Central Perk

luni, 12 septembrie 2011

SEOmoz Daily SEO Blog

Posted: 11 Sep 2011 02:24 PM PDT

I'll admit it, I just love Hipmunk. In this post I'm going to outline an SEO strategy for them for all to see. I thought it would be interesting to get hands-on with a particular site (not something we do often here on the moz blog) and potentially handy for the Hipmunk team too! Interestingly there's a question of if they should even be investing in SEO at all right now but we'll get to that later :)

What is Hipmunk?

Hipmunk is a disruptive startup with a mission of making travel booking easy and fast. Their primary feature is a beautiful and intuitive UI for booking flights:

Once you use it once you'll be hooked. I was!

What Does SEO Look Like for Hipmunk?

We all know that SEO is links + content + social but how does that relate to the flight search space? Well for starters the space is fiercely competitive. Here are some of the biggest terms they'd like to target:

There are lots of established brands ranking already for these terms and with good reason, they're looking for a piece of that nice juicy keyword volume pie! What about some slightly less competitive keywords?

Yikes! Still pretty competitive even for these mid/long tail terms. So what's the plan batman?

Domain Authority FTW

So how are we going to compete with the big boys in this space? Well it's going to be the long hard slog of brand building and domain authority. Rand sums it up in one of my favourite graphics:

Earning links using great content is crucial to long term success. Fortunately, Hipmunk seems to be doing a great job of getting those strong trusted links. Just take a look at their press page! Their UI and core product is the great content that's earning them press mentions here which is awesome. Making a core product that is good enough to earn links is the win-win of online marketing. But those crazy cats over at Hipmunk get up to a little bit of linkbait too:

So it seems that Hipmunk don't really need any help link building! Take a look at the following graph (from MajesticSEO) which shows that hipmunk.com is almost gaining as many links per month as the big players like kayak.com and cheapflights.com:

Unfortunately, if we look at this chart in a cumulative view we see why Hipmunk is going to have a hard time:

TL;DR - keep doing what you're doing Hipmunk! This brand building/PR/domain authority building will pay off in the long run.

SEO in 2011 Benefits Hipmunk

However, there's one trick hidden up that cute little chipmunk's sleeve which is going to play in their favour. In a post-panda world we all know that cute animals as logos make you rank higher. Wait, that's not quite right. What I mean is that in a post-panda world Google is rewarding user engagement. I'm going to hypothesize that user engagement and brand loyalty is off the charts for Hipmunk - based on my own experience and the experience of my friends once you've used it once there's no competition....

Hand in hand with this is a strong social influence:

This strong user engagement and social signals will hopefully give Hipmunk a shot at ranking for the big money terms.

Building Out Scaleable Content

Behind almost every single successful SEO strategy is a plan for scaleable quality content. Patrick McKenzie argues very persuasively on this topic in his great startup SEO blog post. So how does this fit into the Hipmunk roadmap? There's clearly not a lot of scalebale content going on right now:

It's pretty obvious that in this niche the right kind of scaleable content is going to be focused on location-based searches. There's a lot of search volume for these kinds of phrases:

As I see it there are two main routes to go down with this type of scaleable content - one is powered by people, one is powered by machines.

Option 1 - Niche Destination Guides

One option to build out this scaleable content is to put together niche destination guides. They already successfully published a guide to Grand Rapids guide (though with a lousy title tag...)

This is a strategy that I could see working - especially if you can publish content that's of a higher quality than most things out there. This guide was crowd-sourced from locals, if you can replicate that for other tertiary locations you might be onto something. Of course I'd look at trying to drop a pre-populated CTA on those pages to give people a quick and easy route into the flight search:

If you're going to go down this route I'd suggest starting with the uncompetitive locations and gradually getting more competitive as you progress. It's going to be a long hard slog but if you can make sure each niche destination guide gets some buzz and local PR as well (this guide was published just after Grand Rapids was named one of America's dying cities in the press) then you're still turning the bigger picture flywheel while simultaneously building out content that will earn links and rankings over time.

Option 2 - Just Buy This One Flight Data

The second option I see for scaleable content comes in the form of machines. While there are many formats this could take one angle I particularly like is inspired by Just Buy This One (disclaimer: Reevoo are a Distilled client). The premise here is to use big data to make your decision process incredibly easy. The buying cycle here is for electronics:

But this principle could just as easily apply to flight search. Looking at the common destinations it would be easy to build out a similar "just buy this one" experience for flights. For example, analysing the most common flight patterns for various destinations would result in the ability for you to predict with confidence the "best" destinations and flight options for those destinations and provide a "book now" button that inspires confidence. The key here is confidence and you'd need to make it clear that if the user is looking for a flight with certain parameters (maybe flights from San Francisco to New York this weekend) then this flight is the least agony (a metric that Hipmunk uses extensively that's a combination of price and hassle).

Using this approach you would have to start at the opposite end of the spectrum and start with the most popular locations to ensure enough data to build a good user experience on those pages.

When Should Hipmunk Invest in SEO?

For many startups deciding when to invest in SEO is a tricky issue. You want to invest early to start building the foundations but in many cases you won't have the link authority to see direct ROI over the short term for your SEO investment.

The truth of it is that their team is likely busy working on other things right now. How should they prioritize these projects above what they already have going on? The harsh reality is that this space is competitive. There are big budgets being thrown about and even if Hipmunk were to roll out some of these pages they're unlikely to see an ROI from search just yet. They just don't have the links to compete with the established players right now.

Of course, it's never too soon to roll out pages that are good for users and I believe there are heavy overlaps between marketing and SEO here - these pages would be great PR and can gain them a bunch of links and exposure (especially with local press - a PR opportunity a lot of people overlook). Ultimately, the sooner that they can start building out their main site with pages aimed at specific keywords the sooner they'll be able to rank for these keywords. At some point further down the line SEO is going to be a very significant traffic driver for them and they should look at investing for that opportunity as soon as possible.

TL;DR Keep Up The Link Building - Oh And One More Thing

So in summary - I hope this makes the SEO roadmap slightly clearer for Hipmunk. Certainly the brand building, social and PR work that's going on right now is the best thing you can be doing so keep that up. Just don't forget that at some point you'll want to look at rolling out scaleable indexable content focused around all those location terms. Maybe not today, maybe not tomorrow but someday.

Oh and one more thing while I'm here - you should really put some the words "flight search" on your homepage so that Google can see them. You're ranking 17th for [flight search] right now and you'd likely get a bump for putting the words on page.

Disclaimer: Neither I nor Distilled have any affiliation with Hipmunk. I met with Alexis Ohanian (an advisor to Hipmunk) for coffee in preparation for writing this post but all thoughts herein are my own (for better or for worse!) and motivated by the love of the 'munk.

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The Tenth Anniversary of September 11

Your Daily Snapshot for
Monday, September 12, 2011

The Tenth Anniversary of September 11

Yesterday, to mark the 10th anniversary of September 11th, President Obama visited Shanksville, PA, the Pentagon and the National September 11 Memorial in New York. Here’s a photo gallery of the events.

Yesterday evening, President and First Lady Obama attended a “Concert for Hope” at the Kennedy center in DC where he spoke about how that terrible day changed us, as individuals and as a nation. But the President also talked about what has not changed in these past ten years:

These past 10 years have shown that America does not give in to fear. The rescue workers who rushed to the scene, the firefighters who charged up the stairs, the passengers who stormed the cockpit -- these patriots defined the very nature of courage. Over the years we’ve also seen a more quiet form of heroism -- in the ladder company that lost so many men and still suits up and saves lives every day, the businesses that have been rebuilt from nothing, the burn victim who has bounced back, the families who press on.

Watch the President's full remarks

President Barack Obama and First Lady Michelle Obama, along with former President George W. Bush and former First Lady Laura Bush, pause at the North Memorial Pool of the National September 11 Memorial in New York, N.Y., on the tenth anniversary of the 9/11 attacks against the United States, Sunday, Sept. 11, 2011. The North Memorial pool sits in the footprint of the north tower, formerly 1 World Trade Center.
(Official White House Photo by Chuck Kennedy)

Seth's Blog : The alternative to failure

The alternative to failure

"What would you have me do instead?"

To the critic who decries a project as a worthless folly, something that didn't work out, something that challenged the status quo and failed, the artist might ask,

"Is it better to do nothing?"

To the critic who hasn't shipped, who hasn't created his art, anything less than better-than-what-I -have-now appears to be a waste. To this critic, progress should only occur in leaps, in which a fully functioning, perfected new device/book/project/process/system appears and instantly and perfectly replaces the current model.

We don't need your sharp wit or enmity, please. Our culture needs your support instead.

Each step by any (and every) one who ships moves us. It might show us what won't work, it might advance the state of the art or it might merely encourage others to give it a try as well.

To those who feel that they have no choice but to create, thank you.

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duminică, 11 septembrie 2011

Mish's Global Economic Trend Analysis

Evaluating "Obamaplan" Will Any of it Pass? Business Owner from California Chimes In
"Orderly Insolvency for Greece Cannot be Ruled Out" says German Economy Minister; Mish says "Neither Can a Disorderly One"; Schaeuble Lie Confirmed
Laugh of the Day: "Greece Bond Swap Progressing Well"

Evaluating "Obamaplan" Will Any of it Pass? Business Owner from California Chimes In

Posted: 11 Sep 2011 04:08 PM PDT

President Obama wants to spend $447 billion on a stimulus plan that will not stimulate a thing. Will any of it pass? The consensus is Expect 'Yes' on Tax Cuts, 'No' Elsewhere.

The real takeaway from President Barack Obama's jobs agenda?

Workers probably can count on continuing to pay lower Social Security taxes. Employers may not have to pay as much, either. The long-term unemployed probably will keep drawing jobless benefits. Congress can be expected to ratify new trade agreements with South Korea, Colombia and Panama.

But don't expect Congress to funnel tens of billions of dollars into rebuilding schools and blighted neighborhoods, or helping local governments pay teachers and firefighters, or setting up an "infrastructure bank" to leverage federal loans for roads, water systems and other public works projects.

"Enough of the stimulus," House Majority Leader Eric Cantor, R-Va., said Friday on CNBC. "We can't afford to keep spending money we don't have."

Last December, Congress passed a one-year cut in Social Security taxes, reducing the rate for workers from 6.2 percent to 4.2 percent for 2011. Employers still pay the 6.2 percent rate, which is applied to wages up to $106,800.

Obama proposes to extend the tax cut for a year and make it bigger, reducing the Social Security taxes paid by workers to 3.1 percent for 2012. He's also now proposing to extend the payroll tax cut to businesses on the first $5 million of their payroll. About 98 percent of companies have payrolls below the $5 million threshold, according to the White House.

"This proposal would make the already arduous challenge of finding bipartisan agreement on deficit reduction nearly impossible, removing our options for deficit reduction for a plan that won't reduce the deficit by one penny," said Rep. Jeb Hensarling, R-Texas. "It's not the role of this committee to spend more money we don't have on jobs we don't get."

Republicans also have qualms about the almost $50 billion cost of extending for one more year a jobless benefits program that allows up to 99 weeks of benefits for the long-term unemployed and covers about 5 million laid-off workers. But GOP leaders may go along with the idea after Obama embraced reforms, such as expanding to other states a Georgia program that uses unemployment funds for on-the-job training.

"I don't think they want a fight over that," said Jack Howard, a GOP lobbyist.

The White House promises to send up soon a list of ideas on how to pay for it all.

Spend Now Cut Later

Obama will come up with a list of ideas soon. Rest assured all of them will involve cutting future spending years from now or other sleight-of-hand magic like cutting programs that were not in the budget. Also possible are tax hike proposals that will be dead on arrival in the House.

Ultimately it will be up to the gang-of 12 to figure out how to make this plan balanced. They have a difficult enough time already.

Please appreciate the dilemma of Rep. Jeb Hensarling, R-Texas who said "It's not the role of this committee to spend more money we don't have on jobs we don't get."

Business Owner from California Chimes In

A business owner from California responded to Dissecting the Lies in Obama's $447 Billion "Shock-and-Awe" Reelection Ploy; Dead-on-Arrival in Congress? Alternative Proposal Will Not Cost a Dime

Hello Mish

I own and operate a contracting business in the San Francisco bay area in California. I can confirm that the motivation to hire more people due to a payroll tax rebate is zero.

I did hire several workers in our spring ramp up as a normal course of business. It was nice to see payroll tax reductions, but it didn't motivate me at all to hire more, nor would it today, or ever.

However, I avoided hiring one additional person that we would normally hire in July because of economic uncertainty and implications of "Obamacare".

In regard to public works, we frequently do public works jobs here with merit shop workers. They certainly enjoy the extra pay and benefits (we pay fringe benefits in cash), but I would put my men up against any local union. Their skills are as good and their work ethic/attitude is far better.

Union rules are toxic to the workplace and productivity.

I have written my rep. and senators but unfortunately Senators Boxer and Feinstein are as liberal as they come.

Business owners and those we do not hire are the ones who suffer from the misguided policies of liberals.

That is one email from person, but I strongly suspect it represents the majority opinion of most business owners.

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

"Orderly Insolvency for Greece Cannot be Ruled Out" says German Economy Minister; Mish says "Neither Can a Disorderly One"; Schaeuble Lie Confirmed

Posted: 11 Sep 2011 11:28 AM PDT

Mainstream media is chock full of humorous reporting today, including this Bloomberg headline Greek 'Orderly' Default Can't Be Ruled Out, Roesler Tells Welt

An "orderly insolvency" for Greece must not be ruled out for the sake of stabilizing the euro, Die Welt reported, citing German Economy Minister Philipp Roesler.

"To stabilize the euro there must be no taboos," the newspaper quoted Roesler as saying in an article to be published in tomorrow's edition. "If need be, that also includes an orderly insolvency of Greece, provided the instruments needed for that are available."

Expect a Disorderly Default

Put the "orderly default" theory right up there with the humorous idea "Greece Bond Swap Progressing Well"

If there is a default, what possible reason is there for it to be orderly?

Blame Trichet

A year ago an orderly default may have been possible, but not now, thanks to "We say no to default" Trichet. Indeed, Trichet's stance accompanied by the ECB throwing tranche after tranche of money down the drain in repeated bailouts all but ensured a disorderly default.

Merkel's Coalition Disintegrates

German Chancellor Angela Merkel's coalition has disintegrated right in front of everyone's eyes.

Adding fat to the fire, the German Economy Minister and the German Finance Minister are now in open dispute.

Please consider a snip from Can Government Lies Calm the Markets?

MarketWatch: ... German Finance Minister Wolfgang Schaeuble dismissed a report by Bloomberg News that German officials were readying a plan to recapitalize German banks should their Greek holdings overcome balance sheets.

Schaeuble insisted that the agreement reached with Greece in July was still the focus of the government. "To speculate over other outcomes is pointless," he said, according to Dow Jones.

Mish: Schaeuble's, statements are blatant lies or seriously discomforting truth. In this case, it is hard to know precisely which. I suspect lies (and we should all be hoping for lies) because unless the EU, ECB, and other government officials are making contingency plans for a Greek bankruptcy, there are going to be some very serious consequences soon.

MarketWatch: European Union Commissioner for Economic and Monetary Affairs Olli Rehn told reporters after the G-7 meeting that European banks were better capitalized than they were a year ago.

Mish: There's a lie, especially when the new head of the IMF is willing to admit banks need to be recapitalized.

Schaeuble Lie Confirmed

As suspected, we now have a confirmed lie made by finance minister Schaeuble. It took less than a day to ferret out the truth and mainstream media cannot even get the story correct.

Der Spiegel reports German Finance Minister Prepares for Possible Greek Bankruptcy

German Finance Minister Wolfgang Schäuble, who is reportedly doubtful that the country can be saved from bankruptcy, is preparing for the possibility of Greek insolvency. Officials in his ministry are currently reviewing scenarios for handling such a situation, exploring what it might mean for the rest of the euro zone. Under the first scenario for a Greek bankruptcy, the country would remain in the euro zone. Under the other, Athens would abandon the common currency and reintroduce the drachma.

Sudden Revelation

That's one hell of a sudden revelation given just yesterday Schaeuble stated "To speculate over outcomes other than agreements made with Greece in July is pointless"

Der Spiegel continues ...

The European bailout mechanism, the European Financial Stability Facility (EFSF), is playing a key role in those considerations. Soon the EFSF is expected to be given new powers agreed to by European leaders at a special euro crisis summit in late July. Two instruments at the EFSF's disposal are at the forefront of the Finance Ministry's scenarios.

Bankruptcy Could Create Credit Crunch

One of these key instruments would be credit lines provided to countries like Spain or Italy if investors stop lending them money after a Greek bankruptcy. If banks were forced to write off the billions in Greek government bonds on their books, they could become reliant on billions in rescue fund aid in numerous euro-zone countries. Both developments are to be expected in a Greek insolvency, regardless of whether the country exits the euro or not.

Volker Bouffier, the governor of the state of Hesse, which is home to Germany's financial capital Frankfurt, is a member of Chancellor Angela Merkel's conservative Christian Democratic Union (CDU) party, as is Schäuble. Bouffier is now urging that the possibility for countries to leave the euro zone be created quickly. Current European Union treaties provide no provisions for a country to abandon the currency.

"If the savings and reform efforts of the Greek government aren't successful, then we need to ask the question of whether we need new rules to make it possible for a euro country to leave the currency union," Bouffier told SPIEGEL.

Merkel Allies Break Taboo

Please consider Merkel allies break taboo with Greek default talk

Senior politicians in German Chancellor Angela Merkel's center-right coalition have started talking openly about a Greek default, reflecting mounting concern in Europe's biggest economy about the debt crisis and pressuring Greece.

"To stabilize the euro, there can no longer be any taboos," Philipp Roesler, economy minister and leader of Merkel's junior coalition partner, the Free Democrats (FDP), told Die Welt.

FDP general secretary Christian Lindner went further, telling the Berliner Morgenpost his party had not ruled out the possibility of Greece leaving the euro zone.

Even senior figures in Merkel's conservative Christian Democrats (CDU) are leaving open the possibility of default.

"The way things are looking, you can no longer rule out a possible Greek restructuring," CDU budget expert Norbert Barthle told Reuters when asked about a default or euro zone exit.

The stakes are high for Merkel who is battling to convince rebels in her coalition to vote for new powers for the European Financial Stability Facility (EFSF) on September 29.

Although she will get the law through due to support from opposition parties, if she fails to secure a majority from the ranks of her own coalition parties her authority will be seriously dented and she may even have to call elections.

Some members of her party have raised questions about Greece's continued membership of the euro zone.

"If the Greek government's efforts to make cuts and reform are not successful, we must also ask the question whether we do not need new rules which make possible the exit of a state from the currency union," Der Spiegel quoted senior CDU member Volker Bouffier as saying.

Merkel herself has ruled out an expulsion of Greece, saying it would trigger a domino effect, but rifts have been opening up in her coalition on the subject.

On Saturday, the conservative Christian Social Union proposed threatening heavily indebted states with having to leave the currency union.

Merkel is in a bind as she tries to push an agenda of greater economic integration as Germans grow more skeptical. A poll this week found 76 percent of Germans opposed to granting any further aid to heavily indebted Greece.

Former German foreign minister Joschka Fischer fed public concern, saying on Sunday the euro could even collapse.

"The situation in Europe is really as serious as it has ever been. Until now, I did not think the euro would fail, but if things continue like this then it will collapse," Fischer, foreign minister for the Greens in their coalition with the Social Democrats from 1998-2005, told Bild am Sonntag.

While Schaeuble readily dispensed with lies, behind the scenes the Merkel government was clearly preparing for bankruptcy.

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

Laugh of the Day: "Greece Bond Swap Progressing Well"

Posted: 11 Sep 2011 09:54 AM PDT

Eurozone news reporting is increasingly humorous. Take for instance this line of thought from Papandreou says to save Greece, stay in euro

I will stop at the punchline. See If you can figure it out.

Finance Minister Evangelos Venizelos said earlier Greece may even take additional fiscal measures in 2011 to make up for budget deficit slippage that threatens the disbursement of an 8 billion euro EU/IMF loan tranche.

Venizelos pledged to further cut the civil service payroll, push privatizations and deepen labor market reforms.

A G7 source said the troika (EU/IMF/ECB), which suspended talks with Athens last week in frustration at Greece's struggle to stick to its deficit reduction plan, would probably come up with a form of words in its next report to allow the next tranche of bailout funds to be paid.

But the working assumption is that Greece will not avoid default indefinitely.

However, a bond swap plan for private bondholders, which is part of the second bailout plan and is supposed to ease Greece's debt payments was progressing well, Venizelos said.

"The private sector is responding very well to the PSI (private sector involvement)," he said, without elaborating, one day after an initial deadline for banks to express interest in the scheme expired.

Did You Catch It?

I suspect most did not catch the humor given it was extremely subtle.

Of course the PSI proposal is going well. The PSI stipulates a 21% haircut on bonds. Meanwhile, more reasonable haircut estimates range from 50 to 90%.

Anyone not willing to take a "voluntary" haircut of 21% is out of their mind. That the offering is going well is a sign of weakness, not strength.

Papandreou said he would cancel the deal unless there was 90% participation. What a joke.

Any bondholder turning down the offer should be fired for stupidity. Then again, they should have been fired long ago for buying Greek bonds in the first place.

I am pleased mainstream media cannot figure these things out because it presents an endless stream of things to write about.

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

Seth's Blog : It's different here

It's different here

The other day, walking through Grand Central, I bumped into a friend, here on vacation with his fiancee.

I got to thinking about why New York City attracts so many tourists, more than just about any city in the world. Not because of natural wonders or even outdoor sports activities. It might be because:

It's different here (as in not the same)
You can find someone to have an argument with, about just about anything
There are fringes--cultural, educational, architectural, societal
More than 42 languages are spoken at the Queens public library
You can get something that's not the regular kind
There are profit-seekers who will happily sell you something, anything
There are many who do things for no profit at all and will eagerly entertain, entrance and change you for the better
You will find a diversity of religious belief like no other
It's changing
The food hasn't been entirely homogenized
People are active
A stranger will go out of his way for you, perhaps, and more often than you expect
There is more information per minute, per meter and per interaction
Neighborhoods are more important than homogeneity, and co-existing is most important

The thing is, here can be anywhere. There are New Yorks going on in towns large and small, in companies big and tiny and in families that support and respect at the same time they embrace and encourage difference.

I remember ten years ago like it was yesterday, looking out the window of my office and wondering if it (all of it) was over. I remember those that suffered and were lost, and those brave enough to risk everything. Not sure we'll ever forget, or if we should.

But now more than ever, I believe we have an obligation to stand up, stand out and to do work that matters. Wherever you are, there's an opportunity to be different, with respect.

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sâmbătă, 10 septembrie 2011

Mish's Global Economic Trend Analysis

"Euro Death Wish" and Global Finger-Pointing: U.S. Senior Official Blames Eurozone for "75% of the Dark Things Happening in the World"
Papandreou's Top Priority "Save the Country from Bankruptcy"; It's Impossible, Greece is Already Bankrupt; Papandreou's Speech Greeted with Protests
Can Government Lies Calm the Markets?

"Euro Death Wish" and Global Finger-Pointing: U.S. Senior Official Blames Eurozone for "75% of the Dark Things Happening in the World"

Posted: 10 Sep 2011 08:15 PM PDT

Anyone expecting a productive G7 meeting has instead been treated to a massive round of global finger-pointing as noted by the Telegraph article Eurozone blamed by US for world's economic plight

Finance ministers of the G7 group of industrialised nations have gathered in the French city of Marseille this weekend to discuss how to avert a looming global economic catastrophe, as markets continue their relentless plunge and deep divisions tear apart the European Central Bank (ECB).

But instead of the predicted economic debate, it emerged on Saturday that the bad-tempered meeting was dominated by American and British warnings that political failures and broken promises in the euro zone were in danger of triggering a wider crisis.

"Seventy-five per cent of the dark things happening in the world economy are because of the euro zone," said a senior US official after a round of talks ended in the early hours of yesterday morning.

George Osborne, the chancellor, also waded into the discussion, upbraiding the French, German and Italian finance ministers and central bankers for failing "convincingly" to implement measures agreed at an emergency euro summit in July - guaranteeing the size and powers of the eurozone rescue fund, and ensuring that Greece will not be allowed to default.

The clashes at G7, which put Britain and the US together on the sideline as members of the European single currency struggle to resolve its internal contradictions, foreshadow an autumn of disarray within the EU. Their parliaments must ratify the plan for the new EU rescue fund, which is unpopular with many voters, especially in the richer countries.

And just when scepticism among its population is at its greatest, there is finally a realisation among eurozone members that the only way to save the single currency may be a dramatic move towards more integrated economic governance.

To underline the growing fears that the single currency is heading for an existential crisis or crash - and as the G7 sat down at the conference table - the news broke on Friday afternoon that Jurgen Stark, one of the EU's most important policymakers, had resigned as the chief economist of the ECB.

Officials described the development as a "bombshell" timed to go off at the "worst possible moment" for French, German and EU attempts to bolster the fraying and tarnished credibility of the euro zone institutions. "There must be some kind of a euro death wish," said one official.

It seems bureaucrats are at long last realizing that a monetary union without a fiscal union cannot possible survive. This presents a two-choice dilemma.

Two Choices

Save the Euro and Destroy Sovereign Governments
Save Sovereign Governments and Destroy the Euro

Given the propensity for government bureaucrats to mangle everything, there is a third possibility: Destroy the Euro and Destroy Sovereign Governments.

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

Papandreou's Top Priority "Save the Country from Bankruptcy"; It's Impossible, Greece is Already Bankrupt; Papandreou's Speech Greeted with Protests

Posted: 10 Sep 2011 06:26 PM PDT

Greece is bankrupt and the entire world knows it. Even ECB president Jean-Claude Trichet cannot be so dense as to not understand Greece is bankrupt, although he is too big a liar to openly admit it.

Nonetheless the Greek Prime Minister refuses to throw in the towel. Please consider Papandreou Pledges to Avoid Default.

Prime Minister George Papandreou said he'll fight to avoid a default and keep Greece in the euro, as resistance builds to extending more aid to the European Union's most-indebted nation.

The government's top priority is "to save the country from bankruptcy," Papandreou said in a speech in the northern Greek city of Thessaloniki last night. "We have taken the decision to fight to avoid a catastrophe for our country and its citizens: bankruptcy. We will remain in the euro. And this meant and means difficult decisions."

The speech was greeted with protests and police battled demonstrators with tear gas in Thessaloniki as Greeks marched against the austerity measures that have cut incomes and driven unemployment to a record. Police in Athens also used tear gas to disperse protesters near the Parliament building.

A total of 4,500 police officers were deployed in Thessaloniki as 15,000 people protested, including students marching against education reforms and taxi drivers opposed to new licensing rules. Police detained 94 and arrested two. Guests ran the gauntlet of protesters to reach the venue and were pelted with eggs.

The government now expects the economy to shrink 5 percent this year, worse than the June estimate of 3.8 percent from the EU and International Monetary Fund, and a deeper contraction than in the past two years. The forecast damps hopes that Greece will meet its pledge to lower its budget deficit to 7.5 percent of gross domestic product in 2011, with the government blaming the slump for a budget gap that widened 25 percent in the first seven months of the year.

Finance Minister Evangelos Venizelos, who on Sept. 6 promised to speed austerity measures pledged in return for the emergency loans, said yesterday the situation was "critical" and that the next two months would be "decisive for our existence."

Nine in 10 Greeks are dissatisfied with the way the government has handled the country's economic crisis, according to a poll by researcher VPRC for Epikaira magazine on Sept. 8. Greek opposition New Democracy party's lead over the governing Pasok party is widening, while a majority of voters don't want early elections, according to opinion polls published last week.

Simple Logic

Logic dictates, one cannot prevent what has already happened. Greece is bankrupt and it is asinine to deny it. Clearly Greek citizens have had enough.

Here is an interesting statement from the article "Germany is preparing a plan to shore up the nation's banks in the event that Greece fails to meet the terms of its aid package and misses a payment on its debt, three members of Chancellor Angela Merkel's coalition said Sept. 9."

In and of itself that statement is not newsworthy. However, as noted in Can Government Lies Calm the Markets?, German Finance Minister Wolfgang Schaeuble denied the claim.

Ironically, the fear should not be that Schaeuble is a liar, but rather that he is telling the truth. If Germany is not making preparations for a Greek default, Germany is well beyond foolish.

My conclusion: Schaeuble is a blatant liar.

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

Can Government Lies Calm the Markets?

Posted: 10 Sep 2011 10:50 AM PDT

The question of the day (for which everyone should know the answer) is Can Government Lies Calm the Markets?

In spite of the fact most of us realize lies will not help, and most often makes matters worse, governments repeatedly resort to lies, platitudes, and wishful thinking.

Jean-Claude Juncker, Luxembourg PM and Head Euro-Zone Finance Minister admitted as such in his statement "When it becomes serious, you have to lie"

Things are clearly serious, so everyone should expect lies, and lies we have in spades.

MarketWatch reports G-7 seeks to calm market fears on Europe, banks

The finance ministers and central bankers of the Group of Seven richest industrial countries sought late Friday to calm market fears about Europe's debt crisis.

A senior U.S. official told Dow Jones that the G-7 leaders spent most of their time behind closed doors dissecting Europe's problems.

The group trumpeted the EU's July 21 agreement to ease financial tensions, saying it would make the European Financial Stability Fund more flexible. At the same time, the euro-zone countries reaffirmed their "inflexible determination" to honor their sovereign debts and their commitments to sustainable fiscal policies and structural reforms.

If G-7 really has "inflexible determination" in the face of default of Greece, then they are not doing what they should be doing, which is to prepare for a Greek default and exit of Greece from the Eurozone. For additional comments please see Common Sense from Eurozone Member Estonia: "Illogical to Exclude the Possibility of Bankruptcy".

This of course leads to the second question: Is "inflexible determination" a lie or just plain stupidity?

MarketWatch: The G-7 said that their central banks "stand ready to provide liquidity to banks as required. … We will take all necessary actions to ensure the resilience of banking systems and financial markets."

Mish: That paragraph is a set of half-truths and lies. The half-truth is the ECB will most assuredly attempt to provide liquidity.

The problem is banks face capital shortfalls. And regarding capital shortfalls the banks, the ECB, and the EU are all in stupefied denial even after Christine Lagarde, new head of the IMF stated banks were undercapitalized. See Lagarde shows independence from Europe as IMF chief .

Sadly Lagarde may have shown independence but the article points out she was immediately attacked by banks for her statements. Christian Noyer, head of the Bank of France, said in response "Either she had been misinformed by her staff at the IMF, that's a possibility, or she did not have French banks in mind." Yeah right.

MarketWatch: The group also said it would maintain close consultations about exchange markets.

That statement is undoubtedly true, but the implication is not especially pretty. Besides, what can they do but monitor things? If they could do anything the DAX (German equities market) would not be in freefall.

MarketWatch: After the meeting, German Finance Minister Wolfgang Schaeuble dismissed a report by Bloomberg News that German officials were readying a plan to recapitalize German banks should their Greek holdings overcome balance sheets.

Schaeuble insisted that the agreement reached with Greece in July was still the focus of the government. "To speculate over other outcomes is pointless," he said, according to Dow Jones.

Mish: Schaeuble's, statements are blatant lies or seriously discomforting truth. In this case, it is hard to know precisely which. I suspect lies (and we should all be hoping for lies) because unless the EU, ECB, and other government officials are making contingency plans for a Greek bankruptcy, there are going to be some very serious consequences soon.

MarketWatch: European Union Commissioner for Economic and Monetary Affairs Olli Rehn told reporters after the G-7 meeting that European banks were better capitalized than they were a year ago.

Mish: There's a lie, especially when the new head of the IMF is willing to admit banks need to be recapitalized.

MarketWatch: The G-7 statement said that countries must find a way to support the global recovery given the clear signs of a slowdown: "Given the still-fragile nature of the recovery, we must tread the difficult path of achieving fiscal adjustment plans while supporting economic activity, taking into account different national circumstances."

Mish: That is the impossible dream, yet probably an implied lie as well.

MarketWatch: U.S. officials said that the G-7 offered strong support for President Barack Obama's $450 billion jobs plan.

Mish: That statement is believable, yet the implications are disastrous for the US if implemented. Everyone wants the US to dig a deeper debt-hole and wreck its economy for the benefit of the rest of the world.

MarketWatch: ECB President Jean Claude Trichet told reporters that Stark resigned for personal reason, Dow Jones said.

Mish: That is a blatant lie by Trichet. Stark did not leave for personal reasons, nor did Axel Weber. Neither wanted to go down with a sinking Euro ship. Please see Germany Prepares "Plan B" Default; Top ECB Official Resigns; German-Italy Bond Spreads Widen Again; Dollar Soars, European Equities Hammered

MarketWatch: Bundesbank President Jens Weidmann said many of the factors that affected the German economy in the second quarter were only temporary and that no new stimulus was needed.

Mish: That is a blatant lie by Weidmann. Europe is imploding, austerity measures without reforms will not help at all, and austerity measures with reform will take a long time to work. There is no way the vaunted German export machine keeps humming along in this global backdrop. The only way "temporary" might be construed as true is if Weidmann means "years".

Obama Lies to Congress and the Nation

While on the subject of lies, there were plenty of them in Obama's address to Congress. Please see Dissecting the Lies in Obama's $447 Billion "Shock-and-Awe" Reelection Ploy; Dead-on-Arrival in Congress? Alternative Proposal Will Not Cost a Dime

Can Government Lies Calm the Markets? It hasn't worked recently as the public and the markets are both fed up with lies. Unfortunately, lies are all the Fed, the ECB, and governments have to offer.

Progress on badly needed structural reforms languishes in favor of "impossible dreams", failed stimulus ideas, wishful thinking, and a mass of blatant lies.

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

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