I was going to post before the weekend, when I had some downtime at work, but I discovered that I had forgotten to pay my hosting dues. The hosting company had disconnected service, so I ended up spending some time making sure my service was restored. Somewhat ironic, because the subject of my original post was going to be about downtime.
As a consultant, you spend a lot of time “on the bench.” That time is valuable, since it means that you can work from home or better yet, catch up with friends and family. You can use that time to do laundry and run errands, things that are difficult when you are hundreds of miles away from home.
I’m finding out that there is little downtime when you’re a Product Manager. I seem to be a constant level of busy. However, it robs me of my web surfing, news reading and competitive analysis that I am so good at. Facebook is getting less and less of my time.
I’ve come to realize that one of the most important attributes of an employee is the way that they use downtime. It’s easy to piddle it all away and hard to make constructive use of it. Consider it a victory when you come out downtime feeling like you accomplished something.
The best way to prevent the next financial crisis, or dampen its effects, is to understand the roots of the current crisis. So it is with sadness that I read this article in the Huffington Post today. The article states that the four Republicans on the Financial Crisis Panel are releasing their own report, blaming the crisis on government policy and the Community Reinvestment act of 1977.
The Republicans, led by the commission’s vice chairman, former congressman and chair of the House Ways and Means Committee Bill Thomas, will likely focus their report on the explosive growth of subprime mortgages and the heavy role played by the federal government in pushing mortgage giants Fannie Mae and Freddie Mac to purchase and insure them. They’ll also likely focus on the Community Reinvestment Act, a 1977 law that encourages banks to lend to underserved communities…
This seems disingenuous and untrue. It gets worse:
During a private commission meeting last week, all four Republicans voted in favor of banning the phrases “Wall Street” and “shadow banking” and the words “interconnection” and “deregulation” from the panel’s final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.
The beneficiaries of the biggest bail out in American history are also getting the benefit of this grand whitewashing.
Venture Capitalists and others value non-public companies by the amount of the last investment or trade. In Facebook’s case, the last trade was rumored to value the entire company at 35 to 50 billion dollars. An example, if 10% of the company gets sold for 10 cents, then the entire company must be worth 1 dollar. In this case, people are willing to pay exorbitant amounts for shares of Facebook. Since there is such a restricted supply of these shares, and the demand is so great, the result is a stratospheric valuation of the entire company. There is a fascinating story over at Bloomberg on how trading in Facebook derivatives has taken off.
Current Facebook shareholders gain the most out of this scheme. However, it is sort of like a pyramid scheme – at some point they will run out of investors willing to pay such high premiums. If the stock ever does go public, and it will because of SEC regulations, the valuation should adjust downwards to reflect the intrinsic value.
There is a story that Google chief information officer Ben Fried likes to tell about his old job, as the managing director of Morgan Stanley. “There was this intern who came to work in the research department one summer,” Fried says. “After a couple of days of orientation and getting a good look at the technology that the IT department had given him, one day this guy decides to come in with his own computer and a great big monitor. He sets it up at an empty desk near the window, and he plugs in a cellular modem to get online. He never connected to the company network at all. He used all of his own technology. And you know what? He was the highest-rated intern in his class.”
A few months ago I wrote up a review on my Tommaso Monza on the Giant Nerd website. I purchased the bike at the end of the season in 2009. I put a ton of miles on it this year, and it’s the main reason I’ve lost 2-3 inches off of my waist. The bicycle is great, and it was a great value. I would definitely recommend it to beginning cyclists.
I was really shocked to receive a package in the mail the other day.
What got me is the handwritten, old-school note from the people at Giant Nerd. Sure, the water bottle is great. But someone actually took 5 or 10 minutes to write a nice thank you letter. That’s an awesome way to win awesome customer loyalty.
To contrast this, I recently bought a stick of deodorant that I was allergic to. I tossed out the stick of deodorant and sent a nice email to the company that makes it. I appreciated their response, but it really did look like a form letter. And they did send me a coupon in the mail for more deodorant that I am allergic to.
I have been thinking a lot about customer loyalty lately, and I hope to draw on my own experiences at litl.
Matt Taibbi posted an interesting article about the upcoming round of Quantitative Easing (QE2). It is obviously true that the Fed signals their actions to the market participants.
I think that QE2 is absolutely required at this point. There has not been enough fiscal stimulus in the economy. I agree with Paul Krugman’s assessment that the expansion of government spending is a myth. The burden falls on monetary policy.
The previous round of QE probably was not enough. The banks are currently in the process of de-leveraging and solidifying their balance sheets. Even if the low reserve requirements were lowered, the most likely scenario is that the additional money would be held on the balance sheet and not loaned out. It is most likely that the stimulus effects of the previous round of QE were dampened due to this de-leveraging. In other words, as more money flowed into the banking system, banks used the money to build up their balance sheets rather than making loans. This type of easing would have worked before the crisis, since the banks would have immediately taken the cash and loaned it out.
Tthe Fed is now also purchases Asset-Backed Securities (ABS) in addition to Treasuries. In theory, this enhances the effect of QE, since this takes troubled securities out of the market and puts them on the Fed’s balance sheet. The Fed has a much longer horizon than the banks, so it is possible that they may end up making a profit from these issues. However, as Taibbi points out, QE can buoy the ABS market since the demand will be higher. However, I think that just the expectation of QE has the same effect. Unlike Taibbi, I’m not sure if this is such a bad thing.
I purchased a calculator after declaring my Finance major as an undergraduate. The calculator recommended at the time was the HP-10B. I realize now that an important reason for choosing the HP-10b over the HP-12c is because it uses the familiar infix notation. My professor probably thought it was hard enough teaching the time value of money, and there was no reason to dive into Reverse Polish Notation (RPN), also known as post-fix notation. Despite the shoddy build quality, I still have mine sitting on my desk at work.
I recently ordered an HP-12c off of eBay, and I ended up paying 35 dollars without the manual. Brand new, the HP-12c sells for approximately $60 on Amazon. I never thought that the resale value for a physical calculator would be so high. As you can see, the preferred calculator for business is the HP-12c. There’s even an iPhone app that emulates the function and look of the 12c.
One thing about the 12c though is that the RPN is difficult to get used to, and it isn’t just the keyboard orientation. I find myself double-checking my math on a regular basis to make sure I did not key something in incorrectly. I assume that once I get used to it I will not want to do calculations any other way.
