Well, it’s only been a few hours since Britain has raised the threat level to “Severe”. But what does this mean to the business world. Well, the biggest issue is that people tend to be a bit more conservative when they perceive risk. This could have a negative effect on the market, which can have knock-on effects to the whole economy.
I tend to believe though that these things are more pronounced when they are announced. People adapt to new situations quite easily and it’s only a matter of time before things adjust themselves. Things just keep going, mush like a run of the mill nordic track treadmill. Still, it would be better if the threat level comes down, don’t you think?
$41 million dollars a week. Now that’s a whopping amount of money by any stretch of the imagination. I was thinking about the movie industry in relation to pirated movies a couple of days ago and the thoughts I was having is around the remuneration that all the people invovled in the creation of media are due. Sure, it takes a substantial amount of effort to produce a movie like this, but once the costs are covered, who reaps the rewards?
The answer is the investors behind the movie. They are the people taking the risk that the movie might be a bust, and therefore deserving of the massive rewards we’re seeing in this case. But one mustn’t forget all the other movies that are produced that never make it. The truth is that it’s not as simple as retailing ballet shoes or Ferrari parts, the market profile and risk that make part of the movie market are quite different to other markets.
There’s an interesting movement happening in the journalism world at the moment. You could sum it up as a battle of wills between Murdoch and Google, but it’s more than that. There’s a cost involves in collecting news and someone has to pay for that in the end. Here are some costs The Times faces:
Indicating the costs of quality journalism, he said it had cost the Times £1.5m to run a Baghdad bureau for the duration of the Iraq war and £10,000 to send a correspondent to report on violence in northern Sri Lanka.
(taken from an article in the Guardian)
The answer isn’t quite clear for now. It’s not like you can take some time out, hire one of those outer banks vacation rentals and put everyone in a room until they reach a compromise. The market will bear what the market will bear.
Interesting article on BBC News about how pound shops in the UK are handling problems like rising inflation. They have an interesting view on this as they see it as a shift in the products they carry rather than something that is damaging their business. So, items they sold at £1 last year might have gone out of budget and not be on their shelves any more, but items that sold at 90p in other shops are now more expensive and fall into the range where they can offer a bargain to their suppliers.
Interesting article and worth a read. I guess you’ll never find things like jewellery and bamboo blinds, but I’m pretty sure it’s only a matter of time before MP3 players will be on sale there.
One thing that REALLY gets under my skin is when people manipulate statistics to try and create sensational news. I came across this news article this morning:
Malta’s food prices second highest in eurozone
By MaltaMedia News Jun 3, 2008 – 10:44:20 AM
Food prices in Malta rose by 9.7% in April 2008, more than twice the inflation rate which during the same month stood at 4.1% in 2007, according to Eurostat.
Malta, therefore, has the second highest rise in food prices in the eurozone with Slovenia’s prices rising by 12.4%. The overall rise in food prices in the eurozone stood at 6.2%.
Oils and fats alone in Malta went up by 15.8% in just a year’s time whilst in other eurozone countries they only went up by 8.3% on average.
Another contrasting anomaly in Malta’s price portfolio is that the prices of vegetables, which in other countries fell, went up by 13.8% registering the highest increase in comparison to all other countries.
Do you see my problem with the article? The headline states that Malta has one of the highest food prices in Europe, yet the statistics quoted talk about the second highest RISE in prices. And I don’t think there was an editorial error here, it’s just that the headline is more sensational like this. In reality, such an abrupt rise in prices probably belies the fact that prices are really quite low in comparison to it’s European neighbours and have had to climb steeply to try and catch up.
Statistics also need to be put in context. A 10% rise in a month sounds like a lot. But I would hazard a guess that this is a pro-rated per annum growth rate (making it under 1%) based on the fact that it is quoted as being twice inflation. Also, how does this compare to preceeding months? Was this figure similar the previous month, or maybe it was unusually low?
Is it just me? Or do misrepresented statistics drive you crazy too?