Tuesday, 28 July 2009

Hi again


Hi all of yous.

I'm not quite sure why I stopped checking in on the blog, but it seems years since I've been on here. And wow - I seem to be out of touch. Paula's home looks so beautiful - if you still read this, congratulations, girl! And Paul's a rock star? I mean. We all knew you were destined for such, but well done, regardless!
Not much to report on my side, really. Just hanging out in North Carolina. Loving the summer. Even if it is ungodly hot. Although getting a little lonely - it being school holidays, my friends are mostly out of town making money elsewhere.
Did have something I wanted to share with you, though. Turns out, my little town is a lot cooler than I thought previous to Sunday. Went to the last day of the XX Merge Festival (to see She & Him play). The festival is an annual do they have here for bands represented by Merge Records. Had no idea until then that they were based round the corner from me. See what Pitchfork has to say:
http://pitchfork.com/features/articles/7683-xx-merge/
(I'm not sure how to make that a link)

Be in touch again soon with news.

All my love,

F

Wednesday, 22 July 2009

I am not a macroeconomist

If you have time to read, this is a fabulous - and simple - way to understand the basic macro debates.

Yours in education.
The Doctor

Economics is in crisis: it is time for a profound revamp

By Paul De Grauwe

Published: July 21 2009 22:27 | Last updated: July 21 2009 22:27

There can be little doubt. The science of macroeconomics is in deep trouble. The best and the brightest in the field fight over the most basic problems. Take government budget deficits, which now exceed 10 per cent of gross domestic product in countries such as the US and the UK. One camp of macroeconomists claims that, if not quickly reversed, such deficits will lead to rising interest rates and a crowding out of private investment. Instead of stimulating the economy, the deficits will lead to a new recession coupled with a surge in inflation. Wrong, says the other camp. There is no danger of inflation. These large deficits are necessary to avoid deflation. A clampdown on deficits would intensify the deflationary forces in the economy and would lead to a new and more intense recession.

Or take monetary policy. One camp warns that the build-up of massive amounts of liquidity is the surest road to hyperinflation and advises central banks to prepare an “exit strategy”. Nonsense, the other camp retorts. The build-up of liquidity just reflects the fact that banks are hoarding funds to improve their balance sheets. They sit on this pile of cash but do not use it to increase credit. Once the economy picks up, central banks can withdraw the liquidity as fast as they injected it. The risk of inflation is zero.

Both camps line up an impressive list of Nobel prize-winners to buttress their arguments. Economists have often disagreed in the past, but this time the tone is different. The protagonists do not hesitate to accuse the other camp of ignorance or bad faith. I have never seen anything like this.

So what? Does it matter that economists disagree so much? It does. Take the issue of government deficits. If you want to forecast the long-term interest rate, it matters a great deal which of the two camps you believe. If you believe the first one, you will fear future inflation and you will sell long-term government bonds. As a result, bond prices will drop and rates will rise. You will have made a reality of the fears of the first camp. But if you believe the story told by the second camp, you will happily buy long-term government bonds, allowing the government to spend without a surge in rates, thereby contributing to a recovery that the second camp predicts will follow from high budget deficits.

Most people are not sure which camp is right. They hesitate. One day, when green shoots are popping up here and there, they believe the story warning about inflation; the next day, when the shoots turn brownish, they believe the other story. Disagreements among economists take away the intellectual anchors around which market participants interpret events and forecast the future. Ultimately, all our forecasts use a particular economic model to interpret data and to forecast their future course. The existence of wildly different models takes away this intellectual anchor and this translates into more market volatility.

This conflict matters not only for market participants, but also for policymakers. The two camps of economists have wildly different estimates of the effect of a 1 per cent permanent increase in government spending on real US GDP over the next four years. According to the first camp, the Ricardians, the multiplier is closer to zero than to one, ie 1 per cent extra spending generates much less than 1 per cent of extra GDP, producing little extra tax revenue. Thus budget deficits surge and become unsustainable.

By contrast, the second camp, the Keynesians, predict that the same 1 per cent of extra government spending multiplies into significantly more than 1 per cent of extra GDP each year until the end of 2012. This is the stuff of dreams for governments, because such multiplier effects are likely to generate additional tax income so that budget deficits decline.

With so much disagreement it is no surprise that policymakers are unsure and vacillate. Some countries, such as the US and France, go all out for the Keynesian story; others, such as Germany, put more faith in the Ricardians. Personally I think the Keynesians are right, but my opinion is irrelevant. The point is that the cacophony of analysis helps to explain why policymakers react in different ways to the same crisis and why it is so difficult for them to come up with co-ordinated action.

How to resolve this crisis in macro-economics? The field must be revamped fundamentally. Some of its shortcomings are obvious. Before the financial crisis, most macroeconomists were blinded by the idea that efficient markets would take care of themselves. They did not bother to put financial markets and the banking sector into their models. This is a major flaw.

There is a deeper problem, though, that will be more difficult to resolve. This is the underlying paradigm of macroeconomic models. Mainstream models take the view that economic agents are superbly informed and understand the deep complexities of the world. In the jargon, they have “rational expectations”. Not only that. Since they all understand the same “truth”, they all act in the same way. Thus modelling the behaviour of just one agent (the “representative” consumer and the “representative” producer) is all one has to do to fully describe the intricacies of the world. Rarely has such a ludicrous idea been taken so seriously by so many academics. (Other fields of economics have not been deluded by this implausible idea and therefore do not face the same criticism.)

We need a new science of macroeconomics. A science that starts from the assumption that individuals have severe cognitive limitations; that they do not understand much about the complexities of the world in which they live. This lack of understanding creates biased beliefs and collective movements of euphoria when agents underestimate risk, followed by collective depression in which perceptions of risk are dramatically increased. These collective movements turn uncorrelated risks into highly correlated ones. What Keynes called “animal spirits” are fundamental forces driving macroeconomic fluctuations.

The basic error of modern macro-economics is the belief that the economy is simply the sum of microeconomic decisions of rational agents. But the economy is more than that. The interactions of these decisions create collective movements that are not visible at the micro level.

It will remain difficult to model these collective movements. There is much resistance. Too many macro-economists are attached to their models because they want to live in the comfort of what they understand – the behaviour of rational and superbly informed individuals.

To paraphrase Isaac Newton, macroeconomists can calculate the motions of a lonely rational agent but not the madness of the crowds. Yet if macroeconomics wants to become relevant again, its practitioners will have to start calculating this madness. It is going to be difficult, but that is no excuse not to try.

The writer is professor of economics at the University of Leuven and the Centre for European Policy Studies

Sunday, 19 July 2009

Mary's 30th Hoe Down







Ok. So we had some Line Dancing, Rodeo bull riding, more Dancing and dress up.

Jeremy got up to his usual party tricks on the dance floor. Brig exposed her wild side on the dance floor and by riding the bull. (Phil and Paul were too scared) - but Briggie braved it and was rewarded with a slap in the face (and chest) from the bull's horns (but she is fine!). The gay boys arrived to steal the show wearing very little (which got Mez squeeling) and with a special bday message in red lipstick. How they managed to stay in those outfits for the majority of the evening when half the 'venue' was outside in the 2 degree cold - I don't know. They managed to distract Nancy our elderly Line Dancing instructor quite often.

Thursday, 16 July 2009

port cities - the start




you heard it first on this blog.......!

Why i love cats and Japan

Wednesday, 15 July 2009

Some musical tidbits

The TV on the Radio concert i went to see a while back was recorded by the ABC. They broadcast it (well, half an hour of it) on Monday night, and i was hoping the would put it up on iView, but they havent. Philimon gets to watch it when he visits though. Many times. Maybe stoned. YOU however, can watch Wolf like Me below...



Also, you may like this little bit of 80's glory.


Dont front, you know you love the hair.

hauntings at 891 -





just cos they're completely freaky!

Thursday, 9 July 2009

New job

Hey Everyone

Thought it was time that I told you all of my big week this week. Somewhat disorientating and exhausting. But exciting nonetheless.

Sunday I decided to resign.
Monday I found new job
Tuesday I resigned & confirmed my appointment at new job
Wednesday I confirmed an early release from old job(My last last day at UCS will be next Monday!)
Today, Thursday I'm sorting out the mountain of admin and feeling a little tired

Next week Wednesday I start my new job with Change Logic at Standard Bank.

Bits n Pieces

while I am on the couch with the plague - and cannot hope to compete with the illness that is the beastie boys revelry - I thought i'd post a few bits n pieces. None earth shattering, just things I have been meaning to stick up for months.

Big news on the laan - well on the straat rather and blinde st to be exact is the arrival of ms youens. This is Paula's new house!! All the furniture is the previous owners still.
Work has taken me to some new places in the past few weeks... most rural and all cold :) So far its been Senqu (far north eastern cape), Qwa Qwa and Amajuba in KZN. All amazing places that it would be fun to go back and actually explore properly, instead of sitting in meeting rooms and getting the plague.


and introducing the little church:
off again on Sunday to ulundi :)

Wednesday, 8 July 2009

Sabotaging Bobby

Had this photo from our Rwanda trip. May I present Bobby Berkowitz as Officer Rutsomething.


Loving the icanhascheezburger gadget btw.

Lessons from the old school



This interview with Graham Boustred (ex-head of Anglo) was published in the Business Day this morning. It's sure to create a stir, but I thought I'd share it because it's frikken funny. How the world has changed!

Cap'n Sims!


Awesome

Get Ill

For those of you that care (you should all care) The Beastie Boys have re released their watershed album (trying not to use the word seminal) Ill Communication. They have posted a lekker little website to mark the occasion. Go there and Sabotage-ify yourself, like i have. Post pics on blog. Come correct like Anthony Mason (whoever he is).

This picture makes me look like a girl, but whatever.

Monday, 6 July 2009

Shameless self promotion

For those in Jozi...

Rock Stars



As many of you know Paul played his first gig on Saturday night at the Tanz Cafe in Bryanston. The likes of Prime Cirlce, Louise Carver and numerous other South African bands perform there,not many bands that we all support, but famous in SA terms. Paul wasn't that keen on the venue as it doesn't really fit, Shooting School for Baddies, band profile or rather, their gig venue wish list. Nevertheless - they were a great success! All band members were rather nervous, but they soon relaxed and their performance created much foot tapping, wolf whistling and a venue packed with friends, wannabe groupies, locals and even a few parentals. Paul looked like a real ROCK STAR, playing his guitar, with a few little solo numbers thrown in. Well done! We are so proud to see you up on the stage looking so cool (and handsome). Mary has agreed to bring some extra underwear next time to throw on stage. Lara even went as far as making a comment about if she wasn't a lesbian Paul would be in trouble...

The band that they were supporting, the colour eight,managed to empty the room with their bad cover versions of U2 and Michael Jackson. The highligt for me, was when I realzsied that the main singer was in fact an old KTV presenter, who had hosted IDOLs for a while before being involved in some drug scandal.

Tanz cafe have even requested that they return this weekend!

SO keep an eye out for their GIG list - hopefully you can all come and support and share the music!

Lara took some footage from her cellphone - so the quality is not that great and iot sounds as if Alana is really screeching, (she has quite a deep voice). I will try and post it.

Political Apathists!

You can't debate about whether kittens or puppies are cuter and then three people vote neither! Phil and Greg stop fence sitting and vote for me! Stop the political apathy! Save cute kitties - change your votes!

Kerry, Tally and Hels I will not sit on your bed and purr for you. Paul I suspect you are the third fence sitter....

Finally!

Proof there is a god... Swine Flu be thy name.

Saturday, 4 July 2009

Living the Australian dream!


Ahoy there land-lubbers!

I am a proud boat co-owner! Yesterday a friend and I 'won' a tinnie on eBay. Some rooster tried to snipe us at the end of the auction, but Tony (nickname 'Suey') was on the ball and we got it for a pretty good price. We still dont have a motor yet (so we can fang it like a scalded cat), and i need a license to ride it on the harbour. Anyway, once i have that stuf sorted i'm going to be on the harbour catching kinfish and flatheads (kingies and flatties) and getting in the way of the ferries and generally being a fisherman larrikin type. I have used a number of Australian colloquialisms in this post to reflect just how Australian this event is. You can have all the sausage sizzles you want, drink VB, watch AFL, and make fun of foreigners, but until you have a boat, you cannot consider yourself Australian (which i don't, but i can if i want to now). 

I want to call her The Kerrigan or The Joustin' Stick, or The Pool Room in honour of The Castle, but i'll have to confer with Suey.


Friday, 3 July 2009

Daily puppy/kitten eat your heart out!



Time have a pictorial of the Annual World's Ugliest Dog Competition on their website. I do however get the feeling that the word World is being used quite liberally in this context... sorta like the World Series. Anyhoo I thought it was pertinent and contextual due to our current democratic issues on hierdie blog.

Thursday, 2 July 2009

Gideon Rachman on Twitter

"The problem is that Twitter simultaneously encourages extreme brevity and endless communication. Each shot is short but you can keep twittering all day if you want – and many addicts seem to do just that. If Marx really had lived in the age of Twitter, he would probably not have been sending out thunderous political messages. It is more likely that his Twitter feed would have read: “Just arrived at British Museum. Going for a cup of tea.” "

More here. Good piece.

Wednesday, 1 July 2009

What is this doing on The Daily Puppy?

http://www.dailypuppy.com/articles/p/how-to-prevent-vaginitis/df1c5e11-4ada-ecc4-8806-05fc61dbf7b9

The daily puppy sucks

IMHO.