Chicago Tribune scrutinizes CPS bond deal

The Chicago Tribune published an extensive, front page feature on the Chicago Public School District’s use of innovative borrowing strategies over the last decade, which appears to have backfired and inflated borrowing costs by $100 million.

Appearing in the Sunday print edition of the newspaper, the story centers around the district’s practice of issuing auction-rate bonds, paired with interest rate swaps, to reduce the cost of borrowing money. In contrast to more traditional, fixed-rate bonds issued by school districts and municipalities, the variable rate instruments were subject to future market conditions and in this case, ultimately moved against the district. Servicing the debt became more costly, and breaking out of the contract required large lump-sum payments.

Several academics, financial professionals and public officials contacted for the story said greater consideration should have been given to the potential risks involved. The district’s financial advisors who crafted the deals defended them, disputing the newspaper’s analysis that concluded that they cost the district $100 million.

A couple notes: first of all, reporters Jason Grotto and Heather Gillers did a great job with this story. It’s a serious, in-depth piece on a local topic of real civic importance, showcasing one of the strengths of newspaper journalism. That’s not to say I endorse every sentence or every shade of tone and nuance in the article, but that’s beside the point. The point is that this is important, engaging reporting. Definitely worth my Sunday subscription price.

Secondly, it should be noted that the district and its financial people weren’t crazy or irresponsible for considering the new type of deals that were being used more often during the early 2000s. Innovation occurs in the financial industry just like every other industry, and just because something is new and more complex, doesn’t mean it’s wrong or irresponsible.

Thirdly, that being said, I believe (and I think most reasonable citizens would believe), that a school district should generally take a conservative approach to resource management and financial planning. That might mean you don’t try to shake a point or two out of every deal, if it means incurring an unpredictable future liability stream.

Fourthly and finally, I thought that the reaction of the CPS advisors in response to this article was lacking, at least in terms of what was published. The competing analysis they submitted in response to the Tribune analysis omitted key information, leaving their defense of the deals less credible. Again, it’s not always wrong to take calculated risks, but if the deals don’t work out, just say that, rather than stretch or skew an analysis stating that they did.

But worst of all was Adela Cepeda‘s attempt to strike back at the newspaper for investigating the public school district’s finances. “I consider the slant of the reporters for this article to be absolutely biased and outright sexist,” she said in a letter to the Tribune. She also criticized the paper for consulting a New York firm to review their own analysis before publishing, only to then use a New York firm herself to submit her own analysis.

Cepeda earned an MBA at the University of Chicago, and was in banking for ten years, according to the article. She married into a politically connected family on the city’s South Side, and very shortly after forming her firm won contracts with CPS. Her partner, David Vitale, is a former Chicago Board of Trade president and currently serves as president of the school board.

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Drudge silent on app flap

It’s been five days since the latest Drudge Report app was released, and fallout continues to collect in the form of disaffected fans who say the update fails to deliver even a readable version of the website. As of tonight, 286 users have slammed The Drudge Report – Version 5.0.2 in the iTunes store, nearly all of them rating the app only one out of five stars.

So far, there are no new updates on offer after 5.0.2.

The Drudge Report mobile app has been plagued by problems and poor user reviews.

The Drudge Report app has been plagued by problems and poor user reviews.

I emailed the Drudge Report several days ago with several questions, and have not yet heard back from anyone. Granted, it was a public email, so Drudge and the team no doubt field a large volume of messages. However, I have sent another message tonight in hopes that my questions will be seen and responded to by Matt Drudge or an associate.

One thing I believe Drudge could do is simply to draw more attention to his mobile version website. Currently, if an iPhone user visits http://www.drudgereport.com using the Safari browser, the user is not automatically redirected to a mobile version of the page at http://www.idrudgereport.com. There’s a tremendous difference between the pinching and scrolling required required to read headlines on the desktop version of the site with a smartphone, and using the relatively smooth, user-friendly mobile version. In fact, right now, idrudgerport.com is vastly superior to 5.0.2.

Major news sites typically use what web developers call “responsive web design,” allowing users to access access the site from various devices (desktop, tablet, smartphone) with equal clarity and ease. A simpler technique is to build a stand alone companion site for mobile users and automatically redirect readers there. A third, even more basic way to go is to build a companion site or even a site within a site, and let users click a button on the desktop homepage to let users go to the mobile version if they desire (no automatic rerouting required).

The Drudge Report doesn’t utilize the first strategy (a responsive site), but should be able to incorporate the second or third strategy without a terrible amount of effort and expense. Unless and until Drudge puts out a good mobile app, smoothly escorting phone and tablet readers to a mobile-optimized experience is the only decent thing to do.

 

 

 

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Drudge doubles down on dismal app

Version 5.0.1 of the Drudge Report app was released October 9, 2014.

Version 5.0.1 of the Drudge Report app was released October 9, 2014. It was widely criticized for its small font.

New media icon Matt Drudge has resisted the pleadings of hundreds of loyal readers, and re-released The Drudge Report app without substantially changing the layout of the ill-received version released only nine days earlier. Version 5.0.2 was released in the iTunes store this past Thursday, October 18 and marks the third update this month to the mobile app for one of the most popular online destinations for news and politics.

More than two hundred users have reviewed the update in the iTunes stores, collectively giving this version of the app the lowest possible one star rating. Several days before the latest release, nearly six hundred reviewers had already given the prior version, 5.0.1, a lowly one star. In the Google play store, the newest version debuted today and nine reviews have been been published. Google doesn’t break down the reviews by release version of the app, but if you do the math, the new release scores a 2.8. Higher than the iOS edition, but still quite lacking overall.

What is shocking is that Drudge payed no attention to the major criticisms of Version 5.0.1, which was that it was essentially no different than opening up http://www.drudgereport.com in the Safari browser on iPhone. The font size was so small that it required lots of zooming and pinching, and there were no usable features. This new version incorporates no new features and does nothing to make the page more readable – the font is still tiny and not suitable for reading on a smart phone.

Version 5.0.2 of the Drudge Report was released October 20, 2014. The update contains no major changes from the previous version.

Version 5.0.2 of the Drudge Report was released October 20. The update contains no major changes from prior version.

Strangely, developer Siren Tech LLC declares in the publishing details that “this app is optimized for iPhone 5,” a statement which is patently and demonstrably false. The update summary flatly asserts that the new version has been released for “bug fixes.” Siren Tech’s moniker (connoting a direct connection to the Drudge Report, which uses a siren to signal breaking news) and its inexperience (no other published apps to its credit) raise the question of whether somebody very close to the Drudge Report – perhaps Matt Drudge himself – has developed this app.

The disarray and apparent lack of a clear, mobile strategy stands in stark contrast to the well-earned status Drudge enjoys as a digital media pioneer. While mobile app users make up a small percentage of overall readers, they represent a loyal audience base and most likely account for a disproportionate amount of visits. It’s incomprehensible as to how and why The Drudge Report would not have a usable mobile app in 2014.

I have reached out to Matt Drudge seeking comment and will publish an update should he respond to shed light on this situation.

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UPDATE: Drudge demotes app advertisement

Matt Drudge has lowered the profile of the new Drudge Report app, pulling it from the top headline spot in recent days to put it down near the bottom of the page. It’s unclear whether that decision was planned in advance or whether it is a response to withering criticism the latest version of the app has received in the iTunes and Google play store.

Yesterday, the top spot in the third column advertised the newest version of website's app for iPad and iPhone.

Yesterday, the top spot in the third column advertised the newest version of website’s app for iPad and iPhone.

Today, that headline with a link to the app store had been pushed down to the bottom of the column.

Today, that headline with a link to the app store had been pushed down to the bottom of the column.

I am staying on this story and will publish developments as they become available.

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Drudge Report iPhone app bombs

The Drudge Report's iconic breaking news siren. This week, fans of the site have declared its mobile app a complete failure.

The Drudge Report’s iconic breaking news siren. This week, fans declared the site’s mobile app a complete failure.

The Drudge Report is one of the web’s most popular sites, and a key force in shaping the daily news cycle – a role it has occupied since it broke the Monica Lewinsky scandal in 1998. QuantCast ranks www.DrudgeReport.com at #158 for U.S. websites, while online analytics firm Alexa declares it to be the 100th most popular site in the country as measured by a combination of unique visitors and page views – just a few spots below the BBC but ahead of Major League Baseball and real estate listing giant Trulia. By all accounts, the enigmatic Matt Drudge is a smashing success.

So why is the Drudge Report app such an absolute failure, according to its own users?

What happened?
“Everyone here loves Drudge, but until you can fix this app, Ill just be using it in Safari….”

5.0 is better but still bad
“These app developers should be fired… At this point I have to wonder who is actually approving these updates and how did they get this job….”

I’ve been a loyal Drudge reader for years. Indeed, as one of the “10% Addicts” who account for “70% of Visits” (according to QuantCast), I’ve scanned nearly every site headline, nearly every day, for much of my adult life. So while Drudge has his share of detractors for everything from his tabloid instincts to his right of center, libertarian leanings, I’ve got no beef with the man. While he’s not the only news source I go to, he is certainly one of my “go to” sources when I want to know what’s happening in the world on any given day.

The other day, while perusing the App Store on my iPhone 5s, I noticed that a few of my apps needed updating, including the Drudge Report. After I updated, I opened up the app, and…. was totally bummed. Something was not right, and I wondered if maybe my download had a glitch and I needed to restart the app, which I tried to no effect.

Useless
“Matt, you seriously need to boot these developers and keep giving your audience what you have for years – an easy to read glance at pertinent headlines. A .5 font size in three columns is going to lose you the audience you’ve worked so hard to gain.”

I really don’t understand…
“Now it’s all hopelessly tiny script you have to pinch to zoom in on. Seriously?!?”

Basically, everything is tiny. Like really, really tiny. So small you might as well be reading the lowest line in the eye chart machine that you think you can see but you’re really not sure about every other character (is that an E or a 3?). In fact, there’s no discernible difference between opening up the app to get the headlines and opening up the website itself in Safari on iPhone (which, in and of itself, does not seem to be mobile-optimized, which is another, completely baffling story to me).

I took a look at the ratings and reviews for the app in iTunes. Turns out everybody was scratching their heads just like I was, and sounding off with their feedback on the new version 5.0.1. With 567 ratings as of this writing, the app had only 1 star out of 5 – the worst possible rating for an app.

Thanks for Web Page in an App
“This app is now useless. It looks just like the web page, except the web version is better because you can at least share links and use the reader function….”

Return– still horrible
“I’ll be using my brewer instead I guess. I don’t understand how Matt Drudge can be letting this nonsense occur.”

Two constant themes ran through the criticism: that developers seemed to be responding in a petulant, childish manner to earlier criticisms of the most recent previous version (it had a few bells and whistles that didn’t quite work out that well for some users, and in the new version they have been stripped away to present a highly minimalist package for the app); and that the three-column website layout has not been adapted for the small screen, leaving the font so tiny as to be illegible. The only high rating I saw (other than one who gave five stars simply to stand out and to “give hope” to Matt, before trashing the actual app) was somebody reviewing the app as used on an iPad.

DrudgeReport.com as viewed on an iPhone 5s on October 14, 2014.

DrudgeReport.com as viewed on an iPhone 5s on October 14, 2014.

The app developer, Siren Tech, LLC has no other apps published in the iTunes store, and only one app (this one) in the Google play store, where every review since the new version was unveiled also earns the lowest possible rating of one star. Version 5.0.1 was released on October 9, only a week after Version 4.0 was launched. The latest iteration is touted as “The pure Drudge Report experience,” in reference to its streamlined approach that is light on features. Overall, the app earns three stars in the iTunes store, factoring in ratings for earlier versions.

Information about Siren Tech is hard to come by. The “developer website” link in iTunes takes you straight to the Drudge Report, and no home page comes up in a Google search. However, information about the company does appear on the Nevada Secretary of State‘s website, which records Siren Tech LLC as a domestic limited liability entity registered in that state as of May of 2011. Its registered agent is the Laughlin Associates out of Reno, a company that assists and represents business owners forming a business entity.

The Drudge Report, as viewed in the mobile app on an iPhone 5s, on October 14, 2014.

The Drudge Report, as viewed in the mobile app on an iPhone 5s, on October 14, 2014.

A managing member is also listed, however: Richard Moon of Valencia, California. His address listed with the Secretary of State’s office is also the address of a California firm, TC Financial, which provides services ranging from investment planning, tax preparation and estate conversion. Nothing on app development, per se. 

If you’re a regular to Drudge, you recognize the siren atop the page that signals a major, breaking news story. That, and the fact that there is no other trace of Siren Tech LLC doing any other development work, leads me to wonder if Matt Drudge built his own app, or at a minimum, if a non-professional developer (i.e. a friend, etc) built the app for him.

Mobile app users account for a small but portion of Drudge Report traffic according to the folks at Alexa (about 5% in a recent week, for example), but most likely represent a base of “power users” for the site, and in theory should be on the rise as apps continue to become more prevalent generally. However, the recent rollout of this app and the utter fiasco that it has become makes one thing clear: Matt Drudge needs a new app, and a new developer, before this mobile mishap causes too many readers to turn the page on a site that helped usher in the new media age as we know it.

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Gordon’s pregame leads team to postseason

Various political topics occurred to me as I considered what to write about today, but in the end I’ve got to go with something entirely apolitical: Kansas City Royals left fielder Alex Gordon‘s pre-game workout routine. My wife and I have been watching the Major League Baseball playoffs the past ten days or so with rapt attention, because our beloved Royals have been tearing it up, winning six straight and up 2 games to none against the Baltimore Orioles in the American League Championship.

Screen Shot 2014-10-13 at 8.11.20 PM

Kansas City Royals left fielder Alex Gordon, whose “pregame routine is the stuff of legend,” writes Alden Gonzalez of MLB.com. (Photo: Royals.KansasCity.MLB.com)

Gordon is a cornerstone of the team, having been a Royal since he entered the big leagues and having made two trips to the All-Star game to represent the club. He’s also a three-time Gold Glove winner.

What I didn’t know about Alex Gordon until now was just how dedicated he is to developing and maintaining on his level of on-field performance. That shows up in his daily pre-game workouts, which stretch for hours and include strength training, extensive stretching, sprints, fielding drills, batting practice and more, according to reporter Alden Gonzalez of MLB.com. He manages his time efficiently and moves from one task to the next with a serious sense of purpose.

Gordon has gained a couple disciples among fellow players on the team, who now emulate the routine, and the Royals have put together a condensed video of the workout to send around as an example to the players in their farm system.

There’s a reason the country is rooting for the Kansas City Royals right now, and it’s got a lot do with the fact that it’s guys like Gordon, working as hard as he does, that brought them to where they are now – just two games away from the World Series.

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Why I won’t be getting my ten bucks from RedBull

I definitely downed a few RedBulls between 2002-2014, but I won’t be asking for ten bucks from the company, which announced last week that it was settling a lawsuit for $13 million by giving away free cash and energy drinks to anybody who had bought a RedBull during that time.

The class action lawsuit alleged that RedBull didn’t really give you wings, as its commercials advertised. More specifically, the suit asserted that contrary to the company’s marketing claims, drinking a RedBull didn’t do anything more for somebody than drinking a cup of coffee.

Speaking of coffee – is this the McDonald’s hot coffee lawsuit of our generation?

Actually, I would say it’s worse, because a woman was actually seriously injured when she spilled a scalding cup of joe between her legs. Some guy out there (i.e. Benjamin Careathers, the main plaintiff) habitually downs caffeinated beverages and wonders why he’s not getting that sudden “jolt” of performance he was hoping for? All of a sudden he’s an injured party and needs to be made whole?

The settlement included an additional $4.75 million to cover attorney’s fees according to Law360, making the total payout nearly $18 million for Austria-based RedBull. Clearly, the company thought it had something to lose by going to court – although as a general matter I wish companies would not settle so easily and instead make the opposition beat them in court. Energy drinks have come under increasing scrutiny in recent years, so maybe it’s not a shock that something like this is happening now.

And maybe Careathers is right that RedBull’s advertising is misleading; that it oversold the benefits of its product. The problem with the lawsuit is – doesn’t every ad campaign do that?

I won’t be claiming my ten bucks from RedBull on the site they’ve set up to distribute the funds. Mostly because I don’t believe in the lawsuit, but secondarily, because they’re may not be much money left after the bonanza that was this story hit the net last week. Traffic to the settlement web page was so heavy that the site crashed, and the money will be divided by the number of people actually requesting the free money or product, meaning the payout could end up being just a few bucks per person when all is said and done. The $13 million figure does not even factor in the cost of administering the class action settlement, which is handled by a company which specializes in that sort of thing.

Who knows, with all the publicity RedBull is getting, and the public’s general interpretation of this suit (‘of course RedBull doesn’t give you wings!) this may be one of the most effective ad campaigns, dollar for dollar, the company has ever managed.

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