Patents

Innovation

April 30, 2008 - Since February 2007, Coalition for Patent Fairness has spent $2.5 million for lobbyists; Coalition for 21st Century Patent Reform (about 50 companies, including pharmaceutical and biotech companies) that guard their intellectual property, likely to sue to protect their patents) has paid $1.8 million to lobbyists to influence legislation which calls for the biggest changes in United States patent law in more than 50 years. Major impetus for the patent legislation is the desire of technology companies to limit the damage awards and legal costs they sometimes face when they are accused of infringing patents.

2007 - Number of patent applications (467,243) has nearly doubled in last 10 years, more than tripled since 1987.

What Matters to MBA Students

Education & Learning

April 27, 2008

New-Home Sales - 17-Year Low; Supply of Homes - 27-Year High

Real Estate

U. S. Commerce Department estimated:

1) New-home sales plunged by 8.5% to a 17-year low in March,
2) Seasonally adjusted annual rate of 526,000 was much weaker than the 577,000 pace expected by economists,
3) New-home sales down 36.6% compared with 2007;
4) April 2008 supply of homes on the market rose to 11 months, the most in 27 years,
5) Median sales prices have fallen 13.3% in the past year to $227,600.

Final Subprime Tally - $300 billion Lost, $160 Billion Raised?

Banking

Charles Babbage - 1849-2008

Computers

1849 - Charles Babbage invented a massive calculating machine, Difference Engine No. 2 (never completed); precursor of modern computers; used Victorian-era rods, gears, levers and linkages to perform complex mathematical calculations with 31 digits of precision.

1991 - Engineers and curators at London's Science Museum used Babbage's 20 pages of blueprints to finally complete the machine (8,000 parts of bronze, cast iron and steel, weighs five tons, measures 11' long and 7' high).

2008 - Second Difference Engine built (over a 3½-year period by engineers at London's Science Museum), funded by Nathan Myhrvold, former Chief Technology Officer at Microsoft. Delivered to Computer History Museum (Mountain View, CA) - on display for one year, beginning May 10, 2008















(source: http://www.wired.com/images/slideshow/2008/04/gallery_babbage/1.jpg)

Reading:

Non-Fiction: Doron Swade (2001). The Difference Engine: Charles Babbage and the Quest to Build the First Computer. (New York, NY: Viking, 342 p.). Technology Historian and Assistant Director of London's Science Museum. Babbage, Charles, 1791-1871; Calculators--Great Britain--History--19th century. 1821 - Inventor and mathematician Charles Babbage reviewed set of mathematical tables, found excess of errors in the results; began lifelong enterprise to design, build mechanical calculating engine, world's first computer; Babbage's 19th-century quest to build calculating machine, author's successful attempt to build replica for bicentennial of Babbage's birth.

Fiction: (Computers), William Gibson, Bruce Sterling (1991). The Difference Engine. (New York, NY: Bantam Books, 429 p.). Babbage, Charles; Difference Engine No. 2; Computers--Fiction. 1885 - Industrial Revolution is in full swing in scientifically advanced London, governed by an intellectual elite led by Prime Minister Byron, powered by steam-driven, cybernetic engines (computers). Charles Babbage perfects Analytical Engine, and the computer age arrives a century ahead of its time. Young paleontologist comes into possession of a dangerous set of perforated cards, once in the possession of an executed Luddite leader's daughter, later in the hands of "Queen of Engines" Ada Byron (daughter of prime minister Lord Byron), finally given to scientist Edward Mallory who knows the cards are a gambling device that can be read with a specialized Engine; soon threatened and libeled by the Luddites, and he and his associates confront the scoundrels in a violent showdown.

Hedge Funds - 2008

Investing Advisors


April 2008 - HedgeFund Intelligence reported:

1) Global hedge fund industry assets rose to $2.65 trillion at the start of 2008 (27% growth in assets year-to-year from the $2.079 trillion in 2007, 6.6% growth in the second half )

2) Average hedge fund lost 4.4% in the first quarter (BarclayHedge Fund Index)

3) More than 390 firms globally run hedge fund assets of $1 billion or more (combined assets of $2.083 trillion, nearly 80% of industry assets),

4) 144 /390 firms based in New York (up from 123 firms in 2007),

5) 75/390 firms based in London (remains dominant hedge fund center in Europe),

6) Top 22/390 firms in Europe run 44% of European assets (up from 37% in 2007).

Money & Happiness - Correlation?

Economics

1974 - Richard A. Easterlin, University Professor and Professor of Economics (University of Southern California) published "Does Economic Growth Improve the Human Lot?" in Paul A. David and Melvin W. Reder, eds., Nations and Households in Economic Growth: Essays in Honor of Moses Abramovitz (New York: Academic Press, Inc.); suggested that despite stellar economic growth in United States since World War II, "higher income was not systematically accompanied by greater happiness"; later found that people were no happier in Japan in 1987 than in 1958, despite a fivefold jump in incomes; called the "Easterlin Paradox" - fact that average self-reported happiness has not risen with average income.

April 2008 - Betsey Stevenson and Justin Wolfer, University of Pennsylvania economists, rebutted the Easterlin Paradox; argue that money indeed tends to bring happiness, even if it doesn’t guarantee it; absolute income seems to matter more than relative income; people in richer countries are more satisfied (is wealth is causing their satisfaction.? Could results reflect cultural differences in how people respond to poll questions?); has satisfaction risen in individual countries as they grew richer? (yes, in some; no in United States, China); economic growth, by itself, not enough to guarantee people’s well-being but its consequences can contribute to satisfaction.

(source: Betsey Stevenson and Justin Wolfer, Wharton School at University of Pennsylvania)

Confidence Lowest in 26 Years = Diffidence

Economics


April 11, 2008 - Preliminary Reuters/University of Michigan index of consumer sentiment (monthly survey of consumer attitudes and expectations about the U.S. economy conducted by the U-M Institute for Social Research (ISR) since 1946 as a gauge of consumer anticipation of changes in the economic environment) fell to 63.2 for April — its lowest point since March 1982 — from 69.5 in March, according to Dow Jones Newswires. Economists polled by Thomson/IFR (International Financing Review) had, on average, expected a reading of 68.

Airlines - Bankruptcy

Airlines

April 11, 2008 - Frontier Airlines (Denver, CO) became 5th low-fare carrier (Aloha Airgroup, ATA, Maxjet Airways, Skybus) to file for Chapter 11 bankruptcy protection in growing shake-up of global aviation record oil prices, weakening economic growth, inability to raise fares (Frontier raised average fare 21 cents over prior period, to $102.97, in nine months ended Dec. 31) = cutting domestic capacity, grounding older aircraft.

Ultimate Business Club

Family Business


1980 - Gérard Glotin, Chairman of Marie Brizard (creator of first anisette in 1755) identified 74 companies with company longevity (minimum age of 200 years), permanence (family must be owner of company or majority share holder, one member of founder must still manage company or be member of board), in good financial health, modern; 30 selected; 1981 - first meeting of Heniokiens Association of Family and Bicentenary companies in Bordeaux; named for Henok (or Enoch), great patriarchs (Caïn’s son, Methuselah’s father, lived before flood, was 365 years old when he ascended to Heaven without having died); 2007 - 40 members in craft industries, trades, services, publishing, heavy industry: 15 Italian, 10 French, 4 German, 1 Dutch, 1 from Northern Ireland, 4 Japanese, 1 Belgian, 2 Swiss (at head of their companies, unique, dynamic managers).


Henokiens Association of Family and Bicentenary Companies http://www.henokiens.com
Members of the Henokiens Association, meet four criteria: they have reached a minimum age of 200 years, they are managed by a descendant of the founder, the family still owns the company or is the majority share holder and they are in good financial health.

Compensation

Executive Compensation

1994 - Average pay for chief executives was 90 times average worker pay; 2005 - Average pay for chief executives was 179 times average worker pay; 1995-2005 - Average worker pay rose by a total of only 8%; median pay for chief executives at 350 largest companies rose 150%.

(source: Congressional Research Service)

Postage

Office Equipment

May 12, 2008 - Price of first-class postage: $.42 (1971 - postal service office became quasi-governmental; 1983 - stopped public subsidization).

Citi/Travelers - Little Late To Say You're Sorry

Banking

April 6, 1998 - Citibank announced agreement to merge with Travelers Insurance; $166 billion merger largest ever to date. Viewed as a new era in finance, a one-stop shop for consumer and corporate customers; October 8, 1998 - completed, renamed Citigroup.

April 4, 2008 - John Reed, CEO of Citicorp in 1998, said the 1998 merger was a “mistake that failed to benefit the financial services conglomerate’s investors, customers and employees; turned out to be a “sad story. The stockholders have not benefited, the employees certainly have not benefited and I don’t think the customers have benefited because our franchises are weaker than they have been."

Citigroup 10-Year Stock Price Performance: April 6, 1998 (closed at $36.50 after announcement of merger with Travelers Group) - April 2, 2008 ($24.02 per share).

(source: http://bigcharts.marketwatch.com)

Female Professionals and Divorce

Women

A) Robin Fretwell Wilson, Professor of Law at Washington & Lee University, analyzed data on new professionals in business, law and medicine (part of a National Science Foundation Survey of 100,000 professionals); found that:

1) women with MBAs (12%) were twice as likely to divorce or separate as their male counterparts (5%). Large number of professionals, especially women, remain in the workplace, "opt out" of having families;

2) women with law (10%) or medicine (9%) degrees divorced less often than those with bachelor's degrees but were still more likely to divorce than male counterparts (7% of male lawyers, 5.1% of male doctors).

B) Sylvia Ann Hewlett, economist and founding president of the Center for Work-Life Policy, conducted a 2001 study of high-achieving women (high earners, graduate degrees). Found the more women earned, more likely they would be single and without children.