UKC

Back to normal

New Topic
This topic has been archived, and won't accept reply postings.
 dh73 27 Apr 2020

people seem to be waking up to the fact that not everything about lockdown is bad and maybe it would be best if everything did not go back to exactly it was the way before.

What changes do people think may be capable of surviving after lockdown is lifted that would be beneficial?

For example, more home working easing pressure on the transport system

Just generally thinking more about whether in fact we need to travel. I don't think I have been more than 7 miles from home for several weeks now. Long term I would miss the Lake district, Snowdonia etc, but short term it isn't killing me.

6
 Red Rover 27 Apr 2020
In reply to dh73:

People will wonder why they drove an hour to the office and back every day to sit and do a spreadsheet. Students who are being lectured online may wonder why they spent so much money to go to a campus. I will wonder if I needed to spend so much money on stuff and going out on the town as I am happy with less stuff and fewer luxuries, once I can travel around the UK again and do my hobbies (although such thoughts are terrible for the economy)!

 Timmd 27 Apr 2020
In reply to dh73:

I think the drive of capitalism will mean that life for many becomes as frenetic as it was before, and unless environmental strings are attached to financial help for businesses (which is in our own self interest as a species), we'll go back to running towards our own self created extinction or killing off of a proportion of our species (along with mass migration and competition for resources). 

If it's not seen as cheaper to make any changes to how things were before by 'the powers that be', in many businesses they probably won't happen (in my humble opinion).

Edit: Hopefully we're not as doomed as the above, but it'll take big changes to avoid it....

Post edited at 15:26
1
 Gone 27 Apr 2020
In reply to dh73:

I think there might be more appetite for schemes that vastly reduce the amount of traffic in cities. The ‘can’t be done’ argument will become a lot weaker and people are feeling the benefits of cleaner air.

On a lighter note, comfier clothes may become the rule over formal workwear. Elastic manufacturers will be happy, dry cleaners less so. Unless people go wild for fancy clothes and new party outfits when they are able to be out again at social events.

 Pilo 27 Apr 2020
In reply to dh73:

Here in India people are being dehumanized and degraded. Those who had a perfectly decent standard of living from day to day, week to week are now forced to line up at government stations for meals. This situation is serious and soon to turn into malnutrition and starvation. 

Indian government follows UK and USA health policy almost exactly to avoid losing huge amounts of money from WHO and IMF so it matters. what happens over there makes a big difference on what happens here, 

Please help us people, watch this video if it helps, the latest data and findings from the biggest state in USA.  

youtube.com/watch?v=xfLVxx_lBLU&

8
 dread-i 27 Apr 2020
In reply to Red Rover:

>People will wonder why they drove an hour to the office and back every day to sit and do a spreadsheet.

Many employers may blur the line between work / life. If your day ended at 5, it might now extend well into the evening. In addition, some people might fell pressure to keep going until its done.

The high street was in decline before, its probably going to go down faster. Pubs and after work casual drinking will reduce. Lunchtimes will see people making their own lunch, so fewer cafes, coffee shops and takeaways.

1
 Neil Williams 27 Apr 2020
In reply to dread-i:

> The high street was in decline before, its probably going to go down faster. Pubs and after work casual drinking will reduce. Lunchtimes will see people making their own lunch, so fewer cafes, coffee shops and takeaways.

That doesn't follow.  As a long-term home worker I often choose to go out for lunch to break the monotony.

1
Moley 27 Apr 2020
In reply to dh73:

Rural areas like here, more use of supermarket deliveries and less trips out. Town is 15 mile round trip and large supermarket 50+ so there are big travel savings to be made (no buses here, so not an option).

Although we and some others have utilised delivery services since they started, I believe this has concentrated the minds well to plan and think ahead food wise and realise it can be done. 

We also now have a weekly local town butcher delivers, bakery and fruit/veg/pies van, this is more like the old days! We all try to support them but not sure how they will fare later, purely due to price differential with the supermarkets.

 Red Rover 27 Apr 2020
In reply to dread-i:

That's all a sad possibility. I avoid any blurred lines between work and home-life by turning off the PC at 5 but I'm fortunate enough to be in a position where I can do that, and that my employer doesn't pressure people into doing more than their contract. 

I think pubs and caffs will be fine after a hard year or two as we are all desperate to get back to them! This is a temporary demand-shock hopefully. Not that I know much at all about economics so I'll stop there. 

 Ian W 27 Apr 2020
In reply to Moley:

> Rural areas like here, more use of supermarket deliveries and less trips out. Town is 15 mile round trip and large supermarket 50+ so there are big travel savings to be made (no buses here, so not an option).

> Although we and some others have utilised delivery services since they started, I believe this has concentrated the minds well to plan and think ahead food wise and realise it can be done. 

> We also now have a weekly local town butcher delivers, bakery and fruit/veg/pies van, this is more like the old days! We all try to support them but not sure how they will fare later, purely due to price differential with the supermarkets.

Is that price differential not eaten away (and more!) by the cost of getting to the supermarket and back? You might be very surprised if you work out the total cost, and then how much extra free time you have by not having to do that 50 mile round trip to the supermarket, no doubt buying more than you intended "because its there" (I know I do....). And there's the mental health benefits in not having to go to those godforsaken, soul-sucking places........

 dread-i 27 Apr 2020
In reply to Neil Williams:

>As a long-term home worker I often choose to go out for lunch to break the monotony.

I work between home and London, so have the best and worst of both worlds.

When I'm at home if I go out at lunch, it's to go for a run and not out for food. In London, I cant run at lunch so I'll go out with colleagues or wander round a museum and grab a butty on the way back in. If it's hectic, I'll nip out and then eat at my desk.

People will adapt and so will business. It might be that cafe's and takeaways start delivering lunches to homes, rather than offices.

 Richard Horn 27 Apr 2020
In reply to dread-i:

Working culture was/in a transition anyway - less big companies moving to more smaller companies / startups etc. People wont countenance relocation to move to a smaller company (and smaller companies wont pay for relocation) hence there has been a general shift to WFH in many sectors already - I work in engineering and a scan of jobs boards now show probably 1/3 as allowing full time home working. There are pros/cons - generally you get given a task and a deadline and little attention is paid to how you work as long as you are delivering - I do lunch time bike rides, but then I may end up working later into the odd evening. By and large companies dont seem to use WFH to abuse their staff (at least that I have seen).

 Trevers 27 Apr 2020
In reply to dh73:

Homeworking really isn't sustainable for a great many people. My productivity has fallen to perhaps 20% of my former output. I think it's largely based on the comfort of your housing arrangements.

2

I think home working will be the biggest change, as you touched on. 

I don't think bosses are going to have an easy a time as they used to when it comes to forcing people to come into the office. I only lose about 40 minutes to my commute each day, but that's still 40 minutes I'd rather not lose. 

The positive environmental impact must be huge. 

The government should make it a legal requirement for companies to allow home working if requested, and there's no very good reason to not allow it. 

I'd not want to work from home for the entire week, personally. But 2-3 days a week? Yes please. Would probably get more done with less distractions too. 

Moley 27 Apr 2020
In reply to Ian W:

> Is that price differential not eaten away (and more!) by the cost of getting to the supermarket and back? You might be very surprised if you work out the total cost, and then how much extra free time you have by not having to do that 50 mile round trip to the supermarket, no doubt buying more than you intended "because its there" (I know I do....). And there's the mental health benefits in not having to go to those godforsaken, soul-sucking places........

I agree with you, but not convinced that old habits won't creep back in for most, especially regards supporting the van deliveries from local shops. Some people seem to drive to town every day from habit and buy something for the sake of it. Personally if we are out of bread, milk etc. I cycle in - but can't do that for ever.

In reply to dh73:

It depends on whether the lockdown period is financed with debt and how long it lasts.

If we come out of this saddled with significant additional debt and in a period of reduced demand we'll be working our arse's off just to pay interest and keep what we have.

 Dax H 27 Apr 2020
In reply to Trevers:

> Homeworking really isn't sustainable for a great many people. My productivity has fallen to perhaps 20% of my former output. I think it's largely based on the comfort of your housing arrangements.

The other side of that coin is I moved from my office at work in to the small bedroom at home about 6 months ago and my productivity is way up. No one coming in saying "whilst you're here can you just"

The only problem is my Mrs is now working from home and has stolen my office. Her productivity is well up too. 

 SFM 27 Apr 2020
In reply to dh73:

Work- The wfh genie is well and truely out the bottle now so I can see it now becoming the norm for many companies, especially those with high rents to pay or an old seated suspicion about how efficient it’s workforce would fare. A potential knock on effect could be to commuter train lines. 
More people working ”locally” could provide a boom for local shops and services rather being concentrated in business centres.

Foreign travel - do we go back to old habits or are the airlines so damaged that the age of the cheap/ thoughtless flight is over?

Walking/ outdoor exercise- I have never seen so many folk running/walking/cycling as I do at the moment. Even if 50% keep going it will make a massive difference.

A&E use - I keep reading about 111 use exponentially increasing. How sticky is that habit over driving to a hospital/calling 999?

 BnB 27 Apr 2020
In reply to tom_in_edinburgh:

> It depends on whether the lockdown period is financed with debt and how long it lasts.

> If we come out of this saddled with significant additional debt and in a period of reduced demand we'll be working our arse's off just to pay interest and keep what we have.

Back of a fag packet calculation suggests that debt service on Sunak’s £300bn is £1bn pa. Or 2 extra hours production out of our annual GDP. 

Failing to balance inflation vs deflation is actually the real test. My instinct is that the latter is a bigger threat.

1
 Mick Ward 27 Apr 2020
In reply to Trevers:

> Homeworking really isn't sustainable for a great many people. My productivity has fallen to perhaps 20% of my former output. I think it's largely based on the comfort of your housing arrangements.

In 1985 I was working in Knightsbridge. Could get sod all done at Head Office because of constant interruptions. Started working from home. My productivity went off the end of the scale. I never worked more than five hours a day (was knackered by then). Brought more money into the company than anyone else. Was asked to leave (yup!) as various people at Head Office felt massively threatened by said productivity/income generation. Had ignored office politics.

That was, err... 35 years ago. Why knowledge workers don't work from home is beyond me. And no, office politics doesn't add value.

Mick

 Fozzy 27 Apr 2020
In reply to dh73:

Going into school for 2 days a month & doing their rest of my teaching online is surprisingly enjoyable. I doubt it’ll continue. 

 Trevers 27 Apr 2020
In reply to Mick Ward:

> That was, err... 35 years ago. Why knowledge workers don't work from home is beyond me. And no, office politics doesn't add value.

I'm working on the final year of my PhD, so no boss and no deliverables except for the big one at the end. Through remote connections, I have access to all the materials I need.

However, I rent a room in a small house of 5, the other 4 of whom are either furloughed on pay or effectively retired, so I'm the only one actually working. It creates a sense of a household on holiday, especially with the recent good weather. Office politics would be a tiny price to pay in return for simply being in a working environment.

I've been required to switch my timetable to accommodate the household. For sake of ease we do evening meals together, a weekly cleaning day and I do weekly household shopping trips. Each day, I have a choice of setting up my "office" in my bedroom, which destroys my sleep, or in the dining room where I constantly have people coming through, using washing machines etc. In short, I don't have a space in which to work.

Before all this, I was comfortably on target to meet my submission deadline in six months. Now, I am very likely to miss my deadline. Adding to the pressures are worries about whether the university is likely to be sympathetic to my situation and grant an extension, the fact that my work now no longer feels particularly important (coupled with the fact that I'm no longer being paid) and the fact that my chances of finding a permanent research position at the other end are now massively reduced.

While some of these pressures are the result of my PhD situation/the current crisis, it would still be very difficult to set up a productive home office in my living situation. If home working works for some then that's great. But it's hugely dependent on both the individual's temperament and their living situation. I worry that a wholescale industry shift in the direction of homeworking could seriously disadvantage younger workers starting careers and with less amenable living situations.

EDIT - I also have an utter abysmal internet connection here, which makes remote working an awful lot more difficult than it ought to be.

Post edited at 23:05
1
 Red Rover 27 Apr 2020
In reply to Trevers:

They'll give you an extension surely? 

P.S. I wrote my thesis in my bedroom a few years ago as I had to move away from the uni into a house-share. I found that the best things to do were to face the desk away from the bed, have the desk and bed as far away as possible, and if possible erect a screen between the bed and the desk even if it's just laundry.

Post edited at 23:10
 Trevers 27 Apr 2020
In reply to Red Rover:

> They'll give you an extension surely? 

I should hope so but there hasn't been a whole lot of clarity so far from the ivory towers. University management obviously have a huge amount to deal with right now so that's understandable. I'm just a bit worried because ostensibly my situation isn't massively impacted directly (in that I don't have issues around lab or fieldwork, and I haven't been ill myself or had to deal with illness in my family/household), but I expect they will err on the side of leniency.

But more generally, one's ability to work productively from home is hugely dependent on their circumstances.

1
 elsewhere 27 Apr 2020
In reply to Trevers:

Ask the university what provision possible for solo access to office/lab/whatever. They'll say no but it makes them aware of the issue with you presenting possible solution.

 freeflyer 27 Apr 2020
In reply to Trevers:

>  I also have an utter abysmal internet connection here, which makes remote working an awful lot more difficult than it ought to be.

Apologies if this isn't a useful suggestion, but have you explored tethering your phone to your work device? I spent some time working in Himachal Pradesh a while ago, and the wifi available was sh*ite; long story short, I found tethering my PC to the ubiquitous, excellent and cheap mobile data available worked brilliantly, and I was able to do pretty much everything I needed.

Post edited at 23:35
 Trevers 27 Apr 2020
In reply to freeflyer:

Thanks for the suggestion but I'm one of those luddites still using an old Nokia But I'm looking into getting some dongle or widget to plug into my laptop.

 climbingpixie 28 Apr 2020
In reply to Trevers:

That sounds like a crap working set up. I don't know who you're funded by but my impression is that universities are looking very leniently on extensions. UKRI are automatically granting 6 months extensions for final year PhDs and I believe some of the other research councils are looking at it. Personally I've asked for a temporary suspension as, unsurprisingly, it turns out that people aren't that interested in being interviewed on their use of climate projections during the midst of a pandemic and it seems to have just been nodded through.

Moley 28 Apr 2020
In reply to dh73:

I've had an infected back cyst this last 10 days (I won't go into the gruesome details of me bursting it), but infection took a turn for the worst yesterday.

This morning I phone up surgery and my contact details taken and basics of problem, 10 minutes later GP phones back, quick discussion and he prescribed antibiotics (a recurring problem I've had before), I go in now and pick them up. 

5 minutes of GPs time? No waiting room, no patients not turning up. 

Room for some changes here to streamline and I'm sure one could include a photo or live time consultation. Might work for many minor ailments?

Post edited at 10:43
 Ridge 28 Apr 2020
In reply to Moley:

> This morning I phone up surgery and my contact details taken and basics of problem, 10 minutes later GP phones back, quick discussion and he prescribed antibiotics (a recurring problem I've had before), I go in now and pick them up. 

> 5 minutes of GPs time? No waiting room, no patients not turning up. 

> Room for some changes here to streamline and I'm sure one could include a photo or live time consultation. Might work for many minor ailments?

I think that's a good idea. There will need to be checks that patients aren't repeating prescriptions they don't need, contraindications and you'd need to monitor the amounts of painkillers etc that people are consuming.

I'd be interested to see how many non-emegency cases are currently attending A&E for something to do since the Covid restrictions came in.

 Neil Williams 28 Apr 2020
In reply to Ridge:

> I think that's a good idea. There will need to be checks that patients aren't repeating prescriptions they don't need

Though they'd save money by allowing indefinite repeats of things that tend to be constant.  My surgery won't allow more than 3 repeats on any medication before an in-person "medicine review", and it's a waste of time and money - my asthma isn't going to go away, and there's already an annual review of the asthma itself and I can make an appointment if I find it's not working.

It's probably me with my work hat on here, but an "incident management" approach would make sense here, with one "incident" that keeps going throughout treatment and investigation, and possibly a "root cause" record to do further analysis.  You "raise an incident" by your preferred means, be that online, by phone, in a pharmacy because they've said they can't help, at the doctor's reception counter or whatever.  Then you're prioritised and allocated an appointment as appropriate to your needs at the appropriate location.  You keep the "incident reference" and audit trail throughout the investigation etc.

(It's amazing the number of things you can apply ITIL to quite well with a few minor tweaks)

Post edited at 11:05
 Timmd 28 Apr 2020
In reply to Mick Ward:

> That was, err... 35 years ago. Why knowledge workers don't work from home is beyond me. And no, office politics doesn't add value.

> Mick

I guess it depends. A company a relative was linked to noticed the difference once a member of the R+D team was deported due to an admin quirk (the company was bought out so the name on his visa didn't match his place of work anymore, the Hostile Environment policy took care of the rest), one of them said that they'd just lost the R in the R+D. Their office practice is for people to email one another requests and questions, too, so that the people being asked don't get interrupted, and things don't get forgotten because they're on record, not like verbal requests or questions can be at least. 

Post edited at 13:36
 RomTheBear 04 May 2020
In reply to BnB:

> Back of a fag packet calculation suggests that debt service on Sunak’s £300bn is £1bn pa. Or 2 extra hours production out of our annual GDP. 

300bn ? Only 1bn per annum ?

Unless it’s rolled over 300 years at zero rates I don’t see how that can be correct.

Or is there a magic money tree after all ?

 BnB 04 May 2020
In reply to RomTheBear:

It’s a yield of 0.33%, which is my estimate of a blended 10 and 20 yr issue. Currently 10 yr is at 0.24%!!

At maturity it would be rolled of course but do you think any government is thinking about that right now? My guess, for what it’s worth, is that rates will be lower still at that point.

Post edited at 13:33
 Ian W 04 May 2020
In reply to BnB:

> It’s a yield of 0.33%, which is my estimate of a blended 10 and 20 yr issue. Currently 10 yr is at 0.24%!!

> At maturity it would be rolled of course but do you think any government is thinking about that right now? My guess, for what it’s worth, is that rates will be lower still at that point.

Also don't forget a large part of the £300bn is loan guarantees, not actually cash given out.........whilst i have no doubt some companies will fail and the banks will call on the guarantee, it isnt going to be all of them.

And to widen the debate a bit; it maybe calls into question the reasoning behind the policy of austerity pursued for the last 10 years, and a lot of the baying and screaming about the labour and lib dem spending plans at the last election. Not that i would disagree with the loan guarantees / rates holiday / grants / furlough etc - I think those are absolutely the right things to do under the current circumstances.

 RomTheBear 04 May 2020
In reply to BnB:

> It’s a yield of 0.33%, which is my estimate of a blended 10 and 20 yr issue. Currently 10 yr is at 0.24%!

Even assuming zero rate, it doesn’t check out, by an order of magnitude. No matter what the yield  curve does, the face value of those bonds needs to be paid when they mature ! 

Post edited at 14:08
 RomTheBear 04 May 2020
In reply to Ian W:

Debt needs to be repaid, one way or another. The younger generation is being totally screwed over, even though they are the ones making all the sacrifices to protect their elders from coronavirus.

After bashing other parties with the national debt, this government has proven to be totally financially irresponsible.

Post edited at 14:30
4
1philjones1 04 May 2020
In reply to RomTheBear:

So what would your financial response have been if you were Chancellor of the Exchequer?

 BnB 04 May 2020
In reply to RomTheBear:

> Even assuming zero rate, it doesn’t check out, by an order of magnitude. No matter what the yield  curve does, the face value of those bonds needs to be paid when they mature ! 

As I already stated. They would get rolled over, as all govt debt is nowadays. So the principal is repaid and re-borrowed simultaneously.

 RomTheBear 04 May 2020
In reply to 1philjones1:

> So what would your financial response have been if you were Chancellor of the Exchequer?

I would have focused on protecting the weakest and poorest, which would be very cheap indeed.

And just let everybody else take a hit. No bailout or guaranteed loans for businesses.

If every time there is a crisis individuals and businesses get bailed out, with the cost piled on the future generation, there is absolutely no incentive for anybody to build resilience, and our economic system will continue to be increasingly fragile to any sort shocks.

Beyond the economic rationale, leaving the cost of our own mistakes to our children is a clear sign of moral decrepitude.

11
 RomTheBear 04 May 2020
In reply to BnB:

> As I already stated. They would get rolled over, as all govt debt is nowadays. So the principal is repaid and re-borrowed simultaneously.

Well, yes, but still, the principal is repaid, but you omitted to include that in your figure.

Post edited at 16:48
 BnB 04 May 2020
In reply to Ian W:

> Also don't forget a large part of the £300bn is loan guarantees, not actually cash given out.........whilst i have no doubt some companies will fail and the banks will call on the guarantee, it isnt going to be all of them.

> And to widen the debate a bit; it maybe calls into question the reasoning behind the policy of austerity pursued for the last 10 years, and a lot of the baying and screaming about the labour and lib dem spending plans at the last election. Not that i would disagree with the loan guarantees / rates holiday / grants / furlough etc - I think those are absolutely the right things to do under the current circumstances.

I maintain that austerity was the correct initial response. It settled corporate nerves in 2010 and led to an above trend recovery for the UK economy in the first part of the decade. But it should have been progressively unwound throughout those last 10 years such that services and welfare were not nearly so stretched by the end of the period. There is also the very valid question: how well-placed would we be to dip so deep if we had not eliminated the majority of the deficit?

4
 BnB 04 May 2020
In reply to RomTheBear:

If you read my first answer to you again I said it would be rolled over (13:30 today). You of all people know that means no extra funds are required to repay the principal.

1philjones1 04 May 2020
In reply to RomTheBear:

I’m no economist and that sounds great but surely then many thousands/tens of thousands (?) of businesses go under, employees lose there jobs, tax revenue goes down, spending power goes down and reliance on State handouts goes through the roof.

i don’t see how that is any better.

 RomTheBear 04 May 2020
In reply to BnB:

> If you read my first answer to you again I said it would be rolled over (13:30 today).

Yes, I saw that, but your 1bn pa isn’t the cost of servicing the debt, as you initially claimed, that’s the cost of servicing only the interest of the debt, so really it’s a gross misrepresentation.

> You of all people know that means no extra funds are required to repay the principal.

Of course you’ll need extra funds to repay the principal. In order to roll over the debt, you’ll need to raise funds by the issuance of more debt.

Post edited at 17:01
2
 BnB 04 May 2020
In reply to RomTheBear:

> I would have focused on protecting the weakest and poorest, which would be very cheap indeed.

> And just let everybody else take a hit. No bailout or guaranteed loans for businesses.

> If every time there is a crisis individuals and businesses get bailed out, with the cost piled on the future generation, there is absolutely no incentive for anybody to build resilience, and our economic system will continue to be increasingly fragile to any sort shocks.

> Beyond the economic rationale, leaving the cost of our own mistakes to our children is a clear sign of moral decrepitude.

I rate your knowledge and intelligence as being of an extremely high level. For which reason I'm bewildered that you would propose putting your principles above expediency in the certain knowledge that your plan would devastate billions, yes, billions of lives in the name of punishing an excessively leveraged minority. The time to take those measures is before the crisis, not after it.

2
 BnB 04 May 2020
In reply to RomTheBear:

> Yes, I saw that, but your 1bn pa isn’t the cost of servicing the debt, as you initially claimed, that’s the cost of servicing only the interest of the debt, so really it’s a gross misrepresentation.

> > You of all people know that means no extra funds are required to repay the principal.

> Of course you’ll need extra funds to repay the principal. In order to roll over the debt, you’ll need to raise funds by the issuance of more debt.

And so the sophistry begins. We could have an interesting conversation but instead you're not willing to accept that you misinterpreted my post. You need funds to repay the first maturity but not EXTRA funds as these derive from the new issuance, or roll-over. Stop wriggling.

Post edited at 17:08
 RomTheBear 04 May 2020
In reply to BnB:

> And so the sophistry begins. We could have an interesting conversation but instead you're not willing to accept that you misinterpreted my post. You need funds to repay the first maturity but not EXTRA funds as these derive from the new issuance, or roll-over. Stop wriggling.

I haven’t misinterpreted your post, at all, you simply made an error in it by omitting the principal in the cost of debt servicing, which I pointed it out very politely, and I did so only because it led to a gross misrepresentation of the figure, otherwise I would have ignored it.

Post edited at 17:32
2
 RomTheBear 04 May 2020
In reply to BnB:

> I rate your knowledge and intelligence as being of an extremely high level. For which reason I'm bewildered that you would propose putting your principles above expediency in the certain knowledge that your plan would devastate billions, yes, billions of lives in the name of punishing an excessively leveraged minority. The time to take those measures is before the crisis, not after it

Well maybe you want to continue to live in a world in which every single crisis causes a major economic meltdown that is your wish, not mine.

The only way to build a stable economic system that is more resilient to shock is to let businesses that don’t resist shocks die out, if we keep borrowing our way out of every crisis then every  crisis it’s going to be worse than the previous one.

And now, it won’t devastate billions of lives, you’ll simply have a temporarily lower standard of living and those with risky investments will lose them, which will create space for new people to come in and create.

And as I pointed out, all you need to do is to protect the weak, which is very cheap to do, and should do, because those who are weak today may be the ones creating wealth tomorrow.

1
In reply to BnB:

> It’s a yield of 0.33%, which is my estimate of a blended 10 and 20 yr issue. Currently 10 yr is at 0.24%!!

Something is seriously f*cked up if people are lending the UK government money for ten years at 0.24% in risk-laden circumstances like this.

It is not rational behaviour, it suggests there's some underlying reason like Bank of England buying the debt for printed money or laws forcing pension funds to invest in government bonds no matter how crap the interest.

If they need to print money to spend they should just do it and be open about it.

 RomTheBear 04 May 2020
In reply to tom_in_edinburgh:

> Something is seriously f*cked up if people are lending the UK government money for ten years at 0.24% in risk-laden circumstances like this.

> It is not rational behaviour, it suggests there's some underlying reason like Bank of England buying the debt for printed money or laws forcing pension funds to invest in government bonds no matter how crap the interest.

Most of it IS bought by the Bank of England. The rest is institutional investors who think (wrongly) that these government bonds are a good way to manage your risk.

 Ian W 04 May 2020
In reply to BnB:

> I maintain that austerity was the correct initial response. It settled corporate nerves in 2010 and led to an above trend recovery for the UK economy in the first part of the decade. But it should have been progressively unwound throughout those last 10 years such that services and welfare were not nearly so stretched by the end of the period. There is also the very valid question: how well-placed would we be to dip so deep if we had not eliminated the majority of the deficit?


We arent too far apart in our views; in fact very close indeed. Agree entirely that the financial world needed some stability, and agree that "austerity" (wierd word) should have been lifted sooner - imo it became a political rather than economic tool to be used in response to whatever suited the government.

 BnB 04 May 2020
In reply to tom_in_edinburgh:

> Something is seriously f*cked up if people are lending the UK government money for ten years at 0.24% in risk-laden circumstances like this.

> It is not rational behaviour, it suggests there's some underlying reason like Bank of England buying the debt for printed money or laws forcing pension funds to invest in government bonds no matter how crap the interest.

It's only irrational if you believe that interest rates are going to rise. If they follow much of the world into negative territory then the value of those bonds will increase so you get the gain as well as the paltry income. Have you a safer suggestion? Investors buy government bonds for security not big gains.

> If they need to print money to spend they should just do it and be open about it.

Andrew Bailey has already dismissed this idea. I think he will change his mind in due course when he sees everyone else doing it.

1
 Ian W 04 May 2020
In reply to RomTheBear:

> I would have focused on protecting the weakest and poorest, which would be very cheap indeed.

> And just let everybody else take a hit. No bailout or guaranteed loans for businesses.

> If every time there is a crisis individuals and businesses get bailed out, with the cost piled on the future generation, there is absolutely no incentive for anybody to build resilience, and our economic system will continue to be increasingly fragile to any sort shocks.

> Beyond the economic rationale, leaving the cost of our own mistakes to our children is a clear sign of moral decrepitude.


Thats a rubbish idea - just look at america. At least we will have jobs to go back to - have you seen the USA unemployment figures in the last 6 weeks?? When restrictions are lifted, they'll still have 20% unemployment; as bad as spain had a couple of years ago.

https://www.washingtonpost.com/business/2020/04/16/unemployment-claims-coro...

How on earth is that going to build any economic reilience??

Post edited at 18:40
1
 RomTheBear 04 May 2020
In reply to Ian W:

> Thats a rubbish idea - just look at america. At least we will have jobs to go back to - have you seen the USA unemployment figures in the last 6 weeks?? When restrictions are lifted, they'll still have 20% unemployment; as bad as spain had a couple of years ago.

> How on earth is that going to build any economic reilience??

The reason we get mass unemployment is because too many companies are run on shoestring, and have taken on debt to maximise profits instead building up reserves. 

In the past decade American companies have done 500bn of share buybacks, most of it financed through borrowing.

And now the US economy is being bailed out with a 500bn package....

The only solution is blood sweat and tears in the short term, for better days in the long term, or we can continue like this, and go from bad to worse at every crisis, until the world becomes so unstable and extreme that society cannot even cope with it.

Post edited at 20:19
1
 RomTheBear 04 May 2020
In reply to Ian W:

> We arent too far apart in our views; in fact very close indeed. Agree entirely that the financial world needed some stability, and agree that "austerity" (wierd word) should have been lifted sooner - imo it became a political rather than economic tool to be used in response to whatever suited the government

We haven’t really done “austerity”, we just cut safety for the weakest to satisfy the electorate, and bailed out, directly or indirectly, everybody else. 

Result: we are full of businesses who can’t handle more than a few weeks without cash, full of households laden with debt and no savings and now we are in even bigger shite, and we find ourselves, rich countries that we are, with loads of people who can’t even feed themselves.

Post edited at 20:33
1
 RomTheBear 04 May 2020
In reply to Ian W:

> How on earth is that going to build any economic reilience??

A resilient economy isn’t an economy where most people can’t go a more than a few weeks without income from employment without requiring a state bailout.

You want to protect jobs and companies at all costs, even if that means leaving our children huge debts and problems to deal with.

I want instead to live in a system where people and businesses are more self-reliant and can cope with periods of unemployment and downturns, and where we live the world in a better state than we found it to the future generation.
 

Post edited at 20:34
 kipper12 04 May 2020
In reply to dh73:

I need to see my mum, she is not well and it’s 120 miles away, so need to do this.  I’m also stuck, for reasons too numerous to repeat.  For my sanity, I need to see some green and be in hills again.  

 Ian W 04 May 2020
In reply to RomTheBear:

> A resilient economy isn’t an economy where most people can’t go a more than a few weeks without income from employment without requiring a state bailout.

> You want to protect jobs and companies at all costs, even if that means leaving our children huge debts and problems to deal with.

> I want instead to live in a system where people and businesses are more self-reliant and can cope with periods of unemployment and downturns, and where we live the world in a better state than we found it to the future generation.


Then that needs a complete shift in our mindset, both at national and individual level. As a nation we aren't natural savers, and rely on consumerism to "power" the economy.

However, to just allow the economy to completely collapse is just not practical.

 RomTheBear 05 May 2020
In reply to Ian W:

> Then that needs a complete shift in our mindset, both at national and individual level. As a nation we aren't natural savers, and rely on consumerism to "power" the economy.

It doesn’t need a massive shift a mindset, it needs a change of incentives. As long as we punish the savers in order to save the gamblers you’ll have this problem.

> However, to just allow the economy to completely collapse is just not practical

It’s very easy to do practically, you just have to let nature do it’s job.

It will collapse, but it will renew, and it will be more resilient and serve our needs better. If you don’t take the tumour out we are condemned to  keep this bullshit economy on ever increasing dose of Novocain whilst it gets sicker and sicker.

Post edited at 00:32
3
In reply to BnB:

> It's only irrational if you believe that interest rates are going to rise. If they follow much of the world into negative territory then the value of those bonds will increase so you get the gain as well as the paltry income. Have you a safer suggestion? Investors buy government bonds for security not big gains.

I think it is irrational to lock yourself in to 0.24% and UK £ for ten years in a situation which is full of unknowns and exceptional risk.

I can't see why anyone would consider these bonds unless there were severe legal constraints on what they could invest in.   Why tie yourself to UK £ when the UK has got more problems with the virus than many countries and Brexit looming and a particularly incompetent government.  Why lock yourself down for 10 years when you really need the ability to GTFO fast if you see the sh*t approaching the fan.  Why settle for 0.24% when in a few months there's going to be substantial opportunities for 'bottom fishing'.

1
In reply to RomTheBear:

> You want to protect jobs and companies at all costs, even if that means leaving our children huge debts and problems to deal with.

I think that is backwards.   Preserving existing wealth as reflected in the current levels of bank balances is the least important thing in this equation.  The thing we want to preserve is the useful activity - technical capabilities like the ability to make aero engines, food, transport, public services.   The thing we can afford to lose is passive investors making money from money.  

The financial system is the problem and if a radical cure is needed it should be 'kicking over the table' by printing new money or redistributing existing money so that:

a. everybody has enough to get by i.e. food, shelter, utilities and a little left over

b. productive and useful business is preserved (but perhaps not under exactly the same ownership).

If we come out of this with far fewer people with > £10 million in assets but we have kept our productive economy intact and nobody has gone hungry or become homeless we will have done well.

The government is going to end up printing money to bail someone out eventually.  It can either start early and do it by making sure there is a ton of money sloshing round in the productive economy so everyone has work to chase or it can wait until the productive economy is in tatters, millions lose their jobs and there is mass default on loans to banks.   Then it will need to bail out the f*cking banks (again) or the rich will lose their savings anyway. 

Post edited at 01:06
1
 BnB 05 May 2020
In reply to tom_in_edinburgh:

> I think it is irrational to lock yourself in to 0.24% and UK £ for ten years in a situation which is full of unknowns and exceptional risk.

It’s counter-intuitive but the risk is much lower than for almost any other sovereign issuer. The reason: very few nations on earth have the flexibility and security of issuing investment grade debt in their own currency whose supply is managed by their own central bank. The UK is one.

> I can't see why anyone would consider these bonds unless there were severe legal constraints on what they could invest in.   Why tie yourself to UK £ when the UK has got more problems with the virus than many countries and Brexit looming and a particularly incompetent government.  Why lock yourself down for 10 years when you really need the ability to GTFO fast if you see the sh*t approaching the fan.  Why settle for 0.24% when in a few months there's going to be substantial opportunities for 'bottom fishing'.

I think you need to study how the bond market works. Falling rates are a sign of demand. The rates are low because everyone wants them!!

Take a look at the rising value of negative yielding German or Swiss debt. Yes, you have to pay these nations to lend to them. It’s called financial repression and is spreading around the world. 

When you buy a bond you aren’t forced to wait until maturity to redeem it. Government debt is one of the most liquid, tradeable assets on the market.

 BnB 05 May 2020
In reply to RomTheBear:

> It doesn’t need a massive shift a mindset, it needs a change of incentives. As long as we punish the savers in order to save the gamblers you’ll have this problem.

> It’s very easy to do practically, you just have to let nature do it’s job.

> It will collapse, but it will renew, and it will be more resilient and serve our needs better. If you don’t take the tumour out we are condemned to  keep this bullshit economy on ever increasing dose of Novocain whilst it gets sicker and sicker.

None of this is nonsense, but it is economic madness to choose the shutdown of every economy in the world as the moment to inflict maximum pain. This crisis is very different to the last and there’s a danger of fixing the previous crisis rather than the current one. The problem here is the velocity of money, not debt. There is a segment of the economy (eg airlines, shale oil) that have not managed their finances robustly, but banks have greatly improved their balance sheets, even if systemic risk can never be discounted, and most large corporations are only moderately leveraged. The consumer and smaller businesses are more at fault than big capitalists.

What you are proposing made good sense over much of the last decade. Today however, it’s a wilful annihilation of all enterprise, good and bad, and tipping the planet into chaos. Anything that interrupts the orderly flow of money between governments, enterprises, employees, consumers and the unemployed is potentially disastrous. Hence the measures taken.

Maybe you could tone your proposals down a bit for now and raise your plan again when the immediate crisis is eased 

Post edited at 07:46
 wbo2 05 May 2020
In reply to RomTheBear:  SO basically you want a re run of Austerity?

I'm not averse to allowing large plc's like US airlines file for Chapter 11, but allowing every small business to go pop until they satisfy some notion of kitchen sink economics seems pretty foolish

 RomTheBear 05 May 2020
In reply to wbo2:

> SO basically you want a re run of Austerity?

No, we never had Austerity, What we had was a cut of the safety net for the weakest and a bail out of everybody else.

I want the exact opposite

> I'm not averse to allowing large plc's like US airlines file for Chapter 11, but allowing every small business to go pop until they satisfy some notion of kitchen sink economics seems pretty foolis

I don’t see the problem with businesses going pop, they get replaced by new businesses that are fitter to respond to changing needs.

3
 RomTheBear 05 May 2020
In reply to BnB:

> None of this is nonsense, but it is economic madness to choose the shutdown of every economy in the world as the moment to inflict maximum pain.

Now is exactly the right time to adapt our economy to the new situation. This won’t happen if you keep millions of people employed in sectors which are now useless, and capital invested in businesses that are fragile. 

> This crisis is very different to the last and there’s a danger of fixing the previous crisis rather than the current one. The problem here is the velocity of money, not debt.

The current crisis and the previous one are one and the same as far as I am concerned, Covid is just another event our system is unable to cope with, and there will be others.


> What you are proposing made good sense over much of the last decade. Today however, it’s a wilful annihilation of all enterprise, good and bad, and tipping the planet into chaos. Anything that interrupts the orderly flow of money between governments, enterprises, employees, consumers and the unemployed is potentially disastrous. Hence the measures taken.

You’re wrong about the annihilation of all enterprise tipping the planet into chaos. You won’t annihilate enterprise you will just have more churn.

Take for example the restaurant business, that’s a sector where bankruptcies happen all the time, in fact most restaurant business fail pretty quickly.

And yet I can always find a wide variety of places to eat, no matter how bad the crisis.
Even now with a complete lockdown I can order from hundreds of different restaurants.

I want the wider economy to be more like the restaurant business. More failure, more renewal, and therefore, more adaptable and more resilient.

> Maybe you could tone your proposals down a bit for now and raise your plan again when the immediate crisis is eased ;-

Unfortunately, it’s not possible to eliminate businesses that don’t resist shocks outside of a shock. 

1
 Ridge 05 May 2020
In reply to RomTheBear:

> I want the wider economy to be more like the restaurant business. More failure, more renewal, and therefore, more adaptable and more resilient.

I appreciate the point you're making, and it's a sound one economically.

Unfortunately it's a recipe for low wages, zero hours contracts, precarious job security and financial instability for vast swathes of the workforce.

 RomTheBear 05 May 2020
In reply to Ridge:

> > I want the wider economy to be more like the restaurant business. More failure, more renewal, and therefore, more adaptable and more resilient.

> I appreciate the point you're making, and it's a sound one economically.

> Unfortunately it's a recipe for low wages, zero hours contracts, precarious job security and financial instability for vast swathes of the workforce.

Explain why ? We don’t have financial stability nor job security and already plenty of zero hours contracts.

You know which part of the world has one of the highest rate of business failure ? The Silicon Valley.

I don’t see much problems with job security and low wages there.

Post edited at 12:16
1
 Ridge 05 May 2020
In reply to RomTheBear:

> Explain why ? We don’t have financial stability nor job security and already plenty of zero hours contracts.

By financial stability I mean the ability to get a mortgage and build savings, not something thst will be helped by being laid off every couple of months. 

> You know which part of the world has one of the highest rate of business failure ? The Silicon Valley.

> I don’t see much problems with job security and low wages there.

Probably because it's still a very specialised market and people with marketable skills are in demand. You can't apply what works in silicon valley to the general job market.

 RomTheBear 05 May 2020
In reply to Ridge:

> By financial stability I mean the ability to get a mortgage and build savings, not something thst will be helped by being laid off every couple of months. 

 

What hurts people’s ability to build a small capital  aren’t the small ups and down in income when they occasionally move between jobs, it’s the big one off losses.

Another point: nobody needs a mortgage. This idea that everybody has to take on debt is an absurdity created to fuel the financial system. 
 

> Probably because it's still a very specialised market and people with marketable skills are in demand.

And voila, you have just realised by yourself that having a marketable skill is far more important for job security than low rates of bankruptcies.

Post edited at 21:10
1
 Ridge 05 May 2020
In reply to RomTheBear:

> What hurts people’s ability to build a small capital  aren’t the small ups and down in income when they occasionally move between jobs, it’s the big one off losses.

For most people redundancy when their employer goes bust is a big one off loss.

> Another point: nobody needs a mortgage. This idea that everybody has to take on debt is an absurdity created to fuel the financial system. 

That would be fine if we can also reform the rental market as well as the jobs market in one fell swoop. If I hadn't taken on a mortgage and paid it off I'd be in a precarious position after retirement if I had to pay rent on top of the other bills.

> And voila, you have just realised by yourself that having a marketable skill is far more important for job security than low rates of bankruptcies.

Thanks for the sarcasm. Believe it or not I do have a fairly marketable skill, but everyones not me, and even fewer people possess your brilliance.

What would benefit you given your personal circumstances might not benefit the general population. It sounds very much like the USA. If you're smart and a risk taker you can get very wealthy, the US economy is resilient to changes in the world economy, but god help the semi or unskilled.

Post edited at 22:20
 RomTheBear 05 May 2020
In reply to Ridge:

> For most people redundancy when their employer goes bust is a big one off loss.

It isn’t if you find a job the next day.

> That would be fine if we can also reform the rental market as well as the jobs market in one fell swoop. 

Which is normally what a crisis does, but every time there is one you want to save the asses of those owning the real estate and job market.

> Thanks for the sarcasm. Believe it or not I do have a fairly marketable skill, but everyones not me, and even fewer people possess your brilliance.

I wasn’t talking about you nor myself.

> What would benefit you given your personal circumstances might not benefit the general population. It sounds very much like the USA. If you're smart and a risk taker you can get very wealthy, the US economy is resilient to changes in the world economy, but god help the semi or unskilled

The US, resilient ? Used to be, maybe, but that over. I’d feel safer having my money in Greece than in the US right now.

3
In reply to RomTheBear:

> You know which part of the world has one of the highest rate of business failure ? The Silicon Valley.

There's a difference between a jungle like Silicon Valley in boom times and a desert like the UK today.   

When the money is flowing freely there isn't much damage from lots of businesses starting up and lots of failure.   The people stay in employment and the skills stay in the economy.   Engineers can move from a failing start-up to another start-up or back into more stable companies like Intel, Cisco and HP.

The current situation is different, especially in the UK.   When businesses die there won't be money sloshing about to start new ones or orders for them to chase.   The few big, well established, tech companies we have like Rolls Royce could be in trouble themselves.

This is the time for government to pump demand into the tech sector with mega-projects to replace the organic demand which the depression is taking out so businesses with skills have work to chase.

 RomTheBear 06 May 2020
In reply to tom_in_edinburgh:

> The current situation is different, especially in the UK.   When businesses die there won't be money sloshing about to start new ones or orders for them to chase.   The few big, well established, tech companies we have like Rolls Royce could be in trouble themselves.

There has never been as much money sloshing around. Liquidity isn’t the problem.

The human capital doesn’t disappear when companies disappear, it is just freed up and reinvested somewhere else.

What we are doing now is to waste human capital by leaving people in jobs that are completely made up and useless.

I recommend the book « bullshit jobs » very good read.

> This is the time for government to pump demand into the tech sector with mega-projects to replace the organic demand which the depression is taking out so businesses with skills have work to chase

This only centralises even more, creating even more systemic risk.

Post edited at 09:01
1
 Ridge 06 May 2020
In reply to RomTheBear:

> The human capital doesn’t disappear when companies disappear, it is just freed up and reinvested somewhere else.

”The human capital”. That's quite telling, as is “it” to describe people and their lives, which can be “reinvested somewhere else”.

That may well be true, but this reduces humanity to a simple commodity that can be moved around at will, dumped when too expensive to maintain and picked up cheap when desperate to put food on the table.

 RomTheBear 06 May 2020
In reply to Ridge:

> > The human capital doesn’t disappear when companies disappear, it is just freed up and reinvested somewhere else.

> ”The human capital”. That's quite telling, as is “it” to describe people and their lives, which can be “reinvested somewhere else”.

> That may well be true, but this reduces humanity to a simple commodity that can be moved around at will, dumped when too expensive to maintain and picked up cheap when desperate to put food on the table.

On the contrary, it describes people skills as a valuable resource which cannot be taken away from them.

3

New Topic
This topic has been archived, and won't accept reply postings.
Loading Notifications...