Regardless of the Fed funds rate or what you pay for a mortgage, the minimum return has just shot way up for businesses that require debt financing. It used to be low, maybe a few percentage points, but now you need 20% to try to pay off debt and make a profit.

Very few businesses meet that hurdle, especially with so many other businesses trying to survive, cutting margins all around.

I agree with Dan too on satellite radio.. and now it is impossible to go back to listening to commercials. Commercials assume that your time is worth like 2 cents… on radio at least.

I love my satellite radio in the car – no ads, 250 stations playing whatever type of music I want to listen to and NO ADS – another big difference between satellite and over the air radio. I pay something like $14 per month for XM and would die if they went belly up. I stream it through my computer as well when working at home and even in the office at times. I used to buy recorded music – no more. I haven’t bought a CD or downloaded an iTune for several years, since I got satellite radio. For me is is a huge winner product. I wish I could get a walkman type gadget so I could listen to it on the treadmill or exercise bike. My only one nitpick on the whole thing.

As far as getting the infrastructure into place, XM came already installed on my car. So zero cost there.

Satellite Radio always stuck me as a stupid idea in the first place. It’s got an uphill battle convincing people to pay for something that’s always been “free”. And most importantly, by the time the infrastructure gets fully into place (esp. the receiver units) it’s almost certain to get supplanted by universal wireless internet and streaming media. Why listen to a canned station when you can play your own station?

As far as the general problem, I think a part of this is still a holdover from the “dot-com” “New Economy”. People thought all the old rules didn’t matter — that somehow a company could operate forever without any cash flow. How and why they though that I’ve never quite grasped.

Not to say I don’t believe the economy is in substantial flux. It is — it is in the process of changing from an Industrial, Manufactured Goods based economy to an IP & Services based economy, and the inherent properties of IP vs. Mfr. Goods are a phase change — like ice to water to steam.

There are entire new business models and designs to scope out, and the changes will be as significant as the change from an Ag economy to an Industrial one — There are major problems with the heirarchical corporate design structure when applied to an economy based on information flowing unimpeded. Further, the cost of IP is almost entirely front-loaded — all the real expense is in making that “first” item. All of them after that are cheap as hell (esp. if you place the support costs under a separate “services” heading, which can be and often is decoupled from the IP itself). Production “Overhead” costs can thus approach zero after paying for that initial unit.

That’s going to have a lot effect on how the economy works. The last time, it rendered the entire old economic structure — Lords, Ladies, and the Feudal Enclave (Manor House, Castle, etc.) completely irrelevant, and took 250 years, and several wars (finalizing mainly with WW-I) to clear it all out.

I don’t think many people have addressed this shift — certainly not much, if at all, on the “popular” level. Most people sense that things are changing, but few, if any, really know how. The “Economy 2.0″ was just a rough draft. The idea is still correct. We’re working on the second set of revisions even now.

Meanwhile, you can get a mortgage on your house at 5%. Makes no sense…