Date:       9 Nov 13
By:           Frank Gue, B.Sc., MBA, P.Eng.,
                 2252 Joyce St.,
                 Burlington, ON L7R 2B5 
                 905 634 9538
For:          Editors, The Economist
Re:           Economist Nov. 2 page 80 re hybrid bonds
Dear Editors:
You say:  “Given enough time, the [financial] industry has a knack for turning innovations into monsters.”
Surely you know that many, perhaps most, innovations need no “turning”.  They are designed from the 
start to be opaque monsters impossible for even sophisticated investors to decode; aided and abetted as they
are by the likes of rating agencies under impossible conflicts of interest pressure, the Basel bunch trying to
suck and blow, and a government/professional community agreeing complacently that “This time is different 
(P. 78, same edition)” .
Let me introduce you to Grandma Turing.  Even though aged 90, Grandma Turing still has all her marbles 
and can use her Grade 3 arithmetic to determine best value when grocery shopping.  Her most sophisticated 
investment in her 90 years was a promissory note with a fixed maturity date at simple interest that she once 
wrote for her great-nephew Alan, who repaid her on time.
Give Grandma Turing the prospectus for some issue of your “hybrid bonds”.  If she, given 15 unassisted 
minutes, is able to opine with reasonable confidence that these bonds are good enough for her to buy 
with $5,000 out of her modest savings, they have passed the Grandma Turing test.
If not, then not.