Monday, January 28, 2013

Listening to a nagging gut feeling

We all know the feeling where you hear/see someone convey something, and you know that deep down what you're being informed of doesn't sit well with you.  This feeling happened the other week when CityNews was putting out hyperbole about the Costa Concordia accident being like a "Modern Day Titanic". 

The communication in question is this:



Now, I'm not going to talk about why crashing into land in the Med and having a 0.75% fatality rate is (in my mind) nowhere close to the Titanic disaster, as I've already covered that.  

What I am going to say though is the statement "It's only due to modern tech that so many survived" is what didn't sit well with me.  

I'm no naval architect, granted, but has anyone taken a look at a modern cruise liner?  

First up, everyone should understand the principles of "centre of gravity".  If you understand that, can you explain where below the waterline (and how big) the centre of gravity is in this?


Assuming this is 15-20 stories high, ask anyone to estimate how deep the foundations would be on a building with that many floors to stop it blowing over in the wind.  Now look again at that photo.

Secondly, given how top heavy this looks, try to estimate how stable that would be if it hit land like the Costa Concordia did? Blowing over an upright pencil comes to my mind.

The third and final problem that comes to mind is this:  Modern cruise ships are electronically monitored and operated.  Where's the electrical generators in a ship like this?  They're in the hull below what waterline there is, so likely this is the first thing to fail when a ship runs aground.

EDIT:  I just discovered that this third point is precisely what happened to the Costa Concordia when water flooded it's generators, meaning it lost all ability to manoeuvre itself.   

To me, the original statement above would appear counter-intuitive.  Someone needs to prove to me that we're building ships that are hotels, instead of designing a hotel and what looks like "wrapping a ship around it", because to me, the "modern tech" appears less safe than old tech.

Friday, January 25, 2013

Social Media And The Chain Of Command


In any organization, there's an element of accountability and responsibility.  If things go wrong or decisions need to be made, there's invariably a chief or boss that is able to say "the buck stops here" after you (as a customer, or member of the public that might become a customer) ask a question or have a complaint.  

For reasons I will lay out here, this doesn't always translate into Social Media.  Social Media strategies often get pigeon-holed into something other than "engaging with customers and potential customers".  From a corporate standpoint, a SM strategy sits straddling the boundaries between customer support, advertising and sales.  

The mistake that is often made is rather than straddle this line, it's parcelled off to third parties who know how to do one thing only.  

We see "advertising", where you end up with an ad agency running a Facebook page for brand awareness on behalf of the brand that's visible to the consumer.  This means that should anyone have an issue with the product, there's no hierarchy of responsibility on the part of the advertising agency to escalate the customer issue to the chief that might be able to resolve it.  This invariably leads to disappointment, and in some cases the whole social media strategy inverts on itself and becomes a farce that has to be taken down quickly as a measure of damage control.

We see "sales" in situations where social media accounts run by sales lead generation companies, and these people don't have customer support ties either.  What can happen here is often tantamount to the situation we see with advertising.

With "support", we often see third parties brought in to clear customer enquiries, but they have no tie-in to the sales side.  This leads to situations that I normally call an "Order Prevention Desk", because as a customer you find you literally cannot give them your money.

The only way social media can work from a corporate or government standpoint is to put in a social media advocate that can receive escalated issues that arrive via Twitter or Facebook, and then direct them up the traditional hierarchy to the same people that would have been responsible for the same enquiry had someone approached them using traditional methods.

What has been proven is that abandoning this chain of command generally leads to disappointment.  

Tuesday, January 22, 2013

Why the Costa Concordia was not even close to the Titanic



Ask anyone about the Titanic disaster 20 years ago and they'd rattle off a few key facts such as a ship crossing the Atlantic on it's maiden voyage hit an iceberg, sank out in the middle of the ocean and loads of people died.

Using some exact figures, we can paint the following situation:
  • Over 1500 people died - over half of the 2224 on board.
  • The water temperature was -2C.
  • The life expectancy of people in the water at that temperature is 15 minutes.
  • The ship was 400 miles from land.
  • The nearest rescuers (The Carpathia ship) was 58 miles away at the time of the distress call.
  • It took 160 minutes from hitting the iceberg to being totally sunk.
Pretty grim, right?

So this morning I spotted something rather jarring in my twitter stream, namely this tweet.

Let's look at the Costa Concordia disaster for a second:
If I were to guess, a hundred years from now this accident will have been consigned to a sentence in history like "The Costa Concordia was a cruise ship that hit land in the mediterranean, never fully sank and less than 1% of the people on board died".  

Comparing the Costa Concordia accident to the Titanic disaster is bordering on vulgar, especially when we've seen bigger incidents in recent decades like the Doña Paz (over 4000 dead), the Estonia (850+ dead), the Princess of the Stars (690 dead), the Rabaul Queen (321 dead), and so the list goes on, where the news is far more important from a humanity standpoint.  Even the Indian Ferry disaster of 2012 had over 100 people dead, but we don't hear about these being compared to the Titanic disaster.

If you understand the point I'm trying to get across, this final set of clips taken from Entertainment Tonight should be the icing on this cake.

Sunday, January 20, 2013

Klout Scores

Klout scores are a divisive subject; On the one hand, you have people who swear by them. On the other hand you have people who swear at them.  Some people will instantly point you to reams of research articles on why you shouldn't believe in the system, or why it's flawed, and then others will equally tell you about how they were vetted for employment according to their score.  

Personally, I sit on this one like I do a number of other subjects: If a lot of people believe in it, and if not participating could hurt future chances for successes, then I'll likely get with the system.  In other words, if enough people believe in it, then the score (regardless of the reasons against it) becomes real by default as it will affect my life if I don't have one.

Having gotten a Klout score, I keep a close eye on mine.  It's not so much that I fret much about where it is at, but more a curiosity of mine to reconcile what I've done and how that's affected my score... Cause and Effect, if you will.

Whilst I've never had the inclination this far to include or exclude someone based on their score, I do like to hear what other people think about this subject.  Being able to listen to their responses will normally tell you everything you need to know about their reasoning skills, and that's probably just as important as what their social media reach is.

Friday, January 18, 2013

Consistency in Social Media


Today I saw a tweet from someone that portrays himself as "technologically with it" and street-smart that ran as follows: 

"How will industries (that produce digital content) make money when people generally want free content?"

This was then subsequently left with no answer…  no conclusion…  no "I'll stick my neck out and offer my opinion" follow-up.  

Putting aside all the immediate things that ran through my head like "Has he not heard of subsidies from advertising?", freemium models to hook people into paying, or "does he not realise that this has been a topic for years that sometimes is successfully concluded and other times not?", I ended up questioning whether a tweet like that from someone who, unlike myself, runs a generally serious-toned twitter stream would have a negative impact on the online perception of such a person.

In my mind, there's (about) four types of twitter account:
1.  The authoritarian ones (Governments, Organisations, Health & Safety, etc).
2.  The commercial ones (companies, online media, etc).
Then there's the "sometimes-blended/sometimes-distinct" accounts: 
3.  The entertainment ones (personal entertainment, jokes, celebrities, etc).
4.  The personal ones (what I had for dinner, my take on current events, picture of my dog, etc)

Whilst I usually consider myself a cross of account types 3 & 4, this other acct was clearly type 2.  As such, you can probably see from the hierarchy that I almost should expect information to trickle out of that twitter account in an informative manner.

But it didn't.  Several hours later, it still hasn't produced any informative narrative, answers or conclusion.

To me, this is a consistency issue that can only be described as the reverse problem of when the Canadian Prime Minister started tweeting to Homer Simpson about bacon recently.  It's almost jarring because you as a subscriber to that twitter stream have an expectation.

Conclusion:  I think it's lost on some people that a social media account that is supposed to be informative shouldn't cross (unless there's really good reason) into an uninformative account type, just like in the same way an authoritarian account should not suddenly become a comedy one.  People have expectations in social media that whatever bar you set when they subscribed is what you will maintain going forward.  After all, if you're attracting followers by doing one thing, why then alienate them by doing something else?  

You wouldn't do it anywhere else, so you shouldn't do it in social media.

Wednesday, January 16, 2013

Engagement, or something else?


Social media is something that many people still don't understand.  This is especially true of the larger media companies where they often see social media as just an extension of the broadcast model.  Whilst their management understands that a lot of people are "on it", they don't understand the "social" point of it.

It all comes down to one word: engagement.

Engagement is a word that is regularly abused.  I know one office where the top management got "Engagement" and "Compliance" confused, leading to an "engagement strategy" to boost staff productivity that caused a "1984" style big brother screen to be mounted on the wall that "motivates" employees into having to work harder, and failure to meet goals and such is met with penalties.  As you can guess, engagement of that nature has led to unhappy workers and a high staff turnover.  

Social media engagement works in the same way:  If you want to build a successful social media presence for your brand with a loyal following, then social media is where you want to be, but ask yourself whether you are truly engaging with your followers, or doing something else entirely different?

Tuesday, January 15, 2013

Opinions...


One of the biggest irritations in my life is the scenario where someone asks me for my opinion on some matter, and when I'm in the process of giving it to them, they realise it differs from their opinion so they turn it into an argument where their opinion suddenly becomes an axiom in their world, and I'm a heretic of sorts.

Opinions are an interesting thing:  If you can have your opinion changed, does that mean you're weak minded, or does it mean you're adaptable to change in an ever changing world?  I think the latter.  If you can listen to new information and absorb it, you will then incorporate it into your opinion forming process.  As a result, you grow intellectually and that's a good thing. 

People who are unwilling to listen to other people's opinions normally stagnate.  This stagnation them leads to less people wanting to engage with them which then leads to a cycle where they're not being engaged and so they become even more set in their ways of thinking.

Conclusion:  Differing opinions are not necessarily wrong, but a reflection on the people who formed them.  If you're not willing to listen and reason, but choose instead to remain steadfast that you're always right, what does that say about yourself and your attidude?

Monday, January 14, 2013

Ontario and Beer... A sad affair...


Those who visit me in Toronto from time to time from faraway places often get a bit perplexed by the beer scene around here.  In short, here's the condensed version of affairs:

* In the 1920's Ontario was in the grips of prohibition, and this ended with the creation of a place in 1927 where you can buy beer - this is now called "The Beer Store".
* The Beer Store isn't really Canadian owned, but it's a monopoly here just the same - it's owned by a smattering of USA/Belgian/Japanese big name breweries and they love to sell their own beers through it.
* If you're wondering where wines and spirits are sold, this is the "LCBO" (Liquor Control Board of Ontario) - they're "the competition"… they're also the Government and beer sales is a really small percentage of their sales... so they're not actually "true" competition.

Now, here's where the bad situation gets worse:
The Beer Store, as you would guess being owned by foreign brewery conglomerates, has limitless supply of the carbonated junk beers put out by the big names, so where do the foreign beers come from?  The LCBO purchases the foreign beers and then resells these to The Beer Store.  

The Beer Store has a listing fee for smaller breweries that it regularly spins thus:  We want smaller brewers to gain a foothold in our stores.  If you are a small brewery, you get a discount in the listing fee.  If you're really small, you get even more discounts.

This policy can be rephrased as such:  "We will stock you if you're insignificant, but the minute you make a dent on any of our own brand sales, we'll hike the fees accordingly".

As you can guess, a monopoly like this has brought about two things:
1. A lack of choice.
2. Sustained high prices.

In The Beer Store's 2008 Operational report, they stated "between 2004 and 2008, the consumer price for beer actually fell in Ontario between these years from $3.60 per hectoliter to $3.57 per hectoliter" like this was a big deal.

Let's examine that statement for a second:
One hectolitre is approximately 211 pints… and we've saved a whopping 3 cents on that amount?  That's 0.0001 cents per pint.  You would have to drink 70 pints of beer to see a single cent.

As you can see, when you pull back the layers of this onion, it's not a pretty picture - but that's what monopolies are all about.   

So what of craft beers?  Surely they do well in a monopoly that bulk sells carbonated junk?  For that, I leave you with this.

Friday, January 11, 2013

Order Prevention Desks


Most people know me for my work on iPhone apps, but this is only a recent event as the iPhone has only been out for 5.5 years and in Canada we've only had it for 4.5 years.  Before this, I'd racked up about 15 years of Windows programming, covering Windows Mobile, Windows CE, desktop versions back to Windows 3.1, and the odd period of Blackberry programming thrown in (but let's not go there).  I still do Microsoft programming when the need arises.

The bulk of my time has squarely been spent in the Microsoft camp, and not the Apple camp that I'm currently more known for.  As well as being a programmer, I'm also a technology consumer.  I carry both an iPad and a Surface RT.  I like both of them for different reasons.  At home, I use both Windows 8 and Mac OS X.  I see both the bigger picture and the smallest detail with both the companies and their products.

In short, I like to think I'm fairly qualified when I criticise something from either Apple or Microsoft.

This week I had to come up with a sports health prototype that involved using a Microsoft Kinect Sensor for Windows.  I thought that this shouldn't be a big deal, but was also acutely aware that anything involving hardware in Canada can easily become a thorny issue.

For the uninitiated, here's how obtaining hardware in Canada often turns out:  
1. First you locate a part number, then you find it's not sold in Canada - but some guy in Ohio or California has the thing you want at a decent price, and they ship worldwide using a service like UPS or Fedex. 
2. After several days you get a ransom note from a brokerage firm that you've never heard of near the Canada/US border that wants you to stump up some import fee, plus an exorbitant "handling or administration fee".  So for example, your $100 widget purchase now has $10 in duty and a $80 fee for administering this.  Without you paying this fee, they won't release the thing you've ordered.
3. At that point, you swear at them and tell them to keep the item, you cancel the order and re-place a new order.
4. After several more days you get a ransom note from a second brokerage firm that you've never heard of near the Canada/US border that wants you to stump up some import fee, plus a less exorbitant "handling or administration fee".  So for example, your $100 widget purchase now has $10 in duty and a $20 fee for administering this. 
5.  You pay the lesser fee and the goods being held hostage are now released back to UPS who deliver to your door.

These "middlemen" run a racket that serves no purpose whatsoever for the consumer.  This is why you normally try to source stuff already in the country.

So back to the Kinect Sensor...

As luck would have it, Microsoft has a new store in Toronto at the Yorkdale Shopping Mall, so I should be able to just pop up to the store pay for a sensor and walk out with it and have it plugged into a development PC in an hour or so, right?  Before going to the store, I thought I'd phone just to make sure they have the part. 

The experience ran like this:
1.  The employee didn't know if they had the item in stock.  This is fair enough.  Not everyone knows the stock levels of everything they sell - this is why they have stock systems they can look these things up in.
2.  I was on hold nearly 15 minutes listening to excuses like their "system is running slow today" which doesn't sound good from a company known for making software, before they eventually knew that they didn't have the part and relayed this to me.
3.  I was then told that I could order the part over the phone for delivery (not to the store), but this required a Live account.

What?

I asked if I could just have the part ordered to the store and then I send someone up to pick it up who has the authorisation to pay for this part (I'm just the programmer in this).  The answer was no.

My immediate reaction was "Why would a Microsoft shop come up with blockers as to why they cannot sell you Microsoft's own hardware?".  This store has by definition an "Order Prevention Desk". 

Needless to say, I let them know this on @microsoftstore on twitter, before the part was then eventually sourced from Amazon.ca.

Wednesday, January 9, 2013

Hand Me Down Technology At CES

In case you missed it, currently CES is on in Las Vegas.  

I usually have more than a casual interest in what gets unveiled down there, because often these new things become a part of our lives for years to come.  This year, however, something else caught my eye. Namely, this type of story.

People who know me well, know that I love Japan, especially it's tech.  I can walk into Yodobashi in Umeda, Osaka, and not come out for days as I comb over each item and work out why we either don't have the items they sell there, or our items miss certain features over here in North America.  

Once you've noticed these differences, you can't help but think you're being short-changed in North America because the ignorance of the facts by the every day person allows these corporations to farm out lesser-featured equipment for the same price.

Take Sony TV's, for instance, and how they work with NFC.  In Japan, NFC is everywhere from transit passes such as SUICA, or PASMO, to mobile phones, Sony VIAO computers and TVs.  It is a technology there that is known as Felica (a shortened version of "Felicity Card").

With Japanese Sony TV's, if you want to rent a movie on your TV then no problem; You wave your Felica remote over your pocket containing a card and the money is transacted.  This is the way it's been for years.  Here's Sony's full PDF on the matter and it details where else it's used.

Knowing this, you can't help think that either the journalists covering CES being wowed by an NFC enabled TV are either subject to living in a tech bubble, or they don't do their homework to see what kind of "hand me down" technology we're being shown here.






Monday, January 7, 2013

The Age of Discovery Is Not Over


This morning I was reading an old post about the Age of Discovery being over - that we've invented nearly everything we need and know everything about the world that is worth knowing about…  

Let me tell you a little story….

When I was a kid, my Computer Studies teacher made me write a function that could be used instead of the sqrt() programming function, so that provided any starting number, it could return the square root of that number.

Back then, we didn't have the Internet.  I was also relatively bad at maths.  My final code basically did this:

Imagine I was given 100.53 as the number to find the square root of.
1. Start with the number 2.  
2. Square it (2^2 = 4).
3. Is "4" higher or lower than 100.53?
4. It's lower, so try a higher number and do the calculation again.
5. Keep repeating until we're higher than 100.53, then start iterating down in slower increments.
6.  Keep repeating until we're lower than 100.53, then start iterating back up in even smaller increments.
7.  Eventually, with this process, you end up with something that's good enough to about 6 digits that the code returned as the answer.

After handing in my code, the teacher said "Ah, you've basically replicated the Newton Method".  Having never heard of this, he explained that it was very similar in that you revise a guessed number up and down until you arrive back at the answer you're looking for.

I thought about this for a moment…  If I'd been born about 400 years earlier, even with my bad math skills at the time, this could have been called the Coulls method, not the Newton method.

Fast forward to about 2008, and I was now a 30-something year old guy faced with a problem where some computer hardware that hidden in a bus kept failing in winter.  It didn't take a genius to realise that it was a temperature related issue, but the funny thing is it wasn't the cold that was causing the problem, but the vehicle's heating system that was cooking the hardware.

To pin down the parameters that caused the failures, I was eventually driven to trawling through weather data (oddly, I do this task quite often) and I noticed that the failures were happening more on the weekdays and less on weekends.  Eventually, I discovered that weekends were warmer by a degree or two than weekdays, and hence the drivers cranked the heat up less and there were less hardware failures.

I thought I'd discovered something big.  I double-checked my data.  It was accurate.  I then went looking (we had the Internet now) to see if this was a known phenomenon.  I found I'd been beaten to this discovery by just 9 years, no less by a university that's on my doorstep.  (http://www.sciencedaily.com/releases/1999/05/990527152937.htm)

Remembering my Newton gap, it was clear I'd narrowed the gap from the 400 years to 9 years.  At some point soon, I should be catching up with the best of them, right?

It didn't take long for me to latch on to my next "discovery".  This was also weather related, being related to nocturnal atmospheric pressure patterns that I can pin down to a 7 day cycle, but this time I found that I wasn't beaten to the punch.

What I found this time was that I was chronologically seeing the problem at the correct time, but now there was no accessible data to corroborate with, and even Environment Canada had said that my "discovery" didn't make much sense as weather doesn't follow man-made cycles.  A few years went by and I spoke to a professor in the USA about my observation and what Environment Canada had said.  He basically said he wouldn't be surprised if I was right and to go back out and explore this more.  

It then occurred to me that when the people before had been trying to discover something new, it wasn't like a race where you can see who is ahead of you or catching up behind you.  

No.  Instead, I'm on my own.

Over the past 18 months I've been gradually planning how I would attack the problem and this past few months I gathered my data.  Now I'm just waiting for a bit of spare time where I can process it - but at least I have a plan on how I'll do it.  

More importantly, I have already seen what I'm looking for, so I will recognise it when I see it again - which is weird because nobody else is publicly reporting that they have seen the same thing.

I've often joked that I see a "different world" to the people around me.  Solving a problem like this has meant a lot of "thought-experiment time" over the past few years, and it squarely puts me in a place on a regular basis where there's nobody else.

As a result I disagree with all those that say the age of discovery is over, or that it's inaccessible to the average person.

Friday, January 4, 2013

Advertising to our intelligence

Advertising interests me.  Sometimes, I find ads clever… Sometimes I find ads funny.  Sometimes, I find advertising downright insulting to my intelligence.

Here's an example of an old fashioned bit of advertising where the advertisers spent a little time to come up with something very simple, but that actually makes you use your brain cells in order to make the advert work.

Today, I saw this (http://redboard.rogers.com/2012/a-nation-of-nomophobes-83-of-canadians-smartphone-users-take-their-devices-to-the-bathroom-51-to-bed/) infographic from Rogers on twitter.  What it purports to be is a survey that amongst other things tells the reader what happened in 2012 and makes predictions for the coming year.  I guess, it's there to make an impression on the reader like Rogers knows what they're talking about when it comes to mobile phones.

The thing about advertising and numbers is you can apply some basic common sense and math and see the other side of the coin.  For instance, if a survey said that 45% of people skip breakfast in the morning, you can safely assume that it's highly likely that 55% had some form of food in the morning.

So applying this simple common sense to the advert from rogers, what wonderful revelations do we see?

Apparently, 90% of people didn't fall in love with any bit of Siri, or download a racy novel to their mobile device.  The majority of us didn't catch Gangnam Style on YouTube either.  Most shockingly, the majority of us don't think that in 5 years babies will be using technology before they can walk and talk.

Rogers has really got it's finger on the pulse here, right?  I'm being sarcastic, of course.

The statistics are just common sense.  If you're going to publish a mobile survey, at least pick questions that are interesting because they have unexpected answers or educating to the reader.  Pushing this type of advertising is almost insulting to our collective intelligence because it's just fodder with a logo on it.

Mind you, this is coming from a cellphone carrier that already advertised previously that they have a service that was "Beyond 4G", so it's quite obvious that they already think we can be bamboozled easily.

Thursday, January 3, 2013

Subterranean QR Codes


I take a subway train to work.  The trains contain adverts.  The adverts increasingly contain QR Codes.  

The QR codes normally lead to URL's that can't be navigated to because you're underground and there's no cell data service in the tunnels to view the websites your phone is now trying to get to.

Anyone else see the logic failing here?

A Freaky Economy


I'm no economist by trade, but I do have common sense.  Here's my understanding of something I think everyone needs to think about. 

Most people have heard that Chinese curse "May you live in interesting times" at one point or another.  History has had some very interesting times, but it's important to look at the present and truly appreciate how interesting things are right now.

To anyone with a modicum of common sense, where we are right now is no surprise.  Despite the well documented pitfalls that arise out of debts, we have an economy that is now built on the concept of debt, and nothing is being done to curtail it.  There used to be a phrase "Never a borrower or a lender be" that was an axiom, yet now debt comprises most of the world's finances.  Most people also know, though they probably don't want to acknowledge it, but these debts aren't exactly getting paid down.  Just look at the US spending - it's going up faster than ever and the solution is always to increase the ceiling, rather than paying down the debts.  

Everyone knows this can't continue indefinitely without something really, really, bad happening at some future point.

The good news is some people know that this status quo shouldn't continue, and these people said something about it.  These people are the members at the BIS - or the Bank of International Settlements.  

In layman's terms (not 100% accurate, but for the purposes of this article, good enough), the BIS was a bank that was setup to deal with Germany's reparation debts after WWI.  It was a central bank to a number of nations that made sure payments went where they needed to go, and because of Switzerland's neutrality in most international affairs, it was located there in a place called Basel.  As time went by, it superseded that initial role and now it has more member countries and it tries to keep everyone's money in check - not just the original members money.  This groups largely keeps quiet, but on occasion it will notice that the banking systems in the world are getting a bit screwy, and it makes a recommendation.  These recommendations are not law - they're just advice to banks on how to avoid trouble.

The first recommendation was after the 1974 liquidation of the Herstatt Bank in Cologne, and it was known as the Basel Accord.  It basically stipulated that in the same way you need to keep money in your account to cover your mortgage whilst your latest pay check clears, banks need to keep a certain amount to cover time differences like when dealing with New York as the counterparty banks still need to be paid on time during the settlement processes if the money hasn't arrived at it's destination yet.

The second recommendation was in 2004.  The BIS knew what was coming with this reckless lending, and basically told banks to shore up reserves to make sure they didn't go under.  This was known as Basel II.  The banks basically had troubles meeting this goal, then the crash of 2008 put the wind up them so fast that they quickly locked down all lending and "found" the money.  The money was so locked up, governments had to print new money to get liquidity going again.

The third recommendation was in 2010-11 as a response to what had happened with the deficiencies found in the financial crisis.  Known as Basel III, the timeline to implement this starts in January 2013.  It's purpose is to increase how much the banks need to hold onto, and to make sure they stand up to a stress-test.

Hopefully, that layman's version of history has kept you with me so far.  It's got holes and glosses over vast tracts of detail, but the general gist is what you should know if you don't already.

As part of Basel III, one small aspect was to reclassify what the banks could hold as collateral that held no risk.  In the old days, banks could use gold.  During the 80s this went a bit haywire and after a massive spike followed by a crash, gold lost it's status as "zero risk".  Banks therefore offloaded it and moved over to debts.  

Something screwy then happened - much like that "find the pea under the three shells" game.  A bank has assets and liabilities just like any other person or corporation.  However, if you put your savings money in the bank, this is actually a liability to the bank as they have to pay this back to you when you want access to it.  To stop it being a liability, they "move" the money to the lending arm, and give it out, and now it's it's an "asset" as it's generating cash for the bank and they can call it in (or repossess your home for hopefully an equal value) should they want the money back.  

So your money is now both an asset and a liability.  Can you see how stress testing a bank is going to get a little complicated?  This is before they start packaging up the liability side and selling it off as Credit Default Swaps and other financial products that basically make a mockery of the classification of "who has what?".

Can you see where the real money is?  No?  Neither could anyone else…

So, over the past 30 years, gold has been slowly building up value and now it's back at the point where they're reclassifying it as "zero risk", meaning a bank can hold gold as part of it's "tier 1" assets.

The problem is the whole system is still largely gummed up with debts because everyone owes everyone else something.  Countries are having issues (countries like South Africa excepted) implementing the Basel III framework according to the Jan 2013 schedule.  The USA has postponed it "indefinitely", meanwhile it continues to face another "solution" of raising the debt ceiling further.

This is starting to sound like Basel II all over again, right?

The big issue is we know that there is only so much gold above the ground, ballooning debts and an ever expanding supply of "fiat" money (printed money) being created to service this.  The problem is this printed money is being accounted for in weird ways that eventually have to be "unwound" and settled between parties.  During this process, the money that was an asset moves back to being a liability and is payable somewhere to someone.  

So what does this mean for non-cash assets such as gold?  Does it's price skyrocket as it becomes apparent that it's one of the few actual assets these banks have to settle debts?  After skyrocketing, does it crash again, just like in the 80s bubble?

More importantly, what happens to those countries banks who have postponed putting in the Basel III safety net?

As I said, I'm no economist, but this situation freaks me out from a common sense point of view, and I don't see a good ending to it.  

I just can't work out why other people aren't freaking out too.

Wednesday, January 2, 2013

A warped view of the Gardiner - Revisited

In a previous post, I had postulated why the Gardiner Expressway should by now be an undulating mess due to the reasons I pointed out.

It turns out that this already was a problem that occurred quicker than I had anticipated.

Source: Wikipedia
"The old bridge pillars, which were resting on soil, not on bedrock, had sunk by a metre, giving the eastbound Gardiner a roller-coaster ride or "Humber hump". The bridges and connecting roadways were replaced at a cost of $100 million. Fatal collisions had occurred at the location, including an August 13, 1995 incident where a speeding eastbound Corvette became airborne and collided with a vehicle in the westbound lanes, killing three persons.

Knowing this, I'd now say it's inevitable that the rest of it will be subsiding, given what land it sits on.

Drones and Apple's App Censorship


This morning, a tweet in my morning commute twitter stream turned my attention to an article about how Apple still wouldn't approve a drone mapping app called Drone+ after four months.  

For the purposes of this post, a drone will be assumed to be the traditional type of drone, not the French "Pull it out of le backpack and launch" Mirador, or Turkish Bayraktar ("Baykar") style mini and micro drones.

The basic synopsis of the argument ran like this:
* The app uses non-classified information that is found at other sources.
* One anti-war congressman wants Apple to approve the app
* Apple needs to get out of the censorship game.

I think this a bit of a one-sided view of a much more complicated scenario, because the congressman has one country in mind - the USA - and whilst there are calls for the US to be a little more transparent in how it's drones operate, that's not really the issue here.

As mentioned above, the information in the app is freely available elsewhere, so those that need access to this can do one of two things:
a) Go find the information elsewhere.
b) Jump to a competing ecosystem like Android.  It's a free market after all.

So if that's not the issue, what is?  In short, it's foreign relations nightmare waiting to happen.

Apple is a global company.  It has stores in France (who operate the Sperwer & Harfang drones), Germany (who operate KZO and Heron drones), Italy (who operate RQ-1B's), Turkey (who operate Falcon 600's, Firebee, CL-89's, and Gnat drones), the UK (Reaper, Hermes 450 & Gnat 750)… you get the picture.   Then there's Russia, China, India, and Israel, all of who own drones, too.

It doesn't take a genius to pick out the war/fighting hotspots here, like Turkey, Israel, China, Russia.  If an app was released in the USA and someone subsequently came along in one of these other countries and tried to release a competing app, you now see a very different issue:

1.  If Apple released an app for the drones in other countries, those countries might be a little upset about this.  This soon becomes a government relations issue.
2.  If Apple didn't release the app, then they will be accused of double-standards on their censorship.  This too, might escalate into a government relations issue.

As you can see, the bigger picture has a lot to do with the proverbial "slippery slope" that both Apple and US Gov would find itself in.  Given that Apple in it's capacity as a very "American" icon already has fingers in other military pies (iPhone's since the 4S all support Russia's GLONASS system, for instance so as to avoid import taxes in Russia whilst simultaneously allowing Russia to stop relying on the US's GPS system) would be very bad for business.

Therefore, I can only conclude that the reason they will not approve this app is not out of some puritanical sense of censorship in the app store, but simply that a) it will create a massive can of worms from a relations standpoint, and b) it'll be very bad for business given that they have to fight in foreign markets against manufacturers like HTC and Samsung whilst maintaining total control of the App Store.