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marți, 24 ianuarie 2012
Get the most out of the State of the Union
Answers to 43 Questions About Search, Social, Content, Conversions and More
Answers to 43 Questions About Search, Social, Content, Conversions and More |
| Answers to 43 Questions About Search, Social, Content, Conversions and More Posted: 23 Jan 2012 02:55 PM PST Posted by randfish Earlier tonight, I sent out the following tweet:
I was clearly under-prepared for the amazing responses. In order to tackle such a magnitude of great questions, I'm giving myself some rules for replies.
Let's get started!
Tough decision. It would probably be between YouTube and eHow, mostly for the putting-to-rest-conspiracy-theories value. But that's with my blogger/search news hat on. If I think more strategically and web-wide, I'd say Amazon's analytics would be fascinating to open-source ala Wikileaks. I suspect folks around the world could study the last decade of data and discover remarkable traits and trends about what we care about, buy and sell as a society.
I think there's some pretty good stuff out there about Enterprise SEO (though, in all fairness, Moz hasn't been doing a great job on that topic lately - I'll try to fix that). Some recommendations:
In terms of my personal recommendations - the key is to think at scale. Oftentimes, the "little stuff," like fixing title tags, getting URLs right, making it easier to use the CMS so more people at the company blog, etc. can have huge impacts at big organizations but would do little for SMBs. There's also larger strategies like content licensing and adding specific inbound marketing roles to a team. E.g. for a five-person team, you could have a content strategist, a full-time writer, an SEO/analytics data junky a, a marketing-focused graphic designer and a marketing-specific developer. That combination can often do AMAZING things, even in very large organizations.
I suppose linking to Twitter is giving a link-rich site more juice, but I'd worry about saying I'll link to everyone's individual domains, as that could create some more manipulative/non-authentic questions, especially considering the sphere we're in :-) Oh, and BTW, if you haven't read the article Dennis links to in his tweet (from the brilliant Mike Grehan), I'd check it out. I wrote about it again a couple years ago, because it's a concept that every marketer should know and embrace.
It totally depends on how it's implemented and what you put there. I've seen/heard of CTRs on "related" as high as 10% of visits (usually on hyper-targeted blogs that include images/graphics in the related section) and under 0.1%. My advice is to test the formats you think will work best against one another, using some A/B testing software like Google Website Optimizer or Unbounce. Given the task you're aiming for has relatively higher conversions than a traditional purchase funnel, you can likely see results fairly quickly.
Right now, I'd say it's a strong factor for earning those amazing rel=author style rich snippets in the SERPs (as seen below): In the future, I think it will depend on the degree to which the data format is embraced and used across the web, and whether they see a strong correlation with increased searcher happiness/relevancy when they test implementations. If you've not yet read the interview with a Google Search Quality Rater, check it out. To my mind, that clearly illustrates the process by which Google's Search Quality team determines whether an algorithmic shift is positive (and worth releasing) or negative (and thus, shut down).
I think it's a great topic. Sadly, for a lot of affiliate marketers, I think Google's intent is to put them out of business, or at least make things much tougher for them in search/SEO. If I were doing any form of affiliate stuff, I'd be thinking extremely hard about how to build a unique value proposition, a recognizable, memorable, beloved brand and earn enough press and awareness, particularly in the tech community, so as to limit the potential damage of future Google updates targeted as eliminating these types of operators. I'd also try to diversify my traffic to get no more than 40% of visits from search (which likely means investing in a lot of content marketing, social media, blogs, etc).
We actually studied this one at Moz! Our findings, from talking to a bunch of folks in the sphere, were that the numbers come out very similarly either way. If you take a credit card upfront, you have a higher barrier to entry and fewer free trials, but a higher post-trial conversion rate. If you don't require a credit card, trials go up, but conversions at the end of the period go down to approximately the same. We based our decision on the fact that there are substantive costs associated with crawling a site, fetching data, etc. in our web app and tools (including social data, which we pay for based on usage). Thus, fewer trials with a higher conversion rate would give the business better overall margins.
I'm going to defer to the expert on this one and point over to these 10 excellent posts by Dan Zarrella. In fact, just go read all his stuff. Here's his posts on Hubspot and his Slideshare decks. If you want even more, I did a Whiteboard+ video that went up just today on the topic of sharing across multiple platforms.
Many of the daily deals and subscription commerce sites actually do very little inbound marketing. Here's a cool infographic from the folks at Kiss Metrics showing off the impressive growth many of them have experienced: Some of this is based on the product alone, some is the virality of the concept, some is highly successful advertising and a few, to be fair, do a good job with inbound channels like content, search and social. Other great examples are Craigslist and Reddit. There's lots of ways to skin the web traffic cat, and while I'm biased to organic/free sources, I'm also keenly aware that it's not the only route.
If possible, most SEOs generally like to use 301 rewrite rules. They scale nicely - even if you have 500,000 pages of product URLs that all need to change, a single 301 rule through .htaccess can often address the problem - and they're still a best practice. I'd lean more towards canonical when you have a specific reason to want to keep the page accessible to users in multiple formats, e.g. print/mobile-friendly versions of articles or the same product with different image views.
Oh... Interesting. I think this would be worthy of some testing and research, but one cool data point I'd check out comes from the OKTrends blog. You might remember that they used to have multiple sharing buttons that dropped-down from the top of the page using CSS once you reached the bottom of an article. After testing, my understanding is that they found having a single Facebook like button (as per the image below) worked best. Perhaps less is more when it comes to sharing. I know that personally, I'm often overwhelmed by, for example, what Mashable or Huffington Post do with share buttons. Though, I do like having at least Twitter, Facebook and Google+.
I think they'll only get more aggressive with pushing Google+ into the SERPs and into non-traditional results areas as with what we see below: I did a video about this last week, and I'd also recommend AJ Kohn's sublime SEO Guide to Google+ for more depth.
My top 5 things to get improved conversions through outreach are:
Mike King also offered some great suggestions in his blog post on the topic here.
I like internal anchor links a lot, and I don't just use them for long pages, but also to split up pages in a long document (e.g. our Search Ranking Factors). For those long one-pagers, do be aware that Google may rank specific portions from those internal anchors separately (which can be a good thing), and that you can also get the mini-sitelinks, ala below: You don't need to do anything fancy - clean, classic internal anchors and substantive content + good external links usually does the job.
Probably not. I'd say that for logged-in users of Google accounts, Gmail and Google+, Google already has those users "in their pocket" as searchers and it will be very tough to go over to Bing. Core relevancy, particularly in the long tail, is still a weak spot for Bing, and Google's still relatively religious in their testing around user experience and click activity. If they see any hint of a real hit to usage, they'll tune things up very quickly. My guess is that the SPYW rollout wouldn't have even happened unless they saw some good data suggesting it would improve the metrics they care about.
I think long-term, Pinterest may be more than it is today. Twitter started out as a place to tell people what you were eating. Facebook was just a place college students went to hook up. I'd guess Pinterest has a real shot at disrupting e-commerce and online shopping from a social perspective.
My favorite is simply to have a mobile stylesheet. The content stays the same. The URLs stay the same. The social sharing and SEO isn't affected. It just makes it easier to read on tiny devices.
Help me Joanna Lord! You're my only hope. Seriously, we should get her to write a blog post about this. I bet it would be amazing :-)
I'm a longtime fan of Yoast's Wordpress plugins. They're powerful, flexible and nearly easy enough for beginners (at least, with a little light reading). He also keeps them updated regularly and allows for some of the cool, new functionality like rel=author (to be fair, you can do this without the plugin, too).
My understanding, which comes straight from Google is that neither influences search rankings directly (at least, not anymore - Twitter did from 2009-2011). However, they both spread content to users who search, click, like, link, +1 and perform all other manners of activity, some of which may indeed be directly influencing the rankings. In terms of which one's more powerful, I'd say it's about your network and your users. For example, on Moz, we have far more success spreading content using Twitter than Facebook. And for me personally, the same is true. For others, though, Facebook may be much more influential. You have to know your network and your audience.
I've heard the same thing, and I believe it's based on a webspam-related patent Google filed many years ago. Bill Slawski recently re-visisted the patent and his coverage is worth a read. Personally, I'd guess that if it's a signal, it's a very small one, and potentially limited to use only for network spam detection. That said, I'd still register domains for multiple years, because it sucks royally when you forget to renew them :-)
Check out the brilliant work of Rap Genius. In my opinion, they set the gold standard for adding value in an industry/nice where few thought that could be done.
I've got a list for you right here! Some of them are just enjoyable works of fiction, but the rest should be up your alley.
Definitely. UGC is scalable. Content licensing is scalable. Embedded content is highly scalable. Data APIs are scalable. Even media coverage can be scalable. Heck, if you're really good at it, blogging can even be scalable. A good post on the topic comes from Distilled.
Hmm... I don't think I'd worry much about Klout's ranking. It's a lot like toolbar PageRank in that there's not much point in attempting to inflate it. I'd concentrate more on social metrics like these. That said, I've heard that if you have lots and lots of @ reply conversations (particularly with a diverse set of folks), it can bring up your Klout score quite a bit.
Potentially yes, though probably not by a huge amount unless they're accompanied by all the other nice signals that a group of social influencers often bestow on a site they all share (e.g. SEOmoz has quite a few powerful Twitter/Facebook/G+ accounts linking to it, though the benefits are probably more second-order impact than direct).
I don't think I'd go that far. Rather, I'd say it's important to measure rankings for specific engines in specific regions, e.g. Google.co.uk AND Google.ca AND Google.com (US).
Unfortunately, the best advice I can give is the hardest to implement: You have to test. If you try a channel honestly and with authentic effort for 3-4 weeks, then compare against other things you're doing, you'll have real data about the value of that source for your brand. If not, you'll probably miss some. That said, if you do nothing else, have a blog you update religiously every week (or every day if possible), occasionally targeting keyword phrases for SEO, and get accounts on Facebook/Twitter/Google+ where you share your posts. It doesn't work for everyone, but it's a content+social strategy that often yields consistent rewards.
You ask for the impossible, sir. Links can almost never be measured in dollar value, unless it's an affiliate link with a tracking code and you know every visitor that came and their behavior over the next 3 months (and even then, you're probably missing some of the value). Rather than trying to come up with an arbitrary formula, I'd think holistically about the value of links - they send traffic, they help with branding and awareness, they likely provide some SEO benefits (if they're from good sources) and they build relationships with the linking site. Hard to measure is a good thing - it means the competition probably underinvests :-)
I would LOVE to run some tests on that :-) If anyone does it, we'd be thrilled to publish your findings here on the Moz blog. My total guess is that nofollow links probably do, but it's very hard to say and could even be on a case-by-case, e.g. link mentions on Wikipedia might be worth more than nofollow links on a random blog (but can't say for certain).
We sorta do... This is what you'll see if you're logged-out of your account: Being honest, there's a natural tension inside SEOmoz about not pushing our products too hard in our community. It's part of our commitment to TAGFEE (specifically Authenticity). We believe there's a ton of value in building up trust and a relationship with our members prior to asking them to buy our stuff. So far, that's worked out well :-)
Engines have gotten tremendously more intelligent over the last decade, but I've only ever seen the effectiveness and value of SEO go up. Granted, it's become more complex and nuanced, but that's actually made it a more worthwhile investment, IMO.
Target good keywords! And encourage folks who contribute UGC to do likewise (and to link to their profiles and their content in scalable ways, such as badges or direct-embedding, like I did with your tweet above). You can also try taking older, out-of-date content and redirecting it to more relevant, high quality, updated pages, thus consolidating some of the spread-out link juice and providing better value to visitors.
Ads on the web follow extremely similar patterns such as tracking URLs and IDs, sizing formats, delivery through CDNs, etc. I'd guess that Google likely has a machine-learning based algo that has human editors tweaking it semi-regularly when any new ad network gets to scale.
There's only a few metrics you can really get publicly for the Twitter/Facebook/Google+/etc. accounts of your competition. Check out this post to see more.
Depends. If the content was targeting good keywords and is high-value/useful then just clean up the on-page, perhaps update the content a touch and then re-share (particularly the good stuff) on social networks/featuring on the homepage, linking to it in new posts, etc. If, however, there's a lot of old junk in the blog, I'd worry less about reviving it and more about upgrading quality, SEO-targeting and share-worthiness moving forward.
99% of the time, they do. But be careful if you make up words. For example, SEOmoz itself may not get the benefit of having "SEO" in the domain name, because "moz" isn't a word. Likewise, something like "Everywhereist" might not rank for "Everywhere" because the engines interpret "ist" as part of the word, not a separate one. However, if you have a domain like "greetingcards.com" that will certainly be seen as the words "greeting" and "cards."
It is, but there's a bunch of pitfalls and shortcuts that lead many down the wrong path. My best advice is to outsource to those who are already blogging/content-creating passionately and authentically. For example, if you're a travel site seeking content, don't hire folks who've never written about travel before (or who do it through a content agency for $5 an article). Go find 50 travel writers on the web who aren't monetizing their sites well. Reach out individually and offer them $50-$100 per post. You'll get a lot of takers and way more value - because those bloggers will (oftentimes) SHARE the content they write for you, bringing far more value than just the words alone.
This deserves its own post, Jon. Excellent question though - I will try to tackle in some future content (maybe a WB Friday or a blog post).
Sadly, the answer is sometimes, but usually not permanently and on rare occasion, it can get you a penalty. I'd use extreme caution here (which means, I'd never do it personally, but some folks with higher risk tolerance do and get rankings from it).
Visits from search, # of keywords sending traffic, performance of keywords, # of pages receiving search traffic, rankings for key terms using non-personalized search (even if many are logged-in, the "natural" results still usually hold some sway in what gets shown, especially on Page 1).
I'm not sure that mobile has added a ton here (though having content that's easy to consume + share on mobile devices is certainly a win, don't get me wrong). However, usability/UX has always been critical to SEO - it increases the likelihood your content will be seen, shared, liked, linked-to and all the other signals engines measure. Given how aggressive Google's been about user-experience style algo updates of late, I'd say a great UX is more important than ever, and it's something I'd nail even before worrying about broader marketing efforts.
Links from images definitely appear to have an impact, and the alt attribute seems to act like anchor text. However, we did run some tests about 18 months ago showing that image links seemed to have less of a rankings influence than straight text links, so if possible, I might try to get the attribution to images in a caption below the image rather than just having the image itself click-able. Thanks to everyone who sent questions! This has been tons of fun, though a lot of work. I'm sure many of the comments will have more detail and probably some even better responses than those I gave above. That's the great part about this community - it scales. Someday soon, I suspect I'll be more of a question-asker than an answerer here, and that will be a wonderful day. Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read! |
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Watch Live Tonight: 2012 State of the Union
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Seth's Blog : "It's completely up to you"
"It's completely up to you"
... and that's the problem.
I was picking out the mat for a framed photo and there were a thousand colors to choose from. The framer uttered the scary invocation, putting the choice back to me.
So many things are now completely up to us, more than ever before. Where and how and when we work and invest and interact and instruct and learn...
If you think you have no choice but to do what you do now, you've already made a serious error.
It seems to me that passing the buck on this merely because it's easier than choosing is precisely the wrong strategy. It enables an abdication of power that will be very hard to reverse. It's up to you, and that's part of the power that you've got.
Back to the framer: I picked, because that's my job.
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luni, 23 ianuarie 2012
Mish's Global Economic Trend Analysis
Mish's Global Economic Trend Analysis |
- Obama's Praise and Support of Union Bullying
- Fannie, Freddie Would Need Another $100 Billion From Taxpayers for Obama's Proposed Mortgage Writedowns; Obama Seeks Vote-Buying Opportunity; What's the Real Cost?
- Princess Merkozy Kisses Frog, Turns into Hopelessly Indebted Club Med Prince; Berlin Ready to See Stronger ‘Firewall’
- Crony Capitalism and the Entitled Class of Wall Street Financiers; Bill Moyers Interviews David Stockman, Ronald Reagan's Budget Director
- Debt and Deleveraging: Did the U.S. Overcome the Debt Crisis? Light at the End of the Tunnel Anywhere? Five-Pronged Solution
| Obama's Praise and Support of Union Bullying Posted: 23 Jan 2012 09:47 PM PST Paul Munsch is the owner of St. Louis Paving in St. Louis, Missouri. He and his employees have faced years of bullying by the union bosses with whom President Obama continues to side. Please listen to this video message. Note, the video starts out grainy, I believe on purpose. Link if video does not play: Obama Isn't Working I support the idea and the message, but not the candidate who put that video together. Nonetheless, it was very effective message. I also support Rand Paul's national right-to-work legislation. No business owner should have to put up with such union bullying. Forced collective bargaining is slavery. Please consider President Obama's Slave Trade; Senator DeMint Says Team Obama Acts Like Thugs; Death of Right-to-Work? Paul Krugman, Stephen Colbert, Bill Maher, others, Ignore Extortion, Bribery, Coercion, and Slavery; No One Should Own You! Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Posted: 23 Jan 2012 03:22 PM PST Fannie Mae and Freddie Mac have already cost US taxpayers over $200 billion. If Obama gets his way on mortgage writedowns, the GSEs estimate it would take another $100 billion. Since such estimates are always overly-optimistic by a factor of 3 to 10, I estimate the cost to taxpayers would be $300 billion minimum. Please consider Fannie, Freddie writedowns too costly: regulator The regulator for Fannie Mae and Freddie Mac told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.Calculating the Maximum Cost At least we know an approximate maximum cap. Negative equity totals $750 billion. Add in cost on implementing the program, graft, fraud, etc. and the cap (right now) is a conservative $760 billion or so. Factor in declining property values and a conservative cap is $800 billion or so. Obama Seeks Vote-Buying Opportunity Notice the ridiculous comment by the Fed: write-downs "had the potential to decrease the probability of default". Of course they do. Write off the entire loan and there would be no chance of default. That does not mean it's a smart thing to do. Unless of course you are President Obama seeking to buy votes in November. Addendum Greg Fielding of the Bay Area Real Estate Trends blog writes ... What's interesting in the letter is that they promote principal reduction as costing $100 billion, but the "potential" savings of mods and forbearance is only a few percent. And the data they use has no assumptions for an increase in the overall number of foreclosures as negative equity grows. This whole thing smells of incompetence and corruption.Mish says ... Exactly! Not to mention vote buying and I am quite sure back-door bailouts of banks as well (who will be permitted to sell "assets" to Fannie and Freddie in advance). Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Posted: 23 Jan 2012 01:07 PM PST Steen Jakobsen, chief economist for Saxo bank in Denmark, pinged me with an interesting set of comments this morning. Please consider the tale of the frog and the indebted princess. This morning I had the pleasure of being on CNBC together with a pundit from a major investment bank. He claimed that if Greece went bankrupt then no one would lend them any money and it would leave them without trading partners. I countered that this would happen anyway if we continue to ignore the losses that creditors need to take on their Greek investments. Only through a Schumpeter-like "Destruction of Capital", after all, can we give Greece a fighting chance to survive.Given Switzerland's currency peg, I do not think the Swiss Central Bank makes that much sense either. Perhaps in relative terms. Berlin Ready to See Stronger 'Firewall' Interestingly, Steen wrote the above before this news came out: Berlin Ready to See Stronger 'Firewall' Berlin appeared to soften its longstanding resistance to increasing the funds only hours after the International Monetary Fund warned that the eurozone needed more money to build "a larger firewall" to prevent the crisis from spreading to its core economies.Steen Nailed Two Key Points
Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Posted: 23 Jan 2012 09:49 AM PST David Stockman former budget director for President Reagan, appeared on Bill Moyers and presented his message about money, Wall Street financiers, and crony capitalism. Link if Video does not play: David Stockman on Crony Capitalism Money dominates politics, distorting free markets and endangering democracy. "As a result," Stockman says, "we have neither capitalism nor democracy. We have crony capitalism."Click on the above link for a full transcript. Here are a few select quotes. DAVID STOCKMAN: A massive amount of resources are being devoted, being allocated or being channeled into pure financial speculation that has no gain to society as a whole, has no real economic contribution to the process by which GNP is created, GDP is created and growth occurs.In 1985 Stockman wrote The Triumph of Politics: The Inside Story of the Reagan Revolution. 30 years later Stockman laments... "I was in the middle of being very disgusted with what my own Republican Party had done and what Bush had done and the Paulson Treasury. And then when I saw this, I got the title for my book, "The Triumph of Crony Capitalism." It's so disappointing to see that the Obama administration, which in theory should've had more perspective on this than a Republican administration under Bush, to see that one, they appointed in the key positions the same people who brought the problem in: Geithner and Summers and all of those, and secondly, that Obama did nothing about it." Stockman's new book, The Triumph of Crony Capitalism, rates to be a good one. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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| Posted: 23 Jan 2012 02:45 AM PST Citing the latest report on "Debt and Deleveraging" by the McKinsey Global Institute, Ambrose Evans-Pritchard proclaims America overcomes the debt crisis as Britain sinks deeper into the swamp. Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking.US Did Not Overcome Debt Crisis There is a big difference between alleged "light at the end of the tunnel" and "America Overcomes Debt Crisis" as Pritchard claims. US consumers may be one-third of the way through, but US debt-to-GDP ratios are low only because unsustainable government spending has taken up the slack. The US has not started government debt deleveraging and until that is nearly finished there will not be light at the end of the tunnel, let alone the end of the crisis. Optimistically, the best one can possibly assert is one can possibly see light at the end of the "consumer tunnel". The government tunnel immediately follows. Moreover, one should not be "tempted to ask what all the fuss was about in the US". Just because other nations are worse, does not mean the US had no problem. Five-Pronged Solution US monetary policy and ECB monetary policy is partially to blame for these crises as Pritchard says. Reckless fiscal policies by governments everywhere is another part of the problem. The five-pronged solution which Pritchard does not mention is ...
Please see Hugo Salinas Price and Michael Pettis on the Trade Imbalance Dilemma; Gold's Honest Discipline Revisited for a discussion of how a gold standard can fix trade imbalances. Eurozone Structural Problems The European crisis now was foreseen in advance by many, including Pritchard. Certainly the ECB's "one size fits Germany" interest rate policy fueled the property bubbles in Spain and Ireland, as well as imbalances in Italy, Greece, and Portugal. Unlike the US, the eurozone has the structural additional problem of being a monetary union without a fiscal union. Not one such currency union in history has ever survived. Bailing out Greece and Portugal and Ireland will not fix structural problems including the ECB's "one size fits all" interest rate dilemma. Debt and Deleveraging Here are some excerpts from the McKinsey Global Institute PDF. Click on any chart below for a sharper image. Executive SummaryThat last sentence, coupled with the fact that consumer deleveraging is only 1/3 finished is precisely why the headline title by Pritchard that "America Overcomes the Debt Crisis ..." is quite inaccurate. Not only that, but growth assumptions remain absurdly high as do earnings forecasts. The McKinsey study is certainly supportive of my employment thesis: Fundamental and Mathematical Case for Structurally High Unemployment for a Decade; Shrinking Job Opportunities and the Jobs Gap; The Real Employment Situation Moreover, and importantly, risks are all skewed to the downside because the European recession is going to prove to be a major disaster as noted in Italy Faces 2-Year Recession says IMF; European Recession Neither Mild Nor Short Spotlight on UK and Spain 10 Largest Economies Composition of DebtNote how Spain was massively skewered by the ECB's "one size fits Germany" interest rate policy. That structural problem remains in spite of all the can kicking by the US and ECB with lending schemes and the LTRO. Let's return to the report for one more chart from the report. US Household Debt Ratios  There are a lot of optimistic assumptions in that report. The above chart highlights one of the biggest assumptions. Certainly one can make a case that the change from single-household worker families to dual-household worker families (both husband and wife working), accounts for the rise is sustainable debt loads from 1955 to 1985. How much of the rest is sustainable? I suggest little to none of it is. The stock market boom of the 90's followed by housing bubble in the 2000's is what made families "feel" wealthy. Negative Stock Market Returns for another Decade? With global growth slowing, coupled with an enormous change in boomer demographics, combined with massive amounts of deleveraging still to come in the top 10 economies, the likelihood the stock market puts in another sustainable boom as it did in the 90's is highly unlikely. When households feel wealthy they are apt to take on more debt. In a debt deleveraging cycle, not only does feeling wealthy go away, so does the likelihood of strong returns in the stock market. Indeed, I have made the case for Negative Returns for Another Decade
For the sake of argument let's assume an optimistic case of 4-5% annualized returns for another decade. Is that enough to keep that household debt trend intact? Of course not. The idea the trendline itself should go up over time is complete silliness unless there is a structural change as there was in the 60's and 70's when women went to work en masse. Nonetheless, the McKinsey Global Institute report is well worth a look in entirety. Click on the first link at the top for an opportunity to download the full 64-page report. Obvious flaws aside, the report is a great read containing a wealth of information on debt levels of countries and what has been done to address the issues so far. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific. 
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