Randomly Noted

In the first dissent at a Federal Open Market Committee meeting in about a year, one of the voting members publicly wouldn’t go along with the crowd.

Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, wouldn’t make it unanimous today to keep short rates at zero and tell the world they will continue to stay that way for an extended period.

Good for him. Though the Fed is unlikely to move on rates at all in 2010, the emergency conditions that required them to stand at zero have dissipated, regardless of how fragile the economic recovery remains.

As I’ve previously argued, big budget deficits, a stabilizing economy, and long-term inflation fears in some parts of the market mean the Fed should at least take the cost-free step of removing the “extended period” language on the slow walk away from zero short rates.

The Fed isn’t always clear in the language employed in the statement released after FOMC meetings, but in describing Hoenig’s decision, the language was reasonably to the point.

Hoenig “believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted.”

Ok, maybe not the whole world. But the technology world. The new Apple tablet is being introduced by CEO Steve Jobs. It has the look and feel of combining a big iPhone with a small laptop. Runs a lot of the popular Apple software and of course, has the iTunes applications from songs to games to movies to subway maps to calculators etc. Waiting to hear about the price and whether it will be delivered only WiFi or perhaps through cell phone carriers. Here’s Jobs demonstrating the iPad (the name of the tablet) with a giant version shown on a screen in the background.

Actually, that’s not me. I’m an admirer of the Apple-Jobs phenomenon – from afar. The last Apple I owned was a Mac II in the late 1980s; it did what I needed it to do as I typed up grad school research papers. Today, I own an MP3 player, but not an iPod. Mine is a Zen, by Creative Arts; I bought it when we lived in Singapore. It works fine – I listen to music and watch old episodes of “Weeds” and “Dexter” during the daily train commute. (My husband downloads this stuff for me – a sign of how un-tech-savvy I am.) I have a Blackberry – that is, it has me in its Crackberry grip. It’s my phone, my email, my address book, my “to do” list – and my route to online newspapers and magazines. Small as the Blackberry is, I manage to read it for an average of three hours a day. You may be like me – intrigued by all things Apple but not obsessed enough to really care what the new tablet’s called (iPad) or to road-test it when it hits stores. All that said, if the new Apple tablet is totally and utterly convenient for all the functions described above, I may buy it. (The price, around $500-800, looks reasonable.) Moreover, if fairly neutral, even apathetic, people like me succumb, the sky’s the limit for Steve Jobs’ company. You see, Jobs already owns the die-hard Apple freaks, and  he’ll never seduce the anti-Apple clique. But middle-ground people like me – fly-over country, so to speak – who use cell phones, MP3 players and Blackberries, but find one or all of them not quite right for our multi-media purposes – we just might be lured to Apple country with the right new product.

The fiasco at Toyota creates an unprecedented opening for Ford and Hyundai. As Toyota’s brand grows more tarnished, American buyers will look for foreign- and domestic-made alternatives, and this will give a boost to these two auto makers, whose reputations for quality and reliability – as well as attractiveness – have been on the rise. Think about it: If you’ve been buying cars for a few decades – for yourself, for your teen or college-age kids, – you’ve tended to think about Toyota. The Japanese company made good-looking, high-quality vehicles that were so compelling they basically wiped out the competition. In the 1990s, when I advised my elderly parents to replace an aging Volkswagen Jetta, I told them there was only one car they should consider: the ultra-safe and reliable Camry. They bought one and my Mom, now widowed, still counts on it to trundle her around town. Were she in the market for a new car today, I’d have two words for her: Ford and Hyundai. It’s a sign of these fast-changing times that a Korean auto maker and a once-floundering American offer a more-attractive vehicle line-up than the Japanese behemoth. The toll on Toyota will be long-lasting. Continue reading…

Neal Lipschutz is attending the World Economic Forum in Davos, Switzerland.

A statue in the City of London depicting the authors of the 2002 Sarbanes-Oxley U.S. regulatory legislation?

Such a monument is worthy of consideration, joked Lord Levene, chairman of Lloyd’s, at a World Economic Forum panel discussion here.

Continue reading…

Neal Lipschutz is attending the World Economic Forum in Davos, Switzerland.

A sovereign debt crisis looms as the most likely threat to the global economy, or at least the most popular threat.

Attendees at a World Economic Forum panel discussion here were asked to vote via handheld electronic gadgets on the biggest threat after listening to about 90 minutes of debate.

A sovereign debt crisis brought on by excessive government borrowing took about 51 per cent of the votes. The other two choices given the audience, the threat of protectionism or the threat of too much regulation, won 37 per cent and 12 per cent, respectively.

Neal Lipschutz is at the World Economic Forum in Davos, Switzerland.

When asked about the value of the Chinese yuan at a World Economic Forum panel here, Zhu Min, China’s deputy governor of the People’s Bank of China, emphasized the importance of the currency’s stability, especially as many other currencies have been volatile.

Fellow panelist U.S. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, then cut in. The yuan can be stable, just a bit higher in value, Frank said.

Neal Lipschutz is attending the World Economic Forum in Davos, Switzerland.

In a debate at the World Economic Forum about the threat of global protectionism, Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, managed to take on Thomas Jefferson.

He said the Jeffersonian notion that farming was a superior form of life has led to subsidies and protectionism in the U.S.

Similar problems exist in the European Union. Saying EU agricultural policy is “ridiculous,” Frank claimed European farmers should be bought out.

The idea that the “noble yeoman” must be protected at all costs leads to protectionism, Frank said.