As a follow up to my last post, today's deluge in Oakland might be going overboard. However, too much rain is never a bad thing in the Bay Area. We could definitely use the extra water in our reservoirs. And if you own a rain catchment system (like in this article), you're loving a day like this. Water is such a valuable resource yet it's one that we often overlook because it's so easily available to us. Want a drink of water? Just walk to the facet and turn it on. Want to wash a little bit of dirt off your hand? Let's run our hands under the facet for a minute. I bet you'd think twice if you had to actually GET your water from an external source and bring it into your home. If you've ever gone camping for a couple of days, you'll know what I mean.

Going back to the above article, I don't understand why ever house doesn't have some form of rain catchment system. The same water we use to drink, wash our vegetables, and shower is pretty much the same water we use to flush our toilets, water our lawn, and wash our cars. All water use is not created equal so why should the same high quality, triple sanitized and tested water go to satisfy all of our uses? The fact of the matter is that water is cheap - today. In the future, we might not be as lucky.

The first rains of the fall came today. I'm not a rain guy but I like the first rains of the season because they wash away all the dust and grit from the long (longer than usual) summer. Now I can finally whip out my sweaters.

I'm far removed from my days as an economics grad but I think rate cuts by the Fed are not necessarily a good thing. Yes, it'll make it cheaper for banks/corporations/small businesses to borrow money but it seems somewhat artificial versus real value/wealth creation. Remember it was this artificial (and arguably fraudulent) boost that led us into the current recession. It's almost like a drug that the economy has grown accustomed to. I wonder if the Dow would have jumped almost 900 points today had a rate cut not been rumored.

But why is the rate cut necessary? As a corporation, would borrowing money at 5.5% versus 4.5% swing you from profitability to a loss? As a small business, if your credit card rate was 15.99% versus 14.99% would that really matter much? And if you couldn't afford to buy a house at 6.75%, you probably won't be able to afford that house at 6.25%. If nothing else, the market correction of the past few weeks should reset everyone's expectations that life won't be as it was during the boom. We should all adjust our spending accordingly and move on to the business of true value creation. Innovate more - work harder. Then the gains you have are real gains and not artificial ones.

If you have the time, This American Life has a great show on the background to the mortgage implosion and how interest rate cuts made by Greenspan contributed greatly to the downward spiral.

A few days ago I wrote about lay-offs and how I was glad we played it safe with our hiring strategy. Today, I read over at Techcrunch that Mahalo is cutting 10% of its staff. The thing I was most impressed with was CEO Jason Calacanis' honest admission that he let down the people who he had to lay-off.

"It’s my responsibility to make this hard decision and I don’t take it lightly. To the people impacted I’m very sorry that I wasn’t able to anticipate this better. It’s my fault and I’m sorry that you’ve got to bear the burden of my inability to better prepare."

 

Contrast this with the somewhat arms length statement Yahoo! CEO Jerry Yang made when he announced his 10% cut.

"affected employees will be notified of layoffs in the next several weeks. we understand that hearing this news now creates uncertainty, but we are moving ahead in a way that balances speed with a clear focus on accomplishing what is necessary to set the organization up for long term success. going forward it will continue to be important for us to make the right decisions to keep our business efficient and strong.

having layoffs is very difficult, particularly in light of all we’ve experienced this year. but we don’t take these decisions lightly, and are committed to treating affected employees fairly, offering severance and outplacement services."

 

In my very humble opinion, Jason's statement had genuine feeling and an admission of failure. It sounded like he really cared about his employees and that he took full responsibility for his actions. Jerry, on the other hand, seemed to take a very corporate approach in his statement. Almost as if he's disconnected from the entire process. In saying that they are "moving ahead in a way that balances speed with a clear focus", I felt he placed some of the blame on the company's poor performance on the employees themselves. As if letting them go will help turn the ship around. Let's not take into account the fact that Yahoo! could have sold itself to Microsoft just a few months ago for more than 2.5 times its current value. Or go back a few years and ask why Yahoo! couldn't counteract the Google threat even as they were sending millions of queries a day when Google powered their search engine. No where did I ever hear an admission of guilt from Jerry even though he is the head of the company.

In all fairness, it's easier to be close with your employees when the count is 50-60 versus 14,000+ and Jerry can't be blamed for all that is wrong with Yahoo! He inherited a company that lost its edge the day they decided to outsource their search technology. Still, a little contrition couldn't hurt.