Categories: economics

The Jackson Hole Consensus: Central Bankers & Assets

In my post about the the stock market bubble(s) of the past 15 years, I asked what kind of policy shift happened in the 1990s to allow such a significant change in stock asset valuation. The answer comes from Niall Ferguson, in this fabulous (and scary) interview in the Globe:

“Monetary policy evolved in a peculiar way in the 1990s towards de facto or de jure targeting of inflation, an increasingly narrow concept of inflation – core CPI. I thought it was a mistake at the time because it seemed to me crazy to ignore asset prices. Why differentiate? What’s the difference between pricing a loaf and pricing a house? Why do we care about one and not the other? In fact, we should probably care more about the price of a house than the price of a loaf, certainly in developed societies. I think there was a flaw in the theory there, that essentially you could call the Jackson Hole consensus. When the central bankers got together at Jackson Hole, the view that emerged from the debate in the late 90s was, we shouldn’t really pay attention to asset prices in the setting of monetary policy.” [more…]


Categories: buisness, media, web

Newspapers: It’s Not Me, It’s You (Maybe)

With all the talk of newspapers shutting down, I wonder if we might flip the traditional interpretation:

Maybe the problem is not so much online news sources killing off business for print newspapers; maybe the problem is the continued existence of print newspapers is stifling innovation in the online news space.

Since so much (local) advertising dollars are still going (being wasted?) on dying print news outlets, there isn’t enough left over to properly fund a leaner, profitable online alternative.

If print newspapers are gone, then local advertisers are going to start wondering how to get people to come to their stores; radio/TV, OK, but if the eyeballs are online, and there are no more papers distracting the advertisers, then …well there is an untapped market there for the online news sites to figure out. And since online can do a better job (in theory) of matching ads/marketing to reader preference, thru cookies, browsing habits, tracking sales (Facebook Beacon notwithstanding), then the death of the traditional news business might be exactly what it takes to kick the online news business, and online content, to real innovation, and real profitability.


Categories: economics, technology

Role Reversal

Check this little gem of a tectonic shift, found in Wired’s The Netbook Effect: How Cheap Little Laptops Hit the Big Time (see page 3):

The Taiwanese firms, Shih argues, now have enormous clout in the PC industry. In the US, we regard branding and
marketing—convincing people what to buy—as core business functions. What Asustek proved is that the companies with real leverage are the ones that actually make desirable products. The Taiwanese laptop builders possess the atom-hacking smarts that once defined America but which have atrophied here along with our industrial base. As far as laptop manufacturing goes, Taiwan essentially now owns the market; the devices aren’t produced in significant volumes anywhere else.

If you had asked Taiwanese hardware CEOs a few years ago about their relationship with Dell, HP, and Apple, they’d have told you that the American companies did the branding and sales while outsourcing their design and production to Taiwan. Today the view from Asia is increasingly the reverse. “When I talk to them now,” Shih laughs, “they say, ‘We outsource our branding and sales to them.'” [more…]