*michael parekh on IT*

ON A VIDEO HOMAGE RE-IMAGINED

ROCKS AND ROLLS

One can't be too sure about most things these days, but one thing that is almost a sure thing is that the query "#TBRB" is going to be one of the top trending topics on Twitter within a day or two of September 9th.  TBRB, as Dan Neil of the LA Times explains, stands for "The Beatles: Rock Band", and

"... will consume much of the industry's advertising bandwidth this summer ahead of its Sept. 9 release.
A collaboration between MTV Games' Harmonix and the Beatles' Apple Corps Ltd., TBRB -- which had its press debut at the E3 gaming convention in Los Angeles this month -- lets players stand in the Beatles' pointy Italian boots, singing and playing along on peripherals fashioned to look like Paul McCartney's Hofner bass and Ringo Starr's Ludwig drum kit. That's coolness measured in Kelvins."

The reason this piece merits a complete read in my view is this description of how the game is introduced to millions who are both familiar, and not too familiar with what made the "Fab Four" so cool:

"Summing up the Beatles' story is no easy task, and yet -- as per the conventions of video game design -- a summing up of the story, a reprise of the narrative world, must be built into the game itself. These mini-movies are called "cinematics," and they usually appear when the game is booted up. They are also crucial parts of a game's advertising campaign, amounting to online commercials that air endlessly and freely on YouTube and Hulu. These films are a rare instance of meritocracy in advertising art; the better they are, the more they get watched.
For TBRB, Harmonix called on London's Passion Pictures and director Pete Candeland, who have created one of the most beautiful and compelling animated sequences I have ever seen, a pocket masterpiece that in its surrealistic bravura is worthy of "Sgt. Pepper" and "Yellow Submarine." It's also startling in its economy, telling the Beatles' saga in 2:45 minutes. Not bad for a video game."

He goes on to describe in detail how this piece is laid out, and is worth reading even though it may be a bit of a spoiler when we all get to see the clip on YouTube, and when the game is out.   Sounds like it's quite a bit of work, and does it's subject ample justice.

ON A NEW PLAYBOOK FOR CHRYSLER

SOMETHING BORROWED

Normally a story on how one auto company plans on turning around another post a merger would not be head turning in the current environment where all auto companies, especially US ones, seem to be driving in only one direction.  But Time magazine's story on how the CEO of Fiat, Sergio Marchionne, plans on making it's investment in Chrysler a success, caught my eye with this bit:

"Since he took over as chief executive of Italy's Fiat in 2004, the chain-smoking Canadian Italian has used Apple as a model, focusing on the way Steve Jobs transformed it from an also-ran computer company into a global icon of cool. 

He encourages Fiat managers to take a close look at Apple's branding prowess and even asks them to benchmark their activities against the company. 

His biggest success at Fiat is the 500 — a tiny, very cool 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren — which Marchionne calls "our iPod."

Apparently, Mr. Marchionne intends on using a similar playbook at Chrysler, where his company starts with a 20% stake, that could go as high as 35% depending on how the turnaround goes:

"Marchionne is likely to hew closely to the playbook he used to revive Fiat. On June 10, the day Fiat sealed the deal, he announced a thorough organizational revamp. From now on, each of the four individual brands — Chrysler, Jeep, Dodge and Mopar (which makes parts) — will be distinct business units responsible for profit and loss. He also reached deep into the ranks, bypassing the engineers and putting a younger, energetic generation of managers with marketing experience in charge of the brands. "That's a mirror image of what he did at Fiat," says a longtime Fiat executive. Next up: installing Fiat production platforms at Chrysler plants and using Fiat's sales network to sell Jeeps and other Chrysler models around the world."

Who knows, Mr. Marchionne may even come up with a way to make a car dealership as fun to go to as an Apple store.

ON RISKS OF A DOLLAR CARRY TRADE

SLIP-SLIDING AWAY

Barron's this weekend has a piece that may make one's head hurt at first reading, but is important enough to read twice.  Appropriately titled "Money for nothing and bucks for free", the piece makes the following point:

"The dollar could become the main funding source for the carry trade. To review, the carry trade consists of borrowing cheaply to invest in something with a higher return. ("Carry" in this instance refers to the cost of holding or "carrying" an inventory, be it a commodity or a security, which mainly consists of financing charges.)

The preferred way to fund the carry trade had been to borrow in yen, where the cost is near zero. Those yen could be converted into anything with a higher yield, such as U.S. mortgage-backed securities, to garner the spread.

The key risk -- aside from the loss of value of the asset being bought, as with any purchase on margin -- was that the cost of the liability would increase. That would happen with a rise in the yen in this case. And, not coincidentally, the yen rose in tandem with the dollar as carry traders had to unwind their positions during the crisis.

Now, with the Fed pinning the federal funds rate near zero and market rates -- such as the Libor, the London interbank offered rate, a money-market benchmark -- returning to their pre-Lehman collapse relationships versus the Fed's target, borrowing in dollars to fund carry trades looks tempting.

Remember, one of the big risks of a cross-border carry trade is if exchange rates bite you. But what's the risk of borrowing dollars at less than 1% if the U.S. currency's trend is down? Then you're effectively paid to borrow."

Why is this something to potentially worry about?  Well, it puts the Fed in a bit of a difficult position:

"America...still has a substantial current-account deficit that has to be financed with capital inflows. Outflows, as to finance dollar carry trades, would increase the need to attract capital inflows, which would put added downward pressure on the greenback.

Pomboy posits this could potentially lead to the return of such contrivances as the interest-equalization tax, a levy introduced in the 1960s to deter such outflows of capital.

Stanching the free flow of capital would be 21st century equivalent of the infamous Smoot-Hawley tariff, which importantly contributed to the contraction of global trade in the Great Depression..."

In choosing between the lesser of two evils, they may opt to allow the dollar to fall rather than impose draconian measures to curb dollar selling or deflating the economy to defend the exchange rate, the traditional medicine.

Then the response of other countries will be key. Do they permit an appreciation of their currencies, which would hurt their export competitiveness? Or do they follow the dollar's decline?

So far, equity markets have viewed the dollar's slide benignly. Stock investors haven't looked beyond the positive impact of exchange-rate moves on earnings of the Standard & Poor's 500.

But as the world sees a lower dollar as a one-way bet, it will be hard to stop."

Good point to keep in mind, especially for financial worry-warts.

* Image source.

ON A CHANGE OF PACE

SOMETHING DIFFERENT

Regular readers of this blog may have noticed the absence of daily posts of late, something I've managed to keep up for over four years of writing this blog. 

A couple of reasons are behind this change of pace, starting with some projects of late that have taken up a lot more of my daily time.

The second reason is an my increasing use of Twitter as a publishing platform, which has taken more of my daily cycles over the past few months. 

As you can see from the Twitter posts column on the upper right, I've been fairly busy publishing items that interest me, and hopefully are interesting for readers.  Please feel free me to follow me at www.twitter.com/mparekh.  I look forward to following you back.

As a result of these two factors, I'm experimenting with a slower pace of publishing on this blog this summer.  The plan is to publish something several times a week, but not necessarily every day.  The posts on Twitter though should be at daily pace, barring scheduling and travel issues.

Thanks as always for your readership and comments.  Look forward to resuming a daily schedule on the blog fairly soon.
* Image source.

ON GOD AND THE BRAIN

SEEKING THE TRUTH

Some new work by scientists at Johns Hopkins University gets at a question long asked by neuro-scientists:

"...is God a delusion created by brain chemistry, or is brain chemistry a necessary conduit for people to reach God?"

As this NPR article, the first in a five-part series by Barbara Bradley Hagerty, goes on to explain:

"...now, some researchers are using new technologies to try to understand spiritual experience. They're peering into our brains and studying our bodies to look for circumstantial evidence of a spiritual world. The search is in its infancy, and scientists doubt they will ever be able to prove — or disprove — the existence of God.

I spent a year exploring the emerging science of spirituality for my book, Fingerprints of God. One of the questions raised by my reporting: Is an encounter with God merely a chemical reaction?"

In a subsequent piece in NPR, the third in the series, the author goes on to recount some experiments by Andrew Newberg from the University of Pennsylvania:

A few years later, Andrew Newberg made that possible. Newberg is a neuroscientist at the University of Pennsylvania and author of several books, including How God Changes Your Brain. He has been scanning the brains of religious people like McDermott for more than a decade..."

"Newberg found that result not only with Baime, but also with other monks he scanned. It was the same when he imaged the brains of Franciscan nuns praying and Sikhs chanting. They all felt the same oneness with the universe. When it comes to the brain, Newberg says, spiritual experience is spiritual experience.

"There is no Christian, there is no Jewish, there is no Muslim, it's just all one," Newberg says.

A little theological dynamite there — but, remember, the research is just beginning."

Theological dynamite indeed, but the nascent field of neurotheology (aka the Science of Spirituality), is intriguing indeed, especially when the studies start to explore the so called "God Chemical":

"...Snyder, who is chairman of the neuroscience department at Johns Hopkins and was not involved in the study, says scientists suspect that a key player in mystical experience is the serotonin system.

The neurotransmitter serotonin affects the parts of the brain that relate to emotions and perceptions. Chemically, peyote, LSD and other psychedelics look a lot like serotonin, and they activate the same receptor."

The whole series is worth reading, including listening to the audio in the interactive guide that accompanies the series.

(Hat-tip to my friend Greg Ostroff for his original tweet that led me to these articles).

* Image source.