The Uberman polyphasic sleep cycle and its economic impact

I recently came across this really strange idea where people can adapt their body clock to be able to go through the day sleeping only 2-3 hours a day. Now I'm currently setting up my own business and "hourly rates" seem to be a recurring theme.
So what would be the result if everyone started living life according to the Uberman sleep pattern? Well we'd gain huge amounts of revenue in terms of worker output (if of course Uberman results in longer working hours...which I think it would) and we would become as a country (the UK I'm talking about here) able to compete with some of the bigger countries who have bigger workforces.
But all is not hunky dory. At the same time there would be major losses due to the rise in the number of accidents. Insurance companies would have a field day as a result as they would be bringing out new products to cater for the accidents caused by lack of sleep. Roads would become more dangerous, as would anywhere involving high concentration. This would mean a mounting amount of costs for industries and businesses.
But at the same time the money attracted to the UK due to its artificially "large" workforce, would be paid out in workers fees. These same workers would then buy stuff and this would stimulate the economy further. There would be an increase in demand and we would become an artificially larger consumer base as more of us have more time to spare to use all these other products we are buying. But this is all of course if the law can be enforced.
In fact, it would be very hard to "enforce" the new law of uberman sleep as people love sleeping, and they can easily secretly hide away and sleep. In that sense, uberman being adopted would have to be entirely voluntary. Otherwise the costs would be prohibitive.
As you can see, there is a very fine line in improving worker output through increased hours, and decreasing output due to deterioration of work. And remember, even in Uberman we would have to have free time proportional to what we have now. Otherwise there wouldn't be enough time to spend our money, and then the economy would really suffer.

Why I wrote a trading guide on how I made £300 with 30 minutes work

Hi,
[Note, this book is currently not available]
Before I start, let it be noted that that title is tongue in cheek. I did make £300, but it wasn't really half an hour. The actual research and analysis takes more like about three to five hours cumulatively over the month. But the £300 is in reference to a couple of trades I did over the course of a week in which I spent only half an hour or so researching. But I'll be perfectly honest, if you are going to be a good trader, you'll need to spend months and years honing your skills. The good side is, the basics can be learnt in a couple of hours.

Anyway, It's been a long time and I've been up to a lot of different things, not least setting up my first company and finishing off my second novel. The investment fund I manage has also been going well. There was a 8.56% rise in the last month. In this time I also managed to write up a book that I've been wanting to write up for a long, long time. People regularly ask me how to trade, how I make money by trading, and all these other questions that I get sick of giving the same answers to every time. Read on to see how you could get this book for free!

Now, my cousin is big in internet marketing and he has his own products that he sells and others that he recommends to his readers, and he said to me, "hey Ibrahim, why don't you write a book about how you make your money?"

So I gave it a bit of thought and I decided, yeah, why not, let's give it a go. I wrote up the book, then started researching my competition who were also hawking their products. Very soon I got seriously pissed off. These people are offering trading systems that never go wrong. They offer get-rich-quick schemes, they offer massive profits for little time. They offer trading systems where you don't need to know anything and just need to press a few buttons. What rubbish. And its not just one of them or a few of them, its the whole bloody bunch of them!

Well, I'm not getting into that sick and twisted world of selling abstract profits and pipe dreams. My "sales pitch" is just a couple of lines rather than a bunch of red writing telling me to buy now before I die and its too late. I'm leaving it up to the person to decide - as it should be. I don't particularly care about the profits to be perfectly honest - in fact I got talked out of giving it free by my cousin - but, as my cousin argued, something you pay for makes it more valuable and then people actually read it.

[Above is a share.com statement of my accounts for the previous month. As you can see I've turned £2787.56 into £3018. That's a profit of about 8.3%. So if you'd used my system with £100,000 you'd have made £8000, which is a well paid job. Or you could just use it like I do, and build up your 100k yourself. The point is I made profit using my system.]

So I'm setting a nominal price of £2.50 on my book and leave it up to you guys to decide. In fact, if you approach me and seem like a decent guy, I might even just trust you and give the book for free in return for £10 once you start turning a profit.

In the book I go through my trading system which I use on shares and have used on Forex, both successfully, and the places I get my info from, and how I analyse the market. Simple stuff really, but stuff that's taken me years of enthusiastic involvement in the markets and reading to compile. Stuff that will take you years of trading and making losses to compile.

Buy this book or not, just don't ask me again for trading advice because I'll just point you to this website!

The idiots guide to investing on the stockmarket

Hi,

The Guide:

1. The basic introduction

2. Choosing a stock

3. the tools of the trade

4. managing risk

The Economy in Turmoil - Sub-Prime Mortagages

A lot has happened over the last few months, the sub-prime mortgages fiasco, the banking crisis in Britain, housing prices dropping, the inevitable slowing down of the economy and the recent cuts in interest rates by the MPC (Monetary Policy Committee) and of course rising oil prices.

All of these can be seen to be linked. America, being the worlds biggest economy, affects the world economy by events taking place in its economy. So the Sub-prime mortgage lending that was going on, where basically the banks were giving loans to people with bad credit history, and being extremely lax about it, meant that suddenly, as a lot of loans went bad (people couldn't pay them back) you have major banking firms reporting losses on a gigantic scale, and we are talking billions of dollars. CitiGroup's chief executive and chairman resigned after it was announced that profits for the quarter were down 57%, and their $55 billion Sub-Prime mortgages portfolio has lost between $8-$11 billion dollars in value. And most other banks have been hit drastically too. Goldman Sachs forecast a £200 billions of loss to sub-prime mortgaging to the entire financial sector.

This, combined with the rise in oil-prices, (which are influenced by a number of factors such as time of year, middle-eastern situation, trading on the commodities market and the strength of the dollar) has meant consumer confidence has taken a severe beating. Just look at what happened at Northern Rock...if that wasn't a loss of confidence then what it? Now consumer confidence is very important to all countries but especially so to the US. This following statement is from the BBC and explains the impact of consumer confidence or lack of:

"Consumer spending accounts for two thirds of the US economy. Their lack of confidence and falling house prices have hit analysts' forecasts for economic growth. Capital Economics analyst Paul Ashworth said that the data "supports our view that US GDP will contract over the final three months of this year and that falling house prices will constrain consumption and cause GDP growth to average only 1.7% next year."

And of course the house prices are falling due to the repossession of homes that banks do when people default. This has meant lots of unsold houses which has led to a fall in prices. The following picture shows the situation in a badly struck Cleveland:

Now when America's economy sneezes, the rest of the world seems to get the cold. With the inter-bank trading become much more cautious after this crisis, meant that Northern Rock struggled to get the funds its business required, and hence the run on its branches. And of course the losses were also to some degree shared by the British financial sector.

The British economy has definitely slowed, which isn't a big deal, it was widely forecast to. But the fact it has happened at a time when inflation is slightly high, has meant that the normal way of combating it, by cutting the rates will just mean that inflation gets worse. This is the key reason why stimulating the economy will prove such as difficult task.

As Evan Davis the BBC Economics Editor pointed out that due to the drop in the value of the pound, which is due to the inflation, Britain's exports would become cheaper and drive the economy forward that way. However there are certain problems with that such as the currency value of other countries is cropping too, in fact this is the highest the pound has been to the dollar ever. But hey lets hope.

PS: In my Virtual Trader account (see my review on it in an earlier post) I went on after a long while, what with being in Egypt and things, and imagine my bemusement when I discovered that I had gone and bought shares in Northern Rock which were now gloriously in the red. Goes to show that a thorough look at the figures and an understanding of the business model is the key to buying the right shares. Something I'll keep in mind for next time.

My new trading book that takes you through money-making step-by-step:

http://economicsguide.blogspot.com/2010/05/why-i-wrote-trading-guide-to-sell-then.html

opportunity cost

Hi,

I went to Egypt for the summer to learn arabic in a two month intensive course. But what is that actually worth? We could look at the empirical value, it cost me about £800 to study, live, tour and explore Egypt. But then that doesn't really account for how much it was worth to me. Say for example, it is worth much more to me than the simple empirical sum, because I enjoy arabic and love exploring new countries much more than £800.

So how to attach a value to this trip then? let continue with the price route: So, the fact that I spent £800 on the trip tells us what? It tells us that this trip was more valuable to me than say spending it on a holiday in France...or buying a new Laptop...or the other millions of things I could do with £800. so thats it: the opportunities I foregoed to go to Egypt is the implicit cost of the trip to Egypt to me.

This opportunity cost can apply to a variety of different things such as time...the time i spent in Egypt is much more valuable to me there than anywhere else....because I spent it there.

My new trading book that takes you through money-making step-by-step:

http://economicsguide.blogspot.com/2010/05/why-i-wrote-trading-guide-to-sell-then.html

Making a living out of crumbs

Today I was reading a really good post by Evan Davis.
He raises the point that huge events such as the upcoming Glastonbury festival etc create huge cashflows, and when that starts happening, though the cash may be flowing in externally, and then flowing out, the community as a whole, gains incredibly, though most of the gains go elsewhere.

And this got me thinking about a lot of successful businesses kicking around today such as EBay, Amazon, Youtube, or even Google and countless others. What do all these have in common? The main part of their business depends on external sources inputting for their own gain, yet the "hoster" which in a sense is the website, get a cut of the profits - the crumbs. Only Amazon actually sells its own stuff, the rest of them just depend on other people. But the point is, that if a million people come to buy someone else's stuff on your site, chances are that a considerable amount buy from you too.

This leads onto a topic Adam Smith discusses in his Fait Principal , "The Wealth of Nations". Here he highlights that protectionist, isolationist policies are not good for the economic well being of a country. He used the example of China, who only had one port open to other nations to trade, and as a result the economy was stagnant.

An example of why this isn't successful: China is good at making toys. Switzerland is good at making chocolate. If the Chinese chocolate makers get advantages over the Swiss from the government, this would mean, due to the lesser number of chocolate makers in China, and due to the lesser quality, the Chinese masses get a raw deal. And vice versa for Swiss people with the toys. This means that no fresh money is coming into the countries and people are spending more than they need on everything.

However if both countries kept their borders open, everyone would be better off as to the price of toys and chocolate, and at the same time, foreign investment would start flowing into them, as people spot that these countries are sitting on quite a lucrative business, and as the money flows in, invariably some of it is going to leak down to the masses, the result of which is a better economy.

Amazon do this too, as, rather than being in direct competition with these other sellers, they just say "Hey, just sell at our place instead". This is a pretty good advertisement for capitalism and the free-market world economy, as really when we consider, the overall benefit to everyone, this is the way forward.

Its like the shops we see, all selling the same kind of stuff, all lined up together. Ever wondered why they are together, thinking that wouldn't it be better for each shop to be away from each other and not have competition? Wonder no more.

The Internet, is the perfect testing ground for the free-market economy - where there are no restrictions, tariffs etc. Where you have access to all the "prices" of different products at the same time, which would naturally stimulate sales of the lowest, and thus drive prices down.

Price doesn't have to refer to the actual price, it could be quality too. So a good quality information website would be placed higher than a worse one, and thus the quality is driven up as the one that's 2ND improves to be first and the first works hard to remain first etc. And the place where all this comparison takes place....the search engine - the ultimate crumb-earning cash-cow.

Heres an interesting and self-proving formula I came across recently:
MV=PT
where M=money in circulation of an economy
v=the velocity of the money circulation (how fast its exchanging hands)
p=the pricing in an economy
t=the number of transactions taking place.

this can be rearranged to find the recommended pricing:
P=MV/T
and this can also be used to show, if assuming that the V, velocity, and T, number of transactions, are constant, that inflation increases steadily with the money supply in the country.

This was proposed by John Stuart Mill who used Hume's work to base his formula. Another thing economics owes to the Great 18Th century Scottish Enlightenment.

Recycling in the Economy and Dickens

I was recently reading "Our Mutual Friend" by Charles Dickens. The story revolves around the will of a very rich man, who leaves all his money to his son - as long as he marries this random girl, otherwise all the money is going to be inherited by the old mans faithful servants. Where does this link in with Economics you may ask...

Well the old man actually made his money from recycling, by getting peoples rubbish, arranging it into piles and then sorting through it, with the dust being useful for some random people, with the wood being useful for some other random trade, and of course if any jewels etc are found, then they can be sold. A personification of economy really.

Now the interesting thing is that even in the mid 19Th century, 900,000 tonnes of dust was being produced by the households of London. Nowadays this figure would be far larger, with London's population having increased enormously, and consequently its waste has increased. So actually a vital part of the economy is how we manage our rubbish, and as always, with anything that is described as "vital", there is a lot of money to be made.

Nowadays we know that we definitely need to recycle, as the Earth's resources are finite. This makes this sector even more important. But what is also important is an economical usage of farmland, because when we look at some farmlands, the farmers can either opt for output of £50 per annum for eternity, or he could go for intensive farming techniques, and get about £400 per annum for the next 15 years.

Unfortunately the farmer will often opt for the short-term option. This is further exacerbated by the supposedly "low" interest earning loans given by the IMF and the World Bank. No loans given by these selfish organisations have been paid back yet, and the amount keeps rising too...due to the "reasonable" interest charged on the loans. This usage of Western interest-earning loans is in my opinion the new hidden imperialistic tool of oppression. The debtors are always going to be less well off than the creditors, and due to the very nature of the loans, will be subservient to the Western nations.

But the beautiful thing is, that there is no costs of invasion, maintenance, crushing of the odd rebellion etc to be incurred by the imperialists, rather its just a steady flow of cash flowing in, almost as tributes were being paid to the Caesar by smaller kingdoms who had to pay to be left free, during the Roman Empire.

In the meantime...check out my much lighter blog where I'm writing an improvised novel:
www.history-philosophy.blogspot.com

housing market

the current British market i reckon is gonna collapse, as people due to the over-buying to rent is kinda causing the prices to be unnatural, and due to the natural balance of the economy, the prices will right themselves by first collapsing real low when everyone sees the prices going down but will then rebound up slowly. This is further exacerbated by the high interest rates which is going to create pressure on mortgage payers which will result in more houses coming onto the market.
Any ideas to add to these rather rambling ideas is welcome...you all know where the comments button is.

Supply and Demand

Once upon a time, in a land far far away, there lived a wookie in a hut. Now the wookie's parents had just died when we join him, so after many intricate, ethereal and suspiciously gothic ceremonies, to mark his parents passage into the great void, the Wookie, being the pragmatic individual he was settled down to look at his inheritance. His parents had left him a brilliant collection of hair from famous wookies from all aver the planet Endor. The wookie was happy.

Now Chewbacca, who had dropped by, in his typically forthright manner informed the wookie, henceforth known as Bob (as its easier to type), that he should sell this hair onwards and maybe keep only a little bit for himself as a momento to his parents, as what the hell was he going to do with a collection of bloody hair, "which was useless" he said. Now Chewbacca didn't know that hair for wookies, isnt grown, rather it is glued on, after obtaining it from any reasonable hairdressers, so after an offended looking Bob tartly informed him of this information, the reasonably chastened Chewbacca realised that due to the scarcity of humans, and thus hairdressers whos business needs humans, the hair was worth a bomb.

so the supply is limited, and demand is huge, hence the price is going to be astronomical...now Bob starts rolling in the big bucks, he has the whole merchandise going, hell at one point he was even going for wookie chieftain...but then a hair mine is discovered and suddenly, along with his own hair collection, Wookie market is flooded with new mined hair. The supply increases, the demand goes down, as wookies mania for new hair is satiated and people dont regard this as the "in-thing" or necessary anymore. No one buys the hairs anymore from Bob's shop, so Bob is forced to price down, and match his price to the relatively low current demand, and he starts selling at the most effective price.
The question is....what would happen if say for example if the mining firm collapsed due to some random tradegy at the mine, or better still, some shocking revelation about the owner, and keeping in mind that wookie demand for hair is relatively inelastic (meaning they dont give a damn about the price and pay whatever to get it) what would happen to the price, and how could Bob improve his business model further.
dicuss

The Tripartite theory
Hi, for my first post I'm going to look at basically why the hell I'm not a millionaire. The reasons, once I started a period of deep introspection, are very simple, (and put a damper on my plans):
1. I do not work - and as suggested by Smith (the guy on the £20 note) compensation for labour is one of a tripartite of sources for income.
2. I do not own any property, hence I cannot rent (which they would pay to me for giving them the opportunity to use that land to make a profit) out to people and make money that way.
3. I do sell things...like last week I sold a cricket bat for £7 and making a huge profit on the way too, but not exactly Forbes standard you may agree.

So basically to become a millionaire for all you budding entrepreneurs, you have to either become VERY talented at a job, Buy up land and rent it out or start selling things for a profit.

for every post I'll pose a question for the reader to answer, so as to make this blog an excellent source of combined information and for me to gain in knowledge.
The question for this post is in this scenario...I own a huge farm , I rent it out benevolently to some serfs, who decide to stay at home and employ their kids to work...the kids go up in arms with this arrangement and rapidly gain wages to compensate for their industriousness. Now the serf sells the produce for a high enough price to cover the rent and labour and to still have profit remaining. Good so far...DISASTER strikes, the pitchfork has been broken upon a particularly nuggety rock...the serf pays for it...is this another section of money making, thus proving the tripartite theory of rent, profit and wages wrong, or is this a cunning way of asking the answer for a question I am not entirely sure about?
Discuss.