Yesterday the Independent Commission on Banking (Vickers Commission) published its long anticipated, yet low in surprises report on Banking Reform in the UK. See: Rather than rehash the analysis already performed, we only have two items to add at this stage: Get your calculators out, or at least keep the Quants busy, because unravelling and … Continue reading Get your calculators out
Ever since the Great Depression and JMK’s ‘The General Theory of Employment, Interest and Money (1936)', have we had more intense government interference and hence taxation in most advanced economies. Thank you JMK. But seriously, how much is too much? There must be value in controlling fiscal policy, monetary policy and (social) employment policy, but is … Continue reading I blame John Maynard Keynes (JMK)
...continuing our conversation in the Economics of Taxation series (part 2) A European Generation ‘E’ enquiry – (‘E’ for employment) Referring to our previous article entitled ‘The Economics of Taxation’, today we elaborate and flesh out the basic ideas around taxation. The basic idea is that any form of taxation becomes a drain on … Continue reading Crafting the Cynical Generation?
In our previous analysis piece on the Erosion of Confidence in the Capital Market, we discussed the downward trend in US T-Bill since 2006. In today’s brief analysis piece we have expanded the time horizon to the last 10 years from the beginning of 2001 to the end of the second quarter in 2011 (being … Continue reading US Treasuries – Expanding the confidence time horizon
How do we define the state of our nation at the moment? For a little while now we have been experiencing an 'unease' with the communication revolution and the disparate nature of communication tools at our disposal. On the surface it would appear that what is happening is that rather than bind together a society … Continue reading The Economics of Social breakdown
So it has finally happened. After threatening for months that a credit rating down grade was probable for the USA, Standard & Poor's finally took the 'big step' on Friday 5 August, after the major markets closed. So what next? In our article 'US Treasuries - Are the markets really that bothered?' published on 30 July 2011, … Continue reading US Treasuries – An FX or a market call?
There are in essence only two ways of taxing citizens: A Tax on Stock (Wealth) A Tax on Flows (Income or consumption) Within these two tax methodologies are hidden the minutiae of the tax regime system, but at a fundamental level, any tax raising authority has to look at these two options / methodologies available to … Continue reading Economics of Taxation
In the previous article we posted, mention was made of the (0.72)% [negative 0.72%] real return US Treasury investors can currently expect on 5 Year Treasury Bills. The Nominal (quoted) Yield Curves and Real (Inflation adjusted) Yield Curves for two specific points in time, namely Friday 29 July 2011 and 30 July 2006 are listed below. Yield … Continue reading The US Treasury Yield Curves #2 – Do you factor inflation into the deal?
As a general introduction today we will look at two US Treasury Yield curves. The first Yield curve in the Curve graphic 1 below is the 3 Month bills compared to the 10 Year bills over the last 5 years. Yield Curve 1 In this table it is clear that the current 10 Year … Continue reading The US Treasury Yield Curves – Are the markets really that bothered?
Never resist the temptation to start a discussion with a pun. In our previous article we highlighted the ‘battle royal’ on Capitol Hill to get a proposal agreed to address the possibility of a US Treasury default, whether actual or technical on or after 2 August 2011. So the Republicans could not muster together enough … Continue reading A Storm in a ‘Tea’ cup
It is a confidence thing. We are so very, very close to seeing and experiencing another colossal collapse in confidence in the world’s financial system. This time it is driven by the ‘US Debt Ceiling impasse’. A steady flight to gold has been taking place over the past few months and even though most informed … Continue reading Hold your nerve!
[Economics in a Nutshell] An Introduction There is a conundrum here somewhere! As a libertarian leaning Think Tank organization and publication, we instinctively know that more government interference in the economy and bigger government per se is not a good thing. And so is sovereign debt and the servicing of that debt. Both are … Continue reading The Elusive “G” Factor – Part 1
“Don’t waste a good crisis” – not entirely sure who first uttered these immortal words, although a Google search on initial analysis seems to attribute it (or some very similar words) to Rahm Emmanuel, the current Chief of Staff of the White House, part of the Barack Obama administration. The actual phrase might be attributed … Continue reading Collaborative nano and micro business ventures
Chance and spontaneity are two interesting phenomenon required for innovation and creativity. We were reminded of this in an interview recorded of a LinkedIn executive recently*. He stated that chance encounters are "where we make some of our most significant connections", be it your life partner, business associates, etc. and that speeding up those chance … Continue reading Random Collisions of Chance
Introduction Cost cutting has been a priority in the private sector, ever since the financial credit quake started in 2008, yet the words currently are ‘austerity measures’ and budget cuts in the public sector. Most of the cost cutting in organisations has been along the tactical and operational lines and we believe that in the … Continue reading Risk-Based Change Management
A few weeks ago we published what seems like our most popular blog article to date, namely Increased Friction Costs. As it has been our most read article, we thought we might continue to build on the theme of Economic Friction Cost. Williamson (1993) published some work on Transaction Cost Economics (TCE) in a book … Continue reading Continuing conversations in Friction Costs: Increased Friction Costs II
Risk has as one of its essential elements TRUST as a foundation. Trust on the other hand has many other factors that interplay and interact on it. Markets are created when there are needs that are not immediately met from you local environment and therefore scarcity exists. Market participants step in to fill this 'needs' … Continue reading Risk Management Ideas
Conspiracy theories! Today we express an opinion on the phenomenon of ‘governmental’ economic landscape shaping. Interference whether actively pursued or via involuntary actions promotes our heightened sense of concern by the effects that the aggregation of supply and therefore the encouragement, either directly or indirectly of oligopolistic and monopolistic market structures, is having on the … Continue reading An Aggregated Challenge
Today's post is a very short and concise post, yet these are some inspirational quotes and extracts from two chapter's of Charles Handy's 1997 book entitled: "The Hungry Spirit": A Life of our own Capitalism, efficiency and markets have their flaws, but also their uses. They are neither the complete answer to our dilemmas … Continue reading The Hungry Spirit
Risk versus Uncertainty. How did the language become so confused?