Truth, Reconciliation and Financial Markets

In April Bradley Fried, former CEO of the UK arm of South African Investment Bank Investec, wrote an OpEd for the Financial Times entitled Mandela's Lessons in Truth for City High Fliers.

The article came to mind this past Sunday morning, when I received an event invitation via email, tagged by the subject line Will the Finance Industry Destroy America and the Human Soul? A day earlier a small group of feisty protesters had begun to gather at the southern tip of Manhattan. Their goal? To occupy Wall Street. Their demands? Ambiguous, but images of Tahrir Square and general frustration with government, the banking industry and the state of the US economy propelled assembly.

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The Sex Appeal of Freight Rail

As President Obama prepares to address a joint session of Congress on job creation and the state of the economy, he would do well to consider casting a light on the freight rail industry in his remarks. Freight rail? Freight rail--a surprising pocket of growth, investment, hiring and innovation in the much-maligned US infrastructure network.

Perhaps unsurprisingly, investor Warren Buffet saw it coming, when Berkshire Hathaway took full ownership of BNSF, the country's second largest freight railway, in February 2010. Since then, the company, like the rest of the industry, has experienced double digit revenue expansion, thanks to rising coal, industrial and agricultural product volumes. Shippers are switching from road to rail as fuel prices and traffic congestion impact cost, efficiency and reliability of highway transport.

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Getting Down to Business

Over the past few months more than one observer has pointed to the cash-rich balance sheets of America's large companies and asked why some of that money isn't being put to use putting people back to work. The inevitable--and not entirely unreasonable--reply is that the tax, regulatory and trade environment in Washington is so muddled that business is paralyzed, unwilling or unable to make long-term commitments in the face of fluctuating and often escalating government-imposed cost overlays.

Earlier this month former Medtronic CEO Bill George published a clear, constructive eight-point list of pragmatic steps for Washington to take in order to get business hiring again. But without keepers of accountability, even straightforward initiatives like George's drown in Washington's political wrangling. Solution: apply positive outside pressure.

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London is Calling

Last week, London, Birmingham, Liverpool and Manchester burned. This week, as the UK cleans up and takes stock, a list of companies, organizations and individuals who should or could be tapped as partners to address the underlying issues and discontent that sparked the flames.

This is a mix-and-match set of resources. In the spirit of BMW Guggenheim Lab and Intel and Vice Magazine's Creators Project, companies at the top of the list can team with individuals and organizations further down to create innovative, community-building, problem-solving events and venues in affected areas. Other models to leverage: pop-up stores and Panera Cares. Importantly: for big thinkers, there's the potential to create programs that travel, using London as a launch pad, moving on from there to work with youth in cities around the globe.

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The Challenge of China

China is a hot potato. In March I addressed the anxiety, complexity and--ultimately--benefits surrounding economic ties with China, specifically investment by Chinese companies in the United States.

Since then, the 2012 US Presidential campaign has officially launched, and public rhetoric surrounding relations with China has heated up. The dialogue was punctuated last week by comments from candidate Mitt Romney in New Hampshire, hinting at the need to reconsider terms on which the US conducts trade with China--partly in response to the very real, ongoing intellectual property issues that factor into trade and exchange with Chinese companies.

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Hacking the City

Michael Bloomberg gets hacking. In a 1995 profile of Bloomberg, the company, Fast Company wrote:

His theory is simple: shove lots of well-paid young upstarts (2,200 employees, average age 31) together in a small space for long hours, give them the best equipment possible, and you'll get magic.

It's fitting, then, that in his role as Mayor of New York he pushed early to engage developers to address the city's, its citizens' and its visitors' needs. Under his leadership, over the last two years New York has opened up its databases and run two contests--Big Apps--challenging developers to use the data to create apps--desktop or mobile--to make the city more usable, livable, lively.

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Global Witness's New Ground

Last week Global Witness--an NGO devoted to ferreting out corrupt use of natural resources in developing countries—got its hands on a management report from the Libyan Investment Authority (LIA) and released it to the press. The LIA is the fund through which the Libyan government invested its oil profits—a Sovereign Wealth Fund (SWF).

With just north of $50 billion in assets the LIA qualifies as a top-20 fund in size. For reference--the Abu Dhabi Investment Authority, the world’s largest SWF, has over $600 billion in assets. To make it into the top-10, an SWF has to be larger than $100 billion—other countries with funds in the top-10 include Norway, Singapore, Saudi Arabia and China.

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Paying Dividends

The Chinese are coming. If you believe recent hype, we're keeping them out--or, on the other hand, if we're not, we should be. Scratch below the surface, the story is--thankfully--more complex.

The Chinese are coming--setting up shop here in the United States--via one of three routes: acquisition of US assets, building new plants from the ground up or opening US retail stores for their own emerging brands. The first of those three paths is the one that tends to create headline anxiety for Americans--as it has in the past, when those arriving were the Japanese in the 1980's or, more recently, investors from the Middle East. In those earlier instances, as today, anxiety was coupled with fears of loss of American economic competitiveness on a global scale. Fears magnify anxiety. The net result: all arrivals are cast as menacing.

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Dynamic Times

This past Sunday morning in Doha, Qatar, Former Brazilian President Luiz Inácio Lula da Silva addressed the Al Jazeera Forum, a gathering of journalists, politicians, analysts, pundits and academics assembled annually for the last six years to discuss the dynamics of power and change in the Arab and Muslim worlds. The theme of this year’s session: Arab World in Transition--Has the Future Arrived?

Depending on your perspective, Lula da Silva is a miracle worker or a scoundrel, the patron saint of Brazil’s ascension to the world stage or opportunistic BFF of some of the world’s top tier despots—Chavez, Castro and Ahmadinejad. A self-made politician, Lula da Silva ran for president three times before gaining office in 2002. He oversaw an extraordinary expansion in Brazil’s economy and took eyebrow-raising potshots at European and American bankers for the financial crisis in 2009, while successfully navigating scandals and the slowdown at home.

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Diplomatic Upstart

Independent Diplomat (ID) is an upstart in a world governed by tradition, long-standing, often opaque codes of conduct and large bi-lateral and multi-lateral bureaucracies--the world of international diplomacy. ID was founded in 2004 by former British Foreign Service officer Carne Ross (pronounced Cahrn) to respond to the needs of a new set of players entering this arena, looking for a seat at the table--young states, political groups and NGO's.

Since launching, ID has worked with the representatives of Burma, Croatia, Kosovo, Somalila, Southern Sudan and The Elders, Human Rights First and The World Wildlife Fund among others, counseling them on effective access to or navigation within the international community. One part humanitarian watchdog, one part Emily Post, one part high powered PR firm, Independent Diplomat's visibility has grown as the number of actors seated at the table continues to increase, magnifying the complexity and fragmentation of the global playing field.

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Simply Brilliant

The price of a barrel of light, sweet crude is up almost 15% in the past week, flirting with $100 for the past two days. Even though Libya supplies less than 3% of the world's oil, the violent turn to the demonstrations there has amplified the sense brought on by events in Tunisia and Egypt that the entire Middle East is prepared to agitate for change--at any price. There have even been whispers that Saudi Arabia could go. Unthinkable a few short weeks ago.

The price spike, the unease, anxiety, rumors--all sharply spotlight a challenge the world sidesteps in calmer times: how to address global dependence on a finite resource that is controlled by a small number of countries--dependence that is becoming increasingly complex as growth continues apace in India, China, Brazil and other emerging economies? And, digging deeper, how to address it in an environmentally sound manner?

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Seeking Balance

I like my news balanced. In this day and age of polarized, agenda-riddled commentary, balance is not always an easy thing to come by. Ferreting out intelligent, even-handed perspectives on matters of importance can turn into a full time endeavor, when soundbites, hidden and not-so-hidden bias rule the day. Which is why, over the last few years, I've turned more and more to sources that feature in-depth, moderated, across-the-aisle conversation--or full on debate--to provide me with exposure to all sides on the issues.

Two of my favorites are the live--and lively--Oxford-style debate series Intelligence Squared and KCRW's radio show and podcast Left, Right & Center.  Intelligence Squared is modeled on a London program of the same name. A good friend is an Advisory Board member, so I had the fortune of attending their very first New York event, held at the Asia Society back in 2006. Since then they've grown, moved to NYU's high-tech Skirball Center, are simulcast on NPR and re-broadcast on Bloomberg Television. They're great.

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Risky Business

On Friday a headline in the Financial Times caught my eye: a day earlier Moody's had announced higher than expected revenue growth for the fourth quarter 2010 and an outlook for another strong year ahead.

This on the heels of Jesse Eisinger's January report that efforts, post-Lehman, to increase ratings agency oversight are quietly fizzling--or at least, stalling out. Portions of Dodd-Frank that were intended to impose greater legal accountability on agencies are currently on hold. Agencies responded to the potential change by refusing to allow their ratings to appear in offering memos, markets seized up, legislators backed down. And in December, in the wake of new fiscal belt tightening, the SEC's budget for the new Office of Credit Ratings was cut.

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Fashion Forward

Late last week Prada announced plans to go public. Rumors had been swirling about an IPO for most of 2010--actually, for most of the past decade. The new twist to the tales told last year was that the Company had decided to list on the Hong Kong stock exchange. And that is, in fact, what it plans to do. This move is either brilliant--or sheer, high-stakes lunacy.

Prada has always been more modern, more futuristic and more willing to take risks--aesthetically, strategically and financially--than other luxury companies. There have been some ill-considered acquisitions and the burden, at times, of an overly leveraged balance sheet. On the whole, however, Miuccia Prada and her CEO husband, Patrizio Bertelli, have done a masterful job of staying relevant and at the forefront of luxury and fashion, while growing Prada from $450,000 in sales, when they took over the company from her family in 1978, to well over $2 billion in annual revenues today.

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Future Perfect

What will the world look like in 2050? This is the question at the heart of Drivers of Change, a terrific planning and brainstorming device created by the Foresight and Innovation team of the London-based engineering firm Arup.

Packaged in a sturdy, bright box, Drivers of Change is 175 cards posing pointed, forward-looking questions and delivering quick hits of data on energy, waste, climate change, water, demographics, urbanization and poverty. Each topic is broken down into five areas of inquiry, with five cards each exploring social, technological, economic, environmental and political issues specific to the subject at hand. If this sounds like it has the potential to be overwhelming or depressing--or simplistic, it's anything but.

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Vital Energy

There's nothing I love more than a maverick. By that measure, Boone Pickens has my heart.

Trained geologist, Texas oilman, vintage corporate raider, 21st century billionaire investor and philanthropist, at 82 years old he's going strong. And for the last two and a half years he's been a visible, dynamic force focused on a topic of vital importance to the United States: energy independence.

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Welcome to emotionalINTELLIGENCE, a collection of observations at the intersection of business innovation, culture, finance, leadership and political economy. I have considered writing on these topics for some time. Thanks to creative new thinking about communication, design, borders and business models, old boundaries are dissolving. Leaders in corporations, non-profits, civic and global communities recognize that their organizations can be meaningfully improved by learning from others' successes and cooperating across sectors. People are talking more. Exciting products, programs, organizations and ways of doing business are emerging as a result.

I am powerfully optimistic about these changes. A few publications, news shows, commentators and websites focus on discussion of the positive trends. But too many continue to practice dumbing down the news, rehashing problems over and over and over again. emotionalINTELLIGENCE is my answer to those old-school commentators.

You can learn more about me here. I look forward to getting to know you.