Friday, September 30, 2011


"An EU Commission spokesman has stormed out of a Newsnight panel discussion on the Eurozone, after the Daily Telegraph columnist Peter Oborne repeatedly referred to him as an idiot."

How to Peel a Head of Garlic in Less Than 10 Seconds

via Boingboing

Tragedy of the commons

"All states may have been created equal, but they were equal no longer. The states that had enjoyed the biggest boom were now facing the biggest busts. “How does the United States emerge from the credit crisis?” Whitney asked herself. “I was convinced—because the credit crisis had been so different from region to region—that it would emerge with new regional strengths and weaknesses. Companies are more likely to flourish in the stronger states; the individuals will go to where the jobs are. Ultimately, the people will follow the companies.” The country, she thought, might organize itself increasingly into zones of financial security and zones of financial crisis. And the more clearly people understood which zones were which, the more friction there would be between the two. (“Indiana is going to be like, ‘N.F.W. I’m bailing out New Jersey.’ ”) As more and more people grasped which places had serious financial problems and which did not, the problems would only increase. “Those who have money and can move do so,” Whitney wrote in her report to her Wall Street clients, “those without money and who cannot move do not, and ultimately rely more on state and local assistance. It becomes effectively a ‘tragedy of the commons.’ ” 
The point of Meredith Whitney’s investigation, in her mind, was not to predict defaults in the municipal-bond market. It was to compare the states with one another so that they might be ranked. She wanted to get a sense of who in America was likely to play the role of the Greeks, and who the Germans. Of who was strong, and who weak. In the process she had, in effect, unearthed America’s scariest financial places.
“So what’s the scariest state?” I asked her. 
She had to think for only about two seconds. 
I notice on his shelf a copy of Fortune magazine, with Meredith Whitney on the cover. And as he talked about the bankrupting of Vallejo, I realized that I had heard this story before, or a private-sector version of it. The people who had power in the society, and were charged with saving it from itself, had instead bled the society to death. The problem with police officers and firefighters isn’t a public-sector problem; it isn’t a problem with government; it’s a problem with the entire society. It’s what happened on Wall Street in the run-up to the subprime crisis. It’s a problem of people taking what they can, just because they can, without regard to the larger social consequences. It’s not just a coincidence that the debts of cities and states spun out of control at the same time as the debts of individual Americans. Alone in a dark room with a pile of money, Americans knew exactly what they wanted to do, from the top of the society to the bottom. They’d been conditioned to grab as much as they could, without thinking about the long-term consequences. Afterward, the people on Wall Street would privately bemoan the low morals of the American people who walked away from their subprime loans, and the American people would express outrage at the Wall Street people who paid themselves a fortune to design the bad loans."
California and Bust - Vanity Fair

"The smart money says the U.S. economy will splinter, with some states thriving, some states not, and all eyes are on California as the nightmare scenario. After a hair-raising visit with former governor Arnold Schwarzenegger, who explains why the Golden State has cratered, Michael Lewis goes where the buck literally stops—the local level, where the likes of San Jose mayor Chuck Reed and Vallejo fire chief Paige Meyer are trying to avert even worse catastrophes and rethink what it means to be a society."

Michael Lewis does it again..

"Everywhere you turn you see Americans sacrifice their long-term interests for short-term rewards."

Hardknott Pass

"Hardknott Pass is a pass that carries a minor road between Eskdale and the Duddon Valley in the region of Cumbria, England, in the Lake District National Park. The road approaching the pass vies with Rosedale Chimney Bank in North Yorkshire for the title of steepest road in England with both achieving a gradient of 1 in 3 (about 33%).

The pass itself has a series of hairpin bends that can be unnerving for drivers of cars and minibuses (heavier vehicles are advised not to use the pass), especially as the tarmac has become quite smooth in places. Drivers are expected to give way to oncoming traffic that is ascending the pass, as advised by the Highway Code.

The pass can be closed for long periods in the winter months as ice makes the bends treacherous. As the pass leaves Eskdale it passes Hardknott Roman Fort at a height of around 200 metres (660 ft), and there are a few parking places for drivers who want to stop and look at the ancient site.

At the top of the pass the road goes between the fells of Hard Knott and Harter Fell; once again there are a few parking places which are usually used by fell walkers who wish to start their walk at a height of 400 metres (1,310 ft) or by tourists who want to admire the fine panorama, which on a clear day includes a view of the Isle of Man in the Irish Sea."
Something to do on the next trip home...

Dear Human..

via SMBC

Three Steps

"Financial markets are driving the world towards another Great Depression with incalculable political consequences. The authorities, particularly in Europe, have lost control of the situation. They need to regain control, and they need to do so now.

Three bold steps are needed. First, the governments of the eurozone must agree in principle on a new treaty creating a common treasury for the eurozone. In the meantime, the major banks must be put under the direction of the European Central Bank in exchange for a temporary guarantee and permanent recapitalization. Third, the ECB would enable countries such as Italy and Spain temporarily to refinance their debt at a very low cost.

These steps would calm the markets and give Europe time to develop a growth strategy without which the debt problem cannot be solved. Indeed, the importance of developing a growth strategy cannot be overstated, because the debt burden – the ratio of debt to annual GDP – rises and falls in part as a function of the rate of economic growth."

The Road from Depression - George Soros via PragCap

The Euro Crisis in pictures

"As the euro crisis wears on, photojournalists have been hard pressed to find new and interesting ways to portray the currency in distress." via Spiegel Online

Thursday, September 29, 2011


"American Juggalo, a new short film by Brooklyn-based director, Sean Dunne explores (without judgement or editorializing) the distinctive youth culture of the Juggalos, adoring fans of Christian horrorcore metal rappers, The Insane Clown Posse. It is funny, fascinating and disturbing in turns. Each year approximately 20,000 juggalos and jugglettes, meet up (usually in campgrounds far from civilization) for the four-day musical festival known as “The Gathering of the Juggalos.” Think of it as a white-trash version of Burning Man, but with a much lower collective IQ, no good-looking people, pregnant drunk chicks with cigarettes, and empty two-liter bottles of Faygo orange soda littering the landscape…" via Dangerous Minds

Wait... Christian horrorcore metal rap?? What?

Dogs that surf competitively

via The Week

Absolute Zero

"Zero interest rates are significant for several reasons. Zero is the floor below which rates normally don’t fall, although the 3-month Treasury bill rate recently was negative amidst investors’ mad rush for liquidity and the safe haven of government paper. More importantly, at zero interest rates, strange things happen in security, currency and commodity markets that don’t fit normal rules. This doesn’t mean that actions are illogical and don’t follow rational behavior, but rather that the rules of difference. Most observers don’t understand thoroughly the new norms, their causes and effects. Most significantly, central bankers and fiscal policy managers don’t seem to either, which makes forecasting the outcome of their actions and the unintended consequences extremely difficult. 

Despite their lack of effectiveness, QE1 and QE2 as well as earlier non-interest rate Fed policy actions were undertaken because conventional monetary policy, cutting the federal funds rate, was not doing the job. And for two distinct reasons. First, as usual, the Fed was pushing on the proverbial string. Pulling the string, raising rates, works because borrowers are priced out of the market by rising interest costs. But lowering rates, pushing on the string, may not be effective if creditworthy borrowers, as at present, don’t want to borrow and banks, due to fear and regulations, don’t want to lend. Second, the depth and breadth of the financial crisis, the collapse in housing, the ongoing sovereign debt crisis in Europe, Japan’s continuing two-decade-old deflationary depression, the impending hard landing in China, etc. make the monetary policy string much more limp than usual.

A key reason why monetary and fiscal policymakers are out of ammo is because of the questionable effects of earlier efforts. Quantitative easing by the Fed piled up $1.6 trillion in excess bank reserves that lie idle while pushing up grocery and gasoline prices for lower-tier consumers, the very people the Fed aimed to help."  

Source: via TBP

Long, but very worthwhile read.

Wednesday, September 28, 2011


Looking West, the two largest buildings are Roppongi Midtown on the right and Roppongi Hills to its left.

Tuesday, September 27, 2011

Get prepared

"This economic crisis is like a cancer, if you just wait and wait hoping it is going to go away, just like a cancer it is going to grow and it will be too late." - Alessio Rastani - interviewed by the BBC

Independent trader, can't find a CV, but speaks with great candor which is useful.

"The moral of the story is that it looks like talking gloom, doom and "market crash" on TV is the surest way to get the 4-minute fame and get quoted across mainstream media regardless of the person's credentials and/or if the statement even makes sense."

Goldman Sachs Rules The World? Have You Looked At Their Stock Price Lately?? - Zero Hedge

Monday, September 26, 2011

Sound advice

"If you're relying on the whims of politicians to rescue your investments you’re not investing, you’re gambling." 
Blood on the Street - The Psy-Fi Blog


GB team effort. Awesome.

Sunday, September 25, 2011

A Different Perspective

Meltdown - The first of a four-part investigation into a world of greed and recklessness that led to financial collapse by Al Jazeera.

Friday, September 23, 2011

Fuji in the clouds

Decent ride. 160km 2000m. Great weather, great company. Cooked.

Thursday, September 22, 2011


Orange Klein Quantum Race Colnago Technos Trek Madone Pinarello Prince BMC SLX01
The first sign of addiction is denial....

Wednesday, September 21, 2011


This is the technique - as demonstrated by a professional* - I have been trying to perfect this week.

*Please don't try this without a proper warm-up and stretching routine.

May the Force be with you

Sunday, September 18, 2011

Back in the saddle

Decent 85km loop in sunny weather... have taken the previous post's advice and taking a few days off from work and other distractions. Highlights so far are finishing a couple of books with more to go, swimming with Milly, watching Downton Abbey, the Tour of Britain and napping :)

Wednesday, September 14, 2011

Djokovic & Nadal Even Better Than You Think

"How on earth, you ask yourself, are Rafa Nadal and Novak Djokovic hitting the ball so hard and keeping it in the court? Part of the answer lies in the new generation of strings.

As this video above from The Atlantic shows, the co-poly strings in use today — which spread through the pro game only over the last year decade or so — generate more spin than ever.

They do so because they’re more slippery than prior string designs. Because the strings easily slide across one another, they can slip back and then snap back to position — all while they’re grabbing the ball — to create more spin.

But perhaps the most amazing thing was the sidespin these players put on many shots. The shots didn’t merely dive hard onto the court. They often curve sideways as they dive and then explode from the bounce with sideways motion."

Djokovic & Nadal Even Better Than You Think - Wired

Simply fascinating.

Stunt Poetry

Amazing. Watch Fullscreen.

Selection Bias

"During WWII, statistician Abraham Wald was asked to help the British decide where to add armor to their bombers. After analyzing the records, he recommended adding more armor to the places where there was no damage.

This seems backward at first, but Wald realized his data came from bombers that survived. That is, the British were only able to analyze the bombers that returned to England; those that were shot down over enemy territory were not part of their sample. These bombers’ wounds showed where they could afford to be hit. Said another way, the undamaged areas on the survivors showed where the lost planes must have been hit because the planes hit in those areas did not return from their missions."

Selection Bias and Bombers - The Endeavour

Tuesday, September 13, 2011

Time is running out

"WHEN Russia worries publicly about the financial stability of the European Union, as opposed to the other way around, you know the euro is in real trouble. There is a sense in Brussels that the defenders of the euro zone have run out of ammunition and out of ideas.

One reason is that the politicians cannot keep up with the markets. The euro zone has yet to implement the decisions of July’s summit, but the next shock wave has already struck. Another is that the performance of Greece under the EU-IMF programme has been so poor that every quarterly assessment to approve the next tranche of loans becomes a cliff-hanger.

So each episode of market panic is worse than the previous one, the weapons in hand look inadequate, contagion spreads, while governments and institutions lose their nerve.

It is not impossible that the euro zone will be able to muddle along a bit longer.

The situation is so dire that any bit of bad news would easily cause another collapse in the markets. So at the same time as Germany is talking of giving up on Greece, it is also talking about redesigning the euro zone. Done right, a new European architecture may ensure that such a crisis does not recur.

But as Barry Eichengreen points out, the problem is now, not tomorrow. It will take years to renegotiate and ratify new treaties, even assuming there is no blockage of the sort that beset the Constitutional Treaty. But the euro zone faces critical days and weeks."

Time is running out - Economist

Crisis of capitalism

"Just over 16 barrels of oil can be bought with an ounce of gold, compared to a 50-year range between 9 and 30 with an average of 15. Gold is not overvalued on this basis.

The weathervane of global growth, the Australian dollar, is as strong as that of the flight-to-safety represented by the Swiss franc, even after last week’s policy shift by the Swiss National Bank. One of these is irrational."

Financial bust bequeathes a crisis of capitalism - FT

Signal-to-Noise Ratio

Eyebrow advice

"Two Americans a bit down the bar from me drained their glasses and wanted a refill. I know this because one of them started banging his empty glass hard on his pub mat to get attention and the other raised his voice at the barman’s back and said “Hey c’mon, give us another beer!” 
In the name of the Queen, St. Michael and St. George: No. No. No. No. No. No. No.  
If simply waiting with an empty glass doesn’t generate a refill, here is what to do if you want to be Michael Caine cool (literally, Sir Michael shows this technique very subtly in the early part of the film Harry Brown from which the photo above comes). Pick up your empty glass, tilt it slightly and then turn it very slowly in your hand. Some people turn the glass itself, others hold it firmly and turn their hand at the wrist. The slower the turn the better. The message of your movement should be that you know how to drink beer and the barman knows how to serve it; you both exist in an atmosphere of professional trust. Everyone knows what they are doing, everyone is calm, everyone is an adult; no hysterics, panic, haste or words are needed. 
As you turn your empty glass, don’t stare at the barman but keep a rough sense where he is. When he looks over, briefly meet his eyes.

If you have a good set of eyebrows, a slight raise of the eyebrows will do it. You can widen your eyes a bit for good measure. These gestures should be subtle, like you would use if you were bidding for a portrait at Christie’s and a rival bidder was seated just behind you.

If your eyebrows aren’t easily noticeable from across a crowded room, it is acceptable to nod. Do it but once and slightly. I have never had this not work.

Master these skills and you will never be an ugly American." 
Advice for Ugly Americans on How to Get Your Pint Re-Filled, UK-style - The Reality-Based Community

Monday, September 12, 2011

PIIGS to the abbatoir

"I am not implying that the market is set to crash here, but the risks are extraordinary. Political indecision has the European banking system teetering on the edge. I would go so far as to say that the risks are so enormous here that the water is simply not worth even dipping a toe into. As investors we have to recognize that we’re in the business of taking calculated risks and not risking capital based on a roll of the dice by politicians who don’t understand the magnitude of the issues they’re dealing with…."

GREECE – THE FIRST OF THE DOMINOES? - Pragmatic Capitalism

Political indecision maybe, but from up here in the cheap seats I don't think there is an answer. Prepare for it to get quite ugly.

Friday, September 09, 2011

Time for a break?

"Just as small breaks improve concentration, long breaks replenish job performance. Vacation deprivation increases mistakes and resentment at co-workers, Businessweek reported in 2007. "The impact that taking a vacation has on one's mental health is profound," said Francine Lederer, a clinical psychologist in Los Angeles specializing told ABC News. "Most people have better life perspective and are more motivated to achieve their goals after a vacation, even if it is a 24-hour time-out."
 Why Summer Vacations (and the Internet) Make You More Productive - The Atlantic
So. This year I took a week off in February to ski, a week off in May to cycle in Taiwan (missing 3 days of work due to the Golden Week bank holidays) and a week off to move house in July (which didn't feel like a rest). I'm thinking it might be time for a bit of time out.

A History of Economic Booms and Busts


"After six years of doing nothing but measure, count, chart progress and mark improvements, I don’t know how to soften. I don’t know how to relax, I cannot “yield” (whatever that means), and I most certainly cannot refrain from trying to kick your ass at yoga. My instructor told me last week to close my eyes when I practice. This was after she caught me looking around, seeing the old guy next to me had his leg higher than mine, grunt (yes, I believe I actually grunted) and forcibly yank my toes up juuuust a smidge higher than his. And then I fell over. (But still, I believe I won that round.)

There are no grades, no promotions, no logs or tracking of progress – and gold stars are explicitly forbidden. It’s just me and my mat and a constant struggle to soften. Nobody cares if my leg is straight, nobody cares if I bent just a smidge lower today than yesterday, and nobody cares how my shoulder muscles look in Warrior 2. Just me. I’m the only one who cares. And because of this, I am constantly challenged in my practice, too often manhandling myself into a position, stepping outside of the moment to worry about my progress, and refusing to yield."

Yoga for the Type-A by Melissa Hartwig, who sometimes cheats at yoga

I want to do some yoga again...

Cautious or scared?

"Even taking into account the many financial pressures they face, households seem exceptionally cautious." - Ben Bernanke, 9/8/2011
Allow me to explain, Ben: 
1. 10% unemployment 
2. 20% underemployment 
3. Depreciating home values 
4. High credit card/student loan debt 
5. Stagnating retirement portfolios 
6. Tight lending atmosphere 
7. High energy, raw material and food costs 
8. Nothing worth buying once you have an iPhone 
9. Free everything thanks to cheap broadband 
10. Lack of confidence in President, Fed Reserve, Financial System, Congress, State & Local municipal governments, PTA 
How many of these items did the $600 billion you just spent on QE2 alleviate? How many did QE2 actually exacerbate? Go to Princeton this weekend and scratch your beard puzzling over that, let us know what you come up with."
QOTD: Bernanke on Consumers - The Reformed Broker

On exactly the same topic....

"It does not take a genius to understand why consumer spending is weak.
  1. Unemployment rate is 9% 
  2. Real wages are falling 
  3. Income advances go to the wealthy 
  4. Middle class is shrinking 
  5. Jobs hard to find 
  6. Approval ratings of Congress and Obama at record lows 
  7. Consumers have high debt ratios 
  8. Home prices are still falling 
  9. Homeowners are trapped in their homes, unable to refinance 
  10. Boomers need to save for retirement 

However, those simple facts are far too complicated for a PhD like Fed chairman Ben Bernanke to figure out. Note that Bernanke even cited some of the 10 factors I mentioned, yet he is still surprised. What a dunce. Is it any wonder his policies are so counterproductive when he cannot figure out simple things the average person can see clearly?"

Bernanke, a Complete Dunce, "Puzzled by Weak Consumer Spending - Mish


There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.
 - John Adams

Thursday, September 08, 2011

Honest Debate

"To the ordinary person in the street, the idea that we can rescue ourselves from a crisis caused by excessive borrowing by borrowing even more must seem mad. In this respect they are possessed of far more common sense than those who are currently advocating just such a course of action and purport to be our leaders.  
It is time for those who wish to lead us out of this crisis to tell people how bad the current situation really is and the painful remedies which will be needed to remedy it."  
Terry Smith - Straight Talking

Wednesday, September 07, 2011

JP Morgan explains the euro crisis with lego

This chart comes from a Michael Cembalest’s research note today.

  1. The toreador in a floppy hat, and the F1 driver with his helmet, represent Spain, Italy and the rest of the Euro Periphery. 
  2. The three men with helmets, shields, and medieval weaponry represent the CDU, CSU and FDP parties in Germany. 
  3. The blue-and-white sailor boy is Finland. Obvs. 
  4. The woman with an oversized carrot and her friend in overalls with a shovel represent theSocial Democrats and Greens. 
  5. Wotan represents the Bundesbank. 
  6. The piggy bank is the IMF. 
  7. The grey-haired Banque chap is the ECB. 
  8. The chap in the red bib is Poland. 
  9. The artists are France. 
  10. The angry chef, the sweeper with a broom, the airline pilot, and the rest of the motley crew at bottom left, represent EU taxpayers in Core countries. 
  11. The storm troopers are the EU Commission and Euro Group Finance Ministers, chaired by Jose Manuel Barroso and Jean- Claude Juncker. 
  12. The monocled banker and his assistant are EU bondholders and shareholders. 

 via Reuters - Felix Salmon

Tuesday, September 06, 2011

Decisive Moments

"While everybody's eating burgers today, or cleaning the mud out of their kitchen, or playing Resident Evil 5, Europe is on the brink of its own decisive moment. Nobody there can decide what to do about the debt-bomb and the fuse is sparking away. There are no solutions to the problem of the Euro Club, but the idea of no Euro Club is making a lot of Euro people kick and scream. Whatever happens there will affect us hugely, you may be sure." Perestroika - Clusterfuck Nation
How this man stays resolutely on message is fabulous.

Mark to make believe

"Josef Ackermann, CEO of Deutsche Bank admitted the obvious today with statements recognizing that many organizations will fail at mark-to-market pricing. To show you the Fantasyland world these bankers live in, Ackermann also believes European banks are now much better capitalized and less dependent on short-term financing.

"The chairman of Deutsche Bank, Josef Ackermann, today highlighted another obstacle to resolving the debt crisis that crosses the euro zone.  
"It is obvious that many organizations will not survive in the event of having to reassess their portfolios of sovereign debt at market prices," Ackerman said in his speech at a banking conference held in Frankfurt.  
These comments came after the controversy arose Christine Lagarde, managing director of IMF, which has called for an urgent recapitalization of European banking. According to the institution, the shortage could reach 200,000 million euros, resulting from exposure to sovereign debt.  
Ackerman believes that the turmoil facing the financial sector is reminiscent of the crisis suffered in 2008 after the collapse of Lehman Brothers, but also believes that European banks are now much better capitalized and less dependent on short-term financing term. However, the president of Germany's biggest bank predicted a long period of difficulties for entities to still "have not provided convincing answers to the crisis," while the prospects for revenue growth are "limited to some extent ". 

Somehow we are supposed to believe banks do not need to raise capital, even though banks cannot survive mark-to-market pricing, and even though a very biased head of the IMF states that European banks need to raise capital. Only in the fantasyland world where there are no sovereign debt defaults can banks remotely be considered adequately capitalized. The stress-free tests came to the same conclusion as Ackermann by the same ridiculous measure (assuming no losses on sovereign debt)."  via Mish


"Ten F26-A formal complaint notices in six months. Apparently after receiving three, you are meant to have some kind of formal meeting between the parties involved but this never happened. According to the rules, if there are five complaints, an external mediator has to be bought in. This didn't happen either and I was quite disappointed. I don't really have anything against Simon apart from the fact that he likes the band Nickelback and has no sense of humour; I just get bored. There have actually been twelve formal complaints by Simon against me but two of those were complaining that nothing had been done about the previous formal complaints so I didn't bother scanning those in."

Simply brilliant. via

Monday, September 05, 2011

The Common Sense of Europe

Pythagorean theorem: 24 words
 Lord’s prayer: 66 words
 Archimedes’ Principle: 67 words
 Ten Commandments: 179 words
 Gettysburg address: 286 words
 US Declaration of Independence: 1,300 words
 US Constitution with all 27 Amendments: 7,818 words
 EU regulations on the sale of cabbage: 26,911 words
via DP

Friday, September 02, 2011

Thursday, September 01, 2011