The Socialization of the Supplier Integration Sector

In my daily work as an Industry Analyst and Solutions Advocate, I am finding that the terms, “social supply chain”, and “supplier collaboration” are showing up with increasing frequency. However,  the inclusion of  opportunistic communications supplementing a supply chain infrastructure (these include EDI-based systems such as ordering automation, e-Invoicing, and generic supplier enabling); needs to be well understood and carefully implemented. I am  emphatically a proponent of fresh ideas, and  firmly in favor of  enhancing supplier autonomy.  However,  many B2B platforms, even those developed by experienced companies, fall victim to featuritis – the addition of functions without a concomitant understanding of what or who they serve.  If the industry as a whole simply must conceptualize the benefits of social media on supply chain IT, let’s at least think it through, together. Here are some elementary concepts in brief:

Today, we practice top down supplier management – something that  looks and feels inflexible to most suppliers –

cloudap

“thou shalt use this Implementation Guide”, thou shalt use X12 850 or EDIFACT ###,  with these modifications”. – – -well…that seems at odds with any vendor’s ideal model. The VANs, as a group, have offered communications and connection to ERP and order + shipping. That’s nice. Continue reading

The Strategist: Certification Services for the Cloud – Reliability, Continuity, and Indemnification Against Outages

The Strategist: Certification Services for the Cloud – Reliability, Continuity, and Indemnification Against Outages

Fog envelops the Golden Gate Bridge and approa...Image via Wikipedia

I am going to write about a project that got stranded on my research pile when a well funded client decided that they did not wish to complete the contractual research allocation. The research directives encompassed finding a preliminary business model for underwriting business continuity risk within the rubric of cloud applications and hosting services. A concomitant directive was to research new and existing technological models that would offset the risk of such underwriting programs.

So there was an insurance underwriting and actuarial side, and a real systems side. I was to uncover the insurance industry‘s perspective on underwriting SAAS /PAAS / Cloud, etc. I was to bring to the partner underwriters technical proposals that would offset the risk. The project was on a roll and then still birthed. I think it still has merit. I think that the failure of several VC funded net storage start ups points to this, and that even recent hours-long outages in the ‘clouds of the mighty’, should indicate that this analysis was not a complete waste of time. I certainly uncovered gaping holes in the standard insurance industry lines when underwriting business interruptions and continuity for advanced hosting and SAAS.

I am under NDA as to the identity and specific plans of the client, but what I learned, and the contacts I made, cannot encumber my portfolio of analysis and career endeavors. I have that in writing, and the former client, admitting to the invocation of an early termination clause,  is cool with that – bigger crises on the home front and all.

We analysts wouldn’t be worth much if we couldn’t (at least sometimes) feel things coming ’round the bend. Before the words “economic crisis” became a meme for all subsequent business failures, many esteemed colleagues felt there was excess capital flowing into redundant business models (YASN and YAVSS, for the initiated). This was an evil wind with bad portents. Too much VC cake was handed over to the ‘Valley Undertakers”, i.e., entrepreneurs who had fostered serial failures, break-evens, and maybe one or two small M&A’s, but who in the big picture had no business getting that much access to capital. So that’s the tableaux we have set at around 3/07.

I was working for an R&D lab in South San Francisco when my self-billed services (product strategy under contract) started softening. I was counting on an implied renewal to extend a six month term to 18-24 months. Well, they said they loved me.I was not alone in the exodus from Gateway Blvd. Continue reading

TARP vs. Salem, MA small business loan program

Let us compare what the city of Salem, MA requires from a small business so that we may secure a 5-15k loan:

But First, the TARP for banks that screwed us all, the taxpayers that have no recourse and no veto over how our economy isrun and who gives our tax dollars away. We are all truly, “the forgotten man“, (I love you Amity Shlaes).

Amount of TARP = 700++ bllion

References for receiving TARP funds = must have been criminally negligent in the misuse and abuse of all banking regs and SEC standards.

Application Process for TARP = None, the Fed will come and deliver the money, and you can use the money to pay the executives that were patently culpable for the troubles, violations, and evil.

click through for the actual program docs – they are quite thorough. Continue reading

Get a signature, create a meaningless debt, levy the taxpayer.

Cashflows for a Credit Default Swap.

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Capture a stiff’s signature. The stiff can be poor or an earner, but all were unable to pay the inflated value of the loans (not all were mortgages, some were credit cards, cars, Harleys). When houses, in particular, get too pricey, and wages stagnate, even working people can’t afford them, their down money, or their normal schedule of amortization.

Now sell the debt. Syndicate it. Sell it upstream. Insure it with nothing in the pool to pay out on the defaults. The bank isn’t holding the paper – they don’t give a crap. The investment bank sold the bond, they don’t give a crap. The CDS issuer never gave a crap – for whatever reason.

Who was the only party that gives a crap and can do nothing to stop the locomotive? You, the taxpayer. Believe me people, this was robbery and blackmail of the highest order. You are threatened with financial meltdown, lockup of the credit markets. “if we don’t do this….’

You can’t pay your health insurance, or you have none to begin with. Tough shit. We can’t afford a national plan like oh….(you think I’m going to say, Canada? Wrong) Federal Employees like Senators and Congressmen? You can’t send your kid to college, a good school, because it’s unaffordable and financial aid has been cut to the bone (and you ain;t seen nothin’ yet). Tough shit, we can’t afford it.

The mortgage banking system and the investment banking system are insolvent? That, that we can afford.

Suckers, suckers, ha ha, jokes on you. 15B a month in Iraq plus the aftermath of veterans care for a generation. 80B for Fredfan. 85+B for AIG, and on and on and 700B for all them and no one in particular.

We all could have had the best health care and free higher education. The free market would have been forced into CDS defualt (the best medicine for illiquid paper), house prices would have crashed and burned, and become once more affordable for the middle class working stiff.

Commercial paper, short term working debt, would have become tight for a while. We could have borne the pain. We are in for 40 years of much worse.

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Humor Backed Obligations

2007, Q4, UK's 60 million TV sets (not homes, ...

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The Mortgage Crisis – There is nothing funny about it.

You just cant sell this kind of sophisticated humor in the domestic market. Maybe we could package up an offering of British TV, and sell it as a HBDO (Humor Backed Debt Obligation), and get a credit on each HA HA!

If the humor failed to tickle the American funny bone (Due to most of us Yanks being, you know, stupid and unsophisticated), we could underwrite a HDS (Humor Default Swap), whereby we ship all of the stupid Americans who took bad paper, wrote bad paper, regulated, and defaulted…..send them all to the Kamchatka peninsula (That’s Russia).

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I call out CNBC on the bailout

Fast Money (CNBC)

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The initial overheated tone of this post has been edited to better reflect my points and remove the bad words and unreasoned insults that were placed there in the heat of the moment. I’m glad that the commenter, posing as the real Macke, called me out. AW

10/05/2008 I am removing any references to Mr. Jeff Macke. I am retracting my indictment of him in any way. Instead, I refer people to the CNBC Program Fast Money – to the episode archive where Mr. Macke comments on Senator Shelby’s review of the the first ‘no’ vote on the rescue plan. I will endeavor to get that clip posted. It really set me off. There was no need, however, to put Jeff Macke in the greater mix of my emotions on the dirty deal. I will let the comments stand.

Many financial commentators on CNBC seem to be very free with your money. Some recent comments on Fast Money, tend to say that the Fed and the Treasury should give your money to the banks that screwed us. Despite the fact that professional traders have generally profited and watched while the entire market was leveraged up, that the professional equities trading and management business is taking a beating, (unless the cake is handed out), it is an insult that professional commentators are taking a pro-position on the legislation just passed. Mr. Taxpayer, they got it done. Lambasting Senator Shelby for putting the brakes on this benighted plan to take money out of your pocket and placing it at the disposal of the Fed has me very angry.

The CNBC commentators, it seems to me, dispense superficial commentary. They talk fast and say nothing, covering the same talking points and revealing no insight whatsoever. The only things we hear out of their mouth seems to be positions that bolster what is good for Wall Street.

I usually expect more reasoned argument from Karen Finerman; in the last analysis, however, Ms. Finerman is a trader, and she needs to keep her cake in the oven. Dylan Ratigan seems to be the most level headed of the group, expressing and exposing the counter position sometimes, but overall, he takes the pro position and explains the best he can that this was a necessary deal.

There are other CNBC anchors that take a reasoned approach and who seem to be opposed, if not to the deal itself, to the “hurry up” nature of the deal.

People, we have been taken  down this bad road by the people and pols that actually engineered the seeds of the disaster. These are the selfsame people who could have regulated the processes. Instead, they actually watched as it unfolded over a period of years. This is legacy of the Bush administration, their friends the wealthy, and professional traders. They berate those who dare pour cold water on this abominable deal. This was an insult…and more injurious to you the taxpayer, than doing nothing and letting the market take its toll. Let the private equity market make good what it made bad.

Numerous financial commentators have been so wrong on this subject; This should have been a market driven solution that limited the taxpayer’s participation. Many economists have advocated an open, transparent electronic exchange for the distressed assets. That would be a start. Most of the taking heads on networks like CNBC want the cake to be pumped into the selfsame corrupt investment banks that engineered the crisis, and also want interest rates to be essentially  cut to approach zero. These are all bad ideas.

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Too Big to Fail, too stupid to succeed.

AIG TowerImage via Wikipedia

I would direct America’s small business owners, the bulwarks of our economy of whom most have never taken a dime of government money, to consider my hero, Tom Kloza’s article. Read it, and notice the last line. He is being polite.

Now, our Federal Bank, just as the Reichsbank in 1936, is nationalizing a private insurance behemoth because, ahem, ‘it is too big and important to fail. The US Government’s 79% stake in AIG signals an unprecedented nationalization of private capital – stupid capital that could not succeed on it’s own merits.

You, the now teetering or already gone mid-range American manufacturer of specialized, technical durable goods, are shit out of luck. You were not helped when the government subsidized and deregulated the financial industry, overlooked dirty deeds, and directed capital towards do nothing instruments, rather than incentivizing and strengthening the industries that really create things. You dumb stiffs, you salt of the earth family business that saw the greatest expansion of post WWII wealth. Gone.

You can go out of business, and many of you are long gone and will never read this missive. America was the lender to the world, now we are the debtor. America was the world’s manufacturer, now we mostly have all manufacturing outsourced. Rather than investment and R&D tax credits for streamlining manufacturing for mid-range specialized high-end goods, we pished the incentives away by deregulating and letting the financial industry take all the air out of the market.

Good night America; we have privatized gain, and socialized debt and failure while the base of American small business is burdened, while engineering universities are priced beyond all but the wealthy and the impoverished (one or the other).

Get ready for the breadlines, read, “The Grapes of Wrath”, and get your mind right.

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