Dublin University’s financial newspaper

19 SEPTEMBER 2011 ISSUE 1 VOL 1

S

BY DAMIEN CARRMangaing Director

THE YIELD spread between Greek 10-year securities and similar Ger-man bunds widened as much as 50 basis points to a euro area record of 1,796 basis points on Friday. This comes as Eurozone leaders failed to reach any concrete agreement in Poland last week on how to handle a crisis many believe is fi nally reach-ing its endgame.

Of course this latest round of crisis talks did not need to yield the immediate results that many were

led to believe were necessary. While the fi fth instalment of the bail-out package needed to keep the coun-try economically afl oat is indeed in question, the country has no bonds maturing in September and so, for now at least, any decisions on the county’s fate can be safely post-poned.

Greek debt currently stands at over €350 billion. Latest estimates suggest the country’s coff ers will run dry on October 20th. If the coun-try cannot curb its spending it will not receive the next instalment of the loan and, despite assurances

a default is not on the cards, it will ultimately be faced with no other option.

With an average retirement age of 58, far below the OECD average, the country has huge public pen-sion liabilities. This, combined with an oversized government, a large military, and a growing trade defi cit

means curbing spending in excess of what has already been done will prove extremely diffi cult.

Market fears were exacerbated this week by German economic minister, Philipp Rosler who stated: “To stabilise the euro, we must not take anything off the table in the short run. That includes as a worst-

case scenario an orderly default for Greece”.

With the Greek opposition lead-er calling for a snap election and the Greek Prime-Minister cancel-ling a scheduled trip to the U.S. to deal with the ever growing crisis, the Greek tragedy looks to entered a new, darker chapter.

A Greek tragedy

BY OWEN BENNETTDeputy Editor

KWEKU ADOBOLI, a trader em-ployed by the Swiss bank UBS in London has been charged with fraud stemming from unauthor-ized trading, in a case likely to cost the banking giant over $2bn. Mr. Adoboli appeared in court on Fri-day morning and was subsequently remanded in custody ACCORDING TO the charges, Mr. Adoboli’s unauthorized trading took place between January and September of this year. The Nige-rian born English citizen worked for UBS’s global synthetic equities division, buying and selling com-modities. It is alleged that the trad-er “dishonestly abused that position intending thereby to make a gain for yourself.”

Mr. Adoboli wiped away tears as he appeared in the dock of the City of London Magistrates’ court. He spoke only to confi rm his name, age and address.

The charges leveled against Mr. Adoboli have raised grave questions

regarding risk management at the Swiss bank, with reports suggesting that bank chiefs only learned of his transgressions after he informed the bank of his unauthorized trans-actions. Analysts have questioned the banks internal monitoring sys-tem.

Mr. Adoboli has engaged the ser-vices of Kingsley Napley, the legal fi rm which also represented Nick Leeson, the rogue trader who fa-mously bankrupted Baring’s bank in 1995.

The case has placed UBS under intense scrutiny with both rating agencies and investors review-ing the bank’s stock. Standard & Poor’s said on Friday it is consider-ing downgrading the banks current A+ rating. Moody’s has confi rmed

UBS suff er $2 billion fraud lossBY DAVID KELLEHERContributing Writer

THE RACE for the Áras heated up this weekend with one new candi-date entering the fi eld and another returning to the contest.

On Friday evening, news fi l-tered through regarding the inclu-sion of Northern Ireland’s Deputy First Minister Martin McGuiness, who ended a week of speculation as to who Sinn Féin would fi eld in the election by being announced as the party’s nominee. During the weekend he was quick to gather the support of a small number of inde-pendents, which coupled with the support he already has from his own party, will give him more than the twenty Oireachtas signatures need-ed to offi cially be nominated. While many will say that McGuiness’ past

baggage makes him unelectable, others will be tempted by his politi-cal ability, and the fact he will add a new dynamic to a fi eld many feel is fi lled with lackluster candidates.

However there could yet be one more twist in the tale, with David Norris announcing he will once again seek the nomination during his Late Late Show appearance on Friday evening. It is likely the con-troversy over a letter written to an Israeli court in 1997 will haunt Nor-ris as long as he is in the contest, but if he is somehow able to secure the nomination by the deadline of the 28th of September then anything is possible.

If either David Norris or Martin McGuiness can make signifi cant in-roads into the group of undecided voters, then the election on will be a very close run aff air.

Presidential race heats up

CONTINUED ON PAGE 2 ›››››

› Angela Merkel meets with Georghe Papandreou

» Greek bond yields spread » PM cancels planned visit to USA » Confl icting stances from Euro leaders

› Kweku Adoboli confessed to unauthorised transactions

STUDENTS FEEL THE PINCH P2

P14EINSTEIN

TACKLES ECONOMICS

SHANE ROSSTALKS TO THE BULLP16

NEWS & CURRENT AFFAIRSTHE BULL 19.09.20112

EDITORIan O’Connell

DEPUTY EDITOROwen Bennett

MANAGER DIRECTORDamien Carr

DESIGNAoife Crowley

LAYOUTOwen Bennett

Ian O’ConnellDamien CarrAoife Crowley

Special thanks to Jacqueline Hayden for her valued advice, all at TCD Publications and every-one who contributed to making this fi rst issue of the Bull.

This publication is paartly funded by a grant from DU Publications Committee and by Trinity Inves-tors.

This publication claims no spe-cial rights or privileges.

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Serious complaints should be ad-dressed to: The Editor, The Bull, 6 Trinity College, Dublin 2.

CONTRIBUTORS

BY GARY FINNERTYContributing Writer

ON THURSDAY, September 8th, U.S. President Barack Obama pre-sented his long-awaited plan to tackle unemployment in a rare joint session of the Houses of Congress. The $447 billion plan aims to re-duce the 9.1 per cent unemployment rate through a combination of new spending initiatives and tax cuts in order to stimulate job creationTHIS IS a critical time for the Presi-dent, with his approval ratings fall-ing and next year’s election coming into focus. It is unsurprising that the proposals contained in this American Jobs Act, are structured to please middle-class voters who tend to make up the majority of the crucial independent vote. The centrepiece of the bill is tax cuts: $240 billion in tax relief through a reduction in payroll taxes for em-

ployees and employers, as well as tax incentives for employers who hire new staff . It is also proposed that unemployment insurance is extended at a cost of $49 billion to give relief to those struggling to fi nd employment. The remainder of the plan is focused on a relatively mod-est spending package; refurbishing and modernising schools, and in-vestment into transportation infra-structure projects. MARK ZANDI, chief economist at Moody’s Analytics, speculated that Obama’s jobs package, if passed, could lift US economic growth by one to three percentage points in 2012, add some one million jobs and lower the unemployment rate by about half a percentage point. However, the initiative is unlikely to be implemented quickly, nor in its entirety, as the Grand Old Party is unlikely to support the plan in its current format.

VITAL INDICATORS

BY ED TEGGINContributing Writer

AS THE dáil’s summer recess comes to a close the four major po-litical parties in the republic have held their annual ‘think-ins’. These all-member conferences are a good opportunity for the members in the oireachtas to touch base with the non-elected members of their party and to comment on the direction of the party or form new policies to pursue in the next dáil term.

After their heavy election losses earlier this year, Fianna Fáil have sought to distance themselves from the policy of the previous adminis-tration and to improve their image. Leader Micheál Martin has called on his supporters to look to the core values of the party and to “radically change the way Fianna Fáil works.” Every member has been invited to submit their views and these will be discussed at next year’s Ard-Fheis. Fianna Fáil hopes to table a motion for the creation of a debt settlement offi ce when the recess ends to help ease the burden of those in mort-gage arrears. Martin has also indi-cated in his leader’s address that

Fianna Fáil will push for an open debate on the role of the European Union in the current crisis, discuss-ing in particular its leadership and economic management since the crash.

Sinn Féin have taken the occa-sion of their recent Ard-Fheis to reaffi rm the party’s core values and goals. Mr. Adams opened his speech with a reference to the current situ-ation in Palestine and called on the Irish government to support the Palestinian cause. While referring to our economic recovery, Adams stated that Sinn Féin would use the remainder of the national pen-sion reserve fund to create a multi-billion euro jobs initiative package. Mr. Adams also indicated that the establishment of a mortgage resolu-tion body to deal with homeowners in arrears.

The economy and the upcoming budget have been the main talking points for the Fine Gael party. Min-ister Noonan has already admitted that we are in for a tough budget, “In terms of budgetary adjustments, the 2012 budget will be about two-thirds as diffi cult as the 2011 budget.” He did however follow with the warn-

ing that the severity of the next three budgets will depend on the growth of the international econo-my. The government is to bring out a three to four year defi cit reduc-tion plan to be published in October and implemented in December’s budget. A jobs potential initiative package has also been a main talk-ing point, especially for the south-east of the country where there have been large scale lay-off s in and around the Waterford area.

The Labour party have also ac-knowledged the hard budget ahead with Tánaiste Eamon Gilmore stat-ing that “No government wants to have to cut spending and increase revenue, but it has to be done.” Mr. Gilmore singled out the export of goods and services as the way for-ward for Ireland and as such the new Export Trade Council to ex-amine ways to promote Irish trade. Gilmore went on to say that Labour will be looking to identify new trad-ing partners in the African region and that a new ‘Africa Strategy’ will soon be published to outline how Ireland can contribute to human and economic development in Af-rica.

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US jobs planPolitical party think-in concludes

BY STEPHEN DENHAMContributing writer

THE LATEST fi gures from the US Department of Educa-tion have shown a stark increase in the number of students de-faulting on their student loans.Nearly half the defaults (150,000) were from non-profi t colleges.

These non-profi t colleges typi-cally service the lower income demographic. They account for 10% of the colleges in the United States so it would seem a small portion, however, 15 per cent of students in for-profi t colleges de-faulted in the fi rst two years of

repayment. This has risen from 11.6 per cent in the previous year.College tuition costs in the US have risen dramatically in recent years.

Obama’s administration hopes to tackle student default with the Student Loan Forgiveness Scheme. The repayment plan requires bor-rowers to pay 15% of their expend-able income, and after 25 years, the loan will be ‘forgiven’. After 2014, this will be reduced to just 10% of expendable income for 20 years.

The class of 2011 was the most indebted ever. Tuition fees for Medicine in some Ivy League uni-versities are as high as $300,000

The Government has been aim-ing to make third level education more accessible. These actions have allowed educational institu-tions to still attract new students even at a higher price, resulting in a college degrees having dis-proportionally high infl ation.Given the impact of US housing market defaults had on the global economy, what some are calling the student debt bubble has potential to be the next chapter in the great recession

U.S. sees increase in loan defaults

2.2%CONSUMER PRICEINDEX

14.5%UNEMPLOYMENT RATE

+1.8%ANNUALLY ADJUSTED FACTURING OUTPUT

96.7%NATIONAL DEBT AS A PERCENTAGE OF GDP

€1031mB OF P CURRENT ACCOUNT DEFICIT

3NEWS & CURRENT AFFAIRS THE BULL 19.09.2011

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BY MICHAEL DAVIDSONContributing Writer

“Only after disaster can we be resurrected. It’s only after you’ve lost everything that you’re free to do anything”.

NEVER HAS the aggressive inspi-ration of ‘Fight Club’ so aptly de-scribed Ireland’s precarious eco-nomic position. Over the past half decade, Ireland’s fi nancial health has seen more cuts than a Harvey Norman sale. On September 9th, a list of state assets including; Bord Gais, Aer Lingus and the National Lottery, were presented to the Cabi-net with the intention of investigat-ing the logistics of potential sales.

These options have been sug-gested as possible means of sat-isfying the IMF-EU demands to recuperate €2bn. There will now be a waiting period while the gov-ernment’s in-house fi nancial ‘ex-perts’ discuss how much money can be raised from what almost every newspaper has described as Ire-land’s ‘family jewels’. Several forms of investment are being examined, including a stock-market fl otation, trade sale, private equity, sovereign wealth fund or pension fund.

One asset whose fate has been decided is ESB, the most valuable state company. Although Padraig McManus suggested in February

that a sale of the entire company could raise €6-8bn, only a minority sale will be permitted. Pat Rabitte, the Minister for Energy, Communi-cations and Natural Resources, has refused to say how much money the Government hopes to earn from the sale, but he has expressed an aspira-tion that the proceeds would not be used purely for the benefi t of clear-ing national debt, but that a propor-tion of it would be used for reinvest-ment in the economy in order to

create jobs. However, despite the monetary

benefi t from the sale of any state as-set, there are serious issues which must be addressed in advance of a sale. From the Government’s per-spective, they require a “balanced” partner who is “appropriate (and) compatible”, and can acknowledge the country’s overall national inter-ests, including energy security. Pro-spective buyers can look forward to the threat of strikes, as 7,000 em-

ployees are due to ballot for indus-trial action if a government stake is sold.

According to the Irish Times, an-other deal likely to go ahead is the sale of Aer Lingus. In recent years, Ryanair have made two bids to earn control of the company. Both were disregarded, with the government off ended that Ryanair had “under-valued the airline”. Aer Lingus’ value has fallen almost 40% in the succeeding 3 years.

Selling the Family Silverit is reviewing UBS’s rating, citing “ongoing weaknesses” in the bank’s risk management.

Any such downgrading would infl ict further reputational dam-age on the beleaguered investment bank, especially given that the Swiss government was forced to bail out the bank after it suff ered losses of over $40 bn in the 2007-8 banking crisis. While analysts be-lieve UBS is solvent enough to ab-sorb the impending loses from Mr. Adoboli’s unauthorized trading, said concerns over the risk man-agement strategy at the bank may trigger credit downgrading.

Both Swiss and UK regulators have confi rmed they will be launch-ing investigations into the events surrounding the $2 bn losses, which shocked the markets when they were revealed on Thursday evening. In addition, the Swiss gov-ernment is coming under increased pressure to tighten regulation in its banks. Privately, a number of Swiss offi cials are said to be exploring the possibility of UBS being forced to spin off the investment arm of its operations.

Unconfi rmed reports suggest that Mr. Adoboli’s fraudulent ac-tions may date back much farther than initially believed with sources claiming he was engaging in crimi-nal activity during the height of the fi nancial crisis in late 2008.

Mr. Adoboli is due in court again for a committal hearing on the 22nd of September.

CONTINUED FROM PAGE 1 ›››››

› Crisis demands fi resale of state assets.

NEWS & CURRENT AFFAIRSTHE BULL 19.09.20114

BY SEAN TONGContributing Writer

JÜRGEN STARK, a member of the Executive Board of the European Central Bank, has urged Ireland to cut public sector spending in order to reduce its budget defi cit. In an interview with The Irish Times held just hours before his shock resigna-tion, Stark said that “there is scope, further room for adjustment and to be more in line with the wages in the public sector in the euro area as a whole”.

He also claimed that “together with Greece, Ireland is still ranking top [in terms of civil servants’ pay]. Public wage increases since the start of EMU have by far outpaced

productivity gains. This needs to be corrected”.

Under the conditions of the EU-IMF bailout, Ireland must reduce its budget defi cit to 8.6% of GDP next year. This will require an ad-justment of at least €3.6 billion in the Budget this December. Stark alluded to the political, as well as the economic, necessity of bring-ing down public sector spending: “One needs to consider that other countries of the euro area provide fi nancial support to Ireland, [coun-tries] in which the wages of the civil service are signifi cantly lower”.

The reaction from the trade un-ions to these comments has been predictably hostile: Jack O’Connor, president of Siptu, said that Stark’s

resignation marked a “good day for Europe”. These sentiments were echoed by the general secretary of Impact, Shay Cody, who also said that further cuts would be unlikely.

While the issue of public sector pay has long been a contentious one, a recent report by The Insti-

tute of International and European Aff airs would appear to support Stark’s claims. ‘Public Sector Pay at a Glance’ compares the salaries of central government staff across Eu-rope and shows those in Ireland to be consistently higher than those in other countries.

While Irish civil servants had the second-fewest working hours per year (1565 as opposed to Swit-zerland’s 1913), senior management received the fourth-highest aver-age annual compensation. When salaries, social benefi ts and future pension earnings were accounted for, only public sector workers in It-aly, the UK and Belgium were more highly paid.

Despite this, Stark’s suggestion has been largely dismissed by the Government, with Tánaiste Ea-mon Gilmore branding the com-ments “unhelpful”. He stated that the coalition has no intention of going beyond the terms of the pro-gramme agreed upon with the troi-ka.

Stark warning reignites public sector pay debate

BY NICOLAS LYDDONCOntributing Writer

THE FRANTIC times gripping the subcontinent over the last few months have shown tens of millions of people suddenly become truly angry about corruption. Massive scandals have burst out in the open, such as fi nancial abuse in connec-tion with the Delhi Commonwealth Games last year, an even bigger telecom bribery scam and illegal expropriations of land. Economic illegality, fraud and corruption - practices that have been around for years in the country - have suddenly erupted.

This is interesting now since corruption has been around in In-dia for years and has always been part of the culture. Everyone pays bribes, be it paying extra to ensure water deliveries to your home or even fi ling taxes to apply for a gov-ernment job. This isn’t surprising since on a small scale, one can easily see the benefi ts of corruption. How-ever, for the last 50 years this prac-tice has been eating its way through the many layers of Indian adminis-tration and bureaucracy. Low level bureaucrats have been charging money for simply doing what they are supposed to do, high level bu-reaucrats have to to be bribed to do what they are not supposed to do, and these malpractices have in-

evitably aff ected politicians, ruining daily life for many Indians. Roles have become blurred within public offi cial jobs. Ignoring defi ned tasks and responsibilities to exert power and authority in order to get bribes has become too common in India today, wiping out functions such as eff ective police and health services. A police car driving past the scene of a road accident in central Delhi will keep on driving. Why stop and help if there’s no money in it for them?

So why has this old problem sud-denly become a hot issue? Maybe In-dian society has come of age and has realized that only once corruption is broken down and disaggregated can the country have a much better handle on corruption. Maybe the population feels betrayed by prom-ises of economic policies in place to end vices. Whatever the cause, a staggering number of protests have been taking place around the coun-try throughout the summer for the Jan Lokpal bill to be passed, aiming to create an independent body to investigate corruption cases in the country. It calls for complete trans-parency in the selection of an anti-corruption committee, stipulating that this independent body will be free from government interference, and requiring a fully autonomous police force to investigate charges of corruption within the govern-ment.

India against corruption

BY GAVIN GILHAWLEYContributing Writer

MORTGAGE DEBT forgiveness has become a controversial topic on the policy agenda in Ireland in recent weeks. Anecdotal evidence of fami-lies struggling to put food on the table after crippling mortgage inter-est payments has become common. From a fi nancial perspective, the debate should take the form of a rou-tine cost-benefi t analysis.

Estimates of the cost to the State of providing some form of debt for-giveness range from €5 billion to €15 billion. This would be provided in the form of additional capital in-troduced into the banks to shore up their balance sheets from the debt write-off . Some commentators have suggested that the Irish banks have already written off a signifi cant por-tion of household debt, and so the cost to the exchequer may well be at the lower end of this scale.

Intuitively, failure to reduce household debt will continue to hurt domestic demand in the Irish economy. Tax revenues are thus aff ected and the State needs to in-troduce more cuts/higher taxes to control the budget defi cit. Higher

taxes reduce disposable income, which in turn reduces consumption, and the whole process starts again. The deleveraging of Irish household balance sheets will thus continue to hurt the Irish economy for the foreseeable future unless part or all of the debt accumulated during the boom is written off .

An innovative approach to mort-gage debt forgiveness was recently proposed by Norris and Brooke (Irish Times, September 8th). They completed a research study on mortgage arrears which sheds light on potential solutions. Having inter-viewed in depth 43 households who were experiencing mortgage repay-ment problems, they concluded that interviewees fell broadly into three main categories: people experienc-ing short-term repayment diffi cul-ties due to illness etc, people need-ing medium term help (5 to 7 years) because they have to retrain to gain employment, and people whose mortgages are non-viable.

They noted that current meas-ures, such as forbearance and mort-gage interest relief, deal only with people in the fi rst category.

For people who need help in the medium term, they propose that

mortgage interest relief should be extended to subsidise half of the in-terest payable for a further 5 years. This would enable households to re-train/reskill and begin paying their mortgage again in due course.

For those people whose mort-gages are non-viable, a mortgage-to-rent scheme should be introduced. In essence, the lender would sell the dwelling at market value to a social housing association, which would be fi nanced by a loan from the State. All or most of the remaining debt would be written off by the original lender. The former owner would become a housing association tenant.

This last approach is a form of debt forgiveness, but only for those who have suff ered the loss of their assets and home. To combat the is-sue of moral hazard, an independent and cost-eff ective assessment of the assets, debts, incomes and necessary expenditure of distressed borrowers will determine into which category they fall.

The benefi ts to the economy through increased consumer con-fi dence and domestic demand are thus likely to outweigh the cost of the capital outlay of such a scheme.

Mortgage debt forgiveness

“OTHER COUNTRIES OF THE EURO AREA PROVIDE FINANCIAL SUPPORT TO IRELAND, [COUNTRIES] IN WHICH

THE WAGES OF THE CIVIL SERVICE ARE SIGNIFICANTLY LOWER”.

› A previous campaign introduced an “anti-corruption” banknote. This banknote has a value of zero rupees, the idea being that one gives the note to their extorter. The picture of Gandhi is designed to induce guilt. The note had huge success on its introduction.

› House sinking under fl ood of debt

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BY MARK MORGANContriuting Writer

THE RECENT course of public de-bate on economic aff airs since the Great Recession of 2008 has con-centrated on reducing state defi cits, and in particular public debt. But given their presence in the public arena has the relationship between defi cit and debt been made clear to the public? More worryingly do those at the helm of fi scal policy un-derstand the dynamics of the debt crisis, how it originated and how to moderate it? Looking at the poli-cies implemented by a European consensus on the debt crisis makes these questions highly trivial. I think it is time to re-establish our knowledge of such a crisis in order to be clear, in both senses of the word, on our debt.

To do so we must start at the very beginning - what the terms defi cit and debt actually mean. When a government runs a budget defi cit, as most European governments over the past decade have, what is col-lected in revenues (taxation) is less than what spent in expenditures (social services, public goods, etc). Government or public debt on the other hand is the amount of money owed by a nation state to private in-dividuals or fi nancial entities. The purchase of state bonds (money lent to governments) by these par-

ties contributes to escalating public debt. This increases when the rate of interest at which the borrowed money must be paid back by the state exceeds the domestic rate of economic growth. Understanding this dynamic is crucial to compre-hending the means of reducing pub-lic debt in times of crisis. What can be said without controversy is that the rate of interest lies outside the boundaries of control of European governments while the rate of eco-nomic growth of individual states is something which can be directly infl uenced. This simple observation should entail that measures taken to reduce public debt by a European

government must focus on increas-ing the growth rate of its economy.

However the fi scal adjustments proposed and implemented all over Europe would appear to contradict this, yet it is constantly argued that reductions in government expendi-ture lowers public debt, as if both were extremely correlated. The ne-cessity of these cuts, defended fero-ciously among the European elite, has fl ooded mainstream media and debate without much justifi cation if analysed with common sense.

Defi cit is more thoroughly related to public debt in that weak revenue stemming from low tax regimes and weak economic growth cannot contribute enough to repaying the funds owed. Therefore stimulating economic growth can only help to reduce public debt.

Increasing public expenditure would appear to achieve this even if this results in a temporary increase in the defi cit. In the short term, injections of public funds into the economy act as ‘economic stabiliz-ers’ against deep recessions allevi-ating their eff ect on the growth rate, thereby moderating debt levels. In the long term public spending in education, health, infrastructure, energy networks and research pro-vides the vitality for an economy to grow. Yet, as already mentioned, this would appear to increase the defi cit, something currently for-bidden in Europe and sceptically viewed upon in the US. But if both sides of the Atlantic were truly wor-ried about their defi cit problems they would agree with Nobel Laure-ate Joseph Stiglitz in his observa-tion that ‘the most important factor that increases the defi cit is the low fi scal reveynue caused by weak eco-nomic performance’.

In other words by reducing public expenditure governments exacerbate their public debt even further, as overturning the eff ects

of the recession in the short term and achieving a long term growth rate proves more diffi cult. It is im-portant to bear in mind that public debt is measured as a percentage of gross domestic product (GDP), es-sentially how much of the value of what is produced in an economy the

debt eats away. Therefore it can be deduced that the stronger the GDP growth the less of it the debt can consume.

But why has Europe not followed this logic in the way it is managing its fi scal policy? The money going out to pay the infamous bondhold-ers on behalf of the public seems to

be preventing any increase in public expenditure. In the spring of this year Central Bank Governor Patrick Honohan spoke of the necessity to pay back bondholders, even if un-guaranteed, so as not to unstable a ‘complex network’ of fi nancial con-tracts. But in eff ect the fi scal poli-cies that have followed this reason-ing have done nothing more than to turn public debt into a mechanism of transferring wealth ‘from those who depend on their job for a live-lihood to those that live off invest-ments and dividends’ (Tony Judt, Ill Fares the Land). So, in trying to manage itself out of probably the worst economic collapse in its his-tory, Europe is only aggravating fur-ther an inequality which is already hugely disproportionate.

If we have any interest in reduc-ing inequity and our public debt levels we should start by demand-ing absolute transparency in rela-tion to the debt accounts in order to determine the origin of the state’s public debt – how much it owes and more importantly to whom. Every contributor has the right to know who the bondholders are. Fiscal re-sponsibility in response to this cri-sis would then require more public expenditure not less, as the dynam-ics of debt creation and manage-ment make clear. Even the overly used threat of infl ation would do no harm to help clear us of our debt.

Getting to grips with our debts

THE MOST IMPORTANT

FACTOR THAT INCREASES

THE DEFICIT IS THE LOW

FISCAL REVENUE CAUSED BY

WEAK ECONOMIC PERFORMANCE

TIME TO FOCUS ON GROWTH

FEATURESTHE BULL 19.09.20116

At times of un-certainty, often the most natural course of action is to consolidate one’s positions, to safe-

guard assets and to limit exposure. Indeed, this snippet of amateur psy-chology is highly corroborated with market trends since the dawning of the fi nancial crisis in late 2007. Across the spectrum, from the most humble hedge funds to the enor-mous sovereign wealth coff ers of the Far East, investors have sought to shift their capital to the perceived fi nancial “safe havens”.

This occurrence in itself is not particularly surprising for it is mere prudent risk management. How-ever, the fi nancial crisis has exposed a snag. The traditional safe haven for capital, the US dollar, has taken a reputational battering, with its steady decline in value relative to other currencies leading the mar-kets to ditch the greenback as a safe bet and instead explore other pos-sible means of safeguarding asset value in the age of uncertainty.

Enter the humble gold nugget. Over the past number of years, the value of gold bullion has increased exponentially as risk adverse spec-ulators return to this traditional store of wealth in droves. This phe-nomenon has raised many inter-esting questions, with infl uential commenters pondering the mer-its of a possible return to the Gold Standard and what sort of stability this new state of aff airs will bring to

a global economy suff ering from an existential crisis.

With the emergence of the mon-etarism school of thought, many economic thinkers lost interest in the idea of the Gold Standard, with the general consensus holding that such a monetary system was a relic from the imperial age and unfi t to adapt to the huge challenges stem-ming from the globalisation of fi -nance.

This sentiment was compound-ed in August 1971, when President Nixon took the momentous deci-sion to end the direct convertibility between the dollar and gold, with the dollar transforming into a fi at currency.

However, in a recent article in the FT, Robert Zoellick, president of the World Bank, called on poli-cymakers to consider the merits of a return to a gold backed monetary system, citing the emergence of “gold as an alternative monetary as-

set today”. The raging debate which has ensued is indicative of a highly complex issue with signifi cant gains and trade-off s to be countenanced.

The obvious advantage of the Gold Standard is the assurance of long term price stability. Analysis of the period between 1871 and 1914, concludes that under such a sys-tem, periods of sustained infl ation are rare. Simply put, under the Gold

Standard, the volume of money in an economy is directly linked to the amount of gold the central bank holds in reserve. As such, the money supply can only grow in proportion with an increase in the supply of gold, through mining or balance of trade surpluses.

Moreover, the Gold Standard demands fi xed exchange rates be-tween the countries which adopt it. International trade would surely be boosted under such a system as transaction costs would fall and ex-change rate uncertainty would no longer be relevant. Even more im-portantly however, currency spec-ulation would cease to exist, and the highly regrettable speculation induced crises such as the Asian Crash of 1997 could be more easily avoided.

Yet one cannot ignore the ac-curacy of Milton Friedman’s quip “there’s no such thing as a free lunch in economics”. The adoption of a Gold Standard would be fraught with diffi culties as there are some

notable drawbacks inherent in the model. Most glaringly is the severe hindrances the system infl icts upon domestic monetary policy. As pre-viously mentioned, under such a system, central banks cannot print money ad nauseum.

In that sense, the massive in-stances of stimulus implemented across the developed world to com-bat the fi nancial crisis would be impossible. This poses a serious di-lemma for policymakers.

While the Classical Dichotomy holds that printing money cannot increase output in the long run, it is generally accepted in academia that targeted injections into the mon-etary system in the short run can be the catalyst to kick start growth. This has been the principle tool of central banks in recent times and while instances of quantitative eas-ing has only lead to modest increas-es in economic activity, one dares not ponder what might have been without this policy option.

It appears that the adoption of

the gold standard would solve one economic problem, namely price instability in the long term, but it would exacerbate another: the ob-served impotency of monetary poli-cy. Herbert Hover’s observation “we have gold because we cannot trust governments” seems ever so apt.

Follow the yellow brick road?

Deputy Editor Owen Bennett ponders the possible merits of a return to the much maligned Gold Standard

ENTER THE HUMBLE GOLD

NUGGET

THE OBVIOUS ADVANTAGE IS

THE ASSURANCE OF LONG TERM

PRICE STABILITY

› Robert Zoellick is urging policy makers to consider a return to the gold standard.

7FEATURES THE BULL 19.09.2011

There is a growing consen-sus amongst the fi nancial community that some form of Eurobonds will

be necessary to overcome the on-going sovereign debt crisis in Eu-rope. However, for such a measure to be successful it would require the advancement of the Eurozone from a monetary union to a fi scal union, and this particular aspect is an anathema to the politicians who must make the fi nal decision.

Nonetheless, should the crisis evolve to such a scale that it threat-ens economic stability of the core Eurozone economies, a fi scal union might well be considered preferable by politicians and in this manner, implemented.

Essentially, the sovereign debt crisis revolves around investors losing confi dence in a country’s fi scal health, usually because of unsustainable budget defi cits, and without the usual escape routes of

devaluation and infl ation due to membership of a monetary union; these fi scal concerns subsequently lead to higher bond yields, which in turn, make fi nancing large defi -cits impossible in practical terms. This has been the case for Greece, Ireland and Portugal who have only avoided (so far) signifi cant fi scal ad-

justments and default, courtesy of being bailed out by the IMF and the Eurozone, through the European Financial Stability Facility (EFSF), which has now been replaced by the European Stability Mechanism (ESM).

But this arrangement is only vi-able for small economies, and with contagion spreading to the much

larger economies of Spain and Italy, the ESM/IMF solution be-comes obsolete unless the ESM is increased to the region of €1.5-€2 trillion.

This realistically isn’t plausible as such an increase could jeopardise France’s triple A rating, thus simul-taneously increasing fears of contagion and reducing the overall capacity of ESM, which is primarily fi nanced by the contribution of its triple A rated countries.

Quite simply, the crisis has be-come too large for the ESM. There-fore, it can be inferred that the recent purchasing of bonds by the ECB is a short-term measure to lower the yields of Spain and Italy to sustainable levels, while a solution to end the crisis is being worked upon behind the scenes. Seemingly, this is to be some

form of jointly guaranteed Eurobond. The ra-tionale behind the

new Eurobond is that it would allow member states of the single-cur-

rency area to borrow in bonds issued by a European

debt agency, possibly a new institution or

an existing institu-tion with expand-

ed powers. In theory, Eu-

robonds would en-sure liquidity in the Eurozone and create a bond large enough to ne-

gate high yields caused by specu-lation. The reasoning behind this

is that the public fi nances of the euro area as a whole are respectable compared with those of the US and UK, both of whom experience low yields.

For 2011, the IMF estimates that Eurozone general government debt will reach 88% of GDP, which is lower than estimates for the US (98%) and only slightly higher than the UK’s (83%). This suggests that Eurobonds could present a credible answer to the current concerns of actors in the fi nancial markets. Yet even this solution faces enormous political challenges, but without it,

the survival of the euro currency be-comes questionable.

For Ireland, there are serious implications either way. Should fi scal cohesion be accepted, it in-

variably leads to some loss of inde-pendence on fi scal policy which one could expect to mean greater tax harmonisation and scrutiny of the government’s expenditure.

The alternative, assuming this would be without the euro curren-cy, is uncertain in the long-term and unpleasant in the short-term: This reality makes Minister Noonan’s remarks about pegging Ireland’s economy to the fate of the euro understandable; however, it does increase the possibility of Ireland stumbling into a fi scal union at the behest of panicky fi nancial markets and European offi cials. Hardly an ideal situation.

This summer the fi nan-cial world witnessed a saga that hitherto would have been unthinkable. The world’s largest and

most liquid bond market, the US Treasury market, appeared to be on the brink of catastrophe.

With the US sovereign hurtling towards technical default, and with the long-term fi scal situation in America continually deteriorating, a deep unease pervaded fi nancial markets.

Since the election of George W. Bush US Federal spending has bal-looned from $2.36 trillion to $3.8

trillion (infl ation adjusted). Spend-ing at the Federal level now ac-counts for 25% of GDP, against only 18% in 2000. This binge was ini-tially a result of the Middle Eastern wars and the massive Bush era tax cuts, but was further compounded by the 2009 stimulus bill.

The Obama healthcare bill, the principal elements of which will come into eff ect in 2014, is antici-pated to exacerbate the unsustain-

able fi scal trajectory. Hence, a plan that would reduce defi cits and rein in the increase in the US National Debt was essential in the medium-run to retain full faith in the credit of the US.

Further complicating the picture was the fact that the US has a debt ceiling that cannot be breached, unless the borrowable amount is raised by an act of Congress.

Failing to raise the debt ceiling could have pushed the US into tech-nical default sending shockwaves through international fi nancial markets.

The US Treasury market, regard-ed as the safest of safe havens, and widely used to determine the “risk-free” interest rate is crucial to the stability of the global fi nancial sys-tem. Even a technical default would shatter confi dence in the depend-ability of Treasuries.

A debt reduction plan that fell well short of saving the necessary $4 trillion scraped through Congress. It is expected to cut projected debt levels by $2.4 trillion over 10 years. The plan does not raise income tax-es and relies largely on deep cuts to federal spending.

This can be seen as a victory for the tenacious Tea Party, which succeeded in preventing Congress from adding a tax burden on the American people during a period of dire economic malaise. However, it may not go far enough in resolv-

ing the long-term fi scal outlook, as giant unfunded liabilities in the So-cial Security system accumulate.

In August, Standard & Poors took the dramatic step of down-grading the US to AA+ (quite inter-estingly , a move not followed by either Moody’s or Fitch). This sug-gests that ”risk-free” US Treasuries are not risk-free at all. This realiza-tion snatches the rug from under-neath many asset-pricing models. It also symbolizes the apparent evaporation of American economic hegemony.

It’s not all negative, however. This downgrade, on balance, may serve as a good wake-up call for the

US- a jolting reminder that the ex-pansion of Big Government is has-

tening the decline of American eco-nomic “exceptionalism”. This may spur Obama or new Congress in 2012 to enact a sweeping structural reform of America’s giant Europe-an-style entitlement programmes.

As the crisis laden summer draws to a close, America looks set to nar-rowly avoid a double dip recession. and thankfully, Treasury yields are still rediculously low.

Worringly however, unemploy-ment in America is stubbornly (and uncharacteristically) high. Growth has been anaemic as consumers and fi rms deleverage. Unless its econ-omy rebounds with its traditional vigour it may not be possible for the US to grow its way out of this debt mountain.

The near-term outlook is cer-tainly bleak. But at least the Ameri-cans can gaze across the Atlantic and say “Hey, it could be worse…”

Tripping along the ledgeGary Finnerty questions whether the proposed Eurobonds offer a meaningful solution to the sovereign debt crisis

The US brush with defaultTed Nyhan refl ects on the fi scal woes across the pond and US policymakers’ desperate attempts to avoid default.

THE DOWNGRADE MAY BE A GOOD WAKE-UP CALL

FOR THE US

A DEEP UNEASE PERVADED

THE FINANCIAL MARKETS

› Members of the Tea Party Movement.

IN THEORY, EUROBONDS

WOULD ENSURE LIQUIDITY IN THE

EUROZONE

THE CRISIS HAS BECOME TOO

LARGE FOR ESM.

FEATURESTHE BULL 19.09.20118

Apple commands 61% of total market share of the Tablet computer in-dustry. Ask yourself the

question; “What Tablet PC’s do I know of other than Apple’s iPad?”, and I bet you are stuck on about two or three.

Yet the truth is if you throw a stone, you’ll hit someone making a tablet. Indeed, by the time you read this article, new models bear-ing new modifi cations will have swamped the market. But why does Apple’s iPad remain “untouch-able”?

The reality is that within the Tablet industry, the iPad faces no competition. Indeed t h e industry has be-come a battle-fi eld; for second place. New tablets are launched n e a r l y e v e r y week

and companies engage in rigorous cutthroat pricing in an attempt to absorb some slice of the cake. Ap-ples ‘fi rst mover’ advantage has left rivals continuously struggling in legal battles over fringed patents, copying iPad’s design, look and feel. The ongoing legalities are costly to rival fi rms, both in time and money, securing Apple’s superior position in the market.

An interesting point worth not-ing is that rival tablets are not technically inferior to Apple’s iPad. Indeed, many can match the iPad’s specifi cation - though none feel quite as slim and svelte to the touch or pleasing to the eye. 90,000 apps on Apple’s App store exist today specifi cally designed to

optimize the full size of iPad’s 9.7in

screen. However, in contrast, a mere 300 apps can fully exploit the operating system ‘Android’ that has been developed for many rival tab-lets. With such a vast array of apps, a sleek design and a simplistic has-sle-free interface, can anyone come close to touching the iPad?

Rumour suggests the develop-ment of a new tablet, one designed to operate a customized version of the ‘Android’ operating system, and fi nally a competitor with the potential to run head to head with the iPad. Amazon, one of the dot.com bubbles’ most notable survi-vors, has heavily invested in the de-velopment of such a tablet. Building on momentum from the mammoth success of its Kindle e-book

reader, can Amazon get a suffi cient slice

of the

pie?There are two main reasons why

Amazon may thrive at conquering iPad’s dominant position in the tab-let industry.

Firstly, is price; Amazon’s tablet is set to cost as little as £150-180 whereas Apples entry level iPad 2 costs around £400. HP’s Touch-pad is proof of the elastic demand among tablet consumers. The Touchpad sold 350,000 units in just one day, three months worth of stock. The reason for this was HP lowering the price to as little as £60 to clear stock and remove itself from the tablet wars.

Secondly is Amazon’s domi-nance of the eBook market, its’

solid entrance into music, TV and fi lm sales (Amazon now

owns LoveFilm), and also

it’s

sheer size to attract authors, devel-opers and production companies alike. Amazon has over a hundred million credit cards logged on its servers, something no rival to the iPad has ever had. As such, existing Amazon accounts could allow us-ers to buy music (Amazon MP3’s), video (LoveFilm) and also Apps (Amazon is currently developing its own App store) from its new tablet essentially creating a secure and simplistic system much like that of the iTunes store.

The release of Amazon’s new tablet could constitute a key mo-ment in the battle for tablet market share. As it remains, Apple strides several steps ahead of the pack. However, competition is fi erce and

hungry. Tablet sales in 2010 grew by 400%. It’s a large

cake now. Watch this space.

Once upon a time, ‘Apple’ was the pomaceous fruit of the apple tree, written at the start of a sentence.

During that same precise period, ‘Jobs’ was the plural of a paid posi-tion of regular employment. It still pretty much always means that but

the point of this opening paragraph is that Steve Jobs and the Apple brand used to not exist and are now really famous.

Less than a month ago Jobs resigned as CEO of Apple, trigger-ing a 5% fall in the share price. The fall would have been steeper had

the market not known of his bad health for years and thus inevitable resignation at some point. It would have been steeper again if he was leaving the company altogether rather than taking up the position of chairman.

This man has arguably been the

greatest business leader of the post-war era, from co-founding Apple to making it one of the world’s most influential corporations. That is to say nothing of his innovative genius in designing and developing the Ap-ple II Series and Macintosh. He is listed as either primary inventor or co-inventor in 338 US patents.

It reads like the plot of a movie: Middle-class hippie kid with no college education builds a com-puter empire and becomes a multi-millionaire, has a huge ego and gets fired from his own company before coming back a decade later to save day.

If you like your heroes to have warts, you won’t be disappointed. Famous for his demanding and aggressive personality, a former colleague once said he “would have made an excellent King of France”. Jobs has come under fire in the past for eliminating all Apple’s philanthropic activity when he regained control in 1997. In that sense, comparing him to Bill Gates is like comparing puns and oranges. When criticised for Apple’s poor recycling programs he used the An-nual Meeting to lash out at environ-mentalists.

In the early years of Apple, employees described Jobs as er-ratic and temperamental. Follow-ing a power struggle in 1985, Jobs was fired by Mike Sculley, whom he had poached from Pepsi seven

years earlier to be CEO. He later described this as the best thing that ever happened to him, saying “It freed me to enter one of the most creative periods of my life.”

Jobs then founded NeXT Com-puter which was a considerable success. In 1986, Jobs bought The Graphics Group (later renamed Pixar) and went on to produce the Toy Story trilogy and six Academy Award-winning animated features. Pixar was eventually bought out by Disney in 2006 in an all-stock transaction, making Jobs is the single biggest Disney shareholder.

Upon his return to Apple, Jobs brought a huge increase in sales through the introduction of the iMac and also boosted profitability by terminating a number of weak projects. He has since guided Ap-ple to success in the industries of personal computers, music and phones, through a relentless focus on design and functionality. Sadly, since being diagnosed with pancre-atic cancer in 2004, Jobs has gone on leave several times. In August 2008, Bloomberg mistakenly pub-lished his obituary.

Although the error was quickly amended, rumours about his health intensified, leading to his response of a Mark Twain quote: “Reports of my death are greatly exaggerated”. If only an Apple a day actually kept the doctor away.

By Lorcan Clarke

TECH SPECIAL

A bite of the Apple

Jobs done

Chris Baird analyses the threats to Apples grip on the tablet market and questions their dominence

9FEATURES THE BULL 19.09.2011

On the 18th of Au-gust, Todd Brad-ley, HP’s executive vice president an-nounced that the company was begin-

ning preparations to spin-off its PC business. Despite being the world’s largest manufacturer of personal computers, HP’s decision is driven by increasingly low margins and low growth in the PC business.

It plans to shift its focus and di-

vert more money and resources to data storage, services and software, moving away from a consumer busi-ness and repositioning itself into an enterprise business, a goal already being sought by HP’s announce-ment last month to buy for $10.2bil-lion; Autonomy, a British fi rm that specializes in database search and other enterprise software technolo-gies. Bradley, current head of the PC business in HP has announced that he would like to stay on as head of the spin-off company.

Just last year HP paid $1.2bil-lion for Palm Inc. who provided the operating systems used for HP’s WebOS mobile business and the TouchPads. These were meant to be HP’s answer to the iPad and iPhone but sales

have been atrocious. TouchPad sales have only really starting to pick up when sold at a price that en-sures HP is making a loss on every product. On the same day that the spin-off idea was announced, HP announced that it was downgrading its revenue forecasts and earlier in August announced it was discon-tinuing its tablet and smartphone business, barely a year after it paid $1.2billion for the system that runs them. The company is lacking a strong leader at present and since the announcement of the spin-off its share price has been fl irting with a 6 year low, indicative of a fi rm on the ropes. In-deed Wall Street is sceptical of their plan a n d

s h a r e -holder confi -

dence is low.Evidently, HP is just not

doing enough to compete with Ap-ple and Google, the two giants of the handheld devices at the minute, two giants who do not

l o o k l i k e r e l i n -q u i s h -i n g t h e i r position any time soon. In the long run, the decision to spin off the PC business could possibly turn posi- t i v e for HP. IBM made a similar move in 2005, also spinning off its PC busi-ness.

Sales and profi t have risen steadily and consistently for Big

Blue since then, although it is important to remember that

in 2005, tablets and smart-phones had only just

started to emerge on the market. At the start of

2011, we saw Motoro-la spin-off its mobile

business, and last month Google

bid $12.5billion for it.

While the spinoff is fi nalised, HP has

to focus on creating investor confi dence and

producing results or it could be in real danger of

being kicked off the Dow Jones and seeing Apple added in its place. IBM is the only technology fi rm do-ing well on the Dow, which is meant

to be an index of industry leaders. Even before the announcement on 18th of August, HP had been the worst performer of the year for the Dow.

While getting rid of its big-

gest earning b u s i n e s s is seen by some to be

a bad decision, I think HP is realising that per-

sonal computers are on their way out.

With its experiments in the tab-let and smartphone market failing miserably, their only option is to

emulate IBM’s move in 2005, and move away from being a PC busi-ness powerhouse, and into the date storage, services and software busi-ness. A misty, foggy and uncertain journey awaits them.

JAN2011

FEB APR JUNMAR MAY JUL

-40%

-20%

0%

HEWLETT PACKARD CO

AUG

DOW

10%

Time to say goodbyeProblems amount for HP as the tech giant’s attempts to reinvent itself falter. Sam Quirke investigates

JUST LAST YEAR HP PAID

$1.2B FOR PALM INC., PROVIDER

OF THEIR OPERATING

SYSTEM

HP’S STOCK DECLINE

HP HAD BEEN THE WORST

PERFORMER OF THE YEAR ON

THE DOW

FACTBOX

AUG 18TH 2011

HP ANNOUNCES its pulling out of the PC business.

On the same day HP an-nouced it’s to buy Autonomy for $10.2 billion.

AUG 19TH 2011HP SHARES crashed wiping $12 billion from it’s market value.

AUG 20TH 2011THE COMPANY fi re sells it’s 16GB tablet for only $99. It’s 32GB tablet sells for $149.

SEPT 16TH 2011HP SHARES have yet to recover their 20% August fall in value.

FEATURESTHE BULL 19.09.201110

THE REPUBLICAN Party is the umbrella group that encompasses the right side, politically, of American politics. It is also known as the GOP, which is an acronym for “the Grand Old Party”. Given that America only has two political parties, the Republi-cans encompass a wide range of views and individuals, so to perfectly summarize the Republican Party is perfectly impossible. However, there are many points on which Republicans agree.

Before we set off on explaining what the Republican Party is, we must fi rst explain what it is not. It is not simply just George W. Bush and his ilk. While certainly he was a Republican, to label him the standard-bear-er for the party would both be myopic and incorrect. While many of his positions were agreeable with the rest of the party, most of his actions were unique to his presidency and, at times, indefensible.

With that being said, it is time to discuss what the party stands for. At its core the GOP believes in individual rights and lib-erty. Individual, in this case, means more than just a singular person, but also could mean an individual state or business. This central point permeates through all of the party’s positions.

The fi rst point Republicans agree on is the need for a smaller federal govern-ment. They believe strongly in the Tenth Amendment, which states “the powers not delegated to the United States by the Con-stitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” The GOP has interpreted this to mean that, while being pragmatic, states should be able to run and legislate for themselves. The Party believes that states are better equipped to manage regional and “state-centric” issues than the federal government. Given that the federal govern-ment must worry about states that are many times disparate in nature, The Republicans believe that federal intervention does more harm than good.

A second key component of the GOP’s policy is an acceptance of the virtues of the free market system. The Republicans be-lieve that a free market system is the most eff ective way to ensure that the economy and the country are running as effi ciently as possible. The rationale for this idea is that players in a free market system have a vest-ed interest in creating the best product or service at the lowest possible price for fear that a competitor would come in and steal business. Indeed, small and medium-sized businesses make up an important part of the American economy. Those businesses directly aff ect the average American and s the old adage goes, “a rising tide lifts all ves-sels”.

The third point Republicans agree with is in personal responsibility. The party be-lieves that individuals should have the abil-ity to make their own choices and then sub-sequently deal with the consequences. The concept of moral hazard – simplistically defi ned as “heads-I-win-tails-you-lose” – is considered abhorrent to the party and why

they are opposed to bailouts. It also follows that the GOP believes in a strong judicial system. Republicans agree that those who break the law should be punished appropri-ately and as such, tend to favour long jail sentences.

Given those aforementioned points the Republicans have gone onto believe that less regulation is preferable to more and that lower taxes are better than higher taxes. The rationale for this is that regulation hinders businesses and the hindrance of business is bad for the country as a whole. If one believes in the free market ideal, the market-place should regu-late itself and thus regulation only adds uncertainty to the economy. If busi-nesses are run-ning effi ciently, then they should be able to retain as much capital as possible. Thus, lower taxes give businesses and in-dividuals the abil-ity to invest more in themselves and America. Addition-ally, with a smaller federal govern-ment the need for increased taxes is not necessary. Instead states, at a local level, can design their own tax regimes to deal with their own funding needs.

There is, however, an area where the Republican Party does agree the federal government should be involved and that is national defense. The Republicans believe that protect-ing America and citizens is a neces-sary function of government. In ad-dition, the defense and aerospace sector creates hundreds of thousands of American jobs. The GOP also believes that one of the most important ways to keep America safe is by keeping its borders safe. Accordingly, a strong immigration policy is an essential component of Republican policy.

The Republican Party, in conclusion, is not a group of right wing, war-mongering nut jobs. Rather, it is a party that believes in liberty, personal choice, and that a strong free market economy can lead America on its path to continued prosperity.

“to label Bush the standard-bearer for the party would both be myopic and incor-rect.”

“The concept of moral hazard is consid-ered abhorrent to the party”

3France’s two largest banks, Sociètè General and Credit Agricole, have had their credit rating downgraded by Moody’s after fears of insuffi cient capital to endure a

Greek default.

4 A rogue trader in the investment banking division of UBS could cost the Swiss bank as much as $2Bn.

5The European Union has extended the length of copy-right on musical recordings by 20 years, to a total of 70. Some believe it is unfair for copyright to expire while the

artist is still alive.

6A Judge in California threw out the $1.3Bn awarded to Oracle in a case that accused SAP of intellectual prop-erty theft.

The Republican Party: not such a toxic brand1

Stuart J. McSweeney outlines the core ideology of the Republican party in the US and attempts to dispel the toxicity surrounding the Republican brand.

1

Around th

3456

7

10

11FEATURES THE BULL 19.09.2011

AS THE smoke begins to clear over Libya, and as the few remaining pockets of pro-Gaddafi supporters are removed, one could be forgiven for thinking that the hard part is

over. But as one struggle is ending, Libya’s interim government the National Tran-

sitional Council, are now faced with another monumental task. It‘s not

enough to simply rebuild, the men and women of Libya will now

need to see the grand prom-ises of democracy that were

made come to fruition. It is likely February’s call for

an election within three months of victory will

be soon forgotten as the new government must try and bring stability back to this greatly divided nation. If history has thought us anything about democracy, it is that a rushed elec-tion resulting in a weak and ineff ec-tive government can often do ir-reparable damage to even the best democratic inten-tions. The Nation-al Transitional

Council must now begin moving Libya

forward, and quick-ly. The deep seated

problems in Libyan society will not go

away simply because Gaddafi is gone.

At the outbreak of the revolution in Febru-

ary, Libya’s unemploy-ment rate stood at 20.7%,

according to the most recent census statistics, a number

signifi cantly higher than other states in the region. Furthermore

one-third of Libya’s population were living below the poverty line.

Such fi gures will only have been exas-perated in recent months. These economic diffi culties, coupled with a perception that Colonel Gaddafi was little more than a cor-rupt dictator, gave Libyans a desire for revo-lution, and one person to blame for all their hardships. And Gaddafi certainly played the part of evil tyrant to a tee, using air strikes and other violent means to attempt to quell the resistance. Current estimates vary

greatly, but it is believed that the death-toll is anywhere between 2,000 and 10,000. But with Gaddafi seemingly out of the picture for good, his current presence in Libya lit-tle more than an echo, a power vacuum has been created.

The National Transitional Council was originally established to coordinate the re-bel’s resistance, however in recent months its aims have broadened so much so that it now functions as the interim government, replacing the former Gaddafi led regime. The rebel’s great victory will certainly buy the Council time, but it will not last in-defi nitely. Libya’s economic problems will soon become an issue, and for this reason it becomes necessary to look at how Libya’s interim government can handle the task of reconciling how the dream of democracy matches up to its reality.

In late March, the political and internal aff airs committee of the Council present-ed a plan for what Libya’s new democracy would look like, printed in The Guard-ian newspaper. Certainly the correct words were all there: “Free and fair elections”, “le-gal institutions”, “national constitution”, and there is even a statement about guar-anteeing “the rights and empowerment of women in all legal, political, economic and cultural spheres.” But while such state-ments will please those in many long-stand-ing Western democracies, it will be an up-hill battle for the new government to make their mark in the immediate future. The National Transitional Council’s aim to give the vote to all adult men and women will mean that one-third of the electorate are living below the poverty line and one-fi fth are unemployed. With Gaddafi , the uniting fi gure of hate for much of Libya, now gone, the real issues at the heart of Libyan society will soon become greatly apparent.

Whether or not Libya’s new found dem-ocratic leaning will last indefi nitely will de-pend on how fast the new institutions can earn the support, and more importantly the trust, of the people. Of paramount signifi -cance is the fi rst election, which faces many large hurdles itself. Violent outbreaks, low voter turnout or greatly divisive tribal is-sues could cast doubts on the sustainability of a new government. Gaddafi ’s permanent successors may earn the backing of the in-ternational community, but if they are not seen as legitimate by the people of Libya themselves, new problems are almost cer-tainly not too far in the distance. In Libya, now is a time for celebration, but behind the scene planning and strategy are needed. Libya’s greatest days, but also its greatest struggle, may still be ahead.

the WorldA lot done, but still more to do for Libya2

In light of Coronel Gaddafi ’s fall, David Kelleher ponders the future for the war-ravaged country

2

7Brazil’s government tax revenue is higher than expected. For this reason, Brazil has raised its prediction for fi scal surplus and thus should allow a reduction in soaring in-

terest rates.

8 Exxon Mobil sealed a strategic partnership with Rosneft, a Russian state-controlled oil company, through which they will explore energy reserves in Russia’s Arctic re-

gion.

9 There is to be a merger between Eurobank EFG and Alphabank to form Greece’s largest bank. The markets responded favourably to this move citing a reducing of

bank costs in the country.

10The American bookstore Barnes & Noble posted another quarterly loss, dragged down by a continu-ing decline in sales of paper books at its stores.

45 4

8

9

FEATURESTHE BULL 19.09.201112

QUICK QUIZIs BESS a total waste of time? AM I wasting my time studying BESS? Is everything I’m learning useless in the real world, with actual manage-ment prowess gained through experience? Didn’t I re-ally just choose this course as a hollow excuse to hang around the arts block and gain access to Trinity’s Gym facilities? These are the kinds of questions bouncing around inside the head of the business student, staring vacantly past you as you attempt to discuss Philosophy or English Literature with them in the smoking area of the Pav.

While I cannot claim to have fully overcome these doubts myself, recent events have reassured me of the importance a solid grounding in business theory can have in the workplace. The following quiz, based on sit-

uations experienced in a recent job, aims to dispel some of the doubts around college that the Lecky is simply an “airport terminal with books” and that The Ed Burke is just “where they put all the UCD students that get lost on the way to college”. Any business student, even MSISS students, should fi nd this quiz easy to ace. My old boss however, who has inspired an option in each question(try to guess which one) would most defi nitely have received a resounding zero.

While you may notice that the examples do not come from a company on the cutting edge of the management revolution, they nonetheless illustrate the eff ect a lack of business theory can have at management level.

Gabriel Corcoran

Q1: MANAGEMENT’S ROLL IS ______________

A) To sit behind a desk constantly watching staff on multiple CCTV monitors. Use fear of redundancy to ensure morale is kept low and to discourage creativity and innovation at every possible opportu-nity.

B) In short, to motivate their subordinates. Recent studies suggest that money is only considered a suffi cient motivational factor to a point, beyond that three distinct motivators of Mastery, Autonomy and Purpose lead to higher levels of innovation, performance and job satisfaction.It is the roll of management to ensure these factors are explored and encouraged. Simply trusting employees to perform without con-stant monitoring, like at Australian software company, Atlassian for example, has proven highly successful time and time again. Once a quarter at Atlassian, employees are given 24 hours to work on whatever they want, however they want, and report back with their resulting progress the next day. This one day of unfettered au-tonomy is an invaluable source of innovation for the fi rm. Search for the RSA’s videoblog on Motivation for more on this theory.

Q2: MANAGEMENT SHOULD COMMUNICATE WITH EMPLOYEES _________________

A) Exclusively through rambling, aggressive and misspelt notices that cover the entire notice board of the shabby excuse of a staff room. The most aggressive and abusive parts of these notices should be underlined, such as “I KNOW who you are, If I catch any IDIOT doing this again, I WILL start fi ring people”.

B) As directly and clearly as possible. Personnel Today, a leading British HR publication, cites the eff ectiveness of communicating with employees via noticeboard as almost 10 times less than through a simple team briefi ng. When criticising or administering bad news, Management Today stresses the importance of face to face communication and strongly discourages the use of multimedia such as email notifi cation or text message. Communication is a key component of management as it is fundamental to the making and implementation of decisions and thus should be carried out carefully and professionally.

Q3: DURING A STAFF MEETING, EMPLOYEES SHOULD BE ENCOURAGED TO _____________

A) Remain silent and keep their opinions to themselves. Any con-structive suggestions to improve the safety or hygiene of the work place should be immediately disregarded through a series of inco-herent mumbling about overheads and store policy.

B) Take this vital opportunity to directly address issues of con-cern in the presence of their peers and superiors. The meeting should focus not only in the negatives, but also the positives in em-ployee performance.

Q4: WHEN FILLING OUT A REFERENCE FOR AN EMPLOYEE, MANAGEMENT SHOULD ___

A) Copy and paste a generic one line reference, refer to the employee using the incorrect gender throughout and proceed to sign it per-sonally, ensuring that the employee feels like a useless piece of un-noticed fi lth picked out ones nose and absentmindedly fl icked into oblivion.

B) Take time to honestly and fairly assess the employee’s contribu-tion and qualities and highlight how said individual has proven to be an asset to your company. Take into consideration your future rela-tions with this employee and the fact that they may write a scathing rant of an article about you in the future.

IF YOU ANSWERED ALL “B”SWell done! You either study business or have half a brain.

IF YOU ANSWERED ALL “A”SCongratulations, you are most likely in a management position at an established retail chain.

› bad boss photo caption

13FEATURES THE BULL 19.09.2011

What would you do if you were re-ally rich? Surely one of the most interesting hy-

pothetical questions we can ask ourselves. If you resist the tempta-tion to splurge it all on fancy cars, houses and women, you might be inclined to keep some of it. Unfortu-nately the taxman is going to want a slice of your cake. However what if

there were a way to keep the whole cake to yourself?

“But that’s illegal”, I hear you cry. Not if you’re very clever. The aim of the game here is tax avoidance; fair-ly legal. It is not tax evasion which could land you in jail. Some would say it is simply a clever way to max-imise your revenue. After all, one of

the fundamental principles of eco-nomics is that each individual tries to make the best of what they’re giv-en. But some would say it is cheat-ing your country out of potential tax revenue. The sheer inequity of the richest not paying their way would draw severe criticism from the masses. Indeed there was general outrage when the Irish rock band U2 chose to move their assets to the Netherlands back in 2006. This was in response to the €250,000 cap im-posed on the tax-free incomes enjoyed by artists intro-duced in the budget of the same year. Many com-mentators at the time expressed their anger, including the then minis-ter for fi nance, Brian Cowen.

One doesn’t just have to move to Holland though – there are plenty of options. Various Caribbean islands would be lovely this time of year; Monaco would tempt you to spend your fortune in its alluring casinos; even good old neutral Swit-zerland where you could essentially hide a dragon in one of their ultra-secretive vaults and nobody would know. The list could go on and on.

I n -d e e d there are plenty of countries that are designated as ‘tax havens’ by international fi -nancial organisations such as the IMF. The U.S. National Bureau of

Economic Research estimates that roughly

15% of sovereign countries off er diff ering schemes to

entice foreign capital to enter their markets. Plenty to places to screw your country out of potential

tax revenue. One of the common character-istics several of these

nations share is that they tend to be small, affl uent countries that would otherwise be unable to

compete for foreign capital.But is it morally right to keep

everything for yourself? Surely giv-ing a portion of what you earn to the state you live in is fair considering you benefi t from the vast array of

public goods the state provides, from law and order to

the upkeep of public amenities.

However, m o n e y has a ten-

dency to warp one’s moral com-

pass, and the opportunity to save some dollars through some harm-less creative accounting is often to much to turn down.

So if you were faced with a huge tax bill could you countenance handing over a sizable chunk ofl your hard earned cash to the greedy and bureaucratic government? Think of the temptation of running to a lovely palm tree-lined beach (or to a country mainly under sea level) – the favourable tax laws could prove hard to ignore. Would you take the money and run? You’d have to balance the moral ques-tion of whether you could live with leaving your own citizens with con-siderably less in the pocket. If you were to take this option, you might face the backlash of the majority of people. But you defi nitely wouldn’t be the fi rst.

After creeping cautiously through the depths of my own dubious fashion choices, I came to the

horrible realisation that the fash-ion industry must control what we choose to buy, wear and inevitably look ridiculous in. That is the only logical explanation for the fact that as teenagers we marched defi antly into Arnotts and bought ourselves shoes specifi cally made for sailing (at ninety euro a pop) to wear with our uniforms and if you were really committed, twinned with jeans at weekends. It must also explain why collars were once worn popped, tracksuits came automatically with “bum statements” and every-one had a rubber yellow bracelet adorned to their wrist but didn’t quite know why.

As students we are constantly pressured to keep up with trends as the fashion industry continues to run out of ideas and churn out more absurd paraphernalia to purchase and brandish. Sure, capitalism al-lows us to choose which unspeak-able fashion trends to be victim to but the reality is that there are arti-cles in your wardrobe that you will

in time undoubtedly want to burn, or at least cut up into something equally repulsive that is by then in fashion. The fashion industry con-stantly bombards us with bizarre pieces which suddenly grow on us when we begin to notice so many being walked proudly through the Arts Block. Unfortunately, the in-tense pressure we feel to keep up to date with fashion makes us tempo-

rarily blind to the fact that the next biggest thing is more often than not, fairly hideous. If we are lucky enough to fi nd jobs, our dispos-able income goes directly into the pockets of the owners of the biggest

clothes shops because there’s al-ways something you need... Like fl o-ral culottes for next summer’s vague plans of a J1 or a cut-price reindeer Blackberry cover for the two weeks of the year you wouldn’t be smacked across the head with it.

The majority of the business world is scrupulous about their ne-cessity to appeal to the vast student market and they try incessantly to use fashion to market their product. Take that infuriating advertisement for Meteor located in the caverns of stereotypical party settings in which students (obviously only cus-tomers of Meteor) fall around, fi lm themselves and generally act like total and utter ‘ledges’. Spending your night texting at a party is after all, the epitome of cool. What Mete-or was attempting very badly to do here was to communicate that com-mitment to their company is a very necessary part of the experience of being young and fashionable.

Men may escape the hassle that women face to replicate outfi ts from Gossip Girl while dashing for a 9am lecture but they are exploited by fashion nonetheless. It’s an abso-lute must in most circles to wear the

right brand of shoes, buy the right beer and attain tickets to that band or match that e v e r y o n e ’s referring to in their Face-book status. The very fact that al-most every beer advertisement that reaches our screens features a party of well-dressed, gor-geous

and ap-p a r e n t l y h i l a r i o u s m o d e l s is proof that the f a s h i o n i n d u s t r y does dictate our consumption choices. In fact, take away the beer a n d most could double as very dull clothing advertisements. What

we really need to see is a drinks advertisement with catastrophi-

cally hung-over students sitting around the Pav in a degenerated

version of the clothes they wore out night before, won-

dering just how it was that they got there and where

those burnt Dubarry’s came from.

We can’t all be fashion-able all the time.

Is fashion wearing us out?

THE FASHION INDUSTRY CONTROLS WHAT WE

WEAR, BUY AND INEVITABLY LOOK

RIDICULOUS IN

Hannah Popham discusses the dark underbelly of fashion

How to screw your country out of millions

“UNFORTUNATELY THE TAX IS

GOING TO WANT A SLICE OF YOUR

CAKE”

“MONEY HAS A TENDANCY

TO WARP ONES MORAL

COMPASS”

Antony Wolfe offers useful advise on outwitting the tax-man and reataining your hard earned cash from the obese state

OPINIONTHE BULL 19.09.201114

The choice between Investment Banking (IB) and Sales & Trad-ing (S&T) might, on the face of it, appear quite trivial. Howev-

er, they are in themselves, altogeth-er entirely diff erent. IB for the most part concerns itself with primary markets (the new issue market e.g. initial public off erings, rights issues, bond issues etc...) while S&T deals with the secondary market (e.g. the stock market).

Despite the name, IB has little, if anything to do with investing - a common misconception, but

rather relates to the provision of large scale banking services to huge corporations. For example, investment banks would deal with FTSE 100 and S&P 500 companies and provide them with short term loans to fi nance acquisitions, credit facilities similar to an overdraft, access to equity and bond markets when they need to raise funds, and

provide overall strategic advice on the fi nancing and direction of those companies. Bankers generally deal only with the most senior people in those corporations, normally begin-ning with the Corporate Treasurer when dealing with fi nancing issues, and continuing right up to the CEO and Board of Directors when con-sidering M&A (mergers and acqui-sitions).

IB operations are divided by product group (Debt Capital Mar-kets (DCM), Equity Capital Markets (ECM), M&A, Leverage Finance, Risk Solutions etc...), sector (e.g. industrials, natural resources, retail etc...) and geographic region (UK & Ireland, Nordics, CIS etc...). Sector and country coverage teams work closely with their colleagues in the product teams to ensure that diff er-ent clients in diff erent regions and industries are covered for all their needs. For example, a UK based mining company looking to acquire an Australian competitor will meet

with investment bankers from the mining sector team, Australian cov-erage and, M&A (DCM and ECM if fi nancing is required).

Investment banks have a very hierarchal structure with the ana-

lysts at the bottom and directors and managing directors (MD) at the very top.

Analysts essentially carry out the ‘heavy lifting’ and analysis, putting together the marketing materials and pitch books which the MDs then pitch to clients for potential transactions. Depending on the team, some analysts will get

quite a lot of exposure to clients and will meet with and speak to them regularly, often travelling interna-tionally for meetings and pitches. However, the bulk of the work done by analysts will relate to careful fi -nancial analysis, pain staking atten-tion to detail and intricate fi nancial modelling.

IB has a pretty well known repu-tation for having intensely long days in the offi ce, and during deal time bankers might work upwards of (and often more than) 100 hours per week. While this reputation cer-tainly does have a basis in reality, hours worked will vary dramatically between teams, sector groups, and product groups. DCM for example have more market oriented hours as they focus on placing bonds in the market, while M&A might have to work fl at out to ensure that their deal gets executed perfectly. Nev-ertheless, hours in IB are long and people work extremely hard, but it is an excellent and exciting industry

to work in and provides a brilliant foundation and training for most other areas of fi nance with many industry veteran moving into hedge funds, private equity, and venture capital.

As for applying and applications, internship and graduate scheme applications are generally accepted on a rolling basis begging the end of August, so make an eff ort to get it in early. Applicants are expected to have decent grades (expected 2.1) and at least some extracurricular activities to their name.

With regard to a CV and cover letter, try stick to a page for each, summarise your experiences, ex-plain why you would be an excellent hire, and try express your enthu-siasm for the challenge and desire to learn as much as possible. IB is a fascinating industry full of excep-tionally bright people so it really is an excellent opportunity to work with and learn from the best.

By The Anonymous Banker

The year 1929. Black Tues-day. The dot-com bub-ble. These words spook speculators everywhere and are synonymous with one phrase; Stock Market

Crash. Crashes grate with economists, and not just because they rarely manage to accurately predict them. The standard model economists apply to the markets does not account for a freak crash event, referred to as an ‘outlier’ by statisticians. Over the past few decades physicists have collaborated with economists and looked at new ways to incorporate outliers into economic models.

Many readers will be familiar with the ‘Black Swan Theory’, developed by Nassim Nicholas Taleb. Taleb made mil-lions betting against the market. He rea-soned that 364 days of the year he would lose, but when the market went haywire he would win very, very big. His funda-mental premise was simple; the price of stocks and derivatives do not refl ect the risk of a crash in the market. This leads us to the rather sobering conclusion that markets may not be ‘effi cient’ as capital-ists worldwide would have us believe. So where does this defi cit of effi ciency originate from? Students of economics will be familiar with the ‘Black-Scholes Model’ for valuing derivatives. One of the assumptions of the model is that mar-kets exhibit ‘Brownian Motion’, fi rst de-scribed by Einstein in 1905 and more el-egantly known as the ‘random walk’. The hypothesis of Black-Scholes is that the

motion of a market is inherently random, and thus the probability of a dramatic de-cline in the value of a market is extremely slim. A quick glance at the ISEQ circa September 2008 pretty much rubbishes this hypothesis.

So if the widely used Black-Scholes model is defi cient, where can we look for more clarity? This is where the physicists come in. Physicists are interested in the

distribution of data. I can attest to this as a fi nal year TP student who has spent three years trying to fi t lines onto some pretty dodgy looking data. Plenty of potential distributions have been put forward, with the common trend that they all account for ‘outliers’ in the data. One of the more interesting proposals has been to equate stock market motion and seismic activ-ity. On a day-to-day basis there is minor activity, an occasional tremor, and then every ten years a Fukushima type event comes along causing widespread destruc-tion. Some equate the latest falls in the markets to the ‘aftershocks’ following a major earthquake. That said the Morgan

Kelly’s of this world would maintain that the big one is still to come!

The stock market crash of 2008 has brought the fi eld of econophysics back into the limelight and a considerable amount of research is shedding new in-sights into market behaviour. While it may be the case that the market is just too complex to ever fully understand or model with total certainty, progress has and will be made into developing a more refi ned method for predicting the rise and fall of the markets. Who knows, it may even keep this writer in some form of a job!

Tremors in the MarketplaceECONOPHYSICS IN THE 21ST CENTURY

Jack McHugh investigates recent collaborations between physicists and economists to understand stock market fl uctuations

The secret diary of an investment banker

INVESTMENT BANKS HAVE

A VERY HIERARCHICAL

STRUCTURE

› Dismiss the theory of relativity, it’s money makes the world go round.

15OPINIONTHE BULL 19.09.2011

Networking is a time-honored art used by university students across the globe. Think of it as creating contacts and building relationships

with the right people to give you that little extra umph when applying for jobs. It is always handy to call on a contact when waiting for the interview process and further rounds. With some tips and tricks for getting ahead in the art - or shall I say game, of networking, this guide is sure to help you for the upcom-ing careers week and beyond.

The fi rst, and most obvious trick is simply being prepared. Knowing the names of a number of professionals that

you would like to speak with will help them remember you and make

it more likely for them to help you in the future. Furthermore, research

the individuals and companies that are going to be at the networking event/party/social. Even if you can use your 3G phone to look up their ‘Linked in’ ac-count during the talk, it will help prepare you for the after party. This shows the professional that you have done your research and are serious about making contacts.

If perhaps you have not learned the names of any professionals beforehand or what they do and in what business, ensure you make an extra eff ort to re-member what they tell you. If you forget, it does not give a good impression and you may fi nd it diffi cult to keep contacts in the future.

When starting a conversation, be sure to say hello fi rst. Hold out your hand, smile, and give a fi rm handshake. There is nothing worse, and more forgetta-ble, than a weak handshake. Think of yourself as the person that everybody will want to talk to you. Be positive and energetic.

The networker should come up with a few things to say which can start or continue conversations. If, for example, during your research you fi nd out about some charity work that the professional has done, make sure to ask about it and show some interest in it. People like tak-ing about themselves, particularly if it is

as noble an act as charity work. Another talking point is about the networking event itself, “Do you come to a lot of these events?” for example. Listen more than you talk. However, do contribute something interesting and relevant to the conversation. A handy way of doing this is by keeping abreast of current events and having something interesting to say about it.

Probably the most important aspect of making successful small talk is to stay focused on whoever it is your talking to. Do not glance around the room at others talking.

The main goal of attending network-

ing events is getting business cards. A college appropriate way of thinking about getting business cards is to think of it as getting the number of a girl/guy in a nightclub. It’s a game. But do take it seriously. Business professionals can smell bulls**t a mile away.

When given a business card accept it as a gift. Make sure to take a second or two to read the business card and then put it away in a shirt pocket or a wallet. The main thing is that you show that you appreciate the gesture and have enjoyed talking to the professional.

Once the all hallowed business card has been attained, be gracious but be brief. Stay and chat casually for a very short time, but do not split as soon as the business card is handed over. Have a few reasons to leave the conversation. A handy one is a trip to the toilet or to get a new drink – be sure to off er to refi ll the professionals’ drink also, don’t be tight.

My fi nal tip is one which may go against everything students learn at university, despite a probable free bar do not get drunk, for obvious reasons.

A FEW weeks ago I attended an event for careers advisers at KPMG in Dublin. This year, KPMG will be recruiting around 300 graduates, the majority into the audit func-tion. Last year 290 graduates joined the fi rm, but 1600 applied and 500 were interviewed.

What those fi gures tell us is that if you get to the in-terview stage, you have a pretty good chance of getting a job off er.

Why did 1100 applicants not make it and why are simi-lar numbers of applicants not successful in other parts of the fi nancial services sector? The answer is that the qual-ity of the application, whether through online application form or CV, wasn’t good enough.

Below are four common reasons why fi nancial services recruiters will bin your CV.

SPELLING MISTAKES, TYPOS, GRAMMAR AND SYNTAX ERRORS

ABOVE ALL other industries, the fi nancial services sec-tor is concerned with accuracy. Spelling mistakes and typos, in particular, show that you are not attentive to detail. And if you are not detail focussed in a document which may land you an interview, the recruiter believes that you will be equally careless when it comes to fi nalis-ing a set of accounts or writing a report for an investment client.

USING GENERIC CVS AND TEMPLATESEVERY POTENTIAL fi nancial services recruiter is unique both in terms of their business and the type of candidate they are seeking. They expect candidates to tailor their CVs to fi t the business and to demonstrate the relevance of their education and experience.

Don’t be tempted to cut and paste your details into the word processing template. The chances are that the re-cruiter has seen 50 other CVs that look exactly the same and your CV will end up in the reject pile.

TOO VAGUECVS SHOULD contain enough information to help the recruiter to make an informed decision about your skills. Too often someone writing about a summer job simply lists the job title or at best some of the tasks they did as part of job. There is a huge diff erence between “Credit collection clerk” and “I worked in the Credit Collection department of XYZ plc. During my eight weeks there I successfully collected €150,000 thereby improving the company’s cash fl ow”.

It’s a bit like a friend saying “I went walking at the weekend”. What they didn’t say would put their walk into perspective – they took part in the Irish Orienteering Championship classic distance event, walked for 15km, over open mountain terrain in poor weather, climbed 475m and had to help a colleague with a badly sprained ankle. See the diff erence? It is all in the amount of detail given, without getting too detailed!

ACHIEVEMENTS ARE NOT COMMUNICATEDYOUR CV has to diff erentiate you from other candidates. For instance, you may have achieved an overall 2.1 in the annual exams but maybe within that composite result there are a few fi rst class honours for particular modules, essays or projects.

Many roles within the fi nancial services sector require a high level of quantitative skill. Perhaps your fi nal year project required you to use EXCEL to analyse data and perform calculations. But you went further and learned how to write some macros to make that analysis easier. You need to say so because the recruiter is not going to make any assumptions about your skill level. They will just pass on to the next CV.

The Careers Advisory Service has many resources to help you over the coming months. There is advice at our website (https://www.tcd.ie/Careers/students/job-search/apply/write_your_cv.php) and in the Careers Ser-vice Guide. Every Tuesday afternoon (2.15 – 3.15 p.m.) during term there will be an adviser available to review your CV at our CV Clinic.

Sean Gannon is Director of the Careers Advisory Service

HOW TO...

CREATE A HIGH-IMPACT CVFOR FINANCIAL SERVICES

HOW TO...

Network like a boss

THINK OF YOURSELF AS THE PERSON THAT EVERYONE

WANTS TO TALK TO

OPINIONTHE BULL 19.09.201116

It is not diffi cult for one to as-cent to the belief that Shane Ross has lived a charmed life. The presence of this man in Leinster House, a man who achieved glittering success as

both a stockbroker and a journalist before answering the call of public offi ce, off ers reassurance to those disillusioned with the Irish political class.

Ross’ charisma and sociable charm have clearly been a notable asset in his career to date, with the former Trinity senator topping the poll in the Dublin South constitu-ency in the recent general election. Indeed, given his highly successful career in the private sector it seems intriguing that Ross decided to call time on his travails, and enter the now somewhat infamous world of politics, where reputations are eas-ily tarnished and good intentions fall by the wayside.

“The dire straits of the economy was one reason”, Ross off ers on the motivations behind his involve-ment in politics. He fi rst ran for public offi ce in 1983, securing elec-tion to the seanid as one of the TCD representatives. At a time when individuals and fi rms were facing tax rates in excess of 60%, Ross felt he had “an alternative to off er to the failed tax, spend and borrow-ing policy at the time”. Moreover, of signifi cant importance to deputy

Ross was the “utter illiberalism” of the time. Against a backdrop of so-

cial conservatism, Ross strove to ad-vance civil liberties and guarantee the rights and freedoms in a church dominated society which struggled to embrace progressive thinking.

When pushed on whether he feels he has achieved his initial po-litical aspirations, Ross is notice-ably humble, a characteristic poli-ticians are not typically known for. “That would be a terrible thing to claim; no is the answer to that”.

However, Ross does admit that the so called liberal agenda with which much of his early political ca-reer was dedicated to, has “to a large extent, been achieved”. Given his fi -nancial credentials, Ross is obvious-ly well placed to comment on the current government’s performance in tackling the economic crisis.

He is vocal in his criticism of the economic strategy of the coalition, commenting that “this government has no real aspirations left; its only aspiration is to fulfi ll the wishes

of our foreign creditors”. Indeed, Ross’ own policy stances diff er starkly to those held by the current government.

He is unequivocal in his belief that a sovereign default is of fun-damental necessity. He pulls no punches in his condemnation of the Fianna Fail led government which negotiated the EU/IMF bailout, a deal which Ross believes to have been a very poor deal for Ireland. “Essentially”, he claims, “the gov-ernment bottled it”. His conviction in the principles of the free market clearly informs his claim that “the full responsibility should never be borne by the borrower alone” and thus “burning the bondholders” should be considered.

With regard to the upcoming budget, Ross accepts that “it’s an incredibly diffi cult balancing act” to reconcile economic growth with cuts in public expenditure. He out-lines the desperate need for inno-vation and forward thinking when considering budgetary cuts. He points to specifi c examples of prof-ligacy in the state sector, namely FAS and CIE, and believes there is defi nite scope for cuts in these no-toriously wasteful state bodies.

Moreover, Ross advocates a more imaginative tax policy. He champi-ons a cut in the corporate tax rate to a level below 10%. Clearly, any such measure to increase corporate

tax competition would irk our Eu-ropean neighbours. However, Ross is dismissive of any such concerns and bemoans the apparent political “subservience” Dublin has to Brus-sels. Ross points out that export led growth is our best hope of emerg-ing from the recession and as such, “it’s the area of the economy which we ought to be trying to encourage because we know it’s there and we know it’s worked in the past”.

As Business editor of the Sunday

Independent, Shane Ross exposed the waste and extravagance at the state training agency FAS, a revela-tion which earned him Journalist of the Year award in 2009. His mission to cut the profl igacy in the public sector has not waned in the slight-est. He is incredulous at the exorbi-tant pensions and bonuses continu-ally paid out to top civil servants.

He claims that “at the top of the civil service things are absolutely crazy and lump sum pension pay-ments should be abolished forever.” He is very quick to commend the

selfl essness of many lower paid civil servants, who have already taken eff ective pay cuts. He bemoans the reality that “there are passengers there who are being paid too much while there are some great people there who are being paid too little”.

As a former TCD alumnus, Ross is understandably worried by the university’s slide down the world rankings in recent years. However, he is adamant that a fees based system is an undesirable means of boosting education standards: “I passionately disagree with tuition fees. I think it’s absolutely essential to have an equal right with regard to education”.

Ross’s stance here is commend-able but he concedes that the age of free education may be in its twi-light years. He agrees in principle that a state loan system, similar to the one currently employed in the UK, would be an eff ective means of boosting university funding while ensuring no one is denied an educa-tion on the grounds of inability to pay.

As such, it is evident that Shane Ross is somewhat of a political vi-sionary, willing to question the sta-tus quo and strive to realize a more liberal, fair democracy. In that con-text, while one may not agree with the views advanced by Ross, one cannot meaningfully question his political integrity.

Bringing innovation to politicsThis week, Owen Bennett spoke to Shane Ross TD, Trinity Alumnus and Sunday Independent Business editor regarding his political career and the future prospects for Ireland Inc

WAS IT FOR THIS OUR STUDENTS SUFFERED FOR

SO MANY YEARS?

WAS IT FOR THIS OUR STUDENTS SUFFERED FOR

SO MANY YEARS?

WRITE FOR THE BULL Email us at thebull.tcd@mail.com

17OPINIONTHE BULL 19.09.2011

THE NAME, ‘The Bull’, is inspired by the famous Wall Street Bull, and also the aggressive optimistic bull market phase in a business cycle. The Bull is primarily aimed at stu-dents with a keen interest in eco-nomics and fi nance but also strives to accommodate those not familiar with the often tricky technicalities of the subject.

The Bull is a non-profi t publi-cation and is operated on a purely voluntary basis. The Bull is an in-dependent newspaper under the Trinity Publications umbrella thus maintaining full editorial control while also being an associative pub-lication of Trinity investor’s Soci-ety.

The rationale behind the paper is to fi ll the gap in Trinity’s publi-cation market for economics re-lated journalism within the college. While Trinity News and Univer-sity Times both have small business sections they primarily focus on general college news and SER does not publish frequently enough to give students a true insight into the macroeconomic, fi nancial and po-litical worlds.

We believe that very few socie-ties in the college off er real value for their members. The majority of societies rely on exceptionally gen-erous donations from outside or-ganisations. These money wells are

beginning to dry up, whether you blame the recession or bad man-agement is up to you. It is with this belief that we decided to create a platform for our members, and non members alike, that would allow interaction on both the society and college level.

It is to be stressed that there are no social constraints on involve-ment with The Bull. We are deeply opposed to nepotism, The Bull only bases its contributors and staff on merit. We believe that our work should represent the people behind the paper, and not the other way around. At the end of the day all we care about is the satisfaction of our readers.

It is those same readers that have demanded our paper. One el-ement that inspired The Bull was the quantity of economic related opinions being expressed on social networking sites. It was quite clear that our generation has become addicted to information about the global economy.

Despite our obvious interest of economics, it is quite clear there are many misconceptions on what others would consider basic funda-mentals. We do not desire only to educate other students but instead can learn a thing or two from them.

We instead pledge to spend the necessary time researching rel-

evant issues to ensure our paper is both interesting and fundamentally sound.

Articles will range from uni-versity news to home and interna-tional aff airs, from bleak moments of economic despair to epic mo-ments of fi nancial euphoria, from career advice by seasoned veterans to features on managing personal fi nance.

Our staff will, throughout the year, invite notable speakers to our college to both speak on ma-jor economic issues, and to inspire students to really examine the eco-nomic world. As such, we would like to invite all students and staff to consider contributing to our monthly spread .

As the year progress, The Bull will endeavour to bring students the most current stories as well as the best quality analysis.

The Bull is brought to you in as-sociation with Trinity Investors so-ciety. The newspaper is funded by both TIS and Trinity Publications and will have regular contributions from the staff and other outside professionals.

For more information please contact Ian O’Connell by emailing thebull.tcd@gmail.com.

EDITORIAL:

TRINITY PUBLICATIONS LAUNCHES IRELAND’S FIRST STUDENT RUN FINANCIAL NEWSPAPER

IRISH UNIVERSITIES reputation has suff ered again after publication of the recent QS University World Rankings. UCD has moved down to 134, DCU up to 326 and DIT falling at least 6 places. In particular, Trin-ity College, formerly 42 in 2009, has fallen to 65. The good news is that we still outclass our main rivals and can still shout “couldn’t get the points” at other colleges during in-tervarsity events. The bad news; we can no longer boast to being a top 50 world university. This is obvi-ously a major blow to TCD, but also Ireland and our perceived world class education status.

Many students in my year choose TCD not because of the unique campus, infamous social scene and to rightfully drink in the Pav, but choose because it is Ireland’s top ranked college and is comparable with top global universities. How-ever, it is possible that those same people, who picked number 42, will graduate from a college not even in the top 100 if current trends remain the same.

Our major downfall is the methodology of the QS University Rankings. Half our rating is based on our reputation globally and by employers. Our ranking undoubt-edly slipped in this section with Ireland’s reputation in tatters, and unemployment exceptionally high. Another 20% of our rating is de-termined just by a faculty student ratio. In light of Ireland’s economic health, it is understandable that our score in this section has plummet-ed in the past couple of years. With college budgets being cut, surely the faculty to student ratio has af-fected our score negatively.

Patrick Prendergast, our new provost, is on record as saying our college budget is only 66% of our English counterparts. The third

level funding crisis is crippling our universities as we are lacking a consistent and adequate fund-ing base. TCD needs more money if they wish to compete worldwide. It seems counter-intuitive that Ireland spends less on education when the country’s fi nances are low. Surely one would reason that a strong education system would help lift Ireland through diffi cult times.

Having said that, there is abso-lutely no short term benefi t by in-creasing the colleges’ budget. The government could invest in our ed-ucation but they would not see any return for at least a few years. An undergrad takes at least three years to start and fi nish college. How helpful can the graduate be in their fi rst few years working? Throwing monies into education can be con-sidered money down the drain by some. Given that there are few jobs out there, that is the value of a per-son with a degree to Ireland if peo-ple are emigrating to fi nd work, or worse, not emigrated and on social benefi ts.

Inevitably, third level colleges will need an increased funding base. Most likely, student fees will need to be implemented. In or-der for fees to be accepted, there will need to be a system of lending money to students for tuition. Such a loan would need to be backed by the government who don’t have the resources for such a scheme. It would seem that our institution is doomed to slide further and further down the rankings.

The students of Trinity how-ever, shouldn’t lose too much sleep because, if nothing else, they can rest assured in the knowledge that they can still sing “couldn’t get the points” at UCD, DCU andothers not worth mentioning.

EDITORIAL:

THE UNIVERSITY RANKINGS

BY LOUISA MILLERWelfare Offi cer

A LOT of you young folk will be learning the ropes about keep-ing the money in your pockets… My advice to you- Leave your la-ser at home! When you’re out on the town, the drink is in you think you’ll be great and buy everyone a drink.. You wake up the next day and the pain you feel ,is sorely wors-ened by the feel-ing of seeing the receipt(s)! Then further worsened by the hunger in your belly at the end of the month when you have a tenor for food. Who do you have to blame? Well let’s just say you can’t exactly blame Fine Fail for eve-rything….

Having learnt my lesson the hard way(and every now and then I learn it again) only bring out what you can aff ord to bring out.. The taste of the actual dinner you have at the end of the month will be far tastier if it isn’t the pot noodle you got free in Fresher’s week!

Second rule of saving the pen-nies: If you’re in a position to do so get of your lazy behinds and walk to college or make a capital invest-ment of a lovely bike! You’ll feel the benefi ts in your t h i g h s and buns and

your wallet strings! Even I man-aged to cycle for three years to col-lege and not get knocked down…. And I’m from the back and beyond in Laois (proper country!) where there are only tractors on the road

I know you’ve heard it a million

and one times before at this stage but seriously: You only get out what you put in! And it can defi nitely save you a whopper amount of cash but get involved in a club, society or sports club. You don’t need to be a theoretical physics student to work

out that volunteering for VDP won’t cost you any-

thing but time, swim-ming in the sports cen-tre that you’ve already paid for won’t cost you any more than you’ve already given….you get the point…

Right youngans I’ve one last piece of ad-vice- Buy a fl ask! Stop buying coff ee and tea and bring some hot water. They say you have to spend money to make money. Well

in this case spend money to save yourself a mini gold mine. So

many students spend a P-Diddy amount of mon-

ey on coff ee and tea… and you know what. it’s a waste of money! Ye- every now and then perhaps treat yourselves! But for now , if your tight on the money you have to make these sacrifi ces.. If you look after the pennies the pounds will look after themselves..

It’s all about the money

FEATURESTHE BULL 19.09.201118

Trinity Student Managed Fund was founded in November 2009 and is the first

student managed fund in Europe. Trinity SMF constantly strives to improve the

standard of performance and professionalism of our team with a view to increasing

competitiveness on a global scale.

26th September - Week One

30th September - Submission Deadlines

3rd October - Trinity SMF Induction

For more information or to apply for a role in this years team please visit

www.Trinitysmf.com

BY TRINITY SMF COMMITTEE

TRINITY STUDENT Managed Fund (Trinity SMF) was founded in November 2009 and is the fi rst stu-dent managed fund in Europe. The primary goal of the fund is to create an unparalleled and self-sustaining invaluable resource for the educa-tional development of future Trin-ity graduates within a secure gov-ernance structure, bestowing upon them experience in business analy-sis, investing and risk management

Operating a real-life fi nancial portfolio under the guidance of industry experts, Trinity SMF is a non-remunerated organisation managed by students, with a sec-ondary mandate to invest in our community through donating a proportion of profi ts to some of the many worthwhile endeavours un-dertaken by Trinity College chari-ties.

Trinity SMF constantly strives to improve the standard of perfor-mance and professionalism of our team with a view to increasing com-petitiveness on a global scale. The organisational structure operates as a pure meritocracy with clear in-centives for performance and as the fund grows in stature and age the Trinity SMF alumni network will be among the strongest in Europe.

This year the fund is led by Colum Horan, a Senior Sophister Business & Economics student. Colum provides strategic direction for the fund but most importantly is the key link between the invest-ment and management arms of the fund.

The investment team is led by Donal O’Cofaigh, a fi nal year Eco-

nomics foundation scholar. The macroeconomic team lead the way off ering analysis on overall mar-ket direction and from which the Portfolio Committee can make dif-fi cult decisions on sector weighting. However it is the work of the Sector Managers and their teams which are the key to the fund’s success. Each sector team covers a specifi c indus-try and analyse companies within their remit. After careful analysis the sector teams pitch a stock to the Portfolio Team. After much delib-eration the decision whether or not to invest is made. The portfolio con-struction to date has followed this process and has resulted in a strong outperformance in what has been a diffi cult market over the past num-ber of months.

The management of the fund is led by Patrick Lynch, a fi nal year Business and Economics student. This team of seven students from a variety of courses and years ensure the smooth operation of the fund, a diffi cult task with over 120 students each with hectic schedules. The management team is also respon-sible for all fundraising initiatives taken and the hosting of our corpo-rate partners on their upcoming re-cruitment drives to campus.

The Trinity SMF model is unique being an entirely student managed fund with the investment deci-sions resting with students, and not with the Business School as is the case with similar funds in the US. This top level student involvement gives Trinity student exposure to many opportunities and does re-

sult in pressured decision making situations. However the model has proved a success, and we are con-fi dent that the structure created will serve as a blueprint for aspir-ing student managed funds through throughout Europe.

The money that Trinity SMF invests comes primarily from cor-porate sponsorship. Our current partners include BlackRock, Davy Stockbrokers, AIB, Deloitte and RBS. We have also received funding from the Trinity US Fund, an alum-ni endowment fund for US-based alumni of TCD. Finally, we seek the support of private individuals, both TCD alumni and non-alumni alike, who see the benefi ts of this ground breaking initiative. All monies re-ceived will remain in the Fund in perpetuity with a proportion of an-nual capital gains donated to part-ner charities from the Trinity com-munity also.

Trinity SMF has a secure gov-ernance structure with an Advisory Board made up of industry experts, leading academics, and former Trinity SMF executives. This Board meets with the Executive Commit-tee regularly, serves as advisors to the current SMF executives and are on hand to off er their expertise when needed.

Trinity SMF will be recruiting for the analyst positions during the fi rst week of term and are looking for committed people who would like to be a part of something unique and learn about investing, manage-ment, and fi nancial markets. If you would like to get involved or fi nd out more please visit www.TrinitySMF.com.

What is Trinity’s Student Managed Fund?

› Last year’s Committee at the launch of the Student Managed Fund

THE PRIMARY GOAL OF THE

FUND TO CREATE AN

UNPARALLELED AND SELF-

SUSTAINING RESOURCE

19FEATURES THE BULL 19.09.2011

AT THE time of writing, Trin-ity Student Managed Fund’s invest-ment portfolio is down 4.8% since its inception in February 2011. Al-though this is not close to where we would like our returns to be, there are various factors that contribute to our belief that our inaugural in-vestment fund has performed well to date and that the soundness of our investment process remains intact.

A key point to remember is that the Trinity Student Managed Fund is unlike most investment funds that people will have come into con-tact with before. The fund is run on an absolute return basis, meaning that our overall investment goals are just that: capital protection and a positive return on that capital. A signifi cant consequence of this is that the Fund is under no obligation to track a specifi c index. This format enabled us to take the decision to

remain in 85% cash holdings, with the remaining 15% of the fund in-vested in equity securities.

Although the Fund is run on an absolute return basis, it is always useful to compare our performance relative to the wider markets and indices. Going by this metric, we have outperformed the S&P 500

and the FTSE 100, which are down by 9.1% and 11.75% respectively since February 2011. This outper-formance of broad market indices is seen in many professional ab-solute return funds also and is an example of how the fl exibility of an absolute return fund can be a huge advantage in hugely volatile market environments, when other types of fund face considerable benchmark restraints.

Another key point to bear in mind when looking at the Trin-ity Student Managed Fund is our investment horizon. The Fund op-erates on a medium to long-term horizon, with any prospective in-vestments analysed on the basis that they would be held for 2-5 years in an ideal situation. This time hori-zon is of course very fl exible, with free reign to exit an investment if the underlying fundamentals or story of a stock change or if a price target is met inside our initial time horizon. Thus, from a fund perfor-mance point of view, we believe that a 7-month period does not give a full picture of the Fund performance.

With these points in mind, we can now move on to look at some of the individual investment deci-sions taken since February. A key aspect of our performance has been the decision to remain largely in a liquid cash position. Due to the fact that we are a long-only and equities-only fund, we are unable to invest in fi xed- income products or other “low risk” securities. Thus the Portfolio team decided to adopt quite a cautious approach and our cash heavy portfolio refl ects this. Although this seemingly infl exible structure may at fi rst seem to be a hindrance, we feel strongly that we can run a very successful absolute return equity fund regardless of

broader market trends, and in the process all SMF members will learn huge amounts about elusive but in-valuable skill that is stock-picking. There will always be value to found in man-made markets, it just gets harder to fi nd it sometimes.

Our stake in Ryanair, although down since the time of entry, re-mains a core part of our portfolio. We continue to believe that Ryanair holds signifi cant competitive ad-vantages in its marketplace and, al-though faced with macroeconomic and commodity-related headwinds, represents good value based on

our long-term investment horizon. The company has industry leading “moat” should there be any further headwinds for the sector and we be-lieve the fi rm is positioned to take full advantage of a relatively weak competitive environment. Above all, we believe in Ryanair’s business model and feel that its returns will show just how good that is over the coming years.

Another one of our core compo-nent stocks is that of Roche Hold-ings AG, a Basel based global health-care company. A stock that exhibits some excellent defensive qualities

is always a good one to have in times of market turmoil, and we believe that we have one of these in Roche. The fi rm has a track record of indus-try leading R&D and has a strong history of converting cash spent on their pharmaceutical research into patents and products, which gen-erate further bottom line growth. Like Ryanair, the fi rm holds a very storing balance sheet position and is well placed to endure any future headwinds caused by economic downturn.

The company also pays a gener-ous dividend yield of over 4%.

PROGRESS REPORT

Looking towards the future

› Ryanair is just one company that the SMF have a stake in

OUR OVERALL INVESTMENT

GOALS ARE CAPITAL

PROTECTION AND A POSTIVE

RETURN

***** Poor ***** Not great ***** Fine ***** Good ***** GreatBOOKS

LIARS POKERBY MICHAEL LEWIS

LIARS POKER can be read, under-stood and enjoyed by anybody with any sort of interest in the culture of investment banks and their trad-ers. Liars Poker contains the ins and outs of the turmoil of the trad-ing fl oor, the dirty offi ce politics and greed of huge fi nancial fi rms. Lewis worked as a bond trader on the fl oor of Salomon Brothers in the late 1980’s before becoming a fi nancial journalist and gives a brilliant fi rst hand account of what it was like to work in the mecca of bond traders in their golden era. A brutally hon-est account of corporate and indi-vidual greed, with hilarious analo-gies, Liars Poker is a great book for anyone from a beginner to current CEO.

ASCENT OF MONEY BY NIALL FERGUSON

Ferguson details the beginnings and growth of the columns of the fi nancial world - credit and debt, bonds, stock bubbles, insurance, mortgages and the current globali-sation of the Western economy.

Split into 6 sections, the reader is given a fascinating insight into fi nancial history that has shaped the world and continues to do so. From a murdering Scotsman being the cause of a stock market bub-ble which inadvertently caused the French Revolution to the establish-ment of the fi rst publicly traded company in Holland in the 1600’s, the Ascent of Money is an eye open-er to anyone who reads it. It has the advantage of being a perfect book to dip in and out of.

THE GREATEST TRADE EVER BY GREGORY ZUCKERMAN

A true account of one quiet hedge fund manager who predicted what very few other people saw in 2008 - the bursting of the housing bubble around the corner. John Paulson for years suff ered abuse at the hands of his peers over his negative but ulti-mately true prophecy of the coming property crash.

In one year, he made $4billion for himself, a number dwarfed by the amount he made for his fund - $15billion, while the worlds fi nan-cial markets collapsed.

A brilliant narration outlin-ing the patience and perseverance needed to profi t when everyone else is losing.

BARBARIANS AT THE GATE BY BRYAN BURROUGHS & JOHN HELYAR

One of the most illustrating sto-ries that captures the corporate greed that defi ned the Wall Street of the 1980s. The leverage-buyout of RJR Nabisco, the biggest in his-tory at the time, saw the best bank-ers of the day desperately battle for control of the company. Burroughs and Helyar, both investigative jour-nalists on the story, combined to write this classic fi nancial novel in 1989. Using hundreds of hours of in-terviews with the people involved, Barbarians is an accurate and vivid account of the levels people and fi rms will both stoop to and rise to in order to make money.

REMINISCENCES OF A STOCK OPERATOR BY EDWIN LEFÈVRE

A book that is on the ‘must-read’ list of almost every newly employed fi nancier. Published almost 90 years ago, this factual account of Jesse Livermore (written by his friend and editor Lefèvre), tells the story of a 14 year old boy who ran away from a life of farming to Wall Street, where he made and lost many for-tunes several times over. Known as the Great Bear of Wall Street for his shorting of the marking prior to the 1907 and 1929 crashes, Livermore was worth at one stage over $1bil-lion in today’s money. A true and inspiring ( although slightly fi ction-alized in places) account of a pen-niless boy with a knack for reading market trends, who made himself a billionaire.

***** ***** ***** ***** *****