Central Perk

miercuri, 21 noiembrie 2012

The Top 5 Questions to Ask Yourself Prior to Launching Your First Blogger Community

Posted: 20 Nov 2012 06:49 PM PST

This post was originally in YouMoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc.

The power of blogs, from their passionately vocal owners to the amount of quality traffic and brand awareness they deliver, is an undisputed precedent here in our online marketing world. Playing the role of confidante, advocate, and subject matter expert for their readers, bloggers bring a unique voice and perspective that readers appreciate and resonate to, making them highly influential.

With the beginning appearances of “mommy blogs” first being hailed as hype, no one could have estimated the massive impact these vocal moms would have on consumers and brands alike. This turned the blogging industry on its ear and ignited the first wave of paid influencers that brands scrambled to adopt. Flash forward to today, where contracted blogger relationships are very much the standard de facto of many brands’ digital marketing strategies.

If you are amongst the many considering the possibility of starting your own in-house blogger program, take a pass at these five questions you should ask yourself prior to tackling your first blogger program initiative:

1. Are you ready?

Running a formal blogger initiative takes time, dollars, and resources. Whether you are working with a single blogger or several, it requires dedicated program management (read: man hours) and a true willingness (read: commitment) to do what it takes to achieve success. When evaluating your blogger program readiness, here are a few key questions to ask yourself:

Q: Do I, or someone within my company, have the bandwidth on a daily/weekly basis to put dedicated hours against this to ensure the program’s success?
By the very nature of the completely public and formalized relationship itself, program bloggers become an extension of your brand and are perceived as thus by readers and potential customers. Ensuring that there is someone on your team who can actively and frequently manage the relationship is paramount to both parties (contracted blogger and your business) being happy and contributing towards a successful program.

When building out your first program, you can expect to invest upwards of 120 hours as you ready the program to launch, and once launched, spend 3–7 hours a week per blogger. It’s also important to consider other team members’ time who will be working on the program as well, such as your lawyer (or whomever will be drawing up the contracts), your content developer (if you will be providing new visual content for the program), and possible others.

Q: Do I have the appropriate amount of funds available to support this type of initiative?
Professional bloggers run their blogs as a business; they expect to be compensated for their time. Most often, the quality and quantity of the work they perform for you will be directly tied to the level of compensation associated with it. Currently, industry averages for blogger compensation run between $50-$300 a post. However, there are many factors that impact compensation, such as level of blogger experience, blog traffic volume, type of post, and length of the contracted relationship, as well as prior agreed-upon performance metrics.

Taking a good look at your budget and understanding what you have to invest in this effort will help to determine your program capacity, such as how many bloggers you can afford, how many posts per blogger and how many weeks that you will be able to run your program.

Q: Do I have the support I need, to include my internal stakeholder approval and sign-off?
For those of us that do not have autonomous control over our marketing initiatives, not gaining sign-off from your leadership and key stakeholders is the one thing that will prevent you from launching your blogger program. Involving your leadership early on during the program vetting process helps educate them of the business opportunity that you see as well as the viable outcomes (more on how to define that in the next step).

2. Do you have a plan?

As the saying goes, if you fail to plan, you plan to fail. Planning out the primary objective of your program, what the program will accomplish, how it is going to accomplish it and how long it will take to accomplish will be key in helping you to set marching orders for those involved later on. When building out your plan, be sure to:

Set the primary objective for your program
Identify what it is that you want this program to accomplish. Whether your goal is more Facebook fans, email sign ups, or increased overall traffic, having a pre-defined primary objective enables you to set the foundation of your overall program framework, which then allows you litmus test other tactics against it by asking “Does this tactic help us accomplish our primary objective?”

Your primary objective statement doesn’t have to be complicated. A simple, “We are engaging with blogger partners to explain the value of our product, increasing traffic and email sign-up via our .Com site” would be perfect. Remember, it doesn’t need to be complex; it just needs to clearly communicate what your goal is.

Define your KPI's (Key Performance Indicators)
Once you have your primary objective identified, you can then build out the measures that quantify and validate your goal. For instance, if your primary objective statement is to “increase traffic and email sign-up via our .Com site,” you would then assign how many email sign-ups and how much traffic, either by percent or raw numbers: “Increase traffic by 35% and email sign-up by 15% via our .Com site”

Once your program is in market, you will be able to adjust tactics based on your quantified goals and how well your program is delivering results against the KPI's you have set.

Estimate your budget and costs
To help prevent overspending on your blogger program, begin by setting a realistic budget that takes into account the level of effort need to get the program up off the ground, adding an additional 10% of total level-of-effort buffer to ensure that you haven’t underestimated.

Think through everyone who will touch the program, from copyediting to creative, legal to program manager. Assign roles and tasks by the hour, with a specific cost associated with each tasked hour.

By getting granular with your program costs, you will be able to get closer to a true Cost-Per-Visit and Cost-Per-Acquire number associated with the traffic and conversions your soon-to-be blogger program will deliver, which are critical to know as you analyze your program’s success.

Note: feel free to use this Google Docs Template to help you hit the ground running when estimating your program

3. Have you built the brief?

The program brief is your best friend: a quick, easy-to-read, one-to-two pager that you will use when shopping potential program bloggers to see if they want to opt-in to your program. It clearly states your program background, objectives, and rules of the road. Here is where you will identify:

The business opportunity: What need are you meeting that your customers and potential customers are wanting a solution for? Here is where you identify your target audience, the channels that you will be targeting them in, and the solution you will be providing for them.

Your program objectives: This should ring a bell as you identified your primary objective earlier when you built out your plan. Now you can insert that very same statement here, to ensure that all program participants are clear on the program objective and wanted outcomes.

Your program participation and offering: Designed to clearly communicate the actions that you want your program bloggers to take, this informs them of the program particulars, to include specific milestones they must meet to be in compliance (and thus receive compensation) with your program.

Your program mandatories: This section is for defining your program’s absolute musts. You can use this section to provide “do’s” and “do not’s” – be sure to identify the critical must-do’s here so your potential bloggers can have a clear understanding of your program’s absolute requirements.

Your key milestones: It is helpful for potential bloggers to understand the timeline that they would be accountable to prior to signing up to participate. Setting hard deadlines and major milestones for your program ensures that expectations are clearly communicated, helping to facilitate program compliance.

A quick note on when to share your brief: I am often asked when the appropriate time to share the brief is – a sound business practice to put into place is the execution of a Non-Disclosure Agreement prior to sharing your brief. Typically, once you have vetted your potential blogger (as in qualified their traffic, writing, promoting capabilities, and audience reach) and they have expressed interest in working with you, requesting the execution of a simple Non-Disclosure Agreement will put your mind at rest and protect the sensitive nature of your brief. Most professional bloggers will not have an issue with this at all, as it has become standard business practice amongst most brands.

Stuck on building the brief? Take a gander at this quick-start Blogger Program Brief you can use to help kick-start your own

4. Have you come to mutual consent through contract?

Good contracts make for good business, and your blogger program is no exception. After sharing your brief and gaining opt-in, the next step is to execute the program contract. Much like the NDA, this is a common practice and your blogger most likely will be receptive to it, as it helps to protect both parties and layout best practices for a successful engagement.

When thinking through what is contained within your blogger program contract, this is the time that you want to consult your legal counsel or an expert who specializes in Internet Marketing Law. There are nuances to these types of contracted relationships and having a professional walk you through the implications is well worth the dollar investment. After all the time and effort you have invested, the last thing you want to do is take the risk of jeopardizing your brand’s reputation because your contract hadn’t been thought through properly!

When you meet with your legal counsel, a few of the critical subject areas you will want to be prepared to speak to will include:

Program performance benchmarks and compensation
This is where you state your performance expectations and compensation, to include frequency of posting, length of post, social sharing, and editorial quality. If you expect posts to contain a picture of your product or brand, here is where you need to state that. This is also the place that you will outline where and how they will link to you, whether it is your Facebook page, iTunes store, or .Com property.

Full disclosure statement and placement proximity
Ensuring that your program is compliant with FTC disclosure policy is of the utmost importance. Spelling out the full disclosure statement to be used and where it needs to be published in relationship to the campaign link is paramount to both parties maintaining FTC compliance.

Non-allowable concurrent promotional items
Because your brand becomes associated with your program blogger through the eyes of their readers, it is also important to think through what you don’t want the blogger to promote while engaged in your brand campaign. For instance, your brand may not want to be associated with topics such as sex, narcotics, or alcohol. You also may not want your blogger to promote competitive brands while your campaign is live.

True story: One of our program bloggers decided to use her blog to voice her opinion about the legalization of marijuana. Her post lived right next to our client’s ad and promotion post. Our client didn’t want to be affiliated with her personal views. Because we had thought through that possibility ahead of time and it was stated in the contract that she had agreed to, we were able to ask her to take it down.

Program non-adherence and right to cancel
Unfortunately, it’s sad but true: there will be bloggers that won’t follow the rules, won’t post the right content, and overall won’t be good for your program. Building in a program non-adherence clause that gives you the right to cancel the contract and exclude the blogger from your program is a mandatory; your legal counsel will provide you with the best language and terms that fit your program’s needs.

5. Have you set your bloggers up to succeed?

Blogger programs are just as much about the relationship you have with the bloggers inside of your program as it is about the relationship they have with their readers. Ultimately, heavily investing in the upfront “getting-to-know-you” part of the relationship can pay dividends as your relationship and program matures. Some great ways to help ensure that your bloggers are set up to succeed:

Onboarding and kickoff calls
A great program doesn’t start with an executed contract and then radio silence. Set up a “getting-to-know-you” call with your bloggers, where everyone prepares one slide about himself or herself. Be sure to include your personal slide as well; your bloggers are looking to you as the leader of the program and full participation from you will help set the tone for the rest of the relationship. After everyone introduces themselves, give the background story of the company, product and anything that helps to give context to the campaign that they will be participating in.

Set up a private program hub through Basecamp or Zoho Projects
This allows you to efficiently manage multiple communications in one centralized place, set a milestone calendar and post creative assets. It also allows program members to discuss program ideas and share tips. I have found that by bringing program members together, more times than not, they provide great insights and value when placed into a collaborative environment.

Give them what they need
Your blogger can’t write great content for you if they don’t have access to all the details they need. Being timely and providing super-clear specs, images and other important assets well before the post date ensures that they have what they need, allowing them to concentrate on doing what they do best.

Let them know how much you appreciate their work
A small thank you can go a long way. If you like the work they are performing for you, don’t hesitate to take a few minutes and shoot them a quick email. Being appreciated and knowing that you care is a great way to keep morale up for your program members.

If you have signed off on all of the above questions…

Congratulations! You are well on your way to rocking that blogger program. You will find that when done right, blogger programs are a viable tool in your digital toolbox, bringing increased awareness, traffic, and conversions. I wish you the best with yours!

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How to estimate Facebook advertising budget

Posted: 20 Nov 2012 05:05 AM PST

I usually get asked this question quite a lot: "I want to advertise on Facebook, how much of a budget would you recommend?" and thought I'd share with you my methodology of how I estimate and recommend budgets to potential clients who have never advertised on Facebook before.

1. Figure out target audience volume

The best thing about Facebook is that it provides you with audience volumes. Therefore, before you calculate estimated budgets, you'll need to obtain information on the different target audiences such as locations, age, gender, and other interests. Ideally the target audience profiles should be something like this:

Married women who live in the UK and are 40 years or older, who like, 'The Daily Telegraph', 'Homes Under the Hammer', 'Location, Location, Location', 'Grand Designs', 'John Lewis', and 'Ocado'.

Once you've got information on all your different personas, include them in Facebook's ad creation tool. You should see suggested volumes like so:

2. Now divide this number by 4

I think Facebook's targeted audience volumes are the number of FB profiles that match an advertiser's geographic/demographic and interest targeting (duh!). But these probably don't account for fake FB accounts, or that among those who do have FB accounts some have duplicate accounts (e.g. corporate account/personal account), some don't log-in as frequently as others, etc. So from the numbers I am seeing, Facebook doesn’t actually "reach" the total "targeted audience".

I have noticed that on average, out of the total number of people targeted, Facebook "reaches" only a quarter of that number (this is across all accounts I work on, so may change based on different campaigns or targeting). So to make things a little bit more realistic, I'd suggest dividing the targeted audience by four.
324,100 / 4 = 81,025

3. Make an assumption for the ad frequency (the number of times a user would see an ad).

I usually go by a frequency of 4 or 5 per person. But this number will change depending on the volume of the audience. If the audience volume is fairly high (say over a 100,000), I would go with a frequency of 1.5 or 2 per user. If the audience is small (say less than 10,000) then I'd probably assume a frequency of 15-20 per user.

In the example above I would assume a frequency of 1.5 per user, so I could assume the total number of impressions for a given day (assuming every user within my 'estimated reach' saw my ad) is 81,025 x 1.5 = 121,537 impressions.

Also I'd just like to quickly point out that I would usually target at a much more granular level than this; therefore, smaller target volumes would show a higher frequency than when you target at a broader audience like in the example cited here.

4. Make an assumption for your CTR

CTR is dependent on factors such as how well your ad creative is written and your bid amount. CTRs also vary depending on which vertical you operate in. I've noticed travel ads garner higher CTRs than the health sector, for example. Also, direct response ads will have higher CTRs than brand awareness ads. So you'll need to make a judgement on what you think is a realistic CTR. With travel related ads I use a benchmark CTR of 0.04%; if it's a competition or a giveaway, I'd assume a CTR of 0.10%; but for a less 'social' product or service I would assume a CTR of 0.015% (personally for me, this is the lowest acceptable CTR for Facebook ads). Based on this assumed CTR, you could obtain the estimated number of clicks per day. So for the above target audience, the estimated number of clicks (based on a CTR of 0.015%) is:

121,537 x 0.015% = 18 clicks

5. Multiply by 30 or 31

This is your estimated number of clicks per day. In order to estimate the number of clicks for the month, I would multiply this number by 30 (or 31).

Estimated clicks per month

= 18×30
= 540

6. Multiply by suggested bids

Now you could multiply the estimated monthly clicks by Facebook's suggested bid numbers. So in the above instance, the estimated budget would be:
Estimated monthly budget

= 540x£1.90
= £1,026

So there you go, here's an estimated budget for a particular target audience for you. You could potentially include different ranges of spend based on the suggested budget. In the above example I took the higher end of Facebook's bid suggestion. You could provide your client with maybe three different budgets based on the lower, middle and higher end of suggested bids.

Obviously the above methodology isn’t the only way to estimate Facebook budgets. I generally use this method for sales proposals and sometimes to make a case for budget increases. I would love to hear your thoughts and methodologies for estimating Facebook budgets, please feel free to add to the discussion within the comments below.

Image credit : birgerking

Seth's Blog : Fall recommended reading list

Fall recommended reading list

Here it is: My fall book list—this time, it's half a dozen new books, some music and even a gadget.

(Here are three past lists).

For the first time, I'm building my list using the beta version of a new Squidoo tool we call postcards. Now it's simple and easy to highlight a product or an idea and share it with friends. We take the postcards you build and arrange them into stacks, organizing them by creator, topic and popularity. You can even embed a postcard onto a website (see below).

What you see are the first steps of what we hope will be a powerful platform. I hope you'll try it out by recommending a few finds of your own.

The Stockholm Octavo

• Email to a friend •

marți, 20 noiembrie 2012

Mish's Global Economic Trend Analysis

No Greek Deal; Talks Postponed Till Monday; Who Blinks First?
Sky City: China to Build World's Tallest Building, 220 Stories, in 90 Days
Ron Paul on Sound Money Prospects for USA
"Entirely Self-Made" Crisis; I Love My Family But ...

No Greek Deal; Talks Postponed Till Monday; Who Blinks First?

Posted: 20 Nov 2012 11:00 PM PST

A marathon nannycrat session ended with no deal as the IMF played hardball insisting Greece reduce debt to 120% of GDP by 2020.

Not to worry, Jean-Claude "Lie When It's Serious" Juncker says progress was made.

CNN Money says No deal for Greece as talks drag.

European finance ministers concluded a marathon meeting Wednesday without finalizing the details of a debt-reduction package for Greece.

The absence of an agreement endangers the release of the next round of Greece's international bailout package, funding the country needs to remove the threat of bankruptcy and a messy exit from the eurozone.

Jean-Claude Juncker, the Eurogroup president, said in a statement that the discussion was "extensive" and that progress was made.

"The Eurogroup ... made progress in identifying a consistent package of credible initiatives aimed at making a further substantial contribution to the sustainability of Greek government debt," Juncker said.

Devil in Compromise

I have no doubt the discussion was "extensive". Whether or not any progress was made is certainly debatable, and we certainly cannot believe Juncker on that score, or for that matter any score.

Please consider Greek debt can only become sustainable by 2022 if all steps taken

Greek debt can fall to below 120 percent of output by 2020 only if euro zone countries accept losses on their loans to Athens, provide additional financing or force private creditors into selling Greek debt at a discount, according to a document prepared for a meeting of finance ministers on Tuesday.

The 15-page document shows that without a package of debt-reducing measures Greek debt will fall to 144 percent of GDP in 2020, 133 percent in 2022 and 111 percent of GDP in 2030, from a current level of around 170 percent.

"The package of options will not make it possible to arrive at a debt-to-GDP ratio of close to 120 percent in 2020 without taking recourse to measures that would entail capital losses or budgetary implications for euro area member states or envisage a more comprehensive DBB entailing the activation of collective action clauses," the document said.

Deferring interest payments by 10 years to 2022 on loans made through the euro zone's temporary rescue fund would cut Greek debt by 43.8 billion euros, or 16.9 percent of GDP.

If the European Central Bank (ECB) returned the profits it made on its Greek bond portfolio, Greece's debt would be fall by a further 4.6 percent in 2020, the document showed.

Buying back 10 billion euros worth of Greek bonds from private investors at 50 cents per euro would result in debt falling by 2.4 percent of GDP by 2020.

But the combined elements would still fail to reduce the overall debt-to-GDP ratio to 120 percent by 2020, the level the IMF has deemed as "sustainable". If that target cannot be reached, the IMF may withdraw from the Greek bailout programmes.

Who Blinks First?

As long as the IMF, ECB, and Germany remain firm, there could not possibly have been any progress made.

I certainly see no signs that any party is willing to budge. The ECB cannot accept losses by treaty, Merkel is highly unlikely to bend ahead of the German election, and the IMF has been adamant regarding the year 2020.

These logjams have a way of breaking at the last second but either Germany or the IMF will have to budge.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Sky City: China to Build World's Tallest Building, 220 Stories, in 90 Days

Posted: 20 Nov 2012 01:58 PM PST

Given China already has entirely empty cities, as well as the world's largest mall (and it's empty), one can only wonder what the occupation rate of its next project will be.

Nonetheless, Gizmodo reports China Will Build the Tallest Building In the World in Just 90 Days.

According to its engineers, this will be the tallest skyscraper in the world by the end of March of 2013. Its name is Sky City, and its 2,749 feet (838 meters) distributed in 220 floors will grow in just 90 days in Changsha city, by the Xiangjiang river. Ninety days!

It's not a joke. According to the construction company, the skyscraper will be built in just 90 days at the unbelievable rate of five floors per day.

Pre-Fab Magic

They will be able to achieve this impossibly fast construction rate by using a prefabricated modular technology developed by Broad Sustainable Building, a company that has built 20 tall structures in China so far, including the a 30-story hotel [constructed in 360 hours - see link for time-lapse video].

Record numbers

Unlike the Burj Khalifa, the tower will be mostly habitable. Its final height will be 2,749 feet high (838 meters). Compared that to the Burj's 2,719 feet (829 meters), which include the spire at the top resulting in a total of 163 floors.

Sky City will use an astonishing 220,000 tons of steel. The structure will be able to house 31,400 people of both "high and low income communities". The company says that the residential area will use 83-percent of the building, while the rest will be offices, schools, hospitals, shops and restaurants. People will move up and down using 104 high speed elevators.

The record figures don't stop there: in addition to the 90-day construction time—as opposed to the 210 days initially reported by the Chinese media—the company claims it will cost $1,500 per square meter as opposed to the Burj's $15,000 per square meter, all thanks to the prefab technology.

They also claim it will be able to sustain earthquakes of a 9.0 magnitude and be resistant to fire for "up to three hours," as well as be extremely energy efficient thanks to thermal insulation, four-panned windows and different air conditioning techniques that were already used in their previous constructions.

Artist's Rendition

Readers from Chicago will quickly recognize that skyline.

Chicago's Hancock Building (with two spires at the top) is 100 stories tall (1,127 feet) tall. Thus the "Sky City" rendition is not remotely to scale.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Ron Paul on Sound Money Prospects for USA

Posted: 20 Nov 2012 09:12 AM PST

Following his "Farewell to Congress" speech last week, Congressman Ron Paul talks to GoldMoney's Andy Duncan about the achievements and legacy of his recent presidential campaign – particularly in the context of monetary policy.

They discuss the recent re-publication of his book The Case for Gold and his forthcoming chairmanship of the Campaign for Liberty.

Paul also talks about the likelihood of America returning to some form of gold standard in the years ahead and the prospects for private currency issuance; what the next four years under President Obama are likely to hold; and the shale oil revolution.

Ron Paul also talks about the election and why Mitt Romney lost. His view is quite similar to mine, and it's one reason why I could never support Romney and instead voted for Libertarian candidate Gary Johnson.

Link if video does not play Ron Paul on Sound Money Prospects for USA

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Entirely Self-Made" Crisis; I Love My Family But ...

Posted: 19 Nov 2012 11:55 PM PST

As debt that cannot possibly ever be paid back spirals out of control, it is amusing (as well as saddening) to watch widely-read economists propose still more of the same policies that have failed time and time again.

Today's silliness comes from Ambrose Evans-Pritchard at the Telegraph.

Pritchard's headline title Merkel's day of reckoning as taxpayer haircut on Greece looms makes perfect sense as does his opening gambit.

We are at last nearing the awful moment when the curtain is ripped away. Greece's economy has contracted 7pc over the last year. Public debt will spiral to 190pc of GDP in 2013. Leaving aside the Gothic horror of youth unemployment at 58pc, Greece's debt trajectory is simply out of control.

I have no quibbles with that paragraph, or for that matter, many paragraphs that follow. Unfortunately, Pritchard concludes with Monetartist claptrap, as to how things ought to be.

Fiscal policy is too tight. Monetary policy is too tight. Regulatory policy is also too tight since it is forcing banks to raise capital buffers even as the slump deepens.

Professor Paul de Grauwe from the London School of Economics said the deepening crisis is "entirely self-made" and "very dangerous" as passions fly. Angela Merkel had to slip into Portugal last week almost secretly to outwit demonstrators and avoid a "national sovereignty" march. One of her diplomats was assaulted by a mob in Greece.

It would have been so much easier for Euroland, for the Project, for North-South comity, if the ECB had let rip a long time ago with quantitative easing to cushion the blow from fiscal tightening, but that is to suppose a different Europe existed.

"Entirely Self-Made" Crisis

The crisis most certainly is "Entirely Self-Made", just not in the manner de Grauwe and Pritchard state.

The sad thing is Pritchard knows full well the euro was doomed from the start. He was one of the original eurosceptics, predicting accurately the euro could not survive.

Now, in spite of all the numerous structural flaws of the euro, somehow we are to believe things would be "much easier for Euroland if the ECB had let rip a long time ago with quantitative easing".

What a crock. If QE worked and fiscal stimulus worked, Japan would not have debt-to-GDP ratio of 230%. Japan's national debt now exceeds a quadrillion yen!

A quadrillion is a number with 15 zeros. 1,000,000,000,000,000. Can that ever be paid back? How?

Ivory Tower Economists in Academic Wonderland

In the US, Fed chairman Ben Bernanke is now in round three of QE. This round is undefined. Has QE created any jobs? If so where?

In addition to QE the US has been running budget deficits exceeding $1 trillion for four straight years. What the heck is that other than Keynesian stimulus?

It has failed. But economists like Paul Krugman want more of it (please see Mish on Capital Account: "Time for Krugman to Leave Ivory Tower for Real World").

Krugman will claim deficit spending prevented disaster. It did no such thing. All it did is pile up the debt that cannot possibly be paid back.

The average 7th grader likely understands that he cannot spend more money than he has for years on end. The average economist does not.

That is one of the reasons we are in this mess. And as I have said repeatedly, hyperinflationists fail to understand this is not just a US problem.

Central Bankers' Potemkin Village

If there was one report this entire year that you should read in entirety, Central Bankers' Potemkin Village by Kyle Bass at Hayman Capital is the one.

The article is lengthy (at 31 pages) and is protected from text copy, but requires no password to read. It will be well worth your time to read the entire thing.

The following charts are all from the article.

Total Assets of Global Central Banks

Click on any chart for sharper image

Somehow Pritchard believes things would be different if only the ECB engaged in more QE. Really? Seems to me the increase in ECB assets has hardly stabilized a thing.

To the extent that it did, it certainly fixed no structural problems.

Kyle Bass comments "QE just doesn't stimulate private credit demand and consumption in an economy where total credit market debt to GDP already exceeds 300%. The UK is the poster child for abject failure of QE. The Bank of England has purchased over 27% of gross debt (vs. 12% in the US). UK bond yields are now negative in real terms by at least -1%. Unlimited QE and the zero lower bound (ZLB) are likely to bankrupt pension funds whose expected returns happen to be a good 600 basis points or more higher than the 10-year risk-free rate."

Indeed! I wrote about this long ago in Hello Ben Bernanke, Meet "Stephanie".

Please give that a read in case you missed it.

Monetary Printing ECB, Fed, Bank of Japan

Did that work? If you think it did, then consider the next chart.

US GDP vs. Incremental Debt

For every dollar of incremental debt, the US gets 8 cents in additional GDP, down from $4.61 in 1952. Is this a good bargain?

Krugman seems to think so.

Total Global Credit Market Debt in $Billions

There is $225 trillion in global credit market debt. Is that going to be paid back? I suggest not.

Bass writes ... "How many Europeans understand how large host-country banking systems are in relation to government tax revenues? How many Japanese have questioned how (if ever), a quadrillion yen of debt will ever be repaid when it represents over 20X central government revenues? (Answer: it can't be). Very few participants are aware of the enormity and severity of the problems the developed world faces. ... The only path left is a full restructuring (default) of most sovereign debts of developed nations."

I Love My Family But ...

Many economists complain that Germany is to blame for refusing to go along with eurobonds (joint euro based debt).

Bass asks "How many of your extended family would you assume all past and future debts with jointly and severally? ... As much as I love my extended family, I would never agree to be jointly and severally liable with any of them."

Would you?

Yet somehow, we are to believe the solution for the eurozone mess is for Germans to be jointly liable for the debt of Greeks, Spanish, Portuguese, and Irish.

Really? Without starting a war?

Bass writes "Sadly, looking back through economic history, all too often war is the manifestation of simple economic entropy played to its logical conclusion. We believe that war is an inevitable consequence of the current global economic situation."

If that seems far-fetched, then think of the hotbed in the Mideast with Iran. Think of the rise of the neo-Nazis in Greece. Think of the conflict between Japan and China over uninhabited islands in the East China Sea.

Those unaware of the seriousness of the dispute between China and Japan should read Taiwan Claims Islands Too; What's the Dispute Really About?

I thank Kyle Bass for this report and reiterate if there was one report this entire year that you should read in entirety, Central Bankers' Potemkin Village by Kyle Bass at Hayman Capital is the one.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
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miercuri, 21 noiembrie 2012

The Top 5 Questions to Ask Yourself Prior to Launching Your First Blogger Community

The Top 5 Questions to Ask Yourself Prior to Launching Your First Blogger Community

1. Are you ready?

2. Do you have a plan?

3. Have you built the brief?

4. Have you come to mutual consent through contract?

5. Have you set your bloggers up to succeed?

If you have signed off on all of the above questions…

How to estimate Facebook advertising budget

How to estimate Facebook advertising budget

Seth's Blog : Fall recommended reading list

Fall recommended reading list

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marți, 20 noiembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

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marți, 20 noiembrie 2012

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