This sets the scene by copying the weekly update a fellow lecturer provides for his students.
It illustrates how bad things are and the dirth of leadership, but also that there is plenty of evidence and analysis on which rational actions could be based. It also shows what a great job the lecturer is doing - email robin.gowers@anglia.ac.uk if you would like to be placed on his circulation list.
Dear All,
I hope that this finds you all well as we approach the final busy weeks of the course. The feedback from Dr Booth’s talk on Tuesday has been superb. You have been very lucky to hear from one of the City’s top fund managers. Someone did say that they also expected Jerome to reveal the secret of making a lot of money – well you did experience part of that. It is clear that he is very well read. A course that I (and Margaret O’Quigley) have tried to get the University to run is about economic history. To understand where we are and where we might be going you have to have a knowledge of similar situations in the past. Jerome discussed a wide variety of theories and ideas. As one of my first slides in week one illustrated with Charles Munger:
"In my whole life, I have known no wise people (over a broad subject matter area) who didn’t read all the time — none, zero."
It went on:
"In my whole life, I have known no wise people (over a broad subject matter area) who didn't read all the time – none, zero. You'd be amazed at how much Warren [Buffett] reads – and at how much I read. My children laugh at me. They think I'm a book with a couple of legs sticking out."
Some more of his quotes:
"Once you get into debt, it’s hell to get out. Don’t let credit card debt carry over. You can’t get ahead paying eighteen percent."
Could also relate to Greece, Italy, Spain, Portugal, UK,……and:
"I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart."
This Tuesday we have the Vice Chancellor coming in so please be there for the 9am start on time, turn off mobiles, etc!! I have also received confirmation that Kate Barker will be coming in on November 22nd. Kate served on the Monetary Policy Committee of the Bank of England from 2001 to 2010. I will send full details of the talk on soon.
As previously mentioned this is an incredible line up of speakers. Very few (any?) undergraduate courses offer such a thing so please make the most of it.
The Endgame Cometh:
With Greece shocking the markets by announcing a referendum the € situation has got worse. As I write the Greek Cabinet are meeting to decide whether to back their Prime Minister or not. I have repeatedly mentioned that Greece will default – now the question is by how much more than the 50% agreed last week (90%?) and if they will leave the €. This truly shows the importance of economics – good economic policies improve most people’s lives. Bad policies do the opposite – they ruin people’s futures, hopes and dreams. Never forget the human side to what is going on. The Greek population are facing either a slow torturous death within the € or a sudden one back with the drachma.
We are living through events that will impact us all and future generations. The future prosperity that we hand down to our children and grandchildren could be worse than what we currently have – the stakes are that high. We really do lack leadership and coherent ideas to help us get through this situation.
As mentioned the bond market will be a main force in deciding our future. As I write this things do not look too good. Worries about a disorderly default in Greece has led Italian 10 year bond yields to rise to 6.399%. This is a euro era high and 4.59% above the yields on German 10 year bonds. This spread above the German rate is at levels that make Italy’s debt repayments unsustainable. Also worryingly the spread that France pays above the German rate has widened to a euro era record as well, 1.35%.
The G20 leaders in Cannes today will have a lot to discuss!!
A great source on the global economy and crisis is this web page from the BBC:
It is not all bad news – even for some banks. Take a look at what Standard Chartered have announced:
For you marketing people out there, how a big brand is linking in with Facebook:
Regards
Rob
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