Dis - Aggregation

Some interesting research about women on the Social Nets (from The Inquisitr):

According to a recent research report from BSM Media it isn’t just women bloggers that are having an influence as a growing number of women are an increasing presence in the technology world and the web. The report points out the two-thirds of moms use five or more forms of technology every day to keep in touch with their families. They also use this technology to consume a growing amount of content; this is besides those that also create it, as well as use technology to manage their lives.

For this segment of technology users things like podcasts and video blogging are more relevant to how they want to consume information. This goes against the perceived idea on the tech blogosphere that podcasting is diminishing in popularity. In this area the report predicts that in fact podcasting and video blogging could see a resurgence in popularity being driven by these new tech moms

.

Yet more evidence for our hypothesis that women will drive the "Next Net" far more than people currently imagine.

Patrick Smith, writing over on paidContent UK, has some interesting thoughts on print media's future :

....there’s a strong case for saying 2009 will mark a shift from seasonal, sensible belt-tightening to the long-term shrinking of the newspaper industry in Britain. Here’s why…

—The old business model is broken: The olde worlde of small, local newspapers with a reporter in every district, high circulation and a steady stream of advertising revenue is simply over. Now that they’re faced with oncoming recession and an advertising slump expected to last until 2010, until there is a scaleable business model for online news, Gannett’s Newsquest, Johnston, DMGT and the rest will simply continue to lower their exposure to a failing market. Don’t expect an upturn - newsrooms emptied of staff in ‘08 are not going to be re-filled if the advertising situation improves down the road. Trinity Mirror (LSE: TNI) CEO Bailey may assure investors the advertising downturn is cyclical, but these cuts are permanent. Newspapers used to monetise a physical, geographic network and monpolised the publishing activities of entire towns and cities. Now that the network is online and unconstrained by geography, it’s Google that dominates, taking more than half of UK web advertising spend.

—Print advertising is evaporating: The likes of Northcliffe Media and Trinity may have invested heavily in transforming their newsrooms for the online age, but the truth is they remain intrinsically tied to the 200-year-old model of classified ad revenue from homes, cars, properties and funeral notices. Media owners can only blame recessionary factors for so long - thanks to the web and media proliferation in general, their business models have been under threat for years. The deterioration peaked in ‘08. Trinity’s income from 26 June to 26 October was 11.4 percent down on the previous year, dragged by a slump in regional print ads with property ads down by nearly half, cars by more than a quarter. Johnston Press fared even worse, its income from print ads down 17.8 percent between January and October from the year before thanks to a halving in property ads. For the nationals, print ad revenue is expected to drop another 21 percent in 2009 according to Enders.

—Digital is still small, and stalling: All of this would be fine if digital revenue was growing to meet the shortfall, but current growth rates are not nearly enough. DMGT-owned Daily Mail (LSE: DMGT) publisher Associated Newspapers nearly trebled its online income to £9 million in the year to September, while regional stablemate Northcliffe made 42 percent more at £17 million. Impressive, yes; but it didn’t stop profits falling nine percent overall to £262 million. Even publishers that haven’t made online pay might have at least hoped a continuing online advertising boom would grow their online wins by default - but now the economy is taking that away, too. Enders Analysis says UK digital ad spend’s annual growth rate will slow from 20 percent in ‘08 to just 2.1 percent next year. Some analysts argue that newspapers should seriously consider giving online-only a shot, but not even Guardian.co.uk, with 25 million unique online users worldwide, is considering scrapping its loss-making print edition - such is the Catch 22, multimedia publishers feel compelled to hang on to the dead trees.

—Synergies wanted, apply within: Few in the industry would argue that more newspapers will close in 2009. But many will merge with papers in the same group and many editorial and commercial teams will be combined or outsourced to agencies as publishers look for ways to knock off unnecessary overheads. Last week Newsquest merged its two Wiltshire titles and Independent News and Media was forced to move its two national papers into DMGT’s offices to cuts costs, even after making 90 job cuts. DMGT’s local division Northcliffe Media is considering outsourcing the majority of its national sales staff to the Mediaforce agency. One media company that may fare well 2009 well is Press Association: the agency was represented at a meeting of Johnston Press executives to discuss the possibility of out-sourcing all subbing duties for the Yorkshire Post and Yorkshire Evening Post, although at least one foreign company is thought to have pitched at the meeting too.

So what happens if he is right?

There are undoubtedly synergies in the industry far greater than it is willing right now to contemplate, but this is early days in the (painful) industry consolidation and restructuring, and over the next few years we expect to see that change in structure.

The key issue though is what sort of media will you pay for?

What does a world look like if the only print newspapers are ad funded freesheets peddling PR spam and Sleb doings & screwings? Is this really what the majority of the public will want?

As we pointed out before, don't count on the online space - if all the blogs in the world were laid end to end then they (to paraphrase ) would not reach a conclusion. It is extremely difficult to tell signal from noise in the current online media.

(Apologies to readers - wrote a whole lot more, but tech glitches lost it and no time to rewrite more till tomorrow)

Interesting article in the Daily Beast about the future of - well, itself really - and the Rest of The Media (bracketed comments are mine):

- The Rise of Undernews (no reporters anymore, you must rely on bloggers for investigative reporting)

- Go Online or Go Home (meedja must go online pronto, regardless of the nagging detail that most make no money doing it)

- That Goes for You Too, Newspapers (As above, but even more money lost but hey look at the link love)

- Let's Talk About Sexism (and they will, in droves - but I loved the point made that Sarah Palin has put the whole femist movement in a quandary)

- Alter-Egomaniacs (well known Journos will blog about their hobbies as well as their work)

- Black (Media) Power (as for sexism, but in colour)

- Remember Iraq? Neither Does Anyone Else (the cameras are leaving, time to pull the troops out)

Now far be it for us to point out that this analysis serves the Beast's position rather well, or that what they are pointing to is not a "New journalism" or even "New news" but by and large the rise of Op-Ed sans Facts.

However, we would point out that it seems that the real medium term implication is that a two tiered market for "real" news is emerging - those who want to know what is really going on will buy such as The Economist (which pays its people to do research) and watch the BBC (ditto, well for now anyway), the rest will theoretically exist on their Daily Me of limited width, factless opinion. I see this as part of the same trend that wants to treat scientific fact as but one opinion in a debate, or even treat maths accuracy as a moveable feast.

Quite why, at this point of a fairly productive 300 year Age of Reason, the richest and best educated populations on the planet want to throw all this learning away for something that is in effect not too dissimilar from what would once have been called propaganda (in its widest definition) and return to the information equivalent of the Feudal Age is beyond me.

But then, its free, so that explains it all..................

Or does it? Will this dismal future really emerge, or will the Silent Majority, once they have sampled the delights of such User Generated Content from We The Media, start to go back to edited, curated content albeit with more interactivity?

Friendfinder Networks, owner of Penthouse and web properties such as Adult FriendFinder and various other social media type sites, is filing for a $500m IPO.

Why now? This can't be the best of times to tap the equity markets!

It would appear - reading the prospectus for the IPO - that they have a rather large lump of debt that needs paying off.

As one of the TechCrunch commentators observes, when Penthouse bought FriendFinder etc, they funded it mainly with Notes. Now the company is looking to go public to raise money to pay off the previous owners. In addition there is a $60M+ hole because the previous owners did not bill or pay VAT in Europe.

As best I can work out from a quick once over of the numbers, they are slowly bleeding money to service the debt, and there is not a lot of cash to provide a runway. Not good medium term.

But hey, why go for an IPO while the US Govt. is giving bailouts to industries in real trouble (and boy is the porn industry in real trouble - user degenerate content is really stripping its revenues!)

More interesting though is the raft of data about the operations of what is an early day social networking system - and interestingly for our times, an early day online Freemium play. Roughly 77% of the money comes from various paying members grades, which - reading the prospectus - seem to comprise of about comprise of about 950,000 users of a total of 270m (of which a high proportion are probably defunct say 27m, gives about 2-3% of members generating the bulk of the revenues).

Payment gives you a higher level of visibility (as it were) of other members' (as it were) details and access to more site functionality. The probable model for today's SocNet crop to follow in fact.

Wails of woe today as the Net Neutrality Fraternity wake up to find that Google is preparing to jump the fence and leave them to the sharks - its in the WSJ here. And, as SAI notes:

One of the most kneejerk Internet causes in recent years has been "net neutrality"--the absurd conviction that phone and cable companies who paid hundreds of billions of dollars to lay the cable that Internet data travels over shouldn't be able to charge different rates for different tiers of data service.

From the beginning, big Internet content companies like Google have fiercely championed this.

Until they could get into the position (traffic from YouTube, pipes from purveyors everywhere) to negotiate their own preferential deal, that is:

Now, however, Google appears to be realizing that net non-neutrality would actually be a boon to business--because it can afford to pay preferential fees that other companies can't. Microsoft, Yahoo, and others appear to be realizing the same thing.

Score a very rare win for the telecoms:

Rare perhaps, but predictable certainly, on 2 counts:

(i) The Telcos have been signalling for 3 years now that they will do this, as they want to make sure that those that clutter up their pipes help pay for building bigger ones.

(ii) Google strategy across most key areas in their value chain is to play a double game - support Open (You Name It - Org, Source, Access, ID, etc etc) until they can get their own beautifully Chromed assets in place.

There are 2 bits to Net Neutrality - the initial idea was to assme that you got Feedom of Access no mater who you were. This waslater conflated by some more Web 2.0 hippie types into Freedom of Assets - ie the right to pay no more for dumping shedloads of traffic into the pipes than a few bits. It suited the NN lobbies' interests to conflate the two.

And the GYM club were all at it it, they only supported Net Neutrality to give them time to get their assets into line, as is probably also the case with their strategies for Open (Most Other Stuff). Especially now that FreeConomic speculative funding is pretty much drying up and the hunt for real revenue is on.

If you look at the value chain, its clear that distributors will always (i) make money and (ii) control their pipes. Google knows this - it played Net neutrality until it could effectively peer at Tier 1 level, and it will now do that until it has built its own backbone network.

Some people continue to think of Google as the cute startup that can Do No Evil, not the huge public limited Ad company and Microsoft - in - waiting it now is, and the tend to be bamboozled by the doublespeak, but the above strategy is very clear once one takes off the Googleglasses.

Update - a bit more clarification on this after reading Graeme Pieterz's comment below - my point is not that Google has jumped the fence yet (as Graham notes, this is Tier 1 peering CDN's) - but its not hard to imagine what comess next as Google backfills. Thus (in my view anyway) it is preparing to become its own distributor down the road and in the meantime ensure its content looks and feels like its coming from a Tier 1 player. Thusly, I think a lot of myopic Open folk are only now waking up to what Techdirt puts very well:

....people and companies, who used to rely on Google's legal team to fight their battles, now need to realize that Google is no longer the defender of Silicon Valley. While the company used to take the stance that what was good for the internet user overall would be good for Google in the long term, in the last year or so, the company has increasingly made decisions that go against that principle. Instead, it's done a number of deals that allow it to leverage its cash reserves to make life more difficult for others, but allow Google to protect itself.

They have followed a clever strategy - in areas where they have no hegemony, promote (and seek to influence) Open Whatever, as that way you get a lot of free resource - especially in the early days - and less resistance, in fact even some lurve. But when your chips are in place, start to replace Open with Google.

Update - El Reg has written a fairly scathing article a week alter after a lot of pixels were spilt...

I've been tossing this one over ever since I visited the FT a few months ago and saw what they were doing with Alphaville and their other online properties. I'm still in "muse mode", though I've been playing around with the new vs old economic models and their discontinuities, but haven't committed pen to pixel yet - there is a lot of chaff around this subject, finding the kernels is elusive

Anyway, I think this is some of the kernel - here is an interesting piece by Paul Conley on the misconceptions print & online have (hat tip Adam Tinworth):

Here are some of the things I saw at the start of the Web era and their counterparts in today's era.

Print publishers greatly overestimated the weight of their brands. They looked down their noses at upstarts without a history or a "recognized" brand. Print publishers assumed that their previous success would translate easily to the Web.

Web-only publishers are overestimating the implications of their recent success. They look down their noses at the dinosaurs who failed to adjust to the Web. Web-only publishers assume that their early successes can be scaled.

Print publishers put their faith in volume and expertise. They produced great amounts of "must-have" content at high costs, hired large editorial staffs, emphasized reporting over writing and dismissed the potential of one-man operations and bloggers. They assumed that "quality" was what the market wanted.

Web publishers put their faith in brevity and insight. They aggregated content rather than produced it, using part-timers and contractors to keep costs low. They emphasized writing over reporting and dismissed the ability of large operations to keep up. They assumed that the market wanted "speed."

Print folks underestimated the difficulty of working on the Web. They assumed that, if the time came, they could create blogs, aggregate content and run online communities as well as any Web native. But when the time came, they found they could not.

Web-only folks underestimate the difficulty of creating content. They assumed that, if the time came, they could do original reporting, create data and run trade shows as well as any old-time B2B executive. Now the time is here, and they are finding they cannot.

Print guys think Web guys are lazy (aggregating content rather than creating it), unprofessional (prone to snarky writing) and stupid. Print guys are breathtakingly arrogant -- and they are most arrogant about their superiority to Web guys.

Web guys think print guys are lazy (unwilling to work in the 24/7 world of the Web), unprofessional (prone to hiding bias behind "objectivity") and stupid. Web guys are breathtakingly arrogant -- and they are most arrogant about their superiority to print guys.

Apart from reminding me of that song from Oklahoma!*, it also I think makes a good point re what an online business starts to take on as it scales.

* We did it at school, this clip reminds me of that!

Bad, but not unexpected news from the NYT:

As more business and social life has moved onto the Web, criminals thriving on an underground economy of credit card thefts, bank fraud and other scams rob computer users of an estimated $100 billion a year, according to a conservative estimate by the Organization for Security and Cooperation in Europe. A Russian company that sells fake antivirus software that actually takes over a computer pays its illicit distributors as much as $5 million a year.

With vast resources from stolen credit card and other financial information, the cyberattackers are handily winning a technology arms race.

“Right now the bad guys are improving more quickly than the good guys,” said Patrick Lincoln, director of the computer science laboratory at SRI International, a science and technology research group.

What to do, what to do - well, it seems that its safer to put your money into World of Warcraft:

My World of Warcraft account is now more secure than my bank account. It is harder to steal 5,000 fake Warcraft gold from me than $5,000 real US dollars. Why? Because unlike my bank, my computer game supports two factor authentication.

About six months ago Blizzard started selling the Blizzard Authenticator to its US customers for the nominal price of $6.50. It's a little keychain fob that generates random number codes that change frequently. Logging in to WoW requires both a password and the current code.

Never the twain to meet? We could either all get secure fobs, or move all our money into WoW gold pieces and Linden Dollars. I prefer the fob idea

Earlier this week Chinwag did a Crystal Balls event, looking at the world out 5 years +. Quite an interesting panel too (Chinwag has the links to their webpages):

Jonathan Mitchener - Futurologist & Principal Research Scientist, Devices, BT

Simon Collister - Head of Digital – Consumer Practice, Weber Shandwick Simon Collister

Jamie Coomber – Head of Digital Strategy, Profero

Neville Hobson - Communicator; Blogger; Podcaster,

Richard Titus - Head of User Experience, BBC Future Media and Technology

Ewan MacLeod - Founder of Mobile Industry Review

Made some notes, can't by and large recall who said what, but here is the gist of it:

Mobile Devices

Don't think handset, think mobile device - could be any number of things, and we will want to access the 'Net with all of them. The customer wants a seamless, no hassle service - problem today is the infrastructure is not integrated, the commercial deals are non-existent outside of Japan / South Korea and there is little evidence of exiting players collaborating.

My thought - an outside end to end player will take this market from the operators within 5 years - Apple is playing Apple, who will play Microsoft?

Mobile Commerce

mCommerce is here, just unevenly distributed - will mainly be driven by developing world needs where it is being used instead of previous models that don't exist there yet. In the west the Mobile is for entertainment, in Africa it is for existence. Jonathan made a prediction on near field system m-commerce

My thought - mCommerce will take off in India and Africa, and in the very advanced nations - Japan etc - OECD will be pincered.

The Role of Google in 5 years

Google will start the change to standardisation in many areas - ID, mobile devices etc - question is whether it will live to enjoy it - increasingly algorithms less useful, company seen as more Evil / less trusted.

My thoughts - Google is beginning to occupy the Microsoft seat - in 5 years they risk being an unloved, unpleasant behemoth that will have the SEC and EU gunning for them. But, they will have done what Microsoft did - bring a horde of industry niches to use standard approaches, kicking and screaming as they go.

Privacy

There was some disagreement on the panel between the "people don't care" and the "people don't understand yet" schools of thought. View is that over time (i) more regulation will come in and (ii) people will want something back for what they give - uncompensated scraping not an option going
forward.

My thoughts - I'd agree with that - see last sentence in this post below

Does Technology change happen because of Social Drivers, or vice versa?

Technology drives the change, we then decide how to use it socially - lost of discussion about coming to terms with being connected 24/7, continuous partial attention, issues with online ID.

My thought - there is an interim step here - the economics - Tech won't even get off the ground apart from very early adopters if the economics doesn't work

Given we all use different comms systems, how will we contact each other?

You don't use email, I don't use Facebook, she won't use a mobile et etc. Jonathan noted that a BT "Future of Work" project predicts we will have to make far more of these low level decisions for a while as new conventions take time to emerge (see point above). The Web is still a baby, very immature in its evolution.

Also, there are countertrends - ubiquitous email and MP3 has seen the rise of the Letter and the LP.

There was talk about shopping - how in RL women forage and men hunt in shopping behaviour, its the opposite on the web as women find the experience unpleasant.

My thought - this need to Unify Communications will be one of the big needs in the next 3 - 5 years - whoevever does it well will clean up. That's why I am fascinated by embryonic UC services like Twitter (I also don't think we will give this service our data).

With respect to shopping, we've noticed this anti-female effect, odd as women control more spend - see this post here

Jemima Gibbons (from the floor) then raised the elephant in the room - the Economy. Thoughts were:

Firstly, a lot of teh bad news is companies using recession as an excuse to do unpleasant stuff that they have been holding off on. But the push is now for ROI, not relationships - as digital has a great cost saving potential impact (Is the Cluetrain wrecked now?). there was discussion around Open Innovation. The really interesting thing though is that this represents a major restructuring of the World Order, the key thing is to think about what is left after the dust settles

My thought - well done Jemima for pointing out the obvious discontinuity. My prediction is it will be more in the mindspace next year

Agree totally re the restructuring - if past such things are any indication, a major restructuring of communications impacts economic, social, political and belief structures (think printing press, automobile, telephone)

I was having a chat later at the bar, re prediction - we do a lot of it in the 3-5 year range. My experience is that predicting the "what" is not that hard - in developing tech anyways (though it requires a lot of analysis and research of course), as there re big trends that are fairly easy to see and fairly good rules of thumb (Chasm, Moore's Law etc). The harder thing by far is predicting the when, and the devilish details about the who, how, where etc.

And lastly - about 10 years ago, I was present at a 10 year future view conference with BT's futurologists and some others, and the prognosis 10 years in the future - ie about now was that:

- There will be an almighty scramble to own the data that shows the net present value of people's future spend

- this scramble, plus the massive expansion of people on the 'Net will drive unpleasant "Wild West" behaviours for a while

- regulation will have to come, to protect the masses and make the system safe to use again.

Points 2 and 3 are still to play out, but I see nothing that tells me they are not on track.

Techmeme is moving more to blended curation via algorithm and human input. Its an interesting area, one thats been much on our minds since looking at how Video Aggregation would be done, and also since listening to the BBC talk on Social Media Moderation at Amplified 08, and also looking at my how we blend Algorithms and Human input:

The exact impacts Techmeme predicts are:

Humans have always edited Techmeme of course, just implicitly. For instance, when a blogger links to a story, the headline might move higher on Techmeme. What's different now is that an additional human editor will carry out changes explicitly to directly improve the mix of headlines on Techmeme. Though the implicit edits conveyed via algorithm outnumber the explicit edits perhaps by 1000 to 1 or more, the impact of the human editor is nonetheless pronounced. What will that effect be?

The news will just get faster and more interesting. Obsolete stories will be eliminated sooner while breaking stories will be expedited. Related grouping will improve. Most of this will happen only on Techmeme, though other sites (like memeorandum and WeSmirch) will increasingly benefit from the direct human touch as well.

And gaming will be easier to spot...question of course is, is it scalable? Techmeme seems to imply it thinks so:

I should note that the experience of introducing direct editing has been a revelation even for us, despite the fact that we planned it. Interacting directly with an automated news engine makes it clear that the human+algorithm combo can curate news far more effectively that the individual human or algorithmic parts. It really feels like the age of the news cyborg has arrived. Our goal is to apply this new capability to producing the clearest and most useful tech news overview available.

Though effective here may not mean efficiency. I also hope that it trades some laterality, ie keeps a bit of deviation around the standard mainstream signals - serendipty among the datastreams. Also, one suspects a rapid rise in attempts at PR seduction of the human interface to the Algorithms - enjoy

Still, this is, I suspect, one of the emerging props of the foundations of the New Media Industry. Long term we suspect bit by bit the human bits of curation will be replaced by better and more intelligent automation. We are in the spinning jenny phase of automated aggregation.... just starting to pick up the threads, as it were

Michael Lewis, who has tweaked Silicon Valley a few times (the New New Thing, Next - The Future just happened) has written an essay on portfolio.com about the impact of privatisation on the banking system (from partners to shareholders) in the 1980's, the resultant Crash then, and how the game theory was distorted from then on. And as he notes, we remembered nothing from then, and were thus doomed to repeat it:

I thought I was writing a period piece about the 1980s in America. Not for a moment did I suspect that the financial 1980s would last two full decades longer or that the difference in degree between Wall Street and ordinary life would swell into a difference in kind. I expected readers of the future to be outraged that back in 1986, the C.E.O. of Salomon Brothers, John Gutfreund, was paid $3.1 million; I expected them to gape in horror when I reported that one of our traders, Howie Rubin, had moved to Merrill Lynch, where he lost $250 million; I assumed they’d be shocked to learn that a Wall Street C.E.O. had only the vaguest idea of the risks his traders were running. What I didn’t expect was that any future reader would look on my experience and say, “How quaint.”

His analysis of the current situation is more chilling - first, this cycle's Enron Moment:

Meredith Whitney with news. Whitney was an obscure analyst of financial firms for Oppenheimer Securities who, on October 31, 2007, ceased to be obscure. On that day, she predicted that Citigroup had so mismanaged its affairs that it would need to slash its dividend or go bust. It’s never entirely clear on any given day what causes what in the stock market, but it was pretty obvious that on October 31, Meredith Whitney caused the market in financial stocks to crash. By the end of the trading day, a woman whom basically no one had ever heard of had shaved $369 billion off the value of financial firms in the market. Four days later, Citigroup’s C.E.O., Chuck Prince, resigned. In January, Citigroup slashed its dividend.

From that moment, Whitney became E.F. Hutton: When she spoke, people listened. Her message was clear. If you want to know what these Wall Street firms are really worth, take a hard look at the crappy assets they bought with huge sums of ­borrowed money, and imagine what they’d fetch in a fire sale. The vast assemblages of highly paid people inside the firms were essentially worth nothing. For better than a year now, Whitney has responded to the claims by bankers and brokers that they had put their problems behind them with this write-down or that capital raise with a claim of her own: You’re wrong. You’re still not facing up to how badly you have mismanaged your business.

And then most damning of all, the way the structure of the banks virtually guarantees misbehaviour as Greedonomics comes to the fore:

John Gutfreund did violence to the Wall Street social order—and got himself dubbed the King of Wall Street—when he turned Salomon Brothers from a private partnership into Wall Street’s first public corporation. He ignored the outrage of Salomon’s retired partners. (“I was disgusted by his materialism,” William Salomon, the son of the firm’s founder, who had made Gutfreund C.E.O. only after he’d promised never to sell the firm, had told me.) He lifted a giant middle finger at the moral disapproval of his fellow Wall Street C.E.O.’s. And he seized the day. He and the other partners not only made a quick killing; they transferred the ultimate financial risk from themselves to their shareholders. It didn’t, in the end, make a great deal of sense for the shareholders. (A share of Salomon Brothers purchased when I arrived on the trading floor, in 1986, at a then market price of $42, would be worth 2.26 shares of Citigroup today—market value: $27.) But it made fantastic sense for the investment bankers.

From that moment, though, the Wall Street firm became a black box. The shareholders who financed the risks had no real understanding of what the risk takers were doing, and as the risk-taking grew ever more complex, their understanding diminished. The moment Salomon Brothers demonstrated the potential gains to be had by the investment bank as public corporation, the psychological foundations of Wall Street shifted from trust to blind faith.

No investment bank owned by its employees would have levered itself 35 to 1 or bought and held $50 billion in mezzanine C.D.O.’s. I doubt any partnership would have sought to game the rating agencies or leap into bed with loan sharks or even allow mezzanine C.D.O.’s to be sold to its customers. The hoped-for short-term gain would not have justified the long-term hit.

So, as messrs Darling & Co tell us about our future and the US prepares to bail out Citibank (rather than clamp the executives in irons as they did for Enron) we would do well to think about how the structure has to be changed so it won't happen again. As he notes about Whitney:

This woman wasn’t saying that Wall Street bankers were corrupt. She was saying they were stupid. These people whose job it was to allocate capital apparently didn’t even know how to manage their own.

So Mr Darling & Mr Brown, before another £ of my taxes are put their way, I want regime change at the banks the money is going into!

Also, I know if this whole thing sinks our small company, we won't see any bailout money coming in. And yet oddly, if they were more prepared to tell us they'd bail us out from failures due to these bank-caused causes, we'd probably be more prepared to spend and thus boost the economy than anything they can do by any fiddling with VAT etc.

(Hat tip to Howard Lindzon for the link)