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The Definitive Guide to Awesome Web Content Posted: 21 Oct 2010 05:39 AM PDT Posted by Fryed7 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. What is it we SEOs do? Most of our answers probably boil down to this; we help webpages rank higher at search engines by improving each of the three cornerstones of SEO. The first aspect; technical problems - like indexable content, meta robots tags and URL structures - has been cracked by SEOmoz’s awesome web app. Suddenly we can get a complete dashboard of errors to go and sort - easy. Then of course, then there’s the “trust” issue. Getting authoritative and relevant links; and with Open Site Explorer where advanced link analysis and data is now only a click away. And with the a huge range of link building tips, strategies, and tactics here, it’s fair to say that we’ve got the SEO ninja skills to go and create “trust-worthy” websites. So that leaves content… Content is abstract. It’s irrational. It’s hard for CEOs, managers and influential decision-makers to get there heads around. It’s fantastic. What's the point in what you read? We consume content to solve problems, be entertained and to satisfy curiosity. Based on where you are in a decision making process, you can divide ‘content’ into four different categories. This post is all about defining each category. In an age of tweetdeck, rss, five sentence emails and the internet making us stupid, supposedly, who on earth is hanging around to read meaningful stuff? I mean, it’s a bit over-rated when you’ve got to be checking your inbox every five minutes, keeping current with Twitter, and all these feeds, and then some... IMAGE via: Geek and Poke The reason such technology exists is so we can be on the edge of stuff. We can see and read the latest ideas, news and commentary. We can connect with people who share common interests and start a conversation. That kind of ‘content’ is a) meaningless to those who aren’t in the know and b) not particularly relevant a week or so down the line. This is what is making the web at the moment - current conversation. Everyone can chip-in on what other people have to say. We all have our own circles of influence where we can share and spread ideas. We’re all wittering away with our own little thoughts - it’s not cohesive and it’s unlikely to be useful to an outsider trying to figure it all out - at least on it’s own. I call this Blurb. Blurb Content is conversation. It’s two way. Blurb is exclusive in that it’s meaningless to those who don’t understand the community, who don’t know the secret handshake and who aren’t clued up on the topic - but for those who are “in the know”, blurb is where discussion, debates and drama define opinions and leads to decision making. Within the club, blurb is awesome. We’re lucky on blogs like this to have really great conversations, fleshing out theories and the results from experiments; it attracts intelligent two-way conversation. It’s why you might tweet about it more, because there’s so much value in the conversation. It’s why you’re more likely to take action, because you’ve heard it thrashed out by a handful of the industry brains. It’s why you're more likely to come back for more conversation. Equally, there’s pretty useless blurb. “Great post” “really enjoyed it” or “tldr” which has no real value to other visitors, and therefore no real value to search engines either. The real power of blurb and UGC is things like this (YOUmoz), Threadless and - dare I say it? - Wikipedia. People have been empowered to go and create their own awesome corner of the web. The Rule of Blurb - Culture Valuable two-way Conversation. Conversation is the fuel of the web; and with hundreds of millions of us online, that’s the potential for a big conversation. The problem we face, both as SEOs and marketers in general is initiating that conversation.   Who’s Gonna Break the Ice? IMAGE: UrologyOnline   We can do this two ways:
 1) Create content and ask for conversation (tweet this, leave a comment, let’s connect on facebook) 2) Create a system where you encourage other people to initiate conversation Which way do you think is harder to replicate, will be more scaleable and have more influence across the web in the long term? You said two, right? The question is - how. Let’s go back to the SEOmoz model (because most of us have had a good look around this site and know it well, so it’s doubly relevant): What got you to the point of chipping into the conversation on here? What qualified you to know what you were talking about, and pitch in with something valuable? I bet that this blog post hasn’t taught you everything you know about SEO (and if it did, you’d probably reside to saying: “great post. really interesting stuff” anyways). The reason why is because at some point in your SEO education, you’ve stumbled across someone or something with “the answers”. Something that answers your questions fully. Where somebody has simply communicated the concepts behind SEO to you in one or more pieces of content. A good book... An awesome video... A seminar... The fundamental difference is it’s a one-way conversation. Consider this scenario; your lost in an foreign city - you were supposed to be in an office meeting fifteen minutes ago. What do you do? You ask a local. They tell you how to get there. You listen and do what they say. They’re the expert, so you listen. Example two. You have a medical problem. You go to your doctor. Your doctor examines you and tells you your problem, and prescribes a cure. Sometimes you might be reluctant, but you trust their skills and expertise so you do exactly what they say. You watch a talent show on TV and want to take up the guitar. You find a teacher and hang on their every word whilst trying to work out how to play chords. You may ask them to go over something again, but it’s still a one-way conversation. This behaviour is typical of “newbies”. You’re mind is like a sponge, you're being entirely receptive to someone else's ideas and explanations and because of this you’ll be able to understand and talk about the problem and solution - i.e. you can engage in the conversation on the web. This kind of content focuses and concentrates attention on one specific problem. This is called Definitive Content. This brings up three things: 1) Definitive content cultures conversation and decision-making Definitive Content educates people so, with their expanded knowledge can engage in conversation and make informed decisions. This content is educational. People who are searching for information have already identified that they’re not comfortable making uninformed decisions. They’re looking for “the answer” 2) Definitive content must be remarkable + awesome + white-paper-worthy. In a world where attention is a scarce resource, your definitive content needs to stand out from the crowd and be worth the time spent consuming it. It must be remarkable in order to have conversation about it. It must also be jaw-droppingly awesome so reactions and remarks are positive. And it must be white-paper-worthy in order to address the problem fully without “selling” (that comes later). 3) Blurb is frustrating for learners becuase it isn’t definitive That’s why bloggers teaching stuff bitterly frustrates me. Back to basics, a ‘web log’ was originally meant for journalism, commentary and personal tales, and yet the platform has been stretched over other uses. So people now create niche blogs and post about something specific, perhaps offering tips. So far, harmless blurb… Then they try writing something “definitive”… This doesn’t work for three main reasons: Bloggers are afraid of completing the article – they thrive from the conversations that evolve from a good blog post which doesn’t quite close all the doors. Bloggers are afraid of forcing their readers to spend too much time reading for fear they’ll get bored. Bloggers are dependent on ‘little and often’ readership. Bloggers are possibly even afraid of spending extra time on “definitive content” for fear that they won’t be able to produce enough posts so readers will lose interest. And what’s sad, is that after the first few days after the post is published, the traffic will drop down to a mere fraction of what it was, since your readership has simply “been there, done that”. Congratulations; you’re now in a business where your ‘product’ becomes worthless practically overnight. Blogging is about the person, not the problem. Blogging has it’s place creating blurb content, not definitive content (when you confuse the two, you have a personal problem). In fact, blogging could be considered a response to definitive content; it’s the ultimate example of user-generated content, or rather... user-generated conversation. The early days of SEOmoz saw Rand posting his commentary to SEO news. Now, that’s not a stab at blogging - more a criticism of how people blog. Some of the best blogs about blogging use definitive content in order to bring newbies up to speed so their regular blurb is both relevant and newbies can talk about it. Darren Rowse’s Problogger is one of the biggest and best blogs about blogging, and even so Darren suggests buying the ProBlogger book in order to get all the details on starting up all in one place. And that makes sense, doesn’t it? Everyone’s blogging like sheep, churning out loads of mediocre content. The world doesn’t need more content. It needs more remarkable, definitive content. Suddenly, those creating Definitive Content become somebody. Blogging has it’s place in it’s roots; a platform for commentary on news, personal affairs and creating conversation - not being manipulated out of place creating definitive pieces. (There was a really interesting article about the Death of the Boring Blog Post which essentially outlines this problem from a design perspective. Apparently the answer is 'blogazines' - but this doesn't solve the fundamental problem of answering the problem people are typing in. Pretty is impressive but doesn't necessarily mean it's the best.) Definitive content is the stuff which you reference, re-read, remember and in some cases - recite! Ever been in a position where you’ve been telling someone about an awesome book, or video that you’ve gotten a bit obsessed with? And what’s interesting, is even if it isn’t necessarily “current” or trending on Twitter, you’ll still reference it ‘cause it’s awesome. Hence, Definitive Content is evergreen - which means in the long run it’s a high effort-reward strategy. Definitive Content Strategy Step 1) Find an in-demand niche within a niche. Step 2) Go be king. In emerging industries, rarely have people launched with awesome definitive content. Instead, as the industry matures and begins to fragment - then the niche players can identify and distinguish themselves. A great example is looking at the search marketing industry: Cindy Krum created Rank-Mobile.com ~2007; a website selling her mobile marketing consultancy services. She’s established herself by being the go to girl for all things to do with mobile. She’s enforced this by literally writing the book on Mobile Marketing, and then supplementing this with her blog commentary on industry news- her blurb. David Mihm is ‘local search guy’. His collaboration to create the Local Search Ranking Factors (currently in it’s third volume) with other top brains in the industry helps not only define the fundamentals of search but also positions him and his website as experts. On top of this, he blurbs about local search all around the SEO space. Perry Marshall wrote the book on Google Adwords in 2006 as businesses began to wake up to Adwords and the program really began to take off. He offer expensive consulting-based direct marketing products to his email list which he’s also built up by offering freebie definitive content for signing up (email courses, PDFs, mp3s etc.) SEOmoz! Countless Definitive Content pieces like the Beginners Guide to SEO or the Search Engine Ranking Factors articles which get referenced by hundreds of SEO blogs and professionals. This is then supplemented with an the SEOmoz and YOUmoz blogs with the weekly Definitive 'Whiteboard Friday' videos fueling the fire. Timing is important with creating Definitive Content - I think there are two important factors: Be the first. Do it yesterday All three of these people followed these two principles and suddenly you’ve got four excellent examples where ‘content is king’. No one’s anointed these people as experts - instead they’ve written their way to the top and they were first to do it. Definitive content is all well and good, but if no one know’s about you and it, then it’s not going to be of much benefit. This is where my earlier question of creating content asking for conversation vs. creating a system that asks for conversation comes into play. You’ve created your Definitive Content; now you’ve got to use your network, your social sphere of influence, your ‘leverage’ to promote it. Naturally, they use content - perhaps a review post, video, google ad - or even just a tweet - to introduce your Definitive Content. This is called Manifesto Content and this in itself is a behaviour search engines are also looking for. Manifesto Content does the simple job of introducing the problem, introducing you, and introducing your way of answering that problem It pre-sells your Definitive Content. Think about the weight of links in this context; the origin of your inbound links will contain content of some sort (at least to provide value to a visitor) - that content is Manifesto Content. It's kinda like a CV for the Definitive Content, and the better the Manifesto Content, the better your first impression - and first impressions count. IMAGE: CartoonStock.com Manifesto Content distribution is a better way to consider link building. Link building is a game about numbers; Manifesto Content distribution is about building unmeasurable things like trust and credibility - which shows up to search engines as “link getting”. Do link directories offer great introductory content to you and your website with just a title, few lines of text and dozens of other pieces of similar content around them? Do guest posts or interviews for relevant related blogs offer great introductory content to you and your website? Does a Twitter ‘win a widget’ competition asking for retweets offer great introductory content? As I said at the beginning, content is abstract, hence the philosophical-esque questions! However, this thinking is essential if you’re to come up with your own Manifesto Content   marketing strategy. Here’s a handful articles on getting your Manifesto Content shared: Top Ten Things You can do to Get Blogged The Internet Marketing Guide to Infographics Seven Scientifically-Proven Ways to get Shared on Facebook Reel SEO Viral Video Tips The Secret Strategies behind many Viral Videos Learning the Art of Guest Blogging Top Ten Viral Email Tips The size, strength and distribution of your manifesto content will determine the overall strength of your web content, and of course good SEO practices of ensuring it gets indexed, it targets specific problem keywords and is “technically tidy” to ensure your Manifesto Content gets targeted traffic and click-throughs. Great. Now Show Me the Money. Now, you’ve been introduced as a credible source of information, you’ve educated them and cultured conversation-making abilities so they can engage in blurb. They’re now in an informed discussion about their problem, and likely, your solution if you target your blurb correctly - and all the while, you’ve been earning trust and credibility as someone who know’s what they’re talking about... Why wouldn’t they consider your solution you’re selling? This removes the need to “hard sell”. You don’t need to be a copywriting jedi because you’ve already built a level of equity that can’t be copied, even by the best copywriters - they’ve already know you and trust you. To hard sell would simply be a sign of insecurity and stupidity. That said, you need to be able to write sales copy with confidence so you don’t fudge the important bit! Luckily, the brains at Copyblogger will teach you how to ‘sell without selling’ - here’s their best definitive article on writing sales letters (with part 2 and part 3) Roundup That’s rather a lot to take in; so a quick roundup. The best way to illustrate how content strategy works is by comparing it to a jet engine. A what...?! Bare with me on this. A jet engine, at it’s most basic, has four parts. A front fan, a compressor, an ignition stage and the back turbine with a nozel - or very simply; suck, squeeze, bang, blow (excuse the innuendoes) - and these exactly map onto our four-part content funnel. It’s essential that they all work together in order to produce results, like this: Manifesto content is the Suck. It draws people into your content funnel. Definitive content is the Squeeze. It focuses attention and educates prospects. Blurb is the Bang. It’s where conversation and the magic happens. Copy is the Blow. It’s where decisions become actions and the whole thing moves forwards. What I like particularly about this analogy, is that the actual physics matches the real life SEO analogy: Most of the power of the engine comes from the front fan - the size, strength and distribution of your Manifesto Content will correlate to the overall output of your web content strategy Without the compression stage, air doesn’t have nearly as much pressure for when it’s ignited - without Definitive Content, your content funnel doesn’t have nearly as much focus and attention to culture conversation The burning reaction releases energy - conversation leads to decisions being made, opinions being formed and CHANGE. In a jet engine, “exploding” gas is only going to go backwards - highly targeted, focused prospects with a problem, who are educated about their options and are engaging in conversation about their problem - are likely to make decisions (and buy). The flow of fuel keeps the engine going round - the flow of conversation keeps the content funnel functioning and growing. What this also helps explain is why guerilla-content SEO is so much better than ‘traditional’ advertising which is more like a rocket. Create a reaction of advertising bucks and “targeted” prospects and point it in some direction is complicated (it’s rocket science) and not sustainable without continued effort. This compares to the Manifesto > Definitive > Blurb > Copy content strategy which is “evergreen” once you’ve created it. A ‘definitive’ piece of content will always be there, as will the articles linking to it. What it means is your web content strategy (including search) is dependent on how you culture conversation. Let me introduce the concept of Tribes -  Tribes are created when you connect people around a cause Seth’s talk on TED explains... (If you haven’t come across Seth Godin before, you’re in for a treat Everyone who I’ve worked with who I’ve asked to watch this video has viewed it all the way through said it was awesome. Net result? We’ve both gotten more done. So take just 17 minutes out and watch Seth’s talk to understand why Tribes will shape our future. If you really don’t have time now, keep this tab open and watch it over lunch or something.) Finished the video? This is what I see SEO as - getting in the problem solving business... and not just solving your problems. “I’m not ranking number 1 - I’ll go and build some links”. Put that in context on Tribal SEO. “I’m not ranking number 1 - I’ll go and promote manifesto content”. Creating a tribe will drive your content. Tribes need to connect via blogs, online communities, social networks - in any case you need to be at the helm and leading. We have the responsibility to create awesomeness. You’ve heard the ‘Voice of Google’, Matt Cutts, bangs on and on about creating content for visitors vs. creating content for search engines. He’s absolutely right - if you’re trying to make crummy content and webpages rank, just like trying to sell crummy products and services, then shame on you! I’m gonna end with a couple of questions and an apology. I've broken one of the cardinal unwritten rules of blogging (keep it short, stupid!) and you've probably spent waaaay too much time reading and watching all this. Whoops... But then again, does Defintive Content need a cap on the length. Shouldn't it be as long as it needs to be? Which begs the question, how would you classify this post based on the scale I’ve talked about? Is it Manifesto Content? Does it introduce you to new problems, people and answers? Is it Definitive Content? Sure, I introduce a few ideas and articulate them in a way you’ve perhaps not seen before - but I haven’t “written the book” on Tribal SEO so to speak. Heck, I’m just a kid - why would you share and bookmark this? So far this is just a hypothesis - I need to enlist help in defining and proving these principles, which leads me to... Blurb. Is this merely a topic for discussion, something that’ll be todays topic of conversation and yet will be forgotten by this time tomorrow? Or is it copy? Me, shamelessly trying to promote myself or the Mozzers in a bid for private gain! Secondly, how do you see this Manifesto > Definitive > Blurb > Copy content cycle fit in with this Whiteboard Friday concept of ‘The Path to Conversion’ and your business? And finally, do you think that ‘Tribes’ make an effective long-term SEO strategy in your business, or any other business that springs to mind? Let’s chat. Do you like this post? Yes No

Are Exact Match Domains Too Powerful? Is Their Time Limited? Posted: 20 Oct 2010 02:26 PM PDT Posted by randfish Last night at the SEOmoz meetup in Avi Wilensky's incredible office space, a frequent topic of discussion both during the presentations/Q+A and in small group networking before and after was the propensity for Google (and Bing) to bias towards exact match domains in the rankings. How big an issue is exact-match domains? Let's look at some data from our correlation analysis from SMX Advanced earlier this year: Just by itself, exact match is remarkably high in correlation to rankings. No other on-site/on-page factor we examined even came close. Granted, that's not causation, and it could be other factors influencing those impressively high rankings. Let's get a bit deeper and more granular around the issue: Holy what?! Actually, this probably isn't very surprising to most SEOs. The second highest correlation we found of anything - links, on-page elements, URL factors, keyword usage, third-party metrics  (excluding only Page Authority scores, which are specifically designed to predict Google rankings) was exact-match .com domain names. Yeah - it's powerful stuff. We can also look at the raw prominence (less interesting for determining what might help a page/site rank, but useful for this application: That's saying that more than 1/4 and nearly 1/3 SERPs contain an exact match domain in the top 10. The only thing more prominent? No surprise it's keyword-in-the-domain matches (but not necessarily exact). So, in the first pie chart set, we'd say that for the query "org chart" only orgchart.* type domains would count. In the second, something like myorgcharts.com, greatorgcharts.net, etc. would fit the pattern. These appear in around half of all SERPs on both engines. The question is, with search results in so many sectors becoming so overrun with obviously over-SEO'd, spammy, manipulative and sometimes, downright poor quality exact-match domains, is Google bound to take action? Blueglass' Chris Winfield argued that Google is bound to giving outsized benefit to exact match domains because of the brand intent behind so many queries. Since a search for "Alaska Airlines" or "MSN" or "NY Times" is likely to want exactly those websites in the first position, Google's overcompensating in the broader algorithm by biasing towards these exact matches. Many in the audience agreed (and I personally find this viewpoint credible, too). Interestingly, some of the more experienced, ear-to-the-ground SEO types indicated that they'd heard (or believed) that Google would soon be taking action against exact match domains. One person, who wasn't at the event, but whom I trust a great deal (and will remain anonymous) indicated they thought the next 6 months would bring about this shift. Personally, I'd welcome it as both a searcher and an SEO. I think Google's relied on exact match for far too long, and it would give them a substantive quality boost over Bing to have more subtlely in the domain matching algo. But, as always, I'm curious to hear what you think - is this really a weakness/problem? Should Google take action? Do you think they will (particularly given the poor track record of improvements like this in the past year or so)? A completely unrelated p.s. Linking to Twitter profiles (as I did at the start of the post) is curious. Notice that the URLs if you're logged into Twitter look like http://twitter.com/#!/aviw instead of http://twitter.com/aviw. Now,this could be an incredibly dumb move, but actually, both Twitter and Facebook are using Google's new AJAX crawling protocol. Not as SEO-ignorant as they look, eh? :-) Do you like this post? Yes No

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Daily Snapshot: A Backyard Discussion on Women and the Economy

Your Daily Snapshot for Thursday, October 21 2010   Photo of the Day   First Lady Michelle Obama and Sam Kass, Assistant White House Chef and Food Initiative Coordinator, left, work with students from Bancroft and Tubman Elementary Schools during the White House Kitchen garden harvest on the South Lawn of the White House, Oct. 20, 2010. (Official White House Photo by Samantha Appleton) Today's Schedule Today, the President will meet with a family at their home in Seattle, Washington. Following the meeting, the President will hold a discussion on women and the economy with families from the area. All times are Eastern Daylight Time 12:00 PM: The Vice President attends an event for Governor Martin O'Malley 1:00 PM: The President meets with Seattle family 1:10 PM:  The President holds a discussion on women and the economy  2:40 PM: The President delivers remarks at a rally for Senator Murray 4:20 PM: The President departs Seattle, Washington en route to San Francisco, California 6:00 PM: The President arrives in San Francisco, California 8:40 PM: The President attends an event for District Attorney Kamala Harris 10:00 PM: The President delivers remarks at a DNC dinner  Indicates Events that will be livestreamed on WhiteHouse.gov/live. In Case You Missed It Here are some of the top stories from the White House blog.  Providing Jobs and Economic Security for Amerca's Women Valerie Jarrett discusses a new report that outlines the economic landscape for women today and details many of the ways the Obama Administration is committed to strengthening America’s economy and providing opportunities for women across the country. "One Work of Art, One Relationship, One Lifetime at a Time." First Lady Michelle Obama celebrates exemplary programs from across the country that reach underserved youth by hosting the National Arts and Humanities Youth Program Awards. Report Shows The Recovery Act Creates Jobs and Changes Lives for the Better Secretary of Agriculture Tom Vilsack releases a report outlining how Recovery Act funds allocated to seven programs administered by USDA Rural Development have sparked economic growth, created or saved over 300,000 jobs, and funded projects in almost 3,000 counties. Get Updates Sign up for the Daily Snapshot Stay Connected     Facebook Twitter YouTube Flickr iTunes         This email was sent to e0nstar1.blog@gmail.com Manage Subscriptions for e0nstar1.blog@gmail.com Sign Up for Updates from the White House Unsubscribe e0nstar1.blog@gmail.com | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Helping American Women Get Ahead

Dear Friend, Even when our economy is strong, it is difficult for women to juggle the demands of a career and a family.  And during the tough economic times of the past few years, that juggling has become increasingly challenging for many working mothers.  That’s why President Obama has recognized that we can never lose sight of working women and mothers as we fight day after day to climb out of this economic hole. Women make up nearly 50 percent of the American workforce, and in almost two thirds of American families women are the primary or co-breadwinner.  But even in 2010, women only earn 77 cents on the dollar compared to men, and women are still underrepresented in the highest levels of management. Since taking office, President Obama’s number one priority has been growing our economy and creating good jobs for all Americans. Many of the policies his Administration has put into place to turn our economy around have been particularly important for women. Here are just a few of the important steps the Obama Administration has taken to help support women throughout their education and careers: Train and educate women for quality jobs.  The President has focused on opportunities for training and educating all Americans for the jobs of the future.  For example, women, who make up the vast majority of nurses and about half of all medical school enrollees, will benefit from the $320 million in healthcare workforce development grants in the Affordable Care Act. Promote economic expansion and job growth for women.  Under the Recovery Act, nearly 12,000 SBA loans have been made to women-owned small businesses, helping to get much needed capital into the hands of women entrepreneurs. Support working women at home and in their jobs. Through the Recovery Act’s Make Work Pay tax credit, 74 million American women had an average of $600 more in their pocketbooks in 2009.  In addition, the President proposed nearly doubling the Child and Dependant Care Tax Credit for middle class Americans.  The President is committed to equal pay for women; in fact the first bill he signed into law was the Lilly Ledbetter Fair Pay Act. Support women in retirement and between jobs.  From July 2008 to August 2010, 6.9 million women and their families were helped by the extension of unemployment insurance.  Social Security plays a vital role for retired women who make up 58 percent of all beneficiaries, and President Obama is committed to strengthening and protecting it. We have a lot of work left to do, but without these policies, millions of American women would have struggled over the past few years.  You can learn more about what we’re doing to help American women get ahead here: http://www.whitehouse.gov/women Unfortunately, many Congressional Republicans have fought us every step of the way – opposing the economic policies that have helped millions of American women survive during the recession and begin to make progress.  Women are a crucial part of the American workforce and our economic recovery, and we must do everything in our power to support them.  Sincerely, Valerie Jarrett Senior Advisor to the President and Chair of the White House Council on Women and Girls P.S. You can stay up to date on what this Administration is doing to support women by signing up for the Weekly Women’s Update email: http://www.whitehouse.gov/womens-weekly-update   This email was sent to e0nstar1.blog@gmail.com. Unsubscribe e0nstar1.blog@gmail.com | Privacy Policy Please do not reply to this email. Contact the White House The White House • 1600 Pennsylvania Ave NW • Washington, DC 20500 • 202-456-1111

Seth's Blog : The sales you don't make

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The sales you don't make

Do a search on great jazz singer "Emily Barlow" in Amazon and you'll find... nothing. That's because her first name is spelled Emilie and Amazon gives up.

Do a search on Lord of the Flies and you'll find tons of matches, but none of the top ones are for the book--they're all for expensive annotated or educator's editions. Broken search = no sale.

It's extremely difficult to figure out why people walk out of your store, throw out your brochure, leave your site... but in fact, this is fertile territory for dramatically increasing sales. You won't find what's broken if you don't look.

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Mish's Global Economic Trend Analysis

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• Why Do Lenders Foreclose Rather Than Make Principal Modifications?
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• Keynesian Nonsense Falls Out of Favor in UK - Thank God!
• French Strikes Reach 7th Day; Japanese Economy at Standstill; China Hikes Interest Rates; Leaked Docs say 10% of UK Public Sector Workers to be Fired

Why Do Lenders Foreclose Rather Than Make Principal Modifications? Posted: 20 Oct 2010 06:03 PM PDT Tom Lawler, founder of Economic & Housing Consulting, and a former director and senior vice president at Fannie Mae, provides Answers to Your Questions on the Foreclosure Crisis. I pickled that link up from Calculated Risk who highlighted one question. Here is a different question I want to discuss in more depth. Q: Why does it make more sense for a bank to foreclose rather than writing down the loan to keep people in their homes? I know many folks who can qualify, based upon current income and credit, for loans based upon the homes' current market values. (Most homes are down 50% here from 2004-7.) However, the bank would rather foreclose than renegotiate with the current owner. Many of these folks are current on taxes, HOA, etc. Is it an issue of spite to discourage strategic defaults? A: This is a loaded question. While many lenders/servicers have not done a great job in dealing effectively with borrowers who are struggling to make mortgage payments, by the same token many borrowers whose home values have plunged and have made no payment for well over a year want the banks to write down their mortgage balance to today's distressed-value levels, so that if home prices later go up, they can reap any future appreciation even if their home value remains below their old mortgage balance. Banks and lenders, not surprisingly, are not crazy about doing that! Instead, most offered modifications that are intended to reduce a borrower's payment, but not in any meaningful way reduce the borrower's mortgage balance. So let me state it differently: Suppose you had lent money for someone to buy a home for, say, $300,000 with a – crazy as it sounds – $300,000 mortgage. Property values then fall, and that person just stopped making any payments, and said that he/she wanted you to write down the mortgage balance to, say, $150,000, because that's what the home is worth today. You counter with an offer to temporarily reduce the borrower's interest rate to, say, 3 percent from 6 percent. But the borrower says, "Fuggedaboutit, I want my mortgage written down to $150,000, so if home prices rise again, I'll make money!" How would you react? The question says that a bank "would rather foreclose than renegotiate." But what is the right renegotiation? The Seen and Unseen Lawler answered the question with two questions, but there is another factor at play that is far more important. I am surprised he did not mention it. Here's the real deal: If lenders gave loan modifications to everyone who was seriously underwater, it would openly invite everyone who was underwater to stop paying their mortgages. Thus, while it may appear to make economic sense to work out a principal reduction (the easily seen effect suggests the lender would lose less by working out an arrangement than opting for foreclosure then having to unload it at fire sale prices), it is highly likely to be a losing strategy in the long run because it creates a moral hazard of opening inviting everyone who is underwater to stop paying their mortgages. It is important for lenders to maintain as many consequences as they can (foreclosure is a serious consequence), or they will encourage everyone who is underwater to stop paying their mortgages. Principal reductions would be a mistake from this point of view. It is always important to consider the seen and the unseen effects of an action. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Largest Title Insurer Demands Lender Indemnity Covering Foreclosure Fraud; Is this Kicking the Can or Part of the Solution? Posted: 20 Oct 2010 02:01 PM PDT In wake of robo-signing and other foreclosure fraud including cases of mortgages being sold more than once, the nation's largest title insurer, Fidelity National Requires Banks to Sign Foreclosure Warranty Fidelity National Financial Inc., the largest U.S. title insurer by market share, will require lenders to sign a warranty assuring their paperwork is sound before backing sales of foreclosed homes. An indemnity covering "incompetent or erroneous affidavit testimony or documentation" must be signed for all foreclosure sales closing on or after Nov. 1, the Jacksonville, Florida- based company said in a memorandum to employees today. The agreement was prepared in consultation with the American Land Title Association and mortgage finance companies Fannie Mae and Freddie Mac, Fidelity National said. Bank of America Corp., the biggest U.S. lender, agreed to a similar contract with Fidelity National on Oct. 8, the same day it extended a freeze on foreclosures to all states amid concern by federal and state officials that lenders are seizing homes without properly reviewing documents. The bank plans to start resubmitting foreclosure affidavits next week. Attorneys general across the country have opened a joint investigation into foreclosures, saying they will seek an immediate halt to any improper practices at mortgage lenders and loan servicers. Title insurers use their records and public documents to verify a seller is the home's true owner and that the property is free from liens. They collect a one-time premium at the closing of the purchase and pay costs that may arise if someone disputes the new owner's right to the property. The indemnity agreement requires lenders to protect title insurers at their own expense from "any and all liability, loss, costs, damage and expense of every kind" if errors arise in foreclosure procedures, according to the document. "This is a standard all lenders should follow," said Kurt Pfotenhauer, chief executive officer of the American Land Title Association, a Washington-based trade group. "The sooner that indemnification agreement is adopted market-wide, the more confidence investors can have in this foreclosure market." Kicking the Can or Part of the Solution? Zero Hedge, in Largest US Title Insurer To Demand Indemnity And Foreclosure Warranty From Banks writes ... "The American Land Title Association, which is nothing but a lap dog for the bankers, of course applauded this development. At this point it is only a question of who can kick the massive mortgage fraud can the farthest down the road, before it all comes crashing down." I respectfully disagree. Whether American Land Title is anyone's lapdog is irrelevant. The pertinent question is whether or not the arrangement makes any sense. I suggest it does, and I certainly am not a lapdog for the banking industry. That Bank of America is willing to indemnify insurers is a sign that it does not believe it will lose much by the indemnifications, and/or that it simply needs to get the issue behind them. Either way, and most likely some of both, we really do need to clear the backlog of foreclosures. It is easy to get distracted by the mess and attack every proposal. The pertinent point is this arrangement helps achieve the badly needed result of reducing the backlog of foreclosures, which in turn is necessary to reduce the massive housing shadow inventory. Thus, this agreement is very much a part of the solution, not a part of any can-kicking exercise. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Keynesian Nonsense Falls Out of Favor in UK - Thank God! Posted: 20 Oct 2010 12:44 PM PDT At long last, Keynesian nonsense is recognized for the nonsense that it is. The New York Times reports In Britain, Keynesians Fall Out of Favor In Britain, George Osborne, chancellor of the Exchequer, delivered a speech on Wednesday that would have made Keynes — who himself worked in the British Treasury — blanch. He argued forcefully that Britons, despite stumbling growth and negligible bank lending, must accept a rise in the retirement age to 66 from 65 and $130 billion in spending cuts that would eliminate nearly 500,000 public sector jobs and hit pensioners, the poor, the military and the middle classes because of what he insisted was the overwhelming need to reduce the country's huge budget deficit. In Ireland, where the economy is suffering through its third consecutive year of economic slump, Keynes is doing no better. Devastated by a historic property crash and banking bust, the Irish government is preparing another round of spending cuts and tax increases. Combined with what Dublin has already imposed, the cuts could add up to as much as 14 percent of Ireland's gross domestic product, an extraordinary amount for a modern industrial country. Ireland's budget deficit reached 32 percent of total economic output this year. Indeed, across Europe, where the threat of a double-dip recession remains palpable, what is most surprising is not simply that governments from Germany to Greece are slashing public outlays but that the debate hinges more on how fast to do so rather than whether such substantial cuts are the right thing to do under the current circumstances. "Everything Keynes established about the primacy of maintaining demand at a steady pace is gone," Brad DeLong, a liberal economist and blogger at the University of California, Berkeley, said mournfully. Along with other noted liberal economists like Paul Krugman and Joseph Stiglitz, Mr. DeLong has long argued for more stimulus spending in the United States and abroad to lift growth, even if deficits rise temporarily as a consequence. Brilliant Idiots Every day I ask myself how allegedly brilliant economists cannot see that continuing down the current path will lead to a situation similar to what happened in Greece. It is impossible to spend one's way out of a mess when the problem is unsustainable spending. None of these Keynesian fools ever address the question as to what happens when the stimulus is cut off. None of them can see that Japan has proven in spades that neither Keynesian nor Monetarist solutions did anything for Japan but increase debt. More government spending cannot possibly work when the problem is too much government spending in the first place. Finally let's address Brad DeLong's statement "Everything Keynes established about the primacy of maintaining demand at a steady pace is gone." To that I say Thank God! The idea that governments or central banks can maintain demand at a steady pace is sheer idiocy. We have the dot-com bubble, the housing bubble, and the debt collapse to prove it. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

French Strikes Reach 7th Day; Japanese Economy at Standstill; China Hikes Interest Rates; Leaked Docs say 10% of UK Public Sector Workers to be Fired Posted: 20 Oct 2010 02:37 AM PDT Global imbalances in a number of countries are back on the front burner. Here is a roundup of news from France, China, Japan, and the UK. France hit by new wave of strikes over pension reforms The BBC reports France hit by new wave of strikes over pension reforms Almost half a million people have taken to the streets of France in a sixth national day of action against planned pension reforms, officials say. Strikes have hit transport and education, 4,000 petrol stations have run dry and police have clashed with protesters in several cities. Shops were looted in Lyon and cars were set on fire in a Paris suburb. President Nicolas Sarkozy appealed for calm but insisted he would press ahead with plans to raise the retirement age. The BBC's Christian Fraser, in Paris, says there is a feeling that the demonstration could turn angry, with a noticeable change in atmosphere since last week. Strikes Hit Refineries The BBC reports French strikers intend to keep going for seventh day The scale of disruption has begun to affect large parts of society, with strikes at France's 12 oil refineries hitting fuel supplies hard. Prime Minister Francois Fillon announced plans to end the shortages by asking oil companies to share their reserves to replenish stocks at petrol stations. Overnight, police lifted the blockade at three fuel depots in Le Mans, La Rochelle and Donges. However, AFP news agency later reported that strikers had again blocked the depot at Donges. Officials said 379 secondary schools were either blockaded by pupils or had suffered some disruption, the highest number since the protests began at the start of September. In some areas, schools became a focus for violence. Outside a secondary school in the Paris suburb of Nanterre, youths threw stones at police who responded with tear gas. For the second day running, cars were overturned and set alight in Lyon. There were also disturbances in Mulhouse and Montbeliard in eastern France. China Hikes Rates to Curb Asset Bubbles Bloomberg reports China Could Increase Rates More The central bank of China yesterday unexpectedly increased borrowing costs for the first time since 2007, lifting the benchmark one-year lending rate to 5.56 percent from 5.31 percent. Policy makers there are trying to curb lending and prevent an asset-price bubble. "This move is consistent with their broader policies," John Lipsky, the IMF's first deputy managing director, said in an interview in Tokyo today. "I don't believe they look to monetary policy or interest-rate policy alone as a way of moderating growth in inflation pressures. But it's perfectly possible that they'll, if needed, continue to use interest rates as well as other policies." China's monetary tightening came days ahead of a meeting of Group of 20 finance authorities where the yuan is likely to be discussed. China and other emerging economies have been criticized for keeping their currencies weak to benefit exporters. Emerging economies, for their part, have complained that easy monetary policy in advanced economies is leading to capital pouring into their markets. One certainly has to wonder if this is a ploy ahead of G-20 meetings. Then again, China is overheating. Regardless, hiking rates will put upward pressure on the Yuan. However, if the global economy falters and Chinese exports with it, China is almost certain to slow appreciation of the Yuan, inflation or not. Accord Reached? BNY Mellon says China Rates, Geithner Talk May Signal Accord China's increase of its lending and deposit rates and U.S. Treasury Secretary Timothy F. Geithner's commitment to a strong dollar may suggest the nations have reached a currency accord, Bank of New York Mellon Corp. said. "The timing of this week's comments and policy shifts at least allows the possibility that some agreement has been reached," Simon Derrick, chief foreign-exchange strategist in London, said today in an e-mailed note. "If some kind of accord has been reached then this would be hugely significant, signaling trend reversals in a wide range of markets." I will be amazed if any kind of meaningful, lasting accord of global currency issues is reached. Agreements to agree at some later date are not meaningful. Rare Earth Embargo Escalates The New York Times reports China Said to Widen Its Embargo of Minerals China, which has been blocking shipments of crucial minerals to Japan for the last month, has now quietly halted shipments of those materials to the United States and Europe, three industry officials said on Tuesday. "The embargo is expanding" beyond Japan, said one of the three rare earth industry officials, all of whom insisted on anonymity for fear of business retaliation by Chinese authorities. They said Chinese customs officials imposed the broader restrictions on Monday morning, hours after a top Chinese official summoned international news media Sunday night to denounce United States trade actions. China mines 95 percent of the world's rare earth elements, which have broad commercial and military applications, and are vital to the manufacture of products as diverse as cellphones, large wind turbines and guided missiles. Any curtailment of Chinese supplies of rare earths is likely to be greeted with alarm in Western capitals, particularly because Western companies are believed to keep much smaller stockpiles of rare earths than Japanese companies. China experts said on Tuesday that Beijing's assertive stance on rare earths might also signal the ascendance of economic nationalists, noting that the Central Committee of the Communist Party convened over the weekend. Japanese Recovery at Standstill The BBC reports Japanese economy 'at standstill' The Japanese economy is at a standstill, Japan's government has said, as concerns about the strong yen continue to grow. The recovery in the economy was "pausing", the Cabinet Office said in a monthly statement. It is the most negative the government has been about the economy in nearly two years. Less War Mongering for the UK Here is some genuinely good news from the UK: Strategic defence review means end of Iraq-scale military interventions Britain's armed forces will no longer be able to mount the kind of operations conducted in Iraq and Afghanistan, the government's strategic defence review made clear today. For at least a decade it will also be impossible to deploy the kind of carrier taskforce which liberated the Falklands 28 years ago. Though defence chiefs said today they will still have significant expeditionary forces, they will not be able to intervene on the scale of recent years. Cherished projects will be delayed, cut or dumped in an attempt to recoup a massive overspend in Britain's defence budget, which faces a black hole of £36bn. In the MoD, 25,000 civilian jobs will go, along with 17,000 from the armed forces. The £38bn annual defence budget will be cut by 8% over the next four years. The construction, mainly in Scottish shipyards, of two aircraft carriers – the largest ships ever built for the navy – will go ahead even though there will be no planes to fly from them until 2020 at the earliest. That is because the existing fleet of Harriers will be scrapped immediately and an as yet unknown number of US Joint Strike Fighters due to replace them will not be ready for another 10 years. In an expected and politically convenient move – though sharply attacked by some Conservative backbenchers – the government put off a decision on replacing the existing fleet of four Trident nuclear missile submarines until after the next general election, due in 2015. The government also decided to Withdraw 20,000 British military personnel from Germany by 2020. What the hell does the UK have 20,000 troops in Germany for in the first place. It should pull them all out now, not in 2020. Of course the US should do the same, from everywhere. We have troops in 140 countries. The goal should be none. UK to Fire 10% of Public Sector Workers Here is more genuinely good news, assuming it is true. The Mail Online reports 500,000 public sector jobs to go David Cameron and Danny Alexander snapped with secret drafts 1 in 10 public sector jobs to go as government gambles on private recovery Speculation mounts of deliberate 'leaks' by government ministers The coalition expects 500,000 public sector jobs to be lost as a result of the drastic spending cuts, it was revealed today. Danny Alexander let slip the forecast when he was spotted driving into the Treasury with an open copy of the Comprehensive Spending Review on his lap. The Chief Secretary to the Treasury - who has been nicknamed Beaker after the Muppets character - was reading the document, which was caught on camera by waiting photographers. While figures in Mr Cameron's documents appeared to show the defence budget was to be cut by 6 per cent, the Prime Minister confirmed to the Commons this afternoon that the department's cuts will be 8 per cent. The fact that both were photographed on the same day has sparked speculation that the papers were deliberately 'leaked' to soften the blow ahead of the official announcements. What do you call dismissal of 10% of the public sector workforce? A start. We need to do the same thing in the US. Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Click Here To Scroll Thru My Recent Post List Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

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