Sunday, March 12, 2006

High Visibility can help you win the star system

Hollywood's star system pervades global culture. While there are tens of thousands of aspiring actresses in film capitals around the world, only Reese Witherspoon can command $18 million a picture. Whether you sell real estate, defend criminals, lift faces, opine on the economy, or consult to managers, you are among millions of others aspiring to reach the peak of your profession. And why not? In these and many other endeavors, the top fraction of 1% receive a disproportionate share of the rewards.

The Third Edition of High Visibility can help you win this star system. Having just finished reading the book, there were four sections that particularly caught my attention:
  • Chapter 4's Visibility Hierarchy introduced a compelling way to chart an individual's visibility on a two dimensional scale mapping visibility duration (from a day to forever) against visibility reach (from global to international). I found this a useful way to assess one's position in the hierarchy and to consider one's future.
  • Chapter 5's 22 Major Storylines highlighted popular media story concepts such as "success/failure/success" or "the big break" illustrating them with individuals who fit these storylines. This list struck me as a very useful way to brainstorm story ideas for editors and writers.
  • Chapter 6's four basic charisma strategies fascinated me. Detailing approaches such as "The Impressive Stranger" or "Charisma Through Audience Mastery" I was struck by the example of how Scarlett Johansson's performance in Lost in Translation helped her emerge from the pack.
  • Chapter 11's Visibility Life Cycles presented seven standard patterns of visibility which reinforced to me the evanescent nature of fame -- highlighting the need to adapt effectively in order to maintain visibility.

While I was flattered that Chapter 6 began by recounting how I've tried to generate visibility over the years, I found that the concepts and anecdotes presented here offered me new and thought-provoking insights. If you're aspiring to reach the top of your profession, High Visibility is a must read.

Saturday, March 04, 2006

Rocker rocks TheStreet

When stock TV host Jim Cramer pounds the table for stocks, he ought to let his viewers know when the stocks he touts are big holdings of one of’s biggest shareholders.

This thought came to mind after reading about the
SEC subpoenaing journalists from Dow Jones as well as Cramer himself in connection with a complaint about negative stories written about

According to SEC filings, with 4.97% of the stock, David Rocker was one of the largest shareholders of at the end of 2005. While this puts him well behind co-founder Cramer -- who owns 9% -- Rocker is still a significant owner.

What I find interesting is that in the last six months, Cramer has been pounding the table for one of Rocker’s significant investments – Powerwave (PWAV) -- on his CNBC show and on According to SEC filings, with 5.04% Rocker was the largest shareholder of PWAV at the end of 2005 – a position he began building in 2004. Since September 2005, Cramer has sounded a bull horn for PWAV on at least 10 separate occasions, based on my analysis of articles posted on’s web site. Since his first bullish mention on September 12, 2005, PWAV has appreciated 33%.

I’m curious whether Cramer’s bullishness on PWAV has anything to do with Rocker’s. Given his evident
power to move stocks, I think Cramer’s viewers deserve a disclosure of this alignment of interests as they consider his trading advice.

Wednesday, March 01, 2006

Fed to Consumers: Drop Dead!

Federal Reserve interest rate policy is difficult to parse. However, if we look at recent economic outcomes, it appears to make sense to think of Fed policy as frontal attack on consumers.

In setting interest rates, the Fed ignores the impact of consumer-costly spiking energy and food prices. Its rate increases squeeze consumers who used adjustable rate mortgages to buy homes whose prices have increasingly been climbing out of reach. And its rate increases constrict business lending which reduces demand for labor – by cutting expansion capital -- while increasing its supply – through corporate bankruptcies -- a lethal recipe for wage reductions.

According to
recent comments by Fed Chair Ben Bernanke -- the Federal Reserve does not take into account the CPI in its interest rate decisions. Instead it considers the “core rate” which excludes energy and food.

What the Fed measures is not consistent with what matters to consumers’ monthly budgets. For example, consumers are not in a position to exclude energy and food from their personal inflation calculations. Consumers need energy to heat their homes and power their cars and they need food in order to survive.

Since the Federal Reserve does not take these requirements into consideration when setting interest rates, it may tend to underestimate the consumer spending impact -- 66% of GDP growth – of its policies.

It appears that the Fed’s key constituent is not the consumer but long-term bond investors. Bond investors want to be assured that the Fed’s policy will tamp down inflationary expectations which could threaten the value of long-term bonds.

This helps explain why the Fed would pursue policies that harm the consumer whose interests might diverge from those of the long-term bond investor. With so many consumers having purchased homes using adjustable rate mortgages, an increase in short-term rates is likely to raise their monthly mortgage payments – further squeezing citizens who are also paying record energy prices.

The Fed’s interest rate power is a blunt instrument. It is unclear what effect raising the Fed funds rate has had on prices. It has clearly not had much of an impact on energy and food prices. It is probably affecting the amount of money banks are willing to lend since the inverted yield curve makes it increasingly unprofitable for banks to take the risk of lending money when they can invest it more profitably in low-risk short-term government bonds.

Short-term rate increases could drive down wages – a core inflation component which was up 2.4% in the fourth quarter. The cutback in lending resulting from an inverted yield curve could affect business expansion and result in more corporate bankruptcies as banks tighten lending standards. Such bankruptcies would result in layoffs which would increase the supply of labor. This increased labor supply, coupled with lower demand resulting from the capital contraction could reduce upward pressure on wages.

While the Fed does not set out to harm consumers, it appears to me that this is the unintended consequence. And if consumers suffer, so will GDP growth.