Friday, September 30, 2011

Economic crisis: the insanity of financial reporting and opinions

If people are getting fed up with the financial reporting and opinions,
their stomachs churning as a result of this perpetual crisis, sensationalism
and getting indeed deeper into problems then it is a logical reaction. As
a result, a storm is brewing over both investment bankers and financial

One bothering aspect are the opinions, substituting proper reporting.
Rare and few are proper reports, real news. It is relentless barrage
of news trash and opinions which is followed by ideological debates and
politically biased dog fights. All in all the perfect recipe for people to get
really in economic and financial problems, to end up as fool.

What is already getting clear as the stock markets dive, remain low,
investment advisors are becoming obsolete because of the bad
experience people are making, seeing their investments lose value.
Banks are already starting to lay off investment and other stuff.

And it won't be long before the media have to lay off stuff, inlcuding
those of the financial sections. Because, as it turns out, the consumption
of news and opinions just cost time and money.

The Guardian ran an article some time ago in which newspapers from
2009 were compared to those of 1984, 25 years ago. The article
was pretty straight forward from the beginning:

How did readers know what to think in 1984? Once you get over the
minuscule, blurred pictures and the lack of colour, the first thing that strikes
you about the newspapers of that year is the paucity of opinionated columnists.
The finger-jabbing, red-faced anger of today's commentariat, the passionate,
omniscient certainty with which they declare opinions, scarcely existed 25
years ago. Incredibly, the Sunday Times – under that most opinionated of
editors, Andrew Neil – did not then have a single serious regular weekly
The article, So much news, but so little comment, does not deal with financial
and economic reporting and opinonizing. But the same could be written about
the financial "journalism".

Life is likely to continue to be full of surprises and experiences. What is
supposed to be final word and wisdom at a given moment is usually
rendered obsolete, if not turning as outright nonsense, soon after. Either
by what is going on in the financial markets or elsewhere.

The failure of the media in financial and economic matters is to some extent
well known. The failure of the financial  media is actually well known.
It should also not to be forgotten that the media, pundits and journalists,
never pay any damage for wrong and stupid investment advice for instance.
The could practically never be hold responsible for instance for their
often very patronizing advice which by coincidence turns out to be
disastrous time and again.

The media crisis is likely to take accelarate for many reasons.  Newspapers
and their self made decline is also known to be of interest for (that's just an
example) short sellers.
This is pointed out here just to have a really different perspective of that

Sunday, September 25, 2011

The financial history of Western Europe & Euro crisis

Without exaggeration there are few crime novels which can keep up, keep the
reader glued to pages than the financial history of Western Europe. A history
that has time and again been swept under the carpet, been forgotten in truly
Orwellian manner. And that is just one of the surprises when reading this book.

First published in the 80s, this books keeps what others promise.
Charles Kindleberger, the author, first provides a nice insight into how money and
banking evolved in this part of Europe from about 1400 onwards, including how
governement financing developed, listing such things as
Financial Revolution, The Power to Tax in England, Tax Farming,
Taxation, Borrowing, Selling Assets, ...Following this is then a chapter how
these government powers turned into a problem, causing poverty, economic
problems and financial crisis. Souvereigns, monarchs, were in financial trouble time
and again, occasionally defaulting on their debt.

One also gets a clear idea how things worked out eventually. For instance the
Spanish quest for gold and silver in the newly discovered Americas. A rather
bloody bit of history for one. And were for good reasons doomed to failure.
Kindleberger: The Spanish were at war during most of the sixteenth  and first 
half of the seventeenth century until ... the end of the Thirty Year War in 1648. 
... They encouraged in warlike pursuits, and discouraged in the more humdrum 
pursuits of agricluture, commerce and industry by the rich treasure uncovered 
in the New World. The treasure was spent as fast, and frequently even faster, than 
it was acquired. ... Spain was forced at the end of the sixteenth century to debase
its money with copper bought in Europe.

Great is also the insight into war finance and the consequences: In the Middle Ages
bankers were brought to ruin less by collapsing commodity and security markets,
as in modern times, than by failure of kings to meet debts incurred to raise
mercenary armies and to subsidize allies.
Needless to say that Kindleberger tells of currency debasement, a fraud commited
by monarchs numerous times. Ot that 24 bankers were sent to the guillotine in the
French revolution as a consequence of their failure

The generous insight possible in this case on Google books can really be appreciated.
The reader, visitor, gets to know what the book is really about, what it is dealing with,
better then any review could provide.
It should be mentioned that the book is sold way cheaper on (UK) for
a price around £ 21 than on (US) where it is really expensive.

Another reason why this book deserves praise is the calm manner in which it is
written. Kindelberger does not incite to incite to wailing, ranting, outrage, one
serious problem of our present times. The reader thus does not lose brain and
understanding of what happened, but can follow up for instance how kings,
governements, turned to all kinds of taxation when in problem, apart from
usually resorting to fraudulent measures and deceit. The book is great by
giving a proper insight and thus is of use for anyone who does not want any
such disasters. There is really nothing that would recommend big time

Monday, September 12, 2011

Getting a job or starting a business in the financial crisis

Starting all over again with a new job or business is in some ways similar to the situation after WW II, when people all over Europe found themselves entirely impoverished, everything was in ruins and just everything seemed hopeless.The only apparent relief then was that the war was over, the dangers and the dying of the war was over. That basic security and liberty was not just a relief, it was essential for the new beginning. Drastic and hopeless as the current situation may seem at least there is peace, the world is not in such ruins as it was back in 1945 and when comparing the economic situation back then the present economic situation is, desperate as it might be perceived, still way better now, fortunately so.

The economic crisis sometimes entails considerable changes in the lifestyle, job prospects and may even include relocation. It is for instance quite amazing to learn that younger, well educated Greeks flee the cities, return to their ancestral homes and begin entirely new.
Once people have made the transition, relocated and begun with something complety new, something they wouldn't even have thought of some time ago, like bee keeping,  they find that their new situation and occupations are actually great and are quite happy with their new circumstances.. An article in tells of some interesting cases.

Meanwhile those who have made such decisions are unlikelz to regret them when one considers
how things are going in Greece. That's a situation when a really existential existence, having
enough to eat and roof over the head, instead of being subjected to the expenses of city life
without a job, is likely to be appreciated.

It is any case quite amazing what kind of economic misery people survive. For instance refugees
after WW II, who were just left with very few possesions, only what they could carry. And who
had the face the drastic reality that food was really scarce at that time. The war had taken its toll
on every bit of the economies.
The pictures tell an economic story for themselves. The first one are russian refugees, the second
German refugees after the War.
The pictures might be helpfull by considering crisis scenarios, help avoid
useless expenses that are later regretted as well missing out on chances.