Archive for December, 2007
Surprisingly, holiday stories can teach us many things about economics.
Consider Mr. Scrooge. He seems to have been a money lender of some sort. He may not have been quite the villain he is made out to be. If Mr. Scrooge were not in the business he was in – lender of money on the expectation of being repaid with interest – the lives of the people of London might have been far poorer. They needed money when they borrowed it, and Mr. Scrooge was willing to part with it for a time. If he was not willing to trust them with his money and if he was not accumulating wealth while practicing this generous art, they would have never had been able to avail themselves of the opportunities that allowed them to start and continue their own businesses and buy and live in their homes.
What about the three wise men and their gifts of gold, frankincense, and myrrh? Matthew 19:24 suggests that the holy family should’ve rejected these gifts as too extravagant:
“It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.”
Far from rejecting them as extravagant, the Holy Family accepted them as gifts worthy of the Divine Messiah. Such gifts vastly increased their net worth. There is no record that suggests that the Holy Family paid any capital gains tax on the three gifts. Hence another lesson: there is nothing immoral about wealth; wealth is something to be valued, owned privately, given and exchanged.
Este artículo me hizo refleccionar sobre el poder que tienen los fondos soberanos:
“El Fondo de Pensiones del Gobierno de Noruega es beneficiado por los ingresos del petróleo y no sólo tiene en cuenta la maximización de beneficios. Dicho fondo desinvirtió de empresas de defensa, mineras o de la empresa Wal-Mart por razones éticas.
¿Pero que ocurriría si los fondos de inversión de países no democráticas decidieran gestionar sus inversiones por criterios políticos? ¿Si en vez de razones éticas fueran amenazas a la seguridad nacional? ¿Serían un peligro para las democracias occidentales?”
The Wii took participatory physical gaming, as seen over the years in Dance Dance Revolution and Guitar Hero, and put it in our living rooms. It never ceases to amaze me what the Wii can do.
Today, I played WarioWare Smooth Moves for the first time, and tried a minigame where you have to dance like the onscreen characters, and the accelerometer in your WiiMote knows if you’re doing it right or not.
With the next iteration, I’m sure we’ll be able to dance against our friends over our broadband connections and see them both represented in the virtual reality that is the game and also through a webcam.
Today, Engadget featured the new video from the now famous Johnny Lee, who has figured out how to use a WiiMote and Wii sensor bar to dynamically change the screen’s perspective when you move your head around, effectively creating 3D immerside environments in your living room. You can’t begin to understand how crazy this would be to use until you see the whole video.
Imagine a 3D first person shooter where ducking behind your couch does the same in the game and protects you from being shot. I hope the next-generation gaming consoles are a lot more flexible with regard to what you can use to control them; if the next XBOX generation of PlayStation doesn’t have IR sensors, I don’t think they’ll sell to their true potential.
The truth of the matter regarding WiMax is that profitability will come fastest to those operators building networks where there is little to no competition – i.e. developing countries.
Why is this the case?
First of all, rolling out WiMax in developed countries costs more. You have to buy ridiculously-expensive wireless spectrum licenses in a government auction, and you’re bidding against wireless and broadband firms with deep pockets.
Your fixed costs out of the gate are outrageous.
Second, rolling out WiMax in a first-world country will meet sustained and heavy resistance from the legacy internet providers (cable, fiber, and DSL) who already have the networks built out and can compete on cost much more effectively. DSL is already being discounted down to $10/month in some parts of the country. Often, Comcast cable can be had for $20 through independent partner installers. I pay a $24.99/month promotional rate by threatening to cancel my service every three months.
To be competitive with the established broadband providers, WiMax is going to have to compete on cost. Now, If we were talking about a clean slate, a country with no wired broadband providers and no WiMax providers, WiMax would dominate because of its lower network construction costs. However, in North America and Western Europe, WiMax does not have this first-mover advantage. They’re going into a market that has entrenched competition – competition that offers speedier service at a lower price.
In addition to their wired-broadband competition, WiMax has to compete with the wireless carriers. If I can get high-speed internet through Sprint, Verizon, AT&T (and soon-to-be entrant T-Mobile), why would I get service through Xohm or Clearwire?
It seems that WiMax is defeated at home and at work by virtue of speed and price, and defeated on-the-go by the wireless carriers who already offer high-speed data.
As it is now, the wireless carriers charge about $45/month for unlimited usage of their data networks. Now, with WiMax entering, they’ll have to charge less, which wil only spark a pricewar. By virtue of their entrance into the wireless data space, WiMax carriers are declaring war on their own margins and hence their own future.
Honestly, entering the wireless data game with WiMax doesn’t make sense: the numbers just dont’ add up.
Back to Wateen though, who is making all the right moves.
They’re backed by Abu Dhabi’s state-sponsored investment arm. And they’ve entered a promising, developing market with little-to-no competition. They offer rates from 512 kbps to 2mbps, and a 10GB plan costs $37/month. A kit to access it costs $300, and can be paid over 12 months if you can’t stomach the big charge.
Now, the downside to operating a network in a developing country is that a large proportion of the population just can’t afford your service. I’m sure that subscription rates will surprise us with their plentifulness. One plan can “wire” a whole workplace with just one connection and a WiFi router, and allows use of VoIP. Schools might use the service to share the connection with hundreds of students. In addition, there is always the possibility of government subsidies to encourage adoption.
In a few years, when Wateen is rolling in cash from their smart investment in a country with little competition, perhaps they’ll be able to buy out the imbecile operators like Sprint and Clearwire. Those two firms will probably be so deep in the hole from years of low margins and high marketing costs that they’ll be able to picked up on the cheap. And that would suit Abu Dhabi just fine.
Avi Dichter, Israel’s public security minister warned Saturday that a U.S. intelligence report that said Iran is no longer developing nuclear arms could lead to a regional war that would threaten Israel.
I don’t see how a intelligence report that’s purely conciliatory could be interpreted as something likely to cause war.
Dichter cautioned that a refusal to recognize Iran’s intentions to build weapons of mass destruction could lead to armed conflict in the Middle East.
Wait, Israel is calling for transparency in weapons development? This coming from a country that has secretly had nuclear weapons for decades?
Mr. Dichter, you might stop for a moment and think about Dimona, then get back to us when you’re not such a hypocrite.
A satellite photo of a vineyard? Green algae on a slide? Keep guessing. To zoom to the original and gain some perspective, click on the image.
Subprime, the buzzword of the year, is getting used way too much. Here’s a classic example of buffoonery courtesy the Bay Area’s NBC affiliate:
“California is struggling with shrinking state tax revenue from the meltdown of the subprime housing market and the credit crunch on Wall Street.”
Really, I wish I could stop laughing. The credit crunch on Wall Street has nothing to do with the state of California’s tax revenue, and, in addition, is there such a thing as a ‘subprime housing market’? Don’t we just call those trailers?
This news outlet really needed to ask Arnold Schwarzenegger, the story’s focus, what is actually causing the revenue shortfall. Perhaps he’d shine a light on more accurate causes than would a worthless intern copy-editor.
Keep trying, NBC11.
A shooting star may inspire you to ‘aim for the stars’, but don’t follow the shooting star too closely, for it will have a quick and undignified end.
It seems my biggest successes in life are prompted by visions of dazzling spectacles that I later find to have been misleading or entirely false.
For instance, I was inspired to run my first full marathon when a friend told me that she and her best friend had ran the Seattle Marathon the previous year, in 2001. If they could do it – I reasoned – then I could too.
I set out to match their feat. I ran twice a day through August (and lost some 20 lbs. that month alone – ask my mother if you don’t believe me). I joined the Bellevue High School Cross Country team, and, from the beginning of September through late November, ran three to six miles with them every day. I bettered my 5k time each week all the way down to 18 and a half minutes, which is a fantastic time for a first-year runner. My mile time improved as well. I ran one in 5:07 and finished in the top 8 runners on our team, beating a few friends of mine who’d had the advantage of running Cross Country for three years before me.
I ended up running the marathon in four hours and four minutes; hardly enviable for marathoners but, because I met my goal, it was a monumental success.
After I’d ran it, I found out that the girls who’d inspired me to do so had not, in fact, ever ran a marathon. I’d been lied to.
I was inspired to start ScarletStorm many years ago by a story of a young man that my sister told me about, Zach Michaelson. She told me that he and his father had started a hedge fund, and, after a short period of success, went on to sell it to the British bank Barclays. He did this all at the tender age of 23. I’ve recently found Mr. Michaelson to be a fraud (courtesy the New York Post, New York Magazine, and DealBreaker, among others). He lied about having a doctorate, invented a superfluous job title, and is quite possibly the biggest d*****bag I’ve ever had the misfortune of meeting. When I unexpectedly met him at a party in Manhattan a few months back, he had the gall to berate me for not having any business cards on my person (I’d just returned from three weeks vacationing on the French Riviera and in St. Barths, which is not exactly conducive to bringing a box of business cards). He then condescendingly asked me if I even had a business card, and then proceeded to scribble his own email address on a weathered scrap of paper. You’ve sure got a nice business card yourself, Zack.
Another person who has inspired me, Mario Gabelli, is looking more and more like a con man. I just read this article on CNN Money that paints the uber-visible money manager as a shady man to do business with. He’s been sued by former business partners for stiffing them in an IPO and then offering to buy out their equity stake at pennies on the dollar. Then, he created shell companies headed by clients and close acquaintances that were used to buy wireless spectrum licenses from the FCC at discounted rates – licenses that were meant to go to mom-and-pop telecoms headed up by minorities or women.
Perhaps Mr. Gabelli is just a businessman trying to make a buck any way he can. Or perhaps he’s just another one of my inspirations who has turned out to be a fraud.
Here’s to being inspired.
Natural selection is alive and well. What’s driving the selection, and where will this selection take us? Attractive or wealthy people are each more likely to pass on their genes than the relatively poorer and uglier. This would suggest that, as a population, humans are getting better-looking and better suited to earning wealth.
However, the people who seem to be breeding most are the poorest and stupidest.
“Evolution is a double-edged sword,” says University of Utah anthropologist Henry Harpending. “What evolution cares about is that I have more offspring. If you can do it by charming and manipulating, and I’m a hardworking farmer that’s going to feed the kids ten years down the road, then you’re going to win. Hit-and-run, irresponsible males are reproducing more. That isn’t good for anyone except those males, but that’s evolution.”
One of the reasons that humans have historically wanted to procreate more was the labor motive: more children meant more workers to reap the wheat fields or milk the cows. Increasing the size of your family was like expanding a business, with each incremental birth bringing additional earning power, sustenance, and stability.
Modern humans, however, utilize technology like heavy machinery to nearly automate food production and distribution. It’s a much more efficient process, and manual labor simply cannot compete on cost with mechanized business. Procreating, then, no longer adds any value to a family because adding more unskilled labor to the family unit is more of an economic burden then an economic blessing. It just doesn’t make sense to turn out 10 kids anymore.
The systems that made sense in the past (constant procreation) just don’t function in modern society. Because food and raw materials are provided at low cost by modern technology, the logical thing for humans to do is to specialize, which is exactly what humans have been gravitating toward for the past hundreds (and indeed thousands) of years. Instead of making your living by gathering food by hand, you could choose a much more valuable path: that of being trained in engineering and eventually building a thousand tractors to gather food much more effectively than by hand. Those who specialize are rewarded, and those who cling to an outdated paradigm suffer.
A small group of specialized (read: educated) people provide significantly more value than a large group of unspecialized people.
Sadly, educated people are procreating less than uneducated people. There are myriad reasons for this, one of the biggest being that getting an education and using those skills to contribute to society takes a lot of time. If you’re a constructive, contributing member in society, you might not have time to commit to raising children. Raising children only diminishes your own contribution to society because it requires a lot of your time. The only way that raising children would increase your contribution to society is if the quality of upbringing you provide is such that they grow up to be an even more specialized contributor than you, and provide more than is lost in the first place when you allocate time away from work to nurture the child. A good example of this is Einstein’s parents. Perhaps they would’ve themselves contributed more to society by working more instead of spending time raising a child. They took a chance, and society is all the better because they birthed and nurtured a genius whose contribution went far beyond theirs.
Going back to modern natural selection, there are still groups who have stuck to the outdated model of constant procreation. These people are clearly not intelligent: they prefer quantity over quality in offspring. Society does not reward them for being so backwards, yet somehow they don’t seem to see the err in their ways. If unintelligent people are having the most children, while the educated and specialized are too busy contributing to society and helping others, natural selection will favor the stupid and poor. Humans are getting less intelligent.
What can be done? There’s an easy answer, but it’s not a very politically-correct one. We should restrict the amount of children that one could have using either laws or incentives so that we can ensure quality of offspring is the norm and not quantity. I wholeheartedly prefer using financial incentives (making payments to those without children, taxing those who do) over criminalization. Using financial incentives, only the rich, successful, and educated would be obliged to procreate, while those who cannot afford the privilege because of their stupidity or lack of motivation would not procreate. This system would likely lead to better prepared people, and more importantly, a better future for humanity. Natural selection can be controlled or influenced by a new system to improve humanity over time, all that’s left to do is implement it.
(I was partly inspired to write on this subject by an article in Wired Science, “Humans Evolving More Rapidly Than Ever, Say Scientists” by Brandon Keim, which chronicles a study published this week that concludes that “the speed of human evolution increased rapidly during the last 40,000 years — and it’s only going to get faster,” and that “selective pressures are still at work; they just happen to be different than those faced by our distant ancestors.” My topic drifted so much that I only ended up referencing a quote from the article once, whereas I’d originally intended to quickly summarize the study (which can be found here: Link.)
Domestic Spending Slowdown?
Economists and retailers everywhere are freaking over the possibility of a slowdown in consumer spending, and they’re looking for signs of weakness during the oh-so-important holiday season.
Americans’ spending is no longer being sustained by cheap credit extended by banks against a home’s rising equity, as real estate sales (and prices) have stagnated.
Commentators and economists have been hypothesizing that this would hit the aspirational luxury retailers hardest – Coach and your local suburban-mall Tiffany & Co. are two strong examples of stores that are believed to be the hardest hit this season.
Are we in the beginning of a retail slowdown?
Read the rest of my article over at FashionInvestor.com to find out.
It’s so popular – the French do it and now so are the Iranians. I’m talking, of course, about nuclear power. Wired’s got a fantastic interview with Gwyneth Cravens, a former no-nukes protester who is out to save the world – with nuclear power.I completely agree with Ms. Cravens.
An interesting statistic comparing the waste levels produced by individuals over a lifetime:
Cravens: “A family in four in France, where they reprocess nuclear fuel, would produce only enough waste [from their own energy use] to fit in a coffee cup over a whole lifetime. A lifetime of getting all your electricity from coal-fired plants would make a single person’s share of solid waste (in the United States) 68 tons, which would require six 12-ton railroad cars to haul away. Your share of CO2 would be 77 tons.”
That statistic alone sure makes nuclear power sound a lot sexier than coal.
I think the real best solution is energy diversity (wind where it makes sense, same for solar) but with more investment going to the cheapest production methods (coal and nuclear). If we can get “clean coal” up and running, that’d be fantastic, because it’d be cheap to maintain our existing coal infrastructure. The United States is often cited as being “The Saudi Arabia of Coal”.
Rev. Michael Dowd is preaching a surprising message: Evolution is real and science points to the existence of God.
Here are some choice quotes from an interview done with him by Wired:
“Evolution helps us understand the challenges of life. Why do we struggle with what we struggle with? Traditional religion says it’s the Fall, it’s original sin. But from an evolutionary theology perspective, original sin is a way of talking about what we call animal instincts.
Take testosterone: The more a person has, the more a person tends to take risks and think about sex. If people think they have sex on the brain because their great-great-great-grandmother ate an apple, or because they’re fundamentally flawed, then they won’t be able to live with integrity. Evolutionary psychology gives us a way of understanding our true nature. It makes it easier for us to live.”
“Who of us would let a first-century dentist fix our children’s teeth? Yet every day we let first-century theologians fill our children’s brains.
There’s a difference between flat-earth faith and evolutionary faith. In flat-earth Christianity, the core insights — sin, salvation, heaven and hell — are understood in the same way as when people first formulated ideas. I still value the same concepts, but interpret them in a radically different way.”
Science can’t disprove the existence of God, and religious scholars can’t seem to poke holes in evolutionary science. This man might just come bearing a better way for scientists and religious people to think about the world, and just maybe be in agreement.
Perhaps I’m a hypocrite: I don’t think anybody should utter the name Zango, but here I am.
Bellevue, Washington-based Zango is an unethical business. The Federal Trade Commission agrees with me: they fined Zango $3 million earlier this year for using “unfair and deceptive methods to [install] adware and obstruct consumers from removing it.”
Why am I bringing up these facts? I think Zango should be shut down. I think potential employees of Zango should avoid employment there just as one would avoid joining Hitler’s war machine. When I saw recently that the University of Washington’s Foster School of Business was hosting a representative from Zango at an on-campus event, I called on attendees to awkwardly stare at the Zango Account Manager (we’ll call him J.S.) and accidentally step on his shoes throughout the night in order to ‘stamp out’ irreputable businesses from recruiting on the UW campus.
Then, yesterday, the Seattle Post-Intelligencer’s John Cook wrote about Zango’s recent hiring of a former Microsoft employee and left Zango completely unscathed, calling it a relatively legitimate-sounding “online advertising company”. To be fair, it was just a tidbit about a hire and a promotion, not an in-depth review of the business. A part of me thinks this is admissible, because, as a journalist covering the local technology industry, Mr. Cook is obliged to spread information about industry happenings. To discern whether I should be outraged or content, I went ahead and asked the community. Today, upon checking the link and the subsequent discussion, it seems that others feel the same way. An anonymous, unregistered user wrote:
“The only Zango article I’m ever going to be happy to read will be the one where the Attorney General closes their corrupt a**es down. I’m ashamed that a business like that exists in my town.”
Perhaps it’s a little early to claim a victory for my feelings toward Zango-I count only two responses and it’s been only a day since publication.
Still, do we as a society approve of publicizing illegitimate businesses in the media? It looks like the people have spoken.
Update: Zango’s Director PR gives his opinion, along with an olive branch which I will publish out of respect for full disclosure:
I saw your comment about Zango on the Seattle PI venture blog and wanted to reach out.
While there is no doubt we’ve run into issues in the past — issues we’ve acknowledged and owned up to emphatically time and time again — but today Zango has emerged as the company actually leading the Internet industry when it comes to downloading software over the Web. We do it better than anyone else and with the consumer in mind through plain language notice (not just a EULA or Windows dialogue box), consent, easy uninstallation and respect for privacy.
We are doing all the right things and I’d welcome the opportunity to chat further about our efforts and your misperceptions, which I can understand. In addition to the tremendous work done to date here at Zango, there is still much to do to improve our standing in the Internet and business community.
Below is my email and phone number. I’d welcome the opportunity to connect.
To which I responded:
I’m glad to hear your response, Steve. Nobody deserves to be lambasted publicly without hearing the other side of the story. Perhaps we’re a similar breed of people, those who appreciate transparency. I haven’t made up my mind about your firm because, to tell you the truth, I’m not 1000% familiar with every single thing that Zango does. Anything I say or write about Zango in the future would definitely be accompanied by a rebuttal from you guys-I don’t want to portray anything as one-sided.
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