vineri, 29 iulie 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Replicate Google's Panda Questionnaire - Whiteboard Friday

Posted: 28 Jul 2011 03:44 PM PDT

Posted by caseyhen

Want to avoid the next Panda Update and improve your websites quality? This week Will Critchlow from Distilled joins Rand to discuss an amazing idea of Will's to help those who are having problem with Panda and others who want to avoid future updates. Feel free to leave your thoughts on his idea and anything you might do to avoid Panda.

 

Video Transcription

Rand: Howdy, SEOmoz fans. Welcome to a very special edition of Whiteboard Friday. I am joined today by Will Critchlow, founder and Director of Distilled, now in three cities - New York, Seattle, London. My God, 36 or 37 people at Distilled?

Will: That's right. Yeah, it's very exciting.

Rand: Absolutely amazing. Congratulations on all the success.

Will: Thank you.

Rand: Will, despite the success that Distilled is having, there are a lot of people on the Web who have been suffering lately.

Will: It's been painful.

Rand: Yeah. What we're talking about today is this brilliant idea that you came up with, which is essentially to replicate Google's Panda questionnaire, send it out to people, and help them essentially improve your site, make suggestions for management, for content producers, content creators, for people on the Web to improve their sites through this same sort of search signals that Panda's getting.

Will: That's right. I would say actually the core thing of this, what I was trying to do, is persuade management. This isn't necessarily about things that we as Internet marketers don't know. We could just look at the site and tell people this, but that doesn't persuade a boss or a client necessarily. So a big part of this was about persuasion as well.

So, background, I guess, people probably know but Goggle gave this questionnaire to a bunch, I think they used students mainly to assess a bunch of websites, then ran machine learning algorithms over the top of that so that they could algorithmically determine the answer.

Rand: Take a bunch of metrics from maybe user and usage data, from possibly linked data, although it doesn't feel like linked data, but certainly onsite analysis, social signals, whatever they've got. Run these over these pages that had been marked as good or bad, classified in some way by Panda questionnaire takers, and then produce results that would push down the bad ones, push up the good ones, and we have Panda, which changed 12% of search results in the U.S.

Will: Yeah, something like that.

Rand: And possibly more.

Will: And repeatedly now, right? Panda two point whatever and so forth. So, yeah, and of course, we don't know exactly what questions Google asked, but . . .

Rand: Did you try to find out?

Will: Obviously. No luck yet. I'll let you know if I do. But there's a load of hints. In fact, Google themselves have released a lot of these questions.

Rand: That's true. They talked about it in the Wired article.

Will: They did. There have been some that have come out on Search Engine Land I think as well. There have been some that have come out on Twitter. People have referred to different kinds of questions.

Rand: Interesting. So you took these and aggregated them.

Will: Yeah. So I just tried to pull . . . I actually ignored quite a chunk that I found because they were hard to turn into questions that I could phrase well for the kinds of people I knew I was going to be sending this questionnaire to. Maybe I'll write some more about that in the accompanying notes.

Rand: Okay.

Will: I basically ended up with some of these questions that were easy to have yes/no answers for anybody. I could just send it to a URL and say, "Yes or no?"

Rand: Huh, interesting. So, basically, I have a list of page level and domain level questions that I ask my survey takers here. I put this into a survey, and I send people through some sort of system. We'll talk about Mechanical Turk in a second. Then, essentially, they'll grade my pages for me. I can have dozens of people do this, and then I can show it to management and say, "See, people don't think this is high enough quality. This isn't going to get past the Panda filter. You're in jeopardy."

Will: That's right. The first time I actually did this, because I wasn't really sure whether this was going to be persuasive or useful even, so I did it through a questionnaire I got together and sent it to a small number of people and got really high agreement. Out of the 20 people I sent the questionnaire to, for most questions you'd either see complete disagreement, complete disarray, basically people saying don't know, or you'd see 18 out of 20 saying yes or 18 out of 20 saying no.

Rand: Wow.

Will: With those kind of numbers, you don't need to ask 100 people or 1,000 people.

Rand: Right. That's statistically valid.

Will: This is looking like people think this.

Rand: People think this article contains obvious errors.

Will: Right. Exactly. So I felt like straight away that was quite compelling to me. So I just put it into a couple of charts in a deck, took it into the client meeting, and they practically redesigned that "catch me" page in that meeting because the head of marketing and the CEO were like okay, yeah.

Rand: That's fantastic. So let's share with people some of these questions.

Will: And they're simple, right, dead simple.

Rand: So what are the page level ones?

Will: Page level, what I would do is typically find a page of content, a decent, good page of content on the site, and Google may well have done this differently, but all I did was say find a recent, good, well presented, nothing desperately wrong with it versus the rest of the content on the site. So I'm not trying to find a broken page. I'm just trying to say here's a page.

Rand: Give me something average and representative.

Will: Right. So, from SEOmoz, I would pick a recent blog post, for example.

Rand: Okay, great.

Will: Then I would ask these questions. The answers were: yes, no, don't know.

Rand: Gotcha.

Will: That's what I gave people. Would you trust the information presented here?

Rand: Makes tons of sense.

Will: It's straightforward.

Rand: Easy.

Will: Is this article written by an expert? That is deliberately, vaguely worded, I think, because it's not saying are you certain this article's written by an expert? But equally, it doesn't say do you think this article . . . people can interpret that in different ways, but what was interesting was, again, high agreement.

Rand: Wow.

Will: So people would either say yes, I think it is. Or if there's no avatar, there's no name, there's no . . . they're like I don't know.

Rand: I don't know.

Will: And we'd see that a lot.

Rand: Interesting.

Will: Does this article have obvious errors? And I actually haven't found very many things where people say yes to this.

Rand: Gotcha. And this doesn't necessarily mean grammatical errors, logical errors.

Will: Again, it's open to interpretation. As I understand it, so was Google's. There are some of these that could be very easily detected algorithmically. If you're talking spelling mistakes, obviously, they can catch those. But here, where we're talking about they're going to run machine learning, it could be much broader. It could be formatting mistakes. It could be . . .

Rand: Or this could be used in concert with other questions where they say, boy, it's on the verge and they said obvious errors. It's a bad one.

Will: Exactly.

Rand: Okay.

Will: Does the article provide original content or information? A very similar one. Now, as SEOs, we might interpret this as content, right?

Rand: But a normal survey taker is probably going to think to themselves, are they saying something that no one has said before on this topic?

Will: Yeah, or even just, "Do I get the sense that this has been written for this site rather than just cribbed from somewhere?"

Rand: Right.

Will: And that may just be a gut feel.

Rand: So this is really going to hurt the Mahalos out there who just aggregate information.

Will: You would hope so, yeah. Does this article contain insightful analysis? Again, quite vague, quite open, but quite a lot of agreement on it. Would you consider bookmarking this page? I think this is a fascinating question.

Rand: That's a beautiful one.

Will: Obviously, again, here I was sending these to a random set of people, again which, as I understand it, is very similar to what Google did. They didn't take domain experts.

Rand: Ah, okay.

Will: As I understand it. They took students, so smart people, I guess.

Rand: Right, right.

Will: But if it's a medical site, these weren't doctors. They weren't whatever. I guess some people would answer no to this question because they're just not interested in it.

Rand: Sure.

Will: You send an SEOmoz page to somebody who's just not . . .

Rand: But if no one considers bookmarking a page, not even consider it, that's . . .

Will: Again, I think the consider phrasing is quite useful here, and people did seem to get the gist, because they've answered all of the questions by this point. I would send the whole set to one person as well. They kind of get what we're asking. Are there excessive adverts on this page? I love this question.

Tom actually was one of the guys, he was speculating early on that this was one of the factors. He built a custom search engine, I think, of domains that had been hit by the first Panda update, and then was like, "These guys are all loaded with adverts. Is that maybe a signal?" We believe it is, and this is one of the ones that management just . . . so this was the one where I presented a thing that said 90% of people who see your site trust it. They believe that it's written by experts, it's quality content, but then I showed 75% of people who hit your category pages think there are too many adverts, too much advertising.

Rand: It's a phenomenal way to get someone to buy in when they say, "Hey, our site is just fine. It's not excessive. There's tons of websites on the Internet that do this."

Will: Yeah.

Rand: And you can say, "Let's not argue about opinions."

Will: Yes.

Rand: "Let's look at the data."

Will: Exactly. And finally, would you expect to see this article in print.?

Rand: This is my absolute favorite question, I've got to say, on this list. Just brilliant. I wish everyone would ask that of everything that they put on the Internet.

Will: So you have a chart that you published recently that was the excessive returns from exceptional content.

Rand: Yeah, yeah.

Will: Good content is . . .

Rand: Mediocre at this point in terms of value.

Will: And good is good, but exceptional actually has its exponential. I think that's a question that really gets it.

Rand: What's great about this is that all of the things that Google hates about content farms, all of the things that users hate about not just content farms but content producers who are low quality, who are thin, who aren't adding value, you would never say yes to that.

Will: What magazine is going to go through this effort?

Rand: Forget it. Yeah. But you can also imagine that lots of great pieces, lots of authentic, good blog posts, good visuals, yeah, that could totally be in a magazine.

Will: Absolutely. I should mention that I think there's some caveats in here. You shouldn't just take this blindly and say, "I want to score 8 out of 8 on this." There's no reason to think that a category page should necessarily be capable of appearing in print.

Rand: Or bookmarked where the . . .

Will: Yes, exactly. Understand what you're trying to get out of this, which is data to persuade people with, typically, I think.

Rand: Love it, love it. So, last set of questions here. We've got some at the domain level, just a few.

Will: Which are similar and again, so the process, sometimes I would send people to the home page and ask them these questions. Sometimes I would send them to the same page as here. Sometimes it would be a category page or just kind of a normal page on the site.

Rand: Right, to give them a sense of the site.

Will: Yeah. Obviously, they can browse around. So the instructions for this are answer if you have an immediate impression or if you need to take some time and look around the site.

Rand: Go do that.

Will: Yeah. Would you give this site your credit card details? Obviously, there are some kinds of sites this doesn't apply to, but if you're trying to take payment, then it's kind of important.

Rand: A little bit, a little bit, just a touch.

Will: There's obvious overlaps with all of this, with conversion rate optimization, right? This specific example, "Would you trust medical information from this site," is one that I've seen Google refer to.

Rand: Yeah, I saw that.

Will: They talk about it a lot because I think it's the classic rebuttal to bad content. Would you want bad medical content around you? Yeah, okay. Obviously, again only applies if you're . . .

Rand: You can swap out medical information with whatever type is . . .

Will: Actually, I would just say, "Would you trust information from this site?" And just say, "Would you trust it?"

Rand: If we were using it on moz, we might say, "Would you trust web marketing information? Would you trust SEO information? Would you trust analytics information?"

Will: Are these guys domain experts in your opinion? This is almost the same thing. Would you recognize this site as an authority? This again has so much in it, because if you send somebody to Nike.com, no matter what the website is, they're probably going to say yes because of the brand.

Rand: Right.

Will: If you send somebody to a website they've never heard of, a lot of this comes down to design.

Rand: Yes. Well, I think this one comes down to . . .

Will: I think an awful lot of it does.

Rand: A lot of this comes down to design, and authority is really branding familiarity. Have I heard of this site? Does it seem legitimate? So I might get to a great blog like StuntDouble.com, and I might think to myself, I'm not very familiar with the world of web marketing. I haven't heard of StuntDouble, so I don't recognize him as an authority, but yeah, I would probably trust SEO information from this site. It looks good, seems authentic, the provider's decent.

Will: Yeah.

Rand: So there's kind of that balance.

Will: Again, it's very hard to know what people are thinking when they're answering these questions, but the degree of agreement is . . .

Rand: Is where you get something. So let's talk about Mechanical Turk, just to end this up. You take these questions and put them through a process using Mechanical Turk.

Will: So I actually used something called SmartSheet.com, which is essentially a little bit like Google Doc spreadsheets. It's very similar to Google Doc spreadsheets, but it has an interface with Mechanical Turk. So you can just literally put the column headings as the questions. Then, each row you have the page that you want somebody to go to, the input, if you like.

Rand: The URL field.

Will: So SEOmoz.org/blog/whatever, and then you select how many rows you want, click submit to Mechanical Turk, and it creates a task on Mechanical Turk for each row independently.

Rand: Wow. So it's just easy as pie.

Will: Yeah, it's dead simple. This whole thing, putting together the questionnaire and gathering it the first time, took me 20 minutes.

Rand: Wow.

Will: I paid $0.50 an answer, which is probably slightly more than I would have had to, but I wanted answers quickly. I said, "I need them returned in an hour," and I said, "I want you to maybe have a quick look around the website, not just gut feel. Have a quick look around." I did it for 20, got it back in an hour, cost me 10 bucks.

Rand: My God, this is the most dirt cheap form of market research for improving your website that I can think of.

Will: It's simple but it's effective.

Rand: It's amazing, absolutely amazing. Wow. I hope lots of people adopt this philosophy. I hope, Will, you'll jump into the Q&A if people have questions about this process.

Will: I will. I will post some extra information, yeah, definitely.

Rand: Excellent. And thank you so much for joining us.

Will: Anytime.

Rand: And thanks to all of you. We'll see you again next week for another edition of Whiteboard Friday. Take care.

Will: Bye.

Video transcription by Speechpad.com


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BREAKING: President Obama's Statement on Debt Negotiations

The White House Friday, July 29, 2011
 


This morning President Obama delivered a statement once again calling on Congress to compromise to avoid defaulting on the Nation’s debt and calling on the American people to make their voices heard in this debate.

Watch the video.

Read the President’s statement:

Good morning, everybody.  I want to speak about the ongoing and increasingly urgent efforts to avoid default and reduce our deficit.

Right now, the House of Representatives is still trying to pass a bill that a majority of Republicans and Democrats in the Senate have already said they won’t vote for.  It’s a plan that would force us to re-live this crisis in just a few short months, holding our economy captive to Washington politics once again.  In other words, it does not solve the problem, and it has no chance of becoming law.  

What’s clear now is that any solution to avoid default must be bipartisan.  It must have the support of both parties that were sent here to represent the American people -– not just one faction.  It will have to have the support of both the House and the Senate.  And there are multiple ways to resolve this problem.  Senator Reid, a Democrat, has introduced a plan in the Senate that contains cuts agreed upon by both parties.  Senator McConnell, a Republican, offered a solution that could get us through this.  There are plenty of modifications we can make to either of these plans in order to get them passed through both the House and the Senate and would allow me to sign them into law.  And today I urge Democrats and Republicans in the Senate to find common ground on a plan that can get support -- that can get support from both parties in the House –- a plan that I can sign by Tuesday. 

Now, keep in mind, this is not a situation where the two parties are miles apart.  We’re in rough agreement about how much spending can be cut responsibly as a first step toward reducing our deficit.  We agree on a process where the next step is a debate in the coming months on tax reform and entitlement reform –- and I’m ready and willing to have that debate.  And if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I’ll support that too if it’s done in a smart and balanced way.   

So there are plenty of ways out of this mess.  But we are almost out of time.  We need to reach a compromise by Tuesday so that our country will have the ability to pay its bills on time, as we always have -- bills that include monthly Social Security checks, veterans’ benefits and the government contracts we’ve signed with thousands of businesses.  Keep in mind, if we don’t do that, if we don’t come to an agreement, we could lose our country’s AAA credit rating, not because we didn’t have the capacity to pay our bills -- we do -- but because we didn’t have a AAA political system to match our AAA credit rating.

And make no mistake -– for those who say they oppose tax increases on anyone, a lower credit rating would result potentially in a tax increase on everyone in the form of higher interest rates on their mortgages, their car loans, their credit cards.  And that’s inexcusable.

There are a lot of crises in the world that we can’t always predict or avoid -– hurricanes, earthquakes, tornadoes, terrorist attacks.  This isn’t one of those crises.  The power to solve this is in our hands.  And on a day when we’ve been reminded how fragile the economy already is, this is one burden we can lift ourselves.   We can end it with a simple vote –- a vote that Democrats and Republicans have been taking for decades, a vote that the leaders in Congress have taken for decades.

It’s not a vote that allows Congress to spend more money.  Raising the debt ceiling simply gives our country the ability to pay the bills that Congress has already racked up.  I want to emphasize that.  The debt ceiling does not determine how much more money we can spend, it simply authorizes us to pay the bills we already have racked up.  It gives the United States of America the ability to keep its word. 

Now, on Monday night, I asked the American people to make their voice heard in this debate, and the response was overwhelming.  So please, to all the American people, keep it up.  If you want to see a bipartisan compromise -– a bill that can pass both houses of Congress and that I can sign -- let your members of Congress know.  Make a phone call.  Send an email.  Tweet.  Keep the pressure on Washington, and we can get past this.

And for my part, our administration will be continuing to work with Democrats and Republicans all weekend long until we find a solution.  The time for putting party first is over.  The time for compromise on behalf of the American people is now.  And I am confident that we can solve this problem.  I’m confident that we will solve this problem.  For all the intrigue and all the drama that’s taking place on Capitol Hill right now, I’m confident that common sense and cooler heads will prevail.

But as I said earlier, we are now running out of time.  It’s important for everybody to step up and show the leadership that the American people expect.

Thank you. 

P.S. Check out this infographic to find out how we accumulated so mach national debt in the first place:

See the Chart



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54.5 mpg by 2025: President Obama Announces New Fuel Economy Standards

The White House Friday, July 29, 2011
 

Today, President Obama announced the next phase in the Administration’s program to increase fuel efficiency and reduce greenhouse gas pollution for all new cars and trucks sold in the United States.

These new fuel economy standards will cover cars and light trucks for Model Years 2017-2025, requiring performance equivalent to 54.5 mpg in 2025 while reducing greenhouse gas emissions to 163 grams per mile.

Spanning Model Years 2011 to 2025, these standards will not only save consumers an estimated $1.7 trillion dollars in real fuel costs, over $8,000 per vehicle, but will reduce our dependence on oil and take huge steps to protect the environment, reducing carbon dioxide pollution by over 6 billion metric tons – equivalent to the emissions from the United Sates all of last year.

To learn more about how new fuel economy standards will save consumers money, reduce our dependence on oil and protect our environment read the blog post, view the graphic or download the full report (PDF). 


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West Wing Week: "Mutual Disposition"

The White House Your Daily Snapshot for
Friday, July 29, 2011
 

West Wing Week: "Mutual Disposition" 

Welcome to the West Wing Week, your guide to everything that's happening at 1600 Pennsylvania Ave. This week, The President held a town hall, met with the Prime Minister of New Zealand, honored the world series champions, spoke to Hispanic community advocates and addressed the Nation on the importance of compromising on a balanced approach to reduce the deficit. That's July 22nd to July 28th or "Mutual Disposition"  

Watch the video 



In Case You Missed It

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

Office Hours 7/28/11 or "GREAT question": Brian Deese Answers Your Questions on Twitter
Brian Deese, Deputy Director of the National Economic Council, answered your questions on the ongoing debt debate on Twitter during White House Office Hours.

White House Roundtable Meeting with Rural Leaders
Secretary of Agriculture Tom Vilsack reflects on a meeting held with leaders of rural organizations and the crucial points raised during the discussion on building stronger rural communities across the nation.

Winning the Future by Supporting Local Innovation
Through an inter-agency partnership, $95 million in grants has been made available for communities across the country to build more sustainable infrastructure.

Today's Schedule 

All times are Eastern Daylight Time (EDT).

10:20 AM: The President delivers a statement on the status of debt ceiling negotiations WhiteHouse.gov/live

10:50 AM: The President delivers remarks on Fuel Efficiency Standards WhiteHouse.gov/live (audio only)
 
12:30 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

3:10 PM: The President meets with President Yayi of Benin, President Alpha Conde of Guinea, President Mahamadou Issoufou of Niger, and President Alassane Ouattara of Cote d'Ivoire

WhiteHouse.gov/live Indicates events that will be live streamed on WhiteHouse.Gov/Live

Get Updates 

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Seth's Blog : Easy vs. do-able vs. impossible

Easy vs. do-able vs. impossible

Often we consider an opportunity based on how easy it is. The problem with this analysis is that if it's easy, it's often not worth doing. It's easy to start a blog, but of course, starting a blog doesn't really deliver a lot of value. Posting 4,100 blog posts in a row, though, isn't easy. It's do-able, clearly do-able, and might just be worth it.

Successful organizations seek out the do-able. When Amazon went after the big bookstore chains, analysts ridiculed them for doing something insanely difficult. But it was clearly do-able. Persistence and talent and a bit of luck, sure, but do-able.

Sometimes we seek out things that are actually impossible. Building a search engine that's just like Google but better is impossible (if your goal is to dominate the market with it). It's fun to do impossible projects because then you don't have to worry about what happens if you succeed... you have a safety net, because you're dreaming the impossible dream.

Do-able, though, is within our reach. Ignore easy.

 

 

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joi, 28 iulie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Boehner Humiliated, Cancels Vote, Stock Futures Tank; Stocks and Treasuries Unusually Correlated

Posted: 28 Jul 2011 10:00 PM PDT

Thursday morning Bloomberg reported House Majority Leader Cantor Predicts House Republicans Will Pass Debt Plan Today
House Majority Leader Eric Cantor predicted Republicans would pass a debt-limit increase plan today as some freshman lawmakers pledged support for the measure in the face of unified Democratic opposition in the Senate.
Vote Cancelled

Kiss that prediction of Cantor goodbye. Thursday evening Republicans put off vote on debt limit because Boehner clearly lacks the votes.
An intensive endgame at hand, Republican leaders abruptly postponed a vote Thursday night on legislation to avert a threatened government default and slice federal spending by nearly $1 trillion.

"The votes obviously were not there," conceded Rep. David Dreier, R-Calif., after Speaker John Boehner and the leadership had spent hours trying to corral the support of rebellious conservatives.

The decision created fresh turmoil as divided government struggled to head off an unprecedented default that would leave the Treasury without the funds needed to pay all its bills. Administration officials say Tuesday is the deadline for Congress to act.

Senate Democrats stood by to scuttle the bill -- if it ever got them -- as a way of forcing Republicans to accept changes sought by Obama.

Based on public statements by lawmakers themselves, it appeared that five of some two dozen holdouts were from South Carolina. The state is also represented by Sen. Jim DeMint, who has solid ties to tea party groups and is a strong critic of compromising on the debt issue.

Others said conservatives wanted additional steps taken to try to ensure that a constitutional balanced-budget amendment would be sent to the states for ratification. As drafted, the legislation merely requires both houses of Congress to vote on the issue.

Even before the House voted, Reid served notice he would stage a vote to kill the legislation almost instantly.

"No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now," he said.
Boehner Humiliated

Boehner was humiliated and justifiably so. He had nothing to gain and everything to lose by attempting to ram-rod a gaseous bill through the House that was guaranteed dead-on-arrival in the Senate.

Majority leader Cantor made matters worse by predicting passage.

Stock Futures Tank in Unusual Correlation with Treasuries

Please consider U.S. S&P 500 Futures Retreat as McCarthy Says No Vote on Debt Plan Tonight
Futures on the Standard & Poor's 500 Index fell after the U.S. House of Representatives postponed a vote to increase the nation's debt limit, boosting concern that the lawmakers are far from an agreement to avoid default.

S&P 500 futures expiring in September lost 0.8 percent to 1,286.9 at 12:28 p.m. in Tokyo. The decline suggests the U.S. equity benchmark may extend its 3.3 percent slump from the past four days when markets open in New York.

Stocks and Treasuries are moving in tandem twice as often as they normally do, a sign investors are growing convinced the U.S. will lose its AAA credit rating and that an impasse among lawmakers may spur losses in both markets. The S&P 500 has risen or fallen together with 10-year Treasury notes 80 percent of the time in the last 10 days, compared with the average since 2000 of 41 percent, according to data compiled by Bloomberg.
Not Raising the Debt Ceiling Would be Blessing

I am sticking to what I said in Not Raising the Debt Ceiling Would be Blessing; Debt Limit Analysis; Interactive Map, You Decide What Not To Pay
All things considered, especially since Boehner's credibility is gone in his latest gaseous proposal, the best thing for Congress to do would be to NOT hike the debt ceiling and work out a credible plan over the next month.
Is Mish a "closet Liberal-humanist?"

In response to that post I received a humorous email from "BC" who wrote...
Mish, your choices reveal your empathy! Are you a closet Liberal-humanist?!

Your choices favor the elder working class, the working-class and poor ill, unemployed, poor and "food challenged", and imperial legionaries and auxiliaries against the corporate-statists!!!

Are you one of those maladjusted working-class types who just doesn't "get it"?!

Wink , wink ;-) ;-).
To see my choices as to what I would cut and to make your own choices about what to do if the debt ceiling is not raised, click on the above link for an interactive map.

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


Not Raising the Debt Ceiling Would be Blessing; Debt Limit Analysis; Interactive Map, You Decide What Not To Pay

Posted: 28 Jul 2011 01:03 PM PDT

As the chances of a gaseous Congressional compromise to do nothing about deficit reduction grow larger, inquiring minds wonder just what might happen if nothing passes.

Contrary to popular belief, the US would not default. Troops would still be paid. Medicare and Medicaid would not stop. The Bipartisan Policy Center has a nice analysis in a PDF on Debt Limit Analysis.

NO "SILVER BULLETS" TO EXTEND DATE



  • Our analysis also shows that the X Date will fall between August 2 and August 9. On July 1st, Treasury publicly reaffirmed their estimate of the X Date as August 2
  • The 14thAmendment does not provide a reasonable basis for challenging the constitutionality of the debt ceiling. The Administration will not attack the debt ceiling on this basis
  • Treasury has no secret bag of tricks to finance government operations past August 2. Treasury will not attempt to "firesale" assets during a crisis.
  • Other ideas are impractical, illegal and/or inappropriate (gold loans, IOUs)
  • There is no precedent; all other debt limit impasses have been resolved without passing the X Date
  • The government shutdown of 1995 –96 does not provide a precedent

Prioritization



Obama's, Geithner's, and Bernanke's statements about default simply are not credible. Nor are threats of cutoffs to military pay or Social Security. Indeed those totals allow Medicaid and Medicare to be paid.

The PDF covers alternate scenarios of what can and cannot be paid.

Interactive Map, You Decide What Not To Pay

I contend there is easily a month or more to work out a better deal. There are many programs we can easily do away with that should not be funded at all.

Please consider You choose: who gets paid (and who doesn't)
On August 2, the federal government will not have enough cash to pay for all of its programs and obligations. The U.S. will take in a total of $172.4 billion in revenue during the month, but its total payments exceed $306 billion, resulting in a $134 billion shortfall. If a debt-limit increase is not approved, the U.S. Treasury will have to choose among 80 million monthly payments and prioritize which programs are funded and which ones are not.
Mish Choices



click on chart for sharper image

As you can see, I have $30.6 billion to spare.

The first thing TO pay is interest on the national debt. It is non-payment of interest that would constitute default. Given $29 billion is easily payable, talk of default if Congress does nothing is the height of silliness.

The first thing to NOT pay should be congressional salaries.

As you can clearly see there are many things that would be a benefit to not pay, and never pay again.

Things to Not Pay and Never Pay Again

  • Department of Education - $20.2 Billion
  • Health and Human Services Grants - $8.1 Billion
  • HUD - $6.7 Billion
  • Department of Energy - $3.5 Billion
  • Department of Labor - $1.3 Billion
  • Small Business Administration - $0.3 Billion
  • Other Spending - $52.8 Billion

Clearly those things would have to be phased out, but the total of those things is a whopping $92.9 billion. That "Other Spending" category may have some essentials, but certainly most of it is not. Also bear in mind, I have $30.6 billion to spread around as needed. Some can go to salaries, but certainly not salaries of Congress.

In contrast, please see Boehner's Credibility Gone in Revised Proposal; Boehner Tells Congress to "Get Your Ass in Line"; Best Deal Republicans Can Get? for Boehner's revised cop-out.

All things considered, especially since Boehner's credibility is gone in his latest gaseous proposal, the best thing for Congress to do would be to NOT hike the debt ceiling and work out a credible plan over the next month.

Addendum:

The link at the top has been changed.

I received an email from Michael Stubel at the Bipartisan Policy Institute thanking me for the post and sending out an updated link.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Boehner's Credibility Gone in Revised Proposal; Boehner Tells Congress to "Get Your Ass in Line"; Best Deal Republicans Can Get?

Posted: 28 Jul 2011 10:54 AM PDT

It was bad enough when Boehner proposed a $3 Trillion deficit cutting proposal that the CBO said would only cut the deficit by a mere $850 billion.

Please see Rating the Obama, Reid, and Boehner Deficit Reduction Plans on Mish's 10-Point Credibility Scale for details.

However, one can make excuses for a "one-time" mistake. However when you submit a second plan that the CBO says will only cut the deficit by $950 billion you lose all credibility. Nonetheless, Boehner tells Congress ...

"Get Your Ass In Line"

Bloomberg reports Boehner Revises Debt Proposal as Aug. 2 Nears
Republican leaders were moving ahead with plans to vote on the measure tomorrow, less than one week before a potential U.S. default Aug. 2, and sought to ease party members' concerns that it wouldn't cut spending enough. The Congressional Budget Office said Boehner's new plan would cut $915 billion in spending over a decade, still short of the $2.2-trillion Senate plan.

Boehner, when asked by radio host Laura Ingraham whether he told members at a closed-door meeting today to get "your A-word in line" behind his debt bill, said: "I sure did. Listen, this is time to do what is doable."

Boehner's plan would promise another debt-limit showdown in the 2012 election year unless Republicans and Democrats agree by the end of this year to reduce deficits. President Barack Obama and congressional Democrats insist on extending the nation's borrowing authority through the 2012 elections, saying continued uncertainty would harm financial markets.

An analysis by the nonpartisan CBO of Boehner's revised plan said it would cut spending by $915 billion, compared with $850 billion for his original plan. This still was less than the $1.2 trillion advertised by party leaders for an initial round of cuts, which prompted leaders to cancel today's scheduled House vote on the bill.
Boehner's Credibility Gone In Second Gaseous Proposal

The best Boehner could come with over the course of 10 full years, is another $65 Billion! My dead grandmother could find more than that.

With that gaseous proposal, Boehner's credibility is burnt toast.

Moreover, the Senate will likely reject any of these proposals of Boehner that require a balanced budget amendment. So what is the point other than to put on a ridiculous show?

It would be one thing if his plan contained debt reductions of substance. But in two attempts, Boehner could only find a mere $95 billion a year in cuts when the deficit is a shocking $1.4 trillion.

On my 10-point credibility scale, Boehner passed #7 "Nauseous" and is now solidly in the #8 spot of "Gaseous". The next step is "Imaginary" where President Obama's nonexistent plan sits.

Governor Chris Christie Blasts Obama

New Jersey Governor Chris Christie blasted Obama for not having a plan, telling the president ""You Can't Lead From Behind".

Please see Chris Christie on Obama's Unwillingness to Submit a Deficit Plan "You Can't Lead From Behind" for details and a video.

Exercise in Futility

Meanwhile in an exercise in futility Boehner Moves Ahead on Debt.
House Republican leaders pleaded with their recalcitrant rank and file Thursday to back a plan to stave off an unprecedented government default next week. The House vote would bring President Barack Obama and congressional leaders one step closer to the endgame before Tuesday's deadline.

Republicans are seeking deep spending cuts in exchange for raising the nation's $14.3 trillion debt limit. The White House has threatened to veto the House GOP bill even if it makes it through the Senate, where it faces unanimous opposition among Senate Democrats. Still, getting the newly modified House plan passed on Thursday was seen as an important step toward the process of finding a compromise between the House and Senate proposals.

In a closed-door GOP meeting just hours before a scheduled vote, Speaker John Boehner, R-Ohio, made headway in getting toward the 217 votes necessary to pass his plan in the House. No Democrats were expected to support it. Boehner told the Republicans he expected to round up enough votes but was not there yet.

"But today is the day," he said, according to people in the room.

"I think it's the best deal we can get," said Rep. Steve Chabot, R-Ohio, who said he had dropped his opposition. Rep. Walter Jones, R-N.C., said he would back the measure to ensure that Boehner "has a seat at the table" for the endgame negotiations.
Best Deal You Can Get?

Notice the rank and file starting to cave in to Boehner's gaseous proposal. Rep. Steve Chabot, R-Ohio called it "the best deal we can get."

No it's not. It's not even the best deal you can't get. The Senate will not go along, so there is nothing to get.

As long as you are going to submit proposals you can't get, you may as well make it a good one. $950 billion over 10 years is not a good deal. It's not even a down payment on a good deal, and with that, Boehner just pissed away his credibility.

In the end, something will pass. But it will not do a damn thing credible to reduce the deficit. Reid's plan and Boehner's plan are both back-loaded.

Republicans had a golden opportunity to attempt to extract some major concessions in return for tiny tax concessions. Instead, they are going to settle for nothing. This fiasco is exactly why Republicans need someone like Chris Christie running for president. No one else has managed to show any leadership.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Italy Bonds Smacked in Selloff, Yields Now Approach Spain; Vote of "No Confidence" on Debt Plan

Posted: 28 Jul 2011 09:32 AM PDT

Investors wasted not time in a vote of no confidence on the latest debt package supposed to save Europe. 10-year Spanish government bonds are back above 6% and yields on Italian government bonds are close behind.

Bloomberg reports Italian Bonds Decline After Borrowing Costs Rise at Nation's Debt Sale
Italian bonds fell for a second day, increasing the yield spread over German bunds, after the nation's borrowing costs rose at a sale of 10-year debt and Standard & Poor's said Greece risks further defaults.

Italy's 10-year yield surged to the most in more than a week amid speculation a probe into a former aide of Finance Minister Giulio Tremonti may force him to step down. German yields fell to near a five-month low versus their U.S. counterparts as American lawmakers pushed conflicting plans to raise the nation's debt ceiling. Bunds rose for fifth day, the longest streak since April.

Italian Auction

Italy sold 2.7 billion euros of its 10-year benchmark security, less than the maximum target of 3 billion euros. The debt was priced to yield 5.77 percent, higher than 4.94 percent the last time the securities were sold on June 28, and drew bids for 1.38 times the securities on offer, compared with 1.33 times. In six sales of 10-year bonds this year, the average bid- to-cover ratio was 1.42 and the average yield was 4.81 percent.

"With Italy investors have recognised that the debt ratio is 120 percent" of gross domestic product, said Julian Callow, chief European economist at Barclays Capital in London. "That's very high. Any country really above 80 ought to be getting concerned and looking at ways of bringing down that ratio. When you're above 100, that's flashing red signals. As well, in Italy you've had very weak economic growth."

Irish bonds advanced for a third day after an S&P report said some provisions of the EU's rescue plan would help protect Ireland and Portugal.
Italy 10-Year Government Bonds



Spain 10-Year Government Bonds



Vote of "No Confidence"

Although yields on Italian and Spanish debt are off the highs of the day, the direction is crystal clear. The proper way to look at trends of Spain and Italy is as a vote of no confidence in the latest plan, not as a vote of confidence on Finance Minister Giulio Tremonti .

Yields on Portuguese and Irish debt fell, supposedly on the belief the latest debt deal will lower borrowing costs. It won't. The S&P''s statement "some provisions of the EU's rescue plan would help protect Ireland and Portugal" is laughable.

There is no way the EU's EFSF, the European Financial Stability Facility, can cover Spain, let alone Italy.

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