Friday, January 28, 2011
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Monday, January 24, 2011
The Importnace of online reputation management
Firms like SERMs are necessary in keeping, and in some instances salvaging and restoring vendors or person's reputation and fantastic identify.
On the net searches are one particular of the initially elements that modern day day consumes do prior to investing dough using a company or individual, and one particular poor click can suggest economic disaster to get a online business, particularly on this ever growing cyber financial state. Popularity for these SERMs are increasing by leaps and bounds using the realization it's not prudent to try to conduct organization in this cyber age and never have a SERM on retainer along with your accountant and your legal professional.
Businesses are also appreciating the collateral benefit of having a Popularity Management firm on-board as an integral a part of their enterprise product, its great promoting! Even though securing a company's excellent popularity and name via the internet, it generates very good press and positive publicity that ultimately adds drastically towards the bottom line of a company's balance sheet, generating the providers to literally pay for alone in many conditions.
This tends to become a really sturdy selling point for vendors at the same time as individuals, to know that they're cleansing and defending their reputations and cyber pictures, whilst concurrently running a very helpful promoting initiative. In some cases companies absolutely disregard their former marketing efforts internet and go for the benefits of On the web Popularity Management.
Obtaining a SERM firm on your aspect is without a doubt the way to go on this cyber age. For extra knowledge on online reputation management and corporate reputation management, Please visit us at http://removeripoffreports.net/
web site promotion internet marketing
When I went into marketing/communications in the 80’s, things were simpler. I spoke 5 languages, which pushed me into this field. What else could I do, be a translator? Not on your life. Not when I could be creative, come up with quantitative studies and research why / how people buy.
It seemed simple, right? You have a product and you have to figure out a way to sell said product. You had magazine ad space, TV commercials, newspapers… every day, everywhere you looked, you’d see some form of advertisement. Eventually, we became desensitized to print and TV marketing – the traditional ways.
The Internet wasn’t used as it is today (although it still had some traction). The World Wide Web was the Wild Wild West. It was a “small” little marketplace, with a minor audience for client product promotion.
And Then Internet Entered the Scene… Fast Forward in Time
Advertising is more sophisticated now… but then, so are consumers. Way back when, we could survey the consumer, create charts, crunch numbers… it was all about data. Anymore, however, you have to understand consumer psychology.
Marketing has gone holistic. Yes, quantitative and qualitative data is still important, but we’re not looking at real numbers anymore. We’re looking at the consumers themselves.
What makes buyers buy? Is it the way a site looks? Does having the sidebar on the left gain a greater response than having the sidebar on the right? Are blue links more “clickable” then, say, green ones? Is “buy” more active than “act”?
What Are the Click Triggers?
With all the Google changes lately, you really have to pay more attention to your site. Of course, if you’re a regular reader, you know I push site attention anyway, no matter what Google’s doing. However, with all the vertical marketing possibilities, you want to make sure you get all the bang for your buck you can from any top listing you get.
So you study the click triggers – those beautiful little differences that cause people to click through: through to your website, through to your buy page, through to your “thank you”. It’s a step-by-step process, and you have to guide them every step of the way.
Ask yourself:
- Is my content sticky? Does it have good information worth reading?
- Are my headlines well written? Do they grab readers’ attentions?
- Do I let others (those who will tell me the truth) read my content before I put it up? Do they like it? Do I listen when they offer suggestions?
- Is it easy to navigate through my site? Does my site create a pleasant user experience?
Are You Ignoring the Individual?
This is the most serious question, and you need to really give it some thought. If your content completely targets consumers (i.e. all product/service focused) rather than having helpful bits of information, you could be losing out.
You can’t appeal to everyone; not everyone is your target market. You don’t want to get so busy trying to reach everyone that you miss those who might convert. Build your site, images, writing, etc within the context of your specific target, and then experiment.
Experiment….?
Yes, experiment. Human behavior and relevance is a beautiful thing. Being able to associate one with the other will have half your online battle won. However, you can’t just pull knowledge out of the air. You have to be willing to experiment – to test. Plenty of tools are readily available for just this purpose, such as…
Google Website Optimizer
A/B testing is in; guessing is out. If you think you might know why a page isn’t converting, that’s all well and good. However, there’s a difference between thinking you know, and really knowing. With a little A/B testing, you can find out what areas really are the problem and fix them.
Usabilla
Take a screen shot of your page and put it up on Usabilla. Let people know what questions you want them to answer and then send out the link. This little goodie can give you some very valuable insights in terms of layout and design.
4QSurvey
Very nice, very short survey. You can find out why people came to your site, whether they found what they wanted (giving you visitor satisfaction ratings) and get suggestions from them, all in the same program. Again, this is a very useful goodie.
The three above are just a few. There are, literally, tons of usability testing tools out there. Many are free; some cost, but are worth it.
You’re not going to get through today’s marketing world by guessing. You’re not going to make it with traditional marketing tools. You have to be willing to use everything at your disposal; you have to be willing to expand.
What changes have you made to keep up with online marketing and technology?
Post image via BDoughertyAmSchool
SEO in the niche of web hosting and domain name registration
In this article we`ll try to generalize our practices in promotion of companies that provide web hosting and domain registration services.
We will talk about such questions:
- Analysis of hosting / domain name registration market and finding potentially advantageous promotion directions;
- Features of keywords selection in the conditions of SEO-pressure
- Definition of promotion strategy
- Methods of getting links
- Features of different queries groups conversion depending on geography
- Typical problems that interfere sites conversion and ways of their solution
Market analysis and competitive researches. Finding potentially advantageous promotion directions
First of all, it is necessary to note that a large traffic in the niche of web hosting is deceptive. If you look at Google AdWords Keyword Tool data you will find out the following picture:
In fact, there are about 400-500 visits from the 8th– 9th place for a query “hosting” per month. It`s necessary to consider this and other points while planning hosting project promotion, because information about a large amount of queries in the Google AdWords Keyword Tool is “stuffed” with endless positions checks. As the market of hosting projects and domain name registrars is extremely competitive, you have a great chance to invest money, work and time in promotion of such queries that are stuffed and do not bring traffic and sales, and after all you can incur losses and even remain disappointed in the search promotion at all. The same can be said about domain name registration.
In fact, there are about 500-600 visits from the 5th – 6th place for a query “domain” per month.
That`s why, in our opinion, it`s better to begin promotion of hosting project or domain name registrar with finding active competitors in the search marketing niche and define their strategies. For this purpose we can recommend a wonderful tool – SemRush.
So, we need to find competitor sites in our niche, which are actively engaged in the Internet marketing. We just type highly competitive query corresponding to the topic in SemRush and find sites that are ranked well for it:
Now we need to make cleaning, i.e., remove irrelevant sites from the list. In this case, obviously, Wikipedia must be removed from the list. After checking a few queries important for you in the same way, we will receive a “crossed” list of sites. Sites from this list have good rankings for many queries in this subject, so they should be examined primarily.
Lets take a site hostgator.com as an example:
The example shows that, firstly, the number of search queries for which the site “hostgator” is shown has an explicit trend to growth. It reflects the efforts made by the owners of this project to increase its visibility in search engines.
After selection of queries that bring maximum traffic to the project according to SemRush, we get an approximate keywords list which can be used to start promotion.
Making the list of necessary keywords, let’s see whether it is a good idea for us to «meddle into a fight» for these keywords. You should consider such factor, as SEO-pressure, for this purpose.
Features of keywords selection in the conditions of SEO-pressure
You can use different tools to estimate a competition for the selected query. A plug-in for FireFox called SeoQuake is one of convenient free instruments.
Let’s type a relevant query interesting for us, e.g., business hosting:
You can see that some strong sites are present in SERP, and some of them have got from several hundreds thousand to millions of backlinks and even more. The competition in SERPs is about to be really strong, so I would like to repeat: you should select a semantic core very carefully. Moreover, there are sometimes artifacts in SERPs, and learning them is possible only from experience. Let’s take the query “ecommerce hosting”. This query is high frequency in subtopic «hosting for ecommerce sites», it has about 12 thousand searches per month in exact match worldwide:
We can see that the trends of search don’t show any sudden jumps or drops.
The target audience for these queries is in the U.S. and UK – the most creditworthy regions in general. However, traffic for such query from the American Google Top5 – Top6 is about 1-3 persons a day, with natural drops on weekends; it gives us about 40 people a month. A conversion rate for these queries is extremely low. Of course, promotion for this queries is acceptable only with the purposes of improving positioning and brand awareness, but as for sales it isn`t effective.
Let`s take a query “reseller web hosting” which has next data from Google KeyWord Tool worldwide, for comparison:
The query brings twice more traffic from the 4th-5th places having twice smaller amount of searches in exact match according to Google KeyWord Tool! Conversion rate of this query is also quite high. At that, Google Insights give the following data:
At the same time the great part of traffic and transactions comes from the U.S. and UK users despite of the fact that the site holds comparable positions also in Google.co.in.
All of these patterns are also true for domain name registrars.
It’s impossible to know this information without experience in promoting a site for such queries or without trying PPC advertising in exact match. There are a lot of keywords like these, so you should constantly monitor all queries in the aggregate estimating of the effectiveness of each one.
You can also “pull out” perspective keywords making the analysis of the backlinks text anchor to sites of competitors who are actively engaged in search marketing. You can use special tools, for example, CS Yazzle or SEO SpyGlass by LinkAssistant, either manually using Yahoo! Site Explorer.
To estimate a real traffic on a query you may also try PPC in exact match.
The following method can be used to estimate keywords efficiency. The initial necessary data is:
- Position for a keyword;
- Traffic on it;
- Estimated number of searches from Google Keyword Tool in the exact and phrase match for the world and top regions;
- Quantity of page views;
- Time spent on a site;
- Bounce rate;
- Conversion rate.
Microsoft Excel counts a parity of all these factors with the help of formulas and allows realizing efficiency/inefficiency of each keyword visually.
Perspective traffic, quantity of searches per month (data of Google AdwordsKeywordTool) and conversion data for each query are marked with green color. Indicators exceeded the average indicators for the site to the worse are marked with red (bounce rate, number of pages reviews).The percent of conversion which vastly differs to better from the average indicator for the site is marked with yellow color in the last column (Conversion rate).
Using this technique allows tracking the most convertible requests and receiving greater outcome from a client’s site.
Selection of promotion strategy
Based on our experience in promotion of projects in the niche of hosting and domain names registration we can say that the most high-frequency, convertible and competitive queries are in these topics exactly.
Shared vs VPS vs Dedicated
If to compare an earning power of dedicated servers sale (VPS) and earning power of shared hosting sale you will come to the conclusion that in general virtual (Shared) hosting sale is more profitable: one dedicated server sale brings around 200$ of income, at the same time sale of the same server “cutted” on virtual (Shared) hosting allows to earn much more (~100×5$), even with the consideration of the increasing load on a support.
However, traffic in Shared hosting subtopic is much less than in dedicated server subtopic. People interested in such things, according to our observations, come by queries like “cheap hosting”, “cheap web hosting”, and the quantity of such searches is very small because Godaddy and Hostgator take away the lion’s share of these customers, mainly due to type-in traffic.
In this case, it seems to be a good decision to perform promotion in the VPS and Dedicated sector.
Many companies, apparently, have come to the same conclusion: promotion for queries of “shared” group is much easier, than for queries related to dedicated servers.
Specialized kinds of hosting
As we have noted above, low-frequency traffic brings rather small part in general traffic and conversion; therefore, in our opinion, it`s better to begin promotion for high-frequency keywords with addition low – and mid-frequency keywords, which give a great bulk of sales and target traffic on a site. However, if your hosting site sells “exotic ” types of hosting, such as hosting with support of Zen Cart or Django, then such low-frequency, long-tail keywords can justify themself at the initial stages of promotion.
A cost of their promotion to the Top-10 is small, and similar “exotic hosting” is usually searched by people who understand the subject well and thus type long queries in search bars.
Eventually, when the site starts to rank well for competitive queries, it makes sense to “collect” low-frequency “long tail” of queries in subjects, not to miss this small piece of the market.
Also I would like to notice that promotion for keywords like “hosting” and “web hosting” is extremely difficult process due to high competition (though these keywords begin to “sell” beginning from top-20!)
Methods of getting links
The basis of search optimization are at the moment:
- keyword research;
- texts and meta tags optimization according to the keywords;
- adding backlinks with correct “anchors” (with right reference texts).
As we have already noted, hosting sites have a large number of backlinks. How do they receive so many backlinks? This is obvious, that reviews and comments at forums will never help to collect tens thousands of links. Four main methods used in this theme should be picked out. Some of them are typical for other niches and some of them have unusual “boom” exactly in hosting and domain subjects.
- Link exchange (the proper way)
- Links buying (the smart way)
- Getting links through its own affiliate program.
Conversion of search traffic
Let’s look at the comparative analysis of search traffic conversion in various regions (sample of more than 90.000 sales for “domain names” and more than 2000 sales for the “hosting” market):
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Aaron Sorkin's Cable <b>News</b> Network Project Awaits Greenlight At HBO <b>...</b>
For the past few months, HBO has been talking to Aaron Sorkin about his long-gestating drama set behind the scenes at a nightly cable news show. However, with him busy on the awards circuit with his latest film, The Social Network, ...
Probably Bad <b>News</b>: Headline FAIL - Epic Fail Funny Videos and <b>...</b>
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Tuesday, January 18, 2011
About Making Money
You're probably reading this on junk. And I'm not talking about newsprint - industry woes aside, that's high-quality stuff. But if you're on a computer or an iPad, and you're not plugged into an Internet jack in the wall? Junk, then.
But it's not your MacBook or your tablet that's so crummy. It's the spectrum it's using.
Spectrum, in the words of FCC Chairman Julius Genachowski, is the economy's "invisible infrastructure." It's the interstate system for information that travels wirelessly. It's how you get radio in your car, service on your cellphone and satellite to your television. It's also how you get WiFi.
But not all spectrum is created equal. "Beachfront spectrum" is like a well-paved road. Lots of information can travel long distances on it without losing much data. But not all spectrum is so valuable.
In 1985, there was a slice of spectrum that was too crummy for anyone to want. It was so weak that the radiation that microwaves emit could mess with it. So the government released it to the public. As long as whatever you were doing didn't interfere with what anyone else was doing, you could build on that spectrum. That's how we got garage-door openers and cordless phones. Because the information didn't have to travel far, the junk spectrum was good enough. Later on, that same section of junk spectrum became the home for WiFi - a crucial, multibillion-dollar industry. A platform for massive technological innovation. A huge increase in quality of life.
There's a lesson in that: Spectrum is really, really important. And not always in ways that we can predict in advance. Making sure that spectrum is used well is no less important than making sure our highways are used well: If the Beltway were reserved for horses, Washington would not be a very good place to do business.
But our spectrum is not being used well. It's the classic innovator's quandary: We made good decisions many years ago, but those good decisions created powerful incumbents, and in order to make good decisions now, we must somehow unseat the incumbents.
Today, much of the best spectrum is allocated to broadcast television. Decades ago, when 90 percent of Americans received their programming this way, that made sense. Today, when fewer than 10 percent of Americans do, it doesn't.
Meanwhile, mobile broadband is quite clearly the platform of the future - or at least the near future. But we don't have nearly enough spectrum allocated for its use. Unless that changes, the technology will be unable to progress, as more advanced uses will require more bandwidth, or it will have to be rationed, perhaps through extremely high prices that make sure most people can't use it.
The FCC could just yank the spectrum from the channels and hand it to the mobile industry. But it won't. It fears lawsuits and angry calls from lawmakers. And temperamentally, Genachowski himself is a consensus-builder rather than a steamroller.
Instead, the hope is that current owners of spectrum will give it up voluntarily. In exchange, they'd get big sacks of money. If a slice of spectrum is worth billions of dollars to Verizon but only a couple of million to a few aging TV stations - TV stations that have other ways to reach most of those customers - then there should be enough money in this transaction to leave everyone happy.
At least, that's some people's hope. Some advocates want that spectrum - or at least a substantial portion of it - left unlicensed. Rather than using telecom corporations such as Verizon to buy off the current owners of the spectrum, they'd like to see the federal government take some of that spectrum back and preserve it as a public resource for the sort of innovation we can't yet imagine and that the big corporations aren't likely to pioneer - the same as happened with WiFi. But as of yet, that's not the FCC's vision for this. Officials are more worried about the mobile broadband market. They argue (accurately) that they've already made more beachfront spectrum available for unlicensed uses. And although they don't say this clearly, auctioning spectrum to large corporations gives them the money to pay off the current owners. But even so, they can't do that.
"Imagine someone was given property on Fifth Avenue 50 years ago, but they don't use it and can't sell it," says Tim Wu, a law professor at Harvard and author of "The Master Switch." That's the situation that's arisen in the spectrum universe. It's not legal for the FCC to run auctions and hand over some of the proceeds to the old owners. That means the people sitting on the spectrum have little incentive to give it up. For that to change, the FCC needs Congress to pass a law empowering it to compensate current holders of spectrum with proceeds from the sale.
One way - the slightly demagogic way - to underscore the urgency here is to invoke China: Do you think it's letting its information infrastructure stagnate because it's a bureaucratic hassle to get the permits shifted? I rather doubt it.
Of course, we don't want the Chinese system. Democracy is worth some red tape. But if we're going to keep a good political system from becoming an economic handicap, there are going to be a lot of decisions like this one that need to be made. Decisions where we know what we need to do to move the economy forward, but where it's easier to do nothing because there are powerful interests attached to old habits. The problem with having a really good 20th century, as America did, is that you've built up a lot of infrastructure and made a lot of decisions that benefit the industries and innovators of the 20th century. But now we're in the 21st century, and junk won't cut it anymore.
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Pitchfork: The Strokes Confirm Release Date for New Record
TwentyFourBit points out that the Strokes' bassist Nikolai Fraiture has confirmed a recently speculated rumor concerning the release date of ...
Arnold Schwarzenegger set to make Hollywood comeback as a nice <b>...</b>
Look out, Hollywood. Former California Governor Arnold Schwarzenegger has a warning for.
Gov.-elect Robert Bentley intends to be governor over all, but <b>...</b>
elect Robert Bentley intends to be governor over all, but says only Christians are his 'brothers and sisters'. Published: Monday, January 17, 2011, 4:23 PM Updated: Monday, January 17, 2011, 6:14 PM. David White -- The Birmingham News ...
Friday, January 14, 2011
Ways of Making Money
You're probably reading this on junk. And I'm not talking about newsprint - industry woes aside, that's high-quality stuff. But if you're on a computer or an iPad, and you're not plugged into an Internet jack in the wall? Junk, then.
But it's not your MacBook or your tablet that's so crummy. It's the spectrum it's using.
Spectrum, in the words of FCC Chairman Julius Genachowski, is the economy's "invisible infrastructure." It's the interstate system for information that travels wirelessly. It's how you get radio in your car, service on your cellphone and satellite to your television. It's also how you get WiFi.
But not all spectrum is created equal. "Beachfront spectrum" is like a well-paved road. Lots of information can travel long distances on it without losing much data. But not all spectrum is so valuable.
In 1985, there was a slice of spectrum that was too crummy for anyone to want. It was so weak that the radiation that microwaves emit could mess with it. So the government released it to the public. As long as whatever you were doing didn't interfere with what anyone else was doing, you could build on that spectrum. That's how we got garage-door openers and cordless phones. Because the information didn't have to travel far, the junk spectrum was good enough. Later on, that same section of junk spectrum became the home for WiFi - a crucial, multibillion-dollar industry. A platform for massive technological innovation. A huge increase in quality of life.
There's a lesson in that: Spectrum is really, really important. And not always in ways that we can predict in advance. Making sure that spectrum is used well is no less important than making sure our highways are used well: If the Beltway were reserved for horses, Washington would not be a very good place to do business.
But our spectrum is not being used well. It's the classic innovator's quandary: We made good decisions many years ago, but those good decisions created powerful incumbents, and in order to make good decisions now, we must somehow unseat the incumbents.
Today, much of the best spectrum is allocated to broadcast television. Decades ago, when 90 percent of Americans received their programming this way, that made sense. Today, when fewer than 10 percent of Americans do, it doesn't.
Meanwhile, mobile broadband is quite clearly the platform of the future - or at least the near future. But we don't have nearly enough spectrum allocated for its use. Unless that changes, the technology will be unable to progress, as more advanced uses will require more bandwidth, or it will have to be rationed, perhaps through extremely high prices that make sure most people can't use it.
The FCC could just yank the spectrum from the channels and hand it to the mobile industry. But it won't. It fears lawsuits and angry calls from lawmakers. And temperamentally, Genachowski himself is a consensus-builder rather than a steamroller.
Instead, the hope is that current owners of spectrum will give it up voluntarily. In exchange, they'd get big sacks of money. If a slice of spectrum is worth billions of dollars to Verizon but only a couple of million to a few aging TV stations - TV stations that have other ways to reach most of those customers - then there should be enough money in this transaction to leave everyone happy.
At least, that's some people's hope. Some advocates want that spectrum - or at least a substantial portion of it - left unlicensed. Rather than using telecom corporations such as Verizon to buy off the current owners of the spectrum, they'd like to see the federal government take some of that spectrum back and preserve it as a public resource for the sort of innovation we can't yet imagine and that the big corporations aren't likely to pioneer - the same as happened with WiFi. But as of yet, that's not the FCC's vision for this. Officials are more worried about the mobile broadband market. They argue (accurately) that they've already made more beachfront spectrum available for unlicensed uses. And although they don't say this clearly, auctioning spectrum to large corporations gives them the money to pay off the current owners. But even so, they can't do that.
"Imagine someone was given property on Fifth Avenue 50 years ago, but they don't use it and can't sell it," says Tim Wu, a law professor at Harvard and author of "The Master Switch." That's the situation that's arisen in the spectrum universe. It's not legal for the FCC to run auctions and hand over some of the proceeds to the old owners. That means the people sitting on the spectrum have little incentive to give it up. For that to change, the FCC needs Congress to pass a law empowering it to compensate current holders of spectrum with proceeds from the sale.
One way - the slightly demagogic way - to underscore the urgency here is to invoke China: Do you think it's letting its information infrastructure stagnate because it's a bureaucratic hassle to get the permits shifted? I rather doubt it.
Of course, we don't want the Chinese system. Democracy is worth some red tape. But if we're going to keep a good political system from becoming an economic handicap, there are going to be a lot of decisions like this one that need to be made. Decisions where we know what we need to do to move the economy forward, but where it's easier to do nothing because there are powerful interests attached to old habits. The problem with having a really good 20th century, as America did, is that you've built up a lot of infrastructure and made a lot of decisions that benefit the industries and innovators of the 20th century. But now we're in the 21st century, and junk won't cut it anymore.
Case Study: How Dave Matthews Band Has Embraced The Modern Music Industry In Extraordinarily Profitable Ways
from the but-that's-impossible... dept
Over the last few weeks, we've noticed a few of our usual critics attacking the basic claims concerning successful music business models, because some of the bigger concert tours this past year ran into trouble, and because some of those tours seemed to realize they were charging too much. Of course, it's unfortunate when people misunderstand basic statistics and what data shows. First of all, we've never claimed that concerts were the only way to make money in the music business. There are lots of ways to offer scarce goods that have nothing to do with touring. Second, the fact that some big tours had trouble -- and misjudged the market is hardly a condemnation of touring as a money maker. It just means that some tours misjudged the market. This is hardly a surprise. For years, many tours had underpriced tickets, leading to a valuable aftermarket for scalpers. But over the past few years, major acts and venues have tried to capture more of that for themselves, leading them to push the market ever higher. There was obviously a limit as to how high those prices could go, and people have started to figure that out. This is a good thing, not a bad thing.
But the key point to recognize is that just because some acts misjudged the market, that's not a condemnation of these other ways to make money. This claim reminds me of similar claims back in the early 1990s about the productivity of computers in the workplace. A few companies did massive implementations that were done poorly, and turned out to be way too costly. And with poor implementation and poor planning, the end result was that these new computer systems didn't increase productivity. Suddenly, there were claims and press coverage about how computers didn't lead to any productivity gain. The mistake was conflating a bad implementation with what would happen if you implemented stuff properly. No one here has said that "just touring" automatically is a successful strategy. That's because it's not true. Instead, a properly implemented multi-prong strategy, that fits with both what the musicians want and their fans want, can work quite well.
A perfect example of that may be the Dave Matthews Band. Slate recently did an article on the massive success of the band. A big part of that, not surprisingly, is a relentless touring schedule. However, as the article notes, DMB is making a lot more money touring than most people realize. It's consistently one of the top earning touring acts in North America, despite not being as "big" a name as the others on the list. In 2010, for example, DMB was the 3rd largest grossing tour in North America, after Bon Jovi and Roger Waters, and ahead of such names as Paul McCartney, Lady Gaga and The Black Eyed Peas. And they did this with significantly lower prices than most of the other acts in the top 10. While tickets to Lady Gaga concerts averaged $98 and Sir Paul's concerts went for a staggering $138.49, DMB's average ticket price was $57.38. And, as the article notes, they did this in a massively profitable way, unlike some concert tours which cost so much as to have them losing money. On top of that, the band uses the famed Grateful Dead model for keeping fans coming back for more: changing up their songs each time, and having fun going off on different jams, that make each concert unique.
But, of course, it's not just about touring. The band has done its own version of CwF+RtB, with over 80,000 fans paying $35 per year for its fan-club (and the 80,000 number is three years old, so I'd imagine the real numbers are now much higher). That's $2.8 million from the fan club alone. Similarly, the band appears to sell a ton of merchandise. The article notes that, back in 1998, the band would sell $200,000 in merchandise per day, while on tour. Obviously, that data is way out of date, but the band seems to have little trouble coming with good "reasons to buy" for its fans.
I have no doubt that the usual critics will mock this, claim it's an exception, or somehow complain that this is somehow "bad." But it seems clear that it's working great for the band itself, and they're quite happy with it. And, really, in the end, that's what these business models are about. Finding the right mix for bands to connect with fans in a meaningful way, while setting up the structure that allows those fans to support the band. DMB seems like a perfect example of a band doing this on a massively large scale.
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Fruit Flies Teach Computers A Lesson - Science <b>News</b>
Insect's nerve cells are model of network efficiency.
Great <b>news</b>: Elected officials know less about the Constitution <b>...</b>
Great news: Elected officials know less about the Constitution than the public.
<b>News</b> Corp considers MySpace sale, what happened? - Lost Remote
After slashing 47% of its staff earlier this week, News Corp is considering selling the struggling MySpace, among other strategic options, Bloomberg reports. MySpace relaunched as an entertainment hub in October, and a month later, ...
Thursday, January 13, 2011
online reputation management by mail
This resort also features three championship online reputation management by mail golf courses with 18-hole and these include Woodlands, Crosswater and Meadows, plus a 9-hole putting course. In the event that you are organizing a family vacation, this resort provides programs for children during specific seasons.
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The Sage Springs Club and Spa was opened during 2002 and extends over 35,000 square foot. This spa provides a wide selection of therapeutic beauty and body treatment, like natural body scrubs, aroma therapy body wraps and personalized facials.
NFL Lockout <b>News</b> Roundup: January 13, 2011
The quick summary: nothing has changed and the NFL and NFLPA are as far apart as ever. Here's the latest news: Kevin Mawae and the NFLPA appear to think that the owners are keen on reducing the amount of money ...
Headless body and pipe bomb near school rattle Evanston - Chicago <b>...</b>
A bomb specialist enters Fitzsimons Park near Nichols Middle School in Evanston on Tuesday. (José M. Osorio/ Chicago Tribune) In the dead of night, an explosion ripped through Evanston's Fitzsimmons Park, shaking houses and waking ...
Bruno Mars Continues Hot 100 No. 1 Rotation with 'Grenade <b>...</b>
Bruno Mars circles back to the top of the Billboard Hot 100, as Grenade once again replaces Katy Perry's Firework at No. 1 (1-2).
Monday, January 10, 2011
Im Making Money
The openness and transparency WikiLeaks has given us is invaluable—which is why I’m donating $20,000 to get its founder out of jail.
Yesterday, in the Westminster Magistrates Court in London, the lawyers for WikiLeaks co-founder Julian Assange presented to the judge a document from me stating that I have put up $20,000 of my own money to help bail Mr. Assange out of jail.
Furthermore, I am publicly offering the assistance of my website, my servers, my domain names and anything else I can do to keep WikiLeaks alive and thriving as it continues its work to expose the crimes that were concocted in secret and carried out in our name and with our tax dollars.
We were taken to war in Iraq on a lie. Hundreds of thousands are now dead. Just imagine if the men who planned this war crime back in 2002 had had a WikiLeaks to deal with. They might not have been able to pull it off. The only reason they thought they could get away with it was because they had a guaranteed cloak of secrecy. That guarantee has now been ripped from them, and I hope they are never able to operate in secret again.
So why is WikiLeaks, after performing such an important public service, under such vicious attack? Because they have outed and embarrassed those who have covered up the truth. The assault on them has been over the top:
**Sen. Joe Lieberman says WikiLeaks "has violated the Espionage Act."
**The New Yorker's George Packer calls Assange "super-secretive, thin-skinned, [and] megalomaniacal."
**Sarah Palin claims he's "an anti-American operative with blood on his hands" whom we should pursue "with the same urgency we pursue al Qaeda and Taliban leaders."
**Democrat Bob Beckel (Walter Mondale's 1984 campaign manager) said about Assange on Fox: "A dead man can't leak stuff... there's only one way to do it: Illegally shoot the son of a bitch."
**Republican Mary Matalin says "he's a psychopath, a sociopath ... He's a terrorist."
**Rep. Peter A. King calls WikiLeaks a "terrorist organization."
And indeed they are! They exist to terrorize the liars and warmongers who have brought ruin to our nation and to others. Perhaps the next war won't be so easy because the tables have been turned—and now it's Big Brother who's being watched… by us!
WikiLeaks deserves our thanks for shining a huge spotlight on all this. But some in the corporate-owned press have dismissed the importance of WikiLeaks ("they've released little that's new!") or have painted them as simple anarchists ("WikiLeaks just releases everything without any editorial control!"). WikiLeaks exists, in part, because the mainstream media has failed to live up to its responsibility. The corporate owners have decimated newsrooms, making it impossible for good journalists to do their job. There's no time or money anymore for investigative journalism. Simply put, investors don't want those stories exposed. They like their secrets kept… as secrets.
I ask you to imagine how much different our world would be if WikiLeaks had existed 10 years ago. Take a look at this photo. That's Mr. Bush about to be handed a "secret" document on August 6th, 2001. Its heading read: "Bin Ladin Determined To Strike in US." And on those pages it said the FBI had discovered "patterns of suspicious activity in this country consistent with preparations for hijackings." Bush decided to ignore it and went fishing for the next four weeks.
Supporters of Wikileaks founder, Julian Assange, hold posters during a protest in front of the British Embassy in Madrid, Spain on Dec. 11, 2010. (Photo: Stringer / AP Photo)
But if that document had been leaked, how would you or I have reacted? What would Congress or the FAA have done? Was there not a greater chance that someone, somewhere would have done something if all of us knew about bin Laden's impending attack using hijacked planes?
Bobo in the New Yorker this week (you can thank me for not excerpting the weird sexual second paragraph):
After the boom and bust, the mania and the meltdown, the Composure Class rose once again. Its members didn’t make their money through hedge-fund wizardry or by some big financial score. Theirs was a statelier ascent. They got good grades in school, established solid social connections, joined fine companies, medical practices, and law firms. Wealth settled down upon them gradually, like a gentle snow.
[....]
A few times a year, members of this class head to a mountain resort, carrying only a Council on Foreign Relations tote bag (when you have your own plane, you don’t need luggage that actually closes).
How many doctors and lawyers got own-your-own-plane rich via the gentle snow of wealth? No, don’t give me “maybe he means a two-seater”, you know that’s not what he means, and, no, making it by representing OJ Simpson or via a biotech IPO doesn’t count as count as “gentle snow”.
I’m not sure why he’s doing it, maybe to reinforce the notion of the deserving rich.
Update. This is weird and unintentionally comedic, but it didn’t creep me out as much as the paragraph about male lower bodies and female upper bodies, so I’m sharing it:
The server came to their table and took their orders. The restaurant seemed to specialize in hard-to-eat salads. Erica, anticipating this, chose an appetizer that could be easily forked and a main dish that didn’t require cutlery expertise. But Harold went for a salad, composed of splayed green tentacles that could not be shoved into his mouth without brushing salad dressing on both of his cheeks. None of it mattered, because Harold and Erica clicked. Most emotional communication is nonverbal. Gestures are a language that we use not only to express our feelings but to constitute them. By making a gesture, people help produce an internal state. Harold and Erica licked their lips, leaned forward in their chairs, glanced at each other out of the corners of their eyes, and performed all the other tricks of unconscious choreography that people do while flirting. Erica did the head cant women do to signal romantic interest, a slight tilt of the head that exposes the neck. Then, there was the hair flip: she raised her arms to adjust her hair and heaved her chest into view.
David Brooks Giving A Seminar At The Aspen Institute | 9:19 am |
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
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Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
bench craft company reviews bench craft company reviews
Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
bench craft company reviews bench craft company reviews
Harry Shearer: The <b>News</b> Doesn't Sleep -- Except on Weekends
News organizations have lately opted to hire fewer reporters, and to cut newsrooms' Saturday staffs. As NPR and Reuters issued erroneous reports of Rep. Gabrielle Giffords' death this weekend, the downside of such cuts seems clear.
Top <b>news</b> stories in China 2010
A Sinica podcast and lists from the Chinese media and Internet of the top news stories of 2010, year of the Tiger.
Denver Broncos <b>News</b>: Horse Tracks 1/10/11 - Mile High Report
Your daily cup of Orange and Blue Coffee .. Horse Tracks.
Friday, January 7, 2011
foreclosure investing
As we've been saying, there are two different worlds from the perspective of the economy, and here's a look at the two different worlds from the eyes of the media. - Ilene
Tinsel Tuesday – Market Decorations Make Us Merry
Courtesy of Phil of Phil's Stock World
I figured out how to get bullish!
Just read the Wall Street Journal. On the front page we have "Nuclear Pact Adds Backers" above the fold along with a fluff piece on the weather in Europe. There are 3 other featured articles on the front page of the World’s most widely-read financial paper and one is a fluff piece on the Jimmy Stewart museum, one is on the obscure concept of betting people are going to die (very fun and interesting but "The World’s biggest financial paper"?) and the last is on the SEC looking into Mark Hurd’s exit from HP. On the left is "What’s News" with about 30 summaries of articles in the paper so one would think you could look this over and have a really good idea of what’s going on in the World.
I see that "Spain said its regional governments are on track to meet their budget targets" and Dow component Boeing (who fell off yesterday) announced a "$1 Billion commercial satellite deal with the Mexican Government" and Blackstone is starting a $15Bn fund and TD is buying Chrysler Financial for $6.3Bn and (and this is a real XMas gift to Wall Street) "A Senate deal to fund the federal government until early March doesn’t include money to enact the health-care overhaul or stepped up regulation of Wall Street" and also that North Korea held their fire during a South Korean artillery drill. Wow! All seems right with the World, doesn’t it?
If I just read the WSJ, I find no reason to be bearish at all. Certainly there is no mention of Spanish Bond Yields rising 37% in a month to 5.5% at today’s $4Bn bond auction. There is no mention of China’s Vice Chairman of National Development saying that China "needs to prepare for a long- term fight against inflation" or that oil imports into China are expected to fall off next year as their economy cools down. You would think the fact that BAC, JPM and four other lenders facing a suspension of foreclosure activity under court order in New Jersey would be a news story or perhaps some mention of the 29-year high in sugar prices would be of interest to investors along with the limit-up trading in cotton to record highs for no particular reason other than the fact that it’s a commodity and speculators will buy pretty much anything in the current frenzy.
Gold is up for the third consecutive day, China’s money-market rates jumped to a 2-year high as banks raised their reserve ratios (this one didn’t even make the WSJ’s on-line Asia section, but you can real all about the World’s most expensive noodles!). Pimco said "Untenable Policies Will Lead to Eurozone Break-Up" according to the London Telegraph with Andrew Bosomworth stating: "Greece, Ireland and Portugal cannot get back on their feet without either their own currency or large transfer payments. The euro crisis is not over by a long shot. Market tensions will continue into 2011. The mechanism comes far too late."
Of course that’s nothing compared to Meredith Whitney’s dire warning of a financial meltdown driven by the collapse of US municipal bond auctions – a topic we discussed last Wednesday. And Meredith is just full of holiday cheer compared to David Rosenberg, who puts a fair value on the S&P at no more than 1,120 and makes many excellent points that the market is now 10% overvalued and gives "10 Signs that the Holiday Retail Season is Going Worse Than People Realize" or John Hussman, who has certainly channeled his inner Phil with "Things I Believe" too!
We are, then, getting to the root of my problem – I read too much! I wake up early every morning and read my various papers and web sites and, from that, I formulate a short-term and long-term investing premise. Perhaps I have forgotten what the Great Emancipator once said:
A lot of important stuff is cooking here at the end of the year. The headline battles about the tax cut deal and the deficit commission are very big deals, with short and long term implications both policy-wise and politically. You have probably seen enough writing about these headline grabbers (including from me) to keep you awake -- or put you to sleep -- well through the holiday season. But what is going on behind the curtain, away from the headlines, in the fight over banking policy and foreclosure fraud is just as important, and in some ways even more so. The budget deal expires in two years, some of the provisions (including the best one, unemployment extension) even sooner. The deficit commission report was a big moment in an important debate, but between partisan warfare, unpopular policy proposals, and short attention spans, most of what's in there isn't likely to be acted any time soon. But what happens in terms of the foreclosure fraud issue and the fight over banking regulations over the next year will determine whether we have a chance at escaping a Japanese style lost decade. I believe it will have more to do with whether the economy starts to revive than whatever mostly inefficient stimulus this tax cut provides, and I think it will have a bigger impact on whether Obama is re-elected than the tax cut deal or any other big issue coming up any time soon.
What crashed our economy was the speculative, out of control concentration of market power on Wall Street. That is what caused the housing bubble and subsequent housing price collapse, and until the massive underlying damage to our entire economy caused by that collapse begin to get healed, this economy will not get a whole lot better. With 25% of mortgages underwater, and more mortgages and household financial situations than that threatened by a weakened and unstable housing market, working and middle class consumers are not going to be going on any spending sprees any time soon.
The stimulus in the Obama-McConnell-Boehner tax cut deal, in spite of being bigger than the last stimulus, won't stimulate much except the excitement of inside the beltway pundits. The millionaires getting an extra $80,000 plus will buy a few more expensive meals and bottles of wine in expensive restaurants and maybe splurge on some new luxury items, but mostly they will save that money, investing it in safe bond deals while they wait for the economy to recover -- because as corporations have shown the last two years, you can be awash in cash but still not invest it in making new products if you don't think there is anyone out there buying. Middle class folks will tend to spend any extra dollars they have more on lowering their debt and adding to their savings, because with their biggest financial asset -- their home -- worth nearly as much as they thought it would be a few years, they know they have to shore up their financial position. The only folks actually spending more as a result of this deal are the unemployed and poor, simply because they have no choice -- they will be using the money to buy groceries and pay utilities and rent.
There is one other problem with this stimulus, and this is one the macroeconomists aren't getting: the vast majority of this money is going to preserve the status quo. It is stimulus in the sense that it is a lot of government money, unpaid for by any other budget cuts or long term tax hikes, but in terms of how real people will feel it, it is the status quo. People currently getting unemployment comp and various tax credits -- EITC, etc -- will still be getting them. People's tax rates will stay the same, because this is simply an extension of the tax cuts that have been in existence now for 10 years. To the vast majority of Americans -- still hard pressed, still squeezed by higher costs in necessities, still with a lower value home, still worried about their or their family members' jobs- there will be no boost in their take home pay or earnings potential, no new jobs actually being directly created like in the last stimulus bill. I am sure that many folks are happy to hear their taxes won't be going up, but they will have no extra money to buy no new things and no extra confidence that the economy will suddenly get better.
Which brings me back to banking and housing policy. This kind of ineffective weak tea stimulus is the only kind Republicans will be giving Obama in the next two years. But there are ways to significantly boost the economy right now that, between the Obama administration and the state Attorneys General negotiations with the big banks, can actually be done: write tight regulations around the financial reform bill, especially when it comes to issues like the swipe fees that directly pit the Wall St. bankers against main street business; have the DOJ prosecute bankers for using their market power to distort and harm the economy; and especially right now, force the bankers to write down mortgages. If the banks wrote down the mortgages of 5,000,000 underwater homeowners to the level the house was now worth in the market, so that they could stay in their homes and stabilize their financial condition, two very important things would happen economically. The first is that the housing market would finally begin to stabilize and recover- neighborhoods would no longer be riddled with abandoned homes and unkempt properties. The second is that all those homeowners, their debt reduced and their long term finances stabilized, might actually start spending money again: the multiplier effect would be big. Wall St will go into high pitched whining mode, but according to numbers one economist showed me, the profits that doing this would cost the banks would only amount to half the bonus money they paid out the last couple of years. The banks will scream bloody murder, but they will be just fine if we force them to write down these mortgages.
This is also actually the right thing, the moral thing, to do. The big banks on Wall Street destroyed this economy, and made out like bandits in the process. It should now be up to them to have to sacrifice to make things right again. But -- with all other possibilities of big boosts to the economy walled off by Congress -- this is also the only policy option the administration and the state AGs have to help get us through the bad times from this damaged economy.
Here's the other thing this does: it changes the political dynamics completely. It would show more clearly than any other thing the President could do that the Obama administration is on the side of hard-pressed middle class homeowners. And because the bankers will be squealing to high heaven, and their Republican friends on the hill taking up their cause, it will be obvious who is on what side. Pushing the banks hard to write down these mortgages is the best thing the administration could possibly do economically, morally, and politically.
The administration as a whole, which includes a lot of different components, does not yet see this. I think Elizabeth Warren gets this, and from what I am told some of the lawyers at DOJ get it and are chomping at the bit to exert legal pressure on the banks. Some of the political staffers I talk with are starting to see this dynamic as well. However, Treasury certainly doesn't seem inclined in this direction, and certain agencies especially the Office of the Comptroller of the Currency are completely in the tank for the bankers. One state AG told me that the "OCC has the attitude that the banks are perfect", and are resisting the AG's investigations and negotiations in every way they can.
I don't know what will happen with the administration. I am hopeful that it will sink in soon that the economy isn't going to get better very quickly, and that the political team will realize that taking on the big banks on behalf of hard pressed homeowners is a political winner. But no matter what the administration does, I do hold some hope for the state AGs as they negotiate with the banks. They are led by Tom Miller, an old friend of mine from Iowa and one of the most honest and pro-consumer politicians I know. Tom is meeting today with community activists from around the country, and I know that his heart is with them. Whatever the Obama administration is doing, I have hopes the AGs can put enough pressure on the banks to move this in the right direction.
If we can finally start getting to the heart of the problem -- the bankers and irresponsible system they created -- we can finally start rebuilding this economy. That will be a fight, a big one because no politician likes taking on these banks. But that kind of fight might actually start moving our politics in a better direction as well.
Cross-posted at my home blog, OpenLeft, where you can find all of my writing on Wall Street, the economic crisis, and U.S. politics in general.
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