So many things that would have been money losers then can be profitable today.
When you run your own concert, selling tickets online and renting the theatre out yourself, you might be able to keep 85 cents of every dollar your audience spends on a ticket. In the current system, by the time the box office, Ticketmaster, the stagehands, the promoters and everyone else takes a cut, you might end up with literally nothing.
Or consider a hardcover book that costs $20. By the time the bookstore keeps half, the publisher keeps a share for the risk she takes, and don't forget shipping and returns... there might only be $2 left for the author. With an ebook, the author might keep as much as $14 a copy... More if he hosts the store and sells it as a PDF.
A hairdresser with direct relationships with customers can give up the storefront location and make more money by charging less and cutting the hair in her home.
A newspaper can happily support a few reporters and an ad guy if it gives up the paper, the offices and the rest of the trappings.
Too often, we look at the new thing and demand to know how it supports the old thing. Perhaps, though, the question is, how does the new thing allow us to think skinnier.
The Democratic half of the Alabama Legislature's 25-member Jefferson County delegation opposes a settlement with holders of $3.14 billion in debt, throwing the deal in doubt, according to three lawmakers.
Democratic state Representatives Patricia Todd, John Rogers and Mary Moore said in phone interviews this week that most of the delegation dislikes the terms of the deal. Their party in particular will oppose bills necessary for its success because they believe it gouges the poor, who would have to pay higher fees. In Alabama, one lawmaker can block legislation pertaining to a county, thanks to a tradition of "local courtesy."
Without a settlement, Jefferson County might file the biggest municipal bankruptcy in U.S. history as early as December. Commissioners avoided a filing Sept. 16 by voting 4-1 for a deal with creditors, who agreed to concessions worth $1.1 billion. JPMorgan Chase & Co. (JPM), which arranged most of the debt, would take the biggest loss.
Jefferson County and its creditors set the end of this week as a deadline for an agreement. Officials had said they hoped to have a final draft by Oct. 15. At today's meeting, however, lawmakers said they wouldn't support the proposal's sewer-rate increases. Not one spoke in favor of the deal.
Kenneth Klee, the county's bankruptcy lawyer, told the lawmakers that a Jefferson County filing "would be like Chernobyl" for bond ratings in Alabama.
The settlement calls for three annual sewer-rate increases of as much as 8.2 percent, followed by annual boosts of no more than 3.25 percent. It requires the Legislature to approve "moral obligation" backing for new sewer debt and to create an independent authority -- a so-called government utility service commission -- to operate the system. It also requires a fix for a hole in the county operating revenue caused when a judge struck down a tax on wages.
Democratic lawmakers oppose the rate increases, a provision relieving JPMorgan of legal liability and the sewer authority, which Rogers said "is going to make somebody very, very wealthy on the backs of poor people."
I am not in favor of a "moral obligation" to bondholders, especially JP Morgan, especially when I believe JP Morgan's actions with Jefferson county constituted fraud.
This case has been lingering for years. This is what I said at the time ...
Clear Case Of Fraud
I am not an attorney but the facts presented suggest there is a clear case of fraud. Jefferson County should walk away from those deals and/or sue JPMorgan for fraud and antitrust violations.
JPMorgan for its part would be smart to absolve Jefferson County of those deals because there is no way for it to win. Even if JPMorgan won a lawsuit vs. Jefferson County, the county could simply declare bankruptcy.
The county wanted to declare bankruptcy but misguided fools in the Alabama legislature chose to bail out JP Morgan and bondholders instead of doing the right thing.
Fortunately the Democratic half of the Alabama Legislature's 25-member Jefferson County delegation is standing up to absurd "moral obligation" talk as well as ridiculous talk of "Chernobyl" bond ratings for Alabama.
Bankruptcy is not only in the best interest of Jefferson County taxpayers, it is also what JP Morgan and the bondholders deserve.
After losing a routine parliamentary vote on the budget, Silvio Berlusconi, the very annoyed prime minister of Italy called for a vote of confidence. The vote is expected on Friday.
I believe Berlusconi may lose a close vote. If not, he will be discarded by March.
Silvio Berlusconi is to stake the fate of his government and his own political future on a confidence vote in parliament on Friday.
Standing before a half-empty chamber boycotted by the opposition, he appealed on Thursday for support from the chamber of deputies, the lower house of the Italian parliament, saying: "There are no alternatives." Berlusconi decided to seek a vote of confidence after losing a crucial division on the public accounts earlier this week.
The result of the confidence vote is due at around 11.30am GMT on Friday. To survive, the government needs only to secure more votes than the opposition. If it loses, it is constitutionally bound to resign.
All but six deputies were missing from the opposition benches when the prime minister got up to speak, the main opposition parties having decided to stay away from the debate in protest at Berlusconi's refusal to step down.
Under mounting pressure from the courts, where he is a defendant in three trials, the prime minister leads an increasingly fractious party.
Unusually for a conservative government, Berlusconi's is under open attack from the leading bosses' federation, Confindustria. Alarm over the state of the economy also helps to explain the emergence in recent weeks of critical factions in the PdL, notably one centred on a former minister, Claudio Scajola, who resigned last year in an alleged corruption scandal.
Scajola said he and his followers would support the government on Friday and the PdL's parliamentary business managers appeared confident they could muster enough votes in the 630-member chamber. There has been widespread media speculation that rebels in the Northern League and Berlusconi's own party would prefer to wait until January before delivering a fatal blow to the government.
That could clear the way for an election in the spring – before taxpayers start to feel the full effects of the tax rises and spending cuts imposed in recent months. But with Berlusconi's approval rating below 25% in the polls, the right has a vast amount of ground to make up.
Even by the standards of Berlusconi's roller-coaster ride in politics, the billionaire's grip on power is hanging by a thread. The "parliamentary accident" he mentioned in his speech took place earlier this week, when his weakened coalition lost a key parliamentary vote on the budget by one ballot. This defeat led to opposition calls for Berlusconi to resign and presidential encouragement that he put his government's stability to the test.
After the vote, amid cheers from the opposition, a clearly furious Berlsuconi shoved past Finance Minister Giulio Tremonti, who showed up just seconds too late to cast what would have been the decisive ballot. Tension between the two was already high; Tremonti has been pushing for unpopular reforms in his bid to shore up Italy's finances, at a time when Berlsuconi's top priority is clinging to his position.
Court complications
Berlusconi is also under personal pressure in Italy's courts, facing four separate trials and allegations ranging from fraud to paying for sex with a minor. Given the constant flow of revelations from his now-infamous "bunga bunga" sex parties, more cases could be in the pipeline. This, coupled with the country's economic woes, has put the prime minister's popularity rating at an all-time low.
Berlusconi's speech was primarily a rallying cry aimed at his supporters - many of the opposition parties boycotted the address - ahead of Friday's vote of confidence, the second his government will have faced this year.
Amid the widening rifts among erstwhile allies, economists and business leaders have suggested that an interim government of some type should take over as Italy fights a national debt approaching 120 percent of gross domestic product.
Should Berlsuconi's government lose Friday's vote, the premier would be obliged to resign.
Italian Government Bond Yields Surge to 5.82%
Inquiring minds note the selloff in Italian and Greek Bonds.
Bear in mind the ECB stepped in yesterday to purchase 6.18 billion euros of bonds. Without ECB support, Italian bonds yields would be North of 7%.
Well over half the rally (declining yields) when the ECB first stepped in has been taken back.
Greece 1-Year Government Bonds
Less than two weeks ago the Central bank of France insisted there were no toxic debts in French banks.
"I'm extremely confident" in French banks because "we know them very well. We know their balance sheets, their risk assessments. We know they have no toxic assets."
There is "absolutely no reason" to activate a support system for the nation's banks that was set up during the financial crisis in 2008.
Markets "are over-reacting," he said. "They need to come back to a sense of reality."
All of those are blatantly preposterous. However, lie number 1 has to be one of the top lies of the year. "French banks have no toxic assets"?!
For starters, what about Greek bonds about to take a 50% haircut or more in default? That lie is so ridiculous no one on the planet can possibly believe it.
Stupid lies (or blatant idiocy as stated by Noyer) only to be proven false a week later, does nothing for the credibility of the ECB or the Bank of France.
Mistrust is everywhere and lies foster that mistrust.
The percentage of Americans who approve of the job Congress is doing returned to 13% in October, matching the all-time Gallup low on this measure, first recorded in December 2010 and repeated in August.
click on chart for sharper image
Congress' approval has been low all year, registering below 20% each month since June. The latest results are based on a Gallup poll conducted Oct. 6-9.
Behind the recent rock-bottom ratings is subpar approval from all three party groups. Republicans' and independents' approval of Congress in 2011 has consistently been below 25%, and more often below 20%. After averaging 24% from January through July, Democrats' approval fell sharply in August, to 15%, and has remained lower than that since.
Currently, Republicans' and Democrats' approval of Congress is identical, at 14%, similar to the 13% among independents.
Clearly people are unhappy, and it's primarily about jobs. Secondarily it's about Congressional bickering and not getting anything done about the deficit (or anything else).
Congressional Scorecard
There have been no structural reforms and no desperately needed repeal of Davis-Bacon.
No legislators brought right-to-work laws as a bargaining chip in the budget negotiations.
Lobbyists effectively write our legislation.
There are no pending measures for campaign finance reforms
The bank reforms that did pass have been both toothless and useless.
The healthcare bill that passed is a disaster
Attempts to reform Medicare failed
Military spending is extraordinarily wasteful but Congress likes to funnel wasteful spending to their districts to create jobs
No one believes either party will rein in deficit spending (and they won't)
Congressional compromise amounts to spending more on the military in return for spending more on social programs. Economically we can afford neither.
Factor into the picture a jobless non-recovery with real wages falling, and the Congressional approval rating is both easy to understand and well deserved.
European banks could get up to six months to strengthen their capital under plans aimed at halting the region's debt crisis, giving them time to raise funds privately in the hope of averting another damaging credit crunch.
EU officials said on Thursday that weak banks may get the extra time to bolster their balance sheets after a rapid health check currently underway.
The European Banking Authority, which is assessing banks' capital needs, is likely to mark down the value of banks' holdings of sovereign debt to market value and require lenders to hold a 9 percent core Tier 1 capital ratio, an EU source told Reuters.
Deutsche Bank, Germany's flagship lender, would need 9 billion euros in fresh equity to reach that level, two people with direct knowledge of the bank's finances said on Thursday.
Deutsche Bank declined to comment, but in separate remarks the bank's chief executive Josef Ackermann said it would do all it could to avoid a forced recapitalization and added it had enough funds of its own to cope with a crisis.
Setting the bar at 9 percent would leave European banks with a capital shortfall of about 260 billion euros, based on a two-year recession and applying current market prices to holdings of Greek, Irish, Italian, Portuguese and Spanish government bonds, according to Reuters Breakingviews data.
Greece's banks could have to raise over 30 billion euros under the plan, as they face big losses on their holdings of domestic bonds.
Banks are facing losses of 39 percent on their Greek bonds under a private sector rescue plan agreed in July, above the original estimate of a 21 percent hit, due to a rise in Greece's risk profile.
Greek banks could endure a loss of up to 30 percent on the bonds but could not stand significantly bigger haircuts, which would also hurt the economy, Greek banking sources said.
European leaders are still discussing the recapitalization plans, with many details still subject to change, and face intense lobbying from banks and some countries who say it is too harsh. Proposals are expected to be presented to a meeting of European leaders on October 23.
The new standard is likely to be a 9 percent core tier 1 ratio, a key measure of a bank's financial health, based on a tighter definition of capital than used now, although not as strict as that under new Basel III rules when in full force
Analysts at Credit Suisse said a 9 percent capital level would leave banks in need of 220 billion euros, with RBS, Deutsche Bank and BNP Paribas most in need.
Note that 39% haircut figure on Greek bonds. Although up from 21% in July, it is far too low. Anything under 50% is preposterous and 80% or higher losses would not be surprising in the least.
Capital Shortfall Estimates of European Banks Range from 8 to 413 Billion Euros
Citigroup estimates there is a capital shortfall of between €64 billion and €216 billion for banks to achieve a minimum core Tier 1 ratio of 7% to 9%, respectively.
Credit Suisse came up with a similar figure of €220 billion for the potential 9% scenario.
Analysts at Espirito Santo said write-downs at current market prices on Greek, Portuguese, Irish, Italian and Spanish bonds, along with a higher minimum capital ratio of around 9%, could require as much as €413 billion in new capital across the sector.
Merrill Lynch analysts in turn came up with estimates of between €7.6 billion and €143 billion in required capital for the region's major banks, depending on various scenarios.
These ranges provide more questions than answers. Moreover, low-end lowball estimates such as €7.6 billion by Merrill Lynch are preposterous under all but the most ludicrous scenarios in the third round of "stress-free" tests now underway.
Deutsche Bank AG Chief Executive Josef Ackermann says it isn't clear recapitalization efforts will help solve the crisis.
Hey, let's just not recognize any bank losses ever.
Addendum:
Zero Hedge has some interesting charts of capital shortfalls as estimated by Credit Suisse. Commentary and charts below from Credit Suisse. No link provided. Click on charts for sharper image.
One of our conclusions was that the overall European banking sector is facing a €400bn capital shortfall which compares to a current market cap of €541bn.
The table below details the breakdown of our estimated capital shortfall.
Figure 6: European banks – Capital deficit in CS 'accelerated sovereign shock
We can all agree that a large timesink in outreach link building is site prospecting. Who really wants to spend the time to go through a bunch of pages on a site to figure out if the site is worthwhile? Further, if you’re following the “Throw Away Your Form Letters” principles then you are looking for content on a blogger or webmaster’s site that is of interest in order to start a conversation – but that takes a lot of time too. It would be awesome to scale that process wouldn’t it? Now, there’s an app for that.
I had the idea that if I spidered a site and matched the URLs with social metrics and then used natural language processing to figure out the core concepts of every page I could tell at a glance whether a site is worth my time and what content (if any) is popular. Note: I have purposely left out Linkscape’s metrics from this as I don’t believe we should waste API calls on what may be many worthless pages. You should identify the worthwhile pages and head over to Open Site Explorer. Sound good? Ok, let’s do this!
Natural Language Processing Explained
Natural Language Processing is a machine learning technique in which an application algorithmically performs text analytics to extract core concepts and in effect determine what a page is about. This type of distillation is the proxy between the written document and programming to allow a computer to “understand” content. As you can guess this is something that Google strongly leverages as can be seen in the “Systems and Methods for Inferring Concepts for Association with Content” patent from 2004.
There are a variety of awesome APIs that do natural language processing but for this we will be using Textwise simply because it’s entirely free.
Of course Rand is a pro so he titles his posts properly therefore the concepts “creative,” “typography” and “ux” come as no surprise here, but for less savvy writers and people who write more colorfully you may not be able to tell what a page is about from just the title. Also you get a better sense of what keywords, concepts or topics a computer will associate with a given page.
The next example is a page from QN5 Music (full disclosure: I do music with these guys and they are incredible) where the title “Thank You for An Incredible Evening” is somewhat vague.
The post is a recap of their 2011 Megashow but there’s no meta description so you may not be able to tell what the page is about when prospecting from an Excel sheet generated by Screaming Frog. Now let’s couple that with Textwise concepts:
At a glance you can guess that the page is about some sort of incredible music performance and there were puppets involved. You’d be wrong thinking that it was Rock music though, but that’s just the gift and the curse of ambiguity of words. In other words after 5 seconds you are about 90% correct as to what the page is about without ever looking at it.
Your New Best Friend SiteSkout
SiteSkout is a brand new tool I wrote in PHP that spiders a site, retrieves social metrics, scrapes the page title and meta description and pings Textwise for concepts and categories then shows you all that awesome information as it happens and then exports it to a CSV file for download and Excel ninjitsu. (*dusts off shoulder*)
There are a few options that will affect the speed at which this all happens. You can have it spider a site from a given URL just like you would Screaming Frog or Xenu but be warned single-threaded spidering is slow. So I would suggest you use Screaming Frog for your spidering and just dump the URLs to SiteSkout or use the HTML or XML Sitemap because it will just crawl those URLs for scraping purposes instead of crawling through every link trying to determine the URL of every page on the site.
Bring Your Own API
So while my “Using Social Media to Get Ahead of Search Demand” post may have underperformed by my personal standards (only 49 thumbs up) I learned a valuable lesson – if you put a tool on the front page of SEOmoz you better account for a very high number of API calls.
So for SiteSkout I’m encouraging users to bring their own API keys. The tool is built on 4 keys so it will run without it, but to ensure stability, signup for your own Textwise API key.
Step 1: Register – Textwise has a very painless registration process, all you need is a name and email address.
Step 2: Find your API key – Your API key is hidden away in your profile, grab it and save it somewhere like a text file.
Step 3: Plug it into SiteSkout. SiteSkout will cookie your Textwise API for you so you don’t have to enter it every time you use the tool.
Applications
My motto is “all actionable everything” so let’s talk about how this data will help you do more effective link building.
Prospecting a Site
The obvious application is that it helps you prospect a site; if you mash this data up with a Screaming Frog export what you get is a macroscopic view of what the site is about at a glance and then a microscopic view of what a page is about without ever visiting the site. Use VLOOKUP on the URLs and bring all the data together. I'd suggest using the heading tags, level, inlinks, outlinks, external outlinks and hash columns from Screaming Frog in concert with this.
If you use a SiteSkout export in concert with the SEER OSE-Twitter link building methodology (I love that method so much) you can quickly figure out who follows you but doesn’t link to you and what existing page on a given site you should ask for a link from.
Outreach Material
In my eyes the real power is in that you now easily have something to talk to the webmaster/blogger about. You now at a glance can determine the most popular content on the site and the magic inherent in that is social proof works both ways. That is to say if something is popular it makes sense that you would contact the writer about it. Your link target will be disarmed to a certain degree because they are very likely to have received a lot of praise and correspondence via social media and email because of their popular content. In short, SiteSkout helps you take out the cold calling aspect of link building.
Like I always say, Context is King!
I’d love to hear your thoughts and success stories with the tool in the comments below! There's bound to be some bugs in this, please just hit me on twitter (@ipullrank) if anything goes wrong for you. I continue to update these tools with feedback from you until they are running super smoothly. Also this tool is NOT an SEOmoz tool and any errors or failures are my fault, not the wonderful team of developers at the Mozplex, so if you run into any problems ping me not them.
Your Daily Snapshot for Thursday, October 13, 2011
Inside the South Korea State Visit
This morning, President Obama and First Lady Michelle Obama welcomed President Lee Myung-bak and First Lady Kim Yoon-ok of the Republic of Korea to the White House. Tune in to see events from the State Visit throughout the day at WhiteHouse.gov/live.
12:20 PM: President Obama and President Lee of the Republic of Korea hold a joint press conference
1:15 PM: Vice President Biden hosts a lunch honoring President Lee and First Lady Kim Yoon-ok
8:35 PM: President Obama at the State Dinner in honor of President Lee of the Republic of Korea
10:00 PM: President Obama attends the entertainment at the State Dinner
Photo of the Day
President Barack Obama presents White House Military Aide LTC Barrett Bernard with the Defense Superior Service Medal during a departure ceremony in the Oval Office, Oct. 12, 2011. (Official White House Photo by Chuck Kennedy)
In Case You Missed It
Here are some of the top stories from the White House blog.
9:00 AM: The President, The Vice President, and the First Lady welcome President Lee and First Lady Kim to the White House
10:00 AM: The President holds a bilateral meeting with President Lee; the Vice President also attends
11:05 AM: The President holds an expanded bilateral meeting with President Lee and Official U.S. and Official Korean Delegations
12:20 PM: The President and President Lee hold a joint press conference
1:15 PM: Vice President Biden hosts a lunch honoring President Lee and First Lady Kim Yoon-ok
7:00 PM: The President and the First Lady welcome President Lee and First Lady Kim
7:30 PM: The President and the First Lady take official photo with President Lee and First Lady Kim
8:35 PM: The President and the First Lady attend the State Dinner with President Lee and First Lady Kim; The President and President Lee will each deliver a toast
10:00 PM: The President and the First Lady attend the State Dinner Reception with President Lee and First Lady Kim
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