Wednesday, November 11, 2009

The FED's independence at risk

The past two years the global economy has been rocked by violent turbulence with its root causes in the uncontrolled sub-prime mortgage fall out. With the concept of spreading risk via new financial instruments such as CDO (Collateralized Debt Obligations) and CDS (Credit Default swaps), many financial institutions literally created a fiscal time bomb that could not be defused. As the mortgage crisis began to unfold, the global economy was literally on the brink of collapse. With massive bailouts and heavy tax-payer funded government intervention a second great depression has been avoided or at least delayed.

Some economists partly blame Alan Greenspan and his policies as head of the Federal Reserve (FED). In fact Greenspan himself publicly admitted that the US free-market ideology that he and others have championed for decades may be flawed. Greenspan, in his testimony before the US House Committee on Oversight and Government, said he was shocked at the banks' inability to self-regulate and blamed over-eager investors for the sub-prime housing meltdown that led to the financial crisis. Obviously the low interest rates that the FED pushed during his time as the head of the institution was partly to blame for the crisis. But the FED alone is not the sole perpetrator of the near fiscal collapse. There were a number of other parties who bet their banks on financial instruments that they had no idea about.

In response to all this, Senator Christopher Dodd plans to push for a new Financial Institutions Regulatory Administration (FIRA) that in effect would strip the current FED of its role as a bank supervisor. While this proposal seems like a good move at first, what is alarming is that it gives Congress a greater voice in naming the officials who set interest rates. This is the one last place where we need political interference. This newly proposed FIRA clearly opens the door to political interference with respect to interest rates. Imagine the political uproar every time the FIRA acts on the rates and a member of the Congress does not agree with it, especially if his/her constituents would be directly affected by such a decision. The FED's ability to act independently would be at risk as they would have to pander to political pressures.

As the nation's central bank, the FED has had the unique power in the U.S. financial system to create money, giving it the ability to conduct monetary policy for the U.S. economy. That same power also enables the FED to provide liquidity to the financial system when under stress. The FED has done so and the current FED chairman Ben Bernanke has done quite well given the circumstances. However, it seems that this crisis is pushing Sen. Dodd to do the unthinkable. That is, push politicians to have the ability to influence monetary policy for the country. This should be done so only indirectly and not with such direct powers as Sen. Dodd is suggesting. That would be akin to letting loose a bunch of monkeys in a china shop.

In his comments while announcing the new FIRA proposal, Sen. Dodd said that, "The FED’s regulation of banks has been an abysmal failure,”. He blamed the FED for not preventing the practices that contributed to the financial crisis and led to taxpayer bailouts of major banks. The key question is whether the FED ever had oversight responsibility. I believe it never did. Sen. Dodd's new proposal at most is a knee jerk reaction to the crisis and must be fully evaluated before it is passed. Global investor's perception that this could be the start of political interference in policy setting could harm the already fragile dollar and the US economy. Bank oversight is a must, but not at the risk of harming the FED's independence.

Thursday, October 22, 2009

The Greatest Rip Off

The white envelopes from the credit card companies usually sit on my desk for a while before they eventually go to the shredder after a quick review. So on a recent afternoon, I sat back to open up all those envelopes to quickly glance through the letters, hoping as usual not to find anything in there, so that I could send them to the shredder. The recent letter started with the usual ominous words "We are making changes to your account terms....". Normally these letters would talk about policy changes to rental-cars, insurance and other such things and I would scan through the letters and not find anything disturbing. But this time there was change and by golly it felt like I had been smacked with a sauce-pan.

The letter from a major credit card company went like this.
"To continue to provide our customers with access to credit, we have had to adjust our pricing. The terms of your account will be changing. These changes include an increase in the variable APR for purchases to 29.99% and will take effect November 30, 2009. As always, you have the right to opt out........ "

Now I have always paid my credit card on time, have no credit card debt, though I use it for many many purposes. I understand that I am not the kind of customer that the credit card companies are looking for, yet they need my business because I bring them hefty revenues via transaction fees which merchants pay them. On some cards I actually pay a yearly fee because it gives me some points/miles or some benefits that I think I need.

So after I got this letter, I called one of the credit card company and their response is that their costs have increased tremendously and that doing the business of "credit" is more expensive now than it was a year ago. But going from a 10% APR to a 30% APR is not fair. But wait a minute, the Fed is literally charging these banks next to 0% APR forcing them to lend. In fact some of them are so bloated with bailout dollars. I understand that the government is trying to change credit laws early nextyear, the pretext being protecting the consumer from abuse by credit card firms. However the card companies are rushing to make changes before the end of the year to avoid any such limits on them starting next year. It's daylight robbery and the senate banking committee is asleep at the wheel, just as they have been for the last 50 years. The legislators are asleep because they are deliberately ignoring the banks who are making whatever changes they want to right now, before any enforcement begins next year. It appears that the legislator are on track to protect the consumers starting next year. Who is the government protecting?

On the other hand, you can't cancel/refuse the card because cancelling a card for any reason has it's own drawbacks. Well, it affects your credit score negatively which will only increase the APR and other credit/borrowing costs as well. The consumer is caught in the middle with having to keep the cards and risk paying a hefty fine for late payments or high interest rates on balances.

Overnight the credit card companies across the board are pulling this stunt and our Government officials just stand by and do nothing. Basically the banks are being allowed to rob the consumer and the US Senate and Congress are the co-conspirators. Many of these cards are offered by banks that have received bailout monies. The government borrowed money from the people to give to the failed banks to allow them to gouge the people. It almost seems like the very government the public put into office is now gouging the public indirectly via the banks. Why is it that the common man has to suffer and pay for the failed policies of the few greedy gecko's. All of this being facilitated by the Cons in Congress. As we speak, US banks are embarking on the greatest rip-off this nation has ever seen and we stand there and do nothing.

Friday, October 2, 2009

Google Wave - The Tsunami of Twaddle? Only time will tell

The web has been abuzz with the controlled beta release of the new Google Wave. Google answer to "How would email be designed today". Well the first time I saw, Vic Gundotra present the live demo a few months ago at "Google IO 2009", he said that they were unveiling a "personal communication and collaboration" tool.

Well at that time, they defined the wave as equal parts of conversation and document. It's a system that allows people to communicate and work together with rich-text, photos, videos, maps, and more in one dashboard. Also anything on a "wave" is shared as long as you invite another person into the wave. Any participant can reply anywhere in the message, edit the content and add participants at any point in the process. The playback feature allows anyone joining into the wave at anytime to rewind the wave to see who said what and when. A wave is live. With live transmission as you type, participants on a wave can have faster conversations, see edits and interact with extensions in real-time.

Then I saw this video and saw that it explained best, the way Google wave works and why it is different from email.

At the end of the day, my take is that Google wave is a cool tool but will be more disruptive than productive, because not everyone is tuned to work in that manner. The human mind cannot handle realtime communication all the time. The human mind requires people to spend some time together with others, to plan and collaborate, then go off and find some independent time to use their creative juices to put together or build new things. This wave seems like a communication overload to me, where the simplest of things/issues will rise to the top due to the fact that it appears the latest in the thread or wave. People personalities and idiosyncracies will be amplified and in your face at all times. I am sure you have experienced those personalities who love to hear their own voice at meetings and end up disrupting productive meetings. Well let me tell you that Google wave will give an opportunity for those personality types to constantly tout their horn and constantly bring up mediocre issues.

I do understand the Google Wave tries to solve one major problem with email and this is that, not everyone has a full view of the conversation. The single dashboard view for all, regardless of when the join in the conversation and the ability to playback is huge. This should alleviate some of the problems that email has. The reply-all is dreaded because it allows people to just jump in with irrelevant comments and change the trajectory of the original conversation. The second issue is the forwarding of an email thread to someone who jumps into a conversation a bit late and is not privy to what has happened earlier and again changes the trajectory of the conversation inadvertently. Google wave might alleviate some of these issues with the playback feature and the fact that everyone in the wave has the same dashboard view.

I personally don't have an invite as yet and will reserve to change my opinions for later, but however given what is being shown, I can only think of the negative effects of the wave. It seems that "Google wave" will become the "Tsunami of twaddle".

Wednesday, September 30, 2009

A modern day Edison - William Kamkwamba

As I read the story of William Kamkwamba, I was floored. A self-taught Malawian boy, read books from a library and used scrap parts from a junkyard to build windmills and bring life-changing electricity to his remote village. In the video he narrates that he could not go to school and had to drop out because his family could not afford the $80 tuition. Instead, he found a library and read books about windmills. All the books only taught him how to use a windmill. No book that he had taught him the basic principles of generating electricity from the wind power. He pursued to learn all the techniques of how to convert that wind energy into electricity and eventually built a windmill that generated electricity for his home.

This is an inspiration to entrepreneurs and kids. It is not that a 14 year old kid can't put together a windmill. The issue here is that he built it from scratch and prevailed despite the conditions and availability of material in his remote Malawian village. If you see the video, you will understand what I mean.

Thursday, August 6, 2009

To Blog or Not to Blog

During the 46th Design Automation Conference (DAC) held in San Francisco, California, I had the opportunity to meet with and talk to John Cooley (ESNUG & Deepchip founder). John was one of the speakers at "Conversation Central" hosted by Synopsys. John's topic was "The Evolution of ESNUG and Deepchip", where he described his journey with ESNUG and now Deepchip. I have to say that over the years, I have met more people who view John with contempt and very few who have directly stated anything to the contrary. When I was at a small startup called Verplex systems, I ran into John at DAC 2000. During my brief conversation with him on topics that included the point of esnug, he abruptly stopped me and said, "Give me the top 10 bugs with Verplex software, known workarounds and fixes in the works and I will be happy to post that on esnug". His position was, "You will get some serious press from that". I was kind of taken aback by his words. I mean who in the EDA world in the right mind would openly put out known bugs and issues for the world to consume. It was imperative that you protect the company and not give the competition any ammunition and openly offer up marketing fodder for the competition. John had ended with "My audience is only interested in hearing about bugs in the software, workarounds and what's being done to fix the bug. This material they will consume, any others they are not interested". We walked away from each other and that was that. We never crossed paths again until now.

This time at DAC, John pretty much repeated the same words that I had heard him say in 2000. I thought, "This guy is relentless, he never gives up his mantra". But there was one change this time around. I had left the EDA world for over 2 years and My time outside of EDA was spent in new areas of Consumer and Enterprise Mobile Applications, and Social Media (SM). Armed with new found knowledge of SM and its acceptance in other areas of the industry, I wanted to come back to DAC to see if I could tie in these new areas and it's relevance and applicability to the high technology industry.

There is no doubt that John has achieved significant success with ESNUG and Deepchip. These forums moderated by John, offers a discussion platform where engineers email him their personal experiences with EDA tools. He forces people to give him real data and not fluff. He wants benchmark data and testcase stats (run time, design size, memory used, crashes, known issues, workarounds etc.). As you know, the tendency within the EDA and the semiconductor design industry is to frown upon this kind of postings by employees. There is the risk that either party may overstep the bounds of their mutual NDA's or that some secrets might be revealed by openly discussing issues at such forums. Also the EDA industry is a small world and one could risk alienating themselves or hurt future job prospects. This is an industry where everyone plays nice. In terms of identity, John gives people the necessary cover if they request anonymity, hoping that they will be elaborate with their posts. While this has mostly resulted in good information exchange for the engineers, much to the EDA world does not look forward to these posts, mainly because this is perceived by them as having their dirty laundry exposed and openly discussed on his forum. I for one, don't believe that John acts against the EDA industry or against any particular company. Neither do I think that he specifically sides with any one company. It is quite clear that he will post articles submitted by his user community as long as they meet the basic requirements he sets for them. John does allow controversial unverified statements or arguments to be posted on his forum. Its obvious he can't really verify the validity of every claim made by these posts. But, he does allow EDA companies to respond to these posts. The only thing John does not allow is people/companies to post any information that he considers as marketing or publicity material. One thing is certain, he seems to cherish controversy.

What surprised me was his comment and strong opinion that, "Engineers should not write personal blogs". He said that engineers should instead post in forums with an established audience, such as He claims to have 25,000 active readers. John argues that the trouble with personal blogs is the following:
  • A blogger may not have enough material to maintain the continuity of the blog site. He quoted some random stats. (#1: 99.5% of blogs fail within 2 months #2: 99.5% consist of 2 or 3 posts on EDA, followed by irrelevant posts or nothing)
  • A blog owner doesn't have time to moderate comments or may be too biased to allow comments against the post.
  • Personal blogs are not focused and some postings are of a personal nature.
  • The audience is limited and that there's no money in it.
  • He says no one ever got a job writing a blog. He counters that by adding that many people on his forum have gotten job offers merely by John's recommendation.
His claim is that established sites like deepchip offer a platform for interactive discussion. Yes, John will give you all kinds of reasons not to write blogs. That's because if you do so and get good at it, maybe he will lose some traffic from his site. He obviously wants to be the center of the universe for EDA discussion. His 25,000 subscribers keep coming back for more and that means he has eyeballs on his site which translates to Ad revenues. Of course he is going to tell you not to write.

I want to tell each and every engineer out there that if you feel like writing, please do so. Don't ever let anyone (including John Cooley) discourage you from creating a blog. Just ensure that you counter the 5 points he raises above which are quite valid. Write because you like to do so and not because it's a one time thing. Be expressive, Be bold and take a stance. Plan your blog beyond just the first article.

Just remember:
  • It is very easy to get a blog site up and running.
  • Create a community, find other bloggers and cross link your sites so that you can share viewers.
  • Identify yourself. Don't ever write anonymously, for it is useless.
  • Have pre-screened guest authors share their views on your site, so your site can have regular and quality updates.
  • Don't do it for money. With falling CPM's and low traffic you will hardly get anything to write home about.
  • Allow un-moderated comments. Have people who comment identify themselves to weed out spammers and flamers.
  • Be prudent about what you say and always use common sense. Your first amendment right does not protect you from slander.
  • If you work for a large corporation, make sure that your personal blog does not meander away from the Social Media Policies of your corporation.
  • Provide value to your audience

Monday, August 3, 2009

Can the EDA industry truly leverage Social Media?

I just got back from the 46th Design Automation Conference (DAC) held in San Francisco, California. Having been out of the Electronic Design Automation (EDA) industry for a little over a year now, I was coming back in with an outsider's perspective. My time outside of EDA was spent in new areas of Consumer and Enterprise Mobile Applications, Social Media (SM) and it's relevance and applicability to the high technology industry. I was intrigued to find out that Synopsys, one of the leading EDA companies had created "Conversation Central" at DAC. This was an area where they had some invited speakers and sessions to educate SM newbies and discuss SM techniques.

I had met and networked with karen bartleson of synopsys via twitter and was very interested in finding out what EDA companies were doing with adopting SM methods. I attended a few of the sessions and did run into some very interesting people and differing opinions. I wanted to talk about the general areas that I see as barriers for EDA's adoption of SM techniques.

From my EDA experience, for too long the EDA industry has been clouded in secrecy and justifiably so. We shall not discuss the reasons for that in this blog. EDA customers have generally precluded EDA companies from talking about their relationship. The amount of Non Disclosure Agreements signed between EDA companies and their customers would only make attorneys happy. EDA companies on the other hand have rarely discussed issues about their applications openly on the Internet other than to use it as a platform for press releases (PR). This is in stark contrast to social media methods where open honest conversations are what it's all about. Many EDA vendors would like to help their consumers openly share and discuss issues with applications. However they are comfortable doing so only under a controlled atmosphere such as a users group (UG) community. While these UG forums have helped the user community, the information however remains within that small forum and the larger group of application users do not generally have access to that information.

For the EDA industry to truly leverage social media techniques, whether it be blogging (regular long form blogs) or micro-blogging (twitter, utterz etc.,) it will need an audience. This audience will be mostly comprised of engineers who are always on a time constraint. Any reading material that they might consume must be far from marketing and more closely related to FAQ's and other helpful hints. They are always looking to save time and avoid techniques that could get them in trouble. For this to happen, EDA companies have to make themselves more vulnerable by openly talking about issues without fear of being targeted. by the competition. When I met John Cooley (ESNUG & Deepchip founder), way back in 1999 he said, "My audience is only interested in hearing about bugs in the software, workarounds and what's being done to fix the bug. This material they will consume, any others they are not interested". John has found significant success by offering a moderated discussion platform where people email him the results of their experiences with EDA tools and he gives people the identity cover (anonymity) so that they will be more open with their posts. This has resulted in good information exchange for engineers much to the angst of the EDA companies, because their dirty laundry is openly discussed out on his forum. On occasion, EDA companies find themselves having to defend themselves from baseless accusations when people post anonymously under the guise of protecting themselves from retaliation. However, in my book, I have always had the opinion that there is no value for anonymity on the Internet. If you are going to state an opinion on the Internet, then the only way that it can carry value is for you to identify yourself. For EDA companies to leverage SM, they will have to make themselves more vulnerable by talking about issues that their audience cares about. If they use SM for just PR, then they risk alienating the audience.

The other areas where I see some burden to leveraging SM techniques are the following.

# User behavior: Can you force people within the industry to change and adopt the above mentioned needed behaviors to dabble in SM?

# Protocols: How do companies moderate the discussion when their people start to leverage SM techniques. Do people know what to do? Many large companies have introduced so called "social media rule book" which can run into pages. These guidelines themselves can be daunting to a new user and can deter some real creative ones. Most times, all that it requires is common sense on what you can say and share. The simple rule is, don't say or write things that you will regret later. Remember, there is no "UNDO" button on the Internet. My two rules for corporate social media users especially twitterers. Don't tweet yourself out of a job and Don't tweet yourself into an SEC investigation.

# Generational Diversity: With respect to information, what the last generation regarded as private, the current generation regards as public. In the EDA world this translates to what is shareable and protected information. How do you overcome this hurdle when this dichotomy exists within organizations where both view points are valid? For large multi-nationals where the company is spread across many countries, there is an additional layer of cultural behavior to contend with. What may be acceptable for open discussion in one country may not be perceived so in other countries.

# Listening v/s dispensing: One thing is that SM is all about listening to the customer rather than dispensing marketing information or press releases. SM also enables companies to track consumer trends. While this may work readily for other industries, the EDA industry in it's current state may not be the most appropriate industry. One thing is clear, EDA companies need to understand that SM techniques should be used to gauge customer sentiment and avert any potential public-relations disasters. The key question is, are there enough customers leveraging SM techniques to talk openly about EDA products.

# Quantitative: Finally the key question that will need to be answered is, Can SM techniques provide any measurable return on time and dollar invested. This will be especially hard because of the initial difficulty in understanding what metrics need to be measured to enable one to objectively measure the ROI on adopting SM methods for EDA given all the hurdles.

One thing is for certain, media as we know it, is changing. With what I call the "now-media" generation that readily records and posts events, articles and blogs to the web for others to consume, the EDA industry may be forced to adopt SM techniques sooner rather than later. In ending I want to note the EDA people who I met at #46DAC are some of the people to watch in EDA for SM adoption. Karen Bartleson, Robert Dwyer, Daniel Payne, JL Gray, John F Macdonald etc.

Thursday, July 9, 2009

The kid who should be CEO of GM

"Who Killed the Electric Car?", the 2006 documentary that took us through the story of the creation, limited commercialization, and subsequent destruction of the battery operated electric vehicle in the US, (specifically the GM EV1). When I saw that documentary only recently, I was really saddened.

During the years 1999 and 2003 I worked for a company called Verplex Systems. During that time, I covered the eastern US region and Canada. It was during that time, I went to visit one customer at Lucent in Ottawa. There I met the first guy who had created his own electric car. His name was Bob Lawrence. When heading out to lunch one day, he suggested to me and my colleague that we take his car (A Volkswagon Jetta). When we drove around that car was nearly silent with just a soft humming noise. When we found out that Bob himself had put that together we were blown away. He had a big batteries in his trunk. An electrical charging cord that came out the front of the vehicle. Recently I found out that he gave up that electric car for a Prius hybrid. I am sure he's making it a plug in as we speak.

However I wanted to take a moment to talk about this kid, a teenager who claims he can't even change the oil in his car. He instead went on the internet found the instructions and converted an old Ford Escort car into an electric car. Why is that normal ordinary people can go and build an electric car, but the big-3 could never build one?

I am sure that one day another documentary will come out with the accusatory finger pointing to the oil companies being responsible for the death of the early electric car. But those conspiracy theories are for another day. Right now, I am so excited that there is a movement toward going completely electric. I wrote about Shai Agassi's plan the other day. I can't wait for the day when I can drive a car for which I don't have to add fuel.