marți, 5 iunie 2012

Don't Like Snake Oil? Stop Buying It!

Don't Like Snake Oil? Stop Buying It!


Don't Like Snake Oil? Stop Buying It!

Posted: 04 Jun 2012 01:46 PM PDT

Posted by Dr. Pete

Every few months, some mainstream news outlet runs a piece on how SEOs are just a bunch of “snake oil” salesmen. The implication is clear – we’re the carnival barkers of marketing, promising you #1 on Google and bottling moonshine as magic potions. Cue outraged SEO industry posts until we’re out of breath, wait 6 months, then repeat.

Here’s the simple truth the angry back-and-forth arguments ignore – there would be no snake-oil salesmen if people weren’t lining up to buy it. I’m not here to excuse thieves and liars – they exist, and they should be called out. I’m here to tell you why you need to open your eyes and stop gleefully walking into the same trap over and over.

Why We’re All to Blame

This topic can get emotional fast, so let’s step back for a minute and consider another example in the technology industry. Lately, there’s been a lot of outrage about poor human rights conditions in consumer products’ factories, most notably Apple’s problems with workers at the Foxconn factory in China. One side is quick to defend Capitalism, while the other side rushes to blame corporate greed.

Both sides may be right, to some degree, and I’m not here to argue the veracity of the claims. The deeper, more interesting question is: what drives it all? Are corporations and shareholders looking to squeeze out profits? Sure, to some extent. What about us, though? We want a $600 computer that fits in the palm of our hand, plays movies in HD, takes video of our cats, and connects instantly to all of human knowledge. One month after we have it, we want it to be 10% lighter, 10% faster, make our cat look 10% fluffier, and cost $549. So, where did the greed really start?

Yes, “All” Includes You

Sorry, but you need to hear this. When you interview an SEO company, have wild expectations, only hear what you want to, demand results “by any means necessary,” and want it all for just $99.95, then what do you expect is going to happen? You’re going to attract thieves and liars, and you’re going to deserve it.

Ok, rant over. This isn’t about being holier-than-thou and I’m not just here to scold you. I sincerely want people to stop selling and buying snake oil. So, here are six tips to keep you from wasting your money on magic beans...

(1) Educate Yourself

I know what you’ll say – “I don’t have time, and SEO is complicated.” Guess what – that’s exactly what the snake-oil salesmen want you to believe. They may even say it out loud during your first meeting. Modern online marketing is complicated and covers a lot of ground, but you don’t have to know everything. Invest a couple of weeks in learning just enough of the basics so that you can ask the right questions. While I was writing this post, we re-launched The Beginner’s Guide to SEO – that’s a great place to start.

It’s not just about SEO, though – educate yourself about the company you’ll be working with. Is their reputation good? Do they even have a reputation? Do they have a website (I hope so, but you’d be surprised)? How long have they been around? It’s amazing how people will spend hours deciding whether or not to see a $10 movie or research where to get a donut but then will walk into a meeting and spend $10,000 with no information at all.

(2) Trust Your Instincts

We all feel pressure – time pressure, budget pressure, angry boss pressure, and just the pressure of fatigue and wanting to move things forward. When that pressure kicks in, we ignore our gut. We walk into a room and instantly have a bad feeling or just plain dislike the people we’re talking to after 5 minutes, but we shake it off because we want the ball to keep rolling. Don’t ignore your instincts – almost every time I’ve had a bad feeling about a prospective vendor or client and brushed it off, I’ve regretted it. There’s always another vendor, and the sunk cost of a couple of hours of meetings is nothing compared to what you’ll lose if you pay for 6 months of bad SEO.

(3) Roll to Disbelieve

Sorry, nerd joke.  If it looks too good to be true and it sounds too good to be true, then it’s probably a duck. Look at all of the recent Ponzi schemes where people were getting a 178% return rate against a market that was at -3%, the creator of the scheme got busted, and then EVERY SINGLE INVESTOR acted completely shocked. Really?

We don’t believe most lies because of the skill of the liar. We believe most lies because the liar tells us what we want to hear. Ask the tough questions, even (or especially) if you like what you hear. Bare minimum, make sure you ask about the next two items…

(4) Ask About Tactics

We’re a very results-oriented business culture, and that’s great. You should ask about metrics and ROI and know what you’ll get for your money. Just don’t let empty promises of results gloss over the details of what specific tactics the vendor plans to use. It’s not just about whether they use “white-hat” or “black-hat” tactics – it’s about whether they have a plan at all. A qualified vendor should be able to map out what they’ll do, and they should be able to explain why they choose to do it that way. It’s also about accountability – if someone tells you what they’re going to do, you can check later to see if they did it.

(5) Find Out the Risks

All SEO carries risks, no matter how “white-hat” it is – most notably, the risk that you’ll spend your money on something that provides no benefit. Every vendor should be able to ballpark the risks in their approach – if they start saying things like “We only use Google-approved methods,” keep pushing. Rules change, and the best SEOs know how to adapt. The ones who think their methods will always work (just because they’ve worked so far) are the ones whose clients get slammed by algorithm updates.

(6) Plan Status Updates

The worst thing you can do is to set a vendor loose, check back in six months, and realize they’ve done something completely different than you expected. Actually, there’s something even worse – when you check back after six months and they can’t even tell you (or won’t tell you) what they’ve done. We see this all the time in link-building – someone hires an SEO firm, rankings drop months later, they suspect the vendor was to blame, but they have no record of what that vendor actually did. I’ve been involved in the kind of detective work that happens at this point, and it isn’t pretty.

Treat your vendor like they’re part of your in-house team – you don’t have to micro-manage, but you should demand accountability. It’s good for both of you – as a conscientious vendor, nothing’s worse than going in the wrong direction for months because of bad communication. I think an Agile approach (borrowed from the software development world) works well – do short, frequent check-ins, agree on some kind of documentation (like a shared document with link sources or tasks), and adjust as needed.

What About Black-hats?

Before I hear about it in the comments, let me be perfectly clear - when I say “thieves and liars”, I am not talking about “black-hat” SEOs. I’m talking about companies that literally steal their clients’ money and lie to them about risks and results. If you want to pursue black-hat tactics, in the sense of knowingly violating Google’s policies, that’s your business. Whether or not I agree with you, all of my advice in this post still applies. Skilled black-hats may not advertise their tactics openly, but once you’re face-to-face with them as a prospective client, they should still be honest about their methods and the risks.


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Rand's Restaurant & Bar Guide to Seattle

Posted: 04 Jun 2012 03:10 AM PDT

Posted by randfish

Many, many folks in the technology, startup and marketing fields come to visit Seattle each year for big events like SMX, Mozcon, SIC and Techstars Demo Day. And in the past, plenty of you have emailed members of our staff asking a critically important question: "Where should I go to eat and drink?"

Being craft-cocktail-hipster Northwest foodie snobs, many of the Mozzers are obsessed with dining and boozing to the very best of our ability. We have weekly beer nights, take out tons of visitors to restaurants and bars across the city and are constantly trying the latest and greatest of what Seattle has to offer. If you follow any of the Mozzer FourSquare accounts (e.g. Jamie, Aaron, myself), you'll see what I mean. Hence, it's our solemn duty to make sure you eat phenomenally well while in the Emerald City. To do that, I've assembled this guide.

A few caveats - since most visitors to Seattle stay in the urban, downtown core, I've tried to keep everything in walking (or very short cab-ride) distance. From the downtown hotels, nearly everything on this list is within a 25 minute walk, and much is under 15. From the waterfront (where SMX is held), the distance is a bit greater for the Capitol Hill locations, but still do-able (and so worthwhile). Below is the Google Map I've created, featuring all the restaurants and bars along with some personal notations on each.


View Moz's Seattle Food & Drink Guide in a larger map

Note that you can click on each location and get a brief description, too.

I'll also list each of the restaurants/bars, with a link to Urbanspoon so you can see more. These will be roughly (but not precisely) in order of how much I like them, so if you trust me completely and need to narrow down your selections, you can just pick from the top few :-)

Let's start with the downtown core & Pike Place Market:

  1. Black Bottle (blasted broccoli is all you need to know)
  2. Bisato (shockingly good Venetian tapas)
  3. The Upstairs (ask the bartender for Upstairs' history, but only if you're not squeamish)
  4. Daily Dozen Donut Co. (crack)
  5. Michou Deli (Mozzers' favorite sandwich spot)
  6. Li'l Woody's (fig+chevre+bacon on the best burger I've had in the city)
  7. Local 360 (everything's local, even the music they play)
  8. Spur Gastropub (molecular gastronomy that's not too-over-the-top)
  9. Cafe Yarmarka (awesome Russian pelmeni & perogi)
  10. Matt's in the Market (upscale lunch + dinner overlooking the market)
  11. DeLaurenti (Italian deli w/ good pizza and panini)
  12. Il Corvo (Only two pastas each day, but they're awesome)
  13. Lola (Tom Douglas' foray into Mediterranean is quite solid)
  14. Le Pichet (go during happy hour; marvel at the liver pate)
  15. Pink Door (sit on the amazing patio)
  16. Fonte Coffee & Wine Bar (coffee, beer, even flatbreads are good)
  17. Shiro's Sushi (one of Seattle's best traditional sushi joints)
  18. Serious Pie (flatbread-style pizza that's very tasty)
  19. Le Panier (phenomenal macaroons)
  20. Branzino (comfy Italian seafood & pasta)
  21. Lecosho (all things pork)
  22. Long Provincial Vietnamese (solid Vietnamese w/ great hot sauce)
  23. Pike Pub & Brewery (great for groups, try the "Kiltlifter")
  24. The Brooklyn (fancy-pants seafood, oysters + steak)
  25. Barolo (fancy-pants Italian)

And then go up to Capitol Hill, which is a slight bit more of a walk, but features many of my favorites:

  1. D'Ambrosio Gelateria (most authentic Italian gelato in the US)
  2. Tavern Law (they make literally the best cocktail I've ever had)
  3. Barrio (upscale Mexican)
  4. Canon: Whiskey & Bitters Emporium (speaks for itself)
  5. Montana (my favorite dive bar)
  6. Marination Station (Korean+Hawaiian sliders & tacos)
  7. Anchovies & Olives (Northwest+Italian)
  8. High 5 Pie (obviously, they make amazing pie)
  9. Knee High Stocking Company (speakeasy-style drinks and surprisingly good food)
  10. Momiji (great sushi, particularly the rolls)
  11. In the Bowl Noodles (It's so good, it's vegetarian and I'm still recommending it)
  12. Terra Plata (great Northwest fusion)
  13. Oddfellows Lodge (excellent for breakfast and late night)
  14. Cupcake Royale (Geraldine's favorite cupcakes; 'nuff said)
  15. Stumptown Coffee Roasters (maybe the best coffee in a coffee-obsessed city)
  16. Big Mario's Pizza (Only place I've ever found w/ true NY-style slices)
  17. The Unicorn (super-insane, clown themed bar with fried snickers)

I also wanted to provide a few places NOT to go in the downtown area, because they're sadly overhyped/overpriced and not worth it (or, in some cases, they're just not "special," e.g. you can find something like Met Grill anywhere in the US) - Canlis, Wild Ginger, McCormick & Schmick's, Metropolitan Grill, Steelhead Diner, the "Original" Starbucks (which, FYI, is not the original, just the oldest one still around), Palomino, Blueacre Seafood, Icon Grill, Lowell's (unless you're just going to get a beer upstairs and for the nostalgia of Sleepless in Seattle).

And finally, if you're willing to travel a bit outside Downtown/Cap Hill for something special, here's my top 10 (note: these aren't on the map; sorry):

  1. Joule (brilliantly done korean+french fusion w/ no pretention)
  2. Phnom Penh Noodle House (awesome Cambodian; get the beef la lot)
  3. La Carta de Oaxaca (their mole is literally the best I've ever had)
  4. Revel (korean+northwest that's over-the-top tasty, but prepare for a long wait)
  5. Serafina (maybe my favorite Italian in the city)
  6. Rover's (super fancy, super pricey, but actually worth it)
  7. Sichuanese Cuisine (truly traditional Chinese, just be cautious in ordering  if you're squeemish)
  8. Pam's Kitchen (curry/roti from Trinidad and Tobago; shockingly tasty, but very spicy)
  9. Bitterroot BBQ (possibly the best BBQ in Seattle with a definite hipster twist)
  10. Ocho (consistently excellent tapas & drinks in Ballard)

There you have it! My personal recommendations on where to eat and drink while in the downtown Seattle core. If you visit any of these (or anything else you love), please tweet at me (@randfish) and let me know how it goes!

p.s. This list doesn't include a ton of amazing places I LOVE in all sorts of other Seattle neighborhoods. Maybe I'll assemble something like that in the future. It also probably isn't exhaustive in the area I did cover and it reflects my personal taste, so if you like Applebee's, this list is almost certainly not for you. :-)

p.p.s. Please feel free to add your own favorites below (and don't feel constrained to keep it to the downtown core, but do provide location links so others can see where they'd need to go). Thanks!


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That's a Lot of Money!

The White House

Your Daily Snapshot for
Tuesday, June 5, 2012

 

That's a Lot of Money!

The gender wage gap puts women at a career-long disadvantage. In 2011, a typical 25-year-old woman working full-time all year earned $5,000 less than a typical man of the same age. In just 10 years, her cumulative lost wages will reach $34,000. If that earnings gap is not corrected by the age of 65, she will have lost $431,000 over her working lifetime.

This substantial gap is more than a statistic -- it has real life consequences for women and their families. That's why President Obama supports the Paycheck Fairness Act, which Congress puts to a vote today.

Find out more about the gap, and President Obama's steps to secure equal pay.

By the Numbers: $431,000

In Case You Missed It

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

My First Job: Rosye Cloud
Director of Policy for Veterans, Wounded Warriors and Military Families at the White House talks about her first job at the front desk in a doctor's office. There she learned the lessons of dealing with people, managing an office space, and handling strong personalities.

“Lookback” Progress
As part of the Administration's ambitious regulatory lookback, Cass Sunstein announces new agency progress reports that provide an update on recent achievements and new initiatives.

Celebrating Jewish History at the White House
For the third consecutive year, special items from the Library of Congress’ Jewish American collections have been put on display at the White House. In honor of Jewish American Heritage Month, President Barack Obama hosted a reception at 1600 Pennsylvania Ave. last Wednesday evening.

Today's Schedule

All times are Eastern Daylight Time (EDT).

10:45 AM: The President and The Vice President receive the Presidential Daily Briefing

11:15 AM: The President meets with senior advisors

2:00 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

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Seth's Blog : Pest control

Pest control

Your doctor now spends more of her time doing more non-medical tasks than ever before. Dealing with insurance companies, lawsuits, other doctors, partners and yes, marketing. My doctor's office probably has a special button on the phone system for each of these (okay, not lawyers, but you get the idea).

Just about all of us face the same thing when we engage with the world. The world wants to engage back!

Every interaction leads to a response, maybe three. Every marketing effort leads to the expectation that there will be other efforts. The next thing you know, there's no time left to actually get work done.

That's not news to you. What might be surprising is the logical conclusion:

A big part of doing your work is defending your time and your attention so you can do your work.

No one is going to do it for you and it's not easy or fun. It's work. But worth it.



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luni, 4 iunie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Max Keiser Interviews Hugo Salinas Price on Idea for Greece to Back Drachma with Silver

Posted: 04 Jun 2012 11:09 PM PDT

Inquiring minds are watching an interview by Max Keiser with With Hugo Salinas Price on a plan to back Greek currency with silver.

In the first half of the video below, Max discusses unelected bureaucrats "running a gulag casino state" for their own benefit, financial terrorism against Ireland, and the simple-but-true (yet seldom initiated) concept that "bad debt banks should go bankrupt".

Max also blasts Christine Lagarde who herself pays no taxes yet harasses Greek citizens to pay theirs.

In the second half of the video, about 13 minutes in, Max interviews Hugo Salinas Price regarding silver.



For additional details and a link if the above video does not play, please see Keiser Report: With Hugo Salinas Price

Silver Backed Currency Details

It is difficult to fully express ideas in 13 minutes.

For a more detailed explanation of how Hugo's idea on silver currency might work, please see Silver, liquid and illiquid, the 'modified open mint' and gold & silver as parallel monetary systems by Hugo Salinas Price.

Role of Gold in Trade

For a discussion of trade imbalances and the role of gold please see Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited

Additional Thoughts on Silver

I asked my friend Pater Tenebrarum at the Acting Man Austrian Blog for some comments on proposal to reintroduce silver coins as currency. Pater responded ...
At first glance, giving the coins a higher monetary than bullion value might seem a bit strange, but right now we have money with no value at all except the legally determined face value.

With silver coins you'd at least have coinage that not only has a face value, but also a commodity value. Obviously if one wants the money to be used in payment, the silver in it must not be worth more than the face.

Hugo is correct that one can not have silver and gold currency at a fixed ratio. In principle, a dual monetary system with silver and gold, but no fixed relationship between them seems feasible to me.

Unfortunately, the proposal probably won't fly because the government is not interested in making money honest. Just think about the size of the federal debt. It's over $15 trillion and growing at over $1 trillion per year.

If this debt were to be redenominated in silver and/or gold, the government would be forced to stop spending. It won't stop that until the market forces it to. So Hugo is right; it's only going to happen once the current system crashes and burns.

That does not mean that his proposal wouldn't be feasibly in principle - it certainly would be.
A crisis has not hit the US yet but what about Greece?

I received Pater's response before Syriza, led by Alexis Tsipras caused a deadlock in the last Greek election.

Would a radical left party be open to a metal-backed currency?

The idea may seem far-fetched but there is certainly everything to gain and nothing to lose by trying.

Having sensible discussions is always worthwhile if for no reason than to plant seeds of ideas that may sprout at some unknown time in the future.

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


"Terror-Mongering" in Greece About to Backfire? Will Greeks Vote for "Complete Idiots"? Four Possibilities

Posted: 04 Jun 2012 02:21 PM PDT

The Financial Times reports Greek right a hostage to its own failures.
On June 17, Stathis Potamitis, managing partner at an Athens law firm, plans to break a promise he has kept since his participation in a 1970s clandestine student group that opposed Greece's military dictatorship. He will vote for the right.

"I'm now driven to the dreadful situation of having to vote for this man who is one of the causes of the problems we have right now," he says, referring to Antonis Samaras, New Democracy's leader. His friend, Niki Siropoulou, a marketing executive, is more succinct. "I have to vote for a complete idiot," she says.

Polls show New Democracy running a close race with Syriza – but it is hardly inspiring. "Terror-mongering will only get you so far," Mr Potamitis complains.

In a troubling sign for Mr Samaras, the MRB research firm found last week that educated voters aged 45 to 55 were tilting toward Syriza. Such voters – with children, mortgages and other duties – would normally seem unlikely supporters of a self-described "radical" party.

Dimitris Mavros, head of MRB, speculates that the scale of Greece's crisis has left many believing it is now too risky to stick with the status quo. "They have no room to go back and say, 'Ok, let's wait three or four years for Greece to re-set,'" Mr Mavros says.

Close allies view Mr Samaras' predicament with a sense of tragedy. He opposed the austere terms of Greece's first bailout, arguing it would strangle the economy, before eventually signing under pressure from EU leaders.

At the party's headquarters in a sleek Athens office building, Chryssanthos Lazarides, Mr Samaras' chief adviser, calls the May 6 contest "the last of the post-dictatorship era".

He defends his boss's decision to press for early elections, arguing that the rapidly deteriorating economy was benefiting Syriza by swelling the ranks of the unemployed.

"This is a pool of desperate people. They have lost everything – or think they have lost everything," he says. "We wanted elections soon because after June there would be a Bolshevik government."
Four Possibilities

  1. Although I believe the Radical left will win the election it is entirely possible "known idiots" win. 
  2. The election might be stolen. 
  3. People might legitimately decide to give New Democracy one more chance. 
  4. Lastly, the military might forcibly takeover shortly after the election if it does not like the results.

The worst outcome is a military takeover.

The best outcome for Greece is if the Radical Left wins, cancels the bailouts, and riots do not ensue. Then from the depths of the depression, perhaps new leaders with sensible policies emerge.

Near-term, regardless of who wins (or takes over), there is going to be a lot more pain for Greece.

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


"Multi-Stage" Nannycrat Proposals; Devaluation - The Last Option? Note to Wolfgang Münchau, Martin Wolf, Jeremy Siegel at the Financial Times: Focus on the Obtanium not the Unobtanium

Posted: 04 Jun 2012 08:58 AM PDT

The stubbornness of economic writers, nannycrats, and eurocrats is nothing short of amazing.

No matter how many times Merkel rejects eurobonds and other transfer mechanisms, the vast preponderance of economic writers, nannycrats, and eurocrats keep proposing the same futile actions, over and over, and over again.

For example, Financial Times columnist Wolfgang Münchau writes How to build a fiscal union to save the eurozone.

One does not even have to read the article to know his proposal will never fly. Nonetheless, I did suffer through it. My conclusion is "it will never fly".

The reason it will not fly is that it requires both legislative changes and treaty changes, something rather obvious from the title I might add.

Would the German supreme court allow it? Of course not. Would all the Northern states vote for it in this economic malaise? Of course not. Would German citizens vote for it? Of course not.

Even if the answer to all those questions was different, here is one more key question:

Will the market wait for it? Of course not.

Impossible to Keep a Nannycrat Down

Nonetheless, it is impossible to keep a nannycrat down.

Münchau concludes with "I am, however, mildly encouraged by the sheer number of people in Brussels, Frankfurt, Paris and in Rome, who are now openly advocating a multi-stage fiscal union. There really is no alternative."

No doubt Münchau will be even more encouraged by the June 3 Wall Street journal headline Germany Signals Crisis Shift However, inside the article, the details are the same collection of fluff promises found elsewhere.
The issues on the table fall broadly into two categories. There are ideas such as creating joint European bonds, a European-wide deposit insurance and more broadly a "banking union," which fall into the category of mutual liability for sovereign debt and European banks. These are ideas French President François Hollande backs, but have been anathema to Ms. Merkel unless power to enforce budget discipline is shifted to Europe, which would mean a sacrifice of sovereignty.

Germany is pushing again for far-reaching European control of national budgets, a fiscal-policy union, which would require member states to cede control of national budgets to some future European fiscal authority, an idea France staunchly opposes. There is little chance of a breakthrough in June, but German officials said a process is beginning.

"There will be no big bang at the June summit," said a German official. "But it would be a big step for Europe if we succeed in creating a structure for the discussion, establishing a method, asking the right questions and putting it all into a certain timetable hat would be significant for Europe."

Speaking to reporters at a summit of Baltic Sea Coast leaders last week, Ms. Merkel suggested she is willing to engage in discussion about any idea on the table.

"Of course, it is possible to consider how we are going to develop over the next five to 10 years," she said. "But if we are constantly censuring our ideas it won't work."
Got that?

Merkel wants control over national budgets (something she actually cannot promise without a referendum), and France does not.

Meanwhile France wants eurobonds. Yet on June 3, for the 1000nth time Merkel Rejects Debt Sharing as Obama Urges Europe Action

Secret Plans? 

Virtually nothing has changed. And that is why I am sticking with what I said on June 3 in Another Meaningless Nannycrat Rumor: Europe Mulls "Secret Plan for New Europe"
More Holes Than Swiss Cheese

One look at the nannycrat participants led by Van Rompuy and Jean-Claude "lie when it's serious" Juncker, is all you need to do to know the plan has far more holes than Swiss Lorraine cheese.

I would have thought that no one could possibly take this seriously, even if such a meeting were agreed to.
There is no plan. There is not even a plan for a plan. The secret plan is to develop a secret plan at the already scheduled June summit with "meat on the bones" coming later.

For some inexplicable reason Münchau is mildly encouraged by all this hot air from nannycrats. I propose the only way to be encouraged by useless talk by nannycrats is to be a nannnycrat.

What Hollande Must Tell Germany

Financial Times columnist Martin Wolf writes What Hollande must tell Germany.

What can Hollande possibly tell Germany that has not been said by economic writers, nannycrats, and eurocrats 10,000 times or more?

The answer of course is "nothing".

Devaluation: The Last Option?

Finally, Financial Times columnist Jeremy Siegel proposes Devaluation – last option to save the euro
The least disruptive route Europe can take is to sharply lower the value of the euro. This will help improve the trade deficit in the peripheral countries and bring some relief to their downward spiralling economies. Euro depreciation would push the German trade surplus even higher and cause some inflationary pressures in those few European countries that are still near full employment. Given the strong German labour market, a lower euro would be likely to raise German wages and help close the gap between German and other European labour costs. The mild inflationary effect of a euro closer to dollar parity would be far less painful for all concerned than forcing austerity or internal devaluation on the peripheral countries.
Obvious Problems

There are two obvious problems with Siegel's proposals.

  1. Germany will not go along with higher inflation 
  2. It would not help if Germany did 

A devaluation of the euro while leaving the eurozone intact would do very little if anything for the  relative competitiveness of Spain, Greece, or Italy vs. Germany.

Reportedly, Greece needs a 60% devaluation of the Drachma. Spain may need a 30% or 40% devaluation of the peseta. What does Italy need?

See the problem? Even IF Germany were to agree to higher inflation, it cannot agree to differing rates simultaneously. The practical side says Germany would not agree to higher inflation in the first place and even if it would, certainly 30% is not in the ballpark.

How long would it take Spain to be competitive to Germany if inflation in Germany was 6% and inflation in Spain 0%?  My answer is forever.

The notion that inflation in and of itself cures anything is fundamentally flawed, and especially flawed between countries on the same currency.

 Obama's Imaginary "Crisis Cloud"

President Obama got into the act, warning Europe to end the "Crisis Cloud".

For a discussion of Obama's imaginary cloud as well as my first take on "nannycrats", please see Obama Seeks End to "Crisis Cloud"; Cloud? What Cloud?

Also see my original post on the "nannyzone" written June 2, 2011, nearly one year ago today: Trichet Calls for Creation of European "Nanny-State" and Fiscal "Nanny-Zone"

No Cloud, Only Clouded Judgements

There is no cloud, only clouded judgements by economic writers, nannycrats, eurocrats, prime ministers, and presidents.

The euro project is a failure. It was ill-conceived in the beginning, poorly executed throughout, and together with fractional reserve lending helped destroy Ireland, Spain, Portugal, and Greece.

With such a dismal track record it is somewhat a mystery why anyone would want the damn thing.

No alternative? Really?

Wolfgang Münchau says "There really is no alternative."

Of course there is an alternative. How about a serious discussion of how best to breakup the eurozone?

Focus on the Obtanium not the Unobtanium

It is time to focus on reality instead of the impossible. The reality is the eurozone is going to bust up and nannycrats better get used to the idea or the markets will impose that break-up in their own messy way.

The "obtanium" is a eurozone breakup.

The "unobtanium" is a fiscal nannyzone. And without a fiscal nannyzone and common bonds, the eurozone cannot stay intact.

Eurozone Breakup is Destiny

A breakup is destiny. The important question is "how?"

I discussed this last week on Capital Account with Lauren Lyster.



The main topics were US GDP, hyperinflation, Ireland, and a eurozone breakup.

Slow-and-Painful or Over-and-Done?

The slow, painful, and highly disruptive breakup is for Greece to exit, followed by Spain, followed by Portugal, followed by Ireland, and ultimately Italy.

The least painful way is for Germany to exit now.

Why?

Germany would immediately have a credible currency. Greece and Spain would not. Greece is highly likely to experience hyperinflation if it exits.

If Germany and the Northern countries exit, then the ECB can print at will. It can do what Spain and Greece wants.

Hollande can then have his fiscal union. However, would he still want that union if France instead of Germany is the main country backstopping the euro?

The "Real Alternative"

The choice is not between pain and no pain, but on how soon to get it over with. Bear in mind, Spain, Italy, and Greece have much to do whether the choice is slow-and-painful or over-and-done.

The PIIGS in general need to address work rules and pension reform. So does France.

The immediate irony is Spain's prime minister Rajoy says he wants this "Nannyzone", but would he actually obey the dictates of the Nannycrats if they ordered Spain to live within it's means and change union work rules as well?

Clearly the answer is no, yet Rajoy argues forcefully for a "central nanny" enforcer.

Germany is Going to Suffer

No one should think Germany will get off Scot-Free. It's export machine is going to break down either way. Debts owed to Germany will be paid back in depreciated euros not Deutschmarks.

German banks can somewhat prepare for this scenario by dumping all external debt immediately.

There are hundreds of other details to work out.

However, there are thousands of very disruptive details to work out case-by-case if the nannycrats succeed in throwing billions or trillions more euros down the drain hoping to save the unsavable.

Enough is enough. It's time for economic writers to end these silly nannyzone proposals and instead concentrate on an intelligent discussion on how best to break apart the eurozone. The market is certainly moving in that direction even if the current crop of politicians is not.


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


Japanese Stocks Hit 28-Year Low, 9 Straight Weeks of Losses, Longest Streak in 20 Years

Posted: 04 Jun 2012 12:48 AM PDT

A quick check of Sunday night futures shows a certified bloodbath in Asia-Pacific including China, Australia, India, and Japan.



Above chart courtesy of Yahoo! Finance Major World Indices.

The Nikkei Index is not at a new low, however the Economic Times reports Tokyo Broader Markets Hit 28-year Low Amid Global Rout
TOKYO: Asian shares tumbled on Monday, pushing the broader Tokyo market to a 28-year low, as investors extended a rout of global stocks and worried about a nightmare scenario of euro-zone breakup, U.S. economic relapse and a sharp slowdown in China.

Tokyo's broader Topix index lost 2.1 percent to 693.35, a level not seen since late 1983, as Asian markets plumbed new lows for 2012. Japan's Nikkei average fell 2 percent after last week marking its ninth straight week of losses, the longest such losing streak run in 20 years.

"It's not an issue of risk-on or risk-off anymore, it's nervousness all over until a clear direction emerges on a long-term trend," said Hisamitsu Hara, chief FX manager at Bank of Tokyo-Mitsubishi UFJ.
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List


Do you support equal pay for women?

The White House

Monday, June 4, 2012

 

Do you support equal pay for women?

It's been nearly 50 years since Congress passed the Equal Pay Act, but today a woman who works full time still earns just 77 cents for every dollar earned by a man.

That's not just unfair. When women, who make up nearly half the workforce, bring home less money each day, it means they have less for the everyday needs of their families. That's bad for kids, it's bad for communities, and it's bad for the entire country.

So President Obama is supporting the Paycheck Fairness Act, which is designed to update the Equal Pay Act of 1963 and help close the pay gap. Congress is scheduled to vote on the legislation this week.

To help raise awareness of pay discrimination and make it clear that it is a problem with serious consequences, we've put together a series of e-cards to highlight the issue.

Pick your favorite, then email it to your friends or share it online:

http://www.whitehouse.gov/equal-pay

See the cards

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