Pomp & Surkanstance

10 August 2010

PS: Thinking small as the path to software engineering

In this episode, Michael Vax shares his strategy of keeping his software under continual use in a production environment to keep a agile engineering environment. It takes a re-thinking of software development, but by doing work in a series of very short, modular, sprints it is possible to improve quality and get direct customer feedback to avoid wasted effort building the wrong thing.

You can check out Michael's blog on efficient software development here: http://www.getelastic.com/

NOTE: Practical Software is the official podcast for the Software Engineering Productivity group on Linked:In. You can listen to other episodes of Practical Software.

PS: The language matters

In this episode, Richard Minerich tells why the language developers use can have a huge impact on their productivity. New high level languages, like F# (one of Richard's favourite languages), free engineers from much of the traditional drudgery leading to faster development cycles and better quality.

You can read more of Richard's ideas here: http://www.atalasoft.com/cs/blogs/RickM/

NOTE: Practical Software is the official podcast for the Software Engineering Productivity group on Linked:In. You can listen to other episodes of Practical Software.

PS: Software engineering productivity: more than just a measurement

In this episode, Timothy Fong explains how measuring software engineering productivity is not just a matter of counting lines of code. What good is it to release a bloated piece of software on schedule that is never used? Before you can even talk about productivity you have to first define your business goals.

You can write timothy at tim.fong@opshub.com to ask for a white paper on 3 principals to using metrics for large scale agile.

NOTE: Practical Software is the official podcast for the Software Engineering Productivity group on Linked:In. You can listen to other episodes of Practical Software.

04 August 2010

This Week on Bear radio: Kit Kitredge shows the way with deflationary frugality

In this episode we discuss how changing consumer preferences, and product substitution play a key role in the deflationary process. Already we see people downsizing their expectations, taking in boarders to their homes, and switching to lower priced substitutes for all kinds of things. It’s starting to look at lot like the Kit Kitredge movie, set in the 1930s. We also talk about how surprising it is to see how long the process of de-leveraging and mal-investment purge is taking.

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You can find all the Optimistic Bear shows here: Optimistic Bear

You can find all the Entrepreneurs Northwest shows here: Entrepreneurs Northwest

28 July 2010

This Week on Bear radio: Gold as antidote to uncertain times

In this episode Doug Eberhardt explains how gold should be a part of every portfolio, providing safety in both inflation and deflation. Additionally, Doug compares the deflationary experience in Japan to what is happening in the US. Our panelists also discuss how there is no economic theory that adequately explains why nations with increasing money supplies (like Japan) can experience deflation.

You can c heck out Doug’s web site for more insights on deflation and advice in gold investing.

23 July 2010

Linked:Seattle Radio - An insider's view of Microsoft's past and future

Listen to ex-Microsoft employees discuss how the company is addressing the challenges and opportunities before it today, and what lies in store. Is Microsoft headed to genteel decline, or is it about to embark on a new era of growth and technological development? Be sure to check out the Linked:Seattle community at http://bit.ly/LinkedSeattle.

You can also check out an article I wrote about my experiences at Microsoft here:
http://bit.ly/oOUh4

Listen to internet radio with Linked:Seattle Radio on Blog Talk Radio

NOTE: Click here for a list of all the Linked:Seattle radio show recordings. You can also check out my own "Entrepreneurs Northwest" podcast shows (http://bit.ly/epnwfeed).

21 July 2010

This Week on Bear radio: Options expiry shenanigans and summer doldrums

In this episode we discuss the strange way stocks behave on options expiry weeks and whether real action in the market will have to wait till the fall and the end of the summer doldrums. For good measure, we also talk about how recent finance reform legislation does nothing to prevent future financial panics.

14 July 2010

Japan: the picture of a multi-decade bear market

When most people think of bear markets they tend to imagine a relatively short-term affair that reaches a bottom, over a year or two, and then recovers for many years (or even decades) in the future. Bear markets, in short, are just temporary blips as stock markets (and economies) move on to ever greater heights. Japan’s experience with a bear market that is over 20 years old shows that these simplistic assumptions regarding bear markets don’t always hold true.

A close examination of the Nikkei stock index for the last 30 years is a harrowing study in how pernicious, and grinding, bear markets can be. What is perhaps the most shocking is to see that this multi-decade bear market was punctuated by periods of considerable recovery, and growth, which would last anywhere from 1 to 5 years. There were numerous times where the Nikkei rallied 50%, or even more than 100% over a span of several years, only to lose all those gains and fall into a deeper pit.

The persistent trend downward is unmistakable, standing some 75% lower than its 1989 height as of June 2010, but this masks the times where it looked quite convincingly as if Japan was finally turning the corner.

As the United States embarks on its own deflationary journey it is important not to lose sight of what has happened in places like Japan. It is quite probable that America will also see strong rallies, and periods of apparent recovery (lasting for years, in fact), only to see all those hopes dashed as the economy goes into yet a deeper funk to lower lows. Deflation is a slow process and does not go in a straight line.

This Week on Bear radio: The view from North Carolina

In this episode a caller from North Carolina tells us that the economy hasn't hit bottom there, and that from his perspective as a bank loan officer (with national exposure) a double-dip recession is already baked into the cards. We also delve into the profits and pitfalls of tax lien investing.

07 July 2010

This Week on Bear radio: Should congress borrow to fund unemployment insurance?

In this episode veteran Wall Street Banker, Bruce Krasting, joins us to talk about how the recent congressional legislation to extend unemployment benefits by borrowing even more money is the final straw. According to Bruce, unemployment insurance is small potatoes compared to the trillions in stimulus an bailouts that have been spent so far, but the insanity has to stop somewhere. Bruce also shares his view on how deflation is likely to win out in the short term, and his views on how emotion can irrationally drive individual stock prices high or low.

You can check out Bruce’s blog on finance at http://brucekrasting.blogspot.com/.

06 July 2010

Weekly Economics and Finance round-up

The Optimistic Bear discusses the week's economic and financial news with his guests. Is deflation or inflation up ahead? Has the economy turned the corner? What is going to happen to real-estate, commodities, stocks, or gold prices? Tune in to hear a deeper understanding of why things happen in the economy, and what it really means to you or your business.

02 July 2010

Linked:Seattle Radio - Entrepreneurship in Seattle

In this episode Paul Scarpa tells us about the challenges his startup is facing and Jennifer Cabala (of Seattle 2.0) tells us the attributes of successful entrepreneurs. We discuss the pros and cons of self-funding new ventures and the need to have a balanced approach that covers not only engineering but marketing and sales too. Be sure to visit the Linked:Seattle entrepreneurs group.

Listen to internet radio with Linked:Seattle Radio on Blog Talk Radio

NOTE: Click here for a list of all the Linked:Seattle radio show recordings. You can also check out my own "Entrepreneurs Northwest" podcast shows (http://bit.ly/epnwfeed).

30 June 2010

This Week on Bear radio: Can cosmology, technical indicators, or tea leaves tell market future?

In this episode we discuss which, if any, techniques are useful for predicting market directions. We talk about everything from cosmology and technical analysis to tea leaves. We also talk about growing problems with underfunded private and public pension plans.

24 June 2010

Linked:Seattle Radio: Seattle Job Search Mojo

In this episode of Linked:Seattle Radio, professional recruiter John Polhill guest hosts a discussion about "How to get your Successful Job Search & Interview Mojo back & get hired tomorrow." HR expert, and Linked:Seattle Career Center manager, Lesa Keller also joins the show with Matt Youngquist, a career coach in the Seattle area to offer their advice on job searches as well.

If you are wondering whether employers are only interesting in candidates who already have jobs, or if it is career limiting to take jobs beneath your qualifications, or just want to hear about how to keep your energy up as a job seeker, this is the show you need to hear.

Listen to internet radio with Linked:Seattle Radio on Blog Talk Radio

NOTE: The Linked:Seattle Career Center is the best place on LinkedIn to find jobs in Seattle and participate in discussions with area recruiters, career coaches, and job candidates. You can also check out Michael Surkan’s "Tales from the job search trenches" podcasts.

23 June 2010

This Week on Bear radio: All about stimulus - can government spending help economies?

In this episode we discuss stimulus, and whether government spending can jump-start moribund economies. We also explore whether the fact that significant technological advances have resulted from government funding demonstrate a role for the state in economic development.

21 June 2010

End Game - FSN Deflation interview with Robert Prechter

On June 19th the Financial Sense News Hour published a great interview with Robert Prechter, which goes in-depth into the reasons Prechter still feel that massive deflation lies in store for the economy.

This is another great resource for anyone who wants to understand the forces behind deflation, and why policy makers can't do anything about it.

18 June 2010

Blogging - the failsafe technique for creating business relationships

NOTE: You can watch my 10 minute video on how to use podcasting for growing business or finding a job here: http://bit.ly/podintro1

The key to any successful business, or career, is building useful (and productive) relationships. Unfortunately, building these relationships is no walk in the park, and takes time and dedication. You can attend networking events, ask for introductions, cold call, or any number of other strategies for meeting people.

All of these relationship and networking techniques have merit, but each person has to find the ones that fit best with our own personalities and needs. Building relationships in the entertainment industry might require different strategies than in petro-chemicals. Whole forests have been consumed to print books to offer advice.

To that end, I would like to add yet one more relationship building technique, tailored to the internet age, which I have slowly developed over the years. It is based on one simple idea: people like to know people who do something nice for them.

Admittedly, my strategy for building relationships requires considerable effort, but then there are no short-cuts when it comes to building productive, lasting, friendships. What I can say is that following these techniques will almost guarantee success in building the business relationships you need.

Blogging for friends

My strategy for building relationships start off with a blog. You have to create a blog focused around whatever industry, or field, in which you want to build relationships. If you want to get to know bankers, then start a blog about finance and banking. If you want to get to know people working in the consumer software space, create a blog about the software industry and consumer software trends.

There are lots of free blogging sites, and your blog articles don’t have to be lengthy treatise. The whole point of a blog is to give you a reason for contacting people. You can also expand to do podcasts, which is something I do quite a lot.

Make a list of topics

Create a list of potential blog topics for the next month. You can easily find topics by just browsing through articles on IT or engineering web sites. You can even watch the topics being discussed on LinkedIn groups, or social communities, to get ideas. For each idea, identify one or two articles that you can use as links for more information in a post.

Interview prospective customers

Find some good people to interview for the blog article you decide to write about. Simply write a message to several people you see on software engineering LinkedIn groups, who you think could be good customers (or useful contacts) and ask if they would allow you to interview them for a few minutes for a blog article you are writing.

Look at the people starting, and participating, in discussions on LinkedIn. These people are almost always willing to chat. Look at their profiles to see which ones might be particularly useful to have a relationship with. It’s absolutely fine if more than one person responds to your interview request. You can always quote more than one person in an article. Make sure the person you are going to interview sends you their direct e-mail address so you can communicate easier outside of LinkedIn. This is critical for being able to write them a recommendation later on.

All you have to do is schedule some time to talk with your new contact (i.e. the person who agrees to be interviewed) on the phone, and have a discussion with them around the subject you are writing your article on. Ask them for their thoughts and ideas. Do not start telling them how you think everything should be done. Keep the interview relatively short (15 or 20 minutes at most). It is fine to introduce yourself, mentioning that you work for a company that helps with software engineering projects, but DO NOT make a sales pitch. This interview is all about asking the contact for their ideas.

Make sure you write down what your guest says. Don’t forget to ask them for permission to quote them in your article.

Write the blog post

Once the interview is over, write the blog article. Keep it short and on point. Use quotes from the people you interviewed, and put their names in the article. Place a hyper-link on the name (of the person you are quoting) to their LinkedIn profile. You can also add some small text at the very bottom of the article saying how readers can get more information from the people you interviewed by going to their web site (i.e. and include the link to their business web site).

You should have a signature at the bottom of every post that has a link to your personal LinkedIn profile and Twitter feed.

Get approval for article

Send the text of your article to the people you are quoting for approval before you post it. Just send them an e-mail with a copy of the text, and ask them to confirm that what you are saying accurately reflects the discussion you had.

Post and promote

Once you get approval for the article, post it on the your blog and start promoting it. You should Tweet the article and place it on your Facebook page (if you don’t already have a Twitter or Facebook page, create them). In fact, you can setup an automatic feed that will Tweet and Facebook every article you post.

Post the link to the article (and a 2 sentence description) in the News section of all the LinkedIn groups you identify as being related to IT and software development.

You can keep re-Tweeting and re-posting the News links to the same articles. This keeps you articles in people’s minds. For example, once you have 5 or 6 blog posts, you can have someone keep cycling through the articles re-posting links to a different one on Twitter and LinkedIn groups every day. Today you would post the link to the article you wrote a month ago. Tomorrow you post the link to the second article you wrote, the day after that you post the link to the third article, and so on.

If you get really ambitious you can write an Internet press release for every article you write and post them to Help a Reporter Out or Pitchrate (which are free).

Give thanks

As soon as you post a new blog article, send an e-mail to the people you interviewed for the story, thanking them for their help. Send them the link to the story, and tell them they are welcome to use the link if they wish.

Make a recommendation

Write a LinkedIn recommendation for the people you interviewed for the blog article. Just write 2 or 3 sentences saying that you were impressed with how helpful the individual was in writing your blog article (include a shortened link to the article in your recommendation), and that this person’s deep knowledge on the subject was invaluable.

In order to accept your invitation, the recipient will first have to agree to connect with you on LinkedIn. It is virtually guaranteed that anyone you write a recommendation for will link with you.

Meet for coffee

At this stage, you now have built a relationship with the people you interviewed, and they have very positive feelings towards you. You can now leverage that goodwill to develop the relationship, ask for help, or whatever. Ask if you could take them out for a coffee. Ask for introductions to people you see in their contact list on LinkedIn.

Make your friends rich

One of the absolute best ways you can solidify your relationships is to actually make your friends rich by bringing them business. As your contacts grow, you should really think about ways to introduce the people you know to one another. If you know a small software firm that specializes in accounting software for oil companies, then introduce the IT manager of an oil company to him. If you are able to help a small company find new business, you have an amazingly good chance of helping out in fulfilling the contract by taking on work they can’t handle.

Podcasting is even better!

You can get even better results by turning interviews into podcasts. By recording your conversations (with permission), and posting the audio files to your blog, you can build a more intimate connection with both the person you speak with and your audience.

It is cheap and easy to record conversations these days. I use Skype and a free add-on utility (MP3 Skype Recorder) that automatically creates an MP3 file recording for my conversations.

You can check out my own podcast shows to get an idea of how I use this tool for both growing my career and finding business.

Entrepreneurs Northwest
Tales from the job search trenches
Practical Software
Linked:Seattle Radio

I even have a show on economics which is strictly as a hobby.

The Optimistic Bear

I am eager to make a presentation of the value of podcasting for networking to any group that might be interested. I can speak in person to groups in the greater Puget Sound area and can give webinars to groups further afield. Just e-mail podcasting@surkan.com if you would like to inquire about having me speak.

16 June 2010

This Week on Bear radio: Manias, portfolio diversification, and income inequality

In this episode we discuss what role governments play in bubbles and whether diversified investment portfolios make sense when all asset classes rise and fall at the same time. We also investigate what growing disparities between the wealth of the rich and middle classes say about the economy.

10 June 2010

In the defense of BP

In the court of public opinion, the verdict for British Petroleum is already in: guilty. The vitriol, and polemics, spewing out against British Petroleum over the Gulf coast oil spill has reached epic proportions. Politicians, pundits, and even individuals, are frothing at the mouth with anger at the evil corporation that ruining both the economy and environment.

Policy makers are threatening to fine, and tax, BP into oblivion. The general public is aghast that a big corporation could take such liberties with the public trust.

It's about time that someone stood up for poor, beleaguered, BP!

I wouldn't want to give the impression that I think BP is a well managed company, or that their poor decisions didn't contribute to the Gulf disaster. However, it's important that we don't lose perspective in the rush to castigate BP, and vent our spleens.

For one thing, the impacts from oil spills are rarely as long lasting, or disruptive, as they first appear. The oil that first washes up on shore, and kills thousands of fish, birds and sea mammals, is very dramatic. Ten, or even five, years later things look differently.

The 1989 Exxon Valdez spill in Alaska proved to be less harmful on the environment, and the local economies, than many people had predicted during the time of the initial accident. In fact, some reports show that more damage may have been caused by the clean-up than the spill itself. Ironically, many of the loudest complaints about the Valdez spill were from local businesses who saw the cost of labour skyrocket as many locals opted to work in high-paying clean-up crews rather than toil for the lower local wages.

True, there are disagreements as to the real long term impacts of the Valdeez spill (i.e. you can't prove what the population of salmon would have been without the spill when there are so many other factors at play). But these disagreements in the impact assessments of the Valdeez spill actually prove my point: if the damage was truly catastrophic there wouldn't be any argument.

Unfortunately, we are on the cusp of a major over-reaction to the spill. If oil exploration is curtailed by newly empowered (and zealous) regulators, we will see energy prices remain higher than they otherwise would for decades. Killing BP out of spite will also send a chill down the spine of every oil company, causing them to reduce exploration. Why drill for new wells when the consequence of a failure is death?

09 June 2010

This Week on Bear radio: The bubble in Canada and Isaac Asimov

In this episode special guest Matt Stiles fills us in on the asset bubble and bullish fever that is raging in Canada. We also talk how Isaac Asimov's fictional idea of scientifically controlling human behaviour is symptomatic of broader desires to manage the economy.

04 June 2010

Oil prices tumble as spill worsens. Who'd have thought?

Even as oil spouts unceasingly into the gulf of Mexico, in one of the worst spills ever, prices are falling. This is quite a change from the behaviour we've seen in the last several years, where even the hint of an oil spill would cause prices to spike, as investors fretted the loss of precious supplies.

If anything, one would think that the backlash against oil that is being stirred up by this environmental catastrophe would be driving prices through the roof, since all the new tough government regulatory changes are going to greatly restrict new exploration and future supply.

This calls into question the whole hypthesis that it was dwindling supplies which were driving oil prices up in the first place. To all those peak oil adherents out there, I regret to inform you that it is speculation which has been the main force in rising prices in recent years, not a fall in supply. Just look at the vast fleets of tankers being used to store oil on the hope that prices will rise even more.

When you add in the drop in demand that is occuring due to a slowing global economy, there is more than enough potential for oil prices to drop significantly more.

In the 1970s many people thought oil prices would just keep rising forever only to see them crash, and stay suppressed for 20 years. It looks like history may be repeating.

03 June 2010

PS: Agile gone global

In this episde, Bhavesh Ved explains how to manage geographically disperse software teams with a distributed Agile process. When teams are spread out some of the traditional approaches to Agile break down.

You can check out Bhavesh's engineering firm at http://www.xoriant.com/.

NOTE: Practical Software is the official podcast for the Software Engineering Productivity group on Linked:In. You can listen to other episodes of Practical Software.

02 June 2010

This Week on Bear radio: The money supply and trading systems.

In this episode we talk about the inevitable failure of any trading system and explore the definition of the "money supply". Panelists give their take on why the money supply is shrinking despite massive government printing of cash.

26 May 2010

This Week on Bear radio: Are unions really responsible for government overspending?

In this episode we talk about unions, and what responsibility they bear for pushing governments into insolvency. There is also in-depth discussion on market technical indicators, and what they portend for trends in the near term.

23 May 2010

Let’s give drug dealers what they want

I have long been an advocate of drug legalization, believing that it not only wastes huge amounts of resources on something that can’t be stopped as well as having a corrosive impact on society, driving otherwise law-abiding people into a world of illegality.

My views on this haven’t changed, but hearing the outcry over the suicide of a youthful Canadian drug smuggler, Samuel Brown, has made me want to distance myself from the broader legalization movements. For one thing, I don’t believe this young man deserves our sympathy. He was a willing participant in an illegal trade, and while I believe in legalization, I have never supported the people who are in this business. If anything, the whole reason I believe in legalization is so that these unscrupulous characters will lose the ability to make as much money as they do, which makes them such menaces to society.

When reading over the numerous internet comments around Mr Brown’s death, I can’t help but notice that a great many of these people (particularly those from Canada), just want to be able to pursue the drug trade, and get rich without the risk of getting caught by those evil American lawmen. All the righteous indignation in Nelson over Samuel’s death makes my blood boil. After all, it is the uncouth monsters who run grow-ops, and ancillary drug-trade industries in BC who are responsible for creating such a brutal environment where young men and women risk their lives in the pursuit of an easy buck.

This just makes me wish all the more fervently for true drug legalization. Then all those holier-than-thou drug-operators in BC (and wherever else they may reside) will find themselves out of business overnight. If the US really wants to have its revenge on the foreign drug producers, filling it’s streets with crime, they should just legalize the goods. Not only would such a move utterly destroy communities like Nelson overnight, but it would likewise undermine demagogues like Evo Morales (the president of Bolivia) without so much as firing a gun.

I don’t believe in legalization because I like drugs. I stand for legalization because I despise the entire drug sub-culture, and the people who pervert society through making easy money off of the illicit trade.

20 May 2010

Blaming the messenger

Wolfgang Schaeuble, the German finance minister, has figured out the reason financial markets are tanking. The problem, of course, is the markets themselves.

I’m convinced the markets are really out of control. That is why we need really
effective regulation, in the sense of creating a properly functioning market
mechanism.

The solution, according to Herr Schaeble, is more extensive regulation, and some kind of transaction tax, which will make it much more costly for evil speculators to disrupt the plans of great nations.

According to this form of logic, I suppose we should start blaming fevers for illnesses rather than the underlying disease. This kind of talk is nothing more than populist claptrap, and not only mis-represents what is happening in the economy (and how markets work), but will very likely lead to policies that will only make things worse.

Transaction taxes, and greater regulation, is a sure-fire way to strangle the financial markets even more, and convince investors and financial institutions to just sit on their cash rather then take any sort of risk.

I'll be the first to admit that markets don't always move in directions that "make sense" at the time. I was baffled for years as to why stocks kept rising when the underlying assets, and economies, were getting weaker. But markets tend to overshoot, and make up for lost time, when they do react. Just where was Wolfgang when markets were irrationally rallying? It speaks volumes that markets only get blamed when prices are in decline.

Quite simple, the global markets aren't going to recover until all the bad debt has been purged from the system. Unfortunately, there have been so many mal-investments made over the last 15 years of credit binging (on everything from empty Chinese mega-malls, to US houses and Greek bonds), that there is a LOT more pain ahead. No amount of scapegoating will change this fact.

What finance ministers ought to really be doing is finding ways to make th liquidation, and dismemberment, of banks and companies as smooth as possible, so that the process of debt write-offs can get itself over as quickly as possible. Let's stop repeating the mistakes Japan has been making for 20 years, by failing to shut down insolvent banks and corporations (or forcing them to mark their assets to market), and continually pumping stimulus into a corpse.

LS: How to succeed as an entrepreneur in Seattle

In this episode of Linked:Seattle radio, we talk about entrepreneurship in Seattle. Seattle is a great town for entrepreneurs. There are a lot of associations, and resources available. Charlotte Wintermann and Ian Lurie share their experiences with starting businesses and answer questions about resources that are available to Seattle entrepreneurs.

You can check out the Linked:Seattle entrepreneur group for further information on resources, and to join in the discussions with other business people.

NOTE: Click here for a list of all the Linked:Seattle radio show recordings. You can also check out my own "Entrepreneurs Northwest" podcast shows (http://bit.ly/epnwfeed).

job search tales: Plan your job search as well as your vacation

In this episode Cindy Pain explains how a little bit of preparation, and research, can go a long way to creating a successful job search. Put at least as much effort planning your strategy for getting a new job as you do in planning a vacation. Cindy also provides insights on interviews: once you've got that interview, the job is already yours, just don't lose it.

You can check out Cindy's career consulting firm at http://www.lhh.com/.

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NOTE: Please contact Michael if you are interested in being a guest on "Tales from the job search trenches" podcasts. Michael would like to discuss your job search strategy, and brainstorm ways to improve it with you.

19 May 2010

This Week on Bear radio: The Euro end-game, and China as leading indicator

In this episode we discuss the possible end-game of the Euro, the future of interest rates, and examine how eerily the Shanghai stock exchange has been a leading indicator for the US markets in the last few years.

15 May 2010

Linked:Seattle radio - Finding a job in Seattle

In this very first Linked:Seattle radio show, Michael speaks with Jordan Shaw and Lesa Keller about looking for jobs in Seattle. We answer calls from job seekers, and share tips that can be useful to all candidates.

12 May 2010

PS: Software goes Hollywood

In this episode, Daniel Stieglitz tells us about how writing software for the media industry has challenges all of its own. Requirements can change on a dime, and projects need to be turned around in a matter of hours. Daniel's firm has managed to deal with this by building flexible applications that are easily customizable (often by the users themselves) through scripting.

You can check out Daniel's software company at http://www.stainlesscode.com/.

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NOTE: Practical Software is the official podcast for the Software Engineering Productivity group on Linked:In. You can listen to other episodes of Practical Software. Other content for the SEP group is stored in our resource center.

PS: Good software starts with business requirements

In this episde, Tony Nicholls explains how the first step in any successful software engineering project is to have a good understanding of the business requirements.

You can check out Tony's IT consultancy at http://greatideaz.com/.

This Week on Bear radio: Did the pan-European bail-out news cause the rally?

In this episode, the Optimistic Bear, and guests, ask if this week's market rally was caused by the pan-European bail-out announced over the week-end, and whether the markets have turned the corner. The frequent "coincidence" of market news and stock moves is revealed.

11 May 2010

ECS intro podcasts

These are the three introductory podcasts Michael has recorded for use in promoting Effective Communications Services.

Episode 1: Social Networking as a marketing tool

Learn how social networks can be used as an effective tool for all businesses.

Episode 2: Creating good content is the cornerstone of marketing on social networks

Michael discusses how the first step in effective social network marketing is to have good content.

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Episode 3: Social networks provide a new approach to direct marketing

Discover how social networks can be used to conduct highly targeted, and successful, direct marketing campaigns with social networks. Instead of SPAMing, you can use social networks to reach out directly to the people who would be interested in hearing about your business.

Michael: The Model Job Seeker

Matt Youngquist wrote a very flattering piece on his career coaching blog, highlighting my podcasting and entrepreneurial efforts. Who'd have thunk that I would be cited as an example for others to emulate?

If nothing else, hearing such kind words certainly buoys my spirits, which can take a drubbing now and again, as I keep slogging away with a lengthy job search.

As a “new media” aficionado and somebody who had always prided himself on proactive thinking and creative problem-solving, he decided the best path to his career future would be to go on offense, rather than defense.

The result? After setting up a simple blog portal, Pomp & Surkanstance, Michael started reaching out to dozens of local entrepreneurs, technology luminaries, and business leaders — not to ask them for a job, but to ask to interview them for a special series of podcasts he had decided to start producing. He branded this project “Entrepreneurs Northwest” and found that his invitations were usually received with open arms...

So if you’re in transition and feeling a bit rudderless at the moment, I’ve got just three words for you. Be like Mike. Go on offense. Create momentum. Find a way to start working on something, even if it’s not a revenue-producing something. As any career coach worth their salt could tell you, the real opportunities aren’t found sitting behind a computer, they’re found out in the market and you find them by talking to lots and lots of people. So conjure up your own project that will facilitate some relevant conversations — and go for it!

You can read the full article on Matt's site.

10 May 2010

The business that succeeds only through failure

ElliottWave International has long been my favourite economic newsletter, producing insights, and viewpoints that are to be found no where else. They called the housing bubble years before the top. They identified the house of cards (and credit) upon which the global financial system was based.

Even more profoundly, EWI has done ground-breaking work in demonstrating that it is group psychology, and the herding instinct, that drives events (and the economy), not the other way around.

Unfortunately, as insightful and prescient as EWI has been over the years, I can't help but notice that their very own newsletter business itself will almost certainly vanish if their predictions hold water. Ironically, the only way EWI will succeed as a going concern is if their call for a deflationary depression, and the collapse of nearly every asset class, is wrong. In a world where virtually every asset has fallen by 90% or more, precious few souls will be interested in paying for investment advice.

Just look at financial news services in the 1930s (a time which EWI frequently refers to for guidance on what to expect in the years ahead). During the great depression, stocks became thinly traded and the average middle class American virtually disavowed investing altogether, focussing on bonds and simple savings for over a generation. If the Dow were to plunge below 1000 again, and remain there for years, a similar phenomena would occur.

Moreover, EWI itself proclaims that investors should be in cash, and stay there for many years. Assuming this advice is correct, there is little reason for anyone to continue paying for new reports when the advice will remain unchanged for years to come.

Here's to hoping that there will still be some new investment advice worth writing about, even if America were to experience a depression to rival the 1930s. Otherwise I will lose the precious voice of independent, and intelligent, thought I have come to look forward to every month.

Yet another threat to the Euro

There has been a great deal of speculation as to whether the Euro might come unglued if one of the member nations were to either be expelled, or leave the currency bloc in its own right. However, it occurs to me that a very real threat to the Euro might come from a completely unexpected quarter: nations who are members of the European Union, but not the Euro currency (like Sweden and the UK).

According to the standard hypothesis, it is merely a matter of time before Germany gets fed up enough with bailing out weaker economies that they decide to sever the weakest link, or that the weakest link (e.g. Greece) might bolt anyway, in order to avail itself of options which which are currently prohibited by the Euro rules . It may be far more palatable on the domestic political front to devalue the currency, or simply default on debt, than to implement strident fiscal austerity measures.

This theory seems pretty compelling, and could very well come to pass. On the other hand, there is a palpable threat to the Euro, from EU member states that never joined the common currency, that has gone virtually unnoticed. In short, it is possible that strains from dealing with Euro currency problems may lead one (or more), of the non-Euro countries to bolt from the European Union altogether.

At first blush this seems crazy. EU nations have such a close economic arrangement, that leaving the free trade zone would have extremely deleterious economic effects. On the other hand, what the desperate measures that Euro nations are exploring, as they struggle to stave off disaster could potentially lead to precisely this kind of almost unthinkable result.

For example, there has been recent talk of Euro member nations forcing an emergency vote in European Union government sessions, using simple majority rule principals, to force even non Euro members to participate in the Euro bailout. If such a thing were ever to happen, and countries like the United Kingdom and Sweden (who never joined the Euro to begin with) were obligated to pay for bailing out the Euro currency, the political backlash could be truly frightening. Considering how luke-warm countries like the UK have always been to the EU, forcing them to participate in bailing out the Euro could push things over the edge.

And just what, pray tell, would happen if the UK were to secede from the EU? It would undoudbtedly spread fear and economic panic far and wide. The Euro would likely be toast overnight. Instead of merely dealing with the calamity of an unravelling Euro currency, the departure of a nation from the EU could undermine more than 60 years of painstakingly crafted European unity. Certainly it is inconcievable that a civil war could break out, with the remaining EU members refusing to allow other members to depart, but the psychological damage would be enormous nonetheless.

Of course, the EU could very well be in jeapardy even if there is no revolt amongst non-Euro nations. The bad blood that will exist upon the departure of any Euro member nation from the currency (which is looking increasingly inevitable) will make running the EU an even more difficult proposition than it already is. After a messy currency divorce, it is hard to envision that the previously married parties will be able to cooperate on a broader EU level.

Perhaps the future of the Euro isn't the only thing we should be worried about.

07 May 2010

The True Lesson from Greek Debt

The deeper lesson in the Greek debt debacle is that welfare states paint themselves into a corner until they reach a tipping point of no return. All democratic, debt-ridden countries are heading for the same fate, and it is too painful and unpopular for governments to take the necessary austerity measures to avoid collapse. Any politicians proposing austerity measures will lose the votes of those who receive the benefits of government largesse. Once the group of people who believe they receive more from government than they pay reaches a majority, collapse is assured.

The political candidate's dilemma is: propose austerity and not get elected, or run on a free lunch campaign, get elected, and perhaps try to slip a little austerity in with the largesse. Even those who propose austerity as candidates tend to take little substantive action against it once they are elected. Note that the worst fate a politician faces by over-spending is getting elected out of office. If austerity policies guarantee such evictions, then largesse in the hope that the consequences will fall on a future government seems to be the best option.

Externally enforced austerity only works temporarily until either a new election, where communist candidates become attractive, or until the uprisings in the street reach a tipping point, forcing the government to declare bankruptcy. Either way, the government debt will ultimately go unpaid, and the currency will be devalued. In short, external bailouts, much like chapter 11 bankruptcy protection and domestic corporate bailouts, merely tax nations that aren't yet quite as bad off and delay the inevitable collapse. By taxing the healthier nations, such bailouts serve to weaken everybody, making it increasingly inevitable that the healthier nations will fall a little sooner than they otherwise would because of their own economic imprudence. The linked currencies of the euro merely guarantee a combined collapse rather than a selective one.

The solution to failing nations is the same as the solution to failing individuals and companies: unassisted, liquidation bankruptcy. It is unpleasant, and that is precisely the point. It needs to be unpleasant and inevitable in order for citizens to be a little less inclined to vote for governments promising a free lunch. Further, we need to let week countries fall in order for them to more quickly get on to the road to recover. It is a road that only starts from the bottom. Does only democracy lead inevitably to collapse, or is it a symptom of every form of government which has forgotten frugality and freedom?

The Freedom to Fail

Among the plethora of freedoms, real and imaginary, touted by politicians and pundits, one fundamental freedom is glaringly missing: the freedom to fail. Governments create welfare programs to save us from personal economic failure, health care to save us from health care failure, business and banking regulations and agency to save us from bank and business failure. Unfortunately, we learn by our mistakes. More importantly, the risk-taking entrepreneurial spirit requires the right to fail completely in addition to the right to windfall profits if it succeeds.

Without the right to fail, we become capricious and stop taking precautions to avoid suffering. Why save money if the government will provide pensions? Why buy health care if the government will provide it? Why be skeptical of bank interest rates that are too good to be true if the government guarantees our savings will be safe from loss? Why save for a rainy day when the government provides steadily growing unemployment insurance? Why cautiously rent when the government rewards us for taking a mortgage?

Unfortunately, when you take away the right to fail, you must also take away the right to succeed. Without the risk of failure, banks and individuals take too many risks and individuals are less inclined to take care of their own needs, increasing the need for heavy taxation. We already tax the poor heavily through monopoly gambling rights for the government and sin taxes on cigarettes and alcohol. The only way to raise taxes is thus on the less poor, by taxing the rich until their income is at a very modest level.

Many things stop happening at such a level. Potential medical students decide to not pursue degrees in medicine. Entrepreneurs decide not to create new, innovative businesses. Pharmaceutical firms decide against researching expensive new drugs. In short, the advance of civilization slows. Everybody focuses, instead, on hiding their income from the taxman and maximizing their government benefits. How many of our decisions are already driven by their tax or benefits implications?

Finally, when innovation has slowed, and new companies are scarce, the government becomes fearful of large existing firms going bankrupt, as new firms will not rise to replace them. They they provide subsidies to the weak companies and tax the successful companies until they also become unprofitable. If the companies no longer face the risk of failure due to taxpayer bailouts, then it is understandable that we then spurn profitability and bonuses.

The only solution is to harald a return of the right to fail. Eliminate chapter 11 and other corporate bailouts. Eliminate all government subsidies and regulation of retirement, health and unemployment. Encourage entrepreneurs to take risks, but allow them to bear the full loss or success of those risks. Inasmuch as we reduce the freedom to fail, we reduce the freedom to succeed.

The mistake that shook the world

With everyone reeling from the stock market gyrations of Thursday May 6th, with the largest intra-day drop ever, we are told that a simple trading mistake was the cause of the dramatic plunge. Someone apparently entered a "b" instead of an "m" when placing a sell order, which resulted in billions of shares being sold rather than just millions.

Now that the mystery is solved we can all breath easier... Hardly!

Trading errors occur all the time, sometimes causing very brief swings in stock indexes. However, these "errors" don't result in any kind of lasting impact, and the gyrations they cause are rather minimal. While it's entirely possible that Thursday's crash was accentuated, or even catalyzed, by human error, it is grossly inacurate to blame the decline on a mistake. In fact, mistakes are far more likely to happen when people are spooked, thus making it inevitable that more glitches would occur than normal when stocks are tanking.

Quite simply, the markets had been getting jittery for a while with the growing sovereign debt problems. Moreover, stocks have rallied so much that their values are already at levels which are hard to justify given the slow nature of the economic recovery seen in the last year. There just wasn't much more room for prices to rally anymore.

Curiously, no one ever makes a big fuss when a trading mistake leads to higher prices. It is only when there is blood in the streets that we look for scapegoats.

If there was indeed a large mistake in some of the orders placed on Thursday then the securities firms, and management bodies, need to rectify the problem and perhaps find ways to help prevent such glitches in the future. But it would be terribly naive to pin the blame for the market crash on an error.

05 May 2010

This Week on Bear radio: is the sovereign debt crisis over?

In this episode, the Optimistic Bear and guests discus sovereign debt. With all the problems in Greece, and Europe, prudent investors are wondering if purchasing bonds of nation states makes sense anymore. Are US T-bills, or German bunds safe?