Monday, December 23, 2019

Gambling Harm Unawareness Weeks

I passed a betting shop a few weeks ago and saw a notice that said it was Gambling Harm Awareness Week. I just googled it and it says "The week is designed to encourage community discussions about why gambling harm matters. Harm from gambling isn't just about losing money."

All well and good, but Gambling Harm Awareness Week suggests that there are 51 unawareness weeks in the year where a gambler can do what he or she wants in blissful ignorance.

Maybe that is a bit harsh, but a betting shop advertising to be aware of the damage that gambling can cause? Come on!

Meanwhile, my bank interleaved a little graphic on my phone app to warn me about gambling. I don't gamble, but logic says there must be a lot of bank customers who gamble or the bank would not put out such a warning.

Tuesday, December 17, 2019

Choosing a company

Choosing a company to work in is fraught with problems for some people and as easy as falling off a log for others. So for those who have trouble falling off logs, here is the definitive guide to which company to choose.

Choose the one with people you like to work with. Of course you will be pulled towards working with the company that has the best career advancement opportunities, or the best health-care or pension plan, and they are important, but the most important thing - the one that will stand the test of time - is to choose to work with people you like to work with.

I don't recommend that you try to characterize these people. I don't think it pays to say to yourself that you want to work with nice people, or kind people, or honest people, though these might be exactly the qualities you find in the people you like to work with.

And I don't think it pays to want to work with fast people, or racy people, or people who are 'going somewhere', because you've got to work with them - and if you don't like working with them you are going to spend a lot of energy compensating for that fact.

And when all the reasons for you becoming an engineer rather than a painter or a chef have faded into the distance, you will still be working, then that is the time know - on your mid-morning walk from your desk or bench to the coffee machine - that you like to work with these people.

Why the economic downturn is good for the environment

In conversation with friends recently I've been saying that the economic downturn could be the best thing that has happened for the chance to stop the destruction of the environment.

I want to take a moment to say that there is a tremendous danger in arguing that the reason to stop polluting the Earth is to prevent the kinds of catastrophe that global warming is likely to bring about. Of course that is a very potent reason.

But let us suppose that someone came up with a sky-scrubber that sat ten miles up in the atmosphere and pulled all the hydrocarbons and excess CO2 out of the system. Let us suppose it was up there, chugging away and cleaning up the mess. Would that be a reason to treat the Earth like a toilet and keep on pumping rubbish into it?

No it wouldn't.

Treating the Earth with respect requires no more reason than a tree needs a reason to be there and to go on growing.

Having got that out of the way, I have been arguing that the economic downturn (a phrase I prefer to 'going off a cliff') presents the best opportunity we could hope for in order that responsible government would have the power to force big business to clean up its act.

And big business is more likely to be in a frame of mind to listen, quite apart from being weak and having to listen.

Psychologically, when you are running at 100 miles per hour, making money and the world is full of smiles, you are least likely to listen to that still small voice inside telling you that you are destroying everything around you.

But when things turn bad, you are more likely to listen.

Which brings me to the report by Reuters and the Wall Street Journal where President Obama is said to require the automakers to build a ‘company of the future' with clean and energy-efficient vehicles as a condition of giving financial aid.

The political administration would have had a much harder time bringing this about if everything business was doing well.

And this carries into every other field where government is strong. This decade could be just what is needed for the tipping point to tip the right way.

Purchasing Power Parity and value of the Chinese Renminbi

The sentence that I find most interesting in the following report from Bloomberg is where Mr Geithner is reported as saying

“We welcome China’s fiscal measures and continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the Renminbi,”

I'd like to know more about how that works. And I'd like to know how China is supposed to have been keeping the value of the Yuan low - which it has been accused of doing. Not that I am saying it has not done that, or that I am casting doubt on its ability to do that. I'd just like to know how a country does that.

There is a Wikpedia article on the subject of purchasing power parity.

The opening paragraphs of the article state that:

The purchasing power parity (PPP) theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the theory states that, in ideally efficient markets, identical goods should have only one price.
This purchasing power exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. 

As the article says, and quite rightly it seems to me, PPP is based on the notion that goods have equal value in the eyes of the population in the countries being compared. And this is clearly not the case in countries as different as say China and the United States.

Which calls to mind the news item I saw on CNN Asia a couple of weeks ago that described how a very large number of small companies in China had gone into bankruptcy on account of the global downturn in trade, but that the bigger companies would be able to ride out the storm.

The news report was read out over a scene of the assembly line at a factory that was described as being one of those large companies that represented the real power of China's output. And what was it making? - black and white stuffed toys.

I remember thinking at the time it was laughable and sad to think that China's economy and its contribution to world economic stability was based in part on its ability to maintain output of fluffy toys.

But the point is, how could anyone possibly compare the value a soft toy has to someone in China and that value it has to someone in the United States?

And without that, purchasing power parity has limited meaning.

Reported at Bloomberg By Steve Scherer
Feb. 14 (Bloomberg) -- Group of Seven finance chiefs eased their criticism of China’s exchange-rate policy as the world’s most populous country moved to bolster its economy during the global recession.

Less than a month ago, U.S. Treasury Secretary Timothy Geithner, who attended today’s meeting in Rome, said President Barack Obama thought that China was “manipulating its currency.”

“We welcome China’s fiscal measures and continued commitment to move to a more flexible exchange rate, which should lead to continued appreciation of the Renminbi,” the G- 7 said today in its final communiqué.

China announced 4 trillion yuan ($585 billion) in spending in November to support the economy amid the global recession. China, the world’s second-biggest energy consumer, may approve a stimulus plan for the oil refining and petrochemicals industries by next week to help spur the slowing economy, two industry officials said yesterday.

“We very much welcome the steps they’ve taken to strengthen domestic demand, and welcome” China’s commitment to exchange rate reform, Geithner told reporters today in Rome, a view echoed by French Finance Minster Christine Lagarde.

“The more conciliatory tone on China is the key departure from previous statements,” Geoffrey Yu, a London-based foreign-exchange strategist at UBS AG, said in an e-mailed statement. “The G-7 has realized that China needs to be brought into the fold of the global financial system rather than be treated as a pariah just because of yuan inflexibility.”

Shifting Position

Since first describing flexible exchange rates as “desirable” after a 2003 meeting in Dubai, the G-7 has swung between pressuring and praising China’s exchange rate policy.

Having cheered a July 2005 revaluation, the officials said the following December that further shifts would aid the world economy and four months later said China “especially” should adjust its currency.

In February 2007 the G-7 encouraged the yuan to “move” more on a trade-weighted basis and at the three meetings between October 2007 and last April pressed China to allow an “accelerated appreciation.”

Nine Billion Hungry People

Reprise: It's funny and it's irritating looking at the online financial news reports.

Each day for the past few weeks news reports have been coming out advising

- Stocks rally after crash

- Stocks pull back sharply after rally

- Stocks edge lower in choppy trading

All of which is fine and dandy except that the reports are posted throughout the day and yet read as though they sum up the day's trading.

But in the fast-changing trading of the past few weeks, with stocks going up and down and up again, and down again on any given day, it's not uncommon to see Yahoo Finance or Bloomberg carrying a list of news headlines with one talking about stocks going down, and another right below it talking about stocks going up.

So it's funny to see classic headlines in bald contradiction of one another, but it's irritating brushing them aside while looking for something of substance to read.

One thing I have learned being here in England over the past several months is that some people in the U.S. seem to have absolutely no idea that the economic fallout of the credit drought has been just as great here in Europe as it is in the States.

The United States has an area 39 times that of the United Kingdom and a population 5 times greater. So I can see that there is plenty to keep people entertained or worried or informed about in the U.S. without them wondering what is happening in other parts of the world. But it makes me wonder when I hear friends in the U.S. ask whether Britain has been affected by the economic situation.

Well yes, Britain and the people of Britain have been affected.

Three of Britain's failed lending institutions have been nationalized. A clutch of high street names have disappeared. And one of its savings banks having its assets in Icelandic banks - which have defaulted - has defaulted in turn leaving some people stripped of everything.

And I have to say that I have the same blindness with regard to many parts of the world. For example, what is the current situation in poor parts of the world as a result of the volatility of food prices? There were headline news reports a few months ago warning that the rises in fuel prices were leading to a widespread risk of famine in the developing world.

I remember thinking at the time that if the recession turned into a depression, and if that became a worldwide depression on the scale of the Great Depression, then oddly enough it might be the poorer countries that could withstand it better because their infrastructure was not so tightly bound as in First World countries.

I could see s situation where people in developed countries would not be able to feed themselves if the supply chain broke down.  I could see sewage and water systems breaking down in developed countries and with nowhere for the people to go.

Whereas in poor countries where people are living subsistence lives, they might well be able to carry on.

Or maybe not. This report from Oxfam details the current risks to people in Africa as a result of the volatility in food prices.

Oxfam: global food crisis will worsen - 1bn hungry people need help now
Urgent action is needed to prevent hundreds of millions more people slipping into hunger as a result of volatile food prices and increasing energy and water scarcity, said international agency Oxfam today. Decades of underinvestment in agriculture coupled with the increasing threat of climate change mean that despite recent price falls, future food security is by no means guaranteed, and in fact the situation could get worse, said Oxfam on the opening day of a UN conference in Madrid to address the issue.

Oxfam’s warning comes on the day that two new reports are published, detailing the threats to global food security and exposing the lack of adequate coordinated international action to tackle hunger.

The reports, 'A Billion Hungry People and The Feeding of the Nine Billion' are published by Oxfam and the UK think tank, Chatham House respectively, and together are a call to action to politicians, and representatives from the private sector and civil society meeting to discuss the implementation of the UN Taskforce’s response.

Although global food prices have fallen in the last few months, they are not back to previous levels, and are likely to rise sharply again in the future.   Furthermore, price volatility itself is a problem, and more needs to be done to address the underlying structural issue that cause the chronic hunger affecting 1 in 6 people in the world today, says Oxfam.

Barbara Stocking, Oxfam Chief Executive, said: “This should be a wake-up call for all those who believe that the food crisis is over. World leaders have a window of opportunity to prevent a worse situation resulting from the triple crunch of the economic crisis, climate change, and energy and water scarcity. They must act urgently to turn their plans into coordinated action that addresses immediate needs and begins to implement long-term reforms. Failure to act will see millions more people falling into hunger.”

Oxfam said current severe food shortages in Afghanistan, Ethiopia, Kenya, Mozambique and Zimbabwe are evidence that the global food crisis is far from over (see annex). Even before recent price rises, there were over 850m people classified as undernourished. Now, there are nearly a billion, as a result of the price rises, alongside other factors such as political instability and conflict.

“Not enough has been done to tackle the situation. There is a lack of coordination at all levels and the opportunity for root and branch reform of the aid system has not yet been taken. International institutions and donors must reverse decades of under-investment in agriculture and scrap blatantly distortionary polices such as biofuels mandates that make things worse,” said Stocking.

“The recent decision by the EU to reinstate export subsidies for dairy is the direct opposite of what’s needed: a retrograde step that calls into question their commitment to longer term reforms,” she added.

The Feeding of the Nine Billion, published by Chatham House and part-funded by Oxfam, predicts demand for food will increase as the world’s population grows by 2.5bn to 9.2bn by 2050. It also notes a UN prediction that climate change will increase the number of undernourished people worldwide by between 40m and 170m.

Meanwhile, Oxfam’s A Billion Hungry People includes recommendations for reform of the humanitarian aid system and makes a strident call to poor countries to do their bit by investing more in agriculture, targeting women and small-scale producers. Developing countries must increase social protection measures for vulnerable populations - including cash payments and employment creation schemes for those at risk of hunger. Rich countries must ensure long-term predictable funding to developing countries for investment in agriculture and climate change adaptation.

Why locusts swarm

There is an article in the Financial Times (and other newspapers) today about why locusts swarm.

Basically they become stressed when they feel overcrowded due to there not being enough food to go around.

This causes them to produce serotonin which makes them gregarious, change color, and develop bigger leg muscles for a long flight.

It seems to me that the final stepping stone in the logic trail is missing. OK, so they are feeling gregarious and the have big leg muscles and bright colors. But by the same logic, maybe that would trigger them to start a party and dance all night long.

Still, science has discovered a fact, which is that locusts produce serotonin and that when they do they swarm.

And we know that 10% of the world's human population suffers form locust attacks on their crops.

So here's an idea. Spray serotonin on locusts at a time of year when there is nowhere within reach that has crops for them to eat. They will swarm, not find anything and die of exhaustion.

If the experiment doesn't work then nothing is lost save the cost of an experiment that didn't work. It doesn't involve pesticides or genetic change and it is self-teminating.

Writing this, I feel bad for the locusts and for encouraging death by exhaustion - and maybe the idea is too good and would work, and cause unknown changes in the ecological balance. Who know?