vineri, 17 iunie 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Scaling Link Building - Whiteboard Friday

Posted: 17 Jun 2011 03:31 AM PDT

Posted by Aaron Wheeler

 Link building can be the most tedious and time-consuming task of SEO. At least, that's how a lot of people feel about it. Ever want to know how to scale link building to avoid the pitfalls of wasted time and effort? This week, Tom Critchlow from Distilled interviews Ross Hudgens, an SEO currently working at Full Beaker in Bellevue, Washington, about some strategies you can use to scale your link building and get more links with less effort. Hiring people with hustle is a big part of it, but using APIs and outsourcing development can help too (though some aspects of linkbuilding simply are not outsourceable, as Tom and Ross explain). Do you have any strategies you use to scale your linkbuilding? Let us know in the comments below!

 

Video Transcription

Tom: Howdy, SEOmoz fans. Welcome to another edition of Whiteboard Friday. I am here today with Ross Hudgens, and we're going to talk a little bit about scaling link building. So we talk about link building all the time in SEO. It is obviously one of the most important parts of any SEO campaign, but there is this kind of divide between an individual, maybe it's a business owner, maybe it's an individual in-house SEO, and he has to figure out how to scale link building. The company is growing, you're doing a lot more stuff. How do you go from one individual to a team of people doing link building? We're going to talk through some of the challenges. Ross Hudgens, where are you at the moment? Let's talk a bit about your experience.

Ross: I currently work at Full Beaker in Bellevue, Washington, and basically, what I am doing is building out a multitude of websites in-house and a team to basically go from a few websites to a huge team of link builders, properties, etc. So, with that there are a lot of problems with hiring, scaling link building, making it cost efficient, etc.

Tom: Sure. I have come up against challenges with hiring link builders all the time.

Ross: Right.

Tom: It's a very unique blend of skills, I think.

Ross: Yeah.

Tom: I'd love to get your take on it. But some of the things that we look for when we're hiring link builders at Distilled is kind of this weird mix of understanding the Internet, so it's kind of you need to understand what Twitter is, what a blog is, how social networks work, all that kind of stuff. But you don't necessarily need to understand all that much about SEO, per se. Right?

Ross: Yeah, definitely.

Tom: You can teach somebody easily what anchor text is.

Ross: Right. It's interesting in general, like in my experience if you don't have a huge website or brand to leverage off of, you're almost better off saying you want to hire an internet marketing specialist rather than SEO, because no one really knows what SEO is or they're going to fake it, maybe.

Tom: Absolutely.

Ross: But there is also a good part, if you have a big personal brand, or like Distilled, you guys have the power of being this recognizable figure, so you can say, "We're hiring," on Twitter and you can find those people that are inexperienced but still have a modicum of knowledge that they are probably going to be great link builders for you guys.

Tom: Absolutely. I have actually found some of the best kind of people we have hired that are good at link building are just guys that hustle. Right? So there is this concept I think you talked about on your blog. We've talked it before. It's this idea that one of the most effective, actually across any SEO discipline, but particularly about link building, is just this idea of hiring people who know how to get stuff done. Right.? It is the kind of person who they send an email to somebody saying, "Hey, can you check out this content we've created?" They get an email back saying no, and they just don't take that for answer.  Like you see this in Justin. Justin does this all the time.

Ross: Yeah, Justin is great at that. Definitely.

Tom: Yeah. He has this attitude of kind of approaching a problem, and this would be like sales. You get a no, but at least you have replied to me.

Ross: Right.

Tom: I know you're alive. Right?

Ross: Definitely. So what's interesting to me about that is how do you measure that upfront? Do you just have this sixth sense when you're hiring someone that they have that pure hustle?

Tom: Actually, what we find the easiest thing is just go ahead and ask for it. Right? Go ahead and ask.

Ross: Right.

Tom: Say when was a time when you went and did something where no one had told you to do it, it wasn't like on your job spec, but you just figured out a problem, identified it, and then gone and done it, like taken ownership of the problem. You'll find that these people stick out like a sore thumb. You ask this question and some people will be like, "I don't know. I cleaned the photocopier once." And you ask some people and they're like, "Oh, yeah, in my part-time, I organized a conference," and it's like oh. It's like just those people you get a sense for being able to get stuff done.

Ross: A good citation of that kind of event. Right.

Tom: Absolutely. Then so to come back to something I was saying earlier, we find it really good to hire people who are kind of popular online.

Ross: Okay.

Tom: Like, if somebody has like 500 Facebook friends, that's usually a good indication they understand the Internet quite well.

Ross: Right, that's true.

Tom: They understand the psychologically of attention, which I think is important for link building. So it's not necessarily kind of, like, they're not a celebrity necessarily. It's not like they'd have hundreds of thousands of Twitter followers.

Ross: Right. But they've built up some kind of rapport and they know what's going on, clearly.

Tom: Absolutely. Yeah, and they're clearly like communicating with people. They are clearly comfortable spending a lot of time online, because at the end of the day, that's what is going to happen.

Ross: Right. Yeah, because it's the healthy balance, because you're probably going to be hiring someone at the beginning stages when you are building out these teams. So it takes these little tiny bits about them to make sure they can be that Justin Briggs or that other great link builder for Distilled or any team. Right?

Tom: Absolutely. These people with personal social networks are often great assets, because you say, "Oh, I need to get some links for this gardening shed website." They'll be like, "Oh wait, I've got a buddy who is crazy about garden sheds." Just let me send him a Facebook message. Then the next thing you know, you've got a guest post or link or whatever. So it's kind of interesting this mix of skills that you need.

Ross: Yeah, definitely.

Tom: But I think, if I could sum it up, I think hustle is super important, and I think kind of just getting the ins and outs, even if it is not SEO, just getting like how stuff works online is really important. So let's move on, because we've got other stuff to cover.

Ross: Sure.

Tom: Let's imagine that we've hired a few link builders into our team.

Ross: Okay.

Tom: How do you go about training link builders? This is an interesting question.

Ross: Right. So one of my problems has been at first I would go and try and drop all my knowledge like a waterfall on the link builder, and that never works out. I will say look at this, this, this. The better thing to do is give them a few things to look at, and then constantly have them go out, find links, say we should target this website, we should target that website, and then give them feedback on a case by case basis and keep that going for a long time until it becomes this evolution where clearly they are progressing in their knowledge. They know how to value a link appropriately. Then you can let them go to be able to pick links and do that link building themselves, without your guidance basically.

Tom: Okay. That sounds like it takes a lot of time.

Ross: Right.

Tom: Talk me through kind of how much time you reckon that takes to kind of train somebody up. Do you micromanage? I'm curious like if the . . .

Ross: No, not at all. It's more of just, yeah, at the beginning stages, hopefully, that's why I definitely look for someone that's a 1A when I am hiring a team,

Tom: Yeah.

Ross: It's never I want to hire just an intern up front. Like, sometimes there is going to be that bigger cost of that first SEO. Ideally, a lot of SEO teams are built on interns and stuff like that, because it's low cost for efficiency. But if you bring in a 1A that you can trust, and definitely, yes, it is time intensive at first, but I find you want them to have all the skills, and it is worth it upfront to sometimes . . . .

Tom: You mentioned this kind of concept of valuing a link.

Ross: Right.

Tom: So that's some kind of a test they have to pass. It's like, can this guy value a link properly or not? Talk me through how you might evaluate that.

Ross: One way, good way to do things is like we'll get a giant link list of emails or just of URLs. We'll say, just sent general link begging emails to these people. You can tell just based on who they email and etc. whether they can tell . . . one part is the weight of the link, how much power is it going to pass. Another part is are they going to link to us? So that's an important dichotomy that they have to interrelate.

Tom: Okay.

Ross: So going through that process, looking through all those websites, it gives you a gauge of do they have the knowledge to determine what's a good link, what's spammy, what's super strong, will never link to us. Through that process of looking at tons of websites and they'll send you links, or you can just see their email gathering list, and you'll say, this is bad, this is bad, this is bad, XY why that is, etc.

Tom: Yeah. Well, that's really interesting. I think more generally like I've done a lot of SEO training. Kind of all kinds. I think the one thing that is universal across any kind of training is that feedback loop that you mentioned. Even if it is just for a very small subset of the kind of work they've been doing. So let's say they've done like ten campaigns or ten reports or whatever, just focus down on one or two and just go through them in real detail. I think giving that feedback on every report, so this is okay, but you could have done it like this. . . .

Ross: Right.

Tom: Or why did you do it this way? Couldn't you have done it a better way this way?

Ross: Yeah, exactly.

Tom: Or wouldn't it have been quicker to do it this way? I find that just that small bit of feedback, that's how people learn. When people say that you learn by doing, it's true to a certain extent. But it's almost like self-teaching, learning by doing, because you have to learn your own mistakes and do it the hard way. But if you have somebody else to go over the stuff with you, that's much more effective.

Ross: Yeah, definitely.

Tom: So, I think that's really important.

Ross: One good management tactic I have used in the past is when you're explaining something to someone, you say at the end, "What do you think?" Like, "Does that make sense?"

Tom: Yeah.

Ross: So you want that positive feedback. Let them reiterate what you just said back to them, because sometimes there can be this curse of knowledge that you think they know everything you know, they are going to great it easily. That's not the case. So you have them quickly reiterate at the end of every little explanation. What do you think? It's a good way to make sure that they actually have takeaways from these kinds of things.

Tom: Yeah, absolutely. I have actually found something very similar, which is if somebody comes to you with a problem, don't necessarily solve it straightaway. Even if you know the answer, I find it useful sometimes to say, "Well, what do you think might be the right answer?" I get them to think it through a little bit, and then it's like you kind of lead them in the right direction. But that makes them understand it a lot better. It's almost the difference between reading a page of notes or writing your own page of notes. It's like if you write, if you physically go through all the steps, you're going to remember it and take it in much better.

Ross: Yeah. It's like looking at all the answers in the back of the book, basically. Right?

Tom: Exactly, yeah.

Ross: No one ever learns anything from that really. No.

Tom: No. I mean, you pass the test.

Ross: Right. You should get more points for just working on it, rather than looking at the odd answers. Right? So yeah.

Tom: Absolutely. So let's move on because we're short on time. But efficiency and cost control. So I think this is a really interesting problem to kind of solve. We talk in SEO a lot about raw SEO, but we never talk about the business side of it. If you have a team of link builders, somebody is paying for those people. Somebody is paying their salaries. At the end of the day that's measured against some kind of cost, some kind of revenues coming in. What are the kind of things that we can do to improve efficiency and cost control?

Ross: One thing I think is building the value of your business. I know for Distilled you guys do a great job of this. You're a big brand name. So you can bring in people and based on the recognition of working with you or another big brand if it's in eBay, Amazon, etc., they can command a lower salary. They can build out a bigger team based on people want to work for that company whether or not they're paid a lot and because it gives them a lot of benefit. It's not like you're ripping them off or anything. It is because you have a lot of value to offer them, and it is going to save you money as well. So that building up your personal brand, your business' brand, is a great way to save money in the long run, rather than being under the radar because it is hard to get good people.

Tom: Absolutely.

Ross: It is hard to get cost efficient people.

Tom: There are some really cheap perks that you can offer as well. It's like we run conferences. So sending our staff to conferences is very cheap for us.

Ross: Right.

Tom: But it has big value to the employees.

Ross: Yeah, definitely.

Tom: I hope there are no Distilled employees listening, You didn't hear that. We love you guys.

Ross: So there are other things like some people like outsourcing stuff to India, etc., using Mechanical Turk, those kinds of things.

Tom: Does that work for you? Have you tried that?

Ross: For gathering emails, it's okay.

Tom: Okay.

Ross: I have actually heard people have used developing. I haven't actually done that myself yet. But it is something that is interesting having developers actually work for you in India or abroad. I don't' know. Have you tried that before?

Tom: Not outsourcing development per se. We do outsource a lot of content creation at Distilled, so we have a kind of a network of very trusted freelance writers. So it is not like we are outsourcing it to India or anything. We typically have met them. We typically have actually worked directly with them in the past. But those people are almost employees, I guess, but on a contract basis. That allows our consultants to not spend time actually writing content too much.

Ross: Right. It's definitely time intensive.

Tom: Absolutely. Writers are good at it. That's their job.

Ross: Right. Yeah, exactly.

Tom: You can't necessarily expect SEOs to know how to create content just because they know SEO.

Ross: Right. Yeah, exactly. Everyone has their dynamic skill set.

Tom: Absolutely. So those are two of the ways that we have approached efficiency is outsourcing the bits that you can outsource. Content creation is something that we found can work okay, as long as it's to good people. We haven't found outsourcing outreach.

Ross: Okay.

Tom: I think that never works. Like, outreach is just such a creative . . .

Ross: Yeah, it's too creative. Right.

Tom: You need to keep tight control on it. You look at someone like Justin doing outreach. You can't outsource that.

Ross: Yeah, exactly. You can't put hustle and get someone on Mechanical Turk to hustle for you.

Tom: Exactly, yeah. There is a great phrase we use within Distilled, where we say, "You can't outsource giving a shit."

Ross: Yeah, that's true.

Tom: Which is true. When you are in-house or in an agency, it's like you really want to succeed. You want to build up. But when you try to outsource it, it is a paycheck.

Ross: Exactly. You're connected to that brand, that job, that business. It's part of you. It's a paycheck they're trying to make.

Tom: So that's one of the ways that we've done efficiency and cost control. The other way is kind of processes. So trying to build internal tools that save time. So, for example, we built a tool internally that does a whole bunch, like a bulk lookup on the SEOmoz API. So if you've got a list of 200 URLs, you can plug them into the spreadsheet and get all the metrics back straightaway. So it's like that kind of thing can just incrementally save all your guys time.

Ross: Right.

Tom: It's like you think about how many times you have to query, go into Open Site Explorer and stuff.

Ross: Oh, it's huge.

Tom: You can just save time doing that.

Ross: Yeah, for sure.

Tom: So little things like that, and then there's a whole bunch of other tools, like keyword research and all that kind of stuff.

Ross: Right. Building that proprietary. I mean, keeping your ear to the floor too. There are a lot of people doing great things in the tool world. Obviously SEOmoz, Raven, all these people put out great things that dramatically cut time for people, and if you're not taking advantage of them, you're wasting money and time and scalability.

Tom: Absolutely. Yeah. There's a great app that Justin mentioned as well, called Tout app that helps you kind of scale your link building. It allows you to send emails to people right within your browser. You click a little JavaScript bookmarker, and then you can suddenly email them right within the app, which is pretty cool.

Ross: Yeah, that is cool.

Tom: I'll link to it in the blog post. Cool. So we have kind of gone through this idea. You've hired some link builders, you're trained them up. We've looked at cost control and making them efficient. But hiring, like scaling people isn't the only way of scaling link building.

Ross: Right.

Tom: What are some of the other ways we can scale link building?

Ross: One thing is you're going to start as a link builder. You're going to have likely no network at all. Over time, you're going to develop a long list of people who have linked to you. One thing I like to do - I call it the black book for SEOs - is just put in all the contacts, what the vertical was, who you emailed it from, etc., and you have this laundry list of people that you developed relationships with, what vertical it is, what asset you used to get that link. You can reflect back on that and that can develop to be a massive list over time, and that can save you a lot of time for sure.

Tom: Yeah, absolutely. At heart, link building is about relationships. So, don't just start a list of links, start a list of relationships. We do exactly the same thing at Distilled.

Ross: Yeah, it's huge definitely.

Tom: Then some of the other ways I think you can scale this are by trying to actually develop partnerships with people. So it's like, for example, we've written some guest blogs for media publications and online magazines and online newspapers, those kinds of things. They're time intensive. They're hard to get. They give you a great link at the end of it. But then you can actually scale it up and take them out for lunch or take them out for coffee and be like, "Hey, we have a whole bunch of content we can create. We can save you a whole bunch of time. Why don't we write a guest column? Or why don't we get featured weekly in some kind of feature or something?" Trying to kind of entrench that relationship. Kind of go from that kind of one-off relationship of one piece of content to we're sending something every week or we'll help you out any time you need some data or whatever it might be.

Ross: Right.

Tom: You can scale that up, not in a way of scaling more people that you know, but scaling the benefit you get from that one relationship is a great way of doing it.

Ross: Yeah. That definitely makes sense. I think in general and expounding upon the relationship thing is the problem with that general link list is that they're in a lot of niches that can only help you with one website. Maybe you will never get back to it for five year. But if you find those super high quality, maybe general newspaper type contacts, etc., in the media, those can be diversified, use them in a lot of different websites in a different way if you are creative and use that relationship intelligently. So that sounds like exactly what you guys are doing.

Tom: Absolutely, yeah. There are a whole bunch of other ways you can do it as well. We're kind of developing these partnerships, almost link building at a kind of business-to-business level almost. It can be really valuable. We've worked with some companies where you develop a widget, and then you give that widget to a partner website and suddenly it is on every page of their site. Not always necessarily a good thing.

Ross: Yeah.

Tom: But you start to scale up the kind of benefit you are getting from that stuff.

Ross: Right, definitely.

Tom: That can really help. Some of the stuff you can do in return is sometimes pretty easy for you. Like SEOmoz, for example, I know we've developed a few partnerships where they get benefit back, whether it is driving conversions or whether it is driving links, and in return give away like either cheap or free access to their API. That doesn't cost them anything too much. It costs them in their back-end resources.
But that kind of thing is a great way of using the assets you have as a company rather than as an individual to leverage that kind of business-to-business relationship.

Ross: Right. Yeah. You could do it from the personal side as well. Your SEO skills are so valuable, rarely does a contact you are going to make have that SEO skill and everyone, SEO is growing, there is more and more investment in it. So people are looking for that and definitely if you have high level SEO skill and a lot of people are going to charge into the five digits for a side audit, maybe more sometimes, when you can just give free advice, they'll love you for that and favors will come back in droves basically.

Tom: I am a huge fan of that kind of karma.

Ross: Yeah.

Tom: Do something nice for somebody when you're not asking for anything in return, but that will come back to you in time. You see Rand. Right? Rand is like the most giving person you have ever met.

Ross: Right. Yeah.

Tom: Anyone can email him. Sorry, Rand, you're going to get all kinds of email now.

Ross: A lot of apologies here.

Tom: People grab him at conferences. People grab him in the SEOmoz comments. Randall always takes time to help people, be kind to people. Then you see that come back. It's like Rand can pick up the phone and be like, oh hey, whether it is an entrepreneur or a business owner or a VC or somebody from the SEOmoz community. It's like, "Oh hey, I was wondering if I could do this, or if you could do me a favor."

Ross: Right.

Tom: That stuff just comes around.

Ross: It's easy. Right. Yeah.

Tom: It's a nice thing to do as well.

Ross: Yeah, definitely.

Tom: For a nice person.

Ross: Yeah, exactly. I agree with you totally.

Tom: Hopefully that was some interesting tips on how to scale link building. It is a difficult challenge. I'd love to know what you guys think in the comments. Let us know any tips you have for scaling teams or anything we missed. So thank you very much, Ross, for coming on.

Ross: Thank you, Tom.

Tom: Talk to you soon.

Video transcription by Speechpad.com


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Use Hazel and Dropbox and Never Lose Another Presentation Graywolf's SEO Blog

Use Hazel and Dropbox and Never Lose Another Presentation Graywolf's SEO Blog


Use Hazel and Dropbox and Never Lose Another Presentation

Posted: 16 Jun 2011 09:49 AM PDT

Post image for Use Hazel and Dropbox and Never Lose Another Presentation

Anyone who travels and speaks at conferences on a regular basis has, at one point or another, forgotten or lost a presentation. If you use a Mac and Dropbox, I’m going to show you how to prevent that from happening.

For me, Dropbox is one of those essential cloud computing tools that makes getting things done easier…
First, you are going to need a Dropbox account if you don’t already have one (see my Dropbox Review post). Having and using a Dropbox account solves so many problems that it’s almost indispensable. The fact that it syncs files and folders across your smart phone, iPad, tablet, laptop, desktop computer, and server is nothing short of amazing. Once you have Dropbox in place, set up a folder for presentations (I named mine “presentations”–I’m all about keeping it simple stupid).

Next, you are going to need a program called Hazel from Noodlesoft. Hazel lets you establish a set of rules to run in the background while you do your regular computing thing. The benefit of Hazel is you can have it set up to do maintenance you don’t want to do. But more on that later.

I do most of my presentations in the cloud using Google Docs. When my presentations are done, usually weeks before the conference (wink), I export the Powerpoint file to my “downloads” folder on my laptop. You want to set up a rule in Hazel to automagically move every Powerpoint file type from the downloads folder to the dropbox presentation folder. Below are the step by step screen shots of how to set up this rule:

 

s
  • Add the “downloads” folder to the list of folders that Hazel monitors by clicking the “+” in the lower left of the Hazel dialog window and selecting the “downloads” folder.
  • Create a new rule by clicking the “+” in the middle of the Hazel dialog window.
  • Name the rule.
  • Tell it to look for files with the “ppt” field extension and move them to the “presentations” folder.

This creates a huge advantage that allows me to review, practice, and even make last minute edits to my presentation from my iPad (or even my smartphone if I wanted to) and then email myself or a friend the latest version to transfer to a USB key. Here’s a conference tip: have a dedicated USB key in your travel bag so you always have a backup.

Imagine some other advantages.  Immediately after your presentation, you could be talking with someone who would like a copy of your work.  You can whip out your iPhone, open the dropbox, select and open the file, and email them a copy right on the spot. Handling tasks like this as they come up is one of the core elements of productivity and having a zero inbox.

Hazel has lots of other functions as well. I use it to automatically move stock photos I download to “stockphotos” folder on my computer and eventually onto the fileserver. I set up a rule for files downloaded from certain sites like Shutterstock and Photospin that moves them into a specified folder.

Hazel Rule to move stock photos to specific folder

I like to keep my computer desktop clean, without the clutter of files or folders.

Clean desktop no files or folders in sight

Things that I am working on temporarily live in the downloads folder. However, if left unchecked, the downloads folder would quickly become an unusable mess, so I set up a rule to purge files older than 30 days.

For me, Dropbox is one of those essential cloud computing tools that makes getting things done easier. Adding Hazel into the mix automates some of the grunt work and makes life easier. If you’re looking to work smart and not hard, give Dropbox and Hazel a try.

To be clear, if you sign up for Dropbox through my website, I do earn additional free storage space. However, to be honest, I am a customer and use Dropbox on a near daily basis, so I’m comfortable recommending the product. I hope that, through these tutorials, you get more value out of using these tools yourself. If you would like to give Dropbox a try, there is a free 2GB account.

photo credit: Shutterstock, Photospin, Creative Commons LicenseFlickrname

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Use Hazel and Dropbox and Never Lose Another Presentation

West Wing Week: "Where the Future Will Be Won"

The White House Your Daily Snapshot for
Friday, June 17, 2011
 

West Wing Week: "Where the Future Will Be Won" 

Welcome to the West Wing Week, your guide to everything that's happening at 1600 Pennsylvania Ave. This week, walk step-by-step with the President as he meets with his Jobs Council in North Carolina to discuss ideas that will accelerate job growth and improve America's competitiveness, tours a manufacturer of energy efficient lighting, travels to Puerto Rico, and more. 

Watch the video 

  

In Case You Missed It

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

Reaffirming Commitment to Partnership Between the U.S. and Mongolia
President Obama and President Elbegdorj discuss steps to expand diplomatic, economic and defense cooperation between our two nations. 

Partnership for Sustainable Communities Marks Two Trailblazing Years
The Partnership for Sustainable Communities, a collaboration between the Department of Housing and Urban Development, the Department of Transportation, and the Environmental Protection Agency works to revitalize neighborhoods with convenient, affordable transit and clean energy.

Video: Follow the First Lady's Trip to Africa
Before departing for South Africa and Botswana to meet with young people, First Lady Michelle Obama records a video message encouraging young people to follow the trip and join the conversation. 


Today's Schedule 

All times are Eastern Daylight Time (EDT).

8:50 AM: The Vice President conducts a radio interview for the Tom Joyner Morning Show

12:00 PM: The President and the Vice President meet for lunch

1:30 PM: Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

1:30 PM: The President visits the Walter Reed Army Medical Center

3:30 PM: The President meets with the Treasury Secretary Geithner

4:45 PM: The President greets young elected leaders at the White House


WhiteHouse.gov/live Indicates events that will be live streamed on WhiteHouse.Gov/Live

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Seth's Blog : Who pays for the news media?

Who pays for the news media?

It's easy to act as though the news media is something that is done to us. Some alien force, projected onto all of us, pushed out by them.

Of course, that's not true. It's something we buy, something we pay for.

We're paying for superficial analyses, talking points, shouting heads, *****gate of the moment, herd journalism and silly local urgencies instead of important international trends. We're paying for fast instead of good. We believe we're paying for hard questions being asked, but we're not getting what we're paying for.

We might pay with a dollar at the newsstand, but we're probably paying with our attention, with attention that is turned into ad sales.

Too often, we fail to stop and say, "Wait, I paid for that?"

Almost everything else we buy is of far higher quality than it was twenty years ago. The worst car you could buy then was a Yugo... clearly we've raised the bar at the bottom. Is the same thing true of your news?

As the number of outlets and channels has exploded, media companies have faced a choice. Some have chosen to race to the bottom, to pander to the largest available common denominator and turn a trust into a profit center. A few have chosen to race to the top and to create a product actually worth paying for.

I fear that the race to the bottom will continue, but it's hard to see how anyone could be happy winning it.

Their civic obligations aside, it's up to us to decide what to buy.

 

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joi, 16 iunie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Consumer Spending Growth In China Fades; Spending a Mere 34% of GDP; Can China Fail Like Japan?

Posted: 16 Jun 2011 11:24 PM PDT

China and the US both desperately want consumer spending to grow. Instead, the Chinese economy has grown even more unbalanced.

China is increasingly reliant on fixed investment, yet there are few economically viable projects. Worse yet, China is in the midst of gigantic property bubbles that will soon pop.

Please consider Consumer Spending Fades in China Economy
At the Haiyang Zhuangshi Co. hardware store in Beijing, sales of paint and aluminum window frames are slowing, one sign of a diminished role for consumer spending in China that's foiling government objectives.

"It seems the peak days are gone," said owner Hu Mengbin, 42, whose daily revenue has dropped to about 3,000 yuan ($463) from as much as 4,000 yuan last year after China stepped up efforts to rein in home prices. "Between 2006 and 2008 when the property market was red hot, we could make quick money."

Hu's loss underlines the dilemma for Premier Wen Jiabao: his campaign to control inflation is undermining attempts to make consumers a bigger driver of the world's second-largest economy. Failure to lessen dependence on exports and investment spending leaves the nation more vulnerable to swings in external demand and subject to asset booms and busts.

Government data this week showed retail sales growth slowed to 16.9 percent in May, less than the average of the past five years and a figure that's inflated by soaring prices for food. By contrast, spending on fixed assets such as factories and property climbed 26 percent, excluding rural households, in the first five months, the fastest pace in almost a year.

Analysts at Capital Economics, a London-based research group, estimate that private consumption may have fallen to 34 percent of gross domestic product last year, the lowest level since China began opening its economy to market mechanisms more than three decades ago. Just 10 years ago, the share was 46 percent, Capital Economics calculates.

"Just at a time when the government in China and a lot of people elsewhere are hoping to see Chinese consumers step up to the plate, actually they've been staying away from shops," said Mark Williams, an economist in London with Capital Economics and a former adviser on China to the U.K. Treasury. "The trend over the past couple of years has been relentlessly downward."

Consumption would have to grow three percentage points faster than GDP to reach 40 percent of the economy within five years, according to Michael Pettis, a finance professor at Peking University in Beijing.

"We would need the highest consumption growth ever recorded," Pettis said. "In the short term we're not going to see a lot of change."

Beijing store owner Hu isn't expecting any quick turnaround either. "Making money is getting harder this year," he said as he stood in his 20-square-meter shop. "Business is slack."
China Can Fail Like Japan

Please consider How China could yet fail like Japan by Martin Wolf
Until 1990, Japan was the most successful large economy in the world. Almost nobody predicted what would happen to it in the succeeding decades. Today, people are yet more in awe of the achievements of China. Is it conceivable that this colossus could learn that spectacular success is a precursor of surprising failure? The answer is: yes.

Premier Wen Jiabao has himself described the economy as "unstable, unbalanced, unco-ordinated and ultimately unsustainable". The nature of the challenge was made evident to me during discussions of the 12th five year plan at the China Development Forum 2011 in Beijing in March. This new plan calls for a sharp change in the pace and structure of economic growth. In particular, growth is forecast to decline to just 7 per cent a year. More important, the economy is expected to rebalance from investment, towards consumption and, partly as a result, from manufacturing towards services.

The question is whether these shifts can be managed smoothly. Michael Pettis of Peking University's Guanghua School of Management has argued that they cannot be. His argument rests on the view that in the investment-led growth model, repression of household incomes plays a central role by subsidising that investment. Removing that repression – a necessary condition for faster growth of consumption – risks causing a sharp slowdown in output and a still bigger slowdown in investment. Growth is driven as much by subsidised expansion of capacity as by the profitable matching of supply to final demand. This will end with a bump.

Investment has indeed grown far faster than GDP. From 2000 to 2010, growth of gross fixed investment averaged 13.3 per cent, while growth of private consumption averaged 7.8 per cent. Over the same period the share of private consumption in GDP collapsed from 46 per cent to a mere 34 per cent, while the share of fixed investment rose from 34 per cent to 46 per cent.

If this pattern of growth is to reverse, as the government wishes, the growth of investment must fall well below that of GDP. This is what happened in Japan in the 1990s, with dire results. The thesis advanced by Prof Pettis is that a forced investment strategy will normally end with such a bump. The question is when.
That is an excellent article by Martin Wolf. Inquiring minds will want to take a closer look.

Bearish on China

Fixed investment in China is going to collapse at some point. When it does, it will take China's massive property bubble with it. Losses at Chinese banks will be staggering.

The ripple effect will hit commodity prices which in turn will hit Australia and Canada.

Expect more unrest.

Interestingly, China is in the midst of a surge in unrest already. Please see Wave of Violent Protests, Rioting, Bombings Hits China; Expect More Riots When China's Credit Bubble Pops, Exposing Mountains of Fraud for details.

I see no reason to be bullish on China or the Yuan either.

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


IMF "Ready and Willing" to Throw Away More Money; 10 Point Summary of Sorry State of Affairs; Market Repeatedly Calls Foolish Bluffs by IMF, ECB

Posted: 16 Jun 2011 11:43 AM PDT

Inquiring minds are making note of the current state of affairs in Greece. Here is a quick 10-point synopsis.

Current Sorry State of Greek Affairs

  1. Greece did not meet the IMF's criteria for more aid
  2. The Greek government is collapsing
  3. The Greek prime minister threatened to resign
  4. An emergence meeting of the Greek Parliament could not gather support for more austerity measures
  5. An emergency meeting of EU ministers produced "no results". The EU has no consensus about what to do
  6. Two-year interest rates in Greece topped 30%
  7. Germany wants bond holders to take a haircut, France does not
  8. Greek unions are on strike
  9. Riots and violence have escalated
  10. Credit default swaps are pricing in an 80% chance of default

Logic Useless

Logic would dictate that given the current sorry state of affairs in Greece that the IMF would not be willing to lend Greece more money. Indeed point number 1 alone would seem to be sufficient to settle the hash.

However, once must not attempt to apply logic to decisions made by the IMF, by ECB president Jean-Claude Trichet, or by Euro-Zone officials in general.

IMF 'Ready to Continue Support' for Greece

Please consider IMF 'Ready to Continue Support' for Greece
"We stand ready to continue our support for Greece subject to adoption of the economic policy reforms agreed with the Greek authorities," Caroline Atkinson, the director of IMF external relations, said in an e-mailed statement today.

"Progress is being made in the discussions to ensure the full financing of the program, and we anticipate a positive outcome on this at the next Eurogroup meeting," she said.
Progress? What Progress?

Progress is being made? What progress? Where? Will the Greek government go along or has the Greek government had enough of these austerity measures?

Caroline Atkinson also said that the IMF board will still have to approve the "conclusions of the pending program review."

There is nothing to approve. The papers are signed, stamped, and sealed already. The only open question, and it's a major one, is "Will Greece Go Along?"

Logic Cannot Be Used on Pathological Liars

Attempts to apply logic to what pathological liars say is useless. How can you possibly believe that known liars will do what they say?

"When it becomes serious, you have to lie," said Jean-Claude Juncker, chairman of the regular meetings of eurozone finance ministers. The IMF, the ECB, and the Fed are the same.

To get things correct you cannot believe a thing pathological liars at the IMF, ECB, and Fed say. Instead, simply bet they will kick the can down the road until the market kicks it back in their faces, smashing some teeth in the process. Brute force and a lick in the teeth by the market is the only thing liars react to. Even then, it takes multiple kicks before they get the message.

In regards to politicians, in many instances they are kicked out of office, never understanding the message at all.

Market Repeatedly Calls Foolish Bluffs by IMF, ECB

Recall that Trichet loaded up the ECB's balance sheet with garbage from Greece and Ireland. Trichet thought that bluff would lead the markets to accept his idea that Greece would not default. His move stabilized bonds for about 2 weeks. Then the market kicked that can back in Trichet's face, bruising his forehead, but unfortunately leaving his arrogance intact.

More recently, ECB executive board member Juergen Stark threatened the "nuclear" option of refusing to accept Greek debt as collateral if there was a restructuring of Greek debt. This was a foolish bluff that was supposed to bring the market into line.

Instead, yields and CDS shot up and continued higher. In simple terms the market kicked that can back into the ECB's face.

The bluff was not remotely believable. The ECB would trash its own balance sheet if it did what Stark suggested. Moreover, it would also destroy the balance sheets of French banks who are the primary bag-holders of Greek garbage.

Solid Kick in the Teeth in Progress

A solid kick in the teeth of the ECB and IMF appears to be in progress right now. However, Jean-Claude Trichet, the IMF, and Christian Lagarde (running to head the IMF), still have not gotten the message.

Expect to see more teeth kicked out in the weeks or months to come if the fools at the ECB, IMF, and EU try to kick the can down the road one more time.

Running Greek Recap



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



Collapse in Philly Fed Manufacturing Index; Current Outlook, New Orders, Unfilled Orders in Contraction; Profit Squeeze is On

Posted: 16 Jun 2011 09:18 AM PDT

Economic activity continues to slow nearly everywhere you look. Today's look-see is in the Philly Fed Business Outlook Survey.
Responses to the Business Outlook Survey suggest that regional manufacturing activity weakened in June. The survey's indicators for activity and new orders turned negative this month, while indicators for shipments and employment fell but remained slightly positive. Indicators for prices show a continuing trend of moderating price pressures. The broadest indicator of future activity fell sharply in June, recording its lowest reading in 31 months.



Price Pressures Show Moderation

Indexes for prices paid and prices received declined from May and continue a trend of moderating price pressures in recent months. The prices paid index declined sharply, by 22 points this month. Still, 37 percent of the firms reported higher prices for inputs this month, and 10 percent reported a decline. On balance, firms reported a slight rise in prices for manufactured goods: 17 percent reported higher prices for their own goods this month; 12 percent reported price reductions. The prices received index decreased 12 points, its second consecutive monthly decline.

Six‐Month Indicators Fall Sharply Again The future general activity index decreased 14 points this month and has now dropped 61 points over the last three months (see Chart). The indexes for future new orders and shipments also declined, decreasing 9 and 14 points, respectively. The index for future employment fell 17 points and has declined 32 points in the last two months. Still, slightly more firms expect to increase employment over the next six months (21 percent) than expect to decrease employment (16 percent).
June Business Conditions vs. May



click on any chart or table to see sharper image

In Contraction

  • General Business Conditions plunged 11.6 points to -7.7
  • New Orders plunged 13 points to -7.6
  • Unfilled Orders fell 8.5 points to -16.3
  • Delivery Times plunged 18.2 points to -16.3
  • Inventories fell 3.1 points to -8.5

Price, Profit Squeeze

  • Prices Paid plunged 21.5 points to +26.8
  • Prices Received plunged 12.4 points to +4.4

Prices paid fell more than prices received but from a much higher level. Prices received is on the verge of contraction. A price squeeze (profit squeeze) is on.

Business Conditions Expectations 6 Months from Now



Employment Outlook

Looking ahead 6 months the survey is positive, but barely. Unfilled orders, delivery times, and inventory are currently in contraction and expected to remain so. The average work week is projected to contract.

If it plays out this way, and I suggest it too optimistic, wages and hiring will be weak at best.

More on the Profit Squeeze

The special questions for June 2011 are interesting.



More businesses than not are unable to pass on price hikes. However, businesses had to pay increased prices for items, especially transportation costs.

This was an anemic report from every angle, yet treasuries are barely up.

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


2-Year Greek Bond Yield Hits 28.15%; Investors Bet on Prospect of 'Greek Accident'

Posted: 16 Jun 2011 01:02 AM PDT

Greek, Irish, and Portuguese yields are at or flirting with new all-time highs.

Moreover, things are not looking pretty for Spanish and Italian bonds. Both trade at the upper end of their respective ranges yet German bond yields have fallen since the second week in April.

The prospect of a messy default in Greece is rising, even though it appears the IMF will hold its nose and give Greece another trance of money.

Credit default swaps price in a 75% chance of default in 5 years. However, Investors Now Bet On a 'Greek Accident' Within a Year.
A new bet has been placed on the Greek debt crisis. It backs a growing view among investors that Athens may be about to suffer a messy default that could spark a run on the country's banks and a deeper euro zone crisis.

One senior investor said: "There is a meaningful chance of a Greek accident this summer. That involves a hard default and big losses for investors, which could have very worrying repercussions for the euro zone."

These fears have prompted bets on the so-called "accident scenario", which involves buying one-year credit default swaps that would pay out big profits in the event of a hard default, typically a non-payment of loans, in the next 12 months.

Although these funds have placed only a small amount of money on these bets, the mere fact that they are using them highlights the growing risks for the euro zone.

Greek two-year bond yields, which have an inverse relationship with prices, lurched 160 basis points higher, one of the biggest daily moves of the year, to a euro-era record of 28.02 percent.

Greek five-year CDS leapt to a high of 1,700 basis points, or a cost of $1.7 million to insure $10 million of debt annually over five years. Greek CDS is also pricing a 75 percent chance of a default by the country over the next five years – it was about 45 percent at the start of the year.

Irish and Portuguese two-year yields and five-year CDS also jumped to record highs. More worryingly, Spanish and Italian bond markets were hit too, with Spanish bond yields closing in on highs last seen in 2000.
Inquiring minds may wish to consider some charts of 2-year sovereign debt yields.

2-Year Yield Germany - 1.47%



2-Year Yield France - 1.75%



2-Year Yield Italy - 3.05%



2-Year Yield Spain - 3.52%



2-Year Yield Ireland - 12.28%



2-Year Yield Portugal - 12.44%



2-Year Yield Greece - 28.15%



If there was no risk of default as ECB president Jean-Claude Trichet insists, there would be no investor preference for German bonds over Greek bonds, Portuguese bonds, or Irish bonds.

Instead there is a significant difference between German and French bonds and the bonds of every other country.

Spain is too big to bail and Italy is much bigger still. All hell is going to break loose when yields in Spain or Italy rapidly rise, and it's only a matter of time before they do.

Spanish 10-Year bonds are flirting with disaster right now.

10-Year Yield Spain - 5.62%



German 10-year bonds are 2.95%.

A sustained move above this level spells serious trouble for Spain.

Greek Recap



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