November 28, 2005

Bizzy’s AM Coffee Biz-Econ Links (112805)

Hispanics a Hot Target Group for Banks

I can see it, to a point:

Faced with higher interest rates and a challenging 2006, financial institutions are actively wooing the Hispanic market with specialized products and services, as well as bilingual financial education.

It may not be flowers and candy, but these targeted services — which include remittance products and mortgages based on individual taxpayer identification numbers, rather than social security numbers — can prove to be invaluable in developing relationships with the over 50 percent of Hispanics that are unbanked in the United States.

….. And for banks, worried about squeezed profit margins and dwindling mortgage refinancing businesses, the Hispanic community represents the best way to achieve organic growth.

Two things–One is a dirty little secret and the other is a question I can’t answer:

  1. The secret is that the credit-card areas of the big banks want Hispanic cardholders, because they have found that they are much more likely than non-Hispanics to pay interest and make mistakes that generate late fees and over-limit fees. Aggressive wooing of Hispanics in this area of banking is right on the edge of race-based exploitation.
  2. Regarding mortgages made based on individual taxpayer identification numbers (read: Mexican ID)–How do you price deportation risk into a loan product?

Suing Your Customers as a Business Model

The Wall Street Journal has a come-back-to-earth editorial for an entertainment industry that is still high on its Supreme Court victory shutting down Grokster. It also provides some interesting history on what the industry has tried to do in the past (bold is mine):

The industry has every right to continue this behavior; downloading the new Harry Potter movie or Black Eyed Peas CD tracks without paying for them should satisfy any definition of intellectual-property theft. The more interesting question is whether litigation is the best long-term strategy for combating digital piracy. How viable is a business model based on suing your customers, especially when the lawsuits appear to be having no deterrent effect?

It’s too bad, but history shows that the entertainment industry is much more inclined to fight new technologies than embrace them. Songwriters tried to sue the player piano out of existence a century ago. Vaudeville performers sued Guglielmo Marconi for inventing the radio. Disney and Universal sued Sony for making the Betamax VCR. And cable entrepreneurs over the years have been dragged into court by everyone from television broadcasters to the Motion Picture Association of America. If music and movie moguls had their druthers, they would have monopoly control over any device or platform capable of reproducing sound or pictures.

This is the slippery slope (really a cliff when you think about it): Any successful effort by the entertainment industry to shut down a technology will spawn imitators who will attempt to apply that result to ANY new technology in ANY industry. It will be as if buggy whip makers or horse breeders in the late 19th century could sue the nascent automobile industry. Kiss economic progress good-bye.

As much as I do not support IP theft, I remain irritated that so many recording artists refuse to make their content available digitally. That decision is the equivalent of hanging out a “Get our songs in P2P Land” sign for those who, now that viable digital alternative like iTunes and its competitors exist, simply won’t buy CDs ever again. I also have to wonder if song prices would stay at their currently reasonable 99 cents each for long if the pirated alternative no longer existed.

Environmental Protesters Needed

Memo to The Sierra Club, National Resources Defense Council, World Wildlife Federation, Greenpeace, et al: There’s been a 100-ton spill of benzene that is 50 miles wide at a chemical plant in Harbin owned by a huge oil company:

Benzene, used in gasoline, is a cancer-causing substance. It can cause anemia, other blood disorders and kidney and liver damage.

Water service in the city of Harbin had to be shut off after the spill of around 100 tons, which spanned 80 kilometers (50 miles) wide.

The plant blast, which authorities blamed on human error at a tower that processed benzene, killed five people and forced the evacuation of tens of thousands of others.

Not only that, the company and the government has resisted releasing all of the information about the spill and its dangers to the general public.

Now here’s how you get to Harbin. First, it’s in the northeastern part of China (HT Gateway Pundit) …..

….. What do you mean you don’t want to go? 3.8 million people (HT Drudge) are without water!

What? Environmental disasters don’t matter much unless they occur in the US or Western Europe?


Note: To be fair, the WWF’s China site and Greenpeace’s International home page mention the spill. But this is what passes for tough talk:

“‘WWF is highly concerned about how the toxic spill in Heilongjiang province will impact the region’s people and ecosystem,’ said Dr Li Lifeng, Director of WWF China’s Freshwater Programme, ‘We call upon industries and those who regulate them to work together with other stakeholders to prevent this from happening again.’”

Greenpeace–”The environmental health of China is at risk from the short-term rush for economic growth. Like wise the environmental health of the planet is at risk from the rush for short-term financial gains.”

What? No calls to put executives in jail, sue the evil companies out of existence, or bring capitalism to an end that we would normally hear when a Western company commits even the most minor environmental mistake? Oops-forgot. This is Communist Nearly Free Pass China we’re talking about.



  1. Would you be comfortable protesting in China, given their human rights record?

    Comment by Kevin Irwin — November 28, 2005 @ 9:43 pm

  2. That, and China funds our deficit :)

    Comment by Kevin Irwin — November 28, 2005 @ 9:44 pm

  3. #1 No, but I would have stronger messages on my web site than the weenie ones above that don’t call for any type of sanctions or punishments.

    The question was rhetorical. It’s easier to complain about our overall less serious problems than it is to go out and attack the exponentially bigger ones that would help dear Mother Earth much more.

    I don’t want to think about what might happen if China decided not to buy our bonds.

    Comment by TBlumer — November 29, 2005 @ 12:49 am

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