Coyote Blog

I got an email today from some group telling me that the majority of small business owners support annual increases to the minimum wage.  I found that odd, so I clicked through to the study.   I will save you the time looking for it, the study had no discussion of how it identified a representative group of small business owners, or even how it validated the respondents were business owners in the first place.  All it says is that it was an "internet survey".

It turns out the second question of the poll answers the first.  The people in the poll overwhelmingly supported raising the minimum wage because the businesses polled overwhelmingly did not hire minimum wage workers.

In fact, the most lost fact in the minimum wage debate is the percentage of the work force that actually earns the minimum wage.  According to the Department of Labor, in 2011 only about 3% of all employed wage and salary workers were making minimum wage or less.  However, about half of these folks are people who mainly work for tips (which are not included in the base wage number).  When you exclude the folks whose tips presumably take them over the minimum wage, just 1.5% of American workers make minimum wage.

Minimum wage work is a niche, generally confined to special situations and to low-skilled young people entering the work force.

Sure, a minimum wage hike would help many of those 1.5%  (at least those who did not lose their jobs when the higher wage rates priced out their work).  But what about the group five times larger than this, the unemployed?  Are they really better off when the bar they have to clear to find their first work keeps getting raised?  If no one will currently hire 30% of teens at $7.25 an hour, how many will get hired at $10 an hour?

Here is the question the group should have asked:  For those of you who currently pay some workers minimum wage, would you expect to employ more, the less, or about the same after an increase in the minimum wage?

The first three times I read this, I was sure it was supposed to be ironic and sarcastic.  I am increasingly convinced that this was written for real

Mayor Michael Bloomberg’s ban on sugary drinks is good for you, New York, and for the rest of the country, too.

And here’s something else, a guaranteed wager: Winston Smith, the suffering protagonist in George Orwell’s “Nineteen Eight-Four,” would trade every aspect of the society dreamed up for him by the sadistic totalitarian government in place of a ban on sugary drinks in 16-ounce cups any day.

There I said it. I know the sentiment is unpopular. I know people will fear the ramifications of a ban on that black bubbling cola in their plastic Big Gulps because they believe it is the road to bigger restrictions on more of their choices. It won’t.

We are a nation of fatties. According to the Centers for Disease Control and Prevention, or CDC, more than one-third of United States adults -- 35.7 percent -- are obese. And obesity is expensive.

Medical costs associated with obesity were estimated at $147 billion in 2008, the CDCnoted. And for people who are obese were $1,429 higher than those of normal weight. While sugary drinks like soda and fruit drinks are not the only culprit here, it is a fact that people are consuming these beverages at an alarming rate. Something needs to be done.

I am sure long-time Coyote Blog readers will not the Health Care Trojan Horse (TM) -- using the socialization of health care costs to justify coercive interventions in individual choices that used to be considered personal.

I have been studying HG Wells of late.  One thing I didn't know about him before is that for all his skepticism about the future in many of his books, and all his prescience about the worst impulses of man, he believed it was possible to create an ideal government that would a dictatorship of the elite, scientific, and enlightened.  Historians called that view "naive", and at the time it may have been. But to hold this sort of view today, as this author does, given history, is simply insane.  Power begets more power.  Coercion begets more coercion.

There really is a very simple test for this - simply imagine the coercive power you advocate in the hands of your worst political enemy.  Still happy with it?  I bet not.

I can't help thinking of Adolf Eichmann when I look at 1) our Elvis-impersonating terrorist who thinks the local hospital is hoarding body parts and 2) the Chechnyan Beavis and Butthead who managed to kill and maim scores of people despite being bigger screwups than the entire Reservoir Dogs gang.

Don't let your freedoms be taken away by people who say such and such a place or event is vulnerable or open to attack.  If these guys can successfully terrorize people, there can't be any way to stop serious threats short of a North Korean police state.  Every occasion and location is theoretically vulnerable.  Our best protection is to build a society that eschews violence.  And, when someone does go off the farm, we want a society where there is no general toleration for the act.  In Chechnya or Syria or Iraq, these two boneheads would likely have found help and protection from some percentage of the population.  Not so in Boston, or anywhere else in America.

PS-  Today must have been CNN's wet dream.  This was like a real-life version of the Running Man (the enjoyable Richard Bachman aka Steven King book, not the awful movie), with similarly high ratings.

The Left is worried that Conservatives will jump on the fact that the Boston killers were immigrants to slow down immigration reform:

the anti-immigration right has jumped on this morning's news to argue that this is not the time to loosen our immigration laws. After all, the two guys who set off bombs at the Boston Marathon have turned out to be a pair of immigrants. As radio host Bryan Fischer says, "Time to tighten, not loosen, immigration policy." Greg Sargent comments:

It’s unclear thus far how widespread the effort among conservatives will be to connect the Boston bombing suspects to the immigration reform debate. But it’s certainly something that bears watching. If this argument picks up steam, it will be

another indication of how ferocious the resistance on the right to immigration reform is going to get.

I think it's safe to say that this argument will pick up steam. Why wouldn't it, after all? It's a gut punch to the idea that immigrants are no more dangerous than natives, and it doesn't matter which side logic is on. It's a strong appeal to emotions, and it's probably an effective one.

Wow, it would not have occurred to me to justify immigration restrictions (in a nation where we are basically all immigrants) based on the bad actions of a couple of individuals.  But since the Left recently tried to do exactly this with gun control, to justify restrictions on millions of law-abiding people based on the actions of one person, I guess they know what they are talking about.  The whole demagogic tendency is sickening.  While I would love to see radical immigration reform, including the right of most anyone to be legally present and working in this country (though not necessarily in line for citizenship or safety net benefits), I have pretty low expectations.

Drum gives a good answer, but the question he is asked reflects this pathetic kind of political opportunism

A few days ago, someone asked: Who are you secretly hoping the bombers turn out to be? My answer was, whatever kind of person is least likely to have any effect whatsoever on public policy.

As quick background, R&R had a study that found that higher government debt levels correlated to lower, even negative, economic growth.  More recently, others have found computational errors that exaggerated this result, and have criticized their methodology, particularly their approach to weighting data from different countries and years.

A few thoughts:

1. A major reasons the errors were found is that R&R actually made their data available for replication.  This is apparently rare - certainly it is rare in the climate world.  I am glad they are getting kudos for this and hope the academic world can find a way to incentivize / force more data sharing
2. I would not have expected a direct relationship between country debt levels and economic growth.  What I would expect is that growth can still be good at higher debt levels, but the risk of hitting a tipping point starts to rise dangerously with debt levels.  Eventually levels get so high that an interest rate shock or liquidity shock is almost inevitable
3. More than a relation between GDP growth and absolute debt levels, I would have expected a relationship between GDP growth and changes in debt level.  Absolute government debt levels may represent resources removed from the productive economy years and decades earlier.  Increases in government debt represent recent decreases in capital available for productive use.

The campgrounds we operate for the US Forest Service in Wisconsin does not seem quite ready to open

Unfortunately, Kevin Drum's prediction is probably dead on

a fellow with the Twitter handle @FootyTube_ quickly changed his handle last night to @Dzhokhar_ and swapped out his avatar for a thumbnail of the suspect in the Boston bombings. That's hilarious!

Or not. But I predict a growth industry in this kind of thing. FootyTube's idiocy was easy enough to see through, but someone out there now has the bright idea of creating a Twitter/Facebook/Tumblr/etc. account and populating it over time with grievances of some kind. Islamic, gun nut, anti-tax, libertarian, PETA, whatever. Just create a nice long chain of posts and then wait for the next terrorist attack. As soon as pics and names are available, switch the account name, make it public, and wait to be discovered.

There are people who think that plunder loses all its immorality as soon as it becomes legal. Personally, I cannot imagine a more alarming situation. However that may be, one thing is certain, and that is that the economic results are the same...

Moral: To use force is not to produce, but to destroy.

.  I love how Bastiat writes, and 165 years has done absolutely nothing to harm his relevance.  Its amazing that we hare having the exact same economic battles today.

CISPA passes the House.  Here's hoping for gridlock in the Senate because, whatever he might promise, there is no way Obama is going to veto legislation that helps Hollywood while simultaneously expanding the Administration's warrant-less search power.

Apparently, Google is building a huge a showy hub for its corporate aircraft.  Does this strike anyone else as an anachronism, from the folks who bring us Gmail and Google groups?  It's like the Fedex having a Pony Express account.

By the way, if anyone read the fabulous book "Barbarians and the Gate," they** will remember RJR Nabisco's construction of a corporate aircraft palace in Atlanta marked the beginning of the end of that company's fiscal extravagance.

** I know this is grammatically incorrect, but I am exhausted with English's lack of a third person singular gender-neutral pronoun and hate saying "he or she."  English is a language built bottom up from actual usage, so lacking any better idea, I support "they" as the solution.

Rick Perry has an interesting post on a Texas proposal to require that college transcripts show, along with the student's grade in each class, the average grade in the class.

I think this is an excellent idea -- simple and effective -- though I am not big on a state mandate on private institutions but this is totally reasonable for public institutions and would likely force private colleges to follow suit voluntarily.

To the extent that colleges squeal about this, it will be entirely hypocritical.  Why?  Because colleges will not seriously consider the grades on a high school transcript in their admission process without a guide from the school listing such things as average grades.   Colleges demand exactly this type of benchmark for grades, without which a transcript would be almost meaningless.  They should not balk at providing the same.

The source for the underlying chart is the Department of Labor blog, with my annotations added.

Postscript:  In most cases legislation is anticipated to pass well in advance and one could argue the effects of it show up even before the signing date.  But in this case whether the PPACA would pass was a nail-biter to the last moment.

My new Forbes article is up, and it is on my favorite under-reported story, the end of full-time work in the American retail sector

I don’t generally publish end-of-year predictions, mainly because I usually am wrong (a failing that does not seem to prevent any number of others from doing so, however).  But last year I made an exception when I predicted that the biggest economic story of 2013 would be the death of the full-time job in the American retail service sector.

But this was not really an exception to my rule about predictions, because this was not really a prediction at all, at least in the sense that a “prediction” is an educated guess of some future uncertain event occurring.  Late last year, within the service world, this change was already occurring – at restaurants, at hotels, and in retail stores, managers were already formulating plans.  In a large sense, by making this prediction, I was betting on the score of a game that had already been played — all we are doing now is waiting for the media to catch up and report the results to the public at large....

The tree fell in the forest months ago, but it is only just now being heard.

Sorry, link was broken, now fixed

I predicted last year that the biggest economic story of the year would be the end of full-time employment in the retail service industry.  An update:

The nation's largest movie theater chain has cut the hours of thousands of employees, saying in a company memo that ObamaCare requirements are to blame.

Regal Entertainment Group, which operates more than 500 theaters in 38 states, last month rolled back shifts for non-salaried workers to 30 hours per week, putting them under the threshold at which employers are required to provide health insurance. The Nashville-based company said in a letter to managers that the move was a direct result of ObamaCare.

Several sources have reported that the new Obama budget calls for privatizing the TVA.  My company is already doing our part -- we have privately taken over the operation of four TVA campgrounds (under a long-term lease) and are looking at others.  Our first was here, and has turned out to be a really good operation for us.  It is impossible to get bank loans for improvements on leased land, but over time, by applying cash flow from the operation back into improvements, we have put nearly a million dollars in to the property.  We took on three new TVA campgrounds this winter and are just now scrambling to get them open.

Death by tort lawyer in 3...2...1

A Colorado jury has awarded $11.5 million in a lawsuit originally brought against helmet maker Riddell and several high school administrators and football coaches over brain injuries suffered by a teenager in 2008.” While the jury rejected the plaintiff’s claim of design defect, it accepted the theory that the helmet maker should have done more to warn of concussions.

If the helmet makers are getting nailed, wait until every high school and college in the country is sued, not to mention the massive suit looming against the NFL.  Expect to see a debate soon, beginning in state legislatures, over tort protection for football.  Texas, for example, has several of the country's tort hellholes but if Friday night high school football is threatened, you can bet that the legislature will be moved to action.

My wife and I were discussing the Atlanta bombing last night and it struck me that, with all the false reports out of Boston, it would be useful to remind folks of the fate of Richard Jewell, a man whose life was essentially destroyed by our collective need for quick answers about a tragedy.  But Patrick at Popehat has already done the heavy lifting, so I will turn it over to him.

By the way, in an odd local angle on the story, for some reason Fox decided to interview Joe Arpaio as an "expert" after the blast.  Joe is an expert -- at getting himself media attention.  But I am trying to remember the last terrorist incident we had here in Phoenix.

I am left to wonder today how much of Earthlink's remaining income is from zombie accounts.  I generally hate the hassle of dealing with a changed credit card number, but one advantage is that I discover some zombie accounts that I have forgotten about and keep charging my card every month.

Today I had an amazing one -- from my old Earthlink dial-up account.  I had thought I cancelled Earthlink something like 8 years ago (I certainly have not used it since about 2003).  That is several credit cards ago and so I have absolutely no idea how they were able to continue to bill me, but they were, right up to this month when my corporate card number changed due to a fraud alert.  It is kind of depressing that I spent well north of a thousand dollars over the years on a service that I would never even consider using again, but that is the danger that comes as a company gets larger and one can't personally inspect every bill that gets paid.

Of course, despite evidence that I never used the account, they would not waive the final month's billing and threatened collections, etc.  They wanted my credit card for one last charge, and then they would cancel.  Which made me suspicious that this is how they got my credit card for the last five years - by asking for it for one last charge and then continuing to bill for 5 years.  So I told them I did not trust them with my new credit card number and to send me a paper bill that I would pay by check.  As a final insult, they said they had to charge me an extra dollar for the paper bill.

If I had time, I would challenge them and give them grief, but sometimes one has to put one's ego away and just move on with the loss.

During the call, it was very, very clear that trying to collect money on zombie accounts that people had forgotten about was very, very typical for their customer service folks.  Leading me to wonder just how much of Earthlink's revenue comes from such zombie accounts.  As a funny side note, they were perfectly fine taking money from me without any identification, but would not cancel the account without an extensive account verification, a verification that is rather hard if one has not used the account in about 8 years.

Tesla Motors and Elon Musk, the folks who seem to perennially have their hands out for special government favors and taxpayer money, may have actually struck a small blow against the corporate state:

Tesla Motors Inc. says it’s won another round in its fight with established car dealers who want to stop the company from selling its electric luxury cars directly to consumers.

Tesla CEO Elon Musk says, via Twitter, that a New York judge has tossed out a suit brought by New York auto dealers who challenged Tesla’s direct sales model as a violation of the state’s franchise laws.

Mr. Musk spent Wednesday in Texas making the case for a legislative proposal to change the law to allow direct sales of electric vehicles by U.S.-based manufacturers.  Texas car dealers have opposed the measure, saying it would open the door for other car makers to sell electric cars direct to customers –  which could undermine the value of their franchises.

Government protections of middle men in the auto business (states generally do the same in the liquor business) are a classic example of crony capitalism.  Car dealers tend to have a lot of sway with politicians, not to mention with local media for who they are generally the largest advertisers, so they are able to engineer special privileges for themselves.  Congrats to Tesla for taking this on.

Came in via email this morning

Dear President & CEO,

 

We are an organization specified at dealing with domain name dispute and registration in Asia. We have something important on intellectual property right need to confirm with your company.

 

On April 13, 2013, we received an application formally, one company named "Phgbuhfcj Holding Ltd" applied for the Brand Name "coyoteblog" and some domain names with our organization.

After checking, we found your company is the original trademark owner. If the company's action haven't been authorized by your company, so their behavior will conflict with your interests. In order to deal with the matter better, please contact us ASAP. (If you are NOT President, please forward this to your President & CEO, because this is urgent. Thanks.)

Best Regards,

 

Andy
Auditing Director

Web: http://www.easyfa.org

Update, from the comments:  Yes, it is!  I figured as such.  This blog gets pretty good Google ranking so I like to post this stuff for others to find in the future.

One potential gauge can be seen in, of all places, advertising during the Masters golf championship.

I am not a huge golf fan, but enjoy watching the Masters and the British Open (if you have never been in Britain during the Open, it is a fun experience -- people are in bars at 9AM watching).  The Masters is unique among sporting events in that it eschews getting the maximum advertising check, and instead only accepts a tasteful 2-3 corporate sponsors, who run just a few minutes of advertising an hour.  This year the sponsors were AT&T, IBM, and ExxonMobil.

AT&T and IBM had generally non-specific ads that played up their companies' innovativeness, telling well-heeled golf viewers that they would be a good business partner on technology issues.  Exxon did something very different.  They ran ads over and over about how much they cared about education, and in particular in support of common core curriculum.

In our modern mixed economy, the worst thing you can have as a corporation is a bad image.  It means that politicians will look to score points for the next election by gutting you like a fish.  ExxonMobil is the perennial leader on this dimension, though Walmart occasionally grabs the number one spot.  So one purpose of the ads is clearly to improve its image and make people like it.  It is telling that ExxonMobil does not bother to do so in its core business.  There is a great story to be told about how much technology and capital must be invested over long time horizons to get gasoline as cheap as three or four dollars to the pump, but ExxonMobil has obviously given up on this message.  Instead, it works to be liked on a subject, education, largely tangential to its core business.

But its strategy at the Masters seemed to go further.  By actively shilling for the common core curriculum, an Obama-favored initiative to further Federalize k-12 education, they are essentially sucking up to this administration.

I and most of my family worked for Exxon.  I only worked a few years at Exxon (in beautiful Baytown, Texas) but members of my family worked for Exxon their entire lives, and I have known and still know a number of Exxon execs.  And I can say with good confidence that few if any of them really believe that shifting control of education from local agencies close to parents to Washington is really going to help education very much.

So, if you watched yesterday, you saw a multi-million dollar suck-up. And the pathetic thing is that it was probably a useless exercise. The bullied often try to end bullying by sucking up to the bully -- it seldom works.

From today's WSJ

The personal computer is in crisis, and getting little help from Microsoft Corp.'s Windows 8 software once seen as a possible savior.

Research firm IDC issued an alarming report Wednesday for PC makers such as Dell Inc.  and Hewlett-Packard Co.,  saying world-wide shipments of laptops and desktops fell 14% in the first quarter from a year earlier. That is the sharpest drop since IDC began tracking this data in 1994 and marks the fourth straight quarter of declines.

Gartner Inc., a rival research firm, estimated global shipments sank 11.2%, which it called the worst drop since the first quarter of 2001. Gartner blamed the rise of tablets and smartphones, which are sapping demand for personal computers.

Windows 8 was never, ever going to save the PC, because Windows 8 represents an abandonment of the traditional PC.  It is essentially a touchscreen tablet OS forced onto the desktop.  Like Windows Vista, it is an absolutely awful OS that our company has banned any employee from using on a company machine.  Fortunately, we can still buy a few Dell computers with Windows 7, and when that is no longer possible, I will go back to building our company machines and putting Windows 7 on myself, the same thing I did to survive the Vista nightmare  (hanging on to XP until Windows 7 came out).

Later in the article, the author recognizes that Windows 8 is killing the PC rather than saving it

But there is little sign that buyers are responding. In a surprisingly harsh assessment, IDC said Windows 8 hasn't only failed to spur more PC demand but has actually exacerbated the slowdown—confusing consumers with features that don't excel in a tablet mode and compromise the traditional PC experience.

Mr. Chou said not only has Windows 8 failed to attract consumers, but businesses are keeping their distance as well. Chief information officers at several companies echoed his opinion Wednesday.

Ricoh Americas Corp., which replaces about a third of its 17,000 PCs every three years and upgrades to the most current operating system available, said this year it is sticking with Windows 7, released in 2009. Tracey Rothenberger, the company's chief operating officer, said the benefits of switching to the new software aren't worth the effort of training employees to use it.

I am sympathetic to Microsoft's goals, if not their tactics.  Certainly market share in OS is shifting to handheld devices, such as smartphones and tablets, and Microsoft has largely missed this market.  To stay relevant, they need to gain share in these markets -- and trying to gain a foothold by somehow leveraging their market share in desktops makes sense.  It would be great to have an OS for tablets that allowed more access to the file system and customization options, as a competitor to Apple's walled garden, though Google is way ahead in that particular niche.

But the imposition of tablet aesthetics, user interface, and apps framework on desktop PC's is just frustrating as hell for those of us who still like using a mouse and prefer our traditional desktop interface.  The training issue for employees is not a trivial one -- when Microsoft completely abandoned the menu structure and user interface of their Office products several years ago, we decided not to upgrade any of our PC's and, when necessary, to use the OpenOffice alternative, as much because it retains the old Office interface as for its being free.

I still use Word, Excel, and Powerpoint 2002 on this computer, because I have never really been happy with the new Office interface.  I use no other software even remotely that old.  I routinely upgrade everything I have.  I dutifully upgrade Quickbooks and Norton Security and a dozen other programs every year.  So to go a decade without upgrading shows how little I think of Microsoft's upgrade strategies.

Apparently YUM Brands stock is falling because investors are worried about KFC's prospects in China.  I am not a YUM supporter particularly, nor am I a patron of KFC, but from some exposure to China I can say that KFC in China is like Taco Bell in the movie Demolition Man.  They own the market.

This is an amazing and self-refuting cry for help by Kate MacKay (via Maggies Farm)

By and large, my friends and my friends’ friends are all intelligent, educated, gregarious, and creative. They’re insightful and thoughtful. They’re critical and ambitious. So why do so many employers put them in positions that don’t take full advantage of what they’ve got to offer?...

But this is really bad talent management on the part of our employers. If you have ambitious, smart young people who actually want to do more work and use their talents to the maximum – so that they can grow as people and employees – then you’re an idiot as an employer to not take advantage of this....

The places that we work for are chock-a-block with people who are contented in their positions; they’re sitting low in their saddles, riding out the last miles toward the sunset of retirement. They’re not interested in changing horses any more, the way we are, and so those saddles that we want to have remain full, often by people who have lost more than just their ambitions for new jobs. They’ve lost the drive to get things done quickly, they’ve lost creativity, and they’ve especially lost the outsider’s perspective on the job they do and the company they work for. They’re entrenched in the corporate culture of the place, and nothing kills innovation or ambition faster than people dedicated to the status quo....

This is where I am, and many of my friends are in this position too, just hoping and waiting for either the next better job outside, or some radical shift inside. I’ve thought seriously about changing my LinkedIn profile blurb to something like, “My career goal is to gain a position that energizes, excites, challenges, and values me, so that I can continue to develop my skills and talents, and grow as a person.” I wonder if that would catch anyone’s eye?...

OK, stay with me, I am saving the good part for last, but it is important to get this background.  This person is seriously confused.  Companies do not exist to give one jobs that match one's skills.  In fact, they do not exist to provide jobs at all.  They exist to serve customers and thereby generate surpluses for the owners.  They hire people to do specific jobs that are part of a process to serve these customers and owners.

I am sympathetic to the notion that there is lost value in my employees, that they can do things that might be useful to me that I do not tap.  But I have 500 employees.  I have time to customize like maybe two of those jobs to the talents of individuals, and these are high level jobs where the benefit of that time commitment on my part is worth it.  For the rest of the employees, I have to be satisfied I am missing some value, because at best I don't have the time or resources to customize jobs to every employee's unique snowflakeness.  And at worst, such customization would mess up our customer service process.  At some level, I don't want every front line employee inventing his or her own imagined customer contact or cash management process.

But I promised you the best is yet to come. and here it is:

All of them wonder when their break is going to come, when the thing they’re doing will finally spill over from ‘just making it work’ to ‘making it.’ And I wonder that too, because this risk-taking group of determined individuals should be rewarded by the universe, I think, for their innovation and dedication. The other group, sitting undervalued at their desks, should be likewise rewarded for their abilities and ambitions.

My overall sense is that we’re all in the same place, sitting together in a kind of employment purgatory, waiting for something to happen. We keep working – we’re not sitting idle. We apply for jobs, we network, push for promotions or projects, advertise ourselves, and keep our eyes on the horizon. We are striving, ever striving, for the thing that we want that we know we can do. Economists be damned, we’re all just waiting for our big break, and we won’t be satisfied with a comfy saddle riding toward the sunset.

Did you get that?  This risk-taking and proactive group is determined to sit on their ass and wait for someone in the universe to appreciate them, for some organization to create a perfect job that gives each employee snowflake his or her perfect work experience.

Jeez, I have had a series of sucky jobs over time.  So as advice to those that think a proactive job search encompasses seriously considering a new Linked-in profile blurb, I did two things:

• I changed jobs, and eventually went to work for myself.
• I stopped defining my total-life fulfillment by what I do for a paycheck, and took on other tasks outside of work (blogging, writing, building) that brought me satisfaction but for which people have been as-yet unwilling to pay me.

The Bitcoin price correction most of us expected seems to be occurring 

So what is next for Bitcoin?  I predict death by lawyer.  In modern America, no one loses this much value this fast without calling an attorney, because such losses can't possibly be due to one's own poor decision-making (e.g. buying an illiquid currency after a 5x runup in its price), it must be due to GETTING HOSED.  I am not a securities attorney, but my guess is that someone will argue Bitcoin was not a currency but a digital commodity and that commodity trading laws were not followed.  Or something like that.  The CFTC, which left MF Global customers hang out to dry, will launch a simultaneous investigation to gain pub for themselves and support the civil suit.  Because it will be a much higher priority for this Administration to kill an incipient competitive currency than to go after a major Obama bundler.

Anyway, the main entertainment value will be to see if there is actually someone who can be sued, given the dispersed nature of the Bitcoin network.  But expect people to try.  I would even bet we see the suit in days -- "entrepreneurial" tort houses probably have already drafted the paperwork and gotten some schlub to buy 1 bitcoin so he can be lead plaintiff (preferably in a hand-picked jurisdiction) in the class action and are just waiting for the bubble to burst to file.