Ultimately, they reflect the underlying strength or weakness of the real economy
AS the textbook says, money is a means of exchange, a unit of account and a store of value. When we discuss foreign exchange rates, we mean the value of the domestic currency against a foreign benchmark.
Since there are many such benchmarks or standards, we use the most common one, which is the US dollar. This is because the US dollar is the most widely used reserve currency, as it accounts for roughly two-thirds of global foreign exchange trading and official foreign exchange reserves.
Most people use the US dollar standard because not only is it the most convenient, it also by and large has been a good store of value, at least relative to other currencies.
If you travel as a tourist in most parts of the world, you will find that you cannot change your own currency easily, but you can easily change against the US dollar. The US dollar is the reserve currency standard because it meets all the conditions of international unit of account, means of payment and store of value.
But with the US running unsustainable current account deficits and a growing net foreign debt position, the US dollar faces structural depreciation, which creates growing uncertainty on a global scale.
The real problem stems from the fact that all foreign exchange rates are relative and not absolute values. Value is relative not only against real goods, but against other paper currencies.
If we use a metal as standard, such as gold, and the quantum of gold remains static as the global demand for liquidity increases, then prices will be deflationary. The gold standard was found to be too strict a disciplinarian, because if all currencies are linked to gold, you cannot run a fiscal or trade deficit without huge outflows of gold.
The advantage of using a paper currency is that the supply can be adjusted to the national or global needs. As monetarists claim, inflation is basically a monetary problem of printing too much money. Money can be printed through growing fiscal debt, growing bank credit or inflow of foreign funds.
You can print domestic money, but you can’t print foreign money. In other words, you can ask domestic people to bear the inflation tax by printing money, but the foreigner (and today locals) can run through capital outflow. They stop investing and lending money and you end up with a fiscal or currency crisis.
The bottom line is that in the long run, you cannot spend more than what you earn. Thus, when conventional economists say that flexible exchange rates help with monetary policy, they think that there is an easy way out of this problem.
Flexible exchange rates may help a little in day-to-day adjustment in prices, but ultimately, there is always the temptation to use the exchange rate to devalue your way out of the fundamental problem of spending more than you earn.
This is exactly the Greek tragedy. Greece is part of the eurozone, which uses the Maastricht Treaty rules to stop member countries from printing too much money to ensure that the euro will have stable value. The Maastricht rules draw the line of the annual fiscal deficit at not more than 3% of GDP (or gross domestic product) and total fiscal debt at 60% of GDP.
The Greeks ran a fiscal deficit of more than 12.7% deficit in 2009 and total fiscal debt is now at 120% of GDP. They hid the deficits for more than 10 years by various tricks, including using investment bankers to do swaps to hide the deficits.
In the 1990s, leading investment banks were fined in Japan for helping Japanese companies and banks hide their losses. Now they are bold enough to help governments hide their deficits.
To put it bluntly, neither fixed nor flexible exchange rates can hide the fact that if a borrower spends more than it earns, be it a company or a government, the day of reckoning will come soon.
Fixed exchange rates are a discipline – the profligacy will show up very fast. Flexible exchange rates use a weaker currency to try and earn more exports. But if the source of overspending is the government aided by loose monetary policy, then sooner or later the foreigner will stop lending or investing. You cannot jazz your way out of over-spending. Sooner or later the music must stop.
The Greeks thought that being part of the eurozone, the other Europeans would bail out Greece, so non-Greeks will help pay for their over-spending. Since Greece cannot devalue the euro by itself, then the pain of adjustment must be done on the fiscal or employment side. In other words, a fixed exchange rate ultimately forces the structural adjustment. The Europeans are asking Greece to make that adjustment as a condition for help.
We cannot think about exchange rates as only bilateral, that is, between currency A and currency B. We saw that before the Asian crisis, when East Asian currencies were mostly benchmarked against the US dollar, with some fixed and others floating. Nevertheless, each currency had some kind of parity against each other.
For example, before the crisis in 1997, the ringgit was roughly 2.5 to one US dollar, the Thai baht 25, the Filipino peso 25 and the Taiwan dollar also 25. In other words, they adjusted at roughly one or 10 to each other. This made it very convenient to do business across East Asian borders, mainly because of trade competitiveness.
Each central bank knew that if the rates moved out of line, not only against the US dollar but against the neighbours, there would be trade competitive issues.
This regional pattern of currencies “waltzing against each other” in a stable pattern unless disrupted by crisis was formed by the underlying Asian Global Supply Chain. After the Asian crisis, when most currencies floated, the same pattern emerged, because the underlying needs of the Asian Global Supply Chain forced some competitive stability between the linked exchange rates.
In sum, exchange rates ultimately reflect the underlying strength or weakness of the real economy. You can jazz up all you want through flexible rates, but ultimately if you overspend, you pay.
● Andrew Sheng is author of the book, From Asian to Global Financial Crisis.
Saturday, February 20, 2010
A welcome increase in the Fed discount rate
The short-term impact is negative, but a start has to be made towards making money more expensive
IT’S strange how markets react sometimes. The short-term, knee-jerk, downward reaction is often difficult to understand even when the long-term benefits are obvious, and events signal the start of normalisation of very unusual and adverse circumstances.
But it is likely that the stock market’s adverse reaction to the increase by the US Federal Reserve of its key discount rate by a quarter of a percentage point to 0.75% will be short-lived.
At the same time, it is also clear that stock markets may not see the kind of gains seen in 2009 when prices went up by about a half after the collapse of share prices in late 2008 following the world’s most serious financial crisis since the Great Depression of the 1930s.
Two things happened to the markets – stock prices headed south while the US dollar headed north. That is the right way to go purely from a short-term point of view and it likely reflects that although the Fed’s move was expected, it came a bit sooner than the market expected.
Higher interest rates – and this move by the Fed without a doubt presages that – mean that investors will demand a higher rate of return from their holdings. That implies that stocks and bonds will have to fall accordingly.
On the currency side, it implies that holdings of US dollar assets will soon enough get higher interest rates. Accordingly, the US dollar rose to a nine-month high against the euro.
But these are short-term effects. The trillions of US dollars that have been injected into the US and other economies and the loose monetary policies followed all imply that at some time, inflation will become a serious concern.
Easy, cheap money helps to turn an ailing economy around and boosts confidence but prolonging it can be dangerous. That the Fed sees it fit to change its stance now is positive because it must feel that the threats to the system have been largely diffused.
Even so, it is too early to pop the champagne and bring out the glasses. It’s a long walk out of the woods and the way is fraught with unseen hurdles and obstacles. The weather can change in a thrice and the path can get slippery. It calls for a lot of good, careful footwork.
For us in Malaysia, one must reasonably expect that interest rates will begin a slow climb upwards as well. The economy is recovering, the fiscal stimulus measures have bitten and growth is on the cards again.
Our economic problems were not anywhere near as serious as those in developed countries affected by the world financial crisis but we have our own set of problems and we need to work our own solutions to these – and fast.
The world does not stand still and once it sorts out its problems – and it is well on the way to doing it – it will continue its inexorable march onwards. We simply cannot afford to be left behind.
Eyes are focused on what new trick we can conjure up to bring forth a flourish of growth and opportunities to push incomes up for all of us. It will be interesting to see how much structural change will be made to the broad economy.
The march towards normalisation of the world economy, which has started, puts more pressure on us to put our house in order. Nothing less than radical change is required to make the necessary impact.
● Managing editor P. Gunasegaram believes in the old, paradoxical saying that change is the only constant or is it the only constant is change? Never mind, they mean the same.
IT’S strange how markets react sometimes. The short-term, knee-jerk, downward reaction is often difficult to understand even when the long-term benefits are obvious, and events signal the start of normalisation of very unusual and adverse circumstances.
But it is likely that the stock market’s adverse reaction to the increase by the US Federal Reserve of its key discount rate by a quarter of a percentage point to 0.75% will be short-lived.
At the same time, it is also clear that stock markets may not see the kind of gains seen in 2009 when prices went up by about a half after the collapse of share prices in late 2008 following the world’s most serious financial crisis since the Great Depression of the 1930s.
Two things happened to the markets – stock prices headed south while the US dollar headed north. That is the right way to go purely from a short-term point of view and it likely reflects that although the Fed’s move was expected, it came a bit sooner than the market expected.
Higher interest rates – and this move by the Fed without a doubt presages that – mean that investors will demand a higher rate of return from their holdings. That implies that stocks and bonds will have to fall accordingly.
On the currency side, it implies that holdings of US dollar assets will soon enough get higher interest rates. Accordingly, the US dollar rose to a nine-month high against the euro.
But these are short-term effects. The trillions of US dollars that have been injected into the US and other economies and the loose monetary policies followed all imply that at some time, inflation will become a serious concern.
Easy, cheap money helps to turn an ailing economy around and boosts confidence but prolonging it can be dangerous. That the Fed sees it fit to change its stance now is positive because it must feel that the threats to the system have been largely diffused.
Even so, it is too early to pop the champagne and bring out the glasses. It’s a long walk out of the woods and the way is fraught with unseen hurdles and obstacles. The weather can change in a thrice and the path can get slippery. It calls for a lot of good, careful footwork.
For us in Malaysia, one must reasonably expect that interest rates will begin a slow climb upwards as well. The economy is recovering, the fiscal stimulus measures have bitten and growth is on the cards again.
Our economic problems were not anywhere near as serious as those in developed countries affected by the world financial crisis but we have our own set of problems and we need to work our own solutions to these – and fast.
The world does not stand still and once it sorts out its problems – and it is well on the way to doing it – it will continue its inexorable march onwards. We simply cannot afford to be left behind.
Eyes are focused on what new trick we can conjure up to bring forth a flourish of growth and opportunities to push incomes up for all of us. It will be interesting to see how much structural change will be made to the broad economy.
The march towards normalisation of the world economy, which has started, puts more pressure on us to put our house in order. Nothing less than radical change is required to make the necessary impact.
● Managing editor P. Gunasegaram believes in the old, paradoxical saying that change is the only constant or is it the only constant is change? Never mind, they mean the same.
Thursday, February 18, 2010
Building Fit Minds Under Stress
ScienceDaily (Feb. 17, 2010) — A University of Pennsylvania-led study in which training was provided to a high-stress U.S. military group preparing for deployment to Iraq has demonstrated a positive link between mindfulness training, or MT, and improvements in mood and working memory. Mindfulness is the ability to be aware and attentive of the present moment without emotional reactivity or volatility.
To study the protective effects of mindfulness training on psychological health in individuals about to experience extreme stress, cognitive neuroscientist Amishi Jha of the Department of Psychology and Center for Cognitive Neuroscience at Penn and Elizabeth A. Stanley of Georgetown University provided mindfulness training for the first time to U.S. Marines before deployment. Jha and her research team investigated working memory capacity and affective experience in individuals participating in a training program developed and delivered by Stanley, a former U.S. Army officer and security-studies professor with extensive experience in mindfulness techniques.
The program, called Mindfulness-based Mind Fitness Training (MMFT™), aims to cultivate greater psychological resilience or "mental armor" by bolstering mindfulness.
The program covered topics of central relevance to the Marines, such as integrating skills to manage stress reactions, increase their resilience to future stressors and improve their unit's mission effectiveness. Thus, the program blended mindfulness skills training with concrete applications for the operational environment and information and skills about stress, trauma and resilience in the body.
The program emphasized integrating mindfulness exercises, like focused attention on the breath and mindful movement, into pre-deployment training. These mindfulness skills were to regulate symptoms in the body and mind following an experience of extreme stress. The importance of regularly engaging in mindfulness exercises was also emphasized.
"Our findings suggest that, just as daily physical exercise leads to physical fitness, engaging in mindfulness exercises on a regular basis may improve mind-fitness," Jha said. "Working memory is an important feature of mind-fitness. Not only does it safeguard against distraction and emotional reactivity, but it also provides a mental workspace to ensure quick-and-considered decisions and action plans. Building mind-fitness with mindfulness training may help anyone who must maintain peak performance in the face of extremely stressful circumstances, from first responders, relief workers and trauma surgeons, to professional and Olympic athletes."
Study participants included two military cohorts of 48 male participants with a mean age of 25 recruited from a detachment of Marine reservists during the high-stress pre-deployment interval and provided MT to one group of 31, leaving 17 Marines in a second group without training as a control. The MT group attended an eight-week course and logged the amount of out-of-class time they spent practicing formal exercises. The effect of the course on working memory was evaluated using the Operation Span Task, whereas the impact on positive and negative affect was evaluated using the Positive and Negative Affect Schedule, or PANAS.
The Positive Affect scale reflects the extent to which a person feels enthusiastic, active and alert. The Negative Affect scale reflects unpleasant mood states, such as anger, disgust and fear. Working memory capacity degraded and negative mood increased over time in the control group. A similar pattern was observed in those who spent little time engaging in mindfulness exercises within the MMFT group. Yet, capacity increased and negative mood decreased in those with high practice time over the eight weeks.
The study findings are in line with prior research on Mindfulness Based Stress Reduction, or MBSR, programs and suggest that MMFT may provide "psychological prophylaxis," or protection from cognitive and emotional disturbances, even among high-stress cohorts such as members of the military preparing for deployment. Given the high rate of post-traumatic stress disorder and other mental-health disturbances suffered by those returning from war, providing such training prior to deployment may buffer against potential lifelong psychological illness by bolstering working memory capacity.
In the several months prior to a deployment, service members receive intensive training on mission-critical operational skills, physical training and "stress-inoculation" training to habituate them to stressors they may experience during their impending mission. They also must psychologically prepare to leave loved ones and face potentially violent and unpredictable situations during their deployment.
Persistent and intensive demands, such as those experienced during high-stress intervals, have been shown to deplete working memory capacity and lead to cognitive failures and emotional disturbances. The research team hypothesized that MMFT may mitigate these deleterious effects by bolstering working memory capacity.
The study, published in the journal Emotion and also featured in the most recent edition of Joint Force Quarterly, the advisory journal for the Joint Chiefs of Staff, was funded by the John W. Kluge Foundation and the Department of Defense.
Jha was the principal investigator on the project, and Anastasia Kiyonaga, Ling Wong and Lois Gelfand from the Department of Psychology Penn's School of Arts and Sciences comprised her research team.
Stanley is the creator of MMFT and is on the Board of Directors of the Mind Fitness Training Institute, a nonprofit 501(c)(3) established to support the delivery of MMFT.
Scientist Finds PageRank-Type Algorithm from the 1940s
Google's PageRank algorithm was developed in 1998. But a project to trace the history of such algorithms reveals an example from the 1940s.
One crucial feature of this idea is that it requires an iterative approach to constantly re-evaluate the value of a page as the importance of others varies. Iterative ranking algorithms have since become an important part of network theory.
PageRank was developed in 1998 by Google's founders Sergey Brin and Larry Page and its impact has been such that it's easy to forget that the approach was not entirely novel. Massimo Franceschet at the University of Udine in Italy points out that the idea has been successfully exploited a number of times in 20th century science, even before Brin and Page were born. Today, he presents a short history of iterative ranking algorithms and charts their evolution prior to Google's emergence.
He begins in reverse chronological order with the work of Jon Kleinberg, a computer scientist at Cornell University, who developed an almost identical approach to PageRank, just a few years earlier. Brin and Page even reference his work in their famous paper introducing PageRank.
Kleinberg called his algorithm Hypertext Induced Topic Search or HITS and it treated web pages as "hubs" and "authorities". It used the circular definition that authorities are pages that are pointed to by hubs and hubs are pages that point to authorities and requires an iterative approach to solve.
In the heady days of the dotcom boom in the late 20th century, before Google became so successful, Kleinberg's work received considerable media coverage.
Franceschet also examines the work of Gabriel Pinski and Francis Narin who developed a way of ranking journals. Their rule was that a journal is important if it is cited by other important journals. Like PageRank and HITS, this requires an iterative method to exploit the structure of links between journals to come up with a ranking.
Long before this, however, Charles H Hubbell at the University of Califronia , Santa Barbara, was analysing social networks in a similar way. In 1965, he published a technique for determining the importance of individuals based on the importance of the people who endorse them. This again has the characteristic circular definition and iterative solution. Hubbell is acknowledged by many including Kleinberg as a pioneer in iterative ranking theory.
But the big surprise is Franceschet's discovery of an even earlier forerunner to PageRank in the work of the Harvard economist Wassily Leontief. In 1941, Leontief published a paper in which he divides a country's economy into sectors that both supply and receive resources from each other, although not in equal measure. One important question is: what is the value of each sector when they are so tightly integrated? Leontief's answer was to develop an iterative method of valuing each sector based on the importance of the sectors that supply it. Sound familiar? In 1973, Leontief was awarded the Nobel Prize in economics for this work.
What's clear is that the ideas behind PageRank have a venerable history but the surprise is that they date back to at least the 1940s. It'll be interesting to see if anybody can find any similar work that predates this.
Ref:arxiv.org/abs/1002.2858: PageRank: Stand On The Shoulders Of Giants
Tuesday, February 16, 2010
Symbian 3 Smartphone Platform Released at Mobile World Congress
At the Mobile World Congress, the Symbian Foundation announces the release of the Symbian 3 platform, the first fully open-source release of the Symbian OSAt the Mobile World Congress in Barcelona, Spain, the Symbian Foundation announced the release of the Symbian 3 platform, the first fully open-source release of the Symbian OS. The Symbian Foundation made its announcement at MWC on Feb. 15, a little more than a week after the platform’s transition to an open-source license on Feb. 4.
Lee Williams, executive director of the Symbian Foundation, said in a statement:
“Symbian 3 is another huge milestone in the evolution of our platform. Now that it is fully open source, the door is open to individual contributors, device creators and third-party developer companies, as well as other organizations, to create more compelling products and services than ever before. We have enjoyed significant momentum since we completed Symbian 2, with companies including Sun, Nokia, Ixonos, Comarch and Accenture, among others, contributing to Symbian 3. We are now looking to build on this momentum and remain on course to complete Symbian 4 later this year.”
Symbian officials said Symbian is expected to be “feature complete” by the end of the first quarter of 2010 and the release will include significant usability and interface advances, faster networking, acceleration for 2D and 3D graphics in games and applications, HDMI (High-Definition Multimedia Interface) support, music store integration, an improved user interface with easier navigation and multitouch gesture support, a feature-rich Homescreen, and the ability to run even more applications simultaneously.
In a blog post about the Symbian 3 release, Ian Hutton, a member of the Technology Management team at the Symbian Foundation and chair of the organization's Feature and Roadmap Council, said:
"Symbian 3 is slated to deliver a host of improvements right across the platform, from architectural renewal in graphics and networking to significant advances in usability. The UI gets faster; connecting to the web gets easier; and potentially, you will be able to plug the whole thing into your TV and watch HD movies without a Blue-ray player. Then there’s gaming … better radio. … If I tried to walk through everything new in Symbian 3 this would turn into one pretty long post. As we already have a darn good Symbian 3 overview I’ll try to give you a flavor of what’s coming by picking out three themes: Simpler, Faster, Better."
According to Hutton, not only is the UI faster, but much easier. "Consistent rollout of a 'single tap' paradigm throughout the touch UI means no more 'tap to select, tap again to action,'" he said.
One element of improved performance is the new 2D/3D graphics architecture in Symbian 3, which takes advantage of hardware acceleration to deliver a faster and more responsive user interface, Hutton said. In addition, in the "Better" category, Hutton said the Homescreen in Symbian 3 will support multiple pages of widgets and a simple flick gesture to move between them.
Although Symbian officials said members of the Symbian community, including device creators, network operators, hardware technology providers, professional services companies and application developers, are already working with Symbian 3 and the first devices using the platform are expected to ship as early as the third quarter of 2010, the new platform comes out against greater competition than ever. Not only is Apple'siPhone a competitor to watch, but Google's Android is expected to eat into Symbian's market-leading share of the smartphone market. In addition, Microsoft's Windows Mobile, Research In Motion's BlackBerry, Palm's webOS and other platforms are vying for market share and developer mind share.
Speaking of which, the developer experience has also been greatly improved with Symbian 3, the foundation said. The Qt toolkit is preintegrated into all kits, and the runtime in Symbian 3 will run on existing devices back to S60 3.1. Also, the Web Runtime support provided in the platform remains a key part of the developer story, allowing Web developers to directly reuse their skills in HTML, CSS, JavaScript and Asynchronous JavaScript and X M L (AJAX) to create Homescreen widgets and stand-alone applications.
By: Darryl K. Taft
2010-02-16 .
Lee Williams, executive director of the Symbian Foundation, said in a statement:
“Symbian 3 is another huge milestone in the evolution of our platform. Now that it is fully open source, the door is open to individual contributors, device creators and third-party developer companies, as well as other organizations, to create more compelling products and services than ever before. We have enjoyed significant momentum since we completed Symbian 2, with companies including Sun, Nokia, Ixonos, Comarch and Accenture, among others, contributing to Symbian 3. We are now looking to build on this momentum and remain on course to complete Symbian 4 later this year.”
Symbian officials said Symbian is expected to be “feature complete” by the end of the first quarter of 2010 and the release will include significant usability and interface advances, faster networking, acceleration for 2D and 3D graphics in games and applications, HDMI (High-Definition Multimedia Interface) support, music store integration, an improved user interface with easier navigation and multitouch gesture support, a feature-rich Homescreen, and the ability to run even more applications simultaneously.
In a blog post about the Symbian 3 release, Ian Hutton, a member of the Technology Management team at the Symbian Foundation and chair of the organization's Feature and Roadmap Council, said:
"Symbian 3 is slated to deliver a host of improvements right across the platform, from architectural renewal in graphics and networking to significant advances in usability. The UI gets faster; connecting to the web gets easier; and potentially, you will be able to plug the whole thing into your TV and watch HD movies without a Blue-ray player. Then there’s gaming … better radio. … If I tried to walk through everything new in Symbian 3 this would turn into one pretty long post. As we already have a darn good Symbian 3 overview I’ll try to give you a flavor of what’s coming by picking out three themes: Simpler, Faster, Better."
According to Hutton, not only is the UI faster, but much easier. "Consistent rollout of a 'single tap' paradigm throughout the touch UI means no more 'tap to select, tap again to action,'" he said.
One element of improved performance is the new 2D/3D graphics architecture in Symbian 3, which takes advantage of hardware acceleration to deliver a faster and more responsive user interface, Hutton said. In addition, in the "Better" category, Hutton said the Homescreen in Symbian 3 will support multiple pages of widgets and a simple flick gesture to move between them.
Although Symbian officials said members of the Symbian community, including device creators, network operators, hardware technology providers, professional services companies and application developers, are already working with Symbian 3 and the first devices using the platform are expected to ship as early as the third quarter of 2010, the new platform comes out against greater competition than ever. Not only is Apple's
Speaking of which, the developer experience has also been greatly improved with Symbian 3, the foundation said. The Qt toolkit is preintegrated into all kits, and the runtime in Symbian 3 will run on existing devices back to S60 3.1. Also, the Web Runtime support provided in the platform remains a key part of the developer story, allowing Web developers to directly reuse their skills in HTML, CSS, JavaScript and Asynchronous JavaScript and X M L (AJAX) to create Homescreen widgets and stand-alone applications.
By: Darryl K. Taft
2010-02-16 .
RIM Introduces BlackBerry Enterprise Server Express
Research In Motion, maker of the BlackBerry smartphones, announces a version of its Enterprise Server aimed at cost-conscious businesses.Wireless solutions specialist and BlackBerry creator Research In Motion introduced BlackBerry Enterprise Server Express, free server software that wirelessly and securely synchronizes BlackBerry smartphones with Microsoft Exchange or Windows Small Business Server.
RIM said Enterprise Server Express software will be provided free of charge to address two key market opportunities.
First, the company argues free software offers economical advantages to small and medium-sized businesses (SMBs) that desire the security and manageability of BlackBerry Enterprise Server but don't require all of its advanced features. Second, the free software provides a cost-effective solution that enables IT departments to meet the growing demand from employees to connect their personal BlackBerry smartphones to their work e-mail.Enterprise Server Express works with Microsoft Exchange 2010, 2007 and 2003, and Microsoft Windows Small Business Server 2008 and 2003 to provide users with secure, push-based, wireless access to e-mail, calendar, contacts, notes and tasks, as well as other business applications and enterprise systems behind the firewall. RIM noted the new server software utilizes the same security architecture found in BlackBerry Enterprise Server.
With Enterprise Server Express connected to Microsoft Exchange or Microsoft Windows Small Business Server, BlackBerry smartphone users will be able to wirelessly synchronize their e-mail, calendar, contacts, notes and tasks; manage e-mail folders; search e-mail on the mail server remotely; book meetings and appointments; check availability and forward calendar attachments; set an out-of-office reply; edit Microsoft Word, Excel and PowerPoint files using Documents To Go; access files stored on the company network; and use mobile applications to access business systems behind the firewall.
"Today we are announcing an exciting new offering that further expands the market opportunity for the BlackBerry platform," said Mike Lazaridis, president and co-CEO of RIM. "In a marketplace where smartphones are becoming ubiquitous, BlackBerry Enterprise Server Express [provides] a cost-effective solution that allows companies of all sizes to support enterprise-grade mobile connectivity for all employees without compromising security or manageability."
For IT administrators, Enterprise Server Express offers the ability to run on the same physical or virtual server as the Microsoft mail server or on its own server. BlackBerry Enterprise Server Express is also certified for use with VMware ESX. The software provides more than 35 IT controls and policies, including the ability to remotely wipe a smartphone and enforce and reset passwords. Finally, the Web-based interface allows remote administration and makes it easier to install the software, connect BlackBerry smartphones and apply usage policies, the company argued.
By: Nathan Eddy
RIM said Enterprise Server Express software will be provided free of charge to address two key market opportunities.
First, the company argues free software offers economical advantages to small and medium-sized businesses (SMBs) that desire the security and manageability of BlackBerry Enterprise Server but don't require all of its advanced features. Second, the free software provides a cost-effective solution that enables IT departments to meet the growing demand from employees to connect their personal BlackBerry smartphones to their work e-mail.Enterprise Server Express works with Microsoft Exchange 2010, 2007 and 2003, and Microsoft Windows Small Business Server 2008 and 2003 to provide users with secure, push-based, wireless access to e-mail, calendar, contacts, notes and tasks, as well as other business applications and enterprise systems behind the firewall. RIM noted the new server software utilizes the same security architecture found in BlackBerry Enterprise Server.
With Enterprise Server Express connected to Microsoft Exchange or Microsoft Windows Small Business Server, BlackBerry smartphone users will be able to wirelessly synchronize their e-mail, calendar, contacts, notes and tasks; manage e-mail folders; search e-mail on the mail server remotely; book meetings and appointments; check availability and forward calendar attachments; set an out-of-office reply; edit Microsoft Word, Excel and PowerPoint files using Documents To Go; access files stored on the company network; and use mobile applications to access business systems behind the firewall.
"Today we are announcing an exciting new offering that further expands the market opportunity for the BlackBerry platform," said Mike Lazaridis, president and co-CEO of RIM. "In a marketplace where smartphones are becoming ubiquitous, BlackBerry Enterprise Server Express [provides] a cost-effective solution that allows companies of all sizes to support enterprise-grade mobile connectivity for all employees without compromising security or manageability."
For IT administrators, Enterprise Server Express offers the ability to run on the same physical or virtual server as the Microsoft mail server or on its own server. BlackBerry Enterprise Server Express is also certified for use with VMware ESX. The software provides more than 35 IT controls and policies, including the ability to remotely wipe a smartphone and enforce and reset passwords. Finally, the Web-based interface allows remote administration and makes it easier to install the software, connect BlackBerry smartphones and apply usage policies, the company argued.
By: Nathan Eddy
King of Cheez: The Internet’s Meme Maestro Turns Junk Into Gold
What most people view as a workday time-suck, Ben Huh sees as a potential gold mine.
Photo: Misha Gravenor
Photo: Misha Gravenor
The problem with drunken farm animals, though, is that they’re never quite as cute as you’d hope. “This is kind of close to animal abuse,” Huh says, pivoting in his chair in mild disgust. He’s dressed in dark blue jeans, cream-colored Warhol-replica eyeglasses, and a red T-shirt featuring a freakishly long-torsoed kitty — a nod to lolcats, one of the many Web phenomena Huh has made mainstream.
He turns to Kiki Kane, who manages new site development at Cheezburger. “A horse drinking beer is not Daily Squee,” Huh determines.
He and Kane then half-jokingly brainstorm some possible new sites that might run this somewhat unsavory image: WTFnature.com? Naturedoingitsownthing.com? The conversation quickly moves on to the recent influx of user-generated dog-humping pictures. “People submit 500 pictures of dogs humping every day!” Kane says. “There’s got to be a place for those.”
“There is,” Huh replies. “But it’s not with us.” As he later explains: “We’ve done this enough times to know that’s just a one-note joke.”
Source: Nielsen
For almost three years now, this has been Huh’s life: to pore over millions of JPEGs and YouTube clips in search of Internet memes — those absurd running gags that hatch and proliferate on the Web seemingly overnight — and figure out which of these quick-hit laughs might yield long-term profits. Since it launched, the Cheezburger Network has successfully aggregated more than 30 sites. You’ve likely visited a few of them, perhaps at the behest of an easily distracted coworker or a walrus-loving aunt. There’s Huh’s flagship site, I Can Has Cheezburger?, a vast repository of lolcat images (for the uninitiated, these are cat pictures with absurd, syntactically challenged captions). There’s GraphJam, a data-visualization blog that renders witty pop-culture musings into pie charts, Venn diagrams, and illustrated maps. The aptly named FAIL Blog — the Cheezburger Network’s most popular site, with 1.1 million visitors per month in the US — runs a seemingly infinite number of skateboard spills, nut-smacks, and hilariously misspelled signs.
Of course, Huh can’t take all of the credit for Cheezburger’s success. In fact, he owes quite a bit to the millions of anonymous Web dwellers whose work he corrals, curates, and posts. The majority of Cheezburger’s sites are, after all, extensions of ideas born on ungoverned image-board sites like 4chan or Something Awful — inside jokes that bubble up, JPEG by JPEG, into the mainstream. Lolcats, for example, are an offshoot of Caturday, a 4chan chestnut that dates back to at least 2005. FAIL is a long-running Web gag traceable to Blazing Star, a 1998 Japanese videogame that taunts players with onscreen messages like “You fail it!” Other sites, like GraphJam or the subversive motivational posters of Very Demotivational, were rough concepts until Huh figured out how to develop and package them.
Huh’s setup encourages users to submit their own lolcats or FAIL entries, ensuring a continuous supply of content. “I used to want to create memes more,” he says. “But what’s more satisfying: playing on the playground or building a playground for a bunch of people to enjoy? I’m much more the person who’d rather build it. That brings me satisfaction.”
The playground metaphor is apt: The Internet is supposed to be a great place for sharing and disseminating, which is how a joke evolves into a meme in the first place. Huh has actually been accused of being a bit of a schoolyard mooch — sponging up clever ideas that don’t belong to him (or anyone, really) and dispatching them to mainstream (read: lame) audiences for his own personal gain.
Huh doesn’t take credit for inventing lolcats or any of the other trends he has adopted and adapted. Nonetheless, he has numerous online critics who have expressed their displeasure by subjecting Huh and his wife to flame wars, denial-of-service attacks, and death threats.
Scenes from the office, clockwise from top left: scheduling a post on thatwillbuffout.com; T-shirt designs for LOLmart Shirts; sticky note idea board; brainstorming whiteboard.
Photos: Misha Gravenor
Photos: Misha Gravenor
Huh refuses to let the haters get to him. “This is all part of the game,” he says. “And if I were scared, what am I going to do? I mean, it’s the Internet. If somebody wants to come find me, somebody will.”
The Cheezburger Network headquarters is located on the second floor of a five-story office building. This afternoon the crew of 10 Cheezburger moderators — all in their early to mid-twenties — are clustered in one corner, headphones slung around their necks. The moderators spend hours drilling into the inner core of YouTube and wading through the thousands of user-uploaded photos and videos on Cheezburger’s various sites in search of one amazing thing to snap up. Every few minutes, someone cues up a warbled home-video musical performance or old videogame theme song. Huh also has 10 writers scattered around the country, some of whom are plucked directly from the meme world (Brad O’Farrell, originator of the “Keyboard Cat” meme, oversees Daily Squee).
“What are the rules for butts on This Is Photobomb?” asks a tall, bespectacled moderator named Steve Ibsen, referring to a site that collects crude and candid party pictures.
“If there’s a crack,” Kane replies, “you gotta cover it up.”
Huh is sitting just outside the windowless former server closet he now calls his office. It’s not the most august perch for a CEO, but years ago Huh learned the pitfalls of executive excess. In January 2000, after graduating from Northwestern University with a journalism degree, he founded his own analytics startup. When the Nasdaq crashed that spring, Huh was forced to close up shop. “It was an abysmal failure,” he says. “I hired too many people. I didn’t raise enough money. We didn’t actually have a product.”
Huh spent the next several years moving around the tech industry, from an Internet-radio startup to a software-installation firm. In early 2007, he and his wife started a modest pet-news blog called Itchmo. The site became a must-read for animal lovers, including Eric Nakagawa, one of the original cofounders of I Can Has Cheezburger?
Nakagawa and his partner, Kari Unebasami, had launched Cheezburger in 2007 after spotting a Something Awful image of a wide-eyed, overly excited kitty accompanied by the caption “I can has cheezburger?” They began collecting other lolcat pictures from sites like 4chan and Something Awful and installed their own lolcat builder for visitors to slap cat patois captions on their own photos.
When Nakagawa linked to an Itchmo post in May, Huh’s site was so flooded with traffic that it crashed. After corresponding with Nakagawa and Unebasami, Huh learned that Cheezburger’s traffic was exploding — and the owners were overwhelmed. “At that point, I was putting in 20 hours a day and not getting a lot of sleep,” Nakagawa says. “We were getting a few thousand pictures a day. We were a little burned out.”
Sensing that lolcats had crossed from radar-blip Web fad to full-on phenomenon, Huh decided to seize the opportunity. In August he made Nakagawa an offer over IM to buy I Can Has Cheezburger? (and its sister site called I Has a Hotdog!). He put down $10,000 of his own money, got some investors, and the deal was finalized a month later. The Cheezburger Network was born. Neither Nakagawa nor Huh would disclose the financial details, but published reports put the purchase price as high as $2 million.
By February 2008, the Cheezburger Network had launched GraphJam and Pundit Kitchen, where users could insert droll commentary onto snapshots of candidates Sarah Palin and Barack Obama. Meanwhile, Huh scoured the Internet for more material he could transform into memes. “I thought, ‘Dude, there’s so much more of this stuff — why aren’t we doing it?’” he says.
Cheezburger moderators Joe Olk and Lisa Kacerosky search YouTube and thousands of user-upload photos and videos for material.
Photos: Misha Gravenor
Photos: Misha Gravenor
Right now, the Cheezburger Network pretty much pwns the meme-aggregation marketplace, but it’s a wobbly dominion. Theoretically, anyone can set up a Tumblr account and, with an hour or so of Web surfing, create a clearinghouse for Hitler Downfall parodies. Memes can now spread more rapidly (and therefore risk flaming out just as quickly) thanks to real-time tracking sites like the Daily Meme and Know Your Meme. Which means that for Huh, the real challenge is not in figuring out what’s funny but sussing out the exact moment something will jump from image-board fringe to moms-forwarding-it ubiquity.
The tactics that Huh uses to beat out the other meme-jockeying Web sites can be a little obnoxious. Consider the case of Engrish.com. Last year, Huh tried to acquire the long-running botched-translation site, but when he and the owner couldn’t agree to terms, Huh simply set up his own site, Engrish Funny. “We’ll launch a Web site and people will be like, ‘You’re copying these guys!’” Huh says. “But they’re copying these guys, and the guys before that were copying these guys. Everything we do is some variation on the past.”
Huh has a point. The Cheezburger sites are recycling decades-old comedic constructs. The celebrity-doppelgänger site Totally Looks Like is a riff on Spy magazine’s Separated at Birth? franchise. FAIL Blog, meanwhile, has co-opted America’s Funniest Home Videos and National Lampoon’s True Facts section.
Huh has about 150 other ideas in development and about 1,000 registered domain names. He has also been talking with Hollywood producers about expanding his Cheezburger brands into television series. Nowadays, people don’t forward memes to Huh; they pitch them. Usually, he preempts them by saying that he’s probably already heard it before — and that he’s already working on it himself. “If you see a similar site in the future, it doesn’t mean we took your idea,” he says. “And if you’re OK with that, then you can tell me.” Just don’t try boinking-pooches.com. That’s a guaranteed FAIL.
Source: Contributing editor Brian Raftery (brian raftery@gmail.com) wrote about B-movie production house Asylum in issue 18.01.
EU's Financial Woes
EU's Financial Woes
Sovereign debt crisis to derail world growth?
THE sovereign debt crisis contagion is spreading in Southern Europe (see charts), from Greece to Portugal, Spain and Italy, where government debts and budget deficits are high.Investors have sold government bonds in those countries as perceived default risks have risen.
This has resulted in the rise in the yields of government bonds resulting in higher borrowing costs for the government and private sector as loans are often tied to the risk free rate of government bonds.
Countries that faced sovereign debt crisis earlier, like Iceland, Ireland, Hungary and Latvia, had to reduce their budget deficits by raising taxes and cutting government spending, resulting in economies going into recessions.
For example, austerity measures in Ireland have resulted in the economy shrinking by almost 12% in the last two years.
Unfortunately, those countries in the eurozone cannot print money like the US, UK and Japan to finance their deficits through the monetisation of debt as they have given up control of their monetary policies to the European Central Bank.
Leaving the eurozone and devaluing their currencies will likely lead to an Argentinian-style loss in confidence and massive fund outflows.
Large budget deficits were the cause of the problems faced by these European countries but still they are likely to resist ceding control over matters like government spending and taxation to the European Union authorities.
As the European monetary union is facing tremendous stress, can the currency union survive where there is no fiscal union or discipline?
Austerity measures are being forced on these Southern European countries at a time when economic conditions are terrible.
For example, following the collapse of the Spanish property bubble which decimated the construction and real estate industry, Spanish unemployment has exceeded four million, representing an unemployment rate of close to 20%.
Cutting Spanish government spending to reduce its 11.4% budget deficit as a percentage of gross domestic product can only worsen unemployment.
The downgrading of the sovereign debts of Southern European countries is also fuelling the contagion and capital flight.
The sovereign rating of Japan, with an extremely high debt to GDP of close to 200%, is at risk with S&P placing a negative outlook on Japan’s double A sovereign credit rating.
Strangely, these agencies have continued to maintain the triple A ratings of the US and UK, even though their budget deficits are very high, estimated at US$1.6 trillion of 10.6% of GDP for the US.
This is despite the fact that the US unlike Japan cannot rely on domestic savings to fund its borrowings. But then, these were the same agencies that maintained AIG’s triple A rating even when it was guaranteeing large amounts of risky subprime loans.
Even the US is facing constraints on the size of its budget deficits as a popular revolt against large deficits are being organised and the loss of the 60-vote Democratic majority in the Senate means that Republicans can now block spending bills.
The world is depending on fiscal stimulus to sustain growth as highly geared Western consumers are still deleveraging and are reluctant to borrow more despite low interest rates.
If enough countries withdraw fiscal stimulus because of the sovereign debt contagion, world growth will stall, plunging the world into a double dip recession.
This possibility cannot be fully discounted as the GDP of all the Southern and Eastern European countries combined is estimated by the International Monetary Fund (IMF) at US$9.1 trillion in 2008, more than twice the size of the Chinese economy.
Already, it would appear that government spending cuts and loss in confidence in the euro has permanently damaged European growth for the next two years.
The EU’s economy, with an estimated GDP of US$18.4 trillion in 2008 is larger than the US economy at US$14.4 trillion.
US and Chinese manufacturing will also be adversely impacted as demand from Europe will decline and a weaker Euro makes US and Chinese exports less competitive.
To prevent this contagion from spreading, the European central bank would have to guarantee the sovereign debt of these affected countries.
Excessive speculation should be curbed to prevent a downward spiral like what happened during the Asian crisis.
Speculative attacks during the Asian crisis ended when speculators who short sold were killed off by the superior buying power of the Chinese and Hong Kong authorities which also changed rules on short selling.
Presumably, Germany and France with the support of other major powers (US, China and the UK) could do the same. That of course would be premised on Greece cutting its budget deficit; probably a foregone conclusion as funding problems will curb spending.
Sounds familiar? The similarities to the Asian financial crisis are as follows: austerity measures were imposed when the economy was hurting and the flight of short-term funds resulted in higher interest rates.
Like Tun Mahathir Mohamad, the Greek prime minister is already blaming unscrupulous hedge funds and speculators for its predicament.
A withdrawal of fiscal stimulus would slow world growth and increase the chance of a double dip recession.
Corporate earnings and the stock market are likely to be adversely impacted. On the flipside, a weak economy will allow interest rates to remain low for a longer time.
The inability to fund fiscal stimulus through government debt may also increase the temptation to print money to finance the deficits, especially if deflationary pressures arise from a slower growth (exacerbated by lower commodity prices and excess capacity).
If such a downturn is moderate, it could lead to better fiscal discipline and a more rapid private sector adjustment; Asian countries hit by the Asian financial crisis (including Malaysia) have weathered the current downturn better as their financial systems are more stable now, budget deficits can be funded by domestic savings, asset bubbles have been better contained and borrowings are funded mainly by domestic sources.
In an environment of weak growth and low interest rates, stick to defensive sectors with steady demand like healthcare (rubber glove companies), utilities, tobacco and telecommunications.
A high dividend yield should also be welcomed as interest rates are likely to remain low due to slower growth and deflationary pressure.
Source: Starbiz ● Choong Khuat Hock, head of research at Kumpulan Sentiasa Cemerlang Sdn Bhd.
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