Rolfe Winkler

(Send links, videos, pics to optionarmageddon at gmail with subject “link” … Thanks to Kay B.—$20—for her donation!)

Today’s Must-Read: Welcome to America, The World’s Scariest Emerging Market (WaPo)  One of the best op-eds I’ve read recently.  Back in September, OA published an op-ed in the Baltimore Sun comparing the U.S. to Argentina.  The comparison grows more apt with each passing month…

A Second Must-Read: How FDR promoted Price-Gouging (Jim Powell)  The CATO Institute Scholar notes how many of FDR’s New Deal policies were price-fixing schemes designed to protect existing business/investor interests at the expense of consumers.  Obama (and Bush before him of course) is doing the same, with an assist from Ben Bernanke: artificially suppressing the price of credit in order to support asset prices while pumping billions of taxpayer dollars to favored industries.  Obama would do better to emulate the other Roosevelt—trust-busting Teddy…

Merkel Stops Global New-Deal (Times UK)  The German Chancellor is emerging as the most sensible voice among the world’s leaders.

Tumbling Tower of Babel: Subprime Securitization and the Credit Crisis (Financial Analysts Journal)  A comprehensive view of how securitization contributed to the housing bubble and bust.  Long, wonkish and dry, but has LOTS of really good data.

Is There Any Gold Inside Fort Knox? (Times UK)  It’s been awhile since the facility was audited.

Newspapers last bastion against political corruption (Guardian)  An interview with David Simon, former Baltimore Sun reporter and creator of the greatest show I’ve ever seen on TV: The Wire.  He’s right to bemoan the fall of journalism.  Who will guard the guardians?  My hope is that a new model will emerge, perhaps along the lines suggested by reader Tony R.  I’ve reprinted his idea in full below today’s video.

HuffPo launches journalism venture (Breitbart)  Arianna Huffington says she’s now bankrolling a group of investigative journalists.

A video short to brighten any day (dsmCity.com)

A fine piece (from Al Jazeera) about the impact of the economic crisis on Chinese workers:

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How’s this for a Hail Mary for the newspaper industry?

What if Amazon’s Kindle really takes off? If it does, then is it possible newspaper readers would be willing to pay for their subcriptions to be delivered electronically via the Kindle? What’s more, could the newspapers even subsidize the cost of a Kindle in exchange for a 2-3 year subscription? Some of the major newspapers (WSJ, NYT, WaPo, et al) might have a 10% chance of making this work, as opposed to a 0% chance of making their existing business models work long-term.

I know news is free online, but if readers could be conditioned to pay for newspaper subscriptions via Kindle then a new market for news content could develop. Why do we pay for text messages but not for e-mails? Because the wireless companies set up the text messaging market in a way that benefits them and to which we are now conditioned. It’s possible Amazon and the newspapers could do the same with Kindle. Newspaper subscriptions via Kindle currently cost about $10/month, or ~$120 per year. IF the newspapers could eventually ditch their newsprint and distribution costs and go exclusively via Kindle they could run profitable businesses off a much smaller revenue base. They could even potentially get rid of most advertising.

It’s a complete Hail Mary and the fact that readers are now conditioned to seek free news via the Internet is a major impediment, but this is still probably the most interesting idea I’ve heard in years for how the newspapers could survive. The Economist ran an article positing a somewhat similar idea just a few weeks ago and I’ve talked to a few ther people who have added helpful ideas to that concept. Just a crazy ass idea to chew on.

As an aside, I’d note that I’ve heard Amazon’s true target market for the Kindle has nothing to do with newspapers and everything to do with schools and the broader education/educational book publishing industry. Interesting. We’ll see if they can get anywhere before Apple potentially comes in a steels the market.

Tony