Thursday, October 31, 2013

Book: Total Recall by Arnold Schwarzenegger

Wow. Arnie's autobiography is way better than I expected. "Total Recall" is written in a very basic and somewhat stilted style but that is also how Arnie speaks, so all the reader needs to do is imagine that it's Arnie's voice and the text rolls along like an in-depth interview.

With celebrity biographies of this nature, the reader has to expect bias, self-promotion, convenient omissions, etc. Since this is unavoidable in the genre we can't set a high bar of expectation in this respect. After all, why else do people of great fame and fortune write these things other than as vanity projects, setting records straight, leaving a legacy, etc?

Caveats aside, let’s get on to the good stuff.

Arnie's disciplined upbringing combined with his ambition, commercial focus, goal-driven orientation, genetic gifts and excellent people skills, to make a highly successful body-building star, businessman, actor and politician. The man seems to have lived several lives, and each one to the full.

There is no doubt that a self-reinforcement mechanism came into play early on with Arnie's endeavours - rule breaking and early successes fed his ego and confidence, helping him to believe that nothing was impossible. However, it is also clear that Arnie learned from his experiences and that he absorbed knowledge from the people around him like a sponge, learning a thousand little things along his various journeys and making many friends along the way. Arnie seems to have had an almost perfect blend of intelligence, pragmatism. For example, unlike many other body builders and movie stars, he would go out of his way to promote and sell his product, fully appreciating that you can’t just leave the product to speak for itself.

On the commerical side, Arnie had a bodybuilding pamphlet business, worked in a construction partnership with Franco Colombo, became a skilled property developer, he had a major stake in Planet Hollywood, and he even went on to become the first individual to buy and lease a 747 passenger plane (to Singapore Airlines)! In the movie world, he even managed to pull off a deal where he scored 20% of the gross for the movie Twins.

Interestingly, Arnie doesn't come across as having a grand plan beyond thinking one or two steps ahead and striving like hell to achieve these goals, the pursuit of which opened new doors of opportunity.

The broader theme of Total Recall is one of giving it your all, learning as much as you can from the people around you, making friends, and succeeding, where success is all about a clear end goal, be it collecting bodybuilding accolades, running businesses, acting, or running for office. He also had a very understanding and highly ambitious wife in Maria Shriver, who along with her parents comes across in the best possible light.

However, while there is much to admire, there are several elements to that take some of the shine off. As well as cheating on his wife, which sullies his characters quite significantly, Arnie's drive and sense of wining at almost any cost means that he could take things a little too. Examples include the various mind tricks that he played when in competition with other body builders (Sergio Oliva, Lou Ferrigno), to the underhanded marketing tricks he used when he worked construction jobs with Franco Colombo.

That said, we are all human, and you have to expect outcome orientated people to be more willing to bend the rules and codes of conduct when it comes to meeting their objectives.

I will post some passages from the book in another blog entry.

**** 1/2  - Read this book as a fan or for inspiration, not for role model advice. It looks like a real slab of a book but is actually a quick read. It also includes a great selection of photos from different stages of Arnie's life.

Wednesday, October 30, 2013

Tuesday, October 29, 2013

Macro readers, read Sean Corrigan!

Anybody who enjoys reading a spot of macro analysis would do well to add Sean Corrigan's monthly research note to their diet of economic commentary. Here is a man of strong opinion, experience, and knowledge. A snippet of his latest:

"Over the past 2 ½ years, while the Fed has valiantly sought to repeal the laws of economics in order to put Humpty Dumpty back on his wall the only way it knows how – by lifting the shattered bits of shell and glutinous membranes ever higher on a cushion of attempted reflation – it has managed to expand its balance sheet (and hence, loosely, the monetary base) by around 45% or at a 16% compound annual rate.

… anything which can be bought on credit has roared ahead, notwith-standing the overall anaemic condition of the body economic. Car sales are up around 25% in that time with both new and used prices registering record highs, while total housing turnover has jumped by almost three-fifths, with new home median prices setting a new peak and those for owned homes returning to levels characteristic of the 2005-07 real estate frenzy"

Monday, October 28, 2013

Bank of England - The UK economic outlook

Here are some of the salient points from a speech given by BoE Deputy Governor Charlie Bean, on 22 October 2013:

  • Since the economy troughed in 2009, GDP has risen by a paltry 2% on a cumulative basis. This compares against a growth forecast of 9% at the time
  • Fiscal consolidation in the public sector is going to weigh on growth for some years to come
  • Households are dealing with a past build-up of debt, which may weigh on spending
  • Businesses are reluctant to invest in an uncertain environment
  • Labour productivity has fallen 5% since the crisis began, posing a productivity puzzle (various factors at play).
  • Long term inflation expectations remain well anchored but inflation held persistently above forecast despite weaker than expected output. Indeed, inflation peaked at a whopping 5.2% in September 2011.
  • "We have discovered that we knew even less about the workings of the economy than we thought we did."  

We have seen a few promising economic signs recently but with respect to the bigger picture I think we are firmly entrenched in a low growth environment for some time to come (I am talking here not of the current upswing but of the next 5-10 years). Unless something comes out of left of field, I can't see an easy way out of this one. 

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Sunday, October 27, 2013

QE: one has to question

If we consider the financial sector a useful prop to the real economy, as opposed to a sector existing for its own sake, then the acceleration in the level of speculative activity relative to underlying GDP in the run up to the crash of 2007 could be viewed as a useful heads up to the risks that were brewing.

When everything went to ruin, "unfettered capitalism" became the central scapegoat and policy makers felt licensed to intervene wherever possible, and as much as possible - you know to "maintain the order of things" and protect everyone from themselves and for the common good and because the risks were too great to do anything less and because of this, and because of that. We saw the largest fiscal stimulus package in US history, supported by Republicans and Democrats alike.

We also saw the introduction of a massive market distortion mechanism called Quantitative Easing (QE) whereby the Federal Reserve purchases $85bn of bonds each month, thereby flooding the financial system with liquidity. The hope was that this money would percolate through the real economy and support the recovery. Broadly speaking, it hasn't been very effective in this goal.

One now has to question the strategy and the Fed's reluctance to pull back from the programme even incrementally, especially seen as the liquidity flood has clearly exacerbated inequality by inflating financial assets (bonds directly, and equities and commodities through a second order effect), which are on balance held by the rich and not the poor. Oh, not to forget the booming housing market.

As the equity markets hit new highs on the back of expectations of Fed tapering being pushed out into next year, I do wonder if the fragile rally will crack, making the policy maker's decision look like folly. A clean escape from the greatest monetary experiment of all time might not yet be impossible but I fear the probability of a clean escape outcome diminishes by the day; indeed it is with the passage of time that the markets view this support mechanism as an ongoing and dependable lifeline. When it looks like the life line is being pulled away, the patient will scream and wail all the more.

Saturday, October 26, 2013


Expendables 3 is in the can already. I'm looking forward to this one and hoping that the Expendables series don't follow the path of The Godfather movies i.e. a great first film, an even better second film, and then a turkey of a third. The amazing ensemble cast holds promise. If it's as good as the EX-2, EX-3 will blow the box-office to smithereens with rocket-launchers, timed detonations, grenades, chain guns and various other heavy artillery.

Here's the line-up, from Wikipedia. Read it and weep tears of joyful anticipation:

Sylvester Stallone as Barney Ross: Leader of The Expendables.    
Jason Statham as Lee Christmas: The team's knife expert.    
Jet Li as Yin Yang: The Expendables' hand-to-hand combat expert.    
Dolph Lundgren as Gunner Jensen: Volatile member of the team.    
Randy Couture as Toll Road: The team's demolitions expert.    
Terry Crews as Hale Ceasar: The Expendables' barrel-weapons specialist.    
Arnold Schwarzenegger as Trench Mauser    
Mel Gibson as Conrad Stonebanks: A ruthless arms dealer and co-founder of The Expendables.
Harrison Ford    
Wesley Snipes    
Antonio Banderas    
Kellan Lutz    
Ronda Rousey    
Victor Ortiz    
Glen Powell as a highly trained combat veteran and hacker.
Kelsey Grammer as Bonaparte: Former mercenary and Expendables ally.
Robert Davi

Hell yeah, they even got Fraiser!

The "spread betting is gambling" fallacy


An article on spread betting in The Economist ("A Punt by Any Other Name") has got me thinking about  the people who raise their eyebrows with concern when I mention that I prefer to trade the markets using spread-betting. The common perception is that spread-betting is gambling - high risk-high reward and all that. Well it really defines how you define gambling. Here are some thoughts:
  • Spread-betting in fx, equities and commodities is simply a cheap and tax-efficient means of obtaining an exposure to markets that would be difficult to access with small-stake bets. The exposure is to the underlying asset, so it really is little different to buying shares etc directly. 
  • Okay, so you can amplify your bet size to the nth degree using leverage but how is this different to taking out a bank loan and gearing up a market position. 
  • If you are just having a flutter without understanding these clear risks then it may be a gamble for you as an individual, but you could be equally foolish in the underlying market if you wanted to.
  • The fact that you can win or lose doesn't make a it a gamble any more than taking any other risk-return decision, which is almost every decision we take in life, from crossing the road, to buying a product or service, to making a new friend, etc. Now, most of these have examples have a clear positive expected return and the argument could be made that most people lose in spread betting. However, most people also lose when trading the underlying markets, so this really is a separate issue on the efficiency of markets and the role of the active investor.
On another interesting note, here is a recent article by IG Index founder Stuart Wheeler where he highlights the key reason why the government doesn't impose capital gains tax on spread-betters:

"The fact is that spread betting is a boon to the Chancellor. Taken as a group, the punters will be wrong as often as right and, though dealing is nothing like as expensive as buying and selling shares through a stockbroker, the expenses will mean that the clients as a whole are losers. The point is that the losers cannot set those losses against their capital gains. Furthermore, the firms pay betting duty and corporation tax. And their now large number of employees pay PAYE etc."

SMBC comic - what's the Large Hadron Collider up to these days?

Thursday, October 24, 2013

Population boom ... in small plastic people

Learning a sad fact from the bbc

A sad outcome of not questioning the logic of some government advice in the run up to the Second World War, from the BBC:

"People were basically told to kill their pets and they did. They killed 750,000 of them in the space of a week - it was a real tragedy, a complete disaster," says Christie Campbell, who helped write Bonzo's War.
Historian Hilda Kean says that it was just another way of signifying that war had begun. "It was one of things people had to do when the news came - evacuate the children, put up the blackout curtains, kill the cat."
It was the lack of food, not bombs, that posed the biggest threat to wartime pets. There was no food ration for cats and dogs.

  1. City meat man feeds cats at the beginning of 1939

Tuesday, October 22, 2013

Jean-Paul Sartre quotes

"A lost battle is a battle one thinks one has lost." 

"We do not judge the people we love." 

"Only the guy who isn't rowing has time to rock the boat." 

"Freedom is what you do with what's been done to you." 

"Better to die on one's feet than to live on one's knees.” 

“Man is condemned to be free; because once thrown into the world, he is responsible for everything he does."

"It is up to you to give [life] a meaning.” 

“Freedom is what we do with what is done to us.” 

“When the rich wage war it's the poor who die.” 

“We are our choices.” 

“The more sand that has escaped from the hourglass of our life, the clearer we should see through it.”

Monday, October 21, 2013

Royal Mail - the cheque is in the post

I have just placed an order to sell my tiny holding of Royal Mail shares, which are trading just north of the £5 mark. The sudden ramp up in the share price (they floated at £3.30 a week ago) begs the question why companies floating on the stock market don't ask their arrangers to put together an auction instead of flogging the shares at a guesstimated fair value.

Before anybody accuses me of boasting of my acumen, let it be known that I also just lost out on a speculation on outcome of the deficit ceiling debacle in the US. I was short gold on decision day, expecting gold to drop a percentage point or two when the Republicans caved to protect their wealth. The stock market rallied but gold also rallied alongside, no doubt pulled up the denomination effect of a weaker dollar. Nothing and nobody to blame here but me and my incomplete thinking.

Oh well, swings and roundabouts.

Murakami short stories in the New Yorker

Just discovered an interesting new short story by Haruki Murakami over at the New Yorker. There's one more in the archive here that isn't behind a pay wall. Both are good reading.

The music in Murakami's writing reminds me of the great Wodehouse, although Murakami's material is way darker and many times more fantastical.

Archbishop comes down on energy firms

From an article in the telegraph:

The Archbishop urged firms to be "conscious of their social obligations", saying they had to to "behave with generosity and not merely to maximise opportunity".

Me: Providing that conditions are competitive and there are no principal-agent issues causing short-termisn, then maximising opportunity should be the sole goal of the private enterprise.

"They have control because they sell something everyone has to buy. We have no choice about buying it," he said. 'With that amount of power comes huge responsibility to serve society.

Me: Maximising opportunity is the best way to serve society. Oh and here is some other stuff that everyone has to buy: clothes, food, water. People selling this stuff may have control when they have monopoly power but they don't have control simply because the goods are essential to daily life. It's a question of competition.

"It is not like some other sectors of business where people can walk away from you if they don't want to buy your product and you are entitled to seek to maximise your profit.

Me: Customers may not be able to walk away from energy as a product but they can switch supplier.

It's surprising to see this commentary from an archbishop who has a background in the energy sector.

Friday, October 18, 2013

Gaiman on reading

Neil Gaiman on reading:

When you watch TV or see a film, you are looking at things happening to other people. Prose fiction is something you build up from 26 letters and a handful of punctuation marks, and you, and you alone, using your imagination, create a world and people it and look out through other eyes. You get to feel things, visit places and worlds you would never otherwise know. You learn that everyone else out there is a me, as well. You're being someone else, and when you return to your own world, you're going to be slightly changed.
Full article in the Guardian.

Sunday, October 13, 2013

Malcolm Gladwell TED lecture on his new book .. worth watching

Malcolm Gladwell investigates the David and Goliath story. Excellent presentation as usual.

Friday, October 11, 2013

Martin Wolf speaks his mind on the perverted UK housing market:

"The victims of this vile system are the young and upwardly mobile, who are either unable to buy at all or are trapped in a lifetime of debt serfdom. The political genius of the scheme is that it appears to help these hapless victims, while in fact helping the usual suspects: banks, homeowners, Nimbys and, if it creates another housing boom, the government." - (Martin Wolf, FT, 11 Oct)

so true

Sunday, October 06, 2013

Tim Minchin's University Address

A man worth listening to, Tim Minchin hits the nail on the head over and over (the speech runs for about 11m):

“In darker days, I did a corporate gig at a conference for this big company who made and sold accounting software. In a bid, I presume, to inspire their salespeople to greater heights, they’d forked out 12 grand for an Inspirational Speaker who was this extreme sports dude who had had a couple of his limbs frozen off when he got stuck on a ledge on some mountain. It was weird. Software salespeople need to hear from someone who has had a long, successful and happy career in software sales, not from an overly-optimistic, ex-mountaineer. Some poor guy who arrived in the morning hoping to learn about better sales technique ended up going home worried about the blood flow to his extremities. It’s not inspirational – it’s confusing.

And if the mountain was meant to be a symbol of life’s challenges, and the loss of limbs a metaphor for sacrifice, the software guy’s not going to get it, is he? Cos he didn’t do an arts degree, did he? He should have. Arts degrees are awesome. And they help you find meaning where there is none. And let me assure you, there is none. Don’t go looking for it. Searching for meaning is like searching for a rhyme scheme in a cookbook: you won’t find it and you’ll bugger up your soufflĂ©.

Point being, I’m not an inspirational speaker. I’ve never lost a limb on a mountainside, metaphorically or otherwise. And I’m certainly not here to give career advice, cos… well I’ve never really had what most would call a proper job.

However, I have had large groups of people listening to what I say for quite a few years now, and it’s given me an inflated sense of self-importance. So I will now – at the ripe old age of 38 – bestow upon you nine life lessons. To echo, of course, the 9 lessons and carols of the traditional Christmas service. Which are also a bit obscure.
You might find some of this stuff inspiring, you will find some of it boring, and you will definitely forget all of it within a week. And be warned, there will be lots of hokey similes, and obscure aphorisms which start well but end up not making sense.
So listen up, or you’ll get lost, like a blind man clapping in a pharmacy trying to echo-locate the contact lens fluid.
Here we go:
1. You Don’t Have To Have A Dream. 
Americans on talent shows always talk about their dreams. Fine, if you have something that you’ve always dreamed of, like, in your heart, go for it! After all, it’s something to do with your time… chasing a dream. And if it’s a big enough one, it’ll take you most of your life to achieve, so by the time you get to it and are staring into the abyss of the meaninglessness of your achievement, you’ll be almost dead so it won’t matter.
I never really had one of these big dreams. And so I advocate passionate dedication to the pursuit of short-term goals. Be micro-ambitious. Put your head down and work with pride on whatever is in front of you… you never know where you might end up. Just be aware that the next worthy pursuit will probably appear in your periphery. Which is why you should be careful of long-term dreams. If you focus too far in front of you, you won’t see the shiny thing out the corner of your eye. Right? Good. Advice. Metaphor. Look at me go.
2. Don’t Seek Happiness
Happiness is like an orgasm: if you think about it too much, it goes away. Keep busy and aim to make someone else happy, and you might find you get some as a side effect. We didn’t evolve to be constantly content. Contented Australophithecus Afarensis got eaten before passing on their genes.
3. Remember, It’s All Luck 
You are lucky to be here. You were incalculably lucky to be born, and incredibly lucky to be brought up by a nice family that helped you get educated and encouraged you to go to Uni. Or if you were born into a horrible family, that’s unlucky and you have my sympathy… but you were still lucky: lucky that you happened to be made of the sort of DNA that made the sort of brain which – when placed in a horrible childhood environment – would make decisions that meant you ended up, eventually, graduating Uni. Well done you, for dragging yourself up by the shoelaces, but you were lucky. You didn’t create the bit of you that dragged you up. They’re not even your shoelaces.
I suppose I worked hard to achieve whatever dubious achievements I’ve achieved … but I didn’t make the bit of me that works hard, any more than I made the bit of me that ate too many burgers instead of going to lectures while I was here at UWA.
Understanding that you can’t truly take credit for your successes, nor truly blame others for their failures will humble you and make you more compassionate.
Empathy is intuitive, but is also something you can work on, intellectually.
4. Exercise
I’m sorry, you pasty, pale, smoking philosophy grads, arching your eyebrows into a Cartesian curve as you watch the Human Movement mob winding their way through the miniature traffic cones of their existence: you are wrong and they are right. Well, you’re half right – you think, therefore you are… but also: you jog, therefore you sleep well, therefore you’re not overwhelmed by existential angst. You can’t be Kant, and you don’t want to be.
Play a sport, do yoga, pump iron, run… whatever… but take care of your body. You’re going to need it. Most of you mob are going to live to nearly a hundred, and even the poorest of you will achieve a level of wealth that most humans throughout history could not have dreamed of. And this long, luxurious life ahead of you is going to make you depressed!
But don’t despair! There is an inverse correlation between depression and exercise. Do it. Run, my beautiful intellectuals, run. And don’t smoke. Natch.
5. Be Hard On Your Opinions 
A famous bon mot asserts that opinions are like arse-holes, in that everyone has one. There is great wisdom in this… but I would add that opinions differ significantly from arse-holes, in that yours should be constantly and thoroughly examined.
We must think critically, and not just about the ideas of others. Be hard on your beliefs. Take them out onto the verandah and beat them with a cricket bat.
Be intellectually rigorous. Identify your biases, your prejudices, your privilege.
Most of society’s arguments are kept alive by a failure to acknowledge nuance. We tend to generate false dichotomies, then try to argue one point using two entirely different sets of assumptions, like two tennis players trying to win a match by hitting beautifully executed shots from either end of separate tennis courts.
By the way, while I have science and arts grads in front of me: please don’t make the mistake of thinking the arts and sciences are at odds with one another. That is a recent, stupid, and damaging idea. You don’t have to be unscientific to make beautiful art, to write beautiful things.
If you need proof: Twain, Adams, Vonnegut, McEwen, Sagan, Shakespeare, Dickens. For a start.
You don’t need to be superstitious to be a poet. You don’t need to hate GM technology to care about the beauty of the planet. You don’t have to claim a soul to promote compassion.
Science is not a body of knowledge nor a system of belief; it is just a term which describes humankind’s incremental acquisition of understanding through observation. Science is awesome.
The arts and sciences need to work together to improve how knowledge is communicated. The idea that many Australians – including our new PM and my distant cousin Nick – believe that the science of anthropogenic global warming is controversial, is a powerful indicator of the extent of our failure to communicate. The fact that 30% of this room just bristled is further evidence still. The fact that that bristling is more to do with politics than science is even more despairing.
6. Be a teacher.
Please? Please be a teacher. Teachers are the most admirable and important people in the world. You don’t have to do it forever, but if you’re in doubt about what to do, be an amazing teacher. Just for your twenties. Be a primary school teacher. Especially if you’re a bloke – we need male primary school teachers. Even if you’re not a Teacher, be a teacher. Share your ideas. Don’t take for granted your education. Rejoice in what you learn, and spray it.
7. Define Yourself By What You Love
I’ve found myself doing this thing a bit recently, where, if someone asks me what sort of music I like, I say “well I don’t listen to the radio because pop lyrics annoy me”. Or if someone asks me what food I like, I say “I think truffle oil is overused and slightly obnoxious”. And I see it all the time online, people whose idea of being part of a subculture is to hate Coldplay or football or feminists or the Liberal Party. We have tendency to define ourselves in opposition to stuff; as a comedian, I make a living out of it. But try to also express your passion for things you love. Be demonstrative and generous in your praise of those you admire. Send thank-you cards and give standing ovations. Be pro-stuff, not just anti-stuff.
8. Respect People With Less Power Than You.
I have, in the past, made important decisions about people I work with – agents and producers – based largely on how they treat wait staff in restaurants. I don’t care if you’re the most powerful cat in the room, I will judge you on how you treat the least powerful. So there.
9. Don’t Rush.
You don’t need to already know what you’re going to do with the rest of your life. I’m not saying sit around smoking cones all day, but also, don’t panic. Most people I know who were sure of their career path at 20 are having midlife crises now.
I said at the beginning of this ramble that life is meaningless. It was not a flippant assertion. I think it’s absurd: the idea of seeking “meaning” in the set of circumstances that happens to exist after 13.8 billion years worth of unguided events. Leave it to humans to think the universe has a purpose for them. However, I am no nihilist. I am not even a cynic. I am, actually, rather romantic. And here’s my idea of romance:
You will soon be dead. Life will sometimes seem long and tough and, god, it’s tiring. And you will sometimes be happy and sometimes sad. And then you’ll be
old. And then you’ll be dead.
There is only one sensible thing to do with this empty existence, and that is: fill it. Not fillet. Fill. It.
And in my opinion (until I change it), life is best filled by learning as much as you can about as much as you can, taking pride in whatever you’re doing, having compassion, sharing ideas, running(!), being enthusiastic. And then there’s love, and travel, and wine, and sex, and art, and kids, and giving, and mountain climbing … but you know all that stuff already.
It’s an incredibly exciting thing, this one, meaningless life of yours. Good luck.

Thank you for indulging me.”
Photo courtesy of UWA (photographer – Ron D’Raine)

SMBC - a weird trend of style over substance

This style of infographic is becoming increasingly misused and common place:

Saturday, October 05, 2013

Great economics quote from Thomas Sewell

The first lesson of economics is scarcity: there is never enough of anything to fully satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.
Via Econlib

Friday, October 04, 2013

Thursday, October 03, 2013

Royal Mail shares

You can apply for shares in Royal Mail over the internet (payment by debit card) or by post (payment by cheque). I've decided to plump for some shares based on the following:
  • Institutions snapped up their portion in the first few hours of availability, a sign that those who have done their homework see value.
  • Politicians will be eager to see a pop in the share price, after embarassing themselves with Lloyds and RBS.
  • The share price range is widely perceived to be at the cheaper end of the spectrum. 
I'm not expecting big gaines here, but risk reward looks favourable.

Tuesday, October 01, 2013

xkcd comic - i feel the same

Breaking bad

Just watched the final episode of breaking bad. It ended well.