Greenspan on "This Week" with George Stephanopoulos

Was fortunate to flip on the TV the morning to catch Alan Greenspan on "This Week" with George Stephanopoulos. Here are some key statements during the interview with some additional explanation in parenthesis that I've added.

• The economy loses skills with elongated unemployment (When workers are not working and keeping up with new technology, new processes, and deploying new innovation, the skills of the worker deteriorate and fall further behind competition in the global economy.)
  

• Just after the financial crash, business (defined as economic participants) expected production and consumptions levels to fall off far more than they did. This spurred business to cut employment and production more than could have been economically supported. As a result, we're getting "horrendous" labor productivity numbers, meaning that the output per worker is declining.
  

• On unemployment, Greenspan noted that unless there are more than 100,000 new jobs a month, the unemployment rate will not improve.

• On government intervention and the stimulus package, the focus should continue to be on trying to get the economy going, but don't be counterproductive. As Greenspan stated, "we're in a recovery, his is what a recovery looks like. Looking back after this is over, we'll see ups and downs on a graph but look right through them right through them." The stimulus package is only 40% spent, so before considering a second package, the remainder (Evan Bayh on Fox News Sunday with Chris Wallace said he would have liked to have the stimulus go into effect sooner.)

• On GDP growth, Greenspan predicted 2.5% GDP growth in the third quarter and sees the numbers coming in higher than that once the estimates and revisions are completed. We're getting close to end of job loss, "but this is not the same as unemployment going done. We'll get to 10% barrier and stay there for a little while."

• On temporary actions, he feels that measures such as extended unemployment benefits are needed in the short term and is not a stimulus activity but may have some stimulus effects.

• On health care, the real problem exists in health care because of the huge fiscal hole as seen in Medicare. There is significant issuance of treasury bonds to finance the budget deficit. Historically we have kept our debt well below the borrowing capacity but that cushion is being tested which will affect LT interest rates. "Budget neutral is not adequate, weed to have address the long term."
  

Acquisition Price - FriendFeed/Facebook

I wish I was always this good... I guessed somewhere around $50 mln in an earlier post today about Facebook's acquisition of FriendFeed.

Turns out I was pretty close according to this post in the WSJOnline late today.

So it didn't take linear algebra to make the guess, but what the heck...

Friendfeed, Facebook (& Google?)

Just saw that Facebook is acquiring FriendFeed. Found this interesting since the Google tree is expanding. Paul Buchheit is one of FriendFeed's founders and the brains behind Gmail. After watching him speak on a panel last Spring, I wrote about Google, employee retention, and entrepreneurship.

FriendFeed is a small shop with only 12 employees according the TechCrunch article. Reminds me a bit on how Yahoo! intergrates new applications through acquisition instead of through internal innovation. Will be interesting to see the financial disclosure on the deal (if ever). Friendfeed was initially funded with $5 million by Benchmark Capital and its own founders.

Some questions pop to mind:

With the "normal" successful exit for VCs at 10x or more, did they get $50 mln for the deal? If so, did Facebook overpay as Yahoo! has been doing? Wonder if they saw an opening to exit for a few bucks less citing lower chances for long-term success and took it to focus on the next venture?

And speaking of Yahoo! and innovation, Steve Rubel has an interesting thought - make FriendFeed the new "Facebook Labs." Why not? Seems the right people are in the place...

Rules for Changing Rules - Romer on TED.com

I came across this presentation Paul Romer, Stanford economist (and a former employer). He discusses the idea of creating "Charter Cities" in developing countries that would enable the local population to choose migration and participation in the Charter City while providing a motive of profit for international firms to set up shop.

Using Hong Kong and Singapore as successful examples, it's important to consider cities like Brasilia that have not been so fortuate. During my time in Kazakhstan, I frequently visited Astana, the new capital city under development there and worked on an urban planning project that examined educational resources, infrastructure, and growth planning.

This is where the "rules for changing rules" becomes vital to the success of the Charter City Romer is proposing. When left to isolated government bureaucrats unwilling or unable to grasp the necessary conditions for economic growth, these Charter Cities will assuredly fail. But, if we can reach a level of true ideological understanding and implement proven theories of city and urban planning, there is certainly promise for this concept.

Check out the video presentation on TED.com here.

Google Profiles

Yep, there's lots and lots of places for an online profile, but I just set up my "Google Profile" and found it really easy and kind of fun. One aspect that I like is that Google Profiles aren't explicitly related to other applications such as the case with LinkedIn or Twitter. It's basically a simple landing page for you to show a little about yourself publicly then link to your contact info and other online places.

And given that it's hosted by Google, I'm sure that there's some SEO placement should someone be searching for you.

Here's my profile:
http://www.google.com/profiles/scottsambucci