Wednesday, February 25, 2009


An interesting quote at Julien Frist's euroblog (original at EU Observer):

Perhaps the best news is that the outcome of the elections is not known. That is a huge achievement for a post-Soviet state. Pretty much everywhere in the region (with the exception of Ukraine, and to some extent Georgia) election results are known well in advance, and elections do not really matter.

My first reaction is, obviously, "ahem!". The Baltics have their troubles, but we are resolutely democratic; our electorate can be manipulated by populism and appealing to its darker instincts, but the elections really do reflect the will of the people. It is offensive to have Moldova looking down on us in terms of fair representation.

However, I honestly don't think it was malice on the author's part; rather, Estonia and its neighbors are no longer thought of as post-Soviet. Unlike Moldova, which is a semi-artificial nation resulting from the Soviet Union's annexation of a part of Romania and often (if unfairly) mistaken for a shard of Yugoslavia, we have now established an identity that is not dominated by our Soviet past. To the likes of Nicu Popescu - pundits from clear across the continent - we are the plucky little states that are scared of their Russian neighbours, but for some indecipherable reason don't just do the logical bit and become part of Sweden. Also really good with computers. But not really part of the whole mess of former Soviet republics trying to build a working society out of a tribal mentality and the rotting remains of imperial infrastructure.

Which is kind of the effect we've been going for, really.

Tuesday, February 24, 2009

The Nation's Standard

The nation standard
Originally uploaded by Flasher T
Happy 91st!

Monday, February 23, 2009

Tele2 starts to get it right (finally)

I've bitched about Tele2 before, specifically their SMS spamming ways, but the truth is that I've been a customer of theirs for over ten years now - and didn't leave even when I wasn't locked into a contract. They're cheaper than the other two physical networks, and while the coverage is a bit worse than EMT, it's never bothered me too much. But they could certainly stand to increase the uptake speed on innovation.

One of the mobile-related subjects I've brought up is the viability of unlimited data plans on 3.5G. While people from the carriers have assured me that the Estonian networks will not be running out of capacity any time soon, they have certainly been taking their sweet bloody time with it, so there must be some concern. Currently, the top end of the data plans give you 3GB of traffic per month (though, again, the man from Elisa has assured me that the limit is currently not being enforced) at a fee of about 20 Euro - which is acceptable if this is your primary Internet connection, but far less so if it's something you use every now and again. The data plan I got for my N85 is 99 EEK (7 Euro) for half a gig of traffic, which is on the upper edge of what I am prepared to spend on what is essentially a backup connection.

EMT has had campaigns where you could use data on your account and it was capped at 9 EEK per day - although I believe that wasn't permanent, just a temporary promotion. My latest bit of Tele2 paper spam tells me that their prepaid cards are now capped at 15 EEK per day - the same price as a 24-hour ticket, which you normally need to specifically purchase with an SMS, but which does give you unlimited data at HSDPA speeds. They really need to extend that to contract customers, and make it a permanent feature; that would be an awesome advantage for them (until EMT and Elisa do the same).

As it is, what I really need right now is a slim PCMCIA data card - which EMT sells, but Tele2 doesn't - and a prepaid Tele2 SIM loaded up with enough cash for me to not have to think about data usage from my laptop.

I also need data roaming to stop being so preposterously expensive, but then that's not going to happen any time soon, is it.

Thursday, February 19, 2009

Grassroots Credit

Walking into town on Sunday to pick up my car after a night of severe intoxication, I strolled past Tartu's office of Parex Bank. No, I didn't know we had one either; but apparently we do, and what's more, it's still operating - and what's even funnier, they are advertising 9.5% return on deposits in Estonian kroons.

Now, obviously, very few people would be foolhardy enough to place their savings in Parex these days, but it is the vanguard of an interesting phenomenon. Russian economic blogger Artyom Eyskov of mentions today that a bank in Russia is offering a savings deposit plan at 20% per annum. Furthermore, Artyom took the time to check out that plan's terms, and it appears legit - which motivated him to do a little investigating and come to the conclusion that the bank in question is gathering up cash wherever it can find it, in order to pull off an investment so lucrative that even significant interest payouts are worth the bother. (The bank's offer is not an investment plan, but a deposit, so it is guaranteed by the Russian government.)

And then there is a company that seeks investment, promising payouts of between 16% and 28% - even at the bottom end, that's a very big reward. They're not a venture capital or an investment fund, but rather an intermediary - providing the connections between people with cash to spare, and entrepreneurs in need of loans. They advertise to both sides and, presumably, charge both sides a fee.

Of course there are some caveats, the most obvious one being that the company does not actually assume any risk. It's not a financial institution; if the deal goes sour, Vabakapital is not liable. However, it is a very good idea, and a highly curious phenomenon.

The problem of the credit crunch is not a lack of capital, but a lack of faith, as exercised by institutional creditors. The nature of business in a time of industry and globalization is that business deals are conducted against lines of credit; if you need raw materials, you're not actually going to hand over a bag of cash to a guy in China once a freighter docks at Muuga. Instead you're going to give your supplier a letter from your bank, saying that the bank is confident you're good for it. Hell, more often than not, if you and the supplier have an established relationship, he's just going to trust you. Sure, there are legal papers saying you have to pay, but that's not the same as cash on delivery.

So business runs on credit, and yes, banks are a large part of it (many companies use short-term bank loans to smooth out cash flow, and most have borrowed from the bank to grow the business anyway). Now, the banks put a lot of their money into really stupid deals that naturally fell through. I'm not going to go into detail on that, suffice it to say that banks are left with not just huge losses, but no real idea of how much they lost - the assets they got for the deals are worth something, and nobody has a clue how much exactly (but not a lot). So banks are afraid they have too little, and won't give out loans.

Without loans, businesses can't produce and deliver. The demand is actually still there - at least until all the workers get laid off - but without lubricant, the machine grinds to a halt.

And here's the important bit: just because a business can't function, doesn't mean it's not a good business.
So in the global economic crisis, somebody with some spare cash can actually make a very good investment - buy a functional, profitable, well-structured business that has simply been tripped up by the act of globalization shutting down for a year. The machinery is still there, the people, the business contacts, and most importantly - the paying customers. Just needs a bit of liquidity to get it moving again.

And if the banks won't help, then there is an opportunity for individuals and groups. The crisis has lowered barriers to entry and made a lot of business owners desperate; and let's face it, if you're looking to get a return on your money today, you really have no good reason to trust investment bankers and other professionals. They've shown themselves to be utterly worthless as a class of humanity. But if you're dealing directly with the owner of a business, and are giving him a loan backed by his real assets - or better yet, buying a stake in the company - you're in a position to exercise your own best judgement. The very fact that you still have money to invest means your judgement is a hell of a lot more sound than that of hedge fund managers.

There are companies elsewhere doing this already, sort of, but the Vabakapital thing seems like a lot more simple, and likely to work. Mind you, it could still be either a massive scam or an epic failure, and I haven't given them any of my own money yet.


Ah! you say. But who has spare cash to lend these days? Well, there's a good probability that a lot of people do, they just don't feel comfortable doing it. There's a crisis on; we might all lose our jobs; let's not spend, and definitely let's not be frivolous with our savings. The upshot is that everyone keeps their money in the bank, where it's safe, guaranteed by the state. Funnily enough, there is already some evidence of the banks - at least here in Estonia - seeking to make use out of all those deposits and pushing consumer credit again. At high rates, certainly, but still.

Monday, February 16, 2009

Backfire Schadenfreude


Tallinn's City Hall has been making noises about getting rid of its boroughs and centralizing the power. The mayor, ever the populist, started an online poll, asking people to support the campaign. Ostensibly this is beneficial to the mayor's Centrist Party, and should allow them to keep control of the city, as well as give them a boost in other elections. (I haven't looked into it, in fact I specifically registered myself as a Tartu resident a few years ago so Savisaar would have no access to my tax money. But from what I understand, the consolidation would end the separation of Tallinn into distinct voting precincts, instead the city would vote as a single constituency.)

The result so far?

Tallinn's council is still quite enamoured by the idea though - to the effect that the coalition has attached a rider to an unrelated bill, blocking any such consolidation. The bill is being rushed through parliament, and the coalition says that they are concerned about election laws being changed so close to impending public votes. Their claim certainly has some merit, but it still smells bad to me: hiding significant changes in unrelated legislation and pushing them through without public debate may be JOKK, but it's very bad form. Postimees quotes Centrist MP Evelyn Sepp saying that the President could simply veto the bill. As much as I hate to agree with the Centrists or do anything to support the interests of Savisaar, I do think he ought to: it's a bitch move on the coalition's part, and so they are in desperate need of a legislative bitchslap.

Sunday, February 15, 2009

Who Wants the Euro?

Even in the worst case scenario, we will be far better off as part of an isolated, devalued, hyperinflated market of nearly half a billion consumers, than a clever and prudent loner.

My 3rd post on the Th!nk About It website. Go, read it, comment on it, and vote 5 stars on that one and my previous posts! And, you know, have a look at what the other people are writing as well. Some of them are quite good.

Friday, February 06, 2009

Skype is for chat

There's a CNN show on, and the host is asking people to leave feedback, via Skype.

I keep telling people that Skype at this point is mostly useful as a chat protocol, not a voice communication service.

(CNN also read out twitter messages. Sigh.)

Wednesday, February 04, 2009

Who Needs the Euro?

Everyone knows Iceland went bankrupt, but let’s face it: Iceland is three hundred thousand people who can’t grow any bread. More worryingly, large countries - those that make up the backbone of the EU - very much can go bankrupt; in fact they have before, and it’s increasingly likely that they will again; and soon. What hope do the smaller member states have?

My new post on Th!nk About It. Click, read, comment, and vote it up! I'm trying to win an iPhone here!

Sunday, February 01, 2009

Shakedown: Estonia

The Th!nk About It website is up, and so is my first post there. Go, check it out, post your comments over there.


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