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Ruminations on Retail: Why We Launched BrightStreet Ventures

Screen-Cap-Web

(Guest Column: Western Real Estate Business - July 2014)

Consider the plight of the retailer: the rise of Amazon has attacked the margins that local retailers count on for survival.

As a result, numerous segments, including video stores, music stores, computer stores, bookstores, electronics and office supplies are either dead or dying. Sadly, this is a trend that is permanent and accelerating.

Meanwhile, the ascendance of the smartphone, led by Apple’s iPhone and Google’s Android is changing everything.

There are about five billion devices creating universal experiences that are social, real time, data smart, perpetual, personal and just-in-time capable via millions of mobile apps.

This emerging reality gets to a universal truth of our time; namely, that software is ‘eating the world,’ and in the process, reshaping virtually all industries.

It’s given rise to Uber, Amazon, Airbnb, Google, iTunes, Facebook, Maps, and Yelp, but can there be any doubt that retail, media, marketing, manufacturing, transportation and telecom are being forever changed in the process as well?

In retail, for example, mobile has given the consumer the power of all knowledge at their fingertips. With this power, he or she can discern fair price or pursue a better deal – often online – in very few clicks.

It’s also empowered consumers to act as social amplifiers of reputation and experience. An extra half-star rating on Yelp can cause restaurants to have a full house 19% more frequently.

Critically, though, mobile plays a game-changing role in what is known as omni-channel. In the world of omni-channel, the consumer’s frame of reference encompasses online, bricks-and-mortar and mobile possibilities.

When done right, omni-channel can yield a 6X sales lift from the customers that engage with the merchant on all channels, including online, via mobile and in store. Such has been the experience of Walgreens.

Similarly, the rise of big data and data science is changing the means of analyzing, targeting and customizing the field of play that exists between retailers, consumers and shopping center owners.

Mobile has also disrupted the traditional ways that merchants acquired and connected with customers.

The customer acquisition tool kit used to consist of yellow pages, direct mail and newspaper ads. While your eyes can tell you that these marketing segments are decidedly unhealthy, there’s an even more obvious barometer: ask yourself if your children have ANY connection to yellow pages, paper mail, or print newspapers?

This is the new reality for retail. Mobile, when combined with data and the cloud, completely changes the game.

This is also why is a shopping center developer decided to launch a technology affiliate like BrightStreet Ventures.

The simple truth is that we are working backwards from the consumer, what they expect and what is possible in this new era. We are also looking at the challenges that retailers face, and our role as owners and operators of shopping centers in fostering their success. That’s the defensive side of the equation.

In terms of offense, we believe the convergence of bricks and clicks represents one of the great opportunities of the next decade.

That is why every venture that emerges from our model needs to make sense as business offering enduring value.

We also believe that by sharing what we learn with our peers, a rising tide will lift all boats, which is very much in our interest.

That’s the backstory on why we created BrightStreet Ventures. The larger market has validated where we’re headed with mobile marketing innovation and real estate business intelligence (our company portal, powered by our Datex Property Solutions affiliate, garnered an ICSC MAXI nomination).

We had the opportunity to unveil this vision, and formally launch our new venture at ICSC RECON in Las Vegas, and the response was incredibly encouraging.

Mark Sigal is the Managing Director of BrightStreet Ventures in Woodland Hills, California.

Related

  1. Understanding Retail's Reboot: Four 'Big Picture' Trends
  2. Retail Needs a Reboot to Survive
  3. How Uber is like Southwest Air - The Art of Reinventing an Industry

July 18, 2014 in Amazon, Current Affairs, Mobile, Pattern Recognition, Retailing, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Progress Waits for No One, and Other Harsh Truths

Progess

There is a story that I like to share every time a news item pops up lamenting about the "good old days"...

The late Herb Caen (iconic San Francisco Chronicle columnist) once wrote an opinion piece about the worsening state of San Francisco and in particular, one of its main corridors, Market Street.

In it, he lamented about how this thoroughfare was always under construction, how the city’s charms and enduring traditions were getting swept aside by outsiders, and how the place was becoming less and less hospitable to locals and long-timers.

This harsh "truth" forced Caen to wonder if perhaps San Francisco’s best days were behind it.

But Caen was setting up the reader. In the next paragraph, he would reveal that, “Would it surprise you to know that I wrote this piece way back in 1954?”

Caen’s point was that then, as now, every generation sees their generation as the Real Generation and the Right Approach, when in truth, progress just moves Forward. It waits for no one.

Hence, the locals of San Francisco, circa 1954, saw a city losing its mojo when in truth, it was just moving forward with the times.

Thus, decades later it should be unsurprising that today’s locals would reach the exact same conclusions about the “good old days,” with the good old days being their particular generation's definition of good and normal.

Progress Just Moves Forward

I thought about this truth when the iPad came out, and the old guard railed against it as a "step backwards" for computing, which I wrote about here.

I think about this truth every time I hear someone lament about the loss of newspapers, bookstores and magazines (I feel your pain...though Joe Nocera's sermon against Twitter in the New York Times was a classic 'false dichotomy').

I think about this truth whenever I see another retail segment go from "darling" to deceased (retail NEEDS a reboot).

And, of course, I painfully think about this truth reading George Packer's 'The Unwinding,' beautifully written narrative that captures the convulsions and cardiac arrest occcuring in numerous cities across America.

Yes, progress isn't always pretty. Sometimes it brings beauty. Sometimes it brings change. Sometimes it is just brutal and downright ugly.

But, also know this. Progress doesn't care. It just moves forward. For gravity...just IS.

Related:

  1. Grumpy old men, the "Inmates" and margins: iPad and the future of computing (O'Reilly)
  2. Old Media, New Media and Where the Rubber Meets the Road (O'Reilly)
  3. Retail Needs a Reboot to Survive (GigaOM)
  4. The Jobs Engine: The Art of Reinventing an Industry (GigaOM)

July 18, 2013 in Coaching, Current Affairs, Ideation, Pattern Recognition, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Predator, Parasite or Protected Class: The NEW Theory of Relativity

New-Relative

So we completetely borked the budget ceiling negotiation last week, leading to the S&P downgrade of America (read, 'What Happened to Obama' for a brilliant analysis on Obama's utter failure to establish a coherent narrative as president).

And if that wasn't enough, last week also underscored how completely the patent laws are screwed up to the point that they're officially a drag on innovation - the exact opposite of what patents were designed to do (read the transcript from the NPR program, 'When Patents Attack' to see what I mean).

Somehow, we can no longer figure this stuff out, yet recent history suggests that we can figure out how the universe works, can figure out how to thwart Hitler and rebuild Europe after World War II, can put a man on the moon, can create the Internet, etc.

Given this seeming asymmetry between the two realms, let me submit the following:

  1. While everything is more complex than you give it credit for; and 
  2. The weight of self-interest meaningfully incentivizes people who **should** know better to nonetheless screw the pooch for everyone else;
  3. We don't have to be dumb and blind about it.

Much of this starts with changing the old memes (i.e., ideas that virally propagate), and replacing them with new memes.

Simply put, while form logically follows function, there is a larger truth that our thoughts on the "definition of the situation," including both specifically desired outcomes and tangible constraints, fundamentally instructs function.

In other words, our thoughts codify function, which give a mandate for form to manifest in a particular way.

In fact, there is a specific term that defines how we process congruities and incongruities called Cognitive Dissonance.

It basically suggests that if your actions and perceptions are out of whack, either you need to change your actions OR you need to change your perception of the situation as it exists. To NOT do so is physically and mentally uncomfortable.

A simple example is that if you think that you are fat and need to change your diet, one of two things is going to happen the next time that you are chowing down on a deliciously greasy pizza.

One, you will feel that eating that pizza is incongruent with your new aspirational image for yourself, and stop eating pizza so much.

Or, two, you will decide that being thin is over-rated, all relative, and more to the point, life is too short not to eat pizza, which is so delicious.

So, what does this have to do with the mess in our economy, our governance mechanisms, and the rot festering within society in general?

Most fundamentally, it's that changing the narrative and the actual words that we use to establish that narrative is a first, integral step to manifesting real change.

Putting it to the Test

Therefore, next time you encounter a story about Wall Street, Insurance Companies, Congress or Special Interest Groups (like Unions, Patent Lawyers, Environmentalists, etc.) start training your mind to be on the look out for:

  1. Predatorial Behaviors: Ask yourself if the behavior being discussed is a case where one individual or group is taking advantage of another group by virtue of power, influence, wealth or knowledge.
  2. Parasitic Entities: In order to maintain its existence or position in the economic, societal or organizational system that it participates within, does the entity leech off of the lifeforce, blood, energy or money of others? Does it remove more from the system than it puts in?
  3. Protected Classes: Does the indvidual, industry group or company have undue influence on the rules that define its governance, and the methods and consequences by which those rules are enforced?

Now, recognize that most stories will be presented according to False Dichotomies, such as being "pro" this (e.g., business, big government, unions or jobs) or "anti" that.

It's far easier to tell a story, and sell a desired outcome, such as passing a bill or changing a rule, when the conclusions are presented in black and white terms.

Don't get fooled by this anymore. When you hear the facts presented in a way that frame the topic as an either/or scenario, be willing to question if the scenario presented is indeed a false dichotomy, and be rigorous about: A) consistently calling it such; and B) codifying what a reasonable "and" scenario looks like.

Understanding "Relative Yields: Everything is Relative

Similarly, the efficacy, or goodness, of specific outcomes are defined by the qualitative and quantitive content of what they yield.

Most yields are relativistic to multiple variables. Ask yourself what the yield is locally in your own backyard, for the larger region or nation as a whole, and/or globally.

Think about the actual impact both in the short term, measured in days, weeks, and months, and in the long term, over many years.  

Also, ask yourself if there are collateral impacts that further shape yield. For example, a program that results in less expensive clothes for consumers, but that also has the collateral impact of jobs moving overseas can be good or bad, but the collateral impact is real, and needs to be factored into relative yields.

Finally, when all else fails, simplify the topic and be surgical about the words that you use to codify it. If an individual did this same type of action to another individual, would that action being considered reasonable or lawful?

If not, then ask yourself, why it's reasonable at the governmental or corporate level. There may be valid reasons, but learn to articulate and understand the "What" so as to ask "Why," and be willing to challenge conventional wisdom by saying, "So What."

UPDATE: Mark Cuban has written an excellent post arguing that we should get rid of software and process patents completely. Worth a read.

Related Posts:

  1. The Great Reset: Why tomorrow may not be better than today (O'Reilly Radar)
  2. Why the Malaise in our Economy (and Society) is a case of The Innovator's Dilemma
  3. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
  4. Assertion-based Reasoning: What, Why and So What

August 08, 2011 in Coaching, Current Affairs, Economy, Pattern Recognition, Policy, Politics, Values | Permalink | 0 Comments | TrackBack (0)

The Great Reset: Why tomorrow may NOT be better than today

Reset Growing up in the waning days of the Carter Administration, I remember a societal malaise that was pervasive to the point of toxicity. A common sentiment then was that our best days were behind us.

How did we get there? Most fundamentally, a paralyzing period of stagflation meant double-digit interest rates and no economic growth.  But, it was also fed by an energy crisis; the first signs of Islamic fundamentalism’s assent; and a lengthy political hangover that followed a scandal in the White House.

But as they say, it’s darkest before the dawn, and in a flash, the malaise was gone. Sure, the next 30 years brought with it booms, bubbles and bursts, but the general sense, and one’s expectation was for a better tomorrow. 

Today, however, I’d argue that our present no longer sits at such a binary, simple and logical place where tomorrow is necessarily better than today. 

Simply put, our society is undergoing a ‘great reset,’ where for many the future is a very scary place.

Understanding The Great Reset

 Systemically speaking, these are confusing times. The recession is technically over, and you can tangibly see that fact from an economic growth perspective.

Yet, 2.5 years later, where are the jobs, and equally worrying, where are the meta-drivers of job growth?

Now I don’t have to tell you that a jobless recovery is an unacceptable indicator of systemic success when you consider the sheer size of the unemployed, and equally troubling, the under-employed.

Similarly, is there any question that in qualitative terms a certain chunk of society is getting dis-proportionally squeezed – on numerous fronts?

Case in point, over the past couple of years I have heard a troubling number of stories from people that I know well.  More often than not, these are highly educated, successful people that have gone from flush to crushed, simply because their geographic region has lost its industry footing, or because they’ve hit a certain age where they are no longer desired as a named employee.

1099 is the new W-2

  Form1099R_2010 The uncomfortable truth, in fact, is that everyone is now an entrepreneur, whether they like it or not.

1099 is the new W-2, which says something when you see how even basic services like insurance become exponentially more expensive when written as an individual policy vs. a company policy.  What type of hit does that represent to our national health, both metaphorically speaking and literally, in the pocketbook?

Homeless Children: Do we REALLY care?

  Hard-Times-Generation Along these lines, I was drawn to tears watching a recent CBS 60 Minutes segment about the growing ranks of homeless children, and what that life is like for all parties involved.

It is gripping stuff in that it raises tough questions about what kind of society we want to build, and how much we feel pain when others needlessly suffer.

This all seems so abstract until you ponder its effect in broader terms. For example, in the book ‘Outliers,’ Malcolm Gladwell brilliantly shows how those coming of age during the depression never fully recovered; yet those coming of age in a Post-WWII America flourished, making this a generational imperative.

Tough Questions, Weak Answers

 This is the Great Reset, and an entire generation’s outlook for a better tomorrow lies in the balance with it.

Remember the audacity of hope? It’s been replaced with cynical, political pragmatism where big corporations necessarily get stronger on the premise that trickle down and laissez-faire are universal absolute truths.

Equally troubling, there’s a sense of there being a protected class – seen in many forms across taxation, lobbying, generally accepted conflicts of interest, and low-touch regulation and enforcement.

Consider that it is no longer assumed to be fundamental that there be basic codicils protecting individuals from intentional harm, predatorial behavior and malfeasance (read Matt Taibbi’s truly damning ‘The People vs. Goldman Sachs’ for more fodder on this topic).

Nor do the penalties meet the crime, when this class crosses the line. Why NOT commit the crime if you don’t fear doing any time?

The rest of us are getting the shaft. Health Insurance is more expensive and offensively priced than ever.  It feels almost evil that we went through the Obama Care discussion, only to ‘win’ universal coverage that delivers a level of BS where the net-out is that many insurance providers simply upped their premiums 40% or more, in some cases two or three rate increases in a single year!

Want to really mess with people’s minds? Threaten the availability of their health care coverage both for themselves and their families.

On a lighter note, at least we aren’t suffering from inflation in this recovery. Yes, I am being ironic.

So what’s changed this go around?

  Resolution Trust Corporation logo I remember when I started my career in real estate back in 1988, and the Savings & Loan Crisis was in full force (it was a MUCH smaller version of our current banking imbroglio).

Then, three things came about in its aftermath: 

  1. Real structural change
  2. Functioning marketplace for getting rid of non-performing assets.
  3. Readily identifiable perpetrators went to jail.

Keating Not this time.  Not only did they not go to jail, they didn’t even lose their jobs.

This time, instead, the perps got a raise, and their rank-and-file got to keep their bonuses, even though the ‘profits’ were disproportionately derived from a guaranteed arbitrage gifted by the US Government.

Again, no one has gone to jail, except Bernie Madoff – the guy, who stole from the rich!  That should tell you something.

Looked at holistically, it raises some troubling questions:

  • Is ‘Too Big to Fail’ just a black hole that sucks our economy dry? You can certainly see the ripple effect at the level of state and local governments.
  • Does it matter if we have a middle class? Do we really care? Are our national priorities right?
  • What happens to all of the places that don’t find real industry on the other side of The Great Reset?
  • What if it turns out that the Google Economy is a better destroyer of wealth and jobs than a creator of same? Apocryphal, sure, but it’s a fair question, given the number of industries that have been wiped out over the past decade.
  • Do we miss the video store, record store, book store, consumer electronics, newspaper, yellow pages and whatever intangibles they brought? Will we miss any business that can goes away because it can be digitized, or improved by logistics (ease and convenience of access) or sold less expensively online?
  • Is this the end of serious politics (real solutions, real compromise), and is the Chinese wall between government and private industry gone forever?
  • In the bigger picture, can we ‘afford’ cheap Walmart goods, or does the race to the bottom actually destabilize our way of life by destroying domestic industries and permanently funneling those jobs overseas?
  • Would the Earth stop spinning if the Amazon sales tax exemption was lifted, putting local retail on closer footing with Amazon. Wouldn’t this seem to lead to more local sales? 

Some of this raises uncomfortable questions about the values of a society, how the society holds its leaders accountable, whether opportunity is expanding or contracting and whether the value that our economic base is creating is sustainable or illusory.

Similarly, it begs the question: what is the proper role of government? For example, is it possible that in the same way that the government provided the funding that lead to the Internet and, before that, our national highway infrastructure, that our leaders could seed new types of infrastructure investment in transportation, energy, health and education?

A sobering thought. Take a moment and watch this chunk of Eisenhower’s farewell speech where he warns about the rise of the military industrial complex, and the threat that it represents to society and our way of life (while acknowledging its essentialness and inevitability). Now, replace ‘military industrial’ with ‘Wall Street’ and ‘big corporations,’ and ask yourself if history’s repeating.  It’s kind of disturbing.

Like any diagnosis, the patient (and its guardians) has a say in the treatment. But ignoring the fact that The Great Reset is upon us in the hopes of not upsetting the apple cart of a strong stock market (the Skinner Box of our age) is akin to letting cancer metastasize to avoid the pain that treatment might bring.

Related:

  1. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
  2. Pattern Recognition: Makers, Marketplaces and the Library of the Commons

May 18, 2011 in Current Affairs, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

A Contract to Fuck America - Ruminations on Good Governance and Corporate Irresponsibility

Contract-to-F-America

"Four score and seven years ago our fathers brought forth on this continent, a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal. Now we are engaged in a great civil war, testing whether that nation, or any nation so conceived and so dedicated, can long endure." - Abraham Lincoln

 

A Contract to Fuck America 

We hold these truths to be self-evident...

  1. Partisanship: That we show the conviction and courage to protect and defend the desires of our narrow constituency over the greater common good.
  2. Imbalanced Budgets: May we ignore the premise of fiscal responsibility, focusing instead on the goodness of pork. It's not our money, anyway. 
  3. Inseparability of Corporation and State: The will of the corporation and big business must be kept front and center at all times.  Today's senator is tomorrow's lobbyist, and vice-versa.
  4. Greed is Good, Socialized Risk is Better: Because we know that Wall Street will lead our economy to financial ruin from time to time, the US Government must act as its Safety Net but never try to regulate and police investment vehicles that even Wall Street itself can't understand.
  5. Corporations are not Responsible: The soul of Capitalism is The Corporation, and thus we honor the truth that its sole goal is to maximize profits. In God We Trust that these riches will trickle down.

Thank you. Good night. And God Bless the United States of America.

 

December 31, 2010 in Current Affairs, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Pattern Recognition: Rationing Health Care; Rickrolling; and Capitalism 2.0 or Uh-oh!

Watch CBS News Videos Online

Regardless of which side of the debate you sit on wrt health care reform, it seems clear that until we attack the endemic ‘Cost Inflation’ of Health Care, we aren’t even anchored on a reality-based discussion. 

Nowhere is this topic more paradoxical than in the role health care plays in the process of dying, a topic covered recently in an excellent 60 Minutes segment (click video above). 

Some key factoids to noodle on from the show: 

  1. The vast majority of Americans would prefer to die at home, but 75 percent of them end up dying in a hospital or a nursing home;
  2. Research estimates that 30 percent of hospital stays are unnecessary, and once that Pandora’s Box is opened, an average of 25 specialists individually charge (Medicare in the example) for batteries of tests, x-rays, blood work, opinions, and the like (let alone the risk/cost multiplier associated with hospital-acquired infections);
  3. Eighty-five percent of the health care bill is paid by government or private insurers, not the end consumer, creating an asymmetry of interest between the recipient of the service and the payee of the service;
  4. An absence of universal treatment protocols, measurement and commitment to rapidly iterate those protocols translates to patients un-empowered to advocate on their own behalf and a disconnect between results and costs;
  5. The costs associated with end-of-life care represent the single largest piece of the cost inflation challenge, and while framed as heinously pulling grandma off of the defibrillator, this must be reconciled with the darker truth that 46 million Americans are uninsured.

What’s the right answer in your opinion?

Rickrolling, Breadcrumbing or Spamming?

Spam In the post ‘Meme Schemes and Attention Seekers,’ I took to task the ‘look at me’ aspect of the blogosophere; namely, those who sole purpose seems geared towards media whoredom.  (As a note aside, two of the three people I referenced in the post were gracious enough to acknowledge the piece and share their perspectives on the topic, which was greatly appreciated, as the goal of the post was more about discourse than to dig anyone personally.) 

With that as a backdrop, and to keep things ‘real,’ I want to share a story about how the tables were turned a week later, and I was painted as the bad guy.  

As readers of this blog know, I read, write and comment a ton.  The net effect of this is that many of the articles that I write derive from the posts, articles or comments of others that inspire me.  

In parallel, as much of what I write is topical, I will often find myself reading articles that are directly relevant to an article that I have previously written.  As such, the protocol that I deploy, which I call breadcrumbing (read post HERE), is to write my comment by excerpting a blurb or narrative from a post that I’ve written, reference that post and then link to it in the body of the comment.

In my thinking, I give at least as much as I get relative to extending the conversation, my comments are (hopefully) on topic, and the blogosphere is all about links; i.e., you concisely make your point, if you have deeper thought, you reference it, and the community can decide whether they care enough to delve deeper by clicking (or not).

However, not everyone sees the topic the same way, and upon posting a comment to an article at AppleInsider, a popular Apple-focused blog, a commenter ripped into me, saying the approach violates netiquette, equating it with spam.

Another party in the thread then quipped that “Proper netiquette is that you create an account under a pseudonym such as your name and your favorite cheese and then proceed to post links to your ‘insightful’ posts.” His comment was a total joke, inasmuch as the link provided (http://bit.ly/4kb77v) takes you to a video of Rick Astley singing ‘Never Gonna Give You Up.’ 

250px-RickRoll Rickrolling, for the uninitiated, is the process of leading unwitting readers to view the aforementioned video by positing that a presented link is relevant to the topic at hand, when instead, its pure (but harmless) online shenanigans (read the Wikipedia explanation HERE).

All of this begs the question; Is it okay to reference a post of your own in commenting on someone else's article?  I would argue that there is a hierarchy ranging from OK (directly related – nothing to sell) to Depends (loosely related; or directly related – something to sell) to Not Cool (unrelated, rickrolling or malicious links).

What’s your take?

Capitalism 2.0 or Uh-Oh

Octopus Talking with a friend the other day, the topic of economic “recovery” came up, and while I desperately want to believe a recovery is afoot (but won’t until net job growth begins – not simply a slowdown of job loss), I found myself chiming out about the risk of a second dip or, more likely, a Japanese-style 'lost decade' of economic stagnation.  The argument for this is pretty simple.

One, we are shifting from a credit-driven society to a cash savings-driven one (proportionally-speaking), and the ripple effect of that will be felt for a long time, both in terms of consumer lifestyle-directed spending patterns and businesses impacted by the contracted spend lifecycle associated with it. 

Two, there is so much that we don’t know about what we 'don’t know' about this particular downturn (owing to its global nature, the exoticness of the underlying instruments themselves, and the many, many sectors cross-contaminated by same) that the mechanisms to fix it are likely to be anywhere from imprecise to ineffective to outright damaging, and that creates risk, forces a higher risk premium to fund new efforts, and generally keeps everyone extra cautious, which becomes a self-fulfilling prophecy.

Three, the overhang in commercial real estate is WORSE than the bubble in residential real estate yet it’s not on most people’s radars…YET. It will be soon enough.

Four, while presidential candidate Obama promised to fight entrenched special interests, most notably the finance/banking services sector that, through self-regulation and self-dealing, completely destroyed our economy (while rocking the foundations of our economic system), President Obama has proven unwilling, unable or unclear as to how best to extract ourselves from this 'Octopus' on our economy, best exemplified by the Goldman Sachs Cabal (read an excellent Frank Rich NYT Op-Ed on this topic HERE).

Five, fixing what is broken isn’t free, and while many of us have endured a great deal of financial pain and sacrifice in the past year, the American people as a whole have not be asked to make Real Sacrifice at least 40 years. 

Case in point, we outsource our wars; we borrow beyond our means to support a culture of over-consumption; we continue to gut our public education system because it's more expedient than committing to fixing it; we maintain our dependence upon fossil fuels versus ending that dependency, and the wars, pollution and toxic politics that come with it.  

When will our leaders ask us to make Real Sacrifice, and give us a mission to make the doing worthwhile? 

On this Thanksgiving Eve, I am reminded that we have so much to be thankful for, and that just as the Good Times inevitably come to an end, so will the Bad Times.  What I worry about, though, is that relative to the axiom of a 'good crisis being a terrible thing to waste,' that we are indeed wasting THAT opportunity.

November 25, 2009 in Current Affairs, Digital Media, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Capitalism 2.0: Burning Cortez’ Boat

No Free Lunch This is a post about Safety Nets, and Cutting the Cord.
 
It’s about what I call Capitalism 2.0, a schema for figuring out, documenting and executing the going-forward economic paths and corresponding public policy positions needed to get to the other side of our Economic Storm in direct, honest, rapid and (wherever possible) market-driven fashion.  
 
What follows is a true story to frame what’s going on.
 
A friend of mine is a member of the Top 100 Club in his Industry. A wheeler-dealer, his industry group had a conference to probe everyone’s outlook for the year ahead. Government and private sector economists also took part in the session.
 
The event yielded some interesting conclusions. One, there remains a lot of overhang within the system.  By overhang, I mean a few things:

  1. Assets where a preponderance of artificially high valuations support a financial myth. This has lead to a market where banks sit on falsely valued assets interminably because they expect the government to step in and make them whole.  At the same time, they are reporting record profits, a disturbing asymmetry if you think about it.
  2. Assets that have loans coming due for which there is no one else willing to re-finance, including the CURRENT lender. Logically, this suggests a wave of massive capital calls and foreclosures is coming.
  3. Lenders have been playing a game called Extend and Pretend whereby they avoid foreclosing on underwater assets so as to avoid the day of reckoning.
  4. The bubble that burst in Residential Real Estate is actually dwarfed by the one yet to burst in Commercial Real Estate.

And this does not even touch upon the consumer spending side of this equation, which I will get to in a bit. 

So with that framing, what was the outlook of the attendees, all Big Cos and Experts in their fields?

  1. One third of the attendees think that the year ahead will be better than the last;  
  2. The next third think that we are at bottom, but that we will continue to traipse along the bottom in the year ahead; 
  3. The last third think that things are only to get worse in the year ahead.
In other words, there is no consensus viewpoint. 

The most telling read: an old timer saying that his view of the road ahead has never been so cloudy.

Ruminate on what that means in terms of National Agenda 'plan of record' thinking for a bit.  How do you solve a global problem when no one can agree on the cure and/or effectiveness of different treatment protocols?
 
The Come to Jesus Moment Awaits Us
The-faces-of-capitalism1 The above is an explicit admonition that there is no obvious answer; no clear precedents; and in some cases, that what is broken cannot be fixed.
 
The fundamental reset is that Cheap and Easy Credit is being replaced by rigorous, transparent underwriting standards, and that this reset will change our economic footprint moving forward.
 
And to be clear, credit availability contraction will not be pain-free, as we have seen in the past year.  
 
Given that, we need to holistically re-think things like safety nets, universal services and cost-inflation containment mechanisms with a 20-year horizon in mind, as the 2-4 year horizon variety will not get the job done.  
 
Why? Because the alternative is a slow unwinding and de-leveraging, which history shows us from Japan's lost decade.
 
In parallel, we need to improve upon our policing, enforcement and punishment levers so as to: A) Ensure fair pricing levels; B) Protect against fraud; and C) Make 'service-level' expectations and results transparent to the market.  
 
Sidebar: To help you marinate on the complexity of the topic, watch this 60 Minutes segment on Medicare Fraud.  Just shocking.

 
 
Burning Cortez’ Boat
Burn-boats So many of our consumption patterns have been driven by a lifestyle enabled by cheap and easy credit. As that pattern unwinds, it will materially change the flow of funds through our economy.
 
At the macro level, this means that we must take write-downs aggressively, but factor in the appropriate safety nets.  

In parallel, maybe we also need to re-think the construct of Moral Hazard by holding people personally responsible for the ethics of their companies (versus perennially hiding behind the corporate shell); something we can only honestly do if we have tort reform.
 
This is the fundamental challenge of our time. To stand up as a society and say, “Let me pay the true price NOW so my kids and their kids don’t have to in the future.”
 
When you net that out, it’s akin to Cortez’ Boat; burning the boat so that there is no turning back.

Related Posts:
  1. Engine Failure: When Financial Markets Fail
  2. Capitalism 2.0: TED Spreads and Lessons from Japan’s Lost Decade
  3. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage 

October 30, 2009 in Current Affairs, Ideation, Investing, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Government 2.0 & The Library of the Commons

The short (45 seconds) video post captures some thoughts on what Government 2.0 means to me.

In a nutshell, I am advocating the creation of an online library that consists of the composite knowledge base of every topic where governance plays a part, including both "official, curated" sources and “user-submitted, crowd-sourced” content, such as magazine articles, video segments, industry white papers, blogs, opinion polls and the like.

Imagine the President being able to say, "Go to the Gov 2.0 website, read our official articulated position on Health Care Policy, alongside the official positions of the Republican Party, Big Pharma, AMA and ordinary Americans, and then let us know your thoughts."

To be effective, such a system would need to have clear communal policies, like no personal attacks, clearly delineating opinions versus facts, citing and linking to referenced sources and a reasonably simple structure so those interested in just stats can get that, those interested in just white papers by the medical establishment can get that, and those interested in personal blog/life stories can get that.

Similarly, Gov 2.0 implies a dashboard of key metrics, transparency on their measures and mechanisms to amplify (tag, rate, comment) and disseminate content/positions of interest. Optimally, one system (with open APIs) would enable the Administration, Congress, Lobbyists/SIGs and Consumers to rally their base, and provide common communication paths for meetups, online engagement, capture of the outcome and follow up.

What other building blocks do you see in the evolution of Government and governance?

Related Posts
:

  1. Pattern Recognition: Makers, Marketplaces and the Library of the Commons
  2. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage
  3. Capitalism 2.0: TED Spreads and Lessons from Japan’s Lost Decade

August 28, 2009 in Current Affairs, Digital Media, Ideation, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Making Plays and Dagger Blows: Lakers Win 15th NBA title

6a00d8341c285b53ef011570b52a6c970b-800wi Boston crushed the Lakers last year.  It was over the moment the Lakers blew a 20+ point lead that would have tied the series 2-2, with the Lakers having the next game at home. 

In that game, whether it was ignorant mercy or lack of a killer instinct, the Lakers took their foot of the Celts throat, and the Celtics made them pay dearly.

The collapse was complete when James Posey of the Celtics nailed a couple of dagger threes.  The Lakers never regained their footing, and the 39-point wipeout in Game 6 of the series was the cherry on top of the “Lakers Are Soft” sundae.

Those are the sad and painful facts from last year; so you can really appreciate just how frickin terrific it was to turn the tables on the Orlando Magic in a decisive Game 4 on Thursday. 

When Derek Fisher, whom EVERYONE except Phil Jackson (and the rest of his teammates) had performed last rites on, hit first the dagger three in the fourth quarter to send it to overtime, and then the second dagger three in overtime to rip the Magic’s hearts out for good, it was probably the greatest sports moment that I have experienced.

Great moment of triumph in the “pivot game” of the series – it’s either 2-2 or 3-1, depending on outcome – and in close series like this one, we all know that it comes down to these types of victory-seizing moments (sidebar: that was a classic Derek smile after the OT three).

In the end, that game and the series came down to making plays, pure and simple.  When the game was on the line, the Lakers made them and the Magic didn’t.  End of story.

Having been on the other side of the table at the end of last season, the Lakers were ready when the moment came, proving what we all know; experience matters.

Lakers-celebrate The climb back to their personal Everest is now complete for the Lakers (and their fans), something not lost on this unit.

 “Kobe and I talked about how unreal the journey has been, going from being on top, to being on the bottom, and now rising back to the top,” said Derek Fisher of his long time Laker compadre, and of the journey now complete.

When I predicted that the Lakers would win the series in six games (mea culpa, they were even better than I gave them credit for) it was driven by what I had seen from the team all year. 

Simply put, the team showed a unity of purpose from the start, which they then codified across a breakout season.

When they executed on both sides of the ball, something they did often this year, they were practically unbeatable, and simply beautiful to watch.

And unlike last year’s free pass through the Western Division playoffs, this year they were baptized by the fire of really good series with the Houston Rockets (defense, smarts, hunger) and the Denver Nuggets (muscle, heart, attack) that prepared them to slay the Magic dragon.

I hearken back to a comment by Denver Nuggets coach George Karl in the post-game of the then just completed Nuggets-Lakers series, where he proffered that at the start of the series and through the first few games, he “saw the cracks in the Lakers,” but by the end, the Lakers had sealed up those cracks and become a better team.

6a00d8341c285b53ef011570b52db1970b-800wi Now if this wasn’t enough, there was an X-factor in every series that I call the Anaconda Squeeze. This is a period of the game when the Lakers seize control, usually with a debilitating run that breaks the will of the competition. 

Last night it was a 16-0 run in the second quarter that ripped away any sense of tomorrow for the Magic. 

Any way you slice it, winning 2 of 3 on the road is an impressive way to close it out, and the mark of a champion, a concept that would have been laughable at the beginning of last season when Kobe, disappointed in the quality of talent around him, literally had one foot out the door.

47502821 In reflecting about how the quality of Bryant’s teammates had improved in the past two years, Kobe beamed, "I had a bunch of Christmas presents that came early.  Got a new point guard (Fisher), got a new wing (Ariza), got a Spaniard (Gasol), and then it was all good."

As to the other standouts on the Lakers, all that I can say about Lamar is that to watch him is to appreciate sheer poetry and whimsy in one package. When he was on, which was plenty this series, the Lakers don’t lose.  It’s another dimension of scariness.

In tandem, Ariza was an absolute backbreaker.  He spread the floor, hit big shots and was a disruptor on defense. A true killer.

In many respects, I am most happy for Pau Gasol.  He was FAIRLY maligned last year, and to his credit, he not only answered his critics then like a man, but he elevated his game to a whole other level this year.  Beyond the offensive efficiency, the high basketball IQ and crisp passing, it was the defensive intensity that was most impressive. Consider that in game 5, Dwight Howard faced up Pau 38 times in single coverage and did not score from the field on any of them.

Kobe went into every game this year knowing that he could count of Gasol to deliver precious scoring, rebounding, passing and solid defense, which paid huge dividends in Kobe trusting his mates to make plays.

6a00d8341c285b53ef01156fbff2f2970c-800wi With my other sports teams (St. Louis Rams and Los Angeles Dodgers), I can be admittedly fair weathered.  With the Lakers, however, it is true dedication and love, dating back to a pre-Magic Kareem Abdul-Jabbar team back when Jerry West was still COACHING.

As I have written in other posts, I consider sports to be a great metaphor for life, and specifically look to NBA Basketball as an operatic style of performance.

But here is where that comparison falls short. There is nothing staged about what has culminated with the Lakers emerging as the 2009 NBA Champions.  Grit, experience, desire, talent and execution equaled championship results this year. The best team won.

Stan Van Gundy put it best when he noted in response to a question about Phil Jackson’s dependence on having great stars in his prolific 10 championship titles that he couldn’t think of one team that had won it all even once without having great stars.

When asked about what Jackson means to him, Derek said simply, “Phil allows us to be ourselves and realize our potential. I love that man.”

Phil-hat-x-061409-200 The coach and his quarterback (Bryant) celebrate the game, playing with discipline and a respect (for the game), trusting in themselves and each other.

In the end, they found their game, and locked in on the prize.

What’s left?  One question.  Phil, what's with the hat?

Whatever.  Today we celebrate.

UPDATE1: GREAT Forum Blue and Gold post, 'Deconstructing Kobe' on why Bill Simmons/ESPN Page 2 (one of my favorite writers) comes across as a sore loser in refusing to acknowledge Kobe's growth as a player, and the impact on that growth on the bottom line, the Lakers winning it all.

Related Posts:

  1. The Anaconda Squeeze: Why the Lakers Will Beat the Magic
  2. Lakers-Celts and the Sporting Metaphor
  3. NBA Basketball as Opera
  4. Sweet and Sour Endings: Boston Crushes the Lakers

June 15, 2009 in Current Affairs, Sports, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

True Believers

Wall-street-movie In ‘Den of Thieves,’ James B. Stewart’s brilliant expose on the Insider Trading Scandals in the 80s (that brought down Michael Milken and Drexel Burnham Lambert), you read about people doing unquestionably illegal and amoral things.  Ultimately, they are carted off to prison. 

This storyline plays out again during the S&L Crisis and following the Tech Bubble burst.

But, this time…not so much.  How could that be? 

A better proxy for the present times is the Collapse of Long Term Capital Management in 1998, which required a joint save by the US Government and the major Investment Banking houses to avoid a major earthquake hitting the global financial markets.

Then, as now, the ultimate crime was embracing as the gospel that models are always right and human intervention won't offset or derail them.

True believers, not deep cynics, who assumed that the level of risk that they were taking was so unlikely to yield a doomsday type of outcome (and corresponding negative returns) that such outputs were treated as rounding errors, and NOT one of the central equations to be continuously re-calculated.

Blind_leading_the_blind Add in compensation, investment and liquidity externalities that incented behaviors that were asymmetric to national and personal security/stability, and you have a pandemic case of people's eyes deceiving them.

Thus, at every turn you see people putting a large percentage of their balance sheet and liquidity in play versus running for the hills.

The individual investor, the institutional investor, the investment banker, the real estate broker, the loan officer, the developer and the entrepreneur were all (or mostly) true believers.

To be sure, with the benefit of 20/20 hindsight a great many truths appear to be patently obvious, almost demanding (for the benefit of our psyches) that crimes MUST have been committed. 

Yet, once you get beyond the Madoffs and schemers/deceivers who arise whenever the ground is fertile, my honest belief is that (in the moment) there were very few canaries in the coalmine that were signaling imminent danger. 

Alarm-bell Intellectually, maybe a tiny alarm bell sounded that outsized returns, in absence of a corresponding REAL risk to principal, was perhaps too good to be true. 

But let's not be too hard on ourselves, or too quick to blame others.

The road ahead looked pretty clear - until the hard data arrived in the form of a series of seismic events that VERY quickly became the New Normal - doing long-term damage to personal portfolios and mortally wounding our financial system.

What is most amazing about the carnage that resulted is how few people were required to perform the actual trades that resulted in the fiscal equivalent of a nuclear meltdown. 

Aig_logo In ‘AIG: We Own It,’ 60 Minutes interviews Ed Liddy, the emergency CEO parachuted in to stabilize the company that is one of the poster children of this saga. 

He shares this interesting tidbit.  While AIG has 116,000 employees, it took only about 20 people to bring AIG down.  Think about that one from a systemic risk perspective.

UPDATE 1: Good article by Michael Lewis in August, 2009 Vanity Fair, 'The Man Who Crashed the World,' on Joseph Cassano, head of the AIG Financial Products business unit that is considered Ground Zero of the credit default swap meltdown.  Read this article, if for no other reason to affirm the fact that while there is/was plenty of arrogance and ignorance left utterly unchecked (at multiple levels), this crisis was/is more a product of zeal and certitude than smoke and mirrors and criminality. Again, argues for the merits of better systemic checks and balances.

May 19, 2009 in Current Affairs, Investing, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

The Unmanned Air Force: Rise of the Machines

Reaper-drone Imagine being able to deploy a remotely controllable squadron of unmanned planes (drones) that can view the activity on the ground from 10,000 feet or higher with incredible clarity, day or night.

These planes are able to remain aloft and stationary for up to 24 hours at a time, and at that height, are virtually invisible and make no noise. 

Not merely eyes in the sky, these drones can fire laser-controlled 500 pound bombs, all directed from a central command center thousands of miles away. 

You can see how such an approach would change the game, militarily speaking.

But while it all sounds like science fiction, would it surprise you to know that next year is actually going to be the first time that we (the United States Air Force) are buying more of these unmanned planes (known an Predator and Reaper) than manned ones?  Blew my mind.

Surreal, but real.  Watch the video below from ‘Drones: America's New Air Force’ (on Sunday’s '60 Minutes'), and see for yourself. 

Excerpt: From 10,000 feet above, the Predator was able to zoom in and send back a very precise image of Logan and the 60 Minutes team standing on the grounds of Creech Air Force Base. The Predator couldn't be heard or seen by the team, even though they knew the exact whereabouts of the drone.  The Predator's camera even followed the 60 Minutes team as they drove off the base's flight line. It's this ability that makes it difficult for enemy fighters to escape.

May 11, 2009 in Current Affairs, Streams and Nuggets, Television | Permalink | 0 Comments | TrackBack (0)

Laker Thoughts: Playoff Edition (Game 2 vs. Houston Rockets)

Kobe-Artest Now this is a series. The Rockets and Lakers have contrasting enough styles that whoever’s style prevails, wins the series.

No shortage of drama, either.  Dating back to Utah, the officials had allowed first the Jazz, and then, the Rockets, to manhandle the Lakers, and they weren’t calling that stuff a foul.

Calling the game that way shows a prevailing bias to a particular style of play, and it aint the Lakers (style of play).

Regardless, the Lakers had to answer the physicality of the Rockets.  Otherwise, they didn’t deserve to become champs. 

If Houston won, they would have been up 2-0, going home for the next two games and playing in front of their fervent fans.

Beyond knowing what that would have meant for the Lakers, for Houston it would have meant that they are THAT good – i.e., good enough to be champions. 

Yao is a warrior.  Artest is excellent.  He has played big. Their players are very tough and play together with fervor, commitment and heart.

An Incredible Game: Smash Mouth Basketball

Case in point, after an brilliant First Quarter by the Lakers, in the Second Quarter, the Rockets took the Lakers out to the tool shed and whipped them.  It took a Kobe three for the game to be tied at Half.

During the Halftime Show, Kenny Smith nailed it, saying that the game had championship implications. 

Which style would prevail in the Second Half?

The Lakers, like true champs, answered the bell, and (re) took the game. 

Playing Three Card Monte

At the same time, the way they answered – with Fisher taking down Scola, and Kobe locking down into Artest, basically said, “bring it on.” 

But it was more than that.

It was so blatant that it sent an emblematic, heart-felt message to a Party of Four (FOUR!!): Stu Jackson, the Rockets, Jordan Farmar and Rick Adelman.

To Stu Jackson, NBA Officiating czar, the message is simple.  Know your place.  Does the league really want Cleveland versus Houston?  (Yeah, yeah, the league isn't about that, just like it isn't about relevance, money and ratings.)

To the Rockets, it sends a clear message that the Lakers aren’t intimidated.  Tonight, they showed they could be plenty tough.

After the game, I think Jackson equated it to the team finding its purpose.

In that sense, Fisher was a masterstroke, pretty poetic.  For one, it created the perfect situation for Farmar to come in.  He didn’t need to look over his shoulder because Fisher was gone. 

And in the closing rotation, which I loved (energy, defense), both he and Shannon Brown were able to share the floor, so he could focus on playing ball, and he did great.

That rotation (Kobe, Pau, Farmar, Brown, Walton, I think) throws a true speed and disruption look that the Rockets will have some trouble with, and with some burn, the rotation will become better finishers (Odom or Ariza can plug in pretty well, I think).

Minimally, it will force Houston to mix up some personnel at a time of Phil Jackson’s choosing; namely, when he needs a tempo reset to break Houston’s flow, and establish LA’s own.

No less, it adds another dimension to the Lakers, something that Phil Jackson has struggled to find since the role players haven’t, for the most part, answered when called in either of the first two series before tonight.

Welcome to Round Three of Jackson v. Adelman

But, here’s the thing.  None of this is the REAL drama. That would be the happy fact that this is "Round Three of Phil Jackson versus Rick Adelman," and Laker fans happily remember how the last go around went. 

Round One.  The Adelman-led Portland Trail Blazers face off for the 1992 NBA Championship against Michael Jordan and the Phil Jackson-coached Chicago Bulls.  The Bulls, of course, win the crown.

Round Two.  In 2002, the Rick Adelman-led Sacramento Kings were about to go up 3-1, heading back to Sacramento. 

Yep, that’s the game where Horry made that falling away three pointer to steal the game (after the Lakers had been down by as many as 24 earlier in the game), make it 2-2, and the Lakers prevailed in a colossal seven games. 


The Lakers won their third championship under Phil Jackson, and the Kings never made it over the hump.  Tonight signifies Round Three has begun for Adelman.

The Zen Master Arrives

If you doubt that Jackson is the Zen Master, consider this. The net effect of what played out tonight was that Fisher left, Farmar entered, Artest got kicked out, Von Wafer had words with his coach, and was sent to the showers early.  All in the same game.

And the Lakers tempo prevailed; they won.  I think this game perhaps re-awakened some bad memories for Adelman. 

Voodoo-mask Also, let's not forget Artest's history of self-immolation, so some element of psychological voodoo is clearly at work on the part of Jackson and the Lakers.

That’s where Kenny Smith and Charles Barkley have it wrong.

This isn’t analogous to a playground-ish type of sport.  The Lakers weren't being thugs.  This is the NBA Playoffs, and the game is played on multiple levels, something PJ clearly relishes. 

His mantra: refs, call it the same both ways.  In well-matched series, it comes down to the stars stepping up.  It comes down to a need, a collective will, not backing down from the challenge, who wants it most.  It comes down to who answers the call. 

It’s matchups, adjustinments, having a point of attack, and a lock down efficiency on defense, which the closing unit had tonight in spades. It's about having a clear purpose, and keeping the competition off-balance.

Somewhere in the distance, Game Three looms.  I love this game.

Related Posts:

  1. Laker Thoughts: Playoff Edition (Game 2 vs. Utah Jazz)
  2. Lakers-Celts and the Sporting Metaphor
  3. NBA Basketball as Opera
  4. Sweet and Sour Endings: Boston Crushes the Lakers

May 07, 2009 in Coaching, Current Affairs, Sports, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Laker Thoughts: Playoff Edition (Game 2 vs. Utah Jazz)

Pau-basket

Sloppy execution catches up with you, and the Lakers have been sloppy of late.  A more disciplined team than the Jazz, not necessarily even a better one, could have snatched Game Two from them.

The Jazz aren't that team so the Lakers won, but that’s a sub-plot that bears watching, albeit one to keep at a slow burn.

First off, Deron Williams was stellar for the Jazz.  Amazing inside and outside, scoring and facilitating.  Basketball experts have anointed Chris Paul ALL-TIME great potential, whereas Williams is regarded as merely "Top 5 NOW." 

I don’t know, but every time I see the guy (Williams), it is apparent that if the Jazz ever find someone more dominant/big-time than Boozer to complement him, the Jazz could go all the way someday.

Unfortunately, here and now, without Okur, there are just too many matchup advantages for the Lakers.

Odom, for one, just crushes the Jazz.  Similarly, when the Lakers were running with Pau and Bynum, the Jazz had no answer for the Laker “bigs,” and the Points in the Paint (and shooting percentage) advantage was terrific as a result.

In the "didn't see that one coming" bucket, Shannon Brown is an exciting story arc as far as the Lakers are concerned. He brings defensive intensity and spreads the floor, while being unafraid of the moment (he'll shoot, and he's hitting his shots).

Plus he makes good decisions (something that both Farmar and Vujacic struggle with), and allows them to play a muscle tough style, which is another dimension that they can throw out to keep the Jazz off-balance (and the competition in subsequent rounds).

I hope that he can keep it up.  It would be a nice story for the man, who was a complete throw-in in the Radmanovic deal.

Back on the court, Trevor Ariza knocks down a big three to effectively end the game, just as he hit an opening three to help get the Lakers started.  He continues to impress.

And Kobe. All-time sick jumper over Ronnie Brewer. Incredible footwork by Kobe matched by equally sound defense by Brewer, and Kobe STILL nails it.

Phil spent too much time experimenting with rotations, and somewhat took the Lakers out of the flow of their game (which he mea culpa’d to afterwards), but you start to see how a couple of more refinements, and the Unit Mixes will (hopefully) be more judiciously and consistently applied.

A final thought.  What has defined the Lakers this year has been a lock down phase of the game, when they just take over.  They become an anaconda and squeeze the life out of the competition. Didn't happen tonight, and hasn’t these last few games with the Jazz.

The Jazz won’t win this series.  The Lakers are just too much more talented, have too many mismatch advantages, are too much more battle-tested, and when they find that extra gear, as they will, it will be game over.

Related Posts:

  1. Lakers-Celts and the Sporting Metaphor
  2. NBA Basketball as Opera
  3. Sweet and Sour Endings: Boston Crushes the Lakers

April 22, 2009 in Current Affairs, Sports, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Pattern Recognition – On Conservation, Gun Nation and Risk Mitigation

 Conservation: "Do you want to see something really scary?"

Tidal-wave“If running out of oil doesn't scare you, maybe an iceberg the size of Connecticut floating away from Antarctica and hitting the United States will get your attention…The real question is: are we going run out of the things we need before we find substitutes for them?” – Andy Rooney

Shooting Up America

When President Obama recently stated that pushing for a reinstatement of the ban on "assault weapons" (think: AK-47s) was not in the cards, it was a political acknowledgment of how completely the NRA (national rifle association) has achieved a stranglehold on congress.

To get a sense of this stranglehold in action, and the culture war that underlies it, you have to watch the 60 Minutes expose, ‘Gun Rush,’ as it does a really good job of showing how fears of Obama (in some circles), combined with a devastating economy have fueled a run on guns that is (unfortunately) uniquely American.

We see giddy retailers at a Richmond (Virginia) Gun Show, where lax to non-existent "Background Check" laws allow anyone to buy handguns, assault weapons and bullets as easily, and with as little pre-qualification, as buyers of bulk food products at Costco. 

Check that: you need a membership at Costco.

For those of us who see events like Columbine, the Virginia Tech massacre, runaway gang violence and the recent killing of four Oakland (California) police officers by a parolee armed with assault weapons as emblematic of all that is wrong with our gun culture, this program is a wake-up call as to just how outside the power centers you/we are.



Crisis Altering Wall Street as Big Banks Lose Top Talent

Risk One of the “holy shit” moments of the banking crisis (as foretold by the collapse of Long Term Capital Management a decade earlier) was the reality that derivative and hedging strategies did not mitigate risk, but rather amplified it, not because anything endemic to the instruments themselves, but rather because such strategies lead to imitation, which in turn, fosters simultaneous mass movement of securities on a global level; by definition, systemic risk.

The good news is that if (and only if) appropriate and comprehensive regulatory and enforcement mechanisms (with some formal concept of regulatory power across national boundaries) can be put in place, this is a manageable dynamic.

Simply put, we need better governance of market underwriting control mechanisms.

And oh by the way, as to all of the indigestion by banking executives around comp package caps as the “stick” side of being bailed out and subsidized by the American people?  True, such tethering of pay schemes compromises their ability to retain top talent, but the counter is that maybe that is a good thing.

The argument here is that a winnowing of talent from the “too big to fail” entities opens the door for smaller entities to promulgate, which actually moderates volatility in the financial marketplace.

“If the risk-taking spreads out to these smaller institutions, it is no longer a systemic threat,” said Matthew Richardson, professor of finance at the Stern School of Business at New York University. “And innovation is spreading out too. This is a good thing.”

Real the full article in the New York Times HERE.

April 17, 2009 in Current Affairs, Investing, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

Getting Real: Sick Around America

Nurse taking blood pressure.jpg

The Path to Universal Health Care

First, I saw FRONTLINE’S phenomenal expose, ‘Sick Around America,’ which in an hour gives you a 360 degree understanding of the state of health care in America (see below).


Then, I chanced upon a 60 Minutes segment that looks at a state funded cancer clinic being shutdown, owing to the recession. 

It presents a grotesque set of choices that isn’t us.  Can't be (see way below).

The health of the nation is both a matter of national concern and a metaphor for the rigor and balance that we strive for in the wake of the collapse of our financial system.

The Birth of Pro Bono

Our great society has an implicit promise to maintain a reliable safety net system.

Exhibit A: providing universal access to health care services.

The paradox is how to do so while simultaneously embracing fiscal pragmatism and maintaining market orientation.

Pro bono publico (usually shortened to pro bono) is a phrase derived from Latin meaning "for the public good". The term is generally used to describe professional work undertaken voluntarily and without payment as a public service. 

Pro bono service, unlike traditional volunteerism, uses the specific skills of professionals to provide services to those who are unable to afford them. (FROM WIKIPEDIA)

What I am envisioning is a government-sponsored initiative to apply pro bono concepts to the health services constituency of: Doctors; Hospitals/Clinics; Insurance Providers; Pharma; and Consumers.

It is an out of the box way to instill a sense of collective ownership among the key stakeholders in the vetting, deployment and administration of a federally-backed health services safety net delivery system.

Who knows?  If it works, maybe the same concepts could be applied to evolving our educational system.

When Safety Nets Fail

God forbid any of us should find ourselves in such a horrible place. 

Sick. Desperate.  And utterly kicked to the curb.

"I don't want to die. I shouldn't have to die. This is a county hospital.  This is for people that, like me, many people have lost their insurance, have not any other resources. I mean I was a responsible person. I bought my house. I put money away. I raised my two children. And now I have nothing. You know my house isn’t worth anything. I have no money. And I said 'What do I do, but what do all these other people do after me?' 'And they said we don't know.'"

In ‘The Recession's Impact: Closing The Clinic,’ 60 Minutes correspondent Scott Pelley, looks at the gut-wrenching impact of the recession on a once-indelible safety net: state and county medical services.

Watch the segment above, in all of its ugliness, intellectually understanding the paradox for local and state governments wrestling with horrific budget shortfalls.

Our system is defined by an asymmetry between the “guaranteed coverage” model that drives employer-based health care plans, and “medical underwriting,” a malignancy that drives the private individual market.

The awful truth is this.  Many a “poor folk” literally become poor by virtue of the great injustice of getting sick.

In what becomes the ultimate sick joke, sickness renders them unable to work, which, in turn, leads to them to lose their insurance.

Then, horrifically, they are uninsurable in the private individual market because, by definition, they have a “pre-existing condition,” which, of course, started the vicious cycle in the first place.

Getting Real: A Moral Imperative

Frank Rich, writing in The New York Times, shines a jarring light on the moral imperative of our times, saying, “This is what Obama is talking about when he insists on pushing for change simultaneously on so many fronts — green jobs, health care, education, new financial regulation, infrastructure spending and all the rest. As has been true since he promised “a new foundation for growth” at his inauguration, the most important question is not whether he will try to do too much at once but whether he will and can do enough.”

We the People. Repeat.  We the People. Repeat…

The Grim Facts on Health Care:

  1. 46 million Americans are uninsured under our current health system;
  2. 700,000 Americans go bankrupt each year, at least in part due to the cost of runaway medical bills; this fact has no parallel in other developed countries;
  3. When you lose your job, you lose your coverage.  COBRA provides a time limited safety net but fully 90% of the people that are offered it, don’t purchase COBRA because it is expensive.  Plus, it is only available for ~18 months, meaning that the chronically ill will be subjected to the private individual market. Medical underwriting (introduced earlier) means that if you can’t secure an employer sponsored policy, you will once again, be without coverage. Finally, if your company goes broke, and the employee insurance program goes away as a result, COBRA is pretty much instantly unavailable to all (former) employees.  How about that as a double-whammy for suddenly finding yourself out of work in a bad economy?
  4. The average premium is 3X in states that have guaranteed issue programs (i.e., can’t be denied coverage because sick or have pre-existing ailments).  Surprising? Apparently, people wait until they absolutely need coverage, resulting in under-distribution of costs across the larger network of citizens.  The most logical counter to this is to mandate that everyone buy into the system above a certain economic level and provide near-free lunch to those that truly need it (i.e., below a certain economic level).
  5. One thing to think about in terms of the aging baby boomers – a massive demographic – is that there are large numbers that are moving into a heightened health services consumption/reliance stage, but who are either too “rich” for Medicaid or too young for Medicare.
  6. Administrative costs in the U.S. make up 24 percent of health costs versus 12 percent in Canada.  If we could squeeze that inefficiency to make it on par (with Canada), that alone would pay for universal health care.

UPDATE 1:  Great article by Andy Kessler (one of my favorite writers) on why the medical establishment is unlikely to embrace electronic patient records with full vigor.  EXCERPT: Rather, the health-care industry's reluctance to digitize its records is rooted in a desire to keep medicine's lucrative business model hidden. Dangling $19 billion in front of a $2.4 trillion industry is not nearly enough to get it to reveal the financial secrets that electronic health records are likely to uncover--and upon which its huge profits depend. In those medical records lie the ugly truth about the business of medicine: sickness is profitable. The greater the number of treatments, procedures, and hospital stays, the larger the profit. There is little incentive for doctors and hospitals to identify or reduce wasteful spending in medicine.

Related Posts:

  1. Juxtapositions: Crisis Management, Complexity and Systems Thinking for the 21st Century. 
  2. Getting Real: On Doomsday, the Demise of So-Called Experts and the New Arbitrage.
  3. Getting Back Our Sense of National We-Ness: On Heroic Acts, Shape Shifting and Small Business Stimulus.

April 07, 2009 in Current Affairs, Streams and Nuggets | Permalink | 0 Comments | TrackBack (0)

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