I’m listening to the show and Howad Stern just said he has a secret blog that only five people know about.

The King of all Media just keeps going.

This should be a fun event on Monday night at the Apple Store I’m looking forward to the no-rules, cage match with Nick Denton. I’ve been doing serious training for this one I’m going to be in the top mental and physical shape of my publishing career.

I’m guaranteeing two things: 1. a lot of pain, and 2. a knock-out by the 3rd round.

It’s going to be an all-out battle with Jeff Jarvis moderting.

Let’s get ready to rummmmmmmmmmmmmmmmmmmbbbbbbblllllleeeeeeeee!!!

Financial innovations: Creating Economic Opportunity.

Moderator: Glenn Yago, Director, Capital Studies, Milken Institute
Michael Milken, Chairman, Milken Institute; Chairman, FasterCures / The Center for Accelerating Medical Solutions; co-Founder, Milken Family Foundation
Mark Opel, Principal, American Capital
Lewis Ranieri, Chairman, Hyperion Partners
Richard Sandor, Chairman and CEO, Chicago Climate Exchange, Inc.; Senior Fellow, Milken Institute
Glenn Stewart, Managing Director and Head of Loan Syndicate, Banc of America Securities LLC

Ranieri discussed housing subsidies, and how we were drilling down to the point at which consumers with better credit got better deals. The people who need the subsidy the most get the worst deals. He pointed out how the people under 660 FICO scores were women from single households. He pointed out that the banking system is having a hard time working with the bottom 1/3rd of the market, and that that is the market that needs it the most. He said it is very troubling. He pointed out how the banking system took subsidies to get loans to the lower FICO score consumers and now they were not fulfilling that promise.

Richard Sandor, the CEO of Chicago Climate Exchange, Inc., talked about patents for financial innovations and how people like Milken never got to benefit from them. He talked about how he was able to raise more capital for his recent businesses because he was not patenting his work and is now licensing his processes for tracking environmental impact.

Milken talked about various financial technologies like securitized mortgages and credit cards, as well as derivatives. He discussed how hard it was to create things like collateralized loan obligations and collateralized bond obligations. He talked about how much legal work it took to do this, and how people took a lot of arrows to get them through (he joked about how he might have taken more arrows then others.) Milken talked about how it was not until 1987 that a women or an African American were able to run a large company as CEOnot counting people who had inherited businesses.

Milken discussed that traditional methods of credit are wrong and based on financing the past and not the future. He gave examples of Len Riggio of Barnes and Noble, Reg Lewis, Gedalio Grinberg and Kevork Hovananian. He mentioned how there was no way to look at their past to determine their credit worth.

He talked about understanding people’s talent and coupling that with capital. Milken said he was trying to figure out how do we define, find and finance human capital. He said we have no ways of judging that beyond giving college kids a credit card and tracking that (laugh from the audience.)

Mark Opel (far right with Milken) from American Capital Strategies (NASDAQ: ACAS) talked about their buyout and mezzanine fund. 20-500 million fund. He said there has been a bunch of BDC activity in the past month. He talked about private equity being the second oldest professional (big laugh.) He talked about how fragmented the industry is with 3,000 VC, buyout and mezzanine funds with 2,000 VCs alone. Opel discussed how a public company could open up to a larger capital pool: the investing public. He says they have a perpetual fund because they are public. He says they have high transparency and liquidity (which others like PE and VC firms don’t have.)

Opel explained how they are a lot like a REIT, and he explained what a Business Development Company is. A slide showed dozens of firms that were either filed to go public, or rumored to do so, in the BDC space. The belief is that there is a massive bubble building.

Milken and the panel discussed the 20-year lifespan on patents and how it might be better to have it be 75 years like copyrights. If this happened there would be more investment.

Here are some slides.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN

QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE,

BUT I’M GIVING UP PERFECTION FOR SPEED”THAT IS THE NATURE OF BLOGS!!

Milken Lunch: A Discussion with Nobel Laureates in Economics.

Gary Becker

Daniel Kahneman

Michael Milken

Myron Scholes

Michael Spence

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Gary Becker introduced Myron Scholes and discussed options and the impact the uncertainty in the movement of

securities has in determining the true value of an option.

Milken had each person on the panel introduce another panelist, which was entertaining and informative.

Myron Scholes introduced Michael Spence. I didn’t understand his description of Spence so I’m going to have to

Google that.

Michael Spence introduced Daniel Kahneman. He talked about Kahneman’s work on how people behave in the face of

uncertainty and risk.

Myron responded to earlier discussions that criticized his work on options. I don’t mind discussion, but when one

said the invention of Myron’s theories should have been banned”- (laughing.) He discussed the expensing of options and

its effect on corporations and said that those in favor of not having to expense options are not objective and don’t

look at the evidence. Myron believes that options should be charged as an expense and that it should be counted at the

time of the grant. He commented that some believe the exercised value (i.e. when the option is exercised) should be the

cost of. He doesn’t believe in this. The main point in the discussion today should not be whether you can value

options, the main question we should be asking is what is the nature of the contract between the employee and the

corporation. Some would argue that the contract is a 90 day contract…. if you leave you have 90 days to exercise.

We should look at the option as a 90 day contract. The mistake people make is looking at this as a ten year contract.

If we expense options we will create a better incentive structure. Why should we change the rules in the US and destroy

our competitiveness? Europe and Japan has adopted this rules so who are we competing with”the 3rd world I guess (huge

laugh.)

The panel got into a side discussion on the ability to patent their economic theories, and how they do not get

royalties when people use their economic theories.

Daniel Kahneman: Discussed the size – that in the US you get 30-40% more food on your plate then in other countries.

He said that once the food is on your plate we don’t have control.

Gary Becker: I agree with a number of things Danny said. If you look at weight gain in the US”and the US has been a

leader in this (huge laugh.) He said weight gain started to speed up in 1980. What happened after 1980? He mentioned

three of four factors: the cost of junk food has gone way done. It is much cheaper to get it thanks to technology to

prepare (he mention French fries.) Secondly, the sedentary nature of the teenage population has changed significantly.

He mentioned TV and computer activity, and that work is more sedentary.

Then showed a slide with an escalator leading up to a gym (huge laugh.)

The third factor is a tricky and difficult one, and I don’t know how much weight to put on it. We are in an

environment where medical progress has sped up. He says that the people are less concerned about things like weight

because they believe that in the future we will have drugs to solve cholesterol problems and sex enhancement drugs

(i.e. Viagra.) He says this is all conjecture, but he believes it. We’ve only seen this increase in weight in the past

25 years.

Milken paraphrases the concept as “I can do what I want today and I can take a morning after pill.”

Michael Spence compared this to destructive behavior being covered in insurance. He suggested that insurance have

more discounts for people who were safer.

Gary Becker addressed that the breakdown of the nuclear family might be a small factor.

Milken went back to this concept of “I can do this” behavior “because there will be a solution down the road.” It is

rational to eat fast food because we have already calculated that there will be a cure.

Daniel Kahneman: When fear is reduced the incidence of that behavior will increase. He is not sure if this applies

to a teenager going to McDonalds and ordering a huge order of fries. Daniel continued that he doesn’t think that it is

rational to assume a cure will be found and then go engage in dangerous behavior.

Gary Becker on K-12 system: I think one word: competition. Why is it that in the same country we have a system of

higher education that it is the highest in the world… and why is it at K-12 that we know there are serious problems.

There is one major difference; in the US we have a very competitive higher education system. He talked about how we

have hundreds of excellent colleges, and hundreds of thousands of ok to good colleges. He mentioned how the colleges

were competing very hard. You go down to K-12 and you have very little of that (competition.) The middle class and the

rich have the luxury of having that choice (picking a good k-12 school,) who are we short changing? He says the inner

city and rural kids who don’t have a choice, because of the public school monopolies that have been controlled for

decades by unions. He says we know that a monopoly doesn’t provide as good service by its nature (enthusiastic

applause.)

Myron Scholes: discussed how you motivate those people in K-12 about the importance of math in business later on. He

believes the lack of information given to the importance of the knowledge provided in K-12.

Daniel: If we think about the countries that we envy in K-12 it is not competition. He thinks it is cultural. He

discussed how being a teacher is a high-prestige job in other countries and that here it is not. He doesn’t think it is

competition but primarily poor human capital.

Michael Spence: Competition when you can have it is very beneficial. The federal government invests a large amount

of money into research and it is primarily into universities. He believes this is done extraordinarily well and is a

big reason why our universities are so good. He said for some reason we lack a system of allocation of resources in

primary and second education that has the meritocracy system that we have in higher education.

Milken asked if he would advocate pay based on performance and he said yes.

Gary Becker points out that there is only a segment of K-12 that has problems, and it is the area that needs it

most. He pointed out that 25% of African Americans drop out of secondary school.

Gary Becker: Talked about India and poverty. He talked about the clamoring for aid to India, and that it didn’t do

much good. When India reworked its policies things got better. India’s problems were India’s creation he said. He said

it was hard to do business in India because of all the red tape. He said in 1991 the business reforms, and that once

they did that things got better and they now have a 6-7% growth a year. He gave another example of China and how when

they changed their policies things in those countries got a lot better. He said it would be great if a Muslim country

could become self-sustaining in terms of growth (i.e. not oil.) He said that would do more for terrorism then anything,

and he said that it was the Muslim countries fault that they have not had significant economic growth”not ours.

Milken showed slides about how the value of a company was 75%+ based on human capital and how our policies on

keeping human capital out could be a huge mistake.

Gary Becker believes this is a bigger issue than the trade deficit. The immigration problem can be separated into

three components. One, aside from the terrorism, what is the legal level of immigrants we allow into the country. He

felt it was too tight. He said the second issue is that given we are in a world of terrorism, and he gave the example

of the 19 people who did 9/11, how do we balance the legitimate demands on how we control limiting terrorism with

people who want to come here to learn. He said we are discouraging people from coming to school here, and these people

are going to the good schools in Europe. We need to have a more discriminating policy.

Daniel agreed with Becker.

Myron discussed how when there is a shock it takes time to move back to a more sensible position (i.e. the post

9/11-shock.)

Milken asked if this was all 9/11 or competition from other countries?

Michael believed it was both. He talked about how the world now understands the value of great universities and the

people they produce. He said this is good because of the value of multi-national research. He said he hopes that things

change, but he thinks terrorism is here to stay and we have to learn to adapt to it.

Daniel discussed the problems with the United States concept of treating everyone the same, and that we might want

to rethink that (i.e. maybe some countries are more likely to pose a terrorism problem then others.)

Milken brought up Pakistan and how quickly they are growing, how bad their education system is (highest illiteracy

rate in the world) and the fact that they have nuclear weapons.

Gary said Pakistan is one of the scariest counties in the world because it has nuclear weapons, a very unstable

government and poor economic system. He says it is solveable in principle.

Milken asked Gary how he would solve Pakistan’s problems.

Gary talked about how India, with a billion people, solved its problems. He said he didn’t think population growth

isn’t its problem, he believed it was economic policies that were holding back its growth and trade with the rest of

the world. India had a demonstration by watching China growing from the 80s on, and India decided to take note. He said

they cut tariffs, reduced quotas and cut red tape and India discovered in two years that it could begin to grow. He

said the campaigning in India is no longer religion by economics. He said this could be done in Iran, Iraq and

Pakistan. He said economic aid will not do it. He said modest reforms will give you significant growth in a global

economy. We have to get that into their political process and convince them to do it.

Milken brought up energy policy.

Gary discussed nuclear power and how we get 15% from it. He said France gets 70% from it. He says that it has become

a closed issue after Three Mile Island. He believes that the energy discussion is flawed because we don’t have a

goal.

Milken summed up by saying patriotism isn’t going to do it and that it was clear that economic policy was the

solution.

My Notes on the “ Impossible Thinking” panel yesterday at Milken.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE, BUT I’M GIVING UP PERFECTION FOR SPEEDTHAT IS THE NATURE OF BLOGS!!

Moderator Yoram Wind described an experiment in which people were asked to watch a video in which two people in white clothing are throwing a ball back and forth. They are asked to count the number of times the ball is passed. At one point in a video a person in a black gorilla outfit would come across the screen, bang their chest and move on.

40-50% never saw the gorilla.

He questioned what black gorillas we miss every day.

He also mentioned the breaking of the four-minute mile. It turns out that 16 people broke the 4-minute mile within a year of the first person that did it. He said that the mental model inside the runner caused the sudden breakthrough. It was believing that you couldn’t break the four-minute mile that was holding them back.

The CEO of Starbucks talked about the firm being founder in 1987, going public in 1992 with $100m in revenue. Those revenues were now $4.1b. Compound growth rate is 40%. The market value of the company grew from $300 to $13-14b. 8,000 stores currently with 1,300 new stores a year (3+ new stores a day he said).

He discussed how the company is a vastly different company today, and how a frappuccino would never have occurred in the early days. He said Frappucino was now 20% of their sales. He talked about the five-year battle that finally ended with Starbucks selling coffee/beans in supermarkets. At first they didn’t think they wanted to be part of the supermarket experience, but eventually they felt their brand was strong enough. Turns out customers only bought coffee in supermarkets.

He said their 30-year goal was to become the most recognized and respected brand in the world. We’re taking on Coca-cola. I don’t know how many things we’ve passed up, how many gorillas we’ve missed. However, I think our success has to do with our culture more then anything else.

We are never content with what we achieve. Good enough never is. We inspire our people. They create the experience that keeps you coming back and back to those retail stores.

A speaker from the CIA (right, on an earlier panel) was happy, even thrilled, about all their advances. She talked about a really innovative and controversial program where they were sending out scenarios and intelligence to science fiction authors to get their feedback. They were also reading novels for plot ideas.

Uhhh hello? Isn’t this the plot of Three Days of the Condor (and the book it was based on)?!?!

Now, I was already kind of insulted about her happy-happy demeanor, which excluded all of the failures in intelligence we’ve already had. This is a very sober subject and her attitude just wasn’t serious enough for me.

No questions were allowed (bad choice by the producers IMHO), but I found the woman from the CIA after the panel and asked her about the novelty of her concept of using authors to do scenario planning given Three Days of the Condor.

She said that was just a film and that now they are doing it. I replied that it was scary that the CIA’s ideas lag the movie industry by 30 years. She was not amused.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE, BUT I’M GIVING UP PERFECTION FOR SPEEDTHAT IS THE NATURE OF BLOGS!!

A Discussion with Nobel Laureates in Medicine and Science

Speakers:
Murray Gell-Mann, Nobel Laureate, Physics, 1969; Distinguished Fellow, Santa Fe Institute
Moderator: Michael Milken, Chairman, Milken Institute; Chairman, Faster Cures / The Center for Accelerating Medical Solutions; co-Founder, Milken Family Foundation
Steven Chu, Nobel Laureate, Physics, 1997; Chair, Department of Physics, Stanford University; Theodore and Frances Geballe Professor of Physics and Applied Physics, Stanford University
Gerald Edelman, Nobel Laureate, Medicine, 1972; Director, Neurosciences Institute; Chairman, Department of Neurobiology, Scripps Research Institute

Edelman discussed how we are at an extraordinary point in the arc of science because we are starting to understand, from neuroscience, consciousness. He talked about the billions of interconnections in the brain. We can now measure what happens in our brains, through the magnetic currents, when an object is entered into your consciousness.

Gell-Mann: After Jerry did his dissertation on the importance of consciousness and advances in science that evolution breaks down to one thing “Get food, yes. Be food, no.” (big laugh.)

Milken showed an emotional video clip of Galileo renouncing everything he had taughtthe sun being the center of universe.

Gell-Mann: When a wrong principle is believed it shuts off a lot avenues of thinking.

Steven Chu discussed fighting diseases. He showed a slide of deaths by infectious diseases, and how policy to avoid the spread of them and to find cures makes them more manageable. He said the government might not be spending our disease-fighting money correctly.

Milken: How would you spend it.

Steven Chu: Most should be going to prevention, once someone has AIDS the treatment is very expensive and there is no cure. He showed another slide regarding the high-costs of AIDS drugs.

Chu: Explained a policy to fight AIDS called “ABC.” Abstinence before marriage, Be faithful during marriage, and then use Condoms. He discussed what a problem it was to not promote condom use early on and that it was primarily a religious issue.

Murry: The religious extreme is causing an extreme amount of damage in many different ways. He pointed out a number of examples of religious extremists attacking science including condom use and the use of stem cells. The attack on scientific theory is another one (problem.) He examined how the Supreme Court might rule differently these days on science issues. He railed on post-modern, post-intelligent (big laugh) professors at universities who look at science as a popularity contest. In Government is it necessary that scientific advice be relatively free. The government should tolerate reports by scientists they have brought in, and not suppress those reports.

Chu: Discussed an example of this, especially how the White House is ignoring studies on global warming. The reports showed that the earth is definitely warming up over two or three reports and these reports were dismissed.

Murry: Gave an anecdote about how his science committee for Nixon was disbanded. He discussed working with Gore and Clinton with the committee.

Edelman: Discussed the virtues of being on the West Coast, and how it is easier to raise a family on the West Coast.

Milken asked Chu about the effect of 9/11 on students coming to Universities.

Chu: The number of students, grad and post-doc in particular, is dramatically decreasing. They are basically being hassled, so they are simply saying they can’t put up with us and they are going to Europe now.

Milken: Do we need to rethink our fuel sources?

Chu: Discussed how wind was far ahead of solar.

The panel discussed the water issue, and Chu pointed out a rumor he heard that Coca-Cola was buying up water sources in the Amazon in case there is a shortage. They pointed out the major issue was getting the water to the people who needed it.

The panel discussed issues around global population and pointed out that education for women is the best way to control population growth.

Edleman talked about interdisciplinary work as a key to success of the human race in the future.

Great panel overall, again so high-level that many in the audience had a hard time getting their minds wrapped around it.

David Shulte’s Cultural Convergence Panel was perhaps the best moderated and most animated of the event to date.

What follows are my notes.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN

QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE,

BUT I’M GIVING UP PERFECTION FOR SPEED.

Speakers:

Chase Carey, President and CEO, DIRECTV

Thomas Kalinske, CEO, LeapFrog Enterprises, Inc.

Leslie Moonves, Chairman and Chief Executive Officer, CBS

Moderator: David Schulte, Vice Chairman, American Vantage Media

David Neeleman, Founder, Chairman and CEO, JetBlue Airways

Orin Smith, President and CEO, Starbucks Corporation

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Orin Smith said that they are not following culture as much as making culture. There is a need for that opportunity

that people find in coffee houses to connect and communicate. It involves entertainment, music. Our stores have been,

from the onset, a theater. He mentioned that the barrister is on a stage, and that it was an innovation and deliberate.

We have changed the way people have lived their lives. We’ve changed how they reward themselves. We’ve changed where

they meet for business. We affect the way they feel about themselves, and their entire day. He mentioned this

translates very well to other cultures around the world.

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hspace=”4″ vspace=”4″ width=”400″ />David Neeleman (on left across from Starbucks’ CEO Orin Smith): We’ve been around a

short period of time in terms of brand years. We just reached a billion dollars in sales in our third year of business,

and it’s been during a bad period of time in our industry. We started out with a basic concept that we wanted to bring

humanity back to air travel. He talked about how flying went from glamour to drudgery over the decades. He mentioned

that they have no passengers, but only customers. I was kind of a dumb kid from Salt Lake City when I came to New York.

My feeling was that our brand would be created with every single interaction with every single customer on every single

flight. Some companies get it all backwards. They think they can repaint their airplanes and put TVs in their

seatbacks… I don’t believe that is sustainable. He mentioned it is more about culture and stock options. He says

nothing has changed in 40 years except the seat in front of you got closer. He said when he saw the ability to have

control of a TV that it was something he immediately grabbed onto. It’s an important part of what we do, but it’s not

all we do. I have a saying that “Too much overkill is never enough.” He says all the little things they do let them

“Levitate above a commodity business.”

Les Moonves; Are brands and artists not in synch with Cultural convergence… what does that mean? Yes we reflect the

culture, and we are also the culture. And that proves to be a challenge.

I want to be as edgy as possible, I want to reflect the culture as much as possible.

There was a saying when I got here “Television networks are not a brand, shows are a brand. ” I don’t buy

that. One of the challenges is the PVR. How product place is integrated into our shows… that’s the future of our

business. Over the air broadcasting is still the best game in town. The old model is not working so well (a 30 second

spot,) but it is still the best way to reach the audience. If you want something out there, you want it immediate you

want it broad, we’re the people.

Chase Carey: what we really find is that people want choice and quality. Direct TV has led the way in that. It has

been a key component of new services like the Fox news channel. Chase mention when kids networks were pulled off

another dish network (echo I believe) mothers went nuts. PVRs will continue to give more choices.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN

QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE,

BUT I’M GIVING UP PERFECTION FOR SPEED.

Shulte: this issue of indecency and the FCC. Do you find yourself at an advantage?

Chase: We have a responsibility, we are a brand to the home, we have to be responsible. Yet we want choice. He says

the four networks are being attacked in a disproportionate way.

Thomas Kalinske: Even when we started leap frogging retail, buyers and analysts said education doesn’t sell. Last

year we did almost 700M in revenue. The fundamental change is that in culture and society moms and dads have said my

God my schools aren’t getting any better”if not worse” but I’m working 12 hours a day, how am I going to do this? He

said that is where Leap Frog came in. I don’t think we changed culture, I think culture came around.

Shulte: is a Snoop Dog Frappucino on the way?

That’s a great idea. No, we really haven’t used celebrity marketing very much. We have put an emphasis on

authenticity, and like the Jetblue brand our stores are our billboards. They announce our presence in the market. Once

they are in that environment we try to create an uplifting and memorable experience. If we try to buy celebrity status,

to buy the integrity then we will fail. It is too much in conflict with that authentic coffee experience we try to

create.

Our marketing budget is only 1.5% of our top line. We do very little of the traditional kind of marketing and

promotion. We could drive our top line with it, but we are too fearful that it will impact our brand in a

negative way.

DISLAIMER: THESE ARE MY NOTES. THIS IS NOT A TRANSCRIPTION. IF YOU ARE FROM THE PRESS DO NOT QUOTE THIS AS SPOKEN

QUOTES. I’M SHARING MY NOTES WITH EVERYONE TO GIVE SOME COLOR TO THE EVENT. THERE ARE TONS OF LITTLE ERRORS IN HERE,

BUT I’M GIVING UP PERFECTION FOR SPEED.

Neeleman: It is important that we continue to develop our entertainment side. We have 24 channels and we are going to

36. He mentioned they are adding XM Radio and two Fox channels that will play movies and Simpsons episodes. He

mentioned that if they charged people $2-3 a minute it wouldn’t work.

We spend 3% of our revenue on marketing, and it has come down from 10% in our first year. 60% of our revenue comes

from word of mouth. He added how kids were driving their parents to take JetBlue because of the TV, and parents wanting

to take JetBlue.

He mentioned that they want to increase what people get for what they pay. He said people are smart and they like to

feel like they got a great deal. He mentioned there are no plans for a Snoop Dog endorsement.

Moonves talked about product placement being the future of his business. Not to sound like too much of a

prostitute, if the deal right we’ll make it work. He referenced Spielberg doing product placement in AI “every 12

seconds” as the reason why other creative types are willing to do product placement and work with advertisers.

Orin said that WiFi has been great because they have people coming to the counter two or three times. And he joked

that he didn’t have to pay for the infrastructure. He said now people who want WiFi customers are building out the

networks. He said it is easier for him to sell space in his stores, but that eventually it would marginalize the brand

in a major way.

Orin joked about how they were reluctant in going into Europe because European coffee culture is great and that the

people in Europe are very proud. He said he is not sure how well they can compete. He said that he was having 30 minute

wait times in Paris, and that they are making the store more “French.”

Schulte asked if one of the changes to make it more French was to have less good service. Huge laugh from the

audience.

Neeleman said that the security delays have not been a major issue and that people were patient and understanding.

We’re starting to realize that we are living in a different world. Like the Israelis. These things are going to happen

and we can’t stop living.

Schulte: asked about people clustering at various news sources based on point of view, preference, etc.

Moonves: There is no question about it. Fox news has a done a brilliant job. Forget about fair and balanced, it’s a

misnomer, but they decided to put a different team on the field. I admire what they did. They took a point of view and

went with it. I am disturbed by the lack of discourse. There is a tendency to not be open to different ideas. It is

defiantly hurting our culture. I’m very disturbed by America’s image around the world right now.

Schulte: Asked about reality TV.

Mooves: Ironically reality TV was one of the few things we’ve imported. It was a welcome thing that we learned we

we’re not the only ones that could come up with good ideas.

Milken hosted a panel last night that was, in a word, brilliant. For over two hours he orchestrated incredible speakers, movie clips,famous quotesand hard-core statistics. I fear that it was lost on those in the audience who checked out early to network at the bar, but for those who stayed it was a real treat. Milken’s passion for the topic, the future of mankind and what defines us as humans, was apparent as his energy only increased as the conversation got deeper, more philosophical and spiritual.

One of the hard parts about spending the last couple of months in LA has been the dearth of intelligent conversations that take place in LA. Last night was like an oasis for meif only there was a dinner party once a week in LA where smart people came together to think and talk. Man I miss New York.

Here are some photos, I’ll post some more comments about the talk if I have time. More on the panel here.

Michael Milken, Chairman, Milken Institute; Chairman, FasterCures / The Center for Accelerating Medical Solutions; co-Founder, Milken Family Foundation

Lee Hartwell, Nobel Laureate, Medicine, 2001; President and Director, Fred Hutchinson Cancer Research Center, Seattle

Charles Elachi, Director, Jet Propulsion Laboratory

Arthur Caplan, Director, Center for Bioethics, University of Pennsylvania

Sherry Turkle, Abby Rockefeller Mauz?rofessor of the Social Studies of Science and Technology in the Program in Science, Technology, and Society at MIT; Founder and Director of the MIT Initiative on Technology and Self

Danny Hillis, Co-Chairman and Chief Technology Officer, Applied Minds, Inc.

Steven Chu, Nobel Laureate, Physics, 1997; Chair, Department of Physics, Stanford University; Theodore and Frances Geballe Professor of Physics and Applied Physics, Stanford University

I’m in the Insourcing/Outsourcing Breakout session hosted by Dennis Kneale, a really smart guy from Forbes that I’ve met at another conference.

The round table is sponsored by Talisma Corporation, and featured the following speakers:

James Flanigan, Senior Economics Editor, The Los Angeles Times
Dennis Kneale, Managing Editor, Forbes magazine
Dan Vetras, President and CEO, Talisma Corp.

Summary: Join what promises to be a lively discussion moderated by Dennis Kneale, Managing Editor of Forbes Magazine, as participants get real about issues related to current outsourcing trends and their relative impact on the U.S. and global economies. Central to the discussion is how U.S. companies benefit, what the perceived and real impact is on U.S. job creation going forward and how technology and market forces will take advantage of this new worldwide dynamic.

More comments to come.

Note: Dave Neeleman the founder of JetBlue is sitting in on this panel. I interviewed David for Silicon Alley Reporter and I was able to catch up with him before the panel.

The panel discussed what would happen to the people who are losing their jobs and why they are losing their jobs.

Our failure to effectively catch up with our education system came up over and over. By the time we educate people on technology, computers and programming those jobs went overseas. Now we’re telling people that they need to learn biotech, but those jobs will also clearly be overseas.

I brought up the topic of lifestyle businessespeople creating businesses that support just themselves, or a couple of people, as the future. My thesis is that since execution is a commodity, perhaps the ideas are not.

David Neeleman of JetBlue (right in the middle with the blue shirthello) said: Over the last four years we created 7,000 jobs average pay is about 50,000 a job. We’ve tried to revolutionize an industry. There needs to be, like the steel industry, these old line industries, but they have been a drain on their industries. What disturbs me about this outsourcing is that the people who talk to our people on the phone are the most important people.

David discussed how they have their call agents at home in their fuzzy bunny slippers. He talked about how important the call agents were, and how letting people work from home gave them an extra perk that made it an easy decision to work for JetBlue.

David continued: Delta airlines who tried to kill us visited our call center. We showed them because we thought it was the right thing to do. [Note: JetBlue is trying to educate people that they can do call centers cheaply right here in the US] We’re in the service business, so you have to have good service if you are going to be able to distinguish yourself.

I met with the CEO of Opera on a speaking gig in Norway and loved the company and their light, feaure-rich browswer. I told two or three major CEOs here in the US to buy them, but it never happened.

Anyway, I just found out their new browser supports RSS feedsthat’s a first right? I’m going to download it tonight and play with it.