Democracy and Bank Bailouts

The lack of democratic control is an all-pervasive defect of modern societies. More and more decisions are made by technocrats and a political class that writes its own rulebook without reference to the citizens. The regulation - or its lack - of the banking system is a perfect example. Just imagine what a system would have to look like that is subject to democratic control. Every subsidy would have to be approved in a referendum. Does anyone think the ginormous amount of taxpayer money would have been approved? We all know the answer and as a consequence the banking system would have to be completely overhauled and made literally bombproof. It can be done - if the will is there. But it is not possible to guarantee every penny that is deposited with banks. There will have to be a split into super-safe banks (strictly controlled, offering low but safe custody of money balances) and a larger sector where the value of deposits can fluctuate in emergencies (similar to the value of any bond).

London: hellbent on destruction

Not enough that the town is still - despite the collapsing Pound Sterling - expensive, that public transport may not get better in a time span that is relevant for those now working and living in the City, that taxes and regulations become more and more Kafkaesque by the day, the legal system is doing its utmost to destroy the image of London as a free and liberal environment by catering to absurd claims for discrimination and harassment. The way to riches seems to lead through the (suitably named) employment 'tribunals' which can at best be described as kangaroo courts at worst as worthy successors to the trials of the inquisition.

Patent for Investment Methods

News that Research Affiliates has been granted a US patent for an indexing methodology that selects and weights securities using fundamental measures of company size, such as dividends and sales should set alarm bells ringing in investor circles the world over. While the ruling only affects the United States there is the danger that US law gains ex-territorial reach or gets copied by other legislatures.
Granting a patent on an investment methodology is akin to granting a patent to the first person that has opened a self-service supermarket. It is nonsense and makes a mockery of the true purpose of patent protection for technological and medical innovations.