Thursday, December 27, 2007
The President is partially right--the key is electricity--not fuel. Fuel is limited-electricity is not. The President seems to want to ensure that the established powers - oil companies mainly find a way to adapt to the limitations of their industries and find new ways to enslave the American public to their profit structure. Wrong! Just as the President never got the "internets" he doesn't comprehend the Internet model for the transformation of America's energetic infrastructure.
Electricity is fleeting-it doesn't store well and it travels inefficiently. But it can be produced everywhere and through different means. Solar, wind, geothermal, hydroelectric are just some of various means of generating electricity. But lets stick with cars - our most ravenous from of petrochemical consumption. The move to the hybrid is obviously the transition we need to make. But most people don't realize that regenerative braking - the technology that turns a car's brakes into an electricity generator - is a very promising option that actually makes driving your car in a city more gas efficient! The more you brake, the more electricity you produce! Test cars are getting 50 mpg in the country and 70 mpg in the city.
So lets move to hybrids and the electric car. But let the gas produce most of the electricity for now until the nation's electrical grid makes the transition to a more diffused production system that will empower both America's urban and rural areas - instead of dictatorships abroad.
The 810-page energy bill does include nearly $100 million for battery research. Not exactly the Manhattan Project, but the government needs its money for its billion-dollar a day war for oil. Still battery technology is absolutely critical. Just look at my Sony Walkman (Yes, I don't have an iPod) I get about 30 hours of music for each charge! I took it to Hawaii for 10 days and didn't even have to recharge it once.
What seems to be most important to the administration is to replace our current addictions with new ones. Instead of transforming the electrical grid into an internet-like space for e-commerce (energy commerce,)the government seems to want to ensure that established powers are able resuscitate their profit pipelines but configuring the energy infrastructure to their own interests. To avoid this, the government must call for 100 mpg vehicles by 2015. This will shake up the system, introduce "creative destruction" and let the government more the energy markets out of their current state of market failure and help develop a nation-wide system of true energy markets.
Monday, November 26, 2007
Most people believe, incorrectly, the BCS was designed to determine a national championship. It wasn't. It is supposed to assure that the lion's share of the postseason money — more than $100 million — stays in the pockets of the power conferences. For this the best BCS minds had put together a formula that was supposed to largely fence out the lower classes but leave just enough room to mollify Congress and monopoly-charging lawyers.
Well, the Hawaii Warriors got into the Sugar Bowl on Jan 1 by going undefeated at 12-0. They play a somewhat miffed University of Georgia who thought they should have been heading to the BCS Championship against Ohio State. Georgia is good, but they will have their hands full against the scrappiest team of the year. Colt Brennan, rejected in New York, with the Heisman trophy going to SEC sophomore darling Tim Tebow, is going to be ready to roll. And with three (3) All-American receivers, Jason Rivers, Devone Bess, and Ryan Grice-Mullin, they are ready to rock as well. All-American Hercules Satele anchors the O-line missing 3 starters now in the NFL.
But lest you think its the same pass-happy Hawaii of the Timmy Chang era, they rock on defense this year as well. Greg McMackin, the Defensive Coordinator of the Miami Hurricanes and Seattle Seahawks, returned to Hawaii to help the Warriors to another WAC title. He was there in the late 1990s for one season when Hawaii tied for the WAC top slot.
So tune into Fox on Jan 1 for a primetime worthy game. And watch the BCS system cringe as another team emerges from the margins of college football to challenge the dominant stranglehold on bowl money.
Friday, November 2, 2007
“During my service in the United States Congress, I took the initiative in creating the Internet.”
- Vice-President Al Gore on CNN
They now have a term for it - "Swiftboating" a reference to extreme personal attacks and outright lying to gain political advantage that came into usage after the campaign to destroy Democratic candidate John Kerry in the 2004 Presidential election. But in the 2000 election Al Gore was also smeared and ridiculed for his "lies". The above quote was turned in a claim that Gore had said that he "invented the Internet". Here's my (brief) version of how the Internet came about and Gore's role in it.
The Internet's origins are usually traced to the development of the ARPANET, the first packet-switching network that went online for the first time a few weeks after the first Moon landing in 1969. But the Internet really became the Internet years later when new protocols were developed to connect the University of Hawaii via a satellite.
But the real transformation occurred in the 1980s when Gore took the initiative, as he said to help connect supercomputers, around the country. The Supercomputing Study Act of 1986 and other Gore-supported legislation got the National Science Foundation to support linkages between supercomputing facilities at universities and research centers around the country using the ARPANET technologies. Students at one of those supercomputing centers designed a visualization application called Mosiac that was the precursor to Netscape and thus all browser interfaces to the World Wide Web. From there the Internet took off and garnered the attention of the private sphere as well.
Enter the financial markets. By the early 1990s, the financial world had forgotten the implosion of October 1987 and was busting at the seams with institutional money. The telecom market had already been attracting money in the wake of the AT&T breakup and the growth of cable TV and wireless communications. But the Netscape IPO in August of 1995 was arguably the beginning of the "dot.com" frenzy, one of the most extraordinary speculative episodes in stock market history punctuated just a little over a year later with Fed Chairman Alan Greenspan's "irrational exuberance" speech.
Despite Greenspan's warning, stock markets such as the NYSE and the NASDAQ continued to boom and one of the main reasons was global instability in the currency markets and the flight to the "safe" markets of the US. The issue can be traced to the value of the Japanese yen which was reaching highs in 1995 of when it could buy a US dollar for less than 80 yen, roughly making the Japanese economy worth as much as that of the United States. The US attempt to devalue the yen, orchestrated by Robert Rubin would, ignited the financial shot that was heard around the world. The yen lost nearly half its value over the course of the next three years.
The problem was that many countries around the world had pegged their currencies to the US dollar which was suddenly appreciating - very rapidly. (The other side of the JPN/USD equation) The newly termed "Emerging Markets", heavily dependent on exports to the US saw the prices of their exports rise. These countries tried to maintain their currency pegs but were attacked by hedge funds speculating on the currency imbalance. The "Asian Financial Crisis" emerged and spread to Latin America and then Russia by 1998.
The international financial crisis made the US markets the safe haven for world's wealth. The US eased the transition by "bailing out" these countries, in effect, supporting the transfer of wealth back to the US markets and into the dot.coms and telecom industries. The NASDAQ climbed from under 1000 in 1995 to over 5,100 at its peak in early 2000 making Cisco and Microsoft the largest companies in the world (by capitalization). Incidentally, this was time the first accusations of Gore claiming to have "invented the Internet" emerged.
Thursday, November 1, 2007
Wednesday, October 31, 2007
The move was a little surprising after GDP reports showed a decent 3.9% growth on an annual basis. But credit concerns still predominated as the subprime mess still looms across the economic horizon and a growing economy will be dependent on readily access to cheap loans.
Of course, our export economy is also addicted to the cheap dollar, one of the reasons for the decent GDP figures. No surprise that the lower interest rates pushed a barrel of crude to nearly $100 as the dollar weakened on the news of the Fed decision.
Tuesday, October 16, 2007
The company that Charles Henry Dow and Edward Davis Jones created in the post-Civil War era when the US corporation was emerging as a major economic power is almost synonymous with America's economic rise. Dow and Jones first started with the Customer's Afternoon Letter and in July of 1884 the created the first Dow Jones Industrial Average with 11 companies. The WSJ was created in July of 1889 with the explicit goal of offering news, not opinion.
Well, it seems its the same old Fox news. "We Report, You Decide" - give me a break. One indication is that they are rehashing David Asman, who seems to have his microphone so far up... well never mind on that. Asman is proficient in the language of cynicism, the chief currency of Fox News.
Of course we should have expected this, when Murdoch himself announced that the new network would be “more business friendly than CNBC”. I guess that is like Fox News being more administration friendly. CNBC, the financial news network owned by GE, is quick to “leap on every scandal,” said the NewsCorp chief according to according to BusinessWeek.com, whose parent, McGraw-Hill is no small corporation itself. Well, I don't know about you, but I'm sure glad CNBC jumped on that little scandal called WORLDCOM.
Well, perhaps the market is giving us a vote on the FBN. Down 248 points - from 14,160 Monday morning to 13,913 today - is one indication that Fox Business News is getting the thumbs down from Wall Street.
Sunday, October 14, 2007
The issue of global warming is a curious one politically as it places science at the fulcrum of public policy. This places the Right on one side frightened over a possible change in the status quo and enhanced economic and social power going to government. The Progressive Left sees global warming as a vehicle to address a range of problems from dependence on oil, carbon-based pollution, and the possibilities of new industries emerging around alternative energy.
Big Oil and other entrenched powers such as American auto and electricity industry have a lot to lose if the public embraces the threat of global warming. Whereas the war on terrorism has been good for the oil industry, the war on warming will be its undoing--unless it can stall it until it can find ways to capitalize on it.
Tuesday, October 9, 2007
Sunday, September 23, 2007
So I asked my brother about this issue. He is a medical doctor and a bit more clued into health issues than myself. Dah, the reason for the veto is that the bill wants to pay for child health care with a tobacco tax.
Politics over people - little people this time - George havn't you learned anything?
Wednesday, September 19, 2007
A rising tide lifts all ships and that is the thinking behind increasing the money supply. It doesn't directly address the credit problem but the rate cut should stabilize housing prices and help the ratings of those mortgage bonds that now underly the credit system for the derivatives markets.
Lower interest rates weaken the dollar and it was no surprise that crude hit record highs above $80 a barrel. All those Toyotas and Nintendo Wiis got a little more expensive as well.
The high energy prices means that the US will go screaming into a future of alternative energy sources.
Monday, September 3, 2007
So why XML? XML (EXtensible Mark-up Language) has been embraced by the mortgage industry to standardize real estate finance transactions on the Internet. The use of XML has the potential of disaggregating the packaged loans and removing those in trouble and reorganizing them in other packages that can be appropriately rated by Moody's and Standard and Poors.
This hasn't solved the problem of the margin calls as these mortgage bond packages get rated down but it suggests a more flexible system for maintaining the quality of commercial paper.
Sunday, August 26, 2007
Instead of President Gore trying to drag a kicking and screaming America into responsible policies and energy management, the frightening spectacle of Bush's America is driving Americans to thoughtful reflection and purposeful action. American's are waking up to the problems of an oil-based economy and its dangers for the environment, the public's health, and of course, their pocketbooks and wallets. They are also wising up to the politics of fear (Sorry Rudy!) and other national soul-destroying policies such as torture and domestic spying. After seven years of spying on American citizens, continued oil dependence and Vietnam-like quagmire in the Middle East, Americans have moved out of the post-Cold War, good times slumber of the Clinton years.
President Bush has diseased America; weakened it, tarnished its reputation around the world.
But as they say, what doesn't kill you makes you stronger.
Monday, August 20, 2007
A weaker dollar means cheaper exports. Corporate earnings due to global sales have been driving this bull stock market run. Companies such as Cisco, Caterpillar, GE, benefit from the artificial reduction of their product's price. Higher interest rates would (economically speaking) increase demand for the dollar on the FX markets and drive up its price, and thus the price of US made goods and services.
Having said that, look for the Fed to reduce interest rates (Fed Funds rate target) a quarter point to 5% to signal more love to the financial sector and provide some relief for the housing market. Any official move to reduce the rates below 5% would signal a stimulative move and the threat of a recession.
Sunday, August 19, 2007
College football is God's compensation for the end of summer. Some of the people I know may be surprised that I am a big fan - well of my alma mater anyway - the
I say UH is up because they went 11-3 last season and coming because they have a lot of players back and are in almost all the top 25 polls with the Associated Press putting it at #23 today. Despite losing at least 6 starters to the NFL, the Warriors are reloading around Colt Brennan who threw for a record 58 touchdowns last season with a NCAA record of 186 passing efficiency while throwing for 5549 yards. Three receivers with 1000 yard seasons - Davone Bess (96 rec, 1220 yds) Ryan Grice-Mullins (85, 1228), Jason Rivers (72, 1178) are back - and that may be a NCAA first, from an offense that averaged 47 points and 441 passing yards per game and racked up 7977 yards total for the season. Last season was the first time in my life when I prayed for bad field position, knowing that it would only give the QB, receivers, and running backs like Nate Ilaoa more yards to churn up.
So what does this have to do with digital media? The problem for UH is that they are based on the most geographically remote place on Earth. They travel more than any other team – college or pro. That also means that their home games start at 11 pm Saturday or 12 am Sunday morning on the East Coast, depending on daylight savings time. But digital media diversity is working in their favor. Last season I was able to watch every UH game, even though that took a utilizing a combination of Internet, audio and cable TV options. Radio from
But why my love for college football? In a word, - tribalism. Having lived in
The UH football team used to be called the Rainbow Warriors, and although the name is gone, the feeling persists of a wide spectrum of people coming together to play and support this team. Of course, every team has their following. But I’m part of this one.
Oh, and the story of
Sunday, August 12, 2007
These financial instruments have become a crucial mechanism in the new global system of financial hedging. They have become the foundation of, the collateral for, highly leveraged trading strategies that have, for instance, pushed the Dow to 14,000. Now, as their collateral gets devalued, these traders face margin calls – they have to put up more money or default on their loans. Subprime loans make up only 10% of the mortgage market and only a small percentage of them are in trouble but the bundled loans have lost their attractiveness. The combination has created a credit crisis had has only been partially alleviated by the Federal Reserve’s recent infusion of capital into the banking system.
Friday, August 10, 2007
Stock markets around the world have recently been "demutualizing" (going public) to globalize and update their technology infrastructure. The merger between NYSE and Euronext was probably the most significant move towards a new "World Wide Wall Street".
But another factor is the infosphere - the media and financial information system that provides the data, gossip and news that run these markets. Rubert Murdoch and his NewsCorp behemoth recently bought Dow-Jones - one of the most significant financial news organizations in the world and owner of the Wall Street Journal for a staggering $5 billion dollars (Dan Gross wrote that Murdoch paid a "jerk premium" of "somewhere between $760 million and $1.22 billion"). Recently, Thomson, the Canadian media conglomerate began buying Reuters, the founder of the electronic trading environment with Money Monitor Rates back in the 1970s, and the reigning trading communications system. GE who owns CNBC, the dominant financial television news network, considered the purchase but declined.
Bottom Line: As markets continue to go global, Fox is going to be there competing in the financial infostructure of globalized electronic money. God help us all.
Wednesday, August 8, 2007
I say the US has to hold the line and provide a oversight model for the rest of the world. There was a lot of opposition to the SEC when it was created but can you imagine not having the transparency that quarterly filings provide? As we move towards the end of pensions and the rise of the 401(k)s, do you want your retirement savings in companies where the CEOs would not verify the accounting? Most of the costs have already been registered and IT-financial controls are largely automated. Transparency is a good thing.
Saturday, August 4, 2007
Friday, August 3, 2007
This is something I'm thinking through. I teach a number of economic and political economy classes at NYU and have to seriously address issues dealing that abstraction "market".
By Anthony J. Pennings
That is why we have Government
That is why we have Democracy
That is why we have Journalism
That is why we have Education
That is why we have Intellectuals
That is why we have Research
That is why we have Markets…