26 November 2004

Goodbye And Farewell Baring Asset Management

The Economist today reports the sale by ING of Baring Asset Management;

ING agreed to sell Baring Asset Management to two American firms. Northern Trust will pay the Dutch giant some �260m ($489m) for Baring's financial-services business, while MassMutual will pay an undisclosed sum for the investment-management business.

I was at BAM when Nick Leeson and the management succeeded in selling the business to ING for GBP1 and some fairly large debts. Given what came later at LTCM it was pretty small fish.

It was a great learning experience. My boss, Richard Sobel, taught me a huge amount about the Russian venture capital, private equity business. What the organization taught me though was as important. Treat people like human beings and not as cattle. Seniority, or time served, does not equal a divine right to be respected or paid like a king whilst the performers are kept down in concerns about over-spending.

I joined BAM pretty much straight out of the Army. The Army is a hierachical organization but it was clear when orders were being followed because they were orders and when it was done from respect. Senior management never learnt that lesson.



25 November 2004

Russian's Go Home

Some 25% of all Israeli's holding with higher education received their education in Russia or the former Soviet Union. And now they are comig back Israel faces Russian brain drain from our friends at the BBC.

If Russia can get at least some of their entrepreneurialism that would be a good thing.
Russian Consumer Confidence Crisis?

Since the beginning of September retail consumer spending seems to be down anywhere between 30-50%. The evidence:

  • A high-to-mid end consumer electronics distributor (-30% versus forecast) who are pleased with themselves because they are still outperforming their competitors. They are no longer serving one of the larger retailers who they believe will soon fail.
  • A direct marketing organization. Again 20-30% down against forecast (up to August they were both outperforming against plan)
  • A residential real estate company which says that to the extent that deals are being done at all prices are down 50% since pre-summer.
  • An advertising agency which reports that car sales have stalled - "there are no cars being sold" since the summer
  • another advertising agency which reports that its staff are unhappy because their pay is $ -indexed and inflation is Rbl-indexed. The Agency is considering billing in Rbls and having to lift prices in line with inflation.
There are two more sources, both from the FMCG world, which concur but which I am not even allowed to hint at.

At the end of September people believed that it was due to Breslan, and that the stoic Russian spender would be back in full spend mode by at least November. With November just about done it looks like it will be worse than September, and November should be a good month. If the December 12th holiday weekend does not see foot-traffic back in the malls the BRIC story may become a tired much chewed BIC. Ikea are due to open Mega2 (large malls alongside their ubiquitous stores) that weekend. Mega1 was a blowout affair with km's of traffic jams in a blizzard. Mega2 may well be an opening flop.

Which pretty much leaves us with a shift from $s to Euros as a quick 20% price rise along with another 20+% of Rbl inflation in core purchases (food etc) whilst the Rbl/$ exchange rate has gone from close to Rbl30:$1 to Rbl28:$1. The last data point above comes from my wife's BTL agency business. Her staff, predominantly young & female are feeling poor and it is becoming increasingly difficult to hire event staff (job description; young, female, good looking, ability to stand up) at the $-indexed price they have been offering. She reports that this is predominantly a Moscow phenomenon; the Regions usually take a while to catch on.

I guess that it will take another quarter before the Central Bank starts to pay attention. Whither the Rbl? To 30 or even more aggressive?

Is this Russia's version of the Dutch disease? Given that there is shockingly little domestic manufacturing maybe its the consumer who will take the smacking instead. Not that the super-Rich care.

Update: Confirmed by a foreign car manufacturer

23 November 2004

Russia Teaches Ukraine How To Steal Elections

Some coverage from the Moscow Times on the theft of the Ukrainian election Outrage as Yanukovych Takes the Lead. I spent some time yesterday with a Soviet era bureaucrat who has made himself unbelievably wealthy through some insider gas deals. We spoke briefly about the elections (it was his money I wanted) he believes that there will be real trouble in the Ukraine.

It only goes to prove that ex-KGB men are brilliant at stealing elections - just less good at knowing what to do once they have stolen them. For those who have yet to work out that I am British (Scotish) note that this is called under-statement.

17 November 2004

Stupidity of the Highest Order

Up until this point I have been a strong supporter of Andrei Fursenko who has shown himself to be an intelligent and critical minister. Thisrubbish on resticting the Internet does not sound like him. Maybe the geniuses who have failed to corrupt elections in Abkahazia (its about 1,000km after nowhere on your map) and the Ukraine (only marginally closer) have realized that television is not the only information medium.

09 November 2004

Battery Power and Skype

A long term sceptic of Skype's ability to disrupt mobile communications I was just made very aware of how good it is.

A call from Palo Alto (Sand Hill Road to be precise) to my Moscow mobile roaming in Zurich could not connect - lots of SS7 messages agreeing that we were talking but no sound. Log in to the WiFi network and Skype away (w/o headset and mike; is it worse to hear the whole conversation but not understand or is hearing only one way worse?) But I went from 20% of battery power to critical in less than 10 minutes. That's not sustainable.

A conference I went to a year ago mapped various tech advances against battery advances. It had to be on a log scale so that battery power did not merge with the x-axis.

01 November 2004

Video Google

Check out this quotation;

There will need to be a Google of video -- a means of helping people find what they want. And, no, that's not just about creating a search engine. It's about capturing the metadata we create when we watch and share things and making sense of it. It's not trivial but it's vital for without a great guide, we'll never find the programming we want and this new medium won't work. This video Google thing will be the next Google and TV Guide and it will be big. And I doubt that either Google or TV Guide will be the one to create it.

from BuzzMachine... by Jeff Jarvis

I'm so confused about listening to music on my iPOD - some albums should be listened to as albums, sometimes it's great to listen to mixed up songs. Before digital music you looked at an album cover that was close to the top of your CD collection and the picture would conjure up an sound......The same is sort of true finding programs on the TV, be it cable or broadcast.

iPOD's and PVR's (TIVO's etc) change all that. In addition, as Jarvis points out, content is increasingly indivualised, or is that not big-corporate, so it's not as though you know where to find it, or where you find it, or whether it's what you want to listen to.

So something new is required.

26 November 2004

Goodbye And Farewell Baring Asset Management

The Economist today reports the sale by ING of Baring Asset Management;

ING agreed to sell Baring Asset Management to two American firms. Northern Trust will pay the Dutch giant some �260m ($489m) for Baring's financial-services business, while MassMutual will pay an undisclosed sum for the investment-management business.

I was at BAM when Nick Leeson and the management succeeded in selling the business to ING for GBP1 and some fairly large debts. Given what came later at LTCM it was pretty small fish.

It was a great learning experience. My boss, Richard Sobel, taught me a huge amount about the Russian venture capital, private equity business. What the organization taught me though was as important. Treat people like human beings and not as cattle. Seniority, or time served, does not equal a divine right to be respected or paid like a king whilst the performers are kept down in concerns about over-spending.

I joined BAM pretty much straight out of the Army. The Army is a hierachical organization but it was clear when orders were being followed because they were orders and when it was done from respect. Senior management never learnt that lesson.



25 November 2004

Russian's Go Home

Some 25% of all Israeli's holding with higher education received their education in Russia or the former Soviet Union. And now they are comig back Israel faces Russian brain drain from our friends at the BBC.

If Russia can get at least some of their entrepreneurialism that would be a good thing.

Russian Consumer Confidence Crisis?

Since the beginning of September retail consumer spending seems to be down anywhere between 30-50%. The evidence:

  • A high-to-mid end consumer electronics distributor (-30% versus forecast) who are pleased with themselves because they are still outperforming their competitors. They are no longer serving one of the larger retailers who they believe will soon fail.
  • A direct marketing organization. Again 20-30% down against forecast (up to August they were both outperforming against plan)
  • A residential real estate company which says that to the extent that deals are being done at all prices are down 50% since pre-summer.
  • An advertising agency which reports that car sales have stalled - "there are no cars being sold" since the summer
  • another advertising agency which reports that its staff are unhappy because their pay is $ -indexed and inflation is Rbl-indexed. The Agency is considering billing in Rbls and having to lift prices in line with inflation.
There are two more sources, both from the FMCG world, which concur but which I am not even allowed to hint at.

At the end of September people believed that it was due to Breslan, and that the stoic Russian spender would be back in full spend mode by at least November. With November just about done it looks like it will be worse than September, and November should be a good month. If the December 12th holiday weekend does not see foot-traffic back in the malls the BRIC story may become a tired much chewed BIC. Ikea are due to open Mega2 (large malls alongside their ubiquitous stores) that weekend. Mega1 was a blowout affair with km's of traffic jams in a blizzard. Mega2 may well be an opening flop.

Which pretty much leaves us with a shift from $s to Euros as a quick 20% price rise along with another 20+% of Rbl inflation in core purchases (food etc) whilst the Rbl/$ exchange rate has gone from close to Rbl30:$1 to Rbl28:$1. The last data point above comes from my wife's BTL agency business. Her staff, predominantly young & female are feeling poor and it is becoming increasingly difficult to hire event staff (job description; young, female, good looking, ability to stand up) at the $-indexed price they have been offering. She reports that this is predominantly a Moscow phenomenon; the Regions usually take a while to catch on.

I guess that it will take another quarter before the Central Bank starts to pay attention. Whither the Rbl? To 30 or even more aggressive?

Is this Russia's version of the Dutch disease? Given that there is shockingly little domestic manufacturing maybe its the consumer who will take the smacking instead. Not that the super-Rich care.

Update: Confirmed by a foreign car manufacturer

23 November 2004

Russia Teaches Ukraine How To Steal Elections

Some coverage from the Moscow Times on the theft of the Ukrainian election Outrage as Yanukovych Takes the Lead. I spent some time yesterday with a Soviet era bureaucrat who has made himself unbelievably wealthy through some insider gas deals. We spoke briefly about the elections (it was his money I wanted) he believes that there will be real trouble in the Ukraine.

It only goes to prove that ex-KGB men are brilliant at stealing elections - just less good at knowing what to do once they have stolen them. For those who have yet to work out that I am British (Scotish) note that this is called under-statement.

17 November 2004

Stupidity of the Highest Order

Up until this point I have been a strong supporter of Andrei Fursenko who has shown himself to be an intelligent and critical minister. Thisrubbish on resticting the Internet does not sound like him. Maybe the geniuses who have failed to corrupt elections in Abkahazia (its about 1,000km after nowhere on your map) and the Ukraine (only marginally closer) have realized that television is not the only information medium.

09 November 2004

Battery Power and Skype

A long term sceptic of Skype's ability to disrupt mobile communications I was just made very aware of how good it is.

A call from Palo Alto (Sand Hill Road to be precise) to my Moscow mobile roaming in Zurich could not connect - lots of SS7 messages agreeing that we were talking but no sound. Log in to the WiFi network and Skype away (w/o headset and mike; is it worse to hear the whole conversation but not understand or is hearing only one way worse?) But I went from 20% of battery power to critical in less than 10 minutes. That's not sustainable.

A conference I went to a year ago mapped various tech advances against battery advances. It had to be on a log scale so that battery power did not merge with the x-axis.

01 November 2004

Video Google

Check out this quotation;

There will need to be a Google of video -- a means of helping people find what they want. And, no, that's not just about creating a search engine. It's about capturing the metadata we create when we watch and share things and making sense of it. It's not trivial but it's vital for without a great guide, we'll never find the programming we want and this new medium won't work. This video Google thing will be the next Google and TV Guide and it will be big. And I doubt that either Google or TV Guide will be the one to create it.

from BuzzMachine... by Jeff Jarvis

I'm so confused about listening to music on my iPOD - some albums should be listened to as albums, sometimes it's great to listen to mixed up songs. Before digital music you looked at an album cover that was close to the top of your CD collection and the picture would conjure up an sound......The same is sort of true finding programs on the TV, be it cable or broadcast.

iPOD's and PVR's (TIVO's etc) change all that. In addition, as Jarvis points out, content is increasingly indivualised, or is that not big-corporate, so it's not as though you know where to find it, or where you find it, or whether it's what you want to listen to.

So something new is required.