I go abroad for a few months, and the whole world goes crazy. I'm a Maritimer, and we have a long, proud tradition of sending people away. Now I open my newspaper's website, and see people are arriving instead.
Weird. It doesn't appear to be an April Fools joke, as it was published a day late.
http://business.theglobeandmail.com/servlet/story/RTGAM.20090402.watlantic0402/BNStory/Business/home
Among the growth areas is....Finance. This just keeps getting weirder.
Friday, April 3, 2009
Friday, March 20, 2009
Who throws a shoe?
Ok, so this blog sucks (for those of you reading it on facebook, these posts are coming in from a blog). It clearly has little or nothing to do with France, and posts are sporadic. Maybe I'll make a general blog someday, and start over. Or maybe I'll just get lazy and quit. Not having internet in my residence in France has been a major impediment to blogging.
In other news, Wikipedia continues to be awesome. Have you ever noticed pairs of shoes hanging over power lines? Wikipedia has an article on it. It's mostly unsourced hearsay, but it's more than I've ever seen about the topic anywhere else.
Actually, I've never seen anything about the topic anywhere else.
I don't feel any better informed, but I now no longer feel alone in having noticed lonely pairs of shoes strung over power lines.
In other news, Wikipedia continues to be awesome. Have you ever noticed pairs of shoes hanging over power lines? Wikipedia has an article on it. It's mostly unsourced hearsay, but it's more than I've ever seen about the topic anywhere else.
Actually, I've never seen anything about the topic anywhere else.
I don't feel any better informed, but I now no longer feel alone in having noticed lonely pairs of shoes strung over power lines.
Iceland
This is from an article on Iceland's temporary insanity and subsequent bankruptcy:
"I spoke to another hedge fund in London so perplexed by the many bad LBOs Icelandic banks were financing that it hired private investigators to figure out what was going on in the Icelandic financial system.
The investigators produced a chart detailing a byzantine web of interlinked entities that boiled down to this: A handful of guys in Iceland, who had no experience of finance, were taking out tens of billions of dollars in short-term loans from abroad. They were then re-lending this money to themselves and their friends to buy assets—the banks, soccer teams, etc.
Since the entire world’s assets were rising—thanks in part to people like these Icelandic lunatics paying crazy prices for them—they appeared to be making money."
If you ever had a nagging feeling over the past few years that the world was insane....it was.
"I spoke to another hedge fund in London so perplexed by the many bad LBOs Icelandic banks were financing that it hired private investigators to figure out what was going on in the Icelandic financial system.
The investigators produced a chart detailing a byzantine web of interlinked entities that boiled down to this: A handful of guys in Iceland, who had no experience of finance, were taking out tens of billions of dollars in short-term loans from abroad. They were then re-lending this money to themselves and their friends to buy assets—the banks, soccer teams, etc.
Since the entire world’s assets were rising—thanks in part to people like these Icelandic lunatics paying crazy prices for them—they appeared to be making money."
If you ever had a nagging feeling over the past few years that the world was insane....it was.
Thursday, February 5, 2009
more about toxic assets
I just saw this article on the Globe and Mail's website:
http://business.theglobeandmail.com/servlet/story/RTGAM.20090204.wbanks_obama05/BNStory/crashandrecovery/home?cid=al_gam_mostview
It repeats most of the nonsense surrounding this issue. For instance, this is repeated without challenge:
"The ultimate goal is to get the major banks lending again, by relieving them of their bad assets and shoring up their balance sheets."
This article also talks about a "Bad Bank", where all of the bad assets can be placed, at considerable taxpayer expense (several trillion dollars). There has been a lot of talk of this recently. A bad bank has been part of other successful bank bailouts, but in those cases the other banks were nationalized. The shareholders lost everything. Not doing that will just give a lot of money to current bank shareholders, at taypayer expense.
Worst of all, it probably won't even solve the problem.
Here's a Paul Krugman post on why this is stupid:
http://krugman.blogs.nytimes.com/2009/01/18/more-on-the-bad-bank/
http://business.theglobeandmail.com/servlet/story/RTGAM.20090204.wbanks_obama05/BNStory/crashandrecovery/home?cid=al_gam_mostview
It repeats most of the nonsense surrounding this issue. For instance, this is repeated without challenge:
"The ultimate goal is to get the major banks lending again, by relieving them of their bad assets and shoring up their balance sheets."
This article also talks about a "Bad Bank", where all of the bad assets can be placed, at considerable taxpayer expense (several trillion dollars). There has been a lot of talk of this recently. A bad bank has been part of other successful bank bailouts, but in those cases the other banks were nationalized. The shareholders lost everything. Not doing that will just give a lot of money to current bank shareholders, at taypayer expense.
Worst of all, it probably won't even solve the problem.
Here's a Paul Krugman post on why this is stupid:
http://krugman.blogs.nytimes.com/2009/01/18/more-on-the-bad-bank/
Toxicity
If anyone's been following the news of our imploding economy, they've probably been hearing the term "toxic assets" quite a bit. I don't know where it came from, but my guess is some marketing genius. It's serving the interests of bankrupt bankers quite well.
The story goes something like this: "Bank's balance sheets are weakened by the toxic assets on their books. The government must help them deal with their toxic asset problem." I am referring to US, not Canadian banks here.
This makes it sound as though otherwise healthy banks are being taken down by a toxic, poisonous assets. If we could somehow get rid of those, everything would be fine!
It would actually be really easy for a bank to get rid of "toxic assets". Declare them to be worthless, and remove them from their balance books. But they would still be insolvent.
A "toxic asset" is something the bank paid a lot of money for, but was backed by bad mortgage loans, and has become worth significantly less than what they paid for.
So suppose a hypothetical bank had 2 million in obligations (debts), and 2.1 million in "assets". But 500000 of those assets are "toxic", which means, in other words, worthless. Or worth a lot less than what they're valued at, let's say, 100000. So now the bank has a 300000 shortfall.
The problem isn't that "toxic assets" are weighing down its balance sheet. The problem is that it's balance sheet sucks, and they have more debt than assets.
So the bank is worthless. Most of the large American banks are currently in this situation. Worthlessness. The sensible thing would be to nationalize the banks, and force them to identify and write down their bad assets*. It would cost money to recapitalize the banks, but eventually they could be resold. This is how Sweden solved its financial crisis in the early 1990's, they even made a profit. The details get more complicated, but most sane economists agree on this overall strategy.
Instead, the Obama administration is talking about giving the banks money to help them "get the toxic assets off their balance sheets". The only way this could "work", ie. save the banks from bankruptcy, would be to pay the banks much more money than the assets are worth.
Its the same lousy plan that the Bush administration originally settled on, but changed after it was massively criticized by just about everyone. After careful consideration, Obama seems to be moving to reinstate it, on a larger scale. And his treasury secretary has been very clear in saying that he wants to avoid nationalization, that banks will be better managed in private hands.
Let's laugh at that for a second.
Giving money to the banks without taking ownership is just a large gift to the current shareholders and bondholders. Its reverse Robin Hood, taking money from the poor and middle class and giving it to the rich.
And this is just part of it. The stimulus plan being proposed, is massive, but also far too small, according to most economists. If it fails, we will probably see a new depression, weakness in the global economy of a decade or so.
Truly, we are doomed.
*Another problem in this crisis is that its not clear where all of the assets worth less than their value are. Much recent innovation in the financial industry consisted in making bad assets very, very complicated so that it looked like their were worth something.
If anyone's interested in reading more, this link gives a good summary:
http://www.nakedcapitalism.com/2009/02/bad-bank-assets-proposal-worse-than-you.html
And Martin Wolf of the Financial Times has been good recently, here is a good column:
http://www.ft.com/cms/s/0/4a44f222-f221-11dd-9678-0000779fd2ac.html?nclick_check=1
And Paul Krugman's blog and articles in the New York Times are essential reading.
The story goes something like this: "Bank's balance sheets are weakened by the toxic assets on their books. The government must help them deal with their toxic asset problem." I am referring to US, not Canadian banks here.
This makes it sound as though otherwise healthy banks are being taken down by a toxic, poisonous assets. If we could somehow get rid of those, everything would be fine!
It would actually be really easy for a bank to get rid of "toxic assets". Declare them to be worthless, and remove them from their balance books. But they would still be insolvent.
A "toxic asset" is something the bank paid a lot of money for, but was backed by bad mortgage loans, and has become worth significantly less than what they paid for.
So suppose a hypothetical bank had 2 million in obligations (debts), and 2.1 million in "assets". But 500000 of those assets are "toxic", which means, in other words, worthless. Or worth a lot less than what they're valued at, let's say, 100000. So now the bank has a 300000 shortfall.
The problem isn't that "toxic assets" are weighing down its balance sheet. The problem is that it's balance sheet sucks, and they have more debt than assets.
So the bank is worthless. Most of the large American banks are currently in this situation. Worthlessness. The sensible thing would be to nationalize the banks, and force them to identify and write down their bad assets*. It would cost money to recapitalize the banks, but eventually they could be resold. This is how Sweden solved its financial crisis in the early 1990's, they even made a profit. The details get more complicated, but most sane economists agree on this overall strategy.
Instead, the Obama administration is talking about giving the banks money to help them "get the toxic assets off their balance sheets". The only way this could "work", ie. save the banks from bankruptcy, would be to pay the banks much more money than the assets are worth.
Its the same lousy plan that the Bush administration originally settled on, but changed after it was massively criticized by just about everyone. After careful consideration, Obama seems to be moving to reinstate it, on a larger scale. And his treasury secretary has been very clear in saying that he wants to avoid nationalization, that banks will be better managed in private hands.
Let's laugh at that for a second.
Giving money to the banks without taking ownership is just a large gift to the current shareholders and bondholders. Its reverse Robin Hood, taking money from the poor and middle class and giving it to the rich.
And this is just part of it. The stimulus plan being proposed, is massive, but also far too small, according to most economists. If it fails, we will probably see a new depression, weakness in the global economy of a decade or so.
Truly, we are doomed.
*Another problem in this crisis is that its not clear where all of the assets worth less than their value are. Much recent innovation in the financial industry consisted in making bad assets very, very complicated so that it looked like their were worth something.
If anyone's interested in reading more, this link gives a good summary:
http://www.nakedcapitalism.com/2009/02/bad-bank-assets-proposal-worse-than-you.html
And Martin Wolf of the Financial Times has been good recently, here is a good column:
http://www.ft.com/cms/s/0/4a44f222-f221-11dd-9678-0000779fd2ac.html?nclick_check=1
And Paul Krugman's blog and articles in the New York Times are essential reading.
Thursday, January 29, 2009
How to learn a language
A lot of people have trouble with languages, and think they're too difficult for them. They aren't easy to learn, but I think everyone has it within them to learn another language.
If you're able, going to a foreign country and immersing yourself in the language is the best method, I've come to learn. If you're really determined and able, go abroad.
But this isn't the only way to go about it, and for most people learning a language isn't that pressing a need. I thought I'd share what I've found out for those that want to learn without needing to travel.
Right now I'm learning Italian before I travel to Italy for vacation (its easier for me, as its very close to Spanish and French). I'm using a program called Pimsleur. I highly recommend this. I've done some research and it seems to be one of the better ones, and is also fairly easy to find on the internet.
It was originally a series of audio cassettes, but I just downloaded it (stole it) from the internet and put the MP3 files on my iPod. You're supposed to do one half hour lesson each day. You don't need to read anything while doing it, so you can do it while washing dishes or doing laundry, etc.
Words are explained to you, and you repeat after a native instructors voice. They make it easy to master the pronunciation. As you learn a few things, the instructor asks you how to say certain words and phrases. You are gradually given new vocabulary, and start having conversations with the native speakers on the recording. Because you have to say everything out loud first before it is corrected, you remember things very well. The program doesn't really allow you to forget anything, because you're constantly using the words, whereas you quickly forget things from a vocabulary list.
Their focus is on oral, not written, but oral is the most important part of a language, at least at first. You can pick up reading using another program once you know how to pronounce things, but otherwise it may just screw you up, because you can develop anglicized pronunciation.
We'll see how the results are when I get to Italy, but I think I'll be able to communicate fairly well. And the emphasis on pronunciation is very important. How you speak in a foreign language is crucial. Think of all the people you've met with lousy English accents, and how people react to that. I'd say the pimsleur course is useful even if someone wanted to improve pronunciation of a language they already know a bit of, such as French. You just have to make sure to repeat carefully, and always speak out loud.
The other excellent resource I have found is here. Someone has made available old courses used to train diplomats in the American foreign service. This also uses voice recordings of native speakers. The courses have a good reputation, and I believe they're quite effective, though I haven't used them yet myself (the italian audio recordings are missing). Best of all, they're free and easy to download available.
Anyway, both of these programs teach language in a structured way that encourages good pronunciation and rhythm. If you're interested in learning another language, or improving your French, they're an excellent starting point.
If you truly are interesting in learning a language, all you have to do is find 25-30 minutes each day. I think you'll be pleasantly surprised with the progress that you can make with these programs.
If you're able, going to a foreign country and immersing yourself in the language is the best method, I've come to learn. If you're really determined and able, go abroad.
But this isn't the only way to go about it, and for most people learning a language isn't that pressing a need. I thought I'd share what I've found out for those that want to learn without needing to travel.
Right now I'm learning Italian before I travel to Italy for vacation (its easier for me, as its very close to Spanish and French). I'm using a program called Pimsleur. I highly recommend this. I've done some research and it seems to be one of the better ones, and is also fairly easy to find on the internet.
It was originally a series of audio cassettes, but I just downloaded it (stole it) from the internet and put the MP3 files on my iPod. You're supposed to do one half hour lesson each day. You don't need to read anything while doing it, so you can do it while washing dishes or doing laundry, etc.
Words are explained to you, and you repeat after a native instructors voice. They make it easy to master the pronunciation. As you learn a few things, the instructor asks you how to say certain words and phrases. You are gradually given new vocabulary, and start having conversations with the native speakers on the recording. Because you have to say everything out loud first before it is corrected, you remember things very well. The program doesn't really allow you to forget anything, because you're constantly using the words, whereas you quickly forget things from a vocabulary list.
Their focus is on oral, not written, but oral is the most important part of a language, at least at first. You can pick up reading using another program once you know how to pronounce things, but otherwise it may just screw you up, because you can develop anglicized pronunciation.
We'll see how the results are when I get to Italy, but I think I'll be able to communicate fairly well. And the emphasis on pronunciation is very important. How you speak in a foreign language is crucial. Think of all the people you've met with lousy English accents, and how people react to that. I'd say the pimsleur course is useful even if someone wanted to improve pronunciation of a language they already know a bit of, such as French. You just have to make sure to repeat carefully, and always speak out loud.
The other excellent resource I have found is here. Someone has made available old courses used to train diplomats in the American foreign service. This also uses voice recordings of native speakers. The courses have a good reputation, and I believe they're quite effective, though I haven't used them yet myself (the italian audio recordings are missing). Best of all, they're free and easy to download available.
Anyway, both of these programs teach language in a structured way that encourages good pronunciation and rhythm. If you're interested in learning another language, or improving your French, they're an excellent starting point.
If you truly are interesting in learning a language, all you have to do is find 25-30 minutes each day. I think you'll be pleasantly surprised with the progress that you can make with these programs.
Manifestation
Today was a day of strikes and protests in France, even in my sleepy little town. People are annoyed about a variety of things: The crisis, job losses, government cuts to education and health care, money for banks and not for ordinary people, etc. Unions called for unity and a national day of rage.
Here I'd say 200 or 300 people showed up, including about 20 of my high school students. There probably would have been more, but today was unusually cold for the region, (-2?). The big protest here is that the surgical ward of the local hospital is being moved to a nearby town, for cost cutting. However, the surgical ward at the new hospital is already overcrowded. Though this was the main issue, people spoke of the others as well.
It ended with a march down the main street, and almost all of the local shops closed for two hours in sympathy. People carried signs and shouted slogans.
About 1000 people had turned up for a similar protest on Saturday. This is impressive because the town only has 8000 people. As far as I can remember, we don't do this sort of thing in Canada. It's particularly rare for our high school students to organize, march and strike (dude....we can strike?!) but commonplace here.
Here I'd say 200 or 300 people showed up, including about 20 of my high school students. There probably would have been more, but today was unusually cold for the region, (-2?). The big protest here is that the surgical ward of the local hospital is being moved to a nearby town, for cost cutting. However, the surgical ward at the new hospital is already overcrowded. Though this was the main issue, people spoke of the others as well.
It ended with a march down the main street, and almost all of the local shops closed for two hours in sympathy. People carried signs and shouted slogans.
About 1000 people had turned up for a similar protest on Saturday. This is impressive because the town only has 8000 people. As far as I can remember, we don't do this sort of thing in Canada. It's particularly rare for our high school students to organize, march and strike (dude....we can strike?!) but commonplace here.
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