Tuesday, 27 April 2010

It’s all Greek to me

“Goldman, Greece, those will be never ending stories”, a friend of mine told me today. “They’ll be pulling the markets up and down and all we have to do is to anticipate those moves and get the most out of them” – he envisaged a nice scenario.

The Goldman case might be a tip of the iceberg. It may drag on and on, the bank might hire excellent lawyers and prove it just bent the law. In the coming weeks I do not predict this case might trigger a bigger correction on the markets, but if regulators and politicians decided to accuse other banks or restrict proprietary trading, the momentum of bull market would be up in the air.

Now the latter. Greece has been facing problems for months on, the deterioration has recently grown apace, but when I saw yields on 2Y Greek bonds had soared to 17%, spread between 10Y German and Greek bonds had exceeded 700 basis points I asked myself if my eyes were deceiving me or if the editor of the hapless news item had made a typing error. But after checking a few other web pages and making sure that S&P agency categorised Greek debt as “junk” and downgraded Portugal’s rating. It’s kind of astonishing to see a Eurozone country rated as issuer of junk bonds.

Stocks tumbled across the Europe, in France CAC 40 index plummeted by impressive 3.82%, trading on Warsaw stock exchange closed ay 16:30 what means nothing else but that tomorrow it will open be far below today close.

What next? Will we be facing the second wave of crisis or will the concerted action of other countries head off the worst scenario? German and French institutions hold a large chunk of Greek debts, so they have a vested interest in coming with aid. As for me, Greece will sooner or later default on its debts, quite probably in mid-May when it will have to roll over much of it. The best idea would be let Greeks leave the Eurozone and let it face the music. Insolvency is just a matter of time, so should other countries chip in to prolong Greek agony? For months things haven’t looked as dangerously as they’re doing now.

Sunday, 25 April 2010

The white hole in Polish history

I suppose within my lifetime there will not be a consensus on how to assess the period of PRL comprehensively. There will be no unambiguous review for a simple reason – millions of people lived in that country and each of them might have a different view on those times. The spectrum is wide and covers opinions from moderately positive, focusing on social security and social advancement to clearly and extremely negative which point at enslavement, felony and lies as main pillars of People’s Poland. I would dare to claim there is no truth about PRL, there are facts (deniable or not) and interpretations, subject to endless debates. The biggest problems is that truth will not always out in this case.

Poland in its pre-WW2 shape was wiped off the map of Europe on 17 September 1939, the day when Soviet army invaded us from east. The man who signed a command to wreck the Polish state in 1939 and annihilate Polish elite in Katyn in 1940, in 1945 insisted on creation of Polish country, with new borderlines and in Soviet sphere of influences. Mr Churchill and Mr Roosevelt succumbed to his pressure, as Soviet Union, which had sent millions of its citizens for death on battleground, had had a significant contribution in defeating Nazi Germany and its allies. Thus Europe was carved up into two blocs – a Soviet one with Poland as one of satellite countries and a Western one, built on foundations of free market and democracy.

I cannot agree PRL ended up in the same form as it was set up. There were different periods and different shades of grey that could describe it. I could distinguish a few periods and milestones.

1945 – 1956 – the time of building communism, cracking down on the elements of pre-war Poland and those who fought for Poland on the wrong side. In this period Poland had most political prisoners, many of whom were sentenced to death. Meanwhile it was the time when many people still thought communism could bring paradise on earth, justice, equality and happiness for all. Some of them thought the ones who did not want to build the ideal system should have been eliminated, some were totally unaware of cruelty of the system. The pursuit for communism eased a bit in 1953 when Stalin died.

1956 – was the first short period of moderate (but relatively huge within the system) liberty. In that time totalitarian system thawed out and turned into authoritarian regime, whose power worn off gradually until 1989. In 1956 Poles were full of hopes for a new beginning, for a socialism more friendly to people, symbolised by Władysław Gomułka, Polish communist who spent many years in Soviet prison. He took over as first secretary of ruling party in October and soon kept a tight rein on Polish society. Four months earlier, in June, a first crack appeared on the countenance of Polish socialism – workers from rail construction factory in Poznań went on strike. Actually it was the first time in the world history when factory-owners went on strike.

1957 – 1970, so called “small stabilisation”, period of greyness and austerity. Most of national income was invested, little spent on consumption, it was the first time when ruling “elites” and ordinary people struck a deal “you’ll let us rule, and we’ll let you live (rather normally). In this period first dissidents voiced their protests against the system, accusing rulers of betraying the ideals of Marxism. Student demonstrations in 1968, anti-Jewish campaigns and brutally put down strikes in December 1970 brought Władysław Gomułka down and undermined the foundations of socialist system.

1970 – 1980, known also as “Gierek era” or “golden decade”. Many Poles recall those years as time when Poland made a big stride, standards of living were higher. It was indeed a time of liberalisation, it was easier to get a passport and go abroad. But in the same period, socialist inefficient economy reached the limits of its capacity and indebtedness. In 1976 workers once again protested against price hikes and first attempts of reglamentation. The consecutive years saw the formation of first dissident organisations and on 16 October 1978 Polish cardinal, Karol Wojtyla was elected Pope. This came as a bolt of the blue to the rulers. In 1979 Polish GDP shrank for the first time since WW2, Polish economy was on its knees until the system ultimately collapsed.

1980 – 1981, Solidarity and carnival of freedom – 16 months of liberalisation, authorities allowed to create independent trade unions. It was the big success of fledging civil society but in economic terms it caused Polish economy to falter even more. As we look today at some demands of protesters, we saw they demanded the same what today the most extreme leftist organisations want to put into practice.

1981 – 1985. The carnival soon ended. On 13 December 1981 the movement was clamped down on and Poland immersed into eight-year period of torpor. On that day general Wojciech Jaruzelski declared Martial Law. Among the most often cited reasons for that decision were threat of Soviet intervention and fear that the socialist regime could have been toppled. I also add the threat of civil war and economic hardship. The martial law dashed hopes and stifles zeal to fight for independent Poland but did not break Poles’ bones.

1985 – 1989. The declining years of PRL. The system once again began to thaw out as the Gorbachev came to power in Soviet Union. In those times there was still no free speech and many civil liberties were out of reach, but then when you could do and say anything except for declaring openly you wanted to topple socialism. The economy was still in a free fall and the government tried to resuscitate the corpse. Those attempts could have been successful, if it hadn’t been for lack of support from Polish society. Faced with Soviet Union going under and dramatically bad economic performance, the rulers decided to share responsibility for the country with the opposition, putting the late dissident on the spot…

Poles somehow had to get on with the system. Some, like Polish poet and Nobel prize laureate Wisława Szymborska declare they really believed the communism would bring collective happiness. For some, including Home Army Soldiers this was the biggest tragedy in their lifetime (those who remember the last scenes from “Katyń film know what I mean). Some tried to make careers, make a pile. This group can be divided into two subgroups – first were real communists, who also deeply believed in the system, the second were opportunists, who did not believe in the fairy tales of equality and justice, they wanted access to privileges and power and got it their own way. Quite numerous, at least in 1980 and 1981 was the group of opponents of the system. Most of them wanted to civilise the socialism, leave the economic foundations of the system which guaranteed social security intact, but held out for civil rights. And very few of them can be named pioneers who paved the way for market economy, because they defended working class. But the most important group numbered in millions were ordinary people who did their bit and kept their mouths shut. Those people proved for me Poland after 1956 was authoritarian (not totalitarian) and socialist (not communist) country. If you kept your mouth shut and did not stick your neck out, you could basically feel safe in that country. It wasn’t the Soviet Empire of 1930s when anyone could drag you out of your house and arrest on trumped-up charges. Doing nothing, which was also giving silent consent for misdeeds of the party, guaranteed some kind of safety.

There are also many theories concerning the collapse of socialism. A big role is put down to Lech Wałęsa, Pope John Paul II is credited with many merits. In my humble opinion those were economic difficulties and fall of communism in Soviet Union that played a major role. Mr Wałęsa and Pope had their contributions which cannot be forgotten but if it had not been for the factors above, they would have just dealt a blow to socialism, but it would have been still hard to overturn it.

And let’s have a quick overview of Polish “uprisings” in PRL and the reasons behind them.
1956 – economic reasons.
1968 – social issues
1970 – economic reasons
1976 – economic reasons
1980 – economic reasons, but demands regarding social issues
Poles protested against low salaries of price hikes, the free speech and other issues were in the background.

Many people still yearn for PRL. The reason is also simple – they miss the social security the system offered (in return for acceptance of its flaws). The responsibility which in liberal system is in hands of an individual was shifted into the state and many people found it convenient to have someone else taking care of their well-being and to have someone to blame for their failures.

So is there a truth? My father while listening to one of lunatics from IPN summarised the balanced view on Poland: “We could not fart without asking Soviets for permission but it was still Poland”. And I can go along with this assertion. Between 1945 and 1989 Poland was a lame and dependent country, which in spite of its subservience to Soviet Union was on the map of Europe, unlike Lithuania or Latvia which were Soviet Republics, and was recognised by other countries. Moreover, it was a country in which millions of people worked, not to build communism and support the felonious system but to do something good for fellow people. It is a subjective view, but it is what the blog is for…

Thursday, 22 April 2010

How (not) to apply for a job in English

This blog would have been deficient in valuable postings if there hadn’t been a month without bad-English rant. In the next episode of the series your favourite blogger is cracking down on a letter of application he has found somewhere in the Polish Internet.

At the beginning of the week I had to face a challenge of writing a letter of application in English. Whenever I speak about list motywacyjny with my Polish friends, we end up coming to a conclusion that applicants usually write there so-called pierdoły (hard to translate Polish phrases, in this context meaning “everything and nothing”). We all prefer filling in application form, where we provide the company with all information it wants to have about us and answer specific questions – any both parties are happy.

This time, although I know general rules and layout of this sort of letters, I felt slightly insecure and decided to look for some examples of letters of application in the Net. Out of a habit, I visited the most popular Polish portal for job-seekers to find this baffling example of use of English. (Needless to say I eventually wrote the letter myself)

The author of the guide snows her readers with several priceless advice, such as:

W angielskim liście również w innym miejscu umieszcza się dane nadawcy i firmy – data i dane firmy są po lewej stronie, a twoje nieco wyżej, po prawej. W angielskich standardach obowiązuje również system blokowy – nowy akapit od nowej linijki, bez wcięcia.

As far as I’m concerned there are two layouts:
1. British (also called semi-blocked), where addresser appears at the top, to the right, below, also to the right you put date and further down, to the left you place addressee, new paragraphs start with indentions.
2. American (also called fully-blocked), where everything is aligned to the left, paragraphs have no indentions, but are separated by a gap.

Nie wygłupiaj się! Jeśli nie znasz języka na tyle, żeby samodzielnie napisać list motywacyjny po angielsku, to nawet nie zaczynaj!

Scroll down to check if the author of this sentence practises what she preaches.

Przeczytaj, ale nie przepisuj! Każdy list powinien być unikalny, a wzory są tylko po to, aby czerpać inspirację!

Rewrite the masterpiece below? Who’s so determined to have their application rejected right away? That would be a shot in a foot! But this letter definitely filled me with inspiration – to compile this post.


For sure every recruiter who doesn’t know Polish well will understand this title.

Mateusz Wiśniewski
Tel. 505 000 000
Mr. Karol Napiórkowski
ABCD Company
HR Department

I still can’t make out to which layout the author sticks. The very content suggests it’s the American one, but the addresses made me stumped – left to the right, right to the left, the other way round, coincidental lack of punctuation, maybe some other features (Mr. Karol?) leave a more experienced reader devastated.

Now let’s tear the content into pieces…

Dear Mr. Napiórkowski,

I am writing in regards to your current Human Resources Development Project Manager opening of which I got to know from "XYZ newspaper", August 23, 2005.

With regard to the first sentence of your letter I would like to remind you that regards are at the end of a letter, a rather private one. Why does it seem to me that “XYZ newspaper” is Mr Wiśniewski’s buddy?

Having worked in this profession, I am strongly convinced that my former experience and competence will be of great value for your organization.

Has the experience been given the sack? How about words such as past or previous?

As a this year graduate of Psychology, I present a high level of human resources academic knowledge as my major course was "Psychology in HR Management".

This year’s series of nasty posts labelled ‘translation’ presents a high level of spitefulness of the author of this blog, as he specialises in seeking out absurdities.

During my studies I was involved in many HR projects e.g. preparing recruitment tests for temporary employment agencies. I also did a research of corporate recruiting strategies concerning my MA thesis.

Or was it your MA thesis that concerned recruitment strategies?

I was also given an opportunity to work as a chief career counselor in the University Career Office. Over the last year I have completed more than 30 recruitment campaigns, none of which turned out to be a failure (reference upon request).

Passive voice sounds a tad bombastic but let’s brush it aside and focus on the content. The applicant must be a born optimist. For a pessimist all campaigns (or rather projects) would prove successful, an optimist will write żadna z nich nie okazała się porażką. I like the Polish word porażka, it carries such a huge variety of meanings.

Irrespective of my age and short experience, I am able to contribute in the same matter to the success of your organization.

Irrespective (who cares if words like ‘despite’ exist at all) of my efforts to grasp the meaning of “in the same matter” part I still find myself unable to decipher author’s intentions…

HR projects lie in the sphere of my strong interest. Bearing a challenge of managing a group of people is a motivation itself for me.

Projekty z zakresu zarządzania zasobami ludzkimi leżą w sferze mojego mocnego zainteresowania. Poniesienie wyzwania jakim jest kierowanie grupą ludzi jest dla mnie motywacją samą w sobie. Maybe if I translate it into Polish someone realises what kind of drivel we are facing.

Moreover my professional experience allows me to motivate subordinates effectively. I am not afraid of confronting problems and have skills of solving them – thanks to my academic competence as well as my high level interpersonal skills.

Experience is short but professional… I am running out of bright ideas on how to confront the problem of subprime translations and my high level ridiculing skills are declining…

I am a responsible and at the same time spontaneous person and have been recognized as one who embraces creativity and new ideas.

I am writing this post and at the same time I am laughing out loud and wondering, in which context the verb ‘to embrace’ was used. Probably in none of three ones (to accept, to hug, to include) I know.

For more detailed information please refer to my enclosed resume. I am eager to further discuss my qualifications during the interview. Thank you in advance for your generous consideration.

The word chętnie is indeed not one those which translate easily into English, but English has a few fixed expressions which may be used in the final paragraph, for instance: I would be glad to…

I anyone wants to comment on the last sentence, please feel free to snow me with your generous considerations. Thank you from the mountain for your contribution.

Mateusz Wiśniewski

(it’s not my real name, just a signature copied from the letter) By not adding ‘Yours’ the author shows he is quite thrifty – this shrewd move helps someone save on ink.

And today’s final part is an old chestnut – use of English by SGH staff.

Dear readers! Posting next post is canceled at 23 and 24 of April. Additional posting will be postponed from 26 of April to 25 of April.

Monday, 19 April 2010

Before it goes under once again

It has to be said that if the plane had crashed on trading day the turmoil on the market could have been as wobbly as in the finest days after the collapse of Lehman Brothers Bank. But given two days to get over, Polish financial markets proved absolutely indifferent to the Smolensk tragedy. Stock market until last Wednesday was heading north, driven upwards by the positive sentiment among speculators. Currency market saw some uncertainty after intervention carried out by National Bank of Poland on 9 April to prevent further abrupt appreciation of Polish currency.

As many analysts pointed out, after ten week long rally market was in the short run bought up to the limits (what is plain English means no one wanted to buy stocks), so a small spark was enough to set the flame and drag the stock prices down.

Schadenfreude – is what comes to minds of many market observers when we read the news that SEC pressed charges against Goldman Sachs for misleading its clients who had been buying structured products based on subprime mortgage market. The products had been designed in collusion with a hedge fund, which later had shorted derivates linked to them. Wall Street firms, acting within a letter of law but not necessarily morally, already have a dented reputation. I have read some opinions that state the Goldman case might be just a tip of the iceberg and the next lawsuits against other big banks might follow. In the short term such news may help bring back markets into balance by reminding about the element of fear and curbing increasingly hazardous complacency.

But what about the long term? Last week George Soros, world’s most prominent speculator (I sincerely recommend reading wikipedia entry, mostly the passage which describe his views on stability of financial markets) warned of an unprecedented market crash which is going to hit in a few years. Mind this long-term prospect is a very probable scenario. The time of robust economic growth is still ahead (if it comes, given the scale of public indebtedness we cannot take it for granted), low inflation will be beneficial for equities, the resources of untapped funds of individual and institutional investors who still are wary of entering the market are not to be sneezed at. The last ingredient is complacency, at the present already dangerous, in the future it will be stoked to reach record-breaking levels.

And what if the market crashes vehemently? Be prepared, take what you amassed during the golden years and short it using leverage. Those who did it after Lehman went bust or in January and February 2009 and had a capital cushion thick enough not to get a margin call could afford to retire. Anyone can earn when the prices are rising, a real art is to rake in profits when prices are falling.

The alternative scenario is that if SEC charges next banks with frauds, the bull market driven to a considerable extent be those institutions will lose momentum for a while. If it materialises, the correction may last even a few months and may bring the indices down by even thirty per cent.

The notions above are left to your further consideration. In the current phase of business cycle and shortly after the last crisis stock indices are unlikely to plummet.

Good news for today is that Polish financial market regulatory body is going to introduce short selling on Warsaw stock exchange. It is the next step towards developing Polish stock market. In every civilised country it should be possible to bet against stocks and profit not only from rising prices. I am in two minds about the restrictions – it is all about taking risks. If stocks are much overvalued they should be allowed to reach an optimal level, also with help of speculators. If not, like the shares of Volkswagen in 2008, then short-sellers have to cover their positions and take losses. This is the life!

As a small speculator I would also embrace first Polish investment funds for bears ;)

Thursday, 15 April 2010

Conspiracy theories sprouting

EDIT, 16 April – my appeal. No matter how strongly we disagree with the decision to bury the president and his wife on Wawel let’s suspend all discussions and rows over this issue during the weekend. In the days to come we all ought to pay our respects to all departed ones who now deserve peace.

I haven’t prepared this overview on my own, it is just a summary of a compilation which appeared recently on WP.PL. Some are to a limited extent plausible, other smack of outright malarkey… Note that the points below do not refer to any confirmed facts.

1/ Russians had a hand in the tragedy – they had vested interest in getting rid of many Polish officials inconvenient for them, particularly president Kaczynski who was determined to fight for truth and his speech on Saturday could have thwarted the reconciliation policy pursued by Mr Tusk and Mr Putin.

2/ The crashed plane which had undergone an overhaul in August 2009 was deliberately wrecked by Russian secret services. Their agents allegedly tampered with the steering systems what could have impeded a safe touchdown.

3/ An explosion on board – some eye witnesses claimed they had heard a sound typical for explosion, akin to a bomb going off.

4/ Russians deliberately created a fog in Smolensk (as they could use chemistry to clear up sky over Moscow) either to prevent Mr Kaczynski’s appearance on the ceremony or to trigger a disaster.

5/ Black boxes were swapped – Russians were familiar with the technologies used in Tupolev planes so they concocted the record of the flight

6/ Warmth of Russians is just a smokescreen – their sympathy and help they offered us should distract our attention from their involvement in the scheme.

7/ The equipment on Smolensk was broken down – some say a few hours after the crash soldiers replaced some parts of air traffic control with new ones to cover up the blatant violation of safety issues.

8/ Mr Tusk was embroiled in the scheme. He plotted it in liaison with Mr Putin and Mr Komorowski. To boot all politicians had no other duties on that day and rushed to deal with the tragedy.

9/ Pilots faced pressure from president Kaczynski to land heedless of bad weather conditions (this thread was widely discussed on Poland-related English-language blogs).

10/ Katyn is a cursed place for Polish nation.

11/ The disaster was predicted by Nortradamus, who wrote about metal birds, which carried some eminent people from an invincible country and the country was soon invaded from the East.

12/ Not all victims died on the spot, some survived the crash but Russian secret services swiftly came around to kill them.

My comments to theories no. 11 and no. 12
Ad. 11/ I have “Centuries” by Nostradamus (in English) in PDF and searched for key words which appeared in the Polish version – nothing like this can be found there.

Ad. 12/ TVN 24 reported yesterday someone uploaded a film from the scene on which one can clearly hear shots. TVN 24 says however the film was uploaded on Tuesday, while the same footage was shown by Russian TV a day earlier.

Another note – Poles remain split over the funeral on Wawel. He worst thing is that I got lost, because there are several versions concerning the person behind this idea. Some try to suck up credit for the great idea, some try to shift blame to others.

Tuesday, 13 April 2010

From shock towards paranoia

The discrepancy between media coverage of national mourning and what I see in Warsaw is growing. I have written about it in comments on other blogs, so in short – I could not see mourners on the streets and in my school, people behave normally, talk about down-to-earth issues, if they mention the tragedy it’s only because another event was called off due to mourning. As the comments on sundry forums imply, those people who gathered outside presidential palace did it mostly for fun and to meet other people. After all a human being is a social animal – no wonder they came there to take photos, sing and share their feelings.

I would like to thank Russians here:
1/ for the sense of fraternity our nations have probably never felt,
2/ for president and prime minister praying for the fatalities,
3/ for a personal address to Polish nation,
4/ for help given to Polish prime minister and families who went to Moscow to identify bodies,
5/ for national mourning on a day which should be joyful for all Russians,
6/ for thousands of white and red flowers laid outside Polish embassy in Moscow,
7/ and for broadcasting Katyń film in first channel of Russian national television in prime time.

But is it a right moment to say a friend in need is a friend indeed?

I am also grateful to Polish officials who have decided farewell ceremonies and funerals will be held over the weekend. Holding it on working day would unnecessarily bring Warsaw and Cracow to a standstill.

I find it increasingly harder to put up with worshiping the deceased president, mostly by those ones who would slag him off just a few days ago. Once a clunky man making funny faces is now almost venerated, one element seems to be missing – a halo over his head. The Economist has published a balanced review of Mr Kaczynski accomplishments. Mr Kaczynski, who died along with 95 others, including many of Poland’s military and political elite, in a plane crash in Russia on April 10th, epitomised some of the best and the worst features of Polish politics. - they write. In Poland the profile of Mr Kaczynski’s is likely be angled. Until 10 April 2010 his presidency was controversial… After 10 April it has been idealised.

Meanwhile some bloggers allegedly cleaned up their sites what means they deleted posts which included adverse opinions about president. I didn’t, the full record of my critical views on his presidency is more or less here.

Somebody has also put forward to bury Mr Kaczynski and his wife on Wawel, among the most distinguished Poles. This looks as a misunderstanding. As a head of state he deserves a funeral and grave, but on Powązki Wojskowe, where many outstanding Poles are buried. To make it clear, I think none of Polish politicians would deserve to be buried on Wawel, even those whom I respect most should not be granted such privilege.

Poland’s civil society holds strong and the action to prevent it on facebook was supported by almost 10,000 people within a few hours. I support the idea to grant Mr Kaczynski a title of freeman of Warsaw – he was a mayor of the capital, his tie-ups with Warsaw were very close, but to name a new bridge or the national stadium is out of place for me.

NIE dla pochowania Kaczyńskich na Wawelu!

I know it’s controversial, but avoiding bringing up debatable issues will get us nowhere. Nowhere but to distortions.

Sunday, 11 April 2010


The worst thing about such tragedies is that they strike out of the blue. No one has a tiniest inkling of what might happen soon.

Friday was extraordinarily dark and gloom. I even regretted I had taken a camera as I went with my parents to Janki. On our way back we could observe a magnificent cloud bank and mixture of mist and drizzle setting in. Strange was the weather, resembling rather November than April. Saturday was the fourth day in a row when in spite of good mental feeling my head was heavy as if was made of concrete. I rolled out of bed, did the morning toiletry, tidied up my room, turned the computer on, browsed a few pages, posted on comment on MD’s blog, switched the machine off. My eyes were a bit sore and I thought it would be better not to expose the to computer screen. I set out to read on a book (I’ll later review it here), but my mother went into the room, we exchanged a few opinions about my physical tiredness. I refuted arguments that I should redress balance between working and physical rest by saying lots of people have it worse than me. I recalled my thoughts and thankfulness for every day passing without a disaster. They crop up from time to time, unbidden. Then I turned the radio on, someone mentioned in passing Polish president’s plane crashed in Russia.

“President will be on crutches” – I thought. I turned the computer on, the Reuters agency reported a devastating death toll, the next news got only worse.

The first reaction is disbelief. The sudden death of so many officials, including the president is not what anyone would expect to happen. Then, as the list of fatalities was being announced, disbelief morphed into shock, the truth began to sink in.

After a few talks on the phone the next thought is what the Polish state has to carry on. Our institutions must not stop functioning. I felt deeply sorry for Mr Tusk and Mr Komorowski who had to act quickly in the face of tragedy.

The Polandian post on the plane crash gives three good comments about it. I tried to follow the English media at the time, they gave a more neutral picture and I could find out about what Polish media were afraid to inform about – who was killed there. Island1 and Scatts have a much more bystander’s view on the situation and could mention two things. Thank you guys for these valuable remarks.

It has to be said that Kaczynski was not a popular figure among our readers, but nobody would have wished such a sudden and appalling end to his political career.

I wished Mr Kaczynski would end his term in December and would rather be busy looking after his granddaughters. The departed president had a vision of Poland, the vision I disagreed with, but it was stronger and clearer that what other parties presented. And he was determined to put it into practise. Quite possible he was a friendly and chummy man, but in politics he was unable to shape his image and we perceived him as stand-offish and terse man.

1/ Nobody would choose this way out but it does mean Mr. Kaczynski will be remembered very differently to the way he might have been had this not happened

A word of wisdom – I feel sorry but I do not want Mr Kaczynski to become a national hero, he pursued Polish policy in a certain way, was respected for how he could defend his stance. He did not lay down his life for Poland. He was flying to Katyn to pay tribute to Polish elite who were murdered by Soviets and died in a plane crash.

2/ Excellent opportunity for Mr. Komorowski to secure (or not) his position as the next President of the Republic of Poland.

Not necessarily Scatts, Law and Justice is now in the soup, it lost many politicians, but many people might want to vote for a candidate who would continue a mission of Mr Kaczynski. And we have to keep fingers on a pulse. I feel sorry for everyone who lost their family or friends, but it is not a reason to give them a head start in elections.

I hope the investigation concerning the tragedy will be fully transparent, even if the truth for Poland is inconvenient – remember that black boxes might include records of conversations on board which may cast a new light on this accident.

Jamie also suggested in my comment box it was a black swan event. It occurred to me yesterday, the very disaster fits the definition, but none of the rules for a black-swan-robust world could prevent a tragedy. Apart from one, not listed – “don’t put all you eggs into one basket”.

My UK readers when they woke up on 31 August 1997 did not expect to hear the news that Princess Diana died in a car accident.

My US readers when they woke up on 11 September 2001 did not realise that day would bring the biggest shock in the history of their country.

And not as single Pole would imagine yesterday morning that so many officials would pass away in a few hours.

This event teaches us once again how to live with uncertainty and reminds us how fragile human life is.

Saturday, 10 April 2010

May they rest in peace

Polish government’s plane carrying the president Lech Kaczyński and his wife, deputy speaker of Polish parliament Jerzy Szmajdziński, some other country officials crashed today in the vicinity of army airport in Smolensk, Russia. Reuters agency reports 87 people died in the crash.

My country goes into mourning after the biggest tragedy it witnessed in my lifetime. Poland lost in a split second many representatives of its ruling elite – ministers, deputies, governor of central bank are among the fatalities. The number of people who died in one place passes all beliefs.

First questions concerning breaking the rule that many VIPs cannot fly the same plane are being asked. First unofficial messages say the early presidential elections will be held on 20 June 2010.

I am here symbolically paying my respects to all Polish public figures who departed today.

BBC published an obituary of Polish president.

Wieczny odpoczynek racz im dać Panie…

Thursday, 8 April 2010

Black swan theory

Easter’s over and I can return to one of my favourite topics – today, if you carry on reading, you’ll dwell with me on the causes and dealing with the current financial crisis. This time the new light will be cast by a Black Swan Theory, a term coined by Nassim Taleb to describe rare, but significant events which hit out of the blue. The phrase applies to all spheres of life, but events called black swans occur disturbingly often on financial markets. Stock market crash in 1987, LTCM collapse, dotcom bubble, or mortgage crisis are the events which should happen in theory once in a lifetime, but they all happened within the last quarter of century – much too often. The wikipedia entry linked above gives a fairly comprehensive overview of the Black Swan Theory, but in line with the rules of the portal it has to present a neutral view. The blog is subjective and gives room for biting comments. I’ll refer only to one part of the entry – principles which set simple guidelines on how to create a system resilient to black swans.

1. What is fragile should break early while it is still small. Nothing should ever become too big too fail.

Adam Smith was the first to say banks should be small enough to go bust easily and without causing major harm to the economy. Banking behemoths as we see them today are prone to a big moral hazard – costs of bailing them out are lower than total costs of their potential collapse, what gives a lot of incentives for blackmailing – bankers can tell the government: “rescue us, unless you want to have even bigger troubles”.

2. No socialisation of losses and privatisation of gains.

Generally the game financial institutions, governments and taxpayers have been playing before and during the crisis is like tossing a coin. If head, we get sky-high bonuses, if tail, taxpayers pay.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

In reality those who make mistakes usually stay on and are not held to account for their misdeeds. It’s not only about taking responsibility, but mostly about avoiding the same mistakes in the future.

4. Do not let someone making an "incentive" bonus manage a nuclear plant – or your financial risks.

Incentive bonuses usually encourage people to take greater risks. They are eager to do so because remuneration schemes are flawed (see comment to rule no. 2). Before the crisis CEOs of banks would get bonuses for making high profits resulting only from taking excessive risks, this was possible only in golden years, but the managers took no responsibility for the losses. I still wonders why shareholders agreed for it. Another aspect is the pressure from stakeholders. Banks which held back from aggressive and risky investments lost clients who had expected them to make more and more money.

5. Counter-balance complexity with simplicity.

“It doesn’t matter that we don’t understand how it works, the rating agency gave it AAA so we’re playing safe”. I still can’t understand how according to one of mathematical models, worked out by David X. Li, a few thousand subprime loans packed together and securitised can give prime quality securities. A good financial system should offer transparency to its participants. If you don’t understand something you should back down and not put your money in it. But it’s convenient to pretend that you don’t see something is amiss as long as you’re cashing in on it.

6. Do not give children sticks of dynamite, even if they come with a warning.

Unfortunately people who don’t know how to handle risks should not do it. This in my interpretations greatly refers to adjustable-rate subprime mortgages which turned out to be a time bomb for mortgagers. I don’t know if they came with a warning, even if they did, everyone ignored the obvious danger.

7. Only Ponzi schemes should depend on confidence. Governments should never need to "restore confidence"

The rule above describes the biggest fault of central banks and governments during the crisis. Restoring confidence means eliminating fear, which is one of the biggest evils that might happen. Of courses uncle Ben and cousin Barack saw it as lesser of two evils. In the short run it helped put out the fire, in the long run history will repeat itself and people won’t learn from their own mistakes. When the financial markets shook off they began aggressive speculation anew.

8. Do not give an addict more drugs if he has withdrawal pains

It’s an universal rule, not only in terms of paying the price of one’s own failures. Whenever something got wrong and begins to fall down, we should let it collapse. Giving more drugs is like prolonging the agony, it’s a temporary measure to solve a problem, but in the long term it only heightens problems. Suffering after doing wrong is like a penance, it clears the air.

9. Citizens should not depend on financial assets or fallible "expert" advice for their retirement

Isn’t it about Poland? Or am I hypersensitive?

10. Make an omelette with the broken eggs.

I don’t get this one, it must be something about absurdities, departure from rules, or maybe just ten is a round number.

Who should be familiar with Black Swan Theory?
Bankers? Maybe.
Taxpayers / citizens / voters? It wouldn’t hurt.
Politicians? They should for should, but would they follow?
Regulators? For damn sure!

Those principles have struck a chord with me because of their simplicity. They also fall into line with common sense and general sense of morality. A world for upstanding people could be easily driven by them and it doesn’t mean it would have be exist without stock exchanges and derivatives. Everything’s for people, including speculation. The point is that if you take risk, you should do it voluntary and you should be ready to suffer consequences. And advisably, you should be afraid. Fear should not paralyse you but should keep you sane.

For those always insatiable two links ->
1. Alan Greenspan refuses to admit loose monetary policy led to the crisis
2. Roger Lowerstein's article - guy thinks grandpa Alan and uncle Ben screwed it up all the way!

Saturday, 3 April 2010

Lent is over

It might be actually misleading for some people who know me and who know I’m not religious that I’m writing about such issues. I’m very reluctant to declare to be a wierzący niepraktykujący (EN: believer, not practising), it sounds hypocritically and smacks of a self-contradiction – it’s like saying “I’m a driver, but I never sit behind the wheel”. I’d lie if I told I don’t believe in anything, I’m still searching, but I refuse to seek any assistance from the Church, which is these days not what it is meant to be and which sullied its reputation with duplicity, backwardness, richness, inclination to preach, but not to practise it. What back in PRL was a backbone for the nation distressed with communism has become “the Fifth Estate”. I’m not going to go on about sins of the Church, starting from the middle ages and what brought about reformation up to the scandals that plague the Church today, with which it can’t cope, I’ll only have the courage to notice that outflow of believers and mounting lack of trust to the Church is an after-effect of its conduct.

Nevertheless, I embrace some of the ideas espoused by Christian teachings. One of them is Lent – a period of forty days of ascetics followed by the Holy Week – altogether forty six days that should prepare believers for the Resurrection. Many believers make resolutions for that period – many abstain from drinking alcohol or partying. Slightly inspired by annual Michael Dembinski’s Lenten posts (this year for no apparent reasons he has not kept his readers up to date with his accomplishments regularly) I decided to follow suit and make resolutions. Whenever you think about giving something up, you should realise you have to go without something pleasurable and what you do quite often. Therefore I reckoned that holding back from drinking alcohol wouldn’t make sense (I drink once in a blue moon, but had and not wasted two occasions to drink during this Lent), the same about coffee (I don’t drink it to wake myself up but to taste it – what could be a reason to give it up). I made three resolutions:

1) Not to eat sweets – I can’t say I have a sweet tooth, but prior to the Lent I reached out for them and nibbled too often. Result – for 46 days I haven’t eaten any biscuits, sweets, cakes, etc. and haven’t added sugar to coffee (I haven’t added it to tea since summer 2008).

2) Do physical exercise every day – I did it almost every day (indeed I caved in after returning home late in the evening) and managed to lose some fat tissue from my belly, which was a goal.

3) Not to use car, as a driver and a passenger, what means going everywhere by public transport, bike or on foot – not a hard thing given my commuting habits, but surely it’s good to move in a less convenient way and unclog the roads and not contaminate the air.

After my first Lent I have one reflection – it doesn’t matter whether you are religious or not, whether you believe or not, refrain from some pleasures in a world of unbridled consumerism will do you more good than harm, will strengthen your will, will teach you to appreciate what you have, instead of yearning for the unattainable.

Thursday, 1 April 2010

The worst human trait

I was taking pleasure in watching the sun going down today and out of the blue… it dawned on me. Many times I was wondering what the worst, the most irritating trait was and now I’m sure. What makes my hackles rise the most is UNRELIABILITY.

I can put up with many shortcomings. Not everyone has a gift of the gab, not everyone’s clever, not everyone’s creative, even-tempered, has a sense of humour etc. We have no influence on some of our traits, we are born with them, all we can do is to work on them, raise the bar for ourselves. Some traits are inborn, but others can be fully shaped. Two best examples are a penchant to depart from the truth and the unreliability. For ample reasons, people are inclined to find justifications and excuses for lying, in this respect I can turn a blind eye on this, since I can’t swear I am always truthful, I’m just human and oddly enough, I would find it easier to forgive a lie than a broken promise.

I’ve already met a few people, who’ll go down in my memory as totally undependable. Do you know what I mean? How many times has somebody told you they’d do something and they didn’t? I can’t stand repeating those promises “next time for sure I’ll do it”, “I promise to do it”. I feel treated like a downright idiot when I hear such hollow words for tenth time, because I know they will go down on their promise. They’ve done so several times, why should it be any different this time – I ask myself. In this very respect I raised the bar very high for myself. Most people who’ve cooperated with me would tell you they’d sooner forget about a promise I made, then I would. If I can’t do something, or can’t meet the deadline I let others know in advance, apologise, explain why and offer to do what I am supposed to do as soon as possible. I feel dirty bound to do so, cause if somebody trusts me they have a right to rely on me and expect me to meet my promises.

In my books, if you want be successful and appraised, you should set some standard for yourself, in my hierarchy I put reliability on the top. It’s in a way easier – whether I’m dependable or not depends only on me, not on my skills, flexibility, intelligence or features.

The unreliability is a cancer that infect contemporary societies, from its top (politicians who promise a lot before elections) down to families, companies, communities. “I’ll do it”, “I promise to do it”, “I can assure I’ll finish it off”, “For sure you’ll get it”. And more and more often I don’t believe, I was taught not to believe.