Archive for the ‘Economic crisis issue’ Category

How Guilty Are CIOs (also it) Within the Global Financial Crisis?

Saturday, August 6th, 2011

Global financial crises are no fun. Those of us in IT find ourselves much like everyone else standing around and scratching our heads trying to figure out precisely what happened. Apparently , IT may have been many from the problem – we’re area of the reason why the crisis happened to begin with. What do CIOs need to know about this and just how could it be prevented from happening again?

Exactly what does IT Do In the current Real estate markets?

It really doesn’t matter what advertise your products play in, if you have read any newspapers or watched any TV in the past 9 months, you already know that the realm of finance went from bad to worse. Each one of the stories relating to this global crisis seems to have included the among the guilty parties: IT.

It had not been always by doing this. Roman Beck recently wrote about how exactly two dramatic events show precisely how resilient the field of financial IT systems is. The attacks on September 11, 2001, on the American financial district should have brought the U.S. financial clearing and settlement systems to some halt. However they didn’t. Instead, just a mere 3 hours after the attack the backup finance IT systems were up and running in nations and U.S. currency processing was once again running normally.

The second major event was the attack on the London Stock market (LSE) on July 7, 2005. In this case, the LSE could not handle the tsunami of automated trades that hit it if this was partially shut down. A few calls to trading firms got these phones turn their “black box” trading systems off for a few hours and that gave the LSE IT systems enough time to return up on their feet.

Beck highlights these were attacks that originated from the exterior and the financial IT systems were able to cope with them. However, the global economic crisis was brought on by internal issues which is how the CIO’s who are responsible for the financial IT systems dropped the ball…

What went down To All From the Liquidity?

In the current global financial trouble, what started as serious issue got out of hand quickly due to that which was done with the financial IT systems which were involved. Everything started when Northern Rock, the 5th largest bank within the U.K. failed in February of 2008. This caused ripples, but not waves in the financial industry. However, when Lehman Brothers failed on September 15, 2008, everything came crashing down.

On the planet of finance, Lehman Brothers acted being an investment bank. Basically, they were in the middle of other people’s financial transactions. When they went away, it caused everyone to need to rethink their risk exposure.

If Lehman Brothers could fail, who would be next? The IT systems that the financial firms were using automatically traded money between firms. Apparently , when Lehman Brothers failed, there were $100′s of millions of dollars within the system already flowing to Lehman Brothers – and there was no method to preclude this from happening.

In order to prevent sending more money to failing institutions, all the CIOs in the financial markets instructed their teams to “pull the plug”. This brought the worldwide financial IT infrastructure to some halt. All of this happened because for one simple reason: financial firms had not a way to calculate the credit risk at the same speeds that they are doing transactions.

The issue With Exchanging Data

Ultimately all of this is dependant on a problem that financial industry CIOs haven’t been in a position to solve: how you can exchange financial data. It appears strange that an industry that has been built onto it systems has not been in a position to solve this type of fundamental problem.

A primary reason that this went unsolved for so long is the inescapable fact the modern financial market is driven by products – lots of products. The time between when a new financial method is dreamed up and when it starts to be sold is very, very short. Trying to standardize just exactly what is being traded would always be playing a game of catch up.

You will find solutions available that could a minimum of begin to address these issues. The Financial product Markup Language (FpML) is one such standardization approach.

Financial industry CIOs possess a responsibility to change the way they do business to ensure that another global financial crisis such as the one which has occurred recently does not occur again. To do this they will have to find ways to support the calculation from the risk of each financial transaction just like quickly because they offer the transactions themselves. It’s not going to be easy to do, but it’s likely to be necessary.

What All Of This Means For You

Enjoy it or not, It’s truly at the heart of almost exactly what a company does. Although this makes both IT and also the role of CIO worth more compared to they have ever been, additionally, it implies that IT plays a part in every unfortunate business event occurring.

The current global financial trouble came into being due in part towards the high-speed IT systems that managed to get so easy to quickly develop new lending options and trade them in milliseconds. That which was lost in most of the was the simple proven fact that the chance of a trade had not kept pace and for that reason trades were being produced in which neither party had the IT tools they necessary for order to correctly evaluate it.

Could the Global financial trouble Function as the Window of Opportunity to Seriously Address Climate Change?

Saturday, August 6th, 2011

It would appear that in the face of the present global financial trouble we have all but forgotten a significantly greater issue, one with ramifications of monumental and potentially catastrophic proportions.

We’re missing a window of opportunity to tackle both climate change and the global financial crisis
As long ago as November 1992, a document signed by sixteen hundred of the world’s leading scientists, including half of all the Nobel Prize winners at that time, issued an alert to all humanity that human beings and also the natural world were on the collision course. The document listed all the pending crises in the atmosphere, water resources, soils, the oceans, forests, biodiversity and over-population. Exactly the same eminent persons warned that a maximum of one or perhaps a many years at the most remained to avert the threat of vast human suffering and misery and admonished world leaders that great changes in our stewardship of the Earth and its resources were required to steer clear of the irretrievable mutilation of our global home.

Alas, humanity has virtually ignored these most astoundingly important pronouncements, losing nearly 2 decades in which we could and really should have started the introduction of tangible measures to preserve and protect the biosphere against further harm.

There is little doubt that every year lost has contributed massively to the potential hardships and suffering our children and grandchildren will endure.

Is climatic change a part of Earth’s natural cycle?
Scientists tell us that approximately one hundred million years back once the continents were arranged differently, Earth is at fact 5 to fifteen degrees (C) warmer than today. Of course that was well before the existence of Homo sapiens. Then, as the continents drifted apart, the planet cooled steadily. Ice core samples obtained from the Arctic reveal that during the last nine thousand years our planet’s temperature has been relatively stable.

That stability lasted until the start of the Industrial Revolution. However, ever since then, there has been a marked rise in temperature. Because the temperature rise has been over a relatively short time and contains coincided with increased greenhouse gas emissions (GHG) and de-forestation, there might be little doubt the progressive heating from the planet is due to man’s activities. Nevertheless, temperature increase has been most marked because the 1950′s when consumerism became the Western World’s new code for living and factories geared for that war effort, switched to pumping out products for the new “throw away” age.

With the emergence of China and India’s industrial economies which are now pumping seemingly endless volumes of harmful pollutant gases in to the atmosphere, the rate at which temperatures are escalating each year is sounding alarm bells all over the world. Al Gore in the sensational cinematographic epic The Inconvenient Truth brought the content home to millions. Except for diehard sceptics, Gore finally dispelled the last vestige of arguments asserting that global warming is merely a natural phenomenon. Since Gore’s movie many climate scientists have in fact backed requires a “global-wide call to arms” in the fight against potentially fatal climatic changes.
Unfortunately, to this day, some contain the belief that only one or two degrees spread over the next fifty approximately years can make little difference. Regrettably for the world, there are many politicians and business leaders among these deniers from the facts.

These ill-informed folk should talk to those residing on low lying nations such as Tuvalu, The Maldives, Bangladesh and many coastal regions of pretty much every nation that’s not landlocked. They’d soon discover unfortunate folk of those and many other nations are under imminent threat from rising sea levels.
In addition to the growing inundation of heavily populated nations, we’re already experiencing an increase in the severity and frequency of devastating tornadoes, cyclones and storms. Most climatologists now attribute these events and changing weather patterns to the over-heating in our planet.

Droughts also have increased in severity and duration, while polar ice caps together with all of the world’s glaciers and the Greenland ice shelf are melting at alarming rates. Africa’s and Asia’s deserts still expand, forcing many poor communities to abandon traditional homelands, throwing greater strain upon the ability of impoverished and bankrupt nations to respond to the growing number of the new ecological refugees.

Vector-born diseases such as malaria and encephalitis are actually becoming common in areas previously immune from such threat.

As crops regularly fail through insufficient rain, starvation is really a growing problem while in the planet’s oceans, many marine species are under threat of extinction from higher seawater temperatures, increased acidification, the loss of corals and sea grasses and also the rapid proliferation of marine vermin for example, the Crown of Thorns starfish. Meanwhile, grass has been discovered growing within the arctic the very first time. Although this enables some creatures to move nearer to the North Pole, many species such as polar bears and emperor penguins which are dependant upon cold conditions are threatened with extinction. Flowers are blossoming, birds are migrating and frogs breeding 2 to 3 days earlier with each passing decade even though some life forms achieve warmer temperatures, others happen to be forced from their habitats. Using the thawing of vast regions of tundra, massive quantities of methane (that is 5 times more damaging that CO2) are now being released into the atmosphere exacerbating the already critical problem we blithely call, “the greenhouse effect.”

The world’s oceans affect our weather more than many realise. They are in fact, massive natural engines driving climates and weather patterns across the globe. As tepid to warm water from the equator is driven northward by wind and air currents, evaporation and the formation of sea ice contribute to the density of arctic seawater which in turn cools, sinks and returns southward again.

In 2004, submarine exploration beneath the arctic ice cap discovered that only two of the seven gigantic cold water columns that help drive ocean circulation were functioning. Alarmed scientists reported that climatic change is threatening ale these currents to operate. They found the remaining columns were pathetically weak in comparison to their normal function, raising speculation that rising temperatures may completely shut down thermohaline circulation with potentially catastrophic consequences for Northern Europe, Russia and also the United Kingdom.

There isn’t any longer question the major reason for entire ecosystems collapsing is anthropogenic, although such factors because the Earth’s orbital path, volcanic eruptions on the sea floor and underneath the arctic ice, gravitational changes, energy from deep space and sun spot activity all play a part. However, where alterations in temperature result from such causes, our planet’s ecosystems could probably compensate and adapt without significant harm to life. On the other hand, the planet’s complex systems are clearly not able to deal with man’s intervention.

Since there are a lot of factors adding to the climate change debate, scientists really do not know what will happen over the following 5 years not to mention the next fifty. Nevertheless, few would deny the devastating consequences of man’s impact upon the earth, or these will continue for thousands of years even when we were to halt all greenhouse gas emissions tomorrow (and that’s obviously not going to happen). Despite the best efforts of scientists to date, most predictions and prognosis have proved inaccurate. For example, the rates where the arctic icecap is melting, the disappearance of glaciers and changing weather patterns have exceeded the worst predictions.

If there is a collapse or further significant slowing of thermohaline circulation, nobody knows whether Northern Europe will end up appreciably warmer, cooler, or even plunge into a new ice-age!
Most climate experts would now agree, we cannot manage to adopt a wait and find out approach while climate change boffins continue with more computer modelling and study the complex web of interdependent factors.

Even when we still believe that climatic change and global warming are simply part of the Earth’s natural cycles, the final results would be the just like when they are anthropogenic. There will be massive misery and suffering as we neglect to take action now.

Merely reacting to changing circumstances will not suffice; we must become super-proactive and assume that worst-case scenarios will become our reality. We must rapidly implement counter-measures and form long term plans to cope with a crisis that is unprecedented in ferocity and magnitude because the good reputation for man.

Meanwhile, back to the worldwide economic meltdown
As the pain of industry bankruptcies, mortgage foreclosures and job loss is very real in the hardships inflicted upon those most affected, we can’t manage to drop the ball with regards to climate change. Indeed, the suffering we’re now experiencing as a result of corporate greed, and the undoubted lack of appropriate checks and balances on lending, will seem insignificant compared with the prognosis of numerous of the world’s top scientists, should we neglect to heed their warnings.

With the hope of boosting consumption, governments seem to be almost throwing money at national economies with “bailout” packages and handouts to citizens, although are left wondering if it’s a gigantic gamble that’s determined to fail. In the end, when anyone spends a lot more than he or she earns, thus ending up owing creditors, is it not responsible and logical to knuckle down, work hard, repay debts and live within one’s means?

Surely, much more financial trouble, any sane person wouldn’t go out and borrow more money and spend it just to maintain a lifestyle that has proved disastrously extravagant? Haven’t too many of us lived in a fool’s paradise of rampant consumerism and excessive personal luxury? May be the plight of the united states different simply because it’s on a much bigger scale? Didn’t the economical house of cards have to come crashing down at some point?

Where should taxpayer’s money be going?
Maybe, the strategy of borrowing from the future to help ease present pain works, but could it be fiscally responsible to support industries depending on fossil-fuel technologies when oil reserves are drained and environmental costs of polluting the biosphere at current rates will spell our demise?

As going to mortgage our children’s future, should we ‘t be taking a look at investing in infrastructure projects that won’t cause further environmental damage and will enhance the standard of living for our citizens in the future? This would seem the best moment to also accelerate the development and introduction of environmentally sustainable technologies along with other measures with maximum long-term benefits to any or all humanity?

Here are some worthwhile suggestions where government subsidies might have lasting benefits:
1. Establishment of giant solar energy plants much like that because of seriously line in California
2. Solar, wind, geothermal hot rock (GHR) and tidal power,
3. Hybrid cars, hydrogen fuel cell and electric cars and other technologies yet to evolve,
4. Solar warm water systems, thin-film photovoltaic cells,
5. Double glazing and eco-friendly buildings and homes,
6. Water tanks, grey water systems,
7. Household water treatment systems that re-use water again and again,
8. Domestic wind turbines,
9. Research into the development of “water from air” devices,
10. Making current buildings and homes energy efficient,
11. Designing new buildings for sustainability,
11. Better city and town planning which discourages automobile usage and encourages patronage of one’s efficient, zero emission trains and buses.

Injection of capital such areas would undoubtedly create new jobs. In addition, by providing incentives to existing companies, who are currently struggling to survive and urging them to divert productive capacity into the examples outlined may save countless jobs which could otherwise be lost.

Australia, like many nations has vast deserts and straddles latitudes from tropical to temperate zones. Traditionally, the country’s food bowl has developed in the cooler south, however, these agriculturally productive areas are drought-stricken and also have been for so for several years, devastating production. The hotter north now bears the brunt of more severe cyclones and their inherent flooding.

As the large area of the country’s population has handled water restrictions, abundant rains fill northern catchments to overflowing with much of this water running to waste within the oceans. Met with cries of, “too expensive,” proposals to pipe water from northern dams, rivers and lakes to satiate the south’s needs never get passed enter board, but perhaps should be revisited by having an eye on drought-proofing the nation and assuring with the ability to play its part in feeding a world whose hunger grows exponentially each year.

More now than in the past, we need leaders with vision and courage and if viewed through a different perspective, the worldwide financial crisis might just be a blessing in disguise.

Alan Greenhalgh is really a former New Zealand Police Sergeant and Inspector in The Australian Protective Service, a division from the Federal Police given the job of providing counter terrorist response and diplomatic and consular protection.

As a former member of the N.Z. Police Search and Rescue, Diving, Armed Offenders and elite Team Policing Squads, Alan was also given the job of controlling local gang elements in New Zealand. He’s many enthralling anecdotes in his repertoire of police life and is well qualified to write about the human condition. He was the first security manager for Western Australia’s parliament house and achieving completed a major security review resigned to pursue a career in private enterprise. After working for two years like a private eye he retired to pursue an extended held dream to write.