Dear ATCA Colleagues

[Please note that the views presented by individual contributors are not necessarily representative of the views of ATCA, which is neutral. ATCA conducts collective Socratic dialogue on global opportunities and threats.]

The Federal Reserve -- the US central bank -- has cut the base interest rate by half a percent or 50 basis points, from 5.25% to 4.75%. This is the first time the Fed has cut the Fed funds rate since 2003. The motive behind the move is to prevent a housing slump and to stop turbulent markets from triggering a recession in the slowing US economy. [... MORE TO FOLLOW ...]

We are grateful to:

. Prof Jean-Pierre Lehmann based in Ouchy and IMD Lausanne, Switzerland, for "Asymmetric Solutions: No War with Iran?;"
+ Arthur Probert, Associate, & Mark Goyder, Founding Director, Tomorrow's Company, London, UK, for "Asymmetric Solutions: Restoring Trust after the Credit Crunch;"
+ Jean-Yves Gresser, Vice-Chairman, Black Forest Group, New York, based in Paris and Granville, France, for "Asymmetric Solutions: Enhancing Trust in Computing Platforms, Networks & Processes."

Dear DK and Colleagues

Re: Asymmetric Solutions: No War with Iran?

What if we turned Iran from a Threat to an Opportunity? Could the Nation become "another China"? With the hawkish words of French Foreign Minister Bernard Kouchner, that France had to prepare for the possibility of war against Iran over its nuclear program, even if partially retracted (he is a bit of a loose cannon), surely such an outcome is looking less and less like a "black swan", ie less like an outlier, and moving more centrally on the radar screen. I personally think this would be lunacy, but lunacy is not something alien to human history.

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With best wishes

Jean-Pierre

Jean-Pierre Lehmann is Professor of International Political Economy at IMD International -- Institute for Management Development -- in Lausanne, Switzerland, since January 1997. His main areas of expertise are the socio-economic and business dynamics of East Asia, the impact of globalisation on developing countries and the government -- business interface, especially in respect to the global trade and investment policy process. In 1994 he launched the Evian Group, which consists of high ranking officials, business executives, independent experts and opinion leaders from Europe, Asia and the Americas. The Evian Group's focus is on the international economic order in the global era, specifically the reciprocal impact and influence of international business and the WTO agenda. Jean-Pierre Lehmann acts in various leading capacities in several public policy institutes and organisations. He obtained his undergraduate degree from Georgetown University, Washington DC, and his doctorate from St Antony's College, Oxford University. He is the author of several books and numerous articles and papers primarily dealing with modern East Asian history and East Asia and the international political economy.

Prior to joining IMD, Jean-Pierre Lehmann has had both an academic and a business career which over the years has encompassed activities in virtually all East Asian and Western European countries, as well as North America. He was (from 1992) the founding director of the European Institute of Japanese Studies (EIJS) at the Stockholm School of Economics and Professor of East Asian Political Economy and Business. From 1986 to 1992 he established and directed the East Asian operations of InterMatrix, a London based business strategy research and consulting organisation. During that time he was operating primarily from Tokyo, with offices in Seoul, Taipei, Bangkok and Jakarta and was concurrently Affiliated Professor of International Business at the London Business School. Other previous positions include: Associate Professor of International Business at INSEAD (European Institute of Business Administration) in Fontainebleau, France; Visiting Professor at the Bologna Center (Italy) of the Johns Hopkins University School of Advanced International Studies; twice in the 70s Visiting Professor and Japan Foundation Fellow at the University of Tohoku, Sendai (Japan); and Founding Director of the Center for Japanese Studies at the University of Stirling (Scotland), where he also taught East Asian history in the University's History Department. From 1981 to 1986 he directed the EC-ASEAN 'Transfer of Technology and Socio-Economic Development Programmes' held in Singapore, Bangkok, Jakarta, Kuala-Lumpur and Manila.

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Dear DK and Colleagues

Re: Asymmetric Solutions: Restoring Trust after the Credit Crunch

The credit crunch is a signal that the financial services industry needs to take a long hard look at itself. The widening of the LIBOR-base rate spread to record highs sends a strong message that bankers do not trust their industry colleagues. In the opaque world of securitisation, CDOs, mark-to-model and mark-to-myth, risks and ratings have been made irrelevant by uncertainty about who holds the so-called toxic waste.

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Kind regards

Arthur Probert and Mark Goyder -- with input from Patricia Cleverly and Tony Manwaring -- Tomorrow's Company

Arthur Probert runs his own consultancy service, working with international blue chip companies, SMEs and government agencies, and is an Associate with Tomorrow's Company, the business-led think tank. After reading Chemistry and Law at Exeter University, he worked for BP, and then Yorkshire Electricity in a series of commercial, trading and regulatory roles. He has particular interests in managing uncertainty, behavioural aspects of decision making, relational capital and in the balance needed between regulation and markets. He is a founder member of the Complexity Society and holds an MBA from Durham Business School. Arthur is co-author of two reports for Tomorrow's Company - Restoring Trust, the 2004 report into the effectiveness of the UK investment system, and Tomorrow's Global Company: challenges and choices, published this year.

Mark Goyder is Founder Director of Tomorrow's Company, a not-for-profit research and agenda-setting organisation responsible for the business-led Tomorrow's Global Company inquiry whose findings are to be published in June 2007. A business-led think-tank, Tomorrow's Company is committed to creating a future for business which makes equal sense to staff, shareholders and society. After 15 years as a manager in manufacturing businesses, Mark initiated the Royal Society for the encouragement of arts, manufacturing and commerce (RSA) Tomorrow's Company Inquiry, a business-led inquiry into 'the role of business in a changing world'. The objective was to develop a shared vision of the company of the future. In 1995 he founded Tomorrow's Company and, over the past ten years, has inspired and challenged the boards, leaders and managers of leading large and small companies with his clear vision and practical insights into the changing agenda for leadership, governance, and stakeholder relationships, most recently with the publication of Restoring Trust: investment in the twenty-first century (June 2004). A prolific writer and winner of the Institute of Management Studies (IMS) Tillers Millennium Trophy for best speaker, he has addressed audiences all over the world. Mark is also a member of the British Airways Corporate Responsibility Board, the BT Leadership Advisory Panel and the Camelot Advisory Panel for Social Responsibility. He also writes a monthly column in Ethical Corporation Magazine and Accountancy Age.

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Dear DK and Colleagues

Re: Asymmetric Solutions: Enhancing Trust in Computing Platforms, Networks & Processes

This submission to ATCA suggests further asymmetric solutions to your submission "Breach-of-Trust in Computing Platforms: Systemic Risk & Black Swans."

In regard to some of the complex challenges you have highlighted, the Black Forest Group (BFG) has been working on solutions for about 10 years. The challenges are surfacing at last. ATCA Socratic dialogue and BFG debates, which at times sounded academic, have now a practical basis. In the following, we are trying to address the actual problems, where technology fails, where it might help and how we could develop the awareness of our colleagues on the systemic risks and on possible solutions.

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Bien cordialement

Jean-Yves Gresser

Jean-Yves Gresser is Vice-Chairman, Black Forest Group (BFG), a non-profit trade organization incorporated in New York, USA, and co-chair of the TWIST Identity Working Group. From the late 1960s to the early years in this millennium, Jean-Yves Gresser, held several technology and/or market research and CIO positions in the France Telecom, Banque Paribas, Banque de France and EULER HERMES. From 1989 to 1996 he was full time IT advisor to the Governor of the Banque de France. As such he launched in 1995 the first cross-administrations working group on electronic signatures, edited a book on "Financial EDI and payments" on behalf of the French Conseil national du credit and published the first study on the security of payments over the internet, in 1996. He has been on the board of several professional associations like EDI France, GIGREF, AFAV and MIT Club of France. He is also Partner and CEO of a small investment, research and consulting company: GELM enterprises, whose activities now focus on security and trust of eCommerce and digital records.

The Black Forest Group (BFG) is an independent membership association, drawn from a global community of professionals working mostly in large multinational companies. Its goals are to:

I. Facilitate the exchange of non-proprietary but sensitive information and ideas among professionals;
II. Share best practices;
III. Identify and encourage the development of emerging information technologies, processes and related standards; and
IV. Develop, articulate and present a common vision for the information technology and global commerce community.

Across industries and disciplines, BFG members share the common objectives of enhancing the abilities of IT professionals and organizations and contributing to the evolution of high quality standards, best practices and business processes. Membership is by invitation only.

[ENDS]

* The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London, UK, for "Credit Card Debt Default - The Domino Crisis post Sub-Prime Overflow;"
* Dr George Feiger, President & CEO, Contango Capital Advisors, based in Berkeley, California, USA for "Responsibility for Credit, Securitisation and Moral Hazard."
. Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva, Switzerland, for "Blame and Sanctions in the Credit Crunch;"
. Prof Prabhu Guptara, Executive Director, Organisational Development, Wolfsberg (UBS), Switzerland, for "Unique Problems with 1990s Japan;"
. The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London, UK, and Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA, for "Central Bankers, Monetary Policy and Moral Hazard;"
* William Sturge, Partner, Reinsurance, Lawrence Graham (LG) based in Central London, UK, for "Litigation Exposure and Insurances that may Respond;"
. Peter Tasker, Founding Partner, Arcus Investment, based in Tokyo, Japan, for "Invaluable Lessons from 1990s Japan - Risks of Schadenfreude;"
. Andrew Leung, CEO, AL International, London, UK, and frequent visitor to China for "The China Dimension of The Global Credit Crunch;"
* The ATCA Research & Analysis Wing (RAW), based in Canary Wharf, London, UK, and Dr Harald Malmgren based in Washington, DC, USA for "Off-Balance Sheet Conduits & SIVs Raise Wider Concerns;"
* Prof Charles Calomiris, Columbia Business School, New York & Prof Joseph Mason, LeBow College of Business, Drexel University, Philadelphia, USA for "The Conflict of Rating Agencies and Regulation - We need a Better Way to Judge Risk;"

. Dr George Feiger, President & CEO, Contango Capital Advisors, based in Berkeley, California, USA for, "Questioning the Views of a Nobel Laureate;"
. Prof Joseph Stiglitz, Nobel Laureate in Economics (2001), Columbia University, New York, USA , for "Day of Reckoning for Americans who lived Beyond their Means;"
. Dr George Feiger, President & CEO, Contango Capital Advisors, based in Berkeley, California, USA for "Suggestions for Resolving Sub-Prime Dilemma Step by Step;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA for "Understanding Rating Agencies beyond the Sub-Prime Meltdown;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London, UK, for "Asymmetric Knowledge Risk and Market Deadlock;"
* Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva, Switzerland, for "High Credit Ratings and Breakdown of Trust;"
* John Pickering, Vice-Chairman, Labour Finance and Industry Group, based in London and Tunbridge Wells, UK, for "Role of Auditors;"
* The ATCA Research and Analysis Wing (RAW), based in Canary Wharf, London, UK, for "ATCA QUERY: Role of Credit Rating Agencies;"
. Peter Tasker, Founding Partner, Arcus Investment, based in Tokyo, Japan, for "Resilience of Corporate Profits & Sub-Prime Fiasco -- Global View from Japan;"
. Daniel Morler, Head of Middle East, LGT Private Bank, based in Vaduz, Liechtenstein, for "Human Factor, Information Lag, Geo-Politics and Central Banks;"

. Justin Urquhart Stewart, Director, Seven Investment Management, London, UK, for "Pride Before the Fall -- Those Who Don't Know that they Don't Know;"
. Martin Wolf, Associate Editor & Chief Economics Commentator, Financial Times, London, UK, for "To Cut or Not to Cut: Federal Reserve must Prolong the Party;"
. The Hon Al McDonald, Chairman and CEO, Avenir Group, from Michigan, USA, for "Balancing The Role of Management in Extreme Financial Turbulence."
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Subprime Crisis Spreads Across Regions and Financial Sectors;"
* Hervé de Carmoy, European Vice-Chairman, Trilateral Commission, based in Paris, France, for "Role of Large Financial Institutions in Fuelling Crisis;"
* Dr Jim Walker, Chief Economist, CLSA, based in Hong Kong for "China Chaos and Subprime Butterfly;"
. Ashutosh Sheshabalaya, CEO, India-Advisory, based in Brussels, EU, and Bassilly, Belgium, for "India turns History Upside Down;"
. John Elkington, Chief Entrepreneur, SustainAbility, based in London, UK, and returning from India, for "Mother Convulsion - India's Third Liberation;"
. Stephen Lendman, based in Chicago, Illinois, USA, for "Slow Motion Train Wreck" via Ashok Khosla, Chairman, Development Alternatives, New Delhi, India;
. The ATCA Editorial Team based in Canary Wharf, London, UK, for "Market Convulsions;"

. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA for "Federal Reserve's Changed Focus;"
. Bill Emmott, Director, UK-Japan 21st Century Group, based in London and Somerset, UK, for "Japan's Strong Yen;"
* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA for "The Asymmetric Loss of Trust and Chain Reaction;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Public Inquisition of Credit Rating Agencies may Accelerate Downturn;"
. Dr George Feiger, President and CEO, Contango Capital Advisors, based in Berkeley, California, USA, for "Watch out for Dramatic Winners;"
* The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Systemic Risk & Sectoral Meltdown: Heightened Correlation and Deleveraging;"
. Rudi Bogni, Chairman, Medinvest, and Director, Old Mutual, from Basel, Switzerland, for, "Non-Stop Central Banks' Intervention;"
. Dr Ravi Batra, Professor of Economics, Southern Methodist University, Dallas, Texas, USA, for, "Towards a Global Economic Crisis?;"
. Aurora Carlson, Founder, Open One Center, based on the West Coast, Sweden, for "The Coming Storm of Change;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Large Quake hits Quants as Computer-Driven Quantitative Hedge Funds Short-Circuit;"

* Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, USA for "Prolonged Credit Market Correction Ahead;"
. Prof Dr Norbert Walter, Chief Economist, Deutsche Bank Group, based in Frankfurt, Germany, for "Economic Consequences of The Sub-Prime Crisis;"
. Anthony Whitehouse, Founder, Bittiner Whitehouse (now Maitland), Geneva, Switzerland, for "Regulators, Hedge Fund Lending and Cross-Selling;"
. The ATCA Editorial Team, based in Canary Wharf, London, UK, for "Perfect Storm: Credit Freeze and Distress Selling by Hedge Funds;"
. Dr George Feiger, based in Berkeley, California, USA, for "Two Faces of the Same Coin;"
* The ATCA Editorial Team, based in Canary Wharf, London, for "Contagion and Systemic Risk? ECB Injects Record Euro 95bn post Major Disturbance;"
. The ATCA Editorial Team, for "Flight to Quality as Markets finally Appreciate Risk;"
. Robert McNally, Chairman, London Chamber of Commerce Property and Construction Group, for "Erosion of Commercial Real Estate as a Solid Asset Class;"
. Alexander Hoare, CEO, C Hoare and Co, Private Bankers, based in the City of London, for "Destructive Creativity, Leverage and The Derivatives Market;" and
. Dr Harald Malmgren, CEO, Malmgren Global, based in Washington, DC, for "The Fear of Central Bankers -- Flight from Illiquidity, Derivatives and Heightened Risk of Contagion;"

in response to, "Are the Currency Markets Warning that there is Trouble Ahead? The Precipitous Decline of the US Dollar and its Impact on the World."

+ Denotes ATCA QUERY: The Question of Trust +

* Denotes ATCA QUERY: Role of Credit Rating Agencies *