I predicted a while back that the current economic crisis would affect IT spending significantly.  It appears that this is happening pretty quickly--ChangeWave Research recently published an interesting survey from vendors in the software industry.  In an indicator of just how quickly the recession is hitting the software industry, take a look at this chart:

I also want to pick out one more bit of interesting data out of this post:

Finally, in another extremely bearish sign, only 10% say their company's capital budget is increasing for next quarter (2Q) and 26% say its decreasing - a net 14-pts worse than three months ago.

This reinforces my gut feeling that Software as a Service companies may weather this recession much better than most, as the capital outlays to get them up and running are significantly lower than premise-based solutions.  It'll be interesting to see how companies like SalesForce.com (NYSE: CRM) respond to this.

If you work in the software industry and you DON'T want to lose your job, you should consider spending some time communicating to your elected officials that you want some order restored to the financial markets.  Once your customers can get loans to run and expand their businesses again you're much more likely to start getting more orders.  The sooner we can get through to our elected officials to stop drinking Stupid and start regulating like they're supposed to, the sooner normalcy and productivity can return, the sooner CapEx dollars will start flowing again.  A good way to start would be to sign the petition to reverse the Bear Stearns "bailout" and impeach Bush for authorizing it.

One of the most unfortunate things to happen to the Semantic Web movement is its name.  The word "semantic" always, ALWAYS, gets people thinking of semantic text analysis--that is, analyzing a chunk of text and figuring out what it's about.  That's what Google is for, that is NOT what the Semantic Web is for.

Tim Berners-Lee does a good job of pointing this out in a recent post where he discusses the killer application for the Semantic Web:

Text search engines are of course good for searching the text in documents, but the Semantic Web isn't text documents, it is data. It isn't obvious what the killer apps will be - there are many contenders

What's really annoying is that even when I go to Semantic Web meetups at MIT, people there for some reason are stuck on building a better Google.  You hear it all the time, and it's just really off base.  Tim feels the same way:

One thing to always remember is that the Web of the future will have BOTH documents and data. The Semantic Web will not supersede the current Web. They will coexist. The techniques for searching and surfing the different aspects will be different but will connect. Text search engines don't have to go out of fashion.

I've been saying this for a while:  Why in the world would you try to build a better Google?  It already does an OUTSTANDING job of doing what it does--searching text.  No thanks, I will keep my Google, what we REALLY need to address is identifying objects properly on the Web--linking data.

Kingsley and some other people have been pushing the Linked Open Data brand instead of Semantic Web lately, and I will agree that it fits much better.  The word "semantic" just throws many people way off course, and I think it actually creates disinterest in a lot of people who would otherwise dive in and start using it.  "Linked Open Data" MUCH more accurately describes what it's about.

Linking data is about exposing data so that it can be re-used in other ways that you hadn't thought of yet and queried using SPARQL.  Its analogous to Service Oriented Architecture in that it exposes part of your application to be re-used and mashed-up across the entire Internet--except that it's exposing the data, not the functionality.  (But wow, put the two together and you REALLY have something cool!)

By the way, here's the money shot from Tim if you're looking to make money from the Linked Open Data/Semantic Web, print this one out and pin it to your wall:

So if you are a VC funder or a journalist and some project is being sold to you as a Semantic Web project, ask how it gets extra re-use of data, by people who would not normally have access to it, or in ways for which it was not originally designed. Does it use standards? Is it available in RDF? Is there a SPARQL server?

This is just so weird I can't believe it's real.  Had to do a double-check to make sure it wasn't April Fool's Day yet :)  Researchers have apparently figured out a way to instruct cells in the body to regenerate themselves.  One guy regrew his chopped-off fingertip by sprinkling some dust with "extracellular matrix" in it on the finger.

Now they're talking about being able to print organs using cells instead of ink.  Pretty amazing stuff.

Michael Arrington over at TechCrunch finally raised a point which I've been wondering about for a long time.  He wonders if large technology companies aren't just jumping on the OpenID bandwagon to get good publicity out of it.

I've had that feeling ever since AOL announced their intention to make each of their user ID's an OpenID as well.  (The fact that their user ID's CANNOT be OpenID's because they are not actually URI's pretty much makes that impossible from a technical standpoint, instead it's more accurate to say that AOL is providing each of their subscribers with an OpenID to use.)  To me this looks like a play for publicity and an opportunity for user lock-in.  (However, I will say that it has worked in both directions, OpenID probably wouldn't have the momentum it now has if these companies hadn't announced their support.)

The problem is that these companies are only acting as ID providers, they are not enabling users from other systems to log in using THEIR ID's (to us geeks that means they're not acting as relying partys, only as issuers).  They're trying to have their cake and eat it too.  Arrington writes:

It’s time for these companies to do what’s right for the users and fully adopt OpenID as relying parties. That doesn’t fit in with their strategy of owning the identity of as many Internet users as possible, but it certainly fits in with the Internet’s very serious need for an open, distributed and secure single log in system (OpenID is all three).

There's a big difference between providing OpenID's and accepting them.  Providing OpenID's costs you pretty much nothing from a technical standpoint, and ties your users to your product.  Accepting them means that you're conceding that the users of your application have a home somewhere else and you're just letting them visit.

Hopefully the pressure on these companies to complete their adoption of OpenID will continue to mount and I'll be able to use my OpenID for everything in the near future.

Just hours after I had written letters to my Congressmen about the Bear Stearns bailout, I read Karl Denninger's post regarding the same.  Karl is one of the people whose opinion, knowledge, and insight I truly value, and when he speaks I listen closely.

He had this to say:

"It is widely reported that both Hank Paulson and George Bush personally "signed off on" The Bear Stearns "bailout" last Sunday. As such their direct and indirect actions, in my view, constitute a "High Crime and Misdemeanor" within the meaning of the United States Constitution and therefore subject George W. Bush to impeachment proceedings as proposed in the above sample article for same."

I know there are many people who believe that Bush should be impeached for many other reasons, but I don't care to comment on those here.  What I will say is the Bear Stearns bailout happened here and now, and it certainly seems to be a blatant and outright violation of the trust of the American people.

Karl links to John Hussman who writes in no uncertain terms:

"The Fed did not act to save a bank, but to enrich one. Congress has the power to appropriate resources for such a deal by the representative will of the people – the Fed does not, even under Depression era banking laws."

I agree with both of these men.  What has happened, folks, is that the Federal Reserve, the private company that has only the mandate of maintaining price and currency stability, has unlawfully promised $30 billion of OUR money to the JP Morgan Chase company.

This is NOT lawful, this was NOT warranted, and the Federal Reserve was under NO circumstances authorized to do this.  The only end result that you or I will see because of this is that the price of gas, bread, and mortgages will go up further.  JP Morgan Chase has essentially been guaranteed $30 billion of our collective tax dollars.  It is our elected representative's duty and obligation to act on our behalf and take whatever actions necessary to punish those responsible for breaking the law, and I hope that you will join me in letting them know that the kind of unlawful actions we have seen in EXTREMELY recent history are unacceptable and WILL NOT be tolerated.

Karl has started a new petition to impeach George Bush as a result of his recent actions to enrich JP Morgan Chase at our expense.  I urge you to put your John Hancock to it as a responsible citizen of our country.  The proof is there in black and white, our elected representatives have betrayed us in a very fundamental and unmistakable way.  It is incumbent upon us to act.  If you have the time I would urge you to write your Congressional representatives on your own as well.  Your personal financial future may depend on it.

We are in dark times here folks, I hope and pray that our country can emerge from this crisis with some semblance of honor and integrity intact.

Forrester Research has made its social participation data public.  This is data which describes how a given demographic is likely to participate in a social publishing environment.  It only takes a couple of minutes to explore, and it's interesting to see the generational shifts in mindsets when dealing with social media.  If your business model involves social publishing you might want to use this for a quick sanity check.

It's also interesting that the younger the demographic, the more comfortable they are with creating new content.  I suppose this would place older content creators at a premium since they have viewpoints which not many of their peers are publishing on the Web.

Here's my demographic's social participation profile:

I sent this letter to my Congress critters today, would encourage you to do the same:

I would like to express my extreme disappointment in the way the Federal Reserve handled the Bear Stearns insolvency situation recently.  Instead of letting the company and its shareholders take the losses due them because of their poor investment choices, over $30 billion dollars worth of losses have instead been transferred to the American people.  The Federal Reserve has clearly overstepped its Constitutional mandate to maintain price stability and the value of our national currency by bailing out a non-bank entity.  I believe that the Federal Reserve is now in violation of its Constitutional charter and a hard look needs to be taken as to whether that charter needs to be revoked and given to a more responsible entity.

There are almost certainly more institutions in a similar situation to Bear Stearns as I write this, and I hope that we will not see nationalization of their losses as we recently saw with Bear Stearns.  I sincerely hope that Congress will step up and uphold its duty to provide a stable currency for the nation by squashing these initiatives and conducting a thorough investigation  of the events that have already occurred.  My hope is that I can count on you to take an aggressive stance against this blatant violation of the trust of the American people.

Sincerely,
Jason Kolb

Folks, I hope you (or your investment advisors) don't watch "Financial TV" like CNBC for serious, honest reporting and investment advice.  These shows are bordering on outright fraud right now.  I cannot comprehend how the SEC has not shut them down yet.

The following two videos show in black and white the fraud that is being foisted on the American people. 

A couple of days later...

As a point of reference, the only entities that can actually DEPOSIT money in Bear Stearns are hedge funds--if Cramer expects people to believe he was talking about hedge fund money and not stock value I have a nice bridge in Brooklyn to sell him.  I can't believe the arrogance of these people, especially Jim Cramer.  He must have a pretty low opinion of his viewers' intelligence.

For what it's worth, the same people who were saying to buy Bear Stearns stock before it fell by 95% are now pumping the entire financial sector like it's going out of style.  Like I said before, please take steps to protect your savings and retirement.

I haven't been blogging or playing with technology a whole lot lately, I've been too transfixed by the financial markets.  My gut says we're seeing history being made right now, and that this is going to be one of the defining moments of my lifetime--one that will be going into the history books as a seminal moment in our nation's history.  I'm fascinated watching it unfold before my eyes, in a morbid sort of way.

I watched Bear Stearns collapse, and then watched as the Fed put a gag order on Wall Street to save Lehman.  We are extremely close to seeing widespread derivative counterparty failure, which would destroy literally TRILLIONS of dollars--an event that will most likely result in a cascade of bank failures, far more than the FDIC would be able to cover with its current balance sheet.  There are many rumors floating around about UBS being in death throes; they are one of the biggest derivative counterparties out there.  This is a BIG DEAL.

Over the past several days the 13-week US Treasury bill has sunk to the lowest yield in history.  This means that demand for short-term Government debt is the highest that it has ever been.  The yield on it right now is one half of one percent, well below the published inflation rate, which itself doesn't include food and energy, our two biggest expenses.  What this says is that people care more about getting their money BACK than they do return on investment.  Return OF capital is more important than return ON capital.  This Treasury return does not indicate an economic recession, it indicates an economic depression.

I know this is not the kind of blog post that most readers of my blog are used to seeing, but I would feel irresponsible if I did not warn everyone I know about what I'm seeing.  Please, if you have any money in equities or corporate bonds at all, take it out immediately.  The derivative bubble is in the process of popping, our financial system is currently held together with chicken wire and duct tape.  If you can move your 401K money into a treasury fund such as VMPXX you would be wise to do so immediately, regardless of the return.

Why is this happening?  Our credit markets are completely locked up because there is absolutely no trust in the system.  Nobody is willing to extend credit because they're unsure if the party they're lending to will exist the next day.  This is blatantly evident by the fact that long-term bond rates (and mortgages along with them) are RISING while the Fed rates have been FALLING.  The only thing that will fix this mess is the one thing that everyone on Wall Street wants to avoid--that is, restore transparency and honesty to the public markets.  This would result in many of our oldest and most well-known companies going bankrupt (Bear Stearns was founded in 1923), but if this does not happen immediately we are heading towards a 1930's-style Depression.  Not a recession, a DEpression.  One way or another these companies will take their medicine, but the longer they are allowed to thumb their nose at regulators, the longer the credit markets remain locked, and the worse off we are as a country.

Again, I would urge you to sign the petition to Bush and Congress to stop this economic farce and heal our country.  http://financialpetition.org

If this isn't fixed soon, you'd better get used to seeing more of this.

In Malcom Gladwell’s book The Tipping Point, he describes a certain class of people as “connectors”.  They’re people who know everyone, and thus are capable of spreading information and ideas quickly.  Social networks hint at leveraging these personal connections in digital form, but so far have failed to do much with it.

LinkedIn is the only application I’ve seen that really explores this idea from a social networking perspective.  Your network, the number of people you have access to, grows exponentially with each relationship you add.  And if you connect with one of those "connectors" your network will grow even faster (because you become connected to the people they know).

While it makes for an interesting interface and a fun way to explore social connections, LinkedIn--and all the other social networks I've seen--really don't do much with this connection data.  You can ask your network a question or see who’s hiring in your network, but it’s mostly just for ego gratification.

OpenID and FOAF change all that.  All of a sudden people become ACTUAL connectors, connecting together pools of meaningful, rich data that applications can use. 

Two applications which speak OpenID and FOAF all of a sudden have a common data element, a JOIN in SQL-speak.  It's possible because OpenID turns a person into a URI, which naturally lends itself to be used in FOAF.  FOAF is just a list of people, after all.

This is really cool stuff.  It’s automatic data integration across the Internet, using people as connectors. 

This is reason why Kingsley and a bunch of other people like to call the "Semantic Web" the "Linked Data Web".  Potayto-potato, it's all the same to me.  It’s cool, though.  It lets an application traverse the social graph to do its thing instead of being confined to its own network.  It allows an application on one network to access Person C’s data, on another network, by going from Person A to Person B to Person C, and then to their data.

I thought (still think) this was really cool when I finally understood it, and I don’t think many people have an appreciation for the opportunities this opens up.  Although, with the recent traction OpenID has been getting I think it's only a matter of time.

P.S.  This data integration using humans as connectors won't work via proprietary API's or microformats, by the way, because the enabling technology for this is SPARQL, which requires RDF to work its mojo.  Exposing proprietary API's means that you have to custom duct-tape together the data using middleware.