Time to short Rovio?

Angry Birds (yes, I know, I know) has just updated on my Android phone. Suddenly there are all these persistent icons, annoying as heck, trying to persuade me to part with cash for power-ups / instant level "solving". This follows a week of annoyingly repeated adverts extolling the virtues of owning a plush Angry Bird.

Looks to me as if Rovio is under pressure from the shareholders to "monetise the free users" in order to bring in income. Internet hype having proved less desirable than cold hard cash, my advice (do your own diligence) is to cash out now before Rovio's financial deficiencies become more obvious.

You can't buck the (housing) market

An instructive tail of wishful homeowner thinking in the Daily Mail:

Gilly Vines, 36, and her husband Richard planned to sell their two-bedroom flat in Exmouth, Devon, now they have two young children, and buy a house with a garden. But the flat wouldn't shift, so Mrs Vines applied for a let-to-buy mortgage, which allows homeowners to borrow for a new home while renting out their old property. Yet the valuation on their flat was £10,000 less than expected

(my emphasis). Umm, well, that doesn't seem terribly inconsistent. Flat is overpriced - flat won't sell. Flat is overpriced - flat valuation is less than asking price. One is led to the inexorable conclusion that their flat isn't worth as much as they thought.

Those readers with memories that reach past 2008 might enjoy the following complaint:

Halifax, Bank of Ireland, the Co-operative and Yorkshire and Clydesdale banks have all lifted their SVRs this year to between 3.99 and 4.95 pc. West Bromwich Building Society charges 5.84 pc — nearly 12 times the Bank of England base rate.

Oh noes! 5.84% interest! Whatever shall we do? I know, let's look at the 2007 typical variable mortgage rate, shall we? That looks like a solid 7.5% to me.

I'm not sure I'd go so far as the esteemed Mr. Wadsworth in claiming that the entire UK economy is being run for the benefit of homeowners, but it really does appear that the Daily Mail is trying to defend the home-owning indefensible here.

What's better than a white elephant?

A Golden Elephant! (number 38)

The Chinese investment vehicle known as "Golden Elephant No. 38" promises buyers a 7.2 percent return per year. That's more than double the rate offered on savings accounts nationally.
Absent from the product's prospectus is any indication of the asset underpinning Golden Elephant: a near-empty housing project in the rural town of Taihe, at the end of a dirt path amid rice fields in one of China's poorest provinces.

The Reuters report linked is a terrifying dive into the murky depths of the Chinese shadow investment economy, where the dreadful returns available from the regular banking system have resulted in all manner of high-risk high-alleged-return products springing up for the Chinese middle class to invest in.

This has been going on long enough that some of the problems are beginning to manifest:

China Credit Trust Co, one of the country's biggest trust companies, has disclosed that one of its wealth funds, Jinkai #1, is at risk of default because of money it lent to coal company Zhenfu energy Group. Zhenfu's boss has been arrested, amid reports he owed a total of 500 million yuan.

At least there are very real consequences for large-scale financial fraud in China, involving a brick wall, a wooden post, a blindfold and a last cigarette (perhaps the FSA might like to investigate this approach, though presumably the cigarette might be a problem in today's Prohibitionist society.) However, first the fraudster has to be caught and blamed, and presumably the smarter fraudsters are busy paying off the police and local Party officials to ensure that they waltz away and leave a suitable underling in the firing line.

The really terrifying bit is the short duration of the financing involved. When many products have maturities measured in months, once consumer confidence starts to shake the wheels are going to come off with uncomfortable speed:

"One of the key problems is that short-term financing is being used to pay for a long-term project," said May Yan, head of China bank research at Barclays in Hong Kong. "Infrastructure projects should be funded by long-term bonds. Unfortunately, China doesn't have that."

One of the reasons the UK hasn't suffered more in the current crisis than it might have done is that much of its debt was in relatively long-term (10+ year) bonds, allowing a lot of time to reorganise finances and austerise itself out of any hole in which it found itself. Chinese banks and state entities are spinning round and round, faster and faster, in an ever-tightening finance circle. When they reach the limit of what's possible, the resulting explosion is going to be ugly - and it's going to felt everywhere around the world where the Chinese are buying or investing.

Fortunately, we are assured there's no actual problem.

"On paper, these are not principal guaranteed but you don't have to worry about that," said a wealth manager at a local branch of Bank of Communications, China's No. 5 lender. "All our clients who've previously bought these products got their principal plus interest back."

Why am I thinking of Lloyds Names here? What could possibly go wrong?

[ Hat tip: The Streetwise Professor.]

Taking your job title too seriously

What would you expect Lloyds bank's Head of Fraud to do?

Jessica Harper abused her position at Lloyds Banking Group over a four-year period between 2007 and 2011.
The former head of fraud and security for online digital banking submitted false invoices to claim £2,463,750.88 before laundering part of the proceeds buying property for her family.

Oopsie. Bit of a black mark for whoever promoted her, then.

Strangely, the article is silent on any consequences for Lloyds management letting this lady roll in the trough for four years.

Sue Patten, head of the Crown Prosecution Service, Central Fraud Division, said: 'Jessica Harper has today been convicted of the type of crime the bank employed her to combat.
'The evidence in the case was clear and left Harper with little choice but to plead guilty. In doing so, she has admitted to a huge breach of trust against her former employer.

Wonder if Lloyds has ever heard of "Trust, but verify"?

Thirty years of The Hoff

A heart-warming interview in The Grauniad yesterday with star of 80's TV and the Spongebob Squarepants movie, David Hasselhoff:

For those of us who grew up on Knight Rider, Hasselhoff, 60, is and for ever will be the man with the backlit bouffant, leading us each Saturday night on a shadowy flight into the dangerous world of a man who does not exist.

The Hoff is 60? I can't believe it. We should skip lightly over the sun, sea, sand and suboptimal CPR of Baywatch (and pretend that "Baywatch Nights" never existed) but Hasselhoff's undoubted TV talent underpinned the success of Knight Rider, and he only occasionally got upstaged by his talking car.

Hoff has a very grown-up view of censorship, evidenced by his agent trying to talk him out of doing a number from The Producers:

I said, what the fuck are you talking about? This is from The Producers, one of the greatest musicals. We're mocking him. It's not a tribute to Hitler, it's a gay Hitler.

He also has a mature view of his fame, and the nature of 80's comebacks:

"... We went to [a Hasselhoff disco] in Hertfordshire and there were 1,200 people dressed up as me. They told me they loved me. And at first I thought, these guys are making fun of me. But they're not. They're really not." He says quietly. "They think it's retro and cool."

It's encouraging to see that someone who was not long ago headed for the rocks of the post-success career slide and alcohol has managed to turn it around - and in no small part because he has a sense of proportion about what he has achieved, and what it means to people today for both good and bad.

Theft and its consequences for poverty

The Christian Science Monitor writes on the recent India nationwide power blackouts and how they are likely the result of widespread power theft:

Theft of electricity is so pervasive in India that 15 to 30 percent of power is lost to illegal hookups, bill fraud, or nonpayment.

Ouch! That's well over 10x the estimated fraction of theft in the USA or UK; and because that stolen power is free, there's no price-limiting of behaviour in e.g. a heatwave where paying customers may be sparing in turning on the air conditioning because it costs them a lot. Pirating customers have no such restriction and can crank their air conditioners up to 11 without fear of consequence - other than total loss of electricity when the blackout hits...

This is a perfect example of a situation where a poor country is being kept poor:

The World Bank estimates that stealing from the grid reduces India's gross domestic product by 1.5 percent. Worst of all, few investors want to put money into building new power utilities with so many juice pirates. That leaves India with little hope of lifting its poor by expanding access to electricity.

The "moochers" so beloved by Ayn Rand are having a field day here; they actually do face consequences of their action (the nation remaining relatively under-developed and electricity supply being unreliable) but those costs are so dilute and abstract that they are completely submerged by the benefit of effectively free electricity. But you can understand why poor citizens do this; harder to forgive are the politicos who are involved:

One study in India's most populous state, Andhra Pradesh, discovered that losses in electricity were 3 percent higher during election years. Politicians were winning votes by allowing power theft. And in years when no known criminal was running for office, the utility's revenues rose 5 percent.

I like that "no known criminal" part.

The CS Monitor frames this as a morality and honesty problem, and it does fit the narrative quite well. In the end, though, it is in practice a problem for the government to solve - people aren't going to stop stealing power as long as stealing it is easy and there are no immediate consequences for the theft. Perhaps India can hold off building nukes and sending rockets into space, and instead start installing vaguely secure electricity meters and then increase its power generating capacity and robustness.

LOCOG do not want to sell Olympic tickets

At least, that is the only reasonable conclusion from the news that Ticketmaster blocks polling of the Olympics ticketing site:

[Adam Naisbitt] shared ticket information via Twitter and helped hundreds buy tickets to watch the games.
A London 2012 spokesman said its ticket agent blocked all computerised polling of the site to foil touts.

So Ticketmaster does not want people to discover what people are willing to pay for Olympics tickets (thereby maximising revenue for Locog, assuming they are on a high percentage?)

All that touts are doing is buying from primary ticket owners and reselling closer to the event time to those willing to pay more as they become more certain of their ability to attend the event. The current situation means that anyone who can't plan far ahead (e.g. because they need to arrange transport to London) cannot practically travel to London in anticipation of buying a ticket, because there's a very high chance that they cannot obtain tickets at literally any price.

If LOCOG had any balls (and a reasonably well-functioning ticketing system) they would tell Ticketmaster to take a hike and run an active secondary market in tickets, buying back tickets at (purchase price - X%, with X between 50 and 90 depending on event and time of return) and reselling them. That they are not doing this indicates to me that they don't give a crap about making a decent return on investment, preferring instead to chase some chimera of "equality of access". My arse. If you want equality of access, run a lottery and tell the House of Commons up-front that you're giving away a billion or two in potential revenue in return for "equality". And don't cry about the un-filled seats that result.

Not really intent on winning the argument

The next stage in the Great Chicken War of 2012 is planned to be a nation-wide gay kiss-in at Chick-fil-A restaurants. FFS.

The furore to date has landed Chick-fil-A with its biggest sales day ever as people lined up around the block to show support for the chain:

Chick-fil-A said it set a sales record Wednesday, but declined to release the numbers.
"We can confirm reports that it was a record-setting day," said Steve Robinson, the executive vice president of marketing.

So own goal number 1 for the Chick-fil-A opponents. Now some of them are planning for National Same Sex Kiss Day at Chick Fil A (which, if I read that event right, looks to be 8pm East Coast time today). How exactly do they expect this to turn out?

Given that Chick-fil-A is a franchise operation, it'll be up to each store's manager to determine what happens if public same-sex kissing starts. I foresee three possibilities:

1. No-one notices or really cares.
2. Kissing couples politely and/or firmly asked to leave (which the manager is entitled to do - their gaff, their rules).
3. Kissing couples told that if they want to stay and kiss then they have to buy at least a bargain bucket.

Presumably the kissers are hoping for 2. otherwise there's little point doing it. The smartest thing the managers could do would therefore be 1. or 3. Just a thought.

One of the less tasteful but amusing tweets on the subject from Iowahawk: hot chick-on-chick-on-chicken action ... Lesbians making out *and* chicken sandwiches? Is this heaven? with Blaise Miller following up acerbically: "Kissing in a restaurant in support of marriage rights? Married couples don't kiss in restaurants."

Capitalism working as intended

Company is stupid enough to bet its future on untested software. Company duly loses its entire market cap by buying high and selling low. Company, no doubt, gets bought out for peanuts and asset-stripped in short order.

Surely this is how things are supposed to work? According to CNN, it's the harbinger of doom:

At best, what we are getting in return is a market that is less stable. At worst, we are getting a system that is picking our pockets.

Sure, if by "our pockets" you mean "the pockets of Knight Capital Group's shareholders". And if so, they should consider this consequence a lesson in uneducated investment...

The French have a sense of humour

The creative development agency "Early Flicker" from Paris have registed a headless suited figure and the slogan "We are Anonymous, We do not forgive, We do not forget. Expect us." Understandably, the "real" Anonymous are somewhat miffed. Unusually for this situation, they are not loudly threatening court action, for some reason I can't quite fathom at the moment (ahem).

A cursory check indicates that ovh.net are hosting them, and they're being served off Apache 2.2 - I hope ovh.net's BOFHs have pre-girded their loins... Incidentally, if the eflicker.fr webmaster is reading this, your page also claims to be xhtml1-transitional which is a total lie.

I do like the sheer cheek of this, a creative agency arranging to make sweet cash out of Anonymous's images and slogans. The irony meter is pushing past 11.