Finance Matters

The Apple Tablet debut seems near: Apple will supposedly show off a cool tablet device at an event in late January in San Francisco.

While various leaks and press reports have provided a rough idea for what the tablet might be — sort of a big iPod touch, we’re envisioning, perhaps with 3G wireless service — there are, of course, more questions than answers. And the answers to some of these questions will make a big difference in how well the tablet performs as a gadget and how well it sells and performs financially for Apple.

Here are the ten things we’re most curious about with regards to the tablet, and our hunch for the answer. Please add your own questions (and more thoughts) in the comments.

Click here to flip through our 10 questions about the Apple Tablet →

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• 20 Guesses About What The Apple Tablet Will Look Like
• 15 Things You Can Remote Control With Your iPhone
• How A Year With The iPhone Changed My Life

Mexico is one of the world’s geopolitical disasters waiting to happen.

There’s a brutal, costly and ineffective war on drug cartels; big government deficits (debt is nearly 40% of GDP); and less and less oil (Mexico could be a major energy importer within 10 years).

Peter Zeihan, VP of Strategic Analysis at Stratfor, a global intelligence company, recently put the looming oil crisis this way to us: “What happens when all of a sudden its primary source of income disappears? Mexico is flirting with failed state status now.”

Dire stuff. But two unlikely silver linings to Mexico’s financial crisis may help turn the country around.

Stratfor summarizes:

Standard & Poor’s on Dec. 14 cut Mexico’s credit rating to BBB, the second-lowest investment grade. Faced with declining oil profits and an increased budget deficit, Mexico will be at risk of underinvestment in the years to come, which may force the government to ramp up borrowing. This is not an unfamiliar situation for Mexico: Capital shortages are built into its geography. However, there are two possible silver linings for the Mexican economy: the weakening peso and the drug trade.

How does that work? First, the weakening peso may have a positive effect on trade and may dampen negative effects of declining remittances.

Again, Stratfor:

Despite the decline in the value of the peso — 17 percent since January 2008 — the depreciation is not really a problem for Mexico compared to past bouts of peso devaluation. This time around, Mexico’s government debt is a relatively manageable 39.3 percent of GDP. Private sector debt is at 30.9 percent of GDP, but it is mostly peso-denominated, with only around 30 percent of all private sector debt denominated in foreign currency…The peso’s loss in value, therefore, will not have a devastating effect on the economy due to sudden appreciation of foreign currency loans that were denominated in U.S. dollars.
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Furthermore, peso depreciation helps with two other key economic factors for Mexico: remittances and exports…Even though fewer U.S. dollars are going back to Mexico in absolute terms, they have a greater purchasing power.

Also, an influx of money from Mexico’s lucrative drug trade into local banks may have helped them weather the worst of the recession.

Stratfor: Ironically, the solution to Mexico’s revenue problem may be the drug trade. Trafficking in drugs brings Mexico’s drug cartels more than $40 billion of estimated annual revenue. That is equivalent to around 5 percent of Mexico’s GDP and is double what Mexican migrants send back as remittances. Most importantly, it constitutes an indigenously produced source of foreign capital, a boon that every emerging/developing economy would want access to. This capital has to go somewhere: the mattress of a local sicario (essentially cartel enforcers), investments in the entertainment and tourism industry or offshore bank accounts.

Feliz Navidad.

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See Also:

• How To Short Mexico Ahead Of The Coming Oil Production Collapse
• Mexico Spends Over $1 Billion To Hedge Against Looming Oil Collapse
• 10 Looming Geopolitical Disasters

Bear Alum Courtney Dickinson held a get-together at Rm Fifty5 in Manhattan for about 100 Bear alumni last Friday December 18th.

She said the mood was “nostalgic,” according to Bloomberg.

Maybe she was sad because in better times, she and other financiers used to party there all the time. The 57th street lounge seems like it was pretty popular with the banking crowd. It has a long list of Wall Street clientele:

Lehman Brothers, JP Morgan, Morgan Stanley, Bank of America, Goldman Sachs, Citigroup, Merrill Lynch, UBS and Credit Suisse.

The list is probably referring to last year’s clients though, because this year Goldman cancelled Christmas and everyone else went pretty budget.

This year, Wall Streeters seem to really like Connolly’s, which is more low-key. We saw JP Morgan FX traders partying there a couple of weeks ago.

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See Also:

• Party Crashers: The JPMorgan FX Trader Christmas Party Had Free Bud Light!
• RBS Budgeted Their Christmas Party To $16 Per Person
• This Year, People Are Using Christmas Cards To Ask For Jobs

At The Business Insider, we currently have a standard vacation policy–a certain number of weeks a year. 

That said, for the past 15 years, I’ve never had any idea how much vacation I or my teammates have actually taken (going back to when I was working on Wall Street). 

I’ve taken some time off, of course, and I’ve worked remotely some, the way most of our team has.  I’ve let my teammates take as much time off as they’ve asked for without recording the days on some official log.  I’ve encouraged everyone to work intensely, efficiently, and effectively but also to make sure they’re creating a work-life balance they’re happy with (which many haven’t–including, sometimes, me).  The only thing I have been frustrated by is when folks disappear without arranging for their responsibilities to be covered while they’re away (because this screws the rest of us, as well as our readers and our clients).

In practice, therefore, our vacation policy seems to be “We’re all adults here, so take as much time as you want.  Just make sure you communicate clearly ahead of time and make sure your responsibilities are covered.  And, of course, make sure that you do a great job.”

That’s the way most effective executives and companies I know approach vacation.  Still, it was startling to be forwarded an email the other day written by a CEO who is taking the step of eliminating the normal concept of vacation:

I wanted to share a change in our vacation policy…  Starting January 1st, we will no longer have a defined number of vacation days.  Instead, you’ll be free to take vacation days as you desire, consistent of course with the timely completion of your responsibilities.  Before you go on vacation, you’ll also need to make sure other members are aware of your absence and that your responsibilities will be attended to in your absence.  We’re all adults here, and I assume that we are all working at ______ because we choose to be part of building a world-class company.  Therefore, we don’t need to track vacation days.  One consequence is that we will also no longer accrue for vacation days, so if you end up leaving the company in the middle of the year, you won’t get paid for unused vacation days, and there will be no year-to-year carryover of unused vacation days.

I made some inquiries, and it turns out that this decision was inspired by Netflix’s decision to eliminate its own vacation policy.  This decision is outlined in an amazing presentation on Netflix’s “culture” posted online (and below) by CEO Reed Hastings.  I’ll come back to other points in this presentation in future posts, but here’s the part on vacation:

So, what do you think?  Should we follow Netflix’s example and formalize what we’re already doing anyway? 

We don’t want to end up with an empty office all the time (though, if we do, folks probably won’t be satisfying the requirement that they do a great job–and we will have hired the wrong folks).  On the other hand, we don’t to encourage people to count the hours and minutes of vacation they are “owed” and treat the job like an annoying chore.  And the “no pay for accrued but untaken vacation days” will probably help encourage the great folks on our team to take as many days as they feel they need.

Thoughts?  Recommendations? 

More on this next week.  For now, it’s Christmas Eve and time for all of us–you, too, hopefully–to head off for some unofficial vacation. 

Merry Christmas!

Here’s Netflix’s presentation:

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See Also:

• How To Know You’ve Hired A Killer Team