URL shorteners are handy when space is limited, but each one adds another fatal point of failure. To make the point, if I want you to read about New Business Margin on Revenue. And by the way you should because it’s an important newish concept, the link will work provided your internet connection is working, the relevant DNS is working and my server is running.
Let’s look at an extreme alternative:
First shorten link at http://goo.gl/ gets to http://goo.gl/TpJHG
Then take http://goo.gl/TpJHG and shorten at https://bitly.com to get http://bit.ly/17zpwir
Then http://tr.im/ gets http://tr.im/42hfd
Then TinyURL gets http://tinyurl.com/bnqfylu
Interestingly, is.gd didn’t want to shorten the link. TinyURL has a longish URK, but does have the awesome ability to provide your own shortened URL like http://tinyurl.com/NBMR-shorten
I’m not provide embedded links for all of those because it’s a bit silly. But you can see when you click on the last link as it backtracks through each of the shorteners before arriving at the destination. Each step is the chance for catastrophic failure.
So please don’t use link shorteners in ordinary web content. It’s not necessary and makes the internet increasingly fragile.
KPMG has been awarded the FSB SAM Economic Impact Assessment project. This is a perfect opportunity to combine our insurance, actuarial, capital market and economics skills to deliver on a critical project for the insurance industry and FSB.
We still need to fine-tune scope with the FSB and the Economic Impact Task Team, but we’ll be covering some of these issues:
Expected impact on capital requirements, capital ratios and free capital for insurerrs
Resultant scenarios around capital raising, consolidation and what this means for new entrants
The once-off and BAU expenses of SAM compliance, what this does to returns to policyholders and shareholders.
Impact on capital markets (especially equity investments, government bonds, swaps, corporate paper, sources of capital issued by insurers) and interaction with banks in this space.
Impacts on reinsurers, then extending to interactions with other service providers and competing industries
Likely responses and actions by insures in response to this changed environment
Potential broader economic impacts on employment and economic activity arising from these changes to an important part of the financial services industry.
There’s fairly obviously a fair amount of subjectivity in all of this and we don’t expect to have everyone happy with the conclusions, but we are going to perform a rigorous analysis of the possibilities and will be engaging with a wide range of stakeholders in forming our views.
The exchange is insolvent. It seems like the operator didn’t separate member money from its own money and then spent it. This basically makes it a ponzi scheme. It can keep operating as long as it keeps operating. There are sufficient member balances that it still has positive cash. As soon as it accounts for these liabilities to members, it is insolvent.
So, members are offered the chance to agree to a voluntary reduction in their claim and/or conversion to long-term investment. If nobody agrees, the exchange will be liquidated and everyone loses out and any inherent value in the exchange disappears. If enough agree, then those who don’t agree get to withdraw their full funds.
Under this argument, the incentive is for each member to be selfish. Let’s see why.
There are two scenarios – enough accept the terms, too few accept the terms.
If too few accept the terms, the payout is the same whether you agreed to accept the terms or not. So that won’t affect the decision. If there are enough who accept the terms, those who declined will get paid out in full. The only way it makes sense or an individual to accept the terms is if the value of accepting the terms is greater than 100% of their account balance. This might be the case if they were converted to an equity value in the business and believed in its ongoing sustainability, but seems pretty unlikely.
The equity value has been massively damaged by the damage to brand value of the exchange. Outside parties or existing members wishing to take an equity stake need to consider carefully the extent of brand damage already and the $700,000 shortfall needed to restore solvency let alone any capital for future operations and investment.
The proportion of people who speak sense has declined to the lowest level recorded since ever.
“If Eskom puts up its prices too high we’ll have higher inflation. Inflation is bad therefore Eskom shouldn’t put up electricity prices so much.”
Oh really? What happens to the cost of producing electricity when Eskom puts up its prices by 16% rather than 8%? Nothing. Well actually the cost goes down, but then I’m being sneaky – raising the price will reduce consumption, which in turn will decrease the total amount of electricity produced, thus reducing the aggregate cost of electricity production. Yes, it’s sneaky because we all knew I meant the “cost per unit” of electricity.
But wait, if we consume less electricity, Eskom presumably would have to use less gas-turbine powered emergency and oh-so-very-expensive sources of electricity to fill in at peak times. So just maybe the cost per unit of electricity would go down if Eskom were allowed to raise it’s prices by 16% and not 8%.
Another good way to lower inflation would be for government to add a 1% subsidy on everything this year. Everything will be 1% cheaper because you mail (fax?) your receipts to Pravin and Government will mail you a postal order for 1% of the value back in. Instantly effective prices are 1% lower and inflation is more under control.
Hell, why stop at 1%? Let’s have a 2% reduction. And a further 2% next year and so on.
It’s worth reading in its entirety for the insights. I don’t agree with everything there, and I certainly don’t agree with the widely held view (not among the authors) that the universe of countries included in the survey is supposed to be somehow representative of the world.
The countries chosen have an absolutely clear bias in their selection. They are successful economies with successful financial markets. They are included by virtue of their long-term success and capital growth and returns for investors.
The authors know this, but many readers don’t. The returns per this survey are an overly rosy view of possible future returns.
Economists (and actuaries) like to measure things.
The easier to measure and the more reliable the measure, the more we like to measure it. This is not unlike the drunk looking for his keys under the street lamp because that’s where the light is even if it isn’t where he dropped the keys.
Sometimes the most important things to measure are very difficult to measure reliably. Happiness is one of these things. Economists have been trying to measure this for decades with interesting, counter-intuitive and sometimes contradictory results.