Sunday, August 24, 2014

The species imbalance in Dublin zoo

Marilyn and I paid a visit to Dublin zoo recently. This is a well organised place with friendly staff, much improved enclosures emphasising spaciousness (my last visit was some years ago), excellent, reasonably priced cafes and lots of clean, accessible toilets.

The animals themselves were, of course, the main attraction. My personal favourites are the big cats and I was gratified to see a new arrival there in the form of a lion cub. Three tigers, two females and a male, were magnificent. One of the she-cats let the big boy know that his attentions were not welcome (she was not, apparently, in the mood) by baring her fangs and sending a visceraly terrifying growl in his direction.

The only grating part of the experience was the glaring overabundance in the members of one particular species on the day we were there. According to its website, when all the inmates are added up, they amount to around 400 individuals. This includes everything from the Pantheras leo, the lions, through the Nile crocodiles (Crocodylus niloticus) to the rose tarantula (Grammostola rosa).

On the other hand, there must have been very many thousands of the species Homo sapiens in attendance. During the course of a year, over one million of this biped type take it upon themselves to go to Dublin zoo to look at the other, captive animals. I like to think that the more permanent occupants get at least some stimulation from observing the observers.

But the numbers are grossly imbalanced, whatever way one looks at it. Three tigers, no matter how well looked after, placed in the context of so many humans is very sad indeed. And this feeling is not assuaged by the thought that Dublin zoo is not their natural habitat because, in the wild, many of these superb examples of the process of evolution are threatened with nothing short of extinction.

The incredible explosion of the human population on the planet is in the published data and one can debate the sustainability or otherwise of this situation, the theories of Malthus and the possible culpability of mankind in the Global Warming phenomenon, but the juxtaposition of human visitors with the pathetically few members of a small number of other species that can be seen in Dublin zoo brings home better than anything else the terrible population imbalance that has taken place on earth.

Friday, October 11, 2013

A TA lesson in trend change. Learn by doing

Recognising trends and, in particular, when a trend change takes place, is fundamental to trading.

Thursday, August 2, 2012

Sean Quinn and his place in history

We often like to laud the memory of the giants that bestrode the world stage, such as Napoleon Bonaparte and our own Hugh O’Neill, Earl of Tyrone. The passage of time tends to eliminate the memory of certain of their typical characteristics, like, for example, a tendency to regard the law as something that can be safely ignored until it is rigidly enforced, or to be above serious consideration of the rights and feelings of others. It is the inspiration of their courage and daring that is valued, and whatever contributions they made as a beneficial side effect of their drive and ambition.

The human condition has produced such examples in every generation, so why should we be surprised when they crop up in ours?

In the meantime we have had the benefit of experience and, most significantly, the development of strong systems of government that owe nothing to wealthy individuals or groups, and everything to the mass of the people. These things should, in theory at least, result in regulation, and its enforcement, that would curb the excesses of those who stand out, whether in business or politics.

So why do we not hear more of the one clearly identifiable failure of regulation that led to the Sean Quinn collapse: the totally irrational provision that allowed Contracts For Difference (CFDs) to be immune from the disclosure regulations on the acquisition of company shares? Imagine what the outcome might have been if the ordinary regulatory rules applied to these and other derivatives? Sean Quinn would have been saved from his hubris because he would not have been able to secretly acquire even a fraction of the 25% stake in Anglo Irish Bank he had reached when the bubble burst. He would now remain, albeit somewhat diminished, a national figure of whom we could all be proud as the man who broke the monopolies in cement manufacture and insurance in Ireland, and who brought very significant employment to those regions around the border where it was badly needed.

We would have had, in the modern parlance, a true win-win situation.

Sunday, July 29, 2012

In praise of Sean Quinn

This article appeared in the July 2011 edition of Business Plus magazine

by Seamus McKenna

We are undergoing an extraordinary period here in Ireland, the nature of which is further illuminated by the situation at Quinn Insurance Group, which is coming out of administration after the announcement of a sale to Liberty Mutual / Anglo Irish bank following serious losses. 

At Quinn, the administrators have crystallised large losses by taking a view, on the advice of a number of actuarial companies, on the likelihood of claims arising from policies that had been written prior to the administration period. Quinn’s strategy of managing its risk up to and beyond the point of claims being made has apparently been abandoned by the administrators.

To explain this we need to remember where Quinn Insurance came from and what the situation was like for client companies that needed cover for employers’ and public liability, particularly those in the construction industry, before its arrival. Then, certain bad features dominated such business. One was a claims culture, encouraged by the policy of insurers of allowing the most spurious of claims on the basis that to contest them would risk incurring legal costs beyond the value of the claim. Such claims were cynically settled in the knowledge that future premiums could be loaded with their costs. No doubt the actuaries had run the numbers and advised that this was the best way to deal with the matter.

What the insured, the people and firms who actually footed the bill, found to be most frustrating was that they had no say in whether the claim should be contested or not. In order to get cover in the first place you had to sign away your rights to challenge all claims, to the insurance company.

Quinn changed all that. Firstly, if you were in business and you wanted insurance to cover liability for accidents in your factory or on your site, you had to submit to an audit of your Health and Safety arrangements by an H&S consultant employed by Quinn. If you did not measure up you did not get cover, at least not until you had convinced the consultants and the company that you were compliant. All this was in addition to the attentions of inspectors from the government’s Health and Safety Executive (HSE). It became easier to comply than not. This reduced accidents, which allowed Quinn to charge lower premiums, made for happier employee representatives and, for those with the wit to appreciate what was going on, more content site operatives.

The second string to Quinn’s bow was to make it policy to dispute the payment of each and every claim. Certain observers have condemned Quinn’s diligence in investigating damages on the grounds that genuine claimants were tarred with the same “claims culture” brush as those who set out to defraud, and often considered themselves to be unfairly hounded as a result. However, it was a breath of fresh air for the industry.

Of course, Sean Quinn didn’t just run an insurance company. While the contribution he has made to manufacturing and other employment in and around the border region is well documented, he also broke the monopoly that existed in the cement industry in Ireland. Certain other operators had attempted to deal with the situation by importing cement, but its bulky, relatively low value to weight nature made this a difficult exercise. Once again, the construction industry had been the direct loser up to Quinn’s arrival on the scene. Indirect losers would include every entity that requires building for its operation. Costs for providing schools and hospitals, as well as houses and offices, were far higher than they needed to be before competition arrived in the supply of such a basic building material as cement.

Manufacturing cement is a highly capital intensive undertaking. Therefore the risk involved in entering the business is considerable, and would explain how the monopoly existed in the first place. At the stage in Quinn’s career when he started Quinn Cement, it would have taken unique courage to start up such an operation. At the time, all commentators knew this and applauded his actions. Then of course, risk was “on” and real entrepreneurs, who are characterised by risk taking, were heroes.

Now risk is “off”. The business world that Sean Quinn occupied in Ireland is largely in the hands of the receivers who are, to be fair, trained and conditioned to remove risk from the situation to the greatest extent possible. One might as well castigate a rabbit for eating a lettuce. It is what they do.

Business owners, large as well as small, up and down the country, applauded Sean Quinn not only for creating competition in areas where it was badly needed, but also for showing the way in terms of taking your courage in your hands and getting on with the business.

Tuesday, June 12, 2012

Can Europe help us fix our public health service?

Long waiting lists for elective surgery, overworked A & E departments and in-patients having to be accommodated for long periods on hospital trolleys are the kind of stories we keep hearing about in relation to the Irish public health service. Of course these things are unacceptable. But bad as they are, a letter to the editor of the Irish Times on May 27th 2012, from a GP, has described a situation that should be made a criminal offence when and if a culprit can be identified.

The letter indicates a level of inequality that simply should not exist in any country, developed or otherwise. It illustrates that ability to pay and not need is the criterion for hospital treatment here in Ireland. Read it here.

There are also the inadequate care services in Ireland for those who suffer from Cystic Fibrosis, despite the fact that we are among the countries with the highest incidence of this condition. These have been well documented on many occasions by Orla Tinsley.

The letter above prompted me to do some research. I was able to locate a report on European health services that seems detailed and is up-to-date. It’s from a Swedish benchmarking group called the Health Consumer Powerhouse, it’s called “Euro Health Consumer Index 2012”, it’s by Arne Bj√∂rnberg, Ph.D., and it can be accessed here in .PDF format.

While inequality of the type highlighted in the letter to the Irish Times as it relates to Ireland is not dealt with specifically in the report, it does examine the issues of waiting lists and the cost of health care on a per capita basis in a total of 34 countries, the majority of them within the EU. In relation to Ireland, two graphs stand out. The one for waiting list times shows Ireland six places away from being the worst out of the total of 34. At the best end of the list lie Switzerland, Belgium, Germany, The Netherlands, Denmark, France, Austria, Finland and Sweden, with the lowest waiting times. But here’s the thing: In the graph that shows healthcare spend per capita, Ireland is right up there near the top along with Denmark, Germany, Belgium, Austria, The Netherlands, Switzerland, Norway and Luxemburg.

The author of the report has the following to say about waiting times:

2.3 Major non-acute operations < 90 days

What is the interval between diagnosis and treatment for a basket of coronary bypass / PTCA and hip/knee joint? It is difficult to avoid the observation that for countries, which do have official waiting time statistics (Ireland, Sweden, UK etc), this is in itself a not very flattering circumstance. Countries such as Germany, where waiting times tend to vary in the 2 – 3 weeks range, have never felt the urge to produce waiting time data, for principally the same type of reason that Madrid has less snow-ploughs than Helsinki”.

A fair comment, but one is still left with the belief that pure inequality, as opposed to typical waiting times, is unique to Ireland, at least within the EU. This is supported by anecdotal evidence from people who have experienced public healthcare in France, Belgium, The Netherlands and Germany.

Once again one is prompted to ask why there is such an antipathy to the EU on the part of the radical left wing here in Ireland. If they were real Socialists they would, surely, embrace Europe as an exemplar of equality and anti-discrimination, and not as something to be viewed with suspicion. If they were doing their jobs on behalf of the users of health services in Ireland they would be beating a path to Brussels to highlight the woeful inequalities that have been described here, and getting all available help to remedy the situation.

Monday, May 28, 2012

Vote YES on Thursday

Predictions about the effect the referendum on the Fiscal Compact this coming Thursday will have on austerity in Ireland are meaningless.

Those who are trying to convince voters that it will have any bearing at all on household charges, septic tank inspection fees, water rates or anything else of that nature are either dangerously delusional or shockingly dishonest.

What is objectively true is that Germany (Bunds [German government bonds] approaching negative yields), Finland, The Netherlands, Austria (unemployment: 4%) have taken control of their finances and are all in favour of the fiscal compact. They simply want other countries to agree to it so that when stimulus measures are put in place for the EU as a whole there will be no free riders. It's hard to blame them for that.

And they're the countries I want to be aligned with in the EU - not the ones that allow UK and US commentators to put us into awful acronyms like PIIGS.

Friday, May 25, 2012

What's the Irish left got against the EU?

It would seem that a large part of the left wing in Ireland is really, when all is said and done, against the idea of Ireland belonging to the European Union. 

Last week I took the left leaning members of the opposition to task for not making a lot more of the proposals that have been put forward by the Germans and the French for a Tobin tax. My point, which I do not seem to have done enough to get across, was that it was preferable to work with the EU on measures to raise revenue for economic stimulation instead of simply opposing fiscal discipline, as they have been doing. After all, a transaction tax on stocks and bond dealing should be close to the heart of any Socialist, and money borrowed, even for spending in the hope (and it would be a hope – borrowing and spending are not of themselves a guarantee of success) of generating growth, has to be paid back. In any event borrowing, as we know to our costs since the onset of the Great Financial Crisis, is dodgy under any circumstances.

Now I read in the Irish Times that Sinn Fein, in particular, has campaigned against every EU treaty that has been agreed to by Ireland over the last 25 years. Joe Higgins has always given the strong impression of a man that only agreed to become a member of the European Parliament so that he could work to undermine it from within. A new survey has also found that even a large percentage of traditional Labour party voters, 41%, intends to vote against the treaty, despite the strong endorsement of it from all Labour ministers in the current coalition government.

So what’s with the Irish left and the EU? In the UK, it’s the Conservatives who have the most Euro sceptic members, and the Labour Party is the one that is committed to taking a full part in Europe. In France, the newly elected President, Francois Hollande, a Socialist, might have used rhetoric in his election that will cause him to look for growth measures to go with the Fiscal Pact, but a Euro sceptic he most certainly is not. And Angela Merkel and her party, while supporting balanced budgets, are not afraid to put forward measures that will arouse the ire of capitalism (and should therefore expect to be embraced by Socialism), a good example being the aforementioned Tobin tax.

Perhaps opposition to Europe is a means our Socialists have decided on in order to differentiate themselves from other parties. This might have its attractions in providing a quick fix to gain electoral support in a deep recession, when voters are casting around for anything and everything that represents the status quo so that it can be punished, but it is not in the best interest of the country, nor, I would propose, even in the long term electoral best interests of the politicians concerned.