Logical Eccentricity

The Federal Reserve unanimously voted to increase the federal funds
rate to 3.25% and the discount rate to 4.25%. Both rates were increased
a quarter-percentage point for the ninth straight time.

This increase is designed to continue removing stimulas from the
economny. While the economy seems to be slowing, much of the bad news
is coming from high energy prices. Dispite this, the fed feels that,
“the expansion remains firm and labor market conditions continue to
improve gradually.” As a result, “the committee believes that policy
accommodation can be removed at a pace that is likely to be measured.”

The Fed is expected to stop raising rates, but has been vague about
timing. They will stop when they deem the fed funds rate to be
“neutral,” neither slowing growth nor stimulating inflation. Economists
say a neutral fed funds rate lies somewhere between 3 percent and 5
percent but policy-makers have been loath to pin that down as they
assess incoming economic data. After cutting rates 13 times through
June 2003 to a 1958 low of 1 percent, the Fed last June started
removing stimulus from the economy through a series of gradual
increases.

After Monday’s Supreme Court decision that companies that create
peer-to-peer applications could be held liable, BitTorrent could be in
potential danger. However, unlike Grokster, BitTorrent has far more
convincing case for it. The creator, didn’t create BitTorrent for the
explicit reason of file sharing, in fact, he advised people not to use BitTorrent for illegal purposes.

What can, and probably will be attacked very soon are the tracker
sites. The sites that distribute the .torrent file, and then “tracks”
all the people that are downloading the file. In May several sites
where shut down, elitetorrents - this was shut down mainly for
distributing Star Wars: Revenge of the Sith, before it aired, and
btefnet - this provided television shows a few hours after they first
aired.

In response to this weakness in BitTorrent, there are several
attempts to create a “trackerless” system. A system that doesn’t need a
central tracker to manage the downloads. This programs are still in
development, but will play a major in the months to come.

I’ve installed a few plugins, created a cool theme, and created
some pages for more content. This completes version 1.0 of Logical
Eccentricity News. Enjoy it.

Google ended trading today above $300. Back when Google IPOed I had
said that it would fall to under $50. I was way off. While I now
understand the company to a greater extent than before, thanks to MOA,
I still don’t understand what investors see in to push the price to
$300. Maybe I should do a DCF for it, and try to get a better idea of what it should be valued at.

On Monday the US Supreme Court rules that companies that create
peer-to-peer applications designed, and promoted to encourage copyright
infringment could be held liable for the copyright infringment.
Peer-to-peer companies such as Grokster and Morpheus parent StreamCast
Networks can be sued and held legally liable for the copyright
infringement of the people using their software, if the companies
actively encourage that infringement. Any company that knowingly
provides a home for widespread copyright infringement, is at risk of
being held liable. The test will be whether they actively and knowingly
encouraged that piracy.

BitTorrent will not face many problems from this ruling. First off,
its becoming harder to shut down. The main tracker system is changing
and BT is becoming a tracker-less. More imporantly, the main purpose of
BT is to distribute large files, and it is often used for linux
distributions, and other open source software. What’s more, is that
there is not one company, there are multiple companies that create
BitTorrent clients. No developer of BitTorrent clients could be held
liable for their programs.