Although I call myself a capitalist (whatever that means) I would answer the above question with a clear: not really!

To understand that, it is necessary to have a quick refresher on what stock and bond markets do and what they don't do.

Promoted by afew

The last 5 months I have been on paternity leave, mostly spending time with my son and wife but also staying abreast (as best as possible) of current events. Viewing the world a little bit through the eyes of a child, one thing that struck me again and again was that the world is full of cheaters.

I really wonder where the morals/ethics of our society have gone to (at least regarding the "elites" currently in charge).

I have no time now for a full diary but I thought this was so interesting that I'd post it with just a few comments.

Siemens, a big German conglomerate has just applied for a banking licence. Before I quote an article or press release, just google Siemens and banking licence you will find a bunch of articles from all major German newspapers, reuters, etc...

Why is this so important? Well, beyond the "marketing" (e.g. "now we can offer our customers even more customized finance solutions blah, blah, blah), there are several commentaries in the press which got me thinking... More after the fold...

Everywhere nowadays you can hear about how important growth is. Be it economic growth of countries / regions or businesses.  Growing up as a capitalist-minded teenager I never really questioned the need for growth. Growth is good, just like bigger is better, etc... However, starting with my university years (business and economics) and further studies in this field, it has become quite clear why growth is good, at least for companies listed on stock exchanges. The simple answer is P = D / (r-g).  It dawned on me only a couple of years after learning this formula (and working at several stock-listed companies in different functions including sales and procurement) why this simple formula is so powerful. More after the fold...

front-paged by afew

Windturbines kill Babies

Now that I have your attention I can start with my diary. Of course, babies are not directly killed by wind turbines, well not directly at least, but maybe indirectly if you think around a couple of corners. These corners need first be mastered so what will now follow is a diary which might be a bit long and tiresome but I ask you to bear with me as I believe it might be very interesting and eyes-opening for some of you.

To start off, I will briefly describe the business cases behind the different phases of a wind farm (developing, constructing and operating). I will then describe a seemingly very good investment product of BigBank, to then expose the ugly reality of that nice product by doing a quick investment return calculations and will end with some open issues and thoughts as I still can't make up my mind if this product is really as evil as I describe here.
My goal here is not to say that a certain bank is doing something that I don't approve of (I haven't seen a product exactly like that, though some which are similar...) but to show how one has to always be very careful when investing and that banks will always try to profit exorbitantly by either ripping off unknowing investors (which is the case here) or rent seeking (e.g. High Frequency Trading and similar practices)

A side note, Jérôme has many excellent articles on the economics of wind power and electricity generation in general so I won't go into details here regarding the economics but rather recommend his wind power series found here. My focus here will be a bit different as you will see...

I welcome any feedback / corrections that you might have.