Just out from the Dallas Fed. Fortunately the hurricane season is over - for economics does not come much drier or more detached than this:

"Our results show that the typical hurricane strike raises real house prices for a number of years, with a maximum effect of between 3 to 4 % three years after occurrence. There is also a small negative effect on real incomes. These results are stable across models and sub-samples."

Course, your house has to survive the general inventory destruction reduction (and certain other "negative" effects) for this to happen.

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So my boy asks me to quiz him for a history test. French Revolution.

Ah, triggered by a sovereign debt crisis. The Church, largest land holder and a major political force alongside the soon to be headless King, gets its property expropriated to cover new bonds - “stolen” according to my son (at that point ignorant the Church was exempt from tax and allowed to extract 10% per annum on revenue from the faithful - God's work, don't you know).

Shame, with such a financially promising start based on pain-sharing, things then got out a bit out of hand. Some Cliff Notes:

  • some national debt paid down but enthusiastic overissuing uncovers the bonds’ collateral
  • hyperinflation-> shortages (austerity budgets?)-> price controls-> famines & riots
  • suspension of the Declaration of the Rights of Man-> dissent = crime -> much happy slapping via guillotine-> war as a revenue raising measure-> rise of the army
  • dictatorship-> ill-conceived adventure in Russia etc etc.

Course, the Church eventually was legally written out of state matters entirely in 1905. Not that verses of the history aren't reprised down the ages. In all sorts of contexts.

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Despite some tearful admissions of paternity from private sector banks (with incitation from Uncle Central) there has not been much in the way of maintenance (outside Iceland) for the strange fruit of their loins.

Indeed, the very idea of financial participation in junior's recovery ("20 cents on the what?!") is invoked as a roadmap to general economic disaster. Not that this is a guarantee of inertia by Chancellor Merkel; or will prevent a deferred "restructuring" in some of today's "austerity budget" economies.

It is interesting (and no more without deeper reading) to contrast this confrontational approach with that of the Islamic banks - as reported in the latest edition of the IMF's Finance & Development.

A little maysir and (more, if this is corporate sponsorship-type spending) zakat would not have gone amiss; and would not going forward either. Unfortunately that reform game seems over (for now, perhaps).

Two extracts below with pdf links here and here:




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The nature of gasoline pricing can be a painful obsession; not to mention a hands-on experience of the rockets-and-feathers phenomenon: stations manage to coordinate increases instantaneously, rejoicing in a chorus of margin explosion. Yet let OPEC jack up production and decreases float down very gently.

Yet more infuriating is the oligopolistic nature of pricing. Competitive pricing is rarer than genuine application of the Volker Rule; and the words "price war" simply do not apply.

So it was pleasant to see the German Cartel Office earlier today announce that they had had enough (despite their original OMV / Total ruling being overturned). Strike a blow for consumer motorists!

It is, it appears, a theme - though how strong a theme remains to be seen. For example, the Cartel Office stopped Shell buying as many stations from retailer Edeka as they wanted earlier this month. That is, Shell got 41 instead of 44 stations.

Looks symbolic but the regulators are also set to finish a two year "probe" into the gasoline market. Perhaps this may end up taking heart from research in the Dutch market (where regulators appear more aggressive). A paper from summer 2009 by Lach and Moraga-González, said:

"We found that as competition the number of gas stations increases the distribution of prices spreads out, with the low prices going down and the high prices going up. Consequently, competition has an asymmetric effect on prices.

This result has important welfare implications because when some prices increase and others decline, the price actually paid by consumers will depend on their shopping behaviour. All (hypothetical) consumers in our data, irrespective of whether they are informed about one or more prices, benefit from an increase in the number of stations.

The magnitude of the welfare gain, however, is greater for those consumers that observe more prices. As a result, an increase in competition has a positive but unequal effect on the welfare of consumers."

If the researchers ever turn their sights on other oligolpolies - the cosy division of the French mobile telecoms market into three very unequal shares comes to mind - odds are they would find exactly the same traits (and much the same solutions).

There is useful competition-creating regulation to be enacted on consumers' behalf in the European Union. And has been for some time.

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...now comes news of the recall of the French Consul to Hong Kong for, allegedly, stealing expensive burgundy from a restaurant:

"Marc Fonbaustier is accused of hiding two bottles, worth over £4,000, in his suit before exiting the Hong Kong Country Club’s restaurant, the Wine Cellar." (link)

Sensible observers will first wonder about the mark-up of the restaurant - at least provide us with the details of producer, vintage and cru. Then they might wonder if it's a conspiracy - did Beijing not like the chap? Was he onto counterfeit wine labelling? Was it a joke - who seriously attempts fine wine theft by putting a bottle in each of his pants pockets (Maestro, a visual, please)?

We may never know for the Chinese government has demanded his removal; and Monsieur Fonbaustier has reportedly "admitted the facts and paid reimbursement" without, as Le Monde drily notes, specifying exactly what those facts were.

Oh, for a little Wikifuite.

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