Juror is Dismissed in Mattel Trial

Mattel alleges MGA, a competitor, stole the idea of Bratz dolls. MGA's CEO, Isaac Larian, is an Iranian Jewish immigrant. A juror may have influenced the Mattel/MGA case when she told other jurors about her husband's assessment of Iranians: "stubborn, rude, stingy, are thieves and have stolen...ideas."

This comment is rather surprising, given that the founder of eBay is a French-born Iranian (Pierre M. Omidyar); the first female space tourist, Anousheh Ansari, is Iranian; the founder of bebe, a clothing retailer, is Iranian; and one of Google's business founders is Omid Kordestani, an Iranian.

On the bright side, at least the comments weren't considered anti-Semitic or directed at Mr. Larian's Jewish background, so there's some progress there. My take on the issue of Mattel's gripe against MGA? It takes a lot more than an idea and some sketches to bring to market a viable product. Even if the original sketches were designed by someone who happened to be working for Mattel at the time, Mr. Larian obviously took the idea and made it into a viable product. Damages should take into consideration Mr. Larian's performance in terms of advertising his product effectively, investing in international factories to make the dolls, setting up an efficient shipping/export process, hiring the employees, etc.

Unfortunately, any employee who leaves a company who had an inkling of an idea during company time that ends up being successful will be sued. This is like Xerox suing Apple for "stealing" the idea of a computer--it's laughable. A company should not be able to cherrypick ideas through the legal system when it first rejected the idea and did not invest in developing it. If Mattel is smart, it will focus on saving future legal fees (I am not sure if an attorneys' fees provision was available or pled), not fight the inevitable appeal, and settle with Bratz for a small slice of the profits.

Warren Buffett and Bill Gates Talk Economics

Warren Buffett and Bill Gates had an interesting conversation on economics--here's one excerpt:

[I]t just occurred to me that if you don’t trust the government to do a lot of things very well—and business will never trust them to do that; rich people will never trust them to do that—and if, on the other hand, the honor system doesn’t work particularly well in terms of how many people behave (and this idea just occurred to me ten seconds ago so it will take a lot of refining): what if you had three percent or something like that of the corporate income tax totally devoted to a fund that would be administered by some representatives of corporate America to be used in intelligent ways for the long-term benefit of society, This group—who think they can run things way better than government—could tackle education, health, etc. or other activities in which government has a large role. And it would have this forced funding of three percent of corporate profits or some sum like that.

As readers know, I am a huge fan of Warren Buffett. Enjoy the link:

http://creativecapitalism.typepad.com/creative_capitalism/2008/06/bill-gates-and.html

(Conversation took place on May 15, 2008)

Funny: Don't Buy Stuff You Cannot Afford

Steve Martin and the best SNL financial skit of all time--If You Can't Afford It, Don't Buy It!

http://snltranscripts.jt.org/05/05lbuy.phtml

Simple and brilliant financial advice. Just goes to confirm that the new millennium is the age of the comic.

General Electric (GE)

General Electric (GE) is known as a perennial blue chip. But it is also a finance company--see Bloomberg:

http://www.bloomberg.com/apps/news?pid=20601087&sid=axyID3B8K5bU&refer=home

GE holds about $5.3 billion in residential mortgage-backed securities as of June 30, down from $5.8 billion at the end of the first quarter.

GE also reduced its commercial mortgage-backed securities to $2.7 billion, down from $2.8 billion held as of March 31. The company also said it reduced its exposure to subprime credit in its residential mortgage-backed securities to $1.7 billion from $1.8 billion in the first quarter.

It's impossible to gauge the true value of underlying assets because almost all major companies dabbled in complex financial instruments--this is one reason markets are so volatile.

One tip: if you're driving to Mexico from California with a rental car, consider buying GE insurance. Your California insurance does not typically cover liability in Mexico:

http://www.gemexicoautoins.com/

http://www.gemexicoautoins.com/WhyMexIns.html

As you can see, even with the bad loans, GE has plenty of great products.

July 25, 2008: WSJ Letters to the Editor

I've been reading the Wall Street Journal for years, and I've never seen better letters published on the issue of income taxes. From July 25, 2008 newspaper:

By Sim Pace, from Arlington, VA--the spirit of Jefferson shines bright:

"[T]he top 50% of taxpayers paid 97.1% of income taxes in 2006...Isn't that the well-known definition of democracy, the poorest 51% of the population tyrannizing the richest 49%? I suspect Sen. Obama would like to see the pendulum swing even further and have the top third of taxpayers pay all the income taxes, then the other well-known definition of democracy will have been validated: two wolves and a lamb voting on what to have for dinner.

By Bruce Kebbekus from Hotchkiss, CO:

It should be mentioned that letting about half the citizens escape and pay no income taxes will lead, and probably has already led, to voter disinterest and bad government. Too many have no stake in the game.

By Harold Arkoff from Calabasas, CA:

California...receives back from Washington a smaller percentage of income taxes than it pays. A greater burden is placed on the local population to pay for state services which must be paid for by other sources of revenue..."Their fair share" can have more than one meaning. Is California getting a fair share?

What do D.C. and Delaware produce? They are usually in the highest brackets in terms of per capita GDP by state. See

http://www.bea.gov/newsreleases/regional/gdp_state/gsp_newsrelease.htm

Delaware has attracted almost all the major banks to its state by having a pro-business platform. Also, most of us didn't elect the Delaware Chancery Court to decide economic legal issues, but its opinions make waves nationally in business matters. This small state and D.C. have made themselves epicenters of influence despite their unimpressive physical statures (D.C. is a swamp after all).I t's commendable to see a small state and a district attract so much business and influence. At the same time, one wonders why California and Texas citizens don't project themselves as well as these smaller entities. Is this a case of Lennie and George, as Mr. Arkoff implies in his letter?

Money Tips

Here is a fun article with money tips from famous people, including Steven Levitt and Derek Jeter:

http://finance.yahoo.com/banking-budgeting/article/105452/The-Smartest-Advice-I-Ever-Got

I need to think about Mr. Levitt's advice more. Does the advice also apply to small businesses with inconsistent income streams?

Across the Pond: American vs. British Women

I have a soft spot in my heart for the United Kingdom. I attended primary school for a short while in Edinburgh and still have family in London. I was a passenger in my first Ferrari ride (a GTO) in London, and the chocolates and sweets are incredibly richer and better than in the States. Of course, I think British women are wonderful as well. But an article disputes that point, and it is so hilarious and so different from the politically-correct publications we have in the U.S., I had to share:

Initial salvo (Tad Safran):

http://women.timesonline.co.uk/tol/life_and_style/women/beauty/article3029451.ece [Apologies--link has expired.]

[T]he girl giving the [beauty] advice actually did think her friend looked adorable and it was simply like one cannibal asking another if it’s wrong to eat human flesh. Ultimately, English women are like men doing DIY. No matter how lost they are, they refuse to call in professional help.

A perfect example of this was presented to me last week. I was set up with Sophie (I have changed the name) by married friends. Sophie was a truly beautiful girl I used to be friends with, but hadn’t seen in 15 years. I was surprised to hear that she was still single and was excited to meet her again. At dinner, I found myself sitting opposite something that surely would have been happier hunting for truffles in the forests of France or grazing on the grassy marshlands of Canada... 


It’s not entirely Sophie’s fault, I suppose. My friend’s wife didn’t manage my expectations. Maybe it would have been better if she had said: “Tad, you enjoyed The Lord of the Rings. Would you like to meet an orc?”

Counterpoint:

http://www.dailymail.co.uk/femail/article-504812/The-man-called-British-women-ugly-goes-date--Liz-Jones.html

Follow-Up (with extra shovel):

http://women.timesonline.co.uk/tol/life_and_style/women/beauty/article3056296.ece [Apologies--link has expired.]

Women of Britain: Bridget Jones’s Diary is not a documentary. It’s a work of fiction, a fairytale. The fact is that control-top granny pants are simply not a substitute for regular exercise, thoughtful grooming and a healthy diet.

Follow-Up from the Gentler(?) Sex:

http://www.thesun.co.uk/sol/homepage/woman/article571411.ece

I miss the U.K. sometimes. "Femur-sized Toblerones"...you just can't find that kind of acerbic writing anymore. If it weren't for the NY Times, the LA Times, and the Washington Post, Americans would be in danger of having no daily newspapers designed for an audience above a tenth-grade reading level. Sigh.

As for Tad Safran, he is writing at least partially tongue-in-cheek. He's smart enough to know if a woman can't figure out he's joking or laugh at herself a bit, he's probably better off without her.