luni, 14 martie 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Scaling White Hat Link Building - Scaling Content

Posted: 13 Mar 2011 01:59 PM PDT

Posted by willcritchlow

Over the next two weeks, I'm speaking at our Advanced Link Building conference in London (18th March) and New Orleans (25th March). We are down to the last few tickets for London but there is definitely still time to book tickets for New Orleans to see this amazing line up of speakers give it up. Remember that the free trial of SEOmoz PRO means that anyone can get tickets at the discounted price of $450 (down from $600).

The topic of my presentation is scaling white hat link building.

Although SEO is one of the "free" organic marketing channels, there is no doubt that competing with the biggest brands and most aggressive web marketers is not going to be free. In fact, it could be very expensive. I won't be sharing ways to compete with the link buyers for free with no effort, but I will be sharing real strategies brands can use when they need to step it up a gear.

Today, I wanted to write about just one element of that presentation - partly to get my thoughts in order and partly to give something away to those who can't make it in person. The bit I have chosen is an element that has been front of my mind at Distilled for a few months now - namely scalable content.

Journalism comparison

Scalable Content

If you haven't already read the article Wired wrote about how Demand Media operates, I can't recommend it highly enough. Even (or perhaps especially) in light of the recent Panda / Farmer update, I think it is important to think about how you would operate if you had to do it at this scale. Even more importantly, we should all look for the lessons we can learn that will make us better.

Demand media wired article

It strikes me that there are three particularly notable aspects to the Demand process:

1. Cost

"it's fast, cheap, and good enough(*)"

(*) Obviously, this was written before the recent Google update and was, in any case, debatable, but nonetheless, it's clear that there are major efficiencies to be had versus the process many of us use to create content

2. Scale

"Demand will be publishing 1 million items a month, the equivalent of four English-language Wikipedias a year."

This is interesting regardless of what you think of the quality - it's an amazing feat and there has to be something we can learn.

3. Quality(**)

(**) for some definition of "quality"

"every algorithm-generated piece of content produced 4.9 times the revenue of the human-created ideas"

There are clearly things computers are better at than humans. One of these is mining data for patterns to see what is successful.

One of my long-running wishlist ideas is a database of great headlines - based largely on offline media categorised by their likely effectiveness. Have you ever stopped to look at the headlines on consumer magazines and compared them month over month? I feel like I should give credit for that tip - but I can't remember where it came from - perhaps Todd's suggestion of a headline "swipe file". Anyway, in a similar fashion to I'd love to be able to run something like:

select * from headlines where subject like "<topic>" and keyword like "<keyword>" and successful = 1

What's this all got to do with link building?

While "links" are pretty easy to understand, "link building" is a phrase that actually covers many dozens of potential approaches and tactics. Across all these myriad different kinds of link building, the consistent themes are:

  • [WHAT] - a piece of content receives the link
  • [WHO] - someone places the link
  • [WHERE] - a piece of content contains the link

I would argue that there is not a single white hat link building technique that would not benefit from better content either in the what or the where. And for every link that is not the result of a very close relationship or exceptional piece of evergreen content / functionality, scaling will come from either creating greater volume of content on your own site or creating greater volumes of content to appear elsewhere.

I will leave it as an exercise for the interested reader to think about the various forms of "good" links that you could get more of if only you had a stream of great content.

Great content?

Well, while we are trying to learn from Demand Media, I'm not necessarily talking about emulating them. Especially if we are creating content for link building, the bar is a little higher.

My research shows that on average, a piece of Demand Media content gathers links at less than 10% of the rate of a piece of BBC or New York Times content. I'll be sharing more of this research at the conference.

BBC news Neanderthal story

This story, for example has links from almost 4,000 unique domains...

So, we know we need to raise the bar, but the question is "how"?

I think this looks something like:

  • Using only great writers
  • Applying quality control at multiple stages of the process
  • Automating what you can
  • Filling the hopper intelligently based on what the linkerati really wants
  • Not being afraid to scale

I have been thinking about this not only to write my presentation, but also because we have been building out processes, systems and a network of writers to be able to scale this kind of service. The following breakdown is my opinion on some of the detail areas involved:

Using only great writers

We have some great writers on our team (in my opinion) but when we start talking about increasing scale, it doesn't always come with full time employees. My mantra for this is that we want to be a model agency for writers when we are doing this kind of work. Whereas many of the writing services I've come across seem to be more like marketplaces, we want to behave more like a model agency. Model agencies don't just take on anyone - there is a selection process to make sure they have the looks, attitude and skills to succeed. We don't just want people who can string a sentence together; we want people who can make words sing.

This does affect the cost part of the equation. You simply can't achieve this at the rates Demand are paying. By paying many times as much (as much as freelance journalist rates in many cases) we can create the selectivity and environment we are seeking. (Incidentally, if you think that sounds like you, of course we'd love to hear from you).

Quality control

A benefit of the "model agency" approach is that you can apply much of the quality control early in the process to the writer instead of the writing. Once you are confident in the skills of the writer, the quality control can become much more light touch. As high-profile journalists have proven, however, you can never give up quality control entirely. We think about three kinds of quality control

  1. Automated (see below)
  2. "Second opinion" from another writer
  3. Editorial review from dedicated editor or consultant (or occasionally, client)

Automation

Much of the automation we have layered onto this process is driven from third party APIs that make it easy to do relatively complex things. We already have a workflow, plagiarism checking and a degree of automation in Google Doc creation. We are planning:

  • The ability of qualified writers to select jobs they want
  • Google Doc sharing based off the workflow / approval process

And future automation might include:

  • Additional quality checks (spelling, reading level, etc.)
  • Headline suggestion / refinement tools for consultants
  • Resource suggestion for writers (useful links, a la Zemanta, images, videos etc.)
  • Better notification and alerting around the process and deadlines
  • Additional services such as transcription

Filling the hopper

At the moment, this is probably the least-thought-out part of our system. In contrast to the apparently almost-fully-automated Demand system, we are still at the stage of having our consultants (in conjunction with clients and writers) suggest and decide upon the specific content to be written.

I'd love to hear some creative ideas (and any tools that already exist) that could help speed us up or make us better here.

Scaling

As I started thinking about how you scale content, one of my first thoughts was to emulate the industries that have been scaling content for decades. News organisations have been refining the systems and processes needed to:

  • gather ideas from a diverse set of sources
  • write copy using both staff writers and freelancers
  • apply quality control
  • write compelling headlines

Particular lessons that I think we can learn from the masters include the following (my wife is a journalist and these are some of the things I've been most impressed by through her team):

  • It turns out that the people who are good at quality control are often good at writing headlines (they're called copy editors or sub editors)
  • A small core team can manage a large volume of high quality output with a team of trusted freelance writers
  • The person writing the copy isn't necessarily the same person that decides the topic or the same person who writes the headline (and nor are these two necessarily the same person either)

However, I do think there are some things that I think many journalists could learn from the geeks among us - mainly web apps:

  • Version control - one of the first things I built into our spec was the ability to see who had made which change to a draft and when. I was amazed to learn that this simple feature (present in such ubiquitous software as Word and Google Docs) is not standard on news desks. I'm sure some have it, but it's common for plain text or untracked Word to be received from external writers and passed through the system until it hits the flatplan. At this point, many organisations take everything offline to work only in hardcopy.
  • Project management apps - for similar reasons, there is often no end-to-end system managing the process of where everything is in the system. One of the things I wanted our system to have was a simple way for all the interested parties to see the status of everything - to my mind, this includes:
    • Editor / owners being able to see all outstanding jobs
    • Writers having their own dashboard to see what they are working on
    • Consultants having project dashboards
    • Finance having reports on spend across the board and on specific projects

Do you have all this stuff?

The short answer is "no". My role is largely R&D these days and a lot of what I described above is still at either the R or D stages in Distilled, but it's pretty much all in the pipeline and the early signs are that it is beneficial to our projects and our consultants. We're putting $10k / month+ through the system so far and it's holding up pretty well with relatively minimal management. Next step is to pare down the internal management requirement still further, but I'm pleased with how it's going so far.


If you like exploring this kind of idea, there is more of this as well as plenty of tips and tricks to come at the link building conferences over the next couple of weeks. As I said above, London is pretty much sold out (so grab one of the last few tickets if you'd been planning to come) but there are some tickets remaining for New Orleans. We're going to have a great time and I hope that if you can make it to the fun-filled South, we'll see you there.

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Photostream: Behind the Scenes in February

The White House Your Daily Snapshot for
Monday, March 14,  2011
 

Photostream: Behind the Scenes in February

The White House Photo Office recently released a series of behind-the-scenes photos from the month of February. Take a look at President Obama handling turmoil across North Africa and the Middle East, working on budget issues with Congressional leadership, and meeting innovators, educators, and builders around the country.

See more photos
 
Photostream: February

President Barack Obama walks through the door to the Outer Oval Office at the start of the day, Feb. 24, 2011. (Official White House Photo by Pete Souza)

In Case You Missed It

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

The Ongoing Response to the Earthquakes and Tsunami in Japan
White House Press Secretary Jay Carney has released an overview of the United States' reponse in support of our friends in Japan. For information on how you can help directly, USAID has pulled together options for donating to support the response effort.

The President's Press Conference: The Causes, Government Response, and Long-Term Solutions to Rising Gas Prices
The President takes questions on a wide range of issues, but uses his opening remarks to offer condolences to Japan and discuss rising gas prices here at home.

Weekly Address: Women’s History Month & Fair Pay
The President pays homage to former First Lady Eleanor Roosevelt, commends the great strides that have been made to create a more equal American society, and reaffirms his resolve to pass the Paycheck Fairness Act.

Today's Schedule

All times are Eastern Standard Time (EST).

10:20 AM: The President visits a classroom

10:40 AM: The President delivers a speech on reforming education WhiteHouse.gov/live

11:55 AM: The President meets with senior advisors

12:30 PM: Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

1:45 PM: The President holds a bilateral meeting with Prime Minister Rasmussen of Denmark

2:25 PM: The President and Prime Minister Rasmussen of Denmark deliver statements to the press

3:00 PM: The President meets with General Petraeus

7:30 PM: The President attends a DNC event

WhiteHouse.gov/live  Indicates events that will be live streamed on White House.com/Live.

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Seth's Blog : Bring me stuff that's dead, please

Bring me stuff that's dead, please

RSS is dead. Blogs are dead. The web is dead.

Good.

Dead means that they are no longer interesting to the drive-by technorati. Dead means that the curiousity factor has been satisfied, that people have gotten the joke.

These people rarely do anything of much value, though.

Great music wasn't created by the first people to grab an electric guitar or a synthesizer. Great snowboarding moves didn't come from the guy who invented the snowboard... No one thinks Gutenberg was a great author, and some of the best books will be written long after books are truly dead.

Only when an innovation is dead can the real work begin. That's when people who are seeking leverage get to work, when we can focus on what we're saying, not how (or where) we're saying it.

The drive-by technorati are well-informed, curious and always probing. They're also hiding... hiding from the real work of creating work that matters, connections with impact and art that lasts. I love to hear about the next big thing, but I'm far more interested in what you're doing with the old big thing.

 
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Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Shocking Tsunami Footage, Cars and Houses Swept Away Like Corks; Nuclear Reactor Explosion Video; Heartbreaking Aftermath Images

Posted: 13 Mar 2011 11:14 PM PDT

I have seen many Tsunami videos over the past few days but the video that follows is the most heart-wrenching by far. Quality is superb.

I do not know the origin. A friend passed it to me in a different format and I uploaded it to YouTube.



URL if video does not play: http://www.youtube.com/watch?v=TBSiO8T5EcA



URL if video does not play: http://www.youtube.com/watch?v=T_N-wNFSGyQ&feature=player_embedded

Japan Earthquake Aftermath

The Boston Globe has a stunning series of 44 images on the Earthquake Aftermath. Here are a few of them.

A resident is rescued from debris in Natori, Miyagi, northern Japan March 12 after one of the country's strongest earthquakes ever recorded hit its eastern coast March 11. (Asahi Shimbun, Noboru Tomura/Associated Press)



Rescue workers search for victims from the rubble in Rikuzentakata, northern Japan, March 13 after the magnitude 8.9 earthquake and tsunami struck the area. (Toru Hana/Reuters)



People in a floating container are rescued from a building following an earthquake and tsunami in Miyagi Prefecture, northeastern Japan March 12. (Kyodo News/Reuters)



An official in protective gear talks to a woman who is from the evacuation area near the Fukushima Daini nuclear plant in Koriyama March 13. Japanese Chief Cabinet Secretary Yukio Edano confirmed on Saturday there has been an explosion and radiation leakage at Tokyo Electric Power Co's (TEPCO) Fukushima Daiichi nuclear power plant. (Kim Kyung-Hoon/Reuters)



A man who was trapped by a tsunami is rescued by a Japan Self-Defense Force soldier in Kesennuma City in Miyagi Prefecture in northeastern Japan March 12. Japan confronted devastation along its northeastern coast on Saturday, with fires raging and parts of some cities under water after a massive earthquake and tsunami. (Kyodo/Reuters)



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


Japanese Futures off 2.5%; Yen Spikes to 1.2444, Mostly Retraced; Gold Firm, Crude Lower, S&P 500 Futures off Modestly; Explaining the Yen's Rise

Posted: 13 Mar 2011 04:55 PM PDT

Japanese futures are down about 2.5% this evening while S&P 500 futures are off a modest .6%. The Yen surged at the Forex open but has now retraced most of the move.

Crude is down about $1.50 and gold is up around $7. Of these moves the Yen is the most interesting.

Yen Daily Chart



click on chart for sharper image

Yen 15 Minute Chart



click on chart for sharper image

Explaining the Yen's Rise

I received several emails from people wondering why the Yen might rise given the Japanese government pledge to create "massive liquidity" as well as increase the deficit with "stimulus" money to repair the damage.

The answer in general terms is events of this type increase the demand for money. In this case, businesses and individuals affected by the earthquake need Yen, not whatever carry trade they may have been in.

There will be a repatriation of Yen for sure, although the magnitude is unknown.

Fundamentally, there is little reason to like the Yen, although significant short-term forces are in play. If the Yen does not rally in the face of increased demand, it could be a very telling signal.

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


Earthquake Moves Japan Eight Feet, Shifting Earth's Axis; Entire Villages Vanish Under Wall of Water; Nuclear Crisis Expands to 2nd Reactor

Posted: 13 Mar 2011 12:35 PM PDT

Scientists upgraded the devastating earthquake that struck Japan from 8.8 or 8.9 to 9.0 on the Richter Scale. That may not sound like much but the scale is logarithmic effectively doubling the estimated size of the quake.

Regardless of what the number is, the quake was devastating enough to move the main island of Japan 8 feet while shifting the earth on its axis. Entire villages in Northern Japan are missing, swept away by the resultant tsunamis.

Meanwhile Japanese authorities struggling with additional meltdowns have flooded a second reactor with seawater hoping to cool the plant. This is a desperate action that will probably ruin both facilities.

Power outages and lack of fresh water add to the misery.

Villages, Trains Vanish Under Wall of Water

The New York Times reports Japan Pushes to Rescue Survivors as Quake Toll Rises
While nuclear experts were grappling with possible meltdowns at two reactors after the devastating earthquake and ensuing tsunami in northern Japan, the country was mobilizing a nationwide rescue effort to pluck survivors from collapsed buildings and rush food and water to hundreds of thousands of people without water, electricity, heat or telephone service.

Entire villages in parts of Japan's northern Pacific coast have vanished under a wall of water, and many communities are cut off, leaving the country trying to absorb the scale of the destruction even as fears grew over the unfolding nuclear emergency.

In the port town of Minamisanriku, nearly 10,000 people were unaccounted for, according to the public broadcaster NHK. Much of the northeast was impassable, and by late Saturday rescuers had not arrived in the worst-hit areas.

JR, the railway company, reported that three passenger trains had not been accounted for as of Saturday night, amid fears that they were swept away by the tsunami. There were reports of as many as 3,400 buildings destroyed and 200 fires raging. Analysts estimated that total insured losses from the quake could hit $15 billion, Reuters reported.

Even as estimates of the death toll from Friday's quake rose, Japan's prime minister, Naoto Kan, said 100,000 troops would be mobilized for the increasingly desperate rescue recovery effort. Meanwhile, several ships from the United States Navy joined the rescue effort. The McCampbell and the Curtis Wilbur, both destroyers, prepared to move into position off Miyagi Prefecture.

One-third of Kesennuma, a city of 74,000, was reported to be submerged, the BBC said, and photographs showed fires continued to rage there. Iwate, a coastal city of 23,000 people, was reported to be almost completely destroyed, the BBC said.
Crisis Expands to Second Nuclear Plant

MarketWatch reports Japanese nuclear-power crisis expands to second plant
Citing Japan's Fire and Disaster Management Agency, Kyodo News reported the cooling system failed at the Tokai No. 2 Power station. No additional information was available. Tokai, about 75 miles from Tokyo and the site of nuclear-research facilities as well as the power plant, was the site of a 1999 radiation leak, known as the Tokaimura accident, that killed two technicians.

Word of the problem at Tokai came as Japanese nuclear authorities continued working Sunday to avert nuclear meltdown at an earthquake-damaged power plant, Prime Minister Naoto Kan warned Japan of large-scale power blackouts and said the disaster was the country's biggest crisis since World War II. That came as Japanese scientists increased their estimate of the largest earthquake in the nation's history to magnitude 9.0 from 8.8, more than doubling the size and the destructive energy release in the Friday afternoon, local time, quake off the coast of Honshu.

[Officials] began flooding the second reactor with seawater, a drastic move that scientists have said might render the units unusable. But the water gauge in the No. 3 has stopped functioning, making it impossible to tell whether the procedure is succeeding, The Wall Street Journal reported.
Earthquake Moves Main Island Eight Feet and Shifts Earth on its Axis

CNN reports Earthquake Moves Japan Eight Feet, Shifting Earth's Axis
The powerful earthquake that unleashed a devastating tsunami Friday appears to have moved the main island of Japan by 8 feet (2.4 meters) and shifted the Earth on its axis.

"At this point, we know that one GPS station moved (8 feet), and we have seen a map from GSI (Geospatial Information Authority) in Japan showing the pattern of shift over a large area is consistent with about that much shift of the land mass," said Kenneth Hudnut, a geophysicist with the U.S. Geological Survey (USGS).

Reports from the National Institute of Geophysics and Volcanology in Italy estimated the 8.9-magnitude quake shifted the planet on its axis by nearly 4 inches (10 centimeters).

The Japanese quake comes just weeks after a 6.3-magnitude earthquake struck Christchurch on February 22, toppling historic buildings and killing more than 150 people. The timeframe of the two quakes have raised questions whether the two incidents are related, but experts say the distance between the two incidents makes that unlikely.

"I would think the connection is very slim," said Prof. Stephan Grilli, ocean engineering professor at the University of Rhode Island.
Bank of Japan Readies "Massive Liquidity"

Bloomberg reports Japan Readies 'Massive' Liquidity as BOJ Gauges Risk to Post-Quake Economy
Governor Masaaki Shirakawa told reporters late yesterday he's ready to unleash "massive" liquidity starting this morning in Tokyo, as the BOJ seeks to assure financial stability.

Shirakawa and his board could opt to accelerate asset purchases, including government bonds and exchange-traded funds, within the existing credit programs, particularly if the yen climbs and stocks tumble, said Masaaki Kanno, chief Japan economist at JPMorgan Chase & Co. in Tokyo, who used to work at the central bank.

The economic hit from the March 11 quake will depend on how long it shuts down factories and the distribution of goods and services, with the potential meltdown at a nuclear power facility clouding the outlook. For now, the central bank is likely to ensure lenders have enough cash to settle transactions, and aim any additional steps at providing credit in the areas of northeastern Japan devastated by the temblor, analysts said.

Japan's currency rose 1.4 percent to 81.84 per dollar March 11 amid prospects for Japanese investors to repatriate assets, bringing its gain in the past year to 10 percent. The government may order the BOJ to sell yen if it soars, Mansoor Mohi-uddin, head of global currency strategy at UBS AG in Singapore, wrote in a note.
Japan is already struggling with huge fiscal deficits and a debt-to-GDP ratio of 200%, highest in the G-20 group of nations. In response, government officials had been planning a series of tax hikes. You can now safely toss those hikes straight into the ashcan.

There is never a good time for a natural disaster, but this one could hardly have come at a worse time. Best wishes to all those affected by this crisis.

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


Scramble to Avert Meltdowns; Death Toll Estimate Tops 10,000; Industries Shut Down; Japan Goes Deeper in Debt; Keynesian Stimulus Nonsense

Posted: 13 Mar 2011 03:42 AM PDT

Ever since the earthquake and tsunami hit Japan, news has been flowing from the country, nearly all of it bad.

Partial Meltdowns Likely Occurred

The New York Times reports Japanese Scramble to Avert Meltdowns as Nuclear Crisis Deepens After Quake
Japanese officials struggled on Sunday to contain a widening nuclear crisis in the aftermath of a devastating earthquake and tsunami, saying they presumed that partial meltdowns had occurred at two crippled reactors and that they were facing serious cooling problems at three more.

The emergency appeared to be the worst involving a nuclear plant since the Chernobyl disaster 25 years ago. The developments at two separate nuclear plants prompted the evacuation of more than 200,000 people. Japanese officials said they had also ordered up the largest mobilization of their Self-Defense Forces since World War II to assist in the relief effort.

On Saturday, Japanese officials took the extraordinary step of flooding the crippled No. 1 reactor at Fukushima Daiichi Nuclear Power Station, 170 miles north of Tokyo, with seawater in a last-ditch effort to avoid a nuclear meltdown.

Then on Sunday, cooling failed at a second reactor — No. 3 — and core melting was presumed at both, said the top government spokesman, Chief Cabinet Secretary Yukio Edano. Cooling had failed at three reactors at a nuclear complex nearby, Fukushima Daini, although he said conditions there were considered less dire for now.

A meltdown occurs when there is insufficient cooling of the reactor core, and it is the most dangerous kind of a nuclear power accident because of the risk of radiation releases. The radiation levels reported so far by the Japanese authorities are far above normal but still too small to pose a hazard to human health if the exposure continued for a brief period. The fear was that more core damage would bring bigger releases.
Death Toll Likely Exceeds 10,000

Yahoo!Finance reports Japan quake-tsunami death toll likely over 10,000
The death toll in Japan's earthquake and tsunami will likely exceed 10,000 in one state alone, an official said Sunday, as millions of survivors were left without drinking water, electricity and proper food along the pulverized northeastern coast.

Although the government doubled the number of soldiers deployed in the aid effort to 100,000, it seemed overwhelmed by what's turning out to be a triple disaster. Friday's quake and tsunami damaged two nuclear reactors at a power plant on the coast, and at least one of them appeared to be going through a partial meltdown, raising fears of a radiation leak.

The police chief of Miyagi prefecture, or state, told a gathering of disaster relief officials that his estimate for deaths was more than 10,000, police spokesman Go Sugawara told The Associated Press. Miyagi has a population of 2.3 million and is one of the three prefectures hardest hit in Friday's disaster.

Teams searched for the missing along hundreds of miles (kilometers) of Japanese coastline, and hundreds of thousands of hungry survivors huddled in darkened emergency centers that were cut off from rescuers and aid. At least 1.4 million households had gone without water since the quake struck and some 2.5 million households were without electricity.

Japanese Trade Minister Banri Kaeda said the region was likely to face further blackouts and that power would be rationed to ensure supplies go to essential needs.

Large areas of the countryside remained surrounded by water and unreachable. Fuel stations were closed and people were running out of gasoline for their vehicles.
Auto Industry and Sony Shuts Down

The Telegraph reports Japan shuts down as economic fears grow
The three largest motor manufacturers – Toyota, Honda and Nissan – said they would stop production at almost all of their domestic assembly plants. The safety of the workforce and deaths were cited as reasons behind the decision. The electronics giant Sony also said it would be shutting down production.



Economists warned that the closures staged by the motor and electronics companies could be the tip of the iceberg, with other parts of industry likely to feel knock-on effects in the coming days.

"Temporary closures of factories and oil refineries and the shutting down of power stations are likely to affect output throughout the country," said Wolfgang Leim of Commerzbank. "Economic output may therefore shrink again slightly in the first quarter."
Japan Set to Go Deeper in Debt

Japan's national debt is 200% of GDP. Of the G20 nations, that is the highest percentage in the world in terms of Debt-to-GDP. Japan cannot afford more debt, but more debt is coming regardless.

Bloomberg reports Japan Plans Spending Package as Quake Slams World's Most Indebted Economy
Japan aims to compile a package to fund the rebuilding effort after its strongest earthquake on record, a step that may worsen the challenge of reining in the world's biggest public debt.

Policy makers will need to compile a spending package "over the medium to long-term" to cope with the aftermath of the 8.9-magnitude earthquake and the tsunami it triggered, Chief Cabinet Secretary Yukio Edano told NHK Television.

"A supplementary budget is like the last thing that people watching the JGB market want to hear," said Ogawa, adjunct professor at Columbia University's School of International and Public Affairs in New York, and a former Japanese banking analyst who lived in the nation for 15 years. The prospect of rebuilding "signals another leg down in Japan's fiscal health. So I'm concerned that in the short to medium run, there's going to have to be more borrowing," she said.

"We will probably need a supplementary budget to work on this," Sadakazu Tanigaki, who heads the Liberal Democratic Party, told reporters March 11 after Kan convened a meeting of party leaders. "We will cooperate with all our might."

Japan's borrowing burden is a legacy of economic stagnation following the bursting of its stock and property bubble in 1990. Financial-industry bailouts and repeated attempts to revive growth through fiscal stimulus contributed. The debt is set to reach 210 percent of GDP in 2012, the highest among countries tracked by the Organization for Economic Cooperation and Development, compared with an estimated 101 percent for the U.S.

One potential positive from the earthquake is the chance to revive a less-populated area of the nation. Provincial regions outside of Tokyo have borne the brunt of the decline in Japan's population since 2006. The prefectures of Akita and Aomori, within Tohoku, have had the biggest decline in residents in the five years through 2010. Miyagi, where Sendai is located, accounts for 1.7 percent of the nation's people, according to economist Richard Jerram at Macquarie Securities Ltd.

"This is a Keynesian stimulus program that nobody can argue with: just rebuilding the city of Sendai," said Marcus Noland, deputy director of the Peterson Institute for International Economics in Washington, co-author of the 2001 book "No More Bashing: Building a New Japan-United States Economic Relationship." "Rebuilding Sendai could actually be an opportunity to try to create a growth pole in northern Japan."
Keynesian Nonsense

I had been wondering how long it would take before some Keynesian clown would make a case that there is some economic benefit to be derived from the earthquake.

The idea is complete nonsense of course. There is nothing economically stimulating about tsunamis or earthquakes, or the destruction of any useful property.

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