Transplanting a Seattleite

I took T. over to HG today for his volunteer shift. Unfortunately — and this is a risk with automation — they weren’t expecting him, and they want him to have a buddy when he volunteers, and they want us to provide a buddy. Not sure if or how that is going to happen, but we’ll try.

Imperfect Foods arrived. It would have all fit in one box, and yet, it arrived in two. I think their algorithm for figuring out how many boxes to use breaks down when the dollar amount vs. volume of goods is high.

T. went for a bike ride.

R. is out for a bike ride.

I got a walk with M.

It is very hot today.

I started working on the A’tuin lego build. A reddish brown 1x 8 plate snapped on me. I stole 2 1x4 plates from the 31120 set to use in place of the missing piece.

I’ll be taking A. over to the jr hi for her Connections Open House a little later today. We are going to drive, because, as I noted above, it is very hot today.

Matt Levine’s column at Bloomberg has included stuff about the costs associated with sending out proxy materials. I find this all a little mysterious; it’s profoundly difficult to get the paper switched to e-form for a lot of financial stuff, and honestly, I don’t even understand why I get any of it in p- or e-mail. I should just log into my account and do everything there. It is bonkers to even send me anything. That entire industry runs on spreadsheets and it shouldn’t.

I have numerous starts for blog posts on subjects I want to comment on. The entries wind all over the place before getting near the point I want to make and I ultimately post them my-eyes-only. So I'm going to give up and just bloviate.

(1) The conservative bloggers responsible for "Weinergate" are going to regret it. It's really obvious that Weiner didn't post that picture. It will probably eventually become painfully clear who did post that picture. There's lots of time for all this to shake out before the election. It will only serve to make Weiner look like a class act for being such a sport about it, and it will make it incredibly hard for any real scandal involving a Democrat or progressive candidate or issue that might show up between now and Election Day 2012 to get much traction. Also, old skool journalism looks really stupid in this kind of incident: the two-sides-to-every-story is hopelessly inadequate to conveying what's really going on here and is too obviously exploitable by bad actors, and there is an alternative: actual investigation. A lot of people _say_ that newspapers used to do real investigation, but I think that probably happened before 1990.

[ETA: Wow. Confession time:

http://www.cnn.com/2011/POLITICS/06/06/new.york.weiner/

Looks like Breitbart and company got smeared undeservedly.]

(2) Goldman Sachs is in seriously deep shit. I'm not exactly sure why their previously bullet-proof existence has become so problematic lately. It's not that they're doing worse things; it's that it's apparently no longer possible to divert all prosecutorial attention.

(3) It's going to take 1-3 more rounds of speculative amplification of price swings before we're prepared to keep margin requirements "permanently" "higher" (quotes are to indicate "for suitable definitions of"). But I'm starting to believe that it will really happen. Previously, the debate was between, "it's all the fault of speculation!" vs. "speculators don't really do anything except improve liquidity". Now, the voices saying, "you do realize they add 25% or so to volatile price swings, right?" are finally getting some traction. Not a lot, but a little. We're slow to learn, but we often _do_ learn. Eventually.

Really, sorta weak to go after this size audience after the previous entries, but hey.

http://reviews.cnet.com/8301-18438_7-20011038-82.html

General category of, I am not impressed. As in, walkitout is not impressed by the cnet guy being not impressed. It's a little hard to know where to start, so I'll just dive right in without attempting to prioritize. When I stop mocking, it isn't because I ran out of material; it's because I preferred the prospect of sleep.

"I'd like to see gross revenue from e-books vs. gross revenue from hardcovers."

Again, hard to know where to start. So I'll just go after the nut, nit, whatever you want to call it: does this guy mean what he's saying? I mean, _obviously_ Amazon is never going to turn over this information. From one perspective, gross revenue doesn't matter a bit. Wouldn't _you_ rather be in a business where you sold something for a dollar and made fifty cents on it than a business where you sold something for ten dollars and made a nickel on it? From this perspective, what you really want to know is net margin. From a very, very, very different perspective, gross revenue _is_ an interesting number _if Amazon is still using free cash flow to fund growth_. If they are, and the effect of growing e-books (at the cost of hardcover growth or even maintenance), then they might have less free cash flow to pay for other things. Do I _think_ this guy is sophisticated enough to want to know this? No. In fact, I wonder if he understands that as a potential issue. Which it probably isn't anyway. Any more, anyway.

Here's why I just don't think he's got that much going on. The next point he raises is:

"Just how many e-books sold are self-published titles? The Kindle Store is literally flooded with self-published titles and many of them sell between 99 cents and $3.99. Some self-published authors are doing very well because they've written a decent book or books that are priced cheaply. Cheap sells these days."

Again, wouldn't _you_ rather be in a business where you sold something for a dollar and made fifty cents on it than a business where you sold something for ten dollars and made a nickel on it. If you take a look at the royalties on the stuff published directly on Amazon (either at the 35% or the 70% rate) and figure the amount to Amazon, and then you compare some of their kindle bestsellers not under the agency model and figure a payment of 40% of list on lowest-priced physical format currently available for sale new due to the publisher, you might not think it matters whether stuff came from the big 6 or the great unwashed. In fact, the great unwashed might start looking like an awesome supplier.

Here's a fun one:

"On the iPad, iBooks is currenly listed at #1 under free book apps, the Kindle app is listed #2, and the Barnes & Noble app is number #3, though the Kindle and B&N apps tend to flip flop places. So one would presume that Apple and B&N are very competitive on the iPad, which has already sold well over 3 million units."

Downloading the apps at approximately the same rate != buying content through the apps at approximately the same rate. And this is a fairly important distinction.

Another gem:

"Sony and scrappy upstarts like Kobo are also trying to get in on the e-book game, though consolidation seems inevitable."

Makes you want to weep for Sony, doesn't it? Being classed as "trying to get in on the e-book game", when for a good chunk of a decade, the Sony Reader was The Game in Town when it came to e-books?

I'll just wrap it up with one more:

"And while the The New York Times and the American Publishers Association say that industrywide sales of hardcovers are up 22 percent this year that seems hard to believe, especially since e-book sales have allegedly quadrupled since last year."

Here is what 2009 looked like:

http://www.publishers.org/main/IndustryStats/indStats_02.htm

Notice that 2009 was down from 2008. I'm not entirely certain where that 22% is coming from (altho I saw it in the Miller article I poked at earlier). My best guess is it is coming from here:

http://publishers.org/main/PressCenter/Archicves/2010_July/MayStatsPressRelease2010.htm

In any event, if you take a look at the numbers coming out of that group over time, they would seem to be tracking the economy as a whole, and nothing else in particular. Which is to say, if you think being up 22% is a great thing, you should be excited about the way the economy in general is going. No? Not excited? Still focused on that jobless rate? Well, that's about how you should be feeling about the rate at which hardcover books are selling, too.

Perhaps Mr. Carnoy was in a dark closet somewhere completing his recently published book and therefore unaware of the recent economic difficulties?

But now that I think about it, maybe Carnoy should get some points for that observation, that ebook sales have increased a lot faster than hardcovers. Not very many points, because he's wrong on by how much. Here's what that group has to say from the above link:

"E-book sales grew 162.8 percent for the month ($29.3 million), year-to-date eBook sales are up 207.4 percent. Year-To-Date E-book sales of the 13 submitting publishers to that category currently comprise 8.48 % of the total trade books market, compared to 2.89% percent for the same period last year"

There _is_ a story here. From this same press release: "The Adult Hardcover category was up 43.2% percent in May with sales of $138.5 million; sales for the year-to-date are up by 21.7% percent." That's probably where the 22% is coming from. But a lot of other categories are _down_, month over month and YTD: adult mass market, children's/YA hardcover and paperback. Adult paperbacks were mixed: down for the month but up for the year. That hardcovers were growing with some vigor in conjunction with ebooks growing by leaps and bounds suggests what the story really is.

(1) It's a lot easier to grow from a smaller base. The base on hardcovers is smaller than the base on paperbacks. And ebooks are smaller still.
(2) In this particular economic recovery, high end retail is rebounding surprisingly. Altho I still can't find any print/online coverage, Bloomberg's rotating headlines included the astonishing "Nordstrom's will replenish goods which sold out during sale". What they mean is that Nordstrom's had sold out of a bunch of high end items in the first _hours_ of their anniversary sale.

Let me translate that for people who don't shop at Nordstrom's. The "anniversary" sale is the sale they have right now, in which during the heat of summer, you go into a highly airconditioned softgoods department store to buy fall and perhaps winter clothing that is somewhat discounted the first few weeks it is available for sale, and which will go to full price in August. Nordstrom's _does not_ clear the racks at this sale. That's not the goal. At all. The fact that it happened means there was a huge upside surprise. I _know_ that this happened, because the sale started last Friday and I tried buying the tote bag on the bag cover of their flyer online and failed. I tried buying it in person on Saturday and failed. Because _it had already sold out_. Let me be utterly clear: on sale, it was over $300. For a tote bag.

Here's the real story line. Relatively better off people are feeling okay spending again. They're out there at Nordstrom's. And they're online at Amazon. And at the Apple Store. And buying hardcovers at the chain bookstores. It's good for the economy that these people are shopping. And people involved in making and selling physical books can be happy that sales in some categories are up, but they should worry a lot about the idea that the people who feel comfortable spending money are signing up for the gadgetry at a good clip. Because it is just not clear when everyone else is going to feel okay spending money again on anything even remotely discretionary.