Central Perk

luni, 10 februarie 2014

How I Learned to Stop Worrying and Love the Nofollow

Posted: 09 Feb 2014 03:15 PM PST

"Nofollowdation is the most monstrously conceived and dangerous marketing plot we have ever had to face."
â€" General Jack D. Ripper, Dr. Strangelove (slightly modified)

This was me a few years ago:

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"DANGIT!!! Nofollowed!!!"

My dreams completely shattered; how would I ever explain this to my boss? That initial excitement and celebration had now faded, as I sulked deeper and deeper into my chair, disgruntled, believing that all my work had amounted to nothing.

To try and prevent such a travesty from every happening again, I went on a crusade. Before outreaching to a site owner or editor, I would double and triple check their sites to make sure external links weren't nofollowed, and if they were, I would cast the site off, never to be considered again.

But over time I noticed how thinking in such a way created a really interesting and perverse incentiveâ€¦

How many times have you searched "write for us" [insert blog niche] knowing that it greatly increases the odds that you will get a dofollow link? I'm not saying there's anything inherently wrong with that; plenty of great contacts to be made by doing so. But if you check the "writer guidelines" page for sites that actively are looking for guest authors, you'll likely notice a common theme: "We allow one dofollow link in the author bio."

In this day and age, this should now be setting off an outreach siren (or at least putting up a yield sign). It's certainly time to be critically analyzing where we are getting links to our sites and making proper assessments as to whether or not the value exists.

When I was first starting out, I would salivate over the possibility of any link I could get my hands on, thinking "Wow, the opportunity for a real published DOFOLLOW link, now that's what I'm talking about! Surely my rankings will rule supreme!"

But I learned quickly this was a ridiculous way to think about what we're trying to actually accomplish as online marketers, and I would really encourage folks to start thinking differently about their true objectives.

So what to do?

Eliminating a site from a prospect list just because it nofollows links is focusing far too much on the minimal value one link provides. I would argue that in any online marketing campaign, nofollows not only have a place but should be sought after as part of the overall strategy.

To be clear, I'm not talking about trying to maintain some healthy ratio of link types in a site's profile; I'm talking about actively pursuing nofollows with the intention of gaining the benefits they bring almost entirely unrelated to organic search.

Some examples:

In the first image below, you will see the referral data (or lack thereof) from a placement where the website I wrote for allowed me to link to my website in the author bio section.

You're reading that correctly, in case you're wondering. An article on a decent site sent exactly zero referral traffic to my blog. This isn't uncommon.

I know what you might be thinking. "But Rob, surely the link in and of itself still has value! And isn't that what a good outreacher should be targeting in the first place? The almighty link!"

I agree that links will likely always have their place, but I have started thinking a lot about why search engines value links, and it changed the way I target placements. The reason a link has value is because it is used to cite a source or refer readers to external resources and information. If the readers of a site aren't actually ever clicking this link, then why should search engines give it any value?

I'm not saying we're there yet, but wouldn't doubt it's only a matter of time.

Here's another example, where we gave a blogger a product to review, the links in the article were appropriately nofollowed to adhere to search engine guidelines:

The links in the article sent some fantastic traffic that hung around on the site, visiting multiple pages as well as talking about the product in the comments of the article and on social. In the top-right corner you can see that the blogger ran a giveaway for the product as well, resulting in increased engagement on all of the website's social channels, creating buzz for the product.

In the long term, who would you rather work with? The first example or the second?

These are not unique examples. I have noticed an upward trend where nofollow links can often times present the absolute best and immediate return when proper site metrics are measured.

So what's the takeaway here?

This is going to sound a little funny, so hear me out. You can be a bit reckless with nofollow. Here's why:

You don't have to worry about breaking search engine guidelines, and countless bloggers are happy to take your money or products to promote your brand or service to their audiences (ones that might otherwise have little interest in working with you).

In other words? You can become an advertiser overnight!

To be clear though, I'm not recommending you just go after promoted content type posts; those tend to have little value. Focus on how you can use your contact's influence and audience in a more engaging way, and respectfully "pay to play." The creative possibilites are often endless.

The lines between digital advertising and marketing are continuing to blur, and incorporating a "nofollow strategy" into your marketing efforts can easily prove fruitful when proper analysis is applied. Treating bloggers more like business owners is a far more respectful way to work with their audiences to build brand awareness. And if this two-way partnership continues to grow, there is certainly an opportunity to create an influential brand ambassador, one of the most powerful things we can hope for.

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Seth's Blog : Uninformed or ignorant?

Uninformed or ignorant?

Uninformed is a temporary condition, fixed more easily than ever.

Ignorant, on the other hand, is the dangerous situation where someone making a decision is uninformed and either doesn't know or doesn't care about his lack of knowledge.

The internet lets us become informed, if we only are willing to put in the time and the effort. That's new--the ability to easily and confidently look it up, learn about it, process it and publish to see if you got it right.

Alas, the internet also creates an environment where it's possible to feel just fine about being ignorant. It's easier than ever to live in a silo where we are surrounded by others who think it's just great to not know.

"Ignorant" used to be a fairly vague epithet, one that we often misused to describe someone who disagreed with us. Today, because it represents a choice, the intentional act of not-knowing, I think it carries a lot more weight.

The more I think about this, the more I'm aware of just how ignorant I've chosen to be. Not a happy thought, but a useful wake-up call.

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duminică, 9 februarie 2014

Mish's Global Economic Trend Analysis

Shop on Amazon by Taking Pictures of Items with New "Flow" App: Big Deal or Not?

Posted: 09 Feb 2014 06:05 PM PST

See an item in a grocery store or general merchandise store and want to add it to your shopping cart if Amazon has it cheaper? Amazon's new "Flow" app allows you to do just that.

MarketWatch reports You can now shop on Amazon by taking photos.

Amazon's app for iPhone this week added "Flow," an image recognition tool designed to allow consumers to add a product to their shopping cart by merely pointing their phone's camera at it.

Flow—as its name suggests—aims to make it as seamless as possible to shop. MarketWatch carried out its own "showrooming" with the app. Scanning a three-bottle package of the hair growth serum Rogaine, Flow immediately found the item on Amazon for $43.85, 30% cheaper than the $62.99 price in a Duane Reade store. Russell Stover Pecan Delights—a heart-shaped box of chocolates just in time for Valentine's Day—were $8.99 online, $1 cheaper than in Duane Reade. "This trend will take some time to grab hold," says retail analyst Jeff Green, "but it's an ingenious idea."

Flow can scan millions of items, according to Amazon, but it won't work with older iOS versions and it's not yet available on Android. The feature will replace "Snap It" as an image recognition search feature on the Amazon iPhone app (iOS7 and above). iOS5 and iOS6 customers will still be able to use Snap It for visual product recognition. "Scan It"—which just scans bar codes—remains unchanged. However, Amazon pitches Flow as something to use at home—rather than as a price-comparison tool in stores. "In some ways, Flow replaces the kitchen white board or chalk board where most families keep their growing list—only this way you don't accidentally forget the shampoo," the spokeswoman says.

Retail experts are divided over its usefulness. "This strikes me as the lazy man's shopping robot," says Edgar Dworsky, founder of ConsumerWorld.org. "If you can't even type in the name of the product, give me a break. Most people in a supermarket are not going to take a picture of a Cheerios box, and then leave the store to go to a competitor where it's 20 cents cheaper," he says. And it's not appropriate for big ticket items like TVs, he adds. It's rather gimmicky, according Rick Singer, CEO of GreatApps.com, but he still regards it as a good tool to compare prices at your local store to those on Amazon.

Big Deal or Not?

The CEOs of ConsumerWorld and GreatApps panned the idea. To be sure, few care if they can save a dime on a box of cheerios. But saving nearly $20 on Rogaine is very worthwhile.

Dworsky says it's not appropriate for big ticket items like TVs.

He is not looking far enough ahead. If it isn't appropriate now, it soon will be, perhaps incorporating the barcode features of "Scan-It".

Deflationary Pressures

It's easy to visualize where this technology is headed: An app where you click on a product and all the places where you can buy it turn up, complete with prices, Amazon, or wherever.

The price deflation pressures of such a device are immense. People like bargains, and if they think a store is not offering enough of them, they will shop elsewhere.

That's a big deal. And it will further pressure price margins across the board at all box retailers.

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

French Airline Pilots Call Month Long Strike in May to Protest Law Prohibiting Pilot Strikes

Posted: 09 Feb 2014 10:55 AM PST

The French airline union, SNPL, has called for a month-long strike beginning in May. It's main objective is to repeal the Diard Law which limits the right of airline pilots to strike.

Via translation from Les Echos:

An unprecedented month-long strike is the motto launched today by SNPL, the main union of French airline pilots. SNPL calls for a national strike on May 3 to 30. The union gave a final warning to the government regarding several subjects of discontent, but the main target is the Diard law limiting the right to strike by cabin crew.

The Daird Law, passed in 2012 requires airline personal to individually declare strike intent at least 48 hours before the commencement of a strike. The law allows airlines to arrange for minimum service and avoid a buildup of stranded passengers at airports.

PATCO Solution

The way to deal with this strike is easy. France desperately needs something along the lines of Ronald Reagan's PATCO Play.

The Professional Air Traffic Controllers Organization or PATCO was a United States trade union which operated from 1968 until its decertification in 1981 following a strike which was broken by the Reagan Administration. The 1981 strike and defeat of PATCO has been called "one of the most important events in late twentieth century U.S. labor history.

On August 3, 1981 the union declared a strike, seeking better working conditions, better pay and a 32-hour workweek. In doing so, the union violated a law that banned strikes by government unions.

Ronald Reagan, declared the PATCO strike a "peril to national safety" and ordered them back to work under the terms of the Taft-Hartley Act of 1947. Only 1,300 of the nearly 13,000 controllers returned to work.

On August 5, following the PATCO workers refusal to return to work Reagan fired the 11,345 striking air traffic controllers who had ignored the order, and banned them from federal service for life (this ban was later rescinded by President Bill Clinton in 1993).

The proper response to any illegal strike in France, the US, or anywhere else, is to fire everyone involved.

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

Seth's Blog : 'Refresh' four weeks later

'Refresh' four weeks later

Remember that controversy you couldn't say close enough to? The one where breaking news, updated comments, emails flying back and forth had you at the edge of your seat?

Now, four weeks later, you're no longer even checking to see what's new.

Is it that the crisis changed or your need for reassurance did?

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sâmbătă, 8 februarie 2014

Mish's Global Economic Trend Analysis

Bank of America and City Official Fraud Enters the Detroit Bankruptcy Equation; Fair Settlement Reviewed Again

Posted: 08 Feb 2014 12:34 PM PST

Corruption, fraud, and bankruptcy are often found together. Such is the case with Detroit. I have seen allegations and suggestions of fraud, but a recent article shows that fraud by Bank of America, city officials, or both is now a given, and likely provable in a court of law.

Does that change my view on what constitutes a "fair" settlement?

Before answering, let's take a look at the charges as presented in Democracy Watch: Swaps, COPs & Lingering Questions.

In 2005, the city of Detroit faced a monumental dilemma: It desperately needed to borrow more than $1.4 billion to help shore up its two pension systems, but doing so would far exceed the legal limit on the amount of debt it could amass.

The solution arrived at by the administration of then-Mayor Kwame Kilpatrick was to sidestep the law by turning to something called certificates of participation, or COPs, which are similar to municipal bonds. But instead of borrowing the money directly, Kilpatrick and his crew – following the advice of investment bankers who would reap massive profits from the deal – set up two nonprofit "service corporations," which in turn created trusts that would sell the COPs to investors. Technically, it was these two nonprofits that were obligated to ensure repayment of the debt. The city then entered into a contract with the nonprofits – both of which were controlled entirely by city officials -- agreeing to pay them for services rendered. In other words, they were mere shells.

Was there fraud here? And if so by whom? At this point I am not sure. Let's continue.

Last Friday, lawyers representing the city filed a federal lawsuit claiming that the deal was illegal from the start, and because of that Detroit should not be required to continue paying off the debt. The case is now in the hands of U.S. Bankruptcy Judge Stephen Rhodes.

The lawsuit came as a complete surprise to most people, even those who have been following the bankruptcy proceedings closely. Until this point, attention in this aspect of the bankruptcy proceedings has been focused instead on interest rate swaps, a controversial side deal to the COPs transactions.

A type of hedge, these swaps were essentially a very high-stakes gamble. In effect, the city bet that interest rates were going to rise over time. If they did, the banks would be on the hook for the increased costs. Instead, the economy crashed in 2008, and interest rates fell to almost nothing. As a result, the cost to the city has been about $300 million in payments to what are known as the swap counterparties – Bank of America/Merrill Lynch and UBS, an investment bank based in Switzerland.

Again, I am still in the same place. This deal may very well be illegal, but I am not sure why. If it was illegal, did both parties knowingly enter a fraudulent deal, one party, or neither party. I strive to be fair to all sides.

For the better part of a year, the city has been trying to end the swaps. The banks claim that the cost of doing so should be about $300 million, and that the city is in a bad negotiating position because, even in bankruptcy, the swap payments are secured by casino tax revenues (as a result of another deal, struck in 2009).

That last paragraph is where fraud comes into play, but the article did not yet mention why. The story gets more interesting at this point.

Back in July, Detroit Emergency Manager Kevyn Orr announced that the two banks had agreed to a settlement that required the city to shell out $230 million, or about 75 cents on the dollar -- compared to the roughly 20 or 25 cents on the dollar so-called unsecured creditors, such as the city's pensioners, are reportedly in line for. But Judge Rhodes rejected the proposal, ruling that it was too generous to the banks. So the city and the banks returned to the bargaining table in December, this time with U.S. Judge Gerald Rosen serving as mediator. A new settlement was quickly arrived at, with the city agreeing to pay the two banks $165 million – money that it would have to borrow, driving the bankrupt municipality even deeper into debt. Orr maintained that the deal was crucial, because Detroit desperately needs that casino tax revenue.

But in January, Rhodes rejected that second deal as well. Part of the reason for doing so was his determination that the city, if it were to sue the banks, would actually have a good chance of succeeding – on a number of fronts. First of all, a very strong case can be made that the law prohibits using casino taxes to pay off such a debt. There is also a case to be made that, among other things, the swap deal involved fraud and therefore should be voided.

For judge Rhodes to push this back at Orr twice, something I did not realize had happened, is strong evidence something foul is at play. Is Orr watching out for Bank of America/Merrill Lynch interests not Detroit city interests?

While on the witness stand in early January, Orr testified that the city's chances of winning a court battle over the swaps were "more or less 50-50."

A coin flip.

The potential upside to litigating instead of negotiating is huge. If the swap deals are judged to have been invalid from the beginning, instead of having to pay $165 million more, the city could possibly recoup the $300 million it's shelled out so far. That's a swing of $450 million in Detroit's favor. And even if the city only succeeded in having the swap debt classified as "unsecured" rather than "secured," as the banks claim it is, then the banks, instead of being entitled to full repayment, would have to settle for dimes on the dollar, just like all the other unsecured creditors.

If it were to lose, though, the city would be on the hook for the full amount.

Under Oath

What has come out in the bankruptcy proceedings, though, is that the chances of successfully challenging the swap payments are actually considerably better than the 50/50 scenario that Orr declared in court. That's certainly the position held by Judge Rhodes, who pointedly told attorneys for the city that it was possible to both litigate and negotiate. Some of strongest evidence that the city could indeed prevail if it filed a lawsuit against the banks comes, ironically, from Orr himself.

Caroline Turner English is an attorney who represents Ambac, one of the creditors standing in line for a payout in the bankruptcy case. During the deposition taken on the last day of 2013, English pressed Orr to go into detail about the various ways the swap deals might be challenged. Based on input from his legal team – headed by lawyers from Jones Day, the law firm where Orr was a partner until his appointment as emergency manager in March of last year – Orr laid out eight separate causes of action that could be the basis for negating the swaps.

Under persistent questioning from English, Orr – himself an attorney – at one point in the deposition reluctantly admits that, in his estimation, each one of the potential claims had an equal chance of success. "I think on all of these claims, whatever their legal theory, all of them were basically 50/50 chance [sic] of success because for each claim there was always a corresponding risk that the claim would not be successful."

English didn't let up, asking Orr after he explained the basis for each potential claim, "So, you ascribe a 50/50 chance of success on this claim then, too?"

"Generally speaking, yes."

Which brings us momentarily from the court of law to the law of probabilities.

Each time you flip a coin, there's an equal chance it will come up either heads or tails. But there are formulas that let you calculate the likely overall outcome once you start stringing those flips together. So, what are the odds that, out of eight consecutive flips, a coin would come up tails every time?

About 99 to 1.

Not Quite. Given the claims are all likely related, if the first one fails, the rest might quickly fail as well. So I highly doubt 99-1 is the correct math. That said, the odds of winning something should be substantially greater than 50-50.

For the sake of argument, and to be conservative let's say 75-85%. Nonetheless, Orr has his supporters.

Lawsuits, however, are much more complicated than a simple coin flip. Which is why some experts say that Orr's desire to negotiate a settlement is the prudent approach.

Wayne State University Law Professor Bartell, for one, gives him high marks for the way he has handled the situation so far.

"From all I can tell, he [Orr] has bargained very hard," says Bartell.

I suggest it's clear Orr did not bargain hard. That the bankruptcy judge rejected Orr's proposal twice is proof enough for me.

Some others, however, have been questioning why Orr has been so willing to push for settlement deals that Judge Rhodes has twice rejected as far too generous to the banks. Part of the reason for their concern is the fact that Jones Day – Orr's former firm – represents Bank of America in matters with no direct relation to this case. (A majority of the Detroit City Council essentially waived any conflict of interest concerns when it approved hiring Jones Day to lead the restructuring of the city last year.)

In addition to representing Bank of America/Merrill Lynch, Jones Day reported in material submitted to the city last year that it also has a "client relationship" with UBS. In subsequent court documents, it revised that disclosure, saying that "it does not represent UBS AG, although it does represent other entities related to UBS AG."

"Detroiters have the basic right to competent and loyal legal representation, as well as democratically accountable local government, as we proceed through the largest municipal bankruptcy case in U.S. history," asserts Detroit attorney Tom Stephens in a piece he wrote for the lefty publication CounterPunch. "Jones Day and Orr are mercenaries plagued by conflicts of interest, who have repeatedly demonstrated their lack of candor, integrity and faithfulness to our interests. They should be fired and replaced by competent professionals who are in a position to truly represent Detroit."

There is certainly reasonable cause to assume Orr may not be doing what is best for the city. That may be on purpose, or happenstance. Either way, there are clear grounds for suspicion.

Who Knew What When?

I suspect both Bank of America and the city officials knew that pledging casino receipts was questionable if not fraudulent. If it could be proven the parties knew it was fraud, then everyone involved should be facing criminal charges.

Unless the law is quite clear, proof may be difficult to come by. Either way, I can see why both sides would not want a trial, because fraud charges are bound to come out. Perhaps Orr is aware, and is protecting not Bank of America/Merrill Lynch, but rather former city officials.

Regardless, if pledging casino receipts is illegal, even if there are no fraud charges, the loan becomes unsecured, not secured.

I strongly suspect that is the worst that could happen to Detroit were this to go to court.

Question of Fairness

Does any of this change what I said in Controversy in Detroit: What's a Fair Settlement of Bondholder and Pension Obligation Claims?

In terms of "how" a fair settlement is reached, the answer is not really. Yet, fraud may greatly influence settlement amounts and percentages. Here is the key snip.

Both the pension obligations and bondholder debt are unsecured debt.

Why not treat both pensioners and bondholders equally? The proposal currently on the table is for pensions to get 50 cents on the dollar (a 50% haircut) and bondholders 20 cents on the dollar (an 80% haircut).

I have a simple proposal. Give everyone 35 cents on the dollar (a 65% haircut). Neither side would be happy, but the ruling would be fair.

Essential Math

The $230 million Orr wanted to give Bank of America was 75 cents on the dollar. Thus, the actual amount owed is in the neighborhood of $307 million.

I see no way a court would return money already repaid back to Detroit unless the fraud was entirely one-sided, which I doubt. However, It seems highly likely a court would rule whatever the amount the city still owes is unsecured debt.

Final Thoughts

If there is fraud, I want to see criminal charges, whether on city officials, Bank of America officials, or both.
If all then unsecured creditors are treated equally, throwing that $307 million in the pot, might mean something like 40-45 cents on the dollar to everyone involved, not the 35 cents I originally proposed.
Whatever the math is, all unsecured debt should be treated similarly.

All eyes are on Judge Stephen Rhodes who appears to be doing a brilliant job. Orr's performance is questionable (once in favor of Bank of America, once in favor of Detroit pensioners). The best one can say about Orr, is that his actions are not completely one-sided.

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

The President spoke. Now:

# # #

Sat. February 8, 2014

The President spoke. Now:

When President Obama took the stage to deliver this year's State of the Union, he told the American people that he intends for 2014 to be a year of action. He said:

"…What I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class. Some require Congressional action, and I'm eager to work with all of you.

But America does not stand still -- and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that's what I'm going to do."

Those weren't just lines in a speech. It's been just 11 days since the State of the Union. In that time, the President has:

Directed the Department of the Treasury to create starter "myRA" accounts that will make it easier for Americans to save for retirement.
Ordered a government-wide review of federal training programs to make sure Americans get in-demand skills for good jobs.
Taken executive action to assist millions of long-term unemployed Americans -- and more than 300 companies have already committed to the Administration's best practices for hiring and recruiting the long-term unemployed.
Announced a major new commitment that will connect more than 20 million students to high-speed Internet -- and the private sector stepped up to the plate with more than $750 million in commitments to help make it happen.

And next Wednesday, he'll be using his pen again.

Don't take our word for it. See for yourself what action looks like -- and if you're ready for a year of action in 2014, let the President know you're in.