Zillow Ad: Little Kids Sell

This girl is a star.

Is Obama attacking Fox News where it hurts?

Barack Obama has made a calculated move. During sweeps week–the most important week for television networks that will affect ad rates for an entire year–Obama will be holding an hour-long press conference. And he’s doing it to hurt Rupert Murdoch where it hurts: his pocketbook.

During the last primetime Presidential press-conference, broadcast nationally on 8 networks simultaneously, Fox’s broadcast garnered a paltry 4 million viewers. Compare that with the 13 million viewers that normally tune in to its popular Lie To Me during primetime–precisely when Obama’s press conference is scheduled for.

It’s a simple choice for Fox. 13 > 4: they should stick to their regular broadcast schedule, and snub the President’s broadcast. That’s exactly what they’ve said they’ll do. But other networks will reap the bounty of those four million viewers at Fox’s expense. Fox won’t put up viewership numbers anywhere close to what they expect because even a new episode of Lie To Me can’t compete with such an important Presidential address. Fox will be like a desert island, the only major broadcast network not broadcasting the President’s speech.

This may not be the last time Obama strikes at a media organization critical of him.

Fox won’t air Obama’s prime-time press conference – CNN Liberal News Network

Unfortunate Truncation

Putting a money-manager into a freezer seems like an odd regulatory response. What are they going to do next? Send Bernard Madoff to the North Pole in assless chaps?

Follow WSJ on Twitter (or me).

The Supply Chain.

Cameron: What are you doing, cupcake?
Budding Jeweler [feverishly browsing eBay search results]: I got some jewelry supplies on eBay for like, an amazing price, and now I can’t buy more–that b**** isn’t putting any more up for auction!
Cameron: Have you tried calling the seller and buying direct?
Budding Jeweler: Yeah, but she doesn’t return any of my calls–I NEED these f***ing beads*!
Cameron: Hmm. Perhaps you shouldn’t completely rely on eBay as your supply chain.

[*or something; unintelligible jewelry-talk]

Loaded .45

Daraun Prince: my portfolio is up today. Any thoughts about the [banking industry's] stress test [results being released] in two hours?

Sean Banerjee: Yeah.  Put a loaded .45 in your mouth and make sure I’m behind you, and pull the trigger.

Really bullish sentiment out there.

Phone Conversation

[...]
Jeff: I’ve got to go and read 130 pages on how to value Agency Federal Home Loan Securities.
Cameron: I envy you.

Unions, High Income-Tax Rates –> No Jobs

This Just in: High Taxes Plus High Unionization Correlates to Joblessness. Who would’ve thought!?

The latest Bureau of Labor Statistics numbers seem to indicate that:

3 of the 6 states with the HIGHEST unemployment (California, Oregon, and Rhode Island) have both high marginal income tax rates AND high union representation. Michigan has high unionization but moderate marginal income tax rates, and the Carolinas have high marginal income taxes, but low unionization rates.

Among the 6 states with the LOWEST jobless rates, 4 have low unionization rates and no state income tax or modest marginal rates and a fifth (Nebraska) has average income tax rates and low unionization. The exception is Iowa, which has average unionization rates (13%) and high marginal income taxes (8.98%).

Numbers don’t lie. Recessions seem to be worse on employment in states with high unionization and high income taxes because it is costlier for businesses to keep employees on the payroll when revenues slow their growth or fall. A lesson for Oregon, perhaps? (Oregon almost always leads the country in unemployment during recessions–look at their numbers in the early/mid 1970′s or 1982 and you’ll see what I’m talking about.)

Via Reason.

John Mayer and Twitter

John Mayer is popping-in to a music venue in Los Angeles tonight, and you’d only know this if you follow him on Twitter:

Getting my guitar playing together for a little pop-in tonight.

I don’t really care for his music, so I’m not getting any value out of it, but it serves as an example of how a celebrity can engage his fans, and how fans can extract value from an abstract tool like Twitter.

That’s innovation.

Recession?

According to the empirical economic indicators, we’re in recession.

However, that’s only relative to where we were: at the top of a bubble.

Our psychology needs to evolve, and fast. Our economy is not toast. It’s simply re-adjusting after a binge of excess. Confidence needs to come back toward reality.

Goods are still being traded. Services are still being bought. We’ve simply entered a sobering period of fiscal restraint, in which unrealistic outlays are out of vogue.

Downward readjustment may not be fun, but surely it’s setting the stage for prosperity, and it is not the death sentence of downward spiral that it seems.

So Litigious: Boycott E. & J. Gallo Winery

The Seattle Times reports that small ethnic foods retailer The Spanish Table has been sued by wine giant E. & J. Gallo Winery for selling imported Spanish pasta; a brand called Gallo.

First of all, there is NO confusion whatsoever between wine and pasta. Spanish Gallo and Italian Gallo are pronounced much differently: one set of double-’L's reads as ‘Y’, and the other, ‘L’, respectively. The two Gallo brands are in different segments and are not competing. Nobody’s brand/business is being hurt. E. & J. Gallo is attempting to abridge The Spanish Table’s freedom to do business. That they’ve gone ahead and filed suit against this small, family-owned retailer, is ridiculous.

I strongly recommend that the next time you purchase wine, that you make sure it’s not made by, imported by, or marketed by E. & J. Gallo Winery, including brands such as:

André®, Ballatore®, Barefoot®, Boone’s Farm®, Carlo Rossi®, E. & J. ® VS Brandy, Ecco Domani®, Gallo® Family Vineyard Estate, Livingston Cellars®, and Mirassou®.

A good, non-Gallo substitute for André is Cook’s. I’m really hoping my readers don’t drink Boone’s Farm (unless you’re 17, in which case, drink on). Carlo Rossi can be substituted with myriad boxed wines. Alternately, you can substitute with 3-buck-Chuck (Charles Shaw, available at all Trader Joe’s locations).

E. & J. Gallo crows “We’ll sue!” — The Spanish Table – The Seattle Times

Outsourcing

More American Workers Outsourcing Own Jobs Overseas

Got Paid

Today, I was paid in coffee for my services (and I’m very happy having received it). Is this a recession norm? Should I consider accepting other alternative forms of payment? Maybe we should all begin issuing barter scrip.

Goldmines

Google is sitting on top of a goldmine.

People go to Google when they’re searching for something. Google gives it to them. And they can charge (advertisers) for the privilege (of appearing next to the results).

Likewise, Craigslist gives people what they want. Job seekers and potential room-renters flock to Craigslist. Human resources executives might starve without it. With it, they thrive.

Google and Craigslist are sitting atop of goldmines.

Facebook, on the other hand, doesn’t serve a direct need, and is not sitting atop a goldmine. It serves the consumer something they only peripherally desire. It does not serve a market necessity, but rather a compliment.

A good way to understand this is that, prior to Facebook, humans relied on direct human interaction and the Yearbook to catalogue their contacts and classmates. They paid little for the privelege. Now, they can keep track of their workmates and family in the same sphere as their classmates and friends (by using Facebook). So why pay? They’re not searching for anything specific (as with Google/Craigslist). Commerce is not implicit in Facebook usage.

That’s why Facebook will never see the same level of monetization as Google/Craigslist/Ebay. Commerce is not implicit. Once humans are used to paying for their Rolodexes, Facebook and LinkedIn will thrive. It’s human behavior that has to change.

Madoff: Humanity’s Paramount

Psychologists wonder why people are endowed with the ability to learn the part of Hamlet or understand calculus when neither skill was of much use to mankind in the primitive conditions where his intellect was shaped. [...] The solution: we use our intellects not to solve practical problems but to outwit eachother. Deceiving people, detesting deceit, understanding people’s motives, manipulating people–these are what the intellect is used for.

Perhaps Bernard Madoff, as the glorious product of human evolution that he is, should be praised for having outwitted others to the tune of billions of dollars.

Tully’s Get’s a Lifeline, Death Sentence

Tully’s Coffee, a regional (Western USA) chain of coffeeshops based in Seattle, is a failure. Its CEO, Tom O’Keefe, has always pursued growth when he should’ve been pursuing profitability. Tullys’ has been unprofitable (operationally) every year since it was founded in 1992. Its retail expansion has been fueled by debt, which has often been provided by business partners — partnerships that eventually failed.

Recently, O’Keefe has pushed a deal to sell Tully’s only profitable operation, its wholesale coffee arm, for some $40 million in order to pay off their old business partner in Tully’s Asia, Mr. Ueshima, and give Tully’s extra cash to revitalize its retail business. If the deal doesn’t go through, O’Keefe says, Tully’s will go out of business, and investors will be left with nothing. Shareholders have voted, and, unsurprisingly, have gone along with Mr. O’Keefe’s plan to sell the wholesale business. They’ve robbed Peter (or rather, themselves) to pay Paul.

Though the deal benefits Tully’s cash position, it does nothing about the company’s real problem: its leader.

Tom O’Keefe has done anything in his power to maintain control over Tully’s. His leadership ensures that Tully’s will continue to throw away money toward growth in the future, and fail to pursue profitability today.

Tully’s is inevitably going to fail.

The only possibility the business had of continuing as a going concern was to reorganize in bankruptcy court. Bondholders would’ve come out the other side of reorganization as equity holders, leaving Mr. O’Keefe high and dry. Those bondholders could hire a new management team that would institutionalize profitability via cost-savings. A local employer would stay in business. Instead, power been consolidated by the dreamer, the man who couldn’t find sustainability if it was tattooed to his forehead.

Tully’s Coffee shareholders approve sale of wholesale business – Seattle Times