Category Archives: Economics

The Problem with 401k Plans

There is no rationale that justifies the kinds of rates we’re seeing on the asset management side.  Fees should be for specific advise to workers and their families.  This is why I was happy to work with a fee-only wealth advisor in years past.  It’s just a more defensible and ethical way to do business.

The Problem with 401k Plans | The Baseline Scenario.

Take ‘Em to Church?

★ The Church of Market Share:

The truth is, the average Android user is not the same as an average iPhone user. iPhone users surf the web more, they’re more willing to buy software, they’re more willing to install and use apps

You can say that it’s elitist or arrogant to argue that iOS users are better customers than Android users. But you can also say that it’s the truth.

(Via Daring Fireball)

Apple has 2/3rds the share of industry profits while it has garnered only 5% in market share.  Why would I want to go after market share in this scenario?

 

More on the Louis C.K. Experiment

Just how successful is Louis C.K.’s indie video experiment?:

Still, a very cool experiment. And now one I’d love to see applied to some really, really popular celebrities, and some not-quite-yet celebrities. Then we’ll have a better idea of how much indie distribution will actually shift the balance of power in the media industry. It could be a little, it could be a lot, but it’s too early to tell.

(Via SplatF)

Louis CK: Live at the Beacon Theater…Cheap!

Louis CK: Live at the Beacon Theater:

The show went on sale at noon on Saturday, December 10th. 12 hours later, we had over 50,000 purchases and had earned $250,000, breaking even on the cost of production and website. As of Today, we’ve sold over 110,000 copies for a total of over $500,000. Minus some money for PayPal charges etc, I have a profit around $200,000 (after taxes $75.58). This is less than I would have been paid by a large company to simply perform the show and let them sell it to you, but they would have charged you about $20 for the video. [emphasis mine] They would have given you an encrypted and regionally restricted video of limited value, and they would have owned your private information for their own use. They would have withheld international availability indefinitely. This way, you only paid $5, you can use the video any way you want, and you can watch it in Dublin, whatever the city is in Belgium, or Dubai. I got paid nice, and I still own the video (as do you). You never have to join anything, and you never have to hear from us again.

(Via The Loop.)

Information on the internet is costly to produce, near costless to distribute, but marketing can be an issue, a costly one at that.  Louis CK has an established brand so he can take the risks in production and let the viral nature of the Internet do its thing.

The experiment was successful but it’s not a game changer for Louis CK per se.  (If you doubt that, you put out $250,000 for production and see how viral your show goes.)  He just cut out a middle man, made more money and we saved some.  That’s the game changer for the big distribution, really marketing, companies.  Social networking is not good for their business model.  Not at all.

Read his whole post.  A lot to learn there.

The Fed’s $7 Trillion Secret Loan Program

The Fed’s $7 Trillion Secret Loan Program:

 

Eliot Spitzer on the aforelinked scandal revealed by Bloomberg:

Imagine you walked into a bank, applied for a personal line of credit, and filled out all the paperwork claiming to have no debts and an income of $200,000 per year. The bank, based on these representations, extended you the line of credit. Then, three years later, after fighting disclosure all the way, you were forced by a court to tell the truth: At the time you made the statements to the bank, you actually were unemployed, you had a $1 million mortgage on your house on which you had failed to make payments for six months, and you hadn’t paid even the minimum on your credit-card bills for three months. Do you think the bank would just say: Never mind, don’t worry about it? Of course not. Whether or not you had paid back the personal line of credit, three FBI agents would be at your door within hours.

Yet this is exactly what the major American banks have done to the public.

Or, as Jon Stewart asked, “How the f*** is it that Martha Stewart went to jail?

 

(Via Daring Fireball)

Gruber finds the perfect quote.