I followed the herd with the intelligence of a sheep

Here is a negative scenario for Ireland, which I'm not necessarily predicting, I'm just saying it is a possibility:
A couple of the banks default, triggering the government guarantee.
On the international money markets no-one wants to buy Irish Government bonds and so the government defaults. Thus no civil servants get paid.
There is then a 'run' on all banks causing the last standing banks to collapse. Then the real fun starts...
With massive deflation bankruptcies soar. When the government eventually gets back on its feet it finds it has massive debts which will take 30 difficult years to pay back.
Huge waves of emigration return and has a result we have hundreds of thousands of empty homes round the country which are worthless and are allowed to fall into ruin.
Just as we had deserted 'famine villages' in future we'll have 'credit crunch villages', those new developments round the country which will be left idle, a reminder of the folly of us all.

As for the blame for all this. Well, it's been caused by idiots, people just like me who bought a flat right at the top of the property market. When it came to understanding the real value of the flat I had followed the herd and used the intelligence of a sheep. We were all fools and kept pushing the property market up and up. We never looked down.

I had read of bubbles in markets before, the Amsterdam tulip bulb mania, the Wall Street bubble in the 1920's and so on. It is so easy to say 'oh those fools'. It is quite a different experience to be one be one of them.

I'm very confident there will be lots more market bubbles to come. It is just a part of human group dynamics. If you ask me how much is a tulip bulb worth, then I say, whatever someone will pay for it. If you can find a dimwit who'll pay you 4 fax oxen for one. Well then that's what is is worth. Looking back now we can see that it certainly is not a sustainable price, but there are fundamental reasons why can never have fore-sight like hind-sight.

One key element of economic markets is uncertainty. If they were predicatable, then they would be fundamentally different. I would never expect a group of gorillas to fully understand and be able to predict the dynamics of their own group interaction. A human, who is more intelligent has a chance to understand the gorillas. But to understand the dynamics of a group of humans, you'd need to be more intelligent than the members. If we had evolved to be more intelligent creatures, then we'd have an even more complex society, one which we still wouldn't be able to fully understand.

Freedom of Speech

It seems to me that one of the significant contributing factors in the Rwanda genocide was RTLM Radio which encouraged hatred and ultimately the slaughter of Tutsis. Though we will never know for sure, had the station been put off the air, I suspect, things would have turned out very much better.

If we always support the freedom of speech, then the radio should have been allow to pump out its calls for genocide.

If we were to ban all broadcasts that promotes violence, then a discussion on whether the US should continue to use military force in Afghanistan would not be allowed.

If we close down media that encourage the law to be broken, then we have stifled discussion on unjust laws.

If we censor pieces that are deemed incitement to hatred, then I would be unable to honestly write my thoughts on the Saudi Religious police who have arrested and charged a 75 year old woman with mingling with two young men, one of who she says she helped raise since he was a baby and the other was delivering some bread. The unfortunate old woman has been sentenced to 40 lashes and prison term. ( see UPI news report )

If we forbid the encouragement of the ethnic cleansing, then the Bible would at the very least need to be edited, removing for example the requests from God that Amalekite men, women, children and infants should be butchered, ( see Samuel Book 1, Chapter 15, verse 3) It cannot be claimed that the Amalekites are entirely a historical people, as the council of advisers in the Reformed Pastafarian Church call are known as the (modern, pacifist, pro-Israeli) Amalekites.

As is often the case, it seems that it is difficult to make up a blanket rule that will sensibly cover all scenarios.

Thoughts and one-liners

Being first is a good start.

Some people blame the media for the sexualisation of teenagers, I blame the pituitary gland.

Its was very sad, the marriage had the most tragic ending of all: one of them died.

All firms will go out of business, but some will out-live you.

People can thrive without being a member of a religion, but religions go extinct without members, so we know who needs whom.

Of all the religions that people have had through the ages, the vast majority are now extinct.

He was so unsuccessful, the women found him unattractive,
she was so successful, the men found her unattractive,
when they met, they both chose celibacy rather than each-other.

Take everything away from a man and he'll still be able to have happy days. Give him everything he wants and he'll still be able to have miserable days.

The military commander did not know the meaning of the word retreat. It lead to awful confusion.

The difference between an expert and an ordinary person is a few words of terminology.

I know what those advertisers are up to, but unfortunately they understand how my mind works so much better than I do theirs.

All that I know of him is what I learnt while making up the wikipedia article about him.

I prefer watching live sport rather than Shakespeare's Hamlet, because the emotions of the players are real rather than faked by actors and I don't know what's going to happen at the end.

If there is a law in the US banning gay couples from forming a marriage contract, then one solution would be to drop an 'r'. Gays could form a (single 'r') mariage contract. So the effect of the law would be to ban gays from using a particular spelling.

To suggest that the responsibility for the problems in Africa is not with the Africans is condescending to them.

I don't watch reality TV, because when I want to hear opinionated, illinformed people talk nonsense, I enjoy meeting my own friends down the pub.

All the other artists were being very different and original, so to blend in and be accepted, I had to do the same.
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How to stop a speeding train:

First World war approach:
Get 20,000 men onto the track, packed tightly, each linking arms with their neighbour. Any men who refuse will be shot for cowardice.

Second World war approach:
Bomb the line from a plane, killing many of the passengers and people who live near the track.

The thinking man's approach:
Switch the signal light from green to red.

Free Advertising

I'm a big fan of wikipedia. It is not perfect, it has some flaws, but overall it works incredibly well. Web-users together co-operate and create something amazing.

Following in the footsteps of wikipedia other "wikis" have been launched. i.e. websites whose content is created and edited by the general public. For example there is wiktionary.org with is a dictionary. I find conservapedia.org quite amusing, it is similary to wikipedia, but it is written from a conservative US perspective.

Now, there are many cities where it is almost impossible to find out the cost of basic services such as dentist or electricians. But what if someone built a wiki which allows people enter the name, address and prices of various services, then suddenly everyone can find out how much the plumbers in their area cost.

Well, such a site exists, it is GingerWiki.com


From a consumers point of view, it is a great source of information on the prices of services in your area. If you want a table of prices charged by dentists in Ireland or prices of doctor visits in Hong Kong, then GingerWiki.com is for you.
But because it is a wiki, consumers themselves can input the names, contact details and prices of services. For example, if you've been to a dentist who has obsurdly over-charged you, then you can use GingerWiki.com to warn the people in your area.

From a small business point of view, GingerWiki.com effectively offers free advertising. Whether or not the firm has an existing presence on the web, GingerWiki.com offers a page for free. It is very easy, start by going to the add a new business page, then fill in a form indicating the company contact details, services offered. It is also possible to indicate prices and the company logo can be added as well. Then when the Save page button has been clicked, the page will immediately be available and it will include a map showing the location of the premises, which is worked out using the postal address supplied.

It is not important to vote

If you live in a democratic country it is not important whether or not you vote, which is not to say that the right to vote is unimportant. When it comes to supermarkets, it matters to me that there is competition between them for my business. That said there is no need for me to frequently check the prices of given products in each of the shops near me. By not making an effort to find the best bargains it could cost me more than a few percent of my salary as I waste money that could have been saved.

On the other hand, the last time I voted I was living in the UK and there I had a choice between the two parties. The main difference that I could see was that one was going to put up tax by a couple percent to fund an improved health service. To me I wasn't something that mattered much to me. Even if the politicians kept their word after elections, for many people life goes on very much the same whether one party gets in or another.

However, as a general rule, people are power hungry and politicians are no exception. By having a democracy politicians are motivated to please the people, well at least to please the people that vote, or more specifically the swing voters. Those who consistently vote along given party lines aren't really participating and more than the non-voters are.

It is important that people have the power to vote out politicians that don't do well, but whether one member of the population actually votes doesn't make a difference.

You can't fly and grow at the same time

The problem with flying and growing at the same time is that flight is very tricky and controlled flight is nearly impossible. But it is not completely impossible, as long as you get everything absolutely right. Having different parts growing at differents rates is just not going to allow you get off the ground.

Another little issue is that flying models are not scalable. If you were to tripple the size of everything in a helicopter, then you'd end up with something very dangerous. The only good news for potential passengers would be that it most likely wouldn't even be able to take off.

Looking at teenagers it is clear to see that growing is slightly uncontrolled process that may produce a swan in the end, but there is a long period of being an ugly duckling.
And speaking of swans have you ever noticed that small (young) signets don't fly.
In fact the same goes for all birds. They wait till they are the same size as their parents before flying! This is in contrast the ability to walk. For example a lion cub can run and jump even though it is much smaller than its parents. The dynamics of the walk of a lion cub are slightly different to that if an adult. But not fundamentally.

Also insects can't fly and grow! A fly will start life as a maggot or grub, then turn into a pupa and after that start to fly. By the time a fly flies, its growing days are over. Sometimes round the house, mostly near the rubbish bin, I see small flies that, to me, look just like miniature versions of the common house fly, well I can be sure that tiny ones are not the young of the larger ones. They are in fact a different species.

Bats are another fine example, their young they are cared for and fed by their mothers until they are ready to fly, by which time the growing will have stopped!

If an animal were to try to fly and grown then the growing rates of different body parts would need to be very precisesly governed. Also subtle changes in wing shape would be required and timed perfectly to deal with the altering body mass. A big ask.

So in summary:

• a controlled walk is not tricky and is more or less scalable so you can walk and grow.

• a controlled flight is very tricky and it is not scalable so you cannot walk and fly

Bankers

Summary:
For economic growth we people to take risks by lending money.
For long term stability we need banks that don't go bankrupt.
Thus we need banks to pass on the default risk.

Details:
It seems that the word 'banker' sounds like a swear word more-so now then ever before. Banker bashing is a popular pursuit in blogs and newspapers. But seldom do we hear the view from the inside, so let me try to start to remedy that.

Banks are full of regular people, who can show kindness and compassion, particularly to friends and family. They will hold open the door open for a little old lady, but when it comes to large sums of money, they will be, for the most part, very selfish. It is reasonably rare for individuals or firms to give more than 1% in truly charitable donations and the giving that is done is often used as a form of relatively cheap PR work.

Overall I think it is fair to say that banks are selfish institutions, full of selfish individuals. People just like me. In our desire for money we are very much like other groups. In our defence I would say that we are perhaps more open about aims than some. For example politicians frequently claim that they are motivated by a desire to do go and to help others, but their actions are much more consistent with a group whose primary motivation is a lust for power.

In banks, the executive boards have some significant power, but it is not absolute. Ultimately they are accountable to share-holders, who do from time to time demand the sacking of the board.

Suppose, back in 2004, a board member of a major bank were to present to the board the suggestion that they seriously reduce the credit exposure of the bank, which would drastically reduce risk of bankruptcy and indeed the profit of the bank. The board would know well that if they were to take up this suggestion then the share-holders would have them all sacked. If their competitors are making billions by taking large risk, then they are very heavily pressurised to do the same.

Roughly speaking, businesses work for the benefit of the share-holders. They take risks to generate profit. Outside of banking, firms go bankrupt reasonably frequently. Only a tiny fraction of firms that were in operation in 1900 were still going in some shape or from in 2000, without having experienced a bankruptcy and bail-out at some stage.
It turns out that in fact banks have good longevity compared to pretty much any other industry.

However, if we want any form of economic growth, then we need there to be risk-takers. We need to allow firms the right to risk bankruptcy. However suppose we say that the collapse of a retail bank is too devastating for an economy for a government to allow, then we cannot let banks take much risk at all. Any time money is lent there is a risk. So, if we absolutely can't let the banks go bust, then we need to have other risk takers. One solution would be just to let the banks just be intermediaries, not wear-housing the default risk, but rather passing it on. Hedge funds have the potential to be very very helpful to an economy, if they can be encouraged to take credit risk. If they are paid enough of course they will.

Individuals with deposits in banks could also be paid to take on some additional risk. For example an investor could be offered the following:
Choice 1:
Lock away 100,000 Euro for 1 year in super-safe bank and you'll get 1% interest.

Choice 2:
Lock away 100,000 Euro for 1 year and you'll get 6% interest, subject to Ryanair not defaulting on any of its debts. If Ryanair defaults, the 100,000 Euro deposit will be converted into a Ryanair bond, with face-value 100,000 euro.

It is clear, it is simple and we can have safe-guards against mis-selling.

The benefits of offering choice 2 to investors are:
1: Ryanair, and companies like it, will be able to raise money more easily
2: Individuals can get better returns on their savings, by choosing to take some risk
3: The safe banks which the government won't let to bankrupt are exposed to much lower credit risk.

Choice 2 above is basically a 'credit default swap'. They are not very popular at the moment, but they have great potential to come back in future.