luni, 2 februarie 2015

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How to Approach Owned and Earned Media - Moz Blog

How to Approach Owned and Earned Media - Moz Blog
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How to Approach Owned and Earned Media

Posted on: Monday 02 February 2015 — 00:16

Posted by SamuelScott

content-collage.jpg

Image: Flickr user nickrate

We all know content is king, but if your content marketing plan consists of blindly publishing daily blog posts on your website or submitting countless bylined articles (i.e., guest posts) to random outlets, your king will turn into the court jester.

Marketing must have a sound strategy behind it to be successful. To help the Moz community maximize the return on investment of their content, I want to share a strategy I used in my prior position as a senior director at a global agency, and continue to use as a digital marketing and communications consultant.


What is content, exactly?

First, it is important to know that content is not simply something used to get links. As I explained in a Mozinar and a subsequent blog post on integrating digital marketing and public relations, content is essential to any business's overall marketing and communications strategy. Its functions include: 

  • Goal Identification
  • Audience Research
  • Messaging and Positioning
  • Channel Research
  • Content Creation
  • Campaign Execution
  • Measuring Results

To use an example from the earlier post: 

A sender decides upon a message. The message is packaged into a piece of content. The content is transmitted via a desired channel. The channel delivers the content to the receiver. Marketing is essentially sending a message that is packaged as a piece of content to a receiver via a channel.

Content is merely the vehicle that contains a desired marketing message that is then transmitted via a channel to an audience.


The big idea

In case you haven't heard, the newest thing is for brands to become publishers that create content.

While I was visiting SMX West in 2014, I heard this wonderful talk from Brian Clark of Copyblogger (see the SlideShare here):

The core message: Brands that become online media companies will dominate the Internet Age. One of Clark's examples: Netflix went from merely distributing content (in the form of TV shows and movies) to creating content.

The strategy makes sense because the more content brands produce, the more likely it is that their content will be shared on social media, the more brand awareness they will generate and the more chances there are for the content to garner links. In the end, the act of becoming a media company is a way to increase overall online engagement, which is an important ranking factor many SEOs are neglecting.

As more and more brands become publishers, marketers have more and more places to publish. However, we cannot effectively target all of these places, especially when our own websites need content.

The key is to develop a strategic approach to content marketing.


The different types of content

In general, there is owned media and earned media. (There is also paid media, but that mainly refers to paying to get earned content placement on a website.)

  • Owned media is content you publish on outlets you own (e.g., your website)
  • Earned media is content other outlets freely give you (e.g., bylined articles and news coverage)

Here is the central question I wish to address: When should you use owned versus owned media? In other words: Say you create a great piece of content. When should you publish it on your website and when should you publish it somewhere else? Owned and earned media have their benefits and drawbacks.

For an in-depth look on online branding and the different types of media, I invite you to read this detailed essay by Will Critchlow on Moz.

Why you should use owned media

  1. You will own the content forever. If you publish, say, a blog post on your company website, then you will own and have access to that document for as long as you own your website. However, you have no guarantee of how long your content will remain on another website.
  2. Your website can rank in the search engines. Why should another website receive the search benefits of your hard work? If I write an e-book that targets a keyword theme addressing informational queries, I want my website to rank for those search terms for the foreseeable future to generate top-of-the-funnel awareness.
  3. It enhances brand building. The more you pub­lish (and promote), the more your brand authority will grow over time as the content gets traf­fic, news coverage, men­tions, and ­links. 

Why you should use earned media

  1. You can use someone else's audience. A bylined article or news coverage about you on a website or publication read by 100,000 people provides invaluable exposure.
  2. You can earn links. As Jen Lopez explained here, you should not be submitting countless, short guest posts to random websites to get links. A targeted post on a respected website can gain numerous links for your brand. 
  3. You can likely build brand awareness more quickly. Building a brand on your own can take a long time, especially if you are a new business or startup with few readers and social followers. At my prior agency, we got an unknown CEO interviewed or published in what the public relations industry refers to as "Tier 3 outlets." Then, we took those interviews to "Tier 2 outlets" as proof that he was an influencer worthy to quote or be published in their outlets. From there we went to "Tier 1 outlets" for coverage. This had a tremendous positive impact for the business overall. 

How to decide?

content-marketing.jpg

Image: Flickr user ralphpaglia

Obviously, there are benefits to using both owned and earned media. But a lot of the time, a single piece of content can only be used in one or the other channel. (See the last part of this article for important exceptions!) 

Here is the rule I use for both clients and for myself:

Owned media is used for your long-term mar­ket­ing goals. Earned media is used for your short-term mar­ket­ing goals.

Now, graphic design is not one of my strong points (I'm personally more of a writer), but I've created a simple guide to illustrate that rule:

answer-these-questions.jpg

Here are some specific examples I've seen and used:

Owned media

  • Is it an attempt to rank highly in search results for a certain keyword theme over time? An example would be an essay that addresses a pain point your target customers have, one they would attempt to address by searching Google. At my prior agency, I wrote a guide to international SEO a few years ago. Last I checked, the agency still ranked in the top four for searches relating to "international SEO strategy" because of that document.
  • Is it part of your sales funnel? Perhaps the sidebar of your website includes a call-to-action to download an e-book. Of course, people would have to provide an e-mail address, and the e-book could contain links to product pages and sales representatives.

Earned media

  • Is it meant to introduce and/or brand yourself to a targeted audience? A client at my prior agency was a mobile advertising network. We had gotten bylined opinion articles for the CEO on major websites that are all about mobile devices and Internet advertising. Over time, the CEO received more and more attention from larger and larger publications, which helped his personal brand and that of the company's as well. (This is the real reason for so-called guest posting.)
  • Is it meant to generate more immediate sales and/or social media followers? If your company is in a B2B industry, for example, then LinkedIn is an obvious platform on which to publish. By posting on LinkedIn Pulse, you can get more followers of the author's profile (see an important thought below on company versus individual branding) business connections, leads, and thought leadership.

Internal content strategy for companies

conversations-in-pr.jpg

Image: Flickr user fletcherprince

With LinkedIn, internal branding decisions need to be made because the platform allows only individuals to publish content. So, if your business has a great piece of content for a B2B audience for LinkedIn Pulse or another similar outlet, you must decide who publishes it.

Here's a brief outline of the strategy I recommend:

  • Determine who can or should represent the company in some public capacity
  • Decide what specific area each person will focus on based on his or her interests and expertise
  • Determine who should produce the content

As a hypothetical example, imagine a startup has a mobile app that helps companies create and manage online communities. Here is how duties could be divided up: 

  • The CEO would discuss topics that relate to founding and running a high-tech startup
  • The vice president of products would focus on technology and cater his discussions to such matters
  • The vice president of marketing would write and speak about community management

It's crucial that your business divides content and PR duties among the senior staff. Plus, if multiple people are representing the company, there's greater potential for coverage and exposure.


How to combine owned and earned media

Of course, a lot of your content might not fit neatly into one of the two buckets above. You don't always have to choose one or the other.

The important point to understand is every third-party publisher is different and has its own rules. It's crucial to know them so that you do not violate their policies and thereby risk losing the resulting exposure.

When you cannot republish earned media

Moz has a rule that contributors cannot republish posts on their own websites. So, whenever I publish an article here, I do the following:

  • Publish a post on my blog with an excerpt (usually the first paragraph or two) with a call-to-action to visit  Moz for the full article
  • Set the post on my blog to no-index and the canonical URL to that of the Moz post
  • If someone clicks the Twitter share widget on the specific post on my website, the share dialogue uses the canonical URL (to Moz)

This way, we both benefit. Moz gets the due credit (from Google and more), and my blog's subscribers see that I have published the article (on Moz). I would use this strategy when publishing content on third-party networks that do not allow republishing.

When you can republish earned media

LinkedIn Pulse, for example, allows anyone to publish a lengthy essay, and the website seems to use a combination of algorithms and human editors to decide which essays to promote on specific channels (such as Marketing Strategy or Social Media) and on the website's homepage.

While LinkedIn does allow you to publish content that has already been published elsewhere, the brand tends to more actively promote original content.

Here's what I do to maximize the benefits from LinkedIn Pulse:

  • I publish the content on my personal blog
  • Then I immediately post the content to Google+
  • Both of those actions "tell" Google that my website was the original publisher (see this post by Cyrus Shepard on how quickly Google indexes content that is posted to Google+)
  • After about 15 to 30 minutes, I post the content to LinkedIn Pulse
  • LinkedIn is more likely to promote the content then because it is not yet detectable in Google's SERPs

Here is just one example of an essay I published on my website and on LinkedIn—my website gets the credit in Google search and Google News. LinkedIn also promoted the post to thousands of users:

google-news-post.png

linkedin-pulse-promotion.png

linkedin-post.png

Images: Personal screenshots

This strategy can be used to your advantage. If you publish content on a third-party website, you might be able to convince them to set a canonical tag to your original post on your website. 

Note: the rel=canonical tag is only a suggestion to Google. If another website publishes a post with a canonical tag to your website, the search engine may still choose to make that website the authoritative copy. I would also add a text link somewhere in the body of the post with wording such as "Originally published...". Matt Cutts has also recommended that the tag be placed as close to the top of section of code as possible.

But even in cases where the canonical tag is not an option, you can still publish the same content in multiple locations, provided one of several provisions is in place. 


The main takeaway

The content marketing strategy for your own website (owned media) should focus on organic search and your sales funnel. The content marketing strategy for publishing and getting coverage elsewhere (earned media) should focus on your public relations and publicity goals (see my Moz essay on the basic principles of PR).

Both inbound and outbound marketing are crucial in any overall marketing strategy. Strategic deployment is the key. 


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Seth's Blog : The productivity pyramid (give yourself a promotion)

The productivity pyramid (give yourself a promotion)

Productivity is a measure of output over time. All other things being equal, the more you produce per minute, the more productive you are. And economists understand that wealth (for a company or a community) is based on increasing productivity.

The simplest way to boost productivity is to get better at the task that has been assigned to you. To work harder, and with more skill.

The next step up is to find people who are cheaper than you to do those assigned tasks. The theory of the firm is that people working together can get more done, faster.

The next step up is to invest in existing technology that can boost your team's output. Buying a copier will significantly increase your output if you're used to handwriting each copy of the memo you've been assigned.

The step after that? Invent a new technology. Huge leaps in value creation come to those that find the next innovation.

The final step, the one that that eludes so many of us: Figure out better things to work on. Make your own list, don't merely react to someone else's.

It turns out that the most productive thing we can do is to stop working on someone else's task list and figure out a more useful contribution instead. This is what separates great organizations from good ones, and extraordinary careers from frustrated ones.

The challenge is that the final step requires a short-term hit to your productivity. But, if you fail to invest the time and effort to find a better path, it's unlikely you'll find one.

       

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duminică, 1 februarie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Cyborg Silliness; No Glory in Stupidity; If Jackasses Could Think

Posted: 01 Feb 2015 06:35 PM PST

On January 18, in Graves Waiting For Bodies: Major War Escalation in Ukraine; In 5 Weeks Ukraine Out of Money I noted the rebels captured the airport at Donetsk.
Donetsk Airport Battle is Over

Dreizin also informs me that "The battle for the Donetsk airport is over. The rebels expelled Ukraine's most elite units from their last redoubts in the new terminal building."
Also on January 18, Reuters reported Ukrainian Troops Retake Most of Donetsk Airport From Rebels.
Ukrainian troops recaptured almost all the territory of Donetsk airport in eastern Ukraine they had lost to separatists in recent weeks, as thousands gathered in Kiev for a state-sponsored peace march on Sunday.

The offensive brought fighting close to the industrial city of Donetsk, centre of a pro-Russian rebellion, while shelling intensified in other parts of the region known as "Donbass".

Military spokesman Andriy Lysenko said "We succeeded in almost completely cleansing the territory of the airport, which belongs to the territory of Ukrainian forces as marked by military separation lines."
Colonel Cassad and Jacob Dreizin got the story correct. Western media outlets instead believe totally discredited sources in Kiev.

No Glory in Stupidity

On January 28, the LA Times reported How Ukraine's Outgunned 'Cyborgs' Lost Donetsk Airport.

Some of the LA Times report is accurate, albeit late.

Other parts seemed to glorify the "cyborgs" who "for 242 days, had held out against pro-Russia separatists who bombarded them from beyond the runways and prowled above and below them in the wreckage of the terminal."

In my view, there is no glory in stupidity. But there's even less in sheer madness.

Here are some snips from the LA Times article.
Brigade commander Col. Yevgeny Moysyuk noted "We couldn't get our tanks or armored vehicles there anymore because they had used the truce time to fortify all the side approaches and deploy all kinds of heavy weapons."

"We should have evacuated our men a few days earlier, then waited for the separs [separatists] to converge on the premises and bury them under the ruins," he said.

At one point, in a desperate bid to rescue his men, Moysyuk borrowed a couple of armored vehicles with drivers from another brigade. But the drivers refused to go into what they knew was a fiery hell. [smart decision]

So Moysyuk's own officers drove into the fog that had descended on the tarmac. Misled by the fog, they arrived at a different building, where they were surrounded by the enemy. The next day, the remaining paratroopers were ordered to attack the airport head-on.

"This is just sheer idiocy!" exclaimed an airborne battalion commander, Maj. Ruslan Prusov.

The man in charge of the operation, Col. Gen. Viktor Muzhenko, Ukraine's military chief of staff, was not inclined to share the pessimism of his subordinates. "A war doesn't proceed without casualties," Muzhenko said.

"The losses of the opposite side are far greater than ours, and we didn't lose the airport, as it just became the front line, that is all."

About a mile away, a doctor examined a large, bleeding wound on the top of a soldier's head. The man said he felt dizzy and the doctor asked him to wait so that he could put some stitches and bandages on it.

"Don't you think he should go to a hospital?" another soldier asked.

The doctor laughed. "If we send everyone with such wounds to a hospital," he said, "we will run out of men to fight the war with."
Lies No One Believes

Note the two lies in a single sentence by Col. Gen. Viktor Muzhenko: "The losses of the opposite side are far greater than ours, and we didn't lose the airport, as it just became the front line, that is all."

Those lies are so preposterous no one can possibly believe them.

The ending sentence to the above article is also worth repeating: "If we send everyone with such wounds to a hospital, we will run out of men to fight the war with."

What Really Happened

ON January 29, I posted a more accurate account of what happened and what's really going on in Ukraine.

In case you missed it, please consider Conscription of People, Cars, Businesses in Ukraine for Mindless Slaughter; Entire Villages Leave to Avoid Servitude; Hop on the Bus Gus.

The short version is conscription of cars, property, and people for the war effort. The smart citizens want no part of it. Entire villages have fled to Russia.

The above link contained a video that describes in detail what happened to the fool's mission to retake the airport.

I repeat it here with the same warning.

The video below is graphic and contains a lot of harsh language. The video is about captured Ukrainian POWs on a fool's mission to retake the Donetsk airport.

Warning aside, I recommend watching the video, entirely. Watch the scenes where locals confront the Ukrainian POWs. The video accurately portrays Ukrainians fighting Ukrainians, not Ukrainians fighting Russians.

Ukrainian POW's Face NAF Commander Givi and the Fury of Donetsk Residents



Link if Video Does not Play: UAF Storms Donetsk Airport and Gets Asses Handed to them by NAF.

Want a translation to Spanish, German, Dutch, Danish, or French? Go to Information Clearing House.

Civil War

This is a f*ing civil war, no more, no less. It is not our battle. It is an internal battle.

Yes, Russia is supporting the separatists. So what? Putin is not on a mission to take over Europe. Nor does he want to exterminate the Jews as a final solution. So please spare me the sap about Hitler and Chamberlain.

Ironically, the US sponsored the civil war in the first place taking sides in the ouster of the former Ukrainian president.

The second irony in these preposterous Putin-to-Hitler comparison is the simple fact the US supports neo-Nazis in Ukraine. (See Email From US Special Forces Veteran; 500 US Blackwater Mercenaries in Ukraine? US Backs Ukrainian Neo-Nazis)

No one has remotely bothered to understand Russia's legitimate concerns.

Just as the US did not want Russian missiles in Cuba, Russia does not want NATO on its border. Why is that so hard to understand?

Jackass Solutions

Unsurprisingly, jackasses at the Financial Times came out with this editorial: West must help Ukraine to defend itself against Russia.

Of course the Times only wants to send "defensive weapons". And if Russia responds? The jackasses then suggest "The US and its allies must intensify their financial assistance to the Kiev government."

Yes indeed, the jackass solution as always is to throw money at it. With Greece dangling in the air, let's "intensify financial assistance" to prolong wars.

If Jackasses Could Think

Instead of figuring out this is not remotely our battle, jackasses want to prolong the fighting with money and military equipment. This of course is expected.

If jackasses could think, they would not be jackasses.

With that, I will conclude this post the same way I did on January 29. ....

Hop on the Bus Gus

In honor of Ukrainian citizens smart enough to disavow the "Small Price Theory" and willing to tell their government to F* off, I offer this musical tribute.



Link if Video does not Play: 50-Ways Paul Simon

Hop on the bus Guss
Don't need to discuss much
Just drop off the keys Lee
And get yourself free!


No one has the right to own you. No one. No government. Ever!

To disagree with the above is to support forced slavery.

This War is Over

The Vietnam war ended when public support turned against it, even though fighting continued long after.

The same applies here. Hearts and minds have been lost along with the will to fight. Ukraine is split in two, barring a major military intervention by the US.

Even though the war is over, the fighting can continue. How much longer the battles go on now depends on the US and IMF.

  1. The US can fund the bloodshed for a while longer and so can the IMF. US war-mongers may decide no price is too high to pay, even to the absurd point of engaging Russia directly.
  2. The US and IMF can force true peace negotiations on Kiev with a partition or federation of the country. But, what may have been acceptable to the separatists and Russia six months ago may no longer be so.

Either way, Ukraine is never going to be a single country again. Such is the madness of arbitrarily drawing borders with no regard to cultural, political, or religious beliefs.

The war is over. Kiev lost, even with the backing of the US. Let the peace process begin before more lives are lost and more needless destruction occurs.

I authorize translation and republication of this individual article, to any language, on any site, as long as it contains a link back to this article.

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

More Obama Dead-on-Arrival Tax Proposals

Posted: 01 Feb 2015 01:58 PM PST

Is there a point to beating your head against a concrete wall? The answer would seem to be "no", yet President Obama continues to do just that with dead-on-arrival proposals.

Please consider Barack Obama Plans to Tax Overseas Cash Piles.
President Barack Obama will propose raising $238bn by levying a one-off tax on the cash piles held by US companies overseas to repair the US's crumbling roads and bridges.

The measure, a key plank of the US president's budget to be outlined on Monday, would impose a 14 per cent "transition" tax on the estimated $2tn in earnings US companies have amassed overseas, the White House said on Sunday.

Critics say the existing offshore cash mountains testify to the aggressive foreign tax planning by US companies, while businesses cite them as evidence of the handicaps they face under an uncompetitive US tax regime.

Mr Obama will also propose a 19 per cent tax on future foreign earnings, giving companies a credit on foreign taxes and allowing them to be reinvested in the US with no additional penalty. Under the current system, US companies pay little or no tax on their earnings abroad until they are brought back into the US.

The money raised would be used to fund about half of an ambitious six-year programme of highway, bridge and transit upgrades, one of the president's main priorities during his final two years in office and an initiative that has attracted some degree of bipartisan support. The remainder of the programme would be financed by the existing highway fund.

"This transition tax would mean that companies have to pay US tax right now on the $2tn they already have overseas, rather than being able to delay paying any US tax indefinitely," a White House official said.
Wall of Dispute

  1. Critics say the existing offshore cash mountains testify to the aggressive foreign tax planning by US companies.
  2. Businesses cite aggressive tax planning as evidence of the handicaps they face under an uncompetitive US tax regime.

Curiously, both statements are true. And the president's plan does nothing to fix the fundamental problem.

US tax code encourages capital flight. So, corporations do just that, effectively wasting a mountain of money on lawyers and tax schemes in the process. Then, US corporate profits sit abroad, waiting for repatriation holidays which inevitably come every time there is an economic slowdown.

Mish Proposal

The initial problem is US corporate tax rates are too high. I propose cutting them to zero. Were that to happen, instead of US businesses sheltering money overseas, foreign corporations would setup offices in the US, moving as much here as they can.

I believe growth in economic activity would far outweigh any lost revenue.

In spite of obvious merit, my proposal would never fly. The president would veto it. So how about a more modest corporate flat-tax with no loopholes, at a rate far lower than most of Europe?

Such a proposal would immediately end all this bickering on both sides. Republicans would get what they want (lower taxes). And Obama would get something he wants (ending foreign tax loopholes).

Instead, he proposes dead-on-arrival ideas.

Does Obama love beating his head against the wall with zero-chance proposals? If he's attempting to pound some sense into his head, it's clearly not working.

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

Seth's Blog : Almost no one

Almost no one

There's a huge difference between "no one" and "almost no one".

Almost no one is going to hire you.

Almost no one is going to become a true fan.

Almost no one is going to tell someone else about your work.

Almost no one is going to push you to make your work ever better.

If only 1% of the US population steps up, that's 3,000,000 people in the category of "almost no one."

If only one out of 10,000 internet users engages with you, that's still hundreds of thousands of people.

The chances that everyone is going to applaud you, never mind even become aware you exist, are virtually nil. Most brands and organizations and individuals that fail fall into the chasm of trying to be all things in order to please everyone, and up reaching no one.

That's the wrong thing to focus on. Better to focus on and delight almost no one.

       

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sâmbătă, 31 ianuarie 2015

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis


Diving Into the GDP Report - Some Ominous Trends - Yellen Yap - Decoupling or Not?

Posted: 31 Jan 2015 05:02 PM PST

Yellen Yap

On Thursday, Fed Chair Janet Yellen met with Senate Democrats at a private luncheon. She told the Democrats that the U.S. Economy is Strong.

My first thought was "what the heck is Yellen doing holding a private lunch with Democrats only?" Had she met with Senate Republicans, I would have asked the same question.

Apparently this is common procedure for Yellen, so perhaps I am reading too much into it.

Yet, I cannot help wondering if the real purpose of the meeting was to persuade Democrats to block any "Audit the Fed" Initiatives.

Glowing Report

Regardless of the reason, Yellen had some pretty glowing things to say.

"She went through the issues of unemployment and inflation. Very positive. And economic growth numbers were good, have been good. There's work to be done," Sen. Richard Durbin (D-Ill.) said after the luncheon.

No Rate Hike Soon

Bloomberg reported Yellen Tells Senators No Rate Rise Soon Amid Concerns Abroad.
"Her message is that the economy's getting better but there's still a ways to go in terms of job creation," New York Senator Charles Schumer said today in an interview on Capitol Hill. "That worry seems, in her mind, to be paramount and that's why she is not going to raise rates immediately."

The Fed upgraded its assessment of the U.S. economy in a statement on Wednesday after a meeting of its policy-setting committee, while adding a reference to "international developments" which investors took as a sign of mounting worry about weakness overseas.

Yellen shared "some concern about the foreign situation," said Virginia Senator Tim Kaine, who said her comments were "pretty positive about the fundamentals here."

Economists said the confident tone of the statement from the Federal Open Market Committee signals it is on track to raise interest rates this year, while making the point it is not ignoring the weaker performance of the global economy.
GDP Expectations Fall Short

On Friday 4th quarter GDP estimates came in below economist expectations. Bloomberg reported "The advance estimate for fourth quarter GDP growth disappointed with a 2.6 percent figure versus analysts' estimate of 3.2 percent and following 5.0 percent for the third quarter. Final sales of domestic product slowed to 1.8 percent, following a 5.0 percent jump in the third quarter. Final sales to domestic purchasers eased to 2.8 percent from 4.1 percent in the third quarter."

Diving Into the GDP Report

With that backdrop, lets dive into the BEA Fourth Quarter and Annual 2014 Advance GDP Estimate.

Change in Real GDP - Personal Consumption Expenditures



click on chart for sharper image

Several PCE items stand out. Is the 2.87% increase sustainable?

And what about health care? In the last three quarters, health care expenditures added 0.45, 0.52, and 0.51 percentage points to GDP. Wasn't Obamacare supposed to reduce costs?

Curiously, gasoline added 0.25 percentage points to GDP in spite of rapidly falling prices.

Motor vehicles and parts show rapidly slowing growth since second quarter. That's a trend I expect to continue.

I discussed autos on January 6 in Economists Upbeat Despite 4th Consecutive Decline in Factory Orders; Auto Orders vs. Expectations.

Autos are slowing and so will auto-related jobs. Yet economists believe "Auto sales are expected to reach their highest level in a decade this year, bolstered by strong job gains and cheap gas."

My take: Autos will soon subtract from GDP.

Change in Real GDP - Gross Private Investment, Exports



Growth in fixed investment is falling rapidly. Equipment, industrial equipment, and transportation equipment are already in contraction.

Inventories added 0.82 percentage points to fourth quarter GDP. Over time, this series trends to zero, so expect a pull back next quarter.

Rising imports subtract from GDP. Imports actually took 1.39 percentage points from GDP. If oil prices head back up, even modestly, this number could get worse.

Exports added 0.37 percentage points to fourth quarter GDP. But note the trend.

Because of the rising US dollar, export growth is dwindling. Will exports add or subtract to GDP next quarter?

All things considered, this GDP report is far more than a simple snapback from the rapid expansion last quarter.

Canada in Recession, US Will Follow in 2015

Earlier today in Canada in Recession, US Will Follow in 2015, I stated "A Canadian recession is underway. US will follow."

Decoupling or Not?

I remain amused by all the pundits who think the US has "decoupled" from the global economy and will grow stronger in 2015.

Let's return to a question I asked above: Will exports add or subtract to GDP next quarter?

I suggest the answer is subtract. Not only are US exports getting more expensive relative to Europe and Japan, the entire rest of the global economy is slowing rapidly. Our biggest trading partner is Canada and Canada is in recession, with a rapidly sinking loonie (Canadian dollar) on top of it.

US Recession

The US won't decouple, just as China did not decouple from the global economy in 2008-2009 (a widely-held thesis I also knocked at the time).

Indeed, now that virtually no economist expects a US recession, I believe we are finally on the cusp of one, just as the Fed seems committed to hike.

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

Canada in Recession, US Will Follow in 2015

Posted: 31 Jan 2015 12:14 PM PST

On January 21 when the Canadian Central Bank unexpected slashed interest rates, I wrote Canadian Recession Coming Up.

Following the rate cut, the yield curve in Canada inverted out to three years. Inversion means near-term interest rates are higher than long-term rates.

I saw no other person mention the inversion at the time. An inverted yield curve generally portends recession.

Nine days later, the Canadian yield curve is still inverted. Let's compare what I posted about the curve on January 21 vs. January 30.

Canadian Yield Curve January 21

  • 30-year: 2.044% (Today's Low 1.998%)
  • 10-Year: 1.426% (Today's Low 1.366%)
  • 05-Year: 0.791% (Down 19 basis points, an 18% decline)
  • 03-Year: 0.590% (Down 27 basis points, a 31% decline)
  • 02-Year: 0.560% (Down 29 basis points, a 34% decline)
  • 01-Year: 0.580% (Down 34 basis points, a 37% decline)
  • 01-Month: 0.640% (Down 22 basis points, a 26% decline)

Canadian Yield Curve January 30

  • 30-year: 1.834% (Down 21.0 basis points)
  • 10-Year: 1.250% (Down 17.6 basis points)
  • 05-Year: 0.603% (Down 18.8 basis points)
  • 03-Year: 0.386% (Down 20.4 basis points)
  • 02-Year: 0.392% (Down 16.8 basis points)
  • 01-Year: 0.490% (Down 9.0 basis points)
  • 01-Month: 0.580% (Down 6.0 basis points)

Not only did yields plunge across the board since then, the yield curve is still inverted all the way out to three years.

Recession Has Arrived

There is no point in waiting for further data. The Canadian recession has already arrived.

On Friday, the Financial Post reported Canada GDP Shrinks on Biggest Factory Drop in Six Years.
The Canadian dollar plunged below 79 cents US today after data showed Canada's gross domestic product contracted in November as manufacturing dropped the most since January 2009 and on declines in mining and oil and gas extraction.

Output shrank by 0.2%, the most in 11 months, to an annualized $1.65 trillion, Statistics Canada said Friday in Ottawa. The median forecast in a Bloomberg economist survey was for output to be little changed.

Manufacturing declined by 1.9% in November, with losses ranging from machinery and equipment to plastics and rubber.

The Bank of Canada unexpectedly lowered borrowing costs last week for the first time since 2009, saying the move was meant to provide insurance as the slump in crude oil, the nation's biggest export, weighed on the economy.

"Insurance"

The Bank of Canada called the rate cut "insurance". Insurance from what? If they think it will halt a recession, it won't. The recession is here. There is no need to wait for another quarter of declining GDP to confirm. A Canadian recession is underway.

US Will Follow

I remain amused by all the pundits who think the US has "decoupled" from the global economy and will grow stronger in 2015.

Here's news: "It won't", just as China did not decouple from the global economy in 2008-2009 (a widely-held thesis I also knocked at the time).

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

Seth's Blog : The end of geography

The end of geography

Some of the most important inventions of the last hundred years:

Air conditioning--which made it possible to do productive work in any climate

Credit cards--which enabled transactions to take place at a distance

Television--which homogenized 150 world cultures into just a few

Federal Express and container ships--which made the transport of physical goods both dependable and insanely cheap

The internet--which moved information from one end of the world to the other as easily as across the room

Cell phones--which cut the wires

If you're still betting on geography, on winning merely because you're local, I hope you have a special case in mind.

       

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