Category Archive 'Current events'

Wall Street Panic Attack

Current events, Personal finance

This week, the global economies survived the United States debt fiasco only for markets to plunge off the proverbial cliff this Thursday.  Most markets, including the United States’ S&P 500 and the Dow Jones Industrial average, were down 3-5%.  Talks of a double-dip recession or an outright depression increased.  But how bad are things, really?  And what are the “safest” investments right now?  Finally, what will happen now that Standard and Poor’s has downgraded American Treasuries/debt?

The Current Mood 

A “contagian” of systemic financial trouble and a strong likelihood of default has affected most of the European Union.  But while traveling through the U.K., and Germany last week, two of the admittedly strongest economic European nations, I did not witness the signs of increasing poverty that I often do even on the eastern seaboard of the United States.  There were very few vacant shops, less homeless people, and nicer cars on the road.  Of course, this is a very subjective perspective.  European countries as diverse as Portugal, Italy, Ireland, and of course Greece, are on the road to default or knocking at the door.

Back home, in the United States, the once unthinkable has happened: one of the major credit reporting agencies, Standard and Poors, has dropped the U.S.A’s always sterling AAA credit rating down to AA+.   The real question, of course, is what affect does that have on the United States and the global economy?

Many people are aware that a downgrade in credit rating means that the United States will be seen as a riskier debtor, and that the U.S., will therefore have to pay a higher interest rate when borrowing.  There remains a fear that China will sell all of its treasury bonds and call for its debt–a move that could equal default for the United States.  But while researching this issue, I learned of another, equally frightful possibility…default by internal investors.

What I mean by “default by internal investors,” is this: most mutual funds and other investment vehicles require that most or all of the investments are contained in AAA investments.  Now that the United States has been downgraded by the Standard and Poor’s (with the other two agencies likely to follow suit)– this too could create a run on treasury bills/other U.S. investments that could lead to default. 

This is not dissimilar, perhaps, from what occurred with the hyperinflation of the Weimar Republic, in Germany.  The reparations due from World War I were demanded by the victors, and this caused a period of rapid–yes even extreme, inflation.   Of course, the United States’ greatest debtor, China, is none too happy with the downgrade either.

Considering the fact that United States employment rates hover above 9%, and that other major indicators such as the housing market remain stagnant at best; it is clear that the United States–and global economies are in a very difficult situation right now.

How to React 

I am not a financial expert, and I truly believe that how one should react is entirely tied to their own current situation.  What I am seeing from many investors I talk to or read about, however,  is that they are running to hard assets, such as gold, silver, real estate, or other commodities.  For this reason, gold and silver (although certainly not real estate), are at all-time highs.

When there is a widespread, international economic crises, it’s difficult to find any “safe investment.”  When a major agency such as the Standard and Poor’s downgrades the United States debt–causing the supposedly “safest” of investment (U.S. Treasuries) to be called into question, then it’s certainly one of the toughest times in recent history to know where to put your savings.


It’s clear that the world-wide economic crises is not going to be resolved any time soon.  Since 2008, we have been dealing with what will likely later be referred to in history books as a Depression.  It is entirely possible that the future will be even more strained than the present.

How are you dealing with the latest bad news?  How are you investing your monies?  Thus far, I’m staying the course.  Will that be, in hindsight, a terrible mistake?

Let me know your thoughts on the global debt crises/systemic global financial issues.

Also, if anything I have written in this article is not factually correct, or if I missed anything in my research, please leave a comment to let me know.  Thanks.










Not sure what to think: vending machines that dispense gold?

Current events, Personal finance

Heard on BBC/NPR today: German company has apparently launched several gold vending machines (meaning vending machines that dispense gold, not gold-colored machines, although they are that as well) called .

Picture this: instead of putting in money and getting a Coke can, you put in some bills to purchase gold bullion. (And yes, the machine is apparently bullet-proof.)

Apparently the company specializes in selling gold online and has a robust IT security system but decided that a great way to expand the market even further would be to sell vending machines in public places like airports, fitness centers, cruise ships, and the like. It believes the recent financial crisis is at least half of the reason that people have become interested in purchasing gold, including from vending machines.

Spot prices are calculated every 8 seconds but prices in the vending machines change every 10 to keep up with market conditions. You can buy anything from gold bars at 1 gram to coins and bars at one ounce.

The first vending machine was installed in an Abu Dhabi hotel last year, and next month, machines will be set up in Las Vegas and Boca Raton, FL, according to an article in the Guardian published last Thursday. Because overhead costs are minimal, the company claims they can offer better prices.

So…would you buy gold from a vending machine?

When India and China overtake the Western world

Current events, Internet

One website I enjoy immensely whenever I have time is , and I thought I’d share it here. TED stands for “Technology, Entertainment, Design” and is a non-profit that hosts lectures from thought leaders across the world on a regular basis. Although tickets and invites to each event are astoundingly expensive, they provide all the content for free on their website.

One popular speaker I’ve admired a lot is a professor from Sweden named . In addition to presenting his findings and data in a very visually understandable manner (through software he and his team created), his lectures themselves are very thought-provoking.

As mentioned recently, I’ve started , and I found one of Prof. Rosling’s presentations quite pertinent. It’s entitled . He predicts the year when the average pay per person per month in India and China will be equivalent to those in the US and UK.

As part of his lecture, he shows how the data move historically over the last century and half. Part of why I think his lecture is especially interesting is that, although it’s gotten better, I remember always having to learn about the history of major Western civilizations in high school — Greece, Rome, Medieval Europe, the Renaissance — but never once hearing about the histories of China and India. You’d think they never existed or weren’t learning about, at least in my day.

So, take a look at that lecture, and bookmark that site and browse around it when you have time. There’s a lot of good content — not only on geekery and intellectual topics but also music and art. Enjoy!

Metrics, metrics everywhere but where they should be

Corporate finance, Current events

Despite being a finance blog, I recently came across an article in that I thought was worth sharing. It’s pretty simple but drives the point home. I’ve worked in technology companies most of my career and they all claim to be data-driven. Few really are, and what’s worse, the amount of overhead that goes into producing so-called metrics reporting is horrendous in comparison to the value of its output.

Just because you have a dashboard with 72 metrics doesn’t mean you understand your business…in fact, if anything, it probably means quite the opposite. What that tells me is that you’re not putting your people to good use, and you don’t know how to distinguish what’s important from what’s noise in your business.

Instead of putting in all those man-hours to produce graphs that really don’t tell you anything (and that you likely don’t read anyway), why not take the time to really think about what you need your business achieve and the 3-4 indicators that you’d need to track? How should they be tracked? Remember, sometimes, it’s easier to talk to a person honestly in a one-on-one conversation than trying to measure something in a roundabout way. Like everything else in business, creating meaningful measures and indicators takes a lot of time, thought, and communication.

At the next level down, more detailed metrics can likely be tracked a bit more passively and set off an alert only if something goes awry (say, beyond a particular average, for example). Then you can spend your time looking into what caused that anomaly rather than putting together manual reports each week that don’t really add any insight. I heard a quip at work once that drives this point home. When you read an executive dashboard, it should be intelligible and useful while driving 60 mph, just like in the dashboard of a car. If yours can’t pass that test, then it has far too much info on it.

What’s ironic is that while many analysts spending their work hours busily dicing data every which way, they probably don’t spend enough time measuring in their own personal lives. What’s your monthly budget? How many credit cards do you have? How’s your 401K performed versus the market? Few of us can answer these questions or even think about them on a regular basis. Maybe it’s time to set our priorities straight :)

International Space Station and Space Shuttle Atlantis flyby during Thanksgiving

Current events

Depending on where you are, you may be able to see both the and in the night sky tonight, Thursday, and/or Friday night.

Just go to and enter in your zip code if you’re in the US or Canada. From other countries, you can go to instead. The site lists the time and direction/place you should look up in the night sky to see the event.

For most of the US, it seems ISS/Atlantis will be at around a -4 at least one of the following three days, which makes it brighter than Venus and should make it clearly visible assuming weather cooperates in your area.

Enjoy, and have a Happy Thanksgiving everyone!

Updated 6:30P, Wednesday, November 25: We just watched two bright objects fly over our house, right on schedule. Most exciting thing we’ve seen in the suburban night sky in a long time. For anyone who has another chance, you can’t miss it as long as you look in the right general direction! They go by fast!