Really? LOL Dunno much about Sydney schools.

Comoared to Sydney Grammar, Melbourne Grammar is like Summer Height’s High. Sydney Grammar’[s more natural competirtors are Eton, Winchester, Westminster. I don’t think there is even one school in Victoria I’d send my cleaning lady. And has QLD always been so baxckward edfucationally.

The ticket out of poverty is working work, not sitting around
waiting for the next social security cheque.

I’m not saying that welfare is the desired way, I’m saying we need a system that rewards those who work hard, innovate and produce the wealth, instead of one where the rewards go to those in the positions to exploit others.

90% of the the problems caused by excess can be directly traced tot the central bank whose job it is to remove the punch bowl at the right time.

Not to defend the low interest rates, but I think you’re greatly overstating the influence of the central banks over the problem(s), and understating the over-reliance of the banks on “the market” to assess risk for them. At the end of the day the market was wrong, and the banks were caught short.

(Dave, nope no blog. Never had the discipline to keep things going.)

Dave:

Jc@127: The inevitability of a crash given the lack of responsibility (risk) that comes with risk and returns, a sad characteristic of what I’d call financialism, rather than the traditional risks and rewards of investment in equity, was what The Economist was railing about.

I think you really need to explain this a little more, Dave as I’m not sure what you’re trying to say. It’s not accurate to say that risks don’t match rewards in the strict sense as the management that failed all lost their jobs. Perhaps the shareholders should have suffered a little more, however the group I see getting the special hand out at the banks were the bondholders, as they should have come down to the equity level first before the government stepped in. If there was excessive speculation blame the Fed for setting rates too low and blame the SEC for raising the leverage allowed to be taken on I-bank’s balance sheets at the start of the decade allowing them Ito go to 35:1. I also have a good reason why that happened if you want me to explain it.

The timing is unpredictable. Just as with a cancer, you cannot give a time-to-live, only a probability of dying within a given timeframe. Incidentally, The Economist has been worried from about the same time as I was working on a trinomial (rather than binomial) algorithm for options pricing, and realized that the guaranteed influence and returns using derivatives was not reflected by the traditional risks of loss.

You don’t think vol is properly measured by black scholes? Note I only really use the applications and don’t know the math behind it.

Modern finance seems to me as faithful to the ideas of the fathers of the free market as the Borgia Popes did to the ideals of their nominal prophet, or indeed, most communist states to Marx.

Well yes that’s true. In fact most Wall Street types are democrats …. They belong to the (Dem)olition Party.

As for Australia, we are still awaiting the consequences of years of significant current account deficits, just as our key exports (carbon) are about to become more expensive.

Dave, we have an absolute advantage in this stuff. I wouldn’t worry too much as our exports will do okay and if they don’t we can adjust through the exchange rate like we did this year.

We remain highly vulnerable.

Which is why out floating exchange rate serves us well.

How do you see the national debt being repaid, without a massive change to production of things the world will pay a premium for, or such a tightening of our belts that the blood no longer reaches our legs and we lose the ability to stand unaided?

If our growth rate is high then it will fall as a percent of GDP so it may be okay. In any event until now nearly all the debt was private so I don’t owe anything for what the RIO board has cooked up and neither do you.

Default? An international safety net?

We can only really only default on what Rudd and Swandive are cooking up.

Thus I wonder how the past (and likely future) methods of the IMF and World Bank differ from the methods of a nanny state… but a very harsh nanny at that.

Dunno. What do you mean by that?

The differences between the two forms of the “nanny knowing what is good for you” are perhaps only in the proximal intent ( whether to prevent harm to individuals, or to guarantee at least some return to international creditors) and whether the imposed constraints are on the lifestyles of individuals or entire populations.

Perhaps. However don’t be too concerned as there is a lot of private equity investment coming in.

Modern finance seems to me as faithful to the ideas of the fathers of the free market as the Borgia Popes did to the ideals of their nominal prophet, or indeed, most communist states to Marx.

As for Australia, we are still awaiting the consequences of years of significant current account deficits, just as our key exports (carbon) are about to become more expensive. We remain highly vulnerable. How do you see the national debt being repaid, without a massive change to production of things the world will pay a premium for, or such a tightening of our belts that the blood no longer reaches our legs and we lose the ability to stand unaided? Default? An international safety net?

Thus I wonder how the past (and likely future) methods of the IMF and World Bank differ from the methods of a nanny state… but a very harsh nanny at that.

The differences between the two forms of the “nanny knowing what is good for you” are perhaps only in the proximal intent ( whether to prevent harm to individuals, or to guarantee at least some return to international creditors) and whether the imposed constraints are on the lifestyles of individuals or entire populations.

When I see numbers like those, Deux, my bullshit meter immediately goes off. I’m sorry but I find it a little hard to believe that 25% of the population is incapable of working because they have a disability that makes them unable to sit say in an office and work.

Read again JC, I said NOT based on receipt of benefits or severity. My point being that disability is far more common than most people think so numbers of those where the severity is high enough to interfere with working is also likely to be somewhat higher than expectation.

You’re right in that social security is NOT a route out of poverty (or at least what our ‘relative’ definition of that term – real poverty with starvation, disease and homelessness has by and large been solved thanks to the Welfare State and good civil governance). The rules are drawn up to make sure that can’t happen (and where not, often achieve the same thing despite being meant to address other issues), but while working provides the opportunity to succeed, a successful outcome is not guaranteed which I think is what Des is getting at. We’ve been analysing the phenomenon of the working poor for over a century now, pretty much since the lady fabians did their research in London published as the excellent “Round About A Pound A Week”.

You have the evidence to support your claim in the US is basically Malawi and Switzerland all mixed into one.

I’m sorry, but, you’re totally out of your depth. The ticket out of poverty is working work, not sitting around
waiting for the next social security cheque. You’re simply wrong.