Change labor data
Stop unneeded adjustments
Use the raw numbers
Stop unneeded adjustments
Use the raw numbers
Saturday, July 05, 2014
The Trustworthiness Of BLS JOLTS Data
Understanding the US economy requires access to good data. It's temping to rely on the BLS Job Openings and Labor Turnover Survey (JOLTS) products. I am not one to give in to temptation. Analysts cannot merely assume that government data sets such as JOLTS are reliable.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
I looked at the JOLTS ten-year data set for the quit rate. That's the percentage of people who voluntarily leave a job in a given month. The quit rate bottomed out in 2009 and has been climbing ever since. A climbing quit rate should be a sign of a healthy economy as employed people trade up to better jobs. The hires rate and turnover rate within JOLTS also track this trend. The caveat is that BLS uses seasonal adjustment factors for this data, and the effects of later adjustments are summarized in BLS's revision tables. The effects are typically small but they will matter in some sectors where employment forecasts matter. Retailers who hire seasonally should be very interested in whether BLS seasonal adjustment factors create positive feedback loops in their own business models.
Shadow Government Statistics has reconstructed the nation's unemployment rate without the government's birth-death assumptions and other adjustments. Using raw, unaltered numbers probably yields a more accurate understanding of the job market than using adjusted numbers. Government economists should be very concerned with keeping the trust of the business community. They can do so by jettisoning artificial adjustments from their statistical methodologies.
Friday, July 04, 2014
Spectrum And Power Are The Long Tent Poles For Wearable Tech
The wearable tech sector is the hot thing attracting venture investment now that mobile computing has pushed the social media revolution to its apogee. The FashTechSF event I blogged about is just the beginning. Expect an onslaught of wearable startups clambering into overpriced San Francisco co-working spaces. The ones that successfully deploy products must design for the two "long poles in the tent:" spectrum management and power management.
Wearables must be confined to some predetermined part of the telecom spectrum. Anyone who has ever worked in telecommunications knows that bandwidth is large but finite. The FCC periodically auctions off parts of the electromagnetic spectrum that the government does not need to use. Technologies that compress transmissions similarly make economical use of the airwaves. The plethora of wearable gadgets that are about to hit Silicon Valley technology showcases need to design for spectrum allocations that are going to get very crowded. Devices that do not adhere to wireless industry standards will face compatibility problems that frustrate consumers. Your digitally enhanced shirts and socks won't perform if they can't communicate with your smartphone. They'll be even less useful if other people's smart clothing jams your smartphone's signal on the street. The IEEE Communications Society publishes its Transactions on Wireless Communications covering this very important topic.
Startups pushing wearables must optimize their devices power management in an era when Li-Ion batteries are built into small systems. These batteries need to be rechargeable because the early adopters who will buy wearables first won't settle for the inconvenience of changing batteries. The Wireless Power Consortium is driving the adoption of the Qi standard for recharging. Wearable tech engineers need to know about Qi. Note that IEEE is developing a standard for wireless charging with an initial focus on inductive coupling.
The Open Wearable Computing Group tracks emerging standards in this sector. It is too early to tell which standards in spectrum and power will win broad adoption. The wearable products that sell strongly and are compatible with leading smartphone OSs (iOS and Droid) will have the luxury of setting the early standard. That's how VHS won the early VCR wars over Betamax. Apple and Google need to hold wearable hackathons so they can attract solutions fitting their mobile platforms' existing spectrum and power configurations. Winning in wearable innovation will be about more than pushing over-the-air software updates from the cloud to smartphones. The winning products will be designed to fit hardware standards that won't pose transmission conflicts or power budget shortfalls.
Wearables must be confined to some predetermined part of the telecom spectrum. Anyone who has ever worked in telecommunications knows that bandwidth is large but finite. The FCC periodically auctions off parts of the electromagnetic spectrum that the government does not need to use. Technologies that compress transmissions similarly make economical use of the airwaves. The plethora of wearable gadgets that are about to hit Silicon Valley technology showcases need to design for spectrum allocations that are going to get very crowded. Devices that do not adhere to wireless industry standards will face compatibility problems that frustrate consumers. Your digitally enhanced shirts and socks won't perform if they can't communicate with your smartphone. They'll be even less useful if other people's smart clothing jams your smartphone's signal on the street. The IEEE Communications Society publishes its Transactions on Wireless Communications covering this very important topic.
Startups pushing wearables must optimize their devices power management in an era when Li-Ion batteries are built into small systems. These batteries need to be rechargeable because the early adopters who will buy wearables first won't settle for the inconvenience of changing batteries. The Wireless Power Consortium is driving the adoption of the Qi standard for recharging. Wearable tech engineers need to know about Qi. Note that IEEE is developing a standard for wireless charging with an initial focus on inductive coupling.
The Open Wearable Computing Group tracks emerging standards in this sector. It is too early to tell which standards in spectrum and power will win broad adoption. The wearable products that sell strongly and are compatible with leading smartphone OSs (iOS and Droid) will have the luxury of setting the early standard. That's how VHS won the early VCR wars over Betamax. Apple and Google need to hold wearable hackathons so they can attract solutions fitting their mobile platforms' existing spectrum and power configurations. Winning in wearable innovation will be about more than pushing over-the-air software updates from the cloud to smartphones. The winning products will be designed to fit hardware standards that won't pose transmission conflicts or power budget shortfalls.
Thursday, July 03, 2014
Alfidi Capital Sees FashTechSF's Wearable Technology In June 2014
I attended FashTechSF's Wearable Technology in Fashion exhibit last week in SoMa. I don't normally cover the fashion sector of the economy but my attendance at the iFabbo Conference in 2013 broke new ground in this scene. The most fashionable people in town just can't get enough of me.
Startups with wearable tech goods presented in the open space at Wearable World Labs in conjunction with their Wearable Wednesdays program. The tech on display was pretty cunning. I can see instant facial image manipulation finding a home on cosmetic counters and in reconstructive surgeons' clinics. The athletic wearables will have to compete against the plethora of smart watches about to hit the market. I suspect the non-watch wearables that win will look more like jewelry than tech gadgets, because people (especially women) want to show off their fashion sense with accessories.
My analysis must be so darn sharp that even the models promoting the startups find themselves drawn to me. Here's proof that these models worship yours truly, Anthony Alfidi.
If you want more proof, here it comes. These models are all over the tech scene but they always make time for a photo with the Greatest Man Who Ever Lived (ahem, that's me) whenever I show up to grace an event with my presence.
See, I told you so. A lot of the booth babes at these types of tech events come from Models In Tech. Startups angling for attention hire these gals to prowl trade shows and exhibit spaces on their behalf. I wish I had thought of this totally awesome concept. I'm kicking myself for not getting ahead of this wonderful trend. I'll just have to play catch-up as much as possible. Ladies, I have plenty of cards to hand out. Contact me for the one and only Alfidi Capital experience, if you know what I mean.
I posed for a QuickeeCam shot with an appropriate beverage in hand. These instant photo things sure are the new-fangled way to make ordinary people feel special. I have enough ego for several hundred ordinary mortals and others are welcome to stroke it if they like. I only take these photos so the attractive ladies on hand can swoon over my manly, handsome visage. That's the magnanimous service I perform for humanity. I can't help it if women are overwhelmed.
I listened attentively to the panel of tech people who shared their wearable insights. I don't need to paraphrase their comments because I've got a bunch of original stuff to say. Prepare yourselves for the wisdom of Alfidi Capital. Wearables matter because they integrate directly into human lifestyles. The smartphone is an interface that requires conscious use. Wearables remove the cognition barrier, liberating us from thinking. I can afford to be cynical because I haven't bought any wearable tech to enhance my lifestyle. Wearable tech must be fun and easy to use. Any tech innovation that crosses the chasm to mass adoption allows ordinary people to do what they've always done with less friction. People are lazy and they don't like making more effort with something new.
I am absolutely certain that the SDLC and hardware cycles of wearable tech must synch with standard fashion cycles. Retail fashion moves through four annual seasons, and each season's new styles typically have a two-year full cycle from initial design to final delivery. Geography also impacts seasonality, because California coastal winters are not the same as Midwestern winters. Wearable tech upstarts can probably learn from the automobile sector before they beta test new clothing items. Wearable enterprises will have to push over-the-air software updates to their devices, just like autos. One solution may be to keep the software in a cloud and push app updates to the smartphone or smartwatch that manages a user's wearables.
I was disappointed that one dude showed up whom I consider to be a complete phony. I first met this guy at a Mobile Monday event in 2013 and he lied to my face about his background and a local private club. He has since elbowed his way onto Silicon Valley's radar as a self-proclaimed "tech developer" but I just can't take his claimed expertise seriously. Google can't run background checks on the Glassholes who sign up to show off. The unfortunate task of calling out fakers thus falls to independent analysts like me. I'll be watching you, dude. Flying a quadcopter does not make one an expert on anything special.
I have not heard the last of the wearable tech sector and it has not heard the last of me. The attractive women draw me to wearable events but I stay to see how investors can make money in the sector. FashTechSF stays on my radar.
Startups with wearable tech goods presented in the open space at Wearable World Labs in conjunction with their Wearable Wednesdays program. The tech on display was pretty cunning. I can see instant facial image manipulation finding a home on cosmetic counters and in reconstructive surgeons' clinics. The athletic wearables will have to compete against the plethora of smart watches about to hit the market. I suspect the non-watch wearables that win will look more like jewelry than tech gadgets, because people (especially women) want to show off their fashion sense with accessories.
My analysis must be so darn sharp that even the models promoting the startups find themselves drawn to me. Here's proof that these models worship yours truly, Anthony Alfidi.
If you want more proof, here it comes. These models are all over the tech scene but they always make time for a photo with the Greatest Man Who Ever Lived (ahem, that's me) whenever I show up to grace an event with my presence.
See, I told you so. A lot of the booth babes at these types of tech events come from Models In Tech. Startups angling for attention hire these gals to prowl trade shows and exhibit spaces on their behalf. I wish I had thought of this totally awesome concept. I'm kicking myself for not getting ahead of this wonderful trend. I'll just have to play catch-up as much as possible. Ladies, I have plenty of cards to hand out. Contact me for the one and only Alfidi Capital experience, if you know what I mean.
I posed for a QuickeeCam shot with an appropriate beverage in hand. These instant photo things sure are the new-fangled way to make ordinary people feel special. I have enough ego for several hundred ordinary mortals and others are welcome to stroke it if they like. I only take these photos so the attractive ladies on hand can swoon over my manly, handsome visage. That's the magnanimous service I perform for humanity. I can't help it if women are overwhelmed.
I listened attentively to the panel of tech people who shared their wearable insights. I don't need to paraphrase their comments because I've got a bunch of original stuff to say. Prepare yourselves for the wisdom of Alfidi Capital. Wearables matter because they integrate directly into human lifestyles. The smartphone is an interface that requires conscious use. Wearables remove the cognition barrier, liberating us from thinking. I can afford to be cynical because I haven't bought any wearable tech to enhance my lifestyle. Wearable tech must be fun and easy to use. Any tech innovation that crosses the chasm to mass adoption allows ordinary people to do what they've always done with less friction. People are lazy and they don't like making more effort with something new.
I am absolutely certain that the SDLC and hardware cycles of wearable tech must synch with standard fashion cycles. Retail fashion moves through four annual seasons, and each season's new styles typically have a two-year full cycle from initial design to final delivery. Geography also impacts seasonality, because California coastal winters are not the same as Midwestern winters. Wearable tech upstarts can probably learn from the automobile sector before they beta test new clothing items. Wearable enterprises will have to push over-the-air software updates to their devices, just like autos. One solution may be to keep the software in a cloud and push app updates to the smartphone or smartwatch that manages a user's wearables.
I was disappointed that one dude showed up whom I consider to be a complete phony. I first met this guy at a Mobile Monday event in 2013 and he lied to my face about his background and a local private club. He has since elbowed his way onto Silicon Valley's radar as a self-proclaimed "tech developer" but I just can't take his claimed expertise seriously. Google can't run background checks on the Glassholes who sign up to show off. The unfortunate task of calling out fakers thus falls to independent analysts like me. I'll be watching you, dude. Flying a quadcopter does not make one an expert on anything special.
I have not heard the last of the wearable tech sector and it has not heard the last of me. The attractive women draw me to wearable events but I stay to see how investors can make money in the sector. FashTechSF stays on my radar.
Wednesday, July 02, 2014
Alfidi Capital at PingWest SYNC 2014
I attended the PingWest SYNC 2014 conference in San Francisco. These folks crammed a full day's discussion of hot innovation into a concert space in San Francisco's North Beach. The startup displays were all scrunched together in the entryway, reminiscent of so many Chinatown shops and Hong Kong markets. I missed part of the morning sessions on AI tech due to a schedule conflict. My photos turned out very poorly so I have nothing visual to post this time.
DaveMcClure from 500 Startups was remarkably restrained. He's usually rather exuberant. I will never forget his provocative persona from GMIC Silicon Valley 2013. He reiterated his belief that VCs underperform broad markets by concentrating their portfolios, and that his accelerator's hundreds of startups are a superior approach. He could be correct but I'd like to know how shepherding hundreds of startups enables his highly experienced partners to add value. That hands-on attention is where VCs make a difference for their concentrated portfolios. It was good to hear him speak positively of women startup founders. I have wondered up to now why so many pain points in enterprise IT remain unaddressed, but Dave gave part of the answer. He noted that much enterprise IT is scalable without humans and it's a smaller market than retail mobile, and that's why so much venture investment chases e-commerce instead of enterprise SaaS. Well, I'll be darned.
The cute Chinese female MC segued from the morning tech sessions to the afternoon China sessions by asking the crowd who they thought was the sexiest entrepreneur among the morning speakers. I shouted from the back, "You!" and got some laughs from the Chinese people sitting around me. There were lots of hot Chinese women with nice bare legs at this SYNC conference. I think Chinese women should do more squats so their rear ends look really nice. Some other Chinese people prospected me after lunch for investments in their startups. No thanks, people; I'm not putting any more cash into startups until the ones I have in my portfolio get some results.
Some dude from the Internet Society of China spoke in Chinese right after lunch. I did not expect any admission of Internet censorship in China or cyberwar against the US. He fulfilled my expectations by sticking to the party line. I won't attend the China Internet Conference in Beijing he mentioned because there's plenty to keep me entertained right here in the US.
The panel billing itself as "Zero to Million Installs" didn't give any hints to mobile entrepreneurs on how to make that happen. Their stated bias for slow growth in a huge market makes sense in China. ChinaSF got a shout-out for attracting Chinese companies to The City. I'd like to know how many Chinese agents of influence those companies brought with them. I would also like to know why American VCs with offices in China will fund Chinese startups with separate funds. It's probably a marketing gimmick to attract themed investments from institutions greedy for hot China exposure. American VCs that really want to succeed in China should ask the International Finance Corporation and other entities how their investments in Chinese SMBs have performed.
Tencent sent someone out to pump their TenPay payment service. The integration of mobile, social, and payments proceeds apace on Asian networks. I know enough about where this is headed to see the future of US social media companies in financial services. Facebook and Google will have to offer banking services to keep up with Chinese competitors. Mobile payment is the camel's nose under the tent.
I ignored all of the startup pitches and sponsor announcements. I'm not investing in these startups and I don't need the sponsors' services. None of the entrepreneurs had really compelling speaking styles. Maybe it's their upbringing. They need to speak louder and be more dynamic.
I really paid attention to Hermione Way's panel. She is one hot tech babe but she dressed very conservatively at SYNC 2014. Check her out on the Web wearing nothing. The panelists talked up Shenzhen's dynamic economy and big expat community. Hermione touted her "Vibease" product . . . just do a Google search for it. Yeah, there you go. I'm not linking it here. It can be controlled remotely by one's intimate partner via smartphone. I'll bet real intimacy with Hermione is a lot more fun. I'd like to watch her test that product herself. It would be even more fun to watch SYNC's hot Chinese female MC help her test it. The MC made a coy comment about it after the panel. Wow, score one for US-China relations, if you know what I mean.
I did some thinking about Shenzhen after that panel, and not just about Hermione and the MC testing Vibease. Where's the hard data on Shenzhen's advantages? Its obvious advantage as the prefecture bordering Hong Kong means it's a trade gateway to the interior, but the expat community is the best explanation for its cultural adaptability. The common lesson among several panels so far is the absolute necessity of hiring local people when penetrating any foreign market. Another lesson is that Chinese VCs are well-connected with PRC regulators, but I can't find any evidence of this worth linking. A lot of these speakers ignore the hard truth that any manufacturing in China other than simple final assembly invites IP theft. Any US company trying to penetrate China needs to pay a visit to Shenzhen's community of Western expats and probe them on these kinds of concerns.
I ran into Baidu's local product manager during the afternoon snack break. I grabbed a whole bunch of chips and asked him a silly question about that company. He laughed and said I had the wrong idea about Baidu. Yeah right. I made sure I got plenty of chips while I scoped out the hot Chinese babes walking around the startup tabletop displays. I did not see Dr. Fu Manchu anywhere at this conference.
The final panel on cross-border VC investment was really odd. One panelist took a phone call on stage while another VC was talking. Huh? That's rude. All of these idiot VCs talked about nothing but mobile and software. Come on, China is a big enough market for something that hasn't been tapped out to death. I heard lots of claims about how rapidly Chinese companies can innovate. Oh really? In a heavily censored society? Yeah right, they all talk their books. I think they really meant how rapidly Chinese companies can steal tech from their Western partners and pass it off as "innovation" to unsuspecting Asian consumers. I was stunned to hear one VC guy say that selling SaaS online works in the US but not in China. Really? If they're serious about such slow adoption then they can't also be serious about China innovating quickly. I am absolutely certain that China has a cloud sector that can handle SaaS penetration. These panelists were full of VC baloney.
I did not get much out of the PingWest SYNC conference other than a good fantasy about Hermione and the female Chinese MC. Anyone who came away from this thinking that Chinese innovation is the same as American innovation is indulging in a similar fantasy. I looked around inside for some won ton vendors but found none. I'll have to go to Chinatown to get my fix.
DaveMcClure from 500 Startups was remarkably restrained. He's usually rather exuberant. I will never forget his provocative persona from GMIC Silicon Valley 2013. He reiterated his belief that VCs underperform broad markets by concentrating their portfolios, and that his accelerator's hundreds of startups are a superior approach. He could be correct but I'd like to know how shepherding hundreds of startups enables his highly experienced partners to add value. That hands-on attention is where VCs make a difference for their concentrated portfolios. It was good to hear him speak positively of women startup founders. I have wondered up to now why so many pain points in enterprise IT remain unaddressed, but Dave gave part of the answer. He noted that much enterprise IT is scalable without humans and it's a smaller market than retail mobile, and that's why so much venture investment chases e-commerce instead of enterprise SaaS. Well, I'll be darned.
The cute Chinese female MC segued from the morning tech sessions to the afternoon China sessions by asking the crowd who they thought was the sexiest entrepreneur among the morning speakers. I shouted from the back, "You!" and got some laughs from the Chinese people sitting around me. There were lots of hot Chinese women with nice bare legs at this SYNC conference. I think Chinese women should do more squats so their rear ends look really nice. Some other Chinese people prospected me after lunch for investments in their startups. No thanks, people; I'm not putting any more cash into startups until the ones I have in my portfolio get some results.
Some dude from the Internet Society of China spoke in Chinese right after lunch. I did not expect any admission of Internet censorship in China or cyberwar against the US. He fulfilled my expectations by sticking to the party line. I won't attend the China Internet Conference in Beijing he mentioned because there's plenty to keep me entertained right here in the US.
The panel billing itself as "Zero to Million Installs" didn't give any hints to mobile entrepreneurs on how to make that happen. Their stated bias for slow growth in a huge market makes sense in China. ChinaSF got a shout-out for attracting Chinese companies to The City. I'd like to know how many Chinese agents of influence those companies brought with them. I would also like to know why American VCs with offices in China will fund Chinese startups with separate funds. It's probably a marketing gimmick to attract themed investments from institutions greedy for hot China exposure. American VCs that really want to succeed in China should ask the International Finance Corporation and other entities how their investments in Chinese SMBs have performed.
Tencent sent someone out to pump their TenPay payment service. The integration of mobile, social, and payments proceeds apace on Asian networks. I know enough about where this is headed to see the future of US social media companies in financial services. Facebook and Google will have to offer banking services to keep up with Chinese competitors. Mobile payment is the camel's nose under the tent.
I ignored all of the startup pitches and sponsor announcements. I'm not investing in these startups and I don't need the sponsors' services. None of the entrepreneurs had really compelling speaking styles. Maybe it's their upbringing. They need to speak louder and be more dynamic.
I really paid attention to Hermione Way's panel. She is one hot tech babe but she dressed very conservatively at SYNC 2014. Check her out on the Web wearing nothing. The panelists talked up Shenzhen's dynamic economy and big expat community. Hermione touted her "Vibease" product . . . just do a Google search for it. Yeah, there you go. I'm not linking it here. It can be controlled remotely by one's intimate partner via smartphone. I'll bet real intimacy with Hermione is a lot more fun. I'd like to watch her test that product herself. It would be even more fun to watch SYNC's hot Chinese female MC help her test it. The MC made a coy comment about it after the panel. Wow, score one for US-China relations, if you know what I mean.
I did some thinking about Shenzhen after that panel, and not just about Hermione and the MC testing Vibease. Where's the hard data on Shenzhen's advantages? Its obvious advantage as the prefecture bordering Hong Kong means it's a trade gateway to the interior, but the expat community is the best explanation for its cultural adaptability. The common lesson among several panels so far is the absolute necessity of hiring local people when penetrating any foreign market. Another lesson is that Chinese VCs are well-connected with PRC regulators, but I can't find any evidence of this worth linking. A lot of these speakers ignore the hard truth that any manufacturing in China other than simple final assembly invites IP theft. Any US company trying to penetrate China needs to pay a visit to Shenzhen's community of Western expats and probe them on these kinds of concerns.
I ran into Baidu's local product manager during the afternoon snack break. I grabbed a whole bunch of chips and asked him a silly question about that company. He laughed and said I had the wrong idea about Baidu. Yeah right. I made sure I got plenty of chips while I scoped out the hot Chinese babes walking around the startup tabletop displays. I did not see Dr. Fu Manchu anywhere at this conference.
The final panel on cross-border VC investment was really odd. One panelist took a phone call on stage while another VC was talking. Huh? That's rude. All of these idiot VCs talked about nothing but mobile and software. Come on, China is a big enough market for something that hasn't been tapped out to death. I heard lots of claims about how rapidly Chinese companies can innovate. Oh really? In a heavily censored society? Yeah right, they all talk their books. I think they really meant how rapidly Chinese companies can steal tech from their Western partners and pass it off as "innovation" to unsuspecting Asian consumers. I was stunned to hear one VC guy say that selling SaaS online works in the US but not in China. Really? If they're serious about such slow adoption then they can't also be serious about China innovating quickly. I am absolutely certain that China has a cloud sector that can handle SaaS penetration. These panelists were full of VC baloney.
I did not get much out of the PingWest SYNC conference other than a good fantasy about Hermione and the female Chinese MC. Anyone who came away from this thinking that Chinese innovation is the same as American innovation is indulging in a similar fantasy. I looked around inside for some won ton vendors but found none. I'll have to go to Chinatown to get my fix.
Tuesday, July 01, 2014
Alfidi Capital Checks Out Mineta Transportation Institute National Policy Summit 2014
I attended the Mineta National Policy Summit for 2014 at the Commonwealth Club a few days ago. More policymakers should follow the Mineta Transportation Institute's work on funding transit infrastructure. Lobbying organizations for the transportation industry certainly pay attention, and that's why lobbyists' legislative agendas are enacted into federal appropriations. I never turn down a free breakfast and the Mineta people paid for enough banana nut bread and coffee cake to incentivize my attendance.
The head of DOT's Federal Transit Administration spoke on federal policy and the status of the Highway Trust Fund. I've read plenty of commentary about the Fund's stresses from lapses in funding, and the transportation sector is very willing to accept higher fuel taxes. Trucking operators know the federal highway system's disrepair better than anyone. The FTA adapted its MAP-21 program to incorporate the New Start / Small Start Capital Grant Investment Program. Making a long story short means there's federal money available for municipalities to upgrade transit infrastructure. My only concern about such spending is that the federal government should not fund transit projects that do not connect to national infrastructure. I can understand a new light rail line that connects an urban core to a major airport, because that airport connects to the rest of the US. I do not agree with federal funding for a local line from one end of a waterfront to another, or to a ballpark. That's an issue for local voters to decide. There's too much room for local boondoggles and politicking in those projects that is impenetrable to federal review. She mentioned that the Grow America Act is supposed to fix a long backlog of infrastructure and workforce development projects. It's good to know that this Administration is getting serious about fixing the failing grades in the ASCE Report Card for America's Infrastructure.
Mineta analysts published the results of their MTI Project 1328 survey linking tax options to transit funding. Americans are more likely to cough up dough for safety and maintenance than for global warming. The climate change alternative religion IMHO hasn't convinced everyone just yet. The Mineta panelists noted that Americans' views of transportation funding have remained consistent throughout changing economic cycles, which is no surprise for a topic typically off the low-information voter's radar. I support the Obama Administration's proposed repeal of the ban on interstate tolling, because travelers who use our national infrastructure should pay for it as they go in addition to paying fuel taxes. The panelists mentioned the recent APTA 2014 International Practicum on Innovative Transit Funding & Financing in Montreal, where experts presented case studies on how transit enhances property values. That is the kind of data-driven analysis that urban planners need when municipal finance offices assemble bond issues for projects.
The various presenters made good points that lead me to ponder some untouched issues. The sharing economy is just taking off and it will eliminate demand for parking garages and lots at airports and other nodes. Those lots will become excess infrastructure we don't have to repair or expand. I predict major public policy moves in favor of infill development of unused parking lots. There is still unresolved tension between car advocates who think reduced metering increases retail commerce and transit advocates who think smart metering (changing fares by hour, congestion, and vehicle emission standards) enhances commerce. Let's put the data from each side up for comparison, for crying out loud. I would also like to see transit advocates address the GAO's reviews of DOT's recent results. The GAO-14-628R report from May 2014 found that DOT's documentation and internal controls for TIGER grants were inadequate. It is very disturbing to think that billions of dollars in grant money have been wasted on unneeded projects for expedient reasons. I have already revealed my bias against federal funding of transportation projects that have only local impacts. Such projects contribute to overbuilt suburbs and unsustainable communities. The last thing the federal government needs in an innovative transportation funding program is a repeat of the DOE's politically connected solar loan program debacle. The US still needs a National Infrastructure Reinvestment Bank to help vet these projects, because more transparency and review from the financial markets will help reduce the influence of political cronyism in infrastructure funding.
I attended the Mineta summit in 2013. Compare my analysis at that link from last year to the article you're reading now. The question I posed last year about whether California can sustain muni bond issuance in a difficult economic environment may soon find its answer in the markets. I have recently noted the exit fees bond fund investors will likely face before the bond market collapses. Muni bond fund investors will not escape their positions in advance of a bond market crisis. Infrastructure awaiting funding will have to wait even longer while the bond market returns to historically normal conditions. I think both the DOT and Mineta analysts should plan for transportation funding mechanisms that will survive a prolonged hyperinflationary depression. Maybe user fees and gas taxes will have to adjust by the hour to keep up with inflation in a crisis. I'll look for their solutions at next year's summit.
The head of DOT's Federal Transit Administration spoke on federal policy and the status of the Highway Trust Fund. I've read plenty of commentary about the Fund's stresses from lapses in funding, and the transportation sector is very willing to accept higher fuel taxes. Trucking operators know the federal highway system's disrepair better than anyone. The FTA adapted its MAP-21 program to incorporate the New Start / Small Start Capital Grant Investment Program. Making a long story short means there's federal money available for municipalities to upgrade transit infrastructure. My only concern about such spending is that the federal government should not fund transit projects that do not connect to national infrastructure. I can understand a new light rail line that connects an urban core to a major airport, because that airport connects to the rest of the US. I do not agree with federal funding for a local line from one end of a waterfront to another, or to a ballpark. That's an issue for local voters to decide. There's too much room for local boondoggles and politicking in those projects that is impenetrable to federal review. She mentioned that the Grow America Act is supposed to fix a long backlog of infrastructure and workforce development projects. It's good to know that this Administration is getting serious about fixing the failing grades in the ASCE Report Card for America's Infrastructure.
Mineta analysts published the results of their MTI Project 1328 survey linking tax options to transit funding. Americans are more likely to cough up dough for safety and maintenance than for global warming. The climate change alternative religion IMHO hasn't convinced everyone just yet. The Mineta panelists noted that Americans' views of transportation funding have remained consistent throughout changing economic cycles, which is no surprise for a topic typically off the low-information voter's radar. I support the Obama Administration's proposed repeal of the ban on interstate tolling, because travelers who use our national infrastructure should pay for it as they go in addition to paying fuel taxes. The panelists mentioned the recent APTA 2014 International Practicum on Innovative Transit Funding & Financing in Montreal, where experts presented case studies on how transit enhances property values. That is the kind of data-driven analysis that urban planners need when municipal finance offices assemble bond issues for projects.
The various presenters made good points that lead me to ponder some untouched issues. The sharing economy is just taking off and it will eliminate demand for parking garages and lots at airports and other nodes. Those lots will become excess infrastructure we don't have to repair or expand. I predict major public policy moves in favor of infill development of unused parking lots. There is still unresolved tension between car advocates who think reduced metering increases retail commerce and transit advocates who think smart metering (changing fares by hour, congestion, and vehicle emission standards) enhances commerce. Let's put the data from each side up for comparison, for crying out loud. I would also like to see transit advocates address the GAO's reviews of DOT's recent results. The GAO-14-628R report from May 2014 found that DOT's documentation and internal controls for TIGER grants were inadequate. It is very disturbing to think that billions of dollars in grant money have been wasted on unneeded projects for expedient reasons. I have already revealed my bias against federal funding of transportation projects that have only local impacts. Such projects contribute to overbuilt suburbs and unsustainable communities. The last thing the federal government needs in an innovative transportation funding program is a repeat of the DOE's politically connected solar loan program debacle. The US still needs a National Infrastructure Reinvestment Bank to help vet these projects, because more transparency and review from the financial markets will help reduce the influence of political cronyism in infrastructure funding.
I attended the Mineta summit in 2013. Compare my analysis at that link from last year to the article you're reading now. The question I posed last year about whether California can sustain muni bond issuance in a difficult economic environment may soon find its answer in the markets. I have recently noted the exit fees bond fund investors will likely face before the bond market collapses. Muni bond fund investors will not escape their positions in advance of a bond market crisis. Infrastructure awaiting funding will have to wait even longer while the bond market returns to historically normal conditions. I think both the DOT and Mineta analysts should plan for transportation funding mechanisms that will survive a prolonged hyperinflationary depression. Maybe user fees and gas taxes will have to adjust by the hour to keep up with inflation in a crisis. I'll look for their solutions at next year's summit.
Monday, June 30, 2014
Financial Sarcasm Roundup for 06/30/14
Sarcasm is all around us, much like the Force in the Star Wars saga. It permeates everything. All living creatures, inanimate objects, and natural phenomena contain sarcasm. I only address sarcasm in the finance sector.
China removed its foreign currency interest rate cap in Shanghai. That tells me just how excited the PBOC is about enticing foreign investors to prop up Chinese banks. I've covered China's precarious shadow banking system and fragile WMPs in past articles. Foreign investors chasing cash yields in China are suckers. Most conventional analysts will celebrate this move as a successful innovation pioneered in the Shanghai FTZ. They have to cheer on the remaining China bulls in the West. Anyone who forgot the sky-high cash yields available in Cyprus prior to that country's crisis will ignore similar conditions in China.
A US federal judge blocked a payment Argentina was scheduled to make to US bondholders. Sovereign immunity usually prevents these types of maneuvers from creditors but savvy US hedge funds have figured out how to use lawfare to extract full payments from Argentina. The risk these hedge funds take is that blocking a partial payment to all of its bondholders, both exchangers and holdouts, will push Argentina to default. I cannot know whether the holdouts relish the prospect of competing investors in the exchange group getting hurt first, but the thought of hedgies salivating at the chance to destroy competitors is the type of behavior I expect from people used to getting their way. Argentina wouldn't have to worry about committing half their currency reserves to debt service if they hadn't messed up their economy so badly with hyperinflationary policies. Buying debt from countries with a history of default and mismanagement is a fool's game but many fools on wall Street are determined to play it.
The BIS warns central banks that they must end their freewheeling experiments with money. The bank gave the same warning last year and hardly anyone caught it - except me, of course. I even mentioned the BIS's graphics during my talk at the San Francisco Money Show in 2013. The BIS also helpfully names China as the country leaving its borrowers most vulnerable to rates. Go back up to my comments on China's interest rate liberalization to see why they want to attract deposit money so badly. The IMF in particular has made it a point to ignore warnings while it pushes the ECB into stimulus beyond its legal mandates. Central banks playing catch-up behind rising real rates will demonstrate their impotence to stop either higher rates or currency devaluations. There's even a helpful BIS warning about PIIGS home bias for sovereign debt, which will of course come back to haunt those countries when the next crisis hits their banks with more sovereign debt defaults and currency devaluations.
The preppies and trust fund babies running most Wall Street firms all read the above news items to look busy. They don't grok the insights or reduce their exposure to obvious threats. That's okay. I want them all fired and bankrupt when the pro-cyclical policy dysfunctions I've cited above destroy their AUM. The BIS is correct and a lot of stupid people are wrong.
Sunday, June 29, 2014
The Limerick of Finance for 06/29/14
Malaysia bull market gets old
Investors all need to be told
When value hits top
It may possibly drop
Some Malay fans will wish they had sold
Investors all need to be told
When value hits top
It may possibly drop
Some Malay fans will wish they had sold
Saturday, June 28, 2014
Friday, June 27, 2014
Thursday, June 26, 2014
Capitalizing On ForumCon 2014
I attended ForumCon 2014 in San Francisco last week. I assumed it would be something like the social media events I attended last year, with an emphasis on SEO and other marketing methods. It turned out to be a much more valuable view into a sector of the digital economy I have not analyzed in a long time. My photos may not have the greatest resolution, but I was there for the knowledge and not the visuals.
I don't know the demographic breakdown of the attendees. I got the impression most of them ran online forums and were in the market for hosting services, developers, and moderators. The conference sponsors have solved forum monetization with advertising networks and affiliate marketing. I was lucky enough to sit with my friend Ania Dziadon, and she shared her insights from running EasyFinance and AddOptimization.
One panelist mentioned that affiliate marketing is a natural way to monetize a forum because users who engage content through regular discussions are likely to make online purchases. I don't spend enough time on forums like Reddit or Quora to understand how their audiences are segmented, but I think forums with very broad coverage are more easily monetized with ads than affiliate links. Follow my thinking. The RTB ad network can instantly configure display ads as discussion threads address new content. The critical thing is to have a site moderator agile enough to enable new ad links as users create new discussion threads, or to just automate that function. I get the panelists' complaint that display ads need special configuration, especially for mobile, but I suspect that interstitial ads (like those that appear between game levels in the mobile game sector) are worth a shot on some forums.
I learned a new term from one of the panels: "user funnel." That may be a different way of addressing the "conversion funnel" that tracks a forum user's progress to a sale, but then again not every forum will monetize with affiliate sales. I share the panelists' concerns about large-format data tables displaying poorly in mobile, but my solution is probably not what they want to hear. I would relegate data tables to separate files that can be downloaded from a link in a forum. Video and audio embeds in a forum should display much better than data and I've seen a few forum sites where that isn't a problem.
It was cool to see David Spinks discuss a "lean startup" interpretation of online community launches. That's exactly what new forum owners need to stay viable in their early months. David has a good article at The Community Manager on how a lean community leverages that model. A lean community should act like a product that solves user pain points. The expert definition of a "Minimum Viable Community" kept coming up throughout the day when forum owners described how they add value. The lean community method relies on metrics from social network analysis like strong ties, weak ties, and network density. David's presentation was the first mention I'd heard of the sense of community theory in the context of online life. I wonder if measurements of membership and influence are the same as in real life given the ease with which users can construct multiple online personas. David's work at CMX Hub is worth a look for folks who get serious about adopting his approach and lowering users' barriers to entry.
Another speaker shed some light on valid metrics to track. Unique visitors, loyal email subscribers, and monthly influencer reach by social media platform were a few favorites I heard mentioned. I don't know what tools forum users prefer but I got the point that viable communities have an authentic language and true superstars. Controversy with an emotional hook will engage a community. I've seen that on popular political discussion sites, but IMHO controversy may not translate into sales. That would mean people must buy something when they're angry, and online shopping is supposed to be as pleasant and frictionless as possible. Controversy probably monetizes ad-driven Web communities more than affiliate-linked communities.
The talk on forum moderation brought me some revelations. The truisms I learned in the US military about having mission statements, using two-way communication, and celebrating little successes all came out here as moderation essentials. I had to wonder why forum owners thought disabled veterans made good full-time paid moderators. I realize many injured vets have limited career options and may prefer an online job that allows them to work from home. Moderation is a low-paying, unconventional career choice and forum gurus made it sound like another dead-end job. I know that we vets sometimes have to take what we can get, but this kind of offering keeps veterans out of high-powered careers. It must appeal to people who want a digital nomad's lifestyle. They key metric for a moderator's efficiency is cost per comment processed, and machine-assisted moderation reduces that cost. I was surprised to learn that disabling a guest login feature increases user engagement, presumably by requiring people to commit to registering an online identity.
I learned another new term during a break in the panel action: "supply-side platform (SSP)." It is the content publisher's mirror image of the RTB ad networks' demand-side platform (DSP). Don't ask me what it takes for a publisher to run an SSP. I'm still trying to figure out how to maximize my own revenue from a DSP.
Startup pitches are a staple of tech conferences and the Tech Fest did not disappoint me. I liked the one from Solve Media that inserted brand ads into captchas. Requiring users to type an ad tagline or jingle is a brilliant marketing innovation that forces users to engage a brand. They didn't win the pitch competition but I don't think I've heard the last of them.
Forum owners face challenges in growing their communities beyond 100 members and I paid attention to the talk on building addictive communities. It's the kind of knowledge I can use as a self-publishing Web presence even if I never run a forum. The motivating forces of pleasure, pain, hope, fear, social acceptance, and rejection avoidance matter as triggers for community participation but I've had difficulty transposing them to my Web readership. Fear might work best for me. I'll frighten the heck out of people so they don't miss a single article I write. Seriously, real forums make social acceptance easy when people can show off their personalities and gain peer approval. Getting people to follow habitualizing steps is the key.
The speculation on the Web's future was all over the place. Here's my own take. This is the single most important paragraph in my article. Apps will somehow have to drive user collaboration and sharing so that app traffic will make it to discussion forums. I think Disqus will be able to do this well. The realization that image comments are winning hits, views, likes, shares, and whatever else over text comments is more evidence for me that digital civilization is regressing to a pre-literate stage of human maturation. Images are easier to upload than typing text, and they obviously require less cognitive effort to process. People are already stupid and they're getting more stupid by the day. I'm not done with my ranting. Discussion forums show us what happens when low-information proles have access to tech. They flood the culture with nonsense like cat pictures and offensive comments. I tried to relate to these people by posting LOLcat pics myself and it did not help me connect with average, stupid humans. Stolen copyrighted photos on Instagram and Pinterest prove that most humans do not respect property rights or the rule of law. I say bring on machine-based moderation to ban stupidity and illegality from the Web. That is my main takeaway from ForumCon.
The final talk on purposeful design was excellent. The limited scope of design in approaches based on aesthetics and content is less useful than something more purposeful. Breaking design down into steps that build a clear purpose and manifesto into all decisions means design permeates even the most routine functions of a mature enterprise, or in this context a Minimum Viable Community. I must have anticipated this approach when I published the Alpha-D Investment Philosophy on the Alfidi Capital main site. I agree with the speaker that design should be simple and elegant, and I'm pretty sure my web design meets that goal, but the difference for me is that my design does not solve problems for anyone else but me. That's the way it has to be.
ForumCon was a pleasant surprise from VigLink. There were plenty of action items I can use to refine my own Web content. I won't ever run a forum but I appreciate the hard entrepreneurial work forum owners put into moderation, conduct policies, design, and monetization. Hats off to you, forum people.
I don't know the demographic breakdown of the attendees. I got the impression most of them ran online forums and were in the market for hosting services, developers, and moderators. The conference sponsors have solved forum monetization with advertising networks and affiliate marketing. I was lucky enough to sit with my friend Ania Dziadon, and she shared her insights from running EasyFinance and AddOptimization.
One panelist mentioned that affiliate marketing is a natural way to monetize a forum because users who engage content through regular discussions are likely to make online purchases. I don't spend enough time on forums like Reddit or Quora to understand how their audiences are segmented, but I think forums with very broad coverage are more easily monetized with ads than affiliate links. Follow my thinking. The RTB ad network can instantly configure display ads as discussion threads address new content. The critical thing is to have a site moderator agile enough to enable new ad links as users create new discussion threads, or to just automate that function. I get the panelists' complaint that display ads need special configuration, especially for mobile, but I suspect that interstitial ads (like those that appear between game levels in the mobile game sector) are worth a shot on some forums.
I learned a new term from one of the panels: "user funnel." That may be a different way of addressing the "conversion funnel" that tracks a forum user's progress to a sale, but then again not every forum will monetize with affiliate sales. I share the panelists' concerns about large-format data tables displaying poorly in mobile, but my solution is probably not what they want to hear. I would relegate data tables to separate files that can be downloaded from a link in a forum. Video and audio embeds in a forum should display much better than data and I've seen a few forum sites where that isn't a problem.
It was cool to see David Spinks discuss a "lean startup" interpretation of online community launches. That's exactly what new forum owners need to stay viable in their early months. David has a good article at The Community Manager on how a lean community leverages that model. A lean community should act like a product that solves user pain points. The expert definition of a "Minimum Viable Community" kept coming up throughout the day when forum owners described how they add value. The lean community method relies on metrics from social network analysis like strong ties, weak ties, and network density. David's presentation was the first mention I'd heard of the sense of community theory in the context of online life. I wonder if measurements of membership and influence are the same as in real life given the ease with which users can construct multiple online personas. David's work at CMX Hub is worth a look for folks who get serious about adopting his approach and lowering users' barriers to entry.
Another speaker shed some light on valid metrics to track. Unique visitors, loyal email subscribers, and monthly influencer reach by social media platform were a few favorites I heard mentioned. I don't know what tools forum users prefer but I got the point that viable communities have an authentic language and true superstars. Controversy with an emotional hook will engage a community. I've seen that on popular political discussion sites, but IMHO controversy may not translate into sales. That would mean people must buy something when they're angry, and online shopping is supposed to be as pleasant and frictionless as possible. Controversy probably monetizes ad-driven Web communities more than affiliate-linked communities.
The talk on forum moderation brought me some revelations. The truisms I learned in the US military about having mission statements, using two-way communication, and celebrating little successes all came out here as moderation essentials. I had to wonder why forum owners thought disabled veterans made good full-time paid moderators. I realize many injured vets have limited career options and may prefer an online job that allows them to work from home. Moderation is a low-paying, unconventional career choice and forum gurus made it sound like another dead-end job. I know that we vets sometimes have to take what we can get, but this kind of offering keeps veterans out of high-powered careers. It must appeal to people who want a digital nomad's lifestyle. They key metric for a moderator's efficiency is cost per comment processed, and machine-assisted moderation reduces that cost. I was surprised to learn that disabling a guest login feature increases user engagement, presumably by requiring people to commit to registering an online identity.
I learned another new term during a break in the panel action: "supply-side platform (SSP)." It is the content publisher's mirror image of the RTB ad networks' demand-side platform (DSP). Don't ask me what it takes for a publisher to run an SSP. I'm still trying to figure out how to maximize my own revenue from a DSP.
Startup pitches are a staple of tech conferences and the Tech Fest did not disappoint me. I liked the one from Solve Media that inserted brand ads into captchas. Requiring users to type an ad tagline or jingle is a brilliant marketing innovation that forces users to engage a brand. They didn't win the pitch competition but I don't think I've heard the last of them.
Forum owners face challenges in growing their communities beyond 100 members and I paid attention to the talk on building addictive communities. It's the kind of knowledge I can use as a self-publishing Web presence even if I never run a forum. The motivating forces of pleasure, pain, hope, fear, social acceptance, and rejection avoidance matter as triggers for community participation but I've had difficulty transposing them to my Web readership. Fear might work best for me. I'll frighten the heck out of people so they don't miss a single article I write. Seriously, real forums make social acceptance easy when people can show off their personalities and gain peer approval. Getting people to follow habitualizing steps is the key.
The speculation on the Web's future was all over the place. Here's my own take. This is the single most important paragraph in my article. Apps will somehow have to drive user collaboration and sharing so that app traffic will make it to discussion forums. I think Disqus will be able to do this well. The realization that image comments are winning hits, views, likes, shares, and whatever else over text comments is more evidence for me that digital civilization is regressing to a pre-literate stage of human maturation. Images are easier to upload than typing text, and they obviously require less cognitive effort to process. People are already stupid and they're getting more stupid by the day. I'm not done with my ranting. Discussion forums show us what happens when low-information proles have access to tech. They flood the culture with nonsense like cat pictures and offensive comments. I tried to relate to these people by posting LOLcat pics myself and it did not help me connect with average, stupid humans. Stolen copyrighted photos on Instagram and Pinterest prove that most humans do not respect property rights or the rule of law. I say bring on machine-based moderation to ban stupidity and illegality from the Web. That is my main takeaway from ForumCon.
The final talk on purposeful design was excellent. The limited scope of design in approaches based on aesthetics and content is less useful than something more purposeful. Breaking design down into steps that build a clear purpose and manifesto into all decisions means design permeates even the most routine functions of a mature enterprise, or in this context a Minimum Viable Community. I must have anticipated this approach when I published the Alpha-D Investment Philosophy on the Alfidi Capital main site. I agree with the speaker that design should be simple and elegant, and I'm pretty sure my web design meets that goal, but the difference for me is that my design does not solve problems for anyone else but me. That's the way it has to be.
ForumCon was a pleasant surprise from VigLink. There were plenty of action items I can use to refine my own Web content. I won't ever run a forum but I appreciate the hard entrepreneurial work forum owners put into moderation, conduct policies, design, and monetization. Hats off to you, forum people.
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