Just look at the Container Ship Time Charter Assessment Index. It's down from 1 022 points in February to 416 points. - Marcel Janus
If I may be honest, I'm sick of reading how bad economy is. Heck, what is the economy? Isn't it but the sum of single business and their relations? If a single business is in trouble, then likely because it isn't producing something useful, isn't able to sell it or doesn't have the funding and the stamina to survive the dip.
Maybe on the big scale it isn't that different. Maybe we weren't producing the things that we needed. Maybe we didn't build good, strong relationships. Maybe we, as a society, have become crybabies and simple lack the stamina to push through this. - Dushan Wegner
The guy at dinner that Robert mentions was Jordi Soler (@jordisoler). He's really remarkable. He's running a family-owned business that trucks containers around Europe, and is totally plugged into the web tech scene, reading all sorts of blogs, signed up to lots of services, etc. And a really nice guy. - Terry Jones
I'm the guy working at the docks. The Tweetup was excellent and I learned a lot about startups with you guys. As to the economic situation, yes, here in Barcelona times are pretty rough right now. I'm still holding up because I have a little family business, but right now big companies are suffering a lot and firing workers. Business is clearly slowing down and we can only hope that the situation recovers soon. - Jordi Soler
company I work for had a round of layoffs.. thankfully they can't trim the IT dept down any further since there's only 2 of us providing support for our global operations! - alphaxion
Ever ask someone you don't know really well - how's business? I stopped asking because the vast majority of the time all I've heard is "not bad" or "good". All around me I see signs that things aren't good. - Wayne Schulz
I would just like to see which senators and members of the House received how much money from SIG, and when they received it. And maybe what the SIG hopes to receive for the donation. Live. On the Internet. So I can see it anytime. - Paul Denlinger
How happy you are may depend on how happy your friends’ friends’ friends are, even if you don’t know them at all. “There’s kind of an emotional quiet riot that occurs and takes on a life of its own, that people themselves may be unaware of. Emotions have a collective existence — they are not just an individual phenomenon.” - Mitchell Tsai
So says a new study that followed a large group of people for 20 years — happiness is more contagious than previously thought. “Your happiness depends not just on your choices and actions, but also on the choices and actions of people you don’t even know who are one, two and three degrees removed from you,” said Dr. Nicholas A. Christakis, a physician and social scientist at Harvard Medical School and an author of the study, to be published Friday in BMJ, a British journal - Mitchell Tsai
A next-door neighbor’s joy increased one’s chance of being happy by 34 percent, but a neighbor down the block had no effect. A friend living half a mile away was good for a 42 percent bounce, but the effect was almost half that for a friend two miles away. A friend in a different community altogether can win an Oscar without making you feel better. “You have to see them and be in physical and temporal proximity,” Dr. Christakis said. - Mitchell Tsai
Still, they said, it is not clear if increased communication via e-mail messages and Webcams may eventually lessen the distance effect. In a separate study of 1,700 Facebook profiles, they found that people smiling in their photographs had more Facebook friends and that more of those friends were smiling. - Mitchell Tsai
sheesh, this happens all day every day .. walking down the street, in a taxi, my god, it is my main activity ... shooting out energy and blasts of smiles, dance moves, jokes, empathy ... all day, every day ... and it is a study!!??!! .. scientists are sooooooo weird - Gregory Lent
The flip side of course is that you can easily become allergic to your family and relatives. This usually starts with becoming allergic to your in-laws, which starts usually before marriage, then your children become allergic to you, and when they reach their teens, you become allergic to them. And so it goes. - Paul Denlinger
Map of closing/collapsing factories/companies in China. Click on province to see details. (In Chinese) Hosted by Netease. - Paul Denlinger
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China move from rule of man to rule of law? Bah humbug! What has Yu Keping been smoking; I want some! No, it's going to move to mob rule and mass chaos, with yet another wave moving to a not very welcoming west, where they will again become model immigrants. The most successful Chinese are.....Americans (yet again)! For those who say anything else, get off your drugs! - Paul Denlinger
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i don't think so .. there are some fundamental frequency changes that have happened that result in different types of dissention .. there may be big demonstrations .. but not mass chaos and mob rule, in my opinion .. reality is a bit different now - Gregory Lent
Susan: no, it is not. I met an Israeli startup CEO last night and he just laid off 20% of his workers. in China they are feeling the effects of the downturn too. It's just that in China the startup world is much younger and they haven't gotten big yet, so they haven't cut back yet. - Robert Scoble
The real problems in China will not happen in hi-tech, they are happening in low tech. But rest of society will feel it. - Paul Denlinger
people are simply readjusting their minds, that is a good thing i think - Gregory Lent
With all the money being pumped into the countryside, the government is implicityly admitting that its plan to complete urbanize China within 20 years is a failure and can no longer happen because of a change in internal conditions. Wonder if this means that urban unemployed will want to become instant farmers and gain benefits? - Paul Denlinger
Well, that's as rudimentary as it gets and sounds much easier than it is in practice. I don't claim to be able to time the market better than the next guy. I'm net long of course, especially after a 40-50% market decline and with a long time horizon. However, in my estimation, until housing rebounds, which may be years from now, I don't envision a strong, sustained rally or a return to prior highs. - Mitchell Tsai
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While somewhat rudimentary, I ran a some calculations for how the market has behaved since September when things really got ugly. In effect, each time the market has seen a 5% runup from the day's close back to the prior close (1 day return), there has been a subsequent significant drop before the same process repeated itself. - Mitchell Tsai
Following the 14.5% runup on 10/13, the market dropped 7.8% before the next big pop. - Mitchell Tsai
Following the 6% runup on 10/20, the market dropped 15.9% before the next big pop. - Mitchell Tsai
Following the 11.7% runup on 10/28, the market dropped 8.3% before the next big pop. - Mitchell Tsai
Following the 6.2% runup on 11/13, the market dropped 18.3% before the next big pop. - Mitchell Tsai
Mitchell: Same principles apply to population growth trends and war, disease and famine, which are correction phases. Then eventually, species collapse and extinction. - Paul Denlinger
Not as big losers as the call girls who won't have any more johns from Wall Street to service. Of course, this will hurt sales of Jimmy Choo shoes... - Paul Denlinger
The notional value of all outstanding global contracts at the end of 2007 reached $600 trillion, some 11 times world output. A decade earlier it had been “only” $75 trillion, a mere 2.5 times global GDP. - Mitchell Tsai
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Figures compiled by Gian Maria Milesi-Ferretti, an economist at the IMF, show that the stock of foreign assets and liabilities held by rich countries has risen fivefold relative to GDP in the past 30 years and doubled in the past decade (see chart 3). - Mitchell Tsai
Emerging economies, in net terms, have exported capital to the rich world as their central banks have built up vast quantities of foreign-exchange reserves. - Mitchell Tsai
The rationale behind financial deregulation was that freer markets produced a superior outcome. Unencumbered capital would flow to its most productive use, boosting economic growth and improving welfare. Innovations that spread risk more widely would reduce the cost of capital, allow more people access to credit and make the system more resilient to shocks. - Mitchell Tsai
Today, however, a different premise has become popular: that financial markets are inherently unstable. Periods of stability always lead to excess and eventual crisis, and freer financial markets only lead to greater damage. This view was famously expounded by Hyman Minsky, a 20th-century American economist. Minsky argued that economic stability encouraged ever greater leverage and ambitious debt structures. Stable finance was an illusion. - Mitchell Tsai
According to Ross Levine, an economist at Brown University who specialises in this subject, numerous cross-country studies show that countries with deeper financial systems tend to grow faster, particularly if they have liquid stockmarkets and large, privately owned banks. Growth is boosted not because savings rise but because capital is allocated more efficiently, improving productivity. - Mitchell Tsai
Within America several studies have shown that states which did most to deregulate their banking systems in the 1970s grew faster than other states. In 2006 economists at the IMF compared deregulated Anglo-Saxon financial systems with more traditional bank-dominated systems, such as Germany’s or Japan’s, and found that Anglo-Saxon systems were quicker to reallocate resources from declining sectors to new, fast-growing ones. - Mitchell Tsai
Many economists argue that financial innovation, and the quick reallocation of capital that it promotes, was one reason why America’s productivity growth accelerated in the mid-1990s. Corporate managers knew that if they adapted fast, America’s flexible financial system would reward them with access to cheaper capital. - Mitchell Tsai
The bonanza in mortgage-backed securities helped create a glut of new homes that did little to promote long-term growth. But finance’s recent focus on housing, rather than more productive forms of investment, may have had more to do with the government guarantees inherent in housing than finance itself. - Mitchell Tsai
“democratisation of credit” let more people own homes (and even now it is worth remembering that most subprime borrowers are keeping up with their payments). It enabled more households to smooth their consumption over time, reducing their financial hardship in lean times. Studies show that consumers in Anglo-Saxon economies cut their spending by less when they suffer temporary shocks to their income than those in countries with less sophisticated financial systems. - Mitchell Tsai
Smoother household consumption often means a smoother economic cycle, too. Many economists believe that financial innovation, including easier access to credit, is one reason for the “Great Moderation” in the business cycle in the past few decades. - Mitchell Tsai
The country’s household debt rose steadily, from just under 80% of disposable income in 1986 to almost 100% in 2000. By 2007 it had soared to 140%. - Mitchell Tsai
...the new finance may have made the economy less resistant to a financial shock, not more.
That is the conclusion of a new analysis by Subir Lall, Roberto Cardarelli and Selim Elekdag, published in the IMF’s latest World Economic Outlook, which argues that the economic impact of financial shocks may be bigger in countries with more sophisticated financial markets. - Mitchell Tsai
The American government’s bail-out will include curbs on the pay of the bosses of troubled banks that benefit from it. This is a poor route to follow. Governments are ill placed to micromanage the incentive structure within banks. Besides, even firms with compensation systems that encouraged their managers to lend carefully got into trouble. In both Bear Stearns and Lehman Brothers, for instance, employees owned a large part of the firms’ shares. - Mitchell Tsai
An entire government agency was devoted to overseeing the housing-finance giants, Fannie Mae and Freddie Mac, but that did not stop them behaving recklessly. So far, at least, a striking feature of the crisis has been that hedge funds, the least regulated part of the finance industry, have proved more stable than more heavily supervised institutions. - Mitchell Tsai
Similarly, re-regulation should proceed cautiously and with an eye to unintended consequences. Just as many of the innovations of modern finance, such as credit-default swaps, have been used to avoid the strictures of today’s bank regulation, so tomorrow’s innovations will be designed to arbitrage tomorrow’s rules. Even after today’s bust, bankers will be better paid and more highly motivated than financial regulators. The rule-makers are fated to be one step behind. - Mitchell Tsai
(1) The most promising avenue of reform is to go directly after the chief villain: excessive and excessively procyclical leverage. That is why regulators are now rethinking the rules on banks’ capital ratios to encourage greater prudence during booms and cushion deleveraging during a bust. It also makes sense for financial supervisors to look beyond individual firms, to the stability of the financial system as a whole—and not just at the national level. - Mitchell Tsai
(2) Leverage can be tackled in other ways too. For a start, governments should stop subsidising it. America, for example, should no longer allow homeowners to deduct mortgage interest payments from their taxable income. And governments should stop giving preferential treatment to corporate borrowing as well. Private-equity firms and the like are encouraged to load up companies with debt because tax codes favour debt over equit - Mitchell Tsai
Mitchell: Anyone who believes that capital flows to where it gets the best return also believes in the tooth fairy. In fact, it flows to where the best return IS PROMISED and marketed to investors. Big difference. This leads to inherent instability in the name of ever higher returns. - Paul Denlinger
In the housing crisis case, it seems bank regulators did in fact propose an appropriate set of rules in 2005, but these were rebuffed by the white house for purely ideological reasons and because of lobbying of those banks who have now disappeared (Lehman, WaMu...) (http://quotingthecrisis.tumblr...). So the rule-makers can remain one step ahead, is the politics let them. - Antoine Bertier
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