My Heroes
5 October 2008I was honored to be invited to give a short talk at the 25th anniversary reception for what I believe to be Seattle’s oldest venture fund, originally Rainier Venture Partners, then Olympic VP, and now called OVP.
Given all of the difficulties around the world, I thought it would be worth talking about something upbeat, and I easily found three subjects.
The first: SNS Project Inkwell (www.projectinkwell.com) and a recent, successful trip made to Mexico (I’ll write a separate blog on this, with a few pictures);
The second: The difference in the economic roles between venture investing and Wall St. While the vampire investors have been busy trying to extract money without adding value, it has been the venture community that has provided the greatest productivity to the U.S. economy. In my world, IP is valuable, not only as Intellectual Property, but as the combined values of Intellectual Honesty and Productivity growth which the venture community has traditionally provided.
Finally, I listed some of my personal heroes, and how they represented these values added, focusing on a short list of Craig Venter, Larry Smarr, Elon Musk and the investor Vinod Khosla.
These are some of the people who, in the midst of corruption and tragedy, are providing the new tools for the next steps of our civilization. Their work keeps me optimistic.
2 Responses to “My Heroes”
October 12th, 2008 at 12:22 pm
Indeed these are the people that encourage us all.
In a world dominated and almost destroyed by the greediness of few they are some real entrepreneurs left (as Schumpeter defined entrepreneurs), people that are building on solid basis and where their work is not just benefitting themselves but everyone .
History comes in cycles and humanity is humanity. The other day I happen to read this: “Panics do not destroy capital; they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.” – Mr John Mills, Article read before the Manchester Statistical Society, December 11, 1867, on Credit Cycles and the Origin of Commercial Panics… so true … and so sad that people do not learn from the past!
October 29th, 2008 at 2:36 am
How Credit Default Swap Settlements Are Draining Liquidity From Interbank Market
This informative discussion that sheds further light on the stresses created by credit default swap settlements comes in the current issue of the Institutional Risk Analytics weekly, “In the Fog of Volatility, the Notional Becomes Payable”:
Another example of the ongoing discontinuity in the markets comes in the linkage between the unwind of credit default swap (“CDS”) positions written regarding Lehman Brothers, Fannie Mae and Freddie Mac, and dollar LIBOR rates in Europe.
The auction process begun by DTCC, by which holders of CDS on bankrupt Lehman Brothers settled in cash via the DTCC’s facility, caused many tongues to wag as to the “net” amount providers of protection must pay to holders of CDS. Several members of the media called last week to ask if Don Donahue, CEO of DTCC, was speaking truth when he said that the net payments on Lehman contracts processed by the DTCC’s warehouse were a mere $6 billion or so.
Of course Don Donahue is providing the straight skinny on the flow of transactions which have actually participated in the DTCC auction. But consider that other than holders of CDX and some holders of single name CDS not offended by the prospect of cash settlement, there remain a large number of total holders of CDS for Lehman who do not wish to take cash settlement and indeed are expecting to receive the underlying bonds.
Excerpt:
As one veteran CDS trader told The IRA on Friday, “It’s not that people can’t fund, it is that people have got to fund these CDS positions. These banks don’t have access to sufficient liquidity internally to fund, so they hit the London markets… The Fed and the other central banks must start to deal with the huge overhang of currently hidden funding needs from the CDS and other derivatives.” Another market observer suggests this is precisely why the Fed and other central banks have been furiously putting reciprocal currently swap lines in place.
http://www.nakedcapitalism.com/2008/10/how-credit-default-swap-settlements-are.html
Still fighting self inflicted fires and killing the real economy. Tim