The art of successful monetary policy is in the timing. Measures that might have worked a year or two ago might not be very effective today. Sadly, this would seem to be the case with the European Central Bank’s (ECB’s) latest monetary policy action. Bold as that action might appear to be, it comes at a time when Europe’s economic and political problems have become deeply entrenched. Late in the day, it is too much to expect that monetary policy alone will succeed in turning around Europe’s moribund economy or in improving the dismal state of its politics.Ever since the onset of the European…

More…

Comments No Comments »

Monday was Australia Day. To celebrate, the United States ought to take a page from Australia’s regulatory reform book. Australia is in the midst of a red-tape cutting initiative, which includes discarding unnecessary regulations and taking greater care in adopting new ones. The United States would greatly benefit from a similar regulatory reform effort.Australia’s prime minister, in announcing the round of regulatory reforms, noted that “Red tape is what officials wrap people in when they think that government knows best.” To loosen that overly constrictive regulatory wrapping, on two…

More…

Comments No Comments »

Steve Denning, one of the leading business thinkers pushing the business world to abandon the outdated idea of maximising shareholder value has published an interesting article on Forbes titled Why do managers hate agile?

That immediately made me think of my first experiences with agile as a board member of software and web startups shifting away from waterfall development to agile to improve productivity. On the one hand I was excited by the prospect of more efficient development and getting away from late delivery and poor quality software that I was used to, but on the other hand I struggled with the lack of predictability and commitment inherent in the agile process. As board members we needed to plan for the next round of fundraising, and that required knowing when product would be released and revenues could be expected to increase.

Reading Denning’s article I see that the trade off between predictability and productivity that I describe above is what companies everywhere are struggling with now agile as a methodology is being adopted across the enterprise and not just in development. Managers have generally been trained to deliver predictability and are generally held accountable for hitting their forecasts, making it hard for them to go down the agile route.

The good news for agile fans is that this battle is only going one way. As the world changes faster and faster the advantages of just-in-time agile methods and customer focus in generating quality output are getting greater and greater. Agile methods are also more attractive to the best employees.

That said, predictability is still important to shareholders and hence for companies looking to raise money to maximise growth. The net effect of this is to make the job of CEO and senior managers more difficult – they have to ‘manage’ self-organising teams and try to predict the output. That takes a high degree of trust and a thick skin to take the flack when things go wrong. Choosing shareholders who understand the trade-offs and can tell the difference between systemic poor performance and a blip will help.



More…

Comments No Comments »

The biggest reason to be concerned about polarization in the nation’s capital is that much of the public’s business lies dormant. Most observers believe that there are public benefits to be had by enacting new trade authority, an immigration bill, debt-reduction, Medicare reform, and many other improvements. But one of the most important opportunities relates to the nation’s infrastructure - its roads, bridges, ports, airports, and other investments that help the the private sector and government to conduct its business. We have a lot to gain by maintaining or even improving these public…

More…

Comments No Comments »

In his recent State of the Union speech, President Obama extolled the virtues of “middle class economics,” as a means of spurring economic growth and creating a more inclusive economy. Just what this entails is unclear, but President Obama says this “means helping folks afford child care, college, health care, a home, retirement, and my budget will address each of these issues, lowering the taxes of working families and putting thousands of dollars back into their pockets each year.” On closer examination, the policy agenda the president is laying out is a tired mix of class warfare, new…

More…

Comments No Comments »

I just read novelist Neil Gaiman’s Eight rules of writing. Numbers five and eight are priceless.

5. Remember: when people tell you something’s wrong or doesn’t work for them, they are almost always right. When they tell you exactly what they think is wrong and how to fix it, they are almost always wrong.

I love it! Generalising beyond writing, I would say trust what people have to say about feelings, but be careful with their predictions. Diagnoses sit somewhere in middle. We all know our own feelings, and don’t go wrong there very often, but if a subject is of great interest to us, as for example our company or it’s market might be, then most well meaning attempts to help will fall short because the would be helper has less understanding than we do. We must always be ready for people to call us on our blind spots though.

8. The main rule of writing is that if you do it with enough assurance and confidence, you’re allowed to do whatever you like. (That may be a rule for life as well as for writing. But it’s definitely true for writing.) So write your story as it needs to be written. Write it ­honestly, and tell it as best you can. I’m not sure that there are any other rules. Not ones that matter.

This I like because self-confidence is an entrepreneur’s greatest asset. That said I don’t think this applies totally to startups, which have to operate within the limits of commercial feasibility. The penultimate sentence is as important as the first though. Honest confidence is extremely powerful. When dishonesty creeps in confidence can quickly become arrogance.



More…

Comments No Comments »

President Obama has declared the economic crisis over - and for the United States, maybe it seems that way. But for most other countries, not so much. Their recoveries are faltering. The obvious question is whether the global weakness will infect the U.S. expansion. This is a crucial footnote to Obama’s optimism.
Two major reports - one from the World Bank, the other from its sister organization, the International Monetary Fund - recently lowered estimates for global economic growth in 2015. Said the IMF: “The United States is the only major economy for which growth projections have been…

More…

Comments No Comments »

Deflation is a situation where the prices of goods and services are falling on average, so that most things we buy are getting less expensive over time. Central bankers and politicians around the world are pursuing policies designed to create inflation because of an irrational fear of deflation. Rather than trying to maintain stable prices, these policy makers believe they must maintain a safe cushion of inflation, generally taken to be inflation of 2 percent per year, to ensure that if their policies miss the mark we do not accidentally get deflation. Yet, the idea that deflation would have…

More…

Comments No Comments »

On Thursday, January 15th, the Swiss National Bank (SNB) discontinued its three year effort to maintain its minimum currency floor of the Swiss franc. In a single day the move sent the Swiss Franc (SWF) climbing a massive 21% against the U.S. dollar and 41% against the euro. The move sent shockwaves of unprecedented ferocity through the massive foreign exchange (FX) market, which is by far the largest, and most highly levered, trading market in the world. The monetary tsunami threatened both FX participants and even their brokers. But more importantly, even as the rest of Europe looks to…

More…

Comments No Comments »

It’s too easy to label President Obama’s State of the Union as more tax-the-rich and redistribution. We know that. Rather than name-calling, Republicans must draw a clear line in the sand between their worldview and Obama’s. I’d call that line commonsense economics.
First, you can’t create a new business or sustain an existing one without the seed corn and nourishment of capital investment.
Second, only businesses create jobs. You can’t have a job without a business.
Third, jobs create all incomes, including middle-class incomes.
Fourth, incomes create family and consumer spending.
Okay? This…

More…

Comments No Comments »

Screen Shot 2015-01-22 at 20.10.27

The chart above is from the ever useful Criteo State of Mobile Commerce report.

It’s good to see UK shoppers turning to their phones to shop more than the rest of the western world because UK companies will innovate faster on mobile as a result. We already produce more than our fair share of ecommerce giants and so long as the UK shopper keeps adopting new technology faster than Europeans and Americans we will most likely keep doing so.

 



More…

Comments No Comments »

In November 2011, “inflation” in the EU was measured at 3.3%, while it was a touch lower for the defined “Euro area.” Thus began both an age of great monetary experimentation and no appreciable effects on the one measure intended to “benefit” the most from it all. The ECB has engaged literally trillions in “stimulus” of almost every form imaginable, from buying covered bonds (instruments where banks own their own liabilities) to traditional interest rate maneuvers to simple and dramatic flooding the zone with LTRO’s. And in that time, through all of it, the inflation rate in Europe has…

More…

Comments No Comments »

Screen Shot 2015-01-21 at 11.59.21

I just saw this chart in a Morgan Stanley investor note with the subtitle eCommerce Hits it’s Stride. Firstly it’s good to see that top investment banks continue to see a lot of growth ahead in eCommerce, but more exciting is the notion that an inflection point is coming towards the end of this decade. If that’s true then growth for ecommerce businesses will peak around 2020. Company valuations are highly geared to growth, so we can expect them to peak around the same time. That makes 2015 a great time to be investing in eCommerce startups.



More…

Comments No Comments »

President Barrack Obama’s sixth State of the Union address on Tuesday night was not his best. What it lacked in passion was made up for with sheer fantasy.
He began with assurances that all is well - as all presidents do - and then pronounced that such success proved that “middle-class economics works.”
If you are wondering what middle-class economics means, the president said it “means helping folks afford childcare, college, healthcare, a home and retirement.” My father, who in a lifetime of 6 and 7-day work weeks never made more than $150 a week, would have been offended at the suggestion…

More…

Comments No Comments »

If anyone had any doubt how severely the global economy has been distorted by the actions of central bankers, the “surprise” announcement last week by the Swiss National Bank (SNB) to no longer peg the Swiss franc to the euro should provide a moment of crystal clarity. The decision sent the franc up almost 30% in intraday trading, a scale of movement that is unprecedented for a major currency in the modern era. Although very few in the media or on Wall Street fully understand the ramifications, the situation that forced the Swiss to abandon the peg will soon be faced by bankers of much larger…

More…

Comments No Comments »