While most financial institutions are still reeling from the effects of the financial crisis, Goldman Sachs is on track to pay out more bonuses than ever before.
I like free, open-source software as much as the next guy (actually, much more than the next guy, since that guy probably doesn’t know what open-source means), but when an open-source project as large as MySQL changes corporate hands twice in not much more than a year, it brings no confidence to the businesses open-source wants to court as paying customers.
Upon news of the Oracle acquisition, some key remaining personnel at MySQL started jumping ship for greener pastures (or at least for the lifeboats). MySQL founder Mr. Widenius wrote a blog post regarding his thoughts on the Oracle acquisition and his fear that with key employees leaving the project, support and development could be put back years. That’s not something you want to hear as, say, a business holding a multi-year contract for MySQL service.
Now you may say, hey, but proprietary shops get bought out by other companies all the time! What’s to say things don’t go to hell in a hand basket even if you’re paying a company money for a closed system? And furthermore, doesn’t the open-sourciness of the project actually help when support runs dry?
I think the answer to this can be found in the analysis of organization mentality. Open source and closed source shops have very different mindsets when it comes to ‘ownership’. Money-grubbing companies bought out by other money-grubbing companies probably don’t have to change their mindsets as much as when an open source project is acquired by a commercial software business. There’s a pall cast over them. And for Oracle especially, there’s a certain stigma associated with Ellison and friends. I’m sure that’s why, unlike with the Sun acquisition, key members are fleeing the nest even before things finalize with Oracle. At least Sun was making strides towards open source with Java. Oracle, well, there are accounts that while acquisitions by Oracle are often associated with lots of money, it goes hand in hand with crushing moral.
In a capitalist market, it’s eat or be eaten. Unfortunately, due to the nature of most open source outfits, they’re on the snack end of most business transactions. And while I am all for open source projects, recent developments with MySQL clearly paint a less rosy picture for open source aspirations in enterprise. Would it be possible for Oracle to spin out MySQL as a separate entity? It certainly doesn’t match up well with Oracle’s business aspirations.
One the biggest pieces of business news today was the continuing fall of Citigroup shares, and at their current levels below $5, you’d have to trace the charts back to 1993 to find a similar low. Despite continued reassurances of liquidity, shareholders aren’t listening and are dumping the stock en masse. Volume was well over 700 million today. Failure isn’t much of a danger – the American government/central bank would never allow such a crippling event to occur; however the face of banking will be seriously changed even if a full government bailout were to occur.
Furthermore, I found the advertisement below the Citigroup chart at Yahoo! Finance to be quite shocking.
Yes. That’s General Motors advertising its bailout plan.
What has the world come to?
Okay, perhaps this topic isn’t timed terribly well, on a day when the loonie jumped nearly 4 cents versus the U.S. dollar, but the overall trend for the Canadian dollar since the start of the recent financial crisis has been down, and in a big way. I’ve had many questions on the topic, which all pretty much boil down to this: if the American economy is doing so poorly, the Federal Reserve is lowering rates down to near-zero, and the government is borrowing money like it grows on trees, how come the greenback is still doing so well against most world currencies? It’s a 3-reason answer.
- The Canadian dollar is now a petro-currency. Canada’s exports consist mainly of resources, and more specifically, oil. With the slowing global economy, oil prices have fallen dramatically, dragging down the Canadian dollar along with it. Canada’s ‘fortunes’ are linked to the prices of the various resources we export. Although our financial system has weathered the brunt of the storm, other countries will experience slower growth, which means less oil consumed and slower consumption of base metals, hampering our economy nonetheless.
- Supply. Although the U.S. Federal Reserve has been pumping money into the banking system to lubricate the gears, many banks are hoarding money, not willing to lend. Of course this defeats the point of the money inflows to the market, but despite the talk of hundreds upon hundreds of billions of dollars, not much of it is seeing light outside the banks.
- Demand. Despite everything that’s happened in the United States, the greenback is still the choice currency during flights to safety. It is one of the global currencies that almost any business can be done with. In times of uncertainty, the U.S. dollar is the fallback for many people.
So despite a weakening U.S. economy, low interest rates, and a large money supply, its dollar still remains the de facto standard for world trade. Whether this financial crisis ends up being a turning point for that fact remains to be seen.
Talk about capitalizing on fear – I just saw this Google ad run on one of the sites I was browsing.