joi, 14 februarie 2013

Secrets of the 7-Result SERP

Secrets of the 7-Result SERP


Secrets of the 7-Result SERP

Posted: 13 Feb 2013 05:23 PM PST

Posted by Dr. Pete

Secrets of the 7-result SERP (pulp sci-fi cover)In August of 2012, Google launched 7-result SERPs, transforming page-one results. MozCast data initially showed that as many as 18% of the queries we tracked were affected. We’ve been collecting data on the phenomenon ever since, and putting some of the most common theories to the test. This is the story of the 7-result SERP as we understand it today (image created with PULP-O-MIZER).

I. 7-Result SERPs in The Wild

By now, you’ve probably seen a few 7-result SERPs in the “wild”, but I think it’s still useful to start at the beginning. Here are a few examples (with screenshots) of the various forms the 7-result SERP takes these days. I apologize in advance for the large images, but I think it's sometimes important to see the full-length SERP.

(1) The “Classic” 7-Result SERP

The classic 7-result SERP usually appears as a #1 listing with expanded site-links (more on that later), plus six more organic listings. Here’s a screenshot from a search for “some ecards”, a navigational query:

Classic 7-result SERP

(2) The 7 + 7 with Local Results

It’s also possible to see 7-result SERPs blended with other types of results, including local “pack” results. Here’s the result of a search with local intent – “williamsburg prime outlets”:

7-result SERP with 7 local

(3) The 6 + Image Mega-Pack

It’s not just organic results that can appear in the #1 spot of a 7-result SERP, though. There’s a rare exception when a “mega-pack” of images appears at the top of a SERP. Here’s a “7-result” SERP with one image pack and six organic listings – the search is “pictures of cats”:

7-result SERP with image mega-pack

II. Some 7-Result SERP Stats

Our original data set showed 7-result page-one SERPs across about 18% of the queries we tracked. That number has varied over time, dropping as low as 13%. Recently, we’ve been experimenting with a larger data set (10,000 keywords). Over the 10 days from 1/13-1/22 (the data for this post was collected around 1/23), that data set tracked 7-result SERPs in the range of 18.1% - 18.5%. While this isn’t necessarily representative of the entire internet, it does show that 7-result SERPs continue to be a significant presence on Google.

These percentages are calculated by unique queries. We can also looking at query volume. Using Google’s “global” volume (exact-match), the percentage of queries by volume with 7-result SERPs for 1/22 was 19.5%. This compares to 18.5% by unique queries. Factoring in volume, that’s almost a fifth of all queries we track.

Here are the 7-result SERP percentages across 20 industry categories (500 queries per category) for 1/22:

 CATEGORY  7-SERPS
 Apparel  23.6% 
 Arts & Entertainment  16.8% 
 Beauty & Personal Care  12.6% 
 Computers & Consumer Electronics  16.8% 
 Dining & Nightlife  27.2% 
 Family & Community  13.2% 
 Finance  19.2% 
 Food & Groceries  13.4% 
 Health  3.8% 
 Hobbies & Leisure  11.0% 
 Home & Garden  20.0% 
 Internet & Telecom  12.6% 
 Jobs & Education  21.4% 
 Law & Government  16.2% 
 Occasions & Gifts  7.8% 
 Real Estate  13.2% 
 Retailers & General Merchandise  29.6% 
 Sports & Fitness  28.6% 
 Travel & Tourism  36.2% 
 Vehicles  26.0% 

These categories were all borrowed from the Google AdWords keyword research tool. The most impacted vertical is “Travel & Tourism”, at 36.2%, with “Health” being the least impacted.  At only 500 queries/category, it’s easy to over-interpret this data, but I think it’s interesting to see how much the impact varies.

III. The Site-Link Connection

Many people have hypothesized a link between expanded site-links and 7-result SERPs. We’ve seen a lot of anecdotal evidence, but I thought I’d put it to the test on a large scale, so we collected site-link data (presence and count) for the 10,000 keywords in this study.

Of the 1,846 queries (18.5%) in our data set that had 7-result SERPs on the morning of 1/22, 100% of them had expanded site-links for the #1 position. There were 45 queries that had expanded site-links, but did not show a 7-result count, but those were all anomalies based on how we count local results (we include blended local and packs in the MozCast count, whereas Google may not). There is nearly a perfect, positive correlation between 7-result SERPs and expanded site-links. Whatever engine is driving one also very likely drives the other.

The only minor exception is the image blocks mentioned above. In those cases, the image “mega-pack” seems to be the equivalent of expanded site-links. Internally, we count those as 6-result SERPs, but I believe Google sees them as a 7-result variant.

While most (roughly 80%) of 7-result SERPs have six expanded site-links, there doesn’t seem to be any rule about that. We’re tracking 7-result SERPs with anywhere from one to six expanded site-links. It doesn’t take a full set of site-links to trigger a 7-result SERP. In some cases, it seems to just be the case that the domain only has a limited number of query-relevant pages.

IV. 7-Result Query Stability

Originally, I assumed that once a query was deemed “worthy” of site-links and a 7-result SERP, that query would continue to have 7 results until Google made a major change to the algorithm. The data suggests that this is far from true – many queries have flipped back and forth from 7 to 10 and vise-versa since the 7-result SERP roll-out.

While our MozCast Top-View Metrics track major changes to the average result count, the real story is a bit more complicated. On any given day, a fairly large number of keywords flip from 7s to 10s and 10s to 7s. From 1/21 to 1/22, for example, 61 (0.61%) went from 10 to 7 results and 56 (0.56%) went from 7 to 10 results. A total of 117 “flips” happened in a 24-hour period – that’s just over 1% of queries, and that seems to be typical.

Some keywords have flipped many times – for example, the query “pga national” has flipped from 7-to-10 and back 27 times (measured once/day) since the original roll-out of 7-result SERPs. This appears to be entirely algorithmic – some threshold (whether it’s authority, relevance, brand signals, etc.) determines if a #1 result deserves site-links, probably in real-time, and when that switch flips, you get a 7-result SERP.

V. The Diversity Connection

I also originally assumed that a 7-result SERP was just a 10-result SERP with site-links added and results #8-#10 removed. Over time, I developed a strong suspicion this was not the case, but tracking down solid evidence has been tricky. The simple problem is that, once we track a 7-result SERP, we can’t see what the SERP would’ve looked like with 10 results.

This is where query stability comes in – while it’s not a perfect solution (results naturally change over time), we can look at queries that flip and see how the 7-result SERP on one day compares to the 10-result SERP on the next. Let’s look at our flipper example, “pga national” – here are the sub-domains for a 7-result SERP recorded on 1/19:

  1. www.pgaresort.com
  2. www.pganational.com
  3. en.wikipedia.org
  4. www.jeffrealty.com
  5. www.tripadvisor.com
  6. www.pga.com
  7. www.pgamembersclub.com

The previous day (1/18), that same query recorded a 10-result SERP. Here are the sub-domains for those 10 results:

  1. www.pgaresort.com
  2. www.pgaresort.com
  3. www.pgaresort.com
  4. www.pgaresort.com
  5. www.pganational.com
  6. en.wikipedia.org
  7. www.tripadvisor.com
  8. www.pga.com
  9. www.jeffrealty.com
  10. www.bocaexecutiverealty.com

The 10-result SERP allows multiple listings for the top domain, whereas the 7-result SERP collapses the top domain to one listing plus expanded site-links. There is a relationship between listings #2-#4 in the 10-result SERP and the expanded site-links in the 7-result SERP, but it’s not one-to-one.

Recently, I happened across another way to compare. Google partners with other search engines to provide data, and one partner with fairly similar results is EarthLink. What’s interesting is that Google partners don’t show expanded site-links or 7-result SERPs – at least not in any case I’ve found (if you know an exception, please let me know). Here’s a search for “pga national” on EarthLink on 1/25:

  1. www.pgaresort.com
  2. www.pgaresort.com
  3. www.pgaresort.com
  4. www.pganational.com
  5. en.wikipedia.org
  6. www.tripadvisor.com
  7. www.jeffrealty.com
  8. www.pga.com
  9. www.bocaexecutiverealty.com
  10. www.devonshirepga.com

Again, the #1 domain is repeated. Looking across multiple SERPs, the pattern varies a bit, and it’s tough to pin it down to just one rule for moving from 7 results to 10 results. In general, though, the diversity pattern holds. When a query shifts from a 10-result SERP to a 7-result SERP, the domain in the #1 spot gets site-links but can’t occupy spots #2-#7.

Unfortunately, the domain diversity pattern has been hard to detect at large-scale.  We track domain diversity (percentage of unique sub-domains across the Top 10) in MozCast, but over the 2-3 days that 7-results SERPs rolled out, overall diversity only increased from 55.1% to 55.8%.

Part of the problem is that our broad view of diversity groups all sub-domains, meaning that the lack of diversity in the 10-result SERPs could overpower the 7-result SERPs. So, what if we separate them? Across the core MozCast data (1K queries), domain diversity on 1/22 was 53.4%. Looking at just 7-result SERPs, though, domain diversity was 62.2% (vs. 54.2% for 10-result SERPs). That’s not a massive difference, but it’s certainly evidence to support the diversity connection.

Of course, causality is tough to piece together. Just because 7-result SERPs are more diverse, that doesn’t mean that Google is using domain crowding as a signal to generate expanded site-links. It could simply mean that the same signals that cause a result to get expanded site-links also cause it to get multiple spots in a 10-result SERP.

VI. The Big Brand Connection

So, what drives 7-result SERPs? Many people have speculated that it’s a brand signal – at a glance, there are many branded (or at least navigational) queries in the mix. Many of these are relatively small brands, though, so it’s not a classic picture of big-brand dominance. There are also some 7-result queries that don’t seem branded at all, such as:

  1. “tracking santa”
  2. “cool math games for kids”
  3. “unemployment claim weeks”
  4. “cell signaling”
  5. “irs transcript”

Granted, these are exceptions to the rule, and some of these are brand-like, for lack of a better phrase. The query “irs transcript” does pull up the IRS website in the top spot – the full phrase may not signal a brand, but there’s a clear dominant match for the search. Likewise, “tracking santa” is clearly NORAD’s domain, even if they don’t have a domain or brand called “tracking santa”, and even if they’re actually matching on “tracks santa”.

In some cases, there does seem to be a brand (or entity) bias. Take a search for “reef”, which pulls up Reef.com in the #1 spot with four site-links:

Google #1 result for Reef.com

Not to pick on Reef.com, but I don’t think of them as a household name. Are they a more relevant match to “reef” than any particular reef (like the Great Barrier Reef) or the concept of a reef in general? It could be a question of authority (DA = 66) or of the Exact-Match Domain in play – unfortunately, we throw around the term “brand” a lot, but we don’t often dig into how that translates into practical ranking signals.

I pulled authority metrics (DA and PA) for a subset of these queries, and there seems to be virtually no correlation between authority (as we measure it) and the presence of site-links. An interesting example is Wikipedia. It occupies over 11% of the #1 results (yeah, it’s not your imagination), but only seven of those 1,119 queries have 7-result SERPs. This is a site with a Domain Authority of 100 (out of 100).

VII. The "Entity" Connection

One emerging school of thought is that named entities are getting more ranking power these days. A named entity doesn’t have to be a big brand, just a clear match to a user’s intent. For example, if I searched for “sam’s barber shop”, SamsBarberShop.com would much more likely match my intent than results for barbers who happened to be named Sam. Sam’s Barber Shop is an entity, regardless of its Domain Authority or other ranking signals. This goes beyond just an exact-match domain (EMD) connection, too.

I think that 7-result SERPs and other updates like Knowledge Graph do signal a push toward classifying entities and generally making search reflect the real world. It’s not going to be enough in five years simply to use keywords well in your content or inbound anchor links. Google is going to want to want to return rich objects that represent “real-world” concepts that people understand, even if those concepts exist primarily online. This fits well into the idea of the dominant interpretation, too (as outlined in Google’s rater guidelines and other documents). Whether I search for “Microsoft” or “Sam’s Barber Shop”, the dominant interpretation model suggests that the entity’s website is the best match, regardless of other ranking factors or the strength of their SEO.

There's only one problem with the entity explanation. Generally speaking, I'd expect an entity to be stable – once a query was classified as an entity and acquired expanded sitelinks, I'd expect it to stay that way. As mentioned, though, the data is fairly unstable. This could indicate that entity detection is dynamic – based on some combination of on-page/link/social/user signals.

VIII. The Secret Sauce is Ketchup

Ok, maybe “secrets” was a bit of an exaggeration. The question of what actually triggers a 7-result SERP is definitely complicated, especially as Google expands into Knowledge Graph and advanced forms of entity association. I'm sure the broader question on everyone's mind is "How do I get (or stop getting) a 7-result SERP?" I'm not sure there's any simple answer, and there's definitely no simple on-page SEO trick. The data suggests that even a strong link profile (i.e. authority) may not be enough. Ultimately, query intent and complex associations are going to start to matter more, and your money keywords will be the ones where you can provide a strong match to intent. Pay attention not only to the 7-result SERPs in your own keyword mix, but to queries that trigger Knowledge Graph and other rich data – I expect many more changes in the coming year.


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President Obama Answers Your Questions

The White House Your Daily Snapshot for
Thursday, February 14, 2013
 

President Obama Answers Your Questions

This afternoon, February 14th at 4:50 p.m. EST, President Obama will sit down with Americans from all across the country for a “Fireside Hangout” – our 21st century take on Franklin D. Roosevelt’s fireside chats. The President will join a live, completely virtual interview from nowhere other than the Roosevelt Room in the White House’s West Wing.

Tune in at 4:50 pm EST for President Obama's Fireside Hangout.

President Obama Participates in a Fireside Hangout on Google+

In Case You Missed It

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

Open for Questions: The State of the Union and Energy and the Environment
Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, answers questions from the public about the President’s speech in an “Open for Questions” session moderated by Popular Science.

Improving the Security of the Nation’s Critical Infrastructure
President Obama issued an Executive Order directing federal departments and agencies to use their existing authorities to provide better cybersecurity for the Nation, efforts that will by necessity involve increased collaboration with the private sector.

Open for Questions: The State of the Union and the Economy
Alan Krueger, Chairman of the Council of Economic Advisers, answered questions from the public about President Obama's State of the Union Address in an “Open for Questions” session moderated by Yahoo! Finance.

Today's Schedule

All times are Eastern Standard Time (EST).

9:35 AM: The President departs the White House en route to Joint Base Andrews

9:50 AM: The President departs Joint Base Andrews

11:30 AM: The President arrives in Decatur, Georgia

12:10 PM: The President visits a pre-kindergarten classroom at College Heights Early Childhood Learning Center

1:20 PM: The President delivers remarks on education WhiteHouse.gov/live

2:40 PM: The President departs Decatur, Georgia

4:10 PM: The President arrives at Joint Base Andrews

4:25 PM: The President arrives at the White House

4:50 PM: The President participates in a Fireside Hangout with Google+ WhiteHouse.gov/live

WhiteHouse.gov/live Indicates that the event will be live-streamed on WhiteHouse.gov/Live

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What'd you think?


The White House, Washington


Hello --

On Tuesday, President Obama delivered his State of the Union Address. He was talking to Congress, but there's someone he especially wanted to speak to:

You.

That’s why we created Citizen Response -- a new tool that lets you to tell President Obama and his advisers what you thought of his plan to create jobs and build a strong middle class.

In fact, Americans from all over the country have given us their responses. They sat down with President Obama's speech, read through it line by line, and highlighted the ideas that resonated with them. People like you are telling us why the President's proposals matter to their communities.

It's an incredible thing. And you should be part of it.

All you need to do is visit WhiteHouse.gov/SOTU to get started.

The responses we've already seen are powerful stuff.

We heard from a veteran named Jason, who said, "I went to college using the GI Bill and was able to buy a home using the VA Home Loan. Please continue to give veterans the benefits they deserve and give them more help for transitioning out of the military back into civilian life."

We heard from a guy named Matt, who told us that he liked what he heard about the minimum wage. "The only way we can bring this country and this economy back to being 'great' again," he said, "is if we can have a more rational benchmark for pay."

Others have said that they support President Obama's call for high-quality preschool for every child. Others have said that it's time for a vote to help reduce gun violence.

This week, the President is on the road talking with people across the country about the State of the Union, but let me tell you what we're doing with stories like yours.

We're crunching the numbers, compiling your feedback, and putting a presentation together to update senior White House staff.

And soon, we're going to share your stories with President Obama so that he has a chance to hear your voices for himself.

So make sure you watch Tuesday's enhanced State of the Union and give us your Citizen Response. You have no idea how important it is:

http://www.WhiteHouse.gov/SOTU

Thanks!

David

David Simas
Deputy Senior Advisor
The White House 

 




 
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Tips for in-house marketers on engaging with an agency: senior marketers share their advice

Tips for in-house marketers on engaging with an agency: senior marketers share their advice

Link to SEOptimise » blog

Tips for in-house marketers on engaging with an agency: senior marketers share their advice

Posted: 14 Feb 2013 04:37 AM PST

There comes a time in the life of an in-house marketer when they need agency support in order to implement and manage offline and online campaigns. However, building a solid working relationship between the two parties can, at times, be quite challenging, especially for those with little experience. I spoke to two senior in-house marketers: Dr. Gill Whiteman, head of online content and strategy at GTI Media and content manager of targetjobs.co.uk and Shalini Seneviratne, Global Brand Manager – Lifebuoy at Unilever, about sharing their experiences and advice on working with agencies and what to look for from an in-house marketing perspective. The following is the list of questions I posed to them along with their responses:

  •  What are the key criteria an external agency should meet in order to work with you?

Gill: I look for the right expertise, for the specific work that needs to be done and, thereafter, I look for clarity in the agreement. I want to know what we are going to do together, what the expected outcome will be, what both sides will be bringing to the table, and when, realistically, we can expect to see the results of any action. This is important in setting up the relationship, and it helps an in-house SEO like me to communicate the value of any activity to stakeholders within my business and also manage expectations. Our business is very committed to our SEO activity, which is great. However, that means that stakeholders are also eager to see results as soon as possible when, as we know, there can be a bit of a waiting game.

For me personally, I also want to be able to work with people I feel are credible and can make their expertise accessible. As well as achieving a specific and positive outcome for the site, I want us as a business to learn from our experiences of working with agencies and build on our internal practice so that we are always progressing.

Shalini: Firstly, I think expertise is the main thing. The whole reason for outsourcing things to an external agency is because we don't have that expertise in house. The agency must really have a 'wow portfolio' which demonstrates that they have the expertise. Secondly, discipline is very important. One of the biggest complaints that people have, is how the agency doesn't stick to time, their overall commitment levels etc. Whilst some may think that a creative process is hard to keep to deadlines, this is really important to me. Thirdly, the agency must have a sense of business. More often than not, ideas presented by agencies are very outlandish and are not practical to be implemented. They must understand the business realities and be creative within them. Finally commitment – if I look back and think about the best agency people I've worked with, they are the ones that really make things happen. They will go out of their way, find back-up plans, make suggestions, and pull out some pleasant surprises!

  •  What are the key ingredients for a successful client-agency relationship?

Gill: The key ingredients for success are good communication and clarity. It begins with good preparation before any work begins, and actually before I pick up the phone to call an agency.

From the client side, I think it is important to provide your agency with as full and clear a brief as possible. This is a good place to begin discussions and see what is possible with the time, resources, and funds available.  It also sets the scene for the work that will take place. It can be difficult for both the agency and the in-house team if the internal team (content, design, development) isn't given sufficient time to prepare for and take on the extra work that can come out of a full site audit or campaign.

I'm also a sucker for a detailed and well-presented report. I know that some people leave these to collect dust on their shelves. I don't. We have worked with a number of agencies over the years and I do go back to review the reports. Sometimes what wasn't possible at the time becomes possible at a later date, or I might re-evaluate something we have done previously to move it on to the next level, or reassess it against changes in practice. I get maximum value out of you guys even when you've moved on!

Shalini: Trust – both client and agency must really believe in and trust each other. If you brief an agency knowing their output is not going to be up to the mark (and this happens a lot) whatever they present won't make you happy. Same with the agency – if they present to the client knowing that their ideas will be shot down, guess what?! More often than not, their ideas will be shot down. Trust will only come when both parties know that they are experts in what they do, and they really have done their background work so they can justify their ideas or feedback. With trust also comes respect. I hate having arguments with an agency about absurd ideas that can't be implemented. And they just don't let go and keep arguing about things that don't make sense. This really makes me lose respect. Finally, both parties must know when to let go.

  •  What advice would you give other in-house marketers on sourcing and getting the best out of an agency?

Gill: I think you should aim to talk openly about expectations and not expect your agency contacts to be complete mind readers. It's that brief again! As a site owner you know your product and your market, therefore it is in your interests to give the agency the inside view and then they can focus their expertise and consultancy better. Maybe those who are newer to managing their site's SEO need more handholding, but even providing good basics (competitors, main keywords, gut feel of where issues may lie, etc.) and some context of your business can really help you and your agency get quickly to the root of any issues.

Shalini : Firstly it's all about selection. Good agencies are really hard to find and good people within an agency even harder. So you shouldn't back down and go for a substandard option; fight to get the best people in the agency working on your project. Secondly inspiration – it's not rocket science that a creative process needs some kind of inspiration – be it where you brief, when you brief, what your brief looks like, even the language that goes into the brief. Make the agency feel like they're part of the team. If you really think about it, they are! Get them involved from the beginning of the process, go with them to meet consumers, have them at your meetings, and get their input into other aspects of your projects as well. You need to build a strong relationship with them which is almost personal. So whether you do it by taking them out for drinks, or sending them a cake for their birthdays, it's really up to you. But ultimately the best work comes out of inspired people and not systems and processes. I know agency people who really go out of their way for clients they like

  • Finally, in your opinion, what separates the good agencies from the great?

Gill: It's about empathy for the client's set up. Clients want to work with consultants who can go beyond the textbook solution and work with them to find the next best approximation that can be applied to their site in particular; content management systems and business-as-usual running of a website don't always allow for the perfect solution. I always prefer honesty and a good dose of rational thinking, and I would rather know and discuss upfront priorities and possible showstoppers, so that we can use our time together effectively.

Shalini: Consistency. Good agencies will have great ideas sometimes, but great agencies will consistently deliver great ideas. And that's not because of some magic or coincidence. It's because there is a scientific process that goes behind all the creativity which is required. It's because the agency people have a deeper understanding of the consumers' needs and each idea they present strives to find a genuine solution to these needs. Consistency also comes when you are not afraid to do something different. It's not really about thinking outside the box (too clichéd) but it's about thinking inside the box – the boundaries are important, you have to be creative within them.

Are you an in-house marketer? Have you had experiences of working alongside some great agency folk? If so please feel free to share your thoughts, advice and experiences with us in the comments below.

© SEOptimise - Download our free business guide to blogging whitepaper and sign-up for the SEOptimise monthly newsletter. Tips for in-house marketers on engaging with an agency: senior marketers share their advice

Related posts:

  1. Tips for SEOs on initial agency-client engagement
  2. 6 Simple Tips to Make Your Blog More Engaging
  3. How to Pitch SEO: Sales Tips for Appeasing Marketing Directors #BrightsonSEO

Seth's Blog : Open, generous and connected

 

Open, generous and connected

Isn't that what we seek from a co-worker, boss, friend or even a fellow conference attendee?

Open to new ideas, leaning forward, exploring the edges, impatient with the status quo... In a hurry to make something worth making.

Generous when given the opportunity (or restless to find the opportunity when not). Focused on giving people dignity, respect and the chance to speak up. Aware that the single most effective way to move forward is to help others move forward as well.

and connected. Part of the community, not apart from it. Hooked into the realities and dreams of the tribe. Able and interested in not only cheering people on, but shining a light on how they can accomplish their goals.

Paradoxically, the fancier the conference, the more fabled the people around the table, the less likely you are to find these attributes. These attributes, it turns out, have nothing to do with fame or resources. In fact, fear is the damper on all three. Fear of failure, intimacy and vulnerability. Fear closes us up, causes us to self-focus and to disconnect.

When we find our own foundation and are supported in our work by those around us, we can get back to first principles, to realizing our own dreams and making our own art by supporting others first and always.


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miercuri, 13 februarie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Japan Contracts Third Straight Quarter; No Escape

Posted: 13 Feb 2013 05:51 PM PST

Economists predicted an end to the recession in Japan.

However, economists were wrong again as Japan fourth-quarter GDP shows economy still in recession
Japan's economy contracted for the third consecutive quarter in October-December, showing the country is struggling to escape from a mild recession and adding weight to the new government's push for radical policy steps to revive growth.

Gross domestic product (GDP) fell 0.1 percent in October-December from the previous quarter, compared with the median forecast of 0.1 percent expansion, according to a Reuters poll.

Economics Minister Akira Amari said while the economy was still showing some weakness, it was likely to resume moderate recovery helped by monetary easing, stimulus spending and an expected pick-up in global growth.

On an annualized basis, the economy contracted 0.4 percent, Cabinet Office data showed on Thursday. Economists had expected a 0.5 percent annualized increase.

Private consumption rose 0.4 percent from the previous quarter versus the median forecast for a 0.5 percent increase.

Capital expenditure fell 2.6 percent, more than the median estimate for a 1.8 percent decline, marking the fourth straight quarter of decline.

A $117 billion stimulus package is likely to pass parliament in coming weeks.
No Escape

Those are not good numbers. Moreover, given Japan's massive debt-to-GDP ratio, there is virtually no escape for the predicament Japan is in.

If you are looking for who and what to blame, the answer is simple: Keynesian and Monetarist stimulus foolishness.

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

Reflections on Rand Paul's Response to Obama's State of the Union Address

Posted: 13 Feb 2013 03:30 PM PST

I invite you to listen to senator Rand Paul's response to president Obama's misguided agenda as delivered in the president's State of the Union Address.



Specifically Rand Paul says ...

  • Democrats believe that the government is the economic answer to all our economic and social ills. [Rand Paul doesn't believe government is the answer, nor do I]
  • The debt hangs like a sword of Damocles, reminding Obama that he cannot pursue his liberal agenda without raising taxes or bankrupting the country. [Agreed]
  • We are sick and tired of hearing why a program is wanted but not how we are going to pay for it. [Agreed]
  • Even without Obamacare, Medicare and social security are threatened by the demographics of the baby boomers. Within a few years we will go from 42 million seniors to 77 million seniors in the space of a few years. [Agreed]
  • Obama by his nature is a progressive, a believer that government is the answer, that the elite few can make society better if only they had enough money. [Agreed]
  • Obama believes that stimulus would work if only government had more taxpayer money to spend. No matter that stimulus spent $400,000 per job created. [Agreed]
  • Let us hope the debt crisis will be managed before we destroy this great country, before we destroy our currency, before we destroy the dream we hope to pass on to our kids and our grandkids. [Agreed]

Paul concludes with a message "We believe that government is the problem and not the solution". I endorse Rand Paul's message 100%.

For my specific blasting of Obama's SOTU address, please see Hot Air and No Substance; Obama's Plan to Destroy Jobs "Won't Cost a Dime"

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

Reader Reflections on "Watson" the Medical Computer

Posted: 13 Feb 2013 01:23 PM PST

In response to Meet Watson, Your Doctor in a Pizza-Size Box, reader Robert writes ...
Watson was most likely named for Thomas J. Watson, first president of the modern IBM company, not Sherlock Holmes' sidekick.

It will be interesting to see how Watson makes out.  CAD (Computer Aided Diagnosis) is not new, and has been around for at least 15 years.  2nd read Mammography has been the first area of CAD, but lung cancer has been targeted as well.  Raw computing power is not the issue, algorithms that can differentiate patterns are.

Computers and humans (to date) provide somewhat complementary skills, with computers providing good sensitivity but often poor specificity (high false positive rates) although this area is improving.  We'll see what Watson can do.

I think a more interesting application would be rapid blood chemistry analysis, and DNA analysis (eg. analyzing and categorizing foreign DNA in the blood) which would give much earlier tests for cancer and other disease, even before a patient presents with symptoms and imaging studies are conducted.

Rob
Thanks Rob.

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

"Self-Inflicted Damage" Now the UK Goal; Inflation a "Cause For Optimism"

Posted: 13 Feb 2013 08:26 AM PST

Inflation is expected to run well above the Bank of England target rate of 2% for another two years in the UK. Don't worry it's a self-inflicted goal.

Moreover, Inflation is a cause for optimism says Bank of England governor Mervyn King.
The UK inflation rate will remain stubbornly high for longer than previously thought, the governor of the Bank of England has said.

Sir Mervyn King now expects inflation, currently 2.7%, to rise to at least 3% by the summer and to remain above the Bank's 2% target for two years.

In November he had said that inflation would fall back towards its target in the second half of this year. But the governor also said that "a recovery is in sight".

Sir Mervyn King, presenting the Bank's latest Quarterly Inflation Report, 20 years after it issued its first one, said the economy had "cause for optimism".

"If you like, it is a bit of a self-inflicted goal in terms of the damage done to real take-home pay, perhaps another way of trying to implement fiscal consolidation through moving up the price level," he said.
In other optimistic news, The Office for National Statistics said on Wednesday that UK workers were earning no more than they were 10 years ago, while a report from the Resolution Foundation think tank warned that it could be another 10 years before living standards return to the levels they were at before the recession.

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

Hot Air and No Substance; Obama's Plan to Destroy Jobs "Won't Cost a Dime"

Posted: 13 Feb 2013 01:24 AM PST

When it comes to political lies that cannot and will not be met "It won't cost a dime" is right at the top of the list. Not unexpectedly, that was the central thesis of numerous Fantasyland projections in Obama's State of the Union Address Tuesday Evening.

Here are a few ideas from his state of the union address and my comments on them.

On Health Care Quality

In reference to health care costs, the president claims "medical bills shouldn't be based on the number of tests ordered or days spent in the hospital – they should be based on the quality of care that our seniors receive."

Mish says good luck with charging healthcare based on quality, because quality is impossible to define.

On Closing Loopholes

Obama says we can hit deficit targets and "save hundreds of billions of dollars by getting rid of tax loopholes and deductions".

Mathematically speaking, one cannot save a dime by closing loopholes. Closing loopholes may be more fair, but that has nothing to do with "saving money". Rather, closing loopholes simply spreads costs around in a different fashion.

On Tax Code Changes

Obama says "The American people deserve a tax code that helps small businesses spend less time filling out complicated forms, and more time expanding and hiring."

I certainly agree with that, and a flat tax with no deductions would do just that.

Would Obama be willing to implement a flat tax structure and close "loopholes" like the mortgage interest rate deduction?

Of course not. The Real Estate industry would scream bloody murder. Obama is not really interested in closing loopholes per se, just the selected ones that he wants.

Hot Air and No Substance

Obama says "The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next."

I certainly agree with that.

The solution is to get rid of the Fed, end fractional reserve lending, and implement a balanced budget. Unfortunately, the president did not mention any of those action items. He is all hot air and no substance.

It Won't Cost a Dime

Obama wants "Congress to help create a network of fifteen [manufacturing] hubs and guarantee that the next revolution in manufacturing is Made in America. He says "nothing I'm proposing tonight should increase our deficit by a single dime."

That certainly would be excellent news (if only it was true). In reality, new manufacturing hubs in one city will come at the expense of existing manufacturing somewhere else unless more money is thrown at the problem.

Yet, if more money is thrown at the problem, why should anyone expect results different from Obama's disastrous entry in various clean energy schemes that went bankrupt?

Climate Change Nonsense

Obama says "For the sake of our children and our future, we must do more to combat climate change."

I suggest that if we want to do something for the sake of our kids, we should eliminate the deficit, get rid of the Fed, and back the dollar with gold.

Regardless of whether or not anyone believes the hype over global warming, the notion that governments will do anything sensible about it is complete nonsense. Certainly every cap-and-trade proposal to date has been preposterous.

Obama's speech got downright scary when he said "If Congress won't act soon to protect future generations, I will. I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy."

And somehow that will "not cost a dime".

"The states with the best ideas to create jobs and lower energy bills by constructing more efficient buildings will receive federal support to help make it happen."

Apparently, federal support to construct more buildings will "not cost a dime" either.

"Fix-It-First"

President Obama proposes a "Fix-It-First program to put people to work as soon as possible on our most urgent repairs, like the nearly 70,000 structurally deficient bridges across the country."

Supposedly that will not "cost a dime either". Wait a second on that. His next sentence was "And to make sure taxpayers don't shoulder the whole burden, I'm also proposing a Partnership to Rebuild America that attracts private capital to upgrade what our businesses need most: modern ports to move our goods; modern pipelines to withstand a storm; modern schools worthy of our children".

I have a simple question: What part of the burden will taxpayers shoulder?

This "partnership" sounds suspiciously like a plea for tax hikes with the money going to overpaid public union workers.

If the president really wanted to insure we rebuild America at a reasonable cost, he would scrap Davis-Bacon and all prevailing wage laws, implement national Right-to-Work laws, and end collective bargaining of public union workers.

Instead, the president appears willing to tax the rest of the county to death to help the unions who elected him.

Still More Tax Hikes

The tax hikes don't stop with "Fix-It-First" either. Obama says "Right now, there's a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today's rates."

If that does not add to the deficit, then it must be achieved by tax hikes.

Preschool

The president's free money ideas roll on and on. Obama proposes "working with states to make high-quality preschool available to every child in America". Supposedly that pays for itself.

Job Destruction

The surest way to destroy jobs is for government to mandate businesses pay labor costs in excess of a natural rate. Yet, Obama pledges to do just that. Specifically, Obama wants to "raise the federal minimum wage to $9.00 an hour". 

He claims "This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead."

Minimum Wage Seen and Unseen

The president ignores the "unseen" effect of those who do not get a job because companies choose to hire a software or hardware robot instead of an overpriced human.

The problem is not a minimum wage, but rather how much the dollar buys. If Congress did not debase the dollar with massive deficits, the dollar would buy much more than it does.

The irony is Obama complains of "Factory towns decimated from years of plants packing up. Inescapable pockets of poverty, urban and rural, where young adults are still fighting for their first job."

The US lost jobs because US wages were too high. Manufacturing is now returning, but to robots, not humans.

The president concluded "Thank you, God bless you, and God bless the United States of America."

I conclude the president's entire speech was one proposal after another that will destroy jobs, add to the deficit, and increase taxes.

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

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