marți, 7 iulie 2015

The movement to make the Internet more secure through HTTPS brings several useful advancements for webmasters. In addition to security improvements, HTTPS promises future technological advances and potential SEO benefits for marketers.

HTTPS in search results is rising. Recent MozCast data from Dr. Pete shows nearly 20% of first page Google results are now HTTPS.

Sadly, HTTPS also has its downsides.

Marketers run into their first challenge when they switch regular HTTP sites over to HTTPS. Technically challenging, the switch typically involves routing your site through a series of 301 redirects. Historically, these types of redirects are associated with a loss of link equity (thought to be around 15%) which can lead to a loss in rankings. This can offset any SEO advantage that Google claims switching.

Ross Hudgens perfectly summed it up in this tweet:

"HTTPS is a ranking factor". 301 HTTP to HTTPS. Links lose equity through 301. HTTPS gain is less than amount of equity loss. Lose traffic.
— Ross Hudgens (@RossHudgens) June 15, 2015

Many SEOs have anecdotally shared stories of HTTPS sites performing well in Google search results (and our soon-to-be-published Ranking Factors data seems to support this.) However, the short term effect of a large migration can be hard to take. When Moz recently switched to HTTPS to provide better security to our logged-in users, we saw an 8-9% dip in our organic search traffic.

Problem number two is the subject of this post. It involves the loss of referral data. Typically, when one site sends traffic to another, information is sent that identifies the originating site as the source of traffic. This invaluable data allows people to see where their traffic is coming from, and helps spread the flow of information across the web.

SEOs have long used referrer data for a number of beneficial purposes. Oftentimes, people will link back or check out the site sending traffic when they see the referrer in their analytics data. Spammers know this works, as evidenced by the recent increase in referrer spam:

This process stops when traffic flows from an HTTPS site to a non-secure HTTP site. In this case, no referrer data is sent. Webmasters can't know where their traffic is coming from.

Here's how referral data to my personal site looked when Moz switched to HTTPS. I lost all visibility into where my traffic came from.

Its (not provided) all over again!

Enter the meta referrer tag

While we can't solve the ranking challenges imposed by switching a site to HTTPS, we can solve the loss of referral data, and it's actually super-simple.

Almost completely unknown to most marketers, the relatively new meta referrer tag (it's actually been around for a few years) was designed to help out in these situations.

Better yet, the tag allows you to control how your referrer information is passed.

The meta referrer tag works with most browsers to pass referrer information in a manner defined by the user. Traffic remains encrypted and all the benefits of using HTTPS remain in place, but now you can pass referrer data to all websites, even those that use HTTP.

How to use the meta referrer tag

What follows are extremely simplified instructions for using the meta referrer tag. For more in-depth understand, we highly recommend referring to the W3C working draft of the spec.

The meta referrer tag is placed in the section of your HTML, and references one of five states, which control how browsers send referrer information from your site. The five states are:

None: Never pass referral data
```
 
```
None When Downgrade: Sends referrer information to secure HTTPS sites, but not insecure HTTP sites
```
 
```
Origin Only: Sends the scheme, host, and port (basically, the subdomain) stripped of the full URL as a referrer, i.e. https://moz.com/example.html would simply send https://moz.com
```
 
```
Origin When Cross-Origin: Sends the full URL as the referrer when the target has the same scheme, host, and port (i.e. subdomain) regardless if it's HTTP or HTTPS, while sending origin-only referral information to external sites.
```
 
```
Unsafe URL: Always passes the URL string as a referrer. Note if you have any sensitive information contained in your URL, this isn't the safest option. By default, URL fragments, username, and password are automatically stripped out.
```
 
```

The meta referrer tag in action

By clicking the link below, you can get a sense of how the meta referrer tag works.

Check Referrer

Boom!

We've set the meta referrer tag for Moz to "origin", which means when we link out to another site, we pass our scheme, host, and port. The end result is you see http://moz.com as the referrer, stripped of the full URL path (/meta-referrer-tag).

My personal site typically receives several visits per day from Moz. Here's what my analytics data looked like before and after we implemented the meta referrer tag.

For simplicity and security, most sites may want to implement the "origin" state, but there are drawbacks.

One negative side effect was that as soon as we implemented the meta referrer tag, our AdRoll analytics, which we use for retargeting, stopped working. It turns out that AdRoll uses our referrer information for analytics, but the meta referrer tag "origin" state meant that the only URL they ever saw reported was https://moz.com.

Conclusion

We love the meta referrer tag because it keeps information flowing on the Internet. It's the way the web is supposed to work!

It helps marketers and webmasters see exactly where their traffic is coming from. It encourages engagement, communication, and even linking, which can lead to improvements in SEO.

Useful links:

Where did all the HTTP referrers go? (refers to an older spec)
Tighter Control Over Your Referrers
Geek guide to Direct Traffic Analysis
W3C Referrer Policy

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Seth's Blog : Templates for organic and viral growth

Templates for organic and viral growth

Each of these examples is different, but they all share common traits.

Invent a connection venue or format, but give up some control.

Show it can be done, but don't insist that it be done precisely the same way you did it.

Establish a cultural norm.

Get out of the way...

Crossfit

EDM shows

Do Lectures

The Girl Scouts

Airbnb listings

No kill shelters

Vertical TEDx's

Meetup events

Night basketball

Farmers' markets

Rock climbing gyms

Alcoholics Anonymous

Ultimate frisbee leagues

Independent record stores

Grateful Dead cover bands

True Value hardware stores

Habitat for Humanity chapters

• Email to a friend •

luni, 6 iulie 2015

Mish's Global Economic Trend Analysis

Email from Greek Voter With "No Dreams and Nothing to Lose"; Greek 'No' Vote Demographics
Can Greece Print Euros? No, Not Really; Parallel Currencies Now in Use
Krugman Essentially Correct on Greece; Chance of Escape
China Attempts to Prop Up Stock Market After Steep Declines; 1929 Flashback

Email from Greek Voter With "No Dreams and Nothing to Lose"; Greek 'No' Vote Demographics

Posted: 06 Jul 2015 03:30 PM PDT

Every age group but 65 and older voted "No" in the referendum as the following Greek "No" Vote Demographics shows.

click on chart for sharper image

The following email was to a reader of mine. The email comments on the state of affairs in Greece as well as my proposed Way Forward.

"No Dreams and Nothing to Lose"

Nothing to Lose writes ...

I don't give a **** for politicians, I just care about my country.

I am a 30 year unemployed person with a bank account that has less than $10,000 left. What do I have to lose?

I don't have dreams for my life anymore. And I haven't even begun to live. For 5 years we suffered, and we are no better off.

Before the IMF came, Greek debt was around 118% of GDP. After two bailouts, debt is now close to 175% of GDP.

Is that progress?

The official unemployment rate is close to 30%, imagine how much the unofficial might really be.

More than 10,000 have committed suicide. That's about 1/1000th of the population.
They just don't let us breathe.

This picture Sums Up the Bailout Success.

Finance minister (Mr. Varoufakis) said today that an IMF report showed the debt was unsustainable from the start and that financials wouldn't get better even by 2030.

I don't know if the changes your friend proposes will be done.

At least Tsipras is young and unlike of most of the politicians that are deeply corrupted and bribed. Some politicians that have been in the government for the last 40 years have accumulated wealth of more than 2 billion US dollars and have more than 50 houses.

The media propaganda to vote 'Yes' last week was disgusting and more than obvious. Politicians that were hiding in their caves for more than 5 years came out to talk people into voting 'Yes'.

Even politicians from other countries encouraged us to vote for 'Yes'. How would you feel if our politicians encouraged the US citizens to vote for a specific US president?

I expect Tsipras' government to fall because most ensconced EU blackmailers simply don't want him. Perhaps they just to get rid of him once and for all. If they back down and Greece wins something out of the situation, Spain and Portugal could be next.

No road is easy, but I prefer to be free and poor than some banker's or a German politician's economic bitch slave.

I want all of them to get the f*** out of my country and let me be. I also want all the corrupt politicians in jail. Do I ask too much?

No Vote Explanation

85% of those 18-24 voted 'No'. 72.3% of those 25-35 voted 'No'.

The email from "Nothing to Lose" explains the overwhelming 'No' vote perfectly well.

Why should those not at all responsible for the mess suffer just so that some banks and bondholders could get paid? After all, that's who really got bailed out. Greece was not aided in the least.

Nor was Greece overwhelmingly to blame as I noted in ZIRP to NIRP: Virtues of Germany vs. the Vices of Greece; What About "Speece"?

If you think Greece is largely to blame, please click on the preceding link for a strong rebuttal.

Yet, the nannycrats in Brussels and Berlin still don't get it. The odds of contagion are very high. Next up: Spain, Portugal, or Italy.

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

Can Greece Print Euros? No, Not Really; Parallel Currencies Now in Use

Posted: 06 Jul 2015 11:40 AM PDT

There's theory and there's practice. There's also practical matters even if theory and practice are in alignment.

People keep emailing me stories that Greece can and will print euros, so it will never run out of money. Such stories have been running for years actually.

Let's take a peek at a few of them, and why they are all false from a practical point of view.

June 15, 2012: What if Greece Just Printed the Euros It Needs?

Writer Valentin Petkantchin asked "Why would an extreme leftist such as Tsipras bother switching to drachmas – with the disastrous consequences for the Greek population and his own political future – when Greece already has the capacities to simply print euros?"

His twofold view was twice wrong.

On one hand, Greece can create euros in a few "clicks" under the cover of the opaque Emergency Liquidity Assistance (ELA) program. Greece is already estimated to have created up to 96 billion euros to help its banks using the ELA.
On the other hand, the Greek central bank is able to turn on the printing press the old-fashioned way. Greece has the physical means to create any amount of euros it wants.

We have already seen what can and has happened to the ELA.

I will get to the practical side of "Greece has the physical means to create any amount of euros it wants" in just a moment.

July 5, 2015: ZeroHedge wrote Greece Contemplates Nuclear Options: May Print Euros, Launch Parallel Currency, Nationalize Banks.

Says ZeroHedge: "While Greece and the ECB may be on the verge of a terminal fall out, Greece still has something of great value: a Euro printing press."

July 5, 2015: Breitbart writes Greece will Never Run out of Money–It Will just Print More.

Spot the Greek Note

Greece indeed has a printing press. In theory it can print all it wants. In practice, there are at least three problems.

First, Greek Banknotes all begin with a "Y". Here's How to Spot Where a Euro Note is From.

Once again theory and practice come into play. In theory the ECB could negate all "Y" notes on zero notice. In practice, it wouldn't because German citizens who happened to be holding "Y" notes would not appreciate having them become immediately worthless.

However, the ECB could offer a short term exchange period on all "Y" notes, rendering them worthless after a certain date. That would be a practical solution, especially in light of the following practical math.

Practical Math

The Guardian discusses practical math in With a Return to the Drachma Unwanted, Could Greece Just Print its Own Euros?

It is certainly physically capable of doing so: the Greek central bank owns a press in Holargos, a suburb of Athens, that once printed drachma and is currently one of 14 high-security currency printing works across the eurozone producing euro banknotes.

But actually going ahead and printing unauthorised notes would amount to a declaration of war on the European Central Bank.

Aside from moral and legal questions that would undoubtedly arise if Greece were to go ahead and print more of its own euros, however, there is another issue that makes this scenario highly unlikely: according to the ECB's website, the Greek press is only set up to print €10 notes.

It would need to print tens of billions of those to produce enough money to meet its needs.

Theory and Practice Summary

Problem 1: There are moral and legal issues. Printing unauthorized euro notes would indeed be declaration of war.

Problem 2: Practical considerations - Does Greece have enough paper and ink to print tens of billions of €10 notes? I think not.

Problem 3: Greek notes all begin with a "Y". The ECB could easily set a small time window in which one could exchange "Y" notes rendering all such notes worthless before Greece could print enough of them, assuming Greece had the paper and ink in the first place (which it doesn't).

ZeroHedge corrects his error in IOUs It Is: Why Greece May Have A Problem Printing "Rogue" Euro Banknotes

Sadly, filling up holes worth tens of billions with "rogue" €10 bills would be problematic logistically, and we believe, Greece would run out of printing supplies long before it got to printing anywhere close to the required and desired amount, leaving aside all other questions of propriety and legality.

So IOUs it is. The only question is how these shall be named.

Unnamed Parallel Currencies Now in Use

There is no name for the parallel currencies, but corporations are already issuing them.

The Telegraph reports Greece's Yanis Varoufakis Prepares for Economic Siege as Companies Issue Private Currencies.

Businesses in Thessaloniki and other parts of the country are already creating parallel private currencies to keep trade alive and alleviate an acute shortage of liquidity.

Vasilis Papadopoulos, owner of the Maxi paper mill in Katerini, said the situation was becoming desperate for his industry. "I have enough raw materials to last until July 14. If I don't get any more pulp, I will have to close the factory. It is a simple as that. I have 183 employees and I will have to start laying them off," he said.

Mr Papadopoulis, who manufactures paper towels, napkins, and toilet paper - partially for export - said a consignment of 3,000 tonnes of pulp from Finland was stranded in the port of Salonica. "I can't pay the suppliers because the bank is blocked, so they won't release it," he said.

His firm has reached an accord with regional supermarkets to accept coupons or private scrip money in lieu of payment as soon as next week. His workers will then be able to use this paper as a parallel currency at the supermarket to buy goods.

That article came out on July 3. There is no official scrip currency, yet.

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

Krugman Essentially Correct on Greece; Chance of Escape

Posted: 06 Jul 2015 09:46 AM PDT

It's quite rare for me to agree with economist Paul Krugman on much of anything, or him with me.

Today, I think Krugman is essentially correct with his New York Times Op-Ed on Ending Greece's Bleeding.

Europe dodged a bullet on Sunday. Confounding many predictions, Greek voters strongly supported their government's rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that's not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

What's more, they weren't. The truth is that Europe's self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A "yes" vote in Greece would have condemned the country to years more of suffering under policies that haven't worked and in fact, given the arithmetic, can't work:

Debate Over Austerity

I can accept the above paragraphs completely. I disagree with what comes after the colon.

Immediately after the colon Krugman writes "Austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose."

My disagreement is over austerity. I do not label tax hikes in the middle of an economic depression 'austerity'; I label them 'stupidity'. And Greece did not do enough to reduce its bloated public sector.

What Greece most needs is reform of all sorts. There was virtually no reform in Greece on work rules, pensions, ease in starting a company or firing workers. Guaranteed pensions in Greece are higher than in Germany.

Chance of Escape

Krugman quickly gets back on track with his statement "The landslide victory of the 'no' side offers at least a chance for an escape from this trap."

The key words are "at least a chance".

That is precisely the idea I conveyed in Overwhelming "No" Vote; The Way Forward; Congratulations!

Krugman stays on track with a couple of ideas regarding manipulation backfiring.

The most immediate question involves Greek banks. In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn't it will effectively force Greece into introducing a new currency.

Specifically, if the money doesn't start flowing from Frankfurt (the headquarters of the central bank), Greece will have no choice but to start paying wages and pensions with i.o.u.s, which will de facto be a parallel currency — and which might soon turn into the new drachma.

I commented on manipulation backfiring in advance on at least three occasions. Krugman finishes with a bang and a whimper both.

The Bang

And let's be clear: if Greece ends up leaving the euro, it won't mean that the Greeks are bad Europeans. Greece's debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government's sins many times over. If they can't make a go of Europe's common currency, it's because that common currency offers no respite for countries in trouble.

Virtues of Germany?

The preceding paragraph from Krugman is a very shortened version of what I stated in From ZIRP to NIRP: Virtues of Germany vs. the Vices of Greece; What About "Speece"?

If you are primarily blaming Greece for this mess, you are on the wrong path. Click on the above link to find out why.

The Whimper

Krugman's finishing statement was "The important thing now is to do whatever it takes to end the bleeding."

That statement is totally accurate. Yet, I label it a "whimper".

Why? Because Krugman never stated what it would take.

I did. Here are the key snips from my post Overwhelming "No" Vote; The Way Forward; Congratulations!

The Way Forward

The good news stops with the revolt against servitude. The way forward requires three items, all of which seem rather unlikely with Tsipras and the radical left in charge.

Reduced public service sector
Free market reforms (pensions, work rules, ease in firing, ease in starting a business, retirement age, etc.)
Fair, flat tax system

The only way Greece can quickly recover is if it takes steps along those lines. It's possible, but I highly doubt Greece will come close to doing what needs to be done.

Should Greece fail, expect some to gloat "I told you so".

They will be right for the wrong reason. Without a doubt Greece can recover much faster outside the shackles of Troika servitude.

Unfortunately, there is little reason to believe they will take the necessary steps. At least they have a chance. They had no chance under Troika servitude.

It's rare to be in essential alignment with Krugman. Specifically I concur with Krugman on these ideas:

The campaign of bullying with the almost open goal of pushing the current leftist government out of office was a shameful moment in a Europe that claims to believe in democratic principles.
The central bank now faces an awkward choice: if it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn't it will effectively force Greece into introducing a new currency.
In absence of more ELA financing, Greece will have no choice but to start paying wages and pensions with i.o.u.s, which will de facto be a parallel currency and which might soon turn into the new drachma.
If Greece ends up leaving the euro, it won't mean that the Greeks are bad Europeans.

Actually, my articles went up first, so technically he is in agreement with me, at least in terms of what he stated.

However, I rather doubt Krugman and I see things eye-to-eye on the correct way forward.

I want to see free market reforms and an end to Greece's bloated public service sector. Krugman did not state a course, and I am quite certain that's where key differences begin.

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

China Attempts to Prop Up Stock Market After Steep Declines; 1929 Flashback

Posted: 06 Jul 2015 02:04 AM PDT

The overheated Shanghai and Shenzhen markets have lost 29 and 32 per cent respectively over the past three weeks following 7-year highs reached on June 12.

Instead of welcoming a much needed correction, Chinese brokerages and the Bank of China agreed to prop up the market.

Stimulus Short-Lived

The stimulus act has failed already. The South China Morning Post reports Chinese Shares Close Mixed as Stimulus Boost Short-Lived.

Equity markets in China finished mixed on Monday, with Shenzhen stocks losing ground and Shanghai shares clawing their way to positive territory as the weekend stimulus package launched by Beijing failed to ignite markets that have been reeling from a three week long rout.

The benchmark Shanghai Composite Index added 2.41 per cent, or 89 points, to finish at 3,775.91, after rising as much as 7.8 per cent at open.

The Shenzhen Component Index, which is comprised of more smaller and medium-sized companies, lost 1.39 per cent, or 170.29, to close at 12075.77.

The latest move by China came in a commitment from the People's Bank of China providing liquidity for state-backed margin lender China Securities Finance Corp after a weekend meeting of the State Council, China's cabinet, which was chaired by Premier Li Keqiang.

The move underscored the extent of the state's exposure to a debt-driven unwind that has erased some US$2.8 trillion from mainland Chinese stock markets in a three-week long rout.

A total of 21 of the country's largest brokerages announced plans to pool funds to buy shares in the market and some large firms such as developer China Vanke announced a 10 billion A-share buyback plan on Monday to boost their company's shares.

Greece hit the Hong Kong share market hard as shares were battered by a sell-off on Monday sparked by the vote in the European country rejecting the bailout package of international creditors.

The city's de facto central bank, the Hong Kong Monetary Authority, said it is ready to supply liquidity as Hong Kong stocks tumbled over 1,000 points in late afternoon trade on Monday.

"The HKMA stands ready to provide liquidity support to the banking system should it become necessary to do so. Investors are advised to remain calm and to manage their risks prudently."

This wiped off all gains earned since the market rally began on April 8 which at one point pushed the index up by 13 per cent in April and allowed the index to hit a seven-year high above 29,000 points.

The index is now back to the level before mainland Chinese mutual funds were allowed to invest in Hong Kong after a Beijing rule change.

Leverage Risk

Also consider Investors Still Not Convinced by Beijing's Bid to End US$2.8 Trillion Market Rout.

The brevity of a relief rally on Monday morning shows investors are yet to be convinced by the slew of measures announced after a weekend meeting of the State Council, China's cabinet, chaired by Premier Li Keqiang.

"Senior policymakers realise that, because of the leverage in the system, stock market declines create a ripple effect that could damage the wider economy, so this is all about preventing a spreading panic that could trigger a systemic crisis," Lu Ting, head of research at Hong Kong-listed mainland brokerage HTSC, told the South China Morning Post.

An initial 7 per cent rally for Shanghai and Shenzhen A shares in response to measures that included liquidity support for the state-backed margin lender China Securities Finance Corporation from the central bank had faded by the lunch break, with the Shenzhen Composite Index falling back into negative territory.

The People's Bank of China (PBOC) move came after the mainland's biggest brokerages agreed to set up a 120 billion yuan (HK$150 billion) fund to prop up the market and promised not to sell shares in proprietary accounts while the Shanghai index remained below 4,500 points – roughly 20 per cent above its current level. Some 25 mutual fund firms also pledged to inject capital into vehicles they manage.

Analysts at Bank of America/Merrill Lynch likened the package to the "big bazooka" measures promised in 2008 by then US Treasury Secretary Hank Paulson to stop the spreading crisis that was tearing at the heart of the global financial system.

"We assess that there is still a fairly high chance that (the) market may fall sharply again at certain point over the next few months, unless the PBOC makes an open-ended commitment to support the market," they wrote in a note to clients. "If the PBOC becomes the main source of market-supporting liquidity, we expect the central bank's credibility to be hurt and the RMB (yuan) may come under pressure."

Broking firms are at the heart of a web of margin finance – loans to buy stocks – that currently totals around 2 trillion yuan officially, with an estimated 3 trillion yuan more borrowed through unofficial channels by many of the country's 90 million registered investors who generate about 80 per cent of daily stock market turnover through 257 million equity investment accounts.

"A stock market crash would be undoubtedly painful, which if materialising, could shave 0.5 to 1 percentage point off real GDP growth in the following 12 months. In that case, policy easing, both monetary and fiscal, would have to step up," estimated Wei Yao, chief China economist at investment bank SG.

1929 Flashback

Reader Jeremy writes ...

Hello Mish,

The way China is conducting stimulus is eerily similar to what happened right before the 1929 stock market crash. From the SCMP:

"A total of 21 of the country's largest brokerages announced plans to pool funds to buy shares in the market and some large firms such as developer China Vanke announced a 10 billion A-share buyback plan on Monday to boost their company's shares."

Now, looking back at history at the Wall Street Crash of 1929 on Wikipedia.
On October 24 ("Black Thursday"), the market lost 11 percent of its value at the opening bell on very heavy trading. The huge volume meant that the report of prices on the ticker tape in brokerage offices around the nation was hours late, so investors had no idea what most stocks were actually trading for at that moment, increasing panic. Several leading Wall Street bankers met to find a solution to the panic and chaos on the trading floor. They chose Richard Whitney, vice president of the Exchange, to act on their behalf.

With the bankers' financial resources behind him, Whitney placed a bid to purchase a large block of shares in U.S. Steel at a price well above the current market. As traders watched, Whitney then placed similar bids on other "blue chip" stocks. This tactic was similar to one that ended the Panic of 1907. It succeeded in halting the slide.

The Dow Jones Industrial Average recovered, closing with it down only 6.38 points for the day. The rally continued on Friday, October 25, and the half day session on Saturday the 26th but, unlike 1907, the respite was only temporary.

Over the weekend, the events were covered by the newspapers across the United States. On October 28, "Black Monday", more investors facing margin calls decided to get out of the market, and the slide continued with a record loss in the Dow for the day of 38.33 points, or 13%.

Moral Hazard

Whether this plays out anything like Lehman or 1929 remains to be seen. Crashes are rare.

Regardless, it was idiotic that margin debt got as extreme as it did. It is even more idiotic to bail out speculators burnt by margin.

Bailout attempts of this nature will either fail miserably or produce an even bigger moral hazard bubble with more leverage and speculation.

That the Chinese central bank and brokerages would act as they did is a sure sign of genuine trouble in China's banking system.

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