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NBCOlympics.com, the Web site that Tempe-based Limelight Networks Inc. is helping deliver media content to, saw a flurry of activity in the first few days of the Olympics.

According to a press release from NBC, which has exclusive media rights to the Beiiing Olympics and is operating the site with partner Microsoft Corp., the site received 132.6 million page views during the first two days. On Saturday alone the site registered 3.1 million video streams.

The traffic is significant for Limelight, which is in charge of storing all multimedia content for the site on its network for data servers and then delivering it to online visitors when they access the content. In all, NBCOlympics.com is expected to display 3,600 hours of video footage, including 2,900 hours of live footage, during the games.

Limelight reports second-quarter earnings on Tuesday. Analysts are predicting Limelight to report a loss of 3 cents per share on $28.9 million in shares.

The company's stock has gotten a boost in recent days because of analysts predictions that the firm could be attracting customers away from chief competitor Akamai Technologies Inc. and because of news that a U.S. District Court judge in the District of Arizona threw out a shareholder lawsuit against Limelight.

Limelight's shares closed up 3.8 percent at $4.35 Monday.

Last month Akamai reported $194 million in sales, below analysts' estimates of $196.7 million, which sent its shares down. 

Why do people make so many money mistakes?

Financial ignorance plays a role for many, and so does a general inability to predict the future direction of the economy, stock market and so on.

But emotions also factor into the equation. More researchers are looking at psychological explanations that discourage people from making wise, rational decisions. Several recent studies help shed light on why people behave as they do.

' Poverty and lotteries

Doesn't it seem that a lot of lottery tickets are sold in low-income neighborhoods? Researchers at Carnegie Mellon University in Pittsburgh affirm that poor people spend a larger portion of their incomes on lotteries in the slim hopes of hitting a life-changing windfall, even though the expenditures often make things worse.

“Some poor people see playing the lottery as their best opportunity for improving their financial situations, albeit wrongly so,” said the study's lead author, doctoral student Emily Haisley, in a statement.

She and other researchers recruited study participants at a Greyhound bus terminal. They encouraged some to feel poor by asking them to state their income on a scale that moved in $100,000 increments, meaning most people would be checking off the lowest income category. Another group was made to feel wealthier because of a different income scale that allowed most to rate themselves as well-off.

Respondents then were paid $5 and given a chance to buy up to five lottery tickets. Members of the “poor” group bought 1.27 tickets on average, compared with 0.67 for the others.

Another group of “poor” participants was told everyone has an equal shot at winning the lottery, even if not everyone enjoys the same odds for good jobs, education and housing. Those people bought even more tickets, 1.31 on average.

The researchers criticized lotteries for exploiting the desires of poor people and worsening their financial situations.

“Buying lottery tickets in fact exacerbates the very poverty that purchasers are hoping to escape,” Haisley said.

' Irrational investors

If if seems the stock market's wild fluctuations of late point to a lot of confused investors, it's probably true. A new study in the Journal of Financial Service Professionals makes the case that investors often don't behave rationally.

By examining mutual fund cash flows over a recent 10-year period — transactions that reveal buying and selling decisions by millions of investors — researcher Somnath Basu of California Lutheran University noted widespread irrationalities in investor behavior. These included a desire among many people to avoid losses at almost any cost and a tendency among investors to be strongly influenced by trends and the behavior of others, rather than their own financial situation.

One implication of such irrationality is that investors who remain disciplined often can buy stocks or other assets for cheap when others are fearful, or they can sell at high prices when everyone else is giddy.

The study reinforces the notion investors should understand their emotions and seek help if they can't control them. Basu urges financial planners to “concentrate on how they may help their clients by preventing them from making decisions based on emotions.”

' Dividends good to spend

If your investments earned 10 percent in a year, how likely would you retain the assets or spend them? The answer may depend on whether your return came in the form of dividends or capital gains.

Stefan Nagel of the Stanford Graduate School of Business sifted through thousands of account statements at a discount brokerage and other data. He found investors are more likely to spend dividends while retaining capital gains.

This is consistent with what's known as the theory of mental accounting, which posits people instinctively lump their assets into different categories. It implies investors don't view dividends and gains as interchangeable.

“They don't necessarily expect capital gains every year, but they do come to expect dividends,” Nagel said in a release. Most people seem to follow a general rule of “not touching their capital.”

One implication is dividend-issuing companies should think hard before cutting payments or risk investor wrath.

Another implication is the government could encourage firms through tax policies to pay more or less dividends, when they either want to stimulate consumer spending or promote more public saving.

This article ran in the Aug. 10 issue of the Arizona Republic

Reach Wiles at russ.wiles@arizonarepublic.com or 602-444-8616.

Bankrupt Tucson-based mortgage lender First Magnus Financial paid more than $800,000 in illegal fees to builders and real estate firms, according to reports from the U.S. Department of Housing and Urban Development.

The latest HUD report, dated Aug. 4th, alleges First Magnus gave firms illegal fees to get referral business. The mortgage lender paid the fees to home builders T.J. Bednar and Santa Ana Homes as well as the real estate brokerage firms Long Realty and Realty Executives between 2003 and 2005.

According to HUD, First Magnus violated anti-kickback segments fo the Real Estate Settlements Procedure Act., RESPA.

First Magnus closed its doors last summer. The Arizona Department of Financial Institutions suspended the lender's license last August.

Some of First Magnus' former executives have started a new firm called StoneWater Mortgage. It is also based in Tucson and operates out of First Magnus' former offices.

During the second quarter, there were 845 foreclosures in Pinal County, metro Phoenix's southeastern suburb.

July 22: Child Protective Services is notified that a Tucson father intends to sue the agency for $5 million for its role in the death of his son.

July 27: The Arizona Daily Star writes a story about four-year-old Fabian Silva, who on Jan. 27 slipped through CPS' fingers and into his grave.

July 29: An hour before he was scheduled to pick up his surviving son, the father is informed by CPS that his visit has been cancelled. No longer will he be allowed to see the boy without a caseworker being present.

Despite cries of retaliation, a CPS spokeswoman says this isn't about getting back at Oscar Silva for his lawsuit or the story. No, it's worse.

It's because the father had the temerity to talk with his son about how his little brother died.

“There were guidelines that existed about how there could be discussions with the child and those guidelines were there to prevent further trauma to the child,” explained CPS spokeswoman Liz Barker Alvarez. “When those guidelines were not followed there was a concern of possible further trauma to the child.”

What, more than the trauma of seeing your little brother go to his grave while CPS was supposed to be watching? More than the trauma of losing your brother even though you tried to warn somebody?

“It's business as usual,” says Silva's attorney Jorge Franco, who has a string of successful wrongful death suits against CPS. “They had the smoking gun in front of their face and they just choose not to follow the trail.”

Stop me if you've heard this story before.

Fabian and his 8-year-old brother lived with their mother and her boyfriend, Alejandro Miguel Romero. On Oct. 31, seven weeks after Romero moved in, Fabian was hospitalized with a bleeding brain and bruises that two doctors suspected might have been the result of abuse.

CPS was called and – surprise! -- found no problem. But then, CPS investigators didn't talk to the boys' maternal grandparents, who repeatedly called to report their suspicions that Romero was abusing the boy. And they didn't talk to the boys' aunt, who lived with the family at the time and would later tell police that Romero used drugs, hit Fabian for wetting the bed and allowed his own sons to beat the boy up.

And they apparently didn't talk to Fabian's daycare provider, who would have told them that Romero called the child “pee pee boy.” Or do a background check, which would have turned up Romero's encounters with police for fighting with the father of one girlfriend and threatening to snap the neck of another girlfriend's boss. Or take Silva seriously, when he asked for help.

As for the letter that Silva's 8-year-old son wrote in November – the one that said Romero spanks the boys nearly every day and that he's scared of the man – CPS wrote it off as coerced. The caseworker would later tell police that she asked the boy whether it was true and he said no, that his father told him to write it.

Three months later, Fabian was dead.

Romero has been charged with manslaughter and child abuse. He and the boys' mother have said Fabian died from a fall. Since then CPS has taken custody of her surviving son. Silva, meanwhile, was allowed to see his son twice a week and every other weekend. Until now.

Now that he's suing CPS. Now that the boy saw the front-page Sunday story and asked his dad about it – and his dad answered.

CPS' Alvarez won't talk about why CPS now monitors Silva's visits, citing privacy. She also couldn't discuss Fabian. For that, we'll have to wait until a judge releases the records, as CPS has asked, or until Sept. 26, when they become open by law.

I, for one, would be fascinated to know how it is that CPS – the agency that walked away from Fabian – feels qualified to give parenting orders to Silva -- the father who turned to CPS when the boy needed help.

And tragically didn't get it.

(Column published Aug. 13, The Arizona Republic)

The power set lost a big one this morning. Secretary of State Jan Brewer tossed the TIME initiative off the November ballot, saying it didn't get the required number of signatures.

An astonishing 42 percent of the signatures the group turned in were invalid.  That's a shocker, given the movers and shakers behind this $42 billion transportation plan  -- a group headlined by none other than Gov. Janet Napolitano. How they could bungle this thing so badly, given their longtime experience in business and politics, is almost beyond belief.

Still, I'm not so sorry to see this thing die. (Assuming it does. I'm sure there's court fight ahead.) For one thing, it's too big and the money appears to go for far more than state highways and light rail.

For another, it's funded entirely through sales taxes rather than the more traditional user fees (read: a gas tax). And it lets homebuilders off the hook entirely. Napolitano and the TIME folks cut a deal this spring with Homebuilders Association of Central Arizona, agreeing not to include an impact fee on new homes which contribute to sprawl and thus the need for all these new roads.

Then there was their outrage last month over a description of the plan in the voter guide as a 17.8 percent increase in the state sales tax -- never mind that it is a 17.8 percent increase in the state sales tax.  A judge went along with them, saying to include such language would be confusing to voters. Better, he said,  to just think of it as a penny on the dollar.

Or not, as it turns out.

The sad thing is that they were right to be looking for a way to create a statewide transportation plan. Clearly, the cash isn't keeping up with the demand for new roads and alternate forms of getting from here to there. 

What's needed is a realistic plan that's carefully thought out, exhaustively vetted to get rid of the pork  and funded from a variety of sources in order to distribute the pain fairly.  And then make the case honestly to voters.

U.S. political leaders have uniformly condemned Russian military actions in Georgia.

President Bush described them as “dramatic and brutal.”

John McCain called them “violent aggression.”

Barack Obama said that Russia had “invaded another country.”

To which, the most brutally relevant question is: So what?

Russia clearly has a strategic objective of Finlandizing the Caucasus.

During the Cold War, the West was unwilling to commit to the defense of Finland. So Finland, to achieve a degree of domestic independence, had to make its foreign policy subservient to Soviet interests.

Georgia and Ukraine want to avoid this fate. But the harsh reality is that the West is unwilling to commit to their defense as well.

Bush has pushed for Georgia and Ukraine to be included in NATO, a call echoed by both McCain and Obama.

This merely reflects continued confused thinking about NATO.

NATO began as a military alliance to deter Soviet aggression against Western Europe. The Soviet Union no longer exists and Germans do not fear Russian tanks rumbling across their border.

Today, NATO is a military alliance with a mission to be determined later on an ad hoc basis.

However, that mission will not include meaningful military assistance to Georgia or Ukraine to resist Russian intimidation.

Take the positions of Germany and Italy, both headed by pro-American conservative leaders.

German Chancellor Angela Merkel has led the opposition to Georgian membership in NATO. Italy's foreign minister, in the context of the current conflict, said: “It doesn't behoove us to pit ourselves against Russia. Russia is a strategic partner.”

Germany gets 39 percent of its natural gas from Russia. Italy gets 31 percent.

Vladimir Putin has succeeded with his plan to turn Russian oil and natural gas into an instrument of state power, as chronicled by Marshall Goldman in his new book Petrostate.

Bush, McCain and Obama all said that Russia had damaged its international standing and relations with the rest of the world. But that's just not true. Regardless of the outcome in Georgia, the rest of the world will continue doing business with Russia much as it has in the past. The same is probably true of the United States as well.

The people of Georgia and Ukraine desire to be associated with other democratic countries with market economies and have some brave leaders working to make that their future.

It would be indescribably sad if this desire is thwarted by Russian military and economic intimidation.

The harsh reality, however, is that Western Europe has more to lose than gain by confronting Russia over the Caucasus. And what happens in the Caucasus only marginally affects U.S. security or prospects. It is disturbing that McCain claims to see it otherwise.

The Georgian conflict exposes how misplaced is the hope that there are international norms of behavior that can be enforced.

The case of the United States against Russia is that it violated the sovereignty of Georgia and is undermining a democratically elected government. According to Bush, this just isn't done in the 21st Century.

Yet, in the 21st Century, the United States has supported independence for Kosovo, previously recognized as part of the sovereign state of Serbia. And it worked actively to undermine the Hamas government democratically elected by the Palestinian people.

There are, of course, gross differences between Kosovo and South Ossetia, contrary to Russian assertions of an analogy. Yet it demonstrates the difficulty in an appeal to international norms of behavior that lack universal agreement, much less an enforcement mechanism.

Is there a problem with tough talk not backed up by tough action? There is. It can lead to a miscalculation by those whose fate is at risk.

That might have happened in Georgia. Georgian President Mikheil Saakashvilli might have provoked a confrontation in hopes that the West would rally and save his country from the fate of Russian emasculation.

In reality, the West is not going to do anything substantive enough to change the balance of power in the Caucasus.

It should stop pretending otherwise.

(column for 8.13.08)

Barack Obama’s foreign policy is shaping up as less risky than John McCain’s, but there remain concerns about whether it has sufficient fiber.

For example, consider Obama’s recent statement on Georgia. Among other complaints about Russia’s military action, Obama intoned that it was “wholly inconsistent with the Olympic ideal.”

Whoever wrote that line needs to be assigned other duties for the remainder of the campaign.

This weekend I was up north and heard a radio ad for state Sen. Tom O'Halleran. It was all about all the taxes O'Halleran had cut.

Now, I suspect the information in the ad was accurate. Nevertheless, it left a false impression. O'Halleran is not someone who gives primacy to tax-cutting.

In fact, O'Halleran's record on taxes is spotty at best. This past session, he voted against making the suspension of the state's portion of the property tax permanent.

On income tax reductions a couple of years ago, he did a reverse John Kerry: he voted against them before he voted for them.

In reality, O'Halleran is someone who frets about state government being under-resourced and votes for tax cuts with great reluctance.

O'Halleran faces a fierce primary challenge from Steve Pierce, who appears to be a more conventional fiscal conservative. The nod in Republican primaries often goes to the more conservative candidate, so O'Halleran flying false colors is politically understandable.

But why not give voters a fair and honest choice? Why not run on the basis of O'Halleran's true concern about state government being under-resourced?

Surely winning on the basis of who you really are and what you really believe is better than winning based upon a false impression. Moreover, is it really worse to lose on the basis of who you really are than to win on the basis of a false impression?

Agree or disagree with them, I've always had enormous respect for candidates who were willing to risk an election for what they truly believe.