Life As It Goes By

Yes, we have all heard… The fall of another great American icon. Michael Joseph Jackson, aged 50, passed on the 25th June 2009, as we are moving on to first decade of the millennium and in the thick of the financial “shit” (forgive me on this choice of word). King of Pop is the more formally used words. Yes, he is right there beside the King of Rock despite the other affiliation he might have. The entitlement might have been given for the amazing movements of the legs but I believe there is more to that.

I spent the whole day of the 26th June, listening through the songs of the King from the radio and there is just none that I have not heard of or known of. I cared less on the details of his death. In fact, I am not really bothered by what he had done outside his work life. I just enjoyed the music that he had brought to this world. Always something completely out of my imagination. I am not sure who wrote or compose the songs. I just love the way Michael presents and delivers them.

Thanks, Michael, for dropping a comment to see if I am going to blog about Mr. Jackson. I was thinking about it since yesterday. I felt it was actually senseless to demean or brag. Who am I to judge? I can only say his life is a more colorful than mine. I am not the only one, I believe. I guess his regrets won’t be greater than mine if I were to pass away anytime now. So, I want to be happy for his passing. Whatever wrongs he had done, he had paid for them. I can’t speak for the victims but only for myself.

The only trivial stuff I want to mention would be the rise in sales/downloads from Apple Store or any other online stores, uploads to YouTube and documentaries or “specials” in any media. The usual phenomenon or revenue generating activities from the death of a great artist.

If I may, I would like to ask for a minute of silence. For whenever I hear Michael’s songs, I remember the joy and thrill that he had given to us. In MJ, we remember.

Here we go again. The billion dollar question, are we at the end of the recession? Recently, the markets have got really heated up and all of a sudden, recession no more. The first thought that came to my mind was bankers must be busy cashing out their profits now, having booked a record Q2 earnings for themselves. This could save the whole year. But who really want the bull’s run to end? The DJIA has risen from 6,440 to 8,799, a whopping 2359 or 36.6% jump! Everyone who I know is in the market for the past few months is putting up an all-smile face right now. Making money in this worst expected recession makes one feel like god.

I could only explain that this must be the great work done by the Obama administration. The government injection had brought forth an enormous impact on the economy. There is a saying that the performance stock market is an indicator for the economy. It seems like the measures have worked tremendously well, just like the right antidote to the subprime poison. How could they not work? Based on Keynes’ teachings, government spending (like an invisible hand) has a multiplier effect. By pumping few hundred billions of dollars, you would expect trillion of dollars in return. The difference is that these funds are currently spent on a handful of financial institutions. Of course, these funds could be used to invest in the markets. Where else can one find with better returns. There got to be someone out there who might have tightened their belts but with lots of money to spare. Not to forget, there are other government monies around as well. In some of the Asian stock markets such as Hang Seng and KOSPI, things are almost the same as in 2007.

These signals give hopes of recovery and raise overall confidence at the same time. This is natural because if you are not going down, then you must be going up (just like how high and low tides work). The only concern is, will the prices for goods i.e. inflation then go up too? This is what the worried economists warned about: the W recovery. If this is according to what the economists expected, then we would be reaching the end of the first “V” of the “W”. We should prepare for the dive. That would be the case if you are one of the believers.

The thing is economic indicators (there are more than 50 or even 100s of them) are not always forward-looking. It’s true that the reason we use indicators is that history repeats itself and hence, by detecting the trends similar to the past, we shall be able to predict what is to come. However, this is also a self-fulfilling prophecy. Just like in a casino, you can see people scribbling the results of each bet on a piece of paper, hoping to find a winning pattern, whereby the odds (or probability of winning) for each game is the same. Indicators such Consumer Confidence Index have their own limitations. I mean, what does really the index tell us? I feel that the economy is picking up but I am preparing for the worst. So, am I confident or not? It is really subjective and of course, one can overcome this by selecting a large sample size (but then you face the problem of getting focus groups). Well, a wise way to go to get a collection of indicators and try to paint an overall picture. Even so, these telling signs should give an idea of what is going on. You still have to make your own judgment.

As for what I think of current situation, I feel that a turning point might be coming soon (in next 1 or 2 quarters) though the likelihood of going up is equally there. I am more for a “W” kind of recovery, if not “V” + “U”. I believe the government policies are effective and for a certain period of time, stabilization should be sustainable. After that, the reactions to these policies should come. Either the economic growth drives the prices up or the short-term effects of resource re-allocation has lost or expended over time. Interest rates might go up depending on how governments want to act. Those affected by the previous recession will then feel the stress and may shrink their outputs again (however, this is also a simple line of thought as government should also be available for these businesses). When the prices pick up the momentum, I feel the same would apply to the housing sector. Recent gains in stock markets should bring greater long term benefits if they are transferred to housing markets (where there are great bargains). This would help to raise prices further. The need for raw building materials might not be that great as new housing doesn’t look convincingly cheaper than the existing ones.

Raw materials might be used for the infrastructure building programs and if they are imported, it would help the Baltic Dry Index. As for finished product exports or imports, the currency plays an important part.

Thus, if things are looking good, why would I still think that there will a dive in the market after this? My instincts just tell me that things are not really the way the indicators are telling (i.e. I stress again earlier). Just like a person who went on dieting and had some results on slimming down. You can’t really expect the guy to get fat again immediately by stuffing him all the food. It takes time. Now, it’s like the body has adjusted to lower volume of food and it may fail to function well if there is a surge in the intake. It’s just the organic part of the policy implementation.

The economy has contracted much in this 1 year and it seems like, in the modern trends, things will come and go in quick succession. Imagine the current DJIA, who will think of it reaching this point a few months ago. The momentum may keep going till the nature takes its course. The artificial demand created by the government stimuli shall be met by the actual supply. And when this demand vanishes, the supply needs to be shifted to the right equilibrium again.

I hope the economy will continue to grow but I would love to see it going through another round of correction. It will be better for those wounded in this round. Otherwise, there will be no mercy for them. Bigger gaps will be created and faster pace will be set from here. It’s still pretty much in God’s hands, I reckon.

This is definitely an eventful year for all around the globe.

North Korea is on the headlines nowadays for its provocative actions. Its nuclear weapon and missile tests have disrupted the peace in the region. As a result, sanctions have been imposed and its response is equally tough.

The question why or what have caused the North Koreans to be disconnected from the rest of the world? It has a population of nearly 23 million, with largest portion from the age of 30-39. Leader, Kim Jong il, is now 68 years old and planning to pass the baton on to one of his sons. This led to speculation that recent provocations are related to the succession of his heir. These tests should be directed at external parties, rather than in-fighting (a show of power). If Kim is to be compared as someone like Hitler, then he must be in great need of time as he has surpassed its nation’s life expectancy of 63.8. And even if by firing nuclear weapons could help to conquer South Korea or maybe the world, then its 23 million people still faces the problem of spreading across the peninsula and beyond. Hence, it is possible that Kim wants talks (or rather negotiation) to continue even when there is a change of leadership. The focus should not be who is the leader but rather who has the nuclear weapons.

However, it is equally debatable to say that timing is a cause. It happens at this moment just because time is ripe. The breakthrough in technology know-how has just taken place and the North Koreans are close to succeed in making their own atomic bombs. The missile tests are probably used as smoke screens. There must be a certain level of confidence existed before such tests were made (as it is difficult to hide the execution of such tests). What’s more is that it was only not too long ago that the 6 parties talks were making some progress. So why would North Korea make worse of the situation? But if the talks were used to just buy more time, then it would probably make sense.

So, is the nuclear weapon solely for negotiation purposes? Or is it a tool to repay those who have done wrong to North Korea. Perhaps the discovery of uranium had given the North a lifeline and a twist of luck. It can now not only defend itself but also expand. The only thing that makes me curious is just by how much expansion will this weaponry breakthrough bring about. Neighboured by 2 countries with more nukes than itself, North Korea can only limit its targets to the south and east. Though there are no similar weapons in these regions, the regions received extra protection from the US. If the target is US, then it would be even tougher as a safe interception could be made somewhere in the middle of the Pacific ocean. Remaining risks are perhaps the mishandling or misfiring of the bombs, killing its own people. Exports of the weapons could provide a good source of revenue but then it would put it into direction competition with Russia. Unless the North really wants to take its chance with the South, there is really little use of such weapons. Even though it can make 8-9 nukes, it could most likely fire 1-2 before it itself is struck by the same kind of weapon.

Going to the negotiation table with a threatening attitude seldom works. If there is a sure-win party, then there is really no need for any talks. There has to be an exchange that keeps everyone happy. There got to be quite amount of give-and-take. Negotiation does take a long time but if it can everyone happy for a long, long time ,then I don’t see why, not?

I find it hard to accept when I saw people in the TV, holding up boards stating it’s the death of capitalism.

Merriam-Webster explains capitalism as an economic system characterized by private or corporate ownership of capital goods and … An economic system is a system that he production, distribution and consumption of goods and services between the entities in a particular society. It is the method used by society to produce and distribute goods and services (Source: Wikipedia). It is also a part of the social system.

Hence, we can treat capitalism (market economy) as something on the same level as communism and socialism (both are of planned economy). Perhaps democratic should be used in place of capitalism to reflect the relationship among the three. Yes, one can link capitalism with freedom together. The lack of regulation provides the freedom to the economy and the opposite applies too.

What we see today in the States is the abundance of regulation. Necessity is the reason brought forward for it. I believe President Obama would opt to be more democratic if he’s given the choice. Given the state of things that he was put in charge of early this year, I would say without hesitation that a good job has been done so far. Amazingly, an expected, great depression has been averted. What’s more, the tide seems to be moving to the opposite direction, giving a sense of hope for economic recovery.

I still remember him saying something about change. Wasn’t really prepared for such a huge one. Will lives be changed permanently? I think so. Even though it’s remarkable to see how the US government manage to salvage such a financial & economic crisis, one has to be even more impressed to see how they live on with trillion dollars of debts. And only the United States of America has the ability to do so. The Russians had defaulted before and they are not the only ones. A similar “technical” reset for US may be healthy for the long term.

However, the US dollar carries too much burden. A slight sneeze shakes the world markets. The world needs some “used to” for a cheaper Dollar. Once it is ready, it would look for options. Debasing the US currency will not only lighten the loads for US but also holds the value of the goods and services.

Second reason why a reset would not happen is probably the loss of pride as a leader and the priviledges that come with it. Never before has the pride been at such low levels before. The world is already pointing the finger at the US for what has happened. The lost trusts will take a longer time to recover now. Ties have to be mended and more assurance has to be given.

This is probably why the need for so much regulation. The US administration has to deal with too many issues at 1 go: turning the wrongs to rights, setting barriers to future mistakes and finding ways to the tunnels of light. And all these in a short period of 4 years before the next in line takes over. By the way, sympathy is scarce nowadays. People are running out of patience for what the government can do for them.

One delightful result, out of the half year’s of efforts, perhaps is the level of confidence in the Americans. They begin to believe the worst is over. The government stimulus did play a big part in filling up the holes, making it looked like nothing has happened before. Keeping the jobs has helped tremendously. With pays coming each month, people has the prospensity to spend or even save in times like this. This is the most important.

The anger level has subsided much as well. They are more ready to move on the next level of anger management: to face with their problems bravely. It’s true that those b***tards in the financial sector created all these. Let this be a big-time lesson on greed itself.

Coming back to capitalism, it’s no way walking near its grave. It is the de facto system for economies around the world, especially with the collapse of the communist systems. It only comes to show again that the old, wise concepts of Keynesian economy prove to be economic crisis resilient. Controlling the money supply in a “free” manner doesn’t provide much help. In fact, pegging the currency against other major ones (via swaps) gives more stability.

So, the golden rule is: in time of boom, use “Reaganomics” and in time of crisis, use Keynesian economics. Regulation has to be in place to ensure that things don’t go out of bounds. If not, it would be what is happening now. But then again, the Americans have a funny way of doing things. It seems like they prefer to go in bigger circles each time (From Glass-Steagall Act to Gramm-Leach-Bliley Act). This definitely qualifies for a big part of our lives.

Searching for the right tool to “search” what you want from the Internet? You might think that search was already over long time ago. Sorry that I have gotten you all confused over this busines of searching. You can’t blame me really. Blame those search engines.

Yes, it’s a new search engine online and yes, it’s from a familiar name. Welcome, Bing.com from Microsoft! Other than visual appeal, it’s a bit tough to tell the difference from Google.com. I did a test by entering the same text on both websites. Great, the results are different. Different algorithm must be in use. The question is, why another?

From the business point of view (purely Microsoft’s), it makes sense to have what everyone is having. With Microsoft’s marketing muscle, it won’t find it difficult to create some revenue from online advertising from this portal (oh yes, the magic word that we used to relate it with Yahoo or AOL, just like search with Yahoo, Excite and Lycos etc). Not ony that, it also helps to weaken Google command on the price. It’s direct retaliation from Microsoft after Google crossed the boundaries by creating its own web browser and operating systems (so far limited to handheld devices). Well, that’s not all to it. It also represents an attack on the sinking Yahoo and whatever there remains.

Of course, it won’t be straightforward victory. The portals are built around communities or loyal customers. They won’t be gone in a day or even a few years. As Microsoft should already know, search engines are now more than just what they do. They themselves are a brand. Customers remember the logo and vaguely what the search engine actually excels in. As Google pampers its users with more freebies and convenience, its users stay closer with it. This is why Yahoo is still a force these days. It’s really about value creation. At the end of the day, I ,as a user, don’t truly bother who gives me a better search result. So long as I can find what I am looking for. I am a satisfied customer and a repeated one too.

In a market where brands are important, one should focus on differentiation. Yes, Google is unique indeed. Now that it’s a big boy. It can perform and create challenges that a few can match. So, it’s essential for each to target a specific market segment. Wikipedia.org is a good example. It helps to search for specific term or words too. It is more just than a list of results. It’s educational and encourages more collaboration and sharing from the larger group out there. Another example is wolframalpha.com (don’t ask me what it means). Try typing names of 3 companies (max is 4) of the same industry and voila! You can see an executive summary of current prices, fundamentals, price history and performance etc. You can even download the report in pdf (but limited information). Though it’s not as comprehensive as Google, it stands out for what it does best. It’s still in its infancy and I expect more from this tool.

To sum it up, the Internet works much like the TV or media. Whatever tool or program that receives the most airtime from its users or viewers will always command a better price for the advertisements. It’s also unlikely that all viewers will switch channel at one time. There might be trends that they follow. So, it’s back to the same, old theory of “the best wins it all”. Even so, there will still be viewers for news program or sports, discovery, science and on on. The program may forget the mass and still survive (that’s why there are so many magazine titles around the world) these days. Though users like to have choices, they would stick to what they like most. As such, it doesn’t matter how many search engines are out there. Unless there is an outstanding one, I would be less likely to change that bookmark or search toolbar of mine.

Today we take a snapshot of another industry moving to mature stage.

Cameras make up a special part of our lives. The photos they produce help to keep our memory space free for other usage. Everyone likes photos. Every photo tells a story that only the owner of the photo knows best. Even when a photo is only black and white, people were still amazed by what the technology offered them. Satisfaction is the key. It doesn’t really matter whether the size of the photo is large or small. It’s the memories that are attached with the photo.

Film camera though not exactly the first camera invented dominates for a couple of decades before giving way to digital camera. It’s the film camera era when the users departed ways. There were the so-called consumer cameras (from instant camera to Polaroid camera) and the professional cameras. Differences were the size of the camera, lens and number of functions/features.

What has changed since (I always like to talk about this to others) is the evolution to “digital” cameras. Another real world story tells how technology advances shape an industry. To be specific, the dimensions of the camera, particularly the thickness, has changed. The storage for the image has changed. Yes, you don’t have to worry about hiding your film in complete darkness and protecting it in dry, vacuum cabinet. You use something called a storage media. What’s more amazing is this media (regardless of which format) allows you to use it on various devices. So, it’s for multi-purpose usage.

Thirdly, you don’t have to squeeze your eye through the viewfinder to see what the camera sees. In fact, you distance yourself away from the camera to have a good look at 2-4″ LCD screen. Finally, what got be an unforgettable experience is the process of taking the photo. You no longer need to wait outside the 1-hour photo express outlets to collect the results of your photoshooting. In less than few seconds (even faster than the polaroid camera), you have an instant feedback. And you don’t have to go back to the same location some other time to get that second chance to take a better one. Or even better, you can snap 5-10 shots to take home to judge later. To top it up, you can even edit those that are slightly off. You just have to love the digital cameras.

And for this love, you pay the price . How many digital cameras, compared to film cameras do you own in your whole life? Let me see, a ratio of 3:1? If it’s more than that, you are probably one of those who are thrilled to hear big number such as “it’s 8 megapixels now…”. Suddenly, everyone, learning from their PC buying experience, values their digital cameras in terms of the number of megapixels (as if it is supposed to be a measurement of speed and accuracy). So the manufacturers gave what everybody wants.

Come to think about it. Are the product specifications really what the manufacturers think about everyday to give them a technological edge? It feels more like what the consumers are looking for. Please enlighten me on the ISO speed of the digital camera. Isn’t that something for films? I am sorry that I am not an expert or even a professional photographer. But it really makes me think hard about the technology behind the digital cameras. As far as I know, as an engineer, it uses a IC chip that takes in data from the sensor (to light, of course). There are two types of sensor: CCD (Charge-coupled Device) and CMOS (or the active pixel sensor). I don’t think the film we used before is made of any of these materials. So what the ISO speed…? To me, it’s simply the speed of the sensor for capturing the image from the light entering the shutter.  I believe the word compatible has to be inserted in such specifications one of these days (which are ending soon by the way).

Other electronics are mainly for processing, storing and displaying the image, as well as additional features for the cameras. Mechanical parts probably give better light and speed controls and more importantly, the aesthetics of the toy.

That’s pretty much what each maker can offer. That’s probably why there are now so many companies making digital cameras. So long as you have the right suppliers for your sensors and lens, the rest shall depends on your manufacturing capabilities.

So it’s sad to see some big camera companies dropping behind the scene. Brands such as Polaroid, Leica, Minolta and Pentax have suddenly vanished from the display shelves. Worse off are the film and related brands such as Konica and AgfaPhoto. The industry landscape has transformed itself almost completely. This, however, doesn’t mean a bad thing for all. New entrants such as Panasonic, Sony and even Casio (& HP) gained previously unthinkable market shares. Companies such as Kodak and Fujifilm are forced to reborn themselves as camera makers. The few legacy (Canon, Nikon and Olyumpus) that remain have its own fates. And indeed, the market for the digital cameras has grown by leaps and bounds these years. The pie is bigger now for everyone.

This is also where the problem lies today. Everyone wants a piece of the pie and they start making phones, laptops, PDAs and so on with cameras (maybe one day Casio will come up with watches and calculators, equipped with camera capabilities. Not sure for whatever reason though).  The rapid commodization has caused cannibalization of the camera market. The leading pack has lost its nose in the chase of higher megapixels (just like Intel). They begin to throw in features like face detection, sorting of photo albums with the use of object recognition and maybe even 3-D images. This brings everyone to wonder the real needs of such features.

Yes, these are signs: signs of saturation, signs of reaching the end or hitting the tope. It’s true that greater innovations are desired at this point of time but don’t forget, everything has its moments, just like the film cameras…