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The Cody Blog: May 2006

Wednesday, May 31, 2006

K&C Wait Is Over

Administrator's Note: The move to our new office space in downtown Manhattan held up our Kudlow & Company clip-posting temporarily, but we're back at it. Click here to check out Cody's appearance on K&C from May 18th. More to come.

The clip is pretty long, so please be patient.

Saturday, May 27, 2006

Kelly's TechFix Review: DRM Wars & Cody On-Demand

Welcome back to Kelly's TechFix Review. This week's column is going to be a two 'fer: a tug of war in the technology world, and a TechFix reader request.

The roots of the first segment of this TechFix can be traced back to our move to new offices on Soho. Soho, by the way, is often written SoHo, as it stands for South of Houston; SoHo is the neighborhood in Manhattan sandwhiched between Houston Street in the North and Canal Street in the South. And yes, there is a NoHo. But I digress.

The space is just incredible, and my job as technologist was to make sure that our offices were Tech Heaven, so to speak. We have two sets of speakers in the office, one in Cody's office and one in the "Media Room". We also have a PowerMac G5 in the Media Room on which is stored a ton of AAC audio files (the format used by the iTunes Music Store). Cody's criteria for the system was that either set of speakers could pull music from the G5 independently, and that both sets could be "linked" to play the same thing simultaneously if we wanted to really rock out. After some searching, an incredible-looking product emerged: The Sonos ZonePlayer.

Man this thing looked cool. The idea was to set up one ZonePlayer box in each of the rooms, connected to their respective stereos. In each room we would have a ZonePlayer Controller, a little wireless micro-computer that could change the music being played on either of the stereos from anywhere in the office.

As the ZonePlayer system arrived, Cody and I could not wait to set it up. We rushed to plug in all the wires and set up all the software, and we were ready to go. But then we ran face first into a roadblock: the ZonePlayer system is unable to play files downloaded from the iTunes Music Store, as they are DRM protected. Silly me to think the people at Sonos would have thought that one through. And shouldn't they at least have a nice big sign about that on the website? I guess there's still enough people out there downloading illegal music that there's enough of a market for their product, even if it can't play iTunes Music Store downloads.

It turns out that Sonos is one of many companies begging Apple to release the algorithm for their Digital Rights Management system, so that they can take advantage of the millions of users of Apple's wonderful Music Store. But Apple just won't budge, and even went so far as to say flat out (in regards to releasing their DRM algorithm), "it'll never happen".

Now, there is a workaround. You are allowed by Apple to burn your purchased music to CD. And if you then decide to put that music back on your computer, which is perfectly legal - it is your music after all - then the newly-ripped files will play through any system, including those from Sonos.

But the question that has been nagging me since I completed this installation is, has Apple taken DRM too far? I mean, if we have paid for the rights to legally own the music, should Apple really be able to limit that intensely the places we listen to it and the devices we use to do so? Given the strengh with which Apple has become the de facto standard for downloading legal music, they seem to have the clout to do as they wish. And in the mean time they will have a monopoly not only on the downloading of legal music but on the devices we use to listen to it. But as the revolution rolls on, I just don't think their grip can hold. In the revolution the consumer is king, after all.

The second segment of this week's TechFix Review comes in response to a reader comment regarding CNBC. The reader is unable to access CNBC via television, and wanted to know some way to access it on the Internet, in addition to Cody's K&C appearances that we post here on The CodyBlog.

And in response, I have a few answers. The first is that CNBC makes many of their daily segments available here. I know it's not quite like watching the station on broadcast TV, but hey, it's a step in the right direction. And the revolution will roll on.

As for the clips we post here on the website, we switched a month or two ago to Quicktime video files from Windows Media. The move was prompted by Quicktime's more efficient video encoding (think smaller files) and the wide availability of the Quicktime Player software. If you have been having problems viewing our recent clips, then you probably need to install Quicktime. You can download it here. It is also bundled with iTunes, which you can download here.

And as a parting Flip It™, if you are running Quicktime on a Mac and want to be able to play Windows Media files in the Quicktime Player, you can do so by downloading a plugin called Flip4Mac available here.

Thanks to the reader that posted that question. Feel free to post your own TechFix questions in the comments section below, or e-mail me at kelly@clwillard.com. Thanks for reading!

Friday, May 26, 2006

Cody on RM: What's On My Mind

Administrator's Note: Cody is out of the country but will be returning Thursday. In the meantime, here is the closing post from his Trader's Edge Blog on RealMoney:

By Cody Willard
RealMoney.com Contributor
5/26/2006 2:48 PM EDT
Click here for more stories by Cody Willard

It ain't no use in turnin' on your light, babe, That light I never knowed
An' it ain't no use in turnin' on your light, babe, I'm on the dark side of the road
Still I wish there was somethin' you would do or say, To try and make me change my mind and stay
We never did too much talkin' anyway, So don't think twice, it's all right
-- Bob Dylan

On Tuesday, for the first time in more than three and a half years, I'm going to miss a day that the market's open as I'll be on a flight coming back from a trip. I wish I could say that I'll turn my brain off and stop thinking and stressing over the economy, the market, tech stocks, technology strategies, the content revolution and how best to make money in all of the above. But let's face it, that ain't gonna happen.

Ahead of this brief hiatus, my editor suggested that my closing post be a list of things I'll be thinking about this weekend and/or looking for next week. I liked the idea, and I've got a lot on my mind, so I broke it into three rough pigeonholes.

• As steady and strong as this economy has been for the last few years, is it possible that it's all built on stimulative Central Bank policies throughout the world?
• Will the rolling dislocations around the world's financial markets quietly ebb and then stop?
• Will the rolling dislocations around the world's financial markets keep volatility spiked as they accelerate and cause much more pain?
• Why, whenever I point out how unbelievably horrid the emerging markets have crashed (India's now down 30% from its recent highs, for example, and the Middle Eastern markets are down nearly 40% year to date), does everyone always remind me how much those markets are up in the last few years, as if that somehow makes the implications of the rolling crashes less bearish?

• Was that record executive dead right last night when he told me that there'll never be much money made in the outright "selling" of music now that we've left the physical world for the digital.
• Is the music business about to enter its golden age despite losing the primary business model upon which it was built, as the same executive went on to explain (and blow my mind)?
• What's up with BitTorrent's move to go legal?
• Will there be a massive defection from BitTorrent to another "rogue" P2P system?
• Or does P2P traffic (and therefore bandwidth needs throughout the network) explode as people like you and me adopt it when we can finally trust it. (If you don't know what P2P is, click here and stay tuned. I'll be all over it again next week.)
• Will there be a de facto legal P2P standard?
• Will the government get involved in trying to regulate a P2P standard and force the mainstream P2P to stay black market?
• Is there any way for Google not to lose its soul, err, entrepreneurial edge as they add thousands upon thousands of people from the mainstream education and corporate system?
• How much risk is in Google's brand as they start partnering with lesser companies like AOL and Dell?
• Who sold out more by partnering with Dell? Sheryl Crow or Google?
• Is Apple as close to rolling out a brand new, market-changing media box for the living room as I think they are? I have to give Apple credit for the way they're quietly raising the rights protection abilities of iTunes now that they've already established themselves as the de facto legal music (and perhaps TV show) distribution outlet on the net.
• Will a legalization and cleaning up of the P2P systems of the world undermine Apple and Google's reigning distribution outlets, rendering my point above moot?

• Now that the permabears are starting to look for "the" collapse, does that make it less likely to happen?
• What's the single most bullish move the Fed could do right now? (After the trashing that every single financial market has had, I sure think it'd be to just cut and, well, shut up for a while. )
• How will the market break my heart the next time it breaks my heart?

Thanks for reading and I'll see you next Wednesday. I hope you have a great weekend.

Thursday, May 25, 2006

The Cody News (May 25, 2006)

High Price of Comedy: Fox Just Says No

LOS ANGELES, May 24 — Millions of dollars were spent, sets were ready in Santa Fe, and all was on track for production to start next month on what seemed to be a can't-lose movie for 20th Century Fox: a comedy from the reigning superstars Jim Carrey and Ben Stiller, with Jay Roach, of "Austin Powers" and "Meet the Parents" fame, as director.

Now that the barriers to entry for making AND distributing a movie have all but collapsed, it might not make a lot of sense to overpay some big names to put together a nine-figure comedy deal. Makes sense, no?

Interns? No Bloggers Need Apply

On the first day of his internship last year, Andrew McDonald created a Web site for himself. It never occurred to him that his bosses might not like his naming it after the company and writing in it about what went on in their office.

Ten million checks and balances. Bloggers change everything, man.

U.S. Steelmakers Polish Their Image

The U.S. steel industry, tired of being perceived as dirty and low-tech, is launching an ad campaign aimed at burnishing its image in the eyes of Washington decision makers.

Just shut up with the lobbying and socialist pleas already. Success should be determined by free will, not by working the DC circuit. Sigh.

Banks' Trading In Own Accounts Sifted for Conflict

SYDNEY, Australia -- There's a new hot zone of conflict between banks and regulators. After grappling with conflicts of interest involving stock research, mutual-fund trading abuses and accounting fraud in recent years, securities regulators around the globe are turning their attention to how investment banks handle trading in stocks for their own accounts, known as proprietary trading.

Nah, you don't say?

Wednesday, May 24, 2006

The Cody News (May 24, 2006)

U.S. Plan to Lure Nurses May Hurt Poor Nations

As the United States runs short of nurses, senators are looking abroad. A little-noticed provision in their immigration bill would throw open the gate to nurses and, some fear, drain them from the world's developing countries.

The brain drain and services drain from all of the developed world into the U.S. is not a sum-zero occurrence. The healthier and wealthier the U.S. grows, it benefits the world over. Capital flow, information flow, and yes, even human being flow is all about freedom and prosperity.

Under Attack, Big Oil Finds Reserves of Clout Running Low

Rep. Joe Barton should be Big Oil's biggest friend in Congress. The Republican chairman of the House Energy and Commerce Committee hails from a booming corner of the Texas energy patch. An engineer by training, he spent years working for a large integrated oil company, Atlantic Richfield Co. Since 2000, no House lawmaker has received more campaign contributions from oil and gas companies than Mr. Barton.

Holy cow, how about that chart of big oil profits busting through the $100 Billion mark. Good thing we taxpayers are still flooding the big oil industry with 10's of Billions of annual subsidies to help blow through that $100 Billion profit mark.

Fannie Mae Ex-Officials May Face
Legal Action Over Accounting

WASHINGTON -- Federal regulators warned that former top executives of Fannie Mae face potential legal action over what the Securities and Exchange Commission branded "fraudulent accounting" at the giant mortgage-finance company.

It's crystal clear that fraud and theft took place. By the billions. Look, the prosecutor's job is to figure out who's guilty and make them pay. Get it done, people. Somebody needs to pay for this disgrace.

Bonds Ties Ruth With 714 Home Runs

OAKLAND, Calif. -- Barry Bonds tied Babe Ruth for second place on the career home run list Saturday with his 714th homer, a solo shot into the right-field seats leading off the second inning.

I have to say, even as I'm not a sports fan, this is a rare recent sports development that I actually care about. Barry Bonds has essentially admitted taking steroids, and for this joker to receive any accolades for breaking the great Ruth's record makes me sick.

Prado breaks silence in wake of Barbaro's injury

Jockey Edgar Prado, so shaken by the tragic injury that caused him to pull up Kentucky Derby champion Barbaro during the Preakness that he refused interview requests, ended his silence Wednesday morning to express regret about what occurred.

I've been a part of way too many euthanizations having grown up the son of a veterinarian, and all we can do is hope that this horse makes it. It's a tragedy.

Tuesday, May 23, 2006

The Cody News Returns (May 23, 2006)

The Cody News is back:

New Domain Name -- .Mobi -- Could Spur Wireless Web

Surfing the Web on a cellphone can be as difficult as surfing the ocean on a tiny board. Now, a company founded by Microsoft Corp., Google Inc., Vodafone Group PLC, Nokia Corp., and several other companies, aims to make it easier to browse the Internet on wireless devices such as cellphones or BlackBerries.

While that Treo of mine with Verizon National Broadband is darn nearly, as I told Larry during a commercial break the other night, a god-device, there's nothing worse than randomly surfing the web on that thing. A web designed for wireless from the ground up, especially one founded by a consortium of mostly capitalistic, private enterprises, is squarely a wheel in the revolution process. (PS. How bad is that Google default technology for wireless? I mean, most of the functionalities that make Google such a joy to use, including LOCAL search FOR CRYING OUT LOUD!, are turned off for some unfathomable reason. Hello, Google! I'll be hosting a Cali Google-ite at my office tomorrow night, I think I'll complain to him about it as if there'd be something he could do. Poor guy.)

Judge Steps In for Poor Inmates Without Justice

NEW ORLEANS — Hurricane Katrina took his house, his courtroom and, Judge Arthur L. Hunter Jr. says, his faith in the way his city treats poor people facing criminal charges.

What a tough position to be in. But Constitutional rights aren't negotiable.

Intel Pushes Chip Production Deep Into China's Hinterlands

CHENGDU, China -- When Intel Corp. began setting up shop on the outskirts of this sprawling city in China's mountainous outback three years ago, Chengdu had a panda sanctuary, some of China's spiciest food and a collection of aging heavy industry.

You just have to read this story because it's so beautiful how capitalistic forces are bringing a high-tech revolution to the poor masses in the remote China. Schools, training -- an entire "ecosystem" of education and prosperity...all in the name of profit!

Finding Hate in a Whack on the Head

New York's latest attempt to punish impure thought got under way yesterday in the Queens County Criminal Court building.

I couldn't keep reading after the fourth or fifth paragraph when the author somehow seemed to, as I read it, imply that a white dude calling a black dude the n word as the white dude's hitting the black dude across the side of the head with a frickin' aluminum baseball bat is somehow SOMEHOW got some sort of parallel with a slang reference in the streets...

Monday, May 22, 2006

Live From New York... Or, Roots Planted?

I was confused as the lady in Best Buy laughed when I dropped the overfull basket of DVDs on the counter in front of her. I saw the HD-DVD copy of Goodfellas fall out and I quoted the classic Pesce line from it, "You think I'm funny?" with a smile. "Yeah, a little bit," she answered without acknowledging my perhaps not-humorous reference. "Just how long were you in there?"

"Oh, 15 or 20 mins? Why?"

"I've never seen any one buy so many movies all at once."

And then it hit me. When it came to content ownership, I'd stepped out of what Dave Chappelle would call "the game" (Kelly and I kicked the summer off with a The Roots concert and Dave came out and told some funny stuff...) at some point.

It must have been somewhere right around the time -- maybe before, maybe during, maybe after and maybe all of the above and more -- right around the time I moved to NYC from ABQ back in 1996 that I quit consuming purchased entertainment. Perhaps it was one too many forced upgrades from the recording industry or Sony's Walkman or the home movie standards. But at some point I sat down with a pencil and realized that these content owners were sandbagging me. And here, the young lady's surprise, as it accurately conveyed how strange it must be to meet someone who plops down scores of DVDs at one time in a 15 minute frenzy on a random Monday night, reminded me of the process.

I leaned forward on the elbow high counter's arm rest as Joann, the nice young lady who helped me find The Godfather I and II and The Wizard of Oz, finished with her customer and turned to join the conversation. "Do you guys own any movies? You know, some that you've bought from stores like this?"

"Oh, yeah, of course," they both answered.

"I don't. I've bought three movies that I can think of in my adultlife: The three watch-able Star Wars, of course. You see, I've been waiting and I know what movies I want and now that I've designed the theatre of my dreams in my office down the street and I can go back and have all these movies burned to my G5's hard-drive and I can watch them on my couch or on this here cell phone or anywhere else, all on my terms -- well, I'm here buying a bunch of the movies and TV shows that I've always wanted to own, but you really do have to remember that I haven't spent a single dime on building a library of in the last ten years since I moved to this lovely, cold city. And you see, that $924 that I just spent in one shot right here leaves me, I'd be willing to bet, several hundred dollars still in cushion to catch your guys' video budget over the last ten years."

And I think I said it just like that -- all quick and fast like Gary Brown, the very nice news reporter from the Ruidoso News when I was a little leaguer.

They were each sorta giggling at and with me as they nodded in agreement. I had a point, they concurred.

So I was pumped when Isis described her vision of the office space the broker had shown to her to me, just a couple days after I'd described my vision to her. For the last ten years, I'd been dreaming of opening an office in Soho, in large part because --well, I have to admit I hate the cookie cutter corporate buildings and hedge fund hotels from whence I come. Not that there's anything wrong with being a cooker cutter, a corporate, a hedge fund or even with being a hotel, mind you (my grandpa, son of Lucky Lindsay whose ring I wear and business card I carry, and Grandma even ran a motel in Madison, KS), but I just wanted to get out into some different areas and into a different vibe. It didn't help that after I'd moved offices the first time a couple years ago, I had my single worst day ever as a hedge fund manager on the very day I moved into my other offices. I hated that new office. And I was jazzed when the place Isis showed me was every bit of what I had pictured in my mind for the last decade.

On the sixth story of a six-story in the area of downtown Manhattan (the NYC kind, not the KSU) known as Soho, I've moved into a corner office with two big windows and a fire escape outside. For those non-NYCer TV-lovers, as I told my sister it's just down the street from the "Grace Building" where Grace's offices are in "Will & Grace". The building's an old prewar building that's full of new media companies, film studios, graphics designs companies and what not. My floor's got an "older" (what a funny concept to call it old already, but that bubble's pretty much a distant memory by now, isn't it?) web media company on it and even a record label. Did I mention I'm excited?

Alas, it's now hit 1:14am on this long, hard, and stressful, but fun first day from these new offices, of which I've already spent a lot of time, energy and pride on, but in which I hope to spend a lot more long, hard, stressful, energetic and prideful days.

Tonight's Soundtrack:

Nick Drake -- Bryter Layter

Bob Dylan -- Planet Waves

(NMF on all these and much more coming soon)

Saturday, May 20, 2006

Kelly's TechFix Review: De-authorizing iTunes

Hello and welcome to the first Kelly's TechFix Review post. Let me begin by briefly introducing myself. My name is Kelly Brewster, and I am Cody's research associate and "technologist." In my capacities as such I spend a lot of time researching technology and troubleshooting problems therewith. This has been especially true as we complete the move into our new office space in SoHo. A ton of tech-related issues have come up in the process of setting up the office, and Cody thought this would be a great time to detail some of the tech tasks that he has asked me to solve recently. Today's TechFix Review regards "de-authorizing iTunes."

Apple's iTunes software uses a unique DRM (Digital Rights Management) system to protect music that has been downloaded from the iTunes Music Store. Whenever one of these DRM-protected songs is played in iTunes, the iTunes software checks the computer to see if it has been "authorized" to play the music downloaded by the particular user.

Unfortunately, Apple only allows five computers to be authorized at a time. If you have more than five computers, but have access to them all, it is easy to de-authorize one or more of the computers so that you can choose which five to use. But what if you have sold the computers or given them away and don't have access to de-authorize them?

You have to perform a deauthorization of all computers associated with your account, and then add your current computers back individually. Begin by opening iTunes and going to the Music Store. On the main page, click the heading of the second section in the left column, titled "Account."

This will bring you to the account information screen. If you have 5 computers authorized on your account, a button labeled "Deauthorize All" will be visible. Click this button and iTunes will deauthorize any computer associated with your account. You are now ready to begin authorizing your current computers as needed. The first time you select a DRM-protected song for playback on any of your computers, you will be prompted for the password on your Apple account. Simply enter the password, and the computer will be authorized. Repeat this process for any current computer you want to authorize...up to five of course.

Wednesday, May 17, 2006

The Revolution in Motion

Administrator's Note: Talk about the revolution--we're loading our new offices in Soho up with:
  • A souped-up Power Mac G5

  • Two souped-up Apple Mac Book Pros

  • Two rack-mounted Intel Pentium 4 servers

  • An In Focus DLP HD Projector

  • A Logitech Wireless 5.1 Surround Sound System

  • A Bose 3.2.1 DVD Entertainment System

  • Two 15" Dell LCD Flat Panel Monitors

  • A 23" Apple LCD HD Flat Panel Monitor

  • The Sonos ZonePlayer System

  • Cody will be back to posting several times a day on Monday when we are settled in and back at it full speed. As Cody would say, Rock The House!

    Wednesday, May 10, 2006

    K&C Titanium, Tech, & Taxes

    Administrator's Note: T's all around: Titanium and commodities, big-cap tech, and corporate taxes, all the subject of another great visit with our friends at Kudlow & Company last night. Click here to check out the clip on-demand.

    Friday, May 05, 2006

    NMF: The Chambers Brothers, or How Not to Lose Your iPod

    I heard this band, The Chambers Brothers on the TV Cable Classic Rock cable channel. Downloaded the album, “Time Has Come - The Best of The Chambers Brothers” today. Holy cow, it’s a great album. The best is definitely the title song and it’s the longer version with the great drum beats that really hooked me.

    I emailed Rod asking him if he’d heard of them before. Let you know what he says. Anybody who does know ‘em, throw in your two cents worth in the comments section, please.

    I think I’ve owned, broken and/or lost five iPods of my own. I can’t find my white Nano anywhere right now and it’s killing me. Is this what life was like before my iPod? Anyway, the reason I’d lost this one is because, once again, I’d separated it from the good headphones when I’d used them to listen to music on my computer the other day. So I’m thinking the best way to not lose the iPod is to buy it its very own set of headphones, and that way they’ll never be separated. It’s a lot harder to lose an iPod with a set of headphones than it is without them. Not that it can’t be done either way, as I can attest.

    (Note to self: Why would anyone listen to your advice on how NOT to lose an iPod? I mean, you just explained that you’ve lost five of them!)

    K&C Politics, Markets, & More

    Administrator's Note: What an exciting discussion last night at Kudlow & Company with our good friends Barry Ritholtz, Herb Greenberg, and Noah Blackstein. We hope you were able to catch it live last night, but if not, here's the clip in VOD form. We've broken it down by segment for you to make viewing a little easier.

    Segment 1
    Moussaoui: Life or Death
    What an unusual, intriguing way to start the show, with a discussion of the sentencing of Zacarias Moussaoui. Some strong feelings on this one, and that comes across.

    Segment 2
    Great American Boom
    "The greatest story never told", indeed. The U.S., and most of the world, are in a boom. The panel discusses the effects of this worldwide boom on commodities, and debates the existence of a bubble therein.

    Segment 3
    Microsoft Vs. Google
    Google has a strong hold on the Internet ad space, but Microsoft has announced plans to enter the industry and is on the offensive. Can Microsoft topple Google's momentum?

    Segment 4
    Commodity Bubble
    Transports Moving Ahead

    The discussion of the existence of a commodity bubble continues. Ron Insana joins the panel for a discussion of the source of the bull markets in commodities, and what to do with the Transports. Oh, and are these commodity prices inflationary?

    Really, Free Money! er, No Deal!

    From The New York Times:

    $100 Rebate: Rise and Fall of G.O.P. Idea

    WASHINGTON, May 4 — Senate Republicans were frantic. Returning from a two-week recess that had been dominated by a spike in gasoline prices — and heading into a midterm election looking increasingly good for Democrats — they began scrambling for ways to calm angry voters.
    But the idea, part of a larger eight-point plan, fell flat. It was ridiculed by consumers and scorned by fellow Republicans in and out of Congress, including some of the seven senators who, like Mr. Thune, had stood beside Mr. Frist to announce it.

    "I never was in favor of that," Mr. Thune said Thursday. "We all got out there and tried to put our best face on it."

    So let me get this straight. Said Mr. Thune stood behind and seemingly pretended to favor the idea until it became clear that the public saw through its stupidity?! Two-party political system -- the end is nigh!

    Wednesday, May 03, 2006

    Earnings Season Blood

    Sorry I've been missing lately, but between earnings season, researching, conference calling, and traveling, launching the new blog on RealMoney.com and doing the TV thing a little more frequently, not to mention getting out in a canoe practically cell-phone-less for that three day Good-Friday weekend (I'm gonna make a Revolution music video out of that footage someday),

    being a little active on the Darfur front when possible, and even sneaking in an occasional hang out with Senor Altucher
    or a personal life moment or two, I've been struggling to produce what I'd consider quality content up here. (Note to self, check that sentence when you're not running into the wall after a sickeningly long day and see if it actually does hold up in the court of Donna Willard.)

    Bear with me, if you don't mind, earnings season is almost over and I'll have caught my breath in no time. I'll definitely have a post or two more this week. May the force be with you.