Telework

I used to commute to Brussels by train. The usual experience: full compartments, sometimes people had to stand if they didn’t want to wait for the next train.

When I went to a conference about the financial crisis (slides) last month, the train was almost empty.

As recently as five years ago, few companies allowed telecommuting. If your supervisor was OK with it, you were lucky to work from home once a week.

Nowadays, almost everybody realizes that a lot of jobs don’t need the physical presence of workers in some central office. With just a laptop, a VPN, and a headset you’re ready to collaborate with your colleagues from the kitchen table.

Credit where credit is due: banks were among the first to institutionalize telework.

Show me the money, nerd!

Finance attracts lots of smart people. But that doesn’t mean you’ll make money from their ideas.

Here are some examples of why listening to supposedly smart analysts can be bad for your financial health:

  • Peter Cauwels and Didier Sornette, researchers at ETH Zurich, declared in 2011 that Facebook was worth 15 billion dollars.

Continue reading “Show me the money, nerd!”

A decade after Lehman fell: the best articles

A selection of the best articles I’ve read on the 10th anniversary of September 15, 2008.

Can we survive the next financial crisis?

Why claims that the 2008 bailout was a “success” should make you angry

Crisis firefighters still uninterested in fire prevention

The broken conversation about financial regulation

10 jaar bankencrisis (in Dutch)

So you want to be a banker

Want to be a lawyer? Go to law school.

Want to be a doctor? Go to med school.

Want to be a banker? Go to… bank school?

You don’t have to study economics to get into banking. Many bankers have degrees in philosophy, geography, mathematics, civil engineering, law, or history.

Bank managers don’t care that their employees have studied Old French poetry or Kant’s Kritik der reinen Vernunft. To employers, a university degree indicates perseverance and an ability to learn new things.

However, there are some specific things you can learn to get ahead. The following four skills will boost your career in finance. Continue reading “So you want to be a banker”

Ten years after Lehman Brothers

The ten year anniversary of Lehman Brothers’ bankruptcy is fast approaching. Some quick thoughts on what has changed and what we’ve learned over the past decade, with a focus on Europe.

  1. Banks are much safer now than they were in the summer of 2008.
  2. There’s a remarkable lack of entrepreneurship in banking. A few fintechs offer payment services, but payments are only a small part of banking. Where are the new banks?
  3. Related to point 2, and something I’ve changed my mind about over the years: bailing out the banks was the right thing to do. I highly doubt that we would have experienced much creative destruction by letting the financial system collapse. That being said, the way the bailouts were done was horrible.
  4. The way the European establishment handled the euro crisis was an abomination. Fiscal and monetary coordination across Europe would have resulted in lower unemployment, lower debt, lower taxes.
  5. Notwithstanding the importance of money in people’s daily lives, financial literacy is still limited.

Down to the corporate side!

The Up to the Mountains and Down to the Countryside Movement was a government policy in the People’s Republic of China during the 1960s and 1970s. From Wikipedia: “privileged urban youth [were] sent to mountainous areas or farming villages to learn from the workers and farmers there.”

A lot of economists and economic historians study aggregated data, e.g. gross domestic product, inflation, trade flows, or productivity.

Such a high level approach is valuable. However, the macro perspective by definition misses the details. A macroeconomist will typically explain productivity growth by referring to increases in (human) capital and total factor productivity. But how exactly do concrete changes lead to higher output? Continue reading “Down to the corporate side!”

The most devastating cyberattack in history

Wired has a great article (warning: long but worth your time) on last year’s cyberattack. It started as part of the Russian cyberwar against Ukraine. Almost immediately, companies around the world became collateral damage. Andy Greenberg’s Wired story highlights the impact on shipping giant Maersk.

Just to illustrate the vulnerability of IT systems:

Maersk’s 150 or so domain controllers were programmed to sync their data with one another, so that, in theory, any of them could function as a backup for all the others. But that decentralized backup strategy hadn’t accounted for one scenario: where every domain controller is wiped simultaneously. “If we can’t recover our domain controllers,” a Maersk IT staffer remembers thinking, “we can’t recover anything.”

The total damage caused by the attack has been estimated at $10 billion…