Saturday, January 28, 2012

ANS -- The Sad Death Of The Knob, Switch And Button

Here is an interesting comment on design.  Possibly fatal design.  It won't be the first time someone dies for a fashion statement, but here you don't really get a choice. 
Find it here:  

detroit auto show
By Jason Torchinsky
Jan 11, 2012 12:00 PM
46,729[] 466[]


The Sad Death Of The Knob, Switch And Button

I want to start by coming out and saying I'm not one of those car luddites who think everything should hover in some magical past; while I'm very fond of old-school cars, there's an amazing amount of amazing new tech in cars, and LCD dashboards in so many new cars here at the Detroit Auto Show are a genuinely great advance. Except for one big issue: Knobs, switches and buttons? They're now officially doomed.

Knobs are still around, albeit in reduced numbers, but it's very clear they're considered vestigial holdouts and it's just a matter of time before they're done away with completely. Looking at forward-thinking cars like the Tesla Model S demonstrates this, as its dash is basically just two big iPads, one in landscape orientation and the other in portrait.

A booth from Denso, a major supplier of auto parts and electronics, shows a prototype cockpit of the future ­ and it's all touch screens. Touch screens are great on our phones and tablets; so why wouldn't they be great in a car, right?

The problem has to do more with the "screen" part than the "touch" part, though both are factors. On your phone, you're looking at the screen, interacting with it very directly; the visual feedback is essential for operating the interface.

The Sad Death Of The Knob, Switch And Button When you're driving, ideally you're looking mostly out of the big window in front of you, and you operate most of the ancillary controls with no more than a quick glance. Touch screens don't work like that; little buttons on smooth glass surfaces have to be targeted with a pair of eyes.

All you need to do to prove the point is to look up.

Have you ever peeked in the cockpit of an airplane and seen the levers in between the seats? Those levers have funny-shaped knobs: Spool-shaped, crown-shaped, star-shaped ­ it's the marshmallows from a Lucky Charms box. There is, of course, a great reason why they're like that: so pilots can know what lever is what just by touch.

The Sad Death Of The Knob, Switch And Button That's exactly what is being given up when controls move to the touch screen. Tactile feedback and the ability to feel what a control is has long been part of driving.

Traditionally, we can feel and know what's a radio knob, what a climate control lever feels like, how the notches feel as we move them from one setting to another, and it's worked great. Even without any interior lights or dash lights I bet most of us could find and use the essential controls on our cars.

Touch screens are awesome for many, many things. They look great, they can show an incredible amount of information, but they should never be the only components on a dash.

The Sad Death Of The Knob, Switch And Button Oh, but that's not the only problem. Some cars, like the Chevy Volt, the Cadillac ATS and everything from Lincoln are replacing standard buttons with sleek capacitive touch plates with big clusters of identically-shaped buttons. Capacitive technology refers to using electrodes to sense the conductive properties of objects, such as a finger. So, basically, rather than physically depressing a button you've fumbled for while your eyes remained on the road, you'll turn on and off four different things before finally looking down to find what function you want to change. Then you crash and die.

So those suck in about the same way touch screens do, and they look like they came off a VCR. So knock that off, too.

Automakers, I'm pleading with you, spare the life of just a few knobs, just some essential ones, even if they have redundant touch-screen controls. Leave me some knobs in the cars of the future. Nice, chunky, clicky knobs, and maybe a lever, switch and button or two.

I'll even let you make them look cool and LED-lit or whatever you want.
Contact Jason Torchinsky:

ANS -- Old mortgages rise from the dead, haunt homeowners

Yet another egregious after-effect of deregulating the greedsters and the banksters.  Many of the people who have lost homes never missed a payment -- the banks just cheated them. 
find it here:  

Old mortgages rise from the dead, haunt homeowners

By Michelle Conlin

Thu Jan 26, 2012 2:56pm EST

(Reuters) - In July 2009, Roy and Sheila Bowers refinanced the mortgage on their suburban ranch home in Topeka, Kansas. The couple wanted to take advantage of the low interest rates that were all the rage at the time.

Roy, a truck driver, and Sheila, a former hotel housekeeping supervisor, knew their new loan from Wells Fargo would enable them to save $198.86 a month - a nice chunk to help with gas and groceries.

But what the Bowers never imagined was that their old loan, the one Wells Fargo told them was paid off, would resurrect itself, trashing their credit report, scotching their son's student loans and throwing the whole family into foreclosure. All, they say, even though they didn't miss a single mortgage payment.

The Bowers are not alone.

More and more, homeowners say that mortgages they thought were dead and buried are springing back to life, sometimes haunting them all the way into foreclosure.

"It's the most egregious manifestation of an industry that's seriously broken," said Ira Rheingold, a lawyer who is the executive director of the National Association of Consumer Advocate.

Diane Thompson, an attorney with the National Consumer Law Center, says she has defended hundreds of foreclosure cases, and in nearly all of them, the homeowner was not in default. "The record-keeping on the part of the mortgage servicers is not to be trusted."

The problems grew from a lot of sloppy recordkeeping that began during the housing boom, when Wall Street built a quick-and-dirty back-office operation to process mortgages quickly so lenders could sell as many loans as possible. As the loans were later sold to investors, and then resold around the world, the back office system sidestepped crucial legal procedures.

Now it's becoming clear just how dysfunctional and, according to several state attorneys general, how fraudulent the whole system was.

Depositions from "affidavit slaves" depict a surreal, assembly-line world in which the banks and their partner firms hired hair stylists, fast-food kids and Wal-Mart floor workers, paying them $10 an hour, to pose as bank vice presidents, assistant secretaries and corporate attorneys.

These "robosigners" became a national sensation in the fall of 2010 when it was revealed that they faked titles, forged documents and backdated affidavits so they could make up for the bypassed procedures and foreclose on properties.

They passed around notary stamps as if they were salt. They did all of this, they testified, without verifying a single word in any of the documents - as is required by law.

And it was all done, they say, to foreclose on as many homeowners as fast as possible.

No one collects statistics on wrongful foreclosures, or how many people are facing the phantom mortgage debts. But as the industry enters its fifth year of unwinding its mortgage morass, consumer groups, homeowner attorneys and foreclosure-fraud investigators say they are seeing more cases where people who don't owe the banks a dime are getting ensnared in the same hell as those who have missed payments.

They add that such problems are likely to intensify. Former industry employees have testified that they knowingly pushed through foreclosures on the wrong people.

It all casts a pall over a housing market in worse condition than it was during the Great Depression. By some estimates, 12.5 percent of U.S. homes with mortgages are either in foreclosure or the loans are at least 30 days past due, representing about $1 trillion in value.

"This is an epic problem that the economy hasn't even begun to digest," said Florida foreclosure analyst Lisa Epstein.

In some cases, mortgages that were supposed to die off in a refinancing are popping back up, while in others, the loans were paid in full. Homeowners who pay off their houses through bankruptcy programs are also falling prey.

So are homeowners who never even had a mortgage to begin with.

Homeowners say the banks' repo men sometimes even show up at work. Banks also hector them with threatening letters and phone calls. "It scared the hell out of him," said a Houston lawyer whose client was the target of such efforts. "He was absolutely spooked," lawyer Barry Brown said.

So was Shantell Curtis of Utah. She showed up at her accountant's office last year only to learn that she had been sued for foreclosure on a house she had sold years before. Bank of America reported the delinquency to credit bureaus, tarring Curtis's credit. It turned out the entire saga stemmed from a bank coding error. The amount the bank falsely alleged Curtis still owed on her mortgage? One dollar.

Vietnam vet Dwight Gaines fell behind on his payments on his Birmingham, Alabama, home. Gaines paid off his entire mortgage, plus all the fees and expenses he owed the bank in March 2010, as a part of a Chapter 13 bankruptcy plan. But Bank of America kept sending Gaines notices that he still owed $6,842.37. Nearly two years later, Gaines is still fighting the bank in court.

"In my experience, if I had not sued Bank of America, they would have eventually placed Mr. Gaines in foreclosure although he had completely paid his mortgage," said Gaines' lawyer, Wesley Phillips.

Bank of America spokewoman Jumana Bauwens said the bank is working to resolve the Gaines situation. She also said that "these situations pre-date a review of our foreclosure procedures which took place in the fall of 2010. At the time, we identified areas of our process that needed to be improved, and we have been making those improvements."

The reincarnating mortgage is only the latest development in the megabanks' mortgage debacle, a scandal that has made them the target of a mounting pile of investigations and lawsuits. Though a settlement with most of the U.S. attorneys general may be imminent, a rogue group of AGs has peeled off to launch their own investigations.

One of those AGs, New York's Eric Schneiderman, is a part of the U.S. Justice Department task force announced by President Obama in his State of the Union address on Tuesday night.

Up until Obama's announcement, the federal government's response to the alleged financial misconduct was in the form of an independent review of the banks overseen by the federal Office of the Comptroller of Currency. But critics have labeled the OCC review as a farce rife with conflicts of interest.

The OCC spokesman, Bryan Hubbard, disputed that claim, saying the OCC has gone to great lengths to ensure that the independent consultants hired by the banks to review their procedures would report to regulators, not the banks. "During the selection process of the independent consultants and law firms, regulators rejected some proposed consultants and law firms to prevent conflicts of interest," said Hubbard.

Such reviews are supposed to gather information from homeowners like Jennifer Wilson, a former nursery school teacher from Philadelphia. Wilson settled a wrongful foreclosure case with Wells Fargo in June 2010. That month, court records show, Wells Fargo filed a satisfaction of mortgage document noting that the $8,000 loan on Wilson's home had been paid in full.

But more than a year later, on December 8, 2011, Wilson, who is disabled and lives below the federal poverty line, answered her door to see a process servicer brandishing foreclosure warning papers from Wells Fargo. The bank's letter warned Wilson that she owed 57 months of late payments, plus expenses, totaling $18,407.55. If she did not pay within 30 days, the bank said, it would sue for foreclosure.

"I thought I'd been punked," said Wilson. Even more bizarrely, one day later, a different process server from a different company showed up on Wilson's door and handed over the exact same papers Wilson had received the day before.

"We see a lot of cases like this, where they are trying to collect even though there is no mortgage," said Wilson's lawyer, Jennifer Schultz. "Once the system has marked you as delinquent, there's just this massive machinery that takes over. There are people whose lives are destroyed by the system, and there's no way to fix it."

"We are working with her to resolve this matter as quickly as we can," Wells Fargo spokesman Jim Hines said.

Some critics say the stories indicate a pattern of systemic wrongdoing. That is one allegation lobbed in a December lawsuit against the banks brought by Massachusetts Attorney General Martha Coakley, who is among the handful of attorneys general that split off from the broader AG settlement group.

For the Bowers of Topeka, it all started in July 2009, when they refinanced their home with Wells Fargo. As is standard in a refinance, the couple used the proceeds from their new loan to pay off their old loan, with Security National Mortgage Company.

On July 6, 2009, Wells Fargo sent the Bowers a letter with a header in all caps at the top that stated: "CONFIRMATION OF LOAN PAYOFF." The letter opened by saying: "Congratulations! We are pleased to inform you that we have processed the funds necessary to pay your loan in full."

At the same time, Wells Fargo also sent a certificate of satisfaction to the Bowers local recorder of deeds in Shawnee County, Kansas. That notice certified that the Bowers' old loan of $184,222.00 had been paid off.

As the Bowers had hoped, their interest rate dropped from 7 percent on the old loan to 4.875 percent on the new one. The couple say they paid their new mortgage early each month.

But what the Bowers didn't know is that, five months later, the banks' private mortgage recording service filed an "Erroneous Release of Mortgage" document on the Bowers' loan with the Shawnee County Recorder's Office. The filing stated that the Bowers' first mortgage "has not been fully paid, nor satisfied, nor discharged, but, instead, continues to exist."

The document was signed by a robosigner, the Bowers' attorney alleges.

One month later, the Bowers noticed that the loan number and interest rate on their mortgage statement had mysteriously changed. Wells Fargo was now charging them the old 7 percent rate - and it hit them with more than $3,000 in late fees.

Thus began the family's descent into their mortgage ordeal. Sheila Bowers says she called Wells Fargo over and over and finally learned that the bank was now alleging that the couple's refinance never went through, and so the bank was reverting to the terms of the original mortgage.

To Wells Fargo, it was as if the refinance had never occurred. Yet Wells Fargo then reported two mortgages to the credit bureaus. That lowered the couple's credit score to the point where they couldn't obtain their son's new student loans.

"We only ever got one bill," said Sheila Bowers. "But they kept telling us we had two mortgages."

The Bowers couldn't find a lawyer who would take their case, especially since they could pay so little. But through friends, they knew an owner of a Topeka mortgage brokerage company who was also an attorney: Donna Huffman. It turned out Huffman was defending just such cases. "I'm a lender suing lenders," said Huffman. "I fought to put people in homes, and now I'm fighting to keep them."

Huffman sued, alleging that the bank was making the Bowers pay for its mistake. Wells Fargo response, in court papers, was that the Bowers failed to sign all the paperwork necessary for the refinance to go through. But the Bowers say they signed every document that the bank gave them. The bank also says in court papers that the Bowers never attended a closing. But the Bowers say the bank never told them they needed to do so.

What made the story even more strange to the Bowers is that when Sheila Bowers called the Federal Housing Administration to get help, the FHA, in a letter filed in court papers and dated October 19, 2010, told her that the loan Wells Fargo was trying to collect on did not exist. Instead, the FHA said it had documentation showing that the Bowers' original loan "was terminated on July 1, 2009, by prepayment," suggesting that Wells Fargo did pay it off. As far as the FHA was concerned, the loan that Wells Fargo was enforcing didn't exist.

Despite the misunderstanding, the Bowers continued to send in their mortgage payment to Wells Fargo, with the amount for the new, refinanced loan, every month. They hoped the entire ordeal would one day get cleared up. But in November 2010, Wells Fargo rejected the Bowers payment and sent it back. The next month, five days before Christmas, the bank foreclosed. The family then stopped sending in payments. They continue to live in limbo in their house as they fight for resolution.

Wells Fargo spokesman Jim Hines said: "The allegations, we feel, are baseless. We feel we are entitled to protect our lien interest because the promissory note has never been paid and the note and the (original) mortgage are in default."

To this day, the Bowers say they have no idea where all the mortgage payments they sent in after they got their new loan went.

"Nobody seems to know," said Sheila Bowers. "It's a mystery."

(Corrects paragraph 10 to $10 an hour instead of $10 per day; corrects last paragraph to Bowers instead of Bowe)

(Reporting by Michelle Conlin; Editing by Gary Hill)

Thursday, January 26, 2012

ANS "info only" Fwd: Breaking: California's AG refuses to give in to the Big Banks

For your information only (I am not soliciting money for them or even signatures) -- I got this and I thought you all should know that we are not agreeing to the idea of letting the banks get off scott free for what they have done to too-trusting mortgage holders. 

Courage Campaign  

[] Dear Kim,

Yesterday, Attorney General Kamala Harris announced that she would NOT agree to the current settlement deal with the Big Banks since it is "inadequate for California." She refused to sign on -- despite monumental pressure from the Big Banks, as well as the Obama Administration.

Kamala Harris is a hero -- the spirit of courage -- fighting for right even if the establishment and conventional wisdom are against her.

Will you thank AG Harris for standing up for homeowners against the most powerful people in the world?

Only 48 hours ago, no one was sure if the potential settlement would deliver justice for the millions defrauded by the Big Banks, or if it would amount to bank bailout #2. AG Harris reviewed the details of the final proposal and believes it's closer to the latter. She told us it lacks sufficient transparency, financial relief for homeowners, and meaningful enforcement measures to ensure accountability -- three of the five principles you, Courage members, asked to her stand up for months ago. In doing so, she showed the sort of remarkable courage for which we named the Courage Campaign and which we strive to embody every day.

Click here to sign our thank you card to Kamala. If you're interested in helping us deliver it, let us know on the sign up page.

We are encouraged that President Obama announced his special mortgage task force headed by New York Attorney General Eric Schneiderman, and we hope it's a sincere effort to hold the Big Banks accountable for the fraud they perpetrated in the housing market. Investigation and prosecution for crimes is absolutely necessary, but it alone is not sufficient to sign onto a deal unless it meets our criteria for a truly good settlement.

Please join us in thanking Attorney General Kamala Harris for standing up for you and me, when a less courageous elected official would have wilted.

Yours in the fight for economic justice,

Rick Jacobs
Chair and Founder, Courage Campaign

Chip in today to support our work fighting the Big Banks.


Courage Campaign is an online organizing network that empowers more than 750,000 grassroots and netroots activists to push for progressive change and full equality in California and across the country.

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Monday, January 23, 2012

ANS -- IBM: Lithium air battery prototype in 2013, production in 2020

Here is an exciting announcement of a new advancement in batteries for cars.  If it works out, it will be very helpful. 
Find it here:;cnetRiver  

IBM: Lithium air battery prototype in 2013, production in 2020

Liane Yvkoff  
by Liane Yvkoff January 13, 2012 2:56 PM PST

[]  (Credit: IBM)

Researchers are working on a lithium air battery that will make electric vehicles as practical as internal combustion cars are today.

For all the leaps and advances electric vehicles have made in the last couple of years, they still have a way to go before they become practical enough or cheap enough to be the typical family car. But IBM is working on a battery that will put an end to range anxiety, able to power a vehicle for 500 miles.

IBM researchers at four of the technology giant's laboratories are testing a lithium air battery. Dubbed the Battery500 Project, the lithium air batteries swap heavy-metal oxides for carbon, which reacts with oxygen to create an electrical charge. It's considered the holy grail of electric vehicle technology because it offers a theoretical energy density more than 1,000 times greater than the typical lithium ion battery you'll find in a Nissan Leaf. But it's also highly unstable.

To make lithium air batteries more stable, researchers tapped the Blue Gene supercomputer in Zurich to analyze electro-chemical reactions to find alternative electrolytes that won't degrade the battery while recharging, and have identified material that is promising, according to an article in New Scientist.

With several concepts under their belt, IBM expects to reveal a working prototype of the lithium air battery in 2013. If all goes according to plan, IBM expects full commercial production of their technology in 2020.

(Source: New Scientist)

Read more:

ANS -- Property vs. Freedom

This article explains copyrights, property rights, and the public domain in a way that's easy to understand.  this is going to be important to understand if we want to keep the internet free.
Find it here:    

January 23, 2012 – 1:51 pm

Property vs. Freedom

If you strip it down to its essence, the battle over SOPA/PIPA is Property vs. Freedom: the media companies want to defend their intellectual property, while Internet-users want to defend their freedom.

You won't often hear it characterized that way in the corporate media, though, because Property and Freedom are supposed to be inseparable, like Love and Marriage. Sing it, Frank:

This I tell you, brother:
You can't have one without the other.

Or, as Ron Paul more prosaically put it in 2004:

The rights of all private property owners … must be respected if we are to maintain a free society.

Simply saying the phrase "Property vs. Freedom" marks you as some kind of extreme Leftist. All right-thinking people know that Property can't possibly oppose Freedom.

Last summer I wrote Six True Things Politicians Can't Say. Well, here's another one: The relationship between Property and Freedom is highly contentious. (On second thought, the Love-and-Marriage parallel isn't that bad.)

Get off my lawn. Why is that relationship so contentious? It's simple: The essence of Property is the right to tell people to get off your lawn, and to sic the police on them if they don't. If you can't do that, it's not really your lawn.

So naturally Property increases Freedom for the owner. Once you have the right to sic the police on trespassers, your lawn becomes available for cookouts, gardening, minimally supervised children, and all sorts of other expressions of freedom.

But look at it from the other side. What if you're constantly being forced off other people's lawns and own no property you can retreat to? How free is that?

Free to be Jim Crow. Now read the Ron Paul quote in its full context. On the 40th anniversary of the Civil Rights Act of 1964 ( Wikipedia entry, text of bill), which banned racial discrimination in "any place of public accommodation" (like the Woolworth's lunch counter in Greensboro) and in hiring, Paul portrayed the law in this light:

The Civil Rights Act of 1964 gave the federal government unprecedented power over the hiring, employee relations, and customer service practices of every business in the country. The result was a massive violation of the rights of private property and contract, which are the bedrocks of free society.

In other words, business owners lost some of their right to tell black people to get off their lawns. Definitely it was a diminishment of Property. But was Paul right that it was a net loss of Freedom, or did the freedom gained by blacks more than make up for the freedom lost by businesses?

Why is it your lawn anyway? Post-slavery America may look like an exceptional case, but actually it was just a particularly egregious example of a general rule: Never in the history of humankind has private property been fairly distributed. By the time American blacks stopped being property themselves, all the good stuff was already owned by whites.

Welcome to Freedom, suckers! Now get off my lawn.

One standard pro-property response to this point is that in a free economy property tends to move to the people who earn it through hard work and ingenuity, so mal-distributions even out over time. Maybe the newly-freed slaves did get a raw deal, but that was a long time ago. According to this point of view, by now their great-great-grandchildren must be pretty much where they deserve to be.

But far from an exception, the race problem is a convenient color-coding that makes the general historical pattern easier to see. Michael Hudson described that pattern like this:

The tendency for debts to grow faster than the population's ability to pay has been a basic constant throughout all recorded history. Debts mount up exponentially, absorbing the surplus and reducing much of the population to the equivalent of debt peonage.

In other words, the typical trend is not for things to even out after a few generations, but for unfair distributions of property to get moreso. Sing it, Billie:

Them that's got shall have.
Them that's not shall lose.

The only exception I can think of is post-World-War-II America and Europe, where property tended for decades to become more evenly distributed. But far from the natural workings of a free economy, that outcome required inheritance taxes, progressive income taxes, public education, laws to break up monopolies and protect unions, a significant social safety net, and many other government interventions.

Freedom and public property. America's two greatest symbols of freedom are the Cowboy and the Indian, both of whom own little, but live in a vast public common where they can hunt in the forests, drink in the streams, and swim in the lakes without worrying about ownership.

Contrast that freedom with economic blogger Noah Smith's account of downtown Tokyo.

there are relatively few free city parks. Many green spaces are private and gated off (admission is usually around $5). … outside your house or office, there is basically nowhere to sit down that will not cost you a little bit of money. Public buildings generally have no drinking fountains; you must buy or bring your own water. Free wireless? Good luck finding that!

Does all this private property make me feel free? Absolutely not! Quite the opposite – the lack of a "commons" makes me feel constrained.

To me the lesson is clear: For all but the fabulously wealthy, freedom is maximized by balancing public and private property. It's nice to have your own lawn, but public property you can't be chased off of – roads, parks, sidewalks ­ is even more important. It's also nice to have public access to water and sanitation, and not to be at the proprietor's mercy whenever you enter a store, restaurant, or theater.

Intellectual property. Applying that logic to intellectual property gets you to the kind of public/private balance we used to have: Copyrights and patents grant creators and inventors valuable temporary rights, while producing a rich public common allowing fair use of recent creations. And since everything eventually becomes public, a balanced copyright law increases the value of the public domain by encouraging the creation of works that otherwise might be impractical.

Protests of SOPA and PIPA make no sense until you understand that we have lost that balance.

Consider how the music-downloading problem arose: By controlling distribution, media corporations inserted themselves as toll-collectors between creators and users. You'd pay $20 for a CD you could easily copy for $1, knowing that precious little of the difference made it back to the artist. Napster-users had few moral scruples against "stealing" music because the system was already amoral. (Call it the Leverage Principle: "The rich and powerful take what they want. We steal it back for you.")

Also, endless copyrights have dammed the flow of material into the public domain. When Walt Disney created Mickey Mouse in 1928, he was granted a 28-year copyright with the prospect of renewing for another 28 years. Evidently, the prospect of Mickey entering the public domain in 1984 didn't deter Walt from creating him.

But every time that expiration date approaches, the Disney Corporation leans on Congress to extend the length of existing copyrights. Tom Bell illustrates how copyrights lengthen as Mickey ages.


Unless corporate money loses its primacy in our political system, nothing created after 1928 will ever enter the public domain. Unlike Mickey, the vast majority of that cultural treasure-trove will be orphan works that no one has the right to use. (For a book-length treatment of these issues, see The Public Domain, which the author has graciously put in the public domain.)

As Laurence Lessig has pointed out, extending an existing copyright does nothing to promote creativity or otherwise advance the public interest:

No matter what the US Congress does with current law, George Gershwin is not going to produce anything more.

In short, the Infosphere is slouching towards Tokyo. Gradually the public common is shrinking towards the day when almost everything of value will be corporately owned.

SOPA/PIPA. The Stop Online Piracy Act in the House and the equivalent Protect Intellectual Property Act in the Senate are two more corporate attempts to buy laws that serve the private interest but not the public interest. (Interestingly, Politico covers the SOPA protests as a battle between Hollywood and Silicon Valley, as if the public were not involved.)

These laws would make search engines, internet-service providers, and other middlemen responsible for blocking access to web sites that copyright-holders claim are pirating their works. Since they bear no comparable responsibility for defending fair use, their safest course will be to block any site Disney or Time-Warner complains about.

Consider the quotes and images in this article. Traditionally, they would be considered fair use. But what if somebody complains? Is WordPress really going to pay a lawyer to read this article and write an opinion? Or are they just going to shut the Weekly Sift down?

The protests worked, for now. Websites like Wikipedia went dark on Wednesday to protest SOPA/PIPA, and a massive public response forced many lawmakers to change their positions.

But it's naive to think that's the end of the story. Corporate money is relentless. When public outrage dies down, we'll soon see the basic ideas of SOPA/PIPA back in some other form.

In addition to protests, we need a fundamental rethinking of intellectual property. As long as we're just talking about theft and how to prevent it, we're missing the point. The right question is how we restore the public/private balance to intellectual property.

We need intellectual property lines that are widely seen as legitimate. When we have that, the problems of trespassing and theft will become much, much smaller and easier to police.
January 23, 2012 – 1:47 pm Categories: Articles | Comments (1)

Tagged copyright, corporations, framing, media, propaganda

ANS -- Selling electric vehicles' power back to grid or vehicle-to-grid (V2G)

This is an article about electric cars becoming a storage medium for electricity.  It's interesting, we need to do this, and the article doesn't mention that Europe is far ahead of us on this kind of stuff.  If you want to know what's going on in the rest of the world with respect to changing over to renewable energy, read Jeremy Rifkin's new book, The Third Industrial Revolution.
Find it here:
The website has links to further explanations about electric cars. 

Selling electric vehicles power back to grid or vehicle-to-grid (V2G)

january 24, 2012

By now, everyone is familiar with the idea of an electric car plugging into an outlet to recharge. But vehicle-to-grid (V2G) electrification flips that around.

Selling electric vehicles power back to grid or vehicle-to-grid
NextEnergy has begun ordering expensive test equipment for the technology equivalent of a man-bites-dog story: a project that officials hope will help validate a promising component of the smart grid known as vehicle-to-grid electrification.

But vehicle-to-grid (V2G) electrification flips that around: If components and communication systems between car and grid evolve as planned, owners of electric vehicles will be able to generate income to offset the premium they pay for their cars by selling power back to utility companies at times of peak usage.

In April, the nonprofit Institute of Electrical and Electronics Engineers and the Society of Automotive Engineers signed a memorandum of understanding calling for the two organizations to agree on future national standards for vehicle-to-grid electrification.

NextEnergy has agreed to help develop those national standards. This spring, NextEnergy will begin testing components and electric cars in a building adjacent to its Detroit headquarters that houses what is called a microgrid that is already hooked up to DTE Energy.

"This could be a way to have a market subsidy," said Gary Gauthier, NextEnergy's director of business development. "This isn't near term. We need to get the OEMs involved. Realistically, it'll be three to five years before we even have small-scale operations up and running.

According to a report in November by Pike Research, 100,000 electric vehicles could be feeding power back into the national grid by 2017.

Prognostications by industry observers and technology publications vary from "this will prove to be much ado about nothing," to it will be a revolution in power generation in coming decades that will help free us from dependence on oil.

A 2010 report by the IEEE called vehicle-to-grid technology "the most promising opportunity in electrical vehicle adoption" but that "due to certain technical and economical issues, it is still less likely to become a reality in the short term."

The report also referred to a study that estimated a potential return to electric vehicle owners on the California power grid of between $3,038 and $5,038 per year.

Meanwhile, Willett Kempton, director of the Center for Carbon-free Power Integration at the University of Delaware, serves as a proof of concept. He set up his electric Scion to feed power back to the grid in 2009 and claims earnings of about $300 a month since then.

Marc Spitzer, a member of the Federal Energy Regulatory Commission, which regulates interstate transmission of electricity, told a conference in Boston that "vehicle-to-grid is, I believe, the salvation of the automotive industry in the United States."

Both Gauthier and Ron Gardhouse, NextEnergy's CEO and president, say Spitzer wildly overstates the case in terms of the auto industry, but nonetheless there is a huge economic potential.

"If this is going to happen, Detroit should own it," said Gardhouse, who said the long-range plan for NextEnergy is to help Michigan companies become suppliers of components and equipment needed to make vehicle- to-grid electrification commonplace.

"We need to work with the utilities and the auto companies to prove that there's a business case to be made," said Gauthier. "Does this work. Can there be a business there? Can you get enough money flowing for it to make sense?"

Gauthier said one of the Detroit 3 he doesn't have permission to name has agreed to provide vehicles, and others may, as well. He said he has had talks with DTE and expects a formal partnership with it, also.

He said the project will be funded in part by the Michigan Economic Development Corp. and in part by grants the nonprofit will be seeking from the U.S. Department of Energy and the Department of Defense.

Gardhouse said that with enough funding the project could expand to fill all six bays in the microgrid building.

The cost of the two-bay phase one will approach $2 million, he said.

He said NextEnergy will also work on inductive charging, a system where cars don't need to plug in but are charged wirelessly just by parking over a floor fitted with the proper equipment.

"Plugging in is eventually going to be old fashioned," said Gauthier.

If vehicle-to-grid electrification becomes a reality, a likely model is for a company known as an aggregator to work on behalf of utility companies to line up owners of electric vehicles. It will also require substantially more penetration by EVs into the new-car market, said Gauthier.

Meanwhile, NextEnergy has ordered a $500,000 piece of equipment known as a dual bi-directional charging model to serve as the guts of the two-bay station the nonprofit hopes to have on line by the end of May. He said the bays will test different types of charging systems, new batteries as they evolve and systems operating at different voltages and frequencies.

The car-to-grid model becomes more realistic as the cost of solar panels continues to fall. A dramatic price drop in the past year has led to a shakeout in the industry, but higher sales volumes for those companies left standing.

As more electric cars get recharged from renewable sources such as solar energy, the return to their owners when they sell electricity back to the grid will be higher than if they are just selling back electricity to the power company that they bought earlier at slightly lower rates.

Tom Henderson,

Friday, January 20, 2012

ANS -- Confessions of a Publisher: “We’re in Amazon’s Sights and They’re Going to Kill Us”

Here is a shocking note from the future -- Amazon is driving publishers -- all of them -- out of business.  In the future all books will be ebooks.  Personally it sounds yukky to me.  I find it objectionable that Amazon alone will be the arbiter of what is publishable.  It means things will have to appeal to a mass audience to be published....  Horrible!
Find it here:   

Confessions of a Publisher: "We're in Amazon's Sights and They're Going to Kill Us"

Sarah_Lacy_6x6  by Sarah Lacy
on January 17, 2012

[] When you see Snooki's book on the New York Times Best Seller List, you know publishing is in trouble.

You can blame readers and say publishing is just giving the public what they want. But that's only half the problem.

The rest is a lazy publishing industry that does far too little of the work that got them here: Discovering new authors and giving them a shot. Instead, they go for the lazy lay-up: Overpaying on celebrity memoirs and pop culture phenomenons with a built in audience.

But that was a short term mistake that has put the publishing industry behind the eight ball. And, according to this industry insider who asked not to  be named, a familiar bully is about to take them out. From an email:

So Amazon, pretty much since they started selling books, has been selling them for razor thin or zero margin. We sell them books at 50% of the retail price. You'll notice that popular books are usually selling for more than 50% off. So they're actually losing money on them. For years Borders and Barnes and Noble maintained that this was unsustainable, but the tactic succeeded in putting Borders out of business, putting BN on the ropes, and destroying hundreds of indie stores. It also lowered customers' perception of what a book *should* cost.

When ebooks started, we were pricing ebooks at the same price as the print book, and Amazon was selling them all for $9.99. So they were losing like $3-$4 per book. And they weren't doing it simply to move Kindles, since they don't actually make any money on the Kindle unit sales. Now with the "agency model" we get to set the ebook price and Amazon simply takes 30% of that.

We all kinda assumed that Amazon was either using books as a loss leader for other things (like getting people to sign up for Prime or simply gathering customer data), or was maybe planning on raising the prices they sell books for once BN and Borders were eliminated as competition. But I think they actually intend to keep print books at their current prices, and they want ebooks to be even cheaper. What they're actually targeting is the publishers' margin.

Long-term there's no future in printed books. They'll be like vinyl: pricey and for collectors only. 95% of people will read digitally. Everybody in publishing knows this but most are in denial about it because moving to becoming a digital company means laying off like 40% of our staffs. And the barriers to entry fall, too. We simply don't want to think about it.

Amazon is thinking about it, though, and they're targeting the publishers directly.

Publishers like to pretend that we make our money from discovering unknown talents for small advances  and selling millions of their books. That's a very small part of our business. The bestselling books are all written by celebs, by people with huge platforms, by fiction writers with a long history of bestselling books, or by people who do a proposal that's on its surface brilliant. In short, there's a bidding war among the publishers over the big books. We all know what the good books are–it all comes down to how much of an advance we're willing to pay for them. The hotly fought-for books are the ones that sell. And while we might not make huge profit % on these, we make big profit $ on these. They keep the lights on by covering overhead. Better to cover our fixed costs by going all in on a few big books than trying to buy dozens of mid-list books.

But in recent years, as book sales have declined, the advances for the biggest books have gone down proportionally, too. What used to be a $1 million book is now a $400,000 book. Publishers are thinking, "OK, we'll move less copies but we'll pay less for them, so we'll survive." Enter Amazon's print publishing arm. They hired this guy Larry Kirshbaum to run it–he's a savvy vet with 30+ years of publishing experience–and they have some editors, too. And they've been paying a ton of money for books.

I saw this [redacted] proposal a few weeks back. It was okay–[same redacted author] is an asshole but [redacted] has a certain following and it would probably be a bestseller. Bestseller now means selling 20,000 copies, so I was thinking of offering like [hundreds of thousand] for it. But Amazon had already bid $1 million for it. A similar thing happened with a [redacted] memoir a few months back. Traditional publishers are snickering, "Look at stupid Amazon–overpaying for books!"

But Amazon isn't stupid. They're overpaying intentionally to keep advances high (and high advances will bankrupt publishers). And they're also taking away all the authors who actually move units. They gave Seth Godin really favorable terms on a deal. Only a matter of time before they snag a James Patterson or some other big genre fiction name.

We can't pay $1 million for books anymore. Amazon could probably afford to lose $20 million/year in their publishing arm just to put the other publishers out of business. I think that's what they're trying to do–throw money around in an industry that doesn't have any, until Amazon becomes not only the only place where you buy books, but the only place that publishes books, too.

So rather than getting a 30% of an ebook (with the other 70% being split between the publisher and author), they'll be getting a 70% cut (with the other 30% going right to the author). Funny thing is that it's actually better for authors.

To be honest, publishing is a quaint little industry based on romance and low profit margins. But now we're in Amazon's sights, and they're going to kill us.

I have no insight into whether Amazon has planned this out, or it's just a happy accident given the success of the Kindle, the iPad and other eReaders and the general dysfunction of publishing. But I don't have much more sympathy for publishing than Farhad Manjoo has for independent book stores. Amazon didn't create publishing's woes, any more than blogging created the challenges of newspapers. The company is just cleverly exploiting them.

And good for them. My hope is disgruntled publishing executives like the one above will quit their comfortable jobs at dysfunctional prehistoric companies and start innovating on the model. I don't believe the public only wants books written by over-tanned drunks who go clubbing anymore than blog readers only want slideshows and posts on Apple.

Someone will build the next great publishing imprint out of these ashes. And as a reader and an author, I can't wait.

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Sarah Lacy

Sarah Lacy is the founder and editor-in-chief of PandoDaily.

ANS -- Nissan Examines Second Life For Used Leaf Battery Packs

Here is the latest on saving energy, using used electric car batteries.  We may be way behind Europe, but we may get the idea yet. 
Find it here:  

Nissan Examines Second Life For Used Leaf Battery Packs

By Nikki Gordon-Bloomfield Nikki Gordon-Bloomfield
1 428 views January 19, 2012

2011 Nissan Leaf

2011 Nissan Leaf
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In the aftermath of the last year's devastating Japanese earthquake and tsunami, more impetus has been given to the idea of turning electric cars -- and their battery packs -- into emergency backup power systems.

But now a new project has been set up to take the idea of using electric car batteries to provide backup power one step further -- by building backup battery banks built entirely of Nissan Leaf battery packs.

Announced yesterday, the collaboration between Nissan North America, power technology group ABB, 4R Energy and the Sumitomo Corporation of America aims to develop a prototype system that uses old Leaf battery packs to provide emergency power for 15 average homes for up to two hours.

After ten years of use in a Nissan Leaf, the lithium-ion battery pack responsible for providing motive power to the car will have lost around 30 percent of its original 24 kilowatt-hour capacity.

For the driver, that equates to lost range, and less performance than when the car was new.

2011 Nissan Leaf SL

2011 Nissan Leaf SL

But while the remaining 16.8 kilowatt-hours or so may not be enough to provide useful power to an electric car, battery pack is still capable of storing charge.

Cheaper than recycling, placing used Leaf battery packs together in a larger backup battery array ensures that the lithium-ion battery packs remain useful for as long as possible.

As well as provide power in a natural disaster, the backup battery arrays have the potential to reduce demand on the electrical utilities during peak demands, reducing brownouts.

It will also ensure that battery packs stay out of landfills.

The idea of using large banks of batteries to supplement the power to the electricity grid isn't new. In fact, many DIY electric car enthusiasts regularly recycle old lead acid battery packs from their home-built electric cars by using them to store electricity harvested from solar panels during the day so they can charge their cars up at night for free.

2011 Nissan Leaf

2011 Nissan Leaf

However, the new project involving Nissan Leaf battery packs is the first one we've heard of which exclusively uses battery packs from a particular electric car.

We'd love to see the project succeed, but can't help but wonder if utility companies will be comfortable using unknown, repurposed battery packs to provide reliable backup power.

It is more likely, unfortunately, that utility companies will favor brand-new lithium-ion cells in large arrays to ensure the systems remain completely predictable.

Even if that happens, it's still a win-win for electric cars: if demand for lithium-ion cells increases, economies of scale should help drive down the cost of electric car battery packs.


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Wednesday, January 18, 2012

ANS -- How Would SOPA/PIPA be Enforced?

Here is Brad Hicks' take on the SOPA and PIPA laws currently being considered.  Apparently, if passed, they will a) shut down the internet, all emails, and twitter completely, and b) make us all "guilty" of a crime so "they" can come for us whenever "they" want.
As I said before, not passing these laws is really important.
If it does pass, I will have to stop publishing this bulletin, too. 
find it here: 


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How Would SOPA/PIPA be Enforced?

  • Jan. 18th, 2012 at 10:12 AM
Brad @ Burning Man
It's taken me a long time to feel like I even needed to say anything about the Stop Online Piracy Act and Protect Intellectual Property Act bills that are floating through Congress, even knowing (thanks to Wikileaks' Cablegate) that the US State Department is threatening every other country on the globe with crippling trade sanctions if they don't pass their own version of this bill this year. It's a horrific bill, but one I couldn't take seriously at first because it is, in every version floating around, as flatly impossible to obey as King Canute's legendary law forbidding the tide from coming in. No matter how much lobbying money is thrown at an impossible idea, no matter how many campaign contributions were made, no matter how much of the US's remaining export economy depends on the industry backing an impossible idea, I had a hard time taking seriously the idea that Congress would really, when push come to shove, try to ban all user-created content on the Internet: no more email, no more Twitter, no more Facebook, no more YouTube, no more LOLcats, no more discussion forums, no more comment pages on articles, no more blogs.

The only way to actually enforce SOPA or PIPA as written would be to do just that. SOPA and PIPA give the US Attorney General the unilateral authority to order not just any tweet or email or web page or blog post, but the whole site that hosts it, permanently off of the Internet if even one link is found on it, anywhere, that "facilitates" copyright infringement. That's a term that's been interpreted so broadly, in some court cases, as to include "linked to a web site where, by clicking on this button, then this button, then this button, you could find a link to a specific page on a different website, where, if you clicked down three layers from that page, you could find infringing content." When the lawyer arguing this was asked if there was any limit to that, he said no. He was laughed out of court, because it was pointed out that this argument, if accepted, outlawed the whole Internet, as the whole point of the World Wide Web was that, given enough clicks, you can navigate from any non-dead-end site to any page on the web. But SOPA and PIPA won't end up in court, because they don't create any actual judicial review process, or allow any judicial appeal: if anybody asks the Attorney General to knock an entire site off of the Internet for just this reason, and he or she agrees, it goes down, period, end of story. So the only way that any website on the Internet could comply with SOPA and PIPA is to never, ever allow anything to be posted to their site that could in any way be, or be decrypted to suggest how to find, a link to a site that might have on it, anywhere, an equally vague and hard to find link to infringing content. The process for guaranteeing the safety of each 140 character tweet, each 100px by 100px user avatar icon, each link-shortened URL to a baby picture on a picture hosting site, each text caption embedded in a video of a cute kitten, didn't link to or describe how to find any site? Can't be done. Especially can't be done if you do allow supposedly non-infringing links, because let's say you review the URL today, and tomorrow something else is up at that URL? And how do you review the URL anyway; does somebody have to go read every comment on every review on every product at if I link to Amazon? Can't be done.

But the law's going to pass anyway. Or so they say. And the Internet is Made of Cats. Sociologists and political scientists studying the Arab Spring have accepted this as literal truth, in a way: governments being threatened by the Arab Spring could shut down any website that was only useful to the opposition, but if the opposition used Facebook or Twitter or YouTube, no matter how badly architected those websites were for safe use by an illegal opposition, the governments couldn't block them -- blocking grandparents from seeing their grandbabies on Twitter or Flicker, blocking everybody in the country from seeing Maru or Keyboard Cat on YouTube, caused more political blowback than letting the activists use them. So no, not even in the post-9/11 national security state, not even the United States is going to enforce SOPA or PIPA as written. No, really, I meant it when I said it: it can't be done. Which made it hard for me to take the proposed laws seriously ...

Until I realized the only way they could be enforced.

The MPAA and the RIAA, Sony and Bertelsmann and Disney, et al, wave aside all claims that SOPA or PIPA will be used to ban all user-originated content. They say that the law is written to be as draconian, and instantaneous, and without appeal as it is because no other plausible law, nothing short of that that's been tried, lets them take down obviously infringing sites like Pirate Bay and Torrent Freak without them being able to set up new, mirrored sites faster than DMCA takedowns can take them off the air. They want a broad law that gives one person, the Attorney General of the United States, the authority and the power and the responsibility to know a pirate site when he or she sees one, and trusts that person to never abuse that power, to only use it to protect America's last remaining profitable export industry from never being able to sell more than one copy of every movie or song ever again. They want the rest of us to have the same trust that they obviously have: that this power will never be abused.

No Democratic appointee will ever find a whistle-blower report on the Drudge Report or Fox News websites that they don't like, find (or fabricate, or just baldly dishonestly allege) that there is an infringing link in a comment thread on one of the news articles, and order that site knocked off the Internet. No Republican appointee will ever find an anti-war or an anti-oil-industry news story they don't like on Democracy Now or MSNBC and order those websites taken off the Internet, permanently, the same way. Why can we trust this? Is there something in the law that would protect those websites from that kind of abuse? No. Is there anything that would penalize the Attorney General for doing that? No. Is there anything to stop them from doing it as often as necessary to shut down all political opposition that would publicize the fact that they'd done this, going into the next election? No. So why are we supposed to trust that it will never happen? Just "because." Because we need it not to. Because we need this law, or the pirates will sink our economy, so we'll just half to hope that it never happens.

It took me until today to realize that the rule of law, not men, has fallen into such disrepute that this may actually pass.
  • Mood: worried worried



( 8 comments ­ Leave a comment )
[info] eggshellhammer wrote:
Jan. 18th, 2012 04:17 pm (UTC)
My understanding is that SOPA's not going to pass, it's pretty much dead in the water. Where are you getting your information?
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Brad @ Burning Man
[info] bradhicks wrote:
Jan. 18th, 2012 04:28 pm (UTC)
SOPA's vote has been canceled, and the President is threatening a veto, but the sponsors say that it will be re-debated in February. PIPA, which is the same bill in the other house of Congress, is still scheduled to be voted on on the 24th.
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[info] hugh_mannity wrote:
Jan. 18th, 2012 04:51 pm (UTC)
Yep. It's too good bad an idea for it not to come into force in one guise or another.

Not just because it ensures Hollywood's revenue stream, but also because it allows the government to shut down protest. And there's nothing the government (and democrat or republican, it doesn't matter -- they're 2 sides of the same coin) would like to do more than remove all protest -- other than the pro-forma official party vs. party stuff that is.

Bring on the police state -- let's get it over with sooner rather than later!
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Brad @ Burning Man
[info] bradhicks wrote:
Jan. 18th, 2012 05:10 pm (UTC)
It does boggle my mind that people who've spent the last three years convinced that Obama was going to come for their guns aren't afraid that he's going to come for their websites.
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[info] sethg_prime wrote:
Jan. 18th, 2012 05:11 pm (UTC)
The bill won't shut down piracy in the "go download torrents of such-and-such a movie" sense. What it will do is shut down companies with business models involving fair use of copyrighted material, because from day one, such companies will have to rigorously censor themselves, invest heavily in legal protection, or cut deals with Hollywood.
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[info] rowyn wrote:
Jan. 18th, 2012 07:48 pm (UTC)
Yep. It doesn't matter that the law is ridulous and makes the whole web in violation for existing, because they have no intention of shutting down the web. They just want a handy excuse to make us all lawbreakers, so that whenever they don't like something someone's done for whatever reason, they can mete out punishment without need for bothering with all that messy proof stuff.
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[info] laplor wrote:
Jan. 18th, 2012 08:25 pm (UTC)
Exactly! When everyone is guilty, everyone is in danger of prosecution - it's ultra-Orwellian.
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[info] silveradept wrote:
Jan. 18th, 2012 08:05 pm (UTC)
Related to this, when would you place the first obvious evidence that media cabals have been able to get whatever they want through the purchase of legislators?

It seems like this is the continuation of the regular amounts of legislation that extends copyright whenever one of their properties is about to go to the public domain. Just to the point where they've realized they can't contain the new methods any more.
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Saturday, January 14, 2012

ANS -- Everything You Need to Know About Wall Street, in One Brief Tale

Here's more stuff about what has been happening on Wall Street that is responsible for crashing our economy, and who is partly responsible.  You need to know about this stuff.  The article is by Matt Taibbi, who has really been following this stuff, and probably knows more about it than anyone. 
Bad language warning.
Find it here:  

Everything You Need to Know About Wall Street, in One Brief Tale

POSTED: January 13, 9:15 AM ET
Comment 67
hotel jerome  
The Hotel Jerome in Aspen.
Walter Bibikow/Getty Images/AWL Images RM

If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it.

Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado,  will be closed to the public from today through Monday at noon.

Why? Because a local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter's Bat Mitzvah.

The hotel's general manager, Tony DiLucia, would say only that the party was being thrown by a "nice family," but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.

At first,  I couldn't remember how I knew that name. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, "E-mails Suggest Bear Stearns Cheated Clients Out Of Millions." And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!

The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.

Back in the day, you see, Verschleiser headed Bear's mortgage-backed securities operations. Toward the end of his tenure, his particular specialty began with what at the time was the usual industry-wide practice, putting together gigantic packages of crappy subprime mortgages and dumping them on unsuspecting clients.

But Verschleiser reportedly went beyond that. According to a lawsuit later filed by a bond insurer called Ambac, Verschleiser also masterminded a kind of double-dipping scheme. What he would do is sell a bunch of toxic mortgages into a trust, which like all mortgage trusts had provisions written into their pooling and servicing agreements (PSAs) that required the original lenders to buy the loans back if they went into default.

So Verschleiser would sell bad mortgages back to the banks at a discount, but instead of passing the money back to the trust, he and other Bear execs allegedly pocketed the funds.

From the Atlantic story by reporter Teri Buhl:

The traders were essentially double-dipping -- getting paid twice on the deal. How was this possible? Once the security was sold, they didn't have a legal claim to get cash back from the bad loans -- that claim belonged to bond investors -- but they did so anyway and kept the money. Thus, Bear was cheating the investors they promised to have sold a safe product out of their cash. According to former Bear Stearns and EMC traders and analysts who spoke with The Atlantic, Nierenberg and Verschleiser were the decision-makers for the double dipping scheme.

Imagine giving someone a hundred bucks to buy a bushel of apples, but making a deal with him that he has to buy back any apples that turn out to have worms in them. That's what happened here: Bear sold the wormy apples back to the farmer, but instead of taking the money from those sales and passing it on to you, they simply kept the money, according to the suit.

How wormy were those apples? In one infamous email cited in the suit, a Bear exec colorfully described the content of the bonds they were selling:

Bear deal manager Nicolas Smith wrote an e-mail on August 11th, 2006 to Keith Lind, a Managing Director on the trading desk, referring to a particular bond, SACO 2006-8, as "SACK OF SHIT [2006-]8" and said, "I hope your [sic] making a lot of money off this trade."

So did Verschleiser himself know the mortgages were bad? Not only did he know it, he went so far as to tell his colleagues in writing that it was a waste of money to even bother performing due diligence on the bad bonds:

Jeffrey Verschleiser even said in an e-mail that he knew this was an issue. He wrote to his peer Mike Nierenberg in March 2006, "[we] are wasting way too much money on Bad Due Diligence." Yet a year later nothing had changed. In March 2007, Verschleiser wrote to Nierenberg again about the same due diligence firm, "[w]e are just burning money hiring them."

One of the ways that banks like Bear managed to convince investors to buy these bonds was by wrapping them in bond insurance through companies like Ambac, commonly known as "monoline" insurers. Investors who knew the bonds were insured were less worried about default.

Verschleiser, seeing that Bear had gotten firms like Ambac to insure its "sack of shit" bonds, saw here a new opportunity to make money. He first induced the monolines to insure the worthless bonds, then bet against the insurers! (Is it any wonder this guy ended up hired by Goldman, Sachs?) From the Atlantic story again:

Then in November 2007, Verschleiser wrote to his risk committee that he knew insurers for mortgage securities were going to have big financial problems. He suggested they multiply by ten times the short bet he'd just made against stocks like Ambac. These e-mails show Verschleiser's trading desk bragging to firm leadership that he made $55 million off shorting insurers' stock in just three weeks.

So in essence, Verschleiser was triple-dipping. First he was selling worthless "sacks of shit" to investors, representing them as good investments. Then, he kept the money from the return sales of the wormy apples. And then, on top of that, he made money by betting against the insurers he was sticking with these toxic assets.

We all know what happened from there. Bear, Stearns went under, thanks in large part to insane schemes like Verschleiser's, and all of us were forced to pick up at least part of the tab as the Fed spent billions subsidizing Bear's emergency takeover by JP Morgan Chase. In subsequent litigation, Chase has steadfastly refused to buy back the bad mortgages dumped on investors by the likes of Verschleiser, and has even fought tooth and nail to prevent the information in the Ambac suit from being made public.

Ambac went into Chapter 11 bankruptcy in 2010 for a variety of reasons, some of which had nothing to do with its losses in deals like these. But certainly Ambac and other monoline insurers like MBIA suffered for having insured worthless mortgage bonds sold onto the market by the Verschleisers of the world. Ambac in its suit asserted that it paid out over $641 million in claims related to the bonds from the Bear deals. 

With all of this, though, Verschleiser landed happily on his feet. He reportedly heads Goldman's mortgage division now. And after cutting a mile-wide swath of losses through the American economy, helping destroy two venerable firms in Bear and Ambac, bilking the taxpayer for untold millions more (he is also named in a lawsuit filed by the Federal Housing Finance Agency for allegedly speeding bad loans onto securitization before they defaulted), Verschleiser is now living the contented life of a proud family man, renting out a 94-room hotel for three days for his daughter's Bat Mitzvah.

It's certainly heartening that Verschleiser is spending this money on his daughter instead of, say, hiring a busload of Jamaican hookers to spend the weekend lounging with him in a hot tub full of Beluga caviar. People ought to give their children the best, I guess. But there's this, too: at a time when one in four Americans has zero or negative net worth, renting a 94-room hotel for three days for a tweenager party might already be pushing the edge of the good taste/tact envelope. Even for the most honest millionaire in Aspen, it would seem a little gauche.

But for this burglarizing dickhead to do it? It's breathtaking. I hope he at least invited his bankrupted investors to the pool party.

p.s. Since this blog was posted, I've received a number of letters all asking the same question -- how could it be possible that what Verschleiser did is not illegal? How is he not in jail?

The answer is that if the allegations in the Ambac suit are true, it certainly would seem to be illegal. Most notably, the pocketing of putback money almost has to be a form of theft or embezzlement.

The rest of Bear/Verschleiser's scheme, however, is also illegal, but in a more complicated way. If you read the complaint in the Ambac suit, what you see is a sort of extreme blueprint for how mortgage securitization worked in general during that period.

There is a veritable sea of fraudulent and corrupt practices one may gaze upon here, if the SEC were looking for something to target -- everything from withholding material facts from customers and ratings agencies, to threatening ratings agencies with lost business if they didn't overrate bonds, to lying in offering documents, to the manipulation of accounting procedures (this went on after the loans had moved onto Chase's books), etc. -- but the most flagrant violation in the suit involves the issue of due diligence, and here we do know a lot about Verschleiser's role.

It seems that when Bear did do due diligence in these deals, it very frequently overrode the firms they'd hired to do that due diligence, and put the loans in the deals anyway. In the third quarter of 2006, Bear overrode its due diligence firm an incredible 65% of the time, putting loans into their securitizations despite an outside firm finding red flags in the notes.

Even worse, Bear went out of its way to hide the evidence that it was knowingly ignoring due diligence. This is from the complaint:

Bear Stearns ignored the proposals made by the heads of its due diligence department in May 2005 to track the override decisions, and instead took the opposite tack, adopting an internal policy that directed its due diligence managers to delete the communications with its due diligence firms leading to its final loan purchase decisions, thereby eliminating the audit trail.

This is fraud because in its agreements with investors, Bear promised to conduct "due diligence," it promised to conduct "quality control" testing of the loan pools, it promised to "repurchase" defective loans, and it also promised to implement "seller monitoring," i.e. to prevent the securitization of loans from bad suppliers.

But it not only didn't do these things, it engaged the opposite behavior and knowingly covered up its fraud by deleting its communications.

Verschleiser was personally named in the evidence offered in the Ambac suit. In a letter to Ambac, Bear's RMBS Investor Relations managing director Cheryl Glory wrote that "Jeff will... provide you with the due diligence results of all three deals once complete."

But this is the same Jeff who we now have in writing  saying this about those promised due diligence results: "We are wasting way too much money on Bad Due Diligence," and "We're just burning money hiring them."

It doesn't take a genius to deduce that Bear was not upholding its contractual obligations by delivering what it itself considered "bad due diligence" to Ambac. At the very least, this is actionable.

Verschleiser undermined due diligence in other ways. One good one was to demand that his due diligence people operate at speeds that made genuine due diligence impossible.

At one point during these deals, Verschleiser reamed out his immediate subordinate, co-head of mortgage finance Baron Silverstein, over the "problem" of the due diligence department taking too much time to do its work. Silverstein responded by issuing the following tirade to John Mongelluzzo, Bear's VP for Due Diligence, demanding that he not get in the way of Bear's insane goal of funding 500 mortgages a day:

I refuse to receive more emails from [Verchleiser] (or anyone else) questioning why we're not funding loans every day. I'm holding each of you responsible for making sure we fund at least 500 each and every day… I was not happy when I saw the funding numbers and I knew NY would NOT BE HAPPY... I expect to see 500+ every day. I will do whatever is necessary to make sure you're successful in meeting this objective. 

Whenever any right-wing loon, or Bloombergite, tries to tell you the mortgage crisis was caused by the government forcing the poor banks to lend to broke black people, please direct them to this passage. The banks not only wanted to give out these loans, they wanted to give them out at the speed of light. They wanted to crank them out so fast that their own auditors literally couldn't read the writing on the loan applications. This was greed, not policy. Anybody who says anything else is high on something.

Anyway, given that much of Verschleiser's questionable behavior is in writing, his case sure seems court-ready. But for whatever reason, he has not been indicted.

One can almost understand a regulator not wanting to take on the whole circular securitization scheme -- Bear lends money to corrupt mortgage firm, mortgage firm makes bad loans, Bear packages bad loans and sells to investors, then takes the proceeds and creates more bad loans -- because it is so complex and difficult to prove.

But in this case there are simple issues of fraud and theft thatcould be taken on without having to prosecute broader crimes related to securitization. But prosecutors, apparently, just blew those off. In the current environment, regulators even miss the layups.

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