I was at the Frankfurt Opera with my wife on Saturday where Mozart's Don Giovanni was playing for the final time this season. We enjoyed the opera, but I saw Don Giovanni with completely different eyes than the last time I saw it about 30 years ago – back then I had not yet fully engaged with behavioural economics or behavioural living. You've heard of Don Giovanni, the rogue with all the women? In Spanish, he's Don Juan, the great seducer whose infidelity destroys not only the life of his wife, Doña Elvira, but also those of countless other women. Read the rest of this entry »
Don Giovanni: A Tale of (almost) Unpunished Overconfidence
January 27th, 2012 by Joachim GoldbergDAX-Sentiment: Pessimists shrug off five-month high
January 26th, 2012 by Christin StockStark divergence between owners and managers of German firms.
The IMF is not too confident about Deutschland AG. The Fund’s economists have recently lowered their growth forecast for Germany to just 0.3 percent for 2012. Domestically, however, the opinions are far from downbeat. Jens Weidmann, the Bundesbank president, was the first to rubbish the IMF predication as he stuck to his institution’s GDP growth forecast of 0.6 percent...
Lifelong Sport
January 25th, 2012 by Joachim GoldbergI had to read in yesterday’s Guardian newspaper that my beloved gym, Fitness First, is in financial difficulty. The sports studio chain, the world’s largest, is in negotiations with its creditor banks to secure a reduction in the interest it pays on loans of over £600 million. Apparently, it is already struggling to meet the repayments. The report reminded me of the lifelong membership (access to all studios worldwide) that Fitness First offered in 2008 for the handsome fee of 4000 euros. Compared to the typical monthly subscription fee for established members of 80 euros, the figure seemed reasonable and, without taking foregone interest rates into consideration, subscribers would reach their breakeven after four or five years. Read the rest of this entry »
Tripping Over Small Probabilities
January 24th, 2012 by Christin StockI know the feeling all too well – the sudden realisation that one’s keys are lost. The numbing sensation with each passing minute that one’s access has been denied to yet another place: home, office, locker, mailbox, and bike shed. So when I read my colleagues recent blog post about a friend robbed by a junkie, I was painfully reminded of an episode two years ago when my keys vanished. Read the rest of this entry »
What’s Behind the Swiss Poker Face?
January 23rd, 2012 by Herman BrodieFive months have now passed since the Swiss National Bank (SNB) announced that it was prepared to defend a minimum exchange rate for the euro of 1.20 Swiss francs using unlimited resources. It was certainly because the market had not expected such a bold commitment from such a conservative central bank that the threat was taken so seriously, After all, the SNB had previously intervened to weaken the Swiss franc, but without success. Yet, who could deny the seriousness of the threat: selling unlimited quantities of its own money is theoretically possible if a central bank has the ability to print them. Read the rest of this entry »
Are Investment Yields a Human Right?
January 20th, 2012 by Joachim Goldberg“Whatever next?” I thought to myself when the New York Times reported that powerful hedge funds were planning to bring a case to the European Court of Human Rights if Greece changed the law to force private bondholders to take losses. Such a step, claim the funds’ lawyers would amount to an infringement of property rights, which is a human right in the EU. It cannot be, bemoaned one, that Angela Merkel decides who wins and who loses. Read the rest of this entry »
DAX-Sentiment: Taking a cue from S&P
January 19th, 2012 by Gianni HirschmüllerRating agency tarnishes sentiment but not equities.
18 January 2012. FRANKFURT (Börse Frankfurt). There was a marked increase in the proportion of DAX pessimists on the Börse Frankfurt’s weekly sentiment panel this week. Most of them migrated from the optimists’ camp, meaning that bears now outnumber the bulls for the first time in eight months. The development is all the more striking when one considers that overall optimism, as measured by our Bull/Bear-Index, was at a record high just four weeks ago...
Physically Lost, Mentally Found
January 17th, 2012 by Ritu Gurha LissoA few days ago a junkie broke into my friend’s car while I was talking to her in front of the school gates. We were actually standing just 150 metres away from her car, but it was ten minutes after the police descended on the busy street that we realised they were actually converging around her car. The policewoman asked her what had been stolen. As she peered through her brutally smashed car window, she mentioned her new brand-name handbag and the D&G sunglasses that her sister had gifted her for Christmas. I noticed a expectant look in the policewoman’s eyes as she asked my friend whether these were really the only things of value that were lost. Read the rest of this entry »
