Jinn of Quality and Risk

NYT: Deutsche Telekom said today that it had lost 24.6 billion euros ($27.1 billion) in 2002, the biggest annual loss in European corporate history. Last week, Vivendi and France Télécom both posted annual losses in excess of 20 billion euros. There is no rational way a company can lose that much money in one year, without early warning signals and time enough to avoid or at a minimum reduce the magnitude of the losses. These losses are not due to capital investment with corresponding profits in the future. They represent a complete misallocation (and waste) of capital and labour. European economic progress has been and continues to be sharply reduced by such waste. 

The Motley Fool: the balance sheet is essentially a snapshot of a company's financial condition at a single point in time... The balance sheet has three main parts: assets, liabilities, and shareholder equity. Assets are set equal to -- or in balance with -- liabilities and shareholder equity. The funny thing is, though, some assets can be bad and some liabilities can be good. 

After more than a million years of computation by more than 4 million computers worldwide, the SETI@home screensaver that crunches data in search of intelligent signals from space has produced a list of candidate radio sources that deserve a second look. Three members of the SETI@home team will head to Puerto Rico this month to point the Arecibo radio telescope at up to 150 spots identified as the source of possible signals from intelligent civilizations. [SpaceRef] The Planetary Society is the Founding and Primary Sponsor of SETI@home. 

Tim Bray: The weird thing is that there's not much map on the [1790] map, almost all of the area is filled with the legend... Here's the problem: they're suffering for their lack of standardization: the legend has to give the scale of differences in 14 separate units... Notice that these units were sundry local definitions of "mile." Ah, if only today's remaining "miles" and "feet" could be replaced with the universal metric units! 

On Monday all forces poised to attack Iraq switched to Zulu time, an adjustment that usually precedes military operations and keeps everyone in synch with Universal Time Coordinated (UTC). 

How is the US economy doing? The year 2002 saw a lot of growth, much more than 2001. Recently released revised measurements of Q4 2002 show much better results than had initially been reported. The Economic Research group of the Federal Reserve Bank of St. Louis publishes useful information. Here is a highlight from the weekly US Financial Data (2003-Mar-06 issue): real GDP increased at an annual rate of 1.4 percent for the fourth quarter of 2002, 0.7 percentage points above the advance estimate released in January. Real GDP grew 2.9 percent in 2002 (fourth quarter to fourth quarter), compared with an increase of 0.1 percent in 2001. Well, that's very positive news. What about productivity? Output per hour (labor productivity) in the nonfarm business sector grew at a revised 0.8 percent annual rate during the fourth quarter of 2002. The previous estimate indicated productivity declining at a 0.2 percent rate. ... During 2002 (fourth quarter to fourth quarter), labor productivity rose 4.1 percent while unit labor costs rose 0.1 percent. Well, that's great.

To put things in perspective, a 4% annual productivity increase over one generation would lead to more than a doubling of labor productivity over that period. Annual GDP growth of 3% would double GDP somewhat more slowly, in 24 years instead of 18. The US continues to create wealth and increase productivity on a gigantic scale, with each new generation enjoying much higher standards of living than the previous one. Will this be reported in the media?