This Week on Bear Radio: The bear market caused the US debt downgrade, not the other way around.

In this week’s episode we discuss why most commentators have it backwards in blaming the market downturn on the S&P US debt downgrade. The S&P downgrade occurred BECAUSE the general economic mood is becoming more bearish instead of the reverse. The markets would have crashed anyway even if there hadn't been a downgrade.

Stocks had already been losing ground for weeks and there is ample evidence that the global economy has been slowing down. The US debt downgrade is almost irrelevant. The established trend (i.e. long before the downgrade) has been for investors to flee for the perceived safety in bonds of the largest industrial nations (i.e. Germany, US, Japan). Nothing has really changed, the process has just sped up a bit.

In the end, the US dollar is set for massive appreciation as the global economy goes into another tail-spin. Most of the world's private (and public) debt is denominated in dollars which creates unstoppable deflationary forces in an economic contraction as debtors are forced to sell whatever assets they have in order to raise the cash to repay loans. Ironically, all the debt everyone complains about is going to be the primary force that drives up the value of the dollar (and the subsequent crash in all asset prices).

We also talk about the idea that as volatility increases we can expect the unexpected with relationships between asset classes behaving in ways that no one would have imagined. The web of relationships between assets has become so convoluted with modern financial instruments and trading strategies that things will behave in surprising ways when markets are under stress.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

Ideas are cheap - making them a reality is hard

I think that innovation, in and of itself, is over-rated. There have always been people who “think outside the box” and come up with new and interesting ideas. The crucial issue is making these ideas into reality. This is where the challenge lies.

Just look at big companies whose research groups came up with amazing ideas, but the companies were unable to capitalize on them (leaving it to new upstarts to found new empires).

The same thing with countries. There are some countries with LOTS of brain power, and super-innovative thinkers. Yet these same nations are unable to ever harness the brainpower of its citizens into winning commercial franchises. France, for example, comes to mind. I am constantly amazed at the ideas which that nation’s intellectual’s and engineers come up with, yet they rarely manage to build thriving new businesses on those ideas. Russia is another excellent case in point.

You need a vibrant economic and investment environment for innovation to truly thrive and get beyond the garage. I think it is no coincidence that the number of new innovative product introductions tank during recessions and depressions, when investment decreases. In fact, it is my contention that people who look for innovation as an economic driver have things backwards. Innovation doesn’t drive the economy, the economy drives innovation (or at least the successful commercialization of new ideas). Funding more scientific research won’t do much to help if the broader economy is on the rails.

In short, ideas are cheap and plentiful. It is the wherewithal to turn those ideas into reality that really counts.

Practical Software: The How, Why & What Of Web Application Development.

In this episode of Practical Software Sanjeev Nambudiri interviews Patrick Nicolas – CTO at 24x7 Content & formerly at companies like Zvents & Resonate. Patrick dips into his considerable experience of Web Application Development & addresses a wide range of Qs ranging from the latest trends & tools to the architectural principles to apply & the pitfalls to avoid. It’s not just good enough to have a cool interface anymore - apps need to be able to monitor, store, and analyze vast quantities of social media information to understand trends and help users make decisions. If you develop Web Applications then this is likely a podcast you will want to come back to again & again !

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You can find all the Optimistic Bear shows here: Software

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

Practical Software: Cloud Computing With Azure - Podcast Interview With Clemens Vasters

In this episode of Practical Software Sanjeev Nambudiri interviews Clemens Vasters - Principal Technical Lead at Microsoft in the Windows Azure group. Clemens is an Enterprise software analyst and architect along with being a well known speaker at major software conferences, an author and an architectural consultant. In this "must listen" podcast for anyone considering the Cloud as a platform he shares his insights on the architectural issues involved in developing Cloud Applications as also developments within Microsoft's Windows Azure Cloud Platform.

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You can find all the Optimistic Bear shows here: Software

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

This Week on Bear Radio: It’s lonely being a bear

In this episode we talk about how the ranks of Bears are being continuously depleted. Even Tim Ellis, the creator of SeattleBubble, has now bought a home. Are the Optimistic Bear and friends the only true bears yet living? Of course, the increasing levels of bullishness simply provide MORE reason for the Optimistic Bear to stay bearish. We also discuss the limitations (and outright futility) of technical analyses and even economics for predicting the future of markets. The sizzling economies of Australia, Canada, and China, are also talked about as we ponder when these bubbles are going to burst.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

This Week on Bear Radio: The Bubble Returns

In this episode we discuss how the rash of tech IPOs and wild valuations are eerily similar to previous tech bubbles. Credit problems have only been swept under the carpet (evidenced by the fact that the US government now backs 90% of all mortgages) yet we see speculation rampant. We also talk about the value and limitations of technical analyses for investing. You don’t have to be right very often to succeed at investing. You just have to participate in the best investment opportunities and stay out of the market during the infrequent (but devastating) crashes.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

This Week on Bear Radio: credit deflation – the unexplained phenomena

In this week’s episode we discuss how there isn’t a single school of economics that explains the modern phenomena of credit deflation. According to traditional economics theories the prices of goods and services will rise when the volume of money increases. However, we have seen cases in the last 30 years where prices fall even as the money supply grows. Whether you are a Keynesian, neo-classicist, Austrian or Marxist, not one of these theories can account for what has happened in Japan and is starting to occur in America. We also talk about how it feels like we are in a slow moving train wreck. The same dire economics stories dominate the news, such as the European sovereign debt issues, yet they just keep getting worse, month after month. It’s deja-vu all over again.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

This Week on Bear Radio: The diversification myth and why investing today is riskier than e

In this episode we discuss the crash in the commodity markets and the amazing correlation which is occurring across almost all asset classes. Even BitCoin has been blowing another bubble. This correlation between assets, causing everything to move in lock-step, has made diversification almost impossible and created one of the riskiest investment environments in memory. We also talk about the certainty of improbable events and why it is sometimes good to panic.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

This Week on Bear radio: It’s an inflationary world out there

In this episode Moses Kim explains that the rising prices in commodities and precious metals show that the US will be living in an inflationary environment for a long time to come. The massive US government debt and lack of economic competitiveness further ensure that the American dollar is only going to see lower valuations in the years ahead. Deflationists (like the Optimistic Bear) are mis-reading comparisons with the 1930s and Japan’s 20 year odyssey with falling prices. Precious metals, stocks, commodities, and emerging markets are the places to invest.

That said, Moses warns that Gold could be in store for a sharp, yet brief, correction.

You can find more of Moses’ ideas at:
http://expectedreturnsblog.com/

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

This Week on Bear radio: No one beats the Optimistic Bear in bearishness! No one!

In this episode we discuss how recent market volatility could have a bearish portent and how markets that keep rising for long periods without a significant correction are fragile. We examine how the rising price of oil could be viewed as either bullish or bearish for the future of crude prices. When it comes to understanding bubbles, the venerable Greenspan may actually have a good point: there is no good way to tell if there is a bubble until it’s over.

With so many bearish prognosticators turning bullish (even Mish has tempered his views) the Optimistic Bear declares his willingness to stand alone (or nearly so)! While not buying into the apocalyptic view, he remains firmly in the perma-bear camp, believing that major deflation is yet in store.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

The next shoe to fall: Reverse Mortgages

Slowly but surely we are starting to see cracks in the reverse mortgage market. Like all the new mortgage finance innovations of the bubble years, having a lender give a lump sum payment to an elderly homeowner for the privilege of collecting upon the death of the borrower sounded like a good idea. Unfortunately, we are now starting to see that many of the underlying assumptions of reverse mortgages were flawed.

In particular, it is now evident that home prices have fallen so much that many reverse mortgage holders are under-water, finding that the current market price of their home is worth less than what they borrowed. As the New York Times points out, this impacts any surviving spouses who had hoped to wind up with a little inheritance with the passing of their loved one.

http://www.nytimes.com/2011/03/12/your-money/12money.html

Of bigger implications, however, is the fact that lenders are already starting to see situations where they are taking losses on reverse mortgages. The generous equity cushions lenders had thought they were leaving themselves have proven to be not so safe after all. When homes drop 40% or 60% in value even large equity cushions of 25% or 30% aren't sufficient to prevent losses.

Could losses from under-water reverse mortgages start to impact bank balance sheets?

I don't have a lot of sympathy for people who find their homes are being foreclosed upon when their spouse passes away. After all, these people managed to benefit from having the bank over-pay for the value of the home. At least the lender can't force anyone to make up the difference from the market sale price and the balance owed.

If the treatment of other distressed properties is anything to go by I wouldn't be surprised to see many lenders delay in the foreclosure, and sale, of reverse mortgaged properties as well. Banks have shown a great aversion to having to take write-downs on mortgages by selling for low market values and I doubt attitude will change with reverse mortgages.

Yes, job search discrimination exists – get over it!

I know the frustration people feel in the job market. It took me nearly a year after Microsoft let me go in July 2009 to find full time employment again. It’s hard not to get depressed when no one returns your phone calls for informational interview requests and the only thing you receive from submitting job applications are form letters.

I began to wonder if all my experience and training was for nothing. How could I support my family working as a hamburger flipper? Is the world just intended for the very young, willing to work for peanuts as they begin their careers? Have I finally hit a wall where my lack of a college degree will prevent me from finding a good job ever again?

One recruiter at a well-known technology firm (who I got to know as a friend through my podcasting efforts) told me there was no point in my ever sending in a job application to his firm even if there was a perfect opening for someone with my background. My lack of a degree would automatically divert my application to the dust bin, according to my friend.

Is life over?

I just wouldn’t let myself dwell on those thoughts. Instead, I would drag myself out of bed every day, telling myself that this could be the day I find a job! I reminded myself that every job I ever had ever found came through roundabout methods. I’ve never led an orthodox life (or career) so why should I start now? When even my friends tell me it is pointless to apply for jobs on-line I simply resolved to go around the gatekeepers and become friends with the hiring managers themselves.

Eventually, my determination finally paid off. I am once again gainfully employed as a program manager at a software firm AND I have built a network of professional connections I wouldn’t have even dreamed possible when I was at Microsoft. Nevertheless, it took a LOT of effort and a willingness to jump into new things with both feet (again and again) to get me here.

The keys to my career salvation were twofold: 1) my willingness to work for free and 2) starting podcast shows as a networking tool.

Instead of sitting on my hands collecting unemployment insurance (and sending out resumes), I would reach out to local cash starved startups and offer to work for free, or for a promise of stock (which almost certainly would never amount to anything). This allowed me to keep my skills current AND to meet interesting people. When I do apply for jobs there is no embarrassing gap in my resume since I can legitimately tell people I have been working, and even go into great detail about the interesting work and accomplishments I have racked up. I was doing more interesting, and innovative, work at these startups than I ever did in my whole career at Microsoft! That alone was a very empowering feeling.

I also made it a goal to make at least 4 new professional connections a week, and my efforts at creating podcast shows helped immensely with this goal. I would invite business people, recruiters, and all manner of people I wanted to build friendships with to be guests on my podcast shows and to my surprise MOST PEOPLE SAID YES! I have interviewed nearly 200 people in the last year and a half, most of whom have become good friends.

Not one of the interviews I have been on came through submitting job applications. All of my interviews resulted from making connections with people in the industries and businesses where I wanted to work.

I know how hard the job market is these days, but I am able to tell people that there IS hope. Creativity and a willingness to work hard can make all the difference.

If you would like to learn more about my strategy for using podcasting to get a job check out my 10 minute video:
http://bit.ly/podintro1

This Week on Bear radio: The conservation of risk and the illusory safety of hedging

In this episode we talk about how financial hedging can actually lead to bigger risks by encouraging imprudent behavior and endowing a false sense of security. The whole AIG debacle proved you can’t always rely on insurance (which is what hedging is, after all). Try as one might, it is simply not possible to eliminate or even minimize risk. You can only succeed in changing where the risk lies. Instead of the risk of an actual crop failure the risk now is that the insurer will make good on a claim. We also debate whether the people movement revolutions sweeping through the Arab world are bullish or bearish for the global economy. It can definitely be said that there is no historic correlation between commodity prices and geo-political unrest. For just one example, oil prices have both risen and fallen (aside from short term spikes on major news) substantially during major periods of upheaval and wars in the middle east.

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

Defying European Creditors Iceland says yes to deflation

The Icelandic President's decision to veto yet another attempt to nationalize debts of defunct private banks not only shows that there are at least SOME politicians in this world who listen to their constituents but that a whole nation is voting to stop the inflationary insanity of debt creation in favour of deflation.

Instead of kicking the can further down the road, nationalizing the obligations to British and Dutch depositors of private banks which lent foolishly, Iceland is clearly saying that it is better to just take the hard medicine now and write off the debt.

In big and small ways the world is slowly waking up to the reality that the massive speculative debts built up over the last 30 years will simply have to be purged.

This Week on Bear radio: Commodity prices tell the story-inflation is everywhere

In this episode Brad Rundbaken explains how commodity prices are the canary in the coal-mine pointing to the rising inflationary pressures resulting from all the stimulus and bail-outs. Changing cycles in weather patterns are also exacerbating pricing pressures on food stuffs. Conveniently, policy makers don’t include the prices of commodities in their inflation calculations, making it easy to deny that problems exist. That said, Brad urges caution in the market right now since things seem to have reached an overbought state. We close our discussion by pondering whether the internet age really has made a difference in modern mass revolutions (such as those occurring in Tunisia and Egypt) or whether popular uprisings today are just repeating the same pattern as those done long before the age of Twitter.

You can read more of Brad’s ideas here:
http://trendocracy.blogspot.com/

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

EPNW: The philosophy of organic marketing – where marketing and life fit into balance

In this episode Jim Hodgson explains how blogging has helped him find new meaning in life, and focused his thoughts to allow him to achieve previously unobtainable goals. Jim has went from being vastly overweight to a triathlete and outdoorsman (recently trekking up Kilimanjaro). We also discuss Jim’s concept of “organic marketing”, which seeks to pull people in who are interested rather than blast the universe with useless spam. Sharing details on the internet about yourself, or business, can go a long way to winning over customers. Not only do customers want to know about the product, but they also love to feel a connection with the people or businesses they work with.

You can check out Jim’s blog about philosophy and achieving goals here:
http://jimhodgson.com

Information on organic marketing can be found here:
http://hodgsonco.com

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NOTE: Check out the complete podcast directory of discussions with entrepreneurs. If you would like to be a guest on Entrepreneurs Northwest, to talk about your business venture, contact Michael Surkan.

EPNW: How many impossible things do you do before breakfast?

In this episode Joel Runyon explains how he realized it was only his own fears and excuses that prevented him from achieving his dreams. Instead of using excuses for a lack of money, or time, to avoid pursuing his passions, Joel has begun training for triathlons and pursuing the career in internet marketing he always wanted. Anyone can achieve impossible things if they only try. Unfortunately, most people give up on their impossible dreams before they even start.

Sure, failure is possible (and virtually inevitable on occasion), but if we don’t even try to achieve our dreams then we will never discover that we can do things that are considered impossible.

You can check out Joel’s blog of impossible things here:
http://www.joelrunyon.com/two3

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NOTE: Check out the complete podcast directory of discussions with entrepreneurs. If you would like to be a guest on Entrepreneurs Northwest, to talk about your business venture, contact Michael Surkan.

This Week on Bear radio: Why health care reform is driving up your medical bills

In this episode Patrick Killelea explains how the US health care reform legislation actually provides incentive for insurance providers to charge even more. Restrictions on the amount of profit that can be made make it attractive to pay more for care and treatment to ensure a higher over-all bill. This might explain why Blue Shield has increased Patrick’s insurance premiums by 73% this year alone. It’s things like this that drive a guy to the streets in protest, which is exactly what Patrick did this week.

You can check out Patrick’s latest adventures in fighting the health insurance companies as well as his excellent financial news information at:
http://patrick.net/

If you are interested in deflation, check out the Deflation Study Group on LinkedIn (open to all LinkedIn members):
http://linkd.in/deflationsg

You can also listen to my in-depth Deflation 101 podcast.
http://bit.ly/deflation101

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NOTE: Remember to tune into the Optimistic Bear weekly financial round-up every Tuesday at 9:00pm, Pacific Time. You can also listen to previous shows.

EPNW: Patents make the world go round

In this episode Jim Haugen explains that patents are the lifeblood of any tech company and that it is always better to think about what might be patentable (or not) before the first piece of code is written. A little expert advice before a startup begins developing their product can save a lot of potential grief in the future. No one wants to be in a situation where they discover they have built a product which infringes on someone else’s intellectual property or that they are unable to protect their own ideas with patents. Jim also elaborates on why patents are not something you undertake with a do-it-yourself kit. A huge percentage of patents are rejected and It takes experience to know how to create filings that sail through the process.

You can check out more about Jim’s patent firm at:
http://www.seattlepatentgroup.com/

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NOTE: Check out the complete podcast directory of discussions with entrepreneurs. If you would like to be a guest on Entrepreneurs Northwest, to talk about your business venture, contact Michael Surkan.

This Week on Bear radio: Cycles and Pre-destination

In this episode we discuss the idea that societies, and economies, are governed by both short and very long cycles of social mood and sentiment. If this theory of cycles (like those proposed by Kondratiev) are correct, then there is very little policy makers can do one way or the other to change economic outcomes. The grandiose visions laid out by the US President’s state of the union address are irrelevant to the economic and psychological prosperity of the nation. The ideas offered by the President’s political opponents are likewise irrelevant for improving the economy. These generational cycles also imply that the cause of the recession and “financial crisis” is deeper than a lack of regulations or risky investment behavior. It was the general bullish attitude of society which inevitably led to lax regulation and excessive risk taking. The next time there is broad bullish sentiment throughout society (80 or 90 years hence) then regulation will inevitably become lax and risk taking will again reach excesses.

We talk about how NO political leaders are championing the idea of state or municipal bankruptcies as a method to cure long-term budget problems. There are NO political leaders suggesting that the major financial institutions like CityGroup should just go bust and that bond-holders and depositors should lose their money. Instead, policy makers whine about deficits, stimulus, education and social safety nets.

Lastly, we explore the fact the Bitcoin is now reaching a new high, in alignment with other markets, with bearish implications.

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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