Innovation: Building Nations

IS THE OBAMA ECONOMIC STIMULUS PLAN LEADING TO A DISASTER?

2009-02-10T13:14:00.004-05:00

These quotes are being heard in the past 3 weeks, since Obama took office, this is a position that the Republican Party have put into consideration when the Economic stimulus plan is at the congress.

Leaders of the republican party, including John McCain have not heard and clearly understood the message of bipartisanship, they just want to stop the plan by saying to the American people and to the world that passing the Plan, will get America into a disaster they will never recover.

But, the current situation is not a disaster?, maybe for the republicans (from low and high chamber) the financial crisis will be recover by itself, following the theories of the auto regulation of the market, held by Alan Greenspan and strongly supported by Reagan, Bush & Bush Jr administration, are the republicans people who lose their memory? We have to remember that they have lead in the past 28 years to this economic disaster, they have to remember that there were only one shinning spot for the economy (and that was Bill Clinton Government), we have to remember that the public debt has doubled in 8 years, from 5 trillion to 10 trillion? That America is facing the worst results in decades?

Is so funny watching McCain speaking about US $80 bn lost for the implementation of the first part of the US $700bn package proposed by George Bush government, with the support of both the democrat and republicans?

The TARP plan ($700bn package) has not worked as it was proposed by the Republican government, the common people doesn’t know where the money goes, and only the banks who get the bailout get benefit, but what about the 3 million people who lost their jobs or the millions who lost their homes?

The Obama stimulus package is based in the premise of “call for action”, Obama administration is showing to the people that “DOING NOTHING is not option”, instead the republican party have designed parallel plans following the same economic principles who guide to this crisis, one of them, lack of transparency, taxes reduction to big corporations such Exxon Mobile, which in 2007 get approximately US 45bn in net revenue and reducing the budget to research, education and innovation.

Obama, itself has said: “This plan is not perfect, it was made on Washington”, but the great economic team he has (from Timothy Geithner, to Lawrence Summers, Paul Volker, Paul Krugman and many others) give the necessary confidence that the plan is designed to boost the economy and to plan for the long term. For example, the budget on ecosolutions will be doubled in 3 years, the budget for schools will be increased dramatically and the jobs that the Plan will create will be in the private sector (95%) of them.

By the other side, treasury secretary, Tim Geithner said in a recent interview to Bloomberg, that they have re-evaluated the second part of the TARP plan, offering full transparency for the people and how the money flows and what is really impacting, the plan also will have the creation of a bad bank for help clean the toxic balance sheets of the banks, but a great change is the plan will not only be directed to help banks, it will be for the people who struggle to survive in the crisis.
Abraham Lincoln is shaking in his tomb, thinking what had happen to his beloved party, to that party who foster for human rights, for the union of America, for the striving for excellence, but most important the party who always looks for increasing the quality of life for the people leaving their ideological differences.

Luckily, there are some republican senators that will help rebuild the power of America, and I want to thank them, and all the American people will thank them in the incoming future because they follow their instincts to put the conditions of the people first, to improve the situation of the country and to look for a really bipartisanship, which is lacking in these times, thanks to Susan Collins from Maine, to Olympia Snowe from Maine and to Arlen Specter from Pennsilvania.

With the help of the people wanting a better live for their grandsons, the Stimulus plan will pass, and then you can track all the transactions at this site: www.recovery.gov .

So, the republican should ask themselves: Is the republican party leading to a disaster?
If they do this, they will ask then: How we help America recover from the failure in the public policies we have implemented in the past 28 years?

Two forums searching "A BEST WORLD"... DAVOS Vs World Social Forum

2009-01-28T08:23:00.005-05:00

Maybe, many people don’t know about the importance of World Economic Forum or known as DAVOS forum.

We know that DAVOS is considered the number 1 space for great global leaders to meet, from almost 38 years.

The forum is known in academic and economic world, the Mexican speaker Miguel Angel Cornejo said 15 years ago in one of his conferences:

“In Davos, Switzerland, year by year is developed a meeting of economist at global level, there is a very interesting discussion… Who meet in Davos? This year, we have 80 presidents from different nations, we have a Bill Gates, a Bill Clinton, and we have the most distinguished people at global level in business, politics, religion, etc”

But 2009 is a crucial year for Davos & world future.

Changes at Davos are moving faster, this year only one member of Obama administration cabinet or top advisers will be send to the forum, because Obama and his economic team will be very busy negotiating with the republican party the 825bn Bailout to save and boost American economy; this member will be Valerie Jarret (White house senior advisor and assistant to president for Intergovernmental Relations and Public Liaison).

Many multinational companies CEOs will not be in the forum, because they were managing the companies hit by the crisis, as Bearn Sterns, Lehman Brothers and others.

Some parties, (Innovation Businessweek editor Nussbaum said are the key of the event), will be canceled, an example is the cancelation of one of the hottest parties held at Davos, the Goldman Sachs party.

Even that 41 head of state will be there, from Vladimir Putin, Angela Merkel & Alvaro Uribe Velez and others; to presidents of multilateral organism as World bank, Interamerican development bank (with the Colombian economist Luis Alberto Moreno, who is going to celebrate the 50 years of the bank at Medellin, Colombia in march 31 of 2009), ONU and others, to Michael Porter, Bono and the always members of the forum: Bill Clinton & Bill Gates.

The main topic will be the global crisis and how to shape the new world, the past DAVOS meeting held in 2008, the discussion was centered in: Will be crisis or recession? , this year the topics covered will be: The new global structure, the environmental policies and the work of the business in shaping a new world.

As Duncan Niederauer, CEO, NYSE Euronext said about the forum: “It’s all going to be about globalization and where we go from here. We’ve had a globalized economy and markets over the past few years and that’s been brought into question given the financial crisis. There’s no going back. Given the financial crisis, I can’t think of a better time for us all to be together. Investor confidence more than anything has been lost throughout the crisis. We’ve got to work together as global leaders to determine how to restore it.”

Many people said that this is an event for the politics, business leaders, academics, economist, “The ELITE of the society”, but we must think and reflex how the decisions or proposals think these days will impact our daily life, that is why I invite you to be pendant of what is going to happen.

So, I will make an analysis about the relevant topics and see what is really happening with the decision makers of the world.

By other side, we should pay attention to DAVOS counterpart, a forum created in Latin America for treat the same topics but with the point of view of New-socialism; in this 9th edition will be 5 Latin-American presidents, including Lula da Silva, because the event will be held in BELME, a Little town in Brazil.

One of the organizers, Francisco Whitaker said about the event: “Davos will meet in a losing environment because the people who are meet there are guilty for nowadays financial situation and are asking what to do”, “We have the right in 2001, with the statement of another world is possible”…”the proposals for create a new world will come from Belem, not Davos”

This is the World Social Forum (FSM, for the meaning in Spanish) 2009.

Okey, thats all, and let the game begins. And see how the 2 approaches came for convert this world a better place.

Obama + technology + new age Rules : Politics

2009-01-23T12:41:00.001-05:00

I was reviewing the Obama stimulus package, after reading an excellent article of businessweek and a friend (Andres Murcia, CEO of CuazArt-Studios) ask me in Google Chat: “ Obama + technology + new age Rules ???”

So, I immediately think in how president Obama has already change the way to do politics and how he is going to start the revolution in Innovation, not only in America, but as inspiration to the entire world.

When Obama began his campaign he used the internet as his pillar for communicate to all the people, with www.barackobama.com, the people can organize events, can know the updates of Obama addresses in all the country, can watch online all his participations during campaign and can see the videos connected with YouTube; Obama supporters also can create a page mybarackobama.com , so they can communicate effectively with the strategist of the campaign and can manage their preferred info and organize actions for contact undecided voters. The page was a success in fundraising, even one day they organize, 1 million in 1 hour, and they do effectively.

When Obama was elected president, they create a new site call www.change.gov , so the people know the plans in deep and participate actively, by entering their stories, by presenting proposals to Obama advisors, by participating with Obama cabinet and giving their opinions in relevant topics as healthcare or minorities (they use Google technology for this issue); this site also have the Obama weekly speeches; One month before Obama took office they created “The Citizens Briefbook” , an online tool for the people to ask direct questions to Obama (with online voting by the same users) and the best will remitted to Obama in person (they used salesforce.com technology for this issue).

By other side, Obama is well known for his personal usage of his Blackberry (a true fan of the device and lover of technology), Research in Motion said if Obama was paid for his promotion he could get a 50 million dollar advertising contract. After a lot of debate about security issues on blackberry for president, National Security Agency (NSA) has allowed Obama to continue use his Blackberry only for personal matters, and instead of that he has to use the Sectera Edge, considered the safest phone in the world.

Right now, the official info of Obama government can be find in www.whitehouse.gov , we should review what new features they are going to implement to continue the communication with the people.

In our next article we will discuss the appearance of the Chief Technology Officer for Obama administration and how the Stimulus package will maintain the innovation and increase the gap with other countries.

Where the capitalism is heading? - THE AMERICAN WAY

2009-01-13T23:08:00.009-05:00

Obama economic stimulus plan is the main concern for U.S right now.
Besides the cruel conflict in Gaza the people are analizing how this plan will affect the live of any american and each citizen of the world.
Several public figures agree with the plan:
Tim O´Reilly (the founder and CEO of the biggest technological publisher, said in his twitter: "Letter detailing Obama's Reforms to Troubled Asset Relief Program sounds promising"
Ben Bernanke (FED CHAIRMAN) said on a conference at London, 13 of January :"A mammoth stimulus package being crafted by President-elect Barack Obama could give the economy a much-needed lift, but other steps must be taken to bolster the wobbly financial system and for any recovery to stick"

The question many people is asking could be: Does the Obama plan will boost the economy and help me to get out of this crisis?

Right now, the economist have great contradictions and making predictions is foolish.
But, we can put attention to what Bernanke said in that conference: "History demonstrates conclusively that a modern economy cannot grow if its financial system is not operating effectively."

Even if you agree or not with Bernanke policies, we should get into the global debate about the world financial system and the future of Capitalism.

The crisis has shown the weakness of the actual financial system, many experts, think tankers, policy writers and economist are reviewing the Capitalist system and proposing a readaptation or change of the system that has held the world to this crisis.

In a series of articles, we will try to abstract the opinions of some global leaders from different nations and cultures, that will give a broader vision of the problem and the solutions offered to change the Global financial system.

We start with America.

THE AMERICAN WAY

Almost one year ago, in that time Microsoft chairman, Bill Gates, was at Davos Forum, discussing about what he call the "Creative Capitalism".
After that, many people have created forums and debates discussing Gates proposal, now we offer the Key points of his "Creative Capitalism"

When Harvard Business School was celebrating their first century of creation, several figures were invited to speak at the 2008 Harvard Business School summit, and one of them, LAWRENCE SUMMERS, who was Harvard president and now the Director of National Economic Council for president elect Barack Obama; gave an interested speech about "The future of Market Capitalism".

In 1889, Andrew Carnegie (considered the second richest man in human history by FORBES in 2007 and the revolutionary entrepreneur of the steel sector, also known for his philantropic activities such the creation of the national library system, the building of the "Carnegie Hall" and the founding of Carnegie Mellon University (CMU). Wrote an article about the Capitalism, the distribution of wealth and the future of the philantropy entitled : "Wealth".

This 3 differente characters, from different backgrounds could give us a different approach to financial system in The American Way.

P.D ; Wait for the next article entitled "The reborn of the dragon"

Davos 2009, The breakthrough the world was looking for...

2009-01-05T10:32:00.007-05:00

In 1971 the world lived great difficulties and problems; the Indo-Pakistan war, the Cambodian war, and Bangladesh liberation war, but also it was a year of positive breakthroughs; the foundation of Walt Disney world, Intel released their first commercial microprocessor, the Apollo 15 as the starting point for lunar rovers and the NASDAQ debuts on the stock exchange.

But in Switzerland, 2 key issues with great impact to the modern world happened:

1) In February 7, the women gain the right to vote in the country.
2) Klaus M. Schwab , a very influential Swiss economist create the “World economic Forum” in Davos, as a Non for profit foundation with the goal of gather the most influential people in business, government, NGOs , journalist and intellectuals, each year to discuss the course of the world and the global initiatives for improve the state of the world.

Right now, these meetings, also calls the “DAVOS MEETING”, because of the city were held, is the world most important forum.

2009, is a crucial year, world crisis getting worst each day, loose of millions of jobs, getting into bankruptcy financial institutions and companies from all the sectors, and an overall loose of confidence at global level.

You could find more info about this year meeting, here

http://www.weforum.org/en/events/AnnualMeeting2009/index.htm

“During the five-day meeting, over 2,500 participants from 91 countries will gather in Davos. Around 75% are business leaders, drawn principally from the Forum's members – 1,000 of the foremost companies from around the world and across economic sectors”

Have you ever thought having in the same place: Bill Gates, Gordon Brown, Indra Nooyi, Mark Zuckerberg and Bono in the same place, discussing the global topics?Okay, this is possible in DAVOS MEETING.

All these, combined with the great hope in the new government of President Barack Obama and how he will change the state of the world in 2009.

So, the debate of how Obama administration will improve the state of the world in 2009 is open, I have prepared a short video with information referred to the topic, and as a guide to track the effects of Obama policies around the globe.

In next days I will add more info about the topic, and will give you the outputs of 2009 Davos meeting.
If you have comments, doubts or anything you want to say, leave your comment!

Remember to enter into the debate… why?

Because in 2003, DAVOS MEETING open a space for the general public to discuss the same topics as the global leaders do each year.

Is your opportunity to get active participation in World decisions...

the decision is yours!

A proposal for Indicators for Outside investors when are looking where to invest in emerging markets SMEs

2008-11-30T19:52:00.005-05:00

A lot of time, without writing an article, i was busy analyzing the new team of President Obama and the Public policies made by George Bush, but now i want to focus in the Venture Capital Industry, and a proposal to the venture capitalist when they are willing to invest in Startups of emerging markets, so here is the Indicators Model:

The Indicators show the connection of 3 key issues for Venture Capitalist, they combine the TEAM, the CONCEPT, and the Market, and how are they connected. But most important how they apply to Emerging Markets and their local reality. Another component for the indicators is the economic and business framework provided by the GOVERNMENT. This gives to the Investors another point of view, not in terms of the forecast made by the entrepreneurs in their business plans or executive summaries, but in terms of their skills, knowledge, creativity and innovation.

Now, i will describe the indicators.

The explanation of each indicator is below the indicator.

• Level of Industry-Research collaboration for development of the concept:

– The Research & Development of the entrepreneurs, from the academia to the development of the startup , publication of academic papers and studies

• Study level of the entrepreneurs:

– The successful companies from 1990 have show that the success is related to the level of study of the entrepreneurs, so the Investors should analyze the equilibrium between the study level, undergraduate, graduate, Master & PHD.

• Level of concept delimitation:

– How the entrepreneurs visualize the vision, mission and goals of the company in 5 and 10 years, and how they delimited the MAIN product or service to offer, because a common problem of the entrepreneurs is to offer many products and services when they are starting

• Level of prototype development

– What percentage of the MAIN product is developed

• Level of Risk Management Processes

– The investors should analyze: If the entrepreneurs have a Risk Management Plan, If the entrepreneurs consider the Risk Management as a key success factor for business; If the entrepreneurs have a process to implement Risk management in all the projects.

• Cultural Awareness from entrepreneurs

– What percentage of the MAIN product is developed

• Level of Blue Ocean Market:

– Analyze if the product/service has a BIG MARKET (more than US $500 mn) or have an Unexplored market

• State of art of technology to be developed and commercialized:

– How is the technology at international level, and what is required for implement in new markets

• Human Resources availability

– A very important factor, because the Investors should analyze the Educational level of the country (in number of graduates, number of researchers and quality of education: Availability of people to work in the project)

• Cultural apprehension of product/service

– Because each country is different, the Investors should analyze how the customer receive the product in his own context

• Number of established competitors

– Look at the number and size of the competitors if there is BIG MARKET; and analyze other competitors if there is a BLUE OCEAN

• Market growth forecast

– The investors should review the Forecast of the Market size from international organizations as IDC, Gartner, Jupiter and similar

• Experience of the team:

– Experience in terms of Market knowledge, Technology knowledge, and capabilities of the Team for developing the STARTUP

• Diversification of the team

– Look the study/experience of each team member and how its complemented

• Foreign language knowledge of the team

– This is a globalized world, so as part of the preparation of the team, The investors should analyze the number of languages speak by the members of the team (this is important for exportation matters)

• Marital Status of the team

– Analyze if they are single, married, etc, Because if there is a combined team, were some members of the crew are young is preferable to be single, so they can focus the 100% of the time to the company

• Leadership skills of the team

– How the members of the team are recognized in communities, groups, by other companies, in the sector; and how they are capable of leader new process to convince “The Best in the place” to join the team

GOVERNMENT

• Legislation:

– Analyze the laws protecting the business in the country

• Patent System:

– How is the patent system established

• Trademark System:

– A very important success factor is the Branding strategy, so the investors should analyze if the Country is in international Trademark agreements

• Tax Incentive for business:

– What are the advantages in economic terms for the company and for the investors

• Cost of life

– Review the cost of life in the country, and specially in the city, because this give a broader knowledge of the economy and the Venture Capital money required

• Cost of doing business

– Review the costs for machinery, human resources, taxes,

• Aligning of business with the Long term plan of the government

– Each government is different, and it have defined a 10,15 or 20 year plan, so the country can focus in some sectors of the economy; so the investors should have to review if the company they are going to fund aligns with this plan.

The importance of the Think Tanks in U.S Government policies

2008-11-04T08:04:00.007-05:00

When Reagan won the U.S elections in 1980, with an overwhelming victory against the democrat candidate Jimmy Carter, it showed 2 important historic realities:

Economic Factor, when a president is considered guilty for recession or an economic depression, when is the cause for terrible foreign image abroad and is considered by the American people as ineptitude to lead the most powerful country of the world, not only generates low levels of popularity, instead of that, when a member of his party of himself run for presidency, it lose.

Think Tank consolidation, when Ronald Reagan was elected president, the HERITAGE FOUNDATION published the first Think Tank blueprint in 1981 entitled “Mandate for leadership”, containing the strategies employed by the past republican presidents, both in Public Policy & Public Management.

Okay, let’s analyze in detail the facts:

Economic Factor:

In 1932, after the “great depression”, the president Herbert Hoover (Republican) run for presidency and loose dramatically against Franklin D. Roosevelt (Democrat).

In 1980, Jimmy Carter, the first democrat to face a debt increasing, with 16% of inflation and a US $75 bn budget deficit.

In 1992, after the National Debt increasing from US $955 bn to US $4tn, the president George H W Bush (Republican) run for presidency and loose dramatically against Bill Clinton (Democrat).

And in 2008, with President George W Bush, the economic situation could not be worse, the National debt increased from US $ 5.6 tn to US $10.5 tn , the budget deficit reach US$ 500 bn, and a GDP for the third quarter of the reach reaching -0,3%, all these combined with the foreclosure problems of 3 million Americans. George Bush supported the Republican candidate John McCain (republican) who is going to lose dramatically against Barack Obama (democrat).

I attach a graph, taken from http://www.lafn.org/gvdc/Natl_Debt_Chart.html :

Think Tank Consolidation:

The Oxford English Dictionary defines a think tank as "a research institute or other organization providing advice and ideas on national or commercial problems"

These institutes, foundations and societies are the evolution of Plato´s academy for thinking how to impact the leaders with ideas to solve the society problems.

In U.S, The Heritage Foundation began in 1973, and is a Republican Think Tank; it supports 2 basic principles (employed by the past Republican Governments, including George Bush):

A) The direct attack of the communism and socialism, by establishing foreign policies focused in attacking other countries with the excuse of “National defense”. That’s the reason; Bush policies have increased the bad perception of America at international level. And counting the “Cold war”, the “Gulf War” and the “Iraq War”

B) Employ of Supply side economics theory, meaning the reduction of income taxes, and in theory causing an increasing of the revenues in the country. The reality has showed how the public policies implementing this theory have failed; let’s see 3 cases:

In Reagan government (1981-1988), the marginal tax rate for wealthiest Americans was cut from 70% to 38%, it produce an increasing of the top brackets wealth and a lost of the government incomes in 3% of the GDP.

In George H. W Bush government (1989-1992), he began with his phrase: “Read my lips: No new taxes”, but he raised taxes and the Washington Post entitled: “Read my lips: I lied”. He continue with the Reagan policies, and the result besides the debt increase was the highest unemployment rate reaching 7,8% and that 14,2% of all Americans lived in poverty by 1992.

In George W Bush government (2001-2008), he made US $630 bn tax cuts to the 1% of the Americans, the salary of the CEOs increased from 254 times the average worker to 400 times, Corporate profits increase from 17,7% in 2000 to 20,9% in 2005.

All these economic policies were considered by 2008 Economic prize laureate Paul Krugman as “Peddling poverty”.

So, all these governments, even if they have not reached their positive goals, they have been influenced by the THINK TANKS (including CATO & AEI, other republican Think Tanks).

So, in 2003, After a meeting between John Podesta (White House chief of staff under Clinton) and Senate Minority Leader Tom Daschle (D-S.D.) decided to create what Infoseek founder Steve Kirsch defined as : “‘a Heritage Foundation for the left”.

So, they began the “Majority American Institute” and then it transform to “The Centre for American Progress”, with an initial budget of US $10 mn and 75 staffers, in 2008, the budget reach the US $25mn with 150 staffers.

As is defined in their site www.americanprogress.com

"As progressives, we believe America is a land of boundless opportunity, where people can better themselves, their children, their families, and their communities through education, hard work, and the freedom to climb the ladder of economic mobility. We believe an open and effective government can champion the common good over narrow self-interest, harness the strength of our diversity, and secure the rights and safety of its people. And we believe our nation must always be a beacon of hope and strength to the rest of the world. Progressives are often described as idealistic enough to believe change is possible and practical enough to make it happen"

Barack Obama advisors include members of “American Progress”, and when he wins the presidency in November 4 of 2008, he will include in his gabinet some members of the Think Tank.

“American Progress” developed an ECONOMIC PLAN FOR THE ADMINISTRATION, call: “Progressive Growth, Transforming America´s Economy through Clean Energy, Innovation & Opportunity.

This plan contains the policies for reach the economic stability and recover the trust of Americans in United States government.

Some of the people, who worked in this plan, are going to be chosen by Barack Obama for his government, some names we are going to speak about in the future are:

Senator Dom Dachsle

Tom Kalil

Richard Samans

Gene Sperling

Todd Stern

Laura Tyson

Daniel Weiss

John Podesta

Sarah Rosen Wartell

Dan Restrepo

Cynthia Brown

We will see how the THINK TANK will impact in OBAMAs government.

Some final thoughts about our next president Barack OBAMA.

He has been supported by 68 Nobel laureates:

6 from Economy (Including Krugman and Stiglitz), 15 from Chemistry, 26 from Medicine & 22 from Physics .

Also he has been supported by 4 Pulitzer award winners.

And part of his economic advisers are: Erich Smidth( GOOGLE CEO), Indra Nooyi ( Pepsico Chairwoman) and Warren Buffet (the wealthiest man of earth in 2008).

Warren Buffet in an interview held in February 15 of 2008 spoke about corporate taxes and the policies for stimulate the economy:

“Relative to GDP, government taxation is 18.5% and spending is 20%, so we borrow the balance. The national debt should not be a scary topic and the fact that it’s gone up is fine as long as it’s proportional to GDP. Where do we get that 18.5%? There’s 2.7 trillion in government revenues. 2.2 trillion comes from individuals, and less than 1% of that comes from the estate tax. 1.1 trillion comes from income taxes, with payroll taxes consisting of 900 billion, but it’s capped at the first $100,000 of salary. We want a tax system that encourages greater prosperity, but it needs to take care of the family.

I think the best way to stimulate the economy is to give money to the poor. They will spend it. Don’t give it to guys like me. Infrastructure investment makes sense, but we haven’t done it in a while and it won’t do anything for the next 6-12 months. Infrastructure is not big relative to GDP. We are a consumer-driven society, spending 106% of production.”

Sell or Buy that is the real question!

2008-10-28T19:17:00.006-05:00

They have been a big discussion right now in the entire world, about the stock market, some people recommend to buy with Warren Buffet, some others recommend to take out your money if you need in the next 5 years (as Jim Cramer did) , we think that is a bad recommendation to tell the people to sell what they have, because the markets are very volatile and in this year the value of their stock has felt down to the lower levels in 10 years, we can recommend to you to take the 25% of your investments and leave the other percentage to long term investment, even if you have invested directly or if you are investing in gold or in commodities this would be a great recommendation, you will loose some money by taking that 25% but you will have the necessary cash flow to survive this crisis, the history taught us that the markets always recover and you will gain a lot of cash, this apply to your 401k plan too. Some other recommendation is to invest in Mutual Funds but in your local currency, because the exchange rate volatility could affect your budget.

A though question is say when the market is going to recover, many people are thinking in 2,3,4 or even 5 years, you should put attention to the liquidity of U.S market, this could be affected by some factors, for example, the U.S presidential elections are in few days, and the polls give as winner Barack Obama, we truly think he will be a great president, in the past week the stocks felt more than 20%, and the world economy will see how positive will be the election of Barack Obama as president of United States of America; he said in a past speech at Chester, Pennsylvania in October 28, 2008 that : “As President, I will ensure that the financial rescue plan helps stop foreclosures and protects your money instead of enriching CEOs. And I will put in place the common-sense regulations I’ve been calling for throughout this campaign so that Wall Street can never cause a crisis like this again. That’s the change we need.”

If McCain wins (with very low chances, except that the Bush government caught Osama Bin Laden) the U.S will get into a depression, because he will continue with the wrong economic policies applied by George W Bush in the past 8 years. One of his campaign proposals is to continue with the irresponsibly war on Iraq, costing US $10 billion each month.

Also we can give you a vision for your future investments when Obama is elected president (this analysis is made based in the policies to be implemented by Obama):

Gaining stocks: Alternative Energy, Construction, Car & Technology companies

Loosing stocks: OIL, Pharmaceuticals, Health Insurance companies

Nowadays the countries are more prepared to recover from crisis, just remember the “Rumble Crisis” in Russia in 1998, they recover because of the increase of the oil prices or the recover of the “Swedish Crisis” in 1990, they recover after a year, we think that in the second semester of 2009 is the right moment to return to the stock market, because in that time we could have an stabilization of the Stocks.

The WEF editor for the Global Competitiveness Report and professor of Columbia University, Xavier Sala i Martin said a very interesting think about the crisis: “You should put attention of how the economy is resisting and how is prepared to challenge the recession, a crucial think is how U.S is stronger enough for maintain the Inflation & the Unemployment level in low rates”

We have to remember to world leaders something that many people know but some apply depending of the occasion, is the recognition of the global economy, and how the U.S economy impact directly to the world economies, this affect to all Latin America, but special Colombia, because this country has U.S as their biggest commercial partner; the economies of ASIA should know the importance of the globalization and that’s the reason 42 countries meet in Beijing for treat the Global Financial recession and what measures they have to appoint, one of those measures was the creation of a Common Crisis Fund (created by China, Japan & Korea) with US $ 80 billion dollars in reserve.

So, how to solve the crisis?,

We have seen that the biggest mistake were made by the banks and the Bailout is a Reward for their greedy Behavior,

So we want to share what we consider the essential work for solve the problem, and for fortune of all us is in the Michael Moore proposal entitled “Heres is how to fix the Wall Street Mess”

“There are 1.3 million homes in foreclosure right now. That is what is at the heart of this problem. So instead of giving the money to the banks as a gift, pay down each of these mortgages by $100,000. Force the banks to renegotiate the mortgage so the homeowner can pay on its current value. To insure that this help does no go to speculators and those who have tried to make money by flipping houses, this bailout is only for people's primary residence. And in return for the $100K paydown on the existing mortgage, the government gets to share in the holding of the mortgage so that it can get some of its money back. Thus, the total initial cost of fixing the mortgage crisis at its roots (instead of with the greedy lenders) is $150 billion, not $700 billion.

And let's set the record straight. People who have defaulted on their mortgages are not "bad risks." They are our fellow Americans, and all they wanted was what we all want and most of us still get: a home to call their own. But during the Bush years, millions of them lost the decent paying jobs they had. Six million fell into poverty. Seven million lost their health insurance. And every one of them saw their real wages go down by $2,000. Those who dare to look down on these Americans who got hit with one bad break after another should be ashamed. We are a better, stronger, safer and happier society when all of our citizens can afford to live in a home that they own.”

The mistake was made when the banks aloud to increase the loans to all the people, we should remember this same attitude in the Colombian stock crisis of 2007, because of excess of debt.

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

This article was wrote in collaboration with Camilo Nova, he is expecting to graduate in Computer Science Engineer from Universidad Distrital in Colombia ; Colombian investor, current CEO of Axia Core and a Free software supporter.

3 essential components for the new Public Policy: Innovation + Knowledgeme Management + ASIA

2008-10-14T23:30:00.003-05:00

This year, the economic crisis in U.S.A has given the global thinkers and the decisions makers a great opportunity to look backward what they have done and to look forward what they should do to work in a collaborative way in this world, that’s the reason the new theory of economics is Collabonomics, this term refer to Collaboration + Economics, and give all the actors the chance to participate in a Wealth creation process for support each other in critical times.

More than 200 speakers from 50 nationalities meet in Seoul in October 14 to 16 of 2008.

This event is the 9^th World Knowledge Forum, this is the continuity of a Forum created in 2000, with the objective of giving answers to the world and how the comprehension of the social, political & economic dynamics could bring both the policy makers and the decisions takers the developing of strategies for reach the global prosperity.

A very interesting point is that this is an Asian Forum and always some of the topics treated refer to the importance of the Asian economies and their increasing impact in the world.

Now im going to show the principal topics treated at 2000 & 2001 Forum, then I will make a resume for 2002 to 2007 forum. And finally an Emphasis in this year forum (Collabonomics)

Year 2000: Shaping the new Millennium with Knowledge:

Principal topics treated:

Forces of the new economy: globalization, free movement of capital and digitalization

Global access to internet and new technologies

E-business

Creativity: Human capital

Knowledge based economy

Knowledge Initiatives reviewed:

Global Knowledge Partnership (GKP)

Digital Opportunities Task Force (DOT. force)

Global Development Gateway (GDG)

Year 2001: Drawing Roadmap for Knowledge Economy & Global Prosperity

Principal topics treated:

Building market power in a well-defined core strategic activity

Knowledge bank

Standardization and regulation in the electronic world

Leadership in Knowledge based economy

Year 2002: Knowledge in a world of Risk: A compass toward new prosperity

Year 2003: Creating a new World Order & Economy

Year 2004: Partnership for Renewed Growth

Year 2005: Creativity & Collaboration: foundation for new era

Year 2006: Creative Economy

Year 2007: Wealth Creation & ASIA

And in this year, 2008, the Forum is: “Collabonomics & Greater Asia”

An Innovator in the Crisis

2008-10-07T16:51:00.000-05:00

Businessweek & Boston Consulting Group created the Global Innovation Index for track the 50 most innovative companies in the world.

When we have to name the companies who are in the index, technological based companies come onto our minds (Apple, Google, IBM, Nintendo, Nokia and more) and in second place companies with great history of innovation culture as General Electric (GE).

But there is one company, which takes the best positions in the global rankings :

Index: Best Global Brands

Index Publisher: Interbrand

Year: 2008

Position: 38

Index: 25 Top-Paying companies

Index Publisher: Fortune

Year: 2008

Position: 10

Index: 100 best companies to work

Index Publisher: Fortune

Year: 2008

Position: 9

Index: 25 Most desirable MBA employers

Index Publisher: Fortune

Year: 2008

Position: 3

Index: The Worlds 50 most innovative companies

Index Publisher: Fortune

Year: 2008

Position: 21

If we look at their Stock progression in the past 2 years, we can see how they have mantained in the financial Crisis, even if they are a Financial institution:

In recent days Warren Buffet (the worlds known investor), invested US $5 bn in stock from Bershire Hathaway because he said: "“Goldman Sachs is an exceptional institution,” he explained yesterday. “It has an unrivalled global franchise, a proven and deep management team and the intellectual and financial capital to continue its track record of outperformance.”

Other index, is the Corporate Governance Quotient (CGQ), which is a very useful tool for people looking to:

1) Buy long term stocks

2) Review the equilibrium between the Board structure, composition and bylaws provisions.

in this metric (evaluated in October 1 of 2008), Goldman Sachs is above the 63.1% of all S&P 500 companies and 93.2% of diversified financial institutions.

So , refering to the definitions of Innovation we have state in this Blog:

"Innovate is also return to the fundamental": Here, Goldman Sachs , who was founded in 1869, conserve the Values and principles devoted by Marcus Goldman (the founder) in his beginning.

"Innovate is create wealth from an invention": Here, Goldman Sachs, in 2007 made profits from the subprime mortgage crisis, making a US $4 bn profit by selling mortgage-backed securities (MBS) short. THis gives an advantage position agains the competitors because in the same lapse of time they lost a lot of money.

Goldman Sachs is a true innovator, it has made a lot of commitments with companies in their mezanine investments and has show to the world that a bank can also be an Innovator (in all the sense of the world).

So, anyone looking to :

1) Work in one of the most famous companies in the world, with offices everywere

2) Have a lot of wealth by helping others increase their wealth

3) Work in an unique environment and be challenged every day

4) And make a career in the Banking Industry...

The best place...

GOLDMAN SACHS..

Venture Capital affected by the crisis

2008-09-30T18:22:00.007-05:00

Is already known that U.S is the economy with the biggest Venture Capital market, and reaches the first position of Venture Capital environment in the world.

And is also known that the Venture Capital began and is actually concentrated in San Francisco/Bay area.

Is the reason why some people created the "Silicon Valley Venture Capitalist Confidence Index" a company for measure the confidence in the VC market.

Is a quarter analysis and is based in a 5 points scale.

The index was created in 2004, reaching 4.3, but in the third quarter of 2007, the confidence pumped and put in 3.54, for this second quarter of 2008 the index reach their lowest level, 3.07.

The causes for this low level are related to:

Credit Crunch.

Richard Yen of Blueprint Ventures said “The optimism in the entrepreneurial environment has been dampened recently by the turbulent public markets, particularly the NASDAQ tech stocks.”

I see 3 points:

The problem is affecting the liquidity of the sector

The VC & Entrepreneurs are not getting IPO because they dont see a good playground for it

Increasing of the interest rates will impact the Limited Partners (LP)

Re-structuration of VC firms:

Steve Carnevale of Point Cyprus Ventures said, “You are seeing more of the old venture firms breaking up due to generational problems, and new funds are becoming smaller. Some are concluding there is not that much need for another venture firm"

But, there are some Golden spots:

Jim Watson of CMEA Ventures said “The alternative energy and cleantech investment area is one of the best opportunities the venture industry has seen and it looks like a long term bet.”

Why?

Because if the oil prices continue to be so volatile the governments and the private sector will look for alternative sources of energy to supply their requirements, and this is a global topic.

Igor Sill said “The shining light ahead in Silicon Valley are those well positioned software companies offering a disruptive sales model (ala SaaS) Open Source and fraud prevention providers which become more attractive to recession affected corporations.”

Why?

Because the Software as a Service (SaaS) model offer a lower price for any kind of software implementations they require, also the SaaS gives the advante to the customer of not having to acquire any kind of hardware .

I think is the opportunity for companies with this business model to show the advantages of their models and how their customer could reduce IT expenses by implementing their services.

Uncertaint future?

Bart Schachter of Blueprint Ventures said “The IPO market will re-open in 2009 as the credit and housing crises ease and the US is headed by a new administration.”

Venky Ganesan of Globespan Capital Partners said “To paraphrase Dickens, It’s the best of times and it’s the worst of times. If you consider the cocktail mix of the credit crunch, high commodity prices, deteriorating consumer confidence and the lack of IPO exits for the venture capital community, then it’s the worst of times. Exits are the river Nile of the venture business and I am afraid the river has been dry for too long. However, if you are an incredible entrepreneur with an innovative idea then this is the best of times. Rents are cheap, people are available and the tourists are gone. While its hard to imagine now, some day in the future the economy will boom, consumers will buy, and, gasp, even housing will go up, and if you lay the seeds of growth now, you will reap then. Be greedy when others are fearful.”

What we can conclude:

There are some venture capitalist loosing the confidence in the market, there are others willing to have IPO in 2009 so they can recover their money, but i think the problem is bigger, after the failout of the Bailout and the stocks roller coaster, example, DOW JONES (Monday loosing 777 points and tuesday winning 485 points) is giving an uncertaint environment for the economy and surely for the VC sector.

My prediction for the incoming VC index report are:

In third quarter will be under 3 points and with a tiny recover in the fourth quarter,

why?

because many Venture Capitalist support Obama,

This was reported in the Venture Capital Midas List for 2007 at Forbes (This list is a classification for the worlwide VC industry):

"Robert Nelsen of Arch Venture Partners (Midas List No. 73) says he was a Bushie who'd never supported a Democrat--until Obama came along.

"There is huge support for Obama among VCs and also high-tech CEOs," notes Nelsen, a $4,600 Obama contributor. "Every fund raiser in Silicon Valley is sold out. Basically, Obama is the right leader at the right time."

Just remember 2 issues:
-Obama will create a New Energy Venture Capital fund with Us $10bn per year

-Obama will win the elections.

How to stop the erosion of America Innovation System?

2008-09-25T15:03:00.011-05:00

This is a topic that has been treated by several editors, writers and politicians, but the appropiate person to analyse the topic is the Pulitzer winning Thomas L. Friedman.

In repetitive ocassions he has been telling us what to do for mantain the first world position on innovation.

"Unless we make America the country most able to innovate, compete and win in the age of globalization, our leverage in the world will continue to slowly erode"

So, the American people has 2 options,

1) Buy the McCain Speech for pursue the "Drill, baby,drill" strategy.

2) Put very attention to Obama mantra of "invent, baby, invent"

We already known the consequences of McCain plan following the strategies made by Bush administration, so in this article we are going to focus on Barack Obama plan for restore the confidence in America and not only mantain the first position on innovation but to advance in developing of green technologies to start buing independent of the oil.

If you go to the website of Obama you will find all the info of the presidential plan, here is the info for the INNOVATION plan.

SCIENCE, TECHNOLOGY AND INNOVATION FOR A NEW GENERATION

“Let us be the generation that reshapes our economy to compete in the digital age. Let's set high standards for our schools and give them the resources they need to succeed. Let's recruit a new army of teachers, and give them better pay and more support in exchange for more accountability. Let's make college more affordable, and let's invest in scientific research, and let's lay down broadband lines through the heart of inner cities and rural towns all across America.”
— Barack Obama Presidential Announcement Speech in Springfield, IL 02/10/07

The key points i have prepared for you are:

Obama Innovation

View SlideShare presentation or Upload your own. (tags: innovationplanobamabarack)

Why the innovation process fail and cause the financial Crisis?

2008-09-22T16:28:00.002-05:00

When i heard the reasoning of Bruce Nussbaum , the "Innovation Guru" from Businessweek comment about the relationship of innovation with the actual financial crisis, when he said:
"the innovation process was flawed"
i began to think:
Does he blame the lack of correct implementation of Innovation process in the financial systems?
Who are the institutions that incorrectly implemented those processes?
Is he right with his statement?
What is a correct innovation process?
how to commercialize innovation in financial market?

As we know, Bruce background is in design, he has been awarded from the Industrial Designers association of America and is a writer that present key questions in the Innovation area,
his question for this topic was: "Have the Numerati caused the crisis on Wall Street by innovating new financial products based on bad models and poor process?"

We are going to get in deep into this statement and try to offer a better understanding of the reallity:

The Numerati, as Stephen Baker describes are a group of Mathematician, scientist and engineers capable of understand, filter and analyze all the info generated in internet for marketing purpose.
These people do this by looking for patterns in human behaviour and then they can quantify the information.

Reading "The Numerati" i found 2 great examples of companies generated by Numerati, one the globally known "GOOGLE" and the other, also known in the financial sector, "Fair Isaac Corporation".

These companies have several similarities:
+His founders are engineers /mathematicians
+His founders are from Standford
+They take advantage of the information an convert in a profitable business.

im going to focus in FAIR ISAAC CORPORATION(FIC):
They developed the widely used credit score model call "FICO SCORE": This is used for the 90% of all the institutions in United States, and offer to the banks an statistical tool for take their credit decisions.

I have seen that Equifax, TransUnion ans Experian (largest credit bureaus in U.S), even if they have their own scheme for calculating the credit they use the FICO.

So, returning to the question of Bruce , lets see the performance of FIC in the past 2 years:

As we see here, there is a big drop in December of 2007, so i looked to the news of the company in that time and i found this:

In October 31 of 2007, the stocks gain their maximum to $37.46 this was attributed to the increase of usage of their Myfico.com service. By other side, their business havent received any decline from the Mortgage markets, these markets represents the 10% of their revenue.

Then, in december 10 of 2007, the company added 2 sits on their board because they began to feel the consequences of the Mortgage market meltdown, and they were preparing for problems in the future.

Then the company decided to make some changes to the FICO system for suit the incoming crisis. This was an strategy to mantain the monopoly because 3 lender companies created a system similar to FICO in 2006 call VantagePoint.

In January of 2008 they anounce that their earnings will fall because of the Mortgage crisis.

All these combined made FIC to drop his stock value more than 25% in 2 months.

But, all this analysis give us an approach to answer the question to Nussbaum?

i dont think so, we have to continue to research what really happen...

but remembering the commentaries of Alabama senator, Richard Shelby about the "Mother of all the Bailouts "

He appoints that this bailout is a reward for WallStreet, because they were:

-Weakly regulated

-They made Bad mistakes

-They were Greedy

so, we have to ask a new question: Does the american regulatory system is capable of managing and controlling the innovations at Wall Street an Main Street ?

Confidence on Stock Investments

2008-09-18T22:41:00.001-05:00

We are in a very volatile market, and the people are very concern about their investments,

Some people have said that when the Index’s gain some points, the market is good, but we have seen that one day the market get up and the other immediately get down, , one day the NIKKEI is gaining 4, 2% and the analyst said that the S&P 500 will recover, but in this year we have seen the major “systematical failure of all the history” after the great Depression.

I remember when Warren Buffet tried to help to maneuver the “Recession”, by offering to reinsure $800 billion of MBIA, Ambac and FGIC (companies managing municipal bonds). And now the biggest Mortgage insurance AIG has been saved by a Government Bailout.

So, listening to some experts as Suze Orman we can identify 3 factors we have always should pay attention to when the Market analysis comes.

1) UNEMPLOYMENT (UP)

2) ECONOMY GROWTH (EG)

3) REAL STATE (RS)

If we put great attention to these factors the “Market confidence equation” will be:

+(EG) -(UP)+ (RS) = Bull Market

+(EG) +(UP)+ (RS) = Bear Market

-(EG) +(UP) - (RS) = Bear Market

-(EG) +(UP)+ (RS) = Bear Market

So, even if you don’t have great knowledge about brokerage or investments, you can analyze by yourself what is going on in the market.

And depending of that, here are some recommendations, which are “Vox Populi” on investments:

When is a Bear Market:

A) A)Maintain your money exactly were you have. Don’t enter in Panic by taking out the money of the banks.

B) B)If you have some money that you will require immediately, take out of your investments.

C) C)Maintain a percentage of your money for Long TERM investment

D) D)Pay attention to other kind of investments: as Commodities and right now some people are investing in GOLD

When is a Bull Market:

A) A) Diversify your investments; invest in many stocks of different sectors, invest in Mutual Funds

B) B)Establish your long term strategy

That’s all for today, and we have to pay attention to the new Bailouts, remember that the U.S government has invested $500 billions of dollars to save many institutions (Freddie Mae, Fanny Mac, AIG and proximately …, we have to see what happen in 2008.

Lets see if rocks!

2008-09-17T10:26:00.005-05:00

Welcome to the Blog,

here are the topics we are going to treat:

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