Last December, I posted excerpts of an IRA interview with Michael Whalen, an award winning composer and new media observer. In this week’s issue of The Institutional Risk Analyst, Michael reviews his predictions of last year and discusses how he sees the future of media. Long excerpts but very interesting and thought provoking. Full IRA interview is here.

  • It seems that about 100% of what we discussed has come to pass or is in process, and then some. We were talking about the eventual end of television networks, film companies and the continued radical upheaval of the music business. It is certainly the case that network television is ending as we know it. While we have not seen any of these media companies fall over and die – the erosion in all of television and broadcast media in general in just 10 months is alarming.
  • I think the biggest single factor that has changed since we spoke last year is that major media companies and especially the television and cable franchises are no longer pretending that things are “OK”. (…) the total number of people watching programmed broadcast television is less than half of what is was just 10 years ago. The level of desperation out there is amazing.
  • In the face of these actions, income streams everywhere are drying up. Look at how new ventures like Oprah’s OWN network (launched just a year ago) has been a financial disaster since day one. News Corp’s (“NWS”) failure in launching their digital magazine “The Daily” and the continued trouble for media institutions like the New York Times (“NYT”) are but single examples of an ocean of trouble for media. (…)

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Euro-Zone Growth Weakens The euro-zone economy grew more slowly in the second quarter than at any time since the end of the recession in the same period of 2009. The combined gross domestic product of the euro zone’s 17 members grew by 0.2% from the first quarter, and was up 1.7% from the second quarter of 2010.


German Growth Slows Germany’s gross domestic product rose 0.1% in the second quarter from the first quarter, and by 2.7% in annual terms. The German data mark a considerable slowdown from the first quarter, when growth was 1.3% quarterly and 4.7% annually.

German GDP growth

Dr. Copper, meet Dr. Derivative. Since we always take the cue from the credit market, which in this case is the derivative market, we expect copper to break to the downside, and sport a handle closer to $3 than the current $4/lb. (BMO Capital Markets)


US Postal Service Targets 220,000 Job Cuts  The U.S. Postal Service would reduce its work force by 220,000 jobs—more than a third—by 2015 under a plan presented to Congress to remedy dire financial conditions at the agency.

U.K. Inflation Picks Up The CPI increased to 4.4% in the 12 months to July, compared with 4.2% in June. The increase in the inflation rate was due to upward price pressures from financial services; clothing, footwear and furniture sales; housing equipment; and housing rent. Core inflation picked up to 3.1% from 2.8% in June. The retail-prices index, an alternative measure of inflation that is often used in pay settlements, remained at 5%, the ONS said.

Banks Open Loan Spigot a Bit U.S. banks continued to ease lending standards in the second quarter, but loans remain hard to get by historical standards, the Fed said in its senior loan officer survey.


Fed’s Lockhart: Recession Risks on the Rise Using what has become a central banking catch phrase, the Fed official maintained that the U.S. economy was mired in a temporary “soft patch.” But with the world’s largest economy retrenching and Europe still grappling with its debt crisis, Lockhart acknowledged that the risk of a recession “is higher than we perceived a month or two ago.” Because U.S. growth is stuck below 2%, Lockhart added that past trends were suggestive of the economy falling back into recession.

China buys more US bonds in June China continued to increase its purchases in June as its holdings rose by $5.7 billion to $1.17 trillion.

Munich Re stake signals ‘strategic shift’ on reserves China’s investment in German reinsurance company Munich Re Group is a sign that the country’s foreign exchange regulator might be seeking out higher-yielding but riskier investments. SAFE has long followed a conservative investment strategy that guarantees liquidity and safety, investing mainly in low-risk, fixed income products such as US Treasury securities and the government bonds of Japan and some European nations.

Indian inflation eases slightly Lower July figure could prompt pause in rate increases

Chinese Students Flood U.S. Grad Schools Thanks to a thriving economy in China, an increasing number of Chinese students are attending U.S. graduate schools, according to a study to be released on Tuesday by a graduate-school industry group.


Interpublic sells half of its Facebook stake Deal implies a value of $66.5bn for social network