After my wife and I saw a TV report on this year’s La Biennale, we got Venice fever. It was so fascinating that even before the emission was over our minds were made up: we had to go back. All the memories of our previous trip came flooding back – Giardini della Biennale, the old Arsenale shipyards – like it was yesterday. But would a trip to the Venetian Lagoon be possible at such short notice – right in the middle of the summer holiday season?
It makes intuitive sense that the way people feel about something should dictate the way they behave—that our preferences and convictions are faithfully reflected in the choices we actually make. Although this seems a reasonable assumption, recent research in psychology and behavioral finance suggests otherwise.
Wretched dishwasher: it stopped running just minutes before the end of the program, leaving the plates in a damp, cold mist. It is always a grim moment when one realises that a call to the repairman is unavoidable. While Siemens’ 24-hour hotline is a nice feature in cases like these, I couldn’t help but wonder what good it was when all it could offer was a repair appointment one week later.
Even without a New Year’s resolution my visits to the sports studio are three times per week these days. ‘Don’t you get bored pounding that wretched Cross-Trainer week-in, week-out,’ I am sometimes asked. Mercifully, there are TV screens on the wall in front of the machines; they provide a welcome distraction, but the training can still be very tedious. What’s more, I cannot resist looking at the clock to see how much longer I have sweat before I can finally get off.
I shop quite often at my local hard-discounter, Penny. It is not just because the store is literally round the corner, but because one can genuinely get good value for money. The recent bonus-points promotion has not escaped my attention either; the store is offering a variety of kitchen knives, not for the manufacturer’s recommended price of €33.99 or €39.99 each, but for just €2.99. Of course, one must bring a few bonus points to the sum – 45 to be exact – and these must first be collected at a rate of one for five euros spent in the store.
A class reunion is a very peculiar event. I have often wondered what it is about these anniversary get-togethers – 10, 20 or 25 years after leaving school – that makes them so appealing. Naturally, there is a certain thrill about the prospect of seeing an old buddy from one’s childhood again. But not all of those present are former friends. Not only classmates are reunited at these events, but human reference points.
My latest business trip took me to a renowned five-star hotel. At check-in I discovered my travel agent, American Express, had left me a dining coupon for use in the hotel restaurant. The amount, €85, surpassed my expectations for such promotions. Even in a hotel in this category, I thought to myself, one could pay for an entire meal with such a gift. So what was the catch? Of course, Amex wanted to galvanise client fidelity, but this still seemed like an expensive way to do it.
Sometimes even children can teach us a thing or two about behavioural economics. At least, I received an unexpected (and unwanted) lesson just a couple of weeks ago during a discussion about Christmas wish-lists.
“Paula got an iPad for her birthday, can I have one too?” my nine-year daughter asked me. Her friend Paula was born on the exactly the same day as my child, but she can just about read and her writing leaves much to be desired.
Occupy Wall Street’s (OWS) idea of using charitable donations to buy up distressed consumer debt, and then simply forgiving it, sounds very appealing. I am very much in favour of pardoning debt that everyone knows can never be repaid. This allows overly-indebted people to get on with their lives, hopefully in a more productive way. One of those ways, OWS hopes, is eventually to make their own financial contribution to the project, thereby ‘paying it forward’. The impact of a test project was impressive: according to one of the organisers, OWS was able to buy $14,000 of distressed debt with an investment of just $500.
It is obvious why people seem to enjoy seeing a hero fall: it is all about changing the reference point. For example, when a beacon of morality – a sporting hero, an outspoken priest, a clean-cut politician, a decorated general – is dragged into the mire of sleaze and shame, it lowers the bar for our own patchy integrity. Without having to do anything, we are instantly able to see ourselves as more honest. Quite why anyone would like to see someone’s tainted image redeemed is perhaps counter-intuitive, but we like that too.
Yesterday’s post concerned the documentary recently broadcast by Franco-German TV network ARTE: ‘Goldman Sachs – one Bank Rules the World’. In reality, one could easily have replaced the name Goldman with that of any number of institutions or associations, from Harvard University to the Freemasons, but I am not fond of conspiracy theories.
The Franco-German TV network ARTE ran a documentary at the weekend with the ominous-sounding title ‘Goldman Sachs – one Bank Rules the World’. I was totally absorbed while watching, and a little shocked that such a high-brow TV network could portray an investment bank in such a damning fashion. The documentary’s producers sought to generate fear and loathing as it showed Goldman alumni – former employees – occupying leading positions in politics, government, business and regulation in the US and the EU.
“What are they going to force us to do next – eat broccoli?” raged one American TV commentator about the healthcare reform known as Obamacare. He considered it an impingement on his personal liberty to be obliged by law to buy health insurance. The decision by the US Supreme Court last Thursday to uphold the plan as constitutional has obviously ignited a wave a discontent across many parts of the country, not least in the campaign headquarters of Republican presidential candidate, Mitt Romney. He has already promised to repeal the law if he is elected in order to give the American people their freedom back.
Third, second, third – this has been the series of achievements of the German national football team in major tournaments of recent years. It starts with the World Cup in 2006, followed by the European Championships in 2008 and then the World Cup again in 2010. Now, after a blazing trail in the group stages and a convincing performance against Greece in the quarter-finals, Germany is poised to battle for a place in the finals this week in the European Championship in Poland and the Ukraine. The yearning for a title win is palpable.
I have had many and varied experiences with the major hotel chains and their individual establishments. Some have been good, but most have been a let-down. So I tend to aim high when choosing a hotel in the hope of avoiding the worst. That was my thinking when I reserved a room at the five-star Ritz-Carlton in Berlin; my belief was that one couldn’t go too far wrong with that.
I took an unsettling call from lady at American Express the other day. Apparently because I had been a card member for such a long time, she wondered whether I would like to have a second card for my wife. It was only after I bluntly refused that she came to what I now suspect to have been the real reason for the call. She expressed how uncomfortable it was for her to broach this subject, but American Express had tasked her to propose insurance security specifically for life events that are neglected by other insurers because they are unable or unwilling to discuss sensitive issues. Her voice adopted a solemn, gravelly timbre: “No, Mr Goldberg,” she choked, “this is not a comfortable subject, but one that must be discussed.” I braced myself.
It seems the infant Pirate Party in Germany is emerging as a political influence to be reckoned with. Last week it managed to count its 25,000th registered members – that’s half the number of members as the Green Party, the youngest among the established parties. For the behaviourally-trained eye, however, the party’s rise is not surprising.
I can easily understand why someone would buy a lottery ticket in the slim hope of getting rich in a single coup. Even though the expected return from this investment is negative, so no economically- rational person should do it, millions of people take the plunge every week. The reason is because the very low probability of hitting the jackpot is likely to be perceived as greater than it really is. In addition, the thing one buys with a lottery ticket, above all else, is the right to dream.
India surprised me. I was fascinated by the beautiful landscapes, and sometimes the helpfulness shown to me at some of the places I stayed on my trip went far beyond my expectations. On the other hand, I loathed seeing the stinking piles of waste everywhere. Plastic bottles seemed to have been tossed everywhere and the smouldering dumps at the outskirts of town polluted the air. But I nevertheless became accustomed to it: “This too is India,” I said to myself.
About two weeks ago, an article in the Wall Street Journal aroused market interest by suggesting a new variant of quantitative easing – a sterilised QE3, if you will. Yesterday we learned of the error in that thinking, at least according to renowned interest rate hawk and president of the Dallas Fed, Richard Fisher. Although currently not a voting member in the FOMC rotation, Mr Fisher isn’t supporting any further easing programs. In contrast, the NY Fed’s William Dudley recently insisted that, although the U.S. economy has somewhat stabilised, a self-sustaining recovery is still far off.
The subject of yesterday’s blog post prompted more discussion and opinion in our office than actually made it into words. Debates about morality have a tendency to do that. If anything, the news that the Swiss central bank president, Philipp Hildebrand, had stepped down as a result of a currency trading scandal, further polarised opinions. As the post concluded, each person has their own personal moral benchmark – an idiosyncratic reference point – so the perception of any moral deviation will therefore be different depending on who observes it.
A personal shopping advisor – now that is what I call luxury. No need to battle with the masses in the busy boutiques and department stores. Instead, a personal shopping advisor identifies the most stylish, exclusive, and typically the most expensive items from the collection for the store’s most demanding guests and presents in a private showroom, preferably over a flute of rosé champagne.
I am very fond of good hotels on my business trips. Being on the road most of the year, I have come to appreciate the convenience of a high level of comfort and a touch of luxury. In Düsseldorf I usually try to go to an excellent hotel that opened only three years ago. When there is no exhibition in town, their prices compare favourably to the other five-star hotels. So I recently booked an overnight stay there, including continental breakfast, for €216. All non-alcoholic drinks from the minibar and a small fruit bowl were also included in the price, as well as unlimited use of the Wi-Fi
A little while ago, I had the opportunity to see the obscurely-titled movie, ‘Margin Call’. Those familiar with the expression will not be surprised to discover that the story revolves around a US investment bank. The year was 2008, just ahead of the Lehman collapse. The tale begins when analyst Eric Dale finds himself victim of one of the typical rounds of employee layoffs.
Full disclosure: I have a long-position in gold. Presumably just like many of my compatriots, I keep gold for security – not for speculation – in case something goes horribly wrong in the eurozone or out in the world.
The only consistent thing about my eight-month old son is his inconsistency. Any time I get to thinking that he has settled into some kind of rhythm, I am proven disastrously wrong almost immediately. Up until recently, for example, he slept blissfully the whole night long. Now he has rediscovered the sleep patterns of a new-born. The same applies to his eating habits:
The question of whether the Plunge Protection Team (PPT) indeed exists is really bothering me now. Some swear up and down that there is a rapid task-force that protects the markets, and there are others who will wink and tell you that the Group obviously hasn’t been all that successful.
Venice is known as an expensive city, but that is only partly true. San Marco and Rialto are always ‘flooded’ with tourists, but away from the masses one can actually find nice holiday quarters at affordable prices and reasonably priced restaurants. Only the pricey public transportation system offers no creative alternative, apart from going along the maze of small alleys by foot,
EU finance ministers are weary of sovereign debt crisis. The IMF too would like to have a line drawn beneath the whole sorry affair. The sticking point is the insistence of all these parties that private bondholders be forced to share the cost of a bailout, a solution that will certainly be labelled a default by the credit rating agencies. Whereas as default is realistic way of putting Greek debt on a more sustainable footing, its danger is that it may well prolong the crisis instead of bringing it to an end.
At last, I’m in the final stages of my vacation planning, a thankless task, even though I’m no rookie when it comes to African tourism. There have been endless discussions with travel agents, innumerable internet searches, and dozens of glossy travel brochures have had their page corners folded down.