Another shrewdy
Feb. 14th, 2008 08:11 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
peterbirksNo matter how good you think you are at gambling, the chances are that, eventually, negative EV or poor bankroll management will catch you out.
Statto was declared insolvent on February 4 at a Manchester court.
http://www.timesonline.co.uk/tol/news/uk/article3365685.ece
Hubris? A bad run? Denial?
++++++++++++
The auditors are all marching to the same drumbeat -- that beat being "remember Arthur Andersen". AIG had to write down $4bn. Bradford and Bingley has been hit for a much smaller amount, mainly because "optimistic" estimates of the value of certain illiquid synthetic financial products are being stomped on by the auditors; "and we don't care how important a client you are". If they are willing to do it to AIG, they can do it to anyone.
Look for several bank CEOs in the UK spitting feathers this month as they have to put huge losses onto the P&L account that they had blithely assumed they could hide away in appendix until everything settled down. After all, the auditors had always signed it off before, hadn't they?
Fun times.
___________________
Statto was declared insolvent on February 4 at a Manchester court.
http://www.timesonline.co.uk/tol/news/uk/article3365685.ece
Hubris? A bad run? Denial?
++++++++++++
The auditors are all marching to the same drumbeat -- that beat being "remember Arthur Andersen". AIG had to write down $4bn. Bradford and Bingley has been hit for a much smaller amount, mainly because "optimistic" estimates of the value of certain illiquid synthetic financial products are being stomped on by the auditors; "and we don't care how important a client you are". If they are willing to do it to AIG, they can do it to anyone.
Look for several bank CEOs in the UK spitting feathers this month as they have to put huge losses onto the P&L account that they had blithely assumed they could hide away in appendix until everything settled down. After all, the auditors had always signed it off before, hadn't they?
Fun times.
___________________
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TV "Expert"
Date: 2008-02-14 04:15 pm (UTC)Keith S
Re: TV "Expert"
Date: 2008-02-14 07:13 pm (UTC)In general. Well, yes, McGrath (the English one) is certainly top notch, and the Channnel 4 racing crew on average are acceptable.
I know little about football, but I know enough to consider the experts hired alongside the regular commentator to be, as a rule, a waste of space.
Cricket, there's some decent ones on TMS, only fractionally outnumbered by the donks.
PJ
no subject
Date: 2008-02-14 07:30 pm (UTC)Is Victoria Coren any good? I know she won an EPT event but the snippets of play I've seen suggest she is horribly weak-tight in tourneys.
It's a long time since I've followed racing, or even owned a TV, but I always enjoyed Barry Dennis opposing some obvious favourite to McCirrick's obvious bafflement and being proved right week after week.
matt
Welcome Back, Anthony Barber
Date: 2008-02-14 08:26 pm (UTC)I like to categorise the possibilities according to two mathematical principles: "reverting to the mean" and "acting like a headless chicken."
I suppose that wild fluctuation, whether it be within general economic indicators or within accountancy, is undesirable. The iron death of the universe is also undesirable. I'm sure there's a tipping point here, but most businesses seem to get along fine with a certain amount of instability -- it just depends how much. And then, obviously, there's the question of whether the mean itself is stable; or whether we're headed for stagflation, or some other form of decline of the mean.
Headless chickendom, however, seems to me to be far less desirable, and currently a far more likely prospect. The early signs are the inability of national governments to let failed banks expire, the clamour (particularly in the US and in Europe) for the Feds to "push at a string," and this other quote from the Telegraph:
"Cash was the best performing asset in 2007 for the first time since 2001. In real, inflation-adjusted terms, the 1.8pc return from a cash deposit provided UK investors with a better return than shares, government securities, index-linked gilts and corporate bonds."
Well, yes. But probably worse than JayBee's gold. Perhaps not quite the return one might have got by bribing a member of the PRC to let you build an Olympic swimming pool. And, for all I know, not nearly as good a return as buying up radishes on the futures market and turning them into Moldavian vodka.
Pick a basket -- any basket... in short, I don't think any of these commentators have the faintest idea what they're talking about; particularly with regard to macro-economics. (Not that I do, either: obviously.)
I note another interesting quote inside the Telegraph business section: "At the heart of Bond's gloomy analysis is the breakneck depletion of the world's natural resources to satisfy the insatiable demands of China's and India's emerging middle classes."
As far as I can make out, this means, "Let Them Ride Bicycles!"
It is unclear to me that the Asian middle-classes are swallowing "natural resources" much as a shrew swallows river-life. Nor is it clear that we are now in a state of "breakneck depletion," as opposed to the rather more measured and responsible depletion over the last couple of centuries or so. I await the figures to prove me wrong. However, I think it's a bit rich to put the blame on slanty-eyed mercantilists, without at least considering the possible influence of Western consumers.
Lower down, I see that Reece comments on the MPC's essential problem: which is that their mandate only extends to targeting inflation, and not to fiscal policy per se. This is actually a valid (albeit trivial and obvious) point. It leads me to believe that macro-economists are far more reliable when talking about rules (even when "rules" are in fact "theories") than they are when they talk about generalities. When they do that, they make no more sense than I do, or indeed any other member of the public.
So why should we believe them?
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 09:00 am (UTC)The facts are the world has reached many bottlenecks.
Too many people chasing too little. Hence the record breaking price of oil, price of wheat, price of food in general, the price of everything because our way of life is dependent on oil and even the price of gold (which is just derivative and reflects a flight from cash, stock and bonds).
What PB must understand is that the credit crunch is the result of the money men getting desperate. They had rung the last bit of profit from all other financial instruments and over-stretched themselves by inventing new derivatives to play with such as mortgage bonds.
The past saw us print money, borrowing from our descendents and expecting them to dig stuff out of the ground, add value and grow the economy to account for all the new money.
That isn't going to happen anymore. I'm sorry to bang on about oil but it is the single most important bottleneck in the economic model. There just isn't (and never will be anymore) enough production to cover demand. To use less in automotive fuel, producers are turning to bio-fuels to bulk up the dino-fuels.
The result of which creates competition in the wheat markets for grain to make ethanol and also removes land from food production for both ethanol and oils for bio-diesel. Even the EUs wish to have a few percent of bio in all EU petrol and diesel will require us to dig up all EU set-aside land AND dig up land outside the EU. Now we are expecting to borrow from others, keep them in poverty as well as swindling our children.
This is the end of the Green Revolution and cheap food. Those elements in the CPI that concern the common man are rising far higher than the rigged CPI as a whole. The CPI is a barometer for wealthy middle-class people such as PB who can either eat out or throw another gaudy canvas on the wall.
Cheap food and energy is a thing of the past. I am inflation proofing my cash with gold. I sold the last of my shares over two years ago. Bonds are for losers, especially if they are denominated in dollars. There will be a move away from the dollar as a reserve currency.
Tomorrow sees the opening of the Iranian oil bourse, which will not be trading in dollars like the IPE or NYMEX. That is the beginning of the end of the US printing press, unless the Fed really wants hyperinflation.
We are in a new economic era. One not based on the notion of infinite economic growth. Egos maybe huge but the world is only so big.
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 12:57 pm (UTC)Yes, we have been "borrowing from the future". This is creating an unsustainable situation where producers are desperate for people to consume, and they are lent money so to do. But the banks will only be happy when 100% of income is allocated to their interst payments. Which, er, doesnn't leave any money for consumption. Solution? Borrow more!
This is unsustainable.
Where we diverge is how this unsustainability will be resolved. As I have said, I think it will be resolved by many years of sustained inflation that effectively wipe away these debts. This will result in a transfer of wealth from savers to debtors. Then we get back to nearer zero, and the cycle starts again.
But, as you say, there are other differences -- but these cycles are never precisely the same.
One of them is the burgeoning consumption in the middle classes of India. It's always fun to see the hand-wringing of the Friends of the Earth on this, who fail to realize that it doesn't really matter a toss how theoretically green we live our lives when 100m Indians are out there buying the new 1 lakh car (just over a thousand quid) that increases emissions by a factor of 100 more than any savings here will generate.
However, we are still some way from the "post-industrial, post-growth" saociety, or from total economic collapse. Indeed, I suspect that things in the environment will have to get much much worse (possibly ending humanity) before people get their acts together and start to produce a globally sustainable economic model.
PJ
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 01:47 pm (UTC)The difference between this cycle and the next is that it won't be as easy as this one, hence my crock of gold. The future will require a vast die-off because whatever there is left in the fully mined and soil depleted future won't be able to provide for 6.5 billion, let alone a future 9 billion.
Now we are entering the overpopulation argument where the knee jerk reaction is, "James, you are a racist." I'll save it for another day.
Yes, there will be a shift from the oil economy to the electric (hydrogen, nuclear, solar and wind) economy but nothing does everything like oil does.
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 05:38 pm (UTC)I tried wiping my arse with oil yesterday, but it didn't seem to be an improvement. Mind you, it made the rides on the fun-fair more exciting afterwards. Perhaps you have a point.
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 05:33 pm (UTC)I hate to agree with either Bush, let alone Dubya, but I'm afraid this carbon-emission trading stuff is insane. It isn't correlated to the environment. It's correlated to politics.
Never mind. We can sit on the glowing southern bank of the Thames, you (BA Pol Sci, Kent) and I (BA, Modern History, Oxford), and watch the world go to hell in a hand-basket; secure in the knowledge that the only information on the subject that we can access is, at best, third-hand, and that, in the unlikely event that anybody would actually show us numbers, as opposed to pretty computer-generated pictures with subtitled rhetoric, we're too old to understand the fucking numbers anyway.
Let's leave it to the next generation, shall we?
Re: Welcome Back, Anthony Barber
Date: 2008-02-16 05:20 pm (UTC)Actually, I think Birks would agree with that.
The preponderance of your other (extended) comments -- and I'll summarise them as "energy related," if that's not too crude a point -- bring up the one thing I completely forgot to mention, which is Damian Reece's ... well, I would say, iconic, but at least bleatingly representative ... suggestion that the stock market is still a good investment, because Technology Will Come To The Rescue.
Now, I had all sorts of good (and worse) arguments on this one, but it has to be said that it boils my mutton. In plain journalese terms (and I assume that these terms are those used when employing these nitwits), "What? Where? When? How? Why?"
It's akin to a belief that you have a magic bottle. Rub the magic bottle, and a genie appears.
That said, I strongly suspect that technology will indeed ride to the rescue, at least in the sphere of energy. (Otherwise we're all dead. Wouldn't that be fun; freezing to death in the middle of global warming.) But nobody quite knows how, and I fail to see how the free market is going to help. Leaving to one side the possibility that a psychotic genius in the physical/engineering sciences will make a breakthrough in, say, the materials and technologies required to build a fusion reactor, it has to be said that a starting salary of fifteen thou or so isn't going to attract too many straight-As in the sciences. Outside public schools, which is a bit weird, but somehow comforting.
Anyway, your other thoughts: nothing particularly wrong with bonds. Yes, you might have to diversify from dollar-denominated to Brazilian cruizero-denominated, adding in a few desperate BBB yen types for good measure, and possibly going for emerging economies like, say, East Timor. (Well, it can't really help but emerge, can it? I mean, it's got thirty years' worth of experience trying.) But, still, baskets (as opposed to basket cases) are good.
Gold is also overrated, even now. Gold is glamorous. People pay for the brand. Buy nickel, or titanium, or something. I forget what it is, but there's one commodity (other than oil, obviously) of which America doesn't produce more than it consumes ... Germanium, I seem to recall. You might want to look it up.
(Although you certainly wouldn't want to store it under the mattress.)
Damn. Forgot to go in to the "technology saviour versus ... what else?" argument. Well, now back to your regular sponsor.
Re: Welcome Back, Anthony Barber
Date: 2008-02-17 01:55 am (UTC)People seem to think that countries do not fail and are in some way permanent, despite the fact that one glance at Afghanistan shows that countries do fail, and a quick glance at 16th century Europe shows that just about the only country from then still extant is Portugal.
Following on from this is a belief that any currency that survives afew years in the developed world is somehow permanent. This line is even more nuts than the "states do not fail" belief. The euro is looking more and more like an unsustainable currency. Then again, if I'd been around 130 years ago, I would have been saying the same about the dollar.
The third belief is that "the free market works". What this belief means is that "social management and subsidies don't work", but what people think it means is that the free market ensures that everything turns out for the best. A quick look at the Las Vegas monorail should disabuse anyone of this almost religious faith. Sometimes a social management and a subsidy fails a bit less than the free market.
So, the belief that somehow the fre market will ride to the rescue in the face of a global economic system that depends on a large number of poor people is naive at best.
And it's the one lakh car, mate. You are confusing the pound/rupee exchange rate with the dollar/rupee exchange rate. That, or you don't know your lakh from your elbow. £1,300 is 1.01 lakh rupees. A two lakh car would be £2,600 - roughly the cost of a small house in Andhra Pradesh, I should think.
PJ
Re: Welcome Back, Anthony Barber
Date: 2008-02-17 02:31 am (UTC)Not that the difference between one or two lakhs is important, because you could have bought a palace (presumably in Brixton) for that, a couple of centuries ago.
You taunt a Historian at your peril. OK: Here we go.
Portugal, Spain, Sweden, Denmark (let's leave the Schleswig/Hostein question to one side, shall we, Mr Palmersone?), England(Wales subsumed)/Scotland/Ireland. arguably Poland and Hungary, and let's ignore Russia for the time being, shall we? Let alone Iceland, and let's leave Iceland well alone ... hmmm. What else? We could probably add Anatolia, which was effectively a country in and of itself at the time, and is now coterminous with Turkey. For fun, I might also add Andorra, Lichstensein, Luxembourg and Malta.
But I sense that this isn't your point. I'll scroll up.
Oh yes. One glance at Afghanistan (hello, straw man) does indeed indicate that it is possible for a country to fail. On the other hand, a few more glances, or even a coquettish wink, might suggest that there's a bit more to it than that.
Want to guess how many, out of the last ten rulers in Afghanistan, have been assassinated? It's a fun kind of party game. Bonus points go to anyone who can remember the names of the ones who were strung up by their heels, like Mussolini.
It was always a failed state. Looking at it from the perspective of a historian in the nineteenth century, it was ever, in fact, a state at all. The rest of the world has pretty much sped past it.
Oh well.
I don't disagree with you about the Euro, btw. I'm amazed it's lasted this long. (For entirely personal reasons, I'm more interested in the dollar/sterling conversion.) I presume there has to be money to be made here, and it's slightly complicated in that there's a Euro country that is actually in rude health and also owns the ECB bitch, but this clearly can't go on. My prediction: implosion. Within two or (at the extreme) three years.
One last thing. "So, somehow, the belief that the free market ..."
I'm hoping that you're not ascribing this to me, because it's the precise opposite of what I've been saying for the last six months or so. My point, if I have one, is that nobody in charge of important things, like moving billions around, has the faintest fucking clue what they're doing. Thus, "headless chickens."
Like your comment on the third belief. I've never seen the Las Vegas monorail, so I can only imagine. I have seen Las Vegas. I can imagine.
Are you still into Stalinism, or can I tempt you into the one true path of Trotskyism? I forget. We're so old, these days.
Re: Welcome Back, Anthony Barber
Date: 2008-02-17 10:06 am (UTC)With Kosovo "going indcependent", perhaps it's time for city-states to make a comeback. After all, the GDP of many of them is far larger than many nominally independent operations living from hand-to-mouth in the Balkans.
PJ
Re: Welcome Back, Anthony Barber
Date: 2008-02-18 12:33 am (UTC)Sweden? Well, apart from Skåne (and a few trivial adjustments to Norwegian territory than need not detain us here), all it did was lose an empire. In the Baltics, naturally. Sweden is still, recognisably (particularly if you've been there), Sweden.
Despite the fact that the Spanish like to refer to themselves as "Las Espanas --" I forget how many, but it must be over twenty by now -- it is still, quite definitively, Spain. One minor border adjustment since the sixteenth century, and even that was because the Bourbons come from Navarre.
One might, although I did not, make a decent case for Holland.
One thing you cannot do, however, is to assert that Portugal is a universal constant in all this. Not only did it leech away all its colonies (which may well be your basic argument against Spain, Sweden, and the like), but it is actually unique in that over fifty per cent of the population upped and left for Brazil in the nineteenth century. Even Spain and Lithuania didn't manage that.
Ah, yes. "Luxembourg, Lichtenstein, Andorra -- you are the weakest links. Goodbye!" It just might be that your own, personal, definition of what a country might be is circularly attached to whatever argument you were trying to make in the first place.
Which was something. But I forget what.
no subject
Date: 2012-11-11 04:20 pm (UTC)