vineri, 24 septembrie 2010

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Video SEO Basics - Whiteboard Friday

Posted: 23 Sep 2010 02:15 PM PDT

Posted by Aaron Wheeler

Video SEO isn't something we always think about when optimizing, but we really should. In this week's Whiteboard Friday, Danny Dover reviews some of the video SEO basics that every SEO should know about. After all, it's a largely untapped market, unlike the Canadian maple tree market. Which is very tapped. (The Canadian maple tree video market, however, is quite untapped, but based on my scientific and extremely boring research in YouTube, I don't recommend you pursue that market at all).

Anyways, we have a very special visitor this week, what with all of Danny's meta discussions this month. Great Scott! That's what happens when you get all meta and self-referential on us, Danny.

Embed video
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Video Transcription

Hello, everybody. My name is Danny Dover. I work here at SEOmoz doing SEO. For today's Whiteboard Friday we're going to be talking about video SEO. Now, last week I mentioned that was the most meta video we'd ever done. It was optimizing SEO resources, right? Now, this one is a video on video SEO. So this one, this one is the new champion of the most meta video that we have ever done here, and possibly the most meta video that you have ever seen. If there is some kind of disruption in the space-time continuum, totally my fault. I apologize.

--1.21 Gigawatts!?!--

That was unexpected. That was Doc from Back to the Future. A poor impression of it. Totally derailing my Whiteboard Friday. You're killing me.

All right. Now, video SEO, huge opportunity here. This is more of a serious thing. Video SEO has low competition. You see in the universal results that video thumbnails show up about a third of the way from the top, right. You're seeing little thumbnails. A lot of times it's YouTube, but you also see Vimeo and lots of other video providers showing up. You are seeing those in lots and lots of SERPs, and increasing so actually. There is a huge demand from people because, you know, Google is doing A/B testing or multivariate testing. They're seeing people are clicking on those. But, at the same time, you'll have low competition. You'll see a lot of times for very high competition keywords that have video results that the video results will just be kind of mediocre. They just kind of showed up there. Part of that is because it is new. Not a lot of people are optimizing for video, which is becoming extremely important. So, a lot of opportunity there.

The other part of this, I guess I can only talk for the United States, where I live, but the way that people are starting to consume media is changing drastically. We've all seen YouTube. We've all seen Vimeo. Now the devices people are using and the places they are watching video are different. You have things like the iPhone, the iPad, and the iPayWayTooMuchForGadgets and I am an Apple fanboy, kind of thing. You're seeing these all over the place. There is the Android model, the operating system that is running lots and lots of things. system. You're seeing the way that people are consuming media very differently. The market is growing. Based on that, the demand is high but the competition is really low. Lots of opportunity. This smells like money to me. This is huge. This is a big deal.

How do you take advantage of this? Well, there are different metrics the search engines use to look at video content. When the search engines crawl normal content, they can get some kind of idea of what text is trying to say by using their natural language processing algorithms. They can get some idea of what this text says just simply because they put so much time and so much energy into developing these algorithms to get some kind of semantic feeling for what text means. Now, this doesn't translate directly into video because, part of the reason at least, is video is much bigger files. It takes a lot more processing to get an understanding of it. It is a lot more zeros and ones. With these Google and the search engines have provided Meta information that you can do about a video.

The two most important ones here are the title of the video -- what do you title your video. That's probably what people are going to search for, right. If it is the shoes video on YouTube or whatever it may be on YouTube. Those are a lot of times what people are searching for. That information turns out to be very important for video SEO.

Likewise, the description is also very important because it gives you more than whatever may be the character limit, probably around 140, I would guess for the title. But it gives you more text to describe it in more depth. This helps the search engines understand the video without having to go through all the intensive video processing.

Now, as video SEO is maturing, we're starting to see more and more metrics start to affect the algorithm. So, let me be totally straightforward with this. This is just my speculation. I have not done tests on these ones. But they seem very likely to be impacting the video search results. My guess would be that they'll be more impactful going forward. So, they are something to start paying attention to now.

The first one I see here is engagement stats. The most obvious one here is views. How many times is a video viewed? I know that when I go to YouTube and I search for something, after I look at the text, the title and the description, I then look at the views. Has this been watched 30 times or has it been watched 10 million times? It seems very, very likely to me that click-through rates are going to correlate with high view rates also. So, I think views are becoming increasingly important and are something that you should keep an eye on.

Number two is ratings. So, on YouTube they offer a five-point scale. On things like Vimeo and other things, they use a thumb up and a thumb down. That's more similar to the Reddit system. These are actual humans who are giving their opinions and their expertise on video content. This is very helpful because search engines are designed to provide results for humans. Any imput you can get from humans is helpful for getting output for humans. This is something that Google figured out very early and is something that is very important.

Number three, comments. What could be more human than commenting on videos? In YouTube's case, it is some of the lowest thresholds of intelligence we've ever seen on the Internet, which is really saying something. You have floor chant, below that you have YouTube comments. It is kind of rough, right. But this is a metric of actual human beings engaging with content and with the author or producer of the video. This seems like a very important metric to me. I don't think it is the content of the comments, because they are awful. But I think it is the volume of it and the kind of themes that people are talking about. Are they saying, "this is awesome" or "this sucks?" I think that does have some kind of impact on it.

The last one is social metrics. Really, I think this is universal. It is not just the video vertical; I think it is the other verticals as well. By social metrics, I mean things like the amount of tweets or what people are saying in tweets, Delicious popular saves, or submissions to Reddit or Digg or any of those other things. How are people talking about this with their friends? So, you have things like the QDF algorithm, which is Google's Query Deserves Freshness algorithm. What this does is it will artificially inflate the ability for something to rank based on temporal metrics. So, if lots and lots of people are linking to something or tweeting about it, then it can artificially rank higher than things that normally wouldn't just because it is very important. You see this a lot of times with natural disasters. Things will just rise to the top when normally they wouldn't. Michael Jackson stuff. We saw lots and lots of QDF stuff really blowing, making things rank when normally there was no way they would. This is something to keep in mind also. These social metrics.

Now, duration. I think is the last one. This one is more about the extremes, finding the outlier. If a video is three seconds long, it is probably not something that Google, Bing, or Yahoo will want to rank highly. At the same time, if it is something that is multiple hours long, they might want to rank it, but it is probably not what people are going to look for when they are doing video. One of the things about video and content on the Internet in general is that people want to consume it quickly. They like bulleted lists. They like quick pictures, inforgraphic types of things, and they like short videos. I should probably take my own advice and get to the end here. So, I'll try to do that.

The last one we have for you is tactics. I have expressed that there is a huge opportunity here. I have talked about some of the metrics that are important. Now, tactics, the search engines have given you several tools on how to do this. Video sitemaps is, not new, because video sitemaps have existed for a while, but the protocol was recently revamped by the major search engines and the people who are involved with that protocol. They've added a couple of things that are interested. They've added the location of the thumbnail of the video. They've added things like if it is family friendly or not. They've added the URL of where the video is embedded. So, from an SEO perspective, this is really interesting. We don't want links going to YouTube anymore because YouTube has plenty of links. Instead, with the new video sitemap, you can provide the URL of where it is embedded and then when the search engines index that content they'll link back to you. So, it's not so much that you get a link from it per se, but you get the click-through. So, someone clicking on the SERP, clicking that thumbnail, is going to go to your blog, where you embedded the video, rather than to the hosting provider. This is a big win for us SEOs and for us content producers.

The other one is transcriptions. So, what could be easier than just going back and using the old tactics you already have for creating content? With transcriptions, you take video, you take the audio from the video, and you turn it into plain text. This is something that the search engines can then use and interpret just like they do a normal web page. This is important for search engines, but it is also important for human beings as well. People with hearing impairments who can't hear this video right now can then go through and read it. They can understand it that way. International people who are speaking different languages can then go through the content and read at their own pace. They can do whatever tools they need to translate it. It helps spread it more. It is both good for humans and for users, which is a win-win and that's always the situation I try to get when I do SEO.

I recommend that you always try to go for those win-wins, because ultimately what the search engines are doing is chasing after the idea of getting the best information to human beings. I think that's what it really comes down to, crafting your content for human beings. It is harder to do with video SEO, but it is becoming more and more possible to do it.

I appreciate your time today. I will see you next week.

Video transcription by SpeechPad.com


Follow Danny on Twitter! Even more to your benefit, follow SEOmoz! Alternatively, you can always follow me, Aaron.

If you have any tips or advice that you've learned along the way, or if you came back from the future, we'd love to hear about it in the comments below. Post your comment and be heard!


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Michael Gray - Graywolf's SEO Blog

Michael Gray - Graywolf's SEO Blog


Content Ideas – Creating an Ongoing Series

Posted: 24 Sep 2010 08:02 AM PDT

Post image for Content Ideas – Creating an Ongoing Series

One of the problems that website owners and bloggers encounter on a regular basis is coming up with ideas for posts. One of the tactics that I like to employ is creating a regular ongoing post series.

So let’s tackle the big questions first: what’s an example of post series? How about “Sandwich Mondays” from NPR. The basic premise is every monday they publish a post about sandwhiches. Sometimes these are reviews as in the case of the Denny’s Fried Cheese post. Sometimes there’s a travel/tourism theme as in the case of the Pop Tarts Restaurant in Times Square. Other times it could be a flashback pop-culture reference like the Pixy Stix and Cap’n Crunch Cereal sandwich from The Breakfast Club.

Click here to view the embedded video.

You can take this concept and use it on lots of different sites. For example, on a real estate blog, how about writing an in depth post about a school district in a neighborhood you work. On a clothing site do a series that features, each week, one pair of fashionable shoes under $25. This is a pretty easy concept to run with. All it takes a little imagination.

To get the most out of this approach you should try using an editorial calendar. Now this doesn’t mean you have to eat a sandwich every Monday. You can get 3-4 weeks or more ahead of yourself and schedule the posts in advance. You can also have multiple series. In the example of the real estate website, maybe you’ll also have a series about local libraries and programs they offer. If you keep each of the posts narrowly focused, you can tie it all together with the head and tail content approach. These types of posts are something that will benefit from having a bit of personality and opinion to them because it’s what makes them interesting. Additionally, the more opinion you use, the less you are going to be able to outsource. Lastly use tags and maximize internal anchor text to  get the most SEO value, silo your content, and better target your ads.

What are the takeaways here:

  • Choose 1-3 series of weekly, biweekly, or monthly posts
  • Use an editorial calendar to help you plan and publish your content
  • Keep each of the posts narrow and focused
  • Interlink the series with other series using the “head and tail” concept
  • Maximize your internal anchor text by interlinking to other related posts
  • Tag your posts to help you serve the most effective advertisements

Creative Commons License photo credit: adactio

This post originally came from Michael Gray who is an SEO Consultant. Be sure not to miss the Thesis WordPress Theme review.

Content Ideas – Creating an Ongoing Series

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Finally - Relief for Small Businesses

The White House Economy and Jobs Agenda
Friday, September 24, 2010
 

The Week In Economy and Jobs

Yesterday afternoon, the House passed the Small Business Jobs Bill.  After months of partisan obstruction and delays, this much-needed legislation will help provide relief to millions of small businesses across the country without adding to the deficit.

Earlier in the day, Congressional Republicans announced their “Pledge to America” -- their plan to take America back to the same failed economic policies that caused this recession in the first place.  Their plan would cut taxes for millionaires and billionaires (adding trillions to the deficit) while raising taxes for 110 million working families, put health care back in the hands of the big health insurance companies, and return us to era or recklessness and irresponsibility on Wall Street. 

Highlights

The Congressional Republicans' Pledge: What if the Rubber Hit the Road?
September 23, 2010
Communications Director Dan Pfeiffer takes the closest look yet at the Congressional Republicans agenda.

Small Business Where Republicans Announced Pledge to America Would Likely Benefit From Obama Plan for Small Businesses
September 23, 2010
Deputy Communications Director Jen Psaki exposes the stunning hypocrisy of the Congressional Republicans in harping on small business in their agenda.

The Congressional Republican Pledge to Special Interests
September 23, 2010
Communications Director Dan Pfeiffer explains the key implications of the new agenda leaked from the Congressional Republicans.

Spurring Innovation and Anchoring Jobs in America
September 22, 2010
Jason Furman, Deputy Assistant to the President for Economic Policy, discusses the importance of Regional Innovation Clusters - an important element of the President’s innovation agenda and a good example of how federal agencies can collaborate to maximize the impact of existing federal investments in key areas like energy and agriculture.

Next Open Meeting of the President’s Economic Recovery Advisory Board
September 22, 2010
The President’s Economic Recovery Advisory Board (PERAB) will hold its next public meeting on October 4, 2010 in the White House Roosevelt Room beginning at 2:00 p.m. Eastern Time.

Open for Questions: Small Business Issues with SBA Administrator Karen Mills
September 22, 2010
September 29th at 2pm EDT, Karen Mills, Administrator of the U.S. Small Business Administration will answer small business owners' questions.  Submit questions now at openforum.com from American Express.

America Has Spoken, Will the GOP Listen?
September 22, 2010
Communications Director Dan Pfeiffer looks ahead to the House Republicans announcing their agenda.

Transforming Distressed Neighborhoods into Neighborhoods of Opportunity
September 21, 2010
A look at Promise Neighborhoods, a piece of a broader White House Neighborhood Revitalization Initiative that focuses and coordinates federal resources in order to build communities that promote cradle to career success.

Building a New Foundation
September 21. 2010
Secretary Donovan describes Administration efforts to make communities more livable, sustainable and prosperous.

Republicans in Congress Push to End Consumer Protections, Let Wall Street Run Loose
September 21, 2010
Deputy Communications Director Jen Psaki discusses the Congressional Republicans' hopes of repealing Wall Street Reform.

President Obama's Town Hall on the Economy, Business and the Middle Class
September 20, 2010
The President takes part in an unusual sort of town hall in conjunction with CNBC.

No Excuse for Holding Middle Class Tax Cuts Hostage
September 20, 2010
Deputy Communications Director Jen Psaki debunks the House Republican's bogus attempt to hide behind small businesses as they pledge to block middle class tax cuts.

Get Updates

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Daily Snapshot: Behind the Scenes This Week

The White House Your Daily Snapshot for
Friday, September 24, 2010
 

West Wing Week: Immeasurable Courage and Uncommon Valor

West Wing Week

West Wing Week is your guide to everything that’s happening at 1600 Pennsylvania Ave. This week, walk step by step with the President as he announces that Elizabeth Warren will lead the effort to get the Consumer Financial Protection Bureau off the ground, participates in a live CNBC town hall, awards Chief Master Sergeant Richard L. Etchberger, U.S. Air Force, the Medal of Honor posthumously for the immeasurable courage and uncommon valor he displayed in combat, and much more.

Watch the video.

Today's Schedule

All times are Eastern Daylight Time

11:15 AM:  The President holds a bilateral meeting with President Ilham Aliyev of Azerbaijan

12:00 PM: The Vice President attends an event for Senatorial candidate Chris Coons

12:15 PM:  The President holds a bilateral meeting with President Juan Manuel Santos Calderón of Colombia

1:00 PM:  The President attends working luncheon with ASEAN leaders

3:00 PM:  The Vice President delivers remarks at an event for the Florida Democratic Party with Florida’s Democratic candidates

3:15 PM:  The President attends Ministerial Meeting on Sudan  WhiteHouse.gov/live
 
5:00 PM:  The President holds bilateral meeting with President Roza Otunbayeva of Krygyzstan

6:55 PM:  The President departs New York en route Andrews Air Force Base

7:45 PM:  The President arrives at Andrews Air Force Base

8:00 PM: The President arrives at the White House

  WhiteHouse.gov/live  Indicates Events that will be livestreamed on WhiteHouse.gov/live.

In Case You Missed It

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

The Congressional Republicans' Pledge: What if the Rubber Hit the Road?
Communications Director Dan Pfeiffer takes the closest look yet at the Congressional Republicans agenda.

Small Business Where Republicans Announced Pledge to America Would Likely Benefit From Obama Plan for Small Businesses
Deputy Communications Director Jen Psaki exposes the stunning hypocrisy of the Congressional Republicans in harping on small business in their agenda.

The President to the UN General Assembly: "We Can Say That This Time Will Be Different"
The President speaks of the challenges facing America, the world, and particularly Israel and the Palestinian Authority.

Get Updates

Sign up for the Daily Snapshot

Stay Connected

 


 
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Seth's Blog : Cost reduction for high-end markets

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

Cost reduction for high-end markets

If you sell at the top of the market (luxury travel, services to Fortune 500 companies, financial services for the wealthy...) you might be tempted to figure out ways to cut costs and become more efficient.

After all, if you save a dollar, you make a dollar, without even getting a new customer.

Resist.

The goal shouldn't be to reduce costs. It should be to increase them.

That voice mail service that saves you $30,000 a year in receptionist costs--it also makes you much more similar to a competitor that is more efficiently serving the middle of the market.

Go through all the ways you serve your customers and make them more expensive to execute, not less. Your loyalty and your market share will both grow. People who can afford to pay for service often choose to pay for service.

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joi, 23 septembrie 2010

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Shopping Patterns Show When the Government Checks Come In

Posted: 23 Sep 2010 08:43 PM PDT

With every passing month, more and more people live paycheck to paycheck. The proof is easy to find. Just start Watching Wal-Mart at Midnight
[Said] Bill Simon, CEO of Wal-Mart's U.S. business, at a Goldman Sachs conference last week, on behavior at a Walmart store around midnight at the end of a month:

"The paycheck cycle we've talked about before remains extreme. It is our responsibility to figure out how to sell in that environment, adjusting pack sizes, large pack at sizes the beginning of the month, small pack sizes at the end of the month. And to figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.

"And you need not go further than one of our stores on midnight at the end of the month. And it's real interesting to watch, about 11 p.m., customers start to come in and shop, fill their grocery basket with basic items, baby formula, milk, bread, eggs,and continue to shop and mill about the store until midnight, when electronic — government electronic benefits cards get activated and then the checkout starts and occurs. And our sales for those first few hours on the first of the month are substantially and significantly higher.

"And if you really think about it, the only reason somebody gets out in the middle of the night and buys baby formula is that they need it, and they've been waiting for it. Otherwise, we are open 24 hours — come at 5 a.m., come at 7 a.m., come at 10 a.m. But if you are there at midnight, you are there for a reason."
Underwear Economics

Wall Street Journal write Al Lewis mentioned the above in Underwear Economics
There is no Santa Claus. The next best thing is Wal-Mart. And Wal-Mart says we're all getting underwear for Christmas.

OK, so maybe some children will still receive their annual allotments of cheap electronic games and plastic toys.

"But for all you adults out there, I think you should plan on socks and underwear for Christmas," said Bill Simon, CEO of Wal-Mart's U.S. business, at a Goldman Sachs conference last week. "Because that's going to be what you are going to get -- at least from me."

Perhaps underwear for Christmas isn't such a bad idea.

Former Federal Reserve Chairman Alan Greenspan once said he viewed underwear sales as an economic indicator. Cost-cutting consumers will wear their old undies longer, the theory goes.
There is much more in the "underwear" article including snips contained in "Watching Wal-Mart"

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


Ass Backwards: Senate to Shelve Bush Tax Cuts for Individuals; House to Pass Small Business Tax Cuts

Posted: 23 Sep 2010 10:45 AM PDT

If ever you want to see tax policies that are ass backwards, look no further than two Congressional tax bills, one should pass but may not even get a vote, the other is seriously misguided but will pass anyway.

Senate Democrats Ready To Shelve Tax Cut Vote

TPM reports Senate Dems Ready To Shelve Tax Cut Vote
A senior Senate Democratic aide told TPM today there won't be a vote on extending the Bush tax cuts in the upper chamber before the November election, a blow to party leaders and President Obama who believed this would have been a winning issue.

"Absent a stunning turn of events, we're not going to do tax cuts before the election," the aide told TPM.

"We have a winning message now, why muddy it up with a failed vote, because, of course, Republicans are going to block everything," the aide said.

Aides for two senators in tough bids have suggested they would take the plunge and vote before the election, but they'd prefer to vote if it means the tax cuts extension could actually be passed. And that's not counting the conservative Democrats who disagree with the majority of the caucus about where the threshold should be -- and lean toward a higher than $250,000 in income definition of the middle class.
Politics as Usual

The irony is both parties are blaming each other and both parties are to blame. Certainly the Democrats should have enough votes to pass something given they have a majority. I highly doubt the Republicans would filibuster a tax cut proposal this close to election.

However, Democrats might not have the votes because of defections. Senate leaders fear those defections, and do not want to risk Democrats being blamed.

Another, perhaps more likely alternative is that Democrats believe a "winning message" (blaming Republicans) is better than "winning action".

Either way, taxpayers will suffer.

Contrary to the what the Democratic fools believe, I think people will blame incumbents not Republicans for failure to pass something. Thus, Republicans have every incentive to do the wrong thing, short of a filibuster.

The bottom line is the same. Nothing gets done, and both parties are to blame.

Year End Cliff Gamble on 2% of GDP

I did not think it would come to this. I was nearly certain there would be a vote and something would pass. It still may. But if TPM is correct, it's now likely this vote is dead.

Zero Hedge provides some insights into what this all means in The Goverment's "Year End Cliff" Gamble On 2% Of GDP And 10% Of Disposable Income
With mid-term elections a month and a half away, and the expiration of the Bush tax cuts approaching at a rapid pace, the stakes for Obama's dwindling administration on the tax cut extension issue loom. And as Goldman's Alec Phillips demonstrates, the costs of either decision are huge: on one hand, should Obama go ahead and relent to extending all the tax cuts, he will almost guaranteed not be around for a second term due to the avalanche of disappointment in his electorate as he relents on this key promise.

On the other hand, should he and the republicans be unable to find a compromise and all tax cuts expire, the impact to the economy could be so vast that America's breezy depression will become a full blown hurricane, possibly worse than anything the nation has ever seen.

Phillips' succinct summary of the downside case is as follows: "Letting all of these provisions expire would subtract nearly 10 percentage points from annualized disposable income growth in Q1 2011, which could translate into a nearly 2 percentage point decline in final demand and nearly that large a drag on GDP in the first half of 2011."

And it is not just the Bush cuts that are at steak: the year end "cliff" also sees the expiration of the "Making Work Pay" (MWP) payroll tax credit enacted in ARRA, and the relief from the alternative minimum tax (AMT). One thing is certain: if a stalemate prevails, GDP for H1 of 2011 will be wildly negative.
Scoring Points More Important than Doing the Right Thing

I cannot find a link for that quote by Goldman's Alec Phillips, but I certainly concur that consumer spending will take a big hit if something does not pass. A decline in consumer spending in turn will negatively affect GDP.

This just goes to show you that scoring points takes precedence over actually doing something useful. The impacts of this particular point scoring episode may be severe.

Small Business Non-Boost

Inquiring minds are reading Congress Set to Approve Bill Aimed at Boosting Small Businesses
The U.S. Congress is poised to give final approval to legislation aimed at boosting lending to small businesses in what is likely the Democrats' final jobs bill before the Nov. 2 elections.

The House is slated to vote today on a measure offering a mix of tax cuts, loans and revived stimulus provisions aimed at easing the flow of credit and signaling voters, who head to the polls in six weeks, that Democrats are trying to boost the economy. Passage would send the bill, which was approved by the Senate last week, to President Barack Obama for his signature.

Economist Alan Blinder, a former Federal Reserve vice chairman, said many small businesses have had "extreme" difficulty getting loans though he said poor sales remain their biggest problem.

"The thing that drives small businesses over and above everything else is the ability to sell their product," he said.

The bill had been held up for months by Senate Republicans who objected to provisions setting up a $30 billion program in which the Treasury Department would buy preferred shares in community banks, with participants paying the government dividends on a sliding scale depending on how much they increase lending. Dividends could be as low as 1 percent. Republicans said the plan amounted to little more than a scaled-down facsimile of the Troubled Asset Relief Program.

For all the controversy over the provisions, it's far from certain banks will participate in the program, said Mark Zandi, chief economist for Moody's Analytics. Banks will probably be reluctant to take the government's money, he said, after seeing TARP recipients hit with retroactive executive-compensation limits amid a public outcry over tax dollars going to institutions paying million-dollar salaries.

"I'm skeptical that banks will actually take the government up on their offer," said Zandi. "I think the memory of TARP will be in the minds of those lending institutions and they'll be reluctant to use the capital."

Other provisions would provide $56 billion in tax cuts over the next 12 months, with the bulk coming through "bonus depreciation" that allows companies to more quickly write off the cost of purchases. The tax cut would amount to $12 billion over 10 years, the yardstick used by Congress to determine how much bills cost, in part because businesses taking bigger deductions now couldn't claim them in the future, which would increase projected tax revenue in subsequent years.
Buying Preferred Shares Amazing Convoluted

Buying preferred shares of banks to get them to lend is amazingly convoluted. Banks need to decide business risks of lending and make those decision on risk, not on government prodding.

The only possible saving grace for such monstrous stupidity is that Zandi is likely correct when he says banks may not take the offer in memory of TARP. Nonetheless, this is yet another step down the path of more seriously misguided government intervention.

Republicans were correct to object to this foolishness.

Tax Credits for Capital Spending Make Little Sense

Given the #1 problem facing small corporation is lack of customers, it makes little sense to entice businesses to increase capacity. Payroll tax credits suffer the same flaw.

Please see my response to both those ideas in Response to Nouriel Roubini on "America Needs a Payroll Tax Cut"

Indeed, I received this email from the president of a small corporation just yesterday.
Dear Mish:

I agree with your analysis of the statements by Roubini re: payroll taxes. As a business owner with four employees, I'd welcome them; however, such breaks would not entice me to hire another employee.

Have a good day.
I am quite certain that sentiment represents the vast majority of small business owners.

The one thing small business owners need is customers. It's hard to get more customers when government is going to start taking a bigger bite out of everyone's pay check.

This is further proof that Congress has those bills ass backwards. But hey, who cares if the economy goes to hell. After all, scoring political points is far more important!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Janet Tavakoli on the "Myth of the Immoral Debtor"; An email from a Charlie Munger student; "Business as Usual"

Posted: 23 Sep 2010 01:11 AM PDT

Emails continue to fly in regarding Amazing Arrogance.

I would like to share a few of them including a second email from Janet Tavakoli regarding bankers' sense of entitlement and "the myth of the immoral debtor", a term Tavakoli attributes to Elizabeth Warren.

From Janet Tavakoli:
Hello Mish,

Bankers have an enormous, unjustified, sense of entitlement. These people work for failed institutions, yet they feel they are entitled to bonuses that far exceed those of bankers and investment bankers of one or two decades ago.

Note that Berkshire Hathaway owns a big chunk of Wells Fargo, which bought Wachovia, which in turn bought Golden West, the very seat of a lot of fraudulent lending.

Of course, we bailed out Wells Fargo and relaxed accounting rules, so no one knows the true size of the hole in that balance sheet. Charles Munger's remarks are all the more bizarre in this context.

Here in Illinois, people were lied to and deceived with phony docs. Among many other frauds, people would show up at a closing for a fixed rate loan and be presented with docs for an option ARM. All sorts of variations occurred.

Lisa Madigan, the Illinois Attorney General was first to file the suit against Countrywide, and beat California by minutes. Countrywide settled for $8+ billion on the combined suits, but that was way too low. Madigan publicly stated: "Borrowers didn't break the law; Countrywide broke the law."

Of course, some borrowers committed fraud, overreached, or got in over their heads, and there are certainly cases of irresponsibility. However, the reality of the mortgage lending market is that it was rife with fraud by mortgage lenders--from even before the first huge Ameriquest fraud.

I was on CNBC a few months ago and Kudlow, Santelli, and others shouted me down when I brought up predatory lending. Columbia Journalism Review and others took CNBC to task. Widespread predatory lending is well documented. This isn't a matter of opinion, it's a matter of fact.

You'd think Munger had been living under a rock. Yet, he hasn't been, and I believe he knows better. Buffett knows better, too. Unfortunately, instead of using their positions to tell the truth, they are using their positions to propagate what Elizabeth Warren calls "the myth of the immoral debtor."

I'm no bleeding heart; I'm all about the cash flows.

Investment banks knew the cash flows from these loans wouldn't be there, but they went ahead anyway. Thus, they are responsible for widespread securities fraud. To keep it going, they created more complex securitizations and got more people involved to cover up the mounting losses that were coming down the pike. This was all known and knowable in advance.

I didn't "forsee" anything. I have no psychic ability. I'm not prescient. I am, however, an analyst, and I know my stuff. So did they. It was fraud.

So, just what sort of "civilization" is Munger trying to preserve?

Warren Buffett has made statements that he doesn't see the purpose of going after people. That's ridiculous.

I am in complete agreement with William K. Black that thorough investigations are long overdue. The crimes aren't in doubt, but one has to go through the arduous task of collecting evidence even though delays have made the trail cold. That was deliberate.

Best,

Janet
University Student Chime In

Here is Email from a University of Michigan student who heard the speech in person.

Alex writes ...
Hey Mish

I am a University of Michigan student and I was present for Charlie Munger's talk on campus. You probably wouldn't have been able to sit through the whole thing without screaming obscenities. There was question asked about gold and Charlie said he would never own it. There was also a question about derivatives and Charlie insulted that person as well. Correct me if I'm wrong, but didn't Berkshire purchase a large quantity of silver below $5? Didn't Berkshire get involved in the derivatives market?

Thanks
Alex
Charlie Munger Student Chimes In

Here is an Email from a Charlie Munger student and long time shareholder of Berkshire Hathaway.
Hello Mish,

As a regular reader of your column, long time shareholder of Berkshire Hathaway, and Charlie Munger student, I was saddened to read Munger's remarks. While I am never surprised by his hubris - attend a Wesco shareholder meeting and you will see how the man holds court - I am shocked that he would suggest that those who did not receive bailout money to suck it up.

While I knew that Buffett was a hypocrite, I never expected it from Munger who states that he lived on principles. I sold all my Berkshire shares today.

Keep up the great work, you are one of the few sound voices left out there.

"S"
Yet Another Jaded Former Berkshire Shareholder and Fan

From "JL", an asset manager who sold on the news ...
Dear Mr. Buffett:

I suppose if one lives long enough, they eventually see all their living, revered heroes let them down in some way. Some succeed in this fashion far more than others. And man let me say this, "you blew me away."

After over a decade of being a "naive" Berkshire "partner/shareholder" who always defended you, I have sold every single share I ever owned as I sadly witnessed you violate far too many of your own guidelines in the Berkshire Owner's Manual. This was a tiny dollar amount by your standards, but at one time more than 50% of my family's net worth.

You may be interested in knowing more details as to why I sold my shares, as the majority of letters that continue to pour in to Kiewit Plaza surely share a similar tone to this one. You and Charlie "Fear" Munger continue to misrepresent history, and that is why the public's rage at you and at Wall Street grows with every passing day. And that level of anger will remain elevated and growing and directed at the miscreants known as the "bailout sympathizers" for as long as the unemployment rate does. We could and should have wiped out the "too big to fail" equity holders before we wiped out the tax payer. But that would have meant Berkshire's precious book value would have taken a major hit, and so you used up all of a billionaire's political capital and traded the ethics and morals you seemingly worked a lifetime to build, to prevent that from happening. Was that trade a good one?

And I have a big problem with that sir. When a select group of super-wealthy, elite, politically connected insiders are allowed to transgress a nation's various moral, securities, and bankruptcy laws under the falsely dramatized "emergency" threat and guise of an Economic Pearl Harbor or a new Adolph Hitler (have you scolded FearMunger yet for his Antoinette moment to the University of Michigan kids?) to deplete its national treasury, and gets away with it....well then it is time for the "great unwashed" to be very concerned. And the guilty bailout offenders are very right to be worried of the social chaos that FearMunger warns us about, if WE are unable to "suck it up and cope!"

In perpetrating the greatest illegal transfer of wealth in the history of the world, you have lowered the capitalistic bar to an all-time historic low. This much I know: Despite your charitable efforts and investing acumen, history will not be kind to you for these repugnant actions, and your true legacy is:THE FATHER OF ALL MORAL HAZARD AND THE U.S. ZOMBIE ECONOMY

You will probably not be around to see it devolve into this state first hand, but I can assure you that as the lead architect of the immoral bailouts, you have sent me and my kids and the rest of us right into SQUANDERVILLE hell. Shame on your bailouts, shame on you for remaining silent while we failed in crafting effective financial reform, and shame on your world-class hypocrisy. There is so much more to life than the compounded annual growth rate of your book value!

Yet Another Jaded Former Berkshire Shareholder and Fan,
"JL"
That was the exact letter "JL", an asset manager sent to Warren Buffett.

Let Them Eat Cake

I received numerous Emails similar to the following
Hello Mish,

Great job. Has Charlie Munger become this generation's Marie Antoinette? Let them eat cake!

Steve
Reader from Canada Chimes in on Narcissism
Hi Mish:

I have to say that your article, Amazing Arrogance, really hit a chord today.

Your article that features the appalling statements of Mr. Munger that are equally insensitive as the "We care about the small people" statements from Tony Hayward, former CEO of BP.

My wife & I have been doing research on Narcissism. It is a fascinating area to explore and I believe most people who seek and rise to a position of power demonstrate many of its characteristics.

Here's a link to a site that features an author, Sam Vaknin - a narcissist, who has written a book detailing his observations: http://www.healthyplace.com/personality-disorders/malignant-self-love/narcissism-narcissistic-personality-disorder-npd/menu-id-1469/

His observations are chilling to read. There are several links to his articles at the bottom of the page on this link.

All the best.
Chris - North of Toronto
God's Work

Reader "Tin Hat" sends a list of notable quotes:

  • Goldman Sachs' CEO Loyd Blankfein says "We're doing God's work."
  • BP's chairman says "We care about the small people."
  • Lord Griffiths, vice-chairman of Goldman Sachs International, says the British public should "tolerate the inequality as a way to achieve greater prosperity for all".
  • Now Munger thinks we should "suck it up and cope." And "thank god" for the bailouts.

Tin Hat quips "Tell me Munger, which god might that be? The Man Upstairs, Lloyd Blankfein or Lucifer?"

Ryan Skene, Commercial Account Manager

Ryan Skene, a Commercial Account Manager for HSBC who supported Munger (HSBC Commercial Account Manager responds to "Amazing Arrogance") had second thoughts.

Ryan sent a second somewhat apologetic email saying "perhaps a more measured response from myself would have been appropriate."

He went on to say ....
I do not think it fair that US bank's had to be bailed out at the expense of the US taxpayer. Clearly, the most fair approach would have been for banks to have made loans that they could be reasonably assured would be paid back. Obviously, that's not what they did. And truly, some banks and their executives did pay pretty dearly for their mistakes. Dick Fuld may still be a millionaire, but I doubt greatly what remains of his networth is much consolation for the shame he must feel ever morning when he looks in the mirror.

Still, I am entirely glad that the bailouts happened. I saw first hand the fear that gripped bank executives as they could not be sure which of their counterparts were good credits and which were not ... and the fear from business owners, many of them what you would consider small, that the credit they rely on to operate their businesses had dried up. We were on the precipice of a total meltdown. The bailout indirectly probably did save my job. But it also saved the job's of the welders, the machinists, the accounts payable clerks, the janitors, and the sale people that work for everyone of my clients ... all of whom would have been faced with tough decisions had confidence not been restored in the system.

Bank Bailout vs. Meltdown of Civilization. While bailing out the bank's was evil in a sense, for me it was the much lesser evil of the two.
Meltdown Myth

For starters, Fuld should be facing criminal charges not facing a mirror with his millions, guilty conscious or not.

More importantly, there would not have been "a meltdown of modern civilization" had we closed the banks. Life would have gone on, just as it did after Lehman went to zero.

Had the banks gone under, but the deposits insured, life would be closer to normal right now. The bad debts would have been eliminated, the equity holders wiped out, and the banks could have been recapitalized and lending again.

Instead, banks are still saddled with bad loans, the Fed continues to act criminally to help banks hide those bad loans, taxpayers are on the hook for more toxic debts of banks, and taxpayers are also on the hook for "unlimited Fannie Mae losses".

Bring Out The Criminal Indictments

Pray tell, where is the action on this list?

April 29, 2010: Barofsky Threatens Criminal Charges in AIG Coverup, Goldman Sachs Abacus Deal, TARP Insider Trading; New York Fed Implicated

April 16, 2010: Rant of the Day: No Ethics, No Fiduciary Responsibility, No Separation of Duty; Complete Ethics Overhaul Needed

March 2, 2010: Geithner's Illegal Money-Laundering Scheme Exposed; Harry Markopolos Says "Don't Trust Your Government"

January 31, 2010: 77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP

January 28, 2010: Secret Deals Involving No One; AIG Coverup Conspiracy Unravels

January 26, 2010: Questions Geithner Cannot Escape

January 07, 2010: Time To Indict Geithner For Securities Fraud

October 20, 2009: Bernanke Guilty of Coercion and Market Manipulation

July 17, 2009: Paulson Admits Coercion; Where are the Indictments?

June 26, 2009: Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl"

April 24, 2009: Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis

Don't hold your breath waiting for any of those crooks to be prosecuted.

They are all considered saviors by the president, by Wall Street executives, by the largest banks, by the likes of Warren Buffett and Charles Munger, and all the other ingrates bailed out by the Fed and Congress.

Top Three Orwellian Comments Of All Times

  • An American major after the destruction of the Vietnamese Village Ben Tre: "It became necessary to destroy the village in order to save it."
  • Vice President Joe Biden: "We Have to Go Spend Money to Keep From Going Bankrupt."
  • President George W. Bush: "I've abandoned free-market principles to save the free-market system."

In contrast, I believe The Most Redeeming Feature of Capitalism is Failure.

Business as Usual

President Obama continues down the path of punishing the innocent and the middle class to protect the likes of Goldman Sachs, Warren Buffet, Charlie Munger, and numerous bank CEOs.

Sadly, this is precisely what one should expect when Goldman Sachs, Tim Geithner and the New York Fed, and economic economic illiterates including Fed Chairman Ben Bernanke, former Fed Chairman Alan Greenspan, White House economic adviser Larry Summers, and House Finance Chairman Barney Frank, set the economic policy for the country.

Meanwhile, Elizabeth Warren was Tossed a Bone and Appointed Geithner's Lapdog so don't expect any serious financial reform. With that, President Obama just effectively hung out the world's largest advertisement "Business as Usual".

Correction:
Typos corrected from "amoral" to "immoral"

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