Obama rolled out his official administration-in-waiting website today: change.gov. Unfortunately it has not been updated with his radio address today. It only has information through to yesterday. Perhaps they are taking a break this weekend?

Obama has appeared 3 times on the cover of time this year. I wonder if he will make it 4 times by winning the Time Magazine Person of the Year 2008.

Masud recommended I take the course when I told him we would use Krugman’s book, although I did not know who he was. I didn’t realize then that Chapters 6, 7 (of the 2nd edition that I have) of his book were based on his own theories that were about 10 years old at the time. I sed to visit Masud at MIT frequently at the time. I remember him telling me about Rudi Dornbusch, with whom he was taking a class, becaming advisor to the Russian government when the U.S.S.R dissolved, and that he was Krugman’s advisor while Krugman was a student.

Of course, the name stuck with me. I bought and read more of Krugman’s books, with my favorite being Rethinking International Trade. I followed his writings on his MIT website and in Slate magazine – this was pointed out to me by my professor Steven Landsburg, who still writes the Everyday Economics column for Slate magazine. Once Abbu started reading the New York Times, he got me hooked on Krugman’s columns which Abbu read regularly. It was interesting that Krugman’s Nobel Prize brought back so many memories for me from over the last 17 years!

I listened to his interview today on NPR. Inevitably, one of the questions that the interviewer asked was who should have seen this economic crisis coming. I was surprised by the simplicity of his answer, “I should have.” He went on to talk about how there were signs along the way, and nobody paid to much attention, including himself.

Revised Bailout Bill 3.0?
With the markets down by 10% across the US, and the Asian markets already down by 5% as they opened on Tueday, it is likely that Washington will try to salvage some Bailout package, when they return on Thursday. Will they try? Will they succeed? And suppose they do try AND succeed – is a bailout package sufficient to make the markets rally, or are we at a point where no policy actions will control the generalized loss of confidence in the financial markets and institutions?

More Mergers to Solve Interbank Loans?
With markets what they are, nobody is giving loans to anybody at this point. CDS for Goldman is at an all time high. The good news for Morgan is that their CDS fell from 1700 to 1200 with the news this evening of their agreement to sell 21% to the Japanese bank Mitsubishi (although this still moved their stock price down). Will this be enough? What is Goldman going to do? Are we going to see Goldman merge? With whom? Who is large enough (and trouble-free enough) to take a stake in Goldman? HSBC?

Cross-Border Bank Run?
If we think the economy is in the gutter now, it could be worse. As foreign banks start to worry about their exposures to the US financial institutions, they could create a run on the trillion dollar short-term interbank deficits of the US banking system. Uh oh! What is the probability that this kind of panic will be triggered?

Tracking Hurricane Ike

As soon as I started reading, I was hooked on Eric Berger’s analysis. He had a beautiful graph of the probability density of tropical depressions that “hit” the US based on their starting location. Notice that the then-named Tropical Depression Nine (T.D. Nine) was outside of even a 2% chance of hitting the US. But with this said, the SciGuy made an analogy to the only storm to come from so far out and hit the US – this was a Category 5 hit to Galveston in 1915. Re-reading this now (after Ike) was eerie. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE. NEED MORE TEXT HERE.

Evacuating from Hurricane Ike

As we watched Ike develop, we debated whether or not to evacuate. Tayyba suggested that we leave Wednesday night to San Antonio. I could not go because of the workshop at work, so we decided to leave on Thursday. By then, Harris County was asking people not in the coastal mandatory-evacuation areas to stay put – to allow the coastal folks to evacuate (the yellow and green colors in the picture). We live just to the west of the orange near downtown – so there was no question of us blocking the highway. And by Thursday evening it seemed that Ike was not going to be as strong or as close to Houston as people initially thought. So we decided to stay put.

On Friday morning, we checked on Ike first thing in the morning. Now the warnings for Houston seemed dire. On the radio, we heard that Houston was asked to stay put because ‘they will stay alive through the storm’. We thought that was a pretty low threshold for staying put. Our main concerns were the aftermath – food would be scarce, long lines, potential flooding because we are two minutes away from Brays Bayou, and security issues with all of the above. We quickly packed up and drove to the Woodlands. The traffic to San Antonio still seemed very bad. We took the long route to the Woodlands to avoid the evacuation traffic on I-45 North. We took all our supplies with us – dry foods, water, birth certificates and passports. Once we got there, we taped the windows and monitored Ike on our laptops.

Before we went to bed, the alarm company for our house called and said that the burglar alarm in our house was going off. We called the police and asked them to look into it, but they said they would only handle life-threatening emergencies. We resigned ourselves to not knowing what set off the alarm. We set up mattresses in areas of the house where there are no windows and no walls exposed to the outside – laundry room, inside corridor, closet, and bathroom. We slept in pairs – one kid and one grown-up in each bed. When we went to our respective beds, we kept our shoes (in case windows blew out) and our bottled water next to each of us. Even though we were in bed as the storm started around us, I could hardy sleep. It was a massive and very noisy storm. The house creaked and heaved under the storm’s assault. I also kept the laptop next to my bed to continue to watch the news. By morning, we had lost power in the Woodlands (at 6:20 am) and shortly thereafter we lost cell phone connectivity – some cell towers probably got blown over.

Although I did not watch the convention in 1980, people are comparing this year’s to Reagan’s convention that year – new idea, new hope, well executed, with the opponents in disarray about how to respond.

It was a history making convention and primary on multiple fronts. First nomination for a non-Caucasian, winning againts a very well known name, close competition from a woman, record turnout on TV, high emotion at a political event with people leaving moved.

Why, you ask? Well, it’s probably best for me to quote Time magazine lest it sound like I am bragging about myself again. The highlights below are mine, as are anything in brackets.

America loves its solitary geniuses—its Einsteins, its Edisons, its Jobses—but those lonely dreamers may have to learn to play with others. Car companies are running open design contests. Reuters is carrying blog postings alongside its regular news feed. Microsoft is working overtime to fend off user-created Linux. We’re looking at an explosion of productivity and innovation, and it’s just getting started, as millions of minds that would otherwise have drowned in obscurity get backhauled into the global intellectual economy.

Who are these people? Seriously, who actually sits down after a long day at work and says, I’m not going to watch Lost tonight. I’m going to turn on my computer and make a movie starring my pet iguana? I’m going to mash up 50 Cent’s vocals with Queen’s instrumentals? I’m going to blog about my state of mind or the state of the nation or the steak-frites at the new bistro down the street? Who has that time and that energy and that passion?

The answer is, you do. [That’s me, and this blog that you are reading is the proof.] And for seizing the reins of the global media, for founding and framing the new digital democracy, for working for nothing and beating the pros at their own game, TIME’s Person of the Year for 2006 is you.

When I joined the company, Sapient gave me a copy of “Built to Last” by Jim Collins and Jerry Porras. One of the things that Jerry and Stuart (and Alan Herrick) have repeated often from this book is that surviving/flourishing through a change of leadership is one of the key tests of a company that is built to last. Without that, the company may have been surviving on the abilities or charisma of the founder/leader of the company. Although I did not expect us to be put to this test so soon, we had to be at some time. If I were asked yesterday who would make the best CEO at Sapient if Jerry and Stuart were not in the running, within Sapient or externally, I would definitely have picked Alan Herrick as the person to lead us. I personally think he will also do a fantastic job. I am delighted to learn that this was part of our CEO succession plan laid out more than a year ago.

It has been quite a time for Jerry and Stuart, starting Sapient, being on the billionaire’s list, Sapient becoming part of S&P 500, the bursting of the bubble, and the remarkable recovery. And still in their early forties! The sense of loss I feel at their departure is as if I have lost some close friends. I will miss Jerry and Stuart.

Prof. Yunus created the concept of micro-credit, and made it a reality by initially lending money from his own pocket in his village ($27), to then founding the Grameen Bank. Grameen now gives over a billion dollars in micro-loans to help more than 5 million poor. He has appropriately been called Banker to the Poor, which is also the title of his book. I read the book in 2001, when it first came out and was very impressed with the concepts.

Prof. Yunus concept of micro-credit was revolutionary. Small loans are given to the very poor to start some kind of business, for example buying a cow to be able to sell milk. Once they are selling milk, they can pay back the load – to be able to get bigger loans in the future – and they can feed the family, and improve their living conditions in general. One stroke of genius in the implementation of Prof. Yunus’ micro-finance was setting up groups of 4-5 people to give the loans to. One person gets the loan, once they successfully start to pay back the loan, the next person will get it. This creates both peer pressure to get the loan repaid, and also gives an incentive to the others to help the first person out in case they are having trouble. In this way, Prof. Yunus has created a banking system where the default on loans is one of the lowest of any bank in the world. This is amazing.

Beyond micro-credit, he has created processes for helping the loan takers with knowledge of how to run the business, and even how to live a better life (education, nutrition, etc.). He has also started initiatives to empower the poor in Bangladesh through technology and communication. In the 1990’s, Prof. Yunus took his ideas to a higher level – to fight world poverty. He has set his goal to end world poverty. This is a pretty lofty goal. And, for once, it seems achievable – the way he has laid it out. He has been one of the primary drivers for this initiative, getting most of the world leaders together to set these goals at the United Nations. I find this incredibly inspiring.

The Grameen Bank is one of less than 20 organizations to win the Nobel Prize, some multiple times. to Prof. Yunus is the first Bangladeshi to win a Nobel Prize. Another Bangaldeshi whom I admire for the work he has done is Fazle Hasan Abed, the founder of BRAC, one of the largest non-government development organizations in the world. I met him when I was very young, in 1986 when he visited my parents at our house. Unfortunately my interests in development did not form until years later. BRAC recently won the Gates Award for Global Health, with this citation from Bill Gates:

BRAC has done what few others have – they have achieved success on a massive scale, bringing life-saving health programs to millions of the world’s poorest people. They remind us that even the most intractable health problems are solvable, and inspire us to match their success throughout the developing world.