You may be interested in this presentation that Sequoia Capital (a VC firm) gave to the startups it funds on the causes of the current economic crisis, the outlook for the future, and what startups can do to survive:

(HT: Bits)

A comment on my post about Krugman using the word ‘grim’ too often:

All commercial paper lending has ground to a stop, the stock market is below 10000 and took a 800 point plunge last week. The enormous 700 bn bailout package will likely be too little too late. The Fed just announced it will start buying commercial paper as a last ditched effort to prevent a complete collapse in credit market activity in the economy.

What were you saying again about Prof. Krugman using the grim adjective a bit too often?

Check this out: The NZ dollar vs the Japanese yen. Guess when I exchanged my yen to dollars? Doh …

A funny thing about blogging — often you write about something and then soon after you come across something related.

To wit, soon after my post about lack of macro data, via Flowing Data I came across the G-Econ project, by William Nordhaus and others at Yale. It provides (estimates of) economic data for all 27,500 1-degree by 1-degree cells (approx 100km x 100km) on the globe.

Obviously official economic statistics are not calculated at this level of resolution, so the G-Econ group must have used some kind of estimation technique. Nevertheless, it’s a very important contribution to filling the data gaps.

Check out the Flickr photo set with some cool graphics:

At a conference I went to last week, Ian Foster talked about advancements in computation and how today’s computing power combined with massive datasets are changing the way science is done in some disciplines. He gave a very interesting comparison — a global climate change simulation model versus a global economic simulation model. The climate model divided the world up into a grid of thousands of squares and carefully modelled many characterisitcs of each square and its interaction with the climate. The economic model divided the world up into 10 regions …

An audience member (the governor of the Reserve Bank of New Zealand, in fact) pointed out that the difficulty with doing such detailed modelling in economics is a lack of data. Send up a few satellites and you get a pretty good picture of the weather all over the globle, in real time. In economics, data at the sub-national level are generally unreliable and hard to come by, and we’re still trying to forecast the past six months, let alone know what’s going on in real time.

More on related topics here and here.

Umair Haque, director of the Havas Media Lab, calls out Silicon Valley entrepreneurs and investors for spending time and money on frivolous projects rather than saving the world from economic doom:

There are huge shocks rolling across the global economic landscape. Here are just a few. Food prices are skyrocketing. The financial system is melting down. Energy, of course, is more and more toxic, and costly. We are all, make no mistake, dancing on the precipice of economic cataclysm.

It is the obligation of radical innovators to create new value by solving these problems - or cede capital and resources to those who can.

But today’s revolutionaries are sheep in wolves’ clothing. They’re lost in the economically meaningless, in the utterly trivial, in the strategically banal: mostly, they’re cutting deals with one another to…try and sell more ads. That is, when they’re not too busy partying.

…

Today’s crop of investors and startups are perhaps even more economically autistic than megacorporations. Too many are willfully blind to today’s deepest and most essential strategic truth: that the path to radical value creation isn’t cutting more deals (dude, high-five!!) - but in rebuilding a flawed, false global economy: one which actively transfers wealth from the poor to the rich, from the sick to the healthy, from productivity to cronyism.

I totally disagree. I’m a firm believer in the “no dollar on the table” principle. If billions could be made by feeding starving Mauritanians, then somebody would be doing it. Idealists like Haque will say that I’m not being creative enough, that surely there’s a “path to radical value creation” that can help the poor and please the shareholders at the same time. Sorry, but it seems that there isn’t.

The reason that people are starving isn’t a lack of innovation and ideas. Take the infamous Haitian mud cakes, for example. It’s terrible and appalling that anyone should be reduced to eating mud. However, it shows that entrepreneurs and innovation abound in even the poorest conditions. And in energy, anyone who can invent a clean renewable energy source that’s cheaper than fossil fuels is going to become a trillionnaire. Suffice to say, people are already working on it.

So rather than blaming Twitter and other frivolous things, how can we fix the economy so that people don’t have to eat mud cakes? If you look at the reasons for rising food prices, many of them can be blamed on economic policies (or a lack of policy). If we really want to help the poor, much more can be done with policy changes than by idealistic hot air aimed at Silicon Valley startups.

(HT: RWW)