Mon(k)ey Business

In the spirit of roadmaps, forecasts and cherry picking

In the northern Hermisphere we are going towards autumn and the markets are – as so often – on the down. In fact, just this morning on various online news they were fearing a “Black Monday”, as the stock exchanges around the globe are pointing in one direction: down.

And – who knows – maybe it is or it isn’t a ‘so-called black Monday’. I don’t want to go into the ins and outs of the “why, how and who is to blame”-mechanism that invariably starts when something untoward happens in the world.

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In the spirit of berries

Summer is the time to eat lots of berries. Me, I just love berries – be it blueberry, blackberry, strawberry, raspberry or any other type of berry. I just love them. Out in the country-side there are plenty of blackberries to be picked as you go for nice hikes. It really is simply a matter of “eat as many as you can and enjoy them”. They are tasty and very healthy and for free. Mother Nature really is very generous – it is all there.

Doctor’s advice

When I was still a kid, I once developed an allergy to which the doctor – without actually checking anything – simply claimed that I had an allergy towards strawberries. STRAWBERRIES! I absolutely loved strawberries. And this doctor said that they were supposed to be a no-go for me. After observing the family henceforth enjoying their fill of strawberries that year I had enough. Somehow, I simply knew that it was impossible that I was allergic towards strawberries. I mean, how can one be allergic towards something one loves? I can understand an allergic reaction towards certain types of work, certain teachers or bosses. But strawberries?! Somehow, a doctor would never say that you are allergic towards liver or spinach or anything else that we typically don’t like as children. It always turns out to be something we love! Fancy that.

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In the spirit of QE (Quantitative Easing)

Much has been written and talked about QE during the last few weeks. To be honest, for the past few years I haven’t really concerned myself much with macro-economic, monetary or debt policy.

So as I first heard the acronym QE I thought: “what the …. is QE?” I hadn’t a clue. Well. Thanks to Google and a couple of hours later it became a little clearer what the topic was.

In the recent history we have seen a few incidents where similar effects were sought by somehow inundating the economy with fresh money. The idea has always been the same: increase investments and get the economy going. Whether you name these policies Marshall Plan, big push theories or QE it amounts to the same: Sometimes it works and sometimes it doesn’t.

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In the spirit of NEW YEAR’S resolution

Okay. Much has been written about resolutions for the New Year. And fancy that, New Year’s resolutions seem to repeat themselves on a yearly basis. That is: not only the resolutions themselves seem to repeat themselves again and again, but also the topic as such. Hm.

What does that say about our creativity? – Anyway. I thought, I would be a little more creative this year (we are still counting the year 2014 CE).

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In the spirit of following financial and other “Gurus”

One of the issues that can be observed especially in the financial industry is the “herding” phenomenon. Already during 80s it was perceived as one of the main causes for the then ensuing international debt crisis, that kept the industry busy for the next decade.

What does the “herding” phenomenon mean? Today we would say that people are following a financial “Guru” that then transmits into the whole industry thinking and acting alike. We could also say that there are a few strong, charismatic and rationally intelligent people in the industry that got it right in terms of where the market is heading.

Hence, because these financial “Gurus” got it right a few times in the past, people tend to believe that they will always get it right… Continue reading

In the spirit of deflation

A few days ago the European Central Bank lowered its benchmark interest rate to an all-time low of 0.05% – practically zero. A fear of deflation led to this move

Somehow I just cannot imagine that the banking industry will use this all-time low to approve more credits in the business industry. Why should they? – Analysing, controlling and administering credits are time-, cost- and risk-intensive. It seems much more interesting thus to invest in a low-risk paper that now can be bought at practically zero cost. – Great.

Why then does the European Central Bank go for such a move? – Politics? – Psychology? – I haven’t a clue. More interesting, though, is taking a look at the fear of deflation. Continue reading

In the spirit of managing wealth

“Wealth does not guarantee happiness. However, it allows you to be unhappy in a comfortable way.”

In the first semester of economics and politics a Professor once proclaimed the above little piece of wisdom. Naturally, we all laughed and thought how witty and intelligent this Professor was.

Years later, I am reminded again of this view as I am delving more and more into the nature of happiness. This above viewpoint of happiness and wealth shows three points: Continue reading

in the spirit of a “free lunch”

Free lunch

In economics we learnt that there is no such thing as a “free lunch”. It became so ingrained in our minds that we have come to accept this thesis as a fact. And of course we have had ample chance to experience this in real life – especially in business – again and again.

Have you ever noticed for example how certain people or businesses do something for you without you either having asked for it nor actually wanting or needing it? Continue reading

In the spirit of ‘bcc’

The other day I sent an email to a group of people to remind them of the weekly blog. And – due to a mistake on my part (for which I apologize), I neglected to send the e-mail bcc. This was not my intention as a bcc in such a context is matter of respecting everybody else’s privacy.

Another incident of bcc-policy, though, shows the other side of the coin. Continue reading