Writing Songs With the Doors Open

Today is the end of February, and for songwriters participating in February Album Writing Month, the day when they are challenged to wrap up an album’s worth of songs written during the month. Much of this songwriting is happening out in public, with songs available for listening almost as soon as they have been written.

By the time the month is over, “FAWMers” will have written around 10,000 songs. In practical terms, that is about 15 times as many new songs as the casual music listener can listen to over the course of a year.

One lesson from this, a point mentioned many times before, is that if you merely want to listen to a wide variety of interesting recorded music, there is no need to ever pay for it. Music, of course, is part of a broader trend. It costs less than before to be an observer or spectator. It is not that interesting things are happening everywhere you turn, but with the Internet, when they do happen, they are not so hard to find.

Much of what goes on in the economy, notably including most advertising, is based on variations of the idea of collecting money at the door. As this becomes harder to do, adjustments will be needed almost everywhere.

Bank-Changing at a Record Pace

Move Your Money and Bank Transfer Day weren’t the token protests they might have appeared at first. In all, 10 percent of U.S. bank customers changed banks in 2011 according to one survey. From everything I know about the history of banking, that has to be a record. And what makes it especially striking is that it came in a year when residential and job mobility were at historic lows. People often are forced to change banks when they move and change jobs, but that didn’t happen for many people last year. It shows that people consciously decided to change banks, then found the time to follow through.

Most people are extremely reluctant to change banks, so if 10 percent did so, it shows that more than a few banks are doing poorly indeed at meeting their ordinary customers’ expectations. Even more sobering from a banker’s point of view are the indications that this trend is far from over — that indeed, similar numbers of people are changing banks in 2012. Now that people have learned how to change banks, or have seen their friends do it, they are ready to do it again. This will put more pricing pressure on banks, and those that are not ready for it may find themselves slowly squeezed out of the consumer side of the banking world.

Strategy for Oil Reserves

There has been talk this weekend of the United States selling some of its strategic oil reserves to ease oil and gasoline prices. It is a good thought, but this is not the right season for it. It is a move that would be better timed in June or July, when oil is seasonally at its highest prices. If the U.S. labor market continues to strengthen, as I believe it will, and if global political tensions remain unresolved, or hurricanes enter the Gulf of Mexico, U.S. gasoline prices will be near $5 per gallon this summer. At that point, a bit of price relief will make a real difference in the economy.

This Week in Bank Failures

The European Central Bank is providing a new round of liquidity to banks in Europe as a consensus of economists now expect a recession there to last through this year. Banks are taking substantial losses this week on sovereign debt, especially from Greece.

HSBC is closing its bank in Japan, which it launched just four years ago. HSBC has been cutting back its operations in Pacific countries, with recent closings in Korea and Central America.

Bank of America says it can no longer sell mortgages to Fannie Mae. It says this will not affect its mortgage operations.

The OCC tonight closed Home Savings of America. The bank had $432 million in deposits. It had offices in Minnesota and California. The FDIC will send checks to depositors beginning Monday.

The failed bank had opened its California branches starting in 2007, two years after the problems in the real estate market there had become apparent.

In Georgia, state banking regulators closed Central Bank of Georgia, which had five offices in the west central part of the state and $267 million in deposits. Ameris Bank is taking over the deposits and purchasing the assets.

New Procter & Gamble Layoffs Illustrate the Dangers of Playing It Safe

The job market might finally be improving, but that doesn’t mean the road ahead will get any smoother for businesses that went into survival mode four years ago. A case in point: Procter & Gamble announced today it is cutting 5,700 jobs over the next 16 months. Its brands, such as Crest toothpaste and Tide laundry detergent, haven’t improved in recent years. Meanwhile, consumers have become more selective.

This is just one example of the dangers of playing it safe. Businesses like Procter & Gamble also have to adapt to rising energy costs, a changing distribution system, and as the economy improves, a tighter job market. It’s a situation that favors the more ambitious and adaptable businesses over the more established businesses that are just trying to survive.