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December 20, 2014

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Posted: 20 Dec 2014 12:06 AM PST

Regulation of the Financial Industry

Posted: 19 Dec 2014 12:08 PM PST

Is the financial industry is winning the war over regulation?:

Volcker lambasts Wall Street lobbying, FT: Paul Volcker, the former Federal Reserve chairman, has lambasted the "eternal lobbying" of Wall Street after regulators granted the industry more time to comply with a rule designed to prevent them from owning hedge funds.
In a withering statement ... Mr Volcker said: "It is striking, that the world's leading investment bankers, noted for their cleverness and agility in advising clients on how to restructure companies and even industries however complicated, apparently can't manage the orderly reorganization of their own activities in more than five years."
"Or, do I understand that lobbying is eternal, and by 2017 or beyond, the expectation can be fostered that the law itself can be changed?"
The Fed and its fellow regulators this week gave the banks until 2017 to comply... Banks had been supposed to comply by next year. The law containing the Volcker rule was passed in 2010. ...

Digitized Products: How about just giving up?

Posted: 19 Dec 2014 11:20 AM PST

Joshua Gans:

Digitized Products: How about just giving up?: In a very interesting talk, music producer, Steve Albini, reviewed the impact of the internet on the music industry's woes. ...

From my part, I believe the very concept of exclusive intellectual property with respect to recorded music has come to a natural end, or something like an end. Technology has brought to a head a need to embrace the meaning of the word "release", as in bird or fart. It is no longer possible to maintain control over digitized material and I don't believe the public good is served by trying to.

Basically, he is saying that the whole notion of getting people to pay for music itself that they want to listen to at their leisure is not worth pursuing.

What I like about this analysis is that it gets us to fundamentals. In music, there are people who want to supply music and there are people who want to listen to it. The problem is that the competition for listener's attention is intense. That's the core of the economics of the industry. If there is a fundamental imbalance in competition — in this case, favoring listeners — you can't assume that suppliers will get much. Unless, of course, the suppliers can supply something else that is scarce — for instance, connections through online communities or, mostly likely, through concerts. The Eagles — yes, The Eagles from the 1970s — earned $100 million last year. I don't recall any Number One albums from them. It was all from other stuff.

Last time I saw the Eagles live was "A Day on the Green" at the Oakland Coliseum long, long ago (I think it was 1975).

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