Thinkernet Launched

The Thinkernet is Internet Evolution’s moderated blogosphere, where the leading minds of the Internet blog and exchange opinions – as well as interacting with registered members of the Internet Evolution site via message boards.

More than 60 of the Internet’s leading luminaries have signed on to blog on the Thinkernet – including world famous authors, entertainment executives, economists, politicians, CIOs, investors, activists, and Internet entrepreneurs.

Shades of the 1930s

It certainly seems like 1933. As happened 75 years ago, Wall Street—after two terms of a business-friendly Republican president—self-immolated on a pyre of greed, incompetence and excessive optimism. The troubles thought to be contained to a particular sector (stocks then, subprime mortgages now) spread throughout the entire financial system. And with confidence shattered, the federal government stepped in with unprecedented efforts.

The New Deal left behind plenty of important landmarks, from the Appalachian Trail to Hoover Dam. But its financial infrastructure has proved just as important. The Banking Act of 1933 created the Federal Deposit Insurance Corporation and forced member banks to submit to regulation. The Securities and Exchange Act (1934) brought forth a body to oversee the nation's stock exchanges. Later in the decade, Fannie Mae was established to revive the dormant mortgage market.

Fannie Mae and Freddie Mac play a huge role in the mortgage business by lending cash and guaranteeing loans made by others. But with the spread of the mortgage crises their stocks have plummeted in recent weeks, and questions have been raised as to whether the government would do what it implied it would all along when it established the two government sponsored organizations: stand behind their debt. Federal reserve chairman Ben Bernanke, a scholar of the epic financial meltdown of the Great Depression, and Treasury Secretary Henry Paulson gave an emphatic "yes," as they described to occasionally hostile Congress members their plans to allow Fannie and Freddie to borrow money from the Federal Reserve, and to empower the Treasury Department to buy (and buoy) the companies' stock and stand behind their $5.2 trillion in debt.

Read the whole Newsweek article here.

Infectious Exuberance

America, from its inception, was a speculation,” begins the historian Aaron M. Sakolski’s 1932 classic, The Great American Land Bubble. George Washington himself was a land speculator, Sakolski notes, and by Washington’s time it was widely perceived that America would eventually be populated much more densely by vast numbers of immigrants, leading many investors to dream of rapidly rising land prices. Waves of speculative mania swept towns, cities, and regions from the 18th century onward, even along the vast and empty frontier. Up, up went the prices. And then, inevitably, down.

Read Robert J. Shiller's article in The Atlantic: "Financial bubbles are like epidemics— and we should treat them both the same way."

An Amazing 60-90 Billion Euros

European banks may find it necessary to raise between 60 and 90 billion euros (94-141 billion dollars) to shore up their finances in the face of a nearly year-long credit crisis.

The Secret of Bill Gates' Success

Nice homage from the BBC. And by all means also check Fortune, as well as the Reuters coverage of the moment supreme of Bill actually saying goodbye on Friday, Jun 27, 2008. Plus the hilarious official "leaving" video featuring Bono, Clooney, Hillary, Obama and others.

Less jobs & surging fuel prices . . .

. . . they may just be the beginning of bigger problems for the US and global economy.

Rising oil prices combined with falling wages will force governments and citizens to tighten their belts. If inflation strikes, governments and citizens will have little choice but adapt by purchasing smaller cars or bicycling, adjusting eating habits and pursuing a simpler lifestyle.

Whole story here.

New Oil Price Shock

Energy ministers are meeting in Japan a day after a record one-day jump in the crude oil price, to $139 a barrel.

Under pressure from the US, Japan, China, India and South Korea have agreed on the need to end fuel subsidies, blamed for boosting demand.

US energy secretary Samuel Bodman said the price surge was a "shock" but not a crisis, amid fears the oil price spike could help tip some of the world's economies into recession.

Some suggest crude oil could reach $150 a barrel by July.

The Mutually Reinforcing Housing and Oil Shock

The twin shocks from housing and oil have become mutually reinforcing, potentially turning what may be a mild recession into something more threatening. Even those economists who think the U.S. might dodge a recession are concerned.

Crazy prices at the pump are pushing even the survivors over the edge. "They're asking, 'Do I put gas in my car or do I pay this utility bill or do I pay the mortgage?'

Read this BusinessWeek article.

Microsoft's Innovation Engine

"Ultimately the goal of Microsoft Research is to make sure Microsoft is still here in 10 years," says Rick Rashid, charged with overseeing research worldwide. Rashid made the comments as Microsoft offered a glimpse at some of the projects aimed at ensuring the company goes from strength-to-strength, including:
= Programming for kids
= Botnet detection
= LaserTouch
= E-Science in the cloud
= Tablet PC
= Privacy Integrated Queries
= WorldWide Telescope
= Bilingual Built-ins that Break Language Barriers
. . . and more

Shell Energy Scenarios to 2050

In 2100 the world’s energy system will be drastically different from today’s. Renewable and nuclear energy will be more widely used and humans will have found ways of dealing with air pollution and greenhouse gasses. Doesn’t sound too bad does it? But of course much depends on how we get there. Shell have outlined two possible routes in their new Scenarios to 2050: Scramble and Blueprints.

In the first route, Scramble, nations rush to secure energy resources for themselves, fearing that energy security is a zero-sum game, with clear winners and losers. Policymakers pay little attention to curbing energy consumption, supplies run short and greenhouse gas emissions are not addressed until major shocks trigger political reactions. Too little too late? You bet.

The second scenario however, Blueprints, is more positive. Coalitions emerge to take on the challenges of economic development, energy security, and environmental pollution through cross-border cooperation. National governments introduce efficiency standards, taxes, and other policy instruments to improve the environmental performance of buildings, vehicles, and transport fuels.

Services:
= Download the PPT
= Watch our video about the two scenarios, Scramble and Blueprints, with Jeremy Bentham, VP, Global Business Environment
= Download the PDF of the Shell Energy Scenarios 2050
= Download the video transcript
= More

From Anti-Americanism to Post-Americanism

Look around. The world's tallest building is in Taipei, and will soon be in Dubai. Its largest publicly traded company is in Beijing. Its biggest refinery is being constructed in India. Its largest passenger airplane is built in Europe. The largest investment fund on the planet is in Abu Dhabi; the biggest movie industry is Bollywood, not Hollywood. Once quintessentially American icons have been usurped by the natives. The largest Ferris wheel is in Singapore. The largest casino is in Macao, which overtook Las Vegas in gambling revenues last year. America no longer dominates even its favorite sport, shopping. The Mall of America in Minnesota once boasted that it was the largest shopping mall in the world. Today it wouldn't make the top ten. In the most recent rankings, only two of the world's ten richest people are American. These lists are arbitrary and a bit silly, but consider that only ten years ago, the United States would have serenely topped almost every one of these categories.

It's true China is booming, Russia is growing more assertive, terrorism is a threat. But if America is losing the ability to dictate to this new world, it has not lost the ability to lead.

Read Fareed Zakaria's The Rise of the Rest.

The Cognitive Age

Hillary Clinton summarized the narrative this week: “They came for the steel companies and nobody said anything. They came for the auto companies and nobody said anything. They came for the office companies, people who did white-collar service jobs, and no one said anything. And they came for the professional jobs that could be outsourced, and nobody said anything.”

The globalization paradigm has turned out to be very convenient for politicians. It allows them to blame foreigners for economic woes. It allows them to pretend that by rewriting trade deals, they can assuage economic anxiety. It allows them to treat economic and social change as a great mercantilist competition, with various teams competing for global supremacy, and with politicians starring as the commanding generals.

But there's a problem with the way the globalization paradigm has evolved. It doesn't really explain most of what is happening in the world.

We’re moving into a more demanding cognitive age. In order to thrive, people are compelled to become better at absorbing, processing and combining information. This is happening in localized and globalized sectors, and it would be happening even if you tore up every free trade deal ever inked.

The globalization paradigm emphasizes the fact that information can now travel 15,000 miles in an instant. But the most important part of information’s journey is the last few inches — the space between a person’s eyes or ears and the various regions of the brain. Does the individual have the capacity to understand the information? Does he or she have the training to exploit it? Are there cultural assumptions that distort the way it is perceived?

Read it all here.