Paul Munsch is the owner of St. Louis Paving in St. Louis, Missouri. He and his employees have faced years of bullying by the union bosses with whom President Obama continues to side.
Please listen to this video message. Note, the video starts out grainy, I believe on purpose.
I support the idea and the message, but not the candidate who put that video together. Nonetheless, it was very effective message.
I also support Rand Paul's national right-to-work legislation. No business owner should have to put up with such union bullying. Forced collective bargaining is slavery.
Fannie Mae and Freddie Mac have already cost US taxpayers over $200 billion. If Obama gets his way on mortgage writedowns, the GSEs estimate it would take another $100 billion.
Since such estimates are always overly-optimistic by a factor of 3 to 10, I estimate the cost to taxpayers would be $300 billion minimum.
The regulator for Fannie Mae and Freddie Mac told lawmakers that forcing the two mortgage firms to write down loan principal would require more than $100 billion in fresh taxpayer funds.
In a letter sent on Friday to the Republican and Democratic leaders of a House of Representatives government oversight panel, the Federal Housing Finance Agency explained why it has long opposed principal reductions for borrowers who owe more than their homes are worth.
It said it had determined that such reductions would be more costly for the two firms than allowing those troubled borrowers to default.
"Principal reduction never serves the long-term interest of the taxpayer when compared to foreclosure," FHFA's acting director, Edward DeMarco, wrote in the letter to lawmakers dated January 20.
About 22 percent of U.S. homes have negative equity totaling about $750 billion, according to CoreLogic.
"Given that any money spent on this endeavor would ultimately come from taxpayers and given that our analysis does not indicate a preservation of assets for Fannie Mae and Freddie Mac substantial enough to offset costs, an expenditure of this nature at this time would, in my judgment, require congressional action," DeMarco said in the letter.
Another barrier to principal writedowns, aside from pushing losses at the two firms even further, DeMarco said, was the costs associated with new technology and training to servicers that would be needed to launch a program that offers principal forgiveness.
The Federal Reserve, in a white paper to Congress earlier this month, said write-downs "had the potential to decrease the probability of default" and "improve migration between labor markets."
However, the Fed stopped short of endorsing such an initiative and noted concern that writing down loan balances would create a moral hazard -- the concept that rescue efforts breed further behavior that exacerbates the existing problem -- and could prompt other borrowers to stop making timely loan payments.
Calculating the Maximum Cost
At least we know an approximate maximum cap. Negative equity totals $750 billion. Add in cost on implementing the program, graft, fraud, etc. and the cap (right now) is a conservative $760 billion or so. Factor in declining property values and a conservative cap is $800 billion or so.
Obama Seeks Vote-Buying Opportunity
Notice the ridiculous comment by the Fed: write-downs "had the potential to decrease the probability of default". Of course they do.
Write off the entire loan and there would be no chance of default. That does not mean it's a smart thing to do. Unless of course you are President Obama seeking to buy votes in November.
What's interesting in the letter is that they promote principal reduction as costing $100 billion, but the "potential" savings of mods and forbearance is only a few percent. And the data they use has no assumptions for an increase in the overall number of foreclosures as negative equity grows. This whole thing smells of incompetence and corruption.
Mish says ... Exactly!
Not to mention vote buying and I am quite sure back-door bailouts of banks as well (who will be permitted to sell "assets" to Fannie and Freddie in advance).
Steen Jakobsen, chief economist for Saxo bank in Denmark, pinged me with an interesting set of comments this morning. Please consider the tale of the frog and the indebted princess.
This morning I had the pleasure of being on CNBC together with a pundit from a major investment bank. He claimed that if Greece went bankrupt then no one would lend them any money and it would leave them without trading partners. I countered that this would happen anyway if we continue to ignore the losses that creditors need to take on their Greek investments. Only through a Schumpeter-like "Destruction of Capital", after all, can we give Greece a fighting chance to survive.
Why is everyone so afraid of a default? Are we supposed to believe we have banished them forever?
History is full of nations going bankrupt – and in no circumstances has it ever meant a complete loss of trading, credit, etc. Quite the contrary - it's precisely the default and accompanying devaluation that often sows the seeds of a recovery.
Here, according to a Wikipedia article on sovereign defaults, are a few examples of major European sovereigns that have defaulted over the years:
Spain - 15 times! (1557, 1575, 1596, 1607, 1627, 1647, 1809, 1820, 1831, 1834, 1851, 1867, 1872, 1882, 1936-1939) Isn't it interesting that it defaulted most often when it was getting "something for nothing" in the form of New World gold riches?
Brazil - 10 times inside the last 115 years (1898, 1902, 1914, 1931, 1937, 1961, 1964, 1983, 1986-1987, 1990)
Russia (1839, 1885, 1918, 1947, 1957, 1991, 1998)
India (1958, 1969, 1972)
China (1921, 1932, 1939)
The complete list in the above link includes a list of 39 African sovereign defaults, 26 Asian sovereign defaults, a whopping 91 European sovereign defaults, and for the Americas, a stunning 154 sovereign defaults.
Wow! Could it be that some of the "competitiveness" the BRICs and other countries have today is based on episodes of cleaning the slate and declaring a new beginning? Why must we hang on forever to old debt and past mistakes?
Down with the pro-zombie Keynesians and up with the lessons from history!
Also…please, please let this talk about whether or not the ECB is doing QE stop right now. The ECB's balance sheet is up 38% since July 1st of last year. The same period saw the Fed's balance increase by one per cent! Talk about printing money.
It seems that the Princess Merko-zy did indeed kiss the frog and it morphed into a hopelessly indebted Club Med Prince. And then they lived happily ever after? My compatriot Hans Christian Andersen would have been proud of today's politicians and their penchant for perpetuating fantasy.
The only problem? Domestic banks in the PIIGS countries are fast concentrating their exposure to their own sovereign's debt, and this is increasing the leverage in the system and the risk of systemic contagion. The LTRO is merely a massive dose of morphine applied to reduce he pain from the mortal wound that the EU has inflicted on its finances over the years. It has succeeded in reducing the pain, but the problem remains that ever increasing doses will be needed to hide the pain until that wound kills the patient if the EU refuses to go in and perform emergency surgery.
Finally, the stress indicators have now more or less "mean-reverted" back to 200 day moving-average from here we need more than just hope to keep the game going. Note how ECB deposit and the REPO value continues down, while the banking stress has diminished – for a while.
I am off to the one country in Europe which makes sense: Switzerland. Safe travels.
Given Switzerland's currency peg, I do not think the Swiss Central Bank makes that much sense either. Perhaps in relative terms.
Berlin appeared to soften its longstanding resistance to increasing the funds only hours after the International Monetary Fund warned that the eurozone needed more money to build "a larger firewall" to prevent the crisis from spreading to its core economies.
In return the German chancellor wants eurozone heads of government to sign up to rules to cut budget deficits and public debt that are much tougher than those currently foreseen by eurozone governments.
For Ms Merkel, increasing the fund risks a showdown with a restive parliament that is sceptical of further exposing German taxpayers to the rescue effort. But she is now said to be willing to take that risk if she can put her stamp on the budget rules in the fiscal compact.
"We think we can get the ESM approved if we link it to solid new budget rules," a German official said. One European official in turn said Germany was "framing the debate" about budget rules with a possible trade-off on the size of the bailout fund.
David Stockman former budget director for President Reagan, appeared on Bill Moyers and presented his message about money, Wall Street financiers, and crony capitalism.
Money dominates politics, distorting free markets and endangering democracy. "As a result," Stockman says, "we have neither capitalism nor democracy. We have crony capitalism."
Stockman shares details on how the courtship of politics and high finance have turned our economy into a private club that rewards the super-rich and corporations, leaving average Americans wondering how it could happen and who's really in charge.
"We now have an entitled class of Wall Street financiers and of corporate CEOs who believe the government is there to do… whatever it takes in order to keep the game going and their stock price moving upward," Stockman tells Moyers.
Click on the above link for a full transcript. Here are a few select quotes.
DAVID STOCKMAN: A massive amount of resources are being devoted, being allocated or being channeled into pure financial speculation that has no gain to society as a whole, has no real economic contribution to the process by which GNP is created, GDP is created and growth occurs.
By 2007 40 percent of all the profits in the American economy were coming from finance companies. 40 percent. Historically it was 15 percent.
So the financialization means that as we attracted more and more resources and capital, and we made speculation easier and easier, and we funded it with almost free overnight money, managed and manipulated by the Fed, that's how the economy got financialized. But that is a casino. Casinos -- they're, you know, places for people to go if they want to speculate and wager. But they're not part of a healthy, constructive economy.
BILL MOYERS: What do you mean by the free money that banks are using overnight?
Well, by that we mean when the Fed, the Federal Reserve sets the so-called federal funds rate at ten basis points, where it is today, that more or less guarantees banks can go into the Fed window, the discount window, and borrow at ten basis points.
And then you take that money and you buy a government bond that is yielding two percent or three percent. Or buy some corporate bonds that are yielding five percent. Or if you want to really get aggressive, buy some Australian dollars that have been going up. Or buy some cotton futures. And this is really what has been going on in our markets.
The cheap funding, which is guaranteed by the Fed, the investment of that cheap funding into speculative assets and then pocketing the spread. And you can make huge amounts of money as long as the music doesn't stop. And when the music stops then all of a sudden, the cheap, overnight money dries up. This is what's happening in Europe today. This is what happened in 2008.
And then people are stuck with all these risky assets, and they can't fund them. They owe cash to the people they borrowed overnight from or on a weekly basis. That's what creates the so-called contagion. That's what creates the downward spiral. Now, unless we let those burn out, it'll be done over and over. In other words, if, you know, if a lesson isn't learned, then the error will be repeated over and over.
BILL MOYERS: The Bush administration came to the rescue of some of the county's largest financial institutions, to the tune of 700 billion tax-payer dollars. DAVID STOCKMAN: We elect a new government because the public said, you know, "We're scared. We want a change." And who did we get? We got Larry Summers. We got the same guy who had been one of the original architects of the policy in the 1990s, the financialization policy, the too big to fail policy.
Who else did we get? We got Geithner as Secretary of the Treasury. He had been at the Fed in New York in October 2008 bailing out everybody in sight. General Electric got bailed out. Morgan Stanley, Goldman Sachs, all of the banks got bailed out, and the architect of that bailout then becomes the Secretary of the Treasury. So it's another signal to the financial markets that nothing ever changes. The cronies of capitalism are in charge of policy.
....
The Congress is owned lock, stock and barrel by one after another, after another special interest. And they logically say how can we expect, you know, anything good to come out of this kind of process that seems to be getting worse. So how do we turn that around? I think it's going to take, unfortunately a real crisis before maybe the decks can be cleared.
BILL MOYERS: But on the basis of the record, the lessons of the past. The experience you have just recounted and are writing about. Do you see any early signs that we might turn the ship from the iceberg?
DAVID STOCKMAN: No. I think we've learned no lessons. We really have not restructured our financial system. The big banks that existed then that were too big to fail are even bigger now. The top six banks then had seven trillion of assets, now they have nine or ten trillion.
Rather than go to the fundamentals which have been totally neglected-- we've simply kind of papered over the current system and continued the game of having the Federal Reserve and the Treasury if necessary prop up all of this leverage and speculation, which isn't helping the economy.
And when we talk about zero interest rates. That's not helping Main Street. Our problem in this economy is not our interest rates are too high. The zero interest rates are just more fuel for leverage speculation for what's called the carry trade and that is causing windfall benefits to the few but it's leaving the fundamental problems of our economy in worse shape than they've ever been.
In 1985 Stockman wrote The Triumph of Politics: The Inside Story of the Reagan Revolution. 30 years later Stockman laments...
"I was in the middle of being very disgusted with what my own Republican Party had done and what Bush had done and the Paulson Treasury. And then when I saw this, I got the title for my book, "The Triumph of Crony Capitalism."
It's so disappointing to see that the Obama administration, which in theory should've had more perspective on this than a Republican administration under Bush, to see that one, they appointed in the key positions the same people who brought the problem in: Geithner and Summers and all of those, and secondly, that Obama did nothing about it."
Stockman's new book, The Triumph of Crony Capitalism, rates to be a good one.
Britain has sunk deeper into debt. Three years after bubble burst, the UK has barely begun to tackle the crushing burden left by Gordon Brown. The contrast with the United States is frankly shocking.
US debt is already lower than Spain (363pc), France (346pc), or Italy (314pc), and may undercut Germany (278pc) before long -- given the refusal of the European Central Bank to offset fiscal contraction with monetary stimulus.
One is tempted to ask what all the fuss was about in the US. The debt of financial institutions is just 40pc, compared to the UK (219pc), Japan (120pc), France (97pc), Germany (87pc) and Italy (76pc). Bank debt has dropped from $8 trillion to $6.1 trillion -- accelerated by the Lehman collapse -- as lenders rely more on old-fashioned deposits.
In hindsight, the US property boom was remarkably modest compared to what happened in Spain, or what is happening now in China now where the house price to income ratio in Beijing, Shanghai, and Shenzhen is near 18. America's ratio peaked at 5.1 and is already back to its modern era average of three. The excesses have been unwound.
Personally, I am coming to the conclusion that the US crisis in 2008-2009 was largely a case of botched monetary policy and could easily have been avoided. The growth of M3 money -- which the Fed stopped tracking thanks to a young Ben Bernanke -- was allowed to balloon in the bubble, then collapse in 2008.
US Did Not Overcome Debt Crisis
There is a big difference between alleged "light at the end of the tunnel" and "America Overcomes Debt Crisis" as Pritchard claims. US consumers may be one-third of the way through, but US debt-to-GDP ratios are low only because unsustainable government spending has taken up the slack.
The US has not started government debt deleveraging and until that is nearly finished there will not be light at the end of the tunnel, let alone the end of the crisis. Optimistically, the best one can possibly assert is one can possibly see light at the end of the "consumer tunnel". The government tunnel immediately follows.
Moreover, one should not be "tempted to ask what all the fuss was about in the US". Just because other nations are worse, does not mean the US had no problem.
Five-Pronged Solution
US monetary policy and ECB monetary policy is partially to blame for these crises as Pritchard says. Reckless fiscal policies by governments everywhere is another part of the problem. The five-pronged solution which Pritchard does not mention is ...
The European crisis now was foreseen in advance by many, including Pritchard.
Certainly the ECB's "one size fits Germany" interest rate policy fueled the property bubbles in Spain and Ireland, as well as imbalances in Italy, Greece, and Portugal.
Unlike the US, the eurozone has the structural additional problem of being a monetary union without a fiscal union. Not one such currency union in history has ever survived.
Bailing out Greece and Portugal and Ireland will not fix structural problems including the ECB's "one size fits all" interest rate dilemma.
Debt and Deleveraging
Here are some excerpts from the McKinsey Global Institute PDF. Click on any chart below for a sharper image.
Executive Summary
The deleveraging process that began in 2008 is proving to be long and painful, just as historical experience suggested it would be. Two years ago, the McKinsey Global Institute published a report that examined the global credit bubble and provided in-depth analysis of the 32 episodes of debt reduction following financial crises since the 1930s. The eurozone's debt crisis is just the latest reminder of how damaging the consequences are when countries have too much debt and too little growth.
In this report, we revisit the world's ten largest mature economies to see where they stand in the process of deleveraging. We pay particular attention to the experience and outlook for the United States, the United Kingdom, and Spain, a set of countries that covers a broad range of deleveraging and growth challenges.
Deleveraging Only Just Begun
1 Includes all loans and fixed-income securities of households, corporations, financial institutions, and government. 2 Defined as an increase of 25 percentage points or more. 3 Or latest available.
The United States: A light at the end of the tunnel
Since the end of 2008, all categories of US private-sector debt have fallen relative to GDP. Financial-sector debt has declined from $8 trillion to $6.1 trillion and stands at 40 percent of GDP, the same as in 2000. Nonfinancial corporations have also reduced their debt relative to GDP, and US household debt has fallen by $584 billion, or a 15 percentage-point reduction relative to disposable income. Two-thirds of household debt reduction is due to defaults on home loans and consumer debt. With $254 billion of mortgages still in the foreclosure pipeline, the United States could see several more percentage points of household deleveraging in the months and years ahead as the foreclosure process continues.
[Mish Note: notice the key phrase "months and years ahead"]
Even when US consumers finish deleveraging, however, they probably won't be as powerful an engine of global growth as they were before the crisis. One reason is that they will no longer have easy access to the equity in their homes to use for consumption. From 2003 to 2007, US households took out $2.2 trillion in home equity loans and cash-out refinancing, about one-fifth of which went to fund consumption.
Without the extra purchasing that this home equity extraction enabled, we calculate that consumer spending would have grown about 2 percent annually during the boom, rather than the roughly 3 percent recorded. This "steady state" consumption growth of 2 percent a year is similar to the annualized rate in the third quarter of 2011.
US government debt has continued to grow because of the costs of the crisis and the recession. Furthermore, because the United States entered the financial crisis with large deficits, public debt has reached its highest level—80 percent of GDP in the second quarter of 2011—since World War II.
The next phase of deleveraging, in which the government begins reducing debt, will require difficult political choices that policy makers have thus far been unable to make.
That last sentence, coupled with the fact that consumer deleveraging is only 1/3 finished is precisely why the headline title by Pritchard that "America Overcomes the Debt Crisis ..." is quite inaccurate.
Not only that, but growth assumptions remain absurdly high as do earnings forecasts.
1 Includes all loans and fixed-income securities of households, corporations, financial institutions, and government. 2 Q1 2011 data.
UK household debt, in absolute terms, has increased slightly since 2008. Unlike in the United States, where defaults and foreclosures account for the majority of household debt reduction, UK banks have been active in granting forbearance to troubled borrowers, and this may have prevented or deferred many foreclosures. This may obscure the extent of the mortgage debt problem. The Bank of England estimates that up to 12 percent of home loans are in a forbearance process. Another 2 percent are delinquent.
Overall, this may mean that the UK has a similar level of mortgages in some degree of difficulty as in the United States. Moreover, around two-thirds of UK mortgages have floating interest rates, which may create distress if interest rates rise—particularly since UK household debt service payments are already one-third higher than in the United States.
Spain: The long road ahead
The global credit boom accelerated growth in Spain, a country that was already among the fastest-growing economies in Europe. With the launch of the euro in 1999, Spain's interest rates fell by 40 percent as they converged with rates of other eurozone countries. That helped spark a real estate boom that ultimately created 5 million new housing units over a period when the number of households expanded by 2.5 million. Corporations dramatically increased borrowing as well.
As in the United Kingdom, deleveraging is proceeding slowly. Spain's total debt rose from 337 percent of GDP in 2008 to 363 percent in mid-2011, due to rapidly growing government debt. Outstanding household debt relative to disposable income has declined just 6 percentage points. Spain also has unusually high levels of corporate debt: the ratio of debt to national output of Spanish nonfinancial firms is 20 percent higher than that of French and UK nonfinancial firms, twice that of US firms, and three times that of German companies. Part of the reason for Spain's high corporate debt is its large commercial real estate sector, but we find that corporate debt across other industries is higher in Spain than in other countries. Spain's financial sector faces continuing troubles as well: the Bank of Spain estimates that as many as half of loans for real estate development could be in trouble.
Spain has fewer policy options to revive growth than the United Kingdom and the United States. As a member of the eurozone, it cannot take on more public debt to stimulate growth, nor can it depreciate its currency to bolster its exports. That leaves restoring business confidence and undertaking structural reforms to improve competitiveness and productivity as the most important steps Spain can take. Its new government, elected in late 2011, is putting forth policy proposals to stabilize the banking sector and spur growth in the private sector.
Note how Spain was massively skewered by the ECB's "one size fits Germany" interest rate policy. That structural problem remains in spite of all the can kicking by the US and ECB with lending schemes and the LTRO.
Let's return to the report for one more chart from the report.
US Household Debt Ratios
There are a lot of optimistic assumptions in that report. The above chart highlights one of the biggest assumptions.
Certainly one can make a case that the change from single-household worker families to dual-household worker families (both husband and wife working), accounts for the rise is sustainable debt loads from 1955 to 1985.
How much of the rest is sustainable? I suggest little to none of it is. The stock market boom of the 90's followed by housing bubble in the 2000's is what made families "feel" wealthy.
Negative Stock Market Returns for another Decade?
With global growth slowing, coupled with an enormous change in boomer demographics, combined with massive amounts of deleveraging still to come in the top 10 economies, the likelihood the stock market puts in another sustainable boom as it did in the 90's is highly unlikely. When households feel wealthy they are apt to take on more debt.
In a debt deleveraging cycle, not only does feeling wealthy go away, so does the likelihood of strong returns in the stock market. Indeed, I have made the case for Negative Returns for Another Decade
For the sake of argument let's assume an optimistic case of 4-5% annualized returns for another decade. Is that enough to keep that household debt trend intact?
Of course not. The idea the trendline itself should go up over time is complete silliness unless there is a structural change as there was in the 60's and 70's when women went to work en masse.
Nonetheless, the McKinsey Global Institute report is well worth a look in entirety. Click on the first link at the top for an opportunity to download the full 64-page report.
Obvious flaws aside, the report is a great read containing a wealth of information on debt levels of countries and what has been done to address the issues so far.
As Americans enter 2012, their choice of bank may be increasingly important. Since regulations implemented in 2010 limit banks' power to charge overdraft fees, many banks are looking for new ways to recoup the income they lost from this type of service fee.
In October, President Obama declared that, as a nation, we can’t wait for a gridlocked Congress to resolve their differences and start passing legislation that will jumpstart the economy. Since then, the President himself has taken almost 20 different actions to support the middle class and create jobs.
Here are some of the top stories from the White House blog:
Your State of the Union Interview with President Obama In the first completely-virtual interview from the White House, President Obama will answer questions that have been submitted by Americans from across the country via YouTube. The virtual event with the President will happen through Google+ Hangouts, a live multi-person video chat.
Weekly Address: America is Open for Business President Obama tells the American people about a series of steps he's taken without the help of Congress to grow the economy and create jobs -- including a new strategy aimed at boosting tourism introduced this week.
Today's Schedule
All times are Eastern Standard Time (EST).
10:30 AM: The President and the Vice President receive the Presidential Daily Briefing
12:00 PM: Press Briefing by Press Secretary Jay Carney
1:40 PM: The President welcomes the six-time Stanley Cup Champion Boston Bruins to the White House to honor the team and their 2011 Stanley Cup victory
In the real world, things go wrong. While we might all wish that everything we did was "fix once, stay fixed", that's rarely the case.
Things that were previously "not a problem"(TM) can become "a problem"(TM) rapidly for a variety of reasons:
someone changes something unrelated / without realising it would impact you or just screws up (e.g. deploying a staging version of robots.txt or an old version of a server config)
the world changes around you (there was a Google update named after a black and white animal a while back)
the technical gremlins gang up on you (server downtime, DDoS etc.)
In all of these cases, you'd rather know about the issue sooner rather than later because in most of them your ability to minimise the resulting issues declines rapidly as time passes (and in the remaining cases, you still want to know before your boss / client).
While many of us have come round to the idea that we should be making recommendations in these areas, we are too often still creating spectacularly non-actionable advice like:
make sure you have great uptime
make sure your site is quick
Today, I want to give you three pieces of directly actionable advice that you can start doing for your own site and your key clients immediately that will help you spot problems early, avoid knock-on indexing issues and quickly get alerted to bad deploys that could hurt your search performance.
#1 Traffic drops
Google Analytics has a feature that spots significant changes in traffic or traffic profile. It can also alert you. The first of these features is called "intelligence" and the second "intelligence alerts".
Rather than rehash old advice, I'll simply link to the two best posts I've read on the subject:
This is the simplest of all the recommendations to implement and is also the most holistic in the sense that it can alert you to traffic drops of all kinds. The downside of course is that you're measuring symptoms not causes so you (a) have to wait for causes to create symptoms rather than being alerted to the problem and (b) get an alert about the symptom rather than the cause and have to start detective work before paging the person who can fix it.
#2 Uptime monitoring
It doesn't take a rocket surgeon to realise that SEO is dependent on your website. And not only on how you optimise your site, but also on it being available.
While for larger clients, it shouldn't be your job to alert someone if their website goes down, it does no harm to know and for smaller clients there is every chance you'd be adding significant value by keeping an eye on these things.
I have both good and bad reasons for knowing a lot about server monitoring:
the good: we made a small investment in Server Density in May last year (and scored our only link from Techcrunch in the process)
the bad: we've been more enthusiastic users of our portfolio company's services than we might have hoped - some annoying server issues have resulted in more downtime for distilled.net than I care to think about. To add insult to injury, we managed to get ourselves hit with a DDoS attack last week (see speed chart below)
There are three main elements you might want to monitor:
Pure availability (including response code)
Server load and performance
Response speed / page load time
Website availability
There are two services I recommend here:
Pingdom's free service monitors the availability and response time of your site
Server Density's paid service provides more granular alerting and graphing as well as tying it together with your server performance monitoring
Here's what the Server Density dashboard looks like:
And here is the response time graph from pingdom:
You can see the spike in response time during the DDoS attack and the lower average response time over the last few days after we implemented cloudflare
This was the most ambitious of my ideas for SEO monitoring. It came out of a real client issue. A major client was rolling out a new website and managed to deploy an old / staging version of robots.txt on a Saturday morning (continuous integration FTW). It was essentially luck that the SEO running the project was all over it, spotted it quickly, called the key contact and got it rolled back before it did any lasting harm. We had a debrief the following week where we discussed how we could get alerted to this kind of thing automatically.
I went to David Mytton, the founder of Server Density and asked him if he could build some features in for you lot to alert when this kind of thing happens - if we accidentally noindex our live site or block it in robots.txt. He came up with this ingenious solution that uses functionality already present in their core platform:
Monitoring for any change to robots.txt
First create a service to monitor robots.txt - here's ours:
Then create an alert to tell you if the MD5 hash of the contents of robots.txt changes (see a definition of MD5 here):
If you copy and paste the contents of your robots.txt into an MD5 generator you get a string of gobbledegook (ours is "15403cbc6e028c0ec46a5dd9fffb9196"). What this alert is doing is monitoring for any change to our robots.txt so if we deploy a new version I will get an alert by email and push notification to my phone. Wouldn't it be nice to get alerted in this way if a client or dev team pushed an update to robots.txt without telling you?
Spotting the inclusion of no-index meta tags
In much the same way, you can create alerts for specific strings of text found on specific pages - I've chosen to get an alert if the string "noindex" is found in the HTML of the Distilled homepage. If we ever deployed a staging version or flipped a setting in a wordpress plugin, I'd get a push notification:
Doing this kind of monitoring is essentially free to me because we are already using Server Density to monitor the health of our servers so it's no extra effort to monitor checksums and the presence / absence of specific strings.
#4 Bonus - why stop there?
Check out all the stuff that etsy monitor and have alerts for. If you have a team that can build the platform / infrastructure, then there are almost unlimited things you could monitor for and alert about. Here are some ideas to get you started:
status codes - 404 vs 301 vs 302 vs 500 etc.
changes in conversion rates / cart abandonment
bot behaviour - crawling patterns etc - given how disproportionately interested I was in the simple "pages crawled" visualisation available in cloudflare (see below - who'd have guessed we get crawled more by Yandex than Google?), I feel there is a lot more that could be done here:
PS - today is the last day for early bird discounts on our Linklove conferences in London and Boston at the end of March / beginning of April. (There's also a sign-up form on that page if you want to make sure you always hear about upcoming conferences and offers). I hope to see many of you there.
Sign up for The Moz Top 10, a semimonthly mailer updating you on the top ten hottest pieces of SEO news, tips, and rad links uncovered by the Moz team. Think of it as your exclusive digest of stuff you don't have time to hunt down but want to read!
Tomorrow, President Obama will deliver his State of the Union address at 9:00 p.m. ET. During that speech, he’ll lay out his vision for an America where hard work and responsibility are rewarded, where everyone does their fair share, and where everyone is held accountable for what they do.
There is a range of ways to get involved with this year’s State of the Union address.
Immediately following the President’s speech on Tuesday, be sure to stay tuned to WhiteHouse.gov/SOTU for a live panel featuring senior White House advisors answering your questions about the speech. Then, on Wednesday, Thursday, and Friday, a group of policy experts and advisors to the President will sit down for Office Hours on Twitter -- discussing the issues that matter to you and your community.
Finally, on Monday, January 30, President Obama will join the conversation in a special Google+ Hangout, a live multi-person video chat, from the White House.
Participating in the Hangout is easy -- just visit the White House YouTube channel to submit your questions and vote for your favorites between now and January 28. A few participants will be chosen to join the President in the Google+ Hangout to ask their questions of the President live!
Check out WhiteHouse.gov/SOTU to learn more about watching the enhanced State of the Union online and all the ways you can ask questions this week:
9:00 p.m.: Watch the enhanced version of the speech that features graphics, data and stats that highlight the issues the President is discussing on WhiteHouse.gov/SOTU. Use the Twitter hashtag #SOTU to discuss the speech live.
10:00 p.m.: Immediately following the speech, pose your questions to a live panel at the White House. Senior advisors will answer your questions about the President’s address submitted via Twitter (use #WHChat and #SOTU), Facebook, Google+, and an in-person audience of Tweetup participants.
Wednesday Office Hours Schedule
All Day: Josh Earnest, Principal Deputy Press Secretary, answers your questions on Twitter (@jearnest44)
1:00 p.m.: Office Hours with Mark Zuckerman, Deputy Director of the Domestic Policy Council
3:00 p.m.: Office Hours with Dan Pfeiffer (@pfeiffer44), White House Communications Director
Thursday Office Hours Schedule
10:00 a.m. Veterans: Matt Flavin, White House Director of Veterans and Wounded Warrior Policy
11:00 a.m. LGBT: Miriam Vogel, White House Senior Policy Advisor and Gautam Raghavan, White House Associate Director for Public Engagement
12:00 p.m. Women: Racquel Russell, Special Assistant to the President for Mobility and Opportunity and Avra Siegel, White House Deputy Executive Director for the Council on Women and Girls
1:00 p.m. Seniors: Jeanne Lambrew, Deputy Assistant to the President for Health Policy and Nick Papas, Assistant Press Secretary
2:00 p.m. Latinos: Felicia Escobar, White House Senior Policy Advisor, Julie Rodriguez, White House Associate Director of Public Engagement and Luis Miranda, White House Director of Hispanic Media
4:00 p.m. Small Business Owners: Christine Koronides, Senior Advisor for Economic Policy, National Economic Council
5:00 p.m. African Americans: Danielle Gray, Deputy Assistant to the President for Economic Policy
6:00 p.m. Asian American Pacific Islanders: Chris Lu, Assistant to the President and Cabinet Secretary
TBD Youth: Administration official to be announced
Friday Office Hours Schedule
11:00 a.m. Foreign Policy: Ben Rhodes, Deputy National Security Advisor for Strategic Communications and Speechwriting
12:00 p.m. Education: Roberto Rodriguez, Special Assistant to the President for Education Policy
1:00 p.m. Health: Jeanne Lambrew, Deputy Assistant to the President for Health Policy and Nick Papas, Assistant Press Secretary
2:00 p.m. Energy: Heather Zichal, Deputy Assistant to the President for Energy and Climate Change and Dan Utech, Deputy Director for Energy Policy
3:00 p.m. Consumer Protections: Brian Deese, Deputy Director National Economic Council
4:00 pm The Economy: Jason Furman, Principal Deputy Director National Economic Council
5:00 p.m. Job Opportunities: Portia Wu, Senior Policy Advisor for Mobility and Opportunity Policy
6:00 p.m. Urban Issues: Racquel Russell, Special Assistant to the President for Mobility and Opportunity
Monday January 30
President Obama participates in a Google+ Hangout from the White House
Years ago, my bosses and I needed to finalize the pricing for a new line of software I was launching. In the room we had MBAs from Harvard (2), Stanford, Tuck and, I think, Wharton. We had three prices in mind, and the five of us couldn't agree. So we did the only scientific thing: we flipped a coin (two out of three, just to be sure).
Pricing your product is actually simple, as long as you consider it from the buyer's point of view. How much it costs you to make something is irrelevant. They don't care (of course, you can't price something at a loss and hope to stay in business for long). The two keys to the analysis:
Substitutes: Every purchase is a choice, and that means the buyer can choose to do nothing or buy something else instead. If there are easy and obvious substitutes to what you sell, that has to be built into your pricing. If you make something rare and unique, you still might not be able to charge a lot--because people can always choose to buy nothing. A 42 carat diamond, for example, might be hard to replace, but it's not worth $100 million unless someone actually chooses to buy it.
Part of the work of design and marketing is to help people understand that there are no good substitutes for what you have to offer, meaning, of course, that you can happily charge more.
Story: The other half of the pricing formula is the story the price itself tells. A Prius at $40,000 or a Prius at $10,000 is the same car, but the price becomes a dominant part of the story. You can tell a story of value/cheapness/affordability, or a story of luxury. If you price your product or service near the median, you're telling no story at all with the price, giving you the chance to tell a story about some other element of what you sell.
If you're not happy with your pricing options, focusing on your costs might not be the right path. Instead, focus on how the design or delivery change the availability of substitutes, and how the price becomes part of the story of your product.
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