The Silver Exchange Traded Fund (ETF) is out. So will be 97 million ounces of silver. Mind you the silver sill sit in a vault somewhere not being used for any production, just sitting there so traders can create products based on it's existence. Now that will create jobs, jobs with no productive usefulness whatsoever, that will nonetheless make some rich. Ah, the world of unbridled capitalism.
Be forewarned. As Silver becomes hoarded by ETF's and other investors while the price rises, the time comes when the storage of Silver will no longer be a profitable venture and it will get sold. Silver & Gold are worthless metals. They may have value in some industrial applications and people may like to buy them as a store of wealth, especially in the fast growing, corrupt, inefficient 2nd tier nations, but remember this: Intellectual property and information are worth much more and over time hoarding gold and silver will return to being what it is, a novelty collectable that is pretty but virtually worthless in developed societies.
Yep, go ahead and buy $100,000 of silver or gold. Now try to spend it. Try to move it from financial institution to financial institution on line. Now try to turn it into a currency so you can spend it. Well? If you are a doomsayer perhaps you think the entire global banking system is going to collapse and the only way you will be able to conserve your wealth is by owning some kind of precious metal. Fine for you. For the rest of us, don’t get sucked into the hype. This is a game played by people who make a living creating ways to soak up “real money” from anywhere on the planet they can and take as much of it as possible in the mean time and believe you me, these people are NOT hoarding silver, they are hoarding your money!
Notes on the affect the silver ETF’s will potentially have on the artificial demand for the metal:
By John Spence, MarketWatchLast Update: 5:02 PM ET Apr 28, 2006
The silver ETF has taken several twists and turns before it was finally approved by regulators.
The Silver Users Association, a nonprofit lobby group interested in keeping an orderly silver market, had led the opposition to the silver ETF. The group alleged the trust would take a large amount of silver off the market and push up prices, which would hurt firms that use the metal for business or industrial purposes and result in layoffs.
However, after a public comment period, the SEC said the silver ETF would increase the efficiency and transparency of the silver market, and that it would not spark liquidity problems.
Some traders are expecting the ETF may usher in a new bull market for silver if it attracts money from individuals, advisers, institutions and hedge funds looking for a convenient way to get exposure to the precious metal.
If the silver ETF experiences demand similar to the gold ETFs, it may end up accumulating roughly 97 million ounces, which represents more than 15% of known silver inventories, making a tight market even tighter, the newsletter added.
Sunday, April 30, 2006
Wednesday, April 26, 2006
A contango?
Ok, correct me if I am wrong. The US is awash in oil. Yea that is correct, the largest consumer of oil on the planet is literally running out of places to put oil. Now mind you this does NOT mean prices are going to drop any time soon. This is called the "contango" effect.
(Remember when the weather got all screwed up and suddenly there was this word "elnino" and you were like el what? Well this is another of those.)
See if there is no place to put any more oil it means traders are buying all the oil they can because they don't have faith in the future supply of oil. The fear over future supplies causes over buying (thus filling up storage tanks) and higher prices. Now for those of you in ECON 101 you may be confused. If there is more supply than demand and storage tanks are filling up and there is no where to put any more oil shouldn't prices FALL?
NO. See as we reach the estimated capacity of 370 million gallons of storage there will be no place to put the oil. Thus producers will cut back. When they cut back on production, the price will rise further.
Hello, you following this? Logic says, if the storage tanks are full, then the purchases of oil on the market will fall (ie; lower demand for crude) and this should result in a drop in oil prices, right?
NO. See the smart money says the US has not built enough storage tanks over the past 10 years so we really should be able to store more oil. See if we could store more oil then we could meet the higher future demand. By not storing more oil, traders are nervous that if there is a drop in supply from some big event like, Nigeria becomes part of a large global sink hole, then the storage capacity will not hold us through the crises. So they keep buying oil like a drunk that cannot get enough alcohol and rolling over the stock piles they currently have to the next month. Now what happens is the storage people start charging more to store the oil. That means it gets MORE expensive to store the oil and contracts to store the oil go up in price.
Get it now. It is not the lack of supply of oil on the market, it is the lack of storage capacity that is the culprit.
Mind you, all this comes from the psyche of the oil traders that there is going to be a crises. So lets recap:
- Oil demand is rising globally
- Oil traders start hoarding oil for fear of supply crunch
- Oil prices start to rise
- Oil traders buy even more oil
- Oil storage tanks become full
- Oil storage costs begin to rise
- Oil in storage becomes more expensive
- Investors jump in to finance the "rolling price of oil in and out of storage"
- Demand increases further
- Prices on the long end rise and higher prices become entrenched in the system.
What is the way out of this contango? Increase the refining output and capacity of Oil. See bringing on more refining capacity will bring additional supplies "product" to the market thus removing pressures on the storage capacity and this will result in lower prices.
Forget that the entire cycle was caused by "fear" of the oil traders of the immanent sink hole in Nigeria and that all this is a bunch of human psyche gone amuck, this is ECON 101 here and we all learn that Econ is a social "SCIENCE" right?
So next time someone tells you that the US is "awash in oil" to the point they are up to their "eyeballs" in the stuff and that is why the price is going through the roof, don't laugh.
Peace
Commodities predict future of Dollar?
I am still trying to come to grips with $70 oil and higher stock markets. I am thinking that what the commodities are doing right are reflecting the true value of the dollar but for some reason the currency markets are moving way behind the curve. In other words, commodity traders are pricing commodities to demand more dollars. They are already factoring in a large say 25-40% drop in the dollar.
So, strangely enough as the dollar falls, commodity prices will not continue to rise. The currency will be in effect catching up to the reality set in the market for commodities priced in dollars. The exception so far has been food commodities. I suspect they will move with the dollar since so much of the food produced and exported is from the US also. This is when the Fed will freak and boost long US interest rates higher till the long rate approaches 8-10%.
Just a thought.
This note from a professional in the brokerage industry in Scotland..
I am a bit perplexed myself about the level of the markets and the oil price. Thinking back a year or so, everyone was taking fright at oil being $50 and the impact it would have on company profits. A good example is British Airways, trading at a level not really seen since late 2001 and think what oil has done in that time.
I don’t think interest rates at 8-10% would be good news for equities but for now the greed factor seems to be winning the argument and pushing indices higher. A perverse world!
Regards,
So, strangely enough as the dollar falls, commodity prices will not continue to rise. The currency will be in effect catching up to the reality set in the market for commodities priced in dollars. The exception so far has been food commodities. I suspect they will move with the dollar since so much of the food produced and exported is from the US also. This is when the Fed will freak and boost long US interest rates higher till the long rate approaches 8-10%.
Just a thought.
This note from a professional in the brokerage industry in Scotland..
I am a bit perplexed myself about the level of the markets and the oil price. Thinking back a year or so, everyone was taking fright at oil being $50 and the impact it would have on company profits. A good example is British Airways, trading at a level not really seen since late 2001 and think what oil has done in that time.
I don’t think interest rates at 8-10% would be good news for equities but for now the greed factor seems to be winning the argument and pushing indices higher. A perverse world!
Regards,
Monday, April 24, 2006
Telecom Lock Down
Below is an article about locking consumers into communications services followed by my reply to the author then followed by her reply and my intermixed comments. Very important issue:
Apr. 18--When residents move into new homes in the Lexington development in Virginia Beach, they won't have to bother ordering telephone, cable television or high-speed Internet services.
It is already done for them.
Many developers now take it upon themselves to purchase a full package of telecommunications services on behalf of new owners. They're making the arrangements not only in condominiums and apartments, as they have for years, but also increasingly in new subdivisions and in newly built groups of single-family homes.
The developer typically gives a single telecom provider exclusive access to run its wires through the development, guaranteeing it sales to all those homes, in some cases locking up hundreds of customers at once. In exchange, the developer receives a discount on the regular price of the service package and collects the monthly cost of the services through condo or homeowner association fees or apartment rent.
It's unclear whether the deals ultimately save residents money. While customers gain convenience, they lose the ability to shop around and choose the provider or the services they want.
The inclusion of telecom packages is a growing trend in housing development, said Chris Bridge, a community relations consultant for L.M. Sandler and Sons Inc., a Virginia Beach company developing Lexington and other residential projects across Hampton Roads. Residents looking at new construction have come to expect and demand it, she said.
"It's a tremendous advantage for the homeowner to be able to benefit from economies of scale," Bridge said. "Also, it reflects the increasing trend of the technology itself to include the digital services" for phone, cable and Internet access.
Developers consider it one more amenity -- along with installed security systems, groomed landscaping and easy-to-maintain materials -- to appeal to potential buyers. They tout the convenience to the homeowner, the savings of time and trouble they would otherwise spend researching, ordering and setting up their services.
"You don't have to think about it. It's already here," Bridge said.
L.M. Sandler has a contract with Cox Communications Inc., the region's dominant local cable company, to provide telecom packages for 418 condos in Lexington, at Independence Boulevard and Plaza Trail South, and homes in the New Port at Victory development in Portsmouth. Residential projects in Suffolk offer similar packages from Charter Communications Inc., Bridge said.
The Cox package includes the "preferred" level of high-speed Internet access, Digital Deluxe cable TV and the Nationwide Connections digital phone plan with unlimited local and long distance calling and five calling features, plus voice mail. Residents pay the development company $145 a month for the services through condo association dues or homeowners fees. The regular retail rate for that same service bundle for Virginia Beach residents is about $160 a month, including estimated taxes and fees . That's about 9 percent more.
Roseland Property Co. has set up such telecom services for its apartment buildings since 2001, said Josh Katz, vice president of development and technology for the company, based in Short Hills, N.J. Roseland has taken advantage of telecom competition in recent years, which has made underdog providers hungrier for business and more willing to discount rates to score large groups of customers.
"We could use our buying power at a rate that was advantageous to our residents," Katz said.
Roseland bundles high-speed Internet access, satellite TV service and a security system into the rent for The Myrtles at Olde Towne apartments in Portsmouth. Myrtles tenants pay about $85 for the services, and residents in most Roseland properties see costs at about 60 to 70 percent of the amount they would usually pay, Katz said.
Residents don't necessarily receive the full discount that developers secure through the bulk purchase. Developers can mark up that discounted rate and collect the difference as revenue, but neither they nor the telecom providers that routinely enter the bulk deals would discuss pricing strategies.
"What they end up offering to their clients is up to them," said Thom Prevette, a spokesman for Cox at its local headquarters in Chesapeake.
Even with discounts, the bulk arrangements don't always represent the lowest cost for consumers. The Lexington plan, for instance, includes rental of a modem for Internet service for an additional $10 per month. Homeowners can buy a modem from Cox for about one-third of that annual rental cost and would spend less than that for a compatible modem from a major electronics store .
The prearranged deals also lock residents into a range of services they might not need or want and otherwise wouldn't have paid for, said Irene Leech, president of Virginia Citizens Consumer Council and an associate professor of consumer affairs at Virginia Tech.
"The problem is, when it isn't a good deal, the consumer has nowhere to go," she said.
Leech has heard several of her students complain about frequent problems with telecom services they receive as a package built into their apartment rent. Once they sign long-term contracts, property owners and telecom companies have little incentive to provide a fast response or to address complaints, she said.
"They're stuck with whoever it is, and they get horrible service," Leech said of her students.
Roseland includes customer service requirements in its contracts with telecom providers, Katz said. They specify the maximum time the provider has to respond to complaints, to leave a customer waiting on the phone and to fix a problem.
Despite initial rate reductions, a long-term contract could allow the telecom provider to raise prices later, while restricting resident s' options to shop around for better deals, said William Irby, director of the communications division of the State Corporation Commission. If competition develops in TV service -- as telephone giant Verizon Communications Inc. has planned with a new fiber-optic system to deliver video signals -- a consumer living under a pre arranged deal would have limited ability to take advantage of it.
That's one reason Roseland has never bulked services for condo owners, Katz said. "For people who are investing long term in a community, for us to lock them long term into a service seemed a little unfair," he said.
Some developers' deals give residents the option to buy services from another provider but usually require them to continue paying the fee to cover the pre-arranged package. Not only would a consumer have to want another service enough to pay on top of those built-in costs, but the alternative provider also would have to see enough financial benefit to justify the investment in wiring a whole building or group of buildings to serve a mere fraction of residents there.
" In most cases, it's not worth it for them to do that," Irby said.
Residents do have the ultimate option to decide against buying or leasing a home that comes bundled with telecom services they dislike. Developers, though, hope residents will see the value of having their services working on move-in day.
"What we're trying to sell them," Katz said, "is the convenience and the value of making that choice for them."
* Reach Carolyn Shapiro at (757) 446-2270 or carolyn.shapiro@pilotonline.com.
Comments to Author: Sent: Tuesday, April 18, 2006 3:04 PM
Hello Carolyn,
Your article, quoted below, exposes something that should be completely illegal the way you explain it. Communications are a personal issue, how much if any and who. The FCC has laws about allowing consumer choice in communications providers. I would guess the practice below is illegal. In addition, communications, be it traditional telephone, IP telephone, Internet access, cable or satellite TV are all very fast changing services and technologies. To lock any person in to a bundle of services with no flexibility in their ability to vary what services they choose is criminal.
What happened to the developer or property owner / manager installing or having installed by companies who offer but do not force use of their services? Having cable, Ethernet, fiber or other cabling or wireless services installed for the benefit of their tenants or owners giving them the choice to buy services (perhaps with discounts being given directly to customers as incentives for them to sign on) is the fair way to provide services to consumers.
Verizon, AT&T, Comcast and other major national communications companies are investing billions of dollars installing technology to the door of homes all over the country. They are not making this investment with a gun to the head of the consumer forcing them to take the service or move. This is what your developers are doing in your article and it is about their profit and the profit of the provider only. This is wrong, illegal and I am glad you have exposed this practice because it is time it be specifically stopped NOW.
Author reply to comments and my reply intermixed:
In a message dated 4/24/2006 2:01:26 P.M. Eastern Standard Time, Carolyn.Shapiro@pilotonline.com writes:
Dear Patrick,
Thank you very much for your interest in and comments on the article. I did look into the legality of this practice among developers and did many interviews about that. I found that regulators generally see nothing illegal about it on its face.
"on its face" is not acceptable. Forcing a citizen / consumer / tenant or whatever to use a pre-contracted provider is wrong. Anyone who cannot see this is obviously a blind 9-5 worker who never had to run a business or procure telecommunications services that sustain their living.
First, the developer that owns the property at the outset does indeed have a choice in telecommunications providers. Developers can consider multiple options from the providers that would like access to their properties, so they can take advantage of competition where it exists and to the extent it is required by regulation.
My Reply: The developer ownership of the property in this case is NOT the same as owning a coffee shop where the customer can go to the next coffee shop to purchase services or products. These are developers that own residential properties they then sell or lease to citizens with rights. Developers can and should shop for the best access deals from telecommunications providers, however this is NOT the same as saying the citizen (consumer) that buys or rents from that developer should be forced into that contract. Period. Each person has different needs. To force a person to buy a package of communications and Internet services they don't need or do not suite their needs is wrong. The developer is developing housing not communications products.
Second, to your point about telecom services being a personal decision and the unfairness of locking in a consumer to a single option, the buyer or renter of a home that comes with pre-arranged telecom service does have the choice not to buy or lease that property. Anyone who dislikes the prospect of being locked into one service can pick a different place to live, if it's an important issue to that individual.
My Reply: This is not an option. If this practice becomes wide spread people all over the country will begin to be forced to use services provisioned by the developer or manager or whatever entity is controlling access into the building. This is wrong and it should not matter if this is a multi tenant building or a single family neighborhood street, the freedom to choose communications services should not be controlled at the outset. Period. Saying the person can move or not live there is absolutely ludicrous. We are talking about an area that some people do not have that kind of choice or flexibility. Where you live is not like which coffee shop you go to. What happens if all developers wether it be single family or multi family begin this practice? What of discrimination between those who live in single family verses multi family residences? What of town homes? Where does this stop? Most of the developed world outside of the US lives in multi family properties. Would you allow this practice there?
My Reply: Communications in this age = Freedom. Period. AT&T, Verizon and other communications providers are starting to understand this and they have proposed some frightening technology limitations for the future on their networks. Access to information = Freedom. Period. Our media companies control 40% of the information broadcast in a given market and this is going to increase with cross ownership of newspapers. Communications via telephone, cable, fiber, satellite or what ever other technology comes along is the fabric of what will allow our citizenry to advance technologically and individually. To deny full access and choice is to cripple the nation's future.
Third, if any resident wanted to seek the services of a provider other than the one under contract with the developer, he or she is able to do so, and a company with a state license to provide telephone service in Virginia could demand access to the rights of way to that property. The question is whether that alternative provider would choose to take the steps and expense necessary to pursue its access to the rights of way, which could involve action in court, and to build its facilities in that development with the expectation of serving perhaps just a handful of customers. So while the customer has the right to go to a different provider and that provider might have the right to serve that customer, the provider also has the right to decline to serve that customer -- as long as the customer does have access to telephone service through the contracted provider.
My Reply: This statement sounds as if it were provided to you directly from the legal team of one of the RBOC's. You seem to forget, this practice of contracting out a deal with a communications provider is separate from the freedom to choose whether to accept those services or be forced to accept them. The issue you lay out above is moot when new technologies such as WiMax and Broadband Cellular services and Satellite communications are taken in consideration. There is no infrastructure required in the building for these services and to be forced to subscribe to a land based service or forced to use a wireless based service for that matter is wrong and short sighted. I think you are missing the point. The RBOC's (Regional Bell Operating Companies) and Cable companies are likely paying fat commissions to developers to "lock" in their tenants to legacy technology often at elevated prices. The consumer's rights are being squashed here. Period.
Fourth, state and federal regulation of telecommunications and requirements for competition generally are limited to telephone services. In that case, the regulation generally applies to the extent to which the dominant phone provider -- which in this area is Verizon Communications Inc. -- has allowed use of its infrastructure to competing companies that want to provide service. As long as competing providers have the ability to compete for access to a particular property, which the developer allows them at the outset, that complies with the rules in most cases. For other telecom services, such as television and Internet, state and federal regulators have few rules.
My Reply: Once again. Telecommunications services should not be locked in to the tenant period. Your point that the "developer allows them at the outset" once again misses the point. The "developer allows the provider". Where is the consumer choice in this formula?
As far as your question about a home being wired for service but the resident not being forced to accept those services, I learned from my reporting that developers generally require residents to pay for the services because the developer has already promised to pay the telecom provider for service to each of those homes. The developers make this promise to gain, in exchange, a discounted bulk rate that they could pass on as a benefit to residents. Whether or not the residents see this as a worthwhile benefit depends on their points of view.
My Reply: When you say "you have learned" I am afraid you have learned right from the mouthpieces of the corporate entities (developers and providers) who stand to benefit directly by force feeding the consumer, citizen, tenant, owner a technology bundle at high cost (regardless if the bundle is a few % lower than purchased separately) they may not need, want or may need or choose otherwise.
I hope this provides some clarification for you. I do understand your points on this subject, and you certainly are entitled to your perspective. Feel free to get in touch with me if you have any other comments or questions.
My Reply: I am extremely disturbed by your inability to comprehend the possibility that citizens / consumers are guaranteed rights in this country and what the developers and providers are doing in this case is plain wrong. Your reply sounds as if it was written by the developers and providers. This is the biggest problem facing America right now. Even people in the media have forgotten that the US is a country of Citizens NOT just corporate entities. Our government has forgotten this for years now. Your writing and reply are evidence that as a member of the media, you represent your institution and your presentation of information above has demonstrated your institution's lost touch with this idea.
I do want to thank you for reporting the story in the first place. For even thought you know not what harm this kind of action would cause, your lack of understanding of the issue and it's impact may be the thing that allowed the story to be printed in the first place.
Apr. 18--When residents move into new homes in the Lexington development in Virginia Beach, they won't have to bother ordering telephone, cable television or high-speed Internet services.
It is already done for them.
Many developers now take it upon themselves to purchase a full package of telecommunications services on behalf of new owners. They're making the arrangements not only in condominiums and apartments, as they have for years, but also increasingly in new subdivisions and in newly built groups of single-family homes.
The developer typically gives a single telecom provider exclusive access to run its wires through the development, guaranteeing it sales to all those homes, in some cases locking up hundreds of customers at once. In exchange, the developer receives a discount on the regular price of the service package and collects the monthly cost of the services through condo or homeowner association fees or apartment rent.
It's unclear whether the deals ultimately save residents money. While customers gain convenience, they lose the ability to shop around and choose the provider or the services they want.
The inclusion of telecom packages is a growing trend in housing development, said Chris Bridge, a community relations consultant for L.M. Sandler and Sons Inc., a Virginia Beach company developing Lexington and other residential projects across Hampton Roads. Residents looking at new construction have come to expect and demand it, she said.
"It's a tremendous advantage for the homeowner to be able to benefit from economies of scale," Bridge said. "Also, it reflects the increasing trend of the technology itself to include the digital services" for phone, cable and Internet access.
Developers consider it one more amenity -- along with installed security systems, groomed landscaping and easy-to-maintain materials -- to appeal to potential buyers. They tout the convenience to the homeowner, the savings of time and trouble they would otherwise spend researching, ordering and setting up their services.
"You don't have to think about it. It's already here," Bridge said.
L.M. Sandler has a contract with Cox Communications Inc., the region's dominant local cable company, to provide telecom packages for 418 condos in Lexington, at Independence Boulevard and Plaza Trail South, and homes in the New Port at Victory development in Portsmouth. Residential projects in Suffolk offer similar packages from Charter Communications Inc., Bridge said.
The Cox package includes the "preferred" level of high-speed Internet access, Digital Deluxe cable TV and the Nationwide Connections digital phone plan with unlimited local and long distance calling and five calling features, plus voice mail. Residents pay the development company $145 a month for the services through condo association dues or homeowners fees. The regular retail rate for that same service bundle for Virginia Beach residents is about $160 a month, including estimated taxes and fees . That's about 9 percent more.
Roseland Property Co. has set up such telecom services for its apartment buildings since 2001, said Josh Katz, vice president of development and technology for the company, based in Short Hills, N.J. Roseland has taken advantage of telecom competition in recent years, which has made underdog providers hungrier for business and more willing to discount rates to score large groups of customers.
"We could use our buying power at a rate that was advantageous to our residents," Katz said.
Roseland bundles high-speed Internet access, satellite TV service and a security system into the rent for The Myrtles at Olde Towne apartments in Portsmouth. Myrtles tenants pay about $85 for the services, and residents in most Roseland properties see costs at about 60 to 70 percent of the amount they would usually pay, Katz said.
Residents don't necessarily receive the full discount that developers secure through the bulk purchase. Developers can mark up that discounted rate and collect the difference as revenue, but neither they nor the telecom providers that routinely enter the bulk deals would discuss pricing strategies.
"What they end up offering to their clients is up to them," said Thom Prevette, a spokesman for Cox at its local headquarters in Chesapeake.
Even with discounts, the bulk arrangements don't always represent the lowest cost for consumers. The Lexington plan, for instance, includes rental of a modem for Internet service for an additional $10 per month. Homeowners can buy a modem from Cox for about one-third of that annual rental cost and would spend less than that for a compatible modem from a major electronics store .
The prearranged deals also lock residents into a range of services they might not need or want and otherwise wouldn't have paid for, said Irene Leech, president of Virginia Citizens Consumer Council and an associate professor of consumer affairs at Virginia Tech.
"The problem is, when it isn't a good deal, the consumer has nowhere to go," she said.
Leech has heard several of her students complain about frequent problems with telecom services they receive as a package built into their apartment rent. Once they sign long-term contracts, property owners and telecom companies have little incentive to provide a fast response or to address complaints, she said.
"They're stuck with whoever it is, and they get horrible service," Leech said of her students.
Roseland includes customer service requirements in its contracts with telecom providers, Katz said. They specify the maximum time the provider has to respond to complaints, to leave a customer waiting on the phone and to fix a problem.
Despite initial rate reductions, a long-term contract could allow the telecom provider to raise prices later, while restricting resident s' options to shop around for better deals, said William Irby, director of the communications division of the State Corporation Commission. If competition develops in TV service -- as telephone giant Verizon Communications Inc. has planned with a new fiber-optic system to deliver video signals -- a consumer living under a pre arranged deal would have limited ability to take advantage of it.
That's one reason Roseland has never bulked services for condo owners, Katz said. "For people who are investing long term in a community, for us to lock them long term into a service seemed a little unfair," he said.
Some developers' deals give residents the option to buy services from another provider but usually require them to continue paying the fee to cover the pre-arranged package. Not only would a consumer have to want another service enough to pay on top of those built-in costs, but the alternative provider also would have to see enough financial benefit to justify the investment in wiring a whole building or group of buildings to serve a mere fraction of residents there.
" In most cases, it's not worth it for them to do that," Irby said.
Residents do have the ultimate option to decide against buying or leasing a home that comes bundled with telecom services they dislike. Developers, though, hope residents will see the value of having their services working on move-in day.
"What we're trying to sell them," Katz said, "is the convenience and the value of making that choice for them."
* Reach Carolyn Shapiro at (757) 446-2270 or carolyn.shapiro@pilotonline.com.
Comments to Author: Sent: Tuesday, April 18, 2006 3:04 PM
Hello Carolyn,
Your article, quoted below, exposes something that should be completely illegal the way you explain it. Communications are a personal issue, how much if any and who. The FCC has laws about allowing consumer choice in communications providers. I would guess the practice below is illegal. In addition, communications, be it traditional telephone, IP telephone, Internet access, cable or satellite TV are all very fast changing services and technologies. To lock any person in to a bundle of services with no flexibility in their ability to vary what services they choose is criminal.
What happened to the developer or property owner / manager installing or having installed by companies who offer but do not force use of their services? Having cable, Ethernet, fiber or other cabling or wireless services installed for the benefit of their tenants or owners giving them the choice to buy services (perhaps with discounts being given directly to customers as incentives for them to sign on) is the fair way to provide services to consumers.
Verizon, AT&T, Comcast and other major national communications companies are investing billions of dollars installing technology to the door of homes all over the country. They are not making this investment with a gun to the head of the consumer forcing them to take the service or move. This is what your developers are doing in your article and it is about their profit and the profit of the provider only. This is wrong, illegal and I am glad you have exposed this practice because it is time it be specifically stopped NOW.
Author reply to comments and my reply intermixed:
In a message dated 4/24/2006 2:01:26 P.M. Eastern Standard Time, Carolyn.Shapiro@pilotonline.com writes:
Dear Patrick,
Thank you very much for your interest in and comments on the article. I did look into the legality of this practice among developers and did many interviews about that. I found that regulators generally see nothing illegal about it on its face.
"on its face" is not acceptable. Forcing a citizen / consumer / tenant or whatever to use a pre-contracted provider is wrong. Anyone who cannot see this is obviously a blind 9-5 worker who never had to run a business or procure telecommunications services that sustain their living.
First, the developer that owns the property at the outset does indeed have a choice in telecommunications providers. Developers can consider multiple options from the providers that would like access to their properties, so they can take advantage of competition where it exists and to the extent it is required by regulation.
My Reply: The developer ownership of the property in this case is NOT the same as owning a coffee shop where the customer can go to the next coffee shop to purchase services or products. These are developers that own residential properties they then sell or lease to citizens with rights. Developers can and should shop for the best access deals from telecommunications providers, however this is NOT the same as saying the citizen (consumer) that buys or rents from that developer should be forced into that contract. Period. Each person has different needs. To force a person to buy a package of communications and Internet services they don't need or do not suite their needs is wrong. The developer is developing housing not communications products.
Second, to your point about telecom services being a personal decision and the unfairness of locking in a consumer to a single option, the buyer or renter of a home that comes with pre-arranged telecom service does have the choice not to buy or lease that property. Anyone who dislikes the prospect of being locked into one service can pick a different place to live, if it's an important issue to that individual.
My Reply: This is not an option. If this practice becomes wide spread people all over the country will begin to be forced to use services provisioned by the developer or manager or whatever entity is controlling access into the building. This is wrong and it should not matter if this is a multi tenant building or a single family neighborhood street, the freedom to choose communications services should not be controlled at the outset. Period. Saying the person can move or not live there is absolutely ludicrous. We are talking about an area that some people do not have that kind of choice or flexibility. Where you live is not like which coffee shop you go to. What happens if all developers wether it be single family or multi family begin this practice? What of discrimination between those who live in single family verses multi family residences? What of town homes? Where does this stop? Most of the developed world outside of the US lives in multi family properties. Would you allow this practice there?
My Reply: Communications in this age = Freedom. Period. AT&T, Verizon and other communications providers are starting to understand this and they have proposed some frightening technology limitations for the future on their networks. Access to information = Freedom. Period. Our media companies control 40% of the information broadcast in a given market and this is going to increase with cross ownership of newspapers. Communications via telephone, cable, fiber, satellite or what ever other technology comes along is the fabric of what will allow our citizenry to advance technologically and individually. To deny full access and choice is to cripple the nation's future.
Third, if any resident wanted to seek the services of a provider other than the one under contract with the developer, he or she is able to do so, and a company with a state license to provide telephone service in Virginia could demand access to the rights of way to that property. The question is whether that alternative provider would choose to take the steps and expense necessary to pursue its access to the rights of way, which could involve action in court, and to build its facilities in that development with the expectation of serving perhaps just a handful of customers. So while the customer has the right to go to a different provider and that provider might have the right to serve that customer, the provider also has the right to decline to serve that customer -- as long as the customer does have access to telephone service through the contracted provider.
My Reply: This statement sounds as if it were provided to you directly from the legal team of one of the RBOC's. You seem to forget, this practice of contracting out a deal with a communications provider is separate from the freedom to choose whether to accept those services or be forced to accept them. The issue you lay out above is moot when new technologies such as WiMax and Broadband Cellular services and Satellite communications are taken in consideration. There is no infrastructure required in the building for these services and to be forced to subscribe to a land based service or forced to use a wireless based service for that matter is wrong and short sighted. I think you are missing the point. The RBOC's (Regional Bell Operating Companies) and Cable companies are likely paying fat commissions to developers to "lock" in their tenants to legacy technology often at elevated prices. The consumer's rights are being squashed here. Period.
Fourth, state and federal regulation of telecommunications and requirements for competition generally are limited to telephone services. In that case, the regulation generally applies to the extent to which the dominant phone provider -- which in this area is Verizon Communications Inc. -- has allowed use of its infrastructure to competing companies that want to provide service. As long as competing providers have the ability to compete for access to a particular property, which the developer allows them at the outset, that complies with the rules in most cases. For other telecom services, such as television and Internet, state and federal regulators have few rules.
My Reply: Once again. Telecommunications services should not be locked in to the tenant period. Your point that the "developer allows them at the outset" once again misses the point. The "developer allows the provider". Where is the consumer choice in this formula?
As far as your question about a home being wired for service but the resident not being forced to accept those services, I learned from my reporting that developers generally require residents to pay for the services because the developer has already promised to pay the telecom provider for service to each of those homes. The developers make this promise to gain, in exchange, a discounted bulk rate that they could pass on as a benefit to residents. Whether or not the residents see this as a worthwhile benefit depends on their points of view.
My Reply: When you say "you have learned" I am afraid you have learned right from the mouthpieces of the corporate entities (developers and providers) who stand to benefit directly by force feeding the consumer, citizen, tenant, owner a technology bundle at high cost (regardless if the bundle is a few % lower than purchased separately) they may not need, want or may need or choose otherwise.
I hope this provides some clarification for you. I do understand your points on this subject, and you certainly are entitled to your perspective. Feel free to get in touch with me if you have any other comments or questions.
My Reply: I am extremely disturbed by your inability to comprehend the possibility that citizens / consumers are guaranteed rights in this country and what the developers and providers are doing in this case is plain wrong. Your reply sounds as if it was written by the developers and providers. This is the biggest problem facing America right now. Even people in the media have forgotten that the US is a country of Citizens NOT just corporate entities. Our government has forgotten this for years now. Your writing and reply are evidence that as a member of the media, you represent your institution and your presentation of information above has demonstrated your institution's lost touch with this idea.
I do want to thank you for reporting the story in the first place. For even thought you know not what harm this kind of action would cause, your lack of understanding of the issue and it's impact may be the thing that allowed the story to be printed in the first place.
The new US Government Shakedown...
It was during the Clinton administration that the practice of shaking down corporate entities under the Republican controlled house became a fine art. By the early 2000's the money was pouring in. The US Government has always been good at raking in the cash from constituents whenever possible. I remember the tobacco company's CEO's sitting in front of congress being questioned about a legal product that was getting farm subsidies as if they had done something wrong. Besides all the moral and legal issues the BIG elephant was the amount of money members of congress were able to rake out of those cash rich companies.
Now they have got a big new hot potato that will bring in more cash, more cash. In case you don't know, ex members of congress and their staffers and all the other inbreeds in Washington often go to work for lobbying firms. You know what they do. Get paid BIG BUCKS to open doors for those with big bucks. Check this out:
Non-US companies wanting to acquire sensitive US assets are increasingly seeking the blessing of lawmakers on Capitol Hill as they move forward with their transactions.
The trend underscores how dramatically the environment for deals has changed since the controversy over Dubai Ports World.
Executives, lobbyist and attorneys involved in recent high-profile deals, including Alcatel's merger with Lucent and Toshiba’s takeover of Westinghouse, are reaching out to lawmakers to educate them about their transactions and ways to mitigate any potential national security-related concerns.
In one case, a New York-based fuel cell producer, Plug Power, approached senators Chuck Schumer and Hillary Clinton and other politicians to help pave the way for a $240m (£135m) investment into Plug Power by a Russian company headed by billionaire Vladimir Potanin. The trend has emerged as legislators debate plans to revamp the way the US reviews foreign deals on national security grounds.
The Dubai Ports Deal sure did wake up congress. Hey, man, this is a gold mine. If every major international business deal has to be cleared by congress just think of how much money is going to flow through Washington. Just think about it. Man it is going to be huge!
Well uh, I remember when US companies wanted to invest in the "old" Soviet Union. I remember reading about companies not being able to determine who had real athority to approve an investment. There were so many power centers in Moscow it was a joke. Companies had to jump so many hurdles (and I am sure grease so many palms) they eventually made one decision, give up. Investment in the old Soviet Union was non-existant.
Now Washington is treading on thin ice. It is a dangerious prescident to have the Dubai Ports Deal spill over to the point where companies have to lobby various power centers in Washington to get a deal approved. They will just stay away. With the US trade deficit approacing $100 Billion per year and the US government annual deficit approaching $800 Billion per year and all this debt increasingly being financed by forigen governments what exactly are they supposed to do with all the quickly decreasing value of dollars? We need those dollars flowing back to the US and we don’t need our government greasing their palms over every deal.
When Washington starts looking like the Soviet Union in 1980 we will have a problem... We have a problem.
Source: Acquisitive companies turn to US Congress>By Stephanie Kirchgaessner in Washington>Published: April 23 2006 22:02 Last updated: April 23 2006 22:02
http://news.ft.com/cms/s/85aca590-d306-11da-828e-0000779e2340,s01=1.html
Now they have got a big new hot potato that will bring in more cash, more cash. In case you don't know, ex members of congress and their staffers and all the other inbreeds in Washington often go to work for lobbying firms. You know what they do. Get paid BIG BUCKS to open doors for those with big bucks. Check this out:
Non-US companies wanting to acquire sensitive US assets are increasingly seeking the blessing of lawmakers on Capitol Hill as they move forward with their transactions.
The trend underscores how dramatically the environment for deals has changed since the controversy over Dubai Ports World.
Executives, lobbyist and attorneys involved in recent high-profile deals, including Alcatel's merger with Lucent and Toshiba’s takeover of Westinghouse, are reaching out to lawmakers to educate them about their transactions and ways to mitigate any potential national security-related concerns.
In one case, a New York-based fuel cell producer, Plug Power, approached senators Chuck Schumer and Hillary Clinton and other politicians to help pave the way for a $240m (£135m) investment into Plug Power by a Russian company headed by billionaire Vladimir Potanin. The trend has emerged as legislators debate plans to revamp the way the US reviews foreign deals on national security grounds.
The Dubai Ports Deal sure did wake up congress. Hey, man, this is a gold mine. If every major international business deal has to be cleared by congress just think of how much money is going to flow through Washington. Just think about it. Man it is going to be huge!
Well uh, I remember when US companies wanted to invest in the "old" Soviet Union. I remember reading about companies not being able to determine who had real athority to approve an investment. There were so many power centers in Moscow it was a joke. Companies had to jump so many hurdles (and I am sure grease so many palms) they eventually made one decision, give up. Investment in the old Soviet Union was non-existant.
Now Washington is treading on thin ice. It is a dangerious prescident to have the Dubai Ports Deal spill over to the point where companies have to lobby various power centers in Washington to get a deal approved. They will just stay away. With the US trade deficit approacing $100 Billion per year and the US government annual deficit approaching $800 Billion per year and all this debt increasingly being financed by forigen governments what exactly are they supposed to do with all the quickly decreasing value of dollars? We need those dollars flowing back to the US and we don’t need our government greasing their palms over every deal.
When Washington starts looking like the Soviet Union in 1980 we will have a problem... We have a problem.
Source: Acquisitive companies turn to US Congress>By Stephanie Kirchgaessner in Washington>Published: April 23 2006 22:02 Last updated: April 23 2006 22:02
http://news.ft.com/cms/s/85aca590-d306-11da-828e-0000779e2340,s01=1.html
Wake up call on Oil..
So, some members of our government have decided to wake up... Have they? Or are they looking to just shake down the oil companies while looking like they care about the little guy?
USA Today reports:
Sen. Carl Levin, D-Mich., said on CNN's Late Edition that President Bush should call for a windfall profits tax on the oil companies' "extreme, obscene profits."
Sen. Arlen Specter, R-Pa., appearing on the same program, said a windfall profits tax is "something worth considering," as well as legislation targeting consolidation of oil companies.
Well Consider this.
Our government has forgotten the basic element that certain raw materials and minerals are "national assets" meaning enjoyed by all Americans. The fact that corporate entities are allowed to extract and market these national resources is part of the fabric of our capitalist system.
However, when market forces (and this is not necessarily a scheme by oil companies) push the prices of these resources beyond any reasonable level allowing excessive profits, it is time to remember these are resources of our people. While our people's pension system is nearly bankrupt, largely due to the pensions being dumped on the government (taxpayer) by airlines and manufacturers being hurt by high energy costs in their product or the products of the companies they sell to, it is high time we tax the exorbitant profits for the benefit of the people.
It is also important to note, Oil is not a micro circuit. What is meant is, the price of oil is not due to any ingenious technology or patented product that has human ingenuity at risk. No, oil still costs under $10 a barrel to take out of the ground in most of the world (some places under $7.00 per barrel), so to NOT tax the profits being made at $75 a barrel is to allow the companies that extract the product a right to steal from the citizens that "own" those resources by essentially forcing a tax so large no government could get away with without being overthrown... Well except the US government eh?
The UK has initiated a windfall profit on oil companies because they understand this point and their government still has the capability of functioning in the interests of its citizens and not just the corporate entities that pay for their representation.
USA Today reports:
Sen. Carl Levin, D-Mich., said on CNN's Late Edition that President Bush should call for a windfall profits tax on the oil companies' "extreme, obscene profits."
Sen. Arlen Specter, R-Pa., appearing on the same program, said a windfall profits tax is "something worth considering," as well as legislation targeting consolidation of oil companies.
Well Consider this.
Our government has forgotten the basic element that certain raw materials and minerals are "national assets" meaning enjoyed by all Americans. The fact that corporate entities are allowed to extract and market these national resources is part of the fabric of our capitalist system.
However, when market forces (and this is not necessarily a scheme by oil companies) push the prices of these resources beyond any reasonable level allowing excessive profits, it is time to remember these are resources of our people. While our people's pension system is nearly bankrupt, largely due to the pensions being dumped on the government (taxpayer) by airlines and manufacturers being hurt by high energy costs in their product or the products of the companies they sell to, it is high time we tax the exorbitant profits for the benefit of the people.
It is also important to note, Oil is not a micro circuit. What is meant is, the price of oil is not due to any ingenious technology or patented product that has human ingenuity at risk. No, oil still costs under $10 a barrel to take out of the ground in most of the world (some places under $7.00 per barrel), so to NOT tax the profits being made at $75 a barrel is to allow the companies that extract the product a right to steal from the citizens that "own" those resources by essentially forcing a tax so large no government could get away with without being overthrown... Well except the US government eh?
The UK has initiated a windfall profit on oil companies because they understand this point and their government still has the capability of functioning in the interests of its citizens and not just the corporate entities that pay for their representation.
Sunday, April 23, 2006
Gates, the monopolistic Hero
So as Bill Gates, the richest American on the planet, enters Vietnam for a one day visit he is mobbed by enthusiastic students touting his books. A short 30 years ago over 3,000,000 Vietnamese died at the hands of the Americans. And they say Americans have short memories.
Death, cleansing the earth of a few hundred thousand from time to time just does not seem to matter in the grand scheme of things now does it? Besides, 3,000,000 today is but .0005 % of the global population. What's the big deal? In 30 years no one will give a shit.
Just make sure they are not Americans, right?
Death, cleansing the earth of a few hundred thousand from time to time just does not seem to matter in the grand scheme of things now does it? Besides, 3,000,000 today is but .0005 % of the global population. What's the big deal? In 30 years no one will give a shit.
Just make sure they are not Americans, right?
Reality often comes from those not necessarily your friends...
Watch the dollar, not the yuan, Zhou says
Chinese central banker defends right to choose currency regime
This quote from The Chinese central banker is important. It could also be phrased, "Look in the mirror stupid.", as Americans and their leaders ignorantly finger wag their problems at others.
Who wants dollars? People selling oil demand $75 of them now. Gold sellers demand $625. You know why? The dollar is in trouble. Your (American) government has raided the treasury and fattened the coffers of its buddies and now your government is $760 billion in debt each year.
Yea, that is in addition to $800 billion in trade deficit and $7 trillion in accumulated government debt. Oh, and when the nations with piles of dollars try to invest them back in the US your government says emphatically "No". Go figure. The impotent, corporate government you have elected is saying indirectly, "Just take the mountains of dollars you have, bundle them up and use them for fuel", for the 2+ billion people that live on less than $3.00 a day in the nations hoarding the most dollars right now.
Some other quotes from the Central Banker of one such nation...
" A top Chinese official said Saturday the dollar represents a greater risk to the global economy than the yuan does. Rather than monitoring the yuan, global financial institutions should watch the U.S. dollar, said Zhou Xiaochuan, the governor of the Peoples' Bank of China. "
"Global trade, settlements and reserve assets are heavily reliant on a single currency," Zhou said in remarks to the International Monetary Fund. "The fund should give priority to establishing a surveillance and check-balance mechanism of the major reserve currency countries."
"Favorable conditions in the financial markets do not rule out the possibility of a sudden reversal in sentiment," Zhou said. The lack of coordination in the G7 on monetary policy "could result in large and volatile movements of financial markets."
"We cannot ignore the risk of disorderly adjustments in financial markets," Zhou said.
Yea, time to start understanding, your house did not double in value in 5 years, the amount of house you can buy with your worthless currency has halved in 5 years.
Soak on that for a while.
Quotes from Marketwatch.com 7:18 PM ET Apr%2
Chinese central banker defends right to choose currency regime
This quote from The Chinese central banker is important. It could also be phrased, "Look in the mirror stupid.", as Americans and their leaders ignorantly finger wag their problems at others.
Who wants dollars? People selling oil demand $75 of them now. Gold sellers demand $625. You know why? The dollar is in trouble. Your (American) government has raided the treasury and fattened the coffers of its buddies and now your government is $760 billion in debt each year.
Yea, that is in addition to $800 billion in trade deficit and $7 trillion in accumulated government debt. Oh, and when the nations with piles of dollars try to invest them back in the US your government says emphatically "No". Go figure. The impotent, corporate government you have elected is saying indirectly, "Just take the mountains of dollars you have, bundle them up and use them for fuel", for the 2+ billion people that live on less than $3.00 a day in the nations hoarding the most dollars right now.
Some other quotes from the Central Banker of one such nation...
" A top Chinese official said Saturday the dollar represents a greater risk to the global economy than the yuan does. Rather than monitoring the yuan, global financial institutions should watch the U.S. dollar, said Zhou Xiaochuan, the governor of the Peoples' Bank of China. "
"Global trade, settlements and reserve assets are heavily reliant on a single currency," Zhou said in remarks to the International Monetary Fund. "The fund should give priority to establishing a surveillance and check-balance mechanism of the major reserve currency countries."
"Favorable conditions in the financial markets do not rule out the possibility of a sudden reversal in sentiment," Zhou said. The lack of coordination in the G7 on monetary policy "could result in large and volatile movements of financial markets."
"We cannot ignore the risk of disorderly adjustments in financial markets," Zhou said.
Yea, time to start understanding, your house did not double in value in 5 years, the amount of house you can buy with your worthless currency has halved in 5 years.
Soak on that for a while.
Quotes from Marketwatch.com 7:18 PM ET Apr%2
Monday, April 03, 2006
Surpasses all Expectations
Remember, 1/2 dozen private equity companies with gross revenues of $100 billion each by the end of the decade... Check out latest super successful $14 billion fund raising... Also, oil money has found a way to "buy in" without having to put their mark on it.
Where does it all end?
URL (where available here)
Texas Pacific raises record $14bn for new fund
By Peter Smith In New York
Published: April 2 2006 22:01 | Last updated: April 2 2006 22:01
Where does it all end?
URL (where available here)
Texas Pacific raises record $14bn for new fund
By Peter Smith In New York
Published: April 2 2006 22:01 | Last updated: April 2 2006 22:01
Texas Pacific Group will this month tell investors it has raised more than $14bn for its latest buy-out fund, the biggest single pool of capital raised in global private equity.
TPG recently contacted investors to say it planned to inflate the size of its new fund beyond its original target, which was initially expected to be in the $10bn to $12bn range.
The decision follows a seemingly insatiable appetite from new and former investors, including banks, insurance companies, public and private pensions schemes, university endowments and wealthy individuals, to pump capital into the asset class.
Larger amounts of Middle Eastern capital are also flowing into private equity funds.
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