As Toomre Capital Markets LLC ("TCM") starts the fourth quarter of 2009, we are cognizant that our consulting business is once again in transition. As it is sometimes said, as one door closes, another door opens. We are just not quite sure which door (professionally at least) might be opening.

For much of the past two years during the on-going credit crunch, the TCM staff has been working extensively with a major participant in the Life Settlements sector. We have used various pieces of the MATLAB mathematical modeling language together with Microsoft SQL Server relational data bases and ActiveX technology to create the calculation code for their customized portfolio management application. The resulting code is rather advanced.

This MATLAB-compiled code enables TCM's client to quickly price various individual life insurance policies and to help identify the risk/rewards in simultaneously managing several portfolios of such investments. It has moved the client away from the risks and confusion of large complicated Excel spreadsheets and onto a modern web-based platform. Alas, though, the heavy development work for that particular project is drawing to an end and we are now in the acceptance testing phase. There is unlikely to be any further enhancement work necessary until at least the code has been used in production for some time period.

Partly as a result, TCM has wondered where we should turn our attention to next. Should we turn to focusing our efforts on developing similar types of MATLAB-based code for other financial clients? Certainly there are many financial firms that enjoy the convenience and ease of data input into Excel spreadsheets. With time, though, many of these same spreadsheets become large, many times unwieldy and often contain inaccurate cell references in some of their formulae.

Depending upon the complexity of what information the spreadsheet is attempting to model, MATLAB often is an effective tool for tying together: the ease of that spreadsheet bring to data input and manipulation; easy access to data stored elsewhere in relational data bases; mathematical calculation of arrays (including good routines for various types of optimization); integration with tried and time tested C/C++ calculation libraries; and excellent visualization opportunities for understanding the results.

TCM is quite skilled in doing this advanced MATLAB development and integration work. (The reader might note the many posting on the TCM website about the term MATLAB and then appreciate why we receive so many visitors each day looking for information on such terms as ActiveX, Excel and MATLAB together.)

As we contemplated during the last few weeks which way to turn, Mathworks (the maker of the MATLAB product) contacted TCM about possibly working with a hedge of hedge funds that needed help with integrating some of their existing MATLAB models with their client-facing website. Could we help? It now appears that very shortly we will be starting an initial project focused on foreign-exchange investments.

Simultaneously, Lars Toomre also has returned to his academic roots. During a full-day visit to M.I.T. last week, Lars discovered (much to his surprise) that there might be the possibility of his returning for a Masters in Engineering degree (or more) at M.I.T. if he so desired. In the interim, there is the prospect of working with the MIT research staff one of several significant (and rather large problems). These include:

• How does one implement thermal efficiency on a large-scale basis? [Energy audits have been proposed in various federal and state legislation. America has limited capacity to perform such energy audits now. How can more than two million audits be performed effectively and cheaply in the next few years? And then once one has the information from such audits, what does an individual and society as a whole do with that information to reduce the carbon foot print?]





• How can one use sensor technology to improve food production efficiency (minimize use of fertilizers and pesticides) as well as food safety throughout the delivery process? [Interesting (and unverified) tidbits: Apparently the "average" food item travels more than fifteen hundred miles to the consumer's table. Also in some crops, only 50-70% of what is harvested is delivered to consumers.]





• In the shift from the internal combustion engine to alternative-fuel vehicles, how can we minimize the effects on energy infrastructure/distribution and consumer behavior? [For instance, liquefied natural gas-fueled vehicles and hydrogen fuel cell cars will need to refueled in urban areas. High densities of such energy sources are more dangerous than gasoline plus they take longer to transfer the potential energy to the vehicles than currently. What technology should be used to maximize safety and provide the same level of convenience available today?]

Each of these large and complicated research areas TCM could bring its expertise to. However, each requires further thought and investigation to before prioritizing one opportunity over another. There is now reason for much more conversation both with business associates and those not yet known. As an aside, TCM also has noted with interest how something seemed to have happened this year around the first of September (week before Labor Day). At least in the financial services sector, it was almost as if collectively everyone returned from their summer vacations and decided it had been about a year since the demise of Lehman Brothers and things were not so bad.

In short, conversations dramatically have picked up. TCM is not yet sure whether some of the contemplated projects might actually get budgeted and be implemented. However, it seems as if many are now open to the possibility of doing "smart" or "opportunistic" things to improve their respective businesses. This is so different vis-à-vis the feeling back in the first six months of 2009 of wondering whether one might even have a job in a few weeks' time.

For instance, earlier this week TCM was approached with an interesting idea about how the terminally-ill elderly population in the United States might be served by a new financial services product. Like the other ideas raised as possibilities for TCM to pursue, this too will require some thought and investigation. It is an intriguing idea, but also fraught with various issues that need to be thought through.

In this period of transition, TCM welcomes readers who might want to contact us with various business opportunities and project ideas. What now seems certain is that by the time the 2010 New Year starts TCM will have transitioned from a focus on Life Settlements to another interesting (and major) project area. Just what it may be remains open. However, the possibilities are very intriguing and it is great to be having to think hard about new topics!!