It is Obvious

Chris Rick has got altogether too much to say

Archive for December, 2010

Invest in yourself

Posted by chrisrick13 on December 27, 2010

It is obvious: uncertain times are ahead.

I have been saying here, and to anyone who asks me, that you should invest in yourself.  I have to admit that if I could think of anything to invest in other than myself then I would name it…but I can’t.  Cash is no good with inflation and interest rates as they are.  Houses are never any good.  Too late to get into gold.  I don’t understand clever financial instruments.  I don’t trust Johnny foreigner.  So invest in yourself.  Make sure that if 20% of the population are out of work you are not one of them because of your work ethic and your skills.

My wife is going to be booted out of her job as a literacy consultant.  July and she is gone.  No matter that her skills are in big demand…nobody has any budget to buy them.  She can teach in a classroom and did for many years but for her salary any school can employ two newly qualified teachers.  No matter how good my wife is (and she is) she can only stand in front of one class.  Her raft of qualifications count against her.

It is even worse as she is two modules short of a psychology degree at the OU.  (Not a sandwich short of a picnic which I recently joked within punching distance to my cost.)  For any number of reasons, none of them money related, she is not doing a module this year.  Either she will find employment and do one next year or with no employment she will hit the remaining two in one year.

This year the OU brought forward the registration date for modules for 2011.  It used to be end of February in the year they were taken, but now it is December 20th of the previous year.  Luckily, events resolved themselves for us before that date and the decision was made.  However I said to her that I thought that OU registrations would fall off a cliff this year.  It is the best part of £1000 for a full module with a summer school.  I thought that a lot of people would choose to wait and see what happened and just slip a year’s break into the middle of their endeavours.  I also said that I would like to make a public information request and get the numbers of registrations at the OU for this year and the 10 before it.

I predicted that the OU would start advertising and would move the registration date back.  A lot of people take the Christmas holiday to sit back and reflect on the next year, plan a holiday and decide on their OU options.  So setting the deadline before Christmas was a bad strategy even if the economy was in good shape.

To my delight, I heard today that the OU has pushed the registration date back into January and I have just seen the first OU advert for its courses on TV.  Pushing back was ‘because of the recent snow’ (sic).  Why are they advertising if people have only been delayed because of snow?  Is it the wrong snow for internet?  If you are stuck at home wouldn’t you maybe take that as an opportunity to sort out your OU stuff between making snowmen and clearing your path?

I want the OU to survive it is an excellent organisation…but it is going to be a very different organisation very soon.

It is obvious uncertain times are ahead…no, actually, they are very certain.

Posted in Uncategorized | 1 Comment »

My word is my bond – update

Posted by chrisrick13 on December 21, 2010

It is obvious: there is a lot of information comes at us.

Since my last entry I have read that the government borrowed £23.3bn last month.  Did you realise that is £466 on your behalf.  That is up on last year and it seems that the borrowing target of £148bn (have you got your £3,000 ready) is going to be exceeded.

This is by a government that is being pilloried for the cuts it is making.  Cuts I see no cuts.

As our national debt is at 65% that 10% extra borrowing takes us perilously close to 85% of GDP.  Indeed GDP is not galloping ahead and might even start to come back to meet the borrowing.

Why is 85% important?  That is the level at which the consensus is that the country is now in a trap and cannot avoid default on its debts.  It varies from country to country.  For example Japan can easily manage 3 times that because of its national savings rates.  Alas we can’t.

The whole point about cuts is that if we don’t then what will be done to us is a lot worse.  If we do cut and still default then we have the worst of both worlds.

My only hope is that the cuts have not really started and take a while to have an effect.

Another update, but not new stuff.  The money lent to the banks in the crunch is £300bn so that’s £6,000 each.  They repay it over the next 3 years which means that we need banks to thrive…but everyone wants to bash the banks.  Perhaps they should be asked if they want their 6000 quid back or not.  By-the-by they won’t have much to spare, as a result, to lend to anyone and that means mortgages, just in case you were daft enough to think about buying a house.

It is obvious: there is a lot of information comes at us and it is tricky knowing what to ignore and what is correct.

Posted in Uncategorized | 2 Comments »

My word is my bond

Posted by chrisrick13 on December 21, 2010

It is obvious: everything has a value

The English billion is a million million or 1,000,000,000,000.  It fell out of common use as it was too big a number to ever occur (sic).  So we use the American billion, which is 1,000,000,000 and trillion which is the English billion.  Very sensible.  A few short years ago we were in awe at numbers measured in the millions, at least as far as economics was concerned.  Now we are blasé about billions and trillion is coming into common use.

As these numbers blur it is useful to be able to grasp them.  I have written about ‘4 cents a passenger mile’.  You need to be able to go both ways on a number.  So when the government spends £1bn what does that mean to you?  It is not accurate but close enough to say that it means that they have come round and collected £20 from every man, woman, and child in the country.

So the ‘visible’ national debt is nearly £1tn which is £20,000 for every one of us.  If the interest is 5% then that is £1,000 for every one of us every year or £20 a week.  I’m collecting on behalf of the government so you can send me your £20 now.  If you want to do that on a household basis then you need to triple those numbers.  (There is also a not so visible debt, that we have run up as individuals, that is the unfunded pension commitments of business and government, and PFI, all of which triples those numbers again.)

So the government has spent £200bn on QE.  That is the process of buying assets.  I assume that there is a return from those assets or they would have been free.  At least there was a return when they were bought…  That is £4,000 of my money or £12,000 from my household.  At 5% there will be £200 coming back to me each year.

In fact the government has been throwing a lot of my money about to buy things.  It has lent £8bn to Ireland (£160) – we won’t see that again.  It puts £8.5bn in bribes (foreign aid) into foreign economies every year (£170) – we won’t see that again but it might come back in other ways.  There are plenty of other purchases I could mention including large stakes in banks.  However I am interested in QE and also the bond purchases by not only the UK government but the ECB and the Fed and a number of other national institutions.

The UK has spent £200bn on QE.  This was spent buying bonds…I think.  It was not spent on buying foreign holidays for the cabinet, expensive meals at the Savoy, jewellery for girlfriends of MPs or even cleaning moats.  These are all things where, once bought, the resale value is very small.  What was bought was an asset that has a well defined value that can be recovered at some future time.  They are acquired assets not expenditure.  Investments even?  Anyway that will be £4,000 from you thankyou very much – I’ll take a cheque.

Can you imagine the sharp intake of breath that will occur when the government comes along to a bond dealer and offers up all the bonds it has bought for sale?

It is obvious: everything has a value which seems to be high when you are buying and almost zero when you are selling.  If you are government it isn’t your money when you bought it and it certainly isn’t when you sell it.

Posted in Uncategorized | Leave a Comment »

Stand on Zanzibar

Posted by chrisrick13 on December 20, 2010

It is obvious: we can.

I have been wandering my blog looking for a reference, but I can’t find it at the moment.

I am struck, as I was at 100 blogs, by how good a few of them are…a very few.  I am also struck that there are a small number of themes approached from different angles.  I am repeating myself.  At least I am consistent…consistently boring?

The blog I was looking for was related to the rule of 70.  I wanted to put that American prof. in my hero list.  He eloquently explains how exponential growth predicts much for us in simple fashion.  I will do him again as a hero when I find the blog.  I wanted to relate that simple process to the comments made by Bill Howard, which coincide with my views.  They concern world population.

I spend a lot of time wandering Dorset.  This is a reason you should not believe me when I say I am poor: I have a house there.  Dorset has no motorways and no cities.  The county town is exactly that: a town.  Dorset is not wild and ragged like Cornwall can be, North Yorkshire and Cumberland are, but it is rural.  As I walk the paths and bridleways I come across isolated houses.  Many are derelict.  I often turn a corner by a hedge and am confronted by a row of cottages.  Sometimes derelict, sometimes lived in, sometimes, obviously converted to holiday homes.  I also walk into villages.  Maybe thirty houses not near anywhere.  There is no shop, no pub, and no real reason to be there.  They are there because 100 years ago large numbers of our population worked on the land and needed to live close to where they worked.  Over that 100 years nearly all the jobs have gone and all the people have migrated into the towns (and cities if you are not in Dorset).  Much more food is being produced with few people doing it.

What did those people, no longer on the land, do over the 100 years?  They built bridges, roads, railways, sewers, dams, power stations…cities.  Apart from them falling down and needing to be replaced there is no need for the vast numbers of people to do it, machines can manage it with few people.

So as a race we keep increasing the number of people on the planet (mea culpa) what do we need them for?  All they do is consume so that our economies can continue to expand and keep the world order growing.

What we did 150 years ago and possibly finished doing 50 years ago is just now being replicated in China and India.  Countries with more than half the world’s population are seeing it move from the countryside to the cities.  Except this time there is no industrial revolution it is already here.  So they follow a different track in their development to Western Europe and North America.

Where does it all lead?  I cannot answer that accurately or in a useful fashion.  What it certainly ends in is a consumption of available resources and a sudden and violent end to that world order.  The Chinese economy is expanding at 7% per year.  by the rule of 70 it will double in 10 years.  India is on nearly the same course.

I can see you now going back to my blog about using curves to predict the future and complaining about my inconsistency.  But that is my point.  I don’t expect growth to continue at that rate.  It cannot.  We have enough trouble managing our national economies and the world economy where it is all predicated on continued economic growth.  We have never tried to do it with zero growth or, as will happen soon, shrinkage.  If you think those two expansion rates unlikely I will will say to you that with just 2% world economic growth our yearly production (and therefore consumption) will double in 35 years, and along the way will have consumed a heck of a lot.  Were it to happen that would imply, almost certainly, that world population goes from 4bn to 8bn

I intend to live to 90.  So even for me that means getting used to a new way of living just when I have spent 80+ years getting used to the old one.

It is obvious: we can and that is all we will ever need.

Posted in Uncategorized | 2 Comments »


Posted by chrisrick13 on December 15, 2010

It is obvious: we (my wife) spends too much money.

Yet again I will bleat about not having enough money stashed away for my retirement.  Which is a lie.  I have plenty, it is just not as much as I want.  I sometimes wonder how much would be enough.  Standing here with £X in my savings and pension would £X + £1mn be enough or £X + £5mn do it?  How badly do I need that Ferari?  I have had a lot more money flow through my hands than most, but I have held on to some of it.  I have not done enough to help the starving millions in Africa but I have made efforts to ensure that I am not one of the starving millions in Europe.  We will see how true that is in coming years (or months).

So must it be with government.  I wonder what we would be thinking if there was no deficit and small debts but we had open sewers in the streets, still ran steam trains (I wish), smallpox was rife, there were no libraries, etc.  It was much the same at home:  I have put £10,000 into my pension this year so, children, there is no holiday this summer.  I couldn’t do it.  If the government can borrow money to build a hospital then it will: it is better to have a debt problem than dead people.  It is an easy moral argument.

We are effectively adopting an old system where we have lots of children and end up in our dotage with no assets as a consequence but relying on our children to survive.  They will do the same with their children.  Each generation supports the previous and the next.  It works.  So it is immoral for a government not to run up debts so that it can get the best for its people now.  Alas, there is a balance point because the debts have to be supported.  This is when no more money can be spent on new things because the loans for the old things have to be repaid and interest paid on those loans until the loans are repaid.  What has happened is that the benefits have been brought forward and many lives saved or improved but there inevitably follows a period of stagnation where the debts incurred are dealt with.  If the money was a one off spend for perpetual benefit then it is an easy justification.  But what about building an extra hospital on borrowed money.  There will be use from it for 30 years when it will fall down.  But in 30 years there will be people alive still paying off that debt with no benefit.  Then the moral case is not so clear.  However I might just act in my own best interest.  This will force the politician I vote for to do the same.  The hospital will be built.

Good grief!  As someone to the far right of Ghengis Khan in my views, have I just made a case for communism?  Maybe a case for a benevolent dictator?  It is not my quote but democracy is far to important to be left to the people.

It is obvious: we (my wife) spends too much money which stops me buying a ferari.

Posted in Uncategorized | 5 Comments »

It starts here

Posted by chrisrick13 on December 14, 2010

It is obvious: cuts are coming.

After a break to have children my wife, who is a teacher, trained to become a specialist in speech and language.  She took a job in the reading centre in Croydon teaching children with language problems.  She also qualified to teach children with learning difficulties to read.  After a long time in the reading centre she took a job as an area SENCO teaching children with special needs.  This summer she resigned from Croydon LEA to join a government centrally funded scheme to learn to become a reading recovery expert and gain the skills to teach teachers.  She saw this as a way of increasing her effectiveness.  I warned her that it would be cut and she would not even finish the two years.  She did it anyway.

Last week she received two letters offering her volountary redundancy and this week it was confirmed that Croydon would not continue with her course after July.  There is a huge investment and a large potential return on that investment that will not now happen.  Money wasted.

But that is what cuts are about.  They are savage and brutal.  They have to be.  There is no such thing as ‘gentle cuts’.

This will happen everywhere.  A lot of money spent that was effectively wasted.  It raises the question in my mind as to why the Labour government did it.  It was obvious that overspending was taking place and there would have to be cuts.  Indeed it is well known that in the months leading up to the election Labour went out and spent and committed at an ever more ferocious rate to make the cuts even more painful when they came.

I have been trying to think why:

1.  They wanted to get the country into a mess from which only socialism could retrieve it.
2.  They wanted to leave a mess for the Conservatives to tackle in the hope that they would be blamed.
3.  They had some rosey-eyed, Mikawberesque view that they had to do it and ‘something would come along’.
4.  They were just incompetent.
5.  Something else that is beyond my imaginings.

Yesterday the cuts in local government were announced.  There are dozens of meetings being held in the Croydon LEA by staff, HR, and unions.  the atmosphere has been created such that these are not fight-the-cuts meetings but working out an orderly exit of vast swathes of people.  If you have a child with reading problems be assured it will be allowed to fail…unless you have deep pockets.

Adding to earlier entries, I was horrified that the foreign aid budget was being protected.  I still am.  It is just bribing with a politically acceptable veneer of do-goodery.  The budget is ₤8bn…who cares.

It is obvious: cuts are coming that will affect you in ways you never thought possible as well as all the ones you had thought of.

Posted in Uncategorized | 1 Comment »

How wrong can you be?

Posted by chrisrick13 on December 13, 2010

It is obvious: I know a lot.

I spend a lot of time, much more than I should, surfing the tv channels to find something to watch.  Why don’t I just switch it off?  One day I will work up the courage.  I end up watching 24 hour news, if I want to reminisce, or police action programs.  I am constantly amazed by them.  I watch a pair of robbers steal a car, drive across four counties smashing into many cars and police cars, finally writing off the car they are in before running off.  They are mostly caught and then get…100 hours community service or a stiff warning or being banned from driving.  I know if I did it I would be locked up for 20 years.  However I have found two heroes: Razor and Sharp.  There is nothing politically correct about a German Shepherd.  They chase down criminals and it is interesting seeing what the habitual offender does: they stand stock still.  If the criminal is relatively new to the business they have to be warned, “NO SUDDEN MOVEMENTS OR THE DOG WILL BITE YOU.”  The experienced ones already have teeth marks in their arms.  I love it.  Here is justice on the streets.  Razor is the main man!

So why am I disappointed when the robbers are not put away for 20 years or have their hands chopped off?  Why am I delighted when Razor tears a chunk out of someone (saves on food bills)?  An eye for an eye?  I want to see bad guys suffer?  I want to see an integrated programme of training that persuades them not to offend again?  I am very sure that without threats of punishment there is no reason to obey any law.  I see it everyday: no parking signs on my local high street that are never obeyed because nobody is ever punished for for disobeying them.  I believe that the only way to get people to obey the rules of society (the laws) is to give them a stake in society and goodness, we’ll never manage that.

So prison is not about rehabilitation.  The increasing numbers in our jails shows that although it is a deterrent it is a poor one.  What is the purpose of prison?  I heard a third reason yesterday.  It never occurred to me.  Prison keeps the dangerous people away from the general public.  It is the modern day equivalent of deportation to Australia.  Instead, with cuts, they are going to be let out because we can’t afford to keep them there.  I don’t care that they learn all sorts of skills in there – they won’t  be round my house practising them if they are kept there.  But the cost is being moved on to the general public.  I will need to buy a very old car, another Land Rover.  Put some serious locks on my doors and windows and start doing Aikido again.  I’ll also write to Police! Action! and see if Razor wants to retire to suburbia for all the steak he can eat and an occasional arm.

It is obvious: I know a lot less than I think I do.

Posted in Uncategorized | Leave a Comment »

Negotiate (2)

Posted by chrisrick13 on December 9, 2010

It is obvious: negotiating is easy.

The BATNA is an acronym created by Fisher and Ury in 1981.  It stands for: Best Alternative To a Negotiated Agreement. Creating one is an essential part of your preparation for the negotiaton.  BATNA’s were done before Fisher and Ury, but they put a neat name on it and defined much of the thinking around it.  They did a great service for people not expert at negotiating.

Without a BATNA there will be a fear of failing to reach agreement without knowing what the consequences are.  You will be much more likely to agree to something that is not in your best interest which can simply be bettered by not negotiating at all.

At every stage during the negotiation you can compare where you are with your BATNA.  You can continue to negotiate until the current agreement is better than your BATNA.  You don’t have to think and you don’t have to worry about the consequences of not agreeing – you have something better.  This puts you in a very strong position.  You will genuinely be able to get up and walk away from a negotiation that is poor for you.

During the negotiation you should keep your BATNA secret or you will find yourself always arriving at your BATNA in any negotiation.  There is always a better deal out there and you want it.  By the same token you should try and find out the BATNA of the other side – it is an essential part of your preparation.

Of course, if your BATNA is something you absolutely must improve on then you are not as strong as you might be.  At least this will help you work out what you really want from the negotiation and the extra things you need to achieve.

Once you have reached the stage where the agreed items are better than your BATNA then you have to start thinking.  At this point you are invested in the negotiation and you do not want it to fail.  This weakens you and will change your perspective.  However you must not let the other side see any change in you or they will be well on the way to discovering your BATNA.

The BATNA: an essential tool for all negotiators.

It is obvious: negotiating is easy to do poorly.

Copyright © Chris Rick 2010

Posted in Negotiate, Uncategorized | 2 Comments »

Words (2)

Posted by chrisrick13 on December 9, 2010

It is obvious: swimming up-stream is hard work.

I am not one to pontificate on language or grammar – a very black kettle.  I am a good indicator though.  If I can recognise a problem then it must be one.  The word I have this time is one in transition and comes from my own area of work:

Program…or is it programme

If you are reading this with a US spell checker in place then programme will be underlined wiggly red.  In the US they do not use the long version.  In the UK, supposedly, we use program for computer code and programme for all other cases.  This is not a big problem as the context will usually define the word.  However a friend of mine was arrested going into a banana republic for having ‘programmer’ as occupation on his passport: they were not having any media types coming into their country and producing damming tv programmes.  He is now a ‘software engineer’.

The new words we need in our developing society need much more care in their definition than we ever give them.

It is obvious: swimming up-stream is hard work but exercise is good for you.

Posted in Uncategorized | Leave a Comment »

Good news (1)

Posted by chrisrick13 on December 9, 2010

It is obvious: good things are happening the world over.

I’m desperate to write about good things.  Not only does it give a counter-point to what I normally do, it is so depressing digging out morose stuff all the time.  Alas I have a bad twist on this good news.  No matter it IS good news.

Yesterday there was a splash…in the Pacific.  It was the return of a capsule launched into space some 4 hours earlier.  What makes it good news is that it was done by a private company.  They did it first time and it cost much less than comparable national space projects.  NASA had a hand in funding it and it is a complex story, but they did it.  It puts Branson’s plans into perspective.

Our future lies in the asteroid belt and we are as a race now so overspent on our capacity to get into space that we are not likely ever to get there.  However this does offer a little bit of hope.

There isn’t a Bill Gates building a fusion reactor in his garage, but there are a lot of ingenious people doing stuff on a much smaller than national scale and doing it cheaply and with diversity.

What depresses me is that I only know this story by chance.  Why is it not splashed all over the news?  At the least you might think that the 24 hour news programmes would be glad of  a snippet like this to fill some air minutes.  There was even video footage available.


It is obvious: good things are happening the world over but you have to work hard to hear about them.

Posted in Uncategorized | Leave a Comment »