We're Angry! About....Stuff!

Old-Timey Protests

Current Protests

Let me be clear. I'm all for a good social uprising. Change the established practice! Shake things up! Push for critical social innovation! Show (fill in the blank organization) that they're doing something that makes you cranky! That being said, I'm a bit embarrassed about how low our forms of protest have fallen. 

I know. Things are pretty messed up right now. Esquire actually did a great about the value of the dollar, just one of the many things that people aren't particularly thrilled about right now, in their most recent issue. I highly recommend it. Back to protests. The Economist noted our (global, collective) failure to focus on our protest goals in a recent article titled "Not Quite Together". They made some good points about the global protesting spirit is alive in kicking (Occupy Wall Street in New York, austerity ruckus in Greece, unemployment marches in Spain, etc.), but that a lot of it is misguided. For the most poignant example, I don't think we need to look much farther than our own country though...So, for example:

• Movement: Occupy Wall Street- Although initially jump started as a protest of the 99% against the 1%, this particular movement has generated a lot of publicity, and because of its high visibility, has made very clear some of the problems in this outraged group. Even though this movement bills itself as the majority finally taking back what is due to them, underneath the Facebook groups and twittering, this is really not that different than the austerity movements in Greece. The American economy is turmoil. Undoubtedly, these banks hold a lot of that responsibility. The American public pays the price for their poor decisions. The "why do I have to pay for this?" mentality begins. Anger ensues.
• Interesting Facts:  
• There have actually been studies on the science and mathematics behind protests. For example, in a sample of European protests between 1980 and 1995, austerity-focused protests attracted over 700K people on average, whereas other protests attract less. Anti-war protests for example, only attract 15K on average
• Protests, especially the ones related to spending cuts during times of increasing expenditure, have no party preference. In another study of protests in Latin America between 1937 and 1995, researchers found that tight link cuts and instability that cuts across democracies and autocracies alike
• Researchers also found that a 1% increase in GDP results in a reduction of estimated protests per year by about 0.4 events (roughly half the impact of a similar increase in the government budget)
• What went wrong?  
• Misinformation and scattered agendas. It's supposed to be about the 99% against the 1%. In fact, it is clear based on financial data that approximately 58% of the real economic growth in America of the past 30 years was captured by the top 1% of earners. For obvious reasons, societies with a larger income disparity generally have more civil unrest. However, research on wage growth in the United States questions whether this polarization is really based on wealth capture or if it really is due to the dramatic segmentation of the labor force into high and low-skill segments (cannibalizing the middle-skill/middle-wage positions), which would result in social discomfort
• Most financial firms in New York have moved to midtown long ago, and although it is a symbolic space, the sheer numbers have begun to cause serious concerns for sanitation and public safety. As the signs above show, these protesters believe they're united, but its become a farce of itself- ultimately more trendy than impactful. The demographic in attendance is pretty young (mostly around college age/young professionals), but relatively well educated (most hold college degrees). By itself that makes me wonder-- how 'majority' can you be if you were educated at one of the best universities in the nation? (NYU, Columbia, etc are in the area) or if you have the means to be living near Manhattan? 
• Early splintering. We started with the chant of "I am the 99%", but then...wait... we got really mathematical about it and came up with some 53%-ers too. Although this is really just the conservative retort to the protest, some of their points do resonate (To feed my family, I'm working or trying to find a job, not camping out in Manhattan). I can't admit that I support them wholeheartedly though. I'm from California after all

 So. I'm torn. I keep thinking about a saying I heard in college, "If you're young and conservative, you have no heart. If you're old and liberal, you have no brain". The point is that your views will change as you move through your life depending on where you are socioeconomically. I know that I make more than your average 25 year-old. I know a lot of people who are struggling through this hard economic time, so I give thanks every day that I have a job and that I can save money for a rainy day. I live frugally and I believe in postponing current happiness for future security (that one is actually probably more cultural). I'm fiscally conservative and am a crazy savings account-er. But I still feel the need to support this protest. The financial system failed Americans. But many Americans also tried to "outsmart" the financial system by living outside their means. They're both at fault, but to fix this mess, I just have to think that there must be a better (more effective) way.

Too Big To Be Popular

Suffice it to say that Bank of America has had a rough go this year. I know, I know....all of us have had a rough couple years, and the FS industry will continue to feel it the worst, but I feel like our poor friends at BofA has had it particularly hard. After the financial melt down, they were met with throngs of angry consumers and a buffet of high visibility, embarrassing issues. In late August, they seemed to be entering an upswing when Warren Buffet invested $5M into the company, but was immediately thrown to a new round of questioning when the Wall Street Journal published that they might be taken over by JP Morgan. (Not that Buffet investing is particularly surprising since he's basically gone on record to say "Who doesn't like a fire sale? They're practically giving it away! Normal people buy extra socks when there's a sale, Buffet buys into giant financial companies. Different strokes I guess.) After multiple reports of behind-doors meetings between Geithner and JP Morgan's CEO (Jamie Dimon) and claims that this sort of transaction would be prohibited because BofA and JP Morgan would cumulatively control too much of the financial sector, reports just stopped coming, and the world began to focus more on BofA's embarrassing problems.

Most likely in an attempt to get their balance sheet back in order, Bank of America also announced in August that it would selling off its international international credit card businesses. In doing so, Bank of America was pretty much cannibalized by other companies, with TD Bank (Canada), Apollo Capital Management (Spain) and Barclays dismantled their existing portfolios and subsumed them into existing operations. After earnings calls or what people are now just calling "results", it was revealed that Bank of America finally fell behind JP Morgan (ouch) in being the largest American bank as measured by assets. To add insult to injury, this happened despite the fact that JP Morgan faced its own decreases in revenue this year. Bank of America did manage to sneak in some upbeat messages during their results calls, but these points were later revealed to be inflated by a more "creative" interpretation of one-time items and releases of loan-loss reserves. Buffet also went on record to say that Bank of America was "not properly integrating their systems or cutting unnecessary branches" at the same time that Bank of America announced that they planned to cut approximately 30,000 jobs over the next few years. Whether the intent was to justify or critique is questionable.

Finally, as one of the first banks to announce the debit card fee, Bank of America was the last major bank to eat their words and cancel their plans for this fee. (I mean, who can blame them? People were setting their cards on fire in protest in front of their offices...seems a bit extreme in this day and age when there's world hunger, etc. But hey! Find your cause and go for it. For the record though, the fee was $5/purchase, so it probably would've added up pretty quickly.) All in all, it is definitely hard to feel bad for these guys after all of this mess, but it could be important to keep in mind that we can't punish them forever. Yes, they definitely made choices in the management of their assets, but at the end of the day, the money to repair the damage they've done has to come from somewhere. They should take a more gradual approach to repairing (no $5 fees) but they will inevitably need to raise revenue if they want things ever to stabilize. That will be something that both Bank of America and American consumers will need to come to terms with.

A Tale of Three Islands...and 7 BILLION Mouths

I've been trying to catch up on my Economists recently, and I came across an article today called "A Tale of Three Islands" (pretty good coincidence actually) about how the world population is estimated to welcome its 7 billionth person to the world today. I guess there's nothing scarier than an exploding world population? Trick or treat?

So apparently the story goes something like this.... Back in 1968, a book entitled "Stand on Zanzibar" was published by a man named John Brunner. This was witty (I'm sure he took forever to think about this) because it was estimated that in 1968, the population of the world (3.5M) could stand shoulder to shoulder and fit onto the Isle of Man (572 square kms in the Irish sea). However, being the forward looking man that he was, John also estimated that by 2010, when the population would have reached 7 billion, we would need a bigger island. Hence, Zanzibar, (1,554 square kms off the coast of Africa). Although there are conflicting reports (the American Census Bureau reports that the 7 billionth person won't be born until March 2012), the United Nations population division estimates that the world will reach its 7 billionth person today! Hooray!

So a lot of people are probably freaking out at this point, imagining doom and gloom...Overpopulation leads to disease right? Wide-spread famine? Wars over resources? General discomfort because it means that many more people will sweat on you on the bus in the summer? Well "Nay!" says the Economist. They actually bring up a couple of very interesting points.

1. The rate of growth is actually declining. Contrary to popular belief, almost half of the world's population (3.2B) lives in countries with a fertility rate of 2.1 or less (that's the magical replacement number that we've identified and China got a little overexcited about...Think about it....think about it. Yup, it's because that's how many people it takes to replace your mom and your dad. Morbid but true). Worldwide, the fertility rate is 2.45, with most of weight being placed in Africa (4.64) and Oceania (aka Australia and related islands, with 2.49)
2. Pollution is very concentrated among a select few. And by a select few I mean mostly the U.S., Australia and China. Surprise! Most of the world's population growth in the next 20 years will occur in countries that make the smallest impact on the climate. While global pollution is more affected by economic growth as countries become more energy intensive, currently, most pollution occurs in U.S., Australia and China
3. But what about food? Well actually, this is one thing that population does impact, but improvements in farming could keep up with population...The argument here is that if we increased output by two-thirds, we would be in the clear. The Economist cites that between 1970-2010 we increased by much more than this, so how hard could it be?

So here's where I land...I know that population explosion is going to be much more gradual and probably less catastrophic than the sensationalist journalists would like me to believe, but I just can't buy this. Okay I buy that population rate is declining, but by absolute numbers (ah-ha! GMAT studying was good for something), 7 billion is more than 6 billion. Period. And you know what happens when there's more population? Countries have more manpower. You know what happens then? Crazy things. Demand for basic goods goes up, demand for employment increases, a middle class develops, before you know it, you might even have a developing society. And that's when the pollution comes in.
Alright so the food issue. Everyone wants it, usually every day. Although we could improve farming techniques to produce more food, you usually need more land to do that. Going back to my original theory that 7 billion is greater than 6 billion, this could be a problem, because people also take up space, leaving less room for farming. Even The Economist concedes that "The growth in agricultural yields seems to be slowing down. There is little new farmland available. Water shortages are chronic and fertilizers are over-used. All these-plus the yield-reductions that may come from climate change, and wastefulness in getting food to markets- mean that the big problems are to do with supply, not demand". Take that The Economist. FACE.

Bottom line? Population growth is pretty scary. But it's not really exploding. It's more of a slow expansion- the viscosity is different. Visually, think about is more like honey in a saucepan than the aftermath of stars colliding. Is it still scary though? Yes. Happy Halloween! (PS- Stars colliding is also a very scary, real thing that should stay in your mind if you plan on living for a few thousand more years because you'll get radiated to death)

The Kindle FIRE

How cool does that sound? Some marketing company somewhere made millions for their ingenious re-branding of the Kindle. They could have gone the lazy way and just called it "The Kindle 2", "The Kindle II" if they were feeling exotic or maybe "The Kindle Deux" if they were feeling pretentious and vaguely European. Anywho- I know that by now the Kindle Fire is old news and, some claim, a copy cat. They announced it almost a full month ago now, and even though devices aren't scheduled to start shipping until November 15th, you can certainly go and purchase one so that you can have one shipped to you immediately.

There are a couple of things that intrigue me about The Kindle Fire (capitalized just like that please, or, if you're feeling really caught up in the Amazon spirit, The Kindle FIRE).

What We Know: Magazines are actually charging MORE on the Kindle Fire for electronic copies than for physical, print copies. Some magazines, like The New Yorker, will be $60/year!
Why It's Interesting: Up until now, everyone had assumed that print media was going the way of the dinosaur, and that change was occurring so slowly in that industry that hose media companies wouldn't know what hit 'em until it was too late. Slow to innovate, slow to adapt. But, the magazines have impressed me with their business strategery-- in the new pricing model, they win if consumers decide to follow the masses and buy their media through this new-fangled thing called the internets, because their profit margins will sky-rocket! Their customers are paying more for a product that actually costs them less to produce. For those consumers who need their fix of Vanity Fair but are deterred by paying slightly higher prices, they'll be driven toward physical, print media-- buying the magazines a little bit of time as they downscale their print production facilities and migrate toward ....the future. Let's not underestimate these print media guys-- they know that it's time to get with the program, this move is not a desperate attempt to stay relevant, it's a strategy where they're trying to play two moves ahead--softening the blow of those moving away to print media, while also corralling customers into thinking physical media is relevant so that they can buy a bit of time to migrate. Genius.

What We Know: At $199, it's dramatically cheaper than the cheapest possible iPad ($499)
Why It's Interesting: Amazon assumes that any money is loses on hardware purchase costs will be made up through the purchase of software, which users must purchase through their channels (books through the Amazon E-Book Store for Kindle, music through their mp3 music store, streaming movies through the Amazon Prime store). It's interesting that the Kindle is seen as the iPad competitor, because the comparison here in unbeatable-- in the same way that Apple has drawn hurrahs and disgruntled mumbles because of its "walled garden" approach (if you use Apple products, you only use Apple products--iTunes, iPad, iPhone, Apple TV, etc.), Amazon is following the exact same methods. Albeit the Amazon approach is more focused on the software component, the strategy is strikingly similar.

What We Know: Amazon uses a customized, proprietary "Silk Browser", which, because of its cloud-based nature, tracks everything. And we mean everything.
Why It's Interesting: So remember awhile back, when I was wondering who would win in the battle of the giants between Google and Amazon? Well it looks like Amazon is really stepping up its game. By using this Silk browser, which tracks not only which websites its users are going to, but how frequently and how much they're buying along with allowing Amazon to instantly perform price comparisons across products, Amazon has positioned itself to gather more information on its customers from a single software application than any previous player. Undoubtedly, that data needs to go somewhere. Google better watch out.

A lot of additional chatter has happened to figure out if the Fire would ever be a candidate for the mobile payments hardware rush. I'm a bit torn so far. On one hand, the Fire is linked with Amazon, which has been integrated with Amazon's checkout, which was kind of groundbreaking in its offer of phrase-based secure check out. On the other hand, the Fire feels like a consumer device out and out-- I find it hard to think that a merchant could convert it into a mobile terminal. I will need to see if any additional work is done to secure the device, so time will tell!

Until then though.... the Kindle could be the next product that is en fuego! (Sorry, I couldn't help myself.)

Feminine My$tique

I read a really interesting article today in the New York Times on how people perceive women with make-up on. Shockingly (this is sarcasm) they found that women who have more make-up on are perceived as more competent, better at their jobs and friendlier than those who do not. As a woman who is usually so sleepy in the morning that I consider it a success if I properly brush my hair, this makes me sad.

But this brings me to a bigger point- there seem to be two basic sides of this argument if you're a woman- those who find sexual appeal just another tool in a female's arsenal in the race to get ahead OR that the idea of using make-up to get ahead makes a mockery of women's lib and that any one who supports that must be a misogynistic pig.

I feel as though there must be a happy medium. I agree that looking presentable is important, especially if your everyday work revolves around customer-facing tasks. However, I'm not about to whip out my entire make up toolbox in the hopes that I would get an extra bonus this year. This whole conundrum does make me wonder though, what does it say about our society that this is even a legitimate thing to feature (and argue in favor of women wearing make up to work) in the New York Times?

Not With a Bang But A Whimper

So one of my favorite poets...probably one of my favorite artists....ever is T.S. Eliot. My favorite piece of his is The Four Quartets, but one of his more famous works is The Hollow Men. The Hollow Men is mostly about death, but its famous last sentences (probably more familiar to you from your high school lit days) goes a little like this:

Here we go round the prickly pear
Prickly pear prickly pear
Here we go round the prickly pear
At five o'clock in the morning.
Between the idea
And the reality
Between the motion
And the act
Falls the Shadow
                                        For Thine is the Kingdom
Between the conception
And the creation
Between the emotion
And the response
Falls the Shadow
                                                    Life is very long
Between the desire
And the spasm
Between the potency
And the existence
Between the essence
And the descent
Falls the Shadow
                                        For Thine is the Kingdom
For Thine is
Life is
For Thine is the

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

Don't get turned off by the weird references and children's nursery rhymes. I remember when we discussed this, back in high school, everyone argued that the poem was depressing, that T. S. Eliot was obsessed with death. It was true he probably wasn't in the best state of mind... his marriage was having its swan song at the time, but I made the argument then, and continue to make the argument now that his piece was really a warning about not fully enjoying life.


I thought of this poem the other day, when I learned about Steve Jobs. He was, undeniably, an amazing man. People thought that he was almost immortal the way that he carried himself- he was larger than life- the messenger of dreaming big, the poster child for innovation...He brought us iProducts damnit!

After the news of his death slowly began to infiltrate the web, I noticed a steady stream of commentary articles also flood the internet, questioning whether Apple would be able to survive without him, whether innovation itself would stall.I, as a member of the next generation of dreamers, schemers and innovators, am insulted, but I'll save that for another post. But overall, my reaction is: really? Really? You think that now that sans Steve Jobs, the world will fall into a innovation stall? Maybe even begin to devolve so that by 2025 we're chiseling on stone again? C'mon!

Even Steve Jobs would be angry about that insinuation. Jobs didn't give us innovation- he gave us reasons to dream. He gave us proof that sometimes the impossible is possible, that sometimes the unthinkable is what everyone had been thinking all along, and they just didn't know it. I think that, in general as a species, people are prone to be ego-centric. Things that affect them deeply must affect everything in profound, impactful ways! But the truth is, the exact opposite is true. The more meaningful something is to you, personally, the less likely it is to mean proportionally the same "amount of important" to someone else. Let me give you an example (a very morbid example). After 9/11, thousands of families banned together, and in an unprecedented time of uncertainty and loss, America witnessed that people, deep down, were good people. Everyone agrees that 9/11 has changed all of our lives in unimaginable ways. However, that little girl who lost her father on 9/11, really remembers 9/11 second to to the fact that she has lost her father. But, to an outsider, who knew nothing about Mr. Smith, little Jane's father, who doesn't know what he/she doesn't know- he/she doesn't know the type of man he was or the things they did together. So, in the grand scheme of things, mostly unaffected by the loss of Mr. Smith.

So please. Let's stop trivializing the important things and overemphasizing the (relatively) little things. Steve Jobs- the man- is gone, but the important things that Steve Jobs stood for- the essence of him, will never be gone. Although it is a sad thing to say good-bye to a great man, I think he would be insulted if we accepted that the end of innovation itself is here. That would mean that his life was a singularity- an existence that didn't result in future gains or have any self-sustaining properties. I think he deserves a bit more than that. Steve Jobs' death is not the end. It's the beginning. It's a warning against not fully living life.

...And Here Comes the Lashback

So after all of the exciting news about mobile payments stuff happening all over the place, there seems to have been a mini-lashback that happened this week with multiple sources all proclaiming the evils of mobile payments.

A recent study from Juniper Research indicated that in NFC mobile payments alone, there will be about ~$110 billion in opportunity because by 2014, they claim, one in every six mobile subscribers will have an NFC-enabled device. This latest forecasts basically amounts to at least 20% of the smartphones by 2014 supporting NFC, which equivalates (that's not a word, but it should be) to ~300 million phones.

Enter the doomsday seekers. An article was featured in NetworkWorld this week, entitled "Mobile Payments: Don't Buy Into It".In this article, they claim that security is their main issue, and that mobile payments "are a disaster waiting to happen". Moreover, they claim that from a merchant perspective, encouraging more people to use essentially what amounts to a credit/debit card isn't in the merchant's best interest because of interchange fees. As for evidence, they claim that hacking is now done by "organized gangs" and that Google's Android platform is particularly vulnerable due to the open source nature of their OS, they have less control over their platform than say Apple and the iOS. They also go on to site the dangers of downloading apps that may or may not be fully vetted for security/ apps that are falsely marketed as payment apps that actually aren't. Not buying their article- seems too fluffy to convince me.

MSN Money posted an article this week called "Mobile Payments: Convenience at a Cost?". In this article, they claim that there are a lot of risks that come along with the "magic" of mobile payments, only one of which is the very nascent stage that we are currently in with controlling/securitizing the NFC technology. They even brought up a Consumers Union report. Okay, I'm half-way convinced.

SFGate reprinted an article from Neural Technologies where they claim that "Mobile Payments- Fraud Waiting to Happen". (I would like to share that I am instantly skeptical of any source that can't properly use verbs in titles.) After the redirect, it takes you to their website where they ask you to give your information to request a "free (no obligation) copy of the report". Their page is filled with marketing information for their top of the line fraud management services. Not convinced.

Seems like a lot of people just wanting attention by saying something to incentivize outrage. Mobile payments does have some drawbacks, security is definitely going to be one of them, but why would you publish fluffy pieces just for web traffic? Bah! Waste of time...

In my mind, security will definitely be a concern because although there are PCI standards for processing, we are at the very beginning stages of some of these new technologies. Similar to any major invention (the car, mainstream drugs, the internet, etc.) the technology came first, and we didn't know what we didn't know- so the laws, the restrictions and the limits were created later. Similarly, no one fully knows yet what the value and the opportunities are for technologies like NFC, QR codes, radio waves and sound-based communication methods (no seriously, there is a way for some devices to emit high pitched beeps to communicate with a receiving device) or even light based methods (replacing electrons in computer processing with photons that can be encoded through different patterns or colors to "hold" more information-see University of Bristol new research). And, although it makes everyone uneasy, we won't know until we actually push those pilots out there. The good thing is, the industry is pretty good about hedging their bets by testing with internal hackers in cases like these because they don't want anything deterring them from making money! So, I rest (a bit) easier knowing that any new technologies I adopt have been tested as best as possible, and that any potential hacker is only a few hours ahead of an internal hacker at my favorite mega issuers/ mega banks.