Has a central bank ever intervened successfully in the foreign exchange market when the momentum trade was against it? The yen has been rising alarmingly of late, and now the Bank of Japan is trying to push it down.
At first glance, the action looks like a something-must-be-done-this-is-something -therefore-this-must-be-done move: a new prime minister and a “bold action” doomed to be proved ineffectual. The FX markets are so enormous (dollar/yen alone trades some $750 billion per day) that it’s hard to believe a single sale of less than $20 billion in yen could even have the short-term effect we saw last night, let alone have any lasting consequences.
But this isn’t just about FX-market intervention. This is also about monetary policy, and that could make a real difference:
Unlike in previous forays, the Bank of Japan will not drain the money flowing into the economy as a result of the yen selling, sources familiar with the matter said.
That indicated the central bank plans to use the sold yen as a monetary tool to boost liquidity and support the economy.
Authorities that sell their own currencies to weaken them often issue bills to “sterilize” the funds and keep the excess money from becoming inflationary. In Japan’s case, it wants to promote inflation since the economy has been dogged with deflation for much of the past decade.
“The government’s aim, and the aim of authorities in general, is to add monetary injections to the economy,” Callum Henderson, global head of foreign exchange strategy with Standard Chartered in Singapore, told Reuters Insider.
“Unsterilized intervention should be yen-negative, it should be very bullish for higher risk assets, very bullish for stocks in Japan and obviously it should add to the impact of the intervention of the yen,” he said.
In other words, the Bank of Japan isn’t simply selling yen, it’s printing yen. (And then selling them.) Given (a) that it’s the central bank and that it can print as many yen as it likes, and (b) that it would actually welcome a bit of inflation, there’s actually a non-negligible chance that this kind of non-sterilized intervention could work.
Of course, a hint of inflation in Japan could end up driving Japanese bond yields up. That in turn could make a huge difference to the government’s annual interest bill on the country’s monster national debt. So this kind of policy is hardly cost-free; indeed, the real costs might well be much larger than the nominal size of the intervention. But at least it has a chance of making a difference, which is more than you can say for most currency interventions.
Label Complains That Amazon Devalues Artists By Making Music Cheap
from the you-got-it-backwards dept
This is unfortunate. Nearly two years ago, we wrote about the indie music label Asthmatic Kitty, which seemed to take a really forward looking attitude towards the new music market. In that interview, the label noted the reality of the new world, and why it was important to focus on reasons to buy, rather than assuming that people would just pay to hear music. This is what was said at the time:
I operate under the conviction that people buy records because they want to own them, not because they want to hear them. It is too easy these days to hear a record without having to buy it. I don't resent that fact, rather I feel we at Asthmatic Kitty embrace it through streaming albums and offering several free mp3s (even whole free albums). And why do they want to own it? They want it to illustrate to others their taste and identify who they are as a person. I also believe they want to be part of something bigger than themselves, they want to belong.
Our job is no longer to sell folks things they want to hear. They want an experience and to identify themselves as part of a community. Ownership then becomes a way of them supporting your community through investing in that community. Fostering that in an honest, transparent and "non-gross" way takes a combination of gracefulness, creativity and not taking oneself too seriously, while still taking art and music seriously.
Apparently, however, they do resent Amazon for making music available cheaply. Reader Colin points us to a recent article about how Asthmatic Kitty has sent out a letter to fans of artist Sufjan Stevens, complaining that Amazon's pricing is too low and asking people to go to Bandcamp and pay more instead. They do admit to being somewhat conflicted about this, at least:
"We have mixed feelings about discounted pricing," the label explained.
"Like we said, we love getting good music into the hands of good people, and when a price is low, more people buy. A low price will introduce a lot of people to Sufjan's music and to this wonderful album. For that, we're grateful.
But we also feel like the work that our artists produce is worth more than a cost of a latte. We value the skill, love, and time they've put into making their records. And we feel that our work too, in promotion and distribution, is also valuable and worthwhile."
While they're certainly not attacking Amazon or fans, the whole email does feel a little off. The simple fact is, if people want the music (as the label seemed to recognize last year), they can find it somewhere for free. Amazon's prices are meaningless when it comes to the "value" of the music. Price and value are not the same thing. Rather than complaining about the price that Amazon sets on the album, why not give people additional reasons to pay directly at Bandcamp -- such as providing valuable extras if they do. Or discounts on other merchandise. There are all sorts of positive ways to get people to find it worthwhile to spend money without making them feel guilty and bad for paying a price that is legitimately offered by a retailer.
47 Comments | Leave a Comment..
Obama Calls Fox <b>News</b> a `Destructive' Channel - NYTimes.com
President Obama tells Rolling Stone magazine that Fox News promotes a point of view that is "destructive" to the growth of the United States.
Bad <b>News</b>: Yahoo Media Boss Out. Good <b>News</b>: Bartz Won't Have To Ask <b>...</b>
Yahoo's media boss Jimmy Pitaro is quitting the company.
Obama: Fox <b>News</b> is 'destructive' to America – CNN Political Ticker <b>...</b>
(CNN) - President Obama is pulling no punches when it comes to Fox News, declaring the cable news outlet to be "destructive to long-term growth.
halloween costumesObama Calls Fox <b>News</b> a `Destructive' Channel - NYTimes.com
President Obama tells Rolling Stone magazine that Fox News promotes a point of view that is "destructive" to the growth of the United States.
Bad <b>News</b>: Yahoo Media Boss Out. Good <b>News</b>: Bartz Won't Have To Ask <b>...</b>
Yahoo's media boss Jimmy Pitaro is quitting the company.
Obama: Fox <b>News</b> is 'destructive' to America – CNN Political Ticker <b>...</b>
(CNN) - President Obama is pulling no punches when it comes to Fox News, declaring the cable news outlet to be "destructive to long-term growth.
Has a central bank ever intervened successfully in the foreign exchange market when the momentum trade was against it? The yen has been rising alarmingly of late, and now the Bank of Japan is trying to push it down.
At first glance, the action looks like a something-must-be-done-this-is-something -therefore-this-must-be-done move: a new prime minister and a “bold action” doomed to be proved ineffectual. The FX markets are so enormous (dollar/yen alone trades some $750 billion per day) that it’s hard to believe a single sale of less than $20 billion in yen could even have the short-term effect we saw last night, let alone have any lasting consequences.
But this isn’t just about FX-market intervention. This is also about monetary policy, and that could make a real difference:
Unlike in previous forays, the Bank of Japan will not drain the money flowing into the economy as a result of the yen selling, sources familiar with the matter said.
That indicated the central bank plans to use the sold yen as a monetary tool to boost liquidity and support the economy.
Authorities that sell their own currencies to weaken them often issue bills to “sterilize” the funds and keep the excess money from becoming inflationary. In Japan’s case, it wants to promote inflation since the economy has been dogged with deflation for much of the past decade.
“The government’s aim, and the aim of authorities in general, is to add monetary injections to the economy,” Callum Henderson, global head of foreign exchange strategy with Standard Chartered in Singapore, told Reuters Insider.
“Unsterilized intervention should be yen-negative, it should be very bullish for higher risk assets, very bullish for stocks in Japan and obviously it should add to the impact of the intervention of the yen,” he said.
In other words, the Bank of Japan isn’t simply selling yen, it’s printing yen. (And then selling them.) Given (a) that it’s the central bank and that it can print as many yen as it likes, and (b) that it would actually welcome a bit of inflation, there’s actually a non-negligible chance that this kind of non-sterilized intervention could work.
Of course, a hint of inflation in Japan could end up driving Japanese bond yields up. That in turn could make a huge difference to the government’s annual interest bill on the country’s monster national debt. So this kind of policy is hardly cost-free; indeed, the real costs might well be much larger than the nominal size of the intervention. But at least it has a chance of making a difference, which is more than you can say for most currency interventions.
Label Complains That Amazon Devalues Artists By Making Music Cheap
from the you-got-it-backwards dept
This is unfortunate. Nearly two years ago, we wrote about the indie music label Asthmatic Kitty, which seemed to take a really forward looking attitude towards the new music market. In that interview, the label noted the reality of the new world, and why it was important to focus on reasons to buy, rather than assuming that people would just pay to hear music. This is what was said at the time:
I operate under the conviction that people buy records because they want to own them, not because they want to hear them. It is too easy these days to hear a record without having to buy it. I don't resent that fact, rather I feel we at Asthmatic Kitty embrace it through streaming albums and offering several free mp3s (even whole free albums). And why do they want to own it? They want it to illustrate to others their taste and identify who they are as a person. I also believe they want to be part of something bigger than themselves, they want to belong.
Our job is no longer to sell folks things they want to hear. They want an experience and to identify themselves as part of a community. Ownership then becomes a way of them supporting your community through investing in that community. Fostering that in an honest, transparent and "non-gross" way takes a combination of gracefulness, creativity and not taking oneself too seriously, while still taking art and music seriously.
Apparently, however, they do resent Amazon for making music available cheaply. Reader Colin points us to a recent article about how Asthmatic Kitty has sent out a letter to fans of artist Sufjan Stevens, complaining that Amazon's pricing is too low and asking people to go to Bandcamp and pay more instead. They do admit to being somewhat conflicted about this, at least:
"We have mixed feelings about discounted pricing," the label explained.
"Like we said, we love getting good music into the hands of good people, and when a price is low, more people buy. A low price will introduce a lot of people to Sufjan's music and to this wonderful album. For that, we're grateful.
But we also feel like the work that our artists produce is worth more than a cost of a latte. We value the skill, love, and time they've put into making their records. And we feel that our work too, in promotion and distribution, is also valuable and worthwhile."
While they're certainly not attacking Amazon or fans, the whole email does feel a little off. The simple fact is, if people want the music (as the label seemed to recognize last year), they can find it somewhere for free. Amazon's prices are meaningless when it comes to the "value" of the music. Price and value are not the same thing. Rather than complaining about the price that Amazon sets on the album, why not give people additional reasons to pay directly at Bandcamp -- such as providing valuable extras if they do. Or discounts on other merchandise. There are all sorts of positive ways to get people to find it worthwhile to spend money without making them feel guilty and bad for paying a price that is legitimately offered by a retailer.
47 Comments | Leave a Comment..
Obama Calls Fox <b>News</b> a `Destructive' Channel - NYTimes.com
President Obama tells Rolling Stone magazine that Fox News promotes a point of view that is "destructive" to the growth of the United States.
Bad <b>News</b>: Yahoo Media Boss Out. Good <b>News</b>: Bartz Won't Have To Ask <b>...</b>
Yahoo's media boss Jimmy Pitaro is quitting the company.
Obama: Fox <b>News</b> is 'destructive' to America – CNN Political Ticker <b>...</b>
(CNN) - President Obama is pulling no punches when it comes to Fox News, declaring the cable news outlet to be "destructive to long-term growth.
Dr. eric seigerObama Calls Fox <b>News</b> a `Destructive' Channel - NYTimes.com
President Obama tells Rolling Stone magazine that Fox News promotes a point of view that is "destructive" to the growth of the United States.
Bad <b>News</b>: Yahoo Media Boss Out. Good <b>News</b>: Bartz Won't Have To Ask <b>...</b>
Yahoo's media boss Jimmy Pitaro is quitting the company.
Obama: Fox <b>News</b> is 'destructive' to America – CNN Political Ticker <b>...</b>
(CNN) - President Obama is pulling no punches when it comes to Fox News, declaring the cable news outlet to be "destructive to long-term growth.
http://www.businessweek.com/magazine/content/07_18/b4032066.htm
http://www.businessweek.com/magazine/content/07_18/b4032066.htm
http://www.businessweek.com/magazine/content/07_18/b4032066.htm
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm
http://money.cnn.com/magazines/fortune/fortune_archive/1999/10/25/267811/index.htm
http://www.businessweek.com/magazine/content/07_18/b4032066.htm
No comments:
Post a Comment