Kiva is a bunch of predatory goatfuckers

It’s actually pretty rare that I call out a site for being totally deceptive for what it claims to be about but when I saw Kiva.org on Hacker News, I figured it was a good way to make some dime while helping out the world.

The premise of it is great – you lend someone money using the USD as principal leverage, they get money they need, they pay you back. Its even better when they point out that you’re helping out people who generally live in third world countries. Your $25 USD investment turns out to be several thousand dollars for their local economy. More on the point – you’re cutting out the middleman. If everyone complains that stuff is “sooooo cheap” in china, now you can lend the chinese money to buy cheap stuff and improve their lives. Seems great, right?

Well, people who are reading at home should realize something. It’s $25 to you. It’s what the guy needs to open a business because he needs several thousand in his local currency to do it. But this also means that he needs to repay several thousand of his local currency plus the interest rate and fees to pay back the loan. If their local economy is so bad in the first place, what’s the likelyhood of this being a good idea for them or even feasable?

The second problem is revealed in the model on the site – you don’t get back USD, you get back “kiva kredits” or somesuch. It’s not actually money. People are currently decrying paypal and microsoft for the evils of fiat currency, why would you rope someone having financial problems in the third world into it? It’s just silly. If you’re feeling like a nice person or trying to make up for the karmic debt of the holocaust, you can actually make the loan an donation. This absolves Kiva of actually having a real economy and your money is lent to someone at interest and just stops existing. It’s all the trappings of a payday loan but you can feel good doing it.

Another rub? There’s nothing that prevents this from becoming a payday loan. You can’t actually see the terms of the loan or contact the people accepting the loan to know if they’re paying 1.33% or 133% on the money. Most of these people are happy pictures of families who need money, but the fine print on some of them is that you’re lending money to money lending institutions in a for-profit format. Think about that for a moment, we’re passing regulatory fees and loan principals and such onto another institution to tack on their own fees and such to stick it to these corn farmers in post-apartheid Africa. There was a movie about it called “Tears of the Sun”. Bruce Willis died for such stupidity.

Finally the worst of the worst? The last line at the bottom of every page: “Kiva does not guarantee repayment nor do we offer a financial return on your loan.” (emphasis mine). Not only are they going to fuck people in Africa but you don’t even get a piece of it.

The Internet is a Cellphone

The last post I wrote was a lament that the internet-as-a-cellphone wasn’t being fully explored from a technological standpoint.

Today we have the opposite problem: The internet-as-a-cellphone is being legislated as a cultural standpoint. Specifically, Domain Seizure has become the tool of choice to shut down “infringing content”. What is this content? Movies, games, pirated apps, etc.

How did we get here?

The old mode of piracy required a fair bit of infrastructure. A person would typically mail some money though the snailmail and they would typically get a stack of CDs or floppies in return with cracked apps and games on them. Things plunked along this way for a good while as the popularity of usenet declined due to AOL and eventually things went viral to the point where IRC was the mode of distribution. The IRC bots evolved to the point where if the bot didn’t have the software you were interested in, groups had agreed to cross referencing to other bots. The decline of USENET and the rise of IRC corresponded roughly from RadioShack and Circuit City not selling software or parts anymore to advertising software being pre-loaded on the pirated applications.

The movies thing I don’t think anyone saw coming. VHS piracy was as simple as going to blockbuster and renting whatever you wanted for $1 and then going home and wiring up the VCRs. As media moved into the digital realm, it meandered back to mail order DVDs (or the guy on the street corner selling questionable copies in strange languages), CD-Video (popular in asia, never here), MPEG copies on IRC, and the unfortunately named DivX video codec. DIVX players attempted to stem the tide with their dial-up DVD service but I would guess most of them ended up cracked.

Let me digress for a second and point out we forget who or what came before. The chinese looking to circumvent the firewall could learn oodles from the old US piracy market. How many books fit on a DVD? Actual text, I’m talking about, not ebooks. How many cameras come with an SD card now? Who checks all these things versus how much electronic stuff moves in and out of china? The great firewall doesn’t currently censor email as I recall, what about a wget service or a newsnet service with UUENCODED files? This is how the US used to do it and people wrote special mail handlers to reassemble these files, it would work in china. Its how it used to work. I had a DXR2. I bought it after my alpha died with which I used to rip DVDs. Nostalgia.

Somewhere along the way someone figured out the space requirements even for compressed, pirated materials (movies, games) was somewhere around 4GB.  Things plodded along at the 4GB limit for a bit and the movie industry responded by packing “HD Content” into 9GB DVDs with double layers, and finally the whole weird push to blu-ray and HD-DVD came around and blu-ray won because Sony’s pockets are deep enough to pay for a loss leader like that.

Suddenly, things came full circle. TV stalled. Gimmicks for TVs haven’t impressed consumers much because who cares about 3D content if it’s not on demand. Movies suffer the same problem. The issue is the world simply got busier. No-one has a two hour chunk of time to go to the theatre anymore. We don’t even have time to take books off the shelf. Why should we? We read books on our laptops, then the laptop became a tablet, than the table became an ebook reader, then the ebook reader stopped existing and became software on a cellphone. We scaled up the cellphone screen to a tablet again, but these new tablets had enough bandwidth and CPU to do something interesting – they could surf the web, and they could watch video. How big is the new HD AVATAR? 1.2GB. How big is the new HD INCEPTION? 1.4GB. This for full, 1080p content. Samsung said as much with it’s cellphones with the screen, but more importantly the line-out to your actual TV.

This is the other side of the convergence that the new internet is a cellphone.

Now we look at Megaupload and GMAIL and such and 8GB is the norm. 8GB used to be just under what it took to store a DVD. Now 8GB is just enough to store 7 full movies. What’s important is that it’s the norm. It’s an artefact from a time when things were bigger and they could be bigger because we weren’t trying to consume content down small pipes. The movie companies know this but how could they legislate how much storage a particular user has? YouTube doesn’t even care. GMAIL? Why should they make it smaller? MegaUpload? 200MB, but how hard is it to keep a list of 5 URLs to unpack a RAR of a movie? Therein lies the problem. This is basically a bandwidth problem versus a content control problem. Since they (the MPAA/RIAA) can’t control the bandwidth they’ll try to control the content. What’s the best way to do that? Take away their cellphone. One man’s ZIP is another man’s video-codec, what’s the difference between cat and zcat? Compression, but they work the same way. The MPAA/RIAA already subscribes to this new model where the internet is a cellphone, and so everyone crying FREE SPEECH over the whole seizure of URLs doesn’t get it.Taking away a sites URL is like taking away their cellphone. It doesn’t impinge on their free speech, it just takes away the radio tower. Get another cellphone, learn the IPs. Your OS has a hosts file for a reason. It’s no biggie.

Just for reference: I do believe the megaupload files were seized improperly. I think everyone who was using it as a legitimate document repository should sue. I just don’t think the URL seizure is illegal nor amoral and reveals a profound misunderstanding of how the internet works.

The Return of Toxie

NPR has a new story – The Return of Toxie. For those not in the know, they bought a portion of a mortgage they assumed was a toxic asset and followed it into the ground. It was pretty hilarious to read – If I remember correctly it was a B rated bond but had so few details on what the applicant actually did for a living that it was hard to tease out if s/he did anything at all.

Predictably, the loan went south.

Now, for people following the story, it looked like these guys lost their cash and that was the end of it. They put $1000 in, they could have gotten $75,000 out at the end of the 40 year term, but since the borrower never paid they were left with $500. Here’s where things get hilarious – some lawyer somewhere decided to sue the loan originator (Bank of America) by saying the loan wasn’t properly vetted so they misrepresented the investment. OK that’s reasonable and it’s what the SEC does by itself all day every day.

What makes this really neat is the potential this has on the market. They’re only in $1000. There’s people into this several thousand. There’s people into this tens of thousands. Because of the way mortgages were bundled, this is a multi-million dollar automatic class action lawsuit.

If you remember the head scratcher that was the bank bailout, it’s not like anything actually happened. The houses still existed, some notion of money changed hands, and the banks stayed afloat. Where did the money go? Where did the assets go? Well, the banks now have a pile of houses on the books, but for the most part they’re no-ones hoses with the government buying the guarantees to the toxic assets. In other words, the banks got what amounted to free money by selling these assets to the government at face value but if you had the script, you lost your money. Too bad. The government doesn’t bail you out.

This is a compelling argument because it means that people can (and should) seek redress from the issuer who we already knew the loans were toxic when they issued them and they already made the argument in court. Framed as a request for bailout money from the government, this now becomes a liability to the banks when the investors read and use it against them.

Now, the BIG QUESTION… Assuming these suits are successful, and I think they will be, will we have another round of bank bailouts or should we do like we should have done in the first place – let the smaller banks chop up the bigger banks assets and let the bigger banks go through chapter 11 like they should have in the first place?

Boycott Sovereign Bank Part Two

Interestingly enough despite tracking search terms on the blog, Boycott Sovereign Bank remains one of the most linked to articles on this site.

It’s not hard to see why, people hate Sovereign Bank and most of the comments are filled with people fed up with the abuse. Weirdly enough no-one mentioned that cashing checks out of temporal order is something which other banks did. Not only that but the bank I jumped to, Wachovia, was purchased by Wells Fargo. Wachovia, for the record, never did this to us. If anything they were incredibly lenient on their policies for overdrafts, etc and often would refund you the money if you complained. (I only complained once, about ATM fees, not overdrafts, but the point stands that they were flexible). Turns out the bank which bought out Wachovia, Wells Fargo, not only did this but was sued for it as a class action. The class action won and Wells has to pay $203m to it’s customers. That’s good news to me, anyway, since I’m in Wells if I want to be or not. However, all of you with Sovereign accounts, you’re probably SOL and they’ll continue to do this. It’s likely going to court since now the lawyers know that there’s money to be made, but as far as pulling it off when you’re suing a foreign company, I’m not so sure it’ll work out. American banks have to play by American rules. You play with banks owned by Mexicans (Sovereign) and all they have to do is meet banking regulations, they don’t have to play nice.

Steve Jobs on Android

truly then has the android come into it’s own when Apple takes a note. Much in the same way Microsoft shot themselves in the foot with free press, Jobs really did the wrong thing by bringing attention to it.

Two points – The UI. I’m not worried about the UI. Microsoft phones have had a different UI for each release and it hasn’t stopped them. Blackberry too, for the most part, has had a new UI release for each phone, although they at least try to keep a standard look and feel for where things are even if the icons are different. Why then is the UI important? Its what people expect to see for making a phone stand out. You go into a cellphone store and they have running demo phones just so that you can mess with the UI. More on the point, the Google App Store doesn’t hurt anyone over the UI experience because the user will buy something they’re comfortable with UI wise while getting access to the app store. Apps which won’t run on your device (IE: 2.2 apps) don’t get presented. But this is an argument against Apple – who’s UI is absolutely the same for each device. It’s all their eggs in one basket – either you really like the UI and you’ll purchase a phone with that look and feel, or you hate the UI and you’ll shop elsewhere. My take on this argument is that it was a straw man from the beginning. Apple doesn’t let other companies do integration, so then when Jobs says “The user has to do the integration on android” – he’s being dishonest. The user can shop around for an android which fits their UI expectations – but if the user buys an apple phone and wants to change the UI, s/he really does have to do the UI integration. Incidentally the app “homeswitcher” in the market will let you do all that pesky UI integration with one click. This seems to be a popular talking point, enough that I felt a need to discuss it earlier.

The store(s) – I think the rant here was because Apple is afraid that developers will go for greener pastures, and while it was only Apple and Google competing, Apple only needed to sweeten the deal to keep developers in the apple store. There’s nothing to keep the existing developers on one platform or another. The Angry Birds guy is a good example of this – he’s well entrenched in the apple store and he’s probably made all the sales he’s ever going to make from that application. He’s got every reason to move despite less favorable terms elsewhere because he’s already hit market saturation unless there’s new users on the device. However with the apple ipad failing to offer up any new experience aside of being a “larger iphone” (and not that large at that), it’ll simply fail to entice people to purchase software again. There’s really no new users (unless people are somehow swayed by Jobs’s speech). What Apple is worried about is that new developers will see the competition from the other stores and the terms which are basically bidding wars and maybe they’ll get the next Killer App out on the android before it comes to the IOS platform. Not every indy developer is going to get titles like gameloft, who arguably don’t need the app store because they’re getting promotional tie-ins. However the new developers are going to look at the google store, the apple store, the samsung store, the verizon store and the at&t store and they’ll probably write off apple immediately. Why? Because they can code for one platform (android 2.1, android 2.2, etc) and pick which store is giving them the best terms at the moment. Is the verizon store likely to be open to t-mobile customers? Maybe. The Samsung store absolutely is open across carriers. If Verizon is serious about running a music/video/games store, they’ll make the verizon store app available in the marketplace.

Apple, at this point, is now going through the gentrification process. If I were Jobs, I would be looking for a new look and feel for IOS to inject some fresh life into the platform.

Tax the Rich!

SAP, whom I used to work for, gets a hat tip. Although SAP’s offerings in the US always seemed like the US was the “outsourced labor” and the Germans were the actual workers. The truth was that these were mostly separate companies and simply shared the company name. Still, most of my corporate experience there was a feeling like most people were climbing and never got further than the bottom rung. There’s a few people I still talk to today there and they’ve got their heads on right, but the vast majority of people never seemed to get the idea that the US side of things was roughly the same as any other outsourced labor and treated accordingly. That’s important to keep in mind when you read this article – there’s nothing a company has or does which makes the US any more of a valuable market for labor or money than any other country. Don’t get me wrong, I’d still work there simply for the experience (again) but in terms of career growth it’s not happening without moving to Germany. Then again with how the US is doing this too is becoming attractive.

Now, there’s a bigger message here from outsourcing or delisting from the stock exchange. When you make companies jump through more hoops and pay higher taxes, they simply leave. This applies to companies, this applies to individuals. If you make the environment so hostile that it becomes attractive to be somewhere else, they pull up the tent stakes and dust off. More on the point the rich, the companies, they have enough money they can afford to be mobile. When you compound the tax hike with jail time for individuals, suddenly moving seems like an awfully good idea…

I wonder how much it would cost to get the MR2 shipped to Germany?

Obama and the Budget

Heritage.org has their Morning Bell piece on the Mid Session Resview. Frankly if I were them and I wanted to really make a point I would have done a line by line breakdown on the thing. The heritage.org piece is worth a read as a summary, and they cut the administration some slack by using the “official” number for unemployment (8.7%) versus the adjusted number of 22%. My gut feeling from talking to friends is that it’s closer to 8.7% – it’s probably 10%. It’s worse than the government is saying but it’s not as bad as statisticians are saying. At some point you’re playing word definition games rather than looking for numbers.

My impressions are that I’m still surprised Obama is in Blame Bush mode. At this point he’s sounding desperate. From the very first paragraph alone:

In January of 2009, the economy was on the brink of a potentially severe depression, precipitated by an era of irresponsibility marked by excessive risk-taking in, lax oversight of, and an eventual meltdown in the country’s credit and capital markets. The result was a severe and rapid economic contraction, the collapse of the financial markets, and damaging and painful job losses. More than 750,000 jobs were lost just in the first month of 2009, 3.7 million were lost in the first half of that year, and 8.4 million were lost between the beginning of the recession, at the end of 2007, and the beginning of the recovery.

We’re still talking about The Last Guy is what I get out of that. That tone continues through the entire piece. At some point in his term Obama might actually choose to lead and take personal responsibility for what’s going on, but I suspect this year isn’t it. Maybe next year. Even people who generally do try to ascribe economic failure to The Last Guy tend to only count the first year of a Presidents term as The Last Guys economic policy, so the fact that we’re still talking about 2007 speaks volumes for Obama realizing he’s absolutely screwed. Not only does he realize he’s screwed but rather than try to take it on the chin and say “ok we’re just making a mess here, lets do something else” he’s still saying “but look what BUSH did!”

The other thing which really pisses me off is that the budget says “oh look we made PAYGO into law!” Which was good. For all I thought Clinton was a scumbag who should have been raped to death by dolphins (one of the few animals in the world with two penises), he could run a business. The problem is the Obama version can be superceded by “emergencies” which hes cheapened out to be “right now”. The law solely exists to make sure congress and senate has a tough time funding anything since the office of the President has spent every last dime (actually four and a half of them). Obama’s PAYGO isn’t about a balanced budget, it’s about making sure everyone in the other two arms of the government can’t possibly say no.

Another step towards disaster is the Dodd-Frank act. This act prevents taxpayers from having to bail out wall street companies. Like we just did. Several times over. But it’s an emergency you see.

OK trying to be at least a little bit positive – Patient Protection and Affordable Care act which has nothing to do with the balance sheet protects Americans from discrimination based on pre-existing conditions.

Anyway, the rest of it is standard issue hogwash. I think we’re going to return to 10%+ mortgage rates in a few years so BUY NOW.