Social media – why be involved?

Musings prompted by a conference I attended last Thursday. No matter if you embrace or reject the presence of social media in the life, you should not disregard them and if you have ambitions to be an all-rounder, you should understand how the function.

Quite often in business, if your company refuses to participate in a social media fad, its web-present competitors get the edge over it, by dint of being more recognisable. As a few years ago you could hear if you do not have a facebook profile, you do not exist. I would still argue this is untrue, as life goes on mostly beyond facebook, but with time, as social media evolve, it seems to be useful to leave one’s mark there.

With time more folks realise it might be beneficial to be involved in the social media, but as the speaker at the conference I attended pointed out, one should eschew two major pitfalls. Firstly, do not get involved because others do. Secondly, do not get involved because everyone else claims it is appropriate to do so, etc. Making use of social media must be natural to bear fruits. If you do not feel the need to twit or run your company’s facebook page, better hold back, as inept doings might do more harm than good. In order not to spoil the effect, many businesses hire experts in social media and give them a free hand to do the job.

Once you are present in the social media, others begin to follow you and expect you to show up there more or less frequently. Living up to your followers’ expectations is a measure of your content’s quality. Expectations vary, depending on kind of social media utility you use.

On LinkedIn which helps you build a professional network, very infrequent appearances are acceptable. For professional and practical reasons, you hardly ever need to constantly share any stuff, so even if profile upgrades appear with delay and when you are just about to look for a new job, there is nothing to worry about.

Twitter requires more attention. On account of the utility’s nature a single involvement should be short (as much as it takes an idea to spring to your mind and then for you to squeeze it into no more than 140 characters to twit it to the world), but frequent. Messages should be concise, up-to-date and posted frequently. If you do not follow these rules, do not expect your twits to be followed by many.

Facebook, according to the speaker, requires even more attention than a twitter account. I do not know whether he referred to a private facebook profile, or a company’s / organisation’s facebook page. The latter, in order to gain and later not to lose exposure, does involve frequent updates and new postings. As for the former, judging by my friends’ and mine facebook profile, frequent sings of life are not a must. Many people choose facebook to be one of oddly used life-enhancers, not a utility which tells their friends they are just visiting coffee shop, sunbathing on a beach or struggling boredom at work.

Blogs are said to be the most “resource-intensive”. As a blogger with almost five-years’ experience behind the keyboard I could not agree more. Out of all social media blogs are the biggest timesucks – not only should they be update frequently, but also each involvement is time-consuming. Amount of time spent blogging does not automatically qualify a blog as attractive. Unlike social networking or twitting, blogging requires skill. Only a skilful and passionate blogger can grow the blog outstanding and establish a long-lasting rapport with their readership.

Out of all the stuff described above I only do not have a twitter account. As I still use my old, always reliable Nokia 3110 Classic, I am not capable of twitting whenever and wherever I am. LinkedIn account is what I use for practical reasons, two or three times in a month. Facebook is visited everyday, but there is not really much trace of my activity there, and if I happen to do something on facebook, it is about liking something, someone else’s content, or sharing links to noteworthy stuff. As a matter of principle I hardly every share details of my private life on facebook. It is rather the blog, where, with the narrower audience I seldom wash my dirty linen in public.

One topic which has not been brought up during the conference was the savoir-vivre in using the social media, in particular if the existence of pecking order among its users. If somebody joins a social network utility, it is customary they connect to incumbent users. But what if two settled users get to know each other in real world and are about to connect via LinkedIn, facebook or any other social media page? Should the younger invite the older? Should a man add a woman to his circle? Should a subordinate connect to their superior? Or the other way round? Or given the equanimity social media offer, it does not matter at all?

If you are to fully embrace the social media and make the most of the opportunities they offer, it is crucial to stay online all the time. If so, a portable device, such as smartphone, tablet, or another contraption is what you need. I do not possess any of them and, oddly enough, I am not attracted by them. I somehow prefer to be offline, in the real world only and dose out my visits to the Internet. I realise I am not keeping up with the rest of the civilisation and one day I will have to give in and catch up.

Safe bets on stock market?

Risk-averse investors tend to put all their money into safe instruments – mainly bank deposits and government bonds. The stock market, on account of its characteristics, exposes investors to much bigger variability of returns, tempting with gains much higher than on bank deposits, but also scaring away with prospects of losses that can wipe out large chunks of invested capital.

Risk profile of investments in equities is not homogenous. The two factors affecting the risk undertaken by an investor are, in my opinion: type of security an investor trades in and timing of transactions.

As for the former, the risk, commonly measured by volatility of returns, is lower for: bigger (blue-chips), counter-cyclical (sectors such as telecommunication or utilities) and sound (i.e. not grappling with financial difficulties) companies. The low-risk stocks usually are said to be a good-quality equity investments and offer expected return a few percentage points above risk-free rate and relatively low standard deviation of returns.

In the case of the latter, the issue is far more interesting. In terms of risk, timing of trade might matter more than other characteristics of an asset. You may pick out an excellent security, with absolutely firm fundamentals, no skeleton in the cupboard, etc. and lose money on the investment, if you pay over the odds. This is what happened to investors who were buying shares of sound IT or telecom companies at the peak of dot-com bubble in late 1999 / early 2000 and lost over 90% of invested capital. The companies whose stocks were trading at sky-high levels are still alive and generate profits, but fourteen years ago were… mispriced.

Now let’s consider two concepts essential in comprehending what I am getting at – the value and the price.

There are plenty of definitions of value put forward by economics academics, in my consideration I will narrow down to only one – the intrinsic value, or fundamental value, which is to some extent objectively justified by characteristic features of an asset. In the case of a share of a company, it is primarily determined by the company’s capacity to generate income to its owner, or in simplest words, to make profits. In valuation theory, a company is worth as much as discounted stream of positive cash flows it can generate to its equityholders.

The price, in turn, is the amount of money one party (a buyer) pays to another party (a seller) when they trade in an asset. The price is driven by several factors, including two of utmost importance – demand and supply. For a stock-listed security, a price is technically set by forces of demand and supply and most of the time (except for extreme cases when trading is on hold to prevent extreme movements) reflects the balance between supply and demand, which in turn is unstable over time. If supply exceeds demand, the equilibrium goes down, if the opposite holds, the equilibrium goes up.

It has to be underlined price does not have to equal value. In the long run, if a market is efficient, the equation above should hold true. In the shorter run deviations are very likely to occur and, if discernible and evident, can be exploited to earn.

Let’s look at two examples from the Polish stock market.

First days of September 2013. The Polish government unfolds its plan to curtail operations of private-run pension funds operating under the public pension system. Market participants react with panic sell-off. Let’s examine the motives / rationale behind the sell-off. This could have been an act of revenge of foreign financial institutions, whose risk-free business in Poland had just been undercut. 

The mini-crash could have also been sparked by fears that pension funds would dispose of some of the stocks they hold and that they would not generate additional demand for stocks in the future. The former argument could have served as incentive for speculators who could sell (short) stocks in order to buy them back at cheaper prices from pension funds. The latter theory was actually favourable for the stock market, as without artificial demand from pension funds, risk of overvaluation and market bubbles on Warsaw Stock Exchange diminishes.

A cool-headed analyst should ask a question, whether existence and scale of operations of private-run pension funds in Poland has any impact on fundamental value of stock-listed companies. For some financial services companies who deal with pension fund management, the answer could be affirmative, but for overwhelming majority of companies, dismantling of pension system has no impact on value. The conclusion is then simple – even if forces of supply and demand bring prices of some securities down, the situation creates investment opportunity – you can get the same value for lower price! A wise investor should grab such opportunity.

14 January 2014. Before trading commenced, Vattenfall announces it intends to dispose of its stake in Enea quickly. Trading opens 8% below previous day’s close, then the price of Enea slides further down, total 1-day loss reaches 14%. The accelerated book-building ends on the same day. The next day stocks of Enea rebound, yet still trade at discount to 13 January 2014 close. 

The rationale behind the sudden drop was the fear of increased supply of stocks from Vattenfall, or expectation if the stake is to change hands quickly, the vendor would have to accept a discount and market quotations would follow the price at which Vattenfall transacted with its counterparties. You could argue the price at which the vendor and several buyers agreed is an indicator of the company’s intrinsic value. I would counter-argue price in a fire sale is a poor valuation measure. Again, does the increased supply of stocks from Vattenfall affect income generation capacity of Enea? My answer is ‘no’. Does Vattenfall’s presence in Enea’s shareholder structure affect its income generation capacity? Given all facts and circumstances shaping the company’s operations, my answer is ‘no’ Again, probably the price deviated negatively from value. A shrewd investor should have grabbed this opportunity.

The strategy illustrated above is not foolproof though. There are 3 major traps an imprudent investor can fall into.

Firstly, you should be considerably confident the when price of a security plummets, it drops below its intrinsic value. Such sudden shock can occur as well when an asset is overpriced and its price is being abruptly adjusted towards the fundamental value. You have to carefully analyse the information that triggered the sell-off – maybe on second thoughts you realise it affects not only price but also value. Upward potential is then limited.

Secondly, the rebound might not be a matter of days. It might take weeks or months for a security to climb back to pre-plummet levels. In September 2013 losses of stockholders were quickly offset by subsequent gains, but it I would treat it as an exception that proves the rule. If you cannot accept the fact your money might be frozen for a few months before it fetches a decent profit, better give up on this strategy. Remember the market might stay irrational longer than you can stay liquid.

Thirdly, even if you are pretty sure you have just spotted an underpriced security and you will not need some portion of your money for a while, do not execute the strategy in one shot. Do not buy securities for all the cash you have at hand. Divide your holdings and be prepared to buy even more at even lower prices if the decline continues. Such approach reduces both potential gains if the price bounces back quickly, but can maximise them if the price keeps falling, as your average buy price also gets lower. Anyway, remember you are playing with turbulent market, so caution, cool head and restraint are advised.

When can you say you are young?

A man is as young as he feels, not as he is… Age is much better determined by one’s behaviour than by date of birth. Context also matters. 30-year-old man who still studies is an old student, but his peer becoming a prime minister would be considered extremely young.

The question on perception of youth has been prompted by the article published in“Polityka” several weeks ago, dwelling on political careers of four well-recognised politicians, all in their 30s, deemed, not only in that instance, “young”.

The ‘young’ tag was quite reassuring for me – if they are 7.5 to 13 years older than me, long before my youth goes by.

The oldest of all those guys is Sławomir Nowak, born in 1974. He first became a deputy in 2004 (after elections to the Euro parliament). In 2010 he was responsible for running presidential campaign of current president Bronisław Komorowski, then for a year and a half he was in charge of president’s office. In November 2011 subsequently he was appointed minister of transport and infrastructure, shortly before Euro 2012 opening. Many considered this nomination a nail to his coffin, as the area of his ministry’s responsibility was a huge mess. Delays in road contracts completion, bankruptcies of contractors and subcontractors of road-building projects have not dragged him down, but he fell into a trap of the fondness for expensive watches he would exchange with his friends. Mr Nowak was charged with concealing in his financial disclosure statement a watch worth 17,000 PLN and submitted resignation. The watch worth more than yearly after-tax minimum pay had to bring about indignation in Poland. Most Poles held it against him he had flaunted stuff an average Pole cannot afford to buy, but in fact this is just a tip of the iceberg and something not really meaningful. What should have really called into question his political career were tie-ups with businessmen (Cam-media, etc.) and mismanagement…

Tomasz Kaczmarek, born in 1976, became famous in 2007, when as an anti-corruption agency officer he seduced and then (within the letter of law) bribed a Civic Platform deputy. His mission and its aftermath was exposed to the public five days before parliamentary elections. The move, astonishingly, tipped the scales in favour of Civic Platform. In 2010, aged 34, he retired. As a 35-year-old (!!! here the term “young” is so apposite !!!) pensioner was elected a deputy from Law and Justice list. In November 2013, while driving his girlfriend’s Porsche Cayenne he was so preoccupied with pondering upon the situation of Poland that he rear-ended another car. In December 2013 recordings of Mr Kaczmarek threatening his partner’s ex-husband in foul language leaked to the media. Recently he was ousted from the grouping nurturing law and justice. Mr Błaszczak told today the party could not put up with his misconduct. They began to see the light, belatedly…

Przemysław Wipler, born in 1978, Polish conservative politician, formerly a member of Law and Justice. He left Kaczyński’s party of account of its inadequate economic liberalism and sometime ago joined Jarosław Gowin’s fledging grouping. In late October 2013 the exemplary husband and father to five children (including the one unborn, counted in, in accordance with Catholic doctrine) picked up a fight with policemen outside a posh club (as befits a conservative politician) on ul. Sienkiewicza in Warsaw. Then, during public appearances he tried to make himself a martyr. To no avail… He was really young when he took charge of one departments in the ministry of economy. He was only 27 then… Did he have, three years of university graduation, pertinent experience to be in charge of a unit in a ministry or did he owe the appointment his political tie-ups?

Adam Hofman, born in 1980 is the youngest and the most remarkable politician out of the four described by “Polityka”. His political career picked up speed when, aged 25, he was elected to the parliament in September 2005. He emerged as Law and Justice’s rising star by virtue of being the brains of the party’s electoral campaigns and PR. Brash and bold, insolent and over-confident, there is no barefaced lie, accusation, nor absurdity that would not flow out of his mouth without a moment of hesitation. The guy is not likeable, even ardent believers of PiS, on Toyah’s blog have not embrace his doings in politics. In 2013 he became infamous for boasting about the size of his penis during party’s off-site and then, for concealing in his financial disclosure statement a 100,000 PLN loan (a move quite common among money launderers). As the charges against have lapsed, the investigation has been discontinued and he was reinstated as the party’s spokesman. I foresee one day JarKacz will regret allowing him to play second fiddle in the party.

When speaking about “youngsters” in politics it is hard to fail to mention the new finance minister. This “very young” man is 38 and has 16 years’ experience in banking, including serving as chief economist for several years. Since taking the office, the new minister made very few public appearances. Judging by the sparse evidence of them, it has to be noted he is nowhere as good as his predecessor in terms of speaking in public and coming under fire from detractors. Mr Rostowski could not be denied outstanding composure. When attacked, he would always stay even-tempered, calmly and clearly made his point and, if necessary, retorted his opponents incisively. The new minister seems to have focused on turnaround of the tax system, convoluted and taxpayer-unfriendly. A stride should be made when comes to simplifying and ‘humanising’ the taxation system, but the recent proposal that tax returns will be filled by tax office clerks rather than taxpayers immediately triggers a question “who will pay for this?” – we are talking about millions of tax returns – it takes workforce that have to be paid from taxes paid by us… Well, my ideal finance minister would a down-to-earth, pragmatic practitioner, not a starry-eyed scholar. For Mr Szczurek the new position is a enormous challenge and will have to learn a lot.

The “juvenile” minister backs youngsters in his office – he hired a 21-year-old student with little experience and 23-year-old ruling party member. This gets more controversial – my perspective changes, as I am witness thriving careers of people younger than me. But try to imagine what an average reader of a Polish tabloid (much older than me, not well-educated and not well-off) thinks, when they read that a 21-year-old student will earn twice as much as them after twenty or thirty years of work, or a 23-year-old distinguished party member will earn 8,000 PLN a month before tax, salary out of reach for over 95% of Poles.

Also Mr Sienkiewicz, internal affairs minister also follows the practice of giving chances to youngsters. This is a great fodder for tabloids and their readership. The key questions is how those people were selected. If they are party henchmen or children of friends, then the practice is condemnable. If they were the most skilled and up-and-coming out of hundreds of applicants, chosen in a candidly carried out recruitment proceedings, why not. Salary of 4,000 PLN before taxes, some 10% above national average (but 100% above national median salary!) is (subjectively) not a reason for outrage. Many of my peers and I earned more when we were 23.

The post is aimed to raise a question, whether age should be a criterion when assessing someone’s competencies for a certain position. In some cultures, for example in Japan, seniority is an important determinant of one’s rank in a hierarchy, in other how quickly one can climb the ladder of career is a matter of their skills, hard work and other factors. Undeniably, the younger you are, the more likely you lack experience, because it simply takes time to gain it. But if out of two candidates with similar competencies for a specific position the older one is selected, because it seems more appropriate for a decision-maker, this looks like age discrimination.

Going downhill?

The New Year’s gloom is slowly abating, it definitely will go away for good with advent of regular daily grind in the corpo-world, due to commence the day after tomorrow.

Daily dose of news does not fill one with overly optimism though. Headlines in recent days were dominated by tidings of ‘carnage’ in Kamien Pomorski in north-west Poland, where on New Year’s Day an inebriated and intoxicated 26-year-old male murdered six people and left two other injured. The fatalities are members of two families who went with children for a New Year’s Day stroll. They were out of luck to be smashed by a somersaulting red BMW. In fact every one of us could have lost life in such brutal way.

The massacre gave rise to public outrage for many reasons. Not only because the culprit was guilty of drunk-driving, not only because in 2006 he was once deprived of his driving license for driving under influence (recidivist), not only because in seconds he took away several human beings’ lives. The most appalling was that he would be subject to up to 15 years of imprisonment, and charged with drunk-driving and causing fatal accident, while many believe he should be held accountable of murder and his 20-year-old female passenger (sober at the time of accident), who had done nothing to prevent him from sitting behind the wheel and argued with during the journey, should be accomplice. (BTW – what virtues has that man had to impress a woman?)

After the senseless death of six people, problem of drunk-driving has come under fire in the media and among politicians. The government intends to put forth far more severe punishments for drunk-driving and thus crack down on plague of pinheads sitting behind the wheel under influence.

Whether the stricter penalties serve their purpose is a debatable issue. The problem of drunk-driving is more social than political or legal (although if such crime as the one committed by 26-year-old bandit is not categorised as murder, it lays bare an evident shortcoming of the Polish penal code). The heart of the problem has been rightly located by Michael, who points out it is the ‘tacit consent’ / ‘acquiescence’ for drinking alcohol and sitting behind the wheel thereafter in the Polish society. Written law might fulfil its role better or worse, but it will surely do it better, if certain behaviours become intolerable. Drafting a new, restrictive law with severe punishments for drunk-driving and enacting it is a matter of weeks. Eradicating the ‘tacit consent’ for minds of millions of Poles is a task for years.

As correctly noted, people sit behind the wheel tanked-up, not because they are not precluded from it by gentle punishment, it is because they expect not to be caught. From economic perspective, a drunk driver considers the situation in their intoxicated brain in the following way: expected punishment = punishment times odds of being caught. If the latter is low, even if the former is high, the outcome is low and they are more likely to drive…

A law which is not enforceable is worth nothing… What is the point for irreversible loss of driving licence? Maybe my way of thinking is weird, but this measure simply does not work. If somebody is to sit behind the wheel, they will do this, no matter if they possess the document or not. Forfeiture of property (vehicle) and pecuniary penalties should serve as primary measures against inebriated drivers.

That ‘carnage’ is not the only incident from recent days which called into question faith in people…

On 28 December 2013 a 22-year-old male killed with a hammer his 30-year-old friend and his 8-year-old son, who accidentally witnessed the murder. Then the criminal stole 1,000 PLN and the victim’s car and dashed off. His escaped did not last long – soon after he crashed the car and was detained by the police. The murder was committed with cold blood.

On New Year’s Eve, in Łódź, a drunk pregnant (9th month) 31-year-old woman, was run down by a car. Circumstances of the accident still remain unclear, but from the picture that emerges it transpires she was a member of gang which threatened to damage cars in order to wheedle out money from their owns. One of their victims was a 67-year-old man returning from fireworks show. While trying to run away, he probably did not see the pregnant woman lying on the street and mowed her down. The woman died on the same day, her child passed away two days after (this is the most probably scenario presented in the media)

On the same day, somewhere in southern Poland a drunk 33-year-old man almost trounced to death a 3-month-old infant. The child is fighting for life.

On New Year’s Day three men in their 20’s threw a firework into a house inhabited by a disabled man. For kicks. The firework set the fire. The man with first and second degree burns was taken to hospital, his dwelling is uninhabitable. For kicks…

And while I was writing it, a drunk driver in Bytom hit into a group of people. Fortunately, nobody was killed, nor severely injured.

Down in the dumps, I was surely oversensitive to such news. These eye-popping examples of cruelty and idiocy, although gruesome and unacceptable, should not spoil the overall picture of Poland. It is not the country of widespread criminality, full of drunk murderers, albeit in terms of common sense behind the wheel, catching up with more civilised nations would improve safety on Polish roads. The only alarming common denominator of all misdeeds mentioned above is that they were committed by relatively young (aged less than 35) people. This does not cast good light on generation which in decade or two should become Poland’s elite.

I wish such accident do not recur. I can merely wish, as I fail to come up with a prescription for successful measures decreasing criminality. I only hazard a guess it is not a task for politicians or lawmakers. It is a task for social engineers and everyone who could tamper with people’s mindsets…

2013 end-year thoughts

‘For posterity, with sincerity’ – has been one of the overriding rules of blogging I am committed to obey, as I soldier on as the author of PES. If I write, I do it not only for my own pleasure, but for others, not only to let them enjoy my work, but also leave a testimony of my mindset at specific moments, in specific circumstances. If I write, I do not conceal nor misrepresent what I think or feel (unless there is a very profound reason to do so).

Since I entered adulthood (meaning turned 18) I have found the days between Christmas and New Year’s Eve the most depressing period of the year. I can give several reasons that dash my spirits in the last days of each year:

- short, often gloomy days,

- in the Christmas period everything is ticking over, after pre-Christmas rush people slow down and human activity almost comes to a standstill, it seems the world is in a limbo, hanging somewhere in the space between heaven and hell,

- last days of the year naturally are the time of summaries, finishing things, making resolutions, for some reason it is the time when successes are outshined by failures.

I come to think the western civilisation has set Christmas around winter solstice and built such pre-occupying setting around it only to light up the time of the year which is naturally the most depressing on the north hemisphere. And I come to think New Year’s Day celebrations are also set a few days after, just to give a decent excuse for everyone to get tanked up…

Despite the overwhelming gloom, in each of the previous years I was looking forward to coming new year with a dose of optimism. This year I lack that cheerfulness. My feelings are not contrary to what I felt – I do not expect my life would get any worse, I just foresee little or no chance for improvement ahead.

Life-love-wise… Quite recently I gave you a brief overview of my attempts to find a second half. For the time being, I have given it a rest… Looking for a second half too intently is doomed to fail, so my strategy is to look for opportunities, instead of looking for a girl. There are odds something good lies ahead, but I don’t want to put a jinx on it. To avoid a letdown, as a matter of principle I hope for the worst. The downside of such approach is that I don’t let myself spread wings and taste the craze of having a crush on a girl, while the upside is I don’t get disillusioned when it all doesn’t pan out.

Learning-wise… Signing up for Level II was my independent decision, so I can hold it exclusively against myself. Preparations have been under way for four months, more than five months still to go. The curriculum is not as difficult as said by those who tried to scare me (if so many charter holders were capable of passing it at first attempt, why couldn’t I?), so if enough time is sacrificed and the issue is taken seriously and not treated as a proverbial ‘piece of cake’, I should take the exam in my stride. Before the exam day comes, I will have spent hundreds of hours poring over six thick volumes and then tens of hours revising the material and taking mock exams, but at least there is a tangible goal ahead…

Work-wise…In January 2013 I was faced with an opportunity to change a job. My prospective employer operates in the same industry, my new position would have been similar to the present one. I gave it up (by demanding sky-high salary and pricing out of the market) for several reasons, before the prospective employer decided to submit a commitment letter to me:

- my current employer within 2 weeks offered me a promotion and a substantial pay rise,

- scope of responsibilities on the new position did not suit my expectations – it actually involved being a sidekick of a salesperson, a relationship I can wriggle out of where I work,

- my new manager, unlike the current one, would have been a total jerk.

Before long my current workplace went on decline. From 2Q2013 the company began to lose its biggest customers, as either relationships with them had not fetched adequate profitability, or they had found our services uncompetitive. My employer’s credentials on the market has also been grimed – prime customers from the segment I deal with no longer want us to provide them services, while those in trouble eagerly turn to my company. Portfolio of large clients shrank dramatically (new volumes offset drop by less than 10%) and is unlikely to be restored, while the existing customers require more and more attention. In the meantime two colleagues from my team got pregnant and I (as an up-and-coming senior analyst) was assigned to take over most of their duties. When on top of this I got involved in a huge transformation project as a junior leader, I ended up working for 11 hours a day not to get behind with my work. Absence of new business loomed as salvation, but if an organisation focuses on itself, instead of on its customers, it will cease to make money sooner or later – with this truism in mind, my motivation dropped…

In October the prospective employer posted a job opening for a different position that seemed a dreamt-up one for me. Hoping to break away, I sent them the application, but my candidacy was turned down. The Soulmate, who has inside ties with the prospective employer, has a mission to suss out how it really was – whether my early-year game had resulted in burning bridges with the prospective employer, or the chosen candidate had been selected beforehand and the opening had been posted for procedural reasons, or maybe I just had not met their expectations. As I called the HR Department shortly before Christmas to find out what the status of my application was, and learnt they had selected a new employee, it was a blow for me…

My current job, for this single reason that my company effectively withdraws from the segment of clients I deal with, seems dead-end. According to my current employer’s declarations and recent moves, I should not expect to be fired when my department is wiped out. In an attempt to retain me, the employer may relocate me, or leave me covering all current troublesome clients, who do not stand a chance of being taken over by any of competitors. Either option is unattractive. The former because I will not find myself in project management, I will not find be satisfied doing a mundane reporting job. After all I’m a financial analyst and in the long-run doing a job that could be done by a clever high-school graduate is… beyond my dignity.  The latter because… it offers no opportunities to develop and is… dead-end. On the other hand, as the market is tough, if competitors look for staff it often means a transfer would mean jumping from frying pan into the fire… Decisions to change a job have to be taken carefully, to avoid falling into a trap. What brings some hope is that I still have some room for pay increase, compared to my current salary.

I had plans of moving out to my own flat in 2014. Over recent weeks, when I spent little time at home (leaving for work around 6:30 a.m. and coming back between 7 p.m. and 8 p.m.) and somehow lost motivation to move out from parents. I’m self-supporting anyway, financially independent from parents, don’t let them help me out in any way, but living with them gives the benefit of having someone to talk to when returning home. In meantime, I keep putting aside around three-fourth of my salary, the savings will come in handy, when motivations flows back.

Christmas (politically correct ‘holiday’) period offered some respite (no working day off though): I spent time: sleeping (10 hours a day), eating (more than I usually do, but less than an average Pole does), doing physical exercise (going for at least 5-kilometre walks, going to swimming pool, riding a stationary bike), studying, in other words, catching up. Family visited us only at Christmas Eve, two subsequent Christmas days were uneventful. Much benefit for the body, little benefit for the soul. Not sustainable. May it take a turn for the better in the new year, against all odds…

Sense of justice – follow-up

Tuesday, 17 December 2013

I knock off near six p.m., being still behind with work. Enough is enough, I call it a day. Before seven p.m. odds of getting stuck in stationary traffic on ul. Puławska are negligible. Indeed, the traffic moves smoothly and as I drive at steady speed of 60 kpmh, I even manage to cross most intersections on green light. While approaching home, I get stuck in a queue of cars before intersection of ul. Raszyńska and ul. Mleczarska. Something is afoot, drivers are perplexed. After a minute I trundle forward to the intersection, pass by several damaged cars and turn right, barely avoiding being scraped by a driver of black Volkswagen SUV who thinks he’s a master of the road, and head to park my car in the garage. Then I put my father in the picture and we wander to the intersection to find out what happened. Prangs involving two vehicles are not infrequent on the nearby intersection, as ul. Mleczarska is narrow and visibility is poor, but this looked like a bigger smash-up – four cars damaged.

Some 30 minutes earlier... (full story in Polish here)

Auchan shopping centre in Piaseczno. Droves of people are roaming around the hypermarket and the adjacent shopping mall. Pre-Christmas rush is conducive to getting preoccupied and losing one’s mind. The owner of red Honda Civic walks out of the shopping centre and approaches his car. He pulls the car keys out of his pocket, press the button to unlock the door and… notices someone inside his vehicle. The thief cranks up the engine and swiftly drives away. The incident is witnessed by other shoppers. One of them instantly picks up the Honda owner, who in the meantime calls a police patrol) and they set off on a chase.

After running away one kilometre the thief comes upon a small traffic jam on his way and is caught up with by the Honda owner. In a desperate attempt to make his way through the busy road the thief crashes into three cars, forsakes the car and tries to make a getaway on foot. Some of the aggrieved (in info who exactly) jump out their cars, overpower the thief, knock him down on the road do not let him make off before the police arrives. As my father and I turn up, the criminal with a bleeding nose (probably the effect of scrimmage, serves him right) lies on the cold tarmac, cuffed in and awaits facing the music.

Sounds like a story with a happy ending. The thief didn’t manage to escape and was (temporarily) arrested. Nobody was injured. Justice triumphed again!

But on the other hand, four cars of innocent people were damaged. Who will pay for the repairs? Will they be paid from Civic owner’s third party liability insurance? If so, who will compensate him for losing discounts for damage-free track record? If not, what if some of those cars weren’t insured against own damage? What about those which were, but the repair will make them lose their discounts? The inebriated thief will be held accountable for theft and property damage, but even if convicted, will the Polish justice system manage to pull the last zloty out of his (shallow?) pocket to compensate the victims of his wrongdoing?

The exemplary, swift and sympathetic reactions of crime witnesses is profoundly reassuring. Such positive illustrations of civic attitude should be exposed to the public (and even rewarded) to induce others to follow their example. Actually by disenabling the criminal, their contributed to increasing well-being of the society.

With hindsight, I again pondered upon the borderline that should not be overstepped, when you are faced with a criminal and need to crack down on them. Recollect this post from February 2010. I’ve harked back to it instantly, read over and could write the same, in terms of content, today. When I return to my early posts of pension system, monetary policy and other issues I have clear views on, I see over almost five years of blogging my beliefs not only have not evolved, but even have become more entrenched. Does it mean my formative years have gone by so early?

Longevity – a reason to be cheerful?

Musings written with considerable delay – should have been posted here a few weeks ago, as on 24 October 2013 my paternal grandparents had their 65th wedding anniversary and my paternal grandmother turned 88 on 3 November 2013.

My maternal grandmother died from cancer aged 73, when I was only four, so I barely remember her, but until the last weeks of her life, when the disease began to advance rapidly, she stayed mentally and physically fit. My maternal grandfather died aged 87 five years ago. Until the age of 86 he was mentally and physically very fit, but fortunately the senility overwhelming him in the last months of his life did not progress so quickly to prevent him from moving around and doing basic things on his own and by the end of his days he understood what was going on around and even sensed the oncoming departure.

My paternal grandparents still live on their own and somehow manage on their own. Their self-sufficiency can be attributed only to the fact they are together (also financially, as their pension benefits are demure).

Grandma is mentally still exceptionally fit. She displays no signs of dementia, is interested, sometimes overly, in what is going around, experiences no problems with memory and despite advanced age, her brain seems unaffected by aging. On the other hand, on account of her problems with spine, several bones and joints, she moves around with aid of walking stick. If she goes out of her flat, she only ambles outside her block of flats; any further journeys require somebody giving her a lift by car.

Grandpa, aged 87, on the other hand is moderately mentally and physically fit. When he feels well, he does the shopping, strolls around the neighbourhood and cleans the house. In terms of general comprehension of surrounding world, his mental fitness is much better than many of his peers, but nowhere as good as of his wife’s. Once in a few months he loses conscience and is taken to a hospital, where he recuperates, but then return home so weak that he stays in bed most of time, recovers for some next month and does well until next such incident strikes him. In 2012 he had 2 such stays in the hospital, in 2013 he landed in the hospital three times, last time in November. Doctors openly say odds of sustainable improvement in his health, owing to his age, are very low.

Polish language lacks the equivalent of ‘grand old age’, the term intuitively referring to a person who lived very long, but in good health. When you speak of far-reaching senility when an elderly person requires as much attention and aid as an infant, it is just an ‘old age'

I am lucky to assert none of my departed and living grandparents has reached that point when the old age is no longer grand. It is that sad moment when an old person no longer recognises their relatives, does not remember their own name, cannot be left at home alone, is bed-ridden, or unable to do the most mundane things on their own.

Aging of societies begins to pose a challenge for humanity, in economic and social terms. Higher percentage population in pension age elicit a need to reshape pension systems. Higher number of senile people and other social changes raise a question how to properly take care of elderly people and give rise to businesses focusing on such services.

For the last decades it has become a paradigm that each next generation will outlive the previous one. A recent study by WHO call this assertion into question and gives evidence current children are less fit than their parents and this will translate into lower life expectancy. No wonder, youngsters fall victim of their lifestyle –  being driven in cars by parents, avoiding sport lessons at school and doing sport in general, spending time in front of computer, rather than on football pitch. Even during breaks between classes at school they stare at their smartphones instead of running around. In Poland I observe things drifting in the wrong direction, in comparison to times when I was in primary school. With some dread my parents recently noticed their parents were much more fit (meaning healthy and active) when they had been in their early sixties then they are…

What to do to grow old and live until ripe old age in good health?

Have a lot of friends and foster friendships?

Be sociable?

Be open-minded and keep track of new developments in the world?

Have hobbies and passions?

Get enough physical exercise?

Do sports regularly?

Avoid using cars when unjustified?

Having medical examinations done regularly?

Refrain smoking and drinking alcohol in small amounts?

Follow a healthy diet?

Keeping work-life balance?

Avoiding stress?

Drawing pleasure from your work?

Extend the list above?

Or do the factors above it really matter? Is it all written in the stars? Or does it run in the genes?

Cycling and prudence

Winter has set in. This season of the year, apart from ample drawbacks, has also some upsides, such as absence of insects and one group of motorists you should beware of.

Generally, the warmer it gets, the more drivers give up on their cars and swap them for motorcycles and bikes. They share public roads with four-wheel-vehicle users, but often make advantages of smaller width of their vehicles what drives many car drivers, including me, insane.

Don’t get me wrong dear readers*. My intentions are far from decrying cyclists and depriving them of their right to use public roads. Cycling has several merits: keeps people healthy and fit, provides a daily does of physical exercise for those who otherwise would not find time for moving their arses, saves money and environment. But whatever you do, you should do it prudently and not expect others to think and take responsibility for your deeds instead of you, just because you are weaker [than drivers protected by bodyworks of their vehicles] or privileged [cyclists tend to be hailed as such category of road users].

According to Polish traffic regulations, cyclists should attempt to use the road and ride through pavements only when sharing the road with cars is forbidden or impractical. Cyclists are prohibited from moving on motorways, expressway, fast-traffic roads and other roads marked with relevant signage. Cyclists who use pavements should always give way to pedestrians and take off their bikes when they cross a street. This obligation does not apply when a cyclist rides a cycling path, on which they are superior to pedestrians and have right of way over cars if the path crosses the street.

I should not say “law is an ass”, but some regulations do not contribute to increasing safety on the roads. Let’s examine some imperfections of Polish traffic law and some sins committed by cyclists and motorcyclists.

Every candidate for a driver to get a driving license needs to pass a test in order to prove they know traffic regulations. Such requirement prevents people who know little about traffic rules from causing dangerous situations on the roads. A cyclist who is not under 18, subject to the same traffic regulations, as a road user, does not need to prove their knowledge of traffic law. This results in scores of cyclists blissfully ignorant of perils the may cause or they may be caused by car drivers. I opine that any person riding a bike on a public road has its command of basic traffic rules certified. It can take a little hassle and bureaucracy (that can be easily limited – test materials can be available online, test that costs no more than 50 PLN is taken in exam centre, then a cyclist picks up a piece of plastic, if someone has a valid driving license, the procedure is not needed at all), but could prevent many accidents.

The biggest sin of cyclists is taking a busy road, when there is a cycling path running parallel to it. The classic example is ul. Puławska between the boundary of Warsaw and ul. Energetyczna in Piaseczno, the section where speed limit is 70 kmph. The road was widened to 3 lanes and a very decent cycling path along it was built in 2007. Despite dreamt-up infrastructure, some inconsiderate bike enthusiasts refuse to take the cycling path and share the road with cars, risking lives. Is there any excuse for such thoughtless behaviour?

A common sin of single-track vehicle users which winds me up the most, is moving between lanes (to be precise, on lines marking them out) and thus often slaloming between them. This used to be a domain of motorcyclists and scooter-riders, whose engine-propelled vehicles are much faster and thus have edge over slow-moving cars. When weather permits them to get on their machines, even when my car is not in motion I continuously peek at both wing mirrors and if possible move to other end of my lane to let them overtake me in safe distance. The real nightmare crops up when two motorcyclists overtake me from both sides at the same time – this may happen not only on middle, but also on right lane (I tend to use it whenever I can, as the traffic law instructs), when one motor-rider dashes between middle and right lane, while the other moves on the edge of the right one. I then pray there is a few centimetres space on each side of the car…

The warrant to avoid cycling on pavements also lacks common sense to me. Much depends on the situation. The busier the roads and the faster cars move on it, the more advisable it is for a cyclist to give up on taking it. As a cyclist I do use roads, when I feel safe on them and when my common sense tells me I would do more harm than good by choosing a pavement (one nuisance of riding the pavement is having to cross curbs). When there is no pavement, I use roadside, no matter how bumpy it is. A classic example here might be ul. Karczunkowska, where I never share the road with cars, since drivers tend to speed there. Of course I am entitled to use the road, but what’s the value of this entitlement if I end up dead of disabled? When taking the road, I know responsibility for overtaking me safely rests with car drivers. When taking the pavement, I know responsibility for not harming pedestrians rests with me. I prefer to trust myself. The other reason why pavement could be preferable is that accidents on pavements would not be fatal. Have you ever heard of fatalities when a cyclist collided with a pedestrian? Of course, reckless cyclists on pavements can become ‘road hogs’ and the binding traffic law was designed to protect pedestrians. But what protects car drivers from trauma of running down a cyclist clearly violating traffic rules? Surely, after such accident a police could adjudicate the car driver was not guilty, any court would acquit them, but mental trauma could not disappear until the end of their days.

Any constructive strategy?

- Build infrastructure: cycling paths, cycling racks, expand the bike rental schemes.

- Amend the law: put in place regulations that would require road users to be familiar with traffic rules, allow them to use pavements when sharing a road is too precarious

- Punish mercilessly cyclists who slalom between cars or who use road when cycling path is at hand.

- Rely on your common sense, regardless of your role in traffic.

* I actually wrote the post after almost hitting a pinhead on bike on ul. Puławska last Monday. Around 7 a.m. (was still dark) I was driving up ul. Puławska, approaching intersection with ul. Płaskowickiej. I drove some 40 kmph and was on the middle lane. All of a sudden I noticed a cyclist (he had no lights on his bike, nor any flashing elements on himself who unexpectedly decided to veer from right lane to the left. I pushed the brake, peeked in the right wing mirror and without making sure there was no vehicle in the blind spot (fortunately no car was there) I swerved right to avoid running down the cyclist. I was scared out of my wits…

Are we in 2007?

If I could revisit 2008 in 2011, why not turning back time even more and returning to 2007? If you look at the S&P chart below, showing some period of 12 months from December to November, your guess should be that it dates back to good, pre-crisis times, while in fact it illustrates recent 12 months. No major correction, low volatility and over 30% return over the year is what stockholders on average experienced in 2013.

Such patterns are typical, but for the late expansion phase, in which GDP growth is high, unemployment runs low, inflationary pressures intensify and have to be dampened by monetary tightening. Such chart could also come from a period of early economic recovery, when stock prices bounce back after a dismal bear market. But the bear market actually has not occurred since early 2009. Since late winter of 2009, stock markets have been in the bullish phase, with some major corrections: in spring 2010 when bankruptcy of Greece was a real threat, in summer 2011 when US sovereign rating was downgraded, in spring 2012 (was there a profound reason for the downward movement?), but since then most markets have been rising without a deeper break to take a breath.

Is the incline sustainable?

Every why has a wherefore. Sound bull markets the history has witnessed were grounded in economic fundamentals – economies were expanding, fewer people were jobless, taxpayers paid more in taxes and governments ran nearly balanced budgets, wheels in the economic machines were oiled property and central banks kept interest rates on moderately high level to prevent economies from overheating and preclude inflation from going up. Now the economic growth rate in USA stays below 3%, Western Europe economies are rebounding after deep slowdown. Unemployment rate in the USA is above 7% (which is very higher given the flexibility of labour market there), in the eurozone it is above 10%. To combat adverse economic conditions, tremendously loose monetary policy has been pursued over last five year. Not only have the interest rates in the biggest economies have been cut to near zero, but many central banks have been carrying out quantitative easing programmes, or in plain English, increased money supply in financial system.

Normally when if money supply goes up, everything else held constant, price level should increase by the same rate, to keep the financial system in balance. To many economists’ surprise, ultra-loose monetary policy has not sent overall price level rising. The reason for it is simple – the money intended to prop up the real economy through the financial system have not flowed out of banks and drove up asset prices.

Long ago it has been discovered that low interest rates distort economic decisions. The upshots are now visible on stock and property markets in many countries. House prices in the United States and in Great Britain have seen double-digit increases over the last year. Is this trend sustainable?

I keep asking myself a question: “why so good, if so bad?” Why are the markets red-hot if the economy is still fragile? The only plausible explanation is that market participant are buying the prospects of bright future. But can the next years be rose-coloured, if financial markets rely on drip of cheap money provided by central bankers? Near-zero interest rates cannot be kept forever. One day central bankers will have to bite a bullet on it and what then? The biggest corrections in the recent months on the stock market have been brought about by rumours of QE being tapered or petering out in near future. Central bankers realise the scale of pathological reliance of markets on monetary easing and the difficulty they have to get to grips with is how to pull out of the egregious practice of printing money without harming the markets, as the shock suffered by them would be transmitted into real economy. This dilemma niftily depicts the abnormality of current situation. In ‘normal’ environment raising the cost of credit above certain level just stifles economic activity and dampens enthusiasm of financial markets’ participants. At the present, leaving cost of credit on historically low levels, but only curtailing pumping money may wreak bigger havoc to financial system than unexpected jacking up interest rates by 100 points in a healthy economy.

Quite frequently you can hear of economists arguing, whether the recent unfettered stock market rally is a full-blown bubble, or it only has all makings of a bubble. Federal Reserve has already received a warning. Many indicators (P/E > 25, margin debt, bullish sentiment, low volatility, technical indicators) point at existence of a bubble, while other (business cycle phase, low participation of individuals in the market) may disprove the bubble theory. I only wish to stress the presence of the word “bubble” in the media and in the search engines might be a misleading gauge and should be interpreted with caution.

According to the scenario in the paper linked above, the crash is very likely to occur in 2014. If so, I foresee it will not strike out of the blue, but the show will go on in the ordinary way. At some point stock market reaches its peak, then retreats, attempts of bullish speculators to drive prices up go in vain, then ensues the waterfall (shape of a price chart when prices plummet), then a rebound, then a gradual decline and at the end the tsunami strikes… This pattern is similar to what was observed in 2008 (peak in 2007, retreat, waterfall in early 2008, decline till the early days of September 2008 and then the Lehman earthquake). The first and foremost argument against such scenario is that financial system is not full of toxic assets as it was before the crisis. On the other hand, central banks and government have run out of tools the used to rescue financial institutions and economies in 2008 and 2009. Fhe frail economies cannot endlessly underlie exorbitant stock market valuations and the sooner market participant realise it, the better for everyone.

These musings take me back to the last semester of my studies, when in late 2010 I took a course “Financial crises and financial stability”, delivered by prof. Mieczysław Puławski. I recall well the lecturer mentioning a crisis model devised in 2009, according to which a much more wrathful crisis will hit in 2H2014. Time will tell, if the prophets’ of doom prediction was right.

A few paragraphs above I stated “financial markets rely on drip of cheap money” and laid my thought out very precisely – financial markets, not real economies. Real economies are capable of bearing the burden of higher cost of credit, it may bend them, but will not knock them down and in the long run sound monetary policy will lay foundations for returning to the path of sustainable economic growth.

Compared to developed markets, Poland comes out impressively safe. The property market has been on decline since 2008. In 3Q2013 property prices nudged up, yet it is too early to judge, whether the trend has reversed, or the rebound is just a correction in a downward trend. Unquestionably, the increased demand for properties is the effect of lower interest rates and constricting regulation regarding buyer’s equity for property purchase (min. 5% in 2014, this one hastened many buyers finance the planned transactions with 100% mortgage this year). One swallow does not make a summer and it will be the summer of 2014 when with hindsight the mid-term trend on Polish property market can be observed.

The Polish stock market has been consistently underperforming developed markets. While S&P 500 and DAX indices are well above their 2007 peaks, WIG (broad market total return index) and WIG20 (blue chip price index) are not only below their 2007 peaks, but also below their highs recorded in first half of 2011. Market analyst put it down to insecurity over future of pension system in Poland. If this is indeed the case, it only bears out the reform is a step in the right direction. Despite not beating ever-time records, the stock market in Poland is red-hot, judging by IPO frequency and successfulness. 4Q2013 already saw privatisation of PKP Cargo, which was priced quite high and debuted at absurdly high price. I subscribed for shares of PKP Cargo, took the 19% profit and made off. Recently I subscribed for Newag, just for fun I signed up for 50 shares, 19 PLN each. On Friday I discovered I had been allocated mere 4 shares, as individual investors’ demand surpassed supply over 25 times, which resulted in 93% haircut in share allocation… Demand for Energa among individual investors is also record-high and over-subscription is expected. I will subscribe for those shares as well, hoping to find the greater fool to buy them from it on secondary market. I realise this has become a fad and market sentiment clearly indicates I should rush to escape.

My strategy is to liquidate my stocks portfolio in first weeks of 2014. I last bought stocks in early September 2013, when pension reform announcement triggered a short-lasting sell-off, which turned out to be a superb mid-term investment opportunity. The only reason why I have not pulled out of the stock market recently is the sizeable loss from hapless 2011 which is carried forward into next years. According to Polish tax regulations, no more than 50% of a loss from a specific year may be used as tax shield in any of next following year, so this year (in 2012 my profit was very small) I cannot use it up and sale of securities in 2014 offers a chance to reduce capital gains tax payable. And after I scram, may it all collapse. By all accounts, Poland’s economy will not be severely impacted by the downturn on financial markets and subsequent bear market might offer interesting long-term investment opportunities.

The new finance minister

At times I come to think the more I work overtime, the more hollow my life gets. It is not about doing nothing except working and focusing on mundane daily duties – over the last fortnight I easily found time to eat out (not confuse for ‘date’) with a friend, attend a conference, visit a theatre, but to offset this, I totally lost track of what was going on in the world. Just imagine yesterday, with a three-day delay, I learnt about a considerable reshuffle in the Polish government The recent pace of my work has become so dreadful (my thanks to several colleagues who have taken sick leaves, not their fault, but me is who is bearing the brunt of their infections) that I could not even find time to take a break and spend a few minutes surfing the web to check the daily news and back home, after eleven hours of toiling away, I did not feel like watching TV or reading news online. Over the working week I lost track of everything and had to catch up…

Yesterday I read the list of 7 ministers that have been replaced and their successors. Cross my heart, I cannot recall now most of them and what has left in my memory is a portrait of Elżbieta Bieńkowska, who will serve as deputy prime minister (she’s got balls) and the new finance minister.

The departing (appointment of the new minister becomes effective on 27 November 2013) finance minister, Mr Rostowski, has held his position over six years and in the recent months has gone increasing unpopular with voters, in the wake of plans of dismantling the private-run part of pension system and the budget amendments resulting in higher deficit and suspending safety debt/GDP ceilings. Having observed him over his term in office more or less cautiously, I am in two minds about Mr. Rostowski’s performance during his tenure. To make an unbiased judgement, I would need a comparison and because of the long period of time when he was irreplaceable, I cannot find a proper benchmark. When he was taking the office, Poland was in the last months of riding the waves of pre-crisis boom. In late 2008 it became evident economic reality had been turned upside down, economic growth decelerated swiftly and running a sensible fiscal policy became a much more challenging task. In 2009 he managed to strike a fair balance between using fiscal stimulus to bolster economy and keeping debt/GDP ratio on moderate levels, without jeopardising Poland’s creditworthiness. In later years he could not boast about actual accomplishments in bringing forth structural reforms that could heal Poland’s public finances in long run. In the second wave of economic slowdown, due to excessive budgetary deficit Poland ran since 2010, he ran out of tools to rouse up economy, therefore Polish economy recorded sluggish growth of mere 0.5% in 1Q2013. His plans of detracting from the pension funds were not driven by straightforward conviction of inherent drawbacks of the pension system, but by pressure to relieve the tensions in the state budget. By many Mr Rostowski is deemed to be a seasoned liar. I do not wish to examine how many times he was departing from the truth, although such summary at the end of his term could come in useful. As his positive attribute, I will memorise his power of calmness in public discussions over the pension system. He managed to clearly and substantively explain the workings of the pension system and purpose of the proposed changes. Despite being quite selective in his justifications, his way of speaking and argumentation were assessed impressive not only by me. For too many PO supporters he was intolerable, so potential positive impact of ousting him from the government has probably urged Mr Tusk to look for someone to replace him.

My first association when I heard the name “Mateusz Szczurek” was… ING. And then my second thought was… ING pension fund…

Over the whole weekend I was wondering what the rationale behind this decision was and whose decision it actually was.

By all accounts, it should have been an independent decision of Mr Tusk. Quite probably, the prime minister, minding the impact of the reshuffle on the support for the government, shied away from swapping Mr Rostowski for a PO politician and preferred to nominate a person commonly labelled as an independent expert.

Beyond all doubt, given the gruelling state of Poland’s public finances, many potential candidates turned down offers of taking up the challenge of running the shop in which one has to bend over backwards to make ends meet. A rationally-thinking man could consider such offer either as a poison pill or… as a rewarding challenge.

Mindful of this, I find Mr Szczurek’s choice mind-boggling. He had pursued his career (started at the age of 22, just like mine) with one institution – ING and in 2011 was promoted to the position of chief economist for CEE region, the prestigious and certainly financially rewarding job. What drove this 38-year-old father of five children and cycling enthusiast to give up on the position, reputation of independent expert, credentials, esteem and earnings I could only dream of, to step into the murky world of politics?

For sure the motives were not pecuniary. I estimate his salary will shrink by at least 80%. My parents told me he had been asked by a TV journalist in one of interviews, how would he get used to earnings of 15,000 before tax a month after leaving a much better paid position and Mr Szczurek was more than perplexed. The after-tax salary of some 9,000 per month will allow him and his family to scrape along, but if they do not tap their savings, their standard of living is likely deteriorate…

If it was not about money, it must have been about power. Maybe the financial conglomerate he used to work for so long was too small for him to fulfil his potential. Maybe he craved for a profession that would make him far more recognisable, influential and, if his achievements were remarkable, remembered by generations. Maybe, after years of working for a Dutch corporation, patriotic feelings overwhelmed him and he made up his mind to sacrifice the lucrative position for a benefit of his country. I am reluctant to give credence to the last explanation which here serves the purpose of playing intellectual game with the readership. I hold the view, you may share it or not, that decent people tend to stay away from the politics, do their bit in a private sector, perform their jobs as good as they can and lead stable lives far away from the spotlight…

Revisiting my first impression. I sever from any conspiracy theories, but it has to be borne in mind ING manages a pension fund being a part of public pension system, whose assets account for 24% of total assets under management in Poland. ING is a meaningful stakeholder of the pension system in Poland and has a vested interest in retaining it in the current shape, guaranteeing pension fund managers a steady flow of fees and little responsibility for returns. It occurred to me the new minister, in the light of decreasing support for the pension reform, would take steps to unwind it. On second thoughts, I abandoned this theory. Having in mind the budget for 2014 would not be overrun without diminishing transfers to social security fund, aimed at replenishing deficiencies generated by moving contributions to pension funds, one of key criterions for sure was the candidate’s promise to take over the implementation of pension reform, in line with the government’s blueprint. After stepping down from his current position, Mr Szczurek will no longer owe the duty of loyalty to ING, but by getting involved in undermining the business of pension fund managers, he burns his bridges with his Dutch-based employer.

Most economists, asked about the competencies of the new minister, either could say little about him, or spoke highly about his characteristics. Unlike many economists, he is said to be a rational and equable expert who favours modest solutions, rather than ardent follower of a specific doctrine (see besotted neo-liberal, Mr Balcerowicz) – the stance I hold dear with economists and which bodes well on his future conduct.

I wish Mr Szczurek many successes on his new path and pin hopes in him – I hope his prudent decisions will contribute to sustainable improvement Poland’s creditworthiness and reduce the scale of indebtedness in the long run. Much indicates better times are coming. When the economy is expanding, expenditure cuts, accompanied by keeping tax rates intact, or even raising them, when appropriate, are the least painful to the economy and people. May he resist temptations to sit on laurels and cut off coupons from the booming economy and calls to add fuel to the fire by easing fiscal policies! May he not waste the chance to turn around the Poland’s public finances! May he not repeat the mistakes made by PiS government, when in 2007 the state budget, instead of reporting a surplus, ran a 22 billion PLN deficit!