I’ve been thinking a lot lately about the smartphone space.  It’s the most exciting space in tech today, and there are fantastic combinations of technology, brand and personalities.  Add to that the massive value of this market and you have a mega-spectacle.

RIM was not too long ago the undisputed leader in the smartphone market.  It was omnipresent in business and on prime-time TV and movies.  We even saw as recently as 2008 the newly elected President of the United States pushing very hard to keep his BlackBerry.  Epic stuff.

But much has changed.  The iPhone really did change everything.  This isn’t marketing hype, although I’m sure many at RIM point to Apple’s excellence at marketing as the reason for their current challenges.  But that is selling Apple short.  Apple really focused on the smartphone ecosystem, and the end-user experience.  Historically, they have been absolute leaders in user experience.  “Insanely great” would be a lame marketing gimmick if it were not backed by ground breaking product innovation.

The smartphone ecosystem is defined by the handset, the OS, the development environment and the online store.  Apple’s approach, which has once again recently been attacked by RIM, is the highly-controlled ‘Walled Garden’.  As long as you live inside the walls, life is good.  If the walls are too close together, then we revolt.  If we barely perceive there being walls, then we exult.

The iPhone hardware is clearly obsessed over by Apple inside and out.  But the primary criticism of the iPhone is the quality of the pure phone features.  The iPhone 4 is reportedly dropping more calls than the iPhone 3G/3GS.  The talents of the RIM RF engineers appears to be measurably better than those at Apple.  When RIM was a young company, they recognized the critical importance of battery and packet efficiency, and have excelled in this regard to this day.

The battle between iPhone and BlackBerry has been tough, but the entry of Google and Android to this war has had a striking impact.  Android is growing in the market faster than iPhone or BlackBerry.  Google’s strategy of being the OS-dealer and delivering a vast platform of capabilities in a modern operating system to a large population of mobile handset providers is working.  The iPhone (and the BlackBerry) are high-end, expensive devices.  The Android ecosystem has a broad range of handsets that reach across the spectrum of budgets.

Google is a disruptive entrant into the smartphone market.  Their end game is fundamentally different, and unique to every other participant.  They don’t want to sell hardware.  They don’t want to sell minutes, or bytes.  They want traffic, in the form of search.  Things like “what’s near me?” and “where is?” compliment the traditional “google search” traffic that Google has monetized spectacularly.

You could form a reasonable argument that eventually, the only profitable segment left in the smartphone market is the monetization of traffic.  And that’s exactly where Google lives today, and is betting huge for tomorrow.

So, what would I do if I was Mike Lazaridis for a day (or perhaps a month, because these things take time)?

I would:

1) Immediately adopt Android as the operating system for the BlackBerry family of products

2) Port the BES and handset messaging (email, BBM etc) capabilities to Android, and make those available, as premium/only available on BlackBerry hardware features

3)  Stop all work on PlayBook

Pretty radical?  Well, not really.

1) Adopting Android accomplishes 2 major objectives.  The first is eliminating a significant competitive threat.  Fighting a war on 2 fronts doesn’t end well.  See the Wikipedia entry on Germany/World War II.  RIM is great at several things, but the operating system is not one of them.  The QNX acquisition could have been useful had it been done 5+ years ago and leveraged on the BlackBerry.  Introducing a new operating system is going to be disruptive to the BlackBerry developers inside and outside the company.  Third party developers will have to choose.  They don’t have infinite amounts of time, money and patience, so they pick the platforms that deliver the greatest returns.  Ease of use, and economics run this machine.  BlackBerry is losing on both points here.  And a complete reset isn’t a nice thing to do to your friends.

The second major objective achieved by adopting Android is instant application (and thus developer) presence.  When I picked up a new BlackBerry last year, and couldn’t find the App World on it, I was mortified.  How the hell can you compete when you don’t even put the app store on the device?  RIM realized very late the importance of the 3rd party developer, and the intrinsic value users place on finding and buying fun new applications.  Using Android is instant street cred with a large and growing population of developers, and is a foundation to build great hardware under.

2) When you think about what RIM is really great at, 2 things come to mind.  Fantastic hardware with keyboards that are brilliant to type on, and unparalleled messaging.  Those things built RIM into the super-success story it is today.  The “CrackBerry” was/is all about messaging.  I’ve perceived what could be considered as annoyance that things like web browsing, rich media, and 3rd party application support were required to participate.  RIM has not lead in this areas, it has lagged dangerously.

If we go back to first principles, and the core IP the company was built upon, we see an enduring value, and significant differentiator across every other participant in the market.  Take their excellence in messaging, and bring it into Android as a “BlackBerry-only” capability.  You want to differentiate your Motorola or HTC Android phone with the BlackBerry?  Oh, yeah, you have BlackBerry capability on top of Android.  That will close deals. And having Google as a partner is a pretty potent combination.

3) The PlayBook was announced very early, and upon reflection, awkwardly.  I love the vision, and think the capabilities described are compelling.  But I don’t understand who really wants it, and it this has nothing to do with RIM’s core competency.  They are not a consumer electronics company.  And they’re entering a market that will quickly be saturated with major consumer electronics players.  And a huge number of them will be running…you guessed it, Android.  RIM is a large enterprise, but it’s not so large that they can afford to deflect the best and brightest resources off to this new venture.  The PlayBook will have Flash.  That’s great, but Android also has Flash.  So much for that as a differentiator.  If RIM adopted Android, then maybe there’s a play for an Enterprise tablet, but I’d still think very carefully about that before taking any of my ‘A’ players off of BlackBerry roadmap work.

Don’t make the already overburdened and loyal BlackBerry developers have to build or port his apps to another hardware form factor and operating system.  Show the developers some love, and they will repay you by making your platform do things you never imagined it could or would.  But you have to see them as valuable as your own developers, not as a remote contingent that will be happy with whatever you give them.

I can’t sing the praises of Android without voicing a major concern I have with it.  The complete punting by Google on the quality, and most importantly, the security of Google Android Marketplace applications is a massive timebomb that will eventually go off.  Apple has taken plenty of stick for being slow, onerous and at times obstinant  about what Apps they approve for their App Store.  But Google has taken a ‘the community will decide’ approach.  That may work at the macro level, but would you like to be one of the first few hundred consumers to mistakenly downloaded a fake Citibank Home Banking application?  I wouldn’t.

One other thing.  That company in Redmond.  They should have bought RIM a while ago.  It’s cheaper now, and maybe they still should.  I think that would be a shame for RIM, and a smart move for Microsoft.  They are in a much worse position in the smartphone market.  RIM has great IP that fits like a glove in the Exchange/Enterprise ecosystem, and would give Microsoft a desperately needed leap-ahead in the market.

But if RIM gets the next few moves right, they can reclaim their position at or near the top of the heap.

I’m never going to be “Mike for a day”, and I’m cheering for RIM.  They’ve been a source of local and national pride for years, and I have lots of smart friends working there.  On a recent flight to Montreal, I met a businessman from New Zealand and when I introduced myself I said “I’m from Waterloo, where the BlackBerry was invented”.  I have the privilege of being able to speak to lots of smart people everywhere about this space.  And after lots of discussion and lots of thoughts, these are the conclusions I’ve reached.

So that’s what I would do.  What would you do?



Today, after months of broad anticipation, RIM announced its entry into the hot tablet market.  The device, called PlayBook, was announced at the BlackBerry Developer Conference in San Francisco. I watched the live Webcast as President and Co-CEO Mike Lazaridis made the big announcement.

BlackBerry PlayBook

First, let’s review the basic feature set:

  • 7-inch LCD, 1024 x 600, WSVGA, capacitive touch screen with full multi-touch and gesture support
  • BlackBerry Tablet OS with support for symmetric multiprocessing
  • 1 GHz dual-core processor
  • 1 GB RAM
  • Dual HD cameras (3 MP front facing, 5 MP rear facing), supports 1080p HD video recording
  • Video playback: 1080p HD Video, H.264, MPEG, DivX, WMV
  • Audio playback: MP3, AAC, WMA
  • HDMI video output
  • Wi-Fi – 802.11 a/b/g/n
  • Bluetooth 2.1 + EDR
  • Connectors: microHDMI, microUSB, charging contacts
  • Open, flexible application platform with support for WebKit/HTML-5, Adobe Flash Player 10.1, Adobe Mobile AIR, Adobe Reader, POSIX, OpenGL, Java
  • Ultra thin and portable:
  • Measures 5.1″x7.6″x0.4″ (130mm x 193mm x 10mm)
  • Weighs less than a pound (approximately 0.9 lb or 400g)
  • RIM intends to also offer 3G and 4G models in the future.

The heart of the device is the ARM Cortex-A9 Processor, which I discovered to be the same family of processor that is in the heart of the iPad (and iPhone 4) A4 chip.  One of the most interesting capabilities of Apple’s A4 is its incredibly frugal use of battery power.  There has not been any mention by RIM of the expected battery life of the PlayBook, so hopefully they have good things to say here.

The PlayBook is smaller than most other tablets.  I’m not sure if this is good or bad.  With content consumption devices, I generally think larger is better – to a point.  I think the iPad is about as large as I’d want to go, and it’s a bit heavier than I’d like.  It’s interesting that RIM has gone smaller.  The device is still too big to fit in your pocket, so it’s not clear to me what the benefit is to this different form factor.

The video capabilities in the PlayBook are impressive.  Two HD cameras (one forward and one rear-facing) should enable high quality video chat capability.  Being able to drive full 1080P HD video through the HDMI port is very impressive.  During his keynote, Lazaridis stated you could drive 1080P out the HDMI port while watching different HD video on screen.  That’s pushing a lot of data for a tablet.  If you’re plugging your PlayBook into an HD monitor, then it’s likely you are able to plug it in to a power supply, so battery life isn’t an issue.  But I wonder what the battery life is like while watching a streamed 1080P movie.

The ability to use the PlayBook to connect to the Internet is provided through WiFi (802.11 a/b/g/n) as well as secure Bluetooth.  The latter mode utilizes the BlackBerry you’re assumed to have, which essentially lets your PlayBook tether to the Internet through your BlackBerry.  When you connect using your BlackBerry, you’re basking in the safe environment provided via your BES server.

I believe you should be able to tether a PlayBook to any smartphone, including an iPhone.  I use my WiFi-only iPad in the wild by tethering it to my iPhone.  Of course, we all have to be careful how much data we pull down on these devices, lest we get a very nasty surprise in our monthly mobile bill.

The specs state that the PlayBook has 1GB of RAM.  There’s no mention of additional flash memory.  If the OS (with all the wonderful multimedia capabilities and apps) as well as the 3rd party apps and user content (movies, music) all have to live in 1GB, then things are going to get pretty crowded.  The iPad ships with 32GB and 64GB of flash.

There is also no mention of GPS capabilities in the PlayBook.  Perhaps it’s expected that your location will be delivered through your tethered BlackBerry.  But what happens when I’m sitting on the couch at home using WiFi and want to use location services to find out what movies are playing nearby?

One of the significant differentiators to the iPad (but not the Android-based tablet world) is the PlayBook’s full support of Adobe’s Flash.  I find myself of two minds about Flash.  When I surf with my iPad, the lack of Flash is often frustrating.  However, the #1 reason I have to kill and restart my Safari browser is because of a Flash-related problem.  Flash is fat, and lazy.  But it’s everywhere, and the HTML5 transition won’t completely replace it.  You absolutely notice it when it’s missing.

It will be interesting to see how RIM positions this Flash superiority relative to Apple.  Adobe is obviously a potentially strong partner for RIM in this market.  In typical Canadian fashion however, RIM described this benefit as being a “full web experience” instead of making more direct contrasts to the competition.

I’m most interested in the new operating system.  For years, I’ve heard, and to a limited extent experienced myself, the challenges of doing development for the BlackBerry.  There are a multitude of hardware devices to support.  Some are full keyboard, others not. Some are touchscreen, others not.  There are different screen sizes and resolutions.  And there are different OS versions to support across the handsets.  This makes life complicated for a developer who just wants to get his app widely deployed.

Say what you will about the Apple “Walled Garden”, but they have made life pretty damned easy for a developer.  There is the iPhone.  When Apple improves it, they do the heavy lifting for the developers by ensuring the ‘legacy’ apps run without modification on the new OS and hardware.  They don’t have the diverse user interface choices that BlackBerry developers face.  It’s just easier.  I think this focus on making the environment ‘easy’ has been instrumental in the massive adoption Apple gained upon the release of the first iPhone.

Now faithful BlackBerry developers have a new toy to play with.  And not just the hardware is different.  Short on the heels of launching BlackBerry OS6, the PlayBook is announced with a POSIX-compliant Unix-like operating system called QNX.  If you know what QNX is, then you’ll probably be impressed.  I am.  I like this OS, and just wish it was a choice RIM made in the 90s.  So what do you do if you want to have your BlackBerry “SuperApp” run on the PlayBook?  Well, I’m not sure because that hasn’t been disclosed.  Perhaps they’re discussing this at the Developer Conference this week.

The choices, as I see them are:

  1. Too bad, you need to re-write your application from scratch.
  2. Sorry, you need to make some changes, but it won’t be too onerous.
  3. The PlayBook has emulation that fully supports legacy BlackBerry Apps. It just works.

Clearly, applications work best when they’re designed to exploit the best capabilities of the platform. This is what we’re seeing in the iPad/iPhone ecosystem.  Apple has put significant effort into making sure most iPhone apps will run on the iPad, albeit with some UI compromises.

The next 12 months are going to be pretty exciting ones for those who follow the Smartphone and Tablet markets.  There is great focus and effort being invested by Apple, RIM, Google, HTC, Nokia, Motorola, Samsung and others.  I’m excluding Microsoft, because in the Mobile world, I consider them to be Bruce Willis’ character in The Sixth Sense.  You know, the one who goes through 99% of the movie not knowing he’s dead.

The result will most certainly be great advancements that will benefit all consumers.  But not everyone is going to come out of this battle as healthy as they entered it.

If the PlayBook helps to make the BlackBerry ecosystem more successful and sustainable, then I think it’s a fantastic move.  But I’m concerned about how this will play out given the challenges facing BlackBerry developers today.  If widening RIM’s focus to the tablet puts the core BlackBerry platform at increased risk, then it’s a dangerous distraction.

Embracing the Web Development model and making BlackBerry and PlayBook development less proprietary is a fantastic move.  Give developers access to the platform capabilities through APIs, and let them build Web Apps on top of them.  I’d like nothing better than to write my app once, and have it run on Android, iPhone and BlackBerry.

RIM has declared the PlayBook is the “BlackBerry Amplified”.  That’s a compelling vision, and there is much to celebrate.  But amplifiers have the ability to increase both the good and the bad in a signal.  I’m sure there are lots of smart people working in Waterloo to eliminate as much noise in that signal as possible.

It’s going to be very exciting to see how this all plays out.


I enjoy the dabbling that I do with my little blog.  But, whenever the topic of blogging comes up at work or in a social situation, I have a bit of an awkward feeling.  It’s not that I’m ashamed of blogging, far from it in fact.  But I realize just how great some blogs (and bloggers) are, and how much time, talent and effort it takes to create a truly engaging and influential blog.  These are not easy attributes to achieve, especially given the sheer volume of topics and participants in the blogosphere.

But today I discovered how easy it has become to start looking for great blogs authored by ‘thought leaders’, influencers and witty people across the globe.

PostRank, a wonderfully creative company based in Waterloo, Ontario has posted their “Top Blogs of 2009“.  I don’t know about you, but I found it very difficult to find great blog content.  Doing a Google search doesn’t get you very far.  I primarily used recommendations from people I trust.  But I was sure I was missing out on a lot of insightful writing.

So now, thanks to PostRank, I no longer waste time hunting, I use my precious time much more productively by seeking out “the best” in any subject that interests me.

The more I learned about the Kung Fu behind the PostRank approach, the more impressed I became, and the more confidence I had that this was based on real science and large volumes of user data.

PostRank has identified 3 awards for blogs in each of the almost 500 blog topics:

Engagement is a measure of the amount of intention or interest a specific blog attracts.  I think of it simply as analogous to a Twitter user who is frequently Re-Tweeted. PostRank extends this concept quite broadly and tracks billions of “Engagement Events” by analyzing 19 different social networks for users taking actions on blog posts.

Influence is measured by determining the average number of Engagement Events per post for a blog, and the Movers & Shakers are those blogs who have achieved a huge growth in attention.  If you’re a consistently referenced blogger, your Influence will be high.

It’s fun to see what comes up for topics you enter at http://www.postrank.com.  You can also surf around the topics alphabetically.  After a few minutes, I’d found some interesting new blogs.  Here’s some of the wonderful nuggets I found:

The “Best Bacon Blog” is Mr Baconpants. Yes, that’s right.  There are several bacon-oriented blogs, and the current leader in this very tasty category is Mr. BaconPants.  But you should be aware that this is a tightly contested battle, and current 2nd place blog BaconGeek was the #1 bacon blog on the planet last week. I’m getting hungry.

After checking that my tinfoil hat was affixed firmly to my head, I checked out the “Conspiracy Theory” topic.  To my surprise, the winner was InfoWars and surprisingly not FoxNews.  That brings up a question.  Should I look for the best Glenn Beck blog under “Nut Job”, “Weasel” or “Tea-bagger”?

Despite my best intentions, I cannot help myself when it comes to Geek and Gadget sites.  I was certainly familiar with the Gadget site winner: Engadget.  But the Top Geek blog was a new one to me, and one I’m going to spend some time reading.  It’s called io9.  I just saw a post there titled “Engineering the Perfect Racecar – At Nano Scale“.  Win! Thank you, PostRank!

There’s also a lot you can learn from PostRank about how engaging a blog has been over time, as well as where the reader engagement is coming from.  Clearly, Twitter is a very powerful means to tell the online world that you think something is interesting.  Here’s a screenshot of the analytics for one of my favourite destinations, Slashdot.

Blogs can be a wonderful source of opinion, advice, know-how and humor.  But the good ones used to be hard to find.  The smart folks at PostRank have found a way to leverage our collective actions to magically help each other recommend great blogs.  I think this is significant.  The Internet is getting constantly bigger, and the good sites are getting harder to find.

The only problem I now have is that I’m now faced with proof that my little blog isn’t influential or engaging.  I guess I better work on that!


I approached my first trip to CES with many of the same feelings I had when I made my first pilgrimage to Comdex in the ’90s.  Excited for the new things I would see, anxious about the size of the crowds, and concerned for my feet.

CES Opens

It’s always refreshing to get out of Waterloo, where our concentration in Tech Companies is mistaken by some as a form of destiny, and that our leadership in any particular area of technology is secure.  I most often get that sense from people who don’t spend much time in Silicon Valley or other hotbeds of innovation.  Things move very fast, especially in developing markets.  It is with this sense of inquisitiveness I set out to experience the latest breakthroughs in the vast world of Consumer Electronics.

Getting to the show from my hotel was very easy.  The monorail is a cheap and comfortable way to get to and from CES, as long as you try to avoid the peak times.  I left early, so I could avoid the rush and get the floor maps to each hall.  I like to plan my itinerary around specific companies or industries.  It’s a foregone conclusion that you can’t spend lots of time at everything.  There were over 2500 exhibitors, which was down from 2700 in 2009.  With 1 day to go, there were 113k attendees.

As a side note, I think over 200 of these 2500 exhibitors were purveyors of BlackBerry and iPhone covers.  You name a theme, colour, texture or material, and somebody has a case for you.  I did wonder how many cases these companies needed to sell to justify the costs of CES.  Anyhow…

With my South Hall 1&2 map in hand, I set out to see the wonders that lay before me.  The first interesting technology I saw was a home security product.  It was called “Control4” and uses various touch-screen remote and tablet-like devices to control and monitor your home.  You could also access the system through your computer/iPhone (I assume remotely but this wasn’t mentioned).  There are some real conveniences in a system like this.  The gent demonstrating the system pointed to the logging and reporting that enables a parent to tell when their son actually got home.  Did he make curfew?  Hmmm, not sure that pitch worked with me.  I’ll be waiting up for my kids.  One other odd issue was the physical door locked.  I asked him “how is it powered?”.  The whole system works wirelessly, and the doors lock/unlock upon command through the console, or by entering the code on the keypad.  The locks have AA batteries inside.  So, I wonder what happens when your batteries die, and you don’t have your keys on you?  Hopefully there’s an alert on the system that warns you that you’re about to be locked out of your house.

I next found my way through lots of not-so-interesting cable and component vendors.  I was starting to become concerned.  Where were the cool technology booths?  But fortunately, there were some sites to behold in some booths.  I snapped a few pictures as proof.

I met up with my colleagues mid-afternoon, and we decided to grab some refreshments and head back to the hotel.  All in all, day 1 was a bit of a let-down to be honest.  But the best was yet to come.

Day 2 I set out first for the Central Halls.  This is where the large Consumer Electronics companies had their booths.  Well, actually calling these booths is like calling Buckingham Palace a cottage.  They were immense, and beautifully constructed.  I began to see what I had heard was going to be the “big thing” from CES 2010: 3DHD.

But before I got there, I wandered past the Intel booth, where they were showcasing lots of processor technology.  They had a very cool touchscreen cube that was showing small thumbnails of pictures of CES people had uploaded to Flickr.  When you touched a particular thumbnail, the image expanded.  It was all moving like a wavy stream of thumbnails.  It was just a showcase of something cool, not tied to any particular Intel technology.

Next I strolled past the Microsoft Pavilion.  I found it foreign and uncomfortable because I really don’t use Microsoft for much anymore.  They’re clearly still a huge market force, but their technology doesn’t have near the effect it did 5 years ago.  I did take note of their “Microsoft Auto” display.  [Insert your own car-reboot, crash, <ctrl><alt><delete> joke here]

I then approached the first of the CE giants: LG.  Their plasma and LCD TV offerings were huge.  And the panoramic display they made out of over 100 TVswas quitespectacular.  Their 3D HD presentation was quite impressive.  I should mention a few basics about 3DHD.  Most require the use of special glasses.  This does pose a challenge to consumers who wear glasses when they watch TV.  So far, it appears that each TV manufacturer has their own spec and design for the glasses, and that they are selling the TVs with only 1 set of glasses.  I heard a Panasonic rep say something about it “making sense for the single guy who likes to watch sports”. Uhm, that perhaps works better for the “single guy who has no friends”.  I think there’s a standards opportunity here, and I think it would behoove the entire industry to standardize the technology so that the glasses can be innovated and segmented by 3rd parties.  If I have to bring my glasses to a friends house to watch the Superbowl in 3DHD, I don’t want to have to worry that he’s a Sony guy and I’m a Panasonic.  I didn’t see any pricing announced, and when I asked was told that pricing isn’t available.  I’d guess that these should be priced similarly to top of the line HD Plasmas, with a small premium.  One area of innovation that I wasn’t impressed with was the IP TV features.  I don’t want my TV manufacturer putting YouTube and other browser capabilities in my TV.  They won’t be done as well as 3rd party media devices (Boxee, WD HD TV Live etc), and they just raise the cost to develop and manufacture TVs.  Stick to what you’re good at, and leave those other things to companies that have competencies in things that bring out the best in your TV.

There isn’t a lot of 3DHD content right now, but it’s starting to come.  Panasonic was demonstrating 3D Blu-Ray as well as DirecTV’s 3DHD channel.  I feel like I’ve already seen Avatar because it was playing everywhere in 3D.  I tried on glasses from several manufacturers and there wasn’t much difference IMHO.  They all felt about the same.  I think the quality of the 3D experience is affected by the size of the screen.  The larger, the better.

The Panasonic 152″ Plasma is a great example of this: I saw a Boxee Box and met with Avner Ronen, the Boxee founder.  And I spent some time checking out the various Android-based phones, including one called the vPhone that supports 2 way video conferencing.  The smartphone market is going to be a very exciting one to watch in the next year.  With BlackBerry in a battle with iPhone and Android attacking both from the lower-end of the market, there will be lots of drama here.  Of course, the hottest spot at CES for me this year was seeing Maria Bartiromo aka the “Money Honey”.  She was broadcasting live from the floor of CES for CNBC.  It was interesting to see the behind-the-scenes work that goes on just prior to going live.

I also spent some time at the Sony booth. I was very happy to learn that the driving simulator Gran Turismo 5 is going to launch in Japan in April.  This is a spectacular simulator for the PS3.  They had it running in a demo racing station, and I took my turn at the wheel of a beautiful new Ferrari 458 Italia.  Mamma Mia!  There was lots of interesting stuff there, but nothing that had me in awe.  Perhaps that’s just a sign of how high expectations are set now for Consumer Electronics innovations.  We’re all spoiled to a certain extent, by the wonders the bright minds across the globe have brought into our homes.  I’m considering this CES an incremental evolution of existing technology.

I haven’t decided whether I want to go back next year or not.  Perhaps someone is working on something that will blow my socks off in 2011 or 2012.  And maybe that someone is working right next door to me in Waterloo.  Who knows?

BTW, to see more of my CES 2010 pix, please visit: http://www.flickr.com/photos/ph-stop/sets/72157623065655279/show/


I’m sitting nearby Gate B11 at McCarran International Airport in Las Vegas.  I’ve had a great day, and enjoyed a wonderful steak dinner with some genuinely interesting lads.  But once again, I’ve observed some bizarre happenings at the airport.

First, a confession.  I know what happens in Vegas is supposed to stay in Vegas, but this is wearing heavily on me:  I didn’t gamble at all, and I’m up 1 beer thanks to the nice young cocktail waitress who brought me a beer, at no charge, as I was watching the Leafs & Raptors play (I did tip her though).  Ok, that’s off my chest.

So, back to Airport Sekuritee.

As you may recall from my previous post, the spectacle that US-bound travellers go through when flying out of Canada is something to behold.  Utterly bereft of logic, and full of drama and exciting visuals.  But let’s step back a second and look at the basic mechanics of the transaction:

  1. A Canadian Airliner
  2. A mix of Canadian and American passengers
  3. A flight between Toronto and Las Vegas

Now you could argue that the To/From is relevant, but I’d argue that the value of a plane to a terrorist is not based on the direction it’s nose is pointing.  So I believe these assets are of similar value.

Do you think these similar assets are provided with equal protection?  Well, after tonight, I can confidently say that only really stupid, inattentive terrorists would attack a US bound plane.  Instead, wait for the return flight.  You can get to the airport much later, enjoy another Vegas show, and have a couple more cocktails.  Why go through the drama, delay and risk that some fellow passenger will go postal and beat you to ‘heaven’.

So now the details.

The check-in process was very, very long.  I waited over an hour just to get my boarding pass.  This was not however due to increased security.  It can only be attributed to WestJet having ‘a bad day’.  I’ll be charitable, since I’ve only ever heard good things about them.  Perhaps they just hired a new executive from Air Canada. Or maybe everyone was out late at the Penn and Teller show last night.  In any event, I was starting to fear for my departure time.

Off to the security check-point.

Well, it was no different from the hundreds of other ones I’ve been through post-911 and pre-undie-bomber.  Well, one difference.  The TSA agent who screened my boarding pass and passport prior to admitting me to the x-ray/magnetometer made a little scribble instead of a letter.  Apparently my last rant on cryptographically secure symbols to ensure nobody ‘black-pens an X’ has had an effect.

Off with my shoes, out with the MacBook, jacket and sweater in a box and off we go.  No beeps through the magnetometer and I’m now bracing myself for the Broadway Proctological Exam.  But what to my wondering eyes should appear, but an empty hallway.

No more checks.  No groping, no fondling, no tearing everything out of my backpack.  Just plain old ‘what we did before’.

Not having the ability to inquire about this process (without introducing the inevitable ‘why do you want to know, and drop your pants’ reaction), I’m left to try and figure out what can explain this big difference between the Vegas outbound, and Vegas inbound security.

Here’s some initial thoughts:

  1. Any terrorist who spent a few days in Vegas would have ‘gone native’.  There’s no way he’d blow up himself and an aircraft that brings people to this city.  Vegas would turn him.  Especially given what these twisted guys are promised.
  2. Canada has over-reacted, and wants to make sure it looks like it’s doing ‘important things’ to improve security for US travel
  3. The fax machine at the TSA office in Vegas is out paper, and Outlook put the ‘Important Undie-Bomber Script Changes’ email in the Junk folder
  4. It’s what we would call a ‘continuity problem’ if this were a movie or TV show (you know, when in one scene the male lead is holding a full beer in his left hand, then magically, it’s half empty and in his right hand)
  5. Stephen Harper prorogued inbound security
  6. This approach to security doesn’t work, and even Vegas has called bullshit on this horrid show.  And remember, they had Celine Dion for over a year.  And Carrot Top.

I am certainly not arguing that what is being done in Toronto is ‘Best in Class’ and should be replicated in Las Vegas.  Quite the opposite.  But the fact that the system is self-contradicting should be analysed.  Am I less safe flying to Toronto than I was flying to Las Vegas?  No.  Am I less annoyed and delayed? Yes.

I will also point out that a man in his 60’s left 2 bags in line for about 10 minutes.  People kept walking around them.  I approached them and asked the people in front of me if they knew who’s bags these were.  Nobody knew.  I kept asking down the line until somebody said ‘some old guy’.  Now, those bags were almost certainly not a real threat, but they were much more of a real threat than everything the rest of the passengers on my flight presented.  It’s interesting that even in a time of ‘heightened alert’ regular travellers take no note of things like this.  The grumpy old guy showed up a couple of minutes after I asked, and when I suggested he not leave his bags unattended, he looked at me like I just stole his wallet.

We have a long way to go.

That’s all from Sin City.  When I get home, I’ll post my observations from CES.


Well, I have completed my first post Christmas Undie-Bomber flight into the US.  I was headed to Las Vegas to attend the annual Consumer Electronics Show.  I have to be honest, I really, really, REALLY wasn’t looking forward to the changes the TSA/CATSA has made to the pre-flight security process.  But, I decided to channel this energy in a positive way, and instead focus on the Canadian Junior’s hockey gold medal game against the Americans.  Because I was flying WestJet, I would be able to watch the game in-flight because each seat has it’s own TV running Bell Satellite TV.  Game On!

But first, I had to get to the plane.  And that meant security checkpoints.  And more.

My initial check-in with WestJet was pretty quick.  A short wait, and I was at the front of the line.  I told the nice young lady that this was my first flight ever with WestJet, and that I’d heard wonderful things about it.  I realized as I was saying it that there was no schmoozing my way into an upgrade, because there is only 1 class on their 737s.  How communist.  That said, the service I received at check-in, and in-flight on WestJet far surpassed the general apathy and occasional eye rolls and scowls I’ve endured at Air Canada.

With my boarding pass in-hand, I headed to the US Customs/Immigration checkpoint.  I had expected to see thousands of rotting bodies lying in the hall waiting for their opportunity to be interrogated, scanned, photographed, blood typed, politically assessed, psychologically assessed and genome decoded.  But, to my pleasant wonder, there were only 6 people ahead of me.  BTW, I have a NEXUS pass, but can’t use it going into the US until I head over to the NEXUS office in Terminal 1.  Their office closes at 3pm.  Government work has great hours, and a wonderful pension, and …oh, never mind.

So with my papers in order, and an act honed over many hundreds of shows throughout the years, I was through US Immigration and Customs, and on my way to the CATSA security screening area.  Hmmm, this really hasn’t taken very long, so far.  This is probably where things get messy.

Once again, there were very few people in line for the x-ray/magnetometers.  I kept my boarding pass/passport in my pocket, and took off my coat, shoes and took out my MacBook and sent everything through the x-ray machine.  Now, as I’ve mentioned in my previous post, carry-on roller bags are as welcome in airports as George W Bush is anywhere outside Texas (and possibly West Virginia).  Because of this baggage restriction, I have my Targus Laptop knapsack with me, and in it is my camera gear and MacBook accessories, and everything else I don’t want lost, stolen or broken.

I breeze through the magnetometer with nary a beep, unlike the bozo in front of me who kept pulling change, metal rulers, copper pipe and a wrench out of his pants.  Why do I always get stuck behind morons like this.  I say that if you are incapable of identifying metallic objects on your person, then you cannot be trusted to ensure your luggage has not been compromised by Al Qaeda, and you have to take the bus instead.  These people are also the reason we have to have the seatbelt explained to us every time we get on a plane.

As I’m putting my shoes back on (they apparently did not have PETN inside them), I hear the dreaded words no traveller wants to hear: “Sir, is this your bag?”.  Ok, here we go.  Now previously when I would hear that, it meant that the chemical engineer in the white CATSA shirt was going to do a spectrum chromatographic test of my carry-on to ensure it doesn’t have trace amounts of volatile, dangerous compounds.  Actually, the lad in the white CATSA shirt says he just rubs this plastic stick with a bit of kleenex on the end of it on random parts of my bag, and then he puts the swab in the machine that goes ‘bing’.  I recall from my long-ago chemistry labs at UW that controlling the environment and calibration of the test equipment is critical to generating reliable data.  Judging by the colour of that swab, I’d say it’s been in use since mid-September, 2001. And I think I saw a placard on the machine that says “lick once to calibrate”.  Anyhow, I distract myself with happy thoughts, realizing the ‘bing’ test should only take a minute.

Uh, oh.  Now he wants to completely empty my bag.  Uhm, ok.  So I take out the MacBook, extra battery, power supply, notebook, travel docs, DSLR camera, lens, headphones and assorted pens and mechanical pencils.  It looks like a yard sale, and I’m thinking “I carefully packed this stuff so it would all fit the smallest volume”.  So Igor, (I have spent so much time with him, I feel it now appropriate to take notice of his name tag), starts swabbing my notebook, and anything else he can find.  When the ‘bing’ machine says “he’s clean, Danno'” he starts to give additional scrutiny to my belongings.  He picks up my mechanical pencil, and makes sure there’s lead in there.  I was going to point out that it’s graphite, but thought better of it.  With a million smart-ass remarks flying through my mind, I realize there’s a special room nearby for wise asses, where their wise asses get special attention.  After Igor is happy with the pencil, he says “ok, you can put everything back”.  I hand him my pen, and say “you didn’t check this”.  He seems momentarily confused, then says “no, it’s ok”.  So apparently CATSA training contains a session on ‘Visual Identification Of Weaponized INkS’ (VIOWINS).

One interesting side note.  I don’t know if this happens to others, but as Igor was scrutinizing my belongings, I started playing a game of  ‘where would I put the contraband’? I made a mental list of all kinds of ways to get naughty things past these inspections.  This would be called penetration testing in the IT Security world.  The ‘bad guys’ try to get past the ‘good guys’.  The fact that I came up with a handful of ways to do this while watching them was of some concern.  Alas, I made myself feel better by realizing once again that this isn’t actual security, it’s theatre.  I decide I’m in the middle of Act I, just before the funny guy does his song.

Off I go, my belongings carefully re-packed, and start thinking about getting a bite to eat.  I look ahead of me, and there’s a big queue of people about 150′ away.  My first thought was, wow, that’s a strange place for those people to line up for boarding’, but as I get closer, I realize there’s a new roadblock.  We have more screening to go through.  Oh dear, now I’m thinking I should start taking notes.

There are no signs, just a CATSA agent at the front, and as I look ahead I can see armed RCMP officers doing pat-down searches of everyone.  I overhear someone say “females on the right, males on the left”.  A guy in front of me jokes aloud about whether he could be searched by a female agent.  Apparently that’s not allowed.  More silly rules.

It’s now my turn.  I walk towards the highly trained, capable, and expensive RCMP officer and he smiles and politely asks me to take off my jacket.  I feel like we both know this is a farce, but neither of us wants to demean the dignity of the other by saying so.  I ask him if we could get to know each other over a glass of wine first, but he says no.  He’s not looking for a long relationship.  He asks me to make a ‘T’ with my arms, and I wonder if I’m going to be allowed to spell a word with my body as part of a peaceful protest of this performance art called airport security.  No time for that, he starts high, and briskly grabs me all over from behind.  “Turn around, please” he says.  Now he checks me from the front.  I almost can’t prevent myself from laughing.  This whole scene is ridiculous.  He is satisfied now (that makes one of us) and writes a “C” on my boarding pass.  I quickly determine “C” means “Table C” for the carry-on bag inspection.

Let’s now review what’s happened this far.

1) Nobody asks me any meaningful questions about my trip at the WestJet check-in, or US Immigration.  Perhaps that’s negative profiling, but I’m certainly not willing to cede that the process used is that sophisticated.  It’s village idiot simple.  Do the same thing to everyone, and look very serious when you do it.

2) I’ve been through a magnetometer and my bag has been x-rayed and completely emptied and searched.

3) Me, and everyone else flying that night, was physically patted down.  I was told by a woman in line that they are even doing this to children.  I found that hard to believe but was busy with my own pat-down and didn’t see how they handled children.

4) If I was a radical, and used the same approach as the Christmas Day bomber, I would have made it through these checks with exactly the same ease.  Nobody tested me in a meaningful way.  Me and my explosive tighty whities would be heading for the magazine shop for some pre-terror reading material.  Perhaps a Steven King novel, or something from Dr. Phil.

Ok, almost there.  But I have to go through yet another tear-everything-out bag check.  So I’m think that perhaps this is a ‘defence in depth’ approach.  Overkill, but when you’re going for dramatic effect, the more the better.  I think they actually need some flashing red lights, some sirens and  a smoke machine.  And maybe a fireman.  I initially think playing the theme music from ’24’ would be a good effect, but then decide that this would set expectations that this entire charade would be over in ‘1 day’.

The CATSA agent looks at my coded boarding pass, and directs me to Table C.  I walk up, and place my bag on the table, and guess who’s there?  It’s my old friend Igor!  Well, isn’t this nice.  Igor gets to test his own thoroughness.

I can’t resist.  As he’s taking everything out of my bag, I say to him, ‘doesn’t this look familiar’.  He doesn’t appear to understand what I’m talking about.  Is he ignoring me, or does he genuinely not recognize the MacBook, Canon camera/lens and mechanical pencil from 15minutes earlier?  At this point, I’m looking for the director to yell ‘Cut!, Who the hell put this guy back on bag-check? You’re ruining the whole effect!  Ok, people, back to your marks, and ACTION!”

Igor finishes his work, and says I can go.  I look at him quizzically and say ‘that’s it’?  He says ‘yes’.  I’m wondering, shouldn’t you write a special cryptographically secure symbol or code on my boarding pass to indicate that Igor has confirmed (again) that my bag is safe?  So, not overthinking this, I turn and head to the final CATSA agent.  She looks at my boarding pass, and stops me saying “Was your bag checked?”  Uhm, do you trust me enough to want my answer?  I tell her yes, and point to my friend Igor.  She yells “You have to put an X on the boarding pass”. An “X”! Dammit, that’s so simple and so perfect.  Who’d crack that code?  You can’t pass through this final rigorous final security checkpoint until you have a black ‘X’ on your boarding pass.  Perhaps black ball point pens should be banned in airports as well.  Igor sheepishly acknowledges that he’s not following the script, and is likely to get a call from his talent agent telling him he’s back to community theatre after this show runs its course.  But if this show has the longevity of Cats, we’re all screwed.

So, after 45+ minutes of additional screening, I’m free.  And I’ll point out that the airport was as empty as I’ve ever seen it.  I can only imagine what it is like when it’s full.  That explains why WestJet says you should show up 3 HOURS before your flight to the US.  Imagine flying to New York (1.5 hour flight) and have to show up 3 hours early.  Sure, that’s sustainable.

Well, that’s my report.

It’s like one of those really bad sci-fi movies where the science is so incredibly weak that you find yourself cheering for the asteroid to wipe out the Earth.  When we use highly trained law enforcement in this way, it demeans their skills, and clearly takes them away from more important societal tasks.  Shouldn’t we be identifying anomalous behaviours? It isn’t profiling if you select people based on stress responses.  The more I learn about the Israeli approach to aviation security, the more impressed I am with it.  If we’re going to have to spend Billions of dollars, can we at least attempt to do it intelligently.  “Sir, please take off your shoes” is not basis for airline security.

We need a much more intelligent approach to identifying threats.  The model being used by the aviation world makes me appreciate how well Internet security works.  Yes, it’s that bad.


I used to fly. A lot. And the recent near-miss by yet another radicalized terrorist has me happier than ever that I’m not flying much.

But that’s not because I’m worried about being killed in a terrorist attack in the air.  I’m worried that my head will explode while I’m going through the performance art that is labeled by the government as “security”.

Let’s recap what happened on Christmas Day.

  1. a young Muslim man from a 3rd world country is radicalized
  2. his concerned parents contact the US Embassy, and this information eventually goes to the CIA
  3. he pays $2831 cash for a ticket from Laos->Amsterdam->Detroit, travels alone, and checks no bags on this cross the globe trip
  4. he hides some highly explosive PETN in his tighty whities.
  5. a Dutch passenger comes to the rescue when he tries to ignite the explosives

The response by the various security agencies has been quite interesting.  Initially, in-flight entertainment systems were shut down because they showed where the aircraft’s location.  Let’s think about that for a minute.  Somebody in a position of authority (let’s call him Mr. Beane) believed we were better protected on a flight if a terrorist doesn’t have a GPS map telling him where he is.

Is Mr. Beane aware that there are windows on a plane?  Did he take high school physics and learn that you can derive distance by multiplying speed (airliner flies ~ 450mph) x time.  Does he know that we’re still allowed (as of today, anyway), to have timing devices on our person.  Insane.  So we all miss the movies that make the horrid, cramped and squalid service a little less tortuous because some “security expert” decides that it’s too dangerous.

Next, Mr. Beane decided that it’s safest if we all sit on our bums for the last 60 minutes of a flight.  This one was very familiar to me, because I flew on the first non-US originating flight into Washington’s Reagan National Airport after 9/11.  I went through 4 different security checkpoints in Toronto, and there was an Air Marshall on that flight.  We were instructed at the start of the flight that due to the sensitive route this flight takes down the Potomac, that we must remain seated for the last 45 minutes of the flight.  No biggie, I thought.  Especially since it was only an hour and a half long flight.  I was certainly in a heightened emotional state on that flight, and watched every passenger around me for any signs of mischief.  In this specific flight’s case, the assumption is that an attacker would want to do harm to a major US government facility, thus having people stuck in their seats as we’re approaching those makes more sense.

So after Christmas day,  we weren’t allowed to have anything on our laps for those remaining 60 minutes either.  Why didn’t they just have the captain announce, “Ladies and Gentlemen, this is your captain speaking.  It is now 60 minutes to our landing in Newark, so you are all now required to remain in your seats with your hands on your heads.  Flight attendants will be coming down the aisle and affixing blindfolds and ball gags to you for the remainder of the flight.  We recognize you have choices when you fly, and we want you to know that we appreciate your business.”

However, in the general case, terrorists just want to inflict terror.  Does it really matter if a plane blows up over the Atlantic, over a field or over a city.  Yes, there will be more damage, and possibly more media coverage if it’s over land, but you don’t need specific locations to assure that.  And you sure don’t need a GPS.  So they asked terrorists to kindly remain in their seats for the remaining 60 minutes of the flight.  But please feel free to get up 62 minutes before the end of the flight and blow things up.

This approach to security is akin to the famous Maginot Line.  Set the fence up at 60 minutes, and the bad guys just walk around it at 62 minutes.  Wow, who saw that coming?  I pity those folks who drank too much in 1st class and need a bathroom break. Oh wait, 1st class was exempt from this restriction.  Oh crap, now the terrorists know that.  “Wow, this security stuff is hard” mumbles Mr. Beane.

Let’s turn to another one of Mr. Beane’s security brainstorms.  No more roller-bag carry ons.  In fact, nothing more than a small laptop bag or purse.  Let’s reflect back on this and identify what security benefit there is in this action.

Terrorists will not be able to bring on board roller bags.  Yes, that’s right.  We’ve won.  The code has been cracked.  Perhaps the theory behind this one is that terrorists will be so pissed off with the crappy service they get from the airlines that they start attacking trains again.  Well played, Mr. Beane.

Noted Security expert Bruce Schneier has correctly stated that the government focuses on the “last attack” and not the “next one”.  This is very true, but I think it is important that you try to make it as difficult as possible to replay the last attack.  Doing nothing is akin to leaving your car door unlocked after repeated thefts.  Wise up, and lock the door. But don’t order all cars to be painted yellow.  That might look like action, but we clearly don’t all want yellow cars.

However, the actions being taken now don’t address the last attack, or the next one.  They are a complete replay of the goat rodeo we went through after 9/11, whose sole purpose was to put bums back in seats and keep the airline industry from complete collapse.

If we were serious about security, we’d have a much greater pre-screening process, that starts well before people check in, or even buy a ticket.  And it wouldn’t depend on me taking off my shoes and not bringing on board a roller bag.

In any event, these actions have frustrated me, and I don’t have to fly very often now.  And when I do, it’s generally for pleasure.  That’s ironic.  Flying for pleasure.  Who does that any more?

Oh, and by the way Mr. Beane – YOU’RE FIRED.

pitappsmallThere is a significant change underway in Woolwich township, and I fear that without action, the beauty and uniqueness of our home will be damaged for decades to come.  I am referring to the proliferation of gravel pit applications that have been submitted to Woolwich Council this year.  There are no less than 3 brand new applications underway, and all within 4 km of each other, and completely surrounding the small village of Conestogo.

The aggregate industry is a very well connected and funded one, and their ability to steam-roller opposition is well documented.  The decision to allow or disallow the operation of a specific gravel pit rests in the hands of the local, and ultimately, the provincial government.  Many concerned residents have formed the Conestogo-Winterbourne Residents Association to ensure that our quality of life, safety and property values are not hijacked by commercial interests.  But this is not an easy battle for us.  It is expensive and time consuming.

There are some real dangers posed to all of us if these pits are approved.  There will be a ridiculous number of large gravel trucks driving through Conestogo via Northfield & Sawmill as well as through the notoriously dangerous Crowsfoot intersection.  Having reviewed in detail one of the applications, their ‘traffic expert’ did not see any increased risks to life or property by potentially having 27 gravel trucks per hour go through the Crowsfoot intersection.  And that’s just the ‘expected’ traffic for a single gravel pit.  This is why citizen involvement is critical.  Gravel trucks are incompatible with communities.  School buses and Mennonite buggies are no match for a fully loaded gravel truck.

We all came together as a community to establish Woolwich as Hockeyville.  And although we didn’t receive the official recognition, it’s clear to all who live here that this is Hockeyville.  But there are commercial interests who wish to turn Hockeyville into Bedrock, the home of the Flintstones.  I for one love this community too much to sit idly by while farmers fields backing onto homes with swing sets are turned into noisy, dusty and potentially fatal gravel pit operations.

Let’s join together to fight this.  We have a community meeting scheduled for Monday, April 27 at 7:30pm at the Conestoga Golf Club.  The official Hunsberger pit application public meeting is on Monday, May 4 at 6:30pm, at the Conestogo Public School.  If you are a resident of Woolwich Township, please find the time to attend these very important meetings, or prepare yourself for the persistent rumble of gravel trucks.

We can affect the change necessary to preserve our quiet community, and ensure that our children grow up in a safe and protected environment.  Without citizen involvement, I fear that this letter will once again be re-posted after a gravel truck and one of our loved ones has what the commercial interests would call an ‘incident’.

For more information, please visit: http://conestogo-winterbourne.com/


Note: since I first wrote this, it has been published in the Observer and The Record.

We’re all aware that the US is in serious trouble because some unconscionably stupid, or greedy consumers took on mortgages for homes that they could not afford. And they were met all to warmly by predatory mortgage lenders who sold these mortgages, then handed them off to other scoundrels who packaged them up as “mortgage-backed securities”.

There is much discussion about what to do with these mortgages.  Senator McCain’s Presidential campaign included a kind of “buyout” for these mortgages, which struck me as a profoundly un-Republican thing to do.

First, I want to separate the mortgage difficulties faced by a family who’s income has been affected by a recession-related job-loss.  You can’t hold people responsible for a mortgage that they could have managed without difficulty when both parents were working.  I’d actually want to see them assisted before we help the stupid/greedy people.

The “culprits” I want to focus this discussion on are the people who, either through ignorance or greed, bought a house that they could not afford. Let’s call what they have “bad mortgages”.

As Consumers, we all have an implicit personal responsibility to only spend what we can afford. There are protections in place to prevent us from being taken by fraudulent marketing.  This is one of the aspects of “regulation” that is hotly debated by the Left and the Right. Pure free marketeers believe there should be no regulation, but I think that leaves consumers in the position of having to either be, or hire, the services of a financial and legal expert to vet every transaction they undertake. Clearly, that’s not scalable. The Left believes there should be lots and lots of regulation. That will grind commerce to a halt, and add so many layers of bureaucracy that our markets would become massively inefficient wastelands. Neither side is right.  There is a reasonable compromise to be struck.  And the fact that Canadian Bank and Mortgage regulation has largely insulated the Canadian homeowner from these problems speaks to the benefits of reasonable regulation.

President Obama has created a proposal that he describes as follows:

  1. refinancing help for four to five million homeowners who receive their mortgages through Fannie Mae or Freddie Mac
  2. new incentives for lenders to modify the terms of sub-prime loans at risk of default and foreclosure
  3. steps to keep mortgage rates low for millions of middle class families looking to secure new mortgages
  4. additional reforms designed to help families stay in their homes

I’ve been thinking more lately about what the “right thing” to do is with respect to these “bad mortgages”.  It is entirely unfair, in my opinion, to pay off, in any way, the equity shortfall, or mortgage payments of a bad mortgage holder. You can easily imagine a neighbour of his next door, who bought a smaller house, and is fully current with his mortgage, wondering why his tax dollars are paying for the mistake/greed of his neighbour.

It would not be fair.  But in the “big picture” we have an economy which is being held at gunpoint by these bad mortgages.  Some major US financial institutions, like Citibank and Bank of America could become insolvent if the mortgage failure trend continues.  These banks will become the proud owners of massive numbers of homes which are worth much less than their mortgaged value.  The Bank’s money, long gone into the hands of builders and speculators.  The cascading effect of major US bank failures is a terrifying one.  Don’t worry about your savings and checking account, because 99% of us don’t have hundreds of thousands of dollars there.  But think about the small and medium sized businesses.  Think of the credit crunch when a few more major banks fail.  More businesses will fail, and more people will lose their jobs causing yet more mortgage defaults.  It’s not a pretty picture.

So what might be fair? The current proposal is for the government to pay portions of these mortgages, and re-negotiate the lending rates.  But to me, that’s unbalanced. Fred shouldn’t be paying off Stan’s mortgage because Stan is a greedy/stupid guy.  I have a proposal:

When mortgage relief is offered to anyone who has a “bad mortgage”, if they take it, they forfeit any equity to that house when they sell it until the government is paid back.  Think of it as a 100% capital gains tax on bailout home sales.  As with all systems, there are ways to game it to your advantage.  I fear this would be very difficult to implement. But the spirit of this idea is that the government/taxpayer gets it’s money back when/if the home sells at a higher price in the future.  The bailed-out homeowner doesn’t get off scott-free.  Of course, this assumes the house will be worth more in the future, but that’s not likely to happen for a long time.

I’m curious what you think of this idea.  My gut says one underlying problem is that it doesn’t let the “bubble” reset, but it prolongs inflated home values.  One of the arguments used by proponents of a mortgage bailout is that “good mortgage” holders home values will be negatively affected by the default of the “bad mortgage” holders. That’s true, but isn’t the loss in home value related to an inflated supply of homes?  I think the underlying problem is that too many homes were built (at too large a price because of the easy-mortgage money that was available).  That’s not going to be corrected by bailing out these mortgages.  I think the market has to stabilize, which probably means the housing over-build has actually reduced the value of everyone’s home. Supply and demand 101. Grow the economy, and raise the wealth of the middle-class, and perhaps the demand side of the equation will scale up and start raising home values again.

The Obama proposal allows people to continue to live in homes they can’t afford, while honest, hardworking taxpayers continue to live within their means.  Are there no repercussions for being irresponsible and for affecting the health of your country?

I find it ironic that with all the money and attention focused on terrorism that the greatest threat to our “way of life” has come from idiots and scoundrels holding US passports in hot pursuit of “the American Dream”.  I hope these people are ashamed of themselves.


Christmas was once again a wonderful time to gather with my family, and enjoy the fun that can only be had with loved ones from different generations.  Santa visited, and brought with him a great assortment of gifts that were universally treasured.  But there was something I secretly wanted, but have yet to receive.

I’ve spent a lot of time over the past few months reading from various sources about the current challenges our global economy faces.  The financial meltdown brought on by the ABCP farce seemed to sneak up on us (or at least it snuck up on Sen. “the fundamentals of our economy are sound” McCain).  But the disaster we are seeing in the automotive industry, and specifically, the “Big 3” is something many people have seen coming for years.

I have vastly simplified their problems down the the following:

  1. They build and sell cars in a way that is not economically sustainable.
  2. Their labour costs are completely out of whack with the value the jobs deliver.
  3. Management has utterly failed to lead the companies by fighting the forces that weaken their viability.
  4. Management makes large bonuses to maintain the failing status quo.
  5. The quality of their product is weak.
  6. The unionized environment enriches workers, but destroys any possibility of a culture of innovation, improvement and efficiency.

The talk of a bailout is rampant, and it’s become clear to me that the politicians are absolutely going to give billions of our dollars to the same managers and union bosses that got us into this mess.  There is less political risk if the Big 3 go bankrupt if you voted to give them billions of dollars.  He can say “well, I tried”.  It seems to me a cowardly and reckless way to lead and manage my tax dollars.

So, back to my missing Christmas gift…

There are moments in history, usually brought on by crisis, and real risk of loss or devastation, where the political will to really impose change exists.  Some changes were good, others bad.  Unfortunately, the bad ones are usually really bad.  But things improve when there are bad headlines, and widespread outrage, fear or anger.  Planes are safer because of terrible crashes, as are cars.  The healthcare industry changes when pharmaceuticals or tools are proven to be dangerous.  Our planet, according to many, is trending towards a very dangerous outcome due to the impact of greenhouse gases.  There is no universal consensus about this amongst the scientific community, but there is rarely consensus where billions of dollars are at stake.  As a rational person, I’ve looked at the data on both sides, and have agreed with the YES side.  Having traveled around the world, I’ve seen the impact that humans have had on their environment.  You don’t think mankind can significantly impact the planet?  I suggest you travel to Beijing in the summer and take a deep breath.

The reliance on oil as the basis for our transportation is hitting us on 3 levels:

  1. The emissions are destroying the atmosphere.
  2. The massive transfer of wealth from the west to the middle east is a dangerous threat to our national security.
  3. Oil will eventually become very scarce.  The “easy” oil is gone, and now we’re digging deeper and in areas that were previously “off limits”.

So, let’s review.  We have an industry (automotive) on the verge of collapse.  Without massive change, and taxpayer assistance on a previously unprecedented level (unprecedented until the TARP funds), the “Big 3” will fail.  We have an environment being damaged globally by the products these very same companies are mass producing.  Do you see where I’m going with this?

There has never in history been a more prescient moment to change the automotive industry.  I propose the following:

Taxpayer money will be made available in the form of loan guarantees, as well as grants (let’s call them “investments”) to the “Big 3” and the related fuel infrastructure players, provided they meet the following conditions:

  1. Immediate R&D into Hydrogen based propulsion system.  If they need help, ask Honda about their Clarity model.
  2. No R&D funds will be spent on any petroleum based engine technology.
  3. With the exception of parts to support the vehicles currently on the road, all manufacturing facilities will be used to produce Hydrogen fuel cell based vehicles.
  4. Fund the Hydrogen distribution/retailing infrastructure.  Incentives to stations who will provide Hydrogen refilling stations.
  5. Fund the creation of clean Hydrogen generation stations.

Taking these steps will result in a transformation of the automotive industry that will set up our children and grandchildren for success.  They will have great vehicles, that run on a clean and sustainable fuel that is not driving wealth out of our economy, and pumping poisonous emissions into our air.  As an aside, I think that if the “Big 3” want to continue to build the vehicles in the same way they have previously then the bailout funds should come directly from Exxon, Shell, BP and the rest of the oil companies.  I think the oil companies should look at this as a marketing expense, since it will be ensuring the channel through which they derive the vast majority of their income survives.

It’s concerns me greatly that this isn’t being discussed by the government and environment leadership in North America.  This is an opportunity we must seize.  It’s not our only opportunity to make changes.  We’ll get another final chance when the actual supply of oil starts to reduce (in the next 10-20 years).  But if you think the current situation is difficult, imagine what things will be like then.

So, please help me get my Christmas gift.  Talk about this idea.  Tell your friends, colleagues, and family.  And then talk to your MP, Congressman, Senator, Prime Minister and President-elect.

There is no easy way out of this mess.  If you think I’m a tree-hugging automobile-hating kook, then read more of my blog.  I’m a passionate car guy.  I have had a lifelong affair with cars, and I always will.  The hardest problems usually come with the potential of having the biggest upside.  I’m tired of half measures and pointless  compromises.  We owe it to our kids.


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