Friday, February 27, 2009

Oil is a Strategic Resource, And Some Countries Get It

One of the major pillars of Obama's new budget is to choke off domestic oil exploration and production through the use of increased taxes:

$5.3 billion - excise tax on Gulf of Mexico oil and gas
$3.4 billion - repeal expensing of tangible drilling costs
$62 million - repeal deduction for tertiary injectants
$49 million - repeal passive loss exception for working interests in oil and gas properties
$13 billion - repeal manufacturing tax deduction for oil and natural gas companies
$1 billion - increase to 7 years geological and geophysical amortization for independent producers
$882 million - eliminate advanced earned income tax credit

Add in the decision to shut down shale oil development, and it is clear that the goal is to make domestic oil so expensive that inefficient that uneconomic "green" energy looks better.

In the mean time China knows that oil is here for a long time. It is cheap, efficient, transportable and is crucial for tactical and military operations. China is currently on a spending spree to obtain access to oil reserves, the latest their purchase of a Canadian Oil Company. If you watch the news they buy another oil company or set of reserves every few months. The Chinese realize that oil is here to stay and access to it will be important in the long term. They get it, the democrats do not.

Thursday, February 26, 2009

The U.S. Loss of Innovation

Competitive advantage can come in many forms: strategic, tactical, even financial. The U.S. is slowly loosing its competitive advantage in each category, the most recent being the U.S. loss of competitive advantage in innovation:

The report by the Information Technology and Innovation Foundation found that the United States ranked sixth among 40 countries and regions, based on 16 indicators of innovation and competitiveness. They included venture capital investment, scientific researchers, spending on research and educational achievement.

Americans were given a great opportunity with the country, and they are slowly pissing it away.

Wednesday, February 25, 2009

Housing is in the Toilet, So Let's Limit The Mortgage Reduction

This stupidity of this administration is simply unbelievable. They run around trying to shore up the housing market, then take steps to torpedo it. From the new health care plan proposal:

The tax increase is a new proposal from Mr. Obama, and would limit deductions for filers in the 33% and 35% tax brackets.

Under current law, taxpayers itemize their deductions based on their income tax bracket. A taxpayer who pays a 35% rate on his income may deduct 35% of various expenses -- such as mortgage interest or charitable contributions -- from his taxable income.

Under the Obama proposal, these deductions would be limited to a maximum of 28%, even for taxpayers paying higher tax rates.

So Obama wants to stop the housing market from tanking, but wants to reduce the mortgage reduction, therefore putting downward pressure on the housing market.

Saturday, February 21, 2009

Bye Bye Barcelona

I am pretty sure this will be my last trip to the 3GSM tradeshow for a while - maybe for good. Attendance this year was way down and whole companies didn't show up, leaving blank booth spaces. The companies that did show up cut their number of staff significantly, so while there were still thousands of people, it was nowhere near the crowds of the past.

What this meant for me was that as a meeting venue, the show wasn't very good. For the past two years coming here would meant saving a couple of trips to Asia later, but this time it doesn't. In fact, my best meetings this year took place with companies from North America. That means next year I probably won't make the list - if my company has a list next year.

So after three years (and my fourth time overall) I am going to say adios to Barcelona. It is a great city with lots of sights, great food, and laid-back, coffee-shop hanging, pleasant people.

And they have Chris here to point me the way home.

Friday, February 20, 2009

Look at the Big..uh..Building

Um, okay. The architect who designed this did NOT have a complex.

Maybe these guys were protesting having a big phallic symbol in their city?

Wednesday, February 18, 2009

The Great Technological Divide

When the first European explorers reached the New World, they were astounded to find that the North American Indians had not progressed beyond the Stone Age.

Hundreds of years later American travelers go to Europe and are astounded to find that European cultures have not discovered the shower curtain.

What is it with these Europeans! Why can't I come over here and take a shower without leaving an inch of water standing in the bathroom?! They got a tub, running water and a shower head. It's not a huge leap to make it to a shower curtain!

Tuesday, February 17, 2009

Autos & Cells: It's About Replacement

The title of this article is misleading ("Wireless industry feeling resistant to global economic downturn") but gets it right in the main body:

The wireless industry is not immune to the downturn. Handset operators from Nokia to Motorola are cutting jobs. So is chipmaker Intel and software giant Microsoft.
Given the fact so many people already have cellphones in their pockets, analysts say handset sales could drop by as much as 20 to 30 per cent this year

Cellphones are like cars: everyone has one and they need one. The health of the industry (and sales) will depend on how often people replace them. And this is where the cellphone industry is much more resistant to a downturn than car makers: people can drive their present car almost forever, but they won't keep their cellphone all that long.

There are a variety of reasons that people will - sooner rather than later - replace or upgrade their phone, ranging from fashion to new features to just wearing out. And while a lot of people will hold out longer, the fact is that a pretty good new cellphone can be had for less than $100 (with the contract). And as long as people keep talking and needing monthly contracts, they will put down a few bucks on a new phone.

In the mean time, the phone makers are trying to increase penetration into more secondary (tertiary?) markets with very low cost phones that still have lots of features (Nokia talks about the "second billion cellphone users").

Overall I would say that the excesses in the industry will be rung out (someone will have to buy Mot), and there will be plenty of job losses and pain, but the industry will stabilize faster than many other segments.

Monday, February 16, 2009

I'm Losing a Holiday!

My company gives President's Day off, so my colleagues at work are enjoying a day off. But me? I don't get a holiday.

Noooooo. While my boss gets to enjoy a house full of screaming children, I have to get on a business class seat and go to Spain. THEN I have take clients out for tapas and drink Riojas wine. AND while doing this I have to watch long-legged Spanish girls go back and forth on the street.

I tell you, the things I do for my job. But these days, I guess I should be happy I even have one.

In the mean time I hope that slave driver bastard of a boss enjoys HIS vacation.

Sunday, February 15, 2009

Back for a Third Time

This is my third 3GSM Mobile World Congress in Barcelona. At least I have a quaint view from my hotel this year.

Last year I was across the street from a transvestite bar. I mean, I knew it was because someone told me. It's not like I found out myself. Really.

Saturday, February 14, 2009

Free Advice to Today's Tech Start-Ups

As I head to the Mobile World Congress tradeshow this week, I have a free word of advice for the few small companies I know heading there: viability is as important as productability. That is, these days your marketing program needs not only promote your product, but promote how you are going to stay in business.

The WSJ headlined the problem with tech start-ups these days:
The deepening recession is speeding up the shakeout in Silicon Valley, forcing droves of start-ups to shut down or sell themselves at fire-sale prices.
No matter how good your product is, the big guys are not going to invest time, people or resources if they think you are going to be out of business tomorrow. And if you think the big guys are going to keep you bailed out, think again. Nokia's stated strategy is to push costs down to their supply chain, Samsung's aquisitions in the last decade can be counted on one hand, and Mot itself is probably going out of business.

You need a plan that shows how you will independently stay afloat as you work with the big guys to get your product into production and into the supply chain. Without this your product will be nothing but a curiosity.

Thursday, February 12, 2009

Blogging at 28,000 Feet

I am one of Southwest's "test planes" for in-flight wi-fi. Not bad. A little slow and I got kicked off once, but probably no different that being in an average coffee shop.

During test marketing it is free, but it will be a paid item once it rolls out. This is a nice feature for quick flights to get a few emails out before you get to your meeting, but where it really is needed is for long-haul flights when you need to kill 10-12 hours.

Tuesday, February 10, 2009

All Debts Come Due

Gongol hits it right on the head:

If we can't demonstrate the wisdom to get out of our problems with enough sobriety and confidence to show that a temporary economic slowdown is not the end of the world, then our forebears ought rightfully to be ashamed of us.

Exactly right. We're in a temporary economic downturn. Does it hurt? You bet your ass it hurts. Especially for people without jobs, which is where I was during the tech economic downturn of 2002. But Obama and the democrats are turning a downturn into a panic. And every time he takes the stage he tries to install more panic and fear.

This monstrosity of a bailout package just repeats the new fundamental American fallacy that got us into this mess: the belief that nothing borrowed ever has to be repaid. First it was mortgages, credit cards and Social Security funds. Now it's government bonds.

This all feeds back into the American hyper-focus on the self and the now, agreeing to things that "sound good" in the short term because most Americans now don't want to think things through for the long run. Or as is becoming more common, because they are too ignorant to do it.

So we have citizens of a bankrupt culture about to enact laws that will bankrupt their finances. Because this wasted money will have to be paid back one day, one way or the other. And I think it will happen through the debasing of the currency.

The Kindle: New and Improved with Flavor BitsTM

So about six months after I get a Kindle Amazon introduces the Kindle II. Now I am a huge fan of the Kindle, but from what I see here, this new version has incremental improvements and a few bells and whistles, but nothing big enough to make me rush out and buy the upgrade (yeah it's thinner, but it isn't like I struggle to carry my current one around).

So my recommendation is if you have the current one, stick with it. And if you don't have one, get one IF you think it would be useful. Because I do agree with Ace that the Kindle really isn't a mass market device.

...books are not precisely difficult to carry around, especially on the places where you'd read a book outside your home -- subway, airport, Starbucks, park. The Kindle is a bit thinner and lighter, but who's sweating the weight of a book?

For yet another thing, books are intrinsically pleasurable as objects. People like books -- the feel of paper, the smell of them. Kindle is not going to replace that attractiveness anytime soon.

But here's the big reason Kindle will never catch on, as a friend explained to me: How do you know what to read?" By which he meant -- without the pleasant ritual of going to a book-store, browsing the stacks, picking up a book and reading its back cover and first few pages -- how the hell do you know what you want to read in the first place?

These are good points. The Kindle hasn't replaced real books in my home or stopped me from browsing the book store. I like it because as a frequent traveler it allows me to carry around several books, magazines and newspapers in one compact environment. It allows volume for travel. So for people like me, commuters and other people who like volume in a small size it is great (especially for big tomes like Crime and Punishment).

But for my dear departed Grandmother - a librarian who read 4-5 books a week in the evening at home - she would be just fine without it.

Friday, February 06, 2009

What He Said: WSJ OpEd on Stimulus and Inflation

Open up your wallet and take out a dollar. Look at it. It's just a piece of paper. That's all. It's a store of wealth because our government says it is. And what happens if everyone stops believing the government? At that point point that piece of paper becomes just a piece of paper - good for writing, maybe personal hygiene. Which is what happened in Zimbabwe.

With the upcoming passage of the spendulus package, our government is about to send money into the economy that won't create jobs or create more "wealth" - because printing more paper doesn't generate wealth. The result, as this OpEd in the WSJ details, will be inflation. Because foreign governments aren't going to be giving us their money (by buying our bonds) so we are going to have to print it. And printing more of it will devalue it. The result is inflation.

Thursday, February 05, 2009

Why I Like CEOs to Make Big Salaries

Do you really think today's announcement about salary caps for "bailed out" firms is the end of the matter? Once the government gets its hands into something it doesn't let go - it pushes them deeper. So this is going to spread.

I make far less than $500K and never expect to be even near that level of compensation in my lifetime. So why does this bother me? Because I WANT my CEO to make as much as possible because:

- The more my CEO makes, the more my Executive Vice President will ask for, and get
- The more my EVP makes, the more my VP will ask for, and get
- The more my VP makes, the more I can ask for, and get

And since I know what my CEO and EVP make, I can guess what my VP makes. And based on what my boss makes, I know where I can take my salary. The lower my CEO's pay, the lower each rung in the ladder will go.

So this salary cap not only caps the CEO's pay, it caps everyone in the organization.

Welcome to Socialism.

Monday, February 02, 2009

More Thoughts To Keep You Awake At Night

Geo-Political Hot Spots of 2009.

Nothing you didn't already know, but hits home that economic crises plus cheap oil plus unstable regimes means that we are for some bad $%#(.