portlandpage

Economic Cold War Looming with China -- Atlantic Monthly

2008-01-31T09:56:00.000-08:00

Really worth reading. The "partnership" with China is the biggest economic gamble since the revolutionary war.
I like how he puts it in cold war terms. If either side pulls the plug, we're both screwed.

Atlantic Monthly Chinese Dollars Jan 08 article

Chinese can't dump their hundreds of billions without devaluing the US currency. Lower US currency not only devalues the US debt (mostly treasuries) they already hold, but also makes their products more expensive to Americans.

It's as if you went to a store and bought a TV. When you try to pay for the TV, the store owner says "why don't you hold on to it for me. Safe keeping." Now you have enough cash to buy a stereo and the owner does the same thing. You're basically buying stuff for free, which means you have the cash to buy more stuff. You owe him a lot of money, but if he collects, you ain't buying anything else.
The article argues that the Chinese population pays the price. The average person in the US has a TV and Stereo they bought with money borrowed from the average Chinese person who doesn't own squat.

Something that bugs me: Throughout history, when one country has a huge and growing debt they can't repay to another country, they generally find a reason to declare war (and cancel the debt). That would be no fun

AMD loses $2B, good news for shareholders?

2007-12-14T10:20:00.000-08:00

Did you see that thing about AMD writing down a couple billion on ATI acquisition?

People are acting like it's bad news, but I think it's actually almost completely positive for AMD.

Before the write-down, AMD was required to depreciate the goodwill over many years. The depreciation reduces income, which reduces taxes, so that's cashflow positive, but makes the Net income look smaller (bad publicity). So now...

By "writing down" goodwill instead of depreciating it:
- They get to take the huge tax deduction up front for the loss, so they probably won't pay any taxes for several years, which will boost their net
- It's a devaluation of an asset instead of an expense, so they will improve their reported net (because no depreciation will be subtracted from income)

So I think this is going to be good for them in a real cash flow way (no taxes in the near future) and in a fake enhancing of reported Net Income way. Everyone knew AMD paid a premium. You can't buy a healthy tech company without a big premium, so I don't think the write down itself revealed anything material people didn't already know. Now they'll have higher income (reported) and lower taxes. A nice combo.

Not that I'm going long AMD!

Robot Revolution ETA 2015

2007-12-08T10:17:00.000-08:00

I thought this was kinda fun: You can now buy a 1 teraflop super computer from HP that you can plug into a normal wall socket and doesn't need a data center. It costs about $50K. (That's about 50x faster than a pretty high end desktop).
For comparison, in 1998, the fastest civilian super computer in the world was the IBM Blue Gene with 9000+ Pentiums running at 1.3 teraflops and costing over $5MM. They've become dramatically cheaper in the last couple years w. all the multi-core chips.
A $100K computer in 2006 costs about $20K today (same performance).
Estimates are that all of the top 500 super computers in the world will run over 1 Petaflop by 2015.
Asimov's "positronic brains" always ran at 1 petaflop, so, not only are we going to run out of energy, have half the coastlines in the world under water and enormous droughts, but there will be a robot rebellion too. Watch your Roomba for odd behavior.

Apple is Dead! Amazon Music downloads are actually pretty good

2007-09-25T09:30:00.000-07:00

So... Amazon's MP3 download store opened today (Sept. 25 2007) and it's actually good! The only negative I've got is selection, which ought to improve since the music labels have a huge incentive for helping an Apple competitor. Otherwise: Better Quality than the Apple/iTunes music store. Same price (or cheaper). No DRM (digital rights management - aka copy protection) so it's easier to put on other computers or non-iPod devices. Works well with iTunes (if you download the optional Amazon downloader - required for full Album downloads - it will automatically add the purchased music to iTunes if you want). I didn't see a reason to buy from Apple's store vs. buying a CD. My MP3's converted (ripped) from CD are higher quality, usually the same price, and have no copy protection. Amazon downloads are the same quality (256 bit average VBR) I would encode myself, cheaper ($8.99 for the current Nickel Creek Album for example - vs $14.99 for the CD CD) and all around pretty easy. I'm tempted to use the Amazon music download much more than Apple's. And I own an iPod (like most music downloaders), so I'm the target audience.

Solar Energy - Wait till October if you're a Business

2007-05-25T12:43:00.000-07:00

Solar energy projects should wait till October. That's a little counter-intuitive. After all, there's not a lot of sun in October in Portland.
The thing is, solar projects are driven by both the desire to help the environment, and to save money. The money part is the big factor here.
Oregon House Bill 2211 is nearly law and will not only increase the Oregon Business Energy Tax Credits to 50% (with limitations), but will also allow you to add it to the Federal Tax Credit (30% through 2008). That's 80% of your cost in tax credits.
Tax Credits are better than cash because they're AFTER TAX money. If your tax rate is 40% that's about 1.66x better than cash. On top of that, you get to DEDUCT the full cost of the project. If you do the math, Solar is win-win.
For God's sake confirm this with accountants, Dept. of Energy, the IRS and everyone else smart, because I may not know what I'm talking about.
Also, there's money from the utilities (aka Energy Trust of Oregon). $2.25 per watt you generate if you're a business. That's $2,250 per kW.
If you're not a business there are still Federal & State credits and incentives to be had.
Enough so your project may be break-even if you do a small one.
solar power oregon incentives tax credits

DO NOT nuke your Sponges! (!)

2007-01-28T13:59:00.000-08:00

Do Not Nuke (microwave) your sponges to disinfect them. There are better ways.
1. You might burn down your house
2. Your microwave will stink.
I've had direct experience with the smelly microwave repercussion. Do you really want your microwave to smell like eau d' kitchen sponge? I ultimately had to toss an otherwise perfectly good Sharp microwave. Everything I cooked had that sour moldy odor.
Also, fire departments around the world are reporting kitchen fires from people nuking dry sponges. You need some dampness or the damned undamp things will can ignite (and that smells REALLY bad).
So buy new sponges. They're cheap.
OR, I've found that just using some bleach type cleaner (like Ajax)to clean the sink once a week does a perfectly good job of sterilizing the sponge.
nuke microwave sponges fire bleach ajax odor smell

Google Must be ... Rationalized!

2007-01-22T00:05:00.000-08:00

If I had any guts I'd short Google. They're nothing but a fast growing advertising company. 150 BILLION Market cap. Foo.
Though.... Omnicom Group (OMC) is the world's largest advertising/media company, so far as I can figure, and they only have about $10B in revenues (google is already at 9.3B). And Google has 3x their profit margin and 6x their growth (can't continue!)
But Google only has about 9x the market cap of OMC. In some sense, that makes Google cheap...
But how much can they increase sales?
US internet growth is slow and that's most of Google's revenue. They must be near ad saturation, at least in the US.
They're talking about buying billboards for pete's sake.
Ok. I don't have the guts to short them.
Maybe the Google-price will just keep going up.
That wouldn't be irrationally exhuberant
Though, as one famous economist said "If it is impossible for a trend to continue forever, it won't."
Some numbers:
Total US "Traditional" advertising 2006: $12 Billion
Estimated US Online and new media advertising: $7.6 Billion
google revenues advertising 2006 short

The iPhone really does run OS X (probably)

2007-01-14T00:32:00.000-08:00

A research company has reported that the main applications processor in the iPhone is made by Samsung. Samsung produces low-power PowerPC based chips for embedded applications (like the iPhone). Apple could easily run a stripped down version of a Darwin-based OS X on a PowerPC chip like that. It won't run as fast as a quad G5, but fast enough. And Apple is not required by their own license to publish the code if they don't want to (A Cingular rep says they won't). So... there is no reason to suppose the iPhone does not run OS X.
It probably does use some subset.OS X iPhone PowerPC Samsung

iPhone OS X is not really OS X

2007-01-11T11:05:00.000-08:00

The iPhone looks to be running on a Samsung provided ARM core processor. That means it's not running on an Intel (or PPC) core. That means it's not running OS X in any meaningful sense (Apple can brand toilet paper as running OS X if they like). Darwin, the BSD based operating system that underlies what Apple has previously called OS X does not run on ARM processors. The Darwin/Apple Public Source licensing agreement says the source would have to be made available if it is modified and sold (paraphrased. read it yourself). A Cingular rep has said the iPhone version of the OS source will not be made available. It will be closed, like the iPod OS and not Darwin. So if it ain't Darwin, it ain't OS X (in any meaningful way).An InfoWorld article on an FBR Research report breaks down iPhone component providers and lists Samsung as the chip maker for the main application/video cpu.
So, that leaves the question... What OS is this phone really running? (not Linux or the source would need to be open)
iPhone OS X Darwin ARM Samsung processor components

The price of Corn

2007-01-04T23:52:00.000-08:00

Estimates are that half the corn crop will be used for Ethanol as early as next year.
Companies that use corn for
sweetner
animal feed
food aditives and ingredients
corn flour

Are screwed.

CPO is one company that does that and only that. Their stock is actually close to an all time high.
The theory is that shortages of the high fructose corn syrup (hfcs) sweetner (because of corn shortages because of ethanol production) will raise prices enough to offset the higher corn costs.
That doesn't make much sense to me. If hfcs was that profitable, the corn wouldn't go to ethanol.
Plus I think most hfcs users will go to alternative sweetners. In fact, most of the hfcs business is fake.
Sugar tariffs make sugar artificially high (the US uses more corn syrup than anyone else because of that).
Good article last month in the New Yorker economics column about that.

Citigroup analysis says the sensitivity of CPO earnings to HFCS prices is much greater than sensitivity to the cost of corn so the upside is greater than the downside. But I think they're just not taking into account a real corn shortage.
The real analysis that has to be made is profitability of ethanol production (subsidized as it is and with state mandates to produce a certain amount of ethanol fuel to be mixed with gasonline) versus the profitability of HFCS production (the most profitable current use of corn besides selling ears at the supermarket).
HFCS is buried by ethanol right now. It just seems inevitable to me that there simply won't be enough corn available to make ethanol and HFCS -- so HFCS will disappear except in quantities where its not replaceable.
Other sweetners (including sugar which is actually cheaper if imported and not tariffed) will displace corn syrup.

SHORT CPO!
Maybe.
I've gotta read more...corn syrup sweetner prices ethanol stocks cpo

Angry Money

2007-01-04T20:07:00.000-08:00

Watch Mad Money on CNBC! BUY THE BOOK! Or not.
Do you really want your money to be mad (at you?).
The Cramer Mad Money show on CNBC is fun and loud and even has some good information. Unfortunately it's got bad info mixed in there and it isn't always easy to tell the difference. Don't trust every number you hear and, as Cramer always says "do the homework."
The best part of the show are Cramer's insights into particular favorite stocks he usually discusses at the top of the show or towards the end (after the goofy off the cuff lightning round). He's an original thinker and he comes up with great angles on how a stock might grow that isn't necessarily the main thrust of the company. For example, he loves Allergen for the vanity and aging market because they make some wrinkle smoothing stuff. But even the CEO tried to tell Cramer their main business is optical (e.g. contact lens solution). But Cramer shut him down cause that wasn't fun. Yet the contact lens stuff might turn out to be the growth area for them because their big competitor Bausch & Lomb is collapsing.
Cramer gives you a story - backed up by some numbers. Just be wary. They may not be the story -- or even the real numbers...
Cramer Mad Money stocks Allergen

Things are Looking Up

2006-11-07T11:31:00.000-08:00

Secrets of the Superoptimist

The Classic Guide to Acheiving Momentary Peace of Mind.

Definitely recommended for all who find themselves in times of impending doom. And for George W. Bush (Who could write his own book.)
superoptimist optimist brighter side greener grass

Is Health Care Spending Good for the Economy?

2006-10-12T09:39:00.000-07:00

The trouble with the argument that health care spending is bouying the economyis that it's only true if people wouldn't be spending that money on something else more useful. That seems on the surface to be true only true in the case of marginal families that need to use creditto survive and have growing debt.
If health care spending is good for the economy, then the income spent on health care should produce more jobs.
Is more money flowing in the US economy because of this spending?
There is one solid argument for that: Health care expenses have a very big labor component and a very big domestic component compared to, say, buying a Honda--or almost anything at Target.
So even if Health Care is just a spending alternative, it may be an alternative that is more productive for the economy in terms of jobs and domestic production.
ON the other hand, the traditional argument against spending for spending's sake is that money spent on health care does not improve productivity. Instead of a company buying a new factory, they buy health insurance.
It's like tossing money down a hole. Some say that's what should happen and it's what Keynes would propose.
That's distilling down to a catch phrase. I think he would only agree that government spending (or wasteful spending in general) is good for the economy if there was an illiquidity crisis (in the case of The Great Depression, mostly driven by deflation and tightening money supply. No one buys something expensive or invests if they know the price will be lower in a week. No one spends money or invests if there's no money to be had!).
But in the current economy, there is no deflation and interest rates are low. No liquidity problem. That means there isn't some big pile of money sitting around in mattresses that has to be extracted (by higher health care expense). The money available for productive investment is well employed.
The counter-argument would ask What Is Productivity? Money spent on health care helps grow the health care infrastructure (there isn't a lot of evidence that the growing infrastructure reduces demand. How many industries have as their goal the reduction of demand? Nominally, hospitals and doctors are in the business of killing their own business and making everyone healthy and happy.) The money spent on health care in the US seems only to spawn more demand and more money being spent on health care. Why? That's debatable: inefficiency? hospitals catering to rich patients? Skimming by HMO management? Most people would say the whole fragmented system is horribly inefficient vs Europe or almost any developed country.
In any case, health care spending seems to create a bigger health care industry.
Is that unproductive if it isn't making people healthier?
If a person buys either a Chevy or a Cadillac, most would say buying the Cadillac is better for the economy. But in terms of investment or actually creating an asset that improves the economy, the Cadillac is not much better. The Cadillac may make its owner happier, but it produces no measurably superior investment (enhancement of the future economy) than the Chevy. Both get the owner to work on time. The spending will lead to more Cadillac production investment. Just as health care spending will lead to more health care infrastructure investment (which seems to do nothing for improving the health of the average US citizen, but does lead to more spending on health care.
So the difference between spending on the Cadillac and the Chevy is a sink hole in the same sense health care dollars that do not improve health care are a sink hole. Wasted.
Yet it seems like that is exactly the kind of spending that keeps the US economy going: People buying stuff they don't need--stuff that serves little productive function, but costs a lot of money. Status, branding, advertising... all keep the US economy going.
Health Care dollars that do not improve health care are more of the same! As American as an Escalade.
health care spending keynes consumer economy economics

Apple's iPhone will be an Exclusive!

2006-10-01T09:31:00.000-07:00

Apple will have a phone! Rumors (with pictures, even) have been around since 2001...yet no phone. But there has to be one. Without an iPhone the iPod dominion will end. If competing phones can play music, have access to good music stores and competitive prices, look good and have a good interface, who is going to pay another $250 for an iPod just for the privilege of carrying yet another device? Pockets just can't deal. Eventually LG or Sony or someone will get it right.
So Apple needs to have a phone. Why there is no phone yet is the real question. The answer seems to be that Apple must partner with the mobile phone service providers -- Verizon, T-Mobile, Cingular, etc, the gatekeepers (them and the FCC) for any new phone hardware. But these companies want their own interfaces, branding, music store and so on. And they want a say in the phone design (horror).
Apple can't allow that (for good reason! Look at the mucked up piece of pretty junk the LG Chocolate turned out to be).
So, how can Apple gain the leverage it needs to control the hardware design and iTunes store connection?
The answer...
They will make an exclusive deal. The providers know that millions are waiting for an iPod phone. They know an exclusive means new customers and customer loyalty. And these will be customers who are into downloading music and other extra $ services--the most wonderful customers they could dream of. So a single provider will give up its perogative to alter the design and impose their ugly interface requirements in exchange for that Apple exclusive. They gain little or nothing if Apple offers the iPhone to every provider.
So Apple will make one deal with one Mobile phone company.
There have been dozens of rumors about imminent iPhones and imminent deals.
The lastest is that Apple has already come to an agreement with Cingular.
Apple iPod iPhone Cingular mobile exclusive

The Wall Street Journal is an Ass

2006-06-09T09:25:00.000-07:00

The Wall Street Journal had a brief article on the trade deficit numbers published today (6/9/06).I know it's the WSJ and all, but are these guys just saying stuff that makes no sense?
"The U.S. trade deficit widened 2.5% to $63.4 billion, pushed up by the high cost of imported oil, the Commerce Department said. The consensus forecast of Wall Street economists had been for the deficit to widen to $64.8 billion.
Separately, prices of goods imported into the U.S. rose 1.6%"
What do they mean "separately?" The prices rose, and the the trade deficit (measured in dollars) rose too. So of course, some of that trade deficit widening was due to the higher prices! What the heck to they mean by "separately?"
"Hawkish comments from a number of Federal Reserve officials in the past week have indicated the Fed's heightened sense of vigilance toward inflation, fueling hopes the U.S. central bank will continue lifting interest rates. Higher rates tend to boost demand for dollar-denominated investments."
I'm sorry. But this seems just as knee-jerk and dumb. YES. All things being equal, higher interest rates attract more investment. But you know what? Inflation discourages investment. So, if the Fed is worried about inflation, that ought to discourage investment. Unless the investors think they know better or are stuck with dollars for some reason (I mean, domestic savings will increase). I wouldn't think it was so dumb except it's all in one little paragraph with no apparent sense of irony (irony? WSJ? OK. Too much to ask.)
My head hurts.
trade deficit currency inflation

Tips for buying New Tile for remodeling

2006-06-04T10:49:00.000-07:00

Number One Tip for Buying floor and counter Tile:
MAKE SURE IT's IN STOCK! Sometimes the salesperson will tell you they can get it in a few days - or even 24 hours. If they don't have everything you need in stock don't buy it. You may need more and you'll wait (and the wait may be much longer than they say). You will need finish pieces (like the bullnose pieces with a rounded edge - and corner pices). Those may take even longer to get.
If the tiles aren't in stock and local, it's not worth it.
Number Two Tip:
Figure out what kind of finish pieces you need (as well as you can) and make sure they're available in the tile you picked.
Every tile has basic bullnose and corners (or nearly every tile). But you may need other pieces like "radius" or "v-cap" or cove moulding for where the floor meets the wall - and even corner cove pieces. Each different tile will have different finish pieces available. Find out what's available for your tile and make sure what you need is in stock and local.
Number 3 Tip:
Measure your counter, floor, stairs or whatever. Figure out how many tiles you will need in standard sizes (12x12" or 13x13" for floors for example). You can waste a ton of tile if your space is, say 25" wide and you get 12x12 tile. You'll waste lots and add cuts filling in that inch.
Number 4 Tip: Different tile has different roughness. Some tile is legal to use on stairs and other places where slip is an issue. Obviously you won't want a high polish tile there. Make sure the tile you buy is OK for the code for your use if it's for a floor area, stairs, entryway etc.
All tips learned the hardway. I hope it's easier for you!
tile remodeling tips pitfalls floor

Making Rain in a Virtual Economy

2006-04-23T12:16:00.000-07:00

Virtual worlds are pretty interesting and are getting a lot bigger.
Essentially they are private economies. Imagine an economy entirely run and owned by Sony.
Sort of like a company town - except work is replaced by play and so there is never a shortage of "employment" available (as long as there are paying members. Unpopular worlds do close sometimes though.)
Traditional advertising potential is less interesting than the idea of a virtual market with virtual property, possessions and even virtual status and social aspects for sale.
There was some talk of virtual TV a while ago where you could maybe buy the clothing you see on an episode of some show.
Interactive games are much more visceral than that. People can be the character in the show and need that clothing or whatever in a way they can't feel just from TV. The experience itself is advertising. As if a rain gear company could make it rain in the real world. Or if the "government" could encourage more gas guzzelling cars to sell more gas (oh wait...that does happen in the real world...) Anyway, control of the reality of the game is a much more compelling form of advertising than billboards. Not only that, but the means of production is totally controlled by the company owning the game.
What you need, they provide. The only cost to them is a sort of "inflation" that would come from saturating the economy with too much stuff which can be bartered (so in some games, what can be bartered is restricted. Again by the company).
It's a nightmare 1984 totalitarian world in the form of play. Except playing is optional of course.
But 90% of the junk people buy is optional (hand held blenders, BMWs, big TVs etc). So the game is as real as any other social interaction.
virtual world second life

Online Video - Big Business or just more Porn?

2006-04-15T20:40:00.000-07:00

The premise that people will start up video production shops all over the place because of the new online distribution possibilities is not at all certain.
First, there is an analogous opening of the video channel from a few years ago: DVDs.
Anyone with $10,000 (less now) can produce their own DVDs.
Who did use DVDs for distribution of their video content?
At first, of course, porn companies did, and so far they are still the most successful of the non-movie-studio vendors.
TV shows also eventually (relatively recently) have found a successful channel in DVD sales.
Movies from major studios - mostly new releases - still dominate sales. There are lots of niche companies selling specialty videos (how to build a deck, history, performance, etc) that rely on the then-new DVD channel of video distribution.
So what has changed for a would-be vendor now that it is becoming plausible to distribute quality video content online?
First, what are the advantages of online distribution vs. broadcast, theaters, or DVDs?
1. Lower cost per unit (once you pass a certain threshold of a few thousand)
2. No middleman - or at least thinner middle-margins - like iTunes
3. rapid dissemination (content can be very new - like a news story. Also, shelf life for an expensive production has a heavy carrying cost. I often wonder if when studios delay a release for a month, if they're figuring the interest on the $100MM it borrowed to make the movie.
4. DRM. Content owners have more faith in the DRM they can concoct for online distribution than in the crappy DVD drm.
So, will online distribution really become a new full-blown channel? If it does, who will distribute what content?
Obviously porn will be big user of online distribution (it is already).
Companies that already have the content will be happy to experiment with online distribution, if they can protect it. So far, the tendency is to put lower value stuff out there (re-runs of last week's shows, crappy movies), plus a couple of flashy high profile movies and TV shows, just to get people looking.
I'm sure there will be tons of stuff that formerly had its big premiere on basic cable at 2AM.
Technical problems in the Short term:
I just don't understand how people are going to watch the stuff they download. On their computer? On an iPod?
I can't see how this is going to work yet. I don't believe iPod video is really going to be a big market.
I just don't see it happening yet. I still think this stuff has to be integrated in a mainstream way with the main home TV.
That doesn't exist - though many are trying. The closest approximation right now is On Demand movies on cable.
When downloading movies is that easy, and if movie companies don't charge rip-off prices, that may become a real channel.
(There have been stories that movie companies want $12/download. Good Luck)
I can't put my finger on who will benefit in even the short term because (other than porn),
I don't know who will be using online video on a large scale.
Fox is putting shows out and other networks are too. But how many networks are there?
I think most are likely to use the Flash/Adobe video server. It's efficient and idiot proof and supports some forms of DRM.
It's also codec agnostic more or less.
But how many are they going to sell? All the networks in the US would only be a few million in gross sales.
Maybe $20 Million.
Throw in all the cable channels, and you're getting bigger. But they may outsource the actual video distribution to some online hub.
Who is going to be a video distribution hub? Google and YouTube.com are the biggest video hubs so far (you tube doesn't charge)
MSN is sure to be in there. iTunes will be big (AAPL sticks to Quicktime and proprietary stuff. Windows will of course stick to windows video format).
online google video iVideo MSN channel

Why are there so many REBATES!

2006-03-26T11:11:00.000-08:00

People hate rebates and there are two big reasons they exist. The first is kind of obvious. Seduce customers with a low "after rebate price" and hope they never send in the rebate slip or mess up the form somehow (some companies even lie and say you need to send the form again, which is impossible without the original receipt). But that's only the obvious reason rebates continue to be a retail plague. The other reason is even more disingenuous.
Accounting and looking good to the stock analysts. That's a big factor. You would think that a rebate is a wash. You get higher sales, but you have to subtract the cost of the rebate refunds. True, but not true. For many companies, rebates do not decrease what they report as their total sales. Instead they call rebates a marketing expense. That way, they can show a nice big sales number even if they're losing money! To the naive analyst (or cynical stock promoting analyst), the sales number will appear bigger. Naturally a company might have some large marketing expense when they're showing such growth!
The falacy is that they analyst (or public) might assume those sales are sustainable, when, in fact, they've been bought, dollar for dollar, with rebates.
Al Capone wondered why there are so many criminals when there are so many perfectly good ways to steal legally.
rebates stock sales analysts retail

The Apple Road to World Domination

2006-03-08T17:15:00.000-08:00

On my own website, I've been seeing a steady rise in Mac users from about 7-8% last year to 11-12% recently.
Those are home users, but still, very impressive numbers. People who can afford a Mac who don't need to sync with work PCs will want to buy a Mac (if they care and know anything).
If I didn't need to run Quickbooks and work with the office PCs all the time, I'd have a Mac.
(Qbooks on the Mac isn't as good)
If Apple wants to own the world, it has two big issues in front of it:
1: Getting a foot hold in the TV/stereo/entertainment room
2: Phones
Phones are a huge issue for Apple, and if you ask me, there's a 100% chance of an iPod phone soon.
The problem is, everyone has a phone and phones can easily do what an iPod does. Eventually people will not want to carry and pay for two devices. Motorola or somebody will eventually make a good phone/music player and Apple knows it.
The other issue is the entertainment room. As long as Microsoft or Sony (with the Playstation 3) has a shot at getting a foothold there and owning it, there is another place where people may buy their music and videos. You will be able to do that through XBoxes & Playstations. Sony & Microsoft will improve their music stores.
Once they manage to have a viable online store, they will be able to sell more competitive iPod like devices (including phones). Apple will lose the iTunes lock and the iPod dominance. People will use whatever device plays their music. If that's Windows media format (unplayable on iPods), then they will buy Microsoft compatible players.
It's up to Apple. So far the ROKR phone and the Mac Mini have been weak in these two markets. Apple will have to do better. Soon.

Apple AAPL strategy goal entertainment

Crazy Marbles

2006-02-17T09:10:00.000-08:00

Normal econ 101 supply/demand says that if prices are higher than what people want to pay, the sellers will naturally lower their prices.
And if prices are too low, sellers will naturally raise prices to pick up the slack.
But...
The thing is, price itself is often the main determinant in what people are willing to pay in some markets (like housing right now). There are several reasons why that's true, but the important thing is, sometimes a rising market makes people believe they should pay more, because they will get a good return (as the market continues to rise). Similarly, if the market is dropping, they will jump ship at a lower price than they might otherwise.
This is the normal idea in economics of how "expectations" alter the price. But usually the theory is applied to argue that the equilibrium price is shifted (upwards by expectation of good things coming). In fact, expectations don't merely shift what people are willing to pay, altering the intersection of the supply & demand curves a little, settling on a slightly different sales price.
Expectations totally destroy the normal "invisible hand" forces that would make buyers and sellers arrive at something like a static price.
Buyers will believe, as the market rises, they should pay even more. Sometimes more than the asking price (as happens in the housing market regularly). Similarly, dropping prices are a signal to sell rapidly. Time is the key. Buyers and sellers are focused on return over time. If they believe in 5% monthly appreciation, they will want to close the deal as rapidly as possible, and will happily pay a 5% premium to do it.
The opposite of equilibrium: In an Adam Smith/David Ricardo happy balanced market, a price is like a marble in a bowl (you can imagine the right side of the bowl represents low prices and the right side, high). No matter where the marble goes, right, left, anywhere except the one price at the bottom, it will be forced back to the bottom. The invisible hand. But expectations turn the bowl upside down.
Now the marble sits on top (if it can ever get there at all). If it starts to slip up or down, the speed will feed on itself. All of the forces are away from equilibrium and stability - which may never occur. If prices level off for a while, it's because people are waiting for signals, or the market is tired (volatility itself can be a damper on some markets, if the participants are risk averse for the scale of investment required - like a house).
The logical mode of pricing in such a (rising) market is to avoid setting a price at all, and simply solicit multiple offers.
If you believe the market is falling, it makes sense to set a price, just below what you think the market price of that moment might be.
Sell quickly. And that's what happens. Isn't it? So who says the economy as a whole isn't at least tugged by these forces of disequilibria, and all those pretty supply/demand/money supply models are fairy tails, told by Greenspan, full of supply and demand, signifying nothing.
economics equilibrium balance bubble ricardo

Bush Ramble

2006-02-01T23:25:00.000-08:00

Any economist would say that it makes sense to regulate where a company makes a profit at the expense of the community because it can. For example, if there was no regulation against dumping toxic waste into the ground water and "everybody else is doing it," most companies would do it (happens in India. It happens here when companies think no one is watching).

There are lots of cases like that where the cost is real, but the company that is profiting isn't the one paying. Regulation can simply allocate the cost properly to make the market more efficient. Even conservative economists agree with that. Markets are not necessarily naturally efficient. Graft is another example. It's regulated because the company benefiting by paying the bribe isn't paying the real price (the community pays it).

So if a president deregulates the drug companies so they can profit by testing drugs on the general population rather than paying for appropriate testing, is that worth it? The whole idea is to keep one person from shitting in another person's backyard.
That seems reasonable to me. Some people favor deregulation of Nuclear Power? That's forward thinking.

Protective tariffs, inefficient state-granted monopolies (like cable tv), high taxes on people too poor to afford adequate housing or health care... all things that could use a little government trimming. Deregulate there! And, of course, all employees of the DMV should be summarily executed.

Personally I think Clinton did a better job than Bush. The country was certainly in better shape, though Clinton doesn't get all the credit or Bush the blame for all of that. But I do think a lot of this military activity is hurting more than helping. And I really don't think we're better protected since 911. I wish we were. Obviously anything we have approximating a diplomatic relationship with even our allies is in shreds. We're in the middle of a weak, vacillating recovery that seems to be weighted towards the wealthier segments, with continuing higher than typical unemployment and probably significant inflation. Numbers below poverty levels are actually increasing.
It just doesn't seem good. Bush didn't cause 911 and he didn't cause Katerina either. Even if he signed Kyoto, global warming may be irreversible. He didn't even cause (all of) the mess in the middle east.

So it's not all his fault. But that doesn't mean things are good! FDR (some think) was great, but nobody would say things were good during his presidency. What with a great depression & wwII. So things aren't good.
I happen to think some of it is Bush's fault (unbalanced budget from tax cuts even before Iraq. Then there's Iraq. Then more tax cuts.)
He certainly doesn't seem to think he did anything wrong. Except from a PR point of view.

He seems to believe his low popularity now is a PR goof because of Katerina.
He really seems to believe Iraq is going well and according to plan. I'm sure that's what Dick tells him - and he doesn't read the papers.
Certainly not the NYT or Washington Post. Maybe some Hoover news letter.
I wish he did.
A lot of people feel like if only he knew what was going on, he would fix it. That he's a good man who simply isn't seeing what's going on.
I remember that clip where he was asking his adviser --"we already gave cuts to the wealthy. Shouldn't we give to the middle?"
Answer "stay on message Mr. President." I don't think he cares.
I wish he did.
bush regulation heartless bastard

How do people watch Downloaded Movies?

2006-01-31T09:19:00.000-08:00

Time Warner just started a P2P - bittorrent like - subscription download service in Germany. So how do people watch movies once they're downloaded? On the computer?
Doesn't it seem like there's a big cork in this media distribution bottle?
I mean, until there's a brainless way for people to get this content onto their TVs, that doesn't require going back & forth between the TV & computer, hows it going to work? Media Center PCs
1. aren't brainless enough
2. are too expensive
3. aren't really on the consumer radar
4. require you to have a computer in your TV room
5. aren't brainless enough
That's one reason I'm big on the cable companies (hey -- Time Warner is a cable company....)
They could easily integrate downloads into a nice simple transparent "on demand" kind of thing in their cable boxes.
Actually - on demand isn't much different from downloading files like this. It's just not p2p
P2P would make on-demand far more practical for them bandwidth-wise. It might help them with the problem of not enough content.
(I think it's interesting that Comcast says 90+% of on demand programming is free. The thing is, the free content is either
1. repeats of HBO (which you only get if you're already paying for HBO - or other pay channels)
2. CRAP
So what it tells you is that people don't like the On-Demand business model. They want to pay once. Not every time.
The thing is, people will watch a sort of lame movie if there's a fixed cost (monthtly) but no marginal cost.
They don't want to pay $5 on top of their cable bill to watch an Adam Sandler movie. Though they would watch it if it was included.
The fact that people watch all that free crap content more than the paid content (which is actual relatively current releases) proves that.
I'm not saying they will exploit it - but the cable companies have the opportunity.
QUESTION: How are people watching downloaded movies Now??
My best guess is that they're burning them to DVDs. I base that on all the blank DVDs being sold.
(are there any numbers on that? There are so many ads. What else are people burning. I know they're not making backups!)
p2p download subscription time-warner

The Greatest Mystery In the Known Universe

2006-01-29T12:35:00.000-08:00

Why are there no McOnion Rings? McDonalds has market tested McRibs and Mc(cough) Salads. Even McFruit and McDog (local specialty).
Why is there no McOnion Ring to be had anywhere on the planet.
It's gotta be a conspiracy. A "no McRing" pact with the devil.
onion rings mcdonalds fried conspiracy devil

More Google Sitemaps Odd Behavior

2006-01-27T18:27:00.000-08:00

Listing my website on Google Sitemaps killed my listing(sitemaps is a new Google webmaster tool to aid Google in correctly indexing your site). First bestportlandrentals.com was removed from Google search results after I set it up in Sitemaps. I removed the sitemaps entry and in a little over a month, the search results came back. The same thing happened with portlandpage.com. Entered in sitemaps. Got de-googled. Removed from sitemaps. Re-googled.
Maybe there's something I missed. Google seemed to indicate I had made the correct entries. Could be my goof.
In the meantime, I would strongly caution any webmasters out in the world to think 2x before entering a Sitemap with Google.
google sitemaps de-list delist