Thursday, July 21, 2011

Today a single link about China (and Apple)

This post is a gem:


PS. I have had extensive comments (especially from journalists) about the last post.

I am a left-of-center Australian who has lived with Rupert Murdoch far longer than most Americans. If you could not discern that the last line of the last post (about News Corp being the only remaining ethical newspaper company) was humor then Americans are even less able to detect dry humor than I thought. However there was an important point made which is that most journalists - including those that are beating up on Rupert Murdoch - would have a big problem with a proprietor who inquired into how they obtained certain stories.

Rupert Murdoch was always the most interfering of proprietors. That was (correctly I think) the main criticism most journalists had of him. But now they have a different standard: he should be actively aware of how his journalists are sourcing the stories to ensure that illegal methods are not used. That I think is having it both ways - and they want it both ways because (I think for good reason) they actively despise Rupert Murdoch.

For comment.



Robert in Chicago said...

It is sad that the world needs an overly rational hedge fund manager to point out a glaring example of when journalists -- who are members of the human race -- have biases and impose inconsistent standards on others. The Daily Show's skewering of Fox News's coverage of this affair made a similar point in more amusing ways.

Robert in Chicago said...

I had not clicked through your link until now. You know I have been involved in China stocks for four years, both getting burned as a long in the sector decline as the frauds started coming out and shorting ~30 suspected or known frauds. And yet all I can say is: Holy @#$%.

Kid Dynamite said...

amazing AAPL link... I'm unclear on one thing: are these counterfeit stores selling real AAPL goods or counterfeit AAPL goods?

John Hempton said...

They are probably selling a little bit of both.

My guess - and it is a straight guess - is that Apple's suppliers are leaking a little - so some of it is "genuine" but Apple makes no margin.


Jonathan said...

I'm a little thrown by the circular nature of the argument.
You say that
1)journalists despite Murdoch because he was a meddler.
2) Journalists now criticise him because he was "ethical" in not knowing the source. (ie we can't have it both ways)

Yet isn't the point of most comments on your previous post that given 1) then 2) is a somewhat less plausible statement. Similarly were Murdoch actually ethical from the start then it is considerably less likely that 1) would have happened.

There is something deeply corrosive about the culture and ethics that seem to have pervaded some of Murdoch's papers. Even if he had no direct knowledge of individual actions of criminal activity (and I would certainly not wish to libel a rich and powerful man by suggesting that he did), then he certainly was responsible for an erosion of ethical values at once fine papers.
May I point you to a rather famous comment of Murdoch's on the publication of the fake Hitler Diaries. Just as the paper was realising that the diaries might, in fact, be fakes after the historian who had authenticated them (Lord Dacre) said he had changed his mind. The editors called Murdoch for his advice. It was "Fuck Dacre, publish"

Jonathan Rosenthal
The Economist


Richard said...

Well said, Jonathan Rosenthal!

Anonymous said...

I knew someone importing fake iphones into Australia a few years back (only a teenager...)

Couldn't tell the difference externally until it fried itself when charging

They could have only gotten better in the meantime

Bruno Ronchetti said...

Hi John,
I have clicked through the link and had a sort of deja-vu.

Around the corner here in Milano there is a store with exactly the same look and feel. This small chain (consisting of two or three shops in town) was established a very long time but a guy who "believed" in Apple products and wanted to create a dedicated retail space. This was a long time before Apple set-up its dedicated retail channel.

Nowadays this guy is a "premium reseller" of Apple (100% legit, I think) and lives happily along with the official Apple store.

Are we really sure that the story in China is not the same?
Regards. Bruno.

Anonymous said...

John, would you mind elaborating on your thoughts on the linked story? What in your opinion are the implications of this story for Apple? Is ther anything that Apple can do about this, and is the message ultimately that they cannot make money in China?

Eric Titus said...

To start, loved the link. I'm not going to spoil it for anyone who hasn't already clicked through aside from saying, "wow".

Regarding the NoW affair, I don't think it's unreasonable to hold leaders at News Corp accountable for illegal practices that went on at the company. To start, there have been well-publicized accussations about phone hacking since 2006, but no action appears to have been taken to solve the problem. And even if we would prefer an editor to be hands-off much of the time, we'd expect them to take a closer look if they had cause to suspect wrongdoing. Similarly, if I saw an article about how Siemens bribed foreign officials to get contracts, I would not immediately think that the company was responsible. But if I saw them paying out legal fees of anyone associated with that affair, and it surfaced a few years later that bribery was widespread at the company even after those allegations, I would hold the company morally, if not legally, responsible.

Anonymous said...

Is this so different than the USA?
Here in New York there are a lot of "fake" Verizon stores. They have a big Verizon logo on the sign but are really just resellers.I am sure many are fooled into thinking they are buying from an official company store.

Anonymous said...

J Rosenthal,

'In December 1996, a Florida couple, John and Alice Martin, who sounded suspiciously like union goons, claimed to have inadvertently tapped into a phone conversation between then House Speaker Newt Gingrich and House Republican leadership.

According to these Democratic and union activists, they were just driving around with a police scanner in their car, picked up a random phone conversation and said to themselves, "Wait a minute! I could swear that's Dick Armey's voice!"

Luckily, they also had a tape recorder and cassette in their car, so they proceeded to illegally record the intercepted conversation and then turned the tape over to Democratic Rep. James McDermott -- the top Democrat on the Ethics Committee that was at that very moment investigating Gingrich.

Although they swore they had no idea that what they were doing was a crime, in their cover letter to McDermott, they requested immunity -- just as you probably do whenever you write somebody a letter. (They later pleaded guilty to a crime under the Electronic Communications Privacy Act.)

McDermott promptly turned the tape over to The New York Times and other newspapers. ...

John Boehner, one of the participants in the Gingrich call, sued McDermott for violating his First Amendment rights, which resulted in a court ordering McDermott to pay Boehner more than $1 million.

And yet, more than a dozen news organizations, many of the same ones demanding the death penalty for Rupert Murdoch right now, filed amicus briefs defending McDermott's distribution of the pirated tape.

Needless to say, the Times ferociously defended its own publication of the hacked phone call, arguing that it would be unconstitutional to punish the publication of information, no matter how obtained.

So it's strange to see these defenders of the press's right to publish absolutely anything get on their high horses about British tabloid reporters, operating under a different culture and legal system, hacking into cell phones."
~Ann Coulter

My question to you, Jonathan, is - Was the Economist one of the dozen+ that filed amicus briefs? And if so, when will you resign from such an unethical place, immediately or sooner?

GreigP said...

Um John you should have probably put the link to Swift's Modest Proposal in the last Blog.....yum the roasted succulent flesh of a toddler. What a fine broth that would make; warm one up this winter!!

Scott said...

John, I think the key is that the journalists were accessing information without permission of the "source". In the case of Wikileaks, for example, there was an individual inside that intentionally provided the confidential material. "Hacking" of voicemails implies that there was no permission for the journalist to access that information.

Koufax said...

If you haven't already seen this, I thougt you would like Roger Ebert's essay about Murdoch's current situation:


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