The thing I like most about Google Reader is that it doesn't clutter itself up with useless pictures or fancy styling. After that, the thing I like next most is that it doesn't incorporate useless social information, such as what people I barely know think is interesting, or what they think about the things that I think are interesting. As a result, it is constantly open on my desktop, often with many tabs (I go along the newsfeeds, opening tabs when I find interesting stgories, then I read them one after another in a batch).
Uniformly, I have found that the people who like Google Reader are the high-intelligence, interesting and vocal types. Pity Google was unable to to see that from its usage figures. Yes, Google, there are not very many intelligent people in the world. But they ALL liked Reader, and now you have pissed them off. I hope Microsoft take this opportunity to bring something out to replace it! "Bing Reader," anybody? ("Bing!, and it's read!" — perhaps not.)
Thursday 28 March 2013
Wednesday 27 March 2013
Cypriot Banks — a run or a steady walk away?
So Cyprus is introducing capital controls. Predictable, in the wake of depositor losses and threatened losses.
However, in the age of the internet, of much more limited effect than it used to be. Time was, when ordinary people had no option for their banking needs than the banks in their local high street, or at best, in the centre of their city. A bank run meant that people flocked to their bank, took money out, hid it under the mattress and then, when things had settled down, promptly put it back in the same bank. Assuming, of course, that it still functioned.
Now people can transfer money over the internet. At best, they may transfer money to branches of foreign banks operating in Cyprus: that will kill the Cypriot banks without necessarily being catastrophic for their banking system and their balance of payments. At worst, they will send money abroad, as soon as they are allowed to, and in whatever small amounts they are allowed to, using automated payments to make sure they never miss an opportunity.
The article quotes a studend, one Thomas, as saying "They've just got rid of all our dreams." I think you're going to have to pay for your own dreams from now on, Thomas.
Incidentally, the article says that although they are now in for a decade of stagnation and falling living standards, at least the Cypriots have avoided the "catastrophe" of an exit from the Eurozone. Catastrophe? For whom? The one thing that the Cypriots don't need right now is to be inside the Eurozone. It will carry on making their goods uncompetitive and encouraging them to spend money they haven't got. You really couldn't make this up. The real exercise in masochism today is not some alleged "austerity" but a pointless, almost religious, dedication to the nonsense of Eurozone membership!
Also, I wouldn't like to be a German gas consumer next winter. Supplies from Russia are going to be, shall we say, unreliable.
However, in the age of the internet, of much more limited effect than it used to be. Time was, when ordinary people had no option for their banking needs than the banks in their local high street, or at best, in the centre of their city. A bank run meant that people flocked to their bank, took money out, hid it under the mattress and then, when things had settled down, promptly put it back in the same bank. Assuming, of course, that it still functioned.
Now people can transfer money over the internet. At best, they may transfer money to branches of foreign banks operating in Cyprus: that will kill the Cypriot banks without necessarily being catastrophic for their banking system and their balance of payments. At worst, they will send money abroad, as soon as they are allowed to, and in whatever small amounts they are allowed to, using automated payments to make sure they never miss an opportunity.
The article quotes a studend, one Thomas, as saying "They've just got rid of all our dreams." I think you're going to have to pay for your own dreams from now on, Thomas.
Incidentally, the article says that although they are now in for a decade of stagnation and falling living standards, at least the Cypriots have avoided the "catastrophe" of an exit from the Eurozone. Catastrophe? For whom? The one thing that the Cypriots don't need right now is to be inside the Eurozone. It will carry on making their goods uncompetitive and encouraging them to spend money they haven't got. You really couldn't make this up. The real exercise in masochism today is not some alleged "austerity" but a pointless, almost religious, dedication to the nonsense of Eurozone membership!
Also, I wouldn't like to be a German gas consumer next winter. Supplies from Russia are going to be, shall we say, unreliable.
Tuesday 26 March 2013
The "Dijsselbloem Principle" has to be right
The net effect of the 'Dijsselbloem Principle' will be to make raising debt more expensive for Eurozone banks, which will, over time, limit their ability to take on new risk, and therefore act to shrink their importance relative to the economy as a whole. With European banks being way much less well capitalised than American ones, this is surely the right way to go.
Saturday 23 March 2013
A Cautionary Tale
A poor shepherd, known for his prudent ways, saved every penny he could all his life long. In 1895, near the end of his days and never having married, he hid the money in a box in one of the fields he'd so often wandered while tending his flock. Rumour of his hoard passed into local legend as Old Mister Brown's Folly, and many was the local lad who tried to find it, though none ever did.
Until one day in 2013 when a man from Birmingham parked his car in the local Borough Council's car park nearby, and ran like a lunatic around the fields waving a metal detector. What luck! The detector went off with a beep, and the man dug up a rotten wooden box with a rusty iron handle and hinges. Trembling, the man broke open the box. Inside it were some large, white pieces of paper with strange, curly writing on them!
"Crumbs," he thought, "what's this?"
What it was, was twenty old Five Pound notes, from 1895 or thereabouts. One hundred pounds, at that time a veritable fortune for an 'umble working man.
But the man from Birmingham scowled. He'd heard of Old Mister Brown's Folly, and he'd been expecting a good deal more than this. Why the metal detector alone had cost more than that (he'd bought it specially for the job)! With a truly dreadful imprecation he grabbed the money and dashed the box to pieces on the stony hillside. Then he got into his car and drove dangerously fast to the nearest bank. A hundred pounds was better than nothing, he reasoned, and he could probably sell the metal detector as unused on eBay.
Unfortunately, when he got to the bank, the clerk said, "I'm sorry, Sir," (and he made a kind of pantomime dame voice when he said "Sir," to let the other tellers know that he was going to have a bit of fun with this geezer), "but this is not legal tender. It's quite worthless I'm afraid!" (and here his voice sounded all dramatic for a moment). And then, being curious, and noticing that it was nearly closing time, he added, "Where ever did you get it?"
So the man from Birmingham told him the whole story, to much muttering from the people in the queue behind him, who could see that they were clearly not going to get their money out before the bank closed, but who nevertheless were determined to stay and make pointed and quite audible comments behind his back. Some of them had even heard of the legend of the Folly, and were intrigued that it had at last been found.
As closing time arrived, the bank clerk, who had been keeping his eye on his watch, interjected, "What a shame, Sir, that Old Mister Brown didn't bury the money in the form of gold Sovereigns, which I note from my computer" — and he clicked some keys very quickly on his actually-just-a-terminal — "would now be worth..." and here he stopped, just like the judges on X-Factor, and made them wait a little bit longer, "... three hundred and sixty pounds each! Why, that's thirty-six thousand pounds, Sir! What a Shame".
And all the people in the queue cheered, to think how much money the man had missed out on.
Until one day in 2013 when a man from Birmingham parked his car in the local Borough Council's car park nearby, and ran like a lunatic around the fields waving a metal detector. What luck! The detector went off with a beep, and the man dug up a rotten wooden box with a rusty iron handle and hinges. Trembling, the man broke open the box. Inside it were some large, white pieces of paper with strange, curly writing on them!
"Crumbs," he thought, "what's this?"
What it was, was twenty old Five Pound notes, from 1895 or thereabouts. One hundred pounds, at that time a veritable fortune for an 'umble working man.
But the man from Birmingham scowled. He'd heard of Old Mister Brown's Folly, and he'd been expecting a good deal more than this. Why the metal detector alone had cost more than that (he'd bought it specially for the job)! With a truly dreadful imprecation he grabbed the money and dashed the box to pieces on the stony hillside. Then he got into his car and drove dangerously fast to the nearest bank. A hundred pounds was better than nothing, he reasoned, and he could probably sell the metal detector as unused on eBay.
Unfortunately, when he got to the bank, the clerk said, "I'm sorry, Sir," (and he made a kind of pantomime dame voice when he said "Sir," to let the other tellers know that he was going to have a bit of fun with this geezer), "but this is not legal tender. It's quite worthless I'm afraid!" (and here his voice sounded all dramatic for a moment). And then, being curious, and noticing that it was nearly closing time, he added, "Where ever did you get it?"
So the man from Birmingham told him the whole story, to much muttering from the people in the queue behind him, who could see that they were clearly not going to get their money out before the bank closed, but who nevertheless were determined to stay and make pointed and quite audible comments behind his back. Some of them had even heard of the legend of the Folly, and were intrigued that it had at last been found.
As closing time arrived, the bank clerk, who had been keeping his eye on his watch, interjected, "What a shame, Sir, that Old Mister Brown didn't bury the money in the form of gold Sovereigns, which I note from my computer" — and he clicked some keys very quickly on his actually-just-a-terminal — "would now be worth..." and here he stopped, just like the judges on X-Factor, and made them wait a little bit longer, "... three hundred and sixty pounds each! Why, that's thirty-six thousand pounds, Sir! What a Shame".
And all the people in the queue cheered, to think how much money the man had missed out on.
Saturday 9 March 2013
QE: global asset bubbles
A rather complacent article on the BBC website, What is driving the global stock market rally?, illustrates some of the circular thinking common on this subject. The basic thesis is that QE is driving stock markets up, because the QE asset purchases are driving down the return on "safe" government bonds. [Ha! remember when they used to call the short term government bond rate the "risk-free" rate?]
Althought he article goes on to find additional reasons for the stock market rise, it's its consideration of QE that I find most alarming, so I'll just make some notes on it here.
Firstly, the author asks how long QE can go on for:
Will this money supply continue?
Well, maybe not forever, but in the medium term, yes.
The reason it will continue is, appartnly, becuase governments will want it to: the BoE, the Fed and the BoJ all want to stimulate their econimies, and the QE will continue until they are popping. No thought of unintended consequences. Indeed it's difficult to see what's intended and what isn't. The initial impetus behind QE was said to be, when it was being considered, that it would spur banks to lend to firms, thus stimulating the economy. This famously hasn't happened, so I guess we are now supposed to think that the intention is to persuade people to spend by reintroducing a feel-good factor from rising asset prices, by creating bubbles in the stock market and eventually the real estate market too. God help us, we know how the last one ended.
The only thing I can see here is froth. Simultaneous QE in every continent, leading to simultaneous stock market and housing bubbles. When these burst, it will be like nothing we have ever seen: the world's first truly global bubbles, and several of them at the same time, likely accompanied or swiftly followed, by runaway inflation.
Sunday 3 March 2013
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