Slump in winter resorts?

Geilo is deserted pre Easter. Strange. Windy.

What fascinating times we live in

Gordon Brown, PM of the country on the brink of deflation trying to squeeze more fiscal stimulus out of reluctant G20 partners while his CB governor and Chancellor say the UK is so indebted it can't afford more of it. Oops, Gordon took the hint.

Paul Krugman saying the Geithner Toxic Assets Demolition Plan solves nothing at all. Just subsidies to those who don't need them. Summers disagreeing. For how long?

(Hempton has got his own touch on saving the world: Bronte Capital: Paul Krugman’s false logical step. Not so much disagreeing as making a nerdy point.)

Could the world economy collapse because the US Congress cannot bear even 6 months of government managed banks and because Merkel and Sarkozy think they have done enough? It was someone else's fault anyway wasn't it?

Hopefully this is just a reality show and we are back in real life soon.

Snow has started falling again. It is March and minus 5C out there.

More snow coming

March. Thought spring had come at last, but no. Snow is forecast.

Also the IMF has just come out with a new prognosis for the world economy saying that things are not getting better till rich countries get their financial systems in order. Rotten equities and loans need to be taken due care of and banks recapitalized. If we all do the right things in concert and abstain from protectionism there could be improvement by the end of 2010 they say.
They may be right, but in a political world the prospects for that are not bright.

So to lighten up my own day I finally got myself an Omnia - not the HD, but this one does almost everything you ask of it.

Got to go wax my skis now.

Spring is here - at least in London

Hardly more 'House for sale' signs to be seen than ususal. In these for England so trying times you would expect a veritable forest of them here in London SW. But people don't bother any more they say. So hard to sell it is better to wait it out. For how long though?

More upbeat in the US where AIG employees are still due to receive huge bonuses. Contractual obligations? The recession could become even deeper if they don't get the extra millions to spend. But on the other hand, does it really help increasing the consumption of bank account numbers in Jersey?

Daffodils are already out here. The theory may have to be seasonally adjusted.

Risk takers' day

Yesterday the governor of the central bank of Norway confirmed that over the last 6 months more than 120 billion US$ of the Norwegian Oil Fund savings have been lost on Wall Street. This is more than a quarter of the money that should compensate for pension payments that an ageing workforce cannot support. Active fund management – fund managers picking "winners" like Lehman Brothers – has exacerbated the loss. If they had abstained from this and followed the indexes, we would have been almost 10 billion US$ better off today. Admittedly it is mostly paper losses for now, but given better times it will take many decades just to regain them.

The governor also confirmed that over the years the fund has been miserably managed. Since its inception in 1998 the annual real return rate on the capital has been only 1 per cent. Had managers stuck to the Treasury's benchmark portfolio, return would probably have come closer to the target of 4 per cent per year and passive management of bond could have delivered 6 pct.

Too high a proportion of shares is probably to blame. The bond part of the portfolio lost only 0.5 pct in value while shares lost 40 pct. For good measure a new strategy proposed by fund managers and agreed by Parliament before the meltdown is now being implemented to increase the proportion of shares in the fund from 40 to 60 pct. Higher risk exposure is exactly what we need!

According to the central bank governor there are not many places beside shares to invest for a fund this size and in the long run it is always lucrative to own a big part of the world's industries.

Well, some of them could actually go bust, and in the long run, as J.M. Keynes said, we are all dead.

It is not thawing yet.