NBMR – still relevant

With several life insurers reporting financial results, including horribly broken measures of new business profitability such as VNB margin or VNB / PVFNBP, it feels like time to roll out New Business Margin on Revenue again and describe why it is a much better measure.

It is a good time, but I don’t currently have the time. I’m going to try to prepare a basic spreadsheet example to make it clearer. I’ve also decided on a provisional treatment of pure financial instruments that I hope will give useful results.

Watch this space.

Prediction Update : US Yields stayed low

In August 2011 I predicted that, against cries of hyperinflation and debt crisis in the US, yields would stay low.

Specifically, I said:

Prediction: If the US debt is downgraded in the next 6 months, yields won’t increase by more than 0.2% 6 months after the downgrade. In other words, there might be a small, temporary uptick, but within 6 months yields will have returned to below 0.2% above the day before downgrade.

S&P downgraded the US a few days later on 5 August.  Yields on 10 year US bonds were 2.56%, Currently, US 10 year yields are just below 2.00%. Clearly, 6 months after the downgrade (and at every point in between) US yields have stayed low, well below the upper limit of my prediction.

If you were still listening to the “obviously” right concerns over high inflation from quantitative easing and relaxed monetary policy in the middle of a huge liquidity trap and massive reduction in private spending, it’s time to reset your views.

For every complex problem…

For every complex problem, there is a solution that is clear, simple and wrong.

Greece is a complex problem. Paul Krugman points to this Choose Your Own Adventure on the Greek crisis. Much like the original books, there are many, many nasty ends.

Read it, try it, explore a few paths. This is the best resource I’ve seen recently to explain exactly how bad almost all the alternatives are, and how there are no really good outcomes from this mess.

Rest of The World, watch out.

I can’t resist making a bit of noise about this

The second largest Bitcoin exchange is shutting down (possibly to reopen elsewhere).

Bitcoin experienced a rough night on Monday as TradeHill, the second-largest Bitcoin exchange, announced that it was closing its doors. In a statement, CEO Jered Kenna cited regulatory problems and the loss of $100,000 in a dispute with one of its payment processors as major factors in the decision. He has pledged to open a new site once these issues have been resolved.

So apart from the problems with Bitcoins, it turns out the security and marginal attractions of the construct are a little tarnished too.

what a difference several years make

The laminated card in the seat pocket of the SAA Boeing 737-800 I’m flying in describes how I can use most devices in “flight mode” once in the air.
It’s dated November 2011, but I’m quite sure I’ve still heard cabin crew telling people off for not having their phones off over the last two months. However late, be it several years or several years and two months, the relaxation of the draconian and relatively unique restrictions on the use of electronic devices in the air has been lifted.
So rather than losing 4 hours of my life with every Cape Town – Joburg trip, I now lose more like 2 hours and get to plough through an embarrassingly large list of unattended emails and arrive with a sense of accomplishment, lower stress levels and hopefully fewer irate colleagues waiting on email replies.
Now I can’t wait for a wifi connection so I can retrieve truncated emails and attachments and communicate in real time. And publish the posts I write while on the plane!