Nov 21, 2008

In Singapore, the government tightly restricts the number of cars on the road, and enforces this restriction through an auction system for car permits. As people scrap or export their cars, the permits are recycled back to the government, which auctions them off every month in a reverse Dutch auction (so the lowest accepted bid is the price that applies for the whole auction). Lately there’s about 2,000 permits on offer every month and 3,000 bids, so there’s plenty of demand to keep the price high.

Nov 16, 2008

Buying a pig in a poke, colloquially, is to buy something risky without examining it beforehand. The phrase arose in the middle ages, when confidence tricksters would offer to sell a pig in a sack - but when the customer opened the sack, they’d find they’d bought a nice juicy cat. Or rabbit. These days, the pig in the poke is more likely to be a nice juicy “risk-free” yield on a structured deposit.

Sep 21, 2008

Sunday night: “This is looking suspiciously like the last act of Hamlet (or maybe Reservoir Dogs).” Monday: Market participants trade frantically in a Sunday-afternoon trading session to hedge their Lehman exposures - with the proviso that the trades will be busted if Lehman doesn’t file by midnight NY time. Lehmans files for Chapter 11 bankruptcy at half past midnight NY time - becoming America’s biggest bankruptcy ever, six times larger by assets than the previous record-holder (Worldcom in 2003).

Sep 18, 2008

In Singapore, insurance companies do more than just cover you when you turn up your toes. For whatever reason, whole-life insurance policies are seen as a legitimate investment tool over here (they’re not, by the way). Instead of brokerage accounts, Singaporean investors like to use “investment-linked insurance policies” - wrap accounts for unit trusts - as a way of accessing the markets, or just as a way to “pass something on to the children”.

Sep 4, 2008

At the beginning of August, the Zimbabwean central bank knocked ten zeroes off the Zimbabwean dollar exchange rate, and suddenly one USD was worth about forty ZWD. At the beginning of September, one USD is worth four thousand ZWD. That’s… what… 10,000% inflation per month… or 100,000,000,000,000,000,000,000,000% per annum (a hundred trillion trillion percent, for those keeping score at home). Which, admittedly, is a vast improvement over the old rate: 430 trillion trillion trillion percent.