It has long been my impression that Professor Dawkins' emotions override his commitment to the highest standards of scholarly argument and research, and this is stated as a clear accusation by a victim of one of his attacks, the distinguished academic philosopher and former atheist Anthony Flew:
Dawkins is not interested in the truth as such but is primarily concerned to discredit an ideological opponent by any available means. That would itself constitute sufficient reason for suspecting that the whole enterprise of The God Delusion was not, as it at least pretended to be, an attempt to discover and spread knowledge of the existence or non-existence of God but rather an attempt – an extremely successful one – to spread the author’s own convictions in this area.
For the rest of Professor Flew's article, please see here.
I am not concerned to argue the case either for or against atheism here. There are honourable people on both sides of the argument.
But I am concerned that an eminent scientist long associated with my university should lose his professional compass so grossly on a matter that deeply interests and affects millions of people.
It is also worth noting, as perhaps many do not realise, that Professor Dawkins was, in effect, sponsored by an American billionaire to ride his hobby horse. The University's website openly admits:
Simonyi Professorship was set up with the express intention that its first holder should be Richard Dawkins.
I should like to know who is (and was then) on the appointments board for the Simonyi Professorship, and the interconnexions among them and others including the successful candidate and Mr Simonyi himself. I fear that the more I come to know about this, the more I may possibly feel that the Chair and its surrounding issues might serve to lessen respect for the University and its work.
If there is any reader of this post who teaches or is attending, or has taught or attended at Oxford University and would care to join me in a letter to the University inquiring into the Simonyi Professorship, I should be obliged if he/she would get in touch with me.
Saturday, December 31, 2011
Wednesday, December 28, 2011
Monday, December 26, 2011
Special Educational Needs and Inequality
One might (perhaps) expect that less wealthy areas of England would have a higher proportion of children identified as having Special Educational Needs (SEN). Not so, according to this graph on page 103 of the NHS Atlas of Variation in Healthcare (November 2011 edition):
Using a measure called Indices of Multiple Deprivation and correlating it with the proportion of primary age children with a SEN Statement, it seems that children from poorer areas are less likely to be so diagnosed.
I don't think that's a true reflection of underlying need. There's loads of children with EBD (emotional and behavioural difficulties) and pace Mr Clegg the modern pattern of disrupted family structure really doesn't tend to help them. Perhaps schools that have more such children accept the situation as "normal"; or maybe their SENCOs (Special Educational Needs Coordinators) are simply overwhelmed. It's notable that primary age children are more likely to get excluded in Year 6, as the dreaded teacher-damning SATS exams draw near and the school finally decides that it can't afford to have a severely disruptive child in the group - was there really no such difficulty in the years before that?
But there are other kinds of need. Autism is an interesting case, and incidence of diagnosis is seemingly influenced by the social class of the family - an ASD (autistic spectrum diagnosis) expert in Birmingham LEA told us a year or two ago that the better-off quarters of Birmingham were yielding an ASD diagnosis rate some five times higher than in poorer areas. Perhaps it's because ASD doesn't carry the same potential stigma for the parent - it's genetic rather than a consequence of poor parenting skills - and perhaps also it's because it's a good way to attract extra attention and resources for your child (autism is a lifelong condition, unlike, er, "naughtiness").
Not that autism isn't real - I have taught autistic children all the way from mild cases down to the ones that can't or don't speak at all. But middle-class parents are (naturally) better at fighting their child's corner to get the diagnosis. And it strengthens their arm that the techniques and resources specifications in SEN statements are legally enforceable - such fun, as Miranda Hart's on-screen mum likes to say.
So in some ways the graph above is inadequate - it needs to be broken down into types of disability, and further into economic sub-divisions of the LEA (there is a world of difference between, say, Nechells and Hall Green). But even with the data aggregated in the way it is, there seem to be more questions to ask about inequalities in diagnosis and provision.
Using a measure called Indices of Multiple Deprivation and correlating it with the proportion of primary age children with a SEN Statement, it seems that children from poorer areas are less likely to be so diagnosed.
I don't think that's a true reflection of underlying need. There's loads of children with EBD (emotional and behavioural difficulties) and pace Mr Clegg the modern pattern of disrupted family structure really doesn't tend to help them. Perhaps schools that have more such children accept the situation as "normal"; or maybe their SENCOs (Special Educational Needs Coordinators) are simply overwhelmed. It's notable that primary age children are more likely to get excluded in Year 6, as the dreaded teacher-damning SATS exams draw near and the school finally decides that it can't afford to have a severely disruptive child in the group - was there really no such difficulty in the years before that?
But there are other kinds of need. Autism is an interesting case, and incidence of diagnosis is seemingly influenced by the social class of the family - an ASD (autistic spectrum diagnosis) expert in Birmingham LEA told us a year or two ago that the better-off quarters of Birmingham were yielding an ASD diagnosis rate some five times higher than in poorer areas. Perhaps it's because ASD doesn't carry the same potential stigma for the parent - it's genetic rather than a consequence of poor parenting skills - and perhaps also it's because it's a good way to attract extra attention and resources for your child (autism is a lifelong condition, unlike, er, "naughtiness").
Not that autism isn't real - I have taught autistic children all the way from mild cases down to the ones that can't or don't speak at all. But middle-class parents are (naturally) better at fighting their child's corner to get the diagnosis. And it strengthens their arm that the techniques and resources specifications in SEN statements are legally enforceable - such fun, as Miranda Hart's on-screen mum likes to say.
So in some ways the graph above is inadequate - it needs to be broken down into types of disability, and further into economic sub-divisions of the LEA (there is a world of difference between, say, Nechells and Hall Green). But even with the data aggregated in the way it is, there seem to be more questions to ask about inequalities in diagnosis and provision.
Thursday, December 22, 2011
How to become incredibly rich in the coming total economic collapse
You can't. And I don't want to read any more articles promising something like this.
Tuesday, December 20, 2011
China is in the same debt boat as the rest of us
Robert Wenzel reports a Roubini tweet that the real government debt-to-GDP ratio in China is 80%.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Sunday, December 18, 2011
Trust is breaking down wholesale, hoarding has begun - UPDATED 02 Jan 2012
The following started off on my grumble outlet Bearwatch, but looks like it's getting more serious:
“You can’t trust anybody and the entire system is collapsing. What’s the takeaway from this? It’s to make sure you have every penny in your pocket.”
Gerald Celente, Trends Research Institute founder, following the disappearance of his six-figure holdings at MF Global shortly before he was due to take delivery of physical gold. More here.
Update: and the chorus swells...
"It is up to you to decide how much you're willing to risk losing to a crook. If the answer is "none" or you cannot reduce the at-risk portion of your assets to what you're willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank." - Karl Denninger.
"Now may be the time to exit all arrangements not specifically guaranteed directly by the government, and bring your money home. And better yet if no guarantees are required, and no parties standing between you and your wealth." - Jesse.
... and swells...
"Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason." - Dr Pippa Malmgren
"The whole system is going down. Pull your money out your Fidelity account, your Schwab account, and your ETFs." - Gerald Celente (again)
- both quoted here.
"Odds of a big market breakdown are both high and rising." - Mish.
... and balloons...
"The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt." - Jesse (17 Dec 2011)
This gels with a recent post by David Malone, where he discusses a little-known rider to the (US) Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The amendment concerned overrides bankruptcy protection protocols that are designed to treat creditors equally, such that if Bank A has "repo" or derivatives contract business with Bank B, and Bank B fails (or is forced into failure...), Bank A can grab the collateral straight away, not waiting for the trustee to sort out who gets what.
And if some of that collateral is money or other valuables you (an innocent third party) deposited with Bank B, hard luck, it seems.
Ostensibly, this legislation was to prevent systemic collapse as Bank B's failure could make Bank A insolvent, then subsequently Banks C and D etc. But, as Malone points out, it's also potentially an invitation to stronger (or at least, public-money-supported) banks to tip weaker ones into insolvency and grab assets, leaving other creditors to sue for their return (if they can afford to do so). Possession is nine points of the law, as the adage goes. Apparently, this deadly revision is written into banking legislation beyond America's shores.
In turn, that reminds me of something Malone wrote back in October, reporting what a top Irish banker said to him, off the record:
"According to this very senior banker it was now known that the plan was all but agreed to re-capitalize all the banks but to the very minimum degree. France and Germany were agreed on this. As I wrote before I left, there has been a bidding war looking for the lowest amount.
"The horse trading and arguing is of a quite different nature.What is being thrashed out is a list, for use after this across the board, minimum bail out, of which banks will be saved and which will be left to die when they next have a problem. The horse trading is over who will be saved and who damned.
"In other words the decision has been reached that this is the last pan-Europe, all bank bail out attempt. After this it is recognized that Europe and the IMF cannot save all the banks. And so only the most systemically vital are going to be saved and the rest will be allowed to save themselves if they can or die if they cannot."
It's possible that a vicious internecine cannibalism is about to commence in the international banking industry, and plenty of innocent bystanders could suddenly find they're hurt.
Little wonder, then that even bankers have started to hoard food.
Further update (27 December - hat-tip to Jesse): Gonzalo Lira writes...
Now, question: When is there ever a panic? When is there ever a run on a financial system?
Answer: When enough participants no longer trust the system. It is the classic definition of a tipping point. It’s not that all of the participants lose faith in the system or institution. It’s not even when most of the participants lose faith: Rather, it’s when a mere some of the participants decide they no longer trust the system that a run is triggered.
And though this is completely subjective on my part—backed by no statistics except scattered anecdotal evidence—but it seems to me that MF Global has shoved us a lot closer to this theoretical run on the system.
As I write this, a lot of investors whom I know personally—who are sophisticated, wealthy, and not at all the paranoid type—are quietly pulling their money out of all brokerage firms, all banks, all equity firms. They are quietly trading out of their paper assets and going into the actual, physical asset.
Note that they’re not trading into the asset—they’re simply exchanging their paper-asset for the real thing.
Why? MF Global.
More... 2 January: James Howard Kunstler's 2012 forecast...
There are signs that a lot of people who still have something resembling money invested in various funds will go to cash in the weeks ahead, including under-the-mattress style. The distrust and paranoia is palpable now, with the frenzies of Yuletide bygone for another year. After all, why trust banks, especially the TBTF monsters. Such a mass move could take the starch even out of highly manipulated equity markets.
___________________________________________________________________________
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
“You can’t trust anybody and the entire system is collapsing. What’s the takeaway from this? It’s to make sure you have every penny in your pocket.”
Gerald Celente, Trends Research Institute founder, following the disappearance of his six-figure holdings at MF Global shortly before he was due to take delivery of physical gold. More here.
Update: and the chorus swells...
"It is up to you to decide how much you're willing to risk losing to a crook. If the answer is "none" or you cannot reduce the at-risk portion of your assets to what you're willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank." - Karl Denninger.
"Now may be the time to exit all arrangements not specifically guaranteed directly by the government, and bring your money home. And better yet if no guarantees are required, and no parties standing between you and your wealth." - Jesse.
... and swells...
"Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason." - Dr Pippa Malmgren
"The whole system is going down. Pull your money out your Fidelity account, your Schwab account, and your ETFs." - Gerald Celente (again)
- both quoted here.
"Odds of a big market breakdown are both high and rising." - Mish.
... and balloons...
"The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt." - Jesse (17 Dec 2011)
This gels with a recent post by David Malone, where he discusses a little-known rider to the (US) Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The amendment concerned overrides bankruptcy protection protocols that are designed to treat creditors equally, such that if Bank A has "repo" or derivatives contract business with Bank B, and Bank B fails (or is forced into failure...), Bank A can grab the collateral straight away, not waiting for the trustee to sort out who gets what.
And if some of that collateral is money or other valuables you (an innocent third party) deposited with Bank B, hard luck, it seems.
Ostensibly, this legislation was to prevent systemic collapse as Bank B's failure could make Bank A insolvent, then subsequently Banks C and D etc. But, as Malone points out, it's also potentially an invitation to stronger (or at least, public-money-supported) banks to tip weaker ones into insolvency and grab assets, leaving other creditors to sue for their return (if they can afford to do so). Possession is nine points of the law, as the adage goes. Apparently, this deadly revision is written into banking legislation beyond America's shores.
In turn, that reminds me of something Malone wrote back in October, reporting what a top Irish banker said to him, off the record:
"According to this very senior banker it was now known that the plan was all but agreed to re-capitalize all the banks but to the very minimum degree. France and Germany were agreed on this. As I wrote before I left, there has been a bidding war looking for the lowest amount.
"The horse trading and arguing is of a quite different nature.What is being thrashed out is a list, for use after this across the board, minimum bail out, of which banks will be saved and which will be left to die when they next have a problem. The horse trading is over who will be saved and who damned.
"In other words the decision has been reached that this is the last pan-Europe, all bank bail out attempt. After this it is recognized that Europe and the IMF cannot save all the banks. And so only the most systemically vital are going to be saved and the rest will be allowed to save themselves if they can or die if they cannot."
It's possible that a vicious internecine cannibalism is about to commence in the international banking industry, and plenty of innocent bystanders could suddenly find they're hurt.
Little wonder, then that even bankers have started to hoard food.
Further update (27 December - hat-tip to Jesse): Gonzalo Lira writes...
Now, question: When is there ever a panic? When is there ever a run on a financial system?
Answer: When enough participants no longer trust the system. It is the classic definition of a tipping point. It’s not that all of the participants lose faith in the system or institution. It’s not even when most of the participants lose faith: Rather, it’s when a mere some of the participants decide they no longer trust the system that a run is triggered.
And though this is completely subjective on my part—backed by no statistics except scattered anecdotal evidence—but it seems to me that MF Global has shoved us a lot closer to this theoretical run on the system.
As I write this, a lot of investors whom I know personally—who are sophisticated, wealthy, and not at all the paranoid type—are quietly pulling their money out of all brokerage firms, all banks, all equity firms. They are quietly trading out of their paper assets and going into the actual, physical asset.
Note that they’re not trading into the asset—they’re simply exchanging their paper-asset for the real thing.
Why? MF Global.
More... 2 January: James Howard Kunstler's 2012 forecast...
There are signs that a lot of people who still have something resembling money invested in various funds will go to cash in the weeks ahead, including under-the-mattress style. The distrust and paranoia is palpable now, with the frenzies of Yuletide bygone for another year. After all, why trust banks, especially the TBTF monsters. Such a mass move could take the starch even out of highly manipulated equity markets.
___________________________________________________________________________
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Saturday, December 17, 2011
Even bankers are hoarding food
Extract from an article in today's Daily Mail:
‘It is not “crazies” buying this,’ says James Blake, whose company Emergency Food Storage specialises in freeze-dried foods. ‘We get a lot of high-powered business people as customers. Most people buy insurance for their health, their house or their life — this is food insurance.
‘Of course, we hope it never happens, but if there is a major catastrophe, then money is not going to be worth much after a couple of days. It will be food that becomes the most needed thing.’
Dave Hannah and his company B-Prep sell similar products. He says a number of his customers are bankers. Their average spend is £3,000.
‘It is not “crazies” buying this,’ says James Blake, whose company Emergency Food Storage specialises in freeze-dried foods. ‘We get a lot of high-powered business people as customers. Most people buy insurance for their health, their house or their life — this is food insurance.
‘Of course, we hope it never happens, but if there is a major catastrophe, then money is not going to be worth much after a couple of days. It will be food that becomes the most needed thing.’
Dave Hannah and his company B-Prep sell similar products. He says a number of his customers are bankers. Their average spend is £3,000.
Tuesday, December 13, 2011
The bank runs are starting
"Latvia's largest bank scrambled Monday to head off a run among depositors who were gripped by rumours of the bank's imminent ruin.
Weekend rumours that Swedbank was facing legal and liquidity problems in Estonia and Sweden sent thousands of Latvians to bank machines on Sunday, with some lines reaching as many as 50 people."
"... the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009."
Quoted in The Economic Collapse Blog (see point 16 in that post)
This combination of distrust of banks with raids on savings to support normal expenditure is reflected here in the UK. I know of a British financial journalist who is starting to hoard cash, and ING's third quarter report on savings shows that the ordinary person's cash reserves are continuing to decline:
In a technical article (which I confess I find difficult to fathom - draw me a picture, somebody!), Tyler Durden looks at desperate attempts by the Federal Reserve and others to pump money into the economy as fast the "shadow banking" system is losing it.
We appear to be in a mighty conflict between the forces of deflation and inflation. A miscalculation one way will give us full-scale economic depression, and the other way will result in hyperinflation (followed closely by economic depression). The balance has to be got exactly right, and if our leaders, bankers and economists were clever enough to achieve that we wouldn't be in this situation in the first place.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Weekend rumours that Swedbank was facing legal and liquidity problems in Estonia and Sweden sent thousands of Latvians to bank machines on Sunday, with some lines reaching as many as 50 people."
"... the outflow of funds from Greek bank accounts has been accelerating rapidly. At the start of 2010, savings and time deposits held by private households in Greece totalled €237.7 billion -- by the end of 2011, they had fallen by €49 billion. Since then, the decline has been gaining momentum. Savings fell by a further €5.4 billion in September and by an estimated €8.5 billion in October -- the biggest monthly outflow of funds since the start of the debt crisis in late 2009."
Quoted in The Economic Collapse Blog (see point 16 in that post)
This combination of distrust of banks with raids on savings to support normal expenditure is reflected here in the UK. I know of a British financial journalist who is starting to hoard cash, and ING's third quarter report on savings shows that the ordinary person's cash reserves are continuing to decline:
In a technical article (which I confess I find difficult to fathom - draw me a picture, somebody!), Tyler Durden looks at desperate attempts by the Federal Reserve and others to pump money into the economy as fast the "shadow banking" system is losing it.
We appear to be in a mighty conflict between the forces of deflation and inflation. A miscalculation one way will give us full-scale economic depression, and the other way will result in hyperinflation (followed closely by economic depression). The balance has to be got exactly right, and if our leaders, bankers and economists were clever enough to achieve that we wouldn't be in this situation in the first place.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Monday, December 12, 2011
Down with France, says Chinese rating agency
Dagong has re-rated France's debt from AA- to A+ on 8th December. This anticipates the Reuters report that France can expect to lose her AAA rating next year, and goes much further than the view of some commentators in the latter article that perhaps the rating should drop to AA.
Sunday, December 11, 2011
Why David Cameron deserves no credit whatever for his EU veto
It is quite clear that Cameron's veto was not down to his growing a pair of balls, or a spine, heart or brain, come to that: it was the inevitable result of overreaching by Sarkozy and Merkel.
Blinded by their doctrinaire EU-federalism, they failed to see that they were pushing the British PM into a place where he simply cannot go. His Party has been split for decades on the Europe issue and even the Opposition Labour Party is divided (though at pains to conceal this so as to increase the Conservatives' fratricidal anguish), much of the electorate that has sufficient education and intelligence to take an interest is in favour of leaving the EU altogether, and thanks to the financialisation of our economy, we need the City because taxing its thieves is what is keeping our gunwales above the waterline.
When the French and German Sir Humphreys are finally allowed to talk some sense into their masters' hot heads, there will be another deal offered. My guess is a temporary derogation for the City from the proposed tighter regulations - perhaps five years, or until some round-figure year such as 2020.
Or, if the French wish to get in another dig, 18th June 2015. The rationalists of the Revolution are more superstitious than the religious they despise, and the bicentenary of Waterloo would afford them a satisfying symbolic revenge. It would be like Hitler's decision to have the French sign the second armistice at Compiègne in 1940, in the same railway carriage where the Germans had to sign their surrender in 1918.
This regulostice would allow time for our pinstriped crooks either to filch what's needed for a comfortable early retirement, or to find positions on the Bourse, the Börse and (of course) the Far Eastern (and maybe Australian) exchanges where all the exciting action of the future will be centred. And the British politicians and their placemen will doubtless reap their Quisling rewards in Brussels and Strasbourg.
At any rate, cancel the flags, bunting and bands.
Blinded by their doctrinaire EU-federalism, they failed to see that they were pushing the British PM into a place where he simply cannot go. His Party has been split for decades on the Europe issue and even the Opposition Labour Party is divided (though at pains to conceal this so as to increase the Conservatives' fratricidal anguish), much of the electorate that has sufficient education and intelligence to take an interest is in favour of leaving the EU altogether, and thanks to the financialisation of our economy, we need the City because taxing its thieves is what is keeping our gunwales above the waterline.
When the French and German Sir Humphreys are finally allowed to talk some sense into their masters' hot heads, there will be another deal offered. My guess is a temporary derogation for the City from the proposed tighter regulations - perhaps five years, or until some round-figure year such as 2020.
Or, if the French wish to get in another dig, 18th June 2015. The rationalists of the Revolution are more superstitious than the religious they despise, and the bicentenary of Waterloo would afford them a satisfying symbolic revenge. It would be like Hitler's decision to have the French sign the second armistice at Compiègne in 1940, in the same railway carriage where the Germans had to sign their surrender in 1918.
This regulostice would allow time for our pinstriped crooks either to filch what's needed for a comfortable early retirement, or to find positions on the Bourse, the Börse and (of course) the Far Eastern (and maybe Australian) exchanges where all the exciting action of the future will be centred. And the British politicians and their placemen will doubtless reap their Quisling rewards in Brussels and Strasbourg.
At any rate, cancel the flags, bunting and bands.
Sunday, November 27, 2011
CONFIRMED: America turns fascist, 200 years of history is tipped into the harbour - UPDATED
FURTHER UPDATE: It's happened. Now it's the US Government vs the US Constitution.
UPDATE: looks like it's really going to happen.
Congress seems set to do what King George would dearly have loved to be able to do.
If "government of the people, by the people, for the people" shall "perish from the earth", then never mind Britain becoming the 51st State, let the US become Britain's 87th county - its largest, but who cares, neither of us has been a democracy for a while now, so it's not as though your puny vote makes a difference. And you don't understand tea any more, so the tax shouldn't matter, either.
You are now ruled by a wealthy aristocracy who regard most of you as servants, mendicants or gallows-fodder. Whenever you look like causing trouble you are sent overseas to busy yourselves in armed conflict. The rich delegate the running of their estates to ruthless managers and spend their time in fashionable salons close to power, where they lobby for yet more liberty for themselves and the enslavement of all others.
Just like us. And just like the eighteenth century.
Esau, you fool.
UPDATE: looks like it's really going to happen.
Congress seems set to do what King George would dearly have loved to be able to do.
If "government of the people, by the people, for the people" shall "perish from the earth", then never mind Britain becoming the 51st State, let the US become Britain's 87th county - its largest, but who cares, neither of us has been a democracy for a while now, so it's not as though your puny vote makes a difference. And you don't understand tea any more, so the tax shouldn't matter, either.
You are now ruled by a wealthy aristocracy who regard most of you as servants, mendicants or gallows-fodder. Whenever you look like causing trouble you are sent overseas to busy yourselves in armed conflict. The rich delegate the running of their estates to ruthless managers and spend their time in fashionable salons close to power, where they lobby for yet more liberty for themselves and the enslavement of all others.
Just like us. And just like the eighteenth century.
Esau, you fool.
Saturday, November 26, 2011
Gender, obedience and the education system
I know a couple who decided to educate all their children at home, because schools teach conformity. (The children all did very well, in different ways.)
There is a famous experiment by the Yale psychologist Stanley Milgram, who wanted to test whether the Holocaust criminals' excuse "I was only obeying orders" was a true reflection of their feelings at the time. In 1961, he got volunteers to administer what they believed to be electric shocks of increasing intensity, to a human victim (who was merely acting). Disturbingly, some two-thirds of volunteers ultimately inflicted the highest-voltage "shock", despite misgivings, when reassured or ordered by an authority figure wearing a white coat.
I knew about that, but not until tonight, reading Richard Wiseman's "Quirkology", did I learn of a follow-up experiment, conducted some 10 years later. A flaw in the first test was that some participants may have correctly suspected that the man being given shocks was an actor; so researchers Charles Sheridan and Richard King repeated the experiment, using a live puppy. The results, reported in 1972 in a paper entitled "Obedience to authority with an authentic victim", were equally disturbing, with a fresh twist: slightly over half the male volunteers had been willing to use the maximum voltage, but 100% of the women complied, even though some of the latter burst into tears.
Back to schools. Primary schoolchildren have long been taught mostly by female teachers, but now women make up 87.5% of the staff, and 28% of state primaries have no men teachers at all; and though when I started teaching men were the majority in secondaries, by 2008 the balance had shifted so that 59% the teaching staff there were women.
Some questions:
There is a famous experiment by the Yale psychologist Stanley Milgram, who wanted to test whether the Holocaust criminals' excuse "I was only obeying orders" was a true reflection of their feelings at the time. In 1961, he got volunteers to administer what they believed to be electric shocks of increasing intensity, to a human victim (who was merely acting). Disturbingly, some two-thirds of volunteers ultimately inflicted the highest-voltage "shock", despite misgivings, when reassured or ordered by an authority figure wearing a white coat.
I knew about that, but not until tonight, reading Richard Wiseman's "Quirkology", did I learn of a follow-up experiment, conducted some 10 years later. A flaw in the first test was that some participants may have correctly suspected that the man being given shocks was an actor; so researchers Charles Sheridan and Richard King repeated the experiment, using a live puppy. The results, reported in 1972 in a paper entitled "Obedience to authority with an authentic victim", were equally disturbing, with a fresh twist: slightly over half the male volunteers had been willing to use the maximum voltage, but 100% of the women complied, even though some of the latter burst into tears.
Back to schools. Primary schoolchildren have long been taught mostly by female teachers, but now women make up 87.5% of the staff, and 28% of state primaries have no men teachers at all; and though when I started teaching men were the majority in secondaries, by 2008 the balance had shifted so that 59% the teaching staff there were women.
Some questions:
- How valid was the 1971 experiment, bearing in mind the small sample (26 people)?
- Has society changed since, so that the results would be very different if the same experiment were carried out today?
- Would it now make a difference depending on the gender of the white-coated superior? And would the results be affected by the whether or not the "boss" was the same gender as the volunteer?
- If women are indeed more obedient to authority than men, does this affect their expectations of obedience from the children, and how they react to a child's disobedience (or initiative)?
- Are male children equally obedient as female children? Should they be expected to be?
- Is men teachers' approach to obedience and conformity different from that of women teachers?
- Should the gender of the teacher be matched (or opposite) to the gender of the pupils, in single-sex classes?
- Is one gender better than another for teaching mixed-sex classes? And how about age groups?
- Do you, too, think it's better to keep your children from the hidden curriculum of schools?
What exactly is freedom?
It seems libertarians are mostly concerned about the right to get stoned. Question that, and you'll get hoary old stuff about alcohol and tobacco, and especially about how Prohibition didn't work.
I had a look at the US Prohibition story some time ago and it told quite a different story from what I'd always thought. I absolutely condemn these attempts at enforcement, but that's a story about the wickedness of power generally. As (I think) Charles Lamb said, "Governments are as bad as they dare to be."
But we are between Scylla and Charybdis. There is the power of government, and in resisting its excesses we may be tempted to assist the power of large corporations (which now appear to be growing mightier than the State and the People). The enemy of your enemy is not your friend - and in any case, corporations and the government are not mutually inimical after all: a career in politics often seems to be followed (if not accompanied at the time) by very lucrative dealings with the commercial sector.
And I have some doubts about Sartre-type definitions of freedom (he was very upset by Freud's theory of the unconscious). So here's some questions I want to repeat, from my comments over at the fine and idealistic people (no irony) at Orphans of Liberty:
And bearing in mind that, as I said there, black people I know reckon the Establishment’s soft on drugs because it keeps the blacks down:
4. Is freedom just freedom for me, me, me or should Robinson Crusoe respect Man Friday, too?
Sartre thought there was no such thing as collective freedom, until the Paris student riots of 1968, and then suddenly he did think it. But that's what happens when a first-class brain is faced with more than one thing it wants to believe.
I had a look at the US Prohibition story some time ago and it told quite a different story from what I'd always thought. I absolutely condemn these attempts at enforcement, but that's a story about the wickedness of power generally. As (I think) Charles Lamb said, "Governments are as bad as they dare to be."
But we are between Scylla and Charybdis. There is the power of government, and in resisting its excesses we may be tempted to assist the power of large corporations (which now appear to be growing mightier than the State and the People). The enemy of your enemy is not your friend - and in any case, corporations and the government are not mutually inimical after all: a career in politics often seems to be followed (if not accompanied at the time) by very lucrative dealings with the commercial sector.
And I have some doubts about Sartre-type definitions of freedom (he was very upset by Freud's theory of the unconscious). So here's some questions I want to repeat, from my comments over at the fine and idealistic people (no irony) at Orphans of Liberty:
- Is it freedom to fall victim to addictions?
- Or to allow powerful vested commercial interests to increase temptation and opportunity?
- Are we free if we merely act out compulsions, and other scripts written into our subconscious?
And bearing in mind that, as I said there, black people I know reckon the Establishment’s soft on drugs because it keeps the blacks down:
4. Is freedom just freedom for me, me, me or should Robinson Crusoe respect Man Friday, too?
Sartre thought there was no such thing as collective freedom, until the Paris student riots of 1968, and then suddenly he did think it. But that's what happens when a first-class brain is faced with more than one thing it wants to believe.
Friday, November 25, 2011
Sir Philip Green and homing chickens
Two years ago, I wondered why BBC econpundit Robert Peston made so little of Sir Philip Green's debt-funded £1.2 billion dividend extraction from the Arcadia Group. I said then:
However, if, in the economic downturn, turnover and profits are savaged, and tangible assets decline sharply in value, and Arcadia becomes very weak, or even goes bust, what will Peston say then? Arcadia Group employs 27,000 people; was it really OK, other than in a strictly legal sense, to put such a heavy yoke around its neck? Had the dividend not been paid - and especially, not been funded by humungous bank loans - what more might the group have achieved?
This "value-skimming" was the subject of adverse comment at the time, by The Independent newspaper.
Now, S'Philip threatens to close up to 260 shops and throw thousands out of work. He ascribes the problems to a number of factors, including "the climate". Richard Littlejohn is sceptical; anyone else feel the same way?
Where could Arcadia have got to today, without all those rocks in its panniers? It's still carrying £444.5 million of debts, according to the last accounts (which were reported in so upbeat a manner).
And as ever in our modern financial world, what A does, B suffers for. When the chickens come home to roost, it's not Sir Philip's head they'll be pooping on.
Nice place, Jersey (where wife Tina's Taveta Investments holding company is based); not so sure about Monaco, whose Monte Carlo district is described by AA Gill as "the sort of slum that rich people build when they lack for nothing except taste and a sense of the collective good" and where Tina is, technically, "domiciled". Where the physical Tina and her husband actually spend most of their time I can't say, but when it all turns sour I'm sure they won't be able to smell it.
However, if, in the economic downturn, turnover and profits are savaged, and tangible assets decline sharply in value, and Arcadia becomes very weak, or even goes bust, what will Peston say then? Arcadia Group employs 27,000 people; was it really OK, other than in a strictly legal sense, to put such a heavy yoke around its neck? Had the dividend not been paid - and especially, not been funded by humungous bank loans - what more might the group have achieved?
This "value-skimming" was the subject of adverse comment at the time, by The Independent newspaper.
Now, S'Philip threatens to close up to 260 shops and throw thousands out of work. He ascribes the problems to a number of factors, including "the climate". Richard Littlejohn is sceptical; anyone else feel the same way?
Where could Arcadia have got to today, without all those rocks in its panniers? It's still carrying £444.5 million of debts, according to the last accounts (which were reported in so upbeat a manner).
And as ever in our modern financial world, what A does, B suffers for. When the chickens come home to roost, it's not Sir Philip's head they'll be pooping on.
Nice place, Jersey (where wife Tina's Taveta Investments holding company is based); not so sure about Monaco, whose Monte Carlo district is described by AA Gill as "the sort of slum that rich people build when they lack for nothing except taste and a sense of the collective good" and where Tina is, technically, "domiciled". Where the physical Tina and her husband actually spend most of their time I can't say, but when it all turns sour I'm sure they won't be able to smell it.
Tuesday, November 22, 2011
Monday, November 21, 2011
Why I've been holding cash, for years - UPDATED - AGAIN... AND AGAIN!
“You can’t trust anybody and the entire system is collapsing. What’s the takeaway from this? It’s to make sure you have every penny in your pocket.”
Gerald Celente, Trends Research Institute founder, following the disappearance of his six-figure holdings at MF Global shortly before he was due to take delivery of physical gold. More here.
Update: and the chorus swells...
"It is up to you to decide how much you're willing to risk losing to a crook. If the answer is "none" or you cannot reduce the at-risk portion of your assets to what you're willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank." - Karl Denninger.
"Now may be the time to exit all arrangements not specifically guaranteed directly by the government, and bring your money home. And better yet if no guarantees are required, and no parties standing between you and your wealth." - Jesse.
... and swells...
"Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason." - Dr Pippa Malmgren
"The whole system is going down. Pull your money out your Fidelity account, your Schwab account, and your ETFs." - Gerald Celente (again)
- both quoted here.
"Odds of a big market breakdown are both high and rising." - Mish.
... and balloons...
"The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt." - Jesse (17 Dec 2011)
This gels with a recent post by David Malone, where he discusses a little-known rider to the (US) Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The amendment concerned overrides bankruptcy protection protocols that are designed to treat creditors equally, such that if Bank A has "repo" or derivatives contract business with Bank B, and Bank B fails (or is forced into failure...), Bank A can grab the collateral straight away, not waiting for the trustee to sort out who gets what.
And if some of that collateral is money or other valuables you (an innocent third party) deposited with Bank B, hard luck, it seems.
Ostensibly, this legislation was to prevent systemic collapse as Bank B's failure could make Bank A insolvent, then subsequently Banks C and D etc. But, as Malone points out, it's also potentially an invitation to stronger (or at least, public-money-supported) banks to tip weaker ones into insolvency and grab assets, leaving other creditors to sue for their return (if they can afford to do so). Possession is nine points of the law, as the adage goes. Apparently, this deadly revision is written into banking legislation beyond America's shores.
In turn, that reminds me of something Malone wrote back in October, reporting what a top Irish banker said to him, off the record:
"According to this very senior banker it was now known that the plan was all but agreed to re-capitalize all the banks but to the very minimum degree. France and Germany were agreed on this. As I wrote before I left, there has been a bidding war looking for the lowest amount.
"The horse trading and arguing is of a quite different nature.What is being thrashed out is a list, for use after this across the board, minimum bail out, of which banks will be saved and which will be left to die when they next have a problem. The horse trading is over who will be saved and who damned.
"In other words the decision has been reached that this is the last pan-Europe, all bank bail out attempt. After this it is recognized that Europe and the IMF cannot save all the banks. And so only the most systemically vital are going to be saved and the rest will be allowed to save themselves if they can or die if they cannot."
It's possible that a vicious internecine cannibalism is about to commence in the international banking industry, and plenty of innocent bystanders could suddenly find they're hurt.
Little wonder, then that even bankers have started to hoard food.
Gerald Celente, Trends Research Institute founder, following the disappearance of his six-figure holdings at MF Global shortly before he was due to take delivery of physical gold. More here.
Update: and the chorus swells...
"It is up to you to decide how much you're willing to risk losing to a crook. If the answer is "none" or you cannot reduce the at-risk portion of your assets to what you're willing to lose to fraud then you can no longer participate in the market at all, in any form, nor even do business with a bank." - Karl Denninger.
"Now may be the time to exit all arrangements not specifically guaranteed directly by the government, and bring your money home. And better yet if no guarantees are required, and no parties standing between you and your wealth." - Jesse.
... and swells...
"Ultimately, I will not be at all surprised to see Europe’s banking system shut for days while the losses and payments issues are worked out. People forget that the term “bank holiday” was invented in the 1930’s when the banks were shut for exactly the same reason." - Dr Pippa Malmgren
"The whole system is going down. Pull your money out your Fidelity account, your Schwab account, and your ETFs." - Gerald Celente (again)
- both quoted here.
"Odds of a big market breakdown are both high and rising." - Mish.
... and balloons...
"The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt." - Jesse (17 Dec 2011)
This gels with a recent post by David Malone, where he discusses a little-known rider to the (US) Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The amendment concerned overrides bankruptcy protection protocols that are designed to treat creditors equally, such that if Bank A has "repo" or derivatives contract business with Bank B, and Bank B fails (or is forced into failure...), Bank A can grab the collateral straight away, not waiting for the trustee to sort out who gets what.
And if some of that collateral is money or other valuables you (an innocent third party) deposited with Bank B, hard luck, it seems.
Ostensibly, this legislation was to prevent systemic collapse as Bank B's failure could make Bank A insolvent, then subsequently Banks C and D etc. But, as Malone points out, it's also potentially an invitation to stronger (or at least, public-money-supported) banks to tip weaker ones into insolvency and grab assets, leaving other creditors to sue for their return (if they can afford to do so). Possession is nine points of the law, as the adage goes. Apparently, this deadly revision is written into banking legislation beyond America's shores.
In turn, that reminds me of something Malone wrote back in October, reporting what a top Irish banker said to him, off the record:
"According to this very senior banker it was now known that the plan was all but agreed to re-capitalize all the banks but to the very minimum degree. France and Germany were agreed on this. As I wrote before I left, there has been a bidding war looking for the lowest amount.
"The horse trading and arguing is of a quite different nature.What is being thrashed out is a list, for use after this across the board, minimum bail out, of which banks will be saved and which will be left to die when they next have a problem. The horse trading is over who will be saved and who damned.
"In other words the decision has been reached that this is the last pan-Europe, all bank bail out attempt. After this it is recognized that Europe and the IMF cannot save all the banks. And so only the most systemically vital are going to be saved and the rest will be allowed to save themselves if they can or die if they cannot."
It's possible that a vicious internecine cannibalism is about to commence in the international banking industry, and plenty of innocent bystanders could suddenly find they're hurt.
Little wonder, then that even bankers have started to hoard food.
Sunday, November 20, 2011
It's not about the banks
Like Scarlett O'Hara in "Gone With The Wind", the banks believe their happiness trumps everyone else's. The web of bank debt and sovereign bonds has come to dominate the agenda, to the extent that Italy's government can be dismissed by foreign interests and replaced by a wholly unelected cabinet. 'This is not the time for elections but the time for actions', said Herman van Rompuy; no Abraham Lincoln, he.
Not all banks have misbehaved, but many of the largest now appear to be ruined enterprises, determined to take rest of us down with them. I cannot explain why our politicians have poured resources into these colanders, except in terms of self-interest as current or future workers for the money establishment.
The banks' self-absorption is assisted by news media such as the BBC, with e.g. their latest interactive infographic on the Eurodebt nexus. Here are some of the results, recast as a table - ranked by external debt to GDP:
The pundits' talk is of the PIIGS, yet after Ireland the next worst case - by a long way - is the UK.
Something is wrong here. It's not the facts (though in a fiat currency world, I'm not quite sure what a financial fact is), it's the perspective: we're forgetting to look at the balance sheet, i.e. the net international investment position (NIIP). Leslie Cuadra did this on Financial Sense at the end of August, and it paints a rather different picture. Of the 40 major countries he surveyed, the US is at the bottom, and Spain next up. Greece's position is much better, scarcely worse than that of France. Hmmm...
Let's widen the view a bit further. Here are Cuadra's figures, reinterpreted in the light of the IMF's data on GDP (click to enlarge):
This arrangement chimes better with our level of concern, at least with four of the PIIGS; yet it leaves us wondering why democracy has suddenly been abolished in Italy. And why are we worrying about Japan, when she looks so good on these rankings?
It would seem that there is no one picture that tells the whole story. And that, I would suggest, is because there are many stories, many competing agendas. There's a sort of economic Great Game going on, with a full cast of tyrants, traitors, spies, revolutionaries and dumb foot-soldiers pepper-spraying harmless women. It is a time of great and unpredictable change, which is why gold has soared and the people are stocking their cellars and buying ammo faster than it can be made.
An increasing concern, for me at least, is that the system (if it is a system) may not be able to contain this degree of instability, or at least, some parts of it are more vulnerable to fluctuation than others . If I may offer a pictorial analogy?
Equilibrium can be achieved at many different energy levels, and this has implications for the participants. If one of the mice hops off, there may be no effect at all, given the friction in a real-life device. But if Jumbo dismounts abruptly, Nellie will be lucky to avoid a broken leg, not to mention a possible smashed plank. And if Jumbo then playfully steps on one end of seesaw A, we're looking at a mouse in temporary low orbit, which is pretty much what happened in Iceland, Ireland and Greece.
Similarly, economic interconnectedness carries asymmetric potential perils, as shown in the table below, which uses the latest NIIP figures from the IMF's database (click to enlarge). For a small economy like Greece, a trifling sum such as $100 billion (a mere seventh of a TARP) represents around a third of national GDP, whereas the same sum is only about 3% of Germany's - chump change, almost. So it would be very easy for rich countries to forgive quite a lot of the debts of poor ones, and very beneficial for the recipients, especially those who have liabilities far exceeding their assets.
It would also be interesting to know to what degree, and in what ways, countries like Germany have benefited from tying peripheral European nations into the Eurozone. Perhaps it would be incautious of them to overplay, or over-rely on, the Protestant work ethic story in accounting for their dominance.
But the international web of finance has a further danger, for large and small economies alike. Those who are balancing mice, such as Russia (or even China, come to that) would not suffer a massive alteration to their NIIP/GDP ratio if asset or liability valuations changed by a few per cent; whereas a 10% valuation change for the UK means a boost or hit of two-thirds of GDP. Compare that with Austria, which has about the same negative NIIP in GDP terms, but which is balancing smaller figures.
One invests to get a return, and unless it's an in-and-out speculation the return is in the form of interest, dividends or rent. If your assets suddenly shrink - say because of relative movements in currencies - your income stream is pinched; if your liabilities swell, your outgoings become more burdensome. Clearly, Britain is exceptionally vulnerable to exchange rate fluctuations; but to a lesser extent, so are other countries such as Germany.
With share speculation, the growing volatility in the system can be insanely profitable for the gamblers - whose activities, far from being part of the steadying mechanism, may instead become a feedback loop that ends up smashing the engine. Andrew Haldane's July 2011 presentation to the Bank of England ("The race to zero") warned that as program trading in equities develops it will, mathematically, lead to more and worse "flash crashes".
But the bond market is much bigger, and the derivatives market is maybe 20 times world GDP. Never mind elephants, this is more like balancing two pods of blue whales. There's no room for error and there must be a political will to de-escalate. Sadly, I don't see it happening, yet. And it won't, so long as we think that the banks must be saved at all costs, together with their trading rooms.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Not all banks have misbehaved, but many of the largest now appear to be ruined enterprises, determined to take rest of us down with them. I cannot explain why our politicians have poured resources into these colanders, except in terms of self-interest as current or future workers for the money establishment.
The banks' self-absorption is assisted by news media such as the BBC, with e.g. their latest interactive infographic on the Eurodebt nexus. Here are some of the results, recast as a table - ranked by external debt to GDP:
The pundits' talk is of the PIIGS, yet after Ireland the next worst case - by a long way - is the UK.Something is wrong here. It's not the facts (though in a fiat currency world, I'm not quite sure what a financial fact is), it's the perspective: we're forgetting to look at the balance sheet, i.e. the net international investment position (NIIP). Leslie Cuadra did this on Financial Sense at the end of August, and it paints a rather different picture. Of the 40 major countries he surveyed, the US is at the bottom, and Spain next up. Greece's position is much better, scarcely worse than that of France. Hmmm...
Let's widen the view a bit further. Here are Cuadra's figures, reinterpreted in the light of the IMF's data on GDP (click to enlarge):
This arrangement chimes better with our level of concern, at least with four of the PIIGS; yet it leaves us wondering why democracy has suddenly been abolished in Italy. And why are we worrying about Japan, when she looks so good on these rankings?It would seem that there is no one picture that tells the whole story. And that, I would suggest, is because there are many stories, many competing agendas. There's a sort of economic Great Game going on, with a full cast of tyrants, traitors, spies, revolutionaries and dumb foot-soldiers pepper-spraying harmless women. It is a time of great and unpredictable change, which is why gold has soared and the people are stocking their cellars and buying ammo faster than it can be made.
An increasing concern, for me at least, is that the system (if it is a system) may not be able to contain this degree of instability, or at least, some parts of it are more vulnerable to fluctuation than others . If I may offer a pictorial analogy?
Equilibrium can be achieved at many different energy levels, and this has implications for the participants. If one of the mice hops off, there may be no effect at all, given the friction in a real-life device. But if Jumbo dismounts abruptly, Nellie will be lucky to avoid a broken leg, not to mention a possible smashed plank. And if Jumbo then playfully steps on one end of seesaw A, we're looking at a mouse in temporary low orbit, which is pretty much what happened in Iceland, Ireland and Greece.Similarly, economic interconnectedness carries asymmetric potential perils, as shown in the table below, which uses the latest NIIP figures from the IMF's database (click to enlarge). For a small economy like Greece, a trifling sum such as $100 billion (a mere seventh of a TARP) represents around a third of national GDP, whereas the same sum is only about 3% of Germany's - chump change, almost. So it would be very easy for rich countries to forgive quite a lot of the debts of poor ones, and very beneficial for the recipients, especially those who have liabilities far exceeding their assets.
It would also be interesting to know to what degree, and in what ways, countries like Germany have benefited from tying peripheral European nations into the Eurozone. Perhaps it would be incautious of them to overplay, or over-rely on, the Protestant work ethic story in accounting for their dominance.
But the international web of finance has a further danger, for large and small economies alike. Those who are balancing mice, such as Russia (or even China, come to that) would not suffer a massive alteration to their NIIP/GDP ratio if asset or liability valuations changed by a few per cent; whereas a 10% valuation change for the UK means a boost or hit of two-thirds of GDP. Compare that with Austria, which has about the same negative NIIP in GDP terms, but which is balancing smaller figures.
One invests to get a return, and unless it's an in-and-out speculation the return is in the form of interest, dividends or rent. If your assets suddenly shrink - say because of relative movements in currencies - your income stream is pinched; if your liabilities swell, your outgoings become more burdensome. Clearly, Britain is exceptionally vulnerable to exchange rate fluctuations; but to a lesser extent, so are other countries such as Germany.
With share speculation, the growing volatility in the system can be insanely profitable for the gamblers - whose activities, far from being part of the steadying mechanism, may instead become a feedback loop that ends up smashing the engine. Andrew Haldane's July 2011 presentation to the Bank of England ("The race to zero") warned that as program trading in equities develops it will, mathematically, lead to more and worse "flash crashes".
But the bond market is much bigger, and the derivatives market is maybe 20 times world GDP. Never mind elephants, this is more like balancing two pods of blue whales. There's no room for error and there must be a political will to de-escalate. Sadly, I don't see it happening, yet. And it won't, so long as we think that the banks must be saved at all costs, together with their trading rooms.
INVESTMENT DISCLOSURE: None. Still in cash (and index-linked National Savings Certificates), and missing all those day-trading opportunities.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content.
Saturday, November 19, 2011
Three cheers for Western democracy - CORRECTED
A naughty trespasser gets what's coming to her.http://www.newser.com/story/133682/police-pepper-spray-occupy-portland-protester-elizabeth-nichols.htmlCORRECTION: ... is offered a sample of a "food product"
43 years earlier...
But we have made progress. So many more channels these days. X Factor or Strictly, love?
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