vineri, 15 iunie 2012

President Obama on Immigration Announcement

The White House

Your Daily Snapshot for
Friday, June 15, 2012

 

President Obama on Immigration Announcement

This afternoon, President Obama discussed a new Department of Homeland Security policy that will allow certain young people who were brought to the United States as young children, and do not present a risk to national security or public safety, and meet several key criteria to be considered for relief from removal from the country or from entering into removal proceedings.

Find out what President Obama had to say in video remarks today.

West Wing Week 6/15/2012 or "The Fatherhood Buzz"

West Wing Week 6/15/2012 or "The Fatherhood Buzz"

In Case You Missed It

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

Celebrating Flag Day
Yesterday was Flag Day; marking the day in 1777 the Continental Congress adopted the first U.S. flag.

By the Numbers: $3,000
President Obama has proposed a plan that will cut through the red tape that’s keeping millions of responsible homeowners from saving hundreds of dollars each month through refinancing. On average, homeowners who refinance will save $3,000 each year—that’s enough to cover about two years of electric bills for the typical family.

The Future of America’s Partnership with Sub-Saharan Africa
A new Presidential Directive places the United States in a stronger position to help our African partners seize the opportunities and meet the challenges facing the continent.

Today's Schedule

All times are Eastern Daylight Time (EDT).

11:30 AM: The Vice President delivers remarks to the annual meeting of the U.S. Conference of Mayors WhiteHouse.gov/live

12:00 PM: Press Briefing by Treasury Under Secretary for International Affairs Lael Brainard, Deputy National Security Advisor for International Economics Mike Froman, and Deputy National Security Advisor for Strategic Communications Ben Rhodes to preview the upcoming G20 Summit. WhiteHouse.gov/live

12:00 PM: The President has lunch with winners of a campaign contest

1:15 PM: The President speaks on Immigration WhiteHouse.gov/live

1:45 PM: The Vice President attends a campaign event in Orlando, Florida

5:10 PM: The President hosts a reception to observe LGBT Pride Month WhiteHouse.gov/live

6:00 PM: The First Family departs the White House en route Joint base Andrews

6:15 PM: The First Family departs Joint Base Andrews en route Chicago, Illinois

8:00 PM: The First Family arrives Chicago, Illinois

WhiteHouse.gov/live Indicates that the event will be live-streamed on WhiteHouse.gov/Live

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The Difference Between Vendors and Consultants - Whiteboard Friday

The Difference Between Vendors and Consultants - Whiteboard Friday


The Difference Between Vendors and Consultants - Whiteboard Friday

Posted: 14 Jun 2012 01:55 PM PDT

Posted by Rhea Drysdale

In this week's Whiteboard Friday, we are going to be discussing the differences between vendors and consultants. We are very excited to have Rhea Drysdale in the studio to present on this very insightful topic. Rhea is one of the leaders in SEO consulting services, but she hasn't always been. Nope, she used to be *cough,* a vendor. Now, there's not anything wrong with being a vendor, but if you've always seen yourself as a consultant it can be quite a shock to discover otherwise.

Vendors and consultants play two very different roles and you may soon discover that you are not exactly the one that you thought you were.

Please share your thoughts on these differences in the comments below. Happy Friday everyone! Enjoy!

P.S. Rhea doesn't really talk about herself in the 3rd person. I wrote this ;) - Kenny



Video Transcription

Hi guys. I'm Rhea Drysdale, CEO of Outspoken Media, and we are an internet marketing company that specializes in SEO, reputation management, link development, and social media marketing. I'm here today in the SEOmoz office, because our team is attending SMX Advanced. Many of you probably know of Outspoken Media because we're doing live blog coverage of the conference, and I hope to meet many of you here today.

I want to go ahead and talk a little bit, with this Whiteboard Friday, about the difference between vendors and consultants. For us, that's a really big thing. At Outspoken Media, we've been doing a lot of organizational development over the last couple of months, and it's really turned our entire business model inside out. The reason that we got there is that we were recognizing that there is a lot of turnover with some of our clients, where there's a situation that a middle manager would, perhaps, leave the organization, and in those cases, we would often get replaced. Why did that happen? It usually happened because we were just seen as a vendor. We were basically like the McDonald's of link development, where someone came in and said, "I want X number of links and I want to improve my rankings and that's it."

But for us, we took ourselves much more seriously. Just because the client didn't, there was some communication breakdown that was taking place, and we had to say, "Okay. How do we position ourselves to be much more trusted, establish a long-term relationship, really get to know their business model, and work with them to grow that business, not just meet, link and ranking metrics?"

So with that in mind, we brought on an organizational development consultant ourselves. His name is Shem Cohen, of Change Events. He's phenomenal, and he sat down and said, "Well, you're a vendor." It really struck me, because I said, "No, I'm not a vendor. I'm not a vendor, because we're actually ranking on our site with SEO consulting, and for years we've been calling ourselves SEO consultants." He said, "I hate to tell you, you really are a vendor." Finally I kind of let that settle and admitted it.

Once I recognized what a vendor was, it helped me to see where we had to get to, to become a consultant. So let's talk about that today, because you might find yourself in the same situation as us, or maybe you're the client and you're not quite sure who you should be hiring. What makes more sense for your business?

On the vendor side, there are a couple of things that make you a vendor. With a vendor, you're probably really good at doing something, which is great. However, that something is probably a highly specialized skill, maybe link development or content creation. It's one kind of area. It's not necessarily informing a full business strategy. So with the vendor, you're usually responsible with taking strategy in from the client, and once you have that strategy, it informs the tactics and the tools and the implementation and the reporting that you're going to do for that client. You're responsible for those areas of your business, but the strategy is coming from the client. It's not coming from you. So that's kind of the main, main thing there is that you're not really informing that strategy, except in rare cases. But for the most part, you're kind of there on a project basis. Maybe there are certain rankings they want to achieve. They really want to bulk up the on-page optimization for a certain category or a new product launch. So you're there for kind of a short-term thing, and maybe you actually do have a long-term contract of a year or more, but in those cases, you're still on reporting on links or rankings. You don't have full access to data. You're not there on an executive level. You're not informing the business strategy on their end. You're just kind of managing your project.

So that's kind of the main thing. What the client is typically having to report to you, and as a client you should remember this, you need to be holding the vendor accountable for the metrics that they have in place and for communicating with a single point of contact. Otherwise, things can kind of get a little bit confusing.

Vendors are great because everybody needs someone to get a job done with highly skilled labor. But, again, that vendor doesn't really maybe have that long-term relationship where, if you're a consultancy, you want to have the long-term relationships that you're building up trust with. You can do a lot more in terms of SEO, and I feel better at the end of the day when we're a consultant. So that's a vendor.

Now what makes you a consultant? A consultant is someone who receives the business goals from the client, but then they communicate the strategy back to the client, and say, "What we're hearing from you is this is what you want to achieve, but in order to do that we're recommending that you pursue these different methods, which we're going to help you with or maybe we're going to actually bring on different resources or we're going to help manage resources within your own organization and staff this project."
You're going to manage, potentially, other vendors if you're a consultant. So you might be bringing other people in on projects that you're in charge of, based on the overarching strategy that you've created for the clients.

This is also going to be something that's usually relationship-based. You're probably getting invited to communions for your clients' kids and weddings and anniversaries, and all those things, because you love each other. So that's much more relationship-based.

You're also informing, on the consultant side, the tool selection for the client. What I mean by that is that, with the client and the vendor, the client will usually just go to the vendor and say, "Hey look, this is our CMS and this is what we have to work with." With a consultant, they're saying, "Hey, we're not thinking that our current CMS is working. What do you recommend?" They're asking you to actually tell them that. That's a really powerful place to be, because now you can effect so much more change.

So internal tool selection and then on the ultimate side of the consultant relationship, you're informing business decisions with the client. That's really the most major thing, is that you're changing their business. You're there. You're in this trusting relationship. On the client side, what you have to remember, with the consultant, is that in addition to communicating your business goals and your resources and your time frame and being truly honest and forthcoming with them, you also need to give them access to your different departmental resources and really let them know what you can truly do and what you're capable of. More important, you need to give them access to your data. Sometimes that can be scary, but we can't come up with a strategy or improve your business unless we have full access to that data. It's reliable and we can help, maybe, sculpt that in analytics and choose the right program that's going to give us the data that we need.

Then lastly, there are probably going to be multiple contacts on the clients' side that the consultant is communicating with. We've probably met IT. In my case, I've probably bribed IT with donuts and gone down and visited them. In addition to that, we know your SEO team. We know your community managers. We know the executives. We've been there. In certain organizations, I know Distilled loves to go down and work out of the office. That's a much more, kind of mutually beneficial relationship. Everyone's on the same page. So there are multiple contacts and that's okay, because you're getting paid to do that kind of work.

So that's the real big difference between vendor and consultant, and hopefully that helps give you a better understanding of where you lie in the hemisphere of SEO, from vendor to consultant, and independent consultants and big consultancies. There are all kinds of different terms out there. So let me know what you are, and hopefully this was helpful. Thank you so much.

Video transcription by Speechpad.com


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Post Penguin Recovery: Link Removal Strategy for Back Link Profile Clean Ups

Post Penguin Recovery: Link Removal Strategy for Back Link Profile Clean Ups

Link to SEOptimise » blog

Post Penguin Recovery: Link Removal Strategy for Back Link Profile Clean Ups

Posted: 14 Jun 2012 04:35 AM PDT

Since the introduction of the Penguin update and what some SEOs like to call the BLOOPER algorithm (Back Link Over Optimisation Penalty Exterminates Rankings), it has become more important than ever to ensure your site has as clean a link profile as possible. Historically, most sites would have at least a few dodgy links, but some may have more than others. This has meant that, sadly, a lot of businesses have been caught in the crossfire with Penguin updates. Part of the update appears to look at the type of sites linking to yours, the anchor text diversity of your profile, and the type of links. For example, an over optimised link profile biased to a number of links for certain anchors could trigger a penalty, so could a number of blog-roll links.

This means that the SEO industry needs to make sure it has an up-to-date link removal strategy in case disaster strikes. Below is outlined a brief strategy to get you started on this process. It will get you to consider the different levels of information you should be looking at, show you how to acquire the information you don't have, and give you a few tips on some removal strategies and reconsideration requests.

Getting Started

The first thing to do is run an extract from all your available sources, such as:

Once these have been collated, you need to look into your own link building efforts, or work carried out by agencies or freelancers on your behalf, ensuring you go as far back as possible. The aim is to have your entire link building data in one area, so that correlation and computation can happen at once.

Hopefully, most of the links you have built are pre-classified into directories, guest blogs, widget links, syndicated content, paid links (!), etc. Get as much of this classification data as possible.

A few notes:

  1. OSE data is typically 2-3 months old, but sometimes it captures things you may not have through other tools.
  2. Majestic is a great tool – the data is much more fresh but the hidden win is the volume of information that it provides.
  3. Ahrefs and Blekko are good for verification but don't use them as your sole source of information; think of them as being supplemental.
  4. Webmaster Tools are key here. A link highlighted in there means Google is telling you explicitly "We know about this link". Every other link you may have may be important, but these are THE most important to action.
  5. Links you have physically built are useful to have records of, and if you haven't kept a rolling record, its time you started. It is easier to get a link removed if you have placed it – there is a contact trail, payment trail etc.

Starting Work

The first steps are to take all the backlink data that you've gathered from various sources and put them into one large spreadsheet. This will allow you to:

  • De-dupe links from various tools – giving you a single view
  • Create a master reference sheet
  • Allow you to compare links and link types

If you have them (and there's no reason why you shouldn't!) you should cross reference all the links you and/or your SEO team have acquired in the last X years, going back as far as possible. These should also be highlighted.

As part of this exercise, the next step would be to highlight all the links that appear in my master list, AND on Google Webmaster Tools. As mentioned earlier, these are all the links Google says they know about explicitly, which means that these should form a large part of your clean up focus. However before you start actioning those links, you need to dig a bit deeper into the data and isolate links into groups. One of the common classifications that should be easy to run in your master sheet would be:

  1. Links from free website facilities, such as wordpress, blogger, weebly etc.
  2. Site wide links – easy to spot if you have too many of the same anchor links to the same page on your site from another site.
  3. Image based links – especially hot linked images or banner placements
  4. Links you have acquired yourself, paid, begged or guest blogged
  5. Directory links – (when cross referenced against your own directory submission lists if you have them)
  6. Highlight non common domain extensions – .edu .ac.uk and other country specific extensions
  7. Majestic has a unique IP report – highlight links on similar IPs

Micro analysing

Sometimes it is difficult to micro analyse your links – especially if you have thousands of root domains. However, with some of the steps above you would have hopefully classified a large portion if not all; but, if you get stuck, you don't need to despair.

Ideally the kind of information you would want for each link you didn't place would be:

  1. Type of site
  2. Type of Link (here you have to set some qualitative targets – explain what a network site looks like for example)
  3. Contact details- on site contact form
  4. Contact details – via who is
  5. Contact details – hosting company
  6. Any advertising information on the site such as "advertise with us"
  7. Details on trademark policy, DMCA policy etc if they exist

There might be further classifications that you require in order to understand your links better, but that depends on how much information you would need if a removal was necessary.

Once you've outlined the details you need per link, you then ought to isolate all the links you need extra information on and compile a new list. This new list would form the basis of a "task" that you could send to a remote worker (who can be hired through a number of means, such as Odesk).

Why use a remote working service? To start with, this is a very manual process and could take a few days. As such, it makes more sense to split it across multiple workers who would cost a lot less than UK / US manpower would. (TIP: if you are an SEO company, you may want to develop a custom scraping tool that compiles a lot of this info together for you!)
Once you have carried this exercise out you are ready to roll (i.e. have as much information as possible to get a link removed)!

Risk Analysis

There are no hard and fast tools and rules for a decent back link risk analysis that. However you should prioritise these attributes of a link as a potential investigation for removal:

  1. It's indicated in Google Web Master tools
  2. Too many links from the same domain
  3. Too many links from the same IP
  4. Authority Domain extensions such as EDU
  5. Spam Domain extensions such as .info / .co / .cc
  6. *Free* hosted sites such as wordpress subdomains, weebly etc
  7. Sites with narrow match anchor texts
  8. Sites with obvious "advertise with us" footprints

Removal Tips

  1. Be Polite. Be respectful. Take the human approach first – and start with links you have identified as high risk.
  2. You may not want to remove all links. You could:
    • Ask for a No Follow added to the link (preserving any referral traffic)
    • Ask for the anchor to be changed if you had gone for anchor abuse historically
  3. Allocate a budget. Some site owners will charge you for a link removal. Be prepared for that and don't be shocked – make sure you negotiate though.
  4. Any blogger / WordPress / Weebly / Squidoo link can, in most cases, be blown with a single complaint. Just make sure that your complaint is justified, and ensure you point out that the subdomain or site is built for SEO purposes, which is hurting your business.
  5. Image links. See if they are using any Trade Mark images, use that as a good contact point – "please remove any unauthorised images and links" If that doesn't work, then consider hitting them with a DMCA.
  6. Check those authority links. In most cases, a UK site has NO reason to have EDU links. Commercial sites have no reason to have .ac.uk links. Be realistic; if those links have been placed, you want to keep them in your high risk category.
  7. Check your IP referrers. If there is a high volume in one particular 513 subnet (majestic is great for this data by the way), chances are a bunch are held by a link network. Try and get these checked. If those sites are still indexed, they are high risk.
  8. Some sites will have "advertising" pages on them which are obviously paid for. Say you want to advertise, but tell them to remove their current link.
  9. Redirects (again, Majestic excels at providing redirected domains inbound data). If they are domains that your clients don't own, contact the registrar. Explain the situation.

Building a case for reconsideration

The more detailed and informative your re-inclusion request is, the higher your chances of the webspam team looking at it favourably. The party line is they want to see "a good faith effort". This means:

  1. Give as much information as possible
  2. Actually try and get offending links removed
  3. Prove that you have taken as much action possible to remove those links and will continue to do so

If you have already gone as far as a reconsideration request, you would probably have done some of the above. But remember to:

  1. Record a spreadsheet saved on Google docs with your efforts at removal and successful removals. Share that link in your reconsideration.
  2. Take screenshots of emails sent to links you were unsuccessful at removing. Host these on Google Drive and give the webspam team access to them.
  3. If you have used networks etc that you can't get the links removed off make sure you outline them.
    As long as you can prove that you have taken every pain and effort necessary to remove those links, you should be in better stead for trying to start reviving your rankings.

Summary

  • Collate all back link data
  • Classify back link data
  • Identify and isolate high risk links
  • Start contacts and record
  • Submit re-inclusion
  • Sit back and wait for response
  • Rinse and repeat

Image credit: cnystrom

© SEOptimise - Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. Post Penguin Recovery: Link Removal Strategy for Back Link Profile Clean Ups

Related posts:

  1. How to clean up your act and your timeline on Twitter
  2. Post Panda: Affiliates Guide to Surviving Google – a4uexpo London 2011
  3. The Ultimate Resource Guide for Link Builders from Distilled LinkLove 2012

Backlink Diver Release -- you can't miss our introductory offer!

Hi,

I'm glad to notify you about the official release of G-Lock Backlink Diver.

With our Backlink Diver you get powerful 4-in-1 SEO software including Backlink Verifier, PageRank Checker, Index Checker and Proxy Checker with harvester.

Here is exactly what Backlink Diver can do for you:

- verify if your backlinks are still alive;

- determine the link type (dofollow, nofollow):

- determine the PageRank of the domain and page linking to your site;

- determine if the linking page is indexed or not;

- provide a detailed anchor text analysis;

- harvest, check and use proxy servers to check linking pages for PageRank and index.

You can download Backlink Diver v1.1 at this page:


Don't miss our introductory offer!

After the official release Backlink Diver is not free anymore. You can use the downloaded version for free for 14 days. After the 14-day trial period you must buy the license to unlock Backlink Diver for 1 year.

If you buy now, you will get Your One Year license for only $20 (full support and program updates included).


Get this before it's too late!

Our introductory price -- $20/year -- is valid till July 31, 2012.

Then you'll pay $39 for the 1st year and $20/year for the license renewal.

Thank you for your time!

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G-Lock Software
julia@glocksoft.com

P.S To learn how to use Backlink Diver and benefit from it, check our tutorials here.

 
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Seth's Blog : Amplify the positive outliers

Amplify the positive outliers

The most efficient way to get the behavior you're looking for is to find positive deviants and give them a platform, a microphone and public praise.

The tribe is hyper-aware of what's being celebrated, and when you celebrate those that are moving in the right direction, you create a powerful push in that direction. It's tempting to spend your time extinguishing bad behaviors, but in fact, spreading the word about the superstars is far more likely to change the culture of your market.



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joi, 14 iunie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Wells Fargo Closes Business Checking Account of "Mortgage Lender Implode-O-Meter" Citing "Credit Risk"

Posted: 14 Jun 2012 07:53 PM PDT

I received an email yesterday from Aaron Krowne, founder of the Mortgage Lender Implode-O-Meter site stating that Wells Fargo had closed a business checking account for ML-Implode citing "credit risk".

I asked Krowne if the account had a line of credit and Krowne answered "No".

So, how can an simple checking account with no credit capabilities be considered a "credit risk"? Even if such a thing is possible, one would think Wells Fargo would discuss the situation with ML-Implode.

Well, think again.

Krowne believes the account closing is more likely related to a recent series of articles by ML-Implode blogger Martin Andelman who "pulled no punches in criticizing Wells Fargo over its foreclosure practices." One of those posts was about a man who allegedly committed suicide following a lost mortgage payment.

You can read about the suicide and the rest of Aaron Krowne's story in his post ML-Implode Gets "Wikileaks Treatment" As Wells Fargo Freezes, Closes Business Account

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


"It's Not the Situation Room" Says Spain After holding Emergency Cabinet Meeting

Posted: 14 Jun 2012 01:49 PM PDT

We now have an official denial of an amusing kind.

With clear reference to CNN's Situation Room with Wolf Blitzer, Spain calls for calm following an emergency cabinet meeting while declaring the meeting was "Not the Situation Room".

I pieced together the following synopsis with help from Google Translate:

Situation Room Synopsis

Following a regular cabinet meeting, Spain's prime minister Mariano Rajoy held an emergency meeting with deputy prime minister Soraya Saenz de Santamaria, Economy minister Luis de Guindos, and Treasury Minister Cristobal Montoro.

The Government says the meeting was not the "Situation Room".

Economy minister Luis de Guindos admits the situation of "tension" while stating "government is not in a cabinet crisis".  De Guindos requested calm.

Recall that on June 1, de Guindos insisted Spanish banks were sound, not needing a rescue while begging the international community for a rescue.

Please see Edge of a Precipice; Doublethink Extraordinaire; Spain in Discussions With US Regarding Bank Aid; Gold Soars; Geithner to the Rescue? for an Orwellian discussion of conflicting statements from Spain.

Here is an unedited snip as translated by Google ...
The four members of the executive who held the unusual meeting refused to answer questions from journalists in the corridors of the House. "President, a message of calm about the situation in the markets?" Was the repeated question. There was no response.

Alarms jumped at the escalation of the Spanish bond, placing the country in a dramatic situation. After two hours and meeting room, which was also attended by director of the Economic Office of Moncloa, Alvaro Nadal, appeared Economy Minister Luis de Guindos, before the media in a speech where the word most often repeated -up on three occasions was the quiet.

"The bottom line is quiet. We have a route that the measures to be taken and we know that indeed there are circumstances that are affecting international volatility and market situation." The owner of the field argued that "the government is on top of issues and topics, is taking action and will continue to take action ... and it will do, not only by the state of today's risk premium, but according to the interests of Spain and the euro zone. "
Quick Translation

  • Spain held an emergency cabinet meeting of four top members in the "Situation Room". 
  • The Bottom line is decidedly not quiet. 
  • Government is not on top of the issues.

Word Cloud

I pasted the entire translated text into the Wordle Word Cloud Generator and came up with this.



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


Bundesbank: Policymakers Should Refrain From "Wild Goose Chase" of Higher Firewalls; Merkel Warns "Limited German Resources"; Sensationalist Silliness

Posted: 14 Jun 2012 09:49 AM PDT

Sensationalist Silliness

Several people asked me to comment on The Telegraph article Germany signals shift on €2.3 trillion redemption fund for Europe by Ambrose Evans-Pritchard.

OK. Here goes. The headline is nothing but sensationalist silliness. There is no shift, and even if there was a shift, it could not possibly come in time.
"It is conceivable so long as there is proper supervision of tax revenues," said a source in the Chancellor's office. The official warned that there would be no "master plan" or major break-through at the EU summit later this month.

Mrs Merkel rejected the Redemption Pact last November as "totally impossible", even though it was drafted by Germany's Council of Economic Experts or Five Wise Men and is widely-viewed as the only viable route out of the current impasse.

Fast-moving events may have forced her hand.
Meaningless Political Statements

The statement, not even from chancellor Merkel, warned there would be "no master plan", only that the idea was "conceivable". That alone proves such a shift, even if it was real, could not possibly come on time.

This is what happened: "Fast-moving events" forced a meaningless statement out of an unnamed source in the Chancellor's office, hoping to calm the market.

Simply put: There is no meaningful shift.

Chancellor Merkel Warns of 'Limited German Resources'

Those seeking a dose of reality should consider Merkel Warns of 'Limited German Resources'
June 14, 2012 12:21 pm

"Germany's resources are not unlimited," she told the German parliament in a declaration of her government's stance before next week's G20 summit in Mexico.

In a forceful restatement of the limits to German action, she reeled off a list of other countries' demands for "big bang" solutions from Germany to solve the crisis, such as jointly-guaranteed eurozone bonds, a bank deposit insurance scheme, and most recently, a French-inspired financial stability package.

"Germany is strong, Germany is the economic engine and Germany is the anchor of stability in Europe. I say that Germany is putting its strength and its power to use for the well-being of people, not just in Germany, but also to help European unity and the global economy," she said. "But Germany's strength is not infinite."
Bundesbank: Policymakers Should Refrain From "Wild Goose Chase" of Higher Firewalls

Inquiring minds seeking a dose of reality should also pay attention to an interesting speech on the The present state of the euro-area sovereign debt crisis by Dr Andreas Dombret, Member of the Executive Board of the Deutsche Bundesbank, regarding the cause and solutions to the eurozone monetary union crisis.

Dombret does not speak for the entire Bundesbank, but I have no doubt his position is a representative viewpoint.

Please consider the following snips on increasing firewalls and entering into monetary unions.
Policymakers should refrain from a wild goose chase in pursuit of ever higher firewalls. Making the firewalls higher and higher will not resolve the crisis. Instead, policymakers should care that firewalls do not fall into a credibility trap owing to unavoidable political or financial constraints.

Generally speaking, a firewall cannot extinguish a fire. It only buys time until sustainable measures become effective. Therefore, the fire has to be extinguished by other means.

A disintegration of the currency union would be linked to extremely high costs and risks. That's why such a scenario cannot be anyone's goal. Yet this does not imply that Germany becomes open to blackmail and promises guarantees without control. This would indeed erode the stability basis of the currency union.

European authorities are not equipped with a supranational right to intervene in national budgets when member states do not apply the rules properly. Therefore, the fiscal compact – which has not been ratified by all member states yet – does not justify calls for monetary policymakers to further extend central banks' balance sheets. Nor does it substantiate any extensive joint liability.

Against this background the recent proposals of a so called banking union appear to be premature. Such a banking union, potentially comprising a euro area deposit-guarantee system, a euro area resolution fund and common euro area supervision for the largest and systemically important banking groups could very well represent a sensible step forward. Yet it has to follow a deeper fiscal union as it would imply significantly increased risk sharing amongst countries.

Introducing a banking union without having established a genuine, democratically legitimated fiscal union would risk undermining the no bail-out clause and the disciplining effects of financial markets on fiscal policy. From a formal perspective it necessitates amending the EU Treaty – meaning it is very unlikely to be a short-term fix to the current challenges mainly related to recapitalisation needs in some banking systems, to political risks and to contagion effects within the euro area.
Dead Before Arrival

The Bundesbank and Chancellor Merkel  are both against "big bang" solutions including joint eurobonds, a bank deposit insurance scheme, a French-inspired financial stability package, the ECB printing money, and every other nonsensical proposal put forth by nannycrats and mindless economists everywhere.

Please mark all such non-solutions dead-before-arrival as noted in Dead Before Arrival, Eight Lessons the EU Needs to Learn .

Deadlock Over What Comes First

Germany insists that a fiscal union must come firsts while Spain, France, and Greece want a banking union of any kind first.

A fiscal union requires massive treaty changes and ratification by German citizens. So would a banking union. The deadlock ensures more delays, but time is up.

Neither a fiscal union nor a banking union is going to happen, nor should they happen and the European monetary union cannot possibly survive in this deadlocked state.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Spain Is Not Greece (And Other Such Anecdotes)

Posted: 14 Jun 2012 08:48 AM PDT

Here is a bit of humor from reader "MF" who writes about who is not whom. Interestingly, all of the following quotes are from 2010. I bet there are far more to add to the list.

"Spain is not Greece."
Elena Salgado, Spanish Finance minister, Feb. 2010

"Portugal is not Greece."
The Economist, 22nd April 2010.

"Ireland is not in 'Greek Territory."
Irish Finance Minister Brian Lenihan.

"Greece is not Ireland."
George Papaconstantinou, Greek Finance minister, 8th November, 2010.

"Spain is neither Ireland nor Portugal."
Elena Salgado, Spanish Finance minister, 16 November 2010.

"Neither Spain nor Portugal is Ireland."
Angel Gurria, Secretary-general OECD, 18th November, 2010.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Any Rabbits Left in the Hat?

Posted: 14 Jun 2012 01:34 AM PDT

Inquiring minds are poring over the ESM Treaty to see how it is supposed to work in theory, assuming it will be ratified by counties with the required 90% of EMU voting rights.

Given that Spain is supposed to get €100 billion from the ESM, some might be surprised to learn ESM Still Not Ratified by Germany, Austria, Belgium, Estonia, Slovakia, Netherlands

Finland is missing from the above group. Finland has signed but not yet ratified the treaty and May Ask for Collateral for Spanish Banking Bailout

Political football is holding up treaty ratification in Germany, with the opposition demanding a Financial Transaction Tax in return for passage.

Assuming the treaty passes, please turn your attention to Article 41.

ARTICLE 41 ... payment of paid-in shares of the amount initially subscribed by each ESM Member shall be made in five annual instalments of 20 % each of the total amount. The first instalment shall be paid by each ESM Member within fifteen days of the date of entry into force of this Treaty. The remaining four instalments shall each be payable on the first, second, third and fourth anniversary of the payment date of the first instalment.

Reader Brett who pointed out that provision writes ...
The ESM total budget for 5 years is 700 billion euros. That means for 2012 the ESM will be able to contribute 140 billion euros. I have shown the breakdown by country (listed in Annex II) and amended another column to show their first contribution.

Spain is clearly in no position to assist their own banks so we can forget about their contribution. We can also forget about contributions from Greece for obvious reasons, and Portugal whose sovereign debt is rated as junk status by S&P.
Capital Contribution Analysis

ESM MemberCapital subscription (EUR)2012 Contribution (20%)
Kingdom of Belgium€ 24,339,700,000.00 € 4,867,940,000
Federal Republic of Germany€ 190,024,800,000.00 € 38,004,960,000
Republic of Estonia€ 1,302,000,000.00 € 260,400,000
Ireland€ 11,145,400,000.00 € 2,229,080,000
Hellenic Republic€ 19,716,900,000.00 € 3,943,380,000
Kingdom of Spain€ 83,325,900,000.00 € 16,665,180,000
French Republic€ 142,701,300,000.00 € 28,540,260,000
Italian Republic€ 125,395,900,000.00 € 25,079,180,000
Republic of Cyprus€ 1,373,400,000.00 € 274,680,000
Grand Duchy of Luxembourg€ 1,752,800,000.00 € 350,560,000
Malta€ 511,700,000.00 € 102,340,000
Kingdom of the Netherlands€ 40,019,000,000.00 € 8,003,800,000
Republic of Austria€ 19,483,800,000.00 € 3,896,760,000
Portuguese Republic€ 17,564,400,000.00 € 3,512,880,000
Republic of Slovenia€ 2,993,200,000.00 € 598,640,000
Slovak Republic€ 5,768,000,000.00 € 1,153,600,000
Republic of Finland€ 12,581,800,000.00 € 2,516,360,000
Total€ 700,000,000,000.00 € 140,000,000,000
Less Spain
-16,665,180,000
Total Less Spain
€ 123,334,820,000
Less Greece
-3,943,380,000
Total Less Spain + Greece
€ 119,391,440,000
Less Portugal
-3,512,880,000
Total Less Spain + Greece + Portugal
€ 115,878,560,000

Subtract Italy crippled with a 120% debt to GDP ratio and Borrowing money at 4-5% to Lend to Spain at 3% and you are under the €100 billion mark.

Even including Italy, the fund for 2012 is nearly all spent.

What happens if Spain needs €350 billion as per analysis from JPMorgan?
What Happens if Italy needs a bailout?

Are there any rabbits left in the hat?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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Spanish 10-Year Bond Yield Hits 6.96%, a New Euro-Era High; 2-Year Bond Yield Hits 5.19%

Posted: 14 Jun 2012 01:22 AM PDT

A big selloff in Spanish government bonds is underway this morning at 3:15AM central. Conditions can change by the US equity market open, but the results are currently very ugly.

At the time of this writing, the yield on 2-Year Spanish Bonds is 5.12% (up 20 basis points) having soared as high as 5.19% (at that time up a whopping 27 basis points).

The yield on 10-Year Spanish Bonds is 6.96% (up 20 basis points), having hit a euro-era high of 6.90%.

The European bond market is coming unglued fast. It will be interesting to see if ECB president Mario Draghi steps in, and with how much "firepower".

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