The Price of Everything

           Today, I just had just had the morning to work on my project as sailing takes up the afternoon on Wednesday’s. I have booked the train tickets to New York City in early May for my time at the Stock Exchange kindly arranged with the help of Mrs. Merry Conway and Mr. Greg Barnhill. I’m thrilled to be given the opportunity to be shown around by employees who are at the forefront of today’s stock markets. I imagine the atmosphere on the trading floor would be electrifying, I hope to be able to take some pictures while I’m inside but for now, here is a picture of what the exterior and trading floor of the building look like.

            I started reading the first book on my reading list: The price of everything by Eduardo Porter. This book’s fundamental concept hopes to explain way behind every decision we make lays a price. The chapters I have covered so far are: The Price of Things, The Price of Life, The Price of Happiness, The Price of Women and the Price of Work.

            There are two sections of this book that have stood out to me as the most thought provoking. Under the chapter “The Price of Life”, I was interested to have the question answered that had first pondered me on arriving in the United States back in September – Why don’t American School buses have seat belts? Any reasonable person would surely think the same: Why would the US Congress put the lives of thousands of school children at risk of road accidents? Well low and behold, with a few Statistics their reasoning behind it suddenly becomes rational:

“The National Academy of Sciences contracted by the department of transportation recommended against a federal mandate to require seat belts in all school buses of the grounds that this would save one life a year, at a cost of $40 million apiece.”

Measuring this cost benefit analysis against another value of life example:

“The Consumer Product Safety Commission approved a new flammability standard for mattresses on the basis that it would save 1.08 lives and prevent 5.23 injuries per million mattress. Valuing each life at a more reasonable $5 million and each injury at $150,000, its benefits would amount to $51.25 per mattress with a cost to the industry only $15,07, so it would be worth the added expense to ago ahead with the higher safety standards.”

            The other section of the book, which I thought was an incredibly unique way to look at the foundation of the 2008 recession, was under the chapter of “The Price of Women”. “It has been suggested that the sex imbalance pushed the Chinese households into a race to save more, so their sons would have money to compete in the increasingly tight marriage market. This enormous savings rate has contributed to China’s accumulation of some $2.5 trillion in foreign exchange reserves at the end of 2009. China gender imbalance helped inflate the global housing bubble, as the mass of Chinese savings sloshing through the world’s financial system kept interest rates low and fueled the boom in housing prices all over the world”.

This may not be fully responsible for the financial crisis still being felt four years but it’s certainly worth a considering its influence globally.

            
            I begin my first day at Ameriprise Financial in Fall River tomorrow. As I have a British driving license I’ve had to learn how to drive the American way! This consists of being on the other side of the road and the other side of car! After a weekend of driving practice, I am feeling a lot more confident that I will be able to give Mrs. Lisa Clark her car back in one piece that she has kindly lent me during the six weeks.