Getting housed.

August 26th, 2007 by De Onion

Housing price increases aren’t just happening here…

The recent re-pricing of risk in US debt markets is going to make that graph look very ugly in the USA as prices are going to fall dramatically over the next few years.

US real estate price index 1890-2006

This has me thinking about the valuations of Bermuda real estate and the relevant factors and trends influencing them (immigration, wages, financing standards, building cost, land availability, red tape, rental yields, interest rates, etc.) Any housing/development policy that fails to account for all of those factors will fail or at best be non-optimal.

Cargo Cult.

August 24th, 2007 by De Onion

Further to this post and this post about appearances and wealth it seems that many in Bermuda are buying into the cargo cult of “success”… and as a corollary the cargo cult of empowerment.

Successfully executing difficult outcomes such as starting business, running a marathon, raising a child, governing a country are all the final outcomes of a process of months or years of consistent work to get one the skills and qualities necessary. They do not come overnight. Just as stuffing feathers in your ass does not make you a chicken, wearing a $1200 suit does not make you a businessman.

The real problem that I have with most of the race baiting and “empowerment” is that it forgets that overnight success is a decade long process of learning the financial and management skills necessary – in the USA it’s often possible to get by based on a smile and a handshake by selling things that have good people to back you up, or if you continually bounce from one quick buck to another. In Bermuda that’s not an option because people will know who you are and pretty quickly the only people who will work with you are other people trying to make a quick buck without the underlying competence to really produce wealth for themselves, their employees, and their stakeholders.

We are mistaking confidence for competence. There, I’ve drawn my line in the sand.

Ignorance is strength.

August 24th, 2007 by De Onion

I’ve been meaning to write about media bias for some time, but Christian over at hit it first…

Just as with the American Republicans it seems that reality is biased against the PLP.

BHC Scandal – reality is biased
Pay to pray – reality is biased
Graduation statistics – reality is biased
Tourism statistics over 9 years – reality is biased
Housing affordability – reality is biased
Housing plan – reality is biased
Premier’s behaviour – reality is biased
Racial makeup of the UBP – reality is biased

That’s a long list… and is really just a start.

I think Christian is dead right – that as the White House press corps became pussycats and Fox news became predominant the American public were fleeced into supporting a lot of things that were rational responses had the politicians been telling the truth. However, the politicians were lying and now there are hundreds of thousands of dead Iraqis, a few trillion in additional national debt, and a plethora of failed policies.

Don’t let this happen to us. Stand up – ask the hard questions. Demand answers.

Hot air, overheating servers or politicians?

August 15th, 2007 by De Onion

Apparently the New Onion was down for a while this afternoon, I have no idea why – but it wasn’t anything I did and appears to have been related to our host’s sql server.

…and now back to the regularly scheduled social commentary…

Question: How do you tell when a politician is lying?
Answer: His lips are moving.

If you still find the above joke funny then perhaps you haven’t been reading the news, in which case I suggest you take a second to check out this nifty article on detecting BS, then pick up the local papers… any one will do any day of the week, it seems.

Lies and damned lies. Statistics next week.

August 14th, 2007 by De Onion

Still busy.

Let’s fight bad theories with more bad theories! Bring balance to the force!

At some point I’m going to sit down and talk about the actual factors that predict incomes, happiness, social mobility, and general life success… there is good research on this, and no need to resort to journalism professors to do the work of economists and psychologists.

Good Government.

August 13th, 2007 by De Onion

Super busy… so here’s a link for thought… on politics and governments making badly conceived and badly executed investments (Iraq, BHC, Faith Based Tourism, etc.)


August 6th, 2007 by De Onion

In my last post I neglected to include the link to the Bloomberg Savings calculator.

The link is here.

My apologies

I’ll raise you a Mars for a Venus.

August 4th, 2007 by De Onion

One of the more interesting questions in dealing with sexism and racism is to ensure that one actually understands the mechanics behind aggregated differences between populations. In many cases the results are often very surprising as this article discusses. Obviously, the solutions to gender inequality that stem from differences in haggling behaviour are very different than those that stem from outright sexism.

This is one example of a whole slew of similar studies that find surprising explanations for the seemingly obvious (like one I can’t dig up at the moment that finds that a material cause of wealth inequality between otherwise identical black/white American families is a product of different risk tolerance in financial assets and the corresponding higher return of riskier assets). To gain an appreciation of the difference this would make check out this calculator and see the difference in value of $1000 invested at 6% vs. 8% per year over 30 years (don’t forget to set monthly contributions and taxes to zero, that’s Bermuda’s unfair competitive advantage when it comes to savings).


August 1st, 2007 by De Onion

I am violating my rule of not commenting on current headlines, but nonetheless I think there’s an underlying fundamental principle at work here.

Southlands would never get approval under a regular planning process. This implies either:
1. The planning system is broken and does not meet the needs of Bermuda.
2. Southlands is a bad idea.
3. Or both.

The problem I have with it is not so much that the construction of a new hotel is happening, it’s that it’s only happening because the government is willing to throw away the rule book for friends and family – which is symptomatic throughout the government. If it requires ignoring rules to do things that make sense then the rules need to be changed to allow a level playing field – that’s what capitalism is good at, sorting out who is the best when given a level and fair playing field.

Incidentally, this lack of amending rules to reflect realities of life in 2007 is the same reason that there’s a housing crisis – and reflects a huge failure on the part of government. The solution, of course, would be to ensure that the Bermuda plan was updated, Planning Department was well run, and the laws met the needs of the people.