Posts Tagged ‘IBM’
A delightful tale sent to me by Richard Maugham.
Richard and I go back too many years! He has been a dear friend despite the obvious hurdle that when we first met, he declared that he was a typewriter salesman for Olivetti in the UK with me admitting that I was a typewriter salesman for IBM UK! Here’s the story.
WHAT WENT WRONG IN EUROPE – SIMPLY EXPLAINED!
Helga is the proprietor of a bar. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem she comes up with a new marketing plan that allows her customers to drink now, but pay later.
Helga keeps track of the drinks consumed on a ledger (thereby granting the customers’ loans).
Word gets around about Helga’s “drink now, pay later” marketing strategy and, as a result, increasing numbers of customers flood into Helga’s bar. Soon she has the largest sales volume for any bar in town.
By providing her customers freedom from immediate payment demands, Helga gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer – the most consumed beverages.
Consequently, Helga’s gross sales volumes and paper profits increase massively. A young and dynamic vice-president at the local bank recognises that these customer debts constitute valuable future assets and increases Helga’s borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.
He is rewarded with a six figure bonus.
At the bank’s corporate headquarters, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS. These “securities” are then bundled and traded on international securities markets.
Naive investors don’t really understand that the securities being sold to them as “AA Secured Bonds” are really debts of unemployed alcoholics. Nevertheless, the bond prices continue to climb and the securities soon become the hottest-selling items for some of the nation’s leading brokerage houses.
The traders all receive six figure bonuses.
One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Helga’s bar. He so informs Helga. Helga then demands payment from her alcoholic patrons but, being unemployed alcoholics, they cannot pay back their drinking debts. Since Helga cannot fulfil her loan obligations she is forced into bankruptcy. The bar closes and Helga’s 11 employees lose their jobs.
Overnight, DRINKBOND prices drop by 90%. The collapsed bond asset value destroys the bank’s liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community.
The suppliers of Helga’s bar had granted her generous payment extensions and had invested their firms’ pension funds in the BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds. Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations; her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.
Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multibillion dollar no-strings attached cash infusion from the government.
They all receive a six figure bonus.
The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who’ve never been in Helga’s bar……………………….!
I can add not a single word to this!
Reflections on these present times.
Want a brilliant idea for tomorrow? Stay in the present!
Dogs do this wonderfully. I am told that followers of Zen Buddhism discover peace and grace from embracing the present. But is there more to this? Is there some deeper psychology involved? Does our species have an intrinsic challenge in terms of staying in the present?
My musings on this arise from a couple of recent conversations.
The first was with Peter McCarthy from the Bristol area of West England. Peter and I go back a few years (at my age, everything goes back a few years!) and at one stage I did some work for Peter’s company, Telecom Potential. Just a quick aside, Peter’s company was based in the magnificent Clevedon Hall, a mansion built in 1853 as a family home for Conrad William Finzel, a German-born businessman. Here’s a picture of one of the rooms,
Peter, like me, is sure that the period in which the world now appears to be, is not some cyclical downturn, not some temporary departure from the national growth and employment ambitions promoted by so many countries. No! This one is different.
Peter is sure that a major transition is under way, as big as any of the great societal upheavals of the past. And, for me, a fascinating comment from Peter was his belief that the key attitude required for the next years would be innovation. Peter reminded me that we tend to think of innovation as applying to things physical, scientific and technical. But Peter sensed that it would be in the area of social innovation where key changes would arise and, from which, these large societal changes would flow.
Then a day later I was chatting with one of the founders of a brilliant new authentication process, Pin Plus. It is a very smart solution to a major global problem, the weaknesses of traditional password user-authentication systems.
On the face of it, Pin Plus is obviously a better and more secure way of authenticating users, and a number of key test customers have borne this out. Jonathan C was speaking of the challenges of convincing companies to have faith in this new process. This is what he said,
More than once, indeed many times, I am told by prospects something along the lines that the IT world has been looking so hard and so long for a password solution that a solution can’t possibly exist.
Let’s ponder that for a moment. Are we saying that a far-sighted approach to the potential for change is not an easy place for some, probably many, human brains?
Indeed, Jonathan and I mused that here we were, both speaking via Skype, an internet telephony service, both of us looking at different web sites in support of many of the points that we were discussing and totally dependent, in terms of our mentoring relationship, on the technology of the internet, a multi-node packet-switched communications system that was a direct result of the American shock of seeing the Russians launch the world’s first artificial satellite, Sputnik 1, into low earth orbit on the 4th October, 1957.
At that time, it would have seemed impossible for anyone on the planet to see that the American response to Sputnik 1 would eventually lead to the vast packet-switched network that is now the modern Internet.
But why do we regard the ability to look into the future so utterly out of reach of the common man? Look at this, the Internet Timeline here. Look how quickly the response to Sputnik1 gathered pace. See how Leonard Kleinrock of MIT way back in May, 1961, presented a paper on the theory of packet-switching in large communications networks.
So maybe there’s a blindness with humans. A blindess that creates the following bizarre characteristics,
- Whatever is going on in our lives at present we assume will go on forever. I.e. the boom times will never end, or the period of doom and gloom is endless.
- Our obsession with how things are now prevents us from reflecting on those signs that indicate changes are under way, even when the likely conclusions are unmistakeable. The ecological and climatic changes being the most obvious example of this strange blindness that mankind possesses.
- Yet, unlike animals and some spiritual groups of humans, truly living in the present appears incredibly difficult for man.
- However, the history of mankind shows that our species is capable of huge change, practically living in constant change for the last few millennia, and that a very small proportion of a society, see yesterday’s article, is all that is required to create a ‘tipping point’.
I want to continue with this theme but conscious that there is still much to be written. So, dear reader, I shall pause and pick this up tomorrow.
Just stay in the present for twenty-four hours!
Concluding article on the great Benoit Mandelbrot.
Yesterday, I wrote about Benoit Mandelbrot but wanted to save some additional information for today.
There’s a very comprehensive review of Benoit’s life on a website called NNDB. In that review, it mentions his association with the IBM Thomas J. Watson Research Center where he worked for 32 years. It was while working for IBM that he published the paper that established his credentials world-wide. Taken from the IBM website is this extract,
The father of fractals, Dr. Benoit Mandelbrot, passed away from pancreatic cancer on October 16, 2010. He was 85.
Benoit, IBM Fellow Emeritus, joined the IBM Thomas J. Watson Research Center in 1958 where he worked for 32 years. His 1967 article published in Science, How Long Is the Coast of Britain? Statistical Self-Similarity and Fractional Dimension, introduced the concept that a geometric shape can be split into pieces that are smaller copies of the whole. It wasn’t until 1975 that he defined the mathematical shapes as fractals.
Here is another website that has fractal images taken from the Mandelbrot set. An example.
Finally, if you go to this website there is a slideshow of stunning images of fractals in honour of the great man.
This is more than about the problems with Toyota.
The Economist is a newspaper. It was first published in September 1843 which, of itself, makes it a notable newspaper. Many years ago, more than I can recall just now, I became a subscriber to the newsprint version of this weekly paper. It has become such a companion, so to speak, that when I left the UK in September 2008 to come to Mexico I made arrangements to continue receiving The Economist each week.
However, the Mexican postal system, despite being thoroughly reliable, is rather slow and, rather logically if you muse on it, the postman always only delivers when there is more than one item. Thus the particular copy of The Economist that carried the story about Toyota arrived late and with three other editions!
Let me turn to the point of this article.