marți, 26 noiembrie 2013

Was There a November 14th Google Update?

Was There a November 14th Google Update?


Was There a November 14th Google Update?

Posted: 25 Nov 2013 03:18 PM PST

Posted by Dr-Pete

On the morning of Friday, November 15th, we woke up to a substantial one-day temperature spike on MozCast. Digging in, there were no signs of a glitch, and it seemed to hit across multiple IPs. The 30-day history looks like this:

Webmaster chatter seemed normal and Google has not confirmed an update, but soon other major flux-tracking tools showed one-day spikes. Here's the data from SERPmetrics:

Both SERPmetrics and SERPs.com (that graph is a bit less clear, due to an unusually low-flux day earlier in the month) show the spike on November 15th, but one-day shifts are common due to measurement differences in the three tools.

Did big sites win big?

The first thing I dig into when we see a temperature spike is a set of secondary metrics that look at large-scale trends across the data set. That morning showed a solid jump in the "Big 10," which simply represents the percentage of total search results in the set occupied by the top 10 domains (for that day):

The one day jump from 15.39% to 15.89% represents a 3.2% relative increase â€" it may not seem like a huge amount, but it's historically unusual. Wikipedia, Amazon, and eBay all had one-day gains in the 3-5% range.

Unfortunately, it's easy to jump to conclusions but much harder to interpret this kind of change. Some algorithm updates might benefit large brands, but it's just as often the case that an update penalizes low-quality sites, and the big brands simply end up filling the gaps. For example, if the #10 result on a SERP falls out, and the #11 pops up one position to fill that spot, the new #10 is more likely to be a big site with a large Google footprint than a small site.

Our larger data set (not currently public) set shows a similar trend. All I can say with certainty is: (1) this was a historically unusually one-day change, and (2) the "Big 10" metric is at now at a historical high (going back to April 2012). I have no reliable clues about the causality and what specifically changed to cause this increase.

What did Wikipedia win?

Since digging into high-temperature keywords didn't reveal any clear patterns, I thought it might be interesting to see where a big winner (like Wikipedia) picked up top 10 listings. In most of the cases I saw, the big domains didn't gain prime real estate, but simply picked up a top 10 result because another site fell out. For example, here are the top 10 on November 14th for "famous footwear store hours" (domains only):

  1. FamousFootwear.com
  2. FamousFootwear.com
  3. FamousFootwear.com
  4. FamousFootwear.com
  5. FamousFootwear.com
  6. FamousFootwear.com
  7. FamousFootwear.com
  8. MyStore411.com
  9. Wiki.Answers.com
Clear, this SERP was dominated that day by the main brand's site (in this case, individual store locations). On November 15th, though, it appears there was a shuffle in domain crowding:
  1. FamousFootwear.com
  2. FamousFootwear.com
  3. FamousFootwear.com
  4. FamousFootwear.com
  5. MyStore411.com
  6. Wiki.Answers.com
  7. OutletLocation.com
  8. Indeed.com
  9. Wikipedia.org
  10. Yelp.com
The main brand's site dropped from eight results to four, and Wikipedia simply picked up one of the newly opened spots. This domain crowding/diversity pattern didn't seem to hold up across the data set, but it does appear that the gains by big domains were primarily due to losses higher in the SERPs. In other words, big domains like Wikipedia and Amazon only picked up top 10 rankings because someone else fell out.

Was there a glitch?

Something else happened on November 14th that was a bit odd. I informally polled my Twitter followers about that day and got the following bit of information from Galen Ward:

Coincidentally, I had just been in the Moz Google Webmaster Tools account that morning and happened upon this (I didn't put two and two together until Galen's tweet):

I didn't think much of it at the time (temporary glitches happen), but it seems that multiple webmasters and SEOs got the same error on the same day. Is it possible that a bug on Google's end could cause large-scale ranking fluctuations? It depends a lot on the scope and nature of the bug. Last April, a Google bug caused a number of domains to be misclassified as parked, and the impact was large enough to cause noticeable ranking changes.

If this was simply an unexpected side effect of a bug, though, we'd expect a reversal. The temperature the next day or soon after would spike again, and the secondary metrics, like the Big 10 increase, would settle back to their former values. In this case, we've seen no such reversal.

Is Andy Kaufman alive?

When it comes to daily ranking changes, separating the signal from the noise is incredibly difficult. The morning of November 15th, we captured a change that illustrates just how dynamic Google has become (and is something I've wanted to capture in the wild for a while).

Around November 13th, TMZ broke a story that a woman claiming to be Andy Kaufman's daughter said that her father was still alive. Multiple news sources picked up on this story on November 14th. Early that morning, we captured the first page of results for "kaufman", which were as follows:

  • IMDB (Charlie Kaufman)
  • Wikipedia (Kaufman, TX)
  • Wikipedia (Andy Kaufman)
  • RobertKaufman.com
  • KaufmanCo.com
  • KaufmanCounty.net
  • KaufmanTX.org
  • Kauffman.org
  • Fandango.com (Kaufman Astoria Cinemas)

Google was viewing a search for "kaufman" as informational and generic, returning results for Andy Kaufman, Charlie Kaufman, cities named Kaufman, etc. A disambiguation box on the SERP even makes it clear that Google has trouble interpreting the query.

After the story about Andy Kaufman broke, the SERP changed dramatically:

  • CNN
  • IMDB (Charlie Kaufman)
  • CNN
  • Wikipedia (Kaufman, TX)
  • Fox News
  • KaufmanCounty.net
  • RobertKaufman.com
  • KaufmanCo.com
  • US Today
  • NY Daily News

Where there were no news-related organic results before, news articles now accounted for half of the top ten, including the #1 and #3 spots. You may have heard the term "QDF" (Query Deserve Freshness) in the SEO world. What's interesting here is that QDF is not something that's just on or off for any particular query. A query that was relatively static transformed overnight because of new information. In other words, Google decided in real-time that this informational query was now a news query, simply based on new data and content.

Is this the cause of the overall flux? No â€" it's very unlikely that a single event could move the needle. Even an event like 9/11, that had a huge impact on many people, is only going to be relevant to a small percentage of queries. Events like these simply go to show how dynamic any given query can be on any given day. In a case like this, the query isn't even historically high flux â€" it transformed overnight, and that transformation had nothing to do with algorithm updates.

So, what happened?

If it seems like I'm stalling, then, well â€" hey, is that Elvis?! One of the difficulties of retroactively explaining rankings fluctuations is that we typically can only look at the results themselves. This essentially means that we're measuring positions, position changes, and characteristics of the domains and URLs. This makes it easy to measure something like domain diversity but very difficult to profile something like a Penguin update, where the changes are due to characteristics of the individual sites and their link profiles.

We're also creeping into the holiday season â€" we've already seen a pattern of above average flux in the weekend before Thanksgiving. As we get into Black Friday, commercial SERPs naturally fluctuate, and it's hard to separate what Google is doing from changes due to competition and seasonality.

Whatever happened on November 14-15, it doesn't appear to have rolled back. The one-day spike is similar to a more traditional algorithm update, but that's about the best we have for now. If anyone has seen additional clues or has any follow-up on the DNS errors in Google Webmaster Tools, please leave a comment.


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Remarketing: How to Make Your Content Marketing and SEO up to 7x More Awesome

Posted: 25 Nov 2013 02:36 AM PST

Posted by larry.kim

Today, I'll share with you a case study on how we used remarketing to make our content marketing and SEO efforts up to seven times more effective. In the last two years, we've moved beyond just doing SEO to kicking some major online marketing butt and I'd love to show you the lessons we've learned in the time it took to get here. Hopefully you can cut your own learning curve and get right to it!

Rockin' SEO and the company no one knows

WordStream's website launched late in 2008. My company is pretty much your typical B2B brand using content marketing and SEO to drive leads for the business. Today, our blog gets around half a million visitors each month; we've seen a compound monthly growth rate of 8.4% every month, for the last five years!

Here's what that looks like:

At first glance, you might consider this a huge SEO success (doesn't everything look better if you only take a glance?). As you might expect though, we've faced a few challenges over the last few years:

Issue 1: Low visitor engagement

Here's what it looked like over a 60-day period last year, back when we had pretty weak user engagement metrics:

  • Just 1.9 pages per visit.
  • An average visit duration of 1 minute and 34 seconds.
  • A new visitor ratio of 79.2%.

We knew we could do better than this… yet we weren't.

Issue 2: Low conversion rate

Our second challenge had to do with low conversion rates from website visitors to offer sign-ups. Like many other companies that do SEO/Content Marketing, we're hoping to turn some of that traffic into offer sign-ups for things like white papers or free trials. We want to get interested prospects into our system so we can communicate with (and market to) them on a regular basis.

Unfortunately, our conversion rates were pretty low--just under 2%--as people were bouncing away and often not returning. I don't care how great you are at getting eyes on your content; if you're not converting, it's worthless.

Issue 3: Virtually no branded searches

This one was probably our biggest problem. In organic search, only 3% or so of our approximately half a million monthly organic searches were branded searches. Check out this snapshot from last year, back when "not provided" was only around 10% and it was still possible to do this kind of analysis.

(Let's just stop here briefly, shall we? We must have a moment of silence for our lost organic keyword data.)

Okay, we're back… have a look:

I'm sure we've all seen our share of clueless clients, where 95% of the organic search traffic is branded search. I wouldn't want to see all branded search; it means your SEO sucks if you're only appearing in front of people who are already looking for your business by name.

My site was the exact opposite. We were driving hundreds of thousands of visits per month via SEO and only 3% of that came from branded search. What does that mean? It meant our SEO had gotten too far ahead of the brand.

On the one hand, it's great to have growing SEO traffic numbers. However, as I pondered the issues aboveâ€"low engagement, low conversion and very little branded searchâ€"I realized the situation was more like:

the best internet marketing company that nobody ever heard of

(image via Flickr)

Essentially, we were just driving tons of traffic to my link-juiced up domain using the amazing, optimized content we'd created, but people wouldn't stay that long, convert, or remember the company brand.

That's not a good thing at all. It's pretty anti-climactic, actually; you do the work of creating killer content, optimizing it for both users and search, get it out the door and in front of the right people… and they still have no idea who you are. We had to stop throwing money out the door. We couldn't just be SEOs anymore.

Remarketing primer for the uninitiated

Remarketing is basically the process of tagging people who visit your site, then targeting them with banner ads after they leave your site. No, this is not otherwise known as stalkingâ€"not if you're doing it right, anyway. Remarketing can be a very powerful tool, if you avoid crossing over into the creep factor.

How Remarketing Works

It gives you the opportunity to appear in front of people who had already expressed an interest in your brand as they go about their business on the web. They could be checking their email, reading the news, watching a YouTube video… and there you are! Reminding them of that thing they were going to do when they checked you out a few days ago.

Why remarketing?

We did a lot of thinking about our issues and how to fix them. We were totally killing it with our SEO and driving traffic like no one's business, but clearly, that wasn't enough.

Remarketing was actually one of the first potential solutions I considered seriously, because by definition, remarketing provides opportunity to:

  • Turn abandoners/bouncers into leads
  • Increase brand recall (and thus increase branded searches)
  • Increase repeat visitor rates and engagement
  • Increase the effectiveness of SEO and content marketing

What we needed was to better connect with the people who were interested in visiting us in the first place. Obviously, we weren't excelling at grabbing and keeping their attention, but then, we weren't getting the chance to follow up with this mass of search traffic.

Remarketing would allow us a second chance to make that first impression, if you will (and even a third, and a fourth). We had to get past being forgettable. We had to get sticky.

And why remarket with Google, you ask? Why not? Quite simply, they were the largest and most recognized marketplace going; they just made sense for us. The Google Display Network is one of the largest remarketing networks in the world, with over two million sites in the network. It also includes AdMob for mobile targeting, meaning you can get your ads to show up in Angry Birds and other mobile apps.

the reach of the Google Display Network

Generally you can find your tagged site visitors on the network many times per day, several days per week, and across many different sites. On average, you'll be able to connect with:

Soon, Google DoubleClick users will also be able to buy retargeting ads on Facebook, which is proving an incredibly effective platform for the tactic.

Remarketing as a Conversion Rate Optimization Tool

According to research from Forrester, 96% of people who visit your site don't convert to a lead or sale. And 70% of people who put stuff in a shopping cart leave without placing an order. These people really are the low hanging fruit and from that perspective, I view remarketing as an effective conversion rate optimization toolâ€"sort of.

average conversion rates

This was another major reason retargeting made sense for us. We really needed that help with brand recognition and getting people back to our site to convert (or at least get back on site and connect so we could nurture the lead).

So, with the decision made to at least try it out and test, we got started.

Important things to consider when starting remarketing

In remarketing, you usually need to create different audiences to remarket so you can adjust your bidding strategy and your ads. For example, we created one audience for people who visited our blog, one for home page visitors and another for people who visited one of our free tools (e.g.: Our Google AdWords Grader for PPC auditing). We can assume each of these high-level groups was looking for different types of information.

This basic segmenting allowed us to show different ads, depending on which section of our site they visited.

A secondary benefit was that we could bid more aggressively (get more impressions, higher more prominent ad positions) for visitors to our AdWords Grader, which is worth way more to us as a business than someone who visits our blog (because we blog about all sorts of random stuff that has nothing to do with WordStream there, intent is far lower, if at all).

Another cool remarketing strategy for content marketers is to define audience categories based on the different post categories in your blog. If you already have a ton of blog content that is classified by topic, leverage those existing classifications in your remarketing audience definition strategy.

Also, consider membership duration; that is, how long do you want to keep chasing these people around the Internet? I set ours to 30-60 days, which is pretty aggressive (you might even call it spammy). A shorter membership duration would improve cost per conversion metrics, since people are less likely to convert as more time passes. Also, consider the difference you might see between B2C and B2B. You know the length of your average sales cycle and will have to test to see if it's worth going beyond that time, or if they're apt to have completed a purchase.

Remember:

  • Create audiences, groups of visitors based on the pages they visited or other factors.
  • Bid more aggressively on visitors who showed greater intent.
  • Segment your audiences based on the different content topics on your site
  • Test against the length of your sales cycle as a starting point to finding the right audience membership duration.

Killer ad creative strategy for remarketers

Now that we've tagged visitors and segmented them into different audiences, the key is to create cool ads in different formats that:

  • Drive a call to action.
  • Feature branding or images that will improve brand recall.

Lousy ads have sunken many remarketing efforts, so the key is to keep A/B testing with different ad designs. You want to have a high CTR (ideally more than 0.4%) and find the most memorable copy and image combinations, since one of the objectives here is to improve brand recall. You know you have finally "made it" when you get people tweeting your ads! Like this cute little puppy dog!

Another company killing it with their remarketing ads right now is none other than Moz, who has some of the cutest remarketing ads featuring the amazing Roger Mozbot!

Remarketing results 18 months out

We started our remarketing efforts early in Q1 2012, just over 18 months ago. How are things going today? Based on the title of the post, you know this was the best move we could have made, but how big was the impact?

Impact on brand recall

One of the biggest issues I had was poor brand recall - that a measly 3% of my organic searches were branded searches. Unfortunately, the whole keyword (not provided) mess makes it pretty much impossible to trend this branded searches over time [shakes fist at Google], however a proxy for brand recall is direct traffic. Meaning, to the extent that you're building your brand, you would expect more people to visit your website directly, as opposed to stumbling upon your SEO'ed content. Here's what my direct traffic looks like over last 6 years.

Impact on repeat visitor rate

Earlier, I mentioned that last January, we had a 20% returning visit rate. Today, it's more like a 33% of our visitors are repeat visitors. That's a massive over 50% improvement. We love to see the steady increase in repeat visitors (decrease in new visitors) over time.

Impact on user engagement and conversion rates

Check THIS out. Remember that ridiculous 1 minute and 33 second average visit duration? Today, it's up 300% and is approaching 5 minutes. Furthermore, our website visitor-to-lead-form-submitted conversion rates are up 51%!

It's important to note there was one other major factor that helped us here with the huge increase in visit duration and that was to embrace longer form content. Both were important for the overall strategy and I'll write about that in a future post.

Repeat visitors +50%, conversion rate +51%, and and time on site +300% = 7x more awesome!

A few closing notes on our remarketing strategy:

Basically, we buy a truckload of impressions ever month. Around 44 Million of them per monthâ€"take a look belowâ€"I allocate my PPC budget 50/50 between search and display remarketing.

Why so much remarketing? At this point, we're already generating hundreds of thousands of visitors to the site every month via SEO and content marketing, so it's worth that much more to the business to convert the organic traffic we're getting. I think this is very common among sites that do SEO well.

As we've gotten better and better at driving traffic via SEO, our PPC search strategy today is much more about getting additional ad space coverage around a very narrow set of high commercial intent keywords, which have lots of ads crowding out the organic results.

It's important to note that my "7x More Awesome" metric was our ROI from remarketing as we specifically sought to improve engagement rates, brand recall and conversion rates - if you choose to test remarketing for your business, the ROI will depend on your goals and objectives.

Remarketing: moving beyond SEO towards building your brand

In summary, SEO is a great traffic acquisition method, but by definition, you're going after people who are unfamiliar with your brand (since if they knew where to get whatever they were looking for, they would have directly navigated to your site).

In order to grow your business into a more mature company, you need to go beyond just SEO and build your brand!

Remarketing is an incredibly effective way to leverage and capitalize on your SEO and content marketing investments to build:

  • more repeat visitors,
  • more brand recall (branded searches, direct traffic),
  • more engagement (pageviews per visit, time on site, lower bounce rates)
  • and more conversions/leads/sales.

Personally, I think it's crazy to be doing SEO without at least some remarketing. No, it's not free, but neither is SEO/Content Marketing. The point is to understand where each tactic is most effective and how they work best together to drive audiences, then convert/retain to get way more bang for your buck. Like Rand has said, we can't just be SEOs anymore!


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Seth's Blog : Perfection or exploration

 

Perfection or exploration

In an organization built around perfection, you need to push people to say, "Bad news, I made a mistake." Only by surfacing mistakes can the organization stamp them out.

In an organization built around exploration, on the other hand, people need to say, "Good news, I made a mistake." Only by seeking things that don't work will the group end up exploring.

In both situations, people don't want to speak up, because we've been taught that mistakes should be hidden. In both situations, though, hiding them is the very worst option.

       

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luni, 25 noiembrie 2013

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Encrypt Everything, Store Nothing, Leave No Trace! (Dissolving Messages, Wickr, Snapchat)

Posted: 25 Nov 2013 01:14 PM PST

US corporations like Google, Facebook, and Microsoft benefit from "safe harbor" treaties with the US that allow those companies exemption from European privacy rules.

Then the NSA and FBI came along and forced those companies to put in "back doors" so that nothing is private. 

In the latest 100% believable accusation, EU accuses US of improperly trawling citizens' online data. In response, Europe is threatening to end the safe harbor laws.
Brussels is to warn Washington that US tech companies risk losing their exemption from privacy rules unless the US changes the way it treats EU citizens' online data.

A European Commission review of the "safe harbour" pact that allows US technology groups such as Google, Facebook and Microsoft to operate in Europe without EU oversight will conclude that Washington has improperly forced US companies to hand over European customers' data. It also says that breaches of the data deal have given US tech companies a competitive advantage over European rivals. 

Although the review, which will be unveiled on Wednesday, stops short of calling for the safe harbour agreement to be scrapped, its wording signals that the EU will move in that direction unless the US changes the way that it uses data held by companies on EU citizens.

A scrapping of the safe harbour deal is one of the most formidable weapons the EU has in its arsenal to punish the Obama administration after claims of snooping on Europeans by the National Security Agency.

Such a move would wreak havoc for any US tech company doing business in Europe – especially Google, Facebook and Microsoft, which rely on the agreement to transfer customers' data seamlessly between countries.

Ending safe harbour and subjecting US companies to European privacy laws would put them in a legal bind over NSA requests for information about European citizens. Under US law they would still be forced to hand over the information, provided the request was backed by an order from the secret foreign intelligence surveillance court but doing so would breach their extra responsibilities in Europe.

Internet companies say the conflict would force them to ringfence EU operations and hold data about the bloc's citizens in new legal entities there, creating separate islands of data that would lessen the efficiency of their operations and risk balkanizing the internet into separate regional networks.
You've Got "Unsecure" Mail

In an attempt to circumvent NSA spying, a fast growing Russian internet company, Mail.Ru seeks US expansion.
Russia's largest internet company is expanding into the US, trying to lure customers by keeping the data from its services offshore.

Mail.ru, which has more monthly users than any other Russian website, is targeting the US with a suite of mail and messaging apps under the My.com brand as it tries to crack what its chief executive Dmitry Grishin calls "the most competitive and most difficult market that has ever existed".

Mr Grishin said the data centres for its US services would be based in the Netherlands, which he said was a "good neutral place" outside of the US and Russia that was "very liberal" and "respected globally".

The Netherlands has robust data protection laws and a broad definition of what constitutes personal data, as well as some large data centres. However, some privacy experts say keeping the data offshore would not be enough to stop the NSA accessing it.

Jeff Chester, executive director of the Center for Digital Democracy in the US, said the data may be more secure in Europe but the problem was it had to be shipped from the US.

"I don't think it keeps it from the NSA at all because the data are collected here and shipped to the cloud, it doesn't make a difference where it goes," he said. "The NSA can access it during the transportation process."

James Lewis, a security expert at the Center for Strategic and International Studies in Washington, said: "The location of the server makes absolutely no difference, particularly for Russian companies that have very close relations with their security services. Ask Snowden if he feels like his email is safer."
Encrypt Everything, Store Nothing!

Mail.Ru is not the answer. At some point the data is unencrypted, and accessible to NSA snoops. Enter Wickr, a secure messaging app, that stores nothing and at no point in routing is there an unencrypted message.

Wickr, has already received a request from the FBI for a back door. Thankfully, the company cannot provide one because it stores no data.

The Financial Times reports US spying fuels popularity of secure messaging app Wickr.
Wickr, the secure messaging app that positions itself "halfway between Snapchat and Snowden", is set to raise more funds and launch a major update on Monday after its popularity soared following revelations of a US mass surveillance programme.

The Silicon Valley start-up enables encrypted peer-to-peer communications from email to instant messaging while keeping no data whatsoever. It plans to rival Skype by rolling out secure and private international video calling next year.

Nico Sell, co-founder and chief executive of Wickr, said the year-and-a-half-old company had seen an extreme spike in interest after revelations about the National Security Agency's surveillance programme were published earlier this year.

Wickr works by providing connections between message senders, which are not stored on any central server. Ms Sell said the FBI had already asked for a back door to get information for law enforcement but because the company holds no data, there was not even a way of co-operating.

"I didn't want to be responsible for securing everyone's gold – because that's impossible," she said. As a hacker who helps organise one of the most important hacker conventions of the year, she knew nothing was foolproof. The sender can set how long he or she wants the message to stay on the recipient's computer before deleting itself.

Wickr, which has been downloaded 1m times, is free but will begin to offer advanced subscriptions and in-app purchases next year.
Wickr vs. Snapchat

Snapchat is a messaging service that provides text and photo messages that dissolve in a few seconds. The Wall Street Journal reports Snapchat Spurned $3 Billion Acquisition Offer from Facebook.
Snapchat, a rapidly growing messaging service, recently spurned an all-cash acquisition offer from Facebook for close to $3 billion or more, according to people briefed on the matter. Evan Spiegel, Snapchat's 23-year-old co-founder and CEO, will not likely consider an acquisition or an investment at least until early next year, the people briefed on the matter said. They said Spiegel is hoping Snapchat's numbers – of users and messages – will grow enough by then to justify an even larger valuation, the people said.

Snapchat specializes in ephemeral mobile messages, including text or photographs, that disappear after a few seconds. The service has not generated any revenue, but is especially popular among teenagers and young adults, who use the app to send messages to friends.

Facebook is interested in Snapchat because more of its users are tapping the service via smartphones, where messaging is a core function. Facebook has rapidly increased the share of its revenue coming from mobile advertising, but said last month that fewer young teens were using the service on a daily basis.

Tencent, a diverse Internet company, owns WeChat, a major messaging service in China, and has a stake in KaKao, a popular South Korean app. It was vying to lead a group of investors that had offered to invest $200 million in Snapchat at a valuation of roughly $4 billion.
Meaning of $3 Billion

Snapchat has no profit and no revenues. Last year it was reportedly worth $100 million. Now it is worth $3 billion.

I cannot fathom turning down an all cash offer of that amount. Isn't $3 billion enough to do whatever you want for the rest of your life? Would $10 billion make one happier? Is the race on to see what deal gets valued at $100 billion? $1 trillion?

Wickr Business Model

Leaving philosophical questions aside, Let's take a closer look at the model of Wickr straight from its website.
The Internet is forever.
Your private communications don´t need to be.

Wickr is a free app that provides:

  • Military-grade encryption of text, picture, audio and video messages
  • Sender-based control over who can read messages, where and for how long
  • Best available privacy, anonymity and secure file shredding features
  • Security that is simple to use


"Wickr - an iPhone encryption app a 3-year-old can use."

New York Times: "There is no reason your pictures, videos and communications should be available on some server, where it can easily be accessed by who-knows-who, or what service, without any control over what people do with it."
Wickr vs. Silk Road

The government shut down "Silk Road", but that model had a fatal problem. It stored data.


From the Wickr privacy policy...

  • We use military-grade encryption. Our encryption is based on 256-bit symmetric AES encryption, RSA 4096 encryption, ECDH521 encryption, transport layer security, and our proprietary algorithm.
  • We canʼt see information you give us. Your information is always disguised with multiple rounds of salted, cryptographic hashing before (if) it is transmitted to our servers. Because of this we donʼt know — and canʼt reveal — anything about you or how you use the Wickr App.
  • Deletion is forever. When you delete a message, or when a message expires, our "secure file shredder" technology uses forensic deletion techniques to ensure that your data can never be recovered by us or anyone else.
  • You own your data. We do not share or sell any data about our users. Period.
What Information Does Wickr Collect, and How Is It Used?

We are committed to limiting our collection of your information to what is necessary to provide you with our Services.

We only collect information from users who create Wickr Accounts. You must create a Wickr Account to use the Wickr App.

What We Donʼt Collect:

Equally important to us is the information we donʼt collect. We will NEVER collect any location information or have access to the contents of the communications you send using the Wickr App. After messages are deleted (or after they expire), they are forensically deleted and are not retrievable by us or anyone else. (Remember, however, that if you send a Wickr message to another Wickr user, that message might remain on their device even after you delete it from yours, depending on the value you set for the self-destruct time of that message.)
Leave No Trace!

I commend any app or any service that stops NSA spying in its tracks. But don't blame me or Snowden if such services become used by crooks, or worse.

Were it not for the massive, unwarranted spying, people would not be so paranoid as to demand these services in the first place.

The end result is as expected: Governmental spying, back doors, denials, and loss of the constitutional right to privacy has made us less secure than before.

That is precisely what the loss of freedom always does!

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

Majority in U.S. Say Healthcare Not Government's Responsibility

Posted: 25 Nov 2013 10:30 AM PST

By a 56 to 42 margin, Gallup reports Majority in U.S. Say Healthcare Not Government Responsibility.

Question: Do you think it is the responsibility of the federal government to make sure all Americans have healthcare coverage, or is that not the responsibility of the federal government?



No Responsibility by Political Party




Percentage Point Change Since 2000

  • Since 2000, the share of republicans who say healthcare is not the responsibility has increased from 53% to 86%, a rise of 33 percentage points.
  • Since 2000, the share of independents who say healthcare is not the responsibility has increased from 27% to 55%, a rise of 28 percentage points.
  • Since 2000, the share of democrats who say healthcare is not the responsibility has increased from 19% to 30%, a rise of 11 percentage points.

Percentage Point Change Since 2006

  • Since 2006, the share of republicans who say healthcare is not the responsibility has increased from 57% to 86%, a rise of 29 percentage points.
  • Since 2006, the share of independents who say healthcare is not the responsibility has increased from 25% to 55%, a rise of 30 percentage points.
  • Since 2006, the share of democrats who say healthcare is not the responsibility has increased from 10% to 30%, a rise of 20 percentage points.

In 2006, the overall share was 69% to 28% in favor of the view that healthcare was the responsibility! Now it is 56% to 46% against.

This is a startling change in sentiment in 7 years, especially among independents.

Gallp comments "It is possible that this sharp change has been caused by a politicization of the issue as it became a major part of Obama's campaign platform, and as he and other Democratic leaders pressed for and passed the ACA, sometimes called Obamacare, in 2010."

However, a close look at the timeline suggests Obamacare cannot be the blame for the bulk of the move. Between 2006 and 2009 the percentage changed from  69% to 28% in favor to 50% to 47% against. Since 2009, the sentiment change has been in the same direction (against the healthcare mandate), but the percentage point move was much smaller.

Something happened between 2006 and 2009. What was it? Housing collapse? Demographics? Boomer retirement? Medicare seen as "I got mine. I waited. You can wait too?"

The latter would require an illogical disassociation between Medicare and government sponsored healthcare.

Regardless of what happened, politically speaking, Obamacare came at a last-chance now-or-never point with public opinion split nearly 50-50.

For now, it's waiting time. The next presidential election will determine what major changes in healthcare are coming.

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

Hussman's Open Letter to the Fed; The Problem with Bubbles; Textbook Pre-Crash Bubble; Reflections on Not Chasing Bubbles; Integrity vs. Respect

Posted: 25 Nov 2013 01:22 AM PST

John Hussman's last three weekly emails have been outstanding. Let's take a look at a couple short snips from the first two articles and then a longer snip from his letter to the Fed.

Textbook Pre-Crash Bubble

November 11: Textbook Pre-Crash Bubble by John Hussman

Hussman: "The problem with bubbles is that they force one to decide whether to look like an idiot before the peak, or an idiot after the peak."

This is exactly how I have felt for two years running. It reminds me of 1999-2000 when tech stocks put on that last big rally. Avoiding a bubble is incredibly hard to do, and this one has been exceptional.

Here is a chart from the article with Hussman's comments.
Though I don't believe that markets follow math, it's striking how closely market action in recent years has followed a "log-periodic bubble" as described by Didier Sornette (see Increasingly Immediate Impulses to Buy the Dip).



A log periodic pattern is essentially one where troughs occur at increasingly frequent and increasingly shallow intervals. Frankly, I thought that this pattern was nearly exhausted in April or May of this year. But here we are. What's important here is that the only way to extend that finite-time singularity is for the advance to become even more vertical and for periodic fluctuations to become even more closely spaced. That's exactly what has happened, and the fidelity to the log-periodic pattern is almost creepy. At this point, the only way to extend the singularity beyond the present date is to envision a nearly vertical pre-crash blowoff.

At this horizon, even "buy-and-hold" strategies in stocks are inappropriate except for a small fraction of assets. In general, the appropriate rule for setting investment exposure for passive investors is to align the duration of the asset portfolio with the duration of expected liabilities. At a 2% dividend yield on the S&P 500, equities are effectively instruments with 50-year duration. That means that even stock holdings amounting to 10% of assets exhaust a 5-year duration. For most investors, a material exposure to equities requires a very long investment horizon and a wholly passive view about market prospects.
Hugh Hendry Throws In Towel

On November 22, InvestmentWeek reported long-time bear Hugh Hendry threw in the towel. 'I can't look at myself in the mirror': Hendry reveals why he has turned bullish
Speaking at Harrington Cooper's 2013 conference, Hendry said he is no longer fighting the "two-way feedback loop" which is continuing to boost risk assets.

"I can no longer say I am bearish. When markets become parabolic, the people who exist within them are trend followers, because the guys who are qualitative have got taken out. I have been prepared to underperform for the fun of being proved right when markets crash. But that could be in three-and-a-half-years' time."

"I cannot look at myself in the mirror; everything I have believed in I have had to reject. This environment only makes sense through the prism of trends."
Trend Is Your Friend Until It Changes

Hendry is now looking for 'auto-correlations' that benefit from this feedback loop. "You have got to be in things that are trending," says Hendry.

Why Now?

The market has been trending ever since March 2009. There were a few pullbacks along the way, but every one was bought with vigor. Does that mean the next one will be bought?

Hardly. And why should it?

My friend Pater Tenebrarum at the Acting Man blog commented via email ...

"Hendry's change in stance is akin to Druckenmiller covering all his shorts in Internet stocks in November of 1999 and going long tech. The internet stock shorts he covered topped out two weeks later (they topped well before the Nasdaq did), the Nasdaq's final high came in early March, about 3 months later. Thereafter, an 85% decline in the index - and 3/4 of the internet stocks in which Druckenmiller covered shorts eventually went to ZERO, while the remainder fell between 90% to 99%."

Hendry is aware, but unconcerned about that possibility.

Said Hendry ... "I may be providing a public utility here, as the last bear to capitulate. You are well within your rights to say 'sell'. The S&P 500 is up 30% over the past year: I wish I had thought this last year. Crashing is the least of my concerns. I can deal with that, but I cannot risk my reputation because we are in this virtuous loop where the market is trending."

Wow. Given valuations, crashing should be everyone's big concern. But if it was, prices would not have gotten this ridiculous in the first place.

Reflections on Not Chasing Bubbles

November 18: Chumps, Champs, and Bamboo by John Hussman
"The seed of a bamboo tree is planted, fertilized and watered. Nothing happens for the first year. There´s no sign of growth. Not even a hint. The same thing happens – or doesn´t happen – the second year. And then the third year. The tree is carefully watered and fertilized each year, but nothing shows. No growth. No anything. Then the bamboo tree suddenly sprouts and grows thirty feet in three months." ― Zig Ziglar

This story is more than a quote about persistence – it's actually a reasonable description of risk-managed investing.

At bull market peaks, it often seems that the market is simply headed higher with no end in sight, and "buy-and-hold" appears superior to every alternative. Meanwhile, the reputation of value-conscious investors and risk-managers goes from "champ" to "chump." Then, the bamboo tree suddenly sprouts, and the entire lag is often replaced by outperformance in less than a year. Only after the fact does the reputation of risk-managed strategies surge from "chump" to "champ." By then, it's unfortunately too late to be of help to many investors who capitulated in frustration at the peak.

As Jeremy Grantham at GMO has observed, "we often arrive at the winning post with good long-term results and less absolute volatility than most, but not necessarily with the same clients that we started out with."
Hussman's Open Letter to the Fed

November 25: An Open Letter to the FOMC: Recognizing the Valuation Bubble In Equities by John Hussman

The chart below is from one of the best tools that the Fed offers the public, the Federal Reserve Economic Database (FRED). The chart shows the ratio of corporate profits to GDP, which is presently at a record. The fact that profits as a share of GDP are more than 70% above their historical norm should immediately raise a question as to whether current year earnings or next year's projected "forward earnings" should be used as a sufficient statistic for long-term cash flows and equity market valuation without any further reflection. Then again, more work is required to demonstrate that such an approach would be misleading. We're just getting warmed up.



A simple way to see the implications of the present elevation of the profit share is to relate the level of profit margins to subsequent growth in profits over a reasonably "cyclical" horizon of several years. Remember, when one values equities, one is valuing a long-term stream, not just next year's earnings. Investors taking current-year or forward-year profits as a sufficient statistic should be aware that high margins are reliably associated with weak profit growth over subsequent years.



The next relevant question is to ask why profit margins are presently so high. One might argue that the profitability of companies has achieved a permanently high plateau. Despite historical mean-reversion in profit margins (which tend to collapse over the full course of the business cycle), maybe this time is different. As it happens, we can relate the surfeit of corporate profits in recent years rather precisely to the extraordinary combined deficits of the household and government sectors during the same period. ....

Corporate profits as a share of GDP are nearly the mirror image of deficits in the household and government sectors. A simple way to think about this is that dissaving in both sectors helps to support corporate revenues and limit the need for competition, even when wages and salaries are depressed. It follows that most of the variability in corporate profits over time is driven by mirror image variations in the household and government sectors. ....

The fact is that valuation measures driven by single-period earnings (whether trailing earnings or forward operating earnings) are poorly correlated with subsequent market returns, mainly because they impose the counterfactual assumption that profit margins can be held constant over time.

Though Fed officials including Alan Greenspan and Janet Yellen seem attracted to the seemingly elegant simplicity of these "equity risk premium" models, they seem somehow oblivious to the fact that they don't actually work.
Why is the historical record of these simple "equity risk premium" estimates such a cacophony of noise? The answer should be immediately apparent. It turns out that the error between these estimates and actual subsequent 10-year S&P 500 total returns (in excess of 10-year Treasury yields) has a correlation of 0.86 with – you guessed it – profit margins. With profit margins at the highest level in history, the record suggests that these models are grossly overestimating prospective equity returns at today's all-time stock market highs.  Unfortunately, this evidence also suggests that the faith expressed in these "equity risk premium" estimates by Janet Yellen and others is likely to coincide with their most epic failure in history.

My strong disagreement should not be confused with disrespect, and none is intended, but wasn't it Janet Yellen who in October 2005, at the height of the housing bubble, delivered a speech effectively proposing that monetary policy could mitigate any negative economic consequences of a housing collapse, and arguing that the Fed had no role in preventing further housing distortions? Given the lack of concern with the present elevation of the equity markets, these remarks from 2005 have a rather ominous ring in hindsight:

"First, if the bubble were to deflate on its own, would the effect on the economy be exceedingly large? Second, is it unlikely that the Fed could mitigate the consequences? Third, is monetary policy the best tool to use to deflate a house-price bubble? My answers to these questions in the shortest possible form are, 'no,' 'no,' and 'no.'"

The reason that the Fed does not see an "obvious" stock market bubble (to use a word regularly used by Governor Bullard, as if to imply that misvaluations cannot exist unless they smack their observers with a two-by-four) is because while price/earnings multiples appear only moderately elevated, those multiples themselves reflect earnings that embed record profit margins that stand about 70% above their historical norms.

We can demonstrate in a century of evidence that a) profit margins are mean-reverting and inversely related to subsequent earnings growth, b) margin fluctuations are largely driven by cyclical variations in the combined savings of households and government, and importantly, c) valuation measures that normalize or otherwise dampen cyclical variation in profit margins are dramatically better correlated with actual subsequent outcomes in the equity markets.

If one examines the stocks in the S&P 500 individually, the median price/revenue multiple is actually higher today than it was in 2000 (smaller stocks were more reasonably valued in 2000, compared with the present). This is a dangerous situation. In this context, the dismissive view of FOMC officials regarding equity overvaluation appears misplaced, and seems likely to be followed by disruptive financial adjustments.

One obtains a similar view, with equal historical reliability, from the ratio of nonfinancial equity capitalization to nominal GDP, using Federal Reserve Z.1 Flow of Funds data. On this measure, equities are already beyond their 2007 peak valuations, and are approaching the 2000 extreme. The associated 10-year expected nominal total return for the S&P 500 is negative.
Fed Policy

Hussman concludes with a discussion on Fed policy ...
The policy of quantitative easing has run its course. It undermines planning, as every economic decision must be made in the context of what the Federal Reserve may or may not do next. It starves risk-averse savers, the elderly, and the disabled from interest income. It lowers the bar for speculative, unproductive, low-covenant lending (as it did during the housing bubble). It relaxes a constraint that is not binding – as there are already trillions of dollars in idle reserves at U.S. banks, on which the Federal Reserve pays interest both to keep them idle and to avoid disruptions in short-term money markets. It undermines price signals and misallocates scarce savings to speculative pursuits. It further skews the distribution of wealth, and while the extent of this skew has a scarce chance of persisting, the benefits of any spending from transiently elevated stock market wealth will accrue to primarily to higher-income individuals who are not as constrained as the millions of lower-income, low-asset families hoping for some "trickle-down" effect. We have seen numerous variants of this movie before, and we should have learned the ending by now.

Importantly, the magnitude of the "wealth effect" on employment is dismally small. Even if the entire relationship between stock market fluctuations and employment fluctuations was causal and one-directional, it would still take a roughly 40% advance in the stock market to draw the unemployment rate down by 1%. Unfortunately, price advances do not create the underlying cash flows to support them, so the strategy of manipulating stock prices higher also involves a piper that must be paid.

The intent of this letter is not to criticize, but hopefully to increase the mindfulness of the FOMC as to historical evidence, the strength of various financial and economic relationships, and the potentially grave consequences of further relaxing constraints that are not binding in the first place.
Integrity vs. Respect

In the opening paragraph, Hussman, stated (to the Fed) "I don't question your motives or integrity."

I side solidly with Hussman on this point although many believe this is all  part of some "grand plan" for the Fed or big banks to take over the world.

Yet, I cannot offer Hussman's same sense of "no disrespect".

We are in this mess, precisely because the Fed blows bubbles of increasing magnitude over time. It happens time and time again, and every time banks are bailed out at the expense of the poor and middle class.

The Fed deserves no respect for what they have done and the problems they have caused. They deserve no respect for missing the dotcom bubble, for missing the housing bubble, and for missing this bubble.

John and Aretha can sing "Respect", but I sure can't.

Respect



One Hell of a Time To Become a Trend Follower

Everyone who believes in valuation metrics would do themselves a favor to click on the three links by Hussman that I presented, and read the articles in entirety.

As I stated upfront, avoiding bubbles is incredibly hard to do, and this one has been exceptional. But that is precisely the problem with bubbles.

Hussman points out (and I agree) "The associated 10-year expected nominal total return for the S&P 500 is negative."

Read that sentence again and again until it sinks in. Here is another way of putting it. "10 years from now, the S&P is likely to be lower than it is today". That is how over-valued equities now are.

Yes, Hussman sounds like a broken record. And so do I. But this is one hell of a time to become a trend follower.

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