NEW YORK/WASHINGTON (Reuters) - To the outside world, the Federal Reserve is an impenetrable fortress. But former employees and big investors are privy to some of its secrets -- and that access can be lucrative.
On August 19, just nine days after the U.S. central bank surprised financial markets by deciding to buy more bonds to support a flagging economy, former Fed governor Larry Meyer sent a note to clients of his consulting firm with a breakdown of the policy-setting meeting.
The minutes from that same gathering of the powerful Federal Open Market Committee, or FOMC, are made available to the public -- but only after a three-week lag. So Meyer's clients were provided with a glimpse into what the Fed was thinking well ahead of other investors.
His note cited the views of "most members" and "many members" as he detailed increasingly sharp divisions among the officials who determine the nation's monetary policy.
The inside scoop, which explained how rising mortgage prepayments had prompted renewed central bank action, was simply too detailed to have come from anywhere but the Fed.
Former Federal Reserve Chairman Paul Volcker scrapped a prepared speech he had planned to deliver at the Federal Reserve Bank of Chicago on Thursday, and instead delivered a blistering, off-the-cuff critique leveled at nearly every corner of the financial system.
Bloomberg News
Former Fed Chairman Paul Volcker
Standing at a lectern with his hands in his pockets, Volcker moved unsparingly from banks to regulators to business schools to the Fed to money-market funds during his luncheon speech.
He praised the new financial overhaul law, but said the system remained at risk because it is subject to future “judgments” of individual regulators, who he said would be relentlessly lobbied by banks and politicians to soften the rules.
“This is a plea for structural changes in markets and market regulation,” he said at one point.
Here are his views on a variety of topics.
What does it all mean? (that link is a funny Youtube clip, as a palette cleanser).]]>Depending on how this one goes, I think this is my second to last or last post *ever* haranguing on, or thinking this deeply about, Facebook. Blue in the Face makes one look crazy, especially if no one is listening... and beyond the simple fact that I may be wrong, and happily eat humble crow as I become more aware..... I do see some meaningful interaction on Facebook. It takes some time, and for me it took *opening* my network. This concept of a "closed" network seems bizarre to me, and it limited real, meaningful interaction, the likes of which I remember from IRC or topical boards.
At the time of posting 9,084,488 people "liked" the Oreo fanpage. In the above, .0005586 / .05586% liked (a little more than one twentieth of one percent or 1/20%) and .0003344 / .03344% commented, the second posting was .0001671 / .01671% liked and .0000216 / .00216% commented.
I think you get the point.... even the most successful brand pages are creating interaction and real community involvement that is such a small percentage of their supposed community, we have to ask how this actually works?
I understand it's a distribution channel, and you need to be available to guests and consumers that wish to interact with you on their own terms in their own comfort zones.... but numbers this small are almost impossible to fathom. The way people are prostelytized by brands, I, personally, would imagine interaction levels much higher... at least into whole percentage points. Is this Facebook's fault? Is this something greater involving the crisis of perception in social media?
This financial crisis has made us all too aware that we live in a Catch-22 world: the performance of the housing market drives the economy, and the performance of the economy drives the housing market. But housing has perhaps never been a better bargain, and sooner or later buyers will regain faith, inventories will shrink to reasonable levels, prices will rise and we'll even start building again. The American dream is not dead -- it's just taking a well-deserved rest.Karl E. Case is a professor emeritus of economics at Wellesley and co-creator of Standard & Poor's Case-Shiller housing index.]]>
The television business, it seems, is learning what the predawn buyers at the fish market already know: starting the day earlier can be a competitive advantage.]]>Stations in Boston, New York, Washington and other cities are adding 4:30 a.m. newscasts this month, joining a backward march that started in earnest a few years ago. And those are not even the earliest. One station in New York, WPIX, will move up its start time to 4 a.m. on Sept. 20.
In catering to the earliest of the early risers, stations are reacting to the behavior patterns that are evident in the Nielsen ratings. Simply put, Americans are either staying awake later or waking up earlier -- and either way, they are keeping the television on.
In the past 15 years, the number of households that have a TV set on at 4:30 has doubled, to 16 percent this year from 8 percent in 1995. At 11:30 p.m., by comparison, when most local newscasts end, 44 percent of televisions are on, up 10 percent from the levels 15 years ago.
Abstract: In this paper, we first present a new privacy leak in residential wireless ubiquitous computing systems, and then we propose guidelines for designing future systems to prevent this problem. We show that we can observe private activities in the home such as cooking, showering, toileting, and sleeping by eavesdropping on the wireless transmissions of sensors in a home, even when all of the transmissions are encrypted. We call this the Fingerprint and Timing-based Snooping (FATS) attack. This attack can already be carried out on millions of homes today, and may become more important as ubiquitous computing environments such as smart homes and assisted living facilities become more prevalent. In this paper, we demonstrate and evaluate the FATS attack on eight different homes containing wireless sensors. We also propose and evaluate a set of privacy preserving design guidelines for future wireless ubiquitous systems and show how these guidelines can be used in a hybrid fashion to prevent against the FATS attack with low implementation costs.The group was able to infer surprisingly detailed activity information about the residents, including when they were home or away, when they were awake or sleeping, and when they were performing activities such as showering or cooking. They were able to infer all this without any knowledge of the location, semantics, or source identifier of the wireless sensors, while assuming perfect encryption of the data and source identifiers.
Ninety-five percent of existing mortgage creation over the past 12 months were government guaranteed. The private market was nowhere to be found because they charged too much. It was the cost of private origination and securitization, perhaps more than any other factor, that justified government involvement. Prime, but non-conforming, mortgages (jumbos, insufficient down payments) were being purchased by PIMCO in the hundreds of millions of dollars every week, but at yields of 6, 7, and 8%. If that was the risk/ reward tradeoff, compared to FNMA and FHLMC yields at 3.5-4%, how could policymakers pretend that the housing baton could be quickly and cost-effectively passed back to the private market? Few, if any, could afford a new home at those interest rates. If you were a believer in the dominance and superiority of private markets, how could you deny the signal that markets were sending - that the risk was too high given the substantial losses of recent years?Clusty search: Bill Gross, Pimco.My argument for the necessity of government backing was substantially based on this commonsensical, psychological, indeed sociological observation that the great housing debacle of 2007-2010+ would have a profound influence on homebuyers and mortgage lenders for decades to come. What did we learn from the Great Depression, for instance: Americans, for at least a generation or more, became savers - dominated by the insecurity of 20%+ unemployment rates and importance of a return of their money as opposed to a return on their money. It should be no different this time, even though the Great R. is a tempered version of the Great D. Americans now know that housing prices don't always go up, and that they can in fact go down by 30-50% in a few short years. Because of this experience, private mortgage lenders will demand extraordinary down payments, impeccable credit histories, and significantly higher yields than what markets grew used to over the past several decades.
Interfluidity's notes after a recent Treasury meeting.
]]>The lawsuit (.pdf), filed in US District court in San Francisco, asks the court to find that the practice violated eavesdropping and hacking laws, and that the practice of secretly tracking users also violated state and federal fair trade laws. The lawsuit alleges a "pattern of covert online surveillance" and seeks status as a class action lawsuit. The lawsuit was filed by Joseph Malley, a privacy activist lawyer who also played key roles in other high profile privacy lawsuits, including a $9.5 million settlement earlier this year from Facebook over its ill-fated Beacon program and a settlement with Netflix after the company gave imperfectly anonymized data to contestants in a movie recommendation contest.]]>"The objective of this scheme was the online harvesting of consumers' personal information for Defendants' use in online marketing activities," wrote Malley, who called the technique "as simple as it was deceptive and devious."
Unlike traditional browser cookies, Flash cookies are relatively unknown to Web users, and they are not controlled through the cookie privacy controls in a browser. That means that even if a user thinks they have cleared their computer of tracking objects, they most likely have not.
Adobe's Flash software is installed on an estimated 98 percent of personal computers, and has been a key component in the explosion of online video, powering video players for sites such as YouTube and Hulu.
Websites can store up to 100KB of information in the plug-in, 25 times what a browser cookie can hold. Sites like Pandora.com also use Flash's storage capability to pre-load portions of songs or videos to ensure smooth playback.
Meetings of the five-member Transportation Committee of the Los Angeles City Council tend to be rather quiet affairs. But earlier this month, 150 people crammed into Room 1010 at City Hall to debate LA's latest gastronomic craze: gourmet food trucks.To their fans, the trucks are a welcome addition to the city's food scene, parking outside shops and offices at lunchtimes and congregating on Friday nights to create mini food festivals. To their critics, they are a menace, stealing trade from restaurants, creating litter, lacking proper licences and regulation, and clogging the parking places of entire streets.
"We don't want to shut down the trucks but we do need to work this out," says councillor Tom LeBonge. "Many of the truck operators want free enterprise and don't like government regulation, but we have to act before it becomes a bigger problem."
So with all this relentless talk about Twitter accounts, Facebook fan pages and cool new apps, I have a serious and timely question. Do brand websites still matter?]]>
Yes, I know -- even asking this question is a bit digitally sacrilegious. Websites are to digital strategy as models are to fashion, but do we really need them?
I mean, didn't things seem a tad curious during the World Cup when brands like Adidas and Nike actively promoted their Facebook page -- not their primary website -- at the end of their TV spots? Just this weekend, I saw a similar cross-feed to Facebook for Kohls. Talk about kicking the ball into a different goal.
Think about all the hoops we've jumped through to register proprietary domain names, in every country and business type -- this perpetually rationalized by an almost unstoppable parade of GoDaddy ads (titillation and all). As a domain-name collector myself, it's hard not to feel a twinge of asset deterioration.
But before you start penning the "ditch the brand website" memo, hold your tweets for a moment. Websites are not going away -- they might be more important than ever -- but they serve a different and evolved purpose today, especially in this new "social" context.
Think wholesale, less retail. Think distribution, less destination. Think serving, less selling.
Once again, Amazon is running a "Design your own Kindle Commercial" contest. The deadline to submit a single video with original soundtrack and footage is August 29th. You have to be a resident of the U.S. to enter this contest. The winner will receive a $15,000 Amazon gift card and the four runners up $2,500 gift cards. These kinds of contests seem to provide great opportunities for under-recognized professionals to strut their stuff, although I'm sure that the submissions include a lot of good amateur ones as well. Last year's submission helped the careers of the winning producer-director team, the team who wrote and recorded the music, and the team who did the actual video.]]>Here's the winning submission from last year's contest:
For several decades, whenever a question of housing policy came up in Washington, two companies dominated. Fannie Mae and Freddie Mac marshaled armies of lobbyists, deep political connections and millions of dollars in contributions to get their way.]]>But now Fannie Mae and Freddie Mac, titans of the mortgage finance industry, are wards of the state, bailed out by Washington to the tune of $160 billion and banned from political activity. As the Obama administration and Congress prepare to take up overhauling the $12 trillion U.S. mortgage market, new interests are shaping the debate like never before.
Among those influencing many Democrats are affordable housing advocates and liberal think tanks that want the government to do less to foster homeownership and more to support rental housing for low-income people. Those influencing Republicans favor sharply reducing all federal support for housing.
In the real estate world, there was one word that used to be the cardinal rule: location, location, location.]]>Just about anybody -- the informed and uninformed -- could buy a house in a good location and easily make money by flipping, selling or refinancing the home, sometimes after just a short ownership.
That was then, before the Great Recession.
This is now, and the new cardinal rule of real estate is information, information, information.
"For decades, the real estate industry has operated under the principle that the less information buyers and sellers have, the better it is for agents, lenders, title companies, and all the other folks who eat from the trough," writes Ilyce Glink in "Buy, Close, Move In: How to Navigate the New World of Real Estate -- Safely and Profitably -- and End Up with the Home of Your Dreams." "But the real estate tide seems to be turning, as the housing and credit crises of 2008 have heightened awareness in Washington, D.C., and on Wall Street about the catastrophic consequences of a closed information loop."
I have no doubt that many professionals in the real estate industry will take great exception to Glink's observation. But the evidence is on her side. We ended up in one of the worst housing market collapses because far too many borrowers were uninformed, ill-prepared and overly optimistic about potential gain because of bad information they received and gladly embraced.
My last post made me nostalgic for the old HP. Those of us who are faculty members in the Stanford School of Engineering have a special place in our hearts for the company that Bill Hewlett and Dave Packard started. They were students here and started the company with $500 borrowed from Fred Terman, who was dean of the school for many years. They also donated very generously to the school; a building is named after Bill, another after Dave, and a third after Fred Terman -- all built with HP riches. I also have been influenced by the old HP's values, which helped shape my belief that a good company or boss ought to be judged on both performance and humanity -- indeed, that is is exactly how I define a good boss in my new book.]]>I have blogged about it before, but it is a good time to revisit David Packard's wisdom. His quote in the title is wonderful. The worst managers and companies often seem to be doing too many things, making things too complicated for insiders and outsiders, and suffering from scattered attention rather than a sharp focus on what matters most. If you think about Apple, a big part of their brilliance is how few things they do -- they have a remarkably small product line for such a big company, for example.
I especially love Dave's 11 Simple Rules, which he first presented at a company meeting in 1958 but are just as valid now as they were then. Here are the first five:
Main Street may be about to get it's own gigantic bailout. Rumors are running wild from Washington to Wall Street that the Obama Administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt if millions of Americans who owe more than what their homes are worth.Fascinating. I don't think this will help during the November election.