Business Process Management (BPM) is the top layer of a software stack that orchestrates how services on multiple servers communicate and process business transactions. This also includes collecting and acting on information entered by customers and by other businesses via web servers.

Below this layer are Web Services, Enterprise Service Buses, and various software plumbing that connects clients, services and databases.

Using BPM, businesses can implement "straight-through processing", where a customer transaction is processed to completion without invoking any humans in the process.  A good example of a straight-through process is filling your car at a self-service gas pump using your credit card. From the time that the credit card magnetic stripe data, the customer's various button presses, and the grade, quantity and price of the gasoline purchased are collected from the the pump, until the transaction appears on the customer's statement, there is no human intervention.

Since the mid-'70s, there has been a debate about how software applications should be designed. Some have thought that software applications should support people in work centers, while others have thought that applications should support end-to-end processes. For a long time, the work center automation concept won out, and client-server software converted paper-based processes to digital, one job task and work station at a time. This was inefficient, since often jobs would involve accessing, cutting and pasting between applications, making printouts of partial transactions, or entering data from paper references.

BPM and the lower layers of software plumbing now allow software developers to create interface to these applications so that they become services which communicate directly to each other. BP also implements the necessary data transformations, data lookups, routine logical functions, and routing of results, which was previously done at workstations. When transactions require human intervention, it routes and queues work for workstations, and then resumes the automated process flow.

 As a result, businesses can eliminate permanently many clerical and administrative jobs.

Besides contributing to permanent unemployment, the elmination of these jobs will also diminish the demand for office space and exacerbate the downturn in commecial real estate.

Suppose that the recession is going to be "V" shaped, which is the hope of the more optimistic.  Then, the recession is not over until we reach the top of the right side of the "V".

At present, we may have just passed the bottom of the "V" and started up the right side. However, it will be a few quarters until we get up to a level even with the left side.

It is specious to declare a recession over until the GDP exceeds its previous maximum, adjusted for inflation, for two sucessive quarters.

Medical services to undocumented aliens are provided pursuant to "Section 1011, Federal Reimbursement of Emergency Health Services Furnished to Undocumented Aliens" contained in the "Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173) (MMA)".

This program appears to be adminstered by TrailBlazer Health Enterprises LLC under contract with the Centers for Medicare and Medicaid Services. 

See http://www.trailblazerhealth.com/Section_1011/Default.aspx

and http://www.acep.org/practres.aspx?id=37636

Presumably these programs would continue under the "if you've got it now, you won't lose it" principle.

Unfortunately, bills such as HR.3200 read like an extended version of a credit card agreement from the sleaziest bank in the land.

People simply cannot read the legislation and understand what Congress is proposing in the bill, nor can they understand how the law will affect the country or their lives. 

Having seen examples like HR.3200, people also think that their Representatives and Senators have not read the bills, and that their Congresspeople do not understand what they are voting on.

It is time for legislation to be written in plain English that everyone can understand.

It can be done.  See the Declaration of Independence and the Constitution of the United States of America for examples.

In the discussion about drug costs, the difference in pricing of drugs between Canada and the US was justified on the grounds that US drug companies had to make a high level of profits in the US to support research that could not be supported by the low level of profits made in Canada.

On further thought, it seems that there is a general economic and trade policy problem with holders of de jure (patents, copyrights, etc) and de facto (e.g. 3 companies or fewer with more than 70% of the market?) monopolies or oligopolies. These companies do not use cost-based pricing but instead use profit-maximizing pricing.  In other words, they increase their prices to the point where the next cent in price increase will cause demand to fall enough that their net profits will fall.

In the case of drugs, a global pharma company can implement this profit maximizing strategy independently in each country since non-tariff barriers to trade can be used to prevent the flow of drugs between countries.  This allows global profit maximization, since the willingness to pay may be different between countries based on their economic status and a host of policy and sociological factors. 

Other manufacturers employ the same strategy. The regionalization of DVDs is intended to allow copyright holders to differentially price DVDs in different parts of the world.  Software distributors do the same thing. Even products like cameras are sold at different prices in different countries, although there is a "gray market" of products imported from low-price to high-price areas. The manufactures attempt to dissuade customers from gray market purchases by voiding warranties.

Since many of these companies are American, the general tendency is to rip off the home market and then maximize volume and profit by selling incremental volume above incremental costs in the global market.  This should be stopped by regulation along the following lines:

No company benefiting from de jure or de facto monopoly position may price its product or service to Americans at a price more than 10% above the lowest price charged in any other country, adjusted for the ratio in per capita GDP at the prevailing exchange rates.

Note that this would still let American drug companies charge less for drugs in poor countries, due to the per capita GDP ratio.  However, it would require a rough equalization of prices for drugs sold in the developed countries.

"Behavioral economist Dan Ariely, the author of Predictably Irrational, uses classic visual illusions and his own counterintuitive (and sometimes shocking) research findings to show how we're not as rational as we think when we make decisions."

http://www.ted.com/talks/dan_ariely_asks_are_we_in_control_of_our_own_decisions.html

Like other Technology, Entertainment, Design talks, this is both entertaining and informative. 

Automobile companies formerly were highly integrated enterprises.  Ford built cars starting with iron ore, coal, and limestone.

However, over the last few decades major auto makers have become final assemblers and marketers, who are dependent on deep supply chains. In many cases they have spun out divisions into free-standing companies. These in turn have spun out some of their divisions, each spin out lengthening the supply chain.

Theoretically this increases efficiency in a number of way.  First, the creaky, inefficient division is no longer sheltered within the cost accounting structure of the parent company.  It is now exposed to market competition and it must get efficient or die. Second, the spun out entity can win business from other customers, increasing its volumes and realizing efficiencies of scale.

However, a "spin out" represents a symbolic analyst bonanza.

Since the suppliers are separate from the parent, there must be real business processes between them to replace the informal coordination between divisions of a single company. This requires the parent to draw up detailed design and quality specifications, write requests for proposals, evaluate proposals and bids, formulate contracts, get the contracts approved by legal and funded by management, receive the parts, monitor inventories and reorders, analyse invoices, and send out payments with remittance advices showing bonuses and penalties. The supplier now has to have a marketing and sales division, create proposals, negotiate contracts, evaluate proposed designs, prepare shipping documents with test results, invoice and bill the parent company, and negotiate collections, including negotiating any design changes/replacement parts/penalties due to issues with quality. All this is coordinated by extensive software systems for intercompany ERP and accounting, which must also be operated and maintained.

Furthermore, the parent can no longer depend on a single supplier, who may have a business interruption, so the parent has to do all this with at least a second source for each part. This increases the adminstrative, maintenance, warranty, and long term stocking complexity for the parent. And the supplier, no longer assured of the parent's volume, has to sell to as many other customers as possible, setting up a multiplicity of relationships with differing processes as demanded by the customers.

Each of these suppliers in the supply chain needs a set of general and adminstrative functions, such as a board of directors, upper management, legal, regulatory, marketing, human resources, real estate, accounting, etc., which were not needed by the integrated division.

Lastly, the process for spinning out the supplier also involves a lot of symbolic analyst work to prepare the legal documents, get approvals, get new debt to leverage up the balance sheet, choose a name and logo, implement the new identity ad campaign, etc.

The end result is an industry with a greatly increased number of symbolic analyst jobs.

I haven't been able to find much hard data on whether retraining programs actually work.  For example, nothing that would answer questions like - Of the workers who lose a job and get government subsidized training, what fraction are making more at their new job than they did at their old job after 3 years?  Does the fraction vary depending on the amount of the subsidy?

A study was referenced in U.S. Study Says Job Retraining Is Not Effective, but that was in 1993, and it would be out of date.

Possibly retraining programs are more of a subsidy to the training industry than an effective means to assist workers coping with job losses due to outsourcing or technological change.

Are there any recent and reliable studies on the effectiveness of worker retraining programs?

 JPMorgan warns on credit card woes

"At the end of the first quarter, 12.63 per cent of the WaMu credit card loans were deemed uncollectable by JPMorgan. The bank estimates that figure could reach 18 to 24 per cent by the end of 2009, depending on economic conditions."

The Chase credit card loan portfolio isn't doing so hot either -- especially in Arizona, California, Florida, Nevada and Virginia

This is why credit card interest rates are so high -- to compensate for all the deadbeats.

The news reports often give the year-over-year or month-to-month drops, but not the drop in prices from the peak month.  The drop in price from the peak month to March 2009 is as follows for the just-published, seasonally adjusted data:

-52% AZ-Phoenix

-40% CA-Los Angeles

-42% CA-San Diego

-45% CA-San Francisco

-12% CO-Denver

-33% DC-Washington

-47% FL-Miami

-40% FL-Tampa

-21% GA-Atlanta

-27% IL-Chicago

-18% MA-Boston

-44% MI-Detroit

-35% MN-Minneapolis

-10% NC-Charlotte

-50% NV-Las Vegas

-20% NY-New York

-20% OH-Cleveland

-19% OR-Portland

- 9% TX-Dallas

-21% WA-Seattle

Note that Case-Shiller is for a selection of metro areas, and that major areas such as Houston and Philadelphia are not included.  It does not have good represention across the mid-section for cities such as Baltimore, Cincinnatti, Memphis, St. Louis, and Kansas City.

The Global Plan Annex - Declaration on Strengthening the Financial System has been published.  It is a good start, although it appears to have been watered down by the US-UK-Japan Axis of Improvidence.

Big money needs another bubble in order to multiply fortunes on the way up.

We've had the dotcom bubble and the real estate bubble. 

What's next? Health care at 16% of GDP and growing might be a possibility?

Suppose that you are a CEO of a Big Bank.  Also suppose that you have a $100 billion of Level 3, mark-to-model assets on your balance sheet. 

You could try out the new PPIP program by selecting $10 billion of your most toxic assets and putting them up for bid.  One of three things will happen:

1. the bid will come in at $10 billion, in which case the only effect of the sale is that you have $10 billion in cash to deposit as reserves with the Fed until you figure out what to do with it (more on this later),

2. the bid will come in at less than $10 billion, say $8 billion as an example, in which case your assets take $2 billion hit, but you have $8 billion in cash reserves instead of $10 billion in level 3 assets. However, if the assets that you sold are similar to the other $90, it has the fairly disastrous effect of converting them from $90 billion of mark-to-model assets to $72 billion of Level 2, mark to observables assets, which means that you have total write down of $20 billion and $8 billion of cash.  This basically forces you to sell all the remaining assets, unless you have chosen wisely and can argue to your auditor that the assets sold
for $8 billion are really very different than the ones you retained. 

3. the bid will come in at more than $10 billion, say $12 billion as an example, in which case your assets increase by $2 billion and you have $12 billion in case reserves.  This is really good, especially if you can argue that the other $90 billion of Level 3 assets, are now really $108 billion of Level 2 assets and you can book a $20 billion increase in assets.  In this case, since you have a firmly established value for the remaining assets, and they are apparently worth more than you had thought, you may or may not want to sell them.

Returning to the problem of what to do with the cash received for the sale of assets, one wonders how this translates into additional lending.  If the intent is to increase bank reserves, then the money received for the sale of assets would go into the bank's Fed account or into US Treasuries. 

It is unclear why you would lend the money to the same deadbeat American consumers and businesses that were the cause of the toxic assets that you just sold. Banks can currently lend to all the 30% down, 740 FICO, conforming prospective home buyers that they can find -- they just can't find very many of them.  A bank would be foolish to lend with less than 30% down in a falling housing market in non-recourse states, where the mortgage is secured only by the value of the property. The same situation applies to auto loans and commercial loans.  The problem is not availability of money; the problem is availability of creditworthy borrowers. 

So I'm not sure how the PPIP is going to solve the problem.

When discussing employment, layoffs and the job situation, the media usually shows an interior shot of factory workers surrounded by machines or an exterior shot of factory workers outside a factory building. Such work is a small fraction of the employment picture these days. In February, goods producing payrolls were 19,877,000, service payrolls were 113,891,000, and government payrolls were 22,572,000.

The media should show people in more typical jobs, such as a:

• teacher preparing a lesson plan,
• nurse updating patient charts,
• salesman planning a sales call,
• waitress running credit card transactions,
• system administrator patching Windows,
• social worker updating case files,
• call center worker taking an order,
• college professor writing a grant proposal,
• bank teller processing a deposit.

This would give a much more realistic portrayal of the jobs that people do.

In JPMorgan Chase's "Investor Day" presentations, the card services presentation contained some year-over-year numbers for sales volumes (which I think includes both credit and debit card puchases - see page 44).

Travel is being cut back with airlines down 6.7%, hotels/motels down 9.2% and travel agencies down 17.3%. Since travel consumes a lot of energy, this should also be helpful to the environment.

Shopping in expensive stores is declining, with department stores down 12.0% and jewelry/watch/clock stores down 22.0%. I've never understood why people buy expensive watches in jewelry stores, since the cheap ones keep excellent time. And diamonds are notoriously associated with exploitation of miners and cutters/polishers, besides being used to fund warlords.

On the other hand, discount stores are down only 3.8%, which indicates that necessities are still being purchased.

On another slide, they showed that their "mass affluent" and "affluent/high net worth" customers are also using their cards a lot less.

So much for the argument that tax cuts for the rich will stimulate the economy.