Archive for the ‘Economy’ Category

A Dysfunctional Banking System

Saturday, January 30th, 2010

As the debt-crisis reached its preliminary climax in the fall of 2008, we were promised the collapse of society if the banks were not rescued with public funds. Maybe that’s true, but now is the time to think about building a better banking and money infrastructure.

My personal experience with banks was increased somewhat over the last month, as I tried to wire transfer several thousand dollars from a bank account in Canada to one in Norway. The accounts are both owned by me. They are with large, respected entities in both countries. I have several receipts (thank God) that show that the account number (IBAN), SWIFT code, address, name etc. provided by me are correct.

The money did leave my bank account in Canada a few days after I requested the transfer. So far, so good. The problem is that that was in December 2009. After waiting for a week, I first contacted the sending bank in Canada. They gave me a nice looking “Payment Transmission Confirmation” showing the information I had entered and some other numbers. The transmission showed that the money had left my bank, then gone to an intermediary associated with my bank and had been sent on to Bank X (I know the name, but won’t post it here yet) in Great Britain, with instructions to send it on to my bank.

I gave my receipt to my bank in Norway, but they could not find any funds, not in my name, not to my account, not of that amount, not on that date, etc. Their intermediary is another Norwegian bank, so I tried calling them – no luck. They pointed me to DnB NOR, who is the intermediary they use. DnB NOR was also unable to find the money.

I requested more information from Canada. Another week went by, and all I got was this very detailed spreadsheet-looking SWIFT request from my contact in Canada. The first receipt had some numbers. This one had lots of numbers! I sent it on to my Norwegian bank, who didn’t quite understand it. While it certainly had numbers, it didn’t have the number they wanted (transaction reference number).

At this point, I directed a request for a formal investigation to the originating bank. It’s been a week since then. They are no doubt calling banks down a long chain of intermediaries now. What I know about the trace of my money is this: My Bank in Canada -> Intermediary in Canada -> Intermediary in Great Britain 1 -> Intermediary in Great Britain 2 -> unknown. After the unknown, the final part of the route should be: DnB NOR -> Intermediary in Norway -> My Bank in Norway.

If you think this looks a bit like how the internet (tried traceroute?) works, you’re absolutely right. The only difference is that this process is manual. Yes, you heard it right. What happens at each of these links, is that some peon in the sending bank faxes a document with instructions and numbers on it to the next bank in the path. This is done over a “secure” (physically separate from the normal telecommunications network) wire. (Thus the term wire transfer). Then some peon in the receiving bank will look at the instructions, type the info into their system, and if the destination is not yet reached, fax it on to some other bank. The woman I talked to at DnB NOR even suggested that at some point in the chain, they had failed to find a “path” (translated from Norwegian “sti”) towards the destination! The routing in SWIFT is completely ad-hoc you see.

Whenever you visit a major city (at least in Canada), you can bet that the tallest five buildings are banks (not counting the CN Tower of course). If you’ve ever wondered what the people in those 100-story glass palaces do, now you know: They are full of peons who form the human equivalent of CISCO routers in a giant human version of the internet. In 2010, I believe this meets the definition of Epic Fail. And yes, the banks have ways of making us pay for this largesse!

The Commodities Gadget

Saturday, November 28th, 2009

And here is the Google Gadgets version of the Commodities Widget. It supports exactly the same chains of commodities as the mac version:

  • Energy: Crude oil, natural gas, heating oil and gasoline
  • Softs: Sugar, coffee, cocoa and cotton
  • Grains: Corn, soybeans and wheat
  • Metals: Gold, silver and copper
  • Currencies: US dollar index, Euro, British Pound, Swiss Franc, Yen and Canadian dollars.
  • Stock indices: Dow Jones Industrial futures, S&P 500 futures and NASDAQ.

Use the ‘+Google’ button under the embedded gadget above to add it to your iGoogle page. From your iGoogle page, you can click the down triangle in the upper right corner of the gadget and then ‘edit settings’ to select what to chart. You can also click the chart to go to the corresponding page at INO.com with a bigger chart, more options and info.

The Commodities Widget

Friday, November 27th, 2009

Commodities widget

I know it’s been a while, but the sequel to the broken Oil Price Widget is now here. The new widget not only shows the oil price, it shows a set of other futures, currencies and indices as well. I named it the Commodities Widget, even though some of the things it shows are not strictly commodities.

The new data source is INO.com. They are probably the web’s best free source for futures contracts. Clicking on any chart in the widget will bring you to the corresponding INO.com page with more details and longer-term charts.

Download: Commodities Widget.

Instructions: Mac OS X 10.4 Tiger or higher is required. If you’re using Safari, click the download link. When the widget download is complete, Show Dashboard, click the Plus sign to display the Widget Bar and click the widget’s icon in the Widget Bar to open it. If you’re using a browser other than Safari, click the download link. When the widget download is complete, unarchive it and place it in /Library/Widgets/ in your home folder. Show Dashboard, click the Plus sign to display the Widget Bar and click the widget’s icon in the Widget Bar to open it.

FED Bandits Almost out of Ammo

Tuesday, September 22nd, 2009

When the FED bought yet more Treasuries yesterday, effectively printing money, the market rejoiced. Karl Denninger documents it well in his latest post (look at the two charts near the bottom). Unfortunately, few such happiness-shots remain: The program to buy Treasuries is capped at $300 billion, and after Monday 9/21, $289 billion has been spent.

I expect two or three more of these infusions before they run out of heroin for the drug addict. This should get us to the beginning of October. Then what?

Vekst eller miljø? Ditt valg!

Sunday, July 19th, 2009

Det er valgår. Partienes programmer finner du her:

Til sammen er dette mer enn 600 siders herlig sommerlektyre. Merk også at der partiene har både prinsipp- og handlingsprogrammer, har jeg valgt handlingsprogrammene. Action speaks louder than words.

Forrige stortingsvalg stemte jeg på SV, som endte opp i regjering. Hvilken nedtur! Jeg oppdaget at ikke alt som står i programmet er partiets hjertesaker. For meg var miljø og rettferdig fordeling viktigst. SV skrev riktignok at dette lå deres hjerte nær, men etter fire år med “shop så det svir” og mer eller mindre åpenbar plyndring av vår felles formue til fordel for finansfolk og bankmenn, vet jeg bedre.

I år er min tese at man i beste fall kan håpe at et parti har én hovedssak, som de er villige til å sloss for. De resterende 100 sider av partiprogrammet er flesk som er lagt til for at alle skal finne noe de liker. Etter å ha skummet igjennom programmene over, kan jeg si at jeg finner mye jeg liker. Samtlige partier har en miljøpolitikk, til og med FrP. Og hvem er ikke enig i at vi skal “kombinere økonomisk vekst med reduserte utslipp av klimagasser” (Ap)? Eller at “det enorme forbruket av energi- og naturressurser kan reduseres dersom vi klarer å utnytte avfallet bedre” (KrF)? “Norge må gjennom teknologioverføring til fattige land bidra til mer klimavennlig økonomisk vekst” (SV). Så og si alle partiene har formuleringer som dette, der de sier ja takk til både økonomisk vekst og reduserte utslipp.

Hva om økonomisk vekst hovedsaklig er i konflikt med miljøet? Selv fornybare energiprosjekter har negative konsekvenser i form av materialutvinning, transport og inngrep i naturen. Og, vil ny fornybar kapasitet hovedsaklig erstatte mer miljøfiendtlig kraftproduksjon, eller bidra til enda høyere forbruk? Jevons paradoks tilsier det siste. Hvis vi må velge mellom økonomisk vekst og et relativt stabilt klimasystem, der forbruk og ressurstilvekst er i balanse, vil jeg velge det siste.

Lavere materielt forbruke betyr ikke nød. F.eks kan materielt forbruk byttes mot mer fritid. En bil er en luksusvare dersom du har normal bevegelighet og ikke bor i grisgrendte strøk. Uten utgifter til bil kan du unne deg en ekstra fridag – hver uke! Da blir det god tid til å sykle til butikken, og du kommer i god form. Kutt ut impulskjøp, og du slipper at livet ditt fylles av ting istedenfor opplevelser. Dermed kan du bo mindre, bruke mindre på bolig, oppvarming osv. Enda en fridag der, og plutselig er antall fridager i uka doblet! Bruk ekstra tid på frivillig arbeid, trening, tur i skogen, spill eller hva du måtte ønske.

Riktignok nevner både Ap, SV og Rødt reduksjoner i arbeidstiden (mulig flere nevner dette, jeg kan ha oversett, i så fall er det ikke særlig prominent), men gir ikke inntrykk av at dette er et miljøtiltak eller at det er noe de faktisk vil prøve å få til. Kun Miljøpartiet De Grønne vier dette god plass i sitt program, med overskriften “Redusert arbeidstid framfor økt kjøpekraft”. Det at programmet kun har 27 sider, det desidert minste partiprogrammet, gir også håp om at miljø ikke også her må vike for økonomisk vekst.

Miljøpartiet er et småparti som fikk kun 0,6% av stemmene i 2007. Stemmer du for dette partiet stemmer du i beste fall for å få inn én representant på Stortinget, eller for å øke troverdigheten deres i neste valg. Med de andre partiene stemmer du uansett på halvhjertet miljøpolitikk, som aldri vil vinne frem når den kommer i konflikt med andre deler av programmet.