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politicalbetting.com » Blog Archive » Cyclefree asks are Banks the new Unions?
politicalbetting.com » Blog Archive » Cyclefree asks are Banks the new Unions?
Back in the 1970’s unions were seen – and saw themselves – as a key constituency whom government had to listen to and consult. Whether beer and sandwiches were actually served at Number 10 was less important than the perception and the reality that governments felt that it was wise to consult the unions on industrial matters and wider economic policy. And this was done because of a desire to achieve consensus, to be seen as treating both sides of industry fairly, because union membership was large and strikes could cause significant economic and commercial harm.
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PS - Apologies for the horrific typo in my email.
As a view from the provinces, I'd agree entirely.
I'm going to go out on a limb and say it wasn't the trade unions that contributed the most.
Great post.
For the record, good fund managers are genuinely irreplaceable.
https://twitter.com/ianbremmer/status/822015758104489984
So, we're all stuffed.
https://twitter.com/dailymailuk/status/822387957856403456
Very easy to make money with that model.
Or maybe simply that robots wouldn't even bother with our industry!
Not saver deposits.
"It matters because the development of a modern society has gone hand in hand with the development of an efficient financial sector. It matters because without it much of what we want to do (save, buy a home, spend, invest, start a business, grow a business) cannot happen."
Adair Turner's book 'Between Debt and the Devil' talks about how what economists think banks do and what they actually do are quite different. He says that banking nowadays in advanced economies is mainly just about lending to buy property - and not about helping entrepreneurs or businesses to fund capital investment.
Makes me wonder whether we need such a large banking sector for economic growth...
Of course, the problem (or, in their case, possible benefit) of leaving the single market doesn't stop with the banks. While their shake-up may possibly be to the good, Brexit is a hell of a blunt instrument that is also likely to cause substantial damage to other industries. It may not be so bad if the banks are weakened, but what will they take down with them?
http://www.bbc.co.uk/news/world-middle-east-38689131
Don't passive funds outperform active ones in the long run?
So, you're basically paying up to get performance that's worse than a chimpanzee.
It's the culture of litigation and 'get-rich-quick' spivs which is the worst and I don't really blame the banks for it.
A very interesting article though.
I still query therefore what the % represents.
We do a lot of ML work, and I am constantly reminded of Douglas Adams Ultimate Answer / Ultimate question. Except that the answer isn't 42. It is "there is an 80% likelihood it is 42. What do you want to do now?"
That's why the current state of self driving cars is "There's a 90% chance that's just a reflection off the road, but given the 10% chance it is a van driving across the junction, you might like to keep your hands on the wheel."
https://www.ft.com/content/59151fe2-ad9f-11e6-9cb3-bb8207902122
(But for everything else I use Vanguard trackers)
edit: And - just to be clear - the 50bps is the TER
Nice article Cyclefree, I agree with most of it.
I've handed half of my trump winnings over to a chimpanzee to manage for a few years.
http://www.goldmansachs.com/gsam/docs/funds_international/fund_updates/monthly_fund_updates/mfu_indiaeq_en.pdf
The passive tracker funds are (apparently) not very good in emerging markets in general and india in particular. That's the advice i've been given anyway.
I didn't pay for that advice.
FLASHBACK: Ronald Reagan’s inaugural address: “We are a nation that has a government, not the other way around.” https://t.co/7uabng6MuK
The idea that she did have a choice is just propaganda pap. To its home market, any government negotiating with foreigners always wants to make itself look like the one that thumps the table and lays down the law. That's how the British government's talks inside the EU (not "with" the EU) have been reported for years: Cameron goes to Europe (where was he before?) and lays down the line to the excitable, incompetent or otherwise inferior bog dwellers abroad. This kind of extreme arrogance was a major cause of the Brexit vote.
Single market includes freedom of movement. If a government says mmm, lovely, we're going to let as many Romanians, Bulgarians and Poles come to live in Britain as want to, even if every suburban street acquires a shanty town at one end of it, just so that British companies can flog their stuff on the continent, the government would be out on its earhole within about five minutes.
Theresa May and her advisers have simply shown that they know that rain is wet. No cause for admiration.
.......the second was worse. That the good citizens of V-F-S-M had decided to ingratiate themselves with their American visitors by putting on a band and inviting several Americans in uniform to celebrate the affair.
It turned out to be a 50th anniversary of the US sixth fleet arriving in Villefranche harbour. God knows what they were doing here in 1967....... Looking for hippies?
http://www.usslittlerock.org/Villefranche/VsM/2017VsMReunion.html
The greater the contribution the more likely that sector - whether it is coal or banks - is to think that it is untouchable. A dangerous delusion for anyone or any sector to have. And dangerous for a government to allow that delusion to fester.
All those politicians from Thatcher on praising the City were no different to Macmillan saying: ""There are three bodies no sensible man directly challenges: the Roman Catholic Church, the Brigade of Guards and the National Union of Mineworkers" .
(Though it is said he never actually said it and it should be attributed to Stanley Baldwin.)
PS Your email - that's a fantastic typo!
I'd always thought the 'cemeteries are full of the indispensable' was Clemanceau - but apparently not:
http://quoteinvestigator.com/2011/11/21/graveyards-full/
Mr. Pulpstar, there was chatter a little time ago about a formula with self-driven cars. I think it was Heidfeld who said it'd be tedious because there'd be no element of human drama, or danger.
Put another way, the City is Spiv Centrale.
Also technology is increasingly taking out white collar jobs, the best way to make new tech work is to open a new office, with new people to work in new ways. trying to slowly convert old people and old systems frequently fails.
Then there is regulation, this has meant banks hiring in compliance for example and lawyer and accountants the same. These jobs create far less money and overall are a drain on the corporates - which leads to much lower profits. With lower profits comes a higher focus on cost. Also these jobs can be done from anywhere (...mostly, some compliance does need to be co-located with traders to stop abuse).
Brexit is a cover. Goldmans would move its back office to Eastern Europe anyway. Credit Suisse has been in Warsaw for years. The Euro-trading bit is horseplay to make it sound like some actual jobs will move, doubt they will but it sounds good. Most of this was going to happen anyway but blaming Brexit is the natural catch-all for all corporates currently.
Also the Banks would love to make their highly paid UK staff move to worse places where they can pay them less and have cheaper offices - an interesting battle to see who wins out. The Banks won the last big battle -the pay packets of Bankers are half what they were 10 yeas ago. Brexit is a good cover to try this on too.
As for New York, huge amounts of New York jobs are being slowly moved to Charleston and North Carolina. All for the same reasons above that affect London - technology allows for a better spread of the work in lower cost locations.
So, in short, London is going to lose a lot of jobs, often to the UK regions but also to other lower cost countries. This was going to happen anyway. London being London, other jobs will be created, probably in FIntech and Leisure - but also Hedge Funds and Asset Management where the back office needs are a bit smaller overall so the cost thing has a more marginal impact.
Also I quite like shouting at red lights.
Unlike in a train you can't read in a car. So what are you supposed to do?
(But maybe choose an asset allocator who builds a portfolio of trackers/ETFs rather than an active fund manager)
Mr. Pulpstar, Heidfeld was a good driver, just a shade unlucky (not unlike Hulkenberg, so far).
Those 8 them flip coins, and half of them get heads.
The remaining 4 flip again.
Now there are two left. To what do they owe their remarkable ability to flip coins and get heads? Is it something in the wrist? Perhaps they've trained long and hard?
Now, there are people over very long (20+ year periods) who have records where you can reasonably say "the chances of their performance all being luck are minute". But over shorter periods, chance (or more likely style bias) will be the dominant driver of portfolio.
Soon to be my ex business savings account.
Whenever people I know drone on about the wonders of flawless automation, I just tell them that the automation is written by people like me, and they shut up.
But from a purely technological point of view it would be fantastic. But only if you really like tech.
We can and should have been better than we were. It does the City no favours to give it a free pass from the requirement to apply some judgment and ask itself not just whether it can do something but whether it should.
If it ever got to the state where they could, it would be interesting to see how quickly the drivers would pick up on the flaws in the programming and learn how to beat the automation. And how quickly the programmers would be able to reprogram the machines to cover those flaws.
Until, that is, true machine learning comes in.
Unless remaining EU countries ban their companies from using London banks (illegal under WTO?), then EU compnaies will continue to acquire finance from London banks because it is the biggest and best market.
UK Banks who want to sell retail products to personal customers in EU countries will not be able to do so from branches set up in EU countries post Brexit without either equivalence, passporting or using an EU subsidiary. However, to have any significant presence in an EU country, UK banks have found they need to acquire a local bank with a local brand name - as HSBC did when they acquired Midland Bank in the UK.
The only significant impact on banking from moving out of the EU is if EU clearing regulators act politically and make it a reglautory requirement about where transaction clearing is done. Even so it may be done in 'the cloud' and hard to establish which geographical country the cloud resides at any moment in time. especially if blockchain technology takes off.
(Beta = overall market movement; alpha = movement away from the market average)