Monthly Archives: June 2017

A crisis is also an opportunity for change

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Pre Christmas gloom following Osborne’s scary Autumn statement has settled like a cloak of depression over the whole country.  A wasted decade of zero or less GDP growth, unemployed youth and 50 year olds thrown onto a scrap heap that is becoming cruelly indifferent to their plight. Business cut backs and loss of confidence creating a self fulfilling prophecy of decline.

There is no doubt that we live in dangerous times. The economic upheaval that started in 2008 with a bank liquidity crisis and has been transformed by the bailout then, into a sovereign debt crisis today, represents a major challenge to Capitalism as it has been played.

So where are the grounds for optimism?

“If  its not broke, don’t fix it”
– well now it is  broke, so we had better do something!

As a small business we know that our opportunities come when the tectonic plates of the existing established order start to shift.  That is the moment when businesses and institutions are prepared to contemplate the idea that unfamiliar ways of doing things, may be risky, but are better than the alternative.

We live in a time of unprecedented technical innovation and each one has the potential to create opportunities to re-invent business processes. Moore’s Law which described the speed at which computing power would double every 18 months and halve in price, is only one of the many defining events (programming, DNA, genomics, neural science and many others which are showing even faster rates of exponential growth) that will certainly transform our world over the next 50 to 100 years.

To take a step back:-

    • The genus Homo arose about 2,500,000 years ago
    • I took a couple of million years to for Homo sapiens to evolve, about 500,000 years ago
    • We had reached the Bronze age about 3,000 years ago.
    • The industrial revolution and the birth of  our modern age is about 300 years old.
    • The age of modern computing and communication started about 50 years ago and I only have to think back to the world of my youth to see the impact that has already had and will continue to create on the way we live our lives.

If we can be flexible, imaginative and focussed, there is no end to the opportunities and the excitement that the very near future holds.

Data Feed opens new markets for INEA

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INEA presented a new data feed that enables estate agents to add high levels of functionality to their websites at very low cost.

The Independent Network of Estate Agents yesterday launched an XML data feed that supplies a WordPress plug in with all the details of the properties the agent has registered with INEA (ie both their own and any shares). For the first time this means that an Agent’s website can easily be kept up to date with the ‘current’ details of any commissions available.

Managing data feeds between websites is a great way of keeping data current.

Confidence is good for the individual and bad for the organisation

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We all look to experts in order to help us navigate round an increasingly complex world.  The difficulty is in working out who to trust?  Is it the person who shows plenty of self confidence and never admits either being wrong, or not knowing? Or the quiet self deprecating person in the corner?

On the whole we tend to look to those alpha beings who are prepared to take a stand and trust them to make at least some of our decisions for us.  Unfortunately there is now plenty of evidence that their self-confidence is often misplaced. (Click here for details). Autopsies have shown that even doctors who declare themselves total confident in their diagnosis of patients when they were alive , were proved to be wrong 40% of the time.

It seems that Bill Clinton has taken this very much to heart and now has a new Mantra.  Once a day he makes it a rule to say out loud “I didn’t know that” and “I was wrong”! While I don’t doubt that this makes him a better person and it is certainly a interesting  experiment from somebody with his background, the question that I would really like to get answered is whether there is any way he could have been elected as President of the United States with that level of public self doubt? My guess is that he would have been ripped apart by the press, his political enemies and the public at large.

We all claim that we want leaders to say sorry.  But it is up to the great public to enable it to happen.  In the meantime keep this definition in the back of your mind.

Definition of an Expert:   X – an unknown quantity.
Spurt – a drip acting under pressure.

Construction Sector Slows

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The latest quarterly survey by the Office for National Statistics shows a fall of 0.6% since the last quarter and a fall of 1.8% compared with the same quarter last year. (Where the construction industry is defined as: construction and demolition work, civil engineering, new construction work, and repair and maintenance.)

This is a worrying reversal of the slight recovery that we saw immediately after the 2008 banking crisis and reflects the slow down in infrastructure projects and in home starts.

The exceptionally low level of Housing starts (a further fall of 9% from a very low base in March 2011) see details is contributing to the dangerous increase in rental prices that is occurring as a growing population, largely excluded from home ownership by mortgage constraints, now collides with a shortage of supply.

I am optimistic that we will shortly see results from the political pressure to deliver a Keynesian boost to the economy by investment in infrastructure as one of the few acceptable routes for delivering economic growth.

The Greek Financial Crisis – June 2011

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There is at least a chance that we will look back on the next 3 months as the time the world stopped!!!

The country of Greece has a sovereign debt of about $500bn, which is just a bit less than that of Lehman Bank when its bankruptcy plunged the world into a banking crisis that was only averted by the wholesale transfer of bank debt into sovereign debt.

The UK banking system currently has outstanding loans of £6.5tr (yes that is trillions) which is 4 times the size of our GDP. And the banks themselves hold a mere £300bn of equity capital to support those loans. Nobody really has a handle on where those loans are placed and how much any individual bank is exposed in the event of a Greek default.

But what is certain is that when the default happens, if it is not managed far better than past experience gives us cause to hope for, it will lead to another crisis of the banking system as they all refuse to lend to each other as happened in 2008. And this time round the countries will not have the funds to bail out the banks.

There is no doubt that the Greek people have been culpable in that the they have been living far beyond their means for years, and they have been doing it on borrowed money.  But the punishment that is being asked of them is that they pay €100bn of debt repayments (reparations) pa.  This represents 40% of GDP and is plain impossible. This is why a default is considered inevitable.

The weather is not the only thing that is looking stormy this father’s day weekend.

An atheist in a moral universe

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There was a time when the possibility of the earth revolving round the sun was the subject of much debate and, since there was a limited amount of evidence, it was basically a matter of belief and philosophy. Today there is no longer any serious debate, not least because we have actually travelled to the moon and walked around on it.

100 years ago the only way to understand the ‘moral’ laws that govern our social construct, was inductive reasoning; but over the last few years we have made amazing discoveries in genetics (popularised in “the selfish gene”), and how the brain works (read “The tell tale brain”) and a recent book “The braintrust” now argues that morality originates in the biology of the brain. It describes the “neurobiological platform of bonding” that, modified by evolutionary pressures and cultural values, has led to human styles of moral behaviour.

I am not saying that science has all the answers, but I am sure that it will bring new insights to the function of moral codes and explanations of how they can work even without recourse to the authority of a god figure to back them up. As an atheist it is important to understand that our moral code is just as strong and well based as that of any religious person.

Vote yes for AV on the 5th May

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At the last election I was fairly ambivalent as to which party I supported, which is unusual for me.  But I was pretty certain that I did not want the Conservatives to win!

  • I was sure that the Osborne form of sado-masochistic economic policy in which we bow to the rich and famous in the naive belief that what is good for them will also be good for the rest of us, was straight wrong.
  • I was sure that the extreme right wing hiding in the bushes under the Cameron PR veneer of a rehabilitated ‘Conservative brand’, were a real and present danger.
  • In fact almost every  one of their policies from schools to immigration, and from banks to Europe rang alarm bells…

The trouble was that I didn’t know how to vote against the Conservatives in my own constituency because the anti conservative vote was evenly split, and the inevitable then happened.  The Conservatives won with a minority of the vote because the anti-conservative vote was split.  Clearly AV would have solved my dilemma…….. but it becomes even more interesting if you follow through the logic.

Under an AV system all parties would understand that choosing policies that alienate large numbers of voters would not be a successful strategy, so it is very likely that extremists within all parties will loose strength. And I would maintain that anything that strengthens the middle ground of politics against the extremist fringes, is very likely to be good for he country.

Professionals now face automation

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Artificial intelligence has long been the promise of the computer industry’s future, but until recently it has been characterised by a failure to deliver on almost all fronts. But there is now a serious risk to the professional classes that over the next decade their right to power, status and money will be challenged by a competitor that they cannot beat.

The way this is coming about is not as we might have expected. Take  as an example ‘e-discovery’ software.

In 1978 there was a court case in America in which over 6 million documents had to be examined at a cost of $2.2m, much of it being done by a small army of lawyers and paralegals who worked for months at high hourly rates.

In a similar case today ‘e-discovery’ software has analysed 1.5 million documents for just $100,000.  And these intelligent  discovery products go well beyond simple key word searching and are capable of extracting relevant concepts and spotting relationships that would seldom be picked up by their human counter parts.

As computers become better at mimicking human reasoning skills they are increasingly challenging the people in high powered, well paid jobs. It has been estimated by Mike Lynch (founder of Autonomy) that the software enable 1 lawyer to do the job of 500, and to do it at least twice as well.

The government is lending money to students on the basis that they only have to pay it back if they get well paid jobs.  It is not obvious which degree courses are most likely to provide a secure return on these loans!

Win 7 libraries

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There is a quite useful new feature in Window 7 called Libraries.  In essence it is a search service

Lets assume there are customer folders on the network that you go to regularly, you can set up a new Library for ‘Customers’ and then link to the various customer folders that you use most often.

In this example I have just listed 4 customer files.

How to use it

There are a couple of tricky issues in setting this up.

First you need to make sure that the Indexing service on the storage drive is running. Its a tick box on the drive properties.

The next one took a while to work out: if you want to have multiple locations in your library, open the Library and note the link where it says ‘Includes: 3 locations’ , when you click on the link it opens a dialogue box that enable you to add additional links.

Commercial Property Market 2011

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The Bank of England reports that 4 out of 5 loans to property owners and developers are in breach of their loan-to-valuation covenants. A total of £243 billion of commercial property loans exist and hang over the whole market.

The risk is that property valuations have been maintained artificially high in an attempt by everybody to ward off serious re-adjustments.  But is the banks start to become more aggressive in foreclosing, it will precipitate a cycle of valuation falls that will put more companies into breaches of their covenants and force more foreclosures; to everybody’s detriment.

The fact that in the 3 years since the peak of the property boom, indebtedness has only fallen by 3%. 54% of these loan will mature before the end of 2014 and there is no immediate prospect of refinancing becoming available.

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