Trust in Banks

Remains in very bad shape, with banks being the least trusted institutions in Ukraine: " Ukrainians less trust the banks (trust/distrust balance - 52%), followed by the courts (-45%), political parties (-38%), police (-37%), prosecutors (-36% ), the Verkhovna Rada of Ukraine (-24%), the Constitutional Court of Ukraine (-19%), public organizations (-9%)."

http://www.ukrinform.ua/eng/order/?id=190944

off-side and reforms

The recent string of wrong decisions of the referees during the world cup clearly has a negative effect on the matches and on the attractiveness of football in general - such mistakes could easily be avoided.

This is a bit like Ukraine - everybody is aware that there are lots of wrong/outdated regulations in Ukraine, many of these could easily be solved - but it doesn't happen. So the FIFA regulators and the Ukrainian regulators are not unlike each other

Statistics and the Oil Spill

This is a very cute article trying to quantify the BP oil spill

http://www.kyivpost.com/news/world/detail/70462/

EURO 2012

A cautionary tail for those arguing for more infrastructure investments for Euro 2012:

http://online.wsj.com/article/SB10001424052748704025304575284841380683082.html?mod=WSJ_hp_editorsPicks_1

On The Importance of Fathers

In many countries, Fathers’ day is much less widely celebrated than Mother’s day. In Ukraine, the situation seems even worse: very few people celebrate Fathers’ day at all.
Some might infer from this that this probably means that fathers are not that important, especially in Ukraine. Or at least, that fathers are less important than mothers. Luckily for men, however, there is plenty of scientific evidence that suggests that fathers do matter for many aspects of their children’s future.
Fathers matter for the future earnings of their children, with children of high earning fathers typically earning more and children from low earning fathers earning less. One study for the United States found for example, that 40% of the sons, born to fathers who are among the 20% lowest earners, are among the 20% lowest earners themselves. Fathers also matter for the future occupation of their children, with many children following their father’s occupational choice. A US study found that in the US about 30% of sons and 20% of daughters work in the same occupations as their father.
Non-job related aspects of childrens’ life are also heavily influenced by their father. Fathers who have studied longer tend to have children who study longer –a recent paper finds that for Ukraine, one extra year of education of the parents increases the expected number of years of education of the child by 0.4 years. Internationally, the children of fathers with more education score better on standardized math tests.
Studies using German data have further found that children of smoking fathers are 2.8 more likely to smoke themselves, that more trusting fathers are more likely to have more trusting children and that risk-loving fathers are more likely to have risk loving children.
Of course, it’s not only the father that matters – the above studies typically also confirm the importance of the mothers though there is no general consensus in the literature about whom matters most. Hence, for the moment, one has to conclude that fathers seem to be as important as mothers. Importantly, however, most of the studies do have evidence supporting that the parental effects they find are not just genetic, but that also the example that fathers and mothers set matters.
All the above evidence suggests that fathers have lots of reasons to celebrate and to be celebrated on June 20. However, it also allocates responsibility to them: if they behave better, it’s more likely their children will behave better. But if they behave bad, their children are likely to suffer.
(written on June 14th, and hopefully forthcoming in Investgazeta of next week)

Introducing Eileen Coupé to the World

This morning, Eileen Coupé was born at 9.05! Yes, from today I'm a father!

She weighs 3.5 kg, and measures 52 cm. Her current full time job is making her parents happy, her hobbies are sleeping and making diapers dirty.

Azarov's Optimism

The Kyiv Post writes today 'Azarov is worried about fact that 50% of population does not trust government'

http://www.kyivpost.com/news/nation/detail/69597/

In fact, the data I have seen (based on GFK's polls) show that between September 2007 and September 2009 not more than 11% of people said they trust government...So the lack of trust in government is much worse than Azarov seems to realize.

Football and Financial Products

A cute article on football and some financial instruments related to football

http://www.risk.net/structured-products/news/1650712/world-cup-infects-structured-products

Modeling Football

The World Cup is a good excuse, not only for academics, but also for investment bankers, to predict who will win the World Cup

for example

UBS: http://www.theglobeandmail.com/globe-investor/investment-ideas/features/market-lab/an-financial-take-on-predicting-the-world-cup/article1601348/

JP Morgan: http://www.news.com.au/business/jp-morgan-statistical-analysis-predicts-world-cup-winner/story-e6frfm1i-1225868977453

Morgan Stanley: http://www.world-cup-betting.me.uk/goldman-sachs-model-names-brazil-as-world-cup-2010-winners.html


also see for the full reports
http://kaggle.com/worldcup2010?viewtype=custom

The big question is: are they better at foreseeing football than foreseeing the economy?

How to Create Panic

This morning's Amcham Interfax Morning News email includes the following news (see below) - by indicating there is a problem, but not indicating which company is in trouble, he discredits the whole market - in this situation , it's better to investigate the situation before saying anything...


"FINANCIAL SERVICES MARKET REGULATOR'S HEAD CLAIMS LARGEST INSURER FACES PROBLEMS

Kyiv, June 7 (Interfax-Ukraine) - Head of the State Commission for regulating financial services markets Vasyl Volha says he is concerned about the situation at one of the country's largest insurance companies.
"What I am afraid of is that, according to the information I get, one of the most popular and largest companies could face the same situation as Veksel [a joint-stock insurance company that stockholders have decided to liquidate]," he said at a meeting with insurance companies' directors organized by the League of the Insurance Organizations of Ukraine.

According to Volha, he plans to gather information about the company, and if his concerns are borne out, he will be obliged to report in two weeks to the president and prime minister of Ukraine about the situation that may occur on the insurance market.
He also said that his commission had started inspecting large insurance companies and the first returns of the inspection show that "the situation at the companies is not easy and may lead to the fact that the companies' individual clients may suffer."

"

Bad Reputation

Ukraine scores bad in terms reputation: 32nd out of 34 in this 2009 reputation ranking

http://www.reputationinstitute.com/events/RI_Press_Release_CountryRep2009_30sep2009.pdf

VAT Bonds

The VAT bonds are there!

http://www.ukrinform.ua/eng/order/?id=188959

A 5% interest rate is better than nothing, but still ridiculously low. Given this low rate, the government now has an incentive to stop reimbursing VAT altogether - it's the cheapest way to finance any deficit. As research has shown, if you put a small fine on some bad behavior, people will do more of the bad behavior as they then feel that paying the small fine makes the bad behavior ok.

Quality of Education

This blog explains the low quality of teachers in China

http://voices.washingtonpost.com/ezra-klein/2010/05/human_capital_and_china.html

the point made in this blog is as valid for Ukraine