Tag: Business

Kiva Loan Numbr 1

Seth Anderson0 comment

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 [↩]

Tribune Bondholders Fault Zell Takeover

Seth Anderson0 comment

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

Seth Anderson0 comment

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

Seth Anderson0 comment

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

Seth Anderson1 Comment

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

Seth Anderson0 comment

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

Seth Anderson0 comment

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

Seth Anderson0 comment

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

Seth Anderson2 Comments

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.

Cellphone Gripes Worthy of Congress’s Time

Seth Anderson0 comment

David Pogue has a long list of issues that could be discussed at the Senate Commerce Committee hearings about cellphone exclusivity contracts. Questions such as: why is text messaging charged at such a higher rate than email messaging? and my pet peeve: why is there that annoying 15 second automated voice before you can leave or listen to a voicemail? So irritating.

Cell phone-iphile

The carriers can’t possibly argue that transmitting text-message data costs them that much money. One blogger (http://bit.ly/gHkES) calculated that the data in a text message costs you about 61 million times as much as the same message sent by e-mail.

…

15-SECOND INSTRUCTIONS This one makes me crazy. When I call to leave you a voicemail message, the first thing I hear, before I’m allowed to hear the beep, is 15 seconds of instructions. “To page this person, press 5.” Page this person!? Oh, sorry, I didn’t realize this was 1980! “When you have finished recording, you may hang up.” Oh, really!? So glad you mentioned that! I would have stayed on the line forever!

And then when I call in for messages, I’m held up for 15 more seconds. “To listen to your messages, press 1.” Why else would I be calling!?

(Yes, there are key-presses that can bypass the instructions. But they’re different for each carrier. When you call someone, you’re supposed to know which carrier that person uses and which key to press? Sure.)

Is this really so evil? Is 15 seconds here and there that big a deal? Well, Verizon has 70 million customers. If each customer leaves one message and checks voicemail once a day, Verizon rakes in — are you sitting down? — $850 million a year. That’s right: $850 million, just from making us sit through those 15-second airtime-eating instructions.

And that’s just Verizon. Where’s the outrage, people?

[Click to continue reading David Pogue – Cellphone Gripes Worthy of Congress’s Time – NYTimes.com]

There are other topics too, like the subsidy game (once your contract is over, you don’t get a reduction in your monthly bill, even though your bill helped lower the cost of your phone for 24 months or whatever). Of course, the telecom corporations are huge donors to Congress, so the odds of meaningful consumer-friendly legislation emerging from the Senate Commerce Committee is slim to none.

Reading Around on July 20th

swanksalot0 comment

Some additional reading July 20th from 09:53 to 19:30:

  • The Return of the Pay Wall | The Big Money – The summer of 2009 is a terrible time to start charging for what was free. …

    So is this really the best time to start charging for online news? No. The best time was back in 1994, when the Web made online publishing to the masses a snap. And now that newspapers are finally making the move, they're applying a 1994 solution to the 2009 Web. Today, online publishers are seeing more and more traffic coming through blogs, aggregators like Google News, and social sites like Facebook and Twitter. Ignoring them is even more perilous to a paper's image than it was two years ago, when the New York Times tore down its Times Select pay walls. The hypertext link that made the Web unique is even more powerful today, and pay walls that break those links send would-be readers a clear message: Don't bother.

  • pandagon.net – these things don't just blame themselves – Harvard professor Henry Louis Gates Jr., one of the nation’s pre-eminent African-American scholars, was arrested Thursday afternoon at his home by Cambridge police investigating a possible break-in.. Gates, director of the W.E.B. Du Bois Institute for African and African American Research at Harvard, had trouble unlocking his door after it became jammed.
    He was booked for disorderly conduct after “exhibiting loud and tumultuous behavior,” according to a police report. …
    Now, I can understand why the police might think that a middle-aged black man was breaking into a home during lunchtime by trying to ram the front door with his shoulder, because it’s what many middle-aged black men do with their time, between Young and the Restless commercial breaks.
    … I’m sure that a significant number of people will read this and think that this is just a black man screaming racism because he handled a situation poorly, because a significant number of people like being dead fucking wrong.
  • The Return of the Pay Wall | The Big Money – The summer of 2009 is a terrible time to start charging for what was free. …

    So is this really the best time to start charging for online news? No. The best time was back in 1994, when the Web made online publishing to the masses a snap. And now that newspapers are finally making the move, they're applying a 1994 solution to the 2009 Web. Today, online publishers are seeing more and more traffic coming through blogs, aggregators like Google News, and social sites like Facebook and Twitter. Ignoring them is even more perilous to a paper's image than it was two years ago, when the New York Times tore down its Times Select pay walls. The hypertext link that made the Web unique is even more powerful today, and pay walls that break those links send would-be readers a clear message: Don't bother.

  • Hullabaloo – Wrecking Ball – Davis really had only bumped the fee back to its historic level: to 2% of a vehicle's value, rather than a recently enacted 0.65%.

    Schwarzenegger's canceling of the fee hike actually amounted to the single biggest spending increase of his reign. That's because all the revenue from the vehicle license fee had gone to local governments, and Schwarzenegger generously agreed to make up their losses by shipping them money from the state general fund.

    The annual drain on the state treasury was $6.3 billion until February. Then the governor and Legislature raised the fee to 1.15% of vehicle value, saving the state $1.7 billion.

  • Kennedy ’suicide ramp’ improvements to increase suicide rates | The Daily Blank – "According to an official Illinois Department of Transportation report, the notorious “suicide ramps” on Chicago’s downtown Kennedy Expressway will undergo much-needed improvements in order to bring the annual number of suicide deaths back up from what has been a startling decline in the past decade."

Carbon Credit Market and Goldman

Seth Anderson0 comment

As I said earlier, I don’t whether the new Cap and Trade legislation is a good step or not, I don’t have enough knowledge on the details, yet. However, I’m suspicious as to who is going to take most of the profits, namely Goldman Sachs.

Midas Touch

As Matt Taibbi writes:

The new carboncredit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.

Here’s how it works: If the bill passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billion worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.

The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of all electricity suppliers in the U.S. total $320 billion.

Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigmshifting legislation, (2) make sure that they’re the profitmaking slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for capandtrade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climatechange problem.” A few years later, the bank’s carbon chief, Ken Newcombe, insisted that capandtrade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.”

The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utahbased firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in greentech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energyfutures market?

“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.

[Click to continue reading The Great American Bubble Machine : Rolling Stone]

Suspicious, indeed.

Satanic Gift

Why are we privatizing cap and trade and not just making a straight tax on carbon emission?

Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and-trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private taxcollection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it’s even collected.

“If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedgefund director who spoke out against oilfutures speculation. “But we’re saying that Wall Street can set the tax, and Wall Street can collect the tax. That’s the last thing in the world I want. It’s just asinine.”

Amazon pulls a 1984 on its Kindle clients

Seth Anderson2 Comments


“Amazon Kindle Leather Cover (fits 2nd Generation Kindle)” (Amazon.com)

Sounds like an April Fools joke, but it isn’t.

This morning, hundreds of Amazon Kindle owners awoke to discover that books by a certain famous author had mysteriously disappeared from their e-book readers. These were books that they had bought and paid for—thought they owned.

But no, apparently the publisher changed its mind about offering an electronic edition, and apparently Amazon, whose business lives and dies by publisher happiness, caved. It electronically deleted all books by this author from people’s Kindles and credited their accounts for the price.

…

As one of my readers noted, it’s like Barnes & Noble sneaking into our homes in the middle of the night, taking some books that we’ve been reading off our nightstands, and leaving us a check on the coffee table.

You want to know the best part? The juicy, plump, dripping irony?

The author who was the victim of this Big Brotherish plot was none other than George Orwell. And the books were “1984” and “Animal Farm.”

[Click to continue reading Some E-Books Are More Equal Than Others – Pogue’s Posts Blog – NYTimes.com]

This is a really really compelling reason to avoid purchasing a Kindle, no?

In George Orwell’s “1984,” government censors erase all traces of news articles embarrassing to Big Brother by sending them down an incineration chute called the “memory hole.”

On Friday, it was “1984” and another Orwell book, “Animal Farm,” that were dropped down the memory hole — by Amazon.com.

In a move that angered customers and generated waves of online pique, Amazon remotely deleted some digital editions of the books from the Kindle devices of readers who had bought them.

An Amazon spokesman, Drew Herdener, said in an e-mail message that the books were added to the Kindle store by a company that did not have rights to them, using a self-service function. “When we were notified of this by the rights holder, we removed the illegal copies from our systems and from customers’ devices, and refunded customers,” he said.

[Click to continue reading Amazon Erases Orwell Books From Kindle Devices – NYTimes.com]

I don’t see how this can be covered in PR pixie-dust. Amazon is going to be the butt of a lot of jokes for a long time. Sneaking in and deleting 1984 of all books? Seems like there could have been a less obnoxious way to handle this, perhaps a note to those Kindle owners who had downloaded 1984? a coupon? Something, not just zapped down the memory hole…

We almost bought a Kindle a few months ago, thinking it might be a way to subscribe to periodicals without all the paper waste, no longer would we consider it. Annotating articles is a work-product, and Amazon could just remove it without asking.

Amazon’s published terms of service agreement for the Kindle does not appear to give the company the right to delete purchases after they have been made. It says Amazon grants customers the right to keep a “permanent copy of the applicable digital content.”

Retailers of physical goods cannot, of course, force their way into a customer’s home to take back a purchase, no matter how bootlegged it turns out to be. Yet Amazon appears to maintain a unique tether to the digital content it sells for the Kindle.

Justin Gawronski, a 17-year-old from the Detroit area, was reading “1984” on his Kindle for a summer assignment and lost all his notes and annotations when the file vanished. “They didn’t just take a book back, they stole my work,” he said.

Amazon hasn’t changed the wording of their terms of service, yet

Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

[Click to continue reading Amazon.com: Help > Digital Products Help > Amazon Kindle Wireless Reading Device > Amazon Kindle Terms, Warranties, & Notices > License Agreement and Terms of Use]

Sinclair Broadcast Group nearing bankruptcy

Seth Anderson0 comment

Clear Channel is in a bit of financial trouble, and apparently so are their cohorts in “Republican-slanted news is the only news people want” category, Sinclair Broadcasting. Good, I hope they both become nothing more than a footnote to future histories of the George Bush administration.

Lonely Zenith

you’ll remember Sinclair Broadcast Group as the TV group that carried the anti-Kerry smear documentary in prime time, just before the November 2004 election. You may also remember them for the infamous “The Point” editorial segments during their stations’ newscasts — featuring the right wing rantings of corporate management.

Perhaps you even recall their experiment in “central casting” — firing most of the news departments at their local stations, and instead running “local” newscasts from all over the country out of a central studio in Baltimore.

Well, it now appears that Sinclair is on the verge of bankruptcy

…

Five years ago, Sinclair was also the darling of the right for running that anti-Kerry documentary on all 58 of their stations, and for conservative editorials on all of those stations as well. Those who saw ever greater consolidation as the road to maximizing corporate profits were enamored of Sinclair’s experiment with producing “local” newscasts for their stations from a central studio at corporate headquarters in Baltimore.

Unfortunately for Sinclair, viewers were unimpressed by “local” newscasts that were produced hundreds or even thousands of miles from home — and tuned out in droves. And the right wing editorials created negative publicity for Sinclair’s stations. Ultimately. the central studio for producing newscasts was shut down, and the right wing editorials were cancelled. And the group has, by and large, floundered in mediocrity ever since. So far as I’m aware, none of Sinclair’s 58 stations is a market leader, and few are even in the top three — when you run a group on the cheap and attempt to push a national agenda onto your local stations, the result is predictable: poor ratings and a weak identity in your local markets.

As a result, Sinclair was poorly positioned for dealing with the advertising downturn of the past 18 months.

[Click to continue reading Daily Kos: Sinclair Broadcast Group nearing bankruptcy]

Bwa-ha-ha! Couldn’t happen to nicer corporations1

Footnotes:
  1. and by nicer I mean of course the opposite. Sinclair Broadcasting is just scum, plain and simple. [↩]

The Great American Bubble Machine – Gasoline

Seth Anderson1 Comment

Matt Taibbi’s putdown of Goldman Sachs is finally online if you didn’t get a chance to read it yet. He places Goldman Sachs at the scene of several crime scenes, also known as stock market bubbles. For instance, the summer of 2008’s massive gas price increase. Reserves of crude oil were as high as they had ever been, demand was lower because of a world-wide economic slowdown, why then did gasoline prices exceed $4?

Gas At Last

Taibbi explains:

As is so often the case, there had been a Depression-era law in place designed specifically to prevent this sort of thing. The commodities market was designed in large part to help farmers: A grower concerned about future price drops could enter into a contract to sell his corn at a certain price for delivery later on, which made him worry less about building up stores of his crop. When no one was buying corn, the farmer could sell to a middleman known as a “traditional speculator,” who would store the grain and sell it later, when demand returned. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops.

In 1936, however, Congress recognized that there should never be more speculators in the market than real producers and consumers. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. A new law empowered the Commodity Futures Trading Commission — the very same body that would later try and fail to regulate credit swaps — to place limits on speculative trades in commodities. As a result of the CFTC’s oversight, peace and harmony reigned in the commodities markets for more than 50 years.

All that changed in 1991 when, unbeknownst to almost everyone in the world, a Goldmanowned commoditiestrading subsidiary called J. Aron wrote to the CFTC and made an unusual argument. Farmers with big stores of corn, Goldman argued, weren’t the only ones who needed to hedge their risk against future price drops — Wall Street dealers who made big bets on oil prices also needed to hedge their risk, because, well, they stood to lose a lot too.

This was complete and utter crap — the 1936 law, remember, was specifically designed to maintain distinctions between people who were buying and selling real tangible stuff and people who were trading in paper alone. But the CFTC, amazingly, bought Goldman’s argument. It issued the bank a free pass, called the “Bona Fide Hedging” exemption, allowing Goldman’s subsidiary to call itself a physical hedger and escape virtually all limits placed on speculators. In the years that followed, the commission would quietly issue 14 similar exemptions to other companies.

Now Goldman and other banks were free to drive more investors into the commodities markets, enabling speculators to place increasingly big bets. That 1991 letter from Goldman more or less directly led to the oil bubble in 2008, when the number of speculators in the market — driven there by fear of the falling dollar and the housing crash — finally overwhelmed the real physical suppliers and consumers. By 2008, at least three quarters of the activity on the commodity exchanges was speculative, according to a congressional staffer who studied the numbers — and that’s likely a conservative estimate. By the middle of last summer, despite rising supply and a drop in demand, we were paying $4 a gallon every time we pulled up to the pump.

[Click to continue reading about the gasoline bubble: The Great American Bubble Machine : Rolling Stone]

Read the entire article here