Welcome to "On the 50 Yard Line" The Blog of Stuart L. Pardau, Attorney, Professor and Observer of Political Economy; It’s not just about football.

Wednesday, November 30, 2011

It's Tebow Time

I have previously posted about the skills and aura of Tim Tebow, QB of the Denver Broncos. It seems he has a lot of fans.  


To wit, Tebow had the second best selling jersey on NFLShop.com last week only behind Green Bay Packers quarterback Aaron Rodgers and he's moved up five spots this month alone to the sixth best selling jersey from April through November on the league's online store.

http://www.cnbc.com/id/45493671/

Zynga Shoots for IPO Valuation of $10 Billion

In one of the most highly anticipated deals of the year, Zynga plans to file terms with the SEC on Friday for an IPO that would generate around $900 million in proceeds.
Zynga rose to prominence on viral games such as "Farmville," which is still among one of the most popular games on the Facebook social network. While its games are free, Zynga makes money from selling virtual items such as tractors and weapons that people use in its game worlds.
Zynga executives will lead presentations to potential investors starting next week.
Founded in 2007, the company increased its annual revenue from $19.4 million in 2008 to $597.5 million in 2010, and generated revenue of $828.9 million in the nine months to September 30. Over the same period, net income was $30.7 million and earnings before interest, taxes, depreciation and amortization (EBITDA) were $235.5 million.




http://finance.yahoo.com/news/exclusive-zynga-aims-10-billion-001841971.html

Headwinds in China


Manufacturing in China recorded the weakest performance since the global recession eased in 2009, underscoring the case for monetary stimulus as the EU banking and monetary crisis weighs on the world’s second-largest economy.
A purchasing managers’ index compiled by the China Federation of Logistics and Purchasing slid to 49 in November, lower than all but two of 18 forecasts, in a Bloomberg News survey. 
Readings below 50 signal a contraction.


http://www.bloomberg.com/news/2011-12-01/china-s-manufacturing-at-weakest-since-2009-augurs-further-easing-economy.html

Napster, RIP

Napster, one of the original peer to peer networks,  may have lost the battle against the RIAA and the record industry, but one could argue they won the war. True, Napster has bitten the dust, but with it, they have forever changed the paradigm of the music industry.

http://money.cnn.com/2011/11/30/technology/napster_rhapsody/index.htm?source=cnn_bin

President Obama's Visits and Traffic Jams

Apparently the President's visits create a lot street closures and heinous traffic jams in the Big Apple. Unfortunately it is much the same result here in the Westside of Los Angeles.  I want to say it has been 3, perhaps 4 times in the past 15 or 16 months. Each time, I found myself stuck on the road for close to two hours in what would even by L.A.'s normally traffic-laden standards would take fifteen or twenty minutes. I am sure there are some very compelling security reasons for these obscene delays. But one solution might just be fewer visits. Or drawing some distinction between official business and fundraising. Many of the visits have been relating to the latter. Out of respect for most of us Westside Angelenos, can't fundraising events be concentrated in areas (such as the Marina Del Rey area) that are designed to minimize local disruptions?

http://www.jammiewf.com/2011/every-time-obama-comes-to-new-york-it’s-a-nightmare/

Amazon and online retailer "tax advantage" gap is closing

But read on the attached link, it looks like the gap is closing but not completely. It appears that Amazon has made the calculation they have cut the best deal they can while still maintaining some advantages of brick and mortar retailers. A smart approach and it means a lot more revenue for cash starved states.

http://blogs.wsj.com/law/2011/11/30/amazon-sales-tax-loopholes-likely-to-end-next-year/

Tuesday, November 29, 2011

S&P Downgrades Major "Too Big To Fail" Banks

Includes Wells, Citigroup, BofA, JP Morgan and Goldman...

http://www.foxbusiness.com/industries/2011/11/29/sp-downgrades-dozens-global-banks/

More powers proposed for EU Data Enforcement

A lot of platitudes and buzz words in this disappointing speech by this EU Justice Commissioner arguing for "BCR's" or "binding corporate rules", which when you peel everything away means simply more enforcement powers for EU authorities and greater costs of compliance for firms. Aren't EU data security laws already sufficiently restrictive? With a collapsing Euro and 20% unemployment for many in Euroland, aren't there greater priorities to tackle?

http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/11/817&format=HTML&aged=0&language=EN&guiLanguage=en

Facebook reaches settlement with FTC on privacy alleged breaches


As reported in the Wall Street Journal: 
The settlement stems in part from changes Facebook made to its privacy settings in December 2009 to make aspects of users’ profiles—such as name, picture, city, gender, and friends list—public by default. The FTC said Facebook didn’t warn users the change was coming or obtain their approval.
Among the other charges, the FTC said Facebook promised users it wouldn’t share their personal information with advertisers, but did so anyway. The agency also said Facebook shared much of its users’ data with third-party applications, despite its representation that such data-sharing would be limited.
In a blog post on Facebook, Chief Executive Mark Zuckerberg admitted that the company made a “small number of high profile mistakes.”


http://blogs.wsj.com/law/2011/11/29/facebook-reaches-privacy-settlement-with-ftc/

Nein, Nein, Nein

I consciously avoid commenting directly on the "horse race" aspects of politics, or even politics in general. But here, I cannot resist. It looks like Herman Cain's candidacy is going out not with a whimper, but with a bang. I do not know if these new set of allegations are true or not, but I have got to believe the notion that the sum total of charges of sexual harassment and affairs is orchestrated by some vast left-wing conspiracy (or some combination of his Republican opponents) is increasingly implausible.  He is done as a candidate and the notion of him as a front-runner will be a curious footnote in what is turning out to be one of the oddest political years in recent memory.

But here is a little levity. A joke: "What did the Lufthansa flight attendant tell Herman Cain?"  Answer: "Nein, Nein, nein."


http://thecaucus.blogs.nytimes.com/2011/11/29/cain-reassessing-candidacy-as-new-allegations-emerge/?partner=rss&emc=rss

Nein, Nein, Nein

I consciously avoid commenting directly on the "horse race" aspects of politics, or even politics in general. But here, I cannot resist. It looks like Herman Cain's candidacy is going out not with a whimper, but with a bang. I do not know if these new set of allegations are true or not, but I have got to believe the notion that the sum total of charges of sexual harassment and affairs is orchestrated by some vast left-wing conspiracy (or some combination of his Republican opponents) is increasingly implausible.  He is done as a candidate and the notion of him as a front-runner will be a curious footnote in what is turning out to be one of the oddest political years in recent memory.

But here is a little levity. A joke: "What did the Lufthansa flight attendant tell Herman Cain?"  Answer: "Nein, Nein, nein."


http://thecaucus.blogs.nytimes.com/2011/11/29/cain-reassessing-candidacy-as-new-allegations-emerge/?partner=rss&emc=rss

The End of the Euro?

This is no longer theory, but it seems now, a very plausible outcome. What will be one of the side effects: A strengthening of the dollar? The Yen? Another run-up in gold? I am not ready to start stocking up on canned goods, bottled water and firearms, but this sort of stuff is historic, at least in the post-WW II period. Let's all hope and pray for as "soft a landing" as possible.

http://www.ft.com/intl/cms/s/0/25ab975a-1a9f-11e1-ae14-00144feabdc0.html

Former Congressman Billy Tauzin (Head of Energy & Commerce Committee) Pockets over $11 million in one year as Lobbyist

As a lobbyist on behalf of the Health Care industry, former Congressman, Billy Tauzin received over $11 million in fees in 2010 in connection with the passage of ObamaCare. A few immediate questions come to mind: 1) The most obvious being what on earth did Tauzin do to earn that kind of money?; 2) Based on the fact that ObamaCare "passed" how effective was Tauzin, if at all?; 3) What would have Tauzin's fees been if ObamaCare had NOT passed? $100 million?; and 4) This disgusting process whereby former legislatures and their staff make tons of money lobbying their former colleagues must stop and it must stop now. There should be a blanket prohibition on all forms of lobbying by former legislators.  We need to put the "public" back in the phrase of "public service".

http://www.bloomberg.com/news/2011-11-29/tauzin-s-11-6-million-made-him-highest-paid-health-law-lobbyist.html

Public University In Indiana Offers 100% online degrees at fixed rates

This new 100% online model coupled with flat fees per semester (not units) is an interesting model that can reshift the cost structure of higher education.

http://indiana.wgu.edu/about_wgu_indiana/overview

Monday, November 28, 2011

Malls Put End to Tracking Shopper Movement Based on Cell Phone Location


The Promenade Temecula in southern California and Short Pump Town Center in Richmond, Va., launched a survey on Black Friday, tracking shoppers' movements by monitoring the signals from their cell phones. However, after Senator Charles Schumer (Democrat) of New York intervened, the malls, put a halt to this ill-advised decision. This again is an example of the tempting desires of businesses to acquire available data, facilitated by technology, though they must be ever mindful of the privacy implications and the negative publicity that emerges after the proverbial fit hits the shan. 

Tim Tebow: The Magic Continues

I watched most of the Broncos-Chargers game yesterday. It was the most I had seen of Tebow (this season) in any one sitting. I must confess I am hooked.

In large measure his critics are correct: He does not have a strong arm, though he frequently scrambles and runs with the ball, he is has nowhere near the athleticism of say, a Michael Vick, his passing completion percentages (fairly unimpressive to begin with seem bolstered by a generous use of short yardage throws)  and he is clearly the beneficiary of a strong offensive line and a defensive unit that can keep even the most anemic of offenses "in the game".

There is one inconvenient item these criticisms overlook: The Broncos keep winning and Tebow keeps making the big plays.  For points of reference and insight, three thoughts immediately come to mind: 1) Remember Kirk Gibson in 1988 (baseball, I know, not football)? Everyone of course remembers the famous home run in the World Series, but Gibson also won the MVP that season, with very non-MVP like statistics Personally I think he absolutely deserved it because he clearly by his sheer will and determination made the Dodgers a much better team, even if his batting average, RBI's and home run stats did not reflect that. Sort of the same deal with Tebow; 2) Remember Billy Kilmer? Now there was a wobbler, not many spirals there. yet the guy was a Pro Bowler and led the Redskins to the Super Bowl and many playoff appearances; and 3) Finally remember BOTH Johnny Unitas and Joe Montana; hall of famers both, but neither terribly athletic (though Montana had great footwork). Unitas was drafted in something like the 17th round by the Steelers,  I think and was cut before being picked up by the Colts. And Montana came in with many questions and a lot of his game was short passes. Look, I have no idea if Tebow will be a Hall of Famer or not, but after seeing what I saw, I believe he is more than a flash in the pan, and in fact, probably a lot more.

http://www.columbiatribune.com/news/2011/nov/28/tebow-works-more-magic/

GM Offers Loaners to Chevy Volt Owners Concerned of Fire Risk

This has got to be a public relations disaster for GM, which already has been suffering from pathetically anemic Chevy Volt sales. Tellingly, GM,  which reasserted the overall safety of the car, had no estimates about how many loaners might be requested or how long the Volt owners will be able to use the loaner. I mean what about six weeks for a loaner? Six months? Six years? This seems ill-conceived and hopelessly reactive.

http://money.cnn.com/2011/11/28/autos/volt_fire_probe/index.htm?source=cnn_bin

Market Failures in Higher Education: Lessons from China

It appears China has actually mandated that College majors which result in limited job prospects will be phased out. The article does not mention which majors they have in mind, but as for the U.S. we can all probably create our own lists which would likely not be far off the mark.

Another telling insight in the article is the distorting effect of Sallie Mae on the cost of education. From a pure microeconomic perspective, a key impact of all that "cheap money" has been to artificially drive up the cost of education. Sound familiar? Much like its cousins Fannie and Freddie in the housing market context, government involvement, while not facially suspect, should be carefully examined. All these programs which were driven by political considerations -- and almost always by the best of intentions -- have resulted in some fairly disastrous consequences overall. Most who follow this closely are anticipating a massive default of student loan debt, estimated to be $1 trillion in the aggregate. Hang on.

http://www.realclearmarkets.com/articles/2011/11/28/the_root_cause_of_market_failure_in_higher_education_99387.html

Judge Rakoff Rejects SEC Citibank Consent Decree over Mortgage Bonds

A far reaching decision by the respected District Court Judge, Jed Rakoff, that has far-reaching implications beyond just this case.

http://online.wsj.com/article/SB10001424052970203935604577066242448635560.html

Secret Federal Reserve Loans Resulted in Big Banks Netting $13 Billion in Income

This is a truly remarkable situation. As Bloomberg reports in part:



The Fed says it typically makes emergency loans more expensive than those available in the marketplace to discourage banks from abusing the privilege. During the crisis, Fed loans were among the cheapest around, with funding available for as low as 0.01 percent in December 2008, according to data from the central bank and money-market rates tracked by Bloomberg.
The Fed funds also benefited firms by allowing them to avoid selling assets to pay investors and depositors who pulled their money. So the assets stayed on the banks’ books, earning interest.
Banks report the difference between what they earn on loans and investments and their borrowing expenses. The figure, known as net interest margin, provides a clue to how much profit the firms turned on their Fed loans, the costs of which were included in those expenses. To calculate how much banks stood to make, Bloomberg multiplied their tax-adjusted net interest margins by their average Fed debt during reporting periods in which they took emergency loans.
The 190 firms for which data were available would have produced income of $13 billion, assuming all of the bailout funds were invested at the margins reported, the data show.
The six biggest U.S. banks’ share of the estimated subsidy was $4.8 billion, or 23 percent of their combined net income during the time they were borrowing from the Fed. Citigroup would have taken in the most, with $1.8 billion.
And who exactly will be accountable for this?


http://www.bloomberg.com/news/2011-11-28/secret-fed-loans-undisclosed-to-congress-gave-banks-13-billion-in-income.html

Has the Reach of the Foreign Corrupt Practices Act (FCPA) Gone Too Far?

Strong arguments on both sides, but one thing is certain: The requirements of the law itself provide little guidance to firms on what may be legal and what crosses the line. The article discusses some pending legislation which purports to address this issue.

http://blogs.wsj.com/law/2011/11/28/does-the-mighty-fcpa-need-reining-in/

Sunday, November 27, 2011

Prepare for Eurozone Collapse, British Foreign Office Says

As the Italian government struggled to borrow and Spain considered seeking an international bail-out, British ministers privately warned that the break-up of the euro, once almost unthinkable, is now increasingly plausible.
Diplomats are preparing to help Britons abroad through a banking collapse and even riots arising from the debt crisis, the Daily Telegraph reports.


http://www.telegraph.co.uk/news/politics/8917077/Prepare-for-riots-in-euro-collapse-Foreign-Office-warns.html

Saturday, November 26, 2011

Cisco Challenges Enforceability of HP Non-Compete Provision

Cisco has, at least in this first round, has prevailed in knocking out this attempt by HP to enforce non-compete obligations under Texas law against a former HP employee working in Texas who accepted a position in California (a jurisdiction where non-competes are not enforceable) with Cisco. In this particular case, there do appear to be some unique circumstances including the fact that HP went to the Court house in Texas, ex parte, which evidently was viewed unfavorably by the Judge there, especially since Cisco had apparently reached out to HP in an attempt to reach an accommodation on this issue.

http://blogs.cisco.com/news/hp-sues-employees-for-leaving/

Google runs Thanksgiving Day Ad during Lions-Packers game for Google+

As reported in CNET: "Google's decision to plunk down what must have been a very large chunk of change for the ad is the latest sign that it wants vast numbers of normal folks to discover Google+ and use it to share stuff with other normal folks. It wants to take on Facebook directly and rapidly, in a way that no other company could dream of doing.."

http://news.cnet.com/8301-33200_3-57331313-290/google-wants-to-usher-in-the-masses-can-it/

Forget about Greece, Italy and Spain: The coming crisis in Japan

In Japan, public debt is approximately 200% of GDP, basically double the rate of the U.S. with anemic growth and zero or negative population growth. The IMF warns that a sudden spike in bond yields could devastate Japan's ability to service its already crushing debt. The proposals on the table are just more taxes, in the form of increasing Japan's existing consumption tax.

http://online.wsj.com/article/SB10001424052970204630904577057331784667886.html?mod=googlenews_wsj

Friday, November 25, 2011

AT&T to Set Aside $4 billion in break-up fees in T-Mobile deal

In light of the set aside for this charge, we should assume that the AT&T/T-mobile proposed merger looks like it is near death if not there already.

http://money.cnn.com/2011/11/24/technology/att_t-mobile_breakup_fee/index.htm?source=cnn_bin

Thursday, November 24, 2011

Federal Judge Nixes Harrisburg Bankruptcy Filing

Interesting ruling, but I suspect this is just the first step in a long process with a still uncertain outcome. Also perhaps a guidepost as well for the future filings of other municipalities and even state governments.

http://www.cnbc.com/id/45419434

Wednesday, November 23, 2011

Soothsayer, "Dr. Doom" Nouriel Roubini Says Government Gridlock ensures 2012 recession

Following the announcement of the failure of the SuperCommittee earlier in the week, Roubini tweeted the following: "Super-Committee: Super-Failure, Super-Pathetic, Super-Gridlock, Super-GOP-Lunacy on Taxes, Super-Fiscal Drag in 2012 that ensures double dip."  Roubini predicts greater convulsions to come, exceeding that even of the fall-out in the aftermath of Lehman's collapse in 2008. Lovely. 

http://finance.yahoo.com/blogs/daily-ticker/nouriel-roubini-government-gridlock-ensures-2012-recession-134053788.html

Merck Settles Vioxx Claims

The company will pay $950 million to settle criminal and civil charges that it illegally promoted the painkiller Vioxx, the Justice Department said yesterday.

http://blogs.wsj.com/law/2011/11/22/merck-to-pay-950-million-to-settle-illegal-promotion-claims/

Tuesday, November 22, 2011

ScanScout settles FTC charges re allegations of deceptive practices around Flash cookies

Online advertiser ScanScout has agreed to settle Federal Trade Commission charges that it deceptively claimed that consumers could opt out of receiving targeted ads by changing their computer’s web browser settings to block cookies. In fact, ScanScout used Flash cookies, which browser settings could not block. The proposed settlement bars misrepresentations about the company’s data-collection practices and consumers’ ability to control collection of their data. It also requires that ScanScout take steps to improve disclosure of their data collection practices and to provide a user-friendly mechanism that allows consumers to opt out of being tracked.

http://www.ftc.gov/opa/2011/11/scanscout.shtm

Villaraigosa offer to Occupy L.A. crowd: 10,000 square feet of office space. No, this is not April Fool's

As reported in the Los Angeles Times:


"Los Angeles officials have offered Occupy L.A. protesters a package of incentives that includes downtown office space and farmland in an attempt to persuade them to abandon their camp outside of City Hall, according to several demonstrators who have been in negotiations with the city.

The details of the proposal were revealed Monday during the demonstration's nightly general assembly meeting by Jim Lafferty, an attorney with the National Lawyers Guild who has been advocating on behalf of the protest since it began seven weeks ago.

Lafferty said city officials have offered protesters a $1-a-year lease on a 10,000-square-foot office space near City Hall. He said officials also promised land elsewhere for protesters who wish to farm, as well as additional housing for the contingent of homeless people who joined the camp."


This is parody morphed into farce and fecklessness. Whatever the merits or demerits of the Occupy L.A. protestors views might be, what in God's name should grant them 10,000 square foot office at $1 year, all at taxpayer expense? This is a complete abdication by the Mayor and his handlers of all reason and common sense. First why should this deal be granted to Occupy L.A. and not say, the Tea Party?  If the American Nazi party screamed loudly might they get their piece too? And what of all the struggling small and other businesses? I bet any would love to get a free rent deal like this one.  The farming reference, also preposterous, is a mere condiment on this turd sandwich.  This thing will likely blow up in Villaraigosa's face, as it well should.


http://www.latimes.com/news/local/la-me-1122-occupy-la-move-20111122,0,1592348.story

As reported in the Los Angeles Times:


"Los Angeles officials have offered Occupy L.A. protesters a package of incentives that includes downtown office space and farmland in an attempt to persuade them to abandon their camp outside of City Hall, according to several demonstrators who have been in negotiations with the city.

The details of the proposal were revealed Monday during the demonstration's nightly general assembly meeting by Jim Lafferty, an attorney with the National Lawyers Guild who has been advocating on behalf of the protest since it began seven weeks ago.

Lafferty said city officials have offered protesters a $1-a-year lease on a 10,000-square-foot office space near City Hall. He said officials also promised land elsewhere for protesters who wish to farm, as well as additional housing for the contingent of homeless people who joined the camp."


This is parody morphed into farce and fecklessness. Whatever the merits or demerits of the Occupy L.A. protestors views might be, what in God's name should grant them 10,000 square foot office at $1 year, all at taxpayer expense? This is a complete abdication of reason and common sense. First why should this deal be granted to Occupy L.A. and not say, the Tea Party?  If the American Nazi party screamed loudly might they get their piece too? And what of all the struggling small and other businesses? I bet any would love to get a free rent deal like this one.  The farming reference, also preposterous, is mere icing on this tird sandwich. 


http://www.latimes.com/news/local/la-me-1122-occupy-la-move-20111122,0,1592348.story

Some Amazing Stories of Customer Service Interventions/Interactions by Steve Jobs

Some exceptional stories concerning a remarkable man and business leader.

http://www.cnn.com/2011/11/22/tech/innovation/jobs-excerpt-customer-service/index.html?hpt=hp_bn6

Fannie and Freddie University

The always interesting and provocative Victor Davis Hanson on the bubble in higher education.


http://pjmedia.com/victordavishanson/the-fannie-and-freddie-university/

Sunday, November 20, 2011

Law Professors and their Views of Private Practice

Excellent article on law school attitudes toward pedagogy and emphasis between theory and practice. (Read the article, but you can easily guess which way law schools currently tilt.)  There are many reasons for this: a) the academy's fear of being characterized as a "trade school"and ; b) emotional and professional insecurities of a Professorial elite with little if any real world experience who are therefore loathe to have anything that may destabilize their insular world view among many others.

Two seemingly disparate items that further make the point: 1) The subject of "contracts" as currently taught  in law schools and as structured in case books bears precious little resemblance to reality. The obsessive focus on "consideration" in particular is a complete farce, in my view. Instead, law schools and the undergraduate and MBA courses that teach contract law would be far better served by analyzing (and heaven forbid, actually drafting) a variety of contracts from license agreements, to marketing agreements, NDAs, and the like; and 2) One of my most enduring memories from law school was the utter and open contempt too many in the Faculty displayed toward attorneys and the practice of law. This hostility never sat well with me and still bothers to this day. What is different today, however, is that the changes in the profession (and poor job market) will necessitate changes in law schools. The law schools (especially those in Tier 3 and below) that don't adjust may not survive. Those that are at the forefront of these changes in peadagogy can continue to grow and even prosper.

http://www.nytimes.com/2011/11/20/business/after-law-school-associates-learn-to-be-lawyers.html?_r=2

Law Firm Confidential Documents with Private Medical Records Donated to Elementary School as Scratch Paper

It looks like a paralegal at the Minneapolis law firm, Sawicki and Phelps donated paper (which contained confidential and private health information) to a local elementary school. You can't make this stuff up.

http://minnesota.cbslocal.com/2011/11/17/private-medical-records-used-as-scrap-paper-at-mpls-school/

Saturday, November 19, 2011

Newt May be Rising but still has no Money (Relatively speaking)

As of September 30, the date of the most recent campaign finance reports, Gingrich's presidential campaign had brought in just $2.9 million, according to research by the Center for Responsive Politics.

That's only about 9 percent of GOP frontrunner Mitt Romney's  $32.2 million fund-raising haul during the same period.
In relation to the 2008 campaign, at the end of September in 2007, John McCain had raised about $32.1 million -- which was about two-thirds of the amount collected by former New York City Mayor Rudy Guliani and about half the sum brought in by Mitt Romney during that same time period, according to the Center's research.

Stated another way, having the money doesn't guarantee political success, but there is no evidence that the absence of it can result in political victory. Newt may be an exception, though I doubt it. Either we will start to see an immediate spike up in money to Gingrich or he will flame out like Bachmann, Perry and Cain before him.


http://www.opensecrets.org/news/2011/11/newt-gingrich-paper-tiger.html

The Money Trail: Politicians and their Money

An excellent and comprehensive website with links to original documents and filings.

http://www.opensecrets.org

Friday, November 18, 2011

Cyber Attack on Illinois Water Plant

Reports are that this cyberattack emanated from foreign soil. This is again another piece of disparate but highly disturbing news.  One can only speculate but a plausible reason is that this is part of systematic series of "tests" for a broader, deeper and more insidious attack and disablement of critical American systems.

http://www.washingtonpost.com/blogs/checkpoint-washington/post/foreign-hackers-broke-into-illinois-water-plant-control-system-industry-expert-says/2011/11/18/gIQAgmTZYN_blog.html

First Circuit Denies Tenenbaum Request for Re-Hearing

The First Circuit Court of Appeals denied Joel Tenenbaum another opportunity to argue his case against Sony BMG Music Entertainment, this time before an expanded judicial panel.
Sony sued Tenenbaum, a college student, in 2007 for violating copyright laws by downloading and sharing music without permission. Sony requested statutory damages under the Copyright Act, which provides awards ranging from $750 to $150,000 for each count of infringement. A jury awarded Sony a staggering $675,000 -- $22,500 for each of 30 songs.
Tenenbaum challenged the award in district court, arguing that it was so excessive that it violated his constitutional due process rights. In response, Judge Nancy Gertner agreed to reduce the judgment to $67,500, prompting Sony's appeal to the 1st Circuit.
A three-judge panel of the 1st Circuit reinstated the $675,000 award in September, finding that Gertner committed an error by immediately reducing the award without first giving Sony the choice whether to accept the smaller amount or opt for a new trial. The panel sent the case back to the lower court with the order to first give Sony that option.


http://newsandinsight.thomsonreuters.com/Legal/News/2011/11_-_November/Appeals_court_rejects_request_by_serial_downloader/

Joe Paterno Has Lung Cancer

Very sad news indeed, but totally irrelevant to the maelstrom that this iconic football coach is in the middle of. I assume -- and it is only an assumption -- that Paterno was fired only after a reasonable internal inquiry investigation into Paterno's conduct concerning the alleged child molestation by Paterno's Assistant Coach. I also presume that the investigation uncovered that Paterno either knew about this conduct or helped cover it. That is why, I assume, he was fired. It looks like Paterno learned of his cancer following his termination as head coach of Penn State. In any case, the fact that Paterno now is diagnosed with this disease should not impact analysis of his conduct in the underlying child molestation scandals. Appeals to pity (his illness), while a likely outcome pushed by Paterno and his handlers, should not be allowed to sway or influence the final result.

http://www.cnn.com/2011/11/18/us/pennsylvania-paterno/index.html?hpt=hp_t1

Juror Tweets on Arkansas Murder Case

Totally inappropriate, of course. I agree that this one area where all states would be wise to emulate California which has an express law on the books prohibiting this very conduct. It is black and white. There should be no equivocation here.

http://blogs.wsj.com/law/2011/11/17/juror-tweets-at-issue-in-arkansas-murder-case/

Thursday, November 17, 2011

GE pays no Federal Income Taxes, Despite $14 billion in profits

General Electric, one of the largest corporations in America, filed a whopping 57,000-page federal tax return earlier this year but didn't pay taxes on $14 billion in profits. The return, which was filed electronically, would have been 19 feet high if printed out and stacked

http://www.weeklystandard.com/blogs/ge-filed-57000-page-tax-return-paid-no-taxes-14-billion-profits_609137.html

Stimulus Legislation constitutes net drag on GDP over next ten years, CBO says

Congressional Budget Office (CBO) Director Douglas Elmendorf says that, according to CBO's estimates, with the stimulus legislation in place, "the level of GDP would be a little lower at the end. That is, a net negative effect on the growth of GDP over 10 years." Elmendorf then confirms that CBO estimates that the economic drag will continue in the following decade. 

http://reason.com/blog/2011/11/17/cbo-on-the-stimulus

Wednesday, November 16, 2011

Angie's List IPO

We'll see how the market responds to the $13 per share offering price and to its "consumer pays" model vs. the various "free" alternatives including Yelp, J.D. Power, BBB among many others. The Indianapolis-based company had revenue of $59 million in 2010 and $62.6 million in the first nine months of this year. It says it lost $27.2 million for 2010 and $43.2 million for the first nine months of 2011, largely because it is spending a lot on marketing to attract new users. That is a huge chunk of change to be losing and not what I would want to see if I were in an investor.  Angie's List claims to have 1 million subscribers. I wonder how they define a subscriber and what their retention rate actually is? And isn't it a mature and saturated market (in the United States) already?
AL  plans to use the proceeds from the offering, which it announced in August, for advertising and general corporate purposes. 


http://finance.yahoo.com/news/angies-list-prices-ipo-13-034438682.html;_ylt=Ag8iAEYsr0XkDrlINPUicyOiuYdG;_ylu=X3oDMTQ0MDVkcmczBG1pdANGaW5hbmNlIEZQIFRvcCBTdG9yeSBSaWdodARwa2cDYjhkZWY5MDMtOWM4Yi0zZGFjLTlhYTMtY2RmZGZiYmZhNzE5BHBvcwM3BHNlYwN0b3Bfc3RvcnkEdmVyAzEzZDJjM2MwLTEwY2YtMTFlMS05ZjNmLTk2NWFmNGIzYjhjNg--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

Alan Simpson Speaks Out About Debt Reduction and the Need for Political Courage

Simpson talks about the need to support the efforts deficit reduction committee, and even to "pray" for them. He speaks to about the political courage of both Tom Coburn and Dick Durbin, two politicians obviously coming from very different political perspectives but both trying to do what is right for the country. Says Simpson:


"When Dick Durbin announced that he was supporting our plan he said he was doing so even though it contained items he "hated like the devil hates holy water" and he knew his vote for it would deeply disappoint many of his friends and allies.
Tom Coburn well knew he would be demonized on taxes by the zealous enforcers of ideological purity like Grover Norquist of Americans for Tax Reform. But both Tom Coburn and Dick Durbin, and a supermajority of our commission, were willing to give up something they like to protect the country they love.
Our nation simply cannot afford to have our elected leaders fearfully bow and scrape to the likes of Grover Norquist and the AARP. We need real leaders, courageous leaders who will place the national interest ahead of special interests. The members of the super committee as well as congressional leaders and the president must do just that. Pray for 'em!"


http://www.cnn.com/2011/11/16/opinion/simpson-debt-panel/index.html?hpt=hp_bn9

An Addendum to the Oprah view that "50 is the new 40"

One impact of this "50 is the new 40" view is that many folks will be retiring later. According to this report, many Americans now believe they will be working at least until age 80 -- assuming they will be living that long. Altogether not such a strange proposition considering that when Social Security was adopted in the 1930s (with retirement ages at 65), life expectancies were right around 65 as well. Maybe there is some equalization going on here.

http://ca.news.yahoo.com/80-65-comes-retirement-survey-says-213825734.html

Government Bailout Losses Associated with GM Greater than Estimated

The Treasury Department dramatically boosted its estimate of losses from its $85 billion auto industry bailout by more than $9 billion in the face of General Motors Co.'s steep stock decline.
In its monthly report to Congress, the Treasury Department now says it expects to lose $23.6 billion, up from its previous estimate of $14.33 billion.
The Treasury now pegs the cost of the bailout of GM, Chrysler Group LLC and the auto finance companies at $79.6 billion. It no longer includes $5 billion it set aside to guarantee payments to auto suppliers in 2009.
The big increase is a reflection of the sharp decline in the value of GM's share price. Needless to say, this is very disappointing news and rightly or wrongly will be very harmful to the President's positioning on the economy.



http://www.detnews.com/article/20111114/AUTO01/111140434/1361/U.S.-boosts-estimate-of-auto-bailout-losses-to-$23.6B

Greater Disclosure Requirements for Law Schools: More to Come


An ABA committee is moving quickly on a proposed new accreditation standard that would greatly expand the amount of consumer information law schools must publicly disclose to prospective students.
The Standards Review Committee, which met last weekend in Chicago, is now putting the finishing touches on its proposed changes to the standard, which it hopes to act on at its next scheduled meeting in Washington, D.C., in January.


http://www.abajournal.com/news/article/aba_committee_appears_poised_to_adopt_new_jobs_placement_standard/

Foreign Corrupt Practices Act (FCPA): Where the Bribes Are

A new database has apparently been created which purports to have accurate data on FCPA, including the fact that over $2 billion in penalties have been paid out.

http://blogs.wsj.com/law/2011/11/16/where-the-bribes-are/

Victor Davis Hansen on Why the 21st Century Will Be the American Century

With defeatism and declinism in fashion,  this insightful commentator provides a sober reality check.

http://www.nationalreview.com/articles/283074/what-america-does-best-victor-davis-hanson

Tuesday, November 15, 2011

Forget Italy or Greece: Spain is the next shoe drop, expert says

Forget Italy or Greece, Spain is the next shoe to drop, Marc Chandler of Brown Brothers Harriman.

http://finance.yahoo.com/blogs/breakout/austerity-not-spain-next-shoe-drop-chandler-160548078.html

APEC Ministerial Statements on Privacy/Data Security

Not sure what this APEC statement means (my sense is probably very little substantively, other than symbolic of the growing visibility of privacy/data security generally). In any case, here it is:


Establishing Cross-Border Privacy Rules 

Regional economic integration, regulatory cooperation, and cross-border trade can be enhanced through improved trust and predictability in electronic commerce. We endorsed the principal documents of the APEC Privacy Pathfinder that support these important objectives. Implementing the APEC Privacy Framework through Cross Border Privacy Rules enables greater information flows that support innovation and promote interoperability across global data privacy regimes, while enhancing data privacy practices; facilitating regulatory cooperation; and enabling greater accountability through the use of common principles, coordinated legal approaches, and accountability agents.


http://www.apec.org/Meeting-Papers/Ministerial-Statements/Annual/2011/2011_amm.aspx

Wither Enterprise Rental Car?

Enterprise Rental Car has consistently had high customer satisfaction scores but over time, these scores, for a variety of reasons, can and do come down. In the automotive space, for example, Toyota, which consistently ranked highly, has fallen off in recent years, eclipsed now by the Hyundai's of the world. Here,  ACE wins J.D. Power award for highest in customer satisfaction in rental car industry.

http://www.cnn.com/2011/11/15/travel/rental-car-satisfaction-study/index.html?hpt=hp_bn13

Freddie Mac Blacklists Mortgage Foreclosure Mill

I do not know anything about the firm in question other than they settled for $2 million with Federal and NY state governments concerning their questionable legal billings. There was apparently as well some inappropriate costumes during a Company Halloween party which mocked people who had been thrown out of their homes. Now, they are blacklisted by Freddie. Since this was probably their largest source of business (and now large banks will likely view them as damaged goods), my opinion is that they are about to unravel.

http://blogs.wsj.com/law/2011/11/15/freddie-blacklists-new-yorks-biggest-foreclosure-firm/

Monday, November 14, 2011

The Tip of the Iceberg: Greater Scrutiny of Law Schools Has Only Just Begun

I have previously blogged about Congressional inquiries into law school employment data/statistics. It looks like this movement is gaining even greater momentum.  See link immediately below. Stay tuned.

http://blogs.wsj.com/law/2011/11/14/congress-gives-law-schools-the-stink-eye/

In addition, new voices seem to crop up everywhere. One such new group (new, at least to me) is Law School Transparency, a Tennessee non-profit that is devoted to pushing out greater transparency and accurate information of law school graduate employment statistics.


http://www.lawschooltransparency.com/

Sacramento State Professor Cancels Class Because Student Failed to bring Snacks

I must say that I have never required (nor have I ever heard of any one else requiring) any student to bring snacks to class for "sharing" with the rest of the "group".  The entire notion is rather absurd, of course.  Due to strong a union and a "don't rock the boat" mentality of administrators, I doubt anything will come of this, though it is symptomatic of broader dysfunctions. On a lighter note, I have been wondering about one thing: What are the required snacks? Is there a requirement that they be "healthy" or have a "not to exceed" number of calories? I mean, what if some students brought, say, herring or kimchi, foods that some find, unpleasant or even offensive? Don't potato chips or Doritos impede one's ability to concentrate? Are there ever any perishable foods, if so how do the students ensure that they remain fresh? The article did not state if this was a morning, afternoon or evening class. If an evening class, I would imagine this could be a real issue for some students.

http://chronicle.com/blogs/ticker/sacramento-state-professor-leaves-class-because-no-one-brought-snacks/38068

Sunday, November 13, 2011

Paul Ryan's Speech at the Claremont Institute

A very compelling speech on the future of the American economy by Paul Ryan at the annual Churchill Dinner. Not surprisingly, many of Ryan's insights were spiced with several Churchillian wisdom and quotes. The bottom line is that to get things going again, we need to get government spending under control and hold the line on any sort of significant tax increases. As Ryan relayed:


"I actually wrote a letter to the non-partisan Congressional Budget Office asking them what kind of tax rates my kids and their generation would have to pay when they’re my age to finance the government’s current spending promises.
The CBO was quite clear: The bottom tax bracket, which is now 10 percent, would have to rise to 25 percent. The middle rate would have to rise to 63 percent. And the top rate, the rate many small businesses pay, would rise to 88 percent."


http://www.powerlineblog.com/archives/2011/11/the-man-who-will-be-president.php

Saturday, November 12, 2011

In Search of Greener Pastures: A Growing Number of Americans Moving Abroad

More Americans are moving abroad in search of better opportunities. This is a sad trend which must be reversed.

http://www.businessinsider.com/more-americans-moving-abroad-america-wave-2011-11

Friday, November 11, 2011

Japan's National Debt to hit 250% of GDP by 2015

Japan's downward economic spiral continues. It has been 20+ years of anemic or no/negative growth, increased public debt and an aging population. While the Yen continues to strengthen,  I don't see how this trend can be maintained.

http://www.japaneconomynews.com/2010/05/14/imf-on-japans-debt/

Should Lawyers Call themselves "Doctors"?

Well, strictly, speaking, since lawyers have Juris Doctor degrees they can legitimately and truthfully call themselves "doctors". Perhaps in much the same way a PhD in Philosophy, Chemistry, Chicano Studies, Education or Mechanical Engineering can call themselves "Doctors". My own view is that the only people who should be called "Doctors" are those individuals who can fix a broken leg, prescribe medications, conduct a surgical operation. No disrespect to PhD's and my J.D. brethren, but I always found references to these "non M.D." groups as "Doctors", while again, strictly speaking true, largely pompous and over-reaching. Here, there is an interesting piece from the Above the Law Blog.

http://abovethelaw.com/2011/11/any-lawyer-who-calls-himself-doctor-like-a-ph-d-should-get-punched-in-the-mouth/

Nabors Industries the subject of an SEC probe concerning executive perks

I have previously posted on the $100 million payout to the outgoing CEO of Nabors Industries, Ltd. and the possible challenges to it by shareholders under the business judgment rule doctrine.


Now the  the oil-drilling contractor is the subject of Securities and Exchange Commission investigation looking into perks received by its executives, including personal flights on company jets.

http://online.wsj.com/article/SB10001424052970204358004577030064034294178.html?mod=googlenews_wsj

Bernanke's Town Hall Meeting

So far as I know, having the head of the Federal Reserve conduct a town hall meeting, is unprecedented. Can you imagine Paul Volcker or Alan Greenspan leading a town hall?  Absolutely not, but then again these are very different times. Perhaps we are not far from the day when the Fed Chairman is a regular guest on Hardball or Hannity, or heaven forbid, Dr. Phil.

http://www.reuters.com/article/2011/11/10/us-usa-fed-bernanke-highlights-idUSTRE7A95HN20111110

Law School Graduates Who Do Not Become Lawyers

We have all heard it many times -- and probably uttered it a few times as well. The "it" is the following: "Law School is a great education, even if you don't end up practicing law."  The clear message being that law school is a worthwhile way to spend 3 years of one's life and incur (conservatively) costs in excess of $150,000 or even $200,000.  Quite appropriately,  many are now re-asseessing this conventional wisdom

http://legaltimes.typepad.com/lawschoolreview/2011/11/law-students-who-do-not-become-lawyers.html

Law Students Who Do Not Become Lawyers

We have all heard it many times -- and probably uttered it a few times as well. The "it" is the following: "Law School is a great education, even if you don't end up practicing law."  The clear message being that law school is a worthwhile way to spend 3 years of one's life and incur (conservatively) costs in excess of $150,000 or even $200,000.  Quite appropriately,  many are now are re-asseessing this conventional wisdom.

http://legaltimes.typepad.com/lawschoolreview/2011/11/law-students-who-do-not-become-lawyers.html

Wednesday, November 9, 2011

Grade Inflation, Liberal Arts vs. Science/Technology/Engineering Majors and Gaming for a Good Graduate School

Excellent posting in the Volokh Conspiracy, and as the late Howard Cosell, would say, "tells it like it is".

http://volokh.com/2011/11/09/reforming-higher-education-incentives-stem-majors-and-liberal-arts-majors-the-education-versus-credential-tradeoff/

FTC Settlement of Children's Online Privacy Protection Act ("COPPA") violations

The operator of www.skidekids.com, a website that advertises itself as the “Facebook and Myspace for Kids,” has agreed to settle Federal Trade Commission charges that he collected personally information from approximately 5,600 children without obtaining prior parental consent, in violation of the Commission’s Children’s Online Privacy Protection Act (“COPPA”) Rule. The FTC’s complaint also charges the operator, Jones O. Godwin, with making deceptive claims in Skid-e-kids’ privacy policy about the site’s information collection practices.

http://www.ftc.gov/opa/2011/11/skidekids.shtm

Pakistani Muslim Cab Drivers Save New York, Kosher Bagel Shop from Closure

A nice human interest story that puts things in perspective and should put a smile on most of our faces.

http://www.msnbc.msn.com/id/45165318/ns/us_news-life/?google_editors_picks=true#.TrrEis1drZi

Copyright Infringement Suit Brought by Ousted SpiderMan Director

Suit  filed by former Director in SDNY against the show’s production company, 8 Legged Productions LLC, claiming it is violating copyright law by using a modified version of her dialogue and stage directions.

http://blogs.wsj.com/law/2011/11/09/pow-ousted-spidey-director-files-copyright-lawsuit/

Greater Guidance in Foreign Corrupt Practices Act Compliance

It is always been a challenge to know what may or may not constitute FCPA liability. Perhaps now, greater guidance is on the way.
http://blogs.wsj.com/law/2011/11/08/new-fcpa-guidance-coming-right-up/

Tuesday, November 8, 2011

California State University Professors to Strike

While any pay increases are hard to justify, the one recommended by an independent committee was a meager 1.3% raise for faculty, which even that was rejected by the Cal State. In these tough times and with student fees up 263% since 1998, perhaps hard to justify. Yet, during that same period, the Chancellor's salary has increased 66% and other "executives" such as campus Presidents has gone up 77% (while faculty increases have only gone up 27% during that same period). As a benchmark comparison, the CPI has increased 43% during this same period. The Chancellor has made out pretty well, Faculty, not so well.

Full disclosure: I am a Faculty member at a Cal State. I am not sure what a strike will achieve but something is definitely out of whack on salary structures.

http://www.latimes.com/news/local/la-me-calstate-faculty-20111108,0,955527.story

Monday, November 7, 2011

Kodak Continues to Suck Wind: Sells its Image Sensor Business

Not much is left of this once iconic company -- and brand. Purportedly, Kodak's new business was going to focus a lot on IP licensing and "rights management", but maybe the Kodak patent portfolio isn't as robust as initially advertised and regardless it is absolutely the case that building a business around infringement claims is not a steady or reliable one.

I am sure that the rise and almost certain demise of Kodak will be case studied up and down across many a business schools for years to come. It is certainly "Exhibit A" for a lesson in the creative destruction of capitalism.

http://techcrunch.com/2011/11/07/short-on-cash-kodak-sells-its-sensor-business/

Sony v. Tenenbaum: Request for Rehearing

Attorneys for file sharer Joel Tenenbaum filed a petition for a rehearing in the First Circuit Court of Appeals.

http://www.billboard.biz/bbbiz/industry/legal-and-management/joel-tenenbaum-files-for-rehearing-of-675k-1005482952.story

Cutting Edge Perspectives on Privacy and Data Security

An excellent article in the Stanford Lawyer concerning recent trends in data security and privacy. Some of the highlights include:

* A summary of the the recent revelations about abuses by online marketers, which Stanford Law researchers helped expose. Jonathan 
Mayer, JD ’12, who is also pursuing a PhD in computer science, has received national attention for helping uncover the practices of behavioral advertisers—online marketing firms that track individual preferences, including Web-browsing history, in order to display more relevant ads. These companies have assembled deeper, more complete 
profiles of almost every Internet user than many are aware. “History stealing” is among the most troubling practices Mayer helped uncover. A major advertising network was surreptitiously snooping into whether visitors to its sites had previously visited any of tens of thousands different, unaffiliated websites. These included websites that advertisers might use to draw or confirm inferences about a visitor’s sensitive financial details, like whether the visitor owed back taxes to the Internal Revenue Service or had looked at Federal Trade Commission resources concerning debt collection. The company reportedly stopped the practice, in response to Mayer’s findings.
*  An emerging consensus that “Self-regulation has failed to provide any meaningful privacy protection.  “It’s a mystery to me when companies like Facebook profess a commitment to 
privacy, when their business is based on getting info about their users,” said one of the experts quoted.
* This gem of an insight from Professor Mark Lemley: “One of the lessons of Internet law is that if you regulate too early or in too technology-specific a manner, your regulations quickly become useless or subject to evasion,” which was premised on the faulty notion that no consumers would ever really buy things online, and the Digital Millennium Copyright Act, which was enacted just a year before peer-to-peer file sharing was introduced and proved utterly ineffective in protecting copyrighted works shared over such services. Lemley worries that privacy scares might lead Congress to overreach and act too quickly, stifling innovation and depriving the market of the chance to strike a proper balance between innovation and 
privacy. Indeed, one could argue that has happened already.
* Indiana Law School Professor Fred Cate's observation that basic privacy principles of "notice and choice" made sense in the earlier days of the internet, now are outgrown and dated by the massive increase in PII and data sharing across networks required to push data and to facilitate commerce.



http://stanfordlawyer.law.stanford.edu/2011/10/your-privacy-at-risk-2/

Making it Legal to Tweet For Investors

Excellent piece in the Wall Street Journal calling for an updating of Securities laws in light of changes resulting from social media.

http://online.wsj.com/article/SB10001424052970203804204577013820076053262.html

Will the Nook Rescue Barnes & Noble ?

Priced at $249 and already behind more popular products such the Kindle and the iconic i-pad, does anyone believe Barnes & Noble's Nook has any chance to survive?

http://money.cnn.com/2011/11/07/technology/nook_tablet/index.htm?source=cnn_bin&hpt=hp_bn5

Congressman Respond to Verizon Program regarding Targeted Advertisting

Congressmen Edward J. Markey (D-Mass.) and Joe Barton (R-Texas) released responses today to the inquiries they sent to the CEOs of Verizon and Verizon Wireless regarding a newly created program concerning targeted advertising of its customers. In recent Service Updates sent to Verizon and Verizon Wireless customers, the companies described their plan to use additional types of customer information to create business and marketing reports and tailor advertisements based on a customer’s geographic area. Verizon and Verizon Wireless also indicated they would share customer information with outside companies for their marketing reports, including information about which websites customers visit and the location of consumers’ devices. According to the new company policies, consumers would have to opt-out of these programs to be excluded from these practices.  Reps. Markey and Barton wrote to the companies to get further clarification on the program and ensure safeguards for consumer privacy

http://markey.house.gov/index.php?option=com_content&task=view&id=4584&Itemid=182

Debts of Defunct Law Firms

Saturday, November 5, 2011

Words of Wisdom from Steve Jobs


On innovation:

It comes down to trying to expose yourself to the best things that humans have done and then trying to bring those things into what you’re doing. Picasso had a saying. He said, “Good artists copy, great artists steal.” We have always been shameless about stealing great ideas. 

http://poetsandquants.com/2011/10/06/words-of-wisdom-steve-jobs/

California Courts: Pass Around the Donation Hat

Patrick Soon-Shiong bio-tech mogul and billionaire co-owner of the L.A. Lakers has offered to donate $20 million to the California courts to help develop a new computer system that already has cost the state hundreds of millions of dollars.  The state Judicial Council has agreed to consider the offer, as officials see the proposed donation from as a way to get the troubled project back on track. While this is a laudable contribution by Mr. Soon-Shiong, it is a pathetic statement on the lack of leadership and effectiveness of California's state and local governments. They should not have to rely on hand-outs from the private sector or other wealthy contributors to maintain and perform basic functions. Shame on them.  Is next on the list a $50 million contribution by David Geffen for the purchase of L.A. Fire Department Fire Trucks? 




http://www.foxnews.com/politics/2011/11/05/california-courts-consider-20m-donation-from-la-lakers-co-owner-for-computers/?test=latestnews

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