Cross posted

You have everything planned. Strategy is brilliant, wheels are turning, projects are in motion, future is unrolling. You feel good and can almost taste success. Unexpectedly, something big happened: two big buildings collapsed, a hurricane wreaked havoc, an earthquake shook a romote place, something called sub-prime is disturbing the US financial institutes. The event has no direct effect on what you are doing, but everyone is talking about it. Should you change your course or stand firm to ride out the storm? Since there is no data to support either decision, it is essentially a gut call, wrenchingly.

Guts are quite a rare commodity these days.

The question is whether the event has fundamentally changed the course of the world, or it is merely a ripple to be forgotten.
Sequoia advised their portfolio companies to change. In fact, to jump immediately.

If the event altered the landscape. Companies that reacted quickly also recovered quicker. Companies that tried to ride it out experienced painful cut-backs and frequently never recovered. There are many examples. Studious readers have already listed both columns. The million dollar question is, “How soon will this economy recover?”

You know Sequoia’s answer by now, “Not soon enough for you to just do nothing.”

Juniper reminds of China all the time: energetic, optimistic, impatient, and creative: precious like a talented young adult ready to change the world. All what’s needed is a good tool chest and some practicing.

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You probably knew my stance on DRM (digital rights management). My previous employer does a substantial amount of business with the proponents of DRM and that toned down the intensity of my opinion. Hey, you cannot be a VP of the company and sabotage their relationship with their best customers.

I have been a regular of xkcd after someone sent me a link. And I encountered this (click the image for the original):

Exactly my point. The licensing terms, the laws, and the technologies make it impossible for people to be legal and smart at the same time.

Someone tells me that I am wrong.

What happens when you pump money into a society?

A society’s productivity (real GDP) grows slowly. Over time, the prodoctivity accumulated into wealth. Part of the wealth is liquid: money in various forms. Money serves to convert one form of wealth (oil, gold) to another (cars, clothes). Wealth itself fuels productivity (called capital then) and generated more wealth.

There is a flaw in this system. The government prints currency, a main form of money, that does not associate with real wealth directly. When the government pumps money into the society, the total wealth of the society remains the same. This surely brings on inflation, but with a delayed effect. In the interim, people think they have more wealth and upgrade their lifestyle. When the reality arrives, they would have consumed too much, depleted their previously accumulated wealth, and ended up poorer than before.

Sub-prime crisis is exactly that. Those easy loans essentially pumped money into the system in the form of credits. Give that to a consumption based society like the USA, it ended up with the whole nation much poorer than before: they consumed way too much than they should have.

There are only two real solutions: infuse wealth from outside of the society, like China, or work to make up the deficit, like Japan is trying to. The US is a highly productive society. It can re-generate the wealth. But before that, the society simply must deal with the fact that they are now not so wealthy. The lifestyle of the rich must stop.

Paulson, Bush, Congress, Obama, and McCain all knew that these $700 billions is just pumping more money. It delays the harsh reality by faking the wealth the society does not have.

Wall Street is full of smart investors. They knew the money is temporary and fragile. They will do what they do best: invest by putting the money on secure and promising projects. But look around. Oil comes from mid-east. Manufactured goods are made in China. IT services were off-shored to India. What’s left in the US to invest?

The bail-out will not heal the US economy; it only gives the addict a quick fix. They money will quickly flow out of the country. It is a big soft landing pad that serves only politicians and short-sighted citizens.

My kid, a young female grew up in silicon valley and attended college in SoCal, came up to me during the debate (she did not watch, but stayed in the hearing vicinty), and proclaimed, “She won.”

“How can you possibly make that call?” “Easy,” she replied cooly. “She is pretty. He is old. She is eloquent and stayed on point. He kept on rebutting her points. Americans will declare her vice presidential now.”

For those who expected Sarah Palin to make a fool of herself, she did not. In fact, she at least equaled Joe Biden. In the measure of result to expectation ratio, yes, she won.

Edit, 10/3: The source protested for this article. Read her comment.

I hiked this section of the Great Wall just 4 months ago. No doubt it is the most challenging and enjoyable part of the Great Wall near Beijing. The views are spectacular, the breezes are soothing, the stairs are punishing, and the walls hide the thousand-year old secrets. This time, I hiked with two youngsters: my daughters. I wondered, the night before, if my regular 2-mile jogs can match their lightness and youthful regenerative speed. An old man will go distance spending a days with his daughters. I am the one with experience and wisdom. Right? Alright, experience.

Even I was here just 4 months ago, it is still breathtaking. We took the cable car up (100rmb for entrance and cable car) and turned left to start. There are 30 guard towers until the end. Since this wall is somewhat wild (what Beijingers call when the wall is not fully renovated), you see crumbled ruins everywhere. And that’s a great attraction. It feels real.

Half-way, we need to purchase the ticket to the SiMaTai section, another 40rmb. When we reached tower #20, we stopped for lunch. Hey, it is only noon. We started at 9:40. This means we can finish by 1pm. Wow! Speed!

The Wall literally ended at a river. We need to cross via a suspension bridge. That’s 5rmb toll again. By this time, my legs were pretty weak and I was down to the last half bottle of water. I pointed to the zip-line and told them that’s how we will get down. “Really!” They were scared and excited.

The last part of the wall is the hardest. There are probably less than 50 steps, but your will-power was all depleted. Can I just take a nap on this step, please?

40rmb, again, for the zip-line. They fit you with a harness and told you to “sit down.” All of the sudden you are suspended half-way nowhere, looking down about 150 meters into the water, zipping down without any control of your fate what-so-ever. I felt elated! Wind blowing through my hair and I felt like doing a SuperMan pose. The ride was over way, way too quickly. But the last drop of adrenaline was then spent. Fatigue overcame me. I fell soundly asleep the instant car rolled out the parking lot.

4 months ago, it took me 6 hours. This time, with the young and light, we did it in 3. Not bad, old man.