Reality TV is a television format in which ‘ordinary’ people willingly participate. They don’t act; they do, for real. A reality TV show is hence defined by the activity it features. For example, if the participants are going around in cars, arresting people; you have a ‘cops’ reality TV show.

The reality TV genre has an identifiable sub-genre. For example, Masterchef. In this sub-genre, the participants not only do things, they get lectured at by experts. Often, a participant does badly and gets shouted at. He or she may lose and get eliminated. Sometimes a participant does well, and wins. He or she then goes through. Usually, a participant has a chance to improve. This is always the case if the participant is featuring in just the one show: at the beginning of the show, he or she does badly, gets lectured at, is made to cry if at all susceptible, and then improves.

We need a name for this sub-genre. ‘Improvement TV’ is an convenient choice, but it suggests self-improvement, and that’s too woolly a concept. ‘Results TV’ might be better. After all, results are what matter. The fillet of tuna must be perfectly cooked, and the sauce must be delicately flavoured. The dress must be just right, and the make-up must be exquisitely coordinated. At the same time, a participant can’t spend all day about it, so perhaps ‘performance TV’ is what we want. The idea is that, with guidance, the participant will learn to consistently perform at an excellent level. Come to that, why not ‘excellence TV’?

Then again, failure means bad things; bad as in worse than a brow-beating. Putative dates will mock; wealthy and demanding customers will not pay; the participant’s business will fail. If the show is a contest, the participant may be eliminated, once the fruits of his or her poor efforts have been thoroughly reviewed. So perhaps another name candidate might be ‘consequences TV’. Fail, and there will be consequences.

We’re still missing something, though. We’ve been focussing on the participant and his or her efforts, and we’ve ignored the expert. But the expert is crucial to the success of, well, everything. There must be standards; the expert sets them. There must be motivation and encouragement; the expert provides it. There must be specialist knowledge; the expert has it. Crucially, there must be an ethos of success; the expert knows what this is, and will impart it, if the participant pays attention (the participant is very lucky to have the opportunity). In short, the expert is virtuous; the participant, less so. So there’s our coinage; ‘virtue TV’. It’s the stuff of our times. Draw near and be made virtuous.

The Debt Snowball Problem

OK, just for a change let’s start with some math. The increase in a countrys sovereign debt stock to GDP ratio is given by the following formula:

where D is the total debt level, Y is nominal GDP, PD is the primary deficit, i is the average (nominal) interest paid on government debt, y is the nominal GDP growth rate and SF is the stock-flow adjustment.

Now, if like me, you don’t especially love maths, you may want to ask “what the hell does this rigmarole mean?”.

Well, in simple plain English the above equation – which in fact comes from the recent Danske Bank report on EU Sovereign Debt– means that movements in the critical debt to GDP level depend both on the level of the annual fiscal deficit (the primary deficit, on which so much attention is currently focused in the Greek case) and on changes in the ratio between the value of the stock of debt and the value GDP. The key term is the one in brackets, and it is often referred to as the snow-ball
effect on debt – the self-reinforcing effect of debt accumulation (or de-cumulation) arising from the difference between the interest rate paid on public debt and the nominal growth rate of the national economy. Continue reading

Moodys on Japan and the Eurozone – Stating the Obvious

I shall openly admit that I have always found the exact role of the rating agencies a bit odd in the global financial system. I mean, do we really need them to tell us which bonds are good and which are not? I am not sure and what is more; rating agencies sometimes, if not all the time depending on their ability to stay in front of the curve, seem to wield a tremendously amount of power relative to their role as private actors (after all) in financial markets. Continue reading

Double-Dip Worries In Japan and Germany (Updated)

Whoever said economists are people who don’t ever get anything right?

“Economic growth in Germany probably stagnated in the fourth quarter from the previous three months, the Federal Statistics office said. Still, the figure is “surrounded by uncertainty,” Norbert Raeth, an economist at the office, said in a press conference in Wiesbaden today.”

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Will She….Won’t She? The Greek Government’s “Latin Tango” With The IMF

Well the wires are really alive this morning. Greece is receiving a visit from the IMF today. The meeting was scheduled well in advance, but that doesn’t mean the agenda was.

A team of International Monetary Fund officials arrive in Greece today to aid the government in its efforts to tame Europe’s biggest budget deficit. The mission, “within the context of the regular surveillance that the IMF provides to its membership,” will help the government with “pension reform, tax policy, tax administration and budget management,” a spokeswoman for the Washington-based lender said in an e-mailed statement yesterday.

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Mr Bean Meets The Three Wise Men

Last Wednesday was Epiphany. In Spain it is also a public holiday – Los Reyes Magos – a festival which celebrates the visit of the three wise men who came from the East to find the infant Jesus. Coincidentally on the eve of Epiphany this year the Moncloa did receive a visit from three wise men, although it is not clear whether they came (as tradition would have it) bearing gifts, or whether they brought with them a list of demands from further East in Europe about what Spain’s government ought to be doing to stop its economy falling apart.

Unfortunately, due to a technical fault (some say the website was hacked) there to meet them as they entered the gateway and fired up the browsers on their xmas-new I-Phones was not the Spanish Prime Minister, but a strange interloper, otherwise known as Mr Bean. Continue reading

Stark Raving Mad?

Not necessarily, but he is causing one hell of a fuss today. The Stark in question here is, of course, ECB Executive Board member Juergen Stark, who stated in an interview with the Italian Newspaper Il Sole 24 Ore that, in his opionion, the European Union would not help bail out Greece if the need were to arise. Certainly the initial reports of his statements sent shock waves round the globe. The euro dropped as much as 0.5 percent to $1.4282 after the remarks before laterrecouping its losses, and the yield on Greece’s 10-year government bond rose 4 basis points to 5.672 percent. Essentially it is hardly surprising that this should be the case, since following what happened in Dubai, two questions seem to have been in the forefront of investors’ minds: i) who is going to pay for all that surplus second residence property that has been built all along Europe’s periphery (from Ireland, to the Baltics, to Hungary, to Bulgaria, to Greece, to Sovenia, to Spain, and to Portugal); and ii) are the core European states really going to prop up the peripheral ones (in extremis) or will they follow the example of Abu Dhabi, and pick and chose what they will support and what they won’t. More than anything else it is uncertainty on these two points which lies behind all the earth tremors currently shaking the monetary union. Continue reading

When airport security is part of the problem

A bizarre story from Dublin.  Short version: A Slovak agency was running a covert security check at an airport, which is presumably Bratislava.  The test involves planting explosive materials in the bags of unsuspecting passengers.  8 packages in total.  7 found.  One made it on to a plane to Dublin, and was brought home by the Slovak migrant who now lives there.  Apparently this was 3 days ago.  It’s not clear whether embarassment or delay in figuring out what had happened got us to today, when Irish police located the explosives and presumably various diplomatic notes are now being exchanged.  The timing suggests that the test was run into response to the Detroit bomb.  One wonders how much of this stuff goes on — perhaps the “someone must have put it there” excuse needs more credibility.

UPDATE: Initial word was sent by telex to the baggage handlers and not the Dublin airport authority.  Who uses telex anymore?