dtcwee: The Value of Nothing

A long way for coffee https://carfreeaustralia.blogspot.com/2024/06/ascot-park-to-mawson-lakes-long-way-for.html

 The ins-and-outs of a 28 day Adelaide metro pass .

What is Private Equity? Private equity refers to investments made in companies that are not publicly traded . The goal is to achieve high returns by improving the company’s operations and then selling it for a profit. Think of diamond-in-the-rough companies in which value is difficult to see, (but which you are assured is there).  What is the Efficient Markets Hypothesis (EMH)? The EMH states that share prices reflect all available information. It posits that stocks always trade at their fair market value , making it impossible to consistently outpe

Economic justice is so last season. The late Venezuelan president Hugo Chavez called the International Monetary Fund ("IMF") a tool of US imperialism. Tanzania's president John Magufuli, accused the World Bank of interfering in his country's affairs. That's a novel way to treat one's creditors. Applicants for home loans don't call their banks neo-colonial oppressors as a matter of course.

 ... not a human guarantee. When someone sanctimoniously claims something is a "Human Right", they often mean that they should get it for free. So what does it mean that housing is a human right?

The cost of kids vs residential care. It used to be that children were a retirement strategy. You'd gently pass away in your mortgage-free bed surrounded by loved ones. Old folks' homes were for lonely deviants who failed at family formation. Let's compare ...

I used to agree with the mainstream view that an aging population was deflationary. The logic: old people don't buy new stuff. Real world examples: Japan, Singapore, Germany, etc. If inflation did pop its head up, governments would reflexively smash it with higher interest rates, never mind the resultant unemployment. Why? Well, the US did it in the 1970s. Since then, much of the neo-liberal project has been to transfer power from workers to consumers. Voters were happy with that trade-off then, so they probably would be again. The numbers stack up politically. Inflation affects everyone. Unemployment only affects workers. I don't work. I'm team higher unemployment. Anticipating a future of stable or falling prices, I relaxed going into the COVID pandemic.

Why not? Calculators sure changed mine. A lifetime ago, in a safe but stifling job, I found an online mortgage calculator that visualised the power of extra repayments. Having just borrowed to buy a home, it opened my eyes. I was hooked. Learning that early escape from debt was possible made it my obsession. I checked that calculator after every stymied project and pointless restructuring. So, like, twice a day. With few opportunities to flex my skills in my IT role, I wrote other calculators to rationalise and strategise my approach to life.

Borrowing to invest in an asset will not simply multiply your returns. It is more accurate to say that leverage multiplies the difference between the returns on the asset and the cost of borrowing. This post was originally published on 18-Dec-2016. I have since made an interactive leveraged returns calculator . Short Form Calculation Return on Equity = Interest Rate Differential x Debt to Equity Multiple + Asset's Return For example: 8:1 Debt to Equity at 4% debt interest with an asset return of 5%: 1 x 8/1 + 5 = 13% Visualisation looks a little something like this: ROE Alpha (Y-axis) by Return-Borrowing Differential (Z-axis) by Borrowing (X-axis)

Inflation in Australia may be driven by corporate profiteers, but not who you think. 

The STI benchmark for Singapore's stock exchange is easy to visualise as it has just 30 well publicised constituents. Go on, click the sector headings to drill down. It's easy to see how diverse it is. Is it too concentrated?

The same people whinging about low interest rates debasing the U.S. dollar ... After snoozing through the period of zero interest rates, we are bound to awaken with some suddenness to the consequences of monetary debasement, which we have been collectively ignoring for too long. ... now complain that raising interest rates will wreck the economy .

Declining labour share of income is no sign of foul play. "Productivity and profits are up, but real wages are down." is an increasingly common refrain, implying that business and government collude to deprive workers of their fair share.

Quick visualisations of Australian government tax and spending to provide context to the 2022 federal election. In 2019-2020, Australia's governments collected about AUD$552 billion in tax and spent about AUD$578 billion .

Which industries are ripest for technological disruption? Australia labour productivity and value-add by industry.

Versus robots. "No! Demo-GRAPH-y!" The flood of low cost Chinese labour will ebb, according to Goodhart and Pradhan in "The Great Demographic Reversal", leading to: higher inflation. manufacturing elsewhere becoming more competitive. ( un-paywalled from Nikkei Shimbun ) Apparently good news for those in developed nations who have long clamoured for fair prices and fair wages, and who blame globalisation for undercutting them. But when? And for how long? Well, not right now . China labour costs are stagnant, not rising. source: tradingeconomics.com Even as China's working age population loses 5 million a year, assuming the baseline scenario. (Source: Reserve Bank of Australia .) One may scoff at the suggestion that these lost workers could be - or are being - replaced with robots or other automation, such as AI. Robots have been around for decades but opinion on how they impact workers vary, from ' a little ' to 'responsible for  50-70% of i

Protectionists hate this one weird trick. For every complex problem there is an answer that is clear, simple, and wrong. -- H.L. Mencken The Labour Force (LF) framework supposedly works like this: If more people enter the labour force than get jobs, the unemployment rate goes up. If less people enter the labour force than get jobs, the unemployment rate goes down. Sounds fair, right?

Q: How can you tell if someone has an investment property? A: Don't worry, they'll tell you.

Why you should want to work. People who don't want to work are often presented with 'The Ant and the Grasshopper' to prime them for shame and deprivation.

Don't hate on spenders. "What, like those folks who brag about taking the entire family to Disney World?" Yeah. Them. Those status-signalling conspicuous-consuming early-adopting aspirational arrivistes. They wanna flex buying SUVs on credit rather than a used station wagon with cash? Let 'em.