Kiva Loan Number 17

– Sabina from Peru has fully repaid a Kiva loan

Location: Juliaca, Peru Repayment Term: 8 months (more info) Activity: Catering   Repayment Schedule: Monthly Loan Use: Purchase new cookware   Sabina is a very responsible mother. She is 64 years old and knows how to move her family forward. She lives in her own home with her two children, Jenry (age 45) and Sandra (age 41). What she wants most is to have a peaceful retirement. Sabina makes her living preparing food for large events, such as weddings, birthdays, baptisms, and traditional religious holidays. She works with a business partner who she trusts completely and is responsible for obtaining contracts to provide food. Sabina prefers to focus only on cooking and not participate in any other part of the business. She cooks very well and receives many orders. Her services are in high demand for parties throughout the city.

Sabina has been in business for 25 years and the most difficult part of her job is completing the orders she receives despite a lack of supplies. She manages to carry them out because she knows that her reputation and business are at stake. In the future, she hopes to open a large restaurant where she can sell her delicious dishes herself.

This is Sabina’s second loan with MFP. She is very happy to have the opportunity to receive a loan, and she hopes to make her payments on time. Sabina is one of the most active and responsible participants in her Communal Bank. With the loan of 1000 soles she requested, she will buy new cookware because the equipment she currently uses has deteriorated over time.

Translated from Spanish by Ronan Reodica, Kiva Volunteer

Sabina es una madre muy responsable, a sus 64 años ha sabido sacar a su familia adelante. Vive en su casa propia junto a sus dos hijos: Jenry de 45 y Sandra de 41 años y lo que más desea es tener una vejez tranquila. La labor que realiza es la preparación de comida para eventos grandes, como matrimonios, cumpleaños, bautizos o fiestas religiosas tradicionales. Ella trabaja junto a un socio de su entera confianza, el cual consigue los contratos para la comida, pues Sabina prefiere sólo cocinar y no participar mucho en los negocios. Por ello es que lo que más le gusta de su trabajo es cocinar y lo hace muy bien, es por eso que tiene muchos pedidos y es muy solicitada en las fiestas de su ciudad. Lleva 25 años en esta actividad y considera que lo más difícil es tener que cumplir con los pedidos que le realizan, ya que suelen ser muchos y no se da abasto para realizarlos, pero igual sabe que tiene que hacerlo, porque se juega la reputación de su negocio. Para el futuro anhela abrir un restaurante muy grande, donde pueda vender sus deliciosos platillos ella misma. Este es el segundo préstamo de Sabina con MFP, ella se siente muy feliz de la oportunidad de crédito, por lo que espera poder pagarlo a tiempo. En su banco comunal es una de las socias más participativas y responsables. Con los mil nuevos soles solicitados comprará nuevas ollas para renovar las q

(click to continue reading Kiva – Sabina from Peru has fully repaid a Kiva loan.)

Right-to-repair bill

I don’t know shite about repairing cars; the last automobile I worked on myself was a 1969 VW Bug many many eons ago1, but I totally understand this Right-To-Repair bill from the point of view of the small repair shops. Car owners should not be forced to use dealerships to repair their own property.

Fifty One Chevy

despite the investment of thousands of dollars in diagnostic equipment, computers and training by independent service garages, car manufacturers continue to hold back on some of the information that your mechanic needs in order to properly repair your car and reset your codes and warning lights.

It is a long-running battle that most consumers are unaware of as their local mechanics quietly struggle to locate those codes against a determined auto industry unwilling to part with them.

Massachusetts is now poised to solve this problem and car-driving consumers should pay attention this fall when the Massachusetts Legislature takes up landmark legislation that would force manufacturers to respect the right of consumers to access their own repair information.

The legislation, known as Right to Repair, is seen by car manufacturers as a threat to the lucrative service business in their dealerships and they are massing their lobbyists on Beacon Hill in an effort to defeat it.

[Click to continue reading COMMENTARY: Right-to-repair bill shifts control from dealer to owner – Quincy, MA – The Patriot Ledger]

I found the Senate version here, and links to PDFs of the House bills here

I may not be getting my hands dirty pulling out transmissions these days, but I’d be perturbed if my computer was suddenly deemed off limits for a disk upgrade, if I could no longer open my printer to add more RAM, or if my routers required to be taken into a DLink shop for service every 20,000 megabits of data2

Footnotes:
  1. ok, I give in, here’s the car:

    Seth and Josh 1986

    click to embiggen []

  2. uhh, well, you know what I mean []

Toxic Water and Your Government

This is what happens when you let Republicans and Corporatist Democrats control Congress: there are real consequences to real people, and death panels for all of us.

Saying goodbye is harder than it seems

Jennifer Hall-Massey knows not to drink the tap water in her home near Charleston, W.Va. In fact, her entire family tries to avoid any contact with the water. Her youngest son has scabs on his arms, legs and chest where the bathwater — polluted with lead, nickel and other heavy metals — caused painful rashes. Many of his brother’s teeth were capped to replace enamel that was eaten away.

Neighbors apply special lotions after showering because their skin burns. Tests show that their tap water contains arsenic, barium, lead, manganese and other chemicals at concentrations federal regulators say could contribute to cancer and damage the kidneys and nervous system.

“How can we get digital cable and Internet in our homes, but not clean water?” said Mrs. Hall-Massey, a senior accountant at one of the state’s largest banks.

When Mrs. Hall-Massey and 264 neighbors sued nine nearby coal companies, accusing them of putting dangerous waste into local water supplies, their lawyer did not have to look far for evidence. As required by state law, some of the companies had disclosed in reports to regulators that they were pumping into the ground illegal concentrations of chemicals — the same pollutants that flowed from residents’ taps.

But state regulators never fined or punished those companies for breaking those pollution laws.

This pattern is not limited to West Virginia. Almost four decades ago, Congress passed the Clean Water Act to force polluters to disclose the toxins they dump into waterways and to give regulators the power to fine or jail offenders. States have passed pollution statutes of their own. But in recent years, violations of the Clean Water Act have risen steadily across the nation, an extensive review of water pollution records by The New York Times found.

In the last five years alone, chemical factories, manufacturing plants and other workplaces have violated water pollution laws more than half a million times. The violations range from failing to report emissions to dumping toxins at concentrations regulators say might contribute to cancer, birth defects and other illnesses.

[Click to continue reading Toxic Waters – Clean Water Laws Are Neglected, at a Cost in Suffering – Series – NYTimes.com]

If you haven’t read this article, you should. There’s also an interactive chart at the NYT worth browsing. There is no money allocated to investigate polluters so that polluting companies can make slightly more profit. Is it worth it?

500,000 violations in five years – that’s a lot of un-investigated crime. If a person committed this many affronts to society in five years, jail would be in their future. A corporation? Not much of a consequence. I say take away their corporate charters, dissolve the company, sell its assets. If the corporation fulfills a needed role in the economy, new, more law-abiding corporations will take the place of the miscreants.

For a closer look at some of the offenders, check out this chart, sortable by zip code, or city, or state. For instance, in Chicago, in the last five years, there are 146 facilities that have permits to discharge pollutants. Of these, zero have been fined, although some have not had their sites inspected since 1978. Hey, see no evil, right?

Like1

Mwrdgc Calumet Wrp 400 East 130th Street, Chicago, Illinois 60628

$0 Total Fines
Total Inspections: 17
Last Inspection: May 10, 1979
Classification: Sewerage Systems

13 Violations

This facility has been out of regulatory compliance 6 of the past 12 quarters.

so, out of compliance more often than not in the last four years, yet hasn’t actually had an on-site inspection2 in more than thirty fracking years. Lovely.

Illinois in general, per the NYT investigation, has 7,304 facilities that are permitted to release some toxic materials into the environment, but of these, again most have not been inspected in many, many years, if ever, despite having thousands of violations cited against these companies. Only three sites have actually had fines levied against them:

Equistar Chemicals, Lp Morris , last inspected – Oct. 4, 1978 – 5 violations fines totaling: $714,200

Mg Industries Mapleton last inspected – Feb. 16, 1995 – 1 violation, fine totaling: $383,501

Kmart Distribution Ctr 8289 Manteno No Information re: last inspection, fine of $102,422

I suspect there is a lot of pollution being released that nobody in the EPA knows about. How about in your state? Aren’t you curious how bad your water is after reading paragraphs like:

In some cases, people got sick right away. In other situations, pollutants like chemicals, inorganic toxins and heavy metals can accumulate in the body for years or decades before they cause problems. Some of the most frequently detected contaminants have been linked to cancer, birth defects and neurological disorders.

Records analyzed by The Times indicate that the Clean Water Act has been violated more than 506,000 times since 2004, by more than 23,000 companies and other facilities, according to reports submitted by polluters themselves. Companies sometimes test what they are dumping only once a quarter, so the actual number of days when they broke the law is often far higher. And some companies illegally avoid reporting their emissions, say officials, so infractions go unrecorded.

Environmental groups say the number of Clean Water Act violations has increased significantly in the last decade. Comprehensive data go back only five years but show that the number of facilities violating the Clean Water Act grew more than 16 percent from 2004 to 2007, the most recent year with complete data.

Footnotes:
  1. The EPA database has more complete details if you are interested. []
  2. that the New York Times could find []

Arthur Schack Tosses Out Cases, Brooklyn Style

Awesome, Judge Schack is my new hero:

A Little to the Left

The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. While national debate focuses on bank bailouts and federal aid for homeowners that has been slow in coming, the hard reckonings of the foreclosure crisis are being made in courts like his, and Justice Schack’s sympathies are clear.

He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model.

…Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

“If you are going to take away someone’s house, everything should be legal and correct,” he said. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

[Click to continue reading As a Foreclosure Judge, Arthur Schack Tosses Out Cases, Brooklyn Style – NYTimes.com]

The bankers and real estate firms whine about his rulings of course, but the Judge is only following the law. I hope more judges follow Justice Schack’s model and stop turning a blind eye to the careless mistakes of greedy banks.

Half Done

“To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does,” said Katherine M. Porter, a visiting professor at the School of Law at the University of California, Berkeley, and a national expert in consumer credit law. “His rulings are hardly revolutionary; it’s unusual only because we so rarely hold large corporations to the rules.”

and that right there is the crux of our societal problem. Companies like Blackwater, Exxon Mobile, WalMart and General Electric that frequently break laws because they know the fines, if any, are going to be so small as to not even show up on a year-end balance sheet, companies like that should be forced to surrender their corporate charters. Hey, it’s capitalism, there will be new corporations to take their place.

Kiva Loan Numbr 1

My first Kiva loan1

Sandra Iris, Aleida Victoria, Florentina, Olmar, Rosario, Claudia Erica*, Rosario Del Carmen, Ninoska Diana*, Brindicia, Wilder Alvaro, Rossemary, Isabel Maria * not pictured About the Loan (For privacy reasons, the Field Partner has requested that last names and location be undisclosed)

Location: Location Undisclosed, Bolivia Repayment Term: 6 months (more info)

Activity: Retail Repayment Schedule: Monthly Loan Use: Operating capital Currency Exchange Loss: Possible

The group “Las Pioneras” (the Pioneers) is led by Sra. Sandra Iris and is comprised of 12 members. The majority of the group is involved in retail businesses that sell groceries, food, videos, cleaning supplies, and milkshakes. Other members are engaged in house painting and tailoring. They are not worried about the competition and each member maintains a vending location. They know how to get ahead because of their experience and dedication to their businesses.

This group loan will be used acquire merchandise, materials, and supplies that will help the members increase their earnings so that they can improve the quality of life for their families. Many of the members have previous experience working in solidarity groups and with other financial institutions, so they are aware that responsibility and cooperation is required in order to gain the confidence and support of Fundación Agrocapital.

Translated from Spanish by Ronan Reodica, Kiva Volunteer

El grupo “Las Pioneras” esta representado por la señora Sandra Iris y conformada por 12 miembros que en sus mayoría se dedican a la venta de barrotes en tiendas de barrio, venta de comida, videos, material de limpieza y batidos otros se dedican a la pintura de casas y otras a la confección de prendas de vestir. La competencia no les preocupa mucho ya que cada una es dueña de sus casetas y saben como salir adelante gracias a su experiencia y su dedicación a sus negocios. El financiamiento es para la adquisición de más mercadería para hacer crecer sus ingresos y materiales e insumos que ayuden a incrementar sus ingresos para mejorar así la calidad de vida de sus familias. En cuanto a la experiencia de créditos solidarios muchas de las socias ya contaban con ella gracias a anteriores financiamientos con otras instituciones por lo que conocen la responsabilidad y la unidad que se requiere para adquirir la confianza y el apoyo de la Fundación Agrocapital.

(click to continue reading Kiva – Las Pioneras Group from Bolivia has fully repaid a Kiva loan.)

Footnotes:
  1. well, I think, anyway. Didn’t keep good records of this at first. Maybe this is just the first one I blogged []

Kiva Loan Number 15

Monique Niouky from Senegal has fully repaid a Kiva loan

Location: Thiékène; Thiès, Senegal

Repayment Term: 8 months (more info) Activity: Shoe Sales   Repayment Schedule: At end of term

Loan Use: Commerce in cloth, shoes, and perfumes

Monique NIOUKY is a 54-year-old woman, married, and the mother of four children. She runs a small business selling cloth, shoes, and perfume. With this business, she manages to support her family. Translated from French by Dan Kuey, Kiva Volunteer

Monique NIOUKY est une femme de 54 ans, mariée et mère de 4 enfants. Elle fait du petit commerce de tissu, chaussure et parfum. avec cette activité, elle parvient à prendre en charge sa famille.

(click to continue reading Kiva – Monique Niouky from Senegal has fully repaid a Kiva loan.)

Country: Senegal
Avg Annual Income: $1,759
Currency: Communauté Financière Africaine Francs BCEAO (XOF)
Exchange Rate: 458.6083 XOF = 1 USD


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Kiva Loan Number 15

Monique Niouky from Senegal has fully repaid a Kiva loan

Location: Thiékène; Thiès, Senegal

Repayment Term: 8 months (more info) Activity: Shoe Sales   Repayment Schedule: At end of term

Loan Use: Commerce in cloth, shoes, and perfumes

Monique NIOUKY is a 54-year-old woman, married, and the mother of four children. She runs a small business selling cloth, shoes, and perfume. With this business, she manages to support her family. Translated from French by Dan Kuey, Kiva Volunteer

Monique NIOUKY est une femme de 54 ans, mariée et mère de 4 enfants. Elle fait du petit commerce de tissu, chaussure et parfum. avec cette activité, elle parvient à prendre en charge sa famille.

(click to continue reading Kiva – Monique Niouky from Senegal has fully repaid a Kiva loan.)

Country: Senegal
Avg Annual Income: $1,759
Currency: Communauté Financière Africaine Francs BCEAO (XOF)
Exchange Rate: 458.6083 XOF = 1 USD

Tribune Bondholders Fault Zell Takeover

Sam Zell might rue the day he impulsively decided to purchase the Tribune Corporation

Happy 4th of July -Wrigley, Chicago Tribune tower

Disgruntled Tribune Co. bondholders have asked a U.S. bankruptcy judge to let them investigate Sam Zell’s 2007 buyout of the newspaper-and-television chain in an effort to derail a plan that would hand the company over to its banks.

The filing, made late Wednesday, calls the $8.2 billion transaction a “fraudulent conveyance” that left Tribune insolvent from the onset of the 2007 deal. It accuses senior lenders led by J.P. Morgan Chase & Co. of completing a leveraged buyout they should have known would push the company into bankruptcy.

Fraudulent conveyance” is a legal term most often used in bankruptcy court, in which creditors allege a company has used assets in a way unfair to creditors. In the context of leveraged buyouts, creditors can argue a deal loaded up a company with too much debt, leaving it undercapitalized and unable to meet future obligations.

The filing will seek to slow or nullify an advancing plan for Tribune to exit from bankruptcy protection with J.P. Morgan, Bank of America Corp.’s Merrill Lynch and other banks owning nearly all of Tribune in return for the banks forgiving about $8 billion in debt.

Bondholders would likely receive only a sliver of new equity under the deal. The bondholders seeking to investigate Mr. Zell’s buyout of Tribune represent more than 18% of the company’s bond debt, according to the court filing. The bondholder’s requested investigation centers around some $1.26 billion in notes issued between 1992 and 1997.

[Click to continue reading Tribune Bondholders Fault Zell Takeover – WSJ.com]

[non-WSJ subscribers use this link]

why did Sam Zell even buy the Trib if not to strip it of assets and make money on the deal? He reminds me of a caricature of an 19th century robber baron, a comical villain in a graphic novel. Except of course, there are real lives effected by Zell’s greed.

and since I had to look up Fraudulent Conveyance, here is the Wikipedia entry:

In the United States, fraudulent conveyances or transfers are governed by two sets of laws that are generally consistent. The first is the Uniform Fraudulent Transfer Act (“UFTA”) that has been adopted by all but a handful of the states.The second is found in the federal Bankruptcy Code.

There are two kinds of fraudulent transfer. The archetypal example is the intentional fraudulent transfer. This is a transfer of property made by a debtor with intent to defraud, hinder, or delay his or her creditors. The second is a constructive fraudulent transfer. Generally, this occurs when a debtor transfers property without receiving “reasonably equivalent value” in exchange for the transfer if the debtor is insolvent at the time of the transfer or becomes insolvent or is left with unreasonably small capital to continue in business as a result of the transfer. Unlike the intentional fraudulent transfer, no intention to defraud is necessary.

The Bankruptcy Code authorizes a bankruptcy trustee to recover the property transferred fraudulently for the benefit of all of the creditors of the debtor if the transfer took place within the relevant time frame. The transfer may also be recovered by a bankruptcy trustee under the UFTA too, if the state in which the transfer took place has adopted it and the transfer took place within its relevant time period. Creditors may also pursue remedies under the UFTA without the necessity of a bankruptcy.

Because this second type of transfer does not necessarily involve any actual wrongdoing, it is a common trap into which honest, but unwary debtors fall when filing a bankruptcy petition without an attorney. Particularly devastating and not uncommon is the situation in which an adult child takes title to the parents’ home as a self-help probate measure (in order to avoid any confusion about who owns the home when the parents die and to avoid losing the home to a perceived threat from the state). Later, when the parents file a bankruptcy petition without recognizing the problem, they are unable to exempt the home from administration by the trustee. Unless they are able to pay the trustee an amount equal to the greater of the equity in the home or the sum of their debts (either directly to the Chapter 7 trustee or in payments to a Chapter 13 trustee,) the trustee will sell their home to pay the creditors. Ironically, in many cases, the parents would have been able to exempt the home and carry it safely through a bankruptcy if they had retained title or had recovered title before filing.

Even good faith purchasers of property who are the recipients of fraudulent transfers are only partially protected by the law in the U.S. Under the Bankruptcy Code, they get to keep the transfer to the extent of the value they gave for it, which means that they may lose much of the benefit of their bargain even though they have no knowledge that the transfer to them is fraudulent.

Often fraudulent transfers occur in connection with leveraged buyouts (LBOs), where the management/owners of a failing corporation will cause the corporation to borrow on its assets and use the loan proceeds to purchase the management/owner’s stock at highly inflated prices. The creditors of the corporation will then often have little or no unencumbered assets left upon which to collect their debts. LBOs can be either intentional or constructive fraudulent transfers, or both, depending on how obviously the corporation is financially impaired when the transaction is completed.

Although not all LBOs are fraudulent transfers, a red flag is raised when, after an LBO, the company then cannot pay its creditors

[Click to continue reading Fraudulent conveyance – Wikipedia, the free encyclopedia]

The Zell deal seems1 to fit that definition, does it not?

At the time of the buyout, Tribune was valued at $8.2 billion, excluding debt. Including Tribune’s existing borrowings, the deal placed more than $12 billion of debt on the company, or about 10 times its annual cash flow.

“The LBO — and the unsustainable debt burden it imposed on a business already in a secular decline — undoubtedly caused the debtor’s demise,” the filing said. “The remedying of the LBO will most certainly dictate the economic outcome of these Chapter 11 cases

Footnotes:
  1. and yes, I am not a lawyer, and not even particularly well versed in bankruptcy proceedings, so of course this is only speculation []

Food Firms Threaten Possible Sugar Shortage

Sounds to me like there’s more to this story than simple shortages of sugar.

Margies Candies

In a letter to Agriculture Secretary Thomas Vilsack, the big brands — including Kraft Foods Inc., General Mills Inc., Hershey Co. and Mars Inc. — bluntly raised the prospect of a severe shortage of sugar used in chocolate bars, breakfast cereal, cookies, chewing gum and thousands of other products.

The companies threatened to jack up consumer prices and lay off workers if the Agriculture Department doesn’t allow them to import more tariff-free sugar. Current import quotas limit the amount of tariff-free sugar the food companies can import in a given year, except from Mexico, suppressing supplies from major producers such as Brazil.

While agricultural economists scoff at the notion of an America bereft of sugar, the food companies warn in their letter to Mr. Vilsack that, without freer access to cheaper imported sugar, “consumers will pay higher prices, food manufacturing jobs will be at risk and trading patterns will be distorted.”

Officials of many food companies — several of which are enjoying rising profits this year despite the recession — declined to comment on how much they might raise prices if they don’t get their way in Washington.

[Click to continue reading Food Firms Warn of Sugar Shortage – WSJ.com]
[non-WSJ subscribers use this link]

The world’s biggest sugarcane producer, Brazil, is of course diverting much of its crop to make ethanol instead of sugar. But is it really such a horrible thing if sugar become expensive? Maybe food manufacturers will stop using so much of it in every damn thing they make? Ha.

Moto Watermelon Cucumber

U.S. sugar producers doubt whether any price savings would be passed along to consumers in any case: historically, just has helped the profits of food manufacturers:

Jack Roney, the alliance’s1 chief economist, said food companies probably wouldn’t pass along any savings to consumers from a widened import quota. But each one-cent drop in the price of sugar costs U.S. farmers about $160 million, he said.

“We take offense at any notion of reducing producer prices for sugar having any benefit for consumers, because historically we’ve never seen any pass-through of lower commodity prices of ingredients,” he said. “It really is a profit-increasing opportunity for user companies.”

Footnotes:
  1. American Sugar Alliance – a trade organization of sugar-beet and cane farmers []

The Finacial Press vs. Matt Taibbi

Really a trinity, the financial press, their client, Goldman Sachs, and their new enemy Matt Taibi

Mainstream financial journalism is doing its level, eye-rolling, heavy-sighing best to stuff Matt Taibbi back into the alt-press hole he came from, but he’s not going along with it, and the mainstreamers in any case are making a big mistake.

The Rolling Stone writer cemented his status as the enfant terrible of the business press with “The Great American Bubble Machine,” a 10,000-word excoriation of Goldman Sachs, a muckraker’s-eye view of Goldman history, exploring the bank’s and Wall Street’s contributions to various financial disasters, starting with the Great Depression, skipping to the Tech Wreck, the Mortgage Wreck, the oil bubble of 2008, the bailout, and the looming cap-and-trade plan. Salted with “fuck”s, “shit”s and written with brio and hyperbole in the New Journalism tradition, it caught the financial community, which very much includes the financial media, utterly off-guard, unused as it is to hearing its flagship described as a “giant vampire squid wrapped around the face of humanity.”

[Click to continue reading Don’t Dismiss Taibbi : CJR]

Well worth reading to see what exactly all the over-paid pundits say in their defense of Goldman.

Traders Blamed for Oil Spike

Speculators like Goldman Sachs taking advantage of pliable politicians and regulators to change rules? Amazingly, this is what Matt Taibbi described a few months ago. Perhaps someone in the Obama administration reads Rolling Stone?

Don't Oil this index
[Do Not Oil This Index]

The Commodity Futures Trading Commission plans to issue a report next month suggesting speculators played a significant role in driving wild swings in oil prices — a reversal of an earlier CFTC position that augurs intensifying scrutiny on investors.

In a contentious report last year, the main U.S. futures-market regulator pinned oil-price swings primarily on supply and demand. But that analysis was based on “deeply flawed data,” Bart Chilton, one of four CFTC commissioners, said in an interview Monday.

The CFTC’s new review, due to be released in August, adds fuel to a growing debate over financial investors who bet on the direction of commodities prices by buying contracts tied to indexes. These speculators have invested hundreds of billions of dollars in contracts that were once dominated by producers and consumers who sought to hedge against oil-market volatility.

[Click to continue reading Traders Blamed for Oil Spike – WSJ.com]
[non-WSJ subscribers click this link]

and

The debate over speculators underscores the shifting nature of commodities trading in recent years. Before the mid-1990s, these markets were dominated by entities that had physical dealings with the underlying commodity, and “speculators” who often took the opposite position, providing liquidity to markets.

But a new group of investors has emerged in recent years. Those who want to bet on commodities prices have increasingly put their money in indexes that track the value of futures contracts, in which investors promise to pay a certain amount in the future for oil and other commodities. As of July 2008, financial investors had about $300 billion riding on these indexes, roughly four times the level in January 2006, according to the International Energy Agency, a Paris-based watchdog.

Separately, these investors may buy derivatives, not directly traded on futures exchanges, that let them make contrary bets to offset their risks.

Crude-oil prices surged in July 2008 to a record $145 a barrel, then dropped to about $33 in December. Oil now trades at around $68 a barrel.

Of course, Goldman Sachs is not mentioned by name in this article, why would they be? They are just one the single largest futures speculators

Is Customer Service a Media Channel? Ask Zappos

Amazon has said it is purchasing Zappos for over $800,000,000. Why so high?

Bob's Repair Shine

Pete Blackshaw of AdAge speculates:

Zappos is a game changer, and it found value — and ferocious word-of-mouth and brand advocacy — in a place most of us leave for dead and certainly don’t consider even close to being a media channel: customer service. They took this “cost center” input and turned it into an unassailable asset, fortified by the founder-CEO’s sometimes “cult-like” (arguably irrational, by the typical marketing book) obsession with serving the consumer at all costs. It wasn’t flaky. He approached this with focus, discipline, real incentives and an obsession over a “different” set of numbers.

Zappos did this at a critical juncture for all of us. We know word-of-mouth matters. We suspect “advocacy” might be the metric that truly moves the needle. Even separate from the Amazon deal, Zappos probably did more to shape our collective mind-set around the importance of “paid” vs. “earned” media, and it titled us much toward the later.

[Click to continue reading Is Customer Service a Media Channel? Ask Zappos – Advertising Age – CMO Strategy]

At least for now, Zappos will still be an autonomous subsidiary, remain headquartered in Las Vegas, and maintain its same executive leadership.

I’ve been a long-time customer of both corporations for a long time, and if any of Zappos culture rubs off on Amazon, Amazon will be well served. Amazon is a fine company, but they are a faceless corporate behemoth, a Wal-Mart of the internet, selling a little bit of everything. Zappos on the other hand still feels like it is run by somebody who personally cares for its customers, a sort of mom-and-pop corner store that knows everybody on a first name basis. The kind of place that gives little Johnny candy when he goes by. Poor metaphor, bottom line, Zappos customer service is just spectacularly friendly in all interactions we have had with them.

Amazon, on the other hand, occasionally is bit Orwellian. I’m sure I wasn’t the only person who upon hearing the news of the acquisition immediately twittered:so will Amazon steal into my house at night and reclaim shoes I’ve bought from Zappos.

I do hope Zappos maintains what it is that makes it Zappos.

A.P. Cracks Down on Unpaid Use of Articles on Web

Will be curious as to how this shakes out.

Taking a new hard line that news articles should not turn up on search engines and Web sites without permission, The Associated Press said Thursday that it would add software to each article that shows what limits apply to the rights to use it, and that notifies The A.P. about how the article is used.

Tom Curley, The A.P.’s president and chief executive, said the company’s position was that even minimal use of a news article online required a licensing agreement with the news organization that produced it. In an interview, he specifically cited references that include a headline and a link to an article, a standard practice of search engines like Google, Bing and Yahoo, news aggregators and blogs.

[Click to continue reading A.P. Cracks Down on Unpaid Use of Articles on Web – NYTimes.com]

Alternative Google

Websites like Google are going to be in for a bit of a dustup

Search engines and news aggregators contend that their brief article citations fall under the legal principle of fair use. Executives at some news organizations have said they are reluctant to test the Internet boundaries of fair use, for fear that the courts would rule against them.

News organizations already have the ability to prevent their work from turning up in search engines — but doing so would shrink their Web audience, and with it, their advertising revenues. What The A.P. seeks is not that articles should appear less often in search results, but that such use would become a new source of revenue.

Right, there is a simple addition that webmasters can add to their site that tells Google’s automated indexing software to “go away”:

The robot exclusion standard, also known as the Robots Exclusion Protocol or robots.txt protocol, is a convention to prevent cooperating web spiders and other web robots from accessing all or part of a website which is otherwise publicly viewable. Robots are often used by search engines to categorize and archive web sites, or by webmasters to proofread source code. The standard is unrelated to, but can be used in conjunction with, sitemaps, a robot inclusion standard for websites.

[Click to continue reading Robots exclusion standard – Wikipedia, the free encyclopedia]

Not a Good Sign

If A.P. did that, they would lose search engine generated traffic, but that isn’t really what A.P. wants. A.P. wants traffic, and to be paid for the traffic. I doubt it will happen as seamlessly they want, but we’ll soon see. Newspaper executives also don’t like blogs much:

Executives at newspapers and other traditional news organizations have long complained about how some sites make money from their work, putting ads on pages with excerpts from articles and links to the sources of the articles.

but I don’t know if that particular genie could ever be crammed back into its bottle; the bottom of the bottle is missing, and digital content flows wherever it can, instantly.

and this is puzzling:

Each article — and, in the future, each picture and video — would go out with what The A.P. called a digital “wrapper,” data invisible to the ordinary consumer that is intended, among other things, to maximize its ranking in Internet searches. The software would also send signals back to The A.P., letting it track use of the article across the Web.

If someone cuts and pastes an A.P. article from some other site, how is this magic technological bullet going to still be attached? Either there is more to the process than the A.P. admits, or else they are really deluded1.2

Footnotes:
  1. not that it matters, but John Gruber, always an astute observer of these sorts of matters, agrees with me []
  2. corrected the URL, oopsie []

This is not going to end well for CBS

Dan Rather’s lawsuit against his former employers, CBS News, for firing him because of discussion over George W. Bush’s lack of National Guard service is continuing.

One Eye to Rule Them

The New York Times reports:

Dan Rather won significant victories Tuesday in his suit against his former network, CBS. He won access to more than 3,000 documents that his lawyer said were expected to reveal evidence that CBS had tried to influence the outcome of a panel that investigated his much-debated “60 Minutes” report about former President George W. Bush’s military record.

Mr. Rather also won an appeal to restore a fraud charge against CBS that had been dismissed. Martin Gold, the lawyer representing the former anchor of the “CBS Evening News,” called it “a very successful day for us; we got everything.”

Mr. Rather called it a “good day” for his side and — referring to the name for the CBS headquarters — “a bad day for Black Rock.”

[Click to continue reading Rather Wins a Round in Lawsuit Against CBS – NYTimes.com]

Eric Boehlert of Media Matters adds:

You’ll recall that late last year we learned, via Rather’s lawsuit, that internal memos indicated that CBS when first facing the right-wing firestorm over its 60 Minutes report about Bush’s National Guard years, considered appointing Matt Drudge to sit on an “independent” fact-finding board to investigate the scandal. (A board which Bush refused to answers questions about his Guard service from.)

In fact, we learned that CBS was in full panic mode and was willing to take whatever step necessary to placate the right-wing fanatics frothing about Memogate. The picture painted by the CBS memos and documents already reviewed by Rather suggest a craven news organization that was less interested in uncovering the truth about the disputed memos, and more interested in appeasing Rush Limbaugh. It wanted to “mollify the right,” as one internal CBS memo put it.

As I said, my guess is that with Rather and his lawyers about to dive into a new batch of documents, that portrait will only become more vivid.

And here’s the kicker for the former Tiffany Network: Rather has vowed to never settle the case out of court.

[Click to continue reading This is not going to end well for CBS | Media Matters for America]

Like I’ve said1 before, I wish Dan Rather well in this lawsuit, and not just because he once lived in the same apartment as me2. The shrill right-wingers who seemingly control CBS should be deported, at the least.

Footnotes:
  1. in those URLs above, and probably in others I’m too lazy to find right now []
  2. at different times obviously, an apartment located on Rio Grande near West Martin Luther King Boulevard, near UT-Austin campus, according to my landlord at the time. []

Medical Marijuana in California Aspires to Go Commercial

Seems like good problems to have

Introduced as a Friend

LAKE FOREST, Calif. — Sellers of marijuana as a medicine here don’t fret about raids any more. They’ve stopped stressing over where to hide their stash or how to move it unseen.

Now their concerns involve the state Board of Equalization, which collects sales tax and requires a retailer ID number. Or city planning offices, which insist that staircases comply with the Americans With Disabilities Act. Then there is marketing strategy, which can mean paying to be a “featured dispensary” on a Web site for pot smokers.

After years in the shadows, medical marijuana in California is aspiring to crack the commercial mainstream.

“I want to do everything I can to run this as a legitimate business,” says Jan Werner, 55 years old, who invested in a pot store in a shopping mall after 36 years as a car salesman.

Some now are using traditional business practices like political lobbying and supply-chain consolidation. Others are seeking capital or offering investment banking for pot purveyors. In Oakland, a school offers courses such as “Cannabusiness 102” and calls itself Oaksterdam University, after the pot-friendly Dutch city. As shops proliferate, there are even signs the nascent industry could be heading for another familiar business phenomenon: the bubble.

As the business matures, ancillary ventures are springing up. In Oakland, OD Media manages advertising and branding for about a dozen pot clients. An Oakland lawyer, James Anthony, and three partners have started a firm called Harborside Management Associates to give dealers business advice. A pot activist named Richard Cowan has opened what he envisions as an investment bank for pot-related businesses, called General Marijuana.

Mr. Cowan is also chief financial officer of Cannabis Science Inc., which is trying to market a pot lozenge for nonsmokers. It was founded by Steve Kubby, a longtime medical-marijuana advocate who a decade ago was acquitted of a pot-growing charge but briefly jailed for having illegal mushrooms in his home. Mr. Kubby says there is “no more alternative culture” at the company, which went public in March and has hired a former pharmaceutical-industry scientist to try to win Food and Drug Administration approval for the lozenge.

[Click to continue reading Medical Marijuana in California Aspires to Go Commercial – WSJ.com]

[non-WSJ subscribers use this link]

and wherever there’s a confluence of money and politics, lobbyists cannot be far behind:

Lobby Horse

To defend their interests, some pot proprietors are hiring lobbyists. Messrs. Shofner and Werner pay consulting fees to Ryan Michaels, a political organizer with an expertise in med-pot compliance issues.

There are signs medical pot’s increasing business legitimacy is crowding the market. A 20-mile stretch of Ventura Boulevard in the San Fernando Valley now has close to 100 places to buy. “So many dispensaries have come along, the prices are dropping,” says one operator, Calvin Frye. Two years ago, his least expensive pot was about $60 for an eighth of an ounce. Now it is $45.

Across the country, a med-pot bill is working its way through New York’s state legislature. If it makes it, entrepreneurs are getting ready.

Larry Lodi, a 49-year-old Little League umpire from Long Island, spent two days at Oaksterdam University in May, learning the fine points of cultivation and distribution. Mr. Lodi envisions a business that would link the growers and the sellers of medical marijuana. “I want to be the middleman,” he says.