Economics, Germany

Bye, bye, Neuer Markt

poor baby

Deutsche Boerse, the main German stock market operator today announced that the Neuer Markt (new market) would be dumped by the end of the year. It’s a widely welcomed and probably useful decision to get rid of a market and respective index that has plunged for 2 1/2 years in a row. Fair enough, what goes up like a rocket, must come down once the boosters burn out. But I remember all the success stories back in 1999. I remember the days before those 2 1/2 years, when “going public” was the main subject in my business schools cafeteria. When the Neuer Markt was synonym with getting rich, fast.

There will be a new, more efficient trading system for tech stocks. I guess it’s a good sign that the market is being cleared from all those penny stocks, whose IPO was probably planned in a cafeteria just like mine. It’s not that the digital revolution is dead. It’s just that it is eating is children. Another revolution to prove that rule.


I like Britain.

Seriously, I do. Some very good friends of mine are from the island and I lived in their capital and volunteered in the mother of Parliaments.

Nontheless, I have to quote this article from the Observer. It’s an old one, but given the Anglo-German tradition of (in these days) humorous bashing, there was no way to avoid it. The article is called “Why the Germans are right about us” and deals with a story the German magazine Stern had published about the abysmal public services in the UK.

In the end, it’s all a matter of productivity differences – there’s an absolute and relative difference in output per hour per worker relative to the US/JP/GER/FR. Thus not all – although quite a lot – can be explained by Tory government-induced lack of money for public goods. I might post more on the details after I read the 128 pages of Nick Crafts latest essay (pdf) on the relative British economic performance from 1870-1999.


Structure in motion.

fractalsNow we all know that structure is something precious in unstable times like these, don’t we?

And like some of the gold diggers during the glod rushes of earlier times were more successful than others, some people are able to identify the precious stability, the macro trends of development within which all the instability occurs. Think of a fractal image on which a micro pattern is infinitely embedded in a macro version of itself. Since our lives take place in unstable micro patterns most of us can’t see how these patterns are actually floating on much more stable macro patterns. But some can. And I think, with reference to the fractals of social development, a lot of them are interested in economic history.

You wonder what I am talking about? OK – here’s your macro pattern detection test. What does the following dialogue, taken from, August 8th, 2002, tell you about the future…

“Do you really save money by paying her to follow you around and remember what you already have in your wardrobe?”

“Well yes, because she reminds me of things like that I already have a black skirt.”

– Two women outside Berkeley Bowl (which is a grocery store, not a bowling alley, oddly enough.)

And now I recommend to compare your thoughts to Berkeley’s Brad DeLong’s.