DANSKE BANK
Danske Bank is Denmark's largest financial institution. It is also in trouble, as today's events have shown; Eivind Kolding, its Managing Director, was fired this morning with immediate effect.
Mr. Kolding originally came to Danske Bank from the shipping conglomerate A.P.Møller Mærsk, which (wrongly, in my view) still has a sizeable shareholding in the bank and tends to informally vet its big decisions. But he came as Chairman, not Managing Director, and his major task was to find a replacement for the then Managing Director, who had been at the helm for more than a decade. In one of those slightly bizarre happenings (think Dick Cheney and the Vice Presidency) the selection committee with Mr. Kolding at its head could find nobody who was suitably qualified. Instead, they came up with him as the best person to lead the bank out of the financial crisis, even though he had absolutely no banking experience. He started work in February 2012 with the unanimous backing of the Board, a Board in which the then Deputy Chairman moved up to become Chairman.
It is that Board which today unanimously fired Mr. Kolding on the grounds that, er, he had no banking experience. When reporters pointed out that he now in fact had more banking experience than he had had when that same Board appointed him eighteen months ago, there was a lot of wriggling and weasel words. Basically, they had made a big mistake before; better to accept that and try something different. The new man, Thomas Borgen, is an insider, who probably felt hard done by, when he was passed over for the top job back in 2012.
Whether he will do a better job than Mr. Kolding is uncertain. Danske Bank has the predominant market position in Denmark, but it is also suffering from a terrible reputation, with customers leaving it in droves. There has also been a marked turnover of personnel amongst the upper echelons of the firm. Neither factor makes for a happy workplace.
During the noughties, Danske Bank enjoyed a position both of knowing how to manage money, and of knowing better than the average Dane. Catastrophic investments, notably in Ireland, big losses and now personnel disputes, have shredded that reputation. Yet another example of hubris in the financial sector.
Walter Blotscher
Tuesday, 17 September 2013
Sunday, 15 September 2013
THE COST OF AGEING
A theme of this blog has been the looming crunch in Denmark (and elsewhere) caused by the growth in the number of old people. The number of 80-year olds here, for example, is projected to increase by 30% over the next 10 years, from 233,000 to 304,000. Looking after 80-year olds is expensive.
Just how expensive is shown by new figures. Annual spending on health and social care costs, on average, is around Dkr.26,000 for someone aged 30, a figure that changes very little over the next twenty years or so. After 50, social care costs remain unchanged, but health care costs begin to rise, so that the annual total is around Dkr.40,000 on average for a 60-year old.
Thereafter, costs explode. It costs Dkr.56,000 a year to look after a 70-year old, Dkr.104,000 for an 80-year old and a whopping Dkr.163,000 for a 90-year old. Social care in their situation costs more than the total cost for a 70-year old.
Given that the pensioners of the future have already been born, this is is not a problem that is going to go away. What is beginning to happen is the start of a long-delayed debate about what older people can expect to receive from the state in terms of support, and what should be provided by either the elderly themselves or their relatives. The generation in their sixties has a very nice life; money in their pockets, no obligation to work any more, good health and a long (30-year) life expectancy. Should they expect the state (i.e. the rest of us, through our taxes) to continue to support them in that life, or should they do more themselves? That debate will be sharp-edged, perhaps bitter, at times; but it is good that it has begun.
Walter Blotscher
A theme of this blog has been the looming crunch in Denmark (and elsewhere) caused by the growth in the number of old people. The number of 80-year olds here, for example, is projected to increase by 30% over the next 10 years, from 233,000 to 304,000. Looking after 80-year olds is expensive.
Just how expensive is shown by new figures. Annual spending on health and social care costs, on average, is around Dkr.26,000 for someone aged 30, a figure that changes very little over the next twenty years or so. After 50, social care costs remain unchanged, but health care costs begin to rise, so that the annual total is around Dkr.40,000 on average for a 60-year old.
Thereafter, costs explode. It costs Dkr.56,000 a year to look after a 70-year old, Dkr.104,000 for an 80-year old and a whopping Dkr.163,000 for a 90-year old. Social care in their situation costs more than the total cost for a 70-year old.
Given that the pensioners of the future have already been born, this is is not a problem that is going to go away. What is beginning to happen is the start of a long-delayed debate about what older people can expect to receive from the state in terms of support, and what should be provided by either the elderly themselves or their relatives. The generation in their sixties has a very nice life; money in their pockets, no obligation to work any more, good health and a long (30-year) life expectancy. Should they expect the state (i.e. the rest of us, through our taxes) to continue to support them in that life, or should they do more themselves? That debate will be sharp-edged, perhaps bitter, at times; but it is good that it has begun.
Walter Blotscher
Friday, 13 September 2013
SYRIA (6)
I suspect that only a handful of people in the whole world know both who carried out the chemical weapons attack in Syria and why, and I don't think that that handful includes politicians. Civil wars are messy affairs at the best of times, and it is more than a possibility either that it was the work of a low-level commander acting on their own initiative, or a simple blunder. Politicians love to see patterns and clear motives in all things; sometimes there just aren't any.
Being both a trained lawyer and a successful politician, President Obama loves patterns more than most and quickly found himself in the unenviable position of promoting that "something must be done". Quite what that something would be was never quite made clear, not least because there were huge risks involved. Hitting the Syrian regime's remaining chemical weapons stockpiles would probably kill as many people as in the original attack; hitting other military targets, which are often situated in civilian areas, would still result in "collateral damage".
Thankfully, the something has not happened, partly because the British Parliament voted against David Cameron's recommendation (the first time a British Government has lost a vote on a matter of war and peace in more than two centuries), and partly because the President decided to ask Congress for support before he acted. That gave a window of opportunity, which the Syrian Government and their Russian allies have gratefully exploited. Syria, one of the few countries in the world which is not a signatory to the U.N. convention banning the use of chemical weapons, promptly signed up to it, and agreed to hand over its existing stocks, through Russia, to the U.N.
This is a smart move by the Syrians, for two reasons. First, chemical weapons being tricky things, it will take a long time to sort out the mechanics and details; verification, transportation, security etc etc. Secondly, while all this is taking place, it distracts attention from the civil war which is still ongoing and which is being waged with ordinary weapons. The Government thinks it is winning this war, so by the time the world's diplomats have finished discussing chemical weapons and turn their attention back to ordinary ones, they will be in a position to negotiate with the rebels from strength.
I have just finished reading C.V.Wedgwood's history of the Thirty Years War. The Peace Congress that would eventually end it opened on 4 December 1644. This was thirty two months after the date originally fixed by the delegates for its start, and forty six months before the date the peace treaties were eventually signed. During this seven-year period, the war continued as before, as each side sought to use success on the battlefield to extract concessions at the negotiating table. Only when the exhausted parties realised that neither side was ever going to win a comprehensive victory could the necessary compromises be made. I said in my previous post on Syria that the parties there were not yet ready to compromise. So the next months (and years) will probably involve lots of high-level chemical weapons talk, and lots of low-level killing. As in seventeenth century Germany, the real losers will be ordinary Syrians.
Hegel once said that the only thing we learn from history is that we learn nothing from history. I agree.
Walter Blotscher
I suspect that only a handful of people in the whole world know both who carried out the chemical weapons attack in Syria and why, and I don't think that that handful includes politicians. Civil wars are messy affairs at the best of times, and it is more than a possibility either that it was the work of a low-level commander acting on their own initiative, or a simple blunder. Politicians love to see patterns and clear motives in all things; sometimes there just aren't any.
Being both a trained lawyer and a successful politician, President Obama loves patterns more than most and quickly found himself in the unenviable position of promoting that "something must be done". Quite what that something would be was never quite made clear, not least because there were huge risks involved. Hitting the Syrian regime's remaining chemical weapons stockpiles would probably kill as many people as in the original attack; hitting other military targets, which are often situated in civilian areas, would still result in "collateral damage".
Thankfully, the something has not happened, partly because the British Parliament voted against David Cameron's recommendation (the first time a British Government has lost a vote on a matter of war and peace in more than two centuries), and partly because the President decided to ask Congress for support before he acted. That gave a window of opportunity, which the Syrian Government and their Russian allies have gratefully exploited. Syria, one of the few countries in the world which is not a signatory to the U.N. convention banning the use of chemical weapons, promptly signed up to it, and agreed to hand over its existing stocks, through Russia, to the U.N.
This is a smart move by the Syrians, for two reasons. First, chemical weapons being tricky things, it will take a long time to sort out the mechanics and details; verification, transportation, security etc etc. Secondly, while all this is taking place, it distracts attention from the civil war which is still ongoing and which is being waged with ordinary weapons. The Government thinks it is winning this war, so by the time the world's diplomats have finished discussing chemical weapons and turn their attention back to ordinary ones, they will be in a position to negotiate with the rebels from strength.
I have just finished reading C.V.Wedgwood's history of the Thirty Years War. The Peace Congress that would eventually end it opened on 4 December 1644. This was thirty two months after the date originally fixed by the delegates for its start, and forty six months before the date the peace treaties were eventually signed. During this seven-year period, the war continued as before, as each side sought to use success on the battlefield to extract concessions at the negotiating table. Only when the exhausted parties realised that neither side was ever going to win a comprehensive victory could the necessary compromises be made. I said in my previous post on Syria that the parties there were not yet ready to compromise. So the next months (and years) will probably involve lots of high-level chemical weapons talk, and lots of low-level killing. As in seventeenth century Germany, the real losers will be ordinary Syrians.
Hegel once said that the only thing we learn from history is that we learn nothing from history. I agree.
Walter Blotscher
Wednesday, 11 September 2013
ARRANGED MARRIAGE
Would you, living in a developed country which allows you to take decisions about your own life, voluntarily marry someone, whom you had never seen before you entered the town hall on the day of the wedding? That is exactly what is happening in Denmark, in a slightly bizarre combination of reality television and social experiment.
Four experts, a priest, a sexologist, a relationship therapist and an anthropologist, have scientifically matched three couples from a group of about 25 singles in their late twenties. The deal is that they have to get married without seeing each other before the wedding, and live together as man and wife for a minimum of four weeks. If at that point in time they can't stand each other, then they can get divorced. Adding to what must be a huge amount of natural pressure, the whole thing is filmed for the benefit of the rest of the population.
I missed episode 1, which dealt with the matching. Episode 2 this evening covered the wedding itself and the party afterwards, complete with in-laws and speeches. It was at the same time both slightly toe-curling and fascinating. My wife, who watched it with me, thinks that one them could last and possibly two. Time will tell.
Walter Blotscher
Would you, living in a developed country which allows you to take decisions about your own life, voluntarily marry someone, whom you had never seen before you entered the town hall on the day of the wedding? That is exactly what is happening in Denmark, in a slightly bizarre combination of reality television and social experiment.
Four experts, a priest, a sexologist, a relationship therapist and an anthropologist, have scientifically matched three couples from a group of about 25 singles in their late twenties. The deal is that they have to get married without seeing each other before the wedding, and live together as man and wife for a minimum of four weeks. If at that point in time they can't stand each other, then they can get divorced. Adding to what must be a huge amount of natural pressure, the whole thing is filmed for the benefit of the rest of the population.
I missed episode 1, which dealt with the matching. Episode 2 this evening covered the wedding itself and the party afterwards, complete with in-laws and speeches. It was at the same time both slightly toe-curling and fascinating. My wife, who watched it with me, thinks that one them could last and possibly two. Time will tell.
Walter Blotscher
Tuesday, 10 September 2013
CARDBOARD BOXES
The cardboard box is a wonderful invention. By itself, it is very light and easily portable; but when it's opened out, the flaps fitted under each other, and sticky tape applied to the joints, it is surprisingly sturdy. And the rectangular shape makes it ideal for putting them on pallets and fitting them into containers.
I have had a lot of experience of all the above during the past couple of days. The old seats from the local cinema had to be dismantled into their component pieces, packed in cardboard boxes, put on pallets, shrink-wrapped and sent somewhere else in the world. I am not sure who would want them, but apparently someone does.
Walter Blotscher
The cardboard box is a wonderful invention. By itself, it is very light and easily portable; but when it's opened out, the flaps fitted under each other, and sticky tape applied to the joints, it is surprisingly sturdy. And the rectangular shape makes it ideal for putting them on pallets and fitting them into containers.
I have had a lot of experience of all the above during the past couple of days. The old seats from the local cinema had to be dismantled into their component pieces, packed in cardboard boxes, put on pallets, shrink-wrapped and sent somewhere else in the world. I am not sure who would want them, but apparently someone does.
Walter Blotscher
Monday, 9 September 2013
WRESTLING
It is hard to imagine a more Olympic sport than wrestling. It was part of the games back in Ancient Greece, and has continued to be a part ever since the games were reinstated in 1896. However, in a shock move in February, it was dumped from the programme after the Rio games in 2016, owing to various misdemeanours in its administration and policies.
In a partial repieve, it was asked to plead its case for reinstatement in the 2020 and 2024 games in competition with squash (trying for inclusion for the very first time) and a combined baseball/softball. At the IOC meeting this weekend which gave the 2020 games to Tokyo, it was announced that wrestling had won.
And rightly so. I say this, even though squash was my main sport for 20 years. Ideally, both should have been included; but if there was only room for one, then it should be wrestling. After all, they didn't play squash in Ancient Greece.
Walter Blotscher
It is hard to imagine a more Olympic sport than wrestling. It was part of the games back in Ancient Greece, and has continued to be a part ever since the games were reinstated in 1896. However, in a shock move in February, it was dumped from the programme after the Rio games in 2016, owing to various misdemeanours in its administration and policies.
In a partial repieve, it was asked to plead its case for reinstatement in the 2020 and 2024 games in competition with squash (trying for inclusion for the very first time) and a combined baseball/softball. At the IOC meeting this weekend which gave the 2020 games to Tokyo, it was announced that wrestling had won.
And rightly so. I say this, even though squash was my main sport for 20 years. Ideally, both should have been included; but if there was only room for one, then it should be wrestling. After all, they didn't play squash in Ancient Greece.
Walter Blotscher
Sunday, 8 September 2013
NAIROBI
I went to Nairobi on business last week. It was a short, but tough, trip, since I flew from London overnight on Sunday and flew back overnight on Tuesday. The seats on Kenya Airways' 777 were a lot better than those on Ryanair's 737s, which is what I am used to, but it still left me with cricks in my neck and a lack of sleep.
It was my first time back in Africa since I left Tanzania at the turn of the century, and it was amazing to be able to re-experience those peculiarly African things that you don't get in Denmark. Interminable form filling at the airport; people selling newspapers on the motorway in the middle of the traffic; matatus; cold Tusker beer; mud roads in the middle of the city; the mix of Swahili and English; rubbish everywhere; ordinary people's friendliness; the blinding colour of bougainvillea and other flowers; scaffolding made from bamboo poles.
Nairobi is not cheap; the rack rate at our hotel on the road to the motorway was a whopping US$270 a night. However, because we were working with the airline, we got the crew rate, which was a more digestible US$95. They also need to do something about the traffic, which is appalling. A light railway down the middle of the motorway to the airport would be my suggestion, though I doubt that it will happen any time soon.
I haven't really spoken Swahili for 13 years. But after a couple of hours, I could feel the gears in my brain beginning to creak, and by the end I was managing a conversation with the taxi driver on the way to the airport. Enough to make me want to come back again before too long.
Walter Blotscher
I went to Nairobi on business last week. It was a short, but tough, trip, since I flew from London overnight on Sunday and flew back overnight on Tuesday. The seats on Kenya Airways' 777 were a lot better than those on Ryanair's 737s, which is what I am used to, but it still left me with cricks in my neck and a lack of sleep.
It was my first time back in Africa since I left Tanzania at the turn of the century, and it was amazing to be able to re-experience those peculiarly African things that you don't get in Denmark. Interminable form filling at the airport; people selling newspapers on the motorway in the middle of the traffic; matatus; cold Tusker beer; mud roads in the middle of the city; the mix of Swahili and English; rubbish everywhere; ordinary people's friendliness; the blinding colour of bougainvillea and other flowers; scaffolding made from bamboo poles.
Nairobi is not cheap; the rack rate at our hotel on the road to the motorway was a whopping US$270 a night. However, because we were working with the airline, we got the crew rate, which was a more digestible US$95. They also need to do something about the traffic, which is appalling. A light railway down the middle of the motorway to the airport would be my suggestion, though I doubt that it will happen any time soon.
I haven't really spoken Swahili for 13 years. But after a couple of hours, I could feel the gears in my brain beginning to creak, and by the end I was managing a conversation with the taxi driver on the way to the airport. Enough to make me want to come back again before too long.
Walter Blotscher
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