My goal is to write one 'Pattern Recognition' a week. Just the top 3-4 stories that stayed under my skin. Here's what stuck this week:
- Caught Red-Handed in the LIBOR Cookie Jar: If you wonder why Americans are losing faith in their institutions, look no further than our Banking System, where Matt Taibbi of Rolling Stone has done exceptional reporting on the systematic manipulation by Big Banks of LIBOR, the London Interbank Offered Rate. If you are not familiar with LIBOR, it is 'only' one of the most common metrics that lenders use to set lending, credit card and bond rates for consumers, businesses and municipalities. In other words, the fact that major banks could manipulate the rate to grab additional profits, speaks to the endemic corruption across the banking industry. In this particular case, several of the major banks (Barclays, GE Capital and Royal Bank of Scotland are the known names so far) were caught red-handed in bid rigging scandals constructed to skim billions of dollars from the already thinning coffers of cities and small towns across America. This particular industry, whereby the banks help municipalities by issuing municipal bonds on their behalf, is a $3.7 trillion dollar market. If you read HERE, HERE and HERE, you get a sense of the persistent, ubiquitous nature of this type of thievery, where good old-fashioned graft expedites the process. If anything, the challenge for folks like Taibbi is to reduce the mind-numbing numbers and complexities of the transactions themselves into memetic pictures, graphs and narrative that forevermore changes public sentiment about 'too big to fail.' Or, as Stalin once said, "The death of one man is a tragedy; the death of millions is a statistic." Money shot from the Taibbi piece: "You find yourself thinking, America's biggest banks ripped off the entire country...every day, for over a decade!"
- Does IT Still Matter? Ashlee Vance writes in today's Businessweek, 'It Took Less than Ten Years for IT Not to Matter.' In the article, he essentially argues that most companies have no business trying to tackle IT in-house and that they should rent such services, which generally speaking, translates to "trust the cloud." Talk about confusing attributes with outcomes. As I wrote for GigaOM in a recent analysis of the travails of 'bricks and mortar' retailers (' Retail needs a reboot to survive'), businesses need to differentiate, which fundamentally is about integration. Sure enough, the most successful companies on the planet hugely use IT to differentiate. Thus, if there is any moral of the story from enterprise struggles with IT over the past decade, it's that too few of them had a clear, reasoned understanding of: A) The role that technology could play in their business; B) The cultural barriers to overcome; and C) The specific outcomes needing to be realized to make it worth the effort. Netting it out, a big part of the problem is that the 'I' in IT stands for information, when it needs to stand for integrated, coupled with the fact that most companies tend to be silo'd into business units, which is the antithesis of integration, something that I wrote about in 'DIS-Integrated Systems: A Parable.'
- Twittter-nomics: Twitter continues its path to maturity. On the positive side, they are building serious conviction about delivering a great and consistent user experience via Twitter Cards, a structured tweet model that I suggested should their path to monetization way back in 2008 (see 'Twitter-nomics: Envisioning Structured Tweets.'). One the other hand, under the double-speak of delivering a consistent user experience, they are starting to clamp down on third-party clients. You know, the same third-party clients that made the Twitter experience so great before Twitter decided to co-opt them. It sucks, but then again, it amazes me how few grok that APIs (and platforms in general) are like toll bridges. They can lift up and disappear, or change their fare structure at any time. Forewarned is forearmed, and free is often too high of a price to pay.