One reason the effect of the US subprime loan crisis has spread so far and so quickly is that financial institutions have many ways of participating in the debt market other than issuing or buying debt instruments. Most of the financial news I have read omits explanations of how it happens, other than generic references to “derivatives.” Here are some of the other ways to have a loss without touching a mortgage.
Business
Electronic Paper–Finally a Commercial Proposition?
I’ve written several posts about the emergence of electronic ink / electronic paper technologies. In a nutshell, these technologies allow information to be displayed on a medium which is (a) thin, (b) flexible (to at least some degree), (c) readable in bright sunlight, and (d) power-efficient (power is used only when changing the page, not for display per se.) As I wrote in 2004:
“These technologies could have major implications for the display of long text documents, eliminating the current undesirable alternatives of reading it on the screen or going to the trouble of printing it out, and I think they could have tremendous influence on the future of the media industry (especially periodicals.)”
A couple of years ago, Sony launched the Sony eReader, a 9-ounce product that can store about 80 average-sized books. Downloading is via an i-Tunes-like interface from a PC. My perception is that eReader has not been a runaway success, although it has developed some niche markets–it seems to be popular, for instance, among fans of romance novels, especially really hot romance novels.
Today, Amazon launched a product called Kindle, which has some interesting attributes:
Everybody Get On
Most people who have flown are familiar with the Southwest Airlines “cattle call”. For those who don’t know what it is, I will give a quick explanation.
Southwest doesn’t give assigned seats for their flights, rather they issue a letter to you, A B or C. When you get to the gate, they simply say “group A get on” and that is what happens. Those who check in earlier receive the preferential section and therefore the best shot at getting those invaluable exit row seats. The problem with this was that people would begin lining up hours in advance of the flight. They had separate lines for the A, B and C sections. If you were in the rear of the section A people, there is no shot at the more valuable seats, but at least you could still get an aisle or window.
Management Advice From 1797
Yesterday I went to see Elizabeth: The Golden Age….not a great movie, but worth seeing, and better than you would think from reading the reviews. The battle scenes with the Armada reminded me of something written by a Spanish government official, which I posted about a couple of years ago. Don Domingo Perez de Grandallana was writing about the battle of Cape St Vincent, in 1797, but the factors he discusses were likely also major influences on the fate of the Armada, 200 years earlier. And they are also major influences today, 200 years later, on the fate of many efforts in business and government.
“Recursive Self-Doubt” and Decisionmaking
Rob’s argument also partly explains why individuals tend to become increasingly risk-averse with age, since most people know more than they did when they were younger and can therefore more easily rationalize inaction. Perhaps, then, older people tend to be too risk-averse, and might accomplish more if they were more aware of this cognitive bias.
(via David Foster)