{"id":10596,"date":"2011-12-13T09:04:06","date_gmt":"2011-12-13T14:04:06","guid":{"rendered":"http:\/\/www.technologyinvestor.com\/?p=10596"},"modified":"2011-12-13T09:13:32","modified_gmt":"2011-12-13T14:13:32","slug":"the-king-of-the-declining-industries","status":"publish","type":"post","link":"https:\/\/www.technologyinvestor.com\/?p=10596","title":{"rendered":"The King of The Declining Industries."},"content":{"rendered":"

Risk management. Once I argued for an inviolate 15% stop loss. Investors Business Daily likes 8%. Some of my friends in the hedge fund business argue for 2%. I think narrow is now better. This market is genuinely awful. I bought XLF because Europe was saving the banks. But the next day, it was back to disasterland again. I sold for a miserable $80 profit (after commissions). I don’t like this short-term stuff. I’d prefer to buy and play tennis. But it no longer works that way. Better strategy seems to pretend to be The King of The Declining Industries<\/em> and short. stuff. I am short RIMM and DELL. And I’m eying more. Perhaps some of the ultra-high fliers, like Autozone (AZO). Perhaps T? See the next story.<\/p>\n

How AT&T fumbled its $39 billion bid forT-Mobile.<\/strong><\/span><\/p>\n

The phone call hit like a one-two punch.<\/p>\n

Days before Thanksgiving, AT&T’s heavyweight lobbying team was busy setting up meetings with antitrust authorities scrutinizing the company’s $39 billion acquisition of T-Mobile.<\/p>\n

Julius Genachowski, chairman of the Federal Communications Commission, was on the line for AT&T’s chief executive, Randall Stephenson, and its chief of lobbying, James Cicconi. In a few hours, Genachowski said, he would announce his opposition to the deal. AT&T was stunned.<\/p>\n

In a city overrun with lobbyists and corporate interests, AT&T is king of the heap – the bareknuckled brawler that spares no energy or expense to win any fight. Since 1998, the company has given more money in campaign contributions than any other firm in corporate America. It’s also one of the top 10 corporate spenders on lobbying, according to the Center for Responsive Politics.<\/p>\n

And it gets results. In the past 15 years, AT&T has successfully acquired a dozen firms and regularly wins its regulatory battles on Capitol Hill and at the FCC.<\/p>\n

Read the rest of the fascinating Washington Post article\u00a0 here.<\/strong><\/a><\/p>\n

The TV you should buy yourself for Christmas.<\/strong> It’s called the<\/span> <\/strong><\/span>Samsung UN60D8000 60-Inch 1080p 240 Hz 3D LED HDTV.
\n\"\"<\/a><\/p>\n

The picture is stunning. The price also —\u00a0 $2,747.50 from Amazon. That’s more than twice as expensive as other 60 inch sets. It also does 3D. If you do buy it, get the settings off the Amazon site.<\/p>\n

The cloud’s unreliability. <\/strong>A reader asked yesterday for more\u00a0 on my comments that the cloud was unreliable. Here are the two reasons it’s unreliable.<\/span>
\n<\/strong><\/span><\/p>\n

1. It relies on your Internet connection, which is inherently unreliable.
\n<\/span><\/p>\n

2. It relies on some smuck’s idea of “design” and “backup.” The cloud vendor has his own budget, which may or may not value your data as much as you do. The computer press has reported extensively on failures in the cloud.
\n<\/span><\/p>\n

That s<\/span><\/span>aid, the cloud can be a useful in three ways:<\/span><\/span><\/p>\n

1. To get access to computer and networking resources you can’t afford on your own. <\/span><\/span><\/p>\n

2. To move stuff around your various devices. Apple’s cloud does this.
\n<\/span><\/span><\/p>\n

3. To back up\u00a0 your precious work — so long as you have local backup as well, e.g. an Apricorn USB hard drive.<\/span>
\n<\/strong><\/span><\/p>\n

You credit card is hacked and stopped. Then nothing works.<\/strong><\/span><\/p>\n

Living By Default <\/strong>by James Surowiecki in theDecember 19, 2011 New Yorker.<\/p>\n

We normally say that a company “went bankrupt,” implying that it had no choice. But when, recently, American Airlines filed for bankruptcy, it did so deliberately. The airline had four billion dollars in the bank and could have kept paying its bills. But it has been losing money for a while, and its board decided that it was foolish to keep throwing good money after bad. Declaring bankruptcy will trim American’s debt load and allow it to break its union contracts, so that it can slim down and cut costs.<\/p>\n

American wasn’t stigmatized for the move. Instead, analysts hailed it as “very smart.” It is now generally accepted that when it’s economically irrational for a company to keep paying its debts it will try to renegotiate them or, failing that, default. For creditors, that’s just the price of business. But when it comes to another set of borrowers the norms are very different. The bursting of the housing bubble has left millions of homeowners across the country owing more than their homes are worth. In some areas, well over half of mortgages are underwater, many so deeply that people owe forty or fifty per cent more than the value of their homes. In other words, a good percentage of Americans are in much the same position as American Airlines: they can still pay their debts, but doing so is like setting a pile of money on fire every month.<\/p>\n

These people have no hope of ever making a return on their investment in their homes. So for many of them the rational solution would be a “strategic default”-walking away from the mortgage and letting the bank take the house. Yet the vast majority of underwater borrowers keep faithfully paying their mortgages; studies suggest that perhaps only a quarter of all foreclosures are strategic. Given how much housing prices have fallen, the question is why more people aren’t just walking away.<\/p>\n

Part of the answer is practical. Defaulting (even in so-called non-recourse states) is still a lot of trouble, and to most people it’s scary. In addition, homeowners are slow to recognize how much the value of their homes has dropped, and have inflated expectations of how much it will rise in the future. The biggest hurdle, though, is social: while companies get called “very smart” for restructuring their contracts, there’s a real stigma attached to defaulting on your mortgage. According to one study, eighty-one per cent of Americans think it’s immoral not to pay your mortgage when you can, and the idea of default is shaped by what Brent White, a law professor at the University of Arizona, calls a discourse of “shame, guilt, and fear.” When the housing bubble burst, the banking industry was terrified by the possibility that homeowners might walk away en masse, since that would have stuck lenders with large losses and a huge number of marked-down homes. So strategic default was portrayed as the act of dishonorable deadbeats. David Walker, of the Peterson Foundation, waxed nostalgic about debtors’ prisons, and John Courson, the head of the Mortgage Bankers Association, argued that defaulters were sending the wrong message “to their family and their kids and their friends.”<\/p>\n

Paying your debts is, as a rule, a good thing. But the double standard here is obvious and offensive. Homeowners are getting lambasted for doing what companies do on a regular basis. Walking away from real-estate obligations in particular is common in the corporate world, and real-estate developers are notorious for abandoning properties that no longer make economic sense. Sometimes the hypocrisy is staggering: last winter, the Mortgage Bankers Association-the very body whose president attacked defaulters for betraying their families and their communities-got its creditors to let it do a short sale of its headquarters, dumping it for thirty-four million dollars less than the value of the building’s mortgage.<\/p>\n

When it comes to debt, then, the corporate attitude is do as I say, not as I do. And, while homeowners are cautioned to think of more than the bottom line, banks, naturally, have done business in coldly rational terms. They could have helped keep people in their homes by writing down mortgages (the equivalent of the restructuring that American Airlines’ debt holders will now be confronting). And there are plenty of useful ideas out there for how banks could do this without taxpayer subsidies and without rewarding the irresponsible. For instance, Eric Posner and Luigi Zingales, of the University of Chicago, suggest that, in exchange for writing down mortgages in hard-hit areas, lenders would take an ownership stake in a house, getting a percentage of the capital gain when it was eventually sold. Lenders, though, have avoided such schemes and haven’t done mortgage modifications on any meaningful scale. It’s their right to act in their own interest, but it makes it awfully hard to take seriously complaints about homeowners’ lack of social responsibility.<\/p>\n

Of course, many borrowers made bad decisions and acted irresponsibly. But so did lenders-by handing out too much money and not requiring sensible down payments. So far, banks have been partially insulated from the consequences of those bad decisions, because Americans have been so obliging about paying off overinflated mortgages. Strategic defaults would help distribute the pain more evenly and, if they became more common, would force lenders to be more responsible in the future. It’s also possible that a wave of strategic defaults-a De-Occupy Your House movement-would get banks to take mortgage modification more seriously, which would be all for the better. The truth is that banks have been relying on homeowners to do the right thing. It might be time for homeowners to do the smart thing instead.<\/p>\n

Latest favorite New Yorker cartoons.<\/strong><\/span><\/p>\n

\"\"<\/a><\/strong><\/span><\/p>\n

\"\"<\/a><\/strong><\/span><\/p>\n

\"\"<\/a>
\n<\/strong><\/span><\/p>\n

\"\"<\/a>
\n<\/strong><\/div>\n

Harry Newton who suggests you don’t waste your money seeing George Clooney in The Descendants<\/em>. The movie has only one redeeming value — it’s easy to sleep through.<\/p>\n","protected":false},"excerpt":{"rendered":"

Risk management. Once I argued for an inviolate 15% stop loss. Investors Business Daily likes 8%. Some of my friends in the hedge fund business argue for 2%. I think narrow is now better. This market is genuinely awful. I bought XLF because Europe was saving the banks. But the next day, it was back […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-10596","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/10596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10596"}],"version-history":[{"count":0,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=\/wp\/v2\/posts\/10596\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.technologyinvestor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}