Altrusism, As Oiled

If there's one thing that really gets my goat it's the idea of "grand old men of Wall Street". I should not really break my posting fast in such an intemperate fashion, and while tipsy as all hell to boot, but I'm bored of this linkage between money and respect. Call it jealousy, call it the fact that no-one achieved anything worth a damn without giving up some money while doing do (note that I include Sam Walton of Wal-Mart among these ranks).

I think about it whenever I hear of a rescue attempt, that rare chance for massive collusion between the big brokerage houses. The gentle deflation of Long-Term Capital Management becomes an act of heroism rather than a well-coordinated, yet craven, attempt to keep the boat afloat.

The New York Times, wedded as it is to making New York's abnormal seem normal, leads the pack. These weird, smart people, they have all our interests at heart. They die, they contribute to charity, notes Andrew Ross Sorkin, the most extreme case of journalistic capture (like regulatory capture, only less dangerous) anywhere in business journalism. That the attempts of those that distort housing markets, allow preposterous restaurants to exist, and give unusually large amounts to political campaigns can be marked down in the same column as these less profligate of us is a wonder of modern political economy that I wish a class war still existed to note them in.

It's not that I believe titans of finance incapable of good. They demonstrate it in their own way by doing incautious things at charity auctions. Just that to slide gently from college to business school to a banking career to a middle age spent dabbling in philanthropy does not make you a saint, for the simple fact that a brutally redistributive tax system can and has had the same effect as a middle age of good intentions, and its much more reliable.

I'm minded of the US Weekly column - Stars! They're Just Like Us - the idea that these imbalances are natural. It's not. They earn the kind of money that launches lawsuits, that fights the march of climate in gardens in Florida.

And I say this not out of jealousy or revenge or any other reason beyond the provision of a warning. There is always a beneficiary, whether a Boston ward-heeler, a savings and loans executive or a silvery-haired legend of structured finance. Bear it in mind when thinking or The Entity, or M-LEC or the Superfund, the vehicle that will keep the light out of the dark corners of the structured finance dungeon for long enough that the principals' reputations can be salvaged without any pain.

I'm minded of old-school Gumby Fresh favourite Christian Baha, the ex-cop who launched the original Superfund. You can still find one of their offices on Fifth Avenue, opposite the New York library. There's something more wholesome about the unalloyed pimping of Mr. Baha next to the worthy self-preservation of the big banks. Maybe Herr Baha caught a fall, but he's no more or less deserving of it than half the equities traders south of 59th street.

K, time for some fluids.

The Filler From Green River

After a brief burst of posting last week, it's all gone quiet. Not through over-work, either. Just listlessness.

In the mean time, here's a recent column from Sugarzine. It displays many shortcomings, but the subject matter, the grip that my generation will soon have on the upper end of the music business, is timely.

After all, look how much Madonna's getting paid...

What's My Name? No Not Terminator X, Some Architect

I haven't said much of late about my own neighbourhood, not because I've left it, but because I've moved location within it, and it's altered my perception of what matters. I spent, along with the too-long absent from this space Mrs Cutesome, most of the year trying to find somewhere to buy. We were very aware of the state of the market, and the heights that valuations in the area have reached. But, we wanted to have full control of our own living environment, and we really flipping hated paying rent to our landlord (all that needs saying about the man is that he thinks that the greatest problem facing the neighbourhood is litter. Not crime, overdevelopment, eminent domain, Marty Markowitz, air quality, gentrification, the democratic party, education. Litter).

So, we spent about five months looking at apartments in an area bounded roughly by Prospect Park/Underhill Avenue in the East, Fourth Avenue in the West, Bergen Street in the North and 3rd Street in the South. And we were quite the goldilocks about it, looking for a decent two-bed, two bath, with maybe a bit of outdoor space, modern fixtures (no time to renovate), and probably a wee bit over 1000 square feet.

We made an offer on a place back in April in the northern part of the above-described box, and weren't prepared to increase it as part of a bidding war. The apartment, while absolutely lovely, was a little too close to the Atlantic Yards project, about which you can find rants of varying degrees of coherence scattered around this blog like phlegm on a colonel's wife's face. Wasn't the noise from construction (about which more later) that bothered me, so much as the nagging feeling that vast, empty, badly-designed developments have unpredictable effects on their neighbours. There was also the worry that the neighbourhood's best amenity, Freddie's, is under imminent/eminent threat of demolition. Or, to put it more directly, and crassly, fun and future property values.

Please excuse the flippancy, and I have really loved living in about three different locations around the centre of the Atlantic Yards, but its very hard to put down roots in an area, and become either a force for good or bad there, if the entire neighbourhood has been dumped in the hands of a myopic property developer with a failed vision and not enough equity at stake in the deal to make sure it isn't awful. It's now his to uplift or, more likely, recreate Metrotech

So we upped sticks for a centre slope condo building, not one of the ones directly on fourth avenue, but one close nearby, and of, I should note with shame, not a gigantic amount of architectural merit. But it's light, comfortable, the neighbours are pretty nice, and the nearby bars and restaurants on fifth are pretty good.

It is, though, pretty close to the heart of the boom in condo construction on Fourth Avenue. The cat finds the constant activity enormously entertaining, and while the area may eventually become the "Park Avenue of Brooklyn" several commentators would like it to be, right now its just a bunch of scaffolding wrapped shells thrown up with varying degrees of enthusasim.

Take the new development going up round the corner from me on Carroll and Fourth. Kind of a stop-start one, not helped by the recent change in architect. Indeed someone claiming to be the previous artchitect linked the troubles at the site to his replacement, though the project seemed to have succumed to an order to stop work before said architect was replaced. The reason he's not being mentioned by name, though you will find his name by following the first link this paragraph, is that he's an inveterate self-googler and I don't have time to deal with his missives.

Here's a picture of the sign with the name of the new architect at the site, though I'll note that since then there has been a fair amount of new ground work at the site.



I guess what I'm driving at is that this little boom is manageable because it's relatively small-scale, short-term, and only has the potential to scar a corner of one block at a time, rather than a whole neighbourhood. Not sure Mr. Ratner could say that - guess that's why they call it Develop Don't Destroy. Tain't so much the condos as the thoughtless vandalism on a massive scale.

Oh well, just another tired and unfocused missive from an unreprentant gentrifier. Still smug about the neighbourhood, though

Not Within My Ambit

We recently changed phone service provider to Time Warner Cable, from Verizon, and I have to say the change has been worth it. You get free caller ID, free long-distance, and the call quality seems reasonable, much better than I was getting out of skype, which just seemed to result in me making heavy breathing calls to the ones I loved.

But I'm not here to talk about phone providers, I'm here to talk about electricity providers. See, with the change in phone provider came two calls from telemarketers. The second was from the Fraternal Order of Police, and since I like living dangerously I sent him packing with a flea in his ear.

But the first was from an outfit called Ambit Energy, wanting me to make them my electricity supply company or ESCO. New York, you see, has mandated full retail competition in electricity, which means you get to decide which company supplies you with electricity. Well, the incumbent utility, ConEd, supplies you with it, keeps owning the wires that carry it into your house, bills you, and still owns a fair bit of generating capacity in the city.

The ESCOs basically go out into the spot market for power, or contract for it, and then resell it to you using the billing infrastructure of ConEd. It's rather complicated, and kind of involves the consumer trusting the ESCO to be super smart at scoring its own electricity at a good price and passing on the savings to you. If you're asking questions like "how can you tell which electricity is yours, or the neighbours?'" or "how can you treat electrons like yoghurt or gasoline?" you're not trying very hard to understand the wonders of deregulation.

I, though, was very excited because I'd missed all of the reps that IDT Energy carpeted Brooklyn with earlier this year, and I've been itching to debate deregulation with them (I'm an electricity markets nerd). Unfortunately, the gentleman that spoke to me decided he would need to pass my questions on to a supervisor and I had some bolognese sauce burning, so we had to end it there.

So I googled them, and got a rather boilerplate website that listed the management but not the ownership and so forth. This, I'm starting to think, is fairly common for energy supply companies right now, a few guys in a room with a reasonably snazzy website, a background in selling phone service, and a bunch of unanswered questions about what generators they buy their electricity from and at what price.

To Ambit's credit, its representative said upfront they'd offer me a guaranteed 7% discount for the first two months, but didn't promise anything after that period. Moreover the company that sells them power, Coral Energy, is a subsidiary of Shell and, in my experience, a pretty smart bunch of guys. I probably would buy electricity from Shell, since it controls some pretty ginormous reserves of gas, one of the main fuels for power generation in New York City.

Then I did a blogsearch, and all manner of strange third-party websites came up, including a myspace page, and quite a few craigslist postings, including this one. I'm reproducing the text below:

AMBIT ENERGY HAS ARRIVED FOR NEW YORK CITY YOU CAN SELL ELECTRICAL POWER TO RENTERS AND HOMEOWNERS AND GET PAID RESIDUAL INCOME MONTH AFTER MONTH FOREVER FOR JUST ONE PERSON SWITHCHING YOU KEEP GETTING PAID AS LONG AS THEY KEEP PAYING THE ELECTRIC BILL!!!YOU SEE EVERYONE HAS TO HAVE ELECTRICITY!!!THIS ROCKS GO TO MY WEBSITE AND JOIN AS A CUSTOMER AND AS A MARKETING CONSULTANT SO YOU CAN SELL THE POWER AND GET PAID FOR IT www.powertripp.ambitenergy.biz

Visiting the above-mentioned site I see it has graphics that are very similar to Ambit's page, but a little note that the site is hosted by a private individual.

An investigation into IDT by the Consumerist highlighted the background of several of the sales reps for IDT in multi-level marketing, and some similar sales tactics to those used in multi-level marketing. But IDT, as far as I could tell, paid people commission for getting people to sign up to its service and that was that.

Ambit is fairly frank about embracing the direct sales model. It charges its consultants $399 to sign up, and another $19 a month for a website. I'm guessing that these fees will go some way to funding the 7% two-month discount.

I'm not certain that describing it as pyramid selling is not going to get me into trouble, so I'll just say this: if participants in a deregulated energy market seem to spend more time cooking up louche sales tactics than explaining how they are going to get hold of your electricity, you might want to rethink the whole thing.

The similarities with telecoms are non-existent. Firstly, you can live without telephone service, sometimes for months at a time. Then there's the fact that it's fairly east to get hold of flat rate telephone service plans, but a lot harder to do it for electricity. A bored and snotty jackass like yours truly can be bothered to ask questions about how an ESCO goes about doing what its being paid to do (note I didn't say business model, because I'm not sure that it's supplying electricity that's making Ambit's founders rich). What are the odds than anyone else wants to?

Burma Foiled?

More today on Burma, because I'm coming across another meme with respect to the latitude that the country's ruling thugs enjoy to brutalise their people, and I'd like to qualify it a little. Yesterday I looked at the "internal affair" theme that China has draped over discussion of the situation, and looked at some of the reasons why China was getting away with peddling this nonsense. Looks like I'm back agreeing with Christopher Hitchens, who suggests that we boycott eh Olympics next year*.

Today's theme is that Burma enjoys such natural resources that it enjoys a degree of impunity from those that want to exploit these resources. You'll find this idea expressed here in the New York Times, as well as in the FT. You could also find a California jeweler urging that we boycott rubies** on the World Service's irritating Global News podcast this morning.

I'll leave rubies to one side, though I was impressed to learn that the wee little red blobs bring in just south of $300 million to the junta per year.

The gas, though, is an interesting one. Bruma has plenty of it, and may have a little oil, though too little to be of much consequence to anyone. The gas, though, is in decent quantities, and fires 20% of Thailand's electricity production (I'm guessing a little less of its capacity, on the assumption that Thailand uses hydroelectricity and diesel generators to serve peak demand.

Still, here's the cool thing about gas, as opposed to oil: a supplier is as much dependent on the customer as the customer is dependent on the supplier. Probably a little more so. Thailand, while it finds in Burma a cheap and convenient source of gas, could possibly find gas through pipeline capacity from Malaysia, and maybe even Vietnam.

Burma, on the other hand, knows that its entire gas export infrastructure is designed to supply gas to one country. there are no alternatives. You can't just plonk it in a tanker and send it to another country with suitably low human rights standards. The ability to do that, to liquefy gas, requires knowledge capital, and time, and probably right now only the French have the nerve to supply it. After all, it was French firm Total, as well as some US firms, that built the pipeline between Burma and Thailand.

So when the military leadership of the Thais says this:

But the bottom line, Thai officials say, is that Thailand is competing for the world’s energy resources, and if it doesn’t buy the gas, someone else will.

They're not being entirely honest. In the time it takes to build alternative export projects, assuming the Burmese could get the financing together, it might have grown rather difficult, in the absence of gas revenues, to keep the junior officers in the style to which they've become accustomed.

Still, to say that the Thais can exert leverage over the Burmese is not to say that they will, nor that rejecting Burmese gas would not cause some hardship. Thailand used to be able to buy cheap power from Vietnam, but Vietnam now needs that itself, and there's only so much of the Laos highlands that can be dotted with hydroelectric plants. Rejecting Burmese gas would at the very least increase power prices, and the Thai government, which hardly enjoys massive legitimacy itself, is unlikely to allow a situation to develop that might threaten its own hold on power just to try and bluff the Burmese regime into surrendering power

So, this is just my way of saying that the lead times for energy infrastructure construction are such that if Thailand felt like taking down the Burmese regime, or maybe was compensated with cheap diesel for doing so, it might be able to do it. Very hypothetical, though, I'll grant you, and if the poor Thais decided to stop bringing gas into the country they'd probably have to keep paying the pipeline operators regardless. Nasty.

*Here's Hitch:

Meanwhile, everybody is getting ready for the lovely time they will have at the Beijing Olympics. If there could be a single demand that would fuse almost all the human rights demands of the contemporary world into one, it would be the call to boycott or cancel this disgusting celebration.

The odd thing is, there's a pretty good argument for boycotting all Olympic Games on the grounds that they're a gaudy and pointless exercise in turning over perfectly good landscape in one corner of the world or another. In my humble opinion we'd have kept China out of both the WTO and the Olympic club until it had fixed about 100 different things that keep it menacing its neighbour's security and ecology, and its own people's long-term wellbeing. But that time is past, and I am digressing, if only in a footnote.

**Again, I find little objectionable in boycotting all rubies on the grounds of extreme gaudiness and impracticality, but if I ruled the world all jewelry would be fashioned from aluminium, so I am hardly objective here.

The late, slightly great, Denis Thatcher is pictured here because he was once a director of Burmah Oil, though, I should note, only joined the company a few years after the Burmese government nationalised Burmah's assets in the country.

Burma Roiled

Depressing news from Burma, this evening, more than enough to put Los Mets into perspective.

Well, not so much depressing as wearingly familiar. Another bout of protests against the monstrous military regime that rules the place dispersed through violence, secrecy and indifference. Mostly because the framing got all messed up.

The BBC World Service recently replaced its short, sweet, informative, 5-minute news headlines podcast with something called "Global News", which I'm praying they didn't focus group. Global News, rather than giving us 12-15 stories laid out as clearly as possible, we get five or six stories, stretched out over 30 minutes with rather flabby interviews, sort of like an inconsequential Today (no, not the one with Matt Lauer).

The edition I sat through on the subway a few days ago (yes, dated, it's taking me a while to get back to this blogging thing) featured the anchor spending a long time baiting a Burmese opposition leader into admitting that wasn't this an internal matter and as such nothing for the international community to get fussed about.

I'm starting to think that the biggest beneficiary of the Iraq war was not Iran, which could very likely suffer from another revolution soon, but China. We'd got into the habit during the late nineties of looking down our noses at some of the Chinese regime's sillier rhetoric. Clinton's bombers accidentally bombed the Chinese embassy in Belgrade, with little serious consequence.

Various ham-fisted interventions in the affairs of small European and Asian countries followed, and the most that the Chinese could muster was a series of threats against Taiwan that never rang hugely true because of the role that Taiwanese capital played in supporting industry on the mainland.

Since then, I should note, China gained admittance to the World Trade Organisation, its domestic capital markets have taken off in a big way, and it has mastered the art of buying control of natural resources in otherwise ropey locations.

But if anything revived credence in China's dour "this is an internal matter" mantra it was the Iraq war. It is now very hard for a sane person to talk armed intervention (of the sort, it should be noted, that in the hands of Vietnam ended a genocidal regime in Cambodia) in any regime no matter how ghastly.

I'm sure you'd all love to know how China got into the position whereby it can say to anyone demanding accountability from the Burmese government "you must not intervene in the internal affairs of another country" Well, if you must ask, it was invited into Burma by the British to help eject the brutal Japanese occupiers.

I've been reading recently, and entirely coincidentally, Viscount Slim's account of his campaign against the Japanese in Burma 1942-45, Defeat Into Victory. Once I'm done, I'll tell you more about it. Still, what can be gleaned from the first coupla hundred pages is that the British, in no position to be choosy, and the Chinese, in no position to turn down a means of taking on the Japanese, formed a rough but durable alliance.

Burma's history after that campaign can be described with the benefit of a series of Chinese interventions, some more subtle than others. Now, but its abject political and economic dependence on China, Burma can only be described as a Chinese client state, something even Mongolia has mostly avoided doing. China's aversion to meddling in Burma's affairs really means its aversion to meddling in its affairs. Still, meddling is now very unfashionable. Thanks, Dubya.

Anyway, 2001's over now. Time for bed.