Questions

For the last few days my attention has been gripped by the issue of Smolensk air crash. For months I had been of the opinion that the issue is not the most important problem and we should focus on things other than dwelling on the circumstances of the accident. But since 12 January when MAK unveiled its report, thoughts on the disaster have assault me almost all the time, from the first seconds after I wake up in the morning, till the last seconds before I fall asleep. Given that I have exam period (seven down, two to go) and dozens of other things to handle, recurring thoughts on the disaster begin to pose a serious threat to my sanity. For this reason I made the decision to withdraw from any political postings and comments on other blogs (including Posłuchaj, to do Ciebie). My resolution will come into force on 7 February, the day I return to work, and sooner or later will be broken, but not before I am sure reviving the tetchy affairs would not bring me into losing my mind. There are many other topics worth raising here, many other discussions and disputes to be held, the range of subject matters will shrink a bit, hopefully with the benefit for the readers.

I had several concepts of this post, one partly developed and given up was to dedicate it to my fellow blogger, Toyah, just like I did over half a year ago. Having changed my mind several I finally settled on hitting you with a list of questions (order is totally random, some of them overlap one another) that keep nagging me... I do not hold out much hopes that you know answer to most of them, but maybe taking it off my my chest will help me sleep restfully tonight...

1. Am I the only one who holds the view that politicians of PiS do not want to find out the truth about the disaster, but they have had their own "truth", i.e. the PO-led government and Russians are the only guilty of that crash and they pick out the facts that match their concept? (If you happen to spot any lies or misrepresentations in GW's article, do let me know about it and substantiate where they depart from the truth)

2. Do politicians of PiS realise what they do actually realise what they do actually mirrors Russian stance on the investigation results, stemming directly from Soviet mentality, in line with which "all our faults must be withheld and others' fault must be highlighted"?

3. Is it in the vested interest of our country to conceal our faults, irregularities and infractions of rules?

4. Does telling openly about errors made by our pilots during the flight translate into "sullying their honour" (giving to the public the information about level of alcohol in the blood of one the passengers was indeed out of place)?

5. Why passengers could enter the pilots' cabin, if such practices were forbidden?

6. Will the pilot of Jak-40 who landed there despite being ordered by air traffic controllers at 09:14:41 to do a go-around and fly off and will he be held accountable of putting lives of tens of people at risk?

7. Why deputies of PiS call pilots, who attempted to touch down the plane, despite being told at 09:55:37 the landing was impossible due to bad weather conditions, heroes?

8. Why were pilots of Tu-154 who in August 2008 had followed all safety procedures and did their utmost duty, i.e. ensured the safety of their passengers were called "cowards"?

9. Why Mr Karski did not have the courage to apologise for his misdeed and did not concede he had been wrong?

10. How the Georgian incident and, above all, the subsequent litigation could affect decisions taken by pilots during the fateful flight?

11. Why politicians (and journalists, both groups recently boast about in-depth knowledge in air accidents), not aviation experts, adjudicate on the causes of the crash? Do we follow example of Russia, where such inquests are politicised?

12.Will Polish independent aviation experts, who have torn a strip off Polish crew, become enemies of PiS, or have they already become, if M(r)s Kempa suggested special services should handle them? (a foretaste of what dissenters may face in IV RP)

13. Is it true captain Protasiuk declined to take off from Okęcie, because he had not received a weather forecast for Smolensk or because the weather report he had received told landing was impossible and why somebody convinced or ordered him to take off?

14. Why did Poles who organised the visits insisted on landing in Smolensk, if they knew the airport there was dilipidated and had been closed in October 2009. why did not they choose another airport and did not provide other means of transport to get to Katyn?

15. Why Russians did not try harder to dissuade Polish pilots from landing or why did they not close the airport?

16. Why did Russian air traffic controllers did not tell Polish pilots they had problems with their tawdry equipment?

17. Why was the first speech delivered by the prime minister Tusk on 19 January so aggressive?

18. Why politicians of PiS tried to hoot down deputies of PO when they were asking questions?

19. Why deputy speaker of the lower house, Mr Niesiołowski acted the fool (or a jack-in-office) during the debate?

20. Why Mr Macierewicz told, in response to the inqiury about his visit to the United States he had met the most important congressman, Peter King, who he had wanted to meet, if it did not happen?

21. Why Mr Macierewicz called the United States "our biggest ally", if they do not give a shit about Poland and their president paid his respects to Lech Kaczynski by playing golf during his funeral?

22. On what legal basis Mrs Fotyga and Mr Macierewicz were authorised to represent Poland in the USA on what legal basis could anyone help them establish an international committee to investigate the causes of Smolensk air crash?

23. On the basis of what legal document could Poland not hand over the inquiry to Russians and was that document really applicable in that situation?

24. Do PiS and their apologists try intently to reshape the image of the late president and make Poles believe he was an outstanding statesman, when in fact, despite being a noble and honest man, he simply did not have making of a head of state and his presidency was generally clumsy and mediocre?

25. Are PiS and their followers trying to paint the picture of downfall of Poland, a falling apart country, run by servants of Russians, traitors, Heaven knows who else, just to justify radical steps they will take if they win the election in October 2011 and set out to crack down on their enemies?

And finally, the most important question.
If Mr Protasiuk had refused to take off and the plane had not taken off with any other pilots in the cockpit, or if pilots had made the decision to land somewhere else or even return to Warsaw without trying to touch down, or if Russian authorities had closed the airport in Smolensk, how would Lech Kaczyński and politicians of PiS have reacted?

There is just one question I can answer. Jarosław Kaczyński blames the Polish government because visits of his brother and Mr Tusk were separated. Donald Tusk could not bring Lech Kaczyński along on 7 April to Katyn because the late president did not receive an official invitation from Russians, which is required by diplomatic protocol (Jarosław Kaczyński and his followers are proud to be ignorant of the rules it sets out). Donald Tusk did not fly to Katyn on 10 April because he was not invited by president Lech Kaczynski. Finally, if president and prime minister had been on board of the same plane, it would have been an appalling violation of safety procedures. And after all we all know that Russians are coarse and simply did not wish to see the man who had openly displayed his hostility towards Russia. And their decision was quite probably provoked by late president's brother...

To break the language barrier I hereby waive the rule of blogging which tells to reply to a post in a language in which it is written. If you want to have your say and do not feel up to the task in English, do it in Polish, I will appreciate it anyway.

Polish economy proves its resilience

A long expected move has just been made. After nineteen months of standing at 3.50% benchmark interest rate of Polish Central Bank was raised by 25 basis points. The decision taken by Monetary Policy Council was anticipated by financial markets.

Thus Poland joined the group of countries where monetary tightening has got under way. The prudent step confirms Polish economy is back on the growth track and in the middle term inflation poses a bigger threat to macroeconomic stability than low pace of GDP growth. Quite probably this year we will witness three interest rate hikes, each by 25 basis points, so at the end of the year the benchmark rate will reach 4.50%. This series of gentle increases will not hamper economic growth, but will ensure price stability (conducive and indispensable to sustain long-term growth) and will head off the risk of overheating the economy. In the long term I expect Polish central bank to focus mainly on inflation data; pace of economic growth will recede into background.

Markets have already discounted the hike. FRA quotations had indicated one hike in 2010, so according to the markets, the decision was belated. Valuations of bond funds and money market funds, both sensitive to interest rate movements (correlation is negative) were down in the recent weeks (bond funds), or levelled off (money market funds). What was felt by participants of "safe" investment funds will soon affect borrowers who have taken out variable-rate loans (that applies to mortgage loans denominated in PLN as well). Mortgage borrowers whose debts are denominated in foreign currencies can expect, holding everything else unchanged, slightly lower installments, as rising rates should cause zloty to appreciate. Interests paid by the banks for time deposits and saving accounts will pick up, but here you ought to expect a considerable lag - banks are not hard up for cash and will not pay over the odds for your savings.

Today WIG20, the main index of Warsaw Stock Exchange hit its many months' high and climbed to levels last seen in summer 2008 (and subsequently plummeted). In the short term I expect stock prices to go up, in the mid-term a correction by round about 10% would be quite natural, my target for the end of the year is 3,200 points (WIG 20). I will look back on these forecasts at the end of the year, to check how accurate they were.

In the meantime I took a glance at comment threads following the news items informing about the hike. Commentators either fulminate against prime minister Tusk and the ruling Platforma Obywatelska (as if they were responsible for the move) or blame conspiracy of foreing banks, all in league to fleece poor Poles... Thoughtless comments, which by the way are indispensable part of the Internet (educated people have little time to comment), remind me that Poles' grasp of mechanics of economics still needs to be worked on...

Sunday trip to Piaseczno and back

Exam period report: four down, five to go...

By the way - do you know today we have Blue Monday and I am suspiciously joyful...

So as I'm stuck in the middle of my last exam period, it might be a good idea to write something concise, approachable and upload a lot of pictures to entartain my readers (and make the post appear longer while in fact it's short).

Last Sunday I decided to make the most of sunshine (for next eight days Poland's capital suffered from deficiency of sunlight) and my new two-in-one piece of plastic (travelcard and debit card in one, issued by Citi Handlowy) with suburban ticket encoded on it and...

14:02, I approach the train station in Nowa Iwiczna. According to my estimations I should have waited for the semi-fast Radom-bound train for a few minutes. In reality, the train was running earlier and I had to run up to the platform. Instead of snapping the engine hauling three new carriages I snapped the train pulling up and the window pane leant against the shelter (above). Needless to say shelters and benches at the station are vandalised soon after the new ones are put in after a previous act of thoughtless vandalism.

Above and left: now I need some hints how to take sharp photos from a train moving at a quite high speed. I have to say travelling in double-deckers is fast and comfortable. Above: a queue of cars waiting before gates on railway crossing in Stara Iwiczna (quite busy road). Left: it's not the coal line, but a stationary coal train on a siding in Piaseczno.

To the left, another queue of cars, this time it's the railway crossing on ul. Jana Pawła II in Piaseczno. Traffic on that street is rather sparse, yet the number of cars queuing up is staggeringly high. Worth mentioning that gates on railway crossings in Poland go down long before a train comes.

Right: just five minutes after boarding the train in NI, I alighted in Piaseczno. There, before the train pulled out from the station, I managed to capture it from its splendid, grimy rear. Display at the top of last carriage shows the train's destinantion. It was the third day of thaw, then in overdrive.

Right: the station in Piaseczno, lit by mid-afternoon January sun. The building has long been due to revitalisation, now it's due in... in the future, I suppose. Mayors and councillors come and go and the station remains run-down...

Left: the same building of the station, snapped from the footpath running over the tracks. Don't expect facilities such as waiting room, toilet or ticket office. Smacks of provincial Poland - watch out for the bicycle chained to a banister or heartfelt plea of love to some Angelika...

Right: derelict sidings west to the station. I remember from early childhood those tracks have been out of use back in mid-1990s. I am baffled by the fact no one has yet ripped them. Rails and bolts could be sold for scrap and slippers could be used as input to one of incenerators, so popular in the countryside... But note that many sidings running parallel to the main line, east of it, are still in use.

Left: the platform of Piaseczno station, as dilipidated as the building of the station, yet capable of serving its purpose. On Sunday afternoon served also as a hang-out for local track-suit afficionados.

Left: looking north from the footpath, tracks run towards Warsaw and converge in the distance. Visibility on 9 January wasn't particularly good, hence a gentle mist on the horizon.

At the station I peeked at the timetable to learn a Warsaw-bound train would arrive in three minutes. After ten minutes of hanging around there to no avail I set off to the centre of Piaseczno, then caught 709 bus to Warsaw and got off the vehicle just before the border of the capital. Right: Piaseczno, ul. Raszyńska. The dismal aftermath of water freezing in crevices between the proper tarmack and new patches. When temperatures fluctuate around 0C water freezes and unfreezes and patches are blown up. Last Friday the street was patched up, but the problem remains unresolved. Come another thaw and here we go again!

Both gmina Piaseczno and gmina Lesznowola are prosperous, but Piaseczno is incredibly badly-run, especially in comparison to reasonably well-run Lesznowola. As you cross the border between them the street is properly tarmacked (no holes at all), pavement is not crooked, but apart from this the picture is not rose-coloured. Litter scatterred around the rubbish bin, butts lying in dirty snow, box belonging to Telekompromitacja Polska S.A. mangled after a car accident, crooked fence put by owners of a private nursery school...

Right: heading back home. I wonder if the place is really as dull as it sometimes seems to be. My neighbourhood is surely not the worst sort of suburbia, nevertheless, it still lacks a spirit...

Anger and shame

The two words above probably best sum up my feelings after International (actually run by Russians) Aviation Commitee disclosed its patchy report on the causes of Smolensk air crash.

Polish experts have raised reservations over the report, conceded biased by Poles, as it totally acquits Russian air traffic controllers and puts blame solely on Polish pilots and organisers of the fateful flight.

Needless to say Russian one-sided version was par for the course and I have even got over the grudge I had borne against them. That nation functions in a specific way and we will not change it, but... Polish experts hold out for conceding obvious errors made by Russians, but do not call into question our own faults, which are numerous.

The picture that emerged from the whole report I have flicked through has left me glum.
Drunk general? I have no idea whether he was inebriated, but if it is true, I am absolutely not surprised. This can be forgiven... But the sum of all neglects is terrifying...

The whole touchdown procedure appeared to be a dicey hit-or-miss suicide mission. Airdrome equipment was pitiable if not defective, weather conditions should have precluded any plane from landing there, communication between traffic controllers and crew of Polish plane was worse than poor and information given by air contollers were, to put it mildly, inaccurate...

And the most dejecting part is the overwhelming fear that influence most tragic decision taken that morning. Russian controllers seemed to be afraid to tell Polish pilots openly the should not land there, Polish pilots seemed to be afraid to take a plunge and fly off there. Everyone seemed to apprehend the inevitable diplomatic scandal caused by the refusal to touch down and the fear contributed to appalling inactions on both sides. In the last phase both pilots and air controllers acted as if they were paralysed, their last moves were totally illogical.

Perhaps I will not be a consolation to many of you, but Polish report will be even more severe and may highlight other faults. All we can do now is to learn a lesson from that tragedy to prevent such accidents happening in the future...

Who's to blame for the crisis, part 2

Exam period report: two down, seven to go!

First days of the new year turned out particularly conducive to various musings about economics. Several questions have been running through my head, but they all have one common denominator…

Did US politicians think increased home ownership ratio would solve social problems and make many poorer US citizen happier?

Did Alan Greenspan think pursuit extremely loose monetary policy that eventually sent property prices soar would bring Americans closer to fulfilling their dreams?

Did mortgage borrowers who could not stand any chance to repay mortgages off their income think they would refinance their loans endlessly thanks to ever-increasing property prices?

Did “financial engineers” think Gauss-Copula would work miracle and turn subprime loans into prime securities?

Did David X. Li. think if one subprime mortgage is a lousy underlying security, two subprime mortgages are two lousy underlying securities, ten subprime mortgages are ten lousy underlying securities, then million subprime mortgages bundled together and packed as Mortgage-Backed-Securities would make up triple-A securities?

Did credit portfolio managers at banks think they could push away the credit risk from their balance sheets through securitisation and did they think it would not return to them?

Did risk analysts at banks think they would always recover principals and interests on subprime loans through foreclosures and selling houses on the market at higher prices?

Did shareholders of those banks think focusing on short-term profit was a sound growth strategy?

Did governments and regulators think greed could, in long run, do more good than harm?

Did market participants think they could reap an extra profit without taking an extra risk?

Did CFOs of Polish companies which speculated on currency options think they had just discovered a gold mine?

Did borrowers who had taken out mortgage loans denominated in foreign currencies when zloty was overvalued think they had stroke a great deal?

Did grannies who bought stocks or invested in equity funds think stock prices could plummet in the coming months?

Did Greeks think living beyond their means would sustain economic growth in their country?

Did Irish home buyers who bought properties despite steep prices think the prices were still reasonable given their growth potential?

Did pension fund managers from all over the world which were buying summer houses on Spanish coast think the demand on them in the coming years would be so high that it would drive prices even higher?

Did Ben Bernanke think keeping interest near zero would kick-start the US economy?

Did analysts at the end of 2007 think stock indices would fall by roughly 50% in 2008?

Did PiS, Samoobrona, LPR and PO think by raising spending and cutting taxes and sickness benefit contribution they would turn around Polish public finances?

Did Polish airlines managers think oil price would rise to 200$ per barrel and hence purchased future contracts at 150$ per barrel (they had to pay so much when prices dropped to 40$)?

I could flog the dead horse and reassert they all took it for granted that nothing could go wrong. Or, alternatively they knew everything was goings to collapse, but they thought they would escape the disaster?

In July I tried to park swiftly in front of my house. I did not manage to manoeuvre properly and smashed into the fence. It ended up with a dented bumper. I did it because I thought would simply make it (today at home we recalled that accident after my father dropped his mobile phone into the toilet bowl). But three months earlier pilots of a plane thought they could, or rather should, or even had to touch down the plane despite thick fog and poor communication with air traffic controllers. They thought they could, somehow, make it. They did not. 96 people died.

I will not dare to pass judgement about the causes of Smolensk disaster, but the dented bumper was a result of nothing but my own thoughtlessness.

The ongoing crisis does not just have one, financial, facet. As outlined above, this is also the crisis of thinking, or a result of years of thoughtlessness.

Almost a year ago I drew a conclusion that the crisis was caused not by greed, but by lack of fear. Now another conclusion – the crisis was also caused by LACK OF FORETHOUGHT…

Or maybe... Did they think, or did they believe?

Beer and Loathing in the Square Mile

Except for a good book about North Korea, I could not have made any better choice on the Christmas and the subsequent slack period (how I call those days between Christmas and New Year’s Day when everything Polish economy comprises of is ticking over) read. I amm in two minds whether “Cityboy” is must for everyone who wants to work or works in banking, but the memoirs by Geraint Anderson, former investment banker, who shows his readers around the darkest nooks and crannies of world’s financial capital are surely a valuable read.

Before I set out to read, I was a bit afraid the book (I read original version in English, again thanks for Michael Dembinski for buying me it in the UK) would contain a lot of slang and a blend of colloquial and offensive language. My guesses proved right, but either I am already familiar with most of those phrases or it is written in such an intuitive way that I never had problems understanding the plot. Actually over 400 pages resulted in around 200 new English words, half of which I will surely fail to memorise.

I was not shocked by debauchery depicted in the book. Lifestyle sky-high bonuses paid in the City entail and the “culture” of investment bankers’ entourage have been widely described since the financial meltdown of late 2008 and those who, like me, delved into it earlier should not suffer any shock.

But what truly upset me was the ignorance, although it should not have…I generally know how to value a company and even if you ask me to value a certain public company, I will refuse to do it, for a simple reason. Every valuation rests on assumptions which are in fact subjective projections of future cash flows, profits, dividends. The very valuation is a simple task every high-school leaver could perform, if they were only given all formulas and data. The data makes a problem and you cannot even prove an analyst making wrong assumptions. This is why you can come across discrepant valuations of big Polish companies (example: in 4Q2010 KGHM was valued by two brokerage firms at 126 PLN and 175 PLN (31 Dec 2010 close ca. 167 PLN) and Pekao S.A. was valued by other two brokerage firms at 145 PLN and 201 PLN (31 Dec 2010 close ca. 179 PLN) that put you on the spot as a market participant.

Steve Jones (the character of the book, in fact Anderson himself), a history graduate, is hired by a bank in 1996 without having any in-depth knowledge about finance. His brother, at that working in the City, arranges an interview with him and then someone decides to take him on. One good change that has been made in the City since than is that history graduates have no chance to become bank analysts and nepotism is not so widespread. In Poland, on contrary, graduates of history or political science work at banks, but they open accounts and sell cash and mortgage loans in bank outlets, so at least they do not stand a chance to get really high.

The way Jones deals with clients is slightly despicable. He openly admits what he tells clients about results of his analyses is ‘bollocks’, but he wins their trust by taking them to bars, restaurant, concerts. In fact, what he does seriously matters in business and Jones knows how to entertain people. Plus this way is widely accepted as all banks have budgets for taking clients out and Jones most of the time has fun on the house.

Money… is what life in the City revolves around. Money is not what actually makes you strive for perfection; pursuit of money teaches you how to break rules to get a higher bonus. Executive turn a blind eye on reprehensible practices as long as they do not tarnish a bank’s reputation and as long as they do not come to the light. You have to make a profit, it is up to you how you make it, you only have to remember you must not get your bank into troubles… Compliance rules – they are worth as much as the paper they are written on. Insider trading is the order of the day, what marks out the boundary between acceptable and unacceptable demeanours is not decency but risk of litigation or adverse publicity.

Financial results of the banking industry much hinge upon goings-on on the markets. Bull markets mean good times are rolling in, when bears dominate trading floors business is winding down, bonuses are tiny (just 50,000 pounds per year…) lay-offs are in the offing.

The dominance of money means that for cityboys every asset can be priced. This view goes into extremes when bankers try to price women and some even delude themselves that those young chicks, their mistresses who are with them only for money, really love them. As the picture of the city clearly indicates, money does not bring happiness. Broken families, broken relationships with family and friends, divorces, sex as a substitute of love, nervous breakdowns, burnouts – is what cityboys (or “deranged fuckwits”) experience. And even if after a few years, despite spending a lot they manage to amass a fortune, they are unable to give it up, they do not make do with what they have, they get addicted to earning money and yearn for more… Meanwhile in the city there are no real friendships, the crucial element of survival there is learning to get on with relentless rivalry.

As Anderson precisely points out, the City destroys the world all around. Huge salaries of the bankers are driving the costs of living in London up (once Anderson mentions that prices in most shops seem extortionate to him, despite his sky-high earnings). This why I would not fancy Warsaw becoming CEE’s financial hub. Most inhabitants of Warsaw would be probably impoverished as a result of local inflation (prices adjusting to earnings of financial elite) and would be totally priced out of property market.

The author also explains why playing the stock market is a zero-sum game. If you buy stocks before their price goes up, you buy them from someone else and the other market participant does not in fact lose their money, but they incur the costs of missed opportunities, resulting from not holding a certain stock.

Anderson describes in the book a few job interviews he had throughout his career. They totally do not resemble the ones I have had in my much shorter career. In the City employers look for ruthless and greedy rat-racers, even the knowledge is not the most important as it is all ‘bollocks’ after all. In Poland, in turn, I was almost always asked substantial questions concerning my academic knowledge and hard & soft skills, and they often asked about pastime activities, hobby, balance between private life and work. In Poland banks do not (thank God) seek callous money-oriented graduates, integrity is an asset, compliance rules are enforced, nepotism does not seem to exist and people without proper academic background are not employed. In Poland banking industry appears to be rose-coloured, even if it does not offer enormous salaries (the pay is decent and commensurate to efforts, skills and experience).

At some moments I felt affinity with Anderson, for instance when he revealed he had worn a suit he had bought in a charity shop for six pounds three years into his career. It reminds of my first , eight-year-old suit (slightly worn-out and knackered by dry-cleaning), which still comes in useful for every day office work. In Poland times when you were judged by the clothes you wore are over. Style matters, brand tag no longer. But unlike Anderson into his career, I do not pay over the odds for brand-name clothes, but try to pick good quality stuff.

And the book is a must for every beginning stock market player. It may leave you disillusioned but shows the truth of how markets behave. And tells the truth who is privileged on the market. Anderson spent 12 years in the city and between 1996 and 2008 markets evolved. He went through roaring late 1990s, bursting of dot-com bubble, bear market of 2000-2002 and last gasp of prosperity from 2003 to 2007. He left in March 2008, when financial world began to capsize. He came to a right conclusion that old truths about investing are out-of-date in the days when markets are driven by big speculators and volatility is much higher that it used to be. Additionally, he draws an accurate picture of depravity within the financial industry that led up to the financial meltdown. No new ideas committed into paper, but it was quite nice to read a former banker saying who was (partly) guilty.

My feelings about Mr Anderson are still ambiguous. On one hand throughout his whole career he did not stoop as low as his colleagues, at least he realised he was paid far too much and obediently paid taxes, unlike his fellows, who all practised tax evasion and whose effective tax rate was lower than the one of their secretaries. But on the other hand, for twelve years he led a life of alcohol-addicted, coke-sniffing, self-indulgent party-goer whose weekly wages were equivalent of most people’s yearly wages and rode the gravy train more by luck than judgement. But after all I think by writing “Cityboy” and laying bare the murky and devious reality of the City, he atoned for all his previous misconduct.

Hell on Earth

Prompted by the missile incident that occured on 23 November 2010 and the recent rigged presidential election in Belarus, I began reading about authoritarian and totalitarian regimes. The one which gripped my attention most was North Korea – the most isolated country in the world and the last Stalinist regime on the whole planet. While reading through some articles, I ran across mentioning in passing a Polish documentary depicting the regime - Defilada, by Andrzej Fidyk.

The short (65 minutes) documentary was shot in 1989, when North Korea was celebrating 40 years of its existence. The festivities coincided with Olympic games in Seoul in 1988 and were meant to outshine the sporting event. The director was allowed in North Korea and shot a striking film. He deliberately shot it and left to the audience. Not a single word of comment has been added, a sinister picture of life in the country is being shaped in a viewer’s head. Shots of lavish parades are interspersed throughout scenes from daily life and utterances of North Koreans who speak about their lives dedicated to Kim Il-Sung, hereinafter “the Great Leader”.

The most shocking phenomenon that permeates everything in North Korea is the cult of personality. Ubiquitous Great Leader’s presence is felt at every corner. What the North Koreans speak about The Great leader is nothing but gruesome twaddle, similar to the one known from Stalinist Poland, but much worse.

The North Korean’s mindset is a result of years of brainwashing which has its onset short of after the moment of birth. From the age of around 3, children at nursery school study childhood, early life and accomplishments of the Great Leader. Belief that Kim Il-Sung is a half-god is instilled in children from the earliest stage of their life, when they take in everything they are told. The regime’s excellence at social engineering is truly dreadful. Further on, the indoctrination continues to turn out fairly deranged citizens who venerate the Great Leader.

The right word to use in the context of cult of personality in the country is reverence. The Great Leader is revered. North Koreans would be even ready to go on pilgrimage to a toilet bowl on which he sat (this is not said in the film). The description of the Great Leader, spread by omnipresent propaganda apparatus, reminds of Chuck Norris jokes, which spurred peals of laughter in Poland and across the world some five years ago. The most disarming one was that of the Great Leader who came to an institute of technology and solved problems too difficult even for most outstanding scientists.

According to official propaganda, North Korea is a land of milk and honey. No wonder the authorities want to spare its citizens suffering caused by seeing the outer world and do not allow them out of the country. The land where things go on much worse is the neighbouring South Korea, a fascist country enslaved by imperialist occupiers from the United States.

Just after the armistice was signed in 1953, the demilitarised zone between two countries was created. The border between two Korean countries is said to be the best protected border in the world. The existence of Korean Wall (not as notorious as Berlin Wall) remains a subject of disputes, but it surely has its place in North Korean propaganda. Before the wall was erected, some despaired South Koreans battered by American occupiers fled their country to seek asylum in the land of milk and honey. Now the concrete wall is the obstacle and helpless South Koreans have to stay imprisoned by cruel capitalist regime.

It cannot sink in to me that North Korean really believe in the whole shit there are told about their Great Leader and the country they live in. In socialist Poland virtually everyone, including comrades from the PZPR knew that whole “superiority of socialism over capitalism” is just an ideological rubbish. No other totalitarian country has managed to shape mindsets of its citizens as expertly as regime of North Korea has done.

Post-stalinist Poland, run by Mr Gomulka, Mr Gierek and Mr Jaruzelski, in comparison to North Korea appears as an oasis of freedom (therefore I argue it should not be called totalitarian, but authoritarian country). And socialist Poland was a part of the Soviet bloc, its bad fate after WW2 was a result of political decisions of movers and shakers (the main player in the game of dividing Europe was Stalin, Churchill and Roosevelt succumbed to his demands). Poland could not leave it for political and military reasons without running the risk of being brought to a heel by fellow bloc members; while North Korea’s torment results now, after the Soviet Union fell apart and China rejected Maoism, from the decisions of its own leaders (or to put it bluntly some obsessed mobsters).

I wonder if fear is an indispensable element of life of North Korea. For us, no doubt, it is, but we must not forget North Koreans were brought up in the system based on fear and their perception of reality is so distorted that they may not realise what they feel is fear (a vague concept I am trying to convey, I know it is hard to me to put it in words). I will not hazard a guess they have learnt to get on with fear. Fugitives from North Korea have to undergo a long-lasting process of rehabilitation to function in a normal society properly.

This brutally proves the cruelty of North Korean regime. How inhuman the Great Leader’s son must be to spent millions of US dollars on uranium enrichment programme, while millions of North Koreans are starving?

The only explanation of how people keep on living in North Korea is that they get by because they have never experienced freedom and have never seen how a normal country functions. They take all absurdities and degeneration as natural. Maybe some of them even experience some kind of happiness drawn from family life. Surely the unawareness of living standards in civilised world eases their pain.

The question how to handle North Korea is a pain in the world’s neck. World leaders cannot shrug off its existence, as long as it threatens to use its alleged nuclear weapons. The cruel tormentors who run the country could, in the most simple view, be wiped off this world with the benefit to everyone. Even in case of (Heaven forbid) nuclear war, resorting to use of bombs to annihilate leaders of North Korea (probably in vain, as they would stay safe in bunker hideouts) would mean killing thousands (or millions) of innocent people. A few times it occurred to me that wiping North Korea off the map would put 23 million of citizens of the country out of their misery. I know it is cruel, but faced with a choice of living in North Korea as a native, I think I would consider putting myself out of misery.

Bringing down (somehow) the totalitarian regime would not translate into freeing the country. The problem would remain and apart from economic costs of aid for North Korea, the goal to teach North Koreans, dehumanised by years under the Great Leader’s and his son’s rule, how to function in a normal society could be unattainable. Those people do not await liberation, but we can hold out hopes for economic crisis that would topple the government. All communist regimes fell down because of economic difficulties and North Korea has to follow the same path, although it will be much more complicated.

Benevolence

This year, the time has come. In the past years, before Christmas I promised myself to share some of my wealth with the ones in need. I know, it is a but hypocritical, it is done only around Christmas, because everyone else does it and later people forget for the rest of the year. In the past years my low income was a lame excuse to confine to a few zlotys, this year I decided it was high time to endow some foundations and charities. I began to earn some “real” money, next year my earnings will be really decent, so apart from paying taxes which are aimed at redistributing wealth, I should help my fellow men off my own bat.

In the past days, when I had some free time (scarce commodity) I have pondered upon this issue. The topic triggers a lot of questions, concerning legitimacy, percentage of income that should be shared with others, discretion, moral duty and many more.

Virtually everyone agrees the disadvantaged should be given aid. Opinions how to do it wisely vary. In socialists’ view, the state should be solely responsible for redistributing wealth. The richer should under constraint pay not only higher taxes, but should also give to the state apparatus a higher percent of their income. Liberals, in turn, claim it should be the civil society that takes over function of helping the poor. People, as they say, can set up foundations and charity organisations and endowing them should be a moral duty.

Both approaches have substantial downsides. The statist one assumes the state is omnipotent and will allocate the collected resources effectively. This is impossible – the whole bureaucratic apparatus costs too much and will never be effective – once we had such system in which the state oversaw everything and it failed. The liberal one carries a naïve assumption people will be ready to share their wealth with the worse-off, which is overtly false. Most people are greedy and even if they do it, they will give out only a tiny percent of their earnings. Here there is a fix for it. In many Anglo-Saxon societies donating large sum to charities is a benchmark of one’s social status. There is some bit of pressure from society. But if it was not about boasting about the endowment on a party, would they be ready to give their money away that eagerly? I realise it is better that giving no money at all; no matter if the well-off outbid one another who donates more, the disadvantaged benefit from this. My take on the issue is similar to my view of CSR – most companies do it to maintain a good image, not because they care about those parentless children. Mechanics of the endowment is identical – people do it because they care about their prestige, benevolence is just a side effect.

And I have also realised that even if I was most open-handed I could afford, my contributions would still be hypocritical. I could not sympathise with beneficiaries of my help, just because I have never experienced homelessness, famine, shortage of money, severe illness or any other kind of misery. No big tragedy has affected me yet, my family have, thank God, never been destitute. But on the other hand, as I have also never experienced luxuries, I feel I am in between. Much above me are those whose opulence would dazzle me, much below are those whose poverty is beyond my comprehension. Probably the bigger the gap is, the harder it is to take in a fellow man’s woe.

In addition, giving money is taking the path of least resistance. I may have fewer banknotes in my wallet, by bank account may be credited and the strain is over. Good deed is done, conscience is clear. It is not that simple, as long as I still avert experiencing misery.

Also a man’s wealth determines his problems. For people who struggle to make ends meet, the problem might be if they will not run out of cash to buy bread for children. For those a bit better off, who surely can afford to stock up on bread and smoked hams, the problem might be paying for a child’s school trip abroad. The richer you are, the further from scraping along your problems are. A reason to complain for my colleagues might be that they can afford only a suit for 1,000 PLN rather than five times more expensive one. Or, as this year, that the Christmas bonus was not an equivalent of new compact car’s value, as it was in the years of prosperity (2006 or 2007).

Yesterday I had a Christmas party in my office. It was thrown in an empty unfinished sizeable room in our office building in the very centre of Warsaw. Looking outside the windows could you see Palace of Culture, hotels, busy streets full of well-off people running pre-Christmas errands in haste. Food and drink was in abundance, everyone was pleased to get together… I wonder if I was the only one who thought about families who cannot make ends meet during the party. Once again the Band Aid’s song reverberated in my head…

It's Christmas time

There's no need to be afraid

At Christmas time, we let in light and we banish shade

And in our world of plenty we can spread a smile of joy

Throw your arms around the world at Christmas time

But say a prayer

Pray for the other ones

At Christmas time it's hard, but when you're having fun

There's a world outside your window

And it's a world of dread and fear

Where the only water flowing is the bitter sting of tears

And the Christmas bells that ring there

Are the clanging chimes of doom

Well tonight thank God it's them instead of you

And there won't be snow in Africa this Christmas time

The greatest gift they'll get this year is life

Where nothing ever grows

No rain nor rivers flow

Do they know it's Christmas time at all

Here's to you raise a glass for everyone

Spare a thought this Yuletide for the deprived

If the table was turned would you survive

Here's to them underneath that burning sun

You ain't gotta feel guilt, just selfless

Give a little help to the helpless

Do they know it's Christmas time at all

Feed the world, feed the world, feed the world

Feed the world, feed the world

Let them know it's Christmas time again

Does anyone hear “the clanging chimes of doom”?
Is anyone thankful “tonight thank God it's them instead of you”?

But Polish bankers are not as spoilt as their counterparts from the City or Wall Street. Here the banking system is totally different (in Poland investment banking is just fledging and will never develop for good after Mr Crisis spelled the death of it) – there is no such depravity, earnings and bonuses are not sky-high and expectations are different. More about one depiction of London’s bankers circle in the New Year’s Day post!

Another happy return

Those yearning for a longer weekly piece, please get on to Polandian, where I’ve enumerated some things that get on my nerves. Now I’m awaiting some mud slung at me by unfailing commentators. The post on Polandian is not actually very optimistic and as all my postings was written on the spur of the moment, left for the posterity after a brainwave had come over me.

What can cheer one up in a period when daylight is so scarce? Mikołajki - a Polish custom of giving token gifts to your near and dear is still alive. For five years of studying of SGH, where there are no fixed student groups I’ve forgotten how it feels, but this year I got caught up in the exchange of gifts in my office. My boss drew a person on my behalf and handed me a slip of paper containing the name. At the beginning I thought it was a considerable nuisance, as deciding what to buy to a twenty years older woman seemed a hard nut to crack. But then I used my brains, found my colleague’s profile on Goldenline and discovered we both are fond of U2 music. After a short research in the Internet I ordered a book “The Name of Love” about the band’s lyrics. Another colleague watched her reaction on Monday, when the gifts were handed (I was absent) and said she had been pretty delighted. I picked up my present on Thursday. I think the hand-painted bauble will be a nice decoration, but surely also proves someone had no idea what to buy (I was tipped off that one guy from sales (rather reticent) does it in his spare time). Next Friday we have a Christmas party – something I haven’t enjoyed since 2005. SGH is not really conducive to socialising…

The centre of Warsaw is lit by Christmas decorations. To the right – ul. Emilii Plater, modernised this summer is designed be the high street of Poland’s capital to bewitch Warsaw’s inhabitants and tourists. There are always some people who stick around there every day and who don’t take notice of its brilliance. I took a few snaps in the dark, without a tripod, on the display of my camera they seemed sharp, but after transferring them to my computer the photos turned out to be a bit blurred. Maybe next week I’ll take the camera again to get it right.

A widely publicised event held yesterday was a Złota 44 construction reopening ceremony. Orco (property developer), after a court handed down a ruling favourable to the developer and thus brought the dispute over the building to the close, is going to resume construction works in January. Façade of the building should be finished by Euro 2012 and the building will be finished by the end of 2012. Time will tell if the splendid edifice will overlook Warsaw, but yesterday’s ceremony was nothing but a misfire. I don’t understand what the whole hype about the whole 15-minutes long event was about. They played some music, lit the building with flashy spotlights and thus thanked Warsaw for patience. Some people stopped by to watch the so-called show, but majority remained indifferent.

A step in good direction is the new timetable of suburban trains. Substantial improvements in transport links from my suburb to Warsaw will come into effect tomorrow and I’m glad to learn about it, as from 1 February 2011 I plan to commute by train. From tomorrow on, there will be five trains between 7:00 and 8:15 (including three double-deckers) and eight between 6:30 and 9:00 (four double-deckers). I only wonder whether the services will be reliable. During last two weeks cards were stacked against them. In the long run I plan to commute by car and leave it on P&R Okęcie (currently under construction), next to W-wa Okęcie bus & tram terminus and then take a tram to the centre. The only problem is how to get there before the dual-carriageway bypass of Warsaw is built… I’ve heard local roads between Dawidy and Raszyn are jammed in the morning. And if more trains run in the morning, will it mean more people will drop their cars and go to town by train? Will the carriages be packed?

Now a small request to Mr Santa Claus. I bought some stocks in late November? Please bring me a substantial rally and keep all skeletons in the cupboards locked up until the end of the year.

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?