Gate down

We had some storms here last week and I noticed that the bottom gate has been damaged.  It's hinged to a post at one end and chained to a post at the other.  Both posts had rotted and had been wrenched from the ground.   Time to get some new posts and some concrete.    I went down to our local garden centre to see what they had.   What they had was a sale on.

A pretty good sale it was, too.  Things normally marked at 40 euros were down to 15.  I bought some tools, some plant pots, a whitecurrant plant (like a blackcurrant but white fruits) (not on sale) and a pair of walking boots.  Oh and I did remember the posts and concrete.

My old walking boots had shed a sole recently and close inspection showed that the other sole was detatching, so I took them to the cobbler in Evron.   He glued them back on but said that fixing the  rubber sole to the plastic underside of the boot, was difficult, and that if they detatched again he would re-glue them (for free).  They did and he did, but perhaps it was time for a new pair.

I remember buying the old ones in a sports shop; they were instantly comfortable, so I got them even though they were quite expensive - about €75 if I remember rightly.   The new ones at the garden centre were on sale at €24, and equally comfortable.   It turns out that they're by the same manufacturer, and almost identical in design.  The old ones have lasted ten years, and if they fail again I'll try using transparent anti-leak mastic to stick them back together myself in a last-ditch effort to save them. In any case, I hope the new ones will do as well.

Short John Silver

A further thought regarding the inevitability of bankrupt hedge funds, and consequent bailouts.

One of the things I have always believed about share brokers is that, when you buy a share through them, they buy it on your behalf, keep it for as long as you want, and then sell it for you when you ask them.  I might be wrong, but perhaps that's not necessarily true for all brokers and for all the time.   Under certain circumstances, your "share purchase" might only represent a liability on the part of the broker,  that is, a promise to pay you the value of the share at the time when you wish to "sell" it.   Meanwhile, the broker  might, for example, lend it to a hedge find, who might short it, and who might, as discussed, go broke.

At this point, the hedge fund has a liability to the broker, and the broker has a liability to you.   If the hedge fund goes broke, the broker still has its liability to you, that it might or might not still be able to meet.  The way I think that bailouts work is that the government hands oodles of dosh to the hedge fund, who can then pay the broker who can then pay you.  What should happen in my view, is that the hedge fund should be left to go broke, the broker also if need be, and the government sends you the value of your share directly.

Yeah, right, I can see that happening.

Pancakes

In England, pancake day is always on a Tuesday.  In France, it's always on the 2nd Feb.  We had pancakes yesterday, or at least, the nearest French equivalent, that is, crêpes.

As a kid, I only ever got given pancakes to eat on pancake day, and they were always covered in melted butter, sugar and lemon juice.  In France they will eat crêpes given any opprotunity; they are served as snacks on any occasion, and are covered in any kind of (sweet) topping that might appeal.  French kids and many adults go for Nutella, but jams are popular too, as is a simple sprikling of sugar.  Lemon juice is not unknown.

We were invited to a friend's house in the village, where we were served crêpes, accompanied with several options for spreads, including, to my surprise, some strong liquors such as scotch, cassis and other flavoured alcohols.   Guided, as I thought by the suggestions of our hosts, I discovered that scotch with marmelade made an excellent topping, as did cassis with certain jams.  It was only later that they told us, over a glass of wine, they had rather expected that we would choose either the alcohol, or the jams, but not both.  Oh well, live and learn.

Silver lining

Well, here's a thing.   Some  investors  caused considerable pain to a hedge fund.

If I borrow a company's share from you, with a promise to give it back to you after a fixed period of time, I have to pay you something for the privilege.  The amount will depend on many things but will usually be small compared with the value of the share that I borrowed.  If I think that the share will decline in value during the period of the loan, I might decide to sell it, intending to buy it back at the end of the loan period so I can give it back to you.  This is called short selling. 

As a short seller I am taking a risk:  if the share becomes more expensive, I still have to buy it back, whatever the price, if I am to fulfill my promise to you.  Since the price can be whatever the market decides, my potential losses are unlimited.  OK, not unlimited, but certainly enough to bankrupt me, which is about the same thing.

There doesn't seem to me to be anything immoral in the above transaction, but, but.....   the transaction is one where there is, if I have done my homework, a good chance of a finite gain, but there is also, always, a chance of a loss, including a small chance of an infinite loss.   Probability theory tells us that eventually, players must inevitably go bankrupt.

Here we see the asymmetry in the financial markets:  When the shorts make money, the financiers keep the profits, but when they fail, they can be (and have been) "bailed out", as necessary.   That is, taxpayers' money is handed to them so they can fulfill their contracts.   Since they will inevitably eventually go bankrupt, it is a scheme for passing taxpayers' money to the financiers.

The precious metals market (mostly gold and silver) is one that appears to have been manipulated for some time.  Most of what is traded in the gold markets is "paper gold", that is, a promise to deliver gold rather than actual delivery of the real physical stuff.  I believe that there are upwards of 100 promises to deliver, for every ounce of deliverable gold.

Again, I'm not sure that there is anything immoral here.   If my experience tells me that out of every hundred customers to whom I have promised to deliver gold, only one will actually take it, the others taking money to the value of the gold instead, then it's not unreasonable for me to trade paper gold in this way.  But what happens when, instead of just one person out of 100 taking delivery, two do?  Or 50?   Or 100 ?   And the question arises: what is actually being traded?  The gold price is held to be the price at which paper gold is traded, but in reality, its links to the physical market for real gold are thin.

Somethng else is happening at the same time.  Bitcoin, when it started out, was used, as I understand it, as a way of paying for illegal drugs, mostly cannabis.  It used to have almost no value, but now it is quite expensive.  It was and remains a favourite among the IT crowd, that I describe without any malice intended, as nerds.  Many are now extremely rich.   So we have a bunch of nerds, with no loyalty to the financial system, with huge personal financial clout, and with a sense of fairness.   They don't like what they see.

There is noise about the nerds going after the silver market.  Watch this space.

This post does not constitute financial advice of any kind.

Mobile

We recently got the new cellphone antenna installed in the village, only a few years late.   At first, it wasn't working properly for Orange users (me), but that has been sorted.   So I now get text messages within half a minute of them being sent, which helps with the 2-step authorisation process for paying for internet purchases with my credit card.   And I can receive voice calls too.  But we're right on the edge of the coverage and depending on how many walls are between me and the antenna, calls are of variable quality.

But on my recent walk, I see the following notice, just down the road, of the installation of a mobile phone antenna.  It turns out that this will be installed in the valley, 7m high on the wall of the museum there that faces our place.  50 yards away and in line of sight.  Can't wait.

A kickstart Oyo Nova

I have an exercise bike in front of the TV so I can be doing something useful while the news is on.   Walking and biking in the countryside are by far my favourite forms of exercise, but not if the weather is miserable.   So if I haven't been able to get out, I will often ride the exercise bike in the evening.

This is all very well for burning the calories and keeping the legs in trim, but doesn't do much for the upper body.   I do have some weights in the little gym in the gîte but weights aren't really compatible with normal living space, or watching TV.  So I was intrigued by a kickstarter program for a compact exercise device that uses rubber the resistance.   Here is a pic.

The resistance is provided by the black disks with short lengths of rubber in the middle, attached to the metal ring.   You can attach or detach the disks to change the force needed to bring the two arms together.  The handles on the ends of the arms can also be pulled outwards against the resistance.

I had not participated in a crowdfunding project before, but it seemed to work fine; I paid the money and waited, while various updates on the manufacturing and design process were posted, and in due course the thing arrived.  It does what was claimed for it, it sits discreetly on the floor beside the sofa, and I use it when I feel like it.

Random notes

Been a bit quiet around here on the old blogging front.  Not much to report in fact, aside from the general depression associated with the curfew, and the equally general increasing anger about it.   However I do get to walk about the countryside (if it's not raining, and as long as I'm back before bedtime) so here's a few random snaps from recent walks.

We have been spared the snow here, but only just;  it was falling not far away.   In fact it has been a bumper snowfall for the ski resorts down South.  They have been allowed to open, but the mechanical lifts have been forbidden to operate.   The ski stations are not happy.  One wag suggested that the swimming pools be re-opened, but not filled with water.

This is frost, on a walk one cold morning, and was the whitest we have had so far.   Later on I happened past the garage where M Mottais told me he started out on his engineering career - here it is.

Property in the countryside around here is often old, and has been maintained more or less well for many decades.   As a consequence, the state of things is quite varied.  Sometimes one comes across some fine repair and maintenance work, as with this wall with its little wooden gate in solid oak.   The wall looks like it will be pointed in a sand/lime mix soon.

And who paints a target on a sawn-off log end, in the middle of nowhere, beside the river?