14 Apr 2013, 11:01pm
living intentionally rant:
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  • Why is everything Apple so easy and so hard at the same time?

    Note this post is a random musing of an ermine poking an inquisitive snout into a wrinkle of the world that interested him. Nothing made by Apple can ever be described as frugal, there’s no personal finance angle and it’s definitely not simple living ;)

    The Ermine has avoided everything to do with Apple in life so far. I didn’t own any Apple hardware, don’t own AAPL stock, never understood the fandom. It all started badly when I began work at The Firm – everyone in the office used the little squiffy mac classic/plus computers to write reports, and there was an Apple Laserwriter laser printer.

    A Mac classic. Nasty little things, where the obvious way to shut theb uggers down is - wait for it- drag the floppy disk into the trash icon. Obvious, innit. Stupid human for thinking this neans "Computer - erase all my shit, NOW."

    Mac classic

    Much was made of the intuitive nature of the Mac, compared to the arcane command line of the PC. I didn’t find it intuitive at all. F’rinstance how d’you turn one of these off? The obvious way to shut the bugger down is – wait for it- drag the floppy disk into the trash icon. Obvious, innit? Stupid human for thinking this means “Computer – erase all my shit, NOW.”

    Unfortunately at that time you couldn’t do anything useful with a Mac as an engineer, y’know, like run circuit simulation software or the like. I had a great big 286 PC that could do this. I was able, via the Appletalk network and a shockingly expensive PC Appletalk card, to copy the output of a SPICE circuit simulation file to the office LaserWriter. I shouldn’t be too hard on Apple about the cost, this was in the late 1980s, where Novell Netware ran a piece of software on their servers for the sole purpose of counting up the number of connected network cards and kicking people off if there were more simultanous users than there were network connection licenses. Cheeky blighters. TCP/IP and the Internet came along just in time to save us from this sort of rent-seeking usury, Apple at least just collected their rent from the high cost of the network cards. However, Apple never allowed me to me print that document, because if I wasn’t in the Apple ecosystem I was Unworthy to touch their printer. I was able to get the file onto the printer, but without some sort of fork file to attach the file to something to make it do something I was stuffed.

    Every so often one of these macs would have a hissy fit and the EHT would start to flash over. We’d take it into the lab and pull it apart. We were electronics engineers, don’t try this at home. You could usually get it going again by pulling off the anode cap 1 and getting some isopropyl alcohol and cleaning round it. It was then that I was exposed to my first experience of fanboidom. Everyone crowded round to observe the most vainglorious piece of narcissistic codswallop I have seen in any piece of gear. Apple thought they were so Really Great they inscribed the signatures of the design team in the plastic moulding of the inside of the case, and everyone cooed about how marvellous this was. It was all I could do not to chunder in the wastepaper bin.

    I ended up with a deep dislike for everything Apple ever since :) When I buy a piece of equipment I own the damn thing, not the manufacturer, and this seems to be a simple fact that the Apple corporation doesn’t get. What else does a printer expect to do when it receives a PostScript file other than print it, FFS? HP got this, but Apple specifically made their printers slightly nonstandard so they would only work with Apple kit. When you buy a piece of Apple hardware, you get to check in your balls with Apple. You do it their way, or you feel the squeeze…

    So how do people use smartphone screens then?

    Fast forward 25 years, I have no smartphone. It was a struggle for me to imagine how people use any sort of website on a poxy little two inch wide screen, and in portrait mode. And I needed to understand this, else I would be authoring stuff that would really hack my users off, and in the end the user is always right, even if they’re mad as a bag of spanners. So the Ermine was in the market for an iPod touch, which does most of the things a smartphone does, but using wifi, so without tying me into a phone contract and feel the squeeze of a different corporation on my parts – the Ownership of my bank account via a mobile phone contract for the next three years.

    Now I have to say that the experience of unboxing the device, sparking it up and connecting to my wifi network was the best ever user experience of connecting a piece of computer kit I’ve ever had. The various programs look nice and run well. Since this is the Apple universe you get to call programs Apps, and they tend to be single-function. I was quickly able to run up the browser and learn what I needed to learn about the website design – and that my use of a folding CSS structure did indeed sort of track iPod and presumably smartphone screens. Thank you Skeleton CSS for doing the grunt work and saving my ass while I was authoring blind ;)

    And I discovered I was getting old :( I had lost my last pair of glasses so I was slumming it with the pair from before, on an old prescription from 10 years ago. But the iPod scales websites down if they are too wide for the screen. As you get older the short focus of your eyes drifts out. Mine was different in each eye, and I could not read the roughly 4pt text with both eyes unless I held the device so it was too far away to read. So I either read it with one eye and get a splitting headache, or do without. Getting this machine has cost me about £400 so far – £160 for the iPod and the rest because I have to accept I need varifocals and reading glasses. In the optician at least I was able to read the smallest grade of text so I will be able to read the iPod rendered website and develop with it. I can’t blame this on Apple ;)

    This is the bees knees for the job I bought it for. I can see how stuff looks like on a smartphone like screen, I now know why I get headaches using the computer and what to do to fix this, and the iPod fires up in a couple of seconds so it’s easy to see the weather, email and stuff like that. The share price screen even works well, though I was reminded of the original vainglorious streak when I see the first example stock is AAPL. The iPod doesn’t owe me anything now – I was able to finish the job and the project has already earned me more revenue than the capital cost of the iPod. And I understand how teenagers can use the web on a small screen, because the screen has a finer dot-per-inch resolution that a regular computer screen. Although the total number of picture elements is still larger on a laptop or desktop, the iPod screen picture elements are closer together, so the loss of quality isn’t as much as I had expected from the smaller physical screen size. But you do have to be under 35, or equally short-sighted in both eyes if older, to be able to see the screen well enough to use that resolution without visual aids, and you’d look kinda daft on the bus looking at your smartphone with a magnifying glass!

    How to you use this thing for music then?

    Then I thought I’d try and put music on it. This, apparently, is the primary purpose of an iPod after all, though I didn’t buy it for that reason. Now I have it, I may as well use it ;)

    First, some background. I’ve loved music over the years, and it is one of the pleasure I used to have in life. I never used portable music players in a big way – with a car commute of 20 minutes each way there’s no need. I don’t have the death-wish of cycling plugging up my ears and losing situational awareness. Call me chicken-hearted, but I like to know if a great big truck is coming up behind me, even in rural Suffolk.

    a detour into hearing

    As a result the ermine is still capable of hearing up to about 12kHz though I have to be careful to use hearing protection with power tools. The mammalian ear is strangely and poorly designed in that there is a mechanical amplifier inside. The ossicles couple the high impedance of the air to the low impedance of the fluid-filled works inside the snail-shaped cochlea, using three bones to the eardrum. Then you get to the outer hair cells, which act as chemically powered-mechanical amplifiers, they do not send signals to the brain. This cochlear amplifer is the damnedest way of getting amplification and very susceptible to damage from loud sounds, but this preamplifer gives the ear remarkable sensitivity if working right. Then you get to the inner hair cells, which occupy a tapered shape, resonating at the input end for high frequencies and further in for low frequencies, acting as a coarse spectrum analyser. As you get older you lose some of the ability to adjust tension in the eardrum and the ossicles which reduces the damaging effects of loud sounds, so you need to be  more careful to avoid exposure to excessively loud sounds from 40 onwards.  ‘Cos otherwise you start to trash the hairy preamplifier, and you get to know about that eventually, because it has a stupendous amount of amplification- about 50dB or 100,000 times power gain. Lose or seriously damage that and you are deaf as a post. Young’uns should note that you’re not immune to the damage, it just takes a little more loudness to do it. From what I hear on the Tube and on the street, some of you are doing fine wrecking that sucker. Please, for God’s sake read this and take the test. If you are below 40 and it indicates any problem whatsoever then you may want to re-evaluate your relationship to music. I am well over 40 and do fine on the test, and there are a lot more miles on the clock in my case.

    Music isn’t particularly a threat to my hearing as when I listen there is a convenient device called a volume control, and I don’t go to that many live concerts. I stopped using portable audio devices on planes  (then called a Walkman not an iPod :) ) after I got off a LHR to LAX flight and fired up the walkman in the hotel room, to be greeted by a hellaciously loud volume I’d never normally listen at. A jet plane is a stupendously loud environment already, running at 80-85dBA 2, there’s no real headroom to make any music heard safely above the engine roar unless you are using noise cancelling headphones. 80dBA is considered the danger level so you don’t want to add too much more noise to your ears inside a plane.

    Using tools and transportation which is probably my main noise risk. I use hearing protection even for things like hammering, now, and definitely for any use of power tools. I may look like a jerk, but so what. There’s not much more I can say to the young, but it saddens me when I walk on one side of the street and can hear what track someone is playing on the other side of the street from their earbuds. There is no cure for deafness, and if you are young now and start to lose your hearing before my age you are likely to spend half your life in a silent world cut off from the rest of humanity’s preferred way to communication. My Dad once worked in a glass bottling factory and was very hard of hearing towards the end of his life. It was no fun at all for him.

    back to music

    1304_1940_family_radioI grew up with actually sitting down to listen to music. Yeah, I know it sounds kinda funny now, like a family gathering round the wireless to listen to the news on the Home service. Part of this was determined by the media of the day – record players were never portable in any useful way, and I’d have never played mine on anything crappy. Each time you play a record, a little piece of it dies, and the capital cost of the record collection was by far the greatest investment in audio entertainment, even for a hi-fi nut, so I didn’t take risks.

    Cassette tapes were noisy, unclear and all round ghastly, and I was unlucky enough to be oversensitive to speed instability. I was eventually reasonably happy with CDs, and more recently have moved to a Slimserver (now Logitech) media server and streaming players, playing losslessly compressed data from the CDs (ie the player gets exactly the same digital data as was on the CD). All of these work entirely within my four walls. I don’t do Cloud anything, for the simple reason that I hate third-party dependency for anything I put effort into. Cloud is fine for something you don’t need, or only need for a few weeks, and you don’t put any effort into. My music collection has been with me for thirty years and I’d like to hang on to it…

    Getting CDs into a digital music library is something that costs a lot of effort, leastways if you start off with a few hundred CDs. Transferring my CDs was a project that took me two years using multiple PCs and CD drives, sometimes running EAC on two drives at once, ripping the CDs to lossless FLAC and Cue files, which the SlimDevices/Logitech kit can play. It’s a long, tedious and soulless job ripping CDs. You only ever want to do that once, though I had to do it one-and-a-half times because I discovered why you should not split CD albums into tracks as soon as I ran into my first live album, and reinforced again when I ran into my first classical album. It’s a bastard when you get a gap between the first and second movements of a symphony that wasn’t there on the CD, or the applause hiccups between tracks on a live CD.

    And then work went bad and other things went wrong. In a twist of fate something that had given me joy for decades came to hold no meaning for me, and there is a gap of about three years when I bought no CDs and listened to hardly anything at all, and even that with jaded perception. Although I love the idea encapsulated in Miranda Sawyer’s lovely Observer article about the power of music to score our lives, and lift spirits in adversity I didn’t find the same. Until the spell was broken earlier this year, and the music came back to life.

    Now in trying to sort this out I discover much has changed in the three year intercession. Some people actually pay for digital downloads. When it comes to information I don’t pay for what I can’t touch, and in many cases the CD is actually cheaper these days if you take it secondhand, but yes, you do need to wait for it in the post. It seems there is some unholy digital download battle between Apple/iTunes AAC and the rest, led by Amazon MP3, with cloud streaming systems like Spotify throwing in a wildcard. I don’t want any of that shit. I grew up with a standalone audio system depending on only power and what’s within my four walls. Sometimes I am going to run a party in a field with no phone service or mains electricity. No Cloud service, no tunes.

    I managed to use the iPod without trouble for everything but music. When it comes to music, there seems to be a world of hurt in store for me, because I am not a new-born come to Apple to sort my life out. I have a perfectly good existing  digital music collection, held in a free open source losslessly compressed form specifically because I don’t want any company to be able to control my usage or suddenly render my collection useless. It seems the way you are meant to get music onto an iPod, iTunes, wants to control me 100%. It wants to say how and when I can listen to my own music, and how and where I can move it. I’m not having that at all. I didn’t rent this iPod, I bought the damn thing, and  I want to use my existing music collection without handing over the keys, so iTunes is right out. I’m happy to accept compression on a portable, but not the lock-in, and as for saying what I can or can’t do with my own data, sod that for a laugh. I say what I can do in my own four walls, not Apple.

    How to get music onto an iPod without installing iTunes

    I did finally crack how to do this, without installing the infernal iTunes. I have a desktop computer with a load of electronics software, kept on XP which I have to use for ripping CDs because EAC doesn’t work on Windows 7. The last time I installed iTunes on this XP machine it installed half the contents of Steve Jobs’ control-freakery ecosystem without having the decency to ask if that really was what I meant to do. Not just iTunes but bonjour which confused the hell out of my existing streaming system, Quicktime, Apple updating service, the lot. Not an exercise I wanted to repeat.

    Because I still think in terms of albums and not tracks, I use foobar2000 to split the CD image files into tracks and convert to MP3 for the iPod, which, though proprietary is at least a widely supported standard. Somehow foobar2000 was smart enough to tell the MP3 files that they are part of an album and tell them the track number, and the iPod is bright enough to take note of this and present me the music in terms of albums again. I used CopyTrans to do the job of shifting the MP3s to the iPod. Foobar2000 can also embed the cover art, which helps brighten up the selection process on the iPod somewhat. Both programs are free though only one is open source.

    CopyTrans had to download iTunes and use some part of the guts of it, but other than that I have snatched control of my own hardware back from Apple, without making the Beast angry by jailbreaking it. It kinda scared the hell out of me when I pressed play without headphones to hear a truly nasty tinny rendition of the track sodcasted to me from the internal speakers. It’s funny to think that forty years of technological innovation has brought us a poorer portable loudspeaker reproduction quality that the first transistor radio I ever owned, because at the portable level it’s all about the size of the enclosure that baffles the out-of-phase back output of the speaker. This was nasty, tinny, distorted and unclear. It was fine when I jacked in my headphones. I’m still not sure I have the clarity/resolution of playing back on my hi-fi, but it’s entirely fit for purpose as a portable ;)

    Apple products are great and easy to use as long as you are prepared to stay in the walled garden. Do as the nice man says and use the Apple ecosystem in the way prescribed, which in my case presumably would mean paying for several hundred CDs from the Apple store again or losing another two years of my life to ripping them into a compressed format that is locked to one PC and one iPod. And it will all work a treat, in general attractively, smoothly and without serious problems apart from the hurt to your wallet. That’s the easy part of the Apple universe.

    If I’d wanted a portable music player as such, I should probably have got anything other than Apple, where you can simply dump the MP3s onto the player as a mounted mass storage device, and the player sorts it all out. However, I needed to understand the smartdevice and Apple world and this the iPod has done for me. I do like some of the one-task programs, the share prices, the weather app and, to be honest, the music player itself with the cover art. So I can accept the hoops I have to jump through to make this device work with my existing digital music library. However, it’s another example of how Apple makes life hard for free-thinking customers. I’m not particularly tempted to buy an iPad after this experience if and when my existing laptop cashes in its chips. That’s the hard part of Apple.

    I was left with a greater admiration for Apples’ craftiness and the quality of their customer experience. And a greater dislike for the company at the same time for trying to turn an Ermine into a consumer zombie. A lot of the developments in computing, information technology and telecoms at the moment are trending towards making us good little consumers who don’t have any control or creative output. You can’t write code or write books or articles on a tablet computer 3, an iPod or a Kindle, but they’re great for consuming the work of others. We are all consumers now, it seems, and soon the act of creating content, which was democratized by the general-purpose personal computer in the 1980s, will be professionalised and locked down again, by the simple act of not allowing the user to install non-approved programs ;)

     

    Notes:

    1. really don’t do this at home. You have to short the CRT to ground after removing the cap, but dielectric absorption means the some of the charge on the CRT comes back while you’re not looking, ready to give the unwary a shock ;)
    2. Passenger noise environments of enclosed transportation systems, US Office of noise abatement and control
    3. not fundamentally impossible, but without a real keyboard your productivity sucks
    10 Apr 2013, 11:09pm
    personal finance
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  • The ISA conundrum, and a Cyprus memento mori…

    The Ermine ISA has had three and a half years in it. I still have the cash ISA with the other half year in it ;) So overall that’s about 36k lobbed in the pot. Now the FSCS protection on nominee providers is 50k. 1, so I’m good for another year with TD, eh?

    Not so fast. The whole point of an S&S ISA is that it is meant to appreciate in value, basically if I contribute this year’s money to the ISA I will go over the 50k limit. Plus obviously I’d like the ISA to keep on growing, if you please, so there wants to be some headroom in there.

    Now if you add any money at all to an ISA in this tax year, you have to stick with that ISA provider for this year, so it pays to think about this before I do anything with this year’s ISA allowance. I like to spread my contributions across the year, though I will up the rate if things like 2011′s summer of rage happen, or the Euro goes titsup, or Mad Kim goes willy-waving with his nukes. Obviously assuming there’s enough of the world left standing ;)

    Something else we’ve learned from a divided Mediterranean island, is that anybody who has any money in an account over the government guarantees is considered a rich bastard who needs to help with the national debt. The more cynical who sleep on a bed of gold and line their walls with tinfoil will correctly opine that because governments have a monopoly on the use of force they get to do as they damn well please in times of real trouble. which is true, but let’s hope those sort of times don’t arrive, because how much is in your ISA is probably not one of the most pressing concerns at that juncture.

    Nevertheless, when there is some simulacrum of democracy running, it seems that you’re still going to take a hit if you are a minor Rich Bastard. Truly rich bastards have of course spread their vast wealth far and wide. I don’t think the Rothschilds are that troubled if their ISAs go down the pan, and Warren Buffet’s Roth IRA is probably not the largest part of his holdings either. However, it does matter to me, and from recent events in Cyprus, it pays to avoid being considered a Rich Bastard. I would have thought that thirty years of paying taxes would be considered a decent enough attempt on the National Debt, but it seems not.

    I can’t recall any UK ISA providers going bust, but the US firm MF Global shows that brokers can go bad. It’s the same old same old – power corrupts, and money is crystallised power, so get too much of it in one place and the effect of it on frail human integrity can pass critical mass. We are still blinking in the daze from the result of the last chain-reaction of  too much money controlled by too few hands. And I’d say that the financial system is still deeply damaged and there are still big debts on private and Government books. Being an identifiable financial milch cow is unwise, so I need to find another ISA provider. Not because I believe TD Direct are a bunch of crooks and the Toronto-Dominion bank is about to go titsup. But just in case they have their internal thief, their Nick Leeson, Jerome Keraviel or Kweku Adoboli.

    It’s not that easy to select an ISA provider these days, because the effect of the FSA shakeup of the fees structure, the RDR, means that something that looks good now may turn out not so good a year down the line. There’s no point in me doing the analysis when there’s this comparison chart at Monevator that summarises the issues. But it still lacks the crystal ball to see what the fee structure will change to in future as RDR settles down. It is often fearsomely expensive to shift a S&S ISA – you either have to sell all the holdings and shift as cash, or shift each line of stock, for which there can be a hefty transfer charge. I was lucky enough to avoid that when I transferred my iii ISA to TD Direct because iii were trying to avoid any more negative publicity from their fees hike, they intially wanted their £15 per line of stock. I had 13 lines of stock at the time, so that would have been £200 to show a clean pair of heels. You just don’t want to do that too often, it would knock about 10% off my dividend income for the year.

    I’d like to carry on with running a HYP – indeed I’d probably buy more of what I have already, and break out a bit into sectors I don’t have yet, particularly oil, mining. However, I may take some time out for this year, allocate my ISA allowance and ride RDR out with a 100% Vanguard Lifestrategy fund with Hargreaves Lansdown, on the grounds they’re big, and one fund can’t be too expensive to shift out if necessary. Plus there’s the issue that I’m not sure I was getting a better return for focusing effort on making money from money, rather than allocating the same amount of effort to alternative passive incomes. As long as it doesn’t start to look anything like work, that is ;) I’m still glad I did it, and the principles of making money from money still hold. I just don’t need the streetfighting with rapacious transfer fees at the moment if I need to move because of RDR. Hopefully TD won’t go bad like iii, and my existing HYP can continue to grow there and work for me. This is the first year that I’ve managed to sell nothing at all, apart from two find I had in iii when they threatened to start charging for buying and selling funds. Much of the secret to stock market investment seems to be to choose well, and then sit on your ass and leave it be.

    It appears that provided you aren’t contributing to the ISA in the current year, you can shift out a lump from an ISA provider or just one line of stock for instance, which may be the solution for if/when my TD HYP grows beyond the FSA protection limit. If I don’t add to it this year I should be good for a couple of years yet there.

    Oh and thanks to the good citizens of Cyprus and indeed the nameless EU bureaucrat who let the cat out of the bag. Hold more than the EU protected limit in any one account at your peril…

     

     

     

    Notes:

    1. Note that the protection on investment accounts is against the nominee getting frisky and running off with the cash or going bankrupt, it isn’t on the companies you invest in going bust ;) ,
    29 Mar 2013, 7:56pm
    frugality living intentionally shares:
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  • So how did this early retirement lark work out in the end

    It’s coming up to about nine months since I retired about eight years early from work – that’s eight years than the normal retirement age for The Firm. Truth be told, I retired for negative reasons rather than positive, but I’m not going to go on about those particularly. Because people just don’t bang the drum for the positive things that happen when you are retired. Like everybody else, I assumed it was all about the money. That’s everybody’s greatest fear. What you don’t hear about is the multiplicity of little things that all add up to a far better experience of life.

    I caution that to make these work for you, you must eliminate debt, and that means all debt. Yes, your mortgage too 1, and that means doing without a lot of consumables while working, and probably having a reasonable amount of luck at times. You don’t borrow money from a bank, you borrow it from your future self, and if your future self will have less income than your current self, it makes no sense to be in debt.

    So what does life retired look like? It’s all about owning your own time. It was given you as your birthright but was taken away from you early in life. Somebody said to me that time is the ultimate consumer good. He has a point, though I had to live it to know it, and also to have enough time to crawl from the wreckage of my curtailed career.

    Owning your own time is delightful – you have the choice of what to do and when to do it. Before retiring it pays to prepare your human setting too, who will you know and spend time with, and that’s worth giving some thought to that before you retire. It’s particularly important for early retirees because a lot of their existing friends and acquaintances will still be working, some people I knew who retired even earlier than I did felt lonely, particularly those that retired in their mid forties, and I learned from their experiences – these were typically single guys, it took me longer than for them. Give thought to how you will maintain and develop your human connections, because as you get older it is Who is in your life that matters, not so much What is in your life.

    The upside – my skin looks better and younger, the bags under the eyes fade, I slowly lose some of the weight that accumulated over my years behind a desk and in the lab. I walk more and bike more. I hear the birdsong, if there’s a good blackbird I will sit and listen to him for a while. I sit down for meals at a table rather than scoffing overpriced sarnies at my desk, I have more time to spend with the people I care about, I can read books, I can build things, learn how do use woodworking tools better, enjoy the company of people more, listen to people better, learn more, play more.

    I watch less TV than I did while working. I tolerate no ads – I use ad-block plus on the Internet and less TV cans that at source, on the occasions I do watch TV I use a PVR and fast forward over the ads. If I have a requirement that may need buying something I use google – I buy things on my own terms, not because somebody is creating a desire in my head for shit I don’t need. I don’t buy anything on impulse, I wait at least a couple of days to see if the want is really a want. But if it is, and it fits my values, I buy it. If an offer has gone and I need to pay 10% more, so be it, that’s the price of living on my own terms and agenda. I don’t piss about with low-rent stuff like quidco and cashback, I have three credit cards but if I use them I pay them off in full. I’ll never get another credit card because I have no wage income, just investment income so I presumably look like a deadbeat living under railway arches on a credit check. Do I care? No – if the existing cards kick me off then I’ll pay by debit card or by cash, because I Don’t. Borrow. Money. ever since discharging my mortgage.

    I can’t recommend early retirement enough. But you do need to be prepared to make the ‘sacrifice’ of living on less. I surrendered eight years of income when I retired, if you add all that up it’s a lot of money. I was happy to pay the opportunity cost, because that’s also eight years of life I’ll never live again. For me that was the right call – indeed perhaps I should have looked ahead and done it earlier.

    Early retirement means I have less Stuff in my life. But I have more joy. Early retirees needs to speak up for it, because where are the ads on TV for Earn Less and Buy Less but Live More? We in Britain are so much richer now than we were thirty years ago, when I started my working life, I heard an estimation on the radio we have about twice as much disposable income as people had then. Stuff rather than Time seems to have got the thick end of our extra income. I am in my early fifties – the London I grew up in used coal fires and many houses had no central heating, some still had outside toilets. Cold and damp and the associated aches and pains were prevalent in the adults, so when I hear the Joseph Roundtree Foundation talk in terms of needing Sky TV to take an active part in society I wonder if perspective hasn’t been lost. We really have so much now. Ivan Illich called it out well in Tools for Conviviality in 1972. We are so much richer now than we were then, but are we any wealthier, I wonder? You are wealthy when more money wouldn’t massively change where you live, and how you live…

    For each of us the sands are running through the hourglass, one day at a time. Making the call on as to where you place the balance between More Stuff and More Life is one of those things that is Important but not Urgent, so it always goes to the back of the to-do list. It’s worth dusting that question off and taking the time out to work through the options. You can measure more Stuff, and you can measure More Money. You can’t measure More Life. And I’ll stick my neck out and say Tom Peters was absolutely full of shit when he said you get what you measure. It works a peach in business, maybe. But in Life, it causes you to prioritise the measurable, the ‘how big is my…’ insert KPI here. And yet, when people look back on their life at the end of it, it is often the immeasurables – seeing their children grow up, and who they spent time with – or didn’t’ spend enough time with. The days are long, but the years are short. Though it’s schmaltzy in a uniquely American way, Gretchen Rubin nailed it. Don’t forget to live in the moment, because those moments are precious and they are running out.

    My eventual projected annual expenditure is about a fifth of what I was being paid at The Firm, and I have a better quality of life – because I determine what a day looks like. There are other things that are odd about being retired. I have deliberately and intentionally avoided the whole work issue. I toyed with claiming JSA but figured a) I’m not looking for work and b) the stress of wanting to lamp some pipsqueak in the Jobcentre wasn’t worth the £1500 that six month’s contributions based JSA is worth, particularly as I’d have to pay tax on it.

    Managing personal finances after work is enormously different to when you are working. While working, my income was single valued and knowable. Now, it comes from multiple volatile and erratic streams. I have the ISA income, which I reinvest. A similar sized lump of non-ISA shareholdings, that I have to capital gains spring and shift to the ISA over the years. And then cash holdings. These are horrendously different from what they were when I was working. What you must not do, when you retire early is to look at these accounts, and go Wow, I am rich. It is the lottery winner’s curse – most people have been used to a regular income and virtually zero savings all their working lives. So suddenly when it’s all savings and no income they see Big Numbers in their bank accounts and think they are rich, and lose their heads.

    They’re not rich. Capital is worth about 5% as income, so divide all those numbers mentally by 20, high-roller. So unless you have half a million in the bank, then you aren’t even going to be living on the UK average wage. I don’t have anywhere near that much in the bank, BTW, though I don’t have the parasitic housing costs most people have because I paid down my mortgage. And if you do have half a million pounds in the bank then you need to remember what happened to the good people of Cyprus recently, and make sure you don’t have it all in one place, because you will probably be called upon to help with the national debt at some stage.

    When I left work, I started to see those big numbers, and it is hard to explain just how scary and unreal they seem. I froze, and tried to keep the headline networth figure from falling. I’ve never worried about networth before, indeed there is no figure for house networth in my accounts, whereas this evanescent figure seems to be all that my fellow-Brits seem to concern themselves with. Maintaining networth was not the design aim of the plan, but there is a visceral aspect to money. All of a sudden I see strange numbers, and the power is cut, there is not steady income. The analytical solution I had designed over the preceding years was correct, but I found it hard to live it at first, to surrender a little bit of networth each month, in a long glide path for about three years. Even at the planned rate of descent, I would have half the nominal value of the capital, though more would be in ISAs by then.

    I consider myself a reasonably hardened investor. I flew into the 2009 storm, in both AVCs and ISA savings. I’ve seen individual stocks plunge by over half, and recover, first on a total return basis and then on a nominal basis. But I quailed when faced with living a plan I had designed and was going slightly better than planned, because it was so alien to my experience of handling money. Don’t underestimate that effect of losing an income, even if you amass large amounts of capital compared to your mortgage-paying wage-slave life. Perhaps I was overly irrational etc, but I believe that it is not possible to be successful and totally rational about money. It is crystallised human work, a claim on other people’s effort. I must be involved to animate the plan and couple intention with action. And it still took me months to overcome the resistance to doing what I had planned myself ;)

    I recently discovered I have been working without knowing about it, fortunately in time to stop getting paid before the tax year ends ;) In times gone by I was interested in sound recording, and made a few field recordings which I added to a microstock agency. I’m not talented enough as a photographer or a recordist to make headway in that sort of this as Ermine photography. But microstock works for me – I don’t have to deal with people or rights and all that, the agency sorts that for me. The downside, of course, is you expect to make the price of a couple of pints of beer on it, or maybe a decent meal out.

    I haven’t bothered to track any of this for a while. It appears that these firms are making me significant money, and I also have a few website estates that bring in a fair amount of Adsense revenue (this isn’t one of them ;) ). I have told all these guys to hold payment till mid April to forestall creeping over the personal allowance this year. It is, however, very sobering to find that this stuff, which I had forgotten about, is actually making me about the same amount of income as my ISA, which has received by far the greatest part of my attention. My field recording equipment lies on a shelf covered in dust now, because the river of creativity dried for a few years as I focused all energy on getting out of The Firm.

    I had a strange experience a few  weeks ago, I travelled to London to listen to a concert by a singer whose records once kept the thin thread of the young ermine’s fire alive through a long night until the break of dawn during a difficult time at university. The past is a foreign country – thirty years ago there were no mobile phones, indeed without phones at all in the typical sort of crummy bedsits I rented them. If you passed midnight then you had to reach the break of day before assistance could be raised if you couldn’t haul your ass up the stairs and into the cold city night with no Tube service.

    As I heard the song once again it resonated across the years and changed something. In reminding me of that turning point it invoked another and the dead hand that jammed the creative centre unblocked, and the spark flickered into life once again.

    For several years I fell back and fell back, trying to save enough money to derisk the financial issues. I had saved enough money – I still have no pension income, and my run rate is a little bit lower than originally designed. But I also focused a lot of effort on trying to understand the financial conundrum of how to make money out of money. That was reasonable, because towards the end of working for the Firm, the flame of creativity flickered and failed. The accumulated financial capital was all the resources I could count on, because my human capital had fallen to zero – without the creative spark I could not drive things forward. I would look at code and it would all swim before my eyes and have no relation to other bits, my photographs were technically okay but pedestrian. I would hear things that once meant something to me and they did not lift my spirits. It was too easy for projects to end up as half a page of scribbled lines or half a circuit board and nothing else. I’m not going to sell my time to another employer – I am too old to be employed at a level that would meet what I would charge for my time. That means I would have to create value, and doing that without a creative spark just doesn’t happen.

    However, when I discover that two lots of legacy activities are now passively earning me more return than my multi-year and reasonably well performing ISA is then it begs the question on whether I have the focus right for the me now as opposed to the me 12 months ago. Money is not the only way to buy passive income, and the tragedy is you can only buy about £500 worth p.a. of tax-free income in an ISA every year. And obviously it costs you 10 grand a go, though this is ideally not a sunk cost. I can probably beat that income without breaking a sweat with a bit of improvement ot the website and some recordings. I could blow the dust of my Sound Devices 702 field recorder and Sennheiser microphones and get out in the field are record interesting sounds. I think people use the sounds in video games, I haven’t played video games since the 1980s but I got a book out of the library to see how people master audio for games when I discovered this.

    I don’t miss work. One little bit. I don’t miss the Calvinist sense of purpose or all that sort of garbage. I have no time for the ‘find the work you love’ brigade. I’m with the Mexican fisherman. That isn’t to say that I spend my days lying in bed – the world has plenty of wrinkles enough to keep an inquisitive Ermine’s mind entertained.

    There is the lovely story of the flight of the sparrow through the mead hall by the Venerable Bede’s Ecclesiastical History of the English People

    the present life of man upon earth, O King, seems to me in comparison with that time which is unknown to us like the swift flight of a sparrow through mead-hall where you sit at supper in winter, with your Ealdormen and thanes, while the fire blazes in the midst and the hall is warmed, but the wintry storms of rain or snow are raging abroad.

    The sparrow, flying in at one door and immediately out at another, whilst he is within, is safe from the wintry tempest, but after a short space of fair weather, he immediately vanishes out of your sight, passing from winter to winter again. So this life of man appears for a little while, but of what is to follow or what went before we know nothing at all. If, therefore, this new doctrine tells us something more certain, it seems justly to be followed in our kingdom.

    Work is somehow like an inverse of that – the young sparrow starts in childhood from the warmth of the mead hall, then enters the life of work, where he battles the wintry storms of other people having control of his time and purpose, until perhaps later on he re-enters the warmth of the mead hall, in control of his own resources and destiny, perhaps for the first time.

    I didn’t particularly dislike work for the vast majority of my working life. But work isn’t what life is about. It’s a means to an end. It’s far too easy to lose sight of that, on the long journey through the wintry tunnel of work, and it’s too easy to build must-haves into life to compensate for the long winter. But the tragedy is that these must-haves – the extra house square-footage, the chichi holidays and city breaks, they all add up. And so you can find that your winter holds no spring, and the sparrow must fly onwards till he falls out of the sky.

    Work. It’s overrated compared to Life IMO… Each to their own, but I hear a lot of grumbling about work. And for sure, I’ve done my fair share of grumbling too, but at least in the end I took the fight to the enemy. It’s not all all about the money. It’s also about the time. You can save money, sort of. You can spend less of it. But you can’t save time – try spending less than seven days over the next week. That’s why you need to think about living in the moment. The Moving Finger writes; and, having writ, moves on…

     

    Notes:

    1. an exception can be made for this if you are saving tax-free in a pension with the aim of using the 25% pension commencement lump sum to pay off the mortgage in full on retirement. In my view this isn’t the clear-cut win for early retirees who will defer their pension for 5 years or more, but IFAs seem to recommend it for many people.
    22 Mar 2013, 2:01pm
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  • Help to Buy = Moral Hazard. What on earth could go wrong?

    On Monevator, there’s a good and spirited discussion has taken Help To Buy apart in detail. So this is just a rant, since despite imploring Cameron not to fight the tape last year, he’s actually taken a bastardised concept that at least had some merit – favouring the first time buyer, and compounding the mess.

    The housing market in the UK is deeply and fundamentally f*cked up. There really is no other way to describe it. It is a world of hurt for an awful lot of people, and there is no excuse for the Government criminally acting on behalf of a small proportion of the population that seems to hold sway over policy.

    Let’s look at some of the facts. Only half of owner-occupied houses in the UK are owned with a mortgage 1. Assuming that tenure applies to adult occupiers, there are about a third of occupiers who rent in some way and another third who own outright. These latter two groups are taking the shaft from a high house price policy.

    The renters are taking the shaft because a significant proportion wants to buy, and the ones who own outright are taking some of the shaft indirectly because they are old gits whose savings will be destroyed by the inflation being unleashed by the money printing used to drive interest rates down, so that damned fools can be persuaded to overpay for houses.

    And now the Government now wants  to assist those fools in paying even more for houses. And I am hopping mad. Because I don’t want to go through the next depression when the music stops and our money is worth jack shit. At the very least it is rude or the Government to push the stick forward into the next housing-related financial crisis before we’ve done with the current one!

    I hold too much cash as it is. I am starting to consider taking some of the Governments blasted money and mortgaging my own house. But then what do I do with the cash? What on earth holds value in this stupid world of make-believe? Where do you put it? In Euros thieving barstewards want to have at 10% of it, or more if they please, I don’t believe the US debt will do foreigners any favours when the chips are down. It is like we are living in end times, everything shimmers and nothing represents real value or a true claim on future human work.

    60% of people living in houses don’t benefit from high house prices. We don’t need a crash, but we don’t need tosspots trying to inflate prices, leave ‘em be and let the invisible hand do its stuff. Oh and if you are thinking goody goody the government has made it easier for me to own my own home, then perhaps you should read this cautionary tale. I walked away from half the price of my first house and all of my 20% deposit, more in real terms, ten years after the Lawson boom of 1989. House prices do not always go up. And the longer they have been inflating, the bigger the bust.

    The tale won’t do any good. I didn’t believe people in 1989 when I stupidly overpaid for a house. You won’t believe me. But what really, really, pisses me off is having to pay for your stupidity in the years to come when we have the strings and violins playing for jerks like this, who will then claim benefits for their unsustainable lifestyle. I had to pay for my mistake myself, one sodding pound at a time.

    Oh and one other thing. Pay your damn capital down, either via a bog-standard repayment mortgage, or via parallel investment systems like a S&S ISA or wizard wheezes like Monevator’s better way to buy a house, though in the latter case have the damn self-discipline to make it work – no splurging on having too many kids or foreign holidays.

    Look ahead of you. The power balance in Britain is shifting away from labour to capital. Do you really want to commit so much of your future earnings to buying an illiquid asset at a spectacularly high price? There are better things to do with the fruits of your labour than to sink it into ten thousand bricks and a postage-stamp plot. It’s not impossible to imagine a Spain like property scenario here. As the Germans say, the good Lord sees to it that the trees do not grow into the sky. If house prices get inflated then the value of the money will be destroyed. The rest of us, that’s the 66% who either want to hold on to wealth to live on in our old age or build it to be able to pay our rent passively, will have to invest – in stuff, anything that pays some return and is reasonably nailed down in reality for when the results of this arrant stupidity come home to roost. There aren’t enough real assets in the world to compensate for the make-believe of house price inflation.

    The tragedy is that if you need Help to Buy, you can’t afford a house. Look at the graphic in Monevator’s post. You are trying to buy a £200k house, so you save 10K and the Government loans you 40k interest free. You go whoopee-do because you can now pay 40k more than you could before. So you go to the estate agent and offer 20% over  the odds, because you now can, and because your brains fall out when you are British and buying your first house. Just like mine did. You have just increased your capacity to overpay by 400%, so you will lever up by 20%.

    As it says on the tin

    The Government will lend you up to up to 20% of the value of your property through an equity loan, which can be repaid at any time or on the sale of your property.

    Where’s the small print, then? You are going to buy this when money is tight, kids may be on the way, oh and we seem to be stuck in a never-ending depression where everybody ends up working part-time. In three years the scheme will end, and all of a sudden people won’t be able to overpay for your house when you have another babe on the way and need to step up. What’s going to happen to house prices then, eh? If you’re lucky interest rates will still be on the floor, though if there really is a recovery then they won’t be, which will reduce what people can pay for a house. You’re going to have a barrel of laughs if you have to move for work, and discover that people don’t want to pay you as much as you paid. All of a sudden you find you’ve geared up your losses, from 10k to 40k. Of course, the Germans might be wrong and house prices will go up, and up, and up like Jack in the Beanstalk. You have to ask yousrelf, though, where will your buyer get the money from? If they don’t inherit it, they have to pay their mortgage from net income, and the IFS indicates taxes will have to rise in the UK to reduce the deficit (that’s right, the deficit. The debt is a lost cause). If taxes rise they will find that harder to do.

    If prices don’t rise, you will find out what I did – it’s damn difficult to repay a mortgage if the asset you bought with that loan sells for less than the loan, because unlike in America, mortgages come with recourse in the UK – they chase you for the money you owe. How do you repay that? You take your salary, and throw some of it into a black hole for which you get nothing in return. I’ve been there, done that, and believe me, it was no fun.

    Help to Buy would have totally shafted me. Instead of paying down about 50% of the addle-headed price I overpaid for my first house, I’d have ended up paying down about 65% of it. Wow. What a fantastic deal!

    And you know what the worst thing about this is? If you are unlucky enough to be in your early thirties and looking to buy a house, you’re going to have no choice but take the Government up on this deal. Because every other stupid twit is going to, so even if you know this is a mad thing, you’ll either have to pay over the odds using the Government’s money or stick your life on hold for a few years as far as buying a house is concerned. That’s easy if you’re young, free and single, but not so good if you have a pressing need for more space now.

    So I have one question to ask Dave.

    Why are 60% of adults paying taxes to shaft themselves in favour of the 30%, who will find out they also took the shaft when the scheme ends?

    What the hell is up with that? If the Government wants to spend money on housing, build council houses. And employ a Keeper Of the Commons, so that when a politician like Thatcher comes along and wants to sell commonly paid for assets to buy herself some votes, the Keeper of the Commons pulls out a silver revolver and holds it to their head with a wizened skull in their left hand as a memento mori. And asks them if they really, really, want to do that. If the answer is yes, then pull the trigger and invoke an immediate General Election. Reloading the revolver before the next cynical vote-buyer has a chance to get elected. There needs to be real and serious penalites for politicians buying votes now with the common good of the future. Thatcher did the British housing market a world of hurt by flogging off the housing assets that had been built with the common effort of the post-war generation so people would vote for her again.

    It really is high time the British government butted out of the housing market. Every time they touch it, something about it gets worse for more people than benefit. Is that really the job of government in a democracy, to favour a minority at the expense of a majority? There are better ways to improve housing in Britain. There’s no God-given reason why so many people should aspire to owner occupation. We do in Britain because decades of Government policy, starting with Thatcher, have either destroyed perfectly decent alternatives (council housing) or made them so horrible, like renting from amateur BTL landlords who bodge repairs – my London landlord fitted the electric shower to the lighting circuit, for chrissake. Renting in general on shorthold tenacies with no long-term security of tenure is no fun. At least if you rent from the bank, as any of you with interest-only mortgage are doing ,then at least you get a few years security of tenure ;) If the Government can’t make it better, then at least they ought to observe the Hippocratic oath, and do no harm.

    Too many people borrow too much money in this country to overpay for crap to live above their means. Higher house prices are part of the problem, not part of the solution.

    Notes:

    1. before anybody boils my head for the fact that 31% is not half, note that all owner occupiers are 66%, and the non-mortgaged guys are 31%, a shade under half
    20 Mar 2013, 10:06am
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  • Cait Reilly was out of order about Poundland, but not half as out of order as the Government

    Cait Reilly shot to fame as the woman who was too special to work for her Jobseeker’s allowance because she was too busy with more important things to do with her time. In particular she wanted to do her work experience in a museum rather than Poundland.

    Now my experience of work has usually be that he who pays the piper calls the frickin’ tune, so evenually when I came to be sick of the tune I had to tell the piper to get on his bike. Then you don’t get the pay, natch. So as far as I am concerned Reilly’s case doesn’t wash. In the end if the DWP is paying you, Cait, and they say you go  to Poundland, well, you go to Poundland. Or you stop claiming JSA. The choice is yours.

    Cait Reilly in Poundland

    Cait Reilly in Poundland

    However, Reilly pressed her case through the courts, and the law of the land as it stood at the time found in her favour. Which in the end is as it should be. I’m entitled to shoot my mouth off here but the whole point of living in a complex human society is that you need organised ways of determining rules and we have one. And it found that Cait Reilly was right and the DWP and I were wrong.

    We have Parliament, which makes the laws, and the judiciary, that interprets the laws, and that’s because tough experience in human societies shows that when the guys who make the laws do the intepreting and applying it all tends to go downhill and ends up with some Big Cheese saying “You lot damn well do what I say and I call the shots round here”. The more swivel-eyed nut-jobs think we’ve already got that but I’m not one of them. Although Britain has its problems at the moment they pale into insignificance compared to the issues of some human societies at the moment that have ended up with the “I call the shots round here”, and if the price of that is that the Cait Reillys of this world get their way and a free ride at the taxpayer’s expense then that’s not too bad a price to pay for holding the thin line against mob rule ;)

    Parliament is perfectly entitled to say, having seen this debacle, that no, what they meant to happen agrees a lot more with my view on things than Cait Reilly’s. And obviously I think that’s a Very Good Thing. But what I am most certainly not happy about one little bit is the attempt by the DWP to create a retrospective law to avoid paying out the JSA that was denied to jobseekers up to now because they were wrong.

    The Department for Work and Pensions has introduced emergency legislation to reverse the outcome of a court of appeal decision and “protect the national economy” from a £130m payout to jobseekers deemed to have been unlawfully punished.

    Hello Iain Duncan Smith and the government generally. What exactly is it about unlawful that you don’t get? We’re going to a bad place when the Government shows a disrespect for the laws they make, and retrospective legislation is always a disrespect for the rule of law. Law only has meaning when it is knowable, and if people can come back in time and change laws retrospectively, then anything can be made unlawful.

    So back off, IDS and call off your dogs. By all means change the legislation from this point on, so that precious princesses like Cait Reilly do get it – claim JSA and you bloody well do what the Jobcentre tells you to do. But since that did not hold when her JSA and that of others was docked then bloody well pay it back, with interest and accept you screwed up.

    After all, the West Coast cock-up cost 50m and rising simply because of a lack of common sense – that’s what you get when you run an operation with consultants rather than competence – you end up not knowing what you’re doing. So less of this ‘protect the national economy’ bullshit. You protect the economy by plugging this particular loophole from now on. You don’t protect the economy by overturning the rule of law, chumps. I wouldn’t go as far as to say Cait Reilly deserves the money that was withheld. But she should get it, as should anybody else who was in that situation, because the Government needs to  respect the law.

    6 Mar 2013, 3:54pm
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  • Europe, Swiss move to limit banker bonuses and control fraud, Boris howls and Osborne takes it in the neck

    The European Parliament often gets a bad press, but they are at least proposing a solution to one of the problems infesting capitalism at the moment, though it seems to me the plucky Swiss are way out in front here.

    It is the principal agent problem, and it started to arise in 1993 when Bill Clinton tried to cap executive pay. He made a right bugger’s muddle of the job, because the way he drafted this simply incentivised everybody to lie to get round the cap. He probably shouldn’t have been in this space anyway. It is the job of the shareholders of a firm to sort out pay, though twenty years of executive thievery has dulled our minds to this basic fact. In the end a joint stock company is about raising money from people to do something profitable and then distributing a share of the profits to them. It isn’t actually a charity to fund lavish executive lifestyles, and the easiest way to prevent this happening is to have transparency in pay. Not necessarily a matter of public record, but the firm itself should have some idea of its pay liabilities, and a method of setting pay that is independent of the people being paid.

    In the past you’d pay an employee a wage, and a bonus depending on performance in some cases, particularly sales. What seems to have happened is people working in finance in particular have got it into their heads that they are so clever, so brilliant, that they should all be paid by performance. However, sneakily, they talk about more pay for good performance. They don’t talk about putting £10 million in an escrow account where the employer can suck out a wedge if their performance is crap. No sir, we just want performance related pay for good performance. Lest it be said that I’m picking on bankers in particular, I note fund managers don’t waive their fees if they make a mess of stock-picking, they just quietly close down the fund and start again. Hedge fund managers and some investment trusts like to charge an extra fee if they do well and the fund rises in value over a year, but remain curiously silent about not paying back the equivalent malus if the fund falls. Go figure.

    Back to the more general case of executive pay. Clinton failed to include performance related pay in the cap, so obviously nearly all pay became performance related. What sort of performance – well, whatever could be fabricated to pay more. Once you base pay on a fabricated set of metrics in the control of the payee and/or people under the influence of the payee then the outcome is going to be excessive  pay. It’s like leaving the till open – it’s going to get looted! The results are easy enough to see

    ratio of CEO pay to average

    ratio of CEO pay to average. Looks like the third peak was cut short by the recession, but the trend is still well up

    In the past, most of executive pay was basic pay, with a bonus that typically didn’t exceed basic pay – indeed twenty years ago it was rare for a bonus to get up to half basic pay. Nowadays this is obfuscated by being ‘performance related’. For most of us performance related pay is, as a contractor wryly observed to me, a way for companies to justfiy reducing pay for permies. At the top, however, it becomes a licence to print money. It also skews incentive timescales – to make the performance call at the end of the year you have to scan back at most a year’s worth of performance. So PRP inherently favours short-term metrics, but since large companies aren’t pop-up-shops, decisions made at Board level have an influence on the firm’s performance that can last for many years.

    That multi-year performance is what the shareholders get, but since PRP has to be called out annually, the Board has an incentive to take actions that favour this year rather than the future, and this is worsened by the shortening of executive tenure to less than three years on average. Heck, I’ve held stocks in companies longer than many of their CEOs have stayed, and this leads to a disturbing fact.

    The shareholders are taking long-term risk, which doesn’t impact executive pay because they’re outta there when the chickens come home to roost

    I don’t have a problem with high pay. I do have a problem with perverse incentives

    You don’t build a FTSE100 firm in three years, though you can trash one that quickly. There’s nothing wrong in paying top dollar for ‘talent’, as long as you know why you are doing it. I don’t have a problem in paying someone 1000 million pounds if they add more than that much in value to the firm per annum, and using someone at 10 million wouldn’t cut it. I can’t imagine the scenario where that extreme would apply, but it’s a perfectly reasonable thing to do, a classic ROI calculation, if you can define the variables and risks with enough confidence.

    What I do have a problem with is anybody getting any form of performance related pay that is more than their basic salary, because they should have a stake in the long term as well as the short. And it seems that Europe agrees with me. Boris Johnson thinks it’s all to do with hiding the mess that is the Euro, but then he would say that. Looks like Osborne failed handsomely in his attempt to water this one down.

    There is, of course, the usual hollering from the vested interests, about how they will all scarper to Somewhere Else. Not so fast, people. Once you have paid back every red cent of the taxpayer bailouts, then yes, on your bike.

    So far the evidence is that the bonus culture has incentivized bankers (in this specific case though the rot is wider) to drive like drunks and crash the whole economy. How much tax has banking put into the British economy over the years compared to the bailout money it has sucked out of it, and do we really want more of this white-knuckle ride? And yes, governments have been complicit in permitting the TBTF company to rise. However, the TBTF operations had far more resources to hand to embed themselves into a position where they could call on a one-way bet on taxpayer money underwriting their risk-taking because the alternatives were deemed to hurt too many people.

    Gnomes of Zurich reined in

    Gnomes of Zurich reined in

    Meanwhile, over in that hotbed of anti-capitalist communism formerly known as Switzerland, a quiet revolution seems to be taking shape to address the excesses of executive pay. Again, there’s no problem paying someone a shitload of money, just that in shouldn’t be obfuscated in golden hellos, golden goodbyes, massive lumps of performance related baksheesh. It is transparency and symmetry that need to return to pay in business – with great rewards should go great risks. And the risks should be shared by those getting the great rewards, not just by the hapless company owners (that’s you and I as shareholders, or you and I as taxpayers in the most egregious examples). There needs to be rules of business so that information is available to all the stakeholders, so that they can choose what to capitalise and what to stay away from.

    Kamal Ahmed’s Telegraph article is the usual trope being trotted out – ‘banking will simply up sticks and leave’. That sort of thing didn’t wash with the Swiss, who still seem to have the quaint notion that you should take some responisbility for your actions and not just socialise the risks. Perhaps upping sticks would not be such a bad thing. The British taxpayer is probably not good for another banking bailout, and it hasn’t got its money back from the last one. It’s about time the good citizens of an economy in better shape than most of the Old World took on the risk and stepped up to the plate next time. Alternatively, it’s about time that the multifarious top agents of capitalism wind their necks in and start taking part in the risks as well as the rewards of their tremendous brilliance. At the moment they seem to treat the whole thing like a video car game, where crashing the vehicle ends up in a reboot and start again. The rest of us occupy the real world, where their crash involves lots of wreckage and real people getting hurt. Let ‘em howl.

    Most people who have an issue with executive pay have an issue with the  amount or the ratio to average salaries as such. I don’t – some of the rise in the level of CEO pay relative to the grunts may simply be the increasing scale of companies. However, I do have problems with executives acting like the robber barons looting shareholders money and using opaque metrics to award themselves rewards without risks. All hail to the Swiss for calling this out and flagging the excesses without falling into the Clinton trap of trying to cap reward.

    It shouldn’t be capped – but it should be as transparent as possible, so that the true owners of a firm have enough information to make a judgement call. That’s what needs regulation – simple, understandable pay and incentive schemes, preferably where the balance between the carrot and the stick is a lot less uneven than it is now. Golden hellos, goodbyes and handcuffs need to be limited too, because these are simply used as disguised bungs. If the firm wants to pay a shedload of money, do it. Over the table, please, not under it by sleight of hand.

    No doubt the peddlers of the Global Talent Pool meme will screech. Sod ‘em. Capitalism has done perfectly well so far with pay and bonuses that were understandable. If anything the increasingly short tenure of CEOs shows they aren’t that special compared to the people of a previous generation who ran firms for decades, really understanding them as opposed to in and out for a fast buck. I’m chuffed to see that it is the Swiss who seem to be making moves to spike this charade.

    26 Feb 2013, 12:24pm
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  • In praise of meatspace

    There’s a new trend in the world of work. Meatspace. Presentee-ism. Being there, in the flesh. Bums on seats.

    The fragrant Marissa Meyer is into meatspace - she's all for yahoos getting up close and personal

    The fragrant Marissa Meyer is into meatspace – she’s all for yahoos getting up close and personal

    I haven’t been able to trace the MBA paper that started off this management fad, but I saw the beginnings of it in the last few months at work, where the same thing was being said. Not with quite the same panache as Yahoo’s Meyer, who hit Yahoos straight between the eyes with having following edict  issued from Yahoo HR:

    Yahoos,

    Over the past few months, we have introduced a number of great benefits and tools to make us more productive, efficient and fun. With the introduction of initiatives like FYI, Goals and PB&J 1, we want everyone to participate in our culture and contribute to the positive momentum. From Sunnyvale to Santa Monica, Bangalore to Beijing — I think we can all feel the energy and buzz in our offices. [Don'tcha love the poetic alliteration, Yahoos?]

    To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. [The slack way of life all you lot have gotten used to is about to end, numbskullz] That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together. [Repetition to Re-educate any Recalcitrant Refuseniks that Resistance! Is! Futile!]

    Beginning in June, we’re asking all employees with work-from-home arrangements to work in Yahoo! offices.

    In other words, Yahoos, your cushy lifestyle and childcare arrangement Have! Just! Ended! Because we own your time and We Can. Pretty much the same was said at The Firm. The keening noise from homeworkers far and wide was pretty similar. I admit that I simply suspected it was to encourage some people to take up the voluntary redundancy scheme the next time it came around. Yahoo may feel itself similarly overstaffed. However, in the US it seems much easier simply to issue pink slips all round, so I conclude that I was being over cynical as this explanation doesn’t apply in the case of Yahoo.

    On a side note, imagine the feeling of Power you get issuing an edict like that? All of a sudden, you can turn over the lives of hundreds, if not thousands of your fellow human beings and make them follow your whim. Sometimes you have to look sideways in the mirror, and acknowledge the heart of darkness with its swishy arrowed tail ;) Gordon Gekko was a wimp compared to Meyer.

    Is she right – is homeworking detrimental to the working environment?

    It depends on the work. There are some things that are fiercely individually creative and individualistic – writing a book, creating great art, that sort of thing. These things tend to be done by people acting as individual agents, not cube farm workers.So we can probably discount that sort of thing. It’s also not cut out for anything involving Stuff, usually. It’s about knowledge work – ideas, not things. And to be honest, the ‘knowledge worker’ office environment also used to be better in many ways than the typical open plan office/ hot-desking sty.

    I saw a gradual degradation of the office environment over my three decades of working, but it is hard to separate the variables. Some of my early work was done where we had a group office of about ten of us, and a group lab where we could work on the development of electronics. This was a great working environment, which I saw both at BBC designs and at The Firm, but it was of its time – an expensive work environment where companies focused design talent and supported them for both the reflective design work (in the office) and the hands on lab work, which was a different sort of thing. There was also secretarial support – other people set the printers, made sure office supplies were replenished, all that sort of thing.

    There was clear interplay between the staff- I learned an awful lot from more experienced hands, both by observation and by asking. Homeworking would have sucked here – the resources of my own electronics lab at home are a pale reflection of what was available thirty years ago at industrial research facilities despite three decades of technical development.

    Even if I could replicate that, I would be at a disadvantage without the meatspace interaction with other people of a similar level or greater experience – Internet based discussion and email doesn’t go anywhere near compensating for that. Even thirty years of experience doesn’t entirely make up for that – if I haven’t experienced a particular design rathole I’d fall into it without the benefit of others around, the experience just helps me realise this faster.

    Many people don’t interact with Stuff at work, they interact with thoughts or ideas. If they do interact with Stuff, homeworking is usually out. Not many people build aircraft commercially at home. So we are talking about knowledge workers.

    Knowledge work and better communications – a match made in heaven

    I recall the first time I came across the power of computer communications. I was working on an international collaborative project, and every so often I’d have to fax over a document to about ten groups of people in different companies. A fax machine has all the evils of a computer printer together with some pathologies all of its own, this was an early 1990s world without Internet email. Not only is a fax machine a ropey reproduction, it does a bad job of reproducing technical diagrams due to a nasty habit of not bothering to display fine lines. I spent about £500 of The Firm’s money (about £900 now) on a full-length fax card for my Dell 386 computer. All of a sudden people could read the diagrams right, and I could send the 10 lengthy faxes over lunchtime rather than take all afternoon at the fax machine feeding a multipage document in 10 times. And so it went on, with email, scanners and better computers, till we could share the results of our work with other people, from almost wherever we were.

    Somewhere we jumped the tracks, and imagined that if we could share the results we could share our ideas. Yes, if it is just us who have the ideas. Yes if the ideas have been crystallised into a presentation. But compared to a bunch of interested and motivated people in a room together actually creating and swapping ideas – no. Even Cisco Telepresence which is HDTV videoconferencing is but a pale shadow of being there – the small time lags, the whole booking in advance thing, it’s crap compared to meatspace, though it’s great compared to an audio conference, or nothing. A lot better than nothing, but crap all the same compared with the best.

    I also suspect sound and vision are not the only signals used between people. I was a techy sidekick in a high level business meeting between a CEO who was putting one over an opponent in a weaker position, and smelled the sharp metallic smell of anger/fear in the adversary. The CEO picked that up a couple of seconds later and went for the kill – he was just a little bit further way and must have subliminally reacted to the cue as the aircon wafted the smell to him.

    The open – plan office was a step down in the working environment IMO

    In the late 1990s companies were all for saving money and the open-plan office was a way to save an awful lot of money associated with physically moving infrastructure and reorganising work groups. For me it was an unmitigated disaster because of the noise problem, and this was aggravated by the advent of the mobile phone. Voice quality on mobiles is poorer than on landlines so people tend to HOLLER AT THE TOP OF THEIR VOICES in an attempt to make up for the impaired signal quality. Most natural audio path impairments are helped by shouting but the problem with mobile phones is the inherent infidelity of the GSM codecs, which is particularly bad when the wanted signal is polluted by background noise. Like in an open-plan office, a train, a public space, indeed anywhere you find shouty mobile phone users. The transmission path can just about get speech through, add junk to that and there’s less left over for the wanted signal.

    I’ve been in small (ten man) offices where one of the occupants was involved in long landline phone altercations with their divorcing spouse, and while that was distracting, it was infrequent. An open plan office increases the statistical chance of serious disturbance far more, because there are far more people in earshot. I’d go as far as to say the use of mobiles for speech should be banned in open plan offices. Texting and non-voice communication started to alleviate this problem towards the end of my career.

    I’m also written code and part-benefited from being in a colocated group, though the interruption and noise problem is an issue for that kind of work. I have seen a different approach to the open-pan office in American IT offices, where high partitions are used, creating cubicles – the classic Dilbert cube farm. I’ve never actually worked in a cube open plan office so I don’t know if it helps with the noise problem.

    Unassigned hot-desking in an open-plan office

    One of the problems for companies is that while open plan offices make changes easier, it didn’t address the problem of utilisation, so, fortunately just before I retired, there was a move to unassigned desk allocation (hot-desking). There are some things that educate a drone that he’s no longer in tune with the world of work and needs to surrender it to younger folk, and hot-desking was one of these things for me. I did this in Canary Wharf, where you’re roll up with a laptop and log into your desk phone. The desk phone was an IP telephony device, which introduces half a second’s worth of lag into the conversation. Most people nowadays have learned to live with that because of the similar lag in a mobile phone but I always struggled, particularly when another participant in a phone conference was next to me on a mobile and I heard his speech through the air a full second before it came back from the conference bridge, which added its own half-second latency to the inbound mobile call.

    However, the main problems with hot desking were the simple things. Like where the hell is the bog on the floor I am today? How do people do coffee in this building? Where are the printers today – both physically, and having recognized them, how do I get connectivity to the suckers? Then if you’re trying to print something commercial in confidence you have to run a test print first. And so on. I found hot desking is a barrel of minor frustrations and time-wasting just-jobs, before you can actually start anything simply because it takes time to acquire situational knowledge in an unfamiliar work environment. Oh and office planners, allocating just four 8-seat meeting rooms for 300 people on a floor just sucks, okay?

    Homeworking

    I never did much homeworking, but observation of the reasons for people sending in an email WFH (working from home) showed me the most common reasons had to do with their children, though that wasn’t to say that in the case of some child-free colleagues I wouldn’t also reassign WFH to SFH (skiving from home). There was an increasing trend towards the telephone conference and I am all for people going home to do those so they don’t disturb other people who are actually trying to work in the office.

    The telephone conference has the advantage of being cheap. It has no other advantages IMO. In a meatspace meeting at least you have to look people in the eye while you are wasting their time, and in a video conference you can observe the sleeping participants, and it’s expensive enough to discourage excessive meetings. Indeed the only thing worse than a telephone conference is a telephone conference with shared powerpoint presentation, because of the waste of the first 15 minutes while everyone tries to connect to livemeeting and agrees that they have a common view of the presentation, which will then be read out to them anyway ;)

    Teleconferencing, virtual working, road warrioring, homeworking – form over function

    As communications got better interactions got worse, IMO. I spent a few years of my former life in videoconferencing – great big room setups like Cisco Telepresence as well as the sort of crummy video chat applications exemplified by Skype. All of these methods have a problem, they are a pale imitation of really being there. They work very well with a bunch of people who already know each other, are greatly motivated, and really want to be there. Skype is great for lovers and grandparents/children separated by continents despite it’s multisecond lag and inherent skankiness. These people really want to be in touch. But the impairments of the medium get more significant as more people are involved and the motivation is less. Do you really want to be thinking about work when your child is learning ABC or watching a sparrow? I’m been in enough meetings where Tom and Jerry would be a positive enhancement

    This

    This

     

    or this? no contest, IMO

    or this? no contest, IMO

    In the early days of virtual working people had to be really motivated to overcome the limitations of the technology, so though it was pretty crap it worked well in the world of work, because a) few people were using it and b) those people really wanted to use it. They were also usually smart enough to use the technology to share the results of their work, rather than to work together with people.

    Then technology became cheaper, bandwidth became cheaper and more ubiquitous, and companies concluded that if some is good more was better, and so it was rolled out more widely. At the same time it began to blur the personal space and work space part of people’s lives.

    What companies didn’t appreciate was that there was the risk of blowback. If they placed a greater claim on people’s time and commitment with an always on Crackberry virtual office, then they would start to find people’s childcare requirements encroaching on work time. Observation should have warmed them up to that – I’ve been in numerous phone conferences that had to have a break in transmission while a vocal child needed to be attended to, until it became possible for the conference chairperson to mute individual participants remotely. But that’s going to be the cost if people schedule phone conferences at 8am or 7:30 pm and demand people show up. They spread the working day, but received less commitment  in those hours. It appears that we have lost the years of industrial analysis that indicate you can’t run people at > 40 hours a week without productivity falling.

    Work – it’s not just about the results, It’s about the process, too, and Marissa has a point – homeworking stiffs collaborative processes

    I think I’ve got a sneaking respect for Meyer’s angle on this. There’s a lot to be said for meatspace when it comes to working with people. Humans are terrible multitaskers – we time-slice, but don’t have the information architecture that makes this virtually cost-free to a computer. Meatspace supports focus, and thins distractions. Being there shows commitment, and the bandwidth of face to face beats that of remote anything hands down.

    A valid counter to that is that real time interaction is usually only a small part of any knowledge job, and homeworkers often play this card in opposition to meatspacers. The problem is that it’s hellaciously difficult to predict when that face to face meatspace interaction needs to take place -  few creative projects have a regimented time flow. One fellow at work who was big on homeworking though he lived only five minutes on foot from the office (he was in his fifties but had a young daughter) did actually master this. If on a phone conference something wasn’t working clearly enough, then nine times out of ten he would put on his coat and start walking to the office, and be there face to face in 10 minutes.

    However, most home workers want to work at home because they want to live at a cheaper or better house further from the office, or they have childcare commitments, or both. They need advance warning – if only for the reason that they would need two hours to get to a face to face meeting!.

    There is a darker corollary to this. If you are in a job where meatspace really doesn’t offer an edge, then the logical conclusion of virtualisation ends in India, not the Home Counties. Homeworker employees may not want to press the point too hard, and consider how well you can accommodate the meatspacing zeitgeist in the years to come.

     

    Notes:

    1. apparently that’s Process, Bureaucracy and Jams, not Peanut Butter and Jelly
    25 Feb 2013, 6:15pm
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  • SIP and Sharesave Employee shares and Capital Gains Tax

    Now is the time to be thinking about capital gains tax, with the ending of the tax year. I have never had reason to be concerned about CGT before.  I’ve always done my stock market saving in ISAs apart from a rush of blood to the head in the dot-com bust. I do know one fellow who got into hot water at that time by making a shedload in the run-up, incurring a reasonable amount of CGT, which he struggled to pay because he, er, reinvested and got hammered in the bust. Ouch.

    Looming large is the accumulated detritus of decades at the coalface of The Firm, in particular the last ten years when I was trying to reduce my higher rate tax liability but wasn’t close enough to retirement to unleash the big bazookas of pension savings.

    If there’s one lesson to take away from this – Sharesave: Just Do It.

    I was always a fan of sharesave – nobody’s ever offered me a one-way bet on the stockmarket before or since, so I filled my boots.The trick with sharesave is to keep on turning up. Most of the time it’s a damp squib or a minor jolly down the pub, but every so often your boat comes in and you get a great one-way win on the stock market without eating the corresponding risk. Just do it, though how you do it depends on whether you can cancel previous schemes to get the lowest share price or have to spread yourself evenly across schemes. Many people get bored with the dry periods, it so happens that the boat came in just as I left The Firm – the profit on the last Sharesave is probably half of the total profit I made on sharesave while working there. In total over my career Sharesave paid me probably about a year’s final salary tax-free; over nearly twenty-five years working for The Firm that adds up to about a 4% pay rise across my working life.

    Obviously the statistics for another company will be different, what makes sharesave so unique is it’s a rolling one way bet on the share prices rising. You just can’t lose. Most people, sadly, saw no longer than the end of their noses, and having to do without £3000 a year out of post-tax pay for the first five years was too much to pay for the opportunity to jump at the chance of a 4% pay rise. After the first five years they can pay for succeeding Sharesaves from the proceeds of the first lot.

    To reduce HRT exposure as I crept into the HRT band I started with ESIP – a share incentive plan. You get to pay up to £125 per month into a share incentive plan, which immediately buys that much of shares in the FTSE100 firm I worked for. Later on they softened it to that I could make a lump-sum purchase of up to £1500 a tax year. This comes out of pre-tax pay, so as I was drifting into HRT it was the first obvious win. I got paid dividends on the shares as soon as I bought them, and had to hold for five years to avoid paying tax. I always religiously sold in the year after they came out of the embargo period, on the usual principle that as an employee you want the least additional exposure to the firm you work for, because if the firm has a hard time you get to lose your job and your savings at the same time.

    As the good people at Northern Rock or Enron discovered, for God’s sake don’t needlessly increase your strategic exposure to your employer while still employed with them. The tail risks are very nasty indeed. That’s obviously not what sharesave and ESIP are all about, but you have to watch your tail ;)

    The trouble with buying stock £125 at a time, is that the calculation for capital gains tax is really, really, hateful. Most of my gains are due to sharesave, buying at 70p and selling at about four times that. However, the pool of shares is polluted with all those itsy-bitsy ESIP purchases – in the round these roughly doubled, with dividend reinvestment and the 41% tax and NI bung added.

    I’ve only got shares in The Firm outside my ISA, so I will sell £10,000 of this lot this tax year, and a similar amount next year. Not all of that is a capital gain, of course, but mathematically the capital gain must be less than the annual CGT allowance of £10,600, and my disposal is of course less than four times the allowance too. One thing that was interesting from HMRC is that if you keep your shares in the share incentive plan until disposal there is no CGT to pay, however I was unable to work out if this applied to me as I don’t work for The Firm anymore. If you still work for the employer, and I know an awful lot of people at The Firm will have a big sharesave come out next year, assuming it doesn’t all go titsup, then it’s worth really understanding what HMRC mean here.

    Approved share incentive plans (SIPs) If you keep your shares in the SIP until you dispose of them, you will have no Capital Gains Tax to pay in respect of this disposal. If you keep the shares after you take them out of the plan and dispose of them later, your cost for capital gains purposes will be their market value on the date the shares leave the plan.

    It looks like if you sell your shares straight from the Equiniti SIP/Sharesave corporate nominee share scheme you don’t take a hit for CGT whatever the gain, but do please ask the Sharesave team because it isn’t 100% clear to me, but it might be useful to those of you still at the coalface ;) They usually hold a Q&A teleconference just before maturity which may be useful to attend.

    Selling my part-holding will give me the problem of having the vilest asset class of all, cash, which is rotting daily by the devaluing charlatans at the Bank of England.

    My, doesn't he look handsome. He's still a thieving SOB who wants to destroy the value of cash as quickly as possible, despite his good looks and clean-cut image.

    My, doesn’t our new Bank of England top dog look handsome? He’s still a thieving SOB who wants to destroy the value of cash as quickly as possible, despite his good looks and clean-cut image. That’s why Cash is not King…

    A year’s CGT allowance is conveniently about the same amount as an ISA allocation, but I already have funds allocated to that, so I will probably switch the proceeds for something tediously boring but not cash, like 60% Vanguard Lifestrategy and 20% Vanguard Europe and 20% gold just to observe the disgusting brutality that QE will do to the pound. The CGT clock will start ticking again on these unwrapped shareholdings, of course, but at least it’s an easier calculation than 60 monthly ESIP purchases ;)

    This will still leave me with a lot of The Firm’s shares, but brought down to a more manageable amount of only a third of my total holdings. The Firm fits well into a HYP, so once I have finished loading my ISA with savings I shall bed-and-ISA those unwrapped residual holdings of The Firm over a couple of years

     

    13 Feb 2013, 3:56pm
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  • I have always wanted to do this, in every office job I had…

    a pictures's worth a thousand words

    I’ve had this printer for more than 10 years, it was ratty when I got it, and it became increasingly reluctant to print on the other side of the paper without screwing it up if I fed it through again. Further investigation after it jammed all the time  showed the paper jam to be mid-printer, and applied either to the manual feed or to the tray feed.

    I have repaired printers before, but anything involving the paper feed seems to be so finely balanced between running right and jamming that I figured I had zero chance of success – the fault wasn’t obvious, like something broken off or loose. Getting spares for something 10 years old isn’t that likely either.

    So I extracted the memory and jetdirect network card, and took the opportunity to vent thirty years of frustration at recalcitrant office equipment by taking the bugger outside and smashing it on the ground, then laying into it with a spade. I do recommend taking the toner cartridge out first :) Yes, I did end up with a lot of small pieces to sweep up, but I felt so much better. And it all fitted into the bin after smashing it up too.

    In every office job I’ve had I’ve wanted to do this to the printer when the damn thing jammed with some report that was meant to be in yesterday, and now the itch is scratched. Office printers seem to have a knack for knowing the most inconvenient time to break down and a perverse dlight in using it.

    Funnily enough the HP Laserjet 5P that I originally bought in the last century for £600 (!) is still in service after more than 15 years with only one roller kit replaced. What will take that sucker down is the fact it only has a Centronics parallel port, and I haven’t seen one of those on a PC for years…

    10 Feb 2013, 7:08pm
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  • the real thing that we’re missing with the horse for beef swap is…

    …that nobody picked it up by tasting the difference. Even at 100% horse.

    NB not a post for committed vegetarians ;)

    where you're supposed to start with a beef lasagne

    where you’re supposed to start with a beef lasagne (OK so they’re actually dairy cows)

    It’s a rum old world, eh? One upon a time people knew what beef tasted like. I’ve knowingly eaten horse in France because I don’t have any hangups about it, and while I can see the generic big herbivore similarity it isn’t that close – much leaner and a stronger taste than beef.

    Nowadays we eat an awful lot of ‘mechanically recovered meat’ which is the processed to look like real meat. Take a look at Tesco sliced ham in packets. Looks real enough, apart from the occasional few mm hole where an air bubble in the process shatters the illusion. They even work hard enough to make it look like there is structure and differences in the regions of the ham, rather than the universal pink slime favoured in the fast food trade.

    Industrially processed food is crap. It doesn’t have to be for fundamental reasons, but it is crap for economic reasons. It favours the greedy and the money-grabbing, because it anonymises the product time and time again. Every time you test humans on the test

    What would you do if you knew nobody was watching

    You get the answer – anything to make life easier, make more money and to hell with concern for the health and safety of our fellow humans or abstract notions like animal welfare. Gordon Gekko doesn’t just occupy Wall Street – Greed is Good runs throughout business where suppliers don’t know and see their customers. This is just what you get if you Manage By Objectives rather than manage your firm by Values – you incentivise profit objectives, and you get it.

    Meat being of highest perceived value gets the most adulterated because that’s where the profit margin is. It’s not the only reconstituted product – I was intrigued to read in Fresh that baby carrots were pieces of full grown carrot sanded down ;)

    Just a really fit cow, really ;)

    Look at it as just a really fit cow;)

    In the long supply chains favoured by cheap industrial food, there is room for abuse all along the chain, from the US meat processors who can’t be bothered to butcher their carcasses properly so they wash them in ammonia to render the shit less hazardous to human health to the anonymous horse for beef swappers somewhere along the line to FindusTesco, Aldi et al.

    The trilemma – You can have it cheap.You can have it good. You can have it as it says on the tin.

    - but only one or two of those at a time, never all three. In all the hyperventilating and bizarre conspiracy theories, nobody has stopped to ask the simple question

    why the hell did nobody notice that the beef is a bit funny in this lasagne/burger whatever?

    The answer, sadly, is that very little industrial chow tastes of much, and very rarely does it taste of anything in particular. This is because the long supply chains mean that things aren’t fresh when they get to us, so much of what gives something taste has broken down, and the extensive mixing and grinding up makes what taste is left an amorphous average.

    Industrially raised meat starts off wrong because it does stupid things. You’ll observe the cows in the picture above are on grass, which is how humans have run cows for centuries. Most of the cows raised nowadays are fed on corn derived feed, often in massive feedlots like this one. You don’t get pictures of cows in cornfields because they never evolved to do that, and pasture fed cows taste better in terms of beef and milk products.

    The French still know that, insisting that Camembert AOC has to be pasture fed. So industrial food doesn’t exactly start off with the finest ingredients selected for their taste. There’s nothing fundamentally wrong in that if people want to buy cheap meat, but the fact it has little significant flavour makes substitution harder to observe. It’s been a long time since I’ve eaten a fast food burger, but I don’t recall it tasting particularly of beef. The Ermine dislikes relish and despises mustard, so the usual way of making fast food taste of something, ie to slather on sugary chemicals isn’t open to me.

    We have become so deracinated that much of our food is a step up from baby food. It’s been minced and ground and cut with fillers and pumped full of water and artificial taste improvers. To be honest if you’re going to eat industrial meat, perhaps it would be better to have it grown in a lab, rather than trekking the carcass thousands of miles from one part of the long supply chain to another.

    You, the consumer, can do something about this

    Don’t want to eat horse without knowing it? Stop being such a cheapskate. Meat is a piece of an animal’s body, and it should look like one.

    I knew it as a pig

    I knew it as a pig

    And you should know what your carnivorous treat looks and tastes like.

    I had some of this last night

    I had some of this last night

    Don’t eat it as burgers, or Mickey D’s or ready meals that can hide a multitude of sins. Avoid mince unless you get it from a butcher that you can trust; in the past they used to make it on the premises.In fact generally, avoid long supply chains, that means supermarkets, fast food, industrially produced food. Demand that your meat looks like a piece of animal.

    Shorten the supply chain for better taste

    If you want it to taste better then go local – shorten that supply chain and deal with people you can get to know and trust. That means taking more time about it and usually paying more money. In Ipswich I can recommend Lux Farm – I used to drive past their herd of belted Galloway cows every day, and the shop is on the farm, Eileen and her team are very helpful and they know their stuff – and they knew their stock when it was on the hoof. She won’t sell you horsemeat – I can guarantee you that. Even if someone swapped one of the cows for an old nag at the slaughterhouse it wouldn’t get to you, because she knows what her cows look like and they butcher the carcasses on the farm when they come back from slaughter. Even if they didn’t, she knows what beef smells and looks like. As an added bonus her beef tastes far better than the anonymous industrial beef from Tesco, because the cows are pasture-fed – you can see them on the side as you drive in. I’ve talked about Richardson’s smokehouse before – again, go local – there you can see the stuff being smoked out the back on your way in. It has flavour and distinctiveness. But it comes at a price premium.

    Take ownership and control

    Take some responsibility for what you shove into your gob. We got beef made out of horseflesh because we want it cheap. We also got here because we seem to be less able to accept that meat comes from animals these days, so the children’s market in particular hides the fact that this is a piece of animal. Unlike cats, humans aren’t obligate carnivores, so there’s a perfectly good, if more time-consuming and less flavourful IMO alternative.

    Milling meat finely into a puree lacks honesty, which is why it is so beloved of industrial food processors. So does pressing it into cute shapes so your kids don’t realise that this

    Dino chicken nuggets, WTF?

    Dino chicken nuggets, WTF?

    has a theoretical and intellectual relationship to this

    1302_chicken_IMG_7586

    Though it never pays to make the assumption unreservedly with industrial food products.

    Previous generations only ate meat once a week, it’s inherently more expensive than food from plants. If you want to eat it every day you’re either going to have to be rich or you’re going to have to accept industrial meat. Or follow Mrs Ermine’s advice and eat offal which is nutritious and cheap, but nowadays often thrown out or fed to cats and dogs.

    More regulation is not the answer

    The Grauniad, bless their cotton socks, recommend more regulation as the answer. I’m not so sure. Regulation just seems to encourage the ‘it’s not me, I wasn’t there, I wasn’t the only one, if it was me it was the fault of people i had no control of, and  lessons will be learneddefence. How do you make regulation stick across four countries and even more companies? What’s wrong with the regulation we have already – last time I looked it was illegal to pass one thing off as another. I’d say we need shorter supply chains and a bit more human integrity in those suppliers. It’s the sheer number of companies and subcontractors  that the ingredients are relayed through that is the problem – it is asking for trouble, and at each handover information is lost about where the food came from.

    Vertical integration is the only way to get enough control over the variables, and that fell out of fashion in the 1970s. The alternative is to shorten the supply chain by going local, buying from farmer’s markets and the like, but while than usually improves quality no end, it doesn’t come cheap.

    In the end this is the choice of the consumer. Want to eat a lot of cheap meat? You’re going to be eating industrial processed meat, and every so often you’re going to be eating something other than you think you’re eating. But hey, the price is right! What has happened is the problem described by Ellen Ruppel Shell in Cheap. Modern capitalism hollows out the middle ground and polarises the market, because like good little consumers we generally focus on the ‘for money’ side of the value for money equation, ignoring value. So we all crowd down the bottom end of the market, leaving a few intrepid souls who do care to hold up the top end of the market.

    Britain is a rich country, but we had better fresh food when we were poorer but didn’t buy everything from supermarkets

    Obviouly if you’re a top end consumer shopping at farmer’s markets or chi-chi London gourmet stores you’ll get much better food than we used to have in the 1960s and 1970s, but for the average British consumer quality has dropped – average and even poor consumers had access to better, fresher food then because the supply chains were shorter.

    Not so long ago we used to have a method that drew an acceptable balance between quality and price, indeed even offering a range of price points that the customer could choose between, even for a big world city like London where I grew up. London used to have wholesale markets – Smithfield for meat, Covent Garden for fruit and veg and Billingsgate for fish. These supplied the butchers, greengrocers/market stallholders and fishmongers where my mother bought food in the 1970s.

    These markets and retailers are virtually irrelevant to retail buyers now, because from the 1980s onwards we decided that food wasn’t something we wanted to spend time bothering with, either preparing or taking time to buy, so we turned to the supermarkets to supply our food. And so the inexorable slide down in quality and, to be fair, price, began. Supermarkets taught us to value looks and convenience over quality and taste, because this is what they could deliver, consistently and to a price. They pretend to care about quality, but it is more consistency and ease of handling they value. If you actually sit down and take it out of the packaging, there’s not that much between most ‘value’ and ‘taste the difference’ ranges in terms of taste.

    I don’t know who the London markets supply now, but they seem a shadow of their former selves in the London I grew up in – I went to see one once. The functions they provided now go on in anonymous warehouses and distribution points by the sides of European motorways. No Smithfield market trader would dare try and pass off horse as beef in the 1960s and 70s, because the butchers he was selling to knew what beef looked and smelled like. If caught out, his reputation would be trashed in the market and he’d be ruined.

    Some of the outrage and hoo-hah about the horsemeat scandal are because it shines an unkind light on the deracination of modern industrial food. It’s generally serviceable, it is cheap-ish, it doesn’t usually make anybody ill, but it isn’t good. That fact that nobody seems to be asking the question why this has to be picked up by DNA testing rather than those strange knobbly bits all over people’s tongues shows our expectations of industrial food aren’t really that high. In that case, does it really matter what it’s made of? Perhaps we need to stop kidding ourselves, and just label things ‘meat’ or ‘herbivore mammal’ and ‘pig’ and accept whatever the market can bring cheapest at the time. It’s not like anyone seems to be able to tell the difference what a ready meal is really made of ;)