Modern News Print

Joe Nocera objects to Cable going a la carte. He says it would be too expensive for the Consumer, as networks charge by total Consumer volume, rather than specific Consumer use. A group can buy any old Studio, run in Second-hand equipment, program nonsense, get a Cable company to bundle your station in, and suddenly you are one of the major networks. One of the channels in my bundle finally gave up the Ghost. Did they quit? Oh no, they simply went to total Paid Programing without any editorial at all, and rarely even change the Paid Programing; I think the Station is down to Tapes and a Duty Engineer. Still, I wonder at the national revenues generated by this stimulating network. I guess I am only saying that Cable bundling is crap, and the anti-corruption people should be looking at their own television sets; if there is no Kickback system at work, then Cable executives have been imitating Forrest Gump too well, or they have been watching re-runs of Dumb and Dumber too often.

Nelson Schwartz is trying to tell the Investor that success at Retail does not mean success as Stock Share value. Why? The Answer is simple: the Retail market has been saturated, and Stock issuances have destroyed the value of the Stock. It is all a question of Retail volume and Stock volume. Stock is issued in Good Times, and Retail volume must continue to match the volumes of the Good Times Retail, or the Stock is in the Toilet. One of the potential values coming from a Recession, if it comes, will be a mechanism to regulate issuance of Stock Options, Stock Grants, and Stock buyouts. The current system of doing Business is designed to limit previous Stockholders to the same level of Stock Dividends, without Stock divisions or rise in the Price of the basic Stock; simply so that the value of increased performance can go to the Executives who engineered the Windfall. The Trouble comes in the failure to build up intrinsic value in the over- issued Stock, and the tying of Retail volume to a treadmill simply to keep constant value: the Greyhound eventually runs itself to death.

This article by Robert Schiller bothers me, though not because Robert is a bad economist, even Elizabeth Warren’s advocacy of a Financial Products Safety Commission has much merit. I do not like the Schiller/Weiss proposed blockage of market forces determining home values by venue of insurance; which would fail at any rate, under a sharp decline of housing market values. His praise of Fannie Mae/Freddie Mac lacks of real sincerity, as both institutions have shown all the foibles of private lenders, simply maximized by Government intervention. I am afraid that the Schiller advocacy for Business as Usual is the wrong sentiment, as that is what has brought Us to this Point in the first place. lgl