The Miracle of Birth

Just brilliant. Ah irony, my old friend.

Ambrosian Economics

Perhaps my favorite columnist these days is Ambrose Evans-Pritchard. He writes about global finance and related events for the U.K.'s Daily Telegraph, steeped in pragmatic economics and historical observations. While not a fear monger his commentary is bold and unflinching.

The latest column is a good example. Evans-Pritchard sees a migration away from the US Dollar; an end to its dominance in global finance & trade. As an American, I find this a deeply troubling development, though unsurprising for anyone paying attention. However, the Dollar's fall is equally troubling the rest of the world as well.

In the US, a declining currency -- fueled by zero interest rates, severe trade imbalances, and sky-rocketing public debt -- foreshadows inflation, lower living standards, and general malaise. Yet, worldwide decoupling from the US Dollar translates to vanishing treasury holdings (heavily dollar-denominated), fiscal instability, and negative export growth.

That last point is extra salient in my view today. If Americans are unable to afford the world's goods -- til now, the USA has been the market of first, middle & last resort for many countries -- where are they to sell their goods? US Dollar dominance has provided ballast in global markets these last 20 years. But it has also fostered a mercantilist philosophy particularly in Asian economies, most notably China. Very relevant update.

For its part, China has pegged the value of its Yuan (aka Renminbi or RMB) to the Dollar. Only recently has China begun slowly -- and incompletely -- adjusting the Yuan's exchange rate to meet its true strength. Without relief, dams burst when overloaded. And despite its bluster to undermine confidence in the dollar, China's economy would suffer more than the US if exchange rates suddenly snap.

Think about it, China would have no US market to sell its goods, a huge & affluent population (notorious savers with a now over-valued currency), and a devastated domestic industrial base made completely uncompetitive with the Yuan's new strength. Reconsider that notoriously frugal population. Will this society, groomed by years of famine & subsistence, be transformed overnight by its new-found wealth into big spenders? The declining competitiveness of its production base and associated job losses will certainly act as a drag on spending. And what about the increasing opposition to the Communist Party, its clamp on liberty and corrupt governance?

Demographically, two lost generations loom in China:

a) the 65+ crowd who are too old to work, too set in their ways, unable to understand technology and without any social safety net to help them live and

b) 15 to 25 year-olds, majority male, coming into adulthood without job prospects and likely to remain that way since another cohort will come along behind and be hired instead.

Morality aside (a statement that always makes me feel like pond scum), the system of casting aside millions of your own people is doomed to fall. The implosion will be epic. Be careful what you wish for though. Implosions cause earthquakes. Earthquakes breed tsunamis. And tsunamis can devastate 1000's of miles away.

So when you think the US has major problems, pause and consider the alternatives. It'll all work out. For us.

Never you let life problems get you down. There is always a solution to be found.

Right, Mr. MacIntosh?

Ask Philbony - DirecTV vs. Versus

Mucous writes: So is DirecTV (screwing) us or Comcast or both? I don't know who to believe, but I will believe you.

Philbony says:

My dearest Mucous,

Yours is an interesting question, one by which I too have been consumed.

DirecTV has unilaterally taken Versus off "air" because it says Comcast -- Versus' owner -- is demanding an exorbitant license fee increase that is not being assessed on other providers (Dish Network, Time Warner Cable, et al). If this is accurate, my sympathies tend toward DirecTV.

Comcast says, "No no!" It is DirecTV that is to blame for the fee increase because it plans to move Versus to a pricier programming tier. This robs Versus of viewers because current subscribers who don't care about hockey or bull riding will just let it go. Meanwhile, DirecTV would make money off the loyal Versus customers held hostage by the lack of alternatives to exclusive NHL or PBRA action and reduce its carriage payments to Versus because it garners fewer viewers. In this case my heart goes to Versus.

Ah, but the plot thickens. Notice the NHL is backing Comcast/Versus in the matter. There is an open letter on NHL.com advising afflicted fans to express their displeasure to DirecTV. The layman might logically suppose the NHL is wounded by the dispute, but impartial in its assessment. This would be a faulty assumption. Comcast owns the Philadelphia Flyers via its subsidiary, Spectacor (eerily similar to James Bond's nemesis, SPECTRE). So the NHL plainly has a conflict of interest and is not to be trusted in the matter.

Versus recently ran advertisements in the LA Times, Houston Chronicle, and other newspapers twisting the knife in DirecTV's side, particularly with regard to the pending NHL searson. It ended with the advice to DirecTV customers to switch providers. This is rich! Cable giant Comcast telling people they should drop a satellite provider over a carriage dispute manufactured partly or largely by the cable giant itself. For its part, DirecTV calls Versus "basically a paid programming and infomercial channel with occasional sporting events of interest." Childish.

Bottom line: Both sides suck. All three, if you include the NHL.

In summary,

1. While it bills itself as the "fastest growing sports cable network" in the USA, Versus clearly isn't ESPN. It isn't even USA, TNT or A&E.
2. DirecTV is displaying naked greed and callousness toward its own customers by extorting those who are passionate about the premier offering on an otherwise low-rated network.
3. The NHL is being disingenuous about telling people to complain to DirecTV only. And they are being downright deceptive about their relationship with Comcast.

I propose a short-term solution to at least built goodwill and save face: Any DirecTV subscriber who currently buys the NHL Center Ice package should receive Versus for free. DirecTV should return -- or be allowed to return -- Versus to "air" forthwith!

That problem solved. On to health care!