Why is the stock market going up in first half of 2011?

If you think of the stock market as a measure of future expectations, why is it rising when we are continually hearing terrible news in the media? From Greek debt default to "Great Recession", stories of our collective failures mount and yet, the stock market heads ever upwards from its low in March 2009.

List of terrible news which should send markets down

1. USA have hit their debt ceiling - they have run out of money unless congress extends this ceiling by 2 August 2011

2. Manufacturing jobs have left the West and yet politicians are looking for an increase in exports to the East to create our recovery - this will take a very long time, if it happens at all...just as a reminder the UK has borrowed money to finance everything it built since 1981

3. Eurozone is struggling to deal with the periphery countries which have borrowed too much (mainly from French, German and to a lesser extent UK banks).

4. China has embarked on a policy of lax credit rules to aid the economy during the 2008 crisis. This has meant their banks hold a large proportion of loans which are probably never going to be paid back.

5. There is a race to the bottom for power currencies like the £ and $ as both countries struggle to be competitive against other countries.

6. Every job created since 2000 has been lost from 2008 - 2011 but the US has 30m more people since 2000 who need jobs too. Unemployment keeps rising, and why shouldn't it? We've got no more graduate jobs for lots of marketing/film studies grads with no work ethic and all the low paid jobs have gone to immigrants who work harder and longer for less benefits and salaries. If you look at inflation vs salaries we get paid less to do graduate jobs today than we did 25 years ago.

7. Arab uprisings increasing  oil prices. Oil of course is an input to everything we use, eat or transport.

The main reasons for this inexorable rise seem to be:

1. Cheap money from the Federal Reserve

Effectively, banks borrow money at next to nothing from the Federal Reserve discount window at the moment and invest this money into more risky assets e.g commodities and equities. From the banks point of view keeping the cash would have a negative return due to high inflation and lending the cash to small/medium businesses is just too risky at the moment. Ironically, the reason the government has to issue so much debt is because it had to bail out the banks - the bankers always win! Moral hazard anyone? It doesn't matter that this "hot money" increases the prices of our food and oil - as long as the bankers can afford it I don't think they care.

2. QE from various countries

Quantitative Easing is just another name for creating money out of thin air. Governments do this by creating money they use to buy their own government debt from banks.

 Every month the large banks offer bids to buy government debt so they can sell it on to investors at a small profit. Since 2008 the government has been the main buyer of its own debt - this makes easy profit for the banks. They just buy the debt from the government and then add a profit margin and sell it straight back to the government. In exchange for its own debt, the government gives banks the money it just created to lend out into the economy. Unfortunately, banks are so worried about their own futures that they are using this money to improve their own balance sheets in case of further loan losses and impending rule changes called Basel III which makes them hold more cash in order to continue business. Just to remind you - the US government now owns more of its own debt than any other investor! That's right, it has bailed out so much of the banking sector that it created and bought back more of its own debt in the last 3 years than all the debt it ever owed to other investors in the history of America!

Conclusion

So the governments of the world are engineering a false high in the stock market in an effort to keep the system going. They think they can act like a starter motor to the combustion engine of the world economy. Unfortunately this "free money" handed to the wealthy investor community simply increases the price of our goods and services due to an increase in general inflation. Its important to remember that after the Great Depression it took around three years (1929 until 1932) before the markets collapsed completely. History doesn't repeat it self in the same way...but it often rhymes!

Regardless of the false stock market I believe we in the West are in for a tough time for years. Our quality of life is about to get significantly worse. If you think about how quickly the world changed from 1970 to now (two car families, mobile phones, cheap holidays abroad, internet) it stands to reason that are world can equally change for the worse in the next 30 years. Of course there is a big difference between our living standards and those of the majority of the world who live on less than $2 a day. This inequality needs to even itself out over time and there's going to be upheavals as that happens over generations.

Interesting resources

www.zerohedge.com
www.shadowstats.com
www.armstrongeconomics.com


PS - If you think about it, now would be the best time to bring in a new head of the IMF who has no economic background (a lawyer) so the bankers can run circles around her and use economic blackmail to do what every they want. Seems rather strange that Dominic Straus-Kahn's charges have simply disappeared yet his job has changed hands. I hope the sane people in government can think past their election campaigns and tell the voting public the truth.

Should we invest in Gold and Canadian and Australian currency now?

follow the moving capital?

With debt mountains growing in Europe and the US it seems precarious to place any capital in bonds or the volatile stock markets. 


I am a subscriber to Martin Armstrong’s theory of capital movement and cyclical asset bubble creation. By increasing interest rates it makes sense that capital will inflow into any country to take advantage of the return over and above risk-free rates. With global banking, money moves easily from one side of the world to the other. Why would increasing rates slow your “fake” investment economy down? It may slow down your real economy based on goods but then the West has had a decreasing share in this type of trade for decades and Services (especially financial services) have taken over our previous industrial economy.

Importantly, capital moves to where it can achieve the highest return for the least risk. If you think about money flowing around the world moving in the path of least resistance it makes sense that it would choose to move closer to areas of easy growth over time. Look at Japan, lower the rates and money will flow out of your economy and come to higher returns in the US, or other parts of Asia thus prolonging your stagflation. Japan is far more of an export led economy that the US or the UK, if lowering rates didn’t work for them why would it work for the service industry centric western economy?

As the velocity of this cash movement increases to this area of higher rates, asset bubbles are created and this in turn changes the risk reward profile of the investment and the “smart money” realises that the risk is too high. Again, the capital starts to ooze out of investments first slowly and then with an increasing rate to find the next easy slice of lower risk investment. The typically slow moving retail investors who are slow to enter the engorged market and equally slow to leave are the losers in this great tide. Getting in to the game too late and staying much longer than the architects of the asset bubble. It’s well known that these cycles of investment exist but unfortunately the investment secrecy serves to enrich the few at the expense of the many who can’t invest enough time to back test this as they’re probably too busy doing something useful for our economy like creating and distributing food. Banks and global asset managers take advantage of this and facilitate amazing levels of conceited and self interested activities in order to enable the wealthy to continue their status in society performing the most socially derisory task – making money from money. 

So what’s the recommendation? Move your money to the Australian or Canadian dollar for a 15-18 month time frame and you should avoid the currency destruction that’s about to occur in US and the UK. Just doing this should give you a healthy return.

In a longer time frame attempt to invest in physical gold rather than gold ETFs or stocks as the likelihood is that there isn’t as much gold as people think there is and when the chips fall down it’s the physical gold holders who are actually going to get their hands on the stuff rather than the paper holders. Martin Armstrong believes that gold has a long way to go due to the forced destruction of the western currencies to deflate their debt away.

So in short, Australian and Canadian currency will continue to appreciate due to their governments increasing interest rates and gold will continue to go upwards because of the weak currency stance of the US and the UK. Lets see if I’m right in Dec 2012. If you read this then post a comment and let me know.

Deterioration of politics due to voter apathy and media self interest

The irony of the latest internal notes released from Ed Balls by the Daily Telegraph is that they speak more about retaining power and personal grievances than actually helping the people of Britain. Policy statements are only mentioned with a view to gain power, or to convince the public of their desire to “do good”. Committees are set up to look at policies with a view to winning the election. Politicians have overridden the desire to serve their community by the need to win at all costs. They will say anything; do anything, and side with anyone to win. This is as much to do with the media and people’s changing attitudes as it is to do with politicians almost psychopathic winning agendas.

The media’s “conversations” with the public have seriously undermined our ability to focus on difficult long term objectives. We can no longer allow plans to span many election years as people want to see results now not in 5, 10 or 15 years. We see this expectation rise from our entertainment screens, we can no longer wait to watch serialised programming; and we must see the winner of talent competitions after immediate phone ins. The Chinese government has a march on modern democracy because of this need for immediate gratification. They have envisioned plans for the long term, and although they are not always fair or representative to everyone, they realise that they give everyone a better future in the long run. You can argue that democratic policies are never fair to everyone after the debate is over someone almost always loses. But crucially, the Chinese don’t waste time ensuring they are “Richard & Judy” friendly instead of actually solving the problem i.e. the nation’s energy crisis! I think Brown finds the “spin” and “media pandering” pointless as well but unfortunately when the media provide such a disfigured sense of what it is to be successful (looks and vapid one-liners at PMQs) he could never compete. It’s absolutely crazy that we would need to change our political leaders because the media have become “bored” with the current Government. If this thinking continues we will constantly have strife and failures in an effort to make news. How sad for the millions that will die or be impoverished because we want to be excited by what we watch on TV. I think Blair knew the power of media, and hated it. He used it for his own advantage as long as he could but understood the real requirement to execute change plans quickly before the media was “bored” and needed to move on (not for the people but for their own self interests). In his autobiography he notes that he was much better at being prime minister in his last term but ironically that was when the press forced him out over Iraq and “Presidential leadership”.

It is naïve to expect every working class family to aspire to better things in only one generation. It takes time and energy to understand, conceive and execute change within even one family. Even then, there is bell curve of distribution between those who listen and understand quickly and those that will never agree to change. Niche ideas take decades to become populist even when there is immediate gratification, for instance, cars, cell phones and electrified homes. Selling an agenda to the public based on values which may benefit them in the future, whilst knowing that the salesmen might not execute, or worse still not even be in power after they have won the debate almost seems like a waste of energy. Most human beings don’t seem to form their views of policy based on intellectual debate, they base them on how they will be affected in the short term. Politicians play on this innate short term view. This is why they can kick the hard decisions down the road e.g. pension reform (we definitely don’t have enough money to pay for promised pensions); decay in family and community ties; increased immigration due to lack of work ethic amongst indigenous people; our aging population and consequent health costs; and the European integration problem.

So whose fault is it? It’s ours, collectively as a democracy. Unfortunately, we give in to our base desires for instant rewards. The media and the politicians give us exactly what we want – conflict to titillate us; style over substance; arguments which attribute only blame with no valuable conclusion; and a failure to identify the themes which affect us all in the longer term. Scientifically, endorphins are released in our brains and we have satiated a small need whilst sacrificing our longer term aspirations and requirements. We reward our media (with increased sales) and our politicians for not solving problems but for looking good or communicating in a light, funny manner. They are a reflection of what we want.

Sadly, if this continues I can see this ending badly with the continued decline of the West’s influence in the real problems affecting the world or a war which aligns people’s values and concentrates them on the greater good thus enabling a new generation of leaders to get on with solving our problems rather than fixing their hair.

How to Jailbreak your iphone for non-geeks

There are lots of guides out there to jailbreak your phone but they are all found on technical websites and needlessly complicated. Here's a simple step by step guide to jailbreaking your iphone.

1. Backup your device by syncing with itunes that way you can always go back to your current phone in case something goes wrong.

2. Download the latest version of the iphone firmware that can be jailbroken. Currently this is iOS version 5.1.1. Just click "check for updates" on your iphone page in itunes. Then read below to locate the file once it is downloaded. If you've already downloaded and installed the iOS update then just use the information below to locate the file. It has the file extension ".ipsw"

IPSW location in Mac OS X

For Mac OS X, the location of your IPSW files may vary slightly depending on the iOS device in question, but they will be located in your home directory:

~/Library/iTunes/

Once you are inside this folder, look for the device you are using to lead you to that devices IPSW download, for example an iPhone would store it’s iOS updates here:

~/Library/iTunes/iPhone Software Updates

Older versions of Mac OS X may store the data here: ~/Library/Application Support/iTunes/ in some variation of of iPod or iPhone firmware.

IPSW location in Windows

The exact location of IPSW files depends on the Windows version, username, and the iOS hardware you are using. For example here is the location for user ‘username’ with an iPhone:

• Windows XP: \Documents and Settings\username\Application Data\Apple Computer\iTunes\iPhone Software Updates
• Windows Vista & Windows 7: \Users\username\AppData\Roaming\Apple Computer\iTunes\iPhone Software Updates

If you are a Windows 7 user looking for an iPod touch IPSW it would be located at:

C:/Users/username/AppData/Roaming/Apple Computer/iTunes/iPod Software Updates

3.  Now download the jailbreak software here

4. Double click this file and follow the instructions. When it asks you to, navigate to the directory where your IPSW file is located (as shown above) and then follow the directions.

How to download films, DVD, CDs and music for free at high speeds

Free content

For some reason people use torrents which are generally very slow, difficult to use and requires additional software. More importantly, people don't understand how to use encryption so there is a chance that you can be identified easily. What I'm about to tell you should allow you to download any software, any music, any book, any tv show and any film. No, its not a scam its offered as a service by every ISP as part of their contract to provide the internet to consumers.

Newsgroups explained

 What are newsgroups you might ask? Well, when the internet was first created there were more elements than just the world wide web you use today. There was something called a newsgroup which are like blackberry messenger (BBM), or like forums on the world wide web (www) today. People would discuss topics or seek help for technology issues. It was ugly and text based with no pictures. Needless to say the web took over. But not before it was included in the charter for ever single ISP in the world, that's right every single internet service provider must give you the option to view and download from newsgroups.

People discovered that replacing their forums with ASCII characters that are made up of bits and bytes ( i.e what you and I call films and music) was easy to do. At first it was smaller software, but now you can get full blu-ray postings of entire copies of films, TV shows, DVDs or full albums to download.

Accessing newsgroups

If you're not technical then access can we via the world wide web. Just go to a website like Easynews. They provide a simple google like interface where you search for your chosen film or music and it just pops up for you to download. Bear in mind you will be downloading this at your full internet connection speed rather than crawling along with bit torrent. A TV episode takes about five minutes to download and a film will take about 10 minutes. To enable this easy view easynews charge you a monthly fee between $5 and $15 - not a lot but if you don't have a credit card then impossible. Although I think they let you pay via paypal and other payment types.

If you want to get this stuff completely for free you're going to have to read up like a techie. Download a program called NewsShark and a free copy of WinRAR and read newshark's instructions on connecting to newsgroups. If you do a search for your ISP with the word newsgroups and nntp I'm sure it won't take long to find the settings. If you're non technical I highly recommend the easynews option above.

How to get a graduate job in London, UK

Now what?

Its tough right now for new graduates fresh out of university but here is a simple guide to getting to an interview stage for a large company.

1. First, use your friends and family to ask if they can refer you directly to the HR dept or a team that needs grads. This will always be the best route to gaining an interview no matter what anyone says.

2. Get to know recruitment consultants in the city and go and meet them. Just type "financial recruitment", "IT recruitment" or "consulting recruitment" (or whatever you're into e.g retail/fashion) into Google or join linkedin and search for headhunter or recuitment.

NOTE: If you're shy and retiring then you're going to have to learn to be a bit more out going. Don't just send them your CV and hope, go and speak to them. Suggest meeting them over a coffee and talk to them about what you want to do and who they feel is recruiting right now. They want to know if you're capable of having a grown up conversation in English, so have one! Discuss your CV and prior experience, what type of role you would want and BE enthusiastic. - Remember they don't want to put people forward that are completely incapable, it will reflect badly on them.

3. Remember your CV gets you an interview that its its main purpose. People need to get a feel for who you are in a few sentences. No one has time to read through your life story! Keep it clear and simple with any minimal formatting, and no colours. Microsoft Word offers some simple templates automatically when you click "new document".

Start by summarising your experience, qualifications and education in 4 or 5 bullets at the top. Then list your education and experience in chronological order starting with the most recent experiences. Finally, at the bottom include your name, address and contact details.

4. Include your general ability to use technology and which Microsoft or specialist software you are comfortable with and if you can program (even just trying VBA in Excel) add it in.

5. Ask your parents or siblings to read through your CV to look for errors and formatting issues and also ask them how it reads and what it says about you. Update accordingly.

6. You have the option to participate in the "milkround". This is the name for the various corporate institutions' HR departments attracting students to apply via their website. BE WARNED if you do not have a good academic record these applications will not make it through the automated systems most large employers use.

7. Educational record isn't everything - if you feel you've got "street smarts" and just don't perform in exams you will need to get to these jobs in a different way. Its even more important to talk to recruiters and family and friends. Often working on a temporary basis at a large company in a midlands/North location will put you in contact with consultants or external staff where you can show your skills and be referred into an organisation which will allow you to move to London.

8. Work experience is a definite bonus and I would suggest to recruiters that you are happy to gain some work experience at a large institution. It may not be paid, but you'll get to know people and applying for a job at that firm will come with a referral (if you perform well!). Don't do unpaid internships forever (i.e longer than 9 months) unless you want to work for NGOs or charities (or you're very wealthy!)

9. Milkround forms - Be prepared to answer tedious questions which have no relation to the work you will be doing. These questions are simply comprehension exercises that require you to do some research (internet, news and company intranet) and write a short punchy summary answer. Its best to try and write a longer answer and then adapt it to fit into the word count limit specified.

10. Cover letters - if required, these are again a chance to highlight some research you've performed on the company along with your change to show off your ability to write English prose. Most of the cover letters I've read are vacuous identical drivel so I'm not sure how anyone uses this as a gauge of ability except for spelling and grammatical mistakes. MAKE SURE YOU DO NOT HAVE SPELLING MISTAKES ON APPLICATIONS, COVER LETTERS OR CV's! A paragraph on you, another one on the firm, what excites you about its work and what makes you right for the role and finally a summary of the reason you're applying.

10. Take a look at The Times Top 100 employers to see who you'd like to work for and which industry you think fits with you best. Unless you're going into a profession e.g legal, medicine, army -  most jobs revolve around communicating ideas, time management for task completion and IT work.

Thats it - hope that gives you some ideas of how to begin looking for a job and getting to an interview stage. I'll write another article dealing with interviews at a later stage. Good Luck!

The Lack of effort...

So, it seems that our lives are full of information these days. It takes a quick Google search and then sifting through a few links to find out pretty much anything. I've found useful information about varied topics (some of which I post on this site)  from how to fix my radiator to which jobs I should apply for? Its the age of information and its never been easier to "find the answer". So - if its that easy then why are there so many people who seem to move through life unable to find the answer to the simplest little things. There seems to be a complete lack of drive to find the solution to a problem. I live in a nation that previously conquered the waves, built bridges, invented TV (arguably)  and steam engines. I assume we had drive and determination that probably put other nations to shame. In my opinion there seem to be several reasons why this country has begun to languish and only remember past greatness.

Schooling

We seem to be taught to do little tasks which increase in incremental amounts of complexity and finally culminate in an exam. The lack of critical thinking or solving real world problems is ridiculous. Children absorb information at a stunning rate and yet our schooling methods simply give them worries about how much they can cram before sitting an exam. We all know that most of the facts which we learn at school end up giving us a bit of dinner party conversation and general knowledge. The idea of school was to teach you about learning itself. To give you a thirst for "finding the answer", as well as how to structure an argument and validate conclusions (and appreciation for art, dance etc.). Sadly, we've given that up to give a larger number of children basic facts which have simple right or wrong answers.Why? Because its easy for adults to punish and reward in this system. Much harder to actually mark against problem solving ability or through tried and tested failures before ultimate success. After all, its the failures that teach you the most in life. Company directors complain that graduates aren't ready for work - that's because most middle class graduates haven't experienced anything like creative problem solving or results based rewards. As that generation grows up games manufacturers have even cottoned on to this. "Brain training" games which give us a tiny reward for the completion of a tiny thought as opposed to deep thoughts or puzzles that take time and energy to think through. Also, education certainly didn't prepare me for office politics and purposeful misdirection but that's the next topic.

Office jobs

I'm often struck by the lack of drive at work. As a graduate I started a "good" job dealing with small tasks as efficiently as I could. When I came up against an obstacle I'd feel annoyed with myself when I couldn't overcome it before asking for help. Although there were clearly other people like this, the prevailing attitude was to ask for help and when a problem couldn't be solved instantaneously, to give up and wait for instructions. Slowly, the kids who had that spark and drive are beaten down by the lack of support for new ideas and the general insistence to keep the status quo by those around them. Now I'm all for chain of command but large corporates are effectively turning their employees into drones who simply nod along to instructions. Without seeing your ideas flourish, or battling to improve, you're left with a group of people who simply move paper around from 9 to 7 (or later) before they go home. Sure, we review paperwork and draw PowerPoint slides but ask yourself how much this actually teaches you? Does it give you a sense of satisfaction? How many of you in a large firm have charged for your time and achieved very little? In our brave new world we simply want time to go by and enterprising people at the top of your firm are happy to profit for it. The alternative value-added model should be charging for real results not "forecast benefits realisation" but actual results. If you can improve a company's profits then charge your costs + 5% profit and redeem your results based rewards,  say 15% on top, after 6-12 months when you show the improvements. That would keep people honest and stop the merry go round of consultants arriving with PowerPoint presentations as their main achievement. Revenue sharing & risk/reward payments based on "balanced score card" results do exist but they are not the norm and consulting companies discourage their use because its riskier to make a profit.

Large companies want drones, and to make sure they get them they reward that drone-like behaviour. Do your "box ticking" job; fulfill your hours target; make your sales target; fill out your deficiencies report; write out some slides; or finish your PowerPoint slide at midnight after re-writing the same sentence a thousand times. In an ideal world you should be given a "box ticking" job in order to make it automated and move to the next inefficient process to re-engineer on a regular basis. Those nuanced jobs requiring specialisation would exist but there would be far fewer because of the drive to commoditise. But we don't do that because vested interests wouldn't be able to make their return and management couldn't charge outrageous rates. What would all the middle class do for work if our office based work became more efficient through IT?

We also seem to have created a collaborative culture bordering on insanity. Sure, work is about team work and using the ideas and skills of those around you to improve your ability to solve a problem but our corporate jobs have fulfilled the middle class desire to chat your way through the day without actually moving a task forward. Those who are masters of this art climb the political management tree and continue to simply re-iterate other people's ideas or have sufficient eloquence to convince others of a particular direction. We've turned into a nation of reviewers and box tickers for tax and regulatory rules that we've made up for ourselves - that's why we don't have an export led economy! I'm sure the balance of payments between the UK and the rest of the world is set to get steadily worse for some time to come. We charge for services to fulfill our own tax, legal and accounting rules (making them more complex to give the middle class work). But we now have to pay more for the necessities of existence i.e oil, power, food because we don't have anything else of importance to trade with in return.

Or, if you're a junior banker you spend your life writing slides that have very little impact on any decision making. If people decide to buy or sell a company they make that decision based on experience and the counsel of a few trusted individuals. No one has time to read through a mound of pointless CAGR graphs and obvious risks observations showing forecasts and models which have little chance of emulating real life in the long term. It doesn't stop them pretending to have read and understood it all but that's part of the problem when our job roles expect no failure. A lot of "due diligence" is done to give some evidence that the decision made has some pseudo scientific backing. Just look at the evidence - no merger has ever been regarded as successful. Its just a type of strategy that enables expansion faster than organic growth - which generally means bigger rewards for management. 

It seems fairly obvious that these activities or styles of working occur on a regular basis and yet no one draws attention to it because there is a collective emperors new clothes element to our lives which no one talks about.

The middle class system

The system seems to be as follows. Do well in exams ( and a bit of extra curricular activity) go to university, get an office based job, get married, have kids and then give them the ability to do the same. Some people who take a chance stray out of this path and are very successful, others fall flat on their face. But most don't risk it. They get a mortgage which ties them to debt and a life of servitude. At no point in education do we actively encourage people to think freely, test out new ideas, or help them through repeated failures. Why? Because the elite don't really want lots of them to succeed. The reason for this is simple. There is a class above who are perfectly happy with the status quo, their family got there first and they are happy with not working but simply enjoying their life after the labours of their forefathers. An enviable position but not one that the majority can enjoy. Some of them become politicians or industrialists but most are content to be anonymous.  You always need a pyramid scheme to make this work. In my view, most organisational structures humans seem to make are a type of pyramid scheme that lasts greater than one generation. As long as it does that then no one cares that it is unsustainable in the long term. A few people at the top always benefit from a majority at the bottom. Equality is not really something that most powerful human beings actually strive for. I'm not saying you can't be successful e.g creating something that society requires and profiting from it. I'm just saying that its much harder than it should be and generally requires helping someone who is wealthy to get wealthier. Vested interests will always want the middle class to fulfil the role of the tax paying people who observe the letter of the law and  are given jobs that involve box ticking or fulfilling a "role". Its not all bad, in exchange for this Faustian pact you get fed, some leisure time and the ability to raise a family. But we lose our ability to explore different ideas or try and fail as those our "risky" activities. For someone to achieve an idea or success they generally have to create something completely new with a small team who have similar goals or they profit from connections they have and pay workers to create something new. Why can't we actually do this as a collective where we benefit everyone? Why does it have to be outside the social norm to achieve and execute new and exciting ideas?

The lack of trust for employees

Has anyone wondered why we seemingly pay £1500 and upwards a day for a consultant to do a simple job that staff could do? Sure, there are obviously the usual implications of higher tax and long term pension liabilities associated with employees over consultants but really it all boils down to trust. 

Senior management at larger companies just don't trust their employees to problem solve. In my view, you should create a "consultant pool" in any large company. Those people who are bored with repetitive tasks in their job role or want to earn some more money (to complete project based work with fixed deadlines) should move into these pools when they want to. Its fairly obvious that people have different priorities at various times in their career. For instance, as a new graduate you're capable of burning the midnight oil for a while whereas as a new father you have other commitments. At different times we need different things so why don't we realise that and actually cater for it? The reason seems to be politics. We employ consultants so we can blame them when ideas don't work or blame them when we "down size" to absolve ourselves of the responsibility of decision making. "We did it because the advisors said so" is the typical line you'll hear from the RBS board on the take over of ABN Amro or when a large scale project fails. Its easier to use external ideas and them blame an external party than have a falling out with your own management team who are harder to sack and also create political consequences in your organisation.

Government organisations do this often - they spend tax payers money to bring in external consultants for work that they should really be doing themselves but since the majority work for a set time (9-5) rather than to produce results, consultants are the easy option. I should stress that not everyone is like this but there becomes a herd mentality and those bright young graduates who want to change things are slowly beaten into conforming to this model. Why? 

Debt

We've become mired in debt. We've all read about it but how does that create our lack of effort? Well we as a nation have begun to expect our services based on debt. We used our previous good grace (our credit rating) and borrowed to its limit to facilitate municipal spending that had no longer term benefits. This created our box ticking culture. We spent our money trying to give our nation education and jobs and future prospects but ended up just trying to spend our way out of problems. Thatcher told the unions to change the sense of entitlement but we just created another middle class sense of entitlement. Even now, when you look at what our government is chastised about its lack of spending and cuts not the lack of new sustainable long term ideas (although we've heard some murmurings about growth plans recently). Spending does not equal success or growth!

We have spent our way into giving people what they want without understanding what they should do in return e.g completing/creating work that is socially beneficial enhancing our quality of life. Instead we created more rules, laws and taxes and therefore more estate agents, administrators, lawyers, accountants, bankers and consultants. We killed our design ideas building nothing and teaching people nothing of the future requirements our society will need. 

It seems pretty obvious really. For more people to exist in our society we need more power, more food, more housing and the ability to give people jobs which make something that the world finds useful at a reasonable cost. We either specialise or we generalise but it has to be something that we design and build (yes, a bit of banking, accountancy and law but its become about deals and speculation to benefit the short term few rather than long term benefit for the many). Debt has made it a bit too easy to fulfil desire and consequently, without the idea of hardship and overcoming obstacles our society feels its entitled to basics which are actually luxuries and this has led them to a lack of effort and no desire to "find the answer". Obviously when you realise you have to pay it all back people baulk but for the last 25 years we have created nothing of long term value, nothing that justifies the growth in income and spending levels we've seen. Debt is a system that has its benefits, it enables society to focus capital injections on products and services required to expand our society and increase standards of living e.g railways, roads, buildings. But we have subverted it to pay for our day-to-day shopping or leisure time. Activities which will not generate enough return to pay back the debt. Here's a question I find interesting. For years we didn't borrow as much, we balanced our books by spending our North Sea oil revenues. Whilst Norway  has a large sovereign wealth fund and an enviable social welfare system to show for it (albeit with higher taxes) we have a social welfare on steroids and massive debt. How did we spend our money?

Real wage value

The wages of the average employee are actually falling. There are more middle class workers out there than ever before and we need to work longer and harder with two incomes to provide what used to be achievable on one income. We created a raft of graduates with a smaller ability to generate ideas and then gave them jobs with higher than average earnings. Most of the earnings we give them come from debt i.e government pays private company for a service; or government gives loans/subsidies to firms enabling private companies to churn through power point or legal contracts and pay their employees. Most people just don't understand this or realise it. They should tell you in school - every year your wage goes down about 4% on average. You need a pay rise of 4% just to afford the same things you can the previous year! If you're going to spend the majority of your income purchasing something that has a high rate of inflation (housing for instance) then you need an even greater pay rise just to afford the status quo.

We seem to have distracted the vast majority of people with popular culture and leisure pursuits (afforded by debt rather than sustainable growth). So, why are people content with this? Its like any dictatorship - keep your people fed, their minds occupied with TV and having babies and you will always be in power. Most people want a comfortable life that that is an achievement for them. So we pay more people less money to do their "box ticking" jobs compared to older generations so again there is no benefit to "finding an answer" for the vast majority it is a daily slog governed by tenure served. Unfortunately the more people we have that use resources and don't produce something for future generations the more unsustainable the world of "Work" becomes.

Comments welcome.