miercuri, 11 februarie 2015

Damn Cool Pics

Damn Cool Pics


Why Should Women Travel Alone? [Infographic]

Posted: 11 Feb 2015 12:16 PM PST

Here is an amazing infographic by VisitorsCoverage that showcases why women should travel alone and what they gain by doing so. According to the infographic, traveling alone can give woman more than one reason to be happy and it helps them to discover a new self our of their own self.

Click on Image to Enlarge.

via visitorscoverage

These Puppies Look A Lot Like Teddy Bears

Posted: 11 Feb 2015 11:25 AM PST

Are they puppies or are they teddy bears? You decide.






















These Posts On The Internet Are An Advanced Kind Of Stupid

Posted: 11 Feb 2015 11:08 AM PST









Death to Wishy-Washy Reports: Simple Edits to Put the Authority Back in Your Writing - Moz Blog

Death to Wishy-Washy Reports: Simple Edits to Put the Authority Back in Your Writing - Moz Blog
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Death to Wishy-Washy Reports: Simple Edits to Put the Authority Back in Your Writing

Posted on: Wednesday 11 February 2015 — 01:16

Posted by Isla_McKetta

True life confession: Although I've worked with some of the smartest SEOs, architects, and CPAs in the business, you couldn't always tell from their writing. Which is a problem. Because while some of them are client-facing (so the client gets to know their smarts firsthand—either in person or on the phone), some are only known by the lackluster reports they turn in.

This is a post about how anyone (whether you're an expert in SEO, PPC, social media, or even... content marketing) can write a clearer, more persuasive report. And the lessons contained herein can help you with any form of corporate communication, whether you're writing for a client or your boss.

Get ready to sound smarter.

Be assertive

Being assertive doesn't mean you should stand on your desk and shout your opinions like you're auditioning to be the next Hulk. Instead, have confidence in the data and recommendations you're reporting and convey that confidence in your writing. Because if you're not confident, you might not be ready to write the report. So go double-check your research and then use the following tactics to sound like the authority you are:

Ditch "I think"

I think there are a lot of things you could possibly say to show a client what they might or might not do depending on how they interpret your recommendations.

Notice how that sentence had no spine? That's because it's filled with empty phrases—words that do nothing for the sentence but convey how unwilling its author is to make a point.

Phrases like "I think," "I feel," and "might" are couching words—things you say when you're trying to leave yourself an out, and they make you sound passive and unsure. Go through your report and check for couching words. Ask yourself if you need them (in case of actual uncertainty like "Google might…") or if you can cut them out and strengthen your points.

Dump the passive voice

Mistakes are often made as we try to get around to a point with our writing.

One of those mistakes is in failing to use the active voice. Every sentence has an actor (subject) and an action (verb). While it's nice to vary your sentence structure sometimes, stick to "actor commits action" when you have something important to say (especially when you have bad news to break).

Be careful with dependent clauses

If you want to sound confident and decisive, lead with an independent clause instead of a dependent one (like I did here). 

Time for a (mercifully quick) jump back to elementary school grammar. Independent clauses are the ones that can stand on their own as a complete sentence. They have a subject, verb, and usually an object. Dependent clauses don't.

Dependent clauses are often added to an independent clause to increase the level of information in a sentence. Let's flip that last sentence so you can watch the dependent clause move from the end to the front:

To increase the level of information in a sentence, dependent clauses are often added to an independent clause.

Dependent clauses are very useful, but some writers fall into a pattern of starting most of their sentences with them. That delay of the independent clause can make you sound like you're hesitating to get to the point. It can also make you seem passive or like there's something you're trying to hide. That's not how you want to come off in a report.

Choose a point of view (and stick to it)

Some companies prefer to write from a formal (and somewhat) distant third person perspective where "I" is never used; I prefer the more conversational first person. 

You can write your report from any point of view you want, but be careful with those pronouns.

The most common mistake I see is for the writer to get indecisive with the pronouns and start throwing around the word "we" as in "we need to fix your title tags." Which could mean that the consultant is taking responsibility for the title tags, or it could be a general suggestion that the title tags need fixing.

Try instead, "your title tags need to be updated; we plan to start work on those during the second month of our engagement." Still uses the word "we," but now it's more obvious who's doing what (and will save you some embarrassing followup conversations).

Write for your audience

Industries with a high degree of fiduciary responsibility are often more accustomed to the use of a formal tone. Meanwhile, writers in other industries, like fashion, automotive, and anything related to the Internet, can get away with a much more casual voice. 

You may have noticed by now that I start a lot of sentences with conjunctions like "and" and "but." I also use contractions. Both are part of a conversational tone that's "Mozzy," but if I was writing for a different audience, I would button the top button on my style (and maybe even add a tie).

You know your clients and their style of communication. It's reflected in everything from their RFP to the latest call. Try to mirror their tone (unless you think they came to you for a big shakeup) and your audience will feel like you understand their culture and needs. That means your work is more likely to be accepted.

Explain things

Remember that you were hired because of your unique expertise. That means that you know things the person reading the report doesn't.

When you're introducing a concept your client or boss likely hasn't encountered (or might be a little rusty on), give a short refresher to keep them engaged.

Don't over-explain things

No one likes to feel like an idiot. Going step by step through all the things anyone could ever want to know about a concept (whether foreign or not) has the potential to not only annoy your audience, but also distract from your main point.

If you come across a concept in writing your report that requires extensive education of your reader, either create an addendum where they can read as much as they need to, or schedule a phone call, training, or other way to get them all the info they need.

Use numbers (wisely)

Ninety-nine percent of SEOs have more data than they can ever reasonably convey to the client.

That's because clients (at least sane ones) don't want to know what every single keyword ranked on every day last month. They want to know if their overall rankings are up or down, what that means for their business, and how to push rankings upward in general in the future.

Numbers are very useful (and can be very powerful) if you're using graphs and tables that tell a story, but without your interpretation, they're all kind of meaningless.

So although you have access to all the numbers in the world, the real magic of your report is in getting inside your reader's head and figuring out what they need to understand about the numbers. Then use the analysis portion of your report to translate that data into answers.

Write fewer words

Concision is an art. Redundancy is annoying. Write as few words as you can to convey your point.

Don't let big words interfere with meaning

An immense vocabulary can obfuscate significance.

This is true of using big words to sound smart and also if you're spouting jargon at people who don't understand it. You might notice from reading this post that I use very little jargon. That's because the vocab words I learned in creative writing won't mean anything to most of you and I can usually find a clearer way to express marketing jargon.

So if your clients (and all the people who will read the report) regularly use words like "earned media," "freemium," and "EPV," you can use them too. But if you have any doubt, try to find a way to use a more accessible word or add some context so everyone can follow you.

Think about general scanability

Your clients are busy. You want them to get the most out of a report they might only ever scan. 

All the things you've learned about writing for the Internet apply to writing reports:

  • Short sentences (that aren't choppy) are easier to read.
  • Keeping each paragraph to one topic with a topic sentence makes it easier to scan.
  • Using bullet points (when appropriate) will help your reader digest all that information you've created for them.

Help your reader out by making all your great information intelligible.

Employ an executive summary

Keep the person who signs your checks in the loop with a few words. 

To write an effective executive summary, give the highlights:

  • Why was the work undertaken?
  • What problems were found?
  • Next steps

The summary should run between a paragraph and a page (depending on how long your report is). That means you want to save all that delicious analysis you've slaved over for the report itself.

Use templates at your own risk

I know, a lot of the things you're saying to one client are 90% the same as what you're saying to the next client, and creating a template just makes your job more efficient. But if you aren't carefully reading the resulting document, you might be making a mistake (like using the wrong client name or giving them instructions for Omniture when they use GA) that takes much longer to clean up than writing an original report would have.

Trust me, about the third time you're reading over the same words in the same order (even if for different clients), you are too far inside the template to see the mistakes. But your client is reading this report for the first time ever and they won't miss a thing :/. Speaking of which...

Proofreading isn't optional

You aren't qualified to proofread you're [sic] own work. 

Not saying anything about your reading or grammar skills, but I'm 99% certain that you've spent so long staring at that report that you are beyond spotting your own typos. Find a second reader. If you're in absolute dire straits and can't find a buddy, read the report aloud to yourself.

Feel smarter already? I hope so. Because you've worked too hard to pull all that information together just to have it fall flat because of a bad report. Tell me about your report writing disasters (and things you'd like help with) in the comments.


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Announcing the New & Improved Link Intersect Tool

Posted on: Tuesday 10 February 2015 — 09:01

Posted by randfish

Y'all remember how last October, we launched a new section in Open Site Explorer called "Link Opportunities?" While I was proud of that work, there was one section that really disappointed me at the time (and I said as much in my comments on the post).

Well, today, that disappointment is over, because we're stepping up the Link Intersect tool inside OSE big time:


Literally thousands of sweet, sweet link opportunities are now yours at the click of a button

In the initial launch, Link Intersect used Freshscape (which powers Fresh Web Explorer). Freshscape is great for certain kinds of data - links and mentions that come from newly published pages that are in news sources, blogs, and feeds. But it's not great for non-news/blogs/feed sources because it's intentionally avoiding those!

For example, in the screenshot above, I wanted to see all the pages that link to SeriousEats.com and SplendidTable.org but don't link to SmittenKitchen.com.

That's 671 more, juicy link opportunities thanks to the hard work of the Moz Big Data and Research Tools teams.

How does the new Link Intersect work?

The tool looks at the top 250,000 links our index has pointing to each of the intersecting targets you enter, and the top 1 mllion links in our index pointing to the excluded URL.

Link Intersect then runs a differential comparison to determine which of the 250K links to each of the intersecting targets are from the same URL or root domain, and removes any of those links that point to the top million links to the excluded URL/root/sub domain.

This means it's possible for sites and pages with massive quantities of links that we won't show every intersecting link we know about, but since the sorting is in Page Authority order, you'll get the highest quality/most important ones at the top.

You can use Link Intersect to see three unique views on the data:

  • Pages that link to subdomains (particularly useful if you're interested in shared links to sites on hosted subdomains like blogspot, wordpress, etc or to a specific subdomain section of a competitor's site)
  • Pages that link to root domains (my personal favorite, as I find the results the most comprehensive)
  • Root domains that link to the root domains (great if you're trying to get a broad sense of domain-level outreach/marketing targets)

Note that it's possible the root domains will actually expose more links that pages because the domain-level link graph is easier and faster to sort through, so the 250K limit is less of a barrier.

Like most of the reports in Open Site Explorer, Link Intersect comes with a handy CSV Export option:

When it finishes (my most recent one took just under 3 minutes to run and email me), you'll get a nice email like this one:

Please ignore the grammatical errors. I'm sure our team will fix those up soon :-)

Why are these such good link/outreach/marketing targets?

Generally speaking, this type of data is invaluable for link outreach because these sites and pages are ones that clearly care about the shared topics or content of the intersecting targets. If you enter two of your primary competitors, you'll often get news media, blog posts, reference resources, events, trade publications, and more that produce content in your topical niche.

They're also good targets because they actually link out! This means you can avoid sifting through sites whose policies or practices mean they're unlikely to ever link to you - if they've linked to those other two chaps, why not you, too?!

Basically, you can check the trifecta of link opportunity goodness boxes (which I've helpfully illustrated above, because that's just the kind of SEO dork I am).

Link Intersect is limited only by your own creativity - so long as you can keep finding sites and pages on the web whose links might also be a match for your own site, we can keep digging through trillions of links, finding the intersects, and giving them back to you.

3 examples of Link Intersect in action

Let's look at some ways we might put this to use in the real world:

#1: I'm trying to figure out who links to my two big competitors in the world of book reviews

First off, remember that Link Intersect works on a root domain or subdomain level, so we wouldn't want to use something like the NYTimes' review of books, because we'd be finding all the intersections to NYTimes.com. Instead, we want to pick more topically-focused domains, like these two:

You'll also note that I've used a fake website as my excluded URL - this is a great trick for when you're simply interested in any sites/pages that link to two domains and don't need to remove a particular target.

#2: I've got a locally-focused website doing plumbing and need a few link sources to help boost my potential to rank in local and organic SERPs

In this instance, I'll certainly look at pages linking to combinations of the top ranking sites in the local results, e.g. the 15 results for this query:

This is a solid starting point, especially considering how few links local sites often need to perform well. But we can get creative by branching outside of plumbing and exploring related fields like construction:

Focusing on better-linked-to industries and websites will give more results, so we want to try to broaden rather than narrow our categories and look for the most-linked-to sites in given verticals for comparisons.

#3: I'm planning some new content around weather patterns for my air conditioning website and want to know what news and blog sites cover extreme weather content

First, I'm going to start by browsing some search results for content in this field that's received some serious link activity. By turning on my Mozbar's SERPs overlay, I can see the sites and pages that have generated loads of links:

Now I can run a few combinations of these through the Link Intersect Tool:

While those domain names make me fear for humanity's intelligence and future survival, they also expose a great link opportunity tactic I hadn't previously considered - climate science deniers and the more politically charged universe of climate science overall.


I hope you enjoy the new Link Intersect tool as much as I have been - I think it's one of the best things we've put in Open Site Explorer in the last few months, though what we're releasing in March might beat even that, so stay tuned!

And, as always, please do give us feedback and feel free to ask questions in the comments below or through the Moz Community Q+A.


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Seth's Blog : The truth about sunk costs

The truth about sunk costs

It's one of the most profound and difficult lessons every MBA is taught: Ignore sunk costs. Money and effort you spent yesterday should have nothing to do with decisions you make tomorrow, because each decision is a new one.

Simple example: You've paid a $10,000 deposit on a machine that makes widgets at a cost of a dollar each. And you've waited a year to get off the waiting list. Just before it's delivered, a new machine comes on the market, one that's able to make widgets for just a nickel each. The new machine will pay for itself in just a few weeks... but if you switch to the new machine, you lose every penny of the deposit you put down. What should you do?

It's pretty clear that defending the money you already spent is going to cost you a fortune. Ignore the deposit, make a new decision.

Which makes perfect sense until it gets personal. And the work we do, the art we make, it's personal.

You produce a movie. The final scene is your favorite, the hardest to write, the one that you sweated to create and film. But in all the screenings you've done, the audience hates this scene, and when you show the movie without the scene in place, the buzz is fabulous.

Now, you're not just walking away from a deposit or some training--you're walking away from your best work, from your dreams, from you.

Part of what it means to be a creative artist is to dive willingly into work that might not work. And the other part, the part that's just as important, is to openly admit when you've gone the wrong direction, and eagerly walk away, even (especially) when it's personal.

Yes, we have to have faith in our ability. Faith lets us do our best work. But successful artists sally forth knowing that abandoning our darlings is part of the deal.

       

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marți, 10 februarie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


War in Ukraine - Latest Maps - Cauldron Closed

Posted: 10 Feb 2015 12:34 PM PST

In my search for the latest military maps in Ukraine I came across this LiveUAMap purportedly from February 10.



Compare the above map with the following map posted by Colonel Cassad today.



The map above, just shows the cauldron (surrounded forces not all surrounding separatist held territory). Mentally line up the intersection of M103 and M104 with the same intersection in the first map.

Cauldron Closed

Yesterday Jacob Dreizin pinged me with this comment ...
Hello Mish

Former rebel leader Strelkov's social media page is quoting the DNR Ministry of Defense and (separately) Strelkov himself as stating that the Debaltsevo-Artemovsk road has been cut off.  In other words, the lid on the cauldron has finally shut.

This is generally a credible site, if you ignore the occasional crazy rumors being passed around and just focus on the overall direction of the fighting.

Other posts on this site suggest that Novorossia forces are now digging in along the road, to prevent reinforcements or supplies coming into the cauldron. They are also claiming deep LNR forays into Debaltsevo itself.

It's quite likely that Colonel Cassad will confirm in one of his longer posts later today. Cassad is renowned for detail and analysis, but not for breaking news.

Please note, the term "cauldron" now refers to the (now-shrunken) lower half of the Kiev-held salient as per the maps you've shown.  There is still a gap at the "top" that the DNR/LNR were unable to close. 

I must say, the degree of Ukrainian command and coordination incompetence is stunning.  Kiev's forces were repeatedly taken by surprise by the direction and scope of DNR/LNR moves to shrink and cut off the salient.  Reserves were also not brought to bear in time, if at all.

It's clear to me that the DNR/LNR's Russian advisors have again outwitted Kiev's U.S. advisors. 

Jacob
Colonel Cassad February 10

The second map above was posted by Colonel Cassad today (map dated yesterday), in his post Debaltsevsky Boiler.
The Debaltsevsky [Debaltsevo] group is split into two parts. 5,000 are trapped in the rear boiler [cauldron].

The main problem of the junta [Ukrainian forces] is the rapid exhaustion of resources including serious problems with fuel and ammunition for heavy weapons. Yesterday the Ukraine forces retreated 4 kilometers in the Chernukhin area. Further collapse of the boiler is inevitable.
In a Q&A portion following Cassad's article, Schneider Krieg (who also has his own "live" journal), pinged Cassad with his post on the "North Boiler".

Cassad responded with "It depends on how much they pulled out of the boiler before the lid slammed shut. I quite agree with you, there can not be less than 4 thousand and probably closer to 5."

Mariupol

In regards to Mariupol, Cassad says ...
A counteroffensive junta operation near Mariupol is more of a rather loud publicity stunt than a serious blow. The junta moved through neytralku and a series of empty settlements, but in practice there were no serious attacks of the main line of defense. The reason for this attack is pending decisions of the Minsk summit. The junta is trying in the remaining time to seize control of any bit of territory they can get.
Word Regarding Translation

Translation of these articles is difficult. About a week or so ago I reported the cauldron had closed when Cassad was actually giving his opinion that it would close. The cauldron or "boiling pot" as Cassad calls it, has indeed closed for certain as of yesterday.

There are about 5,000 trapped in the rear cauldron of which 1,000 to 1,500 are support personnel.

Meanwhile, Kiev denies any troops are trapped. Nothing coming from Kiev on the war is believable.

Translation Correction:

Jacob Dreizin informs me there are 5,000 trapped in the lower cauldron of which 1,000 to 1,500 are support personnel. I originally stated 1,000 to 1,500 were trapped in the lower cauldron.

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

Cold Water, Frosty Relations, Wildly Misleading Claims; Time Ticking Away in Greece; Calendar of Events

Posted: 10 Feb 2015 10:20 AM PST

From Frost to Cold Water

Equity markets cling to hopes of agreement with Greece, rhetoric from Germany is anything but encouraging.

Yesterday, the Financial Times reported Merkel Frosty on Greece's Bailout Plans. Today the same story appears with the title of Merkel Pours Cold Water on Greece's Push to End Bailout.
Chancellor Angela Merkel poured cold water on a push by Greece's new government to end its bailout and strike a new financing deal with its creditors, saying the current programme was "the basis of any discussions that we have".

Earlier in the day, Germany's powerful finance minister hinted darkly that a Greek plan to leave the bailout at the end of the month could draw a harsh reaction from financial markets.

"I wouldn't know how financial markets will handle it, without a programme — but maybe he knows better," Wolfgang Schäuble told reporters, referring to Alexis Tsipras, the new Greek premier.
Cold Water, the Theme of the Week

Cold water appears to be the theme of the week. Bloomberg reports German Finance Minister Schaeuble Just Poured Cold Water on Market Expectations for a Greece Deal
Greece offered compromises ahead of an emergency meeting with its official creditors tomorrow as German Chancellor Angela Merkel remained unyielding over terms of the country's bailout conditions.

Greek Finance Minister Yanis Varoufakis told lawmakers on Monday that the government intends to neither tear up the existing bailout agreement, nor allow the budget to be derailed. He said Greece will implement about 70 percent of reforms already included in the current bailout accord.

The European Commission denied reports it will present a compromise proposal at the meeting tomorrow, saying "very intense contacts are ongoing between" Commission President Jean-Claude Juncker, Prime Minister Tsipras and others, and that the plan being worked on is to keep Greece in the euro area. Expectations are "low" for a final pact this week, the commission said.

Greece sought to drum up support for a 10 billion-euro ($11.3 billion) bridge plan ahead of the euro-area finance ministers' meeting in Brussels on Wednesday. The country is seeking to stave off a funding crunch, while also buying time to push creditors to ease some austerity demands.

German political leaders have said they will not extend more assistance to Greece without strings attached. Merkel said in Washington on Monday that the existing aid programs are the basis for Greek talks.

"I'm waiting for Greece to come forward with a viable recommendation and then we'll talk about it," she said.
The only "viable recommendation" from Greece that Germany seems willing to accept is 100% of what Germany wants.

Wildly Misleading Claims

Today, Euro Insight reports EU-Greek Relations Soured by Leaks; Sides Further Apart.
Brussels officials 'infuriated' by 'wildly misleading' Greek claims that Juncker and U.S. Treasury are backing Syriza plan to alleviate debt; EU official says Greeks are 'digging their own graves;'

The carefully orchestrated dance between the new Greek government and its European creditors appeared to crack Tuesday, with top Brussels officials infuriated by what they see as wildly misleading claims coming from Athens.

A senior European official, who spoke on condition of anonymity, described the situation as "berserk" and said, "there is no plan."

He added that the European Commission and U.S. Treasury were both perturbed at the way they had apparently been represented externally by Greek officials. A team from the U.S. Treasury led by Daleep Singh, deputy assistant secretary for Europe & Eurasia, was in Athens late last week.

"The Greeks are digging their own graves," the EU official said.

Early Tuesday, Greece floated its latest funding plan via press leaks, including to the Kathimerini newspaper,  proposing a bridge financing programme that would lead to a "new deal" with creditors from September onwards.

There were reportedly four parts to the new deal: 30% of the existing memorandum with the Troika will be cancelled and replaced with 10 new reforms agreed with the OECD; Greece's primary surplus target would be cut from 3% of GDP this year to 1.49%; Greek debt would be reduced via an already announced swap plan; and the "humanitarian crisis" would be alleviated via policies announced by Prime Minister Alexis Tsipras Sunday.

The first official described the plan as "hopeless" and added, "how can you have a plan when you make no payment obligation till the autumn and then you probably scrap that."
Time Ticking Away

  • February 11 Emergency meeting of the eurogroup, the committee of 19 eurozone finance ministers, to kick-start negotiations over a possible new bailout for Greece.
  • February 12 EU summit in Brussels, the first attended by Greek PM Alexis Tsipras, who is expected to meet German chancellor Angela Merkel on the sidelines.
  • February 16 Regularly scheduled eurogroup meeting which ministers have said is the deadline to agree an extension of the EU's bailout programme, which Mr Tsipras has already rejected.
  • February 28 Eurozone bailout programme ends. Without an extension, Athens will not receive final aid tranche of €1.8bn.
  • March €1.4bn payment due on IMF loan and around €1bn to other creditors.

The first critical date would appear to be February 16, the date by which Greece needs to agree to the bailout program. However, that's an unofficial date. Numerous countries need to vote on the extension even if Greece agrees to kiss Germany's feet.

From a practical standpoint, if Greece agrees to demands by the 28th, eurozone leaders will find a way to make it happen.

At this point a deal seems unlikely.

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

Seven Years Later, Global Debt Keeps Piling Up, $57 Trillion More Than 2007

Posted: 10 Feb 2015 01:12 AM PST

Central bankers still have not figured out the absurdity of their efforts to cure deflation via low interest rates. By forcing down interest rates and encouraging more lending, debts of all sorts keep piling up with no realistic way of paying those debts off.

Debt and (Not Much) Deleveraging

Inquiring minds are digging into a fascinating albeit lengthy (256 page) McKinsey study of debt and deleveraging since the great financial crisis seven years ago: Debt and (Not Much) Deleveraging
Seven years after the bursting of a global credit bubble resulted in the worst financial crisis since the Great Depression, debt continues to grow. In fact, rather than reducing indebtedness, or deleveraging, all major economies today have higher levels of borrowing relative to GDP than they did in 2007. Global debt in these years has grown by $57 trillion, raising the ratio of debt to GDP by 17 percentage points. That poses new risks to financial stability and may undermine global economic growth.



Government Debt

Government debt is unsustainably high in some countries. Since 2007, government debt has grown by $25 trillion. It will continue to rise in many countries, given current economic fundamentals. Some of this debt, incurred with the encouragement of world leaders to finance bailouts and stimulus programs, stems from the crisis. Debt also rose as a result of the recession and the weak recovery. For six of the most highly indebted countries, starting the process of deleveraging would require implausibly large increases in real-GDP growth or extremely deep fiscal adjustments.

Household Debt

Household debt is reaching new peaks. Only in the core crisis countries—Ireland, Spain, the United Kingdom, and the United States—have households deleveraged. In many others, household debt-to-income ratios have continued to rise. They exceed the peak levels in the crisis countries before 2008 in some cases, including such advanced economies as Australia, Canada, Denmark, Sweden, and the Netherlands, as well as Malaysia, South Korea, and Thailand. These countries want to avoid property-related debt crises like those of 2008.

China

China's debt has quadrupled since 2007. Fueled by real estate and shadow banking, China's total debt has nearly quadrupled, rising to $28 trillion by mid-2014, from $7 trillion in 2007. At 282 percent of GDP, China's debt as a share of GDP, while manageable, is larger than that of the United States or Germany. Three developments are potentially worrisome: half of all loans are linked, directly or indirectly, to China's overheated real-estate market; unregulated shadow banking accounts for nearly half of new lending; and the debt of many local governments is probably unsustainable. However, MGI calculates that China's government has the capacity to bail out the financial sector should a property-related debt crisis develop. The challenge will be to contain future debt increases and reduce the risks of such a crisis, without putting the brakes on economic growth.



The rapid growth of shadow banking in China is a second area of concern: loans by shadow banking entities total $6.5 trillion and account for 30 percent of China's outstanding debt (excluding the financial sector) and half of new lending. Most of the loans are for the property sector. The main vehicles in shadow banking include trust accounts, which promise wealthy investors high returns; wealth management products marketed to retail customers; entrusted loans made by companies to one another; and an array of financing companies, microcredit institutions, and informal lenders. Both trust accounts and wealth management products are often marketed by banks, creating a false impression that they are guaranteed. The underwriting standards and risk management employed by managers of these funds are also unclear. Entrusted loans involve lending between companies, creating the potential for a ripple of defaults in the event that one company fails. The level of risk of shadow banking in China could soon be tested by the slowdown in the property sector.

What Happened to Deleveraging?

Growing government debt has offset private-sector deleveraging in advanced economies Rising government debt (debt of central and local governments, not state-owned enterprises) has been a significant cause of rising global debt since 2007. Government debt grew by $25 trillion between 2007 and mid-2014, with $19 trillion of that in advanced economies. To be sure, the growth in government spending and debt during the depths of the recession was a welcome policy response. At their first meeting in Washington in November 2008, the G20 nations collectively urged policy makers to use fiscal stimulus to boost growth.

Not surprisingly, the rise in government debt, as a share of GDP, has been steepest in countries that faced the most severe recessions: Ireland, Spain, Portugal, and the United Kingdom. The challenge for these countries now is to find ways to reduce very high levels of debt.





Given current primary fiscal balances, interest rates, inflation, and projected real GDP
growth rates over the next five years, we calculate that the ratio of government debt to GDP will continue to grow in many advanced economies, including Japan, the United States, the United Kingdom, and a range of European countries.



Mortgage Debt

Real estate and land prices are the major drivers of household debt over time What is causing the continuous rise of household debt around the world? Rising mortgage debt is the main cause, as documented in research by Jordà et al.36 In the United States, for example, household debt grew from just 16 percent of disposable income in 1945 to 125 percent at the peak in 2007, with mortgage debt accounting for 78 percent of the growth (Exhibit 15). Mortgage debt represents the majority of household debt growth in other countries as well. Our data show that mortgages now account for 74 percent of household debt in advanced economies and 43 percent of household debt in developing economies (where household loans also include borrowing for small family businesses).



Revisit Tax Incentives for Debt

Because real estate and credit bubbles helped trigger the 2008 financial crisis and many previous crises, policy makers should reconsider the tax preferences given for household mortgages. The incentives that governments give for real estate vary widely across countries, but include deductibility of mortgage interest expenses and preferential capital gains treatment on residential home sales.

While these incentives are usually adopted to promote the social goal of homeownership, in practice they provide the greatest benefits for high-income households that pay the highest taxes. Moreover, they help create housing bubbles by encouraging households to take on larger mortgages to buy more expensive homes.

Policymakers therefore may need to revisit the mix of incentives given for homeownership and balance this goal against public incentives for other investments – particularly those that expand the long-term productive capacity of the economy, which residential real estate in most cases does not.
Kill Incentives - All of Them

There is much more in the report, some of which I agree with, but some not. For example, I agree with McKinsey in regards to mortgage incentives and housing bubbles, but why stop there?

I suggest that government planners should stay out of the incentive business altogether and instead let the free market work as it will do if left alone.

Sowing Inflation, Reaping Deflation
 
Central banks in general are hell-bent on forcing more debt into the system. Given that debt (and the ability to pay it back) is precisely the problem, attempts to force more debt into the system is 100% guaranteed to blow up at some point.

Asset bubbles are building and the Fed (central bankers) don't see them. Instead, they focus on consumer price deflation which actually should be a welcome thing.

This theme was a recent topic of mine. In case you missed it, please see Sowing Inflation, Reaping Deflation

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