Why would you think a replacement for meat would be healthy when the replacements for butter (margarine) and natural fats (transfer fats) turned out to be even less healthful?
100% agreed. It's about the results and the relationships. You need both to be successful long-term.
Agreed. There will be a movement over the next 10 years to locate software development in "the business". "Corporate IT" as you describe it will administer the infrastructure and operate the environment. They will also set common standards to ensure consistent architecture and best practices across the enterprise.
We'll be making progress when the CIO is viewed as essential to the organization as the head of facilities.
The fact that most people substitute "help desk measurements" for "IT measurements" freely in their minds is a sad commentary on the state of IT/business relations. IT should be doing a lot more than resetting passwords and replacing keyboards - they should be helping the business develop products and services that lead to success for the company.
"everyone in the company is treated like a customer"
Unless you provide IT services to someone outside of your company, you're not working with customers, you're working with colleagues (simple test - how much is the person you're talking to paying for service?) This is a very different dynamic as a customer has less responsibility than a coworker - other people in your company have to follow policies and adhere to guidelines that customers don't. There's no real difference between someone asking for a new computer when their current system is perfectly fine and someone asking HR for an equal amount of money, yet the second request gets laughed out of the building. The real customer is the person who can make the decision whether to outsource IT or not.
Fixing this perception would get us a long way towards a better relationship between IT and non-IT parts of the business.
In a concrete example, imagine a bank owns a formerly AAA-rated residential mortgage-backed security (RMBS) composed of Alt-A loans, which are better than sub-prime but less than prime. About 5% of the loans were delinquent, and there are no high-risk option ARM (above prime rate-mortgages) in the security. It is offered at 70 cents on the dollar. If you bought that security, you would be making well over 12% on your money, and 76% of the loans in the portfolio of that security would have to default and lose over 50% of their value before you would risk even one penny.
Let me say that again: seventy-six percent would have to default.
This would only be the case if the RMBS consists of whole mortgages. My understanding is that each mortgage was split into various income streams, with a stream getting the first x% of dollars obtained either through payments or foreclosure, one getting the next y% of dollars, and so on. Therefore, if your tranche only gets the last 10% of the repayment of the mortgage, getting less than 90% through a default where the property resale price + payments made falls more than 10% short means this tranche is worthless.
In your example, the sale of that RMBS at 70 cents on the dollar should have forced an immediate markdown of assets to show the worth of similar tranches at that value, but they are not forced to sell because of this. If the markdown forces them to sell assets to meet margin calls, there are sovereign wealth funds and other investors with money that would be willing to buy something below what it is worth so they should be able to sell if for market price which would be 70 cents or higher.
The fundamental issue is that these banks are considering tranches to be level 3 assets that do not have a market price so they can claim they are worth whatever their models tell them, whether their model is close to reality or not. These institution's models are so far from reality due to faulty premises that even a single sale considered to be non-distressed of these assets would require writedowns that would wipe out all of their capital. Their inability to sell these securities is in reality a refusal to accept the actual worth of these products, so they want their rich uncle to pay an inflated price for them.