I blogged recently about why I park on the fourth floor of the Cape Town airport parkade, and also about understanding and utilising unlikely but extreme events to your advantage. There is actually a link between these two posts. Parking on the top floor does have a cost. It takes longer to drive up all…
A friend “volunteered” me to answer an insurance question from Aardvark on allocating economic capital across different insurance products. After writing a short response, I received the frighteningly useful message: “Error”. Having written a brief summary of the different techniques used in this really important area, I thought I should use it as a blog…
Consumer prices in the US are now lower than they were a year ago. photo credit: TheTruthAbout… This is the first time this has happened since 1955. On the one hand, this reiterates that this recession is much worse than those in recent times. On the other hand, it shows how how asset prices had…
I blogged before about some medium-term concerns I have around Lebanon’s currency stability. A story I saw today shows an opposite view, so I’m linking it here. Moody’s have upgraded Lebanon’s bond ratings due to improved external liquidity. My original post was to temper the irrational optimism around the currency peg, rather than to say…
In my previous post I discussed some of the risks to various currencies. Now what happens if your local currency is pegged to the US Dollar as it is in Lebanon? Speaking to Lebanese bankers and insurers there seems to be a devout belief that the peg is rock solid. This is surprising given the…
Currencies aren’t what they used to be. The US Dollar can no longer be viewed as a safe bet as Obama and Bernanke spend their way out of a crisis partly fueled by too much spending. Inflation will come, it’s just a matter of time. Warren Buffet thinks so too. The current relative strength of…
photo credit: pablo/T Chavez is promising to take over rice processing plants in Venezuela because they have been refusing to sell rice at the price set by government. Hyperinflation is starting to show it’s head, as a function of government policies around money supply. The article I referenced claimed that that is the reason for…
Our memories are too short. It was only a few short months ago that Alan Greenspan’s legacy was being torn apart by critics of his eagerness to prop up bubbles through monetary easing. The critics said that his actions limited short term damage from the bursting of bubbles and economic difficulties only to generate the…
