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nytimes has this article today titled Cable freedom is a click away, it talks about how upgrading your computer, installing a few desktop apps and adding a wireless connection, keyboard and mouse will mean you can move away from a monthly cable bill.

Some thoughts….

You don’t need all that setup. To watch television shows online, you just need a laptop and wired / wireless headphone set. hulu, joost etc. are all web sites, unless you are looking at recouping earlier investment, you can watch all you want with out a television. All you need is the patience to watch the show a day to a week later, depending on the show.

I do not own a television, and i’ve been using a laptop to watch what i want for more than two years now. Over the past two years the choice of sites that i can visit to watch what i want has gone up, in particular with hulu.

The article never mentions the downside nor does it talk about the options for that very important internet connection. In this setup you are essentially dependant on your internet connection provider. If you use a cable company to get Internet as well then you are at the mercy of all the other users in your neighbourhood who use the same cable company. In other words if enough number of users in your neighbourhood are like you, then the bandwidth you will be able to use goes down drastically. That’s because cable companies provide shared bandwidth in most localities. If all your neighbours are using the same setup, then you are essentially trying to load a page all the time.

It’s been about six months since Oracle announced Sun acquisition but it isn’t completed yet. News reports indicate that EU approval for the acquisition is not yet through. In the interim Sun apparently is laying off about 3000 people, apparently 10% of its workforce.

http://www.ritholtz.com/blog/2009/10/why-the-industrial-revolution-was-in-great-britain/

This is one of the best cause consequence analysis of technological evolution. Why did industrial revolution happen in England and not any where else? A very thought provoking analysis that i hope to revisit again with my take on it. A must watch. Iam trying to get a link where i can embed it and will do it once i find it.

It has been a very long time since i posted.

I was quite busy at work, and so did not have the time or energy to do anything else.

Do you remember that old point about “inflection points” from “Only the paranoid survive”?

We had that great looking chart of various IT companies IBM, DEC etc. which had the entire stack of technology all by themselves. The hardware (often right from the chip), and the sofware. Then that model went bust with Microsoft dominating the OS market with its Windows OS and Intel dominating the chip sector and hardware makers basically getting invisible. Hardware makers, like Dell, were outsourcing manufacturing to OEM’s and branding to sell along with OS makers like Microsoft.

The first attack on this model, was apple, which managed to create a brand that was able sell hardware with out any regard to the underlying chip manufacture. Apple also managed to create a unified brand of “apple” with its hardware and software. Remember, even as apple embraced Intel chips for its computers, Intel was never the brand being sold. It was, Apple, with its hardware and software.

Today we see the same thing happening at an enterprise level. Oracle takes over Sun and thus becomes a brand that can sell across the whole stack of IT structure. If approved, Oracle will be able to sell hardware, OS, multiple database options, Applications servers and finally Enterprise applications systems.

Oracle is not the only company that can provide you some thing like this, IBM is pretty much in the same place and HP can do something pretty similar. We are not even counting Cisco’s avowed contention to get into the data center. I would think, Cisco is probably looking at EMC + VM Ware to get a piece of this pie.

In essence, we are going back to a situation where a customer can choose a single vendor and buy hardware, OS, Databases, Applications servers and even enterprise level applications. In an emerging situation like this, who will be the greatest looser?

I think given the current power structure, it will be intel which will be the biggest looser and the next, if at all, will be microsoft. Intel is the biggest looser since it will loose its pricing power enjoyed over a period of about 15 years if not close to 20 years. It will be interesting to see how AMD reacts to these unfolding events.

What will the reaction of Andy Grove, be to this trend?

Over the past 10 days or so, we see “reports” about the safety of small cars. Like this “opinion” of wall street journal, where they conclude that small cars are inherently unsafe. WSJ did a follow up with this article.

There are two arguements against this idiotic arguement, one satirize their point of view by taking it to an extreme. The argument in this case is fairly straight forward. The crash tests conducted were between small cars and mid-sized sedans. These tests wer.e for head-on collisions, where the total momentum is higher.

For a fair comparision, of the severity of the crash results, it is important to compare the results for small to mid-size car collision to mid-size to full size cars, full size car to SUV and SUV to an 18 wheeler collisions. Furthermore, an accurate description of the so called “Safety” of various cars would be a head on collision with the highest momentum generating vehicle on the road.

So, we should see the results for a small car, mid-size car, full size car and a SUV against a fully loaded 18 wheeler. Ofcourse that detail would not be given out. If a small car was not “Safe”, then the safest mode of transportation would be an 18 wheeler for everyone.

That argument sounds ridiculous… because it is.

Ultimately every auto crash is a question of momentum, and momentum is generated by weight “and” speed of the vehicle. Then we would also have to consider probability theory. Questions related the probability of an occurance of this sort happening should also be considered before a judgement of the viability of small cars is made.

Any opinion degrading small cars and their so called “safety issues”, with out delving into these issues is utter rubbish and should be treated for what they are, idiotic arguments.

I would be surprised if you have not yet heard or listened to Susan Boyle considering the saturation coverage this singing sensation has recieved. On the off chance that you haven’t, here it is…

You would agree that she has exceptional voice and unusual vocal range and she is evidently well trained. It is conventional wisdom now, that she is a great talent, that susan boyle is the kind of discovery that makes the efforts of shows like “Britian’s got talent” and “American Idol” worth while.

To realize the real reason she is a singing sensation, watch the video again and pay attention to the visuals of the audience as Susan speaks. Here are a some of things you notice.

When Susan says, “its a collection of villages” you can hear the audience sniggering, and when she says she is 47 (Remember the first time she was asked the same question when she wasn’t on stage, she says she is almost 48. Was there a friendly tip then to say she is 47?), the audience laugh quite loudly and the panel of judges roll their eyes.

If this isn’t humiliation, i don’t know what humiliation is!

Wait there’s more…

Simon Cowell asks her what is the dream and Susan says, “trying to be a professional singer”. The camera focuses on a good looking young women in the audience who does an exaggerated eye roll. And when susan says i would like to be as famous as Elaine Page, the camera again focuses on a woman in the audience who is commenting, we do not know about the comment itself but by this time you feel the vibe of the audience, which probably started off with the eye roll of the panel of those judges.

Everyone in the auditorium, including the panel of judges thinks she is a middle aged country women with high hopes of making it big, and they laugh at her and are already against her. But then she starts singing, and the expressions of the panel of judges show they don’t believe what they are hearing. As the song progresses, audience support moves to support her strongly and the camera man catches a couple of obviously elderly ladies and their reaction when comments were made by the panel. Towards the end, camera doesn’t show many young people but audience members who are either middle aged or elderly or do not fall into that “ideal” body type. The delightful laughter of relief on the face of a women towards the end of the comments, is the evidence of strong swing among the audience. Panel of judges acknowledge her obvious talent and a star is born.

To me, the story here is not about Susan Boyle, though obviously, she is the conduit which depicts what human society as a whole has transformed into. The story was depicted by that online producer, and cameramen of the program, who managed to build a narrative of the feelings and emotions of the audience and panel of judges regarding this women who thought she had a certain skill, but they were discriminating against.

Human beings as a society have become superficial. We no longer respect intellectual achievement, we don’t think being able to think in the abstract is an achievement, we do not think, as people age and gain experience they get more wise, we think people who do not live in an urbanized landscape can achieve anything. Did you notice the level of disapproval for people who are aged, people who do not come from an urban area, people who do not fall into the same pegion hole of body image face in our society?

Bryan Williams was being mild when he said, “She beat expectations and perceptions”. He was being polite, not to Susan Boyle, but to his own audience. Susan Boyle did not just beat expectations and perceptions, she managed to break through the unseen boundaries of a globalized world that descriminate aganist age, body image and rural people.

I saw this movie a couple of weeks back but did not immediately write my review, since too often, the initial impression movies such as this make, pale with time. In this case, iam happy to report, time doesn’t do much damage.Tony Gilroy has already proved his abilities with the “bourne” movies and ofcourse with michael clayton. If any validation was needed this movie offers it.

The movie moves back and forth in time, which appears to be a gimmick initially (Remember, similar technique was used in michael clayton). But as the movie progressed, i realized the advantage of this layered narrative in keeping the viewer glued to proceedings. A linear narrative in this case would have been character and / or action driven and that would have drained the movie of the charm and intelligence it has in its current form. (In fact the movie does not have any “Action” sequences to speak of).

And ofcourse the humor. I have always been a fan of situational and dialogue based humor rather than the slap-stick variety and so i may be biased in my judgement. I thought, the situational and dialogue humor scripted were of very high quality and added to the intelligence of the movie.

Julia Roberts and Clive Owens give fantastic performances. Above mentioned non-linear narrative ensures that neither is caricatured. Both end up bringing a lot of charm to the drama.

I cannot sustain interest in feature films that i get to see, and usually i start getting bored in the first 10 minutes of the movie. In that time, i already know the probably story line and scene sequence and start waiting for either spectacular locales or set pieces of action or random humurous lines to get through to the end.

This is one of the few movies i can say, never lost its grip on my senses through out its duration.

Final Word: Highly recommended.

One of the best daily show episodes i saw…

Here it is and it is a must watch!!!!!!

Here is the best quote of this entire show:

“Isn’t the dow jones industrial average, just a short twitch numerical representation, of a bunch of guesses, about other people’s assumptions, about the financial well being of, an arbitrarily chosen group of 30, out of ten’s of thousands of possible companies?”

That or some thing similar to that is what i would expect any sensible financial journalist to say, but there aren’t too many out there who can say and keep their job. Especially not on CNBC, the network which is taken to the cleaners in the first segment of this episode.

Then this insight, which i think is one of the best thoughts about the bailouts of all these banks and insurance companies. It takes a total outsider to come up with some thing like this, and this is out of the box thinking. Regardless of this not being considerate of accounting practices and what not, this statement shows us how legislators should start thinking…..

“We are paying billions of dollars to the people who insured those crappy loans, and we are paying billions of dollars to the people who made those crappy loans. Aren’t we paying for the same crappy loans twice?”

Jon Stewart is probably the best news commentator out there, all because, no one takes the court jester seriously, but by virtue of that immunity, a court jester can criticize the king and tell the truth and get away with it.

If you were watching CNBC or even follow MSNBC, you would have noticed this idiotic rant from one of CNBC’s so called market analysts.

Earlier we had Jim Cramer had a similar rant.

Notice how in the earlier instance, jim cramer was ranting about Ben Bernanke was doing all the wrong things and should cut interest rates and so on and on and on…. The reason mentioned is… People will loose jobs. Who are these people? It is those same market traders and other financial market workers.

Now that they have had their bailouts, “and” recieved their bonuses for the year, and assured of future bailouts as well, these people and their cheerleaders in CNBC want no bailout to home owners!

Rich, isn’t it?

When these guys get hit by a bus, it is a problem of the whole world and government and legislators and tax payers should bail them out, but when others get hit by a bus it is a question of personal responsibility. Even if those others, were suckered in by these very same wall street types into all those ALT A mortgages, sub-prime mortgages and liar loans.

What happened to all those questions of philosophy when house voted out the initial bailout and the stock market tanked? What happened to these rants when wall street executives cut sweet heart deals to pay themselves bonuses even as the tax payers were pumping in the money to save their companies? Ofcourse, this CNBC crowd probably never ventures out of their comfort zones of stock market trading floors and well appointed studio’s. No wonder this particular “reporter” waves his hand at all those traders to say “this is america”. He should really try his own cool aid and visit smaller towns and rural areas of america!

If home owners are not bailed out, then lets also un-bail out financial institutions, and when society degrades to tribal warfare, it will be all those construction workers, factory workers and manual labor who will, for once have an edge, over these masses of over weight and greedy you know who’s.

Its called “Inside the meltdown” and full of left-liberal pundits, but it is a pretty good description of what went on during those crucial months last year.

Here it is…

Here is what Rick Wagoner, CEO of GM says today….

The essentials of this speech are as follows:

1. Our current plan is more aggressive than what it was earlier.

Explanation: In december we came up with a rosy picture to get some money, but today we realize that we need to give you a worse picture to get more money. So our new plan is “more aggressive”.

2. Lower break-even points:

Explanation: This is mystifying to me. If you happen to notice that the market has signincantly cratered, you would expect your break-even point to go higher, not lower. Is this a typo of some sort or am i mis-understanding this?

3. Significant sacrifices by all stake holders:

Explanation: Except for me or the top management of the company.

4. We will reduce workforce by 10K globally, reduce manufacturing facilities in US by 2012 by 14, labor agreements modifications etc. and we will do the same thing across the globe:

Explanation: We have consciously reduced our market by reducing potential buyers, “Ford’s statement about pay your workforce better so that they can buy your own prodcuts” be damned.

5. Reduce brands to 36 rather than 40 by 2012, implies, hummer will be sold immediately, Saab will be sold, saturn will be sold or phased out:

Explanation: Starting tomorrow, we will not really sell either Hummer, Saab or Saturn, if customer’s are so stupid that they will still buy stuff that we want to shutdown, then they are the suckers.

Apart from all the points above, we will spend some time and money to create some infrastructure for Chevy volt and other such cars, but with tax payer money, just so that, house and senate members are happy. The cost of the tickets is approximately about $16 billion from US and more money from other countries as well. If you don’t think we can survive, then leave us alone and we will file for bankruptacy and let’s see who will get fucked if we do that…

Here it is…

House passes the granduosly named American recovery and reinvestment plan, and, it is irrelevant at this point. For this plan is not far sighted enough nor does it change the game in any way. But don’t blame the president for this, for he was just working with in the boundaries of consitution. Fact is this is a failure of politicians and ultimately the citizenry. When will legislators realize that idelogy, either left or right, never gets anything done?

Not till, citizens of the country actually kick out politicians off their positions.

Let me elaborate…

Politicians are “ALWAYS” behind the curve in accepting reality, and when idelogy dominates clear thinking, they become spectators rather than take part in actively shaping the future. “Main street” has been hurting for years now. Politicians never really managed to understand that. Why would they? The re-election rate for house is close to 90% and for senate it is about 75 or 80%. And they make the laws. What incumbent would really have to think and adapt when they have a pretty secure career?

So much for my rant, but think about this stimulus plan and i may make sense.

There is a generally accepted, “Conventional Wisdom” (in John Kenneth Galbraith’s words), which says that tax cuts will be spent. Even liberal economists argue that tax cuts for the lower income will be quickly spent. This need not be correct!

Who pays taxes? Thanks to progressive taxation policies, income tax is paid by people who make more than a certain amount of money every year. Sales tax is paid by people who actually buy stuff. Property taxes are paid by people who own property, capital gains tax is paid by people who have invested some capital and inheritance tax is paid by people who inherit.

Except probably for people who have to pay inheritance tax every one else is not in a position to pay any tax. People who loose jobs do not have an income to pay tax on, those who have invested haven’t had any return worth mentioning and other’s who have invested in property are going ask for re-assessment. Finally, given 24 * 7 news cycles, the internet and personal experience pretty much every one out there knows that times are bad and so will conserve their expenditure and so, sales taxes tank.

In this environment, what is the impact of any kind of reduction in taxation? Zilch would be an attractive answer, but i would say negligible is a better answer.

Similarly, cutting business taxes doesn’t make businesses expand during a down turn. It is just a way to improve profitability of businesses there by improving their ROI. Will that impact the “Main Street” in any way? Sorry no dice.

Given all the above, what are all these tax cuts going to achieve apart from bloating up the stimulus plan? Nothing…

Finally, what will actually work? Get people to work, and that doesn’t mean just “Shovel Ready”. Get people to work at a visionary level, some thing like a moon shot, but here on earth. What are the immediate possibilities?

There may be many based on your own perspective on a large number of issues, but… we desperately require some thing huge, visionary, game-changing, “conventional-wisdom” busting, paradigm shifting, build a new framework for the society of the future, in nature.

Green Energy.

This implies, give tax breaks of “very” sizable nature to any thing that will make anything “GREEN” profitable. Hybrid cars? yes. Infact, hybrid anything is a big yes. How about incentives to making homes, public buildings, private buildings etc. reduce energy expenditure? Big yes. Roads, bridges? Big yes. A new power grid? applause. Broadband internet connectivity to every single town / village in the nation? Go now!, a mobile phone infrastructure that actually doesn’t drop calls even with in large cities? big smile,  a national plan to build high speed rail lines across all the big cities? That should get a resounding, collective thumping of the tables across house and senate.

Will that happen?

I doubt.

Elected representatives for the most part don’t need to fear loosing, and when that is the case, they can participate with elan in ideological gamesmanship.

USA is the economic engine for the whole world and the magnitude of the current economic situation doesn’t suit small acts, small moves and small minds.

Here is interesting program on PBS.

http://www.pbs.org/wnet/ascentofmoney/featured/watch-full-program-the-ascent-of-money/24/

Here is the link to an informative article on nytimes, detailing the genesis and circumstances associated with the quantification of risk in a portfolio.

The book mentioned at the beginning of the article “Against the gods” is a part of a series of excellent books by Peter L Bernstein: Capital Ideas, Against the gods and The power of gold. The breadth of history covered in these books along with the analysis and the author’s insights are well worth the time spent in reading these books.

Highly recommended, both the article as well as the books!

I’ve seen enough of the articles, which say 2008 is forgettable or imply this…
Here’s a sample.
Newyork Times:
Markets Limp Into 2009 After a Bruising Year

AP:
Stocks gain as investors try to forget 2008

SanJose Mercury News:
2008: For stock investors, a year to forget

Atlanta Journal Constitution:
Good riddance to 2008; it’s time to start over

Boston Herald:
2008: A year to forget

The National, UAE:
2008 – a year investors would rather forget

Well, let me give you one sentence for all such stories…

Those who forget history are doomed to repeat it….
Don’t ever forget 2008. This was the year which treated us to many historical lessons.
We will forget it at our peril…………….

Here’s how a jeans is made…

Here is a news item on msnbc that made my day……

Apparently US detainees’s in Iraq were subjected days, weeks and / or months of music “to create fear, disorient … and prolong capture shock.”.

Truly funny!

If you haven’t seen the daily show till date, you should…

As an example, this is why i watch the daily show!

http://www.thedailyshow.com/video/index.jhtml?videoId=210922&title=msnbc-replaces-fox-news

NBER finally made its statement and we are in an official recession.

Apparently economic activity peaked in December 2007.

I used to rely on business and financial news sites as well as books to try and understand economy. They would either be too academic (Most books on such topics), too newsy (Fortune & Businessweek) or too ideological (WSJ in particular). Then came the blogs, and in my search for interesting blogs i came across calculatedrisk. That calculatedrisk is a very high quality blog is now old news that i need not emphasize. It is enough to say that even the financial regulators quote from this blog in their reports.

A part of what made this blog worth following was “Tanta“.

There are a lot of people out there who are knowledgeable on a topic, there are a lot of others who can write quite well, there are a few others who are witty, many who have the wisdom borne out of experience, some who are compassionate towards the less fortunate and some who battle a grave disease.

“Tanta” was all the above.

She made a topic widely considered “inaccessible” and “dry”, quite accessible and enjoyable for a lot of us.

Her posts were comprehensive in their coverage of the topic at hand but they were also analytical, incisive and witty. Even as she had scathing criticism for both know-all’s and idealogues, there was compassion evident for the less fortunate. Even as she battled a grave and ultimately fatal disease, she never lost site of self deprecating sense of humor. Her posts would clearly show the gears of her brain moving and what emerged was the wisdom of experience along with concern on how the situation is unfolding.

“Tanta” will be missed, and remembered.

So GS and MS want to become bank holding companies now.

This needs to be thought through properly before any comment is made.

Dow is currently about a 150 points down. Over the next couple of days there may again be volatile swings in stock market. Such volatility may be used to pressure congress to pass paulson’s plan. Volatility in the stock market is natural in such troubled times and should not cause a panic among the congressional representatives or senators. There will be volatility, lets face it, because there is market uncertainity and market uncertainity is caused by a lot of factors including the discussions in the congress.

That in no way implies congress should capitulate.

The bailout plan is not yet passed by the congress and oil is already above $104.

Why?????

Here’s the logic, US government is giving a bailout to the wall street, but FED has to create those $700 billions. Which means, huge amount of deficit in US. That implies US currency dollar will loose its purchasing power and Oil is sold in dollars across the world. Since, dollar will loose its purchasing power, the same barrel of oil will need more dollars to buy.

What will the impact of this be?

Since, oil gets expensive, transportation costs for companies will increase, both to fetch the raw materials to manufacturing plants and to supply finished goods to the retail store. No surprise, businesses will increase prices. So more inflation.

Will the FED be able to increase the short term interest rates to beat the inflation? Sorry, that won’t happen because economic growth rates are anemic right now and so we need to keep interest rates low to ensure more lending to businesses.

If you think about it, will keeping the interest rates low mean there will be more economic activity? Not really, since, economic activity is not mandated by the low short term interest rates. Low short term interest rates are just a minor push for the system. They do not necessarily imply banks will lend to businesses, as was evident over the past year or so.

Do read this post on bailout plan.

Congratulations on this great first post.

So federal government will buy all these unsellable mortgages from financial companies. And then will ask these very same financial companies to manage these mortgages for it.

I wonder if they could keep a straight face when they were thinking that up.

What next? No-bid contracts for managing these mortgages?

What is with the time horizon of the bailout? Check this link.

Apparently, democrats want to limit executive compensation as a part of the bailout plan according to this report in the new york times. Apart from being symbolic, it is silly, divisive and very difficult to arrive at. Unless it is being used as a negotiating tactic, this proposal has no place in this law.

The really important aspects are valuation of these mortgages, holding accountability, ensuring no repeatition of such a crisis, and gaining a tax payer upside for the future. I do not see any of that in this plan.

As surreal as it may sound, paulson’s corporate welfare plan in the guise of an economic bailout plan can not exclude foreign corporates. And that’s not because of the reason that paulson gave on the weekend talk shows (You know that one about “even a foreign corporate with significant american operation”).

It’s becuase most of these target companies to which paulson wants to provide welfare are not US companies, they would have a hierarchial structure and the holding company would usually be in a tax heaven. So including so called foreign corporates is not making such a huge sacrifice as they project. Its a basic necessity to ensure corporate welfare reaches its intended targets.

By the way, even if corporate nationality mattered, it is easy to bypass that minor irritant. excluded corporates will simply back date and sell their junk to an included corporate. They will have to back date since the plan covers all operations till last week, which is a joke!

The more you take in the details, the more this corporate welfare plan looks like some thing out of a thirdworld, crony capitalist, kleptocracy.