Saturday, November 01, 2008

Google v Amazon?

Consider Android v iPhone. Will there be a G-Kindle?

Google books:
Google books
Published: October 30 2008 02:00 | Last updated: October 30 2008 02:00

These days, publishers don't need a search engine to know which way the wind blows. This week's settlement of US book publishers' long-running dispute with Google over the search group's plans to make millions of copyrighted books available for browsing online was just the latest sign that purveyors of dead trees and ink are coming to terms with the internet's rise as the dominant medium of the age. After all, the same day the deal was announced, The Christian Science Monitor newspaper said it would abandon its daily print edition in favour of a weekly paper and daily online version, adding credence to the notion that in today's media environment, the shift from print to pixels is all but inevitable.

If approved by a US judge, the Google deal would clear the way for the search engine to digitise books and make snippets of their contents available to web surfers, paying authors and publishers when readers buy online access to the works."

The link:

A surge in early adoption of the new G1 mobile handset -- the first to incorporate Google Android mobile computing platform -- indicates Apple's iPhone may have another challenger for the title of hip mobile device, according to WebTrends Inc., a leading provider of web analytics and online marketing solutions.
During the first few days of availability, leading digital businesses such as Telegraph Media Group (TMG), publishers of the UK's biggest selling quality daily newspaper The Daily Telegraph, The Sunday Telegraph and, have received significant traffic from the G1 handset from T-mobile. To date, a new Google Android application available at has generated more than 5,000 downloads and nearly 31,000 visits.

Follow the schedules, not the polls

Polls are guesses as to what people think. Schedules demonstrate what the campaigns think.

First Read -
"*** Follow the schedules, not the polls: NBC/WSJ co-pollster Peter Hart (D) sends along this observation: “Forget the polls, just look at what the candidates are doing and where they are spending money.” At this time in 2004, he notes, Kerry-Edwards were campaigning in Pennsylvania, Ohio, Wisconsin, Minnesota, Iowa, and Florida. In 2000, Gore-Lieberman were in the states of Missouri and Ohio, as well as in Florida. But in 2008, Obama and Biden AREN'T campaigning in Pennsylvania, Minnesota or Wisconsin. Instead, they’re in Nevada, Colorado, Indiana, as well as the perennials of Ohio and Florida. “You do not have to read poll numbers -- just look at their travel schedule,” Hart tells First Read. And as we learned yesterday, the Obama campaign is now spending money in Arizona, Georgia, and North Dakota."

'There is no growth in Western Europe,'

Reckitt Benckiser Posts 10% Gain in Organic Sales - Advertising Age - News: "But good news for Reckitt isn't necessarily good for competitors. Chairman-CEO Bart Becht said on a conference call that the company's gains in Western Europe and North America came on flat volume and sales.

'There is no growth in Western Europe,' Mr. Becht said of Reckitt's household, personal-care and over-the-counter drug businesses there, adding the same assessment of the U.S. 'The strength of the growth on a global basis is coming out of Eastern Europe and the developing markets, which are growing in the teens [percentage growth].'

Overall, he said global growth in Reckitt's categories slowed by about a percentage point compared with last quarter."

Robert Reich's Blog: The Meltdown (Part IV)

Monday, October 20, 2008

The Meltdown (Part IV)
The Dow is see-sawing but the reality is that the Bailout of All Bailouts isn't working. Credit markets are largely still frozen. Despite all the money going directly to the big banks, despite all the government guarantees and loans and special tax breaks, despite the shot-gun weddings and bank mergers, despite the willingness of the Treasury and the Fed to do almost whatever the banks have asked, the reality is that credit is not flowing. It's not flowing to distressed homeowners. It's not flowing to small businesses. It's not flowing to would-be homeowners with good credit ratings. Students are having a harder time borrowing for their tuition. Auto loans are drying up.

Why? Because the underlying problem isn't a liquidity problem. As I've noted elsewhere, the problem is that lenders and investors don't trust they'll get their money back because no one trusts that the numbers that purport to value securities are anything but wishful thinking. The trouble, in a nutshell, is that the financial entrepreneurship of recent years -- the derivatives, credit default swaps, collateralized debt instruments, and so on -- has undermined all notion of true value.

Many of these fancy instruments became popular over recent years precisely because they circumvented financial regulations, especially rules on banks' capital adequacy. Big banks created all these off-balance-sheet vehicles because they allowed the big banks to carry less capital.

Paulson is recapitalizing the banks -- giving them money directly rather than relying on reverse auctions -- largely because he's come to understand that the banks have taken on so much debt that the reverse auction system he told Congress he would use(designed to place a market value on these fancy-dance instruments) will leave too many banks insolvent.

But pouring money into these banks, expecting they'll turn around and lend to small businesses and Main Streets, is like pouring water into a dry sponge. Nothing will come out of it because Wall Street is so deep in debt that the banks are using the extra money to improve their balance sheets. They're hoarding it because their true balance sheets -- considering the off-balance sheet vehicles they created over the past several years -- are in such rotten shape.

In other words, taxpayers are financing a massive effort to save Wall Street's balance sheets from Wall Street's previous off-balance-sheet excesses. It won't work. It can't work. The entire effort is merely saving the asses of lots of executives and traders who got us into this mess in the first place, and whose asses should not be saved at taxpayer risk and expense.

What to do? Immediately require the Treasury to stop the broad Wall Street recapitalization, and require Wall Street to lend the money directly to Main Street. At the same time, force Wall Street to write down its true balance sheets: Let the executives and traders take the hit. Let their shareholders and even their creditors take the hit for Wall Street's collosal irresponsibility. This is the only true way to restore trust. It's also the only way to save Main Street's small businesses, homeowners, students, and everyone else.

Anonymous Anonymous said...

I'm glad to see that so many of your bobble head readers agree with this post. But, I have to ask, How is your idea of lending to Main Street different than what McCain proposed in the second debate?

The increasing amount of gray in my lap every time I go to the barber is evidence that I am getting older, so my memory could be failing, but didn't you call his idea of replacing bank-based mortgages with government-based mortgages idiotic? (you were right, by the way)

How is lending money directly to individuals different than what McCain proposed? What exactly would you be lending money to Main Street for? Which government agency would make these loans? Would collateral be required? Who would service the loans? How would one qualify? Would Interest income fund the administration necessary to oversee such a program? Would some portion of the $700 billion go towards this?

Where exactly is your empiric evidence that "deregulation" caused the current economic situation? Who was the last to pass major financial deregulation ? (Answer: Clinton). Who was the last to pass major financial regulation? (Answer: Bush)

The evidence I've seen suggests that market distortions occur when the government gets involved in markets rather than the reverse. For example, government felt executive pay was excessive, so it limited the deductibility of direct executive compensation. What happened? Increased incentive compensation in the form of bonuses and equity compensation resulted in precisely the opposite of what the government was trying to accomplish. How about the mortgage mess? Government got involved by saying "lower your standards" and a bubble began to build.

In both cases, industry took the government's mandate and made it more excessive through irresponsibility. But, it was the government that put us on both of those roads.

Why in the world should I trust the government to run a loan program when I'm not even sure it could find its way down a one way street with a map, a compass, and in-car navigation?

The interesting thing about the idea we're now criticizing is that it isn't Paulson's. It is Bernanke's.

I'm not judging his idea as good or bad. But, it is worthwhile to note that Bernanke's Ph.D. dissertation at MIT was on the causes of the depression and what could have been done differently.

Only time will tell if he is right. I take comfort in the fact that he's spent a lot of time studying that situation and that he has ideas based more on reasoning than politics.

anonymous matt

Anonymous Frank Thomas said...


Just watched a Dutch documentary last night showing Bush Jr. promoting in more than one talk, starting in 2002, expanding loans to black and other ethnic (i.e., Spanish) Americans. He kept citing evidence of home ownership of these groups being very low compared to mainstream middle/class America. Bush repeated this policy theme a number of times. Little wonder the banks, real estate agents, supported by Greenspan´s cheap money, got the message. So began all the snake/oil lending and real estate evaluation practices that have been sadly well documented to date. The greed train became everyone´s first class ticket to security and keeping up with the Jones.

Thus, government under Bush also greatly accelerated the financial mess we are in and the unregulated market took its greedy cue. Bush´s weak attempts at regulation were voted down by his OWN party. You forgot to mention that, Matt.

The blame is all around but, the major theme of keeping government small and out of people´s lives started with Reagan (even though he generated huge Deficits) and has for too long been an unchallenged ideology cocaine fix in the extreme ... to the detriment of ALL Americans now.

Governments in the more mature countries of Europe do a pretty darn good job of getting the right balance between (a)government oversight and regulations controlling irresponsible actions, and (b) freeing market forces to pursue their innovative initiatives and growth functions.

Our financial system has broken down. Only the government working closely with industry can fix it. As I said in a former post, when are we going to realize that too much government destroys the market (e.g., Johnson welfare state focus) while too much market destroys the government (e.g., the Reagan revolution). The challenge is to get the balance right. Under Clinton the balance was also lost as technology made markets so complex that politicians as well as financial experts lost control over things.

Your axiom that´s it´s all government´s fault is a bit too simplistic in ignoring all the interconnected parties, particularly in this flat, global world now.

One could argue that governmental institutions are BEHIND the speed of these global financial interconnections. For example, who knew that the country Iceland was in reality a country Hedge Fund with ice glaciers?

Globalization screams for a wise but strong coordinated central empiring of the system ... contrary to anyone´s nostalgic laissez/faire dream world ... a fantasy world we´ve just witnessed what destruction it can bring to innocent, hardworking people.

Tuesday, 21 October, 2008
Blogger David said...

Anonymous Matt asked for proof of the deregulation as the source of the problem.

Also read Karl Denninger blog,

".... The root cause of the current lack of trust in our financial markets is threefold:
1. Nobody can trust a balance sheet. This is due to off-balance-sheet vehicles (which were supposed to be banned after ENRON) and "Level 3" assets, which nobody can analyze the true valuation of, as identification of the claimed assets and their valuation models are undisclosed.

2. Credit Default Swaps (CDS) are "over the counter" (OTC) transactions with no margin or capital supervision. As a consequence nobody knows if their "counterparty" can pay. In fact huge percentages of these people can't pay - but nobody knows who they are.

3. Leverage. The SEC removed broker/dealer 12:1 leverage limits in 2004. Every firm that has failed - all five (Fannie, Freddie, Bear Stearns, Lehman and AIG) had leverage far in
excess of 12:1. The bailout bill
is even more dangerous as it accelerates a provision intended to go into effect in 2011 that allows Ben Bernanke to increase financial firm leverage by dropping reserve requirements on banks to zero should
he so choose. It is excessive leverage that got us here in the first place, and this bill actually makes it worse.

The solution to the trust issues in our financial system is elegant and it will work.

1. Force all off-balance sheet "assets" back onto the balance sheet, and force the valuation models and identification of individual assets out of Level 3 and into 10Qs and 10Ks. Enact this requirement beginning with the 3Q 2008 reporting period which begins next month.
Total taxpayer cost: $0.00

2. Force all OTC derivatives onto a regulated exchange similar to that used by listed options in the equity markets. This permanently defuses the derivatives time bomb. Give market participants 90 days to get this done; any that are not listed in 90 days are declared void; let the
participants sue each other if they
can't prove capital adequacy. Total taxpayer cost: $0.00

3. Force leverage by all institutions to no more than 12:1. The SEC intentionally dropped broker/dealer leverage limits in 2004; prior to that date 12:1 was the limit. Every firm that has failed had double or more the leverage of that former 12:1 limit. Enact this with a six month
time limit and require 1/6th of
the excess taken down monthly. Total taxpayer cost: $0.00"

For more information about the plan, read
Also read Karl Denninger blog,

-David S

Tuesday, 21 October, 2008
Blogger Art A Layman said...


Have to agree with Frank, you perspective is somewhat myopic. As a fellow accountant I am dismayed at the simplicity of your cause and effect model.

No doubt deregulation was a major contributing factor and the repeal of Glass-Stegall, in hindsight, was not a shining moment for Clinton, but the current dilemma was aided not caused by repealing Glass-Stegall. You should also note, that while Clinton supported it, the legislation passed with a veto proof majority in Congress, so even a Clinton veto would have been ineffective.

I tend to agree with David and his reference that removal of the leverage ratio was far more impactive. Fancy accounting gimmickry, even if legal, also greatly impacted transparency, eventually leading to a credit lock up. You and I know that there is no benefit to the system, the process, provided by obscuring information, especially hiding it. To me it is an act that is totally contrary to the basic concepts underlying the worth of our profession.

Whether it was Carter or Clinton or Bush, or whomever, who pressured the banking industry to increase loans to the lesser qualified is shouting at the rain. Had industry used reasonable judgment they could have effected the desired result without extreme risk. It was the aggregation, dissection and securitization of mortgage packages that began the real problem.

These new investment vehicles created a whole new market, providing mucho profits from sales and fees, that shifted the emphasis, from the issuance of mortgages to enable homeownership to the lesser privileged, to feeding this new market with a supply of new profits. The only way the market could keep up with demand for these products was to begin creating more mortgages, essentially out of thin air. Recognizing some risk in these loosely issued mortgages, the credit default swaps market picked up steam and produced even more profits. As the focus shifted from evaluating tangible assets to attempting to value pieces of paper, Rumsfeld became prescient with all his unknown unknowns.

Now I believe, if you go back and look, the fallacy, and Dr. Reich's point, in what McCain proffered was that he was willing to buy the original mortgages from banks at full value and then issue new mortgages based on current home values. Granted this would possibly allow many to stay in their homes but the banks get their profits back and the taxpayers take the losses. This is a far cry from having the government initiate loans to individuals or small businesses directly and collect the interest income and with no upfront built-in loss.

I do agree with your implication that presently the government does not have the infrastructure to manage and effect this process. Setting up the administration would be costly and time-consuming and one would guess only temporary.

Your analogies tend from the ridiculous to the sublime. It is the job of government to try and level the playing field, it is the private sector that diverts their energies to focus on maintaining the status quo or using government mandates to manipulate additional profits. Worst case, in your executive analogy, is we are still at zero. Nothing gained but nothing lost either.

Your mortgage analogy is even worse. When your boss comes to you and says find me $400,000 more working capital and you end up violating GAAP to get there, is your boss the cause because he made the request? I doubt you get paid the big bucks for such shoddy cause and effect analysis.

Your assertion of government's incompetence is conventional wisdom, at least from the right side of the political spectrum, but does not our current dilemma suggest that the private sector is not immune from idiocy? Markets don't do distortions, they do improvisations and creations. Whether overcoming government regs or competitive pressures they adjust and go forward.

The federal government is charged in the Constitution with "providing for the general welfare" not "providing for the corporate welfare".

Robert Reich's Blog: The Meltdown (Part IV)

Robert Reich's Blog: The Meltdown (Part IV): "Why? Because the underlying problem isn't a liquidity problem. As I've noted elsewhere, the problem is that lenders and investors don't trust they'll get their money back because no one trusts that the numbers that purport to value securities are anything but wishful thinking. The trouble, in a nutshell, is that the financial entrepreneurship of recent years -- the derivatives, credit default swaps, collateralized debt instruments, and so on -- has undermined all notion of true value."

Android Google + WalMart

The Channel Wire - IT Channel News And Views by CRN and VARBusiness:
"October 29, 2008
Today, nearly 550 Wal-Mart stores are expected to start selling the T-Mobile G1, the first smart phone based on the open source Google Android mobile operating system. Along with stocking the device, Wal-Mart ' in its continuing bid to offer the lowest prices ' chopped $31.11 off the price a G1 buyer would pay at a T-Mobile retail store.

To say I'm bitter would be an understatement, considering I shelled out full price -- $179.99 plus more for add-ons ' for the T-Mobile G1 exactly one week ago."

Why Advocacy Efforts Are Good for Grantmakers & Grantees

onPhilanthropy: Articles:

"The potential of this influence is significant - the more than one million public charities in the United States comprise over 7.2% of the country’s GDP, and in a 2008 survey by Charity Lobbying in the Public Interest (CLPI) and Johns Hopkins University Center for Civil Society, nonprofits that reported an interest in and duty toward lobbying still only dedicate 2% of their budget to doing so. In addition to fiduciary impact, nonprofit organizations can provide a perspective and insight into the root causes of issue areas, with which legislators are not necessarily familiar. Thus, nonprofit organizations truly do have the capacity to effect change in an impactful way through advocacy efforts."

Economic Bulletin

Economic Bulletin:

"Economic Bulletin
Economic Development Service - March 2008

The Economic Bulletin is a bi-annual publication, produced by the Strategy & Development team for both an internal (officers, members) and external (partners, businesses) audience. If you would like to contribute stories or articles to future editions of the Bulletin then please contact Muz Mumtaz or Graham Lindsay.

We hope you find the Opens in a new windowlatest edition of the Economic Bulletin (PDF 213kb) both informative and interesting, if you have any comments about the content, layout or style of the Bulletin we would be very happy to hear them.

Happy informative reading!"

Government: The growth market for Print

Kirklees Council creates new centralised print and mail service :

"Kirklees Council’s Document Solutions design, print and mail facility, now one of the largest print and direct mail houses in Yorkshire, has announced Xerox UK as its preferred High Volume digital print equipment supplier.

As part of a five-year agreement, Document Solutions will use Xerox equipment to improve communications with the public through the production and distribution of personalised, on-demand documents.

As of September 2008, Document Solutions began completely managing all of the council’s design, print, mailing and distribution services and has the capability to provide print services to other public sector organisations. Document Solutions will use colour and monochrome Xerox printers
to create and distribute council tax forms, payroll, benefit statements, booklets, posters, newsletters, committee reports and training manuals that will assist in fulfilling the council’s four strategic objectives – Green, Young, Diverse and Economically Strong."

MPS - Print Infrastructure

2008 MPS Market Report -

"How hard can it be to define managed print services? Interestingly, the term has evolved over the years in the printing and imaging industry, and it means different things to different people. This is due mainly to the continued convergence of technology, particularly digital and analog technologies. In past years, the copier model was a ‘labor-intensive’ support model, copiers were not on the network, and the financial arrangements were managed on a cost per page arrangement. In those days, copier services were managed by the facilities departments and management of the fleet was mainly done as an overseeing of a contract."