Michael Gracie

eBay has been successfully sued by Louis Vuitton & Company over brand fakes being sold on the site. eBay may have lost this case because the courts are unable to discern between platforms and the users of said platforms, but there’s a bigger issue at hand. eBay maintains that the companies suing them are more concerned with controlling their respective markets:

“If counterfeits appear on our site, we take them down swiftly,” eBay spokeswoman Sravanthi Agrawal said. “But today’s ruling is not about counterfeits. Today’s ruling is about an attempt by LVMH to protect uncompetitive commercial practices at the expense of consumer choice and the livelihood of law-abiding sellers that eBay empowers every day.”

I’m inclined to agree - everyone wishes they were DeBeers, but the way eBay is spins this could make one think they are the sole victim here. In actuality, I think that these litigants are inadvertently killing their own market with their efforts.

The luxury goods set, the primary targets here, rely on consistent turnover of their product to maintain their appeal. Each year new designs come out, and are paraded across magazines - the affluent, early adopters (the core customer base) are first to grab the goods. But these “must have now” industries don’t rely solely on the top tax bracket - if they did they wouldn’t bother advertising - instead they would rely on the word of mouth circling elite cocktail parties. No, there is a secondary market that wants to be like the elite, and their avenue for “upper-crustship” is simply looking the part. These wannabes can’t really afford draping the latest LV bag over their arm each and every season, but they mortgage themselves to the hilt to do so anyway.

And when the extraordinarily overpriced item shows up on the credit card bill, they pass on last season’s via any means they can to get that bill paid - one of those means just so happens to be an internet site called eBay. eBay is marketplace, and marketplaces provide liquidity - all Louis Vuitton and the rest of their ilk are doing when they sue eBay is reducing that liquidity. It’s no different than if the SEC, the NASD, and the Fortune 1000 got together and declared that secondary stock sales could no longer be executed via an online brokerage account - their shares would plummet thereafter.

I suspect the volume of brand-named handbags being hucked will start doing the same fairly soon.

UPDATE: Ditto.

Cycled and fished instead - not regretting it either

• Sam Zell “bought a terrible business” - newspapers. I think Zell has it right when he says newspapers have to give customers what they want, not what some internal agenda prescribes. As a result, I admire the man, and hope he doesn’t wind up paying a terrible price.
• Is Yahoo! manipulating bloggers? Doubtful - such action would create even more of a black purple eye. If anything, it’s more likely a renegade faction within. Then again, blog manipulation (i.e. shutting them down) seems to have found its way into the political process. Quelling discontent, or just one more way of saying blogs are really starting to matter?
• Should Congress let home prices fall? You’ll get a resounding “yes” out of me - propping up asset classes, particularly right before elections, is a way for politicians to feign working for the better good. Unfortunately, situations generally wind up worse as a result, and history has a way of repeating itself. You’ve been hearing about government’s plans for saving the housing market going on a year now - nothing seems to be sticking, and maybe that is the best possible outcome.

And my prediction for the week…

• Citadel Investment Group will soon make an offer to purchase the country of Iceland. Citadel bought multi-strategy fund Amaranth Advisors when it made bad bets on natural gas. It bought Sowood and portions of E*Trade after their sub-prime dice rolls. Now banking is melting down, and the volcanic island of Iceland is going with it. Why not?

UPDATE: Via Steven Pearlstein…

Since last June, we’ve seen a fairly consistent pattern to the economic mood swings. Every three months or so, there’s a round of bad news about housing, followed by warnings of more bank write-offs and then a string of disappointing corporate earnings reports.

Let’s not forget the government announcements of salvation immediately thereafter. Me thinks Mr. Pearlstein is spot on, and you should read the whole thing.

Right up front - I’m declaring for the record a few rules of thumb worth following when you venture into the upper section of Cheesman Canyon. First, if you are addicted to cookies and milk, don’t attempt to put even moderate mileage on your freshened mountain cycle the day before you make the trip. And even if you are in really good shape, try not to run a half -marathon within the previous 24 hours either. In other words you need your legs, both of them, running without a hint of lactic acid having burned within. Unfortunately, I’m a day late in pointing this out, and the subjects at hand suffered as a result.

The hike in sucks. Unless you are a world class mountaineer, you should not attempt this journey under any circumstances. Don’t even think about this trip - it isn’t worth it so stay away! Ok…the hike in is a challenge, but the fishing has the potential to be world class, so wear good boots and bring plenty of water.

Onward to fishing

We were pretty darn excited when we arrived. Reason: a quick stop into a local shop on the way had us thinking the flows were in the upper 200s. I thought this a bit strange, being as the flow was in the mid-300s and climbing just a day before, and this isn’t exactly late summer we’re talking about here. We parked and trekked in, using llamas to carry our gear, which can be rented from an nearby outfitter for about the price of a tanker full of crude donning backpacks. When we arrived four days later, low and behold (you can skip the low) the flow was running at what appeared to be in the mid-400s. Dreams of 3X tippets danced through my head, but these fish are brilliant and they visit their optometrists regularly - tricky battles lay ahead.

I started the morning on fire - with a football shaped rainbow in the net roughly a minute after wetting my line. Two more hookups and some pulled hooks convinced me to venture downstream a little further, and Corey did the same. We repeated this process for the better part of the day - a hookup here and there, a quick struggle with the heavier flow and tight quarters, and then onto boulder scaling and more hole picking. By two o’clock we decided to move back upstream, after realizing that we had forgotten our rappelling harnesses - an absolute necessity in this rugged and desolate land trudging around in felt soles and/or water shoes more suitable for the beach were making our lives difficult. And as the sun moved over and afternoon clouds passed by things picked up.

Corey had been fish-less all morning, so we set up shop in the run that had produced for me early on. My colleague was in prime position, and the tone quickly changed - with a couple of spincast-laden onlookers peering from the far side of the river, we got into hungry trout every fourth or fifth cast.

Not long into the afternoon foray, I had just finished securing digital proof of Corey’s fishing prowess (to end once and for all his wife’s suspicion that we were spending our time in sports bars when we said we were fishing), when he proclaimed he had another on. I was getting tired of playing net boy, and told the discoverer of the now infamous Corey’s Slough that he was on his own. This defiance lasted about a minute, as I quickly grew more weary of my colleague’s cries for assistance combined with the view of his rod perpetually doubled over. The take wound up being a 20+ inch rainbow that Corey proclaimed was his biggest ever (the guy has been fly fishing precisely four times in his life). The fish, however, had put up quite a struggle, so rather than memorializing said Oncorhynchus mykiss in flash memory while she gasped for breath, we unhooked her while in net and in water and gently rolled her out. At first she looked like she was in trouble, first dropping to the bottom and then briefly turning on her side. I thought I was going in head first to play doctor, but the moment I gestured for a full-wet wade she got her bearings straight and scurried into a deep pool. Aquatic crisis averted.

For the day we managed four apiece, netted - taking into account the arduous twelve day expedition that only a team of well trained sherpas should consider how spoiled some of us (i.e. me and the mice in my pockets) have become with the fishing on the South Platte, I personally would have considered making a sacrificial lamb out of my gear. But we also lost roughly twenty to pulled hooks and popped tippets on downstream runs, meaning the action was good so we thought ourselves quite lucky. The general fly selection and “great drift” pattings on the backs ensued instead.

Flies of the day were…
- Mercury RS2s in green/black and gray, sizes 18 and 20
- Foambacks in black and brown, sizes 16 to 20
- UV-winged emergers, black, sizes 18 and 20
- Flashback pheasant tails, size 18
- Discos in green and white, size 18

I also found quite a few larger tan larva in the grass - I suspect thread midges in whites and tans, up to size 16, as well as smaller tan San Juans, would have done the trick as well. A few caddis fluttered by every now and then, but nothing like I saw a few weeks back - and there was no top-water action (even in the warmer back-eddies) to confirm a switch to dries.

As we changed socks and put on the walking slippers, a sense of foreboding overcame us both. What were the chances a friendly helicopter pilot/fly fishing fanatic might happen by and pluck us out in exchange for a few good stories?

No chance at all. Did I mention the hike out is even worse than the hike in?

My neighbors’ four year old daughter made cookies today. The family knows I fish.

Rainbow trout and Bluefish

A couple of Stegasauruses too, although I don’t think anyone makes tippet for those.

I’ll note I’ve never see fish disappear so fast - they must have known I was coming .

Only happened once because the trout are now dead!

Wyoming Gov. Dave Fruedenthal figured ten water skiers in Lowell were more important that tens of thousands of young brown trout. He ordered the flows to the Bighorn River cut to 1,500 cfs (i.e a trickle), and now an entire year’s worth of wild fish are gone. Adding insult to injury (actually, death), the spring spawning rainbows had to move someplace else too. A further blow (as if you needed one) - within two weeks of Wyoming Waterski Fest 2008 the river management authorities realized that there was a record snowpack in them hills, and they pumped the flows up over 8,500 cfs. Now the kayakers without health insurance couldn’t even enjoy the river.

Two questions:

• How many water skiers actually enjoy running frigid water when the average air temp is in the upper 50’s/low 60’s?
• When did the same handful of skiers set up their political action committee?

(h/t to Moldy Chum)

Via Bloomberg:

Rising consumer prices will leave more U.S. consumers unable to pay their debts and may lead to a “financial tsunami,” according to Bennet Sedacca, president of money manager Atlantic Advisors LLC in Winter Park, Florida…

Sedacca wrote that current financial-market conditions remind him of “someone standing on a lonely beach, armed with only a small bucket, trying to stop a rare tsunami that hits the shores. It is how I feel about our markets and the tools being utilized by the Federal Reserve, the European Central Bank and other regulatory bodies. They are overmatched for what they are facing and, worse yet, they helped create the mess in the first place by being far too easy with money and debt creation.”

I’m tossing in the chart that Bloomberg’s site left out:

I suspect the Central Bank is going to meet a pervasive lack of cooperation with regard to quelling international demand - the situation reminds me of how “uncoordinated” world partners (i.e the U.S., Germany and Japan) became before the 1987 market correction. It seems raising rates may only serve to exacerbate the in-house financial crises - meanwhile, if Sedacca’s thesis is correct, demand for (at least) domestic goods and services is likely to falter regardless of Fed action.