Cecil the Lion, shame…

It seems to have become a pattern now for the internet to periodically explode with fresh hatred for the professional hunting crowd.

It’s absurd. And, to be honest, it’s shameful.

While it’s definitely bad that Cecil the lion was lured out of a Game Reserve to be shot with a bow and arrow, tracked for 40 hours, and then beheaded and skinned for trophy mounting (I’m very sure that the professional hunters would term that “unprofessional” hunting) – the only real bad part is the stealing of a Game Reserve lion. That is poor form.

As for the hunting part…the best conservationists are professional hunters. I wrote about this the time before the last time that the internet exploded with hunting rage, and then re-shared it that last time. Here’s the link: Let What’s Her Name Hunt Lions.

And here is the updated important section:

The Empirical Evidence

  • In 1964, South Africa had a national herd of wild game consisting of around 575,000 wild animals.
  • The safari hunting and game lodge industry began to develop at around that time.
  • Today, the wildlife population is close to 19 million (Update: up to 24 million since I wrote that first post).
  • White rhino, black wildebeest and bontebok were brought back from the brink of extinction by breeding programs on private game farms.
  • Also: the South African hunting industry contributes R8 billion to GDP each year (Update: R10 billion to GDP in 2014).

And here is the direct comparison:

  • Kenya banned all hunting in 1977 (sport-hunting, hunting for meat, everything).
  • It has lost between 60% and 70% of its large mammals since (Update: it’s now 85%).
  • Here is a paper by Mike Norton-Griffiths (an economic environmental consultant who presents a lot of papers at conferences) called “How Many Wildebeest Do You Need?” where he explains the causal link between these two pieces of evidence.
  • Here’s a 2007 article from the Economist.
  • And here is an awkward video clip from earlier this year.

These are not blind emotions – these are facts. If you want to save the lions, you have to allow professional hunting.

And successful petitions to ban hunting will do completely the opposite.

As for all the horror and disgust…

Perhaps this makes me a bad person, but I feel very little for Cecil.

What I’m trying to say is: I try to be consistent. In my daily life, I am mostly indifferent to external suffering. When I see beggars on street corners, I roll up my windows and lock the car doors. When I see homeless people, I cross to the other side of the street. I also don’t stop to pick up hitchhikers.

As I see it, there’s just so much suffering in the world that you need to get selective with your moments of empathy. Otherwise, you get depressed, which is not helpful at all. We’re mostly built for small moments of direct empathic intervention with the people in the immediate vicinity – that is where the impact is greatest; and therefore, where it is most needed and most useful.

So suddenly flicking on a sentiment switch because an animal was killed seems like a waste of empathy energy. Humans are more important than animals – so if you’re going to rant, rather be outraged by the Syrian conflict, where millions have been displaced and where no one is helping, than get all preachy about a single lion in a Zimbabwean game reserve.

But perhaps that’s just me.

In the interim, another infographic (also a bit preachy, but facts…):

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.

The Secret Powers of Time

If you have the time…you should spend ten minutes with this video clip (here’s the link for the email subscribers).

It’s loosely based on a study by a social psychologist, Robert Levine, called “The Pace Of Life in 31 Countries” – which was subsequently became the basis of a book, “A Geography of Time“.

Here’s the abstract of the study:

This study compared the pace of life in large cities from 31 countries around the world. Three indicators of pace of life were observed: average walking speed in downtown locations, the speed with which postal clerks completed a simple request (work speed), and the accuracy of public clocks. Overall, pace of life was fastest in Japan and the countries of Western Europe and was slowest in economically undeveloped countries. The pace was significantly faster in colder climates, economically productive countries, and in individualistic cultures.

To paraphrase: there was incredibly strong correlation between higher economic well-being and a faster pace of life.

Of course, there’s also a causality question that’s being thrown around:

  • Are countries less developed because the people that live there are more laid back? or
  • Are people less laid back because their economies are more developed?

It’s probably a mix of both.

But the idea of people existing in different personal time zones makes a lot of sense to me. It explains a great deal of my frustration in traffic. And in supermarket queues. And in banks. And at passport control. And through security checks. And…

So. Much. Sense.

Happy Wednesday.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.

More Chinese Stock Crashes

In case you missed it, China’s stock market took a massive dive yesterday:

Last 5 days Shanghai Composite

Although this would not be the first dive that it’s taken in the last month (if anything, it looks a bit tame by comparison):

Last month Shanghai Composite

And this wouldn’t be the first time that I’ve written about it either. If you missed, the post from three weeks ago was called “MEANWHILE, IN CHINA“.

Reasons that the Chinese Stock Market Crash is so interesting

  1. Well obviously, the Chinese government decided to intervene to stop the crash. Multiple interventions. Which is this weird socialist-communist-capitalist twist.
  2. But more importantly, the Chinese stock market also has a far larger proportion of individual retail investors than most. According to Reuters, 85% of Chinese stock trades come from individual investors. Compared to, like, ±30% on US stock markets (from this dodgy reference – but it’s a reference regardless).
  3. And that number of retail investors has grown. Rapidly.

  4. But those investors…have some awkward education levels. Here:

  5. I mean – not to sound snooty – but two thirds of those new investor households didn’t finish high school.
  6. And worse, those awkwardly-educated retail investors are trading with borrowed money:

    Thanks this website

    Thanks this website

  7. Here’s an estimate from the Bank of America of the size of formal borrowing/margin/leverage:

    Thanks BofA

    Thanks BofA

  8. And what you need to remember is: that 3.7 trillion yuan margin subtotal is not “investment”. That margin is just a deposit on the investment. If you assume that retail investors are depositing 50% of the value of their investment in margin (based on those “common leverage” figures in the table), that means that implies that 7.5 trillion yuan of the market cap is being funded by margin-financing.
  9. That accounts for 34% of the value of tradeable shares.
  10. And that’s not including all the available leverage channels.

So there is this toxic combination of first-time, fairly-uneducated, individual retail investors who are trading the bulk of market on borrowed money.

And if you want to see that unfolding, look no further than the trading volumes.

If you look below, it looks like there were no trading volumes prior to June. Almost as though there is a glitch in the system.


Last year Shanghai Composite pre crash volumes


But there is no glitch. There is just no scale. If you cast your eyes at the trading volume on 29 May 2015 (above), on the far right of the top line, you’ll see trading volumes of some 61 billion.

Ten days later:Last year Shanghai Composite post crash volumes

That volume is up to about 6 quadrillion.

That – that is what you call a market panic.

Curiously, it’s not all bad news. As I said in that earlier post, economists have mixed feelings about what the market crash will mean for the Chinese economy. Their main points:

  1. The rapid increase in stock prices has coincided with a period of really weak growth.
  2. It seems that people are delaying their normal spending in order to pour money into the stock market.
  3. Only now that they’ve realised that too much stock investment can be bad for one’s health, they might resume normal consumption patterns.
  4. And as for the lost money, the Chinese government has committed to financing it.
  5. Perhaps will all that trade surplus that they have floating around?

Fun times.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.

Debtris and Billion Dollar O’Grams

Two things caught my eye over the weekend. The first is this short little video clip called “Debtris” from the folks at InformationIsBeautiful.net (here’s the link for the email subscribers). And you know that I’m a fan of perspective.

Speaking of perspective, here is the second thing (also from InformationIsBeautiful.net):

the billion dollar o gram

Ain’t it beautiful though?

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.

Greek (e)Co(no)mics

Last night, the second round of legislation was passed by the Greek Parliament in order to allow a bailout deal to be negotiated. Which sounds like a record on repeat.

Anyway, to backtrack slightly, I wrote about graphic novels back in January. And in particular, there was some serious praise written in the direction of Michael Goodwin and his awesome book, “Economix: How and Why Our Economy Works (and Doesn’t Work), in Words and Pictures“. In it, there were a few pages devoted to the Greek Debt Crisis.

On the economixcomix.com blog, they’ve now posted those pages. You can go and read them in full (the link), but here are some screen caps of the more pertinent panels:

The German/French Bailout of German/French Banks

The Bailout of German/French Banks

Not that borrowers shouldn't suffer some pain...but still

Not that borrowers shouldn’t suffer some pain…but still

And I particularly like this:

The Austerity-Debt Cycle

The Austerity-Debt Cycle

I thought it was worth sharing. And seriously, the book is worth ordering.

Particularly as: if lots of people order it, then I might get to eventually read a sequel.

Here’s something else that came up on the google search:

Thanks Pinterest

Thanks Pinterest

Hilarious. And Happy Thursday.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.

Zimbabwe’s new-old willy-nilly labour ruling

On Friday last week, the justices at the Supreme Court of Zimbabwe handed down a landmark labour ruling which basically said this:

  1. We’re taking you back to the common law interpretation of an employer-employee relationship.
  2. Under that common law understanding, the relationship is freely entered into by both parties, and therefore, both parties have the right to terminate that engagement by simply notifying the other that they would like to terminate the engagement.
  3. Also, there is more than one way to skin a cat terminate an employer-employee relationship. There is dismissal, there is retrenchment, and then there is the old-school method of simply saying “As of three month’s time, your services will no longer be required, here’s a letter, thank you.”

For those not familiar with Zimbabwean labour practices, one reason that this is a big deal is because everyone has been operating under the assumption that employers have only expensive options when it comes to reducing their wages-and-salaries line item:

  1. Dismissal for misconduct – which is a costly disciplinary-hearing and multiple-written-warning-issued-within-legislated-timelines affair, involving both labour union action and police intervention when the misconducting-himself employee seeks revenge by accusing other staff members and management of an array of criminal offences and abuses and “unauthorised salary deductions” that were made towards his medical aid coverage.
  2. Retrenchment – which is a costly labour consultation and justification process, involving both labour union action and police intervention when the being-retrenched employee seeks leverage by accusing other staff members and management of an array of criminal offences and abuses and “unauthorised salary deductions” that were made towards his medical aid coverage.

Now, apparently, there is a third option: “Just give notice of termination and let that be that.”

As an aside, following this case has meant that I have read the phrase “willy-nilly” more times than I would ever have expected. Here it is appearing in the formal ruling itself:

The applicants’ stance was simply that the respondent, the employer, cannot terminate their employment contracts on notice at law, but they can resign from employment willy nilly.

Here it is appearing in multiple news headlines and excerpts:

Judgement allows Zim workers to be sacked willy-nilly (Bulawayo24)

Public Service, Labour and Social Welfare Minister Prisca Mupfumira has said there is need to settle on corrective legal options to safeguard the workers from being sacked willy-nilly after the court ruling. (The Africa Report)

“Government needs to look at tightening the Act to make sure there is no willy-nilly termination of contracts.” (The Herald)

Getting back to the main point – as I see it, there isn’t actually a third option. This “ruling” is not setting a precedent – it’s about to be fictional.

Some observations:

  1. If you read the ruling itself, the main thrust seems to be that there is no Act of Parliament or Statutory Instrument to specifically prohibit termination by notice.
  2. So all that is needed to void this court ruling is a new Act of Parliament or a Statutory Instrument (or a Presidential Decree) to say that termination by notice is prohibited.
  3. If we’re placing bets, I’d expect that new Statutory Instrument to be promulgated by, oh, about Friday morning last week.
  4. Because the Zimbabwean legislature has historically been well cool with making new laws retroactive.
  5. And why not time travel.

It’s one of those “business risks” that you find on “Investing In Zimbabwe” brochures, right up there with “onerous indigenisation laws” and “weak property rights”. I mean, when what’s illegal has to be determined with reference to a future law that you don’t know about yet, but which will still hold you responsible for what you do today as though you had always known about that future law, then you’re breaking with the fabric of reality.

And that’s a risk.

Having said that, the outcome here does not really require the gift of prophecy. The Labour Unions have already made their appeals for a freshly crafted Presidential Decree. The Labour Minister is already talking about “corrective” legal options.

Employers need not get too excited.

In any event, even if there is no corrective legislation, it seems clear that the “termination by notice” option is only an option if it has not been prohibited by a collective bargaining agreement. So it won’t be long before the Trade Unions come back to the bargaining table to amend those agreements.

All in all: it will have been fun. But I wouldn’t suggest that any Zimbabwean employer be popping the champers just yet.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.