The spring pops over and beckons

I was going to write today polemics to a next article about Polish pension system, but the ongoing vernal episode has brought me on putting off the mundane things and told me to entertain you with some pictures.

The thaw began on 18 February and according to weather forecast is going to last until Wednesday, but ten days turned out to be enough to let the layer of over fifty centimetres of snow melt away, fortunately without causing a flood.

In the first days of thaw temperatures were only creeping above zero, the considerable warmth came this week. In the afternoons Warsaw saw temperatures of almost ten degrees plus sunshine.

The snows have melted quite quickly. Above – the same place, ul. Zimowa in NI on 21 February and on 27 February. The second picture looks rather bleak compared to the first one.

Above – what I observed on the snow last Sunday. On fields, where the snow had stayed intact wind or some other natural power formed beautiful ripples. The picture to the right was snapped from the same place, though in a different direction. Watch out for the turret of the church in Stara Iwiczna in the distance, strewn bottles and the puzzling mist behind the row of the trees.

I took the photos below yesterday. They generally display nothing but the fabulous riot of colours at sunset. Magnificent, isn’t it?



Today beautiful weather drew me for a morning longish meandering around Piaseczno. Right – an alley running between blocks of flats built in 1960s. The foliages of the trees have been cut down. The pavement could have not been cleared for the whole winter, almost no one around, looking towards the shining sun.

Right – a bazaar in Piaseczno. It will last a while before those piles of snow disappear. And below a tower block whose existence I discovered today. It does resemble other Polish buildings of that type. My first association Was "Canada".



Right – a mound of dirty snow, mud, grit and ground at the corner of ul. Sikorskiego and al. Róż in Piaseczno. It must have been mammoth if even despite the thaw and being exposed to sunbeams it remained that large.

And next to it… Is it abnormal to see rubbish scattered around like this in a civilised country or is it abnormal to snap it and post on a blog run in a foreign language?

Then I strolled through the estate where I used to live. I wonder how it will look in thirty or forty years. Will it turn into a shanty town dwelled only by the poor and the dregs of society? A square metre of a flat in one of such blocks costs now around 6,000 zlotys. Two times too much!

Where are the limits of freedom?

“On your knees, dog!”, a young man with a face untainted with a single thought aims a gun at a policeman. What does it look like? A scene from a film, a passage from a next coverage of tragic event in Warsaw? No, a new advert which appeared in one of Polish skateboarders’ monthlies. As the author of the picture and co-owner of a textile company which ordered this ad, there is nothing reprehensible, since the idea of threatening a policeman with a gun hatches in every young skateboarder’s head.

Now let’s take his reasoning apart. He claims a normal teenager dreams about killing or at least humiliating a policeman in service. The taste of revenge is for sure sweet, so every mentally healthy person would get their own back on their persecutors – is this how it works.
It’s just an innocuous joke, remember about it when you see a similar scene on a street. Just pass by and don’t try to react. Let guys have fun.

Everything has its limits. Everything but the human folly. And what are the limits of freedom? Other men’s freedom and, in any society, generally accepted social norms. In Poland, although it is still catching up with the West, people generally agree that people who aim guns at policemen are criminals.

So what can be done about this. The advert was published only in a niche magazine, I don’t know whether it has to comply with ethical standards of advertising. In my view the punishment should be the most severe, what in my books means financial. Those who have come up with the idea and those who have allowed it to be published should be fined heavily. If those retards who had thought it up had to pay one million zlotys for this stupid ad, the likes of them would think twice before they would something equally silly.

Should I be proud?

My school has announced on its website two professors from Warsaw School of Economics had been appointed as members of Monetary Policy Council. My university employs a lot of outstanding experts in monetary policy, like professor Krzysztof Rybiński, but for no apparent reason the current president decided to pick some of his buddies and once again set personal relationships above competencies. The previous president also for no apparent reasons designated renowned specialists – Andrzej Sławiński, Andrzej Wojtyna and Dariusz Filar.

Some time ago I evaluated competencies of Zyta Gilowska, there’s nothing I can add about her. None of fellow students with whom I discussed the nomination of Mr Glapiński and we our views simply square – he lacks knowledge, but is a close friend of Mr Kaczyński and no one else would have appointed him. He will have to learn a lot.

When it comes to Mr Kaźmierczak, the matter is a bit more complex. His field of academic research overlaps the issues of monetary policy, but there’s one significant fact about him that might have been seen as a merit by Mr Kaczyński. The new member of monetary authorities has never been a reputable figure among economists. His opinions are not appreciated, few people heard about him. He publishes in Gnash Dziennik, a newspaper of Father Rydzyk’s empire. I may be biased against him, as his dovish views are totally dissimilar to mine. He doesn’t see inflation above target as a danger for economy, it’s even conducive to economic growth as he says.

Inflation, contrary to what he advocates has to be handled carefully. It hazardously easily spirals out of control. As soon as it gets noticeable for customers, their inflationary expectations rise, so they hold out for pay rises and then when they get it, the economy is on the verge of a slippery slope.

In Poland a relatively tight monetary policy prior to the crisis helped our country avert a financial meltdown. Monetary authorities, mostly Mr Balcerowicz, who was a governor of central bank at the time were harshly criticised for the policy they had pursued. Unlike some other countries.

As professor John B. Taylor (the author of famous Taylor rule) points out in his latest interview for “Polityka”, one of the main causes of the financial crisis were too low interest rates. He also blames central banks and government for inapposite responses and openly condemns monetary policy run by Alan Greenspan and Ben Bernanke. This short interview might be helpful in understanding the origins and mechanics of what has been called the worst recession since the Great Depression.

Investments and morality

The concept of moral spine, when taking investment decisions, usually neglected, is strongly emphasised in principles of Islamic banking. It seems it is one of sparse significant examples when ethics affects financial system on a level of banks, brokerage firms and other entities that are involved in large-scale banking operations. Their codes of practices forbid earning (excessive) interest, investments in shares of companies whose core business is deemed to be unethical, or trading in derivatives which are said not to be a real money. As you drill down in the superficial description from wikipedia, you will see the system is full of loopholes that enable to get round the rules.

And in our non-Islamic world, are there any rules? I worked out a short (and subjective) list of investments I would refrain from. I wouldn’t list there derivatives as Muslims do. Those financial instruments have been conjured up for three purposes: to hedge risks, take risks and speculate. As long as you don’t beg anyone for help because you have lost your capital this investment is ethical, but if try to socialise the losses or shift the costs of your flawed decision to someone else, who is not guilty, you are a typical product of modern “distorted capitalism”, “remnant of what used to be capitalism”, or whatever we have witnessed during the last financial crisis is. This stance can be described shortly: as long as your business goes well you tell the state and regulators to mind their own business, when your house of cards collapses, you seek their protection. A fine example of hypocrisy…

The first type of what I find unethical is not even an investment, because what I disapprove of is a pure speculation on real estate. If you buy a house or a flat to live in it, everything is alright, even if its price soars. If you buy a flat to pass it on to your child who is now in a nursery school, you do not do anything wrong, even if you will be subletting it for twenty years. But if you buy it only to sell it in a few years and take profits, I denounce your investment. By taking such a decision you contribute to rising real estate prices and make flats less affordable for other people, who will become slaves of mortgages for next thirty years. Dwelling is after all one of basis needs of a human being. Speculation deprives many individuals of their chance to have their own one.

Your own flat or house is your biggest financial asset, so it is an investment, but I wonder what would happen if mortgage became almost totally unavailable. How much would flats in Warsaw cost? The scenario doesn’t bring a picture in bright colours – flats would be bought be rich people who would let and the rest would have no choice but to rent it, rents would go up then. Not a good future prospect anyway.

The second type is a pure investment, unfortunately very common and used as a benchmark of risk-free rate of return. The government bonds. You keep your money in a bank, bank pays you interest from what it has earned from other clients – customers whose folly made them take out consumer loans or enterprises which had taken out loans to develop their businesses and have a higher rate of return than interest paid on the credit. This system of brokerage works well, mostly as the bank is the institution which takes a risk. Meanwhile you pay taxes and your neighbour buys government bonds. Interest he earns is financed from taxes you pay on what you earn as a worker as well as from your capital gains tax.

If you want to invest your money, do it on the market, let it work for a private business, don’t sponge on fellow taxpayers. State is not a saving bank, it’s role is to maintain law and order, provide public goods, depending on you economic views its role should be limited to minimum or cover a spectre of spheres like education, health care, social security. But it should not be a participant of financial markets. Another story is that it also should not spend more that it can afford to and consequently issue bonds. But as a balanced budget idea enthusiast I can talk my head off and I bet the day I die some of my neighbours will have their money invested in gilts. Damn it!

If I have touched upon taxation, I cannot leave out the new popular method of tax avoidance – antybelki – bank deposit which are constructed in a way that you don’t have to pay capital gains tax – either it is an insurance policy or the interest is paid daily and if it doesn’t exceed 2.50 PLN, calculated tax is rounded down to 0 PLN. It is absolutely legal, but if moral? You will save some money, but state budget will lose its revenue. Who will lose? A monster called “State” who lives in a cave and gobbles poor taxpayers? No, your neighbours will lose, your friends will lose, your family will lose, you will lose and the next generations will lose. They will have to pay higher taxes, because current lower revenues means higher budget deficit in the future. I realise the workings of Polish state are far cry from perfect, costs of maintaining bureaucratic apparatus are tremendous, but many public goods are finance from public purse, if you want to consume them, you shouldn’t evade paying taxes. (though the rational decision is not to pay taxes, because you’ll get them anyway).

My apologies to my readers. In the second year of blogging posting frequency will not be as high it used to be. But I pledge to try to focus on quality and publish at least two concise posts each week. I’m simply more busy this term and have less time for writing (what doesn’t mean less time for musing about politics, economy and society).

A small ticket and mounting troubles

Actually I don’t know what prompted me to buy a ticket for my father in a ticket machine rather than in a civilised way – at newsagent’s or somewhere else. It wasn’t the first time I did it, but for the first time the machine spewed out a totally illegible ticket. The situation took place on Wednesday but I put back taking any action to deal with the flawed ticket until yesterday.

Characters of this drama:
L1 = Lady no. 1, from a Passenger Service Point at Metro Centrum station
L2 = Lady no. 2, from a Polish Mint consumer service office at Metro Świętokrzyska station
L3 = Lady no. 3, from a Central Passenger Service Point at Metro Świętokrzyska station.
BU = the main character, student SGH (predictably)

I decided to head for the nearest Urban Transport Authority “Passenger Service Point”, situated on Metro Centrum station and complain about the illegible (blank) ticket.

BU: Good morning, I bought this funny illegible ticket and I would like to return it and get my money back.
L1: Where did you buy it?
BU: In a ticket machine, at Pole Mokotowskie station.
L1: In a yellow ticket machine or in a blue-grey one?
BU: (after a second thought) In a blue-grey one.
L1: Those machines are not ours (UTA’s), they belong to Polish Mint, they have their customer service office at Metro Świętokrzyska station, complain there, not here.
BU: (a bit confused) Thank you, good bye.

I had some time to waste so I got into the first train that had arrived and five minutes later I was opening the door to Polish Mint’s office.

BU: Good morning, I bought this funny ticket in your machine at Pole Mokotowskie station. It is illegible and I want to return it and get a refund.
L2: It is not our ticket! We cannot take it from you and give you a refund. You should ask Urban Transport Authority for it.
BU: I just left their customer service office, they told me to report to you, because the ticket was printed in your machine so it is your fault.
L2: Alright, we will not give you a refund, but here you have a piece of paper (giving me an A-4 format form full of blanks) and if you wish, please write a complaint.
BU: And what will happen if I fill in all those gaps and blanks?
L2: Nothing, we will reply to it within a week.
BU: But how will you get in touch with me? And how will you give me my money back?
L2: I don’t know, you will get in touch with us, or whatever.
BU: Good bye (or shove it!).

I wasn’t that hot under the collar as you think and marched into another Urban Transport Authority office, located around twenty metres away and obediently queued up, behind other passengers, most of whom were waiting to pick up their new personalised travelcards. I quickly noticed ticket returns are handled just in one counter.

BU: Good morning, I bought this ticket in a ticket machine, it is illegible so I want to return it.
L3: Where exactly did you buy it?
BU: In Polish Mint’s machine, at Pole Mokotowskie station.
L3: I see… (on the phone) Krysiu, what do we do with those illegible ticket, I have another dissatisfied client over there?
Great, did you validate it?
BU: Of course not, if I had validated it, I wouldn’t have come here.
L3: It is unused then, it boost your chances to have your ticket accepted.

Then a woman used a device ticket inspectors use to control tickets and checked if it really wasn’t used.

L3: Alright, here you have your good ticket
BU: But I have already bought such a ticket, I don’t need another one.
L3: That’s a different story, I have to ask my manager.

She headed to a back office and after a minute came back with a pile of papers

L3: Here you have five forms. Please fill them all in and in thirty minutes you will get your refund.

I looked at my watch, then at queue behind me…

BU: Can I get that ticket?

After all that ticket one day will come in useful…

If you think it really unnerved me, you’re far from truth. I found the whole vicissitudes quite hilarious. I’ll tell you more, Urban Transport Authority’s workings are a hundred times better than bureaucracy at my university. Ticket office ladies were absolutely customer-friendly, competent and the standard of treating a client is incomparably better that at SGH. SGH toughens up and such dealings as described above are a sheer pleasure!

After the whole event I attended a lecture in monetary policy given by professor Andrzej Sławiński. It was one of those moments when a teacher prompted thoughts about education system.

Why sometimes you can learn more during one lecture given by an excellent lecturer than during a semester-long course delivered by a dull one?

Why some lecturers can grab students’ attention and make them hang on every word they say for ninety minutes, when others need just five minutes to put students to sleep or trigger a headache?

Why some lecturers talk to the students and others talk their arse off and say nothing?

Why some lecturers require a lot from themselves and from their students and others take the path of least resistance, that is “I’ll pretend to teach you something, you’ll pretend to learn it, at the end of the term I’ll give you good mark and everyone will be happy”?

Why some lecturers can explain complex issues in a plain way and others can confound even simple matters?

Why some lecturers can infect students with passion to explore and encourage them to challenge teachers and others want students to keep their mouths shut?

Why the most knowledgeable scholars often deprecate their wisdom and the mediocre ones put on airs?

And at last, why do dull lecturers prevail and those akin to Mr Sławiński are few and far between?

“Politics, Economy, Society” one year on...

For starters, I my congratulations to Scatts and Island1 who run Polandian, a humorous English-language website about Poland, which is today celebrating its second anniversary. Keep it up guys and beware. I’m working on tweaking the rules of mathematics so that my blog will be in a few years older than yours ;)

Before it happens I would like to thank all visitors who have been popping in here, mostly to the ones who left their marks by commenting on my posts.

I recently installed a visit counter on the sidebar so you can keep track of daily number of visits, but to lace this post with some statistics, I looked around the search engine queries which diverted some accidental users here.

bilans wsadu i uzysku (incidentally, this method is no longer in use),
marzena rogalska kretynka (I won’t dare to call it into question)
dyrdymały deutsch (I noticed some visits from Germany)
oręziak zlikwidować OFE (finally Polityka placed the article at its website, I sincerely hope the critical voices from all independent (not paid by OFE owners) economist will soon sparkle an action which will overthrow the current pension system, last ideas of deputy prime minister Pawlak, supported by liberal economists are good, but hard to implement)

Besides, there were plenty of usual English-language queries (why are the Polish so funny?) and lots of ones showing attempts to find translations of some difficult Polish words or idioms.

A success – it was a year of regular and relatively readable blogging. I did what I intended to do – I have shared my ideas with the world, in a foreign language to make it more challenging and pleasurable.

A failure – as I set up this blog exactly a year ago it was aimed mostly at fellow students from my university. Note that the domain “student-sgh” is Polish. I realise some topics are quite difficult, though I’m trying my best to lay everything out in a possibly plain way.

I recognise a problem of language barrier in Poland. Reading a feature in a foreign language requires more effort than in Polish, particularly when a topic isn’t simple. And even if they read it, having to comment on the post in English works as a deterrent. Expressing complex ideas and argumentations in a foreign language is not easy, but hey, practice makes perfect!

Mid-February, longing for the summertime

The winter itself doesn’t hack me off that much, sooner or later (the more probable scenario) it will end, but what it spoken about winter begins to hit my nerve. A councillor from Słupsk says policemen should not help clear the snow from city streets, because they are trained to do other duties in their service. As far as I’m concerned police is to help the citizen, so if the comfort of living in Słupsk has a negative correlation with amount of snow lingering on the streets, they should help remove it.

The next thing is saying this is a normal Polish winter. Alright, February is absolutely normal in terms of temperature and precipitation, but I don’t understand how January could be normal if the temperature in Warsaw last month averaged out –8,2C, when a long-term average for January is around –2,5C. Within the last fifty years January was colder only in 1963 (-12,9C), in 1985 (-9,2C), in 1987 (-13,0C) and four years ago (-8,4C). And we haven’t had such amounts of snow (currently over 40 centimetres in Warsaw) since 1979.

So if the last weeks were normal I postulate that everybody should earn above the average!

What the weather forecasts say is even more confusing. In the coming days the temperature should be slightly sub-zero, but then the air oscillation is about to alter, a mild thaw is expected to come around Thursday or Friday and the winter might end in the first days of March.

I wonder when the last snowflake (the one fallen two months ago) will disappear from my garden. Since moving to NI, I’ve taken down the days when it had happened, and it was respectively on: 30 March 2006, 5 March 2007, 27 March 2008, 26 March 2009. Note that this day can be recorded only with hindsight. Almost the whole March 2009 was snowless and on 25 day of the month Warsaw saw a heavy wet overnight snowfall.

In the meantime it’s nice to remind oneself how some place looked in July and how they look now, during the most snowy winter in my lifetime – see comparisons below. These are basically the same places, I tried hard to snap exactly the same view but waddling in almost half-metre snow in the blizzard was kind of tough. Aren’t these huge snow heaps stunning? I can’t wait to see the dirt they’ll uncover after they melt…

Investment sayings, investment myths

When talking about the above, don’t expect me to mention Santa Claus Rally or January Effect (or maybe January defect). These are not myths, rather superstitions backed by some statistical significance. I would be very wary of trusting in four examples mentioned below (and I advise you not to believe also in the ones above), a crafty investor should remember about some certain rules.

THE TREND IS YOUR FRIEND (until it ends)
Is a favourite saying among currency traders. Their strategy is to capitalise on a certain trend on a currency pair and to cover a position and take profits possibly quickly, before the trend reverses. Individual investors tend to show some errors of perception in terms of market trends. The biggest mistake I see is a belief (I have not idea how it is justified) that the trend will continue. An average Kowalski firstly sees the stock market brought a return of thirty per cent in a last year and a year before, he concludes a stock exchange is a machine for making money and decides to invest in stocks. Then usually the prices go down. He thinks it’s just a correction and hold his securities, takes a loss of fifty per cent and pays his money out around the moment indices are about to bottom out. Does it ring a bell? The end of bull market in 2007 and bear market in 2008 and early 2009 looked like this.

When watching a trend you should ask yourself when it is going to reverse. When a speculative bubble grows, the more the prices rise, the more people believe they will continue to rise, the most cautious are the last. Mind my reader, this is totally irrational, the longer a trend continues, the more likely it is to reverse. I know it is hard to recognise the turning point. Before setting out to write this post I browsed Polish market commentaries from February 2009 when stocks were in their many years’ lows. And what have I turned up? Almost nobody predicted a rebound (given how bad things looked a year ago it’s now startling). You have to foresee turning points, sometimes you’ll gain, sometimes you’ll lose, but you have to take this risk, unless you want to be a sucker who buys overvalued stocks.

IF YOU CAN’T BEAT THEM, JOIN THEM
This saying applies to stock market. Every individual investor who plays Warsaw stock market should know it is swayed, not to say rigged by two big players, called ‘big boys’, or in Polish ‘grubasy’. Everyone knows which two investment banks open their positions here, just nobody wants to mention their names. Another fact that can’t be denied is that investment sentiments on Wall Street has a considerable bearing on other stock market all over the world. When America sneezes, the whole world catches a cold. Why? Many investors come from the United States and the other have learnt to follow them. So what can a small speculator do? Anticipate their moves and not try to beat them, they’re too big to pick up a fight.

LONG-TERM INVESTMENTS IN STOCKS OR EQUITY FUNDS ARE PROFITABLE
It is a myth. Almost every “analyst”, or “expert” will tell you this. If you pay your money in equity fund, the investment duration should be at least three years, the recommendable duration is five years. During my first class in basics of economics, in September 2006 I learnt that an economic theory is true not when it can be proved, but when it cannot be disproved. I decided to use the data for blue-chip index of Polish stock exchange – WIG20. Let’s see how high the returns on 5Y investment replicating the WIG20 was. I analysed the investments made on 11 February (date chosen randomly, it was yesterday) 2000, 2001 and each consecutive year until 2005.

Conclusions: in two cases (2000-2005, 2004-2009) yields were negative, in two periods (2002-2007, 2003-2008) the gains were impressing, in one case (2001-2006) they were above interest rates on bank deposits and inflation, in the last the 5Y rate of return turned out to be positive, but in real terms and compared to other, safe investments it would be negative. This simple experiment shows this theory is ‘half-true’.

And a bit of maths: yearly returns, corresponding with five renewable 12M deposits, compound interest rule applies:
2000-2005: -1,63%
2001-2006: 12,57%
2002-2007: 19,89%
2003-2008: 21,51%
2004-2009: -2,78%
2005-2010: 1,02%

Any alternative? Good timing, not investment duration is what matters, you can gain twenty per cent within one month, or within five years. Fancy following financial advisors’ advice to pay money into an equity fund, forget about for five years and then pay them out? Be prepared for a rude awakening (or high yields, depending on the timing).

Why is this theory undermined by many independent experts? The answer is very simple: bull markets tend to last long (three to five years) and stock prices grow in a rather moderate pace of twenty, thirty per cent per year, bear market last shorter (six months to two years), but stock indices plummet and quickly wipe out the previous rallies.

THE LINK BETWEEN RISK AND EXPECTED PROFITS

Maybe it’s not a myth, but rather a distortion. The chart to the right is what usually the ‘benighted’ investors are shown by financial advisors or,, let’s give it straight, salespeople. I didn’t take trouble to find it in English, so: oczekiwany zysk = expected profit, poziom ryzyka = risk level, lokaty = [bank] deposits, fundusze pieniężne = money market funds, obligacje, fundusze obligacji = bonds, bond funds, fundusze hybrydowe = hybrid funds, fundusze akcji = equity funds, akcje = stocks, the horizontal line shows the level of risk.

Many times I’ve heard this chart is misleading, and indeed, it focuses on profits and neglects losses. To the right you can see some modifications I made.
Firstly, let’s add another line that would show possible losses, the bigger the risk you undertake is, the bigger loss you may suffer (upper-left). I know my pictures are clumsy, but assume that the angle between green line and dotted line is the same as between red and dotted ones.
Secondly, as I wrote in the previous paragraph, bear markets are more abrupt, so within one year you might lose more than you might gain (upper-right).
Thirdly, the slopes of these funny colourful lines vary in time. In the last phase of bear market, or when the stocks are undervalued (like in 1Q 2009), it looks like bottom-left picture. But when the stocks are overvalued, or in the last phase of bull market (like in 3Q 2007 or who knows if not in January 2010), more appropriate would be the bottom-right chart.

Sense of justice

This week residents of Warsaw witnessed the events which should have prompted them to reconsider what just is and what is not. And it’s not as black or white as it may seem to look.

On Monday (the day before yesterday) two burglars broke into an antiquarian shop in the centre. One of them ran away quickly, frightened, as the shop assistant didn’t give up easily and got into a scrimmage with his companion. During the fight the shop assistant took away a knife from a thief and stabbed him. Both men were taken to hospital where the intruder died.

Soon the readers of TVN Warszawa portal hailed the antiquarian who had put up resistance to burglars as a hero. At this point we begin to draw on our moral principles. Has a man a right to take away his fellow man’s life? According to the Catholic Church teachings (and as the statistics show, over ninety per cent of Poles declare themselves catholic, so they should follow some principles), never. According to the law, he could have killed a robber unintentionally, in self-defence, this has to be investigated.

What caused such a reaction of readers? Firstly they looked up to him for his bravery, secondly, in their sense of justice the burglar was no one else but a pest, which posed a threat to society. The shop assistant has eliminated a human being whose existence was perceived harmful for the rest of society. In this respect, his deed was considered beneficial, for two reasons. Firstly this man will not break into any other shop, will not steal anything, will not do his time in prison, financed by taxpayers, and secondly other thieves will be scared and this accident may put them off trying to steal something.

Since the burglars attempted to break into my house in September I have been thinking about how I would have behaved if my neighbour had not scarred them away. For sure killing anyone, including the worst scoundrel would be out of question, my conscience would not be clear until the end of my days, but I would have to remorse to break his arm or leg? For someone who uses a crowbar to enter someone else’s property it is a well-earned injury.

What happened today casts once again a light on Polish insensitiveness. A lot is spoken that Poles, whenever they see something wrong, turn their heads away, pass by pretending not to see anything. A policeman in civilian clothes who rode a tram in Warsaw this morning had the courage to reproach a hooligan who had thrown a rubbish bin into a tram. A young (18-year-old, inebriated) criminal pulled a knife out of his pocket and stabbed the policeman, who later died in a hospital.

I pay homage to this brave man and like many people wonder what to do with the murderer. Many commentators driven by pristine emotions suggested that he should be executed. Tit-for-tat, the easiest way out. In practise he will appear before court and will be imprisoned for many years. Neither variant solves anything.

I’m not in favour of capital punishment, but it gets my goat whenever I think thousands of prisoners do their time at taxpayers’ cost. Hence, I have two modest, I suppose, proposals.

Criminals who commit petty crimes and those who made illegal or thoughtless things that harmed other people should be FINED severely. The financial disincentive should work very well, after all humans are driven by greed, aren’t they?

But sometimes the convicts have to be isolated from the rest of society. I think privatisation of penitentiary industry would not be a bad idea. The guys who fell foul with law should earn for themselves. The business would be viable, we would have a plenty of cheap labour force utilised for building motorways to move this country forward.

Ukraine, shock doctrine

Following the discussion on Polish winter, I report the gas bill has arrived.
Period: 20 November 2009 – 19 January 2010
Gas used: 628 cubic metres (just 21 metres more than in the same period a year earlier)
Amount payable: 1111,70 PLN (after adjustments 900 PLN apportioned to heating, the rest to water boiling and cooking)
Usable space heated: around 120 square metres.
Is it really a lot? My father counted up the costs of heating a 60 square metre flat five years ago and he worked out heating a two times bigger house costs after five years (meanwhile gas price and other charges rose) costs only fifty per cent more.

The winter doesn’t seem to break its back soon, the harsh weather may also put many Ukrainians off going to the polling stations today, when a run-off in presidential elections is held. I pondered upon those elections, as I still remember (finally I’m old enough to remember something) the Orange revolution in 2004 and kept track of some current news from Poland’s eastern neighbour and I came to a simple conclusion: Ukraine has not grown into democracy yet. And I’m not sure whether it will ever grow. Heritage of the past has left its mark on its people and it is being passed on to next generations.

To back my theory I see two key reasons why the country got where it now is. Firstly, its elites. People pinned hopes in them over five years ago, expected a big change. Meanwhile in a country with poor institutions a change is beneficial for a small group, the rest might feel disadvantaged. The elites soon relished on power and privileges and began to embroil in spats within their structures (note the same happened in Poland in early nineties within Solidarity structures). In a poorly developed countries being in power means access to privileges and money, or to put it simply, corrupts the governors. In highly developed countries and mature democracies it is a distinction, a proof of social trust, a position which crowns one’s accomplishments and career. Being elected means not a chance to establish oneself in a cushy job, but a public service. It seems to me this is why deputies, ministers and other people holding high positions in state administration should take those offices for reasons other than financial, i.e. social status, fulfilling one’s ambitions, prestige, going down in history, etc. In Ukraine, the premises were different.

The second cause are the people. Firstly shaped by seventy years within Soviet Union, secondly lost and often unable find their ways around independence. They wanted democracy and liberty, but those were not the politicians that made them hanker after the advantages of the previous system. It was the economic crisis that heavily hit the country. The misery is best illustrated by figures of economic growth (over minus twenty per cent year-on-year in 1Q 2009) and depreciation of hryvnia. If people can’t make ends meet, they’re more interested in bread-and-butter issues than in free speech. Crises usually are the times when populists’ popularity grows. Remember that Hitler was elected in the time when Germany was in the doldrums.

I thought reading the passage (pages 171 – 184, English edition) about transition in Poland in Naomi Klein’s Shock Doctrine would unveil some conspiracy theories, facts kept in the dark, give some food for thought. None of the above. A reader unfamiliar with history of Poland in 1980s will find there a timeline and overview of the most important political events that led up to the collapse of communism in Poland.

Mrs Klein drew a parallel between political changes in Latin American countries and in Poland. Her point that the shift to democracy was prompted by decaying economy is quite right. I personally think the regime decided to share responsibility for the country in the moment of ultimate collapse. The regimes which had ruled Poland for forty five years of real socialism had indeed been mismanaging economy and the breakdown was inevitable. Our situation was different than the one in South America. Those countries were not, like Poland, in Soviet sphere of influence. The last opportunity to reform Polish economy painlessly was wasted in the middle 1970, when the extensive growth of socialist economy reached its limits. Then problems were exacerbating. In first years, until 1979, authorities managed to cover them up, then they became too clear to be unseen. The change, however, was not possible, as I claim until 1985 or 1986 when the communism in Soviet Union showed first signs of thawing out, but at that time Polish economy was in a harsh decline plus social indifference thwarted possible reforms.

Was Poland in a great position to accept the shock therapy? It’s hard to say now, the worse the state of our economy was, the more painful bringing it back to order must have been. But watch out now. Poland was crippled by what influenced the situation of Ukraine. The transition, aimed at liberalisation and privatisation was not focused on institutions. Had the rules of the game been clearer and more transparent, we wouldn’t speak now about fortunes springing within a few weeks and about abrupt impoverishment. Poor institutions are, as I observed one of major causes of growing inequality. Milton Friedman, in his declining years said he had been wrong. The major reform that should have been carried out in post-socialist economies was creation of sound institutions. With good institutions established, privatisation wouldn’t have been so slated these days.

Somewhat interesting is the comment on the attitude of Mrs Thatcher and Mr Reagan towards Solidarity. This movement, in its line extremely leftist would be clamped down on in Great Britain or United States under their rule. In 1980 and 1981 Solidarity wanted to turn Poland into democratic socialist country, based on collective property and governed by workers and trade unions. How Poland changed ten years later was far cry from this vision. Actually I see linking Solidarity from early eighties and its contribution to economic changes misplaced. What the movement fought for and what was put into practice was political liberalisation.

Is the entire book worth reading? I haven’t got a clue. My lame excuse for not reading it now is that this year’s winter break is so short…

Random tidings – SGH, stocks, blogs

Fellow students who, if Google Analytics tools don’t fail me, hardly ever visit PES may find here my outrage over what authorities of our school have done to us yesterday. Why did we file the course declarations in December, if one decision has nullified them? Why does somebody (put stock in the laconic announcement, and the guilty is prof. Joanna Plebaniak, who has showed lack of respect to students many times before) change the rules during the game? Why does nobody inform students about it? No wonder they get lost.

The worst thing about this is not the mess. I’ve learnt to live with the chaos built into my university, month by month it’s getting worse and whenever I think the sloth, incompetence and insolence have reached its climax, the next attempt to improve something proves me wrong. Every time the outcome of their activity is an outright failure, they try to tell us they had “temporary problems”, or they didn’t know, it wasn’t their fault etc. We, as students feel treated like downright idiots, because only a downright idiot would believe in their rubbish explainings.

The worst and hard to reconcile to is that people who screwed it up (don’t blame computing centre, they just fulfil orders from “dean’s office” and it’s not their fault that infrastructure is crappy) will never be held to account for this scandal. They will laugh in our faces and tell us “nothing has happened”. A man of honour would follow out a ‘PiS strategy’. PiS stands here for “Przeproście i Spieprzajcie!”. Unfortunately, they will never say sorry and, what is worse, they won’t bugger off! It is a human thing to make mistakes, but a decent man should be able to concede them, apologise and resign from a position they are not capable of holding it.

I feared the worst, I was prepared for the worst and nothing has taken me aback, so I sat in front of computer and after two and a half hours I straightened everything out. This time properly configured Firefox and usually crappy Play Online didn’t let me down. Thank God my adventure with Warsaw School of Economics will have been finished in a year, circumstances permitting. The last condition implies my hopes will be dashed.

Dear foreign readers, every time I visit any office of Polish administration I am truly grateful I’m not in my school. Any institution is more citizen-friendly than my school. I recently studied the economic collapse of Zimbabwe. If the whole Polish state administration worked like my school we would end up like the South-African country.

This has been a wonderful week on stock exchanges across the world. Indices plummeted by three to five per cent yesterday and today, wiping out the whole bull market from the last few months. On 4 February 2010 WIG 20 (Warsaw stock exchange blue chip index) slid by 4,11%, today it declined by only 3,95%. Since the last gasp of bull market it fell by 12%

Long live the free market, markets are sound, only the forecast found on “Profesjonalny Inwestor blog” is a bit scary – what I called a bull market might have been in Mr Bartłomiejczyk’s opinion just a correction in a long term downward trend. So are we going to see new troughs? Given the current fiscal problems and drags of public debts the pessimistic scenario is unfortunately conceivable. The first wave of crisis hit the financial sector, will the second one hit the governments which ran up debts to stimulate economies? Will the contagion of fiscal woes overcome stock markets? Poland’s situation seems very good, when compared to the countries which may face insolvency. Time will tell, at the present my forecast from 30 January proves right.

The most famous English-language blog about Poland is probably Polandian, but watch out now, I’ll give you a link to “Oto Polska”, the most infamous Polish-language blog about Poland. Don’t think it has anything in common in style or content with Polandian.

If you decide to click there, be prepared that the authors won’t pull any punches. Their picture of Poland is simple: a land of dog’s excrements lying on pavements and lawns, idiots brainwashed by Catholic Church, morons who try to outfox one another, cheat on every step, botch up everything they get round to. Their griping isn’t laced with any analysis, they don’t try to trace back the source of our national shortcomings, postings generally (not all) lack constructive criticism. Good blogging may include pouncing at bad solutions, but a writer should elaborate why a certain solution is flawed, how to improve it and justify it.

Authors of “Oto Polska” instead of delineating Poland’s inferiority and taking delight in calling Poles mongrels could rather use the Net to set up a movement to change this country. We are far from ideal place to live mostly for one reason – low level of social capital.

The most disturbing thing in the whole matter is that sadly many of their posts are totally true. Hadn’t they just been eaten up with hatred and crammed with foul language, they would have just described a dark side of Polish reality, like the post about Polish higher education system. Why does it strike a chord with me?

Penultimate optimistic part is a weather report. Last days were comfortably warm, yesterday daytime high was +2C, today temperature barely crept above zero. Snow was slowly melting. The coming days are expected to bring a bit frosty weather with light snowfalls. By and large, a normal February will follow a frosty January.

Final part is a photo from today’s hearing of Jarosław Kaczyński before parliamentary gambling scandal commission. Next time I go to a barber’s I’ll ask: Na Kaczyńskiego mnie proszę ostrzyć poproszę!

Bawdy songs make it big

Have you seen this commercial?



I sometimes have the same feelings, as those evoked by this language school advertisement, when I turn the Polish radio on. I listen to Radio Złote Przeboje (100,1 FM in Warsaw) and they fall into delights over one new song (below).



It starts: It’s the first of May / I don’t feel the same, so one would infer it’s a song about nothing, like almost all released these days, but when the song reaches its climax, the refrain goes:

I give you all my lala
But don't you tell my mama
'Coz I don't need no drama
In my life

And now a hint to radio comperes and EN->PL translators – “lala” is not a doll, nor carefree singing along, but it translates (retaining the meaning and flow, but not literally) into Polish as:

Więc zróbmy bara-bara
Niech nie wie moja stara
Bo jeszcze jedna kara
Na nic mi

This is going to be a hit in Poland and across Europe this late winter. Catchy tune accentuating the advantages of going to bed… But it’s not the first time, a few months ago one of the most popular songs was the one below.



It was played in commercial and state (the one with a mission) radio quite frequently, but I was really baffled when someone played it in Sunday morning Catholic broadcast and then enlightened listeners (mostly pensioners) called the radio and said they had enjoy its “smooth flow” (po polsku – gładko im ta piosenka płynęła).

(…) Make you want to touch it, make you want to taste it / Have you lusting for her, go crazy face it / She's so much more than you're used to / She knows just how to move to seduce you / She gone do the right thing and touch the right spot / Dance in you're lap till you're ready to pop
She’s always ready, when you want it she want it / Like a nympho, the info / I show you where to meet her / On the late night, till daylight the club jumping / If you want a good time, she’s gonna give you what you want
Baby it’s a new age, / You’re like my new craze / Let's get it together / Maybe we can start a new phase
(…)
Why don't you sit down on top of me
(…)
When she ready to ride, I'm ready to roll / I'll be in this bitch till the club close
What should I do, one thing on all fours / Now that that shit should be against the law / Different style, different move / Damn I like the way you move / Girl you got me thinking about / All the things I do to you / Let's get it poppin shorty / We can switch positions / From the couch to the counters in my kitchen

Now I won’t dare to translate, but don’t you try to tell my the lyrics are not suggestive (dwuznaczne). By the way, it does flow smoothly, love these beats.

I’m not ranting about the existence of such songs. In Polish we have some “bara-bara-bara, riki-tiki-tak / jeśli masz ochotę daj mi jakiś znak”, such as Doda’s “Party song” (below),



or the infamous Polish kitschy disco polo song “Cztery razy po dwa razy”, which symbolises the downfall of popular culture, but is disturbingly popular in Podlasie and played during almost every rural wedding party.



Perhaps there is a demand for a song which plays up benefits of sleeping around and tells that everyone deserves a good f*ck in strange places. At the end it takes a piss out of healthy students, like me. Hey, why haven’t I been to any rural wedding and why haven’t I tasted all those forms of entertainment like jolly good shag on haystack in a barn? I’ve never been and, oddly enough, I don’t regret!

Those songs exist in every language, but I’m sure no Polish radio station would let the Polish ones be played, but they blithely play the English-language ones. I somehow feel treated like an idiot. Is it their hypocrisy or ineptitude?