AIDS

There's currently a fantastic edition of Frontline running right now regarding AIDS. It's gone to great lengths at describing the history of AIDS and the many problems that it causes around the world.

Growing up where I did, AIDS wasn't generally a problem we concerned ourselves with in social conversation. I recall hearing a little bit about it when I was in 6th Grade, but still didn't fully grasp what the disease really meant.

Even in the mid and late 1990s, I understood how AIDS was passed person to person, but again, owing to the fact that I lived in Theological State, I didn't have to spend much time worrying about contracting it.

The Frontline Documentry has really opened my eyes about the problem that AIDS caused people here in the US as well as people in Africa, Europe and Asia. The truly sad thing is I'm sure there are hundreds of thousands of other people who like me, will never believe that AIDS will affect them.

What do we do about this disease? For the last twenty years, scientists have been promising a vaccine for AIDS, only to fail us time and time again. Billions of dollars have been spent in research in trying to find a cure. However, nothing has been very successful.

And what about the drugs that are 'somewhat' effective in fighting against HIV (the virus that causes AIDS)? Usually any drugs that are effective come at an extreme price - only people with money can afford them. Case in point: Magic Johnson.

In 1991, Johnson announced that he had to retire from the NBA owing to his acquiring of HIV. 15 years after announcing this, he looks a live and very well week after week while working as an Television announcer for the NBA. What's more, he is a very successful businessman.

Is it right that only people with money can live?

Republish: Basketball by the Numbers

A fantastic piece written by Malcolm Gladwell about a new book entitled The Wages of Win: Taking Measure of the Many Myths in Modern Sport. Absolutely fantastic, and dare I say, a must-read:

A couple of extra points about my piece in this week’s New Yorker on “Wages of
Wins.”
www.newyorker.com/critics/books/?060529crbo_books1.
For
those of you who haven’t read the article, it was a review of a book by three
economists—David Berri, Martin Schmidt, and Stacey Brook—who have come up with
an algorithm for assessing the value of professional basketball players. Simply
put, they rank players according to what they call a Win Score—which is the
number of wins that player alone can be said to have been responsible for in a
given season.
Here’s the amazon link to the book:
The author’s website is: www.wagesofwins.com
I’ve noticed, in reading reactions to
the book around the blogosphere, a certain residual skepticism, particularly
among hard-core basketball fans. Someone wrote in to point out, for instance,
that Shawn Marion’s Win Score this past season was higher than Steve Nash’s,
when common sense would suggest that the team would suffer far more from the
loss of Nash than Marion. I think that's right. Nash is more ultimately
more valuable to the Suns than anyone else.
Basketball is tricky. No
statistical formula can adequately measure the series of intangible factors that
are so critical to a team’s success: a player’s impact on his teammates, for
example, or attitude, or willingness to play hurt, or grace under pressure
or—most important of all—how well a player plays defense. Nash’s particular,
largely unquantifiable; genius is that he manages to make everyone around him
much better. As Bill Simmons (world’s greatest sportswriter) points out in his
column today, Tim Thomas was traded to the Suns this season after nine years of
disappointment, and all of a sudden he played like a star. Is that a
conincidence? I don't think so.
Similarly, the Wages of Wins algorithm tells
us that over the course of his career Ray Allen has been “worth” nearly as much
to the teams he has played for as Kobe Bryant. Does that mean Allen is as good
as Bryant? Of course not. Bryant is one of the greatest on-the-ball defenders of
his generation and Allen is, well (let’s be nice here) not. Perhaps the
best part of Kobe's game doesn't—and probably can't—show up in any kind of
statistical analysis.
But the Wages of Wins guys aren’t arguing that their
formulas are the only and best way to rate players. They are making a more
sophisticated—and limited—claim: for those aspects of basketball performance
that are quantifiable (steals, turnovers, rebounds, shots made and missed, free
throws etc) are the existing statistical measures we use to rate players any
good? And if not, is there a better way to quantify the quantifiable?
To the
first question, “Wages of Wins” argues—convincingly—no. For instance, they show
that the correlation between a team’s payroll and a team’s performance, in the
NBA, is surprisingly weak. What that tells us is that the people charged with
evaluating and rewarding ability and performance in the NBA do a lousy job. In
particular, they argue, traditional talent evaluation over-rates the importance
of points scored, and under-rates the importance of turnovers, rebounds and
scoring percentage. Wages of Wins also obliterates the so-called NBA Efficiency
rating, which is the official algorithm used by the league and many basketball
experts to rank the statistical performance of players. The Efficiency rating,
they argue, makes the same error. It dramatically over-rewards players who take
lots and lots of shots.
Okay: part two. Is the Wages of Wins algorithm
an improvement over the things like the NBA Efficiency system? To make the case
for their system, the authors “fit” their algorithm to the real world. For the
2003-04 season, they add up the number of wins predicted by their algorithm for
every player on every team, and compare that number to the team’s actual win
total. Their average error? 1.67 wins. In other words, if you give them the
statistics for every player on a given team, they can tell you how many wins
that team got that season, with a margin of error under two wins. That’s pretty
good.
Here’s what I think the real value of the Wages of Wins system is,
though. It gives us a tool to see those instances where our intuitive ratings of
players may be particularly inaccurate. In my New Yorker piece, I focused on how
the algorithm tells us that Allen Iverson isn’t nearly the player we think he
is. But here’s a more interesting finding. The best player, by this measure,
hands down, over the past five years has been Kevin Garnett. No one else comes
close. I had the authors update their numbers for this season, and Garnett is
again number one (with Jason Kidd second, Shawn Marion third and LeBron James
fourth). Why wasn’t Garnett’s name mentioned in the MVP voting? I know it’s
fashionable these days to rag on Garnett for not making his teammates better or
some such. But as David Berri told me, what the Wins Score numbers say is that
every year Garnett gets better and better, and every day the quality of the
players that Kevin McHale surrounds him with gets worse and worse. (Can you say
Ricky Davis?)
Just for fun, here are some Wins Scores numbers for this
season. Here are the players who’s Wins Score rankings differ the most from
their NBA Efficiency rankings—that is, the players who’s “true” value diverges
greatest from conventional wisdom, according to the Wins Score system.
Most
under-rated, in order:
1. Josh Childress
2. Tyson Chandler
3. Eddie Jones
4. Chris Duhon
5. Mike Miller
6. Delonte West
7. Antonio Daniels
8. Shane Battier
9. Luther Head
10. Drew Gooden
Here are the ten most over-rated.
1. Al Harrington
2. Carmelo Anthony
3. Zach Randolph
4. Richard Hamilton
5. Chris Webber
6. Nenad Krstic
7. Allen Iverson
8. Mike Bibby
9. Antwawn Jamison
10. Ricky Davis
Now argue with that list all you want.
Factor in intangibles. Make projections. Move some people up and down. But once
you’ve read the book, I promise you won’t be able to dismiss it.

Note to the residents of Utah

The purpose of this post is mainly cathartic, as living in this God-forsaken place has finally taken its toll on me. I really don't like to disclose a lot about me, although by looking at some of my previous posts, it's fairly obvious to figure out a little bit about who I am.

I live in the State of Utah. I don't like it, I'm trying to move out, but for now, I have to deal with my current situation. I would like to write a note to the residents who live here. I should preface this by saying that this is a generalization and it doesn't apply to everyone who lives here, but for the most part, it's true:

First, nobody outside of the state takes you seriously. People look down upon those who live here. People who live here are basically viewed by outsiders as no different from people who live in states like Idaho, Wyoming, the Dakotas, Montana, and the deep South. Generally speaking, you are all a bunch of hicks. The question that is now coming to most Utah resident's is 'Why?' Well, I'll be happy to tell.

First and foremost is the religious thing. You guys take it way to damn seriously. Folks, religion is not everything. And no, the Mormon religion is not the 'one and only true' religion on the face of the Earth. God doesn't take away other's free agency by demanding they join this or that religion, so why should you?

Along with religion, you still allow polygamy to flourish in the State. If you don't believe me, take a look at the South-Western part of the Salt Lake Valley, Centeral Utah, and of course Southern Utah. The Attorney General has not done a damn thing about the blatant violation of State and Federal polygamy laws, nor will he ever.

Another thing that irks me about the State is horrible driving. You people cannot drive for shit. You don't signal when you turn, you can't merge properly, you weave when cars are in your lane, you don't drive when you're supposed to, you don't stop when you're supposed to, and most importantly of all, you DON'T ANTICIPATE HOW YOUR ACTIONS WILL AFFECT OTHERS!

Another thing that bothers me about Utah is the local press, or lack there of. The local news looks like it was produced at the local high-school. Anything that involves 'The Church' is front page news/lead story news. Your anchors are inarticulate. And the news stations fire people for finding dirt about someone's past.

Horrible doesn't begin to describe your sports team. A perfect example of this is the fact that the owner of the Utah Jazz would rather spend money by expanding his movie theater empire, rather than spend money on obtaining top talent in the NBA with the hopes of possibly winning an NBA Championship.

I could go on and on but it really wouldn't serve a purpose, and I'm pretty sure that I've done a good job in describing what living in Utah is like. If any of you disagree, feel free to post your thoughts in the comments section.

fYi Yankee Fans

As an FYI to all Yankee fans, your team is now 1-4 so far this season against the Red Sox. Oh, and just in case you needed a reminder, the Red Sox are still in first place in the AL East. Although these two teams are usually battling down the stretch (and it should be the same this year), the Sox so far seem to have there number.

It should be a very interesting summer.

Republish Thursday: Gladwell on the Duke LaX Case

I may have mentioned this earlier in this blog (or perhaps it was my other blog) but Malcolm Gladwell is one of my favorite authors. I've read both of his books, The Tipping Point and Blink, and for lack of a better word, they're both fabulous.

In any case, here's a reposting of a couple of his thoughts on the recent Duke LaCrosse Team scandal:

I don’t have any opinion on the guilt or innocence of Duke lacrosse players
charged with raping a exotic dancer. But I do think the incident affords a
small opportunity to think about the value of eyewitness testimony. The
accuser, who is black, identified two players alleged to have assaulted her
after looking over photographs of all of the white players on the lacrosse
squad. On the basis of that identification, the players were
indicted by a grand jury. So far, the accuser’s testimony is the most
powerful fact in the prosecution’s arsenal. The question is: how much
credence should we give that identification?
Psychologists don’t particularly
like eye witness testimony. Elizabeth Loftus has done a lot of really
interesting work exposing its various frailties. Juries and
laypeople (and prosecution attorneys) tend to have a great deal more faith in
someone’s ability to pick a suspect out of a lineup than they should.
In Blink, I mentioned the research of Jonathan Schooler on lineups: he’s
showed that merely requiring people to write down a physical description of the
suspect before viewing the lineup radical impairs their ability to pick out the
correct person.
But the Duke case is an example of another, even more
problematic aspect of eyewitness identifications, and that is that we aren’t
particular good at making them across races. There is a huge amount
of psychological research in their area, pioneered by Roy Malpass at the
University of Texas at El Paso. A few years ago, John Brigham and
Christian Meissner did a big meta-analysis of all of the cross-racial
identification studies and concluded that given the task of picking someone out
of a lineup, the average person is something like 1.4 times more likely to
correctly identify an own-race face than a different-race face, and 1.6 times
more likely to incorrectly identify a different race face. These are
not trivial error rates. Clearly we need to treat cross-racial identifications
with a special level of caution. (Here’s the link to the UTEP eyewitness
laboratory: eyewitness.utep.edu/race.html)
The problem seems to be that
when we encounter someone from a different group we process them at the group
level. We code the face in our memory under the category black or
white, and not under the category of someone with, say, an oval face and brown
eyes and a prominent chin. Race, in other words, trumps other visual
features that would be more helpful in distinguishing one person from
another. Why do we do this? One idea is simply that it’s
a result of lack of familiarity: that the more we “know” a racial
type, the more sophisticated our encoding becomes. Another idea is that it’s a
manifestation of in-group/out-group bias. The thing about coding by
group and not by facial feature is that it’s a lot faster. And from
an evolutionary standpoint, you’d want to use quicker processing methodologies
in dealing with those who come from unfamiliar—and potentially
unfriendly—groups. The bottom line is that the adage that “all
blacks look the same” to whites (and all whites look the same blacks) has some
real foundation.
This has been a huge issue for years in white
identifications of black suspects. I would venture to guess that there are
thousands of African Americans in prison right now for crimes they didn’t
commit, largely because whites have far too much faith in their ability to tell
one black face from another. Now, in the Duke case, we have a black
identification of white suspects. The shoe is on the other foot. It
will be interesting to see whether the legal system is any more willing to
acknowledge the real limitations of eye-witness identifications when it is
suspects from the racial majority who are on the receiving end of the bias, not
the other way around.

The Da Vinci What?

The Da Vinci Code (the movie) has been released and is receiving less than spectacular reviews. I recently started reading the much-proclaimed novel, and have yet to understand what all the hype is about. Jesus marries Mary Magdalane, they have a child, blah blah, blah.

Folks, this book is a work of fiction. Just like The Firm, It, and Sesame Street. It's not to be taken seriously. Even my three-month old child enjoys hearing it read to him.

Polygamy is still Illegal in Utah..for Now

The Utah Supreme Court upheld it's long-standing ban on polygamy today. While it's not suprising that they did so, what is surprising is the fact there were actually Justices on the Court who dissented with the majority opinion.

The thing that made my jaw drop was the following quiver of information "Chief Justice Christine Durham issued a dissenting opinion saying Holm's bigamy conviction should not be upheld. She said that applying the bigamy law to marriages solemnized only in religious ceremonies

"oversteps lines protecting the free exercise of religion and the privacy of intimate, personal relationships between consenting adults."

Unbelievable. Folks, frankly speaking, we live the year 2006. Now granted, some of us are little cooky on what we find 'sexually appealing' however, it has been clearly defined for the last 120 years in both Federal and State Court that bigamy is (in most cases) a felony offense. However when we have these rougue Judges who ignore case law and issue opinions that are factually against the law, it's clear that some people still are not getting the hint.

What's more, this opinion was written by a Judge in Utah - a state where anybody who has a remote idea of allowing Gay Marriage is riduculed and cast out of mainstream society. Re-read the quote above and frame it in the context of gay marriage and think, how is gay marriage any different than polygamy using the Justice Durham's logic?

eBay v. MercExchange, Cont'd

eBay was successful in having the Supreme Court vacate an earlier District Court ruling and remand the case back down to District Court for retrial (I had a couple thoughts about it here).

MercExchange issued a statement saying it was confident that the district court would impose an injunction on eBay "when it fairly applies the traditional principles of equity set forth in the Supreme Court's opinion ... "

Uhm, excuse me? Are you trying to say that in the past 3 years of this litigation, eBay hasn't taken it upon itself to change the back-end technology to essentially by-pass Merc's patent? Do you really take them for such fools?

Let's get a couple things straight: As soon as eBay lost the orignial patent lawsuit back in 2003, it immediately went to work to change the back end structure of it's Buy It Now featuer so that it would no longer infringe on the patent that Merc claims to have. What's more, it took the additional step of accounting for the $25 Million that a District Judge awarded to Merc as part of the damages.

The only reason eBay pursues this issue to the extent that it does is just to make sure that legal precedent isn't set. Frankly speaking, if Merc really believes that they're going to shut down one of the most powerful companies in the world, they have another thing coming.

Republish Thursday: A Conversation with the CEO of Real Networks

I thought this was quite amusing from ValleyWag:

Remember Real Networks? (Only when you ignore .ram files, right?) The media-distro company may be dead in the water, but when CEO Rob Glaser (pictured) talked to the Guardian, he tried his damnedest to run on pure spin. (Drinking game: Every time the Guardian's Kate Bulkley asks, "So such-and-such?" and Rob replies, "No, such-and-such," take a sip -- a SIP -- of beer.)

Spin rule #1: Take what you can get.

Our business last year was $325 million, which was up from $266 million the
year before and our most recent quarter was $87 million in revenue.

Rob, that includes $39 million Microsoft paid you from your $761 million anti-trust lawsuit. What's your business plan, sue a new monopolist every five years?

Spin rule #2: If you don't have anything nice to say...

RG: In Europe we now download over 100,000 free players a
day.
KB: And how many paying subscribers do you have in Europe for your
players?
RG: We have not broken out the number of subscribers.

Just like I "have not broken out" the number of supermodels I've slept with.

Good times all around. Have a good weekend.

Free Speech?

As many of you may or may not know, I'm not a big fan of Mark Cuban. Sure, what he's done with the Dallas Mavericks is great, but overall, I think he's a moron who happened to be at the right place, at the right time (refering to his $2 Bill that he made on broadcast.com when he sold it to Yahoo).

Cuban was fined $200,000 for stepping onto the court during a recent Playoff Game agains the San Antonio Spurs, and complaining about the officials on his blog. I won't bore you to death and re-hash what he wrote (you can read it for yourself), but in summation, he basically says that he doesn't appreciate the calls of some officials during playoff games, and publicly wonders how game officials are chosen for playoff games.

I'm not so much concerned about the calls of the NBA Officials right now, but I am concerned when someone is required to pay money as a consequence for voicing their displeasure over something. Don't get me wrong, I understand that the Constitution and the Bill of Rights doesn't necessarily apply in a Corporate setting, but what kind of message is the NBA sending when the fine people who complain about the job performance of some of its employees.

Can you imagine if you were fined every time that you spoke up at your place of business? (Although, it almost goes without saying that most people in their place of employment DON'T complain, in fear of retribution. I digress).

The point of the matter is I think the NBA is overstepping it's bounds of the traditional employer/employee relationship when it fines its employees for speaking up against it. From the NBA's perspective, I could understand why it doesn't like its employees 'bashing' its league/officials, but it doesn't give it the right to punish its employees. When this happens, the league doesn't grow, get better, and eventually, the quality of play is diminished.

Love Notes From Iran

Iran today sent a letter to President Bush (apparently, all email being sent to the White House from Iran is being forwarded to president Bush's trash folder) in hopes of trying to difuse a very tense situation, as well as to try and open the lines of communication between the countries - lines that have been formally closed for the last 27 years.

The White House quickly responded saying that the letter failed to address any concerns about Iran's attempts to develop nuclear weapons. Of course, the actual contents of the letter haven't been publicly released so there's no way for the American public to really know what the letter said. For all we know, the letter could be offering complete disclosure of all of Iran's Nuclear Program and this 'conflict' could be over. I digress.

It's really interesting that Iran went to all the trouble of sending a note. For one thing, it means they may be semi-interested in trying to get this little tiff resolved. But why would the Bush administration summarily rebuff such an attempt, when Iran has clearly shown interest in at least talking about the issue?

Frankly speaking, unless a miracle occurs in the next 7 months, I really think we're soon going to be much involved in an armed conflict involving Iran. Bush and Co. enjoy moving the military at their whim too much to pass up another opportunity to bomb the holy hell out another country in the mid East. And let's face it, Bush understands that if he starts bombing another member of OPEC, his retirement account only grows bigger. It would be dumb of him not to do it.

YahooSoft

YahooSoft...the word just rolls off your tongue like Google, or AltaVista or better yet, ...bad idea! In an almost gossipy sounding article today (sub required), WSJ announced that Microsoft and Yahoo have been secretly consipiring to take on Google head-on with Microsoft buying an equity stake in Yahoo.

Microsoft has been busy sipping their Caramel Macchiatto's up in Redmond, trying to come up with an idea to take on the mighty Googlers. Yesterday, it was reported that Microsoft's new version of IE will contain a browser built-in search bar that will query results from Microsoft. Google, in turn has threatened to call in the Anti-Trust bouncers and remind them them about the really mean guys up in the state of Washington. (And I thought nerds never played dirty). I digress.

Taking on Google when it comes to Search is a bad idea - a very bad idea. Google already has a loyal, dedicated following of users. I heard/read something recently that most Web-saavy users already use Google because of how consistantly Google delievers top-notch search results.

Here's an idea (and one that's been echoed across mainstream media for a few weeks now) if Yahoo and Microsoft et al want to take-on Google, why not do it where it's going to hurt Google the most - advertisements. Where could they do this? They could take advantage of PPC marketers who seek to drive traffic to their websites, or websites owned by others. Google has been a real stickler by only allowing one Display URL per website.

If I were Microsoft or Yahoo, I would allow as many Display URL's to be displayed as PPC Marketers wanted to display. There would be no cost to you as you collect a fee every time a person clicks on an ad, regardless of what URL they are taken to.

If Microsoft and Yahoo did this, Affiliate Marketers and Web Marketers would FLOCK away from Google to these other search engines. And Terry, and Bill would be lauging all the way to the bank.

Great "New" Site

I know that I might be a little behind the curve in blogging about this, but I wanted to let everybody know about this new website called Youtube.com

To me, this is exactly what Web 2.0 is all about - new, fresh, and interactive. Along with it's pals like MySpace and Blogger, Youtube allows people to interact by giving them the ability to post video on the Web. People not only post video of themselves, but they also use it to share video with their friends.

Earlier this year, my buddies contstantly sent me updates of the latest and greatest video (most of them being highlights from SNL) on the Web. It started out with a Chronicles of Narnia spoof, and tonight, continued with watching and reminiscing about Joe Namath.

Will youtube, myspace et al fail? Frankly speaking, it's hard to say at this point. Most are way to young to make accurate projections on how they will do after the intial flurry of traffic to their websites slows down. Also, most new websites are more and more relying on Angel or Venture Capital to grow their business (Great article in today's WSJ about this. Sub required) . I do hope, however, that we learned our lesson the first time around - another fall would be even worse than the first.

Couple Quick Thoughts

I'm out at Ad: Tech in SF for the next couple of days. In the mean time, I thought that I would pass along a couple links that I hope you will enjoy:

The Sports Guy had some interesting (read: funny) thoughts about the NBA Playoffs.

MySpace.com Co-Founder Tom Anderson allegedly has his own 'private' account.

Not surprisingly, Angelina Jolie is the world's most beautiful person - according to People.

I should have Republish Thursday available for you tomorrow.

Why You Should Pay People

Yahoo today published a semi-humorous story about an ex-eBay Affiliate who was sent to jail today for five months for sending threatening email messages to Meg Whitman and Pierre Omidyar.

The man claimed he was owed $7200 of back-pay through eBay's Affiliate Program. The reason I found this story particularly amusing is because I work in the world of online marketing and am very familiar with the ins and outs of affiliate marketing.

People who run affiliate websites are a fickle bunch - in many ways similar to sellers on online Auctions sites. Don't get me wrong, for the most part most Affiliates are normal business people. But there are others (typically those Affiliates that run smaller websites) who are, frankly speaking, a pain in the ass to work with.

Under no circumstances are merchants allowed to mess around with how they pay Affiliates. If an Affiliate feels that they were short-changed in any way, they will raise hell until something is done about it. If you don't believe me, be sure to check out Abestweb.

Executive Producer: Starbucks, Inc

In an an interesting move, Starbucks (sbux) is now getting into the business of promoting movies. Akeelah and the Bee is a new movie that is opening this Friday. SBUX is promoting the movie by including it on the 4 million sleeves that it hands out to its patrons daily.

SBUX is not new to the entertainment business. For years it has tried selling CD's in it's stores. I wouldn't call this a successful venture in any way. CD prices in SBUX stores range from $9.99-$19.99. And the artists that they offer are more familiar to SBUX's older customers SBUX also has wireless Web access in many of its stores, where consumers can log onto Itunes and purchase tracks starting at $.99.

Is the movie business a good idea? Frankly speaking, I'm not so sure. The SBUX brand is one of the most recognizable brands in the world. To start branching out and getting involved in businesses (i.e. marketing/advertising) that have nothing to do with your core competencies is always risky. If the movie does horribly at the box office, there's no doubt that the sbux brand will be affected. However, if it succeeds, it will be another reason why sbux will continue to be a solid investment.

Republish Thursday (okay, it's Friday): Why Oil is so High

This week's theme, obviously, has been the sky-rocketing price of Oil. One of my favorite writer's over at MSNBC.com has this to say about why Oil is so high.

April 21, 2006 - When your heart starts racing faster than the digital numbers on the gas pump, you know there’s a problem with the price. And if you haven’t had that shock already, you will soon. Last week, the U.S. Energy Department estimated regular gasoline would cost an average of $2.62 a gallon this summer, up 10.5 percent from last year. Already that sounds optimistic. By the beginning of this week, the average price of regular was $2.79. On Wednesday, the DOE suggested prices might actually get up to around $3 this summer, but wouldn’t remain “that high, on average, over a whole month.” Meanwhile, the price of crude oil—which determines the base price of gasoline—has jumped to record highs, and looks set to climb some more.

Yep, there is a problem. And while oil industry analysts and the Bush administration will make the reasons sound very complicated, throwing in every market variable from refinery capacities to inventories to Nigerian guerrillas, I’ll sum it up for you in one word: “Iran.”

Although Tehran has yet to use “the oil weapon” by cutting supplies—far from it—saber-rattling President Mahmoud Ahmadinejad is learning fast that he can shake up the nervous global energy market with just a calculated remark here or there. In economic language so measured it sounded vaguely Greenspanian, the Iranian president told Tehran Radio this week that “the global oil price has not reached its real value yet.” At that, the cost of a barrel went splashing over the unprecedented $72 mark. “Every time there's an issue with Iran, the oil market freaks out," as one New York analyst told the Associated Press.

Ahmadinejad has a reputation as a wild-eyed provocateur. (How often has he said, in various ways, he’d like to see Israel wiped off the map?) And nothing drives up prices like rumors of war. But it’s the United States and Israel cranking up the volume at the moment. After a Palestinian blew himself up in front of a Tel Aviv falafel stand this week, killing nine people and wounding dozens, Israeli Ambassador to the United Nations Dan Gillerman told the press there’s a new “axis of terror” in the Middle East. “A dark cloud is looming over our region, and it is metastasizing as a result of the statements and actions by leaders of Iran, Syria and the newly elected [Hamas] government of the Palestinian Authority,” said Gillerman, that amount to “clear declarations of war.”

President George W. Bush, meanwhile, remains coy about what military options he may or may not use, eventually, to try to eliminate Iran’s rapidly progressing nuclear research, which Iran says is purely for peaceful purposes—even as it perfects possible bomb-related technologies. And while the clock ticks, every dollar increase in the price of oil brings the Iranian government an extra dividend of roughly $2 million a day, plus the tens of billions reaped in rising prices since 2003.

None of these apparent ironies should be surprising. Iran, the second largest petroleum producer in the Persian Gulf, has sometimes been a frustrating ally and sometimes an avowed enemy of the United States. But it has always been the epicenter of major oil shocks.

Consider the performance of the last Shah. A 1953 coup engineered by Britain and the United States restored him to power after his rather more democratic opponents, who’d ousted him, threatened Western oil interests. “I owe my throne to God, my people, my army—and to you!” the Shah told Kermit “Kim” Roosevelt, the CIA’s man in Tehran at the time. Yet 20 years later the same Shah took advantage of the 1973 Arab oil embargo to ram through prices more than 10 times higher than they’d been in 1970. “Iran will be one of the serious countries of the world,” the Shah insisted, evoking the millennia-old glories of Persia’s past.

As Daniel Yergin writes in his classic 1990 study “The Prize: The Epic Quest for Oil, Money and Power,” after that surge in prices the Shah was soon talking with regal airs about petroleum as a “noble product.” He haughtily advised Western nations that “they will have to realize that the era of their terrific progress and even more terrific income and wealth based on cheap oil is finished.” He talked of the United States, and all of the West, with undisguised disdain.

“Eventually all those children of well-to-do families who have plenty to eat at every meal, who have their cars, and who act almost as terrorists and throw bombs here and there, they will have to rethink all these aspects of the advanced industrial world. And they will have to work harder,” said the Shah. “Your young boys and young girls who receive so much money from their fathers will also have to think that they must earn their living somehow.” Ahmadinejad could lift those lines verbatim to rouse Iranian crowds today, and practically does.
In 1979, when the Shah fell to the Islamic revolution of Ayatollah Khomeini, new oil shocks rocked the world economy. Suddenly there were places in the United States where gasoline was not to be had at any price. (I worked at a service station outside Washington, D.C., during the July 4 holidays that year, reporting a story for The Washington Post. Part of my job was to carry the “Last Car” sign down the long line of motorists, marking the end of hope for those who had waited the better part of a day to fill their tanks. I was offered bribes. I was threatened. But there was nothing to be done.) It seemed as if a whole way of life had ended. By 1980, the price of oil reached highs that, adjusted for inflation, would top $90 a barrel today. That same threshold is approaching now.

Before we get that far, it’s worth considering that Iran’s assertiveness in regional and world affairs seems, quite literally, to follow the market. When the Shah depended on the CIA in 1953 (and the barrel of oil was priced in pennies) he was a more-or-less craven ally. Two decades later, flush with petro-dollars, he was a raving imperialist, who later started Iran’s nuclear program. So, too, with the mullahs. When oil prices were astronomical in the early 1980s, ayatollahs were looking to spread their revolution far and wide. When the price had sunk to about $10 a barrel in the late 1990s, reformists were ascendant in Tehran, and wanted to accommodate the West almost any way they could.

More recently, on the nuclear front, when the mullahs agreed to freeze their enrichment research in 2003, the average price of oil was about $30 a barrel. They again started up nuclear fuel enrichment activities—the same process that can be used to make fissionable material for atomic weapons—last year when the price of oil had reached $50. By the time they announced earlier this month that they’d succeeded with enrichment, oil prices were on their way to $70. Tensions drive up the cost of oil, international pressure inspires Iranian nationalism and increased revenues underwrite the mullahs’ ability to resist.

I’m not sure there’s a quick way out of this spiral. But I do know this: if global oil consumption goes down—and the United States accounts for 25 percent of that—then so will the price of oil. And history suggests that if oil prices fall, so will the ambition and intransigence of any Iranian regime. So if you want to force the mullahs to make a deal, talk peace, not war. And think about trading in that SUV before you end up in the line on the wrong side of the “last car” sign.

This Apple Didn't Fall from the Tree..It Rose..

Apple Computer announced earnings today; among the highlights:

-Second Quarter Profits rose a mind-blowing 41%.
-Revenue for the quarter was $4.36 Billion (up 34% from a year ago, though still below the projected $4.54 Billion).

Most impressive (to me anyways) was the fact that iPod Sales totaled $1.7 Billion, while sales for the Mac totaled $1.57 Billion. More than 8.5 Million units of th iPod were shipped during the quarter, which was also up 61% YoY.

It just goes to show that high oil prices still won't deter people from buying the finer things in life. Now, what was the name of that 50 Cent song that I just heard...

Senator Schumer Calls for Probe

In an update to yesterday's post, Senator Charles Schumer called today for a probe into whether or not big oil companies were in collusion and withholding supplies in an effort to drive up prices.

The average price of gasoline has jumped up to $2.79 (although it was $2.29 here while I was driving home from work this evening).

Frankly speaking, I highly doubt that an investigation like this will go anywhere - especially when we have two ex-oil executives running the country. In the mean time, I'm still looking for a great deal on a Prius.

It Don't Stop...'Cause It Can't Stop

Oil prices settled above $70 per barrel today for the first time since Killer Katrina stormed her way on shore in early September.

Gas prices where I live are relatively low compared with prices in the rest of the donations. I put Premium Unleaded fuel in my SUV this morning and spend $2.53/gallon. These prices aren't that bad, however, the sad thing is, these are prices before the summer driving season starts on Memorial Day weekend - a weekend in which traditionally Gas Stations typically raise their prices $.10-$.15 regardless of what gas prices are currently at.

Normally I'd be fine with this, but if oil continues to be be in $65-$75 per barrel range, it's quite possible that even I could be paying $3 a gallon for gas this summer (goodbye 5x's a week sbux).

The question is, how do we resolve the situation? When we first went into Iraq, I was excited because I thought it meant that we were going to paying $.25 for gas in a matter of weeks. However, we all know how that one turned out.

Now with Iran pissing and moaning about having WMD's, and further instability in the MidEast, the oil situation is anything but stable. The Bush Administration has proposed 'weening' us off Oil, however, how serious can he be about this? He and his family have a vested financial interest in seeing the United States buy oil at the rate that it does.

Another thing, I was watching one of those pathetic morning news show on the always credible Fox News Channel, and actually heard one of the commentators state that "American's are discovering the Hybrid vehicles aren't as cracked up as they first thought they were." Uhm, excuse me? Is that why Toyota Prius' can't stay in stock at my local Toyota dealer? Is that why there's a significant premium on hybrid cars?

Frankly Speaking, we as people DO need to stop relying on foreign oil, but it's not going to be a quick fix. It's going to take time, and it's not going to be pretty. But I think eventually it can be done. Are there alternative energy solutions that can be developed? Absolutely (that is, if all our scientists don't move to another country, I digress). Instead of spending billions on a space program right now (that isn't feasible) maybe we should focus first being able to travel down the street to the local sbux without having to rely on a substance produced mainly by the enemies of the United States.

I will now go back to my venti carmal frap.