vineri, 11 martie 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Preventing Link-Based Penalties - Whiteboard Friday

Posted: 10 Mar 2011 12:46 PM PST

Posted by Aaron Wheeler

 At the end of February, Google announced that it was updating its search algorithm to serve higher-quality results to searchers. The update has since been dubbed the "Farmer Update" due to the algorithm's new bias against what Google considers "sites which are low-value add for users, copy content from other websites or sites that are just not very useful." Translation: if you own www.how-to-rank-better-by-reading-these-articles-i-stole.com, things aren't going to be looking as peachy-keen as they may have been beforehand!

In this week's Whiteboard Friday, Rand shows how to avoid being penalized by Google for suspicious linkage and having your rankings slip or completely disapparate as a result. He uses the example from the SEOptimise blog of What Happens When You Build 10,00 Dodgy Links to a New Domain in 24 hours. Hint: if you do own the aforementioned domain, you may want to reconsider your users' needs - for at least a couple of reasons.

 

Video Transcription

Howdy, SEOmoz fans! Welcome to another edition of Whiteboard Friday. Today we're talking about preventing link-based penalties. So, a lot of you have likely experienced the kind of thing that I am talking about. Whether you are a consultant or you are in-house, you're working at an agency, or you're just kind of tuning on your own site, you've seen this problem of the temptation to build, buy, borrow, beg, steal lots of links that are questionable in quality and value.

I want to share with you a quick story before we get started here. The blog SEO Optimize wrote a great piece about an experience they had in building these types of links. They started with a traffic graph of what had happened with their site. They put the new site on the Web. It's a relatively new site. They were growing sort of slowly and steadily. The spikes were a little bit lower than the valleys every week. They were sort of growing and growing. Then they decide, you know what, why don't we buy/build 10,000 dodgy links. I love the British because they use much better -- hi, everyone in London -- they use much better language. So, they go to these dodgy neighborhoods, maybe the East End, that's where it's dodgy, right? They build some links. They built 10,000 of these links. That's a lot. I think I should put a "whoa" there. Spell whoa. So, they build 10,000 dodgy links in this period, and what happens to their Goggle traffic? Shoots up. Skyrockets. Look at that. Insane growth. They, in fact, more than 5Xd their Google traffic, at least according to the graph that I was looking at on their blog post. You can see that it actually stayed like that for a few weeks. Google clearly not catching these links. I love the description that the blog post has. What he says is, "Just as I was beginning to worry that Google couldn't recognize this kind of crap, pow." It just drops down. It dropped down to a level so low that it was below the prior level of traffic, and essentially all they were getting here is branded terms, so people literally searching for that website itself. They're not ranking for any of their old keywords. These links aren't just not helping them, they are actively hurting them and preventing them from ranking, and it has been going on like that.

The moral of the story is invest in low quality links and temporarily you may see some benefit, but for the long term it can be quite harmful. You might be thinking to yourself, wait a minute, if this is the profile of how Google operates, couldn't I just build 10,000 dodgy links to all my competitors? Let's back up in time and remember that this is a new site. This is a new domain. They are likely looking at the profile of this site and saying, "Hey, they haven't built up a reputable, important, powerful brand yet. So it is much more likely that links can hurt them dramatically than it is a site that's been around a little while." That being said, there's likely many of you, possibly some of you even watching this video, who have sites like this or have friends with sites like this, clients with sites like this, and so you are wondering how can I prevent this kind of potential if I have seen that they did acquire some dodgy links, I did maybe acquire some dodgy links, I am considering it, or I am worried that my client did, I am worried the previous SEO did -- remember the case study with JCPenney and losing all their rankings because of the ins and outs of how Google measured them. You might want to be thinking, boy, I am in this period right now, maybe I am in that grace area. How can I prevent this from happening to me?

The first thing that I want to ask you to do is to ask yourself why. Not why are you going to get penalized. Why do you deserve to be ranking number one? Why do you deserve to be in the top few sites for these particular queries? Is it that you have the best product out there? Do you have the most innovative UI, the most usable format for it? Do you have the highest quantity of information? Are your user reviews the best that they could be? Is it the fact that you have access to data that no one else has? There has to be a unique value proposition for any given business and that includes a web-based business model. If you don't have this, then, yeah, you're only option to get links, to get references, is to go to those dodgy neighborhoods because no one is going to organically want to link to you editorially and say, "I endorse and recommend this particular business."

Once you have answered that question, I need you to focus on content. Well, I don't need it. You need it. You need you to focus on content because content is where those links are going to come from. In the absence of a reason apart from money or manipulation or some type of a personal relationship, the only way to get good reference links, good editorial links on the Web is to be the best resource for that particular query. Being that resource means content. I don't just mean text. I mean everything. I mean images and video. I mean other forms of content like user generated material. I mean things like the interface that you're putting on it, the UI that surrounds it. I even mean things like the humans, the people in the real world that are associated with creating that content. Having the authority and the credibility that comes from a big name in your particular field, which could be a very small field and a very unknown person to most of the rest of us, still matters quite a bit.

The third thing that I would do is go look at the top link sources to brands. So, where a lot of SEOs get into trouble is that you go and you look at the links that are pointing to the people who are ranking number 1, number 2, number 3, maybe top 10. A lot of them might be in this neighborhood. They might be the type of people who have built links for the short term, and they are ranking in the short term and Google is eventually going to catch up with them, which is why I encourage you to go find the brands. Those particular sites/pages that have built up authority, not just in the search results through links but in the equity that is built through mindshare, through branding, through knowledge of that website, and those brands will often have references to them that come from very good places. If you look at their top links using Open Site Explorer, using something like the Link Intersect tool, if it is a local site you could use Ontolo Whitespark's Link Finder, which I think is a great tool as well, even doing searches like, if I do a search query, let's say that I see a brand like O'Neill who makes surfboards and surf equipment and that kind of stuff, right. So, I might do a search like, "Where is O'Neill - site: O'Neill.com?" What I am doing here when I am searching Google like this, is I say, "Show me all the places where this brand is mentioned that is not on their website." That will show you a bunch of places that are talking about that brand. Those types of mentions often lead to links, often lead to references, build that brand's equity, build that brand's awareness and knowledge. Those are probably really good places to get links.

Number four, finally, and this one might even be a priority depending on how nervous you are that this is about to happen. You want to clear out the worst links. This means digging into your link profile and identifying anything that looks especially manipulative. Sometimes those huge long lists of reciprocal link pages, where you're pointing to everybody else and they're all pointing to you, that might be a good thing to clear out. You might want to e-mail your link partners and say, "Hey guys, sorry, but I think Google might really jump on us about this. I need to get rid of those." You might want to go and dig through any link brokers or buyers that either you have engaged with or the client previously engaged with or who knows, whoever was working on the site before you engaged with, your evil alter ego fight club style Tyler Durden worked on. You know, a guy gets up in the middle of the night, never know what he's going to do. Finding those links. Clearing them out. Getting rid of the ones that you can. Don't panic. Bad links aren't always going to hurt you. Everyone on the Web has some bad link pointing to them. Scrapers. Back in college, I built some bad links when it was late at night. That happens to everyone. It's okay. But, if you can find the worst of those, you are going to prevent some of these penalties. If you can find those really good ones, you build up that profile that protects yourself from some of this negative stuff.

All right everyone. I hope you've enjoyed this edition of Whiteboard Friday and hope we'll see you again next week. Take care.

Video transcription by SpeechPad.com


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West Wing Week: "Law School in 15 Seconds"

The White House Your Daily Snapshot for
Friday, March 11,  2011
 

West Wing Week: "Law School in 15 Seconds"

West Wing Week is your guide to everything that's happening at 1600 Pennsylvania Avenue. This week, President Obama focused on education, visiting some innovative classrooms in Miami and Boston, and dropping in on a US History class in Alexandria, Virginia with Australian Prime Minister Julia Gillard.

Watch the video
 
West Wing Week

In Case You Missed It

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

Statement By The President On The Earthquake In Japan And The Resulting Tsunami Warning Throughout The Pacific

Building on the “Reset” – The Vice President’s Visit to Moscow
Vice President Biden delivers a powerful speech to U.S. and Russian students and business leaders, hailing the successful “reset” of U.S.-Russian relations and reiterating his call for broader economic cooperation between the two countries.

President Obama & the First Lady at the White House Conference on Bullying Prevention
The President and First Lady Michelle Obama discusses how we can all work together to end bullying as an accepted practice and create a safer environment for our kids to grow up in.

Women and Girls Around the World Celebrating International Women's Day
On March 8, 2011, Tina Tchen joined First Lady Michelle Obama and women from around the world to celebrate the 100th anniversary of International Women's Day.

Today's Schedule

All times are Eastern Standard Time (EST).

4:15 AM: The Vice President and Dr. Jill Biden arrive in Chisinau, Moldova

5:00 AM: The Vice President meets with Prime Minister Vladimir Filat

7:00 AM: The Vice President delivers a speech in Chisinau’s Opera Square

8:30 AM: The Vice President meets with Acting President Marian Lupu

9:30 AM: President's Export Council Meeting WhiteHouse.gov/live

9:45 AM: The President receives the Presidential Daily Briefing

10:15 AM: The President meets with senior advisors

10:15 AM: President's Management Advisory Council Meeting WhiteHouse.gov/live

11:15 AM: The President holds a news conference about rising energy prices among other issues WhiteHouse.gov/live

2:50 PM: The President and First Lady honor the 2009-10 Stanley Cup Champion Chicago Blackhawks in a ceremony WhiteHouse.gov/live

3:00 PM:  Meeting Commemorating National Women & Girls HIV/AIDS Awareness Day WhiteHouse.gov/live

3:45 PM: Let’s Move! Clinic with the NHL WhiteHouse.gov/live

WhiteHouse.gov/live  Indicates events that will be live streamed on White House.com/Live.

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SEOptimise

SEOptimise


What Does SEO Consist of?

Posted: 10 Mar 2011 05:59 AM PST

Ingredients*

Back in the day, SEO was quite a simple process consisting of three parts:

  1. Market and keyword research
  2. On-page optimisation
  3. Link building (off-page optimisation)

In 2011, it’s not that simple anymore. Depending on what niche or industry you are working in or rather what kind of site and business model you have, SEO can be a lot of things. SEO can or even has to consist of more disciplines.

Most importantly, local SEO/Google Places SEO or e-commerce SEO/Google Shopping SEO play a major role for many businesses today. Local businesses that also have an online shop need both.

On the other end of the SEO process there is landing page optimisation or conversion optimisation. An SEO process without it is not really complete.

That’s still not enough though, as without king content there is nothing to get linked to on your site or to rank for in Google, so a decent SEO process entails a content strategy. This might include:

  • blogging
  • infographics
  • videos.

To spread these you need social media outreach and participation, as content does not spread by itself without some traction on social media. So a typical SEO process might look something like this:

  1. Market and keyword research
  2. Local SEO/Google Places optimisation
  3. On-page optimisation
  4. E-commerce SEO/Google Shopping optimisation
  5. Content strategy (planning, creation, optimisation, promotion)
  6. Social media outreach & participation
  7. Landing page optimisation/Conversion optimisation
  8. Website analytics and monitoring

 

These steps have to be undertaken for more and more sites. Even sites that aren’t considered e-commerce often use check-out forms or shopping carts. Many businesses that are not local by definition also have real-life brick and mortar storefronts or offices. So Google Places and Google Shopping SEO is not rare either.

Even video SEO for YouTube and beyond is mainstream now. There is also mobile SEO to make sure your visitors can reach your site using their smartphones or tablets.

Already overwhelmed? You don’t need to be. You still can stick to the old SEO model and succeed to some extent, but you can gain even more by expanding your SEO strategy to include all of the above mentioned disciplines.

 

* Image by Ross Spoon.

© SEOptimise – Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. What Does SEO Consist of?

Related posts:

  1. What Kind of SEO Services Do you Really Need?
  2. Talent Growth
  3. 30 (New) SEO Terms You Have to Know in 2011

Seth's Blog : Unskilled labor

Unskilled labor

Perhaps it's time for a new definition.

Unskilled labor is what you call someone who merely has skills that most everyone else has.

If it's not scarce, why pay extra?

Skills matter. The unemployment rate for US workers without a college education is almost triple that for those with one. Even the college rate is still too high, though.  On the other hand, the unemployment rate for skilled neurosurgeons, talented database designers and motivated recombinant DNA biologists is essentially zero, despite the high pay in all three fields.

Unskilled now means not-specially skilled.

 
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joi, 10 martie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Bond Market Anticipates Greek Default; New Highs in Greek, Irish, Portuguese Bond Yields; Spain Downgraded on $21 Billion Bank Capitalization Concern

Posted: 10 Mar 2011 05:51 PM PST

I sit dazzled at the idea the ECB is going to hike three times smack in the face of a renewed sovereign debt crisis in Europe.

Greek, Portuguese, and Irish government bond yields are at fresh highs and Spanish government yields are flirting with new highs. Topping off recent action, Moody's downgraded Spanish government debt on bank capitalization concerns and the market once again anticipates a Greek default in spite of a $153 billion bailout.

Let's take a look at some of the stories making those headlines.

Bond Market Anticipates Greek Default

Bloomberg reports Bond Market Anticipates Greece Defaulting as EU Leaders Meet

Greek 10-year bond yields rose to a record this week and it costs more than ever to insure against a default, even though the nation received a 110 billion euro ($153 billion) bailout from the EU and the International Monetary Fund last year. Two- year yields exceed 10-year levels, suggesting a restructuring may come before the three-year aid program expires.

"The onus is on EU officials to dissuade the market from the notion that a debt restructuring is inevitable," said Robin Marshall, director of fixed-income at London-based Smith & Williamson Investment Management, which oversees $20 billion. "They've lost investor confidence in any resolution that doesn't involve some form of restructuring."

EU leaders gather today in Brussels, aiming to agree to a blueprint to improve competitiveness, a plan Germany demanded as a condition for expanding the bailout effort. Investors will also be looking for signs that differences over how to solve the debt crisis are narrowing ahead of a second meeting on March 24-25 that German Chancellor Angela Merkel has said will produce a comprehensive package of measures.

Greek securities plunged this week after Moody's Investors Service cut the nation's rating, already at junk, by an additional three levels, saying the probability of default had increased due to "implementation risks" in the budget cuts it is making as a condition of receiving aid.

Yields on the bonds of the euro region's most indebted nations have jumped in the last two months as Germany, Finland and Austria rebuffed calls from Greece and Ireland to lower the interest rates on rescue loans. Disagreements also persist over the remit of the 440 billion-euro European Financial Stability Facility, which provided loans to Ireland, including whether it should be allowed to buy euro-region government bonds.

Leaders will today debate a proposed pact that Merkel and her French counterpart Nicolas Sarkozy want as part of any reinforced plan to support cash-strapped nations. The bloc's economically weaker countries have criticized the plan as an attack on their sovereignty.

Portuguese 10-year bond yields reached 7.70 percent on March 9, the highest since at least 1997, when Bloomberg began collecting the data. On the same day, equivalent-maturity Italian yields climbed above 5 percent for the first time since November 2008, while Irish 10-year yields touched the most since February 1993.

"It doesn't seem like a solution or compromise is around the corner," said Orlando Green, assistant director of capital markets strategy at Credit Agricole SA in London. "We could see more spread widening if they are slow in coming up with a plan. It's not all priced in yet."
Spanish Banks Need to Plug $21 Billion Capital Hole

Please consider Spanish Banks Begin Search for Investors to Plug $21 Billion Capital Hole
Spanish banks that together need as much as 15.2 billion euros ($21 billion) to meet minimum capital levels now must persuade investors that their battered balance sheets offer the potential return to match the risk.

Bank of Spain's estimates of how much capital the banks need fully reflect losses hidden on balance sheets, putting the onus on them find investors quickly, said Inigo Lecubarri, a fund manager at Abaco Financials Fund in London.

"At this stage, I don't think anyone will be really convinced by anything," said Lecubarri, who helps manage about $200 million at Abaco. "People will only be convinced when someone credible comes and puts some money on the table to invest."
Spain Irate Over Debt Downgrade

Forbes reports Moody's Downgrades Spain's Credit Rating As Recapitalization Could Cost €50B

Spain saw its sovereign debt rating slashed by one notch to Aa2 on Tuesday, as Moody's, the credit rating agency, cited higher than expected recapitalization costs for the country's savings banks or cajas, and the central government's inability to enforce ambitious budget deficit targets, set at 1.3% of GDP throughout the 19 autonomous communities. Spanish officials were enraged, starting with finance Minister Elena Salgado, who disagreed with Moody's decision to release the figures hours ahead of the Bank of Spain's official estimates of restructuring costs.

The country's benchmark index, the IBEX 35, dropped 1.17% through the session, while Spanish government bond spreads over German bunds hit 225 basis points, as yields rose to 5.53%.

Moody's downgraded its rating on Spanish government bonds to the second highest notch on fears that the the cost of re capitalizing the country's many cajas would probably reach €40 to €50 billion (about $55 to $69 billion). That would be far more than the €20 billion ($28 billion)estimated by the office of President Jose Luis Rodriguez Zapatero and would substantially increase Spain's public debt ratio.

Spanish officials were infuriated that Moody's chose to release these numbers only hours ahead of the Bank of Spain's official estimates, which put banks and cajas' recapitalization needs at €15.2 billion (about $20.1 billion).
Expect Greece, Ireland Default

At a minimum, Greece and Ireland are going to default. Spain and Portugal are on deck.

ECB Rate hikes penciled in by the market will bring those defaults sooner rather than later. There is merit in defaults sooner because the quicker the defaults, the quicker the recovery. However, the ECB sure does not see it that way.

Thus, things in Europe are about to get interesting even though I rather doubt we see three hikes by the ECB by December.

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


State of Denial on Municipal Bonds; Are Munis the New Subprime?

Posted: 10 Mar 2011 10:06 AM PST

Municipal bonds show signs of trouble despite the stock market's rally says Jeffrey Gundlach, DoubleLine Capital CEO in a CNBC interview regarding the Muni Bond Market.
Bond king Jeff Gundlach likened municipal bonds to subprime mortgage bonds on CNBC's Strategy Session on Wednesday.

"You've got a history of low defaults, which is comforting. But that kind of sounds like what subprime sounded like back in 2006," Gundlach said.

Gundlach said the markets for subprime bonds and municipal bonds are similar because the buyers are similar. Muni bond buyers aren't seeking fundamentally good credit stories—they are buying for "technical reasons," Gundlach said. This is exactly what happened with subprime

With subprime bonds, buyers were seeking highly-rated credit with very low default histories in order to satisfy regulatory bank capital requirements. They largely ignored deteriorating fundamentals, and continued to buy subprime mortgage-backed securities at a rapid clip even when the problems with the market were becoming apparent in the first half of 2007.

Muni bonds are bought for a different "technical reason"—the tax benefit—and buyers are once again ignoring deteriorating fundamentals. So are munis going the way of subprime?

"If by that you mean, lower, then yes. If you mean crashing, I'm agnostic on that," he told David Faber.

Gundlach pointed out that even if defaults do not ultimately climb as high as critics like Meredith Whitney have warned, muni bonds will likely trade much lower.

"Between here and the end game, lies the valley. And the valley is full of fear. I think the muni market is going to go down by at least, on the long end, something like 15 and 20 percent," he said.




I like his rationale. It's not so much the volume of munis that may default, but rather the market's likely reaction when those defaults do happen.

It's a good interview. If you are interested in munis, please play it.

Better buying opportunities await those willing to sit in cash, not just in munis, but in equities, junk bonds, emerging markets, and commodities.

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


Pimco Dumps All Remaining Treasuries in Total Return Fund; Six Reasons to Fade Bill Gross

Posted: 10 Mar 2011 08:49 AM PST

Pimco's Bill Gross has been dumping US government debt in favor of other alternatives including emerging-market opportunities. Looking ahead, I think it's more likely to be a bullish setup for treasuries than not.

First, please consider the news.

Bloomberg reports Pimco's Gross Eliminates Government Debt From Total Return Fund
Bill Gross, who runs the world's biggest bond fund at Pacific Investment Management Co., eliminated government-related debt from his flagship fund last month as the U.S. projected record budget deficits.

Pimco's $237 billion Total Return Fund last held zero government-related debt in January 2009. Gross had cut the holdings to 12 percent of assets in January, according to the Newport Beach, California-based company's website. The fund's net cash-and-equivalent position surged from 5 percent to 23 percent in February, the highest since May 2008.

Yields on Treasuries may be too low to sustain demand for U.S. government debt as the Federal Reserve approaches the end of its second round of quantitative easing, Gross wrote in a monthly investment outlook posted on Pimco's website on March 2. Gross mentioned that Pimco may be a buyer of Treasuries if yields rise to attractive levels.

Treasury yields are about 150 basis points too low when viewed on a historical context and when compared with expected nominal gross domestic product growth of 5 percent, he wrote in the commentary. The Fed is scheduled to complete purchases of $600 billion of Treasuries in June.

Gross in his February commentary urged investors to reduce holdings of Treasuries and U.K. gilts and buy higher-returning securities such as debt from emerging-market nations. "Old- fashioned gilts and Treasury bonds may need to be 'exorcised' from model portfolios and replaced with more attractive alternatives both from a risk and a reward standpoint," Gross wrote.

Gross last month increased holdings of emerging-market debt to 10 percent, the highest since October, from 9 percent in January. He cut holdings of mortgage securities to 34 percent from 42 percent in January.
Six Reasons to Fade Pimco

I view this setup as favorable for US Government bonds. For starters there is no Pimco selling pressure, only potential buying pressure when Gross changes his mind.

Second, everyone seems to think the end of QE II will be the death of treasuries. While that could be the case, sentiment is so one-sided that I rather doubt it, especially is the global recovery stalls.

Third, the US dollar is towards the bottom of a broad range and any bounce could easily wipe out gains in higher yielding emerging-market debt.

Fourth, the global macro picture is weakening considerably with overheating in China, state government austerity measures in the US, and a renewed sovereign debt crisis in Europe on top of a supply shock in oil. Emerging markets are unlikely the place to be in such a setup.

Fifth, chasing yield means chasing risk, and that is on top of currency risk. Chasing risk is highly likely to fail again at some point, the only question is when.

Sixth, several interest rate hikes are priced in by the the ECB this year. Will all those hikes come? I rather doubt it, and if the ECB doesn't hike, look for the US dollar to rally, perhaps significantly.

Relative Value Traps

The alleged "relative value" of emerging markets may turn out to be nothing but an "absolute value" trap. Admittedly there is not much to like on a long-term basis about US treasuries either.

Should treasuries continue to sell off, it may very well be the case there are no hiding places at all, except for the universally despised US dollar.

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


Unexpected Trade Deficit in China; Chinese Importers Caught in a Squeeze; Global Macro Picture Weakens

Posted: 09 Mar 2011 11:38 PM PST

Equity futures are in the red across the board late Wednesday evening in light of an unexpected trade deficit in China.

Some reports suggest not reading too much into the deficit because February trade numbers are distorted following the Chinese Lunar New Year holiday. However, even the two-month total is negative, so the holiday excuse is a pretty weak one.

Please consider China Reports Unexpected Trade Deficit as Export Growth Cools
China reported an unexpected $7.3 billion trade deficit, the nation's biggest in seven years, in February after a Lunar New Year holiday disrupted exports.

Outbound shipments rose an annual 2.4 percent, the slowest pace since November 2009, and imports climbed 19.4 percent, according to a report on the customs bureau website today.

Yuan forwards weakened after the announcement, which may deflect international pressure for China to strengthen its currency to redress global economic imbalances. Commerce Minister Chen Deming said March 7 that it's "totally unreasonable" to say the yuan is undervalued after U.S. Treasury Secretary Timothy Geithner repeated calls for a faster pace of appreciation.

Economists combine Chinese data for the first two months of the year to eliminate distortions caused by the annual holiday. On that basis, the nation had a deficit of about $890 million, compared with a surplus of about $22 billion a year earlier.
Global Macro Picture Worsens

Two months do not a trend make, but a couple more would do it.

As a side note, people frequently write wondering why China does mot buy more commodities with its US dollar reserve. There are a several reasons, one of which should be obvious from the above article.

  1. China's manufacturers are already squeezed, unable to pass on rising import costs.
  2. Accumulating commodities is pro-cyclical. China is overheating already.
  3. Any commodities not bought directly from US suppliers (for example copper from Australia) increases trade distortions elsewhere.
  4. Thanks to loose economic policy globally, commodity speculation is running rampant already. No importers want to add fuel to that fire.

China is overheating, and the global macro picture, especially from a Chinese perspective is far worse than that.

The world may not have noticed yet, but Europe is in trouble. The PIIGS are imploding under austerity measures and the most of the rest of Europe except perhaps Germany does not look very good.

Europe is China's largest trading partner.

Factor in the situation in Libya, rising oil prices, an ECB that seems hell-bent on hiking rates (I bet they back off after at most one hike), state budgets under attack in the US (thankfully), and the whole idea that Chinese growth is going to save the world is Fantasyland material.

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