Thursday, January 14, 2010

NICE JOB, President Clinton!! (Really, I Mean It)...

NICE JOB, President Clinton!!!
"Bill Clinton has raised $2.6 million from 30,000 donors in the last 24 hours. He will also likely be tapped to play a major fund raising role for the UN."--(HT:

Changing the World One, Goat at a Time...GREAT STORY!!!

A VERY creative and market orientated solution to helping people in Southern Sudan (HT: AID WATCH), and specifically in a place that has a traditional economy and money has very little use.  The problem is that this is a solution that is perhaps only good in limited areas of the world, so it cannot be used as a ubitiquous solution to poverty...
"...research found tribes in the area bartering with grain, gold, goats, chickens and cattle. The small amount of circulating bills barely survives local termites, which can devour a pile of cash in just a few hours. Grain is commonly used, but attracts rats, which in turn draw poisonous snakes. In addition, grain needs seed and time for cultivation, depends on unpredictable rainfall, requires storage for excess supplies, and is more vulnerable in times of war. Searching for a better cash-less solution, we found goats. Goats are portable, require relatively little care, and since tribes in the region universally trade goats, this solution doesn’t exclude anyone."
Goats seving as a medium of exchange!!  The only thing that gives money its value is what it can buy, or be traded for.  If everyone you trade with recognizes the value of a goat and how much it is worth relative to others things, then it can function as "money". 
"We made three loans of three locally-sourced breeding goats each (one male, two females), for a total investment of $300. The loans were two years, and “repayment” was a reciprocal set of goats (from the progeny), so there was no interest or expense. The loans went to three community leaders, chosen by the communities. Our intention was to reinvest the “repaid” goats back into the village, making the program self-perpetuating. But the villagers had other plans. Of the three loans, only one was repaid to us, an abject failure in finance terms. Instead, goats were contributed to other villagers to start herds, “paying it forward” rather than paying us back. Instead of continuing with our program, borrowers assumed responsibility and perpetuated the project not just to feed their own families, but to help the whole village.
Five years later, these villages no longer need external food assistance, this program no longer exists..."
Helping whole villages become self-sufficient with a VERY small investment...This is an excellent example of addressing and solving a problem with market-based solutions.  I would love to see more of it!!

Wednesday, January 13, 2010

"Avatar" Is Promoting Revolution In China....

Apparently the movie "Avatar" is having an effect in China that may be far reaching...
...In China, however, it has more rebellious undertones.
That's because Chinese local governments in cahoots with developers have become infamous for forcibly seeking to evict residents from their homes with little compensation and often without their consent. The holdouts are known as "nail households," since their homes are sometimes left stranded in the middle of busy construction sites. More often, however, they are driven away by paid thugs. Private property is one of the most sensitive issues in the country today, and "Avatar" has given the resisters a shot in the arm.
Even in Hong Kong, the "Avatar" banner has been taken up by antigovernment activists trying to defeat a plan to demolish a village to make way for a new high-speed railway line. One mysterious benefactor reportedly donated movie tickets to the villagers to stoke their enthusiasm for protests...."

What Came First--The Chicken, The Egg, or California's Job Losses....

Interesting dilemma: Californian voters approved a propostion in 2008 to impose expensive regulations on livestock farmers to require them to (WSJ article)...
"...prevent "cruel confinement" of farm animals in cramped conditions, like small "battery cages" for egg-laying chickens, or "gestation crates" for pregnant pigs."
"The California initiative prohibits confinement of hogs, veal calves and poultry "in a manner that does not allow them to turn around freely, lie down, stand up, and fully extend their limbs."
Certainly it is a noble goal to ensure proper treatment of farm animals.

However, this expensive mandate (not due to go into effect unil 2015) is having an adverse effect on the industry in the present...
The law doesn't take effect until Jan. 1, 2015, but farmers already are worried it will drive up costs, because many cages commonly used now probably will have to be scrapped for bigger cages or no cages at all.
"I've got guys saying they're unwilling to make an investment or try to raise capital, because they don't know how to comply" with the measure, said Fiona Hutton, a spokeswoman for the Association of California Egg Farmers.
It is also providing neighboring states with an incentive to lure California producers to their state...
Economic-development officials from Pershing County, Nev., recently visited egg-industry officials in California to pitch Nevada as an alternative home. "We wanted to let them know that we do have the land, the climate, and we'll work with them," said Kathy Johnson, the county's economic development director. "We don't have these stringent regulations that are being imposed now in California."

In Idaho, where there's currently little poultry production, Doug Manning, economic-development director of the town of Burley, said he wanted to offer incentives to poultry farmers as a way to increase jobs and tax revenue in the area. He has heard from a few California farmers who "are looking at some options," Mr. Manning said. "We said, 'When you're ready, give us a chance.'
Interesting trade-offs are presented...Animal protection which is a worthy cause, or jobs that California needs...Which would you choose????

Hey Look!! A seldom use Monetary Policy Tool is Used...What a GREAT DAY!

The Peoples Bank of China (PBOC) utilizes the Monetary Policy tool of Required Reserve Ratio that our  Federal Reserve Bank seldom (by seldom, I mean decades) uses to control the nations money supply.  The Required Reserves Ratio (RRR) is a numerical percentage that the Federal Reserve requires bank to withold on EACH deposit they recieve from depositors. 
Starting Monday, most Chinese commercial banks will be required to put 16% (In US it is 10%) of their deposits on reserve, an increase of a half percentage point. In recent years, the reserve-requirement rate has emerged as a primary tool for the central bank to fine-tune monetary policy.
Example: If the RRR is 10% and a bank recieves a $1,000 deposit the bank must withold $100 in an account with the Federal Reserve Bank. The bank can then loan the remaining $900 (called "Excess Reserves") to customers to buy "stuff".  If the Federal Reserve Bank wants to slow down lending, hence the purchasing of "stuff", then they RAISE the RRR so banks withold more and lend out less.  More specifically, the bank has LESS to lend out and therefore INCREASES the interest rate they loan the money out for.  This is done in times of inflation, or pending inflation, to put a damper on the borrowing for consumer purchasing and speculation by investors.  This tends to stabilize prices.
"The People's Bank of China said it will raise the percentage of deposits that banks must keep in reserve and can't lend, a shift intended to stave off inflation and the asset bubbles that can accompany it..."
Restraining investment to curb inflation is a balancing act that all Central Banks in the world have to face.  If you hit the brakes too fast to address inflation, you risk setbacks in economic growth and employment.  If you dont throttle back on the money supply then inflation becomes an issue.  The Chinese are taking a gamble to get out in front of inflation.
With an economy that is led largely by investment, China faces a balancing act in bringing down lending without choking off growth. It has also proved easier to spur banks to increase lending than decrease it.
The US Federal Reserve has yet to committ to contracting the money supply that has been so generously increased in the past year or so.  We are not in observable recovery, so putting the brakes on now would be counter-productive and risk a "double-dip" recession...

Is That a Salami in your pocket or..... it an Underwear Bomb!!  I never saw this one coming.  As a result of increased screening of airline passengers, the smugglers of meats from around the world are finding it nearly impossible to get through customs.  I have to say, I have never hear of this before but apparrently it is a thriving business for chefs and exclusive restaruants.
Such measures might discourage terrorists, but they are also likely to catch chefs smuggling meat from Europe. Chefs such as Rey Knight, who once flew from Italy to Miami with a pork shoulder and fennel-pollen salami vacuum-sealed and hidden inside a stainless-steel water bottle. Another time, he says, he hid a 4-pound goose-liver torchon from France inside the belly of a salmon.
The government is on the job, though, and not taking any "bolongna"...
Sausages and hams "are much more dangerous than people think," says Janice Mosher, an official at U.S. Customs and Border Protection, which seizes about 4,000 pounds of prohibited meat, plant and animal products a day. "Those items truly have the ability to spread disease." The government is concerned that bacteria from a smuggled piece of meat will spread through the ecosystem, infecting livestock and hurting agricultural production, Ms. Mosher says.
I may turn off the comment button for this one...Too many opportunity for puns...:)

Tuesday, January 12, 2010

Congress Is Stopping the Downloading of Movies/Videos Through the Internet!!!

Not really, but what if they did?? Would you be better or worse off? Would Blockbuster and/or  DVD producers be better off if they allocated resources to stop or slow down the conversion of entertainment delivery on the internet?  They certainly would have a huge financial incentive to do so, but would WE be better off  if their narrow interest was served instead? 
The process of creative destruction is taking place in the way we get our movie entertainment delivered to us.  In class I use the evolution of how we get music delivered to us as an example of creative destruction.  This ability to "let go" of industries that no longer serve a prominent role in the market place is key to advancements in products and services that make our lives better, for the most part.
From The Economist: SALES of DVDs in America are falling according to Adams Media Research. Revenues dropped from $12 billion in 2004 to $8.7 billion in 2009 as people rediscovered the joy of renting. Legal film downloads brought in just $250m last year. Hollywood is keen to sell films online and a consortium, the Digital Entertainment Content Ecosystem (DECE), which includes five of the big studios, recently agreed on a format for digital films and a way of keeping track of purchases. Film fans will be able to buy a movie once and then play it on different gadgets. But the price must be right. If it is too low the studios will revolt fearing a loss of DVD sales and if charges are too high people will continue renting or download illegally.
While markets are rightly criticized for performing poorly at times, we must stop and appreciate the truely wonderful things we benefit directly or indirectly from as a result of limited interference in the evolution of new products and ways of doing things....To that end, as I press the "Publish Post" button for this entry, I am thankful for the ease of use this tool gives me to communicate my thoughts to you...:)

Monday, January 11, 2010

Nice Interactive Graph of the Darfur Region in the Sudan...

If you are interested in the Darfur region of The Sudan, then you may be interested in this interactive graphic on the history of Sudan. Very easy to navigate and contains concise facts...

Damage to Orange Crop---Part 2---How would Eddie Murphy Deal With It?

WIth the impending disruption in the Market For Oranges, we may want to look back in history for some guidance...

"Paging Frederic Basitiat, Paging Frederic Bastiat, you are needed in Washington"

From the Department of "Seen and Unseen", we bring you ANOTHER example of a questionable Federal government policy to try to solve a legitmate problem with a poorly thought out plan that now serves a constituency that won't let the progam die. "The unintended ripples from the biomass subsidy program" from the Washington Post.
"It sounded like a good idea: Provide a little government money to convert wood shavings and plant waste into renewable energy.
But as laudable as that goal sounds, it could end up causing more economic damage than good -- driving up the price of raw timber, undermining an industry that has long used sawdust and wood shavings to make affordable cabinetry, and highlighting the many challenges involved in decreasing the nation's dependence on oil by using organic materials to create biofuels."
 Sound alittle familiar?? Ethanol, anyone? I really have no problem with working towards cleaner energy sources in order to become more energy independent from fossil fuels.  What I do have a problem with is narrow interest group politics that use ever-expanding taxpayer financed subsidies to fund programs that may be passed their point of dimishing returns and reach the point of harming other industries that perform important functions for people everyday...
In a matter of months, the Biomass Crop Assistance Program -- a small provision tucked into the 2008 farm bill -- has mushroomed into a half-a-billion dollar subsidy that is funneling taxpayer dollars to sawmills and lumber wholesalers, encouraging them to sell their waste to be converted into high-tech biofuels. In doing so, it is shutting off the supply of cheap timber byproducts to the nation's composite wood manufacturers, who make panels for home entertainment centers and kitchen cabinets.
Another Congressman's/Senator pet project gone arwy...Wish they would study alittle Frederic Basitat. The world would be such a better place...

Harvard Business School studies a GREAT

Harvard Business School sent interns to study the development model that Indegoafrica is employing in Rwanda to change the lives of survivors of the genocide in 1994. This comment from one of the interns confirms for me that I have chosen a good cause to help promote in my little corner of the world.
What has become clearer to me over the past week or so, is that Indego is really about empowerment, both of the women in the cooperatives and the interns from Orphans of Rwanda who deliver the training.
These women have large families and demanding responsibilities. In my visit, I have been impressed by the skills the women have acquired through the Indego training programs, and more importantly, the sense of confidence and POWER the women posses as a result. They understand profit and cost, marketing and distribution, basic book-keeping, and even some English.
Largely due to the committed trainers and staff at Indego, these women are tough, independent business people who can analyze new business opportunities, and discern would be exploiters.
Please consider going to to purchase a VERY unique item for yourself or as a gift for someone.  Stop by my classroom to see the basket I have.  It makes me smile everytime I look at it!!!

Sunday, January 10, 2010

Supply Curve for Oranges is Shifting to the LEFT As We Speak!! Go buy some TODAY!!

The Supply Curve for oranges is shifting to the LEFT as we speak!! The time is now to go buy oranges...oh, wait, that increases the demand for Oranges which shifts the Demand curve to the RIGHT and increases the price too....Economics is SOOO confusing...Oh, well, hopefully you bought oranges yesterday...

New York Times!! Get a rope...

If you are interested in Media, this might be of interest to you...This very short video shows over the course of a day the number on hits the New York Times website.  Pretty fascinating!!!

The New York Times site traffic, US, June 25, 2009 from Nick Bilton on Vimeo.

"Are U-Haul goin' to Cal-a-for-ny-yay?"

If you need more evidence of the migration of people from California to Texas, look at the rates to rent a U-Haul from California-to-Texas and vice versa...
One-way rental rates for a 26-foot truck from U-Haul:

From Dallas to San Francisco: $734
From San Francisco to Dallas: $2,116

From Houston to Los Angeles: $706
From Los Angeles to Houston: $2,051

In other words, it’s almost three times more expensive to rent a truck to leave California (from San Francisco or Los Angeles) and move to Texas (Dallas or Houston) than it is to leave Texas and move into California, suggesting that there is a huge outmigration of trucks and people away from California to Texas.
HT: Carpe Diem

BEWARE!! Netflix is Watching You!!

This is a pretty cool interactive graph showing the popularity of movies in different Big City areas and their suburbs.  It is data compiled by Netflix.  If you look on the right side of the page you can find "Dallas".  When the graph comes up, move your cursor across it and you will see it will show you the rankings of movies based on the number of rentals in different zip codes.  Keller, I believe, is a little off the page on the right  left hand side, but you can get pretty close.
HT: Carpe Diem
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