Central Perk

joi, 29 noiembrie 2012

Ask Your Questions On Extending Middle-Class Tax Cuts

Your Daily Snapshot for
Thursday, November 29, 2012

Ask Your Questions On Extending Middle-Class Tax Cuts

Yesterday, President Obama asked you to share what the middle-class tax cuts mean for you and your family - and tens of thousands of you responded. At 1:00 p.m. EST today, Deputy Director of the National Economic Council Brian Deese is taking to Twitter to answer your questions about a balanced approach to reducing the deficit and protecting the middle class.

Here are the details:

Ask your questions now and during the live event on Twitter with the hashtag #WHChat
Follow the Q&A live through the @WHLive Twitter account
If you miss the live session, the full session will be posted on WhiteHouse.gov and Storify.com/WhiteHouse

Find out more about this special session of Office Hours on the middle-class tax cuts.

Photo of the Day

First Lady Michelle Obama talks with members of the press in the State Dining Room of the White House during the 2012 holiday decorations press preview, Nov. 28, 2012. Mrs. Obama welcomed military families to the White House to view the decorations and joined military children in the State Dining Room to work on holiday crafts and treats. (Official White House Photo by Lawrence Jackson)

Should We Chase The Algorithm?

Posted: 28 Nov 2012 06:52 PM PST

Posted by Dr. Pete

You might not be surprised to hear that I’ve been a little obsessed with the Google algorithm this past year. While many SEOs and business owners share that obsession, others have asked questions like “Why don’t you stop chasing Google and focus on 'real' marketing?” It’s an honest question, and I think it’s a fair one. I’d like to try to answer it and to explain why I think understanding the algorithm is an essential part of a well-rounded online marketing campaign going forward into 2013.

Panda Pac Man

Businesses Are Still at Risk

In the past two years, the Panda and Penguin updates have hit hard. For some people, they hit in a very real and personal way. I’ve seen small business owners lose everything, including their homes. I’m not here to judge Google – I understand their reasoning and even support some of it. Maybe more than that, I try to be realistic about Google’s goals and motivations. If I have to pick a side, though, I’ve been in the trenches with small businesses too long to abandon them now. If information can save you from losing everything, then I want you to have that information.

Offense + Defense = Victory

There’s been a big push toward content marketing and the broader world of #RCS (“Real Company Sh*t”, as coined by Wil Reynolds). I am 100% in favor of this movement. I believe in content marketing and in building a real brand and a product people want. There’s an implication, though, that we have to pick one or the other – either we’re content marketers or we’re algo chasers. To me, that’s like saying your team can only play offense or defense. You can have the best rushing and passing stats in the league, but you’re going to get crushed if you leave the field empty when the other team has the ball.

I want you to diversify beyond Google – if you’ve got 60%+ of your customers coming from organic search on Google, you’re in real danger of losing everything. You need to think more broadly about marketing, but you also need to protect yourself. If #RCS is your offense, then understanding the algorithm is your defense. You can have both.

People Clearly Want to Know

When we started building the algorithm history, it was honestly out of curiosity more than anything. I knew people would be interested, but I was amazed at the response. Here’s a traffic graph (unique pageviews) for 2012 through the end of October:

Algo History Traffic (1/1/2012 - 10/31/2012)

Keep in mind that the page launched in 2011. That first spike is Penguin, but the interest and traffic not only haven’t let up – they’ve increased. The page passed the 250K unique pageview mark in October, and is still growing strong. We’re chasing the algorithm because every piece of data I have says that you want us to.

The Big Picture Matters

You know how we traditionally measure algorithm updates? We use a metric called Aggregate Panic. If enough webmasters wake up, see their rankings change, and panic, we know there’s probably been an update. Sadly, that’s not really a joke.

I’m learning that probably the toughest question in search is “What’s normal?” – if we can’t understand what a normal day looks like, we’ll never be able to pinpoint an unusual one. On an individual level, I think this question translates to “Was it me, or was it Google?” Search is a highly dynamic environment, and separating out the algorithm from targeted actions (e.g. penalties and filters), competitive changes, our own SEO efforts, and seasonality is incredibly tough. The more we know about the algorithm, the better we understand how our own data fits into the big picture.

Speculation Runs Rampant

There’s a wrong way to chase the algorithm, and we see it every day. The wrong way is to notice something changed, panic, and start building a bomb shelter while Tweeting about how Google is going to harvest your kidneys while you sleep if you leave a Google+ Hangout open. In all seriousness, we all have our pet theories, but it’s rare that they get put to the test. I’d like to see us evolve from chasing the algorithm to stalking it, and that means being methodical, collecting data, and asking questions that can be answered with that data.

Transparent is The New Black

Transparency is fashionable, and Google has put out a lot more public information in 2012, from Tweets about query impact to their monthly search quality highlights. While I think these public statements take Google real time and effort, and I don’t think they’re deliberately trying to mislead us, I do think we have to be careful how eagerly we accept these “gifts”. The monthly highlights are packed full of information, but it comes in the form of statements like:

#84394. [project “Page Quality”] This launch helped you find more high-quality content from trusted sources.

We know this update is important, because it has an ID number and a code name. Unfortunately, you could basically translate it to this:

#90210 [project “Turkey Giblets”] We made some stuff better.

…and you’d have learned just as much as you did from the original. I’m not bashing Google’s intent, because I honestly don’t know what their intent is. I’m worried, though. I’m worried that we’re so happy to have this information that we’re going to stop digging for our own data. If you want to listen to the wizard, that’s your business. I’d rather poke the curtain.

Google Controls Far Too Much

This one’s a little out there, and it goes well beyond SEO. Depending on who you ask, Google may control as much as 80% of the search market. Search isn’t just about finding a new pizza place or even customers finding your business. Search is our portal to the largest archive of human knowledge we’ve ever had – the internet. No social site accesses a full crawl of the web. Only the major search engines do it, and Google may be getting 4 out of every 5 of those searches. Google is shaping how we work, how we play, and even how we think, and they’re making more than $40,000,000,000 a year doing it. I’m not a conspiracy theorist, but I think we need to fight for all the transparency we can get. Too much is at stake if we let the algorithm become a black box.

Let’s Be Careful Out There

There’s a fine line between healthy skepticism and paranoia. I hope that the lessons that a handful of us learn by chasing the algorithm let you sleep a little better at night and do the jobs you need to do. If you see me at a conference and say “I stopped chasing the algorithm and grew my business!”, I’ll say “Congratulations!” and buy you a beer. Until then, keep your eyes open and we’ll keep doing what we do.

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Another November Index is Live!

Posted: 28 Nov 2012 05:56 AM PST

Posted by carinoverturf

This month we're bringing you a special holiday treat: two Mozscape indices in the month of November! We just released the latest index, and you can now find fresh Mozscape data in Open Site Explorer, the Mozbar, PRO campaigns, and the Mozscape API.

This index is similar in size to the previous Mozscape index with about 76 billion URLs. The heavy computing AWS machines we moved to in October, detailed in Anthony's blog post, has saved significant amounts of time in our processing schedule thanks to almost no machine failures.

This time saved means more time for the Mozscape engineers to work on exciting projects, like tuning the final configurations in our own private cloud! We've been running a similar sized index in our private cloud located in Virginia alongside the index releasing today. It's running a bit slower as we continue to tune and dial the last pieces, but we hope to be running a hybrid processing solution early next year. Running an index in the cloud and an index in our own private cloud means fresher index data for you and our applications!

Here are the metrics for this latest index:

76,668,945,929 (76 billion) URLs
664,205,988 (664 million) Subdomains
136,202,352 (136 million) Root Domains
892,544,725,878 (892 billion) Links
Followed vs. Nofollowed
- 2.31% of all links found were nofollowed
- 56.61% of nofollowed links are internal
- 43.39% are external
Rel Canonical - 13.91% of all pages now employ a rel=canonical tag
The average page has 73 links on it
- 62.28 internal links on average
- 10.54 external links on average

And the following correlations with Google's US search results:

Page Authority - 0.35
Domain Authority - 0.19
MozRank - 0.24
Linking Root Domains - 0.30
Total Links - 0.25
External Links - 0.29

This histogram shows the crawl date and freshness of results in this index:

Crawl histogram for the late November Mozscape index

As you can see from the histogram, this index has some pretty fresh data mostly coming from October and the first week of November. The freshest data in this index will be from 11/10 when we started processing, and a good percentage was crawled late October and early November.

As always, we'd love to hear your feedback in the comments - the Big Data team will be reading and responding! And remember, if you're ever curious about when Mozscape is updating, you can check the calendar here. We also maintain a list of previous index updates with metrics here.

Happy data pulling, Mozzers!

Seth's Blog : Anticipation vs. anxiety

Anticipation vs. anxiety

If we define anxiety as experiencing failure in advance, we can also understand its antonym, anticipation.

When you work with anticipation, you will highlight the highs. You'll double down on the things that will delight and push yourself even harder to be bold and to create your version of art. If this is going to work, might as well build something that's going to be truly worth building.

If you work with anxiety, on the other hand, you'll be covering the possible lost bets, you'll be insuring against disaster and most of all, building deniability into everything you do. When you work under the cloud of anxiety, the best strategy is to play it safe, because if (when!) it fails, you'll be blameless.

Not only is it more fun to work with anticipation, it's often a self-fulfilling point of view.

• Email to a friend •

miercuri, 28 noiembrie 2012

Mish's Global Economic Trend Analysis

Indebted Dragon: The Ponzi Scheme Driving China's Construction Economy

Posted: 28 Nov 2012 04:16 PM PST

In Indebted Dragon, Professor Lynette Ong from the University of Toronto discusses how the Chinese economy relies on land as collateral to borrow money while paying the interest on the loans by selling and leasing the land.

Ong notes this makes China susceptible to two problems: a real estate bubble and political instability stemming from displaced farmers who land has been taken from them.

The subtitle to Ong's article is "The Risky Strategy Behind China's Construction Economy".

I suggest "Ponzi Scheme" is a more apt description than "Risky Strategy". Let's take a closer look.

For four decades, the Chinese economy has grown by between seven and ten percent each year. It is the envy of the world, despite its relatively sluggish recent performance. Visitors to Beijing, Shanghai, and other major Chinese cities are quickly awed by impressive skyscrapers, glittering shopping malls, new highways, and high-speed rail lines, all of which leave the impression that China is a developed economy -- or at least well on its way to becoming one. Even in some smaller cities in inland provinces, government buildings make those in Washington and Brussels appear meager. In an area of Anhui Province that is officially designated an "impoverished county," the government office block looks exactly like the White House, only newer and whiter.

Underwriting the impressive facade, however, is an incredibly risky strategy. Governments borrow money using land as collateral and repay the interest on their loans using funds they earn from selling or leasing the same land. All this means that the Chinese economy depends on a buoyant real estate market to keep grinding. If housing and land prices fall dramatically, a fiscal or banking crisis would likely soon follow. Meanwhile, local officials' hunger for land has displaced millions of farmers, leading to 120,000 land-related protests each year.

RISKY BUSINESS

The recklessness can be traced to two things: First, local Chinese officials are evaluated for promotions and other rewards based on how well the economy they manage performs. Construction and real estate activities are among the most straightforward ways to stimulate growth. White-elephant construction projects thus offer eager officials a perfect opportunity to impress their political superiors, even if massive developments do not necessarily make any economic sense. Take, for example, the city of Ordos in Inner Mongolia: Its elaborate urban infrastructure and its sea of new flats and office blocks are nearly all unoccupied, making it China's largest ghost city.

SHOW XI THE MONEY

On the surface, banks' balance sheets have remained healthy despite these debts, since banks tend to roll over or "ever green" loans by issuing new loans to help borrowers "repay" old ones. In addition, local governments have been able to make their interest payments using their land as collateral.

Classic Ponzi Behavior

Perpetually rolling over an ever-growing number of loans to pay off prior loans is classic Ponzi behavior.

SOEs and Overstated GDP

Ong concludes with ...

"Given slower growth rates and falling real estate prices this year, the frequency of land expropriation is slowing down. But the truth remains that much of urbanization in China is a state-driven phenomenon, using resources drawn from the financial sector.

Although the central government recognizes the seriousness of the problem, it seems to lack any real resolve to tackle the issue head on. Muddling through seems to be so much easier. So until a major slowdown in the economy happens, the Chinese real estate market will continue on its current course."

The first two sentences are undoubtedly true. State-Owned-Enterprises (SOEs) are a huge drain on the real Chinese economy while making GDP look far better than it really is.

For more on the overstatement of Chinese GDP, please see How Sustainable are China's Copper, Cotton, Steel Imports? What About Chinese Purchases of Canadian and Australian Real Estate? Fresh Thinking on Balance of Payments

Ghost Malls, Ghost Cities, Infrastructure Malinvestment

As noted by Ong, and on numerous occasions by me, China is home to numerous vacant cities. For a discussion, please see World's Biggest Property Bubble: China's Ghost Cities Revisited; 64 Million Vacant Properties

The Video of Ghost Cities is a must see eye-opener for those overly bullish on China.

China is also home to the world's largest shopping mall and it sits empty. For a discussion and video, please see How Will China Handle The Yuan?

A week ago I reported Sky City: China to Build World's Tallest Building, 220 Stories, in 90 Days

Unlike Ong, I see no realistic way China can "muddle through" for much longer given the bubble is busting in China right now, but that is my only objection to a very well written article.

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

Student-Loan Delinquencies Surpass Credit Cards, 37.5% of Graduates Work in Jobs Requiring No Degree; Who is to Blame? What About Solutions?

Posted: 28 Nov 2012 11:25 AM PST

As costs of college soars (with thanks to absurd union salaries and benefits, as well as absurd administrator salaries and benefits), those attending college have increasing trouble paying back loans.

The fully expected consequence is Student-Loan Delinquencies Now Surpass Credit Cards.

The proportion of U.S. student loan balances that are in delinquency — that is, unpaid for 90 days or more — surpassed that of credit-card balances in the third quarter for the first time, according to the Federal Reserve Bank of New York. [no link provided]

Of the $956 billion in student-loan debt outstanding as of September, 11 percent was delinquent — up from less than 9 percent in the second quarter, and higher than the 10.5 percent of credit-card debt, which was delinquent in the third quarter. By comparison, delinquency rates on mortgages, home-equity lines of credit and auto loans stood at 5.9 percent, 4.9 percent, and 4.3 percent respectively as of September.

Since the NY Fed's data began in 2003, the share of student debt which is delinquent has nearly doubled, from a starting level of 6.13 percent, while credit-card delinquency has steadily drifted lower since peaking at 13.74 percent in mid-2010 in the wake of the financial crisis.

Moreover, the actual rate of student loan delinquency is far higher than the official tally suggests. According to the New York Fed [no link provided], "these delinquency rates for student loans are likely to understate actual delinquency rates because almost half of these loans are currently in deferment, in grace periods or in forbearance and therefore temporarily not in the repayment cycle."

In other words, the real delinquency rate for loans in the current repayment cycle is "roughly twice as high," per the Fed — which would put it north of 20 percent.

37.5% of Graduates Work in Jobs Requiring No Degree

In its article Student Loan Debt Hits Another New Record: Study, Senior CNBC Correspondent Scott Cohn cites a study noting these facts.

The average college student who graduated in 2011 had $26,600 in student loans
Two-thirds of last year's college graduates had student loan debt
37.8 percent of recent graduates are working in jobs that do not require a college degree
State budget cuts, which have led to large tuition increases, fewer grants, and an increasing need for college students and their families to borrow money to finance their education
96 percent of graduates from four-year, for-profit colleges took out student loans, borrowing 45 percent more than graduates of other types of colleges.

Cohn mentioned the word "study" fourteen times without once providing a link to the study, or even mentioning the name of the study. I suspect this is some kind of record, jut not one anyone should be proud of.

Such semi-plagiarism is quite frankly inexcusable.

Who is to Blame?

I receive emails from readers all the time blaming the problem on point number four above, state budget cuts.

Nonsense.

Taxpayers are overburdened too much already. States have cut back on the percentage of money to education out of sheer necessity as education costs have risen far faster than anything else including health care and energy.

Here are some charts and comments from my post What Role Does Government Play in Price Inflation?

Inflation Comparison - Select Components Since 1978

Inflation Comparison - Current CPI Components Since 2000

The above charts are from Doug Short at Advisor Perspectives. Doug creates excellent charts every month on various CPI components. Rather than reinvent the wheel, I asked Doug for a set of custom charts.

Specifically, I had asked Doug to go back to 1971 for both charts.

Unfortunately, data for components in the first chart only goes back to 1978, and in the second chart not even that far.

The reason I asked for a starting year of 1971 is that's when I started college.

Tuition at the University of Illinois in Fall of 1971 was $250 a semester for engineers (My degree is in civil engineering). Current University of Illinois Tuition is $8,278 per semester for Illinois residents, $15,349 for non-residents.

Note that tuition difference: $250 in 1971 vs. $8,278 today.

Note Areas of Highest and Lowest Price Inflation

The least government interference is in apparel and recreation. The most government interference in the free market is education and health care.

Education is rife with "no child left behind" madness, free tuition for veterans, and for-profit school scams that flourish only because student loans cannot be discharged in bankruptcy.

Chasing the American Dream, Gone Bust

I have talked about this many times before. One key post is Trading Caps and Gowns for Mops; Why Go to College If There Are No Jobs? Chasing the American Dream

Some People Do Not Belong in College

Pelletier perpetuates the myth everyone belongs in college. Many don't. Arguably at least half don't. In Portland Oregon, ACT scores show less than half of test-takers are ready for college math

Useless Degrees

Pray tell what good is a degree in English, history, PE, or political science other than teaching English, history, PE, or political science? And how many of those teaching jobs are even available?

Yet colleges churn out thousands of graduates, year after year, with perfectly useless degrees.
Debt Slaves

President Obama promotes education as the answer to the unemployment problem. Other presidents have done the same thing. However, throwing money at the problem has done nothing but raise the cost of education for everyone, leaving many graduates debt-slaves for life, with totally useless degrees.

Whenever government sticks its neck into solutions, costs escalate. We saw it in housing, with hundreds of affordable home programs artificially increasing demand, and with Bush's "Ownership Society" artificially increasing demand, etc., etc. We see the same thing now in health care.

Expect such problem to grow until they blow sky high, which appears to be right at hand.

Mish's Six Point Education Proposal?

Increase competition by certifying more online schools
Make student debt dischargeable in bankruptcy
Abolish the student loan program
Abolish Pell Grants
Get rid of unions driving up costs
End all support for for-profit colleges

I assure you that if those actions were taken cost of college education would crash. But no one really wants that, any more than they want affordable housing.

Politicians gain far too much in campaign contributions from unions, from for-profit schools, and from banks wanting to make kids debt-slaves, to really address the problem.

Legislators would rather pretend they want to do something rather than actually doing something because it suits their purpose (getting reelected). Unfortunately, millions of students will pay the price as debt-slaves for life.

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

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joi, 29 noiembrie 2012