Thanks To Super WiFi, Your Next MacBook or iPad Might Be Able To Connect To Your Home WiFi Up To 60 Miles Away

from here

Frustrated by Apple’s reticence to release a Mac with a built-in 3G modem for everywhere internet connectivity? Don’t sweat it, Apple may have something else in mind: Super WiFi that would allow your MacBook to connect with your Time Capsule from up to 62 miles away.

Best of all? That tech just got one step closer to reality.

So you know the standard 802.11n WiFi that you can find in every Apple product, from your MacBook to your iPhone? The IEEE — which is the standards organization that governs all of WiFi — has just officially published WiFi’s next-gen standard, IEEE 802.22.

Utilizing white space frequencies that were previously hogged up by analog television broadcasts, IEEE 802.22 will allow you to transfer data at speeds up to 22Mbps to devices as far as 100 kilometers from the nearest transmitter.

The possibilities are obvious: as long as you are within an hour’s drive of your house, you could use Super WiFi to connect to the internet on your iPhone, iPad or MacBook.

Of course, standards being published are much different than hardware shipping, and we may have a while to wait before the first Super WiFI MacBooks start pumping out, but with the publication of the spec, Super WiFi just got a big step closer to being a part of all of our lives.

The Future of SEO

from here

Today I want to walk you through and talk you through some of the interesting conversations that emerged from a panel comprised almost entirely of State of Search bloggers on Monday at a4uexpo in Munich! I joined up with Martijn, Roy, and Kelvin to discuss what the future of SEO may look like and what’s in store over the next few years.

This is not an exhaustive look nor is it necessarily reflective of what the future will look like for SEO because hey, as I’m sure Harold Camping can attest, we can’t predict the future. However, I’m going to do my best to summarise here the different viewpoints from the panel as well as the audience so please feel free to disagree, even I disagree with some of the predictions but we’ve all used our experience to try and figure out what is in the future of our quickly maturing industry.

Near Future

Who Controls the Internet

Schema is potentially a god-send for a great many users who needed a kick in the rear to get started with microformats and to take advantage of the impressive impact that they may have on click-thru rates in the SERPs! However, the larger argument remains that these standards go against W3C standards and have not been agreed by consensus but rather ordained by the search Gods and interestingly- it appears that the major search engines will expect SEOs to spearhead this issue and ensure that our clients roll these new “standards” out on their websites.

Ultimately this decision makes using RDFa or Microformats (rather than using Microdata) on a commercial website a “false choice” – much like coding a site entirely in Flash would be considered a “false choice” – if the webmaster wishes to have that data indexed in Google.

I don’t want to beleaguer the point too much but there was some differing opinions on this particular decision on the panel – though it seemed we could all agree that it was an interesting twist that SEOs are now becoming messengers for the type of web the Search giants would like to see rather than the developers and creators on the web would like to build.
What is the Next “Panda” Update?

Anyone else heard enough about this big cuddly bear yet? In any event, I have.

As Kelvin pointed out on our panel, although it is sometimes difficult to speculate what the next big update will be but the clear indication that Google’s “big” updates seem to be responsive to things that either already have embarassed Google or have the potential to do so in the future: the conclusion was to try not to create a site that would be embarassing or risky for Google to rank first (easier said than done).

Potential areas we have discussed for Google to address (and areas which they have acknowledged will be happening):

1. Exact Match Domains – I know, I know, we’ve been talking about this for years but it seems ripe for the picking. Kelvin pointed out that 18 months ago he saw a bunch of domains that he wishes he had snatched up but was afraid they would be devalued. I agree with his opinion but I’m going to go ahead and say that this problem will certainly be addressed in the next 18 months.

2. Panda Knock-On- a lot of people I have spoken to in the field seem to feel that some of the – let’s say “lower-level” – link building techniques that were meant to be crushed by Panda still seem to be working a treat in certain circumstances (sorry I’m not going to ruin something that people are still using by being any more specific). My view is that the impact of Panda was not a completely algorithmic impact and potentially the hit that some of these content farms took directly (i.e. they no longer rank for “how to pour a glass of water”) may not have had an impact on the sites these farms have been linking to. In my view (one that I know is shared by some others in the industry) this will be addressed in the next year as well.
What’s the Next Infographic?

So there are plenty of people in the field that are absolutely fed up with infographics and I am getting dangerously close. There was a period of time where creating a graphical representation of complicated data in one big image with an embed code below seemed to be a guaranteed way to get links and to get people to share your content.

Whilst I would contend that this is still true to a certain degree (if the chart truly serves the purpose of making difficult data more easy to understand) it would seem as though there is a looming backlash and this panacea to linkbuilding has overstayed its welcome.

So what is next then? Well, I think a strong case has already been made for using new and emerging web technologies to create interactive materials.

Long interactive parallax scrolling pages: Ben the Bodyguard, The Geekest Drink, Prepare to Activate, etc. (note- look how easily three sites unrelated to SEO just picked up a link without asking!)
Pages that pull live data: Foursquare stats, LinkedIn Maps, the Times Social List
Games, Interactive Videos, etc.

For me, the obvious frontrunner at the moment seems to be the interactive parallax pages and sites though it never hurts to be ahead of the curve and I’m sure people will tire of those soon enough too!
What’s in a Name?

We couldn’t very well have a panel about the future of SEO and not discuss the severe PR problem our industry faces. I covered this earlier this year in my Dangers to SEO post but I think the need for us to consider the negative impact that “call centre” tactics and misperceptions of the work we do need to be addressed sooner rather than later.

Some of us in the panel, as well as some attendees with whom I spoke after the presentation made suggestions about becoming more generalist and removing SEO from a lot of their communications – more on that below. However, there is a pretty strong sense of agreement that SEO is becoming every day more synonymous with “scumbag” and there is a lot of misinformation out there.

One such example we discussed was brought to my attention by a tweet from Ross Hudgens about a thread on Hacker News.

The title of the thread/link was “What kind of Spam/SEO is this?” and if you have a chance to read through you will notice right away that clearly it has nothing to do with SEO, but the fact of the matter is; if it comes to the point that HackerNews and a community of well versed and engaged internet users believe Spam is synonymous with SEO we have a more serious reputation on our hands than perhaps most are willing to admit or do anything about.
Google +1

Finally, we couldn’t help but discuss Google +1 because it (along with seemingly 200 other buttons) went live in the last week or so and blogs everywhere are adding it into their arsenal of buttons.

Now, as I said in the presentation, my feeling is this: Google had to do this in order to get at some of that data they cannot (or claim not) to be able to access via Facebook. Google also launched this prematurely (and childishly) to drown out some of the sound from Twitter‘s announcement about the Follow button. Google is stubborn and will no doubt rely on this data for the next few months.

As I also pointed out, here is the reason that this cannot last as a significant ranking factor and why it may be worth taking advantage of now (if you are so inclined) rather than later: Google likes to use their own data and are stubborn at admitting when something doesn’t work properly (so it will work for now), however, there is no emotion whatsoever attached with hitting +1; sure it may show up in the SERPs if you are logged in to your Google profile and I have hit it but it’s not the same as putting it in front of my trusted and hard earned followers and colleagues (Twitter) nor my judging friends and family (Facebook).

Lastly, and most importantly, +1 is way too easy to game. Perhaps not in terms of having a real and meaningful impact (which it would see would come by engaging in communities which Google just don’t seem to have down yet) and getting your information shared more widely across the web but it sure would be a lot easier to make use of Mechanical Turk, Fiverr or any other service to get a whole heck of a lot of +1′s.

Perhaps the button will evolve, or perhaps it’s to try and track down sites that are trying to game the system (whether through link building, spamming or social media) but as it stands now it cannot meaningfully be used in the long term as a ranking factor in my personal view.

Distant Future

As an economist by training I cannot help but quote Keynes here and point out that “in the long run we are all dead.” Now, does that mean that SEO is dead? No, of course not. Do I think, however, that our day to day tasks will change by 2018? Of course!

We as an industry have evolved immensely in the few years that we’ve been around and as anyone who has made it from the “pre-Google” SEO days and is still running a successful business today can attest: the most successful among us are those of us who are able to adapt. At the end of the day we are an industry full of chameleons (not snakes or other industries with a bad reptutation) and one of the most impressive and marketable skills that I believe every SEO has – and indeed must have – is the ability to evolve and adapt quickly.

And I think this is an important thing to celebrate – though it does make communicating our work to our spouses, family and clients difficult at times!

It is much harder to say what the industry will look like in 5 years so we’ll just stick to a couple of the broad questions addressed in the panel.
What will an SEO do in 5 years?

I think Kelvin put it quite eloquently on the panel by pointing out that ultimately this whole game is about creating content that will be shared and will engage users and receive approval from a wide set of audiences. I don’t see this changing a great deal in the next five years and I do think offsite activities may not be “link building” per se, but it will be about content distribution, consumption and interaction.

Onsite I think both Google’s ability to crawl and developers ability to write code that the search engines like will ultimately mean that less time will probably be spent optimising title tags and meta descriptions – though I still think onsite will be important. Hopefully in 5 years we won’t see any more of the burdensome development “release schedules” and every site will have a manageable CMS that allows for control over architecture, internal linking, and the major onpage indicators to search engines, “content discovery” channels and whatever else helps generate traffic and business to a website.

There will still be a need (perhaps more than ever) to get SEOs involved in building a site and providing the requirements, structure and flexibility of the platform and for my money, content managers and copywriters to maintain the site once built. However, it is also my belief that SEO will be further enveloped in the marketing of any website or product and will likely mean that less time is spent on “SEO” onsite than at present as more in house resource is taken on to handle this.

As I say above, we will all adapt if we wish to stay within SEO and there will always be opportunities as long as there are search engines, or app stores, or anything else that has an algorithm and helps a user find your product.

Finally, on this topic, we also discussed an increasing need for specialisation within the field as it seems a great number of the folks we spoke to have not tried much with the other search and discovery engines to try and find new channels for traffic. I suspect true mobile specialists, video optimisation specialists and app store specialists will almost certainly emerge as more SEOs experiment in these different channels and start to realise that “SEO” for YouTube is not the same as SEO for Google and “SEO” for the App Store is more different still.
What will your title be in 5 years?

This was a fun one and I think it says as much about an individual’s ambitions and aims as much as it does about the changing field of SEO. Unfortunately Roy didn’t really get to answer this one but we will close with the answer and the thoughts on these titles:

Kelvin, pointed out that he already has a [redacted] title as he goes by “Creative Director” though he does anticipate more people moving away from SEO based titles.

Martijn suggested that he would quite like to go by something along the lines of “Information Architect” as he sees his position and ability to add value moving in that direction slightly. I personally thought this was a great way to describe someone who specialises in the onsite side of things and potentially could work for offsite as well.

Audience suggestions: many alluded to the fact that they will (or in some cases already have) moved toward more generic titles because they focus on more than just SEO. Some of the examples were simply “Director,” “Founder” or “Consultant”.

Ultimately, my aim is to get more involved in the broader marketing set and hopefully direct strategy for brands online beyond just SEO. The more I learn about other disciplines the more this changes though, so we will have to see where the journey takes me. In the meantime, I’ll be gunning for a title somewhere along the lines of “Strategy Director” (whether specific to SEO or otherwise) and also threw out the idea of “Head of Content Visibility” off the top of my head.

For now though, it’s back to the present and dealing with today’s reality: getting through all the emails that built up whilst I was away. Here’s to the future – may it bring hover boards and many successes for all of you!

When Should You Shoot A Cop

from here

That question, even without an answer, makes most “law-abiding taxpayers” go into knee-jerk conniptions. The indoctrinated masses all race to see who can be first, and loudest, to proclaim that it is NEVER okay to forcibly resist “law enforcement.” In doing so, they also inadvertently demonstrate why so much of human history has been plagued by tyranny and oppression.

In an ideal world, cops would do nothing except protect people from thieves and attackers, in which case shooting a cop would never be justified. In the real world, however, far more injustice, violence, torture, theft, and outright murder has been committed IN THE NAME of “law enforcement,” than has been committed in spite of it. To get a little perspective, try watching a documentary or two about some of the atrocities committed by the regimes of Stalin, or Lenin, or Chairman Mao, or Hitler, or Pol Pot, or any number of other tyrants in history. Pause the film when the jackboots are about to herd innocent people into cattle cars, or gun them down as they stand on the edge of a ditch, and THEN ask yourself the question, “When should you shoot a cop?” Keep in mind, the evils of those regimes were committed in the name of “law enforcement.” And as much as the statement may make people cringe, the history of the human race would have been a lot LESS gruesome if there had been a lot MORE “cop-killers” around to deal with the state mercenaries of those regimes.

People don’t mind when you point out the tyranny that has happened in other countries, but most have a hard time viewing their OWN “country,” their OWN “government,” and their OWN “law enforcers,” in any sort of objective way. Having been trained to feel a blind loyalty to the ruling class of the particular piece of dirt they live on (a.k.a. “patriotism”), and having been trained to believe that obedience is a virtue, the idea of forcibly resisting “law enforcement” is simply unthinkable to many. Literally, they can’t even THINK about it. And humanity has suffered horribly because of it. It is a testament to the effectiveness of authoritarian indoctrination that literally billions of people throughout history have begged and screamed and cried in the face of authoritarian injustice and oppression, but only a tiny fraction have ever lifted a finger to actually try to STOP it.

Even when people can recognize tyranny and oppression, they still usually talk about “working within the system”–the same system that is responsible for the tyranny and oppression. People want to believe that ”the system” will, sooner or later, provide justice. The last thing they want to consider is that they should “illegally” resist–that if they want to achieve justice, they must become “criminals” and “terrorists,” which is what anyone who resists “legal” injustice is automatically labelled. But history shows all too well that those who fight for freedom and justice almost always do so “illegally”–i.e., without the permission of the ruling class.

If politicians think that they have the right to impose any “law” they want, and cops have the attitude that, as long as it’s called “law,” they will enforce it, what is there to prevent complete tyranny? Not the consciences of the “law-makers” or their hired thugs, obviously. And not any election or petition to the politicians. When tyrants define what counts as “law,” then by definition it is up to the “law-breakers” to combat tyranny.

Pick any example of abuse of power, whether it is the fascist “war on drugs,” the police thuggery that has become so common, the random stops and searches now routinely carried out in the name of “security” (e.g., at airports, “border checkpoints” that aren’t even at the border, “sobriety checkpoints,” and so on), or anything else. Now ask yourself the uncomfortable question: If it’s wrong for cops to do these things, doesn’t that imply that the people have a right to RESIST such actions? Of course, state mercenaries don’t take kindly to being resisted, even non-violently. If you question their right to detain you, interrogate you, search you, invade your home, and so on, you are very likely to be tasered, physically assaulted, kidnapped, put in a cage, or shot. If a cop decides to treat you like livestock, whether he does it “legally” or not, you will usually have only two options: submit, or kill the cop. You can’t resist a cop ”just a little” and get away with it. He will always call in more of his fellow gang members, until you are subdued or dead.

Basic logic dictates that you either have an obligation to LET “law enforcers” have their way with you, or you have the right to STOP them from doing so, which will almost always require killing them. (Politely asking fascists to not be fascists has a very poor track record.) Consider the recent Indiana Supreme Court ruling, which declared that if a cop tries to ILLEGALLY enter your home, it’s against the law for you to do anything to stop him. Aside from the patent absurdity of it, since it amounts to giving thugs with badges PERMISSION to “break the law,” and makes it a CRIME for you to defend yourself against a CRIMINAL (if he has a badge), consider the logical ramifications of that attitude.

There were once some words written on a piece of parchment (with those words now known as the Fourth Amendment), that said that you have the right to be free from unreasonable searches and seizures at the hands of ”government” agents. In Indiana today, what could that possibly mean? The message from the ruling class is quite clear, and utterly insane. It amounts to this: “We don’t have the right to invade your home without probable cause … but if we DO, you have no right to stop us, and we have the right to arrest you if you try.”

Why not apply that to the rest of the Bill of Rights, while we’re at it? ”You have the right to say what you want, but if we use violence to shut you up, you have to let us.” (I can personally attest to the fact that that is the attitude of the U.S. “Department of Justice.”) “You have the right to have guns, but if we try to forcibly and illegally disarm you, and you resist, we have the right to kill you.” (Ask Randy Weaver and the Branch Davidians about that one.) “You have the right to not testify against yourself, but when we coerce you into confessing (and call it a ’plea agreement’), you can’t do a thing about it.” What good is a ”right”–what does the term “right” even mean–if you have an obligation to allow jackboots to violate your so-called “rights”? It makes the term absolutely meaningless.

To be blunt, if you have the right to do “A,” it means that if someone tries to STOP you from doing “A”–even if he has a badge and a politician’s scribble (“law”) on his side–you have the right to use whatever amount of force is necessary to resist that person. That’s what it means to have an unalienable right. If you have the unalienable right to speak your mind (a la the First Amendment), then you have the right to KILL “government” agents who try to shut you up. If you have the unalienable right to be armed, then you have the right to KILL ”government” agents who try to disarm you. If you have the right to not be subjected to unreasonable searches and seizures, then you have the right to KILL “government” agents who try to inflict those on you.

Those who are proud to be “law-abiding” don’t like to hear this, and don’t like to think about this, but what’s the alternative? If you do NOT have the right to forcibly resist injustice–even if the injustice is called ”law”–that logically implies that you have an obligation to allow ”government” agents to do absolutely anything they want to you, your home, your family, and so on. Really, there are only two choices: you are a slave, the property of the politicians, without any rights at all, or you have the right to violently resist “government” attempts to oppress you. There can be no other option.

Of course, on a practical level, openly resisting the gang called ”government” is usually very hazardous to one’s health. But there is a big difference between obeying for the sake of self-preservation, which is often necessary and rational, and feeling a moral obligation to go along with whatever the ruling class wants to do to you, which is pathetic and insane. Most of the incomprehensible atrocities that have occurred throughout history were due in large part to the fact that most people answer “never” to the question of “When should you shoot a cop?” The correct answer is: When evil is “legal,” become a criminal. When oppression is enacted as “law,” become a “law-breaker.” When those violently victimizing the innocent have badges, become a cop-killer.

The next time you hear of a police officer being killed “in the line of duty,” take a moment to consider the very real possibility that maybe in that case, the “law enforcer” was the bad guy and the “cop killer” was the good guy. As it happens, that has been the case more often than not throughout human history.

====related story====

from here

S.C. Police on Alert After Political Activist “Liked” Article on Facebook

With the increase in propaganda being pushed by the mainstream media government police state agencies regarding “right wing extremists” and “domestic terrorists,” many are no longer surprised when law enforcement or government agents single out individuals or groups that may express controversial or unpopular points of view, or even points of view that are simply critical of government or its agents.

Most people are content to accept the fact that these types of free speech violations happen but that they happen somewhere else like New York or Los Angeles where any number of things can happen on any given day.

However, some South Carolina residents are receiving a wake-up call today, as police in Kershaw County have been placed on alert for “people out there that might want to hurt them.” The reason for the alert? An article that was posted to a Facebook page and an individual that “liked” it.

The article, entitled “When Should You Shoot A Cop?” was published by, an organization that promotes transparency and accountability of law enforcement. The article discusses the issue of resistance to police “authority” and those police officers who are acting in an illegal fashion. The article also discusses the right that you have, as an individual, to defend your life and your person even when it is being threatened by a member of the police.

The article in question can be read here. Read it for yourself and draw your own conclusions.

Regardless of whether or not you agree with the thesis, the article never advocates or encourages anyone to kill police. At worst, it advocates the use of lethal force in self-defense. In fact, no one in Kershaw County is claiming that it does. It simply states that you have the right to defend yourself and your rights against unlawful police action, even to the point of using lethal force if necessary.

The article became an issue when Jeff Mattox, the co-chair of the Kershaw County Republican party, “liked” the article on Facebook. According to, the article was posted to Facebook by the Kershaw County Patriots, a grassroots conservative political organization of which Mattox is a member. It was at this point that he committed the crime of “liking” the article.

As a result, the Sheriff of Kershaw County, Jim Matthews, a man with an extensive background in freedom-crushing law enforcement divisions such as the DEA and SWAT (as well as the FBI and the US Army), put his officers on high alert upon his knowledge of the article.

He then went to the local newspaper where he stated, “The article in and of itself doesn’t advocate shooting an officer, but some who read it will get out of it what they want . . . Some warped individuals may get it in their mind that it’s OK to resist an officer to the point of shooting them.” Matthews also stated that the article “irritated” him because it came out just as he was about to attend the funeral of a Laurens County Deputy.

Of course, Mattox didn’t write the article. He didn’t even post it to Facebook. He merely “liked” it on someone else’s page. Not only that, but the Sheriff, as quoted above, even admits that the article itself never advocated shooting an officer.

But that didn’t stop the Sheriff from fear mongering the public and his officers about the dangers of free speech and those who not only exercise it, but those who listen to it. Thoughtcrime if you will.

Predictably, Mattox is now being asked by the Kershaw County Republican party, specifically by the Chariman Chris Oviatt, to step down. However, to his credit, Mattox has refused to step down or to apologize for the article.

Of course, the Sheriff and the Republican establishment are not the only enemies of free speech in Kershaw County. The majority of the Kershaw County Law Enforcement community seems to have rallied behind the belief that anyone who dares advocate (even passively) that someone defend themselves against state-sanctioned thuggery is a dangerous potential domestic terrorist.

Indeed, Camden Police Chief Joe Floyd has also placed his officers on high alert for individuals who “don’t recognize police authority.”

Floyd says, “We have knowledge now that some of these ideas exist here in Kershaw County. We’re just reinforcing the training that we already put our officers through, just to be watchful and mindful that the potential does exist, that people out there that might want to hurt them.”

Aside from the fact that Chief Floyd is frightened by Kershaw County citizens having ideas different from his own, one must wonder exactly what kind of training he is talking about.

Is the training that which was handed down from the Department of Homeland Security, such as that found in the MIAC document, which lists gun owners and returning veterans as specific threats?

Is it the criteria for domestic terrorists listed in the Texas Department of Public Safety Criminal Law Enforcement Pamphlet that includes “buying baby formula, beer, wearing Levi jeans, carrying identifying documents like a driver’s license and traveling with women or children?”

Is it the training provided by the Virginia training manual that lists potential domestic terrorists as those who advocate private property and “includes binoculars, video cameras, paper pads and notebooks in a compendium of terrorist tools.?”

Or, perhaps it was provided in the pages of the DHS document, “Rightwing Extremism: Current Economic and Political Climate Fueling Resurgence in Radicalization and Recruitment” which classifies a wide swath of Americans as potential domestic terrorists and suggests that the economic crisis, and other crises, may provoke a rise in “homegrown” terrorists.

One can only speculate as to the “training” that Chief Floyd speaks of.

However, considering the increase in propaganda, particularly in the wake of the Norway shooting, we should anticipate that the kind of overblown reactions such as that of the Kershaw County Sheriff and Camden Police Chief will only continue to increase.

We encourage you to contact the county and express your distaste for First Amendment violations.

Kershaw County Sheriff’s Office
Sheriff Jim Matthews
Camden City Police Department
Chief Joe Floyd

Facebook Investor Roger McNamee Explains Why Social Is Over

"The US government has basically ceded policy control to six or seven industries in their own categories of which telecom and television are one of the industries are allowed to set its own policy. right. obviously defence sets its own policy, the banking industry sets its own policy. i mean: right now we look a lot like (i hate to say it) Germany in the '30's right? or Italy in the 30's right? the big industries are active collaborators in government. i don't see anyway to disrupt it."

from here

Elevation Partners co-founder and Facebook investor Roger McNamee, who is also a rock musician, gave an amazing talk recently where he goes over some of the biggest trends affecting the technology industry.

The talk was spotted by our friend Dan Frommer at SplatF.

McNamee's bottomline? Everything is changing.

More specifically, a few big themes:
Microsoft is toast because we're moving to a post-PC era;
HTML5, the new web standard that allows to make interactive web pages, is going to revolutionize the media and advertising industries;
Social is "done", it's now a feature, don't go do a social startup.

Image: Screenshot
Here's what we thought were the most interesting points and assertions from the speech (quotes are paraphrased):
Microsoft's share of internet-connected devices has gone from 95% to under 50% in 3 years;

Windows no longer provides measurable ROI to enterprises, who will shift spending to other products and services; this is a huge opportunity;

Google is a victim of its own success: its search has become polluted by SEOs. What shows that Google has failed is all those "non-search" services that really solve a search problem, like or If you add them all up, they account for 50% of searches.

HTML5 is going to change everything. "In HTML5, an ad is an app, a tweet is an app, everything is an app." "It's a blank sheet of paper, and creativity rules again."

For example, "my band is putting out a full HTML5 site. You can watch all of our shows on an iPhone, live." It's very cheap and it changes the game because they don't have to pay anyone anything.

In HTML5, you don't need to have display ads: Amazon can have a section of its store as an ad. So if you're reading a book review, you can buy the book right from the page.

Because HTML5 can make sites rich and interactive, engagement on a site can go from seconds to minutes.

So a site could say: we have 5 sponsors today, which one would you like, and the sponsor follows you around throughout your experience on the site. "The fact that you can create and satisfy demand in the same place is only true in infomercials today, but it will be true on the web." This, in turn, is highly disruptive to TV advertising.

"The iPad is the most important device since the IBM PC."

"Apple will sell a hundred million internet-connected devices this year. That's two thirds of the PC market." If you add the other non-PC internet devices, that's more valuable than the PC market.

The iPad is the training wheels for HTML5. iPad apps show us what we need to beat in terms of creating a better experience on HTML5.

Apple is an unstoppable freight train. In terms of tablets, it has no competitors and will probably end up with iPod-like marketshare. "It's like IBM in the 60s; I can't predict what that means; you need to find a way to play with it, but you also need to find a way to play over it" with HTML5.

The fact that most people now have more than one device means the cloud is vital, because you want to have all your stuff on all your devices. It also means the old PC paradigm is dead, because the old PC paradigm means everything stored on one device, instead of everything in the cloud synced to many devices.

In terms of keeping your stuff in the cloud, "Google, Microsoft, Facebook and Apple have completely failed to get the mobile experience right." (We'll let McNamee stand by that statement.)

"Facebook has decided that they're Twitter on steroids".

Currently Facebook Connect is free; eventually they'll charge for it because it's access to their social graph which publishers need, and that's how they'l make money.

Don't try to be "social": the big social platforms are created. You can't create a social company, it's just a checkbox. "The last 500 social companies funded by the VC community are all worthless. I'm serious."

But this creates an opportunity: while everyone is focused on social distribution, there's a huge opportunity to get content right with HTML5. "Let's create a new product, the way music videos were a new product."

Apple makes more gross margin per iPhone than most Android phones make in gross revenue, McNamee says.

"Television is the last protected media business," but it's going to get disrupted. For one, once televisions are computers, analytics of who watches will get more accurate than Nielsen panels. "Everyone knows that if we go to actual measurement, ad rates will collapse because the numbers aren't as good as Nielsen makes them look."

McNamee also had a few words about the economy: "we're about 40% of the way of deleveraging the global economy, but we're only 10% of the way of deleveraging the US consumer...I don't care what your politics are, removing government demand from the economy when it's struggling is ridiculous." And to prop things up, the Fed is printing money and inflating bubbles, "but for us, that's great!": capital is very cheap; consumers are acting like the party's on, so there's lots of opporutnities.

McNamee says he does "full contact investing": he proves the concepts of what he invests in by trying them out with his band. So he knows HTML5 is going to work because it works for his band. Then he added, to audience laughter: "You're going to say it's a dipshit little band, yeah, it is, but we like it and our fans like it" and it works.

What Raj Can Teach You About Business

from here

I have lots of friends who complain that there’s not enough business, that times are tough, that things just aren’t coming together for them. I think they’re right. Times are tough. Things aren’t so easy. But then, they’re not Raj.

Raj is my taxi driver. I say “my” as if he works for me, and in a way, he did. I called him yesterday for a ride from my hotel in San Jose, to the PayPal campus of eBay’s headquarters. Raj showed up and took me there, as drivers do, but along the way, he asked me what else I was doing in town, what other trips I had planned, whether he could pick me up today and when.

I honestly hadn’t thought about my return trip, so of course I took Raj’s card, his personal card with his name and cell phone number on it, and I called him when I was done visiting eBay’s HQ (a post for another time).
What Raj Can Teach You About Business

Ask for the Sale – Raj asked me not just for my business by showing up when I called him, but he inquired about all my business for the duration of my stay in San Jose. I admit that I answered “yeah” in that way that everyone knows translates into “I’m not really even thinking about this right now, but thanks for asking.” Raj didn’t let that slide past. Instead, he asked again.

Deliver Good Service Execution – Raj delivered excellent service, getting me to my destination without any trouble, plus he was polite and friendly and cordial along the way. He didn’t over-participate in my ride, but he also didn’t sit quietly or talk on his phone (cab drivers love to chat with their friends while driving).

Reinforce the Sale – Raj repeated his offer when he dropped me off, put his personal business card in my hand (he purchased these cards himself – they’re not standard cab company issue), and he suggested what time he’d be back to get me. He then asked me to call him, but said that he’d PLAN to be there by a certain time. This basically guaranteed Raj the sale.

Ask for More Business – When Raj drove me back from my destination to my hotel, he asked me what driving plans I had for the rest of the night and also for the morning. He was there, asking for ALL of my business. He didn’t want me to just have any driver. He wanted all the business. I thought that was amazing.

The End Value

I got value out of having a driver that I knew and trusted, that had delivered great service, that was prompt and even diligent in executing his duties to their fullest. Raj got about $100 in fares and another $25 in tips. A typical cab ride in most cities can be around $20, with a tip usually being around $3 or so. The return on Raj’s investment was clearly much better all the way around.

Be Like Raj

In my consulting and my speaking, I’m not at all like Raj. I do my job and I go home. But maybe that’s not useful to my buyers. Maybe I need to seek out other ways I can be helpful. You know why I haven’t in the past? Because I was afraid that I would seem pushy or that I would seem to be grubbing or something. But after dealing with Raj, my impressions of him were that he was a business professional, that he sought to serve my needs to their fullest, and that he was not shy to ask for the sale.

I plan to be like Raj. How about you?

Julia Roberts illegal in the UK. They say: "Too Pretty For Us"!

Loreal's Julia Roberts campaigns banned

Advertising watchdog upholds complaints by Liberal Democrat MP Jo Swinson that images overly airbrushed

from here

L'Oréal has been forced to pull ad campaigns featuring Pretty Woman star Julia Roberts and supermodel Christy Turlington, after the advertising watchdog upheld complaints by Liberal Democrat MP Jo Swinson that the images were overly airbrushed.

Swinson, who has waged a long-running campaign against "overly perfected and unrealistic images" of women in adverts, lodged complaints with the Advertising Standards Authority about the magazine campaigns for L'Oréal-owned brands Lancôme and Maybelline. The ASA ruled that both ads breached the advertising standards code for exaggeration and being misleading and banned them from future publication.

L'Oréal's two-page ad featuring Roberts, who is the face of Lancôme, promoted a foundation called Teint Miracle, which it claims creates a "natural light" that emanates from beautiful skin. It was shot by renowned fashion photographer Mario Testino. The ad for Maybelline featured Turlington promoting a foundation called The Eraser, which is claimed to be an "anti-ageing" product. In the ad, parts of Turlington's face are shown covered by the foundation while other parts are not, in order to show the effects of the product.

Swinson complained that images of both celebrities had been digitally manipulated and were "not representative of the results the product could achieve".

L'Oréal UK admitted that Turlington's image had been "digitally retouched to lighten the skin, clean up makeup, reduce dark shadows and shading around the eyes, smooth the lips and darken the eyebrows". However, it claimed there were still signs of ageing, such as crow's feet, and that the image "accurately illustrated" the achieveable results.

The company, which provided the ASA with pictures of both women "on the red carpet" to show that they were naturally beautiful, admitted that digital post-production techniques had been used on Roberts but maintained that the changes were not "directly relevant" and that the ad was an "aspirational picture".

Swinson said it was "shocking" that the ASA was not allowed to see the pre-production pictures of Roberts due to contractual agreements with the actor. "It shows just how ridiculous things have become when there is such fear over an unairbrushed photo that even the advertising regulator isn't permitted to see it," she added.

In the case of both the Roberts and Turlington ads the ASA said it was not provided with enough information to evaluate what impact the digital enhancements had on the final image.

"On the basis of the evidence we had received we could not conclude that the ad image accurately illustrated what effect the product could achieve, and that the image had not been exaggerated by digital post-production techniques," the ASA said.

"Pictures of flawless skin and super-slim bodies are all around, but they don't reflect reality," said Swinson. "Excessive airbrushing and digital manipulation techniques have become the norm, but both Christy Turlington and Julia Roberts are naturally beautiful women who don't need retouching to look great. This ban sends a powerful message to advertisers – let's get back to reality."

Facebook's Randi Zuckerberg: Anonymity Online 'Has To Go Away'

Randi Zuckerberg, Facebook’s marketing director, has a fix for cyberbullying: stop people from doing anything online without their names attached.

Facebook requires all members to use their real names and email addresses when joining the social network -- a policy that has been difficult at times to enforce, as the prevalence of spam accounts or profiles assigned to people’s pets suggest.

Zuckerberg, who is Facebook co-founder Mark Zuckerberg’s sister, argued that putting an end to anonymity online could help curb bullying and harassment on the web.

“I think anonymity on the Internet has to go away,” she said during a panel discussion on social media hosted Tuesday evening by Marie Claire magazine. “People behave a lot better when they have their real names down. … I think people hide behind anonymity and they feel like they can say whatever they want behind closed doors.”

Former Google CEO Eric Schmidt has also made this suggestion, calling online anonymity “dangerous” and predicting that governments will eventually “demand” that people use their names for all online activity.

But the proposal to tie real-world identities to online actions is a controversial one, with many privacy and free speech advocates countering that anonymity is necessary to protect dissidents and other individuals, such as sexual abuse victims.

Gigaom’s Matthew Ingram wrote recently, “Many people believe that requiring real names will solve the problems of trolls and bad behavior, but they don’t -- and that policy can have negative consequences in terms of suppressing dialogue about important topics.”

The transformation of business

Banking by

Banking 1

Banking 2: A bank's income statement

Banking 3: Fractional Reserve Banking

Banking 4: Multiplier effect and the money supply

Banking 5: Introduction to Bank Notes

Banking 6: Bank Notes and Checks

Banking 7: Giving out loans without giving out gold

Banking 8: Reserve Ratios

Banking 9: More on Reserve Ratios (Bad sound)

Banking 10: Introduction to leverage (bad sound)

Banking 11: A reserve bank

Banking 12: Treasuries (government debt)

Banking 13: Open Market Operations

Banking 14: Fed Funds Rate

Banking 15: More on the Fed Funds Rate

Banking 16: Why target rates vs. money supply

Banking 17: What happened to the gold?

Banking 18: Big Picture Discussion

Adverse Possession

(In Oklahoma, the duration of such possession is fifteen (15) years. Oklahoma Code §12-93; 60-333.)
I live in Michigan and what I found about adverse possession not only covers Michigan, but Arkansas, Maine, Missouri, Montana, Nevada, South Carolina, Texas, Virginia, Vermont and Wyoming.

Many landowners are surprised to learn that under certain situations, a neighbor can occupy your land and gain legal ownership of it. The trespasser may acquire a few feet of property or whole acres by doing this. If someone is using your property, even a small strip on the edge, you should be aware of the risk!

Even if the neighbor can’t claim your property, they may be able to gain the legal right to use part of your property; this is called a prescriptive easement.

The legal doctrine that allows trespassers to become owners is called “adverse possession.” If the people involved can’t work something out, the property owner may sue the trespasser, or the trespasser may bring a lawsuit to quiet title (request for the court to settle who owns what).


A trespasser is entitled to legal ownership of property if his occupation of the property is hostile, actual, open and notorious, exclusive and continuous for a period of years (15 in Michigan) set by state statute. This does not apply to bank or government owned property (We explain each of these terms below). Bank owned property time limits are reset from point of sale. Government owned properties can never fall under adverse possession. Some states, such as California, also require the trespasser to have paid the local property taxes on the land.(1) The time required, which varies from state to state, is usually twenty years. It can be as short as five years when the trespasser pays the property taxes.

In Michigan, the elements of adverse possession are: ACTUAL, OPEN, NOTORIOUS, EXCLUSIVE, VISIBLE, AND UNINTERRUPTED POSSESSION of the property that was hostile to the owner and under cover of a claim of right for a fifteen-year period. Rozmarek v Plamondon, 419 Mich 287, 295; 351 NW2d 558 (1984).

It is possible to gain a prescriptive easement, also, the elements of which are the same except for exclusivity (it’s not necessary for the use by the person claiming the easement to have been exclusive). Plymouth Canton Community Crier, Inc v Prose, 242 Mich App 676, 679; 619 NW2d 725 (2000).

It is also possible to “tack” periods of successive adverse possession by successive owners (add the number of years together) in order to satisfy the statutory period, although it can be tricky to prove that all elements were satisfied by a former owner (or owners).


The word “hostile” does not mean that the trespasser barricades himself on the land with a shotgun. Most courts follow one of two legal definitions of hostile. One is called the “Maine rule” which applies to Michigan and requires that the person be aware that he is trespassing. The other rule (followed by most states) is the “Connecticut rule,” defines hostile simply as occupation of the land and doesn’t necessarily have to know that the land belongs to someone else.


The trespasser must actually be in POSSESSION of the property and treat it as if he were an owner. This means there must be a physical presence on the land. It’s not enough for someone just to make a claim, orally or in writing, of ownership.

The words “OPEN AND NOTORIOUS” simply mean that it must be obvious to anyone, including an owner who investigates, that a trespasser is on the land. Actual (physical) possession is usually open and notorious. A person pruning the rose garden that she planted on a strip of the neighbor’s back yard. Same goes for the neighbor who just put up a fence up slightly on your property is obvious.


The trespasser must possess the land exclusively and without interruption for the statutory time period. You can find how many years are required in your state from the chart below.

For continuous possession, the trespasser can’t give up the use of the property in such a way that he no longer acts as an owner, and then return to it and count the time that it was abandoned. It has to be maintained continuously.

The person trespassing must be the only one occupying the property – he can’t share possession with strangers or the owner. (By contrast, a trespasser can gain the right to use a certain part of another’s property, a prescriptive easement, even if possession or use is shared with others.

If one person uses the property for a while and leaves, and another shows up for a while, the times can’t be combined – the possession hasn’t been exclusive by one person.

If, however, the trespasser actually sells or gives the property to someone else, the recipient becomes the adverse possessor and the years that the first trespasser spent occupying the land count for the new one’s claim. This is called “tacking.” When one trespasser passes the land to the next, then that person’s claim is tacked on to the previous one.


You can loose your property if you don’t keep an eye on it! Nobody should allow the boundaries to be redrawn by inattention and inaction — in a city, a loss of even twenty feet could be devastating to a property investment.

If you are concerned that someone has a possible claim to your land, check the local property tax records to see if anyone has made tax payments for the property. Paying taxes always bolsters an adverse possession claim, even when it is not required for a successful claim.

There are several steps an owner can take to prevent a trespasser from gaining a legal claim to the ownership.


One effective way to thwart a possible claim is by giving permission to use your land. If Norma is out planting a garden in your backyard, treating it as her own land, step over and say “Hello, you are on my property by a few feet, but that’s okay.” You don’t have to throw her off your property; simply claim it. Then put the permission in writing and obtain an acknowledgment from Norma. The chain has been broken. She can tend that garden for forty years and still never acquire a legal claim to your property if she has your permission.

An example of written permission is shown below.

Agreement Granting Permission to Use Property

I, Homeowner, owner of the property located at 123 Fun Drive, Clearwater, FL, give my permission to Trespasser to plant and tend a garden located on a ten-foot strip of my property bordering the north of the property line. I reserve the right to revoke this permission at any time.

___________________________ __________
Homeowner date

I, Trespasser, acknowledge that my use of this strip of and belonging to Homeowner is by permission only, and that the permission may be revoked at any time.

___________________________ __________
Trespasser date

This type of agreement can be used to grant permission for parking, using a shortcut across property or even growing crops. It not only can defeat adverse possession claims, but also a claim to an easement across your property. When you use such a written permission, be absolutely sure that the portion of your land being used is described in enough detail so that it is easily identifiable.

If your neighbor is upset or insulted by the idea of a written permission, show them this webpage. Explain that while you have no objection to her use of your land, you must protect your interest for later years.

If the neighbor refuses to acknowledge the permissive use, you are then on the alert of a possible claim that is adverse to your interest, and you should take steps to prevent further use of your property.


If someone wants to remain on your property, you can always offer to rent it to them. In fact, the presentation of a rental agreement can be very effective in getting some trespassers to immediately leave on their own.


If someone refuses to acknowledge a permission, and ignores your requests to stay off your property, you can call the police or notify the sheriff and have the person removed or arrested.

When the trespasser is a next-door neighbor, you may be understandably reluctant to bring in the police. But sometimes it is necessary to protect your property and will start a record that can save your property!


Any time it appears that a trespasser may be entertaining the idea of claiming your property under an adverse possession theory, see a lawyer. You may need to file a lawsuit to eject the trespasser from the land. Or you may want to ask a court to order a structure removed or a person to stay away. You must act before the trespasser has been on your land long enough, under your state’s law, to make a successful adverse possession claim.

Jones and Smith share a boundary line of record. Smith knowing it is not his property occupies part of Jones’ property for a tennis court.

This type of boundary line question is really one of adverse possession. These cases are determined under the rubric of has the possessor established such possession to be actual, visible, open, notorious, hostile, continuous and adverse to all. Here there is no assumption that the parties agreed upon the placement of that part of the tennis court across the boundary line. There is no mistake as to where the line is. There is no actual or implied permission or acquiescence. Jones just takes land, fences it, covers it with tarvia and occupies it as a tennis court. The required number of years go by and Smith never objects or follows through on any objections that he may have. Jones is now the owner of the land or at least cannot be evicted. Numerous Michigan cases have dealt with such issues.

Michigan still recognizes “squatters rights”. That takes precedence over a survey. And the title company told us they will not get involved and it is in the fine print that they NEVER cover boundary disputes. Believe me, we have learned a lot in the last year and have spent a ton of money. You will likely have no problem.

State Time Limits on Adverse Possession from Black’s Law Dictionary, Fifth Edition.

Alabama: In Alabama the period of time for adverse possession must be at least twenty (20) years.
Arizona: In Arizona the period of time for adverse possession must be at least ten (10) years. Arizona Code §12-521 through 528.
Arkansas: In Arkansas the period of time for adverse possession must be at least seven (7) years. Arkansas Code §16-56-105; 18-11-102, 03; 18-60-212.
California: In California the period of time for adverse possession must be at least five (5) years. The claimant of an easement by adverse possession must also pay the taxes due for the five (5) year period if it has been separately assessed. California CC §1007.
Colorado: In Colorado the period of time for adverse possession must be at least eighteen (18) years. Colorado Code §38-41-101, 108, 109.
Connecticut: In Connecticut the period of time for adverse possession must be at least fifteen (15) years. Connecticut Code §37-40; 47-25.
Delaware: In Delaware the period of time for adverse possession must be at least twenty (20) years. Delaware Code §10-7901, 7902.
Florida: In Florida the period of time for adverse possession must be at least seven (7) years. Florida Code §95.16-.18.
Georgia: In Georgia the period of time for adverse possession must be at least seven (7) years for improved land and twenty (20) years for wild land. Georgia Code §44-5-175; 44-9-1.
Hawaii: In Hawaii the period of time for adverse possession must be at least twenty (20) years. Hawaii Code §657-31, 31.5.
Idaho: In Idaho the period of time for adverse possession must be at least five (15) years. Idaho Code §5-208 through 210.
Illinois: In Illinois the period of time for adverse possession must be at least twenty (20) years. This type of easement does not arise if the owner of the servient estate posts a conspicuous notice on the real estate stating that the use of it is permitted and subject to his/her control. Illinois Code §735-5/13-122.
Indiana: In Indiana the period of time for adverse possession must be at least twenty (20) years. Indiana Code §32-5-1-1.
Iowa: In Iowa the period of time for adverse possession must be at least ten (10) years. The owner of the servient estate may prevent the establishment of a prescriptive easement by serving written notice upon the easement claimant within the ten (10) year period that he/she disputes the claim. Iowa Code §564.1, 4-7.
Kansas: In Kansas the period of time for adverse possession must be at least fifteen (15) years. Kansas Code §60-503.
Kentucky: In Kentucky the period of time for adverse possession must be at least seven (7) years if held under patent and fifteen (15) years otherwise. Kentucky Code §413.050.
Maine: In Maine the period of time for adverse possession must be at least twenty (20) years. The owner of the servient estate may prevent a prescriptive easement by giving written public notice that he/she objects to the easement. Maine T.14, §812.
Maryland: In Maryland the period of time for adverse possession must be at least twenty (20) years. Maryland Courts Art. §5-103.
Massachusetts: In Massachusetts the period of time for adverse possession must be at least twenty (20) years. The owner of the servient estate may prevent prescriptive easement by posting a conspicuous notice on the real estate claimed as an easement which states the owner’s intent to prevent an acquisition of an easement. Massachusetts C. 187, §2-3.
Michigan: In Michigan the period of time for adverse possession must be at least fifteen (15) years. Michigan CLA §600.5801.
Minnesota: In Minnesota the period of time for adverse possession must be at least fifteen (15) years. Minnesota Code §508.02; 541.01-.02.
Mississippi: In Mississippi the period of time for adverse possession must be at least ten (10) years. Mississippi Code §15-1-7, 13.
Missouri: In Missouri the period of time for adverse possession must be at least ten (10) years. Missouri Code §516.010-.030.
Montana: In Montana the period of time for adverse possession must be at least five (5) years. Montana Code §70-19-405.
Nebraska: In Nebraska the period of time for adverse possession must be at least ten (10) years. Nebraska Code §25-202.
Nevada: In Nevada the period of time for adverse possession must be at least five (5) years. Nevada Code §11.070-.080.
New Hampshire: In New Hampshire the period of time for adverse possession must be at least twenty (20) years. New Hampshire C. 508, §2.
New Jersey: In New Jersey the period of time for adverse possession must be at least twenty (20) years. New Jersey Common Law.
New Mexico: In New Mexico the period of time for adverse possession must be at least ten (10) years. New Mexico Code §37-1-22.
New York: In New York the period of time for adverse possession must be at least ten (10) years. New York Real Prop. A&P.L. §501-551.
North Dakota: In North Dakota the period of time for adverse possession must be at least ten (10) years. North Dakota Code §47-05-12.
Ohio: In Ohio the period of time for adverse possession must be at least twenty-one (21) years. Ohio Code §2305.04.
Oklahoma: In Oklahoma the period of time for adverse possession must be at least fifteen (15) years. Oklahoma Code §12-93; 60-333.
Oregon: In Oregon the period of time for adverse possession must be at least ten (10) years. Oregon Code §12.050
Pennsylvania: In Pennsylvania the period of time for adverse possession must be at least twenty-one (21) years. Pennsylvania Code §42-5530.
Rhode Island: In Rhode Island the period of time for adverse possession must be at least ten (10) years. Rhode Island Code 34-7-1.
South Carolina: In South Carolina the period of time for adverse possession must be at least twenty (20) years. South Carolina Code §15-67-210 through 260.
Tennessee: In Tennessee the period of time for adverse possession must be at least twenty (20) years. Tennessee Common Law.
Utah: In Utah the period of time for adverse possession must be at least twenty (20) years. Utah Common Law; Title 78, Chapter 12.
Virginia: In Virginia the period of time for adverse possession must be at least twenty (20) years. Virginia Common Law.
Washington: In Washington the period of time for adverse possession must be at least ten (10) years. Washington Code §7.28.050-.090.
West Virginia: In West Virginia the period of time for adverse possession must be at least ten (10) years. West Virginia Common Law Code §55-2-1.
Wisconsin: In Wisconsin the period of time for adverse possession must be at least twenty (20) years. Wisconsin Code §893.28.
Wyoming: In Wyoming the period of time for adverse possession must be at least ten (10) years. Wyoming Code §24-1-101.

Note: This is not a substitute for legal advice. Accuracy is not guaranteed. An attorney must be consulted and you should check with your state to verify the accuracy of the above information.

Government Increases Hysteria Over Cyber Attacks in Push to Crack Down on Internet

Last week Republican senator John McCain called for the government to establish a special panel to come up with legislation to address supposed cybersecurity threats facing the United States.

“The only way to move comprehensive cyber security legislation forward swiftly is to have committee chairmen and ranking members step away from preserving their own committees’ jurisdiction … (and) develop a bill that serves the national security needs of all Americans,” McCain said.

As if on cue, the Pentagon announced two previously unpublicized attacks following McCain’s call for a bipartisan action.

On Thursday, out-going deputy secretary of defense Bill Lynn said a foreign intelligence service had stolen 24,000 files on a sensitive weapons system from a defense contractor’s network.

Lynn said the Defense Industrial Base Cyber Pilot was established to work with the private sector in the battle against cyber foes.

“Our success in cyberspace depends on a robust public-private partnership,” said Lynn. “The defense of the military will matter little unless our civilian critical infrastructure is also able to withstand attacks.”

Lynn cranked up the paranoia in February when he speculated that al-Qaeda might get its hands on the Stuxnet virus. He said “it is possible for a terrorist group to develop cyberattack tools on their own or to buy them on the black market.”

The highly sophisticated malware virus was engineered by the United States and with Israeli Mossad assistance placed on an Iranian industrial computer network in order to undermine the country’s nuclear energy program.

In 2009, Obama made a major speech on the threat posed by hackers and other evil doers.

In May, the Pentagon announced it would respond to cyber mischief and thievery with military action. “If you shut down our power grid, maybe we will put a missile down one of your smokestacks,” said a military official.

According to government bureaucrats, the Pentagon is “perfectly situated” to respond – presumably with missiles down smokestacks – and can “match its extensive human network with its extensive technological network,” according to Martha Stansell-Gamm, the former chief of the computer crime and intellectual property section at the Justice Department.

During his Senate confirmation last month as Obama’s new Secretary of Defense, Leon Panetta said that the “next Pearl Harbor we confront could very well be a cyber-attack that cripples our power systems, our grid, our security systems, our financial systems, our governmental systems.”

As we noted last August, critical infrastructure in the United States is not connected to the public internet.

Dire reports issued by the government “are usually richer in vivid metaphor — with fears of ‘digital Pearl Harbors’ and ‘cyber-Katrinas’ — than in factual foundation,” writes Evgeny Morozov, a Belarus-born researcher and blogger who writes on the political effects of the internet.

“Our legislature is utterly supine before the national security bureaucracy, which exaggerates cybersecurity threats and consistently uses the secrecy trump card to defy oversight,” writes Jim Harper for CATO. “Benign intentions do not control future results, and governmental surveillance of the Internet for ‘cybersecurity’ purposes may warp over time to surveillance for ideological and political purposes.”

The largely mischievous attacks by shadowy hacktivist groups on the CIA, Sony, Lockheed Martin, Sega, and other corporations and government agencies are being cynically exploited to push for new restrictions and other draconian measures by the government and the military, including abandoning the old internet for a new one.

Former CIA director Michael Hayden recently said the government should build a new internet that would require certified credentials for entry and would do away with users’ Fourth Amendment rights to privacy.

In June, a former Marine in military intelligence was linked to LulzSec, one of the mysterious hacker groups allegedly responsible for attacking both the CIA and the Senate. In addition, the LulzSec group attacked Sony BMG,,,,, US X Factor contestant database,, InfraGard, and other corporations.

Considering the track record of the government and the Pentagon, it is entirely possible LulzSec and other so-called hacktivist groups are intelligence fronts designed to crank up the hysteria and push for a government-controlled and centralized internet.

The Pentagon assertion that it now has a blank check to attack foreign adversaries accused of cyber attacks is particularly frightening. Government officials routinely blame nuclear super powers China and Russia for the attacks and the Pentagon’s new posture reveals it is ready to attack any country that allegedly violates its networks and those of its corporate partners.

Epert Ray Dalio says the USA will go into poverty in 2013

Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets. “There hasn’t been a case in history where they haven’t eventually printed money and devalued their currency,” he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don’t have the option of printing money and are destined to undergo “classic depressions,” Dalio said. The recent deal to avoid an immediate debt default by Greece didn’t alter his pessimistic view. “People concentrate on the particular thing of the moment, and they forget the larger underlying forces,” he said. “That’s what got us into the debt crisis. It’s just today, today.”

Dalio’s assessment sounded alarmingly plausible. But when one plays the global financial markets a thorough economic analysis is only the first stage of the game. At least as important is getting the timing right. I asked Dalio when all this would start to come together. “I think late 2012 or early 2013 is going to be another very difficult period,” he said.

from here

Mastering the Machine
How Ray Dalio built the world’s richest and strangest hedge fund.
by John Cassidy

Ray Dalio, the sixty-one-year-old founder of Bridgewater Associates, the world’s biggest hedge fund, is tall and somewhat gaunt, with an expressive, lined face, gray-blue eyes, and longish gray hair that he parts on the left side. When I met him earlier this year at his office, on the outskirts of Westport, Connecticut, he was wearing an open-necked blue shirt, gray corduroy pants, and black leather boots. He looked a bit like an aging member of a British progressive-rock group. After a few pleasantries, he grabbed a thick briefing book and shepherded me into a large conference room, where his firm was holding what he described as its weekly “What’s going on in the world?” meeting.

Of the fifty or so people present, most were clean-cut men in their twenties or thirties. Dalio sat down near the front of the room. A colleague began describing how the European Central Bank had just bought some Greek bonds from investors at a discount to their face value—a move that the speaker described as a possible precursor to an over-all restructuring of Greece’s vast debts. Dalio interrupted him. He said, “Here’s where you are being imprecise,” and then explained at length what a proper debt restructuring would entail, dismissing the E.C.B.’s move as an exercise in “kicking it down the road.”

Dalio is a “macro” investor, which means that he bets mainly on economic trends, such as changes in exchange rates, inflation, and G.D.P. growth. In search of profitable opportunities, Bridgewater buys and sells more than a hundred different financial instruments around the world—from Japanese bonds to copper futures traded in London to Brazilian currency contracts—which explains why it keeps a close eye on Greece. In 2007, Dalio predicted that the housing-and-lending boom would end badly. Later that year, he warned the Bush Administration that many of the world’s largest banks were on the verge of insolvency. In 2008, a disastrous year for many of Bridgewater’s rivals, the firm’s flagship Pure Alpha fund rose in value by nine and a half per cent after accounting for fees. Last year, the Pure Alpha fund rose forty-five per cent, the highest return of any big hedge fund. This year, it is again doing very well.

The discussion in the conference room moved on to Spain, the United Kingdom, and China, where, during the previous week, the central bank had raised interest rates in an attempt to slow inflation. Dalio said that the Chinese economy was in danger of overheating, and somebody asked how a Chinese slowdown would affect the price of oil and other commodities. Greg Jensen, Bridgewater’s co-chief executive and co-chief investment officer, who is thirty-six, said he thought that even a stuttering China would still grow fast enough to push world commodity prices upward.

Dalio asked for another opinion. From the back of the room, a young man dressed in a black sweatshirt started saying that a Chinese slowdown could have a big effect on global supply and demand. Dalio cut him off: “Are you going to answer me knowledgeably or are you going to give me a guess?” The young man, whom I will call Jack, said he would hazard an educated guess. “Don’t do that,” Dalio said. He went on, “You have a tendency to do this. . . . We’ve talked about this before.” After an awkward silence, Jack tried to defend himself, saying that he thought he had been asked to give his views. Dalio didn’t let up. Eventually, the young employee said that he would go away and do some careful calculations.

After the meeting, Dalio told me that the exchange had been typical for Bridgewater, where he encourages people to challenge one another’s views, regardless of rank, in what he calls a culture of “radical transparency.” Dalio had no qualms about upbraiding a junior employee in front of me and dozens of his colleagues. When confusions arise, he said, it is important to discuss them openly, even if that involves publicly pointing out people’s mistakes—a process he referred to as “getting in synch.” He added, “I believe that the biggest problem that humanity faces is an ego sensitivity to finding out whether one is right or wrong and identifying what one’s strengths and weaknesses are.”

alio is rich—preposterously rich. Last year alone, he earned between two and three billion dollars, and reached No. 55 on the Forbes 400 list. But what distinguishes him more from other hedge-fund managers is the depth of his economic analysis and the pretensions of his intellectual ambition. He is very keen to be seen as something more than a billionaire trader. Indeed, like his sometime rival George Soros, he appears to aspire to the role of worldly philosopher. In October, 2008, at the height of the financial crisis, he circulated a twenty-page essay immodestly titled “A Template for Understanding What’s Going On,” which said the economy faced not just a common recession but a “deleveraging”—a period in which people cut back on borrowing and rebuild their savings—the impact of which would be felt for a generation. This line of analysis wasn’t unique to Dalio, but almost three years later, with economic growth stagnating again, it does not seem off the mark.

Many hedge-fund managers stay pinned to their computer screens day and night monitoring movements in the markets. Dalio is different. He spends most of his time trying to figure out how economic and financial events fit together in a coherent framework. “Almost everything is like a machine,” he told me one day when he was rambling on, as he often does. “Nature is a machine. The family is a machine. The life cycle is like a machine.” His constant goal, he said, was to understand how the economic machine works. “And then everything else I basically view as just a case at hand. So how does the machine work that you have a financial crisis? How does deleveraging work—what is the nature of that machine? And what is human nature, and how do you raise a community of people to run a business?”

Dalio is serenely convinced that the precepts he relies on in the markets can be applied to other aspects of life, such as career development and management. And he has enough regard for his own views on these subjects to have collected them in print. Before our meeting, he sent me a copy of his “Principles,” a hundred-page text that is required reading for Bridgewater’s new hires. It turned out to be partly a self-help book, partly a management manual, and partly a treatise on the principles of natural selection as they apply to business. “I believe that all successful people operate by principles that help them be successful,” a passage on the second page said. The text was organized into three sections: “5 Steps to Personal Evolution,” “10 Steps to Personal Decision-Making,” and “Management Principles.” The last of the two hundred and seventy-seven management principles was: “Constantly worry about what you are missing. Even if you acknowledge you are a ‘dumb shit’ and are following the principles and are designing around your weaknesses, understand that you might still be missing things. You will be better and be safer this way.”

Dalio’s philosophy has created a workplace that some call creepy. Last year, Dealbreaker, a Wall Street Web site, picked up a copy of the Principles and made fun of a section in which Dalio appeared to compare Bridgewater to a pack of hyenas feeding on a young wildebeest. In March, AR, a magazine that covers hedge funds, quoted a former colleague of Dalio’s saying, “Bridgewater is a cult. It’s isolated, it has a charismatic leader and it has its own dogma.” The authors of the article noted that Dalio’s “emphasis on tearing down an individual’s ego hints at the so-called struggle groups of Maoism,” while his search for “human perfection devoid of emotion resembles the fantasy world in Ayn Rand’s ‘The Fountainhead.’”

Dalio doesn’t pretend that Bridgewater is a typical workplace, but he is sensitive to criticism. The recent media attention irked him, because, in his view, it misrepresented and trivialized Bridgewater’s culture, which he insists is central to the firm’s success. “It is why we made money for our clients during the financial crisis when most others went over the cliff,” he wrote to me in an e-mail. “Our greatest power is that we know that we don’t know and we are open to being wrong and learning.”

After the “What’s going on in the world?” meeting, he walked back to his office, an airy but modest-sized corner space that overlooks the Saugatuck River and is lined with pictures of his wife and four sons. He sat down behind his desk and showed me a book he had been reading—“Einstein’s Mistakes: The Human Failings of Genius,” by Hans C. Ohanian. “Here was the greatest mind of the twentieth century, and he made lots of mistakes,” Dalio said. In his Principles, Dalio declares that acknowledging errors, studying them, and learning from them is the key to success. He writes, “Pain + Reflection = Progress.” Bridgewater puts this equation into action by organizing lengthy assessment sessions, in which employees must discuss their mistakes.

The next item on Dalio’s agenda was a meeting with his two co-chief executives: Jensen and David McCormick, a former senior official in the Treasury Department under George W. Bush. Like virtually all meetings at Bridgewater, this one was taped. Dalio says that the tapes—some audio, some video—provide an objective record of what has been said; they can be used for training purposes, and they allow Bridgewater’s employees to keep up with what is going on at the firm, including his discussions with senior colleagues. “They get to see all of my mistakes,” Dalio told me. “They get to see all of my humanity.”

Once a tape recorder had been switched on, Jensen, McCormick, and Dalio discussed the possible promotion of an internal candidate to a senior-management role. McCormick, a soft-spoken forty-five-year-old who studied engineering at West Point, argued that the candidate’s prior experience at a big Wall Street firm indicated that he could probably do the job. Dalio disagreed. An investment bank is a “totally different world,” he said. But, rather than continue the discussion, he asked one of his assistants to call in the candidate. One rule of radical transparency is that Bridgewater employees refrain from saying behind a person’s back anything that they wouldn’t say to his face.

The man arrived and stood before Dalio’s desk. Dalio explained what the discussion was about and said, “I don’t imagine that you would be a good fit for the job.” The man took a seat, and Dalio and McCormick continued their discussion about his qualifications. The candidate explained his experience on Wall Street and said he thought he could do the job well. Dalio leaned back in his chair, looking skeptical. The employee didn’t get the promotion.

he only child of Italian-American parents, Ray Dalio was born in Jackson Heights, Queens, in 1949. His father was a jazz musician who played the clarinet and saxophone at Manhattan jazz clubs such as the Copacabana; his mother was a homemaker. When Dalio was eight, the family bought a three-bedroom house in Manhasset, and enrolled Ray in the local public school. “I was a bad student,” he recalls. “I have a bad rote memory, and I didn’t like studying.” From the age of twelve, Dalio caddied at the nearby Links Golf Club, whose members included many Wall Street investors. Some of them gave Dalio tips. The first stock he purchased was Northeastern Airlines, which soon received a takeover offer. Its shares tripled. “I figured that this was an easy game,” Dalio said. By the time he started college, at a nearby campus of Long Island University, he had built up a stock portfolio worth several thousand dollars.

After signing up for some finance classes, he discovered that there were some topics he enjoyed studying. Transcendental meditation, which he took up following a trip to India by the Beatles, also helped his work habits. Most mornings before going to the office, he still meditates. Demonstrating his technique, he sat back in his office chair, closed his eyes, and clasped his hands in front of him. “It’s just a mental exercise in which you are clearing your mind,” he said. “Creativity comes from open-mindedness and centeredness—seeing things in a nonemotionally charged way.”

After graduating, Dalio went to Harvard Business School, where he traded commodities—grains, oil, cotton, and so on—for his own account. Not long after leaving Harvard, he landed at Shearson Hayden Stone, the brokerage firm run by Sanford Weill. Dalio worked in the commodity-futures department, advising cattle ranchers, grain producers, and others on how to hedge risks. (The horns of a longhorn steer, the gift of some California ranchers, are mounted behind his desk.) On New Year’s Eve in 1974, Dalio went out drinking with his departmental boss, got into a disagreement, and slugged him. About the same time, at the annual convention of the California Food & Grain Growers’ Association, he paid an exotic dancer to drop her cloak in front of the crowd. After being fired, he persuaded some of his clients to hire him as a consultant and founded Bridgewater, operating it out of his two-bedroom apartment. He was twenty-six years old.

By the early nineteen-eighties, Dalio had got married, started a family, and moved to Wilton, Connecticut, where he lived and traded out of a converted barn. He also advised businesses on how to manage risk and published an economic newsletter. One of his readers was Bob Prince, a young financial analyst who worked for a bank in Oklahoma, and who is now Bridgewater’s co-chief investment officer. Prince showed one of Dalio’s articles to his boss, David Moffett, who went on to become the chief executive of Freddie Mac. “He said it was the best thing he had ever read on how the economy works,” Prince recalled. Another of Dalio’s articles that stuck in Prince’s memory was titled “What Is a Jeweler?” It described a jeweller as basically an investor with a long position in gold and precious stones. If the market price of these commodities goes up, the jeweller makes money on his stock. If prices fall, he can lose out. To limit the risk, Dalio wrote that jewellers should purchase gold-futures contracts designed to rise in value when the price of gold falls.

In 1985, Dalio persuaded the World Bank’s employee-retirement fund to let Bridgewater manage some of its capital. In 1989, Kodak’s retirement system did the same. At the time, Kodak had most of its money invested in stocks. Dalio’s pitch, which hasn’t changed much over the years, was that by investing in a variety of other markets, such as U.S. and international bonds, and using leverage to bolster its exposure, Bridgewater could match or beat the stock market with less risk. “He had a new way of thinking,” Rusty Olson, who ran Kodak’s retirement funds for many years, told me. “You get the same return, but you get a heck of a lot of beneficial diversification, too.”

edge funds date to 1949, when Alfred Winslow Jones, a writer at Fortune, opened a private investment firm using sixty thousand dollars he had raised from friends and forty thousand he had saved. To boost his returns, Jones borrowed heavily and bought stocks he liked “on margin”—a practice that had been discredited in the late nineteen-twenties. As a “hedge” against the market falling, Jones also picked out some stocks he believed to be overvalued and bet against them—a practice known as “selling short.” Jones’s fund regularly beat the Dow, and by the late nineteen-sixties it had attracted many imitators.

Worldwide, there are now some ten thousand hedge funds, which the government regulates only loosely. Together, they have about two trillion dollars under management. Even today, they employ the two basic tools that Jones used—borrowing (“leverage”) and selling short—and they charge their clients hefty fees, as Jones did. On top of a two-per-cent management fee, they deduct twenty per cent of any investment gains they generate. Jones claimed that this remuneration scheme, which is known as “two and twenty,” was inspired by the way ancient Phoenician merchants financed their trading expeditions. But the practice is also tax-driven. It allows hedge-fund managers to classify much of their income as capital gains, which are taxed at a far lower rate than regular income. While cops and schoolteachers face a marginal tax rate of twenty-five per cent, hedge-fund managers like Dalio have for years paid fifteen per cent on the lion’s share of their income.

Some hedge-fund managers, such as Steven A. Cohen, of S.A.C. Capital, and David Einhorn, of Greenlight Capital, are stock pickers, like Jones. Others, such as James Simons, of Renaissance Technologies, are known as “quants.” They use computers to sift through market data, spot profitable opportunities, and place trades, all with minimal human intervention. As a macro trader, Dalio is working in the tradition of George Soros and Julian Robertson, famous speculators who ranged across markets.

Bridgewater has long run two primary investment funds. One, called All Weather, has low charges attached to it and seeks to match the over-all market return, which is known as “beta,” in whichever market the client chooses. Another, Pure Alpha, which has the standard two-and-twenty charges, aims at beating the market return but also at limiting risk. To investment professionals, “alpha” is the return over and above the market return. If in a given year the S. & P. 500 returns fifteen per cent and an equity-fund manager generates a return of twenty per cent, his alpha is five per cent.

Part of Dalio’s innovation has been to build a hedge fund that caters principally to institutional investors rather than to rich individuals. Of the roughly one hundred billion dollars invested in Bridgewater, only a small proportion comes from wealthy families. Almost a third comes from public pension funds, such as the Pennsylvania Public School Employees’ Retirement System; another third comes from corporate pension funds, such as those at Kodak and General Motors; a quarter comes from government-run sovereign wealth funds, such as the Government Investment Corporation of Singapore. “Making money on a constant basis is the holy grail, and Ray and Bridgewater have done that,” Ng Kok-Song, the chief investment officer of the Singapore fund, told me. “They are consistently innovating—constantly soul-searching and asking, ‘Have we got this right?’ ” Kok-Song went on, “I am constantly asking myself, ‘If Bridgewater is doing this, shouldn’t we be doing the same thing?’ ”

At some hedge funds, client service is an afterthought. Bridgewater’s investors receive a daily newsletter, monthly performance updates, quarterly reviews, and conference-call briefings from Dalio and other senior executives. “When a lot of folks were very, very secretive, Ray could see the value in creating something that was more open, something that was attractive to very large streams of money,” Robert Johnson, a former senior executive at Soros Fund Management, who now runs the Institute for New Economic Thinking, said to me.

Recently, the hedge-fund industry has been shaken by allegations that it exploits inside information. In May, Raj Rajaratnam, the founder of the Galleon Group, was convicted on fourteen counts of conspiracy and securities fraud. Other government investigations are continuing, including one involving S.A.C. Capital. Dalio and Bridgewater don’t appear to be involved. Dalio told me that Bridgewater hasn’t received any subpoenas, adding that he had no reason to believe that the firm was under investigation by any official agency.

alio is an outdoorsman and naturalist of the Hemingway school: he likes to go places and kill things. He fishes in Canada, shoots grouse in Scotland, and hunts big game in Africa, with a bow—particularly Cape buffalo, which weigh up to two thousand pounds, are famously ornery, and sometimes gore hunters with their giant horns. Naturally, Dalio sees this as a metaphor for how he invests. “It’s always a matter of controlling risk,” he explained. “Risky things are not in themselves risky if you understand them and control them. If you do it randomly and you are sloppy about it, it can be very risky.” The key to success, he said, is figuring out “Where is the edge? And how do I stay the right distance from the edge?”

One way he does it is by spreading his bets: at any given time, the Pure Alpha fund typically has in place about thirty or forty different trades. “I’m always trying to figure out my probability of knowing,” Dalio said. “Given that I’m never sure, I don’t want to have any concentrated bets.” Such thinking runs counter to the conventional wisdom in the hedge-fund industry, which is that the only way to score big is to bet the house. George Soros famously did this in 1992—selling short some ten billion dollars’ worth of sterling. A few years ago, John Paulson wagered hugely against U.S. mortgage bonds and made several billion dollars.

Dalio is a consistent hitter of singles and doubles—the José Reyes of Wall Street. Among the bets the Pure Alpha fund placed last year were long positions in Treasury bonds, the Japanese yen, and gold, and short positions in the euro and European sovereign debt. A potential problem with this type of global investing is that these days many markets move in the same direction, which makes it hard to achieve real diversification. Bridgewater’s solution is to place a lot of “spread” bets, purchasing one security it considers undervalued and selling short another one it considers overvalued. For example, it might buy platinum and sell silver, or buy a thirty-year U.K. bond and sell a ten-year bond. The returns from spread bets tend to be uncorrelated with the over-all market.

Other hedge funds have tried to mimic Dalio’s approach, which is sometimes referred to as “portable alpha,” but none have proved as successful. The strategy depends on an ability to outperform the market consistently, which many economists regard as virtually impossible. Dalio somehow seems to manage it.

At the start of the year, Bridgewater turned bearish on U.S. bonds and built up a short position. When the bond market stumbled, this bet (which the firm has since reversed) paid off handsomely, as did wagers on commodities and emerging-market currencies. So far in 2011, while the average hedge fund has struggled to make any money at all, the Pure Alpha fund is up more than ten per cent. The bet against Treasuries gave the lie to a criticism sometimes made of Dalio—that he is basically a bond-market investor, who has benefitted from a twenty-year rally in bonds. “We have been equally likely to be short bonds or long bonds,” he said. “The performance of the Pure Alpha fund is not correlated with any asset class or any market. It has done equally well in any environment.”

What accounts for Dalio’s success? His colleague Bob Prince describes him as “a big-picture thinker connected to a street-smart” trader. Many economists start at the top and work down. They look at aggregate statistics—inflation, unemployment, the money supply—and figure out what the numbers mean for particular industries, such as autos or tech. Dalio does things the other way around. In any market that interests him, he identifies the buyers and sellers, estimates how much they are likely to demand and supply, and then looks at whether his findings are already reflected in the market price. If not, there may be money to be made. In the U.S. bond market, Bridgewater scrutinizes the weekly U.S. Treasury auctions to see who is buying—American banks, foreign central banks, mutual funds, pension funds, rival hedge funds—and who isn’t. In the commodities markets, the firm goes through a similar exercise, trying to figure out how much demand is coming from corporations and how much from speculators. “It all comes down to who is going to buy and who is going to sell and for what reasons,” Dalio explained.

To guide its investments, Bridgewater has put together hundreds of “decision rules.” These are the financial analogue of Dalio’s Principles. He used to write them down and keep them in a ring binder. Today, they are encoded in Bridgewater’s computers. Some of these indicators are very general. One of them says that if inflation-adjusted interest rates decline in a given country, its currency is likely to decline. Others are more specific. One says that, over the long run, the price of gold approximates the total amount of money in circulation divided by the size of the gold stock. If the market price of gold moves a long way from this level, it may indicate a buying or selling opportunity.

In any given market, Bridgewater may have a dozen or more different indicators. However, even when most or all of the indicators are pointing in a certain direction, Dalio doesn’t rely solely on software. Unless he and Jensen and Prince agree that a certain trade makes sense, the firm doesn’t make it. While this inevitably introduces an element of human judgment to the investment process, Dalio insists it is still driven by the rules-based framework he has built up over thirty years. “When I’m thinking, ‘What is going on today?,’ I also need to make the connection to ‘How does what is happening today fit into our framework for making this decision?’ ’’ he said. Ultimately, he says, it is the commitment to systematic analysis and systematic investment that distinguishes Bridgewater from other hedge funds. “I hear a lot of people describing what’s happening today without the proper historical context and without the framework of how the machine works,” he says.

n looking at the economy as a whole, Dalio pays particular attention to the amount of credit that banks and other financial institutions are creating, which he regards as a key factor in over-all spending. This may seem like common sense, but until recently many economists and policymakers didn’t pay much heed to the growth of credit, concentrating instead on the amount of actual money in the economy—notes, coins, bank deposits—which is largely determined by the Federal Reserve. In July, 2007, Dalio and a co-author wrote in Bridgewater’s daily newsletter about “crazy lending and leveraging practices,” adding, “We want to avoid or fade this lunacy.” A couple of weeks later, after the subprime-mortgage market froze up, Dalio’s newsletter declared, “This is the financial market unraveling we have been expecting. . . . This will run through the system with the speed of a hurricane.”

Searching for historical precedents, Bridgewater put together detailed histories of previous credit crises, going back to Weimar Germany. The firm’s researchers also went through the public accounts of nearly all the major financial institutions in the world and constructed estimates of how much money they stood to lose from bad debts. The figure they came up with was eight hundred and thirty-nine billion dollars. Armed with this information, Dalio visited the Treasury Department in December, 2007, and met with some of Treasury Secretary Henry Paulson’s staff. Nobody took much notice of what he said, but he went on to the White House, where he presented his numbers to some senior economic staffers. “Ray laid out the argument that the losses he foresaw in the banking system were astronomical,” a former Bush Administration official who attended the White House meeting recalled. “Everybody else was talking about liquidity. Ray was talking about solvency.”

His warnings ignored in Washington, Dalio issued more jeremiads to his clients. “If the economy goes down, it will not be a typical recession,” his newsletter said in January, 2008. Rather, it would be a disaster in which “the financial deleveraging causes a financial crisis that causes an economic crisis. . . . This continues until there is a reflation, a currency devaluation and government guarantees of the efficacy of key financial intermediaries.” As the crisis deepened, Dalio continued to assess it far more accurately than many senior policymakers did. When the government allowed Lehman Brothers to collapse, he despaired. “So, now we sit and wait to see if they have some hidden trick up their sleeves, or if they really are as reckless as they seem,” the newsletter said on September 15, 2008.

Eventually, after the near implosion of the financial system had brought about a deep recession, some policymakers came to respect Dalio’s analysis. “I think the central policy judgment was that there was more risk in doing too little than in doing too much,” Lawrence Summers, who headed the National Economic Council between 2009 and 2010, recalled. “That was a judgment I reached, and it was a judgment Ray reached.” While Summers was in the White House, he read Bridgewater’s economic newsletter and spoke every few months with Dalio, whom he described to me as “an impressively intellectually aggressive guy.” Summers went on, “He had a fully articulated way of looking at the economy. I’m not sure I would agree with all of it, but it seems to have been a very powerful analytical tool through this particular period.”

And a powerful investment tool, too. Anticipating that the Federal Reserve would be forced to print a lot of money to revive the economy, Bridgewater placed a number of bets that would pay off in such a scenario—for instance, going long Treasury bonds, shorting the dollar, and buying gold and other commodities. These trades helped the Pure Alpha fund make money in 2008, but Dalio’s bearishness cost him in 2009. Despite the Fed’s actions and the Obama Administration’s stimulus package, Dalio predicted that the economic recovery would be weak. When growth rebounded faster than he expected and the Dow rose nineteen per cent, the Pure Alpha fund gained just four per cent. But last year, when G.D.P. growth faltered, the fund made a great deal of money betting on Treasury bonds and other securities that tend to do well in a weak economy.

n April, an article in New York ridiculed Dalio’s Principles, saying that they read “as if Ayn Rand and Deepak Chopra had collaborated on a line of fortune cookies.” It also accused him of running Bridgewater like a cult. “I’ve been surprised that there’s been so much controversy about us having such clearly set-out principles, especially since they’re all about being truthful and transparent to do good work and have meaningful relationships,” Dalio wrote to me subsequently. “Most of the people who don’t like us having them haven’t read them—they just assume that us having a lot of principles makes us a cult. That’s O.K. I figure that the people who matter to us will take the time to read them and form their own opinions and those who don’t care enough to read them don’t matter to us.”

Dalio may protest too much. The word “cult” clearly has connotations that don’t apply to an enterprise staffed by highly paid employees who can quit at any moment. But Bridgewater’s headquarters are in the woods, isolated from any other financial institution; Dalio is a strong-willed leader; and the employees do use their own vocabulary—Dalio’s vocabulary. Bob Elliott, a twenty-nine-year-old Harvard graduate who has worked at Bridgewater for six years, told me earnestly, “Once you understand how the machine works, you have the ability to take that and study and apply it across markets.” It’s also the case that in the time I spent at the firm I saw senior people criticizing subordinates—but not the reverse.

In his Principles, Dalio acknowledged that his firm can seem strange to outsiders and newcomers: “Since Bridgewater’s culture is very different from what is typical in the world at large, people often encounter culture shock when they start here.” In part to minimize this shock, for years Bridgewater recruited young men and women straight out of college. (Harvard, Princeton, and Dartmouth were favorite targets.) But the firm’s in-your-face attitude—and the relentless pressure to perform—takes its toll. “We get a lot of people who self-select out of that pretty quickly,” Michael Partington, a recruiter at Bridgewater, said to me. Within two years of arriving at Bridgewater, about a quarter of new hires have quit or been let go.

Bridgewater has been expanding rapidly—it now has more than a thousand people on its payroll—and it has brought in a lot of mid-career executives. One day, I drove to Westport and sat in on a management-committee meeting, which had been set up for the purpose of “getting in synch” with a recent recruit, whom I’ll call Peter and who had come from a big financial firm. All nine members of Bridgewater’s management committee were sitting at a long wooden conference table. Peter, a lean man with fair hair, sat stiffly near the front: he looked like somebody anticipating a root canal. Jensen and McCormick were nominally in charge, but Dalio took over, telling Peter that, during a previous management meeting, he had answered emotionally in response to questioning from Jensen. “This is a common thing when somebody’s getting probed,” Dalio said. “Because the amygdala gets stimulated and you have that emotional reaction.” Peter agreed that he had become upset, especially when he sensed he was being accused of misleading his colleagues. “I felt in some sense my integrity was being attacked,” he said. “That’s when things spiralled out of control.”

Dalio walked to the front of the room, where he wrote on a whiteboard, “FELT,” “INTEGRITY,” and “MISLED.” “?‘Felt’ is the key word here . . . and it’s a challenge for people,” he said. After a bit more discussion, he went on, “What we’re trying to have is a place where there are no ego barriers, no emotional reactions to mistakes. . . . If we could eliminate all those reactions, we’d learn so much faster.” Another member of the committee, Eileen Murray, intervened to say she assumed that Peter had not encountered this type of conversation at his previous job. He confirmed that he hadn’t. Murray nodded sympathetically. “When I first came here, I was like, ‘What the hell is going on?’ ” she said.

Dalio wasn’t finished. He suggested that the problem was that Peter had an idea of how things should be handled, and when the reality turned out to be different he hadn’t been honest with his colleagues. “The issue is that you are not freely releasing those beliefs,” he said to Peter. “Unlike a lot of companies, where you are meant to sit there and be quiet . . . here we respect your notion that you have a point of view. . . . Your responsibility is to say, ‘Does it make sense to me?’ And if it doesn’t make sense don’t keep it bottled up.” Dalio went on, “I’m saying, just let it flow, man.”

Peter said he thought it was understandable that somebody new to the firm would react under stress as he had. Still, he added, “If I had to replay this thing again, I’d be much more open with my thoughts.”

“What would you say the duty of a leader is?” Dalio asked him.

Peter replied, “The duty of a leader, first and foremost, is to be transparent.”

ridgewater’s decision rules surely contribute to his firm’s success. But Dalio also believes that his management principles play a role. “What is a typical organization?” he asked me one day. “A typical organization is one where people are walking around saying, ‘This is stupid, this doesn’t make sense,’ behind each other’s backs.” In support of his management theories, Dalio has an expert witness. “About eighty-five per cent of what’s in the Principles could be documented and supported by research,” Bob Eichinger, an organizational psychologist who has done consulting work for Bridgewater and other large companies, said. Eichinger went on, “Is it a better way to run a company? From a results perspective, probably so. Could a large portion of the working population be comfortable in that environment? Probably not.”

Some senior executives at Bridgewater do relish working there. Eileen Murray, who runs the firm’s accounting and technology systems, is one of them. Before moving to Bridgewater, in 2009, she spent twenty-five years on Wall Street, rising to a senior post at Morgan Stanley. “I wanted to make sure I wasn’t joining some petri dish in Westport, Connecticut, as part of a big experiment,” she said, recalling her initial, lengthy conversations with Dalio. “If someone’s intention is to make me a better person, I really appreciate that. If people do things because they can, or because they are the boss . . . I don’t react to that well.” Murray said she is now reassured, because “the intention is to make people better. . . . I have never seen a C.E.O. spend as much time developing his people as Ray.”

Another new member of Bridgewater’s management committee is James Comey, the firm’s top lawyer, who served as Deputy Attorney General in the Bush Administration between 2003 and 2005. “Most of my friends think I am having a midlife crisis,” Comey told me in a recent phone conversation, referring to his decision, last year, to leave Lockheed Martin and accept an offer from Dalio. He was tired of corporate politics and craved a setting where people spoke truth to power, but, he said, it took him a while to get used to dealing with Dalio. “When Ray sent me an e-mail saying, ‘I think what you said today doesn’t make sense,’ I tended to think, What does he really mean? Where’s he coming from? And what is my play? Who are my allies? All of the things you think about in the outside world. It took me three months to realize that when Ray says, ‘I think you are wrong,’ he really means ‘I think you are wrong.’ He’s not trying to provoke you, or anything else.”

Comey was initially struck by how long it took Bridgewater to make decisions, because of the ceaseless internal debates. “I said, ‘Lordy, we have to put tops on bottoms. Let’s get something done,’ ” Comey recalled. But he added, laughing, “The mind control is working. I’ve come to believe that all the probing actually reduces inefficiencies over the long run, because it prevents bad decisions from being made.” Comey said of Dalio, “He’s tough and he’s demanding and sometimes he talks too much, but, God, is he a smart bastard.”

And yet Dalio’s acuity prompts an awkward question: how much of Bridgewater’s success comes not from the way it is organized, or any notion of “radical transparency,” but from the boss’s raw investment abilities? At other hedge funds, it is taken for granted that the firm’s principal asset walks out the door every evening and settles into a chauffeur-driven car. Is Bridgewater really any different? Although the firm trades in more than a hundred markets, it is widely believed that the great bulk of its profit comes from two areas in which Dalio is an expert: the bond and currency markets of major industrial countries. Unlike some other hedge funds, Bridgewater has never made much money in the U.S. stock market, an area where Dalio has less experience. “Bridgewater really is Ray,” one former employee told me. “The key decisions they have made—where they have really made their money—is Ray. Most of what really matters is Ray, with help from Greg and Bob. You could run the firm with forty or fifty people instead of a thousand, and it would be basically the same.”

As long as Dalio remains healthy, the fact that he plays a key role in directing Bridgewater’s investments isn’t an issue. (Based on past experience, it is a big advantage.) But, from a business and marketing perspective, the suggestion that Bridgewater’s success continues to hinge on Dalio is a problematic one. As the former employee explained, “It’s hard to market that model—one guy and his brilliant track record. If you want to sell your firm to institutional clients, it’s critical to appear to be ‘rule-driven.’ That takes a lot of smarts. Most people want to take the credit. To say ‘I just run this machine’ detracts from your own individual brilliance. But that is very smart business.”

alio contests this account. He insists that he is but one member of a large team, with Greg Jensen and Bob Prince acting as his co-chief investment officers. He compares the comments of former employees to the carping of ex-spouses. In fact, with the firm prospering, Dalio has been living up to a promise to spend a bit more time away from it, and he has ceded some day-to-day management responsibility to Jensen and McCormick. “I’m stepping back a little: I’m going to a minister/mentor role,” Dalio said, comparing himself to Lee Kuan Yew, the longtime Prime Minister of Singapore, who relinquished his post in 1990 but even today retains great influence. This month, Dalio is formally giving up his co-C.E.O. title in favor of “Mentor.”

The managerial changes and Dalio’s lean appearance have ignited some speculation that he is sick, but he insisted to me that he is fine. He said his weight loss was the result of an “intended weight-loss program,” and he said he has absolutely no intention of giving up his role in directing Bridgewater’s investments. In stepping back from day-to-day management and in bringing in senior people, he said he is seeking to preserve the essence of the firm he built while preparing it for his eventual departure. Bridgewater has grown so large that its two main funds are now closed to new investors. Recently it launched a third fund, which is called Pure Alpha Major Markets.

Last year, Dalio sold about twenty per cent of Bridgewater to some of its employees in a deal financed by several of the firm’s longtime clients, and he told me that ultimately he would like to sell his entire ownership stake to his colleagues. Unlike certain other hedge-fund managers, though, he has no interest in making another fortune by floating his firm on the stock market. “I don’t want Bridgewater to go public or have it controlled by anybody outside the firm,” he said. “I think people who do that tend to mess up the firm.”

Dalio insists that money has never been his main motivation. He lives well, but avoids the conspicuous consumption that some of his rivals indulge in. He and his wife, Barbara, to whom he has been married for thirty-four years, own two houses, one in Greenwich, Connecticut, and one in Greenwich Village, which he sometimes uses on weekends. (They are currently building a new house on the water in Connecticut.) Apart from hunting and exploring remote areas, Dalio’s main hobby is music: jazz, blues, and rock and roll. Recently, he joined a philanthropic campaign started by Bill Gates and Warren Buffett, pledging to give away at least half of his money. (Forbes estimates his net worth at six billion dollars.) He and his wife wrote in a public letter, “We learned that beyond having enough money to help secure the basics—quality relationships, health, stimulating ideas, etc.—having more money, while nice, wasn’t all that important.”

ot that Dalio makes any apology for his fortune or his profession. An agnostic and a self-described “hyperrealist,” he regards it as self-evident that all social systems obey nature’s laws, and that individual participants get rewarded or punished according to how far they operate in harmony with those laws. He views the financial markets as simply another social system, which determines payoffs and punishments in a like manner. “You have to be accurate,” he says. “Otherwise, you are going to pay. Alpha is zero sum. In order to earn more than the market return, you have to take money from somebody else.”

Dalio is right, but somewhat self-serving. If hedge-fund managers are playing a zero-sum game, what is their social utility? And if, as many critics contend, there isn’t any, how can they justify their vast remuneration? When I put these questions to Dalio, he insisted that, through pension funds, Bridgewater’s investors include teachers and other public-sector workers, and that the firm created more value for its clients last year than Amazon, eBay, and Yahoo combined. However, it is one thing to say that the most successful hedge-fund managers earn the riches they reap. It is quite another to suggest that the entire industry serves a social purpose. But that is Dalio’s contention. “In aggregate, it really contributes a lot to the efficiency of capital allocation, and capital allocation is very important,” he said.

Like many successful financiers, Dalio justifies capitalism and his place in it as a Darwinian process, in which the over-all logic of the system is sometimes hidden. This is actually what the mention, in his Principles, of hyenas savaging a wildebeest was about. “Is this good or bad?” he wrote. Like “death itself, this behavior is integral to the enormously complex and efficient system that has worked for as long as there has been life.” Of course, this view conveniently ignores the argument that hedge funds, through their herd behavior, have contributed to speculative bubbles, in tech stocks, oil, and other commodities. Even some defenders of the industry concede that the problem is real and potentially calamitous. “There is a basis for the argument that hedge funds add economic value,” Andrew Lo, an economist at M.I.T. who runs his own hedge fund, says. “At the same time, they create systemic risks that have to be weighed against those positives.”

Because hedge funds use a lot of borrowed money to magnify their bets, they are subject to rapid reversals: the history of the industry is littered with blowups. This wouldn’t matter much if other parts of the economy weren’t affected by the actions of hedge funds, but sometimes they are. In 2008, hedge funds had hundreds of billions of dollars on deposit at investment banks, which acted as their brokers and counterparties on many trades. When the Wall Street firms got into trouble, a number of other hedge funds demanded their money back immediately. These demands amounted to a virtual run on the banks and helped to bring down Bear Stearns and Lehman Brothers. Dalio acknowledged to me that Bridgewater was one of the funds that pulled a lot of money out of Lehman and other Wall Street firms, but he said he had little choice. “I’m a fiduciary to my clients. My responsibility is to know where it’s risky and where it’s not risky, and to get out of the risks.”

Hedge funds have also contributed to the radical increase in income inequality. Fifteen years ago on Wall Street, remuneration packages of five or ten million dollars a year were rare. Today, C.E.O.s and star traders routinely demand vastly higher sums to keep up with their counterparts at hedge funds. In addition to distorting salary structures elsewhere, the rewards that hedge-fund managers reap draw some of the very brightest science and mathematics graduates to the industry. Can it really be in America’s interest to have so much of its young talent playing a zero-sum game?

Rather than confronting these issues, Dalio, like all successful predators, is concentrating on the business at hand—the markets and the global economic outlook. This spring, he told me that economic growth in the United States and Europe was set to slow again. This was partly because some emergency policy measures, such as the Obama Administration’s stimulus package, would soon come to an end; partly because of the chronic indebtedness that continues to weigh on these regions; and partly because China and other developing countries would be forced to take drastic policy actions to bring down inflation. Now that the slowdown appears to have arrived, Dalio thinks it will be prolonged. “We are still in a deleveraging period,” he said. “We will be in a deleveraging period for ten years or more.”

Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets. “There hasn’t been a case in history where they haven’t eventually printed money and devalued their currency,” he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don’t have the option of printing money and are destined to undergo “classic depressions,” Dalio said. The recent deal to avoid an immediate debt default by Greece didn’t alter his pessimistic view. “People concentrate on the particular thing of the moment, and they forget the larger underlying forces,” he said. “That’s what got us into the debt crisis. It’s just today, today.”

Dalio’s assessment sounded alarmingly plausible. But when one plays the global financial markets a thorough economic analysis is only the first stage of the game. At least as important is getting the timing right. I asked Dalio when all this would start to come together. “I think late 2012 or early 2013 is going to be another very difficult period,” he said. ♦