Apple's stock is trading right near it's 52-week high, but DSBPI Market Analysts are considering adding it to our model portfolio because of a recent field trip to the Apple Store on Michigan Ave. in Chicago. Frankly, it took our breath away. It presented technology in its context, organized more by end-user application (video, music, etc.) than by gigahertz and gigabyte -- although the new Apples seem to have their fare share of that stuff.

Admittedly, the DSBPI once ran on Mac and it was a horrible experience, system crashes were the norm and uninspired styling (circa 1995), a function of the Jobless Apple, made the decision to purchase a PC as simple as the Mac operating system purported to be. But the current retail store --and Apple product line-- highlights everything that is good about modern computing, from at home video conferencing to movie editing. And the hardware is so heavily designed that you might want a piece for your home instead of one of those patio fireplaces from SkyMall. Go visit the store, it is an exciting place chock full of seminars and happy people.

It is almost impossible to keep a technology edge in consumer electronics, and for most users that's really beside the point. Apple's new stores bring the magic back to computing; returning the mind to the glory days of playing Zork on your home Apple IIe or making birthday banners on Print Shop.

The DSBPI's next computer might not be a MAC, but it might -- something we wouldn't have said two days ago.

A few posts ago the DSBPI wrote about the space race as an example of a technology developed due to non-market forces. In a different post, we wrote about the election year bashing of China. Today's editorial in the Wall Street Journal tied it together in DSBPI's mind:

"Perhaps we fear that if we don't keep going forward we'll lose the knack and begin the long retrograde crawl back to the primordial ooze. If the U.S. decides to give up that ambition [going to space], sooner or later some other country will take it up - perhaps China."

And the bogeyman returns.

DSBPI loves this quote from the NYT regarding Richard A. Grasso's (head of NYSE) $140mm payday:

"This is a phenomenal, unrisked return for the head of a quasi-public organization," said Charles M. Elson, chairman of the corporate governance program at the University of Delaware. "Its really a staggering sum because it's cash that was never at risk. It's mind-boggling, more of an entrepreneur's fortune and may well be more than the earnings of some of the companies that trade on the exchange."

Question: Has anyone ever ordered from SkyMall or seen anyone order from it? If you owned every item in SkyMall, would your life better or worse (assuming you did not have to pay, even for shipping and handling)?

With Gov. Dean charging ahead on his Sleepless in Seattle tour, and on the brink of breaking Clinton's non-election year fundraising record, one is tempted to feel pity for the the rest of the pack of Dems.

But as Michael Jordan has taught, it's all about Winning Time and saving it for when it really matters. Dean's momentum is undeniable, but it must be noted that he hasn't really been hit yet with any negative spots, and being the front runner too early is often the best way to make yourself a target. The DSBPI loves a good rabble rouser, but questions whether Dean's fundraising model is sustainable: eeking out small change from the heartland while promising big change in the homeland.

Watching Dean on CSPAN.org clearly highlights that he is no Clinton. And remember, Clinton was the Comeback Kid, always rallying from defeat, while Dean has nowhere to go but down this early in the cycle - not an envious spot.

Dean is seeking to solidify his position by running ads on a national scale, an expensive proposition in a race with a dubious first mover advantage. Dean is going all in and he hasn't even seen the flop. DSBPI doesn't think he's holding aces, but is betting on a longshot inside straight. Sometimes it falls, but the odds aint good.

You know it's an election year when pols are building straw men out of foreign nations, seeking to blame economic funk on the likes of China, India, et. al. and slap the current administration for its trade policies with these guys. It was not too long ago that Ross Perot spoke of the giant sucking sound, in that case setting up Mexico as the Piñata for election year blather. Or when America cowered in the face of a pumped-up Japanese threat when Sony bought Columbia Pictures and even Hollywood looked to be part of an Asian contagion.

There certainly is a difference between free trade and fair trade -- particualrly when it comes to labor and environmental issues. But let's not waste time with 80pt. doomsday headlines, we've been there before.

The problem with this whole new global market-based economy is that expenditure is largely rationalized based on a projected return. This predicament is highlighted in the coming demise of the Concord, where the DSBPI can't help but feel that the human race is going back in time, reverting to an age before supersonic jet travel. By now, at least according to the Newsweek magazines we were reading 15 years ago, we should be traveling from San Francisco to Tokyo in 45 minutes via outer space. Instead, Boeing canned even the pokey Sonic Cruiser, which didn't manage to break the sound barrier anyway, because of paltry demand.

What we are missing is an existential motivation for developing technology that doesn't yet have market applications; the prime example being the Cold War space race, where our drive to beat the Russians put a man on the moon. Years later we realized no tangible benefit from going to the moon per se and stopped; but the space race nonetheless propelled industry and imagination at the cost of billions of dollars that would never have been spent if someone looked at an ROI model.

DSBPI would like to highlight the competence of Paul Bremmer, the United States' Man in Baghdad. Undertaking mission impossible, he is unflapping in his determination and straight forward in his speech. In a position fraught with a finjan full of political downside, we think that Bremmer will survive and emerge as a man to watch on the national political scene.

The Israeli retail banking system is the only operation in the world that has managed to succesfully institue the sort of discreet pricing we learned about in economics, where prices are set according to each individual consumer's marginal utility. It seems that everyone here has negotiated their own banking 'package' with fees and services customized to their demands. "I will not pay 50nis a month for checking, I will pay 28 nis." "Ok."

DSBPI's official source for polling data for the upcoming primaries and election is TradeSports and its market in political events. As of today, the New Hampshire primary is tracking to Dean, with Kerry a close second and Lieberman a distant third.

(DSBPI Polimarket analysts are working feverishly on trading strategies going into the primary/caucus season. There will be a lot of loot to be made buying puts on either Kerry or Dean, stay tuned.)

Arnold has released his first TV spot, which is a must watch for any Schwarzenegger aficionado. Like the movie version of "Total Recall" it is hard to determine if this 60-second advertisement is dream or reality.

Particulary interesting is Arnold's word choice and message:

"I am running for governor to lead a movement for change and give California back its future." And the announcer's encouragement to: "Join Arnold, and let's bring California back." (My emphasis.) This subtle repetition of the word "back" seeks to create a linkage between Arnold's campaign and the success of Howard Dean's "You have the power to take our country back" mantra, tagged onto the end of every stump speech. But more important, the "back" phraseology also subconsciously hints at Arnold's most famous movie line, "I'll be back." Thus, the choice of the tagline "Let's bring California back" both evokes the populist Dean (and connects nicely with Arnold's "I want to be the people's governor" message) and suggests Arnold's Hollywood heroics (which bolsters his claim to "work honestly, without fear or favor).

Surreal.

Now that Idi Amin has vacated his Jeddah estate, the Saudi government should change the sheets and paint the walls in preparation for the next house guest: Yassir Arafat. The time is ripe to again seriously consider the exile of Arafat from Ramallah.

Since the US and Israel have chosen a moderate successor, the long held fear that any PA power vacuum would be filled by extremists is mitigated. There is no evidence that Arafat is supporting the current road map policies, on the contrary, he is often a roadblock to progress. A PA without Arafat would be more free to eradicate corruption; be easier on diplomacy in the region as envoy's visting Israel would not have to choose between Sharon and Arafat; and advance an effective war on terror without someone at the helm agitating and instigating.

As part of the Saudi peace plan, the boys from Riyadh should open their doors to an exiled Arafat, slipped into the country under the cloak of darkness as part of a joint US/Israel/Jordanian operation.

DSBPI Entrepreneurial Studies division has come up with the following idea: The Cell Phone Booth. It is the modern day version of the old public phone, soundproof phone booth, except there is no phone in it. People can use the booth to make and receive cell phone calls with no background noise -- at a crowded airport, shopping mall or even at the beach.

Who will pay for this and how much? The group has not yet come up with a business plan, but believes that there are a number of potential opportunities. One is that the booths could be funded by the wireless operators, as they would encourage the increased use of airtime. Another is that users would pay a monthly fee of $0.99 on their cell phone bill for the priveledge of using the booths.

In any case, keep your eyes peeled and ears open for Cell Phone Booths.

Joe Lieberman has launched a website targeted at "Jewish Americans" that encourages them to donate $18 and get 1,800 of their freinds to do the same.

When is Kerry going to start a "Plant a Tree" drive, or Dean going to ask his grasrooters to start selling chocolate pesach lollipops?

DSBPI recently screened the Miramax release of "Comedian," a documentary tracking Jerry Seinfeld's adventure in trying to build a brand new stand-up act after he retired all of his existing material on the HBO special "I'm Telling You For the Last Time." Beyond recommending the flick, DSBPI wonders why more celebrities and public personas don't take a lesson from Seinfeld: quit when you're on top, with your reputation intact. Seinfeld realized that he would never top "Seinfeld." He instead went back to his roots in the Comedy Cellar and Gotham Comedy Club, honing his stand-up craft. Perhaps Arnold could learn a lesson from Jerry. The Bushies would argue that you accrue political (and popular) capital for a reason: to spend it when needed. But for some reason I don't see Jerry running for Hillary's vacated 2008 Senate seat -- he just knows better when it's time to say "goodnight."

The key question surrounding Howard Dean is not whether he'll win the Dem nomination (he won't) but who he will endorse when he bows out. There is little chance that it could be Lieberman, their politics are too far apart and Joe has already gone hard negative on Dean ("He could send the party back to the political wilderness for years to come.").

Kerry has assidiously avoided attacking (so far) the Deanster, and nobely directs his charges at the sitting president. Kerry's campaign website even has a gaudy 'Send W. Back to Crawford Texas for a Permanent Vacation' graphic that smacks of The Onion. Still Kerry is the richest playa in the Senate -- would grassroots Dean send his minions that way?

Gephart has gone hard core Teamster; hoping an 18-wheeler will pull him through primary season as he takes potshots at the other dems for their liberal trade policies. Will Dean toss him a bone?

Who will it be? Still processing.

Is DSBPI wrong on Dean? Does his campaign have legs?

DSBPI Mathematics and Cryptology department has discovered the following interesting relationship between the numbers 1-8. Being that the DSBPI is generaly weak in the quant department, members are encouraged to try to genralize this tidbit into a mathematical conjecture. Credit will be shared.

3*4 = 12 (or the numbers 1,2)
7*8 = 56 (or the numbers 5,6)

Thus: 1,2,3,4,5,6,7,8 are all represented in the above calculation, and in correct order.

QED

DSBPI notes the passing of Idi Amin in Jedda, Saudi Arabia. Idi Amin, best known to us here as a bit player in the Entebbe drama, had been on life support since July 18, after slipping into a coma.

A brutal dictator who the world is better without, it is worthwhile nonetheless to mark his passing by renting the 1977 classic "Operation Thunderbolt" to review Mark Heath's stunning turn as a gregarious Amin. Heath, a native Jamaican, went on to star as Detective Inspector Robinson in the 1985 TV Movie "Paint Me a Murder" and in the 1990 family drama "The Finding." Born in 1940 in Kingston, Heath might be best known for his role as "Ralph" in the 1967 episode of "Dr. Who" entitled "The Moonbase."

As technology becomes more and more reliable, we increasingly choose to rely on it. This is a natural relationship -- but is doomed to chaos as we humans put 100% faith in equipment that is nearly, but definitely not, 100% trustworthy. Telecom switches are supposed to maintain 'five nines' reliability; that is 99.999% uptime. The concern, however, is that as users we tend to ignore the negligible chance of system failure, so much so that any breakdown (no matter how theoretically remote) has a much greater impact than statistics would predict.

It was clear after the attacks of September 11 how reliant our global supply chain is on 'just-in-time' processes; where any disruption in the chain (let's say, no international flights) could reverberate through production floors in record time. But we should not ignore our personal supply chains -- and how as individuals we've also configured ourselves around a technology-infused just-in-time lifestyle. Whether its relying on ATMs for just-in-time cash, or cell phones for just-in-time plans: "Where are we going to meet?" -"I don't know, I'll call you when I'm there." Or online banking for just-in-time bill paying via electronic fund transfer. Or the 24-hour store of just-in-time milk.

Modern cars are much more predictable than their predecessors of twenty, thirty and forty years ago -- but when cars broke down more often, drivers were better prepared. Today, we don't need to know how to change a tire, we just call roadside service from our cell phones or OnStar. In fact, we don't even need to know where we are going, because it's right there on our GPS.

Any shocks to our personal supply chain can be, at least, an inconvenience and, at most, a life-threatening incident.

Our increasing reliance on technology has not gone unnoticed by the purveyors of backup systems, emergency storage recovery, remote data centers, etc. To that end, DSBPI suggests that when computing any workforce efficiency metrics demonstrating the ROI of enhanced technology, that investments in backup/disaster systems be treated as a negative coefficient.

Obviously, the spark for this thought was the mighty blackout of '03.

DSBPI hears of NYC blackout on arrival in TLV. If this were The Matrix, this would be the first strike of the machines against man. As Councilor Hamann (hmmm) said to Neo on the Engineering Level:

Hamann: ... down here, sometimes I think about all those people still plugged into the matrix, and when I look at these machines I ... I can't help thinking that in a way we are plugged into them.
Neo: But we control these machines, they don't control us.
Hamann: Of course not. How could they, the idea is pure nonsense, but it does make one wonder just what is control?
Neo: If we wanted, we could shut these machines down.
Hamann: Of course, that's it, you hit it, that's control isn't it? If we wanted, we could smash them to bits. But if we did, we'd have to consider what would happen to our lights, our heat, our air.

DSBPI in Bangkok airport, at first is intrigued that one can be in an Asian airport and trade the Nasdaq; then wonders why this is a good thing.

Interesting article in CFO Australia magazine about credit derivatives. Ok, not that interesting. But highlighted how the credit derivative market reacted very early to Enron, etc. highlighting again the efficiencies of markets as regulators and rating agencies lagged.

DSBPI thinks about Federalist Paper Number 65 today as all the talk of impeachment and recall swirls. How our founding fathers predicted the politicization of impeachment and how the Republicans during the Clinton era so cheapened its definition (Low Crimes!) that it can be sprayed about by the current pack of dem prez wannabees like deet in a New Hampshire forest

DSBPI wonders what it says about a society that sends its criminals to a temperate paradise like Australia versus some place like the salt mines of the Gulag.

As new media and video becomes more of a staple of the contemporary art museum, DSBPI wonders if there is someone in charge of 'turning on the art' in the museum. "Oh crap Jim, you forgot to turn on the art on four. People are wandering around looking at blank video screens and think that someone is trying to make a statement."

Hong Kong airport is the model of a transition from the Modern Airport to the Post-Modern Airport. The modern airport, see Denver International, is airport as shopping mall; the post-modern airport is airport as air-strip. Hong Kong is definitely a serious shopping destination - rumors on 60% off Ferragamo ties may be true - but the airport also allows full check-in at various locations throughout the city and a high-speed train to the airport itself.

In the future, check-in should only be done in-city, with all the shopping done there. Trains will take passengers quickly to a spartan departure area and runway, wherever that might be.

DSBPI further convinced that Morroco-chic will continue to grow in hipness. Burkah's on the runway in six months; mint tea in Starbucks coming soon, Vente. It is a global phenom, from Wollomoloo to the West Village.

Terrorist attacks in Israel today. What does this mean for the Hudna? DSBPI continues to believe that the terror groups will not declare an end to the Hudna by word, but by deed.

DSBPI today uncovered some myths about Australia.

The most stunning myth is that Foster's is Australian for beer. In fact, in this country that takes its beer pretty seriously (a radio talk show held a heated debate surrounding the country's drop out of the top 5 per capita global beer consumers, and how to make it back up the charts), Foster's is truly Australian for 'beer we export to the rest of the world and do not serve anywhere in the country." This has made the DSBPI question if Corona is really 'the number one Mexican beer' and if they really drink Red Stripe in Jamaica -- or Vodka in Russia.

Another myth punctured today is that everyone Down Under uses the greeting G'Day Mate to say hello. So far, the DSBPI has been greeted just once in that manner -- by the propieter of a surf shop in Bondi. This leads us to believe that G'day Mate is this continet's equivalent of Wassup.

Why is there so much gun violence in the United States, asks Bowling for Columbine - recently screened at the DSBPI. It's not the number of guns (see Canada), it's not the history of violence (see Germany) and it's not the media industry (see world), says the docudrama. Of course, the film doesn't suggest that it is a combination of these things, but OK.

DSBPI's recent travels are influencing the following thoughts:

The US, as superpower, super-capitalism, super-charged American Dream, make-it-or break-Hollywood, If-You-Can-Make-It-Here-You-Can-Make-It-Anywhere, PowerBall $300mm lotto jackpot, home of the brave - may be a place where expectations are so high that 'failure' is that much more painful. That the perception off not advancing (whether it is the 7th grader in Columbine, the gang leader in LA or the corporate VP in Long Island) is so outrageously acute that the response is equally disproportionate. As a rocket propels itself upwards to greater altitudes, more and more exhaust and debris is ejected. Perhaps there is a reason why the US is both the world's capital of innovation and capital of violence?

In Germany there is a mandated 35-hour work week. In France, the population goes on holiday for the summer. Neither of these are conducive to building the next Yahoo!, Google, Cisco or DreamWorks, where 24-hour commitment to clocking faster processing speed is the rule. But European companies don't talk about work-life balance as a selling point for recruiting ; it is part of the cultural fabric. They may lose some of the best minds because of this as talent migrates to greater opportunity, but these societies have made a conscious tradeoff between retiring fat and simply making it to retirement.

Perhaps the dogged pursuit of Gordon Moore's Law has created fodder for the sometimes maudlin camera of Michael Moore.

While the DSBPI certainly does not deny successful capitalists their due, it stands to reason that things will only gets worse as those who succeed find better ways to wall themselves off from the unwashed; behind the tinted windows of the Cadillac Escalades, ensconced in Buffet's NetJets or locked behind the gates of custom built communities - destroying even a market driven, enlightened self-interest in the world around.

What about Asia? Isn't that a center of innovation without the violence found in the US? DSBPI posits that the lax regulations and custom surrounding sex has something to do with this anomaly.

This piece is still in the think tank.

DSBPI flipped to back page of Qantas inflight magazine this morning and found the standard route map, but instead of North American being at the map's center (as usual) Australia was smack in the middle of the world. Sort of shifts one's perspective on geography. DSBPI hoped, however, that the pilot was using the "correct" map to navigate the aircraft.

DSBPI took the day to explore first hand the intellectual property issues facing Hong Kong (and mainland China by extension). For sake of research our analyst was able to procure 7 DVDs for approximately US$15 (including Wall Street and Back to the Future). DSBPI is a firm believer in the efficiency of markets (and consequently, not an objector to the Pentagon's proposed futures market for political events), yet we note that markets must be governed by society's sense of right and wrong -- laws enacted to protect the market participants. Without these rules (i.e. IP rights, for instance) creative 'content' becomes worth just incrementally more than the cost to distribute it; on the Internet this is near zero, in a sweaty Hong Kong shop, it's two bucks or so.

Today's DSBPI trip into HKG further solidifies the Institute's belief that the world is continuing on a track toward polarization between those who are based in cities and those who live in rural areas. As it becomes increasingly inefecient to manufacture or produce goods in cities, those who enhabit the metropolis are increasingly members of the service industry; either employed as a mobile knowledge worker, or catering to the class's whims. As these 'non-sticky' resources are moved about the globe (as consultants, project managers, lawyers, bankers, architects, etc.) by their employers (or on vacations) they quickly find that they have more in common with other denizens of the world's gothams (culture, food, clothes, entertainment) - more in common than even those people living 20 miles from their 'homes.' The spark for this story: DSBPI met a dude today on the Star Ferry who works at Goldman trading equity derivatives.

Flight is being called.

DSBPI embarking on Asia/Oceana international policy tour. Meanwhile, now at TLV airport on way to Hong Kong. Saw picture of new mall in Ramallah in local press. First thing that struck DSBPI: no security guard out front.