New York – Guess what? You probably have too many friends. That is one of the many things I learned from my recent chat with Caterina Fake. As one of the co-founders of Flickr and head of the technology development group at Yahoo!, Fake was at the center of the surge in social networking. Now that we all made the jump and are living our lives online via Facebook and Twitter and the like, Fake predicts we will want to fine tune the experience.
“In this era we have promiscuously friended everybody and we have made connections and we have friended people who aren't truly our friends,” explains Fake. “One of the things that is important after we have gone through that phase is that there will be a contraction. You'll start to realize that ‘I can only pay attention to this number of people’.”
This number happens to be around 150, according to Fake. Give or take. That is not to say that Fake is suggesting people start de-friending en masse. Instead she thinks the need to cut down the noise on the web will lead to a boom in personalization. Her new company, Hunch, aims to capitalize on that. The site allows users to create a taste profile and then uses that to help make recommendations for products or services you are searching for.
It is a complicated puzzle that has taken months to put together - and a few critical pieces are still missing
Greece has been negotiating the terms of a European Union bailout since the end of last year and in that time interest rates and the cost of borrowing have soared.
At a press briefing in Davos at the end of January, I remember asking Greek Prime Minister George Papandreou if Germany and France would lend their political support to his country. His answer - like the countries at the time - was non-committal. France did come on board; Germany is just warming up to the idea.
We know at this juncture that the road ahead for Greece is a painful one. We are looking at one out of five government jobs being eliminated. The coveted 14-month salary for government workers will be cut and taxes will continue to increase to close a 13.6 percent budget deficit from 2009. The target for 2010 is cut of almost five percent, which is incredibly difficult to deliver when your economy is still contracting.
Left out of today’s debate is why we are in this position in the first place.
The reality is that the architects of the Euro made a political decision to be inclusive with the new currency union probably a full decade ahead of actual convergence with Greece, Spain and Portugal - dare I say even Italy, a G-8 member.
As a result of being pegged to a single currency and therefore German monetary policy, the Greeks have enjoyed the full benefits of a strong and stable currency without - until today - any of the pitfalls. Most notably, real estate prices and wages have continued to rise over the past decade, without the necessary openness and flexibility to attract foreign direct investment.
Greece trades a great deal with its southeastern European neighbors - especially in food stuffs. But the country cannot live on olive oil and the food sector alone.
During an interview with CNN, Papandreou talked about developing a green economy and tapping the growing market for solar energy. Practically speaking, it makes sense, but the building blocks for reforms need to be put in place first.
I spoke to one leading Greek businessman who produces high-tech software and sensors from his manufacturing base outside Athens. He recognises the burden of the budget deficit and the mess left over by the previous government. We have seen the protesters on the streets. But he notes - and the polls reflect this - that those shouting the loudest are in the minority. The Prime Minister still has a majority of the population, which supports change.
But herein lies the caveat: The International Monetary Fund is pushing for steep budget cuts and reforms. Papandreou with the support of his European counterparts can use this opportunity to start and complete what should have been done more than a decade ago. As one Greek chief executive said: “Better a showdown with the extremists today than a slow death of our economy in the future.”
Business leaders talk of opening up the property sector. The government and the Church of Greece reportedly own and sit on €250 billion of real estate.
Selling some of those assets would help bring down the deficit and ease the unrealistic level of prices brought on by the single currency. Secondly, many sectors remain closed or overly controlled in Greece. The transportation business lacks competition and prices remain artificially high - thanks again to the strong euro.
No one wants to see Greece exit the single currency. An exit would be a failure for Greece and the European Union as a whole. As one executive noted this past week, “it is absolutely not an option.” If that option is off the table, the Prime Minister has few cards to play at this juncture. Job cuts, higher taxes and yes long-term reforms need to take place for the country to rebuild confidence after the crisis.
You would not know that we were in the midst of a sputtering economic recovery when examining the price of oil these days. At around $80 a barrel, which we witnessed this past week, the price of the precious commodity is about $60 above its 20-year average.
New oil finds are promising and seemed to surprise even the most seasoned hands in the business .
The math adds up for the Arabian Gulf producers who are part of what one seasoned energy consultant called the supply management club - OPEC. For all the back seat analysis in the cascade down from $147 to the mid-thirty level, this price recovery to a one-year high speaks wonders about how to manage your assets.
I had a chance to catch up with the core group of oil ministers, senior executives and those who consult the industry at the annual Oil and Money conference in London. Prices are double what they were a year ago, when we did not know whether some of the world’s money center banks would be able to keep their doors open. But, this steady march back to the current level makes a lot of sense.
The OPEC supply management club and a lack of oil are two key elements, but what else is driving this market? Especially when you consider that one half of the world – the East - has recovered while the other half – the West - is in danger, economically speaking, of being parked in neutral?
This requires a two-part answer: one deals with getting access to the giant fields, according to Jonathan Stern of the Oxford Institute for Energy Studies. The other with political uncertainty in countries such as Nigeria, Iran and Venezuela.
“What we are looking at here is really quite expensive oil that you need at least a $40-50 oil price to be confident you will make a decent return on,” commented Stern.
The market was quite excited about new finds in the Gulf of Mexico, off the coast of Brazil, and in Kazakhstan. They are promising and seemed to surprise even the most seasoned hands in the business. The problem is that the older fields in the Middle East and the North Sea, for example, are dropping fast and replacement costs are much higher today than four decades ago.
After the new promising discoveries of the past year, there is less discussion about “peak oil” – where oil production is in steady decline - but the $80 price may be pointing to a new era. “The low-hanging fruit has already been taken,” says Vahan Zanoyan, Chief Executive Officer of First Energy Bank in Bahrain, “After 40 years of this process, it is not surprising that all of what is left are the tough ones.”
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