Why Giggs and Co should be given a go…

I do not usually write about sport on my blog, but I cannot stop myself from being drawn into the MU management succession discussion.

Ferguson did not just manage a team for 26 years, he built a dynasty and I still believe that this dynasty pervades the club.  Any new manager that comes in is going to have to compete with this, which means either totally eradicate it or assimilate oneself into it.  An experienced manager is not going to opt for assimilation.

Manchester United was not a failed club when Moyes took over, so there is no rationale for eradicating what has been a very successful culture.   To do so would risk a long road to not only rebuilding a team but reversing the direction of the last 26 years.

I think, irrespective of Giggs’ lack of management experience, that the machine should be given a chance to prove itself.    It is the dynamics of the dynasty that argue for Giggs and co to be retained at the helm.   This is where Moyes failed: he failed because he could not impose himself on the legacy and the institution.

To take on an experienced and proven manager would mean that MU would become forced to compete with the likes of Man City, Chelsea, Real Madrid, Barcelona and the many other big spending clubs, on money alone.  This is not what Manchester United stands for.

Giggs and co need to be given a chance to prove the machine!

Fama versus Shiller

Was there another reason why both Fama and Shiller, the two opposing ends of the world view spectrum on market risk and return, were awarded the Nobel Prize?   You never know, but what is clear to me is that issues of market efficiency need to be reconciled with the realities of economic and market excess and imbalance.  

Methods for all moments (Economist) – “Eugene Fama of Chicago, is known for his ardent belief in the efficiency of markets: he declined to renew his subscription to this newspaper after tiring of its incessant warning about bubbles, the very existence of which he denies. Robert Shiller from Yale, in contrast, is known for his prescient warnings of bubbles, in technology stocks in the 1990s and in housing in the 2000s.”


On the shoulders of giants…..

There comes a point where the more knowledge we as a society have accumulated, the less we as individuals know and understand to the point that the momentum of the past is misread as the success and right of the present.  This is the inflection point and we have probably passed it.

I am just in the midst of writing a blog post on asset allocation.  In this post I will indirectly refer to the “air headedness” of the human race and the debt we owe to the great thinkers and individuals of the past.  

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Qatar and the World Cup

Why on earth did FIFA agree to have the world cup in Qatar?   There were already rumblings about the summer heat, but now we have a much more important issue, that of human rights abuses and global complicity in them.  

Sporting events should be for the entire world and should set an example about our attitudes towards each and everyone of us on this planet.  What does the World Cup decision mean at the moment?  That money rules, that the sport and the human being have no value, and that abuse is OK.  This goes to the bedrock of our world.   I am sure that many knew about all this but ignored it.

On the current state of affairs I have decided not to watch the world cup and may also consider avoiding buying any brand that advertises in this event, in the event that nothing of substance and meaning is done as quickly as possible.   I too would like to hear concern and action from the global brands…..  While the world may not be perfect, this is frankly too much to stomach.

The difference between harmony and consensus…

Do not ask me from where the question came, but there is a relevant context.  A consensus can be a middle ground between two or more competing objectives for which optimality is not a requirement.  Harmony, on the other hand, is a natural point of contact or balance between two or more states for which optimality is a requirement.  If you are looking for harmony you may be disappointed, because unless we can all step back from our opinions and look at the fundamentals all we may achieve is a consensus.   A failure of a consensus solution should ultimately lead us closer to harmony, but should we really be relying on failure to guide us?


Finally, Murray has won the one tournament that mattered, and he did so in style:  the difference between this and every other year, including his win in the US Open, was his ability to dig himself out of a set he was well on the way to losing.   In both the 2nd and 3rd sets, Murray was behind, and in any other year, he would been unable to get himself back into these two hot gruelling sets. 

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Guns in the US

US college alert amid ‘shooting’: A right is a right as long as it does not infringe on the rights of others, is what I remember to be the main thrust of Locke’s logic, so why do so many Americans feel that the many mass shootings we have witnessed are not in themselves rights that infringe on the rights of others.   Gun law is violating the spirit and purpose of the US constitution.  

The UK 1689 Bill of Rights also had a right to bear arms provision.  Indeed, the US second amendment, ratified in 1791, was itself an amendment to the original US constitution of 1787.   Many important amendments have since been made to the US constitution, most notably the 13th amendment.   Perhaps the gun issue is another “Lincoln” type moment. 

Better than a Hollywood Movie

Just reading through many of the super human achievements of the world’s Paralympians and you realise that their scripts are far more “out of this world” than any Hollywood movie.  



Most people are so far out of their depth in this crisis one wonders whether this is more than just a failure of the financial system!

The bund that broke the Bundesbank is a post at FT’s Alphaville that offers one explanation for the apparently poor German bund auction today.  It states that the reason for the poor auction was the need for the Bundesbank to retain an increasing share of bonds at auction to suppress interest rates in the German repo market. 

The rate is important to suppress because almost all interbank funding is now done on a secured basis against the best quality collateral. Which implies two important points: 1) that the ECB itself has lost control and depends almost entirely on the Bundesbank to enforce its low rate policy target and 2) that the Bundesbank is having to retain more bunds from the market than ever before just to ensure the last functioning repo rate in Europe doesn’t spiral out of control.”

One of the important things about this crisis is the ever increasing amount of detail that is being delivered.   This type of detail would in normal times be far removed from most analysis, yet, in order to understand what is actually happening and to make sense of it, the financial community is having to dig deeper and deeper.  

The truth of the matter is that the world had started to become a much more complicated place towards the latter part of the 1990s and that simple rules of thumb, valuation and asset allocation benchmarks had ceased to have relevance to the increasing risks in the financial and economic universe. 

I had expressed these very same concerns during 1996 and 1997, when I was running money and developing systems.  Yet, from this point on, it only seemed to get worse with the investment world all to ready to accept simple mantras, systems and solutions for the management of money.  

One of my main themes is that we are taught to understand and deliver the solution, often without question.  Beneath the solution lies the theory and beneath the theory lies the problem.  Few venture beyond the need to understand the solution and fewer still go deep into the problem to question the theory upon which our financial edifices are built.  This is one of the reasons why we are in this mess: not just the central banks, the governments, the crooked banksters, but an educational system that rewards the correct, but not necessarily the right answer. 

What is the worth of an an educational system when there is only one predetermined “correct” answer and any attempt to think outside of the box is not rewarded? 

When we oversimplify we find not only that the world becomes too complex for us to manage, but that our model of what is, no longer represents reality!

Federal Reserve Bank of St Louis

I am sorry, burdened by tiredness, I could not help but notice an argument that reeked of unfounded optimism. 

A comparison of the 1992/1993 Euro crisis and now?  Light at the end of the tunnel?

Well, I am sorry, but i am not about to state the obvious and explain why now is different from then, but this is what i will say:

1992 and 2011: same players, two totally different scenarios; one at the start of S£$£% creek without a paddle and the other at the end; one in shallow water and an easy wade to the far bank, the other in a torrent with steep rock faces either side. I know the Fed Res of St Louis is trying to pen off the similarities, and hence the potential for light at the end of the tunnel, but the similarities are shallow and the light nothing more than photons in transit from a long dead star in the firmament.

The only similarity is that a decision has to be made, but the consequences are different.

Back to the Future: Revisiting the European Crisis

Newspapers or journalists or both….what worth in today’s world?

“today there appears to be less independence in the media, less sense of outrage at abuses of power. Journalists of the baby boomer generation who were anti-establishment back then are old and more passive now, co-opted if you like. And the business has changed. In the 24-hour news cycle, the pressure is to move on to the next story without due diligence on the one that just happened.” From the Globe and Mail, “Has the fourth estate lost its tenacity?” Continue reading

“The next Renaissance”

Trudging through the economic data, the news and views that are available everywhere these days, I am struck by the enveloping human drama. 

The financial crisis is moving beyond the economic and the market to the social fabric.

There is a strong dynamic here: the crisis has been ongoing in many parts of the world for four years now and it is likely to continue to have an impact for some time. So, the dynamics are only going to get stronger, and I do wonder where this is all going.

Are we set for a renaissance of sorts? 

Is this fast becoming a moment of historic significance?

The following video is a CNBC interview, (I found this link on Naked Capitalism and I note that this was referred to NC by someone else), but it is interesting and suggests that the occupy Wall Street movement could be part of something bigger.


Mirror, mirror, on the wall, which way will the market fall? Will it rise, will it fall, ……?

At 1,100 on the S&P, 5050 on the Dax and 5000 on the FTSE, I thought yes, this could be the place for a short term bounce.  I am feeling that way at 1220 and close to 6,000 on the DAX, but the other way. 

There is a lot of liquidity on the sidelines, and yes, this liquidity has learned that the market has been moving up and down on news, with a reasonable degree of certainty.   There is money to be made, perhaps the only money to be made in the house, on a regular basis. 

I thought, tongue in cheek, it would be fun, to see if we could pin point relative value points on the major markets based on what appears to be the current modus operandi of the markets.  Continue reading

Another Lehman moment: S&P 500 closed at 1099.23 on 3 October 2008, closed 3 October 2011 at 1099.23!

According to the world’s financial markets, we are close to brink once again.   With the S&P closing below 1,100, the US market is now back to levels seen between September 2008 and October 2009, barring the October 2008 dip that lasted until March 2009, with other world markets back to lower levels still.  

Are we in for a repeat? With the S&P 500 closing on 3 October 2011 at 1099.23, one would be forgiven for thinking history wishes to repeat itself to the letter: on 3 October 2008 it closed at exactly the same level, 1099.23.