Stilltitled

Information has three main properties that would seem to cause difficulties for market transactions.

Experience good. You must experience an information good before you know what it is. Response: previewing and browsing; reviews; reputation.

Returns to scale. Information typically has a high fixed cost of production but a low marginal cost of reproduction. Competitive markets tend to push price to marginal cost, which, in the case of information goods, is close to zero. But this leaves no margin to recover those huge fixed costs. How is it that information can be sold at all? The obvious answer is that information is rarely traded on competitive markets. Instead, information goods are highly differentiated.

Public goods. Information goods are typically non-rival and sometimes nonexcludable. Information goods are inherently nonrival, due to the tiny cost of reproduction. However, whether they are excludable or not depends on the legal regime.

The profitability of papers in the late 20th century, when they had a monopoly of classified advertising, was an anomaly. Before that, newspaper barons owned them more to wield power than nurture democracy, while the 18th-century press was as partisan and rambunctious as any bunch of bloggers.

Nor are all papers equally threatened. Business papers, including the FT, have had more success in charging online readers than general-interest publications. Many publishers regret their rush to give everything away on the web but the over-supply of general news makes it hard to backtrack.

When people really want or need something, they will pay for it, one way or another. If today’s publishers cannot convince their readers to do so, they will be overtaken by others that can.

—FT

You have to have some kind of compensation for the use of content that amounts to journalism, or otherwise you’re not going to have journalism
—Bruce Sanford, a media lawyer in Washington with Baker Hostetle

As far as consumers are concerned, the worst is now behind us
—Lynn Franco, director of the Conference Board’s consumer research center

—Present Conditions, increased from 25.5 to 28.9
—Expectation, increasesd to 72.3, the highest level since December 2007

We see no evidence that a recovery in home prices has begun
—David Blitzer, chairman of the index committee at S&P

The housing market still has somewhat of a ways to go before it completely bottoms. Prices I think still will fall a little bit further.
—Celia Chen, an economist at Moody’s Economy.com

There are very few V-shaped recoveries in the history of real estate, and this one is likely to be even slower because of the size of the bubble.
—Robert Shiller

History suggests that new-home sales bottom long before unemployment peaks, and perception of the economy starts to improve long before we see actual economic improvement. This time around we don’t know if that will hold true.

…If you are looking at prices relative to income and rents, you could argue that we are at the bottom, and I’m cautiously optimistic that we may be. It’s possible, however, that we could have a second wave of foreclosures and the very small amount of support the economy might have gotten will turn into the reverse.
—Thomas Lawler, former Fannie Mae economist

-Year over Year – Composite 20 is down 18.7% for March 2009
-Both Arizona and Las Vegas have declined at least 50% from the peak
-San Francisco and Miami have both declined more than 45% from the peak
-NYC is down 2.5% Month over Month, 12% Year over Year, and 20% from the peak
-NYC hit its 33rd month of declines from the peak, which matches the Composite 10. Declines through June would mark the 3 year anniversary of Month over Month declines
-Boston has faced 42 months, or 3.5 years, of declines
-Charlotte, Portland and Seattle have faced the shortest period of declines, with 19 months

The economy is still a scary place. My net feeling is that this rally doesn’t have all that much more to go and the dangers out there remain consequential…Can the stock market do well in a muddling period in the economy, where at best it grows at a percent or two for a period of time? Maybe. But it’s not a period where you see an effusive stock market.
—Michael Steinhardt