Sunday, August 21, 2011

Synology DiskStation, iTunes Server and Time Machine: the Forgotten Ports

A hint for those who aren't able to connect their iTunes to the Synology DiskStation iTunes server or who are having a hard time getting the Time Machine directory to present itself on the Finder: on the DiskStation interface (DSM 3.1), check all the appropriate built-in application ports ("Bonjour," "Synology Assistant," "iTunes Server," etc.) and create a custom rule opening the TCP range from 9997 to 10000. This last step solved all network connection problems between our Mac and the DiskStation services.

Wednesday, August 17, 2011

The Sensible Ms. Merkel

The New York Times declares that Merkel and Sarkozy's "pledge for euro unity may not be enough to satisfy [financial] markets."

What the NYT doesn't tell you is that to not "satisfy [financial] markets" is exactly what should have been done since 2008.

And isn't it refreshing to hear a politician like Merkel saying something intelligent for a change? Truth hurts, but must be dealt with. Let's call it Merkelnomics, so here it goes:
Mrs. Merkel repeated that there was “no magic wand” to solve all the problems of the euro, arguing that they must be met over time with improved fiscal discipline, competitiveness and economic growth among weaker states.
"No magic wand" are courageous words when said by a politician like Ms. Merkel. Unfortunately, what are a few drops of wisdom in a sea of nonsense?

Wednesday, August 10, 2011

The Abandonment of a Governance Ethical Principle

When you start hearing again and again the argument that a country cannot default on its debt because it can redeem it with fiat money, it's a sign that a cause is lost. People may not have understood it yet, people may not have faced the consequences yet, but at this point, unfortunately, a fundamental governance ethical principle has been abandoned.

And let's not forget that redeeming debt with fiat money is just one train stop away from not being able to redeem it even with fiat money. Ask Brazil.

Friday, August 5, 2011

The Burden of Excessive Creditability

And so the "theory" goes: a flexible exchange rate plus financial trustworthiness should equal a ticket to macroeconomic paradise. In normal times, this isn't only solid, it's good sense.

But during these days of planned global monetary chaos, ask the Swiss what they've been thinking of the "theory." It isn't their fault: they have done their homework, but the burden has an insidious alien origin.

The irony is that, for once, they may be having Eurozone envy. An interpretation that won't be found neither in the WSJ nor in the FT, after all their readers may have more important things to learn, such as that Portugal and Ireland are less creditable than Venezuela and Pakistan.

Wednesday, August 3, 2011

Some Unpleasant Bonds Arithmetic

At a 2.66% yield (today), a 10 year Treasury will appreciate 30% throughout its lifetime. Naturally, it could appreciate faster than 2.66% per year during the initial years or months, but it would mean that, later on, the yield would have to be lower than 2.66%. The accumulated appreciation throughout 10 years cannot surpass 30% anyway.

From this simple arithmetic, there can only be two scenarios: (1) bonds are extremely overpriced or (2) America is heading to a Japanese-style lost decade.

Now, in your typical retirement portfolio you may find guaranteed-return funds that promise (yet) to pay 3% per year or more, depending on the binding rules. Under the assumption that these funds will keep their promises and remain solvent, the return over ten years accrues to at least 34%. So you have a guaranteed ten-year bonus of 4% or more over the 10-y Ts. On the other hand, guaranteed-return funds provide valuable insurance against a bonds market collapse. If it happens, then you'd be well positioned to do some bargain hunting.

No matter what happens, and unless you're planning to play short-term dice with the pros, the 3% (or more) guaranteed-return account is a clear winner.

That's why I'm saying: bye-bye bonds, see you next time!