Category — Norway

The opening session today in the ongoing OECD Forum 2010 was on the future of capitalism, where economic historian Anatole Kaletsky argued that “we’re entering a new period of pragmatism, when ideology will give way to a more “common sense” approach.” Arguably, this is not such a radical notion; the financial crisis has shown in a dramatic way that there have been some serious cracks in what has commonly been accepted as “good” economic policy. It is easy to blame greed and carelessness in the financial sector, but that hardly goes to the heart of the problem. At the end of the day, even if the greed and carelessness of a few “evil bankers” really is to blame, policy has to change if the economic structures have been conducive to making it cause despair for millions of people.

Aside from highlighting dysfunctional economic structures and the need for reform, a very immediate consequence of the crisis is that Governments have been [Read more →]

The Norwegian Government Pension Fund, managed by Norwegian Bank Investment Management (NBIM) sold off more than half of it’s 133 billion kroner position in Greek, Portugese, and Spanish government bonds during 2009. The funds chief executive, Yngve Slyngstad, explained that while Eurozone government bonds in 2008 were priced as if they gave risk-free returns, “we said they were more like return-free risks”. Well done, Nassim Taleb would have been proud – there are arguably no such things as risk-free returns anyway (at least not in Southern Europe).

Yngve Slyngstad, not yet fifty years old, started his career as a junior researcher at Norges Bank at the age of 31 after completing a whopping four Master’s degrees in Law (University of Oslo), Economics (UC Santa Barbara), Business Administration (NHH) and Political Science (University of Paris, Sorbonne), spending years backpacking around Asia, and living by himself in the wild and weather-torn Northern Norway reading Wittgenstein. Needless to say, we here at Evolution-Revolution think this is a pretty awesome guy.

Back in January my dear co-author The Sundance Kid wrote a short piece on  the future prospects of the Norwegian krone, whereby Evolution-Revolution agreed with Credit Suisse’s prediction that the krone was on its way up (while, admittedly, making ourselves guilty of blogger-journalism-commentator hedging dicussed in this post by the eminent Baruch at Ultimi Barbarorum). Since then, the Norwegian Krone has, indeed, strengthened a bit vis-a-vis both Euro, Pound, and Dollar (although as Nassim Taleb would be quick to point out, this might have been completely random). Nevertheless, the krone still has a way up to go, even more so than it did in January.

In particular, three factors underlie this prognosis: [Read more →]

The United States is not the only place where offshore drilling has been on the political agenda during the last years. In Norway, where the offshore oil and gas industry is a significant part of the economy, making Norway the third largest oil exporter in the world, there has been debate about opening up scenic coastal areas of Lofoten and Vesterålen for offshore drilling. The Northern Norwegian coastal archipelagos feature amazingly scenic nature complete with fjords and mountains, the world’s largest population of cod along with a thriving fishing industry, and whether possible drilling in the area should be allowed to commence has already been the subject of intense debate.

Still, Norway’s Labor Party led coalition government is arguably leaning towards opening up the area for oil and gas investments, in spite of vocal protests from its Socialist Left Party members. It has certainly been  [Read more →]

In connection with this year’s women’s day celebration in March, my younger sister who is a Seargeant in the Royal Norwegian Air Force was interviewed by an “investigative journalist” from NRK making a piece about women in traditionally male occupations. She recounted to me a part of the interview that did not make it past clipping. It went something like this:

Interviewer: Have you ever experienced gender discrimination?

Sunniva, female Air Force Sergeant: No, I can’t recall any situation where I have been discriminated against.

Interviewer (a little surprised): But, you must have… Eh, well, I have heard stories about women in the military…

Sunniva, female Air Force Sergeant: I can only speak for myself, but I have never experienced anything like that.

Interviewer: Well, have you ever experienced ALMOST being the victim of discrimination?

Sunniva, female Air Force Sergeant: Eh, no…

Interviewer: OK, so you don’t feel like you are being discriminated against, but do you think that some other women perhaps could feel like they were if they had your job?

…

I feel so much safer now that I know that the media is investigating hypothetical gender discrimination.

We’ve previously endorsed the Norwegian Government Pension Fund’s  (GPF) approach to enhancing global corporate governance. Recently, NBIM – the manager of the fund – was also instructed to allocate about five percent of its portfolio into unlisted real estate. I consider this  decision quite bad for the following reasons.

Property investments are notoriously illiquid. Currently the reserves of the GPF is used to cover the domestic fiscal budget deficit. As wee have recently seen, the deficit and need for fiscal expansive policy will usually be the highest when liquidity is the lowest. Illiquidity  implies below real value prices and as such NBIM will always be selling its real estate investments when prices are the worst (this is in a longer term perspective when oil revenues are actually smaller than the budget deficit)

It was the Yale endowment fund under management by David Swensen that started advocating that long term investors such as the GPF should allocate more of its investments [Read more →]

The following were (seriously) the top three headlines last night on the RSS feed I get from Dagens Næringsliv, Norway’s biggest business and economics newspaper:

LONG, LONG LINE OF GOOD WINES

(Lang, lang rekke med gode viner)

-

APPEALING SYRAH-WINES

(Tiltrekkende syrah-viner)

-

ABDUCTED FINANCIAL ADVISOR

(Bortførte finansrådgiver)

That last link is foreign news, of course, about a something that happened in Germany. So far, it appears we are still living the good life.

I was recently reading some older posts on Andrew Clavell’s Financial Crookery, and came across a post from early January on the decision made by Iceland’s President Ólafur Ragnar Grímsson to let the so-called Icesave bill (with which Iceland agrees to pay back Britain and the Netherlands the deposits made by its citizens that were lost by its banks) be subject to a popular referendum that it surely would not survive. It didn’t, on March 6th 93% of voters wanted it dead, compared to a diminutive 1,6% who wanted Iceland to [Read more →]

Picture from: http://pressthat.wordpress.com/2007/10/19/reinterpreting-islam/

Most of the links contained in this article point to Norwegian-language websites – as such I hope those of you who do not speak Norwegian and are interested in their contents make good use of Google translate. All the quotes below are translated from the original Norwegian by myself. If any Norwegians amongst you find any wrong or questionable translations, please email me and I will do my best to correct them.

During the last few weeks the homeland of Evolution-Revolution’s authors has been the stage of a fiery public debate after Dagbladet, one of the biggest newspapers in Norway, printed a picture on their front page of the Islamic Prophet Mohammed as a pig scribbling in the Koran with his trotters. However, despite its unpleasantness, the still ongoing furore following the publication has arguably been very valuable in that we have learned a whole lot about the state of immigration, integration, and Islam in Norway.

The picture in question was linked to in a post on the the Norwegian Police Security Service (PST’s) Facebook-page discussion board, amongst other posts containing highly racist remarks. After recieving a tip about it, Dagbladet wrote an article presumably meant to criticize PST for allowing a considerable amount of hateful and racist statements to be posted on their discussion board with apparent impunity. In doing so, however, they put the  - to Muslims – extremely offensive caricature in question on the front page of their print edition.

Predictably, there were heated reactions from many of Norway’s approximately 140 000 Muslims. In particular, many saw [Read more →]

Rescuing a virgin in dire straits

The development of Norway’s soverign wealth fund, the Government Pension Fund (GPF), has always been interesting. GPF will this year attend 2000 meetings with American companies, in which they own up to 5 percent, urging them to separate the role of CEO and Chairman. They hope to make the governance structure more transparent and independent. Governance structure in many American corporations is arguably quite old fashioned and this should be a welcome nudge in the right direction. It’s hard to argue this to be a bad thing and it could quite possibly increase returns for Norway in the long run. Even a marginal increase would be significant as the stated investment horizion of the fund is infinite, that is until the collapse of the universe or the world financial system, whichever should come first.