What is crowd sourcing? What did it allow Star Wars fans to do?

Crowd sourcing is the equivalent of 'asking the audience' in a radio show.  And there is no keener audience than die-hard Star Wars devotees. One enthusiast asked fellow-fans to recreate scenes from the film and has now

spliced the pint-sized, crowdsourced, fan-generated scenes into Star Wars Uncut: The Director’s Cut, which has just been released. Star Wars Uncut is a crowdsourced work of wonder.

Read more: http://newsfeed.time.com/2012/01/25/fans-remake-star-wars-15-seconds-at-a-time/#ixzz1kvIKIkGD

What is an Oscar? Where does the word come from?

Winners of Hollywood's Academy Awards receive a gold-plated statuette on a black metal base.  It is 13.5 in (34 cm) tall, weighs 8.5 lb (3.85 kg) and depicts a knight rendered in Art Deco style holding a crusader's sword standing on a reel of film with five spokes. The five spokes each represent the original branches of the Academy: Actors, Writers, Directors, Producers, and Technicians.

The popular name for an Academy Award is an Oscar. But there is no definitive explanation as to why.

The name was first publicly used was in an article by Hollywood columnist about Katharine Hepburn's first Best Actress victory at the fifth annual ceremony in 1934. By 1939 the word was universally known - but there remains confusion regarding its origin.

One theory is that the name came from an early Academy director, Margaret Herrick, in 1931. According to this legend, Herrick thought that the statue looked like her Uncle Oscar. Another is that Bette Davies named it after her husband - but that was in 1936.

A good example of how a nickname can survive long after its source is forgotten.

What does a credit rating downgrade mean?

What do credit rating agencies do?

Credit rating agencies are independent bodies which assess whether a company or country has the resources to pay back money loaned. An AAA rating indicates that the market is confident the money will be paid back. 

The big credit rating agencies (Standard and Poor's, Moody's etc) have had a patchy record in recent years. Lehman Brothers, for example, had an AAA rating right up to their collapse. But few doubt that they are essentially correct in their current analysis. This can be summarised as: too much debt and too little growth to ever pay it off.

What difference does this make?

Credit rating has two key financial consequences. The first is in the yield or dividend offered on bonds or fixed term loans. Because investors value security, particularly in a volatile market, a government or company can pay its bond holder a lower rate of interest to reflect the lower risk.

The second and more immediate impact is on the ability to raise money on the international markets.  Put simply, the lower your credit rating, the more you pay in interest. For Greece and now Portugal that interest rate is a ruinous 7%. That is why they have approached international financial institutions for emergency loans aka bail-outs.

Does US now risk default?

The market doesn't think so because the US has the money to pay its debts. For this reason US treasuries still pay a low yield or rate. US Treasury Bonds (Treasuries) were considered one of the safest investments in the world. They had the highest (AAA) credit rating. When this was downgraded to (AA+) this might have adversely affected the yield on its bonds. So far this has largely not happened because the US Dollar is a 'reserve' currency but the long-term risk remains. Everything depends on the confidence investors have in the capacity of the US to repay its debts.

What about European countries?

In the case of the sorry collection of European downgrades (French, Italian, Portugese, Spanish, Austrian etc) there is a more imminent threat caused by the need of these countries to borrow on the international markets.

For France and Austria the biggest impact of the downgrade is psychological. The Eurozone 'solution' depends on the idea of France and Germany sharing top-billing as the rich, financially stable guarantors for more wobbly economies. The downgrade damages confidence in this assertion, though perhaps not fatally yet.

So countries like France and the US are not effectively bankrupt like Greece? 
The situation is very different in Greece because Greece does not have the capital to repay its loans. That is why Greek bond rates are so high - the markets assess that loans to Greece have a high risk of default. The Italian situation is closer to the Greek one and is further intensifies the Euro crisis.

So the US is doing fine?
Not exactly. President Obama was right in one sense when he said that America 'will always be AAA country' but the downgrade recognises the increasingly unsustainable debt levels  in the US economy.

The Italian economy also has significant assets but is more vulnerable. What particularly spooks the markets is the uncertainty regarding the extent of public and private sector debts.

What does a debt default mean?

What is a debt default? And a 'haircut'?

To default on a debt is to fail to make a scheduled payment on a loan. A sovereign debt default is when a country defaults on money it owes - as happened to Argentina in the early 1990s, for example.

An early sign of a possible default is when the credit rating agencies downgrade the credit rating of the country concerned to 'junk bond status' .

And why are bond-holders getting 'haircuts'?
A 'haircut' is a loss in the value of an investment or security: see here for an example.The term is currently in the news as those bond holders who lent money to the Greek government face large losses


Looks like the European banks are going to be wearing their hair very short this year!

What happens when a country defaults?

Usually the national currency falls in value and this helps to make the goods of country concerned more affordable. International institutions like the IMF also arrange repayment plans or write offs/markdowns of debt.

Why would a Greek default be such a big deal? It's a small country!

1. Because it owes massive amounts to some of the biggest European banks. They will lose money or 'have a hair cut' as financial traders put it.

2. Greece cannot devalue its currency without leaving the euro - which might cause another financial crisis along the lines of banking crash of 2008

3. The fear of 'contagion' - of bigger countries in a similar position also defaulting. The EU could probably pay off Greek debts - but not those of Italy, for example.

What are they trying to do now?
The EU is making its loan (a.k.a bailout) dependent on Greece taking big steps to reduce its debts and restructure its economy. These measures include reducing public expenditure and and selling state assets. Until now we have had the worst of all worlds - Greece has not fulfilled its agreements while its economy is has suffered a severe drop in output.


Will the new measures work
Many economists believe that economic and political pressures make this unlikely.

What are the options if the refinancing deal doesn't work?

No pretty ones.

1. Greece could default, leave the euro and write off its debts - a 'disorderly default'

2. The EU could arrange for Greece to leave the euro in an 'orderly' arrangement.

3. Germany could leave the euro, allowing it to devalue.

4  The euro could split into two linked currencies - one strong, one weaker (this has been strongly argued by Telegraph financial expert Ambrose Evans-Pritchard)

What does stalwart mean? Where does it come from?

A stalwart person is reliable, dependable, resolute (or inflexible depending on your perspective.) The word is probably a  14th Century Scottish variant on a old English term: stælwierðe "good, serviceable,"

In the US the term acquired a political dimension with a section of the Republican Party  that refused to abandon its Civil War hostility to the south. They became known as the 'Stalwart Party', a label that stuck

Why Dutch courage?

Dutch courage refers to loss of inhibition gained by drinking alcohol. It originally referred to an (purportedly medicinal) Dutch gin:

In 1650 Franciscus Sylvius, a Dutch doctor, created Dutch gin in an attempt create a diuretic medicine. This was then used by soldiers in the Thirty Years' War by English troops and was an instant success for its warming properties on the body in cold weather and its calming effects before battle. Source

The specific reference to gin later became generalised to all alcohol, with more emphasis on the perfidious influence of the Dutch character. This anti-Dutch sentiment can also be found in other phrases highlighting other alleged national shortcomings: meanness with money for example ('going Dutch' still means to pay for yourself rather than join in communal payment).

Why the anti-Dutch sentiment? On one level it was the result of great power rivalry - England (later Great Britain) fought no fewer than four wars between 1652 and 1784. There was also an ambivalent public sentiment towards England's Dutch king (William of Orange) who took the throne following the Glorious Revolution of 1698. Though on the surface 'King Billy' was hugely popular for 'saving' England from a Catholic accession, a foreign monarch will always inspire some mockery and resentment.

Dislike of the Dutch was fading by the Nineteenth Century when national enmity turned firmly in the direction of Britain's neighbours across the Channel.

What's a humble brag?

“I am well aware that I am the 'umblest person going,” said Uriah Heep, modestly from David Copperfield

The art of boasting while expressing your modesty in the manner of the Dickens character. As the marvellous Mickey Kaus says in New Year's Blogging Heads Diavlog, 'Gee, I never expected to be collecting this award' (see here at 33 mins). We can perhaps give Pastor Rick Warren the benefit of the doubt - he does come across as a genuinely down-to-earth person - but the above tweet sets off the humblebrag security alarms.

Why do we say Happy New Year/Happy New Year's on January 1st??

A more complex question that it first appears. January was first declared the beginning of the year by Julius Caesar in 46 BCE to celebrate the God of Janus - whose two faces looked back into the past and forward into the future. Like many Pagan holidays (e.g. Christmas/Midwinter Festival) it slowly became incorporated into the Christian calendar, though from a Christian perspective the 12th Day of Christmas (January 6) might be the more logical transformation point from old into new. Throughout the medieval period there was sporadic resistance to what was generally thought to be an alien, pagan anniversary

A desire to standardise calendars eventually drove the assimilation of the NYD as the official beginning of the year. In 1066 William the Conqueror  declared that January 1st a holiday and in the same 'I'll show you who's boss' spirit Pope Gregory XIII used the 1578 New Year's Day celebration to  decree 

that all Roman Jews, under pain of death, must listen attentively to the compulsory Catholic conversion sermon given in Roman synagogues after Friday night services. 

In 1582 Gregory confirmed that January 1st should be celebrated but the Protestant societies of northern Europe stuck doggedly to a March 1st  start date until the late Eighteenth Century.

So an artificially imposed holiday, often used as a pretext for spot of forced religious conversion.

Happy New Year!