Booooks 25
Torment Issue
Hello!
In the Meantime
My state now:
But at the same time, how sweet are the fruits of vindication! The Polish ‘opposition‘ government is forming in pain (a lot of pain) including my own party (The Left Together) not joining it… Whaaat?
So to quickly recap the leading issues of the elections (according to Law and Justice soon-to-be-ex-MP):
Well, I would say that this election result says two things from my perspective: Firstly, these new voters, and young people, secondly, women. Two years ago, as I said, after a running large scale research on women in Poland, that women decide the election results. (…) Four years ago women led Law and Justice to electoral victory. This time we were shown a yellow card. (...) [After the Constitutional Tribunal rulling on abortion] what was missing here was probably a certain sensitivity and understanding of who the people protesting on the streets actually were, with full defense of their position. Moreover, I have always repeated many times that the defense of life has always been included in the program of the United Right camp. The only question is how this agenda is being implemented.
The issue of abortion was so crucial to voters, that Law and Justice PM after the election confirmed that the abortion debacle from 2021 was a mistake. A number (a large number) of women's rights advocates claimed that after the attack on women at the hands of the government, there is no going back to ‘compromise‘ - a legislative solution allowing limited access to abortion in three cases.
The opposition parties were quite aware of that fact - including Mr Tusk’s promise that no one, who will not support a new solution - 12-week legal abortion will not be allowed to be on his party ballot. We also can clearly see the impact of the change in reproductive law in the polling data from 2021. During that time, that law and justice lost the 2023 election.
Whatever the future will bring, Friday was fun. The left already announced bringing forward a regulation proposal on available abortion, so the centrists are going to get themselves into a fun spinning practice when they fail to pass it.
N. invites you all into our meseges this time:
On the News
Regardless of the upcoming changes in government, one thing will stay the same. Mr Adam Glapinski will remain at the helm of the National Bank of Poland. As he sticks on until 2028, we need to get cosy with him and his attitude to different macro-metrics.
We start with the most polarising- that is inflation. Coming out of an econ degree what you normally hear is that central banks, when too close to governments tend to follow a Political-Bussiness Cycle. The idea is, that the government will always want lower interest rates to offset debt and drive the output (and also employment) higher. I guess the idea would also be, that the politicians would want such a policy to be turned on long enough before the election so that the voters can really feel the easing.
So theoretically, except for some cases (which we will briefly touch upon in a sec) there is no point, even if you are a central banker in bed with the government, to cut rates right before the election. Except… sometimes central banking isn’t really about that. Sometimes it’s the message that sticks.
The Cut
You can of course see the giant cut, marked with a little cute circle on the graph above. So this happened a good two months before the election. Not enough to actually translate to a boost in the economy but enough to communicate that the battle against inflation is done and won. Nothing else to do but pop the champagne.
The other reason, probably more politically sound is debt. This is more of a verbal argument because I have no idea if it works with data - a lot of people have mortgages, so a lot of people are paying interest. Cutting the main rate will bring the other ones down too and so people will feel better… This could work if private debt wasn’t so relatively low in Poland (107% of GDP vs 183% in Germany). The cut had another relatively short lived consequence:
A sustained fall in Zloty’s value could probably help Poland become a more desireable direct investment location. Additionally depreciation will increase the foreigner’s purchasing power so the exports might go up.
Mr Adam’s brilliant plan
I am probably heavily overstating trying to capture any sort of logic behind that giant decision from September. But quite clearly it is not even the most confusing of Polish central bank’s changes. Last week the RPP (Council of Monetary Policy) decided to keep the rates flat, communicating no more cuts down the line. A hawkish turn, Mr Glapinski!
I wish I could tell you that the market overreacted, but event studies like this are a bit dumb - traders almost always overeact, and then the prices go back to the pre-newsshock levels.
Clearly nothing to see here.
On the Shelf
I was planning to read Tyll by Daniel Kehlmann since my obsession with the international booker prize in 2020.
I tried doing that in German (dumb idea) and it took me three more years for someone else (S.) to remind me that it exist and is good. For the record it is a historical novel, with a pinch of magic here and there. But It is masterfully written, precisely because the border between fiction and an essay is very thin and sometimes gets crossed.
The main character - Tyll Eulenspigel (The Owl’s Mirror) is the jester figure of German medevial folklore. That of course means twisted sense of humour and gore. We meet him turning villagers against each other and grooming a twelve year old.
He laughes at kings, lies to barrons and witnesses the horrors of the thirty years war. But the most interesting part of the book is the close study of Frederick V of the Palatinate and his wife Elizabeth Stuart.
Of course like in any good historical book, the setting is just a mere costume that serves as a pretense to investigate the human condition.
Reading Tyll, of course reminded me of the chaos and fun of the Hussite Trilogy by the Polish author Andrzej Sapkowski. His novels, set a few centuries before Tyll are much mire complex in terms of world building and developing the setting, but my favourite part none the less remains the passage in which the main characters meet Johannes Gensfleisch zur Laden zum Gutenberg:
“I beg your pardon,” said the giant, spreading his hands. “I couldn’t resist… Being a witness—when all’s said and done—to an epoch-changing invention.”
“Ha!” Gutenberg beamed, like every artist glad to be praised, even if it was announced by a hulk with the face of an idiot whose head touched the ceiling. “That’s precisely it! Exactly! For just imagine, noble gentlemen, dozens of learned books, and one day, however ridiculous it sounds now, maybe even hundreds of them!” (…)
“Indeed,” Samson Honey-Eater said a moment later in his soft, calm voice. “I see it with the eyes of my soul. The mass production of paper, densely covered in letters. Each leaf in hundreds, and one day, however ridiculous it may sound, maybe even thousands of copies. All of it reproduced over and over and widely available. Lies, rubbish, libel, lampoons, denunciations, base propaganda and demagoguery pandering to the masses. Every wickedness ennobled, every villainy official, every lie the truth. Every stupidity crowned because it is all in print. It is on paper, thus it has power and is binding. It will be simple to begin it, Master Gutenberg, and to set it in motion. But to stop it?”
“I doubt it’ll be necessary,” Scharley interrupted, seemingly in earnest. “As a greater realist than you, Samson, I don’t predict such popularity for this invention. And even if events were to follow the course you have prophesied, one can arrest it using a method as easy as pie. An index of forbidden books will simply be created.”
Tower of Folls by Andrzej Sapkowski | translated by David French
Next Up
Thanks for reading! I will be travelling again this week and next (twice to London). I will be in Vienna next month (15.12-17.12) and in Prague in January let me know if you want to say hi!
Disclaimer
No matter how many charts you will see, this newsletter is not an investment advice. Or any type of advise actually. Your capital may be at risk.