In contrast to my item yesterday, which I consider 'reality' (in my own biased way), we have the following piece on a Sudbury alternative school No Teachers, no homework .
The article contains this gem: 'While some may question how the format works with reading and math, "the truth is, that's the easy stuff,'' Ekendiz said. "Our children will need skills like self-understanding, self-motivation and creative problem-solving.'''
Hands up those who think that the typical child from this school will find reading and math 'easy'.
Wednesday, December 08, 2010
Tuesday, December 07, 2010
Bears go mainstream
If you won't quite believe bloggers and even doubt financial world insiders, perhaps you'll listen to one of the voices of middle-class, middle-brow England: Max Hastings. Britain's most-read newspaper the Daily Mail today published a piece by Hastings titled "We're all doomed."
It's only half-joking, and reminds me of the British hedge fund manager who, in 2008, actually came home at the end of one week and bought a farmer neighbour's flock of sheep, to ensure that his family would have something to eat in the general system breakdown.
Be prepared for emergencies, even if you don't expect one.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
It's only half-joking, and reminds me of the British hedge fund manager who, in 2008, actually came home at the end of one week and bought a farmer neighbour's flock of sheep, to ensure that his family would have something to eat in the general system breakdown.
Be prepared for emergencies, even if you don't expect one.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Some people get it
I was referred to The Heresy of Higher Education by Sackerson.
It is an excellent piece, echoing my frequent diatribes that higher education generates far too many people who want to 'manage' without actually producing anything (or having any skills, for that matter).
It is an excellent piece, echoing my frequent diatribes that higher education generates far too many people who want to 'manage' without actually producing anything (or having any skills, for that matter).
Monday, December 06, 2010
Is quantitative easing the cause of the rally?
Tyler Durden at Zero Hedge thinks so, and offers the following graph to illustrate the correlation:
Correlation is not the same as causation: I'd be a little happier about this theory if the mechanism could be explained. How exactly did the Federal Reserve's purchase of government bonds force up stocks?
I suppose the effect was indirect, in that the stock market recovered confidence when it saw that interest rates would be kept low with this extra demand for government credit, so making debt-fuelled market speculation cheap and easy. Also the fear of a banking sector collapse eased as the policy of official support at all costs became clear.
I guess the new bubble is in government credit, and will continue to inflate until a weak seam in the fabric splits. Keynes said, "Markets can remain irrational longer than you can remain solvent"; similarly, governments can stay irrational longer than you can afford to short their darlings. I'd be in no hurry to bet on a market reversal, even though it "should" happen and the present state of affairs is not tenable indefinitely.
Which is why I grit my teeth and hold cash.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
The correction will be delayed until after the bonuses are calculated
Bob Clark over at FSU airs the bonus-conspiracy theory of stock market movements, and after the way 1999 ended I'm inclined to give it some credence:
... there are a lot of Christmas bonuses tied to fund performance at year end. If you are the Fat Boys, why not let the funds buy the price up into a strong, year ending close. Sell to them, then kick the stool out from under them early next year. They make easy victims.
On 3 December on CNBC, Gary Kominski said (video embedded here) that effectively, there were only 9 trading days left because there is very low volume in the last two weeks of the year - "the 17th is your last day to make a significant change to your portfolio." If Clark is right and the "Fat Boys" are setting us up for a fall, I'd expect them to sweep up the cards and stand up from the table a week before Christmas. Perhaps we should be watching the behaviour of "the usual suspects" in this period.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
... there are a lot of Christmas bonuses tied to fund performance at year end. If you are the Fat Boys, why not let the funds buy the price up into a strong, year ending close. Sell to them, then kick the stool out from under them early next year. They make easy victims.
On 3 December on CNBC, Gary Kominski said (video embedded here) that effectively, there were only 9 trading days left because there is very low volume in the last two weeks of the year - "the 17th is your last day to make a significant change to your portfolio." If Clark is right and the "Fat Boys" are setting us up for a fall, I'd expect them to sweep up the cards and stand up from the table a week before Christmas. Perhaps we should be watching the behaviour of "the usual suspects" in this period.
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Measuring GDP for real
Another thing to thank Wikileaks for:
GDP figures are “man-made” and therefore unreliable, Li said. When evaluating Liaoning’s economy, he focuses on three figures:
1) electricity consumption, which was up 10 percent in Liaoning last year;
2) volume of rail cargo, which is fairly accurate because fees are charged for each unit of weight; and
3) amount of loans disbursed, which also tends to be accurate given the interest fees charged.
By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth. All other figures, especially GDP statistics, are “for reference only,” he said smiling.
So, how would that set of measures work in our case?
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
GDP figures are “man-made” and therefore unreliable, Li said. When evaluating Liaoning’s economy, he focuses on three figures:
1) electricity consumption, which was up 10 percent in Liaoning last year;
2) volume of rail cargo, which is fairly accurate because fees are charged for each unit of weight; and
3) amount of loans disbursed, which also tends to be accurate given the interest fees charged.
By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth. All other figures, especially GDP statistics, are “for reference only,” he said smiling.
So, how would that set of measures work in our case?
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
Sunday, December 05, 2010
The uselessness of gold
An article by Elliot Turner last week ("Why I Sold My Gold") echoes what I've been saying for a while:
No one knows what will happen in the event of chaos, but to me the only real answer would be to buy a cave stocked with canned goods. Forget about gold, as that would do nothing in a state of anarchy. Gold ultimately relies on the same psychological comfort that fiat currencies do in universal acceptance, and therein lies the gold as currency paradox.
I'd suggest that gold is not a protection against disaster per se, but a speculation during moderate troubles, and a store of wealth for a future time after disaster, when recovery has happened. But as with the Staffordshire Hoard, that latter time may be a long, long while later and you may not be there to benefit.
So I propose a new currency valid in good and bad times:
"Ah," you may say, "but this currency is perishable." So was the scrip issued in Wörgl in 1932-33; in fact, a negative interest rate was built into the scheme to encourage circulation instead of hoarding during a deflation. It worked wonderfully - so well that it displeased the local socialist party and the central bank.
Which leads me to think that the true measure of a currency's virtue, as of a man's, is not its supporters but its enemies.
Footnote:
The Heinz will also be superior to the current pound (= 100 pence) in terms of giving change, as was the old British pound. The latter was worth 240 pence, each penny legally exchangeable (until the end of 1960) for 4 farthings, thus £1 = 960 farthings.
You can get two 400g cans of Heinz beans today for less than £1, and each tin contains over 400 beans. So the modern pound must buy you c. 960 individual baked beans. I therefore propose to call a single baked bean a "farting".
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
No one knows what will happen in the event of chaos, but to me the only real answer would be to buy a cave stocked with canned goods. Forget about gold, as that would do nothing in a state of anarchy. Gold ultimately relies on the same psychological comfort that fiat currencies do in universal acceptance, and therein lies the gold as currency paradox.
I'd suggest that gold is not a protection against disaster per se, but a speculation during moderate troubles, and a store of wealth for a future time after disaster, when recovery has happened. But as with the Staffordshire Hoard, that latter time may be a long, long while later and you may not be there to benefit.
So I propose a new currency valid in good and bad times:
"Ah," you may say, "but this currency is perishable." So was the scrip issued in Wörgl in 1932-33; in fact, a negative interest rate was built into the scheme to encourage circulation instead of hoarding during a deflation. It worked wonderfully - so well that it displeased the local socialist party and the central bank.
Which leads me to think that the true measure of a currency's virtue, as of a man's, is not its supporters but its enemies.
Footnote:
The Heinz will also be superior to the current pound (= 100 pence) in terms of giving change, as was the old British pound. The latter was worth 240 pence, each penny legally exchangeable (until the end of 1960) for 4 farthings, thus £1 = 960 farthings.
You can get two 400g cans of Heinz beans today for less than £1, and each tin contains over 400 beans. So the modern pound must buy you c. 960 individual baked beans. I therefore propose to call a single baked bean a "farting".
DISCLAIMER: Nothing here should be taken as personal advice, financial or otherwise. No liability is accepted for third-party content, whether incorporated in or linked to this blog.
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