Had a good think about the art market. Time to sell.
It is clearly in an unsustainable bubble, with high prices for stuff often with low intrinsic value. It seems to be sustained mainly by the desire to avoid tax, and as globalisation catches up over the next decade, art prices will inevitably start to fall. Once they start, they will drop very very quickly. The last people holding the items will often be left with something that still looks pretty but is now worth a fraction of what they paid.
Think dotcom. Everyone knew it would collapse, but everyone kept buying for ages, and most gained because some sucker would always buy at an even sillier price tomorrow. No-one knew exactly when it would happen till it did, but one day, the price increase cycle stopped, followed by a huge collapse. The last one holding the dotcom stock lost his shirt.
Don't be the last guy. Don't get burned. Sell now before the collapse. If you like it, sell it now, buy it back later at a pittance.
Monday, 30 November 2009
Friday, 20 November 2009
cake glue
No interest in developing this myself, so any culinary entrepreneurs out there who fancy having a go, be my guest (and send me a nice cake as a reward). I think there is some real potential for a paste that allows cooks to glue together parts of cakes that have fallen apart. It is quite common for cakes to break during kitchen processing, so a simple paste that allows people to stick them back together, without of course changing the taste, could be an essential item in every home cook's baking cupboard.
It could be a neutral-tasting paste that the cook spreads on both halves and then just puts them back together. Or it could use the remaining cake mix as a base, with an added agent to cause it to 'self cook' over an hour or so using the remaining heat in the cake.
Being able to salvage not just the cake, but also the reputation of the cook, would make this a valuable tool.
It could be a neutral-tasting paste that the cook spreads on both halves and then just puts them back together. Or it could use the remaining cake mix as a base, with an added agent to cause it to 'self cook' over an hour or so using the remaining heat in the cake.
Being able to salvage not just the cake, but also the reputation of the cook, would make this a valuable tool.
Tuesday, 17 November 2009
Employment Insurance or Unemployment Insurance
Unemployment Insurance or Employment Insurance as it is called in some countries provides temporary financial assistance for unemployed citizens while they look for work. In times of distress such as the global financial crisis when people get laid off, this is an effective way to protect people financially, well to an extent at least.
At the same time this does not promote or encourage unemployment among people.
HOW IT WORKS?
This insurance is not applicable for people who have not started working yet. This only applies if you were working as an employee.
Eligibility
Generally you need to be ‘qualified’ to be insured. Qualification includes
Insurable hours - Continuous period of work for a certain minimum hours (eg. 52 weeks)
Unemployment – you need to be without work and without pay for some minimum days (eg 7 days)
No fault – you should have been fired for no fault of yours and should not have left the job without any ‘valid’ reason.
Insurance Premium:
A portion of salary (e.g. 2%) is deducted with your paycheck. Your employer contributes a certain percentage (generally twice your contribution) and deposits this with the government.
Payback:
When you get laid off, depending on how long you worked, your last drawn salary and circumstances which led you to be unemployed, you can be compensated from basic needs to up to 80% of your last drawn salary for a certain period (e.g ranging from 20 to 50 weeks).
When you get another job, you just need to inform the insurer (the government agency) about your employment and they stop crediting the amount to your bank account.
How much will you receive?
The basic benefit rate ranges from 50% to 80% of your last drawn salary (or in many cases, 55% of your average insured earnings) with a maximum yearly cap. Generally this is a taxable income.
Most people are protected by this insurance while some others make arrangements with their employers and enjoy long term unpaid vacations as their finance needs are taken care of by the employment insurance paychecks they claim. They can get fired and re-join the same employer after the vacation.
Reagrdless, this works well in times of distress so that people can protect themselves financially if they are laid off, need to upgrade their skills or need to leave their jobs due to maternity reasons.
Vulture Funds
Vulture Funds are financial organizations/private equity firms that seek to invest in debt issued by a company (or in case of a sovereign debt, a country) that is weak and dying. They are also called “Distressed Debt funds”.
They buy up sovereign debts of poor nations that are assumed default or near bankrupt when at time the debt is just about to be written off and eventually sue the debtor for the full value of the debt plus interest in the future. The full value is usually 10 times the original paid up debt. Alternatively, they hold on to these investments (if the issuer doesn’t default) and sells them when the prices skyrocket.
So these vultures prey upon the debt cancellation measures received by the poor companies/nations by purchasing their debt at a discount (sometimes as low as 20%) and redeeming it at a premium (including interest). They provide a useful alternative for investors who are unable to follow up upon their defaulted debt and in turn are certain to face financial ruin if their debtors default completely. i.e. considering a realistic scenario distressed debt investing is a risky business which reflects two sides of a same coin; on one side a vulture fund can have adverse effects on its investment if the debtor continues to default and in turn may end up netting a zero value, but on the other side if the debtor has considerable assets to liquidate the vulture funds can make millions. They have tasted success quite a number of times in the past against countries like Argentina and Peru. So these are risky funds with the potential to pay off huge returns.
How they Operate?
These funds are private equity / Hedge Funds and are thus not available for individuals to invest. Vulture Funds raise most of their money through legal action in the US and UK courts, They frequently engage in litigation in these courts of rich nations to obtain judgments against the debtor and then attempt to attach the government’s assets abroad.
These funds buy commercial debt knowing fully well that multilateral debt relief availed by HIPC (Heavily Indebted Poor Countries) put them in a better position to pay up and even so they can be persuaded to settle the amount with them. As spoken earlier about the risk faced by distressed debt investors, this so called default risk is virtually nullified when political influence possessed by them is greater than the nation they are suing. Since most of their legal actions prevail in US and UK courts, lobbying and political influence hold good, and many Vulture Fund CEO’s possess links with the top officials in US as well as in UK. Political influence and lobbying plays a major role in assisting Vulture Funds in their dubious tactics in claiming millions from litigations in foreign courts. A recent report states that “at least 54 private companies are known to have taken legal action on 12 of the world’s poorest countries for claims amounting to $1.8 bn”
Source:
1. http://en.wikipedia.org/wiki/Vulture_fund
2. Prometheus Newsletter, (Author: Srikanth Srinivasan) Alliance Business School, Bangalore, India
They buy up sovereign debts of poor nations that are assumed default or near bankrupt when at time the debt is just about to be written off and eventually sue the debtor for the full value of the debt plus interest in the future. The full value is usually 10 times the original paid up debt. Alternatively, they hold on to these investments (if the issuer doesn’t default) and sells them when the prices skyrocket.
So these vultures prey upon the debt cancellation measures received by the poor companies/nations by purchasing their debt at a discount (sometimes as low as 20%) and redeeming it at a premium (including interest). They provide a useful alternative for investors who are unable to follow up upon their defaulted debt and in turn are certain to face financial ruin if their debtors default completely. i.e. considering a realistic scenario distressed debt investing is a risky business which reflects two sides of a same coin; on one side a vulture fund can have adverse effects on its investment if the debtor continues to default and in turn may end up netting a zero value, but on the other side if the debtor has considerable assets to liquidate the vulture funds can make millions. They have tasted success quite a number of times in the past against countries like Argentina and Peru. So these are risky funds with the potential to pay off huge returns.
How they Operate?
These funds are private equity / Hedge Funds and are thus not available for individuals to invest. Vulture Funds raise most of their money through legal action in the US and UK courts, They frequently engage in litigation in these courts of rich nations to obtain judgments against the debtor and then attempt to attach the government’s assets abroad.
These funds buy commercial debt knowing fully well that multilateral debt relief availed by HIPC (Heavily Indebted Poor Countries) put them in a better position to pay up and even so they can be persuaded to settle the amount with them. As spoken earlier about the risk faced by distressed debt investors, this so called default risk is virtually nullified when political influence possessed by them is greater than the nation they are suing. Since most of their legal actions prevail in US and UK courts, lobbying and political influence hold good, and many Vulture Fund CEO’s possess links with the top officials in US as well as in UK. Political influence and lobbying plays a major role in assisting Vulture Funds in their dubious tactics in claiming millions from litigations in foreign courts. A recent report states that “at least 54 private companies are known to have taken legal action on 12 of the world’s poorest countries for claims amounting to $1.8 bn”
Source:
1. http://en.wikipedia.org/wiki/Vulture_fund
2. Prometheus Newsletter, (Author: Srikanth Srinivasan) Alliance Business School, Bangalore, India
I think Murdoch is wrong to charge for web content
Apparently, a study by Boston Consulting Group has shown that people are willing to pay for news on news sites. Rupert Murdoch plans to introduce fees on News Corporation sites, so such a study appears at first glance to offer hope for his model. But I think even a slightly deeper glance suggests that would be a strategic error.
Like many people, I read a good selection of newspapers every day. Sometimes I buy one or two, but I always read a few on-line. To date, even though I was among the first web users, and have spent thousands on retail sites, I have still never spent a penny on web content. If News Corporation starts demanding a fee to read the Times, I'll just abandon it and carry on reading the Guardian and Telegraph. I pay for Sky TV, but I just don't think of that in the same way as I do web content.
I think the Guardian and Telegraph sites offer a good model for the future of news-sites: professional journalists starting the ball rolling and stimulating numerous bloggers and contributors to add their comments to cover other angles.
Charging for some sites will concentrate advertising revenue on the rest. As Murdoch points out, there is only so much advertising revenue to go round so removing some of his own titles from the pool will help. The others will get a larger share of the advertising market, survive well and retain influence, while the Murdoch sites will probably end up with lower overall revenue, and much less influence.
Both kinds of site will soon offer personally targeted adverts, and these will pay more lucratively. The loyalty gained by allowing readers to contribute their own comments, read by a decent audience, will make them more sticky, and more aligned with the culture of the paper they contribute too, increasing both its marketing and political influence. Advertising will then be even more valuable on the freebies, so they will attract even more of it. News Corporation will see its profits fall and its political influence decline.
Then again, Murdoch became a rich man by knowing what will sell and for how much. Maybe he's right and I'm wrong. Time will tell.
Optional spend is key to recovery
The recession will hit profits at easyJet, my favourite airline: http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article6919684.ece
No big surprise, many people are flying less and are more price sensitive. It's good that they are surviving at all. They blame rising unemployment and cost pressures for their expected profit drop in the months ahead, but one of the main problems is that flying is one of the easiest areas to reduce expenditure. Travel bans on staff in many companies appeared early in the recession, and many are still in place. Conference businesses are seeing large drops in attendance too, since it is easy to abort conference attendance when money is scarce.
Businesses that depend on optional expenditure are mostly the first to suffer and the last to recover in a recession. There are notorious exceptions of course. Providers of small luxuries benefit as people opt for small treats, and takeaway restaurants benefit at the expense of more expensive sit-in restaurants. But areas like holidays and conference trips offer big financial savings at low emotional cost, so are attractive targets for cuts.
There are many areas that indicate the start of recovery, such as manufacturing equipment sales and retailing. The sign that recovery is well under way will be when the markets for airlines and conferences pick up. That shows that people and companies are happy to loosen their purse strings for business-as-usual.
No big surprise, many people are flying less and are more price sensitive. It's good that they are surviving at all. They blame rising unemployment and cost pressures for their expected profit drop in the months ahead, but one of the main problems is that flying is one of the easiest areas to reduce expenditure. Travel bans on staff in many companies appeared early in the recession, and many are still in place. Conference businesses are seeing large drops in attendance too, since it is easy to abort conference attendance when money is scarce.
Businesses that depend on optional expenditure are mostly the first to suffer and the last to recover in a recession. There are notorious exceptions of course. Providers of small luxuries benefit as people opt for small treats, and takeaway restaurants benefit at the expense of more expensive sit-in restaurants. But areas like holidays and conference trips offer big financial savings at low emotional cost, so are attractive targets for cuts.
There are many areas that indicate the start of recovery, such as manufacturing equipment sales and retailing. The sign that recovery is well under way will be when the markets for airlines and conferences pick up. That shows that people and companies are happy to loosen their purse strings for business-as-usual.
Saturday, 14 November 2009
Personal carbon allowance will damage the environment
According to the Telegraph, Lord Smith of Finsbury, head of the Environment Agency, will recommend that everyone in the UK be given a personal carbon allowance, and penalised if they go beyond it:
http://www.telegraph.co.uk/earth/environment/carbon/6527970/Everyone-in-Britain-could-be-given-a-personal-carbon-allowance.html
Global warming is a problem that we must deal with, and scientists and engineers are making good progress both in understanding more of the science and figuring out mechanism to deal with it. The science is far from complete, but we know that although CO2 is a cause of warming, it is by no means the only one, and many scientists think it is far more appropriate to tackle other warming agents such as methane first, and making early impacts at much lower costs.
If we can't develop technology fixes to the problem, and consequently have to use solutions that depend on everyone changing their lifestyles, we need to ensure social cooperation. This requires that such changes be party-politically neutral. Solutions such as personal carbon allowances provide fuel to accusations that some green policy is just thinly veiled socialism, and are guaranteed to alienate those people who believe that personal effort should be rewarded by expectations of higher social status or comfort. We use the tax system to redistribute wealth, but we still accept that even after some distribution, people who earn more should be able to buy more, at least once they rise above dependence on welfare. We do not expect everyone to have the same cash allowance to live on, or insist they all live in the same sized houses, or eat the same amount of food, so why give everyone the same carbon allowance? It makes no sense except as a means of social levelling.
If we were to impose a personal carbon allowance that covers flying and other transport use, many people such as business executives would not be able to make their contribution to the economy without suffering personal hardship. Business will suffer, the economy will suffer and we will be less able to afford to look after the environment. So such a policy will damage the environment, not benefit it as it pretends to do.
We need to protect our environment, so we need good science, and we need to develop good technology based on that science. We will also need social cooperation right across every part of society. We must therefore reject environmental policy that favours one social group over another. Whatever we think of making society more socialist or capitalist, we should pursue those goals independently of protecting our environment or we will all suffer.
http://www.telegraph.co.uk/earth/environment/carbon/6527970/Everyone-in-Britain-could-be-given-a-personal-carbon-allowance.html
Global warming is a problem that we must deal with, and scientists and engineers are making good progress both in understanding more of the science and figuring out mechanism to deal with it. The science is far from complete, but we know that although CO2 is a cause of warming, it is by no means the only one, and many scientists think it is far more appropriate to tackle other warming agents such as methane first, and making early impacts at much lower costs.
If we can't develop technology fixes to the problem, and consequently have to use solutions that depend on everyone changing their lifestyles, we need to ensure social cooperation. This requires that such changes be party-politically neutral. Solutions such as personal carbon allowances provide fuel to accusations that some green policy is just thinly veiled socialism, and are guaranteed to alienate those people who believe that personal effort should be rewarded by expectations of higher social status or comfort. We use the tax system to redistribute wealth, but we still accept that even after some distribution, people who earn more should be able to buy more, at least once they rise above dependence on welfare. We do not expect everyone to have the same cash allowance to live on, or insist they all live in the same sized houses, or eat the same amount of food, so why give everyone the same carbon allowance? It makes no sense except as a means of social levelling.
If we were to impose a personal carbon allowance that covers flying and other transport use, many people such as business executives would not be able to make their contribution to the economy without suffering personal hardship. Business will suffer, the economy will suffer and we will be less able to afford to look after the environment. So such a policy will damage the environment, not benefit it as it pretends to do.
We need to protect our environment, so we need good science, and we need to develop good technology based on that science. We will also need social cooperation right across every part of society. We must therefore reject environmental policy that favours one social group over another. Whatever we think of making society more socialist or capitalist, we should pursue those goals independently of protecting our environment or we will all suffer.
Saturday, 7 November 2009
Free paper: Ten top attributes for business survival
A new report listing the top ten attributes for business survival has just been published by Ian Pearson and Simon Branston. it can be downloaded free of charge from http://futurizon.com/articles/tentopattributes.doc
Tuesday, 3 November 2009
Dartford Toll, we'd all be better off without it.
We just got back from a business trip which involved going via Gatwick, and hence going both ways through the Dartford Crossing. We had a 7 mile traffic jam going and a 4 mile jam coming back. There was no accident, that was all caused by the toll points. So, 11 miles of traffic jam to collect £6 from each car. On one hand, that's a lot of £3s so a large amount of cash. On the other hand, that £6 into one coffer caused two taxpayers to wait 45 minutes each, i.e. 90 taxpayer minutes. By any standards that is a low return, it is only about minimum wage. And yet the taxpayers in the cars mostly earn more than minimum wage (they drive cars). So on balance, the economy loses. As a nation, we would be considerably richer if we just abandoned the toll and let everyone use the crossing for free. We would spend less time in traffic jams, make less CO2 and less pollution, suffer much less stress and have a higher quality of life, and still be richer.
The Dartford toll makes no economic sense and should be stopped.
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