Sobering story in Bloomberg on Sunday on just how bad things could be should the U.S. default on its debt obligations this month:
Failure by the world’s largest borrower to pay its debt — unprecedented in modern history — will devastate stock markets from Brazil to Zurich, halt a $5 trillion lending mechanism for investors who rely on Treasuries, blow up borrowing costs for billions of people and companies, ravage the dollar and throw the U.S. and world economies into a recession that probably would become a depression. Among the dozens of money managers, economists, bankers, traders and former government officials interviewed for this story, few view a U.S. default as anything but a financial apocalypse.
The $12 trillion of outstanding government debt is 23 times the $517 billion Lehman owed when it filed for bankruptcy on Sept. 15, 2008. As politicians butt heads over raising the debt ceiling, executives from Berkshire Hathaway Inc.’s Warren Buffett to Goldman Sachs Group Inc.’s Lloyd C. Blankfein have warned that going over the edge would be catastrophic.
Also in this story: some talk about how we might mitigate some of the damage should we go into default, including that it might be a “technical default.” As in, we’ve got the money, we just don’t want to pay. But that does little to allay concerns that the U.S. is no longer a safe haven for investments.
So yeah. Totally no bigs. Holding the debt ceiling hostage? A perfectly acceptable way to govern.
Steve Jobs’ 2007 WWDC keynote is a must-watch for several reasons. First, it was when Jobs introduced the very first iPhone, changing the mobile devices and personal computing industries forever and setting Apple on path to becoming one of the most valuable and powerful companies in the world. Second, it’s Jobs at his absolute keynoting best: a fun, flawless product demo that ultimately delivered on nearly every promise. (Yep, the technology really was five years ahead of everyone else.) Even today, nearly seven years after the fact, it makes for compelling viewing.
It’s even more fun now that we know more about the story behind the demo. In Friday’s New York Times, Fred Vogelstein publishes an interview with Andy Grignon, a former Apple engineer in charge of iPhone connectivity (cellphone radios, Bluetooth, Wifi). And on the eve of Jobs’ now-famous iPhone demo, Grignon wasn’t feeling very good about the infant product:
It’s hard to overstate the gamble Jobs took when he decided to unveil the iPhone back in January 2007. Not only was he introducing a new kind of phone — something Apple had never made before — he was doing so with a prototype that barely worked. Even though the iPhone wouldn’t go on sale for another six months, he wanted the world to want one right then. In truth, the list of things that still needed to be done was enormous. A production line had yet to be set up. Only about a hundred iPhones even existed, all of them of varying quality. Some had noticeable gaps between the screen and the plastic edge; others had scuff marks on the screen. And the software that ran the phone was full of bugs.
The iPhone could play a section of a song or a video, but it couldn’t play an entire clip reliably without crashing. It worked fine if you sent an e-mail and then surfed the Web. If you did those things in reverse, however, it might not. Hours of trial and error had helped the iPhone team develop what engineers called “the golden path,” a specific set of tasks, performed in a specific way and order, that made the phone look as if it worked.
I’d be lying if I said my stomach wasn’t in knots reading this story. Awesome ending, though. Read the whole thing then watch the keynote again. Unbelievable.
Plus, the Arkansas Times’ David Ramsey, independent journalist Rick Fahr and I talk about the week that was in health care, the government shutdown and looming debt ceiling debate.
After an unusually long hiatus, I’m pleased to be back on AETN’s “Arkansas Week” tonight along with host Steve Barnes and fellow panelists Steve Brawner and Doug Thompson. Tonight, we assess the continuing budget/debt ceiling/Obamacare standoff in Washington D.C., the latest Mark Pryor/Tom Cotton skirmish, what’s next in the University of Arkansas Advancement Division deficit snafu, the continuing adventures of Paul Bookout/Mark Darr, the economy, bank mergers and more.
You can tune in at 8 p.m. tonight or catch the replay online right here once it’s posted.
Update: Here’s the full show, embedded after the jump.
Me today, over at the day job, assessing data miner Acxiom Corp.’s AboutTheData.com, a website designed to allow people to see what information the company has collected about them:
Best I can tell, Acxiom has a fairly good picture of me except for two key things: my birthdate and my family situation.
For some reason, Acxiom thinks I was born in 1955, which would put me at 58 years old — 22 years old than I actually am. A little icon next to that data says the source for that information is “self reported.” So maybe I gave bad info on a survey once? My parents are about that age, so I also wonder if some of their data got mixed up with mine. But there’s no way of knowing, and of course I can correct it.
Acxiom also thinks my wife and I have exactly “1 Child.” We have exactly zero. I can correct that information, too.
Otherwise, the data Acxiom has amassed about me and my household is very nearly on the money, albeit in a very general way.
More on Acxiom’s motives for setting up the site in my interview with THV 11 News here and, of course, this interview with company CEO Scott Howe in the New York Times here. In short, Acxiom is striving for transparency to allay public fears about data privacy and head off a regulatory push in Congress.
August on the lake in Arkansas. After a big summer rain shower, the clouds rolled over, the sun set and bam! This.
Calico Rock, Ark., last weekend.
A couple of days after the New York Times unloaded the Boston Globe for a song, Jeff Bezos of all people comes along and buys The Washington Post from the Grahams for $250 million:
Bezos, in an interview, called The Post “an important institution” and expressed optimism about its future. “I don’t want to imply that I have a worked-out plan,” he said. “This will be uncharted terrain, and it will require experimentation.”
This might very well be a good idea. If Bezos is willing to run the Post like he runs Amazon — that is, on razor-thin margins or outright losses for years — this could be a match made in heaven. By all means, experiment like hell and play the long game. Maybe we’ll all learn something.
Congratulations to Dustin Bartholomew and Todd Gill, who are approaching the five-year anniversary of their hyperlocal news site The Fayetteville Flyer. They talk to Paul Gatling of the Northwest Arkansas Business Journal for this cover story on the business, which began in 2007 as a niche site about local music and bands and exists today as the go-to news site for everything that’s going on Fayetteville.
Bartholomew and Gill, former ad executives of Cranford Johnson Robinson Woods, say the site is generating 190,000 page views and between 50,000 to 60,000 unique visitors per month. And they are determined to keep the site free to readers, relying completely on advertisers to support the business:
Today, there are about 45 businesses who advertise on the website.
Those sponsors sign a one-year renewable contract to place ads on the site. The cost? $300 per month, or $3,600 per year.
There are another 10 or so regular advertisers who purchase banner ads through other, short-term advertising options.
“The 45 [sponsors] are what we rely on to keep the business stable; to keep the paychecks coming in,” Gill said. “We know that we can continue going out and bringing in news without wondering if we’re going to be able to sell banner ads this month.”
Those sponsors have been particularly loyal. Gill says it’s rare that one doesn’t renew. And there’s this anecdote, which should send a chill down the spine of the newspaper guys:
Fayetteville-based restaurant chain Slim Chickens is one of the Flyer’s longtime advertisers.
Chief marketing officer Greg Smart said the company’s advertising with the Flyer tend to be more specific to products or promotions.
Slim Chickens no longer advertises with daily newspapers.
“It’s just not cost effective,” he said. “This is really a more affordable option and it’s been a way for us to stay relevant on a hyperlocal basis. I wish there were other [websites] like the Fayetteville Flyer in our other [restaurant] markets.”
That’s a pretty high compliment from an advertiser. Also noted: Bartholomew and Gill say the Arkansas Democrat-Gazette paywall is a great equalizer as the Flyer, with a fraction of the daily paper’s resources, competes for local news readers.
You can read the complete Northwest Arkansas Business Journal story on the Fayetteville Flyer right here. And of course, the Fayetteville Flyer is always online here.