Quotulatiousness

June 13, 2012

“… there simply aren’t enough lifeboats!”

Filed under: Economics, Europe, Greece, Italy — Tags: , , , , — Nicholas @ 13:18

Nigel Farage speaking in the European Parliament:

Another one bites the dust. Country number four, Spain, gets bailed out and we all of course know that it won’t be the last. Though I wondered over the weekend whether perhaps I was missing something, because when the Spanish prime minister Mr Rajoy got up, he said that this bailout shows what a success the eurozone has been.

And I thought, well, having listened to him over the previous couple of weeks telling us that there would not be a bailout, I got the feeling after all his twists and turns he’s just about the most incompetent leader in the whole of Europe, and that’s saying something, because there is pretty stiff competition.

Indeed, every single prediction of yours, Mr Barroso, has been wrong, and dear old Herman Van Rompuy, well he’s done a runner hasn’t he. Because the last time he was here, he told us we had turned the corner, that the euro crisis was over and he hasn’t bothered to come back and see us.

I remember being here ten years ago, hearing the launch of the Lisbon Agenda. We were told that with the euro, by 2010 we would have full employment and indeed that Europe would be the competitive and dynamic powerhouse of the world. By any objective criteria the Euro has failed, and in fact there is a looming, impending disaster.

You know, this deal makes things worse not better. A hundred billion [euro] is put up for the Spanish banking system, and 20 per cent of that money has to come from Italy. And under the deal the Italians have to lend to the Spanish banks at 3 per cent but to get that money they have to borrow on the markets at 7 per cent. It’s genius isn’t it. It really is brilliant.

So what we are doing with this package is we are actually driving countries like Italy towards needing to be bailed out themselves.

In addition to that, we put a further 10 per cent on Spanish national debt and I tell you, any banking analyst will tell you, 100 billion does not solve the Spanish banking problem, it would need to be more like 400 billion.

And with Greece teetering on the edge of Euro withdrawal, the real elephant in the room is that once Greece leaves, the ECB, the European Central Bank is bust. It’s gone.

It has 444 billion euros worth of exposure to the bailed-out countries and to rectify that you’ll need to have a cash call from Ireland, Spain, Portugal, Greece and Italy. You couldn’t make it up could you! It is total and utter failure. This ship, the euro Titanic has now hit the iceberg and sadly there simply aren’t enough life boats.

When is a bribe appropriate?

Filed under: Britain, Bureaucracy, Business, Law, Russia — Tags: , , , , — Nicholas @ 09:59

The British government is trying to crack down on bribery, which on the surface seems like a good thing to do: but will it cripple British businesses in third world countries?

We used to draw a distinct line between what was acceptable business conduct here at home and what we did abroad with Johnny Foreigner.

Inviting Bertie from your major customer to Henley or the Derby, or waving Cup Final and Olympic tickets in his face was entirely acceptable. Slipping him £500 for an order was bribery and both illegal and immoral.

But what you did abroad was an entirely different matter: bribery was until very recently tax deductible.

[. . .]

This is of course very different from the system of old. Which was, essentially, that soft soaping someone with experiences and days out was just absolutely fine while any mention at all of cash was not just legally but also socially verboten.

At home, in Britain, that was. Having worked in some pretty odd and even rough places I’ve done my share of bribing people, but even so I would be profoundly shocked if I was asked for a bung in Blighty. But the system also most definitely facilitated the payment of bribes to Johnny Foreigner.

At one point, working in Russia, I needed to get cheap railway prices out of the Russian railroads to make the numbers on a metals shipment add up. The only way known to do this was to make a deal with the North Koreans who had special state-set prices on said railways. Which is how I found myself inside the N. Korean embassy in Moscow handing over $10,000 in crisp notes to their KGB-style guy after the successful conclusion of the shipment.

Yes, of course, it’s terribly naughty subverting the employees of a communist dictatorship, but the reaction here at home was the most interesting. When I made gentle enquiries to the taxman as to how I might account for this transaction, hinting gently at first, he finally pointed out that since I’d paid the bribe in a foreign currency to a foreign chap that was just fine. Just list it as a business expense and it was tax deductible.

Wine: drink what tastes best to you, not what the experts tell you to

Filed under: Europe, France, Randomness, USA, Wine — Nicholas @ 09:30

Yet another blind taste test that didn’t come out the way it was “supposed” to:

At the Princeton tasting, led by George Taber, 9 wine judges from France, Belgium and the U.S. tasted French against New Jersey [TC: that’s the New Jersey] wines. The French wines selected were from the same producers as in 1976 including names such as Chateau Mouton-Rothschild and Haut Brion, priced up to $650/bottle. New Jersey wines for the competition were submitted to an informal panel of judges, who then selected the wines for the competition. These judges were not eligible to taste wines at the final competition The results were similarly surprising. Although, the winner in each category was a French wine (Clos de Mouches for the whites and Mouton-Rothschild for the reds) NJ wines are at eye level. Three of the top four whites were from New Jersey. The best NJ red was ranked place 3. An amazing result given that the prices for NJ average at only 5% of the top French wines.

A statistical evaluation of the tasting, conducted by Princeton Professor Richard Quandt, further shows that the rank order of the wines was mostly insignificant. That is, if the wine judges repeated the tasting, the results would most likely be different. From a statistically viewpoint, most wines were undistinguishable. Only the best white and the lowest ranked red were significantly different from the others wines.

There are good wines and bad wines. There are good wines and better wines. But my experience has always been that there’s a point of diminishing returns beyond which you’re paying more money for no appreciable improvement in the quality of the wine. In other words, beyond that point, you’re paying for the prestige of the label or the mystique of the brand not for anything intrinsic to the liquid in the glass. As I wrote last year:

We’re in a golden age for wine, as more and more producers of inexpensive wines adopt better techniques and equipment for even their vin extremely ordinaire.

Wine isn’t a simple product: people buy wine for lots of different reasons, and one of those reasons is to signal higher social status by buying more expensive wine. As you get above a certain price level, the quality increases more slowly but the “prestige” makes up the difference (for those interested in the social signalling, anyway).

I’ve discovered that my palate isn’t highly developed enough to detect and appreciate the additional quality that a $100 bottle of wine is supposed to display over a $40-$50 bottle. It may be that I lack the ability to discriminate sufficiently between the two … or it may be that the primary difference is in the “prestige” and not in the palate.

If you’re buying wine to have with a nice dinner, find your point of diminishing returns and don’t go beyond it: you’ll save yourself a lot of money over time and still enjoy your wine. If, on the other hand, you’re buying wine specifically to impress then go as expensive as you like.

QotD: “California is becoming Detroit”

Filed under: Economics, Government, Politics, Quotations, USA — Tags: , , — Nicholas @ 09:14

The liberal model — borrowing huge sums, rigging interest and the currency to enable state profligacy, turning large swaths of the population into less productive unionized government workers or dependents on the dole who vote in thanks to political hacks — simply does not work. How could beautiful blue-state California lose almost a million refugees to arid Texas? I like Texas, but Dallas had far less of nature to work with than did San Francisco. (It takes a lot of human failure for thousands to give up verdant California to move to Utah or the Nevada desert.) What we are witnessing is nothing short of surreal: in the manner that Tijuana was a different universe from San Diego, so too the entire state of California is becoming a different world from its neighbors. Whether one examines its near dead-last schools, its oppressive income and sales taxes, its decaying roads and infrastructure, its absurd prison system, its dysfunctional state offices (try the DMV), or its priestly public employee caste, California is becoming Detroit.

Victor Davis Hanson, “The Liberal Super Nova”, PJ Media, 2012-06-11

John Kay on the Finnish frontier

Filed under: Europe, History, Military, Russia, WW1, WW2 — Tags: , , , , — Nicholas @ 08:58

Finland had a very chancy time over the last hundred years. John Kay is visiting now, and reflects on how Finland survived to today:

The Finnish border is an anomaly. In 1918 the Finns won independence for a state that extended to the gates of St Petersburg. Russia captured territory in the 1939-40 Winter War. Finland then fought on the losing side in the second world war and did not remain neutral in the cold war. So the once thriving Finnish industrial city of Viipuri is today the depressed Russian outpost of Vyborg.

A cynical commentator on 20th-century history might observe that the political ineptitude of Kaiser Wilhelm and subsequently of Adolf Hitler brought America in on the opposite side of Germany’s quarrel with Russia in 1917 and 1941. Only when the democratic politicians of modern Germany made the rational alliance did Finland achieve the favourable political and economic outcomes it now enjoys. To pass the watchtowers and barbed-wire fences on the Finnish-Russian border is to be reminded of how fragile, and how recent, are the stability and security we take for granted today.

[. . .]

That observation is evident on the Finnish-Russian border. The razor wire kept Russian citizens in when the living standards of planned societies and market economies diverged. But now the border is easy to cross and the gap in per capita income has narrowed, though not by much. The very different income distributions of egalitarian Finland and inegalitarian Russia can be seen in the car parks and designer shops of Lappeenranta.

In the Soviet era, Finland produced Marimekko; Russia made no clothes any fashion-conscious woman would want to buy. Post-Communist but still autocratic Russia made surveillance equipment; democratic Finland led the world in mobile phones. Today Russia’s geeks hack into your bank account, while those of Finland develop Angry Birds.

The pristine countryside of Finland contrasts with the degraded physical state of much of Russia: a demonstration of the unexpected finding that regulated democratic capitalism preserves the environment more successfully than any other system of government.

Clang!

Filed under: Gaming, Media, Technology — Tags: , — Nicholas @ 00:01

Neal Stephenson wants your money to help him create a realistic sword fighting game:

Hi, Neal Stephenson here. My career as an author of science and historical fiction has turned me into a swordsmanship geek. As such, I’m dissatisfied with how swordfighting is portrayed in existing video games. These could be so much more fun than they are. Time for a revolution.

In the last couple of years, affordable new gear has come on the market that makes it possible to move, and control a swordfighter’s actions, in a much more intuitive way than pulling a plastic trigger or pounding a key on a keyboard. So it’s time to step back, dump the tired conventions that have grown up around trigger-based sword games, and build something that will enable players to inhabit the mind, body, and world of a real swordfighter.

H/T to Tom Kelley for the link.

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