And you are here why?

Ashwin Parmeshwaram elaborates on something that I have long suspected, viz., the conventional wisdom on "Maturity Transformation" is basically bullshit . First, a definition Why do banks exist?  The conventional wisdom goes like this – depositors prefer to hold liquid risk-free assets and borrowers prefer to borrow for the long-term to invest in risky projects. Banks sit in the middle of this process and perform a sort of alchemy. By performing this alchemy, banks leave themselves open to the risk of bank runs – if all the depositors seek to withdraw their money at the same time, even a bank with otherwise sound loans as assets can go bust. This perceived risk of a bank run is why governments and central banks provide deposit insurance and liquidity facilities to the banking sector, a privilege that is not typically available to other financial intermediaries. In other words,  banks exist for the purpose of maturity transformation. Sounds nice and nifty, right? Bu...

GigaOm reports on EyeIO , which provides video encoding technology that promises to save anywhere from 20% to 50% on bandwidth used.  From the article Standard-definition Netflix streams can consume up to 2.2 Mbps of bandwidth. Netflix’s 720p HD videos come in at roughly 3.8 Mbps,  and 1080p videos go up to 4.8 Mbps. EyeIO CEO Rodolfo Vargas told me during a phone conversation Tuesday that his company’s encoding technology can achieve better-looking results that most established encoders with 20 percent bandwidth savings, and that eyeIO can still deliver similar quality to other encoders with up to 50 percent bandwidth savings. Content in 720p could be streamed using 1.8 Mbps, he explained. The company does this by optimizing the encoding process, which means that the results are regular, albeit smaller H.264 files that can be played by end users without any need for additional plug-ins. Sounds great, I'm all for it, lower bandwidth utilization is Good, Kumbaya, et...