Culture is a Dichotomy: Positive or Negative

Working for any corporation or even in the halls of academia means one will deal with the parent organization’s culture. Culture is often described as the mission, worldview and values found within members of the body. No matter how benevolent management’s motto, the true goal of any business is to turn a profit. Corporate values have to revolve around keeping your organization profitable or tomorrow will result in bankruptcy. Making money is a more complex than just an idea or a value driven goal though. Leadership and toil towards a common goal is necessary. The drive towards profits can be cruel if human weaknesses like greed are unchecked. How individuals treat each other within a profit framework is a reflection of the culture.  Cultures can be divided simply into positive and negative.

How people interact with each other comes from the top. Since corporations are not democracies, leaders set the tone on culture. This cuts both ways, in positive and negative fashions. In most cases, the direction is positive enabling necessary initiatives like safety and the efficient use of employees’ time. Poor management gives the converse results with a negative culture detracting from productivity. Unpleasant, toxic work environment is a poor outcome management would like to avoid. All organizations are a mixture of both positive and negative influences. It can be generally stated that a culture fits into a positive or negative camp.

Tell-tale signs of a negative culture reveal itself in a multi-faceted manner with these common traits:

1) Silo effect – The silo effect is when individual groups and even single employees are isolated from other inside groups. Information is not shared across functional areas making simple tasks often difficult. Employees have no idea what is going on within the corporation. The old mushroom joke comes into play here. One is treated like a mushroom, kept in the dark and fed a lot of manure.

2) Mistrust – Being isolated from your colleagues without any information about the day-to-day functions will often breed mistrust. This leads to inter-group hostility then in-fighting. Energy is wasted in proxy battles instead of directed toward productivity.

3) Inefficient labor – Managers that want to get ahead are forced to play a devious game. The best way to do this is get onto the better side of there direct manager by using labor to fulfill their supervisor’s desire no matter how wasteful. Tasks that should have top priority are ignored for busy work. Little significant work gets done.  Another inefficient labor practice is hiring too many people as a grandstanding political statement, “Hey, look at all of the people I manage.”

4) FEAR – The culmination of the above three signs is fear. Chronic fear makes employees extremely insecure. People only do enough to keep their jobs with no further incentive. Loyalty also quickly vanishes. Short term thinking dominates the workforce as survival. Unnecessary terminations and constant layoffs result in a culture of terror.

Positive culture is in sharp contrast to the negative and has similar tell-tale signs:

1) Respect – When I mean respect, it is in the sense that employees are also people with lives outside the business. Reasonable accommodations are given to the employees for personal life events like family, rest and personal tragedies. It is an unwritten code that employees will complete work without intimidation.

2) Transparency – Information required that an employee needs is readily available and accessible. Decisions concerning employment and operations within divisions is transmitted is an open, non-hostile manner.

3) Investment – Businesses that invest within themselves are going the long run. Investment includes training, equipment and long term strategic thinking. Paying industry competitive, appropriate wages also leads to a good workforce. Promoting employees according to ability and planning proper succession are outstanding investments.

4) Organization based outlook – Employees across all levels in the organization are free to contribute ideas to the common good of the organization. This is not only rewarded but encouraged without ideas being stolen. Besides being recognized with simple material rewards, they also gain the satisfaction of giving to a greater cause.

This list is a basic outline for anyone who will work for any organization to recognize before employment. Working for a company with a positive culture will boost your career while the opposite will occur with a negative culture. Identifying these characteristics in the interview stages before accepting a position is a topic for another essay.

Good Is All One Needs

It is amazing how often we hear from employers these days about how there are millions of jobs available and they can not fill these positions. I will not get into the details about the overall problem with my introductory post into the topic, but this post addresses the question that plagues hiring authorities everywhere. What kind of employee does a company really need? Organizations need all-around good employees when often they have a short-sighted fixation on acquiring “the best” candidates based on perceived competency.

Employees typically complete on the order of three to four unique tasks. Some advanced jobs (like engineering) require even less. The best example of a field heavily geared towards specialization is computer programming. Building software has two components, outlining the aesthetic aspects of software followed by the more challenging task of implementing functioning code. Employers hire someone who can complete the tasks and deliver a certain quality standard. When a customer purchases software it does not matter that the code is perfect script. All that matters is the software executes the expected task through an accessible interface with minimal error. Good code will suffice in comparison to great code. This is also true with employment. We will call this general employee competency.  

Just as the tech consumer needs good software, employers need workers with good character to fill their rank and file. It is obvious no organization wants a misbehaving employee. Laziness, bad attitudes, dishonesty and illicit behavior are just the many of negative qualities to avoid at all costs. I will argue that the majority of workforce does NOT have these undesired qualities and behave in an acceptable manner. It is very important for employees to display positive habits as punctuality, reliability, honesty, and a team player with a sense of mission. Employers should focus significantly concerning these qualities within employees and not leave it as an after thought.

This is important for the simple fact it opens up the number of candidates available. If hiring personnel search for only “the best” or “all-stars” this limits you potential hiring pool significantly. Only a few percent of the population is the best. It can get expensive quickly since they will demand high salaries and other benefits. If an opening is truly open to the outside, focus on a well-rounded candidate with high quality character and competency. In the end, this is what a hiring manager truly needs. Filling the position will be made relatively simple. 

New Business Challenge Part 1: Markets

This is my first post in 3 years. Between job and family my writing has decreased to an unacceptable level. LinkedIn has invited me to contribute to their site. The post below is my first on LinkedIn. It is intellectual, but for someone who wants to start their own business, necessary information. Enjoy!

Running a new business can be exciting and life changing. Taking an innovative idea and bringing it to life. Potential rewards are towards the upside when a business succeeds. Start ups have generated an entire mythology around the topic. What often is ignored surrounds the unspoken negative side with business failure rates during the initial 5 years. I have read that around 80 % outright fail, 10 % organizations live on in a lesser form while 10 % grow to become big, successful entities.  Working in a well connected startup; I have dealt with many new businesses and bringing their products into reality. This post is part one of two in a series addressing the two main pitfalls I believe cause this large failure rate, marketability and corporate mismanagement. We will address the former and most important factor in this article. 

Business sales come down to one question, “Why should I buy this product or service?” Breaking the question down into smaller components yields even more simple items. Do I need this product? Is this the best version on the market? Will I get good support and service? Many more questions arise that define a customer’s desire in purchasing any product. Other less obvious, but very important factors that come into play are product functionality, accessibility, culture and even the zeitgeist. The best example of a product missing in the secondary categories is Chevrolet trying to sell the Nova (no go in Spanish) in Latin America during the 1970s.

Larger more established companies also face the market challenge, but have more leeway since they are often diversified allowing a greater margin of error. With a startup, a few errors are fatal. Being a small, young company forces the business into creating a viable product with its main and often only product. For it to survive within such a short time frame, the product is required to fit into one of three main categories:

1 Revolutionary – nothing like this has ever been seen before

2 Disruptive – this product is the better mousetrap

3 Niche – this product fills a previously empty void within an industry.

If the business is a market failure from the beginning, these are (in my humble opinion) the root causes and should raise a flag within anyone who is dealing with a nascent business:

Delusions of Grandeur –

The inventor has the best product in the world that is going to conquer all markets. Founder(s) can be good salespeople and make it sound like their technology is just unstoppable. Another related delusion is the founders’ obsession since it is their lifework while overlooking the obvious flaws. Big egos are at play here. Yelling at the sky to make it green just will not make it happen. Reality will one day step in and make an ugly scene with all involved.

Lack of Due Diligence –

Modern technology is complex and is built upon decades even centuries of prior discoveries and inventions. One can easily point out the con artist who comes and tries to sell you a bridge. New products or services do not tower as the Golden Gate Bridge since they inhabit only the thought process of the company’s founder. Does a variation of this product exist? Has this idea been tried before without luck? Those who cut corners will downplay these quintessential questions.  

Insufficient Product –

The product is put onto the drawing board, prototypes work and production begins. Once the initial sales are complete the technology works. It just does not work well enough to displace an alternative or does not make the product worth purchasing in comparison to the price. In other words, the benefits do not match the high cost.

Application Missing –

Key to any new successful endeavor is the “killer” application. The customer will buy this product to complete a necessary task or resulting entertainment. Failure to fulfill an application is a recipe for disaster resulting in no orders. Starting a business before a previous demonstration will most likely lead to this endless, financial drain leading to a slow death. Focus is demanded to avoid this trap.

This post is not as a condemnation of start ups, but is educational for those who wish to engage in such enterprises. Start ups and small businesses are the backbone of the US economy and encourage job growth. This in turn makes our economic engine purr along while many in the world stammer. We should encourage those who are willing to take the risk and start their own enterprises for it benefits them and society as a whole. Part two of this series will address the broader issue mismanagement found in all corporation sizes.

Engine economy

This is my first posting in over two weeks. I just moved to Dallas and my new job is occupying most free time, thus, my posting frequency is going to decline. Since no one has ads on my blog, I feel free to do so.

In prior posts, Volt Full of Trouble, The Inconvenient Electric Car, and The real future energy crisis look into energy issues relating to transportation. I discuss the aspects of what will occur when crude oil supplies are depleted worldwide in the latter post. The former posts investigate why the electric car and hybrid are poor replacements for the current technology. My over all conclusion is we need a liquid alternative to crude oil along with innovative engines.

This post on MSNBC.com is just what the doctor ordered. Researchers at Michigan State University have developed their Wave Disc Generator. According to the authors,

The Wave Disk Generator uses 60 percent of its fuel for propulsion; standard car engines use just 15 percent. As a result, the generator is 3.5 times more fuel efficient than typical combustion engines.

If true, this is quite an improvement over current 100 year-old technology. They even claim that it reduces emissions by 90 percent in comparison to typical internal combustion engines. Double bonus for clean air.

How the engine works creating such high efficiency,

The engine has a rotor that's equipped with wave-like channels that trap and mix oxygen and fuel as the rotor spins. These central inlets are blocked off, building pressure within the chamber, causing a shock wave that ignites the compressed air and fuel to transmit energy.

If claims are true or not, it is going to be new technologies similar to this prototype that is our future, not electric cars.

Japanese suffering

The news outlets are all loaded with the recent 8.9 earthquake followed with a tsunami that hit the northeast of Japan. My condolences and prayers go out to those poor people caught up in this horrendous disaster. There is nothing good to come of this mess. The media is focusing on the nuclear reactor problems Japan is having, but I believe that the problems with meltdown are overblown and the government should worry about other much more severe problems at hand.

Nuclear reactor issues at Fukushima have caused quite a stir. Some of the buildings had explosions and several fires have erupted. The fear is of a reactor meltdown releasing a significant amount of radioactive material into the atmosphere may occur if officials can not cool down a couple of the reactors. Fear of a meltdown is real. Radiation in the local area has been measured at a magnitude or greater than background. Long term exposure to this level is unhealthy, but could mitigated. If meltdown does commence, the release would be devastating to local regions up to 50 miles from the plant. Anyone present when a meltdown release occurs would be exposed to a large quantity of toxic materials potentially resulting in all sorts of radiation sickness and future cancer. Very bad! Beyond the local region, I do not see effects from radiation or radioactive materials hurting people. Even with winds blowing materials.

What should be of concern are more mundane, yet destructive problems that could occur from the disaster. The ability to deliver clean water and food has been wiped out by the disaster. Transportation methods are all disabled. Millions of people are also homeless in the aftermath. If these people do quickly get water and food, they will face dehydration or starvation. This requires only a few days without basics, so this threat is imminent. Getting in the necessary supplies into the area is difficult when roads, railways, airports and shipping are all wiped out. The secondary threat is from water-born disease. Cholera and typhoid easily spread with stagnate water loaded full of dirty debris including sewage and various animal/human corps. Dealing with a health epidemic inside a natural disaster would only add to the woes. If either problem previously described in this paragraph take hold, tens of thousand of people could unnecessarily perish.

I guess our media has to hype the politically sensitive issues even though they are the least threatening. No one wants to tune into hear the standard starvation/disease monologue which occurs routinely. Nuclear meltdowns occur once in a decade and make sensational stories. When watching media stories, remember this.

Ever elusive hipness

Update: 3-9-2011:

One of my Facebook friends, Damian, pointed out that there are many groups who define what is "hip". What one group finds hip another finds repulsive. He is correct in this sense. There are many subcultures out there with a hip or in-crowd. Each is unique in their style, geography, social class, age range and philosophy. The best example I can think of a subculture is '80s punk's nihilistic underground. My original post covers what would be considered "mainstream American youth culture". The original post points to the ever changing composition of mainstream youth culture and its obsession with materialism and lack of philosophical ideals in comparison to recent youth movements.

Original Post:

Most of my posts tend to cover technology with a little finance thrown in for spice. This post is a personal view of modern American life. It is about the current state of being "hip" or "cool". The in-crowd member. American hipness is for young adults in the late teens through their 20's before they settle down and have kids. This is common and nothing new. Even in my 20's I was not with the in-crowd, but could spot culture trends. What I find confounding is the vapid nature of current hipsters.

Let's go back to previous decades, the 60's, 70's and 80's. In these decades, styles tended to be easy to pick out along with their social movements. The 60's had long-haired, second-hand clothed hippies. It was not difficult to pick out the styles and imitate them. The 70's had similar styles as the '60s, but certain aspects changed, most definitely the music. Fast-forward to the '80s, everything changed with the punk movement, electronica movement and hair-metal bands. Head-bands, bracelets, torn jeans and bright colors ruled the day. One could pick out these distinct styles. We will move on to early '90s with the grunge movement. The grunge movement was the antithesis of the '80s hair-metal. Simplistic in nature, grunge was easy to spot.

In the late '90s, styles became less distinct. There was no large scale social movement. Music became a rehash of prior styles (much of it good). Style sort of fell into a drift. What is cool? It seems like to be hip one had to have direct connection with the hip crowd. Styles change so fast it is difficult to even recognize that hat you are wearing was soooooooooo yesterday.

It almost seems as a few people monopolize on being hip. Instead of fitting into a crowd, it became excluding the majority of people, even young people. Often today, being a hipster has a negative connotation. I had a few friends about 4 years ago who were 18-19 years old. They were aspiring artists (i.e. no money). By all means, they would be considered hip. One night while at their numerous parties, a friend mentioned his bad run-in with a group of "hipsters" in Austin. This struck me as odd, but thinking more about it, it makes sense. I also know of a young lady who tried to keep up with the in-crowd and the chase put her $30,000 in debt. Currently, I believe being hip is more than about style and nothing to do with a social movement. It is about being the proper age/class and that is about being both young and wealthy.

I believe this reflects the income disparity and social stratification in our society. Even the youth are voluntarily excluding each other. Distinction not by race, religion, age, or philosophy, but exclusion by economic class.

Dwarfs will rule the world!

Well, no, dwarfs may not rule the world. There is a good chance a certain group will outlive their contemporaries though. This recent study out of the University of Southern California studied a group of dwarfs who have Laron syndrome in Ecuador and worldwide. Laron syndrome is genetic and effects how growth is regulated in the body.

The individuals have Laron syndrome, a rare disease that causes stunted growth in about 250 people worldwide. Scientists have known the syndrome results from a mutation in a gene that regulates how cells grow and divide.

The dwarfism cause is also a barrier to cancer and diabetes. The disease limiting culprit in Laron's cases appears to be an insulin producing protein that binds with human growth hormone, insulin-like growth factor 1 or IGF1.

High levels of IGF1 have been implicated in cancer and diabetes in previous studies, and low levels have been found to cause increased longevity in everything from yeast and worms to mice.

"In worms, we don't see diabetes or cancer or anything — once we establish this potential [to extend life] in worms, we moved to mice," said Felipe Sierra, director of the Division of Aging Biology at the National Institute on Aging. "We do see similar things in this study [of humans], and it validates everything we do."

Sure enough, in the short-statured Ecuadorean group, the study revealed that deficient growth hormone receptor led to low levels of IGF1, and this was associated with the disease-resistance.

The final intention is development of a drug that will mimic reduced IGF1 in healthy individuals reducing cancer and diabetes.

Interesting concept, but I would guess other negative side effects would appear besides the positive reduction in cancer rates and diabetes. Wikipedia states one of the disease's symptoms in men puts fear in almost any healthy male,

.....a very small penis.

Flu's days are numbered

This report by the media group UPI has news on a new, universal flu vaccine being developed in England. Unlike the typical flu vaccine we are inoculated with these days which protects against certain strains of flue, this would protect against all strains. The article states,

Current flu vaccines only work against a few kinds of flu and only for a short time, as seasonal flu evolves and changes to get around immunity provided by that year's vaccine, requiring constant research and re-vaccination, NewScientist.com reported Monday.

Several research groups, including one at Oxford University, are attempting to develop a flu vaccine out of proteins that are identical in all flu viruses in the hope this will protect people from all flu once and for all.

If science has enough time and resources dedicated to certain solvable problems, inevitably, many will have solutions appear. The key is dedication. We have this idea that by putting a bunch of smart people in a group and throwing a little money at them they will solve all of the world's problems. It does not work that way. The best example I can think of as a modern marvel is modern computing. We have more computational power on our desktop now than could be housed in 10 city blocks. What people often fail to acknowledge is the 40 years of innovation and billions of dollars invested.

We need to fund research and development in the US if we are to compete with rest of the world.

Never Change Nelly

This is the second caricature in my blog series. My first caricature was the True Believer. This character could well overlap with True Believers, Never Change Nelly. Never Change Nelly wants everything to remain as they are currently. The ultimate conservative (not in the American political sense) who wants everything to remain constant day-to-day and so on. They refuse to take any chances no matter how detrimental their current position may be. Any discontinuity to their never changing world is taken as a threat without regards to the effects in their lives.

What may drive this worldview? My guess is a variety of things.
1. As people age they get set in their ways and want to change less
2. Personality, some people do not like surprises or challenges
3. One pathology of this thinking creates the mindset of I know everything. (Hint: no one knows everything or even possesses the majority of knowledge humans have. This really is another version of narcissism.)
4. They have worked hard to set their lives up in a certain manner which they like.
5. Life has been easy for them

Whatever the driving factor behind Never Change Nelly, a problem quickly arises. Our world is a quickly changing, highly dynamic place. Change will come. Change is inevitable. You cannot stop it. What was true yesterday may not be true tomorrow. Stubborn refusal to adapt creates dinosaurs. Being an expert with the typewriter 3 decades ago would have given someone employment. Today, it would equal unemployment. Adaptation is vital for survival. To paraphrase Andy Grove, the cofounder of Intel, in reference to the budding computer industry, "Only the paranoid survive".

I truly believe successful individuals adapt to changes. Never Change Nelly will never find a place among the successful.

True Believer

This post is going to be one in a several on different caricatures who fill social roles and carry certain beliefs/worldviews. My initial caricature is a very familiar one, the True Believer. "True believer" is often associated with a deeply religious person in the traditional sense, which, is a great example (Myer-Briggs personality indicators put these type of people as SJs). I will take it further, as someone who is deeply dedicated to whatever their cause is may that be religion, career, organization, society and etc. This definition covers all personality types in all areas of modern society.

When I mean True Believer, it is someone who models their life around the ideal group "member". They have full, sincere faith in the institutions which they belong. They go the extra distance.

Why am I mentioning this seemingly obvious concept? It is because True Believers will move up their respective ladders in life (organization, career and etc.) well ahead of other caricatures. This Fortune magazine article talks about the most successful individuals in corporations are those who maintain the status quo when moving up the corporate rungs. This concept is universal with almost all organizations with individual groups having different criteria. The politically correct, communist professor who is a hit in academia would not last too long in a conservative business atmosphere. You get the drift. I think it has to do with trust among the leadership. It is easiest to trust those who are true believers in your cause.

The 4th generation

There is an old saying "shirt sleeves to shirt sleeves in three generations". Basically, it means that a family's wealth only will last for three generations before it is lost. This saying is universal worldwide and the Chinese have the easiest to understand and most applicable version "Wealth will not last for over three generations".

Picture this scenario. The first generation is the founder of a family's wealth, whether it is a matriarch or patriarch. Founders work hard and have unique opportunities. The second generation consisting of several children continue on their parent's work ethic gradually expanding the wealth, while at the same time splitting the assets among them. By the time the third generation comes along, the wealth is split again among the grandchildren within less productive investments. The bigger issue is the third generation knows nothing but easy living. They do not develop the work ethic and sense to maintain the wealth. It is squandered away on poor investments and parties. The fourth generation gets nothing.

The best example of this that comes to mind is the Furr's grocery store chain in New Mexico (related to the restaurant). It was founded in 1929 by Roy Furr in Lubbock, TX. The chain expanded throughout Roy's life until passing away in 1975. Roy's three children squabbled over the business and it went bankrupt in 1979 through their mismanagement. West German investors took over the grocery store chain until it was finally closed in 2002. This is an example of wealth lasting two generations.

I am going to take this idea a little further and apply it to societies in general. Let's say an average generation is 25 years in time. Three generations would make 75 years. According to this idea, prosperity would last approximately 75 years before a time of chaos would befall a society in the form of an economic depression or war. Using American history as an example to guess where we stand in our cycle form this time line. NOTE: During prosperous times disastrous events do occur, but are limited in negative effect on the society. The lines below represent the cycle in order on each line the event, years in history, elapsed time and whether it was prosperous or chaotic in nature.

US Revolutionary War, 1776-1783 AD, 7 years, Chaos
Early Republic, 1783-1860 AD, 77 years, Prosperity
US Civil War, 1861-1865 AD, 4 years, Chaos
Turn of Century, 1866-1929 AD, 63 years, Prosperity
Great Depression & WWII, 1930-1945 AD, 15 years, Chaos
Post WWII superpower, 1946- ? AD, 64+ years, Prosperity

If this holds any water, we are approaching the end of a prosperous time in the US. The question is how long will this last? What will replace our current system? No one knows.

Global Reset

As we are in the heart of the holiday season, people start to think about the new year and the potential it could bring. This blog tends to be technical ideals for the layperson, but this post is on a something that influences everyone, the economy. My wishes may seem demented initially. Think it through, they make rational sense. My wish is for our economic institutions to face their bankrupt reality and begin defaulting on their debt. This will force leaders everywhere to make decisions that are significant and lasting.

We are in economic trouble because of excessive debt levels at all levels of society. The main debt sources are mortgages, credit card debt and auto loans. Compounding this fact is in the US (all Western societies) we no longer manufacture many items. In essence, we consume more than we produce. Since the initial stages of the crisis appearing in July 2007 (two Bear Sterns MBS hedge funds collapsed), almost all policy has been kick-the-can-down-the-road type ignoring reality. The US federal government backed by the Federal Reserve and the banking industry backed our financial industry in the depths of the 2008-2009 financial crisis. The result was more debt was accumulated on the books of government agencies. US federal government debt stands at $13.8 trillion or ~90% GDP and is quickly rising. Our deficits are unsustainable and will make this debt burden impossible to pay in the next few years. If this was a US problem alone, rest of the world would continue on while we solve our problems. Unfortunately, this is a world wide problem with Europe and Japan in even worst conditions. There is more debt than the ability to pay, thus, it will not be paid. I predict by the next presidential election, much of the debt will be defaulted upon.

The defaulted debt will cause a Great Reset. If our leaders want a society worth living in, they will be forced to make hard decisions about a variety of topics including economics, government spending and social order. Why do I want this to occur? As the way thing are, the debt load is consuming available capital into useless support of an over sized financial industry along with other less productive pursuits like the war-machine and etc. Good portions of this capital could be put to more productive uses like dealing with replacing declining Crude Oil stocks are our main transportation source. Many other good social/economic forces could also be financed. One positive result would lead to the eventual reduction in unemployment since more people would be allowed to work. The other reason is it could bring about the next big thing in technology. The way it is now, future technologies are not emerging due to a lack of will from funding sources. I would like to join the next big thing, but it requires funding and societal support.

This is my wish. It would result in a beautiful renewal or rebirth. Happy holidays everyone!

Spenditis the Disease

Today folks, I am going to talk about a disease that seems to permeate our society, Spenditis. You may ask what is Spenditis? To put it simply as spending every penny one makes plus future earnings through taking on mountains of unnecessary debt. It amazes me how many people I know buy an over sized (too expensive) house, several luxury vehicles, have several maxed out credit cards and a student loan (or loans if married) to boot. Folks, you are never going to pay this back. The problems will begin when economic trouble hits, i.e. job loss, sudden illness. At that point, you fall behind on payments and it will all vanish in a heartbeat.

I am not arguing against buying things that pertain to hobbies, travel or other nice items as long as it is within your economic means. We have our interests and that is one thing employment supports. Our interests should not enslave us though.

What is the cause of Spenditis? I am not sure. Things that contribute to this misdiagnosed malady are feelings of entitlement, narcissism, keeping up with the Joneses and our consumer culture. Personally, one factor that contributes heavily to those want-to-be high rollers is the inability to distinguish between a want and a need. Needs are the basics like food, clothing, shelter, medical care and other society factors like education. In most cases, if an item is a luxury purchase it fits into a want. The best want example is Imelda Marcos' 2700 pairs of shoes. For the 99 % of people who are not extraordinarily wealthy, this would bankrupt them. To her, being president of the Philippines, the want did not permanently damage her economic standing.

Please avoid Spenditis. You will appreciate it when the hard times come, and they will come. The best analogy is The Ant and Grasshopper fable from ancient times.

Next generation space flight takes orbit

I made a previous post on the topic about how dangerous the retiring Space Shuttle is to those who fly the craft. In that same post I mention about the military's potential future workhorse, the X-37, an unmanned orbiter that is launched by a traditional rocket and lands through gliding back in the Earth's atmosphere touching down on a runway just like the space shuttle. If I am correct, this is the idea behind the original Space Shuttle back in the 1970's before NASA's bureaucracy took over and made it the expensive, dangerous, manned orbiter. Good ideas are generally recycled in history, and this is another example.

The Associated Press reports that the X-37 recently took a flight starting in April 2010,

The U.S. Air Force's secrecy-shrouded X-37B unmanned spaceplane returned to Earth early Friday after more than seven months in orbit on a classified mission, officials said.

The winged craft autonomously landed at Vandenberg Air Force Base on the California coast 130 miles northwest of Los Angeles, base spokesman Jeremy Eggers said.

"It's very exciting," Eggers said of the 1:16 a.m. PST landing.

The X-37B was launched by an Atlas 5 rocket from Cape Canaveral, Fla., on April 22, 2010, with a maximum mission duration of 270 days.

That is what makes this technology advantageous over the shuttle and traditional rockets. It is launched cheaply (like a rocket), but has the capability of the shuttle in flexibility while in orbit. No need to worry about anyone getting injured or killed during operation either. The X-37 excels in the fact it can remain in orbit for long periods of time. This is a capability neither the rocket or shuttle possess.

Research and development of the system has not been cheap or quick,

The voyage culminated the project's long and expensive journey from NASA to the Pentagon's research and development arm and then on to the secretive Air Force Rapid Capabilities Office. Hundreds of millions of dollars have been spent on the X-37 program, but the current total hasn't been released.

Compare the hundreds of millions of dollars spent on the X-37 to the $500 million per Space Shuttle launch, it justifies the capital spent. To be fair, anything hi-tech, new and revolutionary like this craft will be expensive to get from idea to final, successful product. Personally, this is a concept many business and government leaders are missing by not funding significant research and development in our society today.

Moving mutants

I am just getting over a common cold today. Surprisingly, it was my first in about three years. Being scientifically trained, it makes me ponder how do they find a cure for the common cold through its spread.

The common cold is caused by a virus. Viruses routinely mutate when jumping host to host. This is why people need new flu shots each year because a new genetic variation of the virus is spreading among the population. Not being medically trained, the mighty Wikipedia saved the day giving a description of the many viruses that cause colds (links in quotes do not work)

The common cold is a viral infection of the upper respiratory tract. The most commonly implicated virus is a rhinovirus (30–50%), a type of picornavirus with 99 known serotypes.^[5][14][15] Others include: coronavirus (10–15%), influenza^[5] human parainfluenza viruses, human respiratory syncytial virus, adenoviruses, enteroviruses, and metapneumovirus.^[10] In total over 200 serologically different viral types cause colds.^[5] Coronaviruses are particularly implicated in adult colds. Of over 30 coronaviruses, 3 or 4 cause infections in humans, but they are difficult to grow in the laboratory and their significance is thus less well-understood.^[10] (5–15%),

I knew there were multiple "cold" viral strains out there, but I never realized there were several distinguishable viruses causing illness. The inability to grow with ease in a laboratory answers the question why have we not made little progress on a cure. The other main reason why we can not find a cure

Due to the many different types of viruses and their tendency for continuous mutation, it is impossible to gain complete immunity to the common cold.

How does one track this mutation? When does a virus become genetically variable to reinfect a healthy host? When is a virus a completely new strain? How many hosts are required for each step is the key factor.

My guess will be the use of laboratory animals since it would be impossible to track human to human transmission. Species that are helpful would need to resemble humans, i.e. rats, mice, pigs or primates. Once a host is infected, isolate the animal and allow only one other host to have contact limiting the infection's spread. This would be a long term research project. I am not necessarily sure that big pharmaceuticals are up to the expensive task.

Sun blows against reality

I am a proponent of most alternative energies on the grounds of replacing limited fossil fuel sources and alternative energy's lower environmental impact. My global opinion on the subject can be read here. One issue that restricts alternative energy's growth is cost. These technologies are not cheap to implement. In an effort to offset the high cost, government subsidies are often given to wind and solar companies. This may seem fine, but when the political winds change, these mostly startup operations run into serious cash flow issues from the simple fact that they can not turn a profit on their high investments into equipment and talent.

This CNNMoney.com article warns of the expiring subsidies the US federal government has been giving to both wind and solar companies.

After years of rapid growth and darling status among many in Washington, the future of the American renewable energy industry is uncertain. That's because the government cash it has come to rely on may dry up on Dec. 31.

Before the Great Recession, renewable energy developments were helped by a tax credit, worth generally 30% of the cost of the project. When the recession hit, the stimulus package replaced those tax credits with direct cash grants of similar value.

Cash is considered more beneficial than credit to the industry.

So far, the government has handed out about $5.4 billion, according to the Energy Department.

Congress could vote to extend the grants, but that's highly unlikely.

$5.4 billion is a lot of money to be spending on technologies that may be abandoned from lack of interest. Those companies most likely will not survive without the stimulus money. Money thrown down a hole. What saddens me further is this is a repeat of the solar boom/bust that occurred in the 1970's. This is a demonstration of why socialism does not work on a large scale, the government's central planning is not efficient and is often driven by politics, not market reality. Do we ever learn?

What to do? The stark reality is these alternative energy technologies are not yet ready for prime time in the capitalist market place. Reality trumps a naive, orthodox environmental ideology. This should not be an excuse to fully abandon them though. As a supporter of these alternative energies, I believe we need to spend more money (government and private) on research and development (R&D) of these technologies. Develop them to the point where they can compete with the more traditional fossil fuel and companies will be able to turn a profit. The secondary benefit would be a revitalization of US R&D and industry.

This lesson should not be forgotten when the true energy crisis strikes, the exhaustion of crude oil.

After the ballots were cast

Little less than a week ago the US had their midterm elections. The majority of candidates for positions in the federal government were for the House of Representatives and the Senate. The post is going to explore one way to reduce a common thread that has been evolving in our electorate, extreme partisan candidates on both sides of the aisle. Two simple changes in the way congress worked would reduce this problem without major changes in the constitution. It also would lead to both major parties working together better and independents would have a greater voice.

What I propose is the elimination of current seniority rules in both houses of congress. Specifically, the way committee members are selected. These vital positions are automatically given to the most senior party members from the majority party without any input from rest of congress. This gives quite a bit of power to ranking majority members over very important issues like military, social spending and law writing. Bills that were good for the US often died in these committees before making it to the main floor where it may have passed.

Why is this a problem? It has to do with how the most senior members being reelected year after year. In the case of the House, the jurisdictions are picked by a state's government. If a state leans towards one ideological direction, i.e. Texas to Republican or California to Democrat, the districts are setup so the majority of Representatives will come from the stat's dominant party. This is often referred to gerrymandering if blatant or is against Civil Rights laws. It occurs regularly even with the laws and I do not know of a way to eliminate the issue. The Senate has less of this issue due to the fact the entire state elects the position, but it is still a problem. The result is certain districts will elect a member from the same party over and over again. This is further exacerbated by reelecting incumbents since they become more senior in their own party and have greater ability to bring home pork spending projects to their home state. The voters know this instinctively. Vote for the incumbent because they will bring home the bacon. It is in the voter's favor to do so. The candidates also know this. Candidates respond by following the party line and not putting forth any ideas that may hurt their chance for reelection. This is another disincentive for congress members to break party line for the benefit our country. The final result is often political polarization.

Proposal #1: Bring committee members to full chamber majority vote

Instead of allowing the majority party full control over vital committee members, the rules should be changed to reflect the Speaker of the House. The Speaker of the House is nominated by the majority party and is picked through an election of the full House chamber. The elections often filter out the extreme members to a limited degree unless the chamber has a vast majority. To further filter out partisan hacks, I suggest all leadership positions (including the Speaker) and committee members come to full chamber vote and each member requires a 2/3 majority to be seated. This results in two outcomes. First, even if a party wins the majority it forces them to make some concessions when congress convenes. It forces a limited bipartisanship immediately. Second, it will prevent the extreme elements of a party from dominating the committees. Voters would also be less inclined to rubber stamp the incumbents if bringing home the bacon is a little more difficult. Congress members would have to work a little harder for their reelections.

Proposal #2: Eliminate congressional primary elections

Primary elections developed out of the 1960's as a more populist way to pick candidates. The daunting problem is the low key elections bring out the most fired up voters which are often the most partisan in nature. This leads to the most partisan and extreme candidates running later in November. The other problem is the extra money required to run in the early election. This forces a candidate to either be rich or depend heavily on wealthy contributions. This could potentially lead to elections being bought. We can return to the system in place before the 1960's, let the local parties directly pick their candidates for the election without opening the polls.

Psychic octopus passes on.....

This summer, I blogged (here and here) about Paul the Octopus who predicted Spain to win the 2010 World Cup. He passed away in his German tank at age two last night. The aquarium's manager claimed Paul died of natural causes. Mmmmm, I am suspicious of fanatical German soccer fans.

Let this be a lesson, it is dangerous to speak certain truths.

Computers do not have psychology

In previous posts, I discuss equities investing or stocks using technical analysis (TA) to guess the market (see here, here, here and here). One common form of TA is known as Elliot Wave Principle (EWP) which depends on the collective psychology of investors charting price patterns over time into 5 distinctive waves. Over the last couple of years as I have dabbled in stock investing I have attempted to use EWP unsuccessfully with the New York Stock Exchange indexes. EWP came to my attention in the 2007-2009 crash as the price action followed the 5 waves. If it was true then, it must be true just a few months later? I have come to the conclusion that TA including EWP is not very effective at the current time in US stock markets because of how the market's composition has changed even in a brief period. It has to do with investor psychology (or lack of) and other outside influences.

I will give a brief history of how the US stock market changed over the last couple of decades. In 2001, markets began to trade stock in $0.01 increments in a process known as decimalization. Prior to this, all stocks were traded in fractions of (n/16) fractions of dollars. One advantage of fractions was the fact stock brokers with ask and bid prices at the increments. The slight (n/16) difference between the bid and ask price was the amount a stock broker could make buying and selling blocks of stocks for customers. The second innovation was the market switched to partially computerized operations in NYSE operations and is fully computerized in the NASDAQ market. In a nutshell, the pits with traders buying and selling stock are gone. The price action mostly occurs within a giant computer.

This "modernization" of the markets led to new kind of investment strategy, computerized trading at a quick speed. Basically, picture supercomputers directly connected to the exchange computers through a high speed Internet connection. Why would anyone do that? It is capitalizing on the same trade strategy as day traders. Buy and sell millions of stock simultaneously of just a few pennies of profit and the pennies turn into hundreds of thousands of dollars quickly. Add in the ability to trade put in quotes and cancel transactions before they are processed, one has quite a money making strategy. This process is known as high-frequency trading (HFT).

How does this influence TA? As stated before, TA is based upon investor psychology and the desire to hold stock over various lengths of time from hours up to years. Traders make buys and sells in a response to price movement creating the distinctive TA patterns. HFTs buy and sell stock within a matter of seconds. HFTs can even move millions of stocks down to milliseconds time frames! The HFT responds in a near instantaneous, mechanized manner to stock movement. The resulting trade psychology does not appear on the stock price charts. If HFTs were a small minority in the stock community, it would not directly influence TA. This was partially the case during the 2007-2009 crash with HFTs being ~40 % of the market's participants. EWP traced out the 5 distinctive waves. Currently, HFT represents ~60 % of all trades made on the US exchanges and can account for ~70 % on light trading days. Since this represent the majority of trades, the price action is not driven fully by investor psychology making TA less effective. I believe TA is useless over short periods of time.

One other factor distorting the markets are US government authorities. The government's stimulus and various Federal Reserve programs (TARP, TALF, POMO and etc) are putting money into investors hands in indiscriminate, unequal ways. The "free" money ends up being investing in the market in unorthodoxy manners.

The aha moment I had last night was using TA to avoid these unwanted outside influences into the markets. The only market to my knowledge that is too large ($100s billions per day) for authorities to significantly manipulate are foreign exchange markets (FX). These markets are based upon converting money into different currencies worldwide and HFTs would also have no interest in these markets. What FX markets can follow using TA are carry trades and whether investors are seeking risk or are seeking a safe haven for their investing.

Baseball lumberjack

This Yahoo! article reveals a very talented pro baseball player, Mariano Rivera currently of the New York Yankees, and his ability to break wooden bats with pitches. (Links do not work in quotes)

The best pitch ever notched four more kill shots Wednesday night. Mariano Rivera(notes) throws a cut fastball that at its 55th foot takes a hairpin turn into the fists of left-handed batters, and their feeble attempts to hit it end up reinforcing a long-held certitude: The only thing more dangerous to lumber than wood-boring beetles is the New York Yankees’ closer.

The impressiveness of Rivera’s four-out, four-broken-bat save during the Yankees’ thievery of home-field advantage from the Minnesota Twins in a 6-4 victory in Game 1 of the American League Division Series wasn’t because he set some record. He once cracked five bats in an outing. Nor did he earn extra credit for turning baseballs into buzzsaws. An out is an out, shrapnel or not.

This is a significant amount of force to shatter bats. Broken bats are caused by fast balls at either the bat's end or near a player's hand during a jamb. I am guessing Rivera is the master of the jamb against left handed hitters. In this article, the majority of bats that shatter are actually made of maple wood and not the more traditional ash which just cracks. Maple bats have physical properties that encourage shattering in comparison to ash.

What is interesting about Rivera, is his single minded approach to pitching. He has one pitch, a cutter fast ball. To top it off, he has been doing this for 13 years now and is still effective at past 40.

What’s mystifying – what has mystified for more than a decade now and will continue to mystify until Rivera retires, which, even after his 40th birthday, remains a long way off – is that he throws a single pitch, a dirty bomb of a pitch, yes, but just one nonetheless. Not only can hitters damn near never make solid contact, they fare so poorly that the lone weapon at their disposal often turns into a useless recyclable.

This is a demonstration of someone capitalizing a particular talent. Most pro pitchers can throw pitches that hard. It is just a handful who can routinely dominate batters.

As for the future of baseball, you think that getting away from wood might be in the works. There is something about hearing the crack of a wooden bat though to stir excitement into a fan's soul.

Next week is my honeymoon, thus, it will be two weeks before my next post. Cheers!