Who assumes the risk of corked bottles?

Were there some new gadgets invented, whereby the back label has some sensors that are temperature sensitive, and whenever the temperature reaches above X degrees, the label permanently colors in red, so in that way you know?
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Yes. For all the obvious reasons, no one wanted to use it. More importantly, people who were not selling it put it through their own heat-exposure trials and it never changed color.
 
I am over-simplifying here but my read of Goldman's defense is they are (re)casting their role in l'affaire fab Fab as a market-maker (matching buyers and sellers) rather than marketeers (underwriting/offering a security or derivative). It's an important distinction from an ethical and legal perspective in terms of one's duty to the counterparties, but often gets elided on sales trading desks.

I think the cork producers should ultimately bear the costs of their defective product, but as many have pointed out, the information to assign those costs accurately and in a timely fashion does not really exist. I am naturally sympathetic to the farming class, so that colours my views.
 
I have never read a thread full of so much ignorant bullshit on this site. Bottles that have TCA are the exclusive responsibility of the producer. That is where it happens. The distribution chain has nothing to do with it. If you get a corked bottle, you bring it back to the place you bought it, and they make it right, either by replacing the flawed bottle with another one (which may or may not be flawed...) or by giving you back your money. As a retailer, it's no skin off my nose. The distributor takes it back, and I'm made whole. What happens further down the chain is not my business.

As for the GS stuff, I can think of no other profession that allows that kind of self-dealing, except maybe for the medical profession, which used to seem exceptionally lucrative, until the likes of Lloyd came along.
 
originally posted by Yixin:
I am over-simplifying here but my read of Goldman's defense is they are (re)casting their role in l'affaire fab Fab as a market-maker (matching buyers and sellers) rather than marketeers (underwriting/offering a security or derivative). It's an important distinction from an ethical and legal perspective in terms of one's duty to the counterparties, but often gets elided on sales trading desks.
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Doesn't matter. What matters is if they knowingly made false representations about how the properties were being selected. If the allegations prove true, they've been caught red handed. Which is why they're attempting to try this in the court of public opinion, an obviously uphill battle, although the comments here indicate that they are succeeding. Some people are buying this BS and think that they are expert lawyers even though they've never been to law school or passed the bar (and I can tell you from 32 years' experience that only a small percentage of the people who pass those two hurdles, which do mean something, are very good lawyers).
 
originally posted by Jonathan Loesberg:
I'm sorry. They were betting against the derivatives. So were many others. At this very moment, there are investors betting against the success of some investment or another. That's how the market works. Unless they had more information than their investors had--and their argument, which is at least not irrational--is that their investors had the same information they did, they did not possess greater certainty as Ned asserts. And, of course, they did not possess greater certainty since in the event they also invested in these things and lost money, a bundle more than they made. To the extent that they did not inform their investors, there is a case for deceit and civil fraud, but it may not be a great case, depending on who those investors were. In short, GS was "defrauding" others who, like themselves, invested in these things and lost money. If someone wanted to go after someone, they might start with Magnetar, but it's less glamorous and the tentacles are more unsettling.

Again, I'm not defending their moral probity. And I'm certainly not defending the way mortgages were offered, accepted and then repackaged so that no one could see what they were buying and selling clearly. And I'm certainly in favor of considerably more financial oversight than is even being currently considered. The alternative is not between sending Fab Fab to the clink and signing on with Republicans, or even with the current bill, which doesn't go nearly far enough. I'm just saying that as a symbol for what went wrong, GS is really not as great as, say Enron. It's more in Martha Stewart territory.
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The difference is the others didn't create the securities and bet against them.
 
originally posted by VLM:
A lot of people in the industry don't think that this model is fair.
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Piffle. You sell me a bad meal, you make it up to me -- comp me a dessert, take the main off the check, give me a coupon -- else I tell all my friends (and all the people on the Internet) about it.

Never mind who can control what: the important thing is who has a relationship with who. The ultimate drinker buys from the shop (probably) so it's up to the shop (probably) to fix it. If the shop (probably) can be made whole by passing the problem along, that's nice but the ultimate drinker doesn't really care.

As to the difficulty of getting the problem fixed when you buy remote... that is a burden the ultimate drinker knowingly took on himself.
 
I think that TCA becomes more apparent with bottle age. This is purely something I've come to think as a result of experience, and I don't recall ever having read it anywhere. I also believe that TCA becomes more apparent with aeration. But back to the original point, you might store a wine for 20 years. You open it. No question, it's definitely corked. Who do you return it to? The shop might not even be around. You may have moved across the country. The winery may be gone, even.

The same bottle opened 2 hours after purchase in an alternate reality: you don't notice it's corked until the last sips. There is hardly any wine left in the bottle.

In either scenario, the wine probably isn't returned.

I have a large amount of trouble returning corked bottles to distributors. It is a major pain in the keister.

Drinking corked wine makes me somewhat sick to my stomach. I feel ill. It is kind if amazing people don't notice TCA, when you think about it.
 
originally posted by Levi Dalton:
I think that TCA becomes more apparent with bottle age.
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I once asked Francois Audouze, well known for consuming old wines, about corked bottles, he responded that he never encounters very old corked wines. I can't remember if he had an theory or explanation as to why that was. I was astonished but had to accept it.

I think you're right, but it may be mainly true about bottles from the past 20 -30 years or so. However while I've only ever opened several dozen bottles that were 35+ years old, none was corked. So I don't know whether to attribute that to luck, older corks being better or TCA increasing for some years but then eventually dissipating, which might go to explaining Mr. Audouzes experience.

The nature (no pun intended) of the product is really ill suited to normal methods of product warranty.
 
originally posted by Levi Dalton:
I think that TCA becomes more apparent with bottle age. This is purely something I've come to think as a result of experience, and I don't recall ever having read it anywhere. I also believe that TCA becomes more apparent with aeration. But back to the original point, you might store a wine for 20 years. You open it. No question, it's definitely corked. Who do you return it to? The shop might not even be around. You may have moved across the country. The winery may be gone, even.

The same bottle opened 2 hours after purchase in an alternate reality: you don't notice it's corked until the last sips. There is hardly any wine left in the bottle.

In either scenario, the wine probably isn't returned.

I have a large amount of trouble returning corked bottles to distributors. It is a major pain in the keister.

Drinking corked wine makes me somewhat sick to my stomach. I feel ill. It is kind if amazing people don't notice TCA, when you think about it.
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I thought people have different tolerance levels, but perhaps the ability to recognize TCA is learned.
 
originally posted by Claude Kolm:
Jonathan - Their betting against the derivatives is not the crime that they are being charged with. They did bet against the derivatives in other instances, and although that's pretty smelly and risked the world economy for GS's financial gain, it was not a crime based on what we so far know.

Their alleged crime had to do with setting up a deal between two other parties and telling one of the parties that the deal was fairly set up, when in fact they worked with the second party to see that the first party would lose. The reason Paulson hasn't been charged, I presume, is because Paulson made no false representation to the first party.

And Martha Stewart,by the way, got what she deserved under the law that has a very distinct purpose in order to prevent obstruction of justice. This ain't criticism and you ain't a lawyer.
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For good reasons, lawyers don't find people guilty, juries do. If GS did what you allege, they are guilty. If the evidence were stronger, we wouldn't be trying this in the press and before posturing Congressional panels. For truly irresponsible journalism, read the Washington Post story today on the Justice dept. investigation into GS, which goes on for numbers of columns but can't manage to specify the charge or charges they are investigating. Look, I'm all for prosecuting white collar crime. But as with baseball and drugs, I can also smell when things are becoming symbols and not facts. Maybe lawyers can't.

Precisely because I'm not a lawyer, I can tell the difference between charging someone with insider trading and charging someone with lying because it turns out you don't have sufficient evidence to charge them with insider trading. Sometimes you get actual criminals this way, like getting Al Capone on tax charges. Sometimes you get Martha Stewart.
 
Article in the Wall Street Journal today about corks and other closures. Interesting that Nomacorc is located in NC near the Monkey, coincidence?
 
originally posted by Levi Dalton:
I think that TCA becomes more apparent with bottle age. This is purely something I've come to think as a result of experience, and I don't recall ever having read it anywhere. I also believe that TCA becomes more apparent with aeration. But back to the original point, you might store a wine for 20 years. You open it. No question, it's definitely corked. Who do you return it to? The shop might not even be around. You may have moved across the country. The winery may be gone, even.

The same bottle opened 2 hours after purchase in an alternate reality: you don't notice it's corked until the last sips. There is hardly any wine left in the bottle.

In either scenario, the wine probably isn't returned.

I have a large amount of trouble returning corked bottles to distributors. It is a major pain in the keister.

Drinking corked wine makes me somewhat sick to my stomach. I feel ill. It is kind if amazing people don't notice TCA, when you think about it.
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It depends on where the TCA is in the cork. If it is at the top, as far away from the wine as possible, it is unlikely that the wine will be corked since a study by Australian Wine Research Institute [AWRI] has shown that external TCA will not penetrate a sound cork.
They applied radioactively tagged TCA directly to the top of the corks in bottles of wine.

Of course if there is TCA at the top of a cork which doesn't reach the wine the corkscrew might then introduce it to the wine on opening either directly or by attaching it to the neck on extraction which in turn might contaminate the wine on pouring.

TCA that is 'available' directly to the wine will 'cork' the wine quickly so AFAIK bottle age is unlikely to be highly correlated with the degree of TCA pollution except in those cases where the amount available and placement is marginal.

TCA definitely "becomes more apparent with aeration" particularly where the pollution is low and/or the consumer has a high threshold which varies enormously for individuals; from single parts per trillion right up to those who cannot smell, even that rank odour, at all i.e. true anosmiacs.

TCA in wine is not very volatile at cellar/room temperature so very low levels of TCA infection, temperature increases, aeration and of course time in the glass will encourage the molecules into the sensing zone in sufficient quantity to be smelled when individual thresholds are reached.

The arguments over whether a bottle is corked even amongst wine geeks are primarily a function of very different individual sensitivities and, partially, experience. Experience of the phenomenon affects the ability to recognise it particularly at low levels, occasionally to the point of excessive attribution even when none of those present, even the extreme sensitives, ever smell the dreaded smell but start referring to the 'fruit being stripped' and the wine being 'not quite right'.

At which point, if available, a second bottle [which is apparently better] is used to proclaim the first one corked despite the continuing absence of the smell as though a cork is the only thing that accounts for variability in a wine. And when it does bingo it must be TCA rather than the several other aspects of wine chemistry that can account for such differences.
Nevertheless it is possible for high threshold wine drinkers to experience a diminution in fruit [but not get the smell] while low threshold tasters recoil from what is one of the most powerful, in sensory terms, of wine-related chemicals. The latter obviously become familiar with the taste of such wines but generally that is not confined simply to a diminution of fruit but is altogether more pervasive.

As far as not finding corked bottles of old wine is concerned TCA in cork was only identified as the musty smell/taste in wine in 1981 although the musty corked problem had been identified well before that. TCA is usually formed these days from the methylation of trichlorophenol by a number of common moulds essentially the detoxification of the halophenol by the mould. Halogenated pesticides and wood protection treatments can provide the relevant halophenol although bleach in conjunction with the phenolic components in cork and other wood is also a route.

If very old wines indeed show very much lower [to zero] TCA infection it seems likely that it could be a function of several possibilities: zero to far less halogenated product/pesticide in the cork forests [now banned] or, as later, in their use as cleaning/bleaching agents in cork production [also ceased]. TCA requires a halogen precursor and if one goes back far enough it is possible none were available around corks and wineries. However halophenols are now widely available in the environment which is why TCA can often be smelled where no cork has ever been: in chlorinated drinking water, wood chips used on flower beds and as ground cover generally, where wood and bleach have been in regular contact, in plastic bagged root vegetables etc, etc.

As far as TCA dissipating over time, this would only happen if the chemical either reacted with another wine component or decomposed to something less malodorous or was somehow re-adsorbed/absorbed into the cork.

None of these are likely bearing in mind there are plenty of old [although perhaps not very old] wines that have had strong TCA infections. Interestingly, ullaged bottles of deliberately TCA-infected bottles of wine apparently did lose their TCA to the cork [natural or plastic] closures over a period of weeks which is why the AWRI changed to glass-closed bottles in studies assessing e.g. the stability of TCA and the effect on its perception against background oxidation. However it is highly unlikely that this would explain the apparent absence of TCA from very old wines. It is much more likely that it was never there.

typos
 
originally posted by Ian Fitzsimmons:
Radioactive tagging? Why not just check for presence of TCA at the bottom of the cork after the testing period?
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Because 'ordinary' TCA might have been there before the bottle was sealed.

However if any radioactively-tagged TCA was detected in the wine it would have had to penetrate the cork from the top where it was placed.

They also looked at the cork itself and looked at where the marker had reached. The radioactive tagging allowed them to differentiate from any potential TCA naturally present.
 
originally posted by Jonathan Loesberg:
originally posted by Claude Kolm:
Jonathan - Their betting against the derivatives is not the crime that they are being charged with. They did bet against the derivatives in other instances, and although that's pretty smelly and risked the world economy for GS's financial gain, it was not a crime based on what we so far know.

Their alleged crime had to do with setting up a deal between two other parties and telling one of the parties that the deal was fairly set up, when in fact they worked with the second party to see that the first party would lose. The reason Paulson hasn't been charged, I presume, is because Paulson made no false representation to the first party.

And Martha Stewart,by the way, got what she deserved under the law that has a very distinct purpose in order to prevent obstruction of justice. This ain't criticism and you ain't a lawyer.
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For good reasons, lawyers don't find people guilty, juries do. If GS did what you allege, they are guilty. If the evidence were stronger, we wouldn't be trying this in the press and before posturing Congressional panels. For truly irresponsible journalism, read the Washington Post story today on the Justice dept. investigation into GS, which goes on for numbers of columns but can't manage to specify the charge or charges they are investigating. Look, I'm all for prosecuting white collar crime. But as with baseball and drugs, I can also smell when things are becoming symbols and not facts. Maybe lawyers can't.

Precisely because I'm not a lawyer, I can tell the difference between charging someone with insider trading and charging someone with lying because it turns out you don't have sufficient evidence to charge them with insider trading. Sometimes you get actual criminals this way, like getting Al Capone on tax charges. Sometimes you get Martha Stewart.
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I hope you are unintentionally missing Claude's point and not ignoring it on purpose. Martha Stewart could not have been charged with insider trading. She was not an "insider" and owed no duty under the law to not trade on information (improperly) given to her by her broker. Claude makes the same point (albeit re a different specific statute) re Paulson in the transaction with respect to which GS has been charged. MS was found to have obstructed justice, because she was found to have lied under oath in an investigation of potential securities crimes BY OTHERS. You may be suggesting that the prosecution had ulterior motives in going after MS, but if so, I am not sure what they might have been. If one believes in securities laws (and generally I do), it doesn't strike me as crazy to have a system that penalizes person A (who has material information about person B's potential violation of those law) for lying to the investigators.

I won't comment on the GS situation, but Claude has described what GS has been charged with and it has nothing to do with their "betting" against securities that they were also selling. That said, I think we'd all agree that sometimes a prosecution is both a "normal" investigation of potential violation of civil or criminal law AND a symbol of other things going on in the society.

And you're factually incorrect about juries. Something like 95% of convictions in the US result from plea bargains, negotiated between prosecution and defense lawyers. (Not necessarily a good thing, IMHO, but nonetheless the way justice "works" here.)
 
originally posted by Jonathan Loesberg:

For good reasons, lawyers don't find people guilty, juries do.
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In the federal courts and every state in the union except Maryland, which is considered a great anomaly, juries are limited to questions of fact. Questions of law are always decided by judges. They instruct the juries what they can consider and what they cannot and how much weight they are to accord to the factual evidence and how the law applies. Oh, and by the way, judges have the power to overrule a jury's verdict. Jonathan, I'm sorry, but you've really diminished my respect for you by this thread and your ridiculous arguments.
 
originally posted by Ned Hoey:
originally posted by Levi Dalton:
I think that TCA becomes more apparent with bottle age.
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I once asked Francois Audouze, well known for consuming old wines, about corked bottles, he responded that he never encounters very old corked wines. I can't remember if he had an theory or explanation as to why that was.
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I have a theory on that.
 
originally posted by Claude Kolm:
originally posted by Jonathan Loesberg:

For good reasons, lawyers don't find people guilty, juries do.
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In the federal courts and every state in the union except Maryland, which is considered a great anomaly, juries are limited to questions of fact. Questions of law are always decided by judges. They instruct the juries what they can consider and what they cannot and how much weight they are to accord to the factual evidence and how the law applies. Oh, and by the way, judges have the power to overrule a jury's verdict. Jonathan, I'm sorry, but you've really diminished my respect for you by this thread and your ridiculous arguments.
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I am unclear about the basis of the level of anger you are displaying. It is way beyond anything merited by this question. I never said juries determined questions of law. I never argued any question of law with regard to GS. I argued that they did not engage in fraud. I can only follow these things in newspapers, but as far as I can tell, this is Bear Sterns all over again, except that this one has the clear smell of a public tarring and feathering. If you are privy to evidence not being reported in the papers, I will defer to that.

Kirk to the contrary notwithstanding, Martha Stewart was originally brought under suspicion and was questioned because she was alleged to have sold shares in a drug company when her friend, who was the president of the company told her, prior to the reporting in the news, that the drug had been rejected by someone or another. This is insider trading. It is what they could not prove and instead charged her with obstructing justice in the sense of obstructing the case they were unable to prove, by lying under oath. If I had been a member of that jury, I would have had to vote to find her guilty, but I wouldn't have liked it.
 
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