Thoughts In Grey

AT&T Wireless a lesson for tech mergers

This one came as a result of a conversation with an old friend on Facebook, in which he notes that he's had no AT&T Wireless service all day on Manhattan's Upper East Side. As he notes:

AT&T Cell Service non-functional between 12 and 8PM at my building today due to a tower that has been degraded since December 30th. 30% of the AT&T 3G towers on the UES are also degraded. The bad AT&T service in NYC has nothing to do with iPhones overloading the network---it has to do with horrific maintenance of their 3G network.

My own belief is that it goes far beyond horrific maintenance, to something that's been percolating for years, since Cingular (owned primarily by SBC) merged with AT&T Wireless as a part of the overall takeover of AT&T by SBC. Though the combined entity took the "AT&T" name, it was really a takeover of AT&T, which had become a horrific mess over the course of many years.

I've had a theory for some time, which says an awful lot about tech mergers and how difficult they are to manage even years after they are "complete."

The current AT&T Wireless pretty much came together from the forced union of the "old" AT&T Wireless (TDMA, non-GSM technology) and Cingular (TDMA, GSM-based technology). From the executive suite, this merger probably looked like it made a lot of sense because the companies tended to be strong in different areas.

But the problem of different technologies forced them to choose, and they chose the Cingular/GSM technology which was better and had a more robust upgrade path. Again, it made sense. "Old" AT&T customers were migrated to new phones on the Cingular/GSM side of the house and infrastructure was slowly repurposed from one to the other. The old phones and network hardware became obsolete.

What I've noticed though, is that years down the road places like NYC and SF where the "old AT&T" was strong are still having problems. Places like LA, where Cingular was a dominant carrierseem to be doing fine. While I have no detailed information to support this, it's as if the places with lots of "old AT&T" facilities are still struggling to catch up.

I suspect it's a lot more than just the technology. "Old AT&T" didn't have a reputation for a great workforce or corporate culture, which is part of the reason they were swallowed up. There are probably many more internal reasons.

But to me, the facts on the ground (or in the airwaves) suggest that years later we are still seeing the effects of a merger that turned out to be a lot more complex than the guys at the top would have had us believe. It's a cautionary tale for anybody who believes the pretty stories about how easy its going to be to merge two technology giants.

-mg

Project Management Nazis

Got the following email this morning from the Project Management Institute. For those who don't know, PMI is an organization of project managers, though in recent years, it's become clear to me that the focus of the organization has shifted toward extracting as much money as possible from project managers by offering a more and more elaborate scheme of certifications and sub-certifications most of which seem fairly irrelevant to 90+% of businesses, including the vast bulk of those who don't do government business and aren't subject to ridiculous government acquisition rules. (It is no mystery to me that PMI is Washington based and the most heavy users of their stuff tend to be in the defense establishment. You know, those people who always deliver 10 years late and 5x over budget but claim the program was successful because the changes were approved along the way...)

But I digress.

PMI has a new brand. Unlike most normal organizations, they can't just say, "we have a new branding statement" or even "we have a new slogan." PMI has instead developed a new "branding standard." That makes it sound much more official. Left to these guys, my cat would need to follow a "daily tongue-based coat self-cleansing and beautification standard." That would make the regular licking of her backside seem so much more important. So much for using clear simple language and avoiding jargon with this group. 

Apparently, this new "brand standard" states that as a member I am supposedly: "Precise and creative. Organized and passionate. Disciplined with urgency."

Not only that, but they seem to feel that a nice little exercise in nazi-style conformity is called for. I am supposed to "engage in this leading community of more than a half a million: by posting to my social media site the following:

I am precise and creative, organized and passionate. As a PMI affiliate, I make project management indispensable for business results.

Brief notes

I've been offline and mostly sick for over a week, so just to catch up quickly:

• The big news is the Mac that I'm writing this on. See below for my first impressions.
• Markets continue to move up and down rather aimlessly. My own take is that people (both of the "political" and "business" camps) want to try to take us back to a place which we can't go back to.
• The same is true for housing. As the Tom Petruno suggests in the LA Times today, it may finally be time to stop trying to support the unsupportable and allow housing to decline to a market clearing price. Yes, it would be painful, but the pain will happen no matter what. Let's get it over with.
• I really enjoyed my friend Nigel Swaby's presentation at Ignite Salt Lake about his involvement with Casey Serin. The online discussions of Casey are where I got to know Nigel, and really regretted having to watch the video feed from home because I was too sick to fly out. Casey was, and in many ways still is, the personification of the financial delusions that have led us to where we are today. I found his bizarre "how the hell could this happen?" story to be as fascinating in it's own way as that of Martin Frankel.
• Chaos is on Prozac. Not something I really relished doing, as he's just being a cat after all. Unfortunately, he's gotten into a very bad anxious cycle since major surgery in March. Hopefully we'll get him back to a normal routine and slowly wean him off it.
• Dr. Beth Hagenlocker at The Cat Practice is amazing!
• I've been slowly continuing my energy audit. The results are not particularly shocking. The refrigerator is using about 30% less electricity after a good coil cleaning and slight increase in temperature. The cable boxes continue to be a major culprit. Simplifying my desk around the new Mac should also help.
• Credit is still there if your credit is good, though they're obviously still fishing for people who will make a mistake and pay hundreds of dollars in interest on a "zero interest" deal. Apple's credit parter Barclays gave me double what I needed for my Mac purchase. They're certainly betting I'll miss a minimum payment and not survive the "12 months interest free." I'll certainly schedule payments to make sure I do.
• This year's birthday trip was pretty light-weight. A few days with friends on the American River. A day in a raft, a couple of others in an inner tube. Just what I needed.
• Looking forward to the Bay Area, Utah and maybe Denver in September. New York in August. Haven't been away for a while.

mg

Being Rational

I'm currently taking a software project management class online at UCLA extension. I need the continuing education credits to keep my Project Management Professional certification current, and I can sometimes even learn something.

I was somewhat disheartened when the instructor started the class by asking us to read Kepner and Tregoe's almost out-of-print book The New Rational Manager. I say "almost" because while it's still available, you can only get it directly from the publisher, which also happens to be th consulting firm run by the authors. In today's world, if it's not available on/through Amazon, it's effectively out of print.

The reason for my disheartened feeling is that I had read an earlier version many years ago and did not find it all that useful. I am also quite biased against anybody who advocates "rationality" as a core belief in any business endeavor, given how disastrously other "rational" theories have worked out. My distaste is largely colored by what I view as one of the two great lies of economics, the Rational Actor Hypothesis (RAH), which presumes that we all live our lives purely rationally, making rational choices that carefully balance long term benefits and costs. On top of this, a whole science of Rational Action Theory has been built, and been used to justify the most absurd economic actions, essentially stating that if the action weren't rational, people wouldn't have done it. The blind spots in this theory are largely responsible for the bubbles and subsequent meltdowns of recent years.

HP and the End of the Imperial CEO

A decade ago I worked at HP (NYSE: HPQ) and have naturally followed the craziness related to ex-CEO Mark Hurd's rapid resignation and departure since the new broke on Friday.

I'm anything from an HP insider at this point. I left just six months into Carly Fiorina's reign as would-be queen of tech-land because the reality of the coming disaster was written on the wall from day one. Even most of my old friends are no longer there, but lots of us are still quite in touchespecially within the services organization headed by Ann Livermore.

With that disclaimer in place, I have to agree with my friend Herb Greenberg's opinion that we are, to some degree, being "spun" when told that it's all about some falsified expense reports. Admittedly, HP does have much higher standards than most places I've worked with regards to such things, and even five years of Carly Fiorina did not destroy that. Hurd, to his credit, seemed to realize that when he took over the CEO post and from what I've been able to determine, had tried to re-instill some of the old HP values of trust and honesty even while cutting heavily, though he hit a major stumble last year.

But HP's values and relatively low tolerance for such stuff is the minor issue. The bigger issue is that he has hit major stumbles in recent years and the loss of employee trust is only one of them.

 

Why Apple (and Intel) Failed. Why they'll succeed anyway.

Watching the iPhone 4 antenna flaw unfolding for several weeks really took me back.  It was an illustration of how difficult it can be for any company to notice or adjust correctly when large-scale changes are effecting their customer base and with it the expectations of their products.

I was at Intel (NasdaqGS: INTC) back in 1995 when we went through the cathartic moment remembered today as the Pentium FDIV Bug. Calling it a "bug" would almost overstate what it was. A small imperfection in a lookup table meant that some division operations that required accuracy beyond six decimal points would provide flawed results. Realistically, this did not have an effect on the vast majority of Pentium-based personal computer users. Even a relatively sophisticated guy like me never needed that level of precision. The guy who found it was a mathematician, others who had problems might have included astrophysicists and guys working on quantum mechanics.

Intel's reaction to the discovery of the flaw was no different than it had always been. The nature of the problem was published in the processor's "errata" sheet -- an obscure document that only users with the most demanding needs were aware of or consulted. Major software companies and PC assemblers were notified so that they could compensate for the problem in software/firmware if they deemed necessary. It was thought to be a non-issue.

What Intel hadn't coped with internally was that things had changed. The Pentium was their first truly branded product, and its release coincided with Microsoft's Windows 95. Windows 95 was also the first truly branded computer operating system, complete with a Rolling Stones soundtrack to accompany the launch commercials. In 1995, the PC business was becoming branded and "comsumerized" even as the companies that were driving the change had few people in them with any sort of a consumer perspective. Apple is in much the same position today. They're no longer a supplier to geeks who idolize Steve Jobs. They've got to look at things from a different perspective, just as Intel did when their moment of truth came.

Credit for College Kids?

"Same as it ever was"

- The Talking Heads

Interesting discussion on CNBC earlier, about a rule embedded in "Financial Reform" which demonstrates to me how far we've come in 20 years and how far back we need to go in order to restore some sense of financial sanity to our lives and financial institutions.

But to understand how far off the rails we've come, we need to look back 20+ years to when I was in college. As a college student, for the most part, I couldn't get any credit of my own. After all, I had no real income and little disposable income. I did have one card off a parent's account for use in emergency situations, but for the most part I got by with cash and my Debit/ATM card. I was, admittedly, better off than many of my peers, but even for me the general rule was that if I didn't have the cash for it, I couldn't buy it.

The Tyranny of Moore's Law

Yesterday during the Oil Industry hearings on Capitol Hill, I saw one congresswoman make a statement that hit a nerve for me. She held up two photos, one was of the oil containment booms used during the Santa Barbara oil spill of the 1960s. Another was of the booms being used today in the Gulf of Mexico. Where, she asked, was there any kind of technical advance in oil containment and why had nothing been done in 40 years to address the problem?

It's a good question, and one for which the answer is most certainly complex. It's quite clear that there are lots of technologies out there that most of the oil companies haven't even bothered to explore that they probably should have, and equally clear that lots of improvisation is going on along the coastline despite the oil business' reluctance to try any such thing themselves.

But it's also a naive question, one that I believe is rooted in what Red Herring once referred to as "the Tyranny of Moore's Law." It's naive because the presumption is that there's always some better technology waiting in the wings, always some new quantum leap yet to come that will solve all our current problems and make a greater future possible, and that something 40 years old in general design must -- almost by definition -- be obsolete.

Moore's Law is the name for the observation by Intel (NasdaqGS: INTC) co-founder Gordon Moore that the number of transistors that could be manufactured on a microchip in an economically viable manner would roughly double every 18 months. It has pretty much held true since the observation was first made in 1965 and was the driving force behind most of the technological advances of the past half century. Companies that bet "against" Moore's Law at virtually every point in the past 45 years have been proven wrong, often catastrophically. Even those that survived were often forced out of the electronics business.

But Moore's law has had a major negative effect. It's lulled us into the incorrect belief that everything can and should advance at that kind of exponential pace, that given enough R&D, every business should be able to achieve the same kinds of cost reductions and product improvements that Intel and others in the semiconductor field have managed. In fact, it should be quite clear that the semiconductor industry is the exception. It's the only business in which advancements follow such a clear trajectory or such an exponential one. Everywhere else, things proceed along much less predictable and certainly non-exponential paths of advancement. Yet over the past 45 years, the belief in there always being some disruptively better technical solution for every problem has become so ingrained that it's usually not critically questioned. When Red Herring wrote about the problem in 2003, they spoke of it as a key cause of the Dotcom boom and bust: millions of would-be entrepreneurs applying Moore's Law rates of growth to businesses for which no such expectation was reasonable. Today, we're applying those same kinds of expectations to everything, including such labor-intensive tasks as oil recovery, health care and screening of airline passengers. Usually when we try to apply the technical lessons of Moore's law to other fields, we fail, often catastrophically.

Yet we hear this ingrained expectation everywhere, including on Capitol Hill yesterday. The presumption is that a device invented 40 years ago should necessarily have been replaced with something significantly different and better. Something exponentially better. But the science and technology of separating crude oil from salt water does not follow the trajectory of Moore's Law. It could be argued that there's no real good technology to replace floating booms for the purpose for which they were intended. They need to float, they need to be flexible, they need to be lightweight enough that huge quantities can be easily transported quickly to anyplace they're needed. Are they perfect? Certainly not. Should they be supplemented with other types of technologies? Certainly. Could those new solutions benefit from new computer technology too? Probably. (In fact, one of the major improvements in boom usage has been the employment of satellite imagery and other computer-enabled technologies to determine where and how to best deploy them.) Has the oil industry failed to put sufficient efforts behind those other supplemental technologies? Quite likely.

But are we likely to find a "quantum leap" type technology to replace booms? Something as lightweight, flexible and easily deployable while being much, much more effective? Personally I doubt it. Again, oil recovery doesn't follow the trajectory of Moore's Law, it follows some very old, very well understood laws of physics. As Scotty often told Captain Kirk, we can't change those. At best, we can use the physics and chemistry in new devices, at worst, we can't do much else.

Most technologies don't follow Moore's Law. Cars are largely unchanged in the past 50 years or longer. Put my grandfather the bus driver (who passed in the 1930s) behind the wheel of a modern vehicle and most of it would seem pretty familiar to him, right down to maintenance items like changing the oil, filling it up with gas or putting air in the tires. There have been slow incremental improvements, but fewer than you might think: most of the big advances in vehicles are the result of better automation and electronics -- they too were driven by Moore's Law. Look around at virtually everything in our world and you'll see stuff that mostly hasn't changed much, or where the changes were driven by better electronics. Technologies that don't utilize electronics or aren't highly-dependent on computerization haven't changed a whole lot.

My bike is similar in operation to the one I had in grade school. Better materials technology, better design and better machining have made it lighter, stronger and given it a lot more gears. However, it seems that basic mechanics was pretty-well developed 35 years ago. Moore's Law-driven technologies have certainly contributed to the improvements (mostly through computer aided design and manufacturing), but there was no quantum leap. I could not ride cross country a whole lot more easily today than I could when I did my first long tour at age 16. The most efficient cooling device in my home -- a modern ceiling fan -- would be easily recognizable by my grandmother: put her 1940s model side-by-side with my 2010 model and you'd need an engineer to point out the ways in which the current one is better.

This is part of the driving force behind the current economic malaise around the world. The problems of the past 30 years and were mostly solved with computerization and application of better electronics, which have also driven new growth in new industries. The exponential improvements in computer technology has resulted in second and third order improvements in everything else. As available computing power has continued to grow beyond most people's ability to use it, we are running headlong into problems that are not so easily solved. More advanced electronics can make gasoline-based cars more efficient, more luxurious, even more fun, but they won't help us replace the internal combustion engine with something independent of fossil fuels, at best they'll be a second-order enabler of whatever new drive technology we need to invent. Likewise, we're not going to solve our healthcare cost crisis by hoping that advanced technology will result in a Moore's Law style exponential decline in costs. There is no evidence to suggest that such a thing is possible, let alone likely, yet I still hear those who suggest that high costs for care can be cured by just unleashing Silicon Valley technologies.

It's time for us to look beyond Moore's Law and the kind of exponential growth it has driven in a limited number of industries. Moore's Law is not the norm, it's the exception. 40 years ago flexible booms were designed within a set of limitations that drove the best design possible. Other than some materials technology improvements, they mostly look the same today and they're likely to look much the same in another 40 years because the design limitation are unlikely to change much. 40 years ago healthcare was people-intensive and thus unlikely to benefit much from economies of scale in the way electronics do, and the same is likely to be true 40 years from now. Properly screening airline passengers is always going to be people-intensive, as it is in Tel-Aviv, regardless of how many "revolutionary" technologies GE (NYSE: GE) and Rapiscan (NasdaqGM: OSIS) convince us to spend money on. In fact, most things in 40 years are not likely to look all that different. It's time we stopped pretending computer technology solves all problems, or that everything can be improved at Moore's Law's exponential rate.

-mg

Bandwidth use pricing? It's high time.

So today AT&T (NYSE: T) has finally told us what was probably inevitable. The offering of unlimited bandwidth to everybody was not working out well and it's going to be phased out.

As an existing iPhone user, I was a bit put off. True, I'd be able to keep my unlimited bandwidth for $30 for as long as I own this phone, but I know that in time I'll want to replace it and then things will change. By the time that happens, Apple (NasdaqGS: AAPL) may offer me an alternative network, hopefully Verizon (NYSE: VZ) Wireless , but I'm not counting on it.

But I did a little checking. Looking at the meter on my phone, I note that I've done about 1.3GB of downloads in the life of the phone, and barely 300MB of uploads the phone was replaced about 9 months ago. Checking my bills online, I saw that there has not been a single month in which I exceeded 200MB of use. This means that I'd be able to continue using no more than I already am and cut my cost from the current $30 unlimited use to the new "basic" level at $15 for 200MB. If I prefer not to "cut it close" and maybe allow me to see some streaming video now and then, I could still drop to the 2GB plan at $25 per month. That would allow me to increase my use tenfold and still not get hit with additional fees.

Now at the end of the day, I'm sitting here thinking "Thank you AT&T, you're going to save me money."

I don't think this ends here though. AT&T has just put out a template for what pricing is likely to look like in the future for all bandwidth providers, whether wired or wireless. The basic plan will be very reasonably priced and most likely will suit the needs of 65% of the population, more or less one standard deviation off the mean. The "heavy user" plan will extend available bandwidth to cover the needs of all but the top 2-3% of the population, or more or less all but those who are two standard deviations above the mean. I expect that over time as bandwidth availability increases along with use, we will see the bandwidth providers move the caps upwards while keeping the general scheme in place.

The top 2-3% will lose their subsidy and will be forced to pay progressively more for the bandwidth they consume. The rest of us will be allowed to stop subsidizing them. Bad for those who can't survive without endless streaming video on their phones, good for the rest of us who have been providing the subsidy.

This is how it should be. As I've noted before, I hate having to subsidize others through my subscriptions. I don't like it when it's the cable company forcing me to pay big fees for packages including ESPN and local TV channels that I don't watch or want, and I don't like it when it's the wireless company making me pay $30 a month when I'm using only a fraction of the bandwidth of some others paying the same price.

And there may be the added benefit of forcing some of LA's worst drivers into finally getting off their Blackberries and iPhones and paying attention to the road.

mg

Brief Notes

A few new thoughts, a few follow-ups on things I've written about before.

• This article in the LA Times neatly sums up a lot of the reasons I think Foursquare has pretty limited appeal in a way that I couldn't quite put my finger on when I wrote about it. Even if you could get all my friends and venues on the service, it would be of limited use given the local logistics. Of course, the effect is circular: nobody's on it because it's of limited use, which makes it even less appealling and therefore less useful.
   
• Is Facebook really going to adjust in a meaningful way? Actions will tell, as I don't at this point trust their words. As I noted a couple of weeks ago, combining granular controls with easy controls is not impossible, as others have done it. The most important thing I take from this is their concession that giving me an easy way to block all third-party sharing of data is a feature that is desired. After all, even my bank gives me this option (not as easy to exercise as it should be, but it's there as a matter of law), and so do the credit agencies for a nominal fee.
  
  In fact, I think this could be a source of income: want a completely free Facebook? Give up some degree of info to get it. Want complete privacy? Pay a fee for the service. This idea actually lets the market work things out, as it lets a customer know what Facebook thinks the ability to share your information is worth and you can make a fair economic judgement about how you choose to pay for the service: directly or indirectly. This isn't all that different from allowing paid subscribers to not be subject to popups and other annoyances.
   
• Strippers Declare Inflation Dead! Business headline writers need to have fun too.
   
• Though, on that note, an old neighbor who moonlights as a "gentlemen's entertainer" tells me that even in the usually impervious Westside L.A. market, demand for her "services" is extremely slow these days.
   
• Transparent ratings are the kind of thing my friend Dennis at Institutional Risk Analytics has been promoting for some time. I'm not sure if Bloomberg's move into this business is good for him, but it certainly is good for us. Removing the importance given to the incompetents at the big ratings agencies would be a plus for everybody except those who are in on the sleazy "AAA" rated deals.
   
• One of the more interesting things I've read recently is a piece by Charles Gave, forwarded by John Maudlin. I won't reproduce copyrighted stuff here, but the upshot of the commentary is that the European crisis is a good thing, as it'll end the severe mis-allocations of capital that went along with the notion of a "single Europe." As he notes, ending the mis-allocation of capital into places like Greece is no different from ending the severe mis-allocation of capital into Miami condos that we experienced. Eventually the crisis forces us to start doing the right thing. The downside from my perspective? There's a lot of pain to be felt before the positive benefits of capital reallocation are realized.
   
• Spring has sprung, though it apparently snowed in the mountains here last night as well as in my "home" mountains outside of Salt Lake. Sadly, I think I'm done with skiing for the year. Might change my mind if Memorial Day plans fall through though.
   
• My best advice for energy efficiency in warmer climates? A simple ceiling fan. I just replaced mine yesterday after more than five years of good service. The new one is super-efficient, quiet and drops the temperature in the place 5-10 degrees. Been putting my money where my mouth is: installed one in each room for my brother and having them put into mom's place in Manhattan during her renovation.
   
• I've been grilling lots of lean meats and veggies. Because I'm on a diet? Well, a bit. Mostly because now that the weather is nice, it's pleasant to grill and the grill is so much easier to clean than the kitchen.

Now, if only the wind would calm down a bit so I could get the kayak out for the first time this spring.

mg

Some more on Foursquare

[Note that a previous entry on this topic has been deleted, as some of my criticisms have been resolved and some others turn out to be inaccurate, though it took a lot of searching to find the resolutions.]

I've played with Foursquare a bit since my last comment, and have decided that for now I'm done with it. Will not be cancelling my account, but just don't see much utility in continuing to play at this point.

There are lots of reasons for this including the wrong venue locations, horrible customer service, inability to get locations corrected, etc. But the core reason is that none of my friends are on it, none of them are especially interested in it, and none of the places I regularly hang out care about it at all.

To some degree it's generational, but also location and outlook, I suspect. Nothing could have crystallized the problem for me more than the fact that I "won" the "Far Far Away" badge after checking in a few places this past weekend. Foursquare, of course, doesn't actually tell you what you have to do to win the various badges, but there are some online listings that private individuals have come up with. Most of them suggested that the badge is won for checking in outside city limits. That didn't work. What did? Three checkins above 59th St. in Manhattan. Yup, those of us who don't live downtown or in Brooklyn are "far, far, away" according to the people who run Foursquare. Thanks assholes. You've confirmed your status as a bunch of useless faux-hipsters who think you're too good for the rest of the world. Did one of you send this text message too?

My personal feelings about this aside, it's just tough for me to use this in a way that is useful and beneficial to me. I'm not getting any benefits from my regular venues because they seem to exist primarily at other types of venues: coffee houses and cheap restaurants or bars, especially the impersonal chains that don't get to know their customers and/or have rules against rewarding them appropriately except as part of an organized campaign vetted by lawyers and marketing types. The places I hang out at most aren't especially looking for lots of checkins, they'd be a lot happier with a smaller number of high-dollar checkins, but Foursquare doesn't measure that. I am getting lots of frustration from not being able to check in at the places that I go to often because of mapping problems. A few weeks ago, up at Snowbird, I didn't even try. Why bother when you know the locations are all off the map, aren't getting corrected even when you report them, and the checkins won't work? And of course, my friends aren't on it.

So for now, my account's still there and I'll be watching how they're doing because the whole notion of location-based apps interests me, but for now the utility is nonexistent. I suspect that the technology will either be bought or reproduced by somebody like Facebook or Twitter. It would make a lot more sense if it were fully integrated into just about any other social networking platform.

mg

[The Foursquare logo is property of Foursquare,
used under "fair use" provisions of copyright law.]

 

Thinking About FourSquare

On my friend Nigel's recommendation, I've been experimenting with Foursquare for a few days. He and some others think it's the "next big thing," Based on my initial impression, I have my doubts and a number of thoughts about how it can become better.

For those of you who aren't familiar with it, Foursquare is a social networking utility that allows you to check in at local establishments, post your location to your FaceBook and Twitter feeds. (Out of respect for all my friends whose feeds are already full of stuff they don't care about, I've declined to do this).

I first became aware of it due to the clutter it was creating in my Facebook feed, which led me to quickly block the application from posting anything there. Realistically, I don't much care about where a couple of friends of mine, most of whom are elsewhere in the world, have "checked in" in the past few minutes. In fact, I don't much care where most of the people in my immediate neighborhood are unless I'm trying to avoid them, but that's probably just me.

As you check in in different places you accumulate points and "badges" for various things. If you are the most frequent visitor to an establishment, you are declared the "mayor" and reputedly some places are giving the "mayor" special benefits.

Quick Friday Notes

The weekend couldn't have come soon enough.

• It's good to hear of at least one friend whose job has been "created or saved" this year. In her case, "saved," though her employer is a non-American company it will undoubtedly be counted as a victory for the "stimulus." Congrats Kara!
• Apropos my earlier post, Barry Ritholtz is demanding a well-deserved apology for those who smeared him, David Einhorn and others over their well-researched questioning of Lehman and its execs prior to the meltdown.
• Barry also notes the endgame of the chicanery and fraud that has been tolerated for far too long:

  All in all, the entire system failed. The situation is utterly disgusting, and if the investing public pulls its money out of the completely corrupt public markets for a generation or more, it would not surprise me . . .

  That's not a happy prognosis if you believe the markets serve an important function in providing funding to businesses that need it. But perhaps it's indicative of how far we've come from that basic thesis, that in fact the markets no longer are serving the "main street" interest of financing businesses all that well. Instead they've discovered it's more profitable to run a casino where the little guy is always betting against the house and they make money either way while providing no social utility to anybody. And maybe the public would be right to just go elsewhere until they actually do something anybody outside "the club" finds useful.
• And all this should serve to remind us that nothing's new. It appears now that Lehman may very well have been technically insolvent years before their problems became known, just like Enron. And their unwillingness to control risk is long-standing, extending back to this incident in 1998 and probably earlier. As Jim Grant noted at the time, on Wall Street there's no constituency for the truth.
• Lenny Dykstra's ego and penchant for coming back long after he overstayed his welcome is perhaps second only to Casey Serin's. His latest? He's hoping to sell you a subscription to a scammy newsletter far more expensive than the one he used to sell through TheStreet.com, but he's doing it without their help as even Jim Cramer's often-maligned web empire won't touch the guy. This, all while trying to get out of bankruptcy. Of course, this time you get an autographed baseball if you sign up, which may be the only tangible benefit to the whole thing.

And now it's time to head over to "The Palm Tree" where we will celebrate a job saved!

mg

The Short Sellers Didn't Do It!

So, the results are finally in, and it seems that short sellers, speculators, Wall Street insiders and all the rest had pretty much nothing to do with the collapse of Lehman.

It seems that Lehman's executives and it's auditors were pretty much responsible, just as I thought when it happened.

Maybe now we'll question Vikram Pandit over at crippled and government-supported Citi (NYSE:C), who still claims that the institution is and was always fine and that the reason it nearly collapsed and needed more government money was a bunch of short sellers.

Or perhaps we'll consider that the reasons for the Euro's decline is not a bunch of short sellers thinking they could move the $2t a day currency markets, but rather because Greece, Portugal and maybe Spain are complete basket cases who have been falsifying their books in a manner that would make the Lehman and Enron guys look like angels, and the various European bureaucracies have been no better at calling them out on it than the Auditors of those private firms were. I mean really, if you had a bunch of Euros and you saw this coming, wouldn't you sell them? Just as I saw what was coming and got rid of the Toyota? If you have a brain you would have.

Maybe we'll even apologize to Soros for blaming him for "breaking" the pound, when the reality is that it was political pig-headedness and a desire to have the impossible that led to the pounds unsustainable rise and inevitable collapse. We might even recognize that the "breaking" of the pound presaged the British boom of the late 90s and early 2000s.

But for now, it's easier to blame "speculators" for causing all these problems. The reality is that most of them aren't that smart. They're just smarter in most cases than those who caused the problems and imagined that they could maintain the unmaintainable and sustain the unsustainable. They hate the speculators not so much for making money off their scams, but because the speculators are necessarily the ones who are yelling that the emperor has no clothes and that's bad for business.

I'm not much of a fan of a lot of what goes on these days on Wall Street. As far as I'm concerned all the "prop traders" of various types should be kicked out of any insitutions that get any government support or favorable treatment (by which I mean, any access I don't personally have) and forced to either make it or break it on their own. But I'm happy there are guys like Soros, Ackman, Tilson & Tongue, Einhorn and many others who are willing to stand up and note that the emperor has no clothes and get me away from the parade before the riot starts. I haven't always agreed and I've sometimes even made money betting the other way, but they make the debate and they shine light in lots of places where others prefer no light be shone. That's a good thing, the Greeks, Citiwhores and Lehmanfrauds notwithstanding.

mg

A Taxing Change of Paradigm

Amazon and Colorado are in a bit of a tiff over sales taxes. Colorado wants Amazon to either collect sales taxes or report them for purchases by everybody in Colorado. They'd also like reporting about payments to amazon affiliates and everybody else who might earn a bit of money from Amazon.

This is likely to be coming soon to New York, California and many other states as well.

The problem is a simple one: While states have the right to assess sales taxes on anything delivered to a buyer in the state, they have no jurisdiction to demand that an out-of-state seller actually collect the tax on their behalf. And with the proliferation of small online sellers -- including many who sell through Amazon, Google, eBay and others -- it's tougher and tougher to police this. State officials believe they're losing a lot of sales tax income because while they're entitled to collect the tax, it's not practical to track bill each individual purchaser for each out-of-state purchase.

Amazon has responded to Colorado's new law by cutting off all Amazon affiliates in the state. As noted earlier in the Huffington Post, this is more likely a matter of bringing political pressure than anything else.

But whatever the political maneuvering, the dispute is just the tip of the iceberg, indicating a much, much greater problem lurking below and increasingly undermining our entire tax system.

Again, the Solution is Obvious

They're at it again.

Once again, they're trying to pretend that the battle between network affiliates, other local TV stations and the cable companies that deliver their content to most households has to do with anything more than strong-arming the American public into padding their profits and buying content we don't want.

As I've noted before, there's a really simple way to resolve these conflicts, whether they're between Fox and Time Warner, ABC and Cablevision, or anybody else.

Stop demanding that we buy "packages" of stations in a way that subsidizes content we don't want and elimiates any ability to really vote with our wallets about what content we do want and what we're willing to pay for it. Want to save me money Cablevision? (Or Time Warner?) Easy. Let me opt out of all the expensive stations that I never watch. That'll save approximately $4 a month (or so I'm told) on ESPN because I never watch sports. Probably a few bucks for the local independents and their incessant Seinfeld reruns. Probably would drop the network affiliates too, as network programming is completly worthless. In fact, I'd probably drop all the "Broadcast Basic" stations that I never watch and which represent much of the "baseline" product I am forced to buy before I buy anything else.

It'll save me money, it'll deliver the content I want and it will allow the marketplace to work, because nobody will need to debate, discuss or argue about what consumers are willing to pay for any network. We'll vote with our wallets and you'll know how much or how little we value your product.

Accelerating Change

Watching the near-implosion of Toyota's (NYSE:TM) image in recent weeks, I've had two thoughts:

1) There but for the grace of God went my car's value. You see, I owned a Prius up until December 31. I had problems with the anti-lock brake system (similar to the ones reported on the 2010 model, though mine was much older), and had it repaired under warranty at great expense to Toyota, but never really got the feeling they knew what the problem was or had any solution other than "replace the whole thing and hope it works." Between that and the early rumblings about sudden acceleration problems in "push button start" vehicles, I decided that getting out of that car sooner rather than later was a good move.

Besides, I did my deal on New Year's Eve, when the dealer was happy to cut things to the bone to move inventory. It worked out well for me, but probably not so well for whoever ended up owning my old vehicle.

2) How in the world could the world's entire automotive industry throw away a century of experience about what is required for user safety in any dangerous piece of equipment, which a car most certainly is?

I'm talking about the "push button" start, and more specifically, about the fact that vehicles equipped with it no longer have the sort of a safety shutoff switch of the type required in virtually every dangerous piece of equipment that you might purchase, from a toaster to a table saw, to a large piece of motorized industrial equipment.

Why Sirius-XM Fails

I purchased a new vehicle recently. Like most vehicle manufacturers, Honda (NYSE: HMC) has a deal with one of the two satellite radio services, in this case XM. For those of you who haven't been living under a rock, former competitors Sirius (NasdaqGS:SIRI) and XM were allowed to merge a year or so ago, and while they still support the two incompatible services, they are, or at least should be, operated as one company.

When it comes to content, lots of merging has already taken place. Some content (especially sports) is available only on one or the other and some (like Howard Stern) is only part of the basic package on one of the services, but not both. Some of the channel lineups aree different as well. These oddball differences are mostly the result of pre-existing contracts and in all likelyhood will be resoved when the contracts are renewed or renegotiated in the coming years.

But operationally the merger is a disaster. I know, because I've just recently had to deal with the customer service operations at both services, because my previous provider was Sirius and I needed to switch to accommodate the new vehicle.

You would think that with both companies under the same roof, you'd be able to easily switch from one the the other. But you'd be thinking wrong. There is no way to switch to the "other" service offered by the same company and no way to have an account that covers receivers on both, which means that to have two receivers with the "multi radio discount" I had to replace a perfectly adequate home receiver that has been connected to my stereo system for a couple of years. To me, the changeover has involved nothing but waste and annoyance.

Poor Business Planning

Originally uploaded by MichaelGat

The owners of this obsolete KFC at the edge of Culver City and Los Angeles have found a new use for their property. But isn't this rather foolish? Wouldn't it have made sense to keep a KFC counter going as well? While I can applaud them for jumping into California's #1 growth industry, I have to wonder how they failed to note the symbiotic relationship between the stuff they're currently selling and fast food? Wouldn't a sharp business mind have tried to take advantage of real business synergies between the two?

I suspect the current operators didn't think things though. Of course, less-than-clear thinking is probably an occupational hazard.

Got to give them props for coming up with the name Kind For Cures, leveraging the previous occupant's brand name.

mg

How to Sell to an Introvert

About 30% of the population* are generally classified as "introverts," the somewhat infamous "I" in the MBTI system.

Which is a rather simple way of saying that all things being equal, I prefer more "alone" time and less "social" time. Many people, especially most salespeople often refer to me (and by extension other introverts) as "antisocial." This couldn't be further from the truth. As a project manager, my job is mostly about people and I love it. I just take my social interactions a more slowly and deliberately, which in turn means I have room for fewer of them.

Since most of those "slots" are taken up by family, people I work with and friends, things like dealing with salespeople just don't make the cut. I don't have anything against salespeople, I just don't particularly have any desire to be engaged with them in any way that goes beyond the basic transactional and informational communication that needs to occur in order for me to get what I need.

This makes it really difficut when I'm doing something like looking for a car, because the whole government-protected car dealer system is built around the central idea that you will deal with a person from the moment you step onto the lot until weeks after the purchase is completed. A bunch of state franchise laws have made it all but impossible for anybody to offer "direct to the customer" sales or even factory-owned displays and showrooms, and this really tends to discourage dealers from allowing you to shop on your own terms rather than theirs. (In my ideal world, I'd configure the car I wanted online and have it delivered to my door, just like my iMac! If I needed to check out something in person, I'd visit a factory test drive center, just like I visit the Apple store occasionally.)