Stilltitled

It’s really quite rational for somebody like Goldman, who of course made a lot of money on the backbone of risk coming into the crisis, after being bailed out, to increase risk as a natural extension of that strategy. The government has created those incentives.

It would be disingenuous to ignore the government assistance in helping to generate those earnings. Those institutions, especially Goldman, played their cards really beautifully obtaining that assistance and using that to help them weather the crisis.

—Joseph Mason, a banking professor at Louisiana State University in Baton Rouge who previously worked at the U.S. Treasury’s Office of the Comptroller of the Currency

I think the market got a little bit ahead of the economy. I do not think the recovery is faltering. If you look at the projections that were made in December of last year, we’re right on track.
—James Bullard, President, Fed Bank of St. Louis

all the big negatives for the economy are becoming much less negative
—Mark Zandi

Things are bottoming out, and they are even coming back in some sectors…I’d mention the automotive sector [as one area that is starting to recover]
—Klaus Kleinfeld, CEO of Alcoa, Bloomberg Television interview on July 7.

When Medicare reduces its payments to doctors, it rations money to them. It does not directly ration the health care the doctors might render patients.

If physicians refuse to treat patients at the lower fees, it is they who ration health care, even if the incentive to do so came from Medicare.
—Uwe Reinhardt on compensation in medicine

Be careful investing here
—Rupert Murdoch on Twitter

I don’t know if it’s monetizable.
—John Malone on Twitter

Hell no. Facebook is like a directory. How they make money is another matter
—Rupert Murdoch, on selling MySpace. Instead he emphasized turning it into the preeminent entertainment portal

FT

look at the industry and gauge the extent to which there are network effects and the extent of switching costs, and build your strategy around this

People are always talking about information overload, and the quantity of information on the internet, but the real change is that the cost of accessing information has fallen dramatically

[Supermarkets] are saving hundreds of thousands of dollars per store on broadcast newspaper adverts.

—Hal Varian, from the website for his and Carl Shapiro’s book, Information Rules. Varian points to the use of IT by supermarkets which analyze consumers’ buying habits and then offer them price discounts on an individual basis, via direct mail or with coupons on the back of their receipts.

It’s not an economic downturn, it’s an opportunity. I’m not going to minimize what’s going on in the economy, but it’s exciting and the entrpreneurial spirit in this country hasn’t changed.”
—Herb Allen III

Mr Anderson believes that this allows the vision of the French economist Joseph Bertrand to be fulfilled. As companies compete vigorously, prices fall to just above the marginal cost of production. Since the marginal cost of making a piece of software is zero, and the cost of digital distribution is zero, prices ought to fall to free.

His vision has two flaws. First, as Hal Varian, Google’s chief economist, has pointed out, network effects unleashed by digital technology tend not to spawn free competition among equals but a “winner takes all” effect in which a single company emerges with all the spoils. In the software era, that company was Microsoft; in the internet era, it is Google.

The second flaw is that, even if the cost of digital distribution is lower than that of physical distribution, the marginal cost of production is not cut to zero. Companies have many costs, from marketing to employing people to make things. Offering things free on the internet is loss-leading just as surely as handing Jell-O recipe books to American housewives was in 1904.

—FT: John Gapper

AVC: Fred Wilson

New Yorker: Malcolm Gladwell

As with so many other things, we don’t want to know.
—Bob Herbert on MJ