What is going on with cable and satellite ?

I don’t follow Comcast, and I doubt that I will in the future. But the cash bid for Sky of around USD40 billion is interesting. Bearing in mind the growth of Roku, the deal looks to me like the old guard of cable and satellite combining to see what they can make of existing subscriber and relationship numbers. What is also interesting is that Rupert Murdoch’s interests are effectively cashing in their satellite interests in a Europe – they did offer 1075p per Sky share a few years
but have recently contracted to sell 21st Century Fox to Disney and were underbidders for Sky acting as agents for Disney. Sky is sold to Comcast at 1728p per share.
As far as I can see, Comcast’s subscriber numbers of circa 22 million have been falling, and Sky’s 23 million household connections have been slowly rising. Both companies also spin out meaningless figures for numbers of relationships.
My first thought is that Comcast’s debt will rose from around USD59 billion to USD99 billion, not ideal if the business starts to shrink. My second thought is that looking after so many extra customers gives management the opportunity to rearrange their compensation before the numbers worsen and 5G becomes the norm. My third thought is that Murdoch interests have in general been keen to invest in new media areas. They even tried to compete with Facebook, not such a bad idea at the time. So if new media moves away from cable and satellite towards companies like Roku, they will have enough cash and experience to become involved.

An update on stocks mentioned here

Nio has been the most volatile of the bunch. The issue came at USD 6.5 on 12th September and there was a limited chance to get in lower that day, before the price rocketed on the next day. Now at 8.59.
Roku were 56.07 on 18th August – now they are 72.45 and there has been no news of any importance.
The 5G stocks are unchanged to lower since 18th August. Verizon down from 54.79 to 54.42 and Vodafone ADRs up from 22.78 to 22.81 are both high yielders, but neither have gone XD.
Ceragon is lower at 2.95 compared to 3.37. Have not seen any significant news – trivia is that an American comedy called The Oath is being publicised, and Verizon is the proud owner of Oath Inc !

Bitcoin and other cryptocurrencies

While I understand that the real value of an equity might be very different to market valuation at any point in time, I could never quite understand how people valued Bitcoin and other Cryptocurrencies which have no underlying value at all.
There has been a lot of comment about the blockchain and I can see how this can be of commercial use. However, a blockchain currency – say a token worth one US dollar – would need to be underwritten by a central bank, or group of central banks. In this way risk could be removed from commercial deposits which are largely uninsured at present. This risk free token money would be used to trade – say if an airport wanted to order more jet fuel – or if a government needed to order more pharmaceutical products.
All the costs associated with trading could also be paid for with token money, and defined user groups e.g. oil, Pharma would be able to hold their cash in this way. To compensate the central banks for overseeing the scheme, and to ensure that companies were not just holding cash there, a negative interest rate could be applied on a progressive scale.

Thinking about Career Politicians

I was thinking that Donald Trump, who is portrayed as a nasty character in parts of the MSM, has been doing a reasonable job getting the US economy moving. Many of his predecessors were career politicians through and through, whereas he has been running a number of businesses for a long time – sometimes well – sometimes badly.

Career politicians can certainly talk the talk and inspire people, just like the tribunes who the Romans sensibly kept somewhere near the bottom of the ladder until higher offices were earned. But their decisions are often flawed and influenced by others. So you are left wondering who actually achieved anything much !

Eisenhower, a career soldier, gave America military roads – freeways – that greatly helped the economy. Don’t forget that when a Japanese invasion was a fear, the US military were not at all sure whether they could counter attack until the enemy had crossed most of the country. Military roads changed all of that, just as their inventors in Germany intended. JFK gets good press, but the so-called Domino Theory that his advisers posited resulted in an unnecessary war in Vietnam. Obama may be remembered primarily for trying to improve medical care, but a lot of what he achieved may be undone. Paul Ryan seems like an escapee from House of Cards – as untrustworthy as they come.

Moving to Britain, we have had a plague of career politicians. Tony Blair depended on his wife’s income as a leading lawyer, as did Nick Clegg. Both Clegg and David Cameron had some media experience in their short working lives. Theresa May worked at the Bank of England and an organisation that oversaw cheque payments – the most boring places imaginable and incredibly “safe” jobs at the time, before politics. No wonder the Brexit negotiations are in such a state.