Wirearchy

First, I want to clarify something for context.

I do not believe that what I call "wirearchy" will replace hierarchy holus-bolus as an organizing principle (I have said and written this many times).  Rather, I subscribe to Stan Davis’ perspective, outlined in the book Future Perfect (1987).

.

Networks will not replace or supplement hierarchies; rather the two will be encompassed within a broader conception that embraces both. We are still a long way from figuring out the appropriate and encompassing organization models for the economy we are now in."

.

So … today in my inbox I found David Gurteen’s 100th newsletter, a folksy and informative ramble through David’s latest peregrinations.  David is a speaker, consultant and human networking "hub" who travels the world animating Knowledge Cafes.

David was recently interviewed by The Economist Intelligence Unit for a report titled "The Digital Company 2013 - The freedom to collaborate".

David outlines the key themes explored by the report, which sound (to me) very similar to several of the key elements of wirearchy I have discussed here and there over the past several years.

I wonder what Bertrand Duperrin or Luis Suarez (just to pick on a couple of energetic thinkers about the organization of the future) might have to say about the digital company of the year 2013 ?

.

The digital company 2013: Freedom to collaborate

I was recently interviewed for a report The digital company 2013: Freedom to collaborate. being written by Kim Thomas for the Economist Intelligence Unit.

Key findings:

1. Technology knowledge will permeate the enterprise.
2. Social networks will be common in the workplace, like it or not.
3. Beware information paralysis.
4. Digital tools will democratise access to information.
5. Digital tools provide employees with greater control over the information they can access.
6. IT will also need to loosen the reins.
7. Ceding technology control will be good medicine.

Powered by Qumana

.

“The most valuable things in life are not measured in monetary terms.

The really important things are not houses and lands, stocks and bonds, automobiles and real state, but friendships, trust, confidence, empathy, mercy, love and faith.”

Bertrand Russell (1872-1970) philosopher & mathematician

UPDATE (from anonymous commentator)

.

Unfortunately, those things are at an all-time low these days as well. If I were you I’d short empathy and trust.

.

Powered by Qumana

Via the Market Ticker blog by Karl Denninger …

.

This may be the start of the "bond market dislocation" that I have long feared. I hope and pray not, but if this trend continues Treasury is going to find that it cannot sell its debt into the market without slamming rates higher, especially on the long end of the curve, which means an instantaneous implosion of what’s left in the housing market.

The ugly is that 3-month LIBOR widened today, as did the TED Spread. Both should have come in. They did not. LIBOR is essentially unsecured lending and the bad news is that a lot of corporate (and some personal) borrowing is indexed off it. If you are, you’re screwed.

Why has LIBOR refused to come in despite these "coordinated" effort? Its simple: the underlying trust issue has not been addressed, and nobody is seriously proposing to do so.

Paulson and Bernanke now are truly caught in the box, as I have been talking about for more than a year. As they introduce and fund these silly programs like the "TARP" each new program produces more foreclosures by depressing home values and thus tightens the spiral.

See, as long rates go up house prices go down, since the value of a home for most people is Dependant on what they can finance, and that is directly related to interest rates. Get out your HP12C and run the principal value change for a fixed payment if interest rates change from 6% to 8% or 10% - that’s the impact on the value of your house from these changes that are occurring in the Treasury marketplace.

This outcome is what I warned of in "Our Mortgage Mess" back in April of this year; a potential ramping of borrowing costs for government debt, which will not only make sustaining government spending (and perhaps government operation) impossible, but in addition destroy private credit by driving costs in the private sector skyward as well.

Simply put, the "TARP" or "EESA" must be repealed here and now.

It is unacceptable to risk Treasury Funding destruction in order to bail out some bankers. And make no mistake - there is and will be no benefit to taxpayers.

We are also now entering into earnings season, and Alcoa was a warning blast. They missed badly. That won’t be the last.

This is the "value trap" problem that many investors fall into. You see the market down 30% and think its a great buying opportunity.

It is a great buying opportunity only if earnings going forward can be sustained.

But in this case, they cannot. It is flatly impossible; with Treasury borrowing money like a madman, tacking on more than 20% to the national debt in the space of months, carrying costs will inevitably rise as will taxes. Both of these have a multiplier effect (in the wrong direction) on corporate profits, and in addition the "faux profits" from financial engineering have all disappeared at the same time.

The S&P 500’s profit, in terms of gross dollars, are almost certainly going to come in by 50% from the highs, and that assumes we get a garden-variety recession and not something worse. This of course puts "Fair Value" on the SPX down around 750, or another 25% down from here.

The ugly stick potential is what I discussed yesterday, and that risk is very real. Treasury borrowing cost ramps can produce a 1930s-style dislocation in credit, and if it happens then you will see mass bankruptcies not only in corporate America but among individuals as well as borrowing costs ramp to the point of shutting down the marketplace for credit."

Powered by Qumana

Thanks to the blog JOHO for the link to Google’s fun little 10th-anniversary exercise taking us back in time …

.

In honor of our 10th birthday, we’ve brought back our oldest available index. Take a look back at Google in January 2001.

2001 Web Results 1 - 1 of about 1 for wirearchy. (0.07 seconds)

FirstMatter Lexicon

Wirearchy: An organizing principle for creating structures of governance,
strategy, decision-making and control based on meaning, value, …

http://www.firstmatter.com/newsletter/lexicon.asp?key=Wirearchy - View old version on the Internet Archive

Powered by Qumana

We are, in my opinion, collectively watching the "mainstreaming" of a revolt against top-down decisions being imposed on citizens and decision-making processes.  People interconnected on the Web are making this happen.

Just one of many examples … CNN pulling up comments from online contributors (via Twitter, facebook, etc.) to set the context fro comments from official and pundits.

People are talking.

At the risk of boring you with my "wirearchy" mantra …

.

"A dynamic two-way flow of power and authority, based on knowledge, trust, credibility and a focus on results, enabled by interconnected people and technology"

.

For more, check out the link "What is Wirearchy?", over in the left sidebar of this blog.

Powered by Qumana

A new widespread acronym has been born.

TARP = Troubled Asset Relief Program

I’ve also seen it translated to TARP = The Anal Rape of the People.

Ouch !

Powered by Qumana

This is such a classic tale.

It fits so nicely with a great deal of what I observe about modern North American culture … can’t talk about the negative aspects of what’s really happening (and no, not everything is negative, but it sure as shit ain’t all happy-clappy either).  We must stay positive and upbeat because after all, people don’t want to hear and don’t respond to the negative.

Via the NY Times … read the full piece here

.

Shiny Happy Bankers

Virginia Heffernan, September 26, 2008

In my imagination, a bank — a real bank — is suffused with a hush, which is interrupted, rarely, by the low gong of a massive vault slamming shut. The sole personnel are the huissiers of Geneva fortresses, those solemn openers and closers of locked doors. Clients dress in bespoke suits and stand reverent before the ramparts that secure their annuities in gold bars and serve as bulwarks against their ruin.

A bank’s own practice of borrowing and lending on its clients’ fortunes is not spoken of too directly, lest it cloud the illusion that when the money is out of sight, it’s in the vaults.

In my fantasies, banks are never financial-services firms, and Bill Clinton did not sign the 1999 law that repealed the Glass-Steagall Act of 1933, allowing commercial and investment banks to merge.

It seems that the once-glorious Wall Street investment banks — Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, Bear Stearns — don’t share my fantasy. Even as they were sick, dying or dead, their Web sites had a chipper, customer-service vibe. They were still babbling about helping me realize my dreams. And money, when I could follow it on these silly sites, tripped around the globe, becoming euros and yen only to spread subprime stardust on razed fields where enchanted condos grew.

It was a missed opportunity. After all, it might have been an excellent time to shore up the confidence of those who wondered what American banks were up to, if not protecting our money. But the banks were sticking with their goofy bravado.

[ Snip ... ]

Over at Lehman.com, I came upon an audio file of a Sept. 10 “investor call” by Richard S. Fuld Jr., the chairman and chief executive of Lehman Brothers. In his remarks, Fuld unfurled “a substantial de-risking of our balance sheet” that he said would “allow the firm to return to future profitability.”

It’s perversely interesting to hear a C.E.O. whose firm was just a few days away from flat-out bankruptcy evince unruffled self-assurance. Whether the plane is going down or just bumping in turbulence, the captain apparently always says the same thing.

.

Mind-blowing !

Bring to mind the lyrics of Leonard Cohen’s "Everybody Knows" …

Everybody knows that the dice are loaded
Everybody rolls with their fingers crossed
Everybody knows that the war is over
Everybody knows the good guys lost
Everybody knows the fight was fixed
The poor stay poor, the rich get rich
Thats how it goes
Everybody knows

Everybody talking to their pockets
Everybody wants a box of chocolates
And a long stem rose
Everybody knows

Powered by Qumana

Here’s an exchange between me and a friend.  I like these ideas .. what do you think ?

.

Me to Bruce by email

Re: your Tweet …

"For $700B you could wipe out most mortgage and consumer debt. Solon’s wisdom? How come THAT’s "socialism" & big boy bailouts isn’t?

Quite surprised more people are not asking this question … pay it all off for everybody would be one heck of a stimulus for the economy. The problem of course, is that "the ecopnomy" is not for the average working stiff, they are just the raw material for continuing the ongoing growth of wealth of the relatively few "connected".

The average guy and gal MAY now be learning how the game works.

My friend Bruce to me by return email

It would be nice if they did but, alas, highly unlikely.

I have often thought Canada should do exactly that. Now that our finances are in better shape (and we don’t need to sell government bonds just to close deficits) we should:

(a) forgive all consumer debt (I would not do corporate as so much of our corporate sector is owned by outsiders anyway). Solon’s cancelling of all debts in Athens MADE Athens the pre-eminent Greek city-state for two centuries: it also wiped out the entrenched interests in ONE blow.

(b) back the dollar 100% with gold at $1,000/oz or more. (I’d knock a zero off at the same time, i.e. one "new" dollar is 1/100 oz. - thrift is taught by low income numbers and low price points, plus all the junk at China, Inc. (WalMart, etc.) would now be priced in pennies, i.e. indicative of its future worth.) My back of the envelope guess is that with the BoC reserves we’d need $2,000/oz. but an influx of metal as being a gold-standard country might allow a lower number.

(c) borrow nothing as a government. Live within your means. In other words, make choices.

(d) companies can accept US bucks, euro, etc. if they want. For government, you pay in specie (metal).

(e) then start restructuring our tax system to make it clear what’s going for what. You want a carbon tax - fine. Gasoline excise tax, deficit fighting tax, GST, PST, etc. come OFF - the product has a single kind of tax. (Note I don’t say lower taxes [I might like that, but it's not the point] but make the relationship between policy and tax clear to even Joe and Jane Doofus.)

Won’t happen, any of it, of course, just as the $40B we spent on Broadband for rural and northern development infrastructure could have been tendered to a supplier to deliver broadband via satellite to the whole country, free of charge.

Cheers.
Bruce

Powered by Qumana

Via the Times Online UK

.

New era dawns at home of the internet

A network of supercomputers called the Grid will allow information to be downloaded quicker than ever. Tasks that took hours will now take seconds
Murad Ahmed

The dawn of a new internet age has begun. A network of supercomputers, known as the Grid, is to revolutionise the speed at which information is downloaded to personal computers.

The power of the Grid is such that downloading films should take only seconds, not hours, and processing music albums just a single second. Video-phone calls should also cost no more than a local call. More importantly, it should help to narrow the search for cures for diseases.

The Grid, a network of 100,000 computers, is to be connected to the world’s largest machine, the Large Hadron Collider (LHC). It is designed for projects, such as large research and engineering jobs, which need to crunch huge quantities of data, but scientists believe it will eventually be used on home computers.

The Grid allows scientists at CERN, the European Organisation for Nuclear Research, to get access to the unemployed processing power of thousands of computers in 33 countries to deal with the data created by the LHC.

Scientists at CERN, where the world wide web was invented, created the €500 million Grid because they realised that a single computer would not be able to cope with the amount of data the LHC is expected to produce each year – 15 petabytes, or 15 million gigabytes, which would fill 20 million CDs.

They said that it was an extra facility laid on top of the internet, which originally linked computers around the world in the Seventies.

Dr Bob Jones, a CERN scientist, said: “The [world wide] web allows you to access information on other computers. What the Grid allows you to do is not only access the information, but make use of their computing resources and power.”

He likened it to the National Grid. Users would be able to tap into massive amounts of processing power, but the source of the power would change, depending on availability.

Processing tasks will be distributed between 11 gateway computer centres in ten countries, including Britain, which will share them out between more than 140 sites.

Powered by Qumana

Hardly …

And I agree with John Gray that the return home of the Chinese astronauts from their first-ever spacewalk is a serendipitously-interesting bit of timing.

Via The Guardian (UK).  It’s a very lucid piece .. read the whole thing.

.

A shattering moment in America’s fall from power

The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over

John Gray
The Observer, Sunday September 28 2008

Our gaze might be on the markets melting down, but the upheaval we are experiencing is more than a financial crisis, however large. Here is a historic geopolitical shift, in which the balance of power in the world is being altered irrevocably. The era of American global leadership, reaching back to the Second World War, is over.

You can see it in the way America’s dominion has slipped away in its own backyard, with Venezuelan President Hugo Chávez taunting and ridiculing the superpower with impunity. Yet the setback of America’s standing at the global level is even more striking. With the nationalisation of crucial parts of the financial system, the American free-market creed has self-destructed while countries that retained overall control of markets have been vindicated. In a change as far-reaching in its implications as the fall of the Soviet Union, an entire model of government and the economy has collapsed.

Ever since the end of the Cold War, successive American administrations have lectured other countries on the necessity of sound finance. Indonesia, Thailand, Argentina and several African states endured severe cuts in spending and deep recessions as the price of aid from the International Monetary Fund, which enforced the American orthodoxy. China in particular was hectored relentlessly on the weakness of its banking system. But China’s success has been based on its consistent contempt for Western advice and it is not Chinese banks that are currently going bust. How symbolic yesterday that Chinese astronauts take a spacewalk while the US Treasury Secretary is on his knees.

Despite incessantly urging other countries to adopt its way of doing business, America has always had one economic policy for itself and another for the rest of the world.

[ Snip ... ]

The irony of the post-Cold War period is that the fall of communism was followed by the rise of another utopian ideology. In American and Britain, and to a lesser extent other Western countries, a type of market fundamentalism became the guiding philosophy. The collapse of American power that is underway is the predictable upshot. Like the Soviet collapse, it will have large geopolitical repercussions. An enfeebled economy cannot support America’s over-extended military commitments for much longer. Retrenchment is inevitable and it is unlikely to be gradual or well planned.

Powered by Qumana