vineri, 24 iunie 2011

SEOmoz Daily SEO Blog

SEOmoz Daily SEO Blog


How Google's Panda Update Changed SEO Best Practices Forever - Whiteboard Friday

Posted: 23 Jun 2011 02:05 PM PDT

Posted by Aaron Wheeler

It's here! Google has released Panda update 2.2, just as Matt Cutts said they would at SMX Advanced here in Seattle a couple of weeks ago. This time around, Google has - among other things - improved their ability to detect scraper sites and banish them from the SERPs. Of course, the Panda updates are changes to Google's algorithm and are not merely manual reviews of sites in the index, so there is room for error (causing devastation for many legitimate webmasters and SEOs).

A lot of people ask what parts of their existing SEO practice they can modify and emphasize to recover from the blow, but alas, it's not that simple. In this week's Whiteboard Friday, Rand discusses how the Panda updates work and, more importantly, how Panda has fundamentally changed the best practices for SEO. Have you been Panda-abused? Do you have any tips for recuperating? Let us know in the comments!

 

Video Transcription

Howdy, SEOmoz fans. Welcome to another edition of Whiteboard Friday. This week, we're talking about the very exciting, very interesting, very controversial Google Panda update.

Panda, also known as Farmer, was this update that Google came out with in March of this year, of 2011, that rejiggered a bunch of search results and pushed a lot of websites down in the rankings, pushed some websites up in the rankings, and people have been concerned about it ever since. It has actually had several updates and new versions of that implementation and algorithm come out. A lot of people have all these questions like, "Ah, what's going on around Panda?" There have been some great blog posts on SEOmoz talking about some of the technical aspects. But I want to discuss in this Whiteboard Friday some of the philosophical and theoretical aspects and how Google Panda really changes the way a lot of us need to approach SEO.

So let's start with a little bit of Panda history. Google employs an engineer named Navneet Panda. The guy has done some awesome work. In fact, he was part of a patent application that Bill Slawski looked into where he found a great way to scale some machine learning algorithms. Now, machine learning algorithms, as you might be aware, are very computationally expensive and they take a long time to run, particularly if you have extremely large data sets, both of inputs and of outputs. If you want, you can research machine learning. It is an interesting fun tactic that computer scientists use and programmers use to find solutions to problems. But basically before Panda, machine learning scalability at Google was at level X, and after it was at the much higher level Y. So that was quite nice. Thanks to Navneet, right now they can scale up this machine learning.

What Google can do based on that is take a bunch of sites that people like more and a bunch of sites that people like less, and when I say like, what I mean is essentially what the quality raters, Google's quality raters, tell them this site is very enjoyable. This is a good site. I'd like to see this high in the search results. Versus things where the quality raters say, "I don't like to see this." Google can say, "Hey, you know what? We can take the intelligence of this quality rating panel and scale it using this machine learning process."

Here's how it works. Basically, the idea is that the quality raters tell Googlers what they like. They answer all these questions, and you can see Amit Singhal and Matt Cutts were interviewed by Wired Magazine. They talked about some of the things that were asked of these quality raters, like, "Would you trust this site with your credit card? Would you trust the medical information that this site gives you with your children? Do you think the design of this site is good?" All sorts of questions around the site's trustworthiness, credibility, quality, how much they would like to see it in the search results. Then they compare the difference.

The sites that people like more, they put in one group. The sites that people like less, they put in another group. Then they look at tons of metrics. All these different metrics, numbers, signals, all sorts of search signals that many SEOs suspect come from user and usage data metrics, which Google has not historically used as heavily. But they think that they use those in a machine learning process to essentially separate the wheat from the chaff. Find the ones that people like more and the ones that people like less. Downgrade the ones they like less. Upgrade the ones they like more. Bingo, you have the Panda update.

So, Panda kind of means something new and different for SEO. As SEOs, for a long time you've been doing the same kind of classic things. You've been building good content, making it accessible to search engines, doing good keyword research, putting those keywords in there, and then trying to get some links to it. But you have not, as SEOs, we never really had to think as much or as broadly about, "What is the experience of this website? Is it creating a brand that people are going to love and share and reward and trust?" Now we kind of have to think about that.

It is almost like the job of SEO has been upgraded from SEO to web strategist. Virtually everything you do on the Internet with your website can impact SEO today. That is especially true following Panda. The things that they are measuring is not, oh, these sites have better links than these sites. Some of these sites, in fact, have much better links than these sites. Some of these sites have what you and I might regard, as SEOs, as better content, more unique, robust, quality content, and yet, people, quality raters in particular, like them less or the things, the signals that predict that quality raters like those sites less are present in those types of sites.

Let's talk about a few of the specific things that we can be doing as SEOs to help with this new sort of SEO, this broader web content/web strategy portion of SEO.

First off, design and user experience. I know, good SEOs have been preaching design user experience for years because it tends to generate more links, people contribute more content to it, it gets more social signal shares and tweets and all this other sort of good second order effect. Now, it has a first order effect impact, a primary impact. If you can make your design absolutely beautiful, versus something like this where content is buffeted by advertising and you have to click next, next, next a lot. The content isn't all in one page. You cannot view it in that single page format. Boy, the content blocks themselves aren't that fun to read, even if it is not advertising that's surrounding them, even if it is just internal messaging or the graphics don't look very good. The site design feels like it was way back in the 1990s. All that stuff will impact the ability of this page, this site to perform. And don't forget, Google has actually said publicly that even if you have a great site, if you have a bunch of pages that are low quality on that site, they can drag down the rankings of the rest of the site. So you should try and block those for us or take them down. Wow. Crazy, right? That's what a machine learning algorithm, like Panda, will do. It will predicatively say, "Hey, you know what? We're seeing these features here, these elements, push this guy down."

Content quality matters a lot. So a lot of time, in the SEO world, people will say, "Well, you have to have good, unique, useful content." Not enough. Sorry. It's just not enough. There are too many people making too much amazing stuff on the Internet for good and unique and grammatically correct and spelled properly and describes the topic adequately to be enough when it comes to content. If you say, "Oh, I have 50,000 pages about 50,000 different motorcycle parts and I am just going to go to Mechanical Turk or I am going to go outsource, and I want a 100 word, two paragraphs about each one of them, just describe what this part is." You think to yourself, "Hey, I have good unique content." No, you have content that is going to be penalized by Panda. That is exactly what Panda is designed to do. It is designed to say this is content that someone wrote for SEO purposes just to have good unique content on the page, not content that makes everyone who sees it want to share it and say wow. Right?

If I get to a page about a motorcycle part and I am like, "God, not only is this well written, it's kind of funny. It's humorous. It includes some anecdotes. It's got some history of this part. It has great photos. Man, I don't care at all about motorcycle parts, and yet, this is just a darn good page. What a great page. If I were interested, I'd be tweeting about this, I'd share it. I'd send it to my uncle who buys motorcycles. I would love this page." That's what you have to optimize for. It is a totally different thing than optimizing for did I use the keyword at least three times? Did I put it in the title tag? Is it included in there? Is the rest of the content relevant to the keywords? Panda changes this. Changes it quite a bit.

Finally, you are going to be optimizing around user and usage metrics. Things like, when people come to your site, generally speaking compared to other sites in your niche or ranking for your keywords, do they spend a good amount of time on your site, or do they go away immediately? Do they spend a good amount of time? Are they bouncing or are they browsing? If you have a good browse rate, people are browsing 2, 3, 4 pages on average on a content site, that's decent. That's pretty good. If they're browsing 1.5 pages on some sites, like maybe specific kinds of news sites, that might actually be pretty good. That might be better than average. But if they are browsing like 1.001 pages, like virtually no one clicks on a second page, that might be weird. That might hurt you. Your click-through rate from the search results. When people see your title and your snippet and your domain name, and they go, "Ew, I don't know if I want to get myself involved in that. They've got like three hyphens in their domain name, and it looks totally spammy. I'm not going to get involved." Then that click-through rate is probably going to suffer and so are your rankings.

They are going to be looking at things like the diversity and quantity of traffic that comes to your site. Do lots of people from all around the world or all around your local region, your country, visit your website directly? They can measure this through Chrome. They can measure it through Android. They can measure it through the Google toolbar. They have all this user and usage metrics. They know where people are going on the Internet, where they spend time, how much time they spend, and what they do on those pages. They know about what happens from the search results too. Do people click from a result and then go right back to the search results and perform another search? Clearly, they were unhappy with that. They can take all these metrics and put them into the machine learning algorithm and then have Panda essentially recalculate. This why you see essentially Google doesn't issue updates every day or every week. It is about every 30 or 40 days that a new Panda update will come out because they are rejiggering all this stuff.

One of the things that people who get hit by Panda come up to me and say, "God, how are we ever going to get out of Panda? We've made all these changes. We haven't gotten out yet." I'm like, "Well, first off, you're not going to get out of it until they rejigger the results, and then there is no way that you are going to get out of it unless you change the metrics around your site." So if you go into your Analytics and you see that people are not spending longer on your pages, they are not enjoying them more, they are not sharing them more, they are not naturally linking to them more, your branded search traffic is not up, your direct type in traffic is not up, you see that none of these metrics are going up and yet you think you have somehow fixed the problems that Panda tries to solve for, you probably haven't.

I know this is frustrating. I know it's a tough issue. In fact, I think that there are sites that have been really unfairly hit. That sucks and they shouldn't be and Google needs to work on this. But I also know that I don't think Google is going to be making many changes. I think they are very happy with the way that Panda has gone from a search quality perspective and from a user happiness perspective. Their searchers are happier, and they are not seeing as much junk in the results. Google likes the way this is going. I think we are going to see more and more of this over time. It could even get more aggressive. I would urge you to work on this stuff, to optimize around these things, and to be ready for this new form of SEO.

Thanks everyone for watching. Look forward to some great comments, questions, feedback in the post. I will see you again next week for another edition of Whiteboard Friday. Take care.

Video transcription by Speechpad.com


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Video: West Wing Week: "The Receding Tide"

The White House Your Daily Snapshot for
Friday, June 24, 2011
 

West Wing Week: "The Receding Tide" 

Welcome to the West Wing Week, your guide to everything that's happening at 1600 Pennsylvania Ave. This week, President Obama addressed the nation on his plan to withdraw American troops from Afghanistan, delivering on a promise he made to the American people in December of 2009. The President also traveled Fort Drum to meet with soldiers and their families, welcomed young elected officials to the White House, and talked to mayors from across the country about job creation and economic growth. 

Watch the video 

  

In Case You Missed It

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

Infographic: Troop Levels in Afghanistan and Iraq
Take a look at this infographic that lays out how President Obama is winding down the wars in Iraq and Afghanistan while keeping America safe.

"A 21st Century Regulatory System"
The White House unveiled plans by 30 different federal agencies to make sure that the regulations they enforce are protecting Americans’ health and well-being without imposing unnecessary or excessive costs. Here are some examples of changes now underway.

"Your Commander-in-Chief Has Your Back"
President Obama speaks to the soldiers of the 10th Mountain Division at Fort Drum in New York to thank them and their families for their sacrifice, following his announcement on beginning a drawdown in Afghanistan. President Obama and President Elbegdorj discuss steps to expand diplomatic, economic and defense cooperation between our two nations. 


Today's Schedule 

All times are Eastern Daylight Time (EDT).

12:15 AM: The President arrives in Pittsburgh, Pennsylvania

10:45 AM: The President tours Carnegie Mellon University's National Robotics Engineering Center (NREC)

11:00 AM: The President delivers remarks on the need to focus on cost-cutting technologies that will enhance the global competitiveness of U.S. manufacturing WhiteHouse.gov/live

12:45 PM: The President departs Pittsburgh, Pennsylvania

1:40 PM: The President arrives at Andrews Air Force Base

1:55 PM: The President arrives at the White House


WhiteHouse.gov/live Indicates events that will be live streamed on WhiteHouse.Gov/Live

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SEO for Your Competition Graywolf's SEO Blog

SEO for Your Competition Graywolf's SEO Blog


SEO for Your Competition

Posted: 23 Jun 2011 10:00 AM PDT

Post image for SEO for Your Competition

In my opinion, SEO for your competition is one of the more underutilized tactics today. You can try to optimize for your competition’s company name, products, or even comparison searches. In this post, I’ll take you through the process and what to watch out for.

Expect whatever relationship you currently have to become much more adversarial than it is now …
Anyone who has done any work in the ORM (Online Reputation Management) space can tell you: until a negative article hits the newspapers or press, there usually isn’t a lot of competition for a company’s name. However, unless the company’s SEO is completely incompetent or the site is invisible to search engines, you will probably never outrank another company for their name. But what you can do is rank in the top ten and get a lot of clicks if your title is compelling enough. Example below:


There are a few points I should bring up at this point. Bear in mind that I’m not a lawyer and not qualified in any way to dispense legal advice. It’s not against the law or illegal to use another company’s name (even if it’s trademarked) on your page. For example, iPhone and Blackberry are both trademarked names; however, I can use them anytime I want. If someone has a legal team and wants to waste time, they can come after me, require that I put on the trademark symbol ™, and credit the trademark to its owner, but they can’t stop me from using it. Additionally, it’s not illegal to use another company’s trademark in your meta tags or titles as long as you aren’t intentionally causing confusion. So, when you word your titles and meta tags, use them in a clear fashion that allows reasonable users and the courts to understand that this is a comparison, not a misrepresentation. Second, a little corporate puffery on your behalf for your company probably isn’t a big deal. However, making false or misleading statements about someone else’s company could be slander or defamation, so choose your words wisely.


AT&T iPhone vs Verizon iPhone page (click to enlarge)

OK, back to the SEO aspect. If you are going to try and rank for a product you don’t sell, creating a comparison page is an excellent way to convert that traffic. Show the aspects of your product/service and why they are better than the competition. As an example, here’s a page on the AT&T iPhone vs the Verizon iPhone.

This is one of the few SEO instances where putting text in graphics is a good idea. You can make the compelling conversion words or bullet points an image and keep the words for the engines in standard machine and human readable text format.

Another tactic is optimizing for + “sucks” phrases. If a customer is doing that type of search, they are looking to see if they are going to get screwed. That sort of customer is probably deep in the conversion funnel and doing last minute checks to make sure they aren’t making a mistake. Sucks pages are interesting from a legal perspective (again, bear in mind that I’m not a lawyer and not qualified to give legal advice). If you have a “sucks” page, and it represents an honest opinion or is an honest account of a transaction or purchase, it can be negative and still be legal. However, if it is fabricated or embellished with the intent of extorting, blackmailing, trademark-squatting, is slanderous, defamatory, or otherwise created with ill intent or in bad faith, you could find yourself on the losing end of a lawsuit. Sometimes asking something in the form of a question is legally safer than as a statement.


One last point to remember. Once you start to rank, it’s going to be pretty obvious to your competition who is doing it and why. Expect whatever relationship you currently have to become much more adversarial than it is now. Additionally, you should be prepared for others to start building pages around your company name, so you should have a thick skin and not mind a bit of bad karma …

What are the takeaways from this post:

  • Optimizing for your competition’s company or name or competing product brand names is usually a easy SERP to rank for.
  • Using the names of others isn’t illegal but be sure and properly attribute the trademark.
  • There is a difference between an honest criticism and slander and defamation. Know where the line is and avoid it.
  • Reviews or sucks websites for your competition are subject to higher level of scrutiny and should be honest, real, and truthful.
  • Do not create, fabricate, or embellish negative reviews.
  • Avoid making declarative negative statements; instead, use questions.

snippets generated using: SEOMofo Snippet Preview Tool, photo credit: Shutterstock, Photospin,

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Related posts:

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SEO for Your Competition

Seth's Blog : Dependency on external motivation

Dependency on external motivation

One of the characteristics of the industrial age was the reliance on external motivation.

Go to work on time or the boss will be angry.

Work extra hard and the boss will give you a promotion.

If you get paid to work piecework, then your paycheck goes up when you work harder.

This mindset is captured by the Vince Lombardi/pro sports/college sports model of the coach as king. Of course we'll have our non-profit universitiess pay a football coach a million or more a year, of course we need these icons at the helm--how else will we get our players to perform at their best?

I was struck by a photo I saw of male fencers at Cornell who practice with the women's fencing team. Clearly, they're not allowed to compete in matches (though the university counts them for Title XIV). I got to thinking about what motivates these fencers. Are they doing it because they're afraid of the coach or getting cut? Would they fence better if they were?

The nature of our new economic system, that one that doesn't support predictable factory work, is that external motivation is far less useful. If you're looking for a big payday, you won't find it right away. If you're depending on cheers and thank yous from your Twitter followers, you're looking at a very bumpy ride.

In fact, the world is more and more aligned in favor of those who find motivation inside, who would do what they do even if it wasn't their job. As jobs turn into projects, the leaders we need are those that relish the project, that jump at the chance to push themselves harder than any coach ever could.

 

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joi, 23 iunie 2011

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


"Papandreou has Serious Doubts Greek Parliament Will Take Necessary Steps"

Posted: 23 Jun 2011 12:09 PM PDT

Greek finance minister Evangelos Venizelos (the former defense minister appointed to a new post in a cabinet shakeup, and who knows little about finance) is under pressure from labor unions to get a change in austerity measures and under pressure by the EU to not change a thing.

Reuters reports EU tightens squeeze on Greece; banks discuss rollover
Greece's new finance minister grappled with EU and IMF officials over gaps in his austerity plans on Thursday, with European leaders insisting on deep spending cuts and more tax hikes if Athens wants to secure funds and avoid potential default.

Euro zone governments are meanwhile talking to European banks and insurance companies to try to convince them voluntarily to maintain their exposure to Greek debt when their bonds mature, as part of a possible second rescue for Athens.

Greek Finance Minister Evangelos Venizelos met inspectors from the European Commission, European Central Bank and the International Monetary Fund in Athens to try to iron out differences over the current bailout program.

"All conditions must be met," Luxembourg Prime Minister Jean-Claude Juncker told reporters as he arrived for a summit of EU leaders at which Greece's crisis will top the agenda.

"If Greece does what it has to do, we will do what we have to do. This is not a threat. It's just a confirmation that we're continuing our efforts."

While Papandreou has expressed confidence over the June 28 vote in public, Slovak Prime Minister Iveta Radicova said he had voiced uncertainty in a private telephone call on Wednesday.

"Papandreou has serious doubts about whether the necessary steps will pass in parliament," Radicova told the Slovak parliament's European affairs committee.
Once again it's important to remember this pissing in the wind cannot accomplish a thing, but make the size of the default bigger later. Of course, the rating agencies are likely to rule the rollover by banks constitutes a default anyway.

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


Republicans and Democrats Splinter Into Bewildering Array of Factions on Debt Ceiling Limit Demands

Posted: 23 Jun 2011 11:14 AM PDT

Tick Tock. Each passing day sends the budget impasse closer to the August 2 deadline. Yet with each passing day, conflicting demands make a compromise even more unlikely.

Please consider Congressional leaders increase pressure on group discussing debt-reduction deal
Congressional leaders from both parties made new and competing demands Wednesday in exchange for their votes to raise the nation's debt limit, increasing pressure on a bipartisan group attempting to negotiate a debt-reduction deal with the White House.

Top Senate Democrats, led by Majority Leader Harry M. Reid (Nev.), said they have told Vice President Biden, who is leading the talks, that any agreement on raising the legal borrowing limit must include an effort to boost the flagging economic recovery alongside deep spending cuts sought by Republicans.

The Democrats said they would prefer to see new spending on roads, bridges and other transportation projects; new investment in green energy; or additional resources for job training to show that the party is working to create jobs and lower the nation's 9 percent unemployment rate.

The Democrats' call came on the same day that conservative advocacy groups asked Republicans to sign a pledge saying that they vow to vote against an increase in the $14.3 trillion debt limit without sharp and immediate spending cuts, new caps on annual spending and an amendment to the Constitution that would require Congress to balance the budget.

"Politicians of all stripes, Democrats and Republicans, have spent this country to the brink of insolvency," said Sen. Rand Paul (R-Ky.), who said he would not vote to raise the debt ceiling without winning a balanced-budget amendment.

As negotiators race to produce a bipartisan compromise before an Aug. 2 deadline, the proliferation of demands suggests that any deal could face significant obstacles on the road to final passage. In both the House and the Senate, Republicans and Democrats are splintering into a bewildering array of factions and issuing ultimatums that cannot all be met.

In the Senate, for example, a bipartisan group is pushing for a far more ambitious deal to reduce the debt. That group — led by Budget Committee Chairman Kent Conrad (D-N.D.) — is considering withholding its votes for a long-term debt-limit increase unless it sees far more than the $2 trillion in savings that has been the goal of the Biden talks.

Meanwhile, the no-taxes message of the Republican Party was underscored Wednesday by Senate Minority Leader Mitch McConnell (Ky.), who ruled out any revenue increase — even if it came through closing tax loopholes — as part of the talks.

"They couldn't even get that done when they owned the government. . . . So, look, taxes aren't going to be raised," McConnell told reporters at a breakfast held by the Christian Science Monitor.
Irreconcilable Differences

Some Democrats want more spending in return for budget cuts. My math says that makes no sense. Meanwhile, Budget Committee Chairman Kent Conrad (D-N.D.) wants more budget cutting, clearly in conflict with most Democrats.

Count Rand Paul as a "no" vote in any case. I would love to see a balanced budget amendment but that is unlikely to be part of any compromise.

Democrats are willing to accept a payroll tax cut as part of the package, but how would that be paid for? Regardless, the idea is a dumb one. It will not do a damn thing to get businesses to hire anyone. Nor would another repatriation holiday.

Indeed, the latter would probably hurt small businesses because none of them have tax shelters like GE and Google.

Financial Chicken

Armageddon will not happen if the debt ceiling is not raised. Unfortunately, in spite of what appears to be irreconcilable differences, some sort of sorry compromise will be worked out.

Expect Republicans to cave-in with counterproductive tax cut sweeteners in this game of Financial Chicken. I hope I am wrong.

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


Oil Plunges $6 Following International Energy Agency Pledge to Release 60 Million Barrels from Strategic Stockpile

Posted: 23 Jun 2011 07:32 AM PDT

A triple whammy hit commodities today and sent the US dollar up sharply against the Euro and other currencies.

  1. Trichet admits the Obvious: "Risk Signals Are Flashing Red"; Ireland Snubs ECB With Renewed Threat to Bank Bondholders
  2. US unemployment weekly claims came in higher than expected
  3. International Energy Agency said 60 million barrels of oil would be released from strategic stockpiles

Please consider Oil tumbles as U.S., IEA release oil stocks
Oil fell sharply on Thursday, with North Sea Brent down more than $6 per barrel, after the International Energy Agency said 60 million barrels of oil would be released from strategic stockpiles to help the global economy.

The announcement comes after OPEC failed to raise production at a meeting on June 8 and despite assurances from OPEC's biggest producer Saudi Arabia that it would lift supplies unilaterally.

"Greater tightness in the oil market threatens to undermine the fragile global economic recovery," the IEA said.

The IEA said it would release 2 million barrels per day (bpd) over 30 days onto the world market to fill the gap in supplies left by the disruption to Libya's output. Libya was exporting about 1.2 million bpd.

Analysts and traders said they had not expected the move:

"I'm really surprised. Everyone's been saying they've got enough stocks. This should keep WTI (U.S. crude) under the $100 (per barrel), but really we want Brent there, and this should help," said Robert Montefusco, broker at Sucden Financial.
Energy Futures as of 2011-06-23 9:30 US Central



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


Trichet Admits the Obvious "Risk Signals Are Flashing Red"; Ireland Snubs ECB With Renewed Threat to Bank Bondholders

Posted: 23 Jun 2011 06:54 AM PDT

On rare occasions ECB president Jean-Claude Trichet will admit the obvious. In contrast, you will seldom hear something like this from the Fed: Trichet Says Risk Signals Are Flashing Red as Debt Crisis Threatens Banks
European Central Bank President Jean-Claude Trichet said risk signals for financial stability in the euro area are flashing "red" as the debt crisis threatens to infect banks.

"On a personal basis I would say 'yes, it is red'," Trichet said late yesterday in Frankfurt after a meeting of the European Systemic Risk Board, referring to the group's planned "dashboard" to monitor risks. "The message of the board is that" the link between debt problems and banks "is the most serious threat to financial stability in the European Union."

Trichet, who chairs the ESRB, made the remarks as European leaders meet in Brussels to discuss how to stave off a Greek default, while preparing a second bailout. The EU is trying to avoid a repeat of the financial crisis that followed the 2008 collapse of Lehman Brothers Holdings Inc. (LEHMQ) and resulted in European governments setting aside more than $5 trillion to support banks.

While Greek Prime Minister George Papandreou earlier this week won a vote of confidence, bolstering his new government's chances of pushing through austerity measures to secure further financial aid, European finance ministers said earlier this week they would hold off on approving a 12 billion-euro ($17 billion) payment to the country promised for July until passage of the plans to cut the budget deficit and sell state assets.

"European leaders will try and convince Greeks and financial markets when they meet in Brussels today and tomorrow that they have a workable plan to help Athens avoid a debt default," said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. They'll use a "mixture of arm-twisting and moral support" to force Greece to adopt further reform.
Federal Reserve Chairman Ben S. Bernanke downplayed the risk of a Greek default on U.S. banks, telling reporters yesterday that the impact would be "very small." With "very few exceptions, the money-market mutual funds don't have much direct exposure to the three peripheral countries which are currently dealing with debt problems," he said.
Trichet's Game

While honesty is appreciated for honesty's sake, I rather suspect this is simply Trichet's way of warning the Greek parliament to "play ball" exactly as he wants and pass the austerity measures the ECB, IMF, and EU demand.

Thus, Trichet deserves zero credit for his apparent honesty.

Ireland Snubs ECB

Bloomberg reports Ireland Snubs ECB Effort to Avoid Meltdown With Threat to Bank Bondholders
Ireland opened a new front in the drive to restructure debt on the euro area's periphery, adding to the European Central Bank's concerns as it tries to head off another wave of financial turmoil.

Irish Finance Minister Michael Noonan said yesterday that senior bondholders should share in the losses of Anglo Irish Bank Corp. and Irish Nationwide Building Society, reversing a policy of protecting owners of senior securities. The ECB is against imposing losses on investors. President Jean-Claude Trichet said on Feb. 7 that haircuts aren't part of a plan to reduce Ireland's debt load.

Ireland's about-face on bondholder involvement in its banking crisis comes as European lawmakers struggle to settle a dispute over how to avoid a Greek sovereign default. While German Finance Minister Wolfgang Schaeuble said last week that Europe's biggest economy insists on the participation of the private sector, his French counterpart Christine Lagarde has ruled out any action that constitutes a "credit event," backing the ECB's view.

"Noonan must be kidding," said Klaus Baader, an economist at Societe Generale in London
Let's Hope Noonan Not Kidding

We should all hope that Noonan is not kidding. Indeed, Noonan should take advantage of the situation now and ask for 60% haircuts on all senior bonds not just a pissy 3 billion Euros.

Iceland told the EU and IMF where to go. Ireland should do the same.

What will Trichet do? The answer is throw another hissy fit. The correct response to Trichet's hissy fit is to threaten default and threaten to leave the Euro.

Who really has the upper hand here? The answer is Ireland, and Ireland should use it, starting with a nice slap in the face to Trichet, the ECB, the EU, and the IMF.

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