Monday 19 August 2019

The Punt: Book on Japan could teach us

Andy Haldane
Andy Haldane

The Punt

The year's financial publishing phenomenon in Japan is the reasonably, if not poetically, titled 'Why Do We Feel So Insecure About Our Future Now?', and was written by Yoshihiro Matsumura, a veteran bond trader at the local Japanese arm of Deutsche Bank.

Japan is the world's most indebted nation in absolute terms, issuing more bonds than anywhere else by some way, so presumably Mr Matsumura has had a pretty good run of things.

Still, having had a ringside seat to the country's desperate efforts to revive a flattened economy through quantitative easing (QE), he's watched a trend that has become entrenched in Europe, and reckons things don't look good.

Vast central bank-fuelled bond-buying programmes are exposing investors to risks similar to the 2008 debt crisis, he reckons. The purchases are "artificially lifting asset prices" and misleading the public, reckons the former trader, who joined the ranks of Japan's retired in 2011.

"From a trader's perspective, the Bank of Japan's quantitative easing framework is outright wrong," Matsumura said. "A dealer always thinks of a strategy with an exit in mind. Policy that does not take into account an exit is unthinkable."

His book has sold more than 10,000 copies, he said. With Mario Draghi set to keep the money presses here printing, it might be time to translate it into European.

The terminator economist

Beware the rise of the robots. It's not quite The Terminator, but Andy Haldane seems to feel we should be a little worried, because jobs are at risk.

The Bank of England economist has made the rather bleak forecast that as many as 15 million jobs are under threat of replacement by smart machines.

And he believes that a "third machine age" is about to hollow out the labour market.

And it seems that the occupations most at risk include administrative, clerical and production.

Low-paid jobs are most likely to be in the firing line first, but others will follow.

Haldane believes that so-called Luddites - textile workers who smashed machines during the industrial revolution - may have had a point.

A bleak, but worrying assessment. Surely they couldn't replace an economist with a robot?

A machine couldn't make such accurate predictions, surely?

Indeed aims to spot the trends

Online recruitment portal's announcement last week of 300 new jobs was overshadowed somewhat by Apple Inc's monster hiring plans, but one element of the expansion caught the Punt's eye.

The group has hired ex-United Nations labour market economist Mariano Mamertino to its Dublin team, to work in house to support marketing and research across Europe.

As part of the "Indeed Hiring Lab", under George Washington University Professor Tara Sinclair, Italy-born Mamertino's role will be to track employment and labour market trends - including using data from traffic on the Indeed site to provide economic insights to media and clients across Europe.

The idea is that official data is often out of date and inevitably backward looking, but by combining it with information mined from the 180 million searches on Indeed each month, Mamertino will identify shifting employment patterns in real time.

It's a theory.

It's also true that banks and property players have long used internally generated economic research to boost their profiles.

Why not recruiters?

Irish Independent

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