Central Perk

vineri, 30 noiembrie 2012

We have to keep it up


	Hello -- When President Obama asked you to tell us what the middle-class tax cuts meant for your families, we knew you'd speak up. But I don't think any of us were prepared for this. The stories started pouring in immediately. Within a couple hours, we received messages from tens of thousands of people. Folks from every state in the country took time to write in. You nearly took over Twitter, where the hashtag #My2K trended all day. And people are starting to pay attention. News outlets are writing stories about how everyday Americans are engaged in this debate. Decision makers are coming to the sudden realization that they can't ignore the perspective of the middle class when it comes to cutting taxes. You're changing an entire policy conversation. And we have to keep it up. Tell us what $2,000 means to middle-class families. There's no denying the power of your voices. We heard from a woman in Alabama who explained that $2,000 was a crucial part of her family budget -- the choice between two house payments, three car payments, or medical prescriptions for a year. We heard from a farmer in Michigan, just starting his business, who wants to use $2,000 to invest in two greenhouses so he can extend his growing season. We heard from a dad in Indiana who did the math and realized that $2,000 will buy groceries for his family for 23.5 weeks. We heard from graduate students working to pay down student loans and parents trying to help put their kids through school. And these folks are not alone. Unless Congress acts, 114 million middle-class American families are staring down a tax increase starting January 1. So we need you to join them. We're doing everything to draw attention to the stories you share with us. We're sharing them on Facebook and Twitter. We're putting them on the front page of the White House website. Will you speak out today? http://www.whitehouse.gov/my2k Thanks, David David Plouffe Senior Advisor White House

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What's Really Included in An SEO's Job - Whiteboard Friday

Posted: 29 Nov 2012 04:51 PM PST

Posted by randfish

The world as we know it is getting bigger. On top of that, Google is continuously changing, changing, changing...

With all of these changes, what's really to be expected from an SEO? What should you consider part of your day-to-day job? In this week's Whiteboard Friday, Rand digs into the ever-changing duties of an SEO in today's fast-paced, volatile world. Enjoy!

Video Transcription

"Howdy SEOmoz fans, and welcome to this edition of Whiteboard Friday. This week, as you can see, I am doing Movember. Hence, I've got my sideburns separated from my chops and no chin on my beard and all these kinds of things. I took the technical rules of Movember and tried to play them out. Hopefully, I think our team is going to raise something like $5,000 here at Moz for Movember, so I'm excited about that. Justin Vanning has been leading the effort from our marketing team. It's very cool stuff.

This week I want to talk a little bit actually about the job of an SEO. This is an interesting one, because what's going on is I see in the field this conflict, conflict between practitioners of SEO and people who are outside of the industry and inside of it discussing: Well, where should the SEO's job end? Which tasks should not be part of SEO? Which tasks should be part of SEO. What do we really have the ability to influence? hat should we be hands-off of? When does SEO lose its meaning if it gets too involved with other tasks in the business? Those kinds of things.

I want to provide my personal perspective. This is not the kind of Whiteboard Friday where I'm saying this is how things are, and this is the truth and you should only listen to me. Of course, no Whiteboard Friday should ever be like that. These are all just my opinions, but this one is special. This is my personal opinion on what the job of an SEO really should be about.

I actually want to step back. I don't want to create a big list. What I want to do is provide a framework, because I think that anyone's job, no matter what your position, is about being effective at accomplishing your goals. I don't care whether being effective at accomplishing your goals means that you are touching on principles and ideas and jobs outside of a classic job description. I think the whole idea behind what makes companies effective, what makes people effective is when they remove those boundaries, those artificial boundaries that hold us back and do what they're supposed to do to get the job done.

So I want you to start by asking: What are the marketing goals? Let me give you a couple examples.

Let's say that you are trying to market a recipe site and a specialty food site on the Web. Your marketing goals are: We want to bring in people who are interested in food. We want to build up our brand through our content, through our recipes. We want to establish a reputation. We'd also like to get direct customers who are going to be buying our specialty food product. We want to get chefs interested and influencers interested. We want to get the press interested. So our marketing goals are fairly broad.

You might also be working on the type of campaign that's much, much more narrow. For example, you might be hired as an SEO or you might be part of an SEO on an in-house team who's job is, essentially, well there's not a lot of search demand for the product we make. One of my favorite Christmas presents, Hanukkah presents this year is going to be the Sphero, which is by another foundry company. It's an adorable little ball that you can put on the floor and then you can control it. I have an app on my phone where I can control the Sphero and steer it around and play all these little games with it. It's super cool. It's a mechanized ball. You can watch a video of President Obama actually playing with one in Colorado when he visited.

Super cool, but nobody searches for "little electronic ball that I control with my phone." This just does not get search volume, despite maybe Sphero wishing that it did. But there might be lots of other interesting things that they could rank for. Really, their goal is not this broad expansion and this content strategy. It's just about getting people to the site who might potentially buy. They might be trying to rank for things like gifts for geeks and these types of things. They're obviously trying to control their brand and reputation and build up some press around themselves. Their SEO efforts are going to be much, much more narrowly focused, which is fine.

You should know the goals of your marketing campaign first. Then ask: How can search traffic and rankings help achieve them? How can the stuff from here, the things that happen inside of Google and Bing search results, inside of search results on other platforms, maybe you are doing SEO on Kayak or on the App Store or in Craigslist, wherever you are doing sort of search engine optimization, you want to figure out how do the search rankings actually affect and achieve the marketing goals, rather than just trying to get traffic. Everybody's trying to get traffic. We want to rank for things. Why?

Good. Now we know how search affects that. Then, we're going to figure out what inputs affect the success of your SEO, that particular campaign's SEO?
In the example of Sphero, it might be a, "Well, hey, we're trying to get more press, so we need more reporters and journalists to be coming to the site. Therefore, we need to make sure that anyone who types in any spelling of Sphero, misspelling of Sphero, anyone who searches for anything around us, or they think they're looking for us, anyone who's searching for geek gifts, or is searching for new electronics, that we're getting coverage in places like Engadget or a Techmeme or a TechCrunch, or those kinds of things, that we're reaching these influencers. Therefore, it's a little less about the direct search engine rankings for related stuff.

For the food folks, for the specialty food store, the metrics are a lot of the classic ones that we think about. It's rankings for recipe searches. It's rankings for food searches. It's rankings for the names of the particular products, all that kind of stuff, the generic search names as well as the brand stuff. From this, we can then derive the list of what should be included in the SEO's job.

The SEO's job, in my opinion, should have no boundaries other than what are the things that positively influence this cycle. What are the things that will help you achieve your goals? I don't care if someone says, "Well, UI/UX, that is completely outside the realm of SEO. Usability, that's outside the realm. Web page speed, page load speed, that stuff is in the department of software engineering and of web development. That's not an SEO's job."

Screw that. No, it is the SEO's job. If it positively impacts this process, it is now part of our jobs. Whether you get to have direct impact on that or whether it's indirect impact and you have to work with other people across teams, which is why companies exist, so that people can work across teams, then those should be the things on your list. If UI/UX is holding back the achievement of the marketing goals and the search rankings that can help get you there, then you need to work on that. Same story with speed. Same story with accessibility or responsive design, with content strategy, with branding, with press and PR, public relations. Maybe you are just doing classic SEO, the keywords and links and URLs, and these types of things and hundreds of other things.

It can include whatever it needs to include. I want to urge folks, because I feel so strongly about this, that the job of an SEO cannot be limited to what external people have put on the idea of what we think SEO is. What our job is, is to positively impact the items that are going to influence our goals. If we have to do things that are outside of the classic SEO job description to achieve a goal, we do it. That's what makes a great SEO, in my opinion. That's what makes a great professional in any field, someone who accomplishes the goals, not someone who checks off a task list.

All right. I hope you've enjoyed this edition of Whiteboard Friday. We will see you again next week. Take care."

Video transcription by Speechpad.com

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Link Building 101 - The Almost Complete Link Guide (Updated for Post-Penguin)

Posted: 29 Nov 2012 05:43 AM PST

Posted by scott.mclay

This post was originally in YouMoz, and was promoted to the main blog because it provides great value and interest to our community. The author's views are entirely his or her own and may not reflect the views of SEOmoz, Inc.

Quite a few things have changed in my approach to link building since my first link building guide back in 2010. For starters, there was a mass of link based algorithm updates, there was Penguin, and to top this all off I’ve changed jobs as well (you can find me amongst the masses here these days). One thing that hasn’t changed is my view that 80% of positive (and negative) SEO ranking factors still come from external sources – I’m not just talking about links here, but social and citations, also.

Once again, most of the information I’m giving away here will most likely be available from a large number of other sources including SEOmoz, so I will try to attribute these where I can.

Creating your Link Building Strategy

Creating a solid strategy should be the starting point for any link building campaign, not having one in the current climate would be like running into a minefield wearing a blindfold – It limits your success of survival! Before you set out on any strategy you need to ask yourself questions like the following:

What does the current profile look like? (if existing website)
- Do I need to remove links before I start?
- Do I need to gain authority or noise?
- Do I actually need more links or would I benefit from other factors?

How will I generate the links?
- Should I run creative projects such as Infographics?
- Should I do blogger outreach / guest posts?
- Should I suggest webmasters replace broken links with my client?
- How will I reach out to webmasters?
  - Social networks?
  - Networking events?
  - Telephone?
  - Email?
What type of anchor text should I work with?
- Is there enough covering fire from brand and phrase anchor text?
- What would Google’s web spam team look for during manual reviews?
- What type of anchor text would look most natural for the sites you want to target?

Is there enough supporting pages for the landing page or should more be created?

Every website is different so no two people will have the same answers to these types of questions but hopefully it will give you a good starting point – just remember to document and track everything.

Link Placement

Since my last post a few changes have been made to how Google views link placement, back in 2010 I hinted that footer links still had some sort of value, since Panda and Penguin link placement in the footers and even sidebars could cause more damage than good and could leave you with either Keywords being filtered or even penalised in the SERPs.

These days the safest form of link building is gaining links from within content, even better if you can get these within the first paragraph – but remember to keep it looking natural.

Nofollow and Dofollow Links

Two years ago I was going on about how every website should have a good mix of Nofollow links and while this is still true I have been asked countless times what ratios I use when working on a link campaign.

The truth is there is no hard figure I can give you, although what you can do is research the average nofollow vs. dofollow ratios for the top ranking websites in your niche, just ignore spam websites while doing this as these will inflate the end number.

Branded Links

I still believe that Google have their own authority and trust metrics which attribute to Google’s internal PageRank algorithm (not talking about TBPR here but true PageRank) or if not this then some subroutine which feeds back into the ranking algorithm. With this in mind it is very important that you gain Brand links to not only your homepage but to landing pages across your entire website.

Keyword-Focused Anchor Text

Over the years every SEO has built his/her fair share of anchor text rich links, sadly this isn’t a feasible strategy since Google introduced automated keyword filters and even more so since Penguin came along. Anchor text profiles are something which is even reviewed manually by the spam team – this was confirmed by Andre Weyher, an ex-member of the Search Quality team at Google.

If you haven’t read the interview with Andre then do so now you can find it here.

Landing Page Distribution

At the strategy creation stage ensure you set clear volume levels for each landing page being targeted to ensure that a particular section of the website does not become over-weighted as this could be a hard issue to fix.

If you’re worried about volume of links going into pages the best option is to create additional supporting pages for each area and use these to spread out the load.

Content Quality and Relevancy

With Google’s unnatural link detection getting better and better and Panda penalising low quality content, I can’t stress how important it is to not only put effort into content generation but checking the quality of existing content on a website before even thinking about publishing an article. The last thing you want is to find the website you have just spent an hour or so writing a post for has been penalised and that post has no value to either users or search engines.

Try to keep the end user in mind when writing content. You not only want links to increase rankings, but to send traffic as well to provide a subtle call to action either within the anchor text or before the link without being too sales-focused. Also, keep the content not only on topic for your client's site but on topic to the website your publishing to.

Sourcing Links

In the current climate there should be less focus on sourcing links and more on generating them. This is a topic which Rand has been going on about for a long time now (he has been ahead of the curve) but at the same time it takes time to get to the stage where you are generating enough links to make a difference to your client's campaign. In the short term clients still want results so there will still be a need for sourcing links the old-school way.

Getting to grips with finding relevant websites and webmaster outreach can take a bit of work; here are some of the tools I use for the job:

Open Site Explorer (Free / SEOmoz Pro Members)
- OSE
- How to Use OSE
Majestic SEO (Paid from £29.99 ex VAT)
- Majestic SEO
- Using Majestic SEO for Competitor Analysis
Advanced Search Operators in Google (Free)
- How Search Operators Work
NP Checker – (Free Software Download)
- NP Checker Download
- Overview of NP Checker
Mozilla Thunderbird (Free)
- Thunderbird Download
- How to Mass Email with Thunderbird

Competitor Backlink Mining

When initially starting out with sourcing links it is worth reviewing what links your competitors have. While this will not help you overtake them, it will help you close the gap or add that extra dimension to your link profile. Just be wary when doing this not to go after their lower quality links but stick to the highest quality to ensure you don’t get yourself in hot water with the Google gods.

Advanced Search Operators

The best way to get ahead of your competitors in terms of manual link building is still to come up with creative link advanced search operator queries and scour the depths of the web. When coming up with these queries I do research on my topic using websites like Wikipedia to gain knowledge on related topics.

After two years my recommended query is still the same and has helped me gain some valuable links that I wouldn’t have found otherwise:

[search term] -site:Wikipedia.org -site:blogspot.com -site:telegraph.co.uk -site:wordpress.com -site:about.com -site:guardian.co.uk -"directory" -"add link" -"advertising"

This string does not work for every single niche and you may have to experiment with filtering out additional domains from your search (those that show up often).

Directories

This form of link building sadly is no longer as effective as it once was, so I don’t recommend you spend too much time on this. But, it is still worth investing some time into submitting websites into well-known/authority directories like BOTW and established, smaller niche directories as these can add a small boost to any link campaign.

Blog and Forum Commenting

All I can say here is don’t do it, no matter how hard you try it will still end up looking like spam, instead use this a way of engaging with the community to gain other link opportunities.

Creative Link Building

Looking into the future, the only viable way to safely get more links pointing to your website will be via content marketing. I myself have been a slow adopter of this way of thinking and missed the whole infographic and widgets craze that have been called out by Google as being 'unnatural'.

As off-site SEO moves ever closer to being like offline marketing we need to be thinking as marketers and do the following to generate links:

Create ‘good news’ stories
Create external resources
Create interactive properties (like Conflict of Pintrest)
Create content that reaches out to your target demographic
Sit down face to face with bloggers and find out what they really want

But above all you need to ensure all projects are in line with the client's Brand or they might go somewhere else.

Guest Blogging Communities

Guest blogging communities are full of bloggers looking for free content; these can be used not just for link building campaigns but for promoting more creative projects as well. When using these types of services just ensure you keep a firm eye on the quality of the blogs being offered as although there are quite a few gems, spam websites heavily outweigh these.

Some of the services I have used previously include:

Link Removal

With all this talk of penguins and negative SEO over the last year, chances are that a majority of SEOs have had to undertake backlink health checks to see if their clients are at risk. The unlucky ones within the industry may have had to actually remove links. Link removal itself is not a hard task but it does take quite a bit of time, in particular finding contact details.

If you want to save yourself a bit of time I would recommend using Link Research Tools as it does a pretty good job of analysing your profile and even provides some email address data but if you require more detailed analysis you will require the following:

Majestic SEO
NP Checker
Mozilla Thunderbird
MS Excel skills
Loads of time

If you are going to do manual analysis an your profile I am currently working on an Excel document to do most of the work for me – I will be tweeting a link to it when it’s finished so follow me on twitter if you’re interested.

Email Outreach

Initial Outreach remains one of the hardest tasks within the link building process. Why? Because you generally only get one chance to get it right. Of course you could just re-email everyone who didn’t reply but this tactic could soon see you in hot water unless you use multiple fronts.

To get higher response rates with outreach you need to ensure you are doing the following:

Personalisation
Interact with them i.e. asking about their day/week
Keep your request brief
Use a female persona
Email on a Friday

Don’t forget that you can also do personalised bulk emails to save you time.

Alternative Outreach

If you’re looking for quality over quantity then sending out email templates isn’t going to cut it, you need to get yourself noticed in other ways to get the links that really matter. One of the easiest ways to get yourself on the radar of a high profile publisher / webmaster is to interact with them over Twitter.

Follow them for a while and look at the types of mentions they reply to before making your move. It may take a few tries to get this spot on but once you get the hang of it you should be able to strike up conversations at will and then potentially move the subject on what you can do to help them and vice versa.

Something else you can use Twitter conversations for is to arrange to meet your target for drinks at a conference, usually if you manage to bag one high profile publisher within a niche other publishers will come and join in the conversation free of will – a great way to get yourself known and build lasting relationships.

Tracking Progress

Since link building has become a more dangerous task you should be tracking each link built along with metrics, anchor text and the landing page the link points to. This data can be used to track progress, check metrics over time (checking back looking for sites gaining penalties) or looking out for overweighting specific parts of your client’s website.

At the end of the day the more data we track the better chance we have of spotting potential issues and getting them fixed quickly, most likely saving your client from future ranking issues. You can find a basic example of one I use currently over here.

What Does the Future Hold?

Looking at the direction Google has been taken over the last year, it has become very clear that they have started cracking down on a large number of unnatural linking activities -- but as I mentioned that does not mean we need to step away from traditional link building.

At the end of the day if you use traditional techniques to find your targets then get out of the office and build relationships with your niche, you have a better chance of getting not only links that will impact your search rankings but start to build a connection between the publishers and the brand -- which in turn will look natural to both algorithms and the human eye, especially if you use news stories and trends as a basis for your external content.

I hope you have enjoyed my updated link building 101. You can read more of my stuff either on my personal blog, Equators blog or just watch my personal twitter account. I look forward to reading your comments.

#My2k, Tweet it!

Your Daily Snapshot for
Friday, November 30, 2012

#My2k, Tweet it!

This week, the National Christmas Tree arrived at the White House and holiday decorating got underway. Meanwhile, the President marked Small Business Saturday, and met with leaders of businesses large and small to discuss the importance of avoiding a middle-class tax hike next year -- and he asked Americans across the country to share what losing $2,200 would mean to them by using the Twitter hashtag #My2k.

Watch this week's edition of West Wing Week, "#My2k, Tweet it!"

Check out this week's edition of West Wing Week

Seth's Blog : Non-profits have a charter to be innovators

Non-profits have a charter to be innovators

The biggest, best-funded non profits have an obligation to be leaders in innovation, but sometimes they hesitate.

One reason: "We're doing important work. Our funders count on us to be reasonable and cautious and proven, because the work we're doing is too important to risk failure."

One alternative: "We're doing important work. Our funders count on us to be daring and bold and brave, because the work we're doing is too important to play it safe."

The thing about most cause/welfare non-profits is that they haven't figured out how to solve the problem they're working on (yet). Yes, they are often offer effective aid, or a palliative. But no, too many don't have a method for getting at the root cause of the problem and creating permanent change. That's because it's hard (incredibly hard) to solve these problems.

The magic of their status is that no one is expecting a check back, or a quarterly dividend. They're expecting a new, insightful method that will solve the problem once and for all.

Go fail. And then fail again. Non-profit failure is too rare, which means that non-profit innovation is too rare as well. Innovators understand that their job is to fail, repeatedly, until they don't.

• Email to a friend •

joi, 29 noiembrie 2012

Mish's Global Economic Trend Analysis

New Meaning of the Word Voluntary; Bond Buyback Balancing Act
ECRI Sticks With Recession Call
French Unemployment Highest in 14 Years (And It's Going to Get Much Worse)

New Meaning of the Word Voluntary; Bond Buyback Balancing Act

Posted: 29 Nov 2012 02:16 PM PST

It is a deep stretch of the imagination to twist arms and appeal to "patriotic duty" in an effort to coerce someone to do something they really do not want to, then call the action "voluntary".

It is yet another thing to claim something is voluntary yet tell them it is "required". The latter has happened (again), when it comes to Greek debt.

The Financial Times reports Athens banks told of debt buyback 'duty'

Yiannis Stournaras made clear the country's four largest banks, which together hold about €17bn of government bonds, would be required to sell their entire holdings even though the buyback is billed as "voluntary".

It was the "patriotic duty" of Greek bankers to ensure the success of the buyback, due to be launched next week by the country's debt management agency with up to €14bn of additional European funding, Mr Stournaras said on Wednesday.

Yet Athens bankers appeared reluctant to be forced into a sale that would weaken their balance sheets and discourage local investors from participating in rights issues expected early next year as part of a €24bn recapitalisation of the sector.

"The banks stand to lose some €4bn by having to sell their bonds at around 33 cents on the euro," said one Athens banker.

About half the €62bn of bonds issued in a partial restructuring of Greek debt last February are held Greek banks, pension funds, state entities and individual investors.

The debt management agency is set to announce details next week of the buyback scheme, which would be completed by December 12, the day before eurozone finance ministers are due to give the green light for disbursing the Greek aid payment.

"Voluntarily Forced"

Whereas Greek banks may be "voluntarily forced" (as if such a ludicrous idea even exists) into steep losses, anyone else holding such debt sure will not be.

Once again this whole notion of "voluntary" rests on arbitrary decisions as to what will trigger credit default swaps.

In that regard, please recall that in October 2011, the labeling of labeling 50% haircuts on Greek debt as "voluntary" proved many "Standard" Credit Default Swaps on Greece Are a Sham.

Thus, nothing really "new" is happening here. "Voluntary" means whatever the biggest players want it to mean (always to their advantage of course).

Bond Buyback Balancing Act

Bloomberg discusses this setup in Greek Bond Buyback Hostage to Below-Market Prices.

Greek efforts to ease indebtedness by repurchasing its own bonds at less than their face value depend on investors accepting below-market prices rather than holding out for an improved offer.

Balancing Act

The new bonds have collective action clauses, which in a second restructuring would allow a preset majority -- typically at least 66 percent -- to force holdouts to take part, according to Gabriel Sterne, an economist at Exotix Ltd. in London. Still, enforcing the CACs risks triggering credit-default swaps and being put into default by the ratings firms to deal with a rump of bondholders, he said.

"Would it be worth the fight with the hedge funds?" he said. "I just don't think they would want to go there yet again."

"If the buyback price is forced up too high, it will be unpalatable to Greece and the European authorities, and the buyback will fail," Sterne said. "The incentive not to participate is likely to be strong. The average value of the bonds for those that do not participate could rise sharply if there is very high participation."

Sterne, a former IMF official, estimates that the strip might go as high as 50 cents on the euro assuming there is broad participation, compared with 24 cents if the buyback fails.

Bondholders probably will call the finance ministers' bluff, said Peter Tchir, the founder of New York-based TF Market Advisors.

"Now that the Eurogroup has made a condition out of the bond repurchase, it is almost the obligation of the bondholders to hold their feet to the fire," he said. "I can't see bondholders accepting last week's prices without trying for more."

CACs and the Balancing Act

Got that? No one wants to trigger Collective-Action-Clauses thereby "forcing participation" because it would trigger CDS contracts. Yet participation must be high enough so the Troika can pretend the results help Greece.

Given the incentive to not participate in the offer is huge, Greek banks were told their participation in the voluntary offer was required.

Thus, we see these preposterous games yet again as to what is "voluntary" and what isn't. Moreover, forcing Greek banks to take more losses means they will again need to raise capital (a perpetual state of affairs for Greek banks).

Of course any sensible person realizes none of this will actually help Greece. Instead, it will enable huge pretending games go on a bit longer, perhaps long enough to get German Chancellor Merkel reelected, which seems to be the real issue in play, not the well-being of Greece.

Side Note on Comment System

Many people have been unable to login and leave comments. I believe the problem has been rectified.

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

ECRI Sticks With Recession Call

Posted: 29 Nov 2012 10:58 AM PST

The ECRI is sticking with its "US is already in recession" call based on four coincident indicators. Very few agree, but for what it's worth (perhaps nothing) I am one of those in agreement.

Here is a Bloomberg video to consider.

Also consider The Tell-Tale Chart by the ECRI.

Following our September 2011 recession call, we clarified its likely timing in December 2011. Based on the historical lead times of ECRI's leading indexes, we concluded that, if it didn't start in the first quarter of 2012, it was very likely to begin by mid-year.

But we also made it clear at the time that you wouldn't know whether or not we were wrong until the end of 2012. And so it's interesting to note the rush to judgment by a number of analysts, already asserting that we were wrong.

So, with about a month to go before year-end, what do the hard data tell us about where we are in the business cycle? Reviewing the indicators used to officially decide U.S. recession dates, it looks like the recession began around July 2012. This is because, in retrospect, three of those four coincident indicators – the broad measures of production, income, employment and sales – saw their high points in July (vertical red line in chart), with only employment still rising.

If you look at the size of the simultaneous declines in industrial production and personal income since July, that combination has never occurred outside a recessionary context in over half a century – but it's occurred in every recession. This leads us to conclude that we are most likely already in a recession that began around mid-2012.

Now, please remember that, following our recession call, central banks really ramped up their efforts, and have literally been pumping more money into the economy than at any time in the history of humanity – and this is the upshot. No wonder the Fed is now all in.

So how come hardly anybody recognizes the recession? Perhaps it's because of real-time data showing positive growth in GDP and jobs, and the lack of a recent salient shock.

Revisionist History

Some of that is revisionist history, notably the idea that in September 2011, the ECRI gave itself until December of 2012 to be proven correct. Rather, the ECRI kept changing dates waiting for data to match its call.

I have no problems with errors. I do have problems with revisionist history.

ECRI revisionist history wipes away an error in the other direction in 2007, claiming to predict a recession it clearly did not predict.

I presented an analysis at the time of the ECRI's September 2011 recession call in ECRI Calls Recession Based on "Contagion in Forward Indicators"; Just How Timely is the Call?

The revisionist history in regards to "no misses" is plain to see. The ECRI totally blew the call in 2007 and early 2008. That is not the galling part. Calls are easy to miss. The galling part is the ECRI's revisionist history related to the blown call.

The ECRI's integrity will remain in question as long as it continues to perpetuate the myth of a perfect record. The simple fact of the matter is no one has a perfect track record at calling recessions, interest rates, the stock market or anything else.

Flashback November 2007 ECRI Vol. XII, No. 11: Weakness In Leading Indicators Not Yet Recessionary

Please consider the following image snip. Highlighting is mine.

One month later the US was in recession, and in galling revisionist history the ECRI later referred to that highlight in yellow as "predicting" a recession, even though on Friday, January 25, 2008
ECRI Says There Is A Window of Opportunity for the US Economy

The U.S. economy is now in a clear window of vulnerability, given the plunge in ECRI's Weekly Leading Index (WLI) since last spring. Yet there is a brief window of opportunity within that window of vulnerability to avert a recession. That is why ECRI has not yet forecast a recession. ....

This is why, having correctly predicted the last two recessions in real time without crying wolf in between, we are not forecasting one yet.

Achuthan Winging It or Sticking to His Model?

Clearly the ECRI failed to predict the 2007 recession on time. I am now wondering "Did the 2007 miss influence an ECRI to jump the gun in the opposite direction this time?"

That line of questioning has me further wondering if Achuthan has been winging it based on coincident indicators and his personal opinion of what is likely, instead of simply following his own model (with a track record of claims based on leading indicators, not coincident ones).

Regardless, the ECRI claim to have never missed a recession is inaccurate twice (2007 and 2011) even if the ECRI has the call correct now.

Revisionist history aside, I do believe Lakshman Achuthan has the call correct. Today's GDP revision higher does little to change that belief. Contrary to popular belief, recessions frequently start with positive GDP typically revised lower much later.

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

French Unemployment Highest in 14 Years (And It's Going to Get Much Worse)

Posted: 29 Nov 2012 02:08 AM PST

According to Google translation from Le Monde, October marks the 18th consecutive month of rising unemployment. A second article from Le Monde discusses the Rise in Unemployment for October.

Unemployment has risen sharply again in October. According to statistics released Wednesday, November 27 by employment center and the Ministry of Labour, the number of applicants for employment who had no activity during the month (Class A) increased by 46,500 people, including DOM. In September, he had jumped nearly 47 000 people. Worse, counting the unemployed reduced activity (category B and C), the increase reached 73,600 people!

Such explosion had not been seen since March 2009. With 4,870,800 people registered at employment center, the number of job seekers Class A, B and C reached a level never seen before, as far back as statistics. For those in category A, the level was not as high for fourteen years, in May 1998. Since the accession of François Hollande at the Elysee Palace, very bad numbers keep on coming: nearly 230,000 people have registered at employment center and since May.

In detail, it is over 50 years old who suffer most from the increase in October, with nearly 2% increase in a month for this category. Rising long-term unemployment is still very high, with nearly 11.5% of registered job seekers concerned about one year.

French Unemployment vs. US Unemployment

Those outside France need a bit of perspective on various classes of unemployment cited above. This is my understanding, pieced together from two different sources.

Class A: Jobless people that have had no activity at all during the past month.
Class B: Jobless people having worked less than 78 hours during the past month ("short reduced activity")
Class C: Jobless people having worked more than 78 hours during the past month ("long reduced activity").
Class D: Looking for a job, but currently sick, or in internship, or in state-sponsored "professional development" courses, etc
Class E: Those in state-sponsored low-pay "community service" jobs

The official unemployment rate only comes out quarterly.

Reader Andrea offers these comments ...

For the sake of clarity, the official unemployement rate is given by the National Institut of Statistics (INSEE) each three months, not the ministry of labor class A-E activity. The distinction is similar to the weekly unemployment stats in the US vs. the official monthly unemployment and jobs report.

Moreover, and also similar to the US, many jobless people are not counted as unemployed because they have not been actively searching for a job.

Hollande Threatens to Nationalize Steel Plants Over Layoffs

Economic insanity in France continues at a steady pace. The latest bit of insanity is Hollande's Threat to Nationalize Steel-Maker Mittal.

French President Francois Hollande has met the owner of steel giant Arcelor Mittal, after saying he would discuss nationalising one of its plants.

Arcelor Mittal - which employs some 20,000 people across France - announced in October that it intended to shut down the Florange plant's already inactive furnaces, saying they were uncompetitive in such difficult trading times.

The company gave the government 60 days in which to find a buyer for the furnaces, a deadline which expires on Saturday.

The move provoked an angry reaction from the French government, which accused Arcelor Mittal of breaking a 2006 commitment to keep the blast furnaces running - a claim denied by the steel giant - and criticised the firm for refusing to sell off the site as a whole.

France's minister for industrial recovery, Arnaud Montebourg, accused the steelmaker on Monday of "lying" and "disrespecting" the country. He has since retracted a remark that Arcelor Mittal was no longer welcome in France.

Economic Ignorance Wins the Day

Pater Tenebrarun blasted the nationalization threat in his post Economic Ignorance Wins the Day Again in France.

France's minister of industrial insanity, Arnaud Montebourg (sometimes referred to as 'Mountebank' in these pages, for obvious reasons) once again proves that the leopard cannot change its spots. After wrangling incessantly with Arcelor-Mittal over its decision to close two long idled and evidently loss-making steel furnaces, he has now decided to openly declare war against the company.

Here is a brief summary of the economic facts of life for the hyperactive minister:

There is vast overcapacity for steel in the world. In China alone, some 200 million tons of production capacity appear to be the fruit of malinvested capital due to China's real estate and infrastructure bubble that has resulted from an unhealthy credit boom. This means that in China alone 200 million tons of production are likely loss making at present and will eventually have to be idled and/or liquidated.

It makes no sense to keep loss-making capacity going in Europe as well. That will only further misdirect scarce resources that are more urgently required elsewhere.

The very last thing the market economy needs in order to function smoothly is a 'minister of industrial renewal' (Montebourg's official job description), or any other type of 'economy minister'. The very best thing such ministers could do to help the economy would be to resign immediately.

Property Rights Thrown Under the Bus

Montebourg makes it sound as though Arcelor-Mittal, a private company, were deputized to the French government to help it fulfill whatever political aims it pursues – as though the government could simply draft private companies to aid it in attaining its socialist goals.

This case is going to have repercussions that go far beyond the fate of the loss-making furnaces and Mittal's continued presence in France. By threatening the company with nationalization if it doesn't comply with the government's wishes, Montebourg is signaling that his government has absolutely no respect for property rights.

If Mittal closes the two furnaces (which as noted above have been idled for many months already), then the people employed there will lose their jobs which is of course unfortunate. However, this is a typical case of the road to hell being paved with good intentions: by threatening the expropriation of Mittal, Montebourg ultimately risks far more jobs than merely those at the two furnaces.

There is a lesson that Mr. Montebourg has yet to absorb: No government can dispense with the laws of economics by decree. It might as well attempt to order the sun not to shine or issue an edict that gravity be abolished.

Expect Unemployment to Soar

Those looking for reasons French unemployment is going to soar, need only read Pater Tenebrarum's sterling rebuttal of France's plans to nationalize Mittal to save steel jobs when the world is awash in cheap steel.

What company wants to hire workers when they will be unable to fire them later if need be?

I talked about this many times before, but in case you missed it, please consider my June 8th article Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"

Industry Minister Arnaud Montebourg is also planning legislation that would force companies to sell plants they want to get rid of at market prices to avoid closures and job losses.

Four Things, All of Them Bad

Mass layoffs will occur before the law passes.

Companies will move any jobs they can overseas.

Ongoing, if it's difficult to fire people, companies will not hire them in the first place.

Corporate profits will collapse along with the stock market should the need to fire people arise.

The proposal to force companies to sell plants rather than fire workers as outlined by Industry Minister Arnaud Montebourg and Labour Minister Michel Sapin is nothing short of economic insanity.

Europe Going Downhill Fast

Many people doubted Hollande would be foolish enough to carry out his job threats. They were wrong. In addition, Hollande massively hiked various taxes and also seeks a financial transaction tax.

Such actions prompted my June 16 report, "France Has At Most Three Months Before Markets Make Their Mark" .

No one should at all be surprised to learn in early November that France suffered the sharpest fall in service sector business activity for a year. For details, please see Dreadful Economic Data in Germany, Italy, Spain, France.

Things are going downhill fast in all of Europe and the bottom is nowhere near in sight.

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

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