee of the chairman of the Rural Bank of New Zealand.

"I've learnt a lot of stuff since then, and I've had enough. I'm gonna make this car disappear," he said.

He claimed that "fractional reserve lending is the root of all our problems" before walking to the boot of the car, which was filled with rubbish, with what appeared to be a lighter.

There were shrieks from by-standers as he was thrown backwards from the force of the explosion that followed.

He then threw flaming material back into the boot of the car before closing it.

He announced to shocked witnesses that the car was full of petrol and asked them not to put it out.

"I'm just waiting for police to turn up, I've made my statement."

Plum cafe owner David Fenwick said he heard a loud bang about 1.50pm and ran out of his cafe to see what was going on.

"Suddenly we heard an explosion, so I ran out the front and saw a red station wagon, and there was a fire behind it. I thought it was a street performance gone wrong."

Mr Fenwick ran inside to grab a fire extinguisher, and with a neighbour shop employee, put out the pile of burning rubbish.

"Unfortunately it took hold pretty fast....and the fuel tank exploded. And then it was just noxious smoke and a burning car in the mall on a lovely sunny day."

The fuel tank explosion took part of the body work off, and the car was now a charred wreck with blown-out windows, he said.

The man had spraypainted the message "what is fractional reserve banking...Google it" next to the car, he said.
The YouTube video does not show the explosion or the man's statement. This Facebook video does.

Warning: Harsh hanguage as the protester is blown backwards by the explosion he caused.

Please see "Fractional Reserve Lending is the Root of Our Problems"

I happen to agree with him. FRL is one of the root problems. However, he did not pick the best manner in which to protest, to say the least.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List