Sunday, November 23, 2008

The Fragility of the Economic System

I watch the Bozo Business reporters on CNBC and Fox. Mostly CNBC early in the morning and during lunch. They're pretty much cluess and I don't mean that in a nice way. Here's an excellent example of this. Follow the link and watch the video. It contains interviews with Peter Schiff on various news programs. The video was floating amongst the traders.
Trader Talk

Here's an interview with Nassim Taleb and Benoit Mandelbroit on the economy. They're very worried about what will happen.

Read more by Taleb at his website Fooled by Randomness. I've read his book The Black Swan, but haven't read the book Fooled by Randomness.

I'm in the process of reading Mandelbroit's book The (Mis)Behavior of Markets.

Saturday, November 22, 2008

Computers, Malware, Law

Simplification: A substitute teach was charged with showing students pornography when windows with pictures of naked people started popping up on the classroom computer. She could have gone to jail for a long time. It's an example of how clueless law enforcement is when it comes to computers. There was no forensic investigation as to what happened with the computer. It's hard to believe that New London County State's Attorney Michael Regan kept his job.

She was cleared of the pornography charges but still had to plead guilty to disorderly conduct. I suppose that this was a face saving move by Michael Regan.

Go here to get more detail: Connecticut drops felony charges against Julie Amero, four years after her arrest

Reviews, Bonuses, Loyalty

Since it's the time of year for reviews and bonuses, there's been a few articles to come out recently. The following link is to a posting of Bob Sutton's that contains links to information about performance reviews. Sam Culbert in the Wall Street Journal: Get Rid of the Performance Review!

What’s the Value of a Big Bonus?
What would you expect the results to be? When we posed this question to a group of business students, they said they expected performance to improve with the amount of the reward. But this was not what we found. The people offered medium bonuses performed no better, or worse, than those offered low bonuses. But what was most interesting was that the group offered the biggest bonus did worse than the other two groups across all the tasks.

None of the above is new. Annual performance reviews are, at best, a time to rank people. It's easier to justify who to layoff or fire.

When given yearly, bonuses are expected. When it becomes an expectation, it's not really a bonus anymore. It's a part of the yearly compensation. If there's a year when one isn't given, you'll find out that someone was expecting that money to buy their kids something for Christmas or pay some type of expense. Worst yet, you may be sending a signal to employees that things aren't working out so well at the company. Ideally, the company is open honest with it's employees such that company performance is known and isn't a surprise. The employees should have been treated well enough that you wouldn't expect them to leave when bad news is announced. This is called loyalty and it's something today's worker can't afford to give lightly.

Companies that want loyalty should know that it isn't earned easily. It's earned with trust which is built on honesty. Employees need to trust their supervisors and management. Trust comes from being able to believe what management says.

If I were an autoworker, there's no way that I would have any loyalty to automakers. It was obvious from the testimony before congress that don't know what they're doing. They danced around questions and couldn't give good direct answers. They can't be trusted.

It's the same thing with politics. I'm an independent because I can't trust what either party says. I won't sign up for the dogma that is espoused by either side, because I don't believe that they're honest.

Friday, November 21, 2008

Sutton on Automaker Mgmt.

Instead of pointing the finger at the workers and their compensation perhaps it time to talk about mgmt. Bob Sutton does this in his post, The Auto Industry Bailout: Thoughts About Why GM Executives Are Clueless And Their Destructive “No We Can’t” Mindset

I could list hundreds of management, cultural, and operational reasons why I believe that GM is such a flawed organization, but to me, a pair of root causes standout: Most of the senior executives -- and many of the managers -- are (1) clueless about what matters most and (2) suffer from a "no we can't" mindset.