Thursday, November 28, 2013

New York City: Street Art - 214 Lafayette - The Magic Door

(Drivebycuriosity) - Are you interest in funny street art? If you walk Lafayette Street in New York`s buzzing Soho you might spot a door with a funny mural: 214 Lafayette. This entrance got my attention because they change the art work frequently. Some of the displays are even a bit provocative, at least for prudish America.

A Google research shows that behind the door is one of the most expensive rental houses in expensive Manhattan (this YouTube video gives you an appetizer youtube). According to NBC you would have to pay $100,000 per month if you would rent there (nbcnews). But you would get a gorgeous indoor pool and more.

I have never been inside. But I enjoy seeing the changing faces of this door and I am curious what will come next.

To be continued.

Wednesday, November 27, 2013

Movies: The Hunger Games: Catching Fire

(Drivebycuriosity) - Maybe there is somewhere an alternative universe where the classical Rome still exists, still ruled by a mean dictator and his perfidious clique, but with a very advanced technology. The movie "Hunger Games: Catching Fire" shows such a world (imdb). The film is the second part of the franchise. Like the first part the film focuses on a perverted survival game with a lot of action scenes. The sociological aspects of the oppressed provinces (districts) are just a kind of topping of the adventure story (I have written about the fashion of dystopian science fiction here driveby).

I liked this film more than the first part of the trilogy (driveby) because it looked better. According to Entertainment Weekly the studio Lionsgate spent $130 million on the film — a major increase from the original Hunger Games‘ $78 million budget (insidemovies). The plus in investments paid well. Cinematographer Jo Willems, set decorator Larry Dias and the legion of software engineers (special effects team) delivered impressive pictures from the "Capitol", a kind of futuristic Rome. I also indulged in the work of the huge makeup department (IMBD registers around 70 names).

But the greatest accomplishment was the fact that the camera often rested on the face of Jennifer Lawrence. She is one of the rising stars on Hollywood`s firmament and the most valuable asset of the movie.

Woody Harrelson in the role of a cynical mentor was as cool and funny as in the first part of the franchise. It was also a lot of fun watching Stanley Tucci as the arrogant host of the TV spectacle. I enjoyed the flamboyant appearances of Elizabeth Banks as the escort Effie Trinket. Philip Seymour Hoffman, as the slyly chief manipulator of the games, was a real enrichment of the trilogy.
As in the first part I had problems with the figure of the dictator (President Coriolanus Snow), played by Donald Sutherland. This character was too plain and too stereotypical for my taste.

The new The Hunger Games doesn't really "catch fire" but the film is an acceptable popcorn movie for a dark winter day.

Monday, November 25, 2013

Economy: Guaranteed Annual Income - A Swiss Fairy Tale?

(Drivebycuriosity) - Switzerland is a very democratic country. The citizen can vote about many political issues which are in other countries decided by the government. The Swiss have a kind of direct democracy. Last weekend they voted against an income lid for CEOs.

Soon they can vote about another proposal: A group of political activists proposes an income for everyone by the government (businessinsider). The organizers want that every citizen should get 2,500 Swiss francs ($2,800) per month from the state. This would make $33,600 per capita and year.

The idea isn`t new. In the 1960s Milton Friedman recommended a negative tax rate (nytimes). People who earn less than a certain amount should get money from the state, he proposed. 

I find the idea charming. I would be happy if the government would pay me a nice monthly income for doing nothing. It reminds me of the German fairy tale from the "Schlaraffenland", about a country where everything is for free and milk & honey flow in abundance.

The proponents claim more advantages. Poverty should disappear and the Swiss economy would be more fairly distributed. An income for everyone also should significantly reduce the size of bureaucracy. It could take the place of welfare, food stamps, housing vouchers and hundreds of other programs, all at once, as The New York Times explains (nytimes).

But I have some doubts. Some people might stay poor because they spend this money quickly for alcohol, drugs, gambling and other purposes. Some people may stop working because they don´t need that anymore. Economists call this a disincentive to work.

The biggest problem is the question, how to finance this generosity. Switzerland has around 8 million people (like New York City). Paying every Swiss citizen around $33,600 annually would cost the government in Bern around $270 billion per year, around a third of the whole Gross National Product (GNP) .

The proposers suggest, that around 70 billion Swiss Franc  could be taken out of the cash boxes of the social security (nzz). This would be a gigantic theft, the largest robbery since the Russian revolution, because the extracted money would reduce the benefits (health insurance, pensions) for the insured drastically who had trusted the social security system.

According to the proposer the rest - about 130 billion Swiss Franc  - could be financed by raising consumer tax and other royalties. This would of cause an price jump and damage the Swiss consumer industry, including retail.

Soon we will see how the Swiss will decide.

Sunday, November 24, 2013

Economy: Iran Treaty - A Needle Into The Oil Bubble?

(Drivebycuriosity) - This weekend the U.S. and other western powers reached an agreement with Iran to halt its nuclear program (nytimes). The New York Times and other media celebrated this as a landmark accord.

As I read the headlines this morning I hoped that this would be a break through in the Iran conflict and a needle in the oil bubble. Since around 2004 the Iran conflict has been keeping the price of oil high. The Iran sanctions reduced the supply of oil on global markets and made it more expensive. Speculation that the Iran conflict could escalate and disrupt the oil transports from the Middle East drove the commodity price even higher. Therefore the price of oil includes a risk premium. Brent Crude, the global oil future, its still north of $100 (in the moment of writing $110 boerse-go).  The high price for global oil (Brent) even impacts the US price of gas because US refineries use mainly imported oil. High energy prices are one of the reasons why the current economic upswing is so slow.

As I read the reports about the Iran deal I was disappointed. The sanctions against Iran still stay intact! (seekingalpha). Iran`s crude oil sales will still be limited to about 1 million barrels a day under international sanctions that remain in force as part of the nuclear accord reached in Geneva today (bloomberg).

"It’s a step, but it’s not like the end of a sanctions regime, not like it’s going to have a significant impact on the real balances of supply and demand for oil,” commented the U.S. bank Citigroup (bloomberg).

It is clear that US President Obama and the other Western politicians missed the historical chance to pop the oil bubble now. Clearing the sanctions would have flooded the global oil markets and reduced the price of oil significantly.  This would have been a boost for the ailing European economy and many emerging markets. It seems the politicians didn´t understand the problem or they didn´t care.

But there is hope. There is a chance that some air will leak from the oil price bubble. The treatment reduces the risk that the Iran tensions will escalate into a military conflict. Therefore the accord could reduce the risk premium on the price of oil. Maybe the Brent future will move below $100 in the coming days.

Saturday, November 23, 2013

Culture: Street Art - 190 Bowery, New York, Revisited

(Drivebycuriosity) - New York City is a mecca for connoisseurs of street art. Especially in South Manhattan (Lower East Side, Soho, East Village) you could find a lot of murals, graffiti and wheat pastes.

In May I wrote about the house 190 Bowery at the corner of Spring Street and the Bowery (drivebycuriosity). This place is owned by an artist who encourages street artists to display their works on the walls of his building, that has been a German bank in the 19th century.

Therefore the Germania Bank building at 190 Bowery is a place of artistic freedom. And there is a lot of change going on. Old pieces are continuosly covered by new work. It's art in progress.

Since my last post many new art works appeared and some of the old ones have been altered.

To be continued.

Friday, November 22, 2013

Economy: Europe - Why France Is Falling Back

(Drivebycuriosity) - Europe`s economy is growing again, but one big country is shrinking: France. This November the German manufacturing and service sectors both accelerated again to the highest growth rate since months and in UK manufacturing orders rose at the fastest pace in almost two decades (bloomberg). At the other end of the scale, France, the euro area’s second-largest economy, saw manufacturing output slip to a six-month low and the service sector fell to a 4-month low (businessinsider). Both sectors are shrinking faster than in October. And France´s GDP fell in the third quarter, while it grew in UK and in Germany.

France “showed further signs of being the ‘sick man of Europe’ with output showing a renewed decline and raising the risk that GDP could fall again in the fourth quarter, constituting a renewed recession,” commented London-based Markit Economics who supplies these economic barometers (bloomberg).

It becomes clearer and clearer that France is falling back.

France`s economic weakness is not surprising. The different developments in the 3 large countries are the result of different politics. UK and Germany both have center-conservative governments that are business friendly and committed to a market economy.  France is ruled by a socialist with strong leftish tendencies.

France´s economic misery has a name: François Hollande, the President of the French Republic. In May 2012 - as candidate of the Socialist Party - Hollande won the French elections by "throwing red meat to the left", writes the Economist (economist). Hollande used populistic leftish arguments like raising taxes on big corporations, banks and the wealthy and bringing the official retirement age back down to 60 from 62. He also pledged for creating subsidized jobs in areas of high unemployment for the young and promoted more industry in France by creating a public investment bank.

Hollande`s socialistic ideology and his commitment to more state influence and regulations are bad for the business climate. Shortly after his election victory the French president started to implement his visions and raised taxes on businesses to increase revenue for Socialist-favored programs (telegraph). Recently he announced a tax of 75% on incomes higher than €1 million.

High taxes are poison for the economy because they are weakening private initiative and slowing down investments in capital. Hollande`s business unfriendly policy also reduces the competitiveness of French companies on global markets and discourages them to hire.

The damage is now showing in the economic numbers.

Wednesday, November 20, 2013

Economy: Why Bitcoin Is A Toy And Not A Currency

(Drivebycuriosity) - There is a lot ado around Bitcoin. This is a "digital currency that functions without the intermediation of any central authority", says Wikipedia (wikipedia): "Through various exchanges, Bitcoins are bought and sold at a variable price against the value of other currency".

This morning the price of Bitcoin crashed to $460 (.businessinsider). Two nights ago it was over $900. Less than a week ago Bitcoins were traded at less than $400 (techcrunch) and in the begining of the year a Bitcoin cost just $13.55 (cnbc).

The wild fluctuations show that Bitcoin is not a currency:

1. Paying with Bitcoin is a game of chance because of the wild fluctuations. Tomorrow`s value of any payment could be much higher or lower than expected. Neither seller or buyer could calculate the transaction.

If a company would mark their prices in Bitcoin they would lose their customers when a sharp Bitcoin rally makes their goods & services too expensive or they would suffer high losses when a Bitcom crash makes them too cheap.

If someone borrows Bitcom he could go bust because his debt could explode when the Bitcoin price jumps, lenders fear the risk of a sudden Bitcoin crash.

The extreme fluctuations would make accounting and business plans senseless.

2. Bitcoin is popular because its supply is limited like paintings from Picasso. According to Wikipedia new Bitcoins are created at an ever-decreasing rate (wikipedia). The total number of Bitcoins is capped at 21 million.

But this restriction also an obstacle on the way to the use as a currency. In the 1940's, Milton Friedman recommended  a fixed money supply, the idea that the money volume should be kept at a certain volume. Later he abandoned this proposal. He realized that a growing economy, say with a rate of 2% annually, needs a growing money supply. The money volume has to grow at least with the same rate as the economy to finance the growth. Otherwise prices - including wages - would have to fall, in this example around 2% annually. Friedman acknowledged that generally falling prices could lead to a severe depression. Therefore the limited supply of Bitcoins would not satisfy economic growth.

Because of these problems it is highly unlikely that many people use Bitcoin as a currency, say for payments, calculating prices of goods & services, and denominating loans. Today there is already a strong competition between alternative currencies like US Dollar, Euro, Chinese Yuan, British Pound (Pound Sterling), Swiss Franc and more. Each of these currencies represents an economy and it is much more reliable for economic calculations & transactions than Bitcoin.

Conclusion: Bitcoin is cool because it is a very geeky Internet gadget. The wild price fluctuations invite gamblers to play with it. But it is not a currency and will never be.

Economy: The Virtuous Circle Of Climbing Retail Sales

(Drivebycuriosity) -  Surprise, surprise. This morning we learned that US retail sales rose 0.4% in October, more than the pundits had expected (+0.1%) (businessinsider). The numbers include a solid performance of furniture (1.0%) and electronics (1.4%).  Clothing sales and eating & drinking also rose 1.4% and 1.0%, respectively.

But, was that really a surprise? Consumer spending is getting a lot of tailwinds these days. The job market is healing: Last month the US created 204,000 new jobs, meaning more incomes available to spend. Many Americans are getting wealthier thanks to the ongoing rally on the stock market (S&P 500 plus 25% plus year-to-date) and to climbing home prices. Interest rates (including mortgage rates) are on record lows. And the prices for gas are falling. In October US consumers spend 0.6% less at gas stations, which marked the biggest drop since April (marketwatch). The average cost of a regular gallon of gas fell 4% in October and the price is down 11% since July.

Therefore, anything else than solid retail numbers would have been a surprise. As long as the positive constellation will prevail - and I think the combination will continue for a while because the global economy is getting stronger - retail sales will climb with a solid rate.

Btw rising retail sales are a boost for a lot of companies, not just for the retailers. Gainers are producers of furniture, electronics, clothing and more. Therefore the retail gaines translate into more jobs, more income and further climbing stock prices - a virtuous circle.

Monday, November 18, 2013

Economy: China - Less Mao Zedong, More Milton Friedman

(Drivebycuriosity) - China is changing. Last week the government in Beijing announced a list of serious reforms, called a "blueprint for reform". It contains the most wide-ranging and reform-tinged proposals for economic and social change in many years, says "The Economist" (economist). According to Bloomberg the announced changes are aimed at giving more influence to market forces and loosening government controls (bloomberg).

The blueprint  contains a 60-point list of policy tasks, tackling a wide range of issues (marketwatch). Highlights are
- an end of the strictly one-child-only policy which should reactivate China`s slacking population growth, giving consumer spending a boost
- allowing farmers to sell their communally owned land at market prices  which - according to the bank Société Générale - will boost farmers’ income, thus providing them with the start-up capital to settle in the city
- permitting private investments in state-owned companies which should make them more efficient

According to the Wall Street Journal the blueprint also contains a long shopping list of industries that should be open up to foreign investment (wsj). "Beijing will promote the orderly opening up of the finance, education, culture and health sectors. Restrictions on investing in child care and elder care, construction and design, accounting and auditing, logistics and e-commerce will also be relaxed, as will limits on market entry for manufacturing". This should attract more foreign capital and give the Chinese economy an additional boost.

The reform isn´t a new revolution, but it seems to be an essential chapter of China´s evolution and another important step of the country´s transformation from a rigid communistic control system into a modern economy that started in the late 1970s, shortly after the Mao Zedong`s death (1976).

The country will be still controlled by the communist party which will keep her monopolistic political power. But citizens and entrepreneurs gain more economical freedom. This means less Mao Zedong, who had enforced the strict control over everything by the communist party, and more market economy in the spirit of Adam Smith, Friedrich Hayek and Milton Friedman, who called for the "freedom of choice".

The reform should encourage consumer spending and make the whole economy more flexible. This should strengthen the domestic  Chinese economy and could reduce the country´s dependence from exports and from the global market. Therefore the reform should accelerate China´s transformation from an emerging country into a large modern economy like the US.

Sunday, November 17, 2013

Movies: Dallas Buyers Club

(Drivebycuriosity) - Aids is still a big problem, but in the bad old times of the 1980s being HIV positive was a kind of death sentence. Because there was not much of a medical treatment infected people usually had just some more months to live.

The movie "Dallas Buyers Club", directed by Jean-Marc Vallée, is based on the true life story of Ron Woodroof, an electrician and amateur rodeo bull rider in Dallas, Texas USA (imdb). In 1985 Ron was diagnosed with HIV and was given 30 days to live. He started smuggling anti-viral medications from all over the world, which were still unapproved, for his own treatment and created the "Dallas Buyers Club" providing its paying members with these alternative treatments.

The movie shows how a determined and savvy man fights for his life and is doing good for a lot of others, but he has to struggle against a rigid & outmoded law system and against an arrogant & hypocritical bureaucracy.

There are 2 outstanding performances which make the movie worth seeing. Matthew McConaughey, as Ron, shows how this character grows on his challenges. Ron´s transformation from a redneck to an entrepreneur of health care and medical reformer in spite of his fatal illness is fascinating. Jared Leto as a HIV positive transvestite also was quite impressive. Btw, according to Wikipedia Leto lost 30 pounds for the role and McConaughey gave up 50 pounds (wikipedia). Jennifer Garner, as a clinician, delivered a solid performance and gave the film some female charm.

"Dallas Buyers Club" is an entertaining biopic and a compelling retrospective on an episode of the history of medicine. 

Friday, November 15, 2013

Economy: China - The Multi Decades Stimulus Program

(Drivebycuriosity) - Finally, China announced an end to their "one-child-only" program. Today the government in Beijing declared "that couples can have two children if either parent is an only child" (bloomberg). Because the rule was implemented in the year 1979 couples who are both around 35 years old or younger will be allowed to have a second child. In five years this limit will have climbed to around 40 years.

The "one-child" rule had reduced the numbers of births in China considerably. This was intended because China was still a poor country in the 1980s. But now this policy isn`t approbate any more because China´s economy is fast growing and the country became a global economical super power. 

The rule also had reduced the proportion of female births drastically thanks to the unfortunate obsession with male heirs. The low number of female infants had reduced China´s population growth drastically  leading to an aging population like in Europe & Japan (businessinsider).

The coming change will allow more births in the coming years and will give way to a higher ratio of female births. Hence China´s population could grow again in the coming decades which could reduce the average age of the population or at least slow down its rise.

This will be a boost for China´s economy, especially for consumption, which will last for decades to come. More babies don`t mean just more diapers, baby food and toddler toys, they also mean more health care spending, more education, more houses, more demand for textiles, electronics and other goods - more demand for everything. And this for a very long time.

Faster growing population and consumer spending will strengthen the domestic  Chinese economy and will reduce the country´s dependence from exports and from the global market. This will stimulate China´s transformation from an emerging country into a large modern economy like the US.

China´s kindled consumer spending also should fane imports  boosting the global economy for many years to come.

Thursday, November 14, 2013

Culture: Street Art - The Crazy World Of Stencils

(Drivebycuriosity) - If you are in New York City then it is highly recommended to keep the eyes wide open. There is so much to see.

The ubiquitous street art  you can find at many places gives the city a lot of her charm. I have much fun with the stencils you can spot almost everywhere.

Their creators print texts or images on paper, cardboard, or other media (wikipedia). Then they cut out the prints and glue them on walls, doors, lamp posts, mail boxes, energy transformers and where else.

Very often the pencil artists use wheat paste, a gel or liquid adhesive made from wheat flour or starch and water, as a glue (wikipedia). This art form is called "wheatpasting" and the stickers are also known as wheat paste.

Here you can see some of the funniest stencils I have recently dedected on the streets of South Manhattan (Soho, East Village, Lower East Side). An older collection you can finde here (driveby).

 To be continued.

Wednesday, November 13, 2013

Culture: Magritte Visits The Museum of Modern Art (MoMa), New York

(Drivebycuriosity) - Do you live in or around New York City or are you planning to visit the metropolis in the near future? Than you might consider going to the current Magritte exhibition at New York`s Museum of Modern Art (MoMa). The show is called "Magritte: The Mystery of the Ordinary, 1926–1938" and is running through January 12, 2014 (moma).

René Magritte is my favorite painter. I am fascinated how he played with the reality and told tiny stories in his paintings. Some of his works could inspire compelling movies, at least in the heads of the observers. I have seen many of the exhibited pictures before in books or on Internet (Google has - as usual - a nice overview google), but spotting them in real gives them a certain magic.

Unfortunately I couldn´t make many pictures there thanks to the museum´s stupid "no photographs" policy which is strictly enforced. Therefore I can introduce here just a small selection of the masterpieces which you can admire at the MoMa.

But anyway. Enjoy.

Tuesday, November 12, 2013

Movies: Blue Is The Warmest Color

(Drivebycuriosity) -  The state of the modern cinema gets a lot of criticism. The pundits claim that the quality of movies is sinking, partly because many films are based on comic books. This year a motion picture based on a graphic novel won the Palme d’Or at the Cannes Film Festival and was celebrated at a lot of other film festivals: "Blue Is The Warmest Color" (imdb). This is the picturization of the graphic novel "Blue Angel" ("Le Bleu est une couleur chaude") by Julie Maroh (wikipedia).

Director Abdellatif Kechiche focused on around 3 years in the life of Adèle, who in the beginning has just turned 16 and is a junior in high school. The teenager discovers her interest in the same sex and fells in love with Emma, a student of "fine arts" (painting) who is around 10 years older. Soon Adèle moves in with the aspiring painter and an informal marriage begins (as usual no spoilers here).

"Blue" is a psychological drama about pleasures and pains of an intense relationship. The movie also touches a lot of issues like the life of young people in the French province, school system, the role of artists in the society, the pleasures of eating and more. Maybe "Blue" is a mirror for the modern French culture.

Adolescent Adèle, who comes from a somewhat red neck family,  has to deal with a lot of challenges: The significant age difference and the unfamiliar sophisticated and somewhat bohemian environment of the older woman.

"Blue" got a lot of public attention because of the generous filmed sex scenes between both girls. Indeed without them the movie would be just another art house relationship drama. But the intensive sexual scenes are defining and very important to explain the bonds between both women. 

I could have watched the intense interaction between the 2 beautiful young women hours and hours. Their exchange of pleasure and the way they were teasing, stimulating and exploring each other was highly esthetic. 

The newcomer Adèle Exarchopoulos, who played Adèle, was a canvas for the emotional awakening of a teenager. Her curiosity and her hunger for life, food & sex defined the movie. Léa Seydoux (Inglourious Basterds) as her somewhat calculating object of desire was a congenial complement.

I want to see more picturizations of graphic novel like ""Blue Is The Warmest Color"".