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Javier E

Revolution in Resale of Digital Books and Music - NYTimes.com - 0 views

www.nytimes.com/...f-digital-books-and-music.html

resale books music market digital Amazon

shared by Javier E on 08 Mar 13 - No Cached
  • In late January, Amazon received a patent to set up an exchange for all sorts of digital material. The retailer would presumably earn a commission on each transaction, and consumers would surely see lower prices.
  • the United States Patent and Trademark Office published Apple’s application for its own patent for a digital marketplace. Apple’s application outlines a system for allowing users to sell or give e-books, music, movies and software to each other by transferring files rather than reproducing them. Such a system would permit only one user to have a copy at any one time.
  • a New York court is poised to rule on whether a start-up that created a way for people to buy and sell iTunes songs is breaking copyright law. A victory for the company would mean that consumers would not need either Apple’s or Amazon’s exchange to resell their digital items.
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  • “The technology to allow the resale of digital goods is now in place, and it will cause a dramatic upheaval,
  • “The vast majority of e-books are not available in your public library,” said Brandon Butler, director of public policy initiatives for the Association of Research Libraries. “That’s pathetic.”
  • For over a century, the ability of consumers, secondhand bookstores and libraries to do whatever they wanted with a physical book has been enshrined in law. The crucial 1908 case involved a publisher that issued a novel with a warning that no one was allowed to sell it for less than $1. When Macy’s offered the book for 89 cents, the publisher sued. That led to a landmark Supreme Court ruling limiting the copyright owner’s control to the first sale. After that, it was a free market.
Javier E

Reselling E-Books and the One-Penny Problem - NYTimes.com - 0 views

pogue.blogs.nytimes.com/...ooks-and-the-one-penny-problem

resale digital media patent

shared by Javier E on 14 Mar 13 - No Cached
  • Both Apple’s patent and Amazon’s are incredibly broad. And they give the publisher and bookstore a lot of control over what would happen — including, possibly, providing for a cut of each resale.But what about the one-penny problem? These patents also give the publisher or bookstore the right to impose a minimum price for reselling an e-book. That limit could drop over time, as Apple’s patent makes clear: “As another example, all digital movies must be sold for a minimum of $10 until six months after their respective original purchase date. After the six month period, all digital movies must be sold for a minimum of $5.”Both proposals suggest that publishers could also limit the number of times a digital item can be resold: “A threshold may limit how many times a used digital object may be permissibly moved to another personalized data store, how many downloads (if any) may occur before transfer is restricted, etc.,” says Amazon’s patent. “These thresholds help to maintain scarcity of digital objects in the marketplace.”
Javier E

David Stockman: Mitt Romney and the Bain Drain - Newsweek and The Daily Beast - 1 views

www.thedailybeast.com/...romney-and-the-bain-drain.html

finance ROmney private equity LBO investment

shared by Javier E on 16 Oct 12 - No Cached
  • Is Romney really a job creator? Ronald Reagan’s budget director, David Stockman, takes a scalpel to the claims.
  • Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise.
  • Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign’s narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. The fact that Bain’s returns reputedly averaged more than 50 percent annually during this period is purportedly proof of the case
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  • Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better.
  • That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance.
  • So the vast outpouring of LBOs in recent decades has been the consequence of bad policy, not the product of capitalist enterprise. I know this from 17 years of experience doing leveraged buyouts at one of the pioneering private-equity houses, Blackstone, and then my own firm. I know the pitfalls of private equity. The whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. Occasionally, we did invest in genuine growth companies, but without cheap debt and deep tax subsidies, most deals would not make economic sense.
  • In truth, LBOs are capitalism’s natural undertakers—vulture investors who feed on failing businesses. Due to bad policy, however, they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1 percent.
  • Accordingly, Bain’s returns on the overwhelming bulk of the deals—67 out of 77—were actually lower than what a passive S&P 500 indexer would have earned even without the risk of leverage or paying all the private-equity fees. Investor profits amounted to a prosaic 0.7X the original investment on these deals and, based on its average five-year holding period, the annual return would have computed to about 12 percent—well below the 17 percent average return on the S&P in this period.
  • having a trader’s facility for knowing when to hold ’em and when to fold ’em has virtually nothing to do with rectifying the massive fiscal hemorrhage and debt-burdened private economy that are the real issues before the American electorate
  • Indeed, the next president’s overriding task is restoring national solvency—an undertaking that will involve immense societywide pain, sacrifice, and denial and that will therefore require “fairness” as a defining principle. And that’s why heralding Romney’s record at Bain is so completely perverse. The record is actually all about the utter unfairness of windfall riches obtained under our anti-free market regime of bubble finance.
  • When Romney opened the doors to Bain Capital in 1984, the S&P 500 stood at 160. By the time he answered the call to duty in Salt Lake City in early 1999, it had gone parabolic and reached 1270. This meant that had a modern Rip Van Winkle bought the S&P 500 index and held it through the 15 years in question, the annual return (with dividends) would have been a spectacular 17 percent. Bain did considerably better, of course, but the reason wasn’t business acumen.
  • The credentials that Romney proffers as evidence of his business acumen, in fact, mainly show that he hung around the basket during the greatest bull market in recorded history.
  • The Wall Street Journal examined 77 significant deals completed during that period based on fundraising documents from Bain, and the results are a perfect illustration of bull-market asymmetry. Overall, Bain generated an impressive $2.5 billion in investor gains on $1.1 billion in investments. But 10 of Bain’s deals accounted for 75 percent of the investor profits.
  • The secret was leverage, luck, inside baseball, and the peculiar asymmetrical dynamics of the leveraged gambling carried on by private-equity shops. LBO funds are invested as equity at the bottom of a company’s capital structure, which means that the lenders who provide 80 to 90 percent of the capital have no recourse to the private-equity sponsor if deals go bust. Accordingly, LBO funds can lose 1X (one times) their money on failed deals, but make 10X or even 50X on the occasional “home run.” During a period of rising markets, expanding valuation multiples, and abundant credit, the opportunity to “average up” the home runs with the 1X losses is considerable; it can generate a spectacular portfolio outcome.
  • By contrast, the 10 home runs generated profits of $1.8 billion on investments of only $250 million, yielding a spectacular return of 7X investment. Yet it is this handful of home runs that both make the Romney investment legend and also seal the indictment: they show that Bain Capital was a vehicle for leveraged speculation that was gifted immeasurably by the Greenspan bubble. It was a fortunate place where leverage got lucky, not a higher form of capitalist endeavor or training school for presidential aspirants.
  • The startling fact is that four of the 10 Bain Capital home runs ended up in bankruptcy, and for an obvious reason: Bain got its money out at the top of the Greenspan boom in the late 1990s and then these companies hit the wall during the 2000-02 downturn, weighed down by the massive load of debt Bain had bequeathed them. In fact, nearly $600 million, or one third of the profits earned by the home-run companies, had been extracted from the hide of these four eventual debt zombies.
  • The bankruptcy forced the closure of about 250—or 40 percent—of the company’s stores and the loss of about 5,000 jobs. Yet the moral of the Stage Stores saga is not simply that in this instance Bain Capital was a jobs destroyer, not a jobs creator. The larger point is that it is actually a tale of Wall Street speculators toying with Main Street properties in defiance of sound finance—an anti-Schumpeterian project that used state-subsidized debt to milk cash from stores that would not have otherwise survived on the free market.
  • Ironically, the businesses and jobs that Staples eliminated were the office-supply counterparts of the cracker-box stores selling shoes, shirts, and dresses that Bain kept on artificial life-support at Stage Stores Inc. At length, Wal-Mart eliminated these jobs and replaced them with back-of–the-store automation and front-end part-timers, as did Staples, which now has 40,000 part-time employees out of its approximate 90,000 total head count. The pointless exercise of counting jobs won and lost owing to these epochal shifts on the free market is obviously irrelevant to the job of being president, but the fact that Bain made $15 million from the winner and $175 million from the loser is evidence that it did not make a fortune all on its own. It had considerable help from the Easy Button at the Fed.
  • The lesson is that LBOs are just another legal (and risky) way for speculators to make money, but they are dangerous because when they fail, they leave needless economic disruption and job losses in their wake. That’s why LBOs would be rare in an honest free market—it’s only cheap debt, interest deductions, and ludicrously low capital-gains taxes that artifically fuel them.
  • The larger point is that Romney’s personal experience in the nation’s financial casinos is no mark against his character or competence. I’ve made money and lost it and know what it is like to be judged. But that experience doesn’t translate into answers on the great public issues before the nation, either. The Romney campaign’s feckless narrative that private equity generates real economic efficiency and societal wealth is dead wrong.
  • The Bain Capital investments here reviewed accounted for $1.4 billion or 60 percent of the fund’s profits over 15 years, by my calculations. Four of them ended in bankruptcy; one was an inside job and fast flip; one was essentially a massive M&A brokerage fee; and the seventh and largest gain—the Italian Job—amounted to a veritable freak of financial nature.
  • In short, this is a record about a dangerous form of leveraged gambling that has been enabled by the failed central banking and taxing policies of the state. That it should be offered as evidence that Mitt Romney is a deeply experienced capitalist entrepreneur and job creator is surely a testament to the financial deformations of our times.
Javier E

The Slow Death of the American Author - NYTimes.com - 0 views

www.nytimes.com/...th-of-the-american-author.html

writing books market copyright trends

shared by Javier E on 08 Apr 13 - No Cached
  • the global electronic marketplace is rapidly depleting authors’ income streams. It seems almost every player — publishers, search engines, libraries, pirates and even some scholars — is vying for position at authors’ expense.
  • Authors practice one of the few professions directly protected in the Constitution
  • a diverse literary culture, created by authors whose livelihoods, and thus independence, can’t be threatened, is essential to democracy.
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  • That culture is now at risk. The value of copyrights is being quickly depreciated, a crisis that hits hardest not best-selling authors like me, who have benefited from most of the recent changes in bookselling, but new and so-called midlist writers.
  • instead of using the savings to be more generous to authors, the six major publishing houses — five of which were sued last year by the Justice Department’s Antitrust Division for fixing e-book prices — all rigidly insist on clauses limiting e-book royalties to 25 percent of net receipts. That is roughly half of a traditional hardcover royalty.
  • search engines that point users to these rogue sites with no fear of legal consequence, thanks to a provision inserted into the 1998 copyright laws. A search for “Scott Turow free e-books” brought up 10 pirate sites out of the first 10 results on Yahoo, 8 of 8 on Bing and 6 of 10 on Google, with paid ads decorating the margins of all three pages.
  • writers whose works sell less robustly find their earnings declining because of the new rate, a process that will accelerate as the market pivots more toward digital.
  • For many academics today, their own copyrights hold little financial value because scholarly publishing has grown so unprofitable. The copyrights of other authors, by contrast, often inhibit scholars who want to quote freely from those works or use portions in class. Thus, under the cri de coeur that “information wants to be free,” some professors and others are calling for copyright to be curtailed or even abandoned. High-minded slogans aside, these academics are simply promoting their own careers over the livelihoods of other writers.
  • No one calls our public library system socialistic, though it involves free distribution of the goods authors produce, and even though in many Western nations, authors get a tiny fee when libraries lend their works.
  • Now many public libraries want to lend e-books, not simply to patrons who come in to download, but to anybody with a reading device, a library card and an Internet connection. In this new reality, the only incentive to buy, rather than borrow, an e-book is the fact that the lent copy vanishes after a couple of weeks.
  • An even more nightmarish version of the same problem emerged last month with the news that Amazon had a patent to resell e-books. Such a scheme will likely be ruled illegal. But if it is not, sales of new e-books will nose-dive, because an e-book, unlike a paper book, suffers no wear with each reading. Why would anyone ever buy a new book again? Consumers might save a dollar or two, but the big winner, as usual, would be Amazon. It would literally own the resale market and would shift enormous profits to itself from publishers as well as authors, who would lose the already meager share of the proceeds they receive on the sale of new e-books.
  • Last October, I visited Moscow and met with a group of authors who described the sad fate of writing as a livelihood in Russia. There is only a handful of publishers left, while e-publishing is savaged by instantaneous piracy that goes almost completely unpoliced. As a result, in the country of Tolstoy and Chekhov, few Russians, let alone Westerners, can name a contemporary Russian author whose work regularly affects the national conversation.
Javier E

The Death of the Fringe Suburb - NYTimes.com - 0 views

www.nytimes.com/...eath-of-the-fringe-suburb.html

suburb fringe housing US trends urban

shared by Javier E on 27 Nov 11 - Cached
  • In the late 1990s, high-end outer suburbs contained most of the expensive housing in the United States, as measured by price per square foot,
  • Today, the most expensive housing is in the high-density, pedestrian-friendly neighborhoods of the center city and inner suburbs.
  • Many boomers are now empty nesters and approaching retirement. Generally this means that they will downsize their housing in the near future. Boomers want to live in a walkable urban downtown, a suburban town center or a small town
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  • The millennials are just now beginning to emerge from the nest — at least those who can afford to live on their own. This coming-of-age cohort also favors urban downtowns and suburban town centers — for lifestyle reasons and the convenience of not having to own cars.
  • Many drivable-fringe house prices are now below replacement value, meaning the land under the house has no value and the sticks and bricks are worth less than they would cost to replace. This means there is no financial incentive to maintain the house; the next dollar invested will not be recouped upon resale. Many of these houses will be converted to rentals, which are rarely as well maintained as owner-occupied housing. Add the fact that the houses were built with cheap materials and methods to begin with, and you see why many fringe suburbs are turning into slums, with abandoned housing and rising crime.
  • The good news is that there is great pent-up demand for walkable, centrally located neighborhoods
  • The cities and inner-ring suburbs that will be the foundation of the recovery require significant investment at a time of government retrenchment. Bus and light-rail systems, bike lanes and pedestrian improvements — what traffic engineers dismissively call “alternative transportation” — are vital.
Javier E

The Rich Are Fighting the Superrich Over Britain's Manicured Lawns - The New York Times - 0 views

www.nytimes.com/...-britains-manicured-lawns.html

rich billionaire wealth London conflict

shared by Javier E on 25 Dec 15 - No Cached
  • Writ small, social researchers say, the tussle could foretell a future in which an ever-smaller upper crust will command financial heights far beyond the dreams of lesser mortals, even those who qualify, like many of the folks in Highgate, as pretty well off themselves.
  • These days, equality campaigners say, 80 immensely rich people have amassed the same wealth as the poorer half of the world’s entire population.
  • Among the most talked about is a 25-bedroom house called Witanhurst, said to be the second-biggest residential property in London, after Buckingham Palace, a vast pile with vistas over the 800-acre Hampstead Heath.
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  • According to news reports, the buyer paid some $75 million for it and resolved to spend the same again on enhancements, including basement excavations for features including a 70-foot swimming pool and a garage for 25 cars. Once the renovations are complete, the house will command a resale value of $450 million.
Javier E

Opinion | I Studied Five Countries' Health Care Systems. We Need to Get More Creative W... - 0 views

www.nytimes.com/...health-care-reform.html

health health care system comparative US international

shared by Javier E on 13 Jun 23 - No Cached
  • I’m convinced that the ability to get good, if not great, care in facilities that aren’t competing with one another is the main way that other countries obtain great outcomes for much less money. It also allows for more regulation and control to keep a lid on prices.
  • Because of government subsidies, most people spend less than 25 percent of their income on housing and can choose between buying new flats at highly subsidized prices or flats available for resale on an open market.
  • Other social determinants that matter include food security, access to education and even race. As part of New Zealand’s reforms, its Public Health Agency, which was established less than a year ago, specifically puts a “greater emphasis on equity and the wider determinants of health such as income, education and housing.” It also specifically seeks to address racism in health care, especially that which affects the Maori population.
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  • When I asked about Australia’s rather impressive health outcomes, he said that while “Australia’s mortality that is amenable to, or influenced by, the health care system specifically is good, it’s not fundamentally better than that seen in peer O.E.C.D. countries, the U.S. excepted. Rather, Australia’s public health, social policy and living standards are more responsible for outcomes.”
  • Addressing these issues in the United States would require significant investment, to the tune of hundreds of billions or even trillions of dollars a year. That seems impossible until you remember that we spent more than $4.4 trillion on health care in 2022. We just don’t think of social policies like housing, food and education as health care.
  • Other countries, on the other hand, recognize that these issues are just as important, if not more so, than hospitals, drugs and doctors. Our narrow view too often defines health care as what you get when you’re sick, not what you might need to remain well.
  • When other countries choose to spend less on their health care systems (and it is a choice), they take the money they save and invest it in programs that benefit their citizens by improving social determinants of health
  • In the United States, conversely, we argue that the much less resourced programs we already have need to be cut further. The recent debt limit compromise reduces discretionary spending and makes it harder for people to access government programs like food stamps.
  • When I asked experts in each of these countries what might improve the areas where they are deficient (for instance, the N.H.S. has been struggling quite a bit as of late), they all replied the same way: more money. Some of them lack the political will to allocate those funds. Others can’t make major investments without drawing from other priorities.
  • Singapore will need to spend more, it’s very unlikely to go above the 8 percent to 10 percent of G.D.P. that pretty much all developed countries have historically spent.
  • That is, all of them except the United States. We currently spend about 18 percent of G.D.P. on health care. That’s almost $12,000 per American. It’s about twice what other countries currently spend.
  • We cannot seem to do what other countries think is easy, while we’ve happily decided to do what other countries think is impossible.But this is also what gives me hope. We’ve already decided to spend the money; we just need to spend it better.
Javier E

Why America's Floors Turned Gray - The Atlantic - 0 views

www.theatlantic.com/...671447

housing house design culture

shared by Javier E on 16 Sep 22 - No Cached
  • you wrote, “Can I interest you in my grand unified theory of the U.S. housing market as explained by gray vinyl plank flooring and barn doors.” Tell us your theory.
  • Amanda Mull: These types of doors and flooring (basically, fake wood with gray finishes) are particularly popular among people who are redoing homes as investments, either house flippers or landlords.
  • Gray finishes are pretty cheap, and they have a big potential upside in the rental or resale market, because that’s what people see when they enter a home. And gray floors have not been popular at any point before the past 10 or so years, so if you as a renter or buyer walk into a home and see gray floors, you’re like, “Oh, somebody has just redone this place.” It gives it that feeling of newness.
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  • Isabel: How did the feeling of newness—even in a place that’s not actually new—become such an important part of interior design?
  • Amanda: Newness is really important in American consumer life, especially in the past 15 years. We’ve seen across consumer categories this emphasis on having the latest and greatest. Most people are familiar with this in the arena of fast fashion. The things you have feel disposable, because they cost very little on a per-piece basis, and there’s a constant barrage of new stuff available that’s also very inexpensive
  • ou get to the point where it feels like having something for a long time is a chump’s game.
  • In the housing space, the opposite has happened. We as a country have really slowed down in building new housing, and that has created price issues
  • Housing is very expensive, and what you get for your money is worsening. When homes are old, and the buying or renting public is used to newness, if you can create a sense of newness inside these older homes, you can charge more
  • that ends up being surface-level stuff that does not enhance the livability of the home and doesn’t even necessarily make it a more aesthetically pleasing space.
  • Amanda: What people are trying to do when they look at a place where they might live is just to figure out if it’s functional, and that can be difficult to evaluate on the surface level. So people tend to look around and think, Okay, well, the appliances are new, the floors are new, this stuff should hold for a while.
  • Because of the precarious position that a lot of people are in with housing in the U.S., and because of how hard it can be to get your offer accepted, you have this sense of scarcity. In those situations, some gray floors and a tile backsplash, and you’re like, Okay, somebody did something to this; let’s write an offer or apply before someone else sees it.
  • Isabel: You write that “all told, nearly a third of American house sales last year went to people who had no intention of living in them.” How is the current economic moment affecting the trend of house flipping?
  • Amanda: I don’t think it’s overstating it to say that gray floors are a physical manifestation of the economic realities of American life. For a lot of people, homeownership is a path to financial stability, and it’s the path that’s most common in America. Because housing is a good investment, a lot of people are interested in it who aren’t interested in living in those homes that they buy: Especially since the United States is not building a lot more housing, it’s a really attractive asset for institutional investors, property managers, and flippers. There are a lot of people dissatisfied with their careers and wages looking for something else to do that is cash positive.
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