Sunday, October 25, 2009

Thy neck is as a tower of ivory

If only we could write the right rules, everybody would play fair?

In what may be an impish spirit of fun, economist Don Boudreaux argues the case for insider trading (and quotes Henry Manne, a law colleague at his university, on the subject). The article is published by "Chinese" Rupert Murdoch's WSJ (motto: "Making the world safe for men on yachts").

But what if you see your objective as, not fair play, but winning?

Alas, sporting teams are not composed of referees.

(Picture: An ivory tower, as symbol of Mary, in a "Hunt of the Unicorn Annunciation" (ca. 1500) from a Netherlands book of hours.)

Saturday, October 24, 2009

Plantation

The Daily Mail and the Express splutter at some of the nuggets in the following article, which I reproduce in its insouciant entirety from the Evening Standard (if the latter insists, I'll delete it, of course, but to them I'd say, I am increasing your readership at no cost to you or financial benefit to myself).

What comes across to me, is how decisions with far-reaching consequences are taken, not for the country's general benefit or to help the suffering, sliding working class, but merely to spite the political opposition, or for a temporary tactical gain.

I am reminded of Henry VIII's "plantations" in Ireland - and after 400 years, they still haven't quite rubbed all the corners off each other.

Then there's Fiji, where indentured Indian labourers were imported for a minimum initial 10-year term, during which time (inevitably, and I assume, entirely foreseeably) they would marry, have children, become rooted. Would it have entered the calculations of the landowners, that such importation would also make it harder for Fiji eventually to throw off colonial rule and assume full independence? Who cared that tensions would build up, leading to coups in 1987 and 2000?

But then, the powerful elite have always treated us like the beasts of the field. Remember the Highland clearances, also. "Who cares for the future, as long as I can make a few quid and booze it up with willing lovelies?"

As a Spanish Classical scholar observes:

It seems that there existed in Greece an expression or proverbial saying which is preserved in verse in a fragment of a tragedy whose author has not been identified (Tragicorum Fragmenta Adespota, 513 Nauck):

ἐμοῦ θανόντος γαῖα μιχθήτω πυρί·
οὐδὲν μέλει μοι· τἀμὰ γὰρ καλῶς ἔχει.

When I die, let earth and fire mix:
It matters not to me, for my affairs will be unaffected.
___________________________________________________
Don't listen to the whingers - London needs immigrantsAndrew Neather

23.10.09

Amid the sound and fury over Nick Griffin, there's a sad but unnoticed fact: it has taken this fiasco to make politicians talk about the impact of immigration.

Yesterday MPs Frank Field and Nicholas Soames called for a 75 per cent cut in immigration and accused the Government of "clamping down" on any debate.

What's missing is not only a sense of the benefits of immigration but also of where it came from.
It didn't just happen: the deliberate policy of ministers from late 2000 until at least February last year, when the Government introduced a points-based system, was to open up the UK to mass migration.

Even now, most graduates with good English and a salary of £40,000 or the local equivalent abroad are more or less guaranteed enough points to settle here.

The results in London, and especially for middle-class Londoners, have been highly positive. It's not simply a question of foreign nannies, cleaners and gardeners - although frankly it's hard to see how the capital could function without them.

Their place certainly wouldn't be taken by unemployed BNP voters from Barking or Burnley - fascist au pair, anyone? Immigrants are everywhere and in all sorts of jobs, many of them skilled.

My family's east European former nannies, for example, are model migrants, going on to be a social worker and an accountant. They have integrated into London society.

But this wave of immigration has enriched us much more than that. A large part of London's attraction is its cosmopolitan nature.

It is so much more international now than, say, 15 years ago, and so much more heterogeneous than most of the provinces, that it's pretty much unimaginable for us to go back either to the past or the sticks.

Field and Soames complain about schools where English is not the first language for many pupils.
But in my children's south London primary school, the international influence is primarily the large numbers of (mostly middle-class) bilingual children, usually with one parent married to a Brit.

My children have half- or wholly Spanish, Italian, Swiss, Austrian, Croatian, Bulgarian, Congolese, Chinese and Turkish classmates.

London's role as a magnet for immigration busted wide open the stale 1990s clichés about multiculturalism: it's a question of genuine diversity now, not just tacking a few Afro-Caribbean and Bengali events on to a white British mainstream. It's one of the reasons Paris now tends to look parochial to us.

So why is it that ministers have been so very bad at communicating this? I wonder because I wrote the landmark speech given by then immigration minister Barbara Roche in September 2000, calling for a loosening of controls. It marked a major shift from the policy of previous governments: from 1971 onwards, only foreigners joining relatives already in the UK had been permitted to settle here.

That speech was based largely on a report by the Performance and Innovation Unit, Tony Blair's Cabinet Office think-tank.

The PIU's reports were legendarily tedious within Whitehall but their big immigration report was surrounded by an unusual air of both anticipation and secrecy.

Drafts were handed out in summer 2000 only with extreme reluctance: there was a paranoia about it reaching the media.

Eventually published in January 2001, the innocuously labelled "RDS Occasional Paper no. 67", "Migration: an economic and social analysis" focused heavily on the labour market case.

But the earlier drafts I saw also included a driving political purpose: that mass immigration was the way that the Government was going to make the UK truly multicultural.

I remember coming away from some discussions with the clear sense that the policy was intended - even if this wasn't its main purpose - to rub the Right's nose in diversity and render their arguments out of date. That seemed to me to be a manoeuvre too far.

Ministers were very nervous about the whole thing. For despite Roche's keenness to make her big speech and to be upfront, there was a reluctance elsewhere in government to discuss what increased immigration would mean, above all for Labour's core white working-class vote.

This shone through even in the published report: the "social outcomes" it talks about are solely those for immigrants.

And this first-term immigration policy got no mention among the platitudes on the subject in Labour's 1997 manifesto, headed Faster, Firmer, Fairer.

The results were dramatic. In 1995, 55,000 foreigners were granted the right to settle in the UK. By 2005 that had risen to 179,000; last year, with immigration falling thanks to the recession, it was 148,000.

In addition, hundreds of thousands of migrants have come from the new EU member states since 2004, most requiring neither visas nor permission to work or settle. The UK welcomed an estimated net 1.5 million immigrants in the decade to 2008.

Part by accident, part by design, the Government had created its longed-for immigration boom.
But ministers wouldn't talk about it. In part they probably realised the conservatism of their core voters: while ministers might have been passionately in favour of a more diverse society, it wasn't necessarily a debate they wanted to have in working men's clubs in Sheffield or Sunderland.

In part, too, it would have been just too metropolitan an argument to make in such places: London was the real model. Roche was unusual in that she was a London MP, herself of east European Jewish stock.

But Labour ministers elsewhere tend studiously to avoid ever mentioning London. Meanwhile, the capital's capacity to absorb new immigrants depends in large part on its economic vitality and variety. There's not a lot of that in, say, south Yorkshire. And so ministers lost their nerve.

I hope it's not too late now, post-Question Time, for London to make the case for migration.

Of course we're too small a country to afford an open door - but, by the same token, if the immigrants dry up, this city and this country will become a much poorer and less interesting place. Why is it so hard for Gordon Brown to say that?

Send the office cleaners into the City

Cleaning up the trading rooms physically could be the way to amend the traders' behaviour (htp: Overcoming Bias)

People are unconsciously fairer and more generous when they are in clean-smelling environments, according to a soon-to-be published study...

... The first experiment evaluated fairness. As a test of whether clean scents would enhance reciprocity, participants played a classic "trust game." Subjects received $12 of real money (allegedly sent by an anonymous partner in another room). They had to decide how much of it to either keep or return to their partners who had trusted them to divide it fairly. Subjects in clean-scented rooms were less likely to exploit the trust of their partners, returning a significantly higher share of the money...

Friday, October 23, 2009

Are the markets being manipulated?

I'm partway through a 1990s American TV programme (htp: Jesse) about the lead-up to, and aftermath of the Great Crash of 1929. At that time, share price manipulation was legal, everyone knew it went on and even the losers came back for more, hoping they would get out in time the next time round. And in the 1920s, buying on margin became possible, so that provided a fatal extra impetus.

You know all this, of course.

My question (and pardon my ignorance) is about the interaction of derivatives and stock trading today. A takes a huge bet with B that the share price of Widgetco will go down - what stops B from borrowing more cash, purchasing Widgetco in time to boost the price before the date of the bet, collects the cash from A and then sells his firm's holding in Widgetco? Even if now illegal (and I'm not sure of that), are there not ways and means?

And are there other tricks to catch the operator who goes long on a share, instead?

Monday, October 19, 2009

Lessons from history

The Debt Offensive began in 2007: Charlie hit us with everything he had. Cadres of underpriced risk were tunnelling under our lines, popping up when least expected and decimating our defences. We fought back hard, dropping cash from the Hueys, first $700 billion, then trillions, but it was no use. Sure, we beat him back for a while, took down a few banks; but the public couldn't take seeing it all on TV. It was the turning point. We had lost the will to win.

Bozos in Parade

Two related items in today's Parade Sunday magazine caught my eye.

1. In reference to an intensive 2.5-year program in Computer Science at Neumont University, a Professor of Higher Education at Boston College is quoted as saying "I'm sure that they turn out really great technicians, but how are these students going to fit into the real world?"

Given that the real world is populated by a large percentage of what appear to be idiots, she's probably correct. However, many of the future teachers that I have taught do not appear to know anything about English, Mathematics, History, Geography, or even a foreign language. For them, higher education appears only to be a way to a job.

2. A piece taken from a new book, begins "Humans are good at many things - typing, inventing stuff - but we're quite bad at assessing risk".

To begin, I wouldn't class being a competent typist with being an inventor, any more than I would compare driving skill with a concert performance.

At most 5% of the population in the industrial world actually 'invents things', or advances human knowledge. Most of the rest just use it. Has it occurred to these authors that the same idiots who use all of that technology without understanding might just be the ones who panic unjustifiably?

Sunday, October 18, 2009

Wine pressings

The crush of the present distils wisdom:

In general, my own prescription is all that I will share. I am 58 years old, and have amassed a fair amount of savings over the past twenty years. My general rules for the current period now are:

1. Get liquid. Have little or no debt. Be in cash and diversified. Reduce your expenses.
2. Get as far away as you can from Wall Street and dollar based assets as is practical.
3. Put something you can spare from savings into long term assets that are not directly contingent on anyone else whom you cannot trust:

a. Personal food production, preservation, and preparation
b. Precious metals as insurance against monetary inflation / breakdown
c. Essentials for daily living and personal health care
d. Investments in practical education
e. Personal infrastructure and efficiency

f. Have a contingency plan for a systemic shock.

If you wish raise your voice or to peacefully demonstrate, be prepared with a simple set of coherent positions and specific demands, avoiding anger. The mainstream media likes nothing better than to portrary demonstrators as cranks or fools. In general they are not sympathetic to the less powerful. They will not lead change, but they will eventually follow.