Central Perk: 12 iun. 2011

duminică, 12 iunie 2011

Mish's Global Economic Trend Analysis

Posted: 12 Jun 2011 05:48 PM PDT

Three candidates are touring the globe in their effort to become the next head of the IMF. I believe it is a shoo-in for French finance minister Christine Lagarde but two other candidates have their hat in the ring.

Israel's Stanley Fischer Announces Bid to Head the IMF
Mexico's IMF Candidate is Agustin Carstens

Lagarde backs the ECB stance of no haircuts on sovereign debt. It's certainly the right policy if you are running for the IMF. Otherwise it's flawed.

Note that the French court conveniently delayed a review of charges against Lagarde until after the election.

A French court has postponed a decision on whether to open an investigation into Christine Lagarde, the country's finance minister and front-runner to take the helm at the International Monetary Fund, a judicial official said yesterday.

The Court of Justice of the Republic, a special tribunal that handles legal matters involving government ministers, will announce its decision on July 8, the official said. She was speaking on condition of anonymity, in accordance with French judicial policy.

Questions have been raised about Lagarde's role in getting arbitration in 2008 for French businessman Bernard Tapie, who won $449 million as compensation for the mishandling of the sale of sportswear maker Adidas.

Lagarde has denied any wrongdoing.

She is on a world tour to support her bid to be the next managing director of the IMF. Nominations for managing director closed yesterday, and the body's 24-member executive board is to vote June 30.

A poll in The Guardian asks Would Christine Lagarde make the best head of the IMF?

1. Yes, she's got a distinguished record

2. No, emerging nations need more of a say

Sadly, those are the only two choices the Guardian offers. What if someone does not think much of Lagarde, but does not want to give emerging markets more of a say?

Here is a poll with a lot more choices, including "no one". Note: The discussion above has biased my poll, but at least all the relevant answers are listed.

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

Roubini Eyes "Perfect Storm" and Bond Market Revolt; German Central Bank Says Greek Default Would Not Destabilize the Euro; Time to Short Treasuries?

Posted: 12 Jun 2011 11:59 AM PDT

In a radical departure from the viewpoint of Jean-Claude Trichet, the president of the German central banks says Greek Default Would Not Destabilize the Euro

Bundesbank President Jens Weidmann raised the pressure on governments to agree to a Greek bailout without the European Central Bank taking part in easing the country's debt burden, saying the euro can withstand a default.

Weidmann said the ECB was unwilling to turn its emergency bond-buying program into a "lasting institution" and that Greece's implementation of austerity measures and asset sales was crucial to securing the handout to prevent a default. He spoke in an interview with German newspaper Welt am Sonntag.

"If the commitments are not met, that cancels the basis for further funds from the aid package," Weidmann told the newspaper. "This would be Greece's decision, and the country then would have to bear the surely dramatic economic consequences of a default. I don't think this would be sensible, and it would surely put partner countries in a difficult situation. But the euro would even in this case remain stable."

Weidmann's depiction of a default as a liveable outcome contrasts with warnings from fellow ECB officials Lorenzo Bini Smaghi and Christian Noyer, as well as European Union Economic and Monetary Affairs Commissioner Olli Rehn, who described it as a "Lehman Brothers catastrophe" last week.

Zero Hedge commented on the Radical Change To ECB's Tune

Translation: we now believe our banks are well enough reserved for what comes next. It also means that the rift with the ECB, which will be exposed as near-insolvent courtesy of using Greek collateral for tens of billions of loans that will have to be impaired, is now terminal.

I concur that ZH provides one possible answer, and a logical one.

However, my top answer is that at long last, someone (in this case the German central bank) was stricken with an unexpected dose of common sense and recognizes a default is coming. To mitigate the damage, Weidmann may have lied about the consequences, and the preparedness of European banks.

Is there any reason to believe Weidmann is attempting to do anything but contain the damage in case Greece defaults?

I covered the prospect of lies in Politicians 'Lying Through Their Teeth' on Greek Aid (and Everything Else Too).

Thus, while it's possible European banks are prepared for default, it's equally possible, if not more plausible, they are not, and that Weidmann is lying about it.

Will the Default be Orderly or Disorderly?

A default is given. The question now is whether that default will be orderly or disorderly. If a default is coming, it makes no sense to throw more money at it. Indeed history shows the sooner the truth is admitted the less the haircuts.

The sad reality of the matter is the "Tortured Body Will Surrender" because Greece is Insolvent

Prolonging the agony by extending Greece more loans will only increase the losses and I suggest the German central bank has come to that conclusion.

US Reserves Bailing out European Banks?

The discussion on Zero Hedge regarding The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went is more problematic.

The Fed does not give money away, the Fed loans it. Lending money to foreign banks does not prepare them for a Greek default.

Nor does that loan come "at the expense of the domestic economy" as Zero Hedge suggests, except in the general sense that it fueled a liquidity bubble, driving up asset prices and the price of food and gasoline.

In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!

I respectfully disagree. US banks are not lending because they are capital constrained (not reserve constrained), and because there are too few qualified businesses that want loans.

Giving more reserves to US banks would not do a thing. As I have pointed out on numerous occasions, lending comes first reserves second.

Fictional Reserve Lending Revisited

Once again let's review Fictional Reserve Lending And The Myth Of Excess Reserves

Inquiring minds are reading BIS Working Papers No 292, Unconventional monetary policies: an appraisal.

The article addresses two fallacies

Proposition #1: an expansion of bank reserves endows banks with additional resources to extend loans

Proposition #2: There is something uniquely inflationary about bank reserves financing

From the article....
The underlying premise of the first proposition is that bank reserves are needed for banks to make loans. An extreme version of this view is the text-book notion of a stable money multiplier.

In fact, the level of reserves hardly figures in banks' lending decisions. The amount of credit outstanding is determined by banks' willingness to supply loans, based on perceived risk-return trade-offs, and by the demand for those loans.

The main exogenous constraint on the expansion of credit is minimum capital requirements.

A striking recent illustration of the tenuous link between excess reserves and bank lending is the experience during the Bank of Japan's "quantitative easing" policy in 2001-2006.

Japan's Quantitative Easing Experiment

click on chart for sharper image

Despite significant expansions in excess reserve balances, and the associated increase in base money, during the zero-interest rate policy, lending in the Japanese banking system did not increase robustly (Figure 4).

The analysis by the BIS is consistent with analysis by Australian economist Steve Keen and Fran Shostak as noted in Fiat World Mathematical Model. The simple fact of the matter is reserves have little to do with bank lending.

That aside, I certainly agree with Zero Hedge that the Fed ought not be doing all this lending to foreign banks.

Rubini Eyes "Perfect Storm" Including a US Bond Market Revolt

Please consider Roubini Says a 'Perfect Storm' May Converge on the Global Economy in 2013

A "perfect storm" of fiscal woe in the U.S., a slowdown in China, European debt restructuring and stagnation in Japan may converge on the global economy, New York University professor Nouriel Roubini said.

There's a one-in-three chance the factors will combine to stint growth from 2013, Roubini, who predicted the global financial crisis, said in a June 11 interview in Singapore. Other possible outcomes are "anemic but okay" global growth or an "optimistic" scenario in which the expansion improves.

"There are already elements of fragility," he said. "Everybody's kicking the can down the road of too much public and private debt. The can is becoming heavier and heavier, and bigger on debt, and all these problems may come to a head by 2013 at the latest."

Bond Market 'Revolt'

World expansion may slow in the second half of 2011 as "the deleveraging process continues," fiscal stimulus is withdrawn and confidence ebbs, Roubini also said.

In the U.S., a failure to address the budget deficit risks a bond market "revolt," Roubini said.

"We're still running over a trillion-dollar budget deficit this year, next year and most likely in 2013," Roubini said in a speech in Singapore on June 11. "The risk is at some point, the bond market vigilantes are going to wake up in the U.S., like they did in Europe, pushing interest rates higher and crowding out the recovery."

In Europe, officials need to restructure the debt of Greece, Ireland and Portugal, and waiting too long may result in a "more disorderly" process, Roubini also said.

Time to Short Treasuries?

I discussed the possibility of a bond market revolt on June 1, in a video discussion with Aaron Task and Henry Blodget: Will the Bond Market Eventually Force Congressional Hands?

In response, several people asked me if it was time to short treasuries. The answer is I don't know. In 2008, I advised against that action. In fact, I was steadfast yields would plunge. Shorts were clobbered.

Now, I don't know. There may be a flight to safety trade on, or not. The market could revolt next week or two years from now. This is a big change in my position in 2008 and even 2010.

5-yr, 2-yr, and 1-yr yields all hit new lows in October of 2010. The long-end of the curve did not follow. That was it for me on the long-end, at least for now. The bull market in treasuries is likely over.

The downside is obvious, and the next major move in yields is North. If the Fed does try QE3, the bond market could revolt. Right now, until the Fed does something new, the treasury market can go either way.

I see no particular edge in shorting long-term treasuries now, but that certainly does not mean buy them.

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

SEOmoz Daily SEO Blog

Link Building Management

Posted: 12 Jun 2011 02:37 AM PDT

Posted by Dejan SEO

This post was originally in YOUmoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc.

I love freestyle link building. There is hardly anything more satisfying than getting in the zone and branching out into countless search iterations plucking opportunities one by one, thinking of great content ideas, implementing it, sending it out and watching it hatch. This article, however, is not about that. Instead I will take you through methodology evolved within Dejan SEO team over the period of last two years which helped us manage extremely competitive SEO projects. Large-scale link building campaigns for multiple websites require well-defined workflow, scalability and structure.

Planning Stage

Assessment of Current Backlink Profile
Before getting carried away with anything else it's wise to take a look at the current backlink profile and understand its strengths and weaknesses.

Risk Analysis
During backlink examination process make note of any suspicious links and create a 'liability' list. If you notice obvious linking patterns, request additional feedback from the client.

Questions to ask are:

Do you know anything about this?
Who was link building before us, you or another company?
Did you have a link buying budget?
Is there a list of all paid links?
Do you still have contacts from link sellers and logins with text link brokers?
During what time period did manipulative link techniques take place?

Risk of algorithmic penalty decreases with the size of the site you're working on, and by 'size' I mean its natural organic status. Typically larger brands and well-known websites have complex link profiles with numerous sources of links. A few scattered paid links are probably not worth chasing after. If it's a part of an automated scheme though, something that might poke a quality rater in the eye then it might be worth going through the trouble of cleanup - especially if you work in a competitive industry where spam reporting is a common practice.

Competitive Analysis
Competitive analysis is not only useful for copying links, but also for understanding if a competitor is really a competitor. If you are a brand new book seller and you examine Amazon's backlink profile you will soon learn that Amazon is not really your competitor because you are far from their status. Targeting somebody in a closer niche will help you benchmark properly and help you focus on more realistic link targets.

Qualitative Analysis
While examining your competitors' links it's a good idea to pay attention to quality of their links. This will enable you to prioritise your link building activities from top down by targeting most potent links first and least important links last.

Common tools available for this type of research are:

Open Site Explorer - Accurate data.
Majestic SEO - Deeper than OSE but contains noisy, unfiltered data.
Official Google Toolbar (PageRank) - Single metric. Infrequently updated.

Quantitative Analysis
Search engines do care about numbers of inbound links. When examining numbers you can ignore the total link count and instead focus on unique linking domains and unique C-blocks. This is a no-brainer and more means better. Keep in mind that you've already performed risk assessment and already know if there are any liabilities and weak spots in your backlink profile which may reveal patterns and traces of link manipulation.

Link Velocity
It's good to have milestones in the SEO process. One of them might be to balance and overtake competitors in terms of quantity and quality of links. Pay attention to pace at which competing websites acquire new links as this may affect how your calculations work. Majestic SEO provides interesting graphs which may help understand your competitors' link building efforts in terms of newly discovered links for each month.

Existing Links
Log into Google Webmaster Tools and download all your links. Examine them manually looking for signs of quality (.gov, .edu, big brands). Observe what type of content attracted links and consider creating more of it. Take a look at your most linked pages and confirm your findings. Once the most obvious opportunities are noted run an automated link analysis and let the script do the rest. If you don't have the ability to create own link analysis software use OSE or Majestic SEO as an alternative. If you do use Majestic make sure you authorise your website so you don't pay for the analysis with much needed credits. Analysis of own backlink profile is an essential step which too many SEO professionals skip and ignore. It makes no sense to go hunting for new links if your old links could be fixed and great content ideas generated through observation of linking habits of others. While doing this keep an eye on 404 content and notify webmasters of your new pages and/or implement appropriate redirection to route link juice to new URLs.

Defining Targets

Pages / URLs
This may seem like common sense but your link builders should be well informed about which pages they are to target and which phrases to use when negotiating links. What may seem like an obvious target to you may be something totally different to a link builder. Typically this happens when trying to replace the ranking page with another one which may convert better.

Phrases
Have a clearly defined list of phrases and type of content corresponding to different pages on the site. Include all possible phrase variations within this list and make it available to your link building team. It's a good practice to put priorities or importance percentages in place to balance your targets to desired effect.

Assessment of Assets
Making links is really hard. Don't give your link building team any ammunition and the quality of links will be poor. Before you brief your team, have a chat to the client and examine all existing assets which may be of use.

Linkable Content
It's easy to get a link to a piece of content that deserves it. Why not arm your link builders with highly linkable pages and make their job easier?

Unused Assets
Very often you will find digital content floating around emails, hard drives or just backed up on CD/DVD media - doing nothing. Not to use this type of content is silly. A single case study or a white paper may contain enough material for ten separate pages of content.

Data
Content is sometimes staring you in the face and you're unable to recognise it. This happens very often with data driven companies and even with e-Commerce websites. They collect information all the time without realising it. Using internal data such as analytics, pricing trends and consumer behaviour can provide valuable content which can add value to your content and arm your link building team with additional linkable assets.

Relationships
Yes, relationships are an asset - so you need to understand how the business you work with is connected in the digital and real world. Setup a meeting and go over this with the client and provide some original ideas which may help them think further. It's really hard to start thinking, but once you get warmed up great ideas will start popping up. Record all these ideas and prepare approach strategy and have client approve it. Asking existing partners, customers or suppliers for links could be a sensitive activity and could lead to embarrassing moments and even termination of your SEO contract.

Keep in mind that everything you do online impacts your client's brand online - so try not to spam or upset people with your link building activities. You may not be aware of it, but a single person on your team may be doing it right now - quality control is essential.

Forming a Schedule
Having schedules means being organised, but with link building schedules are more or less an arbitrary structural thing so don't get obsessed if a deadline has been missed. We're dealing with third parties and heavily depend on the speed of response of others.

Choosing Link Building Styles
There are many methods of link acquisition, some are instant, some require negotiation or money transactions. It's a good practice to define link building styles available to the team and set rules around usage. If you don't do this you will inevitably end up with more of easy links and not necessarily the ones that will impact the rankings.

Percentage Allocation
Similarly to allocation of anchor text and target pages define what type of link building activity is allowed or recommended and set guidelines around importance.

Balancing Targeting, Quality, and Quantity
Whether it's yourself or one of your team leaders, somebody needs to keep a finger on the pulse all the time. If you are link building towards ten phrases and one of them pops into #1 spot in the first week it may happen that link building continues for that phrase until the end of the month with other phrases not moving at all. Recognising situations like that can make a big difference for your client's profits. If it has been several months and a particular link building exercise yields no results perhaps it's time to admit defeat and change approach. Support your link building team and make those decisions for them - as they will be too absorbed in the negotiation process to see the big picture at all times.

Budget
Everything you do costs money: staff, content, resources and transactions. Even if you don't buy links, you'll need a clearly defined budget for link building activities which do require transactions (e.g. memberships, sponsorships, paid directories). Prioritise your spending in order of potential impact and provide spend as part of your monthly report. This piece of data will be appreciated by marketers and business owners as it's something tangible and they can easily understand it.

Selecting People
If you have a whole team of link builders it is essential to select the right people to work on the right type of project. Look at personal interests and abilities of individual staff members and keep in mind their current engagement. Load balancing will ensure everyone contributes evenly and you're not overwhelming a single team member as this can have negative impact on their performance.

Setup
Setup of link building activities is not just creation and allocation of tasks, but mostly two way communication between SEO strategists and the link building department where a proper handover of information and assets takes place.

Team Brief
During the briefing session cover the following areas:

The above are not just vague notions, provide solid lists and guidelines that are practical and actionable. You will also need to equip your staff with appropriate email addresses to use for link building and setup professional-looking email signatures. Each team member should already have their own developed online persona which will be looked at by people who are about to give a link or start communication with them. If they don't, then include it as part of the setup process. With directory submission details, keep in mind that you should probably not use own emails or phone numbers when submitting and also client's own email or office address may not be appropriate for public listing. Check with the client before you go sharing their contact details online. Use the brief session to allocate roles within the team in detail so they know who does what (e.g. content, research, negotiation).

Content Generation
I cannot imagine any type of whitehat link building to take place without great content to start with. There are numerous options available: articles, whitepapers, infographics, research material, multimedia content, downloads and templates. Start generating these early as they will take time to implement and often delayed in publishing due to approval process.

Creative Idea Process

Link Building Workflow

Research Activities
Research is the fun part of the link building and is much like surfing the web which can be enhanced with numerous research tools available out there, but not as a way of quality increase, but for productivity. Creative element of the research process remains with the individual performing it. Select your best and most creative people for this task, ideally somebody who understands the industry. Research should yield solid link opportunities and be well documented.

Obstacles in Research Activities
Link building research is meant to be just that - research, and its product is a tangible, actionable list of link opportunities. Anything that happens in the meantime fragments your process.

Distractions
You were researching links and all of a sudden you're watching a funny video, playing a game or reading a news article and you don't know how. It's good to have a break, but you can perhaps leave it for lunchtime.

Fragmentation
Resist the urge and temptation of trying to score a link straight away. Stay on your path and keep recording great link opportunities. You will be a lot more productive that way.

Topical Iteration
There are many paths research can take you and it's likely you will iterate into many sub-topics or your original research theme. Don't fear the scope, keep them coming. If your topics suddenly have no touching points perhaps it's time to zoom out, review your research and pick a new starting point.

Flow Mapping
Flow mapping is more of a productivity problem than anything and can help you get back on track much more efficiently than your million open tabs. One such tool is Voyage (for Firefox) which maps your browsing activity automatically.

Outside Intrusions
Close your email client, messenger, Twitter, Facebook and other forms of distraction. Tell everyone else to keep their questions for after your research is finished.

Recording Targets
Good record keeping is essential. If you don't have link building management software available to you then setup a collaborative spreadsheet and record your findings that way. Sharing link opportunities internally means less repetitive work for everyone and more links for clients.

Balancing Placement
Some links take time and others can happen straight away, surprisingly they may carry equal amounts of benefit in many cases. It's essential to recognise links you can get straight away and continuously grow the backlink profile while you research and negotiate others.

Negotiation
Negotiation is the hard part, so allocate people with best communication skills who are able to organise and followup. Remember to arm them all necessary tools and assets before they start.

Quality Control
Links can have a serious impact on both rankings and online reputation of your client. Continuous spot-checking and regular monthly link analysis is essential in order to stay out of trouble. Remember that no matter what measures you take there can always be new situations which you have not factored in during the planning stage. Google client communication and transparency can help in early detection of problems. This can potentially save both the contract and reputation of your SEO company. One measure which is easy to implement for monitoring of correspondence quality is setup

Result Monitoring
Monitoring the results and overall performance of the SEO campaign is in the hands of an SEO strategist, however having link builders keep an eye on results can be very stimulating. Link building is not an easy task and celebrating success can do wonders to personal motivation of team members. Secondary benefit is that you end up with a better alert system if something should go wrong with the results or if particular phrase needs more or less attention.

Coaching
One of the most essential activities for large teams is regular coaching and sharing of internal knowledge. In-person or Skype and screen sharing sessions are ideal when in small groups of no more than four members. Focus on issues specific to their projects and do live link building, try out new advanced search queries and use the opportunity to collect feedback from people in the field. Outside of real-time coaching it's a good practice to send group email with wins and success stories. For rules and tips setup an internal wiki and allow members to make contributions. Followup regularly on new link building practices and ideas as they are not always adopted the first time - habits can be a touch thing to change. Reward individuals who adopt new strategies and perform well by both bonuses and public praise.

Productivity Tools
One area I did not discuss enough was the software-aided link building simply because there aren't any tools that truly satisfy our needs at present. We employ our own link management framework to record link building activities, opportunities, contact details, correspondence, categories, link building styles and stay on top of performance tracking. In a team of more than twenty link builders a lot of links are generated and it's hard to keep track of double contacting, link drop alerts, link partnerships and complex link scanning and data analysis. For those who are just starting out Ontolo and Raven may be a good solution.

Conclusion

If you are surprised by the amount of work that goes in the setup and execution of our link building campaigns, remember this is not a guide for managing small projects or a single account. Instead I have shared with you a set of measures we put in place to keep large-scale link building operations successful and manageable.

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Seth's Blog : The professional's platform

The professional's platform

If you only show up when you want something, we'll catch on.

If you only learn the minimum amount necessary to get over the next hurdle, you'll fall behind.

If these short term choices leave you focused on the urgent, you'll almost never get around to doing the important.

A professional salesperson refuses to engage in the short-cycle of cold call/sell/move on. An urgent plea from the boss before the end of the quarter isn't enough reason to abandon your consistent approach. That's because cold calls are painful and rarely lead to sales. The professional salesperson realizes that closing a sale and then moving on wastes an opportunity for both you and the person you're working with.

A flustered programmer who grabs the relevant library without understanding its context or the role of the libraries around it will be in the same urgent state in just another few days.

The politician who only shows up when it's time to raise money, probably won't.

We remember what you did when you didn't need us so urgently.

If you're going to make a career of it (and of course, if you want to excel, you will), that means taking the time to understand the texture of your field. It means investing, perhaps overinvesting, in relationships long before it's in your interest to do so.

When it comes down to decisions that matter, your town, every town, is far more likely to support the one who has moved in, put down roots and contributed than it is to rush to whatever bright shiny object shows up for a few days before moving on.