Archive for May, 2009

In times troglodytic, folks had to barter to get what they wanted. This form of economy was more efficient than doing it all yourself, but it was still considerably constrained by the coincidence of wants. That problem was solved by using money as a medium of exchange, which made transactions far more efficient by freeing them from the need to match up wants. Money also loosed exchange from the bonds of time: those with extra money today lend to those with too little, with interest as the compensation until the principal is repaid.

This last component came to mind often in several meetings I attended last week. Rwandan coffee output is lower this season partly because growers are having difficulty securing loans. The growers incur large costs at the start of the season, but can only afford to pay the costs at the end of the season when they’ve sold their harvest. Bridge financing would solve this mismatch between expense and revenue, but because the exchange in this case must be limited in time, the coffee grows unsold.

Read Full Post »

Things are changing every moment here in Kigali: internet access, internet speed, where I live, where my office is, etc. I can’t even bother to tweet at the moment, let alone write a proper blogpost. Plenty of material though. I think I could write a pretty compelling economics paper about the intra-city bus system here.

With any luck, things will be more settled in a few weeks and I’ll have ready and relatively rapid internet service. Until then, blogging will be like everything else: spotty.

Read Full Post »

Good blogs are rarely drippy diaries nor are they dry op-eds, having more personality than the latter without the self-indulgence of the former. When I started this blog, I thought it would be more diary-like than it’s turned out to be,  but like those of many mice, my best laid scheme gang agley. Though I’m a pretty whimsical fellow in person, the subject matter tends to be staid, even if I usually write with the intent of eliciting at least a smile or two in any given post.  I’m satisfied with the overall mix, but a downside has been the exclusion of personal detail, and I’m now at a point where I need to catch up readers to what’s been happening with me since coming back to the US in late July, so here’s the past 9 months in a paragraph:

When I returned from Germany, my plan was to renew old contacts in Columbia and work for about a year while I took placement tests and sent off applications to various graduate programs.  Soon enough I took a job working at USC (the original one, for all you thinking westerly) doing a few different research projects for the business school. At the same time, I was looking at grad schools and studying for the tests, but lacking the peace that usually accompanies my big decisions. Needing guidance, I went and saw a former professor/mentor/thesis advisor, and after talking with him I was redirected away from graduate school and back towards foreign soil.  I was then referred to another professor who led classes to Africa, and after one conversation with him acquired several business cards for companies in Rwanda. As luck would have it, the first company I contacted expressed interest, and though the details of the arrangement have changed over the intervening months (this all began last November), at 6 AM tomorrow morning I’ll be catching a flight to Kigali to begin a six month initial stint.

What exactly I’ll be doing is not a question I can answer easily; one of my Ivy League educated friends called it “new business development” when I explained it to him, but my more prosaic description is “helping a few expat entrepreneurs build profitable companies.” One of my first projects at any rate will be developing the plans for a coffee-themed eco-tourism lodge on Lake Muhazi.

Here’s a map of Rwanda, and here’s my favorite map of Africa. Here are the contents of Africa according to the rest of the world.

My future abode is said to have internet, and Kigali is anyway a well-connected place, so blogging should continue apace once I’m settled.  If the personality of this blog changes as a result, it should be for the better–but much as I’d like to engage in more self-indulgent speculation on the matter, I’ve got bags to pack!

Read Full Post »


If I’m not mistaken, this has been the longest unplanned break in TRZ posts since blogstart–it has not been for want of material. Here were some the topics I considered and dropped at various stages of development.

  • A primer on monetary policy as it relates to my finding $1500 in various forms of cash in my parents’ bedroom.
  • The sleeping habits of OECD countries,
  • The eating habits of OECD countries,
  • The power of culture in the efficacy of national institutions.,
  • Other stuff I’ve forgotten,
  • And one more thing I’ll write about tomorrow (or the next day, or…)

Once I get that last post written, you’ll understand why I’ve been focused on other things despite having ample free time.

Read Full Post »

Today Felix Salmon highlighted some Chuck Norris facts pertaining to his experience in banking:

# Little-known Chuck Norris Fact: Chuck Norris does not mark to market. The market marks to Chuck.

# More: Chuck Norris does not go bankrupt. Chuck Norris ruptures banks.

# Source of hedge fund survivorship bias?: Funds that pay Chuck Norris 2 and 20 survive; others don’t.

# Private equity: Chuck Norris does not believe in leverage. Chuck Norris believes in crowbars.

# Investment banking: No-one defers Chuck Norris’s compensation.

# Capital structure: No-one subordinates Chuck Norris. All his equity is preferred.

# If Chuck Norris devised the bank stress tests, not even the Treasury Department would survive.

Felix then invited readers to submit their own in the comments, so I gave it a shot and came up with these:

  • Chuck Norris’ tears would solve all the banks’ liquidity problems. Too bad he’s never cried. Ever.
  • Chuck Norris is too big to fail.
  • Some think deposit insurance is what prevents a run on the bank. It’s not–it’s the fear that Chuck Norris is lurking in the vault.
  • Basel rules stipulate that if Chuck Norris is within 100 feet of a bank, he can be counted as Tier 1 capital.
  • The risk-free rate is not computed using US treasuries, but the length of time it takes Chuck Norris to complete a roundhouse.
  • Chuck Norris doesn’t target interest rates, he pummels them into submission.
  • Whenever Chuck Norris visits a country, yields on that government’s debt fall 150 basis points.
  • Only Chuck Norris can issue secured debt. The rest is at his mercy.
  • Beta is just a measure of Chuck Norris’ mood.

They are admittedly geeky, but they were funny enough to get a shout-out by Felix. My 15-minute joy was tempered, however, when a banking friend forwarded along this article from September 2007:

A famous series of jokes uses the actor Chuck Norris, martial artist and star of “Walker, Texas Ranger,” as a paragon of masculinity and omnipotence. ..

Similar thinking can be applied to the current state of financial markets. Here, then, is the world of money recast in Chuck Norris terms.

Chuck Norris doesn’t target inflation. He roundhouse-kicks it until it begs for mercy.


The tears of Chuck Norris would supply enough liquidity to solve the credit crisis. Too bad he never cries.

I’m pretty sure I never saw this article before, so I plead innocent to plagiarism. The real sting comes from realizing that my humor wasn’t quite as original as I thought it was. Of further humiliation is that the tears I’m crying now are good for nothing. *Sniff*.

Read Full Post »