After a brief hiatus from an already haphazard blogging routine, I thought I’d post this journal entry type commentary on a few things relevant to the title for both of my regular readers.
Firstly, I confess to having been heavy into the data porn lately mining the public web resources of officialdom and unofficialdom around the planet for all things relevant and interrelated on the players, actors and agents that are the Financial Universe. Here’s a sneak peak of the infographic currently under construction …
Doing justice to the sheer magnitude of 1) the outright volume of information and 2) the interrelated dependencies of it all has created a monumental construct of ultimately very simple bilateral exchanges. The extent of my imagination has been discovered in piecing together the available data on global participants of the only game on in town that matters.
On other news –
a) Recently, the Euro ESM = European Stability Mechanism has been fabricated to replace the EFSF (European Financial Stabilisation Mechanism). Which is just as well since ESM is far more environmentally sustainable, that additional character was clogging up the misspelled acronym soup of analysts around the planet. But seriously, ESM? Its derivation can be inferred from such history making classics as the US ESF (Exchange Stabilisation Fund) from 1935, which was based on the UK EEA (Exchange Equalisation Account) of 1933. Since both of these earlier models did exceedingly well in (not) tempering the global market volatility, the IMF was invented in 1944 to act as the agency of first resort in dispersing funds in units of SDR’s (Special Drawing Rights) to delinquent serial defaulting sovereigns at supposedly bargain basement rates of interest. Confused? You should be, since none of these agencies have actually accomplished anything. Ignore the bits around 1972 when the gold window was closed and the USD was forevermore forbidden to be legally redeemed into the useless barbaric element.
So back to the ESM. Don’t panic! The resounding success (not) of the prior 20th century incantations EEA, ESF and the IMF bodes well for forecasting the impact of the latest model, the ESM. Simply put, as the previous fabrications amounted to zero, so too will the latest one. Nothing to see here, move along.
b) Can the American visitors to this site please spread the word? There has been an International Units of Measures and System of Units for some time now. Cap ‘M’ is for millions, not ‘mm’ or ‘MM’. Billions is abbreviated cap ‘B’ and is precisely 1000 Million, not a million million (and no, not MM either). At the risk of confusing you, it is scientifically ‘Giga’ with cap ‘G’ (but don’t go calling them Gillions now). You should all know what a Trillion is by now, given the record breaking run of USD$Trillion deficits. Let us know what comes after that when using $Trillions is no longer sufficient.
Please start to use international standard nomenclature for the units of measure. Thanks. (we’ll let the whole imperial/decimal thing fly for now)
c) My favourite Martian, Mr Krugman uses that mass of grey matter that earned him some Nobel booty to say that austerity doesn’t work. Yet apparently the alternative of issuing debt at 7-8% p.a. (and much, much higher) in an environment of 1-2% GDP (non)growth (being generous) is economagically sound advice. The thinking there must be that since debt doesn’t matter, neither does the interest repayment. The economagic that is the mythical money multiplier has him convinced that the $200Bn of debt at 8% interest generates much more that the 8% p.a. in new revenues that would be wisely and miserly saved for said repayment, all done in the absence of any previously demonstrable wisdom and meaningful growth. Then sometime before the maturity date, there is accumulated somewhere else the original $200Bn principal. Call me stupid, but the idea of necessarily issuing new debt at 8% creates clinical symptoms that are eerily similar to austerity, once the endorphins from the initial issuance dissipate and the transfer mechanism from those who know not to those who know is completed.
d) Rebranding old labels. “Big data” is just another rebranding of “relational databases” ala SQL, Delphi and the Dbase sequels. “Cloud, iCloud etc” is otherwise known as the internet. With the exponential explosion of internet use and data mining intersecting waning revenues, they had to come up with a new stage show for an old routine. Like that is not a universal theme ….
Anyhow, stay tuned for the wall chart infographic that is our local universe.