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Dec 20, 2008

CLIP: Dataopedia: Quick Snapshot of Quantitative and Qualitative Site Metrics

DataopediaIf you're in the practice of researching sites - trying to get a better idea of Web traffic or metrics - you've likely developed a workflow for gathering your information. Start with whois, jump to Compete, head over to Alexa, check Quantcast, search on Google, search on Twitter, and so on and so on. Even with a saved set of tabs or a handy bookmarklet, you're jumping all over the place.

Now, you can get at all of that information with one simple search at Dataopedia, a metasearch engine for Web site data.

imgDataopediaRWW.jpgDataopedia hits all of the high points for Web metrics. Searching for a particular URL provides you with rankings from Google Page Rank, Alexa, Compete, and Quantcast, four of the primary sources I check on a regular basis. It also provides whois information, one of those most basic resources that always contains nuggets of interesting information.

But the service goes beyond those traditional lookups to provide more details on the site and its offerings, serving up a few extra data points that round out the the typical traffic and visitor information. Dataopedia also searches YouTube and Flickr for multimedia associated with the site. It looks at social news networks like Delicious, Reddit, and Digg to help provide insight into the site's popularity. And it checks Technorati, Google News, and Twitter for other mentions of the site.

There's also something interesting buried at the bottom of the site profiles: an ability to comment on the site using Disqus. While that's not likely to have the reach of a Google Search Wiki, it provides yet another way to gather details about the site and its reputation.

Dataopedia does a nice job of gathering quantitative and qualitative site metrics in a single spot. And its tab structure makes the information easy to consume. I'm planning to use it on a regular basis to get more details about the sites I'm planning to cover, because you never know what it might reveal.

To try it, visit Dataopedia and enter a URL into the search box.

KillerStartups Launches Dataopedia, A One-Stop Shop For Information About Websites
by Robin Wauters on December 19, 2008

KillerStartups, or rather its overarching company Startups.com Networks, has been in the news lately. First, they picked up Startups.com in a killer deal, next thing you know they’re launching their own web applications (Twingr). Now, they’re introducing the strangely named but quite usefulDataopedia, which is meant to serve as an information resource for websites.

It’s actually very useful, even if the idea isn’t exactly new (Quarkbase, for example, is verysimilar if not exactly alike). Just as you would use our own Crunchbase for information about companies, Dataopedia gives you a run-down of all the data it can find about a website you provide an URL for (including Crunchbase data, in fact). The web service aggregates data from dozens of sources in combination with a number of public APIs.

It’s valuable to have all this information in one place, and it’s plenty: expect data about traffic (arguably from the poorest source available, Alexa, although there are embedded graphs from Compete and Quantcast too), screenshots, names of people involved, WHOIS information, Google PageRank, multimedia links and embeds, jobs, office locations, and so on.

The web service comes with a nice set of features that make it easy for you to fetch data the way you choose. Send a website URL to a custom e-mail address and you’ll receive a reply in HTML format with all the information about that website. Browsing on a smartphone? Dataopedia has mobile versions that can be consulted with most devices. Firefox user? Get the bookmarklet, add a custom searchbox or install the add-on (coming soon). And my personal favorite: send a Twitter message to @dataopedia with a URL and you’ll get a tweet back with a link to the appropriate Dataopedia entry.

CLIP: NewsMixer: An Innovative Community News Framework

NewsMixer: An Innovative Community News Framework

With the apparent death of newsprint now upon us, journalists and others in the business are struggling to come up with a new model to save their industry. One new attempt to do so is the recently launched site News Mixerdeveloped by a group of Medill School of Journalism students in conjunction with the Cedar Rapids Gazette. The site, integrated with Facebook Connect, lets users read and respond to stories as well as share them with their online friends.

News Mixer is still a little rough around the edges, but it has some great features that has news industries professionals taking notice. Upon your first visit, you will be prompted to log in via Facebook Connect - there's no username and password to remember. You're then presented with a list of the day's top stories which represent a mix between local news reporting and citizen journalism. Beneath each article, you'll notice that the there are counts of how many "letters," "questions," "answers," and "quips" (comments) have been left by other readers.

These appear to be buttons you can click on, but they are only there for displaying the information. In order to access the commenting and feedback features, you have to actually click the headline to read the article. That's a very minor complaint, though, as it's the commenting feature that really makes the News Mixer site shine.

Facebook Connect Makes the News Personal

Because of the site's integration with Facebook Connect, News Mixer is able to highlight the comments left by your Facebook friends. This brings their thoughts to your attention which in turn delivers a more personalized news experience. (Unfortunately, I couldn't test that aspect of the commenting feature since I don't know anyone in Cedar Rapids, Iowa.)

If you choose to participate, you can select from a drop-down box of responses which will preface your comment. By default, the site suggested "Sarah Thinks." (Obviously, your name would display in place of "Sarah.") Other options include "feels," "wonders," "agrees," "disagrees," "hates," and "loves." These choices are very similar to the options presented to you at the microblogging site Plurk, a Twitter-like site for sharing status updates with friends. On Plurk, you are also given various color-coded prompts to choose from when posting a note, the same as News Mixer.

Another plus to News Mixer's commenting feature is its transparent nature. Instead of allowing for the creation of fake names or internet handles for use on the site, Facebook authentication means that people's real identities are being displayed. No more comments left by internet trolls hiding behind their mask of anonymity!

Today's commenting systems are largely broken, as social media pundit Robert Scoble noted today on his blog. The main reason for his post was to share ideas about the state of commenting and interaction systems on the web. He wanted there to be a way that he, as the writer, could call attention to some comments as being more important than others. He had also said that he wished there was a way to see the social networks of the people commenting. As it turns out, News Mixer has introduced a great example of how that second request of his could work.

Newspapers: Steal These Ideas!

Although at the moment the News Mixer site appears somewhat plain and clunky, you can see the potential is in its framework, if not its design. In fact, the press release even notes that the New York Times interactive news technologies editor Aron Pilhofer encouraged media industry members to look at News Mixer, adding that there were "bits and pieces of it I'd like to steal right now."

We would encourage others in the industry to borrow some of News Mixer's ideas as well. It's not too late to save the daily paper - it just takes some fresh ideas. Like Rupert Murdoch recently said, the time for doom and gloom is over - the internet is really just a huge new market ready to be tapped. We agree. Now is the time for innovation because...well, it's either innovate or die. Hopefully most will choose the former.

Why blogging comments suck

The other day, Gary Shapiro, the guy who runs the Consumer Electronics Show in Las Vegas, dropped by and left a comment here. There were a few problems:

1. My commenting system caught his comment in moderation, so people didn’t see it posted until I took it out of moderation right now.
2. No one probably knows who Gary is and thinks he’s just another random commenter. Some comments ARE more important than others, but there’s really no way for me to point out Gary’s comment without doing a new blog post. Even then, if you happen only to see the post that Gary commented on you’d never know that Gary’s comment deserves more attention than the other 54 comments left there.

How do you fix this? Not easily. I wish there were a system where I could tell my readers when a comment came in that deserves a lot more attention than the others. Also, I wish we could see the social network of the people commenting (I’d love to have their Facebook, Twitter, FriendFeed networks show up linked into their comment somehow and also have warnings when people leave me comments that have a huge amount of social capital, like Gary does).

How did I know who Gary Shapiro was? I met Gary once and have heard him speak. His comment gives a hint at what he does, but his comment that he “runs the show” could be easily missed by an untrained eye.

Anyway, I’m interviewing Tim O’Reilly this afternoon (leave questions I should ask him here on this FriendFeed cluster) and I’ll definitely ask him about how we can improve our interaction systems on the web to better expose those who have real impact on all of our lives.

Thanks Gary for dropping by and defending trade shows and I’ll see you at CES.

Dec 19, 2008

Note: Google’s three new patents to improve targeting in social media

Ed: Another blind men with the elephant problem. Contextual or behavioral inference depends on artifical intelligence rules. Cute stories aside, these methods don't scale. 

from Lightspeed Venture Partners Blog by 

IEEE Spectrum notes three new patent applications from Google that suggest how Google hopes to improve targeting for social media advertising:

The patents—Open Profile Content Identification, Custodian Based Content Identification, and Related Entity Content Identification—and the algorithms behind them would let Google find patterns in users’ profiles, pages, and friend lists in order to better target ads to them. Ideally, they would make the users more likely to click through.

Google’s Related Entity patent, for one, involves prying information from a user’s list of friends or user groups. But Google is not alone in this field. In June the social ad firm SocialMedia Networks said it had invented an algorithm called FriendRank that also scours a user’s friendship lists for friends whose names might be dropped in a targeted ad.

The Open Profile and Custodian patents would mine data from, say, a MySpace user’s profile and the profile of the MySpace page the user is visiting. The Open Profile patent, for instance, would consider a user profile like “I really enjoy hiking, especially long hikes when you can camp out for a few days. Indoor activities don’t interest me at all, and I really don’t like boring outdoor activities like gardening.”

Using smart language-processing algorithms to detect the user’s sentiments (“enjoy” or “don’t like” near “hiking” or “gardening”) and other linguistic cues, the system would then potentially serve up active outdoor sports-related ads to this user but avoid ads about more hobbyist-oriented activities.

Google is continuing to apply the adsense paradigm of contextual targeting, but expanding the definition of “context” to include the friend networks and the declarations of interests that are common to social network profile pages. MySpace’s hypertargeting is a similar approach.

Facebook’s engagement ads are a markedly different approach, charging for actions rather than using targeting to lift CPMs within display advertising. I think engagement ads could be a very interesting approach that takes advantage of the native behavior of “user affiliation” withing social networks.

I’m indifferent to which standard wins, but I do want a standard to emerge. We need a standard in social media advertising to unlock further scalable growth in this industry.

CLIP: The Power Brokers Behind Social Networks

Social Networkers Need a Social Network of Their Own

Clockwise from top left: Reid Hoffman, Dan Nye, David Sze, Peter Thiel, Marc Andreessen and Jeff Weiner

Yesterday, LinkedIn announced that founder Reid Hoffman was going to resume his duties as the Mountain View, Calif.-based social network’s chief executive officer. He replaces Dan Nye, who had taken over the CEO role from Hoffman in February 2007.

Hoffman will be assisted by interim president Jeff Weiner, formerly of Yahoo and an executive-in-residence at both Accel Partners and Greylock Ventures, positions he will maintain. The news made me think how close-knit the social networking companies are in Silicon Valley -– sort of like a private social network.

  • Jeff Weiner was EIR at Accel and Greylock, both investors in Facebook.
  • Greylock is also an investor in LinkedIn.
  • David Sze of Greylock is on the board of LinkedIn and is an observer on Facebook’s board of directors.
  • Hoffman is an investor in Facebook.
  • Marc Andreessen, co-founder of social network Ning, is an angel investor in LinkedIn and sits on Facebook’s board.
  • Peter Thiel, co-founder of PayPal, is an investor in LinkedIn and Facebook, as well as a Facebook director.

If the list keeps expanding along these lines, perhaps at some point they’ll formalize it? I bet that social network wouldn’t have any trouble selling ads…

Dec 18, 2008

CLIP: A drill-down of Online News Destinations Shows Yahoo!, MSNBC and CNN in a Statistical Dead Heat

Ed: News observations.
  • email handling converts to news reading, search does not
  • global broadcasts stronger than local broadcasts and newspapers
  • social network not tied to news - Myspace to FoxNews
  • real editors preferred to robotic news
  • highly fragmented
by Jack Loechner, Friday, December 12, 2008, 8:15 AM

As a corollary to yesterday's Research Brief regarding the effectiveness of advertising on viewers of news channels vs. all media viewers, here are some demographics of news viewers as well as key advertisers and their ad types in October and November. 

Top 10 Online Current Events and Global News Destinations Week ending November 16, 2008 US, Home and Work

Brand or Channel

Unique Audience (000)

 Active Reach (%)

Yahoo! News



MSNBC Digital Network



CNN Digital Network



AOL News






Tribune Newspapers



Fox News Digital Network



Google News



ABCNEWS Digital Network



Gannett Newspapers and Newspaper Division



Source:  Nielsen Online, NetView, November 2008

CLIP: A Potpourri Of Advertising Generalizations

by Jack Loechner, Yesterday, 8:15 AM

The Ehrenberg-Bass Institute for Marketing Science, at the University of South Australia, has collaborated with the Wharton School, at the University of Pennsylvania for the Empirical Generalizations in Advertising Conference. The aim of the conference was to take stock of what we do, and don't, know about advertising, as a base to try to understand how advertising might work in the future.  

A Research"Brief" cannot do justice to the output of a sophisticated, extensive conference on Generalizations in Advertising. And, the Center For Media Research makes it a point to not editorialize on research, white papers and newsletters, but rather let the reader pursue the excerpted data presented in greater depth for analysis and independent conclusions. However, the potpourri of fascinating, interesting and likely important conclusions drawn from the Conference and summary report is perceived by us to justify the suggestion that using the link included at the end of this Research Brief will open up new avenues for continued understanding of the value of research in the use of media.

The Empirical Generalizations in Advertising Conference brought together an outstanding group of researchers and practitioners in diverse areas of advertising who presented 44 different papers that summarize research-based knowledge in the field. Presented here are random excerpts of various papers.

Does it Make Sense to Count Clicks Anyway

Gian Fulgoni

"Consumers who delete cookies from their computers can skew advertising data," said Gian Fulgoni, Chairman, comScore, Inc. "If a cookie has been deleted you think you are reaching a new machine when you are really just delivering additional exposure. This results in an overstatement of up to 2.5 times in unique visitors and an understatement of frequency."

Robert Gunther spoke on the subject:

Fulgoni's research found that online ads have a positive impact even without clickthroughs. There is a lift in site visitation of 4 to 6 percent from display ads, even without a click. The increase in lift over a control is 65 percent in the first week and 45.7% in weeks 1 to 4.

"Even with no clicks or minimal clicks, online display ads can generate substantial lift in site visitation, trademark search queries and lift in both online and offline sales. The only reason we have the focus on clicks is that they can be measured. The Internet measures came out of the minds of technical people, not advertising people," Gunther says."

How Important are ads for brands

Robert Gunther

This paper looks at "quantity premium" - how much more a brand sells compared to similar brands, and  "margin premium" - Brand marketers want to see a high quantity premium and a high margin premium

  • Advertising and distribution increases quantity premium; discounting hurts
  • Strategy and price premiums: distribution and discounting reduce price premium; advertising increases it.

Simulating Advertising's Impact

Bruce Tedesco

Advertising analysis requires modeling methods based on dynamic principles. Dynamic models which have been around for some time but only recently applied to marketing, simulate what happens among consumers in a virtual marketplace. Running not a single simulation, but many, we are able to gain empirical direction from studying the effects and interactions that arise when inputs, like advertising, are varied.

Simulations are really about "emergent behavior... rather than calculat(ions)," says Tedesco

Search and Display Advertising Synergy

Gian Fulgoni

Display ad click rates are under 1%, on search they run about 5%. Sales impact of a search ad is greater than that of a display ad. Fulgoni summarized a number of comScore studies exploring the effects of search and display ads on site visitation and sales.

  • Display ads impact site visitation. Impact is greatest during the first week, an effect which lasts over the four weeks following the first exposure. This is true across categories.
  • Combination of search and display leads to greatest sales lift. Search and display synergy: 119% sales increase vs 82% for search and 16% for display only.

Advertising and Word of Mouth

Robert Gunther

Ed Keller, CEO of the The Keller Fay Group, said approximately 20 percent of word of mouth is stimulated by advertising. Influencers are three times as likely to talk about ads. Their studies, based on interviews since 2006 where individuals where asked what they talked about the day before, found 21. 6 percent of conversations included some reference to advertising. Ad-influenced WOM is about 20 percent more likely to include an active recommendation to buy or try the product.

"While people talk about online impressions, there are 3.5 billion brand impressions created every day through word of mouth," said Keller.


  • The rise of WOM does not portend "the end of advertising."
  • 20% of WOM is stimulated by Advertising. Influencers are 3x as likely to talk about ads
  • Ad-influenced WOM is about 20% more likely to include active recommendations to try/buy product.
  • About 1/2 of Online WOM i is teenagers. From a marketing standpoint, need to keep that in mind.
  • 75% of WOM is face to face; 15% is phone; 3% texting; 3% email; 1% chat rooms. About 3.5 billion brand conversations per day.

Digital Signage

A discussion summary of Digital Signage included these observations:

  • Shoppers are most responsive to "news" and least responsive to traditional brand messages.
  • Digital signs, whose messages could change by time of day, lifted store sales.
  • In an experiment with Eddie Bauer, store traffic increased 23 percent and sales increased over 10 percent when paper signage was replaced with digital signs that change during the day.

Focus on Multicultural Consumer

David Burgos


  • Basic advertising principles are generally valid across cultures
  • Culturally targeting advertising tends to work better than non-targeted communications
  • Accept multicultural when relevant, and distinguish those areas where multicultural is the same as the wider society

When Advertising Works

J. Walker Smith and Bill Moult


  • Recently recalled ads were more likely to have left a positive impression than if they were on digital media
  • Prior awareness of the brand is related to positive impression of the ads. Key implication - you can improve the effectiveness of ads by doing things to help make people aware of the brands

Clutter May Have Less Impact Than We Think

Erica Riebe of Ehrenberg-Bass Institute for Marketing Science

1. When more advertising is aired, audiences recall more ads in both "low clutter" and "high clutter" conditions.

2. Audiences remember a larger percent of ads they are exposed to when they see/hear less ads in total. There were advantages to the low clutter situation.

3. Audiences are not better able to identify the brand when the ads are in a less cluttered position.

4. Ads recalled in high clutter are of better quality/more likable on average... "Creative is very important."

Six Degrees of Engagement

Mike Bloxham, Mike Holmes

More than half of all media exposure occurs concurrently with a non-media life activity, such as eating, change a diaper, etc.

When TV is the primary medium, it dominates consumption. But when another medium is added, TV takes on a secondary role, becoming a background medium. The switch from foreground to background has implications for advertising.

TiVo, Friend or Foe

Joel Rubinson, CRO of The Advertising Research Foundation

Penetration of TiVo and other DVR players has reached 25 to 30 percent. Half of all DVR owners fast forward through ads and 50 percent of television viewers multitask, Consumers who fast forward through ads on TiVo may actually pay more attention to them.

"To fast forward ads you must give attention,"  Erik du Pleissis said. "Users have to pay attention to when they start and stop the process, and they see compressed versions of the ads. This quick glimpse can be as effective as a full ad, he found in studies with subjects in theaters and other research... If an ad has been seen before, a fast forward ad is as effective as a full ad."

On the other hand, Duane Varan, Director, Interactive Television Research Institute, Murdoch University, said that studies of multitasking also show that the distraction of other activities can be  "devastating" to advertising impact.

Importance of Creative

Robert Gunther

A study of television advertising effectiveness by Len Lodish and colleagues concluded that If television advertising doesn't work in the short term, it doesn't work in the long-term either. If it works in the first year, its impact is doubled over the next two years. The implication is that companies should generate more than one campaign (3-6 campaigns in 3-5 test markets were indicated by studies at Campbell's ) and screen with pretests to choose the best one to run.

More information about the Empiracle Ad Generalizations EG Conference can be found at the Ehrenberg-Bass Institute here, or the Wharton SEI Center here  

CLIP: Facebook Growth Explodes, Site Reaches 140 Million Active Users

Ed: Is social network counter-cyclical?

If there's any doubt that Facebook is rapidly becoming the next big thing in social networks, you only need look at their recent statistics. According to new reports, in recent weeks Facebook is growing at a rate of 600,000 users each day, up from 300,000 to 400,000 users per day earlier this quarter. The company is also reporting that, as of today, they have reached 140 million active users.

The new data being reported on Inside Facebook is based on their estimations, and not any actual release from the company. That being said, the Inside Facebook site notes that the 600,000 users per day is only a roundabout number - the true number could possibly be even higher: perhaps even as high as 700,000 users per day.

If Facebook continues at this rate, by the end of December they could add a total of 20 million new users. By March, the company could then reach 200 million active users - which would mean they doubled their userbase in less than a year's time. The majority of this growth (70%) is taking place outside the U.S.

To handle this growth, a poster on Slashdot notes that "the Facebook engineering team has been tweaking its use of memcached, and says it can now handle 200,000 UDP requests per second. Facebook has detailed its refinements to memcached, which it hopes will be included in the official memcached repository. For now, their changes have been released to github."

Facebook's Users Are Active and Engaged

Facebook did release some figures of their own today that show their users are actively using the site and engaged with the content. Here's what they reported:

General Growth

  • More than 140 million active users
  • More than half of Facebook users are outside of college
  • The fastest growing demographic is those 25 years old and older

User Engagement

  • Average user has 100 friends on the site
  • 2.6 billion minutes are spent on Facebook each day (worldwide)
  • More than 13 million users update their statuses at least once each day
  • More than 2.5 million users become fans of Pages each day


  • More than 700 million photos uploaded to the site each month
  • More than 4 million videos uploaded each month
  • More than 15 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) shared each month
  • More than 2 million events created each month
  • More than 19 million active user groups exist on the site

International Growth

  • More than 35 translations available on the site, with more than 60 in development
  • More than 70% of Facebook users are outside the United States


  • More than 660,000 developers and entrepreneurs from more than 180 countries
  • More than 52,000 applications currently available on Facebook Platform
  • 140 new applications added per day
  • More than 95% of Facebook members have used at least one application built on Facebook Platform

Also worth noting is the data on mobile users released last month which revealed that the company has 15 million active mobile users using their site, having grown from only 5 million at the beginning of the year. Those aren't additional users, but are a subset of the 140 million who use the site from their mobile phones and other devices. We can't help but think those numbers were also aided by the September launch of Facebook's iPhone app, version 2.0. The new release, a huge improvement over the original, managed to pack in nearly every feature from social network including wall posts, status updates, the news feed, photos and more, all from the simplified iPhone interface.

Management Shakeup At LinkedIn: Reid Hoffman Takes Back CEO Role, Jeff Weiner As Interim President

Big changes at fast growing professional social network LinkedIn this afternoon. Founder Reid Hoffman has retakenthe CEO role, which he relinquished to former Intuit exec Dan Nye in early 2007. Nye is leaving LinkedIn in January, although the company says he will stay on as an advisor.

Former Yahoo executive Jeff Weiner is joining the company full time as interim President. Weiner is currently an Executive-in-Residence for venture capital firms firms Accel Partners and Greylock Partners, and he will maintain a loose relationship with the firms, he says. Weiner left his position at Yahoo in the early summer.

Last week the company grabbed a Google executive, Deep Nishar, to take over Hoffman’s current role as head of the products group at LinkedIn.

LinkedIn has raised $103 million in venture capital to date and has 11.2 million monthly worldwide visitors according to Comscore (October 2008).

What’s not clear is why all this is happening. LinkedIn says their revenues continue to grow dramatically - up 900% over the last two years (although they won’t say what their actual revenue is). When Hoffman stepped down as CEO in 2007 he said the company needed a different leader to grow it further. Now, he says Nye has done that job and it’s time for him to take back the reins.

The addition of Weiner is also quirky, and may explain the changes. Weiner was likely expecting a CEO role as his next job. He’s now second to Hoffman. Perhaps the company is using the interim period to see how he can handle himself leading the company. I wouldn’t be surprised to see Weiner take the CEO job at LinkedIn sometime in 2009, or else leave the company.

Dec 16, 2008

Note: Economists React: ‘Bursting of Petroleum Bubble’ Takes Inflation Down

Ed: Blind men and the elephant. Like the 1970's, when the price of oil first skyrocketed, pundits forecasted without prior experience. Here we go again. 

Economists React: ‘Bursting of Petroleum Bubble’ Takes Inflation Down

from WSJ.com: Real Time Economics

Economists and others weigh in on the record decline in consumer prices.

  • The composition of the report supports the interpretation that core inflation is slowing more quickly than we had anticipated. There are no obvious “outliers”, large moves in volatile components that are likely to be reversed next month. The closest to that are the large declines in the lodging away from home category, but those likely reflect real developments in the hotel sector where anecdotal evidence is of a sharp drop in demand. Vehicle price declines also contribute, but again the weakness of demand provides a ready explanation. And the rental components, which are a large share of the CPI, were on the high side (energy prices are a likely culprit as a correction for utilities included in rent tends to move in the opposite direction). Elsewhere, the declines appear fairly widely dispersed, consistent with an overall slowing. –Goldman Sachs
  • It is too soon to expect the strong dollar or the drop in commodity prices to push core inflation lower; this is all about demand compression squeezing margins. The pressure will likely intensify, and core inflation could now fall quite quickly. Headline now at 1.1% year-to-year; expect dead zero in December. –Ian Shepherdson, High Frequency Economics

  • The core was restrained by further decreases in new and used cars along with declines in hotel rates and airfares. Also, the personal care category showed some unusual softness due mainly to a bizarre plunge in the financial services subsector. Prices for gasoline and other energy-related items have experienced further declines in recent weeks, so we should see another drop in the headline CPI for December. However, the pace of decrease in coming months is unlikely to be as severe as that seen in November. –David Greenlaw, Morgan Stanley

  • The 0.2% decline in core goods prices might indicate that the rapid slowing in core inflation is simply pass-through of declining commodity prices. However, core services inflation, which usually runs about 0.2-0.3% higher than core goods inflation, slowed to a modest 0.1% pace, suggesting that the slowing in inflation is becoming more widespread and likely also owes to the declining levels of resource utilization. With the three-month annualized run rate on core CPI inflation now only 0.4%, we would anticipate that the prospect for deflation is being discussed as a very real possibility at today’s FOMC meeting. –Michael Feroli, J.P. Morgan Chase

  • We do not think that the decline in the CPI should be confused with a monetary deflation. The Fed has eased aggressively and has seen its balance sheet explode since the end of August. In our judgment, the monetary conditions for a sustained deflation are absent. However, Helicopter Ben is likely to be concerned about deflation and the Fed is likely to continue aggressive actions to expand its balance sheet over the coming months (given weakness in housing, we still believe that expansion will be through the purchase of mortgage-related assets rather than Treasuries). –RDQ Economics

  • The bursting of the petroleum bubble is unwinding the price pressures that had built up during the long run up in costs. That is good news for the consumer who now can pocket the difference. While households may not go out and party with the money, they do seem to be using it to clean up the mess on their balance sheets. When the rebound hits, households should be better prepared to start spending again. We could see a large increase in consumption at that point, especially if, as expected, confidence will surge as well. –Naroff Economic Advisors
  • Compiled by Phil Izzo

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