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Will You Support Net Neutrality for Your House or Apartment Network?

Mark Cuban|May 6, 2010|

Net Neutrality. At it’s most basic, its the principle that all internet content sources and applications have equal access to the internet, and to all internet subscribers, including you. And that no internet provider can price access to the internet to give one source or application over another. The internet has been a free for all, and as far as the Net Neutrality supporters are concerned (and I’m not arguing one way or the other here), that is the way it should always be.

But what about in your house or apartment? Do you want all applications running on your XBox/PS3/WII gaming devices to be treated equally with the applications running on your Roku/Tivo Premiere/Media Server to be treated equally with the applications running on your PC/Laptop to be treated equally with your new HDTV that has wireless internet access? Or would you want to give priority to one application over another? Do want the content you just paid for to be interrupted by the email being downloaded with the huge attachment some idiot just sent you?

Do want the streams from Netflix (NFLX) coming to the TV in your bedroom through your PS3 to be treated equally with the bandwidth needed for your 7 year old little sister/ daughter playing on Barbie.com to be treated equally with the streams of Mom/Dad/Husband/Wife/Significant Other watching Totally Rad on Revision 3?

If you don’t, how are you going to fix this problem?

If you think fighting over the remote control, or which show gets DVRd at 8pm on Sundays is bad, you ain’t seen nothing yet.

I got news for everyone, the bandwidth in your home is more limited and more variable and harder to manage than the bandwidth coming into your house from the internet.

How many of you are up to speed on network management for the wireless router you have in your house? What about those of you with more than one router and no idea how they connect? How many of you want to know what network management is?

Are we going to see an Iphone/Ipad app for managing network resources or will families just post who gets access to bandwidth on a note on the fridge?

6pm Joanie gets to play Barbie.com while johnny downloads and uploads your homework (yes Johnny, it means you have to be done by 7pm sharp young man !)

7pm Mom gets to look up her real estate listings and download and upload whatever pictures she needs. She also has those videos she took on the Flip she got for Xmas that she wants to upload to Filesanywhere.com and to Picassa. EVERYONE PROMISES not to be on the network from 7pm to8pm. These are movies and pictures from the pageant that are going to end up in those stupid books she gives all of us on our birthdays. You know how annoyed and flustered mom gets if something times out. Johnny, I’m talking to you. I’m not going to show her how to restart those stupid uploads any more.. Unless she pays me 5 bucks like last time, right mom :)

8pm Game Time. Kids get to play whatever games, or watch whatever they want to watch ON THEIR OWN BOXES. Joanie, that means no XBox. You wanted a WII and we got you one. You can use the family PC to watch videos on Youtube if you want, but ONLY on the playlist that dad and I put together for you. Clear ???

9pm Dad gets to watch those old movies from Netflix. When he is done, he is going to do the backup

11pm Backup all the PCs time. Remember, if you want everything backed up, you have to stay off the network. You know how dad gets if all his new stuff doesn’t get backed up every night.

You can watch regular tv on the tv in the living room or your own room anytime you want.

Any requests for changes to the schedule have to be in before Johnny leaves for school in the morning.

You get the idea.

Like they said in Seinfeld, you will have to be ”The master of your own domain “. Being a network manager is not an easy job. Just ask your cable or telco internet provider. Yet that is the exact job you are looking to undertake .

Anyone out there think provisioning bandwidth at home is easy ???

How Do You Spell W Again?

Macro Man|Jan 22, 2010|

Wow.

Was yesterday a game-changer? It certainly carried all the hallmarks of one. The SPX broke its uptrend line off the March lows, and while that’s only moderately interesting (given the number of similar such lines that have been breached during the 10 month rally), the fact that daily futures volume exceeded anything seen last year (even into the lows) was telling.

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How Do You Spell W Again?

The catalyst, of course, was Obama’s proposed “Volker Rule” to ban banks from owning/investing in hedge funds/private equity or even from proprietary trading. Now, Macro Man is hopelessly compromised here, as such proposals (if enacted) would be detimental to his profession.

And while it is probably imprudent to comment too much until the details are known, on the face of it such a draconian approach is both woefully misguided and appallingly naive. We can probably all agree that it’s in no one’s best interests to have a situation where a Lehman Brothers owns $50 billion+ in residential and commercial real estate turds, which brings down the firm and threatens the global financial system.

But there’s a big difference between that and having a team of punters (not dissimilar to your author) who coordinate and utilize the market intelligence available to large banks (which is enormous and extremely valuable) to make informed bets in the marketplace. Trying to ban such activities will, in any event, almost certainly be doomed to failure, as swathes of prop guys could simply be stashed away on franchise desks. Indeed, part of being a good franchise trader is to have a view and take prop risk anyways, so how could the Federales credibly eliminate it when it is all part and parcel of “serving the customer”?

Moreover, let’s not forget that it was proprietary trading- namely, the top-down decision to hedge against a subprime collapse- that helped save Goldman’s bacon in ‘07-’08. Sure, the Feds stepped in when the crisis went nuclear, and yes that intervention to save the system may well have saved GS….but that doesn’t mean that there was no utility to their top-down decision to take a “prop bet” to hedge against subprime.

In any event, Goldman’s decision to donate $500 million to the Human Fund clearly wasn’t enough to spare the firm from Obama’s ire, let alone the public’s. They clearly know which way the wind is blowing, however; the firm paid out just 36% of revenues in employee comp for 2009. That’s loads less than other “human capital” intensive industries like sports or entertainment, and miles less than Morgan Stanley, which paid out 62% of revenues in employee comp. Morgan Stanley, incidentally, lost money last year, precisely because of these princely wage awards. Regardless, slashing the bonus pool to boost earnings did little for the GS share price; courtesy of Obama, the stock price fell sharply on its highest volume since last April.

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How Do You Spell W Again?

Now, let’s be clear: there is plenty to dislike about the way banks have conducted business over the past eighteen months, and things should change. Perhaps these proposals are simply a cack-handed way of re-introducing Glass-Steagall (i.e., dividing banks into commercial and investment banks) without literally re-introducing Glass-Steagall. Perhaps they’re even intended to encourage the likes of GS to re-privatize into partnerships. Macro Man has gone on record suggesting that both of these are desirable outcomes from a systemic perspective.

Surely the thing to do, however, is to impose top-down leverage limits and, within that construct, allow firms to get on with their business as they see fit. Trying to micro-manage the business of banking by creating lists of allowable activities is decidedly substandard. Of course, the policy was likely driven by populist impulses in the wake of the Democrats’ shocking defeat in Massachusetts, and as we know the public’s grasp of nuance leaves something to be desired (nearly 20% of the American public reportedly believe that the sun orbits the earth, for example.)

Regardless, when drastic populist policies are proposed (though perhaps not implemented; Macro Man’s been surprised at the relatively unenthusiastic legislative reaction thus far), the result is generally suboptimal outcomes. If yesterday really was a game-changer, perhaps it’s time to start dusting off those W-shaped forecasts (or even the Cyrillic letter I shapes?!?!) for risky assets.

Rumblings of Chinese tightening do not help, nor indeed does the apparent waning of developed market growth momentum. The Citi major economy surprise index, for example, looks to be tracing out either a W or a И shape.

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How Do You Spell W Again?

Hmmmm…a tepid economic recovery, a suboptimal, populist-driven policy reaction to a market crisis, and an equity dump after it felt like the worst had passed. How do you spell W again?

Wistful, Slightly Bitter, and More Than A Little Jealous

Macro Man|Apr 14, 2009|

Sigh. If only Macro Man had been able to hire Costanza over the weekend.

For if he had, then ol’ George would have told him that the clear response to a country reporting a -19.7% saar GDP figure in Q1 and adjusting its exchange rate peg lower would be to buy as much of that currency as you could get your hands on.

In all the years that Macro Man’s been in the market, he can’t ever remember a GDP print as low as -19.7. That’s the economic equivalent of getting hit with one of those Hollywood movie asteroids, the eruption of Krakatoa, a 9 Richter-scale earthquake, and the Great Fire of London….at the same time!

And so it’s happened in Singapore. As a reaction to the shock hitting the economy, the MAS re-centered the SGD band at the level prevailing last night: a modest step lower in the SGD. However, they didn’t widen the band, and perhaps more importantly warned about “undue” weakness in the SGD.

SGD

Now, from Macro Man’s perspective, when you’re hangin’ a minus twenty on GDP (-11.5% y/y), the only “undue” weakness in your currency is if it dispensed in lieu of Charmin in public lavatories. Anything short of that falls within the bounds of reason. Still, with the market rather short of SGD, we were treated to another Costanza-like reaction of the SGD screaming higher on a shocking growth figure and a SGD band re-centering.

Meanwhile, back in the US, Goldman Sachs (GS) recorded super earnings in the first part of the current fiscal year, announcing Q1 earnings of $3.39 per share, well above the consensus expectation of $1.64. Except that they didn’t. Buried in the small print, it appears that as the Easter Bunny was delivering candy and eggs to children all over the world, he also desposited a small turd in the GS income statement. In December, which magically falls outside the aegis of any reporting period (falling through the cracks, as it were, in the transition from investment bank to bank holding company) , the firm lost $2.15 per share. Add that to the Q1 earnings figure, and you get a result that is comfortably lower than consensus.

More telling was the GS announcement of their intention to sell shares to the public. While Macro Man occasionally takes Goldman to task, he will happily concede that, individually and collectively, they are some of the smartest guys on the street. And when a smart guy offers to sell you something in an industry that has more than doubled in value over the past month….well, judge for yourself what the appropriate response is.

BKX

All of this has left Macro Man wistful, slightly bitter, and more than a little jealous. His carefully-laid plan to reach a P/L summit this month has ended with his portfolio nursing a broken leg back in base camp. Adding insult to injury, he doesn’t work for an institution where he has the option of valuing his book using a model derived from those titans of modern finance, Andersen, Grimm and Grimm.

Perhaps its the accumulated fatigue of the last month’s trading, or perhaps its the literal tiredness from getting Costanza’ed in the wee hours of the night by the market and the MAS. But your humble scribe is suffering from a deficit of both conviction and performance, and could use a few more data points.

In the meantime, it’s back to the drawing board for Macro Man. He really needs to find a market where they’ve never heard of Seinfeld.

Microsoft Drops Seinfeld from Vista Commercial

Ron Haruni|Sep 17, 2008|

Well, in a way this was sort of expected. According to Valleywag – Microsoft (MSFT) apparently faced with criticism has decided to pull its TV ads, featuring comedian Jerry Seinfeld and Microsoft’s co-founder Bill Gates, aimed at helping the Redmond-based co. polish the tarnished brand of its Windows Vista OS.

Microsoft spokesman Frank Shaw confirmed today the software giant is not going on with Seinfeld, but said the end of the Seinfeld ads was planned well in advance. What wasn’t planned probably, was a head-scratcher of a commercial played by Seinfeld who reportedly received $10 million just for flexing a pair of new shoes. During the entire spot between him and Gates there was no mention of Vista. How people can make the connection between a pair of shoes and an operating system is beyond me. Microsoft is expected to announce the second phase of their $300 million marketing campaign, sometime tomorrow.

Update: NYT reports Microsoft’s campaign will begin Thursday and will carry the theme Windows. Microsoft plans to take direct aim at Apple’s “Get a Mac” ads in which John Hodgman plays “PC” opposite Justin Long as “Mac”.

Microsoft Delivers First Gates/Seinfeld Commercial

Ron Haruni|Sep 5, 2008|1

Maybe it’s just me. But in all honesty, I simply don’t see the humor or whatever else this video is trying to convey. And again, I might be wrong here – but if the objective of Microsoft’s $300 million marketing campaign is that of rejuvenating the brand image of Windows – than they should come up with better spots and better jokes from Seinfeld. For crying out loud, the guy is getting $10 mln bucks and he ain’t even funny.

If the campaign is devised toward such a dull, humorless and secco concept – as the one presented in this first spot — well, let’s just say the campaign might make sense in some alternate universe.