Archive for the ‘Business’ Category

US Government Bails Out Top Two Mortgage Giants and Brief Comments on the Housing Fiasco

Saturday, September 6th, 2008

Fannie Mae and Freddie Mac are the two largest mortgage companies in America with their roots stemming back to the Great Depression when FDR formed them as part of his New Deal to handle the majority of America’s mortgages and mortgage repackaging. Ever since, these two government-sponsored institutions have monopolized the mortgage market. This means easy money when people are buying homes.

And it means a colossal public failure when the economy spirals out of control.

In January, the combined companies were valued at approximately $60 billion. Yesterday, they stood at $10 billion. Today, little is left except some pocket change.

A government bailout is more humble and face-saving than a bankruptcy. It also implies that the government sees the business as too vital to fail. However, these events will force some $5 trillion in guaranteed mortgage securities held banks and funds (China’s central bank alone holds $340 billion in mortgage-backed securities) around the world to be the responsibility of the government. This “conservatorship” agreement could force taxpayers to support any losses related to collapsed mortgages from Freddie and Fannie.

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The Next Gates? Not in Computers

Monday, July 7th, 2008

The departing Bill Gates will leave a gaping hole in the halls of technology titans still at work. Leaving Microsoft in the hands college friend Steve Ballmer and Lotus leader Ray Ozzie, the loss of Bill Gates has left technology pundits pondering a very relevant question for the future of technology: Who will take his place? Not at Microsoft. We’re talking as the face of the computer revolution. We have not seen someone as iconic in technology as Gates since he arrived on the scene in the 70s. Heck, we may not have seen someone as downright legendary as Gates in nearly a century.

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Goodbye Gates

Friday, June 27th, 2008

Bill Gates Mugshot
This Friday marks the final day of Bill Gates’s 30-plus year career as the founder of the modern technology age’s most massive, dominate, and iconic companies, Microsoft.

I’m tempted to try and post a biography, but better ones can be found elsewhere, and I wouldn’t know where to begin telling the story of such a famous man. He is not just any mere millionaire. Bill Gates is among the most visionary, intelligent, and greatest men who ever lived. It is a small list of people who make a mark in history so significant as to be placed in school textbooks for ages. My guess is that Gates will be on that list.

Wired is commemorating his retirement with a timeline of his life’s most notable moments.

I have handpicked some of the highlights:

  • October 28, 1955- William Henry Gates III is born in Seattle. His grandmother Adelle nicknames him “Trey,” the cardplayer’s term for a three. He later becomes an avid poker player. [As most mathematicians are]
  • 1967- Gates, a difficult sixth grader, asks his mother, “Have you ever tried thinking?” [From a young age, he was a profound thinker beyond his years.]
  • Fall 1967- Gates’ parents enroll him in Lakeside School, an exclusive boys school in Seattle. He is the smallest kid in the class, yet has size 13 feet. [I'm not sure what they were trying to say with the foot size fact, but nerds are well-endowed in all the right places.]
  • September 1973- Gates enrolls at Harvard University. Academically, his record is spotty — having a near-photographic memory helps him cram, but he often misses class, neglecting showers and living on pizza and soda while programming and playing poker. He befriends Steve Ballmer, who lives down the hall in the same dormitory. [Story of my high school years]
  • April 11, 1993- On a chartered flight from Florida to Seattle, Gates proposes to Melinda. He has the plane make a stop in Omaha so the couple can go ring shopping with Warren Buffett.
  • July 17, 1995- Gates becomes the richest man in the world at 39, with a fortune of $12.9 billion. Microsoft’s revenue for 1995 is $5.9 billion; the company has 17,801 employees. [He would hold the top spot for 13 years until 2008 when he was passed by both his old friend Warren Buffett and America Movil's Carlos Slim.]
  • January 13, 2000- Gates steps down as Microsoft’s CEO to become chief software architect, handing over the reins to Steve Ballmer. [Ballmer will be standing in for Gates as the company's primary figurehead.]
  • 2002- According to a poll of teenagers in Hong Kong and China, Gates is more idolized than Chinese Communist icon Mao Tse-tung. [The World is Flat author Thomas Friedman wrote best (this line being paraphrased from memory), "In India, Bill Gates is Britney Spears. In America, Britney Spears is Britney Spears. That is the problem with our culture."]

After all these years, the timeline can finally be closed with:
June 27, 2008- Bill Gates’s last day as a Microsoft employee.

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Posted in Business | 10 Comments »

And I Thought High School was Wild…

Wednesday, June 18th, 2008

Broadcom's Logo

There were a lot of things wrong with Broadcom.

First of all, whoever designed a corporate logo that looks vaguely like the company’s stock chart from 1998 to 2002 should either explain his or her reasoning to the public or take a class in inspiring artistry.

Second, at no major fault of its own, Broadcom became the 90s technology bubble’s broadband semiconductor darling only to come crashing down with the rest of the stocks in 2000. At least Broadcom, unlike most technology companies at the time, built chips that products actually use to this day (Nintendo’s Wii and DS systems use Broadcom parts for online connectivity). But the meteoric rise and fall of the company’s stock was pumped by Chief Executive Officer Henry Nicholas III, a youthful, energetic engineer born in Cincinnati, Ohio with an appearance similar to Alan Rickman from his Hans Gruber Die Hard days. Such charisma may be an inspiration to investors and employees while business is good. The company was founded in 1991, and in less than a decade, he found himself valued at over $2 billion.

However, along with the drop in the stock price came a drop in profits. When tested at actually managing a business in trouble, rather than one in a growing marketplace during the technology rush, Nicholas chose to opt out of the public eye before it poked his.

I realize a lot of this sounds kinda bad, but I’m simply applying some context before I give Nicholas credit.

If Nicholas is to be applauded for anything (when I say “applauded”, keep in mind that I don’t actually endorse drug-induced casual sex), it’s for teaching every other executive in history, even Hugh Hefner, how to properly throw a party.

In April, Nicholas voluntarily submitted himself into rehab-for-the-stars, The Betty Ford Center, after he confirmed suspicions that he was an alcoholic. If only it ended there.

Henry Nicholas IIIThe New York Post’s subtly titled “ROCKIN’ THE COKED-OUT ‘ORGY’ CAVE” exposed Nicholas’s life in ways he was likely trying to keep underground. It turns out that many of his employees are suing him for unpaid wages of all things. After reading the article, you’ll wonder why that was their major gripe and had to let the investigators handle the rest of his shenanigans. Some men may have vices, and others, well, they’ll compete with Caligula for the king of crazies.

Henry Nicholas III had the makings of a real-life “Iron Man.”

He was a 6-foot-6 genius billionaire with a chiseled frame, physical endurance and a taste for fast cars and gadgets.

He even had a secret cave….

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General Examination of 2007-2008 Economy

Tuesday, April 1st, 2008

Date: January 22nd, 2008- March 27th, 2008

This essay will be the first of many public comments I will begin to make on the economy and politics. Considering that I’ve been getting a lot of questions from classmates on how the economy is doing and what will happen, I figured it’d be best to just put it all in one massive note that would explain where we are, how we got here, and what will happen. I’ve chosen to start now because my previous predictions, which I kept pretty private beyond telling people that we’re not doing nearly as bad as people are assuming (or the media would like to tell you), have been proven correct for the most part.

A large part of the problem when most people discuss the economy is that they don’t set a time frame. It’s general knowledge that the economy is cyclical and that it has its ups and downs. Yet, when discussed, people fail to acknowledge this in their discussion. People are either too shortsighted (the most common problem) or too far sighted (those bloody optimists and pessimists who wait for things to get better or worse and can’t enjoy things as they occur). Frankly, over some amount of time, things will always be worse and better than they are now. Personally, I just like to sit back, be a realist, and take it all in from all perspectives, typically with a focus on what’s about to happen in our immediate future to six months. Still, I will address both the current situation, past occurrences that caused these problems, and both the near-term and distant futures. (more…)

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Posted in Business, Economics, Essays | 16 Comments »