Monthly Archives: November 2011

Cities are timeless, usually…

One of the most enduring features of cities is that they are enduring.  Rome is the ‘Eternal City’  the Forbidden City in China was the seat of power for centuries.  As a rule, the trade patterns that cause the settlement of a city contribute to its longevity.

But, there are always rule breakers


More Macroeconomics Links

An Italian perspective on current problems.

A Greek opinion on the matter.

 By the way, this site has a great currency converter with historical data.

And finally, here is the latest on the Federal Reserve side of the crisis.




Adult Males Have Some Value

With Sandusky news dominating the airwaves with talk of crimes against children and the failure of men to be heros, we tend to forget that some men actually do have value.

Here’s a sports article about passing a passion from one generation to the next.  These relationships between the generations are the small-scale networks that make society function.

So, this go out there and attack your life with an enthusiasm UNKNOWN TO MANKIND!

Go ask Rhonda

Feeling in the mood for a little community service in this holiday week?  

Here at Nanocivics, we strongly encourage it!   After all, nanocivics are the relationships in families, between families, in cities and between cities.  With strong nanocivics – those collective relationships – we can personally solve many problems that most people think of as too big and too far away to make their own personal action meaningful. 

If you don’t know where to start, go ask Rhonda, I think she’ll know.

Income Inequality

This post has an excellent graph of the data behind the standard income inequality argument.

Combined with this data on the world-wide similarities in different countries, people are curious for an answer.

Here’s three potential solutions:

1) The nearer you are to the top percentile, the more likely it is that you have special skills that you can ‘sell’ internationally. With free trade, the internet, the fall of communism, and global telecommunications technology all improving access to foreign markets, we shouldn’t be surprised in the rapid growth of this sector.

2) The nearer you are to the top percentile, the more likely it is that you have invested in international markets. The real gain in many markets, think China over that period, has been huge and it is not surprising that only higher income folks have benefited.

3) The top and the bottom of the graph reflect life cycle income effects. Let’s face it, everybody is 16 to 21 sometime and few of us could claim, at that age, to have anything much more than entry level skills that make only a small marginal impact to our employers. We are “paid” in work experience at that age and we are expected to turn it into rewards later in life. Likewise, most of us will have 5 to 10 years somewhere in our late forties to early sixties when we have access to that best opportunity of a lifetime. Most of us will make our fortunes, for better or worse, during that brief highest earning period. Then, most people collect a fairly low income for several years as they close out their lives. This is intended and planned for as maintenance income, when you own your house and all the stuff in it and your medical bills are being paid from insurance or government sources.

Conclusion: I’d like to see the income data by age and educational attainment.

This Tornado Loves You

Music made in a barn, songs about birds and killer whales – the perfect meditation on the small-scale relationships necessary to produce organic, authentic music.  
Neko Case

The Timberlake Commentary

The U.S. Marines have no shortage of admiring fans, I am one for sure.  Here’s an interesting discussion of the Marine family by another fan.



Culture and Currency

The experiment with the Euro seems to have gone like this: Europe would be better off if the cultures merged together and, since currency is a key visual aspect of financial culture, a common currency would be a good thing.  After all, if you were doing business in Europe prior to the Euro one of your big problems was exchange rates and the constantly changing value of the different currencies relative to one another.  The Euro could solve all that and help unify a common European culture in the process.  Sounds great, right?

Not so fast, the exchange rates, or price of one currency in terms of another, was actually serving the traditional role of price in any economy.  Remember, price transmits information about supply and demand.  If we try to ignore what price variations tell us about the different business and political cultures in each country we loose valuable information. 

Greece, for example, would have recieved price signals through its currency exchanges and been forced to come to terms with it problems slowly over time.  Would the markets have thought Greece was printing too much money to mask its debt problems?  No problem, the price of Greek currency in the market would reflect it; prices of Greek exports would be too high and Greek exporters would get involved along with their workforce to demand a correction.  Without a country specific price signal, the information was hidden.  Since those currency price signals transmit information about Greek imports and exports, the Greek business culture (and, yes, we Americans would call it lacking) could have received the information and demanded better management by the Greek government.  Greek citizens would have seen inflation and held thier own leaders to task earlier.  

The absence of culture-specific currency is not helping European people or local business. It is helping multinational corporations who frequently do business in other European nations and no longer need to exchange currencies to do so.  European Union advocates also hope to benefit by using the present crisis to soften the differences between German culture and Greek culture.  Does that sound practical or respectful of the diversity of European cultures? 

Perhaps the need to have a currency price system that communicates information about local business climates is another reason to ditch the Euro.




Macroeconomics Links – International trade basics

Here’s some macroeconomics links explaining international trade basics:

Economic freedom and wealth

International trade: Absolute and comparative advantage

Exchange Rate Basics


The false municipal bond panic

One of the worst talking points of the recession has been those looking for a collapse of the municipal bond market – see here or aqui – it just isn’t going to happen nationwide.

I spoke with the Finance Director for a medium-sized city recently and he explained the Federal credit rating downgrade by saying he continues to be insulted that the Federal rating is even close to his City’s perfect rating. They maintain cash on hand sufficient for a 120 days of zero revenue; they are on a pay as you go program for all street and water repairs, they recently privatized a variety of functions, including the library, and they maintain a low tax burden. Buying thier debt would be the safest thing you could every do.

So, don’t read this dramatic news about a Jefferson County’s bankruptcy and be scared away from the whole municipal bond market.  Widespread corruption in one locality is a reason to research your investments, not to assume that the market is bad. Before you invest, google the entities name and avoid bonds from muncipalities with a recent history of massive corruption arrests.

Likewise, did the earlier news of Vallejo’s bankruptcy scare you? Don’t panic regarding that one either, the Government Accounting Standard Board’s revised requirements regarding reporting the true cost of long-term obligations to current and former employees specifically addresses the Vallejo problem of allowing labor costs to get massively out of balance. In fact, when you read news stories of some pending calamity in muncipal pension obligations, it is usually specifically because the new accounting standards require calculating and printing the true costs in the annual financial documents. This means an investor can generally visit a website, click on a CAFR and find out if the entity is sailing toward an iceberg. The rating agencies used to ignore these issues, now they have easy acccess to the data. 

So don’t buy into those egging on a false municipal bond panic, research your investments.