Eamonn Fitzgerald's Rainy Day

Here it is. The winner of the "World's Best Presentation Contest" run by presentation-sharing site SlideShare.net. The terrific Shift Happens is about globalization. It's also about how technology and demographics are shifting the status quo — yours and mine. If you don't believe that any of this concerns you, consider that China will soon be the number one English-speaking country in the world, and bear in mind that the top 10 in-demand jobs in the United States in 2010 did not exist in 2004. Now, view the presentation.

If you have questions about the content of the presentation, Karl Fisch links to the sources on his blog. And congratulations to SlideShare.net for creating such a great space for exchanging ideas. Every day, a new wonder is added to our world.

Posted by Eamonn Fitzgerald on 11 June 2007 at 6:00 AM | Permalink | Comments (1) | TrackBacks (0)

At the weekend, the Times came up with "Sell! Twenty reasons to panic." Very amusing. As someone who attempts to scrape out a bit of music now and then, especially liked this one:

3 Florian Leonhard's violins: a London-based violin dealer is launching the $50 million (£25 million) Fine Violins Fund, which will invest in old violins. It's not that the value of violins doesn't appreciate, like wine. It's that the appetite for offbeat investments is at an unprecedented pitch. And how this is a hedge fund — how it guards against a downturn in the market — heaven knows. It's time to ask: is it the top of the market?

A fiddle as a financial instrument? The fund has a target of returning 8 to 12 percent a year and it promises that the historic violins it buys will be lent to up-and-coming players. Speculation with a heart of gold cannot represent the end times. One has to look elsewhere, but not too far. In an example of excess on a truly Roman scale, the White Cube Gallery displayed Damien Hirst's diamond skull, said to be worth $100 million. This is a sign not just of an overheated market, but of decadence. Sell!

Posted by Eamonn Fitzgerald on 7 June 2007 at 7:41 AM | Permalink | Comments (0) | TrackBacks (0)

What a pleasant change! The Nobel Prizes were given to deserving people this year. Remarkably, nothing for the deranged Pinters or the inflated Geldofs. Actually, those rewarded in the fields of medicine, chemistry, physics and economics are all doing useful work, and the winner of the literature award is a hugely important figure who has the ability to make the East understood in the West, and vice versa. The cap it all, Bangladesh's Muhammad Yunus and the Grameen Bank were awarded the Nobel Peace Prize yesterday.

Yunus founded the bank, which is a pioneer of micro-credit lending schemes for the poor in Bangladesh, especially women, so that they can start their own businesses. Naturally, empowering women has made Grameen unpopular with the Islamists, which is why they bombed it in February last year. The fascists hate the notion of equality of the sexes and prefer "martyrdom" to hope, but rational people want a better life for their families and communities and they're willing to work for it. Bangladesh is caught in the poverty trap, but helping to make women self-sustaining economically is critical to getting the country out of the mire. Another heartening thing about yesterday's award is that it didn't go to one of those big organizations that spawns massive bureaucracy. Grameen is effective because it focuses on the task of granting micro-credit and has not allowed itself to be distracted by the notions that have politicized the larger NGOs. Ultimately, yesterday's prize is a recognition of the fact that helping people to help themselves is better than encouraging them to depend on handouts.

Posted by Eamonn Fitzgerald on 14 October 2006 at 12:28 AM | Permalink | Comments (0) | TrackBacks (0)

Of all the memorable things he said in his lifetime, this remains our favourite: "One either meets or one works." Peter Drucker, who died yesterday at the splendid age of 95, is the man The Economist called "the greatest thinker management theory has produced." He lived a full, rewarding and fascinating life.

When he was born in Vienna in 1909, the city was the capital of a vast empire that comprised 50 million subjects and stretched from the Alps to the borders of Russia. When he left Vienna aged 17, the city was, in the words of historian A.J.P Taylor, "the inflated capital of a small Alpine country" that would pay a terrible price for the war that its rulers had started. It was no country for young men, in other words, so Peter Drucker, defying his father's wish that he attend university, headed to Hamburg and a job as a trainee clerk in an import-export firm. His next stop was Frankfurt and a position as a trainee securities analyst. He enrolled in a statistics course at Frankfurt University and was soon a financial journalist with the Frankfurter General Anzeiger.

Drucker's first publication, a pamphlet on Friedrich Julius Stahl (1802-1861), a philosopher, parliamentarian — and a Jew, was published in April 1933, two months after Hitler took power. It was promptly banned and burned. But like so many people at the time, Drucker dawdled in Germany, not quite comprehending what was happening. In his first book, The End of Economic Man: The Origins of Totalitarianism, published in 1939, he addressed the nihilism of Nazism: "It is anti-liberal, but also anti-conservative; anti-religious and antitheist; anti-war and anti-pacifist; against big business, but also against small artisans and shopkeepers..." He attended a Nazi rally at which a party speaker illustrated the abracadabra of fascism: " We don't want lower bread prices, we don't want higher bread prices, we don't want unchanged bread prices — we want National-Socialist prices."

In the excellent "The World According to Peter Drucker" by Jack Beatty, we learn what it was that finally woke Drucker up to the danger he was in. He attended a faculty meeting at the university led by a newly-appointed "Nazi commissar". Drucker was hoping that the famously liberal faculty would defend intellectual freedom. The Nazi began by announcing that Jewish faculty members would be fired immediately. Then he abused them using foul language. "It was nothing but 'shit' and 'fuck' and 'screw yourself'. When he had ended all eyes turned to a Nobel-prize-tipped biochemist. According to Drucker, "The great liberal got up, cleared his throat, and said: 'Very interesting, Mr Commissar, and in some respects very illuminating. But one point I didn't get too clearly. Will there be more money for research in physiology?"

Beatty quotes Drucker: "Although a few of the non-Jewish faculty left in solidarity with the Jewish colleagues, most did not. I went out sick unto death — and I knew that I would leave Germany within forty-eight hours."

After five years in London, he emigrated to the United States where he found fame, fortune and happiness. One final classic Drucker quote: "Marketing is a fashionable term. The sales manager becomes a marketing vice president. But a gravedigger is still a gravedigger even when it is called a mortician — only the price of the burial goes up." Peter Drucker deserves his eternal reward.

Posted by Eamonn Fitzgerald on 12 November 2005 at 5:51 PM | Permalink

The blog roll to the left below has been expanded by the addition of World Changing, which focuses on solutions, not problems. Lots of the ideas and models that you'll find here tend to be overlooked in the mass media and the idea behind the project is to pull resources together "to build a toolkit for changing the world." Sounds a bit idealistic, that, but it springs from the notion of reach exceeding grasp, and that goes back a long way. Active participation, intelligent travel and planetary citizenship are some of the key concepts at work here because, as the organizers say, "Changing the world is a team sport." Everyone is welcome to play.

Posted by Eamonn Fitzgerald on 8 August 2005 at 6:07 AM | Permalink | Comments (0) | TrackBacks (0)

Apropos the preceding post, there is another way of looking at bubbles, you know. "Almost by definition, spending on housing and housing-related goods tends to stay in-country. Even better, housing-related spending spreads riches more evenly throughout the economy than, say, investment in stocks," writes Daniel Gross in "Bubble Over Troubled Waters" in Slate.

And he makes the very valid point that the jobs fueled by the housing boom in the US (and likewise in Britain, in Australia, in Ireland), "are white collar and blue collar, and they range up and down the income scale: mortgage brokers and lawyers, title insurers and deed recorders, appraisers and movers, architects and engineers, interior decorators and plumbers, hardware store managers and Home Depot clerks, manufacturers of cement and lumber. Spending on housing flows into a remarkably wide range of sectors — and the overwhelming majority of the spending is local."

So, Long Boom or Big Bubble that's going to end in Trouble?

Posted by Eamonn Fitzgerald on 29 June 2005 at 10:34 PM | Permalink | Comments (0) | TrackBacks (0)

The Rainy Day wife's favourite quote of last week was provided by Tom Friedman writing in the New York Times. Responding to the French "Non" vote on the EU constitution, Friedman noted: "French voters are trying to preserve a 35-hour work week in a world where Indian engineers are ready to work a 35-hour day." She laughed her infectious laugh at that, did Mrs Rainy Day.

In "A Race to the Top", Friedman added: "The fact that a top German politician has resorted to attacking capitalism to win votes tells you just how explosive the next decade in Western Europe could be, as some of these aging, inflexible economies — which have grown used to six-week vacations and unemployment insurance that is almost as good as having a job — become more intimately integrated with Eastern Europe, India and China in a flattening world."

Will Hutton, who has spent a decade telling the people of Britain that they'd be better off with the Franco-German statist model, was furiously channelling Friedman yesterday in the Observer, but lacking Friedman's energy he just sounded melancholy. On and on he waffled, bludgeoning his public with all those stock phrases one has come to expect, but just as this reader was dropping off to sleep, Will's closing "gloomy outlook" jerked him out of torpor and sent cold sweat pouring down his back. Don't read it if you are terrified by the prospect of a global economic war — because that's what's coming if the 35-hour week elite refuse to accept that we live in a flattening world. It's probably too late for the dole-as-good-as-a-job crowd. They're going to get flattened by Eastern Europe, India and China, anyway.

Posted by Eamonn Fitzgerald on 6 June 2005 at 3:34 PM | Permalink | Comments (1) | TrackBacks (0)

The world woke up Monday to the news was that Barry Diller had bought the Ask Jeeves search engine for $1.9 billion. The Los Angeles Times reported that "Diller's Search May Now Be Over" and to test that hypothesis we asked Jeeves "Will Barry Diller Buy Rainy Day?" It's not easy to interpret the outcome but topping the list of results was the story "One theory is that Google will save the cash for a rainy day..." Interestingly, it was from Fool.com. Oh, well. Google's money is just as welcome here, so send it along lads.

With the New York Times buying About.com for $410 million cash and Yahoo! acquiring Flickr for an undisclosed but supposedly hefty sum, it feels like 1998 all over again, as many commentators have alreday pointed out, but surely the best of all the time warp moments was the AFP's brain-dead decision yesterday to sue Google for daring to link to its stories. Google has politely started removing all links with the result that AFP is now less relevant than ever. Why bother publishing online at all if you block one of the best marketing channels in the world? No Google links means lots less traffic. Soooooooo 1996.

Posted by Eamonn Fitzgerald on 23 March 2005 at 6:51 AM | Permalink | Comments (1)

Our title there is taken from an article in the current edition of The Economist. By the way, is it any wonder that the weekly's circulation topped the one million mark recently? Its prescience is simply uncanny. I mean, what a week to go with an article about the neo-con movement? The penultimate sentence of "Back in their pomp" reads: "The neo-conservatives have every reason to be feeling good about themselves at the moment." And, sure enough, as if to reward The Economist for its foresight, President Bush went ahead today and nominated Paul Wolfowitz to head the World Bank.

Sadly, not everyone was pleased with this decision. "We are horrified that the US is seriously nominating Wolfowitz to run the World Bank," said the sour pusses who run Who will be next? A blog devoted to World Bank succession race. They'd have been happier if Bono had landed the gig but he's booked out for years.

Expect lots of wailing from the usual quarters tomorrow, but maybe the Guardian will be a little more careful than it was in the past in re Wolfowitz. Two years ago, in June 2003, it ran a hit job under the headline "Wolfowitz: Iraq war was about oil". The paper reported that he had made a distinction between Iraq and North Korea based on the fact that Iraq "floats on a sea of oil." On the following day, the paper printed this humiliating climbdown:

"He did not say that. He said, according to the Department of Defense website: 'The difference between North Korea and Iraq is that we had virtually no economic options with Iraq because the country floats on a sea of oil. In the case of North Korea, the country is teetering on the edge of economic collapse and that I believe is a major point of leverage whereas the military picture with North Korea is very different from that with Iraq.' The sense was clearly that the US had no economic options by means of which to achieve its objectives, not that the economic value of the oil motivated the war."

If there's a reason why The Economist is regarded with more respect than the Guardian, you've just read it and you can confirm it here. Anyway, with Paul Wolfowitz nominated for the World Bank today and John Bolton getting the nod as America's ambassador to the United Nations last week, neo-cons will go to bed happy tonight.

Posted by Eamonn Fitzgerald on 16 March 2005 at 8:37 PM | Permalink | Comments (2)

ECONOMY A: On Tuesday, this country announced unemployment of 12.4 percent amounting to its highest jobless rate since the 1930s. As well, its expected growth rate was revised down from a predicted 1.4 percent to 1 percent. Germany or the USA?

ECONOMY B: Yesterday, this country announced that it had added 262,000 jobs in February — double the number for January, which is consistent with growth of 4 percent. The median duration of unemployment decreased to 9.3 weeks. Germany or the USA?

Economy A is Germany. Economy B is the USA. The most important contrastive statistic from those quoted above is the one about the median duration of unemployment in the US because when someone loses their job in Germany they rarely reenter the job market. The doors are shut firmly in their faces. On top of this dreadful fact, some 30,000 businesses go broke each month in Germany. To sum up: Compared with the neo-liberal, Anglo-Saxon model that's keeping unemployment at around 5 percent or lower and is powering growth in Australia, New Zealand, the USA, Britain and Ireland, the German statist model has failed. Or do you consider mass unemployment and almost zero growth signs of success?

Posted by Eamonn Fitzgerald on 5 March 2005 at 7:33 AM | Permalink | Comments (1)

First, a sample: "Surely, the last thing we want is to discover is that productive economic players are overtaken by a sudden sense of sufficiency. We don't want Ms. Black to wake up one morning and say, '55 pairs of Manolo Blahnik's, that's enough.' We don't want Lord Black coming to, and saying to Barbara, 'honey, I think we're done. Let's cut up the credit cards.' "

That comes from Grant McCracken, the author of Culture and Consumption, The Long Interview and Big Hair. Born and raised in Vancouver, McCracken has a resume that includes stints as a phonebook proof-reader and chauffeur to a Hollywood star. He holds a Ph.D. in anthropology from The University of Chicago and has recently taught at the Harvard Business School. Today, he lives in New York City where, among a vast array of activities, he manages to find time to post his thoughts on contemporary culture at "This Blog Sits at the Intersection of Anthropology & Economics", from which the item above, titeld "Conspicuous consumption (or, what happened to Conrad Black?)", is quoted.

Backgrounder: A Hollinger board investigation has accused Conrad Black and David Radler of "aggressive looting" and "corporate kleptocracy" to the tune of $400 million. The 513 page report details alleged abuses such as $24,950 for "summer drinks," $90,000 to refurbish Black's Rolls Royce, $42,870 for a birthday party for Ms. Black who, by the way, appears to be related to Imelda Marcos, as far as wearables go, anyway. According to the New York Times, "A Vogue reporter given access to her closets counted more than 100 pairs of Manolo Blahnik shoes, 40 jewel-handled handbags and a couture collection that would be the envy of a first lady." Here's McCracken's brilliant take on this remarkable tale of conspicuous consumption:

Continue reading "At the Intersection of Anthropology & Economics" »

Posted by Eamonn Fitzgerald on 9 September 2004 at 7:33 AM | Permalink | Comments (2)

What did you do last weekend? I watched TV. The sun was shining outside but the sports offerings on the box were simply too good to pass up. There was Wimbledon tennis on Saturday, which segued nicely into the Tour de France prologue and that was followed by a lengthy Euro 2004 retrospective, and then to bed. On Sunday, there was more tennis, more cycling and then, the crowning of the day, the Greece-Portugal game, and then to bed. A lost weekend? Well, not for me. You see, along with sports, I was watching something very interesting happening. Here's what I saw.

On Saturday, the gorgeous 17-year-old Russian Maria Sharapova won the women's final at Wimbledon, becoming the first Russian to do so. Those of you who have been following tennis this year will know that the French Open final three weeks ago featured two Russian women, Elena Dementieva and Anastasia Myskina. "The Russians are coming!" was the dread cry of yore, but forget it; the Russians are here, and they're here to stay. The game that the comrades disapproved of because of its un-Soviet focus on the individual is ideal for an emerging nation, which hungers for new sports and new stars.

And it was a similar story on Sunday night. Greece and Portugal are two rapidly developing countries that have benefited enormously from globalization during the past decade. More investment has meant significant economic growth, better infrastructure and the emergence of a prosperous, football-mad middle class. The kids are playing the game, the local leagues are nurturing the talent, the domestic clubs are investing in coaching competence and the national teams are turning into the sum of their parts.

Remember who won the Champions League this year? Porto, one of the smallest of the top-class European clubs. The money spilling out of the Champions League TV rights is now spreading to the periphery and this allows Portuguese, Greek and Czech stars to play their football at home with Porto, Panathinaikos and Sparta Prague. While this is good news for the domestic game in these countries, it is bad news for Europe's football aristocrats — England, Germany, Italy, Spain, France. See, economic and population growth will drive football success in the future and these are distinctly lacking in Old Europe, to use a Rumsfeldian term. The debate that too many foreigners are playing in the Bundesliga or the Serie A cannot obscure the fact that the domestic talent isn't there. The old powers are in decline.

If the theory that the rising tide of globalization is lifting the football boats (boots?) is correct, then which team should you put a tenner on for the 2006 World Cup? That's easy. The country has a handful of decent clubs, the people love the game, the middle class is expanding, the birth rate is high, inward investment is on the up and, this is critical, the national team has quality but hardly one recognisable player. A hint? It was third in the World Cup in 2002. That's right. Turkey. One of the problems with this theory, though, is that Turkey is in the same qualifying group as Greece. Oh, oh.

Posted by Eamonn Fitzgerald on 7 July 2004 at 7:18 AM | Permalink | Comments (1)

Because of public outrage at his $180 million pay package, Richard Grasso is now the former chairman of the New York Stock Exchange. In the current issue of the New Yorker, James Surowiecki looks at the affair in a short but scintillating piece entitled THE COUP DE GRASSO. In coming to his conclusion that "everyone loses when functionaries get paid like tycoons", the gifted Surowiecki gives us a quick overview of the "ultimate game", a well-known experiment in behavioural economics, and then delves into the work of primatologists Sarah F. Brosnan and Frans B. M. de Wall, whose study showing that female brown capuchin monkeys seem to have a sense of fairness was released on the very day Grasso resigned. Surowiecki writes:

"Pairs of capuchins had been trained to give Brosnan pebbles in exchange for slices of cucumber. This idyllic monkey market economy was disrupted, though, when the scientists changed the pay scale, rewarding one monkey with a delicious grape and the other with the same measly old cucumber. Exposed to this injustice, the capuchins who were given cucumbers often refused to eat; forty per cent of the time, they stopped trading entirely. Things got worse when one monkey in each pair was given a grape for doing nothing at all. The other monkeys often responded by tossing away their pebbles; eighty per cent of the time, they stopped trading. The capuchins were willing to forfeit cheap food simply to express their displeasure at their partners' unearned riches."

Surowiecki's inference? "The point was not — as some of the news coverage suggested — that capuchins are innate sharers. (The capuchin who got the grape showed no inclination to give it up.) The monkeys want to distribute things fairly, not equally. They seem to believe that there should be a clear connection between work and pay." In Grasso's case, however, there was no relationship between what he was doing and what he was being paid, says Surowiecki. He was good but dispensable and the NYSE will carry on without him.

But why was everyone so upset at Grasso's pay deal? Wasn't that a free market issue? Not so, argues Surowiecki. It was not the market, but a group of "friends and cronies" who came up with the flabbergasting $180 million: "?instead of figuring out how little they could pay Grasso and still keep him happy, they tried to figure out how much they could pay him. The board lavished grapes on him when he deserved — and would have been content with — cucumbers."

In dealing with financial topics, James Surowiecki exhibits, without showing off, a rare triad of journalistic attributes: intelligence, style and conscience.

Diarist of the day: Virginia Woolf, 30 September 1935

"Yesterday I saw the kingfisher again on the river. It flies across and across, very near the surface: it has a bright orange chocolate under side. And it is a tropical bird, sitting weighted on the bank. I have also seen a stoat — brown with a white tipped tail."

Posted by Eamonn Fitzgerald on 30 September 2003 at 7:14 AM | Permalink | Comments (0)

The job of the European Central Bank is to make one set of interest rates fit 11 different economies across a continent: mission impossible. The monetary suit that?s sagging on the shoulders of its wearer in Ireland is turning out to be suffocating attire in Germany.

Sweden's emphatic nej yesterday to the euro suggests that the time has come for some new thinking about what the EU elites have wrought. If the admirable Danes and Swedes feel that the euro is a bent, and spent, penny, maybe the rest of us should be given a chance to comment on the future of the common currency. With the three largest economies in the euro zone — Germany, France and Italy — in recession, and the pact designed to prevent states from undermining the common currency disintegrating, someone has to demand accountability and alternatives.

Meanwhile, the chances of a British referendum on the euro now appear to be less than zero as rejection is guaranteed. However, the chances that Britain, Sweden and Denmark creating a currency bloc outside EMU are not as far fetched as many would have us believe. After all, they are three of Europe?s most dynamic economies. If Norway joined, and if Ireland dropped the euro, one might have the makings of a viable free trade zone.

Posted by Eamonn Fitzgerald on 15 September 2003 at 4:52 PM | Permalink | Comments (0)

The Financial Times (subscription required) has posted an index of recent corporate theft — the amount of money that top executives and directors took from the 25 largest companies to go bankrupt during the past 18 months. "In just three years, they grossed about $3.3 billion before their companies went bust, having wiped out hundreds of billions of dollars of shareholder value and nearly 100,000 jobs," writes the FT's Ien Cheng.

In a brilliant move, the FT gives subscribers not just the aggregate figure but rankings of who grabbed the most cash. Mr Big? Why, it's Gary Winnick, founder and chairman of Global Crossing. He grossed $512 million since 1999, a period in which Global Crossing has lost $9.2 billion and cut 5,020 jobs. Next in line is Lou Pai, chairman of Enron's Energy Services subsidiary, who's made $270 million while his company has lost $18.8 billion and eliminated 5,500 jobs. Number three is former Enron CEO Ken Lay, with $247 million.

Posted by Eamonn Fitzgerald on 2 August 2002 at 7:47 AM | Permalink | Comments (0)

It's as simple as this: unless the markets recover soon, our entire economic prosperity is threatened. First of all, those, and it's millions now, who rely on investments to pay their pensions are going to have a less than secure retirement; secondly, businesses will find it impossible to raise money for new investment, which means no new jobs. Given the collapse of share prices over the past two years and the related destruction of wealth, it's inevitable then that the real economy is going to feel the pain soon. Logically, if people feel poorer, they'll spend less.

It remains to be seen how all this will play out around the world. In Japan, the banks are in a terrible mess so we can only expect more bad news from Tokyo. Germany's banks are not in such a state but they're under pressure. How share-based capitalism (US, UK) and the bank-based version (Japan, Germany) deal with the crisis should be telling. Despite the current situation, I feel that the share-based model is more solid. After all, if a bank has bad debts and the depositors demand their money back, it goes bust, if, on the other hand, share prices fall, people get hurt but the damage is more widely distributed.

Speaking of Germany, it desperately needs to export more at this critical stage but the higher the euro rises, the harder that will be. OK, its economy isn't subject to the kind of corporate corruption that's shaken the US but it's plagued by corporate incompetence and that's damaging.

Of course, the markets might be reading this all wrong. There's no war after all and the housing markets in both Britain and the States are strong. So, let's keep our fingers crossed.

Posted by Eamonn Fitzgerald on 23 July 2002 at 7:35 AM | Permalink | Comments (0)

Over at Dot Com Scoop, Ben Silverman has created As the WorldCom Turns, a blog about the fraud. It's a fine example of "microcontent".

The WorldCom story is, of course horrifying and it begs the question: are the managers, politicians, bankers and accountants who've stolen billions or enabled such theft a pervasive criminal facet of capitalism? Or are they a by-product of what Bush, Clinton and the majorities in Congress have helped create over the past 10 years by undermining the safeguards that were once part of the US financial system? After all, the Enron and WorldCom CEOs and CFOs aren't your typical gangsters. They come from the best business schools and from the top consulting firms. One possible outcome of the scandals is a depression in the US as ordinary investors — those without whom the markets will collapse — decide to pull out and stay out.

Posted by Eamonn Fitzgerald on 29 June 2002 at 6:44 AM | Permalink | Comments (0)