4/8/2013: WLASze Part 2: Weekend Links on Arts, Sciences and zero economics

This is the second part of my regular WLASze: Weekly Links on Arts, Sciences and zero economics posts for this weekend. Part 1 is available here. Enjoy...


A beautiful medium and a perfect balance between art (texture, colour, composition) and design (geometry, balance, space, utility): http://the189.com/design/art/works-by-japanese-ceramic-artist-shinobu-hashimoto/

Shinobu Hashimoto's site is here: https://www.facebook.com/shinobuceramic

On a similar theme, wonderful works in different wood media, united by the weaving technique:
http://howtospendit.ft.com/home-accessories/30923-woven-wonders-of-the-world
Scottish artist Lizzie Farey's 'sculptural baskets'

An interesting new (at least to me) artist: Glasgow-based artist Scott Naismith
http://www.mymodernmet.com/profiles/blogs/scott-naismith-landscape-paintings

Pushing the range of colour out to higher contrast limits and juxtaposing these against light and composition. Not bad… not bad at all… A bit more of the artist's portfolio: http://www.redbubble.com/people/scottnaismith/works/3579801-2-deep-blue

I am not quite decided on his work, yet - it seems to need more careful definition and a build up of selective quality works not to be fully confused with over-exposed kitsch street art, but… I intuitively like it.


Intuitive liking, however, is dangerous, just like intuitive disliking, whenever action is concerned. Good reminder - the recent controversy in Kiev, Ukraine:
http://www.theartnewspaper.com/articles/Kiev-museum-director-accused-of-censoring-work-by-covering-it-with-black-paint/30156
Political over-sensitivity leading to censorship is never a sign of strength, always of weakness of the regime and underlying national fundamentals… There is nothing that screams louder 'Massive chip on ya shoulder!' than painting murals over… More paint over paint and you might end up in a world similar to this: http://instagram.com/p/cYpGAEgw2B/


On a much more positive note relating to the national identity and art, Happy Birthday this week to Henry Moore - British most brilliant sculptor of all times:
http://www.tate.org.uk/context-comment/blogs/pictures-big-birthday-tribute-giant-british-art
Saatchi were running a list this week, asking people to relate their memory of the first encounter with Moore's works. My own was at UCLA - in the sculpture garden. If you ever in the vicinity of the campus - I suggest you stop by and experience the sculpture garden: http://www.youtube.com/watch?v=c2GK7aV-UeY


It was only a matter of time that Zaha Hadid - with her practice's prolific stamping out of the curvature-obsessed architecture around the globe - will run into some trouble. And so she did…
http://www.dezeen.com/2013/08/03/zaha-hadid-galaxy-soho-riba-award-lubetkin-prize-chinese-heritage/
It looks like Hadid's firm oversaw bulldozing of a historical heritage (already generally lacking in China's urban jungles) and replacing it with a… you guessed it… megalomaniac curvature set. The Royal Institute of British Architects decided to award this 'mushrooming of honey pots' an award… I am not convinced by RIBA call there... [Note: MrsG disagrees]


A fascinating topic of gender differences in behaviour is a tricky one and not exactly rewarding, but important. Here are four links on the same study which uncovered significant differences in managing risk between men and women: http://www.scientificamerican.com/article.cfm?id=men-and-women-gauge-risk-differentl and abstract of the study itself is here http://www.sciencedirect.com/science/article/pii/S0166432812006419, while whole paper can be seen here http://www.wangqiyu.com/bio/index.php/archives/693.


To wrap things up for this week, a really off-beat and wonderfully light-hearted photography by Samuel Bradley http://www.blog.samuelbradley.com/

http://the189.com/design/art/imagery-from-samuel-bradley/


Enjoy!..

3/8/2013: WLASze Part 1: Weekend Links on Arts, Sciences and zero economics

This is the first part of my regular WLASze: Weekly Links on Arts, Sciences and zero economics posts for this weekend. Enjoy...


When science meets art, and it happens often, the awe is magnified… Behold the colour-coded eucalyptus:

Two links with more images and stories: http://blog.cuipo.org/natures-painted-tree-the-rainbow-eucalyptus/ and http://all-that-is-interesting.com/the-worlds-most-amazing-trees .


And more on trees, the forests - to be more precise - this time around with more science:
http://arstechnica.com/science/2013/07/forests-not-as-thirsty-because-of-increasing-carbon-dioxide/
To run through the usual 'complexity' quote: "Early predictions by climate scientists were that increasing temperatures would devastate forests because elevated temperatures increase the rate of evaporation and transpiration at leaf surfaces, potentially causing trees to suffer from “water-stress.” Instead, this paper suggests that increased efficiency of water-use by forests might mean that water does not become a limiting factor in productivity as temperatures rise. This new finding seems like unadulterated good news, therefore, until you factor in the effect that water usage by forests has on components of the ecosystem."


Now to art or rather design and the Cool Stuff: it was only a matter of time before it came from one of those 3D printers:

http://www.dezeen.com/2013/08/02/stedelijk-museum-acquires-first-3d-printed-chair-solid-c2/
"Stedelijk Museum in Amsterdam has acquired Solid C2 by Patrick Jouin, the first item of furniture to be 3D-printed in one piece" Stunning design. Jouin's site will be here: http://www.patrickjouin.com/ once it is constructed (presumably he is not using a 3D printer for that task).


Last week I wrote about the Science Gallery and their one-off event which did include 3D printers - a tent full of them really. The printers are gone, but the main event - ILLUSION - is still going on and is 177.1% worth a visit. original post is here:
http://trueeconomics.blogspot.ie/2013/07/2772013-wlasze-part-2-weekend-links-on.html
Link to the event is here: http://www.youtube.com/watch?v=R_5rsqsx4lY
And a couple of images from the event:

@ScienceGallery


Irish Architecture Foundation is hosting an Open House in Dublin on October 4-6th:
http://www.architecturefoundation.ie/activities/open-house-dublin-2013-100-great-buildings-from-the-obvious-to-the-overlooked/
It's free, and it covers 100 buildings. There will be a "special “Architrek” event in Dún Laoghaire" too.

And more from the IAF: http://www.architecturefoundation.ie/news-item/riai-2013-irish-architecture-awards/
The Royal Institute of the Architects of Ireland announced 13 awards across categories including the Public Choice Award.
http://www.riai.ie/index.php/news/article/riai_2013_irish_architecture_awards_minister_quinn_praises_collective_achie

Irony has it, Minister Quinn was presenting and speaking - just before he made his subsequent statements about the low prioritisation of History in Irish educational curriculum: link here http://www.independent.ie/irish-news/quinn-takes-aim-at-historians-over-junior-cert-criticism-29466898.html

Brodsky wrote: "That's why Urania's older than sister Clio!" but that wasn't quite on the mind of our Minister… obviously… for I doubt he has much of an idea of the muses hierarchies, for, of course, Clio's equivalent existed in Pausanias' accounts of the original muses, while Urania was a later addition to muses… But then again, Minister Quinn would probably also deem Urania's domain of astronomy not worthy of studies, since it does;t quite lend itself easily to code writing or adwords sales or other noble activities that Ireland Inc promotes.

Still back to the topic: great awards, and congratulations to the hosts @RIAIPresident


Now for some 'Wow, that's just gross' relief: Foreign Policy has joined on the Summer fun and shed its usually academic veneer for a set of 'This Week' photos… Number 7 is priceless…
http://www.foreignpolicy.com/articles/2013/08/02/the_world_in_photos_this_week#7
There is something basic that is missing in this… people stuffed like capers in a tiny can of an artificially-made beach… You'd think that's mad. But a better image is here:
http://www.theworldofchinese.com/2013/07/dead-sea-of-china-gets-sardine-packed/

It is a beach under a roof with fake 'rocks' and 'waves'… and… oh… I guess that just might beat all the daft ideas one ever could have had about filling the Grand Canyon with something...

But not in China, where the ridiculous never becomes sublime even when it is based on it…
http://www.businessinsider.com/tianducheng-a-paris-replica-in-china-2013-8
This stuff really does blow your mind: A Ghost Town that is Paris...


Of course, there is always room on the WLASze page for some Russian-focused links. Aside from the usual medley of world/cosmos domination, Russians also like to stake some claims on world history. And this time around MrsG, MiniG and MicroG - with their Native American bloods - better be prepared. Per report in Pravda.ru (yeah, I know…) Native American Indians are originally from Russia...
http://english.pravda.ru/science/mysteries/19-07-2013/125188-american_indians-0/
May be Sarah Palin was right when she said she often saw Russians on Alaska's beaches…


Bering Straight - the former bridge that allowed early human migration to the Americas, is nowadays an ice-flanked inhospitable space. Not quite as cold as the ice space of Enceladus. And not as cool as Enceladus...
http://arstechnica.com/science/2013/07/enceladus-icy-jets-pulse-to-the-rhythm-of-its-orbit/

More WLASze to come in Part 2, so stay tuned.

3/8/2013: Humanities: Don't Just Discount the Vital Set of Skills

Over a month ago, I wrote in the Sunday Times about the topic of balance in education between the humanities and sciences and led this point toward the reforms needed. Last week, Washington Post run a story worth reading on the same subject: http://www.washingtonpost.com/blogs/innovations/wp/2013/07/30/we-need-more-humanities-majors/

My original article and few more links on the topic is here:

http://trueeconomics.blogspot.ie/2013/07/272013-sunday-times-june-30-2013-irish.html

2/8/2013: The Impossible Monetary Dilemma: July update

Two charts updating the Impossible Monetary Dilemma through July:

Good luck to all believing tapering will be enough to get monetary policy to mean-revert. Oh, and in case you wonder, mean reverting refers to historical mean - which is skewed downward by the period of historical lows of 2001-2005 and H2 2008- present. Even that historical mean is out of reach for any ordinary tightening.

2/8/2013: June's Great Recession Update

The usual monthly chart from Calculated Risk (h/t for the reminder to check to @businessinsider )... US Great Recession in comparison:

Source: http://www.calculatedriskblog.com/2013/07/june-employment-report-195000-jobs-76.html

Continue to be scared... cause we've been scared for the last 65 months... And a reminder from my previous re-posts of this chart: notice how frighteningly longer are the durations of employment recoveries in recent recessions since 1981.

And while we are on this, here's a good discussion of completely unrealistic US expectations for fiscal recovery: http://www.bloomberg.com/news/2013-08-01/why-the-cbo-s-deficit-forecasts-are-too-optimistic.html via @BloombergView

2/8/2013: Nice uptick in Ireland's risk ratings: ECR

Small thing, but all counts... Ireland's Euromoney Country Risk scores are continuing to improve:

Latest score up at 57.81 ranking Ireland at 42nd in terms of risk, with lower rank / higher score implying lower risk:

 Comparatives:

 Score components on aggregate:

 Historical trend:

Economic Assessment score sub-components:

Political Assessment score sub-components:

Structural Assessment score sub-components:

2/8/2013: Irish Manufacturing PMI: July 2013

Manufacturing PMI for Ireland was out yesterday. And as usual, it was worth waiting and giving the Irish media time to get through their circus of 'analysis'. The excitement of 'growth' predictions aside, here's the raw truth about the numbers (please, keep in mind that shambolic data coverage by Markit press-release is no longer conducive to any serious analysis of the underlying components of the PMIs). Note: PMI for Ireland are released by Investec and Markit.

All we have is the headline number. On the surface, headline Manufacturing PMI moved from 50.3 in June to 51.0 in July. Both numbers are above 50.0 and thus suggest expansion. This marks two consecutive months of growth.

However, there are some serious problems with the above. Read on:
-- At 51.0, July PMI is barely above 12 mo average of 50.7.
-- 3mo average through July is at 50.3, ahead of 49.4 3mo average through April 2013 - which is good news.
-- In July 2012, PMI was at 53.9 which was statistically significantly above 50.0 (in other words, statistically we did have growth in July 2012, which turned out to be pretty disastrous year for manufacturing and industry as we know). And in July 2013 at 51.0 there is no statistically significant difference in current PMI reading from 50.0, which means - statistically-speaking - we do not have growth.
-- Current 3mo MA at 50.3 is not different from 50.0 statistically
-- Current 3mo MA is below that in 2012 (52.7), ahead of that in 2011 (49.9) and below that for 2010 (52.4) - which is not exactly confidence-inspiring, right?
-- M/m (recall, these are seasonally-adjusted numbers) there was a rise in PMI of 0.7 (slightly better than m/m rise of 0.6 in June 2013). Alas, this monthly rise was also statistically indifferent from zero.

Here are two charts that illustrate the above points.

In short - good news is that PMI is reading above 50 and strengthened in July compared to June. Bad news is that statistically-speaking, neither the reading levels (in both June and July), nor increases m/m (in both June or July) are significant. Which means that we simply cannot will away the caution in reading the PMI numbers this time around.

2/8/2013: New Vehicles Registrations and Motor Trade in Ireland: H1 2013

Latest stats on car sales in Ireland are revealing, especially when indices data is put alongside the actual volumes of cars sales. Recall that in 2013, Irish authorities have changed vehicles registration system and instead of full year, new licenses show first half of 2013 and second half of 2013 vehicles. This was done to appease the dealers' fear that superstition over number '13' on the plate will deter people from buying cars. Obviously, the dealers were not too enlightened to figure out that in the current climate, it is the Vehicles Registration Tax and VAT, charged consecutively (to make certain that double taxation becomes triple taxation) might be a greater deterrent from purchasing a vehicle.

So here are the results of the heroic subsidies and supports accorded to motor trade:

Put simply, there has been no change in the rate of decline in new private cars sales since 2011 H1. Sales of new cars in H1 2012 were falling y/y at the same rate as in H1 2013. Sales of used vehicles are at all-time lows and this means that what we are witnessing the figures is not a license plate year effect, but the effect of overall decline in demand for cars.

Why? Well, handy QNHS survey on the impact of the crisis on households (see more on this here: http://trueeconomics.blogspot.ie/2013/08/182013-anatomy-of-personal-crises-qnhs.html) might offer an insight:

Sixth most frequently cited measure to reduce household expenditure is... you guessed it - car usage or/and ownership. Over 12 months through July-September 2012, 36% of all households have cut back on car usage or/and ownership.

Thus, all vehicles registrations in H1 2013 are running at 27% below their 1997 levels, new private cars registrations are down 38% and new goods vehicles registrations are off 45.3% on H1 1997.  The latter, of course, is an indicator of health in SMEs sector...

1/8/2013: Strategic defaults...

This is "I am not drowning puppies for fun" note concerning my view on the problem of 'strategic defaults':

1. I do not allege there are no 'strategic defaults' in Ireland.
2. I do state that at this moment, there is no evidence of these defaults being a systemic problem of specific dimension.
3. Absence of evidence is not, in my view, an evidence of absence. 
4. I am aware that some people prioritise payments of unsecured debt over secured debt.
5. However, (4) does not automatically imply that a person doing so is out to 'game the system' to their advantage. They might be prioritising payment of unsecured debt for a number of reasons, other than personal gain, e.g.: (a) their credit cards or small credit union loans fund their day-to-day living expenses and as such they need their credit flowing to survive, or (b) their unsecured creditors exerted more pressure on them and they simply caved in, etc.
6. I do not allege that doing (4) above (including for the reasons outlined in (5))  is a correct or a good or an acceptable course of action. In fact, in my opinion, it is not. However, presently, the Irish authorities have failed to secure a clear, accessible and definitive pathway for resolving the conflict between secured and unsecured debt obligations for distressed borrowers. As the result of such a failure, we cannot fault people opting for acting according to (5) above, regardless of what we might think.
7. I am aware of at least one instance where an organisation I am working came across a case of a wilful and strategic default. As the case was brought to us for an independent external assessment and was not represented by us on a client basis, we advised to pursue all legally available courses of action to stop the person from continuing to engage in such activity and we advised the borrower to immediately cease such activities.
8. I am aware of the study that used US research (not US data) to extrapolate to the Irish situation. I find such an approach a good starting point for a debate, but I do not accept it as a robust evidence to base any policy design or analysis on. It is not an evidence and thus (2) and (3) above continue to apply.
9. I am aware of the statements by media and analysts that the problem of 'strategic defaults' in Ireland is growing and is already significant. 
10. My view is that (9) represent unsubstantiated claims, not backed by any real evidence and as such these claims have to be treated as speculative conjectures. Anyone is free to make a conjecture. Some might even opt to be so kind as to seek evidence to back one up. None have a right to impose their conjecture onto actual solution or policy mechanism.

I hope this explains my position on the issue and ends the nonsensical accusations that I am denying the problem. 

My personal conjecture on the topic (backed by anecdotal evidence, so not different from any conjectures on the topic presented in the media to-date) is that there are, most likely, some borrowers attempting to game the system. We do not know how many there are. We do not know who they are. We do not have a means for rigorously identifying them. The correct way for dealing with them is to penalise them at the point of discovery, make such penalty known in advance of any actions to give them a  chance to alter their behaviour.

If the resolution of onerous arrears requires repossession of the property, repossession is justified. It is not my position to argue that all repossessions are unjustified. It is my view that repossessions of family homes should be minimised and, crucially, all repossessions should be preceded by the full, binding and voluntary agreement between the borrower and the lender on how the residual debts, remaining post-repossession action, are to be settled.

Before a point of discovery of their guilt, however, everyone is innocent. 

1/8/2013: Anatomy of the Personal Crises: QNHS Q3 2012

CSO has published Q3 2012 survey concerning the Effect on Households of the Economic Downturn: here.

Some core findings:

• 82% of households cut spending on at least one of the main categories of expenditure as a result of the economic downturn in the 12 months before July-September 2012. 
• Nearly a quarter of all households indicated that they had cut back on five or more categories of spending out of 9 categories listed.
• Over 1/3 of households who used a car had cut back on their expenditure on this means of transport.
• "Some 14% of owner occupied households with a mortgage were unable to make mortgage repayments on time at least once in the previous twelve months due to financial difficulties." This number is strangely well below the current rate of mortgages arrears by accounts. Does this suggest that households tend to overstate their financial health?
• "On the rental side 19% of all renting households failed to pay rent on time at least once."
• 43% of households "indicated that they had experienced difficulties in keeping up with their bills and debts."
• "Two fifths of individuals were concerned about their level of personal debt. Over half of these said that they were currently more concerned than they had been twelve months previously. Only 5% indicated that their level of concern had decreased."
• "households consisting of one adult aged 65 or over said they had the least difficulty" paying bills and funding debt (27%).
• "Of households where the reference person was at work 41% experienced difficulty [paying bills and funding debt] compared with 73% where the reference person was unemployed." Note that 41% is a frightening number, still.
• "Looking specifically at those households which had experienced difficulty in managing bills and debts, 47% of them said that it was due to loss of income, 73% said it was due to higher than expected or additional costs and 5% said the difficulty was due to other reasons."
• "Looking more deeply into the type of higher or additional costs mentioned by those households for whom it caused difficulty, 90% of those households mentioned higher or additional utility bills , 32% mentioned higher or additional school, college or university costs, 17% mentioned higher or additional medical or dental costs and 15% mentioned higher or additional loan or mortgage repayments" Now, run through these again. All of them are state-controlled and state-regulated services, ex mortgages and loans. That's the cost of Irish State policy of extracting rents out of already stretched households.

And a handy chart summarising demographics of debt crisis:

That's right: core crisis impact on debt side - 25-54 year olds, majority with kids and homes, just the crowd that the Government is targeting for cash extraction via higher prices and charges for services like health, health insurance, transport, energy, utilities, education... you name it.

And as you read data in Table 1.1.1. showing details of the households experiencing financial difficulty due to loss of income, classified by main reasons over 12 months prior to July-September 2012, keep in mind - almost all 'employment creation' in the labour market that the Government and 'green jerseys' keep talking about is taking place in the part-time jobs, which cannot cover the true cost of living in this country.

Finally, take a look at Table 1.2. This shows the extent of debt restructuring delivered by the 'reformed' banks. At 7% total - it is laughably low.

31/7/2013: Retail Sales Dynamics: June 2013

Retail sales stats are out for June and anticipation (based on the booming Consumer Confidence index from ESRI) was for a significant uplift in sales. Alas, things turned out to be not what some expected. All data seasonally-adjusted.

• Value of core (ex-motors) sales fell 0.73% m/m in June and was up 1.28% y/y. 
• 3mo average through June 2013 stood at 95.1 down on 3mo average through March 2013 at 96.0.
• 6mo average through June was at 95.5, down on 96.8 6mo average through December 2012.
• Value of core sales in June 2013 was 5.75% below the average for the entire crisis period
• Volume of core (ex-motors) sales fell 0.50% m/m in June and was up 1.21% y/y.
• 3mo average through June 2013 stood at 99.2 down on 3mo average through March 2013 at 99.5, although the difference was minute.
• 6mo average through June was at 99.4, down on 100.4 6mo average through December 2012.
• Volume of core sales in June 2013 was 3.74% below the average for the entire crisis period.

Meanwhile, Consumer Confidence shot up 15.4% in June m/m and is up 13.3% y/y. 3mo average from consumer confidence is at 63.6 which is above 3mo average through March 2013 at 61.2. 6mo average is practically identical to 6mo average through December 2012.

Charts above show clear disconnect between retail sales (volume and value) and the reported consumer confidence index. The disconnect is bizarre. Firstly, neither current, nor lagged average consumer confidence has much to do with either volume or value of what consumers opt to purchase. Worse, since June 2008 through June 2013, Irish retail sales indices correlations with Consumer Confidence are -0.66 for value index and -0.60 for volume index. In other words, rising Consumer Confidence in Ireland tends to be associated with falling retail sales. It is worth noting that prior to the crisis - in January 2005 - December 2007 period, the above correlations were +0.72 and +0.74 respectively.

My own Retail Sector Activity Index has had a better fortune tracking overall activity in the retail sector:

 The above clearly shows the sustained 'flat at the bottom' period of retail sales overall activity (by weighted contributions of volume, value and forward confidence). The recent rise in the activity, driven so far solely by two factors: year-on-year dynamics still impacted by the losses made in May-June 2012  and by the bizarre rise in consumer confidence. It remains to be seen if the index can hold near a 14 months period high attained in June.

30/7/2013: Flat demand for business credit in Q2 2013

Courtesy of the Central Bank of Ireland released last week:

Changes in Loan Demand from Enterprises

Key: 1= Decreased considerably, 2= Decreased somewhat, 3= remained basically unchanged, 4= increased somewhat, 5= increased considerably.

Top of the line analysis: the patient is still in  a comma: 

• Fixed investment (long-term investment in capital and technology) is flat two quarters running. One quarter (Q4 2012) pick up has barely brought us back 1/3 of the way for Q3 2012 contraction and on cumulated basis, we are - in Q2 2013 still below Q1 2012.
• Inventories and working capital demand is flat in Q2 2013, so no short-term build up in either on foot of any sort of positive expectations forward. Cumulated corrections up in Q3 2012 and Q1 2013 are not sufficient to compensate for declines in Q1-Q2 2012. Conclusion: we are still worse off on inventories and working capital demand than in Q1 2012.
• Debt restructuring demand is flat on Q1 2013 in Q2 2013. The only game in town when it comes to credit demand from the corporates in Ireland is for debt restructuring. 

The above does not bode well for the story about pick up in business expectations and flies in the face of the PMIs-signalled 'improvements' in both current conditions and forward outlook. Any early-stage expansion will have to be consistent with increases in demand for Inventories and Working Capital finance, while Fixed Investment will have to pick up if the businesses are expecting significant uplifts out 12 months.