A Shuffle of Aluminum, but to Banks, Pure Gold

Hundreds of millions of times a day, thirsty Americans open a can of soda, beer or juice. And every time they do it, they pay a fraction of a penny more because of a shrewd maneuver by Goldman Sachs and other financial players that ultimately costs consumers billions of dollars.

The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again.

This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange, an investigation by The New York Times has found. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman, which owns the warehouses and charges rent to store the metal. It also increases prices paid by manufacturers and consumers across the country.

Tyler Clay, a forklift driver who worked at the Goldman warehouses until early this year, called the process “a merry-go-round of metal.”

Only a tenth of a cent or so of an aluminum can’s purchase price can be traced back to the strategy. But multiply that amount by the 90 billion aluminum cans consumed in the United States each year — and add the tons of aluminum used in things like cars, electronics and house siding — and the efforts by Goldman and other financial players has cost American consumers more than $5 billion over the last three years, say former industry executives, analysts and consultants.

The inflated aluminum pricing is just one way that Wall Street is flexing its financial muscle and capitalizing on loosened federal regulations to sway a variety of commodities markets, according to financial records, regulatory documents and interviews with people involved in the activities.

The maneuvering in markets for oil, wheat, cotton, coffee and more have brought billions in profits to investment banks like Goldman, JPMorgan Chase and Morgan Stanley, while forcing consumers to pay more every time they fill up a gas tank, flick on a light switch, open a beer or buy a cellphone. In the last year, federal authorities have accused three banks, including JPMorgan, of rigging electricity prices, and last week JPMorgan was trying to reach a settlement that could cost it $500 million.

by David Kocieniewski, NY Times |  Read more:
Image David Walter Banks

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If You Care About Music, Should You Ditch Spotify?

On Tuesday, a press release from Nielsen SoundScan announced that Jay Z’s “Magna Carta… Holy Grail” had experienced “the biggest first week for an album in Spotify history,” with “over 14 million streams in the U.S., topping recent new releases from Mumford & Sons, Daft Punk, Justin Timberlake, Kanye West and many more.” The album also had “the biggest single day for an album in Spotify U.S. history.” But here’s something, call it a hedge: Jay Z (whose midlife-crisis red Ferrari was removing his hyphen) sold a million copies of “Magna Carta” to Samsung at five dollars a pop. They were then given away for free to a million Galaxy phone owners seventy-two hours ahead of the official release date, through a specific app, which was apparently buggy, to the dismay of the rapper, who was nonetheless not dismayed enough to return the five million dollars he’d earned before the album was even available for purchase.

The Samsung deal does not sound like the plan of a man who was depending on Spotify for revenue. (The album went on to sell a million traditional, non-Galaxy copies in the first two weeks.) But this is only inference; there have been many explicit complaints about the streaming service. A few days ago, the collaborators Nigel Godrich and Thom Yorke removed a batch of the albums they’ve been involved with from Spotify. Godrich took to Twitter to explain why Atoms For Peace, Ultraísta, and Yorke’s solo album “The Eraser” would no longer be available.This Storify thread condenses tweets from both Godrich and Yorke, who was less vocal, into an adequate summary. (To read every single thing Godrich and Yorke tweeted on this subject, visit their respective Twitter feeds.) The shortest version is that the Spotify model does not favor new artists. The larger grumbling about streaming services in the musician community is that the various services, which are governed by fluid and complex laws that are changing as we speak, favor nobody but the major labels that helped fund and grow some of them.

David Lowery, of the rock band Cracker, recently posted a royalty statement from the “internet-radio” site Pandora and then posted similar statements from satellite and terrestrial radio stations, exposing the extremely low revenues he received from Pandora. Which should probably concern you, at least a little.

On Twitter, Godrich’s main point was that Spotify is geared to reward catalogue recordings (he mentions EMI’s golden pig, Pink Floyd) that have long since recouped any costs and are profitable for labels. The rates for these catalogue streams—though most are unaware of this—are higher than rates offered to smaller, newer acts.

The issue beneath all the complaints about micropayments is fundamental: What are recordings now? Are they an artistic expression that musicians cannot be compensated for but will create simply out of need? Are they promotional tools? What seems clear is that streaming arrangements, like those made with Spotify, are institutionalizing a marginal role for the recordings that were once major income streams for working musicians—which may explain the artist Damon Krukowski’s opinion that music should simply be given away, circumventing this entire system. But first, some words from Godrich, from his Twitter feed, condensed and edited for clarity.

by Sasha Frere-Jones, New Yorker |  Read more:

Image: Spotify

All My Exes Live in Texts

[ed. I don't know... are young relationships really this complicated, or is this an outlier? 36 ex-boyfriends?!]

I have 700 friends on Facebook, 36 of whom I consider exes. Not all are ex-boyfriends—in the eleven years that “boyfriend” has been a name for men in my life, I have referred to nine as “boyfriends.” The rest are men I dated casually, guys I dated disastrously, make-out buddies, one-night stands, vacation flings, and a few boys I never touched but flirted with so heavily they can no longer be categorized as “just friends.” These people aren’t ex-boyfriends but they’re ex-something, weighted with enough personal history to make my stomach drop when they message me or pop up in social-media feeds. Which is pretty often.

There was a time, I am told, when exes lived in Texas and you could avoid them by moving to Tennessee. Cutting ties is no longer so easy—nor, I guess, do we really want it to be. We gorge ourselves on information about the lives of our exes. We can’t help ourselves. There’s the ex who “likes” everything you post. The ex who appears in automated birthday reminders. The ex who appears in your OkCupid matches. The ex whose musical taste you heed on Spotify. The ex whose new girlfriend sent a friend request. The ex you follow so you know how to win him back. The ex you follow so you know how to avoid her in person. The ex you watched deteriorate after the breakup. (Are you guilty or proud?) The ex who finally took your advice, after the breakup. (Are you frustrated or proud?) The ex whose new partner is exactly like you. (Are you flattered or creeped out?) The ex whose name appears as an autocorrection in your phone. (Are you sure you don’t talk about him incessantly? Word recognition suggests otherwise.) The ex whose new partner blogs about their sex life. The ex who still has your naked pictures. The ex who untagged every picture from your relationship. The ex you suspect is reading your e-mail. The ex you watch lead the life you’d dreamed of having together, but seeing it now, you’re so glad you didn’t.

My peers and I have all these exes, in part because we have more time to rack them up before later marriages, because we’re freer about sleeping around, because we’re more comfortable with cross-gender friendships and blurring sexual boundaries, because not committing means keeping more love interests around as possibilities, and because the digital age enables us to never truly break up. We don’t have to shut the door on anything. Which is good, because shutting the door on something is not something we ever want to do.

by Maureen O'Connor, New York Magazine |  Read more:

Image via: Coolchaser

[ed. Sorry for the interuption. Traveling again and just got back. Posts will start again soon.]

Mark Tipple, Escape
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Barack Obama, Punahou School basketball team, 1977.
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Alex Webb, View from a barbershop near Taksim Square, Istanbul, 2001
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Ben Quilty, Whytie
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Fishermen load their catch of sardines into crates on the Adriatic Sea, May 1970. James P. Blair, National Geographic.
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Unhappy Truckers and Other Algorithmic Problems

[ed. See also: The Trucker and the Professor.]

When Bob Santilli, a senior project manager at UPS, was invited in 2009 to his daughter’s fifth grade class on Career Day, he struggled with how to describe exactly what he did for a living. Eventually, he decided he would show the class a travel optimization problem of the kind he worked on, and impress them with how fun and complex it was. The challenge was to choose the most efficient route among six different stops, in a typical suburban-errands itinerary. The class devised their respective routes, then began picking them over. But one girl thought past the question of efficiency. “She says, my mom would never go to the store and buy perishable things—she didn’t use the word perishable, I did—and leave it in the car the whole day at work,” Santilli tells me.

Her comment reflects a basic truth about the math that runs underneath the surface of nearly every modern transportation system, from bike-share rebalancing to airline crew scheduling to grocery delivery services. Modeling a simplified version of a transportation problem presents one set of challenges (and they can be significant). But modeling the real world, with constraints like melting ice cream and idiosyncratic human behavior, is often where the real challenge lies. As mathematicians, operations research specialists, and corporate executives set out to mathematize and optimize the transportation networks that interconnect our modern world, they are re-discovering some of our most human quirks and capabilities. They are finding that their job is as much to discover the world, as it is to change it. (...)

A mathematician claimed the prize, and a regal $10,000. But the contest organizers could only verify that his solution was the shortest of those submitted, and not that it was the shortestpossible route. That’s because solving a 33-city problem by calculating every route individually would require 28 trillion years—on the Department of Energy’s 129,000-core supercomputer Roadrunner (which is among the world’s fastest clusters). It’s for this reason that William J. Cook, in his book In Pursuit of the Traveling Salesman, calls the traveling salesman problem “the focal point of a larger debate on the nature of complexity and possible limits to human knowledge.” Its defining characteristic is how quickly the complexity scales. A six-city tour has only 720 possible paths, while a 20-city tour has—by Cook’s quick calculations on his Mac—more than 100 quadrillion possible paths. (...)

By now it should be clear that we are not talking just about the routing needs of salesmen, for even the most trenchant of regional reps does not think about hitting 90,000 far-flung burghs on a call. But the Traveling Salesman Problem, and its intellectual cousins, are far from theoretical; indeed, they are at the invisible heart of our transportation networks. Every time you want to go somewhere, or you want something to get to you, the chances are someone is thinking at that very moment how to make that process more efficient. We are all of us traveling salesmen.

by Tom Vanderbilt, Nautilus |  Read more:

Image: Peter and Maria Hoey

Francis Bacon: Triptych (1976)
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The ‘Shift the Goalpost’ Home Sale

It’s a deal. Or is it?

After apartment-hunting in Williamsburg, Brooklyn, for months this spring, Dr. Ronald Nath finally lucked out with a two-bedroom duplex at the top of a condominium, listed at $800,000.

A day after a crowded open house, Dr. Nath, a Massachusetts surgeon, offered $803,000 for the unit, which was to be a home for his son David, a television news producer. But because of its location and the outdoor spaces on both floors, the unit attracted more than a dozen offers, which prompted the seller to request higher bids.

For his “best and final” offer, which usually signals the end of the haggling process, Dr. Nath promised $912,000, which seemed to do the trick. The seller congratulated Dr. Nath and told him the unit was his; a contract was drawn up.

Not so fast. A few days later, like a kite in a gust of wind, the price soared again, to $995,000. Insulted by what he described as being “played,” Dr. Nath refused to raise his offer and ultimately lost the unit to a buyer who plunked down $1.1 million. “I was absolutely outraged,” he said. “When you give your word that a deal is done, you’re supposed to fulfill your agreement.”

A real estate deal, like any other business transaction, isn’t ironclad until signatures wind up on a contract, said Tom Le of the Corcoran Group, the seller’s broker, who defended his clients’ right to get the highest possible price for their unit, even if it left some raw feelings.

“Of course Dr. Nath is going to be upset, because his heart was set on the apartment,” Mr. Le said. “But the truth is, Dr. Nath was given every single opportunity to match the price.” He added that after watching home values plummet over the last few years, sellers finally have relief. “They’ve been scraping by for years just to get to this point.” Both the seller and the buyer declined to comment, said Mr. Le, who added that even he had been taken aback by the intensity of interest in the home.

Whether caused by economics, or the unseemly equivalent of moving the goalposts to prevent touchdowns, experiences like Dr. Nath’s are becoming more common in a market with a huge pool of buyers chasing a limited number of homes.

Not too long ago, an accepted offer marked the home stretch of the deal: the expectation was that the two sides would sign a contract and a deposit check would be cashed a few days later. Now, as sellers go back on their word and repeatedly increase their asking prices, “best and final” often seems to mean “O.K. and almost there,” according to real estate industry sources.

by C.J. Hughes, NY Times |  Read more:

Image: Nancy Doniger

Guy Mendes, Okoboji
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Paul Wackers
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Catherine Ryan
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Ryan Adams

Streets Can Be Public Spaces Too

As I wrote last fall, to move more deliberately toward anything resembling a sustainable future, we need to use land more efficiently, building more compactly, with higher densities of homes and businesses per acre than we built, on average, in the late 20th century. We particularly must do this in two circumstances: by retrofitting or "repairing" what are now low-density suburbs with aging commercial buildings going out of service, and by reinvesting and rebuilding in disinvested parts of central cities and older towns and suburbs. While I am on record as saying that we don’t necessarily need high densities to achieve these improvements, we certainly need to do much, much better than sprawl.

A growing segment of the market is ready for more urban environments, but for young urbanites to remain committed to city living and more walkable suburban environments as their life circumstances evolve, they will need higher quality urban places than we have offered in the recent past; and they will need relief from the sometimes harshness that unmitigated density can bring. It is the urban commons – the parks, plazas, streets, greenery and public facilities we share or in which we have a collective interest – that have the greatest potential to provide these things. As I argued earlier this year, sustained success – and successful sustainability, for that matter – require that there must be a "there" to the neighborhoods, cities, suburbs and towns we inhabit. (...)

There is no better place to start than with our streets, our most plentiful and visible parts of the urban commons. And I would offer as a first principle that a street is not just a "street"; a road is not just a "road." We have come to think of streets and roads as conduits, particularly for motorized vehicles: viaducts for getting us from point A to point B as efficiently as possible. Anything that slows us along the way is viewed as a detriment.

There are probably some roadways (inter-city freeways, perhaps; but not city streets, I would argue) for which vehicle travel efficiency is still a supreme goal. But that objective should not be allowed to define all streets, particularly in urban and suburban areas. My friend and street-design mentor Victor Dover, in an excellent essay on the subject for the just-published second edition of the Charter of the New Urbanism, reminds us that streets have historically been regarded differently:

Our society once created many different types of streets. A street was not just a conduit for moving cars and trolleys through, but also a place in its own right for socializing, entertainment, commerce, and for civic expression. Pedestrians (and their natural allies, the cyclists) ruled. (...)

But, when I say that a street is not just a "street,” I mean that it is not just a surface for motorized travel. It is also the sidewalk, the curb, the trees and “street furniture” that line it; the facings of the shops, homes, and other buildings and uses along the way. It is not just about transportation, but also about civic definition and social and commercial interaction. It is a system, at a minimum, and should at least aspire to becoming a place, as Victor asserts.

by Kaid Benfield, The Atlantic |  Read more:
Image: Courtesy of ITE and CNU