miercuri, 8 februarie 2012

10 Ways Paid Marketers Can Leverage Inbound Marketing

10 Ways Paid Marketers Can Leverage Inbound Marketing


10 Ways Paid Marketers Can Leverage Inbound Marketing

Posted: 07 Feb 2012 12:33 PM PST

Posted by JoannaLord

It happened friends. After years of Rand exposing me to the many benefits of inbound marketing I am ready to admit it...{big gulp}...today's marketer needs to be doing more than paid marketing. In fact, I'd go as far as to say, if you are only doing paid marketing you are failing yourself and your company. THERE I SAID IT. I feel better. Way better actually.

Because it's true. Things have changed. There is no longer two main players in the game (SEO and PPC). Search marketing itself has evolved. We've covered a great deal of this here on the blog so I won't go into it too much. If you need a reminder, I urge you to go check out Rand's posts where he outlines The New Era of Inbound Marketing, and outlines how quickly it is growing. As marketers, we saw the shift coming, and now we are feeling it in our every day gigs. Our roles are expanding as traditional SEO itself expands. There is so much happening all around us. Who is freaking out? Yeah me too.

paid and inbound marketing crossover
 

The real question you may be asking yourself is, "why is this paid marketing lady talking about inbound marketing?" Good question. The other day I was running through my to-do list and I couldn't help but notice how not-focused it was on paid marketing. In fact, most of my day was spent brainstorming with others on how to better share data, repurpose existing assets, and collaborate. While Justin and I manage paid marketing here at Moz, more and more of our time is spent on learning and leveraging our inbound efforts more effectively.

I thought I'd run through some ways that I'm leaning on our inbound marketing efforts to both reduce Moz's costs and capture more leads. Did you all know you could get leads for free? Yeah, crazypants I know. Anyway, here are the top ten ways I've leveraged inbound as a paid marketer here at Moz;

#10: Share Persona Outlines
You know who is really good at researching a target audience? Content writers. Recently, Michael King actually did a killer webinar on understanding your target audience and using social media tools to help define your best audience. It covers this concept really well. The idea is there are so many excellent demographic tools available to us now that these social networks want us to buy ads on them. We can look at audience sizes, location, categories, etc. All of this information has been helping organic marketers write targeted content for years. Paid marketers should be leaning on this data. What have they discovered that could help me better target high-value leads?  Outline your target audience and extracting personas can be really challenging, but the more teams connect on this the better all our marketing efforts are targeted.

#9: Leverage Landing Pages
Design resources are hard to come by. Here at Moz we have Derric and Ramil basically sleeping in the office and we still have a backlog of projects that need their creative brains. Ask any paid marketer what is the bottleneck and often you will hear design resources pop up. So what can we do? Use landing pages that our inbound marketers have already queued up for us! Brilliant! Often times these pages are beautifully designed, and laced with excellent engagement opportunities. These are mandatory in a solid inbound marketing page and they are requirements of a successful paid search lander...coincidence? I think not. 

#8: Exchange Conversion Reports
Oh conversion data, how sweet you are. I think most paid marketers are looking at the SEO data at their company. At least I hope they are! Beyond that though, there is more data you should be looking at. Here at Moz, we are a little data crazy. Jen, our Community Wrangler, puts together amazing metrics on our social activities every week. I have found that by mining her weekly data summaries I can see what content has gone hot and where. I can see where we are increasing brand awareness and what type of people are taking to the Moz brand. From there I can better allocate our budget to supplement these efforts. 

#7: Collaborate on Keyword Research
So this one is one of those things we keep saying we are going to do, but rarely does it actually happen. I am always amazed by the keyword research process. First off, it's really time consuming. Secondly, it's not effective as a one-time step, it really needs to be done in an ongoing basis. Yet despite all this, both paid teams and organic teams have been doing separate keyword research for years. Ick. Yuck.

An awesome benefit to doing inbound marketing is the speed in which we can detect if something resonates. Where as before I might have used paid search budget to test an adjective or product description, I can now push out a targeted piece of content and see how the audience responds. It's immediate data collection and its statistically valid. I can't get over the power of the social graph when it comes to crowdsourcing reactions to certain keywords. This is the new keyword research in my opinion. We must combine our traditional keyword tools with audience response across these inbound channels. 

#6: Repurpose Content
This one is pretty obvious, yet, so easy to skip over. I am guilty of this too often myself. Paid marketers need to be driving traffic to past inbound marketing wins. For example, about a year and a half ago we updated the Beginners Guide to SEO. This has gone on to be downloaded close to a million times, translated into other languages, and continues to be an excellent traffic driver. Guess how much of my paid marketing budget goes to driving traffic to this excellent piece of content? Yup you guessed it...none.

In the past, my argument was "it didn't drive enough free trial signups to show ROI." What I've realized over the past few months is I need to go deeper into what "conversion" means. What does acquisition mean? What does growth mean? My paid marketing efforts should be wrapped around these already successful content pieces. Repurposing hot viral content through paid marketing channels is a great example of how we can accomplish cross-channel marketing. Isn't it pretty when we all get along? Who wants to hug? Bueller?

#5: Share Customer Feedback
Customer feedback is gold, pure gold. Inbound marketing is about being found online through a variety of activities -- content publishing, social engagement, etc. A huge benefit of these conversations and interactions is the wealth of feedback you can receive from the community you have created. Often here at Moz, we will ask our community team to help us understand what our customers really love about our PRO service. We can hear right from them what keeps them happy, and what we can do better. This helps drive our marketing messages and our product roadmaps. Sharing the customer feedback and voice is so important, and the value found in sharing that across multiple teams in the organization is huge.

#4: Planning for Resources
Over the past few years we have seen the expectations of an online marketer change. We have more on our plates, more tools to log into, more reports to pull, more content to write, and so on and so forth. Inevitably these demands require more resources and more talent on any given project. I have found that by asking the organic marketers and community marketers here at the company what they are working on, I can better plan for my paid projects. If we are contracting a copyeditor for a content piece, I can slip in a request to revisit some ad copy headlines in the same contract. I can also repurpose design resources for banners, and landers. By knowing what your inbound team is working on, all of us can push out more faster. This is a huge benefit to connecting the to teams in both goals and resource planning.

#3: Fuel the Fire
I am a big fan of the halo effect as it applies to marketing. The halo effect, for those that might not know, is when customers show a bias to a product or brand based on some favorable or pleasant experience they have had previously. The beauty of it as it applies to today's marketing efforts is there are so many opportunities for a brand impression, and most of which are free.

A positive conversation a brand representative has with a user on a Facebook page may be enough to persuade a user to click a retargeting banner when faced with the brand's logo. Those two combined may build enough trust to persuade them to take a free trial. I call this "fueling the fire." While paid marketing may be measured on a CPA basis, there is a lot that happens prior to an action that influences the likelihood of a conversion. Inbound marketing offers mutiple opportunities to positively bias a potential customer. The goodwill a customer has in a brand often has very little to do with push marketing efforts, but has everything to do with these more organic experiences.

#2: Prequalify a Message
At the heart of it, marketers are story tellers. We love to persuade. As a paid marketer I spend most of my time coming up with ways to message my audience. Sometimes it's a new audience and sometimes it's my current audience, but either way I need to constantly be testing new ways to capture their attention. Prequalifying a message can be time consuming and can cost a lot of money depending on how I test it.

In the past I may have run a banner campaign on a relevant blog post and looked at metrics like CTR and CR. I may have also thrown money at a focus group (and whoa those can cost a lot) to see how people responded to a story we had crafted. These days I can use the power of social to test messages in record time. I can put together a presentation or a white paper and see how many times it gets shared, viewed, and downloaded. By counting these "social votes" I go beyond just clicks as a means of pre-qualification. It's a really great way for me to collect good data fast.

#1: Strengthen the Brand's Story
While the other nine ideas are great, this is my favorite. Nothing is more powerful than a consistent marketing message. Over the years I've worked to connect retargeting banners, paid search ads, landers, affiliate banners, and social advertising to send a strong and cohesive message. You know what stinks about that? All of those cost me money...which is no fun. Keeping money is fun. Spending all your money...not fun.

For promotions or time sensitive messages, if I really wanted to see an impact, I had to have serious budgets. There has to be a better way. Aligning some of these paid efforts with some inbound efforts makes for an even more compelling story for half the cost. As you push out new things and try to create buzz, you need to be asking yourself, "Is this the best use of my time and money?" I think as a paid marketer we can often forget to take that pause. We rest on the channels we know well but we need to push for more.

In Conclusion

Rand was right. In fact, all of my SEO friends were right. While paid marketing has a role to play in all of this, the direction the web has taken demands more from us marketers. While I am not sold that inbound marketing is all any marketer needs, I do believe there is a synergy between the two that can be very powerful. If we share resources, connect data, and collaborate rather than compete I think both teams win. I'm super excited about what this means for the future of paid search marketing. If you do paid and you aren't connecting with your organic marketing and social teams, you really are making your job harder than it needs to be. 

I'd love to hear from you guys if there are other ways you have seen the teams connect and work more effectively together. Where do you see this all going as social marketing and content marketing continue to take more of our time as marketers? Where does paid fit into this? 
 


Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!

Video: President Obama Launches a Marshmallow Cannon

The White House

Your Daily Snapshot for
Wednesday, February 8, 2012

 

Video: President Obama Launches a Marshmallow Cannon

Yesterday, President Obama hosted the second-ever White House Science Fair, featuring robots in the Blue Room, rockets in the Red Room,and marshmallow cannons in the State Dining Room, showcasing the talents of next generation of scientists, engineers, inventors, and innovators.

President Obama got the chance to shoot a marshmallow across the State Dining Room using 14-year-old inventor Joey Hudy’s "Extreme Marshmallow Cannon":

President Obama Launches a Marshmallow

In Case You Missed It

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

Harnessing Science, Technology & Innovation to Promote Global Development
Answering President Obama’s call to harness science technology, and innovation to spark global development, Administration officials announce initiatives from across the government to generate new solutions to long-standing development problems.

Protecting Taxpayer Dollars by Strengthening SNAP
The USDA has launched the Fighting SNAP Fraud website to root out abuse in the Supplemental Nutrition Assistance Program.

Don’t Mess With Texas … Science Students
At the White House Science Fair, two Texas teams epitomize the President’s call for “hands-on” learning to help up America’s game in STEM education.

Today's Schedule

All times are Eastern Standard Time (EST).

10:30 AM: The President receives the Presidential Daily Briefing

11:00 AM: The President meets with senior advisors WhiteHouse.gov/live

12:45 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

2:00 PM: The President attends the Democratic Senate Caucus Retreat

4:00 PM: The President and the Vice President meet with Secretary of State Clinton

WhiteHouse.gov/live Indicates that the event will be live-streamed on WhiteHouse.gov/Live

Get Updates

Sign up for the Daily Snapshot

Stay Connected

This email was sent to e0nstar1.blog@gmail.com
Manage Subscriptions for e0nstar1.blog@gmail.com
Sign Up for Updates from the White House

Click here to unsubscribe | Privacy Policy

Please do not reply to this email. Contact the White House

The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

 

 
 

The Challenge of Selling SEO & Forgetting the ‘Human Ranking Factor’

The Challenge of Selling SEO & Forgetting the ‘Human Ranking Factor’

Link to SEOptimise » blog

The Challenge of Selling SEO & Forgetting the ‘Human Ranking Factor’

Posted: 07 Feb 2012 04:31 AM PST

As with selling any service, selling SEO services is an extremely challenging task. Here are my observations of two opposite ends of the spectrum of what SEO consultants often experience with selling SEO services.

Give me a two day optimisation strategy

We'll often get contacted with the following, "We want a two day web optimisation strategy implemented." Many neophyte consultants lick their lips and pounce on the 'opportunity' with alacrity. They start shooting off proposals, buffing up their hallowed methodology, and more.

A more sane, measured and customer-serving response to the request for a two day optimisation precess is, "Why?"

That always stops people in their tracks. "Why do you want a two day strategy implementation for your website and how do you know that's the right thing for you?"

In the act of asking that question, you start actually consulting. And if you engage in a real dialogue on the basis of those questions you will gain bracing insight into the real issues, challenges and aspirations of the potential client. You may also get a bracing introduction to the assumptions they're making — many of which are potentially untested.

It may well be that a two day implementation process is like a relatively empty vessel, into which (after suitable diagnostics and appropriate design) you can pour content that will actually serve their needs and best interests. But it may also be that a half day audit would suffice, and the real action needs to take place at their organisational levels, or with a different group of people, or may require preliminary contact with customers or other stakeholders. It could be that a six month process is needed.

My recommendation to companies who put out a request like the one above, and get a proposal back in response, is to disqualify the person or agency from further consideration, as the request has no meaning without further exploration.

And if you are an agency or a freelance consultant and receive a request like the above, differentiate yourself meaningfully by helping to get to the core of what's driving the request, rather than getting infatuated by the format proposed.

Avoiding the panacea of empty process

Here's another common challenge. An organisation decides they need to create a SEO strategy or a digital marketing strategy and manage its roll-out. They get an agency with a strategy implementation process, anchored in the balanced scorecard or some other framework. As they proceed, courtesy of this framework, they are deluged with meetings, with process charts, with communiques, and eventually they arrive at what they perceive to be ‘The Holy Grail’. Namely, they have a clear map. All inconsistencies are removed (at least on the charts anyway), and the path forward glitters like a mythical ‘Yellow Brick Road’.

The problem in the map is not the territory, and it never has been. The problem is that underlying the process clarity are dysfunctional relationships, misguided leadership behaviours, poorly aligned teams, social networks that don't operate well, departmental practices that may be out of kilter with strategic aspirations, information hoarded rather than shared, a culture that is ossified with past practices rather than vitalised by future aspirations. And eventually the 'knowing/doing gap' will become that much more profound.

My humble advice is that once you have process clarity, you have to convert that into a more human map: of behaviours-in-action, team composition and alignment, presence of vibrant or nullifying relationships, communication and network effectiveness, leadership role-modeling and relevant efforts at culture-shifting in order to make the processes actually manifest. Until these adaptive elements are infused into the process steps, to humanise and actualise the processes, we run the risk of trying to run the world from an operating manual.

It doesn't work. In fact, most of us don't even run our computers from a manual. We get some hands-on experience while drawing on some guidance, then tinkering and adapting based on results. Alas, in an organisation there are many more moving parts, and my 'tinkering' can have expensive consequences if not synergised with the learnings and efforts of others.

Process clarity and human engagement must march together. You can see an organisation as a collection of processes and plans. Fair enough. But you can even more meaningfully see it pulsating with human performance. In other words, the subtotal of all the actions, interactions, behaviours, collaboration and communication between all the people who make a difference to the success or failure of the organisation. You can see the organisation as a patchwork quilt of teams, conversations and acted upon commitments. These are human dimensions, or as I’d like to call it, the ‘human ranking factor’ and if not addressed, all the gewgaws and trinkets of process clarity will be fallow and leave your strategic marketing vision unfulfilled.

Image credit: mootown

© SEOptimise - Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. The Challenge of Selling SEO & Forgetting the ‘Human Ranking Factor’

Related posts:

  1. Google+ is the Greatest Discussion Forum in Human History
  2. Is Reading Level a Google Panda Algorithm Factor?
  3. 30 (New) Google Ranking Factors You May Over- or Underestimate

Seth's Blog : How do they know you're not a flake?

How do they know you're not a flake?

Before your link gets clicked or your proposal gets read, a busy person is going to triage it to find out if it's even worth glancing at. Since everyone is now connected, the new permeability has created a deluge of noise, and just about everyone worth contacting is taking defensive measures.

  • Do I know this person?
  • Did someone I trust send them over?
  • Where does she work? (Ideo? the FDA? The New York Times?)
  • Has she won an award? Is she famous?
  • Are there typos and is the design sloppy?
  • Are they pestering me?
  • Do I already follow this person online?
  • Does music play when I visit the website?
  • Will my boss be pleased when I bring this project up?
  • Who else is pointing to/referencing/working with this person?
  • Is it too good to be true?

Notice that all of these questions get asked before the idea is even analyzed. Doesn't matter that this might not be fair, it's a hurdle you have to cross.

Not all good ideas are pre-proven, sophisticated and from reliable sources. That's not your fault. Doesn't matter. In a noisy world filled with choices, you can't blame your prospects for ignoring you. I know that you're talented and have a lot to offer, but do they?

 

More Recent Articles

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

Don't want to get this email anymore? Click the link below to unsubscribe.




Your requested content delivery powered by FeedBlitz, LLC, 9 Thoreau Way, Sudbury, MA 01776, USA. +1.978.776.9498

 

marți, 7 februarie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Postponed Due to "Political Suicide"; Flag of Germany Burned, Could This be a Trigger?

Posted: 07 Feb 2012 06:41 PM PST

Greece bailout talks that were postponed on Friday to Saturday, then Saturday to Sunday, then Sunday to Monday, then Monday to Tuesday. They have been postponed again, this time for a reason that makes perfect sense "Political Suicide".

The New Work Times reports Greece Puts Off Decision on Austerity Measures Amid a Strike Protesting Them
As thousands of Greeks walked off the job in a general strike on Tuesday to protest stringent new austerity measures, there was a growing sense that the country was reaching a critical point in its efforts to survive the debt crisis.

Greek political leaders postponed for yet another day a decision on an austerity package — including 20-percent cuts to base pay for workers in private companies and a loosening of public sector job protections — in exchange for the billions in loans Athens needs to prevent a default in March. With elections looming as soon as April, the parties fear that they are essentially being told to commit political suicide to save the country.

If that indeed is the case, analysts here say, it is not clear what will replace them, making Greece a potential laboratory for a volatile mix of austerity, populism and social unrest.

Not that the old order, widely derided as corrupt and inefficient, is likely to be deeply mourned.

For most Greek voters, the two larger parties participating in the fragile tripartite coalition of Prime Minister Lucas Papademos — the Socialist Party and the center-right New Democracy — were already drained of political capital before the debt crisis by decades of self-interest and corruption. That has now been capped by two years of unrelenting austerity that has hurt most Greeks but has ultimately failed to revive the system, or even change it in any significant way.

With unemployment at 19 percent, businesses closing, credit scarce and the proposed new wage cuts expected to further decimate the shrinking middle class, the hard left and extreme right are rising.

With Greek popular anger at the country's foreign lenders rising — a German flag was burned in front of Parliament at a demonstration on Tuesday — the Socialists and New Democracy are treading a fine line: They want to push back against the troika enough to regain some political capital — and keep more Greeks from falling into poverty — but not push hard enough to precipitate a default.

If the Greek political leaders do not agree to accept the new austerity measures in the coming days, Greece will run out of time to complete a broader deal for the voluntary write-down of Greek debt before a bond comes due on March 20. If Greece cannot pay the bond, it will default, which could result in its leaving the euro zone, among other ill effects.

Most Greeks say they have lost what little faith they had in the political system. "None of the parties we've been voting for have anything to offer," said Vassiliki Karanasou, 42, an employee in a biscuit factory north of Athens who was participating in a demonstration outside Parliament on Tuesday.
Eventually, Will Come a Time

I keep repeating Eventually, Will Come a Time When
Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the "bail out" debt foisted on their country to be null and void. That person will be elected.
Flag-Burning Trigger

For Greece, "eventually" may be at hand. The only thing missing is a party leader willing to stand up and tell Germany to go to hell.

That is not a comment on the desirability of  telling Germany to go to hell, rather a comment that is likely to happen. However, the austerity measures imposed by Germany and the Troika cannot possibly work, even though the worker reforms are badly needed.

What is causing the revolt? The sad irony of this mess is the flag-burning and latest strike is over the one thing that is needed: work rule reform.

The flag-burning incident could easily be a trigger.

All sides handled this very poorly straight from the get-go. Greece would have been better off defaulting 2 years ago and the EMU and ECB much better off to simply let it happen. Now Greece is totally and completely trashed, having agreed to austerity measures that cannot work and resisting work rule changes that can work, but only years down the road.

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


Banks Paying as Much as $35,000 Cash to Homeowners in Short Sales; Why and How Many?

Posted: 07 Feb 2012 10:53 AM PST

In a short sale, banks forgive the difference between what is owed and the sale price of the house. Recently, however, banks have started giving cash back to the sellers. So far, the programs are a drop in the bucket. There are millions of pent-up foreclosures and JP Morgan is doing 5,000 short sales a month, hardly enough to make a dent.

Still, "short sales represented 9 percent of all U.S. residential transactions in November, the most recent month for which data is available, up from 2 percent in January 2008, according to Corelogic."

Please consider Banks Paying Cash to Homeowners to Avoid Foreclosures
Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller's outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing large cash incentives, said Bill Fricke, senior credit officer for Moody's Investors Service in New York.

Losses for lenders are about 15 percent lower on the sales than on foreclosures, which can take years to complete while taxes and legal, maintenance and other costs accumulate, according to Moody's. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, said CoreLogic Inc., a Santa Ana, California-based real estate information company.

Karen Farley hadn't made a mortgage payment in a year when she got what looked like a form letter from her lender.

"You could sell your home, owe nothing more on your mortgage and get $30,000," JPMorgan Chase & Co. (JPM) said in the Aug. 17 letter obtained by Bloomberg News.

Tom Kelly, a JPMorgan spokesman, declined to comment on the company's incentives.

"When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure," he said in an e-mail.

Lenders spend an average of 348 days to foreclose in the U.S. and an additional 175 days to sell the property, according to RealtyTrac. In New York, a state that requires court approval for repossessions, it takes about four years to foreclose on a home and then resell it, the company said.

Lenders can often afford to forgive debt, offer the incentive and still make a profit because they purchased the loan from another bank at a discount, said Trent Chapman, a Realtor who trains brokers and attorneys to negotiate with banks for short sales.
What's Really Going on Here?

If the answer is "it's faster, quicker, cheaper" than foreclosures, then why don't we see more of them, lots more of them?

Could it be these are the real problem loans with clouded titles, questionable practices by lenders, or huge numbers of written complaints by borrowers? Add to that a dearth of willing new borrowers and I think you have the answer.

Addendum:

Reader Bruce comments ...
Hello Mish

The only solution, is as you have said, to speed up the process. Unfortunately, this begs the question, how much more insolvency can the banks sweep under the carpet?

All the best Mish! fight the good fight!
Not to mention the fact that politicians are against foreclosures and have delayed, at great cost, stepping up the foreclosure process.

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


Rise of the High Frequency Trading Robots

Posted: 07 Feb 2012 09:56 AM PST

I do not know enough about algorithm-driven High Frequency Trading to comment intelligently other than to say 100% without a doubt that someone is making a huge pile of cash from HFT or it would not be done.

You can watch an animated GIF that chronicles the rise of the HFT Algo Machines from January 2007 through January 2012 by clicking on the link.

The GIF starts out slow and boring, but watch the progression through the end.

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


New Merkozy Proposal "I will Give You Money If You Give It Right Back"; Mathematical Scam to Prevent CDS Triggers

Posted: 06 Feb 2012 11:59 PM PST

The Merkel proposal for Greece to cede budget sovereignty to a European commissioner has finally been trashed. In its place is a Spaghetti-O loop proposal to give Greece money only if Greece earmarks the funds to immediately pay back bondholders.

Please consider Greece bail-out funds could be split
European officials are insisting any new Greek bail-out programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.

Under a new Franco-German plan that senior European officials said is likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens as in the past.

The new fund would then ensure bondholders are paid off, while additional cash to run the Greek government could still be withheld if Athens did not live up to tough new reform demands.

Eurozone officials said they believed the escrow account would give European Union and International Monetary Fund lenders strong control over Greece's use of bail-out funds without stripping Athens of its budgetary sovereignty

"This is a better idea than the proposal of a debt commissar," said the senior French official. "It is more acceptable."

Although the idea originated in Berlin, Nicolas Sarkozy, the French president, embraced it during a news conference with his German counterpart, Angela Merkel, following a joint cabinet meeting between the two governments in Paris. Ms Merkel also signalled her support, saying it would ensure "this money will be reliably accessible".
Mathematical Nonsense

  • They give money to an intermediary
  • The intermediary gives it right back

The proposal is of course mathematical nonsense, at least in regards to the portion of money going straight back to the bondholders (most of it).

In regards to the portion that goes to Greece, I still have to wonder.

Creditors either give Greece the money or don't. Once again, there is little reason for the middleman unless they want the IMF to be the judge as to whether or not Greece is living up to the agreements.

Essentially, the EMU is taking 130 billion out of their wallet, putting 110 billion (or whatever) right back in their wallet and calling it 130 billion in "new funding".

The only thing that can be construed of as "new funding" is the additional amount that actually goes to Greece.

Why the Mathematical Farce?

I suspect the answer is to make it appear as if Greece is paying back debts, when it isn't.

Weren't dotcom and mortgage frauds based on the same methodology? In the case of dotcoms, intracompany arrangements were made to make it appear there were actual revenue flows when there weren't. In the case of housing, such maneuvers could be used to make it appear someone was making payments on their mortgage when they really weren't.

This setup is either mathematical ignorance or a scam to prevent triggering of credit default swaps. I lean towards the latter.

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