Tuesday, 2 November 2010

Apropos Quantitative Easing

What passes these days as monetary policy in the US and in the Eurozone is going to be a complete disaster for developing countries. Just think for a second what the taboos are is that emerging markets politicians cannot touch when it comes to monetary policy. Surely, the independence of the central bank is going to be top of anyone's list.

How do you build an efficient central bank in a developing country? First you push through some laws that make sure that a legal framework is in place that ensures–at least in principle–the institutional independence of the central bank. Then you select a few, talented, young local economists, and ferry them away to good university somewhere in the West and teach them macro, monetary theory. (I was probably one of these guys.) Then you lure them home, and they start filling in the institutional space you created at the beginning. If at the same time the country is going through a development phase, then probably the banking sector is growing up, the financial markets are emerging. Thus you not only have a central bank, with some people who know what monetary policy means, but you also have a monetary transmission mechanism of sorts. If you throw in and able IMF rep, then probably the country is on the right track.

The point here is that at the heart of this process is the taboo that stops politicians meddling with the centre bank. Developing country politicians will always want to meddle with the central bank. In fact every politician will always want to meddle with the central bank. But in developing countries the checks and balances that would stop them from doing so are not there. Hence the taboo.

It will be very difficult to convince governments facing elections in difficult economic circumstances that they should respect the independence of the centre bank, and not expect monetary policy to find its raison d'être in financing pre-election fiscal expansion, while at the same time the Fed and the ECB store up on government bonds.

A whole decade of capacity buildup in developing countries is being thrown into the rubbish bin these days.

Thursday, 23 September 2010

The Ancient Future of Finance

(Book review of ‘The Future of Finance. The LSE Report’ -- you can download it here)

Hmm. What a perfect moment! An near-perfect crisis over (well, just, and perhaps), and one very much triggered and spread by the financial sector, offering a lab-like insight into the mechanics of global banking. The complexity of the structure, the proportion of what is global to what’s local, and the sophistication of the tools all would scream for a renewal of what we think about managing the global financial system. Or even what we think about what finance is.

New era. New finance.


… if you want to read what the end-of-20th-century economics would have answered to the same question, read the new book from the LSE on the future of finance. Going through this book reminded me of the Bush administration's ‘solution’ of dealing with the anti-Americanism of the Arab world: send out a PR professional to ‘explain better’. Incidentally, this is exactly what the authors of The Future of Finance think: finance is fine as it is, all that’s needed is explaining it better. Perhaps a little fine-tuning here or there, but that is it.

The furthest you can get in terms of innovation is the call for ‘new thinking’. However, there is not much proposed what the desired novel framework would be. If this is going to be the future of finance, well, it will consist of some rather dark clouds. (Ironically, some chapter authors point out this controversy.)

Apart from the lack of promised ‘new finance’, there is merit to this book. It is a good summary of most debated points of the crisis: the role of banks is explained well, the obvious list of current regulatory choices are discussed in a coherentish framework, and the crisis’ impact on the policy toolbox is touched upon at least to some extent. So, if you are a new student of macroeconomics, and this recent crisis is new to you, then this book may be a good starting point.

But it is nothing more beyond that. You cannot pretend that the only thing that happened to us the past decade is more data.

Friday, 20 August 2010

A Tragedy Of The Global Policy Commons

Two global economics observations about the ineptitude of economic policy.

First, we knew about the credit crunch for at least a 15-18 months before the September 2008 meltdown. Yet, the crisis was not only not averted, but perhaps not even slowed down. The months after the collapse of Lehman were spent in a frantic search for new policy solutions. Nothing seemed to have worked. The nature of the crisis eliminated the most powerful tool of the central bank: the financial transmission channel. And thus a surprising policy void followed. The extent we did not know what was going on is illustrated well by the widening of economic forecast range at the time (and the collapsing predictive power of the mean), as well as the jitters that followed the drastic fiscal expansion everywhere. Arguably, it was not the lack of data, but more our lack of knowing what to do with it that caused the problem. Even when the packages started to work in the summer of 2009 (or at least something caused the numbers turn better), it came as a surprise.

Second, there is an eerie ‘dunno what’s going on’ in the air again. The ‘good’ data tends to signal export led growth (Germany, China). The countries that keep importing are still and again showing signs of the malaise (US, much of rest of Western Europe, Japan). Nobody can come up with even a half credible forecast for for any period beyond the next few months. The lesson we seem to have learned from the 2007-8-9 forecast fiascos is not even try that hard…

Why is this? Why are we unable to provide even the basic level of forecasts? And in any case, if there is a double dip, why is it here? If the ‘global policy maker’ has been dealing with this crisis for three years straight, why has it not been sorted?

Well, one possible answer is that the global economy behaves very differently to how the national level economies do. This blog has argued in the past that the future of economics will certainly have to deal with the fact that the global macroeconomy cannot take for granted a series of assumptions that the national level ones could. Ecological buffers, and socio-cultural homogeneity can be assumed only if they tend to be there. Global economics, will have to come up with some very different notions.

Yet, the need for a new organisational level in our models is perhaps a problem for later years. For it is not hitting the ecological carrying capacity, or having dysfunctional societies that seem to be the reason for the lack of efficient management of the global economy.

It is the lack of global policy institutions.

Imagine that you take any well functioning national economy: the US or Sweden, New Zealand or Thailand. Eliminate the national government, leave the local municipalities in place. Then boost the locals’ finances, give them local currencies, and strong local economic policy institutions: a taxation, budget, central bank, regulators. What would that world be like? Would this world be just as good as the current one? Or would these local institutions start altering their policies to take the maximum benefit from what had been the ‘national economy’? Would this inevitably lead to meltdown? A macroeconomic tragedy of commons.

And what would happen to economic forecast? In good times, the self movement of the system would give you a good basis for efficient prediction. But in bad times, you would need to know the reaction of the economy to the net effect of the multitudes of those municipality-level policies. You would need to assume some form of quasi-national-level policy, and build the model on that. But how could you derive that from the local ones, especially if those were playing against each other?

The global economy is not as integrated as most national economies. But, it is on the way. Today's version is not unlike an emerging economy, going through rapid structural change, within an environment characterised by weak and mostly brand new policy institutions. The funny thing is that if you were to put it that way, we would know immediately what to do.

The ineptitude of policy and forecasting professions points to the same direction. The direction of global economic policy institutions.

Thursday, 13 May 2010

The Three-Layered Chess Box

A central question of global economics concerns the architecture of policy institutions. If you regard the global socio-economic system as a single unit -- a not entirely unreasonable assumption, perhaps -- then it is strikingly obvious that the system's optimal management would call for much stronger global governance functions than existing today. Global economics calls for efficient global monetary and fiscal policy, global financial regulation, enforceable global solutions to the global climatic issues, the rapid loss of biodiversity, overfishing, and so on. This just does not happen. The 2007-2009 crisis of the global economy was perhaps the best chance so far to create on overarching economic policy umbrella for the world economy, an opportunity left unused despite the multitude of summits ending with the Great Leaders' press conferences, which in turn were followed by uniformly unilateral action. The failure of Copenhagen, with the outlook of 'perhaps' Cancun forming the basis of an agreement to be reached in South Africa in the third step, speaks of similar inaptitude when it comes to managing the climate.

Why is this? Why are sovereign states so reluctant to coordinate policy, let alone give up power for the protection of the shared economic and ecological commons?

Tuesday I got to meet an international relations thinker, Joseph Nye. He, as an extension of his earlier innovation smart power, suggests that the traditional two-dimensional chess board of the power game among states should be replaced by a three-dimensional, three-layered box, in which the traditional hard power layer is accompanied by one where the dynamics among economies take place, and another one where transnational sociopolitical processes dominate.

From a global economics point of view this model is strikingly state-centered. If the main focus of the analysis is military power, compared to which other forms of inter-state persuasion can be softer or alternative, then the natural unit of analysis is of where the military is: the sovereign state. Yet, there seems to be something wrong with this picture.

The economy layer of Joseph Nye’s analysis has changed tremendously in the past hundred years. While even a few decades ago each national economy more or less corresponded to a state, we are hard-pressed to find truly local economic processes today. Finance is global wherever you go. Manufacturing systems that used to be local, then became regional, are now predominantly global. The pharmaceutical market is global. Raw materials are global. The transportation system is global. Even the ultimate local product, that of farming, has gone global. Therefore, perhaps it can be argued that there is no layer that is formed by national economies. Although it’s tempting to talk about the Chinese economy, the Indian economy, the American economy, or even the European economy, these are increasingly useless categories. Their borders became fuzzy. Integration into one large economic system, the emergence of a truly global economy seems to be a more appealing model.

The trouble is that the rise of the new, global organisational level has not been accompanied by governance institutions with the same scope. We are trying to manage what is essentially a global process using national level economic policy institutions.

The transnationals, that is, the third layer that Joseph Nye suggests as a building block of the three-dimensional global power structure, has similar problems. For what a decade ago might have been somewhat negligible side phenomena, such as NGO efforts in international reaction of the Haitian earthquake, or the anti-malaria activities of the Gates foundation, or the PR exercises of Greenpeace, is now giving way to a global movement. The trigger, it seems to be increasingly obvious, is a major ecological catastrophe that is to dominate the coming decades. The rapidly changing climate, and the collapsing biodiversity is creating a strong demand for collective global action. Just as in the case of the global economy, we are trying to meet this demand using state-level governance tools, and hence are predictably falling short.

And thus one might turn the logic around, and ask if it is the location of the hard power, the fact that it is anchored to the bureaucracy of the sovereign state which stops the formation of the global governance institutions. In other words, is it possible that the failure of Copenhagen, the never-emergence of a global financial regulatory system, or the we-have-not-even-got-done-to-tackle-it overlogging and overfishing problems stay unresolved because of states that mistake their hard power for global omnipotence.

To pick an example, do you think that should the size of the US military spending be not the half of the world’s total, but just a quarter, the same as its economic share, would the US have signed up for Kyoto? Or for a global consumer protection standard? Or a global financial regulation? Or globally harmonised economic policy? Or the ICC? Is the fact that the US is a military superpower stopping it from taking part, or even a lead, in building the global policy architecture that would offer to deal with global problems unrelated to security issues? Or, perhaps, could there be a general link between the hard power of a state and its unwillingness to to hand over governance functions to transnational institutions?

If you were to find evidence supporting the relationship between hard power and attitudes towards global collective action, how would you go about doing it? I tried using SIPRI’s military spending data, but it seemed too messy due to countries being in active conflict. The world values survey offers questions like “willingness to fight for one’s country”, but these seem to reflect personal values rather than the values projected onto the state. Similarly, what would capture a country’s attitude towards global action? If you look at ecological footprint it is going to be dependent on the country’s economic development level. If you take measures of environmental sensitivities, then you might merely pick up a transition towards post-materialist values.

What we need is measure of attitude towards the military might of one’s country and some measure of the recognition that global environmental problems need different solutions than local ones.

Consider the following graph:

The x-axis of the above graph shows the level of anxiety about the environment from 'very serious' to 'not serious at all'. The y-axis shows the percentage of respondents who name the 'strong defence force' as first or second choice as 'the aim of state' of their country. The three red curves correspond to three local environment questions (water, air, sanitation); the three blue curves correspond to three global environment questions (global warming, biodiversity, pollution of oceans).

It seems that the trend is very clear: those who are worried about the global versus the local environment also tend to be less in favour of a strong national military. And vice versa: those who think the global environment is not that a serious issue tend to like the idea of their country's defence might.

The data thus seem to support the hypothesis that state level hard power stands in the way of common global action, yet arguably individual attitudes does not necessarily translate into state action.

However, it is impossible to tell the direction of causality, at least based this data. Unfortunately, these are questions asked only in the last, fifth round, of world values survey, and hence there is no time series to offer a causal direction. One can only speculate that if there really is a relationship between the two, the more recent global environment worry would follow from the historical preference for military power (in line with the hypothesis) rather than the other way around. This is, though, obviously just a speculative answer.


Thursday, 22 April 2010

Kenya on the edge

(Report from my friend, Balazs Szendroi)

"Knowledge Is Power"
(Motto painted on the walls of thousands of schools around rural Kenya)

"In case of accident, do not admit liability"
(Advice printed on all Kenyan car insurance certificates)

Kenya is a beautiful country. The breathtaking views along the descent into the Rift Valley, the sounds and colours of hundreds of thousands of flamingos on Lake Elementeita, the picturesque herds of wildebeests, gazelles, zebras and giraffes in the National Parks, whose movements are closely monitored by lions resting in the shade, and the calls of Colobus monkeys hiding in the trees in Kakamega Rain Forest make an instant impression on the traveller.

But there is more that impresses in Kenya: its people. With a population well over 35 million, many living on subsistence agriculture in mud-huts or tiny tin houses glued onto each other, Kenya is unmistakably "third world". But there is enormous vitality around: commerce is booming, Matatu taxis shift men and women around at breakneck speed with casual disregard to the Highway Code, and people are loudly discussing business and politics (as well as the Premiership) in bars and restaurants. And anywhere one goes, one immediately sees signs of two further factors that hold out hope for the future: education and modern telecommunications.

Many Kenyans take the job of educating their children very seriously. Fathers work in Nairobi, hundreds of miles away from their families, so that they can make enough money to pay for a better school. There are colourful billboards everywhere that advertise evening courses, colleges, universities public and private, and all manner of other educational institutions. The level of tuition is, to be sure, enormously variable, but there are ambitious examples of good educational practice.
One is Starehe School, where Kenyan youngsters from all walks of life are taught in wonderful surroundings by a dedicated staff, pupils being selected purely on the basis of academic performance. With almost 100 applicants to every place, it is perhaps not surprising that Starehe tops the KCSE (Kenyan Certificate of Secondary Education) tables. At the next level, there is Strathmore University, rapidly rising to the top of the league table of Kenyan universities. This Catholic institution, with a soft-spoken, thoughtful and very impressive Vice Chancellor, started life as a college of accountancy, but has now different programmes in Business, IT and Hospitality as well, with a Law School and a Mathematics Institute opening soon and a Medical School in preparation. One can only wish them well.

Kenya is of course but one of many developing countries completely transformed by the ascent of modern telecommunications. But there is a local twist, which is rapidly turning into a global phenomenon: M-pesa, the mobile phone based money transfer system. At a fraction of the cost of other money transfer schemes, and with a local agent in every village, collection of mud-huts and by every roadside, M-pesa is truly available to all. First banks tried to outlaw it; now they have to live with it, allowing direct transfer from bank accounts into M-pesa. Never mind politicians and their taxes: as a bank director confirmed to me, this is a real challenge to local banks.

A propos politicians. It was repeated all over, by many different people, that politics and especially politicians is where the problem of Kenya really lies. Since Independence, the country has seen a succession of presidents with a dictatorial streak, divide-and-rule mentality, and a liking for personally owning huge swathes of the countryside. A succession of coalitions was formed and then disowned, often along tribal lines. The most recent incumbent, Kibaki, was elected President in 2002 on the promise of clearing up the political mess, only to be uncovered as the true mover of many of the latest major corruption scandals. He strengthened the power of the largest tribe, the Kikuyus, at the expense of others. It is universally acknowledged, and gradually also proven in court, that he held on to his presidential seat in 2007 only by rigging the election. This lead to by far the worst tribal violence that the country saw since Independence, not on the scale of Rwanda, but still killing over 1000 people, and seriously damaging the social and economic fabric of the country.

Tribalism is rife, and its role cannot be underestimated. Kibaki's opponent in 2007 was Raila, who comes from the Luo tribe, from the west of the country. His supporting coalition includes a medley of corrupt politicians riding different tribal tickets. He is now Prime Minister, as a result of a compromise reached after the 2007 violence, and he has established a power centre somewhat independent of the President's office, even though the present Constitution does not make this easy.

There is now a proposed new Constitution on the table, which would in particular clearly separate out the powers of President, Government and Parliament. The proposal appears not to have taken on a tribal dimension, and it is supported by both President and Prime Minister. There are signs that, despite protests from the Catholic Church, this new Constitution will be accepted in a referendum in the summer; this would move the politics of Kenya in a very positive direction.

One actor who may yet play a role in the future of Kenya is the President of the United States. Obama looms large in the country; it is not hard to find restaurants where the obligate picture of President Kibaki is dwarfed by an enormous Obama poster. Obama's father is a.Luo, putting him in an interesting position with regard to the tribal aspect of Kenyan politics. His administration has so far refrained from getting too involved, restricting itself to denying visas to the most obviously corrupt Kenyan political leaders. But it is rumoured that Obama's next visit to Africa will be to Kenya; at that point, he cannot but get drawn in, with possibly very exciting consequences.

Obama's first Africa appearance, his speech in Ghana in July 2009, spells out his likely approach: an emphasis on good governance, and a strengthening of institutions at the expense of individuals.

Modernization, improving human capital via education, leading to steadily improving living standards, or further descent into corruption, unaccountability and tribal violence. Whither then, Kenya?

Thursday, 25 March 2010

Obama’s health reform success hands global financial regulation to Europe

And now onto financial regulation? Europe is poised to win from stalemate of the US Senate.

The fallout from the success of the US health care reform bill might just determine the fate of the emerging global regulation. The Volcker-Obama-Dodd initiative will never see daylight as a law without all the teeth are pulled out: the Republican’s strategy of obstruction makes any meaningful financial reform rather unlikely. The consequences for the global capital markets may be far reaching.

First, obviously, the US market staying relatively regulation loose will make the domestic banking sector super-profitable again. Score one for the US.

Second, this will also turn the battle over the emerging global financial regulation to a European victory. Score one hundred for Brussels.

The reality is that there is no truly global regulatory framework emerging: the much promised intergovernmental cooperation towards creating such an umbrella is all but dead. The only two initiatives that have any chance of manifestation are that of the EU, and that of the US. Clearly, you cannot have global financial regulation without these two. More importantly, if the US and EU settled on a solution, that would be it. In practice that would be the global framework from its first hour.

The battle over the regulation dominance between Brussels and Washington has its core at radically different approaches to the problem. In philosophy, in ideology, in fundemantal beliefs about the role of economy in the society.

(Onegin and Lensky's Duel by I.Y. Repin. Pushkin Museum, St. Petersburg)

US. The US is pushing for a market self-regulation, where the authorities’ job is to ensure that the self-management works. This solution is rooted in the belief that market solutions tend to outperform bureaucratic rules, and while there clearly were market failures in the crisis, these were due to the information bottle-necks, rather than anything inherent in the system. Thus most elements of a would-be US solution are aimed either at increasing transparency or enhancing market competition.

EU. The European approach is the opposite. The solution pushed by Brussels is based on the belief that markets, and financial markets especially, tend to yield socially suboptimal outcomes whatever the transparency is, whatever the market structure is. The assumption or observation (depending on which side of the debate you are) is that self-regulated financial markets will reduce the systemic risks for the sector given the systemic buffers of the rest of the economy. Hence, the self-managed banking sector will always be too risky, and it is the job of the government to manage the market directly.

As a consequence of the opposing philosophies, although many of the elements of the two alternative would-be global reform approaches are similar, the devilish details are radically different.

The early row between the two regulators (some of it played as a proxy fight between the City of London and the Brussels bureaucracy) led to a regional limitations: if we can't agree, no problem, we will just focus on European / American only regulation. For what is better than an isolationist solution right after what was the first truly global financial crisis...

Yet, separate rule may work for local banks. However, for global ones -- if the past is any guidance here -- it will not. Historically, there have been areas where international behaviour of financial companies has been regulated differently in the EU and the US: the prohibition of bribery of foreign officials was one, for instance. Surprisingly, the US laws have been stronger than that of the EU in this area. If you were a Europe-only player, then you’d have to abide by the weaker regulations only. But, if you wanted to be international, there was no other way than follow the rules of the stronger US rule. It is unlikely to be different in the case of upcoming financial regulation reform: local US financial companies will operate within the weaker US framework, but one with global presence will have to follow the toughening EU rules. (If you want to know what this feels like, just ask Microsoft...)

The extent to which Obama will be able to achieve anything in terms of financial regulation in the coming months will determine where the balance between the European and US regulation will end up. Despite all the sovereign-will-always-dominate-the-global speak, the local politics and institutional constraints of two regulatory superpowers have become global politics global and constraints.

Monday, 22 March 2010

Obama’s Global Health Care Impact

Finally Obama might have some global consequences...

The crisis offered hope about the global reform. Although we are still struggling with understanding how the global economy works, the eventual development of some kind of global economic policy umbrella has become increasingly inevitable. As this blog pointed out before, Barack Obama had a unique opportunity to design and push through such a global institutional architecture, and it has been disappointing that he decided not to do so.

Yet, the health care reform that he finally pushed through the US Congress yesterday could have global impact.

First, it will have an effect in a host of developing countries. Consider the immediate news coverage, for instance: Khaleej Times in Dubai, or O Globo in Brazil, or The Times of India. In these markets, Obama is still their own, as a leader and as a member of their virtual social reality. His actions, healthcare reform among them, set benchmarks for expectations about their own countries’ policy reform.

The idea of universal healthcare, alien in most developing countries, will become the norm. Obama’s reform will boost local constituencies for healthcare reform in these countries. The details of the reform (which is not bad despite the bickering and ridiculous length) will enter the local healthcare debates. Maybe not the mechanics, but definitely the philosophy: healthcare is a right not a privilege, kids should be covered whatever the country's circumstances, one population translates ultimately as one insurance pool. The attention to Obama alone might just make local reforms more likely. 

From now on, every would-be local Obama will want to consider putting healthcare reform on his or her billboard

(An election campaign billboard, Jayapura, West Papua, autumn 2008. Notice the halo above Obama's head...)

Second, perhaps almost as important as helping the local healthcare causes is the return of Obama to the global political scene. He wasted his global political capital -- a narrow window of a few months to build global economic policy institutions after his election and taking office. The best we have now in terms of emerging global policy architecture is a few half-hearted attempts towards globalish-looking financial regulation, although even this is turning into a clash between the etatist solution coming from Brussels and the ‘market-friendly’ solution coming from Washington. Much of the world is left out of this fight: no other region of the world has a large enough financial market to matter globally, and in any case, no population really understands - or cares - about the details.

The rest of the global umbrella has been left off the table. The recovery came too soon. (This time.)

But the opportunity might yet be revived. The next item on Obama’s agenda is financial regulatory reform, which will inevitably go global. And you cannot do global regulation without some form of deeper harmonisation of the rest of the policy mix.

The coming months might just reset the probabilities about the next crisis.

Wednesday, 27 January 2010

Obama Freeze

(The past two months I have been working on some exceptionally interesting problems, and hence the absence from the blog. Here is one to the 'dear readers' who bugged me to return.)

Fascinating it is to see the way our thinking evolved about the 'optimal' policy behaviour in a crisis. You could argue that before the meltdown of September 2008 we all thought that the way to deal with recession was to tighten fiscal policy quite a lot and loosen monetary policy a bit. Surprise came when this crisis unfolded in a way that made the monetary transmission mechanism disappear and thus apart from some unorthodox (aka we have no idea what will happen) liquidity moves, the central banks were out of the picture. Predictable policy panic followed. In an economics universe where Ricardian equivalence rules, fiscal expansion would only make things worse. (Footnote: some qualifications remain. As always...) So we all got terribly surprised when the panicked fiscal stimuli of spring 2009 seemed to have worked.


Except, that we’re not quite sure whether it was the fiscal stimuli that worked. In fact we are not even sure that something worked. The global economy seems to be coming out of recession in a way that could be easily interpreted as a short lull.

However while we don’t really know what is going on with the real economy in any country that might matter for the global dynamics, should it be the US, Germany or China, there is one piece of good news that seems fairly certain. The banking sector that was (or: happened to be) the trigger of the recession has been sorted out. Well, at least domestically, and at least it is some of the countries …

The upshot is, that the banking sector is back into the business of channelling the central bank’s will. It might thus make sense to go back to the bit of economics that worked before the crisis, and probably would have worked during the meltdown. Stimulate the economy via a low interest rate environment, and at the same time make space for looser monetary policy by tightening the government budget. In other words, Obama’s proposal -- attacked by many US analysts as a mere political move -- might make a lot of sense.

(It is especially funny to see the Obama move being attacked by the very same people who despised the fiscal stimuli at its birth. The conservative mindset combines well with a short memory span...)

This is not to say, that if the banking crisis was not the illness, but only a symptom of the underlying problems, the global economy would still be out of water. The argument suggesting that the lack of global action will lead to even higher tension and thus possibly even more severe crises still holds. But the day of that Great Meltdown might just be postponed. And, if other governments follow suit, you might even regard that as a somewhat harmonised global fiscal policy stance.

(For a brilliant comparison between the global pickle we are in now, and the Japanese pickle a decade ago, have a look at the paper Lost Decade in Translation: What Japan's Crisis could Portend about Recovery from the Great Recession. The bottom line: no amount of fiscal and monetary policy wizardry will work as long as the underlying structural causes of the malaise are around. -- We just need to agree about those then...)