Author: Serkadis

Yahoo Inc. has recently announced that it signed an agreement for the purchase of Citizen Sports, a company that delivers sports information to the social networking sites where fans are connected and to mobile devices through appealing applications. Yahoo! expects for the acquisition to translate into a more powerful social strategy of aggregat… (read more)

Sony’s resident PlayStation VP for lots of stuff, Kevin Butler, is at it again, this time in a video ad for their upcoming motion controller, PlayStation Move. Watch how he takes a jab at the Wiimote and

Reading the mainstream papers or watching the business news, one could be forgiven for thinking Australia has completely sidestepped the continued global depression, with our miracle economy continuing to perform divine acts. But while residential property continues its irrational bubble, for many Australians, the global financial crisis was very real – ask anyone who has owned shares in Babcock & Brown, Allco, MFS and a host of other collapsed enterprises.

Not only did investors and banks lose billions as Australia’s financial engineers crashed, but hundreds of other companies, including the once venerable Rio Tinto and Australia’s oldest property trust, GPT, desperately raised fresh capital from institutions at prices which would have been unthinkable a year earlier. The pain for retail (or ‘mum and dad’ shareholders) was compounded – not only did they suffer capital losses on their holdings and their dividends drastically reduced, but they were generally unable to participate in highly discounted capital raisings (the fruits of that were shares by a select few institutions).

Last year I spent several months working on what became Pigs at the Trough: Lessons from Australia’s Decade of Corporate Greed. The book covered various examples of corporate governance failings and executive greed, providing ‘lessons’ to help shareholders avoid being caught in the next, inevitable, downturn (which, as Bill Bonner continues to suggest, could happen sooner rather than later).

The biggest story to come out of the spate of Australian collapses is that there was no real story. The bankruptcies of MFS, Allco and Babcock in particular all bore a striking resemblance. All three companies considered themselves ‘asset originators’ – that is, their business was essentially buying stuff and selling it to what was usually a captive satellite fund. Aside from the obvious issue that buying and selling assets like toll roads, coal terminals, hotel chains or Irish telecommunication companies adds no net value to society as a whole, but also, their entire business models largely consisted of charging excessive fees to captive vehicles.

The entire arrangement was made all the more sordid by the fact that the agreements between the mothership and the various satellite companies were intentionally withheld from shareholders. This was all allowed by the ASX. Perhaps coincidentally, various ASX directors also sat on boards like Babcock & Brown (Michael Sharpe) and Brisconnections (Trevor Rowe).

In terms of sheer audacity, the collapse of Babcock & Brown is difficult to top. Led by former tax lawyer Phil Green, Babcock grew from a small leasing business based in San Francisco to a diversified investment bank which at its zenith, had more than $70 billion worth of assets under management. Babcock’s share price grew like a rocket in the late 1990s – rising from $5.00 when floated in 2004 to almost $35 in mid-2007 before the credit crunch took hold.

During that time Babcock’s leading executives, like their investment banking brethren across the globe, gorged from the trough of fees. In four years as a listed entity, Babcock paid its top dozen executives almost $300 million in cash alone, along with a couple of hundred million of (ultimately worthless) shares. The cash remuneration paid was of course – not refundable. Sadly for shareholders, neither were the billions of dollars of losses racked up by the bank through foolish real estate deals and the grossly over-priced purchase of the already highly-engineered Western Australian power company, Alinta.

But it wasn’t only the financial engineers which came crashing down as the market reassessed its tolerance of risk. The high-profile fall of Eddy Groves’ ABC Learning Centers was even more remarkable given the business earned around half of its revenue directly from taxpayers. While Eddy Groves never received a large salary, his company paid more than $100 million to his brother-in-law, Frank Zullo, for untendered maintenance works at ABC’s centres. ABC also paid Austock (the broking house which was partly owned by Groves) around $50 million in investment bank fees.

ABC surprised shareholders, banks and the Singapore Government when it announced that its fabulous business model wasn’t really that fabulous. In fact, the company’s $437 million loss in 2008 dwarfed all the alleged profits that the business ever made.

Then there were the somewhat more predictable collapses – the downfalls of the agribusiness twins – Timbercorp and Great Southern Plantations. Both companies were caught holding illiquid assets as they weren’t able to refinance debt to support their Ponzi schemes.

The biggest problem from Timbercorp and Great Southern was that while their schemes timber and horticulture schemes provided a tidy tax deduction for city folk, many of the schemes didn’t actually make any money. (In 2005 Great Southern admitted in the finest of fine print deep in its Annual Report that the company was funding its schemes after the company realised the woodchips it had harvested were worth less than the costs of planting and maintaining the trees). Great Southern told shareholders the bad news a couple of months after founder and managing director, John Young, sold $30 million worth of shares.

The common link across many of collapses?

Excessive use of debt coupled with almost universally poor governance practices and a remuneration structure geared toward short-term cash bonuses. Have we learned from the mistakes? If the real estate bubble and worldwide government indebtedness is any guide, it doesn’t look like it.

Adam Schwab
for The Daily Reckoning Australia

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We often see critics or industry folks make absolute statements like, “copyright infringement is stealing and it’s bad.” Of course, this is wrong for any number of reasons, but rather than jumping all the way to why such statements are obviously wrong and misleading, why not peel back that onion one layer at a time. Ross Pruden points us to an interesting blog post by Luci Temple, where she begins the process of questioning the assumptions around “piracy is bad.” It starts out with that premise (it’s bad!) and then starts asking questions:

Purchaser: This person has already paid for a legal copy of the film. Now, the Purchaser might want to do a number of things that are technically in breach of copyright:

a) Burn a copy of the dvd for personal use, so that their original copy won’t get scratched.
b) Create a digital copy for use on a portable MP4 player, media gate, or computer.
c) Lend the burned dvd to a friend for their personal use (their friend being a Previewer).
d) Lend the digital copy to a friend for personal use (which actually involves making another digital copy).

All these things are technically acts of “piracy,” however, are they all morally “wrong”? Is copyright law applicable to the mores of the digital age, or does it need to be updated?

She goes on to discuss “lending” to a friend, noting how it’s fine to lend a physical copy, but why not a digital copy? The thing is, the more you play this game, the more you’ll realize how many situations that are automatically lumped in with what’s considered “bad,” almost certainly aren’t “bad” in anyway at all.

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A lot of comparison’s been expected and made between the console versions of FFXIII. Now that the game’s out, a conclusion should be easily reached, right? Well, for those who did not buy both versions just so

Aired March 13, 2010 5:35 PM
By KNDU TV

Columbia Basin College students hosted a pancake breakfast this morning at Applebee’s in Kennewick to highlight the importance of proper dental hygiene.

Students dressed up in costumes ranging from the Tooth Fairy to dental floss and strutted their stuff as they passed out toothbrushes to children. In return, all funds raised will support student activities at CBC and the Dental Hygiene Patient Foundation.

Donations going to the patient fund will help those who are unemployed and uninsured find proper dental care.

Criterion Games’ Black originally released in 2007 for the PS2 garnered a lot of rave reviews. While such positive reception would have warranted an immediate Part 2, the devs are being prudent about it, much to the

Published March 17, 2010
By the Tri-City Herald staff

A Hanford contractor is donating $175,000 over five years to pay for student scholarships at Columbia Basin College in Pasco.

Mission Support Alliance, or MSA, which provides support services for the Hanford nuclear reservation, announced the donation this morning.

“Education is critical. It is the gateway to opportunity in this country,” said Frank Figueroa, MSA president and general manager. “By (making the donation) we feel like we’re doing our part.”

The bulk of the money — $100,000 — will be used to pay for scholarships for children and other dependents of MSA employees. Twenty scholarships in the amount of $1,000 will be awarded each year.

Another portion of the money will pay for a co-op program in which CBC students will be hired to work for MSA during the summer and school year. The students will gain valuable job experience, while at the same time the local workforce will be built up, Figueroa said.

MSA also is contributing $37,500 to the college’s general scholarship fund.

“CBC is pleased to work with MSA and receive these funds to develop a workforce for the future,” said Rich Cummins, the college’s president.

Additional news stories can be accessed online at the Tri-City Herald.

Check out the latest trailer of Rockstar Games’ highly anticipated sandbox-style action-adventure game, Red Dead Redemption. Titled “Life in the West”, the footage offers a sneak peek in to the story and the vast locations of the

There’s been something of a battle going on in the UK over news aggregators. Obviously, we’ve all heard about the various threats by companies like News Corp. in the US to sue Google over its Google News product, but a lot of this has already been playing out on a smaller scale in the UK. Last year we wrote about newspapers in the UK threatening aggregators like NewsNow, leading some to start blocking NewsNow crawlers. This is silly in the extreme. These aggregators offer links to the news. The “issue” with NewsNow is that it sells this as a service to companies — and the newspapers claim they deserve a cut. Note that NewsNow provides just a link and a headline and the tiniest of blurbs. It’s much less than even Google News provides. The newspapers seem to think that no one can profit from advertising their own stories unless they get a direct cut.

In fact, last year the NLA (Newspaper Licensing Association) in the UK decided to start charging all such services just for linking. This is, of course, ridiculous. One of the largest services of this type is called Meltwater News, and it decided to protest this ridiculous license on linking. It was joined in this effort by the Public Relations Consultants Association (PRCA), who noted that there is no copyright on headlines and links — and the NLA’s license amounted to an illegal tax. The NLA responded by saying that Meltwater and PRCA had no right to protest these licenses.

Earlier this week, however, the Copyright Tribunal in the UK ruled in favor of the PRCA and Meltwater in protesting these new licenses, and it ordered the NLA to pay the costs of both organizations. Now there will be a full trial concerning the legality of the licenses.

What’s interesting, however, is that hours after this decision came out, the Times Online in the UK just so happened to update its robots.txt file to block Meltwater (along with NewsNow, who had already been blocked). Basically, it was a quiet threat: if you don’t pay, we’ll block you.

The newspapers are walking a very thin line here. They’re trying to charge for the most basic element of the web: linking and sharing links with others. I would imagine that if they actually win this fight, they’re going to end up regretting it even more — because if they start linking to other sites themselves, how long will it take before those linked sites start demanding money back from the newspapers as well. It’s an incredibly short-sited view that a newspaper takes to think that others must pay you to promote you.

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This sleek and simple cat bed would be perfect for any moderncat looking for a spot to nap. Just came across it for the first time at The Conran Shop, regularly $135, on sale now for just $33.75!

Thanks to Dawn for the find.

There seems to be an issue with the post images not showing in emails. A few people have reported this problem recently. Please leave a comment if you are having the same issue. I found that I have to click the link at the top of the email that says “Display images” then I have to refresh the page and the images show. I’m not sure what is going on, but if I can get some more feedback from readers I may be able to figure out what’s causing it. Sorry about the inconvenience! I hope to have your Moderncat emails back to normal soon. Thanks!

Good news to all gamers who are still having issues on Heavy Rain. A SCEA representative has confirmed that a new patch for the PS3 exclusive title is already finished and is currently in the final stages

Okay, so we all know not everyone’s impressed by the highly-anticipated Final Fantasy XIII from Square Enix. Jumping aboard that bandwagon are BioWare bigwigs Ray Muyzka and Greg Zeschuk. In not so many words, they’re not rushing

Just as Davenport Lyons lawyers are being sent for disciplinary action over the firm’s practice of sending large numbers of “pay up or we sue” pre-settlement letters, ACS:Law, the shady firm that effectively spun out of Davenport Lyons to do the same thing is ramping up its efforts. This isn’t a huge surprise. Late last year, the firm said it was preparing to send out 30,000 letters, despite numerous studies showing that these letters regularly target innocent people, but scare many people into just paying to avoid a lawsuit.

The practice is being condemned widely. UK politicians have called it a scam. Even (believe it or not) the record labels are criticizing the practice, saying that it’s not productive (most of the firms that use ACS:Law/Davenport Lyons/DigiProtect tend to be porn studios and small software providers). The latest is that O2, the UK ISP is condemning these letters as being pure bullying for money.

What’s amusing is how ACS:Law tries to defend itself:

“Neither we nor our clients threaten or bully anyone. We send out letters of claim to account holders of internet connections where those internet connections have been identified as being utilised for illegal file-sharing of our clients’ copyrighted works…. Our letter makes an enquiry in that regard and invites the recipient of our letter to respond to this evidence. In addition they are invited to enter into a compromise to avoid litigation,”

This is disingenuous in almost every possible way. Sending a legal letter saying that you’ve been caught breaking the law, and likely will be taken to court (even though ACS:Law almost never seems to actually follow through on that threat), is absolutely a threat. And notice how he calls it “an enquiry,” which is again misleading. It’s an accusation, and a typical shakedown offer. It’s not a “compromise,” and it’s not an afterthought as presented in the quote above. It’s the key point of the letter, and the entirety of the business model put forth by the companies involved, who describe it as a way to “profit” from people sharing their content.

In responding to the fact that even the record labels (via BPI) have condemned these letters, the guy from ACS:Law responds with more ridiculousness:

“I think the BPI is letting its members down. I think they are scared of alienating their customers. My clients don’t have the same fear. They take the view that the people they target aren’t their customers because they are stealing from them.”

Of course, if they were “stealing” from his clients, then it’s a criminal, not a civil, matter, and as he must know, the proper response is to go to the police. Not demand they pay up via some sort of shakedown letter.

Finally, the guy from ACS:Law basically admits that he’s the one getting rich off of this, noting that he gets more money from this than the copyright holders:

“After my expenses the copyright owner is the largest single beneficiary.”

Nice little trick there with the “after my expenses.” This is a classic shakedown with a weak attempt at giving it legitimacy by using copyright law as a cover.

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IO Interactive and Square Enix Europe (formerly Eidos) has finally announced the release date of the latest installment of the Kane & Lynch franchise, Kane & Lynch 2: Dog Days. Along with the announcement, the devs has

Ron Paul teaches Ben Bernanke a lesson on Austrian free-market economics, but the Chairman is not listening. Instead, he tries to defend his actions by asserting that “central banking is an art” that requires guesswork.

Location: House Financial Service Committee
Date: 03/17/2010

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