Dana Blankenhorn

Hate Fuels Hate

It's easy to see how the Mumbai terrorists need to be fought, because we're over here and they're over there.

The lesson is simple, obvious, and it tastes like bile if you're being told to administer it. It's precisely what we didn't do after 9-11, and precisely what led us down the road to today.

1. Use police methods to decapitate the leaders.
2. Use media to expose the methods.
3. Use popular will to improve security.
4. Use social methods to reduce the foe.

Sport Economics Bring Recession Home

My local soccer club went toes-up yesterday.

The Atlanta Silverbacks, in the minor-league USL, announced they won't play next year.

The decision was a no-brainer. Since U.S. soccer lacks the promotion-and-relegation process that lets every European team hope it can score the big bucks, there is no upside to the investment. Without an upside it's all ego. Amazing how, when things go bad, ego becomes the first casualty.

Soccer isn't the only troubled sport. Arthur Blank, who owns the Atlanta Falcons, is cutting back, both in business and in charitable giving. The Home Depot co-founder has found there is a bottom to his pocket.

Blank's cutbacks put the lie to the Silverbacks' excuse for folding, namely the chance the MLS will move a team in here. Blank was the money man behind that speculation.

All this reveals an important truth about how the economics of sport have changed in this decade, and given us a taste of things to come.

The Crimes of CNBC

Think of this as Volume 11, Number 46 of A-Clue.com, the online newsletter I've written since 1997. Enjoy.

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In all the to-ing and fro-ing over the financial mess we are in one culprit has gotten off scot-free.

CNBC.

I have been watching CNBC for over a decade now. I'm one of those shut-in executives who are their prime market. Here is what I have learned.

They are always, always wrong.

It's not that they are trying to be wrong. But what they do is look at the latest trend in order to identify where people should be putting their money. That is what is always wrong.

Call it the stupidity of crowds. Any financial trend or concept immediately stops working once enough people start using it. Always. When everyone is buying something you should be looking to sell. When everyone is selling you should be looking to buy. This is the way to profit, and always has been.

During the late 1990s, however, every guest on CNBC was touting Internet stocks. When they tanked, CNBC guests (and talent) went on to the next hot trend. And the next. And the next. Maria Bartiromo cooed over hedge fund managers like they were her lovers. Once Jim Cramer touted any stock on his Mad Money show, you could be certain some stupid money was about to get shaved, once the smart guys got downwind of it.

The result has been to exacerbate every trend. It's terribly unhealthy.

Buying Opportunity

It's official. When Jim Cramer says panic, you've got the buying opportunity of a lifetime.

I can't call the precise bottom. We're in a period of testing lows. We are not going straight up.

But we are going up. Here is why.

The Fed and Treasury Department are dedicated to freeing up liquidity, worldwide, and they will succeed in time. The CDOs will be unwound even if the $700 billion has to be invested several times.  With Europe divided and Japan frozen in fear, the world has no choice but to accept those dollars and use them to jump start their own economies.

That's what makes this so delicious. It's like unclogging a drain. Once the obstruction is gone things will flow fast. At that point we will need to take back much of that liquidity. Inflation will be a worry. But you'll have the added liquidity, plus the unfrozen liquidity, all looking for opportunity.

Market goes up.

Strategy over Tactics

The most remarkable point about Friday's debate, about the whole week, has not been remarked upon enough.

That is the difference between strategy and tactics.

Barack Obama has gone after everything strategically. He has a long-range vision, of Democrats and Republicans getting along even when they disagree, of consensus that starts with agreement and moves outward, a vision driven by Internet values that has been as controversial among Democrats as among Republicans.

Obama won that argument narrowly in his own party and this week he hit John McCain over the head with it.

Obama deliberately treated McCain with respect, even some deference, beginning many responses by saying he agreed with McCain on some point. Then he hammered home a strategic vision which, whether or not you agreed with it, was at least coherent, different from the way we have been going, and fairly easy to understand.

The talking heads exploded. No knockout blows, they said. No sound bites, they complained.

Well, exactly right.

McCain, meanwhile, was all about tactics. Everything was tactical, obviously tactical, from picking Palin to "suspending" the campaign to coming back to Mississippi. And the way he debated was tactical. He treated each question like a separate event, rather than as part of some larger whole.

The key point came when discussion turned to "the surge." McCain kept hammering away that this "strategy" proved "we will win" in Iraq, that Obama was unfairly disparaging "our troops" and "General Petraeus." Obama refused to be drawn in, stating repeatedly that the surge was "a tactic," that the strategy of focusing entirely on Iraq was the mistake, and that McCain was confusing strategy and tactics.

This went right over the heads of the TeeVee Talking Heads, just as it went over McCain's head. But it was clear that the American people got it. Just as it was clear they understood why he was being deferential, why he was starting his sentences with "I agree with John" or "Senator McCain is right" about something. He was using those phrases as a digression to discuss his disagreement, laying out common ground before moving to the basic choice. Most people understood that.

The Real Media Bias

The real media bias is in favor of conflict and it comes from an unexpected source.

You.

I have been conducting experiments at ZDNet on this subject and my findings are quite conclusive. Stories featuring personal conflict do best with the audience.

Here's an example. This piece of silliness, which took me all of 10 minutes to produce, is the most popular story I've written in months, and by a large margin. My previous "best" efforts involved stories where I pictured neighbors and family members.

People in conflict sell. This, not the supposed right-wing bias of Fox News, is what operatives like Karl Rove have been taking advantage of for decades. It informs their pattern of attack, and their decision to put unqualified religious nut in line to be Vice President.

Rather than arguing against this bias, which comes from the voters and not from the political classes, we should look at how to take advantage of it.

They Don't Understand (Perhaps They Never Will)

Having followed the political blogosphere for 5 years, and the Internet medium for 25, I really expected that by this point the media would be more integrated than it is.

After all, the Internet Generation is now grown. My two kids can't remember a time before the Internet. They have had broadband access in their rooms since she was 10 and he was 7. Today he never watches TV, and her TV-watching is usually accompanied by the clicking of her keyboard.

The Internet is not just integrated into their lives. It is their lives. It is the medium of their lives.

Their reality is also the reality for tens of millions of others. Not just old fogies like me. I grew up with TV and, while I now work exclusively online I'm more like a 1950s sitcom writer, translating the vocabulary of what I know into where I am.

So you would expect that, by this time, the old medium would have a fine-grained understanding of the new, and be able to bring the best of it along into the new age.

Nope. Not at all.

The Hillary Zone

Anxious to find some sort of phony story to tide them over until the speechifying, MSNBC and other cable networks are pushing this "Democratic split" nonsense.

What makes me angry is not that it's a lie. What makes me angry is they know it.

Fueling the lie are surveys showing upwards of 30% of "Hillary supporters" insist they won't vote for Obama. Fact is most of these people were never Hillary supporters to begin with.

As the press reported at the time, Republicans made a concerted effort to keep the Democratic race going by supporting Clinton. In states like Mississippi the bulk of her vote came from committed Republicans just trying to muddy the waters.

So of course if you poll these people a lot of them will say they support the Republicans. They're Republicans. Duh!

Any Clinton supporter who goes to McCain at this point never really supported Clinton in the first place. They have no clue where she stands, no clue what she believes in, they're trolls or drama queens. I'm sure she will make this clear when she speaks tonight, and the press will have to find something else to obsess over tomorrow.

This is just the way the "old media" works. You have to have a story, you have to have a conflict, or else you think you're wasting your time.

No, you don't.

Grinding It Out

While waiting for Barack Obama's e-mail on his Vice Presidential pick, I decided to take a break today and enjoy some footie.

It was the U.S. vs. Brazil with the Gold Medal on the line.  Unlike many past matches of this type, the better team did not win.

The U.S. did.

The game illustrated the two schools of soccer, or futbol, or football -- the beautiful game. Brazil played beautifully. They had better players. They passed us silly the first half, back-and-forth across the pitch. They looked deadly early in the second half, firing shot-after-shot at goalie Hope Solo (right). It was one-way traffic until they tired, and the Americans gave up their own short passing game for long breakaways up the middle.

The U.S. goal, by a girl named Carli Lloyd, came seemingly out of nothing, a quick flip to get space and a screamer past the goalie, across the face of goal. Then it was back to hang in there baby, Brazil coming in from all angles, attack after attack, corner after corner, the issue not decided until their last missed by inches less than a minute from time.

We call this grinding it out. When my daughter Robin played, through high school, she became a specialist at this sort of thing. It's not pretty. It's exhausting to watch. It's physical, tackling and getting in front of people, banging the ball downfield just to get a breath.

But it works. At all levels. The balance between the beauty of a Brazil and the grinding it out mentality is what makes the game so compelling. Because you can see the same balance in a U-10 rec game as in a game played by pros.

Speaking of the pros...

The Lesson of Bigfoot

The press will print anything.

Lie all you want.

No one bothered checking the story of hucksters Matt Whitton and Rick Dyer, who last week posed as "researchers" in order to scam Tom Biscardi, who was stupid enough to believe such a thing existed.

It was a rubber-and-plastic Halloween costume with various body parts (parts is parts) stuffed inside it.

What was most annoying about the whole story is that, until the scamsters skipped, the press ate it up.  No one bothered checking into the fact that Clayton County, Georgia, where one of these guys was supposedly a white cop, may be the most corrupt force in America, a joke. No one checked into the background of Dyer. Nope, they just trooped right in, acted like everything was on the up-and-up, and became complicit in the fraud.

Then they got all high-and-mighty. Ignoring their complicity. Ignoring their cupidity. Ignoring their own venality.

This is worse than that old Kirk Douglas chestnut Ace in the Hole. At least in Billy Wilder's story there was a real man, trapped in a real cave, for Douglas' newspaper character to exploit. Here there was nothing, meat in a rubber suit.