How much carbon is around to effect massive climate change?

I read a news report today about Barack Obama easing permissions for offshore drilling of oil and gas. I expect the usual backlash of of various interested parties regarding this news. I see the point from both sides, those vehemently against any kind of fossil fuel exploration and of the USA trying to protect its national interests and lessen its dependancy on foreign supplies.

I watch the third BBC episode, Tropic of Cancer and listened to Steven Reeve talk to government official from Oman about how they must invest in tourism because one day the oil will run out. This reminded me of a talk I heard many years ago about how demand and supply will naturally protect diminishing resources like rain forests.

I suddenly got this thought.... is there not a finite supply of carbon on the planet? The carbon that was collected by the plants and animals which in time turned into the fossil fuels we have today had to come from somewhere.

How much carbon in various forms (e.g. CO2 and Methane) can our environment cope with? Once we have consumed all fossil fuel reserves we will have a plan for alternative energy, demand and supply will dictate this in some shape or fashion. At that point our environment will be able to recover (unless we have found another poison).

The question is: will we have the luxury to witness this? I still don't really have a strong personal view on the full extent of the carbon impact on our environment, largely due to all the contrasting opinions. What motivates me is the enormous amounts of waist in our modern day lifestyles and I feel this has a far greater general impact on the world around us.

So is there enough carbon around to change our environment enough to seriously threaten our existance? I really don't know and I would love to hear your views.

Brilliant! Use Skype for 0800 calls

I had a problem today with my telephone handset as it was not ringing. I also had to make calls to a few utility companies and you know how long you can be tied up on the phone!! I used the callback feature from on of the utility companies an got onto a call with the next one. So between calls and the fact that my phone was not ringing I missed all of them as wasted 2 hours.

I just hate spending time and occupying my phone lines while on hold with 0800 numbers. I then got an idea to use Skype and googled to see if anyone knew about calling 0800 numbers at discounted rate or for free.

Well you can and for free! I found out that people from France, Poland, the UK, and the U.S. can call 0800 numbers in their respective countries for free. I tried it and it works ... you don't even need to by any Skype call credits.

So if you are at work, don't want to use mobile phone minutes or don't want to clog up your phone lines try Skype for 0800 numbers!

Twitter vs Slashdot

I was recently annoyed with the slashdot web site. I posted some commentary and a link to a new business' web site I came across and one of their editors market it as spam. I also recently observed that since I had been using twitter more regularly I only visit slashdot 2 to 3 time per week as apposed to multiple times every day.

I then googled for twitter effect on slashdot. The result was very interesting and as usual I got side tracked by the results. There are many references to "twitter effect" mainly centred around the impact on a web site when a link to it takes off on twitter similar to the digg effect or slashdot effect.

My guess is that many previous news/web link aggregation and dissemination sites have been replace by social networking sites like: Twitter, Facebook and LinkedIn.

I still frequent a few news sites and blogs directly, but I find that twitter is playing a larger role in me keeping on the pulse of what is going on right now. It makes me think of the impact the Internet had on newspapers as newspapers found themselves almost constantly out of date. Internet news sites are now more repositories of information than the source of news.

How has Twitter influenced your Internet interaction? Do you rely less on RSS feeds and previously popular websites?

How to Virtualize Your Workforce

I came across this great article from wikiHow on "How to Virtualize Your Workforce". It covers some obvious and not so obvious steps to make this a reality."

"The virtualized workforce (also referred to as teleworking or telecommuting) is a very hot topic but is sadly underused. Often, management is unaccustomed to managing remote employees, so there is a natural fear of reduced productivity. The movement into remote management can be disconcerting, but it has many significant rewards, both immediate and long-term. With the proper application of good management techniques, you will see an improvement in overall productivity, a decrease in attrition, a reduction in corporate expenses and a massive increase in skill set availability. Your company can demonstrate leadership by example, as well as benefiting employees, your local community, and even the environment."

Read the full article here

At-home mums (and dads), a latent workforce

Working around personal and family commitments and preferences has always been something I have often thought about. There is a large part of me that likes working the usual 9-5 in an office with others. I would say that I like the social interaction and the routine. For many others this is often just not an option for them.

I have different perspectives to this got from various experiences I have had over the years. For part of my teenage years, my mum did freelance book keeping from home for several clients which then later turned into a proper accounting practice. Soon after university I ran a computer bureau for a large accounting firm where all of the computer operators where woman and where I became aware of the juggling act women had to do when deciding to start a family.

After my wife and I had a few children this issue became real to me, until then it was something that affected others. We often have the opportunity cost discussion around my wide going back to work and how would we balance all the she things that she has to do and would like to do with making time available for work and the logistics of going out to work.

After finding myself a casualty of the credit crisis, I started a consulting company servicing the industry I have been working in for some time. Some of the services I offer are assisting business to make use of various outsourced technology solutions and building better operational processes to bring costs down and make it scalable. I delve into areas of cloud computing and other virtual computing concepts. This further leads of to implications like how do we define the concept of where and office is, what should constitute an office etc.

In the news and online there is a convergence of peoples live style choices and available technologies which will allow for remote and flexible work arrangements. What interests me is not how this complements the existing work from home, set you own hours make yourself rich business models. Rather how traditional bricks and mortar organisations can change to benefit themselves and their employees.

I am sure there are many studies centred on this and all sorts of data available. But what I see in the solutions I advise and what’s going on in companies around me is very exciting. I would love to get involved with a project that will invest in an infrastructure to enable people to working remote and across all time zones. This is more than what technology can allow; I see this agency of people all with different skills willing and able to do all manner of tasks on their terms.

If you are involved in making this happen right now, or are purely interested in the topic or have information to share, please leave a comment or get in touch.

Software licensing and support in the Cloud

"For the purpose of this discussion let us assume that cloud implies virtualisation."

I posted similar "questions" on other forums, unfortunately without much response.

For a moment lets ignore all the security issues and look at how software licensing and support agreements are impacted on by virtulisation and cloud deployments? I work in the Financial services arena and many software vendors do not officially or unofficially support and sanction the running of their software in virtualised environments.

They give many reasons for this. The main ones are unable to QA stability and performance under virtualised environments, underlying components not supported e.g. databases other software libraries etc,etc,etc. Bottom line it is going to cost them to much to support in the short term. But in the long term I think that they will loose customers.

I know there are performance considerations in virtualisation particularly with trading systems where often high data throughput and low latency systems are a prerequisite. I do however believe there are suitable solutions for this. People just need to think a little out of the box and put conventional wisdom aside.

I imagine that there are a fair number of people who face licensing and support issues around virtualisation, please share your thoughts and experiences by leaving a comment?

Update:

I have found these interesting and related links:

• Cloud Computing's Other Achilles' Heel: Software Licensing
• Clouds Looming for Software Server Vendors
• Is cloud computing a solution for software licensing woes?

New Quantitative Trading Platform

One of the coolest ideas I have seen in a little while. I know many people that are working on their own quantitative trading models, and they all have various problems.

• Actual knowledge and skill to do this effectively *duck*
• Access to quality market data
• Adequate technology to run the models and for back testing
• Lack of capital to trade on a large enough scale

Well.... now there is a solution Algodeal. They provide a platform for your to run and back test your models. If they like it they will give you capital to run them and share in the profits. what more can I say, now take a look for yourself.

Technology and Vendor lock-in: problem or not?

For many years this was a concept that I was not that phased about. Roughly 7 years ago I remember a client deciding on two technology vendors to supply them with trading system software. One of their primary reasons was that they did not want to be exposed to a single vendor. I started looking around at what various lock-ins people had: operating systems, databases, hardware, software and outsourcing suppliers.

So is this a problem and something to be avoided?

For many out there the changing of their technology or systems isn't anywhere near their radar. For these I would say even if they were exposed to some or other lock-in it is of no immediate consequence. I typed vendor lock-in into a popular search engine and and saw the topic had it's own entry in Wikipedia. This note is not an in-depth analysis on the topic but to offer high level commentary that will hopefully invoke thought and debate on the topic.

I offer technology related consulting and services to hedge funds and from this I recently started thinking more on the topic of lock-in. To me lock-in exists where there is a desire for change with an inability to do so due to uncontrollable factors. The reasons stopping change could be many: cost, time, ability and limited alternatives.

I will touch on platform lock-in (you can define what platform means to you), I will also look at the hedge fund world. More recently in my experience this is where I have seen real examples of lock-in through witnessing many funds evolve from start-ups to large complex businesses and also funds that have had to go through extreme and sudden change. In my opinion one of the largest contributing factors is the strong desire for hedge fund managers to outsource none core activities e.g. IT.

Firms from time to time find themselves in a position where they decide to bring IT back in-house or would like to switch vendors. They find themselves tied to long term contracts or find that business continuity risk due to cost and the complexity of switching. They feel trapped.

I would love to hear your thoughts to further this debate. Will utility/cloud have a computing offer solutions, more choice because of Software as a Service (SaaS), would this situation never risen had the fund managers access to technology advice from someone who understood their strategy and their business objectives?

One thing I would offer up here is that the landscape for hedge funds and businesses in general has changed a lot over the past two years. Traditional solutions and approaches are to restrictive, we are in a period of rapid change and long term uncertainty. Whatever we choose and whatever direction we take, our watchwords moving forward must be adaptable, flexible and scalable.

Larry Ellison on cloud computing

Today I watched a video of Larry Ellison's view on cloud computing...fantastic! It is both interesting and entertaining. So here it is for you to enjoy too.

Sybase 15.x and Ubuntu

I forgot to post this some time ago. I had been battling along with numerous others to get Sybase 15.0.x running on Ubuntu 8.40 and later. The main reason for this is that the GLibc support required for Sybase is not supported in the more recent Linux distributions. There are some workarounds and hacks to get there but the most stable solution is to use 7.10, which is not actively supported or RHEL 5. For me the 7.10 was not an option and to move away from Ubuntu was something I regretted whole heartedly.

Then solution came! Quite by accident I discovered Sybase had released 15.5.x, I downloaded the developer version and what do you know, perfect first time install on Ubuntu 8.4.

There may still be a few issues as I don't know whether Sybase 15.5.x is commercially supported on Ubuntu and I do know a number of commercial applications have not yet officially been test on Sybase 15.5.x.

But if you like me have a need to run Sybase on a recent version of Ubuntu, look no further. Sybase 15.5.x solved my problems.

If you know of or have heard of any official policy or statement regarding Sybase and Ubuntu I would love to know it.

Hedge funds face altered landscape

I read this article by Dan Hubscher in the Hedge Fund Review, about how hedge fund managers have had to adapt their business strategies. This has a direct impact on the level and sophistication requirements of their IT systems.

"If more plug and play technology were made available, especially on a hosted basis, more quant managers would turn to this method of technology, allowing them to concentrate on what they do best."

This sentence is what got me thinking. Technology over the past few years has got more moduler and these modules have got easier to integrate into a larger solutions. This has cause a feedback loop resulting in even more options at a faster rate driven by companies such as Google and Facebook, technologies around Open Source, Web 2.0 and Cloud Computing. There is a greater resurgance of innovation at present and smaller players have the ability to influence on a much larger scale.

The same is also true for Hedge Funds and their use of technology. What was previously considered too big, complex and expensive for smaller funds is now in easy reach.

read the full article

What is desktop virtualisation?

I listened to a very interesting and informative presentation from Fraser Kyne of Citrix systems. It was a relatively vendor neutral overview of desktop virtualisation technology and how it is evolving. You can get it here, http://bit.ly/c5COCT.

Like most things in technology you seldom if any find a solution that's one size fits all (except for Python!), the same is true here. It you are in the middle of or intend kicking off a virtualisation project, I would suggest you take a listen to this.

2009 what a year?

I heard this recently and it got me thinking... what made 2008/2009 so remarkable?

I started my career in the early 90's, is was also a time of big changes. PC's were common place in the workplace and truly portable laptop computers were becoming standard issue to professionals (mine was a 386 sx with 2 MB of RAM). Information Technology was making its mark and the world was getting smaller. The mid 90's the Internet was becoming ubiquitous outside academia and the Dot Com boom was truly underway. The Asian crisis in 1997, the Russian crisis in 1998... I remember industry commentators saying that risk management would change forever. The turn of the millennium was a bit of an anti-climax with respect to the year 2000 bug. Then the Dot Com bust, followed by the telecoms bust followed by the rise of the hedge fund.

So was 2008/2009 and the global credit crisis so remarkable ..... in the context of the past 20 years I would say not really. it is more like a consistent trend, the volatility of the rate of change in our daily lives has gone wild. Today's option traders must must have nerves of steel! No longer can you make tomorrow's decisions based on yesterday's rules.

Grid Computing : How can Hedge Funds benefit?

There are a number of articles on the subject of grid and cloud computing. There’s also a lot of attention on companies like Amazon Web Services, Google, IBM, Sun and others who provide services in this space. For the purpose of this article grid computing is defined as the process of distributing a single or multiple tasks across many computers at the same time. The premise being that something can be done N times faster running on N computers simultaneously. Let me take you though my thoughts on how a hedge fund can benefit from grid computing.

This you may think is for the domain of academia, research, big banks and others with the resources to build and manage these super computer networks. At present there are many applications of grid computing and it’s nothing new. It’s been around for as long as someone could connect one computer to another and do something in parallel. Your everyday life touches on things that at some point during their development has benefited from grid computing; weather forecasting, medical research, special effects in movies, the tread pattern on your car’s tyres and many more.

To bring grid computing closer to home let’s look at an example of a hypothetical hedge fund that employs around 30 people. From the start, they outsourced as much as possible to their Prime Broker and Administrator. After their first year of trading, they decided to take some of their processes in house for greater operational control and to implement a portfolio management and risk system for which they purchased three additional servers to accommodate their new systems’ processing and reporting.

With greater control it was now possible to extract and process a myriad of new reports and analytics resulting in the speedier processing daily processes and management felt better informed for operational and investment decisions. However in the background an invisible cost was starting to grow. As part of the systems implementation they employed an extra person to take care of the day to day overhead of running the in house systems. This person was assisted by existing IT support staff as well as some ad hoc support from the system vendor. Due to an ever growing transaction volume, transaction history and more reports to produce, the end of day process was taking 3 hours to run compared to the 30 minutes when the system was first implemented. This did not matter that much as they had the whole night to schedule and run these processes.

Throughout this time the businesses demands on the IT system grew; for example the company email database was growing and more and more documents stored on the central fileserver. There were now clear signs of growing pains. Disk drives regularly filled up, the database server’s performance slowed down. This all resulting in longer processing of end of day and slower responsiveness of the trading system’s front end applications. Much of this overhead was initially swallowed by the company and written off as the cost of having one’s own systems.

This progressed to failures multiple times a week. The end of day process would be re-run during the day on T+1 and PL and Risk reports were only reconciled and available at the end of the day on T+1. In order to address these problems, they decided they needed to upgrade their IT infrastructure, purchase additional servers for the operational processes and hire additional support staff. The management signed this off as a result of a growing business.

Does this situation sound familiar to you? I would guess that either you or someone you know is going through this right now. So what has this to do with grid computing? The picture painted above is not that hypothetical and has been constructed from various personal experiences. The essence of this problem is scalability. Every one faces this issue at some point; how do you implement a solution to meet immediate requirements which will also provide a solid enough platform from which will accommodate growth and future needs.

There are a host of books and online resources one could research for assistance in planning and equipping yourself for growth. Till recently smaller business willing to invest scalable infrastructure had a hard decision to make. Make a substantial capital and operational investment into technology and processes that would initially be substantially underutilised and in the future run the risk of not been properly suited. Due to the very high initial investment and uncertainty of return this has been a very unpopular approach.

Additionally, the team responsible for managing technology in a typical small to medium sized hedge fund doesn’t have very much to go on in terms of estimating future growth requirements. In most cases they don’t have the budget to deploy infrastructure and systems that would cater for unknown growth, in particular very fast growth.

The good news is that recently there is more choice for those wanting to be better prepared for these uncertain times we live in. The evolution of the Internet has pushed the development of various scalable technology solutions. Particularly since the bust of the Dot Com era companies have had to assemble technology that is economical, functionally rich, highly available and scalable. One of the beneficiaries of this development is grid computing and I will show how this can addresses the processing requirements for a hedge fund’s operational systems and processes.

When you purchase additional servers to solve processing problems it always comes with a cost. Where do you store them, electricity, cooling and how best to administer them? Next you have to decide how most effectively use them and to share processing across them.

In most alternative management businesses, the bulk of the computer processing is over night and for the remaining time the computers are relatively idle. How can one balance this? How do you spread your computer processing evenly over 24 hours to get the highest return from your technology investment? Now back to our example hedge fund with 30 employees. They would have at least 30 workstation computers of which mostly are relatively idle. For the majority of users in this organisation they have a workstation that could not ever be very busy or at least only fraction of the time. Here resides a computing resource of amazing potential. Workstation computers today are configured with hardware components not far off of what would be used in servers. In actual fact they are mini servers. Now imaging each of these computers can communicate with a central server, request a work item that would run in the background with the user unaware and unaffected. With this resource why would our example Hedge Fund want to purchase additional servers?

Implementing a grid can turn out to be fairly complicated when you get into the detail of how to co-ordinate and run processes across this available computing resource. There are a number of open source initiatives and commercial products that set out to solve this problem and make grid computing more assessable.

Let’s look how a hedge fund can implement a grid computing solution using the ScaleFast products Grid and Flow.

ScaleFast Grid comprises of a central application that manages individual work items to be executed. A number of grid agents or workers are installed on all computers that at some time will be available to the grid. These workers understand how much resource they are allowed to make use of in the host computer. ScaleFast Flow is a process scheduler, it know how to bring together and co-ordinate business processes that are made of up dispirit programs, scripts and user interaction across the business.

Now we have a tool which can help us, what next. Firstly the business must define its process requirements and service level agreements (SLA’s) for each process e.g. Provisional PL report for fund must be completed and distributed to fund managers by close of business on Trade Date (T). Risk Reports based on overnight positions, must be ready first thing every morning. Profit and Loss , position and trade reconciliation completed by midday T+1. NAV light, completed 15:00 T+1.

For our example we have set certain ground rules from which everything stems. Next we need to look at where our problem areas e.g. what take a long time to run, where do things often fail and what bottlenecks occur because everything currently runs one after the other.

ScaleFast turns you available computers into a single platform made up of multiple computer slices where many tasks can be run at the same time. It could be possible to run the risk report and the PL report at the same time, further it could be possible to split these reports up into smaller pieces. Assuming the Risk and PL reports take the same time to run, by only having a grid of 4 slices or workers would result in processing time improvements by over 400%.

ScaleFast Flow adds another dimension of performance to this example. It versions and controls the execution of processes for a number of tasks that have various interdependencies. If something goes wrong in this process you may not want it to proceed, after the problem has been resolved you may want to resume it from a certain point. You may also not want to have to pull in an IT resource every time something goes wrong, and you may also require a full audit trail of when and why a process failed.

Take for example this fairly common process. Snap market prices -> Fetch market data from broker -> calibrate curves and volatilities -> send trades to administrator -> Run Risk Reports, Run PL reports, Run Recon extracts.

Some steps may not be critical to the process, some steps may be executed in parallel, some steps have to run on certain preconfigured servers and some steps would benefit from been automatically split into smaller more optimum steps. With the ScaleFast tools this is easily achieved , users have experienced process optimisations from eight hours down to 40 minutes.

Grid computing gives the hedge fund a scalable platform on which to manage and grow their internal processes. With the high market volatility so common these days more intra-day real-time reports are becoming an essential business tools in managing the trading and operational risk within a hedge fund. ScaleFast provides a functionally rich and cost effective platform for those requiring more from their systems and faster results.

Robert Betts is the lead consultant and CEO of Develops Ltd, an Alternative Investment Management consultancy. Robert speaks and offers commentary on various technology related topics relevant to the industry. Develops has a strategic partnership with ScaleFast, a software and services company making grid computing accessible for main stream use.

Technology strategy for fund managers

Is there a general well suited technology strategy available to fund managers? Could it be outsource, outsource, outsource? Could it be build a enterprise class technology platform assembled and built by technology rock stars? Or following the debate derivative from the above; build verses buy?

Every one has a different approach and a different view based on their objectives, skill and past experience. New fund managers, technology staff in existing businesses, vendors offering all manner of services into the space... everyone has a different view on the solution.

I read a number of articles recently touching this topic, one notably by Clare Levy, covering many of the issues and considerations. So I don't have to list them here, thanks Clare.

For me there is no common, clear strategy in the traditional sense. By the time you have finished evaluating all the relevant inputs, things have changed enough to make your strategy obsolete. These days there are very few constants, one of those is change. I remember as a young boy telling my father that I wanted to follow him into a career in electronics. His answer to me, "Son ... rather become an accountant, things change to fast in electronics!" So I did both.

The best I can think of in terms of a technology strategy is to implement some basic guidelines around its use. For most people technology is not a product but an enabler and should be treated as such. Firstly and very importantly the people responsible for technology roll-out should know and understand the business's primary goals whether it is ice cream manufacture or trading a global macro strategy. They should be intimate with the processes required to deliver these goals.

Different industries have varying heart beats. Some can be measured in thousands of years and some every several years e.g. soft drink bottling plants. For some hedge funds it's three to six months, do not engage in projects that will exceed a time period in which there is a high probability the requirements may change.

Your investment into technology should match you business's predictable cash flows. If you starting out with $50 mm US under management, with highly liquid investor terms, don't enter into 5 year technology agreements.

Select a base technology platform that is flexible and can scale with you long term business plan. Services with a high degree of lock in can severely stall or even break you business at some point.

These are some of the key guidelines, there may be a few more depending on your particular environment and situation. There will be many decisions you will have to make that will be influenced by these guidelines. What type of platform do we standardise on, do we make use of open source, how much and what do we outsource. The answers to these are more subjective in the greater scheme of things and is what make your environment unique.

Use your power don’t export it.

I read an article today on the BBC website, regarding a comment by UK energy minister Lord Hunt. He was responding to call from the Scottish government stating that the costs for putting electricity into the national grid are unfair towards them. The charge is calculated based on the size of the power station and the distance from large populated areas.
Scotland has a long history of using renewable energy to drive its industry, dating back to the days of pre-electricity hydro powered textile mills. I feel that there is an opportunity here, why don’t they make use of their surplus instead of being penalised by the cost of exporting it to the south. I think this is a great opportunity to incentify the development and operation of green data centres. I understand that it’s cheaper supplying bandwidth to a data centre located in Scotland than to supply Scottish power to a green data centre in London.

Renewable energy in the data centre

Making use of renewable energy to power the data centre is something I have been thinking of for a while but only recently have I started to dig deeper. It has been hard to juggle the commercial feasibility vs. the moral and environmental arguments. So as someone on the fence I have done nothing.
A friend is starting an interesting business in financial structuring and securitising of renewable energy and green technology. We had a chat around the dynamics of renewable power demand and supply and this started me thinking of how one could with minimal economic impact bring renewable energy into the data centre.
I have come across a very interesting and informative blog maintained by Dave Ohara, it is an aggregation of interesting news, articles and opinions mostly around the topic of the green data centre.
I am not aware of any alternative investment or finance companies in general that have clear strategies on reducing their carbon footprint and general environmental impact of their data centre. I wonder how long before these will form part of an investor mandate for a hedge fund?