Is there a future for futures?

 

C

Futures markets in oil create more, not less, volatility

Another piece of news in today’s Financial Times designed to restore our faith in the efficiency of financial markets.  It turns out that last Tuesday’s big spike in oil was caused by one man, Steve Perkins, a  “rogue trader” purchasing a huge number of Brent Oil futures contracts in the middle of the night.  When other traders staring at their screens saw the rising prices, they jumped in, bidding oil up to the highest price of the year.  In one hour, Perkins all by himself traded as much  oil as Saudi Arabia produces in a day.

When introductory finance textbooks explain the function of futures markets, they use the homely analogy of a farmer, fearing a drop in wheat prices and a bread maker fearing a rise.  To lock in their tight margins, the farmer and the bread maker get together, agree on a price for future delivery. That way each can proceed to harvest and bake, without worrying that conditions out of their control will make all their hard work unprofitable.  What could be wiser, what could be more efficient, what could be farther from the truth of modern futures markets.

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Power’s world: Obama should give more than he takes

 

Obama and Medvedev's summit is an opportunity for bold action

Obama and Medvedev's summit is an opportunity for bold action

The first summit between President Barack Obama and Dmitri Medvedev is only days away and so far there has only been perfunctory mention of this in the media. Odd, not to say irresponsible.

If played right this could be the most important summit since presidents Mikhail Gorbachev and George Bush, having torn down the Iron Curtain, decided that they had enough confidence in the other side to introduce unilateral nuclear arms cuts, a valuable ancillary to what they formally agreed.

 In the opinion of Georgi  Arbatov, Gorbachev’s (and before that Brezhnev’s) foreign affairs advisor, the time is overdue for more unilateral cuts. “Being honest”, he told me two summers’ ago, “we in Russia are not right in our approach. We have so many weapons we could decrease the numbers unilaterally and set an example. We could dismantle our rockets, take others off alert, and the Americans would be obliged to follow us.”  

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A human face to the death penalty

Don Cabana by Claire Phillips

Don Cabana: former warden at the Mississippi State Penitentiary

According to Dostoyevsky, we can judge a society on how it treats its prisoners. If so, a new exhibition by the artist Claire Phillips, which opened at the Oxo Gallery on London’s Southbank last night, provides a bleak assessment of the condition of the most advanced nation in the world.

The aim of the project, supported by the charity Reprieve, is unambiguous: it wants to show us how crude, inhumane and unjust the ongoing use of the dealth penalty in America is. Yet the artist, who travelled to Miami, Atlanta and Mississippi, chose a wide range of subjects whose relationship with death row vary enormously. There are, as to be expected, current inmates (some who have already been executed) and their family members, as well as former inmates exonerated after long periods of incarceration. But there’s also an executioner responsible for four executions; the foreperson of a jury that convicted and sentenced to death a man who was later proved innocent; and a congressman who voted to reinstate the death penalty in the 1970s and then subsequently pioneered the use of the lethal injection method. This lends the experience an unusual texture and nuance.

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Big Brother 2010—Brown v Cameron?

Nestor Kirchner's refusal to go on reality TV meant he didn't get the thumbs-up from the Argentinian electorate

Nestor Kirchner's reluctance to go on reality TV meant he didn't get the thumbs-up from the Argentinian electorate

As our television screens are swamped with this year’s deluge of vacuous, talentless, fame-hungry nobodies (ie Big Brother contestants), take comfort in the thought that reality TV does not, as yet, decide our national elections. For this, writes William Gill in a free to read web exclusive for Prospect, is the bizarre state of affairs in Argentina,  where the public elected not to give former president Nestor Kirchner another term in Congress thanks to his refusal to appear on reality TV show Gran Cunado (Big Brother-in-law).

The show, which is part of popular comedy programme Showtime, featured doppelgangers of the main candidates for the Congress elections, with the public invited to eject whoever they didn’t want.  The trouble for Kirchner started when the real politicians were invited onto the show. All initially refused, but one—Francisco de Narvaez, whose popularity soared as a result and who then when on to beat Kirchner in the real election.

Should Kirchner, who is notoriously humorless, have set aside his pride and given into the demands of a reality TV-obsessed public? And how long will it before Cameron and Brown are duking it out in the Big Brother house to secure our votes? As ever, leave your thoughts below.

Prospect recommends: the Manchester International Festival

Kraftwerk play the Manchester International Festival this month

Kraftwerk play the Manchester International Festival this month

The programme at the second Manchester International Festival is so remarkable—Steve Reich, Kraftwerk, Zaha Hadid, and Marina Abramovic on just the first two days—that director Alex Poots has surely made a pact with the devil. The festival has gathered its all-star cast by commissioning only new work (a rarity in this world of artistic regurgitation) and by targeting artists with the power to lend cultural capital to a city still undergoing regeneration. No less than “20 world premieres” are billed, including Neil Bartlett’s theatrical critique of our bingo-loving nation, Everybody Loves A Winner, and conspiracy filmmaker Adam Curtis’s “haunted house walkthrough” which captures the rise of American power during the 1960s to music by Damon Albarn. With so much new work in one place, critical casualties are likely, but risk-taking is central to MIF’s appeal.

The stakes are particularly high for singer-songwriter Rufus Wainwright, whose first opera Prima Donna debuts here after being commissioned in 2006 and then rejected by the Metropolitan Opera. Partly inspired by an archive interview with Maria Callas, it relates an ageing opera singer’s struggle with new love and fading talent. Wainwright has written his score for a large orchestra (provided by Opera North) and penned the libretto in French, promising big romantic themes and “good old tunes.” A self-confessed opera buff, he has spent years on the project, and one can only applaud his ambition and insouciance over the prospect of a flop (tickets are still available). Yet this spirit of experimentation, shared by many of the artists here, will almost certainly rank Manchester among Britain’s most intrepid cultural events.

The Manchester International Festival. Various venues, 2nd-19th July,  tel: 0161 238 7300, www.mif.co.uk. Prospect will be at the opening of the festival and will be reporting on some of the highlights here at First Drafts.

Our July podcast: racism, the BNP and western philosophy

griffin

Nick Griffin: part of the western philosophical tradition?

In this month’s Prospect podcast (downloadable, and available on the right of this page) Nigel Warburton considers the links between racism, philosophy and the history of prejudice that underlies much of the western philosophical tradition. As he points out, the belief that racism is  usually the result of stupidity is itself a form of prejudice.  Some the world’s great thinkers have themselves been guilty of surprising bigotry. 

Acknowledging that prejudice can co-exist with intelligence is important in other ways. It could be argued that the BNP’s recent electoral success is partly the result of complacency on the part of mainstream political parties: far-right groups were assumed to be too politically incompetent to ever pose a genuine political threat. The British government’s failure to take Islamist radicalism seriously in the 1990s stemmed from a similar complacency: militant groups were simply not seen as a genuine threat. 

Perhaps the only way to confront prejudice effectively is to acknowledge that it sometimes goes hand in hand with intelligence, cunning and even philosophy.

As ever, let us know your  thoughts below-

Moderately famous person dies

 

Steven Wells RIP

Steven Wells RIP

As you may or may not have noticed, a Famous Person Has Died. Which leads, of course, to any number of questions for media-type folks. What priority should we give to the news of the Famous Person’s death? How long should we carry on, before the bulletins become, in effect, Famous Person: Still Dead? At what point might it be OK to mention the, y’know, icky stuff about the Famous Person? At what point do we unleash Uri Geller? Oh yeah, and what do we do about the economy and Iran and all that boring stuff?

Moreover, if a Famous Person Has Died, should that mean that other, slightly less famous people who die around the same time should get the same treatment. I know, you’re thinking of Farrah Fawcett. But I’m thinking of Steven Wells.

Steven Wells, aka Swells, Susan Williams and a few things less pleasant, was probably only truly Famous (that’s Jackson Famous, Farrah Famous) to those of us born between about 1960 and 1975, with a fondness for noisy music in which attitude trumped ability every time. He was a poet, novelist, film-maker, sports writer and political activist, but his Famousness derives from his long association with the New Musical Express, in which he lauded Napalm Death and Kylie Minogue, while pouring scorn on Morrissey, Radiohead and Belle & Sebastian (you know, the kind of acts that NME readers really like). To read his views was like voluntarily submitting oneself for re-education.

But his true genius was expressed not in his reviews or interviews, glorious as they could be, but on those magnificent occasions (once every six weeks or so, I reckon, although my memory could be playing silly buggers) when he was allowed to edit the NME letters page, known since forever was a toddler as ANGST. That was when the caps lock was taped down; that was when the adjectives and expletives and exclamation marks exploded around the page; that was when perfectly sensible letters from people who bought the paper and were entitled to their views were eviscerated in public for liking, I dunno, Aztec Camera or something. It was childish, it was cruel, and for a few thousand of us, it was the funniest thing we’d read until the next time.

But not funny enough it seems. Steven Wells died last week, and as the news trickled in, occasionally poking its nose out from behind Farrah’s hair and Jackson’s… well, Jackson’s nose, I suppose, it turned out that he really wasn’t even famous enough for a Wikipedia page.

This has now been rectified; but the Wikiprefect (or whatever they dub themselves) had a point that the people howling against the decision couldn’t be arsed to find citations to support the inclusion. And this does raise an issue, specifically about journalists, but also about anyone who achieved notability in his or her field before about 2000. The pinnacle of Swells’s achievement lies in his belligerent marshalling of those letters pages. And that’s what they were; pages, which survive in attics and garages and people’s memories. They were physical, tactile things where layout and artwork and smudgy ink came together with the readers’ earnestness and Swells’s nihilism in a dialectic of verbal violence that made them bloody near essential. Because of the physical size of the old-style NME, scanning them and reproducing them on a computer screen would necessarily diminish their impact. Yes, you could cite the references from your old, mouldy copies, but the mice ate them some time in the last century. Doesn’t mean they weren’t great. Swells could twist the conventions of Web 2.0 to his own Satanic purposes with coruscating wit, but his glory days were analogue. As were many hacks who have been tagged for deletion on the basis of notability and lack of citations.

So here’s the question: in Wikiworld, and the culture that shares its values, is it notability that’s the issue, or Googlability?

Don’t keep sex workers out of the room

A campaign slogan in Berkeley, California

A campaign slogan in Berkeley, California

Writing in the Guardian today, Cath Elliot trumpets the unanimously warm reception for a new attempt to lock men up for buying sex, in the form of a campaign called Demand Change. She’s proud of her own contribution to the debate, she says, though the hyperlink she gives for that contribution simply takes us to a remark about the International Union of Sex Workers which hovers between the blatantly inaccurate and the slanderous.

I’m unable to assess her contribution to the debate, because I was turned away from the Demand Change launch meeting at which Cath spoke last Wednesday. I got through parliamentary security with a bottle of wine and a cheese knife (!) but couldn’t get past the bouncers who were turning away anyone who is interested in actually debating the future of prostitution in this country. Also turned away: colleagues from the World Bank, staff from the offices of MPs supportive of rules that will make sex work safer, and (needless to say) anyone who actually chooses to sell sex for a living—the people the organisers don’t believe exist.

“As everyone in the room agreed, it’s time to bring an end to the selling of women and girls: who could possibly disagree with that?” concludes Ms Elliot. The organisers didn’t exactly need to police the crowd to get everyone to agree on that point. I don’t know anyone who doesn’t believe that selling people is wrong. Not anyone outside the Premier League, anyway. Selling sex, on the hand, is not wrong, in the eyes of the hundreds of thousands of women and men who choose it as a profession. Oh but wait, they don’t exist….

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Why we must stop fearing inflation

Greenspan: one of the rentier class

Greenspan: one of the rentier class

According to Alan Greenspan in Friday’s Financial Times, the biggest threat to the world economy is a resurgence of inflation. That’s right. While the rest of us worry about ever-increasing unemployment, shrinking global GDP, declining trade, collapsing demand, Greenspan tells us the real nightmare is none of these, but instead the potential prospect of inflation—even though this year it will probably be under 2 per cent.

This should not surprise us. Throughout his career, it has been the interests of the financial sector that have most concerned the former Fed Chairman. And it is the rentier class that suffers most from inflation.

Indeed, it is a sign of their dominance that the rest of us, for whom inflation can actually be beneficial, have been conditioned to fear it. If you lend money, like banks and financiers, inflation means you are being paid in depreciated cash. But if you borrow money, as do most households and entrepreneurs, inflation is a subsidy that stimulates investment and demand. Inflation penalises lenders and benefits borrowers—and most of us, by the way, are net borrowers.

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Wimbledon: are we still on for a Federer-Murray final?

Murray: yet to be tested

Murray: yet to be tested

I am writing this late on Saturday, after Andy Murray’s third-round match against Viktor Troiki of Serbia. (It was almost embarrassingly easy for Murray.) The first week of the tournament is over. Are things heading inexorably towards the Federer-Murray final that seems to be the predetermined climax of Wimbledon ‘09? My answer would be probably. But I am not as confident as many commentators seem to be.

First of all, I am not completely convinced by Murray so far. In the second round against Ernests Gulbis, and now again against Troiki, he has dispatched mediocre opponents with enormous, almost frightening efficiency. (He played much less authoritatively in his first match, against Robert Kendrick.) But he hasn’t played anyone especially good, and I wonder if it will be the same story when he comes up against someone who can really throw some shots at him. Murray’s essentially defensive, aggression-absorbing game works brilliantly against opponents who don’t have the weapons to get the ball past him; he simply rallies with them, teasingly, until they start to crack. But will it work against a Djokovic, a Verdasco or even a Hewitt on top form? Murray didn’t face any especially tough opponents at Queen’s either, which again makes his serene progress through that tournament look more significant than it is. I just have a feeling that Murray could be surprised, and be found wanting, if he suddenly comes up against a top player, or a not quite top player playing out of his skin. In those situations the shortcomings of his game—his tendency to be too passive, and to suddenly drift off—could become apparent, and I wonder if he’ll have the skill and mental strength to adapt. Read the rest of this entry »

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Nigel Warburton, senior lecturer in philosophy at The Open University, and our resident philosopher considers the role of racism in politics and philosophy. How prejudiced were the great philosophers of history?.

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