Monday, September 29, 2008

Playing with Django and Pinax - Mac OSX/MySQL

Installing Django - just followed instructions on django site

Then ran through the tutorials

Then installed pinax using svn command here

Tried synchdb but didn't have PIL installed so got a load of errors.

Didn't have PIL so followed instructions here:

setup data tables using
python ./ syncdb

Wanted to use mysql - so installed ez_install
- downloaded egg here
- ran: sh setuptools-0.6c9-py2.5.egg

easy_install mysql-python

Then started mysql and created a new database and changed to use mysql and point to new database.

now syncdb again and tables created in mysql!
run: ./ runserver
and pinax app available at


Tuesday, September 23, 2008

IT Project Lifecycle

Click on image to see it full size. Cut this out over 20 years ago and just found it again...

Monday, September 22, 2008

Slow Money?

Unpublished (!) letter to the FT

As has been repeatedly observed for longer than this recent crisis, there are systemic problems with the financial markets, one of the these in my view is the increasingly short-term thinking of all concerned. I suggest one solution to this problem would be to put traders bonuses into pension plans that include a mix of shares appropriate to those they are dealing in. This would give a great incentive to ensure markets were not destabalised. Maybe like slow food and slow travel it is time to consider making a slow buck.

Tuesday, September 16, 2008

Forecasts vs. Scenario Planning

After reading Why Forecasts Don’t Work in Finance I felt moved to add a supportive comment, which grew. So here it is.

I absolutely agree with you that forecasting in finance rarely works and that scenario planning is more helpful. I have been using scenario planning for a long time now and find it a great way to identify and overcome peoples unconscious assumptions about the future. I read once that our baseline for what is normal is how things were when we were children and I think add to that our desire for the future to be what suits us, and it makes it very difficult for us to consider a future which is significantly different.

Talking to many people here in Ireland just before the property boom ended, when it was glaringly obvious to anyone not involved in the property market that all was not well, it was astonishing how blind we became when we have a vested interest in how the future will pan out.

The biggest problem with forecasting, is that however prescient you may be, a forecast has to be plausable to your audience in order for it to be accepted and serve any purpose. (See Paul Saffo at Long Now) So the most popular forecasts are those that continue popular trends and reverse unpopular ones. I presume this is the reason why some many economic and financial forecasts fail.

In my view, scenario planning differs from forecasting in that you are not trying to tell people what to think, only give them a wide perspective from where they can ask better questions. This leads to constructive conversations (rather than arguments over who is more likely to be right!) and more strategic thinking.

Phoebe Bright
A fan of scenario planning (obviousy!)

Monday, September 15, 2008

Review of Reinventing Collapse by Dmitry Orlov

I love seeing the world through the eyes of people who look at the world differently from the rest of us - brain candy! Dmitry Orlov has an unusual background and does not take the usual view of how and why the Soviet Union collapsed or that the US economy is sacrosanct.

Dmitry was born and grew up in Russia but settled in the US, returning to Russian regularly during the fall of Communism and so has both an insiders and an outsiders perspective.

The ingredients for the economic collapse of a superpower, as learned from observing the Russian experience:

  • a severe and chronic shortfall in the production of crude oil
  • a severe and worsening trade deficit
  • a runaway military budget
  • ballooning foreign debit
Add to this a humilating military defeat and widespread fear of a looming catastrophe and the result is economic collapse.

In the Soviet Union the defeat in Afghanistan followed by the Chernobyl catastrophe against a backdrop of oil production collapse, foreign trade imbalance and the inability to produce enough food and consumer goods, led to it’s downfall.

Dmitry believes the US is poised to follow suit with oil peaking in the 1970s, trade imbalance, a huge military budget and foreign debit denominated in dollars but held by international creditors. While the US is theoretically self-sufficient in food, inputs of 10 calories of energy for each 1 calorie of food produced mean that loss of imports would lead to loss of food supply.

You will have to read the book to fully explore the arguments put forward, but they certainly give me pause for thought and I will be exploring the consequences more fully as part of the Localisation scenario that forms part of the Energy Scenarios for Ireland.

As oil supplies decrease in the US, Dmitry argues "less is produced, but the amount of money in cirulation remains the same, causing the prices for the now scarcer products to be bid up, causing inflation". I do believe (hope!) that Dmitry is overly pessimistic about the way in which people and businesses will respond to increasing energy prices and other finite resources. Given that we waste huge amounts of energy because it has not be cost effective to do otherwise, and we have grown lazy because of the low cost of energy, there is huge potential for reducing demand. I have a figure of 50% of the energy we use does not deliver useful work - for example, the heat your car engine produces, or the energy used in standby mode on appliances. My first challenge of this figure came recently from a energy consultant working with large businesses. His figure was 80% waste!

There are a few other points Dmity makes that I stuck in my mind.

Resource Wars - if nations decide to fight others over scarce resources, the wars themselves will require huge resources such that they will be futile and “victory in these conflicts will be barely distinguishable from defeat”.

In the event of economic collapse and hyperinflation, money ceases to have any purchasing power. I might swap you a bag of potatoes for a jar of honey but what would I do with a pile of cash that will be worth less tomorrow? From the Russian experience, Dmitry suggests “when faced with a collapsing economy, one should stop thinking of wealth in terms of money. Access to actual physical resources and assets, as well as intangibles such as connections and relationships, quickly become much more valuable than mere cash.” So consider a stockpile of, or the means of making, petrol and diesel, poteen, medicines and bicycle tyres.

Russia was in a MUCH better position to survive economic collapse simply because most of the necessities for life were provided by an inefficient state whereas the US citizen is largely dependent on the private sector for housing, transport, health care, education and care of the elderly.

Most Russians lived in homes owned by the state and so did not become homeless. Services such as heat, water, maintenance and rubbish collection was centralised, and were relatively cheap to run so continued to work. The extensive public transport system was owned by the state and kept running all through the collapse allowing movement of people and goods.

For those that enjoy US bashing, there is much food for entertainment in this book, though there are also positive statements about the US as well. This is one of my favorites: “the United States military does not know how to win. It just knows how to blow things up.”

And a few words of wisdom: “People generally find it hard to act on knowledge that contradicts their every day experience. The experience must come first, even if it is second-hand.”

This book has certainly made me consider the flip side of what would be considered desirable changes today. For example, an earlier blog entries firmly asserts that Demand Response and real-time pricing of electricity is essential to increase our use of renewables and maintain our economy. But suppose we did face economic collapse? The last thing we would want is for real-time pricing where the rich would price everyone else out of the market. In those circumstances we would want fair rationing and fixed prices. While I would not advocate holding back on real-time pricing, I would suggest that changes are flexible enough to work in more than one scenario.

I bought this book direct from the publishers and it arrived in a few days, quicker than Amazon.

Wednesday, September 10, 2008

Economic growth need not require increased consumption

Excellent article in FT today by John Kay "Economic growth can be about better - not more"

He argues that as we get richer, we generally want quality not quantity, so economic growth does not necessarily increase the volume of "stuff" consumed.

Not sure I agree when our economy geared towards selling us equipment that cannot be repaired and breaks just in time for us to buy the new model! See toothbrush story below.

Tuesday, September 9, 2008

My new toothbrush is a Ford Fiesta

While in the UK last week, I went to buy a new electric toothbrush for my mother. Having bought electric toothbrushes before I went straight to the electrical section of a large 'sells everything' store. No toothbrushes to be found - toasters, kettles, hair tongs, all kinds of electric gizmos but no electric toothbrushes. Finally I asked and was directed to the toothbrush shelves where they are to be found for £3 next to old fashioned electrically challenged toothbrushes. Last time I bought an electric toothbrush, the refill brushes cost more than that!

I was on the lookout for new brushes for my 5 year old toothbrush but got a new one (as I was supposed to) instead. This new toothbrush feels cheap to use - like putting a Ford Fiesta in your mouth instead of a BMW. Personally, I am a less happy consumer. I would prefer to have the BMW toothbrush for 10 years (with new brushes) than drive the Ford Fiesta round my mouth morning and evening, but I guess I will get used to paying more (overall) for less after a while.

So I understand that the commodisation of electric toothbrushes is a 'good thing'. More goods produced, more jobs, higher GDP, Hurragh!

But it's not so good for me personally and the general approach of making things cheaper to buy and more costly to maintain is not so good heading into a recession. If money gets tight, you want the flexibility to spend less of it for a while. No new coat of paint for the house, cancel the subscription to the weekly magazine and buy an old fashioned toothbrush when the cheap electric one breaks after 6 months. But that still leaves cartriges for the ink jet printer, sky subscription, tivo subscription, new video camera as the old one records but can't get the movies off...

The same is true for many businesses with just in time ordering and tight cashflow - bills only paid when suppliers start chasing. Is there is too little financial flexibility left in the way we run our lives or businesses? What options do we have when so many capital purchases have been turned into overheads?