Friday, February 24, 2012

Impossible Thongs

 Here's an early shot (D Jones) of a 60's Celtic tribute act loosely based on Impossible Songs but called (humorously enough) Impossible Thongs.  Left to Right; Stig O'Driscoll – guitars, vocals and five skin joints, Robbie Dunwoody – bass, drums, penguin and oil drums and the lovely Heather St Kilda - vocals, bagpipes, knitting and harmonium. It's all almost true I tell you.

Eliot Spitzer of argues that the prevention of future credit crises should be focused on the size of the consequence. Having any bank in the system that is ‘too big to fail’ is undesirable; having many smaller banks allows the system to cleanse itself from failing financial institutions. Reduce the consequences of the failure of a financial institution, instead of ‘betting on accurately predicting the odds’ of a failure.

Before the credit crisis started raging on the international markets, econometricians (THE financial risk experts) were primarily managing on the odds. Humans, for any non-linear problem, are extremely bad at estimating odds. Econometricians may be better at estimating odds than the average person, but that seems a moot point now that they have convincingly proven they can screw up to the point of destroying the entire financial system. 
Managing on the consequences instead of the odds seems to be a better way forward, and Eliot concludes that” We need to stop using the bailouts to rebuild gigantic financial institutions.” Whats the point in trying to rebuild structures that have already been proven to fail?

Our current approach to dealing with the credit crisis causes two major negative effects: “we are creating the significant systemic risk not just of rewarding imprudentbehaviour by private actors but of preventing, through bailouts and subsidies, the process of creative destruction that capitalism depends on. We hope Eliot’s most important conclusion for governments ends up being implemented: “The better policy is to return to an era of vibrant competition among multiple, smaller entities—none so essential to the entire structure that it is indispensable.”

His article can be found here:

Moving on: other than the ongoing global financial problems and how they are being addressed a far weightier problem is the dilemma of what to do in that awful moment when you realise youve got chocolate stains (from the crumbly biscuit you ate earlier for elevenses) on the crotch of your pants. How long has it been there? Who might have noticed it? How the fugg did get so ingrained into the fabric? Why has it now turned that horrible colour? Will it come out by rubbing it (and who might see this awkward process being enacted) or should I just cut my losses and go home?

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