Wednesday, July 20, 2011

Financial analysis

We got a nice chunky package in the mail yesterday.

I was quite excited. After all, nobody takes the trouble to send a chunky package for bad news, do they? A single sheet of paper - that's a rejection letter. An acceptance contains all kinds of inserts - contract, conditions, instructions for your first day, occasionally even a complete employee handbook. A bulky package must be good, right?

Turns out, not so much.

The package is from Blue Star, a troubled printing company in which we invested some money a few years ago. (Mind you, I don't recall anyone using the word "troubled" back then.) We bought bonds. Now - stripped to its essentials - the company wants us to trade in those bonds for new ones that will be worth considerably less. If we don't, they threaten without much ceremony, they'll go out of business and we'll get nothing.

Well, first thing to note is that times evidently aren't so hard that they can't afford to put together a 150-page, glossy, full-colour prospectus for these new and improved bonds. Mind you, it's a printing company, they probably got a good deal on that.

But something stinks about this offer. How can a company renege on its debts, and continue trading? Surely that's the definition of 'insolvent'. If they offered to renegotiate the debt, that's one thing - but this isn't negotiation, this is blackmail.

See, while we bondholders are being asked to take a scalping to the tune of at least half of our investment (and absolutely no guarantee that it won't yet be 100% - in fact, the de-ranking of our debt makes that even more likely), the shareholders aren't being asked to give up squat. On the contrary: one shareholder in particular, Champ Funds, is offering a loan of $15 million - at an interest rate way higher than we've been offered - in return for getting higher ranking among the company's creditors.

Seems to me, that's not the sort of terms you would offer if you had much faith in the company's future.

I was taught, way back in economics class, that it's shareholders who take the risks - when the company thrives, they get the profits, and when it sinks, they take the hit. Bondholders get a smaller return for a smaller risk. But that's not what's happening here. We, the bondholders, are being asked to bail out the shareholders. (Well, one shareholder in particular, but others will obviously get a renewed window of opportunity to dump shares that would be worthless if the company folds immediately.)

The company's own 'independent advisor' - KPMG - endorses the offer in the weakest possible terms. I paraphrase, but the gist of it is: "on the strength of the information we've been given, we can't be sure that this is a complete ripoff, so we don't quite have sufficient grounds to prevent it from being put".

I say the hell with it. If the company is insolvent, let it fold now. If it isn't insolvent, then it can come up with a better offer than this. Worst case, I'm willing to lose a few grand to uphold the principle that shareholders don't get to just take money from small investors.

It may seem irrational to choose nothing over something, but if the price of 'something' is that your economy is to be run by bandits - I'll take a big ol' handful of nothing, thanks.

Friday, July 8, 2011

Microsoft: digging holes since 1997

For a while there, I was almost starting to like Internet Explorer.

When my bosses told me to "slick up" our website, with scrolling headlines and graduated tints and rounded corners and shadows and all that tired old tat, I rubbed my metaphorical hands gleefully and settled down to learn the very latest web languages (by which I mean, HTML 5 and CSS 3). That didn't take long. But then, as I'd expected, the hard part began: learning how to make these gimmicks work in each type of browser.

I'll spare you the ins and outs of that - the stylesheet is kinda messy, and at almost 600 lines it's about three times as long as it has any business to be, but it works. (It's even technically valid, at least according to

When I handed my designs over to my bosses for feedback, they loved them. The pages, though I say so myself, look pretty cool when viewed on PC, Mac, tablet or notebook. For good measure I even checked them on my Nintendo DS. Lovely. My only negative feedback came from - what else - Internet Explorer 9.

But how? I've got IE9 myself. The same version, on the same platform, looking at the same pages - yet the results are completely different. (For instance: my version of IE9 has no problem with supporting display:table-cell, whereas yours evidently thinks it's the work of the devil.) What goes on?

It took me a whole afternoon to work out the answer to that.

Microsoft, rot their vile souls, have built "handy" features into Internet Explorer called "browser mode" and "document mode". Which means that the same browser can apply completely different sets of rules to interpret the same code.

On paper, like most of MS's output, it's not a bad idea. In practice, also like most of MS's output, the implementation is awful beyond description. See, the thing is: there's no way to control which settings someone else's browser will apply.

Oh, in theory there is. There's a tag you can put in your page header to tell it "This page is meant to be rendered in IE 9". That's annoying enough in itself - why would a browser need to be told not to pretend it's something else? And obviously it doesn't work if the client isn't using IE 9. But what's really winding me up, right now, is that it still won't work even if they bloody are using bloody IE9.

For a partial explanation, look at this unholy monstrosity. But even that is only a small part of the horror. See, while the page author has some minimal control over the "document mode", they have no control at all over the "browser mode", which overlaps with and partly overrules the "document mode". The browser user sets that at installation time - usually without even realising what they're doing, because it's disguised as a question about "how would you like to view the web?". And if you've downloaded the page in "IE7" mode, and then tried to apply "IE9" layout to it, the result is an ungodly hybrid that would make Doctor Moreau blench.

To add insult to injury, the mode that sometimes gets applied without realising it is "IE7". So I have to hack the design to work in IE7, despite the fact that nobody in the entire world actually uses IE bloody 7. (Well, okay. To be strictly accurate, according to our website logs, about 10% of IE users do - although I'm guessing most of those are really using later versions that are just pretending to be IE7.)

What people do still use, in their droves, is IE6, which is an entirely different pain in the fundament.

So now I'm having to insert four, count them, four separate stylesheets - for IE6, IE7, IE8 and (every other browser including IE9). And just hoping to goodness that IE10 works acceptably with the IE9 design.

Keynes, famously, is supposed to have argued that in times of recession, it would be worthwhile to pay the unemployed to dig holes only to fill them in again. That's about how useful I've been feeling this week.

Wednesday, July 6, 2011

Poisoning the cloud

A lot of Europeans seem to have got their knickers in a twist over Microsoft's plain speaking on data protection. Stripped to its essentials, the CEO of Microsoft UK said that Microsoft doesn't do data protection as required by EU law, because US law explicitly forbids it.

I can see why this causes some consternation, but legally it seems quite straightforward to me. Microsoft, by its own account, can't provide a "safe harbor" for personal data on European citizens. Therefore, any European company that tries to store such data in a Microsoft-provided "cloud" service is opening itself to legal action from its European customers (and/or European governments, prosecutors or regulators, depending on the individual country's law). Those companies, in turn, might sue Microsoft for misrepresenting its service (before last week, at least), and they and Microsoft might sue the aforementioned governments and regulators for losses arising from negligence in applying their laws.

All of which could get messy, sure, but it's hardly the gutters-running-red-with-the-blood-of-the-aristocracy.

The interesting question is, why has Microsoft gone out of its way to declare itself incompetent to serve European data storage?

Simple answer: it doesn't want the business. Much better for Microsoft if people don't store data in clouds, but instead spend tens of thousands of dollars on licenses for SQL Server, and training on how to administer it. That's where the profit is.

Of course, in poisoning its own cloud, MS has also poisoned Google's - and every other US company, for that matter, but Google is the one it cares about. And to Google, the cloud isn't a low-margin fringe activity - it's a whole business model.

So what does Google have to say on this story? Not a word, as far as I can tell. Google is just waiting for the whole thing to blow over.

I wonder if a European, at this point, can take out an injunction to prevent companies she does business with from storing their data outside European jurisdiction? Seems to me that the prospect of a jail term for contempt of court would give CEOs more pause than the distant threat of a corporate fine.

Just something for you Europeans to mull over.