Central Perk

sâmbătă, 18 februarie 2012

Mish's Global Economic Trend Analysis

Irish Home Loans 90+ Days Delinquent Hits 9.2%; Spain Lending Shrinks at Record Pace
Germany Draws Up Plans for Greece to Leave Euro; Athens Rehearses the Nightmare of Default; Merkel's Denial Rings Hollow
China Exports "Grim"; Bad Loans Rise in Fourth Quarter; China Cuts Bank Reserve Requirements; Looking for Miracles

Irish Home Loans 90+ Days Delinquent Hits 9.2%; Spain Lending Shrinks at Record Pace

Posted: 18 Feb 2012 10:58 PM PST

Spain and Ireland have economies in shambles over housing bubbles popped long ago. Damage continues to mount. Here are a pair of stories highlighting problems.

Bloomberg reports Irish Home Loans At Least 90 Days In Arrears Rise to 9.2%

Irish home loans in arrears for more than 90 days rose to 9.2 percent at the end of last year from 8.1 percent at the end of the third quarter, according to the country's central bank.

A total of 107,708 home mortgages, or 14 percent of the total, were either 90 days in arrears or had been restructured and were performing at the end of December, the central bank said in an e-mailed statement today.

Spain Lending Shrinks at Record Pace

In the wake of Spanish real estate collapse, Spain Lending Shrinks at Record Pace as Defaults Rise

Lending fell by 3.3 percent in December from a year before, the biggest drop since Bank of Spain records started half a century ago, the regulator said on its website today. Bad loans as a proportion of total loans rose to 7.61 percent from 7.52 percent in November as borrowing considered "doubtful" jumped to 136 billion euros ($179 billion) from about 11 billion euros five years ago, before Spain's property crash.

The prospect of a protracted recession in Spain is curbing the appetite for loans and making banks more cautious about lending. The economy may shrink 1.5 percent this year, according to central bank forecasts, while unemployment stands at 23 percent. Exane BNP Paribas predicts an economic contraction could stretch through 2013.

Banks piled up apartments and building land on their balance sheets as loans to property developers and mortgage borrowers soured during the crash. The government is talking to banks to try to reduce the number of people evicted from their homes for failing to pay their mortgages, Economy Minister Luis de Guindos said in an interview with state radio RNE late yesterday.

Deposits gathered by Spanish lenders declined 4.6 percent from a year earlier, the Bank of Spain said. Deposits increased 0.5 percent from November, the regulator said.

Misery in Spain

Various austerity measures, tax hikes, and cuts to regional governments ensure that the recession in Spain will be both long and deep.

For more on the misery in Spain, please see ...

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

Germany Draws Up Plans for Greece to Leave Euro; Athens Rehearses the Nightmare of Default; Merkel's Denial Rings Hollow

Posted: 18 Feb 2012 06:32 PM PST

It's been crystal clear for weeks, if not much longer, that Germany has been actively seeking to persuade Greece to abandon the Euro.

Confirmation came on February 7 with Merkel's Official Denial "I will have no part in forcing Greece out of the euro"; Schäuble Starts Salami Tactics on German Participation, Calls for Vote .

Note carefully how the "I"s are being dotted and the "T"s crossed. The ECB refuses to take a haircut on its Greek bond holding so now we have this last-minute debt swap to bail out the ECB right before the rug is pulled.

My friend Pater Tenebrarum had an excellent writeup on the debt swap in Credit Market Watch – ECB To Participate in Greek Debt Exchange.

Pieces of the Puzzle are In Place

Greek CDS contracts are down to a mere $2.8 billion
Merkel's "Official Denial"
German Finance minister places numerous roadblocks on Greece accepting the next bailout
A Debt Sawp will enable the ECB to be made whole (at the expense of German and French taxpayers of course)
Dress Rehearsal

The Financial Times discusses the dress rehearsal in Athens rehearses the nightmare of default

On Friday afternoon, Constantine Michalos, president of the Athens chamber of commerce, sat in his office – around the corner from where protesters were hurling chunks of marble at riot police – and contemplated what was once unthinkable: that Greece would default on its debt and then be forced into a messy exit from the euro.

"All hell would break loose," Mr Michalos said, sketching a society that would quickly run short of fuel, food, medicine and necessities. "You would have social upheaval."

On Monday, eurozone finance ministers gather in Brussels to consider a €130bn bail-out that Greece counts on to avoid such a scenario.

What's likely early next week is a debt swap in which the ECB gets new bonds guaranteed in Euros, then immediately transferred to the EFSF making the ECB whole. Some relatively short time later, the Troika will refuse to lend more money to Greece forcing Greece to go back on the Drachma.

Germany Draws Up Plans for Greece to Leave Euro

Let's now get to the heart of the matter. The Telegraph reports Germany Draws Up Plans for Greece to Leave Euro

The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020.

"The idea instead is that the Greek government should officially declare itself bankrupt and begin negotiating an even bigger cut with its creditors. For Schäuble, it is more a question of when, not if."

The German finance minister's comments are certain to plunge the authorities in Athens into even deeper gloom. On Saturday they tried to sound optimistic, with a cabinet meeting to thrash out the final details of an austerity package.

With Greek morale at rock bottom, the national mood darkened yet further after armed thieves looted a museum on Friday in Olympia, birthplace of the Olympic Games, and stole bronze and pottery artifacts - just weeks after the country's National Gallery was burgled.

One Greek newspaper suggested the state could no longer properly look after the nation's immense cultural heritage. "The Greek state has gone bankrupt, let's face it," the conservative daily Kathimerini said in an editorial.

Mr Schäuble maintains that since Greece is already regarded by the financial world as bankrupt, a formal bankruptcy would have no negative consequences for other euro members.

Merkel's Denial Rings Hollow

I side with Schäuble. Moreover, I do not believe Merkel is sincere when she says "Greece going bust could cause a shock wave that buries other countries - with Spain and Italy among them".

Rather, Merkel simply does not want to be the scapegoat, preferring to make it look like this was Greece's choice, not hers. She will be a hero in Germany when Greece leaves the Euro, in spite of her façade, pretending she does not want that to happen.

The irony is shock waves will indeed come later when Portugal and Spain exit the Euro, given that all the bureaucrats still think "Greece is unique". In reality, the Euro is a failed idea with too many structural flaws to paper over.

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

China Exports "Grim"; Bad Loans Rise in Fourth Quarter; China Cuts Bank Reserve Requirements; Looking for Miracles

Posted: 18 Feb 2012 08:42 AM PST

Given the previous misguided stimulus efforts in China, it is not surprising to discover Chinese Banks' Bad Loans Rise in Fourth Quarter.

Chinese commercial banks' bad loans increased in the fourth quarter of last year, highlighting pressures the lenders face in maintaining asset quality as the economy slows.

Non-performing loans rose 20.1 billion yuan ($3.2 billion) to 427.9 billion yuan as of Dec. 31, the China Banking Regulatory Commission said in a report on its website today. Bad loans accounted for 0.96 percent of total lending, up from 0.95 percent in September and 0.17 percentage point lower than a year earlier.

Chinese banks are struggling to keep bad loans in check as the country's economic expansion slows and the housing market cools under government curbs. Lenders' non-performing loan ratio had not increased quarter-on-quarter since the end of 2005, according to data compiled by Bloomberg.

China Cuts Bank Reserve Requirements

Bad loans or not, in an attempt to keep its faltering economy together, China Cuts Bank Reserve Requirements.

China cut the amount of cash that banks must set aside as reserves for the second time in three months to spur lending as Europe's debt crisis and a cooling property market threaten economic growth.

Reserve requirements will fall by 50 basis points effective Feb. 24 the People's Bank of China said on its website this evening. Before today's move, the ratio for the nation's largest lenders stood at 21 percent.

Premier Wen Jiabao aims to steer the world's second-biggest economy through a property market slowdown and the weakest export growth since 2009, with the commerce ministry last week calling the trade outlook "grim." The International Monetary Fund said this month that China's expansion may be cut almost in half if Europe's debt crisis worsens.

"Growth remains the top concern for policy makers," Zhu Haibin, a Hong Kong-based economist for JPMorgan Chase & Co. (JPM), said before today's release. "Monetary policy will be biased toward easing this year."

Export Slide

China's exports and imports fell for the first time in two years last month and new lending was the lowest for a January in five years.

Before today's announcement, Ken Peng, a Beijing-based economist at BNP Paribas SA, said the government needs to be "careful not to overshoot monetary loosening, as it did in the financial crisis." Lingering effects of record lending in 2009 and 2010 include the risk for banks that local government financing vehicles will default, saddling lenders with bad loans.

The government also aims to avoid fueling consumer and property prices. Inflation unexpectedly rebounded to 4.5 percent in January, accelerating for the first time in six months, as a week-long Chinese New Year holiday boosted spending and prices.

China's Problems

Inflation
Bad loans
Property bubbles
Massive problems with SOEs State Owned Enterprise
Pollution
Unsustainable growth

Loosening lending standards is the very thing that fueled property bubbles, price inflation, bad loans, and gargantuan problems with SOEs. For more on the SOE problem, please see China Financial Markets: When Will China Emerge From the Global Crisis?

Looking for Miracles

Damn the consequences, central banks everywhere inevitably respond to slowdowns with two actions: print money and loosen lending standards. That holds true for the US, China, Europe, and Japan.

There are no miracle cures because printing money and loosening lending standards are why we are in this global fiscal mess in the first place.

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

Location: A Ranking Factor in Organic SERPs

Posted: 17 Feb 2012 03:07 AM PST

Posted by MichaelC

We're all familiar with: personalization, SPYW, and the mix of organic + local + shopping + news etc. we call "universal search". Today, we're going to talk about the results that APPEAR to be pure organic, ignoring AdWords, Google Places results, image, news, video, shopping, social influenced results, etc.

Now, looking just at these ordinary organic results, you might expect that if you're signed out, cookies blocked, pws=0, and a ski mask on, you'd get the same results for a given search as you see from any one of a number of rank-checking tools.

But you'd be wrong. Well...in some cases, you'd be wrong. If your location is set (auto-detected via your IP address, or set manually by you), in some cases Google is using your location as a ranking factor.

Mini glossary

Before we dive into some examples, allow me to fabricate some terminology so we're all talking about the same things:

pure organic - this is what I'm calling the regular organic, non-Google-Places results that do NOT appear to be location-influenced
local-ish: this is what I'm calling the regular organic, non-Google-Places results that DO appear to be location-influenced

Now let's look at some examples

For each, we're going to look at the results for our location set to three US cities: Portland, OR; Chicago, IL; Brooklyn, NY. To set our location, we'll use the "Change Location" option in Google's left menu:

Set location in Google search

First, we'll start with a search phrase that we'd expect to have a strong local bias in Google Places results.

Search term: "thai restaurant"

Let's start with Portland, OR:

SERPs for thai restaurant, with location set to Portland

As expected, there's a lot of Google Places results there. But look at result #1: Typhoon. It's got reasonable PA/DA, but not enough to rank nationwide (unlike oshathai.com and sawatdee.com, which rank on page 1 if you set your location to "USA"). It's a Portland restaurant--Google might know this because of its Google Places page; also, it's got Portland in 2 of the footer links. No hCard markup on the address itself anywhere on the site however.

The 2nd result happens to be near Portland, but really located in Beaverton, and is ranking simply because of a near-match domain, in my opinion (it ranks #2 if your location is set to "USA"). Just to be sure Google wasn't still using my IP address and geo-locating me in Portland when I specified my location as "USA", I had Dr. Pete confirm this from his cave in Chicago (thanks Pete!).

In Dr. Pete's honor, we'll look at Chicago next, for this same term:

SERPs for thai restaurant, with location set to Chicago

Now this is getting a little more interesting. Results 1, 3, and 4 are clearly not there because of a Google Places page, but rather, because on-page factors would make the page do pretty well if we'd actually typed in "Chicago thai restaurant", i.e. with the location name behaving like any other keyword. Result #2 is most likely there because of its Google Places page: it's an all-Flash site, with no mention of Chicago anywhere in the HTML; and, of course, Google's helpful "show map of..." link is a clue :-).

Just to be certain, I peered into the guts of a number of these all-Flash restaurant sites using FlashProbe to see if there was location-specific text in there....and for most of them, found nothing of significance.

Next up: Brooklyn.

SERPs for thai restaurant, with location set to Brooklyn, NY

Google Places results all up top, then the rest of the page is all local-ish results. The menupages.com result is clearly not Google-Places related but has "Brooklyn" all over the page, whereas most of the rest must be getting identified via Google Places as "Brooklyn" doesn't appear on their websites at all.

Next, let's look at a search for "auto parts", where you might imagine that what's going to be useful to the user is going to be a mix of the national parts websites and also local parts stores.

Search term: "auto parts"

First up: Portland.

SERPs for auto parts, with location set to Portland

As expected: dominated by about an even mix of Google Places and pure organic. But the last two are local-ish: the first could either be Google-Places influenced, but more likely it's a near exact match domain if you considered the city name to be one of the search terms. And a near exact match page title doesn't hurt either.

Back to Chicago now:

SERPs for auto parts, with location set to Chicago

Conclusions

For some search phrases, the results that we've come to think of as "pure organic" are heavily influenced by location, in addition to the Google Places results.
There are at least two factors that Google is using to rank local-ish results:
1. the name of the searcher's current location is found in traditional on-page areas (page title, body text, etc.), and
2. because the Google Places page indicates the location matches the searcher's location.
Clearly the mix of ranking factors for Google Places and local-ish organic results is quite different, as in general, we're seeing the local-ish organic results NOT match the top local results from Google Places.
Certain search terms generate a higher % of local-ish results than others, just like certain search terms generate a higher % of image, or news, or video, or shopping results, BUT the mix of non-local organic and local-ish organic results varies not just by search term, but also by location.
It seems that it's more about a page's overall score in the ranking algorithm getting bumped by either being local (via Google Places) or containing the user's location name in traditional on-page elements, rather than slots in the page 1 results being set aside for local-ish results for a given term.

So what do I do with this information?

Directory-type websites: you've got a shot at ranking your city-specific pages...even if the user doesn't type their city name in as part of the search.
Local businesses: tune your pages for your city name as well as doing your Google Places page properly (but do NOT put your location name in your Google Places category), as you've got a shot at 2 listings on page 1: a Google Places listing, and a local-ish listing.

I look forward to seeing ideas/theories in the comments that are different from, crazier than, and more accurate than mine. Thanks to David Mihm, Tom Critchlow, Tom Anthony, Wil Reynolds, Carson Ward, Kate Morris, and Pete Meyers for their thoughts and research.

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Weekly Address: Continuing to Strengthen American Manufacturing

Your Daily Snapshot for
Saturday, February 18, 2012

Weekly Address: Continuing to Strengthen American Manufacturing

President Obama describes a series of steps to strengthen American manufacturing and create jobs here in the United States.

Watch the weekly address:

President Barack Obama tapes the weekly address at the Boeing-Everett Production Facility in Everett, Washington, Feb. 17, 2012. (Official White House Photo by Lawrence Jackson)

Weekly Wrap Up

A quick look at what happened this week on WhiteHouse.gov:

National Medals of Arts and Humanities: Extraordinary Americans who have excelled in the arts and humanities throughout their careers—from philosophers to sculptors—joined the President and First Lady at the White House on Monday for an occasion they look forward to every year: awarding the National Medals of Arts and Humanities. The honorees’ contributions, the President noted, “[H]elp guide our growth as a people. The true power of the arts and the humanities is that you speak to everyone.”

Surprise!: As White House visitors stepped into the Blue Room on Thursday during a public tour, they were greeted by unexpected guests: the First Lady and the Obama family’s canine, Bo. Reactions ranged from shock and excitement to overwhelmed—watch the meet and greet here.

From One VP to Another: After accepting an invitation from Vice President Biden, Vice President Xi Jinping of the People’s Republic of China spent Tuesday morning at the White House to attend a series of meetings with Administration Officials including the President. His visit to Washington, D.C. also included a meeting at the Pentagon and a U.S.-China Business Roundtable at the U.S. Chamber of Commerce, among various other events.

Master Lock: The President headed from Washington, D.C. to Wisconsin on Wednesday to visit with Master Lock workers and talk about his plans to boost American manufacturing—something Master Lock is familiar with; the company has discovered that it can actually save money by keeping production facilities in the United States and bringing jobs back to America.

What $40 Means: In December of 2011, we asked Americans what $40 meant to them, and tens of thousands of Americans answered—$40 is a tank of gas, a co-pay for a doctor’s visit, a prescription medicine, a pizza night with their family. Their voice made a difference then and now—on Friday, lawmakers extended the payroll tax cut through the rest of 2012, in addition to extending critical unemployment benefits. You can watch this video to meet some of the tens of thousands of Americans who courageously shared what losing an extra $40 per paycheck would mean for them and their family.

787 Dreamliner: On Friday, the President visited the Boeing assembly facility in Everett, Washington to announce new steps to help promote American manufacturing and increase U.S. exports, following his outlining of a Blueprint for an Economy Built to Last. At that very facility, the 787 Dreamliner, the world’s most advanced commercial airplane, is assembled—nearly 8,000 people are directly employed in building it.

2013 Budget: On Monday, President Obama announced his budget for the 2013 fiscal year in Annandale, Virginia. This year’s budget reflects the President’s firm belief that our country has always done best when everyone gets a fair shot, everyone does their fair share and everyone plays by the same set of rules. The budget continues our commitment to keeping that promise alive by creating an economy that’s built to last—with good jobs that pay well and security for the middle class. To read the complete budget, you can download the PDF here, or get an on-the-go copy for your Nook.

West Wing Week: Your guide to everything at 1600 Pennsylvania Avenue. Check out the video.

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Link Building – a Helpful Guide to Prospecting and Analysis

Link Building – a Helpful Guide to Prospecting and Analysis

Posted: 17 Feb 2012 05:54 AM PST

Creative Link Building, Link Prospecting or even Link Scouting – call it what you will, the premise is the same: you are looking for opportunities to build links.

Over the years there have been many different ways that people have been doing this; one of my personal favourites is using Majestic SEO and Open Site Explorer. However useful this is, I still find it time consuming and painful, until thankfully along came Linkdex which came and helped ease the pain.

However helpful these tools have been in aiding my link building efforts, it is important as part of any SEO link strategy to think outside the box and establish links where your competitors are not present.

Like many others I am sure, I find quality link prospecting to be a slow process, and knowing where to begin is the hardest and most frustrating. Hopefully, though, after reading this you’ll be able to analyse quicker and build better quality links.

What You Will Need Beforehand…

Before finding these links, you will need the following extensions installed to your Google Chrome Browser:

SEOmoz
Scraper

Step 1 | Change Your Google Search Settings

The first step is to change your Google Search settings, you will want to show 100 results per page rather than the standard results of 10. This can be changed in the search settings as shown below:

Step 2 | Knowing Your Operator Queries

I discussed in a previous blog post of mine last month how to understand Google operator queries, and how they can help you better in the art of SEO. The truth is that knowing these queries will help to aid you quicker in filtering and analysing useful link prospects.

Let's take an example. With it being the start of London Fashion Week today, let’s say I was on the lookout for guest blogging opportunities to share the world of how great Holly Fulton’s and Dion Lees’ Show Spaces were. I would be thinking about different search query strings that would accept guest blogging opportunities, such as:

“write for us” OR “guest post” “fashion”
inurl:blog "write for me" OR "Guest Writer" "fashion"

Step 3 | Start Looking for Links

Once you have the extensions, configured your Google search settings and have narrowed down your search results with better defined operator queries, you can start link prospecting.

After displaying your search results, highlight the title tag from the listing and scrape the results using Scraper as shown below:

Once you have scraped the results, you should export them into a Google Docs file for analysis and research. What you have now is a highly relevant set of sites to look at when building links.

Step 4 | Analysis and Research

The next step is for you to analyse and take note of the root domains using SEOmoz toolbar. Once you have, I would recommend filtering them to make the largest at the top and start prospecting.