Acer has found a neat little buzzword driven niche which is making people get into a laptop with very little capabilities and still pay close to a fully loaded laptop!
If only a person shops around and looks for sale - one can easily find a laptop with better capability that is not only cheap but also practical.
Recently I fell into the trap of Netbooks and bought a high end Acer for my kid- with the hope that I can carry around when I am driving without having to lug a heavy laptop or worry about being broken into in the bay area!
Big Mistake!
First my 6 year old returned the NEtbook saying it doesn't work! Later I find that it is not suited for thos Disney & NickJR websites! as it really is slow in those graphics intensive games!
Next everytime I need to do anything other than really browse the net (may be thats why it is a NetBook) - copy , load or backup - ofcourse I need the external drive which is mo money!
And ofcourse any added new applications like - adding music , photos & videos etc which is what is driving the current boom in consumer driven demand - fat chance with NetBook!
Add a another 50-100 bucks and you can really get a Laptop with full capability!
So Please know what you want and how you will use before you venture into a NEtBook!
Now coming into Google and its capability to write usable applications- they do have a lot to learn from Apple and Microsoft!
From email to Google Docs - its a real basic and unstructured form with a usablility that is at best vulgar - with very volative evolution history! What is there today will vanish tomorrow! No co-ordinated effort in building a platform- looks like a bunch of amateurs with good programming capability churning pieces out in the market without co-ordinated effort in development or product management to make them work with seamless interoperability-
So Android - might be a good incentive for people to really buy a Laptop with good capabilities and leave Netbook to that time in future when the world it ready for real net computing!
Tuesday, June 2, 2009
China playing a prudent Business partner!
Geithner's visit may not have the glamor of Olympian visit of the Bush-Paulson team- but certainly did drive home a bunt resulting in a triple!
With less rumblings coming from China and more Cisco-ish optimism from Geithner- we certainly might have a smooth transition of China dependent Debt to a more manageable and balanced America- atleast for the near term.
With China's immediate future dependent on American prosperity - and there being less open market outside the American Economy - it will take much longer for China spread its export driven economy unless it has the courage and will to open its domestic market and bring prosperity to its lopsided population at the low end of the pyramid. With India as the only major democracy with a significant drive towards a open door policy - hungry and able - China will see this as an opportunity to work even closer with America in building itself as a major force in the global economy.
Unlike Japan - China is chosing wisely in playing very diplomatically and gently nudging when appropriate in settling its concerns with Dollar exposure. With a controlled economy and currency as its weapon - it might have more incentive to support the dollar.
Any weakness in the treasury will be supported by the Administration and Geithner to help alleviate any inflation threat as the market starts moving away from deflation and starts building a case for hyper-inflation!
With less rumblings coming from China and more Cisco-ish optimism from Geithner- we certainly might have a smooth transition of China dependent Debt to a more manageable and balanced America- atleast for the near term.
With China's immediate future dependent on American prosperity - and there being less open market outside the American Economy - it will take much longer for China spread its export driven economy unless it has the courage and will to open its domestic market and bring prosperity to its lopsided population at the low end of the pyramid. With India as the only major democracy with a significant drive towards a open door policy - hungry and able - China will see this as an opportunity to work even closer with America in building itself as a major force in the global economy.
Unlike Japan - China is chosing wisely in playing very diplomatically and gently nudging when appropriate in settling its concerns with Dollar exposure. With a controlled economy and currency as its weapon - it might have more incentive to support the dollar.
Any weakness in the treasury will be supported by the Administration and Geithner to help alleviate any inflation threat as the market starts moving away from deflation and starts building a case for hyper-inflation!
Monday, June 1, 2009
Mo Money Please!
JP Morgan and Goldman Sachs raising more money, Again!
This time to pay back TARP
As part of repayment requirements!
No Intervention? Just Nudging!
This time to pay back TARP
As part of repayment requirements!
No Intervention? Just Nudging!
No Reason to Run GM!
Mr O emphasised Whitehouse is not interest in running GM!
Whitehouse has an army of people from Bernstein to GM's own Henderson speaking about the independence of GM's management!
Canada - a new minority shareholder - pledging to stay commited for atleast 8 years as shareholder!
mmm....60 percent owner saying not interested in influencing the management!
mmm.....looking back in the mirror, it is hard to digest the storyline and the plot!
May be, Just May be - Mr O , we will let this one pass!
Whitehouse has an army of people from Bernstein to GM's own Henderson speaking about the independence of GM's management!
Canada - a new minority shareholder - pledging to stay commited for atleast 8 years as shareholder!
mmm....60 percent owner saying not interested in influencing the management!
mmm.....looking back in the mirror, it is hard to digest the storyline and the plot!
May be, Just May be - Mr O , we will let this one pass!
Robert Reich - Changing Strategy?
Mr Reich has been a constant label in CNBC/Bloomberg & FBN all these days of Financial Whatever.
All along his theme has been defensive against all these channels and reporters who have been to a large extent - against the current Mr O's bull dozing effect on Wall Street and American Capitalism.
Every time he supported or defended Mr O's policies on camera - he was either spoken over or stampeded by the reported - which was very aparent when Mr Reich - though have very credible views and arguments - found himself getting the raw end! Some times he even was on the verge of losing it when he had to yell to get any time at all - where he harly had a chance to speak in a segment he was one of the spoken guest!
US Berkely has by far been an elite institute producing intellectuals and entrepreuners of a different class - but been behind the sheets and have restricted to a few news prints with targetted circulation. But MR Reich has changed that- but has found himself defend his opinions and expertise!
Till Now!
Yes - Mr Reich has changed his stance by writing a pure Capitalistic view on GM and American Auto Industry in Financial Times! Yes in FT!
His follow up on CNBC was even cleaner- YEs very Capitalistic - Never once did he defend the Administration or the Whitehouse!
Now he had all the time he wanted to express, talk and gain the support of the reporters!
A Change of Heart , Mr Reich or just plain being Smart?
And White House's Bernstein found himself defending himself on camera - and CNBC even made MR Reich take the opposing position!
And Mr Reich got more and more time on camera with a change of heart!
All along his theme has been defensive against all these channels and reporters who have been to a large extent - against the current Mr O's bull dozing effect on Wall Street and American Capitalism.
Every time he supported or defended Mr O's policies on camera - he was either spoken over or stampeded by the reported - which was very aparent when Mr Reich - though have very credible views and arguments - found himself getting the raw end! Some times he even was on the verge of losing it when he had to yell to get any time at all - where he harly had a chance to speak in a segment he was one of the spoken guest!
US Berkely has by far been an elite institute producing intellectuals and entrepreuners of a different class - but been behind the sheets and have restricted to a few news prints with targetted circulation. But MR Reich has changed that- but has found himself defend his opinions and expertise!
Till Now!
Yes - Mr Reich has changed his stance by writing a pure Capitalistic view on GM and American Auto Industry in Financial Times! Yes in FT!
His follow up on CNBC was even cleaner- YEs very Capitalistic - Never once did he defend the Administration or the Whitehouse!
Now he had all the time he wanted to express, talk and gain the support of the reporters!
A Change of Heart , Mr Reich or just plain being Smart?
And White House's Bernstein found himself defending himself on camera - and CNBC even made MR Reich take the opposing position!
And Mr Reich got more and more time on camera with a change of heart!
DOW JONES AVERAGE: GM & CITIGROUP
At one end GM is screaming through all TV channels and News wires as it is booted out of DJIA the other end Citi closes relationship with DJIA in a silent show!
Who will benefit from this? As Cisco and Travellers enter the elite club?
Is the relevance of more Technology an indication of how much technology is and will play in the post Industrialised world?
Or just a show of maturity for Technology and its common equity- where the power shift has to start moving up the pyramid?
Eitherway we are entering the new millenium - a decade later , with a new hope and order for not just America but the whole Global Capital MArket!
Who will benefit from this? As Cisco and Travellers enter the elite club?
Is the relevance of more Technology an indication of how much technology is and will play in the post Industrialised world?
Or just a show of maturity for Technology and its common equity- where the power shift has to start moving up the pyramid?
Eitherway we are entering the new millenium - a decade later , with a new hope and order for not just America but the whole Global Capital MArket!
Sunday, May 31, 2009
G.M. America! Good Morning America!
Financial Whatever - What started as a minor aberration a couple of years back is in the middle of a turnover spearheaded by the White house and Washington!
Global in nature is an understatement and is clearly reflected in how GM is playing out!
A part of GM will be owned by Germany & Russia!
Another part to be owned by America & Canada!
We dont know who else will be there as only four labels will be retained by the new Government sponsored GM!
Cadillac , Chevy , GMC and Buick!
Each one beautifully re-engineered in the last few years to retain and gain market share and minds of people globally!
Is this a new era in America or a change in the way the global economy will operate?
Global in nature is an understatement and is clearly reflected in how GM is playing out!
A part of GM will be owned by Germany & Russia!
Another part to be owned by America & Canada!
We dont know who else will be there as only four labels will be retained by the new Government sponsored GM!
Cadillac , Chevy , GMC and Buick!
Each one beautifully re-engineered in the last few years to retain and gain market share and minds of people globally!
Is this a new era in America or a change in the way the global economy will operate?
Made in China! Or is it?
As Geithner prepares his Single most important meeting of his professional life - the long end is drifting higher and the Dollar reaching the low band- having a higher Gold and oil does bring back the same question - Is this another attempt at breaking the dollar? or just another failed attempt?
Can Geithner play by the book in China & not have a silver spoon? Can he show diplomacy and creativity in negotiating like Paulson & Bush-es did during the Olympics stayover which changed the game for Dollar?
As the noise level increases on the debt level and the burden it has on American Economy - it is important to put things in perspective.
Yes - it is diffiult to service the debt if the economic environment stays the same with trade imbalance staying in its present form!
Yes - it is difficult to see the future if China's GDP reaches American GDP in 2027 as per Goldman Sachs!
Yes - it is impossible to not think of Hyperinflation if Dollar collapses!
Trade imbalance and trade deficit will change to the favaroble side when Technology, Manufacturing and Energy change the we conduct business- in every form that we know now. Yes it is not a 3 month switch - looking at the disruption that is taking place in Energy & Technology we will change almost 2/3 of manufacturing and US will gain advantage- see report on Energy/Utility under America 2.0
If China's GDP triples in the next 18 plus years US GDP will atleast double in size keeping a fair amount of advantage on its side
Dollar can not collapse in its current form of Keynesian Economy where the Global Economy is still managed by a handful of individuals with inequal central banks and politicians playing hteir cards blindly!
Ease up Mr Geithner - there is no pressure on your shoulders, Yet!
Can Geithner play by the book in China & not have a silver spoon? Can he show diplomacy and creativity in negotiating like Paulson & Bush-es did during the Olympics stayover which changed the game for Dollar?
As the noise level increases on the debt level and the burden it has on American Economy - it is important to put things in perspective.
Yes - it is diffiult to service the debt if the economic environment stays the same with trade imbalance staying in its present form!
Yes - it is difficult to see the future if China's GDP reaches American GDP in 2027 as per Goldman Sachs!
Yes - it is impossible to not think of Hyperinflation if Dollar collapses!
Trade imbalance and trade deficit will change to the favaroble side when Technology, Manufacturing and Energy change the we conduct business- in every form that we know now. Yes it is not a 3 month switch - looking at the disruption that is taking place in Energy & Technology we will change almost 2/3 of manufacturing and US will gain advantage- see report on Energy/Utility under America 2.0
If China's GDP triples in the next 18 plus years US GDP will atleast double in size keeping a fair amount of advantage on its side
Dollar can not collapse in its current form of Keynesian Economy where the Global Economy is still managed by a handful of individuals with inequal central banks and politicians playing hteir cards blindly!
Ease up Mr Geithner - there is no pressure on your shoulders, Yet!
Saturday, May 30, 2009
Barrons and WSJ under the Fox Umbrella!
The recent rumor about Fox planning to go Micro charging the WSJ articles in the not too far future seems far fetched and unrealistice - or is Fox planning a new course of action for the often influential readers of WSJ and Barrons.
Or is itplanning to offer the much more valuable data feeds and research material - which is often affordable only by large investors and institutions and kept out of reach for the retail investors?
Looking at the past several decades there has never been a boom or bust which has not been closely followed by politicians and policy makers without refering to the editorials from WSJ and Barrons- till now! Under Fox!
Surprisingingly this time around - when the global economy is being tossed around from depression to hyperinflation - from Ms Whitney to Dr Doom- nothing from the wwisdom of Barrons or WSj is being reflected either in the Corridors of Washington or in the holes of Wall street!
THe Covers and Headlines from Barrons and WSJ post Fox acquisition has been more partisan and polarised - sometimes and not so forceful opinions or influential on the sentiments!
Charging for opinions and editorials in an age of internet relevance where even the facts fade faster than the time to dry the ink - makes it harder to digest - let alone read!
May be , Just May be - with the society fast becoming a literate world with millions publishing almost about everything , every minute - might eventually look for specialised material making Barrons relevant once again!
Or is itplanning to offer the much more valuable data feeds and research material - which is often affordable only by large investors and institutions and kept out of reach for the retail investors?
Looking at the past several decades there has never been a boom or bust which has not been closely followed by politicians and policy makers without refering to the editorials from WSJ and Barrons- till now! Under Fox!
Surprisingingly this time around - when the global economy is being tossed around from depression to hyperinflation - from Ms Whitney to Dr Doom- nothing from the wwisdom of Barrons or WSj is being reflected either in the Corridors of Washington or in the holes of Wall street!
THe Covers and Headlines from Barrons and WSJ post Fox acquisition has been more partisan and polarised - sometimes and not so forceful opinions or influential on the sentiments!
Charging for opinions and editorials in an age of internet relevance where even the facts fade faster than the time to dry the ink - makes it harder to digest - let alone read!
May be , Just May be - with the society fast becoming a literate world with millions publishing almost about everything , every minute - might eventually look for specialised material making Barrons relevant once again!
Gloom Boom and Doom : Marc Faber from Deflation to Hyper Inflation~
Not too long ago Mr Faber was promoting Depression and Deflation!
With the global market on a 3 month tear - it didnt take too long for the end of America to be promoted by the able prognosticator ONCE AGAIN - only this time around the mantra is not Depression and Deflation but Hyper-Inflation!
At one end of the spectrum Mr Faber talks about a reason for the current rally as technical and inevitable, after 90 days of such event and on the other end for an inevitable correction or a fall off the cliff around the corner - not knowing which and when! Mr Faber not sure on which course the market will take? Now that coming from a self claimed Gloom & Doom Professor - is certainly very humble!
Calling foul on what was done to stop the steep fall is no excuse!
Crying home and showing bitterness has never been new to Mr Faber and his cronies - icluding Motorcycle Romeo Mr Rogers!
As Prof. Peek A Monie of Harwood once said - Listening to anger is prudent if the force to tame is not in your candy shop!
May Be , Just May be - this time around it is still tradeable in a candy store!
With the global market on a 3 month tear - it didnt take too long for the end of America to be promoted by the able prognosticator ONCE AGAIN - only this time around the mantra is not Depression and Deflation but Hyper-Inflation!
At one end of the spectrum Mr Faber talks about a reason for the current rally as technical and inevitable, after 90 days of such event and on the other end for an inevitable correction or a fall off the cliff around the corner - not knowing which and when! Mr Faber not sure on which course the market will take? Now that coming from a self claimed Gloom & Doom Professor - is certainly very humble!
Calling foul on what was done to stop the steep fall is no excuse!
Crying home and showing bitterness has never been new to Mr Faber and his cronies - icluding Motorcycle Romeo Mr Rogers!
As Prof. Peek A Monie of Harwood once said - Listening to anger is prudent if the force to tame is not in your candy shop!
May Be , Just May be - this time around it is still tradeable in a candy store!
Friday, May 29, 2009
GM - who is the loser?
Watching GM story play out the last few weeks and listening to various participants of the GM eco-system one wonders who is the real loser in an Industrial behemoth that has paved the way for most of modern America and World Industrialization through various reach/influences into different industries - Automobiles to satellite communications; from Transportation to Technology; From Aviation to Financial Services to Consumer Electronics!
UAW and the Employees/Retires
Component Manaufacturers/spin-offs
Healthcare
Management
Car Dealers
Shareholders
Bond Holders
Everyone has made quite a bit from GM during the past several decades! Including the consumers!
Now on the verge of Bankruptcy - everyone crying foul and calling the Bond Holders - the dark force - looks like except the BondHolders everyone else want the survival of GM - as they still gain a lot post restrucutring -Except the bond Holders - who legally have the right to break GM and claim...!
As we enter a new ara in Corporate Law when not just policies that are changing colors but so are every beleifs that we have come to accept during the last several decades,one wonders what next? Redefining Anti-competitive behaviour? Free market trade barriers? co-opetition between capital markets and washington?
May Be , Just May Be as we navigate in playing the information game - using media as a vehicle to manage expectation and promote policy agenda - we might stumble across to pave the way for a new force in global co-operation resulting in an eco-friendly global economy!
UAW and the Employees/Retires
Component Manaufacturers/spin-offs
Healthcare
Management
Car Dealers
Shareholders
Bond Holders
Everyone has made quite a bit from GM during the past several decades! Including the consumers!
Now on the verge of Bankruptcy - everyone crying foul and calling the Bond Holders - the dark force - looks like except the BondHolders everyone else want the survival of GM - as they still gain a lot post restrucutring -Except the bond Holders - who legally have the right to break GM and claim...!
As we enter a new ara in Corporate Law when not just policies that are changing colors but so are every beleifs that we have come to accept during the last several decades,one wonders what next? Redefining Anti-competitive behaviour? Free market trade barriers? co-opetition between capital markets and washington?
May Be , Just May Be as we navigate in playing the information game - using media as a vehicle to manage expectation and promote policy agenda - we might stumble across to pave the way for a new force in global co-operation resulting in an eco-friendly global economy!
From Leno to Conan!
As the change of guard takes place at NBC's covetted Late night slot - From Leno to Conan- are we in for a sea of change like what happened from the Bush league to Mr O.
As the aging baby boomers start to hit the bed at an early timeslot - is GE getting smart by retaining the clickers and keeping them up a wee bit late and leave the usual punkish wide awake zone to a younger generation Conan?
GE under Jeff Immelt has also come a long way from the previous Legacy - Management and Corporate Icon, who is still sported by all news channel- Jack Welch. Jeff Immelt has carefully drifted away from JW's Services driven bet to the current growth strategy betting on Media , Renewable Energy & Modern Healthcare!
Given the strength of GE's global reach and management depth - the current strategy might put GE ready for a strong growth driven path for the next century.
As the aging baby boomers start to hit the bed at an early timeslot - is GE getting smart by retaining the clickers and keeping them up a wee bit late and leave the usual punkish wide awake zone to a younger generation Conan?
GE under Jeff Immelt has also come a long way from the previous Legacy - Management and Corporate Icon, who is still sported by all news channel- Jack Welch. Jeff Immelt has carefully drifted away from JW's Services driven bet to the current growth strategy betting on Media , Renewable Energy & Modern Healthcare!
Given the strength of GE's global reach and management depth - the current strategy might put GE ready for a strong growth driven path for the next century.
From WMD to WMI?
Weapons of Mass Intrusion?
Name what you want - the current Administration's intrusion into the post Financial Whatever paves well for the future of Technology!
Changing Management and corporate philosophy might be debated beyond the political corridors of Washington and might well build new curriculum of corporate interventions and management philosophy in B-schools. One thing that is clear is the politics in Washinton and elsewhere is definitely taking new shapes and they are showing rainbow colors from Milan to Moscow and well past the London-Los Angeles Bridge.
Listening to the impact that Technology will play in either building the economies of the world or destroying the same - coming from Mr O and the new emerging politicians -
May be, Just May Be Technology will become the foundation to building the strength of modern American Economy!
Name what you want - the current Administration's intrusion into the post Financial Whatever paves well for the future of Technology!
Changing Management and corporate philosophy might be debated beyond the political corridors of Washington and might well build new curriculum of corporate interventions and management philosophy in B-schools. One thing that is clear is the politics in Washinton and elsewhere is definitely taking new shapes and they are showing rainbow colors from Milan to Moscow and well past the London-Los Angeles Bridge.
Listening to the impact that Technology will play in either building the economies of the world or destroying the same - coming from Mr O and the new emerging politicians -
May be, Just May Be Technology will become the foundation to building the strength of modern American Economy!
Thursday, May 28, 2009
Verdict from Bond King!
With more and more positive response for the auction - 2 , 5 and now 7 Y with a healthy 2.2 BTC.
All banks able to raise money without government intervention.
Now these news are slowly hiding behind the headlines.
PIMCO earlier today on CNBC was optimistic about the fixed income market and continuing to support the treasuries not too far from current levels..Now that is an endorsement that will definitely give a small setback to those who are still hoping for a dollar collapse and enter a hyper inflation state.
All banks able to raise money without government intervention.
Now these news are slowly hiding behind the headlines.
PIMCO earlier today on CNBC was optimistic about the fixed income market and continuing to support the treasuries not too far from current levels..Now that is an endorsement that will definitely give a small setback to those who are still hoping for a dollar collapse and enter a hyper inflation state.
Green Shoot: An eco friendly recovery!
CNBC , MSNBC & Jeff Immelt: Appears they are determined to use a not so sensitive terminology to show their enthusiasm about the market bottoming process!
GREEN SHOOT! mmmm....with a Government going Green and standing firm to muscle its way into a recovery, Green Shoot looks like a eco friendly terminology without adding too much into credibility!
Started by CNBC and picked up by all GE family networks from NBC to MSNBC and the latest endorsement by Jeff Immelt on Green Shoot!
Atleast to their credit Ms O friendly Mr O indirectly endorsed Green Shoot when he talked about worst being over! Growing in a conservative town Shoot was the term that was used to alternate the other 4 letter word- so may be Green Shoot , could it be...Naah! An eco-friendly 4 letter...no!
Lets see if this trend really propogates and resonates into the real economy!
GREEN SHOOT! mmmm....with a Government going Green and standing firm to muscle its way into a recovery, Green Shoot looks like a eco friendly terminology without adding too much into credibility!
Started by CNBC and picked up by all GE family networks from NBC to MSNBC and the latest endorsement by Jeff Immelt on Green Shoot!
Atleast to their credit Ms O friendly Mr O indirectly endorsed Green Shoot when he talked about worst being over! Growing in a conservative town Shoot was the term that was used to alternate the other 4 letter word- so may be Green Shoot , could it be...Naah! An eco-friendly 4 letter...no!
Lets see if this trend really propogates and resonates into the real economy!
G8 : Cartel to Print Money - OPEC
OPEC Al Naomi calling G8 Cartel!
Coming to think of it - it sure does make sense looking at the heel of the recent developments.
Printing Money at will?
Policy changes at the flip of a coin?
Changing sides on mood!
Something to think about...?
Coming to think of it - it sure does make sense looking at the heel of the recent developments.
Printing Money at will?
Policy changes at the flip of a coin?
Changing sides on mood!
Something to think about...?
Wednesday, May 27, 2009
Thawing the Financial Iceberg!
JP Morgan raises capital without Governement backing!
Bank of America takes a boat load of money from the market!
US 5 Year auction is a healthy 2.3 BTC
May be the Financial Iceberg is not moving but Thawing?
Bank of America takes a boat load of money from the market!
US 5 Year auction is a healthy 2.3 BTC
May be the Financial Iceberg is not moving but Thawing?
Retail and Consumer Confidence!
First serious long week-end of the year! Memorial Day and heading closer to the summer holidays!
Looking at the mall parking lots and decreased sale signs in the retail shops - it certainly validates this morning's optimistic consumer sentiments.
Case-Shiller and other RE numbers might still not suport the fast moving houses in certain markets. The number of sales happening in WestCoast is certainly more than that has been reported in the past 12 odd months. Some even enjoying multi-bids and over bids!
May be , Just May Be - we are looking at post bottom syndrome!
Looking at the mall parking lots and decreased sale signs in the retail shops - it certainly validates this morning's optimistic consumer sentiments.
Case-Shiller and other RE numbers might still not suport the fast moving houses in certain markets. The number of sales happening in WestCoast is certainly more than that has been reported in the past 12 odd months. Some even enjoying multi-bids and over bids!
May be , Just May Be - we are looking at post bottom syndrome!
TUBE GOING DIGITAL!
I WANT MY TV!
As we begin slowly migrating toward a connected lifestyle the living room tube is fading to the background as more and more time is spent on connected devices.
As I see myself getting connected to the wireless world - I am finding myself being tethered to the internet which makes me slowly start liking my TV days better!
Growing up as a kid we used to look for those family time in front of Must see TV or a Monday Night Football or even those investigative reports. Any significant news bit used to be waiting hot and sassy just around dinner time.
Rationing Tube time as a kid started becoming a self control issue getting in to University as more and more channels and forms of programs from reality TV to in your face competition!, From Oprah to Letterman and other scintillating distractions kept teasing the intellectual mind-yet one could always have their personal life and yet not miss too much or feel left out on these program.
30 mins became 1-2 hours of couch time but seldom became addictive or induced change in personalities or interpersonal skills! Now internet and their various means of getting hooked into it! Innovation has changed our life style more than we are willing to accept. Reaching out to people has improved in several dimensions - from social bars to avatars and second and third cyber lifes. From instant gratifications to instant messaging. From libraries to cyber universities. from daily news to streaming and screaming twitters! Daily mailman to real-time mail! From unlisted white pages to Facebooks and bloggings..and it is only the beginning!
As I step out of my house the influence is felt from gas station net screens to my own personal Flat screens in toilet booths!
Everywhere what I didn't need or when I didn't want to know!
But the convenience was evident from taking side streets and missing that traffic jam I caught pumping up gas or catching that early owl sale with that tip from my cyber friend! Suddenly I am seeing myself squarely in the cross wires of a digital shift which has taken my private time with the tube - which has not only shrunk in shape and size but also in time from my daily routines!
I still can miss my tube time yet not my blog time or avatar routines!
I am beginning to understand the search patterns on Google more than my evening news which is fast fading in the clouds of modern age cyber news!
Now that I have connected myself to anything and everything and can get more than I ever wanted in every digital form - from news to entertainment; from education to personal life - I miss seeing that Thursday night sitcom with my family.. As everyone is either in cyber cafes or watching a few channels on their laptops..while I am sitting in front of my thin Tubeless TV screaming at one end and a soft Dire Straits screaming for His Own M-TV on my net Radio while I surf Hulu for that episode I missed last night while cyber chatting.
Still when my TV went partially static this morning - the whole family panicked!
Yes - partial!
Calling the cable company I realized that as the net world goes wireless the Tube world is going Digital!
And in that transition I lost our favorite tube channels the 40s and 50s which had all those cartoon and teen age channels and the News Channels from Bloomberg to MSNBC! We still had 60 plus channels and all the Network channels from ABC to Fox!
Yet we panicked!
We still had all the programs from live to long dead on every net top to lap top and bellytops!
Yes we panicked!
Yes its a house with partial TV!
Yes its a house with multiple wireless TVs on Windows!
But its my TV that is partially dysfunctional as my cable goes digital.
Now I understand when Dire Straits screamed for his own TV he was talking about what's to come!
Now I am screaming -I want my TV!
Yes! I want my Real TV on my TV!
As we begin slowly migrating toward a connected lifestyle the living room tube is fading to the background as more and more time is spent on connected devices.
As I see myself getting connected to the wireless world - I am finding myself being tethered to the internet which makes me slowly start liking my TV days better!
Growing up as a kid we used to look for those family time in front of Must see TV or a Monday Night Football or even those investigative reports. Any significant news bit used to be waiting hot and sassy just around dinner time.
Rationing Tube time as a kid started becoming a self control issue getting in to University as more and more channels and forms of programs from reality TV to in your face competition!, From Oprah to Letterman and other scintillating distractions kept teasing the intellectual mind-yet one could always have their personal life and yet not miss too much or feel left out on these program.
30 mins became 1-2 hours of couch time but seldom became addictive or induced change in personalities or interpersonal skills! Now internet and their various means of getting hooked into it! Innovation has changed our life style more than we are willing to accept. Reaching out to people has improved in several dimensions - from social bars to avatars and second and third cyber lifes. From instant gratifications to instant messaging. From libraries to cyber universities. from daily news to streaming and screaming twitters! Daily mailman to real-time mail! From unlisted white pages to Facebooks and bloggings..and it is only the beginning!
As I step out of my house the influence is felt from gas station net screens to my own personal Flat screens in toilet booths!
Everywhere what I didn't need or when I didn't want to know!
But the convenience was evident from taking side streets and missing that traffic jam I caught pumping up gas or catching that early owl sale with that tip from my cyber friend! Suddenly I am seeing myself squarely in the cross wires of a digital shift which has taken my private time with the tube - which has not only shrunk in shape and size but also in time from my daily routines!
I still can miss my tube time yet not my blog time or avatar routines!
I am beginning to understand the search patterns on Google more than my evening news which is fast fading in the clouds of modern age cyber news!
Now that I have connected myself to anything and everything and can get more than I ever wanted in every digital form - from news to entertainment; from education to personal life - I miss seeing that Thursday night sitcom with my family.. As everyone is either in cyber cafes or watching a few channels on their laptops..while I am sitting in front of my thin Tubeless TV screaming at one end and a soft Dire Straits screaming for His Own M-TV on my net Radio while I surf Hulu for that episode I missed last night while cyber chatting.
Still when my TV went partially static this morning - the whole family panicked!
Yes - partial!
Calling the cable company I realized that as the net world goes wireless the Tube world is going Digital!
And in that transition I lost our favorite tube channels the 40s and 50s which had all those cartoon and teen age channels and the News Channels from Bloomberg to MSNBC! We still had 60 plus channels and all the Network channels from ABC to Fox!
Yet we panicked!
We still had all the programs from live to long dead on every net top to lap top and bellytops!
Yes we panicked!
Yes its a house with partial TV!
Yes its a house with multiple wireless TVs on Windows!
But its my TV that is partially dysfunctional as my cable goes digital.
Now I understand when Dire Straits screamed for his own TV he was talking about what's to come!
Now I am screaming -I want my TV!
Yes! I want my Real TV on my TV!
Tuesday, May 26, 2009
Strong Dollar to continue?
North Korea, Nigeria and OPEC :What do they have in common?
A good Future for Dollar!
Who decides the price of currency? A handful of powerful Investors/Institiutions! Given that background and the following
Seven reasons:
- Uncertainty
- Wild swings
- Outside USA every other country's Future relies on other people’s hand
- other markets & currencies are too small to accomodate the need
- Every sizeable economy is Export driven
- Unlike USA other countries Policy changes are slow
- Outside UK & USA Economic expertise is inadequate
Indications:
100 B supply and still holding ok
25B Pfizer offer 2,4 & 7 Y in Euro and 29Y in Pound? (betting that their currencies will weaken going forward)
Gold flattening
37% cut in Iron Ore price by RIO
The negative campaign against US dollar is weak and fragmented at best!
A good Future for Dollar!
Who decides the price of currency? A handful of powerful Investors/Institiutions! Given that background and the following
Seven reasons:
- Uncertainty
- Wild swings
- Outside USA every other country's Future relies on other people’s hand
- other markets & currencies are too small to accomodate the need
- Every sizeable economy is Export driven
- Unlike USA other countries Policy changes are slow
- Outside UK & USA Economic expertise is inadequate
Indications:
100 B supply and still holding ok
25B Pfizer offer 2,4 & 7 Y in Euro and 29Y in Pound? (betting that their currencies will weaken going forward)
Gold flattening
37% cut in Iron Ore price by RIO
The negative campaign against US dollar is weak and fragmented at best!
Saturday, May 23, 2009
What's Brewing in the Currency Market?
If what we are in is really a Financial Tsunami- then the people who have experienced Tsunami will say that the Ocean recedes bringing eery calmness before unleashing its full power!
Looking at the Sudden resurgence of the people who would like the Financial Whatever to be a Financial Tsunami are doing - Attacking with co-oordinated effort in the currency market - mainly US Dollar and British Pound , for a determined reason or cause , one would think this is being scripted for a Financial Tsunami.
A flaw in the current scheme of things -
- For the Dollar to collapse there has to be a replacement; Is Euro capable of satisfying demand? The very people who want the Dollar collapsed dont have a fall back commodity or currency which has the strength to withstand even a slight disruption in the financial market.
What is in their favor:
- Another $5T debt supply coming to the market- Government and corporate debt. The smarter ones have already taken a lot from the market at a very low rate.
It is not always what it should be or who deserves that win the war - However if the initial effort by these vigilantes gain momentum and there is another wave of uncertainity in the political climate we might have a rough patch towards the end of the year!
Looking at the Sudden resurgence of the people who would like the Financial Whatever to be a Financial Tsunami are doing - Attacking with co-oordinated effort in the currency market - mainly US Dollar and British Pound , for a determined reason or cause , one would think this is being scripted for a Financial Tsunami.
A flaw in the current scheme of things -
- For the Dollar to collapse there has to be a replacement; Is Euro capable of satisfying demand? The very people who want the Dollar collapsed dont have a fall back commodity or currency which has the strength to withstand even a slight disruption in the financial market.
What is in their favor:
- Another $5T debt supply coming to the market- Government and corporate debt. The smarter ones have already taken a lot from the market at a very low rate.
It is not always what it should be or who deserves that win the war - However if the initial effort by these vigilantes gain momentum and there is another wave of uncertainity in the political climate we might have a rough patch towards the end of the year!
Sunday, May 17, 2009
PCs , Laptops and Bellytops!
Is there a reason for me to have this Laptop wondered my mind as I started shifting it around my belly as I was stretched in my couch with my boots on couple of ottomon sitting on both sides of the TV.
Still waiting on my laptop - which has become more of a Belly top after I stopped playing racquetball a couple of years back- to throw the browser at me. Still thrashing that memory and hard disk with that usual update from Uncle Bill , Yeah Yeah - the other Big Brother from Washington no not DC but the state! As the auto update is complete from Microsoft it prompts as usual for a system restart!
Now I am really wondering why I am I still using a Bellytop for accessing data and programs from the cloud!
As I hit the restart button and start waiting for it to come back AGAIN - I start to think of the things I did on my computer that last few days:
- Check my company email using a secured connection to my Blackberry supported back office application
- did my usual Amazon purchase: no not books! this time some electronics that was cheap!
- checked the weather as the summer came a bit too early in California!
- obviously had to do my suddenly frequent blogging
- opened my twitter account
- set up a GOOG Docs to start using some collaborative stuff with some start up initiative for a friend
- have been using Internet for CNBC TV and Bloomberg TV as my cable company Comcast decided to go digital ahead of the National cut off - making me unprepared and without cable news!
- Use the Word program to cut and paste some articles from the Web for later read
- and more and more from the net; from mail to skype to IM some photo upload and music download to my iTouch!
Now another prompt from my recently updated Windows - asking for changing some default options - stopped my train of thought!
Now I am really wondering - a few years back I was using my Laptop - when It was really a lap top for things that were loaded on my laptop - mostly Word, spreadsheet and presentation stuff! More than 90% of the work used to be on programs that recided on PC. Now I am begining to realise that less than 10% of the time that I spend is actually on programs resident on my laptop and most of that is to update my Windows! I am thinking my be I dont need to update my laptop as often as I am led to beleive!
Now its time for me to shift my Bellytop as the heat from the constant crunching in the background for the update has begun burning my skin. This Bellytop of my mine is more than a super computer of the 80s! Still I use it mainly as a gateway for external world - be it buying, selling ,communicating or accessing data , information or application! Yet I need a Supercomputing Bellytop which puts hole on my tummy!
May be, Just May be - I will stop updating my Windows so often - till they really make the real BellyTop which can access the external world for communication and data processing - with a simple screen and data interative model - either voice or even a modified keyboard to suit my new need and thirst of cloud computing world.
Still waiting on my laptop - which has become more of a Belly top after I stopped playing racquetball a couple of years back- to throw the browser at me. Still thrashing that memory and hard disk with that usual update from Uncle Bill , Yeah Yeah - the other Big Brother from Washington no not DC but the state! As the auto update is complete from Microsoft it prompts as usual for a system restart!
Now I am really wondering why I am I still using a Bellytop for accessing data and programs from the cloud!
As I hit the restart button and start waiting for it to come back AGAIN - I start to think of the things I did on my computer that last few days:
- Check my company email using a secured connection to my Blackberry supported back office application
- did my usual Amazon purchase: no not books! this time some electronics that was cheap!
- checked the weather as the summer came a bit too early in California!
- obviously had to do my suddenly frequent blogging
- opened my twitter account
- set up a GOOG Docs to start using some collaborative stuff with some start up initiative for a friend
- have been using Internet for CNBC TV and Bloomberg TV as my cable company Comcast decided to go digital ahead of the National cut off - making me unprepared and without cable news!
- Use the Word program to cut and paste some articles from the Web for later read
- and more and more from the net; from mail to skype to IM some photo upload and music download to my iTouch!
Now another prompt from my recently updated Windows - asking for changing some default options - stopped my train of thought!
Now I am really wondering - a few years back I was using my Laptop - when It was really a lap top for things that were loaded on my laptop - mostly Word, spreadsheet and presentation stuff! More than 90% of the work used to be on programs that recided on PC. Now I am begining to realise that less than 10% of the time that I spend is actually on programs resident on my laptop and most of that is to update my Windows! I am thinking my be I dont need to update my laptop as often as I am led to beleive!
Now its time for me to shift my Bellytop as the heat from the constant crunching in the background for the update has begun burning my skin. This Bellytop of my mine is more than a super computer of the 80s! Still I use it mainly as a gateway for external world - be it buying, selling ,communicating or accessing data , information or application! Yet I need a Supercomputing Bellytop which puts hole on my tummy!
May be, Just May be - I will stop updating my Windows so often - till they really make the real BellyTop which can access the external world for communication and data processing - with a simple screen and data interative model - either voice or even a modified keyboard to suit my new need and thirst of cloud computing world.
Saturday, May 16, 2009
India - Is it vote for Capitalism or Democracy?
The largest Democracy in the world voted in mass to bring back the Capitalistic Congress Party to power amidst the worst economic down turn in the world since the Depression.
With a diversity unrivalled and poverty rampant the intervention of the government is a must for this emerging and surging economy to claim its spot in the fast moving global economy.
With a delicate balance between urban world and the rural emphasis Mr Singh has done a great job in retaining his credibility. With the Gandhi Dynasty - not the original , in the verge of reclaiming New Delhi - with a full life ahead for the Younger politically charged Gandhis - Mr Rahul and Ms Priyanka - the future looks very interesting for India - as Mr Singh invites young Mr Rahul to the Cabinet!
With Communism and sectorial BJP losing ground - in what should have been their election given the economic uncertainilty - Capitalism seems to be entering a new phase. When the Western world is debating the merits of capitalism - the largest democracy has given its verdict: A Big thumbs up to the Capitalistic society!
India with the largest consumer market in sheer size - has the potential to dwarf -closely controlled Chinese market! With an open door policy that has built the recent growth - this nenewed strength in capitalistic congress can only move India farther away from its past and potentially decouple its economy from the rest of the world. This could potentially bring the much needed Manufacturing base to India which will expand the burgeoning middle class further and hopefully remove poverty from a much larger rural community which has suffered during BPO/Tech driven recent boom.With an imminent retail revolution the future bodes well for India.
May Be , Just May Be this time around the government policies will address a broader audience and focus more on bringing the much needed manufacturing base to be part of the Industrialised world.
With a diversity unrivalled and poverty rampant the intervention of the government is a must for this emerging and surging economy to claim its spot in the fast moving global economy.
With a delicate balance between urban world and the rural emphasis Mr Singh has done a great job in retaining his credibility. With the Gandhi Dynasty - not the original , in the verge of reclaiming New Delhi - with a full life ahead for the Younger politically charged Gandhis - Mr Rahul and Ms Priyanka - the future looks very interesting for India - as Mr Singh invites young Mr Rahul to the Cabinet!
With Communism and sectorial BJP losing ground - in what should have been their election given the economic uncertainilty - Capitalism seems to be entering a new phase. When the Western world is debating the merits of capitalism - the largest democracy has given its verdict: A Big thumbs up to the Capitalistic society!
India with the largest consumer market in sheer size - has the potential to dwarf -closely controlled Chinese market! With an open door policy that has built the recent growth - this nenewed strength in capitalistic congress can only move India farther away from its past and potentially decouple its economy from the rest of the world. This could potentially bring the much needed Manufacturing base to India which will expand the burgeoning middle class further and hopefully remove poverty from a much larger rural community which has suffered during BPO/Tech driven recent boom.With an imminent retail revolution the future bodes well for India.
May Be , Just May Be this time around the government policies will address a broader audience and focus more on bringing the much needed manufacturing base to be part of the Industrialised world.
Friday, May 15, 2009
AUTO 2.0
Turning a leaf as we prepare for a new generation of politicians!
Chrysler in Bankruptcy, Again and General Motors on the verge of imitating Chrysler!
Debt holders , UAW and the Dealers - clearly undergoing a massive shock as they see how the Change Machine operates.
All in the name of rebuilding American Automobile Industry! Yes it is needed to change the way Auto companies have been running the operations.
Losing market share and running a loss making enterprise is not new to modern capitalism. For every loser there is an opportunity and a potential winner willing and able to capitalize. Ford clearly has seen the messy involvement of the Change induced politicians taking contol of DC and decided to build their own dream and seems to be working.
Breaking down the Walls and building a ground up Management philosophy is clearly an advantage for GM and Chrysler - and eventually the American Consumer -as innovation and cost reduction translates into lower ownership cost.
The first structural impact is the inevitable shake up in the dealership concept and how the sales will be booked. Yes - it will change the way we see sales figures. The sales is based on what is shipped to the Dealer and not on actual sale to the end user.By trimming 40% of the dealership - in addition to lowering the reach of customers and reduced inventory - the shipment numbers cannot be easily manipulated! May be this will be an opportunity to book sales on actual sale and not on stuffing the channel!
This is only a side show if we do not capitalize on how the remaining dealership adapt to the changing user behaviour. Looking back at the first hundred years of American Auto History - several changes have happened in:
- hand me down cars
- fixit in my garage
- tune it with my buddies
- change when you like the next fashion show outlook
- use the dealer only for buying cars and nothing more
- rental cars to try out new cars while on the road
All these have been fast fading memories as the new generation have started
- my own low cost car
- less and less hand me downs as
- cars are not replaced automatically but driven till it dies
- garages are not fixit place anymore
- outside services used more for fixing
- more and more people look at dealer as a long term relationship for servicing
- rental cars are cheap alternative with no manufacturer loyalty
Given this changing culture and how we see the cars in the new millenium - by reducing dealership network might give an opportunity to help the remaining dealers to become a service center for the cars they sell. This is not new for Foreign car manufacturers where they have capitalised this changing user patterns to their advantage. This change if implemented along with the other changes that GM and Chrysler management and stake holders are contemplating - we are in for a healthy economic recovery with Automobile Industry bringing back innovation to Detroit!. May be , Just May Be this is a change that will bring back Manufacturing leadership to America!
-
Chrysler in Bankruptcy, Again and General Motors on the verge of imitating Chrysler!
Debt holders , UAW and the Dealers - clearly undergoing a massive shock as they see how the Change Machine operates.
All in the name of rebuilding American Automobile Industry! Yes it is needed to change the way Auto companies have been running the operations.
Losing market share and running a loss making enterprise is not new to modern capitalism. For every loser there is an opportunity and a potential winner willing and able to capitalize. Ford clearly has seen the messy involvement of the Change induced politicians taking contol of DC and decided to build their own dream and seems to be working.
Breaking down the Walls and building a ground up Management philosophy is clearly an advantage for GM and Chrysler - and eventually the American Consumer -as innovation and cost reduction translates into lower ownership cost.
The first structural impact is the inevitable shake up in the dealership concept and how the sales will be booked. Yes - it will change the way we see sales figures. The sales is based on what is shipped to the Dealer and not on actual sale to the end user.By trimming 40% of the dealership - in addition to lowering the reach of customers and reduced inventory - the shipment numbers cannot be easily manipulated! May be this will be an opportunity to book sales on actual sale and not on stuffing the channel!
This is only a side show if we do not capitalize on how the remaining dealership adapt to the changing user behaviour. Looking back at the first hundred years of American Auto History - several changes have happened in:
- hand me down cars
- fixit in my garage
- tune it with my buddies
- change when you like the next fashion show outlook
- use the dealer only for buying cars and nothing more
- rental cars to try out new cars while on the road
All these have been fast fading memories as the new generation have started
- my own low cost car
- less and less hand me downs as
- cars are not replaced automatically but driven till it dies
- garages are not fixit place anymore
- outside services used more for fixing
- more and more people look at dealer as a long term relationship for servicing
- rental cars are cheap alternative with no manufacturer loyalty
Given this changing culture and how we see the cars in the new millenium - by reducing dealership network might give an opportunity to help the remaining dealers to become a service center for the cars they sell. This is not new for Foreign car manufacturers where they have capitalised this changing user patterns to their advantage. This change if implemented along with the other changes that GM and Chrysler management and stake holders are contemplating - we are in for a healthy economic recovery with Automobile Industry bringing back innovation to Detroit!. May be , Just May Be this is a change that will bring back Manufacturing leadership to America!
-
Wednesday, May 13, 2009
Scape Goat for a Countrywide Ponzy scheme?
We are entering a very dangerous period when the financial market appears to be reconciling about the past excesses and starts to think about a new life- Now this!
Angelo Mozilo's accussation may not be the issue! Mr Mozilo's organization might have been a part of the financial problem - but only a very very small part!
The fall out and the accussation on an individual might sound soothing - but will expose how the better part of Wall street who created, manipulated and indulged in the excesses (see Fool's Gold by Gillian Tett) and managed to get away with it.
If the accusation on Mr Mozilo is an indication - there is a good chance the high road might get drifted along the countryside and will never take the freeway to Wallstreet!
May be, Just May Be - this time it is NO Different! Especially when it comes to blaming the loner and keeping the loot!
Angelo Mozilo's accussation may not be the issue! Mr Mozilo's organization might have been a part of the financial problem - but only a very very small part!
The fall out and the accussation on an individual might sound soothing - but will expose how the better part of Wall street who created, manipulated and indulged in the excesses (see Fool's Gold by Gillian Tett) and managed to get away with it.
If the accusation on Mr Mozilo is an indication - there is a good chance the high road might get drifted along the countryside and will never take the freeway to Wallstreet!
May be, Just May Be - this time it is NO Different! Especially when it comes to blaming the loner and keeping the loot!
Tuesday, May 12, 2009
Capitalism - Alive and Well!
The effect of Secondary Offerings!
Banks raising close to a couple of hundred billions
Oil & Gas companies raising money
Ford Raising money
Even cash rich Technology raising money!
All in the secondary market which needed thawing a few weeks back!
When even the Queen had difficulty raising less than a couple of Billion!
What to interpret:
The money that is reentering the market is obviously not Retail! As this debt or selected and exclusive share offering is not for the retail.
If this is the smart money – if the current “economic whatever” happened due to money strike – then the strike might be in the early stages of reconciliation!
If the Governments and various national & international agencies helped in trying to stabilize the market the last couple of years – the last few weeks they have not only succeeded in propping up the market – but seems to have enticed to bring the Smart Money back to the dance floor even at an elevated level – by not only increasing their poisonous risk appetite but this time they might engage them in a continuous propping and support given their gyrations in the floor and a possible groping for the bottom!
This secondary offering – happening at such a rapid clip might even help in thwarting any deflationary pressures that was being planned in the back ground of the now steadily fading depression era theatrics!
Yes we are still well within the what they would call a bear market rally and there are indications of similarity to previous ones – but “this time around it is different syndrome” also includes several of the “unusual” elements which might support the “this time around” argument! (the recent term the bears are calling : Cyclical Bull in a secular bear market!!)
Flooding the market with unprecedented amount of new debt/equity after a run up still is supporting the macro economic indicators that will support a steady recovery even if the growth is a few quarter out!
> Spread is still narrowing in the risky end of the spectrum
> Libor headed South of a Whole number and still no indication of change in direction
> Ben slowly changing his weapons of vocabulary by identifying the next phase of eco friendly measures by way of reduced use of trees as they scale down the printing measures!
> Secondary offerings are getting a reasonable bid to cover ratio
> Secondary offerings at this highly propped up values are bought by the people who would actually sell in similar situations
> Obama & Washington slowly getting back to what they are good at – playing politics!
> Stability in the currency market
May be this is not a time to lose guard but certainly not the end of time!
Capitalism is here for at least One more round!
Banks raising close to a couple of hundred billions
Oil & Gas companies raising money
Ford Raising money
Even cash rich Technology raising money!
All in the secondary market which needed thawing a few weeks back!
When even the Queen had difficulty raising less than a couple of Billion!
What to interpret:
The money that is reentering the market is obviously not Retail! As this debt or selected and exclusive share offering is not for the retail.
If this is the smart money – if the current “economic whatever” happened due to money strike – then the strike might be in the early stages of reconciliation!
If the Governments and various national & international agencies helped in trying to stabilize the market the last couple of years – the last few weeks they have not only succeeded in propping up the market – but seems to have enticed to bring the Smart Money back to the dance floor even at an elevated level – by not only increasing their poisonous risk appetite but this time they might engage them in a continuous propping and support given their gyrations in the floor and a possible groping for the bottom!
This secondary offering – happening at such a rapid clip might even help in thwarting any deflationary pressures that was being planned in the back ground of the now steadily fading depression era theatrics!
Yes we are still well within the what they would call a bear market rally and there are indications of similarity to previous ones – but “this time around it is different syndrome” also includes several of the “unusual” elements which might support the “this time around” argument! (the recent term the bears are calling : Cyclical Bull in a secular bear market!!)
Flooding the market with unprecedented amount of new debt/equity after a run up still is supporting the macro economic indicators that will support a steady recovery even if the growth is a few quarter out!
> Spread is still narrowing in the risky end of the spectrum
> Libor headed South of a Whole number and still no indication of change in direction
> Ben slowly changing his weapons of vocabulary by identifying the next phase of eco friendly measures by way of reduced use of trees as they scale down the printing measures!
> Secondary offerings are getting a reasonable bid to cover ratio
> Secondary offerings at this highly propped up values are bought by the people who would actually sell in similar situations
> Obama & Washington slowly getting back to what they are good at – playing politics!
> Stability in the currency market
May be this is not a time to lose guard but certainly not the end of time!
Capitalism is here for at least One more round!
Saturday, May 9, 2009
Waaas Up? Mr Obama!
Mr President while taking on the Press did send a strong message contending to Jay Leno's new Prime time Job!
Creatively Funny! Who ever wrote this deserve an Oscar! delivery was a classic Letterman!
From embarrassing Steele to some serious jabs at Bush and Cheney - sure came pretty low and didnt miss that opportunity to play down and dirty Chicago politics.
If this is just the type of politics we are going to see - there is no reason for late night routines!
And May Be, Just May Be - they might leave the economy to recover on its own and we might after all return to Free market capitalism!!
Creatively Funny! Who ever wrote this deserve an Oscar! delivery was a classic Letterman!
From embarrassing Steele to some serious jabs at Bush and Cheney - sure came pretty low and didnt miss that opportunity to play down and dirty Chicago politics.
If this is just the type of politics we are going to see - there is no reason for late night routines!
And May Be, Just May Be - they might leave the economy to recover on its own and we might after all return to Free market capitalism!!
Thursday, May 7, 2009
Raising Capital! Pump-it UP!
TARP or No TARP!
Bail out or No Bail out!
Stress Test or No Stress Test!
Ben and Tim show with leaks all week about Stress Test! This -so carefully crafted so that the individual stock prices are kept at elevated levels!
$200 Billion plus pumped in through TARP programs and another $200B plus guaranteed by the Tax Payers to show an artifically inflated profits on Banks - while the stock prices kept getting pumped up!
From the lows all these stocks have jumped several hundred percent!
Now on the eve of Stress Test results we have started hearing Banks raising capital through Common shares!! It took less that 60 Days for various agencies and governments to pump these shares in the name of Financial stability!
Yes it is needed!
Encouraging and allowing these Banks to go to the open market to raise capital at this artifically pumped up rates - after being heaviliy dilited by way of Bail out funds??
Is this any different than Pump n Dump during the Dot com era ?
Yes it is need for the economic stability!
Government has already printed money and doled them to these institutes using various terminologies from Stimulus to bailout , from under writing to creative quant easing- just falling short of calling it what it is! Now this?
Right or Wrong - I think this will fix the systemic failure posed by the financial instability and move us back to the classical economic problems! For which we have enough tools to address!
Bail out or No Bail out!
Stress Test or No Stress Test!
Ben and Tim show with leaks all week about Stress Test! This -so carefully crafted so that the individual stock prices are kept at elevated levels!
$200 Billion plus pumped in through TARP programs and another $200B plus guaranteed by the Tax Payers to show an artifically inflated profits on Banks - while the stock prices kept getting pumped up!
From the lows all these stocks have jumped several hundred percent!
Now on the eve of Stress Test results we have started hearing Banks raising capital through Common shares!! It took less that 60 Days for various agencies and governments to pump these shares in the name of Financial stability!
Yes it is needed!
Encouraging and allowing these Banks to go to the open market to raise capital at this artifically pumped up rates - after being heaviliy dilited by way of Bail out funds??
Is this any different than Pump n Dump during the Dot com era ?
Yes it is need for the economic stability!
Government has already printed money and doled them to these institutes using various terminologies from Stimulus to bailout , from under writing to creative quant easing- just falling short of calling it what it is! Now this?
Right or Wrong - I think this will fix the systemic failure posed by the financial instability and move us back to the classical economic problems! For which we have enough tools to address!
TARP and Private Capital? Stresses over Bank Stress Test!
Over $200 Billion pumped into the top 20 Banks by the Government. Another maybe $200 plus billion raised by Banks in teh market by government guarantees in the name of TLGP! WHAAAT the heck is TLGP - thats what she said!
Now after the stress Test the banks need another maybe couple of hundres billion dollars!
All this while the Fed & Treasury are managing carefully how they handle the Government funding of the long end! Yes today's 30 Yr had a little headwind with the Bond Vigilantes- may be only 10-15 basis points - but enough to create a noise - even though the Bid to cove is still a healthy 2.14!
This at the time when UK had difficulty with a couple of billion dollars and rest of the world having a much difficult time raising anything!
Is it the beginning of a change of guard with the fear of inflation seeds being plowed by printing endless amounts of money in the name of financial stability with the help of quantitative easing or just an opportunity for the bond vigilantes to bark at any abberation?
With the banks and the governments taking money on one side and pumping from the other - they are really bringing the survival to the best minds capable of acting the play in a fictional economic stage!
Now after the stress Test the banks need another maybe couple of hundres billion dollars!
All this while the Fed & Treasury are managing carefully how they handle the Government funding of the long end! Yes today's 30 Yr had a little headwind with the Bond Vigilantes- may be only 10-15 basis points - but enough to create a noise - even though the Bid to cove is still a healthy 2.14!
This at the time when UK had difficulty with a couple of billion dollars and rest of the world having a much difficult time raising anything!
Is it the beginning of a change of guard with the fear of inflation seeds being plowed by printing endless amounts of money in the name of financial stability with the help of quantitative easing or just an opportunity for the bond vigilantes to bark at any abberation?
With the banks and the governments taking money on one side and pumping from the other - they are really bringing the survival to the best minds capable of acting the play in a fictional economic stage!
Tuesday, May 5, 2009
Short Selling! Up-tick Rule!!
Who benefits from an up-tick rule?
Watching a brief clip on the SEC hearing on Short selling debate is amazing! General Electric's spokesperson builds an argument on why it should be brought back and Credit Suisse's argument goes on to explain why un-restricted short selling is imperative to bring a balance between buyer and seller in the market!
Mary Schapiro's task at SEC is figuring out how this can been played politically into the hands of a pending global economic recovery!
Stocks as an asset class is getting smaller and smaller in the overall scheme of financial world - even though it is by bar the most influential when it comes to investor sentiment & retail investors. Bonds, Currencies and Treasuries in various forms dwarfs the significance of stock pricing.
Now - short selling a piece of the pie of an insignificant yet influential component - if it can work in a bull market them then there is no reason it cannot work in a bear market- if the assumptions we are making is most of the investment strategy has its time and place! And excess in any one direction has its own penalty.
I am sure we will look at this during a bull market and wonder if there is a rationality for this- like the last time when the authority acted on it!
Shorting like every other strategy on any asset class has its own inherent risks if applied in excess and there is no reason to look at it any differently than any thing else.
Watching a brief clip on the SEC hearing on Short selling debate is amazing! General Electric's spokesperson builds an argument on why it should be brought back and Credit Suisse's argument goes on to explain why un-restricted short selling is imperative to bring a balance between buyer and seller in the market!
Mary Schapiro's task at SEC is figuring out how this can been played politically into the hands of a pending global economic recovery!
Stocks as an asset class is getting smaller and smaller in the overall scheme of financial world - even though it is by bar the most influential when it comes to investor sentiment & retail investors. Bonds, Currencies and Treasuries in various forms dwarfs the significance of stock pricing.
Now - short selling a piece of the pie of an insignificant yet influential component - if it can work in a bull market them then there is no reason it cannot work in a bear market- if the assumptions we are making is most of the investment strategy has its time and place! And excess in any one direction has its own penalty.
I am sure we will look at this during a bull market and wonder if there is a rationality for this- like the last time when the authority acted on it!
Shorting like every other strategy on any asset class has its own inherent risks if applied in excess and there is no reason to look at it any differently than any thing else.
Sunday, May 3, 2009
Blog Surfing & Digital Hunting!
News Print & the Future of News Making!
Listening to a friend of mine the other day who is in the Media enablement business about how the print media and news paper business is suffering made me wonder what can be done differently to revive interest.
As I heard that several news papers around the country are in trouble and the circulation is so bad that they might just shut the operation down makes me want to do something to about it.
It hurts a bit to know that news papers which had been a part of my life for so many decades is finally feeling its age too!
As a crawling kid I was given old papers to scribble and tear – I was told! As I started walking and running - enjoyed the routine of picking up the morning paper for my parents! As age started bringing more refined requirements and needs I had the flexibility to diversify and specialize in reading from professional requirements to local weather patterns. In the last several years a daily refresh of news creation was not just enough for my addiction of reading about what is happening. From local events to international festivities - internet and free internet media enabled me to browse at leisure what ever and when ever about anything.
I sure spend more time reading about everything that I stumble into as there is no structure to what I carry to my breakfast table or my commute train! Driving through and walking around I see the invasion of privacy in the form of digital media and TV in gas station and in Toilets where flat screen panels provide local news from weather patterns to traffic congestions.
Just when I was about to feel a pattern which is trying to retire the traditional news media I was intrigued by something during a Google search which led me into a Blog! A couple of hours later I found myself blog surfing from country to country and about some very fascinating subjects – wood works to city lights and shapes of hand made candles and photos of different shapes of public transportation and on and on …and I couldn’t help but notice that I was being sucked into the blogger’s world with absolutely no need to research or read! Every one of them were very exquisitely articulated and tastefully published- making me feel inadequate! It suddenly occurred to me that we have transformed ourselves into a digital society where we are not bound by what can be packaged and delivered – but have become hunters again!
I started seeing where the news media needs to go if they need to cater to the morphing society!
Digital Hunting and Blog Surfing seems to carve a new form of civilization where new innovation and cultural modifications will become an every day occurrence!
Listening to a friend of mine the other day who is in the Media enablement business about how the print media and news paper business is suffering made me wonder what can be done differently to revive interest.
As I heard that several news papers around the country are in trouble and the circulation is so bad that they might just shut the operation down makes me want to do something to about it.
It hurts a bit to know that news papers which had been a part of my life for so many decades is finally feeling its age too!
As a crawling kid I was given old papers to scribble and tear – I was told! As I started walking and running - enjoyed the routine of picking up the morning paper for my parents! As age started bringing more refined requirements and needs I had the flexibility to diversify and specialize in reading from professional requirements to local weather patterns. In the last several years a daily refresh of news creation was not just enough for my addiction of reading about what is happening. From local events to international festivities - internet and free internet media enabled me to browse at leisure what ever and when ever about anything.
I sure spend more time reading about everything that I stumble into as there is no structure to what I carry to my breakfast table or my commute train! Driving through and walking around I see the invasion of privacy in the form of digital media and TV in gas station and in Toilets where flat screen panels provide local news from weather patterns to traffic congestions.
Just when I was about to feel a pattern which is trying to retire the traditional news media I was intrigued by something during a Google search which led me into a Blog! A couple of hours later I found myself blog surfing from country to country and about some very fascinating subjects – wood works to city lights and shapes of hand made candles and photos of different shapes of public transportation and on and on …and I couldn’t help but notice that I was being sucked into the blogger’s world with absolutely no need to research or read! Every one of them were very exquisitely articulated and tastefully published- making me feel inadequate! It suddenly occurred to me that we have transformed ourselves into a digital society where we are not bound by what can be packaged and delivered – but have become hunters again!
I started seeing where the news media needs to go if they need to cater to the morphing society!
Digital Hunting and Blog Surfing seems to carve a new form of civilization where new innovation and cultural modifications will become an every day occurrence!
Friday, May 1, 2009
In the Middle of Pandemic & Economic Whatever!
After close to 18 months of continuous coverage of Economic events during the first 10 minutes in every news segment by every channel 7x24 it was interesting to see what is getting mind share of the press!
What’s hitting the headlines in the first 5 minutes of Morning News:
CNBC:
Warren Buffet: Its no longer Economic Pearl Harbor
Paul Volker: We have hit bottom & we no longer need additional stimulus package
ABC: YouTube helps deliver Baby!
CBS Local: Jerry Brown’s( California AG,ex GOV, possible future GOV) Wheel stolen; He has posted on his Facebook about his new replacement and he is mobile now!
AP: Animals and Birds also shake their booties for Music!
MSNBC: First Dog Duties
CNN: Recommends Elbow bump instead of handshake to avoid spreading of Honey Flu, during their Pandemic headline coverage
Fox News: Most Valuable Mom: Pro football player’s mom launching a Kitchen TV program
KRON 4: Why the Swine Flu vaccine was stopped from circulation
What’s hitting the headlines in the first 5 minutes of Morning News:
CNBC:
Warren Buffet: Its no longer Economic Pearl Harbor
Paul Volker: We have hit bottom & we no longer need additional stimulus package
ABC: YouTube helps deliver Baby!
CBS Local: Jerry Brown’s( California AG,ex GOV, possible future GOV) Wheel stolen; He has posted on his Facebook about his new replacement and he is mobile now!
AP: Animals and Birds also shake their booties for Music!
MSNBC: First Dog Duties
CNN: Recommends Elbow bump instead of handshake to avoid spreading of Honey Flu, during their Pandemic headline coverage
Fox News: Most Valuable Mom: Pro football player’s mom launching a Kitchen TV program
KRON 4: Why the Swine Flu vaccine was stopped from circulation
Thursday, April 30, 2009
Funding CDC for an Epidemic?
WHO just raised the alert level to a close to dangerous 5!
Not to trivialize the importance of the current crisis – but couldn’t help but just see how we are handling the current crisis using technology & may be – JUST MAY BE , Google might help in raising money for CDC & healthcare!
Listening to the Live feed from CDC on CNN the Acting CDC Director mentioned among other important things – How they are communicating and keeping up with events happening so rapidly! Some data
4000 Phone calls
2000 emails
6-7 million hits on their website
Started Web-casting
Started Twitting!!
Just upgraded the CDC servers.
Now this is a number any website would drool to get- May be JUST MAY BE CDC should start advertising using the GOOGLE engine with that kind of numbers- and May be JUST MAY BE – CDC might be able to fund most of its requirements very quickly!!
Not to trivialize the importance of the current crisis – but couldn’t help but just see how we are handling the current crisis using technology & may be – JUST MAY BE , Google might help in raising money for CDC & healthcare!
Listening to the Live feed from CDC on CNN the Acting CDC Director mentioned among other important things – How they are communicating and keeping up with events happening so rapidly! Some data
4000 Phone calls
2000 emails
6-7 million hits on their website
Started Web-casting
Started Twitting!!
Just upgraded the CDC servers.
Now this is a number any website would drool to get- May be JUST MAY BE CDC should start advertising using the GOOGLE engine with that kind of numbers- and May be JUST MAY BE – CDC might be able to fund most of its requirements very quickly!!
Chrysler: Systemic Risk or Too much of "A Biggest Little Car" Company to Fail?
Warm and cozy in a negotiation table with the outcome pre-determined by the mediating team!
Intervention or Tipping Point?
Chrysler: Surgical Bankruptcy with a imminent protection and backing of Chrysler by the White House and the Administration.
All in the name of National Interest?
Yes, it is a Legacy!
Yes, its that little company that CAN!
Yes, Its that Phoenix that came out of Detroit!
Yes, its that company that once was adopted by Mercedes!
A National Interest?
With the Administration being very vocal about what outcome they are interested in - A Big haircut for the Bond Holders- clearly didn't take the impartial middleman role!
This at a time when the Government participation is heavily criticized and questioned regarding its heavy handedness in how it is handling the Economic Welfare of the country - by way of setting Management standards - from salary structure to policy polarization, is entering a very nebulous area.
Rationality for Chrysler debacle-
Is it National pride or interest?
Is it another Too Big to Fail Syndrome?
Or is it just a little political game being carefully orchestrated which hides the pentup Anger of a few?
What ever it is - we are now in the verge of extending the political participation beyond Government lending a hand!
Attention Business School OWNERS: Time to CHANGE your curriculum!
Intervention or Tipping Point?
Chrysler: Surgical Bankruptcy with a imminent protection and backing of Chrysler by the White House and the Administration.
All in the name of National Interest?
Yes, it is a Legacy!
Yes, its that little company that CAN!
Yes, Its that Phoenix that came out of Detroit!
Yes, its that company that once was adopted by Mercedes!
A National Interest?
With the Administration being very vocal about what outcome they are interested in - A Big haircut for the Bond Holders- clearly didn't take the impartial middleman role!
This at a time when the Government participation is heavily criticized and questioned regarding its heavy handedness in how it is handling the Economic Welfare of the country - by way of setting Management standards - from salary structure to policy polarization, is entering a very nebulous area.
Rationality for Chrysler debacle-
Is it National pride or interest?
Is it another Too Big to Fail Syndrome?
Or is it just a little political game being carefully orchestrated which hides the pentup Anger of a few?
What ever it is - we are now in the verge of extending the political participation beyond Government lending a hand!
Attention Business School OWNERS: Time to CHANGE your curriculum!
Tuesday, April 28, 2009
Please , Please Mr Balmer!
Balmer's PINK needs to be better than the PINK clad supermodels from Victoria's Secret if they have to steal the innovation that is emerging around the cell phone life style created by Jobs and Apple fast followed by Google and Palm.
It is not just a better phone that is selling – it is creating an eco-system around the emerging wireless generation that is redefining the way we communicate, socialize & entertain as an individual/business entity that is winning.
This new way of thinking forms the basis for creating new products from development cycle – packaging – pricing & distribution to support & services – from consumers to corporate corridors – and is getting the attention. Fast fading are the days when applications were spun around device capabilities – we are entering a new era where usability and human interface with emerging social lifestyle will define how the devices will be built. Force feeding a word processor and spreadsheet in every device that is electronics model developed by the previous generation's vision of computer in a home will have a tough time adopting to the new wave of simplified single purpose applications developed by an innovative platform – which is Internet! Please, Please Mr Balmer – Surprise the world for a change!
It is not just a better phone that is selling – it is creating an eco-system around the emerging wireless generation that is redefining the way we communicate, socialize & entertain as an individual/business entity that is winning.
This new way of thinking forms the basis for creating new products from development cycle – packaging – pricing & distribution to support & services – from consumers to corporate corridors – and is getting the attention. Fast fading are the days when applications were spun around device capabilities – we are entering a new era where usability and human interface with emerging social lifestyle will define how the devices will be built. Force feeding a word processor and spreadsheet in every device that is electronics model developed by the previous generation's vision of computer in a home will have a tough time adopting to the new wave of simplified single purpose applications developed by an innovative platform – which is Internet! Please, Please Mr Balmer – Surprise the world for a change!
Saturday, April 25, 2009
Economic Calmness!
Another corporate earnings season comes and goes!
Only this time around the fall is cushioned with another expectation mishap - Favorably?
Media headlines are backing up with the usual entertainment driven attention grabbers as they start moving away from interviews of every day economists & financial advisors! Late night comedians are finding political materials easily to divert the economic monotony of the past couple of years.
As China finds its way into loading up with Gold - the bullion market is still less appetizing as an inflation diet!
With Euro and Pound finding a more manageable intermediate balancing act - Dollar looks like it has managed to hold most of its recent reversals. Quantitative Easing - from Developed economies to emerging ones - having less and less meaning for the theorists.
May be the governing agencies of the post Industrial world has found a temporary antidote to appease the force behind the financial revolt that was eroding the confidence of the haves?
A few more weeks of reduced political gaffes between policy makers and public agencies around the world to neutralize the modern economic vigilantes who were close becoming pirates of the technological & synthetic currencies to destabilize the prosperity induced harmony - may be this Economic calmness will be here for some time as it starts leaving room for more understandable economic cycles!
Only this time around the fall is cushioned with another expectation mishap - Favorably?
Media headlines are backing up with the usual entertainment driven attention grabbers as they start moving away from interviews of every day economists & financial advisors! Late night comedians are finding political materials easily to divert the economic monotony of the past couple of years.
As China finds its way into loading up with Gold - the bullion market is still less appetizing as an inflation diet!
With Euro and Pound finding a more manageable intermediate balancing act - Dollar looks like it has managed to hold most of its recent reversals. Quantitative Easing - from Developed economies to emerging ones - having less and less meaning for the theorists.
May be the governing agencies of the post Industrial world has found a temporary antidote to appease the force behind the financial revolt that was eroding the confidence of the haves?
A few more weeks of reduced political gaffes between policy makers and public agencies around the world to neutralize the modern economic vigilantes who were close becoming pirates of the technological & synthetic currencies to destabilize the prosperity induced harmony - may be this Economic calmness will be here for some time as it starts leaving room for more understandable economic cycles!
Queen Sends a Messenger
Reproduced from 4th March 2009 Posting during British Prime Minister Gordon Brown's visit to America.
Queen sends a messenger!
Not since the Imminent End of the End of the British Empire did the Queen send someone to this side of the Atlantic.
Mr. Brown in his address to the US Senate-Congress offered a generous bag of goodies from the Queen-
- A Gratitude for the American Soldiers sacrificed in the European continent-really emotional when narrating the Normandy!
- An acknowledgement for the magnanimity of the American leaders in supporting England and the Good in fighting Evil powers! (Oops must be Germany!)
- An offer to renew the multi-decade marriage between England & America to protect the endangered world from the evil forces, once again!
And aah- the sack was still full of goodies – including a Knightwood to the Great American!
A pence too weak and a pound too rich for the recently Knighted American congressman – Sir Edward Kennedy, as his brethren once said Why did the Kennedys come to America- only the Queen knows and Yes indeed she did drive them out of the continent to reach for the new found land! And talking of economy and the missteps of the world in embracing CDOs and the other esoteric financial weapons- which has the World in this mess, he memory failed to serve him a bit on the details – how for close to a decade Mr Brown himself had the privilege of serving Her Majesty in writing the checkbook for Her Kingdom and overseeing the creation of the very instruments from the shores of Thames!
While comparing Mr O to the Roosevelts, Reagans and the Obamas of the world who made this world a safe and secure place- he did want Mr Obama to Join the Queen to once again fight the Bad!
Its either the Queen was offended from Hillary skipping a continent or the smell from Thames is turning red- that has made this travel a priority for the Queen!Or is it just the Cat fight that is brewing with Ms Merkel and Ms Clinton trying to steal the Throne away from the Queen, either way as any smart person would quip “Indeed we are in an Un-chartered Territory, and Her Majesty Knows it NOW!! Please call Mr.Bond – as Her Majesty needs his service”
Since Mr Q has retired may be Mr Bond could use the services of Mr O thought Her Majesty in sending Mr Brown!
Queen sends a messenger!
Not since the Imminent End of the End of the British Empire did the Queen send someone to this side of the Atlantic.
Mr. Brown in his address to the US Senate-Congress offered a generous bag of goodies from the Queen-
- A Gratitude for the American Soldiers sacrificed in the European continent-really emotional when narrating the Normandy!
- An acknowledgement for the magnanimity of the American leaders in supporting England and the Good in fighting Evil powers! (Oops must be Germany!)
- An offer to renew the multi-decade marriage between England & America to protect the endangered world from the evil forces, once again!
And aah- the sack was still full of goodies – including a Knightwood to the Great American!
A pence too weak and a pound too rich for the recently Knighted American congressman – Sir Edward Kennedy, as his brethren once said Why did the Kennedys come to America- only the Queen knows and Yes indeed she did drive them out of the continent to reach for the new found land! And talking of economy and the missteps of the world in embracing CDOs and the other esoteric financial weapons- which has the World in this mess, he memory failed to serve him a bit on the details – how for close to a decade Mr Brown himself had the privilege of serving Her Majesty in writing the checkbook for Her Kingdom and overseeing the creation of the very instruments from the shores of Thames!
While comparing Mr O to the Roosevelts, Reagans and the Obamas of the world who made this world a safe and secure place- he did want Mr Obama to Join the Queen to once again fight the Bad!
Its either the Queen was offended from Hillary skipping a continent or the smell from Thames is turning red- that has made this travel a priority for the Queen!Or is it just the Cat fight that is brewing with Ms Merkel and Ms Clinton trying to steal the Throne away from the Queen, either way as any smart person would quip “Indeed we are in an Un-chartered Territory, and Her Majesty Knows it NOW!! Please call Mr.Bond – as Her Majesty needs his service”
Since Mr Q has retired may be Mr Bond could use the services of Mr O thought Her Majesty in sending Mr Brown!
Thursday, April 23, 2009
Facebook Conundrum!
Watching news on CNN saw the clip on Obama 100 Days analysis. In that Cafferty file segment requested viewers to post their assessment on CNN website for an incentive of being read on live TV.. My heart started racing. I have been working on the changes that will bring America on top AGAIN.. And I have started collecting anecdotal evidences along with some policy shifts to support that. I have been calling it America 2.0...now suddenly I am seeing an opportunity to push America 2.0 on air..yet I am not ready. Being Opinionated yet opportunistic now I am thinking if I am cute I might be able to get my views aired on air and might get played over and over and over and... ! I go to work. Go get a couple of Blogs going under America 2.0.. Ten minutes later I have my assessment on the subject, decide on what might get the attention and post a crisp four liner - long enough to convey something yet short enough to get the attention! Click! Now its Tick .. Tick .. Tick and Click time to see if it gets the attention. No it is waiting for moderator intervention. Tick..tick.. tick (waiting time) and click ( refresh button time). Nope its still waiting on moderator. Commercial on CNN ... I am nervous to change channel as I don't want to miss that moment when they read my email on TV! And America 2.0 going national!! Decide to see through the commercial... While I tick.. tick..tick..and click again! Now there are 142 responses but mine is still on Tick.. Tick..tick and Click mode..ten minutes later CNN decides to read some mails...anxiously watching. No! No fame this time! A bit disappointment! Go back to website to see..still on Tick.. Tick..Tick and Click mode! Now its up to 300 responses! Well I decide to move on after having wasted about 30 odd minutes!
This morning as I was flipping through channels, again I stop at CNN - only this time the news was interesting.. Its about getting hooked on to and addicted to Facebook. A Medical expert was there addressing how people are addicted to Facebook some extreme cases spending 15 odd hours a day on Facebook and the expert was recommending on how people can address this addiction to Facebook! Now I am really thinking....may be I will go and post this on my Blog!
And thank God for innovation..between interruptions I could actually post it straight from my Blackberry without any computer or waiting through commercial breaks! As I get ready to Click my Blackberry something odd crossed my mind on what I was about to do...I guess the conundrum extends beyond Facebook without labeling and I am stuck in it too!!!
Wednesday, April 22, 2009
AMERICA 2.0! Healthcare
MODERNIZING HEALTHCARE – Mr. President’s Prescription?
Is social healthcare all about providing insurance for 50 plus million American people with no coverage? Is this a mechanism to marginalize the compensation for this high stress high skill precision services industry? Or a way to remove redundancy in a complex mostly underwritten yet very regulated insurance driven industry? Or is it about new means of Healthcare Delivery which brings responsibility to a very complex service driven yet thankless industry at the same time bringing capitalistic innovation for a new and cost effective healthcare to all human beings- bringing services to where it is needed and when it is needed without compromising quality, capability or compensation for the services. It certainly looks like one of those too good to believe strategy.
Healthcare Delivery need not be about reducing patient care or money to every provider in the health care system.
Looking at how the current day participants - patient, doctor, employer, hospitals, governments - state and central, medical device manufacturers and pharmaceutical companies and insurance providers could change to act responsibly without giving up on free market principles – sheds light on the efficiency a change could bring to this industry.In the current setup If a person is insured either through eligible employment or through dependency coverage or through other state or government programs - most likely the following scenario happens.From dental to vision to any doctor’s or hospital visit the concern is not about what the cure is or the cost of service is - it is more about what the out of pocket expenses are. From a providers perspective it is more about what the individual’s eligibility is and not about what the best available service is.
PHARMACEUTICALS:
Statins- 40B in revenue and growing and there is no reason for them to lower the cost for several years. Avastin - has the ability to extend the end of life by a few months in conjunction with other expensive cancer treatments for a total cost of 50K. Every person eventually gets into a lifestyle drug to address some form of age related degeneration or lifestyle induced ailment. As the cost of administering is paid by a third party - insurance which in turn is either provided by the employer or the government in most of the cases( 90% of total healthcare expenses for an individual is towards the last 6 months of life & most of the people at that stage is covered by government policies) - it is very easy to adjust to a cocktail of pills every day without adjusting or making an attempt for a change in lifestyle.
This relieves the individuals from the responsibility of putting pressure for a cure. This kind of lifestyle encourages the pharmaceuticals to create lipitors and avastins which does not attempt to cure the disease but provide life enhancing mechanisms by curing symptoms and incremental solutions. It is the equivalent of Software As A Service- Drugs As A Service?? Imagine having a Tylenol for fixing blood-pressure or diabetes or cholesterol – or on the other end imagine taking a daily pill for the rest of the life for a head ache?
The incentive should be to find medicines to cure ailments and not to address symptoms on an incremental basis- making lifestyle addiction, both physically and psychologically, to a basket of pills.
EQUIPMENT MANUFACTURERS
The next element is equipments and tools that are used in hospitals from MRI to EKGs. Every manufacturing industry from automobiles to semiconductors the common theme is increased capabilities and price compression- in medical GEs and siemens of the world have failed in its responsibility in using the same fundamentals like every other industry - if high tech principle is used today an million plus MRI equipment will be a portable device which will be given away for a couple of bucks.
By keeping costs high it limits the applicability of the device. If you take Intuitive Surgical’s Davinci robotics tool which is million plus - in addition to providing cost effective alternate procedures using minimally invasive operations - it actually increases the odds of survival by a huge factor. The cost makes it very difficult for all hospitals and clinics to afford it and also keeps the skills needed at artificially high levels. By expanding the reach of such equipments and devices we can increase the demand and also provide an inexpensive solution – which will reduce the overall hospital care cost.
HOSPITALS & CLINICS
Either by design or by carefully planned public policies – the states and cities are drawn out to have sparsely populated communities extending to the wide corners of the country- excluding a few major cities. This kind of development makes it economically impossible to have a total healthcare package available in every city and neighborhood. The latest in medical innovation is available to densely populated communities – making it either expensive or untimely to offer services in most of the smaller cities. By adopting a combination of connected clinics with sophisticated tele-medicine we can provide most of the latest development in every corner irrespective of the market size- this will enable the prices of newer innovations to come down dramatically and also have more and more companies entering the market as this will actually address the total population irrespective of the size of individual communities.
Looking at a Wal-Mart’s clinic where most of the day to day medical requirements are available by Telemedicine - it is not just the cost that is important –
- Where it is available
- What it takes to provide services
-increase the productivity of specialist and reach of the specialists to every corner without need for size of area or market
- by easy access to clinics with little cycle time most of the ailments can be detected at a very early stage thus reducing cost both from a productivity standpoint and also from a healthcare point of view.
CORPRATE ADVANTAGES
Moving cost away from the company's structure brings reality to actual pay scale for every position in the company. As the insurance premium is based on average age, size of organization and overall health habits of the employees and their families - the average cost becomes a base wage for every position irrespective of the competitive position of the company's product or service offering. This also gives undue advantage for large companies over smaller rivals as smaller companies end up either paying more or offering less choices to its employees. This movement of cost away from the company enables organizations to focus on products and services and attract talent and contain their costs competitively. From an employee’s perspective - they are able to pick and choose their jobs based on their interest and capability. This indirectly reduces discrimination on prospective candidates based on the individual’s health history. In the long run it pushes the responsibility on the individual which brings more awareness and responsibility to develop healthy habits and eventually bring down cost of patient care. This gives more flexibility for companies to provide different ways to educate and provide a healthy environment for the employees.
INDIVIDUAL & CORPORATE CONTRIBUTIONS
Once the organizations are relieved of the cost overhangs from the insurance subsidies – they have lot of leverage and flexibility to offer better and healthier environment to bring awareness about healthy lifestyles and better medical practices amongst its employees.
Recently Cisco dedicated a huge building for health and exercise with a resident doctor and a full service clinic. At the outset it looks like a PR ploy by the HR Dept. Digging deeper we can see how it can change lifestyle and cost behavior.By offering such a service it enables the employees to use it at the earliest symptoms of any ailments.
This reduces the healthcare costs in several ways-
1- reduces the number of sickness related absenteeism
2- reduces spreading to fellow employees
3- reduces the cure cost as it is found early
4- also reduces the insurance premiums
INSURANCE
Looking at insurance- every person carries insurance from the moment they are conceived. Most of the healthy persons do not start developing any ailments till in their 50s. With a job no issue as the company picks it up. Let us say no job- insurance is impossible to get as the person falls in the high risk category. Now what ever happened to the 50 plus years of low risk period during which the individual carried insurance? Even car insurance offers good driver credit and no accident reduction - doesn't it make sense that if an individual carried a good health for 50 plus years should get something in return?
TECHNOLOGY
As technology is evolving at a rapid clip – from wireless to collaborative innovations – it is very easy to find ways to offer very sophisticated healthcare system that will bring responsibility and accountability to every level of the healthcare supply chain – enabling lowered/affordable yet uncompromising services to everyone without commoditizing and marginalizing the service providers. On an average for every 10 minutes of patient time spent by a doctor 20 plus minutes is spent on non-patient time. BY bringing innovative processes and technology this ratio can be adjusted favorably helping both the patient cost and increasing the productivity of the doctors – without compromising the quality of service or the compensation structure.
GOVERNMENT AGENCIES
Acting as a responsible regulator the government can ensure free market forces to provide a healthy yet capitalistic and creative services driven healthcare. By being a pioneer in implementing a broad base health system this will expand the American corporate global market share significantly as they will innovate and deliver more cost effective yet revolutionary products and services which will be sought after globally. This would bring back market leadership to most of the companies which have been losing market share to either low cost generics or to low cost manufacturing bases.
By bringing new innovation and bring responsibility to every participant of the healthcare system – it will also reduce the cost of insurance both for patient care and malpractice alike.
Is social healthcare all about providing insurance for 50 plus million American people with no coverage? Is this a mechanism to marginalize the compensation for this high stress high skill precision services industry? Or a way to remove redundancy in a complex mostly underwritten yet very regulated insurance driven industry? Or is it about new means of Healthcare Delivery which brings responsibility to a very complex service driven yet thankless industry at the same time bringing capitalistic innovation for a new and cost effective healthcare to all human beings- bringing services to where it is needed and when it is needed without compromising quality, capability or compensation for the services. It certainly looks like one of those too good to believe strategy.
Healthcare Delivery need not be about reducing patient care or money to every provider in the health care system.
Looking at how the current day participants - patient, doctor, employer, hospitals, governments - state and central, medical device manufacturers and pharmaceutical companies and insurance providers could change to act responsibly without giving up on free market principles – sheds light on the efficiency a change could bring to this industry.In the current setup If a person is insured either through eligible employment or through dependency coverage or through other state or government programs - most likely the following scenario happens.From dental to vision to any doctor’s or hospital visit the concern is not about what the cure is or the cost of service is - it is more about what the out of pocket expenses are. From a providers perspective it is more about what the individual’s eligibility is and not about what the best available service is.
PHARMACEUTICALS:
Statins- 40B in revenue and growing and there is no reason for them to lower the cost for several years. Avastin - has the ability to extend the end of life by a few months in conjunction with other expensive cancer treatments for a total cost of 50K. Every person eventually gets into a lifestyle drug to address some form of age related degeneration or lifestyle induced ailment. As the cost of administering is paid by a third party - insurance which in turn is either provided by the employer or the government in most of the cases( 90% of total healthcare expenses for an individual is towards the last 6 months of life & most of the people at that stage is covered by government policies) - it is very easy to adjust to a cocktail of pills every day without adjusting or making an attempt for a change in lifestyle.
This relieves the individuals from the responsibility of putting pressure for a cure. This kind of lifestyle encourages the pharmaceuticals to create lipitors and avastins which does not attempt to cure the disease but provide life enhancing mechanisms by curing symptoms and incremental solutions. It is the equivalent of Software As A Service- Drugs As A Service?? Imagine having a Tylenol for fixing blood-pressure or diabetes or cholesterol – or on the other end imagine taking a daily pill for the rest of the life for a head ache?
The incentive should be to find medicines to cure ailments and not to address symptoms on an incremental basis- making lifestyle addiction, both physically and psychologically, to a basket of pills.
EQUIPMENT MANUFACTURERS
The next element is equipments and tools that are used in hospitals from MRI to EKGs. Every manufacturing industry from automobiles to semiconductors the common theme is increased capabilities and price compression- in medical GEs and siemens of the world have failed in its responsibility in using the same fundamentals like every other industry - if high tech principle is used today an million plus MRI equipment will be a portable device which will be given away for a couple of bucks.
By keeping costs high it limits the applicability of the device. If you take Intuitive Surgical’s Davinci robotics tool which is million plus - in addition to providing cost effective alternate procedures using minimally invasive operations - it actually increases the odds of survival by a huge factor. The cost makes it very difficult for all hospitals and clinics to afford it and also keeps the skills needed at artificially high levels. By expanding the reach of such equipments and devices we can increase the demand and also provide an inexpensive solution – which will reduce the overall hospital care cost.
HOSPITALS & CLINICS
Either by design or by carefully planned public policies – the states and cities are drawn out to have sparsely populated communities extending to the wide corners of the country- excluding a few major cities. This kind of development makes it economically impossible to have a total healthcare package available in every city and neighborhood. The latest in medical innovation is available to densely populated communities – making it either expensive or untimely to offer services in most of the smaller cities. By adopting a combination of connected clinics with sophisticated tele-medicine we can provide most of the latest development in every corner irrespective of the market size- this will enable the prices of newer innovations to come down dramatically and also have more and more companies entering the market as this will actually address the total population irrespective of the size of individual communities.
Looking at a Wal-Mart’s clinic where most of the day to day medical requirements are available by Telemedicine - it is not just the cost that is important –
- Where it is available
- What it takes to provide services
-increase the productivity of specialist and reach of the specialists to every corner without need for size of area or market
- by easy access to clinics with little cycle time most of the ailments can be detected at a very early stage thus reducing cost both from a productivity standpoint and also from a healthcare point of view.
CORPRATE ADVANTAGES
Moving cost away from the company's structure brings reality to actual pay scale for every position in the company. As the insurance premium is based on average age, size of organization and overall health habits of the employees and their families - the average cost becomes a base wage for every position irrespective of the competitive position of the company's product or service offering. This also gives undue advantage for large companies over smaller rivals as smaller companies end up either paying more or offering less choices to its employees. This movement of cost away from the company enables organizations to focus on products and services and attract talent and contain their costs competitively. From an employee’s perspective - they are able to pick and choose their jobs based on their interest and capability. This indirectly reduces discrimination on prospective candidates based on the individual’s health history. In the long run it pushes the responsibility on the individual which brings more awareness and responsibility to develop healthy habits and eventually bring down cost of patient care. This gives more flexibility for companies to provide different ways to educate and provide a healthy environment for the employees.
INDIVIDUAL & CORPORATE CONTRIBUTIONS
Once the organizations are relieved of the cost overhangs from the insurance subsidies – they have lot of leverage and flexibility to offer better and healthier environment to bring awareness about healthy lifestyles and better medical practices amongst its employees.
Recently Cisco dedicated a huge building for health and exercise with a resident doctor and a full service clinic. At the outset it looks like a PR ploy by the HR Dept. Digging deeper we can see how it can change lifestyle and cost behavior.By offering such a service it enables the employees to use it at the earliest symptoms of any ailments.
This reduces the healthcare costs in several ways-
1- reduces the number of sickness related absenteeism
2- reduces spreading to fellow employees
3- reduces the cure cost as it is found early
4- also reduces the insurance premiums
INSURANCE
Looking at insurance- every person carries insurance from the moment they are conceived. Most of the healthy persons do not start developing any ailments till in their 50s. With a job no issue as the company picks it up. Let us say no job- insurance is impossible to get as the person falls in the high risk category. Now what ever happened to the 50 plus years of low risk period during which the individual carried insurance? Even car insurance offers good driver credit and no accident reduction - doesn't it make sense that if an individual carried a good health for 50 plus years should get something in return?
TECHNOLOGY
As technology is evolving at a rapid clip – from wireless to collaborative innovations – it is very easy to find ways to offer very sophisticated healthcare system that will bring responsibility and accountability to every level of the healthcare supply chain – enabling lowered/affordable yet uncompromising services to everyone without commoditizing and marginalizing the service providers. On an average for every 10 minutes of patient time spent by a doctor 20 plus minutes is spent on non-patient time. BY bringing innovative processes and technology this ratio can be adjusted favorably helping both the patient cost and increasing the productivity of the doctors – without compromising the quality of service or the compensation structure.
GOVERNMENT AGENCIES
Acting as a responsible regulator the government can ensure free market forces to provide a healthy yet capitalistic and creative services driven healthcare. By being a pioneer in implementing a broad base health system this will expand the American corporate global market share significantly as they will innovate and deliver more cost effective yet revolutionary products and services which will be sought after globally. This would bring back market leadership to most of the companies which have been losing market share to either low cost generics or to low cost manufacturing bases.
By bringing new innovation and bring responsibility to every participant of the healthcare system – it will also reduce the cost of insurance both for patient care and malpractice alike.
AMERICA 2.0! ENERGY
America 2.0! : Energy
Rebuilding Industrial supremacy:
Clean/Renewable energy: Can this really change the competitive position of America in building the 2.0 version of American Industries? Looking at the root of Industrialization we will see if energy is transformed from how we produce, how we use and how we distribute – and have the added capability to store & forward the generated energy – we will bring every manufactured product whether it is consumer or industrial – back to the drawing table – as all products will have to be re-engineered to adopt to the new energy model.
In the last phase of Industrialization – what took a country to be a manufacturing super power depended on capability to produce Industrial Power, Water & labo. Post WWII US and Europe helped Japan & China acquire that capability. In today’s economy America has lost those two competitive advantages & is dragging itself down by moving its base to low labor cost locations. By changing the way we produce & consume energy – this can be brought back to America as every other economy will be forced to license the technology from American companies which owns the technology & IP. This will give way for massive innovation in America and will bring every lost industry back to America 2.0
What changes need to happen, which appear very doable based on how the Obama train is bull dozing its change platform in rebuilding America.
- Generation: How we generate power. In modern Industrial word the most effective form of generation is Nuclear – which is very highly controlled and managed by the select few. Raw material is expensive & dangerous- and need very proprietary technology.
- Capability to generate in incremental quantities: Given the amount of time, money & resources needed to build a plant – it is difficult to quickly plan and have something up and running – if the technology is there to build a generation capability in incremental quantities – the implications are amazing as we would see less lead time to produce… and locations will be a non-issue.
- rebuild the power grid: with incremental power generation a modified grid could enable users to draw or give power based on daily need.
- Incentive to save and forward for money back: This provides motivation for people to conserve energy.
- motivation to localize generation: by localizing power the cost of distribution is reduced.
- Capability to store generated power: today use or lose power technology makes it very difficult to build low cost remote site generation of power using solar or wind. With innovative ways to store and forward for later consumption will bring raw material needed for generation insignificant & affordable.
- Capability to go wireless: wireless is not very far fetched as the other components of new energy foot print takes hold – this will reduce the dependence of complicated grids – from generation to provisioning.
Impact goes beyond lowering power cost
- From automobile to airplanes they need to be rebuilt
- From homes to commercial buildings they need to be retrofitted
- Transportation model will change
- levels any competitive advantages that were exported to low cost manufacturing locations and brings back both innovation and pricing back to American companies
- From consumer durables to consumer electronics everything will take a new shape, form and innovations
- Industrial and manufacturing will change dramatically as the generation, storage, distribution and consumption of power will totally change everything that is being done.
May be Exxon will buy GM and give the cars for free to convince people to use gasoline!
Rebuilding Industrial supremacy:
Clean/Renewable energy: Can this really change the competitive position of America in building the 2.0 version of American Industries? Looking at the root of Industrialization we will see if energy is transformed from how we produce, how we use and how we distribute – and have the added capability to store & forward the generated energy – we will bring every manufactured product whether it is consumer or industrial – back to the drawing table – as all products will have to be re-engineered to adopt to the new energy model.
In the last phase of Industrialization – what took a country to be a manufacturing super power depended on capability to produce Industrial Power, Water & labo. Post WWII US and Europe helped Japan & China acquire that capability. In today’s economy America has lost those two competitive advantages & is dragging itself down by moving its base to low labor cost locations. By changing the way we produce & consume energy – this can be brought back to America as every other economy will be forced to license the technology from American companies which owns the technology & IP. This will give way for massive innovation in America and will bring every lost industry back to America 2.0
What changes need to happen, which appear very doable based on how the Obama train is bull dozing its change platform in rebuilding America.
- Generation: How we generate power. In modern Industrial word the most effective form of generation is Nuclear – which is very highly controlled and managed by the select few. Raw material is expensive & dangerous- and need very proprietary technology.
- Capability to generate in incremental quantities: Given the amount of time, money & resources needed to build a plant – it is difficult to quickly plan and have something up and running – if the technology is there to build a generation capability in incremental quantities – the implications are amazing as we would see less lead time to produce… and locations will be a non-issue.
- rebuild the power grid: with incremental power generation a modified grid could enable users to draw or give power based on daily need.
- Incentive to save and forward for money back: This provides motivation for people to conserve energy.
- motivation to localize generation: by localizing power the cost of distribution is reduced.
- Capability to store generated power: today use or lose power technology makes it very difficult to build low cost remote site generation of power using solar or wind. With innovative ways to store and forward for later consumption will bring raw material needed for generation insignificant & affordable.
- Capability to go wireless: wireless is not very far fetched as the other components of new energy foot print takes hold – this will reduce the dependence of complicated grids – from generation to provisioning.
Impact goes beyond lowering power cost
- From automobile to airplanes they need to be rebuilt
- From homes to commercial buildings they need to be retrofitted
- Transportation model will change
- levels any competitive advantages that were exported to low cost manufacturing locations and brings back both innovation and pricing back to American companies
- From consumer durables to consumer electronics everything will take a new shape, form and innovations
- Industrial and manufacturing will change dramatically as the generation, storage, distribution and consumption of power will totally change everything that is being done.
May be Exxon will buy GM and give the cars for free to convince people to use gasoline!
About Economy ....
This is reproduced from a response to the current economic climate I posted on 1st March 2009:
At the risk of being correct (yes- being correct!! Given the current setup this is a low probability case) let me start by hedging my answers with a convoluted but sincere effort in articulating my thoughts on a possible solution for this conundrum before predicting where we are or where we might go from here!
In a society with socio economic imbalances, it is imperative to have a medium of transaction that will accommodate the imperfections exaggerated by technological gaps between various participating economies thus reducing the capabilities of concentrated ideologies to influence and unduly benefit from sheer econometric manipulations!! The authority to define, execute and police this new medium has to be of supreme nature in by in itself being its sole mission. May be we are not yet ready for this change - however there are symptoms that indicate for such a transition to happen in incremental steps which will ease us from this economic slavery- bringing uniformity with conformity in every process (with objectivity) bringing the much needed beacon of hope with a field glass view to every player that defines the scope of economic priorities for every one else. This could possibly bring capitalism to its true intended form bringing equality among unequal
players yet setting aside any possibility for socialistic or authoritarian communistic tendencies.
Now that I have got that out of the way –
I think the US economy has started turning around (market may trail by a couple quarters even longer as common shares as an asset/investment class will be replaced more and more by other types of instruments). USA will be followed by Germany, China and possibly GB. The casualties will be the rest of Europe and possibly Japan.
Reasons:
1.if you believe in Economics as the TRUE WMD - the countries that will recover first will be those with capabilities to influence and benefit from the movement of blue shifted capital.
2. The vultures and the hyenas will move for easier kill in weaker economies (rest of Europe including France Italy Spain and Sweden) leaving the stronger ones to slowly recover.
3. Credit flow will resume once the fixed income players find it difficult to fight the larger economies and settle for lesser return and more glory/power.
4. USA and Germany will emerge into an economic force once again, however temporary they might be, taking advantage of new emerging industries with pricing power while protectionism will be old fashion again with resumption of material and capital flow across the globe- enabling emerging and weaker economies to participate in the recovery with a time lag.
Indications supporting this:
1. US pumping money into areas that will either create new industries or reinvent a lost matured industry to recapture its pricing power.
2. EU and Euro losing its luster
3. The hyenas and the vultures circling Eastern Europe and other weaker economies leaving the stronger ones( US and Germany) to heal.
4. Japan slowly losing its mysterious strength of the past decade with smart money fading away from Yen and Japan.
5. China slowly emerging as the winner in Asia as Japan seems to be willing to settle for a lower medal.
6. Gold buoyant but not too strong as the support is from money leaving euro and yen due to uncertainty of the fabrication of the new currency basket.
7. Federal Reserve emerging as a confident player once again for US after what appears to be a long and hard fought battle with the dark force. Treasury once again taking a more shadow force role with FDIC chairwoman sporting a generous smile in most of her recent appearances. (Even two weeks back - you can see frustration, anger, humiliation and fear in every one of these players).
8. Dollar and US Treasury losing competition in the replacement battle and the rest of the players fighting for silver on downwards as survival is the new mantra, enabling the US Fed to gradually move out their refi window to longer maturities.
Now if this is the half full argument let's look at what will make it a half-empty scenario.
some indications supporting a possible derailment of the above scenario- any one of these taking a larger than its present form in size or shape could have an accelerated reformation that could really destroy the present day lifestyle!
- A neo conservative party emerging in USA removing what appeared to have been the successful duality policy structure in its administration.
- war moving closer to USA mainland making it impossible to distinguish domestic priorities from external dominance fettered with bodybags.
- US shifting away from right brain dominant society to a more globally acceptable thought process with linearity as the defining objective
- fading away from a distinct separation of state and faith removing the improbable distinction of responsibility and poverty.
Events supporting this:
- debasing the republican foundation with fragmented and lack of focus leadership with no clear direction or clarity on party policies or agenda!
- shortage of weapons
- arsons and hate crime jumping
- Mexico becoming another Afghanistan
- faith based organizations getting more donations and support
- emphasis on what others don't deserve is gaining prominence
- less and less people regretting the mistakes they made in this mess and blaming others for their loss
At the risk of being correct (yes- being correct!! Given the current setup this is a low probability case) let me start by hedging my answers with a convoluted but sincere effort in articulating my thoughts on a possible solution for this conundrum before predicting where we are or where we might go from here!
In a society with socio economic imbalances, it is imperative to have a medium of transaction that will accommodate the imperfections exaggerated by technological gaps between various participating economies thus reducing the capabilities of concentrated ideologies to influence and unduly benefit from sheer econometric manipulations!! The authority to define, execute and police this new medium has to be of supreme nature in by in itself being its sole mission. May be we are not yet ready for this change - however there are symptoms that indicate for such a transition to happen in incremental steps which will ease us from this economic slavery- bringing uniformity with conformity in every process (with objectivity) bringing the much needed beacon of hope with a field glass view to every player that defines the scope of economic priorities for every one else. This could possibly bring capitalism to its true intended form bringing equality among unequal
players yet setting aside any possibility for socialistic or authoritarian communistic tendencies.
Now that I have got that out of the way –
I think the US economy has started turning around (market may trail by a couple quarters even longer as common shares as an asset/investment class will be replaced more and more by other types of instruments). USA will be followed by Germany, China and possibly GB. The casualties will be the rest of Europe and possibly Japan.
Reasons:
1.if you believe in Economics as the TRUE WMD - the countries that will recover first will be those with capabilities to influence and benefit from the movement of blue shifted capital.
2. The vultures and the hyenas will move for easier kill in weaker economies (rest of Europe including France Italy Spain and Sweden) leaving the stronger ones to slowly recover.
3. Credit flow will resume once the fixed income players find it difficult to fight the larger economies and settle for lesser return and more glory/power.
4. USA and Germany will emerge into an economic force once again, however temporary they might be, taking advantage of new emerging industries with pricing power while protectionism will be old fashion again with resumption of material and capital flow across the globe- enabling emerging and weaker economies to participate in the recovery with a time lag.
Indications supporting this:
1. US pumping money into areas that will either create new industries or reinvent a lost matured industry to recapture its pricing power.
2. EU and Euro losing its luster
3. The hyenas and the vultures circling Eastern Europe and other weaker economies leaving the stronger ones( US and Germany) to heal.
4. Japan slowly losing its mysterious strength of the past decade with smart money fading away from Yen and Japan.
5. China slowly emerging as the winner in Asia as Japan seems to be willing to settle for a lower medal.
6. Gold buoyant but not too strong as the support is from money leaving euro and yen due to uncertainty of the fabrication of the new currency basket.
7. Federal Reserve emerging as a confident player once again for US after what appears to be a long and hard fought battle with the dark force. Treasury once again taking a more shadow force role with FDIC chairwoman sporting a generous smile in most of her recent appearances. (Even two weeks back - you can see frustration, anger, humiliation and fear in every one of these players).
8. Dollar and US Treasury losing competition in the replacement battle and the rest of the players fighting for silver on downwards as survival is the new mantra, enabling the US Fed to gradually move out their refi window to longer maturities.
Now if this is the half full argument let's look at what will make it a half-empty scenario.
some indications supporting a possible derailment of the above scenario- any one of these taking a larger than its present form in size or shape could have an accelerated reformation that could really destroy the present day lifestyle!
- A neo conservative party emerging in USA removing what appeared to have been the successful duality policy structure in its administration.
- war moving closer to USA mainland making it impossible to distinguish domestic priorities from external dominance fettered with bodybags.
- US shifting away from right brain dominant society to a more globally acceptable thought process with linearity as the defining objective
- fading away from a distinct separation of state and faith removing the improbable distinction of responsibility and poverty.
Events supporting this:
- debasing the republican foundation with fragmented and lack of focus leadership with no clear direction or clarity on party policies or agenda!
- shortage of weapons
- arsons and hate crime jumping
- Mexico becoming another Afghanistan
- faith based organizations getting more donations and support
- emphasis on what others don't deserve is gaining prominence
- less and less people regretting the mistakes they made in this mess and blaming others for their loss
Tuesday, April 21, 2009
Thin Computer!
Close to 10 Years! Both Sun's McNealy and Oracle's Ellison have been trying hard to move enterprise computing to a thin client model - either using Java machine or through some other form.
So far they looked very far fetched!
May be not so fast!
With Sun dancing in Ellison's Software Juggernaut - may be it is time to look at this seriously.
Between Oracle and Sun they have all the elements that is needed to make enterprise computing a model similar to an Utility model- where the access to corporate data can be very securedly delivered for various end use purpose on any thin device - wired or wireless - from cell phone to any internet appliance!
May be one step closer to Cloud Computing!
Provided IBM does not spoil the party - As there will be pain for both IBM and Microsoft if they let this marriage happen!
So far they looked very far fetched!
May be not so fast!
With Sun dancing in Ellison's Software Juggernaut - may be it is time to look at this seriously.
Between Oracle and Sun they have all the elements that is needed to make enterprise computing a model similar to an Utility model- where the access to corporate data can be very securedly delivered for various end use purpose on any thin device - wired or wireless - from cell phone to any internet appliance!
May be one step closer to Cloud Computing!
Provided IBM does not spoil the party - As there will be pain for both IBM and Microsoft if they let this marriage happen!
Monday, April 20, 2009
Warren Buffet!
Warren Buffet: Posted a Couple of months back on a question about his wisdom on the latest decisions on investments!
From a long term perspective I think owning BRK shares will be the best form of investment to participate in the capital market for the following reasons:
- has over 50 companies almost every one of them profitable
- most of the operating income comes from insurance and reinsurance
- owns a minority yet a large chunks of shares in solid logo companies like coke, PG, AXP etc
- has lots and lots of free cash
- no layers on what to risk or how much to gamble
- recent GS and GE , even though they appear to be ill timed, they are yielding 10% and has ton of warrants for future stocks if the capital market were to appreciate.
In a few years when buffet retires the following possibilities might bring a major windfall to its investors:
- Most of the equity will be owned by the Gates foundation making Bill Gates either a likely successor or a major influencer in how or what directions BRK takes. Obviously one doesn't want to bet against Bill!
- currently BRK is valued conservatively as a hybrid insurance/MF compared to the individual companies if traded separately. Most likely scenario going forward - if the market is favorable either Gates or the new management will gradually spin off several or all (50 plus fully owned businesses) operating companies getting a high multiple individually compared to its low pe in its current form
high probability
Major DOWNSIDE risk is his exposure to derivative insurance on global capital market indexes- if the market is in for protracted contraction (say 12 or more months) the contract in its current form might force BRK to take some adverse actions to meet which additional collateral requirements forcing him to liquidate some or all of his crown jewels at the depressed levels.
From a long term perspective I think owning BRK shares will be the best form of investment to participate in the capital market for the following reasons:
- has over 50 companies almost every one of them profitable
- most of the operating income comes from insurance and reinsurance
- owns a minority yet a large chunks of shares in solid logo companies like coke, PG, AXP etc
- has lots and lots of free cash
- no layers on what to risk or how much to gamble
- recent GS and GE , even though they appear to be ill timed, they are yielding 10% and has ton of warrants for future stocks if the capital market were to appreciate.
In a few years when buffet retires the following possibilities might bring a major windfall to its investors:
- Most of the equity will be owned by the Gates foundation making Bill Gates either a likely successor or a major influencer in how or what directions BRK takes. Obviously one doesn't want to bet against Bill!
- currently BRK is valued conservatively as a hybrid insurance/MF compared to the individual companies if traded separately. Most likely scenario going forward - if the market is favorable either Gates or the new management will gradually spin off several or all (50 plus fully owned businesses) operating companies getting a high multiple individually compared to its low pe in its current form
high probability
Major DOWNSIDE risk is his exposure to derivative insurance on global capital market indexes- if the market is in for protracted contraction (say 12 or more months) the contract in its current form might force BRK to take some adverse actions to meet which additional collateral requirements forcing him to liquidate some or all of his crown jewels at the depressed levels.
America 2.0
This is about building the new America 2.0!!
America 1.0 was built a couple of centuries ago with some very capable people - intellectuals and industrious people who left their natives to build a new society.
It looks like the foundation that was built was so strong that it lasted a couple of hundred years and more. One element that the founding fathers couldn's have anticipated was the evolution of society in a connected world with a compulsive addiction to language and visual inputs to the brain. This technological implosion has dramatically changed the way the society is moving forward - not just how day to day life is being controlled but how the thinking and adoption is being structered as a global society. This is not something that was planned or envisioned by our fore fathers. Looks like this is a society that is moving excitedly and rapidly towards a left brain dominant behaviour. This is a very critical juncture for America and the world in general - as America is the only Industrialised nation that is built for an efficient left brain yet so right brain driven society.
Growth , prosperity & innovation led happiness was possible in America for this very reason - now that is being threatened. In the next few weeks I will expand on the thinking & address what is needed to stop the faltering of American leadership from innovation to industrialization! Accidentaly or otherwise the current administration seems to be stepping into the four critical areas that need re-thinking for this to take place.
- Healthcare
- Utility ( Renewable/Alternate)
- Technology
- Education
If the changes to these four seemingly separate areas are put in place - America 2.0 will be stronger and more powerful than ever - at the same time will make this world a better place to live - both ecologicaly & economically.
America 1.0 was built a couple of centuries ago with some very capable people - intellectuals and industrious people who left their natives to build a new society.
It looks like the foundation that was built was so strong that it lasted a couple of hundred years and more. One element that the founding fathers couldn's have anticipated was the evolution of society in a connected world with a compulsive addiction to language and visual inputs to the brain. This technological implosion has dramatically changed the way the society is moving forward - not just how day to day life is being controlled but how the thinking and adoption is being structered as a global society. This is not something that was planned or envisioned by our fore fathers. Looks like this is a society that is moving excitedly and rapidly towards a left brain dominant behaviour. This is a very critical juncture for America and the world in general - as America is the only Industrialised nation that is built for an efficient left brain yet so right brain driven society.
Growth , prosperity & innovation led happiness was possible in America for this very reason - now that is being threatened. In the next few weeks I will expand on the thinking & address what is needed to stop the faltering of American leadership from innovation to industrialization! Accidentaly or otherwise the current administration seems to be stepping into the four critical areas that need re-thinking for this to take place.
- Healthcare
- Utility ( Renewable/Alternate)
- Technology
- Education
If the changes to these four seemingly separate areas are put in place - America 2.0 will be stronger and more powerful than ever - at the same time will make this world a better place to live - both ecologicaly & economically.
Skipping a Year or so in Market time!
Its amazing how time and money vanishes when we dont pay close attention to!
Since the last time I had the descipline to post my ideas/opinions and follow a routine - so much has changed: from politics - local to global ; asset pricing - from real estate to stocks ; outlook - greed to fear to confusion!
Following the events happening at the speed of market - from dramatic policy changes to political gaffes- from spiralling money pits to manipulated capitalism - its very tough to capture a moment and stick an opinion - let alone ride the opinion into an article or life style ambition - as the shelf life for each one has been less than the time it takes the mind to register - even though the impact or implications is more traumatic and long lasting.
Looking at the past several weeks - it appears the general population has settled at unsettling events as a norm - from software piracy to deep sea piracy!
TO summarise the past 18 plus months of events will be like trying to capture a Tornado with a fishing net - but it does make it fun when looked at some opinionated flavors to pick on nuggets and ride it in slow motion - so in the next few weeks - I will post some thing from the past - using my opinions expressed else where - will help me see how I felt at the time of events and how it appears looking at it now!
Will have a new channel - Contemporay History:The Immediate Past!
Since the last time I had the descipline to post my ideas/opinions and follow a routine - so much has changed: from politics - local to global ; asset pricing - from real estate to stocks ; outlook - greed to fear to confusion!
Following the events happening at the speed of market - from dramatic policy changes to political gaffes- from spiralling money pits to manipulated capitalism - its very tough to capture a moment and stick an opinion - let alone ride the opinion into an article or life style ambition - as the shelf life for each one has been less than the time it takes the mind to register - even though the impact or implications is more traumatic and long lasting.
Looking at the past several weeks - it appears the general population has settled at unsettling events as a norm - from software piracy to deep sea piracy!
TO summarise the past 18 plus months of events will be like trying to capture a Tornado with a fishing net - but it does make it fun when looked at some opinionated flavors to pick on nuggets and ride it in slow motion - so in the next few weeks - I will post some thing from the past - using my opinions expressed else where - will help me see how I felt at the time of events and how it appears looking at it now!
Will have a new channel - Contemporay History:The Immediate Past!
Friday, September 14, 2007
Thanks to Mr G! New Era in America!!
Not Greenspan! It is Mr Ron Gettelfinger - the UAW President.
Strong and does come across as a no nonsense pro Union at any cost. When the Global economy and America is in the cross roads Mr Gettelfinger realizes that if America were to regain its Industrial and Intellectual supremacy - which is a must to regain its faltering Economic prowess it has to come from the great Automotive roots.
In spite of all the redericks that is going on- looking at the swift speed at which the current labor talks are progressing with the UAW and its backers leaning towards a redefinition of the UAW- Management relationship. Such a break through deal might be just around the corner which might pave the way for rebuilding Detroit and the Big Three! Thank you to the new teams of the big three- Once the legacy & rocky relationship is resurfaced with a new platform - America will be back! Watch out Toyota and Mercedes - Yes Luxury and Pink can be defined ONLY BY CADILLAC!
Strong and does come across as a no nonsense pro Union at any cost. When the Global economy and America is in the cross roads Mr Gettelfinger realizes that if America were to regain its Industrial and Intellectual supremacy - which is a must to regain its faltering Economic prowess it has to come from the great Automotive roots.
In spite of all the redericks that is going on- looking at the swift speed at which the current labor talks are progressing with the UAW and its backers leaning towards a redefinition of the UAW- Management relationship. Such a break through deal might be just around the corner which might pave the way for rebuilding Detroit and the Big Three! Thank you to the new teams of the big three- Once the legacy & rocky relationship is resurfaced with a new platform - America will be back! Watch out Toyota and Mercedes - Yes Luxury and Pink can be defined ONLY BY CADILLAC!
Saturday, August 18, 2007
My 2 Cents on how to risk your 2 cents!
Purpose: to assess if the current disruption in the global market is just another re-pricing of risk as the global expansion continues or it is the Real One like the 1928-29 market induced economic calamity! To see if we can really find a safe haven instrument that will protect us in either situation and see if we can be prepared to load them up when the opportunity is right!
Disclaimer: Do I drink my magic potion? NO!! I don’t - only Heineken! - as I still am controlled by those butterflies in my stomach & believe in panic & fear induced reactionary decisions and enjoy being a Monday night quarterback! A wise man once quipped when told that he should have his money work for him – “Let the money rest safely- While I do the Work!”
Am I Qualified? Heck NO!! As they say Clarity is better than Cleverness!
Set up: Global Market melt down spreading from London to NY to Tokyo to Bombay – every one trying to blame everything from US Sub-prime to CDOs & CLOs and the fanciful but less transparent Hedge funds. Indexes down in double digits- with Helicopter Ben along with his global Federal / Reserve Bank buddies dropping bags of currencies - only to see them drown in the flood of worries with no desired effect. May be it was deliberately orchestrated this way & waited long enough so that the system can flush out the bad elements and punish the not so deserving speculators so that it does not look like a bail out of the un-deserved. The unexpected move of a drop in Discount rate was timed for perfection so that it can punish those speculators who were shorting mercilessly – as speculative short sellers in the options and derivative markets using Index & Futures were burnt as the settlement price is fixed at the open on a expiry – and as it happened on an expiry day before market opened & the Index opened 2-3% higher leaving those speculators with heavy losses.
Sub-prime or no-sub prime: Unlike other economies & markets where the government agencies protect and cover all disasters for public popularity – the US market has worked out of its greed driven financial calamity by punishing those culprits with immense severity & immediate urgency- enabling the larger market & economy to bounce back and move forward. This time it is not going to be any different- speculators will be punished & a handful of individuals & entities (may be an understatement) will face severe financial penalty but the economy will be back to normal in a very short period.
Looking at the speed with which the market is readjusting to the unknown impact of the hedge fund from CDO/CLO/Sub-prime one wants to believe that this is the end of it. Volatility – globally is beyond anyone’s imagination; price fluctuations are capable of making or losing a ton of money if one’s luck is smiling for the right reason. There are enough analysts and reporters comparing this to various time lines in the past including – the great 9-11 when the market was shut down for a week, 1998 LTCM-Russia Debacle, 1994, 1991 , 1987 and even some to 1928-29 and a few other Financial events in between.
Let’s take a look at what it is being compared to-
9-11 Disaster: A combination of Telecom induced Internet bubble topped by the 9-11 disaster. Even though the tech bubble high is yet to be scaled back again there is lot of money that has been made starting shortly after that- and of course leading to the current day global dilemma!
1998 LTCM –All it took was a handful of brains and what should have been a non-event Russian default to bring the world economy to the brink of bankruptcy. Yes - there was panic and casualty but it was contained superbly by well co-coordinated global fed intervention.
1994 – Was it real estate or just the economy? May be the bank of England being disliked Either way, one has to dig deeper into the history to find that the year will be remembered for the beginning of the technology era and the great internet proliferation and definitely not an economic of financial event.
1991 – Is it war or inflation? Either way the fed over came its misjudged call in a hurry.
1987 – Talk about pain and suicide robbing the headlines from NY, NY! Fed Chairman – may not be Green (!) at that time but turned out to be one of the greatest in post world war economy- even though there are rumblings about the Greenspan Put and how he was the originator of Sub-prime & the wealth inflation to spread like cancer. May be if this event turns out to be a non-event – Mr Greenspan might still hold his reputation as the best of breed and might be forgiven for his asset bubble.
1928-29 – This is really one for the historians – No matter how much people blame it on speculation and greed by way of leverage and market manipulation one thing which is being ignored from the time period is – it was at the very early stages of modern Industrial civilization – when innovation was at the very basic level compared to what we are going through in the internet induced global era. From factory planning to material movements – everything was basic and primitive. Gold based monetary system, British imperialism still wagging its tail, war driven penalties, etc. The economy was still controlled by a few Industrial barrons or companies – starting from GMs to GEs and Du Ponts to JPMorgans of the world after the Rockefellers & Carnegies started handing over their torches. Disruptions and disasters where part of the evolutionary cycle of the modern industrial era. Lasted a while – but was not the end.
Panic of 1825 – Bank of England: take everything anybody wants to give and the crash lasted 2 days. Digging deep into the history books – whether it’s the gold or tulip mania or modern day currency / stocks / bonds era – speculation and greed has always led to newer and better financial instruments for the future generation to hide behind – only to be crumbled like a sand castle.
We could take a few more of those disruptions and I am sure we will still find same end result with differing market movers. The economic growth engine comes back with a vengeance –as the basic survival instinct leads to innovation and growth.
Does that mean doing nothing? Absolutely NO! Market indexes might scale new highs if waited long enough – but what seldom gets mentioned is that the components are not the same.
Now for the 2 cents for various expectations:
Scenario 1 - Scared of an Imminent Depression?: Go for the currency – based on conviction distribute between Yen, US $ and Indian Rs .
Why Yen: Japan is the only country which can self sustain & since their pride and feeling for independence is so strong that they will honor their currency no matter what.
Why US Dollar: US is the only sovereign nation that will honor its debt obligation no matter what & has the economic power & market strength along with product might & services with a free market capitalism that can punish the bad and reward the good immediately. This will increase the demand for US Government papers making the dollar stronger in such economic conditions (against popular sentiment). Post 9-11 and post German minded Euro-zone the predominantly US Dollar foreign reserves have been diverted to Euro along with some commodities. With the gyrations of commodity prices in a economic calamity most nations will move to safe haven instruments that is very LIQUID & will be honored – leading to a gradual strengthening of Dollar.
Why Indian Rs: India is the next stop for low cost manufacturing supply base & is the only free market (may be regulated but certainly not controlled) economy that has a very big consumer market next to US & hence will continue to grow organically before global stabilization & growth takes over. Rupee can only get stronger over time given its domestic market size & global opportunity for its base.
Gold is a no go as are other commodities & fixed assets as they will be re-priced like every other asset class as it will not be restricted to paper assets like stocks & corporate bonds. As gold is influenced by dollar value – it will go down as dollar gets stronger.
Euro is a no go – as the solidarity of the Euro Zone will be at risk and eventually crumble under lopsided benefits being reaped only by Germany while pushing the other members into unemployment, high inflation & stagnation. (maybe master minded by the Germans to eat the cake & keep it too; Details for another day! Preview: Look at the bottom line of German companies & economy & compare them to the other Euro-zone entities)
Scenario: 2
Economic Recession – restricted to the US Market – Reallocate into defensive areas, growth stocks with lot of domestic and non-US exposure & precious metals and domestic fixed assets.
Economic Recession – This time a Global One! – Defensive stocks & metals, local fixed income papers both government & corporate.
Scenario: 3
A Market Correction – may be a mild economic slow down- Average down on the previous allocation strategy that has worked for you.
Scenario - 4
Most likely scenario (OR is it My Wishful thinking?):
A mild recession with patchy global growth leading to a moderate Bear market (Bear market is 20% by most standards – which we have already achieved in many sectors/industries – may be not in the Indexes yet!). Most of the Mortgage lenders in US going under bringing down the hedge fund market along with a few brokerages globally only to be re-packaged & launched under a different name. US real estate market going into a prolonged price compression bringing down home builders & REITs and some specialty retailers. Most of the consumers will be spared as a majority of the obligations and risks are already distributed and buried under other speculative investment vehicles – the owners of which have already either been punished or will be shortly and mostly contained to a limited circle. The much anticipated slow down in retail – leading to a coal bag this Christmas will be averted for the following reasons: 1) Election around the corner in US 2) Most of the draw down from the housing market appreciation was used either for home upgrades or further investments in housing related expenditures 3) retail was always supported by strong labor market & wage increase and not from the real estate bubble as widely mis-understood – and hence will still be in tact even after the real estate bubble burst 4) with a possible change of guard in Washington – a new breed of government sponsored expenditures in industries other than Defense & Oil will take place as the focus will be Domestic & not on War & middle East leading to more expansionary measures leading to a moderate Growth in US economy. 5) With a strong Dollar and Washington ready to tap into the strategic petroleum reserve – oil will crash down to under $25/barrel, as the speculator and War/Republican premium will be wiped out. 6) Western dominated Pharmaceutical & Biotech will lose their charms to generics as Washington fast tracks the bio-generics and has less restrictions on patent copying as the largest capitalistic market moves towards a Universal health care system.
This scenario will lead to moderate global expansion and hence – reallocate to Emerging markets – infrastructure & growth stocks along with Hospitality & Emerging market Real estate. Going short on Defense, Oil & Pharma.
Disclaimer: Do I drink my magic potion? NO!! I don’t - only Heineken! - as I still am controlled by those butterflies in my stomach & believe in panic & fear induced reactionary decisions and enjoy being a Monday night quarterback! A wise man once quipped when told that he should have his money work for him – “Let the money rest safely- While I do the Work!”
Am I Qualified? Heck NO!! As they say Clarity is better than Cleverness!
Set up: Global Market melt down spreading from London to NY to Tokyo to Bombay – every one trying to blame everything from US Sub-prime to CDOs & CLOs and the fanciful but less transparent Hedge funds. Indexes down in double digits- with Helicopter Ben along with his global Federal / Reserve Bank buddies dropping bags of currencies - only to see them drown in the flood of worries with no desired effect. May be it was deliberately orchestrated this way & waited long enough so that the system can flush out the bad elements and punish the not so deserving speculators so that it does not look like a bail out of the un-deserved. The unexpected move of a drop in Discount rate was timed for perfection so that it can punish those speculators who were shorting mercilessly – as speculative short sellers in the options and derivative markets using Index & Futures were burnt as the settlement price is fixed at the open on a expiry – and as it happened on an expiry day before market opened & the Index opened 2-3% higher leaving those speculators with heavy losses.
Sub-prime or no-sub prime: Unlike other economies & markets where the government agencies protect and cover all disasters for public popularity – the US market has worked out of its greed driven financial calamity by punishing those culprits with immense severity & immediate urgency- enabling the larger market & economy to bounce back and move forward. This time it is not going to be any different- speculators will be punished & a handful of individuals & entities (may be an understatement) will face severe financial penalty but the economy will be back to normal in a very short period.
Looking at the speed with which the market is readjusting to the unknown impact of the hedge fund from CDO/CLO/Sub-prime one wants to believe that this is the end of it. Volatility – globally is beyond anyone’s imagination; price fluctuations are capable of making or losing a ton of money if one’s luck is smiling for the right reason. There are enough analysts and reporters comparing this to various time lines in the past including – the great 9-11 when the market was shut down for a week, 1998 LTCM-Russia Debacle, 1994, 1991 , 1987 and even some to 1928-29 and a few other Financial events in between.
Let’s take a look at what it is being compared to-
9-11 Disaster: A combination of Telecom induced Internet bubble topped by the 9-11 disaster. Even though the tech bubble high is yet to be scaled back again there is lot of money that has been made starting shortly after that- and of course leading to the current day global dilemma!
1998 LTCM –All it took was a handful of brains and what should have been a non-event Russian default to bring the world economy to the brink of bankruptcy. Yes - there was panic and casualty but it was contained superbly by well co-coordinated global fed intervention.
1994 – Was it real estate or just the economy? May be the bank of England being disliked Either way, one has to dig deeper into the history to find that the year will be remembered for the beginning of the technology era and the great internet proliferation and definitely not an economic of financial event.
1991 – Is it war or inflation? Either way the fed over came its misjudged call in a hurry.
1987 – Talk about pain and suicide robbing the headlines from NY, NY! Fed Chairman – may not be Green (!) at that time but turned out to be one of the greatest in post world war economy- even though there are rumblings about the Greenspan Put and how he was the originator of Sub-prime & the wealth inflation to spread like cancer. May be if this event turns out to be a non-event – Mr Greenspan might still hold his reputation as the best of breed and might be forgiven for his asset bubble.
1928-29 – This is really one for the historians – No matter how much people blame it on speculation and greed by way of leverage and market manipulation one thing which is being ignored from the time period is – it was at the very early stages of modern Industrial civilization – when innovation was at the very basic level compared to what we are going through in the internet induced global era. From factory planning to material movements – everything was basic and primitive. Gold based monetary system, British imperialism still wagging its tail, war driven penalties, etc. The economy was still controlled by a few Industrial barrons or companies – starting from GMs to GEs and Du Ponts to JPMorgans of the world after the Rockefellers & Carnegies started handing over their torches. Disruptions and disasters where part of the evolutionary cycle of the modern industrial era. Lasted a while – but was not the end.
Panic of 1825 – Bank of England: take everything anybody wants to give and the crash lasted 2 days. Digging deep into the history books – whether it’s the gold or tulip mania or modern day currency / stocks / bonds era – speculation and greed has always led to newer and better financial instruments for the future generation to hide behind – only to be crumbled like a sand castle.
We could take a few more of those disruptions and I am sure we will still find same end result with differing market movers. The economic growth engine comes back with a vengeance –as the basic survival instinct leads to innovation and growth.
Does that mean doing nothing? Absolutely NO! Market indexes might scale new highs if waited long enough – but what seldom gets mentioned is that the components are not the same.
Now for the 2 cents for various expectations:
Scenario 1 - Scared of an Imminent Depression?: Go for the currency – based on conviction distribute between Yen, US $ and Indian Rs .
Why Yen: Japan is the only country which can self sustain & since their pride and feeling for independence is so strong that they will honor their currency no matter what.
Why US Dollar: US is the only sovereign nation that will honor its debt obligation no matter what & has the economic power & market strength along with product might & services with a free market capitalism that can punish the bad and reward the good immediately. This will increase the demand for US Government papers making the dollar stronger in such economic conditions (against popular sentiment). Post 9-11 and post German minded Euro-zone the predominantly US Dollar foreign reserves have been diverted to Euro along with some commodities. With the gyrations of commodity prices in a economic calamity most nations will move to safe haven instruments that is very LIQUID & will be honored – leading to a gradual strengthening of Dollar.
Why Indian Rs: India is the next stop for low cost manufacturing supply base & is the only free market (may be regulated but certainly not controlled) economy that has a very big consumer market next to US & hence will continue to grow organically before global stabilization & growth takes over. Rupee can only get stronger over time given its domestic market size & global opportunity for its base.
Gold is a no go as are other commodities & fixed assets as they will be re-priced like every other asset class as it will not be restricted to paper assets like stocks & corporate bonds. As gold is influenced by dollar value – it will go down as dollar gets stronger.
Euro is a no go – as the solidarity of the Euro Zone will be at risk and eventually crumble under lopsided benefits being reaped only by Germany while pushing the other members into unemployment, high inflation & stagnation. (maybe master minded by the Germans to eat the cake & keep it too; Details for another day! Preview: Look at the bottom line of German companies & economy & compare them to the other Euro-zone entities)
Scenario: 2
Economic Recession – restricted to the US Market – Reallocate into defensive areas, growth stocks with lot of domestic and non-US exposure & precious metals and domestic fixed assets.
Economic Recession – This time a Global One! – Defensive stocks & metals, local fixed income papers both government & corporate.
Scenario: 3
A Market Correction – may be a mild economic slow down- Average down on the previous allocation strategy that has worked for you.
Scenario - 4
Most likely scenario (OR is it My Wishful thinking?):
A mild recession with patchy global growth leading to a moderate Bear market (Bear market is 20% by most standards – which we have already achieved in many sectors/industries – may be not in the Indexes yet!). Most of the Mortgage lenders in US going under bringing down the hedge fund market along with a few brokerages globally only to be re-packaged & launched under a different name. US real estate market going into a prolonged price compression bringing down home builders & REITs and some specialty retailers. Most of the consumers will be spared as a majority of the obligations and risks are already distributed and buried under other speculative investment vehicles – the owners of which have already either been punished or will be shortly and mostly contained to a limited circle. The much anticipated slow down in retail – leading to a coal bag this Christmas will be averted for the following reasons: 1) Election around the corner in US 2) Most of the draw down from the housing market appreciation was used either for home upgrades or further investments in housing related expenditures 3) retail was always supported by strong labor market & wage increase and not from the real estate bubble as widely mis-understood – and hence will still be in tact even after the real estate bubble burst 4) with a possible change of guard in Washington – a new breed of government sponsored expenditures in industries other than Defense & Oil will take place as the focus will be Domestic & not on War & middle East leading to more expansionary measures leading to a moderate Growth in US economy. 5) With a strong Dollar and Washington ready to tap into the strategic petroleum reserve – oil will crash down to under $25/barrel, as the speculator and War/Republican premium will be wiped out. 6) Western dominated Pharmaceutical & Biotech will lose their charms to generics as Washington fast tracks the bio-generics and has less restrictions on patent copying as the largest capitalistic market moves towards a Universal health care system.
This scenario will lead to moderate global expansion and hence – reallocate to Emerging markets – infrastructure & growth stocks along with Hospitality & Emerging market Real estate. Going short on Defense, Oil & Pharma.
Saturday, August 4, 2007
Trading Fear - Killing those butterflies!!
Everyone talks so much about Fear and Greed in the financial market. Is it just human nature restricted to the financial markets or the expression in the financial market is just a mirror image of what happens in the human DNA?
Fear and Greed comes in different forms in life - Fear of life, Fear of love, Fear of Loss, Fear of giving and so many other differing flavors. But Greed is mostly restricted to material world. Bravery is a form of taming the fear and acting in a controled fashing and taking the plunge - which is alsoa form of greed. So at what point does bravery bridge the gap between fear and greed?
Early warning signs of fear is easy to identify - butterflies in the stomach! Can we practice carefully so that we have what it takes to stomach those butterflies and change the direction to capitalize on those early warning? Some times closing the mind looks so easy to do - but changing direction or opinions leading to preferences - not that easy. Every person has a differnet threshold level. Practice seems to be an easy way to manage those butterflies. Being safe or cautious has a price - an insurance premium. IN most of the cases even after building the insurance premium the rik-rewrd ration looks attractive.But when the butterflies are still being incubated it appears so lame to build the insurance premium into the cost basis- but when the butterflies start migrating to the stomach the premiums have sky rocketted and makes it close to being inert when it comes to action.
What is the right premium for the fear factor? or the butterfly factor? Is it something that can be modelled mathematically? to apply to varying levels of judmental errors? When do we kill the butterfly and take the plunge going against the primal instinct? Do we use that to predict the direction or wait for the directional change to happen and then take the plunge - even though one sacrifices a fraction in not predicting the exact timing of the directional change? If the insurance premium is already built into the model it might be easy to take the risk of predicting the timing of the directional change.
Killing those butterflies may not be the right answer -as most of the time it acts as a safety valve to make assessment of the risk profile and take the time to see if one wants to build the insurance premium into the model. So lets not fear those butterflies - lets learn from it so that we know how to tame it and capitalise on the butterfly behaviour!
Fear and Greed comes in different forms in life - Fear of life, Fear of love, Fear of Loss, Fear of giving and so many other differing flavors. But Greed is mostly restricted to material world. Bravery is a form of taming the fear and acting in a controled fashing and taking the plunge - which is alsoa form of greed. So at what point does bravery bridge the gap between fear and greed?
Early warning signs of fear is easy to identify - butterflies in the stomach! Can we practice carefully so that we have what it takes to stomach those butterflies and change the direction to capitalize on those early warning? Some times closing the mind looks so easy to do - but changing direction or opinions leading to preferences - not that easy. Every person has a differnet threshold level. Practice seems to be an easy way to manage those butterflies. Being safe or cautious has a price - an insurance premium. IN most of the cases even after building the insurance premium the rik-rewrd ration looks attractive.But when the butterflies are still being incubated it appears so lame to build the insurance premium into the cost basis- but when the butterflies start migrating to the stomach the premiums have sky rocketted and makes it close to being inert when it comes to action.
What is the right premium for the fear factor? or the butterfly factor? Is it something that can be modelled mathematically? to apply to varying levels of judmental errors? When do we kill the butterfly and take the plunge going against the primal instinct? Do we use that to predict the direction or wait for the directional change to happen and then take the plunge - even though one sacrifices a fraction in not predicting the exact timing of the directional change? If the insurance premium is already built into the model it might be easy to take the risk of predicting the timing of the directional change.
Killing those butterflies may not be the right answer -as most of the time it acts as a safety valve to make assessment of the risk profile and take the time to see if one wants to build the insurance premium into the model. So lets not fear those butterflies - lets learn from it so that we know how to tame it and capitalise on the butterfly behaviour!
Friday, August 3, 2007
Eye on the ball!
Throwing and catching a ball seems so lame and boring- till one starts to look at the details of the process ( I know - why are we trying to make something so simple into a very complex interpretation ??). Lets take the simple process of tracking the ball and catching it where we need it- Focus on the ball till we actually hold the ball in the hand - and actually see us catching it? Most of the time we seem to do it so mechanically and the ones we miss are the ones where we have our eyes away from the ball just before the hand grabs the ball. Taking a step deeper - I found that if we try to catch the ball where we want to - catching can be very tricky as if we are used to catching in a specific position relative to the body - moving to a new position is not so easy as we need to actually move the eye to the spot where we want to catch the ball. A simple example will be the contact point in a tennis play. Moving the contact point involves not just reaching out for the ball but making sure our eyes are focussing on the new spot. It appears so simple yet it takes so much effort. All it takes is a fraction of a second for the eye to drift away from the ball and the spot before the contact is made- same is true in our daily life. Concentration seems so easy yet so evasive. If we are able to manage the eye movement and eye focus we have a much better chance of mind control. This leads to a very intriguing topic of mine- how much does eye play a role in brain power and effectiveness of one's ability to do better? I will save the details of my thought process for a later topic. To see the effect - try sitting in a place with your eyes closed for 10 minutes. A calm mind will prevail only if your eyes stop twitching. And it is so difficult to keep the eyes closed and nithing unless you are tyring to sleep.
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