blogads for the opinion makers

The folks in Boston remind us:

The gap of confidence between small companies and big ones is growing. We used to rely on the security of big companies. That’s why we worked for them. And hired them. And put our money in them.

But with the virtual collapse of AIG, Lehman, Citibank, GM, Chrysler, and many more — now even GE is in trouble — all that’s changed. Now it’s a risk to do business with the big ones.

We simply don’t trust companies anymore. We trust people. And in big companies, it’s hard to even find a person to trust as we scream “operator” into our telephones only to get transferred to another menu whose options have changed.

I’ve got this stashed away somewhere.

Jason Calacanis, the Donald Trump of the interwebs, has written an adrenalized chest-thumping column on living near the edge.

I’ve been to the precipice and faced the fall a couple of times. I’ve
learned a couple of things from the experience. I can tell you that
the first time it happens, you’re terrified, because everything you’ve
done–all the effort and dreams–will probably be lost (like tears in
the rain).

The second time it happens, you’re deeply concerned, but know it ain’t
over until you’re splattered on the boulders below.

The third time it happens, you smile and say “let’s get it on!”

Three?

WSJ:Anheuser-Busch registered the Budweiser name with the European Commission in 1996. Budvar successfully challenged the registration, and won the case when AB InBev appealed to a board that oversees decisions of the Office of Harmonization for the Internal Market, the parent body of the trademark office.

The Court of First Instance ruled Wednesday that AB InBev couldn’t register the name because it was already being used by Budvar, which submitted copies of ads in German and Austrian magazines for its Budweiser beer from the mid 1990s.

Under European law, AB InBev will have to pay Budvar’s legal costs. A Budvar spokesman couldn’t be reached for comment.

Budvar began producing Budweiser beer in 1895 in the Czech town of Ceske Budejovice, although the company says the name was used in the region for a long time before that. Eberhard Anheuser and Adolphus Busch created their Budweiser brand in 1875 in St. Louis. The companies have been fighting in courts around the world since the 1950s.

Thank you Will!

Watch this video… if you dare.

Here’s Geithner’s infamous non-defense of the dollar, when asked about Chinese central bank suggestions to reduce reliance on the dollar as a reserve currency:

“As I understand his proposal, it’s a proposal designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that suggestion. But you should think of it as rather evolutionary, building on the current architectures, rather than moving us to global monetary union,” Geithner said during an interview in New York with the Council on Foreign Relations.

“It is very important just to underscore that the future evolution of the dollar’s role in the system depends really primarily on how effective we are in the U.S. in getting not just recovery back on track, our financial system repaired, but we get our fiscal position back to the point where people will judge it as sustainable over time,” he said.

Later in the day, Geithner protested that his comments were misinterpreted and stood firm for a strong dollar. (Anyone know where I can find this text?) Strong currencies don’t have to plead their case.

The bad news is that no currency is safe as central banks print money to fill holes left by worthless securities. The Chinese need to get more of their reserves into gold rather than worrying about SDRs.

The Google search bar helpfully tries to autofill when you’re doing a search. Start typing in the letters h and a and it prompts “haute couture” and “Harry Potter.” I assume this based on the frequency of other searchers’ terms.

Start typing in Geithner, and this is what it prompts:

Is that really what Google searchers are most interested in?

Google’s documentation explains: “As you type a search query into the new Toolbar’s search box, you’ll see a list of useful suggestions based on popular Google searches, spelling corrections and your own Toolbar search history and bookmarks.”

Looking at the results for the “Geithner jewish” search, the fifth is to another blogger’s previous observations on the same disturbing trend.

Mashing up two of the fastest growing phenom of our time: http://twitter.com/nationaldebt.

Why would anyone buy low-yield fixed income securities when we know governments around the world are preparing to unload trillions of the things? Bonds are going to be priced like sand at the beach. If you’ve got the bucket — take as much as you want. It looks like UK buyers are starting to rebel as the government starts selling “gilts” as the UK government bonds are called. Bloomberg reports:

U.K. gilts slumped after demand at an auction of bonds fell short of the amount offered, the first time the Treasury failed to attract enough bids at a sale of regular debt in 14 years.

Investors bid for 1.63 billion pounds ($2.4 billion) of the 40-year securities, less than the 1.75 billion pounds of 4.25 percent notes slated for sale, the U.K. Debt Management Office said today in a statement from London.

“Basically it’s the first failed auction,” said John Wraith, head of sterling interest-rate strategy at RBC Capital Markets in London. “They didn’t receive enough to cover it all so the market has obviously sold off extremely heavily.”

The yield on the 10-year gilt jumped 10 basis points to 3.43 percent by 11:45 a.m. in London. The 4.5 percent security due March 2019 slipped 0.84, or 8.4 pounds per 1,000-pound face amount, to 109.02. The yield on the two-year note rose six basis points to 1.30 percent. Yields move inversely to bond prices.

In my thirty years of watching the US treasury market, we’ve never had a failed auction in the US. How long before we see one?

Thanks to a pile of new code written in Budapest over the last 3 months, advertisers can now run multiple ad versions in a single day, assigning a weighting to each version. Advertisers can use this feature to keep ads fresh for readers or to test which version is most effective. (If you’re a current advertiser, click “versions” link on an already purchased ad and you can start juggling creative!)

We’ll be letting advertisers know about this and updating our Youtube overview of Blogads, but if you’re a blogger, feel free to post about this new feature to get the word out!

Funny that politicians and economists never do A/B testing of policies.

Sanford Bernstein analysts think Twitter “will likely have to operate it at a loss in perpetuity, or until the next cool Web 2.0 social networking concept comes along and Twitter tweets no more.”

That’s idiotic. Twitter has clearly become a foundation for a new type of communication. The easy, obvious (and perhaps only) route to monetize twitter is to charge users a nominal fee for “registering” their usernames. (Much as domain registrars charge $10-$20 a year for each .com or .org registration.)

Twitter would give the first six months or 300 tweets away free, locking users into the twitter ecosystem.

Twitter now has atomic-powered network effects: who wants to re-follow 1000 people in a new network… or try to convince 500 followers to move elsewhere? Shaq isn’t going to ask his 300k followers to migrate. Perez isn’t going to take his 230k followers elsewhere. I’m not going to want to re-follow 410 people. And all the companies who have built tools around Twitter’s API aren’t going to be eager to recreate those services around other APIs. Once hooked up/in, people will gladly pay $5 a year or $1/month rather than lose their entire network of relationships.

Assuming 50% attrition from its current 7 million users, that would generate roughly $20 million a year… plenty of revenue for servers and the company’s 40-odd staff. It wouldn’t be glamorous, but it would secure profitability and let twitter continue growing the plumbing for a new type of communications revolution.

Update: John Hawkins argues that Twitter’s hordes of followers are inflated by bots.

Update 2: I ran this idea by a friend in-the-know and got what amounted to a “no comment.” Signal or noise?

Keith Olbermann: “Everybody knows I take my instructions from our next guest, the founder and publisher of Dailykos.com, Markos Moulitsas.” (At 2:08)

Bloomberg:

The 8.875 percent 30-year bond that the government sold in February 1989 yields 0.44 percentage point, or 44 basis points, more than the current 10-year 2.75 percent note, which is the most comparable security and yields 2.89 percent. That amounts to about $44,000 a year in interest on a $10 million investment.

In laymen’s language: current buyers of US treasuries are not long-term investors, but flight-to-quality money-stashers. Not a sound base for an rate curve and a sign of much higher rates to come. And higher rates mean fewer home buyers & slower economy.

Heading out for dinner in Austin. Looks like tons of great folks are in town.

Madoff “lost” or “stole” $65 billion. That’s the headline of the day.

How is that possible when Madoff hasn’t even been trading for at least 15 years?

More likely Madoff “redistributed” $65 billion in the form of dividends and cash distibutions to investors.

Or, the bulk of the $65 billion is bogus paper profits. But you can’t really lose money that never really existed, right? (If I wrote you a check for $5 million and it bounced, would we say you’d “lost” $5 million?)

Ads make TV more pleasant: First:

In one experiment, Nelson, along with Tom Meyvis and Jeff Galak of New York University, had 87 undergraduates watch an episode of the sitcom “Taxi.” Half watched it as it was originally broadcast, with commercials for the Jewelry Factory Store and the law office of Michael Brownstein, among other ads. The other half watched the show straight through, without commercials.

After the show was over, the students rated how much they enjoyed it, using an 11-point scale and comparing it with the sitcom “Happy Days,” which they were all familiar with. Those who saw “Taxi” without commercials preferred “Happy Days”, but those who saw the original show, Jewelry Factory Store and all, preferred “Taxi” by a significant margin.

In similar experiments, using other video clips and a variety of interruptions, the results were the same: People rated their experiences as more enjoyable with commercials, no matter their content, or other disruptions. The effect wasn’t limited to watching TV; interrupting a massage also heightened people’s enjoyment, one experiment found.

The opposite was true for irritating experiences, like listening to vacuum cleaner noise: A break only made it seem worse, they found.

Second

In the week ending March 7, the advance figure for seasonally adjusted initial claims was 654,000, an increase of 9,000 from the previous week’s revised figure of 645,000. The 4-week moving average was 650,000, an increase of 6,750 from the previous week’s revised average of 643,250.

Kate Zernike offers a good look at what today’s kids will learn from the “Great Recession.” Writing in 1951 about children of the Great Depression, Time magazine opined

“Youth’s ambitions have shrunk,” the magazine declared. “Few youngsters today want to mine diamonds in South Africa, ranch in Paraguay, climb Mount Everest, find a cure for cancer, sail around the world or build an industrial empire. Some would like to own a small, independent business, but most want a good job with a big firm, and with it, a kind of suburban idyll.” The young soldier “lacks flame,” students were “docile notetakers.” And the young writer’s flair “sometimes turns out to be nothing more than a byproduct of his neuroses.” (This even before Philip Roth, born 1933, had published a novel.)

“The best thing that can be said for American youth, in or out of uniform, is that it has learned that it must try to make the best of a bad and difficult job, whether that job is life, war, or both,” Time concluded. “The generation which has been called the oldest young generation in the world has achieved a certain maturity.”

Japan is worse? Bloomberg:

The world’s second-biggest economy shrank an annualized 12.7 percent last quarter, the government said Feb. 16, the biggest contraction since the 1974 oil crisis. Capital spending excluding software dropped 18.1 percent in the three months ended Dec. 31, the seventh quarter of declines, a separate government report showed on March 5.

A Cabinet Office report on March 11 may show machinery orders slumped 40.2 percent in January from a year earlier, according to a Bloomberg News survey.

Signs of a deepening recession dragged the Nikkei 225 Stock Average down 5.2 percent this week. Ten-year yields had a correlation of 0.7 with the Nikkei in February, Bloomberg data show. A value of 1 would mean the two moved in lockstep.

“While falling stocks normally push yields down, we need to be alert to the risk that Japanese financial institutions, which suffered heavy equity losses, will sell bonds to generate profits before the fiscal year ends this month,” said Chotaro Morita, chief strategist at Barclays Capital Japan Ltd. in Tokyo. “Such selling of bonds may emerge as the Nikkei 225 comes closer to or falls below 7,000.”

Of course, Japanese banks own plenty of US bonds too. How high do US long term yields go when UST cancels auctions of TIPS, the inflation adjusted security, and tries to sell 100 billion worth of 30 year bonds — 15%? Unless of course, the Fed prints more money and buys the bonds itself.

More assurances that there’s nothing to worry about in Hungary.

Hungary PM says bank deposits are safe, guaranteed

BUDAPEST, March 6 (Reuters) – Hungarian bank deposits are safe and the government provides a comprehensive guarantee for client deposits, the prime minister said on Friday.

‘We have made very important steps (during this crisis). It is a very big thing that depositors in Hungary need not worry,’ Prime Minister Ferenc Gyurcsany told a meeting of business leaders.

‘They can be safe during a global financial crisis,’ he said.

Gyurcsany also said the government was ready to consider deeper and more comprehensive reforms than the measures laid out last month.

It’s a truism among money market mavens that any bank that has to proclaim its health is almost dead.

So it is with great sadness that I read this story tonight, datelined 03.05.09, 05:56 PM EST.

Hungary cbank, regulator say bank system stable

BUDAPEST, March 5 (Reuters) – Hungary’s central bank (NBH) and financial market regulator PSZAF said on Thursday that the financial situation of banks in Hungary was stable and bank clients’ money was safe.

‘The Hungarian central bank and PSZAF are closely monitoring the situation of banks,’ the bank’s spokeswoman Nora Hevesi and PSZAF spokesman Istvan Binder told Reuters.

‘The financial situation of the Hungarian banking system is stable, the money of depositors is in safety,’ they added.

The forint, having traded at 300 to the Euro just a week ago and having closed today in Budapest at 309 to the Euro is at 315 tonight.

Make that 316.

I got to know Andras Simor, the guy who today runs Hungary’s central bank, in the 1990s when I was living in Budapest and writing about business in the former Soviet bloc. Simor ran the securities arm of Creditanstalt Securities and was always generous with his insights.

Simor is in a tough spot now, because every currency speculator in the world is trying to bludgeon the IMF’s $15.7 billion loan out of his vaults and into their own wallets.

A devaluing forint hurts Hungarians who’ve borrowed avidly in Euros and Swiss Francs. And it puts great pressure on the banks in Europe (Creditanstalt being high on the list) who have loaned this money. The dominoes are tumbling.

(For Blogads’ business partners, it’s worth noting that this craziness is benign: Hungary’s tailspin means Budapest staff get paid more in local terms and we can hire more great programmers.)

I’d missed this passage in Warren Buffett’s annual report:

This debilitating spiral has spurred our government to take massive action. In poker terms, the Treasury and the Fed have gone “all in.” Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind-boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

“In the week ending Feb. 28, the advance figure for seasonally adjusted initial claims was 639,000, a decrease of 31,000 from the previous week’s revised figure of 670,000. The 4-week moving average was 641,750, an increase of 2,000 from the previous week’s revised average of 639,750.”

Good news, though probably a statistical blip.