Americans Reject Keynesian Economics
Richard Nixon once said, “We’re all Keynesians now.” But that was a long time ago, and it’s certainly not the case anymore (if it ever was).
While influential 20th Century economist John Maynard Keynes would say it’s best to increase deficit spending in tough economic times, only 11% of American adults agree and think the nation needs to increase its deficit spending at this time. A new Rasmussen Reports national telephone survey finds that 70% disagree and say it would be better to cut the deficit.
Forex FreeWeek at Elliott Wave International
Our friends at Elliott Wave International have just announced the beginning of their wildly popular FreeWeek event, where they’ve thrown open the doors to some of their most popular paid services to non-subscribers for one week only.
You can access EWI’s intraday and end-of-day Forex forecasts right now through next Wednesday, February 10.
Steve Jobs, Apple, the iPad, and King Gillette
By Adam Hewison
On Wednesday, after much hype and drama, Steve Jobs walked onstage and unveiled Apple’s latest creation – the iPad. Having watched almost every key address for Apple for many years I, like many others, were disappointed that the product didn’t live up to the hype. Nonetheless, Apple will sell a boatload of these products, but not as many as the iPhone.
Upon reflection, it occurred to me that Steve Jobs is changing the whole business model of Apple and I don’t believe anyone has caught on to this yet.
In all the reports I’ve read after the launch of the iPad, I think every writer /analyst missed this key point: Steve Jobs wants to be like King Gillette.
If you don’t know who King Gillette was, you may not old enough to shave. King Gillette started his business at the beginning of the century. His business model is what I believe Apple’s business model will be in the future.
Long ago, King Gillette decided to practically give the razor away at or below cost, but sell the razor blades separately.
So here’s what I think, I think Apple wants to give the iPhone and the iPad to as many people as possible at cost or with a small profit. Remember now, AT&T subsidized the iPhone and Apple gets a slice of the pie from every AT&T customer that has an iPhone. Now why would they do that you might ask?
The key reason, I would argue, is that Apple wants the magic of recurring revenues. This is the dream of many companies – to have millions of folks paying a small amount of money every month for using a service. What makes Apple stand out is the fact that they have an army of developers who are writing code for some very cool apps. Yes, there is an app for that. In fact, there is an app for almost every idea ever thought of.
Not only has the app store been widely successful, but Apple also has iTunes, and iBooks along with iTV coming down the road. So this is what I believe Apple’s business model is going to be: with 125 million people who have giving Apple their contact and credit card information, Apple has a huge base of customers much like the newspapers and magazines did in the ’60s and ’70s, but on a much smaller scale. Now Apple can upsell products to those customers at will. The genius part about all of this is the fact that other people are creating products to be sold through the Apple store. Apple just reinvented the King Gillette model in a thoroughly modern way. Hat’s off to you Steve.
That’s my take on Apple’s stealth business model.
Now let’s take a look at the stock.
In my short video, I explain to you some key factors I’m watching that I think will make the difference in this market. If you have a few minutes, please take the time to watch this juggernaut of a stock and what I think is ahead for the market in the next 2 months.
NASDAQ crosses important trend line
One of the most powerful technical tools that a trader possesses is a pencil and a ruler. It sounds kind of old-school, but the reality is trend lines in technical analysis are enormously important.
In this new video learn how the NASDAQ index has broken a very important trend line and what the ramifications are for this index.
We can all learn from the simplicity of this approach and how effective it is in the long run.
$EURUSD Trade Update 1/28/10
Our EUR/USD short continues to work out well (initiated at 1.5077). We were stopped out of 1/3 the position on January 4th and unfortunately missed the re-entry which should have occured on January 14th when the new pivot was formed and price ran into resistance at the Kijun Sen (blue line). Rather than chase it I made the decision to wait for a low risk entry on the next pullback. The 1/3 stop locked in 617 pips and the remaining 2/3 is currently up 1150 pips. This is close to a $3,000 gain assuming you started the trade with 3 units, which requires less than $500 with 100:1 margin. Not a bad return so far. I’m still targeting below 1.2400 before it’s all said and done.
Economics in One Lesson
The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups. - Henry Hazlitt
A nice overview of Henry Hazlitt’s book Economics in One Lesson.
Hazlitt’s Logic, For Those Who Care About Freedom
[American Affairs, 1946.]
Here is Henry Hazlitt exercising his gift for lucidity to produce a book entitled Economics in One Lesson. If there were such a book this would be it. It deals with those “economic fallacies that are at last so prevalent that they have almost become new orthodoxy,” — to the point that now there is not a major government in the world whose economic policies are not influenced or in fact determined by them.
He undertakes to expose them by analysis and reason and to chase them into the ground. But in the first place, how did they get abroad in this garb of respectability? How is their worldwide vogue to be explained?
Mr. Hazlitt’s explanation is that people have lost the habit of thinking beyond the present. They have been beguiled by the saying, “In the long run we are all dead.” They want everything today; let tomorrow take care of itself.
