Thanks to Mike T who I have known for a few years now. Mike is an air traffic controller as well as being a keen private pilot so if there is one person who can see through the telescope from both ends, it’s this man.
Anyway, GE Aviation are one of the big players in aviation. Here’s a quote from the website that I am going to link you to in a moment.
GE Aviation designs engines, flightpaths, and advanced aircraft systems. And we wanted to share the intricate choreography of flying in all its glory.
Dancing in the air!
Here’s the video – just 1:48 long – it’s captivating. This link takes you to the GE web page where there is much more of great interest other than the video.
If you only want to watch the video then, of course, there’s a copy on YouTube, as below. Enjoy!
I posted a rather tongue-in-cheek item on the Irish situation yesterday. Anyway, a good friend, Peter M, sent the in following to illustrate both the complexity and, in the end, the delightful simplicity of the Irish bailout. Read on.
It is a slow day in a damp little Irish town. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit.
On this particular day a rich German tourist is driving through the town, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.
The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher. The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel. The guy at the Farmers’ Co-op takes the €100 note and runs to pay his drinks bill at the pub. The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him “services” on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note. The hotel proprietor then places the €100 note back on the counter so the rich traveler will not suspect anything.
At that moment the traveler comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory, pockets the money, and leaves town!
No one produced anything. No one earned anything. However, the whole town is now out of debt and looking to the future with a lot more optimism.
And that, Ladies and Gentlemen, is how the bailout package works.
Recently, I saw something come in to my in-box that just held my attention for sufficiently long to get me to move from scan reading to actually thinking about what I was reading and how it made me feel.
The US government may require cars to include scrambling tech that would disable mobile-phone use by drivers, and perhaps passengers.
No, this is not some other form of Government interference in areas of our lives that are irrelevant to the real world. This is serious stuff:
Believe it or not, I wasn’t always so outspoken about the dangers of distracted driving. Like a lot of folks, I just didn’t give a lot of thought to it.
But that all changed as I met people from coast to coast who told me about the loved ones they lost in senseless crashes caused by texting and cell phone use behind the wheel. And it was their stories–of dreams shattered and lives cut short–that turned the fight to end distracted driving into my personal crusade.
These people have had a profound effect on me. And I think their stories will have a profound effect on you.
SNIP
Just last year, nearly 5,500 people were killed and 500,000 more were injured in distracted driving-related crashes. But, these aren’t statistics. They’re children and parents, neighbors and friends.
The problem is that the average driver doesn’t think that he or she is an average driver: nearly two-thirds of drivers think of themselves as safer and more skillful than a driver of median safety or skills — a statistical impossibility, of course.
When faced with the prospect of automotive mobile phones being disabled, we’d be willing to bet that most drivers, suffused with confidence in their own skills, will think in terms of personal inconvenience and a restriction on personal freedom.
Perhaps it might be better to think of the guy texting in the lane to your left, or the gal yelling at her ex on her iPhone in the lane to your right, and think not of your own inconvenience, but of some distracted dolt killing you.
Remember one unassailable statistic, as explained by the late, great George Carlin: “Just think of how stupid the average person is, and then realize half of them are even stupider!”
LaHood may be right. Disabling mobile phones in cars should not be looked at as a way of protecting you from yourself, but instead as a way of protecting you from the stupid.
The glass is filled half-way. Is it half-full or half-empty?
This is a rhetorical question, of course. It is what comes to mind as I write this simply because of a small half-full/half-empty experience in the last 10 minutes. Let me explain.
I had started watching a video on TED.com. This one was entitled Jared Diamond on why societies collapse. Within a few minutes I started drifting to the comments, and read:
Jared Diamond talks of how societies choose (unwittingly) to collapse. William McDonough with his Cradle to Cradle concept also talks about choices and provides ‘Love of all children of all species for all time’ as a positive conscious choice.
With goals or missions in place (for example profit for businesses) humans have achieved amazing things.
So what would happen if all groups, families and individuals followed a mission of ‘Love of all children of all species for all time’?
I rather liked that. We always have choices. A positive conscious choice is always better.
So I stopped the Jared Diamond lecture and found the William McDonough one, also on TED.com, and conveniently shared on YouTube. It’s just 20 minutes long, so settle down somewhere, perhaps with a glass filled half-way with something!
Digital content opens up a whole new ways of thinking about price, value and success.
Book cover
Some time ago, I read the new book from Chris AndersonFree: The Future of a Radical Price It was a very busy period of my life and I had ‘parked’ the conclusions contained in the book for a later time – and then forgot about it!
Anyway, something that came into my in-box earlier today reminded me of the power of giving content away. But before going there, let me briefly come back to Anderson’s book. An extract from this link talking about what in the UK we know as jelly and in the US the name of Jell-O, (nice history on Wikipedia):
But it didn’t sell. Jell-O was too foreign a food and too unknown a brand for turn-of-the-century consumers. Kitchen traditions were still based on Victorian recipes, where every food type had its place. Was this new jelly a salad ingredient or a dessert?
For two years, Wait kept trying to stir up interest in Jell-O, with little success. Eventually, in 1899, he gave up and sold the trademark — name, hyphen, and all — to Orator Frank Woodward, a local businessman. The price was $450.
Woodward was a natural salesman, and he had settled in the right place. LeRoy had become something of a nineteenth- century huckster hotbed, best known for its patent medicine makers. Woodward sold plenty of miracle cures and was creative with plaster of paris, too. He marketed plaster target balls for marksmen and invented a plaster laying nest for chickens that was infused with an anti-lice powder.
But even Woodward’s firm, the Genesee Pure Food Company, struggled to find a market for powdered gelatin. It was a new product category with an unknown brand name in an era where general stores sold almost all products from behind the counter and customers had to ask for them by name. The Jell-O was manufactured in a nearby factory run by Andrew Samuel Nico. Sales were so slow and disheartening for the new product that on one gloomy day, while contemplating a huge stack of unsold Jell-O boxes, Woodward offered Nico the whole business for $35. Nico refused.
Anderson then explores what Woodward does next:
So in 1902 Woodward and his marketing chief, William E. Humelbaugh, tried something new. First, they crafted a three-inch ad to run in Ladies’ Home Journal, at a cost of $336. Rather optimistically proclaiming Jell-O “America’s Most Famous Dessert,” the ad explained the appeal of the product: This new dessert “could be served with the simple addition of whipped cream or thin custard. If, however, you desire something very fancy, there are hundreds of delightful combinations that can be quickly prepared.”
Then, to illustrate all those richly varied combinations, Genesee printed up tens of thousands of pamphlets with Jell-O recipes and gave them to its salesmen to distribute to homemakers for free.
(My emphasis – do read the extract in full from here.) The book is highly recommended.
So what was it that came into my email in-box? It was an email from Leo Babauta of Zen Habits, a Blog that I subscribe to. This is what it said:
I’m happy to announce that focus is now in the Kindle Store. You can get the full book — the free chapters plus bonus chapters from me and five other authors — for $8.99. It doesn’t include the videos, audio interviews and bonus PDFs in the full version.
The free version is simple: it’s 27 chapters that you can download for free, without having to give an email address or do anything else. It’s uncopyrighted, and you can share it with as many people as you like.
Again, you can share this ebook freely, so feel free to post it on your blog, Twitter, Facebook, or email.
I have no way of knowing how many downloads have been made but I suspect many more than one might imagine.
What I would be curious is to know from amongst the many Learning from Dogs readers how many of you have read this Post to the point of downloading the book for yourself, or others?
Will Hutton’s book continues to impress me; greatly.
On 28tTh October, I wrote an article about Will Hutton‘s impressive book, Them and Us. I had got to page 120 or thereabouts and could resist no longer the urge of reading the book to the end before commenting on Learning from Dogs.
Now I am reading through page 260 and, again, find myself incapable of waiting until the book is completed before offering further thoughts!
Despite being very optimistic about the long-term future, I sense that the period that we have been in since 2008 may turn out to be one of the darkest in recent history – I touched on this aspect in a recent post called Faith in a (new) future.
One of the things that strikes me is the complete lack of openness from the British Government about the likely growth scenarios over the next decade. Here was how the latest ‘growth’ figures were presented a couple of weeks ago, “The economy grew by 0.8% in the three months to September – double the rate that had been predicted by analysts.”
UK output increases by 0.8 per cent 4Q 2010
But here’s Will Hutton,
Britain is going to be much poorer than it anticipated just a few years ago.
They paint a sober picture of prolonged loss of output, high unemployment and depressed asset prices, and warn that there is no precedent for what happens after the kind of global crisis through which we have just lived. (My italics)
Hutton says that growth would need to accelerate to 3.25 per cent in order for output to reach its predicted level if the recession had not taken place.
He then says that a more plausible scenario if growth remains at 2.75 per cent (average level in recent years leading up to the credit crunch) “then it might never recover sufficiently to converge with the old trajectory.”
Hutton continues,
However, even that may be optimistic. The reality is that between the economic growth troughs of 1991 and 2009, growth in Britain actually averaged just over 2 per cent.
That would lead to a cumulative loss of output of more than £5 trillion!
It could be even worse. The economics team at Barclays believe that is it perfectly plausible for growth to average just 1.75 per cent for the first half of the current decade.
And all of this before the huge budget cuts announced by the UK Coalition Government start to bite!
So the reality is that we are a long way away from any form of real recovery, despite what the politicians are saying!
What is so impressive about the book is that Will Hutton is meticulous in his research (there are 23 pages of referenced notes at the end of the book) and from Chapter 9 starts setting out how Britain “has the opportunity to put things right fast.” So this is a book from a well-respected author that sets out carefully and logically the cause of the recession and then presents some powerful options for change.
The bottom line is that Britain has to be a much more fairer society. Not just Britain. Here’s an extract from a recent posting on Tom Engelhardt’s Blog. Tom is the author of the book, The American Way of War.
I’m no expert on elections, but sometimes all you need is a little common sense. So let’s start with a simple principle: what goes up must come down.
For at least 30 years now, what’s gone up is income disparity in this country. Paul Krugman called this period “the Great Divergence.” After all, between 1980 and 2005, “more than 80%of total increase in Americans’ income went to the top 1%” of Americans in terms of wealth, and today that 1% controls 24% of the nation’s income. Or put another way, after three decades of ”trickle-down” economics, what’s gone up are the bank accounts of the rich.
In 2009, for instance, as Americans generally scrambled and suffered, lost jobs, watched pensions, IRAs, or savings shrink and houses go into foreclosure, millionairesactually increased. According to the latest figures, the combined wealth of the 400 richest Americans (all billionaires) has risen by 8% this year, even as, in the second quarter of 2010, the net worth of American households plunged 2.8%
Of course, that’s a crazy idea. So why in business do we so often find almost a direct parallel?
Most people who have had anything to do with manufacturing in any form know that the first thing that generally gets cut in a down turn is training and development.
Why? Because it’s seen as a ‘nice to have’ and most companies reckon they can do without it.
In the very short term, that may be true; note the ‘maybe’
True, because things will seem to be normal. In fact there will be an important change almost immediately – a drop in morale, which many managers will not notice!
But who is in business for the short term? So we need to look at the longer term and see if there is any valid strategy for cutting back on the most vital resource for a business’s people.
Look what has happened to much of our manufacturing capability. Outsourced abroad. Clearly if it’s cheaper to do that then why wouldn’t you?
Change?
Why is it cheaper, though? Because, I believe, most British companies weren’t able to adapt and change quickly enough. Shareholders or senior management got fed up and the decision was made.
Change is a funny thing. If it’s our idea then we’ll do it but if it is seen to be inflicted on us, resistance is guaranteed. This leads us into the next thing:
You can’t impose change. People need to be facilitated to find their own solutions.
Engage with people, ask them where greater efficiencies should be made. This is the only way towards successful change and requires high levels of interpersonal and communications skills.
What’s good for business is the same outside for that matter. Without these skills it is very difficult to develop the relationships which are necessary to encourage people to pull together in times of hardship. These do need developing in people and not to bother is a highly risky option.
So, investing money in planned and structured people development, where benefits and performance improvements can be identified, is a good use of money, especially in difficult times.
One of the problems of our modern media is that there is so much competition for news that old stories frequently just seem to disappear.
So it was delightful to find in last Saturday’s Daily Telegraph news that the rescue shaft had achieved a very important milestone – the pilot shaft, 12 inches in diameter, had broken through to the chamber where the miners patiently wait for their rescue.
Rescuers working to release 33 trapped Chilean miners have achieved a pivotal breakthrough by drilling an escape shaft through to the underground chamber occupied by the men.
Focus warning! This is a longer piece that usual but also a more important piece than usual. Please find the time to read it and explore the links. Thank you.
Many, many years ago I lived in Tamarama Bay, just East of Sydney,
Bronte Beach, Australia
Australia. It was a very short walk to Bronte Beach which was much better experience than the famous Bondi Beach about half a mile North of where we lived.
Thus when I saw the name Bronte Capital it caught my eye because of old resonances from the word “Bronte”.
OK, to the point!
John Hempton is a principle at Bronte Capital, an Australian fund manager. John is no slouch having been in his past a Chief Analyst for the New Zealand Treasury and Executive Assistant to the CEO of ANZ Bank in New Zealand. John’s CV is here.
Bronte Capital have a Blog – well who doesn’t – and it was a link to that Blog from Naked Capitalism that caused me to read a recent article from John about deregulation.
Despite me not understanding many of the technical aspects, it struck me with some force, so much so that I wanted to reproduce chunks of it on Learning from Dogs. John was gracious enough to give me written permission to so do! Thanks John.
I have just read Daniel Amman’s excellent biography of Marc Rich – the oil trader notoriously pardoned by Bill Clinton. I don’t want to get into the politics and ethics of the pardon other than to note that few things in it are black-and-white when you finished reading the book.
and a couple of paragraphs later explains that Marc Rich has a rather appropriate surname – well this is how John writes:
Marc Rich exploited price fixing/import/export controls to make simply unbelievable profits trading oil. Marc Rich & Co (the Swiss vehicle) was started with just over $1 million in capital and a couple of years later was making in excess of $200 million in profit. This level of profitability exceeds – by far – any other trading operation I have ever seen – and was probably the most profitable trading operation in history. Marc Rich & Co (since renamed Glencore) is possibly the most valuable business in Switzerland within the lifetime of its founder.
Just stop here for a moment.
This man, Rich, goes from one million dollars in capital to two hundred million dollars in profits in 2 years, give or take! Read on:
A typical Marc Rich & Co trade involved Iran (under the Shah), Israel, Communist Albania and Fascist Spain. The Shah needed a path to export oil probably produced in excess of OPEC quotas and one which was unaudited and hence could be skimmed to support the Shah’s personal fortune. Israel – a pariah state in the Middle East – wanted oil. Spain had rising oil demand and limited foreign currency but was happy to buy oil (slightly) on the cheap. Spain however did not recognise Israel and hence would not buy oil from Israel – so it needed to be washed through a third country. Albania openly traded with both Israel and Spain. Oh, and there is an old oil pipeline which goes from Iran through Israel to the sea.
So what is the deal? The Shah sells his non-quota oil down the pipeline through Israel and skims his take of the proceeds. Israel skim their take of the oil. Someone doing lading and unlading in Albania gets their take and hence make it – from the Spanish perspective – Albanian, not Israeli oil. The Spanish ask few questions. The margins are mouth-watering – and they all come from giving people what they really want rather than what they say they want. We know what the Shah wanted (folding stuff). We know what Israel wanted (oil). We know what Spain wanted (cheap oil). Who cares that Spain was publicly spouting anti-Israel rhetoric. [Similar trades allowed South Africa to break the anti-Apartheid trade embargoes.]
John explains:
It also helped that Marc Rich & Co was a (highly) multilingual firm. Rich is fluent in Spanish (it is the language he talks to his children in). He speaks English, German, Yiddish and presumably Hebrew. His business partner (Pincus Green – pardoned the same day as Rich) speaks Farsi amongst many other languages. They could do this deal because they could negotiate it and – deep in their heart they hold the Ayn Rand view that trade is a moral virtue and hence they do not need to be concerned with other morality. [The only line that matters is the law – and then it might not be the law of his adopted country – Switzerland – rather than the United States where he was resident.]
My italics, by the way. Just stay with me for a short while longer to ‘get’ John’s important message. Here’s John again:
The regulatory regime for domestic American oil was also perverse. Old oil (meaning wells drilled before the first oil crisis) received one price. New oil (wells drilled after the crisis) received a higher price. Squeeze oil (oil that was extracted from wells that ran less than 10 barrels per day) received a higher price still. The oil could be chemically identical and the price difference over $20 per barrel. Obviously a trader with a method (any method) of changing the oil source could make a fortune. Again I am not commenting on legality or morality. That was just plain fact. Ayn Rand applies – you give a value and you receive a value.
What all this regulation did was that it allowed people to make simply grotesque profits by thwarting regulation. The regulation thus worked less well and it was socially unfair. Pincus Green was good at negotiating in Farsi. He was astoundingly brave going to Iran immediately after the Shah fell. He was good at organising shipping. He worked really hard – but he did not invent something that changed the world and he wound up a billionaire. Traders make money by intermediating real business solutions – but these were real business solutions to problems made by legislation. Bad regulation, moral indignation about “trading with the enemy” or “trading with Israel” or with racists in South Africa made people with Ayn Rand morals exceedingly wealthy because you could arbitrage your way around any of these regulations.
OK, you are probably getting the drift of this important article from John. If any of this ruffles your hair, then read it all – it’s a very important message. This is what John is saying:
As a plea then I want a debate about the right form of regulation – a regulation that controls agency problems but does not allow arbitrage opportunities to people with “Ayn Rand morals”.
We are not going to get that from the current Tea Party Republicans. They simply argue that regulation (they say but do not mean all regulation) impinges on “freedom” (something that is clearly a good but hard to define). However many of the same people want planning regulations to ban a mosque in downtown New York because it is an insult to the victims of 9/11 (and banning mosques is not a restriction on “freedom”).
If that is the level of debate we are not going to get good re-regulation – we are just going to get pandering to whichever lobby group manages to garner most support. And that is a real risk because we will leave agency problems in place (they benefit the rich and powerful) and we will introduce the same sort of (dumb) regulation that made Marc Rich and Pincus Green astoundingly wealthy. That sort of regulation also benefits the rich and powerful – especially those with “Ayn Rand morals”. [The rich and powerful – if you have not noticed – are good lobbyists. Unless we are careful many amongst them will get their way.]
You didn’t rush those last three paragraphs, did you?
John concludes thus:
I don’t know how to do this well – but I thought I would state the obvious. The most obvious things that need regulation are things with a government guarantee (implicit or explicit). If you have an implicit guarantee (as we now know almost all large financial institutions have) then regulation really matters. If there are large agency problems (small shareholders, large management) then regulation should be deliberately biased to put power in the hands of shareholders not managers (eg banning staggered board elections).
Likewise other agency problems should be strongly policed and the regulation should be of the form that allows that policing. When Elliot Spitzer found that Marsh – a large insurance broker – was participating in bid rigging against schools buying insurance that was shocking – and is precisely the sort of thing in financial markets that should be policed strongly. But it took Elliot considerable effort to find and prove his case. The rules should be established so that sort of behaviour is really difficult to hide.
And I do not think that I need to explain to anyone how much mortgage brokers contributed to the crisis by (a) deliberately misleading borrowers about conditions on their mortgage and (b) participating in the faking of borrowers income/assets/education level when they on-sold the loans to Wall Street. Agency problems were at the core of the crisis.
On the other side if there is no agency problem then deregulation should remain the order of the day. Trade restrictions create arbitrageurs – and the arbitrageurs ensure the trade restrictions don’t work anyway.
There are obviously going to be extensions to this rough rule – and this post is really to garner discussion. But for a start I expect agents who benefit from their agency (and the abuse of their agency) to join the Tea Party.
It is difficult to get policy right. And when and if the policy is got right we are in for a very long fight to implement it.
I take my hat off to Mr John Hempton. He’s in the ‘finance’ industry, probably doing well, and yet he has the courage to hold a mirror up to the desperately immoral happenings going on around him.
It’s a real pleasure and honour to publish this Post.
Let me close with a short piece from the Sydney Morning Herald of the 2nd January, 2010.
John Hempton ... blog locally, act globally. Photo: Domino Postiglione
WHEN John Hempton started a blog as he recovered from pneumonia, he did not expect to send shockwaves through the finance industry.
But that is exactly what the 42-year-old fund manager did through his Bronte Capital blog. His exposé of an unrelated US hedge fund would eventually lead to $426 million in investments being frozen and authorities seizing control of the Albury fund manager Trio Capital shortly before Christmas.
THERE are plenty of studies which show that dogs act as social catalysts, helping their owners forge intimate, long-term relationships with other people. But does that apply in the workplace? Christopher Honts and his colleagues at Central Michigan University in Mount Pleasant were surprised to find that there was not much research on this question, and decided to put that right.
And the article concludes:
Mr Honts found that those who had had a dog to slobber and pounce on them ranked their team-mates more highly on measures of trust, team cohesion and intimacy than those who had not.
But do read the article in full because the conclusions are quite significant. Once again, the link is below:
Learning from Dogs 