Fully one-third of all Microsoft OS owners don't want to come within 3 degrees of current OS

According to this article, fully one-third of all Microsoft OS owners stick with their old trusted XP and won't come closer than three degrees of the current relationship, Windows 8, which is already pretty long in the byte for the dominant PC drug. Let's see, after XP there was, what, Vista, Windows 7, Windows 8????

According to the article, Microsoft has unscrupulously scraped the barnacles off the good ship Lollisoft, with resistant effect:

Microsoft has beaten the dump-XP drum for more than two years. Last month, it did so again when a manager in its security group warned that the aged OS will become a prime target for cyber criminals once security updates end on April 8, 2014.

But those calls by Redmond have gone largely unheeded. According to the Irish firm, XP actually gained one-tenth of a percentage point last month.

Cinco de Mayem

It's a gringo thing, that Cinco de Mayo stuff. Mainly celebrated by Norte Americanos who need an excuse to drink and eat beans. As if.

History.com explains its, well, history, and we can only hope this is not a deja vue all over again.

In 1861 the liberal Mexican Benito Juárez (1806-1872) became president of a country in financial ruin, and he was forced to default on his debts to European governments. In response, France, Britain and Spain sent naval forces to Veracruz to demand reimbursement. Britain and Spain negotiated with Mexico and withdrew, but France, ruled by Napoleon III (1808-1873), decided to use the opportunity to carve a dependent empire out of Mexican territory. Late in 1861, a well-armed French fleet stormed Veracruz, landing a large French force and driving President Juárez and his government into retreat.

Certain that success would come swiftly, 6,000 French troops under General Charles Latrille de Lorencez (1814-1892) set out to attack Puebla de Los Angeles, a small town in east-central Mexico. From his new headquarters in the north, Juárez rounded up a rag-tag force of 2,000 loyal men—many of them either indigenous Mexicans or of mixed ancestry—and sent them to Puebla. Led by Texas-born General Ignacio Zaragoza (1829-1862), the vastly outnumbered and poorly supplied Mexicans fortified the town and prepared for the French assault. On May 5, 1862, Lorencez drew his army, well provisioned and supported by heavy artillery, before the city of Puebla and led an assault from the north. The battle lasted from daybreak to early evening, and when the French finally retreated they had lost nearly 500 soldiers. Fewer than 100 Mexicans had been killed in the clash.

Although not a major strategic win in the overall war against the French, Zaragoza's success at Puebla represented a great symbolic victory for the Mexican government and bolstered the resistance movement. Six years later—thanks in part to military support and political pressure from the United States, which was finally in a position to aid its besieged neighbor after the end of the Civil War—France withdrew. The same year, Austrian Archduke Ferdinand Maximilian, who had been installed as emperor of Mexico by Napoleon in 1864, was captured and executed by Juárez's forces.

Read more at the link above.

Mexonline.com adds local flavour.

It is primarily a regional holiday celebrated in the Mexican state capital city of Puebla and throughout the state of Puebla, with some limited recognition in other parts of Mexico, and especially in U.S. cities with a significant Mexican population. It is not, as many people think, Mexico's Independence Day, which is actually September 16.

Celebrating Cinco de Mayo has become increasingly popular along the U.S.-Mexico border and in parts of the U.S. that have a high population of people with a Mexican heritage. In these areas the holiday is a celebration of Mexican culture, of food, music, beverage and customs unique to Mexico.

Commercial interests in the United States and Mexico have also had a hand in promoting the holiday, with products and services focused on Mexican food, beverages and festivities, with music playing a more visible role as well. Several cities throughout the U.S. hold parades and concerts during the week following up to May 5th, so that Cinco de Mayo has become a bigger holiday north of the border than it is to the south, and being adopted into the holiday calendar of more and more people every year.

What's to celebrate?


23 dead, 9 found hanging from bridge, in Nuevo Laredo

The bodies of nine people were found hanging from a bridge just south of Laredo, Texas in the Mexican town of Nuevo Laredo early Friday morning. Five men and four women were among those dead.

Bodies of 23 found dumped near U.S. border in Mexico drug war

found hanging from a bridge or dismembered in ice boxes and garbage bags

Police could not confirm who was responsible for the murders but a message seen with the bodies indicated it may have been an attack by the Zetas cartel against the rival Gulf cartel. The Zeta cartel was founded by deserters from the Mexican special forces who became Gulf cartel enforcers and later split from their employers.

The two gangs are now fighting for control of local drug trafficking routes.

In Nuevo Laredo, 23 corpses found on grisly day in Mexican drug-cartel war

A Web site devoted to news about narco-violence published photographs of the nine victims — five men and four women — swinging from the bridge, the corpses bloody and bearing marks of torture. Some had their pants pulled down to their ankles.

There was a banner hung beside the bodies on the bridge, and its profanity-laden message boasted that “in this way I am finishing you all off.” It also said that one victim “cried like a woman giving birth.”

Feel like celebrating now? With terrorists right on our doorstep?

Patently stupid

Guambat reckons there is no intelligence in most IT. It should be called Infantile Trivia for the most part, and is simply a way of planting a virtual flag on a virtual bit of space in a far galaxy to waive away others from nothing much. He could probably patent an effective way to lift one's cheek to fart based on the nebulousness of most patents these days.

Corroborating that thought is the following writer.

Why the coming patent crisis is inevitable by Ben Parr

[Speaking of the Facebook/Yahoo patent-slinging contest he says] I'm shocked by some of the patents over which these two companies are suing each other. One of Yahoo's patents focuses on the "optimum placement of advertisements on a webpage", while Facebook has two patents that cover a "system for controlled distribution of user profiles over a network." Yahoo owns the patent for a "method to determine the validity of an interaction on a network", but "generating a feed of stories personalized for members of a social network" belongs to Facebook.

You really can receive a software patent for almost anything these days, it seems.

Facebook and Yahoo aren't the only ones collecting patents and threatening to use them like stockpiled nuclear weapons, though. Here are just some of the patent disputes that have made headlines in the last two weeks: Apple and Samsung, Microsoft and Motorola, RIM and NXP, Oracle and Google, and Tivo and Motorola.

Patents have played an important role in protecting an inventor's intellectual property and fostering innovation throughout history. However, their usefulness in software is far more limited, and in recent years has simply become damaging to innovation, thanks to patent trolls using IP they've acquired to sue smaller tech companies and make a quick buck.

Patent law simply wasn't designed for the always changing, rapidly developing world of software. Inventing a way for "generating a feed of stories" isn't the same as inventing a new type of fuel injection system or a new ultralight alloy for space travel. But software companies file patents like crazy because companies like Yahoo get desperate and start suing, and your only defense is to have your own stockpile of patents that will help you negotiate a settlement faster.

It's the tech industry's version of mutually assured destruction. And all the while, the patent situation inches closer toward a crisis that will make the SOPA controversy look like a walk in the park. At some point in the future, a company is going to skip the settlement and use the courts to shut down a popular and universal feature on the Web's top domains, simply because it has a patent that says it came up with the notion first. It will be a shock that reverberates all the way to the U.S. government and the World Trade Organization.

I suspect a patent crisis is both necessary and inevitable. The reason is simple: there isn't enough political will or pressure to institute massive patent reform without a crisis to rally around.

That's why the cycle of patents, lawsuits, and settlements isn't ending anytime soon. Now, if you'll excuse me, I'm going to go file a patent for a method of identifying patent trolls, just to see if I can.

While Mr. Parr is going out to file his patent, Guambat is going out to the night's sky to claim a star.

Of oligopolies past and future

Guambat is toward the end of his short annual Sydney sojourn, where the weather has been as cruel as the economy. His attention is more closely directed to the Aussie news, and this item is big on his radar.

The story is about how the so-called "Big Four" or "Four Pillars" or 'bankster cartel' set their interest rates, otherwise referred to as resale price maintenance.

First, it looks at how the group have conducted their little cozy business in the past, then suggests a new strategy, characterized as a lone (pun alert) break-out by one of the four. Guambat is dubious. This is a well orchestrated monkey-see, monkey-pas-de-deu, as well choreographed as Olympic synchronous swimming (if there remains any such thing).

See what you think:

ANZ a wildcard as it leads pack by Anne Knight

ON TUESDAY, leak-proof bunkers were set up to house four senior banking teams. They are, in effect, war rooms where interest rate battle strategies are hatched and various scenarios are accessed and tested. Two are in Melbourne - ANZ and National Australia Bank - and the other two in Sydney's CBD are occupied by teams from Commonwealth Bank and Westpac

The participants comprise the heavyweights of each business, its chief executive, finance director, the head of the retail operations, treasury, marketing and corporate affairs.

The pressure is intense. Each team watches every piece of media coverage - newsflashes, the online updates and reads newspaper commentary. They listen to every utterance from the government - the impromptu press conferences known in the media trade as door stops. But they watch their competitors' moves even more closely.

When the RBA announced a 25 basis point cut to its cash rate at 2.30pm on Tuesday the clock started ticking.

The top dogs in finance and treasury have the task of assessing how much it will cost their bank to pass on the full rate cut and how much they can save by shaving a couple of percentage points off a full cut. In order to play this game of chicken they must also understand how much financial pain/gain will be sustained by the other three.

Inside the bunkers, the marketing and retail services operatives must overlay the financial outcomes against the government backlash, PR fallout and the possibility of customer leakage.

None of the banks wanted to pass on the full 25 basis points, but none wanted to be the first to do so. There is no first mover advantage in this game. It might be unpopular to agree with the banks on this issue, but thanks to the state of offshore credit markets the banks' cost of borrowing has gone up. If they needed to wade into these wholesale markets tomorrow it would be expensive. The scenarios worked through by these war cabinets would have involved a matrix of possibilities.

They even debate whether it should be a Sydney or a Melbourne bank that moves first.

But all understand that to the extent they would fall short of matching the Reserve Bank it would be better to do so as a pack.

NAB would have been desperate to see the others pass on less than 25 basis points, providing it with the excuse to stay with the pack. But nothing this week has gone to script. Within hours of ANZ's move NAB followed, passing on the full 25 basis points.

OK. There you have the description of how the oligopoly past behaves. Now the vision of the oligopoly future, perhaps?

Yesterday at 12.30 ANZ became the first breakaway - it announced a cut of the full 25 basis points. But with the ANZ announcement came an unexpected kicker: in future it will not respond to changes in the Reserve Bank's cash rate but change its variable interest rates on its own timetable, the second Friday of each month. And, more importantly, the movement will reflect changes to its own cost of funds.

This decoupling is all about convincing consumers that the bank's cost of borrowing has little to do with the benchmark rate set by the Reserve Bank. In doing so, ANZ will be less tied to central bank settings and is more likely to move rates up next month if European debt markets remain in a parlous state. It's a clever strategy, albeit probably unpopular. It is also a game-changer.

Most consumers will not understand the significance of ANZ moving away from the Reserve Bank's rate agenda. They will just see a 25-basis-point rate cut as a win.

But the breakaway is sufficiently radical and unexpected that the rest will need to reform their strategies.

It is now a fair bet that the others will fall into line. A new pack has formed and to stay outside it would be dangerous.

Read more: http://www.smh.com.au/business/anz-a-wildcard-as-it-leads-pack-20111208-1olam.html#ixzz1fyhtyPq

If there truly were any competitive instincts in the cartel, the ranks will break with this move. Time will tell. Guambat reckons the rank oligopoly will reform and hold as tight as the one of olde.


FAIRNESS DOCTRINE FOLLOW UP:

Further to above, consider this:

Banks damned if they do and damned if they don't

This week's apparent indecision was in marked contrast to what happened just four weeks ago.

Then, the two biggest banks, the Commonwealth and Westpac, announced within a short period of each other and not long after the RBA's 2.30pm Melbourne Cup day cut they would follow suit and reduce their interest rates

ANZ left it to the next day, leaving National Australia Bank as the odd one out by only passing on part of the rate cut - 0.20 per cent - rather than the full 0.25 per cent.

NAB was vilified, not surprisingly perhaps, given it had sought to make a virtue of being the odd one out by projecting itself as the consumers' friend just a year before with its "breaking up with the big four" home loans campaign.

In little more than a day, NAB had handed back some of its hard-fought PR gains over what appeared, in public at least, to be a miserly amount - just five basis points, or 0.05 of a per cent.

As small as that seemed, it was in fact a significant turning point in what has become a hugely competitive battle for market share

Before last month's shenanigans, NAB had been successful in grabbing market share through the use of a classic retail-style price war. And in doing so, it was prepared to sacrifice some of its profit margin to buy that volume.

But all of this has come at a cost, a factor highlighted in prescient comments made just a week ago in the Herald by banking analyst Brett Le Mesurier of brokers BBY.

"From their [NAB] accounts to September it looked like to me like it was a pure 'price versus volume' trade-off," he said. "So more volume, lower price. And you multiply the two and you end up no better from a growth perspective."

But it wasn't just about the growth or the quality of that bigger market share. It was also about the cost of funding that growth. Put simply, NAB's lower-priced mortgages have been hurting its bottom line since its own cost of borrowing is no cheaper than its rivals.

In fact, the battle in the lending market has been matched by an equally expensive fight for deposits, which has only added to the pressure on profit margins.

Read more: http://www.smh.com.au/business/banks-damned-if-they-do-and-damned-if-they-dont-20111209-1ongv.html#ixzz1g3L5VDWP

As always, be sure to read the whole linked article. Much has been left out here. Guambat is still not wholly convinced that mere marketing wars constitute competition. In the classic sense, competition drives down price, and the Big Four show little ambition to do anything so brash for very long.

The very foundations of the Four Pillars Policy is to avoid the kind of price competition that would yield the kind of creative destruction of any of the existing banks that classic economics finds useful. Bank competition in Australia is more akin to rearranging deck chairs. Which is what oligopolies do.

Of limp "enforcement"

Really, this is just all too much.

Too big to fail is now too big to flail. If this is the new normal in corporate oversight, there is no abnormal.

Guambat says, bring out the cat-o-9-tails and put the whip to some humans here. At the very least, how about applying the "3 strikes and you're out" rule, assiduously applied to small potatoes, to the Big Spuds in Cow Town?

All these "settlements" settle nothing.

Promises Made, and Remade, by Firms in S.E.C. Fraud Cases

When Citigroup agreed last month to pay $285 million to settle civil charges that it had defrauded customers during the housing bubble, the Securities and Exchange Commission wrested a typical pledge from the company: Citigroup would never violate one of the main antifraud provisions of the nation’s securities laws.

It also was not the first time the firm was making that promise.

Citigroup’s main brokerage subsidiary, its predecessors or its parent company agreed not to violate the very same antifraud statute in July 2010. And in May 2006. Also as far as back as March 2005 and April 2000.

Citigroup is far from the only such repeat offender — in the eyes of the S.E.C. — on Wall Street. Nearly all of the biggest financial companies, Goldman Sachs, Morgan Stanley, JPMorgan Chase and Bank of America among them, have settled fraud cases by promising the S.E.C. that they would never again violate an antifraud law, only to do it again in another case a few years later.

A New York Times analysis of enforcement actions during the last 15 years found at least 51 cases in which 19 Wall Street firms had broken antifraud laws they had agreed never to breach.

On Wednesday, Judge Jed S. Rakoff of the Federal District Court in Manhattan, an S.E.C. critic, is scheduled to review the Citigroup settlement. Judge Rakoff has asked the agency what it does to ensure companies do not repeat the same offense, and whether it has ever brought contempt charges for chronic violators.

The S.E.C. said in a court filing Monday that it had not brought any contempt charges against large financial firms in the last 10 years.

Guambat has never run the numbers, but he's pretty sure, by the wet finger in the wind test, that he's quite squarely in the 99% crowd. And he's a bit pissed off, too. He's certainly not eased by the rest of that story:

prior violations are plentiful. For example, Bank of America’s securities unit has agreed four times since 2005 not to violate a major antifraud statute, and another four times not to violate a separate law. Merrill Lynch, which Bank of America acquired in 2008, has separately agreed not to violate the same two statutes seven times since 1999.

Of the 19 companies that the Times found to be repeat offenders over the last 15 years, 16 declined to comment. They read like a Wall Street who’s who: American International Group, Ameriprise, Bank of America, Bear Stearns, Columbia Management, Deutsche Asset Management, Credit Suisse, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, Putnam Investments, Raymond James, RBC Dain Rauscher, UBS and Wells Fargo/Wachovia. Two others, Franklin Advisers and Massachusetts Financial, said that their two settlements were made simultaneously and therefore one incident did not violate a previous cease-and-desist order.

But some experts view many settlements as essentially meaningless, particularly since they usually do not require a company to admit to the accusations leveled by the S.E.C. Nearly every settlement allows a company to “neither admit nor deny” the accusations — even when the company has admitted to the same charges in a related case brought by the Justice Department — so that they are less vulnerable to investor lawsuits.

In 2005, Bank of America was one of several companies singled out for allowing professional traders to buy or sell a mutual fund at the previous day’s closing price, when it was clear the next day that the overall market or particular stocks were going to move either up or down sharply, guaranteeing a big short-term gain or avoiding a significant loss.

In its settlement, Bank of America neither admitted nor denied the conduct, but agreed to pay a $125 million fine and to put $250 million into a fund to repay investors. The company also agreed never to violate the major antifraud statutes.

Two years later, in 2007, Bank of America was accused by the S.E.C. of fraud by using its supposedly independent research analysts to bolster its investment banking activities from 1999 to 2001. In the settlement, Bank of America without admitting or denying its guilt, paid a $16 million fine and promised, once again, not to violate the law.

But two years later, in 2009, the S.E.C. again accused Bank of America of defrauding investors, saying that in 2007-8, the bank sold $4.5 billion of highly risky auction-rate securities by promising buyers that they were as safe as money market funds. They weren’t, and this time Bank of America agreed to be “permanently enjoined” from violating the same section of the law it had previously agreed not to break.

In fact, the company had already violated that promise, according to the S.E.C when it was accused last year of rigging bids in the municipal securities market from 1998 through 2002. To settle the charges, Bank of America paid no penalty, but refunded investors $25 million in profits plus $11 million in interest. And, the bank promised again never to violate the same law.

The S.E.C. allowed the bank to settle without admitting or denying the charges, even though Bank of America had simultaneously settled a case with the Justice Department’s antitrust division admitting the very same conduct.

Companies routinely argue that while they may be settling multiple violations of the same law, the facts of each case are different — and therefore not exactly a repeat offense.

Guambat calls enough BS on this stuff.

These are serious offenses, by orders of magnitude much more serious than the offenses of "common" criminals who pay with much more jail time and other deprivations of liberty than any of the banks or other financial institutions have ever paid.

Guambat joins with those in the OWS crowd who say, we will accept the holding of the Supreme Court that corporations are persons too, with all the liberties accorded real people, when one of them is strung up.

Hang 'em high.

Otherwise, as Barry points out, "moving our money is an effective step towards reclaiming America."

The JP Morgan shell game

J.P. Morgan continues to shell out money to keep from going to jail, or at least to avoid the prospect.

J.P. Morgan charged with rigging municipal bond deals

J.P. Morgan Securities rigged bids in at least 93 municipal bond deals in 31 states for eight years beginning in 1997, the Securities and Exchange Commission charged Thursday.

The government said the firm agreed to pay $228.2 million to settle charges

recent enforcement actions have portrayed this seemingly staid corner of the banking world as having been a feasting ground for corrupt financiers.

Thursday’s settlement was another mark against J.P. Morgan Chase, parent of the securities firm.

Last month, J.P. Morgan Securities agreed to pay $153.6 million for allegedly selling investors a complex investment that was secretly designed to help a hedge fund profit at their expense.

In 2006, the SEC charged J.P. Morgan Securities with abuses in the market for another type of investment known as auction-rate securities. In that case, the firm agreed to pay a $1.5 million fine.

J.P. Morgan Securities won the bidding in some transactions because it obtained information from the agents about competing bids, the SEC charged. In other instances, the bidding was rigged in J.P. Morgan’s favor, and in still other deals, J.P. Morgan helped other parties win by deliberately submitting losing bids, the agency said.

“Municipal issuers and investors didn’t stand a chance against the fraudulent strategies [J.P. Morgan Securities] and others used to guarantee profits,” Robert Khuzami, the SEC’s enforcement director, said in a statement.

The firm neither admitted nor denied wrongdoing in its settlement with the SEC. But in its settlement with the Justice Department, it admitted to illegal anti-competitive conduct by former employees. Under its agreement with Justice, the firm avoided prosecution.

“The investigations focused on a small desk that was discontinued and on certain employees who are no longer with the firm,” J.P. Morgan Chase said in a statement. “These employees concealed their conduct from management.”

Management doesn't commit illegal action. Small desks do. But there's no constitutional right to pack a small desk.

See the USA, in Your Chevrolet ...

Amazing fees airlines are slapping on

U.S. airlines raise fares as fuel costs rise; Southwest, United join a trend started by Delta





A lure for expanded air service

American Airlines again bumps up airfares



Southwest matches fare increase led by legacy carriers; up go prices again

Where is my flying car?

Monopsony

Guambat learned a new word today from the erudite New York Times. Monopsony. It's "a single buyer with life-or-death power over its vendors".

Think government contracting. Think Pentagon. Read this article:

From Pentagon, a Buy Rating on Contractors

In economic terms, the Pentagon is a “ monopsony,” a single buyer with life-or-death power over its vendors. If the Pentagon wants the military industry to be healthy and profitable, it can pretty much ensure that outcome.

Monopsony or not, why should the Pentagon be talking up the stocks, even implicitly, of the companies it buys from? Why was Mr. Carter going out of his way to talk to investors and analysts? Didn’t he have more important things to do?

The answer, I eventually learned, has to do with something that happened a very long time ago, and goes under the category of “Be careful what you wish for.” Let’s just say that banking isn’t the only industry where the government has allowed a handful of companies to become too big to fail.

The article tells us that back in 1993, government officials invited defense industry executives to a "Last Supper" where they were told they would need to start merging to cut down on the costs of overhead being passed on to the government buyers.

The Last Supper has become part of the lore of the military industry — though partly that’s because Mr. Aspin’s prediction about tighter Pentagon budgets turned out to be so wrong. “On the day George W. Bush took office,” said Loren B. Thompson, a well-known military consultant, “defense spending was around $300 billion.”

Today it is more than double that amount, around $700 billion. The wars in Iraq and Afghanistan — not to mention the Pentagon’s voracious appetite for expensive weapons systems, and the lack of competition among the remaining contractors — have been a gold mine for the Big Five.

Not surprisingly, for most of the first decade of the 21st century, the stocks of these companies soared. But after peaking in 2008, they came crashing back to earth. Which, for the Pentagon, has turned out to be a problem. These companies need access to the capital markets, which is more difficult when their stocks are down. And the Pentagon simply can’t allow them get into serious financial difficulty; there are just too few of them. “What we can’t afford from the defense perspective is a sick industry,” said Jacques S. Gansler, a former procurement official for the Pentagon who teaches at the University of Maryland.

Recognizing that leaner times lay ahead, Defense Secretary Robert M. Gates made a speech last May acknowledging that Pentagon budgets were unlikely to rise substantially any time soon, and laid out a plan to create new efficiencies and increased competition among the companies.

taxpayers and shareholders are decidedly not in alignment: the tougher the Pentagon gets with its contractors, the better it is for taxpayers and the worse it is for shareholders. And yet it can’t get too tough, because if it is, the companies will start running into financial trouble, which means the stocks will sink even further and the companies will start to have trouble raising capital.

This is the bind created by the Last Supper.

Now can you see why the Pentagon has taken to talking up the industry to the investment community? With one side of its mouth, the Pentagon is saying it is going to be more tough-minded in its approach to military contractors than ever before. But with the other side of its mouth, it is telling investors not to worry: the profits will be there, no matter what.

The sidling up to investors actually began last October, when the deputy defense secretary, William J. Lynn III, held a private meeting for about a dozen Wall Street analysts, laying out the Pentagon’s cost-cutting plans in astonishing detail. Indeed, according to Reuters, which uncovered the meeting, the analysts were sworn to secrecy. Although this would seem to violate, at the least, the spirit of transparency that Americans expect of market participants, notes of the meeting became public only after Reuters exposed it. (A military consultant named James McAleese published his notes on his Web site a few days after the Reuters story broke.)

Whatever the ethics of this meeting — and the Pentagon insists that nothing new was divulged during the session — it appears to have had an effect. If you look at the stock charts of the Big Five, you’ll see that they all started to rise around October. Imagine that.

Guambat is reminded of another word: symbiosis.

Aussie banks too big to flail

The US government has a policy that its big banks are too big to fail. And how has that worked out?

The Australian banks have a clear, legislated policy with the same result. The Australian bank policy is referred to as the "Four Pillar" policy. The policy has, among its many intended and unintended consequences, given the Big Four unassailable power to dictate the course of micro and macro economic direction.

The effect of the policy is to assure that the oligopoly of the National Australian Bank (NAB), Westpac (WBC), the Commonwealth Bank (CBA) and the Australia-New Zealand Bank (ANZ) brook no interference from foreign competition, or political inference either for that matter, and are large enough at home to prevent any upstarts from starting to grow up. It suggests, underneath the political grandstanding, the true strangle hold that a few families have long held over the economic destiny of the country, for good and for bad.

And it should be mentioned that this policy is the long-lasting child of "both sides" of the political spectrum, the liberal Labor and the conservative Liberal.

Governments had a hand in banks' gouging

Many years ago those of us of the ''old left'' said it was not wise to deregulate the banking industry (''The bank that stopped a nation'', November 3).

Then Paul Keating and John Howard sold the Commonwealth Bank. We of the ''old left'' said this, too, was not wise.

Competition from a government-owned bank acted as a deterrent to private banks ripping off their clients by outrageous interest rises and ''fees'', unscrupulous practices to con people into taking on credit responsibilities they could not afford and mean-spirited foreclosures.

We were told we were silly for thinking that. Banks were now benevolent and kindly institutions. They would cherish their clients.

And how is that working out?

Reserve Bank of Australia lifts official interest rate, Commonwealth Bank moves higher than RBA

THE Commonwealth Bank has lifted its standard variable mortgage rate by 0.45 percentage points.

It is almost double the increase in the Reserve Bank's official cash rate.

Industry analysts say rival banks are likely to follow the CBA's lead.

Australia's Banks Find Winning Means Losing as Swan Condemns `Cash Grab'

Commonwealth Bank, Westpac Banking Corp., National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. -- dubbed the “four pillars” after a law preventing takeovers among them -- accounted for 87 percent of the home lending market in September, up from 76 percent three years ago.

Westpac, Australia’s second-largest bank, yesterday said profit in the six months to Sept. 30 almost tripled from a year earlier, while ANZ Bank said last week that earnings in the period surged 69 percent and National Australia, the biggest lender to companies, posted a cash profit gain of 32 percent. Combined profit at the lenders reached a record.

The lenders have benefited from an economy that skirted the worst worldwide recession since World War II and government guarantees on deposits and debt issues introduced by Treasurer Swan at the height of global financial crisis.

Banks, rates and regulations: who's in charge here?

It's hard to imagine an issue that better shows up the piss and wind of our politics than banking and interest rates.

The Great Truth That Dare Not Speak It's Name here is the mildly unsettling thought the governments in unprepossessing backwaters like Australia can do increasingly little to bring influence to bear on the tides that wash through their economies. Yesterday was an extraordinary example. The RBA pulls at perhaps its most direct monetary policy lever and one of the key organisations it was seeking to influence jumps above and beyond the Reserve's mark due to fundamentally unrelated international market factors.

The political necessity is of course to maintain the impression of Being In Charge. To do otherwise would invite some awkward questions. And so we will bluster on for days and weeks now with talk of regulation and improved competition and inquiries. At the end of the day you have to think that the gorillas in the room will do pretty much as they please.

And what are we going to do? Bluster presumably, and then pay up.

The most telling response to the CBA rise yesterday? That bank's shares bounced on the back of it. That's the only commentary that matters.

Hypocrisy rules bank bashing

WAYNE Swan personally granted more market power to Ralph Norris and Gail Kelly.

Now, less than two years later, he is expressing concern about bank competition.

The whole argument is, frankly, deeply concerning when considering the sheer hypocrisy on display.

When CBA wanted approval to increase its market share in Western Australia to 46 per cent via the BankWest deal two years ago, Swan said yes and so did the ACCC.

When Gail Kelly wanted the green light to increase her share of the national market and NSW market to 20 and 25 per cent, respectively, the same competition defenders gave her the big tick the very same year.

Swan is clearly playing for time on the Norris attack on rates and should step carefully with the aim of only acting in defence of competition.

Banks can do more to allow customers to swap accounts but despite the rhetoric are sitting on their hands.

Now re-read that carefully. It contains the very implicit illusion that the guaranteed oligopoly of the Big Four is some kind of competition, when it is more like the arrangement of deck chairs on the Titanic. Swap accounts amongst them? A fool's game.

Switching banks: what it could cost

Yesterday the Reserve Bank lifted interest rates 0.25 percentage points, surprising consumers who had been expecting rates to be kept on hold. The Commonwealth Bank moved immediately to raise their rate by 0.45 points.

Citywide Lending director Rodny Ghalie said the big banks effectively took turns taking the public perception hit, alternating who would up their rates first.

Still too hard to change banks: survey

Most people still find it too hard to change banks despite federal government attempts to improve competition, consumer group Choice says.

A Newspoll survey, conducted for Choice, found that 80 per cent of respondents had never considered switching banks, even though legislation had theoretically made that process easier.

"The main reason for that is it's just too much hassle," Choice spokesman Richard Lloyd told ABC Radio on Thursday.

"Probably even worse, people just don't think it's worth their while."

Switching banks too much effort for most, poll finds

NEARLY 80 per cent of Australians have not thought about switching banks because of the effort involved and fear it would not make any difference anyway, a poll shows.

Choice's Richard Lloyd said customers lacked confidence in the banks' ability and willingness to compete.

Guambat's experiences over many years with various of the Big Four lead him to the conclusion that, at the end of the day, it's all much of a muchness. Once the banks gave up relationship banking and folded the CBA into the Four Pillars club, there was no longer anything between them.

And why should the banks compete? Really compete.

Why, when the Four Pillars policy guarantees complacency amongst them and freedom of fear from others?

The issue in Australia is not over the lack of control of their bankers over world economics and financing costs, it's about how the domestic banks can stick it to Australian consumers, passing through every last cent of that cost without regard to foreign competing banks who may be willing to share some of that cost for the business.

And, you don't think the Four Pillar policy is a blank check underwriting the Big Four? Go back and read the article above that said, "the most telling response to the CBA rise yesterday? That bank's shares bounced on the back of it. That's the only commentary that matters."

Running against the grain

It's previously been reported in this blog that the Australian Wheat Board has got a tender body part in a wringer over it's participation in Saddam's rorting of the Oil-for-food Program, but how John Howard just couldn't image such good guys doing anything untoward.
http://guambatstew.blogspot.com/2005/10/bad-saddam-bad-kofi-and-shame-on-rest.html

Well, it appears not only did they possibly get into some things a might curly, they had the willing cooperation, if not competence, of Howard's government in the process.

"Evidence to a parliamentary committee revealed Department of Foreign Affairs and Trade (DFAT) officials failed to investigate two key warnings that AWB was funding the despot's regime under the United Nations oil-for-food program. The officials quickly signed off on AWB's request to seek deals which later saw it pay inflated transport costs to a company which was a front for the Iraqi government.

"These officers were not corrupt," Mr Downer told parliament during a fiery exchange with his Labor counterpart Kevin Rudd. But Mr Rudd said DFAT's evidence before the Senate estimates committee showed "inexcusable negligence" by the government. DFAT laid responsibility for policing the corruption-ridden oil-for-food program squarely with the UN." http://smh.com.au/news/NATIONAL/DFAT-approved-AWB-oilforfood-request/2005/11/03/1130823328054.html

"The UN raised allegations with Australia's mission in New York in January 2000 that the monopoly wheat exporter, AWB, was paying money into a Jordanian bank account lining the pockets of Saddam Hussein's regime. Despite this, 11 months later the Department of Foreign Affairs and Trade gave AWB the green light to enter into commercial arrangements with a Jordanian company, Alia - now known to have been a front for the Iraqi dictator's regime - without consulting the mission in New York or the UN.

Department officials revealed yesterday that cables went to Canberra - where they were copied to the office of the Foreign Affairs Minister, Alexander Downer - in January 2000, after an officer from the UN's Office of the Iraq Program approached Australia's UN mission in New York with allegations made by Canada.

Earlier, Canada's mission in New York had informed the UN that the Iraqi Government had demanded the Canadian Wheat Board deposit $US700,000 ($943,000) into a Jordanian bank account to cover transport costs in Iraq and made allegations that similar arrangements had been made between Iraq and the Australian Wheat Board.

The UN told the Canadians that the payments should not be made into the account and contacted Australia's mission, which reported back soon after that AWB had "categorically denied" the allegations.

Ten months later AWB wrote to Foreign Affairs, in correspondence tabled at the hearing, saying "as you are aware, AWB is experiencing problems managing its Iraq business efficiently", and asking if the department was "comfortable" with its proposal to enter into an arrangement with a Jordanian-based trucking company.

"We believe the proposed solution will eloquently ["elegantly", even] solve our problem," the letter stated. The department wrote back in November 2000, saying that it had examined the Jordanian trucking company proposal and "could see no reason from an international legal perspective why you should not proceed". "That is, this would not contravene the current sanctions on Iraq," it stated.

However, the unnamed department officer who wrote the letter did not, departmental officers admitted, consult its mission in New York or the UN, which in June that year had prepared a memo, not passed on to Australia, stating that dealings with Alia would breach UN sanctions.

The Labor senator John Faulkner told the hearing "one check with the UN OIP [Office of the Iraq Program] would have found that this was a massive problem, just a simple check"."

http://www.smh.com.au/news/world/wheat-deal-approved-despite-un-concern/2005/11/03/1130823343424.html

Meanwhile, back at John Howard's ranch,

"The man who chaired wheat exporter AWB at the time it made kickback payments to Saddam Hussein's regime was later appointed by the Federal Government as a senior agricultural administrator in Baghdad.

Trevor Flugge left AWB in March 2002, and a year later, immediately after the Iraq war began, was appointed by the Foreign Minister, Alexander Downer, to jointly lead a US-Australia team to modernise Iraqi agriculture.

Mr Flugge was chairman of AWB in 1999 when the company began paying "inland transportation fees" to a Jordanian trucking firm to carry Australian wheat from Iraqi ports....

[The UN's Volker Report] says "numerous aspects of the AWB-Alia relationship … suggest that some employees of AWB were placed on notice of facts strongly suggesting that AWB's payments were in whole, or in part, for the benefit of the [prewar] government of Iraq". There is no suggestion in the report Mr Flugge was aware of those facts.

The report found that AWB was the largest provider of humanitarian goods to Iraq under the oil-for-food program, and the $221 million AWB made in "side payments" for the trucking fees amounted to "more than 14 per cent of the illicit funds collected by the Iraqi regime under its kickback schemes".

The opposition says the payments illegally obtained from AWB were by far the largest from any company participating in the provision of food or humanitarian assistance to the former regime.
http://www.smh.com.au/news/world/wheat-boss-given-top-job-in-baghdad/2005/11/02/1130823281418.html

It's a phoney

"Mark Russinovich couldn't understand how the rootkit had sneaked onto his system. After a bit of detective work, it turns out that Sony is using techniques normally seen only in spyware and computer viruses in order to restrict the unauthorized copying of some of its music CDs. Sony's software, licensed by Sony from a Banbury, UK, company called First 4 Internet, has become the basis of a dispute that once again pits computer advocates against an entertainment company experimenting with new ways to prevent the unauthorized copying of its products.

"Sony has been using First 4's XCP (Extended Copy Protection) software since early 2005 as a copy protection mechanism for some of its music CDs, according to Sony spokesperson John McKay. He could not say how many of Sony's CDs currently use the XCP software, but he said it is one of two digital rights management products used by the company. The other is SunnComm's MediaMax software, he said.

"The XCP software prevents users from making more than three backup copies of any CD, and Sony puts an XCP notification on the back of CDs that use the mechanism, according to Mathew Gilliat-Smith, First 4's chief executive officer.

Although the Van Zant CD software came with an end user license agreement (EULA) informing him that he would be installing software that would reside on his PC until removed, Russinovich, who works as chief software architect with systems software company Winternals Software, said he never expected to be installing a product that would then prove to be virtually undetectable and extremely difficult to remove.

"Sony's McKay believes that the disclosures in the license agreement are adequate. "I think the EULA's pretty clear about what it is," he said. "The reason why consumers have really high acceptance levels of these content-protected discs is because they have the functionality that people want."

The First 4 software does nothing malicious and can be uninstalled, should the user want to remove it, McKay said. That uninstall process is not exactly straightforward, however, and cannot be done through the Add or Remove Programs utility in the Windows control panel. When asked for instructions on how to uninstall the software, McKay directed the IDG News Service to a section of the Sonybmg.com Web site where users could ask Sony customer support for uninstall directions."

http://www.pcworld.com/news/article/0,aid,123362,00.asp

"Windows users cannot listen to tracks on the CD without agreeing to install the anti-piracy program, which merely advises that "it will install a small proprietary software program" that will remain there "until removed or deleted."

"But according to Mikko Hypponen, director of research for Finnish antivirus company F-Secure Corp., users who want to remove the program may not do so directly, but must fill out a form on Sony's Web site, download additional software, wait for a phone call from a technical support specialist, and then download and install yet another program that removes the files.

"While the anti-piracy software allows consumers to make a limited number of additional copy-protected discs, it also imposes compatibility and portability constraints. Users of Apple Inc.'s iPod -- the dominant portable media player on the market -- have no way of transferring tracks from protected Sony CDs to their device, since Apple has not yet licensed its own DRM technology for use with copy-protected discs.

"David Eisner, a blogger and software developer at the University of Maryland's Computer Aided Life Cycle Engineering Center, believes the record label's actions will ultimately backfire and drive otherwise legitimate customers to download pirated music from the online file-sharing networks. "The people they're trying to stop from stealing their music are always going to find a way around these types of technologies," Eisner said. "Sony is just hurting people who obtain their products legally, and many of these same people are now going to think twice about doing so."

http://www.washingtonpost.com/wp-dyn/content/article/2005/11/02/AR2005110202362.html

Update

"After a chorus of criticism, Sony Corp.'s music division said Wednesday it is distributing a free software patch to reveal hidden files that automatically installed to hard drives when some of its music CDs were played on personal computers. The patches that reveal the hidden files are being made available to antivirus companies as well as customers who visit the Sony BMG site.

"They do not remove the copy protection software, however. McKay said customers can request a program to safely uninstall everything by visiting the Sony BMG Web site at http://cp.sonybmg.com. That site, however, requires a form to be filled out and submitted.

"In a test of the form late Wednesday, an e-mail confirming receipt was quickly returned by Sony BMG customer service, but it included no instructions on how to remove the software. The message promised another reply "shortly."

http://seattlepi.nwsource.com/business/1700AP_Sony_Copy_Protection.html

Was it something we said, or the way we said it?

"MANY of the phone companies that own the wires connecting people to the internet are gearing up to block free phone calls that use voice over internet protocol (VoIP) technology....." http://www.movementarian.com/2005/10/20/if-you-cant-beat-them-block-them/ Just when you think you've got them beat.

Patently wealthy

"Over the next two years, the heirs of Fritz Hoffman, founders of Roche, one of the world's most powerful pharmaceutical companies, and who already rank as among the world's richest families, could see their combined £10 billion fortune reach giddy heights. Twenty members of the founding family control Roche, which industry analysts estimate will benefit from the Tamiflu drug thought to relieve the symptoms of avian flu, with extra profits of £500 million this year and £1bn next. And since the family owns about 10 per cent of shares and crucially 50.01 per cent of voting rights, they will ensure that no outside interests seize their company and enjoy the profits - though many would like to.

"As avian flu spreads from south east Asia into Europe, sparking fears of a worldwide epidemic that medical experts say could claim 50 million lives, Roche, famous as the company behind the Valium tranquilliser, appears poised to clean up. The Basel-based company is already the fastest growing drugs firm in the world with a share performance to match. Investor returns have increased 50 per cent in a year. Last week its share price reached record highs after it said third-quarter profits rose by 20 per cent to £3.9bn.

"And that growth is primarily due to a drug it did not even invent. It was US biotech firm Gilead that developed Tamiflu. But nine years ago, Gilead signed a development and licensing agreement with Roche. It is currently the subject of legal action which will be resolved in a year. Gilead claims Roche has been negligent in its manufacture of Tamiflu which has led, Gilead says, to a series of product recalls. Gilead also says Roche has failed to market the product well, which has reduced the potential revenue the drug could have made. Roche categorically refutes the allegations.

"But as legal action rumbles, Roche faces other possibly more serious threats. The firm is under unrelenting pressure to increase production of Tamiflu. In the US, senator Charles Schumer has threatened legislation compulsory to license Tamiflu unless Roche allowed generic producers to boost the number of pills in circulation. The senior Democratic senator for New York accused Roche of 'putting profits ahead of world safety'. He has threatened with other Republicans to introduce legislation to force Roche to relax its stranglehold on the drug.

"Pressure appears to have paid off. Last Thursday, after a month of holding its position, Roche said it would talk to four generic drug manufacturers about increasing production. But health campaigners say this is no guarantee that Roche will act. And if it does, it will delay matters as long as possible so it gets the most revenue possible before low-cost manufacturers get in on the act.

"Michael Bailey, of campaigning group Oxfam says: 'This situation is absurd. A government will have to make a move because Roche seemingly can't deliver. It's a classic case of international intellectual property law not working. It seems Roche is holding on as long as possible before allowing generic companies the right to produce so it can make as much cash as possible.'

"Although its expertise is not disputed, the firm has been no stranger to controversy. In the Seventies, Stanley Adams, a Roche employee, handed over documents to the European Economic Community as it was then, detailing how the company kept the price of vitamins high with the explicit collusion of its supposed rivals. But an EEC bungle identified Adams. Roche decided to prosecute and he was imprisoned under tough Swiss commercial secrecy laws. His wife then committed suicide.

"Twenty years later, Roche was at it again - marshalling a price-fixing cartel in exactly the same product. It was fined more than $500m by US and EU competition regulators." http://observer.guardian.co.uk/business/story/0,6903,1598469,00.html

When you recall that patents are government granted and protected monopolies, I have long had the notion that a patent should be revoked if the holder abused it, such as failing to exploit the patent by withholding production, entering into price-fixing cartels or other anti-trust behaviour. Along with the monopoly should come the obligation to act responsibility with the patented product. Don't fine them, if there's an abuse of patent, just revoke the patent. Should go for copyright, too, Mr Gates.