Costliest Natural Disasters

Just putting the recent Japanese disaster into perspective from a financial POV, Hurricane Katrina was roughly 2/3 as bad in terms of overall economic loss but at least a much larger portion of the damage was insured; unfortunately for Japan they get both 1st and 2nd place in this sadistic competition.

Of a cruel nature

We all know that Japan suffered disaster a few weeks ago and many people have died (almost 15 000 confirmed and a further 15 000 missing) but how severe is the nuclear fallout from it going to be? Well earlier the disaster rating of the Fukushima I plant was upped to level 7 which is the highest possible level rivalled only by the Chernobyl incident in the history of nuclear catastrophes. Let's hope there aren't too many babies with multiple heads or missing body parts being born...

The Government Won't Explode

Well, not for another week at least. Much tension has been created by the inability of politicians to decide on how the U.S. budget will be determined; people were worried they were gonna lose their jobs and who knows what else. In reality, a government shutdown isn't a big deal for most people, but for many of those with jobs in important public sector services such as caring for national parks, having a paycheck delayed even for a few days can make every day life extremely frustrating. Not being able to pay the mortgage, buy groceries or pay other bills would be devastating, but fortunately an extenstion was placed on the issue and hopefully a resolution will be found soon. Most people weren't even sure what exactly a "government shutdown" meant and it was definitely blown out of proportion by the media, I'm here to tell you not to worry because the government has your best interest at heart and you shouldn't worry :)

Just kidding, don't trust anyone... no seriously, don't!

A Friend in Need

The top part represents the total European Bailout Funds available currently and who is providing them, it is interesting to note that a large portion is provided by countries outside of Europe (USA + Japan at roughly €70 billion). Then the 2nd part shows how that money will be alocated, it seems they are estimating Portugal's needs to be higher than Ireland's... I guess time will tell.

100 Followers!

Just wanted to thank everyone for the support, it's been a great ride so far and I couldn't have done it without you all! I hope you continue to enjoy my posting! In the meantime enjoy this picture =)

Bailouts, Bailouts everywhere.

Portugal has confirmed that it will become the 3rd European country to be bailed out in recent times. Greece started the new trend (well, ignoring the U.S. for a moment) followed late last year by Ireland, and now I wonder how many other EU members are contemplating asking for a handout.


In the middle of last year the euro-zone bloc established a €440 billion fund, called The European Financial Stability Facility (EFSF), to assist member countries in financial strife. Now whilst this is a great idea in times of crisis, it should be questioned whether countries, particularly smaller ones that feed off EU membership will become more and more careless in regards to the management of their economies, if they know they can factor in this fund when deciding what direction to take. Now it should be noted that Prime Minister Sócrates resisted a bailout for almost a year and also that Portugal's monetary amount, whilst not finalised in total yet, will almost certainly not reach the levels of the previous two; nevertheless, a bailout is a bailout.


This further brings attention to the fact that EU member countries are largely unable to solve their own problems through currency manipulation due to sharing a central bank with all their buddies. Whether this is a good or bad thing remains to be seen, however there is a reason the UK has chosen to continue using their own currency and this is definitely an important factor. I guess as long as the majority of the largest member countries are still able to help out the little ones without getting too pissed off, it should be alright. Will be interesting to see what happens if a powerhouse like Germany or France gets in trouble and needs a bailout... who will be there to save them? Obviously nobody wants to think of this scenario in fear of sounding pessimistic, but if it happened to the largest economy in the world it can happen to anyone.

Word Association for Morons

Earlier today I was doing some uni work which included examples of word association such as:

'Ice cream is associated with love and affection. It derives particular potency from childhood memories, when it was given to a child for being “good” and withheld as an instrument of punishment.'

'Power tools are a symbol of manliness.  They represent masculine skill and competence and are often bought more for their symbolic value than for active do-it-yourself application.'

Anyway you get the idea, after a while it became ridiculous beyond belief, check this one out:

'An expression of femininity and motherhood, baking evokes pleasant nostalgic memories of the odors pervading the house when one’s mother was baking. To man, a woman is subconsciously and symbolically going through the act of giving birth when baking a cake, and the most fertile moment occurs when the baked product is pulled out of the oven.'

Like, is this a joke? No, really? The people that write nonsense such as that second sentence must be either completely detached from reality, or are simply attempting to throw around pseudo-scientific garbage in an attempt to make people think they're smart. Well, to the writer of my marketing textbook, you aren't fooling me! I guess I only have myself to blame for this poor elective choice, but at least the content is easy so more time and effort can be directed towards important things such as writing this blog =P

Socially Liberal, Fiscally Conservative

As a Fiscal Conservative and Social Liberal, you dislike heavy government. What really gets you going, however, is government waste. You would like to see people responsible for failed government projects.

You recognize that all problems cannot be solved simply with the hammer of free enterprise. Some things do not conform well to “for profit” models if they are to deliver assistance to all. You believe it is government’s job is to protect the people through regulations that prevent excessiveness by corporations abusing their positions of power to the detriment of the people.

Socially, you believe strongly in the separation of state and religion. You believe in equal rights, are pro-choice when there is a choice to be made, and you support the idea of social safety nets that maintain the stability of society. You disagree with prohibition when it doesn’t work and strongly feel that decisions should be made logically and on the basis of facts, not emotions or faith.

Just summarized that from where I was reading, interesting and easy to agree with on most points. What do you think?

Value

Why do things cost the amount they do? Why can you buy a pair of socks for $1 and a basically identical pair with a fancy brand name for $20 or more? Is the 2nd set of socks really 20 times better? The answer will almost certainly be no. For the same reason that art can fetch millions of dollars but at a different point in time will be worth less than the canvas it is painted on, and that is perceived worth in relation to supply and demand factors. The fact that people are willing to spend money for an idea/to gain a particular status is the reason why mac computers are still popular even though they are overpriced in terms of features when compared to a regular pc.

Immortality

A scary concept. I often wonder what it would be like to live forever, how long would it take to get bored to the point of wanting to kill yourself? Perhaps when humans eventually die off as a species and there's nobody to even interact with, or maybe even much earlier than that...  Would life even be worth living if other people around you weren't able to live on? Seeing your friends die, then your children, grandchildren etc would be incredibly painful and it wouldn't take long before you felt as if everything you did was completely pointless. I guess in the grand scheme of things anything you do is pointless anyway but I'd rather live a life absorbed in the rush of doing something rather than giving up completely.

If this post came off as being gloomy and/or depressing I apologize profusely, it was not my intention; the topic just happened to be on my mind for some reason. The question today for you all is if you were hypothetically given the chance to become immortal, would you? Or is it worse than death? In this scenario you would be not only invincible but also would retain your youthfulness so as to not age physically or develop stuff like Alzheimer's.

Derivatives

Note: Just to sort out any confusion, I'm referring to the financial kind not those found in calculus.

My cousin and I have been curious as to what these are ever since seeing that Michael Moore doco 'Capitalism: A Love Story'. Now, whilst I don't really respect him as a film maker due to the incredibly biased nature of everything he makes, this doco got us thinking about the financial system in general and how it works. There's a hilarious scene where he asks people - including a Harvard Prof. of Economics - to explain what a derivative is, and even though (we can assume) they all know, they can't seem to be able to explain it. This set us off on our own quest to find out what they are exactly, once again wikipedia proved useful but it's hard to get an idea of what they are without being exposed to examples. In summary, they are a type of alternative investment and are generally traded in connection to an underlying asset in various ways. Now I want to know what you guys think of the financial system in general - is it too complicated/boring for the average Joe? Do you have any stocks of your own? Any other thoughts welcome also.