Two days ago, I received my new Galaxy Nexus. Reviews of this great new phone are easy to find on the internet, so I won't attempt one here, but I will say that it is a Google user's dream phone. Goodbye, Droid. Hello, Ice Cream Sandwich!

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I have been reading Steve Jobs by Walter Isaacson, and tonight I covered the chapters creation of the Macintosh. Like many others who are reading the book, I ended up on YouTube, searching for the iconic "1984" Super Bowl commercial ...

More interesting to me, however, was the video of Jobs at the Apple annual meeting two days after the Super Bowl. The memory in the Macintosh was only 128k (plus 64k of ROM) and the graphics are primitive by modern standards, but look at the frenzied reaction of the audience!

That was an amazing product launch, which became the template for so many other insanely great Steve Jobs moments.

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A few years ago I shared with Glom readers an exercise I use to expose law students to the concept of present value. Given the current state of affairs, I guess I should try and get a slot for this talk during Accepted Student’s Day. But whatever the true cost-benefit calculus of a legal education may be, one concept every lawyer should leave school equipped with is present value.

It’s simple for me.  If you do not understand deep down in your soul how it is that a dollar today is worth more than a dollar tomorrow, you cannot intelligently take out a mortgage, plan for your retirement, settle a case or, yes, negotiate an earn out provision. The mistake law schools make is that we tend to teach present value in the context of talking about earn outs or debentures or other such esoterica.  We should be talking about life's little NPVs from day one of orientation (or as I said above maybe even earlier).

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So I just got an iPhone4! This is big news, particularly because I've catapulted from a clamshell, old-school phone (yes, all of you who'd send me charmingly conversational text messages only to receive in reply "OK," I was painstakingly pressing buttons repeatedly to come up with each letter of my response).  Here I am, at long last, enjoying the brave new world of the the smartphone.  Longtime readers, I know you are not shocked by my Luddititude.

I've been aware for some time that Apple automatically appends a "Sent from my iPhone" message to the end of emails.  How do we feel about this?  Is it a status symbol?  A sign of slavish devotion to the Big Apple?  A plea to excuse typos, along the lines of the old " dictated but not read" (which a partner I worked with joked meant, "dictated but not thought about")?  A marker of apathy?  Technological naivete? 

 Should I change it?  Is this no big deal? What does it say about me?  Give a late-adopter some guidance, here.

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Since last week I've been cheering Blockbuster's bankruptcy--I'm old enough to remember Friday nights wasted in a line snaking up and down aisles, and its selection was always pitiful.  I'm a huge Netflix fan.  But a WSJ article yesterday foretold some collateral damage from the rise of the DVD, i.e., the demise of the independent video store.  This is a departure I'll lament.  The article also triggered some reflection on how changes in movie delivery technology affected the evolution of my relationship to movies.  Look below the fold for Usha's Cinematic Enjoyment Evolution.

Stage 1, the Dark Ages: dominated by mainstream Hollywood fare, delivered via multiplexes--scratch that, there weren't any multiplexes back then, just movie theaters--and Blockbuster Video stores.  I was an innocent who referred to "Mel Gibson' Hamlet" when the movie came out, not "Zeffirelli's Hamlet".   Hey, I was in high school!

Stage 2, the Age of Discovery: In college I worked at a campus video store.  I worked the early afternoon shift and got to watch a video as I helped a handful of largely hungover, and thus passive, customers.  As a bonus, I received a "shift video" at the end of the work day.  This was the core of my movie education, such as it was, and inspired in me a passion for independent video stores.  It was also possibly the best job of my life.

Stage 3, the Age of Enlightenment: Post-college found me declaring that I couldn't live in a town unless it had an independent video store and independent theater.  Happily, Madison WI and Charlottesville VA qualified.

Stage 4, the Age of Netflix: I love Netflix.  I love its flattening affect.  Foreign films, indies, obscure classics, all available anywhere the good old USPS delivers.  It blew Stage 3's rule out of the water: I could get almost any film, at any time, all thanks to the transformative effect of the fantastically mailable DVD.  Longtime readers of the blog know I'm a luddite (status update: still no iPod or iPhone).  But this technology changed my world.  Sidenote: I teach a case study of the Netflix IPO and in the highlight of my career as a practicing attorney I actually participated in a phone call with Netflix's CEO.  I believe I said, "yes"  followed by "uh-huh."  Glory days.

Stage 5, the Age of Parenthood: After our daughter was born, my husband pointed out, increasingly stridently, that Netflix DVDs were collecting dust on our entertainment center.  It was hard for me to let go, but I have suspended our membership, accepting the reality that we just aren't watching movies regularly anymore.  Plus a Netflix membership was hard to justify when there's a great independent video store literally 2 blocks away.  And with pallid, unhealthily skinny clerks in funky glasses, laminated homemade cartoon posters depicting the fate of late-returners, and those employee picks that feel like windows into strangers' hearts, it still feels like home to this law professor.  The threat of closure will only make visits that much sweeter.

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My efforts to prepay my summer rent in Berlin have been a fascinating tour of modern payment systems and foreign currency risk. Here’s the scoop: my rent is due in full June 1st. My landlord would like the money early and agreed to pay the transfer fees if I could prepay. One additional complication, I need to use my University’s credit card.

I first tried Paypal – but the transaction got dinged based on a paypal algorithm that tries to detect fraud. Setting up a wire transfer takes time (and further navigating the University bureaucracy) not to mention higher fees than Paypal. I then ran across this alternative for foreign currency transfers: xoom. It worked like a charm, although having taught payment systems once I did carefully read the terms of use to figure out what my recourse would be should the money go into the wrong German account, or should there be no apartment when I arrive in Berlin.

Xoom is just one of a bevy of new payment systems that have emerged in the last several years. Glompetitor Tim Zinnecker has already pointed out the great article in Wired magazine two months ago on the future of payment systems. When I agreed to prepay, I thought the fees I saved would more than offset the time value of money. What I didn’t anticipate was that little ‘ole me would also be subject to foreign currency risk; I guess I need to read Kim Krawiec’s posts over at the Glompetition on the Greek debt crisis on a more regular basis.  In all seriousness, I do feel blessed though that my personal stakes in the foreign currency swings are so trivial (so far) compared to what many in Europe are going through.

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While we are on the subject of pure bets, when will there be a prediction market on the outcome of this case?  When will you be able to place your bets?

I am not ready to take an official position - "Goldman is liable" or the "SEC will lose."  What law professor would given that we are only at the beginning of learning the facts?

But that doesn't stop you from making educated guesses and bets.  There is of course an active arbitrage market on Wall Street betting on the outcome of things like high profile litigation and whether a regulator will allow a merger to go through.

When there is a Goldman prediction market, prices will change as new facts come up.

Is there any social value to this type of bet? -- you can probably predict what I will say if you read a previous post -- depends if any party to a bet has a pre-existing risk.

And there is entertainment value.

Would there be any intellectual value to a prediction market beyond giving me something to blog about?  Remember Oliver Wendell Holmes' old adage that law is just a prediction of what a court will do.

Does that mean a prediction market is the law?   

Addendum:  I wouldn't be at all shocked if lawyers -- even law professors -- will be hired by arbitrageurs to evaluate bets on the case.  There may be a lot less professional risk if you are placing a bet without putting your name in writing or on a blog. 

Here is a more gossipy question: if you were hiring a lawyer or law professor to help you place a bet on the outcome of the case, who would you pick? 

Here is a half serious legal question: could there be market manipulation if a professor then writes statements to influence the price without disclosing her interest?

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Last month I acquired a Droid, and I was immediately enamored with it, but my admiration for the device has only grown. Earlier this week, when my wife moved the Droid from the place where I had set it, I anxiously asked, "Where's my Droid?!" 

To which my 16-year-old daughter observed, "Sheesh ... 'My Precious' much?"

Guilty as charged. I love the Droid.

While it's easy enough to find lists of Droid apps, I thought some new Droid users might find it helpful to read a brief description of apps that are actually useful, rather than simply cool. Here is my list:

1. Gmail. The Gmail app is simple, but it is the most useful app on the device. I use the Droid's slide-out keyboard much more than I expected to write emails, even though the screen keyboard is fairly easy to use, too. 
2. Google Calendar. Amazingly slick. This is the best calendaring software I have used, and I have been hooked on it now for a couple of years, even more so now that I have a Droid.
3. Google Listen. I don't use an iPod anymore. All of my podcast subscriptions are on Listen, and they update automatically without my needing to connect the device to a computer. 
4. Navigation. Wow! I used this for the first time in Philadelphia a couple of weeks ago, and it was flawless. No need for TomTom or Garmin now.
5. Google Contacts and Gesture Search. The Droid automatically syncs with my Google Contacts, which makes those much more useful to me. And Google has a new app allowing for gesture searches. Placing a call has never been easier.
6. Google Voice. This is the best thing to happen in telephony since fiber optics. I have just recently started distributing my Voice number in place of my mobile and office numbers. Of course, I can also have calls ring on my home phone, and I have done that a few times.
7. CardioTrainer. This is perfect for a walker/jogger like me. Using GPS and Google Maps, it tracks my movements by time and distance, calculates my speed and calories burned, and keeps it all in a history log. On my way to work this morning, was listening to Marketplace on Google Listen and getting updates on my progress through CardioTrainer. Maybe I am just easily impressed, but that is just astonishing to me.
8. Camera. The Droid comes with a 5 mp camera that is simple to use and produces pretty decent photos. Much better than any mobile telephone I have used.

In addition to the foregoing, the Droid has all sorts of useful and entertaining apps like Pandora, LiveScores, Facebook, Dictionary.com, Twidroid, and USA Today. Layovers and delayed meetings have never been this fun before. 

My wish list for Droid apps is relatively short, though I am certain to discover new apps that I didn't even know I was missing. Here is the current list:

• Google Tasks. SSI has a gTasks app that is functional, but not great. Tasks is my favorite ToDo list because it is simple and it interfaces with other Google software. I assume a Google, Inc. app will be rolling out soon.
• Google Reader. Droid has all manner of RRS readers, but nothing I have found does a great job with Google Reader. Again, I assume a Google, Inc. app will be rolling out soon.
• Voice Recorder. Voice recorders are essential for doing interviews and quite useful more generally to get down thoughts. My Droid has a recorder app that is more or less functional for recording one person's voice (when speaking directly into the device), but the app is not good at recording conversations. Perhaps that is a hardware problem?
• News Apps. Reading the WSJ, NYT, and WaPo through the web brower is clunky. The best news app on the Droid is USA Today, with BBC coming in a close second. I can't believe that Rupert Murdoch will allow the WSJ to fall too far behind here, and I hope the others will follow quickly.
• Streaming Radio. The Droid has some radio apps that seem to work fine, but I would really like to listen to BYU games on KSL, and I haven't been able to get that.
• Xmarks. Browsing the internet without Xmarks is a royal pain.

Finally, although this isn't an app, I have "battery life" on my wish list. My Droid usually makes it through an entire day, but not always, and I have already had a couple of close calls while traveling.

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Back in 2005, I was in the market for a smartphone, which I was still calling a PDA. I ended up with a Samsung SCH-i730, which I later described as "clunky in every sense of that word." 

My experience with the Samsung was so bad that I reverted to a clamshell two years later. I wanted an iPhone, but I wasn't willing to switch to AT&T, so I suffered in 1990s Mobilephoneland for two more years.

Until last week, when I acquired a Droid. Wow!

(Note to iPhone users: the term "Wow!" is not intended to be a claim that the Droid is superior to the iPhone, but is intended rather to convey a generally favorable impression of my new device.)

I have read many reviews extolling the virtues and shortcomings of the Droid, but I want to focus on a particular benefit to me that I didn't see emphasized enough in the reviews that I consulted. As longtime readers of the blog know, I went all in with Google in 2007. While a couple of Google's products that I emphasized then -- the personalized homepage and Notebook -- have fallen off my list, I have added others, like Google Tasks. The wonderful thing about the Droid is the way in which Gmail, Calendar, Contacts, and Tasks update almost simultaneously on both my phone and my computer. Moving from one device to the other is seamless.

Also, other Google apps on the Droid are outstanding. Google Maps is fast and easy, and I am looking forward to using the navigation feature, though I haven't had occasion to do that, yet. I have started using Google Listen in place of iTunes, which I use primarily for podcasts. Google Sky may be the coolest app available on the Droid, but Google Goggles is fun, too.

Lots more to explore, but my first week with the Droid has been a revelation.

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I hadn't expected to update my Kindle/iPad e-reading post from yesterday, but an article in the NYT today speculated as to whether readers will remain loyal to the e-book format as prices increase to a price resembling a paperback version.  Apparently, Amazon readers have shown vocal opposition before (in reviews, ratings, comments) to higher-priced e-books and delayed electronic versions (to allow hardcover sales to proceed without competition).  If Apple succeeds in giving publishers the power to set higher e-book prices (more than the Amazon $9.99 standard), will readers find substitutes?  These substitutes could be libraries, paperbook books, older books, which are cheaper, or even other forms of entertainment.

What jarred me in the article was this quote, from (a best-selling fiction author that I candidly am not familiar with Douglas Preston), who received angry emails from consumers after delaying the electronic version of his book for four months to protect hardcover sales:

“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”

OK, Mr. Preston, but how do we know what something is worth? This isn't the case of people digitally sharing music, movies or books without payment in violation of law, this is just the case of consumers saying that paying $15 for an electronic version of a book, which you can't loan someone or put on a bookshelf, isn't worth it to them. And even if $15 is cheaper than a hardcover version, it's not worth it if you have to wait four months to purchase it. Hardover prices have always been a form of price discrimination for people who just like to read books when they come out or who like to have a durable book for their bookshelf. Eventually, consumers will demand a price for an electronic book be less than a price for a non-electronic version. Whether or not publishers say that the difference in production costs is nominal, the value to a consumer is different.  I disagree with Mr. Preston and think that consumers are willing to pay the real price of something, but consumers get to decide what the real price is.

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So, I own a Kindle.  There aren't that many e-book formats around -- Sony has one, Barnes & Noble has one.  They all seem to have their own deals with different publishers, so access varies.  Now, iPad is going to be marketed as a multi-purpose format, including as an e-reader.  Surely, with more entrants into the field, the price per book should go down, right?  Shouldn't Steve Jobs have touted cheaper books in his big launch of the iPad?

Except he didn't.  In fact, he announced that books on the iPad would be more expensive -- $12.99 to $14.99 instead of the $9.99 Amazon standard for many Kindle books.  So now e-books are approaching the price of a paperback book, and I should be happy for the industry competition?  Shouldn't iPad be killed outright because no one would buy it to read books when books are more expensive on it?  Well, apparently the competition aspect is not for book readers, it's for book publishers.  Now, Apple is saying to publishers that they will sell their books for more money on the iPad, in effect saying that they will pay more for their e-books than Amazon is.  So, in turn, Amazon is conceding and agreeing to the same terms for certain publishers.  So now my $9.99 Kindle book will be $3-5 dollars more.  Viva la competicion!

So now publishers have the power, if for a moment.  Apple and five major publishers have set terms that allow publishers to set their own book prices and keep 70% of the revenue from sales, with Apple keeping 30% as an agent fee.  (Random House has not agreed on any terms with Apple at this time.)  One of these contracting publishers, Macmillan, held Amazon's feet to the fire last week for identical terms.  At first, Amazon played hardball and removed the "buy" button from all MacMillan print products and deleted the Kindle products.  After a week of playing chicken,the parties agreed to the "Apple" plan.  Interestingly, publishers aren't losing money on the Amazon plan, which Amazon subsidizes as a "loss leader" to sell Kindles.  But publishers were worried how far Amazon would go and are willing to accept less profit now to set prices in the future.  Publishers have their own ulterior motives, as well, as very low e-book prices cannibalize the hardback market.  In any event, More publishers may follow suit with Amazon.  And now, publishers have the upper hand in discussions with Google over its proposed e-book format, which has no accompanying hardware.

Now, Apple's buying power may not last forever.  When someone buys a Kindle, Amazon knows that they will buy book content.  However, the iPad may be popular among people who want to watch movies, surf the web, check email, play video games, read newspapers, etc., but not read new best-sellers.  If that's the case, then Amazon and Google may be able to renegotiate.  In addition, we e-readers may decide to just buy paperbacks instead of $15 digital versions.

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I was not the only person who thought the iPad was a stupid name, for the same reasons:  NYT story here.

Strangely, Fujitsu thinks they already have a product they named iPad, so now Apple has to fight over the stupid name.  Mr. Jobs, let Fujitsu have the name.  Surely someone at your place can come up with a better name.  I'll suggest iPort.  iPower.  iPop.  iPlay.  iPath.  iPage.  For free you can have these.  Or call me.  We'll brainstorm.

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So today Steve Jobs unveiled the iPad around lunchtime.  Depending on whether you want wifi or 3G, etc. you can purchase a $500 version (ok, $499) or an $829 version, or one in-between.  But, if you want to hook up to wifi or 3G, you'll have to have a monthly plan.  The tablet-like device looks really cool and does a lot of things, positioning it in between an iPhone and a laptop.  It has word processing (and can charge at a docking station with a keyboard like a laptop), an internet browser, presentation software, a built-in iPod, movies and an e-reader with iBookstore.  Depending on what you use your laptop for, it could take the place of a laptop while you travel.  For example, if you lug your laptop to conferences/workshops so you can use your PowerPoint, check your email and surf the internet a little, then this might be great for you.  You can leave your laptop at home and use this as a great travel device.  Could it take the place of a home computer or business computer, if you have a docking station?  Maybe, if you could have a large screen with your docking station.  Most of the computer consumers probably just use a computer for word processing, internet, email and the occasional presentation.  Depending on how much storage you need, maybe.

I think the question on everyone's mind is whether the average person needs an iPhone, an iPad and a computer.  There's a lot of overlap there, but you can't take a computer everywhere and the iPhone is really small.  In a perfect world, it would be great to have all three, but that's a lot of money to have all three, especially if you have to purchase an internet plan for both the iPhone and the iPad from a wireless company and then have an internet plan for your computer.

So, I have a Kindle and every newspaper is asking how the iPad will affect the Kindle.  Should someone buy the Kindle or spend twice as much or more to get an iPad that does a lot more things than just hold digital books?  If you have a laptop and an iPhone and even an iPod (like me), I guess I couldn't justify buying the iPad, which would also cost an additional $360 or more per year because of the wireless plan, if I really just wanted to read books.  It doesn't take the place of an iPod because you wouldn't carry it where you can carry an iPod (walking around, exercising).  It does play movies, so maybe it could replace your DVD player?  Your portable DVD player?  Your television?

I guess there will continue to be consolidation, with video game consoles that play DVDs and Blu-Ray and stream television, and tablets that browse the internet and play music and store books.  I guess the trick will be figuring out how much overlap consumers are ok with given variations in portability and functionality.

I also think iPad is a stupid name, but nobody asked me.

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I've written a number of posts on my research so far that applies Open Source concepts to risk models and to improving securities disclosure. We should also turn the lens on financial regulators and explore ways in which greater transparency can ensure regulators are more effective at their jobs.

The examination of financial institutions appears to be incredible intensive (I needed a flash drive to store the examination manuals for the FDIC for my research files). But regulatory forbearance has long been a concern in banking law. In other words, how do we know those manuals are being followed; sometimes regulators may not blow the whistle on problems at a financial institution for various reasons, including career preservation.

Because of the opacity of examinations, we don't know when regulators are refusing to do their job or when they make mistakes. This problem is compounded as the business of banking (or insurance or investment banking) has become more complex. Consider how difficult it is for any regulator to audit any single firm's financial condition or modeling let alone to spot systemic risks caused by homogeneity or blindspots among the models of numerous institutions.

Greater transparency of the examination process would allow the many minds of the marketplace to backstop regulators and uncover both errors and forbearance. Again, this borrows heavily from ideas in Open Source software.

Note that greater transparency would have restored the public and market's confidence in some of the major crisis management decisions of the past year - such as why Bear and AIG were bailed out and Lehman was allowed to fail. We can engage in academic arguments forever about the wisdom of the bailouts, but so far we have had to trust the regulators. Similarly, how do we know that those vaunted stress tests of banks were valid?

Please note that I do not advocate Congressional oversight of monetary policy. That is a downright horrible idea. I'd substitute a few bluer adjectives for "horrible" were this not a family blog. But there is a huge difference between making regulations - including monetary policy - transparent to the marketplace and to the public and giving control over the interest rate punch bowl to a group that faces reelection every two years.

There are legitimate arguments that immediate transparency may contribute to panics and banks runs. There are also limitations to the "many minds" argument, as Adrian Vermeule (Harvard) has written about. In economic terms, many minds can sometime devolve into herd behavior whether rational (information cascades) or irrational.

But there is little reason why we can't at least have post hoc transparency.

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Have you ever heard of "sweethearting"? I worked at a grocery store as a high school student, but this is a new concept to me.

sweethearting  n. the unauthorized giving away of merchandise without charge to a “sweetheart” customer (friend, family, fellow employee) by the fake scan or ring up of merchandise by the cashier.

Marketplace has the story of a new software called StopLift that monitors checker body motions through a video technology to detect sweethearting. Take a look at StopLift's site, which has a fascinating video of actual checkers engaged in sweethearting. StopLift claims that 30% of checkers engage in the practice! And the company has even named all of the different strategies with titles like "Two at a Time" and "Up & Over." Fascinating stuff.

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