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Tuesday, May 4, 2010

Be careful when you send e-mails, you can get into trouble!

Never underestimate the power of e-mail

HAVE you ever written an e-mail about someone and sent it to the same person when your intention was to send it to somebody else?

Have you written an angry e-mail and decided that it would be better not to send it, and then accidentally press the “Send” button anyway?

Are you still naive enough to think that anything inappropriate you send out will not come back to haunt you one of these days?

Goldman Sach’s bond trader Fabrice Tourre, who calls himself Fabulous Fab, has learnt the hard way that there are no secrets when it comes to e-mail.

His most famous e-mail that is now broadcast to the whole world went like this: “More and more leverage in the system. The whole building is about to collapse anytime now … Only potential survivor, the Fabulous Fab … standing in the middle of all these complex, highly leveraged exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”

And if that is not enough, even his amorous e-mail exchange with “a gorgeous and super-smart French girl” is now a matter of public record.

For Tourre and other Goldman Sachs executives questioned by the Senate’s Permanent Subcommittee on Investigations last week, their e-mail trail going back to 2007 has provided much of the ammunition for the senators to grill them with.

Whether e-mail or SMS, the reality is that anything we put in writing is potentially a disaster waiting to happen.

If you don’t believe me, you should buy the book Great Email Disasters by Chas Newkey-Burden.
His book, published in 2007, is still selling well.

Asked by a Reuters reporter about Tourre’s e-mail indiscretions, he said, “People have always been indiscreet. We just have more power to mess up at our finger tips.”

According to the author, e-mail is convenient but highly dangerous. With an ill-considered click of the mouse, you can humiliate yourself in front of millions, lose your job or even end up in court.

Let’s get real. All of us commonly use office e-mail for private purposes. Although we are advised to keep our office and private e-mail separate, they often gel into one.

When we give out our name cards, our friends and contacts will often use our office e-mail to communicate with us, even on non-official matters.

Sometimes, we get unsolicited e-mail that may be deemed highly inappropriate from our company’s point of view but they still get through despite the various filters the IT department has put in.

I guess some will say this is an occupational hazard and part of the harsh reality of life in such an interconnected world. But we should never underestimate the power of the e-mail, and its potential of making us from a nobody to an instant celebrity.

  • Deputy executive editor Soo Ewe Jin was inspired to write this week’s column after watching “My Best Friend’s Wedding” on DVD where the character played by Julia Roberts wrote a fictitious e-mail to wreck her best friend’s wedding. And the Goldman Sachs proceedings too, of course.

  • Europe’s turn to face debt crisis

    In the past, developing countries including in East Asia faced debt crises and suffered from IMF loan conditions. Today, a debt crisis has emerged in Western Europe that threatens the chances of a global recovery. 

    THE global economy is slipping into a new crisis, with Greece being the epicentre and several other European countries already experiencing contagion effects.

    It is quite surprising that Western Europe, considered a model of good economic governance, is now having to deal with a debt crisis.

    Years and decades ago, debt crises hit Africa, Latin America and Asia as well as Russia and Eastern Europe.
    The developing countries affected had always been accused of causing their own problems, with the faults variously attributed to corruption, mismanagement, bad governance and crony capitalism.

    Greece is accused of fiscal irresponsibility, building up huge government debts and cooking the books to hide the extent of its deficits.

    But it is increasingly difficult to ignore structural factors that contributed to the financial crises through the years.

    If the lessons had been learnt from the Asian crisis that started in 1997, perhaps this European crisis would not have happened.

    On the other hand, it is also vital to learn from Europe’s crisis so that Asia and other developing regions will not fall into new financial crises.

    In Africa and Latin America, governments had taken too much foreign loans and crises developed when they did not have enough foreign exchange to service the debts.

    In many cases, this was due to the fall in the countries’ commodity export prices, the rise in their oil import prices, increased trade deficits or economica lly unfeasible projects.

    These crises exploded the myth that foreign loans to governments were safe as they could not default.
    The pendulum then swung and it was thought to be safe to lend to the private sector as it would use the loans for profitable ventures.

    The Asian crisis arose when too much foreign funds went to local companies.

    This was made possible by financial liberalisation and deregulation. Thailand, South Korea and Indonesia relaxed the rules that had prevented locals from taking loans denominated in foreign exchange, and companies in each of these countries took foreign loans of over US$100bil (RM318bil).

    The relaxation of rules also enabled foreign funds and firms to engage in currency speculation and manipulation.

    The resulting collapse of the Thai baht had contagion effects on Indonesia and South Korea.

    The three countries’ currencies depreciated and they faced default on their foreign loans and had to turn to the IMF.

    Malaysia’s currency also depreciated sharply but it did not face a default situation because some regulations on foreign loans to local companies had been retained.

    The Asian crisis exploded the myth that foreign loans to companies were safe because the private sector will make correct loan calculations and invest in profitable projects.

    Now, the European crisis is exploding the myths that European countries are well governed economically, that there is no or little risk in loans to their governments, and that countries within the Eurozone are especially safe, as any nation in trouble will be helped by the others.

    Many European governments have built up large debts and the loans have to be rolled over or new bonds have to be issued to service old loans and fund new budget deficits.

    Greece has been struggling to obtain fresh credit to avoid a default on loans due this month.

    It tried to raise new cash through the market but the interest has been priced so high due to the risks perceived that the government was unable to afford market loans.

    For months, Greece has sought a loan package (at less than market rate) from Eurozone countries and the IMF but the terms and amount were still being haggled over, with Germany in particular insisting on stringent policy conditions.

    Speculators have been blamed, including by some European governments, for making the situation worse by accentuating the increase in risk premium on Greek debt and the decline in the euro.

    Last week, credit rating agency Standard and Poor’s downgraded Greek government debt (to junk status) as well as the debt of Portugal and Spain.

    This triggered panic until moves for a final Eurozone-IMF package calmed the situation at the week’s end.
    The package is now expected to be €120bil (RM508bil) to cover three years’ needs.

    Even then a number of economists have concluded that eventually Greece needs a restructuring of its debts, with creditors and bond-holders taking a “haircut” or a partial repayment.

    According to them, it is better for an orderly debt workout up-front now rather than a prolonged crisis and a possible messy default and unilateral restructuring later.

    The fallout of a Greek default can be serious as European banks have US$189bil (RM601bil) exposure to Greek loans.

    They also have claims of US$240bil (RM764bil) on Portugal and US$851bil (RM2.7tril) on Spain, according to a Financial Times article.

    There are concerns that the crisis may spread to other countries through contagion.
    According to OECD data, in 2010 the public debt to GDP ratios are 95% for Greece, 63% for Portugal, 42% for Spain and 38% for Ireland.

    The public budget deficits are 9.8% of GDP in Greece, 7.6% in Portugal, 8.5% in Spain and 12.2% in Ireland.

    Meanwhile, these countries are preparing austerity measures that are bound to cause a lot of pain.
    In return for the loan package, Greece is asked to drastically cut government spending, salaries and allowances, freeze government jobs, overhaul the pension scheme and close state entities.

    The angry reaction to this news in violent street demonstrations over the weekend shows how difficult it will be for Greece to agree to these terms.

    When the measures are implemented, the reactions will be stronger. Asia can learn from this evolving European crisis.

    It cannot be expected that governments can almost automatically roll over their debts or successfully float new bonds at reasonable interest rates.

    Governments have to be disciplined in managing public finances and in limiting deficits and debts.
    There also has to be the re-regulation of finance to avoid excessive leverage, speculation and unethical practices.

    Global Trends by MARTIN KHOR

    8 Sessions You Shouldn’t Miss at Web 2.0 Expo

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    Tomorrow’s web is being built by a vast community of programmers and designers spread around the globe. They’re all forging new paths on their own, but it’s when they find the occasion to get together and compare notes that the sparks really fly.

    Such a gathering is happening this week in San Francisco at the Web 2.0 Expo, a conference put on every six months or so by tech publisher O’Reilly.

    Just like other developer conferences, there’s an expo floor and parties at night, but the meat of the event is the mix of talks, hands-on sessions, keynotes and presentations about all things web. There are sessions on browsers, Flash, HTML5, geolocation, JavaScript, advertising platforms, cloud computing and online communities.

    It can all be a bit much, so here are our picks for the sessions you simply shouldn’t miss at the Web 2.0 Expo. Certainly, there will be others of great importance to you depending on your area of expertise (and you can view the full schedule here), but these are the sessions that we Webmonkeys are most looking forward to.
    All sessions are taking place at Moscone West in San Francisco. The conference sessions start Tuesday and run through Thursday morning. Intensive educational tracks are taking place Monday, May 3. Follow coverage here on Webmonkey and on Twitter under the hashtag #w2e.

    HTML5 vs. Flash: Webocalypse Now?

    Tuesday, 10:00am, room 2001
    Design guru and author Eric Meyer leads this discussion about the future of Flash on the HTML5-powered web. Don’t expect a Flash-bash session, though. It’s true that Flash has been taking a beating lately, but it still has a place in the modern, media-saturated web. Meyer will examine issues central to the Flash vs. HTML5 debate, including openness, security and performance.

    A Conversation with Paul Buchheit

    Tuesday, 4:10pm, Main Hall
    This keynote interview will occur on the main stage, as Web 2.0 Expo program chair Sarah Milstein dishes the tough questions to Facebook’s Paul Buchheit. Now one of Facebook’s lead engineers, Buchheit originally arrived at the social networking giant when it acquired his start-up, FriendFeed (he was also one of the engineers behind Gmail at Google). Facebook has since incorporated many of FriendFeed’s innovations around real-time social publishing into its core product, the constantly-updating News Feed that scrolls down your Profile page. But that’s just the beginning of Buchheit’s story at Facebook. We can expect some discussion around the company’s new Open Graph platform it launched in April.

    A Conversation with Kevin Lynch

    Wednesday, 9:30am, Main Hall
    On Wednesday morning, Adobe CTO Kevin Lynch takes the hot seat. He’ll be answering questions about the future of Flash on the open web, on Apple and Android devices, and on developer’s desktops as a programming environment. Lynch often stays close to the Adobe script, but it’s likely that whatever he says will add fuel to the HTML5 vs Flash debate — already a heated topic among browser vendors, mobile device makers, and proponents of open web technologies. Web 2.0 Expo program chair Brady Forrest is the interviewer.

    The Search Platform: Friend Or Vampire?

    Wednesday, 10:15am, Main Hall
    Where do you get your news? If you’re getting it from Google, content providers like Rupert Murdoch are gunning to shut down your favorite delivery system. There’s currently a lot of chatter about whether search providers have the right (via fair use) to reprint excerpts of the news articles they’re linking to, and most of the negative rhetoric is being voiced by news publishers. But on a searchable web governed by the link economy, there has to be a balance between linking and re-publishing for anyone to extract any value. Danny Sullivan of the Search Engine Land blog breaks down what it will take for search engines and publishers to get along.

    What to Expect from Browsers in the Next Five Years

    Wednesday, 11am, room 2006
    This open discussion examines where the browser is headed next. No doubt, it will be smaller (fits in your pocket!) and more powerful. And it will probably handle your identity on social networking sites and play videos without plug-ins, too. Ajaxian editor Dion Almaer moderates the panel, and Yahoo’s Douglas Crockford (a JavaScript guru), Mozilla’s Brendan Eich, Opera’s Charles “chaals” McCathieNevile, and Microsoft’s Giorgio Sardo are the panelists.

    The Innovative APIs Fueling Location on the Web

    Wednesday, 3:40pm, room 2006
    Former Webmonkey contributor Adam DuVander runs down all of the free tools available on the web for creating geodata-driven location-aware applications. Before you go, also check out Adam’s most recent project: Geomena, an open database of wi-fi access points you can use for geolocation.

    State of the Internet Operating System

    Thursday, 9:00am, Main Hall
    Mr. Web 2.0 Tim O’Reilly kicks off the final day of the conference with his keynote presentation on what he calls the “internet operating system,” the collection of technologies and concepts — hardware sensors, identity, mobile phones, location APIs, advertising, cloud-based processing, et cetera — that are shaping the future of computing. Tied to our desktops no longer we are, young Jedis.

    Web Fonts: The Time Has Come

    Thursday, 1:00pm, room 2001
    This panel looks at the state of typography on the web, and as you may be able to guess from the title, these guys think things are looking up. Fonts aren’t as limited as they used to be, thanks to innovations in CSS, JavaScript and web services like Typekit, which dole out really nice-looking fonts across the web using a new licensing model. Jeff Veen of Typekit is the moderator, and panelists include FontShop’s Stephen Coles and JQuery’s Paul Irish. For a preview on this topic, check out the very first episode of The Big Web Show, which discusses web fonts and features Veen as a guest.

    By Michael Calore
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