Thursday, December 6

Pakistan army retakes Swat towns

Hurrah!, wonderful news, Swat towns have been recovered from the clutches of Mullah Radio.

Remember the joke about the dogs who run and bark after moving cars? So say a dog did catch a car, what then?

Doesn’t this remind you of the same situation? What now? What exactly will happen that will avoid Mullah Radio version 2.0 to come back and do exactly the same thing?

Nothing. Zero. Watch and see the very same thing happen again.

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Breathtaking vision to join gas networks of 8 countries!

I personally like people who paint grand visions which are realistic at the same time. When you hear about it, you go, bloody hell, it makes perfect sense and why on earth did nobody think of it before? Its not like proposing a vision to setup holiday camps on venus, but to join the gas networks of 8 countries. For core infrastructure like this, it is a scale matter, and bigger the scale, the better it is. And it provides energy security to Europe by providing an alternative to Russia. I quote:

Mol, the Hungarian oil and gas company facing a take-over bid from OMV of Austria, has proposed a merger of the gas transmission businesses of eight countries in central and south-east Europe to form a new $10bn company that could be floated on the stock market.
The radical project, given the working name of the New Europe Transmission System, would create one of the biggest gas networks in Europe. It would bring together the pipeline systems of Hungary, Romania, Bulgaria, Slovenia, Croatia, Serbia, Bosnia-Herzegovina and Austria.
Mol says unifying the networks would encourage investment, build connections between countries and create a single gas market in the region. It would also help open up alternatives to Russian sources of supply, such as the Nabucco project to bring gas from the Caspian region to the European Union.

Execution will be tough, but hey, so is any great and wonderful thing!, go for it!

Read, wonder and hope!

All this to be taken with a grain of piquant salt!!!

Head of Financial Crime wanted!

I found this job advertisement heading absolutely side-splittingly funny!, imagine? advertising for a head of financial crime????

The mafia has gone all corporate, just read this bit

At the highest level you will be responsible for the effective formulation and delivery of the financial crime strategy for the UK-based business including implementation and presentation to senior board members.

All this to be taken with a grain of piquant salt!!!

Thomas Friedman's take on Iran's take on USA

I like Thomas Friedman, he does the vision thing. And his latest column is just brilliant. The short term thinking on part of the politicians is just breathtaking. Read and weep!

December 5, 2007
Op-Ed Columnist

Intercepting Iran’s Take on America

There are two intelligence analyses that are relevant to the balance of
power between the U.S. and Iran — one is the latest U.S. assessment of Iran,
which certainly gave a much more complex view of what is happening there.
The other is the Iranian National Intelligence Estimate of America, which —
my guess — would read something like this:

To: President Ahmadinejad

From: The Iranian Ministry of Intelligence

Subject: America

As you’ll recall, in the wake of 9/11, we were extremely concerned that the
U.S. would develop a covert program to end its addiction to oil, which would
be the greatest threat to Iranian national security. In fact, after Bush’s
2006 State of the Union, in which he decried America’s oil addiction, we had
“high confidence” that a comprehensive U.S. clean energy policy would
emerge. We were wrong.

Our fears that the U.S. was engaged in a covert “Manhattan Project” to
achieve energy independence have been “assuaged.” America’s Manhattan
Project turns out to be largely confined to the production of corn ethanol
in Iowa, which, our analysts have confirmed from cellphone intercepts
between lobbyists and Congressmen, is nothing more than a
multibillion-dollar payoff to big Iowa farmers and agro-businesses.

True, thanks to Nancy Pelosi, the U.S. Congress decided to increase the
miles per gallon required of U.S. car fleets by the year 2020 — which took
us by surprise — but we nevertheless “strongly believe” this will not lead
to any definitive breaking of America’s oil addiction, since none of the
leading presidential candidates has offered an energy policy that would
include a tax on oil or carbon that could trigger a truly transformational
shift in America away from fossil fuels.

Therefore, it is “very likely” that Iran’s current level of high oil
revenues will last for decades and insulate our regime from any decisive
pressures from abroad or from our own people.

We have to note that obtaining open-source intelligence in America has
become more difficult, because traditional news shows have become more
comedic and more comedic news shows more authoritative.

For instance, CNN’s nightly business report is hosted by a man named
“Dobbs.” Real journalists come on his show and present transparently
propagandistic stories about immigration and trade and then he fulminates
about them, much the way our ayatollahs used to do about “Satanic Americans”
on late-night Iranian TV. So viewers have no real idea what’s happening in
the U.S. economy.

Meanwhile, at 11 p.m., something called “The Daily Show,” which appears on
Comedy Central, has fake journalists presenting what turns out to be the
real news.

Yes, our last I.N.I.E. in 1990 concluded that after the collapse of
communism, America was on track to become the world’s sole superpower and
most compelling role model for Muslim youth — including our own. We were
wrong. We now have “high confidence” that America is on a path of
self-destruction, for three reasons:

First, 9/11 has made America afraid and therefore stupid. The “war on
terrorism” is now so deeply imbedded in America’s psyche that we think it is
“highly likely” that America will continue to export more fear than hope and
will continue to defend things like torture and Guantánamo Bay prison and to
favor politicians like Mr. Giuliani, who alienates the rest of the world.

Second, at a time when America’s bridges, roads, airports and Internet
bandwidth have fallen behind other industrial powers, including China, we
believe that the U.S. opposition to higher taxes — and the fact that the
primary campaigns have focused largely on gay marriage, flag-burning and
whether the Christian Bible is the literal truth — means it is “highly
unlikely” that America will arrest its decline.

Third, all the U.S. presidential candidates are distancing themselves from
the core values that made America such a great power and so different from
us — in particular America’s long commitment to free trade, open immigration
and a reverence for scientific enquiry wherever it leads. Our intel analysts
are baffled that the leading Democrat, Mrs. Clinton, no longer believes in
globalization and the leading Republican, Mr. Huckabee, never believed in

U.S. politicians seem determined to appeal either to the most nativist
extremes in their respective parties — or to tell voters that something
Americans call “the tooth fairy” will make their energy, budget, educational
and Social Security deficits painlessly disappear.

Therefore, we conclude with “high confidence” that there is little
likelihood that post-9/11 America will, as they say, “get its groove back”
anytime soon.

Who needs nukes when you have this kind of America?

God is Great. Long Live the Iranian Revolution.

All this to be taken with a grain of piquant salt!!!

Scaling a flue epidemic

I talked earlier about how financial institutions would react to a flu or terrorist outbreak on say the communications networks. But you might very well wonder what is the probability of such a thing happening? Well, here's one opinion.

Read and Worry

THE Government's chief spook and threat watcher has warned that a repeat of the 1918 Spanish flu pandemic, which killed up to 100 million people, was "real". Head of the Office of National Assessments Peter Varghese said changes in the flu virus, and in the human and animal populations it could effect, raised the threat of a fresh outbreak.

"The economic, social, political and security impacts would be very large,"Mr Varghese said. The 1918 pandemic claimed up to 20 per cent of people infected by the virus and about half those were aged between 20 and 40 years.

The ONA boss told a security in government conference in Canberra yesterday that the list of issues affecting the nation's security until 2025 was "long and will keep growing". He played down the threat from climate change in the pre-2025 period, but said resource security, including oil supplies, water scarcity and fish stocks, would be massive preoccupations of governments.

"This will heighten tension among major and emerging powers, but shouldn't by itself cause war," he said. And he predicted that Australian forces would be in Afghanistan for at least 10 more years. Meanwhile ASIO boss Paul O'Sullivan used his speech to warn that "non-state actors" such as al-Qaeda would continue to be a major threat.

He said that since 9/11 al-Qaeda had created new connections between its hard core frontier militants and urban radicals throughout the world. "The existence of intricate, dynamic networks linking frontier militants . .. and small groups of urban radicals . . . has globalised insecurity in a new way," Mr O'Sullivan said.

He said al-Qaeda and the global jihad Islamic extremist movement in general had shown that it was possible for networked extremists to operate simultaneously across the globe from war-torn nations to western capital cities.

"If this situation continues the future we face will be one where significant national security threats coexist with . . . relative stability and order." The ONA boss predicted terrorism would remain a destabilising force for at least a generation and Islamic extremism would be a threat in our region for a decade.

ONA was set up in 1977 to provide the prime minister of the day and his national security ministers with independent assessments of global threats. In just his second public speech in 18 months, Mr Varghese highlighted the emergence of China and India as key strategic and military drivers for the next 20 years.

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Wednesday, December 5

You dont have to be Muslim to be an Islamic Finance Scholar

This is the key, people tend to think that only Muslims can become Islamic Banking Scholars. That is not the case, and anybody can become an Islamic Banking or Finance Scholar. Here are more details.

Islamic Finance is on the growth path, there is a big paucity of Islamic Scholars and the current way of training them is way too complicated. You see, if you start putting together a strong bachelor degree or a professional degree (like CFA or a CA degree), there is no reason why students cannot do this degree and become a scholar. And with the CIMA degree, one can get this certification and start advising funds after some more training.

And this is going to be a growth industry, oil is not going to get cheaper and faith is going to get stronger. So the Muslim wealth funds and the Islamic investors are just going to grow and grow. They need support and since existing Muslim educational institutions are unable to supply the scholars, outside firms will step in.

If you think that people would not invest in funds that have been checked by say a Christian scholar of Sharia, they just need to have a front man who is Muslim, just like they have in Saudi Arabia and elsewhere. So the chap is happy, he just rubber stamps the decisions, and the financial institution wins, the investor is happy, the industry is happy. Everybody is happy as larry! :)

All this to be taken with a grain of piquant salt!!!

Educating Girls makes casteism go away

May this scrouge of casteism disappear! Educate the girls, get them creating wealth and setting up their own businesses, make them mobile and work all over India and the world and all this rotten groupism and casteism will go.

I am very happy with these results.

But of more concern is the issue with the language schools. Perhaps one should considere multi-lingualism as the standard rather than starting from a one language presumption!! In other words, start with say 3 languages from childhood schooling.

Read and Applaud and hope more girls are educated!

A study suggests that girls are proving to be quicker learners than

NEW DELHI: As the processes of globalisation strikes deeper roots in
India, girls are proving to be quicker learners than boys. And,
these are not girls who have benefited from a privileged upbringing,
but those from more modest, urban working-class homes where
traditional caste identities are still quite strong.

These young girls, authoritative studies reveal, have been breaking
several social retardants and surging ahead in education and,
empowered by their skills, are making job and marriage choices which
are helping shake off their dependence on caste rules and the weight
of family tradition.

An extensive study published in The American Economic Review ,
conducted by economists Kaivan Munshi of Brown University and his
Yale University counterpart Mark Rosenzweig, shows that a
traditional institution like caste (jati) has been impacted by
schooling, career and marriage choices of boys and girls in
the "new" economy.

Its study areas are the dynamic urban context of Mumbai's Dadar for
1980-2001, and families of the metro's 'labour market'. These form
its fairly large sample size of 4,945, with upper-castes accounting
for 17.5%. The response to the inquiries reveals that the premium on
an English language education has gone up steeply. For boys it went
up from 15% in 1980-90 to 24% in 1990-2000. But it really shot up
for girls from near zero to 27% in the same period.

The study also found that English schooling contributed to increase
in inter-caste marriages as 31.6% of such respondents married
outside jati, several of whom were girls, as against only 9.7% of
those who studied in the Marathi medium. Among siblings, who were
subject of the study and who are currently employed, 13.9% of those
educated in English work outside Maharashtra. For those who studied
in Marathi, the percentage is just 2.1.

With marriage outside jati and out-migration seen to weaken caste
ties and networks, an exposure to the modern economy can produce
uneven results. Those with English education get better jobs and
this can result in differences between boys and girls of the same
jati and also challenge social networks. As the economists
conclude, "The forces of modernisation could ultimately lead to the
disintegration of a system that has remained firmly in place for
thousands of years."

The findings reveal that whether families put their children in
English or Marathi-medium schools may well be a deciding factor in
the trends uncovered by the study. These could form the basis of
similar inquiries in larger Indian cities. English school passouts
are placed well for the expanding white-collar job market, while
those from Marathi schools are more likely to be headed for the blue-
collar labour market.

The study showed that while a majority of boys from working-class
families still attend Marathi schools, more and more girls from the
same background are headed for English schools, increasingly making
a difference in their attitudes to social and personal matters.

The reason is not far to seek. Historically, women did not form part
of Mumbai's labour market — the mills, factories, dockyards or
construction sites. "Historical occupation patterns kept in place by
caste-based networks continue to shape occupational choice, and
hence schooling choice, for boys in the new economy," says the
study. "In contrast, lower-caste girls, who historically kept away
from labour market and so, have no network ties to constrain them,
take full advantage of opportunities that become available in the
new economy."

According to the study, growing disparities in school choices within
the traditional jatis not only point to a new gender equation in
boys and girls availing of emerging economic opportunities, but also
threatens the stability of the caste system, based on marriages
within the same sub-castes. Significantly, the change in favour of
girls took place despite English school fees being significantly
higher than those in Marathi schools (Rs 480 versus Rs 200 at 1980
prices) and other expenses at Rs 1,100 versus Rs 710, respectively.
This also suggests that parents of these girls were prepared to pay
more for their education. The area, moreover, had only 10 English
schools, performing better in terms of pass percentages, against 18
of the Marathi medium.

All this to be taken with a grain of piquant salt!!!

Foreign companies flee US bourses at record level

Remember what I said about regulation in the USA? Well, see one of the problems of that.

Read and weep!

A record 12.4% of foreign companies listed in New York have chosen to delist this year, as a committee of prominent academics and financiers endorsed by US Treasury Secretary Hank Paulson said the country's public equity market has continued to decline in competitiveness.

The number of delistings on the New York Stock Exchange has increased from 12 in 1997, 3.9% of all foreign listed companies, to 30 last year which was a rate of 6.6%, according to a new report entitled “The Competitive Position of the US Public Equity Market” by the Committee on Capital Markets Regulation.

All this to be taken with a grain of piquant salt!!!

Body Ritual among the Nacirema

Body Ritual among the Nacirema
Horace Miner
American Anthropologist, New Series, Vol. 58, No. 3. (Jun., 1956), pp.

"Professor Linton first brought the ritual of the Nacirema to the
attention of anthropologists twenty years ago (1936:326), but the culture
of this people is still very poorly understood. T h w r e a North American
group living in the territory between the Canadian Cree, the Yaqui and
Tarahumare of Mexico, and the Carib and Arawak of the Antilles. Little is
known of their origin, although tradition states that they came from the
east. According to Nacirema mythology, their nation was originated by a
culture hero, Notgnihsaw, who is otherwise known for two great feats of
strength-the throwing of a piece of wampum across the river Pa-To-Mac and
the chopping down of a cherry tree in which the Spirit of Truth resided."

All this to be taken with a grain of piquant salt!!!

More on Muslim Prayers

More on my previous post on Muslim prayers in Hospitals while ill.

[4.43] O you who believe! do not go near prayer when you are Intoxicated until you know (well) what you say, nor when you are under an obligation to perform a bath-- unless (you are) travelling on the road-- until you have washed yourselves; and if you are sick, or on a journey, or one of you come from the privy or you have touched the women, and you cannot find water, betake yourselves to pure earth, then wipe your faces and your hands; surely Allah is Pardoning, Forgiving.

And you dont even have to face Mecca because:

[2.115] And Allah's is the East and the West, therefore, whither you turn, thither is Allah's purpose; surely Allah is Amplegiving, Knowing.

All this to be taken with a grain of piquant salt!!!

More clownish behaviour on part of Yvonne Ridley

This post just cracked me up!!! But I would encourage Yvonne Ridley to keep on going, she is the best weapon that modern age has against the silly Islamists!

All this to be taken with a grain of piquant salt!!!

Muslim Brotherhood's Hard-Line Platform is actually ok!

People are getting quite upset about the Muslim Brotherhood's Political Platform but I am far more sanguine about it. I quote:

The Muslim Brotherhood has laid down its first detailed political platform, which would bar women and Christians from becoming president and establish a board of Muslim clerics to oversee the government, reminiscent of Iran's Islamic state.The platform has dismayed secular reform activists who have cautiously hoped the Brotherhood was becoming more moderate and who supported the movement in the face of an unprecedentedly tough government crackdown against it.

Not a problem. Head of State restrictions apply everywhere, in the UK, you need to be of a particular family, while you have to be born in USA to be the president (which causes Arnie to rule himself out and huge opposition). Good reasons, but so do the Brothers. Its just based upon their understanding of Islam but so what?

As for having a Council of appointed or elected experts, what do you think the House of Lords, Rajya Sabha or US Senate are supposed to do? The very same thing, be the guiding hand on the elected branch of the country. The process's are different but the concept is the same.

But I like it, you see, they have underwritten the seeds of their own destruction because of two reasons. First is that they are willing to submit to civil society and second they have a large minority to handle. Both will blow the fiction of a monolithic islam as was shown in iran. There you have clear fissures and clarity that whenever people with too much religion on their brains get into power, all their common sense and literacy dribbles out, look at india, uk, iran, usa....So I am looking at the day after the night after the day the brotherhood comes to power. Yes, it might well happen that they might change their stripes and convert into hardline Islam and become an Iran. Yes? So? We have lived with Iran for 30 years, what's wrong with living with a hardline Egypt?

Oh! if you do think so, then better get in the visit to the pyramids before they get into power because they might well do a Bamiyan on them.

Also see my previous detailed essay about the brotherhood here.

All this to be taken with a grain of piquant salt!!!

Sarko thumbing nose to rest of Europe

I just laughed in the morning when i read this. Sarko congratulating Putin on his victory, which was despite severe electoral irregularities. That made most of the other European Leaders look po-faced. Very amusing. Just shows up the impotence of the "soft power" of European Leaders! And these very same European leaders will go whining and crawling to the Russian bear when they need oil and gas. So who is really the person who is being a hypocrite?

And guess what? UK asked for an investigation into electoral abuses. Now they have a cheek, to ask for this right during the time that we have one of the biggest party funding crisis underway. Truly, they are hypocritical

All this to be taken with a grain of piquant salt!!!

Another example of stupidity

Now see this story? The entire case revolves around a wrong undertanding of prayers. You do NOT have to do all the five prayers if you are ill and for people to think that they have to pray, then no, that is not what is required. See here

4:102 Thus, when thou art among the believers [129] and about to lead them in prayer, let [only] part of them stand up with thee, retaining their arms. Then, after they have finished their prayer, let them provide you cover [130] while another group, who have not yet prayed, shall come forward and pray with thee, being fully prepared against danger and retaining their arms: (for) those who are bent on denying the truth would love to see you oblivious of your arms and your equipment, so that they might fall upon you in a surprise attack. [131] But it shall not be wrong for you to lay down your arms [while you pray] if you are troubled by rain [132] or if you are ill; but [always] be fully prepared against danger. Verily, God has readied shameful suffering for all who deny the truth!

And to do something like this and then to have stories published simply fans islamaphobia. Stupid idiots, why dont they simply ask somebody who knows the facts before launching into something stupid like this?

All this to be taken with a grain of piquant salt!!!

Look forward to the Muslim Peers going to Iraq to free Brits

We saw the first video footage of one of the 5 British hostages in Iraq. As I mentioned earlier, I presume the 2 Muslim Peers will now go to Baghdad or Basra to negotiate the release of these 5 British Hostages as our Foreign Office has proven to be spectacularly useless? And waging war against innocents is against Islam, no? Would we end up having similar demonstrations? No, doesnt matter, all it matters is that the government be consistent and secular. Otherwise this kind of hypocritical behaviour will be exposed.

What will the Foreign Secretary say if the daughter of the televised man asked about the Muslim Peer's participation in negotiations and compare that to Teddy Bear Teacher?

All this to be taken with a grain of piquant salt!!!

To the Swiftest Go the Spoils: Case Studies in Retail Loan Origination

An interesting case study on how automation has caused improvements in service, profitability and coverage for a simple instrument such as Loans. Because Loans are such simple instruments, it naturally tends towards a scale or volume business (similar to that of credit cards, FX or even cash equities). So the bottom line here is that if you build a BIGGER and BETTER mousetrap, they will come. I quote:

“Automation can bring numerous benefits to the consumer lending process. These benefits encompass both the bank and the consumer and can contribute directly to the bottom line and the customer experience,“ says Jacob Jegher, coauthor of the report and senior analyst. “Winning banks will embrace automation and loan origination systems in order to make faster and more consistent decisions, lower costs, increase productivity, automate processes, reduce errors, and enhance customer service.”
“Bank systems are a quagmire of complexities and inefficiencies. Lending systems and the associated processes are certainly no exception. Banks need to invest in identifying inefficient processes to improve reaction time, customer service, and employee productivity,” says
Bart Narter, coauthor of the report and senior analyst. “Even with the present volatility in the US lending market, opportunity still exists. Banks need to focus on installing systems that will be with them for the long term—systems that will allow banks to respond to market demand, customer requirements, and operational requirements.”

People need to think more about latency, about having open links (to other systems such as online loan price comparison sites), about exception management systems, to have margin matricies on a dynamic basis (think on a non-linear basis!), to have multiple cross subsidy aspects built in, to look at loan returns on a multi event basis (marriage, divorce, job movements, etc.), etc. etc. But good and interesting report.

Read and consider!

All this to be taken with a grain of piquant salt!!!

Converts and FX both heading for record volumes

Ha!, fun times are here again and as you can see, all the world's investors are rushing to protect themselves. Both the convertible and FX volumes are through the roof! I quote:

ICAP, the world’s premier interdealer broker, announced on Tuesday that average daily electronic broking volumes in spot foreign exchange had reached an all time high of $244.6 billion in November. This represents an increase of 61 percent on November 2006 ($151.5 billion) and compares to the previous record of $241.5 billion per day achieved in August 2007.

New issues of convertible bonds have surged to record levels this year, with volumes accelerating sharply since the start of the credit crisis as investors seek the safety of an instrument that is used more widely in volatile markets. Convertible bonds are protected on the down side because they guarantee a fixed rate of interest, while at the same time can be swapped into the issuing company’s shares. Nearly $170bn in convertible bonds have been issued this year – a record for the first 11 months of a year, according to Dealogic, the data provider. The figure is also close to surpassing the record-breaking full year of 2003, when volumes hit $172bn

All this to be taken with a grain of piquant salt!!!

Kamakura Troubled Company Index Makes Largest Jump Since September 2001

This index is one of the most interesting indices that you can come across, and it has some pretty smart math behind it. About 3-4 years or so ago, I checked it out and I can but imagine that it has gotten even better.

I quote:

Kamakura Corporation announced today that its monthly index of troubled public companies showed the greatest one month increase since September 2001. The percent of public companies classified as troubled jumped 2.4% in November to 10.4% of the public company universe. In September 2001, the index had leaped 3.0% to reach its all-time high of 28.0% of the public company universe. The index is now a full 5.0% higher than its all time low 5.4%, a level reached in April and May, 2006. Current credit conditions are still better than 63.3% of the monthly periods since the start of the index in January, 1990. This is down sharply, however, from a 95.2% rank in July. The average value of the index has been 13.4% over the last 18 years. Kamakura defines a troubled company as a company whose default probability is in excess of 1%. The index now covers more than 20,000 public companies in 29 countries using the fourth generation version of Kamakura's advanced credit models.

So read and worry!

All this to be taken with a grain of piquant salt!!!

How best to take out a terrorist cell? Mathematically speaking

Now this is a very interesting discussion. I have talked about what to do after a terrorist leader gets taken out here and about targeted assasinations but this is usage of mathematical theory to target other links of a cell. I know the American Army is using graph theory in Iraq to try to understand the tribal and al-queda links and then try to target the weak or important points suitably. One day when i have more time, i will review this and get back if possible!. Havent worked in this area of mathematics before.

But remember, this will only apply to proper groups, for people who run terrorist attacks on their own, such as the recent Glasgow Attacks, this kind of theory does not work against Lone Wolf Attacks.

Mathematicians Offer Help in Terror Fight
By Matt Crenson, AP National Writer

PISCATAWAY, N.J. (AP) -- A small group of thinking men and women convened at Rutgers University last month to consider how order theory -- a branch of abstract mathematics that deals with hierarchical relationships -- could be applied to the war on terror.
It almost seems ridiculous for people who inhabit a world of concept lattices and partially ordered sets to think they can affect a war that is being fought on the streets of Baghdad and in the remote mountains of northern Pakistan. But the war on terror is also fought in cyberspace, and in the minds of people from Lahore to Los Angeles. Mathematicians are right at home in such abstract realms.
"It's not just theoretical," said Fred Roberts, director of the Center for Discrete Mathematics and Theoretical Computer Science, the Rutgers research institute where the conference was held.
Terrorism takes brains. You don't need political influence, military might or economic resources to plant bombs or take hostages; but without brains, terrorism is nothing more than random violence.
Consider al-Qaida's attack on New York City and Washington, D.C., three years ago. It required a force of only 20 men armed with box cutters, yet it was so brilliantly conceived, meticulously planned and keenly attuned to global politics that it changed the world.
"Terrorism is a thinking man's game," said terror expert Gordon Woo.
Hollywood Inspiration

Mathematician Jonathan Farley of the Massachusetts Institute of Technology said he was inspired to organize the meeting by the movie ''A Beautiful Mind.'' The film tells the story of mathematician John Forbes Nash, whose work in game theory found application in Cold War military strategy, international trade and the auctioning of broadcast frequencies by the Federal Communications Commission.
"I'm a pure mathematician, so I'm completely useless for the most part,'' Farley said. "But it would be nice to take some of what we do and make it useful for some people -- maybe even lifesaving."
The new Homeland Security Institute has a mandate from Congress to do just that, said Gary G. Nelson. A senior researcher at the quasi-governmental institute, he attended the conference in hopes of finding research projects for the institute to support.
Some ideas sounded promising, Nelson said. The most intriguing were those that could help intelligence agencies boil down the vast amounts of data they contend with.
Other proposals were ''a pretty long logical distance'' from the real world. And not everything was easy to understand, he said, even for a systems engineer.
Theoretically, Farley said, abstract math could help intelligence officers figure out the most efficient way to disable a terrorist network.
Eliminate the Middleman
Say it's cheaper or more practical to go after a terrorist cell's "middle management" rather than its leadership. How many of those lieutenants would you have to remove in order to disrupt communication between the top dogs and the field operatives? Are there one or two key individuals whose capture would completely cut off the chain of command?
Order theory is all about such questions.
"This helps them decide where to spend the money," Farley said.
Of course, many times the organizational structures of terrorist groups are unknown. Mathematical techniques could also be applied to that problem, by using computer programs that comb through giant databases looking for connections between individuals, locations or events. For example, a program might discover that everybody involved in a given attack attended the same London mosque. Or it might find large numbers of e-mail messages between members of one terrorist cell in Germany and another in the United States, suggesting that they may be working together.
Such data mining techniques are nothing new. But the explosion in computing power over the past few years has spurred innovation in the field.
Jafar Adibi, a computer scientist at the University of Southern California, is developing ways to find hidden links between known terrorists and their as-yet-unknown confederates.
"You're trying to detect major groups of these bad guys," Adibi said.
The technique relies on having an initial group of known terrorists. Then it analyzes things those known terrorists have in common with other people in the database, such as phone calls, places of worship, political affiliations or blood relation.
The program concludes that anybody who has enough connections of the right kind with a known terrorist probably is one also.
Adibi has tested his program using a database built from newspaper accounts and other publicly available information. He labels 20 percent of a terrorist group's members as ''known'' and challenges the program to find the rest. Right now, the system misses 20 percent of the remaining members, and three of the 10 people it does identify as ''bad guys'' aren't actually terrorists.
Adibi said he hopes to improve those numbers a bit. But even so, programs like his could help focus anti-terror efforts on the most likely suspects. Mass detentions by law enforcement authorities have often snared too many innocent people, Woo said. Britain has arrested more than 600 people on suspicion of terrorism since the Sept. 11 attacks, and convicted only 15 of them. By some counts, the United States has detained more than 5,000 foreign nationals under the provisions of the Patriot Act, alienating them and their families.
"Part of the war on terrorism is winning hearts and minds," said Woo, an analyst in the London office of Risk Management Solutions. The Newark, Calif.-based consulting firm assesses catastrophe risks for the banking and insurance industries.
Minds are the specialty of Vladimir Lefebvre, a cognitive scientist at the University of California in Irvine. The Russian-born researcher has spent his career developing ways of reducing human decision-making to mathematical equations. The work stems from a top-secret Soviet research project that Lefebvre worked on during the 1970s.
"I can compute feelings," he said with a grin.
Betting on being human
Lefebvre's ideas are so obvious that you wonder if he might be kidding. Every person, he argues, has a view of the self that he or she uses as a tool for making decisions. That view can be influenced by the outside environment.
So in principle, there ought to be things we can do to make terrorists feel less sure about themselves or less ardent in their beliefs. The right strategy might even make them think of themselves as something other than terrorists.
Lefebvre believes human decision-making is so straightforward that simple equations can describe how an individual's behavior arises from his or her self-image as it is shaped by other people and the environment.
Stefan Schmidt, a New Mexico State University researcher who has worked with Lefebvre, offered a hypothetical example. Suppose, he said, terrorists were considering three points of entry into the United States -- one in the Pacific Northwest, one in the Southwest and one in the Northeast. Looking at the level of security on the various borders, and considering other factors such as remoteness, terrorists might decide on the Southwest as the best place to cross.
Assume that border agents, on the other hand, are heavily guarding the Northeast border. They would benefit by making the Southwest seem more heavily patrolled than it really is, and the Northeast appear relatively unprotected. If they did a credible job, the terrorists would incorrectly choose the most secure border as their best bet and run a much higher chance of being caught.
Conceptually, this kind of reasoning is no different from military strategy. If you can plant an inaccurate idea in your opponent's head, you will have an advantage on the battlefield.
A Combination of Brilliance
But actually doing that -- at least for the time being -- requires a combination of brilliance, instinct and luck that few people possess. Lefebvre would reduce the process of outwitting your opponent to a computer program.
In some ways, researchers at Carnegie Mellon University have done just that. Computer scientist Kathleen M. Carley heads a lab that tries to simulate all kinds of social groups, including terrorist organizations.
The lab has built simulations of Hamas and al-Qaida by dumping newspaper articles and other publicly available information about the organizations into a computer database. A program then takes that information and looks for patterns and relationships between individuals. It finds weak and strong figures, power brokers, hidden relationships and people with crucial skills.
Then another program can predict what would happen if a specific individual were removed from the organization. After Israel's assassination of Hamas founder Sheikh Ahmed Yassin in March, the program correctly predicted he would be succeeded by hard-liner Abdel Azziz Rantisi.
Three weeks later Israel assassinated Rantisi as well. Carley's lab predicted that Hamas political director Khaled Mashaal would succeed him, and posted its pick on the Internet.
This time, Hamas declined to reveal who had taken power for fear he too would be assassinated. But eventually it became known that Mashaal was indeed the one.
At that point, Carley said, ''we were told to quit putting such predictions on the Web'' by federal officials.

All this to be taken with a grain of piquant salt!!!

Actual video of a female suicide bomber!

Holy Moly!

Check out this video!

All this to be taken with a grain of piquant salt!!!

Educational Challenges in the World!

I have been waiting for this report. And this is not good reading. I remember reading in yesterday's FT something along the lines of the fact that the top performers in Finland and South Korea go into higher education and out of those top performers, you take 5-10% into being teachers. Compared to that, Saudi Arabian teachers come from the bottom 10% of the graduates. So no wonder it sucks. India is still doing well as being a teacher is still respected but in the UK, the situation is dire. I quote:

OECD’s latest PISA survey of the knowledge and skills of 15-year-olds shows that some countries have seen significant improvements in student performance since 2000. Korea further increased its strong reading performance between 2000 and 2006 by 31 score points, the equivalent of almost a school year, mainly by raising the proportion of top-performers. Poland increased its reading performance by 29 score points over the same period. Mexico and Greece saw significant improvements in mathematics performance between 2003 and 2006. However, across the OECD area as a whole learning outcomes have generally remained flat, while expenditure on education in OECD countries rose by an average of 39% between 1995 and 2004.

But as I already mentioned, this government is useless and its minister is a moron. When said that UK is 24th in the world for math skills, 17th for reading, do you know what he comes back? "Results were pleasing" adding "numeracy and literacy are the foundations of a good education. Please fire him. Please send him to Finland or South Korea. Please send him to Saudi Arabia, Please do something with him. Please. This Minister is like Robert Mugabe. Mugabe killed his country with stupid economic policies. Jim Knight and his government are killing the population with stupid educational policies. They have presided over the greatest fall in educational standards since testing began. Read above, South Korea presided over an improvement of almost 1 school year. We have dropped 15 odd places. What on earth is he pleased about? I am running out of adjectives to swear at this stupid idiot of a Minister.

I am definitely voting Conservative. Liberal Democrats do not have policies and Labour are pathetic in execution. Not much choice left, is there?

Read and Weep and worry!!

Asia-Pacific teenagers top OECD tests
By David Turner, Education Correspondent

Taiwan has topped a prestigious international league table of 15-year-olds’ mathematical ability, vaulting ahead of far richer countries.
The island state’s performance in the Organisation for Economic Co-operation and Development’s Pisa tests of mathematics and reading carried out in 2006 and released on Tuesday, reinforces its reputation as a high-tech Asian tiger. Taiwan also earns fourth place in the parallel Pisa science rankings, published last week, although in reading it is a mere 16th.

Asia-Pacific’s strong showing is one of the clearest themes of the Pisa survey, which was carried out in 57 countries that account for 90 per cent of the world gross domestic product. The region contributes five of the top 10 in the mathematics and science league tables, and four of the top 10 in reading – thanks to strong contributions from Taiwan, South Korea, Japan, Hong Kong, Macao, Australia and New Zealand. Mainland China did not participate.
But the league tables show Finland is the most consistently high performer – repeating its sterling performance in the last survey in 2003. It comes top in science, and second in maths and in reading – where it is bested only by South Korea.
The US, the world’s largest economy, is below the OECD average in science and maths, and fails even to make the tables in reading because a misprint in the test confused too many students and invalidated the results.
The UK is around the OECD average in reading and maths, but a little above average in science.
Germany, whose poor performance in the first Pisa tests back in 2000 provoked anguished soul-searching among its politicians, performs respectably rather than outstandingly. It is around the OECD average in maths and reading, but a little above in science. France achieves the average in all three categories, but no more.
The OECD is rather shy of making comparisons with previous surveys, despite hundreds of pages of analysis of the tests. But it does conclude with disappointment that performance in reading has remained “broadly similar” between 2000 and 2006. The report concludes: “This, in itself, is noteworthy because most countries have significantly increased their investment in education in recent years.” But South Korea and Poland are shining exceptions: their reading results have improved strongly, both in absolute terms and relative to other countries.

All this to be taken with a grain of piquant salt!!!

China and India resist emissions cap calls

And so they should, the literally breathtaking effontry of saying that "we mucked up the planet in our rise to development, but since we have done so, we will stay at our level of development, but we will tell you chinese and indians to stay at your level of development as well". Yes? no, that's hypocrisy and would not fly.

Read and be offended!

All this to be taken with a grain of piquant salt!!!

Private sector expands UK role

Its full of good news today!, now we see the private sector expanding its role in public service provision. More and more is good. Where you do not have scale or competitive advantage, why deliver it yourself? Bring more on, I say.

Read, applaud and egg on.

All this to be taken with a grain of piquant salt!!!

London open to Sovereign Wealth Funds!

Absolutely right and I think this is a good thing that the government is doing. We have to be open, welcoming and regulate with a light touch!

But they have to be transparent otherwise they will hurt London as BCCI did. See what I said before. Also quote

Concerns about sovereign wealth funds’ poor transparency and their close links to national governments have triggered a protectionist backlash against them, such as the one that forced China’s CNOOC to abandon its bid for Unocal in the US.
Temasek, of which the chief executive is also the wife of Singapore’s prime minister, ran into trouble with the Thai authorities over its purchase of telecommunications from Thailand’s former prime minister.
In the UK, Sir David Walker, author of guidelines on transparency for private equity, has called for sovereign wealth funds to sign up to his code of conduct. He secured such a commitment from the Qatari Investment Authority before it abandoned its bid for J Sainsbury, the supermarket chain.

Read and Support

All this to be taken with a grain of piquant salt!!!

Single EU Financial Services Regulator?

Well, in principle, I am ok with this and frankly, I would be surprised if we did not have a single EU financial regulator in say 10 years. But yes, slowly does it, financial regulations, when enacted in a rush, always throw up problems, and unfortunately at the time when you are least (politically, economically and financially) able to handle it (such as this spectacularly stupid and incompetently handled Northern Rock Crisis). But execution is KEY!

But we need to look at how MiFID has worked out, where there is flexibility, those locations have won. Many jurisdictions have no idea what they have implemented. Many financial institutions do not know what they are faced with and they are heading towards extinction if they do not change their business models. For those who think that this will not impact, see what London faced after the big bang. There are no british investment banks left but it is now a major financial centre. Similarly, most of the european countries will end up with sales offices while the production, engineering and major distribution centres will be in say Paris, London or elsewhere.

Read and resolve to fix this.

All this to be taken with a grain of piquant salt!!!

Facts and changes of opinion

John Maynard Keynes was reputed to have said, ""When the facts change, I change my mind -- what do you do, sir?" Needless to say, when facts change, one is considered to have common sense to change one's mind, otherwise one is considered to be a homar.

But when you read this, you really wonder how on earth did this chap get elected? I quote:

President George W. Bush said on Tuesday that US policy on Iran would remain unchanged despite the revelation that Washington no longer thinks that Tehran is developing nuclear weapons. Mr Bush said this week’s US National Intelligence Estimate, which found that Tehran halted its nuclear weapons programme in 2003, had not altered his opinion of the threat.

Sighs, perhaps it is a good thing that he is leaving. I wonder if they can put in some common sense tests on all US Presidents?

All this to be taken with a grain of piquant salt!!!

Corporate Governance by the open-toed sandal brigade

Now this was very amusing. The Chairman of Guardian Group and Land Securities and , and ex chairman of Marks and Spencer and Gartmore (some doughty members of the British Corporate World) is moaning about the fact that the open-toed sandal brigade is thinking purely on board structure and pay while fund managers dont really care.

I quote:

Mr Myners said portfolio managers who make investment decisions often seemed at odds with corporate governance specialists. “I frequently find when I talk to institutional investors that the portfolio manager, who I regard as the owner of the shares of the company on whose board I sit, is very content with what we are doing, but there’s somebody in the basement who is responsible for governance who has got an issue, and there’s a dislocation between the two.”

His criticisms echo those made this year by company directors, notably Terry Smith, chairman of Collins Stewart, and comments made in April by Sir Christopher Hogg, chairman of the Financial Reporting Council, which monitors the combined code. Sir Christopher admitted to concerns that fund managers regarded the job of monitoring governance as a “costly, distracting and irrelevant chore”.

I personally think this is wrong. Whether or not you are a fund manager, it does not matter. You are a shareholder or a shareholder representative. And you have to take your stance on corporate governance. And for you to say that its, "costly, distracting and irrelevant chore" simply means that you are abdicating your responsibility to make sure that you as the owner makes sure that the management are delivering value. But if you simply pick and choose, leap from one firm to another, then you arent really a shareholder, are you? You are simply a locust. And I use the word with due reason.

This is why I hate the word "activist investors". So looking after my money is not being active? What kind of stupidity is that? passive investors have another name, they are called as "idiot investors" or "investors who are looking to get fleeced".

So I disagree with Mr. Myners on one small aspect but the fact that there is a disconnect is a worry.

Read and Think

All this to be taken with a grain of piquant salt!!!

Tuesday, December 4

Muslim Publishing Houses in India

Now people keep on talking about madrassah education but i never thought about it from this perspective, what about the Muslim Publishers? Well, they are important as well, because in a country like India, their output will be heavily influencing the reading, schooling and education behaviour of their compatriots as well as others who might be purchasing their output. So this report from that doughty Yoginder Sikand is really eye-opening and tells you huge amounts on the challenges facing Indian Muslims.

I wonder if it is possible for the Minorities Commission to push for grants for publication of books? Or award scholarships and book writing grants? Or perhaps tie up with some public sector banks to provide special help to small and medium publishing houses? That can definitely help. The authors also talk about other solutions.

Read and hope!

Muslim Publishing Houses in Delhi

Naseem ur-Rahman & Yoginder Sikand

[This is the final report of a study conducted by the
authors, commissioned by SARAI, Delhi]

Delhi, for various historical reasons, is the hub of
the Muslim publishing industry in India. Most of the
prominent Muslim publishing houses in the country are
located in Muslim-dominated parts of the city, notably
in Old Delhi, Okhla and Basti Nizamuddin. Literature
produced by these houses are found in Muslim-owned
bookshops across the country and even abroad.

Our study looked at various aspects of these
Delhi-based Muslim publishing houses, based on a
survey of some fifteen publishing firms. We noted
significant similarities common to almost all the
publishing houses we studied and would like to
describe them here.

Firstly, most of these firms are family-run
businesses, some having been in existence for two,
three or even four generations. Even the few that are
registered as limited companies are actually family
run businesses. Decision-making is thus concentrated
in the hands of a single proprietor or family of

Secondly, almost all these firms specialize in Islamic
literature and other such issues that would be of
concern particularly to Muslim readers alone. This is
of course true for the Urdu publishing houses, the
language now being almost a wholly Muslim preserve,
but also in the case of those firms that have now also
started publishing in Hindi and English. They assume,
therefore, basically a Muslim readership with a
primary interest in Islam. Some of these houses have
started producing literature on Islam aimed at a
non-Muslim readership, seeing them as potential
converts and/or seeking to disabuse them of what are
seen as misunderstandings about Islam or to offer
alternate understandings of key Islamic themes and
issues which are hotly debated in the media, such as
women’s rights, terrorism and so on.

The vast majority of the titles of the books published
by the firms we surveyed related to various aspects of
Islam, including the Quran, the Hadith or Prophetic
Traditions, Islamic Jurisprudence, Islamic Rituals,
Islamic History and so on. In short, the discourse
that they articulate is a normative one, seeking to
define what ‘true’ Islam means and what this demands
of those who are presented as ‘true’ Muslims, although
these are variously defined.

In addition to religious themes, a smaller number of
these firms also specialize in publications dealing
with Urdu literature and Indian Muslim history. This
again reflects the fact that they aim essentially at a
Muslim readership.

Conversely, we noted just one publishing house that
also produces literature on issues related to the
actual, existing or empirical social conditions of the
Indian Muslims. In this case, the quality of the
publications, in terms of their content, left much to
be desired. This paucity of literature on the
empirical conditions of the Indian Muslims, in
contrast to the abundant literature on Islam and
Muslim history, reflects several important features of
the Indian Muslim publishing industry, as our
interviews with several publishers and others

Most of the authors whose works are published are
madrasa-trained ulema, who have no exposure to modern
social sciences. They have been trained in the
traditional way, having received an education that
focuses mainly on the Islamic scriptural and
jurisprudential tradition, which provides the prism
through which they are taught to see the world. The
solutions to the various ills facing the community,
they believe, is by encouraging Muslims to abide
closely by the dictates of the faith, as they
interpret them to be. Only then, it is argued, might
God change their conditions. Success in the eternal
life after death, they stress, is more important than
success in this temporary world. Hence, they argue,
learning about and faithfully abiding about what Islam
says is of principal concern. This explains the
overwhelming focus on religious themes, often narrowly
defined, in the content of most of the firms we

A related point is that of market demand. Since
religious books are what sells, many publishers
admitted, this is what they publish. Scholars who have
done empirical research on Muslims generally write in
English and prefer to get their work published by
non-Muslim-owned publishers, who are seen as more
‘reputable’ in academic circles. Unlike before 1947,
when considerable Muslim-related social science
literature was produced in Urdu, today Urdu has become
the preserve largely of the ulema of the madrasas,
owing particularly to the Government’s discriminatory
policies related to the language. This is reflected in
the fact that a considerable majority of Urdu titles
are penned by the ulema and are about issues related
to Islam, which is what the ulema claim to specialize

Numerous publishers we interviewed lamented the fact
that there is almost no Muslim institution in the
country that commissions research on Muslim social
issues, the findings of which could be published for a
wider audience. This they attributed to various
factors, such as the paucity of Muslim social
scientists, and non-Muslim social scientists
interested in Muslim-related issues, the fact that
those who do such research prefer to have their works
published by other, what they see as more
‘respectable’ publishing houses, and the perceived
insensitivity of Muslim social, economic and political
elites towards the problems facing the Muslim masses.

Interestingly, most of the firms we surveyed produced
not Islamic literature plain and simple, but, rather,
literature that reflected one or the other sectarian
version of Islam, reflecting the fact that the lived
Islamic tradition is not a monolith, but, rather, is
defined variously. Almost all the publishing houses we
examined are associated, formally or informally, with
one or the other Muslim sects or maslaks, such as the
Jamaat-e Islami, Ahl-e Hadith, Barelvi and Deobandi,
among the Sunnis, and the Ithna Asharis among the
Shias. The literature that they produce is geared to
proving the claim that their own particular sect is
the only ‘true’ Islamic one, the implication being
that the other sects are not really ‘Islamic’ enough
or, in fact, are ‘un-Islamic’ and even ‘anti-Islamic’.
Consequently, scores of books published by several of
these firms seek to denounce, in no uncertain terms,
rival Muslim sects as firmly outside the pale of
Islam. Such literature plays a major role in
sustaining and promoting inter-sectarian rivalries.

Publications produced by these firms, particularly in
Urdu, are often much cheaper than English books,
reflecting the fact that the market for these
publications is characertised by a considerably lower
purchasing power. In turn, this reflects the fact of
general Muslim economic marginalization. Lower prices
often mean poor paper and printing quality, but a
number of firms are able to maintain good quality
standards yet keep their costs low by getting
subsidized by various Islamic charitable
organizations, or, for instance, in the case of
certain publishers associated with the Ahl-e Hadith
sect, the Indian counterpart of the Saudi ‘Wahhabis’,
by getting funds from the Gulf.

In terms of payments to authors, it was felt, so
several authors told us, that the firms paid very
little, sometimes nothing at all, and even sometimes
took money from authors to have their works published.
This was said to be yet another reason for what was
perceived as the relatively low quality of many of
their publications, because they are unable or
unwilling to attract better authors who would expect
more remuneration.

Some publishers and authors we met offered
constructive suggestions for improving the quality of
the publications of Muslim-owned publishing houses.
These include:

1. Broadening their focus from their present concern
almost wholly with religion to include the actual
social conditions of the Muslims, thereby being able
to play a more constructive role in promoting social
2. Publishing literature of interest not just to
Muslims alone but to non-Muslims as well.
3. Encouraging Muslim organizations to consider the
setting up research centres to focus on Muslim social
issues, this research then being made available in the
form of publications.
4. Commissioning and publishing Urdu translations of
works in English on Islam and Muslims by scholars,
both Muslims and non-Muslims [Presently, most of the
translations that these houses publish are of works by
Arab ulema].
5. Encouraging Urdu newspapers to include a book
review page. Presently, few of them publish book
6. Promoting Islamic literature penned by non-ulema,
including ‘progressives’’, ‘modernists’ and women, and
also on themes of contemporary import and debate (such
as women’s rights, relations with non-Muslims, peace,
war and terrorism).

Findings that emerged from our study were presented in
the form of six postings to the SARAI mailing list.
These also appeared in various websites and some of
them were published in Muslim periodicals. In the
course of our study we collected considerably more
material, which we hope to write-up in the form of
articles in the near future.

All this to be taken with a grain of piquant salt!!!

Monday, December 3

Green IT - some very interesting things happening out there

Now I wouldnt dream of understanding 90% of what they are saying in here but seems like they are doing well with their Green IT business. Much more to be done! :)

Title: Turning Green
Date: 1 November 2007

As banks make their IT more energy efficient, new opportunities emerge.
By Joe Morgan

Unless you have been living on another planet, you know that environmental issues have been thrust into the center of the political debate on both sides of the Atlantic. Banks and major corporations can no longer afford to pay lip service to the concerns of environmental activists. Former US vice president and environmental campaigner Al Gore's acclaimed book and documentary, An Inconvenient Truth, has made the dire consequences of global warming part of the mass consciousness.

The fact that green issues have become a hot political topic has not gone unnoticed on Wall Street. Lehman Brothers in March established an internal Global Council on Climate Change led by Theodore Roosevelt IV, great-grandson of the US president. JPMorgan Chase has built up a "renewable energy portfolio" which comprises about $1 billion of equity investments in 26 wind farms. Bank of America has pledged to not only cut back its own emissions by 7 percent but also to reduce greenhouse gas emissions from its client activity-specifically, from its investments and loans to energy and utility companies-by 7 percent.

Also turning to green, Citigroup, which plans a 10 percent reduction in its greenhouse gas emissions by 2011, earlier this year announced a $1 billion investment in the Clinton Climate Initiative (CCI), a foundation set up to tackle climate change.

Shareholder activism, campaigns by environmental groups and influential reports such as the UK government-commissioned Stern Review on the Economics of Climate Change are prompting banks to cut down on carbon emissions and implement eco-friendly policies.


Bob Giffords, an independent analyst and consultant for the European banking sector, says the tide of environmentalism sweeping across capital markets firms is not just motivated by a desire to save the planet. Green banking also presents profitable opportunities for financial institutions. "Where there is a problem to be faced, there is money to be made," says Giffords. "Politicians are finding that they are pushing on an open door when they pressure banks to do something [about environmental issues]. The banks are beginning to see good commercial reasons for wanting to pursue these policies."

Nowhere is this more apparent than in the push to make datacenters more energy-efficient, which plays a central part in banks' green IT strategies. Banks need little persuading to reduce power consumption in datacenters, already creaking under the strain of providing high levels of computational power. According to IBM, many major financial institutions in the City of London are experiencing "thermal issues"-which can result in servers breaking down as a result of overheating. New York City's power grid is also under increasing pressure to supply Wall Street firms with the power they need, say analysts at Massachusetts-based technology research firm Forrester.

Server energy use doubled between 2000 and 2005, says California-based microprocessor vendor Advanced Micro Devices (AMD). A survey published earlier this year found that in 2005, total datacenter electricity consumption in the US, including servers, cooling and auxiliary equipment, totaled about 45 billion kilowatt hours, resulting in utility bills of about $2.7 billion. Total datacenter power and electricity consumption for the world costs $7.2 billion annually, according to AMD.

"Besides being good citizens, banks actually need to optimize their carbon footprint. For example, in datacenters, as hardware capital costs go down, energy costs become significant. This is particularly the case with grid technology, which has serious power and cooling challenges," says Giffords. "A modest grid might have 1,000 or more CPUs/cores. Cram it all into a few racks and you get a lot of heat. The largest grids across multiple centers might now be from 10,000 to 20,000 nodes or greater, with forecasts rising to much higher levels. Inevitably, that will eat up power and generate heat."


Of every dollar spent on computer hardware, about 50 cents is spent on energy, according to analyst firm IDC. This is expected to increase to 71 cents over the next four years. And some of that is wasted. A report last year from Santa Fe-based IT consultancy Uptime Institute found that US datacenters were cooled nearly twice as much as necessary.

Banks and corporations are showing signs of moving toward more energy-efficient practices. A report from San Francisco-based datacenter manager Digital Reality Trust earlier this year found that many firms' "detailed" green datacenter strategies include using recycled materials, efficient power usage, purchases of renewable power such as wind and solar energy, high-voltage alternating current system enhancements, power generation on site using fuel cells and gas engines, and using carbon credits to offset the level of datacenter by-products.

"Green energy-efficient datacenter trends have been adopted more quickly and more deeply than previously believed. Even for people who have been tracking green IT trends closely, many of the report's metrics will be surprising," says Jim Smith, vice president of engineering for Digital Reality Trust.


Firms are taking their strategies beyond computers and servers-the primary focus of green initiatives in the past-and into the domain of facility design and operations. Some capital markets firms are even relocating their datacenters next to flowing water, since water is a better coolant than air.

"Our energy consumption is roughly a third heating, a third cooling and a third lighting," says Jon Williams, head of group sustainable development at HSBC. "We have a specific datacenter strategy aimed at designing the buildings in a way that makes them as energy efficient as possible."

The London-based global banking giant will invest $95 million in its global energy efficiency program over the next five years in a drive to reduce its energy consumption and make it more efficient. Vendors like IBM, Hewlett-Packard, and Sun Microsystems are eager to offer solutions that reduce power consumption in datacentrers. "The energy issue is a long-term problem," says Rich Lechner, vice president, IT optimization and system software at IBM. "But the idea of actively managing energy has just emerged over the past six months."

IBM's "Project Big Green" for datacenters was launched earlier this year. The initiative includes a new global "green team" of more than 850 "energy-efficiency" architects. IBM says it has received strong uptake from financial institutions, though vendor officials decline to name them.

"We help clients redesign their datacenters, either from scratch or in some cases customers are looking to upgrade their datacenter because it is eight years old and not able to handle the density of computing that we have today. Or they may just be looking at retrofitting certain elements," explains Lechner.

The project comprises five steps. First, IBM evaluates an organization's facilities and proposes an appropriate solution before building or updating an energy-efficient datacenter. Virtualization and special purpose processors are then installed across a firm's IT infrastructure along with power management software and liquid cooling solutions, both in and outside of the datacenter. IBM estimates that its clients can cut energy consumption by almost half on an average 25,000 square foot datacenter. This can be done by consolidating x86 servers for Windows and Linux, or Unix servers, to other platforms such as IBM servers with the vendor's Power processors.

To help achieve its aim of reducing corporations' energy consumption, IBM is tapping into cell processor technology used in computer game consoles such as Xbox 360 and PlayStation 3, which are more efficient at carrying out certain applications than conventional quad-core processors. "Special logic built into cell processors makes them ideal for certain classes of calculations. It can be 50 times more efficient than generic Intel processors. A customer can deploy applications on one-fifth the number of systems that would normally be required." IBM says capital markets firms in the US and Europe are using cell processor technology to more efficiently perform functions that require high amounts of computational power, such as Monte Carlo simulations for complex calculations for structured derivatives products.


IBM uses virtualization technology-where servers host multiple operating systems and applications-to enable firms to identify "hot spots" within their datacenter network. Banks can then shift applications between datacenters to lightly used machines. "Organizations can move workloads among datacenters around the world in response to a power shortage or potentially to take advantage of low utility rates across time zones. As the sun sets, the utility rates will decline in one location. Work can then be moved from other financial centers to exploit this lower rate of usage," Lechner explains.

Capital markets firms are also turning to virtualization software offered by technology vendors like VMware and Virtual Iron to reduce datacenter use. Credit Suisse, which has begun evaluating IT managers according to how well they have helped reduce energy use, has implemented a far-reaching virtualization initiative using technology from vendors such as VMware to achieve an average 15-to-one compression ratio in server use.

David Reilly, head of technology infrastructure services at Credit Suisse in New York, says: "Utilization is up. Power consumption growth has been reduced. The need for ever more datacenter real estate is slowing and time to market for our application developers is improved because provisioning lead times are better with virtualization."

However, not all eco-friendly measures utilize cutting-edge technology. Using blocks of ice to provide air conditioning in buildings first emerged in Florida in the 1800s, when a physician blew air over ice to cool hospital rooms. The practice in vogue as firms attempt to reduce the emissions produced by conventional air conditioning systems.


Credit Suisse this year installed an ice cooling system to cut down on emissions from its offices at the historic MetLife Building in New York City. The firm must cool 1.9 million square feet of office space in the tower. Three main cooling rooms, which house chilling machines and 64 tanks that hold 800 gallons of water each, are housed in the basement of the building. The system is equal to planting 1.9 million acres of trees to absorb carbon dioxide from electrical use for a year, according to the New York State Energy Research and Development Authority. Goldman Sachs and Morgan Stanley have installed similar ice cooling systems.

"If you take the time to look, you can find innovative ways to be energy efficient, be environmental and sustainable," says William Beck, the head of critical engineering systems at Credit Suisse in New York.

But the green banner can also be waved when implementing far less popular policies. For example, reducing air travel can be labeled as a green initiative when it may just be about optimizing costs. "There may also be serious operational risks in having many executives in the air all the time," says Giffords.

The global reach of major financial institutions undoubtedly swallows up a sizeable amount of energy consumption. Organizations such as HSBC-which consumes 2 billion kilowatt hours of energy a year, three-quarters of which stems from electricity usage along with fuel and air travel-are eager to highlight the steps they take to implement green policies. For example, HSBC has installed NightWatchman software in its offices, which reduces the power consumption of inactive PCs after 7 p.m. The escalators in the banking giant's London headquarters are also programmed to slow down during off-peak times. Even the logo at the top of the building is dimmed until evening falls.

HSBC is also using technology to cut down on air travel. The banking giant has installed Cisco TelePresence, video conferencing technology that simulates the environment of a real board room to such an extent that participants can see one another's eye color. HSBC held its first boardroom meeting this summer using the video conferencing technology, which saved executives from globetrotting to the bank's headquarters in London's docklands.

Deutsche Bank also uses video conferences and conference calls to reduce its carbon footprint. The German bank has also undertaken a series of environmentally friendly initiatives, including regularly improving technology to make energy use more efficient, campaigns to make staff aware of reducing energy consumption and purchasing "energy efficient" office equipment.

Hanns-Michael Hoelz, global head of sustainable development at Deutsche Bank in Frankfurt, says the bank has made efforts to promote environmentally friendly investing. DWS Investments, the fund management subsidiary of Deutsche Bank, offers private and institutional investors "sustainability orientated" investment opportunities, which include its DWS Klimawandel (Climate Change) fund. "Investors can thus decide whether they want to include both traditional investment criteria and ecological, social and sustainability-orientated aspects in their investment strategy," says Hoelz.


Investing in eco-friendly projects is also gaining traction among capital markets firms. "We are now one of 54 banks covering over $50 billion of project lending a year. That is about 85 percent of the global project finance market. We lend directly to a project and our repayment comes from the cash flows of that project. So we could be financing a gas-powered power plant or a wind farm. You have a direct connection with the project, which means you can do environmental due diligence directly on the project quite specifically," explains Williams.

However, lending to environmentally friendly projects accounts for just 1 percent to 2 percent of HSBC's total loans and Williams says that the bank's environmentally friendly policies are influenced by the reputational risk of being associated with environmentally unfriendly practices. "It doesn't take much bad news around the brand for that brand's value to start eroding," he says.

The push toward environmentally friendly policies at capital markets firms is influenced by a host of dynamics, trying to save the planet being just one of them. Some scientists have predicted that many of the world's major cities could be flooded by the end of the century as a result of global warming. "Think of it this way: Climate change will absorb huge amounts of capital both to reduce the industry's environmental impact and eventually to rebuild flooded cities," says Giffords. "Mobilizing capital is what banks do best." And that means capital markets firms will play a central role in dealing with the new opportunities and threats that come with the risk of environmental catastrophes.


© Incisive Media Investments Ltd 2007

All this to be taken with a grain of piquant salt!!!

Terrorism / Influenza - impact on networks

An interesting column on how an influenza simulation in NY threw up issues with network congestion and management. Firms have to be up to date with their homeworking strategies but also, the attempts by the government to push for super-fast broadband has to be considered within this angle. If something like this happens in the UK, we will be sorely hit.

But I have some comments: network congestion might well happen, but looking at what happened in 9/11, the level of trading falls off dramatically as people look to close out their books and do not take any further customer orders. They might also just go back to relying on their capital and take any pending orders on the firm's books rather than risk taking it to market and find that its lost in the ether or worse, the price formation process has had some eddies and the prices is stuffed.

So the situation is not that much of an issue, but what might be required to think about is the capability of the firm's capital to handle what amount of trading? Also, if that is the case, then the sales trader will be pushing trades away and will need better voice rather than data connectivity, while on the other hand, the market facing trader might as well as take the trades on his own book.

Still read and consider!

Nothing but Net?
For years, the financial services industry has led the way when it comes to business continuity, participating in a number of industry-wide tests. The most recent US test, conducted by the Financial and Banking Information Infrastructure Committee (FBIIC) and the Financial Services Sector Coordinating Council (FSSCC), simulated a global H5N1 influenza pandemic. By Rob Daly

The sponsors are still poring over about 300,000 data points gathered during the three-week test, but the early results are interesting.

The good news is that Wall Street can withstand a pandemic. The industry's performance was unfazed by an absenteeism rate of 25 percent and only saw performance degradation when the absenteeism rate approached 49 percent-a higher rate than estimates by the World Health Organization (WHO) and the US Centers for Disease Control and Prevention.

Most participating firms, 54.5 percent, tackled their business and regulatory obligations by setting up their employees with telecommuting capabilities. The next most popular response, 40.8 percent, was dividing business groups into a number of units and dispersing them geographically.

An interesting aspect of the test was the amount of stress a pandemic would have on other critical infrastructure, such as the Internet. During one portion of the test, residential Internet throughput was reduced by half due to network congestion, which reduced the real-time performance of market data feeds by several minutes and caused intermittent outages of non-real-time applications, such as e-mail.

This level of network performance doesn't bode well for traders. Operating their bandwidth-hungry trading and market data applications over a residential Internet connection would be like sucking a beach ball through a garden hose. Traders would need to come into the office to take advantage of their firms' financial extranets to get low-latency market data.

However, two types of traders could make the work-from-home strategy work: those who operate in the over-the-counter world and rely solely on voice brokerage, where latency isn't as critical as in electronic execution; and algo-based traders, whose systems are co-located within the market centers.

Since their low-latency connection would be a local network hop or less away from the market, their traffic wouldn't compete with other network traffic from the outside world. It would also mean that algo traders would have to turn over more control to the local servers and keep trader-to-algorithm communication to a minimum.

Local fat-client applications would work the best in this environment compared to applications incorporating service-based architecture or relying on Citrix connections that depend on network availability. But how many firms have taken reduced bandwidth availability into consideration in their business continuity plans?

Of course, overcoming the network latency issue is just one hurdle to trading from home. Firms need approval from the proper regulatory bodies and must be willing to pay the additional licensing fees to application and market data providers to set up the necessary remote trading positions.

To keep trading desks up and running, working from home just doesn't seem to be a practical solution. Instead, firms should plan to keep their traders close and be prepared to feed and lodge them for extended periods.

All this to be taken with a grain of piquant salt!!!

A visionary talks about the future of Finance

I indirectly worked for Till Guldimann before and the man has the brain the size of a planet. But read his interview, this is very thought-provoking.

Title: Taking Stock of the Future
Date: 1 November 2007

Industry veteran and visionary Till Guldimann's job is to figure out how the rapidly evolving global market structure and technology advances will converge to change our world.
By Donna Miskin

You could say that Till Guldimann became SunGard's guru for long-term strategy the old-fashioned way-through acquisition. But he has certainly earned his standing as thought leader and visionary-as evidenced by his roles at major industry events-through his long experience in banking and technology.

A native of Zurich, Guldimann trained as an engineer. While studying, he turned his hand to brain research-"using early computers to analyze brainwaves," he says-and did a stint at the National Institutes of Health in Washington, DC. After earning his MSEE, he worked a year in Japan as a software analyst for NEC before deciding that engineering was not his bliss and heading for an MBA from Harvard Business School. He then joined JPMorgan and became an investment banker for 21 years. At JPMorgan, he was a lending officer in Zurich and New York, then headed the consulting group in London, moved to head of trading in Hong Kong during the Thatcher years and then returned to New York to become chairman of the Market Risk Committee and head of the Global Research Group. There he developed the bank's risk management systems and the RiskMetrics initiative.

In 1995, Guldimann left the bank to join Infinity Financial Technology, a derivatives trading and risk management software startup in the San Francisco Bay Area. The company went public in 1996 and was bought by SunGard in 1998. The rest is recent history.

At Sibos in October, Guldimann led the futuristically focused panel, "The 2013 landscape: will you still be a part of it?" The group included Anders Reveman, an independent consultant with the European Central Bank; Chris Foskett, managing director and group head, financial institutions group at Citi; Adrian Farnham, COO of Turquoise; and Don Donahue, president and CEO of the Depository Trust & Clearing Corporation (DTCC).

Some panel predictions included that on the exchange and depository front by 2013 Europe will have two to three clearinghouses but only one settlement provider. However, expect local depositories to be maintained to accommodate different laws, cultures and languages. Exchanges will continue to consolidate with NYSE-Euronext, Nasdaq, Deutsche Börse and the London Stock Exchange and likely Shanghai forming hubs or groups of markets. At least some of the alternative trading systems spawned by the Markets in Financial Instruments Directive (MiFID) will make an impact. Brokers will continue to have a role as intermediaries between issuers and investors. Technology will continue to provide a competitive edge as reliance on it grows. And despite the recent turmoil in the credit markets, further securitization is accelerating.

Since Guldimann's forte and job is keeping an eye on the future-trying to anticipate change and the moves industry segments will make to embrace it-Waters has had a chat with him on more than one occasion in recent months, including in Boston at Sibos. Here are some takeaways from those conversations in his own words.

More on the markets

Comparing all the sizes of the markets to the size of the economy, we can see where they will grow in the next five years. An interesting aspect is the size of the derivatives market. The trading revenues of the new CME Group are larger than those of the Nasdaq and the New York Stock Exchange (NYSE) combined, not including Euronext. And don't forget over-the-counter (OTC) derivatives. The derivatives market is huge and will grow faster than the cash markets. Overall, most of the trading volumes are now in the G7 countries, but a large part of the gross national product (GNP) growth will come from the emerging markets.

Seventy-five percent of the $6 billion in trading revenues globally is now consolidated with five exchange groups: CME-CBOT (derivatives), NYSE-Euronext (cash and derivatives), Nasdaq-OMX (cash and derivatives), LSE-Borsa Italiana (cash), and Deutsche Börse (cash and derivatives), with the rest scattered around a plethora of smaller exchanges. Given the growth of the Shanghai stock market with an estimated $1 billion in revenue in 2007, there is no question that Shanghai will evolve into one of the big financial centers of the world.

Exchange consolidation

We have seen massive consolidation of the exchanges but we still have another 200 exchanges out there and most are really small. It's the depository and the clearing side that needs to consolidate. There are over 100 depositories in the world, but the ones that matter today are well-aligned with the big five exchange groups. Somehow the smaller players will have to be linked up. Since the growth will be in the emerging markets, it means everybody will have to deal with the small depositories there.

Arbitrage in US equities is almost over. It will be incremental in G7 countries. In the newer emerging markets where mechanisms are not as efficient, there will be a huge pile on-in Latin America, Asia and ultimately, Africa. Hedge funds will change the game and investors will turn increasingly to the emerging markets.

Packaging Securities

Historically, securities were defined by the issuers assisted by their investment banks. If they needed debt, they issued bonds. If they needed equity, they issued shares. In the last 15 years we've seen securitization of bank debt or credit cards. Banks had assets and they were repackaged to sell to investors so those securities were defined by the needs of investors, who wanted to buy a credit card portfolio. Now the same concept is being applied to other securities. With exchange-traded funds, investors can say, "I want to buy Japan," or, "I want to buy the telecommunications industry worldwide," and somebody creates a security that reflects that. The situation now is that some securities are defined by what the issuer wants and some securities are defined by what the investor wants and in the middle are the packagers, which take instruments from one, repackage it and shoot it out to the other side. And the arbitrage people are sitting in the middle and using futures, forwards, derivatives to combine and hedge it all. When we project the number of securities that will be outstanding in the future, we usually do it by GNP forecasts, how big is the economy, how many securities does that take. That's standard. But looking at this repackaging dynamic, there will be far more securities than the GNP growth would suggest. So the conclusion is there will be a proliferation of securities and the growth in outstandings will be faster than anything we have seen in the past.

What happens to brokers?

The brokerage business is changing from providing access to markets to creating new securities from existing, other securities. Only a few global houses will be able to provide direct market access through one channel because connectivity is a scale business. Smaller local shops know exactly what the guy in southwest Milwaukee wants, so they can take all these instruments and package special new investment tools for him. The creation of financial instruments is no longer dependent on the issuer; it is dependent on the creativity of the intermediary. It's a big growth industry, despite the credit crisis, which went a little too far, too fast, not unlike the Internet bubble. In this business, collateral management is very important and that's the second big growth area. When everybody has to deal and settle in all these multiple instruments, to do it efficiently you have to manage collateral and margins very efficiently. So collateral and margin management among the plethora of markets is going to be a huge business. For that, it is not necessary to be big.

A co-location conundrum

Today the only data driving black-box trading is market price data. What is yet to come is digital company data and news. The more digital data you get and the faster your computer is, the more decisions can be made by black boxes. Annual reports are now being posted in digital form (XML) on the Securities and Exchange Commission's (SEC's) Edgar Web site. Company data is turning digital, which means that there will be much more information available to the black boxes.

In the information age when an unlimited amount of information can be distributed to anybody in the world, everything is available to everybody. You can sit in Connecticut. You don't have to be on Wall Street. The pipes have become so big and efficient that the cost of shipping information is zero. However, the time it takes to go from Chicago to New York cannot be faster than 8 milliseconds, the speed of light. Analyzing information very fast means it matters where you sit. If you want to trade in Chicago, you better sit in Chicago or you better have your black box in Chicago because you can't have your black box in New York and be 8 milliseconds slower. Co-location: What does that mean? In the US, the derivatives market is in Chicago and the cash market is in New York, and a juicy part is to arbitrage the two of them against each other and they are 8 milliseconds apart. Compare that to Germany where they sit in the same location. It could be that Germany is the more efficient market. It could be that some of the derivatives market is moving to New York or the cash market is moving to Chicago.

So what if the SEC decides Edgar will release company news first? Then you should have your black box in Washington, because you can analyze a new 10K report faster than 8 milliseconds with the right machinery and make your trades. Where does this go, because you can't put everything in one place? Nobody understands that yet, but the speed of light is suddenly having an impact on the structure of the market. Nobody has thought that way before. A second was good enough five years ago. Today in some markets, 8 milliseconds really matters. That's why people are co-locating. It's a whole different ball game.

In a nutshell

When you have more derivatives and more arbitrage between and across markets, the markets become far more interdependent, and therefore regulation is forced to become far more global. Black boxes are going to be important for arbitrage. Distance is going to be important. Clearing, margining and netting are very important. Repackaging of securities and how you manage them will be very important. Regulatory alignment like international accounting will also be very important.

The IT business environment

Now, instead of cost containment, there is speed. Instead of careful deliberation, there is agility, which is more important than anything else. That's counter to the trend in the last five years when firms had to become more efficient and centralized and put extra controls on spending-not that these controls are no longer necessary. You need size in order to get the economies of scale and to cut costs. You need the agility to exploit newer faster markets. Here is the dilemma.

Scale and growth

Financial services firms have to cut costs for the same transaction and service by 10 percent per year for the foreseeable future just to stay in the game. That's a huge driver for consolidation and economies of scale. The purpose of acquisition was to put more volume through the same machinery. You need cost control plus innovation to go after new opportunities, new markets, new instruments, new clients and new geographies. However, most important innovations over the last 20 years have come from small shops.

The rise of collaboration

In technology, Unix is getting replaced with the open source Linux; Yahoo! by Google; Encyclopedia Britannica by Wikipedia and Who's Who by Facebook and FaceBook by OpenSocial. The old is about centrally managed production and distribution of content. The new is about collaboration and sharing content and services. In looking for the next innovation in IT as it applies to finance, pay attention when you see these collaboration and sharing content ideas. The psyche of the changing mindset is that you don't have to have an idea of where you can make money. You can have an idea of how other people are making money so you can make money on their making money. That's a fundamental change.

Innovation flips to the consumer side

In the past, most of the chips/integrated circuits went to commercial applications-mainframes at GM or at Citi. In the future, more chips will go to consumer items. The Xbox today is significantly more powerful than the average laptop. That means most of the software innovation for the next five or 10 years will be consumer driven. But in large financial institutions, the IT department lets nothing past security. If you walk in with your personal computer, let alone your Xbox, you either have to give it up or they castrate it. Of course, their concerns are valid. The key issue, though, for large organizations is where to set the boundary between what they want to protect for security and confidentiality in house and what machinery and what gadgets employees can use. And where are the boundaries for how customers, particularly if they are individuals, can link to you? The bulk of innovation will be on the consumer side now. So the message here is rethink the boundaries. Be aware of the consequences. The senior IT managers in large financial institutions will be out of touch for the sake of security because they are no longer exposed to what's new out there.

Open source rules

Open source is one of these big collaboration things. At the beginning everyone said open source-you must be kidding. Today, Linux is replacing Unix. In Silicon Valley, the main qualification for a startup CIO is that he or she knows open source, where to get what and how to use it. In an IT shop in a large organization, the qualifications are can you manage large projects and do you know how to code a solution. This means the use of open source in startups is much higher than in larger organizations. As a consequence, startups are much faster and they can make many more mistakes, because it's much cheaper. This is another driver for innovation coming from the smaller shops.

Building sensitive systems

The third trend is business process management (BPM). Workflow systems streamline repetitive human actions around a given departmental IT solution. BPM goes one step further. It describes the logic of what people across business segments do and then the system is built around that. Take for example, how a large bank manages changing customers' addresses. The call comes into a call center, an agent verifies the caller is a customer and hands off to another agent in a different department who pulls up the existing documents. The request is then passed on to another agent in another department for the actual updating, and then a fourth agent reports back to the customer that the address is changed. Workflow goes through multiple operation centers and multiple systems and that is very hard to measure. So you build feeling nodes or sensors into different systems, like the FedEx Web site that can tell you where your envelope is now. These sensors provide information on what happens to each transaction, where and when. Statistics can be gathered to show where the bottlenecks are, where the delays are, so the process can be improved across business segments. Beyond that, instead of just sensing information, commands can be given to control and optimize the process. The new BPM systems comprise software to describe, software to measure and software to control process. SunGard acquired a German software jewel, a company called Carnot, which simulates and monitors processes and can also manage them by initiating software steps and integrating applications.

What is happening at SunGard?

Our greatest challenge is how to integrate a vast set of independently developed solutions. The answer is service oriented architecture (SOA) with an open source twist that we call "federated development." This means that any of our development organizations can ship in codes into a central repository and put a price on it or say it's free, and anybody else can reuse it. It's like open source inside SunGard. In the development of a new application it's not unusual that 70 percent of it exists somewhere else. So all these independent business units that never talked to each other before can now through this mechanism talk to each other and they can reuse code in the service of their client.

This approach started in 2002 as an experiment by an exasperated head of development to deal with a salesman's selling a solution that combined eight applications of the wealth management workstation packaged into a single application. Other units were starting to adopt this approach by 2005, when we went private. Going private allowed us to think long-term to transform the enterprise with new ideas. We then put the entire SunGard-all 190 development units in the Financial Systems Group-on this Common Services Architecture (CSA), combining an SOA platform with an open-source governance structure. We announced it in 2006.

What goes around ...

This year we announced Software as a Service (SaaS) on a shared platform we call Infinity. Instead of providing and hosting a solution, like an ASP to one user, we are providing and hosting a service of a bunch of services to multiple users. If we build our software so that everything is CSA-compliant, you can throw different services into a basket and reuse each. If you want a special solution, you can select specific services from the basket and orchestrate the services yourself into solutions tailored to specific needs. This is SOA deployed to users-as in, "I like Invest One but I would like to have a little piece of Front in it." In order to actually manage a solution as a combination of services you need business process management software. That is why the addition of BPM is important in this strategy.

This is the whole logic. We have a revolution from control to networks. We have the challenge in the industry to handle scale and innovation at the same time. We have consumerization, open source, BPM. We have Infinity to provide SaaS. We have the business model and the hosted services to roll it out. We believe that the future of SunGard is growing the federation by buying small innovative shops. That's why we continue to do acquisitions. We believe there will always be smarter, smaller shops out there and now we have a mechanism and an architecture to integrate them and deploy their innovation without killing the inventors.

The speed of change is accelerating. There has never been this much opportunity for agile organizations. We are morphing SunGard into a collaborative network of innovators as we believe the industry is moving toward a network of specialists. Welcome to the 21st century.


© Incisive Media Investments Ltd 2007

All this to be taken with a grain of piquant salt!!!