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Money v Making Stuff-Should Britain bid farewell to the golden egg of banking.
Jeremy Bosk
Posted: 13 years ago
#71

Joined: 09/06/2010(UTC)
Posts: 1,316

We are not the only people asking these questions:

Human Capital
How what you know shapes your life You or your institution have access to this content

WEB
PDF – 5.93Mb

Brian Keeley

Publication Date :
20 Feb 2007
Pages :
150
ISBN :
9789264048669 (HTML) ; 9789264107014 (EPUB) ; 9789264029095 (PDF) ; 9789264029088 (print)
DOI :
10.1787/9789264029095-en


This first book in the new OECD Insights Series examines the increasing economic and social importance of human capital - our education, skills, competencies, and knowledge. As economies in developed countries shift away from manufacturing, economic success for individuals and national economies is increasingly reliant on the quality of human capital. Raising human capital has emerged as a key policy priority, particularly for low-skilled individuals, who are at risk of being left even further behind.

Policy in this area is focusing on early childhood development, improving quality and choice in schooling, creating excellence in tertiary education, and widening access to adult learning. Drawing on the research and analysis of the OECD, this dynamic new book uses straightforward language to explain how countries across the OECD area are responding to the challenge of raising their levels of human capital. This book includes Statlinks, URLs linking statistical tables and graphs in the text of the book to Excel spreadsheets showing the underlying data.
http://www.oecd-ilibrary...apital_9789264029095-en

engineertony
Posted: 13 years ago
#72

Joined: 24/05/2011(UTC)
Posts: 71

Jeremy,

My thoughts were a bit disjointed, I think they still are.......
I seem out of step but I'm happier that way.

I was having a go at debt as a means of living, not in any way decrying having a car. Permanently paying a portion of one's income to bankers, credit card companies, is like living on less income than we earn and giving it away to the moneylenders. That's all.
I was pointing out to Prof Eman that because these people employ staff as he pointed out, it doesn't matter because they contribute nothing to our standard of living in terms of material possessions and general well being.

Not too sure about 50% of our GDP coming from finance, sounds like another con trick to me. If we are persuading people overseas into paying us interest, or insurance premiums, or commission on share trading, or pension funds, or commodity trading in far away places at a profit then it's their loss and our gain, but it's not real wealth, we are just moving some of their money into our pockets with a legal conjuring trick.

Goods and services is a very wide definition. And who is measuring GDP, the office of statistics?
If it raises our standard of living / brings us more happiness/ better standard of health care, then it is positive and can be counted towards our GDP. If it brings money in from overseas, even though it's borderline criminal, it can be counted towards our GDP. Robbing our own people, moving money from my account to some crooked bank manager cannot be counted towards the GDP no matter how subtly it is done. Flooding our homes with thousands of electronic gadgets that we throw away in less than 12 months, employing hundreds of people on landfil sites to bury all this junk to pollute the ground and water supplies with cadmium, lithium, lead, mercury, wierd paint and refrigerant chemicals, & non-rotting plastics cannot be counted towards our GDP.
engineertony
Posted: 13 years ago
#73

Joined: 24/05/2011(UTC)
Posts: 71

Jeremy,

Didn't see your last post, I'll check it tomorrow.
I think we have to move to a wider audience, I've been checking on citywire to see what other similar threads there are.
There's just the three of us trying to sort out the British economy!

I'm on a few engineering sites where I try to help other engineers with their technical problems,
and stationary engine even though I'm an electrical engineer I have a big mechanical workshop,
lathe milling machine etc, so I like to chat about old engines. Just sold an old single cylinder Lister engine,
about 4 feet high weighing quarter of a ton, just 5HP, made sometime in the 1940s.

Forgot to sympathise about your neighbourhood, sounds grim. We will get lucky on the stocks soon,
there's always a cycle, I'm following ARM, missed it at around 200p so a bit timid now.
Still on life support
Posted: 13 years ago
#74

Joined: 27/09/2010(UTC)
Posts: 52

EngineerTony

I am dismayed that you cannot see the huge contribution to our wealth and development that is brought by having a functioning banking system.

You talk of a a corrupt bank manager taking a slice of your money, but by taking a loan you are effectively "renting" his banks money for a period, you would therefore expect to pay for this.

At the heart, a bank provides essential access to capital for individuals and companies to allow them to invest or spend as needed. Without this money, an individual may never be able to buy a house (reducing demand for housebuilders) or a car (likewise), a company may not be able to build a new more efficient factory or undertake the r&d required to develop the next new widget.

The two sources of capital available to a business are both risky and a bank is needed to mitigate and parcel those risks to effectively match the two sides of the deal. Whether its borrowing in the bond markets, or selling a share of future profit in equities, without a degree of certainty investors and lenders (in many cases individuals such as you and I) would require a far greater return, thereby reducing the efficiency of the process to the company involved. These transactions may require many hundreds of hours from thousands of experienced individuals and so of course there will be a cost involved.

I take pride in the fact that I support British and overseas businesses through share and bond ownership in my pension and savings. This support provides companies the resources needed to grow and generate revenue and contribute to our growing economy.
Anonymous Post
Posted: 13 years ago
#75
Anonymous 1 needed this 'Off the Record'

Engineertony and Still on life support
You are both right.
Engineertony is referring to bad services, and you Still on Life Support are referring to good, and in the case of exportable services excellent services.
Engineertony do not get downhearted, some of your insights are amazing.
I want to develop further one of them.
your 80%/20% model at #69
If there was just one service person in the whole of UK, he would have 20% of the cake available to himself. If there are 10% services in UK then they have 20% of 90% available to themselves i.e. .2x.9=.18(18%) of the cake, at 20% services they have .2 of .8=.16(16%), at 30% they have .2x.7=.14(14%), at 40%- .12(12%) available, at 50%- .1(10%) available... until at 100% there is 0 available.
This is the problem, as services grow they have less and less/service person available to themselves, and so they need new ways of making money.
Enter bad/rotten service to increase the 20% take.
Examples are- toxic loans/mortgages, toxic derivatives, junk bonds, Endowment Policies, PPI, and now even virtual money as recently reported on in Citywire.
So we send out an SOS, and the services lobby understand it as Service Our Saviour, reason Comparative Advantage.
The problem with services is that at 50% they have reached and breached their limit .
Further services growth cannot go on.

Prof Eman

Commentsplease
Still on life support
Posted: 13 years ago
#76

Joined: 27/09/2010(UTC)
Posts: 52

Prof

Disagree with your definition of bad/rotten services;

Toxic Loans/Mortgages - Loans are loans, they only become an expense when the borrower can no longer pay back. In the case of sub-prime loans in the US, the underlying mortgages are currently performing in line with expectations, defaults at just under 10%, recovery rates at 40-60%, therefore on a portfolio of these mortgages, losses are approx 50% of 10%, or 5% overall. Most packages of these loans have cleared through the markets, those that have not are rolling towards maturity to be paid off.

Toxic Derivatives - Derivatives are an essential risk management tool, used by farmers, manufacturers, exporters, insurers etc. They become a challenge when the other side of the transaction ceases to trade. Example - the outstanding derivatives contracts issued by Lehman Brothers and AIG cleared through the market at an average of 90p in the pound.

Junk Bonds - a nice term for loans to companies that are perceived to be higher risk borrowers. In most cases, loans are paid in full, the UK default rate for loans of this kind is less than 5% over the last 15 years

Endowments - dont know much about them

PPI - very useful insurance, helped me to pay my mortgage for 9 months when i was made redundant 2 years ago, problem is not the product but the sales process that was associated

The concept of good and bad services is too black and white, as it is for maunfacturing. All business activity has an associated cost, the economic principle is to understand the benefit vs the cost. In terms of society, the importance should be placed on adequate consumer protection to protect the buyer of certain goods and services that may not have the required information at point of sale.
Anonymous Post
Posted: 13 years ago
#77
Anonymous 1 needed this 'Off the Record'

Still on Life support
I note that you disagree my definition of bad/rotten services, but not with the fundamental concept of services too big.

Prof Eman
Patrick Moylan
Posted: 13 years ago
#78

Joined: 17/08/2007(UTC)
Posts: 2

If only Britain could pontificate its way out of its economic malaise. Enough hot air and puffed up comments here to solve our energy crisis.
Quite simply we need to invest in skills and training in science and technology. Period. Put all our efforts into it. Educate the politicians into realising it. Get elected - don't just talk about what is wrong - start to put it right.
Still on life support
Posted: 13 years ago
#79

Joined: 27/09/2010(UTC)
Posts: 52

Size is irrelevant Prof, having a large service sector and very little else hasn't harmed Switzerland much.
Anonymous Post
Posted: 13 years ago
#80
Anonymous 1 needed this 'Off the Record'

Still on Life Support
If anything Switzerland is the exception rather than the rule.
What about Germany and China, as opposed to Greece and the other PIGS?

Prof Eman

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