Wednesday, 28 October 2009

Market Concentration Illustrated - Banking Brands after the Crunch

   A terrific illustration here of how the global banking market has changed in terms of its market shares and concentration ratio recently.
This super graphic from Banking Brands shows the brand values of all the major banks by territory, and their market shares and value globally. Interesting to see how small the Middle eastern banks still are + the rise of Santander after its acquisition frenzy in the last couple of years.


John A62

PS Click on the image to enlarge it.

Life Lessons From an Ad Man

   Brilliant video on behavioural economics. Rory Sutherland amuses the audience in Oxford with his talk in which he touches the matter of advertising, re-branding and intangible values. Not only funny, but also very, very interesting. Definitely worth a watch. Available with English subtitles.

John A62

   PS In 11th minute he mentions 'Nudge' by Richard Thaler and Cass Sunstein :) for a brief reminder, click here.

Monday, 19 October 2009

Week Five: How to Pick Stocks?

Hi there,

   This time we had a special guest. The economics teacher, the philosopher, the gardener – the one and only, Mr. Jerome Lee. Besides that, he’s pretty good in shares/stock market thingy. So here’s a small recap of today’s meeting,

   1) Begin with sorting all the shares into appropriate industries, e.g. banking, insurance, mining, pharmaceuticals etc.

   2) Then look at the PE ratio (read more here), which basically tells you how much market confidence there is in a particular company. High ratio indicates stable growth and confidence, whereas low ratio signals low performance and no confidence. Keep in mind that’s just a huge generalization.

   3) And that’s that – later on we discussed options (read more here), contracts between buyers and sellers that give buyers the right, but not the obligation, to buy or to sell particular assets (theunderlying assets) on or before the options’ expiration time, at agreed price.

   4) Jerome also briefly mentioned that ‘in 2010 there will be no growth, stock market will go down again, whereas properties won’t pick up in prices until 2017’ (quoting for future references, I personally think the opposite will happen)

   5) And Jerome’s top tip: look at what is happening to the USD. Basing on the performance of this currency, made your decisions.

John A62

Wednesday, 7 October 2009

Week Three: Corporate Social Responsibility

Hi there,

   CRS, i.e. what big boys have to do to make small boys happy. CSR is a must-have for nearly all large multinational companies. They are responsible for the impact on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere. Some key benefits include,

   (i) Human resources – easier to recruit employees
   (ii) Brand differentiation – build customer loyalty based on ethical values; positive press coverage
   (iii) Employee loyalty – staff staying longer, reduces the costs of recruitment and retraining
   (iv) Employee efficiency – more motivated and more productive
   (v) Relations – improvement of relations with local authorities, government and customers
   (vi) Costs - Reducing resource use, waste and emissions doesn't just help the environment - it saves money, too.

However, there are several downsides as well,

   (i) Priorities – business are too busy with current economic downturn, hence they have to focus on core business
   (ii) Opportunity cost – no time for CSR; distraction
   (iii) Window dressing – CSR just to look good; give good impression
   (iv) Take it over – governments want CSR to take their places as a watchdog over companies

   Click here to download Powerpoint presentation made by Sam and Jitesh (both A52).

Andy Quin, Bellerbys College London principal, gave a speech about school's CSR. Will try to upload his presentation somewhen.

John A62

Friday, 2 October 2009

Book club. 'The economist of the month' award?

Hi everyone! From October we are starting to run a book club. Everything you have to do is to pick up any book you are interested in from the following list, read it and write a review (your opinion, your critical judgement and advice for another students). It is due to November, 1st.

THE BEST REVIEW WILL GAIN AN AWARD 'ECONOMIST OF THE MONTH' (which would perfectly suit your personal statement). Furthermore, be active in different sections of the economics club (economics pub, essay, etc.) in addition to the book club.
If you have questions, ask Rene (economics teacher) or Tatiana (A62).
Thank you.

###All the books you can find in the school library in the Economics section###

1. The no-nonsense guide to Globalization. Wayne Ellwood.
2. The Industrial revolutionaries. The creation of the modern world 1776-1914. Gavin Weightman.
3. The age of turbulence, Alan Greenspan.
4. Globalization, a very short introduction.
5. Vital signs. The environmental trend that are shaping our future. 1999-2000, Lester R. Brown, Renner, Halweil.
6. The Blue Revolution. Land use and Integrated Water Resources Management, Ian R. Calder.
7. Values for the environment. A guide to economic appraisal. J. T. Winpenny.
8. Using the financial pages. Romesh Vaiti Lingam.
9. UTOPIA. Sir Thomas More.
10. China shakes the World, the rise of a hungry nation. James Kynge.
11. The poverty of ‘Development Economics’ Deepak Lal.
12. The State we’re in. Will Hutton.
13. An inquiry into the Nature and causes of THE WEALTH OF NATIONS. Adam Smith.
14. The ascent of money. A Financial History of the World. Hiall Ferguson.
15. Principles of political economy. J. S. Mill.
16. Freakonomics. Steven D. Levit & Stephen J. Dubner
17. Addressing Poverty. Indian NGOs and their Capacity Enchancement in the 1990s Ranjani K. Murthy
18. The economic naturalist. Why economics explains almost everything. Robert H. Frank

Tuesday, 29 September 2009

Week Two: Global Resources

Hi there,

   A quick recap from yesterday’s meeting – 40-minute documentary about the history, current stance and future prospects / threats regarding global resources. How should we manage them in order to achieve a sustainable growth? How can rich countries help the poorer ones? Should they? What are the possible dangers arising from inadequate (ab)use of the world’s resources? These and other questions were gradually being answered during the process of film watching. Afterwards, 20 minutes of discussion in four groups.

Here’s what they had to say,

Group 1

Q. How can poorer countries be influenced into preserving their natural resources?

A. Um, maybe teams of experts to be sent to those countries? Can help at the local, regional and national level – where to allocate what at optimum quantities using efficient technology. Just an idea.

Q. How can we better manage our own resources?

A. ( i ) group of experts set by government
    ( ii ) authority to impose sanctions and fines on firms/institutions that are maintaining activities which cause too much of environmental damage

Q. Do you consider resource management to be a vicious or virtuous cycle?

A. This is a question of finding the perfect equilibrium between growth (development) and environmental preservation. Depends where you find that point.

Q. Why are some countries less inclined to combat climate change; how does this affect other countries who are trying to make improvements?

A. ( i ) incompetent government
    ( ii ) corruption
    ( iii ) financial restrictions -> opt for development -> betterment of society -> no funds for green technology

    ( i ) disincentive for improvement-seeking countries -> wastage of efforts

Group 2

Group 3

Group 4

Representatives of remaining groups are more than welcome to present the groups' views. Yup, can post the answers as a comment to this post, for instance.

John A62

Tuesday, 22 September 2009

Week One: Introduction to Economics Club

Hi there,

   First meeting of school year 09/10 is behind us. The attendance was shockingly high, 30+ people crammed into a tiny 25-30m2 classroom. Oh wells, at least was warm. Dokey, Melina – this year’s chairlady, started off with presenting each section of the Economics Club. Will do the same,

   Blog – run by me. I try to put some interesting (normative statement) links, news and videos. Reviews of economics publications to be expected from time to time. Anyone interested in reading any of the books mentioned on the blog, feel free to contact me. Aye, might post some exemplary exam answers for A-levels as well.

   Forum – administrated by me and Elena. Loads of revision materials available + some sections to discuss economics related topics. Not really active but hopefully with time will attract more users. Shall see.

   Public lectures – Linura is responsible for informing you, me, us when and where there will be a lecture worth attending. Personally, already have an eye on some of them. Important point – it’s for free. Usually held in LSE. Rarely in UCL. For a leaflet with all the lectures in Sept-Dec 2009, click here.

   Pub Economics – Aigul’s and Mika’s joint baby. They came up with an idea to have economics conversations while sipping a pint of beer. The topics usually hover around areas not directly related to A-level syllabus, sometimes not all.

   Student Investor Challenge – one of the competitions I look forward most to. Teams made up of four members compete against 10,000 other teams in UK-wide challenge in which the aim is to invest 100,000 of virtual money and after three months finish with the highest possible profit. Know nothing about shares/stocks/securities/bonds/trusts. Will be fun. Oh, might work as an incentive – a trip to New York + cash is up for grab.

   Essay competition – held jointly by Bellerbys Colleges from London and Oxford. Every now and then there will be a set topic for both schools, fixed amount of words, one prize. Winner takes it all.

   Book Club – the new thing, run by Tatiana. The concept is simple - you read, you write a review, we publish it, people read your review, people read the book you have read. And so on and on and on. More details here.

   That’s it for now. Next week – Introduction to supply and demand. Monday 5PM, we’re moving to 222-223, be there.

John A62