it should be apparent to all of us that sometimes senior executives, including the chairman, do not fully understand the businesses in which the company is involved.

The financial instruments
now causing such turmoil were not properly priced for their inherent risk and managers were unaware of the integral problems with these instruments. Much of this was made possible by the advanced technology used to devise and distribute these instruments.

I met up with Robert Scoble last night at an Orange party in San Francisco (my photos from the party are here). He brought along his Amazon Kindle and let me and others test it out. It was the first time I’d held one - the Kindle I bought hasn’t arrived yet and my co-editor Erick covered the New York launch.

Anyway, he took video of me giving my opinion of the Kindle (thumbs down). The problem is the UI is completely non-intuitive and the screen is unreadable in medium light (it was much brighter in the room than the video suggests and it was easily bright enough to read a normal book). I was trying to simply pull up the browser and go to a web page and I couldn’t figure it out. The scroll wheel on the side is obviously designed only to frustrate users. And without any sort of mouse, I kept touching the screen to try to get it to do what I wanted (which of course doesn’t work). I also compare it in the video unfavorably to the etch-a-sketch.

I asked Robert to pull up a web browser and load TechCrunch. He did it once and it took so long I asked him if I could video it. He agreed, and did it again. It took him 55 seconds to pull up the browser and enter the TechCrunch URL. I then pulled out my iPhone and did the same thing in 14 seconds.

The Kindle can be given some slack since web browsing isn’t its core function. But web browsing on the iPhone isn’t the key feature of that device, either. Amazon just didn’t design a good device (the user interface, keyboard and screen are all very flawed), and they had all the time in the world to get it right. Hopefully v.2 will be an improvement.

Of course this is just my opinion after trying it out for a few minutes, and I’d had a couple of beers. Don MacAskill wrote up his own review after a day with the device and says its wonderful.

It is now clear that the delusional hope that the severe credit and liquidity crunch that hit US and global financial markets would ease has been shattered by the events of the last few weeks. This credit crunch is getting much worse and its financial and real fallout will be severe.

The amount of losses that financial institutions have already recognized - $20 billion – is just the very tip of the iceberg of much larger losses that will end up in the hundreds of billions of dollars. At stake – in subprime alone – is about a trillion of sub-prime related RMBS and hundreds of billions of mortgage related CDOs. But calling this crisis a sub-prime meltdown is ludicrous as by now the contagion has seriously spread to near prime and prime mortgages. And it is spreading to subprime and near prime credit cards and auto loans where deliquencies are rising and will sharply rise further in the year ahead. And it is spreading to every corner of the securitized financial system that is either frozen or on the way to freeze: CDOs issuance is near dead; the LBO market – and the related leveraged loans market – is piling deals that have been postponed, restructured or cancelled; the liquidity squeeze in the interbank market – especially at the one month to three months maturities - is continuing; the losses that banks and investment banks will experience in the next few quarters will erode their Tier 1 capital ratio; the ABCP and related SIV sectors are near dead and unraveling; and since the Super-conduit will flop the only options are those of bringing those SIV assets on balance sheet (with significant capital and liquidity effects) or sell them at a large loss; similar problems and crunches are emerging in the CLO, CMO and CMBS markets; junk bonds spreads are widening and corporate default rates will soon start to rise. Every corner of the securitization world is now under severe stress, including so called highly rated and “safe” (AAA and AA) securities.

The Energy Department's Office of Energy Efficiency and Renewable Energy funds research at national labs and private companies, and recently offered $4 billion in loan guarantees to 16 clean-tech companies, including three in or near Silicon Valley.

It also helps sponsor trade missions to China and India that have included energy start-ups, such as
































































































































MiaSole, a Santa Clara solar-cell maker.

To be sure, the desire to live in a modern society and to be free of tyranny
is
universal, or nearly so. This is demonstrated by the efforts of millions of people each year to move from the developing to the developed world, where they hope to find the political stability, job opportunities, health care, and education that they lack at home.

But this is different from saying that there is a universal desire to live in a
liberal
society – that is, a political order characterized by a sphere of individual rights and the rule of law. The desire to live in a liberal democracy is, indeed, something acquired over time, often as a byproduct of successful modernization.

The EU’s attempt to transcend sovereignty and traditional power politics by establishing a transnational rule of law is much more in line with a “post-historical” world than the Americans’ continuing belief in God, national sovereignty, and their military.