January 21st, 2015

Capitulation

Recently, the Swiss National Bank, which, unusually, is a listed organization that pays dividends and thus is under pressure from its share holders (predominantly Swiss cantons, which rely heavily upon that reliable dividend) abandoned its peg to the euro, resulting in some bankruptcies, insolvencies, and general forex freakout.

Here's a bit about the pinch the cantons were feeling back in 2011, and there at least still _was_ a dividend back then.

http://www.swissinfo.ch/eng/cantons-count-cost-of-reduced-snb-handouts/31630160

[ETA: http://www.bloomberg.com/news/2015-01-09/snb-sees-2014-profit-of-38-billion-francs-resumes-dividend.html]

Expecting this system to continue indefinitely was probably unrealistic.

Here's what Krugman posted when SNB abandoned the peg:

http://krugman.blogs.nytimes.com/2015/01/16/regime-change-in-switzerland/

and

http://krugman.blogs.nytimes.com/2015/01/21/a-tale-of-two-pegs/?_r=0

He's completely ignoring the shareholder issue. More importantly, I think he totally failed to understand the psychology of the event.

"By throwing in the towel on the peg to the euro, the SNB immediately convinced markets that its previous apparent commitment to do whatever it takes to avoid deflation is null and void....the SNB’s wimp-out will make life harder for monetary policy in other countries, because it will leave markets skeptical about whether other supposed commitments to keep up unconventional policy will similarly prove time-limited."

By focusing on monetary policy "in other countries" rather than monetary policy at the supra-country level, viz. the ECB, Krugman continues a long standing policy of treating the Euro zone has somewhere between half baked and already failed.

I like Krugman. He's a smart guy. But I'm pretty sure that my read on the situation -- that SNB throwing in the towel would force Euro level QE -- has turned out to be true. That is, unless Bloomberg really cocked it up on sourcing this:

http://www.bloomberg.com/news/2015-01-19/draghi-s-big-push-seen-delivering-635-billion-with-qe-this-week.html

Which, you know, Bloomberg. So probably they didn't cock it up. Time will tell.

On, and while you're thinking It Is About Fucking Time, don't blame Draghi. SNB abandoning the peg [ETA and several countries adopting negative exchange rates] is [are] what has given him the ability to take this action. This is what capitulation looks like.

[ETA: Oh, and while the rumored ECB action runs through the end of 2016, a quick look at our QE actions had some time limits, too, but that didn't stop additional ones getting tacked on the end. It was a lot easier to go rounds 2 and 3 and so forth than to get the first one.]

Trying to figure out how many kindle e-readers are out there, in use

Just to be clear: I actually don't think it is possible to figure this out, altho Amazon presumably knows the number to a high degree of accuracy (assuming that few kindle e-readers are both in use AND not registered at Amazon, presumably the number of _registered_ kindle e-readers represents an upper bound and the number of _registered_ kindle e-readers which have been active within the last 12 months is a lower bound).

I _know_ I am not representative, but I might as well start with personal anecdata. I have bought a metric fuck ton of kindles of various stripes. I've bought them for me, for relatives and friends as gifts, for family members. I'm going to _only_ think about the ones I have bought for myself, and ignore the original kindle which was bought for me and which sits, registered but not currently in use, on the second floor, as a display item. Because. Basically, I've got a Voyage which I use almost daily. My son has a Touch which he almost never uses. Every other kindle e-reader I have bought for myself or a family member (with the exception of one which bricked and was replaced, so we're going to treat those two kindles as a single one; and one which I gave away so we're going to treat that as a gift) has been donated to a library and, as of a few months ago anyway, was still in active circulation.

So: 3 year device lifetime, ha ha ha ha ha. I more or less reflexively buy a new one whenever there is a new one and then I donate the previous one, where it is then used for a really long time by other people.

Back in April, this was produced:

http://www.forbes.com/sites/greatspeculations/2014/04/02/estimating-kindle-e-book-sales-for-amazon/

Several things to think about here. That was in the spring of last year, when people were really all excited about Amazon stock, and part of what that piece was written in service of was ... people really all excited about Amazon stock. Also, keep in mind that every number that went into the final how-many-are-in-use-now was ALSO an estimate. Because Amazon doesn't release much data.

"The annual sales for Kindle e-reader peaked in 2011 to roughly 13.44 million, followed by a decline in 2012 when the figure totaled an estimated 9.68 million. The sales in 2013 were more or less flat, which suggests that roughly 43.7 million Kindle devices had been cumulatively sold till the end of 2013....Assuming a 3-year replacement cycle, we conclude that there may be approximately 30 million Kindle e-readers currently in use."

So when The Telegraph, this month, produces an article about Waterstone's and kindle ereader sales, including this paragraph:

"Amazon launched the Kindle, which is now in its seventh generation, in 2007. Sales peaked in 2011 at around 13.44m, according to Forbes. That figure fell to 9.7m in 2012, with sales flat the following year. It is estimated that Amazon has sold around 30m Kindles in total."

You should be thinking, hey, those look ... similar! So I think we have found the Telegraph's source. And the Telegraph is sort of assuming that there have been essentially zero net sales of kindle e-readers (that is, every kindle e-reader sale since the Forbes estimate was produced was a replacement sale, recognizing that there could be some hundreds of thousands or even small number of millions that failed to be captured by rounding to a single significant digit).

A Tim Waterstone quote concludes the article this way:

"“The e-books have developed a share of the market, of course they have, but every indication – certainly from America – shows the share is already in decline. The indications are that it will do exactly the same in the UK," he told the Oxford Literary Festival."

Back at the beginning of 2013, the WSJ put out an article on e-reader vs. tablet sales that boded poorly for e-readers. Basically, everyone who wanted one had acquired one in the last year or so, and they didn't wear out so no one felt compelled to get another just yet.

http://www.wsj.com/articles/SB10001424127887323874204578219834160573010

How does that interact with a 3 year hypothetical lifespan? Well, maybe sales are low because people are reading on their phone/tablet. Maybe sales are low because people went back to paper. Maybe sales are low because their vintage 2011 e-reader is Just Fine, thank you very much. Maybe sales aren't low ... because Amazon isn't sharing.

Last June, the then-current IHS iSuppli numbers were leading commentators to predict that e-readers were going to be a niche only for people who read two or more books a week (what I would call a true power reader -- 100 a year), for everyone else a nice to have that can be replaced with a tablet or phone.

http://mashable.com/2014/06/27/e-readers-next-ipods/

McQuivey over at Forrester was speculating they'd eventually be given away for free.

The actual number of power readers out in the population could be determined, but I mean the 100 a year crowd, not the dozen ish a year crowd, which a lot of the research studies. The 20+ a year crowd seems to be about a fifth of the US population, and I'll just walk right out on a limb and suggest that the 100 plus a year crowd is a comparable fraction of that one fifth.

30 million does not seem nuts, under this analysis, if it's a US centric figure; it would be a little high if it were a US ONLY figure (which it almost certainly is not).

Long term, until we get to a point where the screens on phones and tablets don't keep us awake at night, I think it is plausible to believe that something like 5-10% of the population is going to want to have an e-reader around. Even people who don't typically read enough to really justify having a dedicated e-reader might decide to have one because it's just so awesome to travel with one. That makes 30 million as a US centric figure look downright reasonable (note: not annual sales -- sales figured over some number of years that represents the real world lifecycle of the device).

Of course, the day will come when a new screen technology changes everything. But people have been expecting that new screen technology to come along for a while now (Mirasol, anyone? Liquavista? Color e-ink? Speaking of which: http://www.popsci.com/article/technology/will-i-ever-get-color-e-reader). It'll happen ... eventually. This should not be regarded as a prediction for what happens after new screen technology changes everything; this is more along the lines of what the steady-state might be for dedicated e-readers under current screen technology.

ETA: Not about devices, just a little sidelight on Tim Waterstone's theory that e-book content share is dropping (if he meant content -- it's just not clear to me, altho it may be shortly when I grope around for further details):

http://www.publishingtechnology.com/2014/06/hachette-figures-reveal-amazons-dominance-of-book-selling-and-more-evidence-of-the-ebook-plateau/

Publishers weekly reporting on Nielsen data on e-books, paperbacks, hardcover, back in September.

http://www.publishersweekly.com/pw/by-topic/industry-news/bookselling/article/64170-e-books-remain-third.html

A plateau is predicted at 35%:

http://www.publishingtechnology.com/2014/03/nielsen-enders-ebook-plateau/

Power readers and predicting the e-book plateau

This is a chart that breaks down fraction of the population by how many books they read a year.

http://www.statista.com/statistics/262631/number-of-books-read-by-us-adults-per-year/

If you do a little math, you can convert that into what fraction of the total books read by the group as a whole are read by each slice.

Depending on how far you want to take that 21+ slice up, the 21+ group is reading about half the books (a couple dozen per person), 2/3rds of the books (50 a year) or more.

So this presents a conundrum. Why are commentators expecting a plateau in e-book content at 35% of the titles sold? Either power users aren't fully converted (this is trivially true, for some small percentage -- I know one of my regular readers and my walking partner have not yet converted to e-readers), or the plateau shouldn't show up until some higher point.

There's another possibility. Some fraction of book content is _still_ only available in p-form (I know, I've had to acquire several books in paper in the last year and I'm not happy about it; usually these are academic monographs). If a large fraction of power readers are reading a lot of books that are not yet available in high-enough quality e-form, then they won't convert. Period. At least until the quality problem is solved. But the survey data is specifically about trade books, so that doesn't seem too likely. It's also possible that you have conversion averse buyers (parents, grand-parents, etc. who don't read much themselves) buying p-form for power readers who would prefer e-form but aren't going to make a big stink about it.

Or the data is bad. Yeah, that'd never happen.

Here's how the data could be bad:

http://www.theguardian.com/books/2013/dec/04/amazon-kindle-ebook-sales-indie-publishers

If indie ebooks are not in the projections or the universe under analysis, and they are a quarter, then total ebook sales would wind up plateauing somewhat higher than 35% or 40%, and might get a lot closer to the 50% or so that would be the low end of what seems reasonable to me.

ETA: If you are blinking, and thinking, walkitout, libraries! Well, you are clearly smarter than me. Libraries could, indeed, explain a lot.

Another example of believing what you want to believe

The author of this piece really wants google to be the bad guy, ordinary readers to be kinda stupid, and tradpub to be ... not sure.

http://pando.com/2015/01/20/consumers-trust-googles-algorithmic-echo-chamber-over-traditional-publishers/

"Someone who often searches for something on Fox News will probably see even more results from Fox while similar reporting from other news organizations will start to disappear."

I don't search on Fox. Like, ever. Every once in a rare while, I will foolishly click through on a Fox local affiliate, reporting on local news or, worse, hit the wrong link by mistake in a rotating collection on some current story. I back away instantly because I fucking loathe Faux News, but for the next several weeks or longer -- until I figure out how to tell google news how very much I never want to see another Fox News link -- I am shown Faux News coverage preferentially.

I wish that echo chamber worked a little better. But it really doesn't.

Gawker coverage of Ulbricht/Dread Pirate Roberts Silk Road trial

http://internet.gawker.com/why-you-should-care-about-the-silk-road-trial-1679998505

TL;DR?

That last sentence is interesting!

"If the FBI can't pry the darknet's drug baron out of hiding, there's every reason to expect it'll just ask for scarier tools."

There's the usual stuff in the summary: the FBI got some/all of this information by hacking! Illegally!

But also a decent amount about how the Wild West is being tamed, except, of course, those fractions that are driven deeper into the shadows.

It isn't the writing, or the expressing: it's the editing and rewriting

Who knew?

http://well.blogs.nytimes.com/2015/01/19/writing-your-way-to-happiness/?_r=0

"Students in the intervention group were given information showing that it is common for students to struggle in their freshman year. They watched videos of junior and senior college students who talked about how their own grades had improved as they adjusted to college.

The goal was to prompt these students to edit their own narratives about college. Rather than thinking they weren’t cut out for college, they were encouraged to think that they just needed more time to adjust."

They all wrote -- it was the ones who got the above who had startling improvements that lasted for months to a year.

"Another writing study asked married couples to write about a conflict as a neutral observer."

Again, that's not just expressing.

"Dr. Wilson, whose book “Redirect: Changing the Stories We Live By,” was released in paperback this month, believes that while writing doesn’t solve every problem, it can definitely help people cope. “Writing forces people to reconstrue whatever is troubling them and find new meaning in it,” he said."

But it very clearly isn't the _writing_ that is causing the reconstruing. It's the rest of the intervention, either in the form of the shape of the writing assignment "as a neutral observer", or in information that informs the writing.

"At the Johnson & Johnson Human Performance Institute, life coaches ask clients to identify their goals, then to write about why they haven’t achieved those goals.

Once the clients have written their old stories, they are asked to reflect on them and edit the narratives to come up with a new, more honest assessment."

This isn't about writing. This is about using writing as a way to help people create reality-based perspectives and plan. I wish this wasn't summarized as "writing", because I know a bunch of people who do un-directed expressive writing, and I have never seen that provide clear, directional assistance in their lives.

And now: an FB comments thread with, er, someone

The context is the power readers/library reference in an earlier post. The reason this comments exchange went this way is because we've had more or less this exact conversation on perhaps a half dozen previous occasions. It's sort of an art form at this point.

Her: I'm kind of lost of the library thing.

Me: If power readers are disproportionately high library users, then their numbers would not show up in sales.

Her: Ahhhh! OK, makes sense. Before the kindle, I was getting nearly all of my books either at thrifts, or the library. So I would not have shown up, right? Regardless of the fact that I power through hundreds of books per year?

Me: Yup! You were a member of a group of people who read a huge amount, but did not appear in publishers and book retailer sales figures.

Her: Well, that seems vastly unfair. How dare they not pay attention to our every move! Philistines. *sniffs* (j/k)

Me: Er. . .

Me again: (She can't really be asking for a pervasive surveillance industry, can she?)

Her: I’m boring. Anyone who wants to stalk me has my permission. I'm more effective than Ambien.

Me: I know, I know. If you're going to surveil me, at least write my grocery list for me.

Her: Exactly.

Her again: And if I left the tap dripping as you rifle through my junk drawer? Be a dear and turn it off, ok?

Me: Heck, while we're at it, feel free to do a little decluttering for us.

Her: That garbage by the door waiting to go out? After you search the house - yeah, grab that as well as the surveillance report.

Me: Take the compost out, too, while you're at it, m'kay?

Her: Those legos won't pick themselves up..........you never know - the password to the secret room MIGHT be at the bottom of that pile of tinker toys....

Me: There’s a bag to go out to the Middle Class Guilt Reduction station. When you leave, go ahead and take it with you. If you're feeling ambitious, there's a bin all ready to go to the consignment place. I left a note on it with my account information; the drop off for the bin is in the back of the shop.

Her: ^This. For the win. LOL

Me: Heh.

Her: We are CLEARLY so boring. LOL

Me: If someone was willing to take out the compost, take stuff to the consignment store, declutter, take out the garbage and recycling, and write my grocery list, I would probably be okay with them snooping at all my financial statements.

Her: Ditto.

Me: I feel like I should turn this into an LJ post.

Her: You should! Tag me in the FB post. Because you know I hate attention.

If you ever wondered what I do when I'm not wasting time on the internet, this should give you some indication.