Disaster

Now, here is the take. What to do when you find yourself carrying your group and yet told not to lead them. Your leader though depends on you, using you. He doesn't give you much credit though for what you do. He appears in charge ad presents to the outside as figure head. People start recognizing your capabilities and achievements, though you earn little respect since you can't make thedecision if asked but need to ask your boss. Finally, others around you in other groups get recognized for their work butyou keep plugging away. When you ask, you are told to be patient that your time will come. Now people that came after you get promoted and you end up with more work because your team is bleading out. You have the choice to leave you are told, just wait a bit more.
Your job is sought after in the market. Recruiters keep calling you, but you like your company just not the work structure of your group. Your boss is a nice guy, just a bit behind in modern management of valueing your employees. You even tri3ed sitting down with him assuring him that you want to get through this together and that you'd like the chance to prove yourself even more than you have shown before. Your last review showed you were working above expectations.
Does that sound familiar? Tell me what you think! I curious how you would handle the situation.

Now that is slacking....

Had I thought I wasn't writting a lot than this an even bigger prove that I am slow here.
I haven't been writting for almost a year...
Now how did that happen?
1.) Well, I could say that I just got a good job and that I didn't have much time to write -- but that would only be an excuse, though true, that's not all
2.) Or, I could point out that my labtop is still broken and I am waiting for getting it back since March 06 -- however, I have access to the web on my desktop and so could if I wasn't too lazy or so write a post here and there. That's not either...
3.) I can argue that the divorce I find myself and the constant fight with my wife since Oct 05 leaves little room for fun and that is perhaps the closet of all reasons.
Truth is, I can't acces this site at work and I haven't had much to say about current events. I simple haven't had the time to read newspapers (though I haven't done much of that in the past!) -- I don't get to surf around and read a lot. Other than psychology books and books on how to get through tough time, I rarely get a good book opened..they sit there for better times. But enough of the self-endulgence of how bad my life is. It is really not that bad. It's getting much better, believe me.
I have done so much in the recent months that I longed for in the last several years and didn't get the chance to do (yes, I didn't make enough effort to do them! My own fault!). I went on trips, skied again, began running again and started rollerblading. I went rock climbing and think I will start picking that up regularly. I love my job, as hard as it is. I am working on statistical modeling and help creating a demand/supply plan tool for a large corporation with more and more responsibility for the entire project. I found that I have som any friends that I ca count on and that are true friends. My family has gotten closer to me despite the great distance of the Atlantic between us. I also started to long for qualtity in art and culture again. The number of movies I watched in the recent months have surpassed -- I believe -- 100!
So, my new years resolution (as if I need just one!) is to write more, do more and become more active in my own life! Done with the passive waiting for someone to acknowledge me and make me happy. I will do that myself, thank you! 8)
Now of to the treadmill....it is vitamine time and the commercials say Ihave to be slim and strong!

Slacker Myself

I am so embarrassed. I have not gotten a chance to read anything in the news lately nor to keep my own blog running. Now I understand why I came across so many blogs that were outdated when I started out with my blog. It actually takes time to write things and second which is almost equally as important you have to be able to have an opinion on something worth writing about. I admit I currently lack both. My work is taking up a lot of my life. Unfortunately I am bound from publishing it. Only so much, it sucks all my creativity I have left out of me. There are no guidelines on how things have to get done. There is no format or precident, only expectation of what the result should be like if it turns out to be what is expected. But like so often, the more people involved the more differ the expectations on what the result should look like. Still leaves me with the question on how do I get there. I am trying on my own to go beyond the traditional modeling and move into more dynamic modeling, allowing VARs to replace the current forecast systems. You should see the resentment and irritation I earn from my superiors for even attempting to think outside the box. But where else do you find true progress if not resisting the "that's not going to work!" or "why would you do that if the old way still works?" So I want to put in the extra mile to see where this leads, if it doesn't help, then I at least can say I tried.
On another note, I am so proud. My daughter and I spent all morning watching the Olympics in Torino. Last night we had a party for the opening ceremony and it makes me feel so good to see how much she is interested in the games. I can't describe what it means to me. The Olympic spirit of "participation is all" has been with me for all I can remember. To be there and give your best, even when you know that there are others out there outscoring you and still be proud of taking part and giving it all, is so fabulous. There is not a better lesson in life that I want my daughter to get. There is no better role model then Eddie "the Eagle" Edwards ( http://www.nyt.co.uk/eddiethe.htm ) -- link below title -- in my view. Passion was my favorite theme of the ceremony that could not have been more colorful and fantastic than from Italian's beauty-oriented and passionate people. No-one combines better being relaxed/laid-back and yet enjoying life and be succesful. Where can you learn to be like that? Anyway, I envy the athletes and as every time I watch the Olympics it tickels me to go out there and persue my own passion. And here is the sad part, I have no passion I currently persue. Reality tells me that these Olympics won't change that neither, but I can still dream. I mean that is also part of the Olympics that you can dream of winning your goal, right? With that, lets see how long it takes until I write the next post and how much of a contribution that is.
Let the Games begin!

now, where is our economy?

My work life has taken over my regular postings on this page. I am still here only have to find the time to keep up with the news. Additional, it hurts no being able to read Paul Krugmans column at the NY Times for free anymore. I don;t buy the paper, since I have no time to read it on a regular base and can't afford to support a paper I don't use OTHER than for reading Paul's excellent notes. So I will have to find a better way to read him (I finished his books a while ago!)

I am working right now on implementing a Vector Autoregressive Model on consumer sales patterns and trying to find a good feedback systems for my employer. Not easy to convince people that there is a life beyond simple autoregressive models and that there is indeed canolization effect between products. But this only as a personal note!

I had an interesting conversation today with my wife's grandparents about the state of the American Economy. And here is a point that I haven't thought about. Observation shows that Christmas shopping seems at least in terms of parking spot availability on the mall vicinities booming. This is contrary to the after Thanks Giving findings that consumers were staying away from the Nordstroms, JC Pennies, and Marshall Fields, but rather go for the Walmarts cheap "toys". Bargaining with tight belt and empty pockets this christmas shopping opening reflected the sad state of our economy. The announcement of tens of thousands lay offs by Ford and GM, while record high number filed for bankruptcy, just put the nail into the already rotten billboard of the decaying economy. So why now the myth of full parking lots at the mall next door. Numbers have to back my finding, but I have a feeling that either the increase in consumer dept or the mere window shopping of what one could by or wish for if the money was there, is responsible for it. Now if we keep having the same weather pattern this winter that we had in the fall, one could see a frosty retail business. Who wants to shop in the cold or who will deliver during the next snow storm if you buy online?

The Pilot is leaving the ship...

I have this great picture in ming of Otto von Bismarck coming down the gateway of the ship! This week we finally heard who the President chose to nominate (whatever that may yield!) as the new FED chairman. Greenspan's boots as sure deep to fill, but what changes will Ben Bernanke bring? For ones, the nominee has actually qualifications and is not know by the President personnally for over a decade, which at once is plus. He does have a good academic background and I am affraid I know very little about him. Which means I have to go back and check up on him a bit...so see this as a start! Than again, maybe I should wait and see if he actually get the position. Maybe his religious views are not right-wing enough to accept him. From an economist view, I like that he seems unbiased to the untrained eye and I hope I can find this reflected in his prefessional work, too. We don'y need a conservative in this postion, we need an unbiased centrist with as little political ambition as possible. Greenspan was too political in some of the recent years and I think it will hurt him in his reputation. I take my hat of for Mankiw that ge left while he could before he became a pundit!

What has happened Here?

This week I am truely confused. At first I heart on the German news that the hurricane Katrina has struck New Orleans, but the damage was less the expected. I felt relieved and was sure it was another natural disaster which happens unfortunately every year somewhere in the USA. Certainly we would see some of it in the news for the day and maybe the next day. Yes, lives would be hurt and property distroyed, but as in most instances the warning system we have and the infrastructure allow quickly to get the situation under control. Relief funds would kick in and life would return to as close to normal as possible.

I could not have been more wrong! In a nation that has the best equipped military and one of the highest living standards in the worl, an economy power that amounts to numbers other countries haven't dreamed of, we are still dealing with people trapped, starving and officials blaiming one another not sure why things went wrong.

Articles of respectful scientists and reporters re-appear that show that in 2001 besides the number one thread to this nation, a terrorist attack in New York, the third worse thing that could face our country would be a hurricane reaching New Orleans.

If this was known, there were tests and simulations of this scenario as recent as last year, why did it take so long to get the needed help down there? How come it was Friday, the hurricane hit Tuesday, the leeves breached Wednesday, before the there was federal intervention? How come we hear about hotels getting prefered recuing and people sitting at lunch critizising starving people who feel abandond and left behind looting necessities to get by, because they still hadn't gotten any help Thursday in the shelters they were instructed to seak out.

Next, money was cut to give back as tax cuts, and to fund a war in Iraq, money that was used to realise a plan to protect New Orleans from another disasterous hurricane.

I am deeply ashamed that we could not do anything better than that. It seems like people got quicker help after the tsunami in less developed countries with little or no infrastructure. It seems that priority was placed on other issues more than on following experts advise. I don't want to imagine what would happen if the second worst thing would happen, an earthquake in San Francisco.

Now where is the accountability our president wants, or does it really matter who is at fault here? Don't we owe the victims of this storm an explanation and a promise we really will make sure next time will be handle quicker and better? Afterall, this wasn't the last hurricane!

Krugman on China (NYTimes)

Krugman, too, raises the question, what happens if China stops buying Dollars. He also has a good explanation or suggestion to the answer why the Chinese government keeps the exchange rate below its value, though I am inclined not yet to buy it. I think there is more to it than sheer angst to change it. China is often very rational in its decision making. A change from Dollar reserves to Euro reserves might be ahead (Yen is not likely given the enimocity of the two nations). But the question remains, what would happen when China "takes away our credit card"? But read for yourself:

China Unpegs Itself

By PAUL KRUGMAN
Published: July 22, 2005
Thursday's statement from the People's Bank of China, announcing that the yuan is no longer pegged to the dollar, was terse and uninformative - you might say inscrutable. There's a good chance that this is simply a piece of theater designed to buy a few months' respite from protectionist pressures in the U.S. Congress.

Nonetheless, it could be the start of a process that will turn the world economy upside down - or, more accurately, right side up. That is, the free ride China has been giving America, in which the world's richest economy has been getting cheap loans from a country that is dynamic but still quite poor, may be coming to an end.

It's all about which way the capital is flowing.

Capital usually flows from mature, developed economies to less-developed economies on their way up. For example, a lot of America's growth in the 19th century was financed by investors from Britain, which was already industrialized.

A decade ago, before the world financial crisis of 1997-1998, capital movements seemed to fit the historic pattern, as funds flowed from Japan and Western nations to "emerging markets" in Asia and Latin America. But these days things are running in reverse: capital is flowing out of emerging markets, especially China, and into the United States.

This uphill flow isn't the result of private-sector decisions; it's the result of official policy. To keep China's currency from rising, the Chinese government has been buying up huge quantities of dollars and investing the proceeds in U.S. bonds.

One way to grasp how weird this policy is would be to think about what a comparable policy would look like in the United States, scaled up to match the size of our economy. It's as if last year the U.S. government invested $1 trillion of taxpayers' money in low-interest Japanese bonds, and this year looks set to invest an additional $1.5 trillion the same way.

Some economists think there is a deep rationale for this seemingly perverse policy. I think it's something the Chinese government stumbled into as it tried to protect itself from the 1997-1998 crisis, and it is reluctant to change because the Chinese economy has been doing well. That is, China's leaders don't want to mess with success.

But pressures against China's dollar purchases are building. By keeping the yuan down, China is feeding a trade surplus that is creating a growing political backlash in America and Europe. And China, which is still a poor country, is devoting a lot of resources to the accumulation of a basically useless pile of dollars instead of to higher living standards.

The question is what happens to us if the Chinese finally decide to stop acting so strangely.

An end to China's dollar-buying spree would lead to a sharp rise in the value of the yuan. It would probably also lead to a sharp fall in the value of the dollar relative to other major currencies, like the yen and the euro, which the Chinese haven't been buying on the same scale. This would help U.S. manufacturers by raising their competitors' costs.

But if the Chinese stopped buying all those U.S. bonds, interest rates would rise. This would be bad news for housing - maybe very bad news, if the interest rate rise burst the bubble.

In the long run, the economic effects of an end to China's dollar buying would even out. America would have more industrial workers and fewer real estate agents, more jobs in Michigan and fewer in Florida, leaving the overall level of employment pretty much unaffected. But as John Maynard Keynes pointed out, in the long run we are all dead.

In the short run, some people would win, but others would lose. And I suspect that the losers would greatly outnumber the winners.

And what about the strategic effects? Right now America is a superpower living on credit - something I don't think has happened since Philip II ruled Spain. What will happen to our stature if and when China takes away our credit card?

This story is still in its early days. On the first day of the new policy, the yuan rose only 2 percent, not enough to make any noticeable difference. But one of these days Chinese dollar purchases will trail off, and we'll find ourselves living in interesting times.

More about China

Above is a link to a nice, good discussion of Nouriel Roubini and David Altig on the WSJ website. It will give you a better understanding of what this move by China could mean.

Mark this day in your calendar

For two reasons I think this day will show up in history:

1.) German President Köhler dissolved the German Parliament to allow new, early elections.

2.) China lowered the fixed exchange rate from 8.28 down to 8.11 Yuan per Dollar, agreeing to peg it to the Dollar and promised to tie the exchange rate in the future to a currency basket.

Maybe I am overreacting, but German's recent development in terms of government reminds me too much of Weinmarer Republic conditions. The fact that the current Chancellor Schröder is running again is beyond my understanding. If you feel that you don't have the platform to get your reforms through, either means you try to get something done that is not called for or you are not doing your job persuading the public what it needs. The later is too scary resembling Bush's approach of using all means of propaganda to convince people of false facts. In either case, the German democracy seems to be hurt by this decision. It is an indicator of its weakness which again is a sign of its ineffectiveness. Don't get me wrong, I am a convinced fighter of democracy, even if I haven't voted in a German election in a while. Of course, Germans still participate in elections and compared to the USA I still think people are not yet feeling that they can't change anything with their vote.
But when tactics like that are used to get a better result seems more like the statistician that massages data to the point that it fits his/her expectation to what the outcome should be in their opinion, rather than to accept the unbiased result.
I don't get the impression that Angela Merkel is a alternative to Gerhard Schröder, but this is a great gamble for the SPD to get a pink slip with the remark we need a change, no matter what this means in political terms. I will be following this election closely. Most interesting to me will be to find out if their are many swing voters and what the participation and mood of the new/young voters will be. And then there is still the suit before German Supreme Court (Bundersverfassungsgericht) to check the actual constitutionality of this act.

China has been doing so well for a while. But I thought that I remember that China had set is currency below value to ensure tremendous inflow of foreign currency, a modern form of dumping. Revaluation of the Yuan brings its value slightly up. However, it could be and I have to research this a bit more, that the Yuan had appreciate so much over the recent years but could rise due to fixed exchange rate that the lowering of it value actually sets it a its true value. But this still doesn't seem to fit into the picture. So what does that mean for China? It is now less cheaper to invest in China! And it yet remains to be seen how this pegging against other currencies will look like, (Bretton-Woods III?). I am somehow not yet convinced that China will openly let its currency fluctuate on the world market. If this is the first step for China to become more open, great, but then watch out what you asked for. The Chinese have been working on building up to be the next world superpower financially they are certainly on the way to become a force to reckon with. True, they have been already very much an export and import nation, but reserved non the less. I am glad that this is happening, but I skeptical of its sincerity. As an economist I am thrilled, since I don't believe in fixed currency politics, protectionism, or government intervention for the wrong reasons. Long live free trade and open borders!

But like I said, despite skepsis, mark this day in the calendar, it may change the world, even if just a little bit.