What you may have missed in the business news last week:
1. The fight to replace Bernanke.
So Benny boy is leaving us soon, and Mr Obama faces the not-so-awesome task of selecting a replacement. The current contenders: Janet Yellen (the current vice-chair of the Fed) and the “polished” Larry Summers (google that gentleman – the last thing he looks is “polished”, especially after he was removed as President of Harvard following a faculty vote of no confidence). This should be fun!
2. The curious case of Bezos and the Washington Post.
Amazon.com owner Jeff Bezos bought the Washington Post last week, following in the footsteps of John Henry (who bought the Boston Globe earlier this month) and the inimitable Warren Buffett (although they’re doing a good job of making him less inimitable).
The question is: why though? Newspapers, like Newsweek, are old news. Twitter is instant. Good blogs are free. Newspapers are…I’m not sure. One (my) theory: in the over-abundant information age, a centralised source of good/reliable information is worth paying for. Perhaps that’s the natural transition for old-school journalistic values: a smaller, but more profitable, information-consumer base?
Or maybe Mr Bezos just has an attraction for entities that are loss-making. Why settle just for Amazon.com?
Peak Oil is used to describe that moment after which it’s all downhill for the oil companies: when (I guess) oil extracted exceeds exceeding oil reserves. I’ve talked about the unlikelihood of this happening before (this post: The Petrodollar Collapse), which is why it’s probably not surprising that I found this article interesting.
While we’re all worried about oil supply, the Economist is arguing that the large oil companies should be a bit more worried about oil demand. Firstly, our cars are getting more efficient (and they use ±three-fifths of the oil produced), and even the emerging market economies are starting to get a bit environmentally conscious (even though, understood, cows are the real problem). Secondly, we might well start using shale gas to power our transportation networks instead.
That said – there are a lot of “mights” in that theory. Also: until we stop using plastic and growing crops with fertilizers and pesticides, we will always need oil. And even more conclusively, let’s not forget that the supply of oil (and, thereby, its price) is artificially determined by OPEC. All they need to do is expand production, glutting the market and lowering the oil price, to make oil the more attractive fuelling option.
4. The battle for America’s minimum wage.
President Obama is busily attempting to increase the minimum wage. It’s currently sitting at $7.25 per hour. He would like to see it go up to $9 per hour.
It’s a TERRIBLE idea. In fact – so is $7.25 per hour. Allow me to throw this into perspective:
The minimum wage in India is $0.28 per hour. That’s 28 cents. And a 96% cost saving when a US manufacturer outsources.
Perhaps this deserves a post of its own later this week.