marți, 11 ianuarie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Looking Beyond Portugal; Bundesbank President Says "Optimism Seems Premature"; Polish 10-Year Yields Hit 6.18%, Highest in 16 Months

Posted: 11 Jan 2011 05:54 PM PST

Portugal is the recent flashpoint, but Spain and Belgium are on deck. Note too that sovereign spreads in Ireland and Greece are at record highs in spite of the alleged bailouts.

In response to the clearly not-contained crisis, Germany is considering expanding the bailout fund from 750 billion-euro ($966 billion) by as much as 25%. Meanwhile, it's time to look beyond Portugal to Belgium and Italy, and of course Spain.

Why stop there? Interest rates are soaring in European countries outside the Eurozone, notably Poland.

Looking Beyond Portugal

The Financial Times says Europe must look beyond Portugal.
Like the rival warring sides on a battlefield, European policymakers and financial markets left each other alone over the Christmas holiday. The new year, sadly, holds little prospect that peace will soon break out in Europe's sovereign debt crisis. Eurozone leaders must ensure that 2011 does not become a repeat – only worse – of 2010.

The imminent flashpoint is Portugal. Long mentioned in the same breath as Greece and Ireland – which have both accepted rescue packages from the European Union and the International Monetary Fund – Portugal has now taken their place as the most exposed eurozone state still reliant on market funding. The yield on 10-year Portuguese sovereign debt remains near euro-era highs, above 7 per cent. There are rumours of German pressure – denied by Berlin and Lisbon alike – for Portugal to take money from the European financial stability facility.

Portugal's problem is similar to Spain's. Stagnant productivity alleviated with excessive private sector borrowing resulted in a decade of huge current account deficits that were squandered instead of assisting reforms to increase growth. But private debts quickly turn into public ones when the alternative is a depression brought on by a private funding drought.

The costs of the financial crisis are being born by everyone from citizens to shareholders – with one exception: senior creditors to private banks, treated as sacrosanct. The sovereign crisis will not end until this false religion is unmasked. That means Europe's leaders must open a new front. If they want financial peace, they must prepare for war.
Bundesbank President Says "Optimism Seems Premature"

Please consider Weber Says 'Premature' to Be Optimistic on Containing Crisis
European Central Bank council member Axel Weber said it's too soon to assume Europe's debt crisis has been contained as the ECB steps up its purchases of government bonds to ease market tensions.

"The optimism of some observers seems premature to me," Weber, who heads Germany's Bundesbank, said in a speech in Frankfurt late yesterday. "There are several good reasons to look into 2011 with cautious optimism, not least the economic outlook. At the same time there remain -- also in Germany -- important challenges in terms of cleaning up the financial system and getting state finances in order."

Greek, Irish and Portuguese bonds rose yesterday as traders said the ECB bought the assets of the euro region's most indebted nations amid mounting concern Portugal will be forced to seek a bailout. Portugal auctions 2014 and 2020 bonds today. The turmoil has prompted calls for Germany to soften its opposition to expanding the region's 750 billion-euro ($966 billion) rescue facility.

"The outlook for 2011 depends on the extent to which the right lessons are drawn from the crisis," Weber said. "The responsibility for the debt crisis in the euro area lies primarily with fiscal policy, not with the financial markets. The affected countries must themselves restore the confidence that's been lost."

The ECB purchased Portuguese debt yesterday, said two traders with knowledge of the transactions, who asked not to be identified because the deals are confidential. A spokesman for the central bank declined to comment. Portuguese 10-year yields fell 12 basis points to 7.08 percent.
Polish 10-Year Yields Hit 6.18%, Highest in 16 Months

Bloomberg reports Poland Faces Highest Yields in 16 Months on Cuts to Pensions
The Finance Ministry faces yields of at least 6.18 percent on 10-year bonds, the most since an auction in May 2009, according to analysts at PKO Bank Polski SA, ING Bank Slaski SA, Bank Handlowy SA and data compiled by Bloomberg. Twenty-year debt may yield the most since an auction in September 2009.

Yields on 10-year Polish bonds climbed 17 basis points to 6.227 percent this month after the government said on Dec. 30 it plans to lower contributions to private pension funds, which as of November were the third-biggest holders of government debt, according to Finance Ministry data. The auction comes the same day as an offering of 10-year bonds from Portugal, the first from any of the euro region's most indebted countries this year.

"Market sentiment has worsened as there is a lot of uncertainty whether Portugal will get a bailout," Rafal Benecki, an economist at ING Bank Slaski, said by phone from Warsaw. "The long-end is risky because that's where the pension funds were calling the shots and we don't know what the market will look like after the reform takes effect."

The extra yield investors demand to hold Polish 10-year debt in zloty over German bunds rose to 335 basis points this week, the highest since Nov. 30. The cost of insuring European sovereign debt climbed to a record on concern backstopping the region's banks will overwhelm government finances. Portugal's Prime Minister Jose Socrates said yesterday his country doesn't need a bailout from the European Union and its 2010 budget deficit will be lower than forecast.
Crisis Will Escalate Until Haircuts Taken

This is not a matter of looking beyond Portugal, but rather of looking at the reason for the crisis itself: debts that cannot possibly be paid back. The market understands Greece and Ireland will default, otherwise yields and credit default swaps would not be at or near record levels.

Attempts to bailout country after country is itself destabilizing. Every increase in the bailout fund and every purchase by the ECB brings the crisis closer to the core - France and Germany. This is why Axel Weber is correct in voting against ECB bond purchases and Trichet is wrong.

Sovereign debt purchases do nothing but mask over the problem while loading up the ECB's balance sheet with garbage. In the end, what cannot be paid back won't.

In the meantime, Trichet has gone against everything he has ever stood for. His short-term effort to "save the euro" are the very things that may cause the Eurozone to break apart or the Euro to collapse long-term.

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


Budgetary Delusions: Federal Deficit Charts from CBO Budget Projections

Posted: 11 Jan 2011 09:06 AM PST

Can the budget deficit be solved by cutting earmarks? How about cutting 100% of all federal non-defense discretionary expenditures?

That is the question reader "David" asked and answered in the following email.
Hello Mish

Here is a chart I created using budget projections from the CBO. The main point is from now until 2020, we could eliminate 100% of all federal non-defense discretionary expenditures and still run a deficit.

I went back to the data after getting into one too many arguments with people who claim that we can solve our budgetary problems by eliminating government "waste" - the programs that study the sex lives of jellyfish and that sort of thing - without real cuts in entitlement programs.

Unless the Budget Fairy waves her magic wand, it's not going to happen.

David
US Federal Revenues and Expenditures 2000-2020



click on chart for sharper image

Data for the projections in the above chart is from a link found at the bottom right hand corner of the CBO Report Analysis of the President's 2011 Budget. The header says Additional Info "Budget Projections". Click on the link that says "data" to download an Excel spreadsheet.

Data for 2009 and before came from the CBO report Budget and Economic Information. There is a link on the right about halfway down that says "Monthly Reviews and Historical Data." Click on the "Excel" link to download a spreadsheet.

Entitlement Spending Growth




click on chart for sharper image

Both charts are from David who posts on the No Money No Worries blog.

Inquiring minds may wish to check it out.

Thanks David.

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


"World Comes Together to Save the Euro"; Japan Officially Joins the Battle

Posted: 11 Jan 2011 12:08 AM PST

At long last, and after decades of trying, Japan may have found a way to weaken its currency: buy European bonds. The irony is that is not Japan's intent. The non-plan to weaken the Yen could conceivably "work" if done in size, although I rather doubt Japan commits that much. Regardless, it sure won't do a damn thing to "Save the Euro".

Please consider Japan Joins China in Assisting Debt-Crisis-Hit Europe
Japan plans to buy bonds issued by Europe's financial-aid funds, its finance minister said, joining China in assisting the region as it battles against a debt crisis that prompted bailouts of Ireland and Greece.

"There is a plan for the euro zone to jointly issue a large amount of bonds late this month to raise funds to assist Ireland," Finance Minister Yoshihiko Noda said at a news conference in Tokyo today. "It's appropriate for Japan to make a contribution as a leading nation to increase trust in the deal. We want to buy more than 20 percent."

The euro gained against the yen as the statements of support showed that the country with the world's second-largest foreign-exchange reserves, after China, may help stem the risk of the crisis spreading. Portugal's borrowing costs jumped last week as concern deepened that nation may be unable to avoid tapping the European Union's rescue fund.

"This signals that the world is coming together" to save Europe, said Noriaki Matsuoka, an economist at Daiwa Asset Management Co. in Tokyo. "But it's unlikely the euro will maintain its current strength. It's unclear whether the market will be able absorb all the bonds being issued by the problematic euro-zone nations."

Japan will use its foreign-exchange reserves to buy more than a fifth of bonds to be issued later in January by the European Financial Stability Facility, Noda said. Japan's reserves total $1.096 trillion, the government said today. That compared with China's $2.648 trillion, according to data compiled by Bloomberg.

"I think we cannot rule out the possibility that the Japanese government" may need to shift part of its reserves to euros from U.S. dollars to buy the bonds, Tohru Sasaki, head of Japan rates and foreign exchange research at JPMorgan Chase & Co. in Tokyo, said in a note to clients today.

"Japan's finally contributing to the stabilization of the global financial system," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Co. in Tokyo. "This is good news for the euro and it's good news for the global financial system. Since Japan has a current-account surplus, in some ways it has a responsibility to help those with a capital shortage."
A "Come Together" Tribute



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


Seth's Blog : Sarah Jones and me

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Sarah Jones and me

Just announced: Tony award winner Sarah Jones and her many invented friends are going to interview (for lack of a better term) me on-stage at the Nuyorican in New York City on January 18th. There are just a few tickets available.

Sarah is a genius and an artist and a hero of mine. I'm thrilled to be asked. It'll certainly not be what you expect.

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SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


What's the Future of Mobile Search and SEO?

Posted: 10 Jan 2011 04:29 PM PST

Posted by randfish

There's no doubt that mobile and, by extension, local search is hot. Technology pundits have been declaring every year since 2005 "The Year of Mobile" - that magical moment when everyone suddenly starts using their mobile device for more than just playing games, texting, calling friends, checking email, downloading/using apps and occasionally browsing the web and... I don't know... browses the web more?

If I sound a bit cynical on the topic of mobile it's not out of a disbelief in the power of mobile devices or the acceleration of their influence on our technological connectedness. It's because I think we're, to a large extent, already there. The smartphone has won our hearts and minds, and this year, it will finally be more popular than the feature phone:

Smartphone Penetration Rate

Nearly half of us already have iPhones, Blackberries, Androids or similar in our pockets when we're on the proverbial "go." But search - the process, the intent, the results -  just isn't that different on mobile devices vs. laptops and desktops.

Yes, mobile searchers are more likely  to perform local searches than other varieties, but I actually believe this trend may be overblown. A substantive portion of searches performed from a laptop/desktop have local intent as well. As the mobile experience gets ever closer to mimicing that of the laptop/desktop, I suspect we'll be searching on our mobiles in a remarkably similar fashion to how we search everywhere else. In fact, the top mobile searches of 2010 are similar (and surprisingly non-local) to the top general searches of the year.

Increased speed, functionality, screen size, resolution, readability, battery life, multimedia capacity, etc. don't sound like features that make the mobile experience unique; they strike me as moving toward feature parity.

Mobile vs. Computer CTRs

Research from Doubleclick, comparing search on mobile devices w/ full browsers vs. computers strongly suggests that we're moving towards search parity, too. Queries are similar, clicks are similar, click-through-rate is similar, even conversion rate is getting close (though mobile is still a much more research-based experience, with a tough-to-measure influence of offline conversions).

This doesn't mean you can or should ignore mobile/local as a powerful organic marketing channel, but it does mean that you don't need to be building separate mobile sites or separate mobile experiences. Unless your site/content is seriously challenging for mobile users, even those with fast, impressive devices, you should worry more about other marketing avenues.

The big trends I see in mobile search are:

  • A lot more queries - mobile search is growing faster than traditional search and that bodes well for search marketers. 
  • A single set of SERPs - I searched for a good 20 minutes on my laptop and Android phone without finding a query where the web results are in a different order (both are location-aware to "Seattle, WA")
  • A chance to make your mobile-focus known - Yelp does a great job with their overlay on mobile devices encouraging searchers to download their app (though some have complained it gets annoying having to say "no" every time if you don't want it).
  • Little need for a separate mobile site - Mobile copies of websites seem to me to be more likely to cause duplicate content issues, technical challenges, waste engineering resources and draw away attention from real mobile opportunities than to earn slightly higher rankings in mobile searches. Until/unless things change dramatically, I can't, in good conscience, recommend this practice (unless your regular site is absolutely unusable on a mobile device).
  • Definite need for a separate mobile ad strategy - Unlike SEO, the paid search results can and do differ dramatically on mobile devices. CPC is generally lower, as are conversion rates, though the latter may be on an upward trend (especially if I'm right about device convergence)
  • Apps are still beloved - I don't know if the long term future of mobile will continue to focus on apps, but for now, it's a huge part of what differentiates the device. It's certainly a great way to "contain" users in your brand and provide a more tailored experience, and for those who can make it work effectively, the effect can be great.
  • Geography matters - mobile and traditional search are both getting more and more biased by geography. My opinion is that Google currently sucks at this (I have yet to find a search I like better with location-biasing than without, maps/places not withstanding), but they certainly won't be giving up. As a result, if you can tailor your content and your marketing to effectively serve and be seen as local, you can seriously benefit.

Looking forward to your thoughts about mobile search and the future of mobile SEO. I continually get the sense that I'm an anomaly in how I view the mobile web and its impact on search, so I'm always interested to hear what others think on the topic.


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Michael Gray - Graywolf's SEO Blog

Michael Gray - Graywolf's SEO Blog


The Art and Science of Writing Good Titles

Posted: 11 Jan 2011 08:00 AM PST

Post image for The Art and Science of Writing Good Titles

Crafting a good title for your pages or blog posts is a problem many people struggle with. Do you focus on keywords or on attention grabbing formulas? Hopefully this post will give you some insight into how to write better titles. The difficulty with crafting good titles is that it’s part science and part art, and you have to know when to lean in one direction or the other. To illustrate my point, I’m going to take the same concept and show you variations you would use for different purposes.

All three of these are similar but distinctly different posts. They will have different content and editorial styles …
Are you creating a page to drive sales, capture leads, or make conversions? If you are, you want to focus strictly on keywords and give little if any concern to being sensational or even slightly creative. An example would be:

Disney World Discount Hotel Rooms

Are you going for a social link baiting type of piece? If you are, then you want a title that is a bit sensational and kicks your readers in the teeth. Try something  like:

Secrets Disney Doesn’t Want You to Know About: Saving Money on Hotel Rooms

Are you trying to catch users who are in the research phase of their process but haven’t entered the sales funnel yet? If you are, you want a title that answers a question, solves a problem, or lets users know they are on the information scent. An example of this would be:

How to Book a Cheap Disney Hotel Room

The question that many people now ask is which of those three versions do they want? The answer is all three. Some people try to save some money on content creation and combine all three into one article, but this is recipe for disaster. All three of these are similar but distinctly different posts. They will have different content and editorial styles and should be different posts (see writing narrowly focused posts). Once you have all three created, tie them together with interlinking or with head and tail concept. The last mistake people make is using misleading titles. I’ve seen a lot of people use sensational style titles to try and gain links but then put conversion based content on the page. This is a formula for getting a lot of pissed off users looking for social content who won’t buy a thing (see when you’re title is linkbait but your post isn’t)

So what are the takeaways from this post:

  • Determine what the intent of the page is: conversions, links, or information?
  • Choose the title based on the intent of the page
  • Make sure the content matches the title and purpose of the page
  • Be mindful of singular and plural terms
  • Don’t ignore opportunities to optimize your post slugs

Creative Commons License photo credit: fdecomite

tla starter kit

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The Art and Science of Writing Good Titles

Grief and Courage

The White House Your Daily Snapshot for
Tuesday, Jan. 11,  2011
 

Photo of the Day

Photo of the Day

President Barack Obama and First Lady Michelle Obama walk back to the Residence after joining White House staff on the South Lawn of the White House to observe a moment of silence for the victims of the Arizona shootings Jan. 10, 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.

President Obama on Tucson, Grief & Courage
Following a long-scheduled bilateral meeting with President Nicolas Sarkozy of France, President Obama spoke again on the tragedy in Arizona.

Moment of Silence for the Victims in Arizona
President Obama, the First Lady and White House staff joined many across the country in observing a moment of silence to honor the innocent victims of the senseless tragedy in Tucson, Arizona, including those still fighting for their lives. Watch the video.

Today's Schedule

All times are Eastern Standard Time (EST).

10:00 AM: The President receives the Presidential Daily Briefing

11:00 AM: The President meets with senior advisors  

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

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Seth's Blog : "I've got your back"

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

"I've got your back"

P18ButchCassidy These are the words that entrepreneurs, painters, artists, statesmen, customer service pioneers and writers need to hear.

Not true. They don't need to hear them, they need to feel them.

No artist needs a fair weather friend, an employee or customer or partner who waits to do the calculus before deciding if they're going to be there for them.

No, if you want her to go all in, if you want her to take the risk and brave the fear, then it sure helps if you're there too, no matter what. There's a cost to that, a pain and risk that comes from that sort of trust. After all, it might not work. Failure (or worse! embarrassment) might ensue. That's precisely why it's worth so much. Because it's difficult and scarce.

Later, when it's all good and it's all working, your offer of support means very little. The artist never forgets the few who came through when it really mattered.

Who's got your back? More important, whose back do you have?

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