So my name is Stefano Maffulli, and I'm the community manager work at the OpenStack Foundation And today we're going to talk about a little bit About the tensions inside the community and try to have a debate A lively one, so we're going to be welcoming questions also from the audience to gentlemen have agreed to represent Two sides of the community if you want So why don't you guys introduce yourself with better words than I could be using I'm Randy bias the CEO and co-founder of cloud scaling We're well known and regarded for doing a lot of the early production OpenStack deployments for Korea telecom Internet and AT&T And before this I have a long history in the cloud I worked at a company called go grid which was the second public cloud provider in the United States and I built the startup before that that was a right-scale competitor that was I essentially a cloud application management dashboard And I prototyped that on Amazon's elastic compute cloud in December of 2006 while it was in private beta before most people knew what cloud was and before That terms had been Coined and I've been blogging and talking about cloud at both the infrastructure and application layers ever since Hard to hard to match that Scott Sanchez director at rack space and do a lot of evangelism Join rack space about two and a half years ago to help build out the OpenStack ecosystem and Working with Mark Collier and the team that has moved on to the foundation and Jim Curry and those folks to Help a lot of folks just understand the value of OpenStack and what it can do for the users once we all work together to build something and bring it together, so We kind of proposed this talk we submitted similar talks that got voted on reasonably equally and Figured out how to combine them and just say hey, let's let's represent You know Randy's kind of grew up on the on the infrastructure side and very heavy view of how all that should come together And I've been more focused on the user side and that's hopefully what we are going to talk about today A frost dichotomy, but it's okay. It is I mean I spend as much time on the infrastructure as you spend on the users But it's right. It's definitely we have to pick a side here. So those are the sides we picked today So let's let's get started then since you already mentioned it I You know OpenStack as a project has been growing very fast very rapidly. It started with developers started with solving solving problems and it's been Historically probably driven by developers meeting at the summit the initial summits if you think about it We're just the design summit, which is now a very small session a set of sessions down do in the corridor and the the user side of the Summit itself has become much larger. So How do you how do you guys see this this? Tension between users on one end that demand features and the infrastructure or the developers Driven development of OpenStack Is there what what's your thought? What are your thoughts? So I got asked at the end of my AWS repatriation talk on Tuesday I got asked what do you think the biggest challenge is to OpenStack and I had to actually sit back for about 30 seconds and think about it and You know some of this stuff's been percolating for a while and that and the sort of epiphany I had right at that moment and that I explained to the crowd was that there's sort of a disconnect between the wishes and desires and intentions of not to but three different constituencies You have the end users of the cloud and from now on for the rest of this debate I'm going to refer to end users as people who consume the APIs of a cloud the publicly facing APIs to deploy applications You've got the developers around OpenStack And then you've got the operators the people who build deploy and actually run a production system of OpenStack and their desires are very disconnected The end users all want standardization and interoperability. They want a common platform They want OpenStack to be ubiquitous so that they can build apps and have them have them run on any OpenStack cloud The operators all want to be able to get in under the hood of their car and hot rod it This guy over here says we're a VMware shop. We've got to have VMware that guy says I need EMC that guy says I'm doing and that guy says I mean I need VLANs and so on and so on every single one of those guys Kind of wants to have it their way on the cloud operator side in the middle You've got the developers who have mostly to date been taking input from the cloud operators And to some degree ignoring the end users of the open of these OpenStack systems the deployed systems and the developers You know with no offense meant largely are trying to scratch an itch They're here because they can do innovation and they can build something new They're very excited and you know that passion is great for the community But a lot of the times disconnects show up in terms of what the developers deliver as it doesn't necessarily feed Especially the end users and also quite often the cloud operators actual desires. I Definitely feel the disconnect and have for years between the developers that are here and Designing what should go into the next release and what I hear when I go out and I talk to SMBs or startups or enterprises about what they want to do with it. I think they're there really is a disconnect Between the developer group and the consumer group of users, but the the providers. I also think are Working for a provider you came out of that space as well. I think that there's there's often a disconnect there between Where a provider thinks they want to add value or be differentiated and where the end user the consumer user Actually wants to see that value. So you mentioned I want to pick a particular kind of storage or I want to do something Different at the infrastructure level So the developers that are here that are building OpenStack Feed on that because that's that's the cool stuff that's happening But the end users don't necessarily get the value out of that or they may not be ready to consume the value out Of that for two years and there's a lot of things that could have been happening in the meantime to make their lives easier Or make the outcome for them better so What what you're saying is that what I hear you saying is that you have we have this tension and Maybe the project since it started without an architect in mind without having The one person that has the vision for the project and where the innovation will drive Is how is that shaping the innovation inside OpenSack? How is that because I'm you know, I'm going back to some some Some wasn't it Steve job that said the users don't know what they want You have to tell them you have to give them the innovation because if you wait for them to innovate They will never do it maybe an offensive way of describing the users of Apple products, but in what what do you think? I mean we don't have that Steve jobs inside OpenSack Is that a limitation or how do you think the innovation will be coming from OpenSack? I mean, that's a really hard question to answer I mean we're a different community than the other open source communities that came before We're charting our own course in many ways And I don't think it's fair to compare it to a sort of communities that have had benevolent dictators On the other hand, you know, you definitely see Some shortcomings in the technical decisions quite frequently in OpenSack For example, the default networking model is completely and utterly broken in every way possible that you could pop That you could imagine for a production system and it hasn't been fixed in you know years And if you probably got you know, ten different developers around the table to talk about it They give you ten different answers about how to fix it and none of them have a network background Right and so that's a little bit of a problem On the other hand, you know, I do like this democratic process I do like the fact that we come to conclusions by going through a struggle of ideas Where the best ideas rise to the top I mean, you know, I put a lot of effort into building a cloud scaling team to have a certain amount of diversity of opinion And I got a lot of opinions back home And you know, the whole reason for that was to build a team where people could find each other's blind spots Because quite frankly in the early days when we built off of my single opinion as the benevolent dictator I made a lot of bad calls in terms of the technology I made some good ones I made some bad ones But what I didn't have was a good track record and no individual I think can have a good track record But a group of individuals acting as a team can actually work together to have a very good track record In tactical and strategic decision-making from a technical architecture point of view But you actually have to construct it that way We don't really have an architecture team to replace that in OpenStack, right? Amazon Web Services has an architecture team, I don't know if people knew that You know, I have an architecture team, you know So why doesn't the OpenStack community have an architecture team to supplement the technical committee that can really provide input, right? Because at Amazon Web Services how it works is that if you want to do something new or different that's going to change the architecture You have to take your idea out to Werner Vogels and James, I forget what his name is, Marova Madrova Huh? James Hampton James Hampton, thank you And there's several others there and then you basically have to prove that your idea is valid And they beat up on you and you have to keep coming back until, you know, something comes through So that's, it'd be nice if we had that It's a different kind of meritocracy It's a meritocracy with a little bit of a wisdom and oversight added So I think that the way that we as a community do code review as things get written and committed and checked When we look at the user committee and some of the recent efforts spun up around that Talk about an architecture overlord group that keeps track of things I think that that group shouldn't necessarily be technical architects as much as it should be users, right? And so when you think about a feature, you think about a decision or a direction that fundamentally alters the path that we're on I think it's the users that should have to kind of check the box and say yes And that user group isn't just the end consumers, it's also the providers and the operators and other things I think a lot of the decisions that get made here at the summits and in between are driven by kind of the new hotness Or, you know, what the vendor that they're representing is in the market selling And that doesn't always necessarily bring the best outcome for the end users Having said that, we've made a lot of great decisions And the number of users that are here consuming the platform is evidence that for the most part we're doing the right thing But like you said, there's been decisions made along the way or new projects spun up or other things that users may look at and not feel great about End users can't make architecture decisions End users are for providing requirements into the system And so as those business requirements are interpreted, you figure out how to build an architecture that serves those business requirements It's like going into a doctor's office and telling them, I've got the, you know, I've got the plague give me penicillin, right? I mean, you can't go in and do the diagnosis yourself because you're not the expert What you can go in is you can go in, you can explain your problem, and you can actually help the doctor understand what you're trying to accomplish And then they can actually solve it for you And I think that's finally happening, right? We've got a large of mass of users, whether it's service providers or the bigger group Which are the people building applications on top of OpenStack That a lot of that's happening back through the folks that are now representing, right? If we look up through Diablo, Essex, there just weren't really a lot of users to have those conversations with But there are now, and I would guess that most of you have had actual conversations with actual customers about what they'd like to see in OpenStack How they wished it worked Let's And so I'm not saying that they should come in and dictate the technical architecture Let's stop using the word users I'd like you to use either operators or end users because right now if you look at the user committee There are three people on it, and they represent cloud operators Right Ryan Lane from Wikimedia, Tim Bell from CERN, and JC from eBay And all three of them are built and operate their cloud, they are not the end users So that voice that you're talking about, I totally agree I think we're in alignment that it needs to get in there, but it's not there It's not there today The user committee does not have end users of OpenStack in there, you know, basically giving that voice And I completely agree that we need their requirements in the system And I think that it would shake loose a lot of this crazy spaceship building that you sometimes see in the OpenStack community Like, you know, does it make sense to go build X, Y, and Z if, you know, the actual end users who are consuming OpenStack clouds Just don't care not consuming that Yeah, I completely agree, I think that the method that that occurs in can't be in a vacuum user group The stats and the data that's coming End user group The operators, to me, are almost the least important group Yes, I agree The operators should have the user committees in their own companies that drive what they want to say But the mass group of people that are over time going to make OpenStack more successful is not the operators It's the people consuming the things that all of that is providing It gets, we got to that point finally We got to the point where we finally facing developers that are using the OpenStack clouds OpenStack powered clouds And when we get to that point, we start to getting a little bit probably closer to other set of problems And Randy had a blog post during the summer about this, about talking to these developers And maybe you want to discuss a little bit about what are the differences The new things, the new challenges that you end up facing when you go beyond OpenStack itself as the software When it starts running on top of real infrastructure and when you start bending OpenStack with opinions Giving opinions to OpenStack to an OpenStack powered cloud What is that entails for developers? Yeah, I mean, I guess it's funny because I started off in cloud actually at the application layer Building this tool that would deploy applications on EC2 So even though I am mostly historically an infrastructure guy I have a lot of hands-on experience actually using these public and private clouds as a developer and user Writing Chef code, writing Ruby, all that stuff Writing low-level stuff to call the EC2 API, XML parsing, like pretty in the weeds stuff The thing that became really apparent to me while I was at GoGrid was that The infrastructure is, even though it's sexy right now, is pretty much totally irrelevant from a business point of view There's no inherent value in infrastructure Nobody gives a shit when it comes to the business It does not make, if you have an EMC VMAX, right, deployed, and your competitor does Like neither of you has competitive advantage over each other All of the real business value is up the stack from the infrastructure and the platform and the applications That's where the true business value is But instead of paying attention to that and saying, okay, let's standardize on what the infrastructure looks like Let's only have a few flavors Like there's only a few flavors of electricity or a few flavors of Linux distributions What we have is we have a bunch of snowflakes Every open stack deployment is its own snowflake that's completely unique Everybody when they want to play with it, open stack wants to build a yet another snowflake Because they feel that they've got some different requirement So that they need to build their infrastructure in some slightly different way Which doesn't serve the purpose of allowing the end users to be successful And it confuses things in the development community because we're an inclusive community And the development community wants to serve everybody's request They want to serve the cloud operators and the end users They want to respond to the fact that this guy over here wants support For some strange esoteric storage system that nobody but him is going to use And if you look at the user survey results, you'll see there's a long tail Of all kinds of different technologies that people want to use with open stack And every one of those actually incurs some technical debt And I know it's going to be difficult to get everybody to rather run the table Around a few flavors of open stack that are essentially interoperable and compatible But it seems hard to realize the value of the platform and application pieces That we want to run open stack unless we can actually do that It's one of the things that makes me question why there seems to be a lot of friction As a community when we try and do things that are more up the stack To try and serve those end users better When you talk about the providers, they're trying to serve those same users But they're doing it really with some blinders on In terms of, like you said, thinking this storage will be better than the storage Or whatever it might be And that friction that I continuously feel up the stack Wherever it is, it is frustrating because as a community Those are the people that matter The folks that are building clouds with open stack We're trying to serve those users The people that are here learning how to build applications for open stack You are those users And a lot of the discussions that are had about Should it be this format or this format I feel like there's this divide between how much should we decide for them And push to them and say this is just the way it's going to be Should it be three flavors or 30 flavors? Should it be one kind of storage or 50? Should we push that to them or should we let them pull and tell us? I actually don't think enough of the people building applications on open stack Or any cloud for that matter There's not enough people that actually know what the heck they're doing yet And I do think that the smart people in this room need to tell them more As opposed to give them more choice Well, I feel like it's a dialogue I think that's part of what you're saying is that We need that virtuous feedback loop Where we get the requirements in that Don't tell me how you're sick Tell me what the business problem is that you're trying to solve So that we can talk about that It's that whole challenge that Henry Ford had around talking to people And they said, a car, what's that? How do I feed the car grass every 20 miles or whatever? I mean, I want a faster horse, make me a faster horse Except a faster horse is a longer process And you can have any color you want as long as it's black Exactly, so we're at this tipping point Where we're starting to figure out how to build these private clouds And deploy applications on them that are highly scalable and elastic And we need to get that virtuous feedback loop in there Not just an open stack but even the product companies That are building stuff on top of it as well Yeah, the folks that were here exhibiting And I was amazed when I walked in this morning That the entire expo hall is completely gone overnight But the folks that are here, I mean, we all have conversations With each other and with our customers every day And we've all got different things that we want to make available In open stack for whatever reason But I think you take a step back and you look at How is a user actually going to consume this over this? Is there value in doing this over this? Should we consolidate the way that they look to the users And abstract that complexity? Or do we expose that complexity? Is there value to the end users in those cases? And I think in a lot of cases the answer is no But the users don't necessarily yet know what they're supposed to ask for Right, to go back to the original question Do they know? One of the things that was emerging from your conversation Was that it seems that open stack is one project One set of code but still we end up getting A lot of different snowflakes type of different implementation So what you think is If the code is the same and we should have All the same clouds with the same behaviors What is going to be the differentiating business factor? Why am I going to be able, as a company Investing in open stack, how am I going to say I'm going to be better at this than another If everybody behaves the same So there's kind of two pieces there, right? So if you run the same software You don't necessarily have the same cloud I mean, people need to stop thinking about open stack As being like downloading my SQL and creating a database Create database foo, semicolon, boom, your database is up It's not like that, it's like downloading the Linux kernel Enrolling your own Linux distribution, that's what it's like And so, you know, all the choices you make Once you download it is what turns it into a snowflake Right? The simple example I gave on Tuesday During my talk is IP auto assignment I have two open stack clouds One I've got floating IP auto assignment And the other I don't Configuration options, same code, same release Completely different behavior, right? So that's a problem, that's why I keep ranting on The fact that we need these flavors Because then you can compare it, right? Is this an AWS compatible cloud, a Rackspace compatible cloud A vCloud compatible cloud, what is it? What kind of open stack cloud is it? And then the second part of the question was Remind me How to differentiate business How to differentiate So like, hosting providers have been very successful Like Rackspace, pre-cloud Without a lot of differentiation And the reason is that, you know Asking to differentiate infrastructure is like Asking to differentiate water and electricity, right? It's like, oh, am I going to get water from this guy Who's distilled it and has colored it red Or am I going to get water from this guy? No, you're just going to want to turn on the damn faucet And the water comes out, that's all you want Because what you're actually trying to do is the application Of that water, of that utility, right? You just want to boil something or cook something Or if it's electricity you want to power something You know, you don't really care about that Lowest level commodity So these service providers need to be looking At ways to actually help customers Solve problems where the business value Is that the platform and application layers Because that's fundamentally where there's true value Whether I use an EMC and you use a NetApp Or Seth or Gluster or something else That's, there's no inherent value In that infrastructure technology to a business Yeah, to use the water analogy, we want to make it easy To get the water when you need it and make it hot or cold When you need it and give you a comfortable glass To drink it in and that's where the differentiation Should be coming from, but you're right, a lot of people Are looking to re-engineer how the pipes look Behind your sink that no one will ever see Exactly Hey, this water comes out, you know, with more air in it I really don't care about that, right? It's evaporated before it gets to my lips How does it taste when I drink it And how easy is it to use I think Or where the differentiation needs to come from The whole experience of using it And how it benefits me is where the differentiation Should come from, but as a global community I think the folks that primarily are represented here Not all of us have made that journey yet Maybe this is a good time to ask for questions Ryan So I just wanted to make you aware of the three users Many members are all operators But we also have large groups of users Who also give us feedback from these organizations But past that, realistically, the reason that We've focused on operators so far Is because the feedback that we're actually getting From the community as a whole The priorities at this point are so dire On actually running OpenStack and making it work That it actually trumps any feedback That you're getting from the users The biggest feedback that we get Is that OpenStack is too hard to resolve And that it's too hard to operate If you can't get past that point You can't even get people to use OpenStack And that means they're not going to have users To begin with That said, our first iteration of getting feedback Is mostly directed to operators So our next priority is definitely getting it from the users Great Yes, sir I have kind of a super long response to some criticisms That you hear of engineering and the snow place Not criticism Observation Healthy debate and observation You say we should have a dialogue The way you have a dialogue in the business world Is you offer different products And you see which ones get bought That's what's going on with the snowflakes We're actually doing the dialogue In a way that makes a difference I'm not sure you're really honoring The significance of what the engineers And developers are trying to do Everybody who puts in a new kind of file system Or whatever, why aren't they doing it Because they think it actually delivers Something that's valuable to end users Right No, I value it But so I was a Rubyist for a while I haven't touched code for a couple of years now But one of the things that frustrated me the most About the Ruby community Is that at the drop of the hat They would reinvent a new piece of code Like, oh, I don't want to use a messaging system In Java So let's just write one in Ruby Because one doesn't exist That's great One out of 20 times Some amazing thing came out of the Ruby community The other 19 times Garbage came out And you would go out there And I as a Rubyist would try to use tools And I would go and I'd find out they were half dead There's not really any community around it No contributors And code isn't where it needs to be And I don't have the time to go fix that And it was very, very common There was almost like a graveyard of projects That were subpar And we're out there Just kind of taking up space in the mindshare And so I agree with you to a point But I think the reality is Is that we don't need to go out And invent everything in OpenStack There's lots of other things out there Why aren't we building our own database? Why do we use MySQL or MariahDB? I mean, we should be thinking about that And I'm not trying to criticize to criticize But why did we build Keystone? There's so many identity management platforms out there That are extremely robust Why isn't that a pluggable part of the system? And if we were going to build it Why doesn't it use OAuth 2.0 Instead of some bastardization That looks like OAuth 2.0 But isn't OAuth 2.0 and isn't interoperable? I mean, those are design decisions that don't make sense They actually hurt us and incur technical debt That is not good for the community, the developers, The operators or the end users So my only comment there Would be the way that we've done things like SDN In Neutron, right Where things are pluggable And it gives the community a chance to experiment And the users a chance to pick what wins I love that model, right Storage is the same kind of thing, right The way we started doing storage wasn't the best model It was a community we figured out Hey, we should have more drivers We should move this thing out Let people experiment more Let's figure out, you know, let's really innovate And so OpenStack, for example, has become the place Where SDN is coming together And where the real innovation is being driven from That's great, the users are picking the winners You can see in the user survey what's starting to take shape I love that Other decisions that we make as a community Whether it's about projects or related projects Or ancillary projects or any of the other names That we give things If you actually go back and look at what the users Are asking for, it's not always those things You know, you brought up databases as an example, right We focus a lot of time and debate, healthy debate But debate about different things That aren't always what the end users, The consumers of these platforms would be looking for If we ask them Okay, so we have so many flavors And we are fishing so many snowflakes As an operator or consumer of OpenStack Do you have any suggestions, you know, that we can make The best out of the currently known non-mayors? A lot of folks that are using the Rackspace Cloud Do that through some kind of abstraction layer And it's not necessarily the best solution You could argue for or against that model For a lot of companies But that comes from the fact that many people moving To OpenStack and OpenStack-powered public clouds Are moving from Amazon or moving from VMware Some other platform that they've already coded against And so to the Snowflake example There's some things which make even an abstraction layer hard Like the way I give you a network Or the way I authenticate you That doesn't necessarily just change your target endpoint And be done But I think you're going to see a lot of that No matter how hard we as a community work We're still going to have a bunch of that In the foreseeable future And they're going to have environments That encompass technologies that are in OpenStack too So I think you're going to continue to see Some of that abstraction layer Whether it's homegrown or some other project The important thing, you know, what I want people to take away Is that we do need the flavors and not the snowflakes, right? I mean, that's great that people want to experiment I want them to experiment I'm not saying don't experiment, don't innovate I'm just saying that for the stable production OpenStack deployments, you know There needs to be some opinion in there And they need to be somewhat more standardized And we need to use things like ref stack Which Josh and others are working on Combining with Tempest tests to test those flavors Like here's the AWS flavor Or what we call the elastic cloud flavor Here's the Google Compute Engine flavor Here's the vCloud flavor Here's Rackspace, public cloud, whatever they are And then, you know, people can actually check To see whether they conform to compatibility And interoperability with those systems And then, you know, kind of to your point, you know Hopefully end users will choose what they like And then, you know, the winners will rise to the top And we can all get where we want Which is, you know, the final emergence Of a few things that are dominant This car drives on the left This car drives on the right So I'm not saying this to pimp my personas talk after lunch At 1.30 in this room But I don't think the end user characterization Is even useful So you've made the distinction between operators And end users, I think that's good But you've got the people who buy the cloud You've got the people who deploy the cloud And you've got the people who operate the cloud And then you've got the people who deploy applications On the cloud And the people who deploy applications on the cloud Actually have very little input Into the technology choices of what gets deployed That's the problem So when you said users decide who wins I don't think they do I think the people who buy clouds decide who wins I think that the people who are building the applications That are influencing or even more and more making the decisions About where those applications should live Are ultimately the ones that are going to decide Who wins and who loses So if you're a provider You make a choice to build Snowflake A Version of OpenStack And that's not what the people Building and deploying applications Ultimately think is the best for them Then they've made the wrong choice And so I agree with you that the end users Of these things are not the ones influencing What necessarily is going into a data center What's going into OpenStack And what's coming out as the product But they should be And if they're not natively in our cycle They are at the end of the day with their wallets What's interesting is that the tension in our community Actually mirrors one that exists in the enterprises Which when you look at them They're sort of the centralized IT infrastructure teams And then there's application developers I'm talking about mainstream enterprises Not tech companies where it tends to be a little bit different And a lot of these application developers today They go to centralized IT folks And they're really trying to reduce their risk Of their deployment So they give this long laundry list of requests Including very specific hardware I'm deploying this application I need F5 load balancers Because I'm using iRules I need EMC storage and so on and so on And the centralized IT team Their whole purpose in life is to cover their ass CYA, that's how they have to make decisions Because they're on the hook if anything fails So in order to make sure that they can meet that request They'll say, okay, you want this much stuff I can give that to you for $10 million in 18 months But that application developer He needs to get going now Because it's all about tying the market for him It's all about trying to be successful And delivering new value to the business Well, maybe I'll go to Rackspace Or maybe I'll go to Amazon And I'll just get up with a credit card And go right now And he gets that much Or she gets that much of their actual requirements That laundry list becomes this And they fit their application to that system Now, yes, they had to conform to the infrastructure But on the other hand They got the value of getting to go immediately Paying by the drink and so on And I think that that's something that We have to think about If we want to help enterprise centralized IT teams The operators be successful at deploying OpenStack clouds The value of the OpenStack cloud has to be similar To the value of an Amazon or Rackspace Or one of the other major public cloud providers Because that's the only way for them To actually fix that sort of dysfunction Yeah, the biggest way the end users will get value Out of cloud, not just OpenStack Is to build for it And not try to build it for whatever broken Application development models they have now I just add that I think as the project started We were serving our own needs And that's why a lot of people were involved And users were us And users were us So now this is expanding The project's getting larger Now commercial interests are getting involved And we're getting some enterprise customers And end users starting to get interested So what I would just finish with is I think one of the real benefits That we don't have a benevolent dictatorship That we have a merit-based activity Inclusive organization That it's always self-balancing And so initially we were balanced Focused on just our own needs And as we evolve And we start including more organizations More applications running on OpenStack That will constantly be rebalanced In some decisions we've had But that's kind of the price we pay For being this kind of organization That hopefully, like Keystone Parts of Keystone being broken We will fix them Because it will be brought up And people will actively go off After that problem Right, there's overhead to our process That we've chosen But the best idea should emerge over time Yeah, I've got a couple of sessions About OALF It feels to me like the shift From we're building for ourselves As providers, as infrastructure folks To the users is not happening As fast as the actual shift Of attendance at these things To actual end users And so that's something We as a community should pay attention to So I know this is the moment That you've been dreading Since you got on stage So in specifics I've been doing what I can To address this problem Like my original approach was Everyone should do what I say Which obviously does this, Kale Then it was the creation Of the user committee During the drafting process Which I think has been Not as successful as we would have liked But certainly has been very important Very important Now it's ref stack But just from each of you If you have maybe the one thing That you think we as a community Should be doing To constrain, sprawl In our options The thousand option problems Where 90% of them don't really work What is the one thing We should focus on? The one thing I'd like to see Is a formal acknowledgement Of the fact that there should be Sort of flavors of open stack Not snowflakes And that we should use ref stack And or tempest And in the CI system be testing The AWS configuration options For open stack Because right now According to my team I did not check this myself But there's a bunch of AWS Compliance tests That we don't actually run In the CI system Because the default open stack Options actually don't cause Those to fail So I'd like to see us testing These flavors in the CI system And sort of tracking from release To release That we're making sure That we have a flavor of open stack That's conformant With all the flavors we think Make sense And we should allow anybody To come up with ideas For making flavors It should be a really easy process Just like it is to add code So that we can get a whole bunch In there and then what people Choose to use Is the top end We'll all follow that So we have set up ref stack To run all the tempest tests Including the sort of Not on by default one So we can look at it And say oh well The reason we don't run those tests Is because nobody's cloud Actually supports them Right Go through that Yeah and thank you For that work Josh The one thing that That I would look to do Is to better Maybe more crisply define The operator user And user type of roles And make sure that those roles Are adequately represented In the technical committees And other groups Whether they're elected Or appointed or self identified That the ratios Maybe it's every six months When we come to these things That we survey and we look And we say okay How many people fit into these groups Let's make sure that the Representation we have on the groups Making the decisions reflect that I think to Sean's point A second ago That's kind of Switching over time And I think the balance is Going to be If we look a year from now It'll be much heavier On the end user side And we should make sure That the efforts we're doing Like Josh or anyone else Represent the people That are consuming What we're building Let's take one last question So is it possible to have Experimental or lab section In open stack So that you know For my requirement Maybe it's a special requirement For telecom Maybe like you know All the instances should be Extremely you know In the same host Currently maybe the Scheduler is not doing it It's maybe it's supporting for Other and other cloud providers But for telecom This is a requirement Could be So if we turn on this Flag or you know A feature, experimental feature It helps people to reduce The snowflakes And try it out And then you know Yeah that's a good example Give it back to the community Right there should be A flavor or a couple Flavors for carriers Because they have Very special requirements So Basically opinions Publish and maintain Opinions for open stock So So I have one last For the panel But I'm really afraid to Throw it at the end So any other question So this isn't really a question As much as it is a little A bit of an opinion But talking about the Snowflakes versus the flavors I think having things as Plugable and modular as possible Is how you speed innovation And allow people to research In a specific niche of the stack And that's highly useful Going to flavors though I think the issue of how hard It is to stand up a new Open stack instance And get it useful for end users Perhaps reference implementations Might be a better way to think of flavors And come up with a standardized set Of reference implementations That go through tests And have documentation Of here's how you stand up This reference implementation And meet this set of Requirements And that might be the area That an architecture board Or something might be useful for To take hey is this new module Or is this new feature ready To be put into a reference Implementation Yeah that's really the intention It's to get the flavors Defined and then to use That to actually build You know heat templates Or some other kind of description That triple L or something Like that can then use To stand up specific deployments But I just want to point out real quick And I know this is going to be Real hard for people to swallow But you know one of the epiphanies I had on Tuesday about the mission The original open stack mission Is that at the very end it says The objective is to be simply Installable and massively scalable Those are two very opposing Approaches right You know I've built my system To be massively scalable And it's freaking hard to make it Easy to install And if you go and you say Okay can I get Amazon Web Services And just go installing Amazon Web Services With a push button no you can't Because it's really massively scalable And so those that's part of the reason I think we need these flavors right Because what somebody needs in a lab On a couple racks is really different Than what somebody needs across town Or 20 or 30 racks right Like when I pan the open stack networking You know it's fine across one or two racks It's totally fine it's absolutely acceptable For a lab environment it's just not acceptable For production but why isn't there Like the easily installable lab environment Flavor of open stack right That's like really vetted you know To plug my competitors product You know something like piston has Got an opinion in it so you can stand it up Really quickly on five to ten servers Without a lot of trouble and I think That's very useful for very specific use cases Josh I'll argue with me and it's okay And then you know we're a little Different because it you know I do Average rack deployments of three to five Racks and I need a multi network strategy And getting the network setup takes the bulk Of our time because it's not just a couple Switches it's like eight to twelve switches Initially so we get the same question About our public and private cloud Like why isn't it a hundred percent The same code base well our public Cloud spans many global data centers And our private cloud is a download That you can put and run in five minutes Right and it's the same outcome For the users it feels the same Once you've installed it and used it But the way you get there is different And if you have conformance testing For rack space public cloud you could Have a private cloud actually You know meet those conformance Absolutely I think one last note On the flavors you know that You kind of have different use cases For the infrastructure and the way The infrastructure is built and the Things it's trying to achieve and Then you've got workload flavors And the end users they want flavors Of cloud that help them With data problems or with web scale Problems with other things So to wrap up I think that since we run At the time and thank you the panel I think that we're living up to the Problems of being the operating system Of the cloud it looks like we really Have so many different options so Many different things and we're Doing a lot of things well correctly So no matter what who wins Users versus developers infrastructure Makes the choice it looks like we are Struggling and that's the normal Way to go so that's to be expected Thank you very much for attending And


A very good morning to all of you. This is the same experiment, the continuation of the experiment which we were doing in the earlier module in a different lab where we were talking about laser etching of PMMA sheets. The idea there was to be able to use that as a mold so that you could develop a device and the device could microfluidically operate and do various testing or calibrations for different processes at the microscopic lens scale. So, here in this module what I would like to demonstrate today is basically work on the next step of replicating the shape or the feature that had been produced by laser etching technique and the replication would be like a micro casting. So, therefore, you have to use a soft polymeric material in our case we will use material called poly dimethylsiloxane PDMS and this PDMS is nothing but a silicone rubber which is otherwise commercially available into two different forms. One of the components is actually a curing agent and another is a silicone rubber and you mix both of these components together in a certain ratio to obtain the requisite bond strength and the curing agent essentially helps the PDMS to develop cross bonding and eventually it results in a rubber like membrane which comes out. So, if this is poured on a small laser etched surface the surface kind of gets replicated and the negative of that is created on to the surface of the PDMS. So, I would just like to recall what we did in the last module where we actually made vise like this using CO2 laser processes on PMMA and the etching which happened therein resulted in this kind of a feature being imprinted on this surface of depth about close to 14 or 15 microns and various widths or various dimensions of the different parts that you can see on the central chamber the chambers which are on the sides etcetera. So, I am going to actually take a box where this is a commercially available plastic box and this is for the purpose of pouring the PDMS and containing it or confining it over the mould surface. So, whatever you saw here this particular chip that had been formulated I am going to first sort of paste this on the top of this box at the centre and make it immobile and then use that as a casting platform as a mould platform for micro casting the PDMS. So, I am going to first try to fix this using double sided tape over this box and before doing that you ensure that you have another identical box here. So, that whatever amount of PDMS is needed on the top of this mould box can be calibrated using this other spare box of identically same nature these are very easily commercially available in the market. So, now what I am going to do is to take double sided tape like this interestingly double sided tape commercially available in the market comes in this form where one of the sides has a yellow covering on the top and the other side also has adhesive. So, basically the adhesive side is lifted up like this and you can measure how much you need for completing the or cover the whole mould surface and try to fix it.  So, that it can cover half the surface of this feature very well. So, I am going to actually now place this feature almost half way through in this particular tape lie you can see here. So, the other half can have another piece which I will cut out by doing the same kind of size measurements and what I am actually going to do is try to cover the whole base of this mould in a similar manner. So, that one thing you have to really ensure is that you make it, but tightly to the other tape. So, that is one continuity you can see from the back you can either is no gap between the two tapes that you have put and then on the top surface there is some protection which is in outwardly manner and I am going to just shear that off. So, that it becomes of the same size as the mould so, we will do this shearing action you see roughly now in the size and shape of this double sided tape is such that it is covering the entire lower portion of the mould box and the etching the etched feature is available somewhere on the top surface which you need to micro replicate. One has to be really careful about which side you are pasting because this feature itself is very small. The only way to feel it is to either rub your nail over it and see if it produces a scratching sound because of the laser etching which has happened in this area or if the features are too small just try to ensure with your hand whether there is a feature of a certain depth and the planarity of the surface is not uniform and that goes on the top side the other plane surface or planar surface goes on the bottom side. So, I just need to pull this tape off from the lower surface exposing the other side of the tape like this similarly like this and you are left with the adhesive part now on the lower side which you want to go ahead and paste on the top of this particular box right about in the center of the box as this ok. So, this is how it now looks and you can see that because of the tape it does not go anywhere and when you pour something which is liquid in it there is always bow and forces through which the mould might come up unless it has been fixed. So, this we did for ensuring that the mould does not float up because of the bow and see of the liquid in any even PDMS is a highly viscous thick liquid which will have to offer more bow and forces and we need to somehow be able to hold this mould on to the place so that the PDMS can go on the top without making it to lift the mould off because of bow and effects. So, I am now going to go ahead and make the PDMS solution as I told you there are two parts of the PDMS in which it normally comes this particular PDMS is from a company called Doconic in Midland and the brand name is known as Selgard 184. So, you have two components one is a Selgard 184 silicone rubber which comes in this tube and then this curing agent and I am going to now sort of go ahead and mix these two in a manner. So, that the PDMS comes all the way to the top of the box here so it can actually cover what is there on this particular mould surface. So, for that we need a chemical balance like this and we will just try to first measure the amount raciometrically through weights and then we will just do 10 is to 1, 10 parts of the silicone rubber and one part of the curing agent and then mix properly using a pipeter so that it can uniformly disperse the two phases can infer you disperse throughout. So, doing that I first need to cancel or tear the weight of the box machine and once it has been tear I want to take it out and put little bit of this phase 1 here on the surface of this to ensure that it goes all the way to the top you need to be little careful while handling this and the other part which is in this particular solution here also curing agent. So, first of all we need to weigh this and find out how much this would be so this happens to be about close to 30 grams. So, we need exactly 3 grams of this other material to keep it going and so as I told you that the chemical balance here measures the quantity of the PDMS at least the silicone rubber part which we have put inside this small box and then we have to mix the curing agent but before doing that one has to ensure that whatever mold you are using will release the PDMS after the heat curing action etcetera is over. So, the idea here is that I would need to treat this with some kind of vapors or some kind of chemical which will formulate a mono layer on the surface of this material PDMS otherwise is highly hydrophobic in nature the contact angle is about 108 degrees. So, one has to have a hydrophobic surface so that there is a mutual repelling action between the two and there are no as such van der Waals forces which develop between the surface and the PDMS and there should not be any stickion why particularly when you are pulling it out that is the purpose of a release agent when you talk in castings you use powder on the walls of the mold so that the metal comes off without damaging or breaking the mold. In this case breaking is not possible because the PDMS is a softer material but yes it has to be coated properly so that it should not be that the features and trap a part of the PDMS and it gets broken off that resulting in a bad finished casting. So, mold release is very very important so what we are going to do is to use a vacuum desiccator right about here and we are going to use something called HMDS which is commercially otherwise available in Waals and this material has to be handled very carefully the HMDS is normally coming in a closed vial it has to be taken to a fume hood something like this where you can break open the cap of the HMDS and transport the bottle all the way into the desiccator and then evacuate it and before doing that you ensure that you put this into the desiccator so that the environment given by the vapors sort of does a preliminary treatment of the surface by giving a small coating on the surface. So, as you can see now the processing of the vial is done there is a vial inside which is broken cap and the material that you want to coat with that is the mold everything is inside here in this particular desiccator and there is a pipeline which goes into otherwise evacuating system small mechanical pump and that takes care of sort of close to 10 to the power of minus 1 or minus 2 torr vacuum within this particular chamber. One reason why the vacuum is also engaged is that this material HMDS is highly volatile in nature and the idea is that it should actually come and evacuate or come because of the negative vacuum pressure and formulate an environment over this surface including the plastic box the mold etcetera which is kept inside for a very long amount of time so that there is a small layer and in fact you will see that the layer which is formulated will be visible as a small whitish layer on the top of the surface. So, this process will take about 15 minutes beyond which we will have to examine whether the mold is fully coated and then if we feel that it is fully coated we will go ahead and stop the process otherwise we will have to again recoded so that that small thin whitish layer and be seen on the surface of the mold. So, this right here is demonstration of how the oven functions there is a controller for this oven where there is a set value which you need to set for heat curing PDMS. PDMS as you have seen before has been mixed into two different parts component A and B curing agent and the silicone rubber and your heat curing it to a temperature of about 85 degrees Celsius for about 40 to 45 minutes and this has to be very precisely controlled otherwise if the temperature is higher you know the plastic container it might just warp and it might just deform and change the shape of the containing mold which is really not desirable. So, what we do is to preset the oven as you are seeing here at 85 degrees and wait for the oven to achieve a temperature all the way up to the set point value as you can see a little bit quick glance here that temperature is changing quite a bit and basically the temperature once it achieves the 85 degrees Celsius you have to keep the oven in closed condition. So, that the temperature is maintained at that particular level now once we are sure that the temperature has been reached the other important aspect is to take out the mold which has been cured prior to this or coated prior to this using the HMDS or the hexamethyl disilazane layer and a lease agent layer. So, what I am going to do is to sort of take out the mold from the vacuator and see the mold surface clearly it is indicative that there is a layer on the surface. So, we pour the 10 is to 1 ratio of the curing agent to the silicone primer from the other box that we had earlier taken provision for this purpose onto the box containing the mold and so once this is thoroughly poured and the whole PDMS is transferred it is a very viscous substance as you are seeing like molasses and therefore it needs to you have to really hold it for some time for the material to be completely loaded onto the other new box containing the mold. So, once this is finished you have to really check what is the level of the PDMS on the on and over the mold pasted on the surface of the box because mind you the mold height has now changed because of the thickness of the double sided tape which has been inserted below the box. So, you have to actually see now what is the level of the PDMS on the box if you are happy there is another issue about setting up the evacuator again because mind you when you are actually trying to do this process of mixing agent curing agent along with the silicone polymer there is a issue of entrapment of bubbles and dissolved air which comes in so that air has to be removed because otherwise when starts heat curing and there are convective currents within the medium there is a tendency of this bubbles to formulate a two phase system and bubbles in this manner if they get entrapped into the cured silicon matrix would have a lot of problems regarding optical visualization of the PDMS matrix. So, we place this PDMS now on the vacuum desiccator and wait for few minutes at high pump pressure for the desiccation action to sort of pull out all the air which is entrapped in the PDMS matrix. In the meantime you also should check the conditions of this gravitate convection oven which has been sort of now you know stalled at about 85 degrees Celsius and the way you normally handle is to actually keep a sort of elevated platform which is already prebalanced and there could be an issue of proper leveling of the mold box that you are eventually going to place into this oven. So normally it is pre leveled by using a spirit level such ovens also have the possibility of tilting shelves. So therefore you can actually using a spirit level in a crisscross manner do both x and y in the x and y direction you can check whether they are completely leveled with respect to gravity so that the overall PDMS surface can be flat. Now the it is high time now that this desiccation has already happened rocker and bubbles must have come out of the solution. So we are going to replace we are going to just sort of take out the mold box along with the PDMS on the top and see what is the condition of that mold box you can see here that there are bubbles in a way coming off the surface of the PDMS which actually is suggestive of that the dissolved air has really come out. So a few more minutes are needed so that you can individually bust these bubbles and you have to see that over this mold really are there any bubbles or not in this case over the mold you have relatively a clean layer of PDMS which you can see and so the idea is that once this has been formulated you can put this into the oven in the level plate there is a level plate here in the bottom corner as you have seen. So you just put this over the level plate and the same can be done with the shelves as illustrated earlier so that the level of the PDMS over this mold is completely flat in the x and y direction parallel to the gravity and close the oven and wait for about 40 minutes till the PDMS actually achieves the necessary curing action because of the opening of this oven for loading and off loading there is a sudden change in temperature as you can see here it again needs to go all the way to about 85 to 86 degree Celsius which it has now reached the PIV control and we have to wait for 45 minutes so on that we can actually have good cured sample of PDMS which will later separate from the mold which has been formulated you can see here actually the sample has come out after 45 minutes.


Today I have the pleasure of speaking with Gavin Lockyer from Arafura. How are you today? Good thanks Tracy. Always good to be back. So Gavin let's start with the market in general. It seems like there seems to be a rekindling or revitalization of interest in the looming rare earth shortage. What do you think? What's happening right now? I think there's a number of things going on. We're seeing the effects of the Chinese consolidation of the industry really starting to impact on supply and that's had a flow through impact on the NDPR price in particular which has been well received by the markets. But we're also starting to see that the Chinese are actually using more and more of their own domestic production for Chinese magnet manufacturing and this is going to start putting some real pressure on the rest of the world in the next few years. So we're starting to see ourselves a bit of a renewed interest in the whole technology metal space. And of course NDPR for anyone out there in investor intel land that does not know what that is. It's of course neodymium and presedymium, did I pronounce that properly? I should after all these years, yes? That's perfect. And these are of course magnetic materials and in the last month Gavin we've noticed you've had an onslaught of basically news releases. One news release after another. Every other day it's air of fur and of course your stock price is really getting the support from the shareholders. Can you talk to us about your recent private placement announcements and what you're planning on utilizing the funds for? Yeah, absolutely. I guess as an extension of that technology metal sort of revitalization that we've seen over the last 12 months, you've seen it really impact on the lithium graphite cobalt guys. But that's all battery technology and those batteries inevitably have to drive a motor and if you want that motor to be efficient it must use rare earth magnets. And so we're now seeing the financial investment community starting to recognize this and they're starting to look for the next opportunity in technology metals and we've been fortunate to get on the receiving end of that and put some private placement away which is our first capital raising since 2012 so it's really pleasing to see and we're going to be putting that towards our feasibility studies which we aim for completion at the end of next year. And of course you've got a pilot plant program proceeding and you've had some announcements about that. In fact, I read you had the successful conclusion of first stage of phase four piloting. Can you dumb that down for me and tell me exactly what that means for us? Yeah, absolutely. Look, you know, historically rare earth projects haven't had a bit of a good wrap around commissioning etc outside of China and so what we're doing here is about de-risking the commissioning phase of the project. It's not about proving the flow sheet of the chemistry. So we decided to take the route of undertaking a pilot program where we're taking 16 tons of our material from Nolan's Bore and we're putting it through various seven stages of piloting and what this means is that we're basically proving up and getting engineering data and we're getting operational data on how our material flows through the various stages of the process. And that's a bake, which is stage four as you alluded to. That's a critical part of many rare earth processes and in particular over the last six months as we've discussed our piloting programs with potential financiers, they've indicated that many of them have visited other plants around the world and they see this as a critical point in the flow sheet design. And so whilst our flow sheet is very different to other projects, we're not operating our acid or our kilns at 800 degrees Celsius, ours is only around 300 which is still quite warm, but it enables us to use alternative equipment which might not be so problematic when we go for commissioning. So we decided to take a little bit of extra time to do that and that's what we're up to at the moment. The first phase of that was announced and completed successfully and we're now looking to do it at a slightly larger scale. And of course AeroFURA has been one of the top half a dozen rare earth plays that I've been following since 2009 have been out to your property. Can you tell us what other exciting, you know, we should be expecting and say the next quarter or two? Sure, look the next 12 months are looming as a pivotal part for AeroFURA and history making for the NDPR space. We are in the process now of getting a final environmental approval. We would expect that for the end of this year, so in the current quarter. And there's been no major risks or issues identified there. So that's a credit to our team and our consultants that got us through that project. The other, I guess, things which aren't too sexy in the market are obviously our piloting, which we are targeting in completion by the middle of next year. But our recent capital raisings have given us confidence now to fast track some of our engineering studies. So we'll be looking to appoint a lead engineer to complete that engineering design, which will ultimately accumulate in a bankable study. But more importantly, I guess on top of that, to underpin the whole project of finance, we really need a strong off-taker and we'll be ramping up our engagement and our discussions with potential customers in the coming six months soon. And of course, all of us at Investor Intel are very bullish on rare earths. We understand the issues relating to not only this global supply shortage, but I see a lot more demand with the magnetic metals moving forward. Do you want to just comment on what you expect to happen in 2018? Yeah, most forecasts and analysts are forecasting growth in the magnet material of around 8%. And look even if every project that's currently being developed gets developed, that's still not enough to make that growing demand. And we're seeing daily news flow from around the globe where governments are forcing combustible engines outside of their major cities. China and its 2025 China growth policy is claiming it's going to have 30% of all its motor vehicle fleets EV by 2025. And if you multiply 41 million electric vehicles by about 1.7 kilograms of NDPR, then that's a lot of NDPR. Well, Gavin, thank you so much for the update. It's a pleasure as always. Thanks very much for the noise that's taught you.


Do you worry about having enough money to last throughout retirement? Give Reed Potter at Raymond James a call. Reed has 26 years experience helping folks enjoy their best life in their retirement years. Community Lighthouse Mission held a toy giveaway at the Belfry Fire Department on Saturday December 16th. We're having a giveaway of toys that were donated and money was donated to some of them from different churches in our community and some of our business people. These are for the younger children that from 13 and under that have come to our their family comes to our pantry and needs food they also will need toys for their kids. Many children will not get to experience getting all that they want on Christmas Day so the giveaway served as a way to help those children experience what it's like to receive new toys meet Santa and better connect with their peers. In a couple of ways it gives them something to remember for when they grow up. It's to help with the mental of being the poor when on the block. I was like that and it sometimes hurts and we don't want that to happen with these children. Community Lighthouse Mission is an organization that regularly gives back to the community because of them many children got to experience a wonderful Christmas. For mountaintop news I'm Kelsea Fidele


Mrs. Anissa Brown has been the property owner of Stonefield Villa Resort since 1973 when it was a running cocoa plantation. In the late 90s, Mrs. Brown and her late husband, Mr. Wayne Brown, decided to turn the property into a boutique resort. In 1998, Stonefield Villa Resort was officially opened and in 2014, Mrs. Brown took on the role of running the resort herself. From since then, a family-led enterprise, the resort has managed to dominate the boutique resort space due to adopting a unique hotel marketing model such as capitalizing social media for maximum reach, influencer marketing, creative content development and distribution. For example, the resort having recognized the tremendous value of the black traveler, Stonefield has made much strides and can boast of reaping desirable results from tapping into this underserved market. Tonight, we recognize the contribution and visionary leadership of Mrs. Anissa Brown and her long-standing service as a manager of a homegrown hotel enterprise in St. Lucia. Ladies and gentlemen, in the category of special recognition for the inaugural St. Lucia Tourism and Hospitality jimmies, Mrs. Anissa Brown.


Hi everyone, it's MJ the Fellow Actory and in this video, I want to talk about credit risk management, a very very popular exam question. So we're gonna be looking at 10 ways to manage credit risk and the first one is probably the most obvious one and that is to require some sort of collateral. So this tends to be with private debt you lend somebody some money and you say I'm only gonna lend you this money if if I can tie one of your assets to this loan so that if you fail to repay it I can then take ownership of an asset that belongs to you. It tends to be the house, could be a car, could be something else with with porn stars and if you guys have ever watched that show some people will come in and they will pawn a fancy watch or some sort of antique as a form of collateral to get their loan. Now collateral is very very effective because when somebody says okay, hold on if I don't repay this loan I'm gonna lose my house. They're gonna do their utmost best to make sure that they do not default on that loan. So when there's collateral we tend to see a lower default rate. Also if a default does occur you can go take that asset and sell it and that is going to improve your recovery rate which means we're gonna see the severity of the risk lower as well. Of course the big difficulty is that this asset tends to have low marketability because if it was a very marketable asset then instead of them loaning it to using it as collateral they would have liquidated the asset and rather just use the money without having to come to you for credit. But because it tends to have low marketability it means that they can use it as collateral but if the bank or whoever's lending the money needs to liquidate it they have to tend to do it at a below market price. Another big problem with collateral is that it requires a legal framework. So one of the things about let's say doing a loan over the incident if you lend money to somebody in another country and they don't repay it and you say okay I'm going to come take your house they can say well try. If there's not that legal structure in place then it's going to be very difficult to collect. So collateral is very effective but it does require a legal system in order for it to be enforced. Now another way for say public debt or for how how organizations can deal with large amounts of credit risk so think of a bank that's lent money to a whole bunch of people how do they now manage it after the fact they can do something called securitization. This is where you create a special purpose vehicle or an SPV and this allows you to transfer the risk off your balance sheet. So what you do is you give all the loans to the special purpose vehicle and they then give you ownership of that special purpose vehicle and essentially what you're doing through this accounting exercise is you're converting credit risk to market risk and with the original basil accords they were only looking at credit risk this became a form of regulatory arbitrage and it allowed you to basically bypass regulations and hold lower capital because of the way you had structured it but another big advantage of securitization is because you've moved it off the balance sheet to another separate entity you can then sell that entity or shares in that entity on the capital markets and you can then actually offload a lot of your credit exposure if there is a buyer and what tended to happen with the financial crisis is that because China had devalued its currency and was buying lots of American Treasury bonds the American Treasury bonds had come so low that your big pension funds and other institutions were trying to seek yield in weird and wonderful places and so they started you know buying into these mortgage backed securities but that is a story for for another day another thing with credit risk management is to have a two team approach you've got the front office and you've got the back office and here the big idea is to realize that companies or especially banks want to expose themselves to credit risk why because that's how they make quite a lot of money a bank makes money think about if someone deposits money and they pay them five percent interest but they can lend that money after somebody else and they can get ten percent interest then they're making a very juicy spread so banks want to be exposed to credit risk specifically when your frequency of default is very very low so what they'll tend to do is they'll sometimes have a front office which tries to sell loans so somebody will call in and say hey i need twenty thousand dollars in order to buy this truck then you could even have an instance where the salesman at the bank or someone working at the bank says hey listen why don't i've checked your records you know you've got a very good history you've got a good salary why don't i lend you twenty five thousand and you buy the better version of the truck or you use the money to i don't know buy yourself something pretty at the same time and then what tends to happen is to try and prevent the front office from just going too crazy and handing out too much money you'll then have a back office that then actually says okay hold on can the person take twenty five thousand okay yes they'll do the check and we'll look at some of the models that they will incorporate that the back office does of course there's the classic example where the incentive structures of these two officers can sometimes cause them to be in conflict and the classic example is when the front office is paid a bonus on the amount of loans they issue and the back office is penalized by the amount of defaults that they experience because then what happens is front office goes crazy and throws loans to people who don't deserve it or who can't afford it and back office is is saying well hold on um there's so much work for us to do and we're just going to get penalized that they just start blanketly declining everyone because they're still going to get paid their amounts their salaries based on defaults not necessarily on volume so it's very important that if you go with the two team approach you design the incentive structure in a way that is complementary and doesn't conflict your operations then I mean it's kind of goes without saying diversification is always a valid way of managing risk and how you can diversify is through different types of loans there's loans for starting businesses there's loans for mortgages there's different there's student debt there's there's lots and lots of different types of loans I mean even credit cards so you can diversify by type you can also diversify by regions if you're an international bank you know lenty in South Africa then a little bit of America then a little bit of Australia um and then another idea with diversification is you can make lots and lots of small loans uh so imagine like you're lots of small loans with your capital that you have instead of a few big ones so it's just also having a different strategy on what part of the market you want to access of course diversification does fall flat when we're in a bit of a pandemic situation like with coronavirus or when there's a big recession and everyone around the world just starts defaulting at the same time so diversification is not bulletproof but it is always going to be a valid management technique in the exam but maybe even mention a little bit of its downside or when it will be ineffective then when it comes to credit risk management don't forget to mention the soft approaches um anyone who's been a little bit behind in their their mortgage repayments will will probably know quite a few more than these but essentially sending letters to people reminding them that they have payments sometimes just putting a little bit of pressure or just saying hey listen you need to repay me is enough to get people to to start repaying their their loans in an extreme situation you could send a debt collector this is normally a very large person who is intimidating um although you kind of think of the movies they don't really have baseball bats and break your legs um like you know in like I say in some of those gangster movies but they will kind of intimidate and maybe say hey um you need to actually make the payment or you could be more forgiving create a grace period restructure the terms maybe say instead of repaying the the the amount within the next 10 years you can repay it over the next 20 years so there are various soft approaches that you can take in order to prevent a default from occurring um like I say there's quite a lot of soft approaches so make sure you read up and expose yourself to quite a few of them then there's hedging um specifically let's say your credit model says okay well a 1% increase in interest rates is going to cause a 3% increase in default rates um this is because especially if it's a if it's an adjusted mortgage and interest rates increase maybe some people are unable to pay that extra amount and therefore they will default so what you can do is you can say okay let's maybe use a a financial instrument such as an interest rate swap that allows us to therefore make money when the interest rate increases and we can use that additional gains to hedge the losses from the defaults that we would experience so this is kind of where interest rates can can can come in and I mean interest rates are a form of derivative you could be a little bit more direct with your derivatives by using credit default swaps which you know it's not really a swap it's more a form of insurance but they called it a swap in order to bypass insurance regulations we won't go there right now but you can use these credit defaults to change your risk profile and what's quite nice is you can use it also to increase your credit risk exposure remember banks want this risk yes it's it's bad if someone doesn't pay but if they do pay banks make money and if they feel like they've got a really good book they might call up and say let's have a credit default swap where they can actually magnify or leverage their exposure on their own um book or they could even do it on on other people's books so you can actually get exposure credit risk exposure without having to go through the whole hassle of setting up face-to-face meetings or or having models or having a bank you can use these instruments to change your risk profile to how you want it to be um what you can also do is buy and sell loan books we saw this during just before the financial recession the big banks what they were doing is going around to the smaller mortgage originators and just buying all their books from them of course that caused the big problem because then those smaller companies had no incentive to implement any form of risk management so where people had to say what their job was they just left it blank they just wanted to you know throw out these loans because they could then offload it to the bigger institutions who then chopped it up into mortgage-backed securities who then threw it on to somebody else and this is kind of where the whole crisis of 2008 stemmed from but what you can do if you feel like you've got too much credit risk you could sell a chunk of your book or you could if you want more go to another company and buy their book of course this is a more complicated trade it's not necessarily something you can do on a on a market this will normally be a deal between two institutions that tend to have maybe a good relationship one another look you can also manage your credit risk at the start you can have stricter underwriting requirements so before if you had oh you needed the person to be earning so much excessive income now you could increase that proportion you could maybe say we're only going to be lending money to to actuaries and people of financial degrees anybody else we're just going to tell them no they're too risky so you can change your underwriting requirements you could increase the amounts of collateral that they want to hold you know there's lots of different things that you can can do at the underwriting stage and then finally you can also dispose of public debt as soon as it becomes it well as soon as it loses this investment great status so instead of buying a bond and holding it for this whole duration and if the credit starts deteriorating your rate of default goes up and maybe to an uncomfortable area you could always tap out of course selling out means you're going to incur a little bit of a little bit of a loss so it depends very much on your strategy and your appetite for credit risk but job as soon as let's say you only want investment grade as soon as selling loses investment grade and goes into the bees then you can say okay let's dispose it take that loss on on the chin so like I said there's various ways on how to manage your credit risk and these are just 10 ways like I say for this exam you maybe want to come up with a few more on your own and just add it to your own notes but this should get you off to a very good start


It's DDK and I'm back today with another video. Choose how to get ready to do anything. Subscribe, smash the subscribe button. Give me a thumbs up and do not skip those ads. It's the end of the month. Wake up, wake up, wake up. It's the end of the month. I hope you guys enjoyed this video. Guess what? In today's video, we are going to show you every single order we got on every single order, baby. Every order we got, you're going to see it, baby. The good, the bad, the ugly, baby. The great, the terrible. I hope you guys enjoyed this video. Make sure you subscribe and give me a thumbs up and do not skip those ads. We about to put on right now and get to this bag. Let's go. Get order one and two.  Here's the seven orders. Two, y'all know what we about to do.   Order number one is Jewel Oscoe. Two orders, seven items, 6.6 miles for 11.52. Y'all know we about to do. Look, it's not really two orders. Only one order is two orders going to the same house, baby. I don't know why they got it like that. But either way, go. Let's get this done. You about to go. Order number two is Mickey D's, baby. Hey, I know 3.8 miles for $7. We're going to be popping our collar. We ain't going to be at the Ramona and getting it in. This is the plan, Sam. We got to put up to McDonald's first. We are going to McDonald's and then drop that order off first because I don't have to be to Jewel Oscoe until 11. I mean until 7.56 and it is now 11.38. We about to get this cake. Let's go. We're here in Mickey D's, baby. B-E-E. Hopefully, it's me. Hopefully, they're going to get together right now. Let's go and talk about, baby. Let's get this together right now. Right now. 7.42. Thank you. You have a good one. Excuse me. Ease, baby. Get bit and see. They said, please leave me at the door and run the doorbell. Oh, snaps almost fell. Step back. Get off the floor. Doorbell, back. Let's go. Baby got a little baby over there. We about to get baby over there. Come on, come on. We want to get busy in this, y'all and baby. Let's see if we got somebody in here. I think my God Rick left. Excuse me. How you doing? What's up? I'm doing great in yourself. Terry MC. Yeah. Have you ever seen this before? Oh, they got the news for it. They got the news. I ain't never seen them food lose.  But them joints are looking decent. They got the color mixtures now. We can count on people. This joint got a little weight through it, baby. How did this come out? Oh, I left this outside. Put that on the arm ski. We about to get busy. I'm going to take it to the side door because it seemed like there's more room over here. And I don't want to put it by the front door because it seemed like this ain't that much room. And I'm going to give them enough room to grab these stuff. I'm going to put it out here a little bit because I don't know what to hit it with. Maybe I can put it under the door, though. Maybe I can put it under the door. Let's see. Nope. Ain't doing it, baby. Got the bluff right here. Hey, you got that milk. They got big milk. Step back in over the photos. I'm not going to do it, though, too. Well, I'm not going to do it, though. But I went do it, though. Which is full, full. Got my hat back for my stick, though. Let's go. It took us these nine orders to get order number three. We trying to get busy. R&P, Nipsey. We about to move kind of shifty. I don't know if we're going to continue to wait. We ain't here in Walmart right now. We've been waiting for a hot eight minutes. So we might have to cancel it. If we get another order, we're going to cancel it. I don't know what we're going to do. Either way, go.  Let's go. So, guys, we finally got the wall, Miggity order to get in order. And guess what? We set that for literally like 26 minutes, baby. So this definitely is not worth it. Hopefully we get a tip or something. I don't know what's going to happen, baby. Come up below and let me know what you guys thought we should do in that situation. We was trying to get other orders on my phone. And if we did get an order, we was going to take that order and just cancel this order. But it doesn't make sense to cancel an order if you don't have another order. That's just what I think, baby. Come up below and let me know what you guys think. We're about to continue to get through this money. We about to pull out. Snap, he tweaking. We about to pull out right now. It's all of this wall, Miggity. We about to get busy. Let's go. Order to get in order. I'm going to carry this juice in my hand because I don't want to smush the bread. So I'm going to go this way like this. I had to park in the middle of the parking lot because they ain't got no parking spot, baby. How you doing this morning? That's great to hear upstairs right here. Okay, you're welcome. Yeah, it's definitely nice outside today. We're going to have to enjoy this. They said it's supposed to be very hot next week. Yes, ma'am. So staying in the house as much as possible. Would you like me to put it inside the door or just sit it right here? It would be awesome. Okay. And that is everything. You have a great afternoon, ma'am. Bye-bye. These are the nine terrible orders we got before we got order number four. Four miles for 1047. We still thank God for our blessings. We're still getting these muddy wings dressing. Let's go. You're welcome. You guys have a good one. Me and this thing, baby. Hopefully, guys together to be trying to hurry up and get this cheddar. Hello, how you doing? Yes, ma'am, for Angela. I'm doing great. I can't complain. That'll be here. Yep, it's already been paid. Third party.  Okay, thank you. Just take your time. Yep. Thank you very much, ma'am. I really appreciate it. Have a nice day. You too. Yes, ma'am, I want to grab them. Yeah, take that. You can come back in. No, I'm okay. You have a great one. Have a nice day. Yes, ma'am. Just like that, we are here. Joe just crack a bell order to get an order. This is going to a apartment. So I got to make sure I read and write the money. I'm quite sure that's it. I've been here a few times, baby. You want to come out? Okay, let's go. I had to get the pops right, baby, because I don't want to drop them, Joe. You want to come out? You want to come out? We're about to go in here and get busy. We're about to move kind of shifting. R&B, Nipsey, Hustle. We're running off the monster. Let's go. Boy, we got a good order. We about to pull up and pick up the prize. Let's go. B-E-E. They got us together, baby. That's what I'm talking about. Hello. I have an order for A-C. Thank you. You have a great one. Let's go. We are here to jump up this Mickey D's, baby. B-E-E. They about to eat, eat, eat. They about to get me. See, he said, leave it at the front door. Drop it like a sign. Say, back in those photos. Matt. Go, go. Let's go. So, guys, it took us 10 orders to get order number six. Here are the 10 orders. 7.4 miles for 15, 25. It's a great time to be alive. Look, this is not the great... Oh, it is a record, just so you guys know. This is not the greatest of order. But sometimes you got to do what you got to do so we can get in order. Let's go. And just like that, we are here to jump up this Petsmart order to get an order. It says, leave it at the front door. That's what we're going to do. Guess what? It was 7.2 miles. How you doing, sir? It's 7.2 miles. But guess what? It took us 11 minutes to get here. So, we're going to come up our miles. Everybody's miles are different. So, we're going to top this right here. Pop. Step back and look at the photos. Man! Little bell. Let's go. So, guys, it took 7 bad orders to get to order number 7. Here are the 7 bad orders. Money's all we are here stressing. Subway through out of 2.3 miles for 6.75. Let's drive. We are here at Walmiggity to get this Subway order to get an order. You know what I'm talking about? This joint, Pat. This joint is people everywhere in this job. You know what I'm talking about? Everywhere. Hopefully, you guys will see us when we get to this cheddar. I have a pickup for Andy. Thank you very much. You guys have a good one. Let's go. Drop the Subway. Eat for it. They said leave it at the door. Is that what we're going to do? That's a brick or something. Hit him with the photo. Oh, snap. Oh, man. Stop. Roughness. Hit him with the photo. Smart. No, go back. Let's go. Guess what, guys? It only took us these two orders to get order number 8. Some of the commas from the corner. Order number 8. Everybody claim they're real, but they're really fake, baby. Diddies get these pennies. Now, item 3.9 miles for 750 or a PNipsey. Let's go. This joint is so packed. They got people everywhere in this joint. How you doing? I have a pickup for Michael P. I ain't never seen this many people in this joint. This is crazy. Y'all packed like that. It's people everywhere. For real? Excuse me. All right. Thank you very much. You have a good one. These pennies, man. That joint was so packed, guys. It was so many people. I've never seen that many people in there. How are you doing, sir? You have a great day, sir. It only took us these two orders to get order number 9. Order number 9. If they hang, don't notice signs. Five guys. 4.8 miles for 10.99. We ought to go out to the end of time. Y'all gon' see me see I'm shy. Let's go. When you in this joint, baby, I ain't been in here in a minute. Y'all know I'm up? Hopefully you guys together. How you doing, sir? I have a pickup for Mitchell R. All righty. Thank you very much. You guys been pretty busy today? Not really. This is probably gonna happen, huh? I'm doing great to yourself. Did you want another bag to put it in? No, I'll be okay. Thank you very much. I hope you guys have a good one. Just like that, we are here to draw up this five guys to get the prize.  I ain't gonna let them five guys' joints. They do not be stingy with them french fries. They begin, right?  They give you some fries. On top of some fries. Step back. You don't have to follow the yard. Know those? Mac. No bell. Back. Let's go. It took us these four bad orders to get an order. Ask the people who ain't clapping when you win. Warm or instant pickup. Two orders, 7.8 miles for 16.50. We about to pull up. We pulled up right now, baby. We about to get busy. Let's go. Order number one. We trying to get it done, baby. We got to hit him with the scan ski so we can get these bands, G. They gave me three packages, but it said it's only supposed to be two on here. I don't know what they doing, baby. I'm dropping both of these jones off. And it was a long, long wait in Wall-Miggity. I guess they were short staff or something, because that's what. But they had people waiting for the money service because that's what they moved everything in. They let everybody go on lunch. I don't know why they would do such a thing. That's two doors where I'm putting them right here. It is what it is. Is it what the photo? So, Mac, let's go. Jump with the last one. We hit him with the scan ski. Now we got to get these bands, G. I hope y'all are with me. We about to move kind of swiftly. You know what I'm talking about? I wonder what this is. I don't know what it is, baby. I'm going to put it right here. Drop it like it's hot. Step back into the photo, y'all. Y'all know? Mac. Let's go. Let's go. And just like that, it is the end of the video. I hope you guys enjoyed the content. Today we made 1, 2, 6, 7. We still thank God for our blessings. We still get this money where he's treasured. Hope you guys enjoyed the video. Look, I want to tell you guys this. So, first I'm looking at the back seat. I told y'all. Hey, I told y'all what I was going to do, didn't I, baby? I told y'all. That was the video I told y'all. But anyway, I want you guys to comment below and let me know some other apps I can try out because I'm trying to switch it up a little bit. Honestly, guys, I want to try to give you guys as much content as possible and good content on top of that. I kind of get bored doing the same thing over and over and over and over. So, I like to switch it up, do different things, do different challenges or different things like that. So, comment below and let me know some videos we can make or some apps we can use. I did try, I was trying to get into GoPuff. GoPuff was actually our first app we tried to get into. And they didn't let me in, baby. So, GoPuff, we're thinking about trying GoPuff. Comment below and let me know about GoPuff if you guys know anything about that. It was another, what was the other one called? Return Mate. Somebody comment Return Mate. We're going to look into that. We're also going to try to start doing some Amazon Flex, Flex, Flex Order, baby. That's the plan. So, we're trying to look at, find out what the high surges and all that stuff is. We're doing a lot of research on that right now. So, we're going to try that. And just comment below and let me know some other things you guys want us to try back. So, I'm going to give you guys the ratio of what we took. So, it was 67 orders altogether. We only took 10 to get it in. Which means that pretty much every seven orders we took one. So, that's how we went, baby. At first it was going real bad. Then it got a little worse. Then it went down to like two orders and two orders multiple times and all that. So, our average was one order per seven orders, baby. So, comment below and let me know how it is in your area. What do you think the ratio is? Maybe y'all can make a video. Maybe you can do something like that. Maybe you can just comment below and look at it all day and tell me what you think. I hope you guys enjoyed this video. Make sure you lock in tomorrow because we're going back down. We're paying around 2022. It's still back season. We're going to give you more reason. I'll see you guys on the next one.  And I'm on my way.