vineri, 25 octombrie 2013

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Link Reclamation - Whiteboard Friday

Link Reclamation - Whiteboard Friday


Link Reclamation - Whiteboard Friday

Posted: 24 Oct 2013 04:24 PM PDT

Posted by RossHudgens

The one thing any good marketer appreciates more than a mention of their brand is a link back to their own domains. For a variety of reasons, some authorsâ€"no matter how well meaning they areâ€"don't include that link with the mention. With the right tools and a little diplomacy, these are some of the easiest opportunities to earn valuable links back to our own properties, and in today's Whiteboard Friday, Ross Hudgens gives us several great places to start.

For reference, here's a still of this week's whiteboard:

Video Transcription


Hey Moz fans, welcome to Whiteboard Friday. My name is Ross Hudgens, and I work for Siege Media, a content market agency/link building and link development agency. Today I'm going to talk a little bit about link reclamation, one of my favorite subjects.

Link reclamation, if you're not familiar with it, is the task of finding opportunities on the web where you've been linked to or you've been mentioned, but haven't been properly linked to for whatever reason. Maybe the webmaster messed something up, maybe they just didn't find the right URL, maybe they misspelled your domain name, all kinds of reasons inform why someone might do that incorrectly.

For the purposes of hopefully getting more traffic and also getting those links that we like that potentially can add a lot of value to our domain and help us rank for keywords we want to, it makes sense to do link reclamation. And even more so, I really like it because the conversion is so high. Because someone has already mentioned you, you get a really high conversion on your request, because normally they already have a positive brand sentiment for you.

So one thing to think of in general for link reclamation, if you think about it as a main concept, is it most frequently occurs when your brand has an experience outside of the digital world or disconnected from your main domain. So it could still be digital, but disconnected. So for example, if you're Target, you probably have a lot of experiences in store where people refer to that, and it doesn't necessarily make sense to refer to your domain.

Similarly, if you have a YouTube video, it might not make as much sense. But there are still opportunities to ask for a citation back to your domain in those instances that you might not have totally realized before that. That is possible with these kinds of opportunities.

So there are a lot of ways to go about doing that. I'm going to dive into a few of them in this strategy section. A big one for big brands is brand misspellings. Frequently, people will have webmaster error. For whatever reason, they will misspell your domain name.

For example, if you're a giant company, Pepsi or something like that, you could look for PEPS.com, and likely you're going to find some instances where people have linked to that thinking it's Pepsi. So you can go to them and say, "Hey, please fix your error on your site, how you've linked to us. It will help your users. It will help us. It will be a great thing all around." They will generally do that.

So a good process for finding those and also seeing if there is actually link volume around different misspellings is detailed on this link by John Henry Scherck, who I might have mispronounced his name. But that URL, you can find that process, which I can't really get into as much as I would like to here. But I definitely recommend you go to that post and check it out.

The most powerful ongoing process is simple brand monitoring. So Moz's tool, Fresh Web Explorer is especially powerful for that. You can use advanced operators to see where your brand has been mentioned but you haven't been linked to. I think it's negative LD, or you can see in the advanced operators dropdown. But that's extremely powerful to just monitor and see who's mentioning you and all those things as an ongoing thing.

Similarly, Google by date, so Google has an advanced search setting where you can search by 24 hours, a week, a month, things like that, and it will give you the opportunity to see recent mentions that sometimes offer a nice supplement to the fresh web index. So it's always good to get multiple looks at the web, Fresh Web Explorer I believe uses RSS feeds specifically. Google, by date has, of course, their own comprehensive index. So it's nice to get a blend of both for finding mentions where people have talked about you, but not linked to you.

So another good one is allinURL/tag/brand. So insert brand. If you're Pepsi, allin/tag/Pepsi. So these are instances where people think you're significant enough to actually link to you, significant enough to actually mention you. But sometimes they haven't linked to you. They've created a tag for you because they've talked about you in some way in a post. So there's a lot of sometimes opportunity to get links on those kinds of pages.

So it's kind of a cool way to easily use Google search engine to find pages that do those kinds of things. So you can just search by that, scrape the results, dump it into like a spreadsheet, and you can quickly find who hasn't linked to you by doing that kind of process.

Short form text is a kind of a unique thing. It's any kind of asset that is short, like a definition, a stat, anything like that, that might have been mentioned or stolen without attribution. So examples of that: One stat that is frequently referred to is every second of page load time is a seven percent dip in conversation rate.

So if you have that stat and you actually were the source of that stat, you could track it in Fresh Web Explorer and Google search, these same kind of things just like you do your brand, see who's mentioned it, and say, "Please attribute us properly with that stat."

Other examples I like pointing to frequently is Content Marketing Institute. They have a "what is the definition of content marketing," and that has been stolen like 125,000 times. There is this huge opportunity where people are just taking that, not linking to it, not attributing it properly just because they are lazy or what have you. If you go out and reach out to those webmasters, you can easily get links back, because most of the people will panic in that moment and be like, "Oh, it was just a honest mistake," and link to you as they should have.

So sometimes you might have that asset, sometimes you might not, but it's also something to think about and have in the back of your mind when you do that kind of data analysis that might come with an interesting stat that people might want to take.

Reverse image search, so you have a logo or a set of logos, maybe you have interesting assets on your site. For example, if you're National Geographic, you might have images that everyone takes. You can start monitoring those images, see who's taken them without attribution, and get links back by doing requests of, "Please attribute properly."

There are tools like Image Raider, which I know does that. I haven't used it extensively, but it's pretty good. Similarly you can use tools like TinEye and also just reverse image search on Google to find those mentions. Of course, an explicit and powerful one is your own logos. So you can see who has mentioned your logo, but not linked to you in the same kind of ways.

Also, just as a tangent from this, Screaming Frog is a really powerful tool. If you haven't heard of it, it's a good way to dump a lot of links in there, because sometimes you might see this as a negative process if you go to a lot of these links and you've already been linked to. So you can use Screaming Frog as a custom filter and find exactly who hasn't linked to you by setting an exclude to your domain name. So it can make this process more efficient for you and less frustrating depending on the domain.

YouTube videos, so a lot of people make video assets that are hosted on YouTube or some other platforms, but they don't necessarily get linked to for whatever reason. Again, it's something separate from your main domain. So because of that disconnect, they don't probably link to it a lot of time. Or they're going to link to the YouTube video, but it doesn't mean that they're not willing to link to you as a business if you request it.

So a good way to find that is either dump the YouTube URL in Open Site Explorer or whatever your link management tool is and see what the data is behind that. Or just look at the dashboard. YouTube specifically has an embed dashboard, so you can see where people have embedded that video and not linked back to you, or hopefully they have already linked to you, of course. But you can capture that gap where they haven't linked to you and they should have because it has a slight disconnect from your main domain as a YouTube video.

Links and tweets and +1s. This is more of an advanced thing. If you have a pretty powerful Twitter account or a Google+ account, you can actually take your archive from Twitter and create a spreadsheet essentially, dump all of your tweets in there. Use a tool like Screaming Frog or use the Moz API for example. Look at the data and see if any of those have been linked to and then see if there is an opportunity to actually reach out and say, "Hey, this tweet, you looked to my Twitter account. I'd really appreciate it if you link to my domain instead."

A similar thing can be done for Google+. You have to do a site search for your Google+ URL, and they won't get all of your URLs. But if you scrape that and do the same kind of process, you might find places where people have linked to maybe an interesting tweet by you or some interesting quote you gave or something like that, where you might have not been linked to that you might have wanted to and do a request like that.

So finally, moving links to primary domain. So what that means is, if you're a big brand, sometimes you have multiple owned properties across the web, but not all of them are you primary KPI for SEO purposes. So I've worked with companies who have two main domains, because they can't make up their mind really, and one is very clearly their SEO domain where they want to rank for stuff. It's not totally clear which one in the mind of consumers is the primary one.

So something that you can do and that I did in that instance is you go to the one that they don't really have reason to rank for anything and ask them to link to the other one because maybe you're changing focus or that's how you would evangelize it to them. Most of the time they'll do it because they like you and they're already linking to you and things like that. You'll get the more direct link power from those kinds of links.

So, when you're doing this process, it's not as simple as asking every single person to link to you. There's risk involved if you do this incorrectly. So it's definitely be delicate and don't step on the wrong toes, because when you do this, there'll be sites if you're a big brand that people cover you all the time. Occasionally people will write about you, but maybe in that single post they don't link to you, but in the previous ten they linked to you.

So in those kinds of instances, just let it go. You don't need a link in every single post that you get. Potentially it can be kind of put offish to that person that covers you all the time, and you don't want to lose that good press by burning bridges by being over aggressive as a SEO. So in those kinds of instances, verify that you have links already, that they cover you all the time and just let it go if that's the kind of instance where they just mistakenly didn't link to you that one time.

Similarly, don't step on PR. It's kind of a similar idea. When you're doing this process, reaching out to big people that are covering you, it's frequently newspapers don't link cite properly so you have to do that kind of outreach. This is where it's a high value kind of campaign when you hit those big newspapers. But it's also at risk with PR if you step on them and they don't like what you're doing. They hate that you are talking to their contacts directly. So verify that this is an okay thing before you start doing this outreach with your PR team

Ask for links where you should be linked. What I mean by that is sometimes you'll get mentions in articles in jest. Maybe they'll be talking about general soda trends, and they'll randomly jitter off five brands that are sodas, Pepsi, Coca-Cola, Sprite, something like that, all in a sentence. So you could go and say, "Hey link to Pepsi," but there are four other companies there that they would also have to link to.

You're just kind of a one off thing in the article. You don't totally make sense to be linked to in those kinds of situations. So it's an example of a non-harmonious kind of event where you shouldn't ask for a link because it doesn't make sense necessarily. So in those kinds of situations, skip it. You want places where it gets a positive brand sentiment. You should have been linked to in the article, but they didn't

So if you can really say in your mind it adds value to the article being linked here, then that's when you should do outreach for this kind of link reclamation. If not, you potentially could burn bridges, step on people's toes, and put yourself at risk for future coverage that might have been more powerful had you not actually ruined your relationship with that press person.

And finally, if you're doing this at scale and you have a lot of people mentioning you, you're a huge brand, you want to use tools that make this more efficient. So one of the problems is sometimes you'll have no idea if someone has linked to you before, unless you have a process put in place.

So there are a lot of link management tools where you can dump all of your links into it, and it will automatically have a popup in the corner saying that you have a link from this domain. So if you have a lot of people doing outreach and doing link reclamation, you can see, "Hey, I've already gotten a link from this domain or multiple links from this domain. I don't need to do this outreach again."

Otherwise it's kind of time intensive, trying to remember who's linked to you, who hasn't link to you, whether or not you should do that outreach, and all of those things. So doing that on top of all of these things I think is really powerful.

That's pretty much it, but I hope you guys see this as a valuable thing that I do. It's really powerful, especially the bigger your brand, the more powerful it's going to be. But I think any business on the web today who's hopefully building a brand, because that's what it takes to rank in Google and today's search results, is going to get occasional mentions in any of these instances that you can potentially capitalize on that were missed where people don't link to you.

So I hope this was valuable and have a good one.

Video transcription by Speechpad.com


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"Saving Money as We Speak"

Here's What's Happening Here at the White House
 
 
 
 
 
 
  Featured

"Saving Money as We Speak" 

This week, the President announced his nominee for the next Secretary of Homeland Security, spoke on the Affordable Care Act and immigration reform, and welcomed the Prime Minister of Pakistan and this year's Sammy Award winners to the White House. 

Click here to watch this week's West Wing Week:

West Wing Week 10/25/13 or, "Saving Money as We Speak"

 

 

  Top Stories

President Obama: We Should Pass Immigration Reform, and We Should Do It this Year

Yesterday, President Obama joined leaders from business, labor, and faith communities who are united around one goal: fixing our broken immigration system.

READ MORE

How the Affordable Care Act Improves the Lives of American Women

Secretary of Health and Human Services Kathleen Sebelius spent some time explaining how the Affordable Care Act protects women’s access to quality health care.

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The People’s House in Pink: Honoring Breast Cancer Awareness Month at the White House

The White House and the entrance to the Naval Observatory will be lit pink tonight, October 24th, in honor of Breast Cancer Awareness Month.

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  Today's Schedule

All times are Eastern Time (ET)

10:00 AM: The Vice President meets with Italian Senate President Pietro Grasso

10:45 AM: The President and the Vice President receive the Presidential Daily Briefing

1:20 PM: The President departs the White House en route Joint Base Andrews

1:35 PM: The President departs Joint Base Andrews

2:30 PM: The President arrives New York

3:25 PM: The President visits a P-TECH classroom

3:45 PM: The President delivers remarks WATCH LIVE

6:45 PM: The Vice President and Dr. Jill Biden deliver remarks at the Annual Issues Conference of the Democratic National Committee’s Women’s Leadership Forum at the Newseum.

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Seth's Blog : Two kinds of loyalty

 

Two kinds of loyalty

The first kind of loyalty is the loyalty of convenience.

I'm going to look around, sure, but probably won't switch. Switching is risky, it's time consuming. Switching means a new account manager or moving my software or reprinting something. Switching means I might make a mistake or lose my miles or have to defend a new decision.

Corporations are getting ever better at building this sort of loyalty.

Then there's the other kind of loyalty. This is the loyalty of, "I'm not even looking."

This is the loyalty of, "I'm the kind of person that sticks with people who stick with me." This is the loyalty of someone who doesn't even want to know that there's a better deal somewhere else, because, after all, he's in it for the long haul.

The problem with the loyalty of convenience is that the customer is always tempted to look and look some more, and the vendor is always working to build barriers, barriers that don't necessarily increase satisfaction, but merely build a wall of hassle around the (now) trapped customer.

We don't have an common marketing term for this sort of feeling, but 'stuck' comes to mind.

The beauty of the second kind of loyalty, the loyalty of identity and satisfaction, is that the person who isn't even looking is committed, as committed to the relationship as the vendor is. You earn this sort of loyalty, you don't architect it.

You can only focus at creating on one sort of loyalty at a time, true?

       

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joi, 24 octombrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Australia Raises Debt-Ceiling to Avoid US-Like Crisis; Is the Debt Ceiling the Problem?

Posted: 24 Oct 2013 04:51 PM PDT

Here's an amusing story courtesy of the International Business Times: Australia Raises Debt-Ceiling to A$500bn to Avoid US-Like Crisis
Australia's government is increasing the country's debt limit by two thirds to avoid a potential fiscal crisis in the future, as it is projected to reach the current debt ceiling by the end of 2013.

Treasurer Joe Hockey said after a federal Cabinet meeting in Canberra on 22 October that the country will increase its debt limit by A$200bn (US$193bn, £120bn, €141bn) to A$500bn. Australia is projected to reach its current A$300bn ceiling in December.

"The Coalition Government will have to increase the debt limit for Commonwealth government securities to $500bn," said Hockey.

"We are increasing it to that level because I've been advised that on December 12, the current debt limit of $300bn will be hit."

He said the country's debt had been expected to peak at A$370bn, but recent trends revealed it will exceed A$400bn.

"The debt limit needs to be set so as to provide sufficient headroom to ensure there is stability and certainty for the financial markets about the government's capacity to finance its operations for the foreseeable future," Hockey said.

"We need not look any further than the recent events in the United States to realise how imperative stability and certainty is for confidence."

Australia's debt is only about 30% of its gross domestic product (GDP) at present, according to the International Monetary Fund (IMF). That compares to 92% for the UK and 106% for the US.

Therefore, an increase in its debt ceiling is not expected to be highly risky for the country.

Nevertheless, Hockey noted that the country would not target a substantial increase in its debt level, as it could lead to uncertainties.

"We are not going to allow ourselves to get into the position that the United States is in where there's tremendous uncertainty about the capacity of a country to live within its means," he told the Australian Broadcasting Corporation.
Debt Ceiling Not the Problem

Good Grief. The debt ceiling is not the problem. Spending is the problem.

The US is in trouble not because of failure to hike the ceiling. The US is in trouble because it spent so much it needed to hike the ceiling every year or so, for years on end.

Australia is falling into the same trap as the US, albeit more slowly. Australia's second problem is modeling actions based on clueless US politicians.

Treasurer Joe Hockey statements suggest he is as much an economic fool as his US counterparts.

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

Gold in India Sells for $100 or More Over Spot on Black Market (If You Can Find It)

Posted: 24 Oct 2013 11:51 AM PDT

Capital controls limiting imports of gold into India led to four easily predictable results:

  1. Short supplies
  2. Higher prices
  3. Flourishing black market
  4. Government decree did not reduce demand


For the story behind the story, please see Official Denials Run Rampant in India; "No Question" of Economic Crisis; Rupee Plunges to Record Low; Gold Coin Imports Banned.

Gold Coins Vanish, Melted to Make Jewelry

As a result of import restrictions and capitals controls Jewelers are melting whatever gold coins they have to sell more expensive jewelry, thus gold coins have vanished in India.
Gold coins will not be available this Dhanteras and Diwali season beginning October last week. This is because jewellers have decided not to sell coins, and instead divert them to jewellery-making to meet the shortage arising from the government's curbs on imports of the yellow metal.

Coin sales reach their peak during the Diwali season every year as corporates, businessmen and people buy coins for gifting purpose. Banks and organized players have already stopped selling coins.

"We won't be selling coins," says Bhaskar Bhat, Managing Director at Titan Company which owns the jewellery brand, Tanishq.

India was the top fabricator and consumer of gold jewellery in 2012, accounting for nearly one third of global fabrication and consumer demand. India and China together account for more than half of global gold jewellery fabrication and consumption demand.
Not Much of a Festival Season

Also consider Not Much of a Festival Season as Gold Runs Dry
In India's biggest bullion market, Mumbai's Zaveri Bazaar, gold dealers are busy -- not filling orders for customers, but busy avoiding phone calls because they don't have any gold to sell.

Battling a huge trade deficit and a weak currency, the government has taken various steps this year to make it harder and more expensive for Indians to get hold of gold, the biggest item on the country's import bill after oil.

Hardly any gold came in for two months until mid-September and industry is still feeling the pinch, especially now the festival season has started, a peak period for demand.

In the bazaar, jewellers wander around trying to get hold of a dealer who can find them gold right away , and wholesalers ask the same of banks. Retailers in half-empty showrooms try to dissuade customers from asking for immediate delivery.

"Even if someone wants 10 kg, we don't have the stock. So much so that we have stopped attending client calls," said Gautam Arora, a wholesaler, who ignored at least five phone calls during a 40-minute conversation with Reuters.

The government has set a record 10 per cent import duty on gold and imposed a rule that requires 20 percent of imports to be re-exported, meaning importers need to find a buyer who will guarantee those exports before bringing in any gold.

The complexity of the rules and sagging exports -- down 60 per cent this year -- have caused supplies for domestic use to dry up.

Turnover at RiddiSiddhi Bullions Ltd (RSBL), the country's largest bullion dealer with 110 employees, has dropped to 20-30 kg a day from about 300 kg since the new rules kicked in.

"This is due to the government policy. I don't know what they are thinking," RSBL Director Prithviraj Kothari told Reuters from his Zaveri Bazaar office, a gold plate on his desk showing he was crowned "Bullion King of India - 2013".

"Why do I have 110 people if I don't have any consignments of gold?

The shortage of the metal sent Indian gold premiums to more than $100 an ounce over London prices this month when demand far exceeded supply due to the Dussehra festival, one of several connected with harvests and invoking Lakshmi, the goddess of wealth.

The related festivals of Diwali and Dhanteras fall in the first week of November.

"New imports for domestic use could start in the next 10-15 days, which could coincide with Diwali and Dhanteras. But despite new imports, the supply situation will be very tight and premiums may even go up to $150," said Bachhraj Bamalwa, director at the All India Gems and Jewellery Trade Federation.

Premiums in other parts of Asia such as Hong Kong and Singapore were stable at less than $2 an ounce.

One side effect of the government measure will do nothing to improve the trade figures: in the six months from April, gold jewellery exports more than halved to $3.34 billion from $8 billion in the same period a year earlier.

Many suppliers are turning to smuggled gold, especially as that also avoids the 10 percent import duty. As a result, even smuggled gold commands a premium of $50 an ounce above London prices, according to the Bombay Bullion Association (BBA).
Instead of tackling the real problem (runaway inflation), India placed severe restrictions on gold imports.

A black market was the expected result, and that's exactly what happened.

Worse yet, importers and exporters dependent on the gold trade, as well as all their employees, are now hurting economically.

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

Security Founder John McAfee: "Obamacare is a Hacker’s Wet Dream"

Posted: 24 Oct 2013 09:38 AM PDT

Security founder John McAfee of McAfee Associates, a computer anti-virus company, reflects on Obamacare: "This Is A Hacker's Wet Dream".
NEIL CAVUTO: What do you make [of Obamacare]? Obviously, a lot of people have been focusing on the law but not really cognizant of the privacy part of the law, and how hackers could have a field day with it. Is it that bad?

JOHN McAFEE: Oh, it is seriously bad. Somebody made a grave error, not in designing the program but in simply implementing the web aspect of it. I mean, for example, anybody can put up a web page and claim to be a broker for this system. There is no central place where I can go and say, 'Okay, here are all the legitimate brokers, the examiners for all of the states and pick and choose one.'

Instead, any hacker can put a website up, make it look extremely competitive, and because of the nature of the system, and this is health care, after all, they can ask you the most intimate questions, and you're freely going to answer them. What's my Social Security number? My birth date? What are my health issues?

[CROSSTALK]

McAFEE: Well, here's the problem -- it's not something software can solve. I mean, what idiot put this system out there and did not create a central depository? There should be one website, run by the government, you go to that website and then you can click on all of the agencies. This is insane. So, I will predict that the loss of income for the millions of Americans who are going to lose their identities -- I mean, you can imagine some retired lady in Utah, who has $75,000 dollars in the bank, saving her whole life, having it wiped out one day because she signed up for Obamacare. And believe me, this is going to happen millions of times. This is a hacker's wet dream. I cannot believe that they did this.
McAfee is now a subsidiary of Intel. Click on the first link above for the history.

This story on Real Clear Politics came out a couple weeks ago, but I just saw it. I believe the risks described by McAfee are very real.

His estimate "this is going to happen millions of times" does seem a bit far-fetched.

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

Clueless Magoo's Crash Guarantee

Posted: 24 Oct 2013 07:43 AM PDT

Alan Greenspan, one of the biggest contrary indicators in the history of finance says Stocks Are 'Relatively Low' and Headed Upward
"In a sense, we are actually at relatively low stock prices," Greenspan, who guided the central bank for more than 18 years, said in an interview with Sara Eisen on Bloomberg Television today. "So-called equity premiums are still at a very high level, and that means that the momentum of the market is still ultimately up."

Greenspan said the stock market is "just barely above 2007" and the average annual increase in stock prices "throughout the postwar period" is 7 percent, which leaves room for a rise.

"Price-earnings ratios are not hugely up," he said. The market has "gone up a huge amount, but it's not bubbly," according to Greenspan.
Clueless Magoo

Bloomberg writer Daniel Akst discusses Greenspan's credibility in Greenspan's 'Map' Is Clueless Trip Through Bubble Land
If Alan Greenspan were Santa Claus, what's the last thing you'd want for Christmas?

Given his track record, a guide to economic forecasting would have to be the worst present he could bring.

Yet that's exactly what the former Federal Reserve Board chief delivers in his clueless new book, "The Map and the Territory." A guide to economic forecasting by Greenspan is about as credible as art history by Mr. Magoo.

Let's review. As Fed chairman until 2006, practically the eve of the financial crisis, Greenspan couldn't see the storm on the horizon.

Despite his mastery of the techniques described at somewhat numbing length in his book, he failed to draw any useful conclusions from a host of indicators that were pointing to trouble.

Historic Failure

"The Map and the Territory" pretends to tackle the subject of forecasting while saying next to nothing about the author's historic failure to reduce the risks leading to the crisis, which he calls "almost universally unanticipated."

Resorting all too freely to the first person plural, Greenspan describes the book as "an effort to understand how we all got it so wrong, and what we can learn from the fact that we did."

The remarkable thing is that Greenspan continues to get it wrong.

He acknowledges that banks ought to hold more capital but argues in effect that the real problem is too much government -- and too many entitlements, especially "social benefits" like Social Security and Medicare.

Federal Deficits

For someone so exercised about federal deficits, Greenspan is strangely silent on his own role in the Bush tax cuts, which might not have been adopted in 2001 (further cuts came in 2003) without his blessing for the general concept.

And there's the Great Recession, which might not have occurred had he recommended, while he was Fed chief, higher capital requirements for banks, better regulation of derivatives and a crackdown on subprime lending.

Clearly the author is worried about moral hazard, which occurs when firms or people are encouraged to take excessive risks because they know others will bear the consequences.

But this is an odd concern from the man whose actions as Fed chief gave rise to faith in the "Greenspan put," the notion that, while he was in office, the central bank would rush to float sinking markets with lower interest rates whenever they faltered.

"The Map and the Territory" is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.
Is Greenspan Sealing the Market's Fate?

Pater Tenebrarum was a tad bit early by not waiting for Greenspan's sequel, adequately described above as "clueless".

Had he known "The Map and the Territory" was in the works, I suspect he would have waited until now to ask the question he asked on March 16: Is Greenspan Sealing the Market's Fate?
The Third-Biggest Living Contrary Indicator of All Time Speaks Up

There once was a time when it was fair to say that Alan Greenspan was the biggest living contrary indicator of all time. Long before he became known to a wider audience, in early January of 1973, he famously pronounced (paraphrasing) that 'there is no reason to be anything but bullish now'. The stock market topped out two days later and subsequently suffered what was then its biggest collapse since the 1929-1932 bear market. That was a first hint that stock market traders should pay heed to the mutterings of the later Fed chairman when they concerned market forecasts: whatever he says, make sure you do the exact opposite.

More proof was delivered in 1996, when Greenspan bemoaned the 'irrational exuberance' in the stock market, just as it embarked on one of its biggest rallies ever. Then in 2000, Greenspan finally agreed that a 'new era' had indeed arrived; that investors according billions in market capitalization to companies that would never make a dime were acting perfectly rationally, and that there was surely no end in sight to the productivity miracle. It was the biggest sell signal he had yet produced.

The reason why we feel he must be relegated to third place is that since then, arguably two even bigger living contrary indicators have entered the scene: Ben 'the sub-prime crisis is well contained' Bernanke, and Olli 'the euro crisis is over' Rehn. Admittedly it is not yet certain who will be judged the most reliable of them by history, but in any case, when Greenspan speaks, we should definitely still pay heed.

As CNBC reports: No 'Irrational Exuberance' in Stocks Now

"Although blue-chip stocks are hitting all-time high after all-time high, former Fed Chairman Alan Greenspan told CNBC Friday that "irrational exuberance" is the last term he'd use to describe today's market. Greenspan said in a "Squawk Box" interview that stocks by historical standards are "significantly undervalued" even considering the recent moves higher. He added that the payroll tax increase didn't dent spending because of rising asset prices."

Is a crash imminent? After all, the 'Dow 36.000' guys are back as well, believe it or not. Here is James Glassman, shamelessly piping up again after leading countless investors down the garden path with his 1999 book:

"The Dow Jones Industrial Average set a record this week, but it's still far from the mark that economist Kevin Hassett and I forecast in our 1999 book, "Dow 36,000." We wrote in the introduction that "it is impossible to predict how long it will take" to get to 36,000. Then, in the same paragraph, we rashly made a guess anyway: "between three and five years." Today, the far edge of that time frame is clearly in reach. From its low of 6,547 on March 9, 2009, the Dow has risen 117 percent. Another 117 percent in four years would put it at 31,022, just 16 percentage points shy of the magic number."

Glassman offers a raft of excuses for why the forecast didn't pan out, but that is just telling us that he was never qualified to write this book. Anyone who didn't understand the dynamics of the credit and asset bubble that led to the historic market peak should have refrained from getting his unqualified opinions in print, if only for the sake of saving gullible investors from making the costly mistake of believing in this overly rosy outlook.

Incidentally, Glassman is correct when he says that it would be a good idea to enact economic policies conducive to economic growth, but he seems not to realize that this means that his renewed optimistic forecast is plainly contradicted by the economic policies that are actually pursued at present.
Stroll Down Memory Lane

Flashback September 11, 2007: I wrote No Greenspan, Conditions are NOT Like 1998
The Fed's Role in the DOTCOM Bubble

Acting in misguided fear of a Y2K calamity, the Fed stepped on the gas with unnecessary liquidity, having previously stepped on the gas to bail out Long Term Capital Management in 1998.

And after warning about irrational exuberance in 1996, Greenspan embraced the "productivity miracle" and "dotcom revolution" in 1999. Mid-summer of 2000 Greenspan believed his own nonsense, and right as the dotcom bubble started to burst, he started to worry about inflation risks.

The May 16 2000 FOMC minutes prove this.
The members saw substantial risks of rising pressures on labor and other resources and of higher inflation, and they agreed that the tightening action would help bring the growth of aggregate demand into better alignment with the sustainable expansion of aggregate supply. They also noted that even with this additional firming the risks were still weighted mainly in the direction of rising inflation pressures and that more tightening might be needed.

Looking ahead, further rapid growth was expected in spending for business equipment and software. ... Even after today's tightening action the members believed the risks would remain tilted toward rising inflation.
How could Greenspan have possibly been more wrong? Over the next 18 months CPI dropped from 3.1% to 1.1%, the US went into a recession and capex spending fell off the cliff.

The Fed's Role in the Housing Bubble

In 2001 Greenspan went overboard the other direction embarking on a campaign that eventually slashed interest rates to 1%, while embracing the miracle of derivatives, and encouraging consumers to get into ARMs along the way.

And right as the bubble was busting Greenspan dismissed the idea of a national housing bubble.

No National Housing Bubble

Flashback May 21, 2006
Greenspan says "Housing Prices Won't Fall Nationally".

History suggests that betting against Greenspan is the correct thing to do. Thus I mockingly talked about his call on May 27, 2006 in Greenspan Predicts Housing Bust.

Confronting Bubbles

As for "confronting bubbles", the Fed foolishly only watches (takes action on) consumer prices. Thus the Fed ignores expansion of credit when that credit fuels asset bubbles as opposed to prices of consumer goods.

The Fed could easily target credit with higher interest rates if it cared to, but it does not care to.

This is not a matter of attempting to identify bubbles in advance, this is a matter of attempting to identify credit conditions that create bubbles. And the fact is, runaway expansion of credit fuels one of two things (or both) in some combination: asset bubbles and/or consumer prices increases.
Fools Never Learn

Read that last paragraph again and again until it sinks in.

History rhymes. Instead of a runaway expansion of consumer credit, we now have a runaway expansion of fiscal stimulus from Congress, and a runaway expansion of money supply by central banks globally.

Succinct Historical Synopsis

  • In 1973 Greenspan said "There is no reason to be anything but bullish now" - The market topped that month, then crashed
  • In 1996 Greenspan warned of "Irrational exuberance" - The market, fueled by Greenspan's incompetent actions roared for four years
  • In 1999 Greenspan was extremely worried about Y2K - The programming rollout on January 1, 2000 was exceptionally smooth
  • In 2000 Greenspan fully embraced the internet productivity miracle - The dotcom bust soon began
  • In 2001 Fed minutes show Greenspan was worried about inflation - A month later the Fed was fighting deflation
  • In 2006 Greenspan said "Housing Prices Won't Fall Nationally" - Prices peaked summer of 2005, then crashed over the next seven years

Today Greenspan Says 

  • "In a sense, we are actually at relatively low stock prices"
  • "The momentum of the market is still ultimately up."
  • "The market has gone up a huge amount, but it's not bubbly."

No Guarantees

There are no guarantees in life, but that pronouncement is about as close as it gets from a contrarian point of view.

Facts show that Greenspan has been consistently wrong at every major economic turn in his entire career at the Fed and after.

The only thing he has been correct on is his unwavering support for free trade. And on that issue ironically enough, hardly anyone listens to him.

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