Steven Pinker on bad and good writing

The psychologist and word-usage expert has produced a new style guide with cognitive sensibilities called "The Sense of Style."

Steven Pinker, a Harvard University professor, in the book 'The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century' according to The Economist steers:

writers towards a “classic style”, in which the writer clearly points out things that may have escaped the reader’s notice, but which anyone can understand with patient guidance. Classic style uses concrete words in straightforward sentences easily parsed by man’s limited brain. Bad writing, exemplified by academese, bureaucratese and bewildering gadget manuals, does the opposite. Sentences are long, filled with abstract words, and make sense only to those who already know most of the information. (Mr Pinker admits that he struggles daily with papers in his own academic field.)

Why, psychologically, is bad writing bad? Working memory, which holds syntactic constructions in mind until they are complete, is easily overwhelmed. Mr Pinker uses memorable (and often funny) examples to show exactly what kind of sentences tax the mind. For example, violating expectations, such as upsetting chronological order, makes the reader do extra work. (When financial journalists say that an equity fell to $76 from $110, they invite confusion.) And the much-derided passive voice can make a passage flow more smoothly by preserving the ideal order of old information, then new.

Chris Soghoian's wake-up call on internet privacy

Digital Editor of The Economist Tom Standage interviews Christopher Soghoian, Principal Technologist and Senior Policy Analyst, Speech, Privacy and Technology Project, American Civil Liberties Union (ACLU).

China's territorial claims in Asia

The Economist says one reason China’s spectacular rise sometimes alarms its neighbours is that it is not a status quo power. From its inland, western borders to its eastern and southern seaboard, it claims territory it does not control.

In the west, China’s border dispute with India is more than a minor cartographic tiff. China claims an area of India that is three times the size of Switzerland, the state of Arunachal Pradesh.

Further west, China occupies Indian claimed territory next to Ladakh in Kashmir, an area called the Aksai Chin. China humiliated India in a brief, bloody war over the dispute in 1962. Since 1988, the two countries have put the dispute on the backburner and got on with developing commercial ties, despite occasional flare-ups.

More immediately dangerous is the stand-off between China and Japan over disputed islands in the East China Sea, known as the Senkakus in Japan and Diaoyu in Chinese.

Why London is the most expensive city to build in

Oddly-shaped buildings and unexploded bombs are two reasons it costs more to build in London than any other city.

Putin, Ukraine and the airliner crash

FT leader writer James Blitz and East Europe editor Neil Buckley discuss what Russian president Vladimir Putin and western leaders will do next after a Malaysian civilian airliner was shot down in eastern Ukraine with the loss of 298 lives.

Google's self-drive car

Google says: "Fully autonomous driving has always been the goal of our project, because we think this could improve road safety and help lots of people who can't drive.

We're now developing prototypes of vehicles that have been designed from the ground up to drive themselves—just push a button and they'll take you where you want to go! We'll use these vehicles to test our software and learn what it will really take to bring this technology into the world."

 Google hopes that by this time next year, 100 of its driverless two-seaters will be on public roads, following extensive testing. The cars would not be for sale and instead would be provided to select operators for further tweaking and have limitations such as a 40-kilometre-per-hour top speed.

United States prison rate has quadrupled since 1960s

Source: The Brookings Institution’s Hamilton Project.

*Rates are from 2013 for all countries with the exception of Greece, Israel, the Netherlands, Sweden, Switzerland and the United States, which are from 2012; and Canada, which is from 2011–12. The rate for Britain is a weighted average of England and Wales, Northern Ireland and Scotland.

The New York Times says that despite a recent dip, the incarceration rate in the United States has almost quadrupled since the 1960s. The US now has far more people in prison as a share of its population than any other developed country and partly reflects the failed 'War on Drugs' which has criminalised a generation of young men.

California student gunman left chilling video before rampage

Before he set out on a rampage through the California seaside college town of Isla Vista on May 23, that ended with seven dead and 13 injured, suspected gunman Elliot Rodger (22) calmly laid out his plans online and said he was a virgin as girls had rejected him.

The video was posted on Youtube but was later removed.

The Wall Street Journal reports that investigators said Rodger was found dead in his vehicle with three handguns—two Sig Sauer 226 and a Glock 34, all purchased legally in California and registered to the suspect.

The Journal said Elliot Rodger, a Rodger family spokesman said Saturday, had a difficult time making friends. He had been diagnosed as a "high functioning Asperger's child" earlier in life, and was being treated by many mental health professionals, said Alan Shifman, a lawyer for Peter Rodger, the father of Elliot Rodger. Peter Rodger is a Hollywood director who worked as an assistant director on "The Hunger Games."

A Deutsche Bank chief warns traders on being ‘boastful, indiscreet and vulgar’

Colin Fan, co-head of Deutsche Bank’s investment bank, has warned traders in an internal video that being ‘boastful, indiscreet and vulgar’ will have ‘serious consequences’. Andrew Hill, FT management editor, tells Daniel Garrahan why he’s a fan of Mr Fan.

Anglo Irish Bank, accounting fraud, and targeting domestic firms

Days after Ireland shocked Europe on September 30, 2008, with a blanket guarantee of Ireland's bank deposits and debts, Patrick Neary, the financial regulator, was interviewed on Irish television but he may as well have been regulator of banking in Freedonia:

The trial of former executives of Anglo Irish Bank on the issue of the bank supporting the share price through an illegal scheme, wouldn't have occurred but for the collapse of the Irish banking system.

In contrast with a case like Guinness plc in the UK in the 1980s, where company funds were used to boost the share price during a takeover battle, here we had the Central Bank of Ireland in the information loop on the efforts to prevent a rerun of the Northern Rock bank collapse situation when it became known in September 2007 that Seán Quinn, a then billionaire, had built up in the period 2006/07 a secret CFD (contracts for difference) holding of more than a quarter of the shares in Anglo Irish Bank.

When Seán FitzPatrick and David Drumm, Anglo’s chairman and chief executive, discovered in September 2007, that Quinn had then a 24% stake in Anglo through contracts for difference (CFDs), they told the bank's board and Drumm was instructed to inform Patrick Neary, the financial regulator.

Neary told the trial that at a meeting that month, he didn't ask Drumm what was Quinn's stake nor did Drumm tell him. In early 2008 when Seán Quinn visited Neary's office at the Central Bank, Neary told the trial that he didn’t think it would be “fair or appropriate” to have asked about the stake that Quinn had in the bank.

Neary had also told the trial that after meeting with Drumm, a colleague had given him a document explaining CFDs.

This could evoke the Marx Brothers' 'Duck Soup' (1933) but the 'Nightmare on Dame Street' drama was set in a Trappist monastery.

One of the most striking illustrations of the dysfunctional nature of the office of the financial regulator, was that for most of 2008 Patrick Neary was unaware of the discovery by his staff, that Irish Nationwide Building Society had provided loans of up to €122 million to Anglo Irish Bank's Seán Fitzpatrick, over an eight-year period, enabling him to move his director loans at Anglo Irish, off the bank’s books at each September 30th year end, to avoid disclosing them publicly. What amount would have triggered some office gossip or a whisper in a pub?

Ruadhán Mac Cormaic of The Irish Times has reported that in two days in the witness box, Neary said “I don’t recall” 30 times, “I don’t know” 23 times, “I can’t recall” 12 times, “I can’t/don’t/cannot remember” 12 times, “That’s a complete blank to me” once, and “I’ve absolutely no recollection” four times.

Neary had also told the trial that Con Horan, his prudential director, had not informed him of a first attempt to unwind Quinn's CFDs in March 2008.

Besides the three defendants, how many others were involved in devising the support scheme even though they were working on the basis of legal advice that the Maple 10 arrangement was in compliance with the Companies Act 1963?

Finfacts: Last rites read for Anglo Irish Bank - - the damned builders' bank

1. So while Seán FitzPatrick should have been expected to know more than his other non-executive colleagues on the board about the risks of this transaction, at least two of them were chiefs of listed companies while another was the former chief of a Big 4 accounting firm.

The jury made the right call in acquitting FitzPatrick.

2. Willie McAteer and Pat Whelan, were found guilty of implementing the illegal scheme by a Dublin court on Friday.

The scheme was devised by many more and apart from the financial regulator, the senior management of the Central Bank and some officials in the Department of Finance were likely aware of it.

Anglo had also been advised by one of Dublin's biggest law firms that the arrangement was compliant with the Companies Act - while that does not make what's illegal legal, coupled with the tacit or overt imprimatur of the Central Bank, in the ordinary course of business, all that is usually sufficient for business executives who are  not legal specialists.

I used to have a copy of the Companies Act 1963 and while there are for example clear cases where companies engage in fraudulent trading when a company is close to collapse, there are others in hindsight where the directors should have called in a receiver earlier but last ditch attempts to rescue the firm that drained the more funds, were fruitless.

I have worked in a company of several hundred people that had some good contracts but it had cash flow problems and was awaiting an outside investment to stave off collapse.

Staff soon realise that there are serious problems and people with fear in their eyes anxiously search for some reassurance when there maybe none.

It must have been a similar atmosphere for non-executive staff within the bank.

Making a judgement on the share support scheme and the overall management of the bank during the property bubble, are different issues.

3. It's well to remember that there is no new dawn as compliance with company and tax laws will continue to be a much bigger risk area for Irish-owned firms and directors than for foreign-owned multinationals.

The Big 4 accounting firms are active in selling tax avoidance/ evasion shelters not only in the corporate tax area but in also cutting VAT for example [pdf].

Usually when abuse schemes are discovered by revenue authorities, a deal can be agreed.

In the past decade, there was a rare case in the US where a criminal prosecution was launched and KPMG LLP admitted to "criminal wrongdoing" and individual staff were targeted.

The US Department of Justice said in a statement: “In the largest criminal tax case ever filed, KPMG has admitted that it engaged in a fraud that generated at least $11 billion dollars in phony tax losses … cost the United States at least $2.5 billion dollars in evaded taxes.… KPMG also admitted that its personnel took specific deliberate steps to conceal the existence of the shelters from the IRS."

SEE also: OECD BEPS Project: Ireland should embrace corporate tax reform

Cost of breakfast rising due to drought, disease and rising demand

The Financial Times reports that drought, disease and rising demand have led to prices of eight key breakfast commodities rising on average almost 25% this year, fuelling consumer fears of food inflation.

Coffee has soared more than 70% because of unseasonably dry weather in Brazil, while US pigs have been hit by a virus epidemic, leading to a more than 40% rally in Chicago pork prices.

The Wall Street Journal says that in the U.S., much of the rise in the food cost comes from higher meat and dairy prices, due in part to tight cattle supplies after years of drought in states such as Texas and California and rising milk demand from fast-growing Asian countries. But prices also are higher for fruits, vegetables, sugar and beverages, according to government data. In futures markets, coffee prices have soared so far this year more than 70%, hogs are up 42% on disease concerns and cocoa has climbed 12% on rising demand, particularly from emerging markets.

Drought in Brazil, the world's largest producer of coffee, sugar and oranges, has increased coffee prices, while dry weather in Southeast Asia has boosted prices for cooking oils such as palm oil.

Ireland's Kenny could become Europe's Mr Charmer

In the space of a few weeks, Stephen Collins, political editor of The Irish Times, in an economic commentary, swings from 'Bailout myth is a cocktail of half-truths and downright evasions - Wide acceptance of an unreliable narrative about what happened means we may never get to grips with the actual facts' to 'Kenny’s track record could land him a key EU position.'

It is however interesting that Enda Kenny (taoiseach/ prime minister since 2011) would be a suitable candidate for the largely ceremonial role of European Council president rather than the presidency of the Commission which has a key role in EU policy making - - one that could be well filled by Christine Lagarde of the IMF.

Kenny's optimism has been a positive thing, in particular when compared with his immediate predecessor but it's nonsense to claim he has had a big impact on investment inflows -- most of which come from the existing investment base (do not be misled by American Chamber of Commerce in Ireland spin on the issue.)

Besides, the charm did not get far when it was claimed that there had been an agreement at the June 2012 EU summit that Ireland would get a refund of the State's €64bn spending on rescuing Irish banks - - the curious thing about the claim is that it's still unknown which leader if any had made such a promise.  

It's easy to forget that Bertie Ahern (taoiseach/ prime minister 1997-2008) lauded by journalists for his 'common touch' once radiated optimism, but what he shared with Kenny was a lack of interest in the boring but crucial issue of reforming failed systems of governance.

At the MacGill Summer School in July 2009, Enda Kenny, then leader of the Opposition, asked why do we have a budgetary system in place that is unfit to run a corner-shop, let alone a nation of 4m people?

In July 2013, the IMF said on Irish government accounting, that there is no uniform set of accounting rules and procedures applying to government departments, extra-budgetary funds, semi-state bodies, local governments, and public corporations. "This makes consolidating government-wide financial information and promoting system-wide improvements in financial reporting practices very costly and time consuming."

The bailout terms were met but in terms of preparing for a world of different economic challenges, has there been change remotely comparable with what was done in Sweden and Finland in the aftermath of their crises in the early 1990s?

Wouldn't it be a shock if we had a society where workers have equal rights whether in the public or private sectors, including similar pension entitlements (the majority of private sector workers do not even have an occupational pension)?

Leo Tolstoy wrote in 'War and Peace' of the Battle of Borodino in 1812:

"it was not Napoleon who directed the course of the battle, for none of his orders were executed and during the battle he did not know what was going on before him... Napoleon fulfilled his office as representative of authority as well as, and even better than, at other battles. He did nothing harmful to the progress of the battle; he inclined to the most reasonable opinions, he made no confusion, did not contradict himself, did not get frightened or run away from the field of battle, but with his great tact and military experience carried out his role of appearing to command, calmly and with dignity."

However, a weakened Russian Army was allowed to escape and regroup.

Rather than Kenny's charm offensive, the vacuous 'Medium-Term Economic Strategy 2014-2020' that was published last December is a better pointer to the ultimate judgement on his leadership.

Finfacts: Irish Corporate Tax 2014: How official spin and distortion works - in short-term

Finfacts: Reality Check: Merkel did not agree to refund Ireland €64bn bank rescue cost

Facebook's purchase of WhatsApp

Click on image to enlarge

WhatsApp is an excellent facility, which took advantage of the surging market for smartphones -- basically adding mobility to the desktop instant messenger systems that had been available for years.

Facebook is more likely to boost usage of WhatsApp rather than vice-versa.

Facebook to acquire 55-employee WhatsApp for $19bn in cash and stock

In 2011, Microsoft paid $8.5bn for Skype - - 32 times operating profit  --  and last year with a claimed 300m users, it was estimated that it accounted for one-third of world telephone traffic. Impressive? In 2010, it was reported that 6% of users pay.

What value is Skye to Microsoft now or Google Voice to Google?

The focus on user growth is reminiscent of the 'land grab' hype of the dot-com bubble but why should Twitter be expected to have the same usage growth rate as Facebook - - apart from ridiculous market valuations -- as they mainly operate in different online market segments?

The critical issue for the big name online services is ARPU (average revenue per user) per annum. 

Facebook's average revenue per user (ARPU) worldwide accelerated to +39% at $2.14 in the fourth quarter of 2013, and ARPU in the U.S. was up 48% at $6.03.

The key challenge for Facebook is that Google with a similar user base of over a billion, can get $30 per user per annum from search advertising.

In Asia, Facebook's ARPU was $0.95 in Q4.

I was in China last week, where the online sector is doing very well.

Twitter and Facebook are blocked while Google's search is available from Hong Kong but it's a hassle to use as it's not clear what sites are blocked before clicking.

Nomura of Japan estimates that China's WeChat’s average revenue per user is $7, compared to WhatsApp’s average revenue of $1.

Late last week Japanese online retailer Rakuten announced a deal to buy Viber for $900m for 105m users.

Chinese online services are the only ones that can rival the American online leaders - - while the latter try to avoid paying corporate taxes in most of their overseas markets.

So in Asia, the most populous region, there are not easy pickings for the US giants.

Electricity fraud in Malta

Euro Topics reports that it emerged last week that employees of a power company had manipulated around ten percent of all electricity meters in Malta to the benefit of consumers.

The extent of the fraud puts the entire country in a bad light, the liberal-conservative daily The Malta Independent believes:

The one thing that beggars belief in the smart meter tampering scandal is that more people are suspected of rigging the system in Malta, than in the whole of the United States in one year. ... But what is it? Is it the shady side of our Mediterranean character, or what? Is corruption so institutionalised that it is in our blood? Maybe it is something that has gone back years and years, to times when the only way to actually get anything done was to grease someone's palm."

Iona Institute / Lolek Ltd Ireland and its funding

SEE Finfacts article: Irish journalists get cash payouts over 'homophobic' defamation claim

Lolek Ltd t/a Iona Institute had a cash balance of €186,000 at end of 2007 rising to €231,000 at end 2010, €278,000 in 2011 and €325,000 at end 2012.

It's a significant balance for a tiny 'charity' but no information is available on the sources of the annual revenue of over €200,000.

Would some of the cash be sourced from the US? Should we know?

This is relevant as in the US, not only would lobby groups against gay rights not be able to sue over being termed 'homophobic' because of saner defamation laws, it would be a badge of honour to some of them.  

The Family Research Council, which gets a lot of attention from Republican Party presidential aspirants, published a pamphlet on gay marriage, citing a case where a Missouri man wanted to marry a horse.

Then there's Legatus, an organisation for wealthy Catholic businessmen, which is suing the US government over Obama's Affordable Care Act, as it's apparently an attack on Catholics.   

This is a 2011 article on the Legatus site from the president of the National Catholic Bioethics Center ( https://www.ncbcenter.org/ ), that in modern times uses archaic terminology, which in the past was used to stigmatise gay people.

There are many reasons why people suffer from SSA (same sex attraction) disorder. Some “discover” this tendency within them. Others grow into it through pursuits of pleasure or experimentation. Some use it to punish themselves or others. Whether the disorder has some deep, unknown roots over which one has virtually no control, or whether it’s a developed disorder resulting from bad choices, it leaves an individual disposed toward activities and a lifestyle that are dangerous — physically, emotionally and spiritually.

Fortunately there is hope for those who suffer from the disorder. The National Association for Research and Therapy of Homosexuality reports that significant numbers of homosexual persons have undergone treatment and had their sexual drives properly ordered. These findings are a beacon of hope to those suffering from SSA, as well as for their family and friends who desire their happiness and good health."

In 1973, the American Psychiatric Association declassified homosexuality as a mental disorder.

Since 1975, the American Psychological Association "has called on psychologists to take the lead in removing the stigma of mental illness that has long been associated with lesbian, gay and bisexual orientations."

Given the post-independence system of censorship and British-inspired defamation laws that protected political, religious and business leaders from scrutiny and accountability over past decades, it's an odd modern society where journalists would consider legal action over this issue.

Let us applaud dissenters as societies have only progressed when the smug and often intolerant status quo was challenged.

In 1863, the year of emancipation, the Irish rioted in New York against an unfair Union Army draft lottery. Democratic Party officials had warned of an influx of freed black slaves from the South and on July 13 an Irish mob attacked a black orphanage in the city that housed more than 200 children. The mob burned the building after looting it and then began attacking and lynching blacks.

A century later, Martin Luther King could say that "the Negro...finds himself an exile in his own land."

Wonder what it was like to be both black and gay in the US a half century ago?

Thomas Jefferson, a cruel slave master, had penned the line in the 1776 Declaration of Independence: "We hold these truths to be self-evident, that all men are created equal..."

At his second inaugural, Barack Obama linked equality and fights for civil rights for women, blacks and gays together, spanning 121 years.

We, the people, declare today that the most evident of truths – that all of us are created equal – is the star that guides us still; just as it guided our forebears through Seneca Falls, and Selma, and Stonewall..."

American writer James Baldwin (1924-1987) left racist White America for France in the late 1940's and returned in 1957 as the civil rights movement was gaining strength. He took an active part in it but he was a victim of another prejudice that did not have colour boundaries.

Baldwin was both black and gay and he was rejected as a speaker at the renowned civil rights march in Washington D.C. in 1963 when Martin Luther King delivered his 'I have a dream' speech.

Irish academics, pension top-ups and poor private pensions coverage

This is a response to  a post by Hugh Sheehy on an Irish Economy thread. The system appears to have some gremlins at work.

This is the issue that has been raised: Irish academics get lavish pension top-ups as private pensions struggle

@ Hugh Sheehy

Hugh,

Thanks for the link.

I had written about this issue of top-ups in 2010 when the National Pensions Reserve Fund had taken responsibility for the 'old' university pensions that had a deficit of more than €600m, and it's not surprising that some of the supporting cast on the insider stage would try and drown out dissent.

This is a graphic illustration of the Irish caste system.

While profitable overseas companies and the small number of indigenous ones were shutting down defined benefit (guaranteed payout) systems; the finance minister was levying private pension funds; the social protection minister did not know what to do with  a report from PwC, the Big 4 accounting firm, that showed fees ate up an average of 17% of a fund over a typical fund's time horizon (Enda Kenny had promised Shane Ross that he would have the issue investigated when the levy was introduced in 2011 -- Kenny is not Bill Clinton and with 3 public pensions, even it had later crossed his mind, it would have been hard to convince the typical SME worker that he feel's their pain) -- over 500 academics in the bankrupt country were getting pension top-ups.

The basis for these top-ups is dodgy and the Comptroller & Auditor General said in 2011 that the issue required investigation.

The property clause in the Constitution is usually worth a try.

However, the right of 'legitimate de facto expectation' as outlined by a university official to the C&AG a years ago is similar to the 'droit du seigneur' in that only people within an elite could claim it.

Why worry about inequality when it's found mostly in places with funny names?

It's official state policy to keep employer social security low and thus the low level of employee pensions in the private sector.

Note the contrast with the racket organised by the insiders and when Brian Cowen at the outset of the Croke Park process proposed that the link with a current incumbent's  earnings be replaced by consumer prices, the unions said it would be a dealbreaker.

Why are bankers so selfish?

Forty-four sachets of sugar in beaker of Coca-Cola!

Calls are growing for high sugar drinks to be taxed in the same way as cigarettes to curb rising obesity. Does the drinks industry's resistance echo that of the tobacco industry denial in the 1960s? BBC Newsnight's Jeremy Paxman spoke to James Quincey, president of Coca Cola Europe.

FT editor Lionel Barber previews Davos 2014

Financial Times editor Lionel Barber previews the annual World Economic Forum in Davos, Switzerland. He tells economics editor Chris Giles that growing business confidence, Middle East instability, inequality and the impact of technology will top the agenda:

'Wolf of Wall Street' prosecutor lambasts the movie

Joel Cohen on how the new movie compares to the real prosecution of fraudster Jordan Belfort.

The Indian mother-in-law and what women have never done?

Veena Venugopal, author of "The mother-in-law: The other woman in your marriage," explains to The Economist why Indian women are increasingly treading on each other's toes.

An elderly woman in north India, laughing ruefully, recalls how, after her rural wedding, it took “three days to work out which man in the new family was my husband”. Even today, some honeymooning couples take along the saas. A woman in Delhi says that, when her Bengali mother-in-law visits, she insists on sleeping in the marital bed with her son; the wife budges over, or decamps to a sofa... Last year over 8,200 women were murdered over the non-payment of a dowry (which has been legally abolished), over half of them in three northern states: Bihar, Uttar Pradesh and Madhya Pradesh. In May this year India’s Supreme Court warned of “an emotional numbness in society,” whereby daughters-in-law are kept as near slaves or attacked out of “insatiable greed”. Brothers, cousins, even the husbands themselves, sometimes carry out the attacks. But the mother-in-law is often held responsible.]

Indian mothers-in-law: Curse of the mummyji

Mary Barra's appointment to lead General Motors is a milestone for women everywhere, but here are five jobs that a woman has never held.

A changed New Year outlook for Ireland

The improved Irish economic outlook for 2014 is a welcome change from grim past New Year forecasts.

SEE Ireland: GDP or GNP? Which is the better measure of economic performance?

On the use of GDP or GNP, since companies such as Accenture, the US management consultants, began switching their headquarters to Ireland in 2009, the GNP metric has become a less reliable metric. This tax-avoidance move makes these firms become Irish companies.

John FitzGerald of the ESRI estimated that in 2012 [pdf], these companies accounted for €7.4bn in retained profits or 5.5% of GNP. Incremental undistributed earnings boosted GNP growth by 1%. These earnings also pollute the balance of payments. 

This year the big entrant is Eaton, a US power manufacturer, with retained earnings of €4bn. So the boost could be over 4%.

As for the drugs patent cliff, which has cut industrial production and goods exports, it will resume in 2005 with several expirations.

Eli Lilly is taking a big hit this month with Cymbalta, its anti-depression drug, which accounts for about a quarter of revenues.

Amgen's white blood cell booster Neupogen, which had sales to Sept 2013 of $1.1bn also lost its patent protection in December.

The biotech drugs are more difficult to clone but Amgen, the leading firm, made a defensive move last year with the acquisition of a Turkish drugs firm for $700m.

The problem for the drugs industry is that sales of some of the recent launches have disappointed because the benefits compared with existing products have not convinced players such as insurers and governments.

Pfizer's Lipitor peaked at $13bn in 2006 and sales in the period 1996-2012 amounted to $141bn.

As for biotech, most firms never make a profit and the industry posted its first profit in 40 years in 2008, only because of the performance of a small number of firms including Amgen.

Irish Economic Crash 2008: Bubble and bust home-made

Irish Times columnist Fintan O'Toole's claim  in this film that German banks provided funding for the property bubble, has been shown to be wrong. Throughout the 2000s, the interbank market in the UK was the predominant creditor to the Irish bank-ing system.

******************

There were several factors that contributed to the Irish economic crash of 2008 and the overreaction of ratings agencies and bond investors (as claimed by Swiss-based economists) came after the main event. Whatever other issues that can be invoked such as low euro interest rates, the simple fact is that the bubble and inevitable bust were home-made.

The 3-year international bailout ended on Sunday and DPFOC, a Cork-based online marketing firm, has produced an infographic on the bailout (place cursor over image and maximise).

Enda Kenny, taoiseach, addressed the nation on Sunday night and it's a case of some work done and a lot to do: Kenny and Ireland's dead cat bounce

In a time of international crisis, small economies that are dependent on foreign investors to fund most of their debt sales are particularly vulnerable as the potential buyers may have limited knowledge about such economies.

In 2007 when the US subprime crisis and credit crunch signalled that the global financial sector was in trouble, Ireland and Finland, two small economies that had experienced economic crises over the previous two decades, were in sharply different positions in respect of vulnerability to an international shock.

Ireland's net public debt was 10.5% of GDP compared with Finland's minus -72.5%; household debt was at 210% of gross disposable income compared with Finland's 110%.

Both countries sharply cut public debt in the 1990s with the benefit of rising exports.

For a number of years, Ireland with less than 1% of Europe's population was getting over a quarter of US greenfield investment; there was a huge increase in labour participation with the number of dependants that every 100 workers had to support cut from 230 to 115.

FDI (foreign direct investment) peaked as a job creator in 2000 and during the 2001-2007 property bubble fuelled by tax cuts and bizarrely a raft of property tax breaks, credit growth, low euro interest rates and a large inflow of migrants from Eastern Europe, there was NO net jobs growth in the internationally tradebale sectors.

In 2007, DKM Economic Consultants estimated that Irish construction output represented 22.6% of GNP and 19% of GDP, when measured in gross output terms. The construction to GDP ratio was the second highest proportion (after Spain) and ranged from less than 8% in Sweden to over 21% in Spain and with an average ratio of around 12% in Western Europe and less than 11% in the UK.

By mid 2008, almost two-thirds of outstanding domestic Irish private bank credit of €416bn was property-related.

Icelandic and Irish banks had the highest loan-to-deposit ratios in Europe; loan to deposit ratio rose very sharply, from 136% in January 2003 to a peak of more than 193% in October 2008. PermanentTSB peaked at 277%.

One of the factors that increased market jitters was the uncertainty about the extent of bank losses.

In February 2009, exactly 2 years after the subprime crisis broke out in the US, the Irish unit of Pricewaterhouse Coopers (PwC), the biggest of the Big 4 accounting firms, delivered a report on Anglo Irish Bank to the minister of finance.

It said:

These annual impairment charges were €2.3bn and €3.0bn respectively per annum under the two scenarios for the years ended 30 September 2009 and 2010. The two PwC impairment loss scenarios exceeded Anglo’s worst case impairment loss scenario.”

Jones Lang LaSalle valued a sample of 160 properties held as security in relation to the top 20 land & development exposures on Anglo’s books.

Anglo Irish Bank reported a loss of €12.7bn for the 15 months to the end of December 2009 - the largest loss in Irish corporate history - after charging €15bn to cover bad debts.

The main Irish story was that a massive bubble was followed by a massive bust. Ratings agencies and bond investors were among the extras in the cast of villains.

The Irish banks were not only exposed to the local property market, they enabled Irish investors to become the second biggest investors in commercial property in Europe after the Germans.

About 80% of Anglo Irish Bank’s €68bn loan book was secured against Irish and British property. Bank of Ireland’s loan book in 2008 at €135bn, had 71% or €95bn secured against property. AIB’s loan book was at €150bn, and 60% was secured against property.

Irish investment of €13.9bn was put into European property deals in 2007.  In contrast, the Irish business sector did not even get a total of €200m in venture capital investment.

VOX: Whatever happened to Ireland? - Prof Morgan Kelly 2010

Nelson Mandela remembered through a collection of photographs

Nelson Mandela who passed away December 5th 2013 is remembered through a collection of photographs in this video created with The Economist. The images were captured by South African photographer Jürgen Schadeberg who first met Nelson Mandela in December 1951. They formed a lifelong friendship and over the next 60 years.

Europe living in world increasingly dominated by Asia

Craig Willy, an EU affairs writer and a journalist with the German Press Agency (DPA), writes in a blog post that Economic development in China and other Asian countries has an impact on the role of European states in global affairs.

He argues that with the rise of Asian economies, the world is increasingly moving away from the model of free trade championed by Europe and other states in the West.

Unless Europe becomes a more cohesive actor which is capable of convincing other nations to respect Western legal and commercial principles, it will find itself forced to adapt to the East Asian development model.

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