Share86Tweet12ShareEmail98 SharesUnited States Department of Agriculture [Public domain], via Wikimedia CommonsApril 8, 2019; The Root and Mother JonesIn step with its pattern of going after the poorest among us, the Trump administration is now seeking to reduce access to the Supplemental Nutrition Assistance Program, also known as food stamps or “SNAP.” As with Medicaid, the administration is seeking to deny benefits to “able-bodied” people without a job, and the strategy looks just as fated as the Medicaid ploy to result in highly negative outcomes.Writing in the Washington Post last month, Helaine Olen notes, “All a work requirement will do is put yet one more bureaucratic hurdle in the way of someone who needs SNAP so that person and his or her family can purchase an adequate amount of food. It will result in more hunger, not more workers.”Additionally,the administration has proposed major cuts to SNAP in its FY 2020 budgetproposal. Olen points out that the “$17.4 billion the Trump administration proposes takingfrom the program in fiscal 2020, and the $220 billion it would cut over thenext decade (a cut, by the way, of one-third), will leave many Americansscrambling for a way to feed themselves adequately.”The administrative rule change alone could cause 750,000 Americans to lose food assistance, which is meant to encourage “able-bodied adults without dependents” to join the workforce. This premise assumes these folks are not working or going to school. In fact, most are. But, as NPQ found in 2017, many don’t make enough to support themselves without the help of SNAP. Also, since most of these jobs are minimum wage, childcare and transportation costs limit their possibilities for work. Mother Jones writer Kanyakrit Vongkiatkajorn relays the results of “an analysis of SNAP recipients from Mathematica, a nonpartisan think tank.”Among the estimated 1.2 million SNAP recipients who would be affected by the changes, 88 percent were in “deep poverty”—meaning they had a household income at or below 50 percent of the poverty level. (A report from the Urban Institute found that SNAP helped reduce deep poverty by 28 percent in 2015.) Nearly 80 percent of them lived alone, while about 11 percent were working, receiving an average of $181 in benefits per person. The majority of those on SNAP who aren’t working “are caring for someone else, suffering from a disability or chronic health condition that limits their ability to work, or going to school,” according to the nonprofit the Center on Budget and Policy Priorities.Thislaw is, of course, not new, but many states have chosen to waive itsimplementation due to the cruel impact it has. But now, the Trumpadministration is making those waivers much harder to get. What’s more, the alternativefederal and state work/training programs are not equipped to accommodate thenumbers of clients that this new work mandate would send their way.Theracism and classism at the core of these measures should be of great concern. Whensomeone threatens people’s basic means of sustenance, alarm bells should go off,and the outrage should be loud and clear.—Carole LevineShare86Tweet12ShareEmail98 Shares read more
Estonian service provider Elion ended September with 150,132 IPTV subscribers, up 11% year-on-year.The operator’s internet subscriber base was up 6% to 209,089, while 115,000 took a triple-play package.Elion reported revenues for the nine months ending September 30 of €150.5 million, down €8.7 million year-on-year. EBITDA was down €5.6 million to €40.1 million.
Jakub KłoczewiakLiberty Global and its wholly-owned Polish cable unit UPC Poland have named Jakub Kłoczewiak as vice-president, customer care and customer experience, responsible for the preparation and implementation of Liberty Global’s customer care strategy across the whole of central and eastern Europe.Kłoczewiak previously worked for Orange Poland as head of its Contact Centre and Orange Customer Service subsidiaries.
Manuel KohnstammCable Europe has introduced a new form of associate membership for content providers, with Viacom and HBO Europe the first to join, as part of a move to cooperate more closely with cable marketing organisation CTAM Europe.Speaking at the Cable Congress press conference this morning, Cable Europe president Manuel Kohnstamm said cable and content providers would work with content providers on technology and on developing common positions in some areas.“We see there is a natural joint interest between the two sides of the industry in terms of creating added value for our customers,” said Kohnstamm. Asked by DTVE about moves by content providers including HBO into distributing their content direct to consumers, he said: “We may compete in some areas of the market but there is a joint interest in developing the product overall. We have a very rich history in content relations. That is something we want to evolve and develop into the future. I don’t see an natural antagonism between these two areas. There are areas in technology and possible areas of cooperation in policy, for example in copyright regulation.” He said the current European copyright regime sometimes benefits newer technologies by default because established distribution players have to submit to long-established practices.Speaking about the industry’s performance in general over the past year, Kohnstamm said there had been considerable consolidation, with Vodafone acquiring cable assets and Numericable acquiring SFR. there have also been successful IPOs from Com Hem, Altice and Tele Columbus.“The argument still goes that the European industry is very fragmented,” said Kohnstamm. “The European industry would still benefit from [further] consolidation.”Kohnstamm said “this is an industry that thrives on scale and if you want scale, you need to consolidate”. He cited Netflix as an example of a company with scale. “If you have more powerful competitors competing with each other, that is good for consumers,” he said. “Fixed-mobile consolidation will give better opportunities and better services.”Kohnstamm said European decision makers want to stimulate investment in broadband and a number of companies have announced signficant investment plans, including Telenet and Virgin Media, both members of the Liberty Global group. read more
An episodic virtual reality series from American movie director Doug Liman is going into production.Liman and his production partner at 30 Ninjas, Julina Tatlock, are working with cinematic VR firm Jaunt, Condé Nast Entertainment and Oscar-nominated screenwriter Melisa Wallack (Dallas Buyers Club) on the series, Invisible.Jaunt, which European satcaster Sky and The Walt Disney Company back financially, and the entertainment arm of publisher Condé Nast have been working together on serialised VR programming. Invisible marks the first time they have partnered with Liman.Television companies have been experimenting in the emerging VR content space, as question marks remain over the viability of the medium as consume proposition.Invisible will run to six episodes. Set in modern day Manhattan, the show will expose the secrets of a prominent New York family, who have a supernatural gift that is passed through generations.“Exceptional content is at the core of our business, and we’re always looking for innovative ways to engage audiences,” said Dawn Ostroff, president of Condé Nast Entertainment.“Virtual reality offers us a tremendous opportunity to push the boundaries of our storytelling, and provide audiences a fully-immersive viewing experience.”Episodes will be made available on the Jaunt VR App on Google Play, iTunes and GearVR.“Episodic series such as Invisible are the future of mainstream VR content and will make waves attracting ever growing audiences,” said Jaunt Studios president Cliff Plumer. “This partnership also ensures that Jaunt will continue to remain at the forefront of premium VR content production and distribution.”“Throughout this entire project, from development to the shoot, the technical and the creative teams have worked hand-in-glove,” said 30 Ninjas founder and CEO Tatlock.“What can we write for VR? What tells the best story and how can we push the technology so that we break people’s expectations. Everyone else is concerned with defining the rules of VR. We’re fascinated with the invention.” read more
Swedish cable operator Com Hem reported strong Q1 results with lower than expected churn, slight growth to its TiVo customer base and a more than doubling of profits.For the first quarter, Com Hem said that churn of 13.9% was “significantly better than our expectations” and was only one percentage point higher than the record low churn of 12.9% it recorded in Q3 and Q4 2015.“Underlying consumer churn trends are positive, and we expect to return to our prior underlying trend rate from Q2 and onwards,” said Com Hem CEO, Anders Nilsson.The number of digital TV customers remained unchanged during the quarter at 635,00 revenue-generating units, which Com Hem attributed to “price rise activity”. However, its TiVo base TiVo base grew by 5,000 customers.“At the end of the quarter, 228,000 digital-TV customers had a TiVo subscription, corresponding to 36% of the total digital TV base,” said Com Hem.It also reported that more than 90% of new subscribers are choosing speeds of 100 Mbit/s and above, bringing average speeds among Com Hem’s user-base up to 125 Mbit/s, compared to 100 Mbit/s a year ago.In terms of financials, Com Hem said that revenues rose 3.9% year-on-year to SEK1.276 billion (€139 million). Its net result for the period more than doubled to SEK 95m, compared to SEK40 million a year earlier.“The increased customer satisfaction we saw during 2015, after product improvements, such as the introduction of Com Hem Play and extensive investments in the quality of our broadband services, paired with improvements in our service levels, have made it possible to implement price adjustments,” said Nilsson.“Price rises had a limited impact on Q1 consumer ARPU, with the bulk of pricing implemented on March 1 and a minor part on April 1, driving an increase of ARPU of SEK 1 to SEK 364 (Q4 2015 SEK 363). The full effect of the price rise will be seen in the second quarter revenue. In total, over half of our customers were affected by this year’s price rise programme which on average was somewhat larger than 2015.” read more
French service provider Free has added two new à la carte bouquets targeted at Arabic and Vietnamese-speaking groups to its programming line-up.The operator has added Telekidz, a kids TV package for Arabic-speaking audiences comprising three channels – Al Rawda, Basma and Majid – to its line-up.Al Rawda targets kids aged three to six with educational content, while Basma is aimed at the same group with an animation offering. Majid is targeted at older kids. The name of the channel is based on one of its main characters, originating in a kids magazine created in 1980.The Telekidz offering will be available for €2.99 a month.Free has also added what it says is France’s first bouquet of Vietnamese channels, also for €2.99, to its line-up.This comprises four channels – news service VTV1, VTV3, while offers a mix of movies, popular entertainment formats such as X-Factor and The Voice, sport and music, HTV9, a general entertainment channel, and NetViet/VTC10, a channel specifically targeted at Vietnamese expatriates. read more
Satellite operator AsiaSat’s ‘largest ever satellite’, AsiaSat 9, is ready to be shipped to Baikonur in Kazakhstan ahead of its launch.AsiaSat said that the satellite had passed its pre-ship review meeting with manufacturer Space Systems Loral and would be shipped as soon as required.The satellite is a a replacement satellite for AsiaSat 4 at the 122° East orbital slot.AsiaSat 9 is a SSL 1300E satellite equipped with 28 C-band and 32 Ku-band transponders, and a Ka-band payload.The satellite will provide enhanced C-band coverage over Asia, Australasia and the Pacific region, as well as customised Ku-band beams for Australasia, East Asia, Indonesia, Myanmar and Mongolia.AsiaSat 9 will be launched by an ILS Proton Breeze M launch vehicle from the Baikonur Cosmodrome in Kazakhstan.“We are pleased to achieve this key milestone with our largest-ever satellite ready to be shipped to the Baikonur launch site,” said Andrew Jordan, President and Chief Executive Officer of AsiaSat.“AsiaSat 9’s additional capacity and high performance coverage will provide the path for our continued growth and ever better service to our customers.” read more
Today’s entertainment industry technology vendors are reeling off jargon like “AI”, “machine learning”, and “deep learning”, touting the benefits these technologies promise.It can be difficult for video server provider decision makers to discern between the future promise of AI and what is truly feasible and effective today.In this white-paper you will learn what AI can really do for your video business TODAY!, not in the future.Download the whitepaper
Netflix Original Stranger Things 3Netflix customers are less likely to complain about dissatisfaction with content and technical problems than users of Amazon Prime Video and Hulu.According to a new report from Strategy Analytics looking into the conversations being had by SVOD subscribers, Netflix users are much more likely to spend time discussing characters and storylines in great detail, suggesting high levels of engagement with the shows on the platform.However, discussions involving Amazon focus on pricing and a lack of content choice, while Hulu users focus on technical issues.The report concludes that Hulu and Amazon must address these deficiencies in order to pose a serious challenge to Netflix, and provides lessons to Disney and WarnerMedia ahead of the launch of Disney+ and HBO Max respectively. Using language analytics techniques, the study found that Netflix users are much more likely to discuss binge-viewing; characters, scenes and storylines; evaluating shows; what people in general think of shows; and worrying about spoilers.The research, which is based on advanced language analytics techniques, shows that, compared to Hulu and Amazon, Netflix users are much more likely to discuss: “Netflix’s advantages are numerous, but lie primarily in the fact that its users are much more engaged with the content than those using Amazon Prime Video or Hulu,” said Michael Goodman, director, TV & Media Strategies. “Neither Amazon nor Hulu have managed to get much beyond technical or pricing issues in order to build that all-important content-viewer relationship which ensures higher retention levels and sustained subscription revenues.” read more
ShareTweet The episode saw the gang go on a ‘Friends Across the Barricade’ cross-community weekend and meet ‘the other side’ for the first time.A discussion chaired by fine haired super priest Father Peter on what Catholics and Protestants have in common descended into hilarious farce.And fans have been raving about the ‘blackboard’ which showed up the differences between Catholics and Protestants.The Protestant lads and the Catholic girls can’t for the life of them think of anything that they have in common, resulting in a blank list of similarities, and a ‘differences’ blackboard scrawled with hilarious stereotypes. #DerrygirlsblackboardLISA MCGEESr MichaelStall the ball! Derry Girls hits 1.8 million viewing figures for first night of series two ‘Catholics Keep Coal in the Bath’‘Protesants keep toasters in the cupboard’Catholic’s like bingo’“Protestants have extra bit in the our father’‘Protestants have horses’‘Catholics love Mary’‘Protestants are Richer’‘Catholics go to Bundoran and Protestants go to Newcastle’‘Protestants love soup’‘Catholics like bingo’‘Protestants thinks Catholic’s are all alcos’‘Catholics have more freckles’‘Protestants hate Abba’‘Catholic gravy is all Bisto’.The pure comedy gold script by Derry born creator and write Lisa McGee set twitter on fire last night and today as fans reflected on the first episode of series two.One fan tweeted: “I was laughing so hard at the already famous Derry Girls blackboard I genuinely spat whiskey on the cat. ‘Protestants keep toasters in cupboards’.”Another tweeteed: “The blackboard of differences between Protestants and Catholics in #DerryGirls is amazing – “Catholics love JFK”, “protestants love flutes”, “Catholics watch RTE”, am dyin!”Michelle, Erin, Clare, Orla and the wee English fella awaiting the arrival of the Protestant boysThe blackboard tickled another fan who tweeted: “Reading the blackboard from #DerryGirls do we really add and extra bit on to the Lord’s Prayer?? Also do Catholic’s really keep coal in the bath??”And fans have all their own favourites, although Sister Michael (the small angry penguin woman!) seems to have her own cult following, with her savage looks at Fr Peter and one-liner put downs.“Jenny, you will go far in life but you will not be well liked.”She tweeted a picture of herself in real life as Siobhan McSweeney with friends gathered round her television to watch series two kick off.She tweeted: “Oh my god!! So lucky with my friends. Viewing party at mine. Thanks for watching #DerryGirls.”Episode two is on next Tuesday, March 12 at 9.15 pm.Stall the ball! Derry Girls hits 1.8 million viewing figures for first night of series two was last modified: March 7th, 2019 by John2John2 Tags: DERRY Girls was back on TV last night and it went down a bomb with viewers.Figures just released show that 1.8 million people across the North and UK tuned in for the episode one of the second series.And those figures are expected to rise even further when Channel 4 collates all the data from Catch-up and online viewers who missed the live airing at 9.15 pm of the hit comedy which was nominated this week for two gongs at the Royal Television Society Awards. read more
Brian Moore’s Renault SUV car attacked in arson incident at home in DerrySINN Féin has condemned the early morning arson attack on a vehicle belonging to one of their activists in Derry.Brian Moore and his family escaped injury after their family car was set alight in Lislane Drive, Creggan at around 4 am on Saturday. Police are appealing for anyone who witnessed anything suspicious around the time of the fire to contact them.Detective Sergeant Marshall said: “We received a report around 4:10am that a vehicle parked close to a property had been set on fire. “Extensive damage was caused to the vehicle while damage was also caused to guttering and fascia boards of the house. “This was a reckless attack and those responsible for this crime showed complete disregard for the two adult occupants of the house and other residents in the area. “We are fortunate no-one was injured. “This is being treated this as arson with the intent to endanger life, and I would appeal to anyone who was in the area around this time and saw any suspicious activity, or anyone who has information about this crime to contact detectives at Strand Road on 101 quoting the reference number 425 29/06/19.” Alternatively information can be provided to the independent charity Crimestoppers on 0800 555 111, which is 100% anonymous and gives the power to people to speak up and stop crime.Sinn Fein activist Brian Moore target of ‘reckless’ arson attack in Derry was last modified: June 30th, 2019 by John2John2 Tags: ShareTweet CRegganDerryDS MarshallfoyleFOYLE MLAin Lislane DrivePSNIRaymond McCartRaymond McCartneySinn FeinSinn Fein activist Brian Moore target of ‘reckless’ arson attack in Derry Police have described the act as “reckless” and are treating it as arson with intent to endanger life.Sinn Féin Foyle MLA Raymond McCartney condemned the attack on his colleague.“Thankfully no one was hurt, although it could have been much worse as the family were in the house at the time,” he said.“The criminal elements responsible for this attack have nothing to offer but continually bring a bad name to Creggan. They should get off the backs of the community.” read more
This is part of the Operation Dry Water national campaign which helps to reduce the number of boating accidents and fatalities. Pinterest Facebook Tumblr Local NewsNewsWatchState News Increased Law Enforcement On Lakes This Weekend By Daniella HankeyJun 29, 2018, 20:56 pm 330 0 Mail Alcohol on boats is the leading contributor in fatal boating accidents. Being impaired while driving a boat can impair a boaters judgement, balance, vision and even reaction time. Linkedin Home NewsWatch Local News Increased Law Enforcement On Lakes This Weekend WEST VIRGINIA (WOAY)- With the Fourth Of July weekend, West Virginia Natural Resources Police will have enhanced law enforcement on the lakes and rivers. If you chose to boat under the influence, you are endangering your life and the lives of others. Make this Fourth Of July a safe one. Previous PostTaylorMade Tour Truck Is Making A Stop In West Virginia Google+ Twitter Next PostFourth Of July Grilling Can Be Easier With The Push Of A Button Daniella Hankey read more
By Alex Daley, Chief Technology Investment StrategistWe all make stupid investment decisions on occasion. With the impending Facebook IPO looming large over the technology markets right now, the in-vogue meme in popular news media seems to be that a lot of investors will make mistakes hopping into that offering when it debuts. But there’s no real consensus. On the one hand, words like “exuberant” and comparisons to the late 1990s are being tossed around widely; on the other, analysts have been quick to point out that Facebook’s expected valuations are not much different than Google’s were at its debut, with a trailing P/E ratio just over 100. The differing opinions and debate are a pretty good sign that we are not at frothy levels of excitement.The big mistakes in the market are made when media and pundits turn into a collective echo chamber. When all parties agree something is a good idea, chances are it is not any longer. Tech stocks. Condo flipping. Rare earths. When everyone out there believes the same thing, the majority of people will end up finding out the hard way that conventional wisdom tends to be wrong.A cacophony of violent agreement is not just dangerous to the decisions we as individual investors controlling our own money make, it affects the decisions made by professionals as well, including fund managers, brokers, and even the management of the companies we invest in. This is why I want to explore some news that has cost technology investors billions of dollars, and highlight the reminder it gives us to analyze before acting.Should Netflix Have Gone Ahead with Qwikster?In September of last year, Netflix announced that it would be renaming the DVDs-by-mail portion of its business to Qwikster, in what was largely thought to be an attempt to spin out that aspect of the company via a quick sale to a private-equity firm or prior competitor.Almost from the moment it was announced, the decision was pounded by critics. Fresh on the backs of a price hike that was communicated poorly, the company had once again made a PR gaffe and announced a confusing change to its services. Why on earth was Netflix going to such great lengths to divide the businesses?To understand that, we have to look back at the summer price rise first.DVDs were once Netflix’s sole business. Streaming was what marketers refer to as a “premium” – something extra tacked on top that helps close the sale, but which is not the core product – the icing on the cake. But the premium quickly proved to be wildly popular… popular to the point that customers began pressuring Netflix to offer streaming alone, and not force them to get DVD subscriptions along with it. Seeing a clear market opportunity, Netflix jumped on the strategy and hasn’t looked back.Just as the company’s advertisements for its DVD-by-mail service were nearly inescapable, it aggressively pursued making access to its streaming service as easy as possible, offering up help to any device maker who wanted to add the feature to its lineup. When offered the chance to add value to their devices beyond just letting that cable wire plug in, electronics manufacturers jumped at the opportunity. Now you can hardly find a Blu-Ray player, game console, or other device without support built right in.Today, 23 million Netflix customers stream content. Only 10 million receive discs. And just 30% of the latter do that exclusively – the other 7 million also pay separately for using the streaming service.At least they pay separately now. That was not always the case, as many of us remember quite well. It wasn’t until the summer of 2011 that the company made the decision to charge a distinct fee for the streaming service to those customers getting discs in the mail. For those customers, it amounted to a 60% price hike.Why would the company make such a huge price hike in one fell swoop, instead of gradually raising rates over time? The reality is, the company had painted itself into a corner. It wanted nothing more than to rid itself of the DVD-renting business – but it couldn’t do that if streaming was to stay.To Netflix, the Qwikster plan seemed like the perfect solution. Separate the charges. Separate the brands. Then quietly – once the changes had settled in – flip the DVDs to a receptive buyer and use the cash to support growing the streaming business.But why rid itself of the thing that made Netflix to begin with? Is DVD-by-mail really that bad a business? After all, Netflix did enjoy healthy rental profits for many years and still counts itself as the overwhelming market leader.It’s not that DVD-by-mail is bad business – it’s that streaming is simply a better business all around.That difference begins with the nature of content delivery. Netflix’s original model – eschewing itself of the large legacy costs of the retail movie rental agreement, and instead relying on economies of scale at large, central processing facilities – was a brilliant one.When Netflix first started offering its DVD-by-mail services, the biggest game in town was the retail chain of Blockbuster Video stores. Rentals were $4 each at best, and if you forgot to return them you were penalized for considerably more. Watching four movies a month could cost upwards of $20 with taxes and fees. That was a great deal compared to going out to a theater, sure. But Blockbuster’s business model – renting brightly lit storefronts, stocking them wall-to-wall with videos, popcorn, and pimply teenagers to scoff at your selection of American Pie 9, all in order to rent to you a little one-ounce disc of plastic – was its ultimate weakness. As digital technology evolved to shrink the massive cassettes of old, Blockbuster failed to adapt with it.Netflix saw the incredible overhead built into the DVD rental market at the time and hit the competition right where it hurt, undercutting the big guys on price by a large margin – you could easily get those same four movies per month from Netflix for just $8, less than half the cost. On top of that savings, it made late fees a thing of the past by creating predictable, recurring revenues per disc out with a customer. Also, its large, centralized warehouses could hold a much larger selection of movies than any retail store could ever hope to stock.The lack of convenience of not being able to pick up a movie on the way home was Netflix’s only real weakness, but many customers were willing to trade the convenience for lower prices, better selection, and no late fees to worry about. At its inception in 2001, Netflix was able to pick up a few hundred thousand subscribers. Riding its momentum and with cash in hand from a successful 2002 IPO, the company soon grew that number to over five million by its fifth year.The DVD-by-mail business was booming, and Netflix was the market leader by a long shot.It was also an expensive business. Customer-acquisition costs grew steadily over Netflix’s first few years, as competition ran wild trying to catch up. Blockbuster Video jumped into the DVD-by-mail game and tried to play catch-up, using the convenience of being able to return to its stores to target Netflix’s weakest point. Ultimately, Netflix’s aggressive marketing, big selection, and low prices proved too much for a chain that couldn’t sustain itself with ever-mounting customer losses.However, all that competition drew stark attention to Netflix’s biggest flaw, too. Would-be competitors saw that if they could find an equal footing with Netflix on price and beat them on convenience, millions of customers were up for grabs.One of the biggest competitors to come along was vending-machine company Coinstar. Its Redbox brand movie-rental machines are now a regular feature of the American landscape, with over 35,000 machines at more than 30,000 locations from grocery stores to fast-food restaurants all around the US. These machines require no staff – except for restocking and the occasional maintenance tech visit – but offer the convenience of “pick up a movie on the way home” retail locations, like the Blockbuster of old. The machines don’t require any rent – just a small royalty to the shop owner to cover a few feet of space – and a power hookup. Thanks to good technology on the backend – emailed receipts let the company do preference tracking (What kind of movies do you rent? At what location? How often?) – it can market for repeat visitors as effectively as Netflix does. And thanks to low cost of operation, it can compete on price, at about $1 per night per disc.Cable companies were added to the mix, too. As they saw the movie-rental business heat up, they saw a way to increase average revenues per customer by a few dollars a month if they could grab a slice of that pie. So they increasingly invested in the burgeoning field of digital cable, in order to increase the number of “video on demand” (VoD) movies available to customers. Providers like Comcast further eroded the selling points that Netflix relied on: There is no wait for a pay-per-view movie… no disc to return, ever. It’s no wonder that VoD revenue jumped 85% in 2011.Both VoD and vending were starting to eat into Netflix’s disc business in a major way.As pointed out earlier, Netflix recognized its own Achilles heel. It tried to bandage over the area with a focus on strategic locations of its facilities to keep that wait down to just a day when possible, and with excellent software that helped keep customers satisfied by pointing them to movies they were most likely to enjoy based on their individual tastes.Still, Netflix needed some way to compete on convenience. Having subjected Blockbuster to the sharp edge of the “innovator’s dilemma,” the company was not about to let itself fall prey to the advances of technology. It was already stocked with one of the best software-development teams in the country, thanks to founder Reed Hastings’ foresight in plastering over the service’s weak spots with excellent technology facing the customers and back at the warehouse. Next, jumping headlong into the streaming business seemed like the logical choice for the company.With that star development team in house, the company added a steaming feature to its website. At the time, DVD sets of television shows had started to explode in popularity, so Netflix convinced every studio it could find that if it was going to buy thousands of copies of their movies and TV shows, the companies should also license Netflix to let users just click on the “play now” button on its website and watch it instantly. Having seen what digital did to the music business, video companies were a little hesitant to open the floodgates full-bore, but knew they couldn’t ignore it either. So they reluctantly partnered with Netflix, treading carefully so as not to rile their bread and butter – the big cable companies – and soon many of the titles in Netflix’s library were available online as well.And the rest, as they say, is history. The feature proved incredibly popular – so popular that soon nearly every customer Netflix had was using it, and it was the driver for new subscriptions. Customer-acquisition costs started dropping, and fulfillment costs did too, as people took fewer discs by mail. When customers started demanding disc-free subscriptions, the future became obvious.Someone was going to kill the DVD-by-mail business. The weaknesses were just too big. Netflix had known that for some time and tried to bandage it over for as long as it could, but in the process it stumbled on something that was going to be bigger and way better than its old business anyway.That’s because it was a cheaper business. Sending DVDs by mail is expensive… cheaper than storefront video retailing, sure, but it still involves huge warehouses, along with a large unskilled labor force to process all of those physical packages and manage that inventory (and all the potential liabilities that come with that kind of labor force). Not to mention a massive postage bill.Since Netflix was founded, postal rates have risen more than 35%. With the postal service losing billions of dollars per year in the midst of the biggest budget crunch this nation has ever faced, and with gasoline prices holding at all-time highs, those rates are poised to move up even faster in the coming years.On the Internet, however, Netflix commands a very different position. The decentralized, private network had already made great strides in driving down the cost to deliver a few megabytes of content to a customer’s house over its 17-year or so popular history. But Netflix – serving up gigabytes of data to 23 million streaming addicts, each watching potentially hours per week of content – sucks up a lot of bandwidth… approximately one-third of all Internet bandwidth these days, according to measurements by network-tracking firms. That gives the company extreme pricing power with content-delivery networks and network-service providers – power it never could have achieved with the postal service.The bottom line is that it costs Netflix approximately a quarter as much to deliver an hour’s worth of video entertainment to a customer via the Internet than it does via the mail.Not only is it cheaper, the mix of fixed to variable costs is more favorable to the company. With fewer people and more servers, the company’s savings only increase as it scales larger and larger. Gone are the indirect costs of a low-skill labor force – wage and benefit limitations like the ones Amazon.com suffers from when hiring against competitors in Seattle who don’t have to offer their health plans to warehouse workers (who outnumber by 10:1 the highly paid and difficult-to-recruit software engineers on the other side of the company).As a streaming company, Netflix is leaner, meaner, and sports lower margins.The cost of acquiring customers also improved. The company spent a great deal of its gross revenue on advertising in the past. Flyers, inserts, mailers, print ads, digital ads, and more were a big upfront cost for the company as it built its brand. But beyond the benefits of inheriting one of the nation’s most recognized brands, Netflix streaming had another, more direct effect on acquisition costs: it came with partners.Those electronics manufacturers that built Netflix into their devices… each is providing a valuable advertising service for the company, making it a “no-brainer” for users to give Netflix a try. It is already right there in front of you. No trip to Redbox required. Just click a button on the remote and voilà. Whether it’s Xbox, Playstation, Wii, your television, Blu-Ray, or even a DVD player, chances are you have at least one Netflix-ready device in your home. The result has been a dream come true for Netflix: accelerating growth of digital subscribers, coupled with plummeting acquisition costs.Graph by SplatFThe concern with any subscription business, of course, is “churn” – the number of subscribers lost each period. In order to keep revenues steady and predictable and to get the value projected from a customer over time, a company must keep its churn low, so that more money goes to finding new subscribers and less to replacing the ones who left. These net acquisition costs for Netflix, despite dropping rapidly, are not what they could be because of losses in the DVD business.DVD subscribers have fallen from a peak of nearly 15 million to just 10 million today. Better options on the market for getting much of the same content now exist for a large part of Netflix’s market, and thus the number of DVD subscribers the company has is falling quickly. Redbox, Comcast, Verizon, and Netflix’s own streaming service are all grabbing a share of the market. The prognosis is so grim that CEO Reed Hastings put it simply in January’s earnings call when he said, “We expect DVD subscribers to decline steadily for every quarter, forever.”Only those who don’t get what they want from streaming or can’t yet be reached by its services will remain loyal – but costly – customers of the DVD-by-mail service.Obviously, Netflix’s DVD business is holding the company back. The finances of the business are constraining key metrics that drive profitability and cash flows. But why try to spin off the business in its entirety with the Qwikster move? Why not just put it into maintenance mode and milk the cash cow until it’s dry?With streaming subscriber acquisition beginning to flatten in the United States, Netflix faces two very expensive challenges over the coming few years.First, the company has to keep churn low, lest those net acquisition costs start to rise dramatically again. And the only way to do that is by maintaining and expanding its library of videos. The moment you can’t find something you want to watch on Netflix is the moment it loses you as a customer.Second, to keep growth numbers up it has to expand to more markets outside the United States. With streaming, this is much easier than it would have been with DVDs, where the postal services of other countries might not have been as affordable or accommodating – i.e., those countries might not be willing to burn billions of dollars per year losing money to help deliver movies to Netflix’s customers’ doorsteps. But with streaming, the answer is as simple as lining up some content-delivery network partners in the region, and immediately you can reach every home with broadband (the penetration rate of which is higher in most other developed nations than the US, thanks to their smaller sizes and denser populations).In both cases the biggest barrier is access to content.In this area, Netflix has been the architect of its own problems. The company’s runaway success – as by far the leading streaming service with over 23 million paying downloaders – has awakened the sleeping giants of the cable industry. The increasing availability of large libraries of streaming movies and TV shows does not just threaten the pay-per-view revenues of the big cable companies, it also threatens their core business. Cable companies around the country have been shedding subscribers, collectively losing more than four million subscribers to other media over the past two years, including the so-called “cord cutters” who rely solely on Internet streaming content for their video entertainment.At the same time, content providers like Hollywood studios and major television networks find themselves dealing with a much larger and more diverse set of potential licensees: cable companies; expanding satellite providers; new fiber-optic networks like FiOS and Uverse; Internet-based providers from major-studio-owned Hulu to Walmart’s Vudu subsidiary to Amazon.com’s Prime Video to Netflix; and a dozen other well cashed-up suitors to boot. This increased demand has allowed content providers to charge higher rates overall and leverage their highest-demand content to incredible heights, as they negotiate exclusive deals for certain providers – for a few months, weeks, or even just days.Netflix saw these higher prices coming, like a freight train headed its way. You see, Netflix’s largest content deal – a license piggybacking on the Starz channels’ agreements with multiple content providers – was due to expire this past year. The company did not just need to prevent itself from losing a large portion of its content, it also needed to increase the total content available to keep current customers happy with the service – managing the churn level. And it was going to have to start licensing entirely new sets of content for new markets. That train carried a load of new expenses.With those daunting costs looming on the horizon, increasingly bad economics in the core DVD business, and its future so clearly tied to the streaming business as its DVD customer base continued to shrink, the right thing to do must have been obvious: spin off the DVD business and raise some cash.By ridding itself of the DVD business, Netflix would not only have acquired the money it needed to sign long-term licensing deals and get it over the costly content hump ahead, but fundamental business metrics like gross margins would have improved in the process. For a company that had seen its stock sink from a high of $300 down to around $155 just before the Qwikster change was announced, that must have seemed like a win-win. Netflix could avoid dipping into cash flows and reserves to license content and improve the make-up of its business (and the attractiveness of that languishing stock) at the same time.How to do that? Step one: separate the pricing of the two products. Stop using one business to support the other, and make a clean break. But that has to be carefully managed. You can’t discount the value of the DVD subscribers lest you make the business less attractive to a suitor. Plus, a dichotomy of pricing for old and new customers post-split would just anger full-paying customers on both sides of the business… hence last summer’s pricing debacle.Step two? Well, there is really no reason why the company could not have sold off its DVD business right then and there. Why it chose to first rename it I can only guess at. Large companies tend to get very attached to their brands, and the fear of a founder-executive suddenly putting that innovative, well-loved name into the hands of some cost-slashing, private-equity bankers (Netflix was rated as the brand with the highest customer satisfaction) may well have played a role.So, had Netflix been aiming to maximize shareholder value, especially in the short term – i.e., drive up the stock price – the Qwikster spinoff actually might have been the best move. It would have yielded better margins and all the cash they needed to get through Q1’s big licensing push, without dropping out of profitability for the first time in years. Now, the company isn’t projecting to make a profit at all during 2012, as its customer-acquisition costs increase from entering new markets for the first time and as its content-licensing costs rise sharply. Had it successfully finished the Qwikster transition and sold off the DVD business (as many analysts suspected was the eventual plan), Netflix shareholders might have been in a very different spot than they are today.[As chief technology investment strategist for Casey Research, Alex Daley is often sought for media interviews. Here’s one he did on the Financial Sense Newshour, where he discusses robotics, biotechnology, and the effects of disruptive technology.]Bits and Bytes123D Make (Apple)Cool app. 123D Make lets you turn 3D models into real-world creations made out of any flat material that you can cut. Convert any 3D STL or OBJ file into a physical object using automatically generated 2D build plans and animated assembly instructions.Computer Gets a Driver’s License (eWEEK)You’ve probably seen footage of Google’s driverless car. Well, in a huge step for the program and enthusiasts of autonomous vehicles everywhere, Nevada has just become the first state to approve a license for a driverless vehicle. Skynet: winning.Zuckerberg Hoodie: Mark of Immaturity? (Bloomberg)According to Michael Pachter of the financial services and investment firm Wedbush Security, “Mark and his signature hoodie: He’s actually showing investors he doesn’t care that much. He’s going to be him. And he’s going to do what he’s always done. And I think that’s a mark of immaturity.” To which we would reply, “No kidding, buddy; the guy is in his 20s.” We’re not bullish on Facebook’s stock prospects at IPO based on the current lofty valuations, but we’re willing to admit that Zuckerberg is a genius. And analysts shouldn’t let his wardrobe get in the way of their opinions of the company. Steve Jobs wore the same terrible outfit for years and built a $500-billion company.Will Google and Facebook Disappear Soon? (Forbes)Can you imagine a world without Google and Facebook? We tend to think that the school of thought known as “organizational ecology” is pretty much crap. Our take is that the evidence overwhelmingly shows the power of the individuals in an organization to succeed regardless of the circumstances. But we’re not too closed-minded to think that a different point of view isn’t worth consideration. This is a pretty interesting article that suggests companies like Google are becoming obsolete.Amazon’s Cloud Carries 1% of the Internet (Wired)Most people still consider Amazon just an online shopping mall of sorts. But the Amazon of today is much more than a low-cost, online retailer. It’s now part Walmart, part Apple, part Netflix, and part Rackspace. In fact, since the introduction in 2006, the company’s cloud-computing infrastructure has grown to the point where it is now on the sending or receiving end of 1% of all the Internet traffic in North America, according to Craig Labovitz, cofounder of DeepField Networks. read more
In this excerpt from a talk at the Casey Research Recovery Reality Check Summit, legendary resource speculator Rick Rule makes a strong case for careful, disciplined investing in the junior resource sector, despite the market turning truly ugly.You can hear Rick’s entire entire presentation, along with those by the 30 other experts at the Summit – including their stock tips and other recommendations. The full audio collection is available in CD or MP3 format. Get full details here.
Dear Reader, Jeff Clark has a sharp look ahead on what’s likely in store for our favorite metal this year, but I have a couple of other matters to bring to your attention as well. First, I want to encourage those with the time available to come to the upcoming Vancouver Resource Investment Conference, January 20 and 21. Doug Casey will be appearing, along with Marin Katusa, Jeff Clark, and me. Doug will be signing copies of his new book, Totally Incorrect, at the Casey Research Booth at various times during the show. We will also be holding a Casey’s Club event at the show; details will follow in a formal invitation to Club members. Speaking of Casey’s Club, if you’re a serious investor looking to make serious money and have not already joined the Club, you need to give it some careful thought. The Club is closed to new memberships most of the year, and now is your chance to get in. What you get is basically a lifetime subscription to all of our products, plus special VIP benefits, including Club-only events, at a deeply discounted rate. Actually, given the yearly fees for our premium Alert services, which are included in membership, Club membership pays for itself in just a few years. I regard this as a no-brainer. You can see a fuller description of the deal in CEO Olivier Garret’s invitation letter. Sincerely, Dear 2013, What Will Gold Do This Year? By Jeff Clark, Senior Precious Metals Analyst As we turn the calendar over, there are probably two dominant questions on the minds of most precious-metals investors: Will gold and silver have a better year than the last two? And will gold stocks finally break out of their funk? 2012 was an interesting year for our favorite metal. On one hand, gold was up only single-digit percentages for the second consecutive year: 8.3%, after rising just 9.1% in 2011. It was also outperformed by the S&P 500 Index, though this was the first time since 2004 and only the third since 1999. On the other hand, the price has now risen 12 consecutive years, overshadowing most other bull markets in modern history. Gold stocks as a group were down for the second consecutive year. GDX (Gold Miners ETF) fell 9.8%, after dropping 16.3% in 2011. GDXJ (Junior Gold Miners ETF) lost 19.9% last year, after sinking 38% in 2011. Here’s a snapshot of our industry for 2012, along with how it compares to other asset classes. Gold Junior Stocks (GDXJ) 20.11 21.22 26.08 (Click on image to enlarge) Perhaps a more constructive way to view things is from a longer-term perspective. How have these same sectors performed since the 2008 financial crisis? Oil 92.92 88.50 103.22 One Month Ago TSX (Toronto Stock Exchange) 12,540.81 12,137.18 12,226.47 One Year Ago Rock & Stock Stats Last Louis James Senior Metals Investment Strategist Casey Research (Click on image to enlarge) Over the past four years, gold and silver have provided the best returns among major asset classes. Gold producers, meanwhile, have collectively underperformed the metal, while the juniors as a whole have lost money. Some claim that gold is in a bubble, because it has advanced so much. “It’s already gone up a lot,” they say. The reality is, however, that this bull market is small compared to most others in modern history. (Click on image to enlarge) Over the past 40+ years, our bull market would be among the smallest of the major bull markets listed, in terms of percent gains. It’s about a quarter of what the 1970s bull market returned. A good number of them also lasted longer than ours. Based strictly on percentages, I’d bet that ours isn’t over. Further, history shows that bull markets tend to end in a climactic blow-off top. For example, gold rose 120% in 1979. Our best year was 32% in 2007. Hardly meteoric, and contrary to how the typical bull market culminates. And this is all without getting into all the fundamental reasons to continue buying gold, which we’ve gone into frequently in these Dispatches. So what does the gold price do in 2013? I think that’s the wrong question. Since gold is the best and longest-lasting way to store wealth ever adopted in history, and not technically an investment, the more accurate query is: will gold continue to protect my purchasing power? Worded that way, we begin to see gold in its proper light: real money. If we’re holding gold as money, the question then becomes: how much is our purchasing power in dollars or other alternatives to gold likely to decrease this year? And in future years? If there’s one thing we’re certain of, it’s that the current path of debt accumulation, deficit spending, and money printing will continue to devalue dollars and other unbacked currencies – and probably at an accelerating speed in the not-too-distant future. That makes gold a must-own asset despite its 500+% advance since 2001. I’ve read some analysts claim that these things are already factored into the gold price. That’s debatable, but even if they’re right, what’s not priced in are the delayed and indirect consequences from all those actions… What fallout have we experienced from our growing pile of national debt? The world economy is still functioning and some say improving. Silver 30.72 32.73 29.10 TSX Venture 1,228.22 1,192.86 1,515.89 Silver Stocks (SIL) 22.51 22.64 21.99 Copper 3.72 3.63 3.43 Gold 1,674.60 1,695.80 1,612.70 Gold Producers (GDX) 45.33 46.64 53.74 Is there any negative backlash from printing all this money? Most would point to rising stock-market and real-estate prices, both positive things. The problem is that overindebtedness, overspending, and printing currency is not all candy, lollipops, and romantic horseback rides on the beach. It’s not free of consequences. We have yet to experience the full ramifications of how these actions are undermining our currency. And that won’t be a fun or pain-free process. In this month’s issue of BIG GOLD, due out tomorrow, we interview 19 noted economists, gold analysts, best-selling authors, fund managers, and senior Casey Research staff – and not one of them believes the fallout from the reckless monetary policies of governments around the world has peaked. Most believe the worst is yet to come, with varying degrees of aftereffects. And they all recommend continuing to buy gold. If you’re not reading BIG GOLD, this is the perfect issue to start with… following the investment recommendations from this highly successful group, your portfolio will be positioned for maximum effect for 2013 and beyond. As a free preview, I’ll mention that most of the experts I surveyed believe that the coming fallout will take an inflationary form. All are concerned. Even those who think deflation is more likely urge investors to hold gold as one of the best ways to protect themselves for what lies ahead. They also point out that while gold stocks have been disappointing, they represent an incredible bargain at present, and that while they could get cheaper, the potential upside far outweighs the downside at this point. I’m also happy to point out that while GDX dropped 9.8% last year, the BIG GOLD portfolio was up 7.8% – and that’s without averaging down, which many subscribers took advantage of. I’m convinced that our portfolio holds the best gold producers, and most of our experts name their BIG GOLD favorites. In the hot-off-the-presses International Speculator, Casey Research Senior Metals Investment Strategist Louis James names a stock currently on the deep-discount rack that he’s convinced won’t stay there for long. The first two sentences from his introduction were very clear and direct, and spurred me to log on to my brokerage account and take action. So, what will gold do this year and beyond? Whatever crazy and unpredictable twists and turns history takes in the future, gold will still be gold, and the best way yet devised to safeguard wealth. The ultimate question then is: what standard of living would you like to maintain? Most people would say: “As high as I can!” That’s why we continue to buy gold. And based on our research, lessons from history, and some of the most successful investors in the sector, we have a long way to go in this gold bull market. Gold and Silver HEADLINES RBI to Promote New Gold Schemes to Deter Physical Demand (BullionStreet) Worried about the country’s surging fiscal deficit, the Indian government is considering hiking the import duty on gold again, from the current 4% to 6%. Following these measures to curb rising gold demand, India’s central bank warned that growing duties may lead to gold smuggling and suggested different ways to moderate the demand for gold imports. The Reserve Bank of India proposed new gold-backed financial saving products to draw demand away from physical gold. “These products will, if designed properly, help to monetize a portion of the privately held stock of gold as well as financialize the incremental demand for gold,” said the bank’s report. Gold contributes to nearly 30% of India’s trade deficit, and policymakers are concerned that further growth in gold demand may jeopardize the Indian economy. Last year the government increased import duties on gold and took other measures to tame demand. Indeed, its harsh steps led to softer demand in the country during 2012, but apparently the government believes that wasn’t effective enough and is preparing another attack on the yellow metal’s popularity. December 2012 American Eagle Silver Coin Sales Are Third Highest in History (Mineweb) The US Mint reported its annual sales of gold and silver coins. According to the data, American Eagle gold bullion sales dropped from 1 million ounces in 2011 to 753,000 ounces last year. Interestingly, December sales increased to 76,000, up from 65,500 ounces in December 2011. Sales of American Eagle silver bullion coins were down too, at 33.7 million ounces in 2012 vs. 39.8 million ounces in 2011. December 2012 sales were 18.6% lower than a year ago. Nevertheless, it was still a very good month for coin dealers, as 1.6 million ounces of silver bullion was the third highest in the Silver Eagle’s history. These dynamics reflect precious metals’ price behavior during the year. The metals were weak much of the time, which is treated by some investors with caution and by others as an opportunity. We fall in the latter camp. Chile Delays Copper and Gold Projects Worth $38.9 Billion (Mining.com) Chile’s Copper Commission (COCHILCO) has said that 11 of the 45 copper and gold projects considered in the total 2012 portfolio for the country are delayed. There are four gold projects among the postponed deals. There are internal and external factors, including power-supply difficulties, improving environmental impact assessments, and obtaining permits to build infrastructure required for the projects. Further, the high costs of some of the projects need to be reevaluated. This measure means a deferred investment of US$38.9 billion, 37.3% of the original total value, which was US$104.3 billion in June 2012. The vast new supply of metal that was expected to come on stream in 2013 and beyond is now questionable. This just goes to underscore the need to be choosy in picking mining projects, even in a historically pro-mining jurisdiction like Chile. This Week in International Speculator and BIG GOLD – Key Updates for Subscribers International Speculator This top exploration team delivered a new resource estimate on one of its key projects. The company is a Best Buy in our book. This explorer is so well-funded, it’s trading for less than cash, and it has a lot of exploration upside. We maintain a Best Buy on this one; read our analysis. BIG GOLD We made a change in recommendation to a popular silver producer, which you can read on its portfolio page. What spillover has occurred from our government spending more than it takes in? My retired parents still get their Social Security checks every month. read more
In This Issue. * Central Banks line up to meet this week. * Is most of the bad stuff priced into the euro? * Aussie and kiwi rally VS USD. * Is Canada’s Poloz losing credibility? And Now. Today’s A Pfennig For Your Thoughts. RBA Leaves Rates Unchanged. Good day.. And a Tom Terrific Tuesday for you! Whew! I didn’t want to answer the bell this morning. It took a lot of motivational speaking on my part to get me to wake up and get out of bed! Good thing I’m not a bad motivational speaker, like Pinocchio! I look around this room and see nothing but untapped potential. You have potential. That commercial cracks me up! And the new camel commercial where the people at the zoo start yelling out to the camels, Hey camel, what day is it? And the one camel says to the other, It’s not even Wednesday. Funny stuff! The beautiful Linda Ronstadt is singing: Long, Long Time to greet me this morning, what a very sad song, and not the one I needed to kick start me this morning! Well, Front and Center this morning, the Reserve Bank of Australia (RBA) left rates unchanged last night. Neener, neener, neener, I told you so, I told you so! HA! That came as no surprise to me, and all you have to do is go to www.dailypfennig.com and reread yesterday’s Pfennig, to see where I said I didn’t believe the RBA would cut rates at to consecutive meetings, and I appeared to be in the minority (As If that’s something new for me. NOT!) , and said the risk would be to those shorting the Aussie dollar (A$) if the RBA didn’t cut rates.. The RBA didn’t cut rates, and those that had shorted the A$ the night before got their rear ends handed to them. Serves them right, eh? So, the opposite took place last night and this morning. Yesterday it was the A$ getting whacked and the N.Z. dollar / kiwi trading in sympathy with its kissin cousin across the Tasman, but this morning we have the A$ rallying, and the kiwi following it upward. So, what a difference a day makes, only 24 hours! And yesterday, the euro was carving out a small gain VS the dollar, but today, the euro is getting sold. So, just turn the table today, Just when it appeared that the euro was about to exit its downward trend when it held 1.12 for a couple of weeks, the euro has now surrendered 1.12 and this is the second time in the last week that it has done that, so the euro is a not ready for prime time player right now. But, Greece aside, the Manufacturing indexes of the Eurozone are inching higher, Inflation just printed a tick higher, and growth is stronger. I just wish European Central Bank (ECB) President, Draghi, would see this the way I see it. There’s no need to get your hands in there and act like you know what you’re doing. Let the economy work out its problems on its own, the way economies always did before Central Banks thought they knew better! But that’s not going to happen. Draghi is hell bent and whiskey bound to implement all-out Quantitative Easing / QE. And we’ll hear all about his plans this Tub Thumpin’ Thursday! I would like to think that a lot of the bad stuff that is laid at a country’s currency when the Central Bank begins to print money and buy bad debt, would be priced in to the euro by now. But my spider sense is tingling and telling me that’s not the case, so the euro is bound to see more selling coming up. Before we get to the ECB meeting on Thursday, we’ll have the Bank of Canada (BOC) check in with their latest decision on rates. Now, the BOC has an advantage because they will get to see the color of their 4th QTR GDP today before they meet tomorrow. The Consensus for the Canadian 4th QTR GDP is for annual growth to be 2.5%.. I would have to think that 2.5% is a little overly optimistic. But we’ll have to see later this morning, eh? But if Canadian GDP does hit 2.5% annualized, then that would be good for the Canadian dollar / loonie. For that would make the BOC’s decision in January to cut rates, look silly.. And I love it whenever a Central Bank, anywhere, is made to look silly! And longtime Pfennig readers will recall me making a big stink about the appointment of Poloz as the BCB Gov. after Mark Carney left for the Bank of England (BOE).. I told you then that we needed to be wary of Poloz, because he came from the “trade side” of Gov’t, and those guys are always whining about a currency’s strength limiting their “trade” with other countries. Well, those fears became reality, when Poloz began talking about the currency being a problem for “trade”. I think Poloz needs to tread carefully here now, for if he would lose credibility with the markets, that would be a very bad thing, and I do believe he’s dangerously close to doing that. One Central Bank meeting that I missed listing that will take place this week, when I listed them yesterday, is the Brazilian Central Bank (BCB) and here, I do think we’ll see some fireworks in the form of a rate hike, which would be the third consecutive BCB meeting that announced a rate hike. This time the rate hike shouldn’t be so aggressive as previous ones were, but still I would look for 50 Basis Points (1/2%) to be added to their internal rate, which they call the Selic Rate, and it would bring the Selic rate to the highest level since Feb 2009.. At some point, just like I was saying the other day regarding the Russian ruble, at some point, you would have to think there’s value here. In addition, Brazil’s latest Budget has quite a few people smiling these days due to the improved fiscal outlook in the Budget. But those are all just numbers folks. I could do a house budget that called for net revenues to increase 50%, but just because I put that down doesn’t mean 1. I know how to achieve that, 2. There’s no way in hell I would achieve that! So, Budgets for countries are about the same. They can say this and that, but achieving this and that is another thing. But with inflation in Brazil already running at a greater than 7% clip, something has to be done, and raising rates seems to be the logical thing to do. In Japan, Prime Minister, Abe’s economic advisor, Honda, who before now was a HUGE proponent of a weak yen, was out on the town last night, and decided to come clean on a couple of things. Honda said that “further U.S. dollar ($) gains VS yen would not be sustainable from a PPP (Purchasing Power Parity) perspective, and then warned that the Bank of Japan (BOJ) should not overheat the economy.” Doesn’t this all sound strange? Memo to Mr. Honda.. Hey dude! The cat is out of the bag here, the cow is out of the barn, and so on. The $ is going to be strong VS yen, because you and your PM told everyone that the way to a Japanese revival was through a very weak yen. You can’t go changing your mind now, dude! So, we have the BCB, and BOC tomorrow. The ECB and BOE on Thursday, and the Jobs Jamboree on Friday. The rest of the week should be chock-full-o-items from which the markets can gain direction from. And just as a reminder.. Chuck no longer cares about the Jobs Jamboree’s results.. It’s all mumbo-jumbo, smoke and mirrors, and cooked books to me, and I don’t see why anyone would put stock into the creation of these jobs numbers. Well, I was bang on with my thought on Personal Spending yesterday morning. later in the morning, Personal Income and Spending printed and while Income had a nice gain of .3% it was below the expectations of .4%, and Personal Spending fell more than expected, falling -.2%, while the expectations were for a fall of -.1%.. So, as you can see, these two items are going in the wrong direction.Both reports were for January, and as I told you yesterday, the poor spending made sense given the negative print of Retail Sales in January that previously printed. In addition to the Personal Income & Spending data yesterday, the U.S. Data Cupboard had the latest ISM Manufacturing Index for Feb. And the index nudged downward to 52.9, from the previous month’s 53.5 index number. Still above 50, which is a good thing, I won’t argue that, but I will point out that in October 2014, just 4 prints ago, the index was at 57.9. Losing steam? I would think that to be the appropriate way to describe this data.. So much of manufacturing is tied to exports. And with the dollar relatively stronger these days, exports have to suffer, thus visa-vi Manufacturing suffers.. It’s not all the dollar’s fault, folks. But you can trace back to the dollar on most of this loss in Manufacturing. Especially when you have the currencies of the world, debasing their currencies left and right, it just magnifies the problem. The Chinese renminbi / yuan was pushed downward in value / weakened, overnight again. I see where Peoples Bank of China (PBOC) Deputy Gov. Yi, said overnight that the Chinese renminbi / yuan was second only to the U.S. in strength, and that the currency has remained quite stable.. Hmmm.. Interesting thoughts, eh? In a relatively short period of time since the renminbi was made available to trade through non-deliverable forwards with liquidity, the renminbi has moved ahead of the euro. and has left the British pound sterling, and Japanese yen in its dust. I find that to be quite amazing. Gold is up a couple of bucks today, after being up a couple of bucks yesterday morning, only to give them back and basically trade flat on the day.. India continues to increase their Gold imports folks.. Seems that importers, jewelers, and traders were all waiting for the new budget to have some tax implications in it.. But when the budget was released the other day, there were no new tax implications, and now it is thought that India’s Gold imports will surge to 100 metric tonnes this month, after a so-so month of 25 metric tons in February. Physical Gold continues to have plenty of buyers, if only we could get rid of those short paper trades! Before I head to the Big Finish today, I want to make mention of a pretty impressive event. A good friend, during High School, and the older brother of my friend from kindergarten, Scott Sullivan, has been notified that he will enter the St. Louis Amateur Baseball Hall of Fame. WOW! Congrats! Scott was a heck of a ballplayer as a young man. He was a catcher, and was scouted by several Major League teams. He went on to play in college, but as an adult he has been instrumental in running the St. Louis Baseball & Fastpitch Academy. Where many of the boys and girls in the St. Louis area go to learn the right way to play ball! For What It’s Worth. The Big Boss, Frank Trotter sent me this and I though it played well with the stuff we talk about every day. It’s Bill Gross, the former head of PIMCO, who left last year and went to Janus Bond Funds. I used to grab quite a few quotes from Bill Gross, who’s known as the “bond king”, so it’s nice to have him included here once again. You can find the whole article here: http://www.bloomberg.com/news/articles/2015-03-02/bill-gross-says-currency-war-risks-slowing-global-growth “Central bank policies have pushed interest rates below zero in Europe, and countries including China and Japan appear to be devaluing their currencies. While such moves make debt burdens more tolerable and exports cheaper, they are bound to hurt the global economy as a whole. Common sense would argue the global economy cannot devalue against itself. Either the strong dollar weakens the world’s current growth locomotive (the U.S.) or else their near in unison devaluation effort fails to lead to the desired results. More importantly, low to negative interest rates hamper the functioning of capital markets and prompt investors to take on higher risk to boost returns, making the financial system more vulnerable.” Chuck again.. yes, nothing really new there but it’s always nice to hear from someone else other than just me all the time, eh? To recap. The RBA left rates unchanged last night as Chuck thought they would, as opposed to the markets who thought another rate cut was coming, and shorted the A$ ahead of the meeting only to get their rear ends handed to them later! Serves them right! The Central Banks are all lining up to meet this week.. I expect the BCB (Brazil) to hike rates 50 Basis Points and the rest to be chock-full-o-B.S., of course we’re expecting the ECB to give us the details of their implementation of all-out QE. Currencies today 3/3/15. American Style: A$ .7815, kiwi .7540, C$ .7995, euro 1.1160, sterling 1.5355, Swiss $1.0405, . European Style: rand 11.8000, krone 7.7155, SEK 8.3175, forint 273.40, zloty 3.7260, koruna 24.5845, RUB 62.20, yen 119.85, sing 1.3640, HKD 7.7550, INR 61.91, China 6.1543, pesos 15.02, BRL 2.9050, Dollar Index 95.52, Oil $50.41, 10-year 2.09%, Silver $16.55, Platinum $1,186.25, Palladium $826.00, and Gold. $1,210.20That’s it for today. Well Happy Anniversary to the Star Spangled Banner.. On this day in 1931, president Herbert Hoover signed a congressional act that made the Star Spangled Banner, which was written by Francis Scott key in 1814, the official national anthem of the U.S. The countdown to the first Spring Training Game for Chuck in attendance is now 3.. On Friday, I’ll go to my seat, and get ready for a good spring of baseball. Great stuff for my friend, Scott Sullivan, eh? The sun is up and bright as can be right now. I gotta love that! Billy Squier is playing his song: Lonely Is The Night on the iPod. Billy Squier has been one of the faves for the boys and girls on the desk over the years, and we’re still hoping that he would make a stop in St. Louis, so we could all go see and meet him! A few years ago now, Jeff Opdyke wrote a piece for the Wall Street Journal about me, and in it he mentioned Billy Squier. Craig Karmin of the WSJ wrote the first piece about me in the WSJ also a few years prior to Jeff’s article.. Those were days, folks, I was always being asked to do an interview, be questioned for an article, and so on. and then one day, it happened the mighty Puff came no more.. Oh well, more time to myself I guess! Time to get this out the door. I hope you have a Tom Terrific Tuesday!Chuck Butler Managing Director EverBank Global Markets read more
TUSCALOOSA – The Tuscaloosa County Sheriff’s Department needs your help locating some of Tuscaloosa’s Most Wanted.Melissa Cassandra Johnson, 42, is last known to be living in the area of Simmons Drive in Coker. Johnson is wanted on possession of a controlled substance charges.Aaron Deon Howard, 24, is last known to be living in the area of 44th Court Northeast in Tuscaloosa. Howard is wanted on charges of assault and possession of a controlled substance.Wright Dewayne Hassell, 47, is last known to be living in the area of Poplar Drive in Tuscaloosa. Hassell is wanted on charges of first-degree property theft.If you have any information on these or any others wanted by the Tuscaloosa County Sheriff’s Office, please call 205-464-8672 or visit tcsoal.org. You can also visit TCSO on Facebook here, or on Twitter here. read more
Reporting by WVUA 23 Reporter Chelsea BartonWritten by WVUA 23 Digital Reporter Savannah BullardThe new Brookwood High School has been open for a mere four years. Each day, hundreds of bright students fill the hallways, but there is one student who brings a smile to everyone’s face when you hear her name.Josie Hogeland is 18 years old, and she has had a great senior year at Brookwood.“It makes me so happy seeing her happy because she loves to make everyone else happy,” Linley Campbell, a friend of Josie’s, said.During the fall, Josie was elected homecoming queen by over 900 students who attend her school.“Since she’s so friendly and she knows everybody, everyone just wants to be her friend,” Campbell said.And her reign did not end there; Josie was also chosen out of all the homecoming queens in Alabama to represent the state at the Liberty Bowl in Memphis, Tennessee.She also competed in her first pageant this year, stealing the show with her personality and, to no one’s surprise, was voted Miss Congeniality by all of the contestants.“She thinks she is just like everybody else and she is to us,” Campbell said. “She sees everyone as her friend. She does everything that any of us other seniors do, so I don’t see her different at all and I don’t think anyone else here does.”To top off her senior year, Josie also made the cheerleading squad at Brookwood. She even received a special prom-posal as she was cheering on the Panthers earlier this year.Senior homecoming king Rayquan Swisher sees Josie as one of his best friends. That is why he had to find a special way to ask her to prom. And although she is excited about prom with Swisher, Josie said her heart belongs to her friend Jaylan Wade.“It really means a lot to me, it really does,” Wade said. “Some people don’t know but it’s like she’s like everybody else. She is always going to be here for us. She is always going to be here. We are all doing the same thing. We are all in school together and we are making it the best for her too.”Josie’s mother, Kristy Hogeland, said it’s been the most heartwarming part of her daughter’s senior year. Seeing so many students like senior Maryah Mott love on her girl and make sure Josie feels as special as she truly is.“We and Josie got really close really fast,” Mott said. “I wouldn’t trade her for anything, really. I’d do absolutely anything for Josie if she asked.”Brookwood students say Josie is the one who has blessed them and when they look back a decade from now on their high school memories, she will be there.“Josie really teaches you to take each day as it comes,” Mott said. “She doesn’t stress about anything. As soon as something comes up, she knows how to handle it. She knows how to take it and that’s something we could all pick up from her. Josie is the highlight of the school. Everyone knows that.”If you have a story you would like to see featured in our Spirit of Alabama report, email us at firstname.lastname@example.org. read more
07 August 2019
07 August 2019
07 August 2019
07 August 2019
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