Will the Fed "pause" in August? Yes.

As all sane people had expected, the Fed hiked their fed funds target interest rate by a quarter-point to 5.25% on Thursday. The great uncertainty remains what the Fed will or won't do in August. A lot of people acted quite surprised on Thursday. Some had expected a half-point hike and many had expected that the Fed would "signal" that a hike was more likely in August. The Fed took the wind out of the sails of both of those camps, without actually "signalling" that a pause was a high probability for August. The Fed essentially said "maybe, maybe not", depending of course on the data. My forcast is that inflation will moderate a bit over the next month and permit the Fed to commit to at least a temporary pause as the past hikes work their way through the economy.

Personally, Id like to see another hike to pump up the yield on all the cash that I've accumulated in the past month for my rainy day fund.

Fed fund futures point to 5.50% in August, but enough of that is likely simply a hedge so that we can't be sure how many people are really betting on that outcome. Besides these hedges and bets can shift rather quickly, even overnight.

BTW, Fed Chairman Bernanke is doing a great job and doesn't get enough of the credit that he truly deserves. The economy continues to poke along, neither booming nor busting, and that's what Bernanke's charter is at this stage. Inflation is high enough to cause the Fed to want to push it down a bit, but not so high as to cause any great harm or be a great risk.

-- Jack Krupansky

Almost six weeks at Microsoft

I'm finishing up my sixth week as a full-time employee at Microsoft this week as a Software Design Engineer in Test (or SDE/T or SDET) and still having a lot of fun at it. The work is interesting and challenging and gives me access to a lot of interesting people, technology, and toys, not to mention an interesting amount of money. It's not the same as working on your own or at a startup, but the energy level is still definitely "there".

-- Jack Krupansky

Quarter-point Fed rate hike still likely followed by a "pause"

Some people still feel that the Fed might hike by a half-point at today's FOMC meeting, but I feel that a quarter-point is a virual certainty. I also feel that the Fed will in fact pause after this hike, although it might be a temporary pause pending the evolution of the economy. Fed funds futures are still predicting anoher quarter-point hike to 5.50% in August, but that may be more of an insurance hedge than an outright bet.

There may be a lot of sentiment that a hike in August is "likely to be needed", but my feeling is that the data will probably unfold in a manner that incrementally gives the Fed more confidence to stand pat by the time the August FOMC meeting unfolds. Also keep in mind that we now have 4.0% of hikes whose effects have yet to fully unfold.

The no-brainer Fed move at this point would be for the Fed to explicitly pause after the hike to 5.25% with the caveat that hikes will continue if inflation doesn't taper down by the end of the year.

-- Jack Krupansky

Vermont on the coast?

When did they move Vermont to the coast and New Hampshire inland?

See: http://msnbcmedia.msn.com/i/msnbc/Components/Art/USNEWS/060626/AP_NEflooding.gif

Of course, they may have moved them back since I viewed the map... or maybe they're just floating around in the flooding.

-- Jack Krupansky

Finally moved into my new apartment in Bellevue, Washington

Sunday I finally took possesion of my new apartment in a brand new high-rise apartment building in Bellevue, Washington, which is the next town southwest of Redmond. Actually, it's more of a city. My building is 23 stories tall and isn't even close to being the tallest building in downtown Bellevue. The Westin hotel occupies the first 19 floors of a 42-story building and there are a bunch more tall building as well.

I'm only on the fourth floor, but the building is on a slight hill and gives me a nice view of Mt. Rainier. There are plenty of restaurants and lots of shopping here in downtown Bellevue. It definitely has more of an urban feel, which I miss since I moved out of New York City. Downtown Redmond has more of a "sleepier", suburban feel.

My apartment is so new that there are half a dozen unfinished work items including shelves and installation of a microwave oven.

The rent isn't too bad. I only have a studio, but it is a decent size. It has built-in washer and dryer and air conditioning. There weren't many places that had studios when I was looking around, so I would have had to get a one-bedroom apartment and pay more than the brand new studio I got.

I'm going to stick with dial-up Internet access until I pay off a big chunk of my back taxes. That may be another year, but I'm not into all the video and music stuff that forces many people to be dependent on broadband.

-- Jack Krupansky

W3C RDF/OWL Representation of Princeton WordNet

The W3C now hosts the RDF/OWL Representation of WordNet which is a standard conversion the Princeton WordNet to RDF/OWL:

WordNet [Fellbaum, 1998] is a heavily-used lexical resource in natural-language processing and information retrieval. More recently, it has also been adopted in Semantic Web research community. It is used mainly for annotation and retrieval in different domains such as cultural heritage [Hollink et al., 2003], product catalogs [Guarino et al., 1999] and photo metadata [Brickley, 2002]. It is also used to ground other vocabularies such as the FOAF schema [Brickley and Miller, 2005], as background knowledge in ontology alignment tools and other applications (see http://esw.w3.org/mt/esw/archives/cat_applications_and_demos.html for a list). Currently there exist several conversions of WordNet to RDF(S) or OWL.

I haven't looked at it myself, but this could be a major milestone in providing a starting point for shared vocabularies.

-- Jack Krupansky

Web 2.0: Getting over it

I'm not sure what more I really want to say on this topic, but the concept of "Web 2.0: Getting over it" seems to express a lot of sentiment about how hyped the current Internet and Web technologies really are. The bottom line is that the Internet and the Web are all about continuous and dramatic evolution, so trying to "tag" a specific phase in such a dynamic evolution seems like a really dumb idea. Why not just call it "Web 2006" or "Web 2007" or "Web 2005" and list the developments for a given year or those expected in a coming year. Of course my idea won't fly since I'm always a bit too practical for the flighty "New Media" types.

-- Jack Krupansky

ROI for blogging

I just read some more blog commentary on the ROI of blogging. This suggested a few points to me:

• Rate Of Return (ROI) is a ratio or percentage, not a dollar amount. It's not proper to say "the ROI was $1 million".
• It's not enough to state the dollar value that resulted from your blogging, but you must also be honest about the cost of doing the blogging.
• You also need to be congizant of the lost opportunity cost of your blogging. What other activities might you have engaged in when you were blogging? Might you have made a few phone calls or sent a few directed emails which might have resulted in some big deals and significant revenue? Maybe or maybe not, but be clear about it.
• Stated another way, your time has value, so be sure to include an appropriate valuation of your time in any ROI calculation.
• It is better to focus on the business value to your organization of your blogging. What are the various ways that your organization values activities and time?
• Your blog may have an indirect value rather than a direct financial return. That's true for many non-blogging activities as well.
• Your blog may have a deferred value, so it is important to know what period of time will be used to calculate ROI. Some organizations have only very short time horizons for returns, while others support and maybe even encourage longer-range thinking and returns.

-- Jack Krupansky

ROI

I just read some more blog commentary on the ROI of blogging. This suggested a few points to me:

• Rate Of Return (ROI) is a ratio or percentage, not a dollar amount. It's not proper to say "the ROI was $1 million".
• It's not enough to state the dollar value that resulted from your blogging, but you must also be honest about the cost of doing the blogging.
• You also need to be congizant of the lost opportunity cost of your blogging. What other activities might you have engaged in when you were blogging? Might you have made a few phone calls or sent a few directed emails which might have resulted in some big deals and significant revenue? Maybe or maybe not, but be clear about it.
• Stated another way, your time has value, so be sure to include an appropriate valuation of your time in any ROI calculation.
• It is better to focus on the business value to your organization of your blogging. What are the various ways that your organization values activities and time?
• Your blog may have an indirect value rather than a direct financial return. That's true for many non-blogging activities as well.
• Your blog may have a deferred value, so it is important to know what period of time will be used to calculate ROI. Some organizations have only very short time horizons for returns, while others support and maybe even encourage longer-range thinking and returns.

-- Jack Krupansky

Never hold a Dust-Buster and a cat at the same time

We all know that it is problematic to trust anything we read on the Internet. I stumbled across the following advice and am deeply curious whether there is any truth to it:

Never hold a Dust-Buster and a cat at the same time.

Please let me (and all of us) know if you personally have any first or second-hand experience in such matters and can enlighten us as to the "true truth."

I've never used a Dust-Buster, so I'm curious whether they have a warning label with the above advice.

I haven't checked, but who knows, maybe there is a video on YouTube that either demonstrates or discredits the above advice.

Thanks.

-- Jack Krupansky

Bill Gates and Microsoft

It will be quite interesting to see how the market, money managers, mutual funds, and investors in general respond on Friday to the big news from Thursday after the market close that Bill Gates will be relinquishing more of his day-to-day responsibilities of running Microsoft over the next two years and assuming a part-time role at the company as he spends the lion-share of his time at the charitable foundation that he shares with his wife, Melinda. As a shareholder and employee, I wish Bill great luck and am not worried in the slightest about the prospects for the company with Bill in his new role.

The truth is that Gates has had a much smaller role at the company for a number of years now, especially since Steve Ballmer assumed the position of CEO a few years ago.

As a shareholder, and employee, I don't in any way feel that Bill's shift in focus will in any way diminish the present and future prospects for the company. Steve Ballmer is going strong and can be expected to charge forward as strongly as he has in the past. Ray Ozzie is a very strong technologist who will probably offer even better technological leadership than Bill himself has provided over the years. Overall, Microsoft has an incredibly strong team in place.

Sure, there may be a knee-jerk negative reaction by the cynics, as there always is, but that should never be a big concern of true, long-term investors.

I'd invest more heavily in Microsoft myself, but I've already elected to put 100% of my Roth 401(k) contributions into Microsoft stock. Just this morning I had made the election to reinvest my 401(k) dividends in company stock as well.

This is truly an exciting time. The competition between Google, Yahoo, Microsoft, Linux, Open Source, Web Services, and a zillion small, agile startup companies will end up producing a greater amount of business and stimulate the kind of spending that provides an enormous engine of growth for the entire U.S. economy.

I actually had a ringside seat, literally, for a big part of the show today. Not at the press conference, but at the much larger employee "town hall" meeting where Gates and Ballmer went much deeper into the evolution of the company and its philosophy over the years and what it will be like going forward. I won't try to go into specifics, but just say how Gates and Ballmer emphasized that people have continually underestimated the company and its patience, persistence, and tenacity and the way people at Microsoft "keep on coming." Ballmer emphasized quite strongly that "innovation is our top priority." Needless to say, Gates got a standing ovation.

To be very clear, Gates is *not* walking away from the company, even after the two-year transition period. He will continue to be Chairman and he says that he will continue to participate in projects on a part-time basis. As the company press release states, "after July 2008 Gates would continue to serve as the company's chairman and an advisor on key development projects." His "genius" in the past was not so much in managing the day-to-day affairs of the company of being heavily involved in technical product decisions, but in offering key insight on key issues for key projects at key points in time. Even on a part-time basis, he'll continue to have opportunities to do so even after July 2008.

Gates may have a unique figurehead status, but Ballmer is an amazing character to see in action.

The amazing thing about Microsoft is to see so many young but really smart "kids" who are so extremely capable and so extremely energetic and so extremely motivated to carry on the Microsoft tradition.

-- Jack Krupansky

Eating dogfood at Microsoft

One of the most common words used by many people at Microsoft is: dogfood. Except they mostly use it as a verb. They refer to "dogfooding products" or "helping to dogfood" some new product or a mobile SmartPhone is known as a "dogfood device". A long time ago someone said that software developers "need to eat their own dogfood", meaning they have to use the software they are developing for other people, they have to test it themselves. Somebody just interviewed the CIO of Microsoft who discussed "Eating Dogfood at Microsoft". Take a look at the video:

http://www.youtube.com/watch?v=uUxlX2pfiVM&search=dogfood.

-- Jack Krupansky

Are college students adults?

I read the following curious quote in a NY Times article by Alan Finder entitled "For Some, Online Persona Undermines a Résumé ":

"I think students have the view that Facebook is their space and that the adult world doesn't know about it," said Mark W. Smith, assistant vice chancellor and director of the career center at Washington University in St. Louis.

Huh? What does "adult world" really mean? Do people honestly believe that anybody who is classified as a "student" is by definition not an adult as well? We're talking about people who are old enough to drive and old enough to vote. Driving and voting are not "adult" activities??

If someone drops out of college (I did that once) or skips college entirely, are they magically an "adult"?

What is the hypothetical assumption that students are exempt for the norms of adulthood all about?

Maybe my confusion is merely my own since all I thought about in college was how to get out of college ASAP so I could do some real work and refrained from most so-called "student" activities.

Silly me, I thought the purpose of an educational institution was to prepare students for life in the "real" world. With all of the "school" problems in the limelight, what kind of preparation is actually occurring?

So, my question is: Who is it that wants students not to be treated as adults?

Is it really the students themselves? It seems to me that a lot of students are clamoring to be treated as adults (e.g., participation in institutional decisionmaking). Is it parents who prefer to think of their children as... children? Is it administrators and academics who also prefer an environment in which they are treating people as if they were not adults? Is there too much "control freak" mentality lurking behind the scenes that is fueling this process?

What is this student vs. adult dichotomy really all about?

Why are so many people acting as if the educational world needs to be kept so distant from the "real" world? If there are problems with the outside world, maybe we should focus a little more attention on at least identifyingthem if not actually fixing them rather than exacerbating them with these artificial boundaries.

I have no issue with giving people (students or not) plenty of their own "space", but if so many people feel such an intense, obsessive need to express themselves in such a dysfunctional manner, isn't that merely a signal that there are unresolved problems floating around that should be addressed on there own merit?

I'll continue to ponder the plight of "students" who are in a position where they are about to be plopped out into the "real" world, maybe even against their own will, but internally still feel the need and desire to think as if they were only children. After all, if one wants to be treated as an adult, isn't it reasonable to expect that one needs to get your mind into a "space" where you think and express yourself as if you were an adult?

OTOH, there are plenty of nominal "adults" who think and express and act out a mentalities that are far worse than much of what is being popularized about online communities.

Maybe the core problem is one of a failure to adequately communicate senses of perspective and that "perspective" is never a one-way street. Or at least that's my perspective

-- Jack Krupansky