Gottastopperping: Making Money Cash

The next few years in the mobile industry are going to be interesting not only because Google and Apple are competing with each other at making the most advanced mobile operating system, or because Nokia, for the first time in their 145 year old corporate history, have a non-Finnish citizen running the ship, but because the fundamental way we interact with each other and the world around us is going to change thanks to near field communication.

Man used to carry cash until roughly 50 years ago when the first credit card with a magnetic stripe was released. It brought about a huge change in people’s spending habits, not only because they could actually borrow money and pay it back at a later point in time, but because the visual artifact of slips of paper and coins was removed from our understanding of how money really works and how much it’s actually worth. Now, with the recent announcement of Isis, a collaboration between Verizon, AT&T and T-Mobile aimed at making your mobile phone the only thing you need to take with you when leaving you home, the world is set to change yet again.

How does that make Visa, one of the ancestors of plastic cash, feel about their role in the future of the daily transactions that make our world economy go round and round? I’m not going to copy and paste the entire article, which I recommend you read, but here is the main argument:

“It might be easy to build an iPhone app that lets you enter in the phone number of a co-worker you want to pay back for lunch, a common promise in the new mobile-payments world. But then someone has to do the intricate behind-the-scenes data processing that makes sure the card isn’t stolen, the people involved aren’t scammers, the payer’s account has the necessary funds and the actual money transfer happens quickly and without a glitch.”

They’re on the defensive, citing their experience with handling mobile payments, but just like Visa killed cashed half a century ago, maybe the little NFC chip inside your next smartphone will the beginning of something new and exciting?

[Via: NFC World]

From Claire Berlinski in City Journal:

You see, about a month ago, I asked my mother to bail me out. I knew she’d do it. She’s done it before. She sent me money she’s been saving toward my retirement. I resolved to stop spending money on stupid things. (There was really no excuse for that lamp, Mom, I know. Sorry! In my defense, I was sure there was a genie in it.)

With my mom paying my rent, I’ve been able to charge less for what I write and stay in the black. Voilà, I’m selling a cheaper product (for now) than Reuters and AP. That will teach them where to stuff their “good investment decisions” and their “economies of scale.” I fired the guy who does my odd jobs—it was painful, but it had to be done. So, congratulations to me! I’m making it in this tough business climate, with a little help from Mom. America’s back! And if I’m broke again in a year, I’ll hit her up again. (Don’t forget, Mom, that you really have no choice: no matter what you do, I’m still going to be a huge financial drag on you. If I fail, I’ll end up coming home with all my cats. You don’t want me sleeping on your couch, do you? And you sure don’t want to see what my cats would do to that couch. Antique, I believe it is?)

All of this is, alas, a perfectly accurate description of my financial life. The reader may wonder about my mom’s wisdom in going along with this plan. That’s between me and her—she loves me, and it’s her money, not yours. The money that went to GM was yours, however. And I suppose you must love GM as if it’s your profligate kid, because surely you could not be so credulous as to believe these reports about the spectacular success of the bailout.

There was a rush to buy GM shares last Thursday, when the company, which emerged from bankruptcy restructuring last summer, held an IPO. The company has been drowned in taxpayer cash. It’s going to be fine in the short term. No one should be surprised by this. Anyone—and any company—can get back in the black in the short term if someone gives it a ton of money. And who wouldn’t want to invest in a company that everyone knows won’t be allowed to go down? All the merchants in my neighborhood would lend me money, too, if I asked, confident that their loan would be repaid. A “generous American mom” sounds pretty good to them.

Of course, GM is paying back its new loans, though this doesn’t help investors who hold old GM stock; that’s worthless. By the way, I’m also considering stiffing my creditors. The GM example proves that it will result in an immediate improvement of my balance sheet. GM’s production numbers have been increasing, and mine have, too: it’s a lot easier to write when you’ve got peace of mind. Whether anyone will buy the stuff I’m writing, God knows, but my word count is definitely up, and that, apparently, is the number that matters.

Note that GM is still producing those gas-guzzling pickups and SUVs that no one seemed to want before. Great news for me: I’ll just keep writing about the arcana of Turkish constitutional politics. It’s what the market should want. Turkish politics are fascinating. I don’t know what’s wrong with Americans. If they understood what was good for them, they’d want to be better informed about Turkey. (They’d want that Volt electric car, too. I hear it’s much better for the environment.)

Naturally, I’ll pay my mother back. Here’s how: I’m going to have her put a small percentage of all the money she’s given me in an escrow account, which I’ll call a “working capital” account. Then I’ll transfer the rest of my assets to her. (Good news, Mom: you own seven cats and seven litter boxes.) Then I’m going to use the money from that escrow account to pay her back at an interest rate no one but my own mother would give me. As soon as I empty the escrow account, I’ll declare the loans repaid. What do you mean, that makes no sense? That’s just what the U.S. governmentdid for GM, and no one finds that problematic, do they? Never mind that the cash part of the loan has been repaid from TARP, or that this in fact represents only about 15 percent of the total bailout, or that the rest remains tied up in the automotive equivalent of cats and litter boxes. By the way, I’m thinking of bundling all my liabilities into a separate company, just like GM. I’ll call the company “Some other Claire who can deal with the creditors, never heard of that Claire.”

Read the whole thing here.

eric seiger do

Wednesday, December 1, 2010

Making Money Cash

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