08:51 – Finally, some MSM commentators are saying what should have been obvious to anyone all along. Germany could not bailout the southern tier countries even if it wanted to. Although Germany is normally presented as a “strong” economy, that’s true only relative to the other, pathetically weak, eurozone economies. Much of Germany’s putative strength results from two interrelated factors: its strong export performance and its AAA credit rating. But the only reason Germany’s exports are strong is that it has the rest of the EU as essentially a captive market, with the euro artificially keeping the prices of German exports low in other eurozone countries. Germany has been reaping the benefit of this arrangement while other, less productive eurozone economies have been paying the price. As I’ve said repeatedly, Germany has for years been shipping products to other eurozone countries on what amounted to easy credit terms. And now those other countries find themselves unable to pay their bills. So much for Germany’s vaunted export economy.
And therein lies the problem with Germany’s AAA credit rating. As some billionaire or other commented when the US credit rating was reduced from AAA to AA+, it should instead have been raised to AAAA. Most people probably thought this was just a quip, but in fact it stated a profound truth. There is no country whose credit rating should be equal to the US credit rating, let alone higher, because the US is far more credit-worthy than any other country, most particularly including Germany. As I’ve said, the US can never, ever be forced to default because we’re a real country. We can print our own money. Germany, like the rest of the eurozone, is not a real country because it does not control its own currency, at least as long as it remains a member of the eurozone, and so Germany can most definitely be forced to default. And it will be so forced, eventually, if it’s foolish enough to backstop the gigantic debt of the southern tier nations. Based on the current situation, if I were assigning a credit rating to German “sovereign” debt, I’d place it five levels below the US, maybe six. Call it BBB, give or take. France belongs another several levels below that. And the rest of the southern tier belongs several levels lower still, because all of them will inevitably default. And that is why Germany, along with the other FANG nations, should depart the EU and eurozone as soon as possible. There is some hope for their relatively stronger economies; there is no hope for Spain, Italy, France, Belgium, and the rest.
11:45 – Wow. Four new Kindle models, but what surprised me was that Amazon didn’t discontinue any of the three existing models, at least not yet. I was disappointed that the current Kindle 3 Wi-Fi remains at $139 ($99 with ads) and the Kindle 3 3G remains at $189 ($139 with ads).
There’s a new Baby Kindle 4 for $109 ($79 with ads) that lacks the keyboard of the Kindle 3, and has half as much memory and half the battery. The real new e-ink model is the Kindle Touch, available in WiFi-only ($139 or $99 with ads) and the Touch 3G ($189 or $149 with ads). The main differences between the Kindle 3 and Kindle Touch models is that the Touch models have only touch, replacing the keyboard, 5-way controller, and page-turning buttons of the Kindle 3.
With the prices identical except for the $10 premium on the Touch 3G with ads, I think anyone who buys the Touch models is making a mistake. But perhaps not. I’ll have to think about whether touch is a good substitute for buttons. For browsing around, perhaps. But for reading, I definitely prefer buttons. If the Touch had page-turning buttons as well as touch, I’d go for it, but I really don’t want to be constantly touching the screen to turn pages. As to the Kindle Fire, I suppose it’s exciting if you like that kind of thing, but it looks like it’ll suck as an e-reader, at least compared to the e-ink devices.
As to a Kindle for Barbara, I’ll have to think about this for a while longer. If I had to order today, I’d order a Baby Kindle 4, probably with ads. It’s available now. Barbara wouldn’t care about what the thing displays when it’s asleep, and some of the Kindle Special Offers actually are pretty good deals. But I think I’ll hold off a bit longer to see if Amazon discontinues the Kindle 3. I suspect they will, and if that happens a Kindle 3 Wi-Fi with no ads might sell for $79 or less.
13:41 – Okay, I thought about it a while longer, and just ordered a Baby Kindle 4 with ads for Barbara. Except, as it turns out, I just ordered it for myself. When I called Barbara to let her know what I’d ordered for her, she pointed out that she plays Scrabble and other games on the Kindle, and therefore needs a real keyboard. Oops. Doesn’t matter, of course. She gets the current Kindle 3 and I get the Baby Kindle 4.
The more I thought about it, the more I realized that my first impression of the Kindle Touch was correct. It’s unusable without dedicated page-turning buttons. I think Amazon really screwed the pooch by not including those buttons on the Touch. And I’m not alone. I’ve already read a slew of comments by people saying that the lack of those buttons was a deal-breaker for them, so they ordered the $79 model instead. By saving at most a buck per unit, Amazon has really made the new Kindle Touch unappealing to a very large group of potential buyers. And speaking of saving cents, the $79 model comes with a USB cable, but not with the dongle that allows you to connect the USB cable to an AC power receptacle. That’s no problem for us, because the one that came with the Kindle 3 will work with the Baby Kindle 4, and I can just charge it via USB connected to a computer anyway. But charging $10 for the dongle does seem excessive.
I think you’re right about the breakup of the Eurozone, but is the US really that much better off? How long is it until everyone realizes that the finances of California, Illinois and New York aren’t any better than the finances of the PIIGS? I think Obama’s proposed
second StimulusJobs Bill is nothing more than a bailout of the most fiscally irresponsible US States. Greece may default before California does, but both are inevitable.Well, California can’t print its own money, of course. But the real difference is that Greeks are in reality dirt poor and with no prospects for changing that. Residents of the states you mention are not poor, and are much, much more productive than Greeks. It is still possible for the US government and the various states to grow out of the most significant economic problems. The real problem is that, if/when we get economic growth, politicians and bureaucrats will regard that as reason to spend still more rather than paying down what they already owe. If I were the federal and state governments, I’d be targeting a 50% budget surplus for the next couple of decades. That is, expenditures should be at most 50% of revenues, with the remaining 50% going toward paying down debt. Of course, the implications of that are a significant decline in the standard of living of nearly all of us. Just as the Greeks have had German standards of living for the last decade or more, all on borrowed money, we’ve been living on borrowed money for far too long. We need to make huge cuts in everything from military spending to social security, Medicare, and Medicaid. And by huge, I don’t mean 10% or 20%. I mean taking a meat-axe to these programs across the board to bring our expenditures into line with our revenues.
I should have mentioned that, although I would assign the US the highest credit rating, in absolute terms that AAA rating would be “Very Poor”. But all of the other countries we’ve been discussing rate something well, well below that.
I don’t know if the US would fall apart. There is nothing to fall apart to. Germany can go back to being Germany. France can go back to being France. What does the US revert to? British colonies? First Nations? Spain and France? None of those can afford to take back their former lands.
No, those three will be propped up by the others, and some laws will be (or should be) written to prevent States from releasing anything other than a balanced or surplus budgets. Unlike Europe, where the knives will soon be flashing, the US mostly gets along. And while the US suffered a terrible calamity with the Civil War, it was not repeated in fact. Compare that to the back and forth military escapades of Europe! Or, as I suspect I will see in my lifetime, the future war in Europe.
But Jaysus! If Obama gets another term, I shall have to reevaluate my stance. Nobody, not even the Italians, seem to blow money like he does!
A lot of people who can flee California are fleeing. I recall one woman’s blog post about deciding to leave California for Texas. She’s a small business owner and her particular business isn’t tied to a geographic place. She’s moving because of the much higher taxes in Calfornia. Just from the tax savings, she figures she can hire an assistant.
Interesting…
“How Microsoft Can Lock Linux Off Windows 8 PCs”
http://linux.slashdot.org/story/11/09/21/062231/how-microsoft-can-lock-linux-off-windows-8-pcs
New Kindles…
Details from http://www.amazon.com
There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work. We are firmly in the second camp.
We are excited to announce four new products: the all-new Kindle for only $79, two new touch Kindles – Kindle Touch and Kindle Touch 3G – for $99 and $149, and a new class of Kindle – Kindle Fire – a beautiful full color Kindle for movies, TV shows, music, books, magazines, apps, games, web browsing and more, for only $199.
These are high-end products – the best Kindles we’ve ever made. Kindle and Kindle Touch have the most-advanced E Ink display technology available, and the 3G Kindle Touch adds free 3G wireless – no monthly fees and no annual contracts. Kindle Fire brings everything we’ve been working on at Amazon for 15 years together into a single, fully-integrated experience for customers – instant access to Amazon’s massive selection of digital content, a vibrant color IPS touchscreen with extra-wide viewing angle, a 14.6 ounce design that’s easy to hold with one hand, a state-of-the-art dual core processor, free storage in the Amazon Cloud, and an ultra-fast mobile browser – Amazon Silk – available exclusively on Kindle Fire.
We are building premium products and offering them at non-premium prices.
Thank you for being a customer,
Jeff Bezos
Founder & CEO
p.s. – Kindle Fire has a radical new web browser called Amazon Silk. When you use Silk – without thinking about it or doing anything explicit – you’re calling on the raw computational horsepower of Amazon EC2 to accelerate your web browsing. If you’re curious, watch this short video to learn more about how it works.
Amazon Silk browser video mentioned above…
http://amazonsilk.wordpress.com/2011/09/28/introducing-amazon-silk/
Silk is an enhanced version of the ideas behind Opera Mini: do expensive processing on a server, and reduce the bandwidth used by the mobile device. Nice to see thid idea being contonued…
“A lot of people who can flee California are fleeing. “
I’m not sure if I consider that “fleeing”. Moving your business to receive better tax breaks is a smart business move. Fleeing to me is leaving without consideration for what you left behind. The Okies fled Oklahoma for California, once upon a time, and that was a ‘proper’ fleeing! There is no reason for California not to be the richest State in the Union, other than stupid voters and the results that gets you. I bet the money spent on coke (as opposed to Coke™) in Hollywood alone would go along way towards balancing the State budget.
When we see Priuses loaded up with furniture heading for the Mid-West, can we say people are fleeing California.
I live in a Province that experiences a fairly consistent boom/bust economy with our neighboring Province of Alberta. When we boom, they bust, and vice versa. We share the labor force, who packs up and moves at the first sign of economic downturn. They aren’t fleeing their homes, merely moving for work. They’ll be back, again and again, until they reach a certain financial position where they will buy their home and put down roots.
We are excited to announce four new products: the all-new Kindle for only $79, two new touch Kindles – Kindle Touch and Kindle Touch 3G – for $99 and $149, and a new class of Kindle – Kindle Fire – a beautiful full color Kindle for movies, TV shows, music, books, magazines, apps, games, web browsing and more, for only $199.
Decisions, decisions…
ARGHH! Damn the fine print!!
I’ll have to see if a friend of mine in WA will accept it and forward it to me.
I’ll have to see if a friend of mine in WA will accept it and forward it to me.
I would do it for you if necessary.
Perhaps fleeing is too strong a term. But if not for new immigration, California’s population would be declining. It is rational for a certain class of people to move out of California. Ironically they’re the kind of taxpayers California would like to keep. The ones with growing small businesses.
My wife and I don’t live in California, thankfully. But we made a decision to move where economics played a factor. My decision making process to move outside of Indianapolis, where I’ve lived for most of my life, was definitely impacted by practical economic considerations.
One interesting fallout of the new Kindle announcement that hasn’t been mentioned. Barnes and Noble stock is down 8% from it’s opening price on the news of the new Kindle. Most of the news stories are talking about the Kindle Fire as an iPad killer. That’s not going to be the product hardest hit. The hardest hit product will be the Nook Color. The Kindle fire has a much smaller screen than the iPad, and 3G isn’t included at least for now. It’s a much more obvious shot at the Nook Color. A dual core CPU and a pricetag $50 below the Nook Color.
If Barnes and Noble doesn’t reprice and/or revamp the Nook Color, then their stock price is going to take a lot bigger hit than it has already.
But Dave, isn’t that a problem for all of First World countries? Our 1.5 kids per family no longer replaces our dead. Hardly unique for California, the rest of the US, Canada, Australia, etc. Slim might argue that California is experiencing the wrong type of immigration, but until he flees, I’m not worried about California.
Moving due to high taxes, or high unemployment is a freedom many other countries don’t have. The point is that there are other places in the country that they can more to. The US is big enough to roll with the punches. They just have to get used to actually feeling the punch. It’s been a long time since they felt the last one.
Thanks, Ray. I might take you up on that!
Hmmm, this new software doesn’t have a PM function, does it?
There are two types of companies: those that work hard to charge customers more, and those that work hard to charge customers less. Both approaches can work.
A direct shot at Apple and their 25% net income. Yes, that’s right – Apple makes 25% profits. 4-6x what most industrial companies make. It means there is space for someone to compete and capture some of the excess profits. Amazon seems to be making that move. Expect Google to try to do the same via the buyout of Motorola’s cell business.
Hmmm, this new software doesn’t have a PM function, does it?
Nope. But my email is rayt(four three five) at comcast dot net. Remove the parenthesis and replaces the words in the parenthesis with actual numbers. The rest you can figure out.
Right. We don’t actually know if Keynesian economics works because it’s never been tried. The pols all have the spending part down pat, but the paydown/save part seems to elude them.
If neither of the would-be PMers want to reveal their email address in a public forum, the solution is to create a “scratch” email account with Google or similar and pass that. Then the other person can send a real email address to that, then convenient, conventional conversation can take place.
The Kindle Fire at $200 could be the real game changer. It has a similar processor to the $500 Ipad touch and looks like it will have a decent screen. If it can be hacked to run a standard Android, it will be a real deal.
I don’t understand why so many like the Ipad. It is too large. I have tried 10″ tablets and I have a Samsung Galaxy Tab 7″ tablet and it is a much more portable device. I paid $200 for my Galaxy Tab and am happy with it.
Rick in Portland
That AMZN didn’t discontinue the ad-free 3G models surprised me, too. I ordered a couple as back-ups last week. White ones! The dull yellow paint (how dumb is that as far as readability is concerned?) wears off the graphite keys. The free 3G works in India and sure beats a telegraph in a pinch. Oh, wait… nevermind!
I fled Calif in 2004. You need look no farther (further? Where are the grammar police when I need them? Oh that’s right, they went on strike!) than the Bay Area to see what kind of trouble this country is in. From this morning’s SanFran Chronicle:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/09/28/BA5O1LADG1.DTL&type=printable
If that isn’t a contravention of the Invisible Hand, I don’t know what is. Surely spells sorrow as I see it.
Thanks Ray, I’m sending the email now.
I’m one of those weirdos that has a Kindle (keyboard) and an iPad. No page buttons on the Touch is a killer for me. It’s to awkward to hold a sandwich (pipe, drink, whatever) and turn the page at the same time. The Fire looks interesting, hopefully Best Buy will carry them so I can check it out. Magazines on the iPad are great and there are some great apps for business. The Fire screen might be a tad small for me. I carry the ipad and Kindle in a murse (man purse) when I travel. It fits both snugly with there adapter/chargers.
Anybody know if Calibre has any plans to suppor the new Kindles, or is the file system the same.
On another note, I see the Feds have dropped another billion on solar projects. I imagine if these projects actually produce usable power, you’ll have to pay for it again. Talk about double taxation.
http://thehill.com/blogs/e2-wire/677-e2-wire/184331-energy-department-approves-737-million-loan-guarantee-for-solar-project
“their” instead of “there” curse you Word Press for no editing.
I’ve been using the iPod tough as my Kindle reader and have liked it—It’s great to always have a library of books with you without having to carry something too big for a pocket around. I believe that Amazon is missing a niche by not making a Kindle small enough to fit in a pants pocket. The Kindles strike me as being too medium: too big to serve as the best reader for text, yet too small for reading formatted materials such as PDF’s and web pages. I’d love to get the equivalent of an I phone with an e-ink screen-possibly with a normal screen on the flip side.
I saw the stories about the solar loans and posted this elsewhere:
I’m hoping an MBA type will see this and tell me where I am wrong.
I saw the announcement for the Tonopah Solar loan guarantee of $737 million for their 110 MW solar plant. This seemed really expensive, so I wondered if we had another money loser on our hands.
Their press release from the preliminary approval in May said that they would:
Generate 480,000 MWh of electricity per year.
Create 45 permanent jobs.
Have an operating cost of $10 million/year.
Pay $3.7 million in property tax over 10 years.
So if they borrowed $737 million at 3% for 30 years, the monthly payment is $2.725 million/month.
The ops cost (including taxes) is $833k/month.
So they have monthly expenses of $3.557 million.
They will sell 40,000 MWh per month.
So to break even, they need to sell the electricity at $88.94 per MWh.
I looked at DOE data on wholesale electricity prices on the California spot market and saw a max payment of $50/MWh. This implies revenues of $2 million/month, a loss of $1.557 million/month.
Am I missing something?
Hmmm.
What, then, would we say about a young couple of newly-weds who fled California – for Washington, DC?
All right, all right, quiet in the back stalls there. Settle down. He’s actually quite intelligent. Seriously. Dean’s List, straight A’s, and all that. And Ma… Mrs Flee is fully his match, but nice as well.
But honestly, Washington DC.
Honestly, I suspect they both probably frequent other alternative boards that I and Old Farmer Davy haunt – but they don’t let on.
But Washington DC – or at least on the edge – Maryland by just miles! Honestly! When the Mohammedans smuggle in ex-USSR suitcase nukes, it’ll be New York and the White House, then Houston, with Cowboy Slim fourth in line.
Washington, DC! Honestly!
Seems very odd to me, Don.
Are you telling us that you see OFD behind our backs? 😀
@Don Armstrong
Why would the Mohammedans use a nuke on the White House? If they wish to see the USA destroyed, they can just watch the White House in action and applaud.
Don wrote:
“What, then, would we say about a young couple of newly-weds who fled California – for Washington, DC?”
Met a Californian couple in 2003 who’d fled to Oregon. But he’d just lost his job and was dreading the prospect of having to move back if he couldn’t get another job in Foggyland^H^H^H^H^H^H^H^H^HOregon.
I like DC, perfectly normal, nice people. Good, sedate drivers. Pity about the politicians.
I just about fell off my chair when I read this article…
http://www.abc.net.au/news/2011-09-29/ec-president-calls-for-banks-tax/3034774
I believe California has told their utilities that so much of there electricity has to come from renewable sources, so PG&E may have been forced to sign a higher than market rate contract.
Also the Obama Administration has made a lot of regulatory changes that will drive up the cost of coal generated electricity, thereby making this solar plant more competitive.
Well, all I know about California power, is that BC sells our Hydro generated electricity to the State, cheaper than I can buy it at home. Their pricing is “protected” while I get bent over the desk each year for an increase.
I’m glad the UK never joined the Euro… but over 45% of our exports are apparently to the Euro zone; so lets see what happens :-/
Amazon are quite canny, but the advertising supported Kindles aren’t available in the UK. Amazon UK has announced the newer models today, so we will be getting them (and it seems before Canada, sorry!) which is good news.
Since Amazon has virtually no competition, no Nook here, and the Sony Readers sell ok but they have no content (our physical stores Waterstones & WHSmith online are a joke) the market is Kindle or iPad (Kindle app)!!
I love my Kindle 3rd gen, and I have the 3G model, but I’m not convinced by the 4th gen if its touch only, but I thought I saw some buttons on the side in the UK photos. Maybe its not quite the same as the US.
The Kindle Fire isn’t appearing here which is a shame – but it will probably be the final death knell in the RIM Playbook (sorry Canada!), as the cheapest Android powered tablet. The iPad still has the market, but I sold mine – too restrictive for a computer geek 🙂
Amazon just announced that they’re rolling out the Baby Kindle 4 to 117 countries, including Canada. Only the $109 version (without ads) is available in those countries.
My advice for people who want a dedicated ebook reader is to buy the Baby Kindle 4 if they don’t care about having a keyboard and/or speakers. Otherwise, buy the Kindle 3, which has been rebranded the Kindle Keyboard. The Kindle Fire is basically for people who want to consume video from Amazon and maybe read an ebook once in a while, but it sure wouldn’t be my choice as a serious ebook reader. The Kindle Touch models are, in my opinion, badly flawed as ebook readers because they have no page-turn buttons. Having to touch the screen to turn pages is simply ridiculous.
Oops. Make that 177 countries rather than 117. I didn’t realize there *were* that many countries with at least one person who could afford a Kindle.
http://www.teleread.com/paul-biba/the-109-kindle-ships-to-177-countries-heres-the-list-by-piotr-kowalczyk/
Holy crap. One of the 177 countries is Greece. I hope Amazon gets paid in advance or they’re going to need a bailout to get their money.