Wisdom Dawns on the Importance of Market Liquidity

I've been crying myself hoarse for years about the need for liquid (i.e., competitive) markets. A free market does not mean a laissez-faire market. It means a market that is guaranteed to be liquid, with plenty of buyers and sellers, and with no player large enough to influence prices through its actions alone.

The recent noises emanating from the Obama administration are a welcome indication that this lesson has been learnt. The world has paid - is continuing to pay - a very heavy price for the state of market illiquidity that has resulting in some players becoming too big to fail.

Someone rightly said that if a company is too big to fail, it's too big to exist.

We need aggressive antitrust, not just in the interests of fairness, but in the interests of our very survival. I hate to argue by pandering to practicality over principle, but that seems to be the only argument that works. Monopolistic and oligopolistic markets are unfair, but that doesn't seem to bother people. Monopolistic and oligopolistic markets can lead to systemic collapses that end in a deep recession - that probably gets more people to take notice and act.

The European Union recently acted boldly in fining Intel over a billion Euros for abusing its monopoly in computer chips. We need more such action against all monopolies, not only other IT monopolies like Microsoft but its counterparts in every industry.

By keeping markets liquid, we keep them healthy and our livelihoods safe.

Star Trek Review

(Warning - spoilers ahead)

I saw Star Trek over the weekend at Castle Towers Megaplex.

In short, the only thing that prevented me from being wowed by the movie was the fact that all the reviews I had read had prepared me to expect something pretty good. The fact that the movie lived up to the hype was ironically a bit of an anticlimax.

I've been a Star Trek fan since the early eighties, when the series started showing on Indian TV. The only thing that managed to knock Star Trek down my list of favourite TV shows was Star Trek - The Next Generation, which began airing in the mid-nineties :-).

The new movie directed by JJ Abrams takes us back to the original story and provides us a newly-minted background to the characters of the Enterprise crew. It's very slickly done, although I do have a few quibbles. I would hardly be a Trekkie if I didn't ;-).

I don't have to provide a standard synopsis of the movie. There are plenty of others available. Here are my quibbles alone, but keep in mind that they in no way detract from the impact and appeal of the movie. You should go and see it on the big screen, even if you aren't familiar with the genre. It's very beginner-friendly.

On to nitpicking, then.

1. A prequel should try and be consistent with its future history. To a large extent, Star Trek succeeds in "backporting" its future characters' idiosyncrasies back to their newly-presented roots, but there are glaring exceptions. In Star Trek IV - The Voyage Home, the crew lands on Vulcan, and Spock has a conversation with his mother. JJ Abrams's prequel not only kills off Spock's mother but all 6 billion denizens of Vulcan, along with the planet itself. It's going to be hard to watch The Voyage Home again without feeling acutely uncomfortable. Abrams shouldn't have done this to us.

2. Captain Pike is in a wheelchair at the end of Abrams's movie, and has already become Admiral. The Cage and The Menagerie are still ahead of him. Is he demoted, does he get out of the wheelchair only to go back to it in time for The Menagerie, or is this another Pike? Highly illogical.

3. The human-Vulcan quandary affecting Spock seems to be resolved too soon. It's not until The Voyage Home that Spock is supposed to "feel" fine.

4. Spock designed the Kobayashi Maru test. I'm fine with that. But the point of it was for the cadets to learn fear? Spock wants Starfleet officers to learn lessons through an emotion? Illogical again.

5. And what's with the Uhura business, anyway? There's not a hint of anything between Spock and Uhura in any of the original episodes, so how are they going to explain the cooling off that surely must have happened after the Abrams movie? Perhaps there will be sequels to the prequel that will resolve this. Advice to the director: don't start anything you can't finish.

There were many nice touches I did enjoy. Bones gives us another variation of his "I'm a doctor, not a " with physicists duly lining up for the honour this time. On the other hand, there were many opportunities for him to say, "He's dead, Jim," but he passed them all up.

Jim Kirk can't resist anything in a skirt, even as he's about to pass out in sickbay. It's pretty hilarious, though I've often wondered if that isn't a fatal character trait for a ship's captain. (Picard, by contrast, is a gentleman who will even carry his guests' bags and he gets my vote over Kirk every time.)

Spock's reluctance to say "Live long and prosper" to his own past self on the grounds that it would be "self-serving" is pretty wry and shows that Vulcans understand humour after all.

The villain Nero is very casual whenever he hails Federation ships. He's so informal you'd almost expect him to go, "How'ya doin'?"

One final nitpick. I would have appreciated an explanation of why there are no seatbelts on starships in the twentythird century. I was hoping the prequel would explain that. Oh, well.

Obama and Nuremberg

I'm simultaneously admiring and critical of President Obama this week over his handling of the Bush-era policy towards torture.

I'm glad he released documents revealing the extent of torture practised by the CIA, but I'm not happy about his desire to move on without affixing responsibility and culpability for the same.

CIA director Leon Panetta is believed to have told his operatives that "the interrogation practices had been approved at the highest levels of the Bush administration and that they had nothing to fear if they had followed the rules."

“You need to be fully confident that as you defend the nation, I will defend you,” he said.

Someone needs to tell these people that the Nazis' excuse of Befehl ist Befehl (orders are orders) was emphatically rejected at Nuremberg.

No, Mr. CIA Director, your operatives cannot be excused because they "merely" followed orders. Human rights violators must always be punished, from George Bush and Dick Cheney down to the cretins who did the dirty work.

Another Government-owned Telco?

It's strange how the Australian government has shelved months of effort that went into a tendering process to finally announce that it would be setting up its own company to build a next generation high-speed broadband network for the country.

Part of me rejoices that the Telstra monopoly has suffered a major kick in the groin. Part of me (heck, all of me) always rejoices when monopolies get a well-deserved kick in the groin (When will you double over in agony, Microsoft?).

But I don't know if this was a well thought-out plan or an oh-forget-it act of exasperated desperation. Has Communications minister Stephen Conroy finally done something right after committing gaffe after gaffe? Others are confused too.

Time will tell whether this gargantuan initiative will turn out to be a waste of money or a wise spend that will keep the economy ticking during the global recession and will also provide a much-needed force-multiplier for the smart, networked nation that will arise after the recession.

But I guess the bottomline is that the privatisation of Telstra was a mistake in the first place. If you must privatise a government-owned monopoly, at least break it up into a dozen pieces so there's no more monopoly. If there's anything worse than a government-owned monopoly, it's a privately-owned monopoly. Will history repeat itself with this new incarnation of Telstra?

Education is Cool

Socialism (beyond the point where it rights historical wrongs) is the great leveller - downwards.

In contrast, I've always believed that education is the great leveller - upwards. One of the saving features of Soviet-era socialism was that it educated its citizens.

Hats off to Michelle Obama for putting this into words. Mrs Obama visited a girls school in London this week and said this:

If you want to know the reason why I am standing here, it's because of education. I never cut class. I loved getting A's, I liked being smart. ... I thought being smart is cooler than anything in the world.

Judging by the news reports, the girls at the multicultural school were inspired by that, especially in the days before their GSC Exams.

Smart behaviour should be seen as cool. Self-destructive behaviour should be seen as something for losers. These are lessons that teenagers need to be taught. As a teenager, I too tended to glorify negative behaviour to an extent, although I thankfully didn't go overboard and ruin my life.

It's great to have positive examples like the Obamas in this world. Youngsters need to see for themselves that working hard to build up one's education and communication skills is something to be admired and emulated, because honest success is not nerdy but cool.

Excerpt from Wodehouse's "The Small Bachelor"

It'll soon become obvious why I'm posting this excerpt from P.G. Wodehouse's novel.

"Ouch!" cried Mrs Waddington.

She had not intended to express any verbal comment on the incident, for those who creep at night through other people's kitchens must be silent and wary: but the sudden agony was so keen that she could not refrain from comment. And to her horror she found that her cry had been heard. There came through the darkness a curious noise like the drawing of a cork, and then somebody spoke.

'Who are you?' said an unpleasant, guttural voice.

Mrs Waddington stopped, paralysed. She would not, in the circumstances, have heard with any real pleasure the most musical of speech: but a soft, sympathetic utterance would undoubtedly have afflicted her with a shade less of anguish and alarm. This voice was the voice of one without human pity: a grating, malevolent voice; a voice that set Mrs Waddington thinking quiveringly in headlines:

SOCIETY LEADER FOUND SLAIN IN KITCHEN

'Who are you?'

BODY DISMEMBERED BENEATH SINK

'Who are you?'

SEVERED HEAD LEADS TRACKERS TO DEATH-SPOT

'Who are you?'

Mrs Waddington gulped.

'I am Mrs Sigsbee H. Waddington,' she faltered. And it would have amazed Sigsbee H., had he heard her, to discover that it was possible for her to speak with such a winning meekness.

'Who are you?'

'Mrs Sigsbee H. Waddington, of East Seventy-Ninth Street and Hempstead, Long Island. I must apologize for the apparent strangeness of my conduct in...'

'Who are you?'

Annoyance began to compete with Mrs Waddington's terror. Deaf persons had always irritated her, for like so many women of an impatient and masterful turn of mind, she was of the opinion that they could hear perfectly well if they took the trouble. She raised her voice and answered with a certain stiffness.

'I have already informed you that I am Mrs Sigsbee H. Waddington...'

'Have a nut,' said the voice, changing the subject.

Mrs Waddington's teeth came together in a sharp click. All the other emotions which had been afflicting her passed abruptly away, to be succeeded by a cold fury. Few things are more mortifying to a proud woman than the discovery that she had been wasting her time being respectful to a parrot: and only her inability to locate the bird in the surrounding blackness prevented a rather unpleasant brawl. Had she been able to come to grips with it, Mrs Waddington at that moment would undoubtedly have done the parrot no good whatsoever.

It's interesting that I came upon this passage just days after the news item about the parrot that saved a little girl's life. Knowing what we now know about the intelligence of parrots, perhaps Wodehouse's avian character was having a good laugh all the time.

Truth is stranger than fiction.

The Intelligence of Parrots

When I was at school, we were taught that parrots had no real intelligence. One could not carry on an intelligent conversation with a parrot because the birds only repeated sounds without understanding their meaning.

However, later research seems to show that parrots are in fact highly intelligent creatures that understand what they're saying.

The recent case where a parrot repeatedly cried, "Mama, baby!" to draw the attention of a babysitter to a choking child is just the latest evidence that parrots do not just "parrot" what they have heard. They probably understand the meaning of the words, too.

It takes significant intelligence to recognise that a child is in distress, to understand that an adult human must be alerted to save the child, and a particular combination of words is the most appropriate to describe the situation. Also, it speaks highly of the emotional quality of empathy, to want to save a fellow living being. It makes us pause to think about what it means to be human.