How to turn $100 million into scrap metal.

This is a symptom of an overly litigious society, I think.  Instead of making a huge insurance claim, Mazda could possibly offset some of the loss by re-selling these cars at a steep discount but without, say, the benefit of a factory warranty.  It seems people are always looking for bargains, but the first time the brakes fail because the master cylinder was compromised will lead to a lawsuit that could cost Mazda a lot more than the loss on scrapping the vehicles (what kind of deductible is there on a policy that will pay a $100 million loss?).  So the company's risk aversion is probably higher than any potential consumers' anyway.

Still it's a little sad to read about nearly 5,000 new cars being ripped apart before they ever see a dealer's lot.  And maybe a bit zen, too:

Next stop: Schnitzer Steel, a salvage yard down on the waterfront that's home to an immense metal grinder. "You turn 7,000-horsepower hammers loose on them, and they're eaten in 10 seconds," says Jamie Wilson, Schnitzer's manager. A bemused smile spreads across his face as another load of Mazdas disappears into its maw.

Moments later, metal shards -- most no bigger than an ashtray -- sprinkle onto a mountain of scrap near Schnitzer's dock. There, a freighter prepares to take the scrap back to Asia where it will get recycled.

Mr. Wilson looks on and concludes: "It'll all probably end up coming back as cars."

Emerging market economy + totalitarian political regime = irony:

Police in southern China have discovered a factory manufacturing Free Tibet flags, media reports say.

The factory in Guangdong had been completing overseas orders for the flag of the Tibetan government-in-exile.

Workers said they thought they were just making colourful flags and did not realise their meaning.

The adventures of a company called Psystar, which is offering Mac clones computers with Mac OS X preinstalled for $399, continue to heat up the tech blogs.  Gizmodo is mostly convinced they're a scam:

Not only does the Miami Chamber of Commerce and BBB not know anything about any company named Psystar (confirmed by reader Travis through his contacts in the chamber), the actual physical address they listed on their website actually changed halfway through the day yesterday.

And it continued to change throughout the week.  Then on Wednesday, the Psystar store was knocked offline when they lost their payment processor, who said that Psystar had violated their merchant account agreement for, among other things, failing to use address verification during the order process.  They're using PayPal for now.

As of Saturday, Psystar is supposedly shipping orders; as CNET's Tom Krazit reported, his credit card has been charged but he hasn't received a shipping confirmation yet.  It would amaze me at this point that Psystar would attempt to scam customers (if that was their intent) with the spotlight turned on them, but I'm also skeptical they can continue to ship computers that obviously violate Apple's licensing agreements, even if they changed the name of the computer from OpenMac to "Open Computer".

This is my first post using Microsoft's new Windows Live Writer.  It's a publishing tool designed to work with multiple blogging services.  You give it the URL, your username and password, and it configures itself for that blog.  You can do all the usual bloggy things you do with other editors: preview entries using the blogs's templates, CSS and so on; upload content; compose offline; etc.

So far I like it except for a couple of things: holding down cursor keys or Backspace (as you might for selecting or deleting text) is a pain in the ass because the program holds the keypresses in a buffer and doesn't execute them until you release the key.  So I can't tell what I'm selecting or deleting.  This has to be the easiest bug in the world to fix.  I could do it if I had access to the source code.

The second annoying problem is tags.  So far all I see is an option for inserting a block of text containing tags linked to a specific service.  That's not what I want; I want to be able to enter my tags so that they're linked to other entries in the blog.  But I don't see any way to simply enter tags that get uploaded along with the entry.

But I've tried it with both my LJ and my other blog, and it seems to work without drama.  Its formatting is different from when I use Semagic's HTML mode (or when I use LJ's editor), but it handles blockquoting better than I do by hand.  And I like having one tool from which I can post to both blogs; Semagic performs better, but it only works with LJ-based blogs.

No, this is nothing to worry about:

Corn prices jumped to a record $6 a bushel Thursday, driven up by an expected supply shortfall that will only add to Americans' growing grocery bill and further squeeze struggling ethanol producers.

Corn prices have shot up nearly 30 percent this year amid dwindling stockpiles and surging demand for the grain used to feed livestock and make alternative fuels including ethanol. Prices are poised to go even higher after the U.S. government this week predicted that American farmers -- the world's biggest corn producers -- will plant sharply less of the crop in 2008 compared to last year.

The cost of damn near everything we eat, particularly meat and dairy, is affected by this.  Pizza prices have gone up, and merchants are offering fewer coupon deals—because their costs have soared due to rising energy prices and less wheat being planted in favor of corn.

Even more carbon is released into the air as Brazilian farmers clear-cut huge swaths of Amazonian rain forest to grow more crops, not to feed people, but to put in our gas tanks.  You don't have to be a member of Al Gore's climate-change church to realize that getting rid of the few natural carbon sinks left on the planet isn't a very wise idea.

The ripple effects will be felt most in developing countries, which are unable to feed their own people as less grain is available for export.  Already tortilla prices in Mexico have skyrockted, and riots have erupted there and in Africa over rising food prices.

The U. S. lost nearly a quarter-million jobs in the first quarter of 2008.  Some of those newly-unemployed people likely won't find work any time soon.  Some of them may go on public assistance, like food stamps.  What will they do when they find that even a $5 stamp won't buy a gallon of milk?

But go ahead.  Keep putting that E85 in your flex-fuel Silverado.  Feel good about keeping our air clean and reducing our dependence on psychotic Muslims for oil.  Keep electing the same whores to Congress, who shovel billions into Archer Daniel Midland's coffers in return for a few pieces of political silver.  Feel confident that we've stamped out hunger here: it must be so if we can turn foodstuffs into gasoline!

This is nothing to worry about.

The Fed bails out Bear Stearns and hands a mighty big welfare check to the man who helped run the investment banker into virtual bankruptcy (HT: Marc Andreessen):

The US taxpayer is loaning Bear Stearns and JP Morgan Chase, Bear Stearns' acquirer, $29 billion -- just revised from $30 billion, simultaneous with JP Morgan Chase raising its acquisition price for Bear Stearns to $10/share from $2.

Without that $29 billion of taxpayer money, [Bear Stearns chairman and former CEO] Jimmy Cayne's stock would be worth $0/share, and if you multiply that by 5.66 million shares, the total would be $0.

The $29 billion taxpayer loan is almost certain to lose money as it is being used to backstop stinky assets on the Bear Stearns balance sheet -- the same assets whose plummeting fall in value catalyzed Bear Stearns' effective bankruptcy.

It is virtually certain that taxpayers are going to take some loss on that $29 billion loan.

When we do, we will have the immense satisfaction of knowing that the first $61.3 million of those losses represent a direct cash transfer from US taxpayers to Jimmy Cayne.

Note that last year, Cayne's holdings were worth nearly $1 billion when Bear Stearns' stock price hit a high of $171.50.  So I guess we should still feel sorry for him.

Bill Gates delivers his last keynote speech at CES as the head of Microsoft, and leaves with a hilarious and celebrity-packed video speculating on what his last day at the office might be like.  Apparently these films are a hallmark of his CES appearances, but not having attended one, I can tell you this is a side of Gates I haven't seen before.  (I have seen him speak in person, at an event at the Temple Buell Theater in Denver, and it wasn't nearly this amusing.)

Fortune is out with its annual Dumbest Moments in Business, and predictably, China leads the way:

During 2007, the Year of the Pig, Mattel is forced to recall almost 20 million items made in China because of lead paint on toy cars and tiny magnets that could be deadly if swallowed. Lead paint problems are also found in 844,000 Chinese-made Barbie accessories and toys with the Sesame Street brand.

Pet food makers recall more than 60 million cans of food laced with tainted melamine in wheat gluten from China. A huge underground distribution network for steroids, human growth hormones, and other bodybuilding drugs is traced to 37 companies in China. Chinese-made lunch boxes, given away by the California Department of Public Health to promote healthy eating habits among children, are found to contain lead.

Nike recalls 235,000 football helmets because the Chinese-made chin cup has a defective strap and has caused at least two concussions and a broken nose. Ethylene glycol is found in Chinese-made toothpaste. The government of China executes the former head of its State Food and Drug Administration.

Rough year for bureaucrats!  Not that I'm particularly torn up about it.

Some other less-than-shining moments in the business world that may have escaped your attention:

• Japanese toilet manufacturer stages massive recall after three of its high-tech toilets catch fire.


• Disneyland plans to revamp "It's a Small World" ride to accommodate heftier passengers after boats start getting stuck under the load; fatties are asked to leave the ride and given coupons . . . for free food.


• The YOUniverse Funk Fone, for little aspiring G-string divas everywhere.


• An episode of Handy Manny on the Disney Channel is replaced by hard-core porn for Comcast customers in New Jersey.


• The European Union promotes its arts patronage by releasing a mash-up of sex scenes from movies it has funded, under the banner "Let's Come Together".


• " . . . a number of prominent [BlackBerry] addicts . . . admit to experiencing phantom incoming-message vibrations even when not wearing their devices."

You can view the full list here.

From Marginal Revolution:

BasePoint Analytics LLC, a recognized fraud analytics and consulting firm, analyzed over 3 million loans originated between 1997 and 2006 (the majority being 2005-2006 vintage), including 16,000 examples of non-performing loans that had evidence of fraudulent misrepresentation in the original applications. Their research found that as much as 70% of early payment default loans contained fraud misrepresentations on the application.

Just . . . wow.  Can an entire industry be corrupt?

I don't know how you can blame all this on the borrowers.  If they were lying somehow to get a mortgage, then lenders were utterly negligent—perhaps criminally so, in misrepresenting the risk to banks—in not checking them out.

Jesus, what a mess.  I hope y'all either rent or have fixed-rate mortgages, in which case I'd hold on to them for dear life.

I starred so many Autoblog entries in Google Reader today that I decided to roll them up here:

UPS is optimizing its "Package Flow" route-mapping software to minimize left turns, which could save it millions of dollars in fuel costs every year by reducing the amount of time trucks sit waiting to make left-hand turns.  (Hopefully they reverse the parameters for their UK and Japanese operations!)

Knight Rider is returning to the tube, and KITT has been reborn . . . as a Ford Mustang Shelby GT500KR.

. . . which most likely will not have these tires installed as standard equipment.  Yes, they actually give off a lavender scent after they're warmed up.  These would be a good for a joke at the drag strip one time, I think.  "W00t!  11.5 ET and he smelled lovely in second gear, didn't he?"

If you paid more than $100,000 for a sports car, wouldn't you want a transmission that, you know, works?  Apparently Tesla doesn't think so; they're having such difficulty building a gearbox that can withstand the full-on torque of an electric motor that they're considering shipping Roadsters with transmissions that they know will fail within a few thousand miles.  The idea of course is that they would be replaced once the beefed-up transmission is ready.  That will be a great source of comfort to the first Tesla owner stranded in the mountains when his car pukes it cogs onto the road.

Skype explains why its VOIP network imploded last week:

The disruption was triggered by a massive restart of our users' computers across the globe within a very short timeframe as they re-booted after receiving a routine set of patches through Windows Update.

The high number of restarts affected Skype's network resources. This caused a flood of log-in requests, which, combined with the lack of peer-to-peer network resources, prompted a chain reaction that had a critical impact.

Normally Skype's peer-to-peer network has an inbuilt ability to self-heal, however, this event revealed a previously unseen software bug within the network resource allocation algorithm which prevented the self-healing function from working quickly.

So Patch Tuesday managed to uncover a bug in Skype's software and brought down its network.  When in doubt, blame Microsoft.  It's bad enough when Microsoft makes its customers pay to beta-test software; it's almost criminal when it beta-tests other companies' software!  Just add it to your list of Evil Conspiracies Perpetrated by the Sith Lords in Redmond.

But this explanation doesn't pass the smell test.  If Patch Tuesday and the resulting flood of reboots and login requests triggered the meltdown, why hasn't it happened before?  It's not like this is the first Patch Tuesday Skype's system has endured.

Furthermore, the default time for the Windows Update agent to run is 3 AM local time . . . on Tuesday.  Skype's network didn't go down until Thursday.  I guess we're supposed to believe that the vast majority of Skype users are not only all in the same time zone, but delayed updates (or at least a system reboot) by two days.  What are these guys smoking?

I'm willing to bet a Dr. Pepper that Skype hosed its own network via a seemingly innocuous software update (it happens), and found Microsoft to be a convenient scapegoat.  Which is puzzling, because it's not like Skype's customers would desert it in droves for this particular faux pas.  After all, the basic service is free.  Maybe it's because they're looking to attract more business users who will pony up for premium services, and they don't want to look stupid.  Unfortunately their half-baked explanation accomplishes just that.

Rolling Stone, that noted bastion of conservatism, has published a scathing indictment of the ethanol scam:

This is not just hype—it's dangerous, delusional bullshit. Ethanol doesn't burn cleaner than gasoline, nor is it cheaper. Our current ethanol production represents only 3.5 percent of our gasoline consumption—yet it consumes twenty percent of the entire U.S. corn crop, causing the price of corn to double in the last two years and raising the threat of hunger in the Third World. And the increasing acreage devoted to corn for ethanol means less land for other staple crops, giving farmers in South America an incentive to carve fields out of tropical forests that help to cool the planet and stave off global warming.

And you thought recycling subsidies were bad.  Up to half the wholesale cost of ethanol is subsidized, and that doesn't count the subsidies for corn itself, which are higher than for any other crop.  And one company more than any other benefits from these subsidies, which total over $5 billion a year: Archer Daniels Midland.  Politicians from Bob Dole to Iowa Senator Chuck Grassley to Democratic Presidential candidates Hillary Clinton and Barack Obama all hype ethanol, hoping to attract ADM's generous political donations, which total $3.7 million since 2000.  Seems a pittance to pay for such a huge windfall of taxpayers' money.

And if some poor Mexicans and Africans starve along the way, or more rain forest is clear-cut in Brazil, or we all start paying $10 for a gallon of milk, well that's just the cost of doing business: our cost for tolerating this dangerous, delusional boondoggle.

Seminole Tribe to buy Hard Rock properties

The nearly $1 billion deal includes the restaurant chain, hotels and casinos, not to mention the world's largest collection of rock 'n' roll memorabilia.

The Seminoles were the first American Indian tribe to get involved in the gaming business, and now tribes nationwide pull in $22 billion annually in gaming revenue, according to the government.

You know what?  I don't think I want to hear any more blather about returning tribal lands or making restitution to displaced American Indians.  Not because they don't deserve it, but because it seems much more satisfying for them to get their revenge via good ol' American capitalism.  What could be sweeter than draining Paleface's pension funds at the video poker machines?

Mark Cuban, September 28: "Only a moron would buy YouTube."

Google, October 9: "Who's the moron now?  And damn, Mark, get a haircut from this century."

Yes, YouTube is about to be swallowed by Google.  And yes, Cuban is a complete moron (perhaps he's just jealous he didn't launch a YouTube first).  This is precisely the sort of legitimacy YouTube needs to avoid being sued into oblivion by copyright holders.  Unfortunately, it could mean that all of the unauthorized material will disappear . . . at least temporarily.  Pretty soon media companies will be falling all over each other to make a deal with Google to show their content.  Including, perhaps, clips of Cuban's basketball team flaming out again in the playoffs.