Argentina teetering towards default

I’ve been working with a few insurers and reinsurers on credit risk recently. We’ve had plenty of reasons to think about it, what with new regulations (SAM, Basel III) and South African government downgrades. However, sometimes I get the impression that credit risk is viewed as an academic risk, as something that happens to others, […]

Education, CAs and how long is long to study

A recent Moneyweb article poses the question of whether Chartered Accountants in South Africa should study longer. The problem is that high schools are failing learners and many accounting students start out with significant literacy and numerical weaknesses in their learning. Now, as it turns out, I’m not a supporter of increasing the required length […]

Sewing seeds of manufacturing growth

The NY Times has a fascinating article on the increasing demand for American made goods, particularly textiles, and the limited supply of labour with the relevant skills. There is plenty more to the story than just manufacturing increasing in the US – it also includes an historical perspective on the sources of labour in the […]

Why equity matters

Income inequality is a bad thing. It’s a suboptimal scenario. This isn’t something that is debatable. It follows from a few fairly fundamental principles: Wealth demonstrates diminishing marginal returns.  This is evidenced through risk aversity and other empirical studies Happiness does generally increase with wealth, but at a decreasing rate. There’s plenty of evidence that […]

Summary of Cypriot capital controls

From a number of sources (CNN, USAToday, FT) No Eurozone country, since the creation of the Euro, has ever instituted capital controls. It’s not really allowed, except in exceptional circumstances. Which goes to show the value of rules with exceptions for “exceptional circumstances”. Which is to say, not much. The cost to large depositors Deposits […]

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