Daily Rational

The End of The DVD and How It Will Save The World

Mischa G. — Wed, 05 Dec 2007 22:41:20 +0000

The internet is an amazing, incredible thing. Despite what some blowhards might think (big hat tip to FireJoeMorgan for doing us the favor of tearing this to shreds so we don’t have to) it is amazing that every one of us has equal opportunity to say our piece and has equal ability to read what others are writing. It has the potential to enable massive political and cultural change, far beyond anything we’ve seen before.
The potential for the internet to truly enable real democratic growth and participation in society is one of the reasons I’m so passionate about Network Neutrality. I also think that the internet will help us enjoy many of the things we love without destroying the planet we all share. One way this can happen is through a massive shift in how we obtain and consume media.
Michael Bay has a wild and crazy theory that seems to me to be dead on. We’re currently in the midst of an epic battle between the next great media formats. There are two camps, the BlueRay group and the HD-DVD camp. Both make discs which play video with higher resolutions than current DVDs. Both come on discs strikingly similar to the first generation DVD and CD. Microsoft has been one of the largest backers of the HD-DVD format and Michael Bay thinks he knows why.
What you don’t understand is corporate politics. Microsoft wants both formats to fail so they can be heroes and make the world move to digital downloads. That is the dirty secret no one is talking about. That is why Microsoft is handing out $100 million dollar checks to studios just embrace the HD DVD and not the leading, and superior Blu Ray. They want confusion in the market until they perfect the digital downloads. Time will tell and you will see the truth.
He’s right. There’s no call for a new DVD format. It’s in fact destructive to make a major move to a new optical media format. Never mind the huge piles of electronic garbage created when everyone throws out their old DVD player to get that slick new HD-DVD player. Let’s talk about the disks themselves. Each CD/DVD produced and delivered contributes a kilogram of carbon dioxide to global warming. Then, when the disk is too scratched to play, it joins the 100,000 pounds of optical media thrown out each month.
Via Earth2Tech:
The chemical used in jewel cases, polyvinyl chloride (PVC), is especially damaging to the environment. It often contains a variety of additives, including lead, making it is the least recyclable, and least recycled, of the major plastics. The EPA estimates that less than one percent of post-consumer PVC is recovered or reprocessed. That means the remaining 99% either ends up in landfills or is incinerated, a process that releases damaging dioxins into the air.
…
Every $100,000 spent on commercial software reproduction creates the global warming potential of approximately 29 metric tons of carbon dioxide equivalents as well as 38 kilograms of toxic waste. This estimate does not include related materials such as printed manuals, nor does it include the impact of shipping, etc. required for distribution. There is no reason to assume that in-house software reproduction would have a lower environmental impact, and in fact, would likely be higher due to less efficiency in shipping, batch processing, etc.
Were there to be a shift towards digital delivery of all media we would all be better served. The increased efficiency would allow for more money to go to artists and prices to fall all without cutting into profits. There would also be a positive environmental impact and I’d be able to watch Superbad the day it comes out on DVD without getting off my duff and eventually adding to the pile of 5.5 million jewel cases thrown out each year. Yep, if Michael Bay is right, the garbage he directs will never become trash.

Is the RIAA bending a bit?

Mischa G. — Tue, 04 Dec 2007 19:01:17 +0000

Think the RIAA is out to sue all file-sharers? Maybe not. A report in Wired suggests that they’re being uncharacteristically lenient in one area: MP3 blogs. If you’re unaware of them, the concept is pretty simple. The authors post descriptions of albums and/or songs, and link to where you can download them, usually for free. These songs are not hosted by the blogs, but rather third-party hosting services like Rapid Share.
The question is, why don’t the record companies care? If they’re spinning their wheels and suing Limewire and Bittorrent users, why aren’t they going after these music bloggers? After all, they’re facilitating the illegal download of copyrighted material (the words of the RIAA, not of me).
First is traffic volume. For instance, one of the more popular blogs, It’s Coming Out Of Your Speaker, saw just 1,487 visitors yesterday. That is substantial by some means, but in the overall scheme of things, it’s a drop in the pan. I run a fairly popular baseball blog (specifically on the New York Yankees, furthering the niche), and we see double that traffic on a normal day — and even more now because of the climate within the niche. In any event, far more people visit Bittorrent and P2P sharing sites daily than these blogs.
Second is culpability. The overwhelming majority of these MP3 blogs are hosted by Blogger or WordPress, rather than being independently hosted. This leaves the RIAA wondering where they should set their targets, if they are to do so at all. It’s one thing to publish copyrighted material. It’s quite another to post a link to copyrighted material on a blog that you don’t technically own (since it’s hosted by Blogger or WordPress, they reserve the right to take down your blog). So it’s unclear whether they can even do anything to the bloggers.
Third is relevancy. I searched through a few of these blogs, and all I found was obscure and older music. Those aren’t exactly the alleys from which the RIAA makes its dough. It’s more concerned with the piracy of mainstream music, the kind that can rake in millions, even billions through record stores and digital outlets like iTunes and the Amazon store. I doubt the RIAA cares if three copies of an old New York Dolls album is downloaded. Chances are, no one was going to buy it anyway.
(Aside: This is no knock on the New York Dolls or any other obscure band. It’s a mere sales issue. I’m all for the more obscure music…and have actually taken a liking to the selections on these blogs.)
You’d think that the RIAA would be even more fired up because of the advertising issue. Not only are these bloggers giving people a portal to download these copyrighted albums for free, but they’re making a dime or two from advertising through Google AdSense. The RIAA I know wouldn’t stand for people profiting from piracy.
To me, this signals that something is up. We don’t have all the relevant data at hand, after all. Perhaps there has been a measurable growth in the sales of these more obscure and older albums since the MP3 blogs have come into existence. Going back to the New York Dolls example, maybe they sold 10 albums per month before the birth of MP3 blogs. But after they were mentioned on one of them, they sold 50 albums the next month. I don’t think the record companies are going to complain about that, do you?
That might not necessarily be the case, but it’s something to consider. For all we know, they could be leaving this issue alone because they have bigger issues at hand — like the threat of EMI to cut funding to the group. Yeah, that might matter a bit more to them than MP3 blogs.
But they’re out there, so you might as well check them out. My suggestion is to hit up It’s Coming Out Of Your Speaker and checking out the links list. Should be able to find plenty of material there.

Filibusters Are Hipper Than Beards and Tattoos

Mischa G. — Mon, 03 Dec 2007 17:55:41 +0000

The Republicans must be glad they failed to eliminate the filibuster way back in 2005 when it seemed the good times would roll on forever. The filibuster isn’t the grand spectacle of days yore anymore. Current Senate Rules allow you to stop all Senate business if the opposition doesn’t have 2/3 majority to vote to end debate. Rather than requiring that you then occupy the floor and speak continuously until the offending bill is dropped., you now simply need to threaten to do so
Regardless, it is a procedural maneuver that was never used before 1841. Upon its first use there was a debate as to whether a simple majority should be enough to end debate but the Senate has tended to lean towards extended and careful consideration of all bills and so the tactic survived. Today it is truly in its heyday.
The NY Times ran a story tonight which just might explain why there has been so little movement on big issues from this congress. in the first year of this Congress there have been more filibusters than ever before in a two year Senate session.
So far in this first year of the 110th Congress, there have been 72 motions to stop filibusters, most on the Iraq war but also on routine issues like reauthorizing Amtrak funding. There were 68 such motions in the full two years of the previous Congress, 53 in 1987-88 and 23 in 1977-78. In 1967-68, there were 5 such votes, one of them on a plan to amend cloture itself, which failed.
I’m all for the minorities right to assert itself. It’s important that there is a means to empower proponents of alternative viewpoints. It’s important that there is the ability to force the majority to listen to your point of view. That’s something that should never be changed. There is a problem when filibuster is used to prevent rather than ensure debate. That’s the problem we’re seeing today.
Therefore I propose that we return to the days of long winded speeches. Bring us back to the days when passion drove politics. Bring back that good old filibuster, the kind you could make a movie about.

Does Truth Exist?

Mischa G. — Thu, 29 Nov 2007 21:13:05 +0000

There’s been a bit of a stink this morning, and rightfully so, after the Washington Post decided to make a front page story out of claims that Obama is secretly a Muslim.
This is a story that reminds me so much of the Swiftboat attacks on John Kerry. It reveals a serious problem in how major media outlets conduct political reporting.
There is an assumption that balance is achieved by giving both sides of an issue equal weight. This is simply not the case. We are lucky enough to live in a world where there are objective realities. We can verify that something is true or false.
The problem is, it isn’t easy. It takes hard work to show that something is demonstrably false. You can’t simply compile a few quotes and head home to write. You have to do your due diligence.
We have seen the media take the lazy route. Instead of doing research and presenting the reality as fact and the rumors as unsubstantiated attacks, the media simply records both sides as worthy of equal time. This simply is not the case. We live in a world where sometimes there are many many equally valuable opinions and where sometimes there is simply a single reality. It’s part of the media’s job to distinguish between these cases and provide us with the truth, where ever possible. Sometimes that means calling a lie a lie.

Beat That Dead Horse

Mischa G. — Thu, 29 Nov 2007 04:20:32 +0000

Without the proper means to gauge which investments are safe and the bottom falling out of previous investments, there has been a rapid decline in the market for commercial paper.
The combined value of two major sources of credit - outstanding commercial and industrial bank loans, and short-term loans known as commercial paper - peaked at about $3.3 trillion in August, according to data from the Federal Reserve. By mid-November, such credit was down to $3 trillion, a drop of nearly 9 percent.
Not once in the years since the Fed began tracking such numbers in 1973 have these arteries of finance constricted so rapidly. Smaller declines preceded three recessions going back to 1975.
These are investors unwilling to take the risk involved in backing corporate loans. This could rapidly cause a major recession or depression. This is why it’s so important to have a working system for assessing the worth of investments. When that system breaks, everything else comes down like a house of cards.

Daily Irrational: Mitt Romney

Mischa G. — Wed, 28 Nov 2007 22:22:54 +0000

Today’s Daily Irrational spewed from the mouth of Mitt Romney. Mitt, who has a vested interest in not making religious affiliation a part of the political campaign, has decided that maybe there is a place of religion in determining who should fill a political office. When asked if he’d be willing to give a cabinet level position to a qualified candidate of the muslim faith, he said no.
…based on the numbers of American Muslims [as a percentage] in our population, I cannot see that a cabinet position would be justified. But of course, I would imagine that Muslims could serve at lower levels of my administration.
Personally, I’d think that the nearly 3 million Muslim Americans deserve some representation at high levels. Recent census data shows that population more than doubled between 1990 and 2001 going from 0.3% of the total population to 0.6%. The Mormon population in contrast shrank over that time frame from 1.5% to 1.4% of the total population.
The real issue though, is that if Mitt seriously considers Jihadism to be the principal foreign policy threat, it would seem smart to make sure to include moderate Muslims in the decision making process as we plan a response. Denying any qualified candidate because of their racial or religious background is wrong. To exclude a perspective that could be particularly valuable is downright irrational.

Fixing the Economy In One Easy Step

Mischa G. — Wed, 28 Nov 2007 20:15:16 +0000

I’m not an economist. I think it’s important I begin this post by saying that. In fact, I’m an IT Tech who happens to be interested in the way too many other things, like the economy. What can I say, I like having a job so it’s important to me that the economy is healthy. It’s important to you too. What I’m about to attempt to do is explain what I understand about the current lending crisis that is about to severely impact our countries economic health.
There’s a lot of talk about a crisis in subprime lending. These are loans given to people with less than perfect credit. The reality is that there are systematic reasons why banks chose to invest so heavily in loans that seem unwise on their face.
We’ve seen the effects an economic downturn can have on the nation at large. In early 2001 President Bush began an endless repetition of the mantra that Clinton had ruined our economy. He said it ever so nicely, for instance in March 2001, “You see, it’s the President’s job to look for warnings of economic trouble ahead, and to heed them, and to act.” With economics, perception often becomes reality and that constant negative drumbeat along with the end of an economic boom based around new dot com businesses led to a several year recession which cost the country about 2 million jobs.
That was small beans.
The current lending crisis could easily lead to a complete halt in growth in the US economy. Estimates I’ve read point to the potential for a halt in economic growth to drive unemployment from 4.7% of the population to 6.4%. This would be a loss of 3,000,000 jobs. Those are 3 million families who suddenly will find their lives exponentially more difficult.
Right now the bulk of the economic crisis that is discussed in the media is related to predatory mortgages that were given out to poor families regardless of their ability to repay. This is really the tip of the iceberg though. For a more complete picture of what is happening in the lending market, I’m going to attempt to summarize a talk given recently by David Einhorn which I will quote from liberally.
In short, he argues that we have learned nothing from the recent mortgage meltdown. We’ve decided that what happened was purely that a lot of bad people took advantage of a lot of people who didn’t fully understand the terms they were accepting for their mortgages. We talk about it purely as a crisis related to subprime mortgages when really it is a lending market crisis caused by major flaws in our securities evaluation systems.
This crisis came for exactly the right reason. There is a big flaw in the structure of our credit markets. The bad structure induced lenders to take imprudent risks and make imprudent loans, which, of course led to losses. What is unique about this crisis compared to others is that the losses are in illiquid, opaque structures scattered around the world.
…
In my view, the credit issues aren’t just about subprime. Subprime is what the media says. Subprime is what parts of our financial establishment says. Subprime is about them – those people and the people who made foolish loans to them. The word “Subprime” is pejorative. Subprime is not about us, for we are not subprime. How convenient to be able to pass the blame.
There has been much talk from politicians and pundits about predatory lending – that is making loans at high rates to people who couldn’t reasonably be expected to pay them back. They are right, that is a bad practice, but that is not what’s shaking the markets. At issue today is that lenders of all sorts have lent too much money and did not demand enough interest to compensate them for the risks they took. There has been a colossal undercharging for credit across the board.
The core of the flaw is that securities are evaluated by several private bodies, the major ones being Stanard & Poor’s, Moody’s and Fitch Ratings. These companies issue ratings for each security that express the level of risk involved in purchasing the security. These ratings heavily influence which securities financial firms invest in and have a direct effect on the interest rates charged for similar loans. There is nothing wrong with a private body performing this task, but there is a serious problem in how they make their profit.
Have the rating agencies developed an expertise in analyzing these structures? Perhaps, but more pertinent, they are the only ones who can evaluate them, because they are the only ones with the detailed information about the structures. The underwriters give the rating agencies much more information than is contained in the prospectus. In their evaluation of corporate credits, rating agencies are exempt from regulation FD. This means that they can receive confidential information not available to other market participants. This is kind of like a confessional where the priest delivers a public opinion on the extent of your virtues and sins – and your spouse has to guess what a AAA or BBB means about your fidelity.
In other words, these ratings agencies know things every other investor never gets to find out. You know if you’re buying or selling junk bonds or pushing a strong investment because they told you so. Their job is to use the inside information they have to good advice to investors so they can properly understand the risk they are taking on.
Now if you were looking for inside information, let’s say on a boxing match you wanted to bet on, who would you want to get that inside information from? Would you rather get that information from a person who you paid, or would you rather listen to the guy your bookie has paid? The guy you paid has a financial incentive to give you the information that will help you win the bet. The guy who your bookie paid has a financial incentive to give you the information that will help your bookie win the bet. I’d listen to the guy who has my interests in mind.
Unfortunately, Moody’s, Stanard & Poor’s and Fitch all are paid by those looking to have their securities evaluated. Therefore, the three major firms are competing to be the best at attracting customers and getting those customers money. In this case that’s the sellers of securities. In effect, there is a financial incentive to give the highest ratings in as many cases as possible as that will make your firm more money.
There is also extra pressure to not always tell the whole truth about the health of an investment. Just as Presidents can affect the economy by exuding confidence or forecasting doom, by letting the cat out of the bag on all the pending trouble the ratings agencies run the risk of causing a panic in the market. This would further erode the financial health of those paying the bills. By telling the whole truth about the current crisis many banks would be forced to disclose the full extent of the hit they’ve taken at once.
When ratings agencies are more concerned about the effects of the rating actions than on the accuracy of the ratings, they become part of the Wall Stree “confidence” machine and surrender their ability to fulfill their statutory role in objectively analyzing credit.
To make things more complicated, rather than just evaluating all securities on one scale, they have decided to evaluate different securities on different scales. Therefore, a bond issued by a city or town, despite the fact that it is highly unlikely to be defaulted upon, may be issued a far lower rating than a corporate bond with a far higher likelihood of going bust. What’s worse, when securities are cleverly packaged, they can achieve a higher rating than any of them would individually, not because they are a better investment as a package, but because packaging them changes the ratings system that applies to them.
The result is that municipalities are charged higher interest rates on their bonds than corporate lenders, not because they represent a greater risk but rather because they’re in a different ratings scale. On this scale a municipal bond rated just above a junk bond is half as likely to go bust in 10 years as a corporate bond with the highest rating. This has led, according to Einhorn, to taxpayers paying $5 billion a year in interest they shouldn’t need to pay.
Is it proper to have the same ratings mean different things in different classes? Probably not. For many bond buyers the statutory requirements are determined by the credit rating. If the bond is rated investment grade, then it is eligible for purchase. No distinction is made for buying the “good” A rated bonds versus the “bad” ones. The bad A rated bonds don’t come with special warning labels. They tend to find themselves in the portfolios of the least sophisticated ratings-driven portfolios like pension funds.
This is simply because investors aren’t given the proper information to understand the risks they are taking on. Were the system designed to rate all investments on a single scale it would be obvious what the wise investment is. The cost of financing public projects would go down as the bonds that pay for them cheapen. Investors also would be able to avoid dangerous subprime investments.
When securities comprised of bundles of questionable investments can be assured an inflated rating, it makes it more financially viable to make the initial bad loan. Despite the fact that lenders know the loan is likely to go bust, they are sure they can sell the risk before it’s too late as a wise investment. We need to eliminate the short term financial incentive to make an economically disastrous decision.
Einhorn suggests that we change to a model where all the information that Stanard & Poor’s, Moody’s and Fitch get also goes to the public at large. Those firms would instead have to go into the somewhat less lucrative business of competing to sell their services instead to the investors who will be purchasing the securities they are rating. In this case they will have the investors’ best interests in mind. If that leads to fewer people preying on poor Ms. Dailey, I’m all for it.
Click here to view the embedded video.

Getting Green Gear

Mischa G. — Tue, 27 Nov 2007 18:11:33 +0000

I spend most of my life tinkering with one piece of electronics or another. Such is the existence of a lowly IT Tech. I’ve also thrown out an old piece of electronics or two, and know a little about where they end up when they die.
In order to help consumers make electronics decisions that will have a minimal negative impact on our environment, Greenpeace has begun rating manufacturers on how green their business practices are. They rated they rated the top 18 manufacturers of consumer electronics 1-10 looking at their use of toxic materials and their efforts to ensure devices are recycled at their end of life.
Some companies, like Sony Ericson, Samsung and Dell scored in the mid to high 7’s, falling short on their efforts to help recycle old products. Other companies did not do so well. Apple is sitting in the middle of the pack with a 6. Bringing up the rear, with a shocking zero points is the Big N. Nintendo.

Breaking: Trent Lott Resigning Senate Seat

Mischa G. — Mon, 26 Nov 2007 16:51:57 +0000

According to the AP the number 2 Republican in the Senate, Trent Lott, is resigning, effective the end of this year, to pursue “other opportunities”. Does anyone else smell a career in lobbying coming?

Daily Roundup 11/20/07

Mischa G. — Wed, 21 Nov 2007 01:43:19 +0000

Spencer Ackerman Today’s Must Read
Remember that recently-impaneled grand jury looking at Blackwater’s Nisour Square shootings? Turns out it’s not just about Blackwater.
Four years into the occupation, prosecutors are attempting to build the first criminal case against private security companies — who up until now worked in a system rigged to ensure unaccountability.
Jeffery McMurray Soldier Decries AWOL Arrest at Hospital
A soldier facing his second tour of duty in Iraq said in a jailhouse interview he was at a hospital seeking mental help when he was arrested in the middle of the night for allegedly being absent without leave.
Spc. Justin Faulkner insists his superior officers at Fort Campbell knew about his mental problems but refused to provide adequate treatment.
Jason Rhyne Former White House Press Secretary: Bush, Rove Helped Pass Along “False Information” on Plame
“The most powerful leader in the world had called upon me to speak on his behalf and help restore credibility he lost amid the failure to find weapons of mass destruction in Iraq,” writes McClellan. “So I stood at the White house briefing room podium in front of the glare of the klieg lights for the better part of two weeks and publicly exonerated two of the senior-most aides in the White House: Karl Rove and Scooter Libby.”
But his press performances weren’t based on the facts, McClellan continues.
“There was one problem. It was not true,” he writes. “I had unknowingly passed along false information. And five of the highest ranking officials in the administration were involved in my doing so: Rove, Libby, the vice President, the President’s chief of staff, and the president himself.”