Holy cow – what it means to be too big to fail.
AIG Risk & Bankruptcy Report
Holy cow – what it means to be too big to fail.
Ok, ok, I concede! I have gotten several emails and even comments to my blog post about Stewart vs. Cramer showing me the errors in my ways.
Let me see if I can count the ways that I was wrong. First, it was Stewart vs. CNBC (and business journalism in general) and not Stewart vs. Cramer. Second, Cramer and CNBC were losers. However, on a third point, I am or more may not be wrong. Perhaps Cramer and CNBC have a wake up call (like this viral petition to “Fix CNBC” going around) to make a change. But after being wrong on the first two points, I might be willing to entertain the idea that Cramer/CNBC/etc cannot turn save their ailing enterprises.
In a past post, I asked “Can you crowdsource Watergate?” Well, Yochai Benkler lays out the case in this provocative commentary that crowdsoucing can indeed speak truth to power. I agree with him on several points: newspapers are in rapid decline; non-profits, remaining newspapers and new players like bloggers can help fill the gap somewhat; that the NYT’s credibility was used by the Bush administration to bolster its Iraq war claims rather than used to speak truth to power by the Bush administration.
However, I think that Benkler is not entirely correct. These forces will surely mitigate the decline of newspapers, but something real will be lost. These new players, like the blogs, are increasingly fragmented. With the decline of newspapers, I think it will be harder to make related advocacy groups struggle with areas of conflict.
Here is a personal example of mine. We created a GOTV campaign in 2000 called “RegisterToVoteOrNot.com.” The NYT covered our campaign–on page A1. (As a side note, think about the relative prominence of an above-the-fold NYT article versus a story on the homepage of NYTimes.com.) The spin? “As Public Records Go Online, Some Say They’re Too Public.” Whereas we were advocating civic participation, they forced us to address privacy concerns. In a world where privacy advocates have their own blogs and newsletters and civic participation advocates have a different set of media, it would have been hard to come to the reasonable compromise that we ended up with.
And of course, there are many such conflicts including ones of much greater import than ours. I think that these tussles are of central importance to a functioning democracy, and they may be diminished as newspapers decline.
Increasingly, A-list celebrities like Shaquille O’Neill and Demi Moore are actively updating their fans through twitter. In Demi Moore’s case, she has nearly 50,000 people following her! Even Congress is getting into the act, as 20 Senators and 50 Representatives have started twitter accounts. A friend from college has launched yardbarker.com, an amazing site that has gotten hundreds of professional athletes to blog on a regular basis and has the inside scoop on sports in general.
Why are so many celebrities and public figures “wasting” their time on social networks? Disintermediation. Now, they can offer tidbits directly to their fans bypassing the gossip rags and traditional media. By offering the personal tidbits of their own choosing, they can simultaneously help satiate their fans while controlling the spin about their lives.
Is this disintermediation a good thing? My brother-in-law, Sam, is a sport reporter, and he was bemoaning the fact that Tiger Woods issues press releases directly to his fans through his web site but does not do press conferences. Sam worried that ultimately fans were getting a disservice because they lost the chance of indepth, knowledgeable follow up questions on potentially sensitive subjects. His concern translates into a more alarming question when we turn to politics. Can we really imagine a “Watergate moment” by a blogger?
At the present time, I think the disintermediation trend is very real. We are losing our traditional “fourth estate” in the process, and hopefully entrepreneurs will create new institutions that are native to the new media to speak truth to power.
Charles Blow accuses most citizens of being biased against blacks in today’s NYT. Moreover, he accuses the vast majority as “cowards” because they are biased, but they won’t admit it. To support this accusation, he sites evidence from a controversial new measurement called the IAT, or “Implicit Attitude Test.” It measures how closely you associate concepts in terms of response time.
You can try the test out yourself on this site. It’s pretty crazy, and you will almost certainly come out with a slight bias against blacks no matter how hard you try.
But the question remains: does that measure have any real significance? Does it imply that we treat people with racial bias? These questions, applied to gender rather than race, are a central part of my dissertation.
In short, I find that implicit attitudes do matter, but it depends on the circumstances. Implicit attitudes affect behavior unconsciously, so they are indeed pernicious. When all else is equal, they probably influence decisions. But they do not overwhelm conscience decision making, or overwhelm more relevant information.
For example, race probably factors heavily in low information races. When you do not know about a minor local race (say, city council), you may unintentionally favor a white candidate over a black candidate. But in high information (e.g., the Presidency), race probably places only a small role.
I plan to post more about this topic in the future, but I wanted to react to this interesting item that appeared in today’s paper!
At e-thePeople.org, we long ago adopted the policy not to police what members posted on our boards. We adopted this policy for several reasons. First, we wanted to allow the members to be responsible for defining and enforcing the community standards. Second, we did not want to incur the (unscalable!) costs of moderating a large forum. Third, we were worried that we would risk legal liability by selectively moderating the content on our site.
Well, it seems that the third reason may not be valid. According to this legal argument, newspapers and other publishers are not usually legally liable for the content on their sites. Scrubbing out expletives is ok! Removing posts is ok! Here are the takeaways:
— The first is if you passively host third-party content you are going to be fully protected under Section 230.
— If you exercise traditional editorial functions over user submitted content, such as deciding whether to publish, remove or edit material, you will not lose your immunity unless your edits materially change the meaning of the content.
— If you pre-screen objectionable content, correct or edit or remove content after publication, you are not going to lose immunity.
— If you encourage or pay third parties to create or submit content, you will not lose immunity.
— If you use dropdown forms or multiple-choice questionnaires, you should be cautious of allowing us
I hope he is correct, for the sake of free speech! But I do worry that big sites will always be big targets for law suits, regardless of the legal merit of their cases. (Hat tip: Jay Rosen)
Last year, I thought David Brooks might have lost it. Fortunately, I think the change in the Presidency has breathed new life into his columns. Today, his analysis of the politics and policy of the stimulus package in the NYT is spot on.
Let’s hope the center holds, and we can jettison stale liberal spending plans and focus the stimulus package on getting the economy working again and bring some creative Republicans and conservatives back into the conversation.
I really cannot stand the pirate analogy that seeks to demonize sharing. Consider this ridiculous quote from the front page of the NYT:
Hollywood may at last be having its Napster moment — struggling against the video version of the digital looting that capsized the music business. Media companies say that piracy — some prefer to call it “digital theft” to emphasize the criminal nature of the act — is an increasingly mainstream pursuit.
Looting? Capsizing? Theft? Piracy? Really?!? To remind everyone, here’s a picture of real pirates in Somalia today:
Notice the use of violent weapons: guns and rocket launchers. Recall that they are attempting deprive someone of physical property. Physical property, unlike so-called intellectual property, can only be owned by one person at a time. Also, they take the crew hostage and hold them for ransom.
In contrast, sharing of digital goods increases the public good at no harm, on the margins, to the original owner. Remember kindergarten? Sharing is good!
The only plausible argument against sharing is that freely sharing may reduce the incentive to create content in the first place. But that argument only holds if (1) less entertainment content were created because of sharing and (2) the amount of lost value exceed the massive benefit to consumer of cheaply and easily accessing the content. As far as I can see, there has been no discernible decrease in the creation of good or crappy content in the five years or so.
Labels and studios may hurt from online sharing because it disrupts their control over distribution. But the artists? New artists that are creating the new content actually benefit from this alternative distribution mechanism that avoids the usual payola necessary through labels and studios. In fact, I think that digital distribution is creating a greater incentive to create content than previously. If we waste all our resources in a futile effort to protect vested interests, we are certainly going to get passed by other countries that side with the future and not the past.
Stop the insanity!
Too bad Daschle wasn’t running for Secretary of Energy–then this ad would be just about perfect:
Touché, David Brooks! Best editorial. Ever. A small taste:
There are times when Masters of the Universe must be Masters of the Grovel. If you are a hedge fund manager and you find yourself in conversation with a person from Ward Three, apologize for ruining the Hamptons, and subsequently, the entire global economy.
I heard a disturbing bit of market intelligence from an investment banker friend. Apparently, several large hedge funds (e.g., $8bn+ under management) put on the “hope” trade in December. In the hope trade, these large hedge funds that were down a lot in the first 11 months of 2008 decided to go “all in” in December and try to bid up equity prices before the end of the calendar year. By boosting prices–which were up about 20% for the month of December–they were able to report higher returns for the entire year in the hopes of staving off distributions. A large asset manager who used to manage almost all my money seemed to be engaged in something similar, so this story seems highly plausible to me. (I have managed to extract myself from my manager after sustaining major but not critical injuries to my personal account.)
So far, the strategy has been OK. But has added even more risk to the US economy. If prices go down (as they have so far in 2009) and the limited partners decide to withdraw their money in March, it could put a lot of additional downward pressure on the stock market. Especially with the baby boomers at or near retirement age, stock declines and net capital outflows could become a vicious cycle. Translation: a run on the stock market!
This scenario isn’t set in stone. If you think that economic conditions will materially improve by March, then perhaps the ‘hope’ trade will pay off. Does that seem likely to you? Soon, the day of reckoning may be upon us!
Apparently, Condi Rice was President of the United States for about 1 minute today, beating Obama to the punch as the first black President. And we were probably under Biden’s rule for a minute or so as well, if this blog post by a constitutional law professor is to be believed:
No, the oath is *not* legally meaningless, even if it is a ritual. Art. II Sec 1. Cl. 8 of the US Const. clearly states that “Before he enter on the Execution of his Office, he shall take the following oath. . . ” Therefore, from 12:00 noon until about 12:01 pm today, the President of the USA was Condoleeza Rice. From 12:01 until about 12:03 pm the President of the USA was Joe Biden. Interestingly, this means that, technically, Obama was *not* the first African-American President! (And yes, I actually am a constitutional law professor!).
What good are lawyers anyway? This must be nonsense!
Having trouble understanding how these trillion dollar bank bailouts work? Krugman does a great job in describing the problem is simple yet precise terms in his column today. The conclusion: buying the toxic assets–the policy proposal being pushed right now–almost certainly won’t solve the problem.
This article in the Onion was an instant classic from the minute it was printed 8 years ago. A rare article that is funny well beyond just a great title: “Bush: ‘Our Long National Nightmare Of Peace And Prosperity Is Finally Over’“.