In praise of slow economic development: St Louis versus Baltimore
It’s blue skies over the Midwest as I travel to work with clients here in St Louis. Driving into the orderly, clean, rapidly-revitalizing downtown district, I cannot help but make a comparison in how different this city’s economic development has been compared with Baltimore.
Both cities had thriving manufacturing sectors early in 20th Century. Both cities hollowed out in the 1970s, expanding in endlessly-sprawling suburbs in all directions. Both cities left the infrastructure of their downtowns to rot. And both began projects of revitalization in the 1990s, hoping to heal the scars of gross economic inequity and re-center their civic life.
Baltimore launched a massive redevelopment centering around national big-box retail and major attractions. It is bankrupt.
St Louis redeveloped slowly, around local retailers, local investors, small projects. Block by block, it has gotten a little better each year, improving real estate, increasing access to services, getting a bit cleaner, a bit prettier. Nothing too drastic.
The value in slow growth seems to be showing itself…slowly.
Social media, authority and intelligence
We finally have video and audio of last week’s Intelligence Collaborative event at which I discussed the impact of social media on what passes for authoritative information, and thus on decision making.
Online trend analysis training: Real forecasting for Professional Analysts
If you are professional strategic analyst – or want to be one – you must use forecasts. If you want to improve your chances of success, make sure you and your analysts are using Real Forecasting.
Having trained thousands of executives in the art of foresight, we know that now, more than ever, we need a clear view of the events coming in weeks, months and year, or we risk making decisions on faulty assumptions. What passes for business media is scarcely a help in this area. If you listen uncritically to the forecasts offered up in most channels, you have to base your view of the future on:
- Sunny economic forecasts based on stock speculation instead of shrinking incomes and unemployment
- Chairmen of the Federal Reserve forecasting the rise housing prices just before the detonation of the entire economy under the weight of fake mortage-backed securities
- The US Government predicting world oil supply as stable or steadily growing while key oil fields go extinct and China and India put millions of cars on the road
- Healthcare debates that appear to ignore the impact of the Boomer retirement, shifts in employment contracts
If you are a professional analyst, we want you to be able to:
- Know good forecasts from bad
- Identify who can you trust in a world without defined authority figures
- Make critical decisions based on the best information
Our short course entitled Real Forecasting for Professional Analysts is perfect for busy analysts and managers who want a professional-level refresher course in the evaluation of forecasts. Our course, featuring 60 minutes of content and 30 minutes of Q&A, will show you how to:
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* Identify implications of the forecast
* Assess the probability of the future described
* Communicate this infomation to other people
At the end of the day, we want our clients to be ready to evaluate forecasts, understand who is writing them, ascertain their assumptions and know what it all means so they can better plan for the future.
This course will be delivered electronically, and will allow for group interaction.
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This social media is nothing but trouble
Well, social media isn’t the problem – but social media DOES disrupt what passes for authoritative information, and that concerns us as intelligence professionals and as leaders.
These slides are from my Pecha Kucha style presentation for the Intelligence Collaborative, a group that considers such issues.
The TRILLION dollar gap in pension funds
Envision, if you will, rioting octogenarians, phalanxes of retired teachers, government office managers and firefighters protesting the sudden cessation of payments from their pension funds.
Imagine some way that American states are going to overcome the apparently one trillion dollar gap in state pension funds while simultaneously dealing with an economy so clearly in transition.
Pause with me, as I add a little extra whisky to the morning coffee. That’s trillion with a T.
The Pew Center for the States sure had a headline for us all today with that report, especially speaking as we are about fiscal “challenges” that are popping up, threatening to return Greece to an olive-based economy, put Spain back in the Conquistador business, and convince us to give California back to Mexico if they agree to keep making the lease payments.
The limits of quantitative forecasting
ZeroHedge points out that JP Morgan has now taken out a $3 billion reserve to hedge against the potentially faulty judgments of their quantitative analysts.
For those of us in the world of largely qualitative analysis, this is a fairly unprecedented move, one that cuts across the grain of most schools of modern managerial thought. As my colleagues in intelligence often say, fake numbers will trump real insight almost every time. For example, consider that 87% of all statistics are made up on the spot to support faulty arguments. (Ahem.)
We’re not against hard numbers; collect as many of them as possible in every analysis. Still, you should be able to analyze the assumptions behind those numbers. Speaking of which, the ZeroHedge article pulls a shocking statistic out of the history of the subprime debacle. Check out what the quantitative model predicted subprime losses to be, as opposed to the actual losses, factors of 100 greater. Holy cats…
I might add, if you prefer real forecasting to fake numbers, we’re teaching a course on the subject around lunch time, March 4. Why not join the class?
The Future Intelligence Methodology
People often ask us what kinds of information they should be collecting if they want to see what’s coming next. This short video explains what kinds of intelligence you should be gathering and why if you want to maintain profitability and growth in the years to come.
Local currencies in distressed towns
by Eric Garland
Between the Greeks staying in the European monetary union, or Detroiters keeping their dry cleaners and doggie-daycares afloat, there is a considerable amount of talk about the role of currency. The crux of the European issue is that the Portuguese and Greek economies are so different from the French and German ones, it is difficult to keep one currency with the same rules and assumptions in play. The fringe actors are no longer able to keep up the facade required for membership in the club.
We are seeing a microcosm of this in local towns in America, and the issue comes down to the ability to maintain a central currency. We note with interest an uptick in stories about local currencies not seen since the banking meltdown of 2008 and 2009.
Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.
It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.
But why would people go to such trouble? Money is money, right?
When the Treasury prints billions to bail out banks and automakers, people look for alternatives. These folks may look nutty now, goes the quip, but wait till the dollar goes the way of the Argentine peso. Then you’ll be exchanging a wheelbarrow of cash for a bay buck, local currency boosters say.
What could this mean in terms of business strategies? One of the most likely implications would be a return to local distributors, those able to deal best with the local market and even local currencies. Compare this to the recent trend of market consolidation in a variety of industries. It just doesn’t match.
First Greece and Portugal, but they are on the outskirts of civilization. First Detroit and Western North Carolina, but those places aren’t prime time.
Next…California? Spain? Iceland? New York State?
Interview with Pam Atherton on A Closer Look radio
Last week I had the enormous pleasure to speak with Pam Atherton on A Closer Look radio. She’s a bona fide radio professional with a profound understanding of society, the 
media, information, wisdom, and how to ask great questions. This hour-long interview on the future of energy and local communities could have gone on much longer, and felt like in went by in a few moments.
We delve into the implications of peak oil, why local gardens are the new hotness, and how organizations deal with information about the future. Definitely worth a listen.
Spanish intelligence services: financial crisis is a conspiracy
by Eric Garland
Usually, it’s the job of tin-pot dictators like Chavez and Ahmedinejad to trot out their intelligence services and declare that the world is out to get them.
But when the Spanish intelligence service says the country is under attack from speculators in a clear conspiracy, it’s a sign of something deeply interesting. First, it’s a telltale sign that people high in the Spanish government are concerned that greater instability is on the way from the sovereign debt crisis, and they are attempting to control the narrative.
For those of us practicing future intelligence, this is a call for us to examine the broader political trends at play. Most views of the future take the Euroland to be a stable economic entity for all scenarios. Generally, a meltdown of the single currency and a brushfire war between Belgium and Portugal are considered far out. At the very least, most people consider the continued operation of the EU to be a given – after all, it has resulted in one of the most successful, peaceful, prosperous times in the history of the continent, especially after the tumult of the early 20th century.
Still, it may be that the success of Euroland has required all countries to play a part for which they are ill-suited. Spain still has 20% unemployment. Greece’s debt is out of control. In the days before the single currency, each country would have been free to fail, unsupported by the largesse of France and Germany. Today, they have been supported through their use of a stable, global reserve currency. Like so much, this may be borrowed equity, and borrowed time.
Imagine a future for your business, and indeed your nation, in a world where Europe re-fragments. It may be less far-out than previously thought.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.About Dan Vecchi
Dan Vecchi is the director of economic risk analysis for Competitive Futures. He helps leaders examine their investments in countries around the world, exploring future options and ensuring profitability in the years to come. He speaks natively fluent English, Spanish, Italian and works regularly in South America as well as Europe.New project: Manufacturing 2020!
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