Monday, March 30, 2009

Spring is in the air

Glancing out of the window next to my colleague's desk I saw two young things smooching on the wall below our office. When I pointed this out to her, she was dismissive: "All kinds of things go on by that wall! The year before last I saw a man behaving very oddly, poking about in the bushes behind the wall. I called the police and they arrested him: he'd hidden a gun behind that wall!"

Friday, March 27, 2009

Joke of the day

The Chief Rabbi, Sir Jonathan Sacks, was on Radio Four this morning talking about the concept of utopia and whether the lion will ever lie down with the lamb (ok, so this was surprising, coming from him as Isaiah mentions the wolf dwelling with the lamb and the calf with the lion, but never mind). He said, "There was only one zoo where a lion shared a cage with a lamb. A visitor asked the zoo keeper how he managed that and the keeper replied, 'Easy! I just get a new lamb everyday.' "

Thursday, March 26, 2009

Sign of banking times

HSBC is cutting 1200 (0r 2900 according to Unite union) jobs while Bank of China is creating 10,000.

Wednesday, March 25, 2009

Herodotus on crocodiles

Herodotus, "the father of history", writing in the fifth century BC, has an interesting view on crocodiles:

"During the four winter months they eat nothing; they are four-footed, and live indifferently on land or in the water. The female lays and hatches her eggs ashore, passing the greater portion of the day on dry land, but at night retiring to the river, the water of which is warmer than the night-air and the dew. Of all known animals this is the one which from the smallest size grows to be the greatest: for the egg of the crocodile is but little bigger than that of the goose, and the young crocodile is in proportion to the egg; yet when it is full grown, the animal measures frequently seventeen cubits and even more. It has the eyes of a pig, teeth large and tusk-like, of a size proportioned to its frame; unlike any other animal, it is without a tongue; it cannot move its under-jaw, and in this respect too it is singular, being the only animal in the world which moves the upper-jaw but not the under. It has strong claws and a scaly skin, impenetrable upon the back. In the water it is blind, but on land it is very keen of sight. As it lives chiefly in the river, it has the inside of its mouth constantly covered with leeches; hence it happens that, while all the other birds and beasts avoid it, with the trochilus it lives at peace, since it owes much to that bird: for the crocodile, when he leaves the water and comes out upon the land, is in the habit of lying with his mouth wide open, facing the western breeze: at such times the trochilus goes into his mouth and devours the leeches. This benefits the crocodile, who is pleased, and takes care not to hurt the trochilus." (Translation by Rawlinson)

Tuesday, March 24, 2009

Toxic legacies

I had to laugh when I read the title of Boy Wonder Geithner's latest economic measure: the Public-Private Investment Program for Legacy Assets. It could have been some sort of inheritance tax scam but no: "toxic" assets (those erstwhile weapons of mass financial destruction) have now been renamed "legacy" assets by the US Treasury, presumably to make the deal sound sweeter to prospective private investors. Any cash which private investors put up will be matched by the Treasury and the total amount will then be leveraged up to 6 times with federal loans or loan guarantees. If the assets are sold for a profit, everybody's happy. If the asset price falls further and the private investor cannot pay the interest on the loans, the taxpayer loses the most. I wonder if the scheme would pass Cameron's conscientious capitalism test.

Monday, March 23, 2009

Cartoon of the day

Friday, March 20, 2009

Why governments should not run banks

The National Audit Office's report on the Treasury's handling of Northern Rock is a gloomy read. The Treasury was incapable of asking the right questions to both its advisers and Northern Rock managers. Even after Northern Rock was reliant on taxpayers' funds, it continued to hand out £800m mortgages which lent people 125% of the value of the property. The Treasury signed a contract with Goldman Sachs, one of its advisers, which included a £4m "success fee" without defining what would have constituted "success". The total bill to taxpayers for advisory fees and bidding costs associated with Northern Rock is £78m.

Thursday, March 19, 2009

Chinese proverb of the day

One day a peacock, next day a feather duster.

Wednesday, March 18, 2009

Vive la France!

I'm taking off my chapeau to France today: not only has it won a seven year battle with the EU and is cutting VAT on meals at restaurants from 19.6% to 5.5% but also it is holding nationwide protests tomorrow to denounce the government's economic policies. Hurrah for democracy!


A better joke from yesterday was the evidence of Lord Myners to the Commons Treasury committee regarding Fred the Shred's pension. Myners first said "I sought no information" about the "enormous" pension and went on to complain that he was "not told the full story" by the "distinguished" RBS board. He then apologised for calling the board "distinguished", redescribing it as "experienced". He refused to answer Andrew Tyrie's question about his own pension arrangements. It will be interesting to see how Cherie Blair will fare in the lawsuit against RBS' board.

Tuesday, March 17, 2009

Joke of the day

Three Englishmen were in a bar and spotted an Irishman. So, one of the Englishmen walked over to the Irishman, tapped him on the shoulder, and said, "Hey, I hear your St. Patrick was a drunken loser.""Oh really, hmm, didn't know that."Puzzled, the Englishman walked back to his buddies. "I told him St. Patrick was a loser, and he didn't care." The second Englishman remarked, "You just don't know how to set him off... watch and learn." So, the second Englishman walked over to the Irishman, tapped him on the shoulder and said, "Hey, I hear your St. Patrick was lying, cheating, idiotic, low-life scum!""Oh really, hmm, didn't know that."Shocked beyond belief, the Englishman went back to his buddies. "You're right. He's unshakable!"The third Englishman remarked, "Boys, I'll really tick him off... just watch." So the third Englishman walked over to the Irishman, tapped him on the shoulder and said, "I hear St. Patrick was an Englishman!""Yeah, that's what your buddies were trying to tell me."

Monday, March 16, 2009

That apology

DC's stunt of offering an apology where GB has refused, sticks in the throat somewhat. It's all very well to apologise in retrospect for signing up to a "cosy economic consensus" but the reality is that he's been steering the Party to the centre, following consensus politics deliberately in order to benefit from the adage that "governments lose elections, opposition parties do not win them" and also the priniciple that if there's no real difference between the parties, the voters will go by personality, a competition which DC thinks he wins hands down. He should have sacked GO months ago and, at the very least, demanded a debate in the House about the merits of nationalising Northern Rock. Consensus politics is basically intellectual apathy.

Thursday, March 12, 2009

Gunners all round

If you've given up alcohol for Lent, you could try a Gunner to lift your spirits: half ginger beer, half ginger ale, a dash of lime juce and two dashes of Angostura bitters. Otherwise, a Black Muscle: a Kir Royal with a dash of Blue Curacao which turns it black.

Tuesday, March 10, 2009

Swedish snuff

I thought snuff was inhaled but Swedish "snus" comes in a pouch like a small teabag which is placed under the top lip enabling the nicotine to seep into the gums. Anyway, it's very popular in Sweden following the public smoking ban and the unwillingness to nip outside for a cigarette during the freezing winters, so much so that 20% of the 1.2m snus users are women. One Swedish woman says that its main advantage is that it doesn't make your clothes smell but adds, "Just remember to brush your teeth a lot, otherwise you'll look like an old hag."

Monday, March 09, 2009

Message to Obama

US brokers are full of gloom, some talking about the S&P futures bouncing off 666 last Friday, others saying the stockmarket could still halve. Here's an excerpt from James Meyer at Tower Bridge Advisors today:

"Today people are locked in fear. They are more fearful today than they were last fall when Lehman Brothers failed. They are fearful because their home values are falling and their 401k’s are collapsing. They are fearful that they won’t have a job. They worry that their money isn’t safe. And they are just plain fearful of the unknown.

President Obama’s number one job today is to overcome that fear. He needs to state in no uncertain terms the following and he needs to set policy to back up each of the statements below:
1. He needs to start by assuring every American that their money is safe. Not just $250,000 safe; the whole thing.
2. He needs to tell Americans that the Government will insure the integrity of the banking system. Yes, some banks will fail, but the banking system will not.
3. He needs to convince Americans that the Government will take aggressive steps to save jobs and save homes.
4. He needs to stop telling us that he inherited a mess and that things will get worse before they get better.
5. He needs to stop tossing around blame.

The President is our leader. Franklin Roosevelt’s most quoted line is that “We have nothing to fear but fear itself”. The stock market bottomed in early 1933 and went up for the next 3+ years even as the Great Depression continued. Why? Because he instilled optimism. In 1936, after suffering through 4 years of the worst depression of the century, Roosevelt got reelected in a landslide. There isn’t an American alive who doesn’t know that Obama didn’t create this mess and we all know the medicine will take time to heal our wounds. But we all want hope, and the only person to deliver that message is Obama himself."

Friday, March 06, 2009

British money for British people?

Thinking further about the QE theory, I'm wondering what happens if the M goes out of the British economy? Then British P and T still fall. I think George Osborne should ask the question: is there any ringfencing?

Thursday, March 05, 2009


Today's FT has a useful piece on the theory behind quantitative easing.


M is the quantity of money
V is the speed/velocity at which money flows round the economy
P is the level of prices
T is the number of transactions

If you believe that V is stable, increasing M must push up P or T or both, thereby reflating the economy.

The danger is that if people hoard the extra cash instead of spending it V will plummet, meaning that P and T still fall so deflation continues.

Wednesday, March 04, 2009

Limerick of the day

A graduate student from Trinity
Computed the cube of infinity;
But it gave him the fidgets
To write down all those digits,
So he dropped maths and took up divinity.

Tuesday, March 03, 2009

Satire of the day

Yesterday was the anniversary of the birth of Juvenal, the great satirist, in 55AD. Here's an excerpt:
"Most sick people here in Rome perish for want of sleep, the illness itself having been produced by food lying undigested on a fevered stomach. For what sleep is possible in a lodging? Who but the wealthy get sleep in Rome? There lies the root of the disorder. The crossing of wagons in the narrow winding streets, the cursing of cattle herders when brought to a halt, would make sleep impossible for a Drusus-or a seal. When the rich man has a call of social duty, the mob makes way for him as he is borne swiftly over their heads in a huge Liburnian litter. He writes or reads or sleeps inside as he goes along, for the closed window of the litter induces slumber. Yet he will arrive before us; hurry as we may, we are blocked by a surging crowd in front, and by a dense mass of people pressing in on us from behind: one man digs an elbow into me, another a hard sedan-pole; one bangs a beam, another a wine-cask, against my head. My legs are beplastered with mud; soon huge feet trample on me from every side, and a soldier plants his hobnails firmly on my toe."

Monday, March 02, 2009

Another Tiger and Fox

There is an old Chinese story about a fox that was captured by a tiger:
The Fox said to the Tiger,“You can’t eat me because the gods have made me the leader of all the animals.” The Tiger did not believe him but the Fox said, “Follow me and see if any animal challenges me.” The Tiger agreed and followed directly behind the Fox as the Fox began his walk through the forest. To the Tiger’s amazement it turned out to be exactly as the Fox had said. Not a single animal they encountered challenged the Fox. In fact, every animal they met fled in sheer panic. After several such encounters the Tiger finally agreed that the Fox was indeed the leader of all the animals and let him go.