Magic Bible Arts – Extrait 13

Magic Bible Arts – Extrait 13

what is meant to go everywhere. And here comes gravitation, discovered some millions years after under an apple tree. 

 Chapter 6: Everything is a matrix: enter it 

 Welcome, they say, Edward hesitates to enter the modern corridor. He hesitates to face the same blah blah he had in his job on the almighty IT. No, Information Systems is a system, a tool, nothing more, nothing less. Syllabus: to explain in twenty sessions the virtues of software, hardware, and how to align all soft to the hard in line with your business strategy. Subject browsed includes: Web 2.0, social networking, augmented reality, clouding and the list goes on and on and on like we never want to switch off and goes away. Off the list, the main virtue we all have is to think before apply. We are already slave of money, why looking to be slave of another intangible master we wont be able to control. This matrix is used to coordinate, organize, reduce waste. 

And here it goes, Edward wastes some blank digital paper on the online community. Wiki why? Hara-kiri says the laughing cows, it is a whole new set of experience, virtualising almost everything you knew before. You have installed the last software required, you are already out of date. Independence of software is the only way not to enslave us. In this digital war of independence, pay attention to one and only one question: Is It a nice to have? Or is it required? And here goes the development of the thinking behind, do my business need to invest in it? Or does another one can clean the track before I engage ourselves down the road. Everything is a matrix, enter it. Ok, well, what is the code? Do I need a fidelity card? Accept Visa? No, dont get to me with these pivot table and these reference to a reference to a reference to a loop to come back on the starting point. 

 At a time where GPS, and location positioning have reached useful levels, how lost can we be in the digital world? How lost should we be? Do I want to bet? I do want to understand what is underlying my bet. Information is everywhere, duplicated, summarized, contextualized, simulated, derived, thought off, added on and on and on. No feedback control, everything is free ride. Now have you tried to leave the wheel when you were driving? No, get back in seat, and at a time where everybody else is going this way, don t go the opposite, but don t get head down this way. Head down is only good skydiving wise. Facebook, 3 months, I was unknows. 

Now, 750 connections. Since 4 years, I am an inhabitant of Earth, and I saw it was a town of Texas. I did move to boca del cielo for a time, but had to come back to Earth. Important is about what you radiate, how you radiate it, and who is down there. I am leaving you, I have to get back to my old mail. Dont get my wrond, but the social community appears to have been dressed up of an hypocritic virginity. What? Yes I dont know you, it does not prevent me asking to enter your world and understand more about diversity around. Dont stand on both sides. And there they lived, all in a line, speaking about the same subject with the same lines, with the same tones, and the same fake attitude regarding non commonly accepted rules. HYPERLINK "http://stotb.blogspot.com/2010/01/chapter-5-big-bang-takes-break.html"

 V: Big Bang takes a break Big Bang is exhausted this soon to be invented day. Too much mentally wanking, too much everything, and nothing is done. He looks everywhere, so in fact staring nowhere, and he is lost in the middle of nothing. So he is taking a break, it would be too much work to go on and on and on. He is starting to realize how much work is ahead. Do I have the strength to carry it out? Yes, BB is in full doubt mode. And you do you know what is going to happen in the next five billion years? So yes a break, BB is going on holidays

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🔖 Labels : MBA Magic Bible of Arts, Magic Bible Arts – Extrait 13

Magic Bible Arts – Extrait 12

Magic Bible Arts – Extrait 12

100% of the PIB of the country, distrust was the word of mouth in the financial and economic world. At this stage, I would share a personal belief. Countries are hereby contracting a total amount of debt, not thinking about paying the principals like any single individuals would do, but take only into account the interest. 

 From the movie Zeitgeist Addendum, it is supporting the truth that money is created by debt, hence growth is creating from that, and by contracting one debt from one to the other, you are betting on a future, while you know you won t be able to pay. Example of the Babylonian system takes here its full meaning: http://georgewashington2.blogspot.com/2010_10_01_archive.html 

 Greece, I do believe that, at the time in 2000 or so, the PIIGS (Portugal Ireland Italy Greece Spain) werent able and prepared to face such a strong currency as the euro. Current developments in the European economy will possibly show some encouraging factors possibly reinstating a more practical and required management control system. The economist Fixing Europe Single Currency HYPERLINK "http://www.economist.com/node/17093339?story_id=17093339" http://www.economist.com/node/17093339?story_id=17093339

 IV: Big bang to the next step, it's all a story of rhythm, and Flamenco. So BB is now decided to be the biggest entrepreneur and to remain it for a long time, keeping the competitive edge of curiosity well ahead of what the voice knows. From this, he enters the market, arduous task as it could, as a market requires two sides and he is alone. But hey, he is big bang and he is speaking, euh at least thinking, he is going to invent some black hole shortcuts, so let s continue twisting the rules. Twist is a nice dance someone will invent without thinking that it is related to him; it's the miracle of evolution. Why should only the most adapted one remain? Bring back the fun. Now, in the process of expansion, BB is considering the internalities, the ones that will make his product proper for the demand he has the chance to create. Tho', he cannot prevent from thinking about the externalities, these casualties paving the way to his vision of a globalised universe. The voice has been shutting up for a long time now, it king of worries him, and something is getting prepared. Or not. Ok continue to go ahead BB, you will never know if you keep wondering and as the voice said around a hot cup of nice maelstrom tea, very welcome in the deep cold emptiness of space. So just do it, he still has the trademark of this motto, it hasn't invented yet brand management, marketing, and other tools that the voice keeps silent from him. Silent or the voice can speak? So how to minimize the externalities when you are planning the biggest explosion ever done in this part of Yes there it was space picturing spaces, the voice is doing as she can to make this as interactive as possible. wait till someone invents colors... and here another voice comes to speak, much more wiser it soon appears, ok only from the tone, that s not giving too much but still, and this new voice is telling him to be careful, that this way of capitalism or some optimiscally call it this process of creative destruction is totally imbalanced and is going to blow up his head several time. Maximize the externalities by setting up a trade off with yourself, yes there is still nobody else, only this voice speaking in emptiness. Can you hear it? BB is starting to feel unwell, he is not getting all out of this thing, and hes got to get something else on the way. You cannot leave the process alone, you have to find a way to balance it, so here we go, BB is going back to the drawer and with a new tone, and he is slowly and carefully setting up the process of gravitation. Science never goes wrong. So let's take a scientific policy to control

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🔖 Labels : MBA Magic Bible of Arts, Magic Bible Arts – Extrait 12

Magic Bible Arts – Extrait 11

Magic Bible Arts – Extrait 11

abuse the system to make money knowing that the government will be there anyway to rescue the situation if something bad happened. Not something bad happened, something worst. While subprime crisis and to a further extent the derivatives mishandling is a symptom of the financial disease we were made involved in, the debt from the private financial sectors was effectively transferred to every single one governments of the country where the banks involved were working (UBS, BNP, Citigroup and so on). 

 The economist: The financial system What went wrong? March 2008 HYPERLINK "http://www.economist.com/node/10881318" http://www.economist.com/node/10881318 

 Subprimes are not new, it is an effect on the virtualization of money, and I would like to come back on one turning point in finance history: The 18th of January 1800, Napoleon creates the central bank of france, its mission: support the development of an economy struggling after revolution. how? by creating notes, that are payables and receivables in presence or in exchange of the benefits from the expectations of the business. Notes were already existing, but those emitted by Law's bank as the others only offers sad memories. For success, the new organization has to give the customer trust in paper money. This objective has never left the bank since then Source (in French): HYPERLINK "http://www.banque-france.fr/fr/instit/histoire/1.htm" http://www.banque-france.fr/fr/instit/histoire/1.htm 

 The image I would draw from this whole story is that money is the blood of our whole system, we can see injured that we are an hemophilic society and our immune system is not mature, another reason to keep an eye like GPs on the financial sector. National debt The subprime crisis gave birth to another concern of the disease we are subject of. This symptom, and treatment disclosed above, gave sight to the structural imbalance of the budget of a government. While it is true national government had to cover the financial sector, as we are in a worldwide sector where every single banks are interdependent (contracting loans from one to the other), the financial crisis created a change in the world consumption. Via the diminishing exports, the high exchange rate (for the euro for example), the subprime crisis, the structural imbalance of a country (in term of pension, in term of structural unemployment and so on), the budget of each country couldnt be balanced. 

Economists think indeed that in time of recession money needs to be inputted into the system to rebalance it and stimulate the economy (internally and externally). Still, there is no way to understand where exactly to stimulate the economy and how to exactly get the effect wanted. As a broad answer from the economy side: it depends, we should do this way, and let the market rebuild itself, but ultimately it depends. As an example of the complexity around, raising taxes in a period of recession would ensure reducing the imbalance in the government budget. Still, it makes it more unwelcome for companies to set up or to invest assets and means in the country. A Paradox, another one. Its only one example. National debt is contracted through one government and its central banks on international finance, to a country level. 

Hence when contracting debts, there are an interest rate and a principal to pay. This interest rate is following the market depending on the health of the national debt of a country. While a country is never believed to be able to default, we evolved again in the extreme of the probabilistic area following finance distrust and so on. The interest rate of bonds released by each country reached high level. (Long term bond of Greece difference to long term bond of Germany which is the reference is the EU going as far as 4%). At a time where national debt stands above

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🔖 Labels : MBA Magic Bible of Arts, Magic Bible Arts – Extrait 11

Magic Bible Arts – Extrait 10

Magic Bible Arts – Extrait 10

wonderful name, got spoiled, poor them. Cash is king, what kingdom is that? In this kingdom, everything are TLAs nowadays. Studies have shown plan in three points, acronyms of three letters, solution delayed in three consequences are equilibrium. Come back to physics: Since Eisenberg, we are living in four dimensions. What a step back. Well, Edward went through it. He understands, but it does not stand by it. Example in a play: the subprimes lie Turning around, and around, and around In a world very confused and very complex, where we believe more in end times than in our times, I will come back on one event in the last 3 years: the subprime crisis, and put a context in another context. The information disclosed below is how I understand it; please correct me if reckoning a wrong simplification. Subprimes One source (French) HYPERLINK "http://www.maths.univ-evry.fr/chaire_risque_de_credit/Armand_Ngoupeyou.pdf" http://www.maths.univ-evry.fr/chaire_risque_de_credit/Armand_Ngoupeyou.pdf 

 The initial idea behind subprime is to offer people not having bank guarantee the possibility of contracting a loan in order to buy an asset (an house for example). These loans were contracted with an initial fixed rate, generally low, during the first few years and a variable rate, after. Due to the risk intrinsic to the coverage of the loans by the individuals, these loans entered the financial system through another financial vehicle: the CDO (Collateralized Debt Obligation). 

 The CDO aggregates different loans of different risks. For example, a group of high risk loan were aggregated to some more insured. The aggregation, balancing these loans into a single vehicle, enables an easier exchange through the financial system. CDS (Credit Default Swap) were contracted on these CDO. The company providing the CDS, generally with good agency rankings, insures the risk of default from the interest and the principal on every single loan in the CDO vehicle.

 As a counterpart, CDS holders were gaining a rent as part of their insurance onto the loans. Subprime became as widely available as it offered the opportunity for one individual to get what he wanted right now and evolving in a field where regulations were very low, that derivatives (CDO, CDS) of financial vehicles were created over and over. Hence, from my understanding, CDS down the chain were aggregated in a single CDO, and on, and on and on. 

 While it would have worked if the CDO were rightly balanced, the situation evolved in the extreme. To take an example, we like probabilities. Hence taking a normal curve, normally you have 95% chance to stay in an interval of medium plus/minus a factor of the variance. The situation so evolved with time. And we began to evolve in the part of the normal curve where it was no longer subject to probability of normal behaviors. Drifting to the extreme of the curve, the CDOs and CDSs displayed their structure imbalance. And Defaulting starts. To the extent we did reckon. Given most banks were contracting in this kind of structure, it created a structural imbalance to their portfolio, and they soon arrived to a dead end situation where only money from the central banks would rescue the system.

 Hence, for example, Freddie Mac and Fannie Mae were nationalized and further money coming from the governments and the central banks were inputted into the system to stabilize it. While subprime offers one individual with no bank guarantee the right to contract a loan, the greed extends as we know to bank looking to use this opportunity to make more money. As Goldmann Sachs was put in frame earlier this year, ( HYPERLINK "http://www.guardian.co.uk/business/2010/apr/16/goldman-sachs-fraud-charges" http://www.guardian.co.uk/business/2010/apr/16/goldman-sachs-fraud-charges), financial system and hence banks did

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Magic Bible Arts – Extrait 9

Magic Bible Arts – Extrait 9

evolving. Euh, isn't it too much despotic? it is, reason why he smiles, he starts to get his plans together, he starts to think, he starts to reckon, all the inside him is starting to boil, he s got difficulty to sustain it all, he knows the whole explosion, implosion, development, structuration will come soon. He's like the human being he is on the verge of creating. So like them, and very hungry, he s got the stomach twisting around. Fortunately he cannot make sound; void is valuing the silence, so. Chapter 5: Inflationary finance Scared from this experience, Edward starts finance by some standardize the accounting rules of Assets equalts to Equity and Liability. And transforming the model through the dynamism of market valuation. After a short spell, he tiptoes in the world of Finance management, excel to another sauce than the engineering radical one. The room is full of charts, of numbers, of pies or other sensitivity analysis on the 5 assumptions the person that did it calculates.

 Out of 5 assumptions, a quick glance at it shows that: the debt to equity ratio was calculated from debt ratings, the Beta of equity is taken in comparison with main actors in the field, the volume of sales is following a growth of 3%, like a country, but in the simulation, this is carried out for 15 years, the capital expenditure is calculated on a percentage of sales, constant percentage over the years, and well the only plausible one, the depreciation is decided to follow a linear model. Still, the exchange rate is not taken into account, the cost of setting up the production and the risks involved in launching a new product are not, the market share is held constant with competitors and worst of all, the same discount could be applied in standards model to the free cash flow from every single year. As thought, he enters in direct confrontation with Finance. Hermione prepared his mind, but his mind couldnt be prepared to that. He was quite happy till then. 

Not everything is measurable; qualitative is the way to assess better. And Bam here it comes, Finance and its younger cousin Excel. This cousin excels in explaining nonsense to reach the desired conclusion. Mixing qualititative and quantitative, asserting the assumptions, taking the results for granted. The power of numbers. If finance were a number, it would be Pi, an irrational number. Nothing is sufficient to calculate it thoroughly. Approximations are required, and more and more assumptions stated as you are reaching the final line of your desired conclusion. Ok now you have three projects on the table, an infinite source of money, which one are you selecting first? From this question came the first restructures of his young mind. Back to Tatoine: Tattooed on his back, NPV, Net present Value Comparables from market Ratios from Industry all these industrial legends pursue him. He will juggle with millions of virtual dollars, Euros, ok daft currency. A second life currency without the life behind. You can take all virtual risks without taking any real risks (see next chapter). 

Is it useful? Is it required? Good sense comes back to Edward in another spell. Spell it: QALUIATVIE Mixing the n and t to the l, and this spell enables you to move from quantitative to the qualitative underlying it all. Even qualitatively, the power of debt is summoned as the best way to create more value and manage the way through it. Simply put, money is debt. Going back to the roots, he tries to understand the context but why he is not given the name of the company? Only number, he falls again in the social insurance numbering dilemma. Am I 1804587436337? Or am I Edward? Even tautology cannot explain the difference. Still difference is in the essence. And here you understand the life of the two last crises: CDS, FCF, ROIC, CDO. Even EVA, a

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Magic Bible Arts – Extrait 8

Magic Bible Arts – Extrait 8

to differentiate yourself, if you are looking to innovate, or if you are looking simply to treat your customers better. Your own market is a cushion to the volatility of the conditions around. Dont look to complex. No Edward is not scared about China. China still has to go through the internal crisis they have been avoiding for so long. With respect to change, he does not believe they are armed to accept the coming changes. Setting up a plan, organizing and planning yes, reacting and take the most from change, bring a culture of entrepreneurs? 

Not yet. Heart Attack, Crisis? Coming back to the . . 

Who is always called to the rescue? Who are you transferring the debt to? The savior is the guy you want to put away from the game. But hey it does make the game not fair, people making more money during the inflationary gap, same people standing away and waiting to play whatever they can when entering a recession. I won t derive on from where these crisis came, it just brings the point, accept it or not, but yes government is needed, in recession, in inflation. Your wife is there in good and bad times, why are you stepping away so far from what you are practicing in your day to day life. Edward doesnt trust one invisible hand to balance it all. An invisible hand never provides a good wank, it just creates wing. Lag is part of life, and it shows the limit of the rules of this game. Play it or not, but still keep within reasons. 

Again, rather stitching out of the game the governments and strongly believing economists are the beholder of the truth, work along, and don t be confrontational, your models are not that accurate anyway... everyone needs another one, preferably opposite, to live and go further forward. HYPERLINK "http://stotb.blogspot.com/2010/01/chapter-3-big-bang-is-snail.html" III. Big bang is a snail One year ago, Big bang was at its initiative stage. One nice feeling from the start, and it started to operate, not reckoning the extent of the enterprise carried out. If you know how much efforts it is to complete one thing, will you do it? He will, yes he will of course! The best ideas belong to the crazy, and he is the first one. If he wasn't crazy, he wouldn't go this way. Yes, he decided it this morning, forget the business case, forget the strategy, and just go for it, will you. Yes, today we are doing a small way on the theory of relativity, not confined to whatsoever, just relativity. it would be in a boring world about what makes think something is not achievable, or not appreciate something to its true value, or and here again, I am losing track, skidding in a galaxy far far away. euh wait a minute, says the voice, there are no galaxies as yet, and why would you want one?

 Euh, perhaps to create a milky way and to do some surf on it. So coming back to my sheeps, Big bang is preparing itself, packing stuff, organizing his home (yes it doesn't exist, but does something not existing is tidy and clean?). If I had to make a metaphor, I would picture big bang being a backpacker, introverting himself to understand the bubble is in, and what he needs to go further. yes to the infinite and even further, sure this sentence will make it hear some times, to which extent? Dont know, what are dimensions, what are metrics, what are imperials? Ah yes you confuse yourself, what are you thinking about that at that moment??? Big bang has to understand the strengths within. yes, use the black hole, it s pipe to go behind the map to the real nature of what is going to be called universe, a shortcut to this board game I am planning to create, the rules I am planning to bend. 

 Here Big bang is reflecting on his own, he feels lucky, what are feeling? He doesn't know, he doesn't care. He can see the infinite rolling out in front of himself; he will create the map in which he will be

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🔖 Labels : MBA Magic Bible of Arts, Magic Bible Arts – Extrait 8

Magic Bible Arts – Extrait 7

Magic Bible Arts – Extrait 7

believe one guy, Darwin or somebody like that, would be happy with that. Voice and strategy? BB short term: explode. Long term: try to get back all the debris and clean around. Voice - I dont understand BB Neither do I. Some people will try, yes read chapter one. NDLR: As you see, one big bang inside my brain has already exploded. I can t wait for holidays... :-) and I am starting to write one of my first book calling back on himself. Where is the escape? Chapter 4: In its HYPERLINK "http://stotb.blogspot.com/2010/02/creative-destruction.html" Creative destruction Edward enters the black bible straight, and all insights carry him to this fancy definition of capitalism. I understand one thing, creative destruction, good in arts to start from scratch and initiate new currents, too bad I discovered this concept in my study of capitalism with another understanding: wipe it all out; we are going to do it again. Why changing? Doing it the same way will bring sure benefits. Really, if I am listening to the unheard voice from the invisible hand counteracting it all, what do I hear? Governments, and its fair of regulations: tax implementation, business regulations, trade regulations and so on, should stay away, in recession, in growth, every single time. Why? Because economists know it better. And they have a pseudo rational management system: the automatic regulators should handle it all to bring back the situation forward. In deep recession, Keynes arrived and said one truth: In the long term, we are all dead. And this builds his reputation to say other statements, that were taken as true. The government shouldnt be involved. In a medling Yes but no very specific of economics, the state got to show the way and distill the happiness of propping up aggregate demand, it will lag, it will happen, two pages after, but no, the governments are going to lag so much behind in the implementation due to politics. Hey birdie people, trying to instillate sense in the world around. Make up your mind, don t create more uncertainties in the mind of the puzzled one. A good policy is a policy that can be understood by the mass, not a dark and unknown rule. Yes economy is useful, and yes governments are useful both in recession, both in growth to reduce debt. Why? Just consider this -2008 financial crises some buzz cocks decided to play on a new game with no rules and to make money from the growth created, governmental actions, not so much. The same known results coming back and forth as an old lesson never learnt thanks states are coming to the rescue. -2000 bubble.com, investors getting crazy about some intangibles bringing reasons out of sphere -The nineties were pretty all right I believe at least for some countries -and Bam, the eighties, and one cartel wanting to make more money (eve thought the apple was the root of the disease, it does unfortunately doesnt t look that tasteful), and here we go again -and Bam again in the previous decades. Ok I've got to say there, I am not that old yet and cannot gather too much Bam Bam and Bam, but you've got the concept, and I do strongly fear to recognize a pattern here and it s accelerating. Kondratieff states the 30 years circle, they even shortened it. Hermione explains the right from the wrong, searching to get the best suitable to the situation arising. How could you impact the world around if we dont know how it works? Germany has his flaws, has its advantage, Edward is getting convinced more and more that social democracy might prove to be the right path. Well, yes, David Ricardo might be right. Trades got his rules, one country needs to specify in its field of expertise: Labour oriented, Capital oriented, or huan labour oriented. In the developed world, Services are now the source of more than 70% of the GDP. Services are the way

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🔖 Labels : MBA Magic Bible of Arts, Magic Bible Arts – Extrait 7