Monday, 28 November 2011

The Unions: They don't speak for everyone.

Got this in an e-mail from an academic buddy - his view of the Lecturer's union striking.

I am an academic at a leading UK university. Obtaining an academic position is not an easy thing to do and I have worked towards it, pretty much non-stop, since I left school. You will probably need a First Class degree to get onto a funded PhD course. Assuming your doctorate goes well, you need to find a postdoctoral position. There are probably four times as many new PhDs as there are postdoctoral opportunities, all being sought by highly-motivated, breathtakingly intelligent young people who have just obtained their degree. The competition is intense beyond belief.

If you get your postdoctoral position, it will probably be for a term of one to five years, during which time you have to build a publication record that makes you worthy of an academic position. With short postdocs, you might need to re-enter that competitive job market to get a second contract. You need to build enough experience – maybe three or five years’ worth – to be in a position to apply for an academic position, but not too much. Someone who doesn’t manage to get an academic position after six or eight years is at a huge disadvantage compared to the bright young things on the up.

The academic positions are, one again, about one-quarter as plentiful as the postdocs reaching maturity, and even if you get one, it will likely be fixed term. Use this term wisely – by bringing in a lot of funding, for example – and you just might obtain a permanent one.

The rewards though, are immense. I get to work on the thing which is most important to me in the whole world. I get to travel the world. I get to leave work at 2pm if I feel like it, even though I never do. The freedom is there.

I get to make, with my own mortal hand, things that will change the future of science. This, to me, is the most incredible thing that I could ever be allowed to do. These objects are going to be paid for by taxpayers – productive people who work hard only to have a slice of the fruits of their labour hived off and given to me. I am humbled by the trust put in me to use this money as wisely as I possibly can, to advance human knowledge, and I remember the thirty-odd hugely talented PhDs to whom I have, personally, denied the opportunity.

Today, I got an email calling on me to strike. It said that I should consider this hard-won chance-of-a-lifetime to be, well, a job. A job, like in Marks and Spencer’s. That I should consider a few hundred pounds, extracted from people who have had to actually work to fund my dreams, to be worth more than this chance of a lifetime. That I should spit on the thirty poor sods that didn’t get this chance by refusing to use it to its fullest possible extent, and on the people whose jobs went to the wall to pay for the taxes I spend. Somehow withholding marking of students’ papers and delaying their careers, the better to line my own pocket with other people’s money, is portrayed as a virtuous deed.

I am, quite literally, open-mouthed in disbelief. These people have, like me, been given the chance of a lifetime and they are prepared to waste other people’s money, to waste other people’s time, over a few percent on their investments. I can imagine more selfish acts, but not many. These, by the way, will be the same people who rail about the evils of the bankers. Say what you like about the bankers, they didn’t blackmail anyone to get to where they are today. Good luck to them.

So, when you see the lecturer’s unions on strike next week, remember that they don’t speak for all of us. Some of us have work to do.

A view from an academic, who wishes to remain anonymous, but I can confirm is working on stuff, that when he tells me about it, I'm awed at how cool it is. Think about stuff your 8-year old self wishes you did for a living, and that's what he does for a living.

Saturday, 19 November 2011

The Bond Markets are the Masters. Ah... Democracy at last.

Here's the bad news. The bond markets are the masters now.

Here's the good news. We are the bond markets, and the bond-markets are us. Or at least anyone with a pension. Who needs democracy when we, the paymasters, have those who would rule us, by the short 'n curlies. When politicians decide that they know best, we, the people who pay their bills, and ultimately lend them the money for them to squander, eventually call time on their nonsense. They can pretend the bond markets are shouty shirty men with many phones shouting about stuff they don't understand. But it's people managing your pension fund for you thinking "you know what, I think I might dump those Italian bonds now" because they don't trust the Italian Government to repay you any more.

If you don't let the people decide, you end up with politicians in charge (until they run out of your money that is), and as far as the Eurozone is concerned, the Italians have shown that given democracy, they elect, repeatedly a magnificent, corrupt nincompoop and can't be trusted. It's too late to whine about sovereignty. The Italians gave that up, willingly when they joined the Euro. So did you, Ireland. You think British sovereignty was bad, now wait and see what happens when you're forced to bend over to bail out German bankers.. They won't even have the decency to spit first. And Greece, who are even more culpable as they lied flagrantly to get into the Euro. Germany rigged the system to it's benefit. And you didn't see it coming. So, democracy in Europe is dead. Germany has her Empire, and it will break their bank because they didn't set to it as the British did, with trade in mind. Indeed the whole project is designed to shield France from globalisation (that's what they ACTUALLY want!!!)

There is a solution to the current crisis, a simple one, and the markets know it. It's very, very simple. We're beyond moral hazard. Germany needs to bail out Southern Europe, and the ECB needs to indicate that it will print sufficient money to ensure that Spain, Italy, Portugal, Ireland, and yes, it will come to this, France too, do not default on their debts. The Euro will fall, but so will bond-yields and the Euro. The Germans must accept a stagnation of living standards for a generation.

The Euro was a political project. Politicians, had they asked their people would have been told "no". And the people are, once again, right with the politicians in the stupid corner. And the Icing on the cake is that the UK isn't part of this unfolding disaster, so while we will suffer a bit more than is reasonable as our trading partners' economies roll over, we can enjoy the Schaenfreude of knowing WE TOLD YOU SO. Britain, of course maintained her trading links with the rest of the world, rather than looking in to an aging, dirigiste, stagnating, over-regulated Europe and will remain the worlds second most popular destination for foreign direct investment, after the USA.

Just Imagine what it's like to be John Redwood now. Having endured a decade of ridicule and abuse to be proved so comprehensively, prophetically, totally right. The UK can try to help. We can, and probably will lend the IMF, and the Eurozone some more money. Bear in mind that we're borrowing at a little over 2% and probably lending it to those Euroweenies at 5,6 or 7%. And the German tax-payer's going to get the bill. It's like winning a war, but no-one's died. Who cares about an EU referendum when in a decade there may not be anything left but a ruin in Strasbourg and Brussels a ghost-town?

And when the Euro-project collapses into a singularity of political vanity, the UK can sail off into the mid-Atlantic, still a major global trading nation, still a permanent member of the UN security council, still (just) in possession of military forces with global reach and still with close relationships with rich, prosperous, free-market countries with which we share a language. All things the European Union sought to take from us. Oh. And the human relationship with the Next major superpower is pretty good too. (no, not China, they've demographically screwed themselves before they're rich), India, with whom we (or at least the English) share an obsession.

The UK, once again has flirted with disaster, yet will once more come out the other end the victor, still on top, and all because some politicians with humility decided in the late 90's that they ought to consult the people before surrendering economic sovereignty.

Don't write blighty off just yet.

Friday, 11 November 2011

Bloggy Hiatus

For reasons beyond both authors' control, AVBD may well be taking a couple of weeks off. If you would like to post a guest post, and you're not certifiable, or a rancid lefty whinging about "the 1%", please feel fee to drop me an e-mail (It's to the right) with your post, and I will do my best to post it, if I have Internet access while I am away and If I like it.

Can I point you to My Fiance's new novel in the mean-time. It really is rather good. If you don't have a Kindle and want to know when the Hard-Back is coming out, follow the Blog.

See you all again in Decemeber.

Thursday, 3 November 2011

Why is the Stock Market so Reslient?

First there was an agreement, to widespread euphoria, then Greece (all but) rejected it and the market fell. Then the ECB cut rates this morning, and the stock markets rose. What’s coming up in the next few days? Well most importantly US unemployment numbers called the non-farm Payrolls are tomorrow. I expect these to be good, given the strong (these things are relative…) GDP numbers from the USA last week. Either way they could Move the market significantly.

Compared to August, the market’s looking pretty resilient. This is because of continued strong corporate earnings, backed by mainly strong cash-flows. Many companies have little debt on their balance sheets, and most UK banks are well-capitalised, even if the Government owned ones are merely stable in intensive care.

I expected last Thursday’s Eurozone deal to kick the can a little farther down the road than 4 days, and now Italy is in the market’s sights. While Greece, whose government has collapsed, and who appeared threaten a military coup at one point may dominate the evening news, it is the relentless rise of Italian bond yields that is the main cause for concern. Financially speaking, Greece, 1.6% of Eurozone GDP doesn’t matter, and the banks (or at least all but the French banks) have already written down their Greek debt to 50% - they have ALREADY taken the loss. The Eurozone tax-payers through the ECB and the EFSF have yet to do so, mainly because politicians don’t want to explain how they set fire to €1tn to their electorates. This is politics. As far as the markets are concerned, Greece HAS defaulted. It’s over bar the shouting.

Italy on the other hand has the Worlds’ third largest bond market and much of this is held by systemically important financial institutions. A default could spell a run on Italian banks, and the complete failure of the Eurozone. 10y Yields are now 6.5%. Even Spain is holding steady at 5.45% and Portugal at 5%. Ireland is Yielding 8.5% and falling. Worse, French bond yields have started to rise. That we are talking about an Italian default is remarkable given they are running a primary surplus – that is to say the Italian budget is balanced before financing the debt. They have, by this one measure a stronger set of public finances than the UK. The difference? The UK can print any money necessary to service its debts and our debt is of much longer maturity meaning less falls due needing refinance in the near future.

So far the European Central Bank has ruled out the one course of action it could take to isolate the bankrupt countries: indicate that they are standing behind (French – though this is already assumed) Italian and Spanish debt with printing presses if needs be. It is just a matter of time. Until they do, there will continue to be bad news and the longer they leave it the worse it will be.

Finally, it should be remembered that the UK economy and even more so its stock market is tied to the USA, not the Eurozone. Our economic correlation to the USA is .95, almost as high as such things could possibly be. Thus even the disaster of Italian bond yields is probably less important than the Employment numbers from the USA, and the USA is recovering steadily as is the UK whose Q3 GDP numbers indicated a slight pick up from a summer stall.

This is why the UK stock market is 15% off August lows. Bankrupt governments in Athens and Rome just don’t affect business that much. Yet. A stagnant US economy would be much more worrying.

Wednesday, 2 November 2011


I'm growing a 'tache for charideeeee, inspired by, but independent of Movember.

look, it's been less than a week, OK?

The RNLI provide an emergency service without Government money. Volunteers save lives at sea, and millions of people make this one of the most popular charity causes in the UK (something Jonathan May-Bowles, the "activist" who got beaten up by Mrs Murdoch thinks wrong because it's "middle class"). The people have not forgotten that our island nation is totally dependent on seaborne trade, even if our political masters have: There are no warships patrolling UK waters. There are those who say quality services cannot be provided but by the state; the 4,500 Men and Women of the Royal National Lifeboat Institution demonstrate otherwise. Follow @outonashout on twitter to see just how often they are deployed.

The Just Giving page is here.

Medicins Sans Frontieres provide medical and emergency relief in over 80 countries, usually arriving before the news cameras and leaving long afterwards. They eschew photogenic disaster campaigns - or indeed any high profile marketing, but deploy themselves according to need, rather than media hype. They spend very little on marketing and even less on political lobbying, remaining dedicated to getting Doctors and medical staff to those who need it whether or not the cause is fashionable. They also undertake primary research into tropical diseases, which they make available to all, for free. I reckon my contributions to this charity amount to about the same amount as the proportion of my tax bill the Government spends on international aid. I know which bit does more good for people in desperate need.

The Just Giving page is here.

Neither take money from the UK, or any other Government, valuing their independence. I give to them willingly and feel good about doing so, and If the British Government didn't waste so much of my money, I'd give them both more. I'd like to raise £100 for each but any money will be good, and more is better.
3rd Nov

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