May 27th, 2010
The P90X workout, which is extremely tough but creates results, can be seen as the metaphor for the future of financial fitness.
The workout program, created by Tony Horton, has sold more than two million sets of its DVD series, at $119.85 per set. The selling point is that the workout is really, really hard. Some of the comments from those who do the program include: “When I first started the leg workouts, it made me want to puke in the middle”; “It’s awful. It doesn’t matter how many times you do it, it still makes you cry.” (Miami Herald, 5/18/10)
When will individuals and government leaders determine that in order to correct financial excesses (debt and spending), a painful but effective discipline is necessary? And who will be the Tony Horton of the program? One workout attendee, whose shirt was sopping-wet after the strenuous ordeal, proclaimed; “Tony is the man. Tony is the man”. Who will be “the man” (or woman) of financial fitness?
Charles Hess
Posted in Global Economy, State and Local Governments | No Comments »
May 25th, 2010
Bank of North Dakota (BND), the only 100 percent state-run bank in the U.S., plows about half of its profits into the state budget and takes cues from the governor, who acts as chairman. The bank spins tax revenues into loans for in-state farmers, students and small-business owners. During the recession, BND has propped up more than 100 privately held community banks and has kept credit flowing to small, local businesses. Washington State has recently proposed its own version, and Hawaii has commissioned a report on doing the same. (Newsweek, 5/3/10)
North Dakota has the lowest unemployment rate in the country and one of the largest budget surpluses. In this economic and political environment, could this state-run bank model spread? Will this unique creation be seen as too “socialist” for the mainstream? What would be the impact on national, regional and community banks?
Eric Zavolinsky
Tags: Bank of North Dakota
Posted in Finance, State and Local Governments | No Comments »
May 24th, 2010
Cars: just another electronic device subject to the risk of cyber warfare.
Researchers at UCSD and the University of Washington discovered that certain late-model cars with wireless connectivity can be hacked. The researchers were able to remotely disable the brakes, stop the engine or make other adjustments to cars’ operations. (New York Times, 5/13/10)
Nissan, believing that there will be great value in marketing cars based on the information they can remotely deliver to drivers, is building a “secret” data center from which it will connect to all of its future cars. Is there a potential for such a network to be maliciously attacked? There may be franchise risk not only in the increase of computerized car components but also in their Internet connectivity.
Michael Hines
Tags: Nissan
Posted in Cyber War | No Comments »
May 4th, 2010
Companies have gotten lean during the recession, and in many cases that has led to increased profits. Technology has advanced to the point where mobile applications, real-time online collaboration and video conferencing provide inexpensive alternatives to having workers in an office, and the Internet allows companies to easily access brain power across the globe.
Tom Ringo, the head of IBM Human Capital Management (the consultancy arm of the company), said the firm’s global workforce of 390,000 permanent employees could be reduced to 100,000 by 2017, the date by which IBM is due to complete its HR transformation program. Ringo said the firm would employ “crowd- sourcing” and re-hire workers as contractors for specific projects when necessary, adding, “There would be no building costs, no pensions, and no healthcare costs, making huge savings.” An IBM spokesman later said Ringo’s comments were without merit. (Personnel Today, 4/23/10)
Whether IBM actually makes the transition to a mostly crowd-sourced workforce or not, the fact that it has discussed the possibility is significant. The expectation has been that hiring would increase not long after economic growth, but has this recession taught companies new lessons about the merits of lean staffing and the possibilities of technology? Might we see a significant segment of the U.S. labor force become permanent freelancers, doing work on demand?
Eric Zavolinsky
Tags: Crowd-Sourcing, IBM
Posted in Brain Trade, Business Spending, Global Economy, Internet, Tech, Telecom, Media | No Comments »
April 26th, 2010
Last Wednesday, Russian officials raided Hewlett-Packard’s (HP) Moscow office, as part of charges that HP paid a bribe of about $10.9 million to the Russian office of the prosecutor general to ensure a $47.8 million contract. Last Friday, U.S. Federal prosecutors indicted the former president of U.S. private security firm Blackwater (now called Xe) and four other employees, charging them with bribing Jordanian officials to win a lucrative contract there. Also on Friday, the SEC presented civil fraud charges against U.S. bank Goldman Sachs, accusing the firm of defrauding investors. (Fast Company, 4/15/10; BBC, 4/16/10)
The instances are unrelated, but three allegations in one week suggest that both national and international authorities are cracking down on what they believe to be illegal corporate activity and fraud. Why now, and who’s next?
Eric Zavolinsky
Tags: Goldman Sachs, HP, XE
Posted in Finance, Gaming | No Comments »
April 22nd, 2010
Since 1976 Grameen Bank has provided micro-loans to low-income individuals – mostly women – in its home country of Bangladesh, and the repayment rate for those loans has been substantially higher than traditional loans in that country. Grameen Bank and its founder, Muhammad Yunus, split the 2006 Nobel Peace Prize. Now the institution is offering such loans in the United States, with two branches in New York, one in Omaha and others planned for Washington, D.C. and San Francisco. (US Banker, 4/10)
Grameen America focuses only on borrowers who are below the poverty line, and commercial banks that provide funds to the microlender are granted credits under the Community Reinvestment Act. How curious that a Third World financial institution is finding an attractive market in the U.S.
Ken Hey
Tags: Micro-loans
Posted in Finance, Global Economy | No Comments »
April 7th, 2010
McGraw-Hill Construction data showed that U.S. non-residential building in January 2010 was 21 percent below January 2009. Non-structure construction started this January was another 8 percent behind January 2009. Despite that overall decline, highway construction in 2009 increased 5 percent, supported by stimulus spending. Without the stimulus funds, highway construction spending would have been down 15 percent in 2009. (Engineering News-Record, 3/22/10)
Because of budget constraints, state and local governments are cutting back on road construction. As an example, Colorado Springs, the second-largest city in Colorado, has announced that it will not pay for any street paving, relying instead on a regional authority, which has said it can meet only about 10 percent of the need. In a similar vein, communities in various states (e.g., Maine, Michigan, Indiana, Pennsylvania, Vermont, etc.) have announced plans to convert paved roads back to gravel in order to save on maintenance costs. In hard hit Michigan, 38 counties converted 100 miles of roads since last year because of insufficient funds. If there is not another federal stimulus bill that contributes to state and local highway funds, tire, shock and suspension companies should do quite well, as potholes ravage cars.
Charles Hess
Posted in Infrastructure, State and Local Governments | No Comments »
April 6th, 2010
On March 24, the New England Journal of Medicine revealed that Type-2 diabetes afflicts 92.4 million Chinese adults. More than half of Chinese diabetics have not been formally diagnosed. This total is more than double earlier studies’ calculations, which put the figure closer to 43.2 million Chinese sufferers. India is estimated to have 50.8 million diabetics, according to the International Diabetes Federation. (Boston Globe, 3/26/10)
While Indians are known to have a genetic proclivity for diabetes, the incidence of diabetes in China is a wake-up call. If Type 2 is attributed to a high caloric diet and sedentary lifestyle, one has to question the ultimate extent of diabetes in the world. It could be a lot higher than assumed, and with expectations of healthcare coverage rising in emerging economies, the cost of diabetes treatment could skyrocket.
Charles Hess
Tags: Diabetes, India
Posted in China, Healthcare | 1 Comment »
March 26th, 2010
Over the past decade the number of diabetes cases nationwide has increased by 90 percent, according to the CDC, making it the fastest-growing disease in the U.S.
Oprah Winfrey recently devoted an entire episode of “The Oprah Winfrey Show” to the prevention and treatment of diabetes – and pointed viewers to a nationwide free diabetes-testing campaign underway at Walgreens. During the first day after the show aired, more than 80,000 people visited Walgreens for testing. Approximately the same number of people were tested over the entire month of November when the pharmacy ran its previous free diabetes testing event. That time the pharmacy had NOT partnered with a TV show. (Drug Store News, 3/1/10)
Considering Oprah’s public entrance into U.S. politics during President Obama’s run for the White House, could the administration harness her marketing power and direct the infamous “Oprah Effect” at the nation’s rising healthcare costs?
Risa Hess
Tags: Diabetes, Oprah Winfrey, Walgreens
Posted in Healthcare | No Comments »
March 26th, 2010
Many companies are facing the double whammy of increased competition from counterfeits at the same time they are struggling with reduced sale stemming from the Consumer and Business Resets.
In 2008, the value of counterfeit goods seized at America’s borders increased by nearly 40 percent over the year before. It fell 4 percent last year — far less than the 25 percent decline in imports overall. The number of counterfeit parts in military electronics systems more than doubled between 2005 and 2008. (Economist, 3/6/10)
Service companies that monitor and track counterfeit goods are benefiting from the proliferation of fakes. Meanwhile, the U.S. Government, which is losing out on tax revenue at a time that it needs all the revenues it can get, appointed its first Intellectual Property Czar last year and is developing a new enforcement strategy.
Eric Zavolinsky
Tags: Counterfeits
Posted in World War III | No Comments »
