Mass migration probably gives you images of thousands and thousands buffalos crossing the African savannah. The mass migration the Wall Street Journal pointed at is of a different animal. It's us humans and more specific our Chinese friends. Chinese officials estimate that 3,65 billion passenger trips will be made during this year’s 40-day Lunar New Year travel period. 3650000000 trips! That's a lot...
You can visualise the migration pattern live at baidu, here's a screen shot:
We're in the darkest period of the year for those on the Northern Hemisphere who like airshows. So all we got to bridge this gap with, is submerge ourselves in some nostalgia. In the early nineties there were still wonderful events where a very diverse air display was put up operating the show from a grass strip. What would you say of following line-up: a plethora of warbirds (B-17s, Spitfires, Bf109, Corsair, Fury, B-25, Mosquito, Blenheim), a T-33, dH166, some regular airshow visitors (F-27, F-16, C-130, Alpha Jet, ...) and the icing on the cake being Team 60 (Swedish airforce flying 6 Saab 105/Sk 60 Oë) and Team Striji with 6 MiG-29s! And all of that taking off from the grass strip just in front of you (except for the F-16 and Alpha Jet). So, in an attempt to brighten up your days as well, some (grainy) pictures from those good old times!
It's the World Economic Forum in Davos this week. For that occasion Oxfam issued a publication titled 'Working for the Few'. This is the picture that goes with it:
If that doesn't make you stop and think, how about this:
Almost half of the world’s wealth is now owned by just one percent of the population.
And
Seven out of ten people live in countries where economic inequality has increased in the last 30 years.
You can read all about it here.
With growing inequality putting more and more stress on the social fabric that holds nations together, this does not bode well for our collective future.
One more statistic from Davos: Chinese investment in the UK in the past 18 months was equal to that of the previous 30 years.
For some reason this week there were some human interest articles about 100 years of commercial aviation. I say 'for some reason' because the first scheduled flight happened on January 1 1914, so our dear journo's are lagging about 20 days behind. That first flight was between St Petersburg and Tampa in Florida and was operated by SPT Airboat Line. Airboat because the aircraft operating the route was a Benoist Type XIV. It made me think back to those exciting pioneering days of aviation and about the legendary flights of the Vickers Vimy. It was the first airplane that made a successful transatlantic crossing (June 15, 1919). John Alcock and Arthur-Written-Brown were the pilots. After having crossed the Atlantic John Alcock said "Yesterday I was in America... and I am the first man in Europe to say that." Statements like that make my world stop for a moment!
Later that same year the Vimy (registration G-EAO God 'Elp All Of Us) also flew from London to Adelaide. They left Hounslow Heath (now Heathrow) on November 12 1919 and reached Darwin on December 10, 1919. They continued on to Adelaide the home town of the Smith brother's (the pilots). If that ain't adventure, nothing is.
I saw a replica of the Vimy at Farnborough in 1996. The replica repeated the 1919 flight in 1994. Again quite an accomplishment! There is a magnificent book about the 1994 journey of which I have a copy signed by Peter McMillan one of the two pilots (the other one was Lang Kidby).
When you do something stupid and hurt yourself in the process, you tend to learn the lesson and not to repeat the stupidity any more. When we all dived into the 2008 financial crisis, the lesson learned (amongst others) was: too much derivatives on the banks balances and not enough capital to guarantee losses on their (derivative) investments. Basel III (the rules devised by the Basel Committee (composed of central banks and chaired by Mario Draghi)) was supposed to solve this. They adopted the international standard for the leverage ratio* on January 12. Without going into the technical details, here is what you should know about it (but only very few media have reported upon):
it eases the requirements for products, such as derivatives, which make up large parts of the banks' balance sheets
according to Financial Times sources, the effect of the adjustments could be a raise of big global banks’ average leverage ratio from about 3,8% to just over 4% -> This means that the Basel fiddling on how to count derivatives gives the banks a free 0,2% leverage ratio avoiding a capital increase of billions of $ or €.
entry into force is only 2018, and the minimum required ratio is still not defined. Basel has proposed a minimum of 3%, but the US wants to strengthen this (higher %). Europe is lobbying to stay with the 3%. Go figure...
You want to have it crystal clear? Here's a quote from an analyst at BNP Paribas, who said the result was “more of a win for the industry than I was expecting”.
As a result of the Basel III agreement bank stocks went up 2-3% on Monday.
Lessons learned? None. At least we and our politicians have not learned any. The banks on the other hand have learned an important lesson: We (the banks) can gamble the global financial system, be bailed out with public money if it goes wrong, not be punished for it and even better, can start all over again playing the same game.
Often I get the impression that many of us who live in the Western world still haven't grasped that the centre of gravity on economic, political, hey on every level (except for earth's centre of gravity) has shifted to the East. This picture courtesy of the Worldbank should give those who believe they are (still) the centre of the world something to reflect upon. More people live in the highlighted area than outside of it.
Worldbank - More people live inside this circle than outside of it.
* From the Basel website: The leverage ratio "promotes the short-term resilience of a bank's liquidity risk profile. It does this by ensuring that a bank has an adequate stock of unencumbered high-quality liquid assets (HQLA) that can be converted into cash easily and immediately in private markets to meet its liquidity needs for a 30 calendar day liquidity stress scenario."
There is a bit of Taleb-bashing going on on the net (claims that he made wrong predictions about going short on US Treasuries as long as Bernanke is in office; he did make those predictions, and indeed you would have hardly made any money on it, but those criticising him didn't understand Taleb's investing strategy). Anyway, it's not up to me to defend the guy, he does a pretty good job of that himself. However as a token of support and because it is time for New Year resolutions anyway, here's a list offered by Taleb of five ways to have a great day:
Smile at a stranger,
Surprise someone by saying something unexpectedly nice,
Give some genuine attention to an elderly,
Invite someone who doesn’t have many friends for coffee,
Humiliate an economist, publicly, or create deep anxiety inside a Harvard professor.
I read on some aviation news websites that Aurigny Air Services (the carrier operating from the Channel Islands) is considering the Dornier 228 as a replacement for their Britten Norman Trislander. No no no no no! I mean, yes I can understand their rationale for wanting to do this but it would make me so sad to see the Trislander disappear. Those of you who don't know the airplane, it is a development of the Islander (a picture is included here). Only 72 were built in the seventies but they saw operations across the globe (and often in exotic places). The Trislander is longer than the Islander but its most prominent feature is the 3rd engine (turboprop!) in the fin.
In the Channel Islands the Trislander is affectionately referred to as Joey. As I will be there for holiday this year, I at least need to get some pictures of it. For now I only can share a drawing which I made a couple of decades ago.
Phil Everly of the Everly Brothers died last week on January 3rd. The most harmonious voices in music history are no longer. Their music lives on so does their influence. When the news broke of Phil's death, following live performance from 1986 was referred to often as a tribute. So let's listen to The Everly Brothers with Chet Atkins, Mark Knopfler & Michael McDonald - Why Worry
The dark days between Christmas and New Year are a great time to do some reading. So I embarked on a heavy book (literally and figuratively) titled 'Breaking the code of history'. A beautifully glossy publication written by an interesting guy. Dyslectic as a child David Murrin studied physics and became a geophysicist. He spent two years in Papua New Guinea searching for oil in the jungle where he had interesting encounters with local tribes. He then ended up at the London stock exchange on behalf of JP Morgan. Those of you who wonder about that career switch should know that in those days, banks were on the lookout for mathematicians and physicists to calculate the best way how to trade. The author also has a life long interest in history. And all of that background is felt throughout the book. The first 370 pages (yes...) are a walk through history using numerous examples to prove the author's premise on how empires rise and fall. Empires on large and small scales (he saw the same dynamics in the jungle tribes, the stock exchange, countries, nations and our whole planet and he draws a parallel with fractals). The second part of the book he looks into the future and gives us some predictions on what could happen. This is interesting because the book is from 2010 so 3 years on, one can already get a feeling on how right or wrong he is. Without giving you any spoilers, let's just say that my scepticism grew whilst I was progressing through the book. First of all, he only remotely touches upon the influence of new technology on our future and he barely takes new social structures (through social media) into account. But what really threw me is that he applied basic mathematical principles to social science. His basic premise of rises and falls of empires is represented by a gaussian curve. That is of course utter nonsense because it is a fact that gaussian mathematics work perfectly in physics but are completely useless and wrong when they are applied to social science and economy. So I had an interesting read but believe the whole theory is based on one big flaw. Maybe the author sees himself as a Hari Seldon, the 'hero' in Isaac Asimov's foundation trilogy who calculated to the second the rises and falls of empires for millennia to come. That is fiction of course and it will remain so.
We had some good year wishes from our European President Herman Van Rompuy who said that the crisis is behind us (what else would you expect him saying with European elections in 5 months where anti-European parties may gain a lot of ground?). Mario Draghi almost immediately responded that although the crisis is less acute a lot of work still needs to be done for things to really settle down (he means: politicians you have done nothing with the time I bought for you!). As illustration a graph from @komileva showing the debt as a % of GDP comparing 2010 to 2014 (based on the IMF Oct forecast). We are doing jolly well...
I came across an intriguing picture whilst I was strolling twitter and did some research. Yes that is a man standing on a DC-8 taking the art of wing-walking to a whole new level.
Rick Rojatt – The Human Fly did this in 1976 when he mounted himself atop a Douglas DC-8 and was flown at speeds in excess of 280 mph at 5000ft (watch the full 23 min movie here). Wing walking has been (almost) as old as aviation itself and you can still see it at airshows. There is a British team (here's the website - different colour scheme today) who does the Summer airshow circuit. I saw them a couple of years ago at Beauvechain (EBBE). Not DC-8s but Boeing Stearmans and impressive nevertheless! (Yes the lady is really wing-walking in the second picture, have a close look in between the wings.)
