Tag: niall ferguson

Dr Doom predicts Perfect Storm in 2013, maybe opportunity knocks

Well, he would, wouldn’t he, after all you don’t pick up the moniker Dr Doom for nothing. 2013 is when the SHTF according to Nouriel Roubini, as private debt that got transformed into sovereign debt falls out of the sky to give us all a sore head. He’s pretty definite on that 2013 date, pointing to a synchronised slowdown across all world economies. He also predicts a Chinese credit crunch as they end up sucking up some of the Fed’s largesse. I’m probably with him on that, I don’t do China even though everybody else does because I can’t understand it, their demographics stink, even in my lifetime and I’ve already taken the indirect fallout from one property bubble, thanks, I see no reason to repeat the experience by choice.

http://plus.cnbc.com/rssvideosearch/action/player/id/3000031848/code/cnbcplayershare

For a different take on this we have Niall Ferguson on Consuelo Mack in March. Basically he says after 500 years of giving everybody else the shaft we are going to take it. I paraphrase him a tad, but he say we have got lazy, we don’t work hard enough and all those chaps stage right in China, Taiwan and Hong Kong work far harder. He’s sort of like Oswald Spengler but with a more beguiling presentation. We’ve also become lazy at school and university because we were scared to tell the dimwitted that they were, er, dumb because it might impair their self-esteem.

Me, I say one swallow doesn’t make a summer Dr Doom. You did get it right in 2007. I’m probably more bearish in the medium term than you are, mate. I agree that the second dip is on its way – we kicked all the crap into the air first time.

I’m going to buy into that sucker. Starting tomorrow with a small spread of £1k. I’ve never bought into a crash before, though I have bought on the way out in April 2009. It’s almost undoubtedly too early, but I have to learn how to tackle the uncertainty and the fear. these are firms that have been on my watchlist for a while, and one has a remarkable NAV discount, the other has a yield and a track record of steady dividend growth even through the last recession, indeed both continued to improve divi through the recession.

Over the last year I’ve become better at being fearful when others were greedy, which is why I have a fair amount of cash available in my ISA, as I’ve held off buying of late. I am going to study the previous recession/first dip, and some of the basic technical indicators, to try and modulate my future  purchases with the market. This is the anathema of index investing, it’s a naked attempt at market timing. I figure Mr Market is going to be mightily pissed off over the next year or so. Hopefully he’ll be offering some bargains. The time will come to smell the fear as the western word dices with depression, and become greedy but with mindfulness.

On this first £1k I’m bound to lose money in the coming months, but I have to break new ground and learn to overcome the fear if I am going to take advantage of opportunities to come. At the moment all the newsflow is full of Dr Doom like prognostications, a torrent of money flowing away from the stock market. A small ermine stands at the side, and needs to gauge how to slip into the raging stream and swim against the tide…

I can be more sanguine about taking on this crash, because I’ve seen success from taking on the market in 2009, and also because of diversification. Owning my house,  and having non-financial assets explicitly to hedge against a financial depression means the stock market is only a part of my net worth. It isn’t necessarily going to stop me being hammered in it – it is easy to screw up. It wouldn’t be the end of the world, I’ve been there before in the dot-com bust. Market crashes are a great opportunity to get more for your cash – the tragedy is that all around the feedback is that this is all trash and you want to be getting out. Been there, done that at the turn of the century. Let’s try it the other way this time.

 

Civilisation – The West and the Rest, Protestant Work Ethic Redux

Earlier this year here at the Ermine’s Nest we pondered whether there was a case to be made for saving £140 odd by outing the TV. That may seem obscure to non-UK viewers, but in the UK there is a thing called a TV licence that you are meant to have if you watch TV as it is broadcast. This largely pays for the BBC, whose programmes don’t have commercial advertising.

Anyway, we decided that we would see if we could find something that pleased us enough to justify the £140, so I occasionally look for stuff that may interest me.  The recent Panorama Finished at Fifty was one of these, and I had recorded Niall Ferguson’s Civilization -The West and the Rest. This was presumably a TV series of the book

Watching this was rewarding and I learned a few bits and pieces I hadn’t known before. Niall comes across as a dapper and personable enough chap, and according to this review in the Grauniad he targeted this series at teenagers.  Which explained why he had this infuriating catchline where he comes across as “Dad trying to be down with the yoof-speak and with it”, by endlessly referring to the six “killer apps” of Western Civilisation. I know he titled his book civilization but I just can’t bring myself to spell it that way, I have enough unwitting typos without adding deliberate ones 😉

Anyhow, that killer apps yoof-speak got on my nerves, because nothing made by the Apple corporation has darkened my door because I don’t have money to burn, and I am a crabby old git who has nothing to do with media and so I don’t refer to apps and folders on a computer but directories and programs. When I see job ads for appers rather than programmers I’ll rethink that.

Despite the killer app-speak, Niall was informative and reasonably to the point, though his perspective is a lot more upbeat about the advantages of the European empires than I am used to. Some people will hate it for that alone. He did at least tip his hat to Mahatma Gandhi’s delightful one-liner on what he thought about Western Civilisation, something to the effect of “yes, that would be a good thing”.

One takeaway I got from the series, particularly in the last program, was the effect of  the Protestant work ethic on the success of the West in economic terms. I’ve spent my fair share on here slagging off the Protestant work ethic, but Niall did make me think that perhaps I should be more nuanced about it.

When I was in America, it did strike me that there were an awful lot of churches about, both in New England and in California (I haven’t been anywhere else in the US, other than NJ, NV, MI, CO and AZ so it may be very different elsewhere). The sheer density of churches was remarkable. Niall made the case that this has something to  do with the dynamism of the US economy compared to those of Western Europe, a part of the West he considers in relative decline vis a vis the US, as it became largely secular after the Second World War.

It puzzled me because the presentation of Christianity in the US came across to me as extremely in-your-face, of a type which I believe is called evangelical. The last time I had significant dealings with Christianity was in the 1970s, and this sort of thing wasn’t around then.

In Niall’s program they showed some clips of what went on in US churches, and what strikes me is that the entire message seems to be mediated through the emotional centres, with rah-rah sessions of  ‘Can you FEEL the power of the Lord’ together with the raising of arms and clapping. The sort of thinking and reflection that I had observed in Christians in the Old World, albeit three decades ago just wasn’t there.

That sort of thing makes me uneasy – somewhere at the back of my mind I feel that if the Good Lord is worth believing in, He wouldn’t demand that His adherents check their brains in at the door. Each to their own, but I could see how this might lead to people being persuaded to defer gratification for other goals. And a lot of economic success seems to be about deferred gratification, so Niall makes the case that Protestant Christianity was a large part of the economic success of the West. In his final program he makes the case that as this fades, so the power of the West will also fade, particularly as it appears that Christianity is on the rise in China.

Now this is a TV program, and though Niall is bright he isn’t infallible. For instance he perpetrated a howler in saying Edison was associated with AC power in the US – he opposed it intensely in the war of the currents due to patent considerations.

I have no way of verifying a lot of what he claimed. I would agree with him that there is a decadence and a lack of people taking responsibility for the consequences of their actions in the West nowadays. There is a general infantilisation of public discourse, where we all too often resort to “the Government should” or “They should” fix one of the current malaises, often the result of earlier aberrant behaviour. For instance the years 2000-2007 where we all believed house prices would go up forever so it was worth lending NINJA‘s money in the knowledge the rising house price would enable them to pay off the loan?

It is also possible that the increasing secularisation means that one common source of a moral compass is lost, and this is why we are regressing and becoming decadent. It isn’t the only explanation, and humanists among others would object to the concept that only religion can provide a moral frame of reference. An alternative explanation would be that life has got materially easier, so we can get away with more lax behaviour. Or I might just be getting older and it’s all really okay as it is, despite the financial crises and the disappearing jobs that the POTUS noted a while back 😉

So all in all I can probably get my £140 worth, over the year. This programme was not on the BBC, so it was infested with ads. However, my Humax Foxsat PVR seems to be programmed well inasmuch as two taps of the >> button skips the whole ad break, so I am not troubled by companies trying to push consumerism on me. I  win much of the simple living/frugality battle by busting as much advertising and junk out of my sight as I can .

This also helps me in the fight against my power bill as it has a standby power usage of < 1W. Obviously that’s still more than if I got rid of the whole TV receiving system, however it is very low, so I can live with the £2 it costs me in power a year, as it spends most of its time in standby.