Ed’s Daily Notes for May 22nd   Leave a comment

Bloomberg: Bubble States Have Underemployment Rates Haunting Yellen

Residents of the U.S. states that suffered the steepest home price declines and record foreclosures face labor markets that remain impaired five years after the most severe recession since the 1930s ended.

Underemployment, including those in part-time jobs who want full-time work, remained highest in 2013 in Nevada, Arizona, California and Florida, with those states also seeing some of the steepest increases since 2007, an analysis of data from the U.S. Bureau of Labor Statistics shows. Oregon also has one of the highest rates.

“That tells you we still have a very weak economy with lots of slack,” said Peter Diamond, a professor at the Massachusetts Institute of Technology in Cambridge who won the 2010 Nobel Prize in economics. The labor market “has improved a lot from the depth of the Great Recession” though “in previous recessions would still be viewed as bad as it gets.”

The weakness supports Federal Reserve Chair Janet Yellen’s view that the unemployment rate decline to 6.3 percent from 10 percent in October 2009 can’t be relied on as a sole indicator of progress.

I have to give Yellen credit for being open to looking at the numbers differently. However, anyone who looks at the U.S.’s underemployment number of 18% and says the economy is fine, or even good, is smoking hopium.

New York Times: Google S.E.C. Filing Says It Wants Ads In Your Thermostat and Car

Now for the truth behind Google’s strategy:

According to a December letter sent to the Securities and Exchange Commission, which became public on Tuesday, Google hopes to put ads “on refrigerators, car dashboards, thermostats, glasses, and watches, to name just a few possibilities.”

How would this work? Imagine that it’s a cold winter day. The snow starts floating down, a wind kicks up and you go to your thermostat to kick up the heat. In Google’s world, that action could be met with an advertisement on your thermostat for a new wool sweater.

Google said in its S.E.C. filing that this plan to advertise in places beyond the desktop and cellphones came about partly because the company expects people to be using several different kinds of Google services and products in the near future. If that is the case, which it probably is, the company said its advertising would be able to follow customers between those experiences.

Business Week: Spotify Hits 10 Million Paid Users. Now Can It Make Money?

The article above is a must-read for anyone who is looking forward to a Spotify IPO. Would you buy stock in a company that loses more money as they get more revenue? I would be willing to take a chance on Spotify, mainly because I like their service. Also, I think they will inevitably have to change the way they pay royalties, or else charge more for their advertising. Either way, Spotify will own the online music streaming business in time.

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Posted May 22, 2014 by edmcgon in Economy, Federal Reserve, Music, News, Stocks, Technology

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