My approximate walking route

Harder Kulm is not very high in absolute terms: just 1 322 meters above the sea level. However, climbing it means going uphill more than 700 meters as Interlaken itself is on the level of 567 meters. There is a nice walk from Interlaken to Ringgenberg, and then continuing from Ringgenbberg to Harder Kulm (effective hiking time according to the hiking map is 5:30 h). Another walk brings the hiker from Harder Kulm back to Interlaken (effective hiking time is another 2:30 h).

I leave my hostel at around 8:30 am. Damn, Harder Kulm is in clouds! 30 minutes later when I have arrived to Interlaken Ost (my hostel is in Interlaken West) it starts raining. I find a roof and a place to sit, take out a book and decide to read while waiting a bit. Perhaps the rain will stop.

Well, it starts raining even more. One hour later I have enough from waiting. I do some re-packing and set myself going anyway. I’m not sure of how far I will walk, but at least up to Ringgenberg the path is rather good. On the right side there is a river connecting the two lakes between which Interlaken is situated.

There are not many people hanging around in Ringgenberg. No wonder, it’s Wednesday and not yet a summer season. After all, “normal” tourists and holiday-makers cannot be supposed to walk with such weather.

The way forward from Ringgenberg goes uphill. I don’t know how many times during this trip I have found myself wondering how houses are not falling down from these steep ascents. When climbing, I’m still thinking if the decision to come to the mountains with rain was a good idea. Generally it’s not recommended at least as one may easily slip on wet stones. Obstinate as I am, I continue climbing. The path gets narrower, but at least for the beginning it doesn’t seem very dangerous.

Soon, when looking back, I see Ringgenberg, Bönigen and Interlaken as on palm – this despite that the rain doesn’t contribute to the view. I take a picture and go forward. Now there is a bit relatively flat land, an easy walk in the meantime. The mountain walk alternates with short treks on gravelled path. In some places there are signs indicating falling rocks.

It’s cloudy up here and I’m outright in the clouds. So for a while I feel myself pretty miserable. At least the rain has almost stopped (a weak comfort when the leaves of the trees are wet). I try to be careful and look at where I’m stepping. The streams of the water crossing the path make going forward more challenging to say at least. “There is no one calling for help if I should fall,” I’m thinking. So far I haven’t seen any other hikers today.

Then something else attracts my full attention: some 10-15 meters in front of me an animal is crossing the path. And this animal very much looks like a big cat. “A lynx,” I’m guessing. Honestly, it’s somewhat scaring. You never know how a lynx may react if it should suddenly see you. For every case I keep quiet and go back a few steps.

After having waited for a minute or so, I continue my walk. If the trail is supposed to take 5:30 h plus 2:30 h, I don’t have much time to waste. My hiking map is not very precise as it’s actually not a map at all but a simplified copy of the real map that I got for free from tourist information. I mess something up and am not completely sure whether I am where I ought to be. Fortunately it’s difficult to get completely lost here: it’s only possible to choose a path that either goes up or down. Harder Kulm clearly is up. Also there are everywhere yellow signposts which indicate directions.

Here and there are excellent grilling places equipped with tables and seats, as well as a fireplace. And the views – even today they are fantastic. I imagine, on sunny summer days they could be breath taking. So if you should come to Interlaken, don’t forget to take a matchbox and other picnic or grilling stuff with you.

A fully equipped picnic site on the way up to Harder Kulm

Finally a sign shows that it’s only 40 minutes walking to Harder Kulm. I’m proud of myself that I have managed all the way so far and climb the last 100 meters with relative ease (although feeling terribly hungry already).

Up here is a café and a spacious terrace for making a break and enjoying the views to the surrounding area. It should be pointed out that one doesn’t certainly need to climb two and half hours for getting to this place. People who like more comfort or are in relative hurry for some reason, can go up with a train which certainly is quite an experience in its own.

A view to Interlaken on a rainy day

When I take a look to my watch, I see that I have been considerably faster than planned: so far the walk has taken less than four hours instead of the expected five and half. Maybe I have made a shortcut somewhere, I don’t know. But as I start feeling cold a bit, I don’t stay for long and decide to cover the rest of the track with no major stops on the way.

Going down is not much easier than was going up. In some places the descending is quite steep. “Down, down, down,” I’m repeating to myself, and “Easy, easy, easy.” I’m already dreaming of a cup of hot chocolate once back in the hostel.

Almost unexpectedly I appear in Interlaken. The path ends suddenly. A staircase leads the hiker to one of the main roads of the town. An elderly couple sees me coming – soaked to the skin but obviously happy. They look at me and the sign that points up to Harder Kulm, and seem to ask in their thoughts: “From where is she coming? Really from there?”

Approximately half an hour later I’m back in my hostel. And I’m fully enjoying the hot chocolate that I definitely deserve, as well as the feeling of being tired physically.

For my country it is an important New Year’s Eve in a different respect: it is a big changeover night as Estonia is joining euro area. Many-many people are spending the night at work to make it happen and everything functioning properly. Many more are ready to get up and running as soon as something unexpected should happen. Good luck and many thanks to them! Respect; it’s not just one night – it’s at least one year of hard work.

World GDP in 2009 was approximately 58.2 trillion US dollars. Let’s say we think that 4% is a nice stable annual growth rate that we should set as a target. This means that in dollar terms GDP in 2010 should be 60.5 trillion US dollars (58.2 trillion US dollars plus 4%), up by 2.3 trillions. Ok, in reality global economic growth will be higher in 2010, but let’s use 4% as an example. In 2011 the targeted World GDP should already be 62.9 trillion US dollars (60.5 trillion US dollars plus 4%), up by 2.4 trillions. What we see is that despite of a stable growth rate, in nominal terms the economic growth is expected to be bigger and bigger. This is further illustrated in the figure below which shows the targeted World GDP growth up to the year 2050.

Like magic, instead of a stable 4% annual growth we have an unsustainable exponential path. If this is what we want, then our monetary system needs to provide enough money for enabling it. Naturally, it is unsustainable too. But perhaps we should rethink the way we define, measure and target growth and success?

First, the whole thing has gone far too complex and, also thanks to the regulatory reforms, is going even more complex. And I’m not only talking about the innovative instruments like Credit Default Swaps (CDSs), Collateralised Debt Obligations (CDOs) or CDOs-squared or –cubed. I’m even not keeping that much in mind complex financial schemes and structures like all the securitisation and Structured Investment Vehicles (SIVs). Instead, the paradox is that also the arguably simple but big enough retail banks are implementing (and investors and regulators expect them to implement – because of lowering the required capital and the complex environment where they operate respectively) complex models for assessing the risks of their business, for calculating their capital need, for pricing credits to the customers, for measuring their profitability etc. But estimating things like correlations, the size of the possible asset bubble and the true risk level have proven to be very tricky. The new liquidity requirements, countercyclical capital buffers, forward-looking provisioning principle and other “improvements” in the regulations will not make the life easier. It is supposed that the managements and supervisory bodies of the financial institutions are responsible for the implementation and validity of the firm-wide risk measurement and control systems – but how could they possibly confirm the validity of their risk models, if even their risk experts with PhDs are going mad with all the complex formulas and extremely sensitive model parameters? Furthermore, if the firms by themselves don’t actually know their risks, what leads us to think that the supervisors do?

Secondly, there is far too much bureaucracy. It is clear that a lot of supervision is needed for containing such powerful and complex institutions as the current big banks, especially taking into account that the later have clear motivations to circumvent regulations. Furthermore, supervisors need to have sufficient amount of qualified resources to understand all the newly engineered products and their systemic effects, as well as develop regulatory guidelines that would keep pace with the industry practices. Introduction of the new regulatory reforms only adds new supervisory bodies, committees and institutes who all are engaged with the work of designing and enforcing new restrictions to the financial sector, and supervising the fulfilment of all the existing, modified and new rules. Increased need for the co-ordination of all the supervisory activities only adds to the need for public sector resources. As a result, there is a considerable risk that all this ends up in regulators arguing with each other, burdening financial institutions with endless and ever changing reporting requirements and stress testing exercises none of which really adds notable value, and finally, replacing market failure with the regulatory failure. The provocative question here would be: who pays for all that?

Thirdly, finance is on the path of continuing taking away brains from the rest of economy. Why? Well, that should be obvious: it would not be possible to maintain such a complex system and all the needed supervision without talented people.

Fourth, it is prescribed into the current formula that finance shall remain a profitable and a well-paid sector. Otherwise people and capital would escape. Why should sensible people continue to work on complex financial engineering or risk modelling the social value of which no one really understands if they weren’t paid well enough? Why should any sensible fund manager continue to manage the money of pension funds, if he/she could make much more money on his/her own? Capital finds more profitable sectors even much more easily. These are arguments that keep the hands of governments bound (beside the argument, that credit will be more expensive for the customers, of course).

The fifth, sad thing is that despite of all the efforts, the mechanisms of financial crises remain. At best, the next crisis or a few of them will not be as severe as the one we just saw. These mechanisms include but are likely to be not limited to:

* creating debt without creating money e.g. via different kinds of refinancing and debt restructuring activities where interest is added to the principal, as well as a result of the creation and use of highly profitable but fundamentally flawed financial instruments and –structures;

* self reinforcing, first vigorous and then vicious circles that lead the economy and prices far from equilibrium, the typical credit and asset price cycles such as the one that we just saw in the mortgage prices;

* regulatory cycles where we first see tightening of regulations, which at some point will be replaced by the regulation erosion (given all the complexity and bureaucracy, it’s not difficult to imagine the arguments for abandoning regulations and starting to trust market powers more again) and finally ends again up in the bail outs.

To conclude, I believe that the current approach of closing the holes in the current regulatory frameworks is not enough for securing long term financial stability and a financial system that would be for the society. We need rather significant structural changes into the monetary and financial systems. At the same time, it is easy to understand that the challenge is big. We need to find courage for doing what is right rather than what is easy (and more profitable in short run).

During the trip I stopped briefly in Athena, but mainly visited South Africa and stayed for a week in Scotland. All together, it was a great-great experience that definitely expanded my comfort zone and was rich of emotions. I will not tell more here, but allow you to immediately go to the small book illustrated with some pictures:

Go to the PDF document describing my Summer Trip 2010

Napoleon Hill

I’m holding “Think and Grow Rich” in my hand, a book that was twenty-five years in making and that is based on the Napoleon Hill’s famous philosophy of the “laws of success”; a book that conveys the experience of more than five hundred men of great wealth, who began at scratch, with nothing to give in return for riches except thoughts, ideas and organized plans. The trick is that although the entire book is about riches, success and great examples, the secret of all the riches is nowhere literally disclosed in the book – although it is clearly said that there IS a secret. Why? Because if one is ready, one gets it, it is implied. The secret came in two parts, and one needs to have one part in his/her possession already.

I can’t say that I have got the big “ah-ha” so far. However, one thing is sure – it has to do something with human mind, and with the fact that human mind is very powerful, by far more powerful than we normally use to think. Here are just a few points that I have picked up from the book, clearly referring to it:

* “Success comes to those who become success conscious.”

* “More gold has been mined from the brains of men than has ever been taken from the earth.”

* “There are no limitations to the mind except those we acknowledge.”

* “One of the main weaknesses of mankind is the average man’s familiarity with the word “impossible”.”

* “All achievement, no matter what may be its nature or its purpose, must begin with an intense, burning desire for something definite.”

* “There is a difference between wishing for a thing and being ready to achieve it. No one is ready for a thing until he believes he can acquire it.”

* “It has been said that man can create anything which he can imagine. Man’s only limitation within reason lies in his development and use of imagination.”

* “There is one weakness in people for which there is no remedy. It is the universal weakness of lack of ambition.”

To put the philosophy in my own words:

First, you need to desire something. Not just wish, but desire so much that it becomes an obsession and everything else is of less importance. It has to be mixed with strong emotions like love and faith. It has to find a way into your subconscious mind – or be fed into your subconscious mind by yourself via auto-suggestion.

This burning desire and firm belief that you CAN get what you want, are those that guide you forward, guide you to acquire the specialized knowledge you need, to imagine what you want to be the result and how to achieve it, create organized plans, take a definite decision to make the first step, remain persistently onto your way – despite of all the drawbacks and temporary defeats. Furthermore, they lead to the attraction of other great minds, powerful thoughts and brilliant ideas.

When you now stop for a while and think about what you just read from the last two paragraphs, and perhaps read them once again, you see that things are in a simple and very logical order. If you aren’t rich and/or successful right now, perhaps you just haven’t desired it strong enough? Or you have allowed the skeptics or the basic fears (like fear of poverty, fear of criticism, fear of loss of love etc) to irritate and frighten you?

Remember: human mind is very powerful – and I’ll do my best to prove it to myself. Thereby I acknowledge that my knowledge is limited and may not provide all the explanations straight away.

From Monday to Friday, I find myself running, running, running, organising things, following tight time schedules and deadlines, sitting on meetings, and keeping up with latest news. My mind is occupied with the thinking of how to get this or that done, one or another issue addressed, bugs fixed, e-mails more-less replied, phone calls answered etc. etc. And when I’m not running, gathering and acquiring new information or doing something else that qualifies as productive type of activity, I’m probably sleeping. This sounds pretty crazy.

But there are a few things that I have started to prioritise by far higher than the daily hassle. One of those is just stopping for a while, and decoding for myself what’s going on around me, and what role I and the others play or are supposed to play in it. It’s about understanding the logic of systems and processes, but not only. It’s also about asking the Big Why? and pursuing to find an answer to this sometimes ground-breaking question. It’s about finding out what really matters, and what just looks like or is made to look like as urgent and important.

There are a few good reasons for me doing this, no matter what happens in the outside world.

* First, I’m still learning, and collecting experiences and ideas for the future. Organising my feelings, impressions and thoughts, rewording with my own words what I have seen, heard or read, and writing down or recording the reflections, are great ways to do this more effectively and systematically.

* Secondly, when I’m mentally prepared and well balanced, I do not get confused by all the nervousness and hustle around me, or even totally misled. This enables me to stay focused and achieve what I want to. The reality, however, is that in today’s environment you may easily lose your path. Therefore knowledgeably taking time for recovering and rethinking has become perhaps more important than ever before.

* The third reason is that only the true understanding can give me the ability and courage to use my own judgement, to act and not to be acted upon, and to do what I deem right.

* And last but not least, I believe that you really need to find a point in what you do. Only that way you can express the very best of yourself, inspire the others, and be satisfied with yourself and people around you. As at the end it’s all about humanity and relationships just stop and think about that for a moment.

Finally, if you haven’t had a chance to do this so far, I recommend you to watch these two videos:

* Steve Jobs’ 2005 Stanford Commencement Address, and

* Randy Pausch Last Lecture: Achieving Your Childhood Dreams.

From both of them, I found confirmation to what I’ve said above.

Fix yourself

Haven’t you noted that the most of our problems are rooted in our thinking, and that the majority of our troubles come from our past and current choices? If that’s true, aren’t we then in the position and even responsible for improving our lives in case we don’t want to wake up in the mornings, feel stress and/or are fed up of the same things every day? Basically, it’s up to us.

I know it’s not that simple when it comes to concrete life situations. Usually there are no lasting quick-fixes or one size fits all solutions. It may sound scaring that there is only one person who really can help you – yourself. It’s scaring because it puts responsibility to you. Let’s explain this more, let’s explore the most common sources of problems and troubles.

Our lives tend to be complicated by our own attitudes and the things that we do or don’t do. Below you find just a small collection of the most common examples. Are some or all of them valid for you? Well, then you probably know from where to start…

We don’t want to acknowledge our own fallibility and incompleteness. Instead, we tend to think that there are only two opinions: My Opinion and Wrong Opinion. This means, that we are not ready to really listen and accept other viewpoints. What do you think will somebody then talk with us about them? I guess not. It would be a waste of time. Nobody can add to the glass that is full already. So, we have just effectively isolated ourselves into our little boxes.

We don’t really want to go beyond our comfort zone. Instead, we resist changes and prefer known to the unknown. We give up to our fears. This not only significantly limits our future choices, but the current comfort zone also tends to become narrower. At the end of the day we will find ourselves at the mercy of the others.

We try to make ourselves shine more via keeping the others down and letting them seem less important or perhaps unimportant at all. What’s the outcome? We have the others not respecting us. As a next step, we start to hate them and they start to hate us. We end up in having to do everything by ourselves and clearly, we are lacking time for that. Let’s just hope, this is not going to make us crazy.

We focus to envying others, and what things and opportunities they have, instead of living and improving our own lives. We remain to be jealous for always and this clearly cannot add to our life quality.

For us, it is more important what the others are thinking about us than who we really are. We try to show that non-functioning solutions are working, and end up in making quick fixes and fighting fires instead of building something longer lasting.

We choose to do what is easy rather than what is right. By that, we go into conflict with ourselves and our own personal values (which may not be clearly articulated, but still exist).

What could be the solution? For the beginning, just try the opposite to the above. Start from challenging and revising your own attitudes. Remember that stimuli are what they are but it is our own freedom to choose how we react to them. And this freedom is determined by self-awareness, imagination, conscience and independent will.

The Avatar movie

Yesterday I watched 3D version of Avatar – a long-waited, very popular and generally positively commented movie. I didn’t have to disappoint; for me, over a long time this was once again a real cinema-experience. What everyone exactly sees in this movie (as well as in other movies) is of course individual. Here is a summary of my takeaways.

The first thing I registered was the clarity by which the consequences of putting profits first were addressed. Basically it is said that this leads to destroying our own living environment on the Earth and thereafter to destroying the living environment of those in other planets (if we should find life outside the Earth).

Secondly, it was highlighted that only a very small part of humanity really tries to understand the others and attempts to see the world through their eyes. The other people only see their own targets or (perhaps even worse) remain indifferent. This is closely linked to the third point – that one can’t learn anything when his/her glass is full. Instead, one should keep his/her class empty and eyes open.

Fourth, note how much bad Jake Sully actually first made by just doing his job – forwarding information and knowledge to the Earth people (who were about to attack Na’vi people based on this information). Note also what a power is contained in knowledge.

The fifth thing is that at some point you need to choose for which side you are – for those that you originally belong to and who hired you (for Earth people in Jake’s case), or for the ones that do the right thing according to your best understanding (the Na’vi people in Jake’s case).

Sixth, it is well captured that systems start to broke down from inside, not because of outside forces (Jake and some other people in his side are traitors from the perspective of the human leaders).

The seventh point is that true love and fighting for right things make you much stronger and much more powerful than you ever could have imagined before.

So, go and see the movie by yourself if you haven’t done it already – and think what you find from it.

Reflection

The year 2009 is coming to the end. For many of us, this has been a more challenging one than the years before. Some have won, some have lost; something we have won, something we have lost. If not earlier this year, then hopefully now the majority of us has found some time for reflection, for rethinking the point we make with our everyday activities.

When we look back to the end of 2008, we see the great uncertainty, indeterminacy and extremely low visibility in world economy and –finance. At that time, the fire was burning uncontrolled. 2009 exposed many of the weaknesses and downsides of our current social systems and capitalistic society as a whole. By now, the indeterminacy is decreased considerably: the possible choices are much clearer and the decision-makers are more-less able to assess the consequences of the decisions and actions taken by themselves or by the authorities (of course, until the rules of the game do not change completely and unprecedentedly). However, the outlooks for 2010 are not rosy, especially for real economy: high unemployment, still high indebtedness, low demand, rising taxes, expiring unemployment benefits, continued high default rates, constrained availability of new credits coincided with upwards revision of the interest margins of existing credits, when just to name some factors.

A misleading add or today's direction?

Honest people, who have sincerely believed that they fulfill some high-minded mission, probably want to ask now: “Why?”, “What have we done wrongly?” or “How can it be that smart people have built up such a crappy thing as our current financial system that would have crashed completely without the support of taxpayers’ money?” The others again have a good reason to worry about the value of their money. Economists should ask what is wrong with the theory of demand and supply as it’s not possible to say e.g. what the long-term value of my house actually is – just because the value of money can be changed so easily. Why is it that it’s relatively easy either to make money or to make sense, but many of those who have sought to make both, have run into trouble by now? How can it be, that the myopia of capital markets can overrule by far more important things like loving relationships, environmental considerations and up-to-date education system?

Directly or indirectly, these questions and answers to them affect the well-being of the majority if not all of us. Thanks to the modern communication tools, our social networks are expanding. We meet more and more different people and even if our own finances are fine, we can (too) closely observe people and companies struggling for their very existence. Thanks to the internet, we have better and better access to the information, and enormous possibility to improve our awareness. The financial crisis of 2007-2009 has exposed the greatest scams ever. Now, face-to-face with the worst problems, we are asking ourselves “Do we want to live in such a world?” The answer is “No”. You can conclude it from different demonstrations such as “Don’t Tell Us It Can’t Be Done”, from blog posts, from readers’ comments. I’m wondering if things are going to change – slowly and with drawbacks, but surely.

In this light, I believe, it’s time to rethink the very point of our daily activities – are we doing something for a better and more sustainable tomorrow, preserving the status quo or just floundering without any direction? Year-end is perhaps the most appropriate time for that. And not just to rethink, but to share our thoughts and use the coming year 2010 to call them into a day.