Deterministic nonperiodic thoughts

DJ Kentaro

2009-04-23T13:26:00.002+01:00

Tonight I am going to see DJ Kentaro, one of the gods of the turntables.

Seth Godin blows me away every single time

2009-04-23T02:04:00.002+01:00

Seth Godin at Gel 2006 from Gel Conference on Vimeo.

Predictably Irrational

2009-04-22T02:16:00.007+01:00

Interview with Dan Ariely, Behavioural Economist from Duke University and author of Predictably Irrational.

How to deal with toxic assets? It depends on the next election date.

2009-04-22T00:51:00.012+01:00

Dirk Nitzsche of City University Cass Business School makes an interesting point when interviwed on BBC World Business Report on April 21.

In Germany and in the UK:

A bank can set up a fully owned subsidiary "bad bank" where it can move its toxic or illiquid assets.
The bank has to pay what's effectively an insurance premium to the government, which underwrites the value of the assets in the bad bank.
The government may have to pay the for value of the toxic assets that it has underwitten, but only if the bank "makes a claim" for the insurance it has bought from the government.
The government has to pay nothing until the "claim" is made, which could be years from now.

In the US things are very different and more straightforward: The government, via a public-private partnership, is spending money to buy the toxic assets right now.

Question: Why are the German and British systems so convoluted and the American system so much simpler?

Answer: In Germany and in the UK there will be elections in less then one year. The system of "insurance" for toxic assets moves the government expenditure to after the election date. Or, in other words, off the balance sheet of the current government.

This is obviously not a problem in the States, where presidential elections are due in four years.

It's ironic that the German and the British government are themselves using financial wizardry to take care of their own interest first and of the economy second.

Open Source Book: 97 Things Every Software Architect Should Know

2009-04-21T03:26:00.003+01:00

This is an open source book. It's available online, and can be also ordered in the school paper form Amazon.

I must thank Ed for the pointer.

More pay controls

2009-04-20T02:09:00.003+01:00

More on pay controls, this time at the lower end of the scale.

Business leaders have called for a minimum wage freeze as part of measures to help private industry drive the economy out of recession.

Firms urge minimum wage freeze, BBC, 19 April 2009

Any half-decent introductory economics textbook explains that a minimum wage is at best useless and almost always bad for the emplyment and for the economy.

Dispite this, the general public, unions, and politicians want it.

Although desirable, I don't think it's politically feasible to remove the minimum wage completely. But let's hope that Alistair Darling at least does not increase it in the upcoming budget.

Cloud computing

2009-04-18T21:53:00.003+01:00

I attended recently SPA 2009. There were some discussions and one birds-of-a-feather (BoF) session on cloud computing.

FT digital business podcast has a series of three podcast on the topic. March 24, 31, and April 8.

Guess what: Pay controls don't work!

2009-04-17T23:54:00.004+01:00

"Lloyds and RBS to offer loans as staff bonuses", FT, April 16 2009.

See previous post.

Yale economists on the financial crisis

2009-04-16T15:01:00.006+01:00

John Geanakoplos, Robert Shiller, and Rick Levin on the financial crisis.

One more video that explains the financial crisis

2009-04-02T02:17:00.000+01:00

A very clear explanation of the financial crisis. It misses a few points, for example the role of the performace bonuses. But definitely worth watching.

PS: Thank you Natalie for the link.

Legalise it!

2009-03-31T16:11:00.004+01:00

Harvard Economist Jeffrey A. Miron writes:

The only way to reduce violence is to legalize drugs. Fortuitously, legalization is the right policy for a slew of other reasons.

Read full CNN article.

Friday Music Post: Teen-pop yesterday and today

2009-03-12T15:08:00.006Z

Teen pop is and has always been commercial, cheasy, and with a short shelf life. But music videos have definitely improved.

Miley Cyrus, Fly On The Wall, 2008

Vanessa Paradis, Joe le taxi, 1987

Protectionism again

2009-03-12T15:01:00.003Z

This time on human resources. Definetly bad news for people who, like me, have been thinking about getting an H-1B visa to work in the US.

http://online.wsj.com/article/SB123672811446488841.html

Quantitative Easing

2009-03-05T15:08:00.003Z

Quantitative Easing is the phrase of the day.

The FT has a web presentation that explains it.

There is, of course, also a wikipedia article.

Becker and Posner on the salary cap for bankers

2009-02-10T23:57:00.007Z

Obama, as part of his economic stimulus package, imposed a $500,000 annual cap on the salary of executives of banks that receive government aid.

Gary Baker and Richard Posner explain why the cap, like any form of price fixing, can only be a bad thing.

http://www.becker-posner-blog.com/archives/2009/02/

Many in the UK would like similar restricitons on bonuses for employees of banks that have received government aid.

http://news.bbc.co.uk/1/hi/uk_politics/7843124.stm

The same argument applies. Let's hope that the UK and other countries do not copy the US.

More on the global financial crisis

2009-02-10T23:46:00.005Z

I must thank my former collegue Immo for linking in his blog an excellent radio program that gives an explanation of the origin of the sub-prime loan crisis, which snowballed into the global recession in which we currently are.

The programme in particular explains the role played by the Fed's low interest rates and the massive pool of money from China and other developing countries, which created the huge demand for CDOs.

This is an aspect that I have not seen covered well anywhere else.

http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355

Funkscribe - synnthesized soul

2009-02-07T14:10:00.007Z

Yesterday I bought this from CD Baby. This is some awesome funk. Check out the tracks on MySpace .

It's also available on itunes (just search for "funkscribe"), but I got it from CD Baby because I hate itunes.

Links

More on protectionism

2009-02-07T14:00:00.006Z

The Economist seems to agree on protectionism and splashes the issue on this week's front page.

The article is available online also for non-subscribers.

Obama the protectionist

2009-02-04T01:31:00.005Z

Here we are. Obama's economic stimulus package contains a clause that seeks to ensure that only US iron, steel and manufactured goods are used in projects funded by the bill.

This means that:

About 9,000 US jobs are protected (in the short term) from foreign competition. A small number in absolute terms. The issue is more about sending a bad signal.
Americans will be paying more dearly for projects funded by the stimulus package. Basically the US government is saying to the tax payers: "We are going to spend a massive amount of money for things that we hope will be of some use. And we are going to spend it inefficiently. By the way, all this cash is borrowed from abraod and you'll have to pay it back with interest at some point in the coming years."
US workers and companies will be rewarded for their mediocrity. The money would be better spent by trying to make them more competitive, rather than by removing the competition.
If other countries take similar protectionist initiatives, the US will loose many more than the 9,000 jobs that the cause tries to protect.

Links:

BBC News Story

World News Today 03 Feb 2009

30 free books on personal finance

2009-01-29T01:30:00.006Z

An alarming number of friends of mine are doing grown up things like getting married or even making babies. Perhaps some of them will even need to plan their finances.

http://www.mint.com/blog/finance-core/30-free-ebooks-to-learn-everything-you-want-to-know-about-personal-finance/

Credit crunch: Joseph Stiglitz is cautiously pessimistic

2009-01-27T12:07:00.010Z

An interview for the Financial Times.

Related links

Trash law

2009-01-27T01:18:00.014Z

There is nothing better to start the week than a new trash law.

Here's the BBC story: http://news.bbc.co.uk/1/hi/england/berkshire/7851346.stm

Summary:

Crazy man sexually assults and kills woman
Crazy man owns violent pornographic images
Mother of murdered woman campains for making posesison of "extreme pornographic images" illegal
MP (Martin Salter, Labour, in the picture) actually listens and backs mother of murdered woman
Parliament passes the trash law

Why this is a trash law:

Has anyone provided evidence that posession of "extreme pornographic images" increases the likelyhood of committing crimes?
Has anyone provided evidence that the ban is likely to achive the desired effect? Has this been tried in other countries? With what result?
What's the desired result anyway? A 10% reduction? 20%?

Obviously the effectiveness of the law is backed by no evidence.

The law will ...

not reduce sex crimes
waste police resources
convince some people that governmant is taking action, useless unfortunately, to reduce sex crimes
reduce personal freedom with no need

Timewarp inc

2009-01-25T00:36:00.007Z

This week I found on Soma FM another gem: Timewarp inc.

The track that caught my attention was dope Dope Smoker.

I looked them up on myspace and this band from Greece, certainly an unusual place for good funk music, has many good tracks under their belts.

Dope Smoker is contained in the album Dub My Funky Groove.

They have just released a new album: Groovy Booty.

Their tracks are available on Juno.

Related links

TED Conference, July 21-24, 2009, Oxford, UK.

2009-01-24T00:56:00.004Z

In the past days I have been watching the videos of the excellent presentations from previous TED conferences. Like this one:

TED (Technology, Entertainment, Design) is an annual conference that defines its mission as "ideas worth spreading". The lectures, also called TED talks, cover a broad set of topics including science, arts and design, politics, culture, business, global issues, technology and development, and entertainment. Speakers come from a similarly wide variety of communities and disciplines and have included high-profile people such as former U.S. president Bill Clinton, Nobel laureates James D. Watson, Murray Gell-Mann, Al Gore, internet entrepreneur Jimmy Wales, and Google co-founders Sergey Brin and Larry Page.

TEDGlobal 2009 is going to take place in Oxford on July 21-24.

I am tempted to apply to attend.

Eric Raymond on EconTalk

2009-01-21T23:19:00.005Z

In this week's EconTalk Ross Roberts interviews open source supergeek Eric Raymond.

If you have been active in the open source community, or just kept an eye on it, Eric's views and his essay The Cathedral and the Bazaar should not bring any news.

If not, this interview and the other resources listed on the EconTalk website are a good place to start to learn more about open source.

I read The Cathedral and the Bazaar when it came out in '97. It brings back memories of various larval stages and nights spent hacking around with Linux.

http://www.econtalk.org/archives/2009/01/eric_raymond_on.html

On sleeping

2009-01-15T16:43:00.007Z

I am definitely night owl. When I don't have to be in an office every morning, I drift quickly into a 10-hour sleep 18-20-hour wake cycle. This would be OK on a planet with a 30-hours rotation, on earth, that means jumping about two timezones per day. Today, I am biorithmically in New York.

The positive note is that research indicates that I should be more creative and less stressed than the average.

See Wired article: http://www.wired.com/science/discoveries/magazine/17-01/st_3st

Steve Forbes on the economy (A bit more optimism)

2009-01-14T20:03:00.004Z

Steve Forbes, President and CEO of Forbes magazine gives his opinion about the economy.

http://news.bbc.co.uk/1/hi/programmes/world_news_america/7821611.stm

A bit of optimism

2009-01-14T19:41:00.002Z

Two Stanford economists argue it will be over sooner than we think:

http://www.voxeu.org/index.php?q=node/2785