Extolling the virtues of running

Let’s explode some myths about the dangers of running.

via Running won`t kill you, or hurt your knees – To Your Health | Moneyweb.

When social and market norms collide

“Social norms include the friendly requests that people make of one another. Could you help me move this couch? Social norms are wrapped up in our social nature and our need for community. They are usually warm and fuzzy. Instant paybacks are not required: you may help move your neighbor’s couch, but this doesn’t mean he has to come right over and move yours. It’s like opening a door for someone: it provides pleasure for both of you, and reciprocity is not immediately required.

The second world, the one governed by market norms, is very different. There’s nothing warm and fuzzy about it. The exchanges are sharp-edged: wages, prices, rents, interest, and costs- and- benefits. Such market relationships are not necessarily evil or mean – in fact, they also include self-reliance, inventiveness, and individualism – but they do imply comparable benefits and prompt payments. When you are in the domain of market norms, you get what you pay for – that’s just the way it is.

When we keep social norms and market norms on their separate paths, life hums along pretty well.

When social and market norms collide, trouble sets in.”

Edited from: Predictably Irrational by Dan Ariely

The health benefits of yoga

Summarised in a very nice infographic

Marcus gives big five banks a hand

In an unprecedented move to bombproof the country’s major lenders, South African Reserve Bank governor Gill Marcus has set up a R240-billion facility to help the big five banks to meet tough global liquidity requirements.

The facility was approved this week after an 18-month investigation exposed a 32% “shortfall” by the big five to meet the liquidity coverage ratio, which requires them to hold sufficient liquid assets to cover net cash outflows for 30 days in a crisis.

Of the seven banks that underwent the liquidity stress tests, only the two smaller lenders, Capitec and African Bank, passed. Standard Bank, Absa, FirstRand, Nedbank and Investec met only 68% of the liquidity coverage ratio and were deemed unable to make up the shortfall because of structural challenges in the South African funding market.

Although the facility is not in the same class as the European Central Bank dishing out €1-trillion in long-term refinancing options to struggling eurozone banks to avert a collapse of the system, it is a lifeline to the larger players and amounts to a subsidy of sorts or, as some analysts put it, “cheap insurance”.
All the banks welcomed the news and were unanimous that it guaranteed the stability of the system.

South Africa’s limited savings pool presents dilemma

Basel III is meant to make banks safer and prevent a replay of the 2008 financial crisis. When financial systems collapse, the cost to society is generally higher than the collapse of other industries and the risk of destruction is greater because banks span many segments of the real economy, as is evidenced by the eurozone crisis.

Given the structure of the South African market, where banks borrow in the short-term market to fund long-term assets such as 20-year mortgages, the big banks would struggle to meet both the liquidity coverage ratio and the net stable funding ratio.

Part of the problem is that South Africa does not have a large enough savings pool from which to draw quality long-term liquidity and local banks are too reliant on volatile wholesale funding to finance long-term lending.

The banking sector is characterised by several structural features, such as a low discretionary savings rate and a higher degree of contractual savings that are captured by institutions such as pension funds, provident funds and asset managers.

“The South African consumer is the net borrower. I can’t see where the liquidity will come from. It will take a generation to change structurally.”

Edited from the Mail and Guardian

Its getting hot in here

Two recent studies show the effects of climate change are being felt from all over the Earth, although some will argue that long term climate trends are to blame.

According to one, Americans just lived through the hottest 12 months ever recorded (record-keeping began in 1895) as well as experiencing the third warmest April on record.

In Australia another report announced that the last 60 years have been the hottest in Australasia for a millennium and cannot be explained by natural causes.

Coincidence? Or a strong case for reduction of carbon emissions? Its in our hands.

“There is no such thing as coincidence, just the illusion of coincidence”
From the movie: ‘V For Vendetta’.

Questions for JP Morgan

When can we expect  stock price to again approach the level at which it was trading when Chase acquired JPMorgan in 2001? Have you seen the nice steady appreciation of Triodos Bank’s stock price over the last decade which consistently wins awards for being the leading sustainability bank, making productive loans to serve the transition to a sustainable economy?  Perhaps if you spent less time speculating, you could focus on this critical component of our economy’s future? Does this firm any longer have a purpose?  Is the purpose consistent with practice?  Have we lost sight of the profession of banking?  Is risk taking and generating bonuses for bankers a purpose commensurate with the largest bank in America and the legacy of JPMorgan?

Edited from “10 Questions JPMorgan’s Board of Directors Should be Asking“

by John Fullerton

 

How much is too much?

In 1976 the average US CEO earned 36 times what an average worker did.

By 1993 CEO’s were paid 131 times more.

Also in 1993, American Federal regulators introduced legislation requiring companies to reveal details about the pay and perks of top executives.

The intent was to discourage boards from outrageous salaries.

But media and compensation consultants lead to widespread comparison which only increased the trend.

Result?: in 2009 the average CEO in the USA earned 369 times as much as the average worker, treble when the legislation was introduced and more than ten times the difference in 1976.

All of this despite many studies which have found countries with happiest people are not those with the highest personal income.

Source: Predictably Irrational by Dan Ariely