From a few weeks ago, a roundtable discussion:

Nouriel Roubini (NYU) was one of the earliest and most persistent economists warning us of the housing bubble leading to our present financial calamities. Jeffrey Sachs (Columbia) has dealt with financial crisis over a quarter century in all parts of the world. Felix Rohatyn is famed as the man who saved NYC from its financial crisis of the 1970s as well as a leading financier, diplomat, and voice for public responsibility. This conversation, moderated by Charlie Rose, among these three experts will enable the public to join in a unique reasoned and detailed discussion of the origins and perhaps solutions to the current upheaval.

Transcript and audio are available.

From the archive:

Roubini believes 50 percent might default.

Can The Economy Be Saved?

I see correspondences between Schrage's ideas here and Gladwell's new book.

As we set out on new innovation initiatives, it is a good time to reflect on the illusions that drag our success rates so low.

The amount of money you spend on research and development has little to no correlation with the quality of any kind of innovation that you do.

You do nothing and you get paid for it. I've aspired to that business model all my life, you know, but it's not sustainable for reasons of competition and customer dissatisfaction.

They could have run an experiment to give them insight ... But they wouldn't do it! And the basic reason for not doing it was not that they couldn't afford to do it, but that they didn't want to know. You know, you're in real trouble as an organization when you won't conduct a cheap experiment to learn something important about your business, your profitability, and your customers. And that is the innovation challenge that organizations face. It has nothing to do with how much you spend, but about what assumptions you're prepared to challenge.

(This is a republication of an interview conducted in 2006 and previously recommended here.)

See also:

I think the future of advice is a cool topic because it turns out that there really are differences between advice and recommendations.

Finally:

Innovations that make us more attractive, more effective, and more desirable are more likely to diffuse than those that don't.

An Interview with Michael Schrage

Consider the following four data points:

1. Six trillion dollars of wealth has been lost in home prices over the last year and a half.

2. Eighteen trillion dollars of wealth has been lost in global equities in only seven weeks.

3. Deleveraging continues to restrict accessibility to credit.

4. Job losses are accelerating.

From the archive:

When we all try to do it at the same time, we actually do less of it.

Time's Running Out for a Rally

We are at the beginning of what I call The Industrial Revolution of Data.

From the archive:

The Industrial Revolution wasn't all steam engines and textile mills. Beer production increased exponentially, as well.

Also:

Albert Einstein achieved scientific fame by asking questions and solving problems that nobody else had realized were problems.

The next big revolution will probably also come from an unexpected direction.

In 2005, Decius wrote:

Any student of Chinese history will tell you that when ignorance gives way to hubris you're one step away from a revolution.

Finally:

Edward Burtynsky is internationally acclaimed for his large-scale photographs of nature transformed by industry. Manufactured Landscapes – a stunning documentary by award winning director Jennifer Baichwal – follows Burtynsky to China, as he captures the effects of the country’s massive industrial revolution. This remarkable film leads us to meditate on human endeavour and its impact on the planet.

The Commoditization of Massive Data Analysis

In August 1996, Peter Schwartz interviewed Peter Drucker. An excerpt:

The model for management that we have right now is the opera.

What you need now is a good jazz group.

From the archive:

It will always suck to work for large organizations, and the larger the organization, the more it will suck.

The Relentless Contrarian

Robert Reich:

Pardon me for asking, but if a company is too big to fail, maybe – just maybe – it’s too big, period.

If They're Too Big To Fail, They're Too Big Period

It was not the drama and mismanagement of the last three months that brought down Iceland's banks. Instead it was absolutely obvious, as soon as we began, during January 2008, to study Iceland's problems, that its banking model was not viable. The fundamental reason was that Iceland was the most extreme example in the world of a very small country, with its own currency, and with an internationally active and internationally exposed financial sector that is very large relative to its GDP and relative to its fiscal capacity.

Even if the banks are fundamentally solvent (in the sense that its assets, if held to maturity, would be sufficient to cover its obligations), such a small country – small currency configuration makes it highly unlikely that the central bank can act as an effective foreign currency lender of last resort/market maker of last resort. Without a credit foreign currency lender of last resort and market maker of last resort, there is always an equilibrium in which a run brings down a solvent system through a funding liquidity and market liquidity crisis. The only way for a small country like Iceland to have a large internationally active banking sector that is immune to the risk of insolvency triggered by illiquidity caused by either traditional or modern bank runs, is for Iceland to join the EU and become a full member of the euro area. If Iceland had a global reserve currency as its national currency, and with the full liquidity facilities of the Eurosystem at its disposal, no Icelandic bank could be brought down by illiquidity alone. If Iceland was unwilling to take that step, it should not have grown a massive on-shore internationally exposed banking sector.

This was clear in July 2008, as it was in April 2008 and in January 2008 when we first considered these issues. We are pretty sure this ought to have been clear in 2006, 2004 or 2000.

The Icelandic banking crisis and what to do about it

There is no daytime TV in Iceland.

Icelanders are by nature frugal people.

Now, ... business travelers found their credit cards refused ... Skype would not renew our credits ...

It hurts.

Picture a pig trying to balance on a mouse’s back and you’ll get some idea of the scale of the problem.

Voices of caution ... were drowned out by a media that became fixated ...

“Astute investors should have asked themselves, ‘Does this smell right?’”

See also:

It can’t all be blamed on Axe body spray.

Letter from Iceland

The Thesis:

1. Venture Capital is Broken

2. True Innovation is is Undercapitalized

3. The Inflection Point has Arrived

4. It's Time for Change

The Canary Is Dead

Bill St. Arnaud:

Changes being made under the rubric of fighting excessive use of bandwidth by that mythical 5 percent of broadband subscribers that use 90 percent of available bandwidth have nothing to do with freeing those ill-used bits for legitimate use.

From a March 6, 2001, transcript of an online chat between Bernd-Jürgen Brandes (cator99) and Armin Meiwes (antrophagus):

cator99: I’m in telecommunications

antrophagus: Oh, that sounds interesting

cator99: I believe you

Also:

The best network is the hardest one to make money running.

This is the Paradox of the Best Network.

More recently:

Comcast, the nation's largest cable company, has announced that it will impose a monthly cap of 250 GB on its customers' Internet usage.

Gobble, gobble.

The incredible shrinking Internet