What Do the Markets Want, and Should We Care?

Posted on June 29, 2010 by David Schatsky| Leave a comment

Do financial markets put pressure on nations? Sometimes. How is that pressure measured? Often, in the bond markets, where interest rates are a measure of investor confidence. But this is far from axiomatic and business and economics journalists may be confused and confusing us.

Liz Alderman reports in the New York Times that two years ago Ireland adopted “the type of austerity measures that financial markets are now pressing on most advanced industrial nations.”

Are financial markets really pressing nations to adopt austerity measures? Paul Krugman, who has consistently argued for deficit spending to help end the global economic downturn, doesn’t think so. He agrees that “bond investors have turned on governments with intractable deficits. But,” he continues, “there is no evidence that short-run fiscal austerity in the face of a depressed economy reassures investors. On the contrary: Greece has agreed to harsh austerity, only to find its risk spreads growing ever wider; Ireland has imposed savage cuts in public spending, only to be treated by the markets as a worse risk than Spain, which has been far more reluctant to take the hard-liners’ medicine.”

If countries have adopted the measures allegedly pressed on them by the financial markets and yet failed to appease those markets, are we perhaps attributing demands to markets that those markets do not share?

Indeed, Alderman observed,  “Despite its strenuous efforts, Ireland has been thrust into the same ignominious category as Portugal, Italy, Greece and Spain. It now pays a hefty three percentage points more than Germany on its benchmark bonds, in part because investors fear that the austerity program, by retarding growth and so far failing to reduce borrowing, will make it harder for Dublin to pay its bills rather than easier. “

So why claim that the market is clamoring for austerity measures?

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Posted in Economics

Are Our Gadgets Killing Us?

Posted on June 7, 2010 by David Schatsky| Leave a comment

Consumer technology is increasingly associated with sinister consequences.

Health scares associated with microwave ovens are a footnote in the history of home electronics. And most people don’t worry anymore about cellphones causing brain tumors. But today we have cellphones being implicated in traffic fatalities and commuter rail crashes. The Internet is blamed for undermining our brains.  And electronic gadgets are said to addict us, weaken our ability to focus, and undermine family life.

Not only is consumer technology taking a toll on us, but recent news out of China suggests that it’s killing the people who make it. A story in the New York Times today opened with a profile Ma Xiangqian, the first of 13 people to commit or attempt suicide this year at Foxconn Technology, a China-based manufacturer of consumer electronics for global companies like Apple, Dell and Hewlett-Packard. We need our gadgets and we need them cheap: Before his death, Mr. Ma had worked three times the legal number of hours at the equivalent of $1 an hour.

You don’t need to believe that consumer electronics are an unalloyed evil to question whether something is out of balance here.

In my family, we have a quirky resistance to consumer tech. Our Manhattan home has a kind of neo-Amish ethos, lacking microwave oven, cable TV, video games or even a toaster. (We do have computers and broadband Internet access, though, as well as high-end but basic kitchen appliances.) Before bringing a gadget into our lives I always ask how it will increase the quality of our lives. And whether the benefit outweights the cost, the space, the complexity, and a potential future as toxic e-waste.

Our lifestyle is not for everyone. But I suspect net global human welfare might be a little higher if people bought fewer gizmos. What do you think?

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Posted in Digital Home & Personal Tech, Wireless

When Science Started Dying

Posted on December 3, 2009 by David Schatsky| Leave a comment

My latestest letter to the editor of the Wall Street Journal that will not get publised.

Daniel Henninger has a point about the role of science in society and of politics on science but is mistaken about the timing (“Climategate: Science is Dying,” Dec. 3, 2009). Even back in July, before “climategate,” only 84% of Americans said they believed the effect of science on society was “mostly positive,” according to the Pew Research Center for the People and the Press. And the number of Americans who saw solid evidence global warming dropped 20 percentage points over the last two years. Why? Not because of climategate but because of relentless efforts by right-wing politicians and sympathetic editorial page editors, including the Wall Street Journal’s own, to weaken public regard for science when it conflicted with their political goals.

At least since Ronald Reagan declared ketchup a vegetable and asserted that trees cause more pollution than cars, politicians have been trampling on science for their own ends, cheered on by a cynical media elements on the right. The scientific community must hold its own members accountable for maintaining high ethical standards. Politicians and the media should do the same.

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Posted in Media

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I’ll Have a Salad

Posted on October 7, 2009 by David Schatsky| Leave a comment

She: I think I’ll have a salad.

The menu features a section called “Salads” that offers six choices, such as arugula with crumbled blue cheese, spinach salad, mixed green salad, tri-color salad, etc.

The waiter arrives.

Waiter: What can I get for you ma’am?

She: I’ll have a salad.

Waiter: OK, er, what kind of salad would you like?

She: Oh, you know, a green salad, something interesting.

Waiter: Well, we have an arugula salad with crumbled blue cheese, a spinach salad, a mixed—

She: Yes, one of those.

Waiter: Would you like the arugula salad, perhaps?

She: Sure. Or maybe, what was it, the spinach salad?

Waiter: Yes, spinach salad.

She: OK. One of those will be fine.

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Posted in Commerce

Automatic Facebook Updater App

Posted on October 5, 2009 by David Schatsky| Leave a comment

I’m almost ready to test my automatic Facebook Updater application. Here’s how it works: At random intervals, at least daily, it generates a post in one of the following templates:  a snarky, witty observation; a shout-out to someone none of my other friends knows; a banal observation made while waiting in line/traffic/on hold/for the elevator; a comment about social media or Facebook specifically; a maudlin but digital and ephemeral remembrance of a deceased friend or loved one.

If I get this right, it could save me a ton of time.

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Posted in Uncategorized

Internet Privacy is Political

Posted on September 30, 2009 by David Schatsky| 3 Comments

The simmering debate about Internet privacy is starting to resemble certain political battles.  Opponents think it stinks and supporters think opponents just don’t understand.

In the health care reform debate opponents of various Democratic proposals reject the  euthanasia, socialism and runaway government spending they say are intrinsic to those proposals. Supporters say the opponents are being disingenuous or just don’t get it. The debate about setting a new energy strategy and tackling climate change are similar in character.

The debate about Internet privacy has interesting parallels. An article in the New York Times today cites a study showing that a significant majority of consumers object to online tracking by advertisers. The head of the Interactive Advertising Bureau, a trade group that favors voluntary, industry-defined privacy guidelines rather than government regulations, responds by citing a history of anti-marketing bias on the part of the study’s author.

The article quotes the lawyer for the the industry’s self-regulation coalition as saying, “The more people understand the practices and how the data is actually being used, that’s when the concerns disappear.” If only people were smarter about this, they would agree with us.

It’s a technocratic viewpoint that can really irritate outsiders with its failure to acknowledge how the average person perceives complex issues. I have technocrat leanings myself but have learned to try to cultivate sympathy for the views of outsiders. If you don’t, you can’t get very far.

The online media and marketing industries have their work cut out for them in educating the public and shaping opinion on this issue. Now they know how policy wonks feel.

Feel free to weigh in with your thoughts on the debate.

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Posted in Advertising, Marketing, Media

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Adobe to Acquire Omniture: First Take

Posted on September 16, 2009 by David Schatsky| Leave a comment

Adobe’s announcement that it intends to acquire Web analytics Omniture is intriguing on several fronts.

The brief history of the Web analytics industry has been marked by a flurry of acquisition and consolidation almost from its inception. The analytics function is critical to Web site operators and advertisers. That need, and relatively low barriers to entry need spawned a host of entrants into the space, most of whom were challenged to establish sustainable competitive differentiators. That resulted in a market characterized by price competition and a features arms race and an imperative to consolidate through acquisition. Omniture was a prime actor here, using much of the capital it raised from its 2006 IPO to acquire a string of companies including Visual Sciences, Webside Story, Offermatica, Mercado and Touch Clarity.

One of the ironies of Web analytics in online businesses is that although many companies are swamped with data and often fail to make effective use of the data they already have, there is also much they would like to measure but cannot.  One such area of where measurement (and content optimization) remains a challenge is in highly interactive Web sites, such as those that are built using Adobe’s Flash platform.

That fact seems to be a key pillar of Adobe’s strategic rationale for this acquisition. Adobe suggests that with the integration of Omniture tools content authored with Adobe tools will be easier to instrument, measure and optimize.

But integration alone is rarely sufficient grounds for acquiring another company. The acquisition presents a simplified competitive environment for the company and make increase the efficiency of the combined company’s sales operations. Adobe and Omniture undoubtedly have a very significant customer overlap.

The value of the deal is intriguing as well. As noted in today’s Wall Street Journal, worldwide market for Web analytics is some $600 million today, with omniture accounting for half of that, making the purchase price three times industry revenues, or six time’s company revenues.

My impression of both companies over the years is that their management teams are smart and driven. I expect them to create great value for Web publishers, advertisers and merchants over time.

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Posted in Uncategorized

Choosing the Right Dose of Twitter

Posted on September 9, 2009 by David Schatsky| 1 Comment

Social Media Spectrum

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Posted in Media

A Sense of Place

Posted on August 23, 2009 by David Schatsky| Leave a comment

What if your home town were a canyon? This past spring a Navajo guide led my family on a hike through the Canyon de Chelly in Arizona. (The New York Times today has an article and nice slide show featuring it.) Our guide had grown up in the canyon and he still has family down there. He said his family has lived in the canyon for 500 years.

It made me wonder what it must be like to call a place like that canyon your ancestral home. Those of us who know something of our ancestry might be able to trace our family back to “the old country,” perhaps some village in Europe or maybe Asia.

My own family has routes in Poland, Russia and Romania. My maternal grandfather came from Czernowitz in Romania (now part of Ukraine). I’ve never been back, but I suspect if I had, with the passage of time, the changing of borders and the destruction and construction of buildings and roads, what I would find would not be recognizable to my grandfather who was born there.

Part of my wife’s family comes from Castinatelli, Italy, which lies about 100 kilometers south of Salerno in the hills. We had the opportunity to visit Castinatelli some years ago. We met my wife’s 97-year-old great aunt who still lived there, walked the cobblestone streets and saw the ancestral family home, made of stone blocks and situated at the edge of a small piazza with well. The house is empty now; the current generation has moved up the hill to more modern digs.

It was a special privilege to walk amid the old country. Even if it wasn’t my own, I felt a connection to it.

My visit to Canyon de Chelly, where Navajo families have lived for 500 years, put the idea of the old country in different perspective for me. There is not much in the way of ancestral buildings down in the canyon. I think the Navajo’s primary tie has been to the land itself, to the 600-foot canyon walls, the river running along canyon floor, the pattern of sunlight and darkness that pass through the canyon as the sun crosses the sky. And apart from an invasion of non-native plants that has occurred over the last 50 years or so, the canyon looks just the way it did 500 years ago.

How powerful, looking upon the same home your ancestors did some 500 years ago, built not by human hands but the forces of nature, in geologic time. How powerful, that sense of place.

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Defining Personal Gain: How Traders Are Different

Posted on August 5, 2009 by David Schatsky| 2 Comments
Image representing New York Times as depicted ...
Image via CrunchBase

The New York Times today carried an a article about government moves to impose restrictions on the practice of “flash trading,” in which deep-pocketed and tech-savvy investment firms deploy millions of dollars of computing power to gain what some say is an unfair advantage in the financial markets.

As interesting as this phenomenon is, what really caught my eye is the reporting. According to the article, “All of the traders spoke on the condition of anonymity, because they did not see any personal gain in speaking publicly.”

Except for people seeking to sway public opinion or would-be experts building their brands, why should anyone ever speak to a journalist on the record? Yet so many do.

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Posted in Media