Thursday, May 29, 2014

Dreaming of Streaming

Said Timmy to Jimmy & Dre:
"Whether Apples keep Dr.s away,
It sweetens the tones
On iPods & -Phones
If revenue streams when they play."

Said the Dr. & Jimmy to Tim,
On the music they're making with him:
"Without some new Beats,
One's coolness depletes
And the revenue outlook is dim."

Said Timmy: "A streaming solution
May not be the next evolution,
But it's better I blew
3 billion on you
Than a shareholder cash distribution."

In a move that was so long anticipated, many investors forgot about Dre, Apple yesterday confirmed its intention to buy Beats Electronics LLC.  The $3 billion acquisition brings with it Beats co-founders Dr. Dre and Jimmy Iovine.  Though best known for its high-end, sexy headphones, Beats is thought to be more valuable to the provider of iTunes, the leading online music store, for its nascent music streaming service.  As Heidi Moore reports in the Guardian, music downloads have peaked, and actually declined 2% to $3.9 billion last year, while subscription-based revenues rocketed up by 50% to $1.1 billion.

Mr. Iovine, a long-time record industry leader, "was one of the first industry executives to anticipate the download business's decline and advocate for subscription and streaming services as music's future," according to one analyst.  Mr. Iovine has also maintained a long and friendly relationship with Apple and iTunes, going back to the origins of online music sales under Steve Jobs.

Apple CEO Tim Cook must certainly hope that the combination with Beats will once again put the company in the position of knowing what the consumer wants before the consumers themselves do. 

Tuesday, May 13, 2014

Central Bankers Respond to the Employment Crisis

"Our house is foreclosed on in days,
And we can't find employment that pays; 
Pray what can you do
To carry us through
Our long economic malaise?"

"Central bankers are touched by your trouble,
So our efforts we'll boldly redouble
To keep money soft
And hold you aloft
On a frothier stock-market bubble."

These were my thoughts on reading yet another article on the likelihood of more ECB stimulus to address that continent's deflationary dangers.  Not that I have anything against ECB (or Fed) stimulus  per se; it's just that I'm skeptical that the management of inflation and deflation will do very much to address the serious long-term unemployment problems in the Old World and the New, and I'm not sure that the risk of frothier markets is worth it.

Thursday, May 1, 2014

Nothing Is Better Than Something

The Fed stirred up market festivity,
In spite of low business activity,
From the joy that relates
To their keeping the rates
At zero, as is their proclivity.

With rates so depressingly low,
Fixed income has nowhere to go
So the stock market beckons
To each one who reckons
The chance that their nest egg may grow. 

It highlights how hard to discern it is
To know when the bond market's turn it is,
But with rates to be found
At the null lower bound,
The Dow lacks investment alternatives.

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