Powell’s Debut Rattles FOREX Currency Markets

Powell’s first news conference was definitely a switch from the scripted presentations given by his predecessor, Janet Yellen. Despite the difference in style, the message was clear: interest rates are on the rise, unemployment is at historic lows, and what remains to be seen are wage increases followed by an increase in productivity, otherwise, we can expect another recessionary pull back.

What does that mean for Forex traders?

Today we saw the dollar weaken against most currencies. At first it may seem counterintuitive for a currency with a rate increase to fall favor with traders, however, this anomaly is actually a repeat performance from previous USD rate rises. There are numerous academic arguments to support the pull back, however, our favorite is what we have heard from top traders at Goldman Sachs, “it’s just what happens.”.

From a more academic perspective, the 10-year T-Bills at 2.9% are teetering upon a psychological level of 3% where traders and investors believe the US stock markets may stall the longest bull market on record or even reverse it. Their argument is largely supported by the increasing default exposure from emerging countries such as Turkey, which have funded their long term projects with US Dollar denominated short term debt. As rates increase, their dollar denominated interest payments increase accordingly and become harder to pay back. The same is true with US credit card holders. In addition, as US consumer debt levels continue to surge, default levels may reach new levels at home, which could potentially stall the consumer retail engine that represents 70% of the US GDP.

With this unsettling USD backdrop, the GBP (British Sterling) is gaining unexpected strength against both the Euro and the USD. Recent developments between the two Brexit negotiators, Davis and Barnier, arrived yesterday with the usual British pomp and circumstance but in reality only delivered an extension of one year to the status quo. Some progress may have been made on some fronts, but the number of unresolved issues hasn’t changed significantly. Only the final Brexit date was moved to 2020. All of these shenanigans may be negotiating tactics of sorts, but at the end of the day, the feeling one can get from the very strained discussions between Westminster and Brussels is that eventually a referendum will be reintroduced in favor of the ‘Remains’.

Brussels’ negotiating tactics involve a high level of tolerance with little meaningful progress. They are letting this inevitable scenario play itself out. Unfortunately for Britain, when their leaders finally do choose to rejoin the EU (in whatever capacity), they will have gained less for their economy than what they had in place prior to triggering Brexit.

© 2018 Tom Kadala


Have Trump Tariff Threats become a Bargaining Chip for Unilateral Trade Agreements?

Market reactions to Gary Cohn’s resignation as the White House chief economic advisor were swift and uncanny. One can only guess that every Goldman Sachs trader, Cohn’s former firm, were tipped off well in advance of his final decision to resign. The warning probably gave the firm’s traders enough time to prepare a severe sell off once the markets closed. Border line to insider trading, such a move might trigger an SEC investigation, but it’s unlikely. Like the NRA, Goldman Sachs ‘walks on many swamps’ in Washington, …and has for decades.

It’s not the first time that Goldman Sachs comes to Washington for a brief stay and leaves significantly wealthier. Henry Paulson was a classic example of a ‘wolf-in-sheep’s clothing’ during the financial crisis of 2009. One thing for sure, like the well trained traders that they are, Goldman Sachs alum know when to leave Washington just as they know when to exit a trade. Hence, Cohn’s resignation was just another timely departure. In December he achieved a key objective. namely, passing the Tax Reform bill. …and now that all that is done, it was time for him to leave.

Post Cohn, what next?

Intended or not, Cohn’s departure may be part of a much larger Trump/Navarro scheme.

Consider this possibility… What if the steel and aluminum tariff threats were actually a foil to coerce affected nations, which there are many, to request/beg for a unilateral trade agreement with the US? A prime example of this relatively ruthless negotiating strategy is the upcoming NAFTA renewal agreement involving both Mexico and Canada.

Surely politicians are expected to respond with counter protectionist measures and tough talk, but at the end of the day, the underlying message that will continue to resonate the most will be the implementation of a solution that will remove the tariffs completely, such as one that is conveniently wrapped into a unilateral trade agreement.

In essence, Trump/Navarro created the threat that would drive the outcomes they sought.

You may recall that early on during his first year in office, Trump bowed out of the Trans Pacific Partnership (TPP) agreement due to its multilateral structure. He accused it of being opaque and prone to unfair practices. Now with the stroke of one threat, he may very well have achieved his goal of undoing multilateral agreements altogether and replacing them with more transparent and comprehensive deals.

© 2018 Tom Kadala

Did Beau Biden’s Battle with Brain Cancer Change the Course of History?  

What would the world be like today, if Beau Biden had become a cancer survivor?

His father, Joe Biden, would have run for President of the United States and very likely won the national elections in 2016. The barrage of executive orders, the divisive hatred among so many Americans, and the degradation of the highest office in the world may never have come to be.

The Biden’s never revealed the type of brain cancer that inflicted their son. By its complexity the disease might have been glioblastoma, an aggressive cancer that spreads throughout the brain with finger-like tentacles or the more common type called gliomas. Either way, every brain cancer patient is different and developing a tailored treatment for each individual continues to be the industry’s greatest challenge.

I have heard some amazing survival stories where friends and colleagues skirted death one more time after receiving a miraculous drug, cancer treatment, or inexplicable voodoo. But for all the great stories of cancer survivors, thousands upon thousands either live their remaining months at the painful mercy of chemotherapy or choose to meet their maker on their own terms. Morbid as it may sound, I had to ask myself, how come some cancer patients survive, while others do not? …and how can so many customized treatments fail, like that of Beau Biden, when others have managed to become cancer-free well beyond their predicted life expectancy?

A Google search on cancer survivors led me to a tumor-removing procedure and treatment whose statistics surprised me. The study appeared incomplete because, as stated in the footnotes, the cancer patients in this particular clinical study, never died. Ironically, the lack of life termination data left the study inconclusive. Patients who were expected to survive for less than a year were still very much alive, now 10 to 12 years later and enjoying 100% remission. The conclusions from the abstract read like the cure for a common cold and the treatment used, called brachytherapy, was easy-to-understand. Despite the astonishingly high survivability from this clinical study, however, what surprised me most was actually something else.

Brachytherapy is not new. It has been around since the early 19th century. When doctors remove cancerous tumors they carve them out in much the same way that a gardener would when removing a large weed. However, just as in the case of a gardener, its nearly impossible to pull every root out of a weed as it is to remove every last cancer cell associated with a specific tumor. The hidden remnant cells that are left behind become the primary cause for the resurgence of the disease in cancer stricken patients.

To remove these stray cancer cells before they can cause a recurrence, doctors will subscribe some form of radiation treatments, one of which is called brachytherapy. …and herein lies the difference among treatments that really work to cure a patient and those that simply prolong the agony associated with the disease.

Most hospitals will use external applications such as chemotherapy or laser beams to kill any remnant cancer cells after a tumor has been removed. Although effective, these externally-applied treatments also come with formidable side-effects such as loss of hair and extreme debilitation. In addition to these side-effects, the guarantee of a 100% cure has frequently remained elusive at best. Frankly, neither the doctor nor the patient can ever know for sure if every last traces of cancer cells have been completely annihilated.

An alternative approach to external radiation is brachytherapy. Immediately after a tumor has been surgically removed, doctors implant radioactive seeds right along the wall of the cavity. These technologically advanced seeds are custom prepped with dosages of Cesium 131, a radioactive isotope that similar to a biodegradable stitch, virtually disappears after 9 days of emitting more effective killing energy than chemo or beams can. To maximize their impact, these seeds are assembled in what is trademarked as a GammaTile®. …which is no more than a preassembled, mat-like structure that houses the required number of seeds, each spaced accordingly to emit a steady flow of localized radiation.

You might be wondering, as I did, “…why hasn’t anyone written about GammaTile® cancer-curing treatments, if indeed they are so effective?” The pure and unadulterated answer is the cost of the treatment. No, not because it is too expensive, but just the opposite. It is too affordable! A typical brachytherapy GammaTile® treatment runs about 75 to 90% less than chemotherapy treatments and other similar biological therapies.

Big pharma won’t support brachytherapy because they would sell fewer addictive and expensive drugs to insurance companies. Hospitals won’t support it because the number of visits is reduced significantly, and doctors avoid it because insurance companies won’t pay for it. The fact is that a viable cure for cancer using GammaTiles® and brachytherapy has failed to enter the mainstream of cancer treatments largely due to special interests, ironically, none of which seem to involve the better interests of the inflicted patient and their families.

Not all hope is lost. The Barrows Cancer Center expects to approve an official insurance code for Cesium 131 by July 2017, which would at the very least make it easier for doctors to get paid by insurance companies. …a bold step in the right direction!

…the steep price our society pays.
To appreciate the hidden burden our society bears to keep proven cures for  cancer out of the mainstream, one need only ponder the loss of Beau Biden. Just think, what might have happened had he survived his battle against brain cancer with a simple GammaTile® solution. His survival could very likely have changed the course of history.

The question remains, how many more Beau Bidens must we lose before the cure for most common cancers can be treated and supported as just another common ailment?

© 2017 Tom Kadala

Betting on the Brits – …my FOREX-related story

A couple of years ago I was asked to cover a trading desk at a prestigious firm in London. What transpired in the first week was quite humorous, since neither party really knew the other all that well.

During one of our daily banters at lunch break, I asked one of their top traders if it was possible for a random freelance writer, like me, to become an expert Forex trader like him and his colleagues, …in say, less than two years time? They chuckled, but soon the question turned into a friendly wager between us. They were willing to teach me the art of their trade, if I agreed to stay in London for a few months longer. Without any hesitation, I agreed. What I failed to tell them, however, (since they never asked) was that aside from freelance writing, I was also a seasoned programmer with over 25 years experience.

For the next three months, I watched two top traders work the Forex markets masterfully. In the evenings I diligently programed what I had learned into a versatile algorithm. To keep up with the trading lingo, I poured over technical trading manuals, took copious notes on their many trading styles and strategies, and carefully observed their trading behavior under many different circumstances. After a few days in the trading room, I quickly learned how these circumstances could vary widely.

Each morning we met briefly to review global events and discuss trading opportunities. Every meeting derived a different outcome. For example, one morning interest rates moved up in Australia causing investors to dump Euros and buy Australian dollars. The ripple effect triggered a similar outflow in Emerging Markets whose respective currencies sometimes reacted with greater amplitude. Within seconds, my two mentors were skillfully working the South African Rand and the Turkish Lira using Gold as a potential hedge. The Euros that were sold earlier in the day were bought back, all at a precisely calculated, risk managed profit. Later that week, changing oil prices, commodity prices, invasions, trade disputes, earnings, GDP, non-farm payrolls, hedge funding currencies, political elections, and so many other factors including the prospects for a Grexit and Brexit, weighed in. In an unpredictable manner, each event contributed to an uncanny sense of ‘controlled mayhem’ in the trading room.

Despite the daily ensued chaos from the markets, these two cool cats maneuvered skillfully through the maze pinpointing with incredible accuracy, areas with high-probability arbitrages. Like the rails on a train track, their unflinching trading discipline was solid and consistent, day in and day out. They reminded me of two sturdy pillars standing firm against a fierce tornado. It was truly amazing to watch and absorb, not just for what it did for their trading results, but more for the many ways it could be applied to daily life decisions.

Perhaps, my greatest takeaway from the entire experience could be summed up as follows:

“Add clear thinking, risk management, and a disciplined approach to any
problem and the odds for a successful outcome can be greatly improved.”

Simple? Yes, but very difficult to achieve on a sustainable basis, at least for humans, but not so for a pair of fast computers and a cleverly written algorithm. What happened next surprised us both. See for yourself at http://www.ragingfx.com.

So, you might ask, who won the wager?

As it turned out, we both did. …because we had unwittingly hedged our respective bets! They taught me everything they knew, while in two years time, I created an amazing algo that digitized everything they had taught me!

© 2016 Tom Kadala

Should the Obama Administration take Mexico for Granted?

Why is the US Congress always occupied with east-west issues such as with Afghanistan, Iraq, Syria, Palestine and Ukraine, while practically ignoring its neighbors south of its borders (i.e. Mexico)? To place it into perspective, consider the number of times Secretary of State, John Kerry or even President Barack Obama have met with Mexico’s President Enrique Peña Nieto. …maybe once or twice per year which barely compares to the hundreds of stops made in the Middle East alone.

The term ‘shuttling between capitals’ to negotiate trade deals and peace treaties with the US seems never to apply to Mexico or Central/South America, and yet Mexico is the US’s second largest trading partner moving over USD$500 billion in goods and services across its borders. With so much hanging on the balance, especially with immigration reform and border security between both countries, is it prudent for the US to take its neighbors south of the border for granted? …and what can Mexico say differently to place its agenda on a priority list for high level officials in Washington?  

Foreign Affairs Forum
At a recent forum at the Council on Foreign Relations in New York City called, Mexico as a Global Player sponsored by the Foreign Affairs publication as part of a series on Mexico titled, Mexico’s Muscle, Revealing the Strength, the Minister of Economic Growth for the State of Mexico, Adrian Fuentes Villalobos, along with a cadre of supporting experts from both countries, sat on various panels where they proposed the idea of a NAFTA Version 2.0 (North American Free Trade Agreement). This enhanced version of the 1994 NAFTA agreement would seamlessly combine Canada, US, and Mexico into a North American partnership, one based on shared job creation and prosperity building.

Over the past twenty years, NAFTA used up most of its political capital in Washington and depending upon who you ask has rendered mixed results. The Huffington Post, for example, underscores the net loss of 1 million American jobs plus a net US trade deficit of USD$181bn, while Mexican-sponsored research groups show a contrasting view that highlights the creation of 6 million jobs between both countries along with a 500% increase in trade capacity. Despite their differences of opinion, one indisputable benefit was the development of a manufacturing hub for heavy industry located in the center of Mexico.

What was once a sparsely populated territory has now been transformed into a series of industrial parks that when viewed from 30,000 feet high appear organized like the floor of a modern plant. Top multinationals such as GM, Chrysler, GE, BMW, Boeing, Nescafe, DuPont, and Embraer, to name a few, have established a presence in the region with their key suppliers located nearby. As testimony to their commitment and confidence in its future prospects, many companies are continuing to invest hundreds of millions of dollars to accommodate their imminent rapid growth. Foreign investors including global banks have had a key role in boosting Mexico’s FDI (Foreign Direct Investment), which has doubled to USD$35.2bn in 2013 when compared to the year before.

For a country that has carefully mapped this massive expansion and has been responsive to the strategic needs of global manufacturers, one would expect that by all reasonable standards, Mexico’s achievements thus far would have earned it international recognition, and yet, when it comes to members of the US Congress, nothing could be further from the truth. For a slew of political reasons, elected US officials have conveniently stuck to two key issues when discussing US-Mexican relations, immigration reform and border security. With good reason, members of the panel spoke of their efforts to change the dialogue with the US but have done so with little success. The US Ambassador from Mexico to the US, Eduardo Medina Mora, described his personal hidden frustrations as he described his daily reminders to members of Congress on the many potential benefits Mexico can offer to the US. Clearly, the two pending bills have greatly polarized US-Mexican relations, which has resulted in a decoupling between Washington politics and the multinationals operating in Mexico.

The newly elected President Enrique Peña Nieto recognized his country’s political shortcomings early on after being sworn into office and in a series of extraordinarily bold moves pushed through four noteworthy bills to help bring his country closer to a US framework. These include:

  1. An energy reform bill that for the first time allows foreign direct investments to improve the country’s energy portfolio and infrastructure.
  2. A telecommunications bill that has broken a long-held monopoly among cell phone and television operators.
  3. An education reform bill that among other challenges will reward teachers on the basis of merit.
  4. A labor bill that makes it easier for companies to hire and fire employees.

In each case, President Enrique Peña Nieto had to take on powerful labor unions and business tycoons to successfully dismantle their influential centers. His efforts won him praise both domestically and internationally. His ingenuity and leadership earned him the respect from his country peers at the G-20 economic meetings. However, despite President Peña Nieto’s notable achievements, Mexico still has never been recognized as a priority by either the Obama Administration or members of the US Congress. Not all was lost. In response to Mexico’s relentless requests to gain access to high level officials in Washington, the White House finally acquiesced in May of 2013 to form the HLED platform, which stands for, you guessed it, High Level Economic Dialogue. Truly an unimaginative acronym and more than likely a US stalling tactic, the HLED limits Mexico to one annual meeting with cabinet-level officials in Washington.

According to one of the panelists, what Mexico needs is a revised narrative, one that addresses key mutual benefits that elected US officials can pitch to garner the support of their constituents. Just asking the US to change their dialogue away from immigration reform and border security, may not be enough. I believe something more is needed and have taken the liberty to lay out a few suggestions below (see appendix) that could help a Mexican delegation send the same intended message to the Obama Administration but, hopefully, in a more compelling manner.

I would be remiss not to mention the current threat from drug cartels in Mexico and the illegal immigration of Central and South Americans that travel through Mexico to reach the US border. No doubt it is one of the key concerns that weigh on elected officials’ minds and the American people. However, as history has shown us repeatedly, a strong economy is a far greater deterrent than an over-extended border protection scheme. By boosting medical tourism along the US-Mexican border, expanding the State of Mexico’s manufacturing hub, and educating both US and Mexican youth to meet increasing STEM job demand, drug cartels will be forced to circulate elsewhere.  As for non-Mexican immigrants, they should find employment in their own respective countries caused by a spillover effect triggered by NAFTA Version 2.0.

Hopefully the acronym HLED will some day soon be changed to read The North American Partnership or TNAP – (NAFTA Ver. 2.0). There members would agree to meet at least monthly with US cabinet officials. Maybe then, Mexico will know it is no longer being taken for granted.



A Revised Narrative for the Mexican Delegation

In an effort to change the narrative presented at the event, I have listed three key strategic points that on their own merits should help gain the attention of US political leaders.

I. Establish tiered industrial zones within Mexico’s manufacturing hubs that focus on a balanced trade-off between a range of country content ratios of finished products (i.e. US versus Mexican content) and corresponding tax policies.
Currently, the Mexican delegation claims that the US content for products manufactured in the State of Mexico is 40%. If the State of Mexico developed trade-friendly policies that applied favorable tax rates based upon US content, then further  tiered them for companies with lower US content, US leaders would view the gesture favorably and be forced to respond accordingly. For this scheme to work, however, Mexico should maintain a bi-lateral, transparent, third-party auditing process to ensure the policy is attracting the right kind of companies. At the end of the day, the same US companies who enjoy the maximum benefits will become the Mexican delegation’s greatest advocates in Washington. They will do a more effective job selling Mexico’s North American partnership to members of Congress and the American public than anyone else.

II. Open dialogue to develop trade policy between medical tourism in Mexico for US baby boomers in exchange for STEM education assistance for Mexican youth.
Just south of California, Tijuana has become the capital of the world for medical tourism with over 1 million annual visitors who generate over USD$1bn in economic benefits to the area. With the predicted shortage of doctors in the US, the retiring of 77 million baby boomers, and the introduction of Obama Care, the US may no longer have the manpower to take care of its aging population’s medical needs. Rather than leaving this situation to chance, US leaders would do well to help develop affordable pathways for the most common procedures by leveraging the abundance of Mexican doctors. Another potential idea would be to use approved Mexican medical procedural rates as a basis for insurance policy reimbursements, hence giving policyholders real options rather than just high deductibles.

In exchange for Mexico’s cooperation, the US can agree to help develop stronger STEM education curriculum (Science, Technology, Engineering, Mathematics) for its young adults who comprise over half of the Mexican population. Clearly Mexico’s immediate needs lie in educating their youth to fill a growing demand for engineers, whose efforts in turn will also help fuel the US economy, especially if the US content of manufactured products remains around 40% as stated earlier in point number one.

III. Highlight the expected reduction in border crossings over the next 5 years  based on a trending reduction in fertility rates in Mexico and improvements in  job prospects for Mexican youth.
Data shared at the event claimed that by 2020, Mexico’s fertility rates will decline from 2.67 children per child-bearing mother today to 2.2, which is comparable to the US current rate of 2.06 and the ‘replacement level’ of 2.1. The Mexican delegation should circulate these findings along with studies highlighting the reduced need to protect the US border from future Mexican immigrants because there will be fewer interested candidates. The billions saved trying to protect 51 guard posts along the longest border in the world (2,000 miles) could be allocated elsewhere including for launching Mexico’s vision for NAFTA Version 2.0.

© 2014 Tom Kadala

How to Introduce Entrepreneurship within a Young Democracy – (a case study)

During a recent Charlie Rose interview, Christine Lagarde, the president of the IMF (International Monetary Fund), shared her views with a packed audience of international economists in Washington D.C. on how young democracies such as South Africa or Malaysia commonly have fragile dual economies operating in parallel, one run by the ‘haves’ or wealthy, while the other by the ‘have nots’ or the impoverished. The wider the gap between them the greater the chance social unrest will follow, such as what happened in Egypt with the Arab Spring in 2011 and most recently in Brazil 2013. Other areas that could potentially erupt include Ukraine, Argentina, Greece, Indonesia, Pakistan… In fact the list of countries is so long that one might wonder, what exactly could the IMF or similar international financial institutions do differently and can lessons learned from one country be leveraged elsewhere?

To further explore new insights with countries operating within dual economies, I recently led a facilitated discussion with 38 university students at the Universidad del Caribe (UNICARIBE) in Santo Domingo, Dominican Republic. This island is a foothold for over 10 million inhabitants and a micro version of a typical young democracy. My goal was to hear how young Dominicans felt about their dual economy and extract a list of recommendations to pass along to political leaders and international creditors. I also hoped their ideas might offer new insights to other country leaders.

Universidad del Caribe is not your typical university. With over 19,000 enrolled students and 330 instructors, the university covers an ambitious range of degrees and disciplines at their two building complex. Students work by day and attend classes, one to two days per week. Campus spirit is notably strong fueled by an enthusiastic faculty comprised of volunteers, many of whom hold other jobs to make ends meet.

Life for a young impoverished Dominican is a daily challenge. Most will spend their lives operating undetected by government scrutiny in an underground economy where basic financial stop gaps such as access to credit for emergencies or a reasonably priced business loan are rarely accessible. Their greatest asset is their ingenuity and vibrant personality, which shines in much of what they do. Job security does not exist. They earn what they can from odd jobs, pay no taxes, and cut corners wherever and whenever by, for example, stealing electricity off the national grid. Providing for family needs consumes their meager incomes leaving them with little to no savings. In short they have few options within their reach to improve their livelihood.

On the other side of the economic spectrum, the Dominican middle class have their own set of problems. As avid consumers they buy beyond their means and spend much of their time fighting frivolous lawsuits or fulfilling new government requirements. Aside from having to pay income taxes, they are also saddled with higher utility bills required to offset the electricity stolen by freeloaders.

Surprisingly, the number one aspiration for a young Dominican adult is not to earn a college degree or to own their own business but rather to align himself or herself with a political party early on in life. In their minds, the only way to obtain job security is by serving a well-connected political group. Competition for these positions can be fierce, not because of an over-supply of skilled workers, which are scarce to begin with, but more for the oversubscribed pool of politically connected job seekers.

Open positions require a minimum of three years working experience, which leaves first time entrants with no other alternative than to join a political party.  This type of politically-motivated workforce, one based on connections rather than qualifications, tends to create a vicious circle. On the one hand, managers and leaders, also mentors, will send the wrong message to younger Dominicans who will see little value in advancing their own education or training, since the better paying jobs can be won with less effort through political connections. On the other hand, less qualified government officials are less inclined to require professional certifications from contractors to ensure that state-of-the-art services are rendered. The end result is a less competitive workforce.

The upkeep for a politically motivated workforce can become prohibitively expensive for any government. Venezuela and Cuba are two good examples where individuals are forced into political alliances for fear of being denied even basic services. Over time the workforce becomes lazy, and their leaders complacent. To please their international creditors, government officials devalue their local currency, which only makes matters worse with higher inflation rates. Eventually, both public and private sectors become trapped by the weight of their own unwillingness to progress. Adding to the malaise are party leaders who fail to recognize the immense value their Informal Sector could otherwise render with existing resources. Instead they would rather keep a tight lid on their potentially vibrant young workforce who due to their discouragement will enter a life of crime making matters even worse for their government and the rest of society.

With these facts on hand, I asked the discussion group what they thought was the root cause for their dysfunctional dual economy. Some cited a lack of women’s rights as they affect the welfare of the family unit. Others pointed to the criminal justice system for sending hardened criminals back on the streets without offering them a job or alternative form of income.  After a lively exchange, the unanimous vote for the root cause focused on the country’s weak judicial system.

According to the participants, on paper the justice system appears formidable, while in practice, it is virtually spineless. Laws are readily legislated, approved, and published to please voters; however, in the courtroom, these same laws are rarely enforced as written or at all. For the right price, a political leader or powerful investor can influence a judge’s decision to their advantage.

Despite their impoverished status, these 38 student/workers recognized the importance an independent legal system. Participants noted that whenever politicians or influencers are allowed to operate above the law, trust between the government and its people erodes. This same feeling of distrust infiltrates society and its family units creating a precariously, wider gap in their dual economy. This revelation raised an important question.

In a dual economy governed by a biased legal system, what can the government and international financial institutions such as the IMF do differently to create a brighter future for the Dominican Republic?

To counter the gap-widening effects caused by a weak judicial system, the group suggested the formation of a student entrepreneur association based out of the University del Caribe.  Members would join the Association then be matched through an interviewing process according to skills, experience, and interest to a cluster of no more than ten students each. Each cluster would be be guided and arbitrated by a university appointed mentor. At least one member of a cluster would have a specific entrepreneurial venture in mind or a launched startup in its initial stages. Members of a cluster would become the new startup’s board of advisors and help in their varying capacities to further the entrepreneur’s venture. As the venture grows, members of the board of advisors can opt to work for the new entity or start their own venture within their same cluster. The University would act as an independent arbitrator to ensure members adhere to a clear set of rules and contracts.

On an interesting side note, one individual admitted that if a cluster were to help him launch his dream construction business, he would most likely leave the cluster and not return the favor. His revealing comment confirmed the inherent distrust among his peers, which our facilitated discussion found to be primarily caused by the lack of an independent judicial system in the country. His comment re-enforces the University’s role as the cluster’s so called ‘mini judicial system’, one that is independently operated. Initially the process will most likely be an uphill battle but after a few success stories should convince others of the many benefits that can be gained from trusting each other.

Although our time ran out, other questions remained unanswered that could serve for future facilitated discussions. For example, how should the contract among members be drafted and how should the spoils and liabilities of a successful launch be structured to ensure a sustainable business? Of course, securing funding for mentors, garnering support from government officials, attracting outside investors, and designing an eco-system for future entrepreneurs are important topics too. After the discussion ended, the enthusiasm from both the students and faculty was evident by the clusters that began to form immediately among them.

As I listened to their animated voices, I could not help but think how a this two-hour discussion with a sample of prospective local entrepreneurs could potentially change the course of a nation. Hopefully, members of the IMF and other international financial institutions can learn from this case study and consider including a similar cluster program as a funding requirement for young democracies.

© 2014 Tom Kadala

Yes, You can NASA that!

When you need an address, a definition, or information about anything on earth, friends will tell you to ‘Google that’; however, what if your smart device or robot needed to look something up, considering they too have become a part of the ‘Internet of Things’? For them, ‘Googling that’ may help narrow some choices but the binary-like answers (yes or no) that futuristic devices will need to operate may have to come from another source altogether such as a ‘collaborative search engine’, driven and inspired by a half-a-century old institution, NASA. 

What is a ‘collaborative search engine’?

In short it is a search engine that by today’s standards is incomplete; not because a database is missing or links broken beyond repair, but because its primary source of information does not yet exist and is essentially pending discovery. Let me explain.  While Google has become the central source for all known data, (good, bad, and even ugly), NASA is emerging with an alternative search engine concept altogether. Instead of ‘crawling’ throughout the web to organize existing data the way Google algorithms do, NASA is organizing groups of talented individuals all over the world through virtual ‘Challenges’ to help it address a daunting list of unsolved problems whose collective contributions may one day make space travel as much of a business reality as airlines are today. Their global efforts will soon be centralized into a massive collection of ideas that will be in one way or another associated with NASA’s existing space data.

NASA’s Space Apps Challenges
These Space Apps Challenges, as they are called, are huge. Last year’s two-day global event, for example, broke the Guinness Book of World records for the largest ever ‘Hackathon’-like gathering with over 9,000 registered participants representing 484 organizations in 83 cities across 44 countries. At this year’s event, the number of attendees worldwide jumped above 10,000 and is expected to rise further as NASA continues to tap outside its walls for novel ideas, clever approaches, and outright brilliant breakthroughs all from cadres of scattered, talented, and unlikely groups of individuals.

This year one of their city events was held at AlleyNYC near Times Square located in the heart of New York City where a packed house of eager space aficionados of all ages, all walks of life, and every professional talent imaginable converged to inspire and get inspired. In a business-like manner, NASA’s Deputy CIO and CTO, Deborah Diaz, opened the event by presenting details of the institution’s tide-changing decision to post NASA’s gargantuan vaults of space data on the web at open.nasa.gov; …where anyone with an internet connection can access its vast contents freely. Experimental data from the International Space Station (ISS), weather data on Neptune, meteorite real-time positioning, GPS-landscape image coordinates on Mars and so much more are accessible for the connecting. NASA hopes its open-data policy will inspire groups to form organically as they often do at their Hackathons and address many of the institution’s pressing current and future challenges in space. On a side note, Diaz expressed her profound views that NASA’s open-source efforts could one day change the future of global democracies from one of ‘freedom-of-choice’ to one of ‘freedom-of-thought’.

NASA’s Challenges in Space
To help participants place space challenges into perspective, American test pilot mission specialist astronaut, Doug Wheelock, who logged 178 days on the Space Shuttle shared his views about space and space travel with participants during a press conference at the event. According to Wheelock, space is a brutally hostile environment that does not compare to anything on earth. To appreciate his perspective, imagine a place where the sun rises and sets 16 times every 24 hours, and every time the sun shines, materials such as the body of the space station or an astronaut’s spacesuit is subjected to temperatures exceeding 450 degrees Fahrenheit. When the sun sets, temperatures swing the other way dropping to 300 degrees Fahrenheit below zero. Radiation levels surrounding the space station are so high that despite the station’s thick walls, some of the 70+ laptops on board used to perform experiments may inadvertently ‘fry’. In a humble manner, Wheelock told a packed audience that NASA cannot continue its mission to Mars without the discovery of new materials that can withstand wide frequent temperature swings and intense radiation exposures over long periods of time.

Medical issues in space are another of NASA’s imperatives. Wheelock described issues with atrophy in the leg muscles, blurred vision, depression, and even loss of taste, all due to exposure to zero-gravity. Taken for granted on earth, gravity gives our legs purpose, our sight a level horizon to distinguish moving objects, our potential mood swings a sense of equilibrium, and even our mouth active taste buds. Our brains are wired to calibrate our bodily functions based on gravity levels. In a zero-gravity environment, for example, our legs become, essentially useless. In a defensive move, the brain will push blood away from the legs to the brain to allow for recalibration in a gravity-changed environment. Space station astronauts have learned to counter some of these physical anomalies by exercising their legs regularly with bungee cords, for example, but look to other sources for future discoveries and ideas on preventing potential blindness and automating cures for other unexpected and yet-to-be-encountered physical and psychological disorders and ailments.

Challenges in Space Travel
Then, there was the question about space travel; a question that just about any individual young or old would want to ask an astronaut. What is it really like lifting off from earth in the Space Shuttle, living at the International Space Station for months at a time, and taking a space walk? Here Wheelock did not disappoint.

In a candid and unreserved manner, Wheelock described the distinct noises he would hear while walking underneath the space shuttle prior to a launch. He spoke of the heaving and creaking of the massive rocket’s cylindrical shapes, which were brim-filled with liquid hydrogen. He also pointed to the constant clicking sound of the many valves used to control fuel flow. The area was in his own words, ‘its own climate’, with chunks of ice falling and water dripping off the sides surrounded by clouds of hydrogen escaping violently with high pitched hissing sounds. He gazed up at the rocket’s main nozzle knowing that at liftoff its center would reach 6,000 degrees or two-thirds of the temperature of the surface of the sun. Since no metal can withstand such high heat levels, NASA engineers designed a thickness sufficient to prevent the metal from melting completely before its final phase release. With sincere earnest, Wheelock turned to the audience once more and informed them that future space travel requires stronger and lighter materials that have yet to be discovered.

After liftoff a rocket will roll to one side to counter air dynamic forces caused by the shuttle’s stubby wings and to face its antennas toward earth. From the ground the roll looks smooth and orderly but inside, Wheelock admits, ‘it’s another world’. Once airborne the rocket rattles ‘like mad’. The G-forces he experienced are so great that reaching a switch on the controls overhead requires an immense physical effort. The vibrations and gyrations of this metallic beast forging its way against the will of nature causes the vessel to ‘rock all over’. At the earth’s orbital surface, the vessel switches to a liquid fuel and upon entering space reverts to Newtons second law of motion, a state when an object in motion will stay in motion. With a deep sigh of relief, the astronauts are finally cleared for space travel. Their vessel floats gingerly onward into the silence of space.

Inside the International Space Station, a new normal for life on board evolves quickly. Food is tasteless. The air in the station smells like the venting area of a power supply unit. The temperature is a comfortable 70 degrees and the prevailing noise of vents cooling laptops and other electronics hums at a familiar 60 MHz frequency level. The sleeping quarters are slightly quieter, while the exercise room tends to capture the smell of human sweat. Missing in the minds of the astronauts is the familiar earth scents of dirt and grass.

On the few occasions Wheelock ventured on space walks, he liked referring to the space drama film, Gravity  to illustrate his experiences. ‘It’s pretty accurate’, he said. Similar to one of the film’s most suspenseful scenes, Wheelock briefly described his own feelings when he had to release his safety cord attached to the station to complete an improvised maneuver.  For a brief moment as he pressed the button on a joy stick controlling the jet packs on his 300 pound suit (last designed in 1970), Wheelock recalls rotating around to a magnificent view of the earth with the space station out of sight. Images of 2001: A Space Odyssey flashed in my mind as he described his brief encounter of being ‘very alone in space’. With no GPS available to remotely control his automatic safe return to the station, Wheelock turned to the audience and again pointed at more areas where NASA needs help with new ideas and discoveries.

Historically NASA has always fed the industry pipeline for technological advancements. The incredible feats of lifting rockets, placing satellites into orbit, and landing humans on the moon have pushed the envelope on technological breakthroughs. The many derivative applications have created new industries, exciting careers, and a notable increase in global economic standards of living.

In an effort to address a proposed landing on Mars in the next 30 years, NASA is once again taking the lead on reinventing the future of data search engines to be developed by unlikely groups of global talent, fueled by NASA data, and created for machines to interact with other machines. Do not be surprised when, in the not-so-distant future, your friendly robot pauses during one of your voice commands to say, “Yes. I can NASA that?”

© 2014 Tom Kadala