Sunday, 28 July 2013

Meg - the first decade gone by

Some two weeks ago I was scoffed at, by my somewhat older female workmates, for sticking to my almost six-years-old, always reliable, Nokia 3110 Classic and not upgrading to an all-the-rage smartphone / iPhone or whatever else a modern corpo-lemming needs to swank. I refuted their half-jocose, half-serious remarks with a question how long their previous devices worked before packing up. Unsurprisingly, one said her previous smartphone had cracked after hitting table surface after being dropped from the height of 20 centimetres, the other’s iPhone had broken down after a few months from purchase, helpless technicians hadn’t known how to fix it and eventually she’d had it replaced under warranty with another shitty iPhone which even doesn’t have a removable battery. Since early 2008 when I purchased my Nokia, it has never let me down. A few times over that time it crashed and I had to turn it off and on, a few times it lost signal and needed a restart, but except for those minor incidents, the handset worked like a clockwork and nothing seems to indicate its end is near. Of course given its age it can conk out any time, but if it happens, I’ll have a justification to buy a better device, probably a low-end smartphone.

The other story is that they also asked me how I can live without access to internet in my mobile phone. Well, the real life is offline and may it stay so. I don’t keep track of the ever-accelerating world and don’t follow my friends on facebook incessantly and don’t miss it. It’s simply healthier not to be in a debilitating state of continuous partial attention… Is it something worth missing out on?

How I’ve used my phone and why I’ve not upgraded to a state-of-the-art device is the essence of my policy towards consumer durables. I generally:
- buy only brand new stuff,
- choose items of good quality, with as many features as I need to have (why paying for gadgets I won’t use?),
- take care of the stuff so that they serve me longer than their built-in obsolescence,
- get rid of them and replace with new when their wear and tear justifies it.

Such should be also the way of handling probably the most expensive consumer durable – a car…

As a matter of principle I wouldn’t buy a used car. Supply of used cars in Poland is limited by low number of sold new cars (many of which serve as company cars which doesn’t bring a good testimony of their condition after a few years of use), so used cars come to Poland from its western neighbours. Given how much I heard and read of crooks trading in used cars, I’d never buy one. Well-maintained used cars are:
- either not for sale, because due to price homogeneity market values them almost at the par with their rickety counterparts, hence owners to well-maintained cars have no motivation to sell them,
- if they are sold, the new owner will be someone from family or friends of an old car owner or a car trader, which brings about negative selection…

With a brand new car you get the producer’s warranty, new technologies and clean history of the vehicle. It does depreciate over the first years rapidly, but why should you care if you plan to keep that car going for 10 – 15 years? You use the car properly, have it serviced at regular intervals, parts which wear out and engine oil are changed when due and the car should serve you for 10 – 15 years. Then comes the moment when each, even the best car, becomes less reliable or simply requires more money sunk to keep it going. Even if repairs are not expensive, you need to take the trouble to find a cheaper spare part, pick it up and have it replaced. So after all there comes the moment to part company with the old car without regrets and buy a brand new car that should serve you years. Provided in the era of built-on obsolescence the newly produced car are that durable... Time will tell…

The reason why I write it all is that today is the 10th anniversary of the day when my car was purchased. As a young driver I’ve been in the luck of having my first car neither purely brand-new (not recommendable for beginners behind the wheel), nor purely used. My parents signed it over to me two years ago when my father decided he wanted a new car. Probably hadn’t it been for my need (a proper word, maybe I should write ‘whim’) to have a car, he would’ve driven it for some time more, but given the circumstances, the choice was obvious…

After 10 years the car still looks well and holds up well. Engine and transmission are in superb condition, bodywork and some of auxiliary elements signify their wear and tear (although there is no trace of rust!). To the right – snapped on 18 June 2013 after a wash and some polishing ;) Maybe not like driven out of showroom, but as for a decade-old vehicle, looks splendidly.

The car:
- has never had a collision on the road, although has scratches and one repaired dent after too close meeting with objects other than other vehicles,
- has never broken down on the road to the extent it had to be towed away to a garage on a trailer and never has it failed to start,
- has always been serviced by Renault dealership’s garage (a bit more expensive, but as long as you prove you know the onions and keep tabs on mechanics, they won’t rip you off) and most of the time parked in a garage,
- when I was behind the wheel endured temperatures (thermometer readings) from –24C (cold start, not just driving out of garage into such temperature) to +36C and tomorrow the latter record stands a chance of being tomorrow, when heat wave that has come over Poland is about to reach its zenith),
- over 10 years had 6 breakdowns of auxiliary elements (in a French car inevitable), out of which 3 over the 3rd year of usage and 2 over the last year (total cost of unplanned repairs over the last year: slightly less than 500 PLN) and 2 minor breakdowns of engine / transmission – related elements (cost of repair below 1,000 PLN each time),
- at the moment has a mileage of 59,693 kilometres.

The odometer reading is the effect of simply using the car only when necessary. As I counted, the car had 13 longer trips (> 100 kilometres to a destination) which contributed to some 10,000 kilometres of mileage, the rest driven near Warsaw. My general principles are:
- if the distance to cover is too short to let the engine heat up, there’s no point in starting it – engine and other elements wear out most before working temperatures is reached (for the same reason I don’t understand why people cherish low-mileage car from someone who used it only on short distances – what’s the percentage of mileage driven with warm engine?),
- in Warsaw, unless justified, the car should be left by the nearest underground station and then public transport should be taken,
- when weather permits and I don’t go to work, I use a bicycle…

The plan now is to use the car as long as it is reliable. Given its age, frequent breakdowns may begin to plague before long, but I hope to enjoy at least two years of problem-free usage. And then – option one is another car for years, but preferable is the second option – a company car. Even if I had to pay for petrol from my own pocket, it would spare me depreciation, servicing, repairs, insurance and other car-related expenses, which at the end of the day are… money down the drain.

Sunday, 21 July 2013

The Southern Bypass – probably not the last update

The promise kept. The weather this morning was anything, but not conducive to cycling. Clear blue skies, warm, but not hot (slightly below +20C), northerly breeze taking the gloss off heat. Perfect conditions to get on the bike and check the progress on local section of the Southern Bypass of Warsaw, according to original plans, scheduled to be opened in April 2012.

I cycle safely up the cycle path along ul. Puławska, then use the pavements rather than road. When behind the wheel I’m so fed up with irresponsible cyclists (the worst incidences of thoughtlessness among drivers and cyclist can be observed on narrowed section of ul. Puławska where junction with the Bypass is being built) that I never share the street with cars on busy roads. It’s safer for everyone – I have to mind the pedestrians or cycle slowly on bumpy roadside, but don’t need to worry that a carefree speeding meathead runs me down.

I turn left to ul. Ludwinowska and a few minutes later I reach the intersection with ul. Poloneza. The dirt track running to the newly built splendid viaduct over the bypass has been hardened some time ago. Once I even dared to drive there in an attempt to pass by Friday afternoon traffic jam on ul. Puławska. I drove mere 15 kpmh and was overtaken by three hell-bent drivers, probably all in company cars. Hasty bastards whipped up huge billows of dust which until now lingers on my car’s bodywork…

Reluctant to pedal hard, I scramble up the viaduct and look towards ul. Puławska. A layman’s eye tells me finishing works are left to be done on this section and long-awaited opening may come to a pass. I finally see the light at the end of this tunnel. Opening in 4Q2013 is doable, provided the recent pace of work is kept up…

Then I ride west to cycle up the other viaduct that takes ul. Hołubcowa over the expressway. To the right – this time looking west, towards junction Lotnisko. Compared to what I saw here in early March, the road builders have caught up impressively. The recent progress is commendable, but won’t outshine slackness of the contractor over the first 3 years of construction.

I roam around the vicinity of the junction, walk down the technical stairway and snap this. These are the two main roads of the bypass, each designed to be divided into three lanes, running beneath Radom line tracks. Unlike many other cyclists, I didn’t take a ride through the road. The works were not running at full steam, yet some vehicles were moving there and some workers were busy tidying up the expressway. Unlike most Poles I have much respect for health and safety and avoid entering areas I should keep away from. It’s not about being reproved by a security guard, but about my own safety. A driver of huge truck should focus on his work rather than on watching out for reckless trip-makers…

Then I head home down ul. Hołubcowa. Using the word ‘ulica’ to describe the bumpy dirt track is at best a misnomer. The track, passable for SUVs and cyclists, allows me to get to ul. Baletowa and what I spot behind the level crossing…? A police car. The policemen were lurking behind shrubs to catch drivers ignoring the ‘STOP’ signage before the crossing. I must admit whenever visibility permits I also do not bring the car to a halt. Who knows how high the fine for such misdemeanour is?

To the right – water retention ponds by ul. Kórnicka. Lifts the spirit whenever I can see something that looks decently. Hope the new ponds will do their job properly and protect nearby area from flooding after copious rainfalls…

Sunday, 14 July 2013

Looking for a summertime hangout

While being a visitor to far-flung places, I usually am enchanted by proximity of summertime leisure spots for locals. Easy to discern such places when pop by an specific area for a while, but you pass them by several times, such venues do not impress you… Why?

When summer is at its height, the weather is fine and you are staying in town, only sinners and layabouts pickle at home. Nearby places of leisure should beckon and the temptation must not be resisted. For those living in the southern suburbs of Warsaw, I prepared a short guide to local tourist attractions – places “within a stone’s throw” being a good location to spend summer afternoons.

Las Kabacki – huge forest within southern borders of Warsaw. From where I live you can get to several entries to it in several ways: by car (not recommended), by bus (also not my favourite), on foot (kind of far away, especially if you happen you walk in +30 heat), or by bike (most recommended).
Key advantages: proximity, trees give shelter from the heat.
Key disadvantages: range of activities is confined to: walking, running, cycling; the very latter is prohibited on many paths, crowds of people on Saturdays and Sundays…

Powsin – when saying this you may mean either botanic garden or leisure park. The latter is more popular among inhabitants of southern Warsaw districts and can be easily reached by 519 bus (provided the routes have not been changed), by wide and popular cycling path running from Wilanów, by car and on foot. The most preferable way of getting there is of course by bike – not only healthy and pleasurable, but also inexpensive and not time consuming and spares you the problem of “where to park my car”.
Key advantages: good place for a date ;-), gives shelter from heat, lots of bars and possibility to do sports, feels like being on holidays.
Key disadvantages: from my where I live, kind of far away, but for migrants living in their mortgaged apartments in Wilanów – ideal…

Konstancin sanatoria park – the town where my grandparents live has a specific micro-climate, making even over +30C heat more bearable. The phenomenon of slightly cooler spot is noticeable all over the year. During winter thaws snows linger there much longer than in Warsaw or Piaseczno. The park and tężnia have been refurbrished quite recently and have become popular with locals and Varsovians. The destination can be reached in same ways as previous ones (take 710 bus from Piaseczno or from Metro Wilanowska terminus).
Key advantages: good place for a date ;-), fresh, humid air, gives shelter from the heat, many cafes and restaurants around.
Key disadvantages: crowded to the limits at times, cycling in the park is not impossible, but being considerate to comfort and safety or pedestrians requires you to take off your bike, kind of expensive if you want to eat out a lot.

Pond in Mysiadło – well, the nearest spot to my home, just 1 kilometre (to the right, shot on 1 May 2012). There was a time when local authorities wanted to invest in a place and turn it around a magnificent outdoor leisure centre. The pond was meant to be cleaned up, including the floor, where you could find rubbish dumped there back when PGR Mysiadło was in operation, sand was meant to be dumped to the shore, some more benches put up… Plans were ambitious and eventually have been given up. The place is now only a hangout for local pissheads, teenagers and anglers. Actually almost everyone who sits by the pond has the same goal in mind – boozing. Not recommended. And given virtually everyone sees in the pond area a booze-up venue, plans to revitalise the place will be hard to pursue.

Górki Szymona – allegedly the pride and joy of Piaseczno. Maybe I am biased, but if the town in which I spent first seventeen years of my life has anything to boast about, I’m a Dutchman. I ventured there last Sunday to check out how the place where I would go with my parents some twenty years ago looks and, unsurprisingly, little has changed.

To the right – the standpipe is where it was in 1994, I recall well my father developed a habit of parking his Fiat Uno next to it. Only the trees are higher, the road running towards the place has not even been tarmacked… In the background – a chap (was not a pleasure to cycle past him, the odour could not be captured by the camera) pushing a rubbish cart – fits the place perfectly.

To the right – for a short moment I forget I am mere three miles from home and imagine I’m holidaying. There’s a lake, there’s a pier, an angler on the other side. Behind me someone has pitched a tent and its dwellers are eating breakfast.

To the right – the sand-covered hill, why and wherefore this place is named the way it is named. In my childhood it was the place most ‘tourists’ would lay their blankets and towels. Nearby was a sandy shore and swimming baths.

To the right – I tried to cycle around the pond and ride through a wide footpath. It is the only place in the whole area that seems to have a spirit. Finally I did not dare to cover the whole path by bike and turned back. I have to confess I did not feel safe there in broad daylight.

This is the essence of Piaseczno – I feel safer in Warsaw late in the evening than in Piaseczno on a Sunday afternoon. On my way to Górki Szymona I was accosted by four tanked-up hools trying to deprive me of my bike. Fortunately the incident ended just with an exchange of “pleasantries”. Local authorities also want to revitalise the area and attract not only locals by letting a private investor build a guesthouse. I doubt those ideas ever prove successful.

Key advantages: proximity (less than half an hour by bike for me to get there), there’s water out there
Key advantages: not sure if swimming there is safe, whether the water is clean, no other attractions around, no snack bar, etc., shady spot…

So if this is not the right direction, next weekend, weather permitting, I plan to check and document the progress of works on the Southern Bypass of Warsaw, from junction Puławska to so-called Grande Canale, the least advanced section of the road.

Sunday, 7 July 2013

Pension system overhaul - follow-up

The topic of pension system reform, my hobby horse, will be keeping us company in the coming weeks. The final decision on the future shape of the pension system in Poland is bound to be taken and announced around the end of summer holidays. Until then several consultations will be run in order to work out compromise on the variant which will be chosen and pursued. Meetings have kicked off and judging by what politicians and government-related economists declare, we are drifting towards the second option, i.e. freedom to choose whether to still transfer part of pension contribution which now goes to private-run pension funds there or to move it to state-run social security fund.

A week ago I mentioned the calculations presented in the government report, whose accuracy has been called into question by independent (?) economists. I took the trouble to download calculations presented by independent economists (in a spreadsheet) and set about analysing them. I can only agree with independent economists that money-weighted rate of return (actually in essence internal rate of return) is a proper and more accurate tool for assessing investment performance that geometric mean. I spent some half an hour poring over the complicated spreadsheet to work out why specific formulas are in specific cells and find causations between them. Then I began to verify assumptions on which calculation had been made. I found a factual error in decreasing fees charged by pension fund managers (not impacting substantially the upshots), but then gave up on further exploration as it was before eleven, it was dark and my mind simply began to drift away. Had I spent one more evening doing all the stuff, I would have probably been able to tell whether the independent economists’ calculations were correct. Third evening for verification of government’s calculations and I would have been home. But in the first week of July when weather is perfect, there are much more interesting things to do than taking apart the report, if it is not going to change anything…

The silver-mouthed politician of the week award goes to Leszek Miller, chief(tain) of SLD. On Tuesday in the public radio he put forward calling parliamentary investigating committee to track and bring to the light irregularities in setting up and running pension funds. Having read the transcript of the interview I can say that:
1) There is no need to call any committee to find out pension fund managing companies charged over 17 billion PLN in fees from contributions paid by future pensioners. They did it within the letter of law (because politicians allowed them to do so), extensive reports on profitability and solvency of pension fund industry are available on Polish Financial Services Authority’s website and everyone (computer-literate) can easily find the numbers,
2) Personal tie-ups of reform-authors with beneficiaries of the reform are disclosed to the public. You may speak here about arrogance, lack of integrity, but not of withheld tie-ups.
3) If indeed it is true that powerful financial corporations lobbied for the reform to secure for themselves risk-free business, they surely did not spare efforts to efface all the traces of what could be found illegal and the committee would not be able to track it.
4) If Leszek Miller suggests pension fund managers were “pumping up” prices of some shares and there were investors in the know of it and benefited from this and he has evidence of such incidents, may he go to relevant supervision authorities. What Mr Miller speaks of is an example of insider trading, which is a (n easy to detect, difficult to prove) crime. Bodies which deal with such form if criminality in Poland are Financial Services Authority (KNF) and Prosecutor’s Office.

On Friday Mr Miller announced his grouping would pass a resolution condemning bygone prime minister Jerzy Buzek and bygone finance minister Leszek Balcerowicz for the pension reform. I know there are thousands or even millions of people in this country deeply convinced pension system reform, in particular creating pension funds, was the biggest scam made in Poland after 1989. Mr Miller also knows it (just as he knows there are millions of Poles hankering after Gierek’s decade) and in his cynical game wants to score a point by speaking out what those people have in minds. I shall refrain from explicit comments, this is pure politics, not policy, something that adds no value to moving Poland forward.

On Tuesday the runner-up, Jarosław Gowin reasserted he thinks “in pension funds there are Poles’ private monies” and insisted in case pension funds are scrapped, it would be best to give that money back to Poles (incidentally Mr Gowin failed to pin down what he actually meant). Last week I outlined a scenario of freeing the assets accumulated in pension funds, this week I will just paste a fictitious news item, thought out by me and posted on my wall on facebook – dedicated to philosopher Gowin.

It does not take a lawyer, nor the Supreme Court ruling, to come to the conclusion public pension fund assets are not private savings, it is a matter of logic, you just need to use your brains.

The conclusions I reached after the last week are depressing. An average Pole knows little of economics. Loads of useless stuff are taught at schools and except for short course of “entrepreneurship” run in high schools, youngsters in Poland are not educated in the workings of economy. I estimate 80% of Poles do not understand what the whose fuss about OFE is about and hence are pliable - one day can believe the government, the other they will believe Mr Balcerowicz is right. Due to lack of education they have to take what they are told on trust. Imagine how much room for misrepresentations, manipulations, populism and propaganda it leaves.

Politicians and journalists also lack proper knowledge and understanding of the topic. Let’s take the example of a sentence “oszczędzać na emeryturę w ZUS-ie”, in English ‘to save for pension in [state-run] Social Security Fund’, literally in “Social Insurance Company”. Stare-run pillar of the pension system is an insurance scheme. When you work you pay contributions and in fact take out insurance from not having subsistence when you retire. It is an example of endowment insurance policy with no payout before maturity. Get it? If not imagine you take out non-compulsory car insurance. If your car is not damaged, nor stolen, has the insurance stolen your premium. In state-run pension system you buy protection, not benefit. Had it been the other way round, the system would have collapsed, or contributions would have been raised.

The other story is poor informational quality lack of clarity in public speaking. This drawback of Polish public discourse is partly the effect of poor understanding of complicated issues. The other, very rare ability most public figures lack, is the aptitude to explain complex issue in simple words, intelligible for an ordinary recipient. Even if somebody has knowledge, difficulties in putting it across make it useless for the society!

Now let’s move a level higher. Imagine the recipient is an educated graduate of economics, who not just holds a diploma, but is familiar with the stuff and avidly interested in it. If such person needs some six hours (maybe it is little) to determine whether rates of return in the report were correctly calculated, does the whole debate not move to another universe, completely out of reach for ordinary people? Should an average citizen know whether geometric mean, or money-weighted rate of return is apposite for comparing investment results? Does this give politicians and economists right to deprive benighted people of the right to decide how to secure their retirement? Thus I moved to the realm of questions doomed to be unanswered which reminds me today’s writing has come to an end.