August 16, 2006

Mideast Fauxtography and Reporting Bias Update

A very small sample from a very large universe:

  • The Strata-Sphere is on to rampant photo staging (HT e-mailer Larwyn), including the appearance of professionally produced “Made in USA” banners.
  • The vacationing Michelle Malkin got this keeper of a column out before she left. It’s a great fauxtography overview and scathing critique of WORM nonchalance about all of it.

Giving Away a Used Computer: Wipe It

Filed under: Money Tip of the Day,Privacy/ID Theft — Tom @ 2:24 pm

The BBC has the news about something a few MIT students discovered several years ago — when you delete the information on and reformat a computer’s hard drive, you don’t really get erase all of the information:

UK bank details sold in Nigeria
Monday, 14 August 2006
Bank account details belonging to thousands of Britons are being sold in West Africa for less than £20 each, the BBC’s Real Story programme has found.

It discovered that fraudsters in Nigeria were able to find internet banking data stored on recycled PCs sent from the UK to Africa.

The information can be found on a PC’s hard disk, which is easy to access if the drive is not wiped before sending.

Anti-fraud expert Owen Roberts said simply deleting files was not enough.

Users should instead use a programme to wipe their hard drive before they sell or give away their PC, a process which over-writes what is already contained on the drive.

Alternatively, people should remove their hard drives before they give away their computers, he said.

“It is surprising how easy it is to obtain documents people leave on their computers,” said Mr Roberts, who is head of identity fraud at CPP Group.

Real Story found that second-hand computers from all over the developed world could be found in virtually every PC market in Nigeria’s commercial capital of Lagos.

It said that while there was a genuine market for second-hand PCs in West Africa, identity fraud was a real problem.

Many of the PCs it found on sale in Lagos had come from UK council recycling points.

People are still being urged to give away their old PCs, but only after they have wiped the hard drive — not just to remove any bank details but also other personal information such as home addresses.

In the Windows world, a “programme to wipe (a) hard drive” means purchasing a third-party “utility” program such as Symantec’s Norton Utilities, or similar products from the likes of McAfee and others. The Windows operating system does NOT have a wipe capability (thanks to frequent commenter Kevin for that information). All versions of the Mac OS above 10.2.3 have something called a “Zero Data Option” that accomplishes a complete hard drive wipe; Mac users with earlier OS versions also need to buy a utility program to accomplish a true wipe.

Complete wipes often take as long as a couple of hours, but considering what’s at stake, the time involved is obviously worth it.

Family Minority Ownership with Voting Control: Another Reason Why Ford May Not Be Able to Turn Around

Filed under: Business Moves,Economy — Tom @ 11:23 am

An Associated Press article on Bill Ford’s lack of vulnerability to losing his job at Ford Motor Company reveals something I wasn’t aware of, never having owned Ford stock, and which, if I were a Ford shareholder or creditor, I would be very concerned about:

CEO Bill Ford must be worried, but since his family owns a controlling block of the automaker’s voting stock, chances are he isn’t all that concerned about his job status. A dual-class stock structure at Ford means the descendants of founder Henry Ford run the show, and mostly don’t have to answer to other shareholders.

It’s an interesting contrast to what has happened at Ford’s crosstown rival, General Motors Corp. That automaker faces a similarly dismal financial situation, but CEO Rick Wagoner has had to justify his leadership in the face of intense shareholder scrutiny.

The Ford Family Trust holds nearly 71 million shares of Class B stock, and those shares get about 17 votes each compared with the one vote per share given to other investors, bringing its voting power to 40 percent. The family also is represented on the 12-member board, with Bill Ford as chairman, while his cousin, Edsel B. Ford II is a director.

“No one can throw him out, and nothing has to change unless the Ford family wants it to happen,” said Gerald Meyers, the former CEO of American Motors who now teaches leadership at the University of Michigan’s Stephen M. Ross School of Business.

That reality has left the rest of the shareholders with few outlets for their displeasure as Ford’s shares have tumbled, now trading around $8 each from about $10 at the same time last year and $13 in August 2004.

Cushy family-control situations might be acceptable when times are good, but in tough times, they can hinder management from doing the things that have to be done. Yes, the family takes the hits to share prices as much as everyone else, but family managers too often tell themselves they can turn a ship around well after it’s been shown that they’re not up to it, and when what’s really needed is a new (non-family) person at the helm.

Other examples of this problem can be found in the media business, where the New York Times and Washington Post Co. have similar family control structures (see Update 3 at this post from last year). Both companies have seen their share prices tumble (NYT by about 60% in three years, and WaPo by about 25% in 2 years), and their formerly untouchable industry leadership positions jeopardized.

In Ford’s case, moving away from its insular family set-up may be a prerequisite to the company’s survival.

Pretending to be Precise, When There Must Be Plenty of Imprecision

Filed under: Economy,Taxes & Government — Tom @ 9:45 am

The Bureau of Labor Statistics is thinking about reporting inflation data out to three decimal places:

The government is considering providing more information each month on its most closely watched inflation gauge as a way to dampen financial market volatility.

The Bureau of Labor Statistics is exploring a change to its Consumer Price Index that would provide details on inflation out to three decimal places instead of just one decimal place currently, BLS official Patrick Jackman said Monday.

If BLS officials decide to make the change, it could take effect as soon as next year with release of the January CPI report, Jackman said.

….. Financial markets have been roiled in recent months by the CPI report, especially the figure on core inflation, which excludes food and energy.

The core CPI has risen by 0.3 percent in each of the past four months, a jump from the 0.1 percent and 0.2 percent readings for the previous 12 months.

That uptick in inflation pressures has raised worries on Wall Street that inflation could be getting out of control, especially after Federal Reserve Chairman Ben Bernanke noted the acceleration in the CPI price measure in a speech in June.

However, private economists argued that some of the 0.3 percent readings were overstating inflation and would have looked less worrisome if the government presented the inflation numbers out to three decimal places.

For example, an increase in core prices of 0.249 percent would round to an increase of 0.2 percent while an increase of 0.251 percent would be rounded up to 0.3 percent.

While the minor month-to-month rounding issues don’t have much impact on how inflation is reported for a longer period of time such as 12 months, the numbers do have impacts, especially in financial markets, over a shorter period of time.

Based on the markets’ hypersensitivity to single tenths of a percent, I can understand the idea that the BLS might want to move to two decimal reporting if, as it appears, they have the data to support it. They can do whatever they need to in the background, even using three-decimal calculations, while only reporting two.

But reporting to three decimal places assumes a level of precision in measuring prices in a $13 trillion economy, with billions (if not trillions) of transactions every day, that I would think can’t possibly exist. I can see how BLS might be able to tell us with a straight face that inflation was .11% in a given month and not .12%. But I don’t think there’s any way they can tell us with any kind of confidence that inflation was .115% vs. .116%. Nobody’s that good, and the BLS shouldn’t pretend to be. Looking at how they subsequently have to revise their figures is evidence enough that going out to three decimal places in reporting would be a mistake.


UPDATE, August 19: Commenter 3 tells me that BLS doesn’t revise CPI. Comment 4 explains why I thought they did. The last sentence of the original post above has been crossed out for that reason.

UPDATE 2, August 20: Here’s what BLS decided to do:

Beginning next year, the government’s main inflation gauge will be more precise, a change officials hope will limit financial market volatility.

The Bureau of Labor Statistics said Wednesday it will publish the Consumer Price Index and its component indexes out to three decimal places, rather than just one decimal place, starting with the January CPI report that will be released in February 2007.

Officials said the change is being made so that financial markets and agencies such as the Federal Reserve will have more information on price changes.

BLS official Patrick Jackman said by making public the more precise index figures, those interested will be able to do their own calculations of the month-to-month percent changes.

Financial markets have been jolted in recent months by the CPI report, especially the figure on core inflation, which excludes food and energy.

The core inflation increase reported Wednesday for July was a more moderate 0.2 percent. But that came after four straight months when core inflation was rising by a more worrisome 0.3 percent each month.

Private economists argued that some of the 0.3 percent readings were overstating inflation and would have looked less threatening if the government had presented the index figures on which those readings were based out to three decimal places.

An increase of core prices of 0.249 percent would round to an increase of 0.2 percent while an increase of 0.251 percent would be rounded up to 0.3 percent even though there was little difference in the two figures.

Bizzy’s AM Coffee Biz-Econ-Life Links (081606)

Free Links:

  • First, there was Road Rage. Let me be the first to coin a term for this (HT Drudge)– Line Rage.
  • Brussels Journal Update — Stanley Kurtz defends the Belgian publication (covered previously here at the link’s second-last item), and notes that the outcome of the continued intimidation by the Belgian government is not consequenece-free (HT Instapundit):

    The Belgian government needs to understand that a number of people here in the United States are now carefully watching the outcome of this case. Should government harassment of the Brussels Journal continue, should Paul Belien and/or any of his collaborators be punished in any way by the government of Belgium for the public expression of their opinions, and above all, should the Brussels Journal be shut down, the government of Belgium should know that this issue will not simply disappear. On the contrary, it will become a great deal more prominent, and will surely affect the attitudes of the American people toward the government of Belgium and the people of Europe.

    That is already happening.

  • In the midst of an editorial about whether convenience stores are crime magnets, The Toledo Blade’s editorial board reveals a Catch-22 outrage:

    Beyond the general public policy question, however, opposition to convenience stores should not be used to retroactively destroy the business of a certain central-city carryout that has been in operation successfully for the past two years. City officials say the Spot Mini Mart in the 800 block of Dorr Street was mistakenly allowed to open in 2004 because of an error by a city planning employee.

    The owners of the store should not be required to sacrifice their $250,000 investment because of a mistake by a city bureaucrat, one for which they bear no responsibility. Absent a proven threat to the public health or safety – which no one has shown so far – the summary closure of a business is unfair and punitive.

    Two years ago, the Spot was allowed to open without a special-use permit that would have required approval by City Council. City officials say this was an oversight by a planning employee who has since retired. When the mistake was discovered, the owners were required to apply for the permit, which then was denied both by the plan commission and, last week, by Council.

    Absent some sort of proof that the retired employee was “influenced” to do what he or she did, this business forfeiture is a total outrage.

  • In a step to address a Big Two car company problem I mentioned near the end of this post, Ford is reducing its number of dealerships.
  • Dell is recalling over 4 million laptop batteries that are fire risks (complete details of which batteries are involved are at the link) — One columnist whose column I lost track of thinks Dell may suffer a customer backlash from this. He’s probably right, even though Apple has had at least two major battery recalls that I am aware of in the past few years that, when considering the company’s size relative to Dell, were at least as significant. Both recalls got very little press, though, because the business media tend, for whatever reason, to give Apple a pass (I say this as a 21-year Mac user). And it’s not because they ignore the company, as gushers like this following the company’s recent Worldwide Developers conference show:

    With each detail, the throng of 4,200 predominantly software engineers attending Apple’s annual Worldwide Developers Conference at the Moscone Center in San Francisco gasped and whooped. Cameras flashed as Jobs commanded the blue-hued stage. All that was missing were the models.

  • Speaking of Apple, this is ridiculous (HT Business 2.0 Blog) –

    Apple has laid legal claim to the word “Pod,” arguing that other companies that use the word as part of their product names risk infringing the trademark of its popular iPod music player.

    The legal campaign, which in recent days has drawn challenges to products with names such as Profit Pod and TightPod, reflects a broader attempt by some of the most successful consumer technology companies to prevent their best-known product names slipping into common useage beyond their control.

    An example of one such letter to the maker of an arcade industry tracking product is here (HT Daily Tech). Next thing you know, peas are going to be under a court order to grow in something else.

Positivity: “Smile Packs” from Avis, Procter & Gamble

Filed under: Business Moves,Positivity — Tom @ 5:55 am

Travellers who need toiletries and other items lost in the airline security confusion caused by last week’s developments in London can rest a little easier if they’re renting a car from Avis. Other businesses are also stepping in (and some others surely will in response to what their competitors are doing):

Avis, Procter & Gamble Giving ‘Smile Packs’ to Fliers
Tuesday , August 15, 2006

CINCINNATI — Travelers stripped of carryon toiletries because of heightened airport security will find a consolation gift when they pick up Avis Rent A Car vehicles in the nation’s major airports.

Cincinnati-based Procter & Gamble (PG) has donated “smile packs” with its Crest toothpaste, mouthwash and floss that Avis will leave on the front seats of cars at 25 U.S. airports starting Wednesday, Avis spokeswoman Susan McGowan said.

She said P&G contacted the rental car company Friday to discuss a partnership, in reaction to the stepped-up security that dramatically expanded carryon bans in the aftermath of a thwarted plot to blow up U.S.-bound planes using liquid explosives.

“It’s the least we can do after a long day of travel and losing products that you’ve paid for,” P&G spokeswoman Tonia Elrod said.

She said the packs are full-size products, not travel sizes, worth a little more than a total $10 each at retail stores, not including P&G’s costs for shipping them. Elrod said at least 25,000 packs are being shipped initially.

“It was something that was put together very quickly in response to what travelers are gong through,” McGowan said. “This will save them a trip to the store; just something nice to do.”

Some U.S. hotel chains also are offering more free toiletries to help soothe travelers.