Jump to content


Photo

How To 'long Labour'


  • Please log in to reply
49 replies to this topic

#1 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 02:11 PM

I was ruminating the other day about how you 'go long labour' in a future characterised by demographically induced labour shortages. I came up with the idea of labour backed bonds in which you invest in a mutual fund that educates young people in a given specialism, and in return these young people promise a %age of their future income for a given period to the fund. Kind of instead of student loans or taxpayer funded education.

In a future constrained more by labour availability than by land or capital shortages, this would likely be the best asset class in which to save. I was thinking like, 'the goldman sachs long AAA United Kingdom PHD medical practitioners 5yr'. That is, the fund invests in the education and training of future medical doctors and takes a percentage of their first 5 years income.

I thought this was a pretty clever idea on my part, but as with all good ideas, turns out someone already thought of it:

http://ftalphaville....e-backed-bonds/

" The world of complex financial products can often seem like a bizarre alphabet soup. To many of those outside high finance, securities like CDOs, ABS, RMBS, and CMBS are nothing more than a jumble of letters. And to many of those who remember all too clearly the economic crisis of 2008-2009, these little acronyms sound downright dangerous.

The problem then was bad assets. The solution is good assets.

And Thackeray Walsh knows where they are. They’re everywhere across our vast country, in our schools, our homes, our baseball fields, even our malls. They’re America’s most accomplished teenagers. And the future lies with them.

But many of them need money. They need it to go to the best colleges, get advanced degrees, and become the engines of America’s economic growth.

That’s where TBBs come in.

TBB is shorthand for teenage-backed bond. Thackeray Walsh has pioneered the architecture for TBBs and plans to launch the first one in October 2013.

That debut is called Genius Trust 2013 (GT). Further issuance of TBBs arranged by Thackeray Walsh will be executed under the Genius Trust© name.

How does a TBB work?

As crafted by Thackeray Walsh, TBBs are very similar to student loans, with a few key differences.

One is that the ultimate lender to the student isn’t a bank, it’s an investor.

When GT launches, for instance, the first batch of investors* to purchase the bond will effectively be lending their money to the batch of teenagers backing GT.

In return, the investors will, after a very long grace period, receive a return on their investment. Those payments will come from a share of the teenagers’ earnings, most of whom will be working adults once the grace period is over, in 13 or so years.

The risk of the bond – whether investors will get their money back and reap an attractive return – lies with the teenagers and whether they become productive, high-earning individuals in their late 20s and beyond.

That’s why Thackeray Walsh’s staff of seasoned bankers has rigorously selected for the highest caliber students. These are freshman, sophomores and juniors in high school that have shown they have what it takes to succeed and become driven, prosperous Americans.

*This explanation simplifies the structure, as the investors holding the bond can change over time, especially since we anticipate active trading in its 30-year life."




#2 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 02:12 PM

ofc injin is going to really hate this.

oh well.

#3 Dorkins

Dorkins

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 7,860 posts

Posted 12 August 2010 - 02:23 PM

Sounds like you want a return to indentured servants. Unfortunately the government has beaten you to it with student loans, which even bankruptcy won't clear.

Edit: I agree that 'long labour', if you can figure out how to do it, is the trade of the quarter century.

Edited by Dorkins, 12 August 2010 - 02:27 PM.


#4 right_freds_dead

right_freds_dead

    northern scum

  • New Members
  • PipPipPipPipPipPipPip
  • 13,560 posts
  • Location:Salford
  • About Me:Tin Foil

Posted 12 August 2010 - 02:25 PM

i dont think younger people would be arsed with your scheme as theres no reward for their work.
i am boethius. author of the consolation of philosophy. it is my belief that fortune is a wheel. inconstancy is my very essence says the wheel. rise up on my spokes if you like, but dont complain when your cast back down into the depths. good times pass away, but then so do the bad. mutability is our tragedy, but its also our hope. the worst of the times, like the best. are always passing away.

#5 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 02:32 PM

Sounds like you want a return to indentured servants.


its no different to a graduate tax (current tory proposal I think), a student loan or whatever.

the point is it is arranged by the private sector, for the private sector.

the second point is that before very long the only asset class that will be holding its value is labour. About time too.

and that means people will want to invest in it, and the market should ensure that the young students get a fair price.

[edit: and of course part of the beauty of it is that it introduces a price signal that transmits information about the skills industry actually needs. You want to do underwater basket weaving? That'll be 20% of your income for 20 years then. Why not consider 'electric drivetrain engineering' instead?]

Edited by scepticus, 12 August 2010 - 02:34 PM.


#6 hotairmail

hotairmail

    Tired of life

  • Members
  • PipPipPipPipPipPipPip
  • 30,418 posts

Posted 12 August 2010 - 02:53 PM

its no different to a graduate tax (current tory proposal I think), a student loan or whatever.

the point is it is arranged by the private sector, for the private sector.

the second point is that before very long the only asset class that will be holding its value is labour. About time too.

and that means people will want to invest in it, and the market should ensure that the young students get a fair price.

[edit: and of course part of the beauty of it is that it introduces a price signal that transmits information about the skills industry actually needs. You want to do underwater basket weaving? That'll be 20% of your income for 20 years then. Why not consider 'electric drivetrain engineering' instead?]


I already put forward this suggestion on this forum and it met with quite a lot of agreement from those not taking on the risk!

"The chicken is radiating disorder out into the wider universe."


#7 lowrentyieldmakessense(honest!)

lowrentyieldmakessense(honest!)

    HPC Senior Veteran

  • New Members
  • PipPipPipPipPip
  • 4,952 posts

Posted 12 August 2010 - 03:03 PM

Posted Image

Educate and inform the whole mass of the people... They are the only sure reliance for the preservation of our liberty.

All tyranny needs to gain a foothold is for people of good conscience to remain silent.
Thomas Jefferson



The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in inequity and born in sin . . . . Bankers own the earth. Take it away from them but leave them the power to create money, and, with a flick of a pen, they will create enough money to buy it back again. . . . Take this great power away from them and all great fortunes like mine will disappear, for then this would be a better and happier world to live in. . . . But, if you want to continue to be the slaves of bankers and pay the cost of your own slavery, then let bankers continue to create money and control credit.

Sir Josiah Stamp, director of the Bank of England and the second richest man in Britain in the 1920s


#8 right_freds_dead

right_freds_dead

    northern scum

  • New Members
  • PipPipPipPipPipPipPip
  • 13,560 posts
  • Location:Salford
  • About Me:Tin Foil

Posted 12 August 2010 - 03:06 PM

Posted Image


haha :lol:
i am boethius. author of the consolation of philosophy. it is my belief that fortune is a wheel. inconstancy is my very essence says the wheel. rise up on my spokes if you like, but dont complain when your cast back down into the depths. good times pass away, but then so do the bad. mutability is our tragedy, but its also our hope. the worst of the times, like the best. are always passing away.

#9 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 03:14 PM

I already put forward this suggestion on this forum and it met with quite a lot of agreement from those not taking on the risk!


link?

#10 Laura

Laura

    HPC Senior Veteran

  • Members
  • PipPipPipPipPip
  • 3,684 posts
  • Location:Stateless
  • About Me:Botany. The music of Carl Nielsen. Playing the cello, badly.

Posted 12 August 2010 - 03:29 PM

I showed this thread to my mathematical partner & asked him for an equation we could use to reliably work out the securitization costs of a chipped chav.
..................................
Ubi bene ibi patria


“…it is difficult enough to convince some people that the economy is in fact not providing the security they desire, but is actually destroying their future completely. To explain to them that this is deliberate, that the economy is designed to self-destruct, that is another prospect altogether…

Ambrose Evans-Pritchard 25/7/2010

#11 hotairmail

hotairmail

    Tired of life

  • Members
  • PipPipPipPipPipPipPip
  • 30,418 posts

Posted 12 August 2010 - 03:30 PM

link?


I can't find it. You may be able to. the search function here doesn't seem to pick anything up after 2009!

Anyway - mine was slightly different in that I felt the university should disburse the funds and take the risks...that way they would be incentivised not for drawing people in to do useless things that people want and then repent at their leisure (and it probably would be leisure albeit uncomfortable), but on things that are likely to add value, get a job etc.

Aside from altering the balance of subjects taught, they would also examine the quality of their teaching staffs, their courses and actively incentivised to help with careers etc.

All in all a jolly good half thought through idea.

"The chicken is radiating disorder out into the wider universe."


#12 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 03:32 PM

I showed this thread to my mathematical partner & asked him for an equation we could use to reliably work out the securitization costs of a chipped chav.


was there one?

#13 dom

dom

    self-facilitating media node

  • Members
  • PipPipPipPipPipPip
  • 5,330 posts
  • Location:The Brownian dystopia

Posted 12 August 2010 - 03:37 PM

There's too many people working already and not enough jobs. All the economic/environmental/social problem we face are symptoms of over production/consumption. The future is less work.

Is this a practical joke BTW?

#14 Laura

Laura

    HPC Senior Veteran

  • Members
  • PipPipPipPipPip
  • 3,684 posts
  • Location:Stateless
  • About Me:Botany. The music of Carl Nielsen. Playing the cello, badly.

Posted 12 August 2010 - 03:39 PM

was there one?


He thought so
..................................
Ubi bene ibi patria


“…it is difficult enough to convince some people that the economy is in fact not providing the security they desire, but is actually destroying their future completely. To explain to them that this is deliberate, that the economy is designed to self-destruct, that is another prospect altogether…

Ambrose Evans-Pritchard 25/7/2010

#15 scepticus

scepticus

    I live on HPC!

  • Members
  • PipPipPipPipPipPipPip
  • 8,731 posts

Posted 12 August 2010 - 03:46 PM

All the economic/environmental/social problem we face are symptoms of over production/consumption. The future is less work.


demographics don't support this conclusion. Sure it is true today, but in 10 years, different story.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users