World bodies working
Prosperous policy path
Inclusive approach
Prosperous policy path
Inclusive approach
Saturday, February 28, 2015
Listicle of Financial Inclusion Institutions
Financial inclusion is an emerging topic in both the traditional finance sector and the social capital arena. Here's a rundown of the major institutions facilitating and tracking this phenomenon.
The Center for Financial Inclusion (CFI) has a target date of 2020 for full inclusion. That's ambitious, so five years from now we can expect to see inclusive programs all over the developed world. If the subject is ever going to catch fire, it must cover both the developed world and emerging markets.
The G20's Global Partnership for Financial Inclusion (GPFI) is a serious effort to integrate several multilateral initiatives. It matters if it keeps the developed world's sub-ministerial task forces on track. The risk is that the G20's recent endorsement of coordinated monetary stimulus will disrupt the capital account flows the developed world needs to meet inclusion targets.
The World Bank's Consultative Group to Assist the Poor (CGAP) develops a policy architecture for implementing inclusive plans. That's a fancy way of saying the group has sample rules that any country can implement. Check out their discussions of microcredit. The World Bank also maintains GPFI's G20 Financial Inclusion Indicators, along with its own Financial Inclusion data and Global Findex.
The Alliance for Financial Inclusion (AFI) is probably the most inclusive policymaking body. The difference with AFI is the participation of experts from the developing world to ensure the other coordinating bodies aren't making policy in a vacuum.
Billions of formerly marginalized people are crossing the chasm between the non-integrated gap and the functioning core. Keeping up with the times means knowing how they will all grow wealthy. Financial inclusiveness is the developed world's welcome mat laid out for the world economy's brand new members.
The Business Case For New Mentoring Tools
I recently visited with the enterprising minds behind MicroMentor, a derivative of Mercy Corps. I don't participate in their program but they offer a good value proposition to anyone seeking mentoring via social media. Entrepreneurs pressed for time now have another option besides SCORE. They can also share knowledge with peers at Startgrid. The good news for proteges seeking financial inclusiveness just keeps on coming.
The advent of microfinance and microenterprise means mentoring must adapt to changing times. The Aspen Institute's FIELD program documents the latest data on how microbusiness sectors adapt. Aspen has tons of other programs too numerous to name here that can help. Mentors who need ROI trackers for their board service and volunteerism need look no further than True Impact.
A web search of topics covering mentoring reveals a ton of open-source research on personal mentoring for disadvantaged youth. The research on mentoring within a business context is often behind the paywalls of academic journals or held in the private databases of consultancies. The best open-source business cases for mentoring are in the Society for Human Resource Management's research and tools. Searching SHRM's site for variations on the word "mentor" reveals everything a good manager needs to know.
The existing literature on mentoring has some gaps. Mentoring disadvantaged youth makes sense from a humanitarian standpoint. Finding a mentor at work has potential payoffs in the time-honored tradition of riding a superstar's coattails. The HR coursework I recall from my business studies showed that formal mentoring programs often lead to mismatches. There is room for disruption in mentoring. Social media enablers like MicroMentor and Startgrid are natural evolutions in business relationships.
The advent of microfinance and microenterprise means mentoring must adapt to changing times. The Aspen Institute's FIELD program documents the latest data on how microbusiness sectors adapt. Aspen has tons of other programs too numerous to name here that can help. Mentors who need ROI trackers for their board service and volunteerism need look no further than True Impact.
A web search of topics covering mentoring reveals a ton of open-source research on personal mentoring for disadvantaged youth. The research on mentoring within a business context is often behind the paywalls of academic journals or held in the private databases of consultancies. The best open-source business cases for mentoring are in the Society for Human Resource Management's research and tools. Searching SHRM's site for variations on the word "mentor" reveals everything a good manager needs to know.
The existing literature on mentoring has some gaps. Mentoring disadvantaged youth makes sense from a humanitarian standpoint. Finding a mentor at work has potential payoffs in the time-honored tradition of riding a superstar's coattails. The HR coursework I recall from my business studies showed that formal mentoring programs often lead to mismatches. There is room for disruption in mentoring. Social media enablers like MicroMentor and Startgrid are natural evolutions in business relationships.
Friday, February 27, 2015
Greek Crisis Drops Off Reality Radar Into Pretend Land
Hey children! Let's all pretend that Greece can pay its bills, Germany loves giving away money, and Europe is one big happy family. That would make a hilarious fairy tale suitable only for the dumbest of credulous kids. Europe's leaders are living this fairy tale right now even though they know the grown-up math will never make it work.
Tuesday's approval of Greece's proposed austerity compliance plan was a farce beyond all belief. European finance ministers somehow gave it their seal of approval with a straight face. Whether they were complicit in drafting it before Greece pretended to own it is a moot point. Every responsible adult at the European financial table is now engaging in mass self-deception, national deception, and continental deception.
Here's a trumpet blast of reality for any Europeans still asleep. Greece has no intention of ever paying its debts or fulfilling its austerity promises. Athens' capitulation to the troika's new bailout terms was a feint to stop Greek bank runs. The Tsipras regime knows it will run out of money but needs another few weeks or months to turn disorderly starvation into something that does not lead to civil unrest. Europe knows it will never see its banks made whole after a Greek default. The ECB needs the next few weeks to figure out how to front-load as much quantitative easing as possible into Greek bonds.
Childish fairy tales are now okay for grown-ups. European parliaments will sleep for the next four months telling themselves a bedtime story of prompt Greek payments, generous German taxpayers, and kindly central bankers. The hard wake-up will be a surprise thunderstorm breaking in the middle of the night.
Tuesday's approval of Greece's proposed austerity compliance plan was a farce beyond all belief. European finance ministers somehow gave it their seal of approval with a straight face. Whether they were complicit in drafting it before Greece pretended to own it is a moot point. Every responsible adult at the European financial table is now engaging in mass self-deception, national deception, and continental deception.
Here's a trumpet blast of reality for any Europeans still asleep. Greece has no intention of ever paying its debts or fulfilling its austerity promises. Athens' capitulation to the troika's new bailout terms was a feint to stop Greek bank runs. The Tsipras regime knows it will run out of money but needs another few weeks or months to turn disorderly starvation into something that does not lead to civil unrest. Europe knows it will never see its banks made whole after a Greek default. The ECB needs the next few weeks to figure out how to front-load as much quantitative easing as possible into Greek bonds.
Childish fairy tales are now okay for grown-ups. European parliaments will sleep for the next four months telling themselves a bedtime story of prompt Greek payments, generous German taxpayers, and kindly central bankers. The hard wake-up will be a surprise thunderstorm breaking in the middle of the night.
Thursday, February 26, 2015
The Choices Between Statistical Programming Languages
I recently attended a talk where an audience member posed a question to an experienced economist about which programming language is best for statistics. The expert selected Python over MATLAB and Mathematica, and I think I heard the R language as one other choice (it wasn't clear). Young professionals just entering the workforce with high-end skills take the choices between those languages very seriously.
MATLAB iterates the manual matrix programming most top MBA programs include in their decision science classes. It interfaces with both modern languages like C++ and legacy languages like Fortran. Some programmers, like our expert above, believe Python can replace MATLAB in transforming data into graphical displays. Maybe it depends on the profession. I have recently spoken with a hedge fund manager who swears by Python for its ease of use, comparable to MS Excel functions. That's two anecdotal votes for Python in a week.
Mathematica's Wolfram language is almost as old as MATLAB, and just as heavily used in the sciences and engineering. They both have open source competition. R is a more recent innovation with open source origins. I have heard R mentioned at tech conferences where hackathon alums discuss the techniques they used during competition. Looking at snippets of R syntax I found on the web reminds me of the very basic DOS programming I did in an undergraduate business class in the early 1990s. Comparing all of these to Python's supposed symbolic ease of use entices me to learn more about Python first.
Hedge fund quants know financial engineering, where high-level programming languages like Python are necessary. I have long been skeptical of the value added by hedge funds. Knowing their preferred lingo should make critiques of their approaches more credible. I still expect a market cataclysm to shake out almost all hedge funds as redundant. Any investment firms that survive will attract the best quant talent and programming will still be a valuable skill. The key for those few quants who keep their jobs will be knowing the limits of financial engineering in marking risk/reward tradeoffs. Economics are human-caused events, not natural phenomena governed by hard math. Black Swans can still fly right through any Python script.
I am not yet at a decision point where I am ready to learn a computer programming language, but the changing demands of the finance sector may require such an adaptation. Those of us in the middle of our careers need to seriously consider learning the basics of some of these languages. None of the four languages I mentioned were in the curricula of my MBA courses but they are now recognized as de rigeur for enterprise data professionals. The concept of coding as basic literacy is on many thought leaders' lips. Young people who can do it are far ahead of middle-aged people in adapting to a high-value workplace. Coding as literacy leads to a Big Data career.
MATLAB iterates the manual matrix programming most top MBA programs include in their decision science classes. It interfaces with both modern languages like C++ and legacy languages like Fortran. Some programmers, like our expert above, believe Python can replace MATLAB in transforming data into graphical displays. Maybe it depends on the profession. I have recently spoken with a hedge fund manager who swears by Python for its ease of use, comparable to MS Excel functions. That's two anecdotal votes for Python in a week.
Mathematica's Wolfram language is almost as old as MATLAB, and just as heavily used in the sciences and engineering. They both have open source competition. R is a more recent innovation with open source origins. I have heard R mentioned at tech conferences where hackathon alums discuss the techniques they used during competition. Looking at snippets of R syntax I found on the web reminds me of the very basic DOS programming I did in an undergraduate business class in the early 1990s. Comparing all of these to Python's supposed symbolic ease of use entices me to learn more about Python first.
Hedge fund quants know financial engineering, where high-level programming languages like Python are necessary. I have long been skeptical of the value added by hedge funds. Knowing their preferred lingo should make critiques of their approaches more credible. I still expect a market cataclysm to shake out almost all hedge funds as redundant. Any investment firms that survive will attract the best quant talent and programming will still be a valuable skill. The key for those few quants who keep their jobs will be knowing the limits of financial engineering in marking risk/reward tradeoffs. Economics are human-caused events, not natural phenomena governed by hard math. Black Swans can still fly right through any Python script.
I am not yet at a decision point where I am ready to learn a computer programming language, but the changing demands of the finance sector may require such an adaptation. Those of us in the middle of our careers need to seriously consider learning the basics of some of these languages. None of the four languages I mentioned were in the curricula of my MBA courses but they are now recognized as de rigeur for enterprise data professionals. The concept of coding as basic literacy is on many thought leaders' lips. Young people who can do it are far ahead of middle-aged people in adapting to a high-value workplace. Coding as literacy leads to a Big Data career.
Wednesday, February 25, 2015
Scraping The Bottom Of The WTI Oil Price Barrel In 2015
Energy sector investors are waiting for a bottom in oil prices. Industrial energy users are looking for a hard price to use as a benchmark for hedging their consumption. A generation's worth of history allows us to make an educated guess about where the bottom price of the 2015 oil market glut may appear.
The last major bear market in crude oil was in the late 1980s, when a collapsing WTI price cut the legs out from under US independent drillers. The collapse precipitated a crash in Texas real estate and triggered the infamous savings and loan crisis. The US DOE's EIA maintains a database of historical WTI prices. The absolute bottom in that 1980s bust was when the WTI spot price touched $10.83 on July 23 and July 25, 1986. I had to eyeball the data series but I'm pretty sure I didn't see any lower price. Someone with more time on their hands is welcome to search for a lower price at any other time in US history.
Let's find out what the equivalent of that price would be in today's inflation-adjusted dollars. Using the Minneapolis Fed CPI calculator gives us $23.69 in 2015. Using the BLS CPI calculator gives us $23.39 in 2014, the most recent year available. Kudos to the Fed for getting the CPI adjustment even closer to the present day than the BLS. Anyway, this gives us an idea as to how much farther the WTI price can fall before it touches a truly historic bottom. The WTI Cushing spot price for February 23, 2015 (the EIA's most recent date) was $49.56, more than twice the inflation-adjusted 1986 bottom.
The price of oil does not have to fall that far before it recovers. Alternatively, it could fall even farther and break all historical records if demand destruction continues in the developed world and US shale producers keep pumping rather shut down in an orderly manner. The global supply glut of oil will not close to meet demand at a natural equilibrium until at least some time later in 2015. Investors hunting for bargain prices among oil producing companies are not waiting that long to begin their search.
The last major bear market in crude oil was in the late 1980s, when a collapsing WTI price cut the legs out from under US independent drillers. The collapse precipitated a crash in Texas real estate and triggered the infamous savings and loan crisis. The US DOE's EIA maintains a database of historical WTI prices. The absolute bottom in that 1980s bust was when the WTI spot price touched $10.83 on July 23 and July 25, 1986. I had to eyeball the data series but I'm pretty sure I didn't see any lower price. Someone with more time on their hands is welcome to search for a lower price at any other time in US history.
Let's find out what the equivalent of that price would be in today's inflation-adjusted dollars. Using the Minneapolis Fed CPI calculator gives us $23.69 in 2015. Using the BLS CPI calculator gives us $23.39 in 2014, the most recent year available. Kudos to the Fed for getting the CPI adjustment even closer to the present day than the BLS. Anyway, this gives us an idea as to how much farther the WTI price can fall before it touches a truly historic bottom. The WTI Cushing spot price for February 23, 2015 (the EIA's most recent date) was $49.56, more than twice the inflation-adjusted 1986 bottom.
The price of oil does not have to fall that far before it recovers. Alternatively, it could fall even farther and break all historical records if demand destruction continues in the developed world and US shale producers keep pumping rather shut down in an orderly manner. The global supply glut of oil will not close to meet demand at a natural equilibrium until at least some time later in 2015. Investors hunting for bargain prices among oil producing companies are not waiting that long to begin their search.
Tuesday, February 24, 2015
Basic Politeness Matters In Business
Being polite may be going out of style. It may be the zeitgeist. Decades of poor parenting have elevated self-esteem over self-control. The instant gratification of fast food, online shopping, streaming movies, and whatever else our smartphones can find for us has bred modern Americans to exhibit basic contempt for activities requiring patience. Brutish behaviors have a cost measured in adult reputations tarnished and business opportunities missed. Good manners should make for good business. Just examine the costs of rudeness yourself and compare them to the payoffs for doing the right thing.
Politeness shows a respect for another person's worth. I have attended private events where loudmouths continue to socialize even after a featured speaker has ascended the podium to say what everyone came to hear. It is truly a head-scratching spectacle to watch an educated crowd ignore a feature event, even when some of them paid for the privilege. Quiet down, folks.
Arriving on time shows respect for another person's time. The worst supervisors in my career had a bad habit of making me wait for our appointed meetings while they socialized or wasted time in front of my face. They sent me a clear message that whatever they asked me to bring to the table was not worth their time. One superior never even showed up to a meeting she directed me to attend, even though I had to drive far out of my way. Bad leaders enjoy wasting people's time. Good subordinates run away from those superiors as soon as they witness sociopathic behavior.
Educated San Franciscans can change for the better. The opening night galas of San Francisco's major performing arts companies typically start at least five minutes late because too many people take too long to get to their seats. I wonder if the people arriving late really respect the arts so much by making the performers wait. The VIPs in box seats can lead us by example even if they're not causing the problem.
Alfidi Capital has not always been kind to humans who misbehave. Adults should know better but those who don't sometimes invite my wrath online. My behavior in person is usually more amenable even though I no longer need to please anyone to have a career. I do behave politely when I pay my bills and taxes on time, or when I attend social gatherings that require my silence. Manners pay dividends. It really is that simple.
Politeness shows a respect for another person's worth. I have attended private events where loudmouths continue to socialize even after a featured speaker has ascended the podium to say what everyone came to hear. It is truly a head-scratching spectacle to watch an educated crowd ignore a feature event, even when some of them paid for the privilege. Quiet down, folks.
Arriving on time shows respect for another person's time. The worst supervisors in my career had a bad habit of making me wait for our appointed meetings while they socialized or wasted time in front of my face. They sent me a clear message that whatever they asked me to bring to the table was not worth their time. One superior never even showed up to a meeting she directed me to attend, even though I had to drive far out of my way. Bad leaders enjoy wasting people's time. Good subordinates run away from those superiors as soon as they witness sociopathic behavior.
Educated San Franciscans can change for the better. The opening night galas of San Francisco's major performing arts companies typically start at least five minutes late because too many people take too long to get to their seats. I wonder if the people arriving late really respect the arts so much by making the performers wait. The VIPs in box seats can lead us by example even if they're not causing the problem.
Alfidi Capital has not always been kind to humans who misbehave. Adults should know better but those who don't sometimes invite my wrath online. My behavior in person is usually more amenable even though I no longer need to please anyone to have a career. I do behave politely when I pay my bills and taxes on time, or when I attend social gatherings that require my silence. Manners pay dividends. It really is that simple.
Monday, February 23, 2015
San Francisco Needs A 21st-Century International Exposition
Tonight I attended a panel discussion at the Commonwealth Club commemorating the 100th year after the Panama-Pacific International Exposition. All that I have read about that particular World's Fair makes me wish I had been alive in 1915 to attend it. San Franciscans hunger for a recreation of their glorious past. The obvious answer is to stage a new World's Fair that takes the PPIE spirit to a whole new level for the 21st Century.
The commemorations of this event began last Saturday with our Mayor and some historical reenactors at the Palace of Fine Arts. I missed the fun and I'm pretty sure only a few thousand people could have attended. Contrast that with the multitudes who came from around the United States to attend the PPIE in 1915. The Commonwealth Club's panel of historians noted that the PPIE sponsors planned ahead to build hotels and railroad connections that facilitated the transit of tourists with money to spend. The natural economic stimulus multiplied San Francisco's post-earthquake rebuilding effort.
One of the panel's final observations was to consider whether convening another fair like the PPIE would be feasible today. The attraction of commercial conventions like CES in Las Vegas is obvious. People today still like to travel to conclaves where they can personally witness technology exhibits, just as they did when the PPIE displayed that era's mechanical and electrical marvels. The difference today is the prevalence of virtualization as a substitute for a physical presence. Virtual reality interfaces like Oculus Rift promise to make the remote manipulation of physical objects an everyday activity. Convening a future World's Fair here in the Bay Area must take this into account.
Here's my modest proposal for a Virtual San Francisco World's Fair. The "virtual" part needs enough online activities to entice a Web audience to participate. Publishing some addictive freemium games online, with instant machine language translation for non-English speakers, solves the problem of generating interest in developing countries whose people cannot come to a physical World's Fair. Linking the virtual stuff to geolocated events in San Francisco closes the circle for tourists with the money and means to travel here.
The panelists mentioned that World's Fairs and other mass events tend to be tied to a local redevelopment effort. The most obvious candidate neighborhood for redevelopment in San Francisco is the Hunter's Point Naval Shipyard. It has plenty of space for the local component of a virtual World's Fair. A few tens of millions to clean up some industrial waste is all it takes to make a pristine fairground.
World's Fairs continue today with little attention in mass media. They lack attention because they have become sterile corporate blah-fests that do not capture the spirit of the times. Notable World's Fairs like the PPIE, the 1939 New York World's Fair, and the 1939 Golden Gate International Exposition succeeded because they captured the zeitgeist of their respective eras. The PPIE heralded the end of the Belle Epoque, the Victorian Era, and the Gilded Age. World War One brought the modern era into being and the PPIE's organizers were wise not to postpone their fair as war clouds gathered.
When San Francisco decides to hold its next International Exposition, it must be timed to match the Fourth Turning general dynamics that drive history. The Strauss-Howe generational saeculum has entered a crisis period in most of the Anglo-West. The crisis will not be resolved without a world-shattering cataclysm, with Indian and Chinese demographic confrontations over the food-water-energy security nexus as the most likely trigger. San Francisco should plan its Expo for a date when that future crisis has passed. Hunter's Point will be derelict for years to come. It will be vacant and ready for the world's technology exhibits in a post-crisis cultural high. San Francisco will then reclaim its role as America's Pacific Rim gateway, and a postwar Pacific Rim will look to America for ways to rebuild.
The commemorations of this event began last Saturday with our Mayor and some historical reenactors at the Palace of Fine Arts. I missed the fun and I'm pretty sure only a few thousand people could have attended. Contrast that with the multitudes who came from around the United States to attend the PPIE in 1915. The Commonwealth Club's panel of historians noted that the PPIE sponsors planned ahead to build hotels and railroad connections that facilitated the transit of tourists with money to spend. The natural economic stimulus multiplied San Francisco's post-earthquake rebuilding effort.
One of the panel's final observations was to consider whether convening another fair like the PPIE would be feasible today. The attraction of commercial conventions like CES in Las Vegas is obvious. People today still like to travel to conclaves where they can personally witness technology exhibits, just as they did when the PPIE displayed that era's mechanical and electrical marvels. The difference today is the prevalence of virtualization as a substitute for a physical presence. Virtual reality interfaces like Oculus Rift promise to make the remote manipulation of physical objects an everyday activity. Convening a future World's Fair here in the Bay Area must take this into account.
Here's my modest proposal for a Virtual San Francisco World's Fair. The "virtual" part needs enough online activities to entice a Web audience to participate. Publishing some addictive freemium games online, with instant machine language translation for non-English speakers, solves the problem of generating interest in developing countries whose people cannot come to a physical World's Fair. Linking the virtual stuff to geolocated events in San Francisco closes the circle for tourists with the money and means to travel here.
The panelists mentioned that World's Fairs and other mass events tend to be tied to a local redevelopment effort. The most obvious candidate neighborhood for redevelopment in San Francisco is the Hunter's Point Naval Shipyard. It has plenty of space for the local component of a virtual World's Fair. A few tens of millions to clean up some industrial waste is all it takes to make a pristine fairground.
World's Fairs continue today with little attention in mass media. They lack attention because they have become sterile corporate blah-fests that do not capture the spirit of the times. Notable World's Fairs like the PPIE, the 1939 New York World's Fair, and the 1939 Golden Gate International Exposition succeeded because they captured the zeitgeist of their respective eras. The PPIE heralded the end of the Belle Epoque, the Victorian Era, and the Gilded Age. World War One brought the modern era into being and the PPIE's organizers were wise not to postpone their fair as war clouds gathered.
When San Francisco decides to hold its next International Exposition, it must be timed to match the Fourth Turning general dynamics that drive history. The Strauss-Howe generational saeculum has entered a crisis period in most of the Anglo-West. The crisis will not be resolved without a world-shattering cataclysm, with Indian and Chinese demographic confrontations over the food-water-energy security nexus as the most likely trigger. San Francisco should plan its Expo for a date when that future crisis has passed. Hunter's Point will be derelict for years to come. It will be vacant and ready for the world's technology exhibits in a post-crisis cultural high. San Francisco will then reclaim its role as America's Pacific Rim gateway, and a postwar Pacific Rim will look to America for ways to rebuild.
Sunday, February 22, 2015
The Limerick of Finance for 02/22/15
Greece must make a new reform list
Troika reviews drafts to assist
The fine print will say
How much Europe will pay
An offer Greeks cannot resist
Troika reviews drafts to assist
The fine print will say
How much Europe will pay
An offer Greeks cannot resist
Saturday, February 21, 2015
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