Traveling around Academic Earth, which is a sweet website unto itself, I discovered a site called Kiva. For those of you who have never heard of Academic Earth, it is a website that has viewable lectures from a number of top rated schools in America. Among them are Princton, Yale, Harvard, MIT, Stanford, etc. Profs agree to have individual courses filmed and put online so people can watch them for free. The website lacks an interactive component where members can discuss the course but hopefully that changes in the future. I am currently watching a course from Berkeley called "Current Issues in International and Area Studies". This course is just a series of guests. The guests all seem to be pretty decent thus far which is good because the Prof kind of sucks.
Anyways Kiva, introduced by one of the guest speakers of the aforementioned course, is a website that helps hook people up with individuals in the third world who require micro finance loans to start their businesses. The pay back rate is about 97.5% which means that if someone were to look at the website as a donation system and not an investment it would mean for $500 you could be doing the equivalent of about $20000 worth of help. A lot of the entrepreneurs on the website seem to have genuinely decent ideas and the website has a decent track record from what I read. I haven't signed up yet, though I think it is a possibility. I urge anyone interested in the world of micro financing to take a look even if it is only out of interest. The minimum loan increment is $25, a lot of the loans guarantee against currency risk and many of the organizations have a long term perfect record. You could probably help out many people while the initial $25 remaining safe.
FYI, There are 'communities' on Kiva that allow you to both communicate with like minded people and coordinate your loans for the maximum benefit of a particular segment (gender, nationality, industry, etc.). Within these communities the group who has lent the most money? "Atheists, Agnostics, Skeptics, Freethinkers, Secular Humanists and the Non-Religious" with a distant second being "Kiva Christians".
Showing posts with label Finance. Show all posts
Showing posts with label Finance. Show all posts
Thursday, November 05, 2009
Saturday, September 20, 2008
Bailout
The American government has bailed out the banking system to the tune of $1 Trillion. It has asked congress to increase the ceiling for the national deficit by $700 Billion to facilitate further bailouts. Namely, taking all of the bad debt.
Here is something that occurred to me. Lets assume that the war in Iraq's cost, which was borrowed from the financial community, is partially responsible for this. Would that mean the government borrowed a lot of money with no intentions of paying it back and as a result the banks neared bankruptcy. The government is now bailing them out instead of paying them back and fixing their balance sheets?
Not to mention in the process taking a huge share in at least one company (AIG). This situation is seriously messed up!
Here is something that occurred to me. Lets assume that the war in Iraq's cost, which was borrowed from the financial community, is partially responsible for this. Would that mean the government borrowed a lot of money with no intentions of paying it back and as a result the banks neared bankruptcy. The government is now bailing them out instead of paying them back and fixing their balance sheets?
Not to mention in the process taking a huge share in at least one company (AIG). This situation is seriously messed up!
Friday, September 19, 2008
SEC Halts Short Selling
Well the SEC (along with the apparent aide of the British) have stopped short Selling of Companies in the Finance sector.
No Short Selling
799 to be precise.
799 Financial Companies Off Limits
I guess, like everybody else in the world, I should be addressing this. It is interesting news. Interesting in its less common, negative, connotation. With Lehman Brothers going bankrupt we have now witnessed the biggest bankruptcy ever (in America anyways). What does this mean to the world? I have no idea. Clearly people with more power and money don't know whats going on so why I should I pretend to?
Here we have a person, who McCain said he would fire, coming out guns a blazing two days later. Is this a rash decision brought on by market turmoil? Is today really that much worse than say Wednesday or when they stopped short selling on a dozenish shares awhile ago? Or is it just now Cox is worried about his livelihood? Okay, That's probably unlikely since I am sure the guy has other money and head of the SEC does not seem like the best job right now anyways. But why are we so late on this? Is it so bad right now that people keep thinking "It can't get worse" then it does, and they are left thinking of the next way to fix it?
Is Short selling all that bad anyways? Are they essentially saying that if you have money in the financial markets right now you are going down with the ship?
What about the situation where you own X amount of shares in company A and believe that it is only in turmoil because the market as a whole is. You don't want to lose money but you also want to keep your shares. You short -X shares to hold a market position then in the future when the market changes you buy X shares back. Are things like that allowed? Is it just 'malicious' shorting they are worried about?
The markets are going to lose a lot of liquidity over this.
Should you even care? Do you have a job? Do you need a job? Do you own a house? Do you have insurance? Do your parents own a house you plan to inherit? Do you hope to retire at some point in the future? I think we reached the point sometime in August where even lay people with no money from lower class parents who rent a property and have a six month contingency bank account need to be worried. Shit that's me.
No Short Selling
799 to be precise.
799 Financial Companies Off Limits
I guess, like everybody else in the world, I should be addressing this. It is interesting news. Interesting in its less common, negative, connotation. With Lehman Brothers going bankrupt we have now witnessed the biggest bankruptcy ever (in America anyways). What does this mean to the world? I have no idea. Clearly people with more power and money don't know whats going on so why I should I pretend to?
Here we have a person, who McCain said he would fire, coming out guns a blazing two days later. Is this a rash decision brought on by market turmoil? Is today really that much worse than say Wednesday or when they stopped short selling on a dozenish shares awhile ago? Or is it just now Cox is worried about his livelihood? Okay, That's probably unlikely since I am sure the guy has other money and head of the SEC does not seem like the best job right now anyways. But why are we so late on this? Is it so bad right now that people keep thinking "It can't get worse" then it does, and they are left thinking of the next way to fix it?
Is Short selling all that bad anyways? Are they essentially saying that if you have money in the financial markets right now you are going down with the ship?
What about the situation where you own X amount of shares in company A and believe that it is only in turmoil because the market as a whole is. You don't want to lose money but you also want to keep your shares. You short -X shares to hold a market position then in the future when the market changes you buy X shares back. Are things like that allowed? Is it just 'malicious' shorting they are worried about?
The markets are going to lose a lot of liquidity over this.
Should you even care? Do you have a job? Do you need a job? Do you own a house? Do you have insurance? Do your parents own a house you plan to inherit? Do you hope to retire at some point in the future? I think we reached the point sometime in August where even lay people with no money from lower class parents who rent a property and have a six month contingency bank account need to be worried. Shit that's me.
The Elephant in the Room
OMG WTF AIG.
What can we say about this. I was slow to write about it because it is such big news that I don't know what to think.
If America chose to nationalise its energy market or water markets because of a similarly comprehensive, immediate and catastrophic failure in these markets would people accept it the same way? I don't think so. This happens all the time in the world. Generally with the word Socialismo being muttered. Is it somehow better or more necessary to aide financial markets and insurance providers than water and heating oil?
It seems necessary to guarantee Freddie and Frannie - possibly AIG - because of the way our economy is based. To lose the construction industry would cause a cascade effect through the whole system.
The following article (IMHO) has an interesting view and some original information.
Wall Street Journal: AIG
I think I will need a lot of time to fully decide how I feel about this. Certainly something had to be done. Is this the best way? Already we are hearing this is the worst market condition in fifty years! That beats the dot.com bust, the early 90s, the oil shocks and any problems associated with 'nam or Korea. I hope governments, individuals and companies start to look proactive over the next week or so because if this becomes the worst market condition in a century I don't think synthetic shoes make as good a soup as our great grandparents enjoyed in dickity-nine.
I am especially interested in hearing what you think on this topic as it worries me. Frankly it should worry you too.
What can we say about this. I was slow to write about it because it is such big news that I don't know what to think.
If America chose to nationalise its energy market or water markets because of a similarly comprehensive, immediate and catastrophic failure in these markets would people accept it the same way? I don't think so. This happens all the time in the world. Generally with the word Socialismo being muttered. Is it somehow better or more necessary to aide financial markets and insurance providers than water and heating oil?
It seems necessary to guarantee Freddie and Frannie - possibly AIG - because of the way our economy is based. To lose the construction industry would cause a cascade effect through the whole system.
The following article (IMHO) has an interesting view and some original information.
Wall Street Journal: AIG
I think I will need a lot of time to fully decide how I feel about this. Certainly something had to be done. Is this the best way? Already we are hearing this is the worst market condition in fifty years! That beats the dot.com bust, the early 90s, the oil shocks and any problems associated with 'nam or Korea. I hope governments, individuals and companies start to look proactive over the next week or so because if this becomes the worst market condition in a century I don't think synthetic shoes make as good a soup as our great grandparents enjoyed in dickity-nine.
I am especially interested in hearing what you think on this topic as it worries me. Frankly it should worry you too.
Sunday, September 14, 2008
United Airlines
Unless you have been living under a rock, you have heard about the United Airlines scandal. A newspaper, apparently by mistake, revived a seven year old article about the company going bankrupt. Of course, the company was only entering bankruptcy insurance which helps companies reorganise and cut staff with ease. It then left bankruptcy insurance in 2006. Recent changes have made bankruptcy insurance in America less appealing and as such this would be even bigger news.
Well some how this hick Floridian paper's Xnews was picked up by Google and was spread rapidly (In the new lingo it went viral). The result was a 75% drop in share prices. Likely because people are so sensitive to airline issues that the reactions are quicker and more harsh than in other industries.
Now we have a real Dog and Tail thing going on. Who purchased those discounted shares?
Could this be a super hostile takeover bid? Did somebody purposefully rerun that article after accepting a huge bribe so someone else could buy the stocks knowing the shares would eventually return to their previous levels? Is that possible?
Or, perhaps more believable, The company knew the article was untrue and took this opportunity to buy back as many shares as possible at the discounted rate only to issue more later. At which time we see the company increasing its capital base without diluting the stock pool.
I don't know what happened, legal or illegal, but somebody made a lot of money and I want to know who, as well as what the SEC is going to do about it.
Well some how this hick Floridian paper's Xnews was picked up by Google and was spread rapidly (In the new lingo it went viral). The result was a 75% drop in share prices. Likely because people are so sensitive to airline issues that the reactions are quicker and more harsh than in other industries.
Now we have a real Dog and Tail thing going on. Who purchased those discounted shares?
Could this be a super hostile takeover bid? Did somebody purposefully rerun that article after accepting a huge bribe so someone else could buy the stocks knowing the shares would eventually return to their previous levels? Is that possible?
Or, perhaps more believable, The company knew the article was untrue and took this opportunity to buy back as many shares as possible at the discounted rate only to issue more later. At which time we see the company increasing its capital base without diluting the stock pool.
I don't know what happened, legal or illegal, but somebody made a lot of money and I want to know who, as well as what the SEC is going to do about it.
Thursday, September 11, 2008
Sovereign Wealth Fund
Canada needs to set up a sovereign wealth fund. According to The Economist (Sept 6th-12th, pg 87), which is my favourite magazine and so happens to be one of my biggest influences (Along with Professor Ferguson (University of Guelph) and South Park in the spirit of full disclosure), makes some interesting arguments about sovereign wealth funds (SWF).
It stipulates that SWF's world wide are worth $2.5 Trillion. It also gives three specific examples of uses.
Norway's is aimed at transferring money to later generations long after the spike in national wealth from the oil dissipates; Chile's which uses it to save when prices and exports are high to spend when prices and exports are lower to smooth out their business cycle; and Saudi Arabia which will start buying farmland around the world to help guarantee a supply of food to the desert.
In previous articles over the past two months they have gone into more detail about the first and third examples. The latter is being developed as a cheaper and more environmentally stable way of producing food for the desert nation than their last major project of pumping desalinated ocean water in an irrigation system in the desert to produce some of the world's most expensive wheat. The first example, Norway, has a strong ethics board which monitors all the investments for environmental and social justice concerns (Completely reasonable and necessary). How could you promote rights but invest in companies that employ children in sweat shops? Individuals have no problem but governments need to be more aware. Since local governments do not have the resources to monitor all of the major projects, it is a great way for the developed world to express their concerns - by selling off their shares in unethical companies.
Another common factor in SWF is the majority of money is invested outside the country to prevent increased inflation which would reinforce the business cycle not smooth it out.
Canada needs a SWF. We need to use it to invest in Environmentally sound projects around the world. I believe we could help finance future generations, save the pension plan and meet our Kyoto obligations all with a reasonably large SWF. It is not an easy thing to implement and certainly not a band aid for all of our problems but it is a necessary step.
We need to nationalize more of the oil profits, and perhaps other primary resources eventually, so that some of the royalties can be siphoned off for this fund. We need to hire top notch investors, along with a bipartisan ethics committee, and blend the investments to have some within but most outside of the boarders.
It stipulates that SWF's world wide are worth $2.5 Trillion. It also gives three specific examples of uses.
Norway's is aimed at transferring money to later generations long after the spike in national wealth from the oil dissipates; Chile's which uses it to save when prices and exports are high to spend when prices and exports are lower to smooth out their business cycle; and Saudi Arabia which will start buying farmland around the world to help guarantee a supply of food to the desert.
In previous articles over the past two months they have gone into more detail about the first and third examples. The latter is being developed as a cheaper and more environmentally stable way of producing food for the desert nation than their last major project of pumping desalinated ocean water in an irrigation system in the desert to produce some of the world's most expensive wheat. The first example, Norway, has a strong ethics board which monitors all the investments for environmental and social justice concerns (Completely reasonable and necessary). How could you promote rights but invest in companies that employ children in sweat shops? Individuals have no problem but governments need to be more aware. Since local governments do not have the resources to monitor all of the major projects, it is a great way for the developed world to express their concerns - by selling off their shares in unethical companies.
Another common factor in SWF is the majority of money is invested outside the country to prevent increased inflation which would reinforce the business cycle not smooth it out.
Canada needs a SWF. We need to use it to invest in Environmentally sound projects around the world. I believe we could help finance future generations, save the pension plan and meet our Kyoto obligations all with a reasonably large SWF. It is not an easy thing to implement and certainly not a band aid for all of our problems but it is a necessary step.
We need to nationalize more of the oil profits, and perhaps other primary resources eventually, so that some of the royalties can be siphoned off for this fund. We need to hire top notch investors, along with a bipartisan ethics committee, and blend the investments to have some within but most outside of the boarders.
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