craig cline: My Day Job

Don't Neuter the Net

Mon, 13 Mar 2006 19:45:01 GMT

An important issue - please make yourself aware of it.

WINDOWS

Don't neuter the Net

Net neutrality legislation would stop bandwidth providers' power grab

By Oliver Rist
March 09, 2006

Senator Ron Wyden: We love you. Wyden’s the Oregon Democrat who introduced legislation this week seeking to end this attack on Net neutrality.

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InfoWorld's SOA Executive Forum: Lessons From the Front Lines

Greedy Telcos

Fri, 03 Feb 2006 03:55:40 GMT

From today's GMSV - its clear to me that greed is ruining this country.....

We thought you said spend the $200 billion on "dark fiber"

By JOHN PACZKOWSKI

The United States is the 19th ranked nation in household broadband connectivity rate, just ahead of Slovenia. Want to know why? Because, contends telecom analyst Bruce Kushnick, the Bell Companies never delivered symmetrical fiber-optic connectivity to millions of Americans though they were paid more than $200 billion to do it. According to Kushnick's book, "$200 Billion Broadband Scandal", during the buildup to the 1996 Telecommunications Reform Act, the major U.S. telcos promised to deliver fiber to 86 million households by 2006 (we're talking about fiber to the home, here). They asked for, and were given, some $200 billion in tax cuts and other incentives to pay for it. But the Bells didn't spend that money on fiber upgrades -- they spent it on long distance, wireless and inferior DSL services. Some headlines from Kushnick's work:

By 2006, 86 million households should have been rewired with a fiber optic wire, capable of 45 Mbps, in both directions.

The public subsidies for infrastructure were pocketed. The phone companies collected over $200 billion in higher phone rates and tax perks, about $2000 per household.

The World is Laughing at US. Korea and Japan have 100 Mbps services as standard, and America could have been Number One had the phone companies actually delivered. Instead, we are 16th in broadband and falling in technology dominance.

A damning list of indictments, and one that puts the telcos' demands for a two-tiered Internet in harsh perspective (see " 'Course what we'd really like to do is 'prioritize' some of these services right out of business ..." and "Interesting approach, Bill; why don't you try it on your phone network first?"). We paid an estimated $2000 per household for fiber to the home and instead got DSL over the old copper wiring. As Kushnick notes, that's like ordering a Ferrari and getting a bicycle. The Bells should be ashamed.
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Larry Smarr is Smart!

Wed, 25 Jan 2006 20:14:49 GMT

From Boing Boing - he's going to be at FiRE 06

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Xeni's report from iGRID2005 optical networks event

For Wired News today, I filed this report on the eye-popping technologies on display at this week's iGRID2005 conference at the California Institute for Telecommunications and Information Technology (Calit2).

In the image above, Calit2 director Dr. Larry Smarr shows UCSD Chancellor Marye Anne Fox a zoomable 100-megapixel display that shows live image data (1 foot = 1 pixel maps of post-Katrina NOLA, shot by the USGS) streamed over an encrypted fiber-optic network link. Nortel provided the encryption, and the University of Illinois' Electronic Visualization Laboratory made the display grid happen. There's a 30-machine Linux cluster behind the screen, and you could feel the heat coming off of them!

At one point, a woman who'd evacuated New Orleans walked up to the display and said to UIC's Jason Leigh, "Can we go to my house please?" We did, and we "went" to the Superdome and to burning buildings... in incredible detail. The interlinked displays made this information so much more lifelike than it is on a small laptop screen.

What do high-definition video of seafloor volcanoes and avant-garde Japanese digital cinema have in common? They're both examples of the kinds of bandwidth-intensive information that can be streamed live from remote locations, over ultra-fast optical networks.
And both were demonstrated this week at iGrid 2005. The week-long computing conference, which showcases research in high-performance, multi-gigabit networks, was held at UC San Diego's new Calit2 (California Institute for Telecommunications and Information Technology) facility.
"When you can stream content this high-resolution, you can start thinking about movie theaters as a place where live events can be displayed -- sports, fashion, politics, anything," said Laurin Herr of Pacific Interface, an Oakland-based tech consulting firm that produced the demonstration. "What color film did to audiences used to viewing black and white, what stereo sound did to audiences used to hearing mono, high-definition digital cinema will do to us."
Jaw-dropping demos abounded, promising just as much for scientists as for Hollywood. One experiment on Tuesday featured the first-ever live, IP-based transmission of high-definition video from the bottom of the sea.

Link to Wired News story.

During one high-def demo, scientists on board a ship in the Pacific had hoped to submerge their research instruments for a second round of live undersea footage.

They'd dazzled everyone with a live video feed from the ocean floor the day before -- translucent seafloor critters, "black smoker" volcanic vents, with everything so clear, the water disappeared. Magical undersea life, transmitted live in super-high-def, over IP. The thousands of miles separating us from this remote underwater world just vanished.

But powerful storms made that too dangerous to repeat on Wednesday, so the cameras stayed on the ship instead, beaming realtime interviews of the increasingly woozy crew while the storm pitched and rocked their ship violently.

As we watched that footage, transmitted over IP to optical networks on shore by way of a 15mbps Ku-band satellite, John Orcutt of the Scripps Institution of Oceanography turned to Dr. Smarr in the theater and said "It's still amazing."

Dr. Smarr gazed at the screen and was silent for a moment. Then he replied, "That's because it's the real world."

Oh, and here are details and some little screengrabs from the avant-garde Noh movie: Link. It was pretty amazing, too!

Previously:

iGRID2005: Xeni's notes

Live webcast of undersea volcanoes @ IGRID2005

posted by Xeni Jardin at 08:01:32 AM permalink | Other blogs' comments

News Feed

Sun, 23 Oct 2005 08:05:00 GMT

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Scott Rosenberg's Links & Comment
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Alan Kay: "Generate enormous dissatisfaction". I am entering the final sprint of completing a first draft of my book between now and Thanksgiving or so, so pardon my general bloggy sluggishness. My plan is to resume somewhat more active blogging in December and return in full blast by January.

In the meantime, here's something that caught my eye:

One of the computing pioneers whose work I've had the pleasure of digging into for my book is Alan Kay. In the course of my research I had occasion to read Kay's epic account of The Early History of Smalltalk. Smalltalk is the object-oriented programming language Kay created in the early 1970s at Xerox PARC (while he was also inventing much of the rest of modern computing). The paper is full of interesting stuff, but this observation near the end, about how to motivate yourself to tackle difficult challenges, jumped out at me:

A twentieth century problem is that technology has become too "easy". When it was hard to do anything whether good or bad, enough time was taken so that the result was usually good. Now we can make things almost trivially, especially in software, but most of the designs are trivial as well. This is inverse vandalism: the making of things because you can. Couple this to even less sophisticated buyers and you have generated an exploitation marketplace similar to that set up for teenagers. A counter to this is to generate enormous disatisfaction with one's designs using the entire history of human art as a standard and goal. Then the trick is to decouple the disatisfaction from self worth -- otherwise it is either too depressing or one stops too soon with trivial results.

"Generate enormous dissatisfaction" with one's work -- well, gee, that's something most ambitious people know how to do, one way or another. But such dissatisfaction quickly blossoms into neurotic self-doubt. Ergo Kay's careful recommendation to "decouple the dissatisfaction from self-worth": that's genius. And, I might add, really, really helpful to anyone laboring over a big project like, say, a book.

Of course, this means that you have to figure out other bases for self-worth than the work one has generated enormous dissatisfaction with!

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WSJ.com: What's News US
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Plane Carrying 114 Goes Missing. An airliner carrying 114 people was reported missing shortly after taking off from the Nigerian city of Lagos, officials and media reported Sunday.

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Slashdot
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Congress Pays You $3 Billion to Keep Watching TV.

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Daily Kos
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Sunday Talk - America's Most Wanted Edition.

"Forget the myths the media's created about the White House. The truth is, these are not very bright guys, and things got out of hand." ~ Deep Throat. From the 1976 film "All the President's Men."

Below the Fold:

The Full Sunday Lineup

Tom Delay's wanted poster

In the Comment Section

September 11th should never have occured

Nailing the Hammer (protest photos)

Indicting Rumsfeld for Torture

Lampooning Shrub and Delay

Talk of the Internets

Baaadaasss Women

Condi, bite your tongue!

Top 40 magazine covers of the last 40 years

Cuban Missile Crisis

By Al Rodgers .

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DW-WORLD.DE News
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Vatican rules out married priests

Poland set for presidential runoff

Polls: Brazil to reject gun ban

High-ranking North Korean official dies

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MetaFilter
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Alchoholism,writers,BWI. BWI -Blogging While Intoxicated ... a little less dangerous than DWI, for the most part ... Can you discern a DWI rant from a sober one? What makes many famous writers alcholics? .. and somebody compiled an Amazon list of Top 13 Works of Fiction Dealing with Alcoholism ... ... hick ....

Print Needs its Own Ipod

Mon, 10 Oct 2005 03:09:20 GMT

As Web 2.0's session on teenagers pointed out, the younger generation doesn't read newspapers. time for a new paradigm!

David Carr

Forget Blogs, Print Needs Its Own

IPod

SOMETIMES what appears to be a threat is actually a life preserver.

The poor defenseless music industry cowered - then prosecuted - when the monster of digital downloads came lurching over the horizon. Then the iPod came along and music looks like a business again - a smaller business, eked out in 99- cent units - but still a business.

Cable channels were supposed to gut network television, but instead have become a place where shows like "Seinfeld" and "Law and Order" are resold and rewatched. The movie industry reacted to DVD's as though they were a sign of the imminent apocalypse, and now studios are using their libraries to churn profits.

Which brings us to the last of the great analog technologies, the one many of you are using right now.

The newspaper business is in a horrible state. It's not that papers don't make money. They make plenty. But not many people, or at least not many on Wall Street, see a future in them. In an attempt to leave the forest of dead trees and reach the high plains of digital media, every paper in the country is struggling mightily to digitize its content with Web sites, blogs, video and podcasts.

And they are half right. Putting print on the grid is a necessity, because the grid is where America lives. But what the newspaper industry really needs is an iPod moment.

According to a nifty piece of polling, directed by Bob Papper of Ball State University in Muncie, Ind., and released last week, average Americans spend more time online, on the phone, punching the remote, the radio and the game console than they do sleeping - a total of nine hours a day. And much of the time, they are using more than one medium simultaneously, answering e-mail messages while returning calls with a TV buzzing in the background.

For all the print newspaper's elegance - it is a very portable, searchable technology - it has some drawbacks. A paper is a static product in a dynamic news age, and while every medium is after eyeballs, the industry has to take that quite literally. You cannot read this story while driving in your car - which is how most of America commutes - and you cannot have it on in the background. America is hooked on "companion" media, a pet platform that sits in the corner and pays attention to you when you pay attention to it.

No wonder that print is taking a hit. In the Ball State study, the Internet in all of its incarnations beat out reading print materials in all forms in every age bracket up to 65.

Print's anachronisms, whether it is the last-mile delivery, the slaying of forests, or the sale of thick packages that most consumers use only small slices of, make change inevitable once a better answer is available.

Consider if the line between the Web and print matter were erased by a device for data consumption, not data entry - all screen, no baggage - that was uplinked and updated constantly: a digital player for the eyes, with an iTunes-like array of content available at a ubiquitous volume and a low, digestible price.

Sure, there are tablet PC's and so-called viewpads out there, but they need to boot every time they are used - they are just computers without keyboards. The iPod was not a new kind of CD player, it was a new way of listening to music. And the dangling white headphones became something that brought joy to the ears and also cachet to the wearer.

"There are all sorts of devices coming along," said Dick Brass, who built the first spelling checker that worked and a format for e-books for Microsoft. "When something is good enough and close enough to paper for people to say, 'I want to use this,' then things will change quickly as they have with the iPod."

Newspapers might live long on such devices, but again, there are hurdles, some technical, some economic.

"It looks simple to come up with a tablet that works, but it is not," said Esther Dyson, a consultant on digital issues. "In order to have the power and portability you need, you need power. The screen is the part of the device that uses the most power."

Mr. Brass and others have suggested that superthin lithium batteries will do the trick, or that the power source can be built into the spine of a fold-out two-page device.

But even when such a gadget is finally in a form consumers will glom onto, newspapers will have to fight for space and mindshare. And it is axiomatic thus far that online customers are much lower-margin customers than print customers. Because there is no scarcity of ad space on the Web, you cannot charge nearly so much for a banner ad on a page with millions of hits as you can for a double-page spread in a national paper.

The real peril of the industry has been the uncoupling of the editorial model - still salient if the Hurricane Katrina coverage is any indication - from the business model, which relies in part on classified advertising. The Web gives classifieds a functionality that print will never match. (Thank you, Craigslist.) And everybody knows consumers on the Web do not want to pay for what they can get free, right?

Maybe not. As iTunes has demonstrated, there is a vast swath of consumers who are willing to pay for what they want and avoid the moral taint of unauthorized use.

There is already a crisscross of intention on the part of the current content providers. The primary gesture of Google and Yahoo - search is actually content - is now being woven with video, paid columnists and, ye gads, even some reporters. Television networks are beginning to explore whether people would pay for an on-demand version of their product. Blogs are federating into verticals of quality to be sold to advertisers. Broadcast radio worries about competition from satellite radio while satellite wonders if it can get people to unplug their iPods.

That is the future that newspapers have to prepare for. Readers no longer care so much who you are, they just want to know what you know.

That may sound grim for big media brands, the kind of proposition that will not provide enough cash flow to finance a squad of reporters examining what a hurricane left behind or venturing out onto the streets of Baghdad. But in a frantic age where the quality of the information can be critical, being a reliable news source humming away in everyone's backpack sounds just useful enough to be a business.

Inside Apple's Intel Mac

Fri, 24 Jun 2005 02:58:43 GMT

First Look inside an Apple Intel Mac courtesy of Think Secret.

A first look at Apple's Intel Mac (with photos)

By Ryan Katz, Senior Editor

June 22, 2005 - Apple's Intel-based Mac development kits have started trickling into developer's hands, Think Secret has learned.

The Apple Development Platform ADP2,1, as the systems are officially designated, features 3.6GHz Pentium 4 processors with 2MB of L2 cache operating on an 800MHz bus with 1GB of RAM.

The Intel systems run Mac OS X 10.4 Tiger identically on the surface as ordinary Macs, with the exception of a modified Processor System Preference (from Apple's CHUD tools) that allows the user to toggle Hyper-Threading on or off. Apple System Profiler includes a new line under Hardware listing CPU Features; for the 3.6GHz Pentium 4 this comprises a rather lengthy list of technical acronyms: FPU, VME, DE, PSE, TSC, MSR, PAE, MCE, CX8, APIC, SEP, MTRR, PGE, MCA, CMOV, PAT, PSE36, CLFSH, DS, SCPI, MMX, FXSR, SSE, SEE2, SS, HTT, TM, SSE3, MON, DSCPL, EST, TM2, CX16, and TPR.

Apple's System Profiler reports the graphics card as an Intel Graphics Media Accelerator 800. Inside the Intel Mac, DVI support for the video card is provided by a Silicon Image Orion ADD2-N Dual Pad x16.

The motherboard on the system is unmarked except for the word Barracuda. The system's internals are housed inside a case similar to Apple's Power Mac G5 systems but with a different configuration of fans.

Running Windows; Mac OS X on other PCs

Along with running Mac OS X, Windows XP installs without hitch on the Intel-based Mac, just as it would on any other PC, and booted without issue when installed on an NTFS-formatted partition. The only misbehavior sources encountered involved the video card. Initially, Windows refused to budge from an 800x600 setting on a 23-inch Cinema Display. Some prodding managed to get the screen to 1600x1200, but sources were unable to get Windows to take advantage of the entire screen.

Apple alluded to developers at its recent Worldwide Developer Conference that Windows should be able to run on Apple's Intel Macs.

As for installing Mac OS X on non-Apple hardware, attempts to boot from the included Mac OS X for Intel disc resulted in an error message on both a Dell and off-brand PC. The message states that the hardware configuration is not supported by Darwin x86.

Sources have indicated that Apple will employ an EDID chip on the motherboard of Intel-based Macs that Mac OS X will look for and must handshake with first in order to boot. Such an approach, similar to hardware dongles, could theoretically be defeated, although it's unknown what level of sophistication Apple will employ.

Also uncertain is whether the Intel-based development kits seeded to developers already feature the EDID chip or whether the installation disc contains a less sophisticated installation check that simply seeks out one particular hardware configuration--the one given to developers--and will not install on other configurations.

Photos

Intel Mac Motherboard

Video Card & Slots

Running Windows XP

They don't Even Hide It!

Sat, 04 Jun 2005 20:07:56 GMT

It's greed-per-usual in Washington, I see....

June 03, 2005

Federal Anti-Municipal Wi-Fi Bill Introduced

By Mobile Pipeline Staff

Courtesy of Mobile Pipeline

A Texas Congressman has introduced a bill that impose a nationwide prohibition on municipally-sponsored networks.

Dubbed by the Author, Representative Pet Sessions (R-Texas), the Preserving Innovation in Telecom Act of 2005, the bill prohibits state and local governments from providing any telecommunications or information service that is "substantially similar" to services provided by private companies.

The bill, HR 2726, is similar to a host of state bills pushed by telecommunications companies aimed at fending off municipally-run wireless networks. Some of those bills, most recently one in Texas, have been stalled in state legislatures.

The telecommunications operators say that such networks represent unfair competition while municipalities claim that the services are needed to promote business and close the gap between digital haves and have-nots.

According to Sessions' on-line biography, he is a former employee of Southwestern Bell and Bell Labs. The bill will first be considered by the House Committee on Energy and Commerce.

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Apple on Intel Redux

Sat, 04 Jun 2005 19:38:07 GMT

Wow! But I agree with the analyst who said - how many architecture changes can the Apple communinty endure?

Apple to ditch IBM, switch to Intel chips

Published: June 3, 2005, 5:08 PM PDT

Last modified: June 3, 2005, 5:11 PM PDT

By Stephen Shankland
Staff Writer, CNET News.com

TrackBack Print E-mail TalkBack

update Apple Computer plans to announce Monday that it's scrapping its partnership with IBM and switching its computers to Intel's microprocessors, CNET News.com has learned.

Apple has used IBM's PowerPC processors since 1994, but will begin a phased transition to Intel's chips, sources familiar with the situation said. Apple plans to move lower-end computers such as the Mac Mini to Intel chips in mid-2006 and higher-end models such as the Power Mac in mid-2007, sources said.

The announcement is expected Monday at Apple's Worldwide Developer Conference in San Francisco, at which Chief Executive Steve Jobs is giving the keynote speech. The conference would be an appropriate venue: Changing the chips would require programmers to rewrite their software to take full advantage of the new processor.

IBM, Intel and Apple declined to comment for this story.

The Wall Street Journal reported last month that Apple was considering switching to Intel, but many analysts were skeptical citing the difficulty and risk to Apple.

That skepticism remains. "If they actually do that, I will be surprised, amazed and concerned," said Insight 64 analyst Nathan Brookwood. "I don't know that Apple's market share can survive another architecture shift. Every time they do this, they lose more customers" and more software partners, he said.

Apple successfully navigated a switch in the 1990s from Motorola's 680x0 line of processors to the Power line jointly made by Motorola and IBM. That switch also required software to be revamped to take advantage of the new processors' performance, but emulation software permitted older programs to run on the new machines. (Motorola spinoff Freescale currently makes PowerPC processors for Apple notebooks and the Mac Mini.)

The relationship between Apple and IBM has been rocky at times. Apple openly criticized IBM for chip delivery problems, though Big Blue said it fixed the issue. More recent concerns, which helped spur the Intel deal, included tension between Apple's desire for a wide variety of PowerPC processors and IBM's concerns about the profitability of a low-volume business, according to one source familiar with the partnership.

Over the years, Apple has discussed potential deals with Intel and Advanced Micro Devices, chipmaker representatives have said.

One advantage Apple has this time: The open-source FreeBSD operating system, of which Mac OS X is a variant, already runs on x86 chips such as Intel's Pentium. And Jobs has said Mac OS X could easily run on x86 chips.

The move also raises questions about Apple's future computer strategy. One basic choice it has in the Intel-based PC realm is whether to permit its Mac OS X operating system to run on any company's computer or only its own.

IBM loses cachet with the end of the Apple partnership, but it can take consolation in that it's designing and manufacturing the Power family processors for future gaming consoles from Microsoft, Sony and Ninendo, said Clay Ryder, a Sageza Group analyst.

"I would think in the sheer volume, all the stuff they're doing with the game consoles would be bigger. But anytime you lose a high-profile customer, that hurts in ways that are not quantifiable but that still hurt," Ryder said.

Indeed, IBM has a "Power Everywhere" marketing campaign to tout the wide use of its Power processors. The chips show up in everything from networking equipment to IBM servers to the most powerful supercomputer, Blue Gene/L.

Intel dominates the PC processor business, with an 81.7 percent market share in the first quarter of 2005, compared with 16.9 percent for Advanced Micro Devices, according to Dean McCarron of Mercury Research. Those numbers do not include PowerPC processors. However, Apple has roughly 1.8 percent of the worldwide PC market, he added.

Apple shipped 1.07 million PCs in the first quarter, and its move to Intel would likely bump up the chipmaker's shipments by a corresponding amount, McCarron added.

CNET News.com's Michael Kanellos and Richard Shim contributed to

Gosling on the RIAA

Fri, 06 May 2005 20:47:28 GMT

The RIAA is like the famous captain in the Viet Nam war, who, standing in front of a burning village, said "We destroyed it in order to save it. "

Interview with James Gosling. Mark Frauenfelder: Business Week has a good interview with James Gosling, aka "The Man Who Brewed Up Java." Gosling thinks copy protection and other crippleware schemes in consumer electronics are bad ideas.

Q: What's your personal pet peeve that you think Java might help fix in the future?
A: Just getting my home-entertainment system straight. We've got all of these technologies that are supposed to move media around our homes, but it's this dog's breakfast of agendas [from various suppliers] that makes things just impossible.
"The MPAA has been shooting down anyone who wants to do anything sensible, forcing people like TiVo (TIVO ) to do all kinds of nonsensical things [like making it impossible to skip commercials]. I'd like to have more systems in my house far more open. I'd love to be able to get my car and house talking to each other, or have my telephones and other gear talking to each other, so the frigging CD player or the TV pauses when I answer a phone call.

Link [Boing Boing]

End of the Broadcast Flag?

Fri, 06 May 2005 20:35:47 GMT

From today's Good Morning Silicon Valley - finally, a victory for the people.

The U.S. Court of Appeals in Washington staged a flag burning of sorts today, ruling that the FCC does not have the authority to require makers of TV sets to equip them with a broadcast flag that would prevent digital broadcast signals from being redistributed. In vacating the regulation, the court sided with the American Library Association and others, agreeing that the flag rule, went far beyond the FCC's power to regulate broadcasts. The rule, passed in 2003 and scheduled to go into effect this July (see "Consumer groups refuse to salute digital flag"), was an assault on two of the Net's fundamental building blocks -- open-source software and the principle of end-to-end communication -- and the judges rightly ruled it out of bounds. "The broadcast flag regulations exceed the agency's delegated authority under the statute," the three-judge panel unanimously concluded. "The insurmountable hurdle facing the FCC in this case is that the agency's general jurisdictional grant does not encompass the regulation of consumer electronics products that can be used for receipt of wire or radio communication when those devices are not engaged in the process of radio or wire transmission." Or, as panel member Judge Harry T. Edwards more bluntly told the FCC's lawyers, "You've gone too far. Are washing machines next?''

Etech 2005

Mon, 18 Apr 2005 22:25:17 GMT

O’Reilly’s Emerging Technologies 2005 Conference: Nerdstock!

O’Reilly’s annual Emerging Technologies Conference (or Etech, as the technorati like to call it) has become the gathering place for geeks, hackers, venture capitalists, analysts, and kooks from all over the world. It has a proven reputation for looking at the future in a unique way – both from 50K level (which you find at most such conferences) – but also from the trenches. That many of the speakers and attendees are the people who are actually pushing the edge of the proverbial envelope in practice gives the conference an authority that is lacking from most others.

Besides, where else can you find Feral Robot Dogs hacked to sniff out toxic waste gases at Superfund sites side by side with Amazon’s Jeff Bezos personally demoing Opensearch, a syndicated search tool just announced by Amazon’s A9 search subsidiary (www.a9.com)? Did I mention that this is my favorite conference?

Well, yes, Etech is a Nerdstock. Where else but Etech will you hear Bezos crack the following “joke”: “I asked Danny Hillis (founder of Thinking Machines and now with Applied Minds) ‘What is a global consciousness?’ Danny replied ‘That’s easy – that’s what decided de-caf coffee pots should have an orange handle.’”

Each Etech has a theme, and this year’s was “Remix: your hardware, your software, your media, your world.” “Remix” is a natural evolution of the theme of last year’s event and O’Reilly’s Web 2.0, which both started with the premise that the web has changed everything, and that wonderful things are beginning to emerge from developers and entrepreneurs who are combining web services, social software (such as Wikis) and web site APIs to create “next generation” applications. As Joshua Schachter, creator of www.del.icio.us (a web site that allows people to post their bookmarks and share them with others) said, “It used to be that when you wanted something, you went and made it. Then we turned into a bunch of consumers.”

Etech 2005 spun this process of creating new products and services by “remixing” existing web services, applications, content, music, APIs – and even DNA - as the stuff that the future of computing will be made of. Etech tackled this theme head on, fearlessly addressing not only the technological, but also the political – and legal – ramifications of remixing other people’s intellectual property. Indeed, a pall hung over the conference in the guise of the anti-piracy bills that Orin Hatch and others are trying to get passed that could, according to the EFF and others, make even the iPod illegal.

One of the best aspects of this event is also the thing that makes it so difficult to cover – it has to be one of the most heavily documented conferences in the world, with most of that coverage happening in real time at the event. There’s the conference site, with links to transcripts, MP3s, blogs, wikis and the like (http://www.oreillynet.com/et2005 ). There’s the conference Wiki (http://wiki.oreillynet.com/etech05/index.cgi ) where anyone attending the event could contribute their two cents on sessions, conversations, and even lost items. And of course there is the blog coverage, which in the past year has blossomed into a de rigueur part of covering any conference in real time. In short, if you want to find out what happened at Etech – including, I’m certain, who dated whom – just Google “Etech 2005” (http://www.google.com/search?sourceid=navclient&;q=Etech+2005 ) and you will find over 45 pages of links to both mainstream and blog coverage.

O’Reilly’s Radar

Tim O’Reilly and Conference Chair Rael Dornfest kick off every Etech with a free-wheeling tour of the latest technology and trends that, not coincidentally, comprises the framework for the rest of the conference. Quoting from George Bernard Shaw – “The reasonable man adapts himself to the world. The unreasonable man adapts the world to himself. Therefore progress depends on the unreasonable man.” – Dornfest rattled off a litany of remixes in the lab, companies, home, and “life” and pointed out how “hacks become frameworks become foundations” for future operating systems or applications.

O’Reilly discussed how “design patterns apply to web applications,” borrowing the pattern language pioneered by Christopher Alexander [A Pattern Language: Towns, Buildings, Construction (Center for Environmental Structure Series)]. Quoting Alexander, “Each pattern is a three part rule that expresses a relation between a certain context, a problem, and a solution,” O’Reilly applied it to the world of hacking and application development. For example, people who want to re-use images from the web in other contexts therefore must provide high-resolution images for online materials that you expect others to use. The context in the above example is anticipating every possible future use for images posted on line, the problem is how to provide multiple resolutions for each image on line, and the solution is a service that provides the multiple resolutions depending on what your application requires. (Publishers will recognize that this is what OPI has provided for years in the print world – shouldn’t it work online too?)

O’Reilly went on to point out that many of the most popular web sites are in “perpetual beta,” with open APIs that enable third parties to enhance the main application or adapt parts of the service for their own web applications. Sites that are “always a work in progress” include Google, Flickr, Safari, del.icio.us, and Y!Q (Yahoo Search). At these sites “users add value to shared data. The key to competitive advantage in networked applications is the extent to which your users can augment your data with their own.”

O’Reilly argued that the PC is no longer the only access point for networked applications – increasingly, people around the world are increasingly using their mobile smartphones like the Treo 650 or Blackberry 7280 or Nokia 7610 as a portal to web services such as Flickr or Amazon rather than desktop computers. Design for participation, O’Reilly went on, “A successful open source project consists of ‘small pieces loosely joined (to quote David Weinberger). Therefore your software or service should be architected in such a way as to be modular, to be used easily as a component of larger systems.”

“You no longer have to build all components on the web yourself,” O’Reilly concluded, and pointed to isbn.nu as a site that adds value by aggregating search results of dozens of other sites. www.isbn.nu offers a quick way to compare the prices of any in-print and many out-of-print books at 14 online bookstores.

Last year’s hot topic, social networking, was declared to be “badly broken” in its initial implementations as destination sites like Frienster. However, O’Reilly noted, as a by-product of applications such as email, instant messaging, photo sharing and even book buying, it makes sense. Amazon use of their knowledge of user preferences to provide recommendations to other users is perhaps the best known use of social networking within a commercial site. But there is no reason anyone couldn’t engineer social networking into their applications, and in fact doing so could give you a competitive edge.

To underscore its commitment to “Small pieces loosely joined – and remixed,” O’Reilly announced a new magazine and web site devoted to “hacks and How-tos for your gear” called Make: The first issue contains stories on backyard monorails, XM Radio hacks, iPod tricks, aerial photography with kits, feral robot dogs that sniff out toxic waste, and how to make a magnetic stripe card reader. The magazine launch was accompanied by a Make: Fair, where a dozen of the projects highlighted in the first issue were demonstrated at a wine and cheese reception.

Flickr

Each Etech has its Favorite Company, and this year it was Flickr. The popular photo sharing web site is built entirely on open source, and, as O’Reilly pointed out, in perpetual beta. Indeed, go to the site (www.flickr.com) and “beta” is part of the site’s logo. It has gained immense popularity with the technorati because its open API makes it easy to extend Flickr’s functionality, or to add call-outs to your own Flickr image portfolio directly from within your blog or your web site. Being in perpetual beta, with lots of developers, has its downside. As Flickr’s Stewart Butterfield related in his talk, “Web Services as a Strategy for Startups,” Flickr lost control over a lot of things that were happening, and had to contend with other people’s bugs being inserted into the code stream, not just their own. Sill, the community that has grown up around Flickr has made it a web platform. “You can build a variety of different applications using the Flickr API to provide photo aggregation in a variety of different ways at a variety of different web sites.”

Search

Search has been hot these last few years, not the least because finding things on the web is one of its major raison d’etres. Amazon, Yahoo and Google each had announcements concerning their search products. Jeff Bezos announced a new feature for A9.com that lets other search engines syndicate their search services to the site. Called OpenSearch, A9 added the feature so users can eventually select among thousands of vertical search options and manage them through the search columns that appear on the right-side of A9.com's interface. A9 developed an extension to RSS 2.0 to provide this functionality, and is making it available to other developers as an open source API. Bezos commented that “We wanted to do for search what RSS has done for content.” But as an RSS extension, OpenSearch promises to provide another set of tools for the enterprising developer.

Yahoo announced that the contextual search technology behind Y!Q is available as a Web Service. Fundamentally, this means developers can provide some text as context in addition to their explicit query. This can be very useful in resolving ambiguous queries. For example, if you use Yahoo’s Web Search service to provide web search on your scuba diving web site you might provide a few words or sentences about scuba diving in addition to the user's query. If a user searches for "equipment" with this context as background, they'll find more relevant results than a plain web search for "equipment". Y!Q also works well on content heavy sites such as news or blogs. Article titles or lead paragraphs often work well as context for focusing queries beyond the explicit keywords.

Yahoo also announced a Tech Buzz Game for developers. The Tech Buzz Game is a fantasy prediction market for high-tech products, concepts, and trends. The players goal is to predict how popular various technologies will be in the future. Popularity or buzz is measured by Yahoo! Search frequency over time. Predictions are made by buying virtual stock in the products or technologies a developer believes will succeed, and selling stock in the technologies they think will flop. In other words, “you put your play money where your mouth is." This “Game” has a serious purpose underlying it: it’s the theory of Yahoo Researchers the “price” of each “stock” represents the aggreated opinionon which alternative future will dominate searches. By inference, the results will reflect when people believe interest will shift from one product to the next. O’Reilly worked with yahoo to help formulate the wuestions asked in the “game” in such a way that answering them could be predictive of a given technology is going. The resultant “trends” therefore will be very real data that can be used by pundits and analysts to determine when adoption of, say, OS X Tiger, will switch from Panther.

Google demonstrated several new features. Google Suggests uses predictive text to autocomplete searches. The company uses dhtml to enable you to display the possible search iterations with the number of hits each generates – no small programming feat. Google Personalization gives the user a slider which enables her to skew the results based on the degree to which she wants to map the results to the information contained in her own profile. So if you are searching on Baltimore Orioles and your profile indicates you are a rabid baseball fan the results generated will be skewed toward the baseball team rather than the bird. The last feature, Google Sets, analyses the results from a number of different users conducting similar searches to create a search set that can be used to refine future search results.

Wikipedia

The Wikipedia is an immense project, based on the wiki concept of a web site where people can share their ideas and writings freely, a labor of love, and a demonstration of what the open soruce software movement is all about. It’s a freely licensed encyclopedia written by thousands of volunteers in many languages, with nearly 1.5 million entries across 200 languages. It has 499,388 entries in english, 209,000 in German, and 106,000 in Japanese. It has 350,000+ categories with a hieracrhcial structure, and its entries are peer reviewed. It has been around since 2001 and can be found at www.wikipedia.org .

So, you ask, how can an encyclopedia written by thousands of amateurs around the world with no central editing authority possibly be accurate or useful? Well, not only can anyone write an entry, anyone can edit an entry already written. The Darwinian nature of this process ensures that eventually only the most accurate information is posted. Still skeptical? Wikipedia is more popular (based on page hits) than USA Today, Paypal, and will soon surpass the New York Times.

Wikipedia has spawned similar proejcts in other domains. For example, Wikicities.com extends the wikipedia social model to communities. Over 170 wikicity communities have been formed in the past 3 months. Organization h the community social model of wikipedia is “kinda hard to explain,” according to Jimmy Wales, Wikipedia founder, “ the free-form nature of wiki software lets the community determine how it wants to interact. The softwre doesn’t enforce the rules of social cooperation – that would be too rigid. An override is built-in.”

Wales believes that social innovation will spread to other areas of the web: “Software which enables collaboration is the future of the net.”

Clay Shirky: Voodoo Categorization

In recent years it has become fashionable among the XML set to talk about ontology, metadata, and categorization. Clay Shirky is one of the deeper thinkers at Etech, and hails from NYU’s Interactive Telecommunications Program, He delivered a talk at Etech that effectively says, “Regarding categorization - not so fast.”

“A lot of what we think we know about categorization is wrong, and by trying to adopt what we think we know to the web we are threatening to break things,” Shirky announced at the start of his talk. He gave an example: when the Library of Congress cataloged their collection, they optimized for the number of books they had on the shelf in each category, rather than defining a flexible system with room for future growth and new variations. “They confused the container for the things contained.,” he noted, pointing to how they had a section on the “Soviet Union.” When that entity broke up they changed the categorization for books on Russia and all the newly independent states to “Former Soviet Union” -- because they didn’t have to staff to re-shelve all the books.

Shirky argued that this “kinda works” in the confined world of a library, but it totally breaks down when you try to apply it to the world of the web. “The constraint of having to re-shelve books doesn’t exist in the online world,” he noted. Early web sites like Yahoo attempted to replicate the ontology of the Library of Congress for on-line information, creating categories and then pigeon holing information and links into each. Instead, he argues, on the web it makes much more sense to start with links and build categories around them. “Great minds don’t think alike,” he observed.

Categorization needed to be dealt with in the context of time, realizing that over time the meaning of words and phrases morph and change. “The difference between the temporal and a category is a smear,” he noted, “At any given time a given user did or did not center around a set of tags with a high degre of certainty.”

Shirky argued for an “organic” categorization methodology based on market logic – individual motivation and group value. These approach should start with urls, not categories, which create overlap, not synchronicity, based on probablities rather than binary “this or that” category choices. In organic categorization, both the user and time are core attributes – you need to know when a given user created a given category to understand its ture meaning and context. One-off categories – used once by a given user at a given time, should be ignored by the categorization system, rather than discouraged or deflected. “The semantics are in the users, not the system,” Shirky concluded.

Shirky admitted that discrete formal categorization projects make sense – for example, in a given organization installing a digital asset management system – but that these will become “islands of categorization that won’t connect up with each other.”

Larry Lessig

Larry Lessig, from Stanford Law School and famous around the world for his books and arguments in support of free speech and against the erosion of our “fair use” rights, began his talk with a parable from H.G. Wells. “A mountain climber stumbled into a village in the mountains where everyone was blind, and fell in love with the chief ten’s daughter. The villagers welcomed the relationship between the climber and the girl, but were concerned about his disabilities. They consulted the village doctor, who said a solution was simple, namely to remove the irritant body, namely his eyes.”

Lessig argues that in life and culture there is seldom anything that is truly new and not created by borrowing from many different sources, “cause this is always and forever how cultures have been made, knowledge, politics and corporations are created by remixing.”

Until digital networks came along, all remixing was free. “It needs to be free if we are to avoid infantilizing culture – ‘ordinary ways’ of remixing intellectual property need to be free,” Lessig noted.

In the past, text was able to be remixed. “It took hundreds of years to defend the right to write freely. For our culture, writing is allowed.” Literacy is the process of teaching how to remix other people’s text. What happens when the “ordinary ways” with which people express and re-express their culture, changes? Do their right to remix change as well.

With the advent of digital creativity, the tools have changed. We have bottom-up democracy, blog democracy, peer-to-peer sharing of intellectual property. “When the tools change, do the freedoms change as well?” Lessig asked. “Is the remix for our kids using their ‘ordinary ways’ using digital tools like Garageband, bittorrent, and the iPod to be as free for them as it was for us with typewriters, word processors, and text?”

Will “writing, remixing” be allowed for them? “The answer is No.”

Now you need permission. New forms of expression are illegal. “We can’t teach them how to use these now ‘ordinary ways’ because that would be teaching piracy,” Lessig noted. Existing law conflicts with these new technologies – “We have to reform either the law or the technology, and unfortunately, Congress and the Courts appear to prefer changing the technology rather than the law.”

“In other words, they want us to ‘remove the irritant body,’ namely these machines. We are being told we must conform to 18^th century laws of property, thereby eliminating 150 years of progress we’ve made in establishing the right of fair use of intellectual property,” Lessig exclaimed.

Instead, we have to get them to reform the law to make remix free again. We need to be free to remix, to tinker, but not free to take and distribute other people’s Intellectual property without permission. “If you create a world where people need to assert freedom, then freedom doesn’t exist unless it is asserted,” Lessig concluded.

This is but a small sampling of the great talks, and innovative technologies presented at this year’s Etech conference. I encourage you to follow the links and check out the blogs to explore the conversations in more depth. I’m already looking forward to next year’s event.

-----------------------------------------------------------------------------------------------

Lessig presented a six point plan for creating an environment where the law could be reformed rather than the technology:

Find a way to connect to the other side. We need to call piracy “piracy.” Piracy, not remixing, is wrong. We need to defend the right to remix digital content as we have with text
We need to teach the other side how extraordinarily powerful these technologies are for our kids.
We should demand changing the laws, such as the DMCA etc. to allow digital re-mixing.
We need to change how intellectual property is treated. We need to update fair use to allow remixing with the new technology.
Finally we need to punish them for trying to take away fair use. Form a PAC (an iPac, if you will). We need to establish clear messages about what freedom is.
Support Creative Commons. Creative Commons offers a flexible range of options and protections for authors and artists using an open source model for licensing. www.creativecommons.org

European Software Patents - Thanks, Buddy!

Thu, 24 Mar 2005 02:55:14 GMT

Lessig spoke about this at Etech last week. His point is a good one. By adopting software patents, all europe succeeds in doing is undercutting their own software indsutry. And since Europe wants to become an economic powerhouse offsetting the USA, their software patents will be like shooting thesmelves in the foot.

the "democracy" that is Europe. So despite the fact that the EU Parliament has rejected software patents for Europe, and despite the fact that there is not a qualified majority of member states supporting it, the EU Council has now endorsed their draft of the "Directive on the Patentability of Computer-Implemented Inventions." This struggle continues to astonish me. There's no good economic evidence that software patents do more good than harm. That's the reason the US should reconsider its software patent policy. But why Europe would voluntarily adopt a policy that will only burden its software developers and only benefit US interests is beyond me. They call it a "democracy" that they're building in Europe. I don't see it. Instead, they have created a government of bureaucrats, more easily captured by special interests than anything in the US. [Lessig Blog]

Trade Deficit End Game

Sat, 12 Mar 2005 15:22:35 GMT

My favorite conservative finishes his essay on the Trade Deficit

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Thoughts From The Frontline
John Mauldin's Weekly E-Letter

The Trade Deficit End-Game
by John Mauldin
March 11, 2005

The Trade Deficit End-Game
Et Tu, Japan?
An "Unofficial" Leading Indicator Is Flashing Yellow
A New Bull's Investing Book Club
Spring Break

This week we finish with our series on the US trade deficit. When will we see a real problem? What are the likely results from a balancing of global trade? Where are the investment opportunities, and where are the pitfalls? It should make for an interesting conclusion and hopefully an interesting letter.

Let's start this letter by noting that this week is the anniversary of the all-time high of the NASDAQ. Five years ago this week the NASDAQ topped at 5,048. It eventually dropped to around 1100 before "recovering" to today's close at 2,041.

I remember writing in the fall of 1998 that the NASDAQ was overpriced. Eventually, time has shown that view to be correct. But in 1999, I looked like I didn't have a clue. And I confess at the time, I didn't have a clue. I couldn't figure out what was making the market go up. To me it was clearly a bubble. As a value investor, I couldn't bring myself to participate, other than through money managers who were market timers.

It was perilous to short the market. To paraphrase Keynes, the market can be irrational longer than you can remain solvent. People convinced themselves that we were in a New Paradigm. Except for a brief bump in 1998, the markets had been smooth and continuous for quite a long time. The stability of the economy had led to an increasingly optimistic attitude among market players. That stability had led them to project the then current growth in earnings and stock prices far into the future.

One of my deepest concerns is that the current complacency with the trade deficit which stems from the relative stability of the US economy and markets will lead to an event as dramatic as the fall of the NASDAQ. The US economy is growing handily, thank you very much, and unemployment is slowly beginning to drop. The trade deficit has caused no problems. Is it, I wonder, a replay of the 1990s where the stability of the era created further complacency and a continued growth in the imbalance of market valuations? As a reminder, it was Hyman Minsky who told us that the longer things remain stable the greater the period of instability that will follow it.

There is simply no way to know how far along the process we are. Is it 1996, and Greenspan is muttering "irrational exuberance" or is it 1999 and a New Paradigm?

There are many who now suggest we are in a New Paradigm. This time, we're told, things are different. Every time I hear those words I remind myself of Mauldin's Fourth Rule: It is almost never different. And if it really is different, we won't know it is until long after. You can't alter the basic economic equations of mankind. Value always trumps speculation. Government meddling in the marketplace will lead to imbalance and grief. As I argued last week, it is government interference in the currency markets that is creating the environment for the US trade deficit. And by government interference, I mean primarily Asian governments who are willing to sacrifice profits in their dollar currency portfolios for a growing economy. I can certainly understand their desires and motives, but I'm not certain that it will turn out the way they hope.

The argument for a New Paradigm goes something like this: It's in everybody's interest, and especially that of Asia, to keep the game going. They would be risking political instability if they did not fund the US trade deficit. To stop the game would mean that the US would not be able to buy as much of their goods and services. And we know that Asian governments do not want political instability. Therefore, the circular reasoning goes, the game will continue.

Further, the United States is still the best place in the world to invest money. Our assets far outweigh our liabilities, and our companies are the most profitable and highest margin companies in the world. While many who make these arguments would concede that some adjustment needs to be made, they think that the adjustments will be mostly of a benign nature and not roil the economy.

Alan Greenspan is one who thinks the current global imbalances can be brought into balance without great disruption. Indeed, his experience in dealing with the last bubble reinforces his argument. On this note, I agree with this comment by Stephen Roach of Morgan Stanley:

"Global rebalancing does not have to have a disruptive endgame. Fed Chairman Alan Greenspan used the occasion of the fifth anniversary of NASDAQ 5000 to argue for just such a benign scenario (see his 10 March 2005 remarks, "Globalization," presented to the Council on Foreign Relations in New York). While such a constructive stance is to be expected from any central banker, Greenspan has been in a league of his own in arguing for gentle post-bubble adjustments over the past seven years.

"But there are no guarantees as to the severity of the endgame. Irrespective of mutual interest in the benign resolution of global imbalances, experience tells us the greater and longer the build-up of imbalances, the higher the chance of a more serious correction. In the event of a rougher endgame, the dollar would undoubtedly fall a good deal further, while longer-term US real interest rates would finally start to rise toward more normal historical levels."

A few weeks ago, I introduced you to a paper by Nouriel Roubini and Brad Setser, "Will the Bretton Woods 2 Regime Unravel Soon? The Risk of a Hard Landing in 2005-06" February 2005, on http://www.stern.nyu.edu/globalmacro/. In it they speculate that the implicit agreement between Asian nations to take dollars and fund the US trade deficit may in fact be coming to an end in about two years.

Maybe it will not even be that short of a time before it begins to unravel. Since they wrote their paper and I began this series about one month ago, we have had first Korea, then China and now Japan suggest that it may be time for them to diversify their dollar holdings in their individual central banks.

Et Tu, Japan?

"Prime Minister Koizumi of Japan said his country 'in general' needed to consider diversifying its foreign currency reserves, the world's largest. 'I think it's necessary to diversify the investment destinations' of foreign reserves, Koizumi said. 'At the same time, we have to make a judgment in general, considering what's profitable and what's stable.' This is a big step for Japan, as they have generally always talked about their reserves as a monetary policy tool, rather than a financial investment. With $820 billion now at stake it is clear that the government is concerned about their returns, and the returns of dollar assets to a global investor have recently been ugly. If Japan is going to start moving $820 billion dollars around, it is inevitable that others will try to get ahead of them." (Bridgewater)

Immediately, Japanese Ministry of Finance officials began to either outright deny Koizumi's statement or suggest that the press did not understand the clear intentions of his words. But understand this, if the dollar were to drop 15% against other Asian currencies, while Japan fought to maintain their dollar yen ratio above ¥100 to the dollar, Japan would lose over $100 billion in purchasing power. That is not small potatoes. Koizumi recognizes this and also recognizes the serious strain that their government deficits and huge debts have on their economy. Koizumi was clearly stating that losing $100 billion is not going to be politically acceptable.

As I said a few weeks ago, the dollar is going to become the Old Maid. It is going to start being passed around from country to country in an effort to lessen the impact of a falling dollar in the local economy.

There are many who speculate that foreign nations will begin to sell the dollar. I suppose that is possible, but that is really not something that I'm terribly worried about. The chief concern is not that they sell the dollar, but simply that they stop buying. Let me illustrate.

The nominal U.S. trade deficit widened to $58.3 billion in January from December's downward revised $55.7 billion deficit. A price-related drop in oil imports helped the deficit, but this will likely reverse with the February data. The trade deficit with China widened by $1 billion to $15.2 billion, in part possibly due to a jump in apparel imports following the expiration of quotas. (www.dismal.com)

This year the trade deficit will be well over $700 billion, up almost $100 billion from last year. Our government is running a deficit of some $400 billion. If we were running a balanced budget, we would be able to take that money, and more or less apply it towards the trade deficit. However, since we have a low savings rate and a huge government deficit, it is necessary that we look outside the United States for someone to fund our trade deficit. In essence, we are expecting the Asians to pony up $100 billion more than they did last year.

What happens if they don't? Interest rates will have to begin to rise in order to attract more money. It is simple as that. Interestingly, we watched rates rise in the past few weeks. The interest rate on the 10-year bond has risen to over 4.5%, after being in the 4% range for a very long time. This has also sent mortgages back to one-year highs, and the stocks of home construction companies tumbling.

Is there any evidence that foreign central banks might not be stepping up to the plate? There in fact may be. Dennis Gartman gives us the following comment:

"In this regard we are a bit dismayed by the results of yesterday's 10 year note auction. The bid/coverage and other aspects of the auction were fine, but we did find it a bit disconcerting that the so-called 'Indirect Bidders,' amongst which are the world's foreign central banks, bought only 11% of the total $9 billion at auction. This is down from last month's 29% foreign 'take.' It does, however, compared passably with the last 're-opened' auction went 10% to the 'indirect bidders.' In an untroubled time, this might have been passed off lightly; in the current rather troubled time for the US dollar it cannot be."

I repeat, all that has to happen for the dollar to begin a serious bear market against Asian currencies is for Asian countries simply to stop or to limit their buying. This will also have the effect of driving the dollar down against almost every other currency including the euro. When this happens, we'll be at the beginning of the heavy lifting of rebalancing global trade and currency valuations. This heavy lifting is going to strain more than a few backs. It will take more than a few Advil to deal with the pain.

The process means that interest rates will go up, which will slow the economy and hit the housing markets. Prices of goods from foreign nations will go up, thus creating inflation pressures and limit the ability of the Fed to fight rate increases or to stimulate the economy. I really don't see how the end result can be anything other than a recession. It will catch most economists off guard, as do most recessions.

Is there a recession that we can somehow see in the future? Paul Kasriel, the director of research of Northern Trust suggests that there is a linkage between the dollar holding of foreign central banks and the future economic growth of the US economy. Rather than summarizing this report, I'm going to print it in its entirety, because I think it's important.

An "Unofficial" Leading Indicator Is Flashing Yellow

"The Conference Board's index of Leading Economic Indicators has been trending lower since midyear 2004. Now, an 'unofficial' leading indicator also is starting to signal caution about the future strength of the U.S. economy. This unofficial leading indicator is the sum of the monetary reserves created by the Fed, largely its purchases of U.S. Treasury/agency securities, and the U.S. Treasury/agency securities purchased by foreign official entities, predominantly foreign central banks. In effect, this sum is a proxy for global central bank holdings of U.S Treasury and agency securities. How do central banks, ours and the rest of the world's, get the wherewithal to purchase U.S. Treasury and agency securities? By figuratively printing their national currencies - dollars in the case of the Fed; yen in the case of the Bank of Japan. The Bank of Japan prints the yen to buy dollars. It then uses these dollars to buy U.S. securities.

"[Paul then shows a chart which]shows the year-over-year percent change in this proxy, advanced four quarters, versus the four-quarter moving average of the ISM manufacturing composite index. The correlation coefficient between the two series is 0.63 out of a possible 1.00. So, there is a relatively high correlation between the growth in global central bank holdings of U.S. Treasury/agency securities today and the level of the ISM manufacturing index four quarters from today. When global central banks are adding to their holdings of U.S. securities at a more rapid pace, four quarters later, the pace of U.S. manufacturing activity - and for that matter, the growth in U.S. economic activity in general, tends to pick up.

"What might explain this positive leading relationship between the growth in global central bank holdings of U.S. securities and the growth in the U.S. economy? As alluded to above, central banks purchase securities by creating credit out of thin air - much like a counterfeiter operates. If you or I, presumably not counterfeiters, purchase a security, we either have to cut back on our current spending on other things or sell some other asset we already own. If the latter, and assuming the purchaser of our asset is not a central bank or(?) a counterfeiter, then he has to cut back on his current spending.

"But when a central bank/counterfeiter purchases a security, no one else need cut back on his current spending. In the four quarters ended Q3:2004, the Fed created an additional net $47.9 billion of monetary reserves and foreign central banks purchased a net $323.1 billion of U.S. Treasury and agency securities. The sum of their activities totaled $371 billion. During this same period, the U.S. federal government spent $412 billion more than it took in from taxes and other revenues. Had it not been for the Fed and foreign central banks stepping into the breach, we non-counterfeiters would have had to cut our spending so that the U.S. federal government could continue its spending.

"What is happening now to the growth in global central bank holdings of U.S. securities? It is trending lower. After peaking at 18.5% year-over-year growth in Q3:2004, growth in central bank holdings of U.S. securities sharply decelerated to 12.0% in the fourth quarter of last year. And what is the likely course of this series? [Paul's next chart] shows that there is a negative relationship between the level of the fed funds rate and the growth in global central bank holdings of U.S. securities. The way the Fed gets the funds rate to rise is to slow down the growth in its supply of monetary reserves. As the fed funds rate rises above the U.S. inflation rate, the dollar starts to rise, lessening foreign central bank's motivation to buy dollars and recycle them into U.S. securities.

"In sum, growth in global central bank holdings of U.S. Treasury and agency securities is a leading indicator of U.S. economic growth. A rising fed funds rate is negatively correlated with the growth in global central bank holdings of U.S. securities. Growth in global central bank holdings of U.S. securities is decelerating. The Fed is expected to continue hiking the funds rate. All of this suggests a slowdown in U.S. economic growth is in the cards. (Paul L. Kasriel, Director of Economic Research http://www.ntrs.com/library/econ_research/weekly/.)

The Trade Deficit End-Game

The whole process of global rebalancing is thankfully going to take a great deal of time. But it looks like we may be at the early stages of the Asian countries allowing the dollar to begin to fall. This will bear watching. Every interest- rate increase in the longer part of the yield curve will need to be carefully monitored. Hedge funds are going to be looking at the dollar holdings and new dollar investments of Asian central banks with increased intensity. Indeed, Asian central bank will be looking at their brethren to make sure that one country isn't getting a "jump" on any other country in the rush to "diversify out of the dollar." US debt auctions will come under increased scrutiny. Can anyone say increased volatility, gentle reader?

In my opinion, over the long term the dollar has nowhere to go but down, although over the short term the dollar could give us a head fake and strengthen. Interest rates, at least until we are in a recession, will be heading higher. Please understand this is not the end of the world. Life will go on and eventually we will work through this process, just like we worked through stagflation in the 70s. It was not exactly the easiest of times, but the 80s and 90s turned out just fine, thank you very much. The American economy is quite resilient and can deal with bubbles and imbalances and still improve over the decades. There will be plenty of opportunities for the astute investor to protect and grow his portfolio, not to mention increasing his purchasing power. As I've been writing for many years, investing like it is the 90s is not going to be a successful strategy for quite some time.

It should go without saying, the above scenario will not be a good one for the broad stock market or for bond funds. It's just another reason why I believe we will be in a Muddle Through Economy for quite some time.

Your wishing for a little fiscal restraint analyst,

John Mauldin
JohnMauldin@InvestorsInsight.com

Copyright 2005 John Mauldin. All Rights Reserved.

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Symbian downmarket plans.

Thu, 03 Feb 2005 20:39:48 GMT

Symbian aims downmarket with smart phone software
Symbian puts renewed emphasis on security with low-cost phones

By Peter Sayer, IDG News Service
February 02, 2005

Symbian is taking its operating software for smart phones downmarket with a new focus on high-volume, low-cost phones for the mass market, and a renewed emphasis on security, it said Wednesday.

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The new software could appear in phones in the second half of this year, and will help manufacturers lower costs and bring new models to market quicker in a number of ways, Symbian said. Intel (Profile, Products, Articles) is building reference hardware designs specially for the new software, which will simplify phone manufacturers' work, according to Symbian. In addition, manufacturers will be able to squeeze extra battery life and multimedia performance out of their designs with no change in hardware, Symbian said, thanks to the design of the software and a new compiler from Arm, the developer of the StrongArm chips on which Symbian OS runs.

Version 9 of Symbian OS can help improve security by preventing applications from sending text messages, making calls or accessing personal information on the phone unless specific permission has been granted. However, the details of the implementation are left up to the phone manufacturer, which may choose to request the permission via an on-screen dialog with the user, or simply hide the dialog and grant it automatically, according to Symbian's Vice President of Product Management, Morton Grauballe.

Earlier versions of Symbian software used such security dialogs to prevent the installation of rogue applications -- but the permissions system is no defense against users who will agree to any security question they are asked when installing software of doubtful origin, Grauballe said.

Symbian's image has been tarnished of late by reports of Trojan horse applications such as Gavno which, if installed on a phone running Symbian software, could stop it from functioning. This malware did not exploit any security flaws in Symbian OS, but instead relied on misleading users into agreeing to the installation, the company said.

The company has another strategy to combat the problem of users not paying attention: its Symbian Signed program. This aims to encourage users only to install software that has been digitally signed by an authorized application developer.

Among the other new features in Symbian OS version 9 is support for Bluetooth stereo cordless headphones, and the addition of audio mixing and playback functions -- all of which should appeal to music fans -- as well as the latest copy prevention systems for commercial music files, which should appease the record labels.

The software also gives network operators or employers more remote control over phones running the software. The previous version of Symbian OS introduced over-the-air control of device settings. The new version adds support for other management functions, including the ability to remotely examine which applications are running on it and how they are configured, and even to install new applications, Grauballe said. A digital certificate stored in the phone is first used to authenticate the identity of anyone seeking remote access, then the user is asked whether they wish to grant permission to the remote visitor to enter, he said.

For business users, the new software also offers improved e-mail capabilities, such as the ability to accept meeting invitations sent by colleagues using applications such as Lotus Notes or Microsoft (Profile, Products, Articles) Outlook. Version 9 also adds support for Java Community Process standards for personal information management, the company said.

Phishers At Large

Wed, 02 Feb 2005 22:25:12 GMT

This is one of the greatest threats to home computer users today....

Rise In Worst Spyware Shows Phishers At Work
By Gregg Keizer, TechWeb News

The worst kinds of spyware reached all-time highs in the last quarter of 2004, said a national ISP and an anti-spyware vendor as they released their quarterly SpyAudit report Wednesday.

The numbers offer hard evidence to back up suspicions that phishing scammers are turning to deadlier, stealthier spyware to hijack identities and empty bank accounts.

Spyware -- the umbrella term given to software that installs and runs without the user's knowledge -- collects data such as surfing habits, or, more maliciously, records keystrokes in the hope of snagging account passwords or other confidential information.

According to Atlanta-based EarthLink and Boulder, Colo.-based Webroot, the instances of system monitors -- better known as key loggers and screen grabbers -- and Trojan horses soared in the fourth quarter. System monitors logged a 230 percent increase and Trojans jumped by 110 percent over the previous quarter. Both marked record highs for the year in the fourth quarter.

"The huge increase in systems monitors and Trojans on consumer PCs is extremely disconcerting," said David Moll, the chief executive of Webroot, which sells its Spy Sweeper to both consumers and enterprises.

On average, about 1 in 6 PCs scanned by the EarthLink and Webroot anti-spyware software contains a system monitor. The rate of "infection" by Trojans is about the same.

"It's scary that in the rapidly growing problem of spyware, the worst and most malicious forms are the fastest growing," he said. "You'd expect that the nuisance kind of spyware would be first to spike, but the fact is, spyware is so pervasive that the nuisance category is saturated."

Security analysts have been saying that technically-astute phishers are quitting the practice of setting up bogus Web sites to dupe users into divulging credit card and bank account information, and instead are using spyware to invisibly watch what users enter to access accounts online.

These numbers seem to bear that out.

"This absolutely shows that phishers are turning to spyware," he said. "A lot of the increase is associated with phishing." Calling the numbers "scary stuff," Moll said the rapid rise in the prevalence of key loggers was "harrowing."

"People looking to get personal information out of consumers are shifting to stealthier tactics," agreed Tom Collins, the product manager for EarthLink's core software group.

Moll noted that the practice of "drive-by downloading," in which hackers exploit vulnerabilities in the browser -- usually Microsoft's Internet Explorer -- to infect unwitting surfers, "continues to be a great danger. It's actually the preferred method of spyware writers now."

The trends don't portend well for 2005. Not only did the presence of system monitors climb throughout 2004, but in December, the numbers almost tripled over November's.

"We said in 2003 that spyware was the largest undiagnosed problem on the Internet, and that at some point we would see a spike in the more dangerous types of spyware," said Jerry Grasso, the director of corporate communications for EarthLink. "Even in the first half of the 2004, we were mostly seeing adware and cookies, not the knock-out punch of key loggers.

"These numbers show a rise in the knock-out punch. This is now affecting Grandma."

Moll of Webroot agreed that it's going to get worse. "I've always marveled at the resourcefulness and inventiveness of these people [the spyware writers]. These guys are good. They're crafty."

EarthLink and Webroot collaborate to produce the quarterly SpyAudit report, which is based on data collected as users access free anti-spyware software offered by the ISP and posted on Webroot's Web site.

Symbian Worms

Thu, 27 Jan 2005 22:02:56 GMT

Mobile malware kills Symbian service
New Trojan horse renders some Symbian mobile phones useless

By John Blau, IDG News Service
January 24, 2005

Two new Trojan horse programs threaten to render some Symbian-based mobile phones totally useless.

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The programs, Gavno.a and Gavno.b, masquerade as patch files designed to trick users into downloading them, said Aaron Davidson, chief executive officer of SimWorks International, in a telephone interview on Monday.

Although almost identical with Gavno.a, Gavno.b contains the Cabir worm, which attempts to send a copy of the Trojan horse to other nearby Symbian-based phones via short-range wireless Bluetooth technology.

The Gavno Trojans, according to Davidson, are the first to aim at disrupting a core function of mobile phones -- telephony -- in addition to other applications such as text messaging, e-mail and address books. "Gavno will effectively turn a mobile phone into a paperweight," he said.

Gavno.a and Gavno.b are proof-of-concept Trojan horses that "are not yet in the wild," Davidson said. "We were given an anonymous tip to have a look at them, which we've done. They're real."

Even if the Gavno Trojans aren't sophisticated programs, "they could still cause a lot of damage," Davidson said.

Gavno a., which has a size of around 2KB, comes disguised in a SIS (Symbian Installation System) file, called patch.sis. Gava.b, which is slightly larger, is tucked inside the SIS file patch_v2.sis.

Davidson believes the Trojan programs originated in Russia.

The programs affect phones, such as Nokia's (Profile, Products, Articles) 6600 and 7610 models, using Symbian's OS version 7 with the Series 60 graphical user interface, according to SimWorks, which is located in Auckland.

Not affected are Symbian-based phones such as the P900 and P910 from Sony (Profile, Products, Articles) Ericsson Mobile Communications AB and the A925 and 1000 from Motorola (Profile, Products, Articles) Inc. equipped with the graphical user interface from UIQ Technology AB, SimWorks said. Also unaffected are Nokia's 3650 and Siemens' (Profile, Products, Articles) SX1, running Symbian OS version 6.x together with the Series 60 interface.

To fix infected phones, users will need to restore them to their factory settings, resulting in the loss of all personal data, such as phone book and calendar, according to Davidson.

Mobile phone antivirus experts at F-Secure have not come across the Gavno Trojan horses, nor have they received reports or questions from customers, said Mikko Hyppönen, director of antivirus research at Helsinki-based F-Secure (Profile, Products, Articles). "Even if we haven't located the malware ourselves, we do believe it is out there if SimWorks says it is," Hyppönen said. "Lots of new mobile viruses, worms and Trojan horses are emerging around the world."

In December, SimWorks detected the mobile Trojan horse, MetalGear.a. The program, which masquerades itself as a Symbian version of the Metal Gear Solid game, disables antivirus programs and also installs a version of the Cabir worm identified earlier in the year.

Verison SezNo to Bluetooth

Mon, 17 Jan 2005 04:00:09 GMT

Verizon is just being greedy idiots. The market won't stand for it. many other carriers don't proscribe their subscribers from using Bluetooth or most other features. Hey, what's next? a click charge for each photo taken ona phone?

Bluetooth Disabled? Sue!. Cell subscribers sue Verizon Wireless for disabling Bluetooth file transfer: There was word all over the Net that this was brewing, and this report says the suit was filed. Verizon Wireless disabled Bluetooth file transfer (and possibly other features) on its Motorola v710 phone. The suit alleges, as some online mobile folks have said since this came to light, that Verizon disabled the feature to force its subscribers to transfer photos only through its higher-priced data service offerings. Bluetooth operates at about 700 Kbps of real throughput; Verizon's EVDO network, as cool as it is, can only handle 50 to 100 Kbps upload speeds; slower where there's only 1xRTT available, too. To transfer photos to your computer, you'd need to subscribe to a Verizon data plan and photo plan, transfer the photos, and then download them. So it's a three machine process. The suit may hinge over whether Verizon Wireless misled customers, which it appears prima facie that they did not. As a Motorola spokesperson said, quite amusingly to my ear, "Nobody in the industry has ever said that Bluetooth would always be cost free. It will vary from operator to operator." It's amusing because it implies that files stored on your phone don't belong to you. It's akin to the increasingly common argument made by companies that design devices to play or store media that you purchase or create that the content that you own or have rights to use doesn't really belong to you. What next? Will Verizon Wireless invoke the DMCA in its defense? (Don't ask me how, but remember Lexmark and their DMCA printer cartridge suit.)... [Wi-Fi Networking News]

The Importance of Blogging

Mon, 17 Jan 2005 03:53:50 GMT

An excellent overview of blogging and its importance today....

THE TEN MOST IMPORTANT IDEAS OF 2004: BLOGS AND THE INTERNET.

1. The Blog is a Journal, and Online Journalism is Our Game: 'Journal' is a very inclusive term, and broadly means 'daily writings', and journalists are therefore those who write (or photograph) daily. A diary is a journal, and so is a distinguished medical publication (though the latter is often a monthly, and hence more accurately an anthology or review). So everyone from the author of minutiae of a teenager's life written for a handful of friends, to a prolific daily poster of articles read by thousands, is an online journalist. That's what blogging is, and to attempt to categorize it or restrict it or define it more narrowly is to miss the point. Our tradition goes back centuries, from the writers of regular letters to the poets who wrote from the bunkers of wars to the pamphleteers whose work was critical to the emergence of democracy around the world, we are all journalists, pure and simple daily writers. The fact that our writing is online makes it more accessible but that is all. It is no new phenomenon or quantum leap, merely the rediscovery by many of the joy of composing paragraphs of fact and fiction and sharing them with others.

2. We Are Our Own Content Providers, and
3. Content Has Value Only in Use: The Mainstream Media (which some writers are now calling the 'legacy media' have this arrogant view (reinforced in a recent Atlantic Magazine article, ironically available only to print subscribers) that they are the font of all news, and that the blogosphere would 'have nothing to talk about' if it weren't for them. Such a luddite perception of the entire online community (not just bloggers) explains why these media are losing audience, making 'Rather' unnecessary mistakes, and failing to partner with online journalists and researchers. My diagram above illustrates their strange POV. In reality, legacy and online journalists both use a combination of information sourced outside and their own primary and secondary research and analysis, both write stories based on those content sources, and both use a mechanism to add value to the content called 'journalism' of varying degrees of quality. And online journalists go two better: Unlike the legacy media, they can use The Power of Many to quickly add to, clarify, and when necessary correct mistakes (Britt Blaser calls this recursive journalism). And unlike the legacy media, online journalists have the numbers and front-line perspective to provide a much more personal context than more remote reporters. That's important because news only has value if it's useful, not just merely entertaining. News and other 'information' that is unactionable, which has no impact on what we do with our lives, is merely distraction. Bloggers are just beginning to learn that by providing unique local content (facts and perspectives) they can help the citizen-reader answer the question that the legacy media can't, or won't: What do we do about this?

4. The Content Management Challenge: For all of us on this side of the digital divide, organizing and finding information on our own hard drives and on our blogs is a growing and momentous challenge. For the hard drive, Google Desktop and its imitators are a new, first step. For many bloggers, their posts are ephemeral, and neither they nor their readers really care whether they're lost in the ether, or whether they're even available once they drop into the archives. But an increasing number of bloggers are adding original content or perspective with enduring value, and both they and their readers want it to stick around and be easy to find. Google searches are hit-and-miss. Tagging, assigning your own keywords to content using your own taxonomy, may be an improvement. But ultimately bloggers will face the same challenge as mainstream journalists, librarians, archivists, and anyone with a filing cabinet or a MyDocuments folder: How do I index, sort, organize and present all this stuff in a way in which I, and others I trust, can both browse it and search it? Even non-bloggers, who have taken to using shareable 'social bookmarking' tools like del.icio.us are now facing this content management problem.

5. It's All About What The Big Media Aren't Talking About: All information has spin. The 2004 elections in the US and elsewhere made it clear that the mainstream media, and bloggers, all have a bias in what they present, and, more importantly, what they don't present. It is no coincidence that when citizens are asked what the most important issues of the time are, they mostly parrot what the mainstream media are reporting on. For those on the other side of the digital divide, they don't really have a choice -- other than person-to-person conversations, they have no way to get information on the things that are important to them personally that the mainstream media don't cover. In fact they often don't even think about these as political issues. When Gallup gives people the ten choices of issues to pick the 'most important' from, citizens tend to pick the one on the list that they relate to most personally -- with unemployment, health care and education usually topping the list. But even in the very rare cases when issues like the environment, peace and civil liberties are raised in these surveys, they are described using these abstract and impersonal terms, rather than terms like 'clean air, water and food', 'resolving conflicts peacefully', 'workplace safety', 'safe, affordable quality schools' and 'protecting privacy & other personal freedoms'. So because these hard-to-capture-on-video issues aren't mentioned in surveys of the masses, the mainstream media are vindicated for continuing to ignore them, and the vicious cycle of ignorance is complete. This, of course, is where bloggers come in, to fill the void. Maybe that's why the mainstream media are trying to pre-discredit us as 'a million guys in pajamas'.

6. Blogs' as Echo Chambers, or Not: The failure of the left side of the blogosphere to see that Dean would lose the primary, and that Kerry would lose the election, led many to see the blogosphere as an echo chamber, where like minds (falsely) reassured like minds. But guys like Dave Weinberger disagree, and point out that compared to the mainstream media, or the cloister that filters news for the US Presnit, blogs are pretty open-minded. Does the blogosphere open up people to new ideas or solidify what they already believe and close them off from other points of view? I've argued that people tend to make up their minds once on each issue, and then look for reassurance and only change their initial opinion when they directly experience first-hand conflicting evidence. So blogs can be helpful in allowing people to make up their minds in the first place, and, as long as they are critical thinkers, giving them reassurance that supports those views. Nothing wrong with that. And just because blogs aren't likely to change many minds (written material rarely does by itself) and may allow non-critical thinkers to go on believing foolish things (kinda like Fox News), doesn't invalidate their benefits.

7. Bloggers' Need to Get Out and Investigate More: The most important kind of journalism, the kind that brings real change, is investigative journalism. Blogging is perfectly suited to this challenge, because it requires people out in the community to invest significant personal time and energy in things they care about (since it incurs risks, and pays poorly). The mainstream media have curtained investigative journalism for that reason (libel suits and expensive research budgets don't impress media conglomerates' shareholders). There are some fledgling groups trying to organize bloggers as investigative journalists. They are not cowed by the harrowing experiences of the courageous journalists in Into the Buzzsaw. But in order to provide this value, bloggers need to get away from their comfortable computers and do some things that, to many, will be very uncomfortable: Getting first-hand accounts and taking photos of unpleasant things in unpleasant places, writing up exposes that will incite the wrath of the rich and powerful (and their lawyers), doggedly pursuing the truth in the face of lies, evasion, and bureaucracy. It's a lot harder than sitting and writing about things second-hand, but if we are to be credible, it's vital.

8. Information Is Still Trying to be Free, and Keeping Journalists Poor: Marshall McLuhan's deliberately ambiguous statement "Information is always trying to be free" is great news for the consumers of content, but bad news for those who try to make a living from it. Freelance journalists have been starving for generations, and blogging has created thousands of online journalists with a secret desire to make a living from writing. It's a classical case of a business with low entrance barriers and not even Shirky's Power Law, which would suggest A-list bloggers with a wildly disproportionate share of readers should be able to make a buck from writing, has made it easier. Several recent articles have suggested that blogging is poised to make a breakthrough to profitability, but I'm skeptical -- with so much information available for free, why would anyone in their right mind pay for it? And the argument that advertising will make the difference, that companies will pay for eyeballs, especially if they're in their 'target demographic' are equally uncompelling, because 'broadcast' advertising is anathema to the whole idea of the Internet where everything is customized and one-to-one. If bloggers really want to make money, they're going to have to do it face-to-face with people who are impressed with their writing, and follow the advice of successful consultants: Give content (ideas, surveys, stories) away free, and charge for the add-ons, for effectively implementing them for the customer. As Seth Godin and Malcolm Gladwell can tell you, that's where the value is.

9. The Silence of the Web as Negative Assurance: Dave Weinberger explains why, in the absence of much positive evidence, he's inclined to believe that Bush was wired for the first debate with Kerry because despite everyone talking about the story on the blogosphere there were no plausible other explanations for the bulge. It's the same logic that led intelligent people to 'know' the unknowable -- that there were no WMD in Iraq. In professional auditing circles it's called 'negative assurance', and it means that sometimes you believe what you do in the absence of any compelling evidence to the contrary, if a lot of people have had the opportunity to proffer such contrary evidence. Auditors send out letters of 'negative confirmation' of account balances to their clients' customers with the request that they be returned with corrections only if they're incorrect. This is not as comforting as 'positive confirmations' where a written, signed response is required of each customer, but it's much better than nothing, and usually very effective. So the vast blogosphere provides negative assurance of facts and declarations made by politicians and other vested interests, in the absence of any compelling contrary evidence from bloggers who would be positively disposed to tabling such information if it existed. Further evidence of the Wisdom of Crowds, and comforting in places where the media tend to treat press conferences and press releases as 'facts' needing no corroboration, question or inquiry.

10. The Ultimate Utility of Blogging: Last, but certainly not least, is this remarkable statement from blogger Rob Paterson on the utility of blogging: "The utility of blogging to me is that it is recreating the lost world of a humanity that is connected to itself and hence to everything." Rob and I and a group of bloggers have been working on a compendium of our best and most important work, and we've been exchanging ideas on a theme or shared vision for the book. I suggested that, if it's going to sell, the book needs to have utility to the reader, especially the reader who barely knows what a blog (or online journalism) is. Rob identified three 'values' of blogging to him personally: Finding one's voice; Noticing what gives and what drains one's energy; Redefining the meaning of work as a function of community and fellowship instead of wage slavery. So he's saying, and I agree with him, that blogging (the participation in the conversation as both a journal reader and writer) re-centres you, frees you from being like, and seeing the world like, everyone else, and allows you to see the world and yourself differently, more profoundly (for better and for worse), and hence to liberate yourself and take charge of your own life. Self-awareness, self-reliance, and the personal liberation that comes from deep knowledge. Could there possibly be a higher utility for anything?

Coming up later this month: My Ten Most Important Ideas lists for politics & economics, and for business.

[How to Save the World]

CraigsList Eats Newspapers Ad Revenue Lunch

Mon, 17 Jan 2005 03:36:35 GMT

I've been telling newspapers for several years now that they have more to fear from eBay and Craigslist than any free regional papers because they represent a "better mousetrap"

Craigslist Circles the Globe With Online Classifieds, One City at a Time. Craigslist, the Internet classified ad giant that has given local U.S. newspapers heartburn, is spreading out over dozens of cities in Europe. By By ERIC PFANNER, International Herald Tribune. [NYT > Technology]

Holding Corporate Directors Accountable

Mon, 17 Jan 2005 03:32:08 GMT

Not only is corporate cronyism illegal, it's also bad for business. the autocratic method with whcih many corporations are run usually succeeds in making it diffificult for the company to respond to rapid market changes because too much is invested in the old strategy...

Holding Corporate Directors Accountable. The first thing they teach you on the first day of class in Corporations is how to understand the basic structure of your typical corporation. The shareholders are like "the people" - the voters in an electorate. The board of directors is similar to the legislature, responsible for promulgating rules for the company and overseeing compliance with them. And the officers (people like the CEO, CFO, etc.) are akin to the executive, in charge of day-to-day operations.

In practice, however, the shareholder-voters tend to get little say (especially individual shareholders), and, more crucially, the board seldom performs its oversight duties with the kind of scrupulousness the shareholders (and the public) have a right to expect. Most board members have a cozy relationship with the company's management, if they aren't officers themselves. Ever-present conflicts of interest regularly lead to serious directorial negligence, as we've seen over and over again in scandals from Enron on down.

So what happens when the shareholders sue the directors for their malfeasance? If the plaintiffs are successful at all, then typically there will be a settlement. And the money for the settlement usually comes from either the company's own coffers or their insurers. This essentially means that the directors get off scott free - they don't have to pay a dime for their wrongdoing. Gretchen Morgenson, a business columnist for the New York Times and not exactly a hothead, called this "insane."

But that all changed a couple of weeks ago, when New York State Comptroller Alan Hevesi reached an almost unprecedented settlement with the directors of WorldCom, holding them personally accountable for not stopping the accounting fraud that the company's managers perpetrated on their watch. That's right - ten former directors (including the immediate past Dean of my law school, Judy Areen) will pay $18 million of their own money as part of the settlement.

Why should we be concerned about this? Well, for one, it sets a strong precedent - directors of other companies are now on notice that they may be held personally accountable. (As I mentioned above, the corporate world has almost never seen a settlement as serious as this one.) Corporate malfeasance hurts not only shareholders, but workers, communities and, if it's damaging enough, even the broader economy.

But in this particular case, the shareholders truly are "the people" - the case was brought by Hevesi because he is the steward of New York's mammoth pension fund, a fund in which many ordinary New Yorkers have entrusted a good portion of their retirement savings. (Myself included - I have a bit of cash in that system due to a brief stint working in state government.) This settlement is a victory for all of these people, whom WorldCom's former directors happily once rode roughshod over.

So three cheers for Alan Hevesi. Hevesi and his fellow New Yorker Eliot Spitzer are putting corporate America on notice that if it doesn't perform its legally required duties, there will be serious reprecussions. [Daily Kos]

Blogging to the rescure?

Sun, 09 Jan 2005 08:33:47 GMT

This is one way we will start to take back the country....

---------------------------------------------------

Are Blogs the New Journalism

Richard Koman

Jan. 08, 2005 04:58 PM
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The way TIME magazine saw it in December, 2004 was the start of a "golden age" of blogging -- the rapid-fire web publishing scheme where anyone can publish their rants, photos or detailed reporting on the web in a matter of seconds. While blogging has been around for four or five years, the combination of the hotly contested election and the growth in popularity of blogging tools meant that blogging had hit critical mass.

Before this year, says writer Lev Grossman, "blogs kept a relatively modest profile, and the mainstream media could comfortably treat them like amateur productions that could never compete with real news organizations." But their power has been growing. In 2002 a liberal blog called Talking Points Memo pushed for Trent Lott's resignation as Senate majority leader. In 2004, Russ Kick obtained photos of US soldiers' coffins coming back from Iraq. "The next day they were on the front pages of newspapers around the world," says Grossman.

But the event that pushed blogs into the bigtime, if not the mainstream, was the 60 Minutes debacle, in which a blog called PowerLineBlog suggested that documents presented on "60 Minutes," which seemed to show that President Bush reniged on his National Guard service, were in fact frauds. The post was famously called the "61st Minute."

Half an hour after posting, "there were 50 e-mails in [PowerLine contributor Scott Johnson's] In box from readers offering further arguments and evidence disputing the CBS documents' authenticity. Johnson sifted through the comments and added some of them to his original post. This created a feedback loop. The more comments he posted, the more e-mail he got, which he then posted, generating even more e-mail, and so on. The process turbocharged itself. In all, he updated the post 15 or 20 times over the course of that day. ...

"By 10:30 a.m., Power Line had an arsenal of arguments attacking the memos-typographical, logical, procedural, historical. The three bloggers put up genuine National Guard documents from 1973 so that readers could compare them with the 60 Minutes memos. The Drudge Report, the Mondo Cane grandfather of all right-leaning news blogs, linked to their site about midafternoon, sending a torrent of traffic their way and promptly crashing their Web server. By the end of the day, about 500 sites had linked to Power Line. 'I think it's fair to say that that post that Scott began is probably the most famous post in the young history of the blogosphere,' Hinderaker says proudly. "

What's interesting about this story is not so much that there are "citizen journalists" out there, doing the job that "real" journalists are not doing. In fact, there was no reporting or investigation to the original post -- just a bit of reasoning and reasonable suspicion. It was the flood of posts from readers that created a virtuous circle of other people's ideas, documentary evidence, and widespread dissemination. It is this ecology of facts, opinions and linking that is best described by the term"blogosphere."

Dan Gillmor, who recently left his beat as technology columnist for the San Jose Mercury News, notes in his book "We the Media": "If my readers know more than I do (which I know they do), I can include them in the process of making my journalism better." Journalism, Gillmor suggests, is moving from a broadcast to a conversation. "The first article may be only the beginning of the conversation in which we can all enlighten each other."

Since he wrote those words almost a year ago, Gillmor's thinking has evolved -- so much that he has left his job at the Mercury to start a nascent company to take citizen journalism in new directions. Currently, Gillmor is thinking a lot about what he calls distributed journalism. On his Grassroots Journalism blog, Gillmor credits two sites -- Talking Points Memo and Daily Delay -- with putting the pressure on the Republicans to drop the rule change that would have allowed House Majority Leader Tom deLay to keep his position even if he were to be indicted.

"Something especially important occurred with these two blogs. They asked readers to call their Republican members of Congress and ask how they voted on the original secret vote to give DeLay a break. Readers responded in droves." They reported the responses back to the bloggers. The results were posted. Did you learn how Republicans voted from NPR or Fox or the New York Times? No. But the blogosphere has ways of finding out.

This is just the start of the new journalism, Gillmor thinks. "Suppose, for example, that we assemble a nationwide group of volunteers -- lawyers who are familiar with statutes -- and ask each of them to take a small section of one of those immense congressional bills that the members of Congress don't even read themselves. Suppose, further, that we could get this analysis posted before the House and Senate did their final votes. We might catch a lot of sleazy stuff before it became law. Today we're lucky if we know about any of it before it actually passes."

This blogging thing is starting to look interesting.

Getting the Job Done

Mon, 03 Jan 2005 02:57:45 GMT

A story from Wired, about a programemr who wouldn't take, say, getting fired stand in the way of finsihing the project. This story represents one of the best aspects of being the the Valley....

Worming Into Apple. What happens when you work at Apple on a pet project but it is canceled before it ships and you're fired? If you're Ron Avitzur, you ignore reality and finish it anyway by sneaking into work. By Leander Kahney

Sun, 02 Jan 2005 20:42:53 GMT

Here's Dan's final Merc column, published today.

A Final Newspaper Column, and My Thanks.

(This is also my final Sunday column in the San Jose Mercury News.) Wow, what a ride. I moved to Silicon Valley a little over 10 years ago. I've been constantly amazed by what has happened here since then -- a furious rush of innovation and change. I'm not smart or wise enough to predict in any detail what will happen in the next decade. But I'm certain that, as always, it'll be interesting, because innovation and change are still the coins of this realm. It didn't take long to learn what made Silicon Valley so special. The combination of attributes was unequaled: the great research universities, an astonishing collection of talent, a pool of investors with enormous sums at their disposal and an ingrained culture of risk-taking. (The weather's nice, too.) The willingness -- no, eagerness -- to take risks has always been the valley's most special quality. In most places, business failure leaves an indelible career stain. Here, failure is often seen as an education, provided one fails the right way, which is to say not stupidly or sleazily. The rise and fall of Apple's fascinating but flawed Newton handheld computer, for example, helped spark the Palm Pilot, the true breakthrough in the genre. I won't forget the shiver of excitement I and others in a crowd of tech executives and journalists felt when we saw the first Palm on the 1996 Demo conference stage. We don't think of the Apple iPod or today's ever-smarter mobile phones as more modern handheld computers, but they are. They're also a result of the valley's relentless progress. The chips powering not just PCs but all kinds of everyday objects are making everything more intelligent. Even faster advances in storage mean that all these intelligent things are gaining memory. And the advent of faster data networks -- still retarded by cable and phone companies, unfortunately -- means that we're connecting it all. Those intelligent connections are bringing vast capabilities to the people at the edges of networks. The long-range importance of early Internet file-sharing was not the potential for copyright infringement. It was the heightened ability of everyday people to inform and help each other. Along the way, we went through the bubble years, a time when greed totally superseded all other principles and values. The prevailing Wall Street attitude, which also pervaded the valley, was sickening. When what's acceptable is what you can get away with, society has turned rancid. The bubble's deflation was hellish for those who became collateral damage. But it was useful in reminding us that even in such a fast-changing world, a few tried-and-true principles, economic and otherwise, still applied. In the past several years the valley has returned, in part, to useful roots. Innovation and building great companies matter as much to entrepreneurs as scoring big financially. And everywhere I look, I see innovation. But I also see competition where it didn't exist before. The rest of the world has learned some of the valley's lessons and can provide much of what we do here at a lower cost. This is the harsh dynamism of the modern world at work. The fact that other regions are rising economically is positive overall, even if it's not the best news locally. As noted, I'm not smart enough to tell you what's coming in any specific way. But we can look together at the trends and imagine some of what might be, if all goes well. We will see breathtaking leaps in medicine, environmental protection, and a variety of materials sciences and manufacturing processes. We can thank advances in biotechnology and the emerging field of nanotechnology. Information technology is at the heart of both as a tool, and it will remain so. The Internet and its progeny are still early in their development, meanwhile. The Net is nowhere near as universal as it will be when we enter an age of what some call ubiquitous computing, but the outlines of its value are obvious today. For example, all media will eventually move around the world in little digital packages, called packets, that are the basic units of tomorrow's communications. The importance of this -- in decimating old businesses while improving most people's lives -- has not been sufficiently appreciated. The risks are growing, too. When the ability to do great things spreads away from the center, so does the ability to do massively dangerous things. The power of one fanatic or small group to create incalculable damage -- assuming we don't do it simply by mistake -- should worry everyone. But we should not allow that concern to stifle progress. And, as always, the people and institutions currently holding the clout don't cede it willingly. Governments are clamping down on us in all kinds of ways. Incumbent business powerhouses are trying to hold back the tide as well, not just to keep their positions but also to thwart new innovation that might threaten them. These reactionary encroachments and retrenchments are not surprising. They always occur in times of swift change and challenge. In the end, they are almost always unsuccessful, because progress ultimately finds a way around barriers, and because people challenge the reactionaries. But we need to keep the pressure up, as citizens and people who want the freedom to use these new tools and live in liberty. The stakes are high, and liberty takes work. This is my last column for the Mercury News. Starting tomorrow, I'll embark on a new adventure, a project to help bring online grass-roots journalism to more people and communities. I leave a job that has been a constant challenge in the best sense, often an outright joy. I leave colleagues whom I like and admire. But this opportunity, to help create something truly new and valuable, is too exciting not to try. During these past 10 years I've enjoyed a privileged, front-row seat -- not on a roller coaster, even if it occasionally seemed that way, but a vehicle of exploration. I'm grateful for the opportunity to have taken this fantastic ride. Mostly, though, I'm grateful to you. This has always been about you, the people who read what I write. I've tried to be on your side. Even when you've disagreed with me, you've been on my side in a vital way. You've challenged me to think deeply about technology and the larger issues we must all ponder and deal with in this complex era. You've always known more than I do, and I'm fortunate that you haven't been shy about telling me. Our conversation -- which I hope we'll continue as my new project gets under way -- has been a constant source of inspiration. If it's meant something to you, that pleases me more than I can say. Thank you all.

[Dan Gillmor's eJournal]

Sun, 02 Jan 2005 20:41:07 GMT

Dan Gillmor's Last Column - dan has been an amazing contributor to the valley's culture, being both its chronicler and its conscience. Fortunately, we won't miss him since we still have him. Check out his new Blog....

Saying Goodbye to an Amazing Gig. My final column for the San Jose Mercury News ran in today's paper. My emotions are, needless to say, bittersweet. The editors also pulled five old columns from the archives and re-published them with the final piece. I hope they capture some flavor of these past 10 years. It's been a gas.

[Dan Gillmor on Grassroots Journalism]

Blogs Again step to the Forefront of Breaking News

Thu, 30 Dec 2004 06:52:47 GMT

From Boing Boing, a good set of links to the blogs that are covering the tsunami disaster via a variety of innovative ways....

NYT, Fox News, others on blogs and tsunami disaster. Xeni Jardin: John Schwartz wrote an insightful piece for the New York Times this week about the role blogs play in covering and responding to the tsunami disaster. I was interviewed for the piece, but the people who really have something interesting and valuable to say are the ones over there, on the ground -- and the folks rolling up their geek sleeves to assist.

From relaying first-person accounts (like Sanjay/Morquendi's SMS reports in Sri Lanka), to kick-starting relief efforts (tsunamihelp.blogspot.com, and the Post-Tsunami Reconnect project), to questioning media coverage (Ethan Zuckerman's post about Myanmar), there's a lot going on here The amateur-shot image shown here ran in the NYT story. Snip:

"At sumankumar.com, Nanda Kishore, a contributor, offered photos and commentary from Chennai, India: 'Some drenched till their hips, some till their chest, some all over and some of them were so drenched that they had already stopped breathing. Men and women, old and young, all were running for lives. It was a horrible site to see. The relief workers could not attend to all the dead and all the alive. The dead were dropped and the half alive were carried to safety.' His postings included a photo of a body on a sidewalk with a buffalo walking by. 'It now seems prophetic," he wrote, "for according to the Hindu mythology, Lord Yama (the god of death) rides on a buffalo.'"

Link to story.
Fox News did a segment on this subject yesterday. I spoke with anchor Jon Scott about some of the blogosphere reports we've been pointing to from BoingBoing in recent days. Here are video clips of the Fox News segment: Real, Windows (Many thanks, Mike Outmesguine, for TiVoing and kindly hosting.)

There have been a number of related stories out in the past 24 hours in the Wall Street Journal (Link, sub required), LibC)ration (France) (Link), the Inquirer (UK) (Link), and AP (Link). (Thanks to BB readers including Jean-Luc for pointers)