Opinion

Felix Salmon

Word clouds done right

Felix Salmon
Oct 31, 2011 17:45 UTC

Jacob Harris is absolutely right to hate word clouds. You take a long and complex text, and then you boil it down to a group of individual words, with the most-used words being the biggest? That’s just silly. “Reporters sidestepping their limited knowledge of the subject material by peering for patterns in a word cloud,” he says, is “like reading tea leaves at the bottom of a cup”. Word clouds are crude, inaccurate, misapplied, and place the onus of understanding onto the reader.

But there’s one place where word clouds are I think both useful and accurate — and that’s when a pollster has asked a group of people to say the one word they would use to describe X. Here, for instance, is the word cloud generated when a Reuters/Ipsos poll asked Republican voters for the first word that came to mind after watching the weird Herman Cain “smoking ad”:

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And here’s the word cloud from the latest Kauffman poll of econobloggers:

Here the size of the words is interesting, but more germane is the overwhelming negativity of the vast majority of words used. There’s a couple of tiny good ones in there — “rebounding” us up by the Canadian border, and “bounceback” is in the Bay Area somewhere — but they’re in a distinct minority.

Incidentally, that Kauffman poll has some fascinating responses elsewhere, too. Check out the sudden enormous popularity of NGDP targeting:

7-Sumner.gif

There’s also a very high degree of skepticism when it comes to how good colleges are at teaching kids useful stuff.

11-Caplan.gif

The bar charts here are again an effective way of communicating information. Things like chart types and word clouds are tools, and you have to know which tools are best used in various different circumstances. And while word clouds are usually stupid, sometimes they can be exactly right.

COMMENT

“How many people really think that you spend 4 years on skills that are actually useful in the job market?”

How many people would really want to hire your average college freshman as an assistant? You would spend more time baby-sitting them than the “help” would be worth.

In college you learn (or should learn):
* The language in which understanding is communicated in a variety of disciplines.
* The discipline to work independently and think critically.
* General literacy, both in writing and mathematical.

Maybe you take a couple courses that teach material you will use specifically in your first job? But even though learning doesn’t end in college, it is still important to lay the groundwork for what is to come.

Posted by TFF | Report as abusive

Chart of the day, Euro bailout edition

Felix Salmon
Oct 27, 2011 15:28 UTC

RTR2T9QC.jpg

This, ladies and gentlemen, is how the sausage gets made — it’s yesterday’s eurozone rescue plan, as presented by an unidentified adviser to one of the European Union governments involved in the negotiations.

Frankly, there’s lots of it I don’t understand. (Although the little map of the PIIGS in the top-left-hand corner is clear, and quite adorable.) At the top you have the €440 billion EFSF, with €150 billion already having been spent on those PIIGS. The remaining €250 billion (let’s not worry about these numbers not adding up precisely) gets leveraged, somehow, into €1 trillion — with a special-purpose vehicle in there somewhere for private sector investors to put money into. (The private sector, I’m pretty sure, is represented by that big “PS” box.) The leveraged EFSF then spends its money on the PIIGS as well, with some of that money going to recapitalize banks in those countries.

Meanwhile, the IMF and the Eurozone are also helping out the PIIGS. And Europe’s banks are being recapitalized by June 30, 2012, which will cost €106 billion; it seems that some of that money is coming from the private sector and some of it is coming from the leveraged EFSF. The IMF and the Eurozone are also helping to partially guarantee the new Greek bonds which will go to the banks tendering their old Greek bonds. (I think the tender of the old bonds is that “Greek bonds 100%” line, but I’m unclear on that.)

At the bottom of the sheet we have the sequencing. First comes Greece, which gets its debt written down by the banks, and gets a new loan from the IMF and the Eurozone. Then comes the bank recapitalization, which has to be done by June. Third up are the non-Greek PIIGS. And finally there’s that wonderful question mark at the end.

The main thing which worries me about this plan is the sequencing: it seems that everything else is contingent on Greece getting its writedown first. And I’m highly skeptical that a 50% writedown from the banks is practicable or likely any time soon. I know the IIF has agreed in principle, but that doesn’t mean the banks are actually going to tender their bonds in practice. And if they don’t, does that mean the whole deal falls apart? We need a lot more details on this, I think. Or, maybe, we don’t. Trying to extract details could mean forcing players to confront the fact that they all think they’ve agreed to something slightly different. And that might not be a good idea right now.

COMMENT

1) Write down 50% of bank-held Greece Debt
2) ?????????????
3) Problem Solved!

Posted by scotta | Report as abusive

Market inefficiency of the day, Irish bank edition

Felix Salmon
Oct 26, 2011 19:01 UTC

aib.tiff

You won’t be surprised to hear that shareholders in Allied Irish Banks have not done very well for themselves in the past five years. It did go bust, after all, and had to be nationalized; the share-price chart is above. But recently, as part of the recapitalization of the bank, the number of shares outstanding rose dramatically. Here’s the announcement, which doesn’t quite spell things out:

The Capital Raising will comprise an equity placing (the “Placing”) of ordinary share capital of €5 billion to the NPRFC and an issue of up to €1.6 billion of contingent capital convertible notes (the “Contingent Capital Notes Issue”) to the Minister. The Placing will comprise an issue of new Ordinary Shares for cash at a price of €0.01 per share.

If you do the math, you can see that injecting €5 billion of capital at €0.01 per share means that 500 billion new shares were created. And ever since those shares were created, if you multiply the shares outstanding by the share price, you can see that technically the market capitalization of AIB is somewhere north of €30 billion! Here’s the same stock, only this time charting market cap rather than share price:

aib.png

Even when a bank has been nationalized, there are good reasons for the shares to continue to be traded. For one thing, it’s helpful when you’re handing out equity to senior management; for another, it’s very useful if and when the time comes to try to privatize the bank and take it off the government’s hands. So at some point there’s going to have to be a reverse stock split, with the shares trading for some sensible amount.

But right now, the shares are genuinely trading at somewhere over €0.06 a piece — and indeed have risen in value quite dramatically over the past three weeks. I have no idea what the mechanism is here, or who’s buying these shares, but if you want proof that markets aren’t always efficient price-discovery mechanisms, this has got to be Exhibit A. It would help of course if these shares could be shorted, but that still doesn’t explain why people are buying at these levels.

(Thanks very much to Patrick Brun for the tip and the data.)

COMMENT

I would avoid making statements about market efficiency when the float is extremely small (0.6%), trading volume is extremely small (€200k worth of shares today), and the stock can’t be borrowed and shorted.

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Corporate governance chart of the day, Benford’s Law edition

Felix Salmon
Oct 12, 2011 20:30 UTC

benf_year.jpg

This chart was put together by Jialan Wang, and it shows the degree to which companies’ reported assets and revenues deviate from a Benford’s Law prediction over time. (If you want some good background on Benford’s Law and how it can uncover dodgy numbers from eg the Greek government, Tim Harford had a great column last month on the subject.)

Writes Wang:

Deviations from Benford’s law have increased substantially over time, such that today the empirical distribution of each digit is about 3 percentage points off from what Benford’s law would predict. The deviation increased sharply between 1982-1986 before leveling off, then zoomed up again from 1998 to 2002. Notably, the deviation from Benford dropped off very slightly in 2003-2004 after the enactment of Sarbanes-Oxley accounting reform act in 2002, but this was very tiny and the deviation resumed its increase up to an all-time peak in 2009.

So according to Benford’s law, accounting statements are getting less and less representative of what’s really going on inside of companies. The major reform that was passed after Enron and other major accounting standards barely made a dent.

This doesn’t necessarily mean fraud, per se; it could just be a chart of the degree to which companies are managing and massaging their quarterly figures over time. The kind of fraud that’s so respectable, Jack Welch got lionized for it. Once you start down that road, it’s easy to go further and further forwards, while it’s almost impossible to reverse course. So I can easily see how the natural tendency in this chart would be up and to the right.

Still, it’s worrying; all the more so because I can’t think of any way of reversing the trend. If Sarbox can’t do it, nothing will.

COMMENT

This is under the assumption that Benford’s law will always be correct. If, due to other reasons, the reporting of accounting figures changes such that it is no longer correct, no fraud or ‘massaging’ is necessary

Posted by gleisdreieck | Report as abusive

Chart of the day, median income edition

Felix Salmon
Oct 10, 2011 13:22 UTC

Why has no one thought to do this before? Every month, the Current Population Survey goes out to a nationally representative sample of more than 50,000 interviewed households and their members. And in one of the questions, those households — or at least the households who didn’t answer the same question the previous month — are asked how much money they made, in total, over the past 12 months. That question has now been asked in 138 successive months, since January 2000. Which means that with a bit of clever analysis, it’s possible to put together an apples-to-apples comparison of what has happened to household income every month.

And when you do that, the results are very scary indeed.

hhi.tiff

The red line, here, is median real household income, as gleaned from the CPS, indexed to January 2000=100. It’s now at 89.4, which means that real incomes are more than 10% lower today than they were over a decade ago.

More striking still is the huge erosion in incomes over the course of the supposed “recovery” — the most recent two years, since the Great Recession ended. From January 2000 through the end of the recession, household incomes fluctuated, but basically stayed in a band within 2 percentage points either side of the 98 level. Once it had fallen to 96 when the recession ended, it would have been reasonable to assume some mean reversion at that point — that with the recovery it would fight its way back up towards 98 or even 100.

Instead, it fell off a cliff, and is now below 90.

In dollar terms, median household income is now $49,909, down $3,609 — or 6.7% — in the two years since the recession ended. It was as high as $55,309 in December 2007, when the recession began.

Some of this decline has been hard to see because nominal incomes have been holding very steady: before taking inflation into account, median household income was $51,465 in December 2007, and $51,140 in June 2009. But even then, over the past two years, nominal incomes have shrunk significantly to the current level of $49,909.

All of these numbers come from Gordon Green and John Coder, economists who both worked at the Census Bureau for more than 25 years. They’ve now set up a private company, Sentier Research, to collate these household income figures every month; the full report costs a reasonable $20.

Why is this work being outsourced to private-sector economists, rather than being done by the Bureau of Labor Statistics and published officially? I’m having dinner with a government statistics wonk on Wednesday, and will be sure to ask him.

But in the absence of any good reason to discount the reliability of these numbers, it’s definitely worth taking them seriously, and asking why incomes have eroded so quickly and dramatically over the past two years. We’ve known for years that America has a huge unemployment problem. But I had no idea that the plight of the employed was this bad.

COMMENT

Regardless of the unemployment rate, when you look at the trend starting in Jan. 2000, the slope is only interrupted by the housing bubble (2006-2008). This generated an increase in income; all the builders, real estate agents, bankers, and house flippers. When that burst, we went right back to where we would have been. I don’t see a definite correlation between the two pieces of data. It’s like saying, “when ice cream sales go up, there are more shark attacks”. Maybe there is another piece of data that ties to two together – like it’s a hot summer so people go swimming and eat ice cream. I would like to see a chart of the household income index for 1982 to present to get an idea on how well trickle down economics has worked.

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Chart of the day, Apple price edition

Felix Salmon
Oct 6, 2011 21:50 UTC

Many thanks to the wonderful Silvio DaSilva for putting this chart together; I think it explains a lot of what happened with Apple over the years.

During Steve Jobs’s first stint at Apple, before he was fired in 1985, he was making consumer products which were far out of the reach of most consumers. The Apple II cost $1,298 in 1977, and that was the bare-bones version with 4K of RAM; if you wanted a more powerful version with a whopping 48K of RAM, that would cost you $2,638. Or $9,862 in today’s dollars.

The Macintosh, when it came out in 1984, was even more expensive. $2,495 was a lot of money, back then. (And never mind the LaserWriter: that had a list price of $6,995.)

When Jobs was fired, then, Apple was trying to sell consumer products to people who simply couldn’t afford them.

But when Jobs returned, in 1996, it was a different story. His first big product launch, the iMac, was priced at $1,300 — or just about $1,800 in today’s dollars. Not cheap, but at least somewhere in the ballpark of mass-market. Today, the entry-level MacBook Air — arguably the most gorgeous computer Apple has ever produced — is $999, just 55% of the real price of 1998′s iMac. And you can get a Mac Mini for $600.

And the non-Macintosh products are cheaper still. Here’s what you see when you visit the Apple Store online today:

store.tiff

This is a range of hugely powerful computers — the iPad 2 has the same computing power as a 1980s Cray supercomputer — at prices which are accessible to hundreds of millions of people around the world. The iPhone 4S — the first computer in the world to be able to have some approximation of a natural-language conversation — starts at just $199. And the iPhone I’m using right now is being given away for free. (With a two-year contract, but still.)

Jobs, of course, can’t take credit for the fact that technology becomes steadily cheaper over time. In fact, his technology has always sold at a premium; given the choice between making the entry-level Apple computer cheaper and making it better, Jobs always chose the latter option.

But Jobs can take credit for always being a step or two ahead of the technology curve, for seeing where the technology puck was going, and skating to that point before anybody else. Both in terms of what was possible, and in terms of what wasn’t needed any more. He saw, when he returned to Apple in 1996, that technology had improved to the point at which he could basically put his NeXT workstation ($6,500 in 1990, or $11,267 in 2011 dollars) on the desks of millions of people in the US and around the world. There was a basic level of quality he had to have, in any computer. And by the time that he launched OS X in 2001, he had built a company capable of delivering that quality at a price accessible to the broad non-geek middle classes.

The rest is history.

Update: I forgot the Lisa! $10,000 in 1983. That’s $22,745 in today’s dollars.

COMMENT

What about the MacBook Pro and the Mac Pro?

Do they throw off your graph too much?

Posted by mattmc | Report as abusive

A topological mapping of explanations and policy solutions to our weak economy

Sep 21, 2011 18:45 UTC

This was originally posted at Rortybomb

For the next few posts I need to allude to an ongoing battle of ideas about what is troubling our economy and what solutions are available. I figured it might be a good idea to try and create some sort of topological map of the various clustering of ideas and policies that constitute these arguments as well as the overlap among them. This is a preliminary version of this map: I’d really appreciate your input about what is missing and how to make this better.

From those who think that the problem is related to demand and Keynesian ideas, there tends to be three areas of focus: fiscal policy, monetary policy and the debt hangover in the broken housing market. One can think all three are important – I certainly do – but most think one has priority over the others. Many will think one of the three isn’t in play or particularly useful as a focus of policy and energy. Here’s a rough map. Quotations are ideas, non-quotes are policies and parentheses are people associated with each:

This war of ideas is being fought in white papers and articles, and at academic institutions, policy shops and the blogosphere. As a general resources, here are the best one-stop resources online for most of the bulletpoints above:

Fiscal Policy as Expectation Channel: Woodford on Monetary and Fiscal Policy, Paul Krugman.

Quantatitive Easing: The World Needs Further Monetary Ease, Not an Early Exit, Joe Gagnon.

NGDP Targeting: The Case for NGDP Targeting: Lessons from the Great Recession, Scott Sumner.

Mass Refinancing: Economic Stimulus Through Refinancing — Frequently Asked Questions, R. Glenn Hubbard and Chris Mayer.

Inflation to help Deleveraging: U.S. Needs More Inflation to Speed Recovery, Say Mankiw, Rogoff, Bloomberg. Overcoming America’s Debt Overhang: The Case for Inflation, Chris Hayes.

Higher Inflation Target: A 2% Inflation Target Is too Low, Brad Delong.

Bankruptcy Reform/Cramdown: January 22nd, 2008 Testimony, Adam Levitin.

Foreclosure Spillovers: Foreclosures, house prices, and the real economy, Atif Mian, Amir Sufi and Francesco Trebbi.

Balance Sheet Recession: U.S. Economy in Balance Sheet Recession: What the U.S. Can Learn from Japan’s Experience in 1990–2005, Richard Koo.

Housing Backlog: There is a Boom Out There Somewhere, Karl Smith. Yes, Virginia, Our Housing Stock Is Now Way, Way Below Trend, Brad Delong.

Debt-for-Equity Swaps: Why Paulson is Wrong, Luigi Zingales.

Debt, Deleveraging, and the Liquidity Trap: Debt, deleveraging, and the liquidity trap, Paul Krugman. Sam, Janet and Fiscal Policy, Paul Krugman.

The flip-side to a demand crisis is a supply crisis, and there’s been a large effort to explain our high unemployment and below-trend growth as the result of supply-side factors. Having surveyed the arguments, I’ve split them into two categories. There are those who think that the government has created an increase in uncertainty. This is from a combination of deficits that scare bond vigilantes/job creators, new regulations that have killed all the potential new jobs as well as the government creating disincentives to work. The second area of focuses is on the productivity of the labor force, with special emphasis on skills mismatch, the characteristics of the long-term unemployed and the idea that something has changed fundamentally in our economy that will keep so many unemployed for the foreseeable future.

I’m making the productivity circle conceptually expansive enough to include “recalculation” stories, though I suppose I could add a third circle in the next version. I tend not to find these arguments convincing, but here are the arguments made in full as best as I could find them online:

European Policies: The U.S. Recession of 2007-201?, Robert Lucas. The classical view of the global recession, Gavyn Davies.

Expansionary Austerity: A Guide for Deficit Reduction in the United States Based on Historical Consolidations That Worked, AEI. Large changes in fiscal policy: taxes versus spending, Alesina and Ardagna.

Liquidate the Homeowners: Are Delays to the Foreclosure Process a Good Thing? Charles Calomiris and Eric Higgins.

Stimulus is Sugar: Geithner Finds His Footing: Zachary Goldfarb.

Two-Deficit Problem, Bond Vigilanties: Spend and Save, Noam Scheiber.

Great Vacation: Compassionate, But Inefficient, Casey Mulligan. The Dirty Secret of Unemployment, Reihan Salam.

Long-Term Unemployed: Potential Causes and Implications of the Rise in Long-Term Unemployment, Andreas Hornstein, Thomas A. Lubik, and Jessie Romero. 10 Percent Unemployment Forever?, Tyler Cowen, Jayme Lemke.

Great Stagnation: The Great Stagnation, Tyler Cowen.

Patterns of Sustainable Specialization and Trade (PSST): PSST vs. the Aggregate Production Function, Arnold Kling.

Labor Mobility: Housing Lock is not a Major Part of this Crisis, Plus Scatterplots of Deleveraging!, Mike Konczal.

So what did I miss? What should go in the next version of this chart?

Read the original post here

COMMENT

The world is flat. I know that Friedman’s concept is simplistic, overused, and dated, but I am intrigued by the notion that the education and industrialization of the developing economies are leveling the production playing field, lowering barriers to entry for just about any productive or intellectual endeavor, and evening out wealth across much of the world. Some of this may be refected in your long term unemployed category, but I think it’s broader than that.

Posted by Curmudgeon | Report as abusive

Charts of the day, CBO testimony edition

Felix Salmon
Sep 14, 2011 14:05 UTC

Two charts jump out at me from Doug Elmendorf’s presentation to the Joint Select Committee on Deficit Reduction. The first is the sheer size of various loopholes in the tax code:

loopholes.jpg

If you want to make a serious dent in long-term deficit reduction, this is a good place to start. Everybody knows that Social Security and Medicare — pensions and healthcare — comprise a massive part of the government’s future spending. What’s less well known is that pensions and healthcare are also the two biggest tax expenditures in the tax code: the deductibility of healthcare premiums will cost the government about $650 billion over five years, with the deductibility of pension contributions running it a close second. That’s over a trillion dollars in lost revenue right there. Add in the mortgage-interest deduction and the lower rates on long-term capital gains, and you get to $2 trillion pretty quickly. Double that to get a ballpark ten-year figure.

This is something that proponents of private health insurance don’t often grok: that it’s heavily subsidized by the federal government already, due to its tax-exempt status. And it stands to reason that if the government is going to spend hundreds of billions of dollars a year subsidizing private health insurance, then it ought at the very least to get some kind of control over the healthcare industry in return. If you want to keep the system fully private, then fine, but don’t ask the government for massive subsidies at the same time.

As for the tax deductibility of pension contributions, Mark Miller wrote a great post on the subject in June, in which Teresa Ghilarducci makes a very strong point.

Ghilarducci argues that retirement saving wouldn’t decline if the deduction disappeared. “There’s no evidence that it increases saving; much of the academic literature shows that higher income people are simply moving investments they would have made anyway [in taxable accounts] to a tax-preferred account. And there are 25 million taxpayers in the bottom two quartiles who don’t take deductions, so they’re getting no subsidy at all from the federal government on their contributions.”

Everybody’s talking about the necessity of making hard choices: there are lot of hard choices here which could have an enormous effect on government revenues while at the same time simplifying the tax code and even maybe allowing a reduction of the headline rate of income tax. I’m in favor of taking a whack at all of the bars on this chart, with the exception of the EITC. Doing so would make the tax system more progressive, simpler, and more lucrative. Which is exactly what we need.

So, that’s one opportunity facing the deficit committee. But here’s something scarier:

unemployment.jpg

This is the official CBO unemployment projection, on which all of its economic forecasts are based. And it shows unemployment plunging to 5% after 2015. That’s considered the long-term unemployment rate, and I guess that 2015 is considered the long term, or something. In any case, it ain’t gonna happen — there’s absolutely no reason to believe that the economy will suddenly add an enormous number of jobs in four years’ time.

As a result, actual tax revenues are going to be lower than the CBO is projecting, since the CBO is anticipating revenues from millions of people who won’t in fact be employed. And government expenditures on unemployment insurance, Medicaid, and the like will be substantially higher than the CBO is projecting.

So when we get to work on the deficit, it’s important to remember that the problem is bigger than the official CBO numbers would have you believe. Partly because the CBO is assuming things like a 30% reduction in Medicare payments for physicians’ services after 2011, which simply isn’t going to happen. And partly because the CBO is being incredibly overoptimistic on the unemployment rate. So let’s get to work on reducing the size of those loopholes. It’s the only way we can credibly free up enough money to provide the stimulus the economy needs right now.

COMMENT

“Offer to pay the college educations for all doctors and nurses that stay in the profession for ten years, to limit expected future shortages of these professionals.”

Are trained doctors leaving the profession? I know that many are reluctant to enter general practice, due to income disparities between the specialties, but I haven’t heard of any leaving for other fields.

And isn’t the supply constrained primarily by medical school acceptances? There are many more hopeful applicants than seats. Those denied admission may be weaker students, perhaps, but are still generally very bright people.

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Charts of the day, Swiss franc edition

Felix Salmon
Sep 6, 2011 10:42 UTC

As a general rule, it’s the risk-on trades which have a tendency to blow up in your face. If you borrow in a low-yielding safe currency and invest in a higher-yielding risky currency, you make money every day, but can lose it all — and then some — with one violent currency move, when the risky currency suddenly weakens.

Today, however, it’s the other way around. With one announcement, the Swiss National Bank sent the Swiss franc — a classic safe currency, which rallies in times of uncertainty — plunging. To give you an idea of just how insanely huge today’s currency move was, here it is in the context of the past 12 years or so:

0842320fba.jpg

What this chart shows is that even during the recent crises, the Swiss franc basically never rises or falls more than 2% in one day. Today, it moved more than 8% — that’s a 20 standard deviation move. If market movements were normally distributed (which, of course, they’re not), 20 standard deviation moves would never happen. You can be quite sure though, that the SNB move today caused a lot of pain to a lot of people. Remember what the Swiss franc volatility surface looked like a couple of weeks ago?

EURCHF-vol-surface-082211.png

As I wrote back then, this chart shows a market very bullish on the Swiss franc and bearish on the euro — a market betting strongly against the SNB’s ability to weaken the Swiss currency. Well, that didn’t work out very well. But just check out what the same chart looks like today, post intervention:

image001.png

The first thing to note here is that the crazy implied volatilities seen two weeks ago seem positively low by today’s standard. Check out the y-axis: it’s now going all the way up to 31.35, compared to a maximum of 26.975 last time we looked at this chart. And in general the entire surface has risen a lot over the past couple of weeks. If you want to bet on the Swiss franc today, in any direction, you’re going to have to pay a lot of money to do so.

But there’s still a huge amount of skew here, in exactly the same direction. Over the near term, it’s not as pronounced as it was — there are lots of people betting that the SNB might be able to weaken the Swiss franc over the next few weeks. But over the long term, the market is speaking clearly: everybody thinks the Swiss franc is going to strengthen and many fewer people think it’s going to weaken. The SNB might have won this battle, but it’s not going to win the war.

And this is a hugely important war for Switzerland. Michael McDonough puts the Swiss franc’s strengthening into the context of Switzerland’s domestic economic health:

391066333.png

The problem is that the international capital flocking to the safe haven of the Swiss alps really doesn’t care about Swiss exports. And if you look at Swiss exporters, even the top gainers, like Swatch, which rose 6% on the day, actually fell in euro terms. The broad Swiss stock market, up 3.9% today, didn’t even come close to making up for the currency losses imposed by the central bank on foreign investors.

The main winners today, I suspect, are just going to be black swan funds and anybody else making bets on extreme market moves. You don’t see 20-standard-deviation events very often, and when you do, there are always one or two people with out-of-the-money options who suddenly make a fortune. But over the long term, the markets are stronger than any central bank. The Swiss franc will test 1.20 again, and when it does, we’ll see in practice just how many euros the Swiss National Bank can stomach before it gets full.

COMMENT

Dear Consumer Advocate:
I am writing this letter to you because the email option on the USPS website is woefully inadequate to express my concerns and was unable to even locate the branch post office I had the difficulties with. My old branch, Elk Grove in CA, has long lines but they do have ALL of their service lines open to alleviate this situation. The new branch, Rancho Cordova on Olsen Drive also in CA, closes service windows and lets the customer line grow and grow and grow. But THIS is not my main complaint.

It began back in July when I sold my home and moved into a rental home in Mather, CA (95655). Prior to moving we filed a change of address at the Elk Grove branch. As we were moving in I met the mail carrier for the rental in Mather, on July 31. We met at the ‘gang’ mailbox and asked which slot was for 4209 Aubergine Way. He opened the box and said we could either buy a new lock from the post office or exchange a lock that we purchased elsewhere. We did not have a lock at the time, so he locked and closed the slot. He said we may not see him again since many different carriers shared this route and delivered on a varied schedule. This is route #5 in Mather, CA.

No luck in catching a carrier even though I left a note. On August 6, I went to the Ranch Cordova branch on Olsen. Long line, longer wait. I spoke with three attendants and one supervisor and explained my predicament. All four offered me a slip to ‘fill-out’ and required a $50 fee to get me a lock and key. I refused and explained what the carrier had told me. I either wanted a key or for them to have the carrier open the box so I could install my replacement. I was told NO by the supervisor. The legal owner either had the keys or would have to appear, ‘in-person’, to get a ‘free’ replacement set. I left with no keys, no mail….

In speaking with the owner later that evening, my wife was told that he had NO keys (he purchased the home as a foreclosure) but would find the deed. The next day I encountered a different postman at our mailbox, but he would not allow me to exchange locks. But he did give me lots of mail either addressed to me our forwarded to me (incidentally, I was told the post office had no such mail; a lie???). His name was John and he told me to take the envelope with the USPS forwarding address to the post office and I should have no problem in getting the keys. Fat chance….

I spoke with the same supervisor as the previous day. I gave him the envelope with the forwarding address and asked for the keys. He said the carrier was again wrong and offered me that ‘yellow’ slip again. This time I said NO!!! Bring on the supervisor’s supervisor. He told me I didn’t own the property and was not going to get the keys. I went ballistic. No profanity, but I was loud. I left after he threatened to call the police on me….

I have never in my long life been treated like this. Poor customer service is a major reason the USPS is going bankrupt. Even yearly postage increases and, it seems, false advertising will not save this sinking ship. May the USPS RIP!!!

Sincerely,

Albert Hagemyer

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