Not alone, but going it alone

If the blog is a form of a diary, I am catching the right moment to revisit what I wrote half a year ago. With hindsight I know I have committed my sorrow to the blog shortly before I reached a breaking point and thus left the mark of how I felt then to posterity. Most probably writing that piece was one of many essential steps on my way to recovery.

The vital notion I have explored over these six month is that I prefer to be alone than to spend my time with anyone, especially if that “anyone” is a drag for me or spoils my well-being. A human is not doomed to solitude. To realise why this sentence is not wrong, you need to realise solitude cannot be placed at the very bottom of relationships with people. In the language of maths, solitude can be assigned the value of zero, while relationships with people can have values other than zero; positive or negative. Relationships with people who abuse or harass you can have sub-zero values. Most people out of fear of solitude do not break away from such toxic relationships, while often only freeing oneself from people who impair our lives is the only way to build satisfying (having positive values) relationships with other humans.

If I am to draw any conclusions from the previous post, the paramount one is stunningly straightforward – I am not alone. I am surrounded by several wonderful people, many of which I could call friends (though I tend not to overuse that word), but I have developed a habit of going it alone in most of difficult situations. My choice has been shaped by experience of the past, but also by understanding and accepting how my friendships look is impacted by my age. If nearly all my friends either have families or are in long-lasting relationships, we cannot spend as much time together as I would like to, but I have learnt to appreciate the time we spend together, as each scarce good.

Any relationship is about giving and taking. Theoretically, giving and taking should be balanced. In practice, there should be no striking imbalance between the two. Various circumstances in humans’ lives often predestine one party to be a giver and the other a taker. Sometimes life reverses this arrangement, sometimes not. And on top of that, some people are born givers. I have been repeatedly told I am a type of donor.

The question I have faced recently is whether I do not want to take, do not need to take, or do not know how to ask to be given. Probably, all three answers hold partly true, with the very former being least valid. Being a giver brings me enough joy and satisfaction and I do not require my friends to reciprocate it with the same dose of support since if they reciprocated it, they would kill me with kindness. I am accustomed to cope with most of my troubles on my own, but when I desperately need to take comfort in somebody, I quickly find a guardian angel.

I wonder what qualities and individual should possess to become a confidant to their friends. What makes a man trustworthy?

On one of recent nights I found myself in a hotel room with my good friend (and workmate) after an off-site booze-up. The chap, ten years older than me, husband and father to two children, was pissed out of his head, I was moderately inebriated, since I was bound to sit behind the wheel in a few years to reach my next destination. All of a sudden he broke into tears and confessed he had fallen into love with his team-mate (also married and having children) and was running out of power to cope with it. Just one hour later, during the piss-up, he would tell folks around he had never cheated on his wife and would probably never dare to do so. I was so shell-shocked and the chastised him in foul language typical for our casual conversations. Needless to say the next morning we carried on as if that confession had not been uttered. He probably did not remember it and definitely had he not been tanked-up, as every civilised husband and father would have kept his mouth shut.

I still have not got over that confession and temporarily lack anyone to talk it over with, since I must not pass it on to anyone who knows him. The problem is that my closest friend is now his team-mate, the one he claimed to have lost his head for. Besides, I am amazed by how I have controlled myself and averted the problem he has. She is definitely my kind, yet before I realised it I knew she was married and having children and my conscience prevents me from breaking up a family. Besides, she lives and works in a different city, so we see each other on average once a month which helps keep a safe distance.

Besides, as I have counted, every single week I am asked by someone to have a conversation that stays between us only. Sometimes what I am told becomes a burden, I am not a professional helper and cannot absorb other people’s quandaries like a sponge. Getting it off my chest sometimes involves sharing what I have been entrusted with someone else. This looks at odds with keeping it for myself, therefore I need to talk it over, I do it with a person who has never met a person whose secrets I share. Should I feel guilty about it?

At the end, questions for next half-year period I shall revisit in April 2017.

1. I have noticed with some people I hit it off instantly without any effort on my side, while with others I struggle to make it play, but it does not work anyway – why?

2. How to handle an introvert? I have observed I am afraid of such people and find it hard to take first steps in building a relationship with such persons. I have read introverts are not unsociable, but are kind wary of new friends and it takes a lot to win their trust. How to overcome it?

Speechless, all of a sudden

Stand-up comedy is still a niche type of entertainment in Poland. Polish audience, used to low-brow cabaret programmes shot repeatedly on TV, would probably find it as a challenge to embrace as demanding performance as stand-up is. Despite this, stand-up turns out to thrive in Poland, although you should not expect to watch it on TV or hear about it in commercial radio. Fans of this comic style will nonetheless find it easy and inexpensive to buy tickets for live performances of stand-up comedians…

I have learnt it all since for some reason I did a research on stand-up in Poland. While doing this self-assigned task, I also decided to find out who the most prominent stand-up comedians in Poland are…

Uncle Google always helps in such instances and the search engine did the job without reproach. Only my jaw dropped open at the sight of outcomes. I kept opening each next search result and my mouth refused to shut…

Recall the Short story about the price of trust? I have totally put the hapless loan out of my mind and with hindsight had to read over all my postings labelled lent 1,000 to refresh my memories of how I had been duped by my middle-school classmate. Karol, as it turns out, is one of the up-and-coming stand-up comedians in Poland. Back when we were in our teens he exhibited inclination and talent for stage career. His first performances available on youtube are from 2011 when he would show off his skills during open mic sessions. At that time, according to blog records (keeping some stuff for posterity now pays off) he underwent gambling rehab therapy and did his sentence for unpaid debts. As the (alleged?) sentence was suspended and partly swapped for public works, one does not conflict with the other. Internet contains some evidence of his 2012 performances, but his stand-up career began to speed up in 2014. These days probably everyone familiar with stand-up in Poland knows his (real) name. He is not one of most famous comics, however critics and more experienced fellow stand-up comedians claim he is one the most promising young artists, has his unique, individual style and huge potential to grow into an outstanding stand-up comedian. Nothing more about, since I still do not want to reveal his identity.

The reading also reminded me Karol had borrowed money, much more money, from our fellow classmate, Marek. Without further ado I logged on to fejsbuk to find Marek is online and I started off a chat. Marek’s jaw probably also dropped open at the news of our ex-friend being a rising star of stand-up comedy. Sadly, Marek did not recover full 8,000 PLN he had lent. Having been paid off 6,000 PLN and having wrangled too much to get back the remainder (it would require taking the case to the court, as some of Karol’s creditors did), he had given it a rest. Interestingly, Marek knew a bit more about Karol’s tribulations than I did. Up to that moment, I had only been stunned, from that moment I was incensed. I could get over he had deceived me and many of his other former friends, but I cannot get over Karol turning his back on his family who got financially and emotionally ruined getting him out of troubles several times, despite this being none of my businesses, I feel damn sorry for Karol’s parents and brother.

I do not wish badly on anyone, including Karol. As Marek rightly said, maybe it is better he pursues his career as comedian than if he was to engage in massive scams as a lawyer (he had been expelled from the Faculty of Law for embezzlement of money from the student union’s account). But if once he rises to stardom and I happen to see him on TV, I will look at him with disdain and contempt. A man of honour might stumble and fall, but once a man of honour mends his ways, he makes up for the wrong he did. Karol, as the Internet shows, has got up of his knees, but does not think about apologising to his primary-school friends, middle-school friends, high-school friends and university friends (all of whom he still owes money). He will remain in their bad books so maybe his efforts to fix once broken friendships should be spared. Yet, first and foremost he should beg his family for forgiveness. Based on what I know, he has cut off, they renounced him and therefore even if for many he will be a celebrity, for me he will remain a liar and a thief.

The banker’s role, from a bank employee’s standpoint and in Poland

My brother Marek e-mailed me with his observations about my last post, pointing out the importance of the banking sector to the entrepreneur. Indeed - such a valid point that it will make a separate post.

Instead of posting a drawn-out comment in response to Michael’s insightful post, I decided to dedicate a separate note to his text, making references to each paragraph and put his reasoning into the context of Polish banking sector, far younger than those established in Western economies. Beware though, the picture presented is biased, inevitably, when written from a bank employee’s perspective. A for starters, a valid point – I don’t feel I’m a banker, I’m only a bank employee – just an in a 5-year-old Polish joke, there difference between bankier and bankowiec is roughly the same as difference between rentier and rencista… There are no bankers in Poland, there are banks and their representatives who do exert influence on how businesses are run.

Looking in stereotypes, the British believe the Germans have got it right. Their Landesbanks provide a capital lifeline to small and medium-sized family-owned businesses for generations. They know their clients personally (often having a banker sitting on the firm's supervisory board). When the firm needs money to buy another production line because it's just won a new order in South America, the bank looks at the firm's track record and says "by all means".

Is this really true the British envy the Germans how their banking system functions? In Poland such relationships simply cannot exist, because civilised banking sector emerged only after 1989 and had to be developed from scratch. It has grown out of the teething phase quite quickly, as Polish banks have been sold to foreign investors, who have contributed with their know-how of doing banking business.

Deals in which there is a too profound relationship and a client smell a rat to me. Whenever I see a transaction in which someone from a bank knows too well a company, it heralds troubles, if it goes through… The proper distance between a bank and a company increases… bank’s safety…

In the UK, the banks have done away with personal relationship managers and have outsourced the loan decisions to a call-centre in Bangalore, which mechanically ticks the boxes and says 'no', just in case. Online banking has many positive facets for the consumer, but for the small business it has killed off the personal nature of the banking relationship. "Lend to the man, not to the asset" was the golden rule for Mr Mainwaring and his generation of bank managers, who knew their customers, but this is no longer the case. Today, UK banks talk of 'relationship banking' as if it were a new discovery; the truth is they lost it long ago and are now trying to rebuild it on the basis of call-centres, internet banking and algorithms that replace loan decisions.

As a rule – the bigger the Customer is, the more personalised the relationship must be. And whenever you speak of a relationship manager, you should have in mind somebody who knows its customer inside out and fosters its interests, not just foists upon them services they don’t need only to get a bonus. But personalised relationships do cost money, so probably the cost-to-benefit analysis has led many banks to give upon the relationship model. Let’s face it – does an average individual or small company need a dedicated employee who knows them and their needs well? Such approach costs and this cost will be passed on to a client, often reluctant to incur additional expenses. The question one needs to answer is whether a customer prefers and individual approach or low cost of banking services. Cost savings are also the driver of automated loan decisions – in assessing creditworthiness of a small business, one of many millions in the country, a well-designed system will beat a not infallible human. Another advantage of a score-based loan decision system is its quickness – within a few minutes you know whether you are eligible for a loan or not. Of course, again, the bigger the business, the more complex the credit analysis and the less reliable simple algorithms based on questions are cut-off points are. Plus an important note – in Poland credit risk management cannot be outsourced, so whenever you apply for a loan in a Polish bank, be sure it is not farmed out to Bangalore.

Now that the economy is on the rebound, British banks have only got worse in this respect. Want to borrow money to buy a house on a rising market? Why certainly! Mortgage lending is back to 2008 levels. Want to borrow money to expand your small business...? Ooh... That's a bit difficult... We'll need to send someone over to check your business in person, but that costs us money, so we won't bother, so to save time, our answer is no. Bank lending to business is 30%-40% down on 2008 levels (depending on sectors and regions).

The rationale behind such stance is as follows: for housing loans, a bank has a tangible collateral and very strong incentive for the debtor not to lose the roof over their head. For small business the risk profile is far worse. I don’t know how law in terms of creditor protection in the United Kingdom exactly works, in particular I’m not familiar with issues of owners’ liability for their business’ debts. A small company might easily wind down in a few days, owners may go away or tell their venture didn’t work out, having pumped out cash beforehand and the bank is left out in the cold… Oddly enough, in Poland mortgage lending has been curbed, while SME lending also, but not to such extent…

What's it like in Poland? Banks have generally tended to say 'no' from the outset (that lack-of-trust issue again), so Polish entrepreneurs have just got used to financing growth out of saved earnings. Over the economic slow-down (no recession here, remember!), Polish entrepreneurs drew in their horns and sat on their cash, tempting politicians to tax it or somehow put it to better use.

Rightly discerned, it all boils down to mistrust. Banks are too wary to lend to small firms, which are risky businesses, less transparent and more shaky and corporate clients. The other story is when you criticise banking sector’s mistrust, you should keep in mind a bank collects money from depositors and has to return the money to them, no matter of its borrowers settle their debts or not. Banks’ restraint in lending is also a form of prudent management of someone else’s money. As a depositor I also must trust my bank that it doesn’t engage in risky lending.

Poles, like Brits, look across to Germany's Landesbanks as the ideal model for small- and medium-size businesses, yet another reason (along with apprenticeships, a high social regard for engineers and manufacturing industry) why the German economy weathers the storms well (and can still afford to bail out the lazy southern Europeans).

I would also add focus on competitiveness. This praise of the German economy is quite surprising when made by someone who support liberal economic agenda of the Conservative Party.

Ethics in banking? Polish bankers are nowhere nearly as well paid as their British counterparts. The result is that here in Poland, people have no problem inviting bankers to dinner parties, saying 'hello' to them in the street, or generally treating them as fellow human beings.

What earnings have to do with ethics? Ethics is about conduct, not about salaries – one could even point out someone who earns less is more encouraged to behave unethically in pursuit of quick wealth.

Still, banking sector employees in Poland earn well above national average. It just the gap between average salary in the national economy and in the banking sector that is much smaller than in the UK. A relationship manager for corporate clients in Poland earns on average between 10 and 15 thousand PLN per month before tax (some three times more than average salary in the national economy), plus it gets numerous perks (company car, phone, etc.) and discretionary bonuses for meeting sales targets – unlike in Anglo-Saxon banks, bonuses are not contractually guaranteed. Still, although quite wealthy, Polish banking employees are ordinary people, unlike their spoilt counterparts from the City or Wall Street.

The Polish banking sector is generally in sound shape, but still has much to learn about working closely with the entrepreneur for the benefit of the economy at large.

And the essential thing on both sides is empathy – the bank needs to understand the entrepreneur and the other way round – banks have status of ‘public trust institution’ and no matter how ludicrously it sounds, their primary goal is to ensure the safety of funds entrusted with them, this can be achieved by cautious risk management…

Was it really about trust?

A follow-up to the story from late August. Not a breakthrough hitherto, although things have moved on a bit. I still haven’t got back a single zloty out of one thousand I had lent my ex-classmate over six months ago.

I tried to get in touch with Karol a few times, he wrote back to some text messages, but never picked up a phone. Once, in mid-October he claimed he had made a transfer to me a month earlier. When I told him I hadn’t received any money he couldn’t believe it, but also couldn’t submit any receipt of bank transfer executed. Funnily enough, not only didn’t he have any confirmation slip, but also he didn’t know to which bank account he had transferred the money. The next day he dropped me another text in which he asserted he had just transferred money and asked for a reply when I got the money. Needless to say I once again I didn’t see a single zloty.

On 19 November Karol’s mother called me. To my surprise it turned out he had told his family about much more transfers sent to me. She also added he wouldn’t return any money to me because he was “undergoing a therapy” and pledged to take over his debts. We also arranged a meeting next day, in the evening. I met up with her in her house in Piaseczno. Once well-furnished and well-maintained flat has lost its finery. Karol’s mother was quite jittery (they still have some other problems in the family) and explained she was desperately trying to borrow some money to straighten things out. I think I managed to talk her out of turning to a loan shark (who the f*ck invented the name of the company which surely doesn’t cater for provident people?) and suggested she should apply for a regular cash loan in a bank. She also asked me not to call Adam (Karol’s brother) because his nerves were frayed after months of sorting out his brother’s problems and having two full-time jobs for a few months to earn more money.

The sentence about the therapy was the most puzzling. The first supposition that occurred to me was that he had got addicted to gambling and lost all his money as a compulsive casino-visitor. Then I began putting the pieces of jigsaw puzzle together, all goings-on from the day I had lent him the money and the possible sequence of events began to unfold it was even more frightful than gambling.

Schizophrenia is a quite possible explanation. Did he lie he was a chairman of a student organisation or did he think he was? Did he have a job or did he think he had a job? Did he think he had had ordered those transfers and was he really baffled because he couldn’t find any documents to prove it? Was his strange behaviour at home, before he moved out, about which his brother told me, a sign of developing mental illness? Probably I’ll never find out the truth about what has happened, but if it’s really schizophrenia, it’s a tragic story. Karol and his family might have met a tragic fate. He was an up-and-coming lawyer, now, regardless of what he’s being cured from, he’s not going to finish his studies. His family, once well-off are now almost destitute. Will they manage to give him a helping hand after they lost all their ample savings getting him out of troubles? A fellow blogger’s wife, who is a psychiatrist, told me care from family and friends is essential to return to a rather normal life after symptoms of schizophrenia recede. Or will he be left to his own devices on account of his misdeeds?

For two weeks they Karol’s mother didn’t call me. If she fails to do it for a while, I’ll get in touch with her in January. Her assurances to pay me off sounded credible, so I’ll give them at least a bit more peaceful period before Christmas. I told her the repayment wasn’t urgent for me and I could wait for some time, but in the long run I wished to get the money back. I hope we’ll agree on a repayment schedule and I mull over what then. Given their situation and mine, I think it would be wise to write down a part of the debt, but only when they repay more than a half of it in time.

Another question is if I’ll every lend any money (except small change everyone can afford to lose) to anyone. I think lending some money (no more than a few hundred PLN) to friends I keep in with regularly doesn’t have to be ruled out. The other thing is securing the loan by signing a loan agreement, which enables me to claim my money in a court. But if I had signed a valid loan agreement with Karol on that hapless day, would I be better off now? I could sue him, I would have to lose time for wrangling with Polish judiciary system and quite probably the court would hand down a ruling favourable for me, but what would the ruling mean in a situation when my debtor is out of cash and, moreover, insane? Maybe his family would go to a great extent to repay the debt? Who would cover the litigation costs? Finally, I’d have to listen the whole sanctimony…

Hmm… I know by dint of age I’m wet behind ears and maybe I don’t handle the matter properly… So what do you make of it?

A short story about the price of trust

Till some time ago I thought the price of mistrust was much higher, but the moment I had to pay the price of trust I changed my mind.

Karol (name deliberately changed) joined my class almost exactly ten years ago, when we were beginning our first year at middle school (gimnazjum). I don’t even remember if he sat behind the same desk I sat, or was it me who joined him in. As a rather sociable person he quite easily found his way around us (we’d been together as a class for six years on then), though I can’t say he would get along with everyone for the next three years of middle school. Soon by dint of sitting next to each other we became good mates, though I could never say we had ever been friends. We were just good classmates, spent some time after school together, but surely weren’t friends for good and bad times.

Karol soon became the best student in our class and later even in the whole school. Teachers deemed him to be impeccably well-mannered and he soon also became an exemplary pupil. In fact as we all knew he was not just extraordinarily clever. He was a typical “smarty pants” – no one else would get away with getting a bad grade when being unprepared for a lesson, no one else would wriggle out of being punished for cheating during a class test. For some reason he had a charm which worked on all teachers, but my classmates and I weren’t impressed with his continuous wheeling and dealing.

Karol somehow also had an inclination for trying to outfox everyone around, but not everyone could discern it. Many people, including my parents warned me against him, I treated those advice seriously, but they didn’t dissuade me from helping him putting into practice some of his stillborn ideas. Fortunately, it never ended up badly for me, so actually I could have gone unharmed out of this friendship… Within those three years there were many conflicts within our class, but even despite falling in love with the same girl (who eventually chose him) somehow we didn’t fall out, all tribulations didn’t tear us apart.

As I dropped in on his house quite often, I met his parents and older brother, Adam (name also changed), who incidentally attended the same high school as I did, so we had an opportunity to get to know each other better. Although born to the same parents they were totally different – Adam was a paragon of virtues, Karol kept trying to outwit the whole world around.

With time we my friends from middle school fell in with new companies from high schools, old friendships began to break off. Karol and I met usually met in a bus, since we both commuted to high schools to Warsaw. From time to time we called each other, sent text messages, wished happy birthday or merry Christmas. We hadn’t been keeping in with each other since the beginning of our studies in 2006. Occasionally I met his brother in a bus and when I asked him about Karol, I’d usually hear his inclination for wheeling and dealing had only intensified (to Adam’s discontent).

Karol turned to me a few times in 2008 and 2009. Every time he had a great deal to strike but he was hard up for cash and asked me to lend him some few hundred and later even few thousand zlotys. Every time he claimed he had an opportunity to earn thirty to fifty per cent or so and promised to share profits with me, but never revealed what the gooses that laid golden eggs were. As an economist I know such opportunities generally don’t happen in the real world and each time his loan requests were rejected by me.

On 31 May 2010 a text message from him hit me out of the blue. That time he didn’t write about any profitable (read: shady) business to be done, he said we was in an urgent need of money (2,500 PLN) because he had to pay a bill (lie( of a student organisation he was in charge of (lie). The organisation was about to have its expenses reimbursed within a week plus he was about to get his salary within a few days as well. What he described were just some liquidity problems he temporarily had. He managed to earn my trust by offering to meet quickly and sign a loan agreement that would secure the repayment. On that day I was in the middle of exam period and didn’t wish to bother to meet him to sign a stupid piece of paper.

At the beginning I lied to him I had all my money in stocks and investment funds and it would take me three days to turn the assets to cash, but later on I gave in. I transferred to him 1,000 PLN since I realised this was a quite risky move and of course we didn’t meet up to put any signatures. I know very well why I did it, actually despite myself. Just before it all happened I had painfully experienced a blatant example of mistrust and I told myself the relationships between people could not be founded on mistrust, hence my half-baked decision.

Karol offered to return all money four days later in cash. He offered to come to my house, but as it was the day after Corpus Christi downpour I was busy tidying up my garden I asked him to transfer the money to me next Monday. The other reason was that my parents still don’t know about the sunk money – I somehow don’t fancy hearing the “Haven’t I told you” phrase…

On Sunday he asked me to lend him another 500 PLN, I refused. The money I had lent him didn’t appear next Monday, moreover, Karol stopped answering his phone and writing back to my text messages. Soon his voice mailbox got jammed and I realised things must have gone pretty nasty. I got in touch with his brother who promised to tell him to call me, his mother couldn’t tell me where I could find him. Karol’s behaviour became more and more mysterious.

I had a few phone calls with Adam in June, which consisted in reading between the lines. In early July we finally talked openly. Adam politely asked if I had given his brother any money and if Karol hadn’t given it back to me, I politely confirmed to find out I was a bit out of luck. Karol would behave strangely for the last four years, he moved out from home in 2009. For the last two years his family had been paying his debts until they ran out of cash. They decided not to run up their own debts to repay Karol’s obligations, so all debtors who turned to them were simply rebuffed. Karol managed to ruin financially his quite well-off family. From what I could infer from what Adam had told me, I estimate his all debts could total to around 100,000 PLN. Staggering? During the open conversation in early July Adam told me Karol had assured them he had found a job and promised to give his family a half of his salary. Till now (I called Adam yesterday) they haven’t received a single zloty from Karol. He tritely explained it away by telling his employer hadn’t paid him yet. Adam and his parents still remember about my ten stoovers and still openly declare they will transfer it back to me as soon as Karol gives them the money. I don’t hold out much hopes for getting the money back, but given the very good stance of Karol’s family, there’s still a glimmer of hope. I’ll treat this thousand as a windfall if it ever comes back to me.

Never mind the money now. One thousand more won’t make me much happier, one thousand less won’t make me much sadder (but wiser?).

How come? He used to be the best student in the whole school, everyone spoke highly about him, he was held in high esteem by everyone. Everyone said he would be really successful in the future. My teachers from middle school would never believe in the story above.

And the roles reversed. Seven years ago his family was much better-off than mine. Karol had brand-name clothes and footwear, would go on holiday abroad two years in a year, had all electronic gadgets. At the same time I had clothes from normal shops or from a supermarket, I within those three years I was abroad once for a week and spent two third of my holidays at home and didn’t have all newest consumer electronics devices – my parents were scrimping and saving to buy their dreamt-up house. Today my family’s and mine financial standing is satisfying, his family is flat broke and he ended up as a downright cheater.

I wonder what Karol feels now. I’d be surely conscience-stricken having done something so awful. I wonder how it feels to borrow money with an intention not to give it back. When I talked about it with Scatts two months ago he said in the UK he would never make a down payment for a house without securing it properly, which is normal in Poland. In the UK, in turn, he would lend someone a few hundred pound right away, in Poland he wouldn’t hope to get the money back. Cross-cultural differences?

And how did Karol manage to get into such debts? Stock market? Not that easy. Gambling? Possible. Leveraged risky deals is for me the most probable explanation. If you borrow a lot to increase your profits and it doesn’t work out you’re left with huge debts. That probably dragged Karol (and his family I feel sorry for) down.