The whole saving US auto industry thing may just be a soap opera.
The government must do it despite they hate to do it. The people demands it, the workers may go roits if they all lose their job at once. No matter how you look at it, the US government must try to save the auto companies.
Now they have send the aid and "given them a chance", I think those auto companies can finally RIP. The whole process is a waste of time and money, but it is also time and money that must be wasted.
无奈...
2009年3月30日 星期一
Long Gold short Gold miners?
No matter how I look at it, the gold mining stocks overreact by a large margin. While I am quite contend with the theory of using gold to hedge against the fed printing machine, those gold miner stocks are pure speculations.
I do not think a retail investor can short the gold mining stocks in a 1 to 1 ratio with the gold ETF, which is sad. My friend, if you can do it, I will gladly open an account tomorrow. At least now i have an example to demonstrate why this is necessary....
Orange is the gold ETF, which is suppose to follow the exact movement of gold price.
I do not think a retail investor can short the gold mining stocks in a 1 to 1 ratio with the gold ETF, which is sad. My friend, if you can do it, I will gladly open an account tomorrow. At least now i have an example to demonstrate why this is necessary....
Orange is the gold ETF, which is suppose to follow the exact movement of gold price.
2009年3月27日 星期五
Dismay in Japan
Japan Retail Sales Fall Most in Seven Years, Prices Stall as Slump Deepens
While the situation in US and China seems to be improving, Japan just keep sinking lower.
I am really skeptical of that lowly 4% unemployment rate, which seems too low to be true. Well, Japan's corporate may be more reluctant to fire their workers, which leads to the increase in temp workers in big corporation these days.
That may help reduced the unemployment numbers a bit, but 4% really seems VERY low when Japan's export is down by 49% year to year. I guess the aging population and those early retirement help a bit? (You leave the working force by retiring, and hence no longer counted as unemployment.)
While the situation in US and China seems to be improving, Japan just keep sinking lower.
I am really skeptical of that lowly 4% unemployment rate, which seems too low to be true. Well, Japan's corporate may be more reluctant to fire their workers, which leads to the increase in temp workers in big corporation these days.
That may help reduced the unemployment numbers a bit, but 4% really seems VERY low when Japan's export is down by 49% year to year. I guess the aging population and those early retirement help a bit? (You leave the working force by retiring, and hence no longer counted as unemployment.)
Foreclosure at USA
http://www.bloomberg.com/apps/cbuilder?ticker1=HOMFCLOS%3AIND
Looking at the graph, it seems that the foreclosure # have stabilized, which is a major prerequisite for a recovery in US economy. The new policies may have some relationship, but I think we still need to see more data points from various sources before a change of view.
For now, I still think economy will not recover until much much later.
2009年3月26日 星期四
Companies that I like
I like companies that have their own character and the guts to stay true to their motto. Ever since you see the advertisement of Andy Lau "今時今日，咁野係唔夠既"， a lot of Hong Kong companies become one of those "customers are always right" companies. A good company should have the balls to do what they think is right and listen to reasonable opinions of their customers.
A good company should always stay true to its motto, be itself, even if the customers disagree. The relationship between company and customer should never be one sided, customers are often wrong. The company should lead its customers and educate them the greatness of their product, carefully.
Now let me tell you the companies that I like:
Blizzard: (Game software)
The company that is famous for their EXTREMELY long product development time. It probably take more time to make a game that blizzard is satisfied with than to make a new drug for AIDS.
They have even scraped a project completely (SC: Ghost) because it is not "up to their standard". Most other game developers would have simply release it and get back whatever cash flow it can generate instead. It takes some courage to not release something you have developed for over 4 years.
Their reward is of course an extremely loyal fan base and a very very good word of the mouth.
Nintendo: (Game hardware & software)
Nintendo has pride in their products, they may have lost a decade to Sony Playstation, but they have never lost their pride. Their founding family insist that games should be enjoyed, games should be played by families and friends, games should be easy to play. That have costs them dearly, but they did not give up. Low quality graphics, no H-game, no violent, no zombies.... no everything that made Play Station so successful, but Nintendo stick to its own path, with only their pride to support them.
They invented super Nintendo, they invented the analogue control system (with the miserable console N64) , they invented a dual screen hand held game machine, they invented Wii.
They do not go for the male customers only, they do not target only the "core gamers", they do not add 10 buttons to the controller like Sony, they do not have beautiful graphics, they do not even support HD. (Hell, they still do not use disc in NDS!)
They make dog & pet rearing into a game, they make exercise and yoga into a game, they make pipe repair workers into world saving heroes that crush mushrooms with their ass.
Nintendo kick asses.
Microsoft: (PC software)
This is the ultimate example of corporate leading its customer, you learn how to use window because you have to. Microsoft single handedly decide your whole computer experience, not the other way around. Yes they have bad products like Vista, but when you buy a new computer you are still stuck with it.
Stardocks: (Game software)
A game developer who do not add copyright protection in its games, it even dare to make single player PC games in the 21st century which is TURN-based AND 2D. No other game companies even dare to do any one of the above. Their games are always highly rated by critics even though they do not seem to sell that well at first. It show you that you do not have to make those crappy games that everyone plays to succeed.
Their CEO is a real man who defend his own ideals XD. (see link)
His post on the case for no multiplayer. (see link)
Quote (wikipedia):
CEO Wardell has defined the Gamer's Bill of Rights.
Gainax: (Anime Production House)
The perfect example of how you can be successful when you choose NOT to serve the mass market, but instead focus on making high quality product for a niche market. They are not called the "Otaku production house" for no reason.
It take balls to make an anime when the main character has perverted interests like: hiring maids to serve him at his mansion, make the maids wear different costumes everyday, install surveillance cameras everywhere and watch the girls private moments every night. And add the fact that the main character is only 14 years old with a lot of money to spend from dead parents and absolutely hate by everyone else in the show (rightly so). While I have only seen the description, I know this company have balls, as the market is so specialized that I have never known anyone who have seen it. (我的主人)
FCLC is another show where that can never hope to appeal to the mass market. While the main character is much more normal this time, his head is not. In this OVA, random things can simply come out from his head for no apparent reason nor order. Guitar, aliens and even a giant robot can come out from his tiny head. This anime is pure madness. Even the drawing style, color tones and storyline change randomly, it can be a love story between a primary school kid and his elder brother's girl friend (just this, can get a ban in TVB) now, the next 5 minutes it become a super robot war. In summary, Gainax have guts to produce artistic products that will never be popular. (This one I a more interested in)
That's all I can think of now, mainly in game industry, which I am most familiar with. I heard google is also an creative company that stick to its core values. I quite like their google labs, which is certainly not common in other companies.
A good company should always stay true to its motto, be itself, even if the customers disagree. The relationship between company and customer should never be one sided, customers are often wrong. The company should lead its customers and educate them the greatness of their product, carefully.
Now let me tell you the companies that I like:
Blizzard: (Game software)
The company that is famous for their EXTREMELY long product development time. It probably take more time to make a game that blizzard is satisfied with than to make a new drug for AIDS.
They have even scraped a project completely (SC: Ghost) because it is not "up to their standard". Most other game developers would have simply release it and get back whatever cash flow it can generate instead. It takes some courage to not release something you have developed for over 4 years.
Their reward is of course an extremely loyal fan base and a very very good word of the mouth.
Nintendo: (Game hardware & software)
Nintendo has pride in their products, they may have lost a decade to Sony Playstation, but they have never lost their pride. Their founding family insist that games should be enjoyed, games should be played by families and friends, games should be easy to play. That have costs them dearly, but they did not give up. Low quality graphics, no H-game, no violent, no zombies.... no everything that made Play Station so successful, but Nintendo stick to its own path, with only their pride to support them.
They invented super Nintendo, they invented the analogue control system (with the miserable console N64) , they invented a dual screen hand held game machine, they invented Wii.
They do not go for the male customers only, they do not target only the "core gamers", they do not add 10 buttons to the controller like Sony, they do not have beautiful graphics, they do not even support HD. (Hell, they still do not use disc in NDS!)
They make dog & pet rearing into a game, they make exercise and yoga into a game, they make pipe repair workers into world saving heroes that crush mushrooms with their ass.
Nintendo kick asses.
Microsoft: (PC software)
This is the ultimate example of corporate leading its customer, you learn how to use window because you have to. Microsoft single handedly decide your whole computer experience, not the other way around. Yes they have bad products like Vista, but when you buy a new computer you are still stuck with it.
Stardocks: (Game software)
A game developer who do not add copyright protection in its games, it even dare to make single player PC games in the 21st century which is TURN-based AND 2D. No other game companies even dare to do any one of the above. Their games are always highly rated by critics even though they do not seem to sell that well at first. It show you that you do not have to make those crappy games that everyone plays to succeed.
Their CEO is a real man who defend his own ideals XD. (see link)
His post on the case for no multiplayer. (see link)
Quote (wikipedia):
CEO Wardell has defined the Gamer's Bill of Rights.
The game's CD contains no copy prevention and there is no requirement to have the disc loaded into the computer to play the game. Stardock's anti-piracy plan is that players must complete product activation with a valid serial number before they may receive any of the several game updates. Serial numbers can be used multiple times and the company owner, Brad Wardell, has stated that they are taking an approach based on the view that people who install the game illegally were unlikely to purchase it anyway.
Now that's a boss that you should work for.Gainax: (Anime Production House)
The perfect example of how you can be successful when you choose NOT to serve the mass market, but instead focus on making high quality product for a niche market. They are not called the "Otaku production house" for no reason.
It take balls to make an anime when the main character has perverted interests like: hiring maids to serve him at his mansion, make the maids wear different costumes everyday, install surveillance cameras everywhere and watch the girls private moments every night. And add the fact that the main character is only 14 years old with a lot of money to spend from dead parents and absolutely hate by everyone else in the show (rightly so). While I have only seen the description, I know this company have balls, as the market is so specialized that I have never known anyone who have seen it. (我的主人)
FCLC is another show where that can never hope to appeal to the mass market. While the main character is much more normal this time, his head is not. In this OVA, random things can simply come out from his head for no apparent reason nor order. Guitar, aliens and even a giant robot can come out from his tiny head. This anime is pure madness. Even the drawing style, color tones and storyline change randomly, it can be a love story between a primary school kid and his elder brother's girl friend (just this, can get a ban in TVB) now, the next 5 minutes it become a super robot war. In summary, Gainax have guts to produce artistic products that will never be popular. (This one I a more interested in)
That's all I can think of now, mainly in game industry, which I am most familiar with. I heard google is also an creative company that stick to its core values. I quite like their google labs, which is certainly not common in other companies.
2009年3月23日 星期一
Great article that details the stupidity of the mass
Mass Hysteria Over AIG Obscures Simple Truths: Michael Lewis
I am losing faith in human intelligence, more and more...
I am losing faith in human intelligence, more and more...
2009年3月19日 星期四
金融危機是人類的轉機: 資源錯配
廿多年來，很多最聰明最能幹的人都在金融界工作，無他，因為人工實在不合常理地高。
如果你畢業一兩年就可以有4萬以上人工(每月，計入花紅)，對比全香港平家庭住戶收入中位數17250 HKD (2006年)，其實是非常高。 你要注意，家庭通常唔止一個人。
遠既唔講，講我做過既行業先。 我個人覺得如果一個聰明的人去做分析師或基金經理，完完全全係浪費人類既資源。 分析公司、股票，其實對社會、地球、世界都完全沒有貢獻，完全可以話係不事生產。 你分析得好又點? 間公司會變好咩? 科技會進步咩? 我覺得做M記絕對比做基金經理有意義。
情況就好似全個社會最聰明既人都做電影評論人，但只有無咁叻既人去拍電影一樣。根本就係資源錯配。 人都係一種資源，聰明、做得野既人更加少，咁浪費實在是一件錯事。
雖然係咁，我唔覺得做藝術和文學是無意義，因為唔係個個都要做農夫、工人先有意義。 文明既存在就係在於佢能夠養得起到一大班"不事生產"既人，例如藝術家，科學家，哲學家等，非洲就係因為個個都要去打獵，所以文明咁落後。
但係做金融行業既人實在太多太多，完全超出左應有的"勁人"人數。 (當然大家都有好多得把口，好笨又唔識野既人做銀行家，唔係都唔會有金融危機啦。)
小學開始都有咁既想法，所以現在金融行業抄晒D人，我一點都不覺得可惜。今次depression其實是非常好的一件事，唔應該悲觀。最好少後都唔會再有咁多人才去做金融業，我們將會有更好的明天。
如果你畢業一兩年就可以有4萬以上人工(每月，計入花紅)，對比全香港平家庭住戶收入中位數17250 HKD (2006年)，其實是非常高。 你要注意，家庭通常唔止一個人。
遠既唔講，講我做過既行業先。 我個人覺得如果一個聰明的人去做分析師或基金經理，完完全全係浪費人類既資源。 分析公司、股票，其實對社會、地球、世界都完全沒有貢獻，完全可以話係不事生產。 你分析得好又點? 間公司會變好咩? 科技會進步咩? 我覺得做M記絕對比做基金經理有意義。
情況就好似全個社會最聰明既人都做電影評論人，但只有無咁叻既人去拍電影一樣。根本就係資源錯配。 人都係一種資源，聰明、做得野既人更加少，咁浪費實在是一件錯事。
雖然係咁，我唔覺得做藝術和文學是無意義，因為唔係個個都要做農夫、工人先有意義。 文明既存在就係在於佢能夠養得起到一大班"不事生產"既人，例如藝術家，科學家，哲學家等，非洲就係因為個個都要去打獵，所以文明咁落後。
但係做金融行業既人實在太多太多，完全超出左應有的"勁人"人數。 (當然大家都有好多得把口，好笨又唔識野既人做銀行家，唔係都唔會有金融危機啦。)
小學開始都有咁既想法，所以現在金融行業抄晒D人，我一點都不覺得可惜。今次depression其實是非常好的一件事，唔應該悲觀。最好少後都唔會再有咁多人才去做金融業，我們將會有更好的明天。
2009年3月13日 星期五
Another Problem
| Amount in HKD' | |
| Quantity '000 | 240 |
| Retail | A |
| Wholesale | B |
| Sales | 71,874 |
| Retail | 59,770 |
| Wholesale | 12,104 |
| Cost of Sales | 27,979 |
Given:
wholesale price is 5/7 of retail price
Cost of each unit in wholesale and retail are the same.
Boss: What is the quantity sold in retail and wholesale??
Tips: It can reduced done to one formula.
連續兩日都遇到咁既數學難題....真係估都估唔到。
死等你重話學咁多數學，番工無用!!
Question of the Day
Yesterday I encounter this problem at work:
Boss: I want the break even analysis of all the shops in province A.
Me: Ok no problem, wait for my report.
I did finish it, but I used 2 extra hours to finish the whole thing.
See if you can solve this problem (without using goal seek function in excel):
(Those are not the real data, I just make them up.)
Each product sells for $ 105 (Unit Price)
Each product costs $ 30 (Cost)
China Value Added Tax of 17%
[The tax you pay is (gross sales - commission to mall) times 17%]
Shopping Mall get 24% commission from Gross Sales
Basic wage: 1080 , sales staff commission: 2.5%
Depreciation: 950
Other minor expenses: 1140
Office Expense: 3343
So... What is the break even level at the shop level? Company level?
I accept answer in excel or just in comments here. I want the actual formula or excel sheet, to show you did not just use the "Goal Seek".
First one with correct answer will be the winner.
Winner will get a special gift from me XD
.
Boss: I want the break even analysis of all the shops in province A.
Me: Ok no problem, wait for my report.
I did finish it, but I used 2 extra hours to finish the whole thing.
See if you can solve this problem (without using goal seek function in excel):
(Those are not the real data, I just make them up.)
Each product sells for $ 105 (Unit Price)
Each product costs $ 30 (Cost)
China Value Added Tax of 17%
[The tax you pay is (gross sales - commission to mall) times 17%]
Shopping Mall get 24% commission from Gross Sales
Basic wage: 1080 , sales staff commission: 2.5%
Depreciation: 950
Other minor expenses: 1140
Office Expense: 3343
So... What is the break even level at the shop level? Company level?
I accept answer in excel or just in comments here. I want the actual formula or excel sheet, to show you did not just use the "Goal Seek".
First one with correct answer will be the winner.
Winner will get a special gift from me XD
.
2009年3月12日 星期四
Stock are rising, money market is telling you otherise
It is not the first time the interest rate, or money market, tells a different story that is opposite the stock movement. Generally I trust the money markets and bond markets more than stock market. Stock market has more retail investors and they also tend to overreact a lot.
Libor Creep Says Credit Markets Risk Freezing on Distrust of Policymaking
While Citi say they have the best quarter since 2007, there are just so many tricks to "manage" your quarterly profit and Citi's previous quarters are not "great"anyways.
I have no clear view these few days, short term things are mixed. Medium term is still ....hopeless.
Libor Creep Says Credit Markets Risk Freezing on Distrust of Policymaking
While Citi say they have the best quarter since 2007, there are just so many tricks to "manage" your quarterly profit and Citi's previous quarters are not "great"anyways.
I have no clear view these few days, short term things are mixed. Medium term is still ....hopeless.
2009年3月11日 星期三
Global Warming requires urgent action
To keep neutral, today's is an article that is pro-global warming existence.
Ice caps are melting, animals are dying and our sea is becoming acidic. However, most people do not seem to care.
Climate-Change Urgency Stressed at Meeting of 2,000 Researchers in Denmark
Ice caps are melting, animals are dying and our sea is becoming acidic. However, most people do not seem to care.
Climate-Change Urgency Stressed at Meeting of 2,000 Researchers in Denmark
2009年3月10日 星期二
“Global Warming, Was it Ever Really a Crisis?”
“Global Warming, Was it Ever Really a Crisis?”
A three-day event billed as the biggest meeting of global-warming skeptics, McKitrick and colleagues are challenging the accuracy of long-range climate forecasts and published theory on the extent of warming as their contrarian views are shunned by corporate and political leaders, from the president to the head of U.S. utility Public Service Enterprise Group. -bloomberg
A great read, you should also see the PowerPoint from the presenters.
http://www.heartland.org/NewYork08/newyork2008-ppt.html
It is better to know the opposing view before believing in something.
A three-day event billed as the biggest meeting of global-warming skeptics, McKitrick and colleagues are challenging the accuracy of long-range climate forecasts and published theory on the extent of warming as their contrarian views are shunned by corporate and political leaders, from the president to the head of U.S. utility Public Service Enterprise Group. -bloomberg
A great read, you should also see the PowerPoint from the presenters.
http://www.heartland.org/NewYork08/newyork2008-ppt.html
It is better to know the opposing view before believing in something.
2009年3月9日 星期一
"Mark to Market" is an overstatment
Not long ago many companies, especially banks blame the mark to market accounting rules for the drop in their share price.
Now, even mark to market cannot reflect the price, when buyers are this scarce, each unit sold is one unit less demand. Imagine you hold 10 buildings in central, once you sell one, the demand contract so much that your other 9 buildings must suffer (in price). Adding to that there is certainly no "market" for many of the assets the financial companies are holding.
Aircraft mortgage, shopping mall in the middle of no where, real estate developer loan; what about a 30% discount? Do you want them? I know I don't.
I heard the Private Equity of Venture Capital industries have all kinds of "exotic" assets, I wonder how much demand they have now.....
There are so many potential problems that we haven't seen yet, the storm have just begun. The sky is dark, storm is forming, the dark riders will come and slaughter you all..... Well...you got the meaning...
Now, even mark to market cannot reflect the price, when buyers are this scarce, each unit sold is one unit less demand. Imagine you hold 10 buildings in central, once you sell one, the demand contract so much that your other 9 buildings must suffer (in price). Adding to that there is certainly no "market" for many of the assets the financial companies are holding.
Aircraft mortgage, shopping mall in the middle of no where, real estate developer loan; what about a 30% discount? Do you want them? I know I don't.
I heard the Private Equity of Venture Capital industries have all kinds of "exotic" assets, I wonder how much demand they have now.....
There are so many potential problems that we haven't seen yet, the storm have just begun. The sky is dark, storm is forming, the dark riders will come and slaughter you all..... Well...you got the meaning...
2009年3月6日 星期五
2009年3月5日 星期四
How to solve the housing crisis - my way
One in Five mortgage borrower is now in negative equity - meaning their even selling their house cannot pay for their borrowings. In some states (not all, many people misunderstand), once you transfer your house ownership to the lender, you will not be liable to pay the mortgage anymore.
Obviously this is not what the banks or mortgage lenders want to see, as this does not give them any cash at all! It is not easy to sell a house even at the "mark to market" price nowadays. Bush and Obama have encourage lenders to restructure their mortgage with the borrowers. Not wanting to lose their money, the lenders did as they were told, but they do it the same way that have caused the problem in the first place:
1. Delay payment now and pay back more later.
2. Lower interest rate now but higher rate later
3. A combination of 1 and 2.
Now, this type of arrangement have caused the sub prime bubble, and you expect it to solve the problem now? Have you learn anything from this crisis?
This is understandable, as people do not accept losses or failure easily. By delaying the payment, there is "hope" that it can be recovered in the future. It is the same mentality when your HSBC drop to below 50 and you think you can hold until it is 100 again.
What the lender need to do is the following:
Lender A owns a mortgage that is worth $100, but now the house is only worth $80.
Lender A sell the whole mortgage to hedge fund B (or Private equity) at $ 60.
Lender A write down the loss, Borrower now pay 40% less per month to Hedge fund B. (Reduction of principal) Borrower now only owes $60, not $100.
Government should award lenders who do this. This may cause a lot of lenders to go bankrupt, but it is the reality. Having a $100 mortgage that can never be repaid is only going to lengthen the problem. This can also help people to stay in their house and fulfill Obama's promise to help the people who are losing their houses.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aPdRXuqc58RU&refer=home
Decreasing the rate to 2% is not going to end it, only a reduction of principal can.
Let's see what they will do the next few months.
Obviously this is not what the banks or mortgage lenders want to see, as this does not give them any cash at all! It is not easy to sell a house even at the "mark to market" price nowadays. Bush and Obama have encourage lenders to restructure their mortgage with the borrowers. Not wanting to lose their money, the lenders did as they were told, but they do it the same way that have caused the problem in the first place:
1. Delay payment now and pay back more later.
2. Lower interest rate now but higher rate later
3. A combination of 1 and 2.
Now, this type of arrangement have caused the sub prime bubble, and you expect it to solve the problem now? Have you learn anything from this crisis?
This is understandable, as people do not accept losses or failure easily. By delaying the payment, there is "hope" that it can be recovered in the future. It is the same mentality when your HSBC drop to below 50 and you think you can hold until it is 100 again.
What the lender need to do is the following:
Lender A owns a mortgage that is worth $100, but now the house is only worth $80.
Lender A sell the whole mortgage to hedge fund B (or Private equity) at $ 60.
Lender A write down the loss, Borrower now pay 40% less per month to Hedge fund B. (Reduction of principal) Borrower now only owes $60, not $100.
Government should award lenders who do this. This may cause a lot of lenders to go bankrupt, but it is the reality. Having a $100 mortgage that can never be repaid is only going to lengthen the problem. This can also help people to stay in their house and fulfill Obama's promise to help the people who are losing their houses.
http://www.bloomberg.com/apps/news?pid=20601213&sid=aPdRXuqc58RU&refer=home
Decreasing the rate to 2% is not going to end it, only a reduction of principal can.
Let's see what they will do the next few months.
2009年3月3日 星期二
Ponzi Scheme and Modern Banking
Ponzi scheme has been a popular term ever since the Madoff incident. Madoff cheated investors by telling them he is making a moderate return every year and repay earlier investors with the money invested by later investors. The fact that it takes so long before it was discovered is worth a review.
The basic principle of modern banking involve getting deposits from people and institutions and then keep just a fraction of that as reserve and lend out the rest. The is called "Fractional Reserve Banking", which is used by all the banks on earth today. This practice is surprisingly new, only started around 200 years ago in the bank of Amsterdam. Before then, banks are the "guardian of gold";they keep full reserve and charge a fee for safekeeping your wealth.
In its simplest form, fractional reserve banking is almost an embezzlement. This system rely on the the "faith" that depositors will not get back their money at the same time and future depositors will refill the bank's reserve. That is why we need a central bank in case there are "bank runs". Modern bank, like the Ponzi scheme, rely on the fact that the chance of mass withdrawal is extremely small.
When you think of it this way, you really should be worried about your deposits. It is a gigantic Ponzi scheme - like operation, where most of your money isn't even there when you need it.
This fractional reserve system has many implications, as it alters the price of money (interest rate), the relationship between borrower and lender and inevitably contribute to the up and downs of the economy. This kind of practice systematically leads to over investment in good times and rapid monetary contractions in bad times; as the interest rate is now lower than the "natural" rate in the full reserve system. You will definitely charge higher interest rate than now if you must lend to the borrowers directly.
This system is also one of the causes of inflation, as money can be "created" in a fractional reserve system and the total amount of money in the economy can go faster than the actual increase of productivity.
Like all other bubbles, this kind of system may burst one day. I say "may be" because a bubble may never burst when everyone believes in it. So, next time when you see some wise old man, saying "all bubbles must burst" after the fact, you can assure that is bullshit, as we have a monetary bubble for 200 years and it never burst. Our governments actually support it!
This may all sound boring and useless, but those who understand from the basic concepts are much more reliable than people who only touch the surface.
The basic principle of modern banking involve getting deposits from people and institutions and then keep just a fraction of that as reserve and lend out the rest. The is called "Fractional Reserve Banking", which is used by all the banks on earth today. This practice is surprisingly new, only started around 200 years ago in the bank of Amsterdam. Before then, banks are the "guardian of gold";they keep full reserve and charge a fee for safekeeping your wealth.
In its simplest form, fractional reserve banking is almost an embezzlement. This system rely on the the "faith" that depositors will not get back their money at the same time and future depositors will refill the bank's reserve. That is why we need a central bank in case there are "bank runs". Modern bank, like the Ponzi scheme, rely on the fact that the chance of mass withdrawal is extremely small.
When you think of it this way, you really should be worried about your deposits. It is a gigantic Ponzi scheme - like operation, where most of your money isn't even there when you need it.
This fractional reserve system has many implications, as it alters the price of money (interest rate), the relationship between borrower and lender and inevitably contribute to the up and downs of the economy. This kind of practice systematically leads to over investment in good times and rapid monetary contractions in bad times; as the interest rate is now lower than the "natural" rate in the full reserve system. You will definitely charge higher interest rate than now if you must lend to the borrowers directly.
This system is also one of the causes of inflation, as money can be "created" in a fractional reserve system and the total amount of money in the economy can go faster than the actual increase of productivity.
Like all other bubbles, this kind of system may burst one day. I say "may be" because a bubble may never burst when everyone believes in it. So, next time when you see some wise old man, saying "all bubbles must burst" after the fact, you can assure that is bullshit, as we have a monetary bubble for 200 years and it never burst. Our governments actually support it!
This may all sound boring and useless, but those who understand from the basic concepts are much more reliable than people who only touch the surface.
2009年3月2日 星期一
英揭咳藥無效且危害兒童
http://hk.news.yahoo.com/article/090301/3/axky.html
其實不嬲傷風、感冒、咳...都係要等佢自已好番。 好多藥都只係有"安慰劑"既效果。
咳同傷風其實都係身體有病毒或細菌既"反應"，並唔係病本身。的確係有科學根據既藥去阻止這類身體既"反應"，不過唔會醫得好，也唔會係果類成藥。
不過感冒藥、咳藥咁多錢賺，實大把人會被騙。 唉.....真係底能。
其實不嬲傷風、感冒、咳...都係要等佢自已好番。 好多藥都只係有"安慰劑"既效果。
咳同傷風其實都係身體有病毒或細菌既"反應"，並唔係病本身。的確係有科學根據既藥去阻止這類身體既"反應"，不過唔會醫得好，也唔會係果類成藥。
不過感冒藥、咳藥咁多錢賺，實大把人會被騙。 唉.....真係底能。
訂閱：
意見 (Atom)
