happy labor day September 3, 2007
Posted by Bradley in : Uncategorized , comments closedCelebrate labor day by reading the latest BIS Quarterly Review, just out. It is not a happy read, beginning:
Concerns about exposures to US mortgages cast a dark shadow over global financial markets during the period from end-May to 24 August 2007, with deepening losses on mortgage-related products spilling over to markets for other risky assets. As uncertainty about the extent and distribution of these losses spread through the financial system, investors fled to safe havens and lquidity demand surged. This caused a pronounced squeeze across major financial markets, prompting central banks around the globe to inject large amounts of liquidity.
Triggered by declining confidence in the valuation of mortgage-related and structured credit products, spreads rose sharply across the credit universe, increasingly affecting higher-rated products and assets other than credit. The price of credit risk, a measure of investor appetite for credit market exposures, jumped upwards, suggesting that a large part of the ongoing repricing was due to changes in investor sentiment towards risk.
eu multilingualism August 30, 2007
Posted by Bradley in : Uncategorized , comments closedLeonard Orban, the EU’s commisioner responsible for multilingualism gave a speech about multilingualism in Jouy-en-Josas (near Paris) today. The speech was posted to the EU’s web pages, but only in French!
guinness August 30, 2007
Posted by Bradley in : Uncategorized , comments closedGuinness may or may not be good for you. But, according to the Guardian, it is better for Diageo in Nigeria right now than in Ireland. Diageo noted that Nigeria is now the second biggest market for Guinness in the world (the UK is the largest).
The population of Nigeria is something like 33 times that of Ireland, although the GDPs of the countries are similar, according to the CIA’s World Factbook (so people in Ireland would tend to have more cash to splash around on Guinness). Guinness is an iconic product in Ireland, and the brewery in Dublin is a tourist attraction but sales are down. Is this the same phenomenon that produces declining wine sales in France?
us doesn't get financial regulation? August 29, 2007
Posted by Bradley in : Uncategorized , comments closedAfter years of seeing US regulators travelling around the world telling everyone else that they didn’t get financial regulation it’s striking to see the New York Times report that foreigners are asking for a say in how the US markets are regulated. Striking, but not surprising. After all, the collapse of the subprime lending market in the US, and its impact on securities based on those loans occurs a few years after the events at Enron, Worldcom, Tyco etc., and at a time when commentators in the US have become increasingly vocal about the costs associated with Sarbanes-Oxley compliance.
And it isn’t as if regulators around the world hadn’t recognised the risks in the development of the subprime lending market. In January 2006 the Committee on the Global Financial System published a paper on Housing Finance in the Global Financial Market which raised a range of issues, including questions about the potential impact on financial stability of the relationship between domestic markets for housing finance and international securities markets. For example:
The rapid growth of sub-prime lending in new markets, combined with the introduction of new and complex loan types, could raise some issues for financial markets. One question is whether lenders and investors are able to assess accurately the risks of this lending, given a lack of previous experience. Another question is whether the risk of contagion from larger domestic housing finance markets via bond markets has increased. This aspect has until recently mainly been an issue for the US market, but could become a broader concern as this form of lending grows in other markets.
As investors create diversified global housing finance-based portfolios, it is likely to become less clear who ultimately bears which risks and whether new risk concentrations are emerging. For central banks, regulators and policymakers more broadly, assessing linkages as well as potential build-ups of risk will become more challenging. It is possible, though unlikely, that these risks, if not checked by prudent oversight, could offset the diversification benefits from having access to a broader set of mortgage bond markets.
mattel announcement of share buyback August 28, 2007
Posted by Bradley in : Uncategorized , comments closedToday’s Mattel Press release:
Mattel, Inc. [NYSE:MAT] announced today that the Mattel Board of Directors has authorized the company to increase its previously announced share repurchase program by an additional $500 million. Repurchases will take place from time to time, depending on market conditions.
The share repurchase program is one component of the company’s capital and investment framework, which was announced in February 2003. Under this program, Mattel has repurchased 81.4 million shares of common stock for an aggregate of $1.5 billion.About Mattel:
Mattel, Inc., (NYSE: MAT, www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie®, the most popular fashion doll ever introduced, Hot Wheels®, Matchbox®, American Girl®, Radica® and Tyco® R/C, as well as Fisher-Price® brands, including Little People®, Power Wheels® and a wide array of entertainment-inspired toy lines. Mattel is recognized as one of the 100 Most Trustworthy U.S. Companies by Forbes Magazine and is ranked among the 100 Best Corporate Citizens by CRO Magazine. Committed to ethical manufacturing practices, Mattel marks a 10-year milestone in 2007 for its ever-evolving Global Manufacturing Principles and focus on sustainable business practices. With global headquarters in El Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and territories and sells products in more than 150 nations. Mattel’s vision is to be the world’s premier toy brands-today and tomorrow.
Is this a sign that management believes it will get through this sticky patch despite some doubts expressed in recent news stories ? Commentators are sceptical.
chocolate August 28, 2007
Posted by Bradley in : Uncategorized , comments closedAt the Guardian today, Tristan Farrow says:
Chocoholics really do have chocolate on the brain. Their grey matter reacts differently when they see or taste chocolate than people who do not crave the food.
The source is a paper by Edmund Rolls and Ciara McCabe.
happy bank holiday August 27, 2007
Posted by Bradley in : Uncategorized , comments closedToday was the end of a long weekend in the UK (except for Scotland), a day which is described as a bank holiday. Bank Holidays were introduced by the Bank Holidays Act of 1871, subsequently replaced by the Banking and Financial Dealings Act 1971. So London’s financial markets were closed today, even though financial markets in other EU member states were open. Just one indicator that there isn’t yet a single european market.
free trade and gambling August 23, 2007
Posted by Bradley in : Uncategorized , comments closedI tend to be risk averse. My idea of gambling is to go out of the house in the summer in Miami without an umbrella (I grew up in Manchester in the UK which always used to be very rainy, and was again this summer). And I managed to spend a few days in Las Vegas without being tempted to gamble once. But I am intrigued by the instinct to gamble, and by the inconsistent approaches that policy makers adopt towards gambling. Today’s NY Times piece on the Antigua and Barbuda WTO claim against the US relating to US attempts to control internet gambling quotes John K. Veroneau, a deputy trade representative, as saying:
It is truly untenable to think that we would knowingly bargain away something that has been illegal for decade upon decade in this country
But, given that the dispute arose between Antigua and Barbuda and the US, it is worth noting that Mr. Veroneau also wrote earlier this year:
The World Bank estimates that the full elimination of trade barriers can lift tens of millions more out of poverty; hence, the moral imperative to find a way forward on trade is clear. Moreover, while debt relief and foreign aid can make an important contribution to development in poor countries, trade and trade liberalization are likely to be even more powerful tools for alleviating poverty and providing societies with the economic resources to address their most pressing needs. Again according to the World Bank, the annual income gain to developing countries from the elimination of trade barriers to goods alone is $142 billion, conservatively measured. This amount exceeds the $80 billion in foreign economic assistance by the major industrialized countries in 2005 and the proposed $42.5 billion for developing country debt relief combined.
Wealthier regions and countries than Antigua and Barbuda, such as the EU, may have more clout with the US Government.
Distinguishing between gambling and other economic activities would make some sense if in fact the US were consistently opposed to gambling. On the one hand, increased enforcement of anti-gambling rules has led to developments such as Linden’s announcement of a new policy banning gambling in Second Life. But on the other hand, states encourage people to gamble via state lotteries. In the year ending June 30, 2007, the Florida lottery had net sales of over $4 billion. That is a lot of money – and it is generated by one state lottery, albeit in a populous state.
outsourcing stories August 23, 2007
Posted by Bradley in : Uncategorized , comments closedFrom today’s NY Times:
Zhang Shuhong, a 52-year-old businessman, had apparently committed suicide, just days after Mattel blamed his company, Lee Der Industrial, in Foshan, in southern China, for the recall of one million toys coated in toxic lead paint.
Meanwhile, the Food and Drug Administration may be about to outsource a number of jobs, although apparently not jobs directly involved in food safety inspections.
And, on the subject of food, I was fascinated by this time lapse film of a tomato over a 2 month period:
more on easy read documents August 22, 2007
Posted by Bradley in : Uncategorized , comments closedThe previous post referred to the UK’s easy read consultation on equality. The UK’s Disability Rights Commission has published a guide called How to Use easy Words and Pictures. The consultation paper does not measure up well to all of the recommendations in the guide. For example, the guide suggests that sentences should not be longer than 15-20 words. The consultation paper contains a number of sentences with over 30 words, and one with 43 words.