It is Obvious

Chris Rick has got altogether too much to say

Archive for June, 2011

I’m unemployed (6)

Posted by chrisrick13 on June 30, 2011

It is obvious: ho ho ho ho ho

There will be disruption at Jobcentres today…how will anybody notice?

It is obvious: ho ho ho ho ho ho – too busy laughing to think of a punchline

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Unclean

Posted by chrisrick13 on June 28, 2011

It is obvious: Greece is in default

I have to write about the most important economic event.  I cannot avoid it.  I am quite pleased that I have at last characterised the situation in Greece in a simple fashion and will take this chance to air it again.  If Greece cannot service its £340bn of debt today what persuades you that in 2 or 3 years time she will be able to service £500bn+ of debt at higher rates of interest?  (Update: there is a general strike in Greece today…how can anyone tell?)

So why do it if you accept that default is inevitable…and it is.  Why not default at £340bn rather than £500bn?  I come across the ugly word ‘contagion’.  I have not heard of anyone catching a disease from a bond position in a sovereign nation so I am not clear what it means.  The problem is that while all nations keep paying interest on their bonds, paying back due bonds at face value and borrowing more at similar rates of interest then the world economic system keeps working.  The problem is that if a country defaults, the losses have to be apportioned somewhere.  While it is ‘still trading’ losses can be ignored until they are realised or, unusually paid off.  The apportioning of the losses might well cause another entity to default.  The problem here is that the trade in exotic financial instruments (I don’t know how you tune a CDS and have not seen any music written for one) has a value many times the value of the base assets so it is not all clear who will suffer when someone defaults.  This means that the traders in finance all take a guess and keep clear of the most likely candidate for failure.  This is a self-fulfilling prophecy.  “If Greece is going to default then you should look at Ireland/Portugal/Spain/Italy their position is the same/worse.”  “Yes, and they also hold a lot of Greek debt so they are bound to fail next.”

So it goes.  In short order we revert to a barter economy.  The standard monetary item is a cigarette or a Mars bar.

However we have some very good people running things so it won’t happen like that.

One of the reasons for the actions of the BoE when Lehmans collapsed was the threat of cash machines being turned off.  The pieces of paper in your pocket are not money but money illusion.  They are promises to pay backed by confidence.  However if things do get dire then paper money will carry value for some time until it erodes to zero.  So not only should you have a cupboard full of baked beans and rice and a bottle of camping gas you should also have a stash of folding stuff somewhere.  There might come a time when you consider ten sheets of paper with ‘£10’ written on them a fair exchange for a loaf of bread.

It is obvious: Greece is in default we are just waiting for the moment when it is convenient for someone to declare it so.

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I’m unemployed (5)

Posted by chrisrick13 on June 27, 2011

It is obvious: I really do have better things to do with my time

Today a letter arrived telling me that I had not been accepted to receive Jobseekers allowance.  This is not means tested.  It is dependent on NICs (National Insurance Contributions) that I have made.  They said they based it on 2009 and 2010 when I made none.  There are two important bits if information here:

1.  As far as they are concerned I was not working then, so how could I make NIC’s?  If you do not have a job there is no way to pay a NIC!

2.  They chose 2009 and 2010, yet 1979 -2008 and 2011 I did make NICs!  Why did they pick on those two years?

I’m running out of ‘!’ today.

They did point me at an on-line form to use.  Unlike what they told me on the phone last week, I do not have to get the form from the Jobcentre, it is just one of the options…which they did not tell me.

I can see a huge industry built around jobless that I have just blundered into.  It provides employment for a lot of people.  Given that none of them are interested in getting me a job it is the most morally corrupt thing I have come across in a long time.

I am now in the process of collecting information about my job searching activities ready for my next appearance at the Jobcentre.  I am going to try copying a week from my last diary and duplicating it with different dates to see if they notice…they won’t.

I am determined to stay on the register.  I am not going to contribute to a reduction in the jobless count in the headlines next time round.   Given the woes just announced for a plethora of retail companies I am sure there will be no reduction, but I want to do my bit.

 

It is obvious: I really do have better things to do with my time…really

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Good idea (15a)

Posted by chrisrick13 on June 27, 2011

It is obvious: there is more than one way to skin at cat

I went walking with friends on Sunday.  There were many interesting aspects to it including the chance to put the world to rights and have another look at the Olympic site.  We covered 11.5 miles, 4 coffee shops and a pub to arrive back home with probably 1200 calories spent and not quite so many consumed.

We were discussing what to do to maintain the value of our assets or even what to do with our money…such as we have.  Howard is better prepared than I with a pension of a decent size, certainly greater than the average.  Of those that have pensions, which is about 50% of those working, the average is £160,000.  This gets you about £6,000 a year.  Howard noted that every time he looked, his pension pot seemed to be getting smaller despite paying lots into it.  I commented that the pension that the pot would buy was also shrinking as we are inconveniently living longer.

We are back into 4-cents-a-passenger-mile territory.  It means that on average we are getting £6,000 a year state pension and £3,000 on top of that to live on when we retire.  Could I live on £750 a month?  My council-tax bill is £220.  Heating and lighting average £150.  Food I could get by on £100…but it would be tough.  That leaves me £280 each month for everything else.  It does not work.

Averages are pretty tricky things.  I was using the mean.  Mode might be more interesting.  Of the 50% that have no pension then they are living on £6,000 a year and the savers are on £12,000.  So could I manage on £1,000 a month.  I certainly could and indeed could manage on £9,000 but it would be a very different life to the one I have lived for 61 years.

Still if I could get a job at Tesco stacking shelves for £12,000 a year then I’ve got £2,000 a month and things are starting to look reasonable…other than being in Tesco 40 hours a week.

But then we have the problem of inflation.  That comfy £2,000 a month is continually being eroded by inflation.  Pensions are fixed.  They don’t keep up with inflation.  Salaries are definitely not keeping up with inflation.  Perhaps you are then forced into the reverse of a mortgage.  Live in a rented house and live off your pension plus a chunk of the capital from the sale of your house…if you have one.

So I am back to my mantra of investing in yourself: live healthily, keep acquiring marketable skills and plan to work all your life.

I have one change to that given the rate of inflation of the price of food.  I have spent some time now losing 30lbs.  From my peak I am down about 40 lbs.  I think if I work at it I could put back on another 50 or 60 lbs if I eat a lot while food is cheap.  Then when prices really go up I’ll stop eating for a year.  Indeed the whole country should do it.  It will be more efficient to eat lots now and then all the country spend a year at home sleeping and watching tv.

It is obvious: there is more than one way to skin at cat, which ever way you choose you still get to eat it.

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Look at it this way

Posted by chrisrick13 on June 26, 2011

It is obvious: it is prudent to plan for the worst

It is OK we are going to pull through without any problems caused by a Greek default.  I know all will be well because Mervyn King has said that there is an 80% chance of a Greek default…and we all know how good he is at predicting the future.  It reminds me of the tale of two brokers interviewing for a job at a bank.  The track record of the first one was that his share recommendations were right 70% of the time.  The record of the second one was that he got his recommendations wrong 90% of the time.  They employed the second one.

(Update:  Peston was talking about Greece on Sunday and the likelihood of the Chinese bailing her out.  He dismissed the whole debate about a Greek default in an offhand way as a ‘when”, not an ‘if’.  The certainty of his tone was quite frightening.)

Shaun Richards should have worked for Noah.  Yesterday he observed that the infamous BoE fan charts of spreads on inflation now have to include 7%.  Given that the reality has consistently hit the upper half of the fan it gives a clear pointer.  Look out for those charts.  See what the top of the fan is each time.

I had it wrong in my previous blog.  The next tranche of Greek loans has not been agreed and it is dependent on an austerity budget vote next week in the Greek parliament.  What has been agreed is to lend Greece another £100bn later on.  Actually it is an agreement to agree.  Never mind.  These emergency loans will extend Greece’s debt from 340bn to 500bn…I think euros, but it doesn’t matter.

We have the situation that Greece can’t pay back its debts when they are at 340bn so it is lent another 160bn.  How will that change anything other than for it to have 500bn of debts in two years?  Also these debts are at much higher rates of interest than the 340bn.  In terms of debt servicing it is like taking her debt up to 800bn.

Alongside the loans is a requirement for Greece to increase taxes and reduce spending.  There is also a ridiculous thought that Greece might increase its productivity and GDP.  The Greek people are striking and massing on the streets calling for default.  Is anyone in Greece actually working?

Buying this extra time for Greece is being done for one of four reasons:

1.  In two years time the Greek economy will be strong enough to service debts which are effectively 2+ times the current level and have enough spare capacity in the economy to start paying back some of the debt.

2.  In two years time Greece will default, but all the banks/governments that have lent to Greece will have gained enough strength to survive writing off the Greek debt.

3.  The people in charge will have moved on, taken their golden handshakes and pensions and someone else can handle the problem.

4.  A miracle is expected.

It is like cornered rats.  As far as the Greek people are concerned why not keep the party going for a couple more years?  It really does not matter if you default £10 or £1000 pounds the effect is the same except you have had much more fun along the way with the £1000.  Indeed when you have defaulted it matters little whether the world’s financial systems have survived or not – you are no longer part of it either way.

So the people of Europe and (through the IMF) the rest of the world are buying food and drink for the Greek ‘party’.  Nobody in Greece will ever pay for tickets to get into it.

It is obvious: it is prudent to plan for the worst, I’m saving up for a Greek island for when they come on the market

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Nightmare

Posted by chrisrick13 on June 24, 2011

It is obvious: the potentials for problems are huge

Dr Bartlett, to make a point, listed two columns of events that might solve the problem that continued growth (of anything) is just not possible and that, in particular, economic growth is close to an end.  On one side he had nice things like improved medical care and public health reduced disease on the other he had the 4 horsemen of the apocalypse, at least 3 of them, disease, famine and war.  The horsemen were on the side that improved things for those left.

I woke up in the night last week and could not get back to sleep.  I went downstairs and put the Community Channel on tv that I sat numbly in front of for a while before drifting off to sleep.  I woke with a start to a monster on the screen.  It quite scared me.  It was a large picture of a Varroa mite.

These insects live on bees and are wiping out bees at a ferocious rate.  There is  only one country not affected at the moment: Australia.  There are mites around now that are resistant to everything that we can use against them.

Who cares – I don’t eat honey.  The trouble is if you don’t have bees you don’t have crops and then you don’t have people.  That is about as small a trigger at it is possible to get.

It is obvious: the potentials for problems are huge, humans are good at solving problems but a lot can happen between a problem and its solution.

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Happy anniversary

Posted by chrisrick13 on June 22, 2011

It is obvious: I still have a lot to say

 

I am now well over 200 posts and will reflect on that in a future post.

My instant feeling is that I am repeating myself.

I wonder how consistent I am?  At least I have thought through a lot of what I bang on about.  What I haven’t done is to work out what to do in these turbulent economic times.

It is obvious: I still have a lot to say…unfortunately

 

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I’m unemployed (4)

Posted by chrisrick13 on June 22, 2011

It is obvious: the Jobcentre is a farce

My phone call arrived.  The man on the other end asked what it was I wanted.  “Money,” I said.

We fenced a few rounds and he said that I had not made any contributions.  I pointed out that, as declared on my signing on, and evidenced for at least part of the qualification period by my P45, which they held, I had contributed.

He said that they did not have that record.  I know what to do in this situation a bit better nowadays.  I asked him what I could do.  He suggested that I claim on a means tested basis.  Then asked me how much my partner earnt and was it more than £16,000.  I laughed at him and said that I was interested in getting my information correct in his system.

Eventually as the last comment he said that I could appeal.  I indicated that this sounded alluring and asked how I do this.  “Oh you need to fill out an appeal form.”  I could see it coming.  “Where might I get one of those?”  “From the Jobcentre when you sign on.”

I put the phone down as they record calls nowdays.

There is a clear effort in this process to make it as difficult as possible to get money out of the system.  They must be trained to be this evasive.

There is clearly no effort made whatsoever to find you a job.

I am only in this because I am autistic and persistent.  How many people in my situation are there and how many of them bother to sign on or stay signed on beyond the first week?

It continues.  In two weeks I will sign on, I’ll get my appeal form and I won’t tell them I am going abroad.  I am unemployed and available for work I am determined not to go off the government statistics, I, at least, will stand up and be counted.

It is obvious: the Jobcentre is a farce –  I am reminded of the Ministry of Peace in George Orwell’s ‘1984’.

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The slippery slope

Posted by chrisrick13 on June 22, 2011

It is obvious: still, all but a few people can see that the emperor has no clothes on

I saw a Greek man interviewed on tv last night.  He said that he had no personal debts and had paid all taxes demanded of him all his life.  He was not going to pay anyone anything…particularly as he had just lost his job.  Unfortunately the government has run up 30,000 euros of debt on his behalf and all the members of his family.

I have a lot of sympathy for him.  Not least in that I don’t owe anyone anything.  Indeed my bill yesterday from EDF shows that I am banking with them but for some reason I get no interest on the money they are borrowing from me.  I pause at the ‘tax paid’ statement as I worked hard at minimising my tax payments.  I did it legally within the rules…and I’ll leave it there.

I have read a lot and people like Shaun Richards are essential reading.  There is a definite consensus.  All these efforts to ‘save’ Greece are, in common with many other efforts, only delaying the inevitable.  Greece will default – it is a matter of ‘when’ not ‘if’.  The efforts being made by governments and central banks are trying to hold things up so that the banking system can get strong enough to withstand the shock when it does happen.  Alas that strength is gained from sucking money out of you and me.

However any default is not a simple process.  It is also an unknown process.  On the face of it Greece owes £300bn and a bunch of banks that lent that money are going to have to put big losses on their books.  This will inevitably crash some of them and defaulting on their loans will cause others to crash.  However which banks will go is unknown as there are so many exotic financial arrangements in place that who ends up paying out (ultimately failing to do so and crashing) is just not known.

The concensus is also that default is better done sooner than later…given the failure of any central bank or government to make an appropriate response to the problem.

The final concensus is that the central bank governors, the likes of the head of the ECB and politicians will simply not tell us the real reason for what they are doing…which is obvious to everyone observing so why not do it?

It is obvious: still, all but a few people can see that the emperor has no clothes on, the only exceptions are the people who can actually do anything.

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I’m unemployed (3)

Posted by chrisrick13 on June 21, 2011

It is obvious: The Jobcentre can do a lot for you

I write software for a living when I have a job.  To get a job now you look online and apply online.  Each job description comes with a set of keywords.  Unless you have them all on your CV then there is little point in applying.  Indeed if you keep applying for jobs you cannot do then you will probably be blacklisted in the agents’ mind.  So I get notifications off 3 large job sites every morning with a very broad keyword search.  About 300 jobs a day.  However some were from yesterday, and some are just fishing for CVs – there is no real job.  This boils down to a 5 minute look each day and an occasional sending off of an application.  Few responses ever come from this.  So different was it just 5 years ago.

So I made up a job log for the last week which took about 10 minutes.  I put it into Excel.  I can edit that in less time and create a job-log for each signing on.

This morning hopped on the bus using my free bus-pass, and into the Jobcentre…without coffee.  Man in black tells me it is upstairs and “You know where to go.”  I responded that actually I didn’t.  “Ask when you get there.”  I managed that an sat in a chair waiting to be called.  The woman who interviewed me finished at 10:07 with the person before me and sat there.  At 10:10 she called me.

I showed he my log which she perused for a short while, signed and gave back to me.  She asked me to sign a bit of paper which I did.

Then I started.  “I don’t want to claim jobseekers allowance.”  She told me to fill in a form I had in my pack.  I said I wanted to stay registered as unemployed.  “Oh.”  Then she pulled my record up and told me that it was OK as I was not getting anything anyway.  I asked why not.  She replied that it was based on my previous two years contributions.  I pointed out that I had been working and contributing for the past year.  Indeed it seemed a little unfair as the year before that I had not contributed because I was unemployed and couldn’t.  (I was only receiving dividends as I could not see any reason to pay myself and make voluntary NIC’s.)  She gave me a number to call.  This number is an 0845 number…a good wheeze for dragging money (3.5p per minute) out of someone unemployed and living on £60 a week…or rather £0 because the people at the other end deemed him not qualified for benefits.

Then I asked about getting a job and local knowledge of the Croydon Jobcentre that I wanted to tap into…I really do.  She does not deal with finding jobs and pointed me at someone else.  I was over-staying my 5 minute allowance.

I persisted.  I’ve got a job interview just after I sign on next fortnight.  That brought a smile.  It is in the US.  Then my registration ends.  But I’m going for a job interview.  Does not matter I am leaving the country so my registration ends.

I sat and waited for the local knowledge guy to come off the phone and explained my wish for local knowledge.  It took a while for him to understand that I wanted to talk to someone about getting a job.  He went off and came back shortly to take me to someone else.

I explained my needs again.  She smiled and told me that they didn’t do anything like that.  I explained again about my wish to try and find somewhere small and local where I might be able to make a difference and not commute.  She shook her head and kept smiling.  I thanked her and left.

I wonder, why isn’t there someone pulling together lists of all the businesses in the area that the Jobcentre cover, getting their business type, size and other information.  Someone who can tour the local high streets and find all the companies not registered at Companies House, generally sniff out all the businesses that might employ someone and making up a huge list that can be sorted on job skills and given to all claimants?

With good experience I took the bus home and got a small black Americano with an extra shot in my local cafe.  They know me now and I don’t even have to order.

Back home and on the phone.  I explained that I wasn’t getting any money.  She said that ‘they’ should have told me why.  I said that ‘they’ hadn’t.  She asked how I knew.  I forbore to say that I hadn’t got any in my bank account but did say that ‘they’ showed me the screen.  She again said it was down to ‘them’.  I replied that ‘they’ had give me ‘your’ number to find out.  She asked for my NI number (NINO) and said that the reason was not coming up.  I have done a lot of the theory of negotiating so have a small handle on what to do.  I asked what I do next.  She then took my phone number and said that someone would ring me with an explanation before 15:00.  Note that I will only get an explanation of why I’m not getting the money.  I’ll be that they will have no power to do anything about it and will be very reluctant to advise me on what to do next.

This was particularly shoddy.  The woman tried her best to get me to go away with no information or money.  This is an obvious ploy to keep people from getting at money.  Only when I persisted and threw it back at her did I get her even to open up her computer.  If I had once taken responsibility she would have had me away doing something myself.  I am dismayed by this one.  There is an interesting phone call to come some time later today.

The first thing to note is that although I am not getting any money, and won’t take it if I get it, they have certainly dropped my effective hourly rate.

The second thing to note is that there is little point in me registering at the Jobcentre.  They will do nothing to help me get a job.  They are not in any way set up to do that.  They are not going to give me any money…I knew that at the start.  So what reason is there to shift myself down to the Jobcentre to register?  If I have come to that conclusion how many others have done the same?  How useful are the numbers for unemployed that come out of the Jobcentre?  How accurate are they?  Should anyone in government be considering policy decisions based on this information.

The third thing to note is that just because I’m interviewing abroad I’m off the register.  I will contribute to a drop in the registered claimants that week.  I only get back if I am prepared to take the longer route to re-registration which is an hour or more.  I have decided to drop into the Jobcentre before going to the airport.  I get back before I next have to sign on.  I will not tell them.

The fourth thing to note is that the process is not that bad an experience, certainly not as bad as it was when I first did it on leaving school.  They are just as useless as they were then.

It is obvious: The Jobcentre can do a lot for you but it does not include helping you to get a job or giving you money to live on.

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