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The Market Burden

Today's post is actually only a short sound bite for further conversations to be developed in the future: The real burden of the open and free market is the fact that it does not always behave and act in the way the market participants anticipated. [In other words, the market might be open and free … Continue reading The Market Burden

The BIG Sovereign Debt Structure cliff – Part 1

…and a year and a bit later we are exactly at the same place as far as the US Debt cliff is concerned…now only US$16.7trn and counting the continuing cost and Debt mountain…

theMarketSoul ©1999 - 2021

In yesterday’s article, “Where will all the new money come from?” we concluded the brief analysis with the Sovereign Debt Maturity profiles (otherwise known as the Debt Structure) of both the USA and Italy, noting how similar the two profiles looked at first glance.

Digging a bit deeper today, we would like to compare those charts to cliff edges. We trust that the sentiment of the article is that we perceive Central Banks across the globe fretting about the ‘New Money’ we were referring to.  With general economic confidence waning and the outlook for a sustainable long-term solution to sovereign over (indulgence) spending fading, the landscape is looking very bleak at moment.

New money will have to be printed (Quantitative Easing or QE) if investors in the capital markets cannot be found to bear the burden of purchasing new Bond and Treasury issues.

Some headlines over the…

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A sigh of relief?

Considering the impact of time, leads and lags in our economic thoughts and knowledge…#Thoughts from 2011

theMarketSoul ©1999 - 2021

Some say that in life timing is everything…

And so too it is with economics.  We don’t yet have a fully developed and ‘mature’ [in terms of life-cycle] grasp of the impact of timing with leads and lags in the economy in general.

Yes, we have very sophisticated and advance models, analytics, knowledge management, quantitative theories, etc.; but we still do not fully comprehend the impact of time and timing in general on the factors of production influencing our ‘modern’ global economy.

In short, it looks like the potential calamitous US Debt Ceiling crisis has been averted (events during Monday 1 August still need to unfurl), meaning that the US nation can continue to settle its debt obligations for a little while longer, without President Obama having to resort to the 14th Amendment.

And this is where the timing conversation picks up its thread again.  The Debt…

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Faites Vos Jeux

Some #thoughts from the previous governor of the Bank of England…could he ever make his mind up?

@lemasabachthani

“I think there are four [solutions for the eurozone] . One is to continue with mass unemployment in the south, in order to depress wages and prices until they’ve become competitive again. The second is to say, ‘Well, we have to get rid of this imbalance in competitiveness, so we need inflation in Germany.’ That seems unattractive, certainly to the Germans. The third is to give up on this question of restoring competitiveness quickly and accept that this is an indefinite transfer union. That requires two things: one is for people in the north to give money to people in the south; the other is for people in the south to accept the conditions imposed on them, which will limit the size of the transfer. The fourth is to change the membership. Now, I don’t know what the right answer is, and it will depend on their political objectives, but economics tells you that…

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Europe’s Soft Bigotry of Low Economic Expectations

As a precursor to a series of articles we plan to publish over the next few weeks, taking a ‘Factors of Production’ analysis view of “Europe’s Economic Woes”, this article by Dan Mitchell is spot on in framing the European ‘low expectations’ culture….

International Liberty

The United States is suffering through the weakest economic expansion since the Great Depression, which is a damning indictment of Obamanomics.

But that doesn’t mean the United States has the world’s worst-performing economy. Japan’s statist economy has been mired in stagnation for more than 20 years, which is about what you might expect in a nation where the government is so omnipresent that it even regulates coffee enemas.

But if you really want to feel good about America’s economy (at least in relative terms), then a comparison to Europe is probably akin to snorting cocaine.

The welfare states on the other side of the Atlantic are in such poor shape that they celebrate even the tiniest glimmer of good news. Here are some blurbs from a story in the EU Observer.

The eurozone economy has moved out of recession, according to unexpectedly strong data published on Wednesday…

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The Value of the Synthesist (as opposed to the Analyst)

A walk back in time. #Thoughts from 2010. The #Value of #Synthesis versus #Analysis. #Tyranny and #Innovation

theMarketSoul ©1999 - 2021

We had some very rewarding conversations recently with business partners and peers regarding the Value of Synthesis versus Analysis.

Synthesis we believe to be a ‘higher level’ skill and experience set than traditional analysis.  Synthesis requires a natural ‘incubation period’.  Very few people are natural ‘synthesists’.  You grow and mature into a ‘natural Synthisist’.

Analysts can be taught.  In fact a very lucrative business education industrial complex has been built on the back of ‘creating a production line of analysts’.  We call them Business Schools churning out master’s level analysts with the three-letter MBA title behind their names.

Don’t get us wrong on this one.  We are not criticising MBAs or the Business Schools that produce them.  Far from it; because we believe that part of the ‘evolutionary process’ of ‘incubating a mature synthesist’ is having a deep and fundamental understanding of analysis and the factors that contribute to making…

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The Kuznets swing and the market for labour and skills

The changing way labour and skills markets operate and are being disrupted by on-line exchanges and cloud computing 'enablement' technologies

Pony ponderings…

Have you ever overheard a small debate between children related to #economics? Some at theMarketSoul (c)1999 -2013 find themselves in Spain this weekend, relaxing with family and the following conversation between young siblings are worth repeating. In some bizarre way, it relates to labour economics and the minimum wage: We had just observed a single horse … Continue reading Pony ponderings…

Dysfunctional, “Disinterested” and Disenfranchised

Let Collaboration trump the three Destructive "D" words in organisational life...

The Inverse Relationship

Cost control and the Inverse Relationship with the (Learning) Experience Curve

Employee Shareholders – will your employees want shares?

Linking to our discussion piece posted last week, namely “An Ownership Revolution is required”, Steve Bicknell highlights one route to employee ownership in this post. Our original article was posted here: http://wp.me/pQe31-yG

Steve J Bicknell Tel 01202 025252

Balance sheet business diagram

The Growth and Infrastructure Act 2013 comes into force on 1st September 2013 and Section 31 makes changes to the Employment Rights Act 1996 inserting section 205A Employee Shareholders.

205A Employee shareholders
(1) An individual who is or becomes an employee of a company is an “employee shareholder” if—
(a) the company and the individual agree that the individual is to be an employee shareholder,
(b) in consideration of that agreement, the company issues or allots to the individual fully paid up shares in the company, or procures the issue or allotment to the individual of fully paid up shares in its parent undertaking, which have a value, on the day of issue or allotment, of no less than £2,000,
(c) the company gives the individual a written statement of the particulars of the status of employee shareholder and of the rights which attach to the shares referred to in…

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Trust, Risk and stifled Innovation

Revisiting Trust, Risk and Innovation interactions. some of our thoughts from 2012…

theMarketSoul ©1999 - 2021

In the light of the recent Citigroup’s settlement of mis-sold Hedge Fund investments, we issue this brief opinion piece on the interactions of Risk, Trust and Innovation:

Citigroup

We don’t think it is so much about TRUST or trusting institutions anymore but has always been about Caveat Emptor (Buyer beware).

No investor can or should trust institutions without conducting their own due diligence and risk profile / risk appetite assessment first.  In the past investors could possibly rely on professional ‘trusted’ advisors to help then navigate the due diligence part, at least in theory.  Risk and risk appetite assessment was the more tricky part and not even the professionals had sophisticated enough tools to help their clients through this quagmire landscape.

We believe this is the unintended consequence of over regulation or an over regulated environment.  Relational trust has been eroded in favour of ‘legislative trust’ and therefore the impersonal…

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Where will all the new money come from?

THIS POST IS A YEAR IN THE MAKING. We discovered it unpublished in our web archive today and as the theme is still very relevant today, we decided to publish it: Today’s brief analysis of US Treasury Yield curves and the Debt profiles of both the USA and Italy highlights the enduring question in the … Continue reading Where will all the new money come from?

Panic in the Cars of Britain?

Thoughts from 2012 and under-investment in #infrastructure. How short-term #economic #thinking affects us all…

theMarketSoul ©1999 - 2021

With apologies to The Smiths; the original version of the song Panic’s lyrics reads something like this:

“Panic on the streets of London / Panic on the streets of Birmingham / I wonder to myself / Could life ever be sane again?”

Or is this the beginning of what we will call ‘Austerity Anarchy’?

As a case study in behavioural economics goes, the last week in March 2012, in the UK must go down as a classic…

What sparked the ‘run on petrol and filling stations’ is not the aim of our analysis, but rather the deeper underlying cultural psychosis affecting Austerity Britain.  However, the austerity is not driven by the current revenue expenditure austerity, but rather the culture of Investment Austerity over many decades that has created a supply chain time bomb in the UK.

There is generally a severe lack of investment in any…

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The Future is Collaboration

Understanding the collaborative mind-set of the future

An Ownership Revolution is required

We have been following the G20 'get those naughty multinationals in the tax tent' debates raging for a few months now, with amusement we have to add; here at theMarketSoul and have the following short thought piece to contribute to the debate. We know the 'outrage' really is all about the what the OECD calls … Continue reading An Ownership Revolution is required

Behavioural Consequences – The UK Bond Market Rigging Scandal

Thoughts on over regulation and disincentives

The Morass of Mediocrity

Some thoughts we published in 2010 that still resonate today…rising above the Morass of Mediocrity.

theMarketSoul ©1999 - 2021

We link today’s article to one of our main themes on our home page, namely the ‘Battle against the Status Quo’, or as per the title of this posting, ‘The Morass of Mediocrity’.

 

The underlying intent and theme is that of competition and competitive behaviours and the difference between rules based and principles based standards.

 

It is our opinion that a rules based culture encourages more insular and introspective behaviours, where the rush is for the middle ground of mediocrity, rather than as the opposite principles based culture would be the encouragement for the search for innovation and competitiveness at the margins and extremes of the ‘functional envelope’.  By this we mean the parameters and frameworks set-out in the principles based environment, to ensure that a well-defined playing field (not necessarily level), is established and market participants understand their boundaries and culture norms they have…

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