– a working paper by Richard Whelan
The continuing difficulties with the Banking Industry, particularly in Europe, are due to a very simple error-assuming that the Banking Industry is part of the private sector, and regulating and dealing with it on that basis. In fact it is a unique hybrid of the public and private sectors, combining the worst features of both. Until that realisation is fully integrated, the Banking Industry will continue to create huge difficulties for us. Continue reading
Slow Finance, by Gervais Williams, Bloomsbury, London, Sterling £20, 183 pages
There’s food for thought in adopting the principles of the Slow Cooking movement and applying them to making investment decisions. Typically the Slow Cooking aficionado chooses ingredients carefully, preparing them the night before, cutting meat into small chunks, trimming the vegetables. In the morning they go into a vessel which cooks them slowly at a lower heat, allowing all the juices and flavours to blend. In the evening the smell of a delicious casserole wafts out from the kitchen. This makes a much more appetising prospect than zapping an “unidentified frying object” in a microwave, as celebrity chef Keith Floyd used to say.
A risk management perspective also suggests that a yes vote is the current best choice for Ireland.
With so much uncertainty and conflicting information, perhaps the only rational way to evaluate which way to vote in the referendum on the Fiscal Treaty is to look at it from a strategic/risk management perspective based on likely developments in the euro zone over the next few years. Considering the impact on Ireland of those possible and foreseeable alternatives should clarify what a rational voter should do. This is necessary as it is most likely that Ireland will be voting in advance of any of the development set out below.
Endgame the End of the Debt Supercycle and How It Changes Everything, John Mauldin and Jonathan Tepper, John Wiley & Sons, Inc., New Jersey, $27.95, 2011, 318 pages.
American Gridlock Why the Right and Left Are Both Wrong, H. Woody Brock, John Wiley & Sons, Inc., New Jersey, $27.95, 2012, 273 pages.
In Charles Dickens’ novel David Copperfield, Mr. Micawber identifies an essential difference between happiness and misery.
“Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”
Two recent books consider the muddle politicians, bankers and economists have made of the world’s finances, during which the Micawber doctrine sadly got forgotten. They focus on the debt burden we have strapped on to the backs of coming generations and tackle the inability of current political systems to confront the ensuing mess.
While we were the agents of our own misfortune in Ireland, the continuing attack by the markets on Euro countries, which we are caught up in, has a very rational basis. As many have pointed out, including George Soros, Paul Krugman, and Erik Jones (Prof of European studies at the Bologna centre of Johns Hopkins University) there are significant flaws in the Euro, which may lead it to fail. The 10 most important reasons are as follows: Continue reading
Time for Ireland, like Germany, to Look after Its Own Interests