IMF**k Up

The news that IMF chief Dominique Strauss-Kahn allegedly cannot keep his genitals to himself will come as little surprise to Tristane Banon who had claimed similarly before. But it may come as some relief to Angela Merkel, the German Chancellor who was to have met the old 'Hot Rabbit' over the weekend. At least she can take the padlocks off her bedroom door now. Ms Banon was 22 at the time of her alleged assault and only agreed not to bring charges at the time because her mother was a local politician and asked her not to.

France and the world markets are in shock, it seems. His wife has vowed to stand by him. All this seems weird enough.

But what gets me is that the man in charge of saving countries financially is bombing around the world on First Class flights and staying $3,000 a night rooms at top hotels. This 'suite' he had in New York had a conference room, a marble bathroom and a king-sized bed.

More than anyone, he should be aware of the need to stop spending vast amounts of money on things not needed. But, hey, it's the world of High Finance - mere mortals like us do not understand that in order to do that kind of job you need a vast expense account and access to the top lawyers when you make alleged misdemeanours.

That's why we are down here and they are up there, no doubt.


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What the Future Might Hold

Listening to the radio this morning there was a report coming up that suggested that the gap between rich and poor in the UK might soon reach proportions last seen in Victorian times.

That is just startling considering the standard of living we enjoy at the moment. But it is also true. When see that the average salaries of senior executives vs the average salaries of their workers has now widened to sixfold (it's tenfold in the US), you suddenly realise that we are gearing for issues in the near future.

In the Industrial Revolution comparatively few people controlled the precious resources and manufacturing capability in Britain. In time, the exploitation of the masses by those few caused the rise of the Unions which fought hard to get fair deals for their members. As much as Unions have become bywords for bloody-mindedness and lack of business reality, they served the most vital purpose during those hard times and arguably paved the way for the lifestyles we all enjoy today.

Unions may yet have a say in this approaching issue of rich vs poor but I would suggest that the problem is more to do with the Invisible Earnings sector. The influence if the Financial Sector on the UK GDP we were reminded during the recent crisis was just 9% but the meltdown threatened to bankrupt us all.

So we learnt that measuring the Financial Sector against GDP had nothing to do with how dependent we are on the Sector. Just ask Greece and Ireland. What is clear is that a comparatively small section of our society working in this sector earn on average more each year that the vast majority of the rest of the citizens in Britain will earn in their entire lifetime.

We also learnt that Zero Sum Finance is a myth. Fortunes are made daily across the globe by trading in the debts that we all incur and repay. Each debt has a known profit over its lifetime but somehow that debt can earn even more if it is traded between other parties. And when we run out of money for these people to play with we simply create more out of thin air and euphemistically call it Quantitative Easingbased on Fractional Reserve Banking. The idea that if I have no cash in my pocket, I just touch a little stone and say 'Abracadabra' and I have a further £100 which I never repay to anyone. Yeah?

To the average person this makes no sense. And that's because we are right. The world of Finance is creating profits out of thin air daily. And at some point the frail house of cards will collapse as a whiff of wind of reality wafts by. We got a taste last time around but that was only the prelude.

It is sick to think that some people will earn £billions from Hedge Funds in a single year when a tiny child in Africa needs a cup of clean water just to stave off death.

That idiot Deepak Chopra said that everyone has the opportunity to earn a fortune. In his perfect world scenario he has no reality as the basic credence of Economics says that for every winner there has to be a loser. Over a third of the world population lives in poverty which proves his banal best sellers are as much based on thin air as the Financial Sector. Wait a minute, they might all read his book, find a vast supply of disease-free water and have access to the Rwandan franchise of McDonalds and rise up and become millionaires. Or they might find it more practical to use the pages to clear up the mess dysentery causes.

The winners are just gambling with our future and getting rich beyond all imagination and we are stupid enough to just sit here and let it all happen even when it presents itself in our faces.

Look on the bright side. Out of the incredibly dour and hard times of the Industrial Revolution we got Charles Dickens. That might be all we are left with this time around too.


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New Tablets? Keep Taking the Pills

As you can see from the footnote of this blog entry, I use the iPad. I am one of the growing army of suckers who believed that iPad 2 was better so I bought one of those less than a year after buying the original. The differences are small enough not to matter too much as only the camera and FaceTime make any real difference.

But what I can say is that I was previously an old cynic and believed the iPad and tablets generally were just some kind of fad. When I bought it I was furious as I had to have iTunes on my PC in order to even start it. I described it as an expensive memory stick that night to the Apple Support Engineer I called. The very next day I talked to my colleague in Germany who was ex-Apple and in a short taxi trip to the airport, I had my email set up and had been acclimatised to the simple most useful tool I had used in years.

The iPad is brilliant on the move and I love it for its sheer accessibility, small footprint and the plethora of interesting apps, most of which I have opened once only. But has it replaced my PC on the move? Truthfully, no. For presentations it's good but no good for more than a few people clustered around its small screen. Even the iPad 2 which has HDMI can only link to certain monitors. Pages, the alternative to Word is ok but not brilliant. Keynote for presentations is ok and Numbers, the spreadsheet, is a shadow of Excel in terms of importing and layout.

To my mind, these are comparatively minor issues. Now I carry the iPad everywhere and type straight into the Notes app and then email the minutes of meetings almost immediately rather than write them down and then onto the PC as before.

Photos and music are brilliant, videos excellent and blogging is simple on the move. Linking to WiFi networks is simple and you rarely get involved in the technicalities it's so easy to use.

So you would think that PC vendors coming out with tablets would leverage their skills in order to out-Apple Apple. Not so. Blackberry's new model, the PlayBook, needs to be paired with the Blackberry server for mail when the Apple can set up Microsoft, Google or any other type of mail easily and in seconds. The HP TouchPad will run its WebOS operating system which in inherited from Palm who they bought some time ago. Heaven knows how that will affect their business.

Motorola is launching the Xoom which will be an Android product (Google operating system). For me, Google are close to Apple. I use the HTC Desire Z Smartphone and it's brilliant with tons of good Apps similar to Apple and easy to download and use. The drawback is that the lack of compatibility with other devices.

Asus has one coming too to join Samsung. Both use Windows and here's an issue. Microsoft, who rabidly hate both Apple and Google, have no operating system for tablets. So you have Windows 7 which at least supports touch but it's essentially a PC product. There isn't even enhanced linking to Exchange - it's no worse or better than Apple.

So I sit here browsing mails from all my mail accounts on a single device, the iPad 2, mapping my MS Exchange account, a webmail account and Gmail. I have access to my client's Global Address Book, all my MS Outlook contacts and much more.

Apple are well ahead in the game but the disparate market entries are not going to help Microsoft grab back the ground lost to Apple and Google. Slowly, but surely, Apple and Google are infiltrating Microsoft's stronghold in the corporate market place and are entering via the backdoor.

This reminds me of IBM's miscalculation about decentralised computing. Will the mighty Microsoft fall? Stay tuned?

Stay iTuned.


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Joined up Thinking

Doesn't management jargon drive you nuts?

Sadly, we're all at it. I recently talked to the Council's Planning Department who thanked me for 'reaching out' and 'engaging in dialogue' about a proposal.

What I did was I phoned them and I talked to them. That's it.

The person I spoke to was no more qualified to do the job than me and they seemed good at reading the regulations while hopeless at working out whether my proposed house extension breached any of them. However, what they were good at is giving me a whole load of meaningless guff that neither gave a full negative or a full positive but their use of jargon was meant to create a mystical air of obfuscation to the extent that I might go away thwarted, yet the person had not directly me told me to.

Enter the 'New World of Management Speak'. In this world we can have a meeting between departments and get some 'joined up thinking' or 'unwrite' a plan. We can 'open the kimono' or 'peel the onion' rather than say what we think. We can 'downsize' rather than make redundancies or we can 'put rubber on the road' rather than do something.

It's a world where we can create the illusion that we know what we are doing when in fact we don't. But keep repeating the vacuous phrases and pointing to some slides on the monitor and we can trick even the most wily business people into believing we are experts.

It is widely accredited that the reason IBM spectacularly imploded in the 80's is that the managers focused on avoiding bad news and were rewarded for giving positive messages. The vernacular phrase, 'he gives good slide' became the watchword for a good manager. They basically avoided the facts.

Nowadays, it's all about 'putting lipstick on the pig' perhaps. I find myself falling into the trap which is nauseating but it seems that the phrases are so widely accepted, yet mean little, that it's a wonder if anyone is actually communicating anything of real value anymore.

Coming back to Twitter. Rather than 140 characters forcing us to say something succinctly, the majority of tweets use tiny urls to reference material somewhere in the ether which could be pages long. It's so bad that most tweeters don't even have anything original to say so they just re-tweet or reference something someone else said or another article. Picking your way through the @so and so or has something drives me bananas.

Facts and original thought seem to be the last thing on people's minds. But if it keeps you in a job, who's knocking it?


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Save a fortune on recruitment costs

You want to save on recruitment costs?

Simple. Hire an intern and give them the job description of every new recruit you want to find, give them a Premium LinkedIn account and then get them to contact all those whose profiles match and get them to send in their CVs.

Welcome to the world of high powered, expensive headhunting firms.

Surely that's not what these guys use? LinkedIn?

Oh yes. LinkedIn has is being valued at $billions for a reason. It's the recruiter's paradise. By the same token, anyone who wants to have their profile matched to new positions out there, LinkedIn is the perfect starting point because that's where all the most expensive, seemingly expert headhunters start from - earning fees from 20% upward to 100% of first year remuneration. Sure, they may do some steps afterwards to try to justify their fees, but rest assured their starting point is the same.

For the most part, recruiting firms do little more than what I have described above. Most candidates that get a first interview have rarely met the recruiter who has sent them and at best you may find that a cursory telephone interview has been conducted by the recruiter. Most simply cut and paste the candidate's CV onto headed paper and then seize upon a few points in the CV to justify their reason for sending the candidate along.

Few, if any, will have at that stage checked the candidate's credentials like their education, job tenures and achievements. Going down the line, recruiters usually absolve themselves of any any responsibility for cross checking the information in a CV and certainly they would be unlikely to take up references.

The fact is, beyond sourcing the candidates, little value is added particularly in the modern day Contingent Recruiter for fees up to around 33% of first year salary. And given the source is common to nearly all recruiters, virtually free via LinkedIn, then it is very difficult to understand why firms would pay such incredible amounts of money.

So why not cause a revolution and save yourself some money and hire your own research staff for little money? You would be surprised to find how easy it all is.

Then reinvest the money you save in a few shares of LinkedIn when it goes public, perhaps.


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There ain't no money in Twitter, mate

Twitter in its current form will never turn a sustainable profit. You heard it from me.

Today, Skype is reputed to be under offer from Microsoft for $7-8 billion and you might argue that it's the same situation. But it isn't. Skype can morph and bridge the gap between mid-range business VoIP PABX type solutions and very small businesses who just want cheap, reliable business phone features and tariffs to make themselves global. Somewhere in there lies a large telecoms company with a global footprint already and millions of subscribers. Go figure.

Twitter, however, is a different beast. I would assert that over 98% of the tweets ever tweeted on Twitter (try saying that after a few drinks) are complete, banal dross. Irrelevant to 99% of the users of the Twitter platform. But that's why it is so popular - it's cool, it's freaky and you can do what you want without any cost and be seen to be a complete bore globally.

So imagine if a charge was introduced. As many as 98% of all tweets would disappear as no one would pay just to tell you they had eggs for breakfast. Which means that you would be left only with the worthwhile tweets which may be good but then no one would be on there to listen to them - so the initial value that it is big, cool and freaky has been destroyed. You are left with a talking shop, a coffee house, a club for self-opinionated people to expound amongst themselves. Twitter as we know it would implode.

The danger is that by charging Twitter loses its critical mass of users that make it the cool place to be and without users no one would want to pay creating a downward spiral. We have a precedent here. At the height of Web 1.0, online chatrooms were the rage. Loads of people got online in chatrooms large and small and conversed creating a whole new language and the rise of 'social networks'. Microsoft lead the way in providing free platforms across the world. Then one day they changed it all by taking the rooms private and charging for them. They didn't need the money but they needed the protection as these rooms were fast becoming the grooming grounds of social predators like paedophiles and scammers. The concept of the chatroom almost vanished overnight. The addicts stayed but the fun was gone as the numbers dwindled. Nobody wanted to pay to hear themselves talk to themselves. They got small and niche with little profit opportunity.

Twitter's biggest value is that we might get millions of would-be journalists reporting the news live, in situ as the chap did during the US SEAL raid in Abbottabad. Or people revealing wrongly that Jemima Khan has been cavorting lewdly Jeremy Clarkson - even I saw through that one. That set of tweets alone set the cat amongst the pigeons on 'Super Injunctions' as many would argue the law has little jurisdiction over the internet while the simple practical issue is that while the injunctions may have been violated, Twitter is served from the US and so is immune to UK law. The issues surrounding this may well come back to haunt the internet and Twitter. As much as we want freedom of speech we don't want prejudicial lies propagated.

Indulge me by considering gold. It is shiny and perceived to be precious because it has bulk. It has few real uses beyond the cosmetic yet it is one of the single most sought after commodities in the world even being the base of currencies until recently. It varies in price according to the economy and it has little practical uses. Yet gold is different as you can melt down an ingot, cut it into pieces, redesign it and then sell each piece so that the aggregate of the value of all the little pieces is many multiples the original ingot value. Gold has more value in its constituents than the whole.

Yet investors and financial people treat Twitter like gold. They are convinced the value is in every individual who uses it when the reason people use it is because of its sheer size. Cut Twitter in pieces and the value is diminished.

Is there a middle ground to create a real business case? To create a long term, sustainable and profitable business, Twitter has to change. The change cannot smash the reason why people use or it will implode.

So could Twitter be sold on an airtime-type model? Listening in is for free and then you buy a package which is dependent on the number of tweets you want to do. Because of the sheer volume of users and the their tweets, this may serve two purposes. 1) It monetises serious tweeters and 2) it cuts down the number of banal, useless tweets that serve as the irritating noise that puts many off using it regularly. The chances are that if the charge structure is sensible, you may still maintain a sizeable volume of subscribers and create a growing revenue stream.

The problem for investors is that Twitter may be fool's gold. It looks like it's worth something but the reality is that it isn't. Twitter is free today and it's worth every penny.



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Tax To The Rescue

Today's furore on the Government's proposal to add 1p to National Insurance is caused by a letter signed by 23 top business people in the Daily Telegraph which says that they back Tory plans to scrap the increase.

Ostensibly, they believe it is a 'Tax on Jobs' and that after steering their companies through the recession, now is not the time to compromise corporate recovery by increasing tax burdens. Naturally, the Government says that they have to cut the budget deficit and so how else are they to make inroads as this would raise £19bn toward that goal - and is actually only a fraction of the ever increasing problem.

I think it is more fundamental than this. On the one hand, the Government finally recognises the need to cut the deficit and then argues that it should not cut spending as this jeopardises Britain's economic recovery, so it says it must raise taxes and therefore individuals and business should make the necessary compensation for lack of cuts. So the burden is transferred to business to make the cuts in order to afford the amount needed - the circular argument here is that the payroll bill rises and this threatens jobs which in turn puts an increased burden on the Welfare State if Unemployment rises again.

On the other hand, if Government does not tackle the budget deficit, they have at least realised that Britain risks major issues on the bond market where it is so heavily reliant on raising debt - if our credit rating gets affected by market confidence in our ability to repay then we join Greece and Dubai as being the world economic pariahs and our bonds will become junk.

But the real issue is this, to my mind. The whole economic mess we are in came from appalling hubris and suicidal economic policy over a long period. The Credit Crunch arrived with the recession and banks rolled over like nine pins. Who had to come to the rescue? The taxpayer. We have been used as the crutch for the economy and the banking industry is making the same mistakes all over again at our expense. As we still reel at the magnitude of the problems and gasp in awe at the incredible cost of the bailouts, we are the ones expected to have to pay for more stupidity - the basic mismanagement of the economy as well.

Even successful businesses strive to contain the growth in costs and gain efficiencies at the best of times, let alone the worst. There is no point in spending money if it does not give a tangible return in that vain. And so to Government. The now ingrained belief is that if we stop spending a single penny then the whole economic recovery will implode and we would be plunged back into recession is clouding the need to re-evaluate what is important in terms of spending in Britain. And this is a typical economic dogma from the Government who seem to go to bed each night to read the same pages of the same economics book that got us into the mess we are in.

The stupid voters seem to take it all in. As we foot the bill for all this, the banking idiots who got us into this mess are making bumper 'profits' and are making huge bonuses once again thanks to us resetting the levels of debt they clocked up - we actually created the money for them to earn, it is that simple. It could not have been more stupid. But that's economics for you - it isn't for logical folk like us. We are the ones who sit bemused and just keep paying more of our earnings back into the pot to be wasted all over again.

The point that these business types make, which they do not make loud enough, is that the Government should go find the inefficiencies and save some money first before coming to the supposed limitless trough that is the taxpayers' pockets and goodwill. If this is just the start of it, would it not be nice to know before the Election just how much we are to be fleeced for over the next 6 years to get to the mythical halved deficit?

Because if it goes not come in spending cuts, guess who will be paying.