Financial intermediaries are little more than rent seekers, says a thought-provoking article in this week’s New Yorker magazine:
One is the role of financial intermediaries, such as banks. Rather than seeking the most productive outlet for the money that depositors and investors entrust to them, they may follow trends and surf bubbles. These activities shift capital into projects that have little or no long-term value, such as speculative real-estate developments in the swamps of Florida. Rather than acting in their customers’ best interests, financial institutions may peddle opaque investment products, like collateralized debt obligations. Privy to superior information, banks can charge hefty fees and drive up their own profits at the expense of clients who are induced to take on risks they don’t fully understand—a form of rent seeking. “Mispricing gives incorrect signals for resource allocation, and, at worst, causes stock market booms and busts,” Woolley wrote in a recent paper. “Rent capture causes the misallocation of labor and capital, transfers substantial wealth to bankers and financiers, and, at worst, induces systemic failure. Both impose social costs on their own, but in combination they create a perfect storm of wealth destruction.”
According to a report by English ISP XLN Telecom, access to broadband internet services is more important to small and medium-sized businesses than gas, water and other essential services.
The survey, which contacted 657 small UK business owners, found that 77 per cent of respondents listed telephones as ‘essential to the running of their company, while 76 per cent listed electricity. In third place: business broadband (67 per cent), with water and gas trailing on 39 per cent and 19 per cent, respectively. 76 per cent indicated that broadband was an ‘essential tool’, up from 11 per cent a decade ago.
This suggests that businesses facing disconnection under the reserve powers created by the Digital Economy Act 2010 (UK) will incur a substantial burden — which raises the question whether the burden is disproportionate to the harm. Meanwhile, residential users report broadband more important than food. Hmmm.
According to The Hollywood Reporter, film studios have posted record earnings for calendar year 2008. Around 1.36 billion cinema tickets were sold in the United States during 2008, compared to 1.4 billion tickets in 2007. Ticket prices rose an average of 4.7 per cent, resulting in a 2 per cent increase in overall net profits. Ars Technica has the details:
Despite the MPAA’s continuing battle against film pirates and even a French group’s warning that piracy could kill the industry, domestic box offices are doing better than ever. Both blockbusters and not-so-blockbusters propelled record-setting revenues to an estimated $9.78 billion in 2008, with ticket price increases and films from Warner Bros, Paramount, and Sony drawing captivated audiences. …
Warner Bros. topped the list of successful studios this year with The Dark Knight, which collected $531 million and became the second highest-grossing theatrical release in history. … Knocked from its first place throne in 2007 to second place this year was Paramount, grossing $1.6 billion and garnering a 16.4 percent market share. The summer release of Iron Man was Paramount’s most successful for the year, collecting $318.3 million. … Sony took third place among studios, bringing in $1.28 billion and claiming a 13.1 percent market share. Hancock was Sony’s leading star with $228 million at the box office. Read more »
Originally by WSJ.com: What's News Technology, 9:18 PM
Originally by WSJ.com: What's News Technology, 11:18 PM
Seagate Technology, manufacturer of storage computer hardware, has almost completed its acquisition of Maxtor Corporation, a one-time competitor in consumer and enterprise hard disk drive market. Apparently, the merger — announced late last year — has now been approved by shareholders and will close within the week.Read more »
It seems the United States gaming industry is unhappy with an old statute that has the effect of preventing electronic gambling.
‘It represents an enormous opportunity’, said Alan Feldman, spokesman for US-based MGM Mirage, the world’s second-largest gaming operator. ‘And it is an opportunity that is being completely handed to foreign companies right now.’ Read more »
Originally by NYT > Technology, 1:42 PM
Originally by NYT > Technology, 1:41 PM