NY Times Talks About the Swiss Health Care System

Typically when I write about health care, the Swiss system is my favorite one to contrast against the US system as well as the UK and France.

The Swiss system is unique in that insurers are private yet the government makes sure there is universal coverage. The government gives you cash to buy insurance from about 85 different private companies. These companies fight to innovate and keep costs down but at the same time the government heavily regulates the prices for medical devices, lab tests and other elements including writing "blue letters" to doctors if they prescribe too many expensive medications or procedures. While regulated, it's far more "free market" than the US system which has 48% of all spending provided by the government. I would also argue that since government controls at least half of US health spending, we really don't have a free market now and its more heavily regulated than the Swiss model just in a different manner.

The net result, the US spends 16-18% of GDP on health care while the Swiss are only at 10%. It is by no means a perfect system but it's far better then the public/private mix we have in the US which has costs so out of control that no true conservative could defend it. Conservatism is about living within your means, not protecting people that fund your next election.

If the US could bring its health care down to 10% of GDP it would mean more income to go to things like wages and investment--things our country could use right now for a more competitive future.

More here.

Map of Google Acquisitions

This is vie the AWL. It's a map of all of Google's past acquisitions. No doubt there are a few folks who'd like a map of future acquisitions even more.

Ken Lewis Stepping down at end of year--this guy is a fighter for lasting so long. May be a sign of new charges to be filed against BofA.

The new charges part is pure speculation on my part. It's based on the idea that the only way you pry Lewis loose is if he expected more charges relating to the merger with Merrill Lynch.

Just a guess!

Spread Thin

Posting might be a bit on the low side for a while. Lots going on though!

Getting Pretty Heated at IMF as US aks UK and France to Give up Board Seats

VIA FT:

European differences with the Obama administration threaten to overshadow Friday’s G20 summit in Pittsburgh, with Britain and France resisting US plans to overhaul the International Monetary Fund.

UK and French officials were exasperated on Thursday by US proposals that could threaten both countries’ seats on the IMF board of directors, the Financial Times has learnt. Under the US plans, the IMF board would be cut from 24 seats to 20 with fewer European representatives.

The UK and France publicly support the reweighting of the IMF’s shareholding structure to give a greater voice to the larger developing countries – including China and India – but not at the expense of their permanent board seats.

The US believes it has already made a concession by keeping its IMF shareholding at 17 per cent, well below its share of global GDP. Since IMF board decisions require a super-majority of 85 per cent the US retains effective veto powers.

Good Interview With Julian Robertson on the Macro State of the Country

"The history has been that those that borrow in the short term, really get into trouble". This is referring to the US govt issuing short term debt rather than long debt. Robertson implies that even if the government wanted to, it could not not borrow long instead as others have called for it to do. Lots of Treasury auctions hitting each week with billion of shorter term durations. on any large spike in rates or big further drop in the dollar it will end borrowing pretty quickly.

He's not exactly sanguine about US long term treasuries. I myself have been on the other side for many moons. It could take a long time to be proven right on this one although there is not a whole lot of downside with rates so low now.

What Should Entreprenuers Do When Their VCs Close Shop

Business Week discusses the trend here. I continue to believe think a big opportunity is present for "vulture VCs" to go into deals do recaps, cut costs, recruit a team and work for an exit. More here:

Hubert Engelbrechten, CEO of Fremont (Calif.) semiconductor manufacturer GTronix, has helped raise $40 million in venture capital for his company, including a $10 million round led by Jafco Ventures in Palo Alto, Calif. Jafco partner Aaron Cheatham was instrumental in persuading his firm to invest in GTronix and became one of the company's board members. But in the fall of 2008, Cheatham dropped a bombshell: Jafco had become disenchanted with the semiconductor industry, and Cheatham would be leaving the firm to become a consultant.

For entrepreneurs, unexpected exits such as Cheatham's raise unnerving questions about the possibility of a replacement board member, access to the VC firm's network, and the availability of follow-on financing. Such departures are becoming more common as venture firms have trouble raising money or stop investing in certain industries.

"Quite a few of my clients have been told that a firm is no longer investing in their sector, so the partners who focus on it are leaving," says Josh Nathanson, a partner with Cleveland recruiter ON Search Partners. And with many portfolio companies struggling, venture firms are quicker to cut loose a partner who brings in problematic deals.

Top 10 Trends in Social Games--Plus What's Next

From GDC in Austin. Via Inside Social Games:

1. New Horizons in Virtual Goods

Started out monetizing with selling currency which you could earn slow or buy fast. Over the year, ways of monetizing have become more sophisticated. Limited edition items are among the most successful now, limited by time or quantity or both. Work best when the goods are closely linked to the game, and meet asopirational fantasies. In games with avatars (which is increasingly common) clothing is huge.

In Vampires you are given a choise of three closed trunks, Monty Haul style. Are also shown the other two trunks after your choice, and then you get to play once per day but can play more if you pay.

Usable buffs are big. Mafia Wars offers a daily lotto ticket but you can buy more. End of week drawing… In MObsters you get a card every day, can buy cards, and try to get a poker hand by the end of the week.

In Sorority Life invited users to design clothing for the avatars. Took the best entries and madethem forsale for real money andthey were some of the best sellers ever in the game.

2. Gifting Invites

The idea of having players send gifts to one another using FB’s channel. Key driver in Lil Green Patch. Not much there: send gifts, plant gifts, visit garden to rake leaves or chase squirrels in another users’ garden.

This mechanic invite flow is in Farmtown then Farmville and is now common. Zynga rolled it across all theirs, Playdom did too. Standard design trope now.

Why do this? People like sending gifts to friends, feels generous, people like getting gifts. Good for reengagement. One sad thing is that gifting invites are very much carbon copies right now, all the buttons say “proceed to send”:)

3. Making Missions More Interesting

Missions earned cash and loot, but the experience was not very interesting… deterministic. You pressed the button and knew what was going to happen, no gameplay involved. No tthat compelling even though it was the backbone of the experience.

One way is with the introduction of “mission mastery,”first in the game Street Racing. This has been a case where each game has changed and evolved the mechanic. In Street Racing,missions unlocked new missions. In the next game,Mafia Wars, you could move on without mastery,but the twist was you could master tiers with prizes. In MObsters 2, simpler than Mafia Wars, added fourth level of mastery, brozne,silver, gold, platinum mastery,and prizes per missions.

In Hero World, the mission list is dynamic — it changes moment to moment,and missin failure (on random chance but weighted by your skills). In Yakuza Lords, they have added mission requirements such as battles won,etc.

Last big development is adding minigames, as in Sorority Life.Hidden object game, tower defense game, word game, and payout depends on performance.

4. Customization and Personalization

Didn’t use to be that you could have differentiated player profiles. You had one of three or four classes selected before starting. This has really started to explode.

Avatar Creation, such as Vampire Wars, Sorority Life. When the avatar surfaces as key points of impact, brings a lot more resonance. Does a lot of good things for item iventory too — often the only difference is in color.In the game mechanic items, this would be very bad and annoying (few real choices), but when tied to avatars and customization, it is very attractive. Sorority Life has a “pock hottest avatar”with three random avs, been a real positive for the game.

Mobsters 2 lets you pick from 20classes, varied bonuses, missions, bonuses, etc, to encourage playersto try out identities.

Metatrend: increasing socialness of social rpgs! They only took advantage of playerson a team,but once you invited somone in, limite dinteraction.But now it is more social.

5. Collections and Wish Lists

Mafia wars; as you do missions,you get random loot drops that are probabilistic across all missions.Each are part of a collection, within the theme of the game and aspirational — playig cards, paintings, racehorses, cigars.Complete a collection and get a permanent stat boost. What makes it social is that you publish the ones you are missing as a wishlist, and friends can see it and send you waht you are missing. Now your friends are not just present but they engage with you. It is also viral bc every time you get one, post the wishlist, get an item, it is an excuse for the gameto send out a feed item.

6. Metatrend: lots more ways to work together on common goals

Collections, great, wishlists make it really social.

In Mobsters 2 you have missions that need loot dropped by other missions. But if you don’t have it, you can request it from your friends as a gift. Same for energy,post asking for Mobsters energy drinks so that you can finish a mission.

In Zynga’s Vampire Wars, if you want to throw in money you can spin the wheel of blood magic and get a random ability, and it gives it to all members of your team,so there is strong social incentive to do this.

In Mobsters 2, if you try and fight andlose bc they aretoo powerful, you can post a feed item asking your friends to come beat up on the guy you just lost to.

In Mafia Wars, “declare a war.”You declare war on another player, anda subset of your mob are asked to fight 1:1 duels with their top mob.

Right on the edge of social RPGs, Mousehunt. You can build hunting parties and participate in tournaments, try to be the team that collects the most mice in a time limit.

7. New Themes

Lots of experimentation. Quick survey here in popularity order:

• Horror/Vampires: 4.3M MAUs on MySpace, 3.4 on FB.
• Auto racing
• Fashion/dress up has been very successful one.
• Fantasy/SF. Historically in gaming, fantasy has been huge, but fantasy has been middling successful on SNS, and SF has been hugely not (120kMAUs). This demonstrates we are looking at a very different demographic,mass market, for the first time.
• Pirates
• Music/celebrity.

8. Using Friends’ Data

You needed X friends to run a mission, but it didn’t matter how much the friends were active.

In Mafia Wars, riends take specific roles and uses their usage history to gauge their effectiveness. In Playdom’s original Mobsters game, how many friends were active in the last day made a difference. In Mousehunt, if you are in the same area as your friend,and huntmice,they “come with you”. At the start of this trend,we will see more of this happen.

9. Narrative

A violation of the metatrend,since there is nothing inherently social about narrative. Why are we seeing it? Same reason we see it in other game genres, it is strong and compelling. For a percentage of the audience, it is a strong reengagement feature, how the story unfolds. It is also easy and cheap to add to a game.

Bloodlines has a comic narrative for the intro screen. Hammerfall RPG has a narrative structure with overhead map and storyline. Missions are stronglynarrated. Yakuza Lords also uses comics to narrate, as brief screens, outloining your character, revenge and redemption as motive. In MObsters 2, very robust storyline, told through the missions, one-timemissions the player does, and the missions have branching narrative through choice of missions. Sometimes there are gameplay differences, but sometimes it is purely narrative: moral choices, etc.

10. iPhone and social RPGs

Zynga made a gorgeous version of Mafia Wars, nicer than the FB version! Interesting pricing strategy driven by Apple’s rules — Zynga’s iTunes page has a whole bunch of apps for the same game, at different price points with different points. Playdom links to existing SNS accounts, so you don’thave separate mobs, you have one mob run remotely on your iPhone.

Interesting challenges on rendering complex HTML on iPhone.

5 of top 40 free apps are social RPGs, but none of the top 150 paid apps are. Apple does not allow micropaymentsin free apps, so this is concerning.

What is next?

One trend is a lot more temporary buffs, virtual items that get used up.

Gift invites: recent arrival,we will see a lot of mturation on it. Giving away standard items today, we are not seeing innovation in terms of stuff that can ONLY be gifts.

More dynamic gifting invite splash pages — different selections of gifts based on their actions, or their level, etc.

Missions, look for the mechanics we discussed to spread widely.

I hope we’ll see a lot more interesting interrelationships between missions.

And minigames will become way more prevalent. The ones so far have driven engagement way up.

Customization will keepgrowing,the more individuated a player is, the more social. We will see this go much deeper.

As a concept collections are solid, but the user interface is complex.

Collaboration will be a fruitful and interesting areato explore. Can’t forecast this well,but I think there will be a lot more interesting ways to work together for common goals, timebound and not.

MOre experimentation will themes is coming.

Gameplay data stuff is just scratching the surface. Thousands of clicks are being generated, very hooky and addictive, so there is a lot of data that is not beingtransformed back out to the players in ways that deepend their interaction with their friends. As longas the data can be packaged in digestible fashion,this can be a major trend in the next 12 months. Have seen way more advances on the Flash game side here.

The narrative trend is that it will become another item on the checklist, something the players expect and demand.

As far as iPhone… not speaking on behalf of Playdom here, personaltake on the market.Not sure it is a place to put a huge bet for social rpgs. They work well on web: fast HTML, large canvases. They don’t fit very well with the iPhone, which does rich media, varied control, small screens. The viralchannels on iPhone are higher friction. Not sure we will see this as a huge trend. If they do succeed, willbe as adjunct and extension of the web game, not as standalone.

The Most Common Passwords

Look Familiar?

Via JimmyR:

Most Common Passwords

1. 123456, 123, 123123, 01234, 2468, 987654, etc
2. 123abc, abc123, 246abc
3. First Name
4. Favorite Band
5. Favorite Song
6. first letter of given name then surname
7. qwerty, asdf, and other keyboard rolls
8. Favorite cartoon or movie character
9. Favorite sport, or sports star
10. Country of origin
11. City of origin
12. All numbers
13. Some word in the dictionary
14. Combining 2 dictionary words
15. any of the above spelled backwards
16. aaa, eee, llll, 999999, and other repeat combinations

The New World Ahead in Synthetic Biology

As the US looks for new industries, synthetic biology hold amazing promise including using DNA samples to bring back the woolly mammoth. The downside-“We’re just not sure that it would be all that much fun for the mammoth.” More via the New Yorker:

Scientific achievement has promised so much, and none has come with greater risks or clearer possibilities for deliberate abuse. The benefits of new technologies—from genetically engineered food to the wonders of pharmaceuticals—often have been oversold. If the tools of synthetic biology succeed, though, they could turn specialized molecules into tiny, self-contained factories, creating cheap drugs, clean fuels, and new organisms to siphon carbon dioxide from the atmosphere.

In 2000, Keasling was looking for a chemical compound that could demonstrate the utility of these biological tools. He settled on a diverse class of organic molecules known as isoprenoids, which are responsible for the scents, flavors, and even colors in many plants: eucalyptus, ginger, and cinnamon, for example, as well as the yellow in sunflowers and the red in tomatoes. “One day, a graduate student stopped by and said, ‘Look at this paper that just came out on amorphadiene synthase,’ ” Keasling told me as we sat in his office in Emeryville, across the Bay Bridge from San Francisco. He had recently been named C.E.O. of the Department of Energy’s new Joint BioEnergy Institute, a partnership of three national laboratories and three research universities, led by the Lawrence Berkeley National Laboratory. The consortium’s principal goal is to design and manufacture artificial fuels that emit little or no greenhouse gases—one of President Obama’s most frequently cited priorities.

Using such techniques, researchers have now resurrected the DNA of the Tasmanian tiger, the world’s largest carnivorous marsupial, which has been extinct for more than seventy years. In 2008, scientists from the University of Melbourne and the University of Texas M. D. Anderson Cancer Center, in Houston, extracted DNA from tissue that had been preserved in the Museum Victoria, in Melbourne. They took a fragment of DNA that controlled the production of a collagen gene from the tiger and inserted it into a mouse embryo. The DNA switched on just the right gene, and the embryo began to churn out collagen. That marked the first time that any material from an extinct creature other than a virus has functioned inside a living organism.

It will not be the last. A team from Pennsylvania State University, working with hair samples from two woolly mammoths—one of them sixty thousand years old and the other eighteen thousand—has tentatively figured out how to modify that DNA and place it inside an elephant’s egg. The mammoth could then be brought to term in an elephant mother. “There is little doubt that it would be fun to see a living, breathing woolly mammoth—a shaggy, elephantine creature with long curved tusks who reminds us more of a very large, cuddly stuffed animal than of a T. Rex.,” the Times editorialized soon after the discovery was announced. “We’re just not sure that it would be all that much fun for the mammoth.”

Art Laffer Makes A Point

You can have slack in the economy, unemployment and low growth, and still have inflation. One problem with the Great Depression was that it was so lengthy, a variety of policy choices were implemented so it's difficult to guage what made it better and what made it worse. Once could argue both sides from many of these policy choices as well as argue that sometimes it just takes time and no policy choice evades the eventual wrining out of debt that must occur.

More in WSJ:

Over the past 12 months, the Federal Reserve has increased the monetary base (bank reserves plus currency in circulation) by well over 100%. While currency in circulation has grown slightly, there's been an impressive 17-fold increase in bank reserves. The federal-funds target rate now stands at an all-time low range of zero to 25 basis points, with the 91-day Treasury bill yield equally low. All this has been done to avoid a liquidity crisis and a repeat of the mistakes that led to the Great Depression.

Even with this huge increase in the monetary base, Fed Chairman Ben Bernanke has reiterated his goal not to repeat the mistakes made back in the 1930s by tightening credit too soon, which he says would send the economy back into recession. The strong correlation between soaring unemployment and falling consumer prices in the early 1930s leads Mr. Bernanke to conclude that tight money caused both. To prevent a double dip, super easy monetary policy is the key.

While Fed policy was undoubtedly important, it was not the primary cause of the Great Depression or the economy's relapse in 1937. The Smoot-Hawley tariff of June 1930 was the catalyst that got the whole process going. It was the largest single increase in taxes on trade during peacetime and precipitated massive retaliation by foreign governments on U.S. products. Huge federal and state tax increases in 1932 followed the initial decline in the economy thus doubling down on the impact of Smoot-Hawley. There were additional large tax increases in 1936 and 1937 that were the proximate cause of the economy's relapse in 1937.

Tell Me This HP Envy Gallery Does Not Look Like a MacBook Pro

Pretty nice looking laptop frankly. And as much as it pains me to say it, Windows 7 is really about as good as Mac OS. These are going to be out soon after the Windows 7 launch with the new intel chips. They should be amazing machines.

I'd love to see a 17 inch version of these as well as a similar effort by Dell.

More from Gizmodo.

Craig Ferguson Brings Us Some Weekend Levity

Apple Says Google Fibbed in It's FCC Brief

Quick blurb from Silicon Valley Insider-- Google is making the claim in the FCC case that Apple rejected it's application and Apple is saying this is untrue. I for one believe Google, and think it's a good thing Apple just hired a lawyer with antitrust experience.

Hard not to see some of this as hubris and board negligence. Even with Al Gore on the board, it's only a matter of time before their rope runs out. For now, long Apple, but looking for smoke signals that the rope has run out (press stories, govt rumblings or more board resignations).

Apple (AAPL

) disputes Google's (GOOG) claim that Apple rejected the Google Voice iPhone app.

An Apple rep writes:

“We do not agree with all of the statements made by Google in their FCC letter. Apple has not rejected the Google Voice application

and we continue to discuss it with Google.”

Earlier, Google unredacted parts of its filing to the FCC from last month, claiming that Apple did reject the Google Voice app.

A Google representative declined to comment further. But a Google blog post earlier today said "We continue to work with Apple and others to bring users the best mobile Google experience possible."

Fed Regulation of Banker Pay Draws Some Anst

Hmm…should banks that use taxpayer capital be allowed to take proprietary risk at all? Bankers have been losing money the same old way for the last 500 years, why not just let them go back to the old way.

While all of our investment banks are now called "bank holding companies", pretty much all of them are really investment banks according to old definitions. Let bankers be bankers, and push risk trading into "hedge funds" where it belongs. Sorry, but if you have the ability to borrow from the government, you shouldn't be doing currency bets or long/short hedging or 20x leverage on Apple options. Goldman has record profits? Congratulations, and keep it up but they shouldn't be getting government support.

As for hedge funds, if they don't over leverage they shouldn't be regulated at all. How many hedge funds got bailouts from the government in this crisis?

As for clawbacks, folks in private equity now are subject to clawbacks, why shouldn’t bankers? Moreover, I would argue that existing laws should be used, if at all possible to claw all those bonuses back anyway to reimburse the taxpayer. Particularly for those who syndicated mortgage debt for a living.

Do I strongly dislike this oversight of pay packaged by banks described in this journal article? You bet--but I don't like seeing banks that were too big to being with getting even bigger and sucking up more market share in more disparage businesses.

More via WSJ.

ShopSavvy

My friend Alex Muse is launching an App on Windows Mobile called "ShopSavvy". Alllows you to scan a bar code and get price comparisons at local retailers and the web. This fits with trends I believe in like local search and advertising. I'd love to see vendors be able to send offers back to consumers once a scan is done --"Hi, we see you are browsing at Store X, we can offer it at 10% less if you buy it right now at our store 2 blocks east". I love that stuff.

More on ShopSavvy here. And yes it looks like it's coming to the IPhone too.

Great To See Protests in Iran Continue

It's heartening to see these brave folks keep protesting despite the crack down. They don't appear to be "fading" like the protesters in Tienanmen did.

When you look at the 1979 revolution, many argue that the Shah's government fell precisely because he did not crack down hard enough and allowed dissent. Is this what the current leaders of Iran hope for? By using a firm hand they will prevent events from unfolding just like they did in 1979.

The Iranian revolution set a course of events that I think many did not anticipate at the time. Some kind of end to this view that the path to political progress is best accomplished with suicide bombings and terrorism would be a positive step for the world.

More on the protests here via the W-Post.

Kenny Knight on Anticipating Change

Mckinsey has a video interview with Kenny Knight who is the US's national intelligence officer. The discussion is about how best to anticipate change. I try and do a little bit of this every year with an annual list of predictions and potential surprises here.

At some point I need to do a post grading myself but my posts tend to be about change that impact either technology or economic shifts. I aim to get about 25% right each year.

Kenny I think focuses a bit more on national security issues facing the US. His talk is great and has some suggestions that will hopefully improve my own own ideas and hit rate. Looking at my first set this year -it's passable but not that great (some hits--some okay--but lots of misses)--next year I am going to try to flesh them out a bit more.

Just for disclosure, I have been friends with Kenny's wife Laura Knight for many many lives now (mine not hers) and she is one of my favorite people for a variety of reasons--and she is very proud of her husband. Rightly so.

Twitter Deal Reminds me of 1999

Couple comments on the Twitter deal:

• I am absolutely a believer in social media. Much like the early days of TV, eyeballs and ears are something you can advertise on. This transformation is happening a lot faster than I think people realize.
  
• But a $50 million round at $1 billion a company that not only doens't have revenue, it doesn't even have a revenue model.
• The Twitter model does not have as many barriers as Facebook does. All social media is not created equal. Twitter has lots of funky aspects and not a lot of "stickiness" in its model yet. Facebook in contrast has stickiness all over it.
  

I wonder if any of the lucky angels who were in this deal are using it as a way to get a little liquidity....at $1 billion you should take it. I'd say something like "I'm just an amateur angel you shouldn't read anything into this but I'll transfer half my stake. k?"

Techcrunch takes us back to 1999 with this post:

Fast growing startup Twitter will soon be joining a select group of startups with private venture round valuations of $1 billion, we’ve heard from multiple sources. CEO Evan Williams disclosed the round to employees at a recent all hands meeting.

The company will raise around $50 million, we’ve heard, although the final amount of the raise is apparently not yet locked down.

Twitter raised $35+ million earlier this year in a round led by Benchmark Capital and Institutional Venture Partners. That round valued the company at $250 million.

The company has raised a total of around $55 million to date, and sources tell us they have approximately $30 million left in the bank.

John Stewart On Acorn

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
The Audacity of Hos
www.thedailyshow.com
Daily Show Full Episodes Political Humor Healthcare Protests

Sarkozy Claims "Iran Weapons Program Certain"

Pretty strong lanugage out of Sarkozy. He is bit of a blow hard---would be interesting if this gets confirmed elsewhere. A problem with implications for a possible sudden surge in oil prices. More Via JPost.

After Paris warned that new sanctions against Teheran remained an option despite the likelihood of negotiations with Iran, French President Nicolas Sarkozy maintained that the Islamic republic was still working on a nuclear weapons program.

"It is a certainty to all of our secret services. Iran is working today on a nuclear [weapons] program," Sarkozy told lawmakers from his UMP party on Tuesday, according to Press TV.

"We cannot let Iran acquire nuclear" weapons because it would also be a threat to Israel, he added.

French Foreign Ministry spokesman Bernard Valero had warned that Iran must make "concrete gestures" at the long-awaited discussions. He said the sanctions option remained on the table in case Teheran makes "an error of choice."

The Definition of Systemic Risk

"The ability of you- to make me- pay for your mistakes".

One of the best definitions I have heard.

I get that people like Vampire movies

-but if Vamps really did exist y would they be they so attracted to American High School & bad writing.

Once Again, @Twitter Founders

You should take a deal. Selling out is okay if perfection execution still won't get you a bigger business. My favorite space is real time location based advertising/offers. Perhaps Twitter has an advantage there, but if they get anything close to a billion for that business, they should take it.

The Onion: Al Qaeda Fed Up With Ground Zero Construction Delays

Al Qaeda Also Fed Up With Ground Zero Construction Delays

Malcolm Gladwell on What Makes Some Successful and Others Not

It has a bit of a slow start, but the points overall are excellent and I think largely true.

Live Blog Of OBama Speech on Health Care

• Obama starts off by claiming success in "bringing economy back from brink". True but it was his first budget and the stimulus plan that pushed the S&P down to 666 from 950.
  
• First hit is on pre-existing conditions. I think both sides agree this can go as long as you expand risk profile by mandating coverage for all.
• Gives some stories about woman denied coverage because she forgot to report case of acne.
• Cost......
• This is the biggest issue in my mind. Whether you are right or left or middle of the road, we can't spend twice as much as Switzerland and 3 times as much as others. It's a huge burden and we either have to fix this, or we have to sacrifice our standard of living for the next 20 years to pay for these increased costs. 17% of GDP now (maybe 18% with recent decline)--ramping up to 25% pretty quick if something isn't done.
• Talks about "single payer" --this is the left. Talks about right side "non employer bases-let people buy their own". Instead he disregards both approaches and says lets build on our existing ridiculously broken system (he forgot the ridiculously broken part in his speech).
• Let's see, we can take the Swiss system with 5K to private insurers for each citizen and cut our expenses in half. Or we could take the 100% public French system. Either one is better than what we have from a cost perspective.
  
• Talking about short term political points being scored. "I ran for President but I didn't think there would be all this politics".
• Pres Obama--describing his plan in 3 points (the goals, not the how achieved part).
• "nothing in this plan will require you to change the plan you have". 1. How do we get big costs cuts without requiring big changes, even from people that really like their plan 2. Talking about dropped coverage.
• Just as an aside. To all folks who argue for health care stocks--foolish. Even if this bill dies, there will be another.
• Creating new health exchange. Okay.
• Will take effect in 4 years "to give us time to get it right"
• Talking now about requiring mandate. "much as states require auto insurance, we will require health insurance". Sorta, except having a car is an option, so a mandate here makes sense. While a car is optional, a body is not. That said, I support a mandate for preventive care and emergency room care because right now we are paying for it anyway.
  
• "While there are some details to this that need to be worked out"--Chamber erupts in laughter. I did too. President did not.
• "Says Program would not cover illegal immigrants"--then someone yells something rude (never seen that in an address). I am not sure, but it might have been a Republican. Even when I don't agree with everything President says, he is due respect especially when speaking to Legislative branch. In our system he is head of state, this is not England and the House of Commons.
  
• "Consumers do better when there is choice and competition". True but not in hybrid systems like Fannie/ Freddie and Banking where bubbles are created while the minority gets rich and soaks the country with debt and fraud.
• "Making a non for profit public option available for people in the insurance exchange".
• "By avoiding the overhead that gets eaten up by profits". It doesn't work that way exactly Mr. President.
• "It would be self sustaining"-- Like Fannie Mae? I think it's okay to be skeptical on this given what has happened. Hybrid markets with mixes of govt and private sector scare.
  
• PICK ONE --I honestly don't care which. Pick Switzerland or France.
• "If American's can't find affordable coverage, we will provide you with a choice". Good speech writing there.
• "won't sign anything that adds one dime to the deficit-automatic spending cuts come in if savings don't materialize". Amazing how quickly we have run out of money. The budget estimates are so volatile.
• President accusing opponents of "outright lies". Reminds me of joke-how can you tell politician is lying...lips are moving.
  
• President spending lots of time talking about how he is going to protect medicare. Okay so government medical spending is ONE HALF of all health care spending. How do we have big cuts in spending, yet not touch medicare. How do you put in triggers like "if cost cuts don't materialize, then they will happen automatically". This is the IQ test portion of the blog.
• Love taxing plans over 8K. That's a decent policy. Better policy? Make all health care plans equally taxable. Either tax them all, or tax none. Govt needs to stop tilting playing field.
  
• "Defensive medicine" May be contributing to costs. A Democrat taking on trial reform. Good policy here.
• "Plan costs 900 billion over 10 years".
  
• Republicans look ticked off. The speech is a net positive for the President. President will bring very few in GOP over w/ this speech but independents may be persuaded.
  
• Chance of this getting done (and fulfilling one of my Jan 1 predictions). 80% they get a bill done in some form.
  

Iran's Nuclear Offer Dissapoints.

Not surprising, but disappointing still. This is a huge test for the President, especially with US troops in Iraq. VIA WSJ.

My guess? New round of sanctions including fuel, and more serious steps after Iraqi elections at tend of year.

Venezuelan Oil Minister Missing From Opec Meeting

Russia has been boosting oil production while Opec has been cutting back production with compliance at about 70%. Chavez has been trying to pull most of Latin America into Opec but Russia has stayed out of it.

It wasn't too long ago we had stories of Russian cooperation but Russia has some severe deficit issues and has to produce as much oil as it can. Russia wins the award here for most IQ points by "cooperating" with OPEC but pumping up the volume on the spigot to the tune of about $20 billion in lost revenue for Opec. Not a small sum.

I wish I could Consolidate All My "Frequent Buyer Rewards" Cards on to One Device

Hard to get Starbucks, Safeway etc to sign up for this but why not consolidate this all on to one Application. Must be some way to do this.

Apple Musings- Disappointing Dissapointment

I havn't had time to have super deep thoughts yet on the conference today but here are a couple of reactions:

• First of all the Apple conference today as expected was a bit worse than I expected. I had tweeted about not expecting any big product releases but no front facing camera on the IPod Touch is pretty weak. Also, Steve Jobs looked at as unhealthy as I have ever seen. What makes me even grumpier? I sold call spread at the start of the day (175/180) on Apple expecting the performance would be lackluster. It really has not done well despite the nice pull back especially given the stock is excessively popular. The 180 side pulled back a little bit more than I thought it would. I plan to close the 175 on Friday and I may or may not roll forward the long 180 call depending on how cheaply its trading as a way to add exposure.
  
• There wasn't even any new screens. How does a Zune have an OLED screen but an IPod Touch doesn't. Samsung has OLED and many others are adding it. Could this be a separation of the IPod touch line (which is really a computer). I.e. We get a new event that launches the IPod Touch line starting at 3.5 inches, expanding to the tablet up to 10 inches and higher? That would make some sense. Perhaps this comes in December - January. There is no way they get us OLED at 10 inches but 3.5 to 7 is quite possible. OLED is just far too expensive still despite being incredibly thin and power efficient.
• No forward facing IPod Touch Video Camera for video conferencing? Come on--there is just no excuse for this other than a nearer term upgrade right around the corner. Some have talked about some technical problems with the camera but I don't think that's the full story.
  
• I would kill for a foldable OLED that gives me a form factor at 4 inches expandable to 10 inches. Imagine an IPhone that turns into a kindle size book reader with a much thinner screen that folds out.
• Apple finally introduced FM radio tuners -- just in time for the medium to die.
  
• There HAS TO BE another product some time in December. This space is too competitive for Apple to sit back for too long. Right now its milking margins and share gains but at some point the market is going to need something more.

The net ? Waiting a bit for things to settle down with the stock and using spreads to expand long on a pullback. Posititong for new product introductions in Macbook Pro Line, Tablet in Dec/Jan.
Just for disclosure: Long Apple. Long Calendar spread. Short Septmber -Vertical Spread.

Fred Wilson Talks About the Benefits of Failure

I love this post by Fred Wilson. I had a similar experience in venture capital in that I avoided losses for the most part and my boss would make fun of me saying I was "depressing" because I passed on too many deals and saw fault too easily (he was right although it ended up working out when the tech wreck hit). To me nothing was worst than working on a bad deal --as it involved lots of worrying and a lot more work than a deal that was going well.

I wouldn't pitch deal unless I saw a pretty quick path to revenue followed by some battle plan for an exit from an interesting technology. But when that tech bubble hit, even deals with solid revenue behind them take hits when follow-on's become scarce- it becomes impossible to avoid taking some hits and learning some lesson. I think about those 2 big failures quite a bit more than wins. I think guys now that have loads of bad portfolios are vulnerable to being "overwhelmed" and simply giving up. Fred puts it in perspective well here.

Full post here.

you can’t let your failures define you – you have to let them teach you. You have to let them show you what to do differently next time

That's so true. It took me a while to learn that lesson.

When I first started out in the venture capital business, I was afraid to make a mistake. Once I started investing and taking board seats myself, I worked super hard to avoid losing money. I went for almost a decade without making a losing investment.

But then in the aftermath of the internet bubble, the wheels came off of the bus. We wrote off close to twenty investments in the span of two years from late 2000 to late 2002. It was devastating on many levels.

But when I look back on my career, it is not the successes that I think back on most. It is the failures, and particularly those two years when everything that could go wrong did go wrong.

When Brad and I started Union Square Ventures in 2003, we laid out a roadmap for what kind of firm we wanted to create, what kind of investments we'd make, and how we thought the Internet was going to evolve. That work was largely a result of the lessons we both had learned in the aftermath of the bubble.

I think embracing failure is one of the things that makes this country such a great place to do business in. In many parts of the world, if you fail once, you are done. People won't touch you with a ten foot pole. But here in the US, it's almost a badge of honor. And our President explains why.

When we met with entrepreneurs, I'm always interested in their failures. And most people have them, you just have to dig a bit to find them. If someone has failed and taken the time to learn from it, I think that's a big positive. It

makes us even more excited to back them the next time.

Some Thoughts This Weekend on Language- Has Evolution Changed the Speed of Thought

And is it advancing at all today?

Looking for a linguistics study on the speed of language Looking for research on comparative speed of human languages—Spanish vs. Chinese vs. Zulu vs. English.

How would one measure this? To communicate the top 15 most partially complex but common ideas—how long does each language take to express the same idea. i.e. I would like a glass of water. Where can I find a good source of food. Etc.

Reasons why I am wondering…

1. Has the speed of thought changed? i.e. when language was originally developed did speech fall to the “least common denominator”. i.e. presumable a language would only be adapted if 99% of the population had no problem expressing themselves in the language. Has that “least most common denominator” changed?
2. Has the industrial revolution changed the “speed of language”? Is it changing now?
3. How has the brain changed in the last 100 years or 1000 years with respect to ability to express thoughts. Is it speeding up? Slowing down? It would seem like analyzing the way the structure of language has change would be a good way to measure. i.e. Take early English compared to modern. Aramic to other modern languages.
   

Great Inteview With Cheng Siwei on Gold, the Dollar and Monetary Policy

Great interview in the telegraph with some insightful observations. Interestingly, while this is former Chinese monetary official he is now leading their energy drive which is also an awfully coherent policy. Implementing coherent economic policies is a tactic we might consider at some point once we've exhausted all the alternatives and/or run out of money.

This interview has two "good parts". First, the Chinese talk about how difficult it is for them to diversify into gold because "when we buy it, the price goes up". Second, the big problem in US monetary policy is that it targeted retail inflation and not asset bubbles which "absorbed excess liquidity". Big question is how do we change monetary policy going forward to address asset bubbles? Just for disclosure--Long Gold, Gold Miners (Agnico-Eagle, Yamana), Long Term Calls on Gold. Note I am long gold as a hedge and while a large breakout may take time, downside isn't that high given fed has highly stimulative monetary policy. i.e. it's not going to $650 unless you have some sort of economic collapse scenario. A scenario that was a more viable possibility in the Lehman-March bottom.

Via Telegraph:

"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.

The comments suggest that China has become the driving force in the gold market and can be counted on to
buy whenever there is a price dip, putting a floor under any correction.

Mr Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China. "If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise.

"Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down."

Mr Cheng said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets.

"This is where Greenspan went wrong from 2000 to 2004," he said. "He thought everything was alright because inflation was low, but assets absorbed the liquidity."

Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery.

China's task is to switch from export dependency to internal consumption, but that requires a "change in the ideology of the Chinese people" to discourage excess saving. "This is very difficult".

Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China.

"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis."

Yet the consequences are not symmetric.

"He who goes borrowing, goes sorrowing," said Mr Cheng.

It was a quote from US founding father Benjamin Franklin.

Wall Street Now Bundling Life Insurance Policies for Older People Into Bonds

They are rolling all the policies up into securitized debt. You make money on the bonds if folks die a little sooner than expected, but if folks hang on, it can be problematic and you can lose money on the bonds.

If I had any elderly grandparents living in Palm Beach, I'd make sure they have a good security system and their car breaks are checked frequently.

Just when you thought these guys were out of ideas. Via NY Times:

After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.

The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.

The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.

Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated.

The idea is still in the planning stages. But already “our phones have been ringing off the hook with inquiries,” says Kathleen Tillwitz, a senior vice president at DBRS, which gives risk ratings to investments and is reviewing nine proposals for life-insurance securitizations from private investors and financial firms, including Credit Suisse.

“We’re hoping to get a herd stampeding after the first offering,” said one investment banker not authorized to speak to the news media.

Saudi Prince Al-Faisl Mauls Obama on "Oil Independence"

Somehow this entire piece reads like a letter from a drug dealer to his crack junky--- "I provide a service to you at great risk. I provide a great product that you don't need to get off of because its so great. We are "partners".

Right now this partnerships consists of America paying ridiculous amounts to fill gas tanks, so folks in the middle east don't have to do any work and petty dictators can support faltering regimes that opiate their people by covertly supporting efforts to blow up Americans (sometimes not even covertly).

Prince Al-Faisal argues in this rather blunt piece that Obama's promise of oil independence is fantasy. Maybe so, it's hard not be a bit cynical given the lack of progress on almost every major serious issue we have faced in the last decade.

The Prince is right however, it seems like politicians would rather campaign on this issue rather than do anything about it. Maybe this is some "bluntness" that might help awaken people to the borrowing and huge capital outflows that now dwarf our imports during the last Oil Embargo. We need higher mileage standards, taxes on oil imports and revenue from those taxes diverted to electric cars. To power those cars, we need nuclear and alternative energy and a power grid that isn't stopped by local politicians on the dole. Federal regulation of alternative energy "rights of way" is something Harry Reid is pushing for and needs to push for harder. Anyone who reads Blindreason freuently knows it takes a lot for me to say something positive about any party leader, let alone Senator Reid. I think at one point I jokingly suggested we sell Nevada to pay for the TARP which would kill several birds with one stone (Reid is the Senator from Nevada).

A long term solution alsoalso means high energy taxes to create incentives for domestic production as well (sorry but we have to drill too). The good news is the taxes on this can finance eventual replacement by home grown technologies.

Pretty simple stuff and a huge investment in America's competitiveness. I am convinced this one step would put us back into the competitiveness ring with China and Brazil.

Can this happen over night? This is a 10 year project just to make a bit of headway. However, it's the one spending program that will make the American economy less susceptible to foreign dictators like Venezuela and Putin that want to drive prices higher so the can stay in power. This isn't just an economic freedom issues, its a huge national security issue.

The question is, can the junky tell his drug dealer "no"?

VIA VP:

"Energy independence" has become a byword on the American political scene, and invoking it is now as essential as baby-kissing. All the recent U.S. presidential candidates employed it, and to this day, the White House Web site lists as a guiding principle the need to "curb our dependence on fossil fuels and make America energy independent." Expect a whole new round of such rhetoric when the global economic recovery begins, and with it, higher oil prices return.

But this "energy independence" motto is political posturing at its worst -- a concept that is unrealistic, misguided, and ultimately harmful to energy-producing and -consuming countries alike. And it is often deployed as little more than code for arguing that the United States has a dangerous reliance on my country of Saudi Arabia, which gets blamed for everything from global terrorism to high gasoline prices.

Saudi Arabia holds about 25 percent of the world's proven oil reserves, is by far the largest exporter of oil, and maintains the largest spare production capacity in the world. U.S. oil production started to decline in 1970, while U.S. energy needs have skyrocketed since that time, and the United States is now the world's largest oil consumer. There is no technology on the horizon that can completely replace oil as the fuel for the United States' massive manufacturing, transportation, and military needs; any future, no matter how wishful, will include a mix of renewable and nonrenewable fuels.

Considering this, efforts spent proselytizing about energy independence should instead focus on acknowledging energy interdependence. Like it or not, the fates of the United States and Saudi Arabia are connected and will remain so for decades to come. This realization need not strike fear into the hearts and pocketbooks of Americans. Saudi Arabia has a long record of specific actions that prove its strong commitment to providing the world with stable energy supplies. We have consistently pushed for lower prices than any other OPEC members have, and we sharply increased supplies after the Iranian Revolution, during the first Gulf War to replace the loss of Iraqi production, and immediately after the Sept. 11, 2001, terrorist attacks -- all in order to calm jittery global markets.

But Americans don't hear all this from their political leaders. In one of his very first speeches as U.S. president, for instance, Barack Obama declared that "America's dependence on oil is one of the most serious threats that our nation has faced." He said that it "bankrolls dictators, pays for nuclear proliferation, and funds both sides of our struggle against terrorism," and announced what he called "the first steps on our journey toward energy independence."

10 Characteristics of Great Venture Investors

Great List via Onlyonce:

So I've taken 15 minutes here, pretended I'm on the subway, and here is my list of Ten Characteristics of Great Investors, in no particular order:

1. Great investors know how to give strategic advice without being in the operating weeds of a company
2. Great investors get to know whole management teams, not just CEOs -- in fact, great investors become part of the extended management team of their portfolio companies
3. Great investors invite you to do diligence on them by giving you a list of every CEO they've ever worked with and asking you to pick the ones you want to talk to
4. Great investors ask great questions
5. Great investors don't publicly take credit for the success of their investments, even if they were major drivers of that success
6. Great investors show up for meetings on time and don't spend the meeting using their smartphone
7. Great investors treat their portfolio companies' money as if it were their own money when spending it on things like lawyers or travel
8. Great investors look for connections to make between their portfolio companies or relevant people but have a strong relevance filter and don't send junk
9. Great investors never have a ready-made list of the ways they add value to companies -- and they specifically never talk about the help they give in recruiting executives or making sales/bus dev introductions
10. Great investors recognize when they have a conflict around a portfolio company and are clear to represent their separate points of view separately

I'm not sure I'll be invited to present this anywhere, but there it is for discussion.

Great Turnaround Story

I love stories like this. This one is out of Jermey at Lightspeed. Good Stuff:

One of the great stories of Silicon Valley is how Josh Hannah and Jack Herrick bought eHow’s assets at a distressed price after the company went out of business, turned it around with a very low cost model and sold it to Demand Media two years later for a big profit. As Wikipedia notes:

eHow.com was founded in March 1999. The company raised close to $30 million... , hired 200 professional writers, and … employed a 25-person engineering team. By 2001, eHow had created thousands of articles. The professional writing, combined with a TV and radio advertising campaign, briefly made eHow one of the Internet’s top 10 news and information sites. Despite the popularity, eHow was not profitable and was forced to declare bankrupcy when funding ran out.

In 2001, IdeaExchange.com bought eHow out of bankruptcy with the hope of charging eHow’s readers to access how-to instructions. eHow remained unprofitable and in early 2004, IdeaExchange sold eHow to Jack Herrick and Josh Hannah.

Says Josh:

“When I told people what I was doing, they thought I was crazy. Conventional wisdom said content was dead, and there was no way to make money on it. We had a different view. In my experience, the foundation of a great business depends on having a different idea from conventional wisdom and pursuing it in spite of a skeptical market.” says Josh.

Josh and his partner restructured eHow by outsourcing content creation to the community and employing then-new advertising and search engine optimization techniques. In six weeks, they had earned enough from advertising to pay off the cost of the purchase. They increased revenue and traffic 30-fold before selling the company to Demand Media in 2006 for a 400X return.

The NY Times has an interesting article in this Sunday’s magazine which notes that much the same may be happening with Linen’s and Things:

In this instance, control of the Linens ’n Things brand, meaning its trademarks and the like, and its Web site, were acquired for a reported $1 million by a joint venture between Gordon Brothers Brands and Hilco Consumer Capital, divisions of firms with long histories in the bankruptcy business. This entity helped run the Linens ’n Things liquidation, spending four or five months immersed in its unwinding operations in the process. “We learned a lot about the brand and the consumer,” Carlyle Coutinho, vice president of Hilco Consumer Capital, says. “We knew we’d have a very strong e-mail list and a very strong customer base that was very loyal.”Time will tell how loyal shoppers turn out to be to what the Gordon Brothers-Hilco crew concocted: a Web-only version of Linens ’n Things. But a database of five million e-mail addresses isn’t a bad thing for a “new” business to have at its disposal, and certainly not something an online retailer starting from scratch would be likely to have. Nor would a start-up have a nationally recognized name the day it opened…

The proposition of this distinctly Great Recession model is snapping up a valuable asset on the cheap and using the low-labor tools of Web commerce — outsourcing, electronic ordering, etc. — to simulate a version of the original business.The new version of lnt.com that celebrated its “grand reopening” a few months ago may not strike the typical shopper as anything radical. The interesting stuff is in what’s behind the site, or maybe even what isn’t. For instance, the actual operation of lnt.com has been jobbed out to a third party: a San Diego firm called TorreyCommerce that bills itself as “a leading provider of outsourced e-commerce to the home-furnishings industry.”…

Linens ’n Things itself now has few direct employees, or even a full-time chief executive. And while the comeback announcement included a mention of plans to “reinvigorate” the brand, the marketing efforts so far revolve around Internet search ads and promotions sent to the e-mail list.

As companies both big and small go out of business during this great recession, I wonder which of them may yet be reborn by smart, thrifty, scrappy entrepreneurs who know how to keep costs low and, more importantly, variable.

Scientists Discover We Are All Mutants

A little more on the theory that the genetic mutation rate is lot higher than people think. That has a lot of interesting implications for current levels of genetic diversity in the population. Some of these implications are a little scary. Specifically, if you've ever driven down the highway and wondered if some hapless driver was from different species, you might have been right. A great book on this is the 10,000 Year Explosion if you have an interest. More via BBC:

Scientists have been trying to get an accurate estimate of the mutation rate for over 70 years.

However, only now has it been possible to get a reliable estimate, thanks to "next generation" technology for genetic sequencing.

The findings may lead to new treatments and insights into our evolution.

In 1935, one of the founders of modern genetics, JBS Haldane, studied a group of men with the blood disease haemophilia. He speculated that there would be about 150 new mutations in each of us.

Others have since looked at DNA in chimpanzees to try to produce general estimates for humans.

However, next generation sequencing technology has enabled the scientists to produce a far more direct and reliable estimate.

They looked at thousands of genes in the Y chromosomes of two Chinese men. They knew the men were distantly related, having shared a common ancestor who was born in 1805.

By looking at the number of differences between the two men, and the size of the human genome, they were able to come up with an estimate of between 100 and 200 new mutations per person.

Impressively, it seems that Haldane was right all along.

Unimaginable

One of the scientists, Dr Yali Xue from the Wellcome Trust Sanger Institute in Cambridgeshire, said: "The amount of data we generated would have been unimaginable just a few years ago.

"And finding this tiny number of mutations was more difficult than finding an ant's egg in an emperor's rice store."

New mutations can occasionally lead to severe diseases like cancer. It is hoped that the findings may lead to new ways to reduce mutations and provide insights into human evolution.

Joseph Nadeau, from the Case Western Reserve University in the US, who was not involved in this study said: "New mutations are the source of inherited variation, some of which can lead to disease and dysfunction, and some of which determine the nature and pace of evolutionary change.

"These are exciting times," he added.

"We are finally obtaining good reliable estimates of genetic features that are urgently needed to understand who we are genetically."

Rumor Floating Around that AT&T is Making a Bid for Leap Wirelss

It's hitting around 1PM and the stuck and premiums are through the roof. My initial gut is very difficult to get that past the current regulators at FCC and DOJ. At least a purchase by AT&T. Gonna do some digging though. Just highly skeptical that is true. If there is an offer I would bet it's not AT&T.

Why? A competitiveness investigation was just launched against AT&T so they decide to do merger? Even a small one?

In my view, it's an invite for the FCC to open up a can of "whoop ass".

If one wanted to speculate against such a merger one could sell a vertical call spread as premiums have gone through the roof. Time to start asking around...lots of mergers going on right now. Anything is possible though so one should cap risk.

Folks Who Brought You the Financial Crisis Ask For Mulligan

These guys made hundreds of millions in bonsuses off of repackaged mortgage securities are out there raising money again. Washington Post on the mother of all mulligans:

You've probably never heard of Jay Levine, Chris Ricciardi, John Costas or Stanford Kurland, but they are charter members of Wall Street's Mulligan Club

Back during the heyday of the credit bubble, they were the financiers who earned huge bonuses for creating, trading and investing other people's money in those complex securities that resulted in trillions of dollars in losses and brought global financial markets to their knees. And now they're out there again hustling for investors and hoping to make another score buying and trading the same securities.

Like golfers who treat themselves to a second drive after hooking the first one deep into the woods, these guys play on without apology or penalty. The maddening thing is that they're getting away with it and nobody seems to care.

Consider the case of Jay Levine, once the co-chief-executive of RBS Greenwich Capital, the American investment banking arm of the Royal Bank of Scotland. Under Levine's direction, RBS Greenwich went from the bottom of the "league tables" in terms of issuance of asset-backed securities to a perch near the top -- right up there, one industry publication wrote at the time, with Bear Stearns and Lehman Brothers as one of the "best mortgage-backed houses" in the business.

At the height of the mortgage frenzy, Levine's group generated more than $350 million in profit annually for RBS and Levine was reportedly RBS's highest paid employee, earning more than $60 million during the three years before his departure at the end of 2007.

Now, two years later, RBS is a financial ward of the British government, which has had to put in more than $30 billion to keep it from collapsing. RBS's biggest mistake was an ill-timed and overpriced purchase of a Dutch bank, but there were also tens of billions of dollars in U.S. credit losses, many of them attributable to RBS Greenwich.

Levine, meanwhile, left RBS at the end of 2007 to take the top job at Capmark Financial Group, a spinoff of GMAC that had become one of the country's biggest commercial real estate lenders. Since then, of course, things have only gone from bad to worse in the world of commercial real estate finance, forcing Capmark to post more than $2 billion in operating losses before it stopped filing public reports this spring. Its biggest shareholder, the buyout firm KKR, has now written off its entire investment in the company. Levine volunteered to reduce his base salary from $5 million to $4 million.

But don't shed too many tears for Jay. Even while remaining at Capmark, he's reassembled some of the old team from RBS Greenwich at a new firm, CRT Capital Group, a small trading house in Stamford, Conn., that he bought in July with former RBS Greenwich co-chief-executive Ben Carpenter and Ron Kripalani, who once headed the capital markets group at none other than Countrywide Financial. In a statement announcing the purchase, the new managers suggested that with so much of Wall Street operating under government-imposed pay caps, it was a perfect time to lure away the industry's "best producers."

Running Windows7 and Snow Leopard on same MacbookPro.Hate to say it, but Os7=faster.

In the immortal words of Shakira, the "Chips Don't Lie"