Counterparties

By Felix Salmon
February 15, 2011
idiotic press officer: it's the University of Manchester’s Aeron Haworth -- Embargo Watch

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Is it true that the South Street Seaport Museum has closed down Bowne & Co after 182 years? I very much hope not.

Mohamed El-Erian’s moving and heartfelt column on Egypt — FT

Did Ticketmaster really sell only 1,000 LCD Soundsystem seats on the on-sale date when there are 13,000 seats in total? — Lefsetz

Everybody link to the Content Farm! We need to boost its PageRank!

Iran opposition protests — Reuters

Battle of the credit-card concierge services, Valentine’s Day edition. You might be surprised by the winner — NerdWallet

President Obama will present Jasper Johns with the Presidential Medal of Freedom at the White House — LA Times

Ivan Oransky reveals the name of the idiotic press officer: it’s the University of Manchester’s Aeron Haworth — Embargo Watch

Why small IPOs are important, and why they no longer exist — Urgent Speed

Mark Miller has a great column on Social Security scaremongering. It’s not in crisis, people! — Reuters

Mike Elgan: Why Nokia is toast — Computerworld

Bill O’Reilly is Internet Meme du Jour — Geekosystem

9 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

Why the URL shorteners? I like to see the full URLs before I click. Even with the indication of the source that’s listed above, many URLs will give some further indication – via the directory path or file name – of whether it’s worth reading for me. The shortened URLs therefore are annoying, while presenting no advantage to me, the user, that I can see. Please reconsider!

Posted by SBa | Report as abusive

SBa, sorry, I feel your pain, I’m the same way. It’s sheer laziness on my part. I copy-and-paste from my tweets, you see.

Posted by FelixSalmon | Report as abusive

Unrelated to current topics…

We typically assume (with good economic justification) that public subsidies for an industry tend to increase prices. In fact, the public subsidies for college education (especially the student loan system) has been blamed in part for the escalation in tuition costs.

But is this necessarily true? What if we approached this differently? Instead of subsidizing loans, re-commit to investing in our public universities. Cap their in-state tuition/fees at a very low level and negotiate an appropriate state funded budget within which they can offer a high-quality education.

Competitive pressure would then force private universities to keep a lid on their prices. If a good student can attend UMass for $5k tuition/fees, they would have to seriously consider that ahead of attending Williams college at $45k.

Moreover, greater state participation in the funding process would allow targeted investment in those areas that have greater economic utility. A quality university needs to have all areas of study represented, but not necessarily on equal footing.

I doubt the public cost would be any greater, especially since I see this as a redirection of existing subsidies. Student loan subsidies would be RETRACTED from the private colleges and fed back into the public colleges, thus increasing the competitiveness of the public system on both ends.

Finally, even if the public cost WERE greater, it would be borne by the middle/upper classes (since they pay the bulk of all taxes) who would in turn benefit from reduced college costs. So the societal cost would likely decrease.

To summarize:
* High-quality public universities, cheap or free to appropriately qualified students.
* Withdrawal of loan subsidies for private universities. They can sink or swim on their own.

Does this make sense?

Posted by TFF | Report as abusive

Felix,

Are we really to believe that Social Security isn’t a problem because they have bonds they can put to the Treasury? If the Treasury has to give them money for the bonds, where does it come from? If they can give them scrip to pay beneficiaries, I guess the US government is okay, but Social Security beneficiaries are going to be sort of disappointed.

Posted by Eric_H | Report as abusive

Felix,

Here’s a counterparties suggestion: http://www.reish.com/publications/pdf/he uristics.pdf

There’s quite a few stomach churning findings about how poorly average Americans and Nobel laureate winners handle their retirements. It’s full of win such as:

-”employees who receive their employer matching contribution in company stock view their employer’s decision to match in company stock as implicit advice”

-”It turns out that most of the supermarket employees considered the store butcher to be the investment maven and would turn to him for advice” [across multiple stores in the chain.]

Posted by dtc | Report as abusive

Of no import whatsoever: Jasper Johns is my wife’s fourth cousin twice removed, or thereabouts.

Posted by dWj | Report as abusive

By the way, your phrasing “Did Ticketmaster…” could be interpretted as putting fault on Ticketmaster. But maybe… just maybe… it’s the band!

Here’s the latest from the LefsetzLetter mailing list (worth joining to get the scoop on what’s broken in the music industry):

>>>>>>>>>>>>>>>>>>>>
(Note: I post the following letter for the viewpoint, not because I endorse the content.)

Subject: LCD Sound Fiasco- The REAL Truth

Bob,

I read your comments on the LCD fiasco. All the fans think there is a conspiracy. There might be but NOT where you think it is coming from. Try this order of events and follow the logic.

1) Take a band that wants to retire and go out with a bang.

2) The band has a good following, but, with the exception of festivals has never played for an audience of over 4,000.

3) You hire your promoter (The Bowery Presents) to book the #1 venue in NY (MSG) with a capacity of about 19,500 (including rear stage).

4) You have an old fashioned wait on line really early / overnight and get tickets at the Bowerys venue and make your fans wait out in 15 degree weather.

5) You sell tickets to serve less that ? of the people on line that line, leaving fans unhappy, creating buzz and tweets and blogs.

6) At the same time, you have an online presale and sell about 4K of the tickets in the venue. You know it’s your last show and you know it will sell out.

7) You post on social media a la Sally Field You like me, you really really like me, and how humbled you are by all this you never realized how much the fans love you

8) You then have a Public sale for your tickets.

9) Remember, the PROMOTER controls the tickets and says what gets sold and how. So you sell no tickets on the public sale (except the Amex seats. Those were sold and HAD to be sold via contractual obligation with Amex)

10) You watch the prices skyrocket on StubHub as your fans that YOU let get shut out now have to buy at higher prices on the secondary market.

11) You put out angry tweets about how evil the scalpers are for buying all your tickets. You blame everyone’s favorite scapegoat for the problems YOU created and you unite your fans against a common enemy. At the same time, you now have a buzz about you that you are more popular than you really are. There is nothing like people not having something that makes them want it more.

12) You then, while cursing your common enemy, announce that you are putting 4 shows on sale. And these are scalper-proof by making everyone pickup the night of the show. BUT you need to keep your word that the 4/2 show is the last show so you need to book shows backwards.

13) You need a venue? No problem. One of the venues your promoter books Just by 100% coincidence just happens to have those nights just before.

14) All the fans that got shut out (and those that had no idea what an LCD was besides a Liquid Crystal Diode) but now know about it from all the free press from all the demand you created. You even complain about some tickets offered for sale at $35,000 on stubhub. Anyone with a credit card and an internet connection can post on StubHub. Why not put them up yourself and garner more free press by complaining about it?

Here we are now. Here is where we go next:

15) See 13 above. Those 4 shows will sell out because of that loving fan base you created will buy and you will add more backwards. Your promoter will get you the dates. The by 100% coincidence just happen to have that venue open for you. You continue to add shows. There are 12 days in a row that Terminal 5 is dark. They can (and probably will) add them all. Lets also realize that Terminal5 is the Marquee venue of the promoter Bowery Presents, so THESE shows will turn profit, while MSG is all about PR & break even at best.

16) But what about all those seats you have on hold? You either release the remaining seats into TicketMaster over the next month and a half or sell them on StubHub yourself.

17) As supply enters the market place in the secondary market, the market price goes down to where it probably should be. The lead singer said don’t overpay for your ticket, he isn’t worth it? He’s actually right.

Here are some points to note:

The capacity of MSG is 19,500. With the rears & tech kills, it is about 16,000. Not 13,000 as claimed by the lead singer.

Amex seats MUST be sold by contract. Public sale seats are at the discretion of the promoter). I know 2 people that were 1st at a TicketMaster outlet (faster than online, but only for the 1st person on the line) and it was gone before they got any tickets. If they sold any quantity of public sale tickets, they would have at least been offered SOMETHING.. He didn’t even get offered a set of tickets to throw back. If they sold the same number of tickets on the presale as the public sale, they would have at least been offered something. I was able on a 3G connection (far slower than being at a TM outlet) able to pull up a set of Amex (not public sale allocation) reserved floor seats myself.

Terminal 5 is always busy. 4 to 6 nights a week, every week. Strange that it is dark for 12 days straight. It’s NEVER dark for that long, so its safe to assume Terminal 5 dates were part of this dog & pony show all along with the secondary market as the scapegoat to enable this miraculous offer to fans StubHub saw no appreciable increase in supply after the public sale.

Which is more likely? A bunch of scalpers conspired to buy up all the tickets and then not post them for sale?
Or what I said above?
You decide for yourself.

Please withhold my name as I don’t want to be part of their continued false witch hunt!

Thanks Bob!

Posted by dtc | Report as abusive

Re: the urgent speed post. Is there any possibility that financial innovation has reduced the need for IPOs in an organic sense? Groupon, Facebook, and other tech companies don’t seem to be having a very hard time raising capital…why is this worse than IPOs?

Posted by georgepearkes | Report as abusive

Oh, just add further to the ticketing thing – I’ve been suspicious of the artist/promoters ever since an incident in 2008 where I snatched up an impossible to get ticket for Billy Joel’s Last Play at Shea. I thought it was really strange to have a concert on a Wednesday.

Sure enough, 2 days later he came out blasting scalpers for denying fans a chance to get tickets. And as a courtesy to his fans, he was going to have 1 more day – on a Friday.

How convenient.

Posted by dtc | Report as abusive