The Ermine considers returning to work

I heard the sound of a thunder, it roared out a warnin’
Heard the roar of a wave that could drown the whole world
Heard one hundred drummers whose hands were a-blazin’

Bob Dylan, 1960-something

I retired eight years ago. There are many people who retire and return to work because they find their lives have no meaning without the 9 to 5, or they miss other aspects of work. I’m not one of them.

If we didn’t have coronavirus in the world I wouldn’t give the idea the time of day. I am old, and compared to the young mustelid that graduated in the early 1980s I have no human capital left. I look at some of the jobs that come through LinkedIn and I have have neither the desire nor really the capability. Imagine the job interview

“Yes Mr Ermine, tell me about how you tackled blah blah blah”

“Well, nine years ago I….”

Nope. Not gonna wash. Plus after a few years out of the workplace I dress like Dominic Cummings, so I am on a sticky wicket from the start. Or maybe not, I quite fancy being untouchable in the workplace. ¹

So why even consider it. Everybody wants you to be passionate about work, and I’m not.

Financially I am OK. I have a DB pension that pays my needs and wants, particularly at the moment when some of my wants can’t be had anyway. I have a couple of S&S ISAs which are probably about half the value backing my DB pension, and I don’t need to touch them. In less than 10 years I will draw a State pension. But –

A hard rain’s gonna fall

We have taken a massive economic shock, but on its own we could probably overcome it. The trouble is the background  – the Western Empire is falling, and this shock could accelerate the decline, because predators always prey on the weaknesses.

Most likely I will pass another couple of decades, cash in my chips and then the state of the world will be other people’s problem. But I have already had the experience once of blithely carrying on as if nothing will change while there’s fire burning underground, and then playing catch up to deal with the outbreak – getting out of the workplace in three years rather than a decade.

I need to also qualify what I am trying to fight, because some things are unfightable. I am at the coffee end of the spectrum. Social collapse, zombie apocalypse – wine is for that. If the answer is guns, beans and ammo, the question is wrong.

Let’s scope the enemy

Monevator is the cheerleader for never stopping work, and part of the problem is summarised in it takes a lot of money to replace a salary. But this is not relevant to me, after all, I am unlikely to get sacked from my pension, so in some ways my income is more secure than my salary was. The bar to getting it is to keep on breathing. Compared to the misery of mendacious metrics that’s a low bar 😉

But there’s an enemy in town. That enemy is inflation. It moves slowly, but irresistibly. My pension will keep up until it gets to 5%, and every year inflation overtops 5% I get poorer by the difference for the rest of my life.

Monevator has a depressing table of the value of capital in terms of income.

This is not quite so bad for me. For starters I began a few years back, so I have gotten myself a fair way down the chart already. While inflation will erode my pension it is unlikely to destroy it, unless we have a Germany situation. In which case nothing will help me, other than wine.

Inflation is good for people in work, as long as they stay in work. It’s even better for people who stay in work and take out big mortgages. One reason² my Dad paid off his mortgage on a blue collar wage earlier in his life than I did on a white collar wage and without kids was inflation – his wages rose in numerical terms quickly but the value of the debt was frozen in time at the nominal value when he took it out.

Inflation is bad for people on fixed incomes. There will be enough people going inflation – schminflation. The hazard is deflation. At the moment you can make the case:

Petrol at less than £1/l in May 2020 (diesel was £1.04). The short shutter speed on a sunny day meant it didn’t catch all of the information on the sign due to strobing.

Compared to this picture, taken over ten years ago

This photo was a year old in 2010

and in the short term that is probably true. But we have borrowed a shitload of money, and the easiest way of making that cost less is to devalue the currency. The pound in your pocket stays the same, you just get less Stuff for it.

Change offers opportunity as well as hazard

So what are the possibilities for me? I could look at the electronics/IT industry, there is a lot of aerospace around Bristol. Main pros here are the money. Cons are everything else:

• Employers
• performance management crap
• Commuting
• The Man
• I am out of date

Probably the biggest con is a serious mismatch – I don’t need to earn a huge amount, and my time is more valuable to me. I could see if part-time work were available, but the engineering industry, being male-dominated, despises part-timers.

I am more after a side hustle, but without the main job it’s a side to.

Big downside: hustle. I am neither entrepreneurial and nor do I hustle. I lose interest in people very quickly when I detect they are trying to network/sell something to me, and I could not do that convincingly to other people. It seems a very big part of the contracting/self-employed world, and I have been an employee all my working life. I despise hustle, and this may be a show-stopper. Also I am going to be in an environment full of people trying to hustle once the furlough scheme stops.

Passive income

Ah, remember the halcyon days of five or six years ago when every FIRE dude and their dog were after passive income? I actually have some from ten years ago, because I sold pictures and recordings to stock agencies. This seems to be reliable, it has been static for about ten years. I did a lot of that in the early fearful days of setting my exit plan, and it pays off. Unlike when I was writing for a content mill, which was, in all fairness, quite successful to the tune of thousands of pounds until it wasn’t, when Google deprecated their stuff and the business case went titsup overnight.

I could look at this again. I am less desperate and perhaps more creative now. There is some network effect, the more you do the more your other stuff sells.

A big disadvantage I have is that I don’t play computer games, which is what a lot of field recordings are used in. So I don’t really know my customer, what does well and what doesn’t is purely a matter of luck.

Other vaunted wheezes for passive income in the FIRE community were –

Matched betting . It’s too much like work to me, and bullshit work at that. Plus I have zero interest in sports.

Chuntering out Kindle ebooks. Sort of like writing for a content mill but a little more control. There was a fellow called Huw who was big on this a few years ago. I presume the business model went titsup, which I am grateful for as a Kindle reader, because there is a lot less shit to wade through on Amazon these days. Presumably Amazon deprecate the results of that sort of desperation.

Non-passive income.

I have made a slight name for myself in some electronics/recording areas by writing a couple of rants deconstructing why some sensors sound crap as typically misused. There is perhaps a product in there. The hazard with selling electronic products are

• lead-free solder- just hurt for hand soldering
• regulation – I’d have to wing it with CE marking
• it’s Stuff, and there’s a lot of hurt in selling Stuff
• The large country full of copycats who can work at scale for little that is China

Some of these are tractable, you can get things made cheaply now. The maker community has solved a lot of these problems. For instance I recently bought an AudioMoth to scout recording locations.Sure, I could have got the boards made and done the work myself, but CBA.

I could leverage that reputation, perhaps, and also it would save me having to answer some questions from wannabe makers that make me totally despair about the current state of training³ of electronics engineering courses. Some of the things being asked I knew before leaving primary school, FFS… But it’s Stuff. I don’t like selling Stuff, because some things about it don’t scale. Like going to the post office.

Oddball coronavirus opportunities

One thing that has happened is everybody is spending much more time online, and videoconferencing is a much bigger thing these days. I have occasionally helped some performers locally and shot some movie clips for them. I’m fiercely aware that this is an area where there are huge numbers of young media studies⁴ folk in prime competition.

And yet being in basic control of sound and vision seems ill-taught, along the general lines of “take that f*cking thing off auto, you muppet” as well as educating people that if your microphone is where your camera is then either your sound is shit or you subject will have the most enormous conk and teeth like a horse.

However, for every 100 muppets there are a few of these media studies people that are really good, particularly when it comes to NLE editing. I stopped working as a studio engineer at BBC TV Centre in the late 1980s, so vision mixing was still done in real time although shots were of course assembled in nonlinear time with VT⁵. Nowadays most of what was done in real time vision mixing is done in non-real time on computers with a NLE editor. There are great similarities between the old method of working and mixing/producing a live presentation with multiple sources. You can do all that on a computer, you don’t need hundreds of thousands of pounds of Grass Valley‘s finest hardware.

However, with the increase in the use of Zoom and live conferencing and presentation, there are opportunities for live vision mixing but with software. And I may have some relevant skills there, both from a background in videoconferencing, and also being able to  set up scenes and vision mix live. There’s nothing in there that a half-competent YouTuber won’t know, but many people only seem to know the boundaries of their phone…

Whether it will amount to ‘owt remains to be seen, after all I have to both add value and find people who will pay. But I was surprised that a couple of opportunities along those lines have opened up here.

many of us have learned new things about ourselves in the last couple of months

There are lots of problems, but some interesting possibilities. I don’t have to make enough to live on, and indeed I have just signed off being self-employed, so I wouldn’t expect to make more than the £1000 tax-free earnings allowance. It would kind of make me sore to pay 20% tax on the output of any such sideshow. I may hate it. And I will have no lifestyle benefit, though through this coronavirus lockdown I have discovered that while an introvert, I am not as much an island as I thought I had been. So perhaps helping other people do interesting shit will have some intangible value, even if I bank all the income against the troubled times to come.

There there is the question of whether such frivolity will hold in hyperinflation. After all, knowing how to make knives out of vehicle leaf springs, or use car batteries and scavenged solar panels off roofs to make light and comms work in a grid down situation are more relevant skills for that sort of world. But – red wine is for that scenario, you have to be 20-something to have a chance of making a good life in that sort of hazard.

So I don’t really know what I fear, other than financial capital draining through my fingers as the underlying assumptions of western capitalism begin to fail. There are too many of us, and we don’t create the amount of value that we consume, and somehow things that can’t go on for ever don’t.

But none of what I am looking at needs a huge investment of capital, so I may end up losing money I can afford, as well as some time and effort, in finding out I am still unsuited to working. And that’s OK. But it may turn out differently, and that’s OK too, and it may give me some resilience in the troubled world to come.

Even in this post I see that most of what I think about working is negative, and I need to overcome this, because otherwise I will hamstring anything I try to do. And the impetus is more a degree of fear than the deep search for meaning and purpose many seem to attach to working. Perhaps I will get over it. Perhaps the stock market is right and we will have a V-shaped snap-back recession.

Our beautiful blue skies are increasingly scarred by aircraft trails, supporting the snap-back theory

and this will be an oddball post that never went anywhere.  But at the moment – nah. The stock market⁶ is still bloody mad, and snap-back ain’t gonna happen. There’ll be hell to pay, and I can’t work out who is going to pay it.

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1. Correlation is not causation – Dom isn’t in charge because he doesn’t dress like a gigolo, he can dress like a slob because he’s in charge ↩
2. The other reason he got there quicker was absolutely terrible market timing in my part into the residential property asset class. Unlike buying shares, which is always elective, you get to the stage of wanting to buy a house roughly as a function of the date you were born. So while there was financial muppetry there, some was forced. Buying that house is still the #1 personal finance mistake in my life. ↩
3. In analogue electronics. Although it is a much, much smaller part of the electronics world now than when I started work, typically only where sensors meet the real world, sensors are finicky oddball elements which usually don’t tolerate sloppy analogue design well. ↩
4. Why on earth is meeja studies so popular? It strikes me as a serious misallocation of capital. There used to be money in it, like journalism, but the film and TV industries in the UK are a place for rich kids with decent connections and the ability to live in London while doing unpaid internships. And my second gripe is why do these courses chunter out people who can sort of control their equipment, kind of string a story but abjectly can’t handle people. I am an introvert and not great at it, but I was at least able to see that I had to get better at directing the talent in front of the camera to get better results. You can learn to get decent results from equipment in reasonably short order, but getting decent results out of people, now that is a lifelong learning curve ↩
5. Professional video tape recorders were shockingly expensive in the mid Eighties, and a bitch to maintain and keep lined up within spec. They were also mechanically noisy as hell, a dire chainsawing noise you had to keep well away from any open microphone. As a result in Television Centre VT was in the basement, where they have about 10 recorders servicing a 8-studio production centre. Nowadays you can run and record all the cameras and do all the mixing in post on a NLE, but then you could only really afford to record one signal, so you had to mix the cameras in real-time and record the output of the vision mixer. ↩
6. The stock market is absolutely freaking outrageous. I have just had a look at my ISAs and the total value is shamelessly more than it was in January. WTAF? There is absolutely no earthly reason, hundreds of thousands of firms will go bust, output is dramatically down and a lot of consumers will not just be skint, they will be destitute. Even the mid-cap index is in the bloody money. The only explanation that makes any sense to me is that the Great British Pound is worth a lot less now than it was in January. The gold price lends that some credence, £1150 on Jan 1 and £1400 now, so the £ has fallen 20% ↩

It’s a dirty job, Dom, but somebody’s gotta do it

This is a purely UK domestic rant about a special adviser to the Prime Minister who took it upon himself to drive halfway up the country in a car with not one but most likely two active carriers of coronavirus, and once he felt better, drive 30 miles to a local beauty spot with his wife and kids in the car to test if he could see OK to drive back to London 😉  The dog once ate my homework too, Dom.

For the record I’m actually grateful to Dom for apparently jumping to the fact that lockdown needed to happen, even if it turned out that in his view it only applied to the little people. His supposed boss was dithering, still in thrall to an Englishman’s right to go down the pub so they could potentially die like a dog in a ditch.

However, there’s taking the piss and there’s taking the piss, and charging up the M1 for a couple of hundred miles with two active carriers of the pestilence to visit his second home aged parents’ farm is taking the piss on a new level. So I shared this sentiment with my MP, James Heappey, who has never voted against the boss, because he’s a fellow on the make. But he ought to get the feeling that some of his flock think that Dom took the piss to excess:

Dear James Heappey,

My mother is living in [redacted, let’s just say she is also one of James’ flock].

I have not seen her since February, which is to protect her and the other residents against Covid-19. Because:lockdown. Something that does not appear to apply to Dominic Cummings, a SPAD who appears to be above the law, according to the Prime Minister’s mendacious address on the telly¹.

Can you kindly explain to me the reasons for the pusillanimous behaviour of the weak leader of your party in not sacking DC? Dominic Cummings not only decides that the lockdown rules didn’t apply to him, but that he was perfectly entitled to carry a notifiable disease 260 miles to a second home so he could have a more chilled experience, and then delivers a litany of self-serving entitled bullshit claiming he has done nothing wrong? I do not find his childcare a valid reason to break the law and expose another part of the country to carriers of the disease – he started out in London, the capital city of the UK where I am sure such services are to be had.

What will we do with our world when this is over?

As my ageing mother said a couple of weeks ago, up until this you have not lived through any crisis. This is a woman who was not yet into double digits before the second world war ended.

You never let a serious crisis go to waste. And what I mean by that it’s an opportunity to do things you think you could not do before.

Rahm Emanuel

Having switched off a fair part of the economy, it’s a fair chance to ask the question “If we started with a blank sheet of paper, I don’t know, say about May 1979, would we design to get to where we are now?”

if it was meself that was going to Letterfrack, faith, I wouldn’t start from here

apocryphal Irish joke

Let’s take a look at what we have got in the UK compared to what we had. Way back when a young Ermine entered university around that time, inflation was way up in the sky. By the time I graduated,  the economy went titsup in a big way, and it took six months to find a job. I plied my trade in a small company making electronic gizmos. Britain was a different place then.

When we wanted castings for a piece of equipment, we were able to go a couple of miles down the road to meet up with the suppliers, they could point to the part of the design that would reduce the yield, tell us why and we got to change that. The people who wound the transformers for us were in walking distance.

In my next job, I travelled by train from SE London to Cannon Street Station. No city, other than perhaps Edinburgh presents a pretty face to the railway line, but I saw light engineering firms here and there from the railway line, amongst the council estates and blocks of flats. As the decades passed, billboards went up ‘you could be home by now’ as the factories were cleared to make way for estates of ‘executive’ homes. Funny how every bugger buying a new house wants to feel they are an executive, I’d imagine a real FTSE100 CEO wouldn’t be seen dead in one of those rabbit hutches.

I inherited this pump made in east London from my Dad, we still use it when making compost to get enough pressure from our water butts to run a sprayer.

They used to make pumps in London – yes, Romford is in London, not Essex

As the entertaining wingnut David Starkey related, today’s Britain is buggered if it can make shaped bits of plastic in any quantity, for that is largely what PPE is. Sic transit gloria for the erstwhile workshop of the world. I’m sure Mr Carter would have something to say about that, once he’s stopped spinning in his grave on his sintered bearings, still serviceable after six decades or more.

Starkey is surprisingly dirigiste for a wingnut. Perhaps he hates globalisation and its inhabitants of nowhere even more than furriners. Maybe here is a way to make a success of Brexit, with hyper-localisation, though I thought we had given industrial policy up with Thatcher in favour of Ricardian advantage and the invisible hand of market forces. Too much of a good thing can be wonderful and all that.

Maybe there is a turning point here. We could draw in our horns and make more stuff, indeed balance the economy, though I don’t think that we will have employment enough for the horny-handed New Tories of the North. But hopefully we could make shaped plastic quicker… We used to have big companies that made the raw materials, with grand sounding names like Imperial Chemical Industries.

Britain decided to maximize the amount of money we could make, by specialising in finance, and tossed an awful lot of the population’s dreams and expectations¹ by the wayside. Now although I blame the borked state of the housing market squarely on Mrs T and her cursed Right to Buy sale of votes, clearly the world didn’t stay static over the intervening 40 years, so you can’t blame other pathologies of modern Britain on her. But it did set the direction of travel, a focus on the numbers and Ricardian advantage. Despite the bad rap she has for manufacturing, causal inspection of the share of GDP as manufacturing chart lower down shows that it was the Rt Hon Tony Blair who was in the wheelhouse when manufacturing got run out of town.

Our finest minds went into finance, and there’s some pretty damning critiques of the desperate lack of balance in the British economy from some of these. There’s the short form from ZXSpectrum on Monevator

The UK made a sort of Faustian bargain: low unemployment for high underemployment and low skill base. Taxpayers subsidize many corporates and SMEs, through low taxation and incentives, to provide rubbish jobs on low pay. These jobs should have been offshored to EM markets years ago. It’s unsustainable for UK workers to be paid 3-5x an EM worker for something where they offer no advantage. It’s also results in terrible productivity and low capex.

I’m clearly going to have to pay more tax after this crisis. I’d much prefer to pay people UBI so that they could stare at the ceiling, than see my tax used to subsidize Richard Branson, Mike Ashley or Phillip Green. Machine learning and AI is going to make many middle class people unemployed.

and the long form with knobs on from Tullet Prebon’s Tim Morgan

In the West, a small minority prospers, principally the CEOs of companies whose profits have surged, and bankers who gain from the expansion of the lending sector. On the other hand, the majority suffers, both because of declining wages and because of rising indebtedness.[…]

Our Tim ain’t feeling any more chipper about things now, here’s what he has to say about the much-vaunted V-shaped coronavirus recession that the markets are telling you do go buy into RIGHT NOW ‘cuz everything is up in the sky and going up. There’s an updated version of Tim’s growl H/T FI Warrior which makes the same sort of Limits To Growth angle. For the moment let’s set the LtG angle aside². After all, I was still in short trousers when the Club of Rome said we were doomed in thirty years, and I am now within spitting distance of The Firm’s normal retirement age, after two decades of extra play.

However, it is clear that since 1980 we in Britain have designed a world of work that is a seriously shit experience for a lot of people after 40 years of TINA. In particular we shifted the UK economy to services, and created an awful lot of crap low-paid bottom end jobs, and a lot of middle-class bullshit jobs. The poor on zero-hours contracts can point to what the problem is with their service jobs. They aren’t reliable, and they aren’t enough to pay the rent, never mind a good life.

Many in the middle-class find their bullshit jobs eat their souls, though they pay OK. One of the problems of bullshit jobs is that they are like Universal Credit for the middle class without the DWP torture, they still lower productivity. Bullshit jobs produce services/goods that nobody wants or needs.

We have maximised money, but not meaning, and muddle along with misery for the many

It’s all very well to clap for our carers, but we will learn what our values are if we collectively stick our hands in our pockets and pay the poor bastards a living wage, and perhaps bring back bursaries so they don’t carry student debt. In general this crisis is highlighting that an awful lot of people who keep the wheels running for us are paid the minimum wage if they are lucky, and don’t have a minimum guaranteed hours if they are unlucky.

And, when we get to stand back a little bit from it all, we discover that an awful lot of better paid middle-class jobs are a bizarre combination of make-work and perverse incentives. F’rinstance, several years ago, we took a look at how some funding organisation was setting up a community project. The first rule of funding is that you have to fund the consultants who happen to be funded by the funders somehow, that advise you on how to use the funding, then how to get next year’s funding, how to fill in the innumerable forms to get the right ticks in the boxes so the funders feel good about the funding.

Personally, I’d pull the plug on the lot, including the National Lottery and all its good causes. There’s a lot to be said for the Hippocratic oath when it comes to fiddling with the lives of the poor. First do no harm. Betting on the horses or greyhounds in the 1960s was more honest than ‘it could be you’ but pretty definitely won’t be. I have some recollection that there was regulation of that but it appeared that the Tote established by Churchill was sold off³ to Betfred in 2008. Ain’t privatisation such a great thing, eh? I’m sure Betfred maximises the amount of money not ripped off from the punters and feeds it back to the sports. Not.

On a more collective level we end up with the deeply borked twisted mess that the DWP has become. They start with a buggered up premise from the get go, which is that work is the way out of poverty. No. It used to be, when the economy had a wide range of jobs for a wide range of talents, and we needed hod-carriers as well doctors. That was forty years ago, guys.

That’s just not true any more, because: globalisation. There are many people in the UK whose skills aren’t up to adding enough value, because it is cheaper to go to somewhere where the cost of living is cheaper and hire that function there – or build a factory to make it there and import the product.

Now there are lovely jobs and lousy jobs, and whaddya know, there are a lot more lousy jobs than lovely jobs. This was spotted 17 years ago, it’s not new. You can’t make a lovely life out of lousy jobs.

That is why they don’t make pumps in London any more – they make money in London, and making pumps is just too low value-add compared with making money.

That isn’t to say we make nothing in Britain any more – the added value of manufacturing has been sort of retained, even as the share of GDP has dropped like a stone

Share of GDP added by the manufacturing sector as percent of GDP

Added value of manufacturing, bn USD, probably slightly declining over time given 30 years of inflation probably make 500bn 2020’s US$ worth less than 300bn US$ in 1990

So what, many might say. After all, my Dad was notably hard of hearing by my age due to working in a glass bottling plant, and he was stone deaf by the time he cashed in his chips.

People may wax lyrical about the mining community spirits but it was still a pretty ghastly tough job. There’s not that much great about a lot of manufacturing jobs, because wrangling Stuff tends to be physical, noisy and hard work. The younger ermine thought I would have to leave the electronics industry due to getting asthma. That first company was probably not COSHH-compliant. The problem turned out to be that we would wash circuit boards in boiling Arklone with the instruction never fall to the floor in that room, because the vapour is heavier than air. I never had trouble with asthma⁴ since leaving that first job after a year, though soldering was still part of the electronics industry, and fume extraction was not a thing until a few more years. As a design engineer and then research engineer I didn’t do enough soldering for that to be an issue.

Many manufacturing jobs were bad for you, but an awful lot of modern service jobs are shit in a different way. At least many of the problems in manufacturing were soluble with PPE and automation, whereas many service jobs seem to gravitate towards low-end minimum wage zero hour contracts that you can’t live or die on. The micromanagement and metrics of some middle-class jobs lead to chronic stress and the associated strokes/heart attacks.

In Britain Thatcher inaugurated the practice of buying votes by raising house prices. This was achieved by destroying social housing, giving bungs to people who were too poor to buy a house. Credit was expanded massively with banks going into the home lending market. In 1989 a young Ermine as a single man stupidly bought a house on 3.5 times earnings. Apparently you can still do that oop North, but according to the ONS your average English first time buyer earns⁵ 52k, saves one year’s earnings and spunks 237k on the house.

Over a couple of generations, that means a higher level of housing precarity, though house owners feel good about higher nominal values, and they increase inequality by favouring their own children with the loot when they die. Those not so blessed with ancestral wealth also take a hit from BTL landlords hoovering up starter homes, because homeowners are of the view that bricks and mortar = money tree. Present company excepted, that is…

One thing I have always thought would be a good way to eliminate a lot of what’s gone wrong with employment practices is to terminate all agencies and middlemen. If somebody pays you to pay someone else to do something then you are skimming, and should be run out of town. We did it to wholesalers of Stuff, let’s repeat the exercise to wholesalers of people. The Firm used to employ its cleaners directly. They saved money by outsourcing that, goodbye paid holiday and sick pay. Agency is a fancy name for gangmaster. Oddly enough digitalisation has greatly disintermediated buying and selling stuff, but has greatly intermediated employment with agencies and job-search platforms.

What could we do better?

We will have less Stuff. Probably fewer Services. It’s not all bad – you might get to see your kids more. Here are some things I would like to happen. I’m sticking with the UK here, we seem to want the world to get a larger place what with Brexit etc and I am nowhere near clever enough to fix anything wider, but I could probably match the current shower in charge of the UK in basic competence. Ain’tcha glad I’m not in charge. huh?

1) Destroy the low-cost leisure airline industry. Burn it, and encase the memory that it ever happened in glass and concrete, and bury it so deep nobody will ever find it for five thousand years.

Easyjet will resume domestic flights in mid June. There is absolutely no need for domestic flights in the UK ever. Britain is not that big – we aren’t Australia or the United States. I want to see EasyJet, Ryanair, the lot of them destroyed and the ground that low-cost airlines grew in salted and burned. If you have grandchildren, you don’t need low-cost airlines. Because: their world when they are your age.  Let’s quietly ignore the possibility that air travel got Europe into serious shit in March according to the ECDC. The original mistake wasn’t malicious – people weren’t to know then. However, after what happened, if you postulate air bridges – well, it pretty much sums up air travel all round. No externality is important enough to constrain the God Given right to cheap air travel. This is not about people starving like the Berlin Airlift, it’s about the right to fight for towels on a packed beach.

Zooming out, you will never electrify air travel. Sure, you might be able to do it technically in a couple of decades, but you have to plug the entire output of Sizewell B power station into a future electric 747 for an hour to achieve one long-haul flight. Even if you don’t give a shit about climate change or know for a fact it’s all a Deep State cabal, just how much nuclear waste to you want those grandchildren to have to deal with to keep up your flying habit? People used to have one annual family holiday to foreign parts. If we could make work less hateful, perhaps we might not need to run away from it so often. As for commuting by air…

Right, capt’n, where do I plug this sucker in? Photo Dave Croker, Geograph

I really hate the low cost airline industry. It fucks up our skies which is patently obvious now, it generates needless unholy rumble through most of the day and encroaching onto the nights, it ruins your kids’ future worlds,  it facilitates stag party twattishness, it makes places like Barcelona nd Amsterdam crap. It’s just gone too far. If coronavirus can kill it that is all to the good IMO. Less is more. It’s a proxy for the pathologies inherent in late stage capitalism. It just doesn’t know when to bloody well stop. More is not always better.

2) A four day week isn’t a bad idea, along the lines of making work less hateful

3) Do something about crap jobs. Automate the ones that aren’t worth doing, pay the ones that are worth doing a living wage.

4) String up anybody who even thinks “work is the way out of poverty”  – it hasn’t been for 40 years and it never will be. Talent that matches well paid work opportunities and luck are the route out of poverty, and neither are something you have overwhelming influence over. You can play a good hand well, but you can’t do anything with a weak hand, the opportunities just aren’t there. We have specialised too much.

5) Fix Universal Credit. Turn it into a universal basic income, or for all I care universal basic services. Or at least be honest and say we believe some people’s lives are worthless, we aren’t going to get involved, we don’t give a shit, and basically, kill ’em all. If we can pay Endemol to round up Iain Duncan Smith and have him live a month on UC that should be good for a laugh, too.

6) Destroy bullshit jobs. A Universal Income/Services would save the waste of human potential. And the trees. And reduce the pressure on the transport system.

6) Think about how we feel about poverty. If we collectively are chilled about it, there are enough dystopian way pointers on how to deal with it. If we aren’t, then finding some way of learning to live within our means will mean rationing of some things. Probably including air travel,  and probably including other popular lifestyle choices.

7) Reinstate previous generations’ controls on ownership and share of media⁶. There was an awful lot wrong with the media in the UK before Mrs T gave it to Murdoch, but I would suggest that while the cure eliminated the disease, the pathology metastasized into something worse. There was at least plurality in the previous disease.

Ain’tcha really glad I’m not in charge? Before I take too much heat for the air travel, note many people would have more time in an Ermine world, you can get to your Alpine skiing second, third, fourth holiday by Eurostar. I’m only coming for your second and up air travel holidays. We’ve probably got enough world for the air travel of the 1990s. But not the amount in 2020 BCV.

How about that Limits to Growth stuff?

It is possible that this second global financial crisis of the new Millennium is the result of systemic overreach as described by the Club of Rome. Let’s not beat about the bush here- the prognosis for FIRE is dire in this case. If you aren’t there you’re not getting there, and if you are there you may not stay there, and yes, that’s me too. The problem is an overhang of debt accumulated, this covered up the fact that global production hasn’t kept up with global population, and some of the limiting inputs to production are becoming exhausted. These are claims on future resources that will not be honoured because they just aren’t possible.

That narrative makes a lot of sense, but there are other stories playing out. For starters old men have been saying the world is going titsup ever since Roman times and probably before.

an alternative – Spenglerian decline

Secondly there is a power shift in play – the ascendancy of China and the East in general, which is a longer example of the cycles of the Imperial decline of the West. These were the European empires of Victorian times, of which the best know example was of course the British Empire, but I would also say that the American Empire is also into decline, the Project for a New American Century looks like a Spenglerian dream gone wrong.

Old men dreaming of past Imperial glories, back in the last century. Diddums. Now where have we heard that recently?

Trump and Brexit both express nostalgia for past exceptionalism, but this is not just a pathology of the Anglosphere, it’s writ across the Western world IMO.

Spengler’s – The Decline of the West was written a hundred years ago, and the narrative runs true to form, and it predates the Club of Rome by fifty years. Like Asimov in Foundation, Spengler did not predict a catastrophic fall, but a protracted decline. That’s pretty much what this looks like to me. Maybe the Chinese will fix air travel with small fusion nuclear reactors that won’t spew foul shit everywhere in the event of a crash. Maybe we will have five thousand years of darkness until the new Imperium rises. Hopefully humanity will have learned a thing or two across the interregnum.

We could make a better world, and for all I know this may be the impulse that makes us ask some tough questions about would we want to end up here if we started along the track that got us here. We could start with the question anybody contemplating FIRE asks themselves.

Is our current level and form of consumption the optimal way to live, or is there a better way to optimise our experience?

But I fear we will let the crisis go to waste. The desperate urge to get air travel going again is symbolic of the driving impulse for a snap back to how things were before. There’s all sorts of special interest pleading to get back to the status quo.

A lot of that is understandable – this has been a sudden stop for an awful lot of economic activity. But it isn’t unheard of for us to say ‘we want to see less of this sort of economic activity in future’, usually because it has undesirable outcomes, usually externalities, costs paid for by other people who often don’t get a say or a share of the economic advantages.

It won’t happen. The drive towards a snap back is strong, and the countervailing forces are weak and disorganised. Macchiavelli was right

“there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”

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1. The dreams include raising children, having jobs that you could plan a life on, being able to buy a house. The reason their dreams were tossed by the wayside is because they don’t have the aptitudes for high finance. That’s the problem with doing one thing overwhelmingly well, you tend to suck at other things. Specialisation is for insects ↩
2. If you want to see how Limits to Growth is going now, take a look at the thirty years on update. It ain’t looking good. ↩
3. Blair’s government should be charged with the original idea and doing all the groundwork for this, even though the next government actually pulled the trigger. New Labour was no friend of the statistically illiterate working classes, since t’was they who inaugurated the National Lottery to happen. ↩
4. Curiously enough the OSHA doesn’t cite getting asthma as a side effect of CFCs, they reckon it causes you heart problems. You can get away with anything in your 20’s, eh 😉 OTOH the datasheet seems to say respiratory problems were possible. ↩
5. I can’t work out if earns means individually or collectively, best not have kids in that house if collectively given what young children do for the household income, eh? ↩
6. Goldsmith’s College have a longer form report on UK media shares/ownership  ↩

I’ve got a sneaking admiration for Donald Trump

Go big or go home…and The Donald’s going big in opening up America, standing down the coronavirus taskforce in the next few weeks. It’s probably fair to say there’s not an awful lot of love lost ‘twixt the Gray Lady and The Donald. New York is full of, well, t’other side, and it’s just not Donald’s tribe, though it has been his old stamping ground for ages.

Trump administration officials are telling members and staff of the coronavirus task force that the White House plans to wind down the operation in coming weeks

NYT

It’s not unknown for a POTUS to claim a premature victory. We’ve seen this movie before

How did that work out for ya, Dubya?

but there’s a big difference. I felt that Dubya was a bit out of his depth. He probably believed his own hype. It’s all that inbreeding in the presidential families of America. Trump is an outsider. Sure, his dad was steenking rich, we’re not talking the poor kid from the wrong side of the tracks making it to POTUS version of the American Dream.

I’m of the view that Trump is one of a kind – a masterful dog-whistler. Not everybody is responsive to his particular schtick, and it brings an awful lot of people out in hives. But those to whom he does speak, he speaks directly, and they feel he speaks for them. And sure as hell nobody else has been speaking for them since the American Dream started to go down the toilet pretty much since Reagan took office.

The Mule’s childhood was one of alienation and torment. This motivated him to use his powers to get revenge on the Galaxy

He reminds me of the Mule in Asimov’s Foundation Trilogy, someone who almost directly controls people’s minds by making what he says resonate with their lived experience. After years where nobody sounds like they are listening to you that is magnetic – because all humans want to belong and for their pain to be witnessed. The Ermine has recently fired up the TV and paid the goons of TV licensing. I heard Trump on the TV news, and unlike hearing it through my PC on the Web, I heard him on my hi-fi.

The Donald needs to be re-elected

And while he doesn’t speak to me and I know he’s a lying sack of shit, I could hear the magnetism in the way he used his voice and understand the appeal. But the Donald comes with problems. Presumably he had attachment issues as a child, anyway he has a deep seated need to think that he is favoured, and it is really, really important to him to win the election.

Over in London they think coronavirus probably has a low mortality rate and the economy is suffering. Citing various posts from the intellectual right-wing website Unherd, some make a cogent case that Covid-19 isn’t such a big deal for most people. To their credit, Unherd supported their assertion with interviews with experts of similar views  – Hendrik Streek, and Johan Giesecke, and these make a lot of sense. it’s only when you look at Unherd’s content more widely that the focus of their particular lens shows clearly.

Their lens may be more accurate in some areas. I find a lot of resonance in Unherd’s interpretation that a lot of the problems in recent decades stem from a general anomie where by measuring everything in money we may have stripped our world of meaning and knowing what we stand for. I am not clever enough, nor privy to the information that shows whether the truth about coronavirus is closer to the Johan Giesecke end of the spectrum or Neil Ferguson’s. I am less convinced by Giesecke’s, not because I have a way of evaluating it, but from the people that are pushing it, who seem driven by the economics. But the low mortality rate we are all overreacting because what does it matter if this is infectious as hell if it doesn’t kill that many people is popular in London, and it is internally consistent. These are clever people making the case. Human societies do not put life first above all else everywhere – cars, pollution and many other things are examples of drawing a balance where some deaths are part of the price of achieving a greater good.

Mandy Rice-Davies might proffer that Londoners would say that. Londoners are young so at lower risk, on average. It’s unlikely to be a lot of fun being holed up in London micro-flats in a mini-heatwave.  Some are currently not doing a job that brings in squillions. Feeling more squillions disappearing down the plughole due to the shuttered economy must be stressful.

It’s less bad for a retiree in the sticks, where in a bike ride of several miles I encountered four cars once I got out of the town. I saw this

the white handkerchief is a Little Egret

avoided a serious gang fight

Why this field hasn’t degenerated into a swan war of all against all beats me

and wondered how this knot was done

Knotted Willow

While there’s some rumbling going on among the more swivel-eyed Tory contingent about opening up the economy – step forward Iain Duncan-Smith channeling FDR in the Torygraph

After six weeks of lockdown, we mustn’t lose sight of how vital a functioning economy is to our health and wellbeing. Perhaps we should remember President Roosevelt’s wise words in a time of crisis: “The only thing we have to fear is fear itself.”

Iain “I’m all right Jack” Duncan-Smith, who is of the blessed opinion that poor people have a previous monthly salary paid in arrears that they can draw on before they get Universal Credit, writing in the Torygraph 5 May 2020

the trouble is that they are all chickenhawks. What the world needs to straighten out the difference between these courses of action is someone sure of their convictions and with balls of steel and pure conviction. Enter our man of the moment, Donald Trump.

Here’s a guy who knows what he wants, and knows how he’s going to get it. There are two competing ends of the theory spectrum about coronavirus, and sadly we have insufficient data to make a clear call which is right.

One, the London/Unherd view is that it’s not a biggie, most of us have already had it, closing the economy kills people too y’know. The other is that this is so infectious it will let rip as soon as its given a chance, mortality is not low enough that it won’t kill many. The UK already seems to have the highest European death toll, which points me in the latter direction, but whatever.

What we need is strong leadership, somebody who goes with his gut to cleave the Gordian knot in the face of uncertainty. Now strong leadership tends to have rather undesirable consequences of people marching in shiny jackboots and smashing windows in the night, so what we need is strong leadership somewhere else. And in the US of A they’ve got it. They voted for it once, and they’re gonna vote for it again.

Donald’s really keen on getting re-elected. He’s already flung so much Federal Reserve money at the stock market that it no longer reflects reality, even Warren Buffett can’t see where he’s going, the screen is covered with so much money.

But that’s not enough. Donald needs boots on the ground. He’s not going to let a little thing like a global pandemic get in his his way of being re-elected. Not only is he going to ReOpen America, he’s going to damn well Make America Great Again. And for that he needs Americans back at work. lickety-split.  No, not that interpretation of the phrase, though I guess this is Trump…

Now obviously there’s a chance that people might die if the low mortality  view is less congruent with reality than the higher mortality view. But that’s not important to Donald. Strong leaders decide, others take the consequences. Trump 2020 is what matters, so the great engine of American exceptionalism needs to get fired up. As Warren Buffett said,

never bet against America.

Warren’s ADF indicator may be titsup because of the Fed’s wall of money, but Donald Trump knows exactly where he’s going, what he wants and how he’s going to get it. And he’s going to put the pedal to the metal. Real Men accept collateral damage.

Warren scratches head. Which way is up on this damn thing? Trump leans over, smashes glass, sets the needle. That way is up, buddy.

Cheese-eating surrender monkeys and the rest of the world can stick it, lily-livered quislings that they are. But they can hitch a ride on the Trump.

VUSA is your friend. Or pretty much any S&P500 fund or ETF. Never bet against America, because Donald will MAGA. I’m tempted. I am light America. I loathe everything Trump stands for. But perhaps our Londoners are right, and coronavirus isn’t all that. A punt may at least make me feel better when Donald wins again in November. Like Asimov’s Mule, he doesn’t need to make everybody like him – all he needs to do is keep the people who do like him doing his bidding.

This is your captain Warren speaking – it’s going be a long night. Three out of four engines are on fire, the fourth is running rough

I sparked up Warren Buffett’s Berkshire Hathaway livestream, well, the recorded version anyhow. H/T Monevator. Some Ermine tips – start about an hour in, and I had to click n the unmute audio to get to hear anything. It was a funny old feeling. Warren’s sitting more or less on his tod in a massive convention hall with hardly anybody out there. It’s all very 1950’s, there’s no top end in the audio and you can hear the 60-cycle hum and noise in the amplifiers. BRK clearly doesn’t spend money on young media-savvy hipsters to tart up the presentation slides either. This is part of his homey schtick of course, but you’re sitting there watching one of the richest people in the world.

He cut a lonely figure on the podium. And while I wouldn’t go quite as far as to say he sounded scared, the headline sums up what I heard. Sure, you can count on the tailwind of American exceptionalism, but you gotta live that long to get into the upswing. And at 89, in some ways it’s in doubt that he will.

He spent a lot of time describing how if you’d been unlucky enough to buy into the DJIA before the Depression, you would have to be ready to fall back and fall back and fall back to hope that the engines of American exceptionalism would fire again into the low-water mark, and it would be 1951 before you break even. He’s not saying this will happen again, many things are genuinely different now. The intercession is likely to be much shorter, and of course he was quick to state he does not know what the markets will do tomorrow or next year.

But he didn’t give the impression he sees a V shaped recovery. He didn’t even see BRK shares as a good buy now. And he’s dumped airline stocks. I wonder what else?

In some ways I was cheered by Warren Buffett. I dumped a lot of rubbish in the first half of March. In a single hit on mainly one day. I had gotten decadent with the long bull market, and had a significant holding of the FTSE100 in VUKE. ZXSpectrum summarised it well on this Monevator thread

The high street was obsolete anyway, airlines should go bust, the petroleum industry needs massive downsizing. The FTSE is not coming back because it full of crap companies with obsolete business models. The S&P and Nasdaq are not.

I’m also more relaxed about higher unemployment. The UK made a sort of Faustian bargain: low unemployment for high underemployment and low skill base.

[…]

Machine learning and AI is going to make many middle class people unemployed. We might start getting used to it now and stop stigmatizing those who don’t have jobs. A generation or two from now being unemployed might well be the norm.

I was heavily in the FTSE100, and I was buying rubbish because the yield was decent. My main ISA¹ is 13% down on what it was in January, so I showed a clean pair of heels in time. I got rid of a lot of other rubbish, because in a decadent bull run shit looks attractive and safe. It wasn’t.

And WB reminded me of that. I had lost my way, and was buying trash. Quality is worth having now. If you are going to buy, buy quality. WB doesn’t forget that, but I did.

Warren’s patriotic American exceptionalism shtick got on my tits. America is captained by a uniquely talented buffoon of the first order, who is a danger to the world and his own subjects. Trump reminds me of The Mule in Isaac Asimov’s Foundation trilogy. Just as Asimov’s psychohistorians foresaw the arc of history but failed to model a mutant intellect, the founding fathers of the United States got an awful lot right. They put checks and balances to try and control the temptations that absolute power brings. But they had no model for Trump’ particular talents resonating against a particular slice of history. There is at least cheer to be had in that like the Mule his particular combinations talents seem sui generis; we will get at least another four years of him, but the magnetic combination will probably die with him. So no, Warren, Americans do a lot right, but not so much as you’re cheering. However, in economics ZX48’s observation support WB’s thesis – compared to the US indices ours are full of crap businesses, and the US appears the only place in town for quality.

But Warren Buffett is a much better investor than me and his point is right. I need to favour quality – companies supplying what people actually want and need. I did well getting rid of the rubbish before it had fallen too far. I am intrigued the WB finds nothing at attractive valuations, because he credits the Federal Reserve with forestalling another credit crunch for companies. He thoroughly approves of the action, compared to the results of inaction, but it has corrupted the signals given by the market because of its indiscriminate behaviour. Noise floods the input, but he prefers that to the deathly silence of no noise and no signal.

And yet if Warren Buffett is saying that the compass spins and knows no North, then perhaps I have not missed the opportunity. My guess is the signals will start to return at the start of November, as we start to enter what is likely to be a long winter low in reserve capacity.

And while it’s all different now are the most dangerous four words in investing. I need to start to challenge some assumptions I have held from 2008. One is I have always been weak on the US – it looked overvalued and as I started to buy a lot of my holdings in the 2008-2014 period. Most of my US holdings are in the half of VWRL, and yes, I was wrong earlier. Don’t bet against America 😉 My market timing scored over sector selection.

In the early stages just after the GFC when I have bought individual shares, I thought more like WB. I still have nearly all those shares, mostly in my HYP. But as an index investor you can’t think like that, because you’re not buying individual shares. And I started chasing meta-parameters like yield, and following stories. The best story is Lars Kroijer, but sadly I picked up that signal late, it was only written in 2015. I still have all my VWRL.

I have been fortunate in being able to shoot the other index crap early enough, but I need to get back to basics. Good quality at the right price – and also perhaps take another line from WB. It is better to buy a great company at an okay price than an OK company at a great price. In index investing that means no FTSE100, not VHYL (which I have never owned) and perhaps I need to suck it up and consider the S&P500, and maybe the CNDX on the NASDAQ100, preferably after Trump has either won or lost and the new administration suckout goes on top of the pandemic recession. In the meantime I will continue to buy little bits of smallcaps which will become more and more bombed out. I am where I want to be with about 2/3 equity exposure now, because I have serious firepower. Buffett gave me the hope that I will have somewhere to aim that in the year(s) to come…

No, Buffett’s message wasn’t quite Bill Ackman’s self-serving Hell is Coming interview, I am glad I sold before he opened his bloody great big gob 😉 But it sure as hell rhymed.

Capt’n Buffett will make it across the water on the one defective engine, but it’s going to be a very long and rough ride to get from here to there. And he seems to believe that there is an outside chance that Dubya’s angle from 10 years ago is a very real possibility, leastways in the time he has left.

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1. My secondary one with Charles Stanley doesn’t revalue in Jan. It isn’t underwater on purchase, but is mainly a DevWrldExUK index fund LGITI, so similarish to VWRL and also about 13% off Jan from its chart ↩

Musings on misadventure and market madness

I was listening to a young fellow on the radio who delivered himself of the observation that in lockdown the days are long but the weeks are short, and thought to myself there is wisdom in this 24 year old fellow.

It reminded me of Gretchen Rubin’s similar observation, that I watched on my office PC in my last month at work. If only I had seen that in the low-water mark early in 2011, half-way through my dispiriting passage out of the workplace. The half-way point in any long term goal is always tough, for you have committed enough resources to preclude other courses of action. And yet the final destination is not yet in sight. Rubin’s narration is cheesy as hell, as pretty much anything that involves parents talking about children is. But it is fluent. Part of our problem now is that we don’t know how long it will go on for. These days are long, and make for rumination. Such as

Did I err in jumping out of the market?

I jumped out of a lot of stuff in the second week of March. To put it into perspective I still have two-thirds of my holdings in my Iweb ISA. All my VWRL, all my HYP from way back. But I did make tactical errors in continuing to buy a little bit in 2019 despite the high valuations, although a lot of what I did buy was bonds and gold. But I bought some more VUKE in 2019. Bad move.

I sold all my VUKE, and other stuff I didn’t love. I have a Google spreadsheet of those sales, and it updates the current market values with the Googlefinance option. Those sales are still well worth having made, but the notional reduced losses have fallen by two thirds, because I did not account for the wall of money that was created and thrown into the system. This is not a crisis of confidence. It is an exogenous shock to the system. So far that has been rugby-tackled to the ground, in the view of the stock market, by a wall of money. Jolly good for the market, and us as asset holders. It’s a little bit shit for everyone else, though, no?

The hazard has changed from losses to inflation IMO

I am badly exposed to inflation in the long term, because half my income is an annuity, albeit with some inflation protection, but only up to 5% p.a. Any time inflation goes above that, I get permanently poorer for the rest of my life in terms of income.

Now to get this into perspective, there’s only a need for the tiniest of violins. There is some awesomely bad shit going down. Deaths are up, running about twice average for the time of year. As for the living, many people have lost 100% of their income, and there are some poor bastards who are sleeping on the mean streets of London because they used to work in restaurants and live in lodgings. Now they have no job, no money and no home. Half of the world’s workers’ jobs are under threat. The UK seems to be making a particular bugger’s muddle of handling coronavirus.

The John Hopkins tracker currently shows the UK has roughly 10% of the world’s Covid-19 deaths, which is a little bit crap for a country with 0.87% of the world’s population. Let’s hope that the good folk in London who are of the opinion that most people in the city have been exposed but were asymptomatic are right, because if this is what success looks like I hate to think what the face of failure is. At the moment if you’re a confirmed case¹ you have the same chance of pushing up daisies as playing Russian roulette. Let’s look on the bright side. You’re likely to join Graham Greene on the side of the living. But the odds aren’t terriffic. Enter a hospital in the UK and they put two bullets in the chamber before spinning it. You really don’t want to see Arnie  in your hallucinatory dreams in the ICU, do you?