Friday, August 27, 2010
In that earlier post, I wrote,
"Thus, it would seem only a matter of time before TiVo provides a feature on its own website that would let me either type in my preferred websites, or simply import my web browser bookmarks, so that I can access this menu on my television screen via TiVo's content menu.
So there you have it. Just about two and a half years after my post regarding the necessary hardware and software for television viewing of internet web content, it's basically here. One software tweak by TiVo, and it's done. I'll have TiVo for access to online weekly programming, including news programs, either free or paid, and Netflix for my movie content. "
This week, I read in the Wall Street Journal that Tivo has released a remote, priced at $90, which features a slide-out keyboard and navigational buttons. In effect, what has been needed to make Tivo a gateway for television screen-based internet surfing.
At this price, as a remote, it's far simpler than another set-top box. And it comes from an established vendor.
I'm one step closer to cutting my monthly Comcast bill in half by dropping the cable television portion!
Thursday, August 26, 2010
While I enjoyed his piece, and found it eminently sensible, what really got my attention was this quote from Richard Fisher, President of the Dallas Fed, speaking of business leaders with whom he'd recently met,
"the politicians and officials who craft and enforce the rules are doing so in a capricious manner that makes long-term planning difficult, if not impossible. They are increasingly distressed by the lack of consistent direction coming from Washington....So they are calling time-outs and heading for the sidelines while they wait for the referees to settle the rules of the game."
Melloan then wrote,
"He added that no amount of further monetary accommodation can offset the retarding effect of heightened uncertainty. Indeed, it would make matters even worse if the private sector concludes hat the Fed has become "politically pliable and is prone to substitute such accommodation for fiscal discipline." "
I think it should give pause that a highly respected Fed bank president is so candid about Washington's negative influence on business activity. Fisher is a very non-partisan in his remarks.
Further, he clearly feels that Bernanke's planned, or expected injections of added liquidity, including more QE, will only "make matters worse," as the private sector grows suspicious of the Fed's motives and lack of discipline.
We do seem to be in a new era, where consumers and investors, thanks to ubiquitous, free information, have created a feedback loop of economic behavior neither existing nor envisioned
in Keynes' time.
That new loop is causing negative reactions to the government's excessive deficit spending, higher taxes and injection of uncertainty into the business environment via complex, poorly-considered legislation.
Fisher's highlighting of these phenomena ought to worry all of us. It's hard to foresee a healthy equity market, or economy, while the behaviors Fisher sees exist.
Wednesday, August 25, 2010
In an editorial in the Wall Street Journal on August 16th entitled The Fed Can't Solve Our Economic Woes, Gerald O'Driscoll, Jr., contended exactly that. Which would seem to be germane right now, as many are looking for more Fed quantitative easing to magically rescue the equity markets.
"First, our lingering crisis and economic weakness was brought on not by a Keynesian failure of effective demand, but by a Hayekian asset boom and bust. Second, the textbook case for low interest rates treats the policy as one of benefits without costs. No such policy exists.
In these scenarios, the collapse of demand is a consequence- not the cause- of the bust. Policies to address the crisis must get the cause and effect right.
The financial panic and ensuing great recession was a classic balance-sheet recession. As balance sheets shrank in value, demand collapsed. There was a liquidity crisis as well, centered around Lehman's collapse, but the driving force was collapsing balance sheets, impaired capital values and, for many, insolvencies.
Until balance sheets (corporate and household) are restored, increased spending cannot be sustained.
What is in short supply is not liquidity, but savings. The Fed can supply the former but not the latter. Now there is little further it can do that is beneficial."
If O'Driscoll is correct, then the widespread hope that the Fed will save the markets again is in vain.
As I write this, Jeffrey Sachs, currently a professor at Columbia, is explaining, in an appearance on CNBC, that we are experiencing the result of decades of negative savings by US consumers. He agrees with O'Driscoll.
Whether by the Fed's quantitative easing, or its monetizing of more Treasury borrowing, or the latter's printing of money, it's difficult to see how more liquidity will do anything to alleviate the longer term economic issues. Sure, such measures may give a short term shot to equities, if the money finds its way there.
But, lately, investors have been fleeing to Treasuries, driving rates down. A classic Keynesian liquidity trap. O'Driscoll notes,
"Low interest rates slow the process of restoring balance sheets by keeping asset prices artificially inflated. They also penalize saving, thus prolonging the process of rebuilding balance sheets."
Higher long term US economic growth is dependent upon hiring, which isn't happening in this economic environment. O'Driscoll favors tax cuts and, generally, whatever allows consumers to keep more of their own money to save and invest.
But judging from the Fed's and federal government's recent and expected actions, that's not on the agenda of either entity. Which, if you believe O'Driscoll, bodes ill for near and longer term US economic recovery.
Tuesday, August 24, 2010
"But what about that liability clause? If a lessee encounters some situation, whether accidental or by poor management, that creates a disaster on the scale of BP's Gulf rig gusher, do we seriously expect to hold that company totally responsible for every penny of expense related to the problem?
The US does not exist in a vacuum. There are deposits of virtually all of our natural resources located in other countries, on other continents. Many other countries offer far less onerous regulatory environments than those which currently exist in the US.
As tempting as it would be for the US to insist on carte blanche, unlimited liability assumption by its natural resource lessees, competitive realities could easily cause such a policy to result in no lessees whatsoever."
As I am finishing reading back issues of the Wall Street Journal from earlier this month, I noticed an August 7-8 editorial entitled The World Drills On.
Sure enough, other countries are acting fast to grab deep-water drilling rigs once operating in the US Gulf Coast region. Among the countries aggressively leasing drilling rights and seeking rigs are New Zealand, Brazil, Australia, Canada and Norway.
The editorial notes that many of the prospective wells will be in water far deeper than the BP Macondo well.
As a retired senior oil executive noted when I sent him the prior linked post, oil exploration is an internationally competitive arena. When one country raises its regulatory and/or environmental standards to unrealistic or uncompetitive levels, other countries will move in to explore and replace that production capacity.
How does sending deep-water drilling rigs overseas, for years, help US self-sufficiency in oil production and the retention of associated jobs?
In June, I wrote with a sense of the hypothetical. The Journal editorial earlier this month indicates my concerns are no longer hypothetical. US oil exploration and production activity is going to be curtailed by the availability of rigs for some time, thanks to an ill-conceived ban on off-shore, deep-water drilling. GDP growth, jobs and even government tax revenue will now all be negatively affected for years to come by this self-inflicted damage to the US economy.
Monday, August 23, 2010
Earlier this year I described Ol Ty's increasingly bizarre and irrational behavior in posts here and here. In the first post, I wrote,
"The topic that set off the old codger yesterday afternoon was a report on the rise in temporary hiring in the US. As various panel members debated the good or bad implications of such hiring, Mathisen began whining...and I mean whining....that he was so afraid companies would just never hire full-time workers anymore, but only temporary ones, leading to long term lower standards of living of Americans.
Michelle Caruso-Cabrera retorted that with all the government regulatory red tape involving hiring, compensating and firing workers, it's no surprise that many choose to hire temps for as long as possible. Mathisen shot back, with a grimace and angry tone, something like,
'Go ahead and blame the government for everything.....Companies will hire people when they need them, and government regulations won't matter.'"
As I sat watching and listening to Mathisen's annoying commentary this morning and, later, this afternoon, as well, I began to wonder how many network anchors who've been so obviously wrong and misguided on the major economic story of the past two years have been rewarded with more airtime, rather than being yanked off the air entirely.
What I'm saying is that Mathisen has misunderstood the fundamental motivations affecting US corporate hiring in the face of a government which has been introducing substantial uncertainty into the business and economic environments for the past two years.
It is very much the case that corporate executives are hesitant to hire when their liabilities for employee-related costs due to health care and taxes are far from certain.
Yet Mathisen growled self-assuredly that companies will just go ahead and hire people "when they need them."
Now it seems you can't watch CNBC without seeing this economic wrong-way Corrigan, or, should I say, Mathisen, at almost any time of the trading day.
God save us. Can't MSNBC take the guy?