In the Ivory Tower, computers never crash.

In a curious, nay bizarre, article in today’s FT (p9), Kenneth Rogoff of Harvard argues that there is too much paper money (i.e. cash) around, which is about $4,000/capita in the developed world.  (His recent book argued there was too much debt.)  He proposes doing away with it, beginning with the $100 dollar bill.  This will increase the government’s ability to monitor and, eventually, control every aspect of our spending, which he views as a good thing.

Is it taxes, regulation, or just old age?

U.S. Business failures have exceeded startups since 2009.  The rate of business failures seems relatively steady, while startups have been declining since at least 1978.  If a loss of 2%/year were to continue, there wouldn’t be any businesses left in fifty years. (Economist.)

Has the US passed the private leverage baton to China, and will the results be the same?

Private debt was declining in China until 2008, but then everything changed in a big way.  One has difficulty in imagining a very soft landing.

Please Dr. Yellen, are we taking enough risk yet?

An article in the FT by Patrick Jenkins yesterday identified 5 dangerous bubbles: 

1.      Leveraged loans.  Securities representing $260 bn in covenant light loans were issued in 2013, up 69% from previous peak in 2007. 

2.      ETFs.  Liquid securities composed of increasingly illiquid assets that must be liquidated as EFT's are redeemed have proliferated.

3.      Eurozone sovereign debt.  Peripheral countries like Portugal are paying the same rate as the US treasury.  (Does this reflect overconfidence in Portugal or lack of confidence in the US?) 

4.       European bank paper.    A DB-issued cramdown hybrid bond was 10x oversubscribed, and Spanish non-performing loans quoted at prices that would yield 14% were they paying, which they are not. 

5.      UK property in the southeast.  London house prices have gone from 4x the average earnings of first time buyers to 8x.

The mouse that snored: Shouldn’t the newest EU members be the most enthusiastic?

Slovakia led the 28 EU member countries in apathy in Sunday’s parliament election with the lowest turnout, 13%, compared an EU average of 43%.

With thieves and morons so-well represented, why leave out those of us who are overweight?

A Michigan State University study documents weight bias in U.S. elections.  Overweight candidates get fewer votes than do the svelte, and overweight women fare worse than men with the same profile.  This means the third of the population who are obese are underrepresented in office. (From an article in a paper picked up on a Toronto street on Monday)

Is it still possible for a Nigerian politician to be too trusting and naïve?

Interviewed on Al-Jazeera TV, a Nigerian senator expressed surprise that military could not cope with Boko Haram. After all, he said, the military are given $10 bn a year. Even if they siphoned off 75%, they should have enough resources to defeat the terrorists.