Why I Agree With Amazon's Purchase of Twitch.tv

First, some numbers. 1.35% of all internet traffic is made up of streaming, specifically the streaming of video games. Twitch boasts 55 million unique users per month as well as 1 million broadcast partners. Although these numbers help out the traditional investors, they leave out details that are to me the most important. 

The intriguing thing for me about Twitch.tv is that the unexpected is relatively normal, which presents a dynamic opportunity for Amazon. For example, a game that was released in 1998 in the US, Pokemon Red, recently enjoyed an exuberant rebirth which resulted in millions of people watching the play through. Why did so many people watch? The reason is as simple as it is innovative: the viewers were able to input the controls through the chat function in each Twitch stream's page. 

This may sound stupid, but bear with me. For gamers such as myself, our favorite games are burned into our memory, there is no way for us to simply erase our memory and play through them again for the first time. Or so I thought. What resulted from Twitch Plays Pokemon (the name of the stream/community) was one of the most incredible things I've seen on the internet: total anarchy. Without getting too bogged down in the details, "Twitch estimated that over 1.16 million people participated [over the course of 16 days], with peak simultaneous participation at 121,000, and with a total of 55 million views during the experiment." Imagine being able to relive your favorite memory, would you pay to be able to do that? I would. This is a single game. Yes, Pokemon Red one of the most popular games of all time (in my opinion at least), but before TPP came along there were literally a handful of streams devoted to the original game, played on an emulator. Almost overnight it went from being least to most popular, all because of someone's innovative approach to content. 

This sounds simple, if not boring, which is understandable for people who aren't interested in videogames. But the important aspect of this event, which lasted for much longer than anyone including the creator intended, is that it spawned multiple knockoffs and imitations. Although none of them enjoyed the same popularity as the original, what with the new rules and mechanics, the introduction of "X Plays Y" is an interesting schematic that I am sure we will see more of in the near future.

 Where some people see individuals wasting away their lives in front of a computer screen, others see opportunity. Whether that opportunity is economic, psychological analysis or just pure nostalgia, it definitely is real, and I commend Amazon for recognizing that opportunity. 

I don't think that PotatoPlaysPokemon will catch on, though. There is only so much a franchise name can do for a product. 

US Equities Markets Optimistic After Fed Meeting Minutes, Bunds Fall 8.20.14

For a third day in a row, US equities rose as the minutes for the Fed's meeting on July 29-30th were made public. The market is approaching a record high of the S&P 500 from July 24th of 1987.98. (at time of writing it is 1986.51)

The S&P 500 has experienced a 4 percent rally starting in the first week of August, USD rose to an 11-month high against EUR. The price of Oil rose, contrasting with the past three sessions. Gold is down to a 2-week low.

Michael Gapen of Barclays Capital says the Fed "still sees labor markets as far from normalized and is prepared to remain patient."

The bottom line is that although the Fed recognizes and is happy about the recent improvements in the economy, the data doesn't warrant an increase in rates unless there is additionally impressive growth and development.