Eric Ries:

Here's a common question I get from startups, especially in the early stages: when should we launch?

My answer is almost always the same: don't.

Warren Buffett:

Do what you love, or your boss will decide for you.

The Google Way:

If you have a great technical idea, you don’t have your V.P. send out a memo telling everybody to use it. Instead, you take it to your fellow engineers and convince them that it’s good.

Don't Launch

Across the country, business-school faculties are grappling with the possibility that they've been instilling generations of students with a naive faith in free markets, teaching them to focus solely on short-term profits, and justifying some of the more outrageous executive-compensation schemes that have become Exhibit A in the case against corporate America. Many of those notions are tumbling quickly.

But what comes after the fall?

"This market was full of people who were really just salesmen. You'd get them in class and ask them questions [about the latest financial innovations], and, for the first ten minutes, they sound sophisticated. Then you probe a little deeper, and, for the next ten, they're an idiot."

From last December, Malcom Gladwell:

We should be lowering our standards, because there is no point in raising standards if standards don’t track with what we care about.

From last October, Andrew Lahde:

I was in this game for the money. The low hanging fruit, i.e. idiots whose parents paid for prep school, Yale, and then the Harvard MBA, was there for the taking.

Paul Graham:

If you want to invest two years in something that will help you succeed in business, the evidence suggests you'd do better to learn how to hack than get an MBA.

MBA Frayed

Paul Ferguson:

This entire discussion of "Who will be responsible for US Cyber Security?" is the wrong discussion altogether.

We are all responsible.

And we are all failing.

Greg Conti:

The revolution in cyberwarfare ... necessitates the formation of a cyberwarfare branch of the military, on equal footing with the Army, Navy, and Air Force.

We do not make this recommendation lightly.

Also:

We're all losers now. There's no pleasure to it.

From last December:

"You have to laugh to keep from crying these days," she said as she wiped away tears.

In the long run we are all dead.

Cyber Security: Blurred Vision

Greg Conti, in the Spring 2009 issue of IA Newsletter:

Make no mistake -- the cyber cold war is being waged now.

The revolution in cyberwarfare ... necessitates the formation of a cyberwarfare branch of the military, on equal footing with the Army, Navy, and Air Force. We do not make this recommendation lightly.

The culture of each service is evident in its uniforms. Absent is recognition for technical expertise. The cultures of the Army, Navy, and Air Force are fundamentally incompatible with that of cyberwarfare. NSA is not the right type of organization. Unit bake sales are unlikely to attract and retain the best and brightest.

The change will not be easy, but the risks inherent in maintaining the status quo are significantly worse.

From a recent WaPo story about Rod Beckstrom:

"He brought a completely different perspective, which in one way could have been his undoing," said a senior member of the intelligence community.

From a 2005 NYT op-ed:

The Army will need this lieutenant 20 years from now when he could be a colonel, or 30 years from now when he could have four stars on his collar. But I doubt he will be in uniform long enough to make captain.

Mike Wertheimer, the idea rat behind A-Space:

"I am threatening the status quo, and that's a hard pill to swallow for anybody."

About Sean Naylor:

Like any good reporter, he seeks to tell the whole tale, and some of what he reports the senior leadership would prefer not to hear.

Your daily dose of Simpsons:

Frink: "Now that I have your attention, we have some exciting new research from young Lisa Simpson. Let's bring her out and pay attention."

Scientist #1: "She's just a little girl!"

Scientist #2: "Let's not listen!"

Rumsfeld:

Sure, we have to worry about platforms and ships and guns and tanks and planes and that stuff. That is not what the department of defense has to be about.

RAND:

The point that we wish to convey is that it is now fairly easy to devise scenarios in which the United States "loses" a war, something that seemed impossible during the post-Cold War era.

A final thought from BG Mark Kimmitt:

"I'm an artillery officer, and I can't fire cannons at the Internet."

Is it Time for a Cyberwarfare Branch?

Brandi Hitt, reporting from Sacramento:

There are no rules and no regulations. Here, at Tent City, you are on your own.

Decius, reporting from the sprawling exurbs:

First world shanty towns.

Look for similar towns to spring up all along the US side of the Mexican border, as migrant workers fall out of work but are afraid to return home because the situation across the border is even more perilous.

But with so much unsold (and unsellable) housing stock in the US, there's no reason for these people to remain homeless. (See Tijuana, below.)

This situation makes "drug war" reform all the more urgent.

From 2006, John Rapley:

Kingston's gang-controlled neighbourhoods are just one result of a growing worldwide phenomenon: the rise of private "statelets" that coexist in a delicate, often symbiotic relationship with a larger state. Large sections of Colombia have gone this way, as have some of Mexico's borderlands and vast stretches of the Andes and adjoining rainforest. Nations such as Afghanistan and Somalia are more or less governed by warlords, and Pakistan's borderlands submit to Islamabad only when the state's armed forces force them to. And the list is growing.

Wandering through many cities of the developing world today, one comes up against the limits of modernity. Vast metropolises, growing so quickly their precise populations are unknown, are dotted with shantytowns and squatter camps that lack running water, are crisscrossed by open gutters of raw sewage, and are powered by stolen electricity. Developing states are constantly struggling to catch up.

In some places, they succeed, barely. In others, they are losing control of chunks of their territory.

Still, although the weakness of the state today is most pronounced in the developing world, the state's retreat is also a global phenomenon.

Also from 2006:

One of the strangest sights in Tijuana is a row of vintage California bungalows resting atop a hollow one-story steel frame. Once destined for demolition across the border, they were loaded on trucks and brought south by developers who have sold them to local residents.

To squeeze them into tight lots, many homeowners mount them on frames so they can use the space underneath for shops, car repair and the like. On one site, a pretty pink bungalow straddles a narrow driveway between two existing houses, as if a child were casually stacking toy houses.

It's not that he romanticizes poverty: he recognizes the filth and clutter, the lack of light and air, that were the main targets of Modernism nearly a century ago. But by approaching Tijuana's... [ Read More (0.4k in body) ]

Sacramento 'Tent City'

With the Dow now at 6,547.05, it seemed like as good a day as any to revisit this article from the December issue of Fortune.

Dow 4,000. Food shortages. A bubble in Treasury notes.

Fortune spoke to eight of the market's sharpest thinkers and what they had to say about the future is frightening.

Here's what Bob Schiller had to say about P/E ratios:

In terms of the stock market, the price/earnings ratio is no longer high. I use a P/E ratio in which the price is divided by ten-year average earnings. It's a really conservative way of looking at it. That P/E ratio got up to 44 in the year 2000, which was a record high. Recently it was down to less than 13, which is below the average of around 15. But after the stock market crash of 1929, the price/earnings ratio got down to about six, which is less than half of where it is now. So that's the worry. Some people who are so inclined might go more into the market here because there's a real chance it will go up a lot. But that's very risky. It could easily fall by half again.

From a few days ago:

If the exceptional monetary stimulus since September produces inflation, or the unprecedentedly large budget deficits in fiscal years 2009 and 2010 “crowd out” private investment, then growth and earnings prospects for the next few years would be below average. In that event, the market as it stands today would be overvalued.

From last week:

This link is extremely useful. DJIA still looks expensive by this measure!

On 2 March, we had a (1-year) forward P/E of 10.81 for DJIA; one week later, the 12-month forward P/E is down to 9.91. The (1-year) forward P/E for the S&P 500 is down from 11.90 to 10.36.

Are we on track to fulfill Schiller's "fall by half again"?

From last month:

Rather than rely on Wall Street Analysts who are chock full of the conflicts, and seem structurally incapable of catching major economic turns, let’s revisit a long term look at P/E ratios, via historical cycles.

The key point of the chart is that earnings and P/Es are cyclical.

From last October:

In August 2007, the 10-year price-earnings (P/E) ratio was 27.

In October 2008, the 10-year P/E ratio is 14, below the 100-year P/E (15.5) but above the "long-run average" for the depressions of the 30's and 80's (6).

Fall By Half Again? If Only!

Cass Sunstein:

In a well-functioning deliberative democracy, a wide range of perspectives is a virtue rather than a vice, at least if the constitution has the proper structure.

Richard Hofstadter:

The Fathers hoped to create not a system of party government under a constitution but rather a constitutional government that would check and control parties.

... Although Federalists and Anti-Federalists differed over many things, they do not seem to have differed over the proposition that an effective constitution is one that successfully counteracts the work of parties.

Michael Lopp:

You should pick a fight, because bright people often yell at each other.

Sunstein again:

The antifederalists rooted the problem of faction in that of corruption.

Madison argued that conscious attempts to eliminate the factional spirit would not promote liberty but instead destroy it.

Marcia Angell:

There seems to be a desire to eliminate the smell of corruption, while keeping the money.

James Madison:

To suppose that any form of government will secure liberty or happiness without any virtue in the people, is a chimerical idea.

Niall Ferguson:

Chimerica is really the key to how the global financial system works, and has been now for about a decade. Both sides stand to lose from a breakdown of Chimerica, which is why both sides are affirming a commitment to it. The Chinese believe in Chimerica maybe even more than Americans do. They have nowhere else to go.

There was a time when if you said the United States was going to suffer a lost decade like Japan did in the 1990s, everybody would have said you were a mad pessimist. That begins to look like quite a good scenario.

Alexander Hamilton:

When occasions present themselves in which the interests of the people are at variance with their inclinations, it is the duty of the persons whom they have appointed to be the guardians of those interests to withstand the temporary delusion in order to give them time and opportunity for more cool and sedate reflection.

Some time ago:

To be sure, time marches on.

Yet for many Californians, the looming demise of the "time lady," as she's come to be known, marks the end of a more genteel era, when we all had time to share.

The Enlarged Republic -- Then and Now

Stephen Wolfram:

What about everything?

It’s going to be a website, with one simple input field that gives access to a huge system, with trillions of pieces of curated data and millions of lines of algorithms. A new paradigm for using computers and the web.

Nova Spivack:

It doesn't simply return documents that (might) contain the answers, like Google does. It computes the answers. He's done it. It works. I've seen it myself. (Will it ever make mistakes?)

From the archive:

The reality is that, despite fears that our children are "pumped full of chemicals", everything is made of chemicals, down to the proteins, hormones and genetic materials in our cells.

Wolfram|Alpha

John Reed, in FT:

Detroit may be the archetypal down-and-out rust-belt city, but to call it “dying” masks a more complex reality.

Detroit is no longer the nation’s worst-case scenario, but on its leading edge, the proverbial canary in the coal mine.

Neil Howe:

If you think that things couldn't get any worse, wait till the 2020s.

From the archive, a bit of Gladwell:

The relation between the number of people who aren’t of working age and the number of people who are is captured in the dependency ratio.

Last year, in the Economist:

Victorville is typical. Other sprawling exurbs, such as Palmdale and Lancaster, are also seeing an influx of blacks looking for cheaper housing and safer streets. They reveal a dramatic shift in southern California's population, and provide clues to how America is changing.

From 1957, James Reston, via McLuhan, from 1964:

A health director ... reported this week that a small mouse, which presumably had been watching television, attacked a little girl and her full-grown cat ... Both mouse and cat survived, and the incident is recorded here as a reminder that things seem to be changing.

The travails of Detroit

Since the recession began, the economy has eliminated roughly 4.4 million jobs, and more than half of those positions — some 2.6 million — disappeared in the last four months.

The acceleration has convinced some economists that, far from an ordinary downturn after which jobs will return, the contraction under way reflects a fundamental restructuring of the American economy. In crucial industries — particularly manufacturing, financial services and retail — many companies have opted to abandon whole areas of business.

Peter Drucker:

Managers have to learn to ask every few years of every process, every product, every procedure, every policy: "If we did not do this already, would we go into it now knowing what we now know?" If the answer is no, the organization has to ask, "So what do we do now?" And it has to do something, and not say, "Let's make another study."

"Leonard Nimoy":

The following tale of alien encounters is true. And by true, I mean false. It's all lies. But they're entertaining lies. And in the end, isn't that the real truth?

The answer ... is No.

Peter Schiff:

I think things are going to get very bad.

From the archive:

People say to me, "Whatever it takes." I tell them, It's going to take everything.

Also:

We're all losers now. There's no pleasure to it.

Have you seen "Revolutionary Road"?

Hopeless emptiness. Now you've said it. Plenty of people are onto the emptiness, but it takes real guts to see the hopelessness.

Crushing Job Losses May Signal Broader Changes