Archive for the ‘Trivia’ Category

Financial crisis explained…

March 7, 2009
The financial crisis explained in simple terms:
Heidi is the proprietor of a bar in Berlin. In order to increase sales, she decides to allow her loyal customers – most of whom are unemployed
alcoholics – to drink now but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).
Word gets around and as a result increasing numbers of customers flood into Heidi’s bar.

Taking advantage of her customers’ freedom from immediate payment constraints, Heidi increases her prices for wine and beer, the
most-consumed beverages. Her sales volume increases massively.
A young and dynamic customer service consultant at the local bank recognizes these customer debts as valuable future assets and
increases Heidi’s borrowing limit.
He sees no reason for undue concern since he has the debts of the alcoholics as collateral.

At the bank’s corporate headquarters, expert bankers transform these customer assets into DRINKBONDS, ALKBONDS and PUKEBONDS.
These securities are then traded on markets worldwide. No one really understands what these abbreviations mean and how the securities are
guaranteed.
Nevertheless, as their prices continuously climb, the securities become top-selling items.

One day, although the prices are still climbing, a risk manager (subsequently of course fired due his negativity) of the bank decides that
slowly the time has come to demand payment of the debts incurred by the drinkers at Heidi’s bar.

However they cannot pay back the debts.
Heidi cannot fulfil her loan obligations and claims bankruptcy.
DRINKBOND and ALKBOND drop in price by 95 %. PUKEBOND performs better, stabilizing in price after dropping by 80 %.
The suppliers of Heidi’s bar, having granted her generous payment due dates and having invested in the securities are faced with a new
situation.

Her wine supplier claims bankruptcy, her beer supplier is taken over by a competitor.
The bank is saved by the Government following dramatic round-the-clock consultations by leaders from the governing political parties.
The funds required for this purpose are obtained by a tax levied against the non-drinkers.
Finally an explanation that is simple yet true . . .

Create customized windows installations!

January 7, 2009

via:
http://www.nliteos.com/guide/part1.html

http://www.nliteos.com/download.html

  • Create a folder somewhere on your hard drive to copy the windows source files into
  • I called mine ‘XP_Source’ but you can use whatever name you prefer. Just make sure there is adequate space on your hard drive to hold the files
  • Copy the full content from the distribution cd into this folder
  • Start nLite

– Welcome screen shows you which version of nLite you are running and allows you to choose an alternate language.
– To continue click on ‘Next’.

– We must now direct nLite to the folder which contains the windows installation files
– To do this Click on ‘Browse’.

– Select the folder you created above

– nLite recognizes the language and version of your windows installation files

– You can save your current presets for future use or load presets from the last time you used nLite

– At this screen we have the options to choose what we would like nLite to accomplish for us
– These are some of the most advanced and customizable features within nLite
– In this example all of the pages are selected, but you can pick and choose which ones to proceed with

– To Integrate a Service Pack first download the correct pack for your operating system and save it to your hard drive
– Again, you can save it anywhere you want to on your hard drive. I personally chose to save it to my desktop so that I can delete it afterwards
– As you can see, nLite makes things easy for us!
– Links to download the most recent service pack are embedded within nLite
– We must now direct nLite to the service pack file that was downloaded in the step above
– Click on the ‘Select’ tab and the following box will appear

– Use the pull down arrow at the top of the window to help choose the correct file
– When you have located it, click on it, and and then select the ‘Open’ tab
– nLite will automatically extract and integrate the service pack into your windows distribution folder

– In this window we have the option to add hotfixes and update patches into the installion
– I created a folder on my hard drive where I have downloaded all patches and updates for easy reference
– If you are using Internet Explorer, run Windows Update and look for the updates. Then download the actuall file by searching for it within Microsoft’s website

Is this your name

November 26, 2008

http://www.isthisyour.name/dennis_joseph.htm

This is an awesome site to get interesting facts on your name. Here is what I got on mine..

Top 5 Facts for this Name:


  1. 33% of the letters are vowels. Of one million first and last names we looked at, 60.6% have a higher vowel make-up. This means you are averagely envoweled.
  2. In ASCII binary it is… 01000100 01100101 01101110 01101110 01101001 01110011 00100000 01001010 01101111 01110011 01100101 01110000 01101000
  3. Backwards, it is Sinned Hpesoj… nice ring to it, huh?
  4. In Pig Latin, it is Ennisday Osephjay.
  5. People with this first name are probably: Male. So, there’s a 98% likelihood you sweat just thinking of the price of shaver blades.

Name Origin and Meaning:


Forename:
Origin:
Greek (Root: Denis)
Meaning: of Dionysus (the god of wine), Wild, Frenzied

Surname:
Origin:
(origin Hebrew) Increase, addition.

3 Things You Didn’t Know:


  1. Your personal power animal is the King Cheetah
  2. Your ‘Numerology’ number is 3. If it wasn’t bulls**t, it would mean that you are enthusiastic, creative, optimistic, and fun-loving. You seek self-expression through words or the arts, and enjoy learning through life experiences.
  3. According to the US Census Bureau°, 0.417% of US residents have the first name ‘Dennis’ and 0.0331% have the surname ‘Joseph’. The US has around 300 million residents, so we guesstimate there are 414 Americans who go by the name ‘Dennis Joseph’.

//Create your sharelet with desired properties and set button element to false var object2 = SHARETHIS.addEntry({ title:”Three things you didn’t know about Dennis Joseph”, summary:”Here are there things you probably didn’t know about the name Dennis Joseph. See more at http://www.isthisyour.name”, content:”Did you know that Dennis Joseph…

  1. Translates to the number 3 in numerology
  2. Has the King Cheetah as their Power Animal
  3. Shares their name with a guesstimated 414 Americans?

See more at http://www.isthisyour.name” }, {button:false}); //Output your customized button document.write(‘Like these 3 things? Share them!‘); //Tie customized button to ShareThis button functionality. var element2 = document.getElementById(“share2”); object2.attachButton(element2); 

10 American Financial Meltdowns in the Past Century

October 11, 2008
via:

10 American Financial Meltdowns in the Past Century

Banks failed, stock prices collapsed, and panic descended on Wall Street. Americans were holding their collective breath as a rescue plan was hastily drafted. The 2008 financial crisis? Nope – it was the Panic of 1907, and again in 1929, 1987, and so on.

Since its independence more than 230 years ago, the United States has grown to have the largest economy in the world (GDP of $13.8 trillion as of 2007, by the way. That’s $13,800,000,000,000). But we didn’t get there without quite a few bumps on the road.

To put today’s economic trouble into perspective, let’s take a look at the 10 financial disasters in the United States in the past century:

1. The Panic of 1907


Floor of the New York Stock Exchange in 1907. Photo: Helen D. Van Eaton

Background: At the time, the young US stock market was in a decline – it was off 25% since the beginning of the year and Wall Street was jittery over the tight money supply.

Trigger: Then along came Otto Heinze with his get-(even)-rich(er)-quick scheme. In October of 1907, Otto, along with his brother, a copper magnate named Augustus Heinze, and the ice king (yup, he sold ice – remember, this was before the age of household refrigerators) Charles W. Morse, aggressively bought shares of United Copper, thinking that they could corner the market on the stock. Their plan failed spectacularly, and immediately bankrupted the trust companies and banks that provided the financing.

Runs on banks immediately ensued as depositors pulled their money from banks that had dealings (or rumored to have dealings) with the trio. In a little less than two weeks in the Panic of 1907, a chain reaction had left 9 trust companies and banks bankrupt.

The Solution: At the time, the United States had no central bank (President Andrew Jackson had abolished the Second Bank of the United States some 6 decades earlier), but we had J.P. Morgan.

The 70-year-old financier stepped in to bail out, er … save trust companies worth saving and let those who were too far gone to fail. The infusion of cash helped stop the domino effect of failing trust companies, but more money was needed.

So here’s what he did:

Morgan gathered 50 trust company presidents at his library, told them to come up with $25 million on their own and left them in a large room. He withdrew to his librarian’s office. At 3 a.m., he called in one of his sleep-deprived lieutenants, Ben Strong, for a review of a trust company’s books. Strong gave his report, then headed to the library’s front doors and found them locked. Morgan had the key in his pocket. No one would leave until the trusts ponied up. The presidents continued to talk. At 4:15, Morgan walked in with a statement requiring each trust company to share in a new $25 million loan. One of his lawyers read it aloud, then set it on a table. “There you are, gentlemen,” said Morgan.

No one moved.

Morgan drew Edward King, head of the Union Trust, to the table. “There’s the place, King,” he said, “and here’s the pen.” King signed. The other presidents signed. They set up a committee to handle the loan and supervise the final-stage bailouts of endangered trusts. At 4:45, the library’s heavy brass doors swung open and let the bankers out. (Source)

Aftermath: The government realized that only having people like J.P. Morgan in charge of saving the entire country’s economy was kind of a bad idea, so it created the Federal Reserve System.

2. Wall Street Crash of 1929


The trading floor of the NYSE right after the crash.

Background: In the Roaring Twenties, optimism was everywhere: the Great War, as World War I was called back then, was over and advances in technology seemed limitless. Along with that optimism was an incredibly speculative bull market: stocks went up four fold in value in that decade.

Hundreds of thousands of Americans borrowed money to play the stock market. They bought stocks with just a fraction of the value in cash and financed the rest by borrowing from the broker (“buying on margin,” if you’ve never heard it before). Needless to say, stocks became overvalued fast.

The Crash: What goes up, must come down – but it doesn’t have to come down all in one day. The Wall Street Crash of 1929 came in forms of three “black” days.

In the morning of October 24, 1929 – later nicknamed “Black Thursday“- a massive sell-off happened. More than 3 times the normal amount of shares were traded and stock prices tumbled. Richard Whitney of J.P. Morgan and Company came to the trading floor … and instead of halting trading like everyone expected, he started buying confidently and the market recovered. The market actually went up the subsequent Friday and a little down on Saturday (back then, they traded on Saturdays). And then … the bottom fell off.

On Monday, October 28, 1929, nicknamed Black Monday, the market fell 13% and the next day, nicknamed Black Tuesday, the market fell another 12%. Financiers like General Motor’s William C. Durant and the Rockefeller family stepped in and bought stocks to show confidence, but their efforts failed to stop the slide. (Source)

That week (with heaviest losses over the first two days) the market lost $30 billion, ten times more than the annual budget of the government and more than what the US had spent in all of World War I.

Over the next few weeks, the stock market suffered sharp declines though the true bottom wasn’t reached until July 1932. Over three years, the stock market dropped a staggering 89%. It would take about 25 years for the stock market to recover and re-attain the 1929 level. (Source)

Aftermath: The Wall Street Crash of 1929 led directly to …

3. The Great Depression


Migrant Mother,” a photo by Dorothea Lange depicting Florence Owens Thompson,
a destitute pea picker in California, mother of seven children, age 32. (Source)

Background: Stung by heavy losses on Wall Street, consumers began cutting expenditures. With lowered demand, businesses started laying off people (US unemployment rate rose to 25% by 1933) – which fed an ever-worsening cycle and plunged the US economy into a depression.

As debtors defaulted on their loans, banks began to fail, which led to bank runs as depositors attempted to withdraw their money en masse, triggering even more bank failures. Today, your deposit is insured in the event of a bank failure, but in 1930s, there was no such thing: when a bank failed, its depositors lost all of their money. In the first 10 months of 1930, 744 US banks failed and their depositors lost more than $140 billion. Before the decade was over, about 9,000 banks failed. (Source)


Hooverville in Levittown, New York (Source)

Hooverville: Many people thought that President Herbert Hoover did nothing to save them from the Great Depression. That’s just not true: Hoover did a few things, including deporting about 500,000 Mexicans to Mexico (half of which were actually born in the US and thus were legal citizens) and increasing tariffs on imports – which caused other countries to retaliate and US exports to plunge by more than half, but nothing worked.


Hard Times Are Still “Hoover”ing Over Us, photo of two children in a Hooverville (Source)

Many of the people made homeless by the Great Depression lived in makeshift shantytowns called Hoovervilles. They used “Hoover blanket” (old newspaper) to keep warm, wave “Hoover flag” (an empty pocket turned inside out) and drink “Hoover soup” at restaurants (poor people would pour ketchup, salt and pepper into their drinking water at restaurants, then tell the waitress that they didn’t see anything they wanted on the menu). Those who were relatively better off drove “Hoover wagon” (a car pulled by a horse because the owner couldn’t afford gas). (Source)

Solution: In 1933, the newly elected President Franklin D. Roosevelt initiated the New Deal, which included work relief program for the jobless, financial aid to farmers and business reform, including setting minimum wages and maximum weekly hours. Roosevelt encouraged trade unions and forced businesses to work with the government to set prices (later found to be unconstitutional).

In Roosevelt’s first term, unemployment fell by two third and the economy stabilized; full recovery, however, didn’t occur until the start of World War II.

Aftermath: The Great Depression had a far reaching effect, even until today. Social Security, the Tennessee Valley Authority, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation (FDIC), and the Federal Housing Authorities are direct products of the New Deal that are still active today.

4. 1973 Oil Crisis

Cars waiting in line at a gas station (1979).
Photo: Warren K. Leffler, Library of Congress

Background: In October 1973, Syria and Egypt launched a surprise attack on Israel on the Jewish day of atonement or Yom Kippur. This set off a twenty day war known as the Yom Kippur War (or Ramadan War), in which the Arab forces were defeated.

The embargo: Angry over Western nations’ support of Israel, members of the Organization of Petroleum Exporting Countries (OPEC) as well as Egypt and Syria shut off oil export to the United States, Western Europe, and Japan.

The crude oil price immediately quadrupled to $12 per barrel (I know. Twelve bucks. How quaint when compared to today’s prices!) which led gasoline price at the pump to jump 40% from 38.5 cent to 55 cent per gallon in 1974 (again, I know). The oil shock led to a huge drop in the stock market. The New York Stock Exchange lost $97 billion in value in just six weeks.

US Government responded by rationing gasoline. Long gas lines formed at the pump. In many places, motorists with even-numbered license plates were allowed to buy gas only on even-numbered dates and those with odd-numbered plates could buy only on odd-numbered dates. (Source)

Aftermath: To help reduce consumption, the federal government imposed a national maximum speed limit of 55 mph and mandated fuel efficiency standards for car manufacturers. The government also created the Strategic Petroleum Reserve and the Department of Energy.

5. Black Monday (1987)

The Crash: On Monday, October 19, 1987, the US stock market crashed. The Dow Jones Industrial Average dropped 508 points or 22.6%, the largest one-day percentage decline in the stock market history. At one point during the day, so many shares were being sold that “the New York State Stock Exchange ticker fell behind and TV newscasters couldn’t tell how much the market had fallen.” (Source)

The Culprits: The most popular culprits for the 1987 Black Monday were program trading and a new financial hedging method called portfolio insurance. These two things caused massive stock sell offs and drove down the stock price (note that other factors such as the weak dollar, large US trade deficit, and overvaluations of stock values might have played a role as well) (Source)

Program trading is easy to explain: in the early 1980s, the use of computers became increasingly popular in Wall Street. Traders began to use computers to execute rapid trades based on a pre-determined condition (say, sell when a stock price dropped to a certain point). Dropping stock prices trigger these automated trades, which flood the market with stock shares and caused an even steeper decline in stock prices.

Portfolio insurance is a little bit (okay, a lot) more complex. In 1976, two young Berkeley finance professors named Hayne Leland Mark Rubinstein thought of a way to “insure” a portfolio investments of stocks similar to the way insurance protects an asset. For a price (a kin to an insurance premium), their trading system can guarantee that an investment never loses more than a pre-set (and relatively small) amount.

To do this, portfolio insurance uses financial instruments called derivatives. Most people understand buying and selling stocks – if you buy a share of stock for $1 and sell it for $3, then you’ve made a profit of $2. Derivatives, on the other hand, let you speculate on the future price of a stock (or a commodity, or really anything at all) without ever owning a single share. For example, you can buy a futures contract, essentially an agreement to purchase a stock say a week from now for $1. If the price of the stock is greater than $1, then you’ve made money. If the price of the stock is less than $1, then you’ve lost money. At no point in time do you actually buy the stock!

In the case of portfolio insurance, say you have $1000 in stocks that you want to safeguard from falling in value by next week. Then you sell a futures contract for the stocks. If the value of your stocks dropped, you’ve lost value in your stocks but gained money from the the futures contract. (Yes this is simplistic, but that’s the basic idea).

Without getting into mind boggling technical details, suffice it to say that the portfolio insurance method linked stock prices to the futures index. The whole thing would work but for one teensy flaw: during a panic sell off, there is little market liquidity – you can try to sell stocks, but without any buyer, you effectively can’t sell it at any price.

Aftermath: In response to Black Monday, the New York Stock Exchange instituted trading rules (the so-called “circuit breakers”) to pause trading if the market fell precipitously. The Federal Reserve also get to play a really big role in ensuring liquidity by pumping billions of dollars into the banking system.

Remember the term derivatives. We’ll see that again, soon enough!

6. Savings & Loan Crisis (1989)


Lincoln Savings and Loan, back in its heyday of 1965 (Source)

Background: A Savings and Loan institution is kind of like a bank: people deposit their money in it in the forms of savings, and the S&L gives out mortgages (or loans) to the local community. S&Ls have existed since the 1800s and they were tightly regulated until the late 1970s.

In the late ’70s, the newly available money market funds offered much higher interest rates than the S&L, so people started pulling their money out of S&Ls. As a response, S&Ls asked for government deregulation (which they got*) – effectively, S&Ls could then raise interest rates on deposits and make way more loans than before with little oversight. There was a regulatory body, the Federal Home Loan Bank Board (FHLBB), but it was understaffed and its officers were accused of being chummy with the industry.

The S&L Crisis: In the real estate boom of the early ’80s, many S&L grew extremely large, extremely fast. Between 1982 and 1985, S&L assets (many of which were speculative real estate holdings and commercial loans) grew 56%. In Texas, 40 S&Ls tripled in size, with some doubling each year. (Source) Needless to say, many were overextended (some were technically bankrupt, but according to the new deregulation rules, they could remain open and thus continued to make bad loans).

By 1987, 505 S&L institutions failed. Some, like those in Texas, failed spectacularly – losses in just that one state comprised more than half of all S&L losses nationwide. The deposits were guaranteed by the Federal Savings and Loan Insurance Corporation (FSLIC, just like the FDIC guaranteed bank deposits) – but because of the amount, it turned out that the FSLIC itself was bankrupt!

All in all, by 1995, 747 S&Ls or half of all the S&L institutions in the United States went bankrupt.

The Keating Five: You may have heard of the term “Keating Five,” here’s the story in a nutshell. In 1984, construction magnate Charles Keating bought Lincoln Savings and Loan of Irvine, California. Before then, Lincoln S&L was a profitable yet conservatively run Savings and Loan institution. Keating fired the existing management and loaded up Lincoln’s investment portfolio from $1.1 billion to $5.5 billion by buying land and junk bonds.

In 1986, the FHLBB initiated an investigation on how Lincoln was doing business. Keating, who was politically connected, asked 5 US senators, for whom he had made large contributions, to intervene (which they did). In 1989, Lincoln went bankrupt and more than 21,000 mostly elderly investors lost their life savings (Lincoln had misled them to switch their FDIC-insured holdings to bonds that weren’t guaranteed).

The five senators, namely Alan Cranston, Dennis DeConcini, Donald Riegle, John Glenn, and John McCain, were investigated by the the Senate Ethics Committee. Cranston was reprimanded, Riegle and DeConcini were criticized for acting improperly, whereas Glenn and McCain were cleared of impropriety but criticized for poor judgment.

The Solution: In 1989, newly elected President George H.W. Bush announced that he would rescue the troubled Savings and Loan industry. The bailout was priced at a shocking $60 billion, which actually turned out to be overly optimistic. The total cost of the S&L mess was closer to $153 billion, of which $124 was footed by the taxpayers. (Source)

Aftermath: A whole bunch of reform, including the dissolution of the FHLBB and the FSLIC, to be replaced by other regulatory bodies. Freddie Mac, which had been under control of FHLBB, was put under the US Department of Housing and Urban Development, which gave it one additional goal: to buy subprime mortgages to enable low-income families to afford buying houses (we’ll see this again).

*Note: The deregulation of the Savings and Loan industry happened with the Garn-St. Germain Depository Institutions Act of 1982. The bill was very popular – one of its provisions was allowing adjustable rate mortgages or ARMs. (Yup, you’ve guessed it – we’ll see ARMs again)

7. Long Term Capital Bailout (1998)

Background: In 1994, legendary bond trader John Meriwether left Salomon Brothers and founded his own hedge fund. He attracted the top financial minds at the time, including two Nobel Prize economists, Myron Scholes and Robert Merton. The hedge fund was named Long Term Capital Management. Meriwether raised $1.25 billion in capital from investors to start. It was the largest funding raised for a hedge fund in history.

LTCM, as the hedge fund was commonly known, wanted to make money the scientific way: in leveraged arbitrage.

At this point, it’s probably necessary to define the terms for some people. Hedge fund is a private investment fund that aims to make money using a variety of (often exotic) financial instruments. These funds typically don’t buy stocks or bonds, instead they trade derivatives (see “Black Monday” above). The “hedge” in hedge fund comes from their habit of “hedging” their portfolio – meaning that if they hold an asset, they will also place a bet that the value of the asset would go down. If their asset did go down in value, that “hedge” bet would pay off to offset the loss. In theory, this allows the fund’s investments to be risk-free. In practice, as we shall see, that’s obviously not the case.

Arbitrage is a fancy name for a simple concept: the way to make money by exploiting price differences in two different markets. For example, say that you spot a vase selling for $10 in one swap-meet and for $15 in another. If you buy that vase for $10, then go to the other swap-meet and sell it for $15, you’ve just made a profit of $5 (less cost of gas, of course).

Leverage is another fancy name for a simple concept, namely borrowing. For example, instead of paying $100 to buy $100 worth of stock or derivatives, you can pay $10 (i.e. 10%) and borrow the rest. So, if you have $100 in your pocket, you can “buy” $1,000 worth of stock or derivatives. Say that a week after you bought that stock, it rose to $130. If you bought 1 share at $100, then you’ve made $30. But if you leveraged your purchase, you would’ve “bought” $1,000 worth of stock and you would’ve made $200 (that’s $300 – $100 capital, and of course less borrowing cost). So leveraging lets you amplify your profits but if you lost, it also amplifies your losses.

The arbitrage that LTCM dealt with was in government bonds. Their strategy was complex, but suffice it to say that Myron Scholes famously summarized that LTCM would make money by being “a giant vacuum cleaner sucking up nickels that everyone else had overlooked.” (Source)

From 1994 to 1997, LTCM could do no wrong: it returned 40% in profit per year. In early 1998, LTCM’s managed portfolio grew to well over $100 billion, with net asset of $4 billion, and it was hard-pressed to find enough profitable deals in bond arbitrage. So, with over $1 trillion-worth of arbitrage, LTCM started to look at emerging markets, specifically in Russian bonds.

The Collapse of LTCM: In August of 1998, faced with their own financial crisis, the Russian government did something that no one thought they would: they defaulted on 281 billion rubles (US$13.5 billion) of its Treasury bonds. This resulted in a fiscal panic and a massive loss for LTCM. In two weeks, it lost $1.9 billion in equity. (Source) That’s a rate of about $95,000 a minute!

Then things started to go really bad for LTCM. It had thousands of derivative positions that it couldn’t sell without incurring massive losses. But LTCM wasn’t alone in this: for every deal it made, there was a counterparty that held the opposite position (for every buyer, there is a seller, and vice versa). If LTCM failed, then it would drag down everybody.

In September 1998, just weeks after the whole thing started to unravel, a consortium of banks and investment firms bailed out LTCM. Under guidance from the Federal Reserve Bank of New York, Goldman Sachs, Merrill Lynch, J.P. Morgan, Morgan Stanley, Salomon Smith Barney, UBS, Deutsche Bank, Lehman Brothers … virtually all who’s who in banking contributed to the $3.6 billion bailout (no government money was used).

Aftermath: LTCM wasn’t supposed to fail. It was managed by the rocket scientists of the financial world, and theoretically, in a rational market, it would always turn a profit. Indeed, after the bailout, the market calmed down and the positions formerly held by LTCM were eventually liquidated at a small profit. But, as economist John Maynard Keynes famously said, “the market can stay irrational longer than you can stay solvent.”

8. Dot-com Bubble (2000)

Background: In 1995, the Internet burst into the public’s consciousness. The Internet brought with it a new frontier to do business and everyone and their uncle wanted in on the new gold rush. Venture capitalists poured money into start up firms with poorly thought out business plan (other than “get big fast”), then took them public in an Initial Public Offering.

For a while, it worked: stocks in dot-coms went only one way from 1995 to 2000 and that is up. NASDAQ, the trading market that lists a lot of technology companies, went from 750 in January, 1995 to a peak of 5132 on March 10, 2000.

Despite the warning by the Fed chairman Alan Greenspan in 1996 about the market’s “irrational exuberance” and the then-dowdy-but-now-prophetic refusal of legendary investor Warren Buffet to invest in dot-com stocks, companies with no profit and even those without any viable plan to profitability were valued in the millions.

The Bubble Popped: Then, the party was over. Fueled with easy money from venture capitalists and IPOs, dot-com companies spent their way to bankruptcy: Boo.com spent $188 million in just 6 months in attempt to create a global fashion store. Pets.com raised $82.5 million in an IPO only to go bankrupt nine months later. Computer.com spent $3.5 million, or more than half of its budget, in 90 seconds ads during the Super Bowl. That’s a staggering $38,889 a second!

The biggest dot-com company that crashed and burned was, hands down, WebVan. The company aimed to deliver groceries to homes and businesses. It raised $375 million in an IPO, expanded to 8 cities (with plan to expand to 26 cities), built $1 billion-worth of infrastructure in forms of high-tech warehouses, and spent lavishly on pretty much everything (they bought 115 Herman Miller Aeron chairs at over $800 a piece!), all before turning a dime in profit. (Source)

WebVan forgot that it was actually in the grocery business, which has razor thin margins to begin with. In a mere 18 months the company had spent itself to bankruptcy.

From March 2000 to October 2002, the dot-com bubble crash wiped out $5 trillion in market value of tech companies and more than half of all dot-com companies went out of business.

9. California Electricity Crisis (2001)

Background: In 1996, state lawmakers decided to deregulate California’s energy market. In the old system, prices were set so consumers faced stable prices but because of the price cap, energy companies didn’t find it profitable to invest in new power plants.

The deregulation was supposed to lower electricity price in the long term by attracting new competitions. Indeed, companies proposed new power plants that would’ve increased California’s capacity by almost 50%. But because of the cumbersome approval process, no new plants were actually built.

The deregulation plan, however, was flawed from the beginning: utilities were forced to sell power plants to the private sector (to companies like Enron and Reliant Energy) and then buy back electricity from them to distribute to homes and businesses. Worse, the utilities weren’t allowed to negotiate long-term contracts – rather, they had to buy on the “spot market” where the prices were very high. Furthermore, the utilities couldn’t pass on the cost to the consumers as retail prices of electricity were still regulated.

The Manufacturing of the Crisis: In June 2000, the market condition was ripe for manipulations. A drought reduced the amount of electricity supplied to California by dams in the Pacific Northwest. At the same time, the demand for electricity rose during the hot summer months.

Enter Enron. Traders at the Texas-based energy company manipulated the electricity market by persuading power plants to shut down for unnecessary “maintenance,” laundering electricity (basically, shipping electricity out of California and then charging a higher price by selling it back from out of state), and creating artificial congestions over power transmission lines. The traders called their manipulation strategies by colorful names like “Fat Boy,” “Richocet,” “Get Shorty,” and even “Death Star.” (Source) By these means, traders increased the wholesale price of electricity from $45 per megawatt to over $1,400!

The Crisis: Utilities like Pacific Gas & Electric and Southern California Edison were hit hard. On one hand, they had to pay Enron upwards of 50 cents per kilowatt hours wholesale but could only charge 6.7 cent to their retail customers (Source). PG&E and SoCal Edison racked up $20 billion in debt (PG&E later filed Chapter 11 protection under bankruptcy laws). As a result, rolling blackouts affected millions of households.

Political Fallout: The California Electricity Crisis ended Governor Gray Davis’ political career. Though he inherited the deregulation mess, people blamed him for being too slow to act during the energy crisis. In 2003, he was recalled and Arnold Schwarzenegger was elected Governor to replace him.

The Bankruptcy of Enron: In late 2001, a scandal involving Enron was brewing. Investigations into the company on its role in the crisis revealed that the company had created offshore entities to hide its debt and made it look much more profitable than it actually was. (Again, like the trading manipulations, Enron gave its offshore entities really colorful names like “Jedi” and “Chewco.”) (Source)

Enron’s stock imploded and the company brought down the accounting firm Arthur Andersen, who was found guilty for its role in auditing the company.

10. Subprime Mortgage and Credit Crisis (2007 – )


Photo: respres [Flickr]

Background: To understand the ongoing subprime mortgage and credit crisis, let’s go back a few years. The end of the Dot-Com Bubble was the start of another, even larger bubble: the housing bubble.

From 2000 to 2005, the median sales price of existing homes increased year over year and speculative investment in properties skyrocketed. “Flipping” or buying a house, doing some quick renovation or repair, then selling it for a handsome profit, became sort of a national pastime, with cable TV shows dedicated to it. In 2005 we saw the launch of not one but two shows, one called Flip This House and another – completely unrelated – called Flip That House.

When property values kept on increasing, home loans became very easy to get (after all, if the borrower defaulted on the mortgage, then the bank got the house – which value kept on increasing anyway!). New mortgage products became popular: subprime loans for borrowers who otherwise wouldn’t qualify for loans because of their lack of creditworthiness (hence the term “subprime”) and adjustable-rate mortgage, which, as its name implies, have a variable interest rate. In addition to ARMs, there were also interest only loan – which let the borrower pay only the interest and not the principal on the loan for a period of time, and negative amortization loan (or NegAm) which let the borrower pay a portion of the monthly payment (the rest got added to the total amount borrowed – in this type of mortgage, the amount you owe gets larger year after year!).

How easy was it to get a mortgage? One mortgage provider, HCL Finance (motto: “Home of the ‘no doc’ loan” – no doc refers to no documentation of income required) had a product called the NINJA loan. It stood for No Income, No Job (and) no Assets! (Source)

In 2006, home prices started to go down and a year or so later, borrowers of subprime mortgages started to default on their loans. In 2007, almost 1.3 million properties were being foreclosed – a jump of 75% over the year before. (Source) As late as March 2008, it was estimated that 8.8 million homeowners (about 10.8% of total homeowners) have zero or negative equity in their homes, meaning they owe more than their houses are worth. (Source)

Had that been it, the crisis probably would’ve been isolated. Sure some banks would undoubtedly fail because they made bad loans, but the subprime crisis had since spread to the credit markets and created a massive credit crunch that is larger and far more dangerous than the subprime crisis.

Securitization: To understand the current credit crisis, it’s important to understand something called “securitization.” Securitization is an old process by which an asset that generates a cash flow can be converted into a security (like a bond), that can then be bought and sold in the market just like any other security.

A great example is the Bowie Bond. In 1997, musician David Bowie issued a bond (basically a loan note) secured by the current and future royalty revenues of his first 25 albums (a total of 287 songs … here it was the “asset”). The 10-year Bowie Bonds were bought for $55 million by Prudential Insurance Company, who then would collect on the royalties for ten years. So David Bowie got $55 million up front, and Prudential could either keep the bond (and get the song royalties) or sell the bond for profit. (Source)

Back to the topic at hand. Traditionally, banks hold mortgages until maturity, with profits being interest of the loan. But Wall Street had an idea: why not do to mortgages what David Bowie did to songs? So they (and by they, I mean Freddie Mac, Fannie Mae, and 12 Federal Home Loan Banks) pooled together mortgages and bundled them up into asset-backed securities (ABSs) and sold the package to get up front money (the investor would get the monthly mortgage payments from all of the homeowners whose mortgages got bundled).

But wait – these mortgages all had different risks. Some were safe, stodgy 30-year mortgages whereas others were subprime loans that though were more risky, also had higher interest rates and thus were more profitable. Not to worry: Wall Street split the ABSs into “tranches” (just a fancy word meaning sections or classes): the safest were rated AAA (by rating agencies whose sole job was to gauge how risky something was … and got paid by those whom it rated – talk about a conflict of interest!), the rest were medium and low-rated tranches.

The logic was this: one borrower might default on his loan, but if you bundled them together, there’s safety in number: it’s unlikely that ALL borrowers would default all at once.

But wait – there’s more. The medium and low-rated tranches were riskier investments, but it’s unlikely that all of them would default at the same time. So let’s take all those medium-to-low rated ABSs and pool them together to create something called collateralized debt obligations (CDOs). And through the magic of rating, we once again could turn some of these risky securities into – tada! – A-rated securities fit for pension funds. Repackage these CDOs a few more times and pretty soon you wouldn’t know how much subprime loans were actually in them. (Source)

The Credit Crisis: So how did the housing downturn infect the credit markets? Well, when the housing price dropped, a large number of borrowers began to default on their mortgages. Suddenly, ABSs and CDOs looked very suspicious as no one knew how much exposure to the subprime mortgage mess these securities actually had. The market for ABSs and CDOs dried up and holders of these securities couldn’t sell them. In many cases, these companies leveraged their purchase of these securities, which really amplified their losses.

Just as the market worsened and investment firms and companies found that their holdings of ABSs and CDOs were worth far less than they had paid for them (and thus had to write off that loss in their books – causing a number of hedge funds to collapse), another domino fell: Credit-default Swaps (which took down AIG).

Credit-default Swap: Credit-default Swap (or CDS) is basically insurance on debt. Say that a bank buys a large amount of bonds from a company. As with any debt, there is a risk of the debtor fail to pay the money back. To protect against the company defaulting on its bond payments, the bank would buy CDS. In case of a default, the bank go to the insurer and cash in its CDS.

American International Group or AIG was the creator and the largest seller of CDS. It thought that CDS was an insurance product just like a homeowner’s policy, but obviously it was wrong. “Any one house burning down doesn’t increase the likelihood that lots of other houses will burn down,” explained Adam Davidson of NPR, “That doesn’t apply to bond insurance.” (Source)

In case of bonds, a default can create a domino effect: as investors lose confidence and sell, the price of bonds go down and the interest rates go up. Borrowers who can’t find capital to meet their obligations would start to default on their bonds and the cycle deepens. (Photo: Gone-Walkabout [Flickr])

To make sure that AIG would actually pony up and pay the CDS in case of a bond default, it had to post a collateral. This collateral depended on their credit ranking – as their credit was downgraded, it had to post more collateral. Because of its worthless mortgage-backed securities assets, AIG’s creditworthiness would be downgraded – which meant that it would need to post as much as $250 billion, which of course it didn’t have laying around, in collateral in a matter of weeks!

Why Bail Out AIG? Over the years, the CDS market has grown into a $70 trillion a year business. And since no one knew who has CDS from AIG, the failure of AIG would mean that a lot of companies are holding bonds that are significantly riskier than they first thought. Companies that had “hedged” their bets by buying CDS would find their books suddenly unbalanced, which means they have to sell off assets to cover their risks or they would become insolvent. This failure would propagate throughout the entire economy and create a “systemic failure.” That, by the way, was what the government was trying to avoid by bailing out AIG. (Source)

The Credit Crunch: The basic essence of the credit crunch is this: banks won’t lend because they can’t be sure that they’ll be paid back. Companies with excellent credit ratings found themselves unable to get a loan (after all, all those ABSs and CDOs had excellent ratings, so who’s to say that the ratings are worth anything?). Even some banks find themselves unable to borrow money from other banks!

The Solution? As you well know by now, the White House requested, and the Congress passed a $700 billion bailout program. The idea is to for the government to buy distressed asset, especially mortgage-backed securities, from the nation’s banks, which would inspire banks to lend again. The bailout remains unpopular with the general public, who perceive it as bailing out Wall Street, who caused this mess in the first place.

Whether the bailout will work or not remains to be seen.

________________

I’ll be the first to acknowledge that this article greatly oversimplifies many things that are very, very complex (like derivatives). We’ve also skipped many subjects (like the collapse of Bear Stearns and Lehman Brothers, the bailout of Freddie Mac, and so on). We didn’t talk at all about the international aspects of some of these crises.

In all fairness, it is not meant to be a treatise on these economic failures. Even the experts can’t come to an agreement on some of these stuff. Despite having over 50 years to analyze the Great Depression, economists still can’t agree on what caused it!

11.2 million % inflation! How is Zimbabwe surviving?

September 20, 2008

via: http://www.rediff.com/money/2008/sep/18slde1.htm

Zimbabwe’s inflation rate has just touched a stratospheric level of 11.2 million per cent! Yes, 11.2 million per cent, the highest in the world’s history!

Compare that to the rate of inflation in India — which is hovering at the 12 per cent level and causing so much turmoil for Indians as the cost of commodities rises sharply — and perhaps you can put things in proper perspective.

And while the world and its brother-in-law shed tears as the United States slips into a recession and major stock markets across the world plummet, spare a thought for Zimbabwe where money has no value, and hunger, poverty and death are constant companions. So why is Zimbabwe facing such times?

Image: A Zimbabwean man holds a new Z$ 500 million note.

Read on. . .


The Evolution of Tech Companies’ Logos

September 12, 2008

You’ve seen these tech logos everywhere, but have you ever wondered how they came to be? Did you know that Apple’s original logo was Isaac Newton under an apple tree? Or that Nokia’s original logo was a fish?

Let’s take a look at the origin of tech companies’ logos and how they evolved over time:

Adobe Systems


Source: Adobe Press

In 1982, forty-something programmers John Warnock and Charles Geschke quit their work at Xerox to start a software company. They named it Adobe, after a creek that ran behind Warnock’s home. Their first focus was to create PostScript, a programming language used in desktop publishing.

When Adobe was young, Warnock and Geschke did everything they could to save money. They asked family and friends to help out: Geschke’s 80-year-old father stained lumber for shelving, and Warnock’s wife Marva designed Adobe’s first logo.

Apple Inc.

In 1976, Steve Wozniak and Steve Jobs (“the two Steves”) designed and built a homemade computer, the Apple I. Because Wozniak was working for Hewlett Packard at the time, they offered it to HP first, but they were turned down. The two Steves had to sell some of their prized posessions (Wozniak sold his beloved programmable HP calculator and Jobs sold his old Volkswagen bus) to finance the making of the Apple I motherboards.

Later that year, Wozniak created the next generation machine: Apple ][ prototype. They offered it to Commodore, and got turned down again. But things soon started to look up for Apple, and the company began to gain customers with its computers.

The first Apple logo was a complex picture of Isaac Newton sitting under an apple tree. The logo was inscribed: “Newton … A Mind Forever Voyaging Through Strange Seas of Thought … Alone.” It was designed by Ronald Wayne, who along with Wozniak and Jobs, actually founded Apple Computer. In 1976, after only working for two weeks at Apple, Wayne relinquished his stock (10% of the company) for a one-time payment of $800 because he thought Apple was too risky! (Had he kept it, Wayne’s stock would be worth billions!)

Jobs thought that the overly complex logo had something to do with the slow sales of the Apple I, so he commissioned Rob Janoff of the Regis McKenna Agency to design a new one. Janoff came up with the iconic rainbow-striped Apple logo used from 1976 to 1999.

Rumor has it that the bite on the Apple logo was a nod to Alan Turing, the father of modern computer science who committed suicide by eating a cyanide-laced apple. Janoff, however, said in an interview that though he was mindful of the “byte/bite” pun (Apple’s slogan back then: “Byte into an Apple”), he designed the logo as such to “prevent the apple from looking like a cherry tomato.” (Source)

In 1998, supposedly at the insistence of Jobs, who had just returned to the company, Apple replaced the rainbow logo (“the most expensive bloody logo ever designed” said Apple President Mike Scott) with a modern-looking, monochrome logo.

Canon


Source: Canon Origin and Evolution of the Logo

In 1930, Goro Yoshida and his brother-in-law Saburo Uchida created Precision Optical Instruments Laboratory in Japan. Four years later, they created their first camera, called the Kwanon. It was named after the Kwanon, Buddhist Bodhisattva of Mercy. The logo included an image of Kwanon with 1,000 arms and flames.

Coolness of logo notwithstanding, the company registered the differently spelled word “Canon” as a trademark because it sounded similar to Kwanon while implying precision, a characteristic the company would like to be known and associated with.

Google

In 1996, Stanford University computer science graduate students Larry Page and Sergey Brin built a search engine that would later become Google. That search engine was called BackRub, named for its ability to analyze “back links” to determine relevance of a particular website. Later, the two renamed their search engine Google, a play on the word Googol (meaning 1 followed by 100 zeros).


Google.com in 1998

Two years later, Larry and Sergey went to Internet portals (who dominated the web back then) but couldn’t get anyone interested in their technology. In 1998, they started Google, Inc. in a friend’s garage, and the rest is history.

Google’s first logo was created by Sergey Brin, after he taught himself to use the free graphic software GIMP. Later, an exclamation mark mimicking the Yahoo! logo was added. In 1999, Stanford’s Consultant Art Professor Ruth Kedar designed the Google logo that the company uses today.


The very first Google Doodle: Burning Man Festival 1998

To mark holidays, birthdays of famous people and major events, Google uses specially drawn logos known as the Google Doodles. The very first Google Doodle was a reference to the Burning Man Festival in 1999. Larry and Sergey put a little stick figure on the home page to let people know why no one was in the office in case the website crashed! Now, Google Doodles are regularly drawn by Dennis Hwang.

IBM


Source: IBM Archives

In 1911, the International Time Recording Company (ITR, est. 1888) and the Computing Scale Company (CSC, est. 1891) merged to form the Computing-Tabulating-Recording Company (CTR, see where IBM gets its penchant for three letter acronym?). In 1924, the company adopted the name International Business Machines Corporation and a new modern-looking logo. It made employee time-keeping systems, weighing scales, meat slicers, and punched-card tabulators.

In the late 1940s, IBM began a difficult transition of punched-card tabulating to computers, led by its CEO Thomas J. Watson. To signify this radical change, in 1947, IBM changed its logo for the first time in over two decades: a simple typeface logo.

In 1956, with the leadership of the company being passed down to Watson’s son, Paul Rand changed IBM’s logo to have “a more solid, grounded and balanced appearance” and at the same time he made the change subtle enough to communicate that there’s continuity in the passing of the baton of leadership from father to son.

IBM logo’s last big change – which wasn’t all that big – was in 1972, when Paul Rand replaced the solid letters with horizontal stripes to suggest “speed and dynamism.”

LG Electronics

LG began its life as two companies: Lucky (or Lak Hui) Chemical Industrial (est. 1947), which made cosmetics and GoldStar (est. 1958), a radio manufacturing plant. Lucky Chemical became famous in Korea for creating the Lucky Cream, with a container bearing the image of the Hollywood starlet Deanna Durbin. GoldStar evolved from manufacturing only radios to making all sorts of electronics and household appliances.

In 1995, Lucky Goldstar changed its name to LG Electronics (yes, a backronym apparently not). Actually, LG is a chaebol (a South Korean conglomerate), so there’s a whole range of LG companies that also changed their names, such as LG Chemicals, LT Telecom, and even a baseball team called the LG Twins. These companies all adopted the “Life is Good” tagline you often see alongside its logo.

Interestingly, LG denies that their name now stands for Lucky Goldstar… or any other words. They’re just “LG.”

Microsoft


Microsoft’s “groovy logo” source: Coding Horror

In 1975, Paul Allen (who then was working at Honeywell) and his friend Bill Gates (then a sophomore at Harvard University) saw a new Altair 8800 of Micro Instrumentation and Telemetry Systems or MITS. It was the first mini personal computer available commercially.

Allen and Gates decided to port the computer language BASIC for the computer (they did this in 24 hours!), making it the first computer language written for a personal computer. They approached MITS and ended up licensing BASIC to the company. Shortly afterwards, Allen and Gates named their partnership “Micro-soft” (within the year, they dropped the hyphen). In 1977, Microsoft became an official company with Allen and Gates first sharing the title general partners.

On to the logo history:

In 1982, Microsoft announced a new logo, complete with the distinctive “O” that employees dubbed the “Blibbet.” When the logo was changed in 1987, Microsoft employee Larry Osterman launched a “Save the Blibbet” campaign but to no avail. Supposedly, way back when, Microsoft cafeteria served “Blibbet Burger,” a double cheeseburger with bacon.

In 1987, Scott Baker designed the current, so-called “Pac-Man Logo” for Microsoft. The new logo has a slash on the ‘O’ that made it look like Pac-Man, hence the name. In 1994 Microsoft introduced a new tagline Where do you want to go today?, as part of a $100 million advertising campaign. Needless to say, it was widely mocked.

In 1996, perhaps tired of being the butt of jokes like “what kind of error messages would you like today?”, Microsoft dropped the slogan. Later, it tried on new taglines like “Making It Easier“, “Start Something“, “People Ready” and “Open Up Your Digital Life” before settling on the current “Your potential. Our passion.”

Oh, one more thing: what was Microsoft’s original slogan? It was “Microsoft: What’s a microprocessor without it?”

… Microsoft’s very first advertising campaign “Microsoft: What’s a microprocessor without it?,” which touted how Microsoft’s line of programming languages could be used to create software that would take advantage of the early microprocessors. The first advertisement in the campaign appeared in a 1976 issue of a microchip journal called Digital Design and featured a four panel black-and-white cartoon titled “The Legend of Micro-Kid.” The cartoon depicted a small microchip character as a boxer who possessed speed and power but quickly tired out because he had no real training. The other character, a trainer complete with a derby on his head and big stogie hanging out of his mouth, related the story of how the Micro-Kid had a great future but needed a manager, such as himself, in order to succeed. (source: PC Today)

Motorola

Motorola, then Galvin Manufacturing Corporation, was started in 1928 by Paul Galvin. In the 1930s, Galvin started manufacturing car radios, so he created the name ‘Motorola’ which was simply the combination of the word ‘motor’ and the then-popular suffix ‘ola.’ The company switched its name in 1947 to Motorola Inc. In the 1980s, the company started making cellular phones commercially.

The stylized “M” insignia (the company called it “emsignia”) was designed in 1955. A company leader said that “the two aspiring triangle peaks arching into an abstracted ‘M’ typified the progressive leadership-minded outlook of the company.” (I’m serious, look up the logo-speak here: Motorola History)

Mozilla Firefox

In 2002, Dave Hyatt and Blake Ross created an open-source web browser that ultimately became Mozilla Firefox. At first, it was titled Phoenix, but this name ran into trademark issues and was changed to Firebird. Again, the replacement name ran into problem because of an existing software. Third time’s the charm: the web browser was re-named Mozilla Firefox.

In 2003, professional interface designer Steven Garrity, wrote that the browser (and other software released by Mozilla) suffered from poor branding. Soon afterwards, Mozilla invited him to develop a new visual identity for Firefox, including the famous logo.

Update 2/7/08: I goofed on this one, guys: it was John Hicks of Hicksdesign that actually made the Firefox logo, designed from a concept from Daniel Burka and sketched by Stephen Desroches – Thanks Jacob Morse and Aaron Bassett!

Nokia


Source: about-nokia.com

In 1865, Knut Fredrik Idestam established a wood-pulp mill in Tampere, south-western Finland. It took on the name Nokia after moving the mill to the banks of the Nokianvirta river in the town of Nokia. The word “Nokia” in Finnish, by the way, means a dark, furry animal we now call the Pine Marten weasel.

The modern company we know as the Nokia Corporation was actually a merger between Finnish Rubber Works (which also used a Nokia brand), the Nokia Wood Mill, and the Finnish Cable Works in 1967.

Before focusing on telecommunications and cell phones, Nokia produced paper products, bicycle and car tires, shoes, television, electricity generators, and so on.

Nortel


Source: Nortel History

In 1895, Bell Telephone Company of Canada spun off its business that made fire alarm, call boxes, and other non-telephone hardware into a new company called the Northern Electric and Manufacturing Company Ltd. It began by manufacturing wind-up gramophones.

In 1976, Northern Electric changed its name to Northern Telecom Ltd. to better reflect its new focus on digital technology. Nineteen years later in 1995, it became Nortel Networks “reflecting its corporate evolution from telephoney manufacturing company to designer, builder, and integrator of diverse multiservice networks.”

Palm


Palm Computing Inc. was founded in 1992 by Jeff Hawkins, who also invented the Palm Pilot PDA. The company has gone through some rough patches in its history: its first PDA called Zoomer was a commercial flop. Next, it was bought out by U.S. Robotics who was promptly sued by Xerox for patent infringement over its Graffiti handwriting recognition technology.

Then it gets convoluted: U.S. Robotics was bought by 3Com, and Hawkins, disgusted with office politics, left to create his own company Handspring. Ironically, not long after he left, 3Com spun off Palm Inc as a separate company. Palm Inc split into two, PalmSource (the OS side) and palmOne (the hardware part). palmOne then merged with Handspring and then bought PalmSource to coalesce back into … Palm, Inc.!

Got that? No? Never mind. All along this journey, they not only change names, but logos as well. Well, at least the graphics designers got some money.

Xerox


Source: Xerox Historical Logos

Xerox Corporation can trace its lineage back almost 100 years ago to the Haloid Company, which was founded in 1906 to manufacture photographic paper and equipment.

In 1938, Chester Carlson invented a photocopying technique called electrophotography, which he later renamed xerography (Carlson was famous for his persistence: he experimented for 15 years and through debilitating back pain while going to law school and working his regular job). Like many inventions ahead of its time, it wasn’t well received at all. Carlson spent years trying to convince General Electric, IBM, RCA, and other companies to invest in his invention but no one was interested.

Until, that is, he went to the Haloid company, who helped him develop the world’s first photocopier, the Haloid Xerox 914. The copier were so successful that in 1961, Xerox dropped the Haloid from its name.

In 2004, fresh from a settlement with the Securities and Exchange Commission for cooking the books, Xerox tried to re-invent itself (complete with a new logo). Four years later in 2008, it tried to get away from the image that it’s only a copier company and adopted a new logo. The good news is people don’t think of copier when they see the new logo. The bad news is, they think of a beach ball.

Crime Does Pay: 6 Criminals Who Lived Very, Very Well

August 26, 2008

Contrary to the old adage, crime really does pay – at least for a while. Here are the stories of 6 rich criminals who, while didn’t know how to live good, they did know how to live very well.

1. John Palmer (ca. 1947 – )

British bad boy John Palmer suckered over 16,000 people in a phony time-share scheme. Currently ranked Great Britain’s wealthiest criminal, having amassed ill-gotten wealth of over £300 million, the notorious Mr. Palmer owns a fleet of cars and several houses all over England, including a huge estate at Landsdown in Bath. He even has a cool nickname: Goldfinger. Which doesn’t mean he has a golden rep.

Palmer defended himself in the fraud trial, lost, got eight years in the clink, and has so far been slapped with fines of £5 million. But this wasn’t his first criminal activity. In 1983 he took part in the U.K.’s greatest-ever robbery, in which he and a partner stole £26 million in gold bullion from a cargo storage company at Heathrow Airport. He smelted the gold himself and was arrested when police found two gold bars, still warm, under his sofa. (Photo: BBC)

2. Pablo Escobar (1949 – 1993)

Picture every stereotypical South American drug dealer you’ve ever seen in a movie. They’re all based in part on Pablo Emilio Escobar Gaviria, head of the Colombian Medellin cartel.

Escobar ran his empire from a lavish pad complete with Arabian horses, a miniature bullfighting ring, a private landing strip, a Huey 50 helicopter, and a private army of bodyguards. Clearly money wasn’t an object for the man. After all, he could afford to pay local authorities $250,000 each to turn a blind eye. Plus, he used his money to build schools and hospitals, and was even elected to the Colombian senate.

But eventually the pressure from authorities, including the American DEA, got to be too much and he turned himself in. Of course, incarceration didn’t stop him from living the lush life. Escobar used some of his loot to convert his prison into a personal fortress, even remodeling all the bathrooms and strengthening the walls.

Once he left, he was a fugitive again, but he wasn’t hard to track down. An obsessive misophobe, Escobar left a conspicuous trail of dilapidated hideouts with shiny, expensive new bathrooms. In the end, the cocaine kingpin was killed when the secret police tracked his cell phone to an apartment, stormed the building, and shot him. Many, many times.

3. Mother Mandelbaum (1818 – 1894)

One of New York City’s earliest criminal godfathers was actually a godmother. Fredericka “Mother” Mandelbaum, or “Marm” to her friends, was the top “fence” (buyer and seller of stolen goods) in post-Civil War New York. From 1862 to 1882, she’s estimated to have processed almost $10 million in stolen stuff.

In fact, Mandelbaum made enough money to purchase a three-story building at 79 Clinton Street. Running her business out of a bogus haberdashery on the bottom floor, and living with her family in opulence and comfort on the top two floors, “Mother” often threw lavish dinners and dances for the criminal elite, which included corrupt cops and paid-off politicos. Ma Mandelbaum could afford to eat well, too, and allegedly tipped the scales at over 250 pounds.

But like any good criminal, she gave back. Well, kind of. Mandelbaum ran a school on Grand Street where orphans and waifs learned to be professional pickpockets and sneak thieves. She was finally arrested in 1884, but fled to Canada with over a million dollars in cash before the trial. She remained there in comfort and safety until her death in 1894.

4. L. Dennis Kozlowski (1946 – )

OK, so he’s not a criminal in the classic “bang bang, shoot ’em up” kind of way. But this scumbag still has it coming. The former CEO of Tyco International, along with CFO Mark Swarz, allegedly embezzled an estimated $600 million from his company, its employees , and its stockholders.

He borrowed $19 million, interest free, to buy a house, a debt that the company then forgave as a “special bonus.” He got an $18 million apartment in Manhattan and charged the company $11 million more for artwork and furnishings, including a $6,000 shower curtain and $2,200 garbage can. He even threw his wife a little 40th birthday soiree on the island of Sardinia that cost the company over two million clams. Special musical guest: Jimmy Buffett.

And while a mistrial was initially declared in April of 2004, the best lawyers couldn’t keep Kozlowski and his cohorts from changing residences from their very big house to the Big House.

5. Leona Helmsley (1920 – 2007)

The famous New York real estate mogul and class-A witch lived the American Dream. Well, except for the whole prison thing.

Leona was a divorced sewing factory worker with mouths to feed before she met and married real estate tycoon Harry Helmsley (the fact that he was already married mattered little).

In 1980, Harry named Leona president of his opulent Helmsley Palace Hotel, which she ruled like a despot. Her tendency to explode at employees for the smallest infraction (like a crooked lampshade) earned her the title “Queen of Mean.” The tyranny didn’t exactly last.

In 1988, Leona and Harry were indicted for a smorgasbord of crimes, including tax fraud, mail fraud, and extortion. And after numerous appeals, Leona served 18 months in prison and was forced to pay the government $7 million in back taxes. A healthy dose of irony for the woman who once said, “Only the little people pay taxes.”

Of course, that doesn’t mean things turned out that badly for poor Leona. Said to be worth over 2.2 billion bucks, the dreaded Ms. H. still owns the lease to the Empire State Building and lives in luxury with her aptly named dog, Trouble.

[Ed. note: Leona Helmsley died in 2007, two years after this article was first published]

6. Al CApone (1899 – 1947)

He killed people. He bought cops by the precinctful. He bootlegged liquor. He ran Chicago like his own personal kingdom. He was damn good at what he did, and he did it with style.

Al Capone (aka Scarface) maintained a swank Chicago headquarters in the form of a luxurious five-room suite at the chic Metropole Hotel (rate: $1,500 a day). And when those Chicago winters proved a little too chilly for him, he bought a 14-room Spanish-style estate in Palm Island, Florida, which he spent millions turning into a well-decorated fortress.

Capone’s total wealth has been estimated at over $100 million (not a penny of which was kept in his vaults, as Geraldo Rivera learned on live TV). Not bad for a guy whose business card said he was a used furniture dealer. Of course, he didn’t pay taxes on any of it, which is what eventually sent him up the river.

The Stories Behind The Top 20 Most Famous Car Logos

August 24, 2008

Audi

The four rings which make up the Audi logo represent the four companies that were part of the Auto-Union Consortium in 1932. They were DKW, Horch, Wanderer and Audi. After the war, the Audi name (which in Latin means “to hear”) disappeared, but in 1965 it reappeared, using the four rings as its logo. The name Audi is also the Latin version of Horch, which in German means also “to hear”.

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BMW

The BMW medallion represents a propeller of a plane in motion, and the blue represents the sky. This is because BMW (Bayerische Motoren Werke – Factories engine of Bavaria) has built engines for the German military planes in World War II.

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Citroen

The symbol chosen by Andre Citroen for his cars comes from the auto industry, the first activity of the french manufacturer. Citroen started by producing tractors transmissions, the two up side down V representing the “teeth” of those wheels.

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Ferrari

The prancing stallion held today by the Ferrari cars has been at the top of a famous logo of an Italian airplanes pilot from World War I, Francesco Baracca, died in a mission. His mother, Countess Paolina, convinced Enzo Ferrari to take on its racing cars the symbol of her son.

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Ford

Harold Wills, a friend of Henry Ford, won lots of money by printing business cards, and when Henry was looking for a logo to mark his car in 1903, Wills was on the job. The type of letter from Ford logo is the same used by Wills on his business cards. The oval appeared in 1912, and the blue background in 1927, along with the launch of Model A.

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Lamborghini

The Lamborghini logo is easy to decipher: it is a reckless bull. Ferruccio Lamborghini loved bullfights. This is shown not only on the logo, but also in the name of Lamborghini models in time. Nearly all cars have held the names of famous bulls or the noble race of the bulls.

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Lotus

The letters at the top of the logo are the initials of the founder of Lotus, Anthony Colin Bruce Chapman. It is not known why Chapman chose the Lotus name for the company. The Green is the famous British Racing Green, worn by British racing cars, and the yellow background symbolizes the sunny days Chapman wanted for his company.

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Maserati

As in the case of Alfa Romeo, the Maserati logo represents the town of the mark. The trident is the traditional symbol of the city of Bologna, where Maserati cars were built before.

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Mazda

The Mazda logo was designed by Rei Yoshimara, the creator of a famous picture for corporations, the V representing a large pair of wings. For Mazda, the logo symbolizes “creativity, sense of mission, delicacy and flexibility characteristic of the mark”.

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Mercedes-Benz

The star in three corners represents the Mercedes-Benz dominance on land, sea and air. The star appeared for the first time in 1909 on a Daimler. In 1926 the crown of laurel was added to mark the union with Benz.. The current logo star in a circle, was used for the first time in 1937.

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Mitsubishi

The three diamonds (or three rhombus) of the Mitsubishi logo represent the propeller of a ship, recalling the first activity of the Nippon manufacturer.

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Peugeot

The lion from the logo of Peugeot comes from the Belfort city emblem, the place where was built the first Peugeot model. The author of the Belfort city logo, Bartholdi, is the same with the sculptor who designed the Statue of Liberty in New York.

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Porsche

The Porsche logo is almost identical to that of Stuttgart city, built on a stallion farm – that explains the horse on the logo. The horns of deer and the red-black stripes came from the flag of Wurtemberg Kingdom (currently the Land Baden-Wurtemberg).

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Renault

The Renault rhombus was in the beginning only a logo located on hood. Behind the rhombus was the horn, and since 1922 the center logo was cut to allow the sound to exit. It started with a circular shape and in 1924 became rhombus.

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Skoda

The feathered arrow mark on the Czech cars logo doesn’t have a specific meaning, besides the fact that suggests speed.

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Subaru

Subaru was the first Japanese brand that has used a name derived from the Japanese language. It refers to a group of six stars of Taurus constellation, and known in Japanese as “mutsuraboshi.” They are the Pleiades.

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Toyota

The Toyota logo contains three ellipses which represent the heart of the customer, the heart of the product and the heart of technological progress and limitless opportunities of the future. In Japanese, “Toyo” signifies abundance, and “ta” means rice. In some Asian cultures, the rice represents wealth.

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Volkswagen

The Volkswagen’s logo story is simple. It contains the letters V and W: “volks” means “people” and “wagen” means “car”.

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Volvo

Volvo means “I go” in Latin, and the circle with the arrow is a conventional sign for iron – the best known richness of Sweden. The circle represents a shield and the arrow is the arrow of Mars, another symbol for iron.

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Most Valueless Currencies in the world

August 11, 2008

Zimbabwe

How would you like to be a billionaire? It’s easy, just move to the countries below.

Zimbabwe as an example, this country’s entire population of over 12,000,000 are billionaires. In fact, many are trillionaires, or even quadrillionaires. in case you’re unfamiliar with “quadrillions,” a quadrillion is a million billion, or a 1 followed by 15 zeros

The least valued currency unit is the currency in which a single unit buys the least number of any given other currency or the smallest amount of a given good. Most commonly, the calculation is made against a major reserve currency such as the euro (EUR) or the United States dollar (USD

As Americans worry about the rate of inflation exceeding 4 percent, we should consider Zimbabwe, where the inflation rate broke the shocking 100,000 percent mark and the country released a 250 million-dollar note (now valued below $4 on the black market). But Zimbabwe’s currency is hardly the only one inflated beyond reason.

Last month, a pint of milk (if you were lucky enough to find one in the store) cost Z$3 billion, a single egg, Z$4 billion. A pound of margarine cost Z$25 billion and a pack of 10 cookies costs Z$19 billion. That was last month. Prices are even higher today.

Vietnam

500,000-dong note. U.S. value: $31.37
An early-1980s U.S. embargo hobbled exports, leading to price controls and the printing of excess currency.
Early this month, the Vietnamese dong rate in the black market has strengthened towards the official level after the government released more dollars into the economy and cracked down on state banks’ currency transactions, which traded at 16,849.50 per dollar.

Indonesia

100,000-rupiah note. U.S. value: $11.05
During the 1997 Asian financial crisis, the rupiah lost 80 percent of its value within months, sparking riots in Jakarta (and soon ending President Suharto’s 32-year rule). From the years 2000 to 2008, the exchange rate has generally been between 8,000 and 11,000 rupiah to one United States dollar. As of June 2008, one United States dollar is worth approximately 9,300 Indonesian rupiah.

Iran

50,000-rial note. U.S. value: $5.35
Since the 1979 revolution, Iran’s inflation rate has hovered around 15 percent, thanks in part to ever-rising oil prices.
Until 2002, Iran’s exchange rate system was based on a multi-layered system, where state and para-state enterprises benefited from the preferred rate (1750 rial for $1) while the private sector had to pay the market rate (8000 rial for $1), hence creating an unequal competition environment. However, in March 2002, the multi-tiered system was replaced by a unified, market-driven exchange rate.



São Tomé (Sao Tome)

50,000-dobra note. U.S. value: $3.47.
This African island nation’s economy is tied to the volatile price of its chief export, cocoa, and is measured against its trading partners’ robust euro.

In late 2000, São Tomé qualified for significant debt reduction under the IMF-World Bank’s Heavily Indebted Poor Countries (HIPC) initiative. The reduction is currently being reevaluated by the IMF, due to the attempted coup d’etat in July 2003 and subsequent emergency spending.

Guinea



10,000-franc note. U.S. value: $2.33
In 2002, the mineral-rich African country refused to implement reforms mandated by the International Monetary Fund; foreign cash dried up, and the central bank printed too much money.
From an average value of about 2500 Guinean francs to the pound sterling during the year 2000, the value of the currency has fallen to a current level (April 2006) of about 8000 to the GBP and about 4500 to the United States dollar.

Laos

50,000-Lao Kip. U.S. value: $5.73

Laos is a landlocked country with an inadequate infrastructure and a largely unskilled work force. The country’s per capita income in 2004 was estimated to be $1,900 on a purchasing power parity-basis.
The Asian financial crisis, coupled with the Lao Government’s own mismanagement of the economy, resulted in spiraling inflation and a steep depreciation of the kip, which lost 87% of its value from June 1997 to June 1999.

Turkmenistan

10,000-manat note. U.S. value: $1.92
Since 1991 – the last year of existence of the USSR – up to 1993 – the last year of rouble zone existence – the rate of inflation was measured in tens, hundreds and even thousands per cent per year.
For the recent years the process of involving internal sources of investment into the sphere of currency turnover and currency accrual has become unprecedented in its scale.

You know you’ve had too much to drink when…

July 9, 2008


Bureaucrats in Australia have drawn up an official list of 39 intoxication symptoms, so that pub owners can tell when patrons are drunk.

Among the 39 steps towards drunkenness are: ‘Bumping into furniture’, ‘sleeping at a bar or table’ and ‘inability to find
one’s mouth with a glass’.

The intoxication guidelines, drawn up by the New South Wales Office of Liquor and Gaming, were distributed to club and pub managers last week.

The department said the guidelines were drafted to help bar staff form a reasonable belief that a person is intoxicated. However, it warned that the list was neither exhaustive nor conclusive.

The 39 signs of drunkenness are:

1. Slurring words
2. Rambling or unintelligible conversation
3. Incoherent or muddled speech
4. Loss of train of thought
5. Not understanding normal conversation
6. Difficulty in paying attention
7. Unsteady on feet
8. Swaying uncontrollably
9. Staggering
10. Difficulty in walking straight
11. Cannot stand or falling down
12. Stumbling
13. Bumping into or knocking over furniture and people
14. Lack of co-ordination
15. Spilling drinks
16. Dropping drinks
17. Fumbling change
18. Difficulty counting money or paying
19. Difficulty opening doors
20. Inability to find one’s mouth with a glass
21. Rudeness
22. Agression
23. Belligerent
24. Argumentative
25. Offensive
26. Bad tempered
27. Physically violent
28. Loud or boisterous
29. Confused
30. Disorderly
31. Exuberance
32. Using offensive language
33. Annoying or pestering others
34. Overly friendly
35. Loss of inhibition
36. Inappropriate sexual advances
37. Drowsiness or sleeping at a bar or table
38. Vomiting
39. Drinking rapidly

Source: http://www.rediff.com///getahead/2008/jul/07drunk.htm