Author Archives: pmarca

I am SO gonna miss this guy

From the Politico last week:

I caught [Fred] Thompson on Thursday at a restaurant in a strip shopping mall in West Columbia [South Carolina], where he did a live radio show with about 150 people watching.

His aides handed out “Fredzels,” which, as near as I could determine, are pretzels. Thompson maintained his folksy style.

“It’s good to be back in home territory where they know how to cook green beans!” he said.

Everybody cheered.

“And they are not crunchy!” he continued.

Everybody cheered again.

A television with the sound turned off was mounted on a wall and the radio interviewer pointed out that Ben Bernanke, chairman of the Federal Reserve Board, was testifying on Capitol Hill.

“You would probably say that the economy, perhaps, is the most important issue facing us?” the interviewer asked Thompson.

“Yeah, that’s right,” Thompson said, “but you know, you could probably get a ‘Law & Order’ rerun on TNT there if you wanted to switch that around a little bit.”

The audience applauded and cheered.

Now it’s getting fun…

Wall Street Journal:

Massive fraud by a rogue trader at Societe Generale SA has led to a €4.9 billion ($7.16 billion) [loss]…

[A single trader! $7.16 billion! Mmm hmMMmm…]

The bank, France’s second largest… revealed early Thursday that it had detected a case of “exceptional fraud” due to a single trader who had concealed enormous losses through a scheme of “elaborate fictitious transactions.”

The bank identified the trader as Jerome Kerviel. Mr. Kerviel, 31, joined Societe Generale in August 2000 and was working as a trader on the futures desk at the bank’s headquarter near Paris. He was in charge of futures hedging on European equity market indices, known as “plain vanilla” futures. The bank said he was able to dupe the bank’s own security system because he had inside knowledge of the control procedures gained from previous jobs with the bank [in the field of custodial work? Just guessing…].

Though Societe Generale says it first learned of what it termed “massive fraudulent directional positions” on Jan. 19, it waited until it could close out those trades before going public with the problem. Winding down the trades, the bank said, resulted in a €4.9 billion write-down, making it potentially the largest loss ever from an alleged rogue trader.

But that wasn’t the only bad news Societe Generale announced Thursday. It also said it was taking additional €2.05 billion write down in assets related to subprime exposure, and it would launch a capital increase of €5.5 billion in the “following weeks.”…

Mr. Bouton said SocGen had lodged a legal complaint against the trader who perpetrated the fraud, but the bank was unaware of his whereabouts. [Check the men’s room!]

[As usual, the ratings agencies are right on top of things…]

…Ratings agency Fitch downgraded Societe Generale’s long-term issuer default rating to AA- from AA following the news.

Oh, and you thought the world ISN’T coming to an end?

New York Times [!]:

The masseuse who discovered Heath Ledger’s body called Mary-Kate Olsen before calling 911, police said.

Yes, that makes perfect sense.

Addendum: sorry, that’s not the real story, this is:

The masseuse who discovered the body of Heath Ledger in a Manhattan apartment on Tuesday twice called a friend of his, the actress Mary-Kate Olsen, before calling 911…

Bill Clinton: ‘Screw It, I’m Running For President’

From The Onion:

CHARLESTON, SC—After spending two months accompanying his wife, Hillary, on the campaign trail, former president Bill Clinton announced Monday that he is joining the 2008 presidential race, saying he “could no longer resist the urge.”

“My fellow Americans, I am sick and tired of not being president,” said Clinton, introducing his wife at a “Hillary ’08” rally. “For seven agonizing years, I have sat idly by as others experienced the joys of campaigning, debating, and interacting with the people of this great nation, and I simply cannot take it anymore. I have to be president again. I have to…”

He continued, “It is with a great sense of relief that I say to all of you today, ‘Screw it. I’m in.'”

In a show of respect, Clinton then completed his introduction of Hillary Clinton, calling her a “wonderful wife and worthy political adversary,” and warmly shook her hand as she approached the podium. A clearly shocked Mrs. Clinton got halfway through her speech about the nation’s obligation to its children before walking briskly offstage…

Clinton told reporters Tuesday that seeing so many “Clinton ’08” posters “really got [him] thinking…”

Since his announcement two days ago, Clinton has raised a staggering $550 million. He has also surged in national polls, rising from a mere 2 percent prior to his candidacy to a commanding 94 percent, ahead of former front-runners Barack Obama and Hillary Clinton, who are now tied with 3 percent each…

Although some have pointed out that it is unconstitutional for Clinton to run for a third term in office, he has silenced most critics by urging voters “not to worry about the Constitution for now” and assuring them he will address those legal issues immediately after regaining control of the White House…

Clinton also noted that, if elected, the timing would be perfect for his family, as his wife has recently expressed a desire to move back to the D.C. area.

TV ratings and the writers’ strike

The Hollywood writer’s strike has added a lot of confusion to the big macro question of what’s happening to television ratings and viewership in general.

Overall TV viewership has been in decline for the last few years as the Internet increasingly takes over the world. The writers’ strike makes that decline harder to measure in the present because you expect viewership to decline anyway when there are no new episodes of popular shows on the air. In fact, I think the writers’ strike may be causing people to underestimate the intrinsic rate of decline of the television industry.

Here’s some interesting data from the New York Times:

As the writers’ strike approaches the three-month mark, it has conveyed new cachet, such as it is, on soap operas. Shows like “General Hospital” and “As the World Turns” have become virtually the only reliable option for viewers interested in watching rerun-free, serialized drama on broadcast television.

None of the eight daytime dramas on network television have gone into reruns, and none have plans to do so…

[The significance of this: because soap operas have continued to produce and air new episodes — albeit apparently with scab writers — you can compare last year’s viewership numbers to this year’s numbers without the strike completely clouding the issue. And so:]

Since the television season began in September, all eight network daytime dramas have lost viewers when compared with the same period a year ago. The biggest losses have been for “Days of Our Lives” (19 percent) and “All My Children” (14 percent), according to figures provided by Nielsen…

The word is that prime time TV viewership was also way down last fall, compared to the previous year, before the strike. In fact, some people say that’s one reason why the Hollywood media companies were so willing to let the writers go on strike — it gave them a chance to basically just write off a whole year of bad ratings and doomed shows.

Now, consider also that TV advertising revenue this year includes windfalls from the 2008 presidential election season and the 2008 Olympics.

Exactly how catastrophic 2009 will be for the TV industry — in terms of viewership and ad revenue — is an open question, and a very interesting one.

21st century global trade wars, Honduran cotton sock edition

Via Kids Prefer Cheese, we learn:

The [US government] today announced it has [decided] to… apply a textile safeguard measure [i.e., protectionist tariff] on cotton socks imported into the United States [from Honduras]…

“[The US government] reached this decision after careful consideration of all available information and comments submitted by all interested parties. [What’s that smell?] The substantial increases in imports of cotton socks from Honduras found during the investigation have led [us] to move forward with the safeguard [i.e. protectionist tariff] process…” said Deputy Assistant Secretary of Commerce Matt Priest…

[The US government] made a determination that a safeguard measure [i.e. protectionist tariff] is warranted with respect to imports of Honduran origin cotton socks based on the substantial growth in imports from Honduras. Imports of cotton socks from Honduras were 27.3 million dozen pairs through the first eleven months of 2007, an increase of 99% from the same period a year earlier. [The evil brown people are strategically swamping us with cotton socks!]

Based on the substantial level of imports of cotton socks, [the US government] determined that it will not, at this time, make a determination to apply a safeguard measure with respect to wool and man-made fiber socks. [The evil brown people are not yet strategically swamping us with wool and man-made fiber socks!]

Source: US government International Trade Administration.

The situation is grim for Fort Payne, Alabama, the “sock capital of the world”, saysNPR:

There’s no question that globalization has been really bad for the sock industry of Fort Payne, Ala. Just a few years ago, the town called itself the sock capital of the world, and with good reason: Most of the town worked in the sock business.

There were more than 150 sock factories, churning out a big chunk of the socks worn in the U.S. But lately, there has been a flood of cheaper socks coming in from China, Pakistan and Honduras. It has devastated Fort Payne. Two-thirds of the town’s sock mills have closed…

Jimmy Durham, the county economic development officer, shows just how grim things have been for the sock business here.

On street after street, he points to buildings that used to house sock mills, most of which are now gone.

Terrible, right? Well…

With all these businesses shuttered, you might think [county economic development officer] Durham is in despair about the future of Fort Payne. He isn’t.

Those closed sock factories are reopening as new businesses.

He points to Steadfast, which makes bridges; Ferguson, a major plumbing supply company; a distribution center for Children’s Place; two new metal tube manufacturers; a high-tech label maker. For a town of only 13,000 people, this is a lot of new, good-paying employment. These jobs pay more than sock-making jobs.

In fact, most of 4,000 recently laid-off sock workers quickly found new jobs…

Durham says there has been a high-tech revolution in Alabama. Mercedes-Benz, Toyota and Honda have all opened plants in the state. And that means a huge influx of parts suppliers. BAE Systems, a major U.K. aviation company, opened an engineering office in Alabama.

Durham says there are now more high-paying, high-skill jobs in the state than there are people qualified to take them…

The unemployment rate has stayed the same, even as the population has increased. In other words, the number of jobs has gone up, even as thousands of sock-making jobs have gone away.

So why on Earth would the US government put a protectionist tariff on Honduran socks now — particularly when Honduras is a fellow participant in CAFTA, the Central American Free Trade Agreement?

There’s only one reason: a deal President Bush struck late one night in July 2005.

That July night, Bush met with Fort Payne’s congressman, Robert Aderholt, to talk about tariffs and the sock business.

That meeting was, most likely, the moment Aderholt had more power than at any other time in his life. The House was voting on CAFTA, the Central America Free Trade Agreement. The vote was an exact tie. Aderholt was the holdout. And President Bush very much wanted CAFTA to pass. So, Aderholt offered the president a deal: He could get his big free-trade deal only if he rolled back free trade on one industry, the sock industry.

“I told him this was what I needed,” Aderholt said. “This was the one thing I had great concerns about.”

That night, President Bush agreed to Aderholt’s deal. CAFTA passed. And the White House gave itself a self-imposed deadline of Dec.19, 2007, to put back tariffs on sock exports from Honduras [which they missed by about a month].

Good thing Republicans are free-traders.

Wal-Mart nukes the magazine industry

The times, they are a-changing…

From the Silicon Alley Insider:

The world’s biggest retailer is pulling [the New Yorker] and more than 1,000 other [magazines] off its shelves. Some of these are small fry mags you’ve never heard of, but there are some big mass market titles here as well – notably the big three business mags: ForbesFortune,BusinessWeek.

No official word from Wal-Mart about the reasoning behind the move, but we don’t need one. Wal-Mart is ruthless about maximizing every inch of its floorspace, and it’s clearly decided that it’s only worth keeping a handful of magazine titles on its racks.

A delusional magazine industry type rationalizes to the NY Post‘s Keith Kelly that this could be good for the business, since it will reduce clutter and give the remaining magazines it sells more prominence. But make no mistake – this is a disaster for the magazine world, which depends on Wal-Mart for an estimated 20% of retail sales. [20%!!]

It is also a prelude to what’s about to happen to the music business, as Wal-Mart and the other big box retailers start to hack away at the retail space they devote to music. And it may also happen to Hollywood, which depends on the [big box retailers] for DVD sales.