The thing about useful stuff is: February 2009

Bank short-sellers deserve an apology Saturday, February 28, 2009

When UK bank shares began their torrid falls in October 2008, the baying hounds were calling for the heads of short sellers who had unjustly brought "strong and viable" banks to the brink of a collapse of confidence.

Yet as the details of the financial results emerged this week, with huge write-downs, the press coverage ironically seemed to chime with the views held by short sellers at the time - the bank balance sheets were stuffed with toxic debt. The only difference was the timing of their comprehension - short sellers realised long before and saw that it was not reflected in the over-inflated share price.

One might now justifiably argue that those who called the share price falls unwarranted were either incompetent or self-serving in attempting to maintain a bubble. As was often mentioned, market manipulation and trying to create a false market is illegal, but the guilty parties were those insisting higher prices were warranted and demanding measures to prevent price falls. Sadly, no prosecutions will occur.

This episode has re-enforced the importance of short selling. These investors put money behind the conviction that things aren't as great as some would have us believe. In doing so, they stand to lose a fortune if they are wrong, profiting only when hubris is dispelled and reality is restored. Unfortunately, it's only in the case of the Emperor's clothes that we admire the person that pricks the illusion.

posted by John Wilson @ 12:13 PM Permanent Link ,

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Save a lifestyle Sunday, February 08, 2009

It is an inevitable parody but will still amuse many.

Labels: humour

posted by John Wilson @ 3:16 PM Permanent Link ,

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Google Latitude - the what, why and where next? Thursday, February 05, 2009

Image by thms.nl via Flickr

Many of you will have read elsewhere, including via mainstream media about the launch of Google's Latitude offering, which introduces location based information that can be shared with nominated friends at your discretion.

It means that if you choose to expose your location, a decision over which you have constant control, then you can choose who you share that info with.

Your location can be set manually via your browser, which involves typing your location or moving a "pin" around over a google map. However, if you have Google maps on your phone then you can choose to automatically update your location using either the phone GPS or base station information, which is far easier, albeit it will continually consume data on your phone plan, not to mention gobble up your phone battery [I’d like the ability to configure how often phone updates occur for that latter reason].

You can also define how much detail those chosen contacts get since Latitude settings mean you can publish at city-level, general area or actual location.

So, using this service now means you and your chosen friends can share locations updates with each other most of the time [exceptions being when you/they turn off details].

This is not a new concept. Latitude is similar to services such as Loopt, Brightkite, Whrrl, Buddyping [now defunct it seems], RadiusIM and Buddy Beacon, most of which focus upon the intersection of "social mapping" and communication. However, all of those services don't could close to touching the might of the Google Brand and its reach.

So now comes the "why" anyone would choose to opt into this, given that it immediately throws up privacy concerns/fear in a "big brother is watching you" sense to many people.

Why?

Well, most obviously this increases the likelihood of chance meetups because you can now see which of your friends happens to be in the neighbourhood. Hence, seeing I am nearby you may choose to avoid the area or call me if you are nearby to arrange to meet, which is actually something likely to be of interest to a wide range of people for business and social reasons alike. To that point, I'd actually like to be able to group Latitude contacts into categories which would give me the option to tailor the information I share with others e.g. friends, business, which isn't possible in this first incarnation.

Of course, some parents may hope to use the service to keep track on their kids as the newspapers suggested, but given that kids can turn-off location sharing, it may prove ineffective unless they are so desperate for their friends to also see the information that their parents see it by default. Sadly I was immediately entrapped yesterday when my wife was immediately able to spot on Day One of this service that I was near a shop she wanted me to call into!

Where Next?

This being Google one can easily speculate on how this service could evolve i.e. where next. It's not a unique insight but there is a clear route to the three way intersection of mobile, social, and local. The last of these quite simply refer to location aware or based services. Hence, similar to the famous scene from the Tom Cruise movie, Minority Report, you could begin receive news, travel, announcements and adverts all related to your present location.

On its own, "local" probably isn't inspiring enough for large numbers of people to sign up to service which discloses one's location, since the benefits are less obvious. Hence, offering the social element first is a better "bait". Having attracted a large user base, it then becomes attractive for firms/services to participate in "local offerings" e.g. offering targeted ads and coupons to people in the vicinity of a store.

Here's a scenario that I put together with a business a couple of years ago, but have substituted Latitude's name

A national coffee chain head office create a series of offers that are hosted by Latitude that may be used by their local shops when those stores are quiet to try to drum up business e.g. coffee half price for the next hour or "buy one and get one free". Local managers may activate these at their discretion perhaps via a text, phone, or web activation with Head Office able to possiblly control the times that offers may be used e.g. only offpeak. Head Office also agree the price that is paid to Google for distributing these "coupons" in a similar manner to Google Ad-words.
Latitude's [future] ad service offers to either broadcast offers/coupons or be paid a higher price for redeemed coupons [assuming a mechanism to identify redemptions can be implemented easily].
Latitude users would have the option to pre-set their profiles to indicate whether they are willing to receive offers and the types they will countenance. Likewise they may search for local offers on an ad-hoc basis e.g. bars offering deals now.
Google Latitude broadcast the offers either as adverts or coupons to Latitude users who are in the local area, which drives custom to the stores. Google could choose to broadcast all ads or similar to Ad-words running a bidding process in given time slots which would allow them to extract the best price and ration/manage the number of offers issued so as to minimise the perception of spam.

In this scenario, all parts of the market are satisfied, namely

consumers get alerted to cheap deals for relevant goods/services
retailers increase traffic and revenue at slack times, whilst only incurring ad spend when relevant/appropriate, in a setting in whichcompanies can delegate authority within parameters for local stores to tune their offering based on conditions
Google increases its' revenues by connecting the market paticipants, as a consequence of providing a social service

Obviously, in my example, the service being marketed has a time-expiry element - an empty coffee shop can't recoup that revenue opportunity. Hence this scenario equally applies to empty cinemas, theatres, pubs and restaurants, or any leisure facility. Yet it could have much wider application including competitive advertising - based on being near Starbucks, I receive an advert from a nearby competitor attempting to lure me away. There are many other applications one could list.

Timeframe for this to become reality? Well, there are no technical limitations to what I've described, albeit Google need to build the "ad-words like" infrastructure and tie this into the Latitude user data. So I think its' about Google choosing its' optimum moment to launch the "local" element once enough consumers are on-board or trend evidence of wide-spread adoption exists.

Labels: Google, Google Latitude, googlemaps, GPS, LBS, location based services, mobile

posted by John Wilson @ 11:09 AM Permanent Link ,

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US Caps on Compensation Wednesday, February 04, 2009

Today it was reported that President Obama and the US Government was expected to impose caps on "executive" pay at organisations that accepted Government bailout funds. It was suggested that these conditions are not expected to be retrospective on those firms that have already received bailout monies [which will be a great relief to those firms!]. However the cap is on cash compensation - it is specifically proposed that any compensation over $500,000 would have to be paid in company shares which could not vest until all bailout monies had been refunded to the Government.

The reports do seem to focus on the banking sector, albeit it would seem reasonable that such provisions apply to any firm that required Government money.

Salary caps are always highly contentious with arguments usually polarising into accusations of greedy bosses versus the importance of paying the "market rate" to attract the best talent. However the debate has strongly swung in favour of caps because the recent downfall/demise of many large institutions are being directly attributed to incumbent executives who are seen to be the cause or at some fault. Consequently, there is no public support for "rewarding" failure especially with taxpayer money, especially when the compensation sums involved are colossal in contrast to average earnings. Throw in envy, plus people losing their jobs through no fault of their own but as a consequence of an economic slump accompanied by a contraction in available bank credit, and you have an populist and moral tidal wave to sweep away counter-arguments.

Defenders of unconstrained pay, myself included, will now get to prove or lose their arguments which mainly revolve around the belief that locations/industries with caps will be disadvantaged as the best talent will be drawn to locations without such caps [assuming jobs still exist there].

An example often quoted to support this contention is football, highlighting that the English Premiership regularly wins out in the battle for global talent because of the rewards on offer to players, with the consequence that the teams in the league regularly compete at the top of European/World football.

However, is it probable that the World's biggest firms will fail to lure the best talent, since landing a senior role at these firms is still a considerable "prize"? Even in football, recent failed transfer events at Manchester City showed money doesn't always work in prising away talent from a "big club". Moreover executives still need jobs and there are far fewer firms around that can offer "big" jobs or who are willing to pay "over-the-top" compensation in a recessionary environment. Hence, supply may be growing whilst demand is reversing, thereby automatically pushing down pay, especially when those hiring are increasingly sceptical about anyone claiming superhuman management powers, given the rapid fall from grace of so many former business stars.

The worst outcome of introducing the caps would be that they deters executives from seeking the very help that may be right for their companies. Whilst board members have a duty to their companies and shareholders, they are clearly conflicted given the personal ramifications for their own wealth. Of course, they could choose to move on and perhaps should in circumstances that their company needs a bailout. Yet career choices like that are rarely made dispassionately.

Depending upon how "executive" is defined e.g. main board directors only, some executives may follow Bob Diamond's example, who for years refused a seat on the main board at Barclays to avoid having to disclose his earnings, or so it is widely believed. It was undeniable that he had a major role in running a core part of the Bank despite not being a main board member, but who was in effect a shadow director. Some companies may well look at such devices to circumvent rules, especially if main board directors find themselves underpaid relative to considerable numbers of their employees, as would probably be the case in a number of banks.

Of course, if "executive" is widened to any senior manager or employee, then things could really be shaken up, especially since those firms who took money early would be free of any such constraints and thus able to poach talent with offers of higher pay from those who arrived at the trough later. And yes, that would definitely happen.

Pay aside, executives are clearly deterred by the prospect of Government oversight and intervention in running the companies if they accept bailout funds. Barclays demonstrated that the executives were much happier paying a higher price for capital instead of accepting UK Government money. Yet, increasing numbers of companies who are struggling to refinance their operations are jumping on the emotional blackmail bandwagon and demanding Government aid. Perhaps imposing caps will restore some balance by inflicting some personal pain on the wealth of the executives making the demands.

However, perhaps the most interesting thing is that the proposal stops short of capping all forms of compensation and allows executives to be paid in shares. Given that bank shares are in the doldrums, a $500,000 bonus in shares buys you considerably more shares than it did up until recently. Assuming a bailout does ensure a company's survival, then the executives forced to forgo cash may get to make even bigger sums if their shares manage to recover even some of their lost glories, which won't make for pretty news headlines e.g Lloyds is trading at 95p today from a low of 44p only a couple of weeks ago which would have double an executives money, but several fold returns are not inconceivable. Of course, you could contend that executives who nurse a company back to health are deserving of this, but against a backdrop of Government funded survival and the possibility of an economic tide lifting all companies in due course, the public may well feel aggrieved with such an outcome.

Labels: Bank, Barclays plc, Financial Services Compensation Scheme, salary caps

posted by John Wilson @ 1:12 PM Permanent Link ,

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Stitching up panoramic views for free Monday, February 02, 2009

It's not uncommon to want to take a panoramic shot of scene / place / event only to believe that you're not carrying the right equipment or don't possess the right software to even try. Thankfully, the software to do the job is now freely available both as an online service and as a download, with clear guidance on how to take suitable shots.

Whilst housebound today thanks to London's heavy snowfall, I wanted to grab a panoramic shot of our snowy garden to send to my family in various locations in the UK and overseas. Having taken a sequence of overlapping shots whilst keeping the camera in roughly the same spot [height and position], I tried out two free services both of which gave excellent results.

The first was Clevr which is a downloaded application that utilises the Adobe AIR framework, which automatically installs itself if not already present. Shots are imported into the applications, re-ordered if necessary and stitched together within the application, from where the generated panorama can be both uploaded or saved as a new file. Uploaded versions may be shared or embedded in other websites with zooming and paning features as standard. It was amazingly easy to use which has encouraged me to consider taking more panoramic shots in future.

I also tried MagToo, which is an online service that not only assist with creating panoramic views, but can also create photo slide shows. Both facilities are free and are impressively integrated with a huge number of social networking and blogging sites to which results may be sent. Furthermore, there is neat Google map location tagging facility provided as standard to add "meta-location data" about your shots. The process to create a panoramic image was remarkably similar to Clevr, with automatic stitching of the photos and it was just as quick to use, with great results that could be embeded or downloaded.

I confess I found it difficult to choose a particular favourite between them but ably performing the required task easily, quickly and effectively. There are other similar packages out there, including the Microsoft Photosynth offering, but both of these apps are definitely worth bookmarking for future use.

Labels: Microsoft Live Labs Photosynth, Panorama, photography, photos

posted by John Wilson @ 9:12 PM Permanent Link ,

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City Banker rests as hell freezes over ahead of London meltdown

Brilliant effort and great photo from FT Alphaville.

Labels: humour, snow

posted by John Wilson @ 4:06 PM Permanent Link ,

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Continuity Plan is snowed in

Image via Wikipedia

I'm a Brit and so obviously I am going to talk about the weather! Today, most of the South East of England is snowed in with airports closed, trains cancelled and buses not running, whilst many roads are impassible. Of course, many countries would consider this a light covering of snow and will laugh at our helplessness, but at the same time one has to remember it is increasingly rare to get heavy snow in the South of the UK - this is the heaviest snow fall for 18 years.

However, the subject of this post is not to debate the weather per se but to make a couple of observations:

the websites of transport operators crashed under the weight of enquiries: Whilst the conditions may have prompted new peaks in hits, it demonstrates that these firms don't have any or sufficient "on-demand" technology expansion facilities in place or if they do, they may be reliant on absent staff to activate them.
Last year JP and I were discussing the lunacy of disaster recovery thinking amongst City firms which tends to fixate on having a replica site, normally located some distance outside of London. In our view, in the event of a disaster, most staff will more inclined to return to their families and homes than travel to a DR site, assuming that transport links are even operating. Instead we both felt that it was better to spend money on allowing staff to work from anywhere i.e. remote working facilities. This approach caters for DR situations as well as having day-to-day practical uses. As demonstrated today, with many City workers unable to travel to their offices or a DR site, those without remote working facilities will be at a disadvantage to those with staff able to seamlessly work from home.
the fragility of our infrastructure and supply chains is exposed by a snow flurry, albeit we assume that this will be a temporary aberation with several days inconvenience followed by days of "recovery" as supply chains attempt to catch up. Yet it is a superficial foretaste of other probable natural disasters e.g. a flu pandemic which would force families into isolation and expose the complete dependency we have on things like supermarket supply chains, water and power services operations and health services - their staff would be similarly isolated and unable/unwilling to perform duties that we presently take for granted.

Many companies will also find their customers aren't transacting with them today e.g. retail outlets whose customers will be unable/disclined to venture out to shop depriving them of sales. The minority that have failed to invest in adequate online facilities will find themselves at an disadvantage.

Sometimes it takes a snow flurry to make one question basic assumptions. Let's hope people use their time at home to do so "white sky" thinking.