Category Archives: Law

Houndwire Private Beta

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There’s a saying about startups. That you have to work 12 hour days. Well it’s all a lie. It’s more like 14 hour days. I’m really, really in the zone right now though. My brain’s hanging in there but my eyes are nearing their limit. Visine is keeping me in the hunt.

I’m presenting the site to a bunch of investors on Monday. I’m going to stand up in front of a executives and talk for 20 minutes. Normally I’d don’t like talking in public but I can ramble on about journalism and technology for hours at a stretch.

Artist is working on a logo for tomorrow. Looking for security holes. Fixing bugs.

Right now HoundWire.com is password protected but if you’re interested just leave me a message at
kirk@YOURPANTSabinventio.com Just be sure to remove YOURPANTS first (that’s a creepy anti spam technique FYI).

Looks like I might have a patent app in the works for an advertising idea I had this afternoon. Some lawyers are looking into it.

New RadioHead album is definitely worth the price, whatever it is. Also listening to M.I.A. Imagine Bjork in a jungle hunting Gwen Stefani down with an AK-47 and you’ll get the gist of it.

I can say, without hesitation, that I’ve learned more in the last few months than during any other point in my life.

Here’s some marketing stuff I’m working on for HoundWire.

We aim to provide a replacement for the newspaper and an outlet for all local writers and journalists. Owning a printing press shouldn’t be a requirement for communicating with other citizens. The front page of any given community consists of news voted on by the users. You can also vote on comments so if someone is consistently insightful it will be apparent.

Finally, a brilliant quote from Tim O’Reilly

” Alas, I find the Web 3.0 arguments as clear evidence that the proponents don’t understand Web 2.0 at all. Web 2.0 is not about front end technologies. It’s precisely about back-end, and it’s about meaning and intelligence in the back end.

Click the photo for credits.

Mike Gravel(D) and Ron Paul(R) for President and VP

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Mike Gravel, a Democratic Senator from Alaska, is getting a lot of press for his blasphemous comments at the Democratic debate:

Ron Paul, Republican congressman from Texas, has eerily similar views. From Realtime with Bill Maher:

It would seem that these two would make a good combination in a run for the White House. If you’re a long-shot candidate ignored by a media trained on amplifying and exploiting political differences then maybe something crazy just might resonate with the despondent American media consumer. As Jon Stewart said “Why do we have to fight?”

The photo is called Bella the Cat by NiteLynx on Flickr

Permanent Printing Press

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Sometimes I like to take complicated ideas and find a good analogy so when I think about it again it takes a little less time to load into my head. The effect of liquidity on the pricing of risk comes to mind. My analogy goes like this.

The Fed’s creation of money would be akin to an iron getting hot.
Risk is a wrinkly shirt
The Fed turns up the heat and irons out the lumps, pushing them up towards the neck.
Unfortunately the growing bulge approaching the neck can’t simply be ironed out of an economy

Watching an interesting lecture on Intellectual Property in Law from Berkeley about software. The prof says “Uhhhhhmmm” a lot but it’s pretty informative. You’ll need RealPlayer.

Digital Rights Management – Devilish Advocacy

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Caught in the Act

Originally uploaded by D.James.

From ARS Technica today “In a nutshell: DRM’s sole purpose is to maximize revenues by minimizing your rights so that they can sell them back to you.”

Sounds simple enough right? That sentence’s elegant simplicity had me at nutshell. Evil capitalism vs. the unstoppable force of digital freedom. But I was scratching my receding hair line and marveling that I can fit a prairie vole’s entire DNA sequence on my key chain memory stick and wondered: How would the common assumption about digital freedom be interpreted when applied to cloning? If data wants to be free then what’s wrong with grabbing some hair from your roommate’s brush and surreptitiously overclocking your hair genes in a Rogaine branded centrifuge?

The ARS quote above could easily be applied to Blockbuster’s digital-freedom-robbing habit of making me return 1s and 0s in the form of DVDs through a squeaky aluminum hole in their wall. They’re missing a fundamental point about price and products. They’re assuming that we’re too stupid to demand a lower price in exchange for our freedom. If late fees aren’t DRM I don’t know what is. Are DVD rentals an unethical digital liberty abyss? No. So why the assumption that I will pay for a product suffocated by restrictions? If the product, including DRM, sucks, people will not buy it. Fair use isn’t something that needs to be legislated. If the movie industry pisses us off we’ll buy video games instead. There are so many alternatives today that they cannot simply crush our liberties with a campaign contribution any more.

It’s a bit ridiculous to assume that the industry doesn’t care about piracy when every movie ever made will fit on a keychain sized device in the near future. And piracy will eventually win because at some point living room walls will be smaller than TVs with DPI reaching a level of diminishing returns. And the keychains will just catch up. We’re at the point with 8Gig flash drives that you’ll be able to decrypt and carry a two hour DVD around for less than $50 by the end of this year.

Now the industry has historically been pretty stupid. The attempted outlaw of VCRs springs to mind. But digital is entirely different as anyone who has watched a 14th generation VHS dupe of some leaked celebrity home movie can tell you. With home theaters rivaling movie theaters in terms of sound and visual quality the opportunity to generate cash to pay for Beowulf render farms which in turn bring Ring Lords to life are dying a exponentially un-slow death. Flash memory sticks are going to kill DVD revenue in short order. Home theater systems will finish off the movie theater business. Even HD-DVD and Blue Ray are no match for these tiny USB terrors.

And so in 2010 we will see Lord of the Rings IIX rendered on a pair of aging E-Machines with a 10BaseT hub interconnect. Well maybe not that bad but movie budgets will plummet. I’m a huge fan of Clerks which was financed with a Visa if I’m not mistaken but I imagine it wouldn’t have sucked with color and a few explosions. Musicians can always sell concert tickets. I’m just not sure I’m ready for Rocky 12 on Broadway.

Street Justice

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A short but true story. A guy had his car in the shop. The shop wrecked his car. The shop refused to fix it. The owner raised a stink on the internet. The shop gave him a new car.

Yesterday I bought a Subaru WRX . It died on the way to work today. I limped it in and they agreed to replace some sensors for free.

In a seemingly unrelated development, my blog has somehow managed to garner a Google Page rank of 5 out of 10. A Google search for “unbeknownst” returns about 2,140,000 results. My blog shows up third because I have a relatively decent ranking. I wrote a review of Amazon’s Unbox when it was released and my blog was at the top of the list for a while which generated a ton of traffic for my humble site.

So how are these facts related? It means that if a dealership decided to screw me over, and I told the world about it on my blog, searches for the dealer’s name on Google would probably return my rant at the top of the list.

The Trickle Up Theory

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What follows is a comparison of two articles, one published on the blog Global Economic Analysis on Wednesday, September 27, 2006 at 9:40AM and the other published on roughly a day later at 8:29AM, September 28th on TheStreet.com. I’ll leave it to the reader to draw any conclusions so I don’t get sued.

Exhibit A – A comparison of two blocks of text referring to a DR Horton advertisment.

The Blog: “That is a 30% haircut… Any flipper who paid full price is now 30% underwater (not counting interest expenses, insurance, property taxes, etc).“

TheStreet.com one day later: “You just took a 30% haircut on your inventory, not to mention carrying costs of a mortgage, real estate taxes and expenses to keep up the property (landscaping, utilities, etc).”

Coincidence? Maybe. Weird? Absolutely.

Exhibit B:

The Blog: “Add in real estate commissions and that flipper may be down by as much as 50% or more.”

TheStreet.com one day later: “…you have to pay a real estate agent a 6% commission. That speculator… is now out, by my calculation about 50%.”

Exhibit C:

The Blog: Uses a quote from David Lereah… ““We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market,” he said in a written statement. “This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”“

TheStreet.com: Uses the same quote… “We do expect an adjustment in home prices to last several months, as we work through a buildup in the inventory of homes on the market. …This is the price correction we’ve been expecting — with sales stabilizing, we should go back to positive price growth early next year.”

Exhibit D:

The Blog: Right at the bottom of the ad in large type is the message “Realtors Warmly Welcomed”… That is a dramatic change and right off the bottom line of builders.

TheStreet.com: Consider the dramatic sale of D.R. Horton (DHI) homes in the Daytona Beach market in Florida. Please note the message at the bottom of this advertisement: “Realtors Warmly Welcomed!” That’s never a good sign.

I was wrongly accused of plagiarism in my final semester of college by a professor who was convinced that I couldn’t have written a paper in a weekend. I eventually won but it wasn’t a fun process. I don’t take this sort of thing lightly.

Notes:
“Editor’s note: This column by Doug Kass is a special bonus for TheStreet.com and RealMoney readers. It first appeared on Street Insight on Sept. 28 at 8:29 a.m. EDT.”

The blog post, if the clock is right, was online at
“9:40 AM” on “Wednesday, September 27, 2006″

Click on the photo to visit Flickr for the photog’s comments.

The Bigger Picture

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Psychology, media, technology, economics. It occured to me that everything I write about revolves around those four ideas. And that the world basically lives in two camps. Those that think we’re collectively smart enough to manage ourselves through a democracy, and those who think power needs to be wrestled from the hands of short-sited voters who will destroy the environment and economy if left to their own devices.

You also have the more defined idea of emergence: From Wikipedia:

Emergence is the process of complex pattern formation from more basic constituent parts or behaviors, and manifests itself as an emergent property of the relationships between those elements.

Some examples are free market pricing, evolution, and in the case of Democracies, Law. Evolution requires DNA, pricing requires educated consumers, and democracies require informed voters. When consumers aren’t informed about what they’re buying you get scams and economic crises. Option adjustable rate mortgages are an example of consumers doing themselves harm due to a lack of knowledge about money. When voters don’t know what they’re voting for they get politicians acting recklessly in an attempt to stay in power.

Without DNA, knowledge of economics or knowledge of products you will not get emergent order in the form of life, liberty or the pursuit of happiness(property). I guess I should define knowledge as understanding combined with selflessness. You had a problem with slave owners who knew that what they were doing was wrong but continued because they were comfortable with the status quo.

Joeseph Schumpeter commented on the problem with a lack of knowledge when applied to democracies:

“There will not be a revolution, but merely a trend in parliaments to elect social democratic parties of one stripe or another. He argued that capitalism will collapse from within as democratic majorities will vote themselves the creation of a welfare state and place restrictions upon entrepreneurship that will burden and destroy the capitalist structure.”

As did Bastiat in “The Law”

“According to their degree of enlightenment, these plundered classes may propose one of two entirely different purposes when they attempt to attain political power: Either they may wish to stop lawful plunder, or they may wish to share in it. Woe to the nation when this latter purpose prevails among the mass victims of plunder when they, in turn, seize the power to make laws!”

Bastiat says we’re screwed if we choose Socialism and Schumpeter argues that Socialism is inevitable in a Democracy.

Brain is giving out. Still haven’t covered accelerating change, emergent price and leadership, globalization, tech-deflation + fiat currency, asset bubbles, or why those supposedly in control would let Iraq happen. To be continued…

The Corruption Countdown…

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“Blogosphere Unites in Pursuit of Masked Senator”…
UPDATE: Mystery Solved.
Ethical witch hunts are rare but the United States is in the midst of a whopper. A small non-profit is holding politicians to the fire. Some background:

The hunt for the senator is turning into a classic political “whodunit,” said Brian Darling, director of senate relations for the Heritage Foundation, a conservative leaning think tank based in Washington.
It could be anyone — Democrat or Republican — Darling said. To place a hold, senators merely have to inform their leader that they don’t want the legislation to move forward, he said.
It remains unclear if the senator responsible will be able to withstand the pressure from the broad array of groups and senators supporting the bill…
The secret hold has prompted conservative and liberal government watchdog groups to band together to “smoke out” the senator responsible.

The mainstream media would never have created something as blatently creative as the corruption countdown over at Porkbusters. They simply lack the courage and credibility to organize something which has the potential to embarass our “leaders”.

UPDATE. The list of suspects is shrinking.
UPDATE II Just called DC with Skypeout and cleared Baucus while eating a footlong Turkey sandwich. Democracy can be delicious. Ted Stevens’ young sounding DC rep wouldn’t answer, just told me to go to the website, hmmm, what does he have to hide? My money is on “Series of Tubes” Stevens.
UPDATE III Sarbanes wouldn’t answer either, said they’d call me back.
UPDATE IV Hey, I’m famous… from TPMMuckraker Update: TPMm Reader KH finally gets an answer out of Sen. Baucus: “Called their Washington DC office and the female staffer’s reply was a flat ‘No.’” 89. It’s really nice to know the guilty Senator is sweating a little more thanks to my Hardy Boy handywork.

Senators Unknown or Who Refuse Answer (via TPMMuckraker):
(Senators who have refused to answer are in bold and italicized.)

Stevens, Ted- (R – AK)
Baucus, Max- (D – MT)
Crapo, Mike- (R – ID)
Gregg, Judd- (R – NH)
Hatch, Orrin G.- (R – UT)
Murkowski, Lisa- (R – AK)
Reid, Harry- (D – NV)
Rockefeller, John D., IV- (D – WV)
Talent, James M.- (R – MO)
Carper, Thomas R.- (D – DE)*
Chambliss, Saxby- (R – GA)
Sarbanes, Paul S.- (D – MD)
Bond, Christopher S.- (R – MO)

Collective Economic Pinkeye

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A lot of kids need more exercise. The kid behind me on the flight back from New York needed more exorcise. Instead of sleeping I read Bastiat’s The Law while suffering at the hands of the reincarnation of Sam Kinison. I like reading old philosophers and applying their often timeless wisdom to the world circa now. I read a Goethe quote once that said most of the good ideas have already been imagined but few read enough to realize what they’re missing so they waste time reinventing the wheel. I don’t like wasting time.

The Law is a sort of libertarian manifesto inspired by a life lived in France. You can read voluminous treatises on law and never understand it as well as was made clear by Bastiat.

When a reviewer wishes to give special recognition to a book, he predicts that it will still be read “a hundred years from now.” The Law, first published as a pamphlet in June, 1850, is already more than a hundred years old. And because its truths are eternal, it will still be read when another century has passed. Frederic Bastiat (1801-1850) was a French economist, statesman, and author. He did most of his writing during the years just before – and immediately following – the Revolution of February 1848.

I’ll be writing more about it in the near future. But first…

It bothers me to no end that the Federal Reserve and Media did nothing to protect Americans from the inevitable collapse of the housing bubble. Is it really asset price manipulation if truth is the manipulator? Do I feel vindicated that my predictions were right? No, it was obvious unless you ignored fundamentals. I’m frustrated that the general public won’t know why it happened and that most journalists don’t know their economic elbow from their ass.

The Fed Studies Deflation

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This is sorta creepy in a crusty old guy with financial calculator kind of way. The Fed is trying to figure out what to do if deflation sets in.

To evaluate alternative approaches to stimulate the economy aside from the usual lowering of official interest rates, the researchers assumed the economy has suffered a shock large enough to pin short-term rates at zero for several years.

A couple of thoughts. It’s possible we’re going to see deflation even without a shock if productivity continues to grow at an accelerating pace. From the few pieces I’ve been able to put together it seems like as the Fed loses power, if they’re not careful, their policy of mild inflation could snap back and turn into hyperinflation as foreign governments get rid of their dollars.

Some billionaires are predicting doom and gloom for the US and not just because of peak oil. But, worst case, the GDP could drop pretty significantly without a lot of damage because rents would drop to a fraction of their current price and consumers would switch to more fuel efficient cars. Of course this would require an entirely new banking system in America because of waves of defaults on overpriced homes. The Federal Reserve and/or fiat money wouldn’t be a factor next time around in that scenario.