Hashemian Blog

Pandora Starts Charging

2009-07-07T23:52:00.002-04:00

In case you don't know who or what Pandora is, it's a music Web site that learns about your taste as you tag or rate the songs it plays, so after a while it ends up playing mostly what you like.

Pandora's algorithm is decent but far from perfect and sometimes it tries to please too much by sticking to a tight list of songs, so there are the occasional repeats. But that's fine, since the best thing about Pandora is that it's free.

But we always knew the good times wouldn't last. Last year there were a couple of emails indicating that they were haggling with the music industry on licensing issues, basically over money.

Tonight came the email outlining the results of their negotiations. It was what I had expected. Users now get 40 free hours of listening every month. If they want more, they are charged $0.99 for the remainder of each month. Or they can pay $36/year for unlimited listening.

I guess for now I'll take the 40 hours and maybe go without for the remainder of every month. The $0.99 isn't such a bad deal either, but obviously it won't last either. My feeling is that after a couple of years Pandora will phase that out and just go to a flat-fee subscription service.

No, I don't like this at all, but I try to see it from the other side's perspective. The music industry is evil, but someone must pay all the people that make their living off music, from the artists down to the janitors who shine the studio floors. Pandora deserves to make some money too, as the radio stations do. But their advertising model just doesn't command the same earnings as radio. I guess radio stations have a more targeted and captive audience.

So for now the burden of keeping Pandora alive has fallen on the listeners' shoulders. I sure hope they make it through and don't go belly up. I've grown rather accustomed to listening to it while at work.

pandora,online music,music,music industry,riaa

Google Translate, Persian

2009-07-03T12:30:00.003-04:00

Google Translate has been around for some time. you paste in a block of text or a URL, set the source and target languages and off it goes, translating.

Aside from the omnipresent Spanish, German, and French translations, Google had been steadily adding other languages to its list, save one, Persian (known as Farsi in Persian language,) until now.

It's a well-known fact that Iranians are one of the most active Internet users in the world, certainly far and above the others in Middle East. That is more noteworthy given the censorship and restrictions by the government. I wonder what the activity level would be if people are given complete freedom of expression. Then again, it may just be the political situation that has given rise to the Internet-savvy generation who has been pushed into harnessing technology for its causes, but I digress.

It seems that the interest surrounding the post-election turmoil in Iran finally pushed Google into adding Persian to the list of their languages. They should have done it a long time ago, but better late than never.

The Persian translation page is in alpha mode (read, crude), but it's a good start. Being fluent in Persian, I tried the translator for a number of sites and text-passages, and I give it a barely passing grade translating to and from English. In most cases it was coherent enough to get the main concepts across. Of course, translation technologies as a whole still have a long way to go, and they may never reach human proficiency.

As an example, this Persian sentence:
با گوگل ترجمه فارسی در حال حاضر ، شما دیگر باید با دوستانم تماس فارسی تبلیغ خود را به دولت ایران را برای شما ترجمه :)

is translated from:
With Google translating Persian now, you no longer need to call your Persian friends to translate Iranian government propaganda for you :)

Not exactly a perfect translation.

Here's the Persian translation of this blog's home page.

google,translation,google translate,persian,farsi,iran,language translation

Amazon Vs. Internet Sales Tax

2009-06-30T22:05:00.002-04:00

As an Amazon Associate (you can see the banners even on this page), I have been following the spat between Amazon and the cash-strapped states that are legislating Internet sales taxes.

The states argue that Amazon Associates in their jurisdictions are tantamount to company branches constituting presence and therefore any sales made to their residents are subject to state sales taxes. Amazon counters that associates do not add up to physical presence and therefore it should not be required to collect sales taxes on behalf of those states.

To put its money where its mouth is, Amazon has terminated its relationship with affiliates in North Carolina, Rhode Island, and Hawaii and has vowed to do the same in other states where such laws are passed. California, for example, is one such state that Amazon could axe its associates if the state decides to go through with an online sales tax law.

Admitting bias in this debate, I think Amazon is right and the states are being short-sighted for something that doesn't amount to much money anyways. By pushing Amazon and others into terminating their resident associates, not only would they lose potential sales tax dollars, but they would financially harm their own residents who would most likely spend their earnings in their own states as well as pay income tax on their Amazon earnings.

Online affiliates should be considered nothing more than advertising vehicles. If a company places an advertising in a state's newspaper, that doesn't constitute presence. A Web page is just like any other publication, the only difference being that it's online.

There are other factors that complicate matters even more. What if the Web servers used by an associate are housed in a state different than the associate's residence? Suddenly that state may want a piece of the sales taxes too. What if an associate has a second home in another state where weekends are spent tweaking the Web site?

In the end, if many states succeed in passing Internet sales tax laws, Amazon will most likely pull the plug on its associates program completely. Or it may decide to only work with associates from a handful of states that are too lucrative to walk away from. That may be bad for Amazon, but it's even worse for those states that would in fact cut off their residents from a source of income, possibly forfeiting tax earnings to other states who may be wise enough not to pass such laws and, as the result, harm their residents and ultimately themselves in the process.

amazon,sales tax,income tax,internet sales tax,amazon affiliates,

Cell Phone Tax

2009-06-15T09:29:00.002-04:00

Saw this article the other day that makes one wonder how desperate the government must be. Seems like if you have a company-issued cell phone and you use it for anything personal, the value of that use should be reported as income to be taxed.

So guess if I'm in the office and scribble a personal note on a piece of paper, check email, get water from the cooler or coffee from the pot, or have lunch at my desk while surfing the Web, I should pay taxes on the value of all these.

I wonder if Google employees pay taxes on all the extra benefits they receive from the company, like free food and gym.

Anyways, I don't need to worry about the cell phone tax. I don't have a cell phone nor do I want one.

irs,income tax,cell phones

Google or Bing

2009-06-08T23:03:00.004-04:00

Microsoft is nothing if not persistent. Last week the company unveiled the latest incarnation of its search engine called Bing. I don't know, but this is probably the 5th iteration of the company's attempt to force itself onto the psyche of the net searchers.

You've got to give Microsoft credit for trying. Squeezed by the champion, Google, on one side and the runner-up, Yahoo, on the other, Microsoft keeps on trying and trying and trying. So far they have yet to chip away at the search market share in a meaningful way and this latest salvo, as far as I can tell, is far from impressive.

Bing looks sleek for sure but it's so obvious that the underlying engine is the same old algorithm as before. Adding a nice graphic and a bunch of bells and whistles is well and good, but winning converts is another story. To be fair, I tried Bing for a little while, only to slide right back into Google's arms. Don't blame me for being faithful to Google. You did it too. But it's not blind faith. Google still produces much more relevant results without the Web 2.0 trickery, and at the end of day the one that produces higher quality at the same price wins the eyeballs.

What really surprised me was when I plugged the terms "search engine" into Google. Google's own site was nowhere to be found in the results page. The top 3 results were AltaVista, Dogpile, and Ask.com. Does anyone really use these search engines anymore? Over on the right-hand side where Google displays sponsored ads, Bing was at the top of the list.

It appears that even Google is excited about Microsoft's new search engine, if only to charge them a premium for a top sponsorship spot. It's almost like Google is saying, "who, me worry?"

google,microsoft,bing,search engines,yahoo

Robocopy Slow on Windows Vista and Windows Server 2008

2009-06-05T00:20:00.003-04:00

A few years ago when I needed to synchronize large collection of files for a number of Windows Server 2003 hosts I stumbled upon a Windows Resource Kit utility named Robocopy. This is a great file synchronization tool with lots of switches that can quickly copy entire folders from one Windows host to another along with their NTFS data such as dates and security details, yielding exact duplicates.

There are a number of tools on the market that can do the job, but Robocopy is free, fast, and easy to use. I had a number of hosts auto-synchronized using Robocopy in scheduled tasks and they worked admirably without any hassles. It's one of those set-it-and-forget-it utilities that once configured, it doesn't need any further attention.

Apparently Robocopy was such a useful tool that Microsoft decided to bundle it with Windows Vista and Windows Server 2008. There's even a GUI interface for it for those less inclined to run it from a command prompt. The newer bundled version may have a few extra switches but is otherwise almost identical to the previous versions that were part of the Resource Kit. There's also one more difference that is perhaps less noticeable. It runs substantially slower that the past versions.

I discovered the performance issue today while doing a routine check on the scheduled tasks I had configured for our newer Windows Server 2008 hosts. It appeared that the Robocopy tasks I had set up on the new servers were taking considerably longer time to finish than comparable tasks configured on Windows Server 2003 hosts. The copy operations were still being performed flawlessly but the completion times were drastically longer, specially for servers with large numbers of folders and files.

I spent a number of hours investigating this issue on multiple servers. I took various measurements, tweaked networking parameters, and used various Robocopy switches and values, but no matter what I did the performance issue kept persisting.

The Solution
Out of options and with no solutions at hand, I made one final attempt that I hadn't thought of before. I copied an older version of Robocopy (a version that came with the Windows Server 2003 Resource Kit) to one of the Windows Server 2008 hosts and proceeded to synchronize folders using that version. To my amazement, the copy operation completed as fast as it used to do under Windows Server 2003. We're not talking a small improvement here. The job ran over 40 times faster than it had using the newer bundled copy of Robocopy. Incredulous, I tested this multiple times on multiple servers and the results were the same. The older version of Robocopy dramatically outperformed the newer version even when executed on Windows Server 2008.

There you have it. If you are not happy with the speed of Robocopy on Windows Vista or Windows Server 2008, give the older version, included with Windows Server 2003 Resource Kit, a try and see if it does the same for you as it did for me.

There are a couple of caveats here you should be aware of. First, I checked and rechecked my results quite extensively but I wouldn't claim that to be exhaustive. Do your own detailed verification before you let the old Robocopy loose on your hosts. Second, I ran the old version of Robocopy (a 32-bit image) on 64-bit Windows Server 2008 hosts and as mentioned, I had great results. But that version of Robocopy is not even supported on 64-bit Windows Server 2003, let alone Windows Server 2008. So I suppose there is a slight inherent risk of malfunction. For me, that risk is worth the performance gain, but your risk tolerance may be lower.

robocopy,windows,windows server,microsoft,windows resource kit,vista

The Morality Argument

2009-05-25T23:22:00.001-04:00

For centuries religion has used various natural events and objects as proof of god. The Sun, the rain, storms, plants, and the stars have been essential tools in justifying the existence of god. But as science has progressed and has been able to provide answers for many tangible matters, religion has shifted its argument to the metaphysical, mainly the question of morality. The crux of the argument is that without an originator, morality could not have come to existence. In other words there is a supernatural force that guides us towards being moral and ethical, and that force is god.

Indeed science is currently impotent to link morality with molecules and atoms, but one can argue that morality is the result of accumulated human experiences and a need for perfection. Centuries of human development has taught people that societies can better function based on certain rules and one can sum up such rules as morality.

If god is responsible for morality, why would he dictate such behavior only in the last few millennium? And why is it that the rules of morality differ so much is various societies today? Many indigenous people around the world walk around with no clothes on. Polygamy is still widely practiced around the world. Stoning and severing limbs or heads happens in many places for even minor offences. Some consider these immoral, while others do not. And if god is the origin for everything, shouldn't he be considered as the originator of immorality as well? Isn't he the creator of Satan after all? Isn't god directly responsible for death and destruction and natural disasters and famine and disease?

It seems hard to believe that without god moral people would suddenly turn into rampaging criminals, that they would abruptly turn into thieves, rapists, and murderers. I think most of us try to be good because generations of built-up experiences have taught us that civility gives much more favorable returns than chaos and anarchy.

If morality is pre-programmed by a supreme being with no alternatives, then what value can be placed on forced virtue? And what good is morality if only practiced out of fear? To quote Albert Einstein, "If people are good only because they fear punishment, and hope for reward, then we are a sorry lot indeed."

god,religion,morality

Portland-Vancouver Interstate Bridge

2009-05-14T22:22:00.003-04:00

A few weeks ago I was in Portland, Oregon visiting my uncle and I found one of greatest urban locations for running, the I-5 bridge connecting Portland to Vancouver, WA. The weather was the usual overcast and drizzly but the run was nothing short of exhilarating. The bridge spanning the Columbia river is actually two adjacent bridges, 3 lanes each with sidewalks on both. There was no way I could miss this opportunity and in the morning I was out running from Portland to Vancouver.

Half-way above the river is where Oregon ends and Washington state begins. The scenery is spectacular. After crossing the span, I hung a right and continued between the river on the right and the railroad tracks on the left. This is rather the industrial section of Vancouver. I almost lost track of distance and time as I continued farther away from the city. By the time I turned around I had already covered about 4 miles. Happily I was rewarded with the bridge-crossing once again on my return trip. With cars zooming by on one side and the wide body of water flowing underneath, it almost feels like the whipping wet wind could lift you up and hurl you into the river and that certainly makes the run even more exciting.

Being still high on the first run, I went for another one the next morning. This time, after crossing the bridge, I turned left and that got me into the center of Vancouver. This is a smaller city than Portland and has a nice small town feel to it. Judging by the traffic pattern, I got the feeling that most residents commute to Portland for their day jobs.

If you are ever in the Portland area, give the I-5 bridge a try, running, walking, strolling, whatever.

portland, oregon,vancouver, washington,oregon,washington,running

The Innocent Investor

2009-05-03T22:57:00.001-04:00

A while back I was reading about Bernie Madoff's adventures (fascinating story) and the smooth way he operated his giant Ponzi machine. The interesting part of the story was about how some of the damages will be recovered from other investors who were ostensibly lucky enough to withdraw their investments before the house of cards came crashing down.

I suppose if I had lost substantial assets with Madoff, I would want as much money recovered as possible, even if that meant forcing the early investors to forfeit their gains. While it may be true that those investors profited from ill-gotten gains, this presents one with an ethical and moral dilemma.

Suppose you were just an innocent investor in a seemingly legitimate plan and you had decided to take your profits and walk away. Why would you be responsible for future losses if the investment suddenly collapses? You had committed no crime here. You had followed the rules and had bought and sold the investments in good faith. You had taken the same risk as the others, but had the fortune of better timing.

This scenario plays out in the market all the time. Take the recent drop in the stock market. Many investors lost substantial amounts when their shares suddenly plummeted in value and they were forced to sell at ridiculously low prices. Then others stepped in and picked up those shares on the cheap and by now some of them have tripled or quadrupled their initial investments in a very short run. If they decide to sell their shares today and walk away with handsome profits, would they need to worry that the early sellers may come back and try to take away their profits? And if so, how much would they need to forfeit?

The early sellers may argue that abnormal conditions had caused the shares to plunge to artificially low levels and the current owners had profited from the panic and despair that had gripped the market. You may argue that in this case no fraud had taken place, but those "toxic assets" that led to the violent volatility weren't exactly proper either.

I have no problem with going after the swindlers and their cohorts, but for those who took the same risks as others and profited fair and square, there shouldn't be any negative consequences. Why go after the early investors instead of the regulators who were asleep while the fraud was being perpetrated? If every legitimate gain in the market is at the risk of being taken away, what incentive is there for people to invest in anything?

madoff,stock market,ponzi schemes

Internet Explorer 8

2009-04-29T23:02:00.003-04:00

Internet Explorer may still be the dominant browser on the Internet but its clout is nowhere near where it was a few years ago. Back in the early days of the browser wars when IE4 finally unseated Netscape to become the front-runner, it enjoyed immense popularity. I certainly was a devoted fan and used IE exclusively.

But then Firefox crashed the party and I saw the chance to defect once again to this new browser. Only this time it wasn't a complete defection. Today when I login to Windows XP (no Vista, thank you), the first browser I launch is IE6, followed immediately by Firefox3 and occasionally I add Chrome2 (Google's browser) to the mix. Depending on my mood and the sites I visit, I may pull up one site on one browser and the next site on another. It's a weird habit, but it serves me just fine.

When the time came to upgrade to IE7, I balked and stayed the course with IE6. Not so with the other browsers. Where I am open with upgrading the others (even to their latest betas), I have been resistant to upgrading IE. I suppose the innate fear of dealing with unwanted features and flaws has held me back.

Word has it that IE8 is a much better product than IE7, its predecessor. But when Windows Update alerted me with the IE8 upgrade screen, I once again passed on the opportunity. What I found interesting was the description accompanying this update:

Internet Explorer 8 is the latest version of the familiar Web browser that you are most comfortable using. Internet Explorer 8 helps you get everything that you want from the Web faster, easier, and more privately and securely than ever.

"Familiar Web browser that you are most comfortable using?" I don't think so. That's some presumptuous statement by Microsoft. Maybe for me IE6 is the end of the road with Internet Explorer. Quite possibly when I buy my next PC with Windows7 pre-installed, I'll be forced to use the latest version of Internet Explorer, be it IE8, IE9 or whatever they choose to call it then. Then again, I just may bid Internet Explorer farewell and make that complete defection to Firefox or Chrome or both.

browsers,internet explorer,firefox,chrome,microsoft,google,windows,netscape,web,internet

Oracle Buys Sun

2009-04-20T21:38:00.003-04:00

When today I heard the news of Oracle buying Sun Microsystems, my first thought was that I wished I had picked up some JAVA shares after the IBM deal had fallen through. It was just a matter of time before a suitor would snap it up.

My second thought was about its impact on the tech sector and the end users. For one, this puts Oracle in the hardware business with new competitors like IBM, HP, and Dell. It's possible though that Oracle would sell off or just kill that part of the business.

The more interesting situation is the future of Java, MySQL, and OpenOffice. My predictions are: Java will continue in its current form, free for users with a fee-based maintenance arm. MySQL will be absorbed into the big Oracle DB mother ship and will continue to be free of charge under a moniker like Oracle-Light or something similar. Again, there will be a fee-based maintenance plan for that. As for OpenOffice, Oracle will have its challenges with Microsoft and Google. It's probably steady-as-she-goes with regards to OpenOffice, at least for some time.

Oracle seems to have the right combination of fortune and skills to successfully absorb acquired companies into its collective. If the past is any indication, the Sun Micro acquisition will be yet another smooth sailing (pun intended). Of course the downside of this will the layoffs that follow such an event.

It’s a bit sad to bid farewell to Sun as an independent firm. This company has had such a huge impact on the tech sector in terms of innovation and the proliferation of the Internet. But considering the alternative (possible bankruptcy or a state of irrelevance), Oracle may be just the right company to keep Sun's legacy of innovation alive and even push it further.

oracle,sun microsystems,microsoft,google,java,mysql,openoffice

Facebook Backsliding

2009-04-06T12:01:00.003-04:00

Not being much of a social person, I've never had much interest in the social aspect of Facebook, but being naturally inquisitive, I have my own account there just to kick the tires, so to speak. I think the clean design and the API library were appealing at first. But shortly after, the novelty wore off and now I barely login anymore.

What I have also noticed with Facebook fans is that many have started to de-friend each other, the process of removing people from friends lists. I suppose it's the same with real life, friends and acquaintances come and go in one's life. The virtual world is probably no different.

But there are a couple of subtle differences with Facebook. Firstly, when people initially joined the network they added anyone and everyone they knew, some to reconnect, others to help raise their social status ranking. Since then many have realized that they don't want to openly share aspects of their lives with everyone. This brings me to the second difference. With Facebook, a person uniformly shares his/her private posts with everyone in their list. That's hardly similar to the real world where friends are given an unspoken and unquantifiable trust ranking and even that varies depending on the subject matter. Facebook can hardly mimic that level of complexity.

The end result is that many are now scrubbing their lists (much to the chagrin of those dumped unceremoniously) and have become more selective in allowing people in. That would surely lead to less traffic on the social network site. As for me, Facebook never was my cup of tea. Some old acquaintances are best left in the past, to be visited in memory or the pictures. For others, there's always email and telephone.

facebook,social networking

Your Favorite Pet Name

2009-03-25T22:52:00.002-04:00

A couple of years ago a few sites started collecting answers to a few personal questions. The idea was to strengthen security by integrating a few personal questions to the authentication process. It also would help unlock accounts in case users forgot their passwords. After all the questions were private enough that only the account owner would know the answers.

Nowadays it seems like every site is requesting personal and private information as a means of beefing up security. But I wonder if the security proposition is any longer valid.

You've seen these questions before:
- What is your mother's maiden name?
- What is your favorite pet name?
- What street did you grow up on?
- What was the name of your elementary school?
- What city were you born in?
- What was your first car model?

With so many sites storing so much personal information about you, is your privacy and security any longer assured? What guarantees do you really have that these responses will remain private and out of reach of prying eyes? Who knows what kinds of people have access to these responses. Are the responses encrypted? Are they shielded from the companies' personnel? Are they safe from hackers and snoops? Besides how secure can these responses be when so many people choose to reveal personal information on their blogs, forums, or Facebook accounts?

Most likely these responses are given less protection than login names and passwords as they are generally the second line of defense in authenticating users. Once site operators have access to these private responses, it won't be too difficult for one bad apple to use them to gain access to your other accounts. Some guesswork and social engineering is involved but since when that stopped determined account thieves.

Maybe I'm just too paranoid, but it seems to me that the enhanced security gained through personal responses is just an illusion and the convenience of password recovery is not worth the risk. In fact it may be worse than just the traditional login and password. At least you are not giving away personal details about your life to some faceless site. Nor will your accounts be compromised on the basis of a few answers which may be easily obtained on Google.

web security,hacking,authentication,passwords

Credit Ratings Knocks

2009-03-17T22:01:00.003-04:00

Years ago when I was a rookie employee at GE, fresh out of college, I was introduced to GE Interest Plus, offering a checking account with a competitive interest rate. I began saving my money there without realizing that this really wasn't a regular bank account. It wasn't their fault, the fact that they weren't a standard bank and therefore not FDIC-insured was clearly stated, it just took some time for me to realize that. By putting money in that account, I was really investing in GE's short-term debt and accepting a slight risk of loss.

There risk was not being FDIC-insured, but GE had top credit ratings from Moody's and S&P and that gave some assurance that the invested money wouldn't just vanish. GE Interest Plus's Web site proudly displayed their perfect credit rating.

Fast-forward a few years and it turns out that the credit-rating agencies really weren't adding much value. Many companies or investments that were deemed safe by these agencies either went bankrupt or had severe losses. The agencies may have sustained credibility damage but they still persist. What else is there?

Last Friday GE and Berkshire Hathaway had their credit ratings downgraded by a notch. They are still considered safe but not first-rate. GE Interest Plus updated their credit ratings statement to reflect the change and below is snapshots of their before and after ratings statements. Could be a while before GE's credit rating is back on top again.

ge,moody,s&p,credit ratings,fdic

Ponzi Sentencing

2009-03-12T23:37:00.001-04:00

I have to admit to a bit of sympathy for the convicted schemer, Bernie Madoff, when I saw his picture today (he pleaded guilty today). I suppose if I had lost my life's savings in his game, I wouldn't be so forgiving. There's probably something about sentencing frail old men or women that gives it an aura of cruelty, regardless of what these people were like at their height of power.

Even though Madoff and other white collar criminals spend their sentences in minimum security penitentiaries and don't face the harsh times experienced by violent criminals, the fact remains that they are locked up and taxpayers will have to foot the bills.

There must be a more humane way to mete out justice with less burden on the society. For example the government could seize all their assets, strap a monitoring device on them and give them a small monthly stipend and food stamps equivalent to what people on welfare receive and then let them loose.

That sort of punishment is a more humane way of treating white collar criminals and it's probably more cost effective than locking them up in some expensive institution. Their criminal records and their monitoring devices will keep them in check, while they get a taste of life as a part of the underprivileged class of people struggling to survive.

madoff,ponzi scheme,criminal justice,welfare

Circuit City Goodbye

2009-03-08T22:27:00.003-04:00

Last week, walking by a Circuit City store at lunch time, I noticed a few people out on the street holding liquidation signs. Tempted, I went inside the store and took a look around the near-empty and dark store with few remaining items collected in the front of store. There were slim pickings and but I left with a new Batman, The Dark Knight DVD and Saliva's Every Six Seconds CD for about $6.

I suppose getting these items at such a bargain price should have given me a good feeling but the truth is that the experience was a depressing one. Circuit City wasn't exactly the kind of store I would shop at but I remember the times when the stores were vibrant and thriving. There were lots of merchandise on the shelves with shoppers zigzagging the isles and talking to the many associates.

Today Circuit City shuttered its doors for the last time, joining the other bygone stores like CompUSA and Nobody Beats The Wiz. I couldn't help but feel a bit of guilt over the demise of this business, the throngs of people who have lost their jobs as a result, and the neighborhoods blighted by yet another failed store.

In a way the failure of Circuit City is emblematic of the ailing economy as a whole. Whatever satisfaction I might have felt for getting a bargain, quickly turned into an empty and hopeless feeling that the fabric of our economy is fast unraveling under the weight of the economic crisis. I realize that we can't wish the bad times away, but I don't want any more liquidation sales and bankruptcy-driven bargains. I want to walk into a store and see it buzzing with shoppers. Christmas and independence-day sales are just fine with me.

circuit city,bankruptcy,economy

GE Below Cisco

2009-03-02T22:15:00.002-05:00

Add this to the list of things you thought would never happen. GE's market capitalization of around $80B today is almost the same as those of Apple or Oracle. It’s less than those of Cisco or Google or IBM.

General Electric, the conglomerate blue-chip company that once was known as the most admired with the highest market cap in the world is now worth less than the specialized tech companies, much maligned after the tech bubble implosion of 2000.

Lest you think that such reversal of fortunes pleases me, consider that as an ex-GE employee with many shares of this company in my 401k, my retirement savings have dwindled to dismal levels. GE was a company that set the criteria by which all others were measured against.

Who would have guessed that the rules of long-term investing would turn upside-down in such a short time. One wonders if the time has come to discard everything we have learned for generations and draw up new rules.

There are those who believe that the fear-motivated market freefall is terribly overdone. That soon the market will come to its rational senses and will correct itself in a hurry. I also believe that at these levels we must be somewhere near the bottom searching for a footing to climb back out. But as I witness the daily spillage of red ink, the voice inside my head keeps repeating: something has gone horribly wrong with capitalism.

ge,general electric,market capitalization,stock market,capitalism

Housing Market

2009-02-28T14:33:00.002-05:00

The stock market is going through tough times. Look at your battered 401k statement, if you dare, and you'll know how bad things are. Yesterday the DJIA barely hovered above the 7,000 mark. That's a 12-year low and some are still calling for more, a lot more, pain ahead. Short positions are now firmly in command.

The housing market is having its own reversal of fortunes to grapple with. Some markets in California, Nevada, and Florida are just dumping properties as fast as they can find reluctant buyers. Others, such as the northeast, are less severly stricken for now, but trending downward nevertheless. There are a few obvious reasons behind this condition:

Banks are afraid. They are unable or unwilling to loan money to anyone but the cream of the crop of creditworthiness. That leaves many out of luck in securing a mortgage.

People are afraid. Many with investment properties just want to cut their losses and sell, therefore flooding the market.

High unemployment rates have caused many people to fall behind or stop making their mortgage payments causing many properties to be at or near foreclosure.

Buyers are waiting for better bargains. As far as the home prices have fallen, many believe there's still plenty more froth to be erased.

Money is scarce. People's investments have been decimated in the downturn, leaving little money or confidence to buy properties.

So what we have is a double-whammy of inflated supplies and shrinking demand and that's the basic pricing determinant for anything bought or sold.

Inherently, the housing market's response to economic conditions is slow. Unlike stocks, futures, or precious metals, it takes time to close the paperwork-heavy deals. But is it possible that the lagging housing market will also experience its own 12-year lows in the near future? If the stock and credit markets continue their deterioration, there's little else the housing market can do but to follow suit. And the bargain hunters keep waiting. Illogical and irrational as things may be, no segment of the market is completely insulated from the rest.

stock market,housing market,dow jones,recession

Berkshire Hathaway, Cheap Again?

2009-02-19T22:14:00.001-05:00

Back on Nov. 20, 2008 when the stock market was touching multi-year low points, Berkshire Hathaway (headed by the famed Warren Buffett) was touching its own low of $75,000/share. A number of notable sites/publications jumped to the defense of the stock, marveling at the opportunity of owning a share of this company at a bargain price.

This one from US News and its follow-up article couldn't hold back the excitement, even claiming that the BRK.A stock (based on some arbitrary metric) should really be valued at $136,000. Were they right or wrong?

Well, both. The share price did indeed shoot back up to about $108,000 within 3 weeks. That would have been a good spot to sell. From there it started to fizzle a bit every week and today it once again tested the Nov 2008 lows, some 3 months later.

At this point it's anyone's guess where it's headed. The fact is that BRK is invested in some of the same companies that are facing severe financial issues these days. If those companies are ailing, what justification is there for BRK to be healthy? BRK is not insulated from the global economic events that has gripped all industries. Nor is it attractively positioned to profit handsomely from economic hardships. As I have mentioned before, BRK also faces one other big risk and that is the age of its CEO, Warren Buffett. Admittedly that risk is most likely priced in, but one must still wonder, where would this company be without its star leader?

So considering everything, is BRK once again at a bargain price or is it over-priced? Only time will tell.

berkshire hathaway,brk,warren buffett,stock market

Darwin

2009-02-12T00:35:00.003-05:00

For all the flack Darwin gets from the creationist/intelligent design crowd, none has been able to put forth any credible evidence of a divine force running the show. Sure, they have their books and their myths and their Pascal wagers. They attack and vilify Darwin for having dared question his contemporary beliefs and engage in scientific experiments to understand the true nature of life.

Darwin and many like him have had the courage to challenge deep-rooted beliefs, no for the sake of defying them, but because of their unquenchable quest for knowledge and the truth. We should all salute them for opening their eyes and their minds and risking much in search of the real answers. No, we don't have all the answers, and we may never do. But where would we be without these noble people? Happy 200th, Charles Darwin.

darwin,evolution

Microsoft Office on Google Adsense

2009-01-30T22:23:00.003-05:00

Hard to believe but sometimes even fierce adversaries use each other's services to promote their own products.

I was a little incredulous when I saw the banner ad shown on the right on the homepage of this very site. It's from Microsoft advertising its Office 2007 suite on Google Adsense network. Who would have thought?

microsoft,google,adsense,microsoft office,banners

The APY Game

2009-01-26T22:10:00.002-05:00

It has been only a few days since I posted about the 4% savings account at Dollar Savings Direct. I characterized the rate as "unheard-of". Apparently the folks over at the bank agreed and over the weekend they lopped off 0.5% from the APY bringing the interest rate down to 3.5%.

You really can't blame them for lowering the rate. 4% was just way too high in the current low interest rate market. But that's how the game is played. You set a high rate on the account and advertise the devil out of it to attract enough money. Then you lower the rate to a reasonable level to keep existing customers from jumping ship while new money continues to arrive, albeit at a slower rate. And you keep adjusting the rate to keep the money flow steady.

Well, 3.5% APY is still a decent rate, but who knows where it'll stand next week, or the week after.

savings account,money market,interest rates,yield,apy

Obama

2009-01-20T23:38:00.001-05:00

Unlike some, I have no illusions about the fact that Obama is just one man against a wall of issues that have gripped this country, thanks in part to the careless and malicious way the previous administration ran its affairs.

The country is in the midst of two wars, fighting global terrorism, butting heads with the old enemy, Russia, and facing a devastating financial crisis with job losses, business failures, home foreclosures, and bankruptcies in huge numbers. Not to mention a long list of social issues like retirement programs, healthcare, affordable education, and transportation.

Obama is right when he says the problems are not easy to fix and will take hard work and patience. It may take generations.

For now, I salute him for having the courage and the fighting spirit to reach the Presidency. I also admire him for frequently mentioning non-believers (atheists and agnostics) in an inclusive way with people of other faiths.

No, he will not be a savior nor a miracle-worker. All we can hope for is that he is honest, smart, and diligent. And in the end even if he accomplishes nothing, that's still a relative positive compared to the way this country was (mis-)led previously.

obama,election,usa

High Interest Savings Account

2009-01-18T23:09:00.002-05:00

While the historic low interest rates are good news to consumers who need to borrow money (that is if they qualify in the tight credit market), they are bad news for those needing to hoard cash. You are lucky to find a CD, money market, or a savings account paying 2% interest these days.

But there are a few banks around that still offer decent rates on savings accounts. One such bank I recently ran into is DollarSavingsDirect, a division of Emigrant Bank. It has been offering an unheard of 4% APY on savings accounts. In comparison, its sister unit, EmigrantDirect currently offers 2.5% savings accounts with no minimums. DollarSavingsDirect requires a minimum $1,000 deposit, there is apparently no maximum amount, and the accounts are FDIC insured.

Based on what I have found so far, this is not a teaser rate and people have actually been earning that interest rate on their deposits for a few months. Of course the rate is always subject to change and it probably will fall if interest rates remain this low or go even lower.

That's the basic problem of chasing higher rates. By the time or shortly after your money lands in the account, the rate could slide below your previous bank and you are faced with the decision of moving your cash again. And since your money doesn't earn any interest while in transition (which could sometimes take a week) your effective rate could end up being lower than what you had expected.

With electronic deposits (Automated Clearing House or ACH) the best day to request a transfer is on a Monday of a holiday-free week. That way you run a lower risk of having your money held up over the weekend or a holiday and losing extra days of interest earnings, while awaiting the completion of the transfer.

Note: I receive no compensation from the banks mentioned in this post.

interest rates,savings accounts,yield,money market,ach,fdic

Lessons from Apple's Jobs

2009-01-14T23:31:00.003-05:00

The off again, on again, off again news about Steve Jobs has been sending the Apple stock on a roller-coaster ride for the past few months. Investors are nervous and that is clearly reflected in the volatility of the company shares. With tonight's news on Jobs' leave of absence, Apple has taken a dive in after-hours trading, down over 7%. No doubt more volatility will follow when it opens tomorrow.

This brings into question the degree by which the value of a company should be tied to one person. When Jobs retook the helm at Apple in 1997 he achieved the incredible feat of turning a moribund company into a behemoth. Few expected that kind of success, but the price has been that Apple's fortunes were forever tied to one person. Apple without Steve is like Seinfeld without Jerry, or the Honeymooners without Jackie, or Van Halen without Diamond Dave. Ok, the last one was a bad example, but you get the picture.

The point is that companies are supposed to thrive for a long time, but people's lifespan are just too short - we're all mortals. For a company to survive its founder or star leader, it must have a solid succession plan and skilled people who can navigate the ship long after the lone captain has left the deck. GE did it without Edison, AT&T did it without Bell, and Exxon did it without Rockefeller.

As for the bad examples, look at GE today. It has floundered since Jack Welch signed off, even with all the grooming for its current leader. Martha Stewart Living Omnimedia never recovered after Martha Stewart got into legal trouble and served jail time.

But Microsoft and Oracle have done a decent job of decoupling themselves from their leaders. These companies will probably be fine even after Gates and Ellison are gone. Yahoo has learned that lesson with Yang abdicating yesterday in favor of a new leader. Google has also done it right by not keeping its founders in the limelight all the time and allowing an outsider to lead the company.

I suppose the ultimate example of a company inexorably tied to its leader is Berkshire Hathaway. Warren Buffett is no doubt a genius who has transformed an unknown textile company into a $150 billion giant. But he is also 78 years old and investors must wonder about how much longer he can perform his magic. There is little question that at the first sign of his deterioration, the stock will sustain a heavy blow. Of course I hope that's a long way off. The market is a soulless beast, but I admire him for his thrift and his charitable trait.

apple,steve jobs,berkshire hathaway,warren buffett,stocks