miercuri, 3 august 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


Whoa... Can Query Volume Directly Influence Rankings?

Posted: 02 Aug 2011 03:04 PM PDT

Posted by MOGmartin

I was lucky enough to recently speak at the MozCon conference in Seattle, and during my talk one of the points that I covered were some experiments that I’ve conducted with query volume in Google, and how this affects various parts of the algo.

Google have for a long time publicly said that query volume has no effect on website rankings, but SEOs the world over have been crying foul.  I mean c’mon, it just makes sense right?

Google’s own auto-suggest for instance, that has always “felt” like it was driven purely by search volume right?  And by getting good stuff into auto-suggest (or for that matter, removing those annoying negative ones like [brand scam] or [brand ripoff]) has a direct impact on search behavior, so why not results as well?

So, a few months back I began experimenting with search query volume in the results.  My objective was fairly simple, and just involved trying to get “Martin Macdonald SEO” to be suggested when typing in “martin macd……”. 

Granted, searches for my name are without doubt a low volume query, so it probably was going to be far more achievable than getting my name to appear after a search for “Poker”, but it threw up some interesting results. 

How to Create Volume:

There are plenty of ways of trying to get lots of people to carry out searches that you want them to.  For many companies, offline advertising spend can be used to create huge volume,  these days you often see on TV adverts things like “search used cars Seattle to find us” or even “search for Samsung TV’s”.  Both of these examples are aimed specifically at moderating search behavior and getting people to perform fairly specific searches. 

Most of us however do not have access to TV levels of budget, and even if we did convincing the marketing director to allow you, as an SEO, to have a say in the direct response messaging of the spot is a bit tough.

Luckily there are other ways of achieving it, Rand has experimented for some time with driving tweets to google results pages, and his followers (currently running at over 35,000) regularly click through to the google results, and then click on the one that he intended.  While I don’t think he has ever said that this was to play with both CTR and search volume, it’s a perfect potential methodology.

Another really easy way to generate searches is by using your newsletter mailing list.  If you have, say 100,000 people in your email list, try a few emails where you are sending them to a search result where you know you rank well rather than direct to your site.

This behavior can now even be tracked through google webmaster tools to see the uplift in CTR, and I’d be willing to bet good money that it forms part of the overall website authority metric in google. 

I mean, it’s a great signal right?  Users on a wide variety of queries always seem to click through to the results of one website; that’s got to represent a trusted site right?

So What Happened?

Well, as I was saying at the top of this post, I created some search volume for the term “Martin Macdonald SEO”.  This was part of an overall campaign to get my new personal site to rank well for my name (other people sharing my exact name have a Wikipedia page, are D-list television celebrities in the UK, or own the exact match .com variant of my name, so it wasn’t going to be straightforward).

As you can see from Google insights for search, the volume for my name grew a lot over the period that I have been running this test:

Martin Macdonald
(click to enlarge image)

I also experimented with lots of variations on the theme just for fun as you can see from this screenshot of my webmaster tools:

Martin Macdonald query volume

 

What were the results?

Now as you can see by checking google.co.uk the exact term I was targeting is #1 in the autosuggest window, thereby giving that term the maximum exposure possible.  When people type in my name, the number one auto-suggest appends “SEO” onto the search term, thereby influencing more volume onto it.

Furthermore, and this is what really interested me, when you now type in just “Martin Macdonald” onto the search box, my site, with the page title “Martin Macdonald SEO” ranks in P1 with very little in the way of links and history.

Now, this is far from a perfect test, for instance it’s a test group of one – not exactly scientifically significant!  That said, it was a behavior that I simply was not expecting to see – I’m unsure as to whether the query volume, alongside the signal that this was indeed the site that people were looking for was at play, but it does bear some logic right?

  • Lots of people search for “Martin Macdonald SEO”
  • There is a site with the EXACT title: “Martin Macdonald SEO”
  • It doesn’t rank, so the people don’t click through on anything.

Google learn this behavior, and then stick the site that it thinks should have been ranking in P1 to see if people click through?

Another interesting experiment that I will play about with over the next few months is trying some search query paths, so for instance someone searches for “SEO”, then they search for “SEO Consultant”, and finally search for “SEO Martin Macdonald” (just an off the wall example) it might be a likely signal that “Martin Macdonald” should follow the word(s) SEO, or SEO Consultant when typed in, as a higher than average number of people go down that funnel.  If that does work, imagine the creative marketing you could try with high volume generic keywords that relate to your industry!

Certainly bears some logic for me…. And is worth further investigation!


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How to Automate a Twitter Feed with Hootsuite and Bufferapp Graywolf's SEO Blog

How to Automate a Twitter Feed with Hootsuite and Bufferapp Graywolf's SEO Blog


How to Automate a Twitter Feed with Hootsuite and Bufferapp

Posted: 03 Aug 2011 10:13 AM PDT

Post image for How to Automate a Twitter Feed with Hootsuite and Bufferapp

The following is part of a series on automation. In this post we will be looking at using two tools, Hootsuite and Bufferapp to complement each other. If you haven’t read my Hootsuite review and Bufferapp review already, it’s probably a good idea to read them first because I will be building on those two posts. It’s also probably a good idea if you read how to use the Hootsuite bulk scheduling tool as well.

One of the hallmarks of creating a good Twitter feed is being a good content curator. It’s not just about pushing out your content or having social media conversations, but it’s about pushing out good content/links that are interesting to your audience and relevant to your niche. If you are a running a BBQ blog and Twitter account, you probably don’t want to be tweeting about PETA and vegan information–unless, of course, you want to have a non engaged account.

My first recommendation is to build up a list of “classic” evergreen content in your space. For the best results, try to get 100-200 different tweets and links (you should constantly be growing and adding to this list). Depending on how active your audience is you can tweet out 1-3 curated links per day. If you have 200 of them and you tweet out 3 per day, you will go at least two months before you repeat. I like to keep these in a spreadsheet and use the Hootsuite bulk scheduler to make sure I have at least 2-3 tweets per day.

Next, hopefully you are keeping on top of what’s going on in your sector from a current events perspective. When you come across something newsworthy, send it to bufferapp. It will auto schedule through bufferapp and fill up your tweet queue. By using these two products in conjunction with each other, you take advantage of their strengths, make sure you are tweeting regularly, and keep your tweet stream fresh and up to date.

You will have to take some care in making sure your scheduled tweets don’t bunch up with your bufferapp tweets. If you are using archived tweets (see How to Tweet From Your Archives), that’s another variable in the mix that you have to work with. Lastly, you will need to take care and make sure your new posts don’t bunch up or step on any of the others posts. If you are having a conversation or Twitter rant, burst tweeting works. For content promotion, especially evergreen content,  spread your tweets out over the day for maximum effectiveness. It sounds complicated but it’s really not. A sheet of paper and pen should do the trick. Mix up the evergreen, news, and new content posts. Look at your analytics to see which gets you the most response and test and adapt.

Content promotion is a cornerstone aspect of social media. As long as you aren’t pushing only your content, people respond to you much more positively. I would go so far as to say keep the self serving tweets to 20-30 % of your total activity. If people see you posting good stuff from others regularly and once a week you promote yourself and ask nicely for a retweet, you will get a better response.

Some people take offense to this approach, thinking that automated or semi-automated publishing is bad. They believe that Twitter should be just about real time conversations and engagement. Conversations are important, but they are time investments without much ROI, so look at them carefully. Are you on Twitter to connect with real friends or are you on Twitter to ultimately do business? Problem solving and customer service tweets are your most effective ROI. Chances are you can come up with 20-50 common questions/problems people have. Set up a text document or spreadsheet for these cases with pre-programmed answers. Using saved searches or rss searches, look for questions or issues. See if you have a standard answer or one that can be easily adapted. Sometimes you aren’t the best source for the answer; in that case, refer them to a government or educational resource. Sometimes a competing or complimentary business is a better source, and that’s ok.  Your main concern should be to solve the problem for the consumer. People remember you for being helpful. The last thing you want to do is come across as self serving social media guru who only links to themselves and talks about themselves. It’s a sure fire way to guarantee you’ll come off as a stuck-up, ego centric jerk. Trust me. If you are a huge brand and deal only in information, you might be able to get away with being broadcast only but, for most, a semi-automated solution with scripted responses to common problems works much better.

Unless you have a large company and customer service plays a big role, having one or more people working solely on Twitter/Facebook etc. is a waste of time. During the day, 20-30 minutes / 2-3 times a day should be enough. When you have big push, yes, you will need to spend more time, but by and large it’s overkill. Not to take dig at the purely social media consultants, but they spend all day promoting themselves on Twitter. In an attention-based economy, they are trying to get more clients and billable hours, but that probably isn’t your goal. Your goal is to extract as much profit and sales with the smallest investment of time and resources. The only reasonable way to do that is with some form of automation.

So what are the takeaways from this posts:

  • Automated or semi automated tweet streams aren’t evil. If a human wrote them and scheduled it, there nothing deceptive about it. Scraping and robo-tweeting without any human input is much more problematic.
  • Use the tools to their strengths. Plugins that auto-publish blog posts free you from being tied to your blog.
  • Build a body of work of ever expanding evergreen tweets. Use a schedule tool with them, trying to not repeat individual posts too often.
  • Use auto scheduling tools for news and current events.
  • Mix in archive tweets from your evergreen posts. Try to not overwhelm people with self serving content.
  • Be on the lookout for big players in your space to retweet. Nothing gets someone as excited as a natural unsolicited tweet from a friend, colleague, or similar service.
  • Conversations and customer service are a necessary evil in social media. Look for ways to minimize the time you spend there with a library of answers to common questions. Customer service is hard. Your people need to know when to color outside the lines. Give them the authority to solve problems on the spot. Letting customer problems fester is hardly ever the best solution.
  • The key is finding a balance between human interaction and automation is knowing that sometimes you need to adapt. At the end of the day, social media is about being social. The key is finding tools and workflows that minimize your time investment without losing that human touch.

photo credit:  Photospin

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Related posts:

  1. Bufferapp Review The following is part of a series on the Bufferapp...
  2. How to Use the Hootsuite Bulk Scheduling Tool The following is part of a series on using the...
  3. HootSuite Review Late last year, the solution I was using to post...
  4. How to Be Involved on Twitter in Less Than an Hour a Day The following is part of a series on Hootsuite Social...
  5. How to use Hootsuite to Publish to Your Facebook Page The following is part of a series on using the...

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How to Automate a Twitter Feed with Hootsuite and Bufferapp

Behind the Scenes: Photos from the Debt Negotiations

The White House Your Daily Snapshot for
Wednesday, August 3, 2011
 

Behind the Scenes: Photos from the Debt Negotiations

After a long and heated debate, President Barack Obama signed into law a compromise that will reduce the deficit and avert a default on our obligations that would have devastated our economy.

Official White House photographer Pete Souza chronicled the process over the last month, snapping photos at various stages of the negotiations. Yesterday, we released a set of 20 of his behind the scenes photos.

View the gallery and check out one of the photos below:


President Barack Obama meets with Speaker of the House John Boehner on the patio near the Oval Office, Sunday, July 3, 2011. (Official White House Photo by Pete Souza)

In Case You Missed It

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

Rural Veterans and the Tyranny of Distance
For about 3.3 million Vets, or 41 percent of the total enrolled in VA’s health care system, distance is more than a challenge. Distance can mean rural Veterans don’t have access to the care and services they’ve earned.

Office Hours 8/2/11 or "The American People Won In This #Compromise": Jason Furman Answers Your Questions on Twitter
Principal Deputy Director Jason Furman answers your questions about the impact of the debt agreement, and what steps will be taken for the long term health of our economy during another session of White House Office Hours.

President Obama: FAA Shutdown a “Washington-Inflicted Wound on America”
A stalemate over the FAA budget is keeping 70,000 workers away from jobs at airports across the country and has cost $250 million in tax revenue

Today's Schedule 

All times are Eastern Daylight Time (EDT).

10:35 AM: The President receives the Presidential Daily Briefing

12:00 PM: Press Briefing by Press Secretary Jay Carney WhiteHouse.gov/live

2:00 PM: The President holds a Cabinet meeting

3:15 PM: The President meets with Secretary of State Clinton

3:45 PM: The President meets with Attorney General Eric Holder

5:00 PM: The President departs the South Lawn en route Joint Base Andrews 

5:15 PM: The President departs Joint Base Andrews en route Chicago, Illinois

7:00 PM: The President arrives in Chicago, Illinois

8:00 PM: The President participates in a DNC video teleconference

8:15 PM: The President delivers remarks at a DNC event

9:25 PM: The President delivers remarks at a DNC event

11:05 PM: The President departs Chicago, Illinois en route to Joint Base Andrews

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

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Seth's Blog : Delivering on never

Delivering on never

I will never miss a deadline

I will never leave a typo

I will never fail to warn you about a possible pitfall

I will never charge you more than the competition

I will never violate a confidence

I will never let you down

I will never be late for a meeting

There are lots of sorts of never you can deliver to a customer. You can't deliver all of them, of course. Picking your never and sticking with it is a fabulous way to position yourself.

 

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marți, 2 august 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Bill Gross says "Fed Approaching Dead End Unsolvable Dilemma"; Feldstein sees 50% Chance of Recession; Three Cardinal Rules of Stimulus

Posted: 02 Aug 2011 09:42 PM PDT

Is the US economy at a tipping point or has it already tipped over? The best one can possibly say is the economy is at a stall rate.

"Economy Balanced on Edge"

Bloomberg reports Feldstein Sees 50% Chance of U.S. Sliding Back Into a Recession
Harvard University economics professor Martin Feldstein said the U.S. recovery that began two years ago has been losing steam and there are even odds the economy will slip into a recession.

"This economy is really balanced on the edge," Feldstein said in an interview on Bloomberg Television "Surveillance Midday" with Tom Keene. "I think there's now a 50 percent chance that we could slide into a new recession."

The Federal Reserve "has done everything it can," Feldstein said, though Congress and the administration have failed to address the central problem of weak housing.

"Housing is a major drag on the economy," he said. "The plan to deal with it has been a failure" and house prices have continued to fall.
Bill Gross Says US Economy at "Tipping Point"



"Fed Approaching Dead End Unsolvable Dilemma"

Here are a few quotes from Gross Says Compromise Debt Deal Fails to Make Significant Dent in Deficit
"In addition to an existing nearly $10 trillion of outstanding Treasury debt, the U.S. has a near unfathomable $66 trillion of future liabilities at net present cost"

"We are at a tipping point," Gross said, adding that the firm has reduced its forecasts for economic growth in the second half of the year to a range of 1 percent to 2 percent, from 2 percent to 3 percent.

"The Fed is approaching a dead end in that all they can do have been done.

"There's the potential for QE3, but that may take the form of extended language."

"Sisyphus would be familiar with this seemingly unsolvable dilemma," Gross wrote, referring to the mythological king who was punished by being repeatedly compelled to roll a boulder up a hill, only to have it roll back down again.
No Solution?

There is a solution, just not a politically viable one. It's called debt deflation. That is the economy's way of purging the excesses of a housing bubble and debt orgy.

Instead, the Fed and the ECB protected bondholders at the expense of taxpayers even though the unemployment rate is sky high.

The Fed's action was supposed to get credit flowing again and create jobs. Instead, Fed policy created jobs in China while bailing out US bankers and wealthy bondholders, many of whom arguably belong in prison or stripped of their financial assets.

In the end, Greece defaulted anyway at huge extra cost to European taxpayers. In the US, unemployment rate is 9.2% not counting millions of people who involuntarily dropped out of the labor force.

Keynesian Clowns Argue For More Stimulus

Sadly, Keynesian clowns still argue for more stimulus. Supposedly we need to build infrastructure.

Let me ask a question: Where would the US economy be had we done that?

The answer is certainly in a better position than the alternative of dropping bombs in Iraq. For starters the US would have better bridges instead of holes in the Iraq desert and millions of destroyed lives (and millions more enemies on top of that).

However, the US economy would still be where it is now. Why? Because of the three cardinal rules of stimulus.

Three Cardinal Rules of Stimulus

  1. First rule of stimulus: It always runs out.
  2. Second Rule of stimulus: All it can do is create a greater pile of debt.
  3. Third rule of stimulus: Spend enough money and interest on debt will eventually consume you.

Never, ever do the Keynesian clowns want to throw in the towel on what they suggest. One might think that 20 year history of failed infrastructure stimulus in Japan would be enough to open the myopic eyes of Keynesian clowns but one would be wrong.

US Structural Problems

Before we go throwing money around, why not fix a few internal structural problems to ensure we at least get our money's worth. How do we do that? Easy.

  1. Scrap Davis Bacon and all prevailing wage laws.
  2. End collective bargaining of public unions
  3. Enact national right-to-work legislation

Give me those measures and I will gladly hike taxes a bit. Those measures would at least help ensure we got our money's worth for government work.

However, those three items, while desperately needed, do not solve the problem of why jobs are fleeing the US in the first place.

For starters we need corporate tax laws that do not reward and encourage job and capital flight. Second and more importantly, we need to address the issue of trade imbalances.

I addressed trade imbalances at length in ...


Before wasting more money on stimulus measures doomed to fail, how about fixing internal and external structural problems first? If we do that, and stop the war mongering, we will not even need stimulus, the economy will heal itself.

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


Asia-Pacific Bloodbath Begins, Expect Europe to Follow Suit

Posted: 02 Aug 2011 07:03 PM PDT

The Asia-Pacific bloodbath, following the US bloodbath is now underway. Australia, Japan, Taiwan, South Korea, and Hong Kong (Hang Seng) are all down over 2%. South Korea is down nearly 3%.

China is down only .64%. However, China was smacked yesterday more than any of the others. Australia and China both look anemic.



click on chart for sharper image

Click link to refresh Yahoo Finance Asia Pacific Scorecard.

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


Italy Calls "Financial Stability Meeting"; Spain PM Delays Vacation to "Closely Watch Economic Indicators"; EU says "No Rescue Plans for Italy, Spain"

Posted: 02 Aug 2011 12:36 PM PDT

Earlier today, in Spain, Italy, Belgium Bond Spreads Hit Euro Record; Italy 10-Year Bond Yield Highest Since 1997; Self-Fulfilling Crisis I was wondering how long it would take for emergency meetings.
Any bets on when the EU has another emergency meeting? I suspect two more days of this action might do it. Now answer this: what can they do that makes any sense?
Depending on your definition of "emergency meeting" the correct answer may have been less than a day.

Italy to Hold Financial Stability Meeting

Please consider Italy to hold financial stability meeting.
Finance Minister Giulio Tremonti will hold a meeting of Italy's financial stability committee on Tuesday, including representatives from the central bank and bourse regulator Consob, a source said.

The committee will discuss "the sovereign debt market situation and the implications for the banks and the economy," the source told AFP.

The meeting will take place at 1430 GMT at the finance ministry in Rome.

Italy's Financial Stability Safeguard Committee, as it is formally known, was set up in 2008 as the global economic crisis first hit and includes representatives from stock market and insurance regulators.

Prime Minister Silvio Berlusconi is set to address parliament on the financial crisis on Wednesday and meet trade union leaders on Thursday.
Zapatero Delays Vacation to "Closely Watch Economic Indicators"

The Walll Street Journal reports Spain PM Delays Vacation To Deal With Economic Woes
Spanish Prime Minister Jose Luis Rodriguez Zapatero Tuesday postponed a scheduled vacation and Finance Minister Elena Salgado was talking to several of her European counterparts as borrowing costs for Spain and Italy hit new euro-era highs.

Zapatero cancelled his vacation in order "to more closely follow" the country's "economic indicators," according to a statement from his office. A spokesman added that Zapatero was in close contact with Salgado, while the finance minister has been talking with her Italian, French and German counterparts.

The new spike in borrowing costs comes two days ahead of a Spanish bond auction Thursday, where the treasury plans to sell between EUR2.5 billion and EUR3.5 billion of three- and four-year bonds.

It also heightens concerns about the abilities of Italy and Spain, the euro zone's third- and fourth-largest economies, respectively, to finance themselves. In a recent research note, analysts at Deutsche Bank said Greece, Ireland and Portugal started to get frozen out of financial markets when their 10-year bond yields reached levels of between 6% and 7%.

Those three countries were then forced to seek bailouts from the European Union and the International Monetary Fund.

For Spain, the heightened market tensions come at an awkward time, politically, as the country gears up for an early general election on Nov. 20. Lacking a parliamentary majority and his popularity undermined by the economic crisis, Zapatero announced Friday that he was calling elections ahead of the end of his four-year term in March.
Does canceling a vacation to hold discussions with counterparts in Italy, France, and Germany constitute an "emergency meeting"? I think so, even if it is an informal one.

EU Claims "No Rescue Plans for Italy, Spain"

While pondering the definition of "emergency meeting", please consider EU not considering rescue plans for Italy, Spain.
The European Union has no plans to provide rescue loans to Italy and Spain, despite the rising borrowing costs facing these countries, a European Commission spokeswoman said Tuesday.

"We are absolutely confident that the Spanish authorities will take all steps which are necessary," Hughes said. "The question of a rescue plan is not on the table."

"The situation is very similar for Italy," she added.
Mish Translation of EU Statements

"We are scared completely s***less by these events. If we were not scared s***less, there would be no need to comment at all. Finally, if yields head North for another day we will call an emergency meeting to discuss rescue plans for Italy and Spain."

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


Fitch Says Debt Deal Alone Won't Sustain AAA Rating; Tale of Two Headlines

Posted: 02 Aug 2011 11:46 AM PDT

Fitch will conclude its US debt review by the end August and the Associated Press has this headline on the story: US Debt deal alone won't sustain AAA rating
On Tuesday, Fitch said the agreement was an important first step but "not the end of the process." The rating agency wants to see a credible plan to reduce the budget deficit.

David Riley, managing director at Fitch, told The Associated Press: "There's more to be done in order to keep the rating in the medium-term."

Fitch expects to conclude its review of the U.S. sovereign rating by the end of August. As the debt deal currently stands, it is possible the U.S. debt rating could be downgraded at that time, Fitch said.
It is interesting to see how news agencies parse such reports.

Reuters reports the same story headline as follows: Fitch keeps US AAA rating, review ongoing
Fitch Ratings upheld its AAA rating on the United States on Tuesday after lawmakers approved spending cuts that will help avoid a U.S. default, but warned that the world's largest economy must reduce its debt burden or face a downgrade.

Although the bill removes the threat of imminent default by raising the national debt limit enough to last until 2013, its cuts are only about half the $4 trillion in savings that ratings agencies Standard & Poor's and Moody's have said would be enough to confirm the country's triple-A rating with a stable outlook.

Other ratings agencies have also warned of a potential downgrade of U.S. credit depending on the scope and size of the deficit cutting agreement.

"The more important question here is whether the bill will be enough to appease S&P, which wanted $4 trillion in cuts, with many in the market believing that there is a realistic chance of a downgrade from S&P," said Gennadiy Goldberg, fixed income analyst at 4Cast Ltd. in New York

Fitch noted that without significant changes in fiscal policy, debt as a percentage of gross domestic product "will reach 100 percent by the end of 2012, and will continue to rise over the medium term - a profile that is not consistent with the United States retaining its AAA sovereign rating."
While both headlines are true, the first more accurately conveys the mood of the moment.

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


Fitch Says Debt Deal Alone Won't Sustain AAA Rating; Tale of Two Headlines

Posted: 02 Aug 2011 11:29 AM PDT

Fitch will conclude its US debt review by the end August and the Associated Press has this headline on the story: US Debt deal alone won't sustain AAA rating
On Tuesday, Fitch said the agreement was an important first step but "not the end of the process." The rating agency wants to see a credible plan to reduce the budget deficit.

David Riley, managing director at Fitch, told The Associated Press: "There's more to be done in order to keep the rating in the medium-term."

Fitch expects to conclude its review of the U.S. sovereign rating by the end of August. As the debt deal currently stands, it is possible the U.S. debt rating could be downgraded at that time, Fitch said.
It is interesting to see how news agencies parse such reports.

Reuters reports the same story headline as follows: Fitch keeps US AAA rating, review ongoing
Fitch Ratings upheld its AAA rating on the United States on Tuesday after lawmakers approved spending cuts that will help avoid a U.S. default, but warned that the world's largest economy must reduce its debt burden or face a downgrade.

Although the bill removes the threat of imminent default by raising the national debt limit enough to last until 2013, its cuts are only about half the $4 trillion in savings that ratings agencies Standard & Poor's and Moody's have said would be enough to confirm the country's triple-A rating with a stable outlook.

Other ratings agencies have also warned of a potential downgrade of U.S. credit depending on the scope and size of the deficit cutting agreement.

"The more important question here is whether the bill will be enough to appease S&P, which wanted $4 trillion in cuts, with many in the market believing that there is a realistic chance of a downgrade from S&P," said Gennadiy Goldberg, fixed income analyst at 4Cast Ltd. in New York

Fitch noted that without significant changes in fiscal policy, debt as a percentage of gross domestic product "will reach 100 percent by the end of 2012, and will continue to rise over the medium term - a profile that is not consistent with the United States retaining its AAA sovereign rating."
While both headlines are true, the first more accurately conveys the mood of the moment. By the way, although a debt downgrade is well deserved, I doubt it will matter much.

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


US Consumer Spending Unexpectedly Declines, First Drop in 20 Months; Personal Savings Rate Highest Since August 2010

Posted: 02 Aug 2011 09:20 AM PDT

US Consumers threw in the towel in June with Americans cut spending for first time in 20 months.
Americans cut their spending in June for the first time in nearly two years after seeing their incomes grow by the smallest amount in nine months. The latest data offered a troubling sign for an economy that is adding few jobs and barely growing.

Consumer spending dropped 0.2 percent in June, the Commerce Department said Tuesday. It was the first decline since September 2009.

Some of the decline was the result of food and energy prices moderating after sharp increases earlier this year. When excluding spending on those items, consumer spending was flat.

Still, consumers also cut back on big-ticket items, such as cars and appliances, which help drive growth.

Incomes rose 0.1 percent, the smallest gain since September. Many people are also pocketing more of their paychecks. The personal savings rate rose to 5.4 percent of after-tax incomes, the highest level since August 2010.

The biggest drop in spending occurred in such items as food and gasoline. Spending on such non-durable goods fell 5.5 percent, reflecting price declines after spikes early this year. An inflation gauge tied to consumer spending dropped 0.2 percent in June, the biggest one-month decline since September 2009. Outside of food and energy, prices were up 0.1 percent.
Savings Rate Increases as Spending Declines

Consumers spent less on food and gas because of declining prices but did not spend more elsewhere to make up for it. Since wages rose (barely), the savings rate went up.

Did economists expect this?

Bloomberg has the answer in Consumer Spending in U.S. Fell in June
U.S. consumer spending unexpectedly dropped in June for the first time in almost two years and savings climbed, adding to evidence that the slump in hiring is hurting household confidence.

Purchases declined 0.2 percent after a 0.1 percent gain the prior month, Commerce Department figures showed today in Washington. The median estimate of 77 economists surveyed by Bloomberg News called for a 0.1 percent increase
In spite of two horrendous jobs reports and multiple other data points including shipping data released a few days ago and a pathetic ISM report that shows manufacturing is on the verge of contraction, I am pleased to report that optimism still reigns supreme in economists, on average. Most are still looking for a second-half recovery.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Freighter Rates See Significant Plunge In Normally Busiest Time of Year

Posted: 02 Aug 2011 08:53 AM PDT

This is normally the busiest time of year for shipping. Businesses are typically stocking up for back-to-school and holiday sales. Instead Container-Ship Plunge Signals U.S. Slowdown
Plunging rates for chartering container vessels that carry sneakers, furniture and flat-screen TVs may signal a U.S. consumer slowdown and losses for shipping lines in what is traditionally their busiest time of the year.

Fees for hiring vessels have fallen 9.3 percent since the end of April, according to the Howe Robinson Container Index, which tracks charter rates for a range of vessels. Last year, the index surged 56 percent in the period, as lines added ships on demand from U.S. and European retailers restocking for the back-to-school and holiday shopping periods.

"The troubling part is that charter rates are falling in the peak season," said Johnson Leung, head of regional transport at Jefferies Group Inc. in Hong Kong. "Sentiment among consumers and retailers isn't very strong."

Concerns about the sustainability of economic growth are also contributing to container lines renting ships for shorter periods. Average charter lengths have declined to seven months from 10 months at the beginning of the year, according to Alphaliner.

Shipping lines are also contending with fuel costs that have jumped 53 percent in a year in Singapore trading, alongside a rise in oil prices, and an expanding global fleet.
Harper Petersen Index

Here is a chart of the Harper Petersen Ship Broker Index



This is yet another indication of the global economic slowdown.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Spain, Italy, Belgium Bond Spreads Hit Euro Record; Italy 10-Year Bond Yield Highest Since 1997; Self-Fulfilling Crisis

Posted: 02 Aug 2011 02:39 AM PDT

The idea that the latest Greek bailout plan would solve anything is officially dead. Government bond spreads of Spain, Italy, and Belgium are at all-time highs. The yield on 10-year bonds of Spain and Italy are now both well North of 6%. Here are a few charts to consider.

Belgium 10-Year Government Bonds



Spain 10-Year Government Bonds



Italy 10-Year Government Bonds



Germany 10-Year Government Bonds



Portugal, Greece, and Ireland are now a sideshow. However, as a point of interest, 2-Year Greek bonds are 32.35% down from a record high of over 40% but well above the lows in the high 20's following the Greek bailout agreement.

Self-Fulfilling Crisis

Bloomberg reports Italy, Spain 10-Year Bond Spreads Are at Euro-Era Record on Growth Concern
Italian and Spanish 10-year bonds dropped, pushing yields up to euro-era records versus benchmark German bunds, on concern that slowing growth will hamper efforts to tame the nations' debt loads.

"This has all the features of a self-fulfilling crisis," said Harvinder Sian, a senior bond strategist at Royal Bank of Scotland Plc in London. "The rise in yields looks pretty relentless, and it doesn't look as if the politicians are anywhere near to getting ahead of the curve."

The yield on 10-year Italian bonds jumped 18 basis points to 6.18 percent as of 8:48 a.m. in London, the most since November 1997.

Spanish 10-year yields surged 16 basis points to 6.36 percent, pushing the spread over similar-maturity German debt up 19 basis points to 393 basis points. A 6.5 percent yield will be a key level for Spain, RBS's Sian said.

The yield premium investors demand to hold Belgian 10-year bonds instead of benchmark bunds widened to a euro-era record of 202 basis points before an auction of as much as 2.8 billion euros of 105-and 168 day bills.
Expect a "stern warning" from ECB president Jean-Claude Trichet soon. Also expect the market to laugh in his face.

Any bets on when the EU has another emergency meeting? I suspect two more days of this action might do it. Now answer this: what can they do that makes any sense?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Petroleum Distillates Demand Shows "Definite Economic Downturn Starting April/May 2011"

Posted: 02 Aug 2011 12:50 AM PDT

Charts of petroleum usage show signs of an economic downturn starting in April or May of 2011 says my friend Tim Wallace who writes ...
Hello Mish

Attached are two charts from my Petroleum Distillates Distribution Demand file. The first chart shows year-over-year demand from peak levels. As we have discussed before, the peak for USA usage was 2007, so everything looks back to that year to see how we are "recovering".

As can be easily seen on the chart "Historic Growth Levels Off Peak Data" distillates usage plunged in 2008 then went into the abyss in 2009. There was moderate growth in both 2010 and 2011.

"Shovel ready" stimulus, accounts for some of that growth and it is fading. There is no long term growth effect, just unsustainable spending.

The second "month-by-month" chart shows a definite economic downturn starting full bore in the April/May time period. Usage is now falling and is well below 2010 levels and approaching 2009. I attribute a significant amount of the initial strength in 2011 to cold weather.

It will be very interesting to see what August and September bring. Historic data for these months suggests a surge as people get in the end of summer vacations and go back-to-school.
Historic Growth Levels Off Peak Data



click on chart for sharper image


Petroleum Month-by-Month Since 2008



click on chart for sharper image

Thanks again to Tim Wallace for these updates.

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