Nouriel Roubini's hue and cry to nationalize the banks last winter proved to be overwrought. With the TARP paybacks by Citi, Wells and BA, that crisis loomed but has now passed. The big banks did not fail. But they have failed to put their balance sheets to work in this economy. Banks borrow money at the discount window for approximately nothing, then charge credit card holders up to 31.99%. They can also buy Treasury Bills for 3.5% and pocket the difference. Does that sound like arbitrage or "dire straits"?
Tuesday, December 15, 2009
Tuesday, December 8, 2009
One of my fondest memories of Christmas is the food my mother prepared in the days leading up to Christmas.
Divinity Southern favorite candy with a texture somewhere between a cookie and fudge. Fudge (also with a Texas pecan on each piece). Chex mix. Long before you could find this prepackaged in the grocery store, my mother would bake Rice, Wheat and Corn Chex with pretzels and peanuts. She would fill up giant jars with snap-lids. We fondly referred to it as "grazings". One food item that was received as a gift, usually from one of my aunt and uncles, was FruitCake from the Collins Street Bakery in Corsicana, Texas. Often the butt of TV jokes, if you haven't tasted this coffee cake, then you should hush up.
Today my wife has a her own set of special reciples. Gingerbread houses & cookies for the grandkids, and tamales for us.
Sunday, November 22, 2009
49M Americans go hungry while 60M Americans are obese and another 60M overweight. The satiated thin man depicted by Cary Grant, Gary Cooper and Clint Eastwood in the movies, has become a real-world rarity. But what is even more paradoxical is that many of the obese are also part of the hungry. One reason is the low cost of "empty calories": chips and fries, $1 meals at fast food outlets, $1 2-liter sodas at the mini-mart. The poor migrate to foods that are cheap and filling and that increasingly means high calories but poor nutritional value. Convenience is a huge factor. It is easier to spend $20 on pizza dinner than $10 in groceries followed by preparation time in the kitchen, especially with a car full of hungry kids.
Fat and Hungry has made companies like Archer Daniels Midland, McDonalds and Coca-Cola, "Fat and Happy".
Most weight gain is the simple result of calories in > calories out. Pro cyclists weight their food and ride with expensive power meters, but most of us have little idea what the value of either side of that equation is on any given day. People will burn 200 calories riding a bike, then reward themselves with a 1000 calorie meal believing they are ahead.
American's spend $10B on prescription antacid drugs and as much or more on over the counter alternatives. I would bet this drug market has grown faster than the population. I wonder if there is a correlation to weight gain in America?
Fifty years ago when obesity was uncommon, genetic differences were discovered to play a key role in how people absorb and metabolize sugars and fatty acids. Two people could eat the same diet, yet one only would gain more weight. Are genetics behind today's staggering obesity numbers? Gene mutations don't spread through a human population in one or two generations. In two human generations, bacteria can evolve millions of generations. There is recent scientific evidence that human gut bacteria (friendly flora) may have adapted the way sugars and fatty acids are moved from the digestive tract into the human bloodstream. Perhaps this will lead to new fat-forgiving products.
Wednesday, November 18, 2009
First, unlike many on the right, I don't believe Gotham is in need of the Caped Crusader or Batman or Spiderman to maintain security during the trials of the 9/11 conspirators. But what is the upside for New York, America or Obama?
The downside is obvious - wasted tax dollars and more bad press for Obama.
In the Middle East, a trial like this would take about 5 minutes and cost 500 rials/riyals/dinars. In New York city, it will months and cost 100's of millions of dollars - to reach an obvious guilty conclusion. Then the fight over where to imprison them pending execution will begin.
The majority of Americans believe Guantanamo prison should be closed. But no one wants the prisoners transferred to their state - even though the federal government will shower billions of dollars on the lucky prison community to ensure that these super-villans don't escape. Duh Con Air was only a movie.
Saturday, November 14, 2009
I was on an elementary school playground at noon the day John Fitzgerald Kennedy, "JFK" was shot. When we returned to class there was a school-wide announcement over the PA. The President of the United States was dead and school was closed for the rest of the day. Kids walked home or parents were called. At home Walter Cronkite was on TV. The mood was somber.
I grew up in the Permian Basin, so named for the geological era when a great sea existed in West Texas; a sea whose decaying animal and vegetable matter would over millions of years, create one of the largest oil-fields in the world. During the latter half of the 20th century, America ran on West Texas sweet crude from the Permian Basin. George H.W. Bush moved there in 1951 to start his oil company and later his political career. George Jr. went to elementary school in Midland, though he was in an East coast preparatory school when JFK was shot.
The political climate in West Texas was, and still is strongly right wing. There was no aura of Camelot surrounding the Kennedy's there. But the climate was also fraught with cold war tension. In California the school-kids practice earthquake drills. When I was a kid, we practiced Atomic Bomb drills - how quickly can you crawl under the desk and bury your head in your lap. There were houses in town that had bomb shelters. White Sands Missile Range was about 200 miles to the West. The first atomic bomb in the world exploded there. Sonic booms from the Air Force jets stationed there were not uncommon. In Nevada, the Hydrogen Bomb was tested underground in 1958. One winter for reasons I don't remember, we were warned not to eat or play in the "radioactive snow". Snow was a rarity for West Texas. When it happened schools closed - It was a day for snow-men, snow-ball fights and snow-ice-creme.
A year earlier Kennedy had made Khrushchev blink in the Cuban Missile Crisis. No one really knew what was going on, but we spent a lot of time crawling under our desks in October of 1962. When you take the cold war into account, the sudden loss of the Commander in Chief was a National tragedy that extended to the Permian basin as well. What would happen to America? Were we were vulnerable to Soviet aggression? No one under the age of 70 could even remember the last Presidential assassination.
Another Texan, Lyndon Baines Johnson "LBJ", took the Presidential oath in an airplane that Friday afternoon in November. Over time worries about World War III were replaced with realities of Vietnam. A best friend's older brother came home in a bag. There were 100's more on TV every night.
On Monday November 25 1963, the nation watched the funeral procession for the 35th President of the United States. The image of John John saluting his father's coffin is unforgettable.
Sunday, November 1, 2009
Saturday, October 31, 2009
The whole country if not the world is debating the course of action Obama should take in the war in Afghanistan - whether to increase troop levels (and by how many) or simply get out.
I suggest a 3rd way: Surge the armed forces, pound the Taliban back into the Afghan dirt, then get the hell out quickly. The war on terror is not about Afghanistan. The war on al Qaeda should be fought with special ops, covert ops, and hard-handed influence on foreign governments. To paraphrase Secretary of State Hillary Clinton, "Somebody in the Pakistan government knows where al Qaeda leadership is hiding". In addition to Pakistan, al Qaeda is known to be in Yemen, Europe, Africa, Southeast Asia and even Denver Colorado.
It is immoral to send American's best to die and be maimed in a country controlled by drug-corrupted tribal groups. There are morally corrupt regions on every continent but Antarctica. America does not have the resources or the obligation to fix all of them.
The Afghan run-off election will not change anything, and waiting for it to announce a decision is politically dumb. Obama should act now to satisfy the GOP, satisfy the military leadership and show some strength in a region that pounces on weakness. But just like Iraq, we have been 'over there' too long.
Wednesday, October 28, 2009
1. Chubby Checker - early 60s, Odessa, Texas.
2. Dean Martin - never saw him sing, but I saw him strolling through the OCC in the mid 60's, during their annual golf tournament. Dino died on Christmas day 1995.
3. Jim Morrison - July 9, 1968. The Doors at Memorial Auditorium, Dallas Tx, in 1968.
4. Jimi Hendrix, Aug 3 1968, Moody Coliseum (basketball arena) on the SMU campus, Dallas Tx. One year before Woodstock. He set his guitar on fire, played it behind his back. He was the best.
5. Ike Turner - New Year's Eve 1970, Dallas Convention Center, with Tiny of course.
6. Richard Wright - founding member of Pink Floyd. Saw them live at McFarlin Auditorium (a 1600 seat venue), Dallas Texas. Circa 1970. He died last year of cancer.
7. Stan Getz - saw him at the Mountain Winery concert in Saratoga, CA in the 80s. Died of liver cancer in 1991.
8. Ricky Nelson - saw him at a Willie Nelson picnic at the Texas Motor Speedway, College Station, TX in the 70s. He died in a plane crash on New Year's Eve 1985.
9. David Carradine - yep Kung Fu, Kill Bill. He and then-wife Barbara Seagull Hershey showed up at the same Willie Nelson picnic with a band. They sucked. He choked himself chocking his chicken in 2009.
10. Walter Hyatt - founded Uncle Walt's Band with David Ball and Champ Hood. The best troubadour trio ever to play in Texas or anywhere. Thank goodness I kept their albums. Walt died on Value Jet Flight 592 in 1996.
Performers I wish I had seen live but never will:
Frank Sinatra, Bill Evans, Miles Davis, Stevie Ray Vaughn
It took me 2 weeks to realize I typed Bill Ellis when I meant Bill Evans - that's why it's pseudo-suduko!
Tuesday, October 27, 2009
1. Unify distribution
I live in a Townhome complex of fifty units. Every morning the New York Times, Wall Street Journal, Financial Times, San Jose Mercury News and San Francisco Chronicle delivery vehicles drive through the complex. Many of them are only delivering one paper to one unit. What a waste (and a racket since they all seem to drive cars with the same worn out muffler). If the delivery system supported a simple way for one delivery vehicle to pick up and distribute papers from different organizations, they could save a lot.
2. Unify printing
All of these papers have local print facilities, otherwise the NY Times and the Financial Times would come in the mail, like they used to.
3. Ala Carte delivery
Allow me to mix and match the papers I receive. I often buy the Monday NY Times for Media, the Monday Mercury for Silicon Valley business, the Tuesday NY Times for Science. The Wednesday WSJ for Technology. The Saturday Financial Times for Arts & Living. The Sunday Chronicle for the pink section. Over the years, I have had home delivery subscriptions to each of these papers. Today that would cost a few hundred dollars per month, which is absurd.
4. Integrate Content
Last friday the New York Times launched a San Francisco localized version. The WSJ is planning something similar. Integrated content can't be far behind. You can read NY Times science articles in the following Sunday Mercury News - so why doesn't the NYTimes sell that content to the Merc (and other papers) for immediate delivery. Better read than dead I say.
5. It can't be saved. Like telephone landlines, the consumer base is shrinking to a level that simply can't be served. Have you noticed how many self-service news-stands have been abandoned by their carrier? The machines don't have the mechanical quality to correctly count ten quarters. And who walks around a roll of quarters in their pocket? Soon we will all read newspapers online or on e-readers. I am waiting to see the Plastic Logic Que, with a letter sized form factor.
Friday, October 23, 2009
In the not too distant future, the web will consist of a very small number of social media platforms (think iPhone, Facebook, Google) and a very large number of app-creating entities (think millions). Who do you think will make most of the money?
Friday, September 11, 2009
The blogosphere is full of questions about this. Some define it as saving passwords on the assumption that your demise will be too sudden or painful to allow an opportunity to pass them on. Others say it is everything you have ever typed, txt'd or spoken on a phone.
Passwords could be written down and secured in a safe place. Maybe you have too many passwords? Maybe you change them frequently (I'm not sure it matters much as long as they are strong. If quantum computing moves into the domain of hackers, your password will never be strong enough, or changed often enough to thwart them.
I have a small number of strong, but easy to remember passwords I use for billing accounts and critical email. I also have weak, easy to remember passwords I use for "fluff" accounts. (You know the free ones that only want your eyeballs (and proof that you have eyeballs so they can justify their CPM rates to advertisers.)
There is a growing list of password management tools. OpenID, Roboform, and KeePass to name a few. The concept is simple, a very strong generated-password using facts that only you would know for verification and recovery. If you bank or trade stocks online, you have probably encountered these without realizing it. Maybe your spouse or trustees should know what model your first car was, or the name of your favorite pet, teacher, etc.
I anticipate that this annoying password game will be obsoleted someday. Microsoft/Apple/Google/etc. will use AI, personal knowledge (that they can get from Facebook) and your DNA stored in the RFID in your septum.
A more serious question to consider is "what" you leave behind - digital legacy or digital detritus? Or your private memories, stories and personal messages to those you care about. Randy Pausch's, oft-quoted remark said it best. ... I could put myself in a bottle that would one day wash up on the beach for my children...
Thursday, August 27, 2009
Two countries, a few states, and numerous user groups have filed lawsuits against Facebook over privacy issues. In a nutshell everything you upload to Facebook belongs to Facebook. Everything you do on Facebook belongs to Facebook. And what does Facebook do to make money? They sell information and ads. Information you gladly provide in your profile, and through the "Facebook toys" scattered through out their system for your enjoyment. Information that makes the ads they sell more valuable to the advertisers and hence more lucrative for Facebook.
Facebook has become the de facto AOL of the 21st century. "You've got wall" has replaced the "you've got mail" mantra from the 90's. Of course it's easier and faster. Pictures and video are easy to upload and share with friends. And those virtual toys, what better way to spend a day then collecting and distributing two-dimensional kittens, fish, stars, etc.
And let's not forget those humorous quizzes and multi-player games. According to new research by the ACLU every quiz you take enriches Facebook's database on "you". say what???
To quote Rupert Murdock (CEO News Corp which owns MySpace), "Facebook is just a directory".
It is a great place to keep track of your friends. But is it the right place to store your personal legacy? When you die, your data reverts to the whims of Facebook. You won't be clicking any ads, so your space on their disks becomes dead space so to speak.
PermaSite is a place where your memories belong to you. You determine who views them, and who manages them after you are gone.
Thursday, July 23, 2009
If you were a cartoon character, which cartoon character would you be?
If you were a Dunkin donut, which Dunkin donut would you be?
If you were one of the Seven Seas, which Sea would you be?
If you were an disContinued Car, which disContinued Car would you be?
If you were a Failed Financial Firm which Failed Financial Firm would you be?
If all the brain cycles spun on these fantasies could be synchronized, what real problems could be solved?
This isn't an entirely whimsical question. Luis von Ahn, a professor at Carnegie Mellon invented the "captcha" used to separate humans from "bots" on web sites. He realized that the uniquely human ability to "fill in the gaps" could be used to solve real problems, like correcting OCR errors.
On the other hand, a friend recently suggested that Facebook quizzes may serve another purpose - collecting valuable profile information to sell to 3rd parties. After all, that which is rendered to Facebook, belongs to Facebook.
Saturday, July 4, 2009
July 4, 2009. N. Korea Defies US and Fires Barrage of Missles
In 1986, the world had a problem with terrorists - Abu Nidal backed by Libya and Col Mohamar Kadafy.
When diplomatic approaches failed to quell an escalating series of terrorist attacks, Ronald Reagan took swift and bold action - a bombing raid that took out military targets, terrorist enclaves and killed one of Kadafy's children in the backyard of his palace. Kadafy became a changed man. He postponed indefinitely his promotion to "General", and albeit reluctantly, assisted the US and the UN in the fight against terrorism.
Now it is time for Obama to step up and respond to "Fearless Leader". Launch a missle (like a ground-launched CRUISE that can fly through an open window) into the palace and take out Kim Jong-il's cognac collection and any sons who aren't trying to sneak in to the Michael Jackson memorial service in Los Angeles. Then call him up and tell him his left shoe is untied.
The GOP would take note - even Cheney's AEI would have to applaud while daring Obama to take the fight to Tehran. Russia (who dances a jig when anyone defies the US and the UN) would take note. And China would "owe us one" since they want the little guy to go away but they don't want to look like they're helping us.
Wednesday, June 17, 2009
California has 10M cars on the road. On an given day about a third of them use a cellphone despite laws prohibiting the use of non hands-free cellphones while driving. Why? Duh, it's only a $20 fine. Littering is a $1000 fine in California and many other states. The next time you are on the road, count the number of people driving illegally with a phone glued to their face vs. the number throwing trash out the window. The penalty for littering is 50 times the penalty for a behavior that kills and injures people every day. A $1000 fine would initially bring in hundreds of millions of dollars to state coffers. That money could replace state funding taken away from schools, fire departments and police. But pulling people over is dangerous and time-consuming. Maria Shriver's cellphone vehicle violations are well known because the paparazzi have her on tape. One cop with a camera could generate $1M in fines in a single weekend.
Thomas Friedman, columnist for the NY Times, suggested that gas should be $4.00/gallon forevermore. The price spike in the late 1970s forced Europe and Japan to adapt with efficient mass transit. We didn't, and we were even more unprepared for $140/barrel oil in 2008. Elon Musk, CEO of Tesla, has called for $10/gallon gas, based on behavioral change at the global level. "No one explicitly pays for the destruction of our atmosphere and the warming of the world's oceans". American burns ~375M gallons of gas every day. Changing that will take time and technology. A carbon tax could fund the technology. Obama's Cap and Trade proposal has become a watered down political mess. California should take the lead will real reform by directly taxing carbon. (And gain relief from Cap and Trade because we get most of our electricity from non-polluting sources.)
California democrats proposed higher cigarette taxes as one way to fix the budget deficit. Cigarette consumption is a behavior that implicitly costs everyone though the burden of health care. Cigarettes kill more American every week than the war in Iraq has - to date. Insurance companies pass the cost of $100,000/year cancer treatment on to their other clients. We subsidize cigarette smoking through our insurance premiums. Heart disease and related complications (diabetes) kills more Americans every day than the war in Iraq. The costs are enormous, and we all pay, one way or another. It is time to tax nutritionally devoid calories - high-sugar drinks and high-fat "value meals".
updated Nov 1, 2009
Monday, June 15, 2009
To be a person is to have a story to tell. Isak Dinesen
When I was younger, I could remember anything,
whether it was true or not. Mark Twain
Some people think we're made of flesh and blood and bone. Scientists think we're made of atoms. I think we're made of stories. When we die, stories are what people remember, the stories of our lives and the stories we told. Ruth Stotter
Out of the blue and into the black.
Once you're gone, you never come back.
Neil Young, from the album Rust Never Sleeps
Create, Preserve and Share Your Story at Online Legacy
Thursday, May 14, 2009
On Sunday's Face the Nation, Vietnam war draft-dodger Dick disses Colin Powell, a highly decorated war hero, former Chairman of the Joint Chiefs, and architect of the only successful invasion of Iraq. And picks a rich, recovering drug addict, talking-head as the voice of the Republican party. This might be a good time for George W. to preserve a bit of his own legacy and admit that everything that went wrong was Uncle Cheney's idea.
Read more on how Cheney is putting the nails in the GOP coffin in today's Washington Post.
Did eliminating EIT make America weaker? Ineffective reactive approaches do nothing for the root cause - soaring unemployment in Middle East young adults - 25% overall and 50% in Gaza - provides an ideal opportunity for radicals offering change. And besides, Jack Bauer will continue to do whatever he deems justified to keep us safe.
Tuesday, May 5, 2009
Adsense (if you don't know) is a Google product that distribute ads paid for by Adwords users across millions of websites. Google charges variable rates to the Adwords user and shares some of the revenue with Adsense distributors, based on the visitor traffic to the site. The operative TLA (three letter acronym) is Cost per thousand unique page views. More page views, more money. Typically these funds accrue in your Google account until a threshold that warrants "cutting a check", i.e. $100. After 1.5 years, my account has reached $7.07. At that rate I'll get a check in 2029. Or never, since I deleted the Adsense garbagio from the sidebar.
Tuesday, April 28, 2009
IN 1976, President Gerald Ford ordered a nationwide vaccination program to prevent a swine flu epidemic.
Ford was acting on the advice of medical experts, who believed they were dealing with a virus potentially as deadly as the one that caused the 1918 Spanish influenza pandemic. The virus surfaced in February at Fort Dix, New Jersey, where 19-year-old Pvt. David Lewis told his drill instructor that he felt tired and weak, although not sick enough to skip a training hike. Lewis was dead within 24 hours.
The autopsy revealed that Lewis had been killed by "swine flu," an influenza virus originating in pigs. By then several other soldiers had been hospitalized with symptoms. Government doctors became alarmed when they discovered that at least 500 soldiers on the base were infected without becoming ill.
My wife got the vaccination and immediately got sick. I was too busy building a GaAs development lab to get sick "on purpose". Turns out I was right. Within weeks reports started coming in of people developing Guillain-Barré syndrome, a paralyzing nerve disease, right after taking the shot. Within two months, 500 people were affected, and more than 30 died of the nerve disease, but only Private Lewis died from the Swine Flu.
Sunday, April 26, 2009
Who hasn't heard that? Second-guessing is a skill honed in every office place in the world. In politics it is second nature to second guess. Because it so easy to find potential flaws, it is almost human nature to do so. In today's Internet-connected world we are all second guessers. What used to be reserved for the Editorial and Opinion page is now "news" on TV, radio and every blog on the net.
This is good, you say. This makes us think. Well placed criticism does make us think. Feedback is part of any successful planning process. But most of what is labeled critique is actually "throwing stones to draw attention to the stone thrower". If some talking head on CNBC says Timmothy Geittner's plan will fail, he isn't trying to help the Treasury Secretary solve the world's problems. He is trying to sell his own name, his blog, his book, i.e. his "brand". In a few months, when the dust settles on the Financial crisis will errant opinions be called out and graded? Nah. We live in a short-term world. Yesterday's news is buried in a heap of Tweets no one can keep up with. Good stone throwers know that if you keep throwing stones at new targets, old "misses" are soon forgotten.
There is a greater implication. The loss of long-term thinking in a world that only measures short-term results. Our world is increasingly complex but our news is remarkably simplistic - a child murderer in California, toxic assets, a few cases of swine flu. Did you know that 1000 children die every day from contaminated water? Or that more firefighters die from Heart Disease than fire and smoke? The result is a total lack of perspective and context, which creates the ideal environment for throwing stones.
Tell me what your plans are and I'll tell you how I can help - maybe.
Friday, April 24, 2009
Facebook changes company name to WWW.
Facebook signed up the last connected human today, reaching the 2B user mark. CEO, Mark Z was quoted as saying "We have the whole wide world right where we want them".
Facebook proves to be Fad
Mass user exodus attributed to Woody Allen affect - "I wouldn't want to be a member of a club that would have me".
Tuesday, April 21, 2009
From All Things Digital, "University of Wisconsin-Madison biomedical engineering doctoral student Adam Wilson has successfully tested a “brain wave monitor” to the Twitter publishing interface, allowing him to compose a message merely by thinking and publish it to the arguably too-popular microblogging service."
Do you see where this is going? No I don't mean the end of text messaging with fingers.
Go a bit further and imagine all of our thoughts collected, stored and searched by (The Google). Cool, uh?
Friday, April 3, 2009
Twitter is a lottery with a key difference. The winning ticket was drawn "before" the tickets went on sale. Biz Stone, founder of Twitter, has the winning ticket, but we still feel compelled to buy tickets. We don't want to be "left out", "un-cool" or out of sync with the Obama generation. Everyone talks about Twitter although the old line about "how are they gonna make money" is starting to wane. We all know the answer. After a billion tickets (or Tweets) the winning number will be drawn (sort of) and the winning ticket holder (Biz Stone) will come forward to collect his One Billion Dollars. Yep, that's what this is all about.
Text messaging across the celluar-internet boundary at 140 characters (vs. 160 for SMS), and a clever name. The guys at YouTube got $1.6B for little more than that. Chad and Steve didn't invent "user generated video", they just had a clever name, and a venture backer who happened to be on the board of directors at Google.Biz Stone is a former Google employee. He made Blogger (the application hosting this blog) a success for Google.
And if you are still wondering why anyone would care if you are eating a bagel or picking your nose, you're right - they don't. Twitter will persist as yet another electronic message conduit - a mechanism to influence while informing you, like Google, Yahoo, CNN, etc., and those who profit from providing the conduit like Verizon and TMobile.
"Psst, there's a bagel crumb stuck to your cheek".
Follow me on Twitter
Monday, March 16, 2009
The Great Depression officially ended with World War II, which resulted in the deaths of 70 million people, the Holocaust, and the Atomic bomb. The current global economic crisis will put more people (in a more crowded world) out of work and destroy more wealth than the events of the 1930s. Revolutions often begin as food riots. Signs of unrest are in the news everyday - small and often politically energized - but anti-social none-the-less. How does the current crisis end? At the April G20 Summit, UN representatives will present a "Green New Deal" agenda. The world has an opportunity to focus stimulus spending on infrastructure and technology for renewable and cleaner energy. Over $2 trillion dollars in global stimulus spending can be classified as either "Green or Clean", and perhaps more stimulus can be focused on this problem.
There are still a few people who think Global Warming is either myth or Mother Nature, and therefore does not warrant mankind's intervention. The International Conference on Climate Change, ICCC held in New York last week, attracted a few hundred attendees. Scientists who are either funded by big oil, or blinded by their data. Apparently big oil has switched agendas - at least with their advertising dollars - to a "responsible energy" mandate. The real question is not whether global warming is man-made, but rather can man-made technology be used to ameliorate what is clearly happening to our world climate-wise. If the pursuit of the answer puts people back to work, and puts the world on a path to less finite-and-dirty-oil dependency, the world will be better off. And it beats the hell out of WWIII.
BTW, useful technology also emerged from WWII: nuclear power generation, radar (which directly led to communications protocols that enable mobile telephony, commercial jet aviation, and rockets (which enable global satellite communications. The technology side effects of the Green New Deal may not be realized for decades.
Thursday, March 12, 2009
In the news today, Google will use your web surfing and YouTube video selections to create a profile that will allow advertisers to target you for search-based ads. Naysayers, Luddites and worry-warts will cry 'Big Brother' but hey, Big Brother is coming whether you cry or not. And we will welcome him with open arms because stuff we do gets easier and more relevant to our needs. Behavioral targeting is a good thing. And it will move into other aspects of our media consumption. Calero Media Systems develops IP for making advertisements you view on TV, relevant to the media you watch on TV. In other words your personal interests affect what products are pushed on you. If I watch "24" on Fox, or the "The Unit" on CBS, I am probably not a customer for "Depend". And therefore, I neither benefit from nor want to see the commercial. (I also don't want to see commercials for "Flomax", even though I am a 55+ male with a prostate inflating like a circus balloon, I want to get medical information from my doctor, not the Ad Agency that just ran the "Depend" commercial).
On the other hand, if I search for "Depend" (which I had to do to create the link above) then Google now thinks that I "might" be interested in male incontinence. Just because Big Brother is watching, doesn't mean he is paying attention.
Watching what you watch is how you get to watch for free.
Tuesday, March 3, 2009
The CEO of AIG and Ben Bernanke blamed AIG's problems on the "FP division in London" - the group responsible for placing bad bets with credit default swaps. Bets that US taxpayers have made good on to the tune of $160B and counting. Warren Zevon was prescient.
He's the hairy, hairy gent, who ran amok in Kent.
Lately he's been overheard in Mayfair.
You better stay away from him, he'll rip your lungs out Jim.
Huh, I'd like to meet his tailor.
Aaahoo, werewolves of London
Extending the metaphor, is this the modern day Dr. Frankenstein?
Mark C. Brickell is the CEO and a director of Blackbird Holdings, a global trading system for privately negotiated derivatives. Widely regarded as a leader in the derivatives industry, Mr. Brickell joined Blackbird after twenty-five years at J.P. Morgan, where he most recently served as a managing director. During his time at J.P. Morgan, Mr. Brickell helped to build one of the world’s foremost derivatives businesses and supported the growth and advancement of the global derivatives industry while helping to shape a more favorable public policy environment. From 1988 to 1992, Mr. Brickell also served as chairman of the International Swaps and Derivatives Association; he was vice chairman for two years and on the board for more than a decade. He was part of the team that authored the influential 1993 Group of Thirty study, Derivatives: Practices and Principles, and has served on the board of directors of First Command since 2006.
Sunday, March 1, 2009
A going concern becomes insolvent when financial obligations exceed assets. Chapter 11, Title 11 is the preferred alternative to simply folding the tent. When the "concern" is the 8th largest economy in the world, folding the tent is not an option. The California budget resolution recently passed in Sacramento and now up for public approval will not solve California's endemic, systemic problems. We are destined to revisit this crisis again and again.
Nancy Pelosi, chief "pirate" on the high seas of Congress has brought $30B of (stimulus) treasure to her state. This will certainly help, but it won't solve our problems. The Federal government is invoking a virtual Chapter 11 on banks, Big 3 auto makers, and AIG - with bailout money. He who brings the money, makes the new rules. So why not do the same with the State of California. Force us to do what we cannot do: restructure the constitution and eliminate the referendum propositions that confound "government by representation". Governor Arnold Schwarzenegger promised to clean up the "special interest" groups that defy progress but he has failed. Meg Whitman, running for Governor in 2010, has taken up the torch to make California business friendly. But that will never happen as special interests are "ordained and empowered" by numerous Amendments, Propositions, and a perpetual gridlocked assembly.
Wednesday, February 25, 2009
Nassim Nicholas Taleb, author of The Black Swan describes How bank bonuses let us all down in today's Financial Times. Sheer poetry.
The national paradox on Nationalization. The Obama administration doesn't want to destroy the private banking sector because that would be "bad" somehow. And to appease Congress, neither do they want to reward the investors in those banks with government bailout money. So, the market sells off the bank stocks punishing everyone who entrusted their IRAs to the mutual funds who favored the financial sector on past performance. Nationalization becomes a fait accompli. When Obama says that he wants to force banks to loan money, while eliminating the reward system, he might as well be talking to Martians. The Federal Reserve is the only bank in America where the employees get paid simply to do their jobs. And if they do them well, the reward is "not" getting grilled by a Congressional committee.
Thursday, February 19, 2009
As in save the bars enclosing California's exploding prison population and condemn our children to the worst educational opportunity in the US. Yep, after the $12B cut in educational spending proposed to fix the California budget crisis, California will likely rank 50th out of 50 states in per child educational spending. (Does anyone have the data for Puerto Rico or Guam?)
A Federal judicial panel recently ruled that California's prison system (nearing 2X capacity) violates the Eight amendment - prohibiting cruel and inhuman punishment - and recommends a 33% reduction of non-violent offenders. Of course "we" plan to appeal this federal order to reduce our budget, and the suffering and recidivism that extreme overcrowding produces.
What a quandary - whether it is better to lock up a "3rd striker" for twenty to life for shoplifting, or layoff our childrens' teachers.
And don't forget the incarcerated geriatrics receiving millions of dollars of drug and medical treatments - while shackled to their wheelchairs. A recent study predicted that elderly or infirm prisoners will consume 33% of the $6B prison budget in the next few years. I sure sleep a lot safer at night knowing they're not on the streets.
Friday, February 13, 2009
Is the K-12 model outdated?
Just as the QWERTY keyboard was designed to prevent hyper-nimble fingers from overwhelming the mechanical key strike mechanism, is the thirteen year K-12 program an artificial restriction on learning?
A case could be made that access to learning resources - materials, books, teachers and classrooms - required a lengthy multi-year program. But in today's connected world, any child with an Internet connection has access to every book ever written. Amazon's vision for Kindle "every book ever printed in any language all available in 60 seconds,"stated goal with the Kindle, is to offer "every book in any language in 60 seconds". Google's stated vision is to catalog all human informaiton. Language translation software will soon allow any document or video, in any language to be understood by any person in his native language.
Did the human brain evolve around a 13 year pre-college curriculum. Of course not. "Caveboys" were were either finding food or avoiding becoming food, long before their 18th birthday. Old Star Trek episodes depict a brain-erased person restoring all knowledge in some time-compressed process taking hours, not years. And there is no reason why that science fiction will not become possible someday.
The primary result of the K-12 and four-year college program is to introduce young people into the work force at approximately voting age. Thus school serves a social development mechanism as much as a learning process. Home schooling may provide insight into that thesis, in that home-schooling removes a social element from a child's development. Exposure to the parental belief system 24/7 is probably not in the child's best interest. Many home-school advocates do so because of strong beliefs rooted in religious or social bias. Exposure to different beliefs and different people during childhood are essential to a healthy involvement in a complex adult world.
There is another side to this issue - cost. The cost of a K-12 program is the largest or 2nd largest budget item in every state in the country. And in many third world and emerging markets, access to K-12 education is limited by resources. This is the primary motive behind programs like OLPC, One Laptop per Child Laptop. The Internet allows those countries to educate more children, while this country could educate children with less money.
When I entered a Southern Methodist University at age 18, there was a student who was only 12 years old. And he graduated before I graduated. He was probably in a hurry to leave an environment where he did not fit in. Participation in dating, drinking, and intra-mural sports was simply impossible for him. But what if half the student body was near puberty? What if the average age to enter the work force were to drop by 20%? Is this a good thing? And is it inevitable either way?
Thursday, February 12, 2009
What if business could function like a Hollywood movie production. A company is created with a specific value-creation goal over a finite time-frame. Employees are hired to work either at a specific location, or any "connected" location. Roles, responsibilities and progress are managed online, where contributors and managers have instant access to the rate and direction of progress.
What are the barriers to such a system today? For one, the burdens of forming a company: taxes, employee benefits, laws. Corporate taxes should not exist in the US. They limit business creation and encourage offshore expansion to lower tax-base countries. For example in the semiconductor industry, integrated circuits are designed in the US, but IC wafers are tested, assembled and sold from offshore tax havens like Singapore or Ireland. If there were no corporate taxes in the US many of those jobs would stay here.
The second big barrier is employee benefits, e.g. healthcare. Healthcare should be a social responsibility not an employer responsibility. Your healthcare costs and provider network should not change if you change companies. It should only change if you change the state or country where you live.
So how does America fund social change without corporate taxes? With a new tax system. The Federal Income Tax system is absurd, wasteful and an ineffective tool of economic or social change. The solution is value-added consumption taxes (VAT), paid by every entity that consumes value, at the time of consumption. If your job is to sit at home, living off the grid, growing your own food, then you might only pay taxes on the medical treatments you receive. If you make and spend $200,000 per year, then you are paying taxes, but probably a lot less than a 38% bracket. And you would be paying a similar amount to your $200,000-income neighbors who can deduct items that you may not be able to deduct on today's 1040.
Social and economic change is managed by a non-uniform version of VAT. For instance, this is one way to introduce a carbon tax. A kilowatt of kerosene has a higher VAT than a kilowatt of solar/wind energy. It's that simple. Rather than obtuse 1049A deductions based on last year's expenditures, put the incentive right into the price of the item or service you need to buy today. The government collects taxes in real-time and adjusts VAT taxes in near real-time. They do this on toll-based freeways in Los Angeles, and it works.
With the right changes, companies of the future can freely form to create and export value. Value is taxed to fairly meet the needs of the government.
Tuesday, February 3, 2009
Friday, January 16, 2009
If 100% of your non-advertising revenue comes from 5% of your users then what is the incentive for Freemium Internet business models, beyond a claim that your site will really make money someday? Unless your "uniques" are really high, or your audience is very targeted, you aren't getting enough revenue from ads to pay the team (unless maybe you are the team). Freemium is a cop-out. A way of saying "our product really isn't worth paying for", but try it for free and maybe you'll feel compelled to upgrade to our super-duper service someday (or more likely we'll promise our investors you will). Do you know any Bricks and Mortar companies that use this model? Can you imagine what would happen if Prostitution used the Freemium model? You don't have to look further than online Pornography to see that endgame. Free online porn has displaced paid-for models. Last week, the Porn industry "bent over" to ask for Federal Bailout money. Good luck with that - nobone gets bailout money until Congressmen can wax prophetic and produce soundbite fodder. And XXX doesn't play well in November.
I dabbled with Freemium solutions from LinkedIn, Flickr, and others. But the only Freemium model I stick with is the New York Times crossword puzzle subscription. (You can read the online paper for free, but wasting your time on that damn puzzle will set you back $6.95/month). I figure it's cheaper than buying a few papers from the newsstand - and I don't have to hoard quarters.
The next wave of Internet providers must provide value services that people will pay real money for. Creating and marketing for pay services in the nexus of the current Great Repression is a huge challenge. But not failing to market services that are worth paying for will condemn most Internet companies to failure or dilution.