Eurozone rumbles

Unemployment in the Eurozone has now risen to 10%. This is quite a staggering figure in a part of the World that is supposed to drive the economy. The news come amidst the International Monetary Foundation’s ( IMF) decision to adjust Germany’s expected growth for 2010 downwards from 1.5% to 1.2%. Seemingly a small adjustment but extremely important in a situation where everything counts in an attempt at avoiding the double-dip. Within the last few days the Eurozone has agreed a salvation package for Greece with a safety net of up to €22bn provided by the other members so another potential splash out at a time when few Eurozone members are in a position to do so. But it needs to be done of course, just as the British Government had to bail out the Royal Bank of Scotland. Although one can imagine a bank, even a bank as big as RBS, to go bust but one can’t imagine a country to go bust – what would happen to a bankrupt country?

UK banks are again in the search light. This time it relates to cash ISAs. In The Times today Andrew Ellson referred to the relationship between banks and customers as a war. In his commentary he refers to the punishment by banks of loyal customers and also to a number of issues relating to the transferral of cash ISAs from one institution to another. The paper also refers to a £3bn/year rip-off of cash ISA customers through miserly interest rates applied to these savings products. The 0.05% offered by Cheltenham & Gloucester, owned by Lloyds TSB, is just one such example. No I think it will take a long time before customers will trust their banks.

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• Eurozone jobless rate reaches 10% (news.bbc.co.uk)

Two down, one to go

With just one more exam to go before the Easter break I’m pondering the fact that the class now have completed two-thirds of their courses – a one-year MBA is a hectic but powerful thing! It’s not just that you get all the knowledge in one year but also the fact that you only have to consider opportunity costs for one year. In favour of the two-year model is of course that things are not as hectic and that students have more time for extra curricular activities. Although judging from the Google group for this year’s MBA class a one-year programme allows for plenty of time for extra curricular activities! And that’s good. Supporting each other is essential in an MBA and the social stuff helps providing the glue for that. But changes are afoot. The students on the MBA in International Business have either left already or are in the process of packing their suitcases to leave for their exchange partners while the students on the full-time MBA programme are now allocating time to get started with their consultancy project. At the same time a selection of students on the Shanghai International MBA are preparing to come to Edinburgh for their exchange so we’ll see some ‘new blood’ added to the classes. It will be very exciting.

Despite my writing so copiously about the MBA programme I do get involved in other programmes and I have some undergraduate dissertation sitting on my desk for marking. I do like to get involved at different levels. Otherwise you can easily end up in a situation similar to ‘group think’ and that’s not good for anyone. And that’s actually why I occasionally choose a different route when going home. It’s the little things that make the difference. why do’nt you try a different route home today? Try it and see the new thoughts that pop through your mind.

A nice bit of news!

I received a letter just before I left yesterday to tell me that the MBA programme had been nominated for a EUSA Teaching Award. EUSA is the Student Association at the University of Edinburgh and it is so very nice when the students show their appreciation like that.

So thank you, and Well done! to the team supporting the MBA programme.

Funny time of year…

Round about this time of the year I always begin to feel a bit dizzy.  Spring for one thing is something very nice to look forward to but it’s actually more the fact that I’ve got half a new class scattered all over the World and a whole class here in Edinburgh, not to mention last year’s class who are still kind enough to drop in or send nice emails. It gets even more funny: at the end of this month the students on the MBA IB programme will go off on their exchanges so the class here is also out there and a few exchange students who have been mine for the last three months go back to their home institutions. Confused? Well. Yes. But No. Somehow I manage to keep track of them. I think it’s my system of separate email boxes that help me place things in the right “compartments”.

So soon a number of my MBAs wil leave for their exchanges, and exchange students from Fisher, ESSEC and EADA will go back to their home institutions.  Good luck to Kara, David, James, Jordi, Julien and Phil!

Sed quis custodiet ipsos custodes?

WSJ Europe today features on its front page the words: “FSA beefs up staff, takes aim at banks”. Apparently the UK Financial Services Authority will now hire several hundred employees to help police banks’ actions in the future. With this move the number of permanent overseers stationed at each major bank is to double. That of course is nice to see but if my memory serves me it was the skills of the overseers that were lacking. Banks had come up with such convoluted instruments of debt management that the average FSA overseer couldn’t assess what was going on. This is to some extent supported by an admission, also in the WSJ Europe edition, by the Chairman of the Securities and Exchange Commission, Mary Schapiro that the SEC was unaware of an accounting method that would have seemed to allow Lehman to hide some of the risks it took. Hence, the headline of this blog entry: “But who will guard the custodians themselves? So can we ask not just for more overseers but more skilled overseers?

You will know that I had the pleasure of attending the MBA fair in Rome last Saturday.  Although the fair was not very busy I found the attendees to be of very good quality and I spoke to a number of interesting people.  If you were there and I didn’t have  a chance to speak to you then please get in touch. I had some time for sightseeing in the Eternal City and I took a day out to meet with my friend Anna. Coming back after a few days away is always hectic and I’ve been rushing around ever since, trying to catch up with even just a couple of days away from the office. What amazes me the most though is that very soon the students on the MBA in International Business will leave for their exchanges and I know for a fact that some of them I won’t see again. After the exchange comes the internship and then the work on the Capstone Project.

Rome this Saturday

As hinted at in my last entry I’ll be off to Rome very soon to attend the MBA Fair on Saturday 13 March, organised by QS TopMBA. If you are in Rome that day and you are interested in taking on an MBA study then I’ll be delighted to speak to you.  You can read more about our MBA programmes by choosing the link in the Blogroll to your right.

Yesterday saw the official launch of the MBA consultancy project for the students on the full-time MBA programme. We have a number of exciting projects this year. Clients include Babcock’s Marine Division, Wood Mackenzie, Martin Currie, Wolfson Microelectronics and the Scottish Parliament. Between now and early June the students will work on this project alongside their classes and also their final project and solve problems for the companies and organisations in question. In June the teams will present their findings and recommendations to a panel from the clients and the School. At the same time the pace has increased for those on the MBA in International Business. Very soon they will be off to undertake their exchanges at Schulich School of Business, Fisher College of Business, EADA, ESSEC Business School, Shanghai International MBA and Nanyang Business School. This means coursework and exams while at the same time deciding how much and when to pack to go abroad and how to organise things if the internship takes them to other locations – this often happens. A busy time.

In between all this I spend a fair amount of time communication with the next intake and it is nice to see the new class take shape. It does of course also sometimes cause some time management issues when I have to communicate with the current and the new class, not to mention an abundance of nice alumni as well.  Well, it keeps me out of mischief.

Speaking of exchange partners: Bye and good luck! to Melanie Caugherty-Diaz who has provided much help and guidance to exchange students coming to and from Fisher College of Business.

Playing by the rules in the Euro Zone

Or not as the case may be!

The crisis in Greece has brought to light issues relating to the history behind the Euro Zone and especially that the rules so carefully outlined at the birth, a maximum debt of 60% of the GDP and a maximum deficit of 3%, have been flaunted repeatedly since day one. Well even before actually. Forelle and Fidler outline in  their piece about Europe’s Original Sin how the leader of Europe have ignored Greece’s soaring debt for years. Their piece also reveals that this might have to do with the fact that one should never be the one to throw the first stone when living in a house of glass. Although never as seriously in trouble as Greece, the rule rather than the exception has been that Euro Zone countries have not met their own target. And largely ignored this except in the very early stages when membership was to be secured. Read for yourself. It makes for interesting reading. In the meantime, the moves to save Greece continue amidst the prospect of strikes as a consequence of the Greek Government tightening the belt. Greece raised €5 billion in the planed bond sale but investors “gambling” on Greece being unable to pay their debts can never benefit the attempt to salvage the Greek economy. I shall refrain from entering the moral discussion of whether investment houses should be allowed to bring a country to its knees…  You may have a  view on that and I would be interested to see your comments pro/con.

So what about my MBA programme?  Well still going strong with the students having almost completed the second batch of courses. Amazing isn’t it?  It feels as if it was only yesterday that I announced the arrival of a new class. Students on the full-time programme have begun scratching the surface of their consultancy project, and some very interesting ones, while students on the MBA in International Business are thinking very careful about whether they need to pack all their textbooks for a three-month exchange in Singapore/China/France/Spain/USA/Canada.  The ability to multi-task is essential for any MBA students and even more so for the student on the MBA in International Business at the University of Edinburgh Business School.

Alongside supporting this year’s class the new class is slowly but surely emerging from the large number of applications. I interview students daily and am lucky enough to get to talk to a number of intelligent people from all over the world. It is obvious that the crisis is still affecting people’s decision so it’s good that we have been able to add more scholarships this year. I hope to get a chance to speak to more when attending the MBA Fair in Rome Saturday next week. See you then?

The problem in Greece

I hope you had a chance to meet us at the MBA Fair in Washington or New York.  Later this month I’ll head off to Rome and a colleague will attend the fair in Moscow. We are very happy to meet you.

I guess many of us recently have been intrigued by what it takes to bail out a country like Greece and how this will turn out. Greece has a deficit that is estimated at 13% of their GDP.  Only 13%. Is this bad?  Well, yes it is. In very simple terms it’s like you spending 13% more than your annual salary. In more exact and complicated terms the Gross Domestic Product of a country is the market value of all final goods and services made within that country in a year.  Add up total consumer, investment and government spending and add to this the value of exports, and detract the value of imports. That’s your GDP. So as you can see it’s not just the value of products that a country can sell to other countries and thereby create an income.  It’s basically everything that happens in a country so if e.g. a car accident happens and people need to go to hospital then everything going into that increases the GDP. But it doesn’t create funds to pay off debts.

The Euro Zone, driven by Germany, is looking into a bail out plan but we seem to be in a Catch 22 scenario.  The Greek Government is unwilling to commit to savings until the Euro Zone has made promises about how much and how the bail out is going to happen. Germany especially is reluctant to commit to anything until Greece have made promises about how they are going to straighten out their economy.  Who will blink first? The Euro Zone probably, because the Greek situation is affecting the Euro Zone as a whole and more specifically the value of the Euro and so is affecting other Euro Zone economies. The Euro has suffered against the Dollar but it’s actually faring better than the Pound. It is now at its lowest since April 2009. Investors are worried about the UK’s precarious fiscal situation. This combined with the uncertainty that always follows national elections has dented the Sterling lately.

But it is not only in the World economy that faces storms and inclement situations. So does the World. Saturday Chile was struck by an earthquake measured at 8.8 on the Richter scale, this is about 500 times stronger than the Haiti quake, killing more than 700 people and this is just the early count mind you. The epicentre near Concepcion the magnitude of the quake meant that cities such as Valparaiso and the capital Santiago were hit as well, and it estimated that 2 million people were affected. Many more bodies will be found once the clearing up begins and all more remote villages have been reached. Luckily the tsunami caused by the earthquake surging across the Pacific Ocean caused less devastation than could be expected. Nearby in France storms have killed more than 50 people, many drowning in the floods caused by the storm.  Some may say that this is not nearly as bad and maybe the devastation is much less but for those loosing near ones and dear ones it can only be bad.