Philosophical Transactions of the GPSOE

The Mystery of Christmas

2009-12-23T23:42:00.002Z

This is going to be a short post because a) I've just got in from the pub and I'm a bit pissed and b) its Christmas, but I want to say a few words about the season. About Christmas in fact and a tiny bit of what it means to me.

There is something about Christmas, or Yule or what you will, the mid-winter festival and feast that I think is important. Its easy, all too easy, in the grand orgy of crap that goes with how we mark Christmas in this age to lose sight of something slightly more profound about this time of year. In amongst the horrific orgy of consumer crap and constant rotation of perfume adverts and the general feeling of consume or die that stressfully screams from every media outlet, there maybe something deeper that we can only catch a glimpse of. Something important.

To me, that thing is the mystery of Christmas. Now, I don't mean the church advertising that Christmas begins with Christ, because while that may be true in spelling bee sense it doesn't begin to cover the truth of the matter. To me, the deep, still and profound heart of this thing is the sense of eternity that Christmas gives.

Since there were people, and to be honest if what we read is true, since before there were people in the homo-sapiens sense of things, there has been this festival. Its important, amidst the snows and frosts and iron grip of the winter to believe in the coming spring. Its vital to see the evergreen, to sense rebirth in the depths of winter, to know that despite all we think is important, despite all we think simple humans can influence, the world turns and the seasons shift and life will come again. At Christmas we are linked, whether we like it or not, with every generation before all us and all yet to come. From Victorian ice fairs to Georgian feasts to medieval mystery plays to Roman saturnalia and pagan green men to what ever the future holds, this one day connects us. We, humanity, may wax and wane and rise to magnificent heights or be cast down, but while we endure in whatever shape, this day is the same for all of us. This is the mystery of Christmas to me. We are insignificant as individuals in the face of the turn of the seasons, but this festival is our work and while we exist we will celebrate it. So, god, whatever you conceive him to be, bless us every one.

Merry Christmas everybody.

It begins

2009-11-10T21:12:00.004Z

Don't know if anyone saw today's Guardian, but it led this morning with the following story: "Key Oil Figures Were Distorted By US Pressure, Says Whistleblower."

The important point is that the International Energy Authority, who are responsible for the 'offical' estimate of how much oil there is left, appear to have been lying through their teeth about oil reserves. The article comes with this terrifying graph.

Take a look at that. The dark blue section at the bottom is 'crude oil - currently producing fields' and lo, it starts going down, and going down fast, before 2010, e.g. now. Gulp. There are some other lovely sections, my favourite is 'crude oil - fields yet to be found' which sounds to me like wishful thinking of the best couldn't-hit-an-elephant-from-here kind. The other cracker is 'non-conventional oil', which means Alberta oil sands basically. Now there are lots of oil sands in this world, but 1) they are staggeringly dirty because the oil is in a kind of bitumen sludge and getting it out releases huge amounts of carbon, and 2) it takes one barrel of oil to get three. In Ghawar, as far we know (i.e. not far at all) the ratio is nearer 1:40. So it ain't cheap. It looks to me like they just added a bunch of other sections to the blue one to make it look like the top line will keep going up and up and up.

The other interesting thing will be see what happens with this story. The Guardian led with it, but by mid afternoon it had been exiled to the environment page and was well behind the latest antics of Messers Jedward on the front page. In other words, I don't see the media picking up on it in a major way which is both staggering and worrying. Don't spook the horses, folks. Oh, Jedward, about whom we will soon be amazed we ever gave a shit in far gone happier times.

I'll be extra concerned when the markets start to think about this and make decisions, even bets they think might not come off (aka speculation) on it. That's when the fur will start to fly. It is interesting, as an aside (which I might return to in more detail in future posts) why they don't do so now. I can only assume that the consequences are so large, that they can't, psychologically can't, think them through and then take them seriously enough to actually act on them.

One final point, the article is written so that the key fact appears to be that the US (boo! hiss! Yankee imperialist running dogs!) have been leaning on the IEA to lie. This may be true, in fact it probably is. Its not that important though. The US pressuring the IEA won't change the geological facts. The important thing is that an IEA insider now says we are pretty well at peak oil. All the US arm twisting in the world won't change that.

After Belgium

2009-11-08T21:30:00.003Z

Following the recent GPSOE conference in the charming city of Brussels, a new and terrifying energy crisis has come to my attention...

Happy Monday everyone.

WYSIWYG? Ah.

2009-10-22T21:04:00.002+01:00

So much for the WYSIWYG Google blogger. For anyone who couldn't see the images in my previous post in Firefox, here are links.

The first was a diagram of Hubbert's peak in US oil production.

The second was a map from 1919 showing the growth of Edinburgh over time.

Sorry.

Godzilla & Beaker: One Year On

2009-10-21T22:36:00.002+01:00

A year and a bit has passed since Godzilla rampaged down Wall Street and Beaker cowered in the ruins of the City of London. At the time it seemed like the most significant event to have happened in our lifetimes since 9/11. For a few weeks in the autumn of 2008 capitalism seemed to hang in the balance. Serious people talk about the abyss. The FSA monitored cash machine withdrawals on an hourly basis, so fearful was it of a run on RBS. Nothing would be the same again.

And yet, here we are a year on and the most remarkable thing is how little has changed. Bankers are still paid big bonuses. Crappy plastic toys are still shipped from China to a Burger King near you. Amazingly, the almost certain next government of the UK blamed the whole thing on an over-mighty state meddling in the market, which is like blaming the ditch a car drives into instead of the drunk driver sawing at the wheel.

I’m going to have a crack at taking the lid off this in some detail. Was it that the predictions of apocalypse were too strong or have we just mistaken Godzilla for the Bug Blatter beast of Traal and assumed that if we can’t see it it can’t see us, so the fact that the City is not literally on fire means all is well? What was it that caused the crisis? Was it all hocus-pocus securitisation or was something deeper and far nastier at work?

First, some honest to goodness facts.

in the first quarter of this year the UK economy contracted more than at anytime since the great depression
the bank bail out has cost the equivalent of £5000 for every man, woman and child in the country
US unemployment has risen not a kick in the arse off 10% and some people worry the real figure might be nearer to 20%
A recovery of sorts appears to be underway, but as all the people claiming that also claimed that there was nothing to worry about in August last year I am inclined to take that with a pinch of salt

All this is what us seasoned and sober people like to call Bad Shit.

Now we are a year on, its time to ask the question again: what the fuck happened?

The choke chain and the volcano

In my post last year I tried to explain the factors that went into the near collapse of the financial system. I was absolutely right and absolutely wrong. I was right because all the factors I mentioned, investment banks with far-too-smart-for-our-good people slicing and dicing debt into weapons of financial destruction, their greedy grasping rotten culture, low interest rates caused by increasing Chinese productivity, the sudden loss of faith in the system, they were all there. Together they made a perfect bonfire and last year it burnt viciously. Its still burning.

I was absolutely wrong because I didn’t see that the bonfire was built on top of a volcano and the little flames we’ve seen are caused by its first stirrings.

The volcano is called Mount Peak Oil and if you don’t know about Peak Oil now, relax and take it easy, because you soon will. In my seasoned and sober analysis it gets a special category all of its own: Motherfucking Bad Shit. It one thing I really really hope I am utterly 180 degrees wrong about. Peak Oil theory starts with a simple premise: oil is a finite, fossil fuel and one day it will run out. Like, duh. It gets interesting when it starts to describe how its going to run out and what that will feel like.

The guy who first figured all this out was a geologist in the employ of the Shell Oil Company called M. King Hubbert. Hubbert realised that every oil well follows a curve in its production.

With a classic ‘gusher’ oil well - the kind that still provides most of the oil we use everyday, the first sip of the milkshake is by far the easiest one. Hell, mother nature was actually kind enough to bury the stuff under pressure so it actually squirts out of the ground as soon as we drill down to it. After about half has been pumped out through its own pressure though it starts to get tricky. What’s left is under no pressure at all, so for the pumps to work pressure has to be introduced. The easiest way to do that is to pump sea water into the well, boosting the pressure and forcing the oil out. The more sea water you pump in though the worse it gets because the water and the oil mix and the mixture has what’s called a water-cut - a percentage of the liquid that comes out the top that is just sea water and not oil at all. The emptier and emptier the well gets the bigger and bigger the water cut gets, until what coming out is so diluted that it no longer makes economic sense to continue, basically it costs more than a barrel of oil is worth to force one out of the dirt and the well is abandoned. This process follows a curve. For half of the well’s life production grows and grows, until it hits a peak and then production declines until the well stops pumping altogether. This is true of every well that has ever been found.

This pattern was first predicted by a Shell geologist called M. King Hubbert in 1956. To a chorus of catcalls and boos he claimed that the world’s pre-eminent oil producer, the United States of America, would peak between 1965 and 1970. He didn't factor in the Arabs turning the taps off over Israel, so the US actually peak at the end of his estimate in 1970. The North Sea peaked in 1999. Saudi Arabia? They aren’t saying.

Oil discoveries peak too. The top year for finding new fields was 1965. New fields that we hear about now are both tiny in comparison to existing fields and horrifically difficult to get the oil out of. At the first gusher, at Spindletop in Texas, the oil was buried under a thousand feet of sand. Not exactly easy to get out, but the new field off the coast of Brazil that is getting everyone excited is under 2 kilometres of water, 4 kilometres of rock and 6km of salt. Getting at it is the equivalent of trying to drill through the sidewalk from the top of the Empire State Building using a strand of spaghetti. And after all that effort, at current rates of consumption all the oil in the new Brazilian field will last the world three months. Three months.

What is true for one field is true for them all. If the US peaked, Saudi will peak, Russia will peak, Mexico will peak. The world's production will peak. And of course demand keeps going up and up and up.

What this all means of course is that we’re not going to run out of oil anytime soon, but we are going to run out of cheap oil. In fact, we’ve probably run out of cheap oil. Hell, here we are in the teeth of the worst economic crisis since the second world war and its still seventy bucks a barrel, which was apocalypse money not so long ago.

Here are some more facts:

the price of a barrel of US crude oil in January 1999 was $16
nine years later it was $147

Each little incremental increased was explained away; it was speculation, it was some Mexican bandits blowing up a pipe, it was the Iraq war, it was speculation again by those nasty hedge funds. All true. However, the price kept going up and up and up. The real reason is that we’ve run out of cheap oil. The world oil supply has peaked. From now on demand keeps going up but supply will start to fall. The price will go through the roof.

Which brings us back to the credit crunch, great recession, call it what you will. The real cause for the problems we’ve now got is the price of oil. The credit bit was a perfect little bonfire we built which lit when people couldn't afford their subprime mortgages because they were spending too much on oil related stuff - petrol by and large so all the securised debt went up like the fourth of July.

Cheap oil is the reason our civilisation works

The reason this is important is that everything in our modern society with possible exception of the rules of cricket is utterly dependent on oil. Everything we do, everything we consume, everything is in some way a measure of energy. If that energy is cheap, cheaper by miles than it has ever been in history, we’ll can do loads of stuff, stuff that we are going to find harder and harder when the energy price goes up.

Let’s take an example of a city. Let’s take Edinburgh in fact, because I live there and that’s the kind of effort free research this blog is all about. And let’s start in the middle of the city.

The oldest part of Edinburgh is the medieval core - the long rocky ridge that runs from the castle to the Palace of Holyrood house called The Royal Mile by tourists and the High Street by people that get pissed off during the festival. This was all Edinburgh was for a few hundred years; people built towering tenements, burnt witches, got their asses handed to them by the English on a regular basis and threw their shit out of windows. Happy times. They also got their energy from brute muscle power, (their own and their animals) and by burning wood. Not a great deal happened.

In the mid eighteenth century Edinburgh Got Civilisation in a spectacular way. They built the New Town, still perhaps the finest example of the enlightenment applied to building and then invented the modern world. David Hume changed how we think about religion and the nature of reality, Adam Smith invented modern capitalism though he’d do his fucking nut if he saw what people did in the name of the invisible hand now, James Hutton invented geology and worked out the earth was really, really old and so on and so on. These people also relied by and large on muscles and wood and a bit of coal. They made it go a really long way though. The thing to remember here is that most of the food they ate came from down the road and was brought in on horses and carts. The stone for the New Town was also local and was also lugged by a (presumably very over-worked) nag. The glass in the windows was hand rolled. The lead smelted in tiny furnaces. There were exotic things from half a world away, tea and opium and bottles and bottles and bottles of booze, but this stuff came in to Leth docks on sailing ships. Their energy profile was low, the only thing that had changed since medieval times was their minds and their plumbing.

That changed in the nineteenth century though. Thomas Newcomen and James Watt (another local boy) figured steam engines out, used them to pump water out of mines that would otherwise flood and suddenly coal mining was possible on a major scale. Shazam - the industrial revolution. Now, a few other things happened as well to make that possible, I’ll give you that, but the key was the sudden massive increase in the availability of energy and drop in its price.

This made industrialisation possible. Factories made sense. Edinburgh grew another ring, a Victorian, industrial one of tenements for the workers and villas for the middle classes. This was a coal age. The jobs, industrial scale brewing for example in Edinburgh, were made possible by coal, the food came in on coal powered trains, the ships in the harbour were faster and carried goods cheaper and burnt coal in their boilers, the building materials were mined and quarried using coal and occasionally young men got on coal powered ships and sailed off to be blown to bits by coal forged heavy artillery.

Coal is better than wood because it is much more energy dense. Energy density is a simple measure of how much of an energy wallop a set amount of a thing provides. Wood is about 6 Mega Joules per kilo, bituminous coal (the kind used in steam engines) is about 24 MV/kilo and oil, crude oil, is 46.3 MV/kilo.

In the early 20th century we shifted from coal to oil and even-bigger-shazam, things changed again. Energy was so cheap and so easy to move around that it transformed the city.

Look at the modern bits of Edinburgh, or any city for that matter. The most modern parts are utterly, utterly dependent on oil. The houses have parking for two cars and without them no one could get to their work in their out of town business parks or shop at their out of town big box retailers where they can buy an apple for 34p that has been flown in from Chile. Chile! The twentieth century buildings in between the big boxes and executive homes and the Victorian ring are oil dependent too, but it was built for oil in buses, not cars. The cars line the streets, but the housing materials came in on trucks from all over the world.

In other words, you can walk across the part of the city that isn’t built by oil in about 45 minutes. The rest of it, all 400,000 people worth, is a creature of the oil age. That’s what’s at stake when the cheap oil runs out.

My point simply is this. Economic activity is dependent on cheap energy. There is no cheap energy left.

The oil price will go up and down because its very sensitive to fluctuating demand and small supply problems can cause it to spike. The trend is clear though and its up up up. This means that the oil price will act like a choke chain on the economy. The economy grows, so the oil price sky rockets because the cheap stuff has run out, which means people can’t afford oil based stuff, e.g. everything, so the economy collapses and so does the oil price. But it collapses to a higher level than it did the last time. The economy staggers back to its feet and takes another run, the oil price spikes, the choke chain snaps tight and the economy collapses again. This is the pattern I fear we will see over the next few years.

The Tibetan name for Mount Everest is Chomolunga, or Goddess Mother of the World. Our Goddess Mother is Ghawar, the Saudi oil field that is the source and wellspring of most middle eastern oil, and therefore most oil point blank. Its likely that one barrel in twelve is Ghawar oil. Here is Paul Roberts, an energy journalist, writing in 2004:

"On a whim I asked my hosts (Saudi oilmen) about another , older oilfield called Ghawar. It is the largest field ever discovered, its deep sandstone reservoir at one time had held perhaps one-seventh of the world's known oil reserves, and its well produced roughly one of every 12 barrels of crude consumed on earth. In the iconography of oi, Ghawar is the mythical giant that makes most other fields look puny and mortal. . . .

"At Ghawar,' he said, 'they have to inject water into the field to force the oil out,' by contrast, he continued, Shayba's (a newer, smaller, field) oil contained only trace amounts of water. At Ghawar, the engineer said, the 'water cut' was 30%."

"The hairs on the back of my neck stood up. Ghawar's water injections were hardly news, but a 30% water cut, if true, was startling. Most new oilfields produce almost pure oil or oil mixed with natural gas--with little water. Over time, however, as the oil is drawn out, operators must replace it with water to keep the oil flowing --until eventually what flows is almost pure water and the field is no longer worth operating."

Ghawar is at, or near, its peak. The economic crisis that we in the midst of now is likely to be the first of a series of profound shocks that may well end up shattering our economy. The worst thing in my mind is that it may already be too late to do anything about this, but our response right now - attempting somehow to stick the toy back together and carry on as business as usual and that will make it okay - is perhaps the worst thing we could do. This, and some of the things we might be able to do to soften the blows as they continue to come will be the subjects of my next posts.

A Small Gesture of Defiance

2009-09-01T22:02:00.002+01:00

September is here. Summer, such it ever arrived in misty moisty Scotland, where I lurk, is over. Its pissing with rain. Its not all bad though. The Edinburgh festival is over and all the overconfident public school kids are heading back to the home countries to work on a better version of their one man shows that relate the plays of Henrik Ibsen to American imperialism. The trees will start to turn soon and the streets will fill with coloured leaves. Its time to get a new hat and scarf after last years have inexplicable vanished. Soon it will be time to put whiskey in everything again.

Its downhill to the end of year from here. Next stop the clocks go back, then its Haloween, bonfire night, Christmas. In the corridors of our nations corporations something else is stirring though. Its nearly Performance Management time.

Performance management time is the least magical time of the year. If my experience of three separate multinationals in three separate industries is anything to go by, the process will feel very similar. Groaning, unhappy people will be forced to dig out all the promises they made under solemn troth to their managers at the start of the year (aka ‘objectives’) and will realise that the year has not worked out like that and their objectives are mainly rubbish. Next, a flurry of emails will arrive from people you might once have gone to a boring meeting with asking for feedback. Then, stung into action, you send out your own email, hoping for a good word from someone important enough for your boss to pay attention to. All of this is pulled together into a document, probably using a horrifically unfriendly template or knuckleheaded online system and the resulting tissue of lies, assertions, spin and desperate nonsense is submitted to your boss. Your boss then doesn’t pay any attention to the document anyway because they have already made up their mind about how good, bad or indifferent you are based on nothing more concrete than their own view, which might be based on an email from March or a tricky meeting over the summer and they assign you a score, usually a number. The number then gets plugged into a reward system and you get the same tiny rise whether you are a genius or the zombie spawn of Saddam Hussain and Dick Cheney. Whoop whoop.

There are a few things very, very wrong with this picture. I’d like to propose one small way of fighting back against it.

First, the things that are wrong with it.

Remember school? Schools, bless them, are set up to rate the kids. This might not have always been true - hell, I heard this crazy story that one point their purpose was to teach kids stuff, but now more than ever they are designed to find out how ‘good’ the kids are. The whole system is set up for assessment, Kids are assessed, examined, graded and compared. They are tested on their knowledge, their behaviour, how they tie their ties and the neatness of their handwriting. In this age of New Labour’s management gone stark staring bugshit crazy, they are examined from primary school through to leaving the place. Assessment is constant, both formal and informal. Teachers have a view on you and tell your Mum and Dad about it, the scabs. There are loads of separate subjects so your quality can be judged in different areas. Exams are a constant threat. They are set up to be objective - external examiners and national standards proliferate. Schools are basically engines of assessment, And yet they still get it wrong as many times as they get it right.

How many times at school did you get a mark or a score and think, yeah, spot on, got me there? And how many times did it feel that the mark had basically been randomly assigned by a monkey? Even exams are little better. I recall getting an A in one part of my History A Level and an E in the other. That’s quite a gap. Many of my friends got worse marks in the subjects they were good at and enjoyed than in the ones they hated. Some really smart kids got poor results and ones that were quite obviously just robots with sparks coming out of their backs got straight As. Sometimes schools get it right - I’m not here to slag the whole system (not today anyway), but they still get it wrong far, far too often. And schools are there to assess.

Now look at a business. They are not there to assess. They are what all the bloody assessment is for. Businesses and organisations have other things to do. They are there to pump oil, or publish magazines or print money. The little roles we play in these organisations are cogs in a giant, inefficient machine that spits out widgets and only after it has outsourced most widget manufacture to the Chinese does it think to assess its people. Its starts to think about it round about now in fact, but it never thinks about to too hard. In other words, getting a score - one sodding number - that is meant to capture all the things you did in the year and pin it down behind glass is a sick joke. Everything you did is meant to be there. The difficult meetings, the aced presentation, the audio call you spent drawing picture of elephants on your notepad, the tricky customer, the soft sell, the new boss who doesn’t understand what you do, everything. In one number. Is it any wonder that it feels like the monkey is back and pulling numbers out of a hat somewhere in HR?

There’s also the fact that even if it was possible to reduce your whole year to one number and then if some all knowing eye in HQ attached to Solomon himself was able to correctly assign the number to the wicked and the righteous alike, it would still piss off more people than it pleased. Put simply, most of us think we are doing a better job than we are doing. So if you get a high score, then it feels okay but nothing special, but if you get a medium or low number, even a humble ‘met expectations’ you are reduced to teeth grinding fury. How could they? How could they not see? In other words, we go through this awful process and at the end most people are mad as wasps, then try and leave early and slag off the company in the pub.

There’s lots more wrong with the whole thing. (See here for a brilliant review of the whole sorry mess.) Its that the process itself is utterly dehumanising for assesses and assessors alike. People don’t do scores. Scores are for sport and that’s where they should stay. There is something mechanical about the whole cold thing. It is a process of metal gears and wires. People are not allowed to just be. We are coached and developed and encouraged to be more like some crazy idea of a corporate superman, who is both wise and just and tempers project management with mercy. Fuck that. The person who is the glue who holds the team together is not rewarded because what they do can’t be measured. The fools! Very little of actual value can be counted. In companies where the dreadful ‘rank and yank’ forced distribution holds sway people are compared to each other even when who they are, what they know and what they do is utterly different. This competition is dehumanising and degrading. It is a tribute to the essential decency of so many people that such organisations don’t descent into a Hobbsian war of all against all to get the best score.

I’d like to propose one small gesture of defiance in the teeth of this hideous, inhuman process.

Refuse to be told the number, Just flat out refuse to be told. Have the conversation about what went well and what didn’t, what you are good at and what you could be better at. Hell, you might learn something. Just refuse the number. Its a meaningless nonsense anyway that bears little to no relation to your year. Tell then you don’t want to know. Tell them they can’t reduce a year of your professional life to a simple score. Fight the power. Tell them you are a free born Englishman. Don’t take any shit.

180 days

2009-04-02T21:50:00.002+01:00

Stephen Hester has been the chief exec of RBS for 180 days now. My sources have revealed some of the highlights of his tenure so far:

November 23: offers to play Fred Goodwin at Risk with Goodwin's pension as the stake. Loses.

December 1: shaves Alistair Darling's eyebrows off at Gordon's Krazy Kredit Krunch drinks party

December 7: will only travel around executive suite on Mr Hoppy the spacehopper

December 11: solves the Gogarburn rabbit infestation problem with a shotgun and a bad attitude

December 15: finds juju left buried under office by Goodwin. Leads voodoo ceremony to purge evil spirits

December 18: photocopies his arse during Christmas party and faxes it to the Treasury

December 22: demands to know where Goodwin kept the office bottle

January 5: presentation to city analysts about further capital raising ends with him screaming 'the power of Christ compels you!'

January 8: finds the Gogardungeon. Frees prisoners, one of whom claims to be a 'Fred Goodwin', a brilliant and humane financial mind, who had been imprisoned by his evil twin, Hans Goodwin in 2004

January 12: refuses to come out of his office until the government is paid off

January 15: attends Board meeting carrying a white cat. Says nothing throughout the whole meeting, but stokes the cat constantly

January 19: helps out at Gogarburn branch of Starbucks

January 22: sticks picture of Gordon Brown on the executive dartboard

January 28: savagely beats head of JP Morgan shouting 'securitise this motherfucker!'

February 2: asks to be Tom McKillop's friend on Facebook. Is refused.

February 7: wonders if pretending to be McHester would help

February 19: farts in a board meeting. Blames it on the finance director.

February 22: will only answer to the name 'Fred'

Feb 28: is disturbed after head of the investment banking division is bitten by a Translyvanian bat and now will only attend meetings during the hours of darkness

March 3: tries on a series of wigs

March 10: attends his one to one with the head of the investment bank armed with a revolver with silver bullets and a crucifix. Reports tell of the sound of the flapping of leathery wings and shooting.

March 11: hires new member of staff, Professor Van Helsing of the LSE

March 17: cleans up in scrabble with the word 'leverage'

March 25: takes entire board to see 'Watchmen.' Gets in huge argument with Risk Director about Rorsarch

March 30: sings Jacque Brel's Amsterdam to ABN AMRO executive team

April 1: attends anti capitalist G20 demo as an anarchist. Throws TV throw the window of RBS branch in Cornhill. Screams 'rock'n'roll!'

Gripes

2009-01-30T21:34:00.003Z

As I sit here, stuck in on a Friday night with a bad case of what can only be called the shits (gastrus dehlius), my thoughts turn naturally to the Problem of Evil. There are two examples of, well, evil is a bit strong, but deep nastiness that I want to talk about this evening.

The Problem of Evil, as you all know but I have to say just in case like, is the philosophical problem of reconciling the existence of evil with a world created and ruled by a good God. Hume put it best with these three quietly devestating questions:

"Is God willing to prevent evil, but not able? Then is he impotent. Is he able, but not willing? Then is he malevolent. Is he both able and willing? Whence then is evil?"

There is a whole branch of sophisticated theology dedicated to coming up with a way of answering these questions in a way that both acknowledges evil, which we see around us in the form of wars, Sharon Matthews, sudden audits etc, and the less provable existence of a good God. It is called Theodicy, and I assure you that the fact that this word sounds like an Anathem style mash up between theology and idiocy is purely co-incidental. One of the more interesting arguments employed by Theodicy is that evil is required to serve the purpose of a supposed greater good. For example, evil must exist to enable choice and free will. (Let's just leave the argument about whether or not that's a greater good alone for the moment.)

All of which is a long winded, half a bottle of red wine when I'm not well, way of saying that I want to talk tonight about two things that are downright nasty but that serve a greater good. The first is bankers not realising that their world is over, and the second is right wing fuck nuts on the internet.

Bankers first.

"What are they, Strider?"

"They were once great kings of men. But Sauron the Deciever gave to them nine Rings of Power. Blinded by their greed, they took them without question, one by one falling into darkness. Now they are slaves to his will. They are the Nazgûl: Ringwraiths, neither living nor dead."

There we have it. The great Kings of Wall St and the City, blinded by greed and fallen into darkness. All they worked for is cast down. And yet, they don't seem to have noticed. The Wall St banks gave out $18 billion in bonuses this past year. EIGHTEEN BILLION DOLLARS! That's for the year in which they have destroyed the world financial system, broken most of the bulge bracket and left the rest on Government funded life support (how's that for socialised medicine) and caused untold misery among ordinary people who have now lost their jobs because some fuckwit in an expensive shirt made a horrid mistake. Unless Bin Laden is paying for the bonuses, I'm not sure they deserve them. In the UK, banks advertise and recruit and go about their business as if nothing has happened. The only difference is that they actually do less of the only thing they do that helps, which is lend to businesses. Other than that, they are cocooned in arrogance. We have socialised loss and privatised profit and it makes me boil with rage. These monsters are bent to the will of the Adversary and are neither living nor dead. They cannot live by standing alone and going about their business, yet they are too important to the economy to die and the government is too gutless to actually get it over with and nationalise them.

The greater good here is the idea of the free market. The market is flawed, yes, and it is not the answer to everything, but it remains the least worst system we've got. Free markets don't throw up soviet style warehouses full of left shoes with no right ones to go with them. They need to be strongly regulated, and yes the commanding heights probably should be state owned, but the general principle probably is a greater good. Exhibits in favour: Google, Apple, Timothy Taylor Landlord, Lil Wayne records, the Ferrari 250 GT SWB

Aragon for PM, I say, and Gandalf for Chancellor. Gollum for Archbishop of Canterbury.

Fucknuts second.

Greater good: free speech. Necessary evil: conservapedia. I have no doubt that something so one eyed and biased that claims to be even handed is actually evil. That is the hallmark of propaganda across the ages and I'm a Popper fan who believes in the open society. However, I'm almost prepared to give this website a pass for services to comedy, because it so hilariously biased. The article on Obama is a masterpiece that I urge you to read. If you can't be bothered, here are some gems:

The first line of the article is: "Barack Hussein Obama II (allegedly born in Honolulu" Gotta love that allegedly. And the use of Hussein, though I have to say I got a thrill when I heard him use that name during the inauguration.

It gets better: "To announce his trip to Berlin in July 2008, Obama used posters which show a marked similarity to posters of Lenin."

You get the idea. There are pages about Obama being a Muslim (though as that limp wristed hippy Colin Powell observed, and I may be slightly paraphrasing, "he's not a Muslim, but if he was so what?") of which my favourite allegation is this, because its so hilariously paranoid:

"(Obama) chose not to use the Bible for his real, private oath (of office)."

So we can laugh, ho ho, in our liberal old world enlightenment way, safe from head bangers who actually believe this shit. My rage about this, and the reason I'm prepared to use the word evil is that in some Kansas town right now, perhaps a pretty town with barn dances and golden fields of corn like Smallville and a drugstore with cherry pie and a gum-snapping waitress who calls you 'honey', there are children being told that the President of the United States is a closet Muslim who wants to murder children. This isn't a question of moral relativity - W really was an incompetent idiot who tortured innocent people - and it makes me happy that the internet also has Tim Kreider and Glen Greenwald and Richard Dawkins. If evil if a problem, then we have to try and solve it. Doesn't mean we can, but we can try.

Right. Got to dash.

Change we can read

2009-01-20T21:19:00.002Z

That didn't take long.

Feels good, don't it?

More thoughts later.

The Fourth Pit of the Eighth Circle

2009-01-13T21:36:00.003Z

I was now wholly set on looking into the disclosed depth that was bathed with tears of anguish, and I saw folk coming, silent and weeping, through the circular valley, at the pace at which litanies go in this world. As my sight descended deeper among them, each appeared marvelously distorted from the chin to the beginning of the chest; for toward their reins their face was turned, and they must needs go backwards, because they were deprived of looking forward. Perchance sometimes by force of palsy one has been thus completely twisted, but I never saw it, nor do I think it can be. - Dante, The Divine Comedy: Inferno

In his Inferno, Dante gave the dreadful punishment of being made to walk with their heads turned backwards to fortune tellers, diviners and those who attempt for foresee the future. Its a terrible punishment, but its threat hasn't been very effective in stopping people from making predictions about the future, whether they be right, wrong, or utterly bonkers. Its not going to stop me either, but I hope that the worst that will happen is that I am merely foolishly wrong, rather than having to spend eternity doing calinsthetics with Mystic Meg. So, what do I think might happen in 2009?

First up, the economy.

If you have a secret lair, desert island, hollow volcano or means of leaving earth, make use of them now. This year is going to be very bad. Its entirely possible that one or more of the clearing banks will end up fully nationalised. I expect many more famous names to go to the wall this year; suppliers of things that require major cap-ex , middle ranking luxury (the really rich will endure) and anything to do with the building trade to have a particular torrid time.

The Governments arms are increasingly tied by the hoooooge national debt we've run up, so I don't expect a pump priming programme like the one that Obama has planned for the US. There are still advantages to the mighty greenback, as the yanks are being reminded right now. Having the worlds reserve currency as means of exchange means you can play a bit faster and looser than we can. Nonetheless, I'd expect more 'quantitative easing', which is central banker speak for printing loads of money and throwing it out of helicopters. They may chose to used one of the HM Treasury controlled banks to run this.

Speaking of the Obama public works programme, expect it to get much, much bigger. Potentially generationally defining big; think Tennessee Valley Authority or the Hoover Dam, but based on green technology and infrastructure.

Its not beyond the realms of possibility that joining the Euro will look much, much more appealing as the year goes on. Broon will never have it though. However, he may well call a general election this year, maybe in the spring before it gets worse and after he's had his photo taken with Barry O outside number ten. It won't work. Hopefully we'll have a hung parliament and Vince Cable will get the Chancellor's job. Worst case scenario: we get the fucking Tories back.

I appear to have strayed into UK politics there, so let's do US politics next.

Obama will disappoint loads of people. He's not actually a superhero, despite what Marvel think (how amazingly cool is that Spiderman / Obama fist bump by the way?) and he is a centrist. And yet, and yet.... He's appointed a cabinet with not just competent people in it, but potentially great people. He's got a nobel prize winning scientist as Secretary for Energy who's confirmation hearings read like a dream of what you want from a SecEn. I will disagree with somethings he does, and he will have to play low down and dirty politics (after all, he does it so well) but I expect a pretty good year. I hope and expect swift leadership on climate change, closing Gitmo, draw down in Iraq and decisive action on healthcare. I do not expect: huge change in Israel policy (it'll change a bit, but no huge swing), results in Afghanistan, charges brought against Bush and Cheney.

Sport-wise, I'm going to wind my neck out and say England for the Ashes, then KP will bugger off to the IPL. United for the league. Inter or Barca for Big Cup. Berbatov to wake up and score the goal of the season at some point. Ferrari for F1. Dunfermline Athletic to finish third in the only competition that matters, the Irn Bru Scottish First Division.

Finally, Apocalypse watch: expect Yellowstone to unzip and blow us all to kingdom come so that the entire midwest looks like something from the Inferno, God help us all. Expect this to happen the day after I get a girlfriend.

MMIX

2009-01-06T21:05:00.004Z

When I turned 21 my Dad took me to one side and shared with me the terrible secret known only to adults. He didn't beat around the bush. "Once you've passed 21," quoth he, "time speeds up."

Silly old sod, I thought. But God help me, he was right. In a small way it only seems a fortnight since last I blogged, but the cold hard facts tell me that was the 20th of November. Christmas has come and gone. Hogmanay must have happened. I'm back at work and it sucks, sucks, sucks. I've spent the last two days at the place of toil staring into space with (to quote the great Mark Twain) the 'deep, deep, subtle, subtle expression of a bladder' upon my phiz. Christ.

So, gentle reader, you have been spared my half baked ideas on the mysteries of Christmas and my musings on the latest tottering steps the economy takes towards its doom. Instead, may I present The Andys, my awards for the men, women, events and beasts of 2008.

The So, Farewell Then award for the dearly missed.

Tim Krieder, of The Pain - When Will It End? He's not dead, thank God, but having waged cartoon based war against the Bush administration for $20 a week, he's off to do something else for a bit. Have a look at the archives on his site and have a good nose around. You won't be disappointed. For example, the 30 July 2008 'Lost Secrets of the Ancient Americans' is heartbreaking, enraging and funny all at once.

The artists statements are as good as the cartoons too.

The 'Get it Right Up Yous!" Moment of the Year

While I'm tempted to say Barack being elected or Lehman going bust or something equally seismic, for me its actually England's Brave John Terry missing his penalty in Moscow, and so by his agency Manchester United winning the European Cup 50 years after Munich. If Terry hadn't wanted to be the big man and win it for his wretched little club they might actually have done it, but good triumphed, evil was overcome and Bobby Charlton was serene in his heaven.

I know describing the red evil empire of Manchester United as 'good' could be pushing it, but in football it is a relative concept.

The Couldn't Hit An Elephant From This Distance award for misplaced optimism

All economic commentators up until about September.

The Sarah Palin award for dragging the very thing that you claim to love through the dirt and if there was any justice Thomas Jefferson and George Washington would rise from their mighty tombs and come crashing through the windows of your house, the dirt of the grave falling from their yellow peeling skin and rictus skull smiles and rip you limb from wretched limb while screaming Tyranny, Tyranny! so that the last thing that passed though your diseased evil twisted little mind (apart from Washington's axe) was the knowledge that not only had you failed but you had betrayed your country and that Hell awaited you Award, goes too...

George W. Bush. And Sarah Palin.

Happy New Year folks!

Next time, what's going to happen in 2009? Is the supervolcano better than the credit crunch? Etc!

Some kind of floating hotel praxis

2008-11-20T21:20:00.010Z

Aieeee! That sound of torment is my anguished cry as am forced to return to blogging chores. I had been hoping for leniency, but alas for me, and for you, gentle reader, I am driven by the agency of pointy sticks back to the uncomfy desk, for to witter on in the empty echoing vastness of the blogosphere. Ahem. All of which is a frankly silly way of saying that I have been on holiday and I've got better things to do on my holiday than blog blog blogitty blog. Looking out the window for example. Or reading a damn fine book.

Both looking and reading were occasioned by traveling from Bergen up and round the coast of Norway, to Kirkenes on the Russian Border.

I travelled by Hurtigruten, (or Hurttigrutimurtiturtigrun, obviously) which was great, apart from the fact that me and my mate were the youngest people on the boat by about 30 years. It must be single party babes week on the Hurtigruten this week, not last. Damn. Anyway here is a picture of wot I saw.

Drifting serenely from fjord to fjord while watching the awesome scenery roll past is an excellent way to spend time. It also leaves plenty of time for reading, so it was lucky that I brought a good book. A great book in fact.

Now, I know that Mr S Langridge, not of London Town, believes that Neal Stephenson jumped the shark the moment he finished In The Beginning Was The Command Line (though he may concede Snow Crash if he's in a good mood or drunk) but I disagree. I liked Cryptonomicon. I loved the Baroque Cycle, all three and half thousand bastard, brilliant, long hand scribed pages of it. I had the same feeling I got reading Jonathan Strange & Mr Norrell, like someone somewhere knew me and said, 'let's write a book for this bloke.' I guess I'm interested in many of the same things as Stephenson; science, philosophy, history and fucking great spaceships / sword fights, depending on when in history you find yourself. Anyway, his new tome (and it is a Tome) is called Ananthem, (a deliberate cross between Anthem and Anathema, though I found the clever clever linguistic mash-ups the least convincing thing about the book) and its ace. It is by no means flawless, but it creates an utterly convincing and internally consistent world, a task that has proved beyond JK Rowling for example.

Anyway, on the world on which Anantham is set, society has evolved into two camps. First is the saecular world, which isn't a million miles away from the society we live in now. The second part is made up of the Avout. Now, the Avout are like monks and nuns in some ways, they live in monastery type institutions and dress in robes, but rather than being religious in nature they are made up of scientists and philosophers. They live sequestered away in their 'concents', only venturing out into the saecular world once every ten, hundred or thousand years, and they take the long view. In one dazzling passage, the narrator, a young Avout called Erasmas, describes the location of his concent. He tells how it can be found down river from a natural crossing point and that sometimes there is only an inn or a gas station by the crossing, though occasionally that grows into a town or a city and skyscrapers overlook the concent, but such things pass and fall, and forests surround it, only for the process to begin again. These are people who view nuclear winters as the kinds of things that roll round once in a while. I found this juxtaposition of two views of time absolutely spellbinding. It has wonderful consequences in the story too. When an avout leaves the concent, he is uncertain if he (or she) will be picked up in a horse and carriage or in a helicopter. Both technologies (or praxis, as they call it) come and go and go and come.

Couple of other things, then I'll shut up about it for now. First, characters from our intellectual history crop up in this world, but under different names, and working them out is good fun if you're as sad as me. Secondly, a couple of new words really, really work. 'Plane', for example, meaning to destroy someone in an argument ("I got talking to Grant about philosophy and he totally planed me"), and even better, bulshytt:

Bulshytt: (1) In Fluccish of the late Praxic Age and early Reconstitution, a derogatory term for false speech in general, esp. knowing and deliberate falsehood or obfuscation. (2) In Orth, a more technical and clinical term denoting speech (typically but not necessarily commercial or political) that employs euphemism, convenient vagueness, numbing repetition, and other such rhetorical subterfuges to create the impression that something has been said. (3) According to the Knights of Saunt Halikaarn, a radical order of the 2nd Millennium A.R., all speech and writings of the ancient Sphenics; the Mystagogues of the Old Mathic Age; Praxic Age commercial and political institutions; and, since the Reconstitution, anyone they deemed to have been infected by Procian thinking. …

Procian thinking is his way or describing nominalist philosophy, or more extremely and cruelly, any kind of post-modern mumbo jumbo.

It is a word I intend to make a trusty friend.

Final point here. The concents are beautiful places, where people study and teach and research with no other purpose than tending to the flame of knowledge. They grow their own food and make beer and wine. They date and marry and live full lives. Now, I know this might mark me out as a bit of a weirdo, but I can kind of see the appeal...

Three Word Poem

2008-11-05T19:06:00.000Z

America. Fuck yeah.

Better Angels

2008-11-03T21:27:00.004Z

So we come to it at last, the great battle of our age. I believe that just about everything that could be written about the US elections has been written (somewhere there are monkeys with typewriters about to lose their jobs) but I'd just like to chuck in a final few observations.

First up, why should I, as an Englishman in Scotland, give two hoots about whoever the damn Yankees elect to strut around in front of old glory for the next four years? The first answer to this is about power, and the second more interesting answer is about legacy and philosophy and dreams. The first answer is obvious, so its the second one I want to dwell on here for a moment.

It was F Scott Fitzgerald that called the United States the 'last and greatest of human dreams.' America is the expression of some of the finest impulses and traditions that have shaped my own country and my own beliefs. It is ultimately an enlightenment project, an attempt to create a country and system of Government based on reason, self determination and, to quote one of the greats, government of the people, by the people and for the people. While its self conscious striving towards this ideal has been tarnished by some horrific acts, those acts are no different than those of every other industrialised country, but we hold America to a different standard. I'm not looking to downplay its crimes here, just to point out that the US suffers in comparison with its flighty rhetoric, but at least it has the rhetoric and it lives up to it more often than I can quite credit It is the best, bravest and most important attempt to make the idea of democracy and freedom stick, which is why its actions and elections are so important. If the yanks can't make this work, it probably can't be done. The American Caesar, the man to break the republic and establish a tyranny of fire and glory is always closer than we care to think.

The ideas that animated the founding fathers and still course though America today are ideas that spring from my country, or counties in fact. It was the infringement of ancient English liberties that so enraged the colonists. It was said in the build up to the English Civil War that 'magna carta is such a fellow that he will have no sovereign'. That was as true in the fields of Virginia was it was in the downs of Sussex. In fact, it could be said that the American Revolution was a replay of the English Civil War (minus some of the religious headbanging) and the same side won. The US is the finest expression of the better angels of the English political nature. The Scots shaped it too. The extraordinary flowering of the Scottish enlightenment forged ideas that became the tools of the craft of Constitution building in the hands of Jefferson and Adams. Hume and Adam Smith's thoughts on the nature of man and the best form of government to manage him directly inspired the founding fathers. In other words, the project of America is the project of all of us who see ourselves in the enlightenment tradition, especially if we are at all proud of what the sons and daughters our own lands contributed towards it.

My next observation is a bit less pompous. This election has been so much fun. I'm going to miss it. I've really enjoyed the musings of Michael Tomasky and Oliver Burkeman at the Grouniad, and Fivethirtyeight's been brilliant. If there's a rookie of the years for this election its surely Nate Silver (though a certain Mr B Obama might run him close.) The Economist's multi coloured bloggers at Democracy in America have great too (and funnier than I ever expected.)

Finally, and for the first time in a long time, I feel like we are on the threshold of something glorious in the election of Obama. America needs to dream itself up again and he can do it. Something extraordinary is happening. He'll let us down, the world is a hard and unforgiving place, the challenges he faces are colossal, and he's just a bloke, but for a glorious moment here I feel like I can believe in a political system, believe like I feel I should be able to.

Live up to yourself, America. There are some of us out here that share something deep in our souls with what you can be. Be true.

Swivel eyed nutjob revisited

2008-10-28T22:50:00.002Z

Hmmm. Just been having a little trawl round the website of the 'Christmas is the work of Druids at Stonehenge' loony as advertised in my previous post, and in amongst the ravings about the Illuminati and inane babble about freemasonry is a nice little section of holocaust denial.

Not so funny any more. In fact, Lorraine Day, M.D., fuck you.

Soul Man, and Swivel Eyed Nutjob.

2008-10-28T21:49:00.005Z

Here's something from wikipedia that caught my eye (my emphasis):

All Saints' Day (All Hallows Day) became fixed on November 1 in 835, and All Souls' Day on November 2, circa 998. On All Souls' Eve, families stayed up late, and little "soul cakes" were eaten by everyone. At the stroke of midnight there was solemn silence among households, which had candles burning in every room to guide the souls back to visit their earthly homes, and a glass of wine on the table to refresh them. The tradition continued in areas of northern England as late as the 1930s, with children going from door-to-door "souling" (i.e., singing songs) for cakes or money. The English Reformation in the 16th century de-emphasised holidays like All Hallows Day or All Souls Day and their associated eve.

I grew up in the North of England, and I used to do that. Didn't call it souling right enough, but the kids where I grew up used to go from house to house on Halloween and sing songs for sweets or cakes. Seems a somehow nicer tradition than the Yank import of trick or treating. Mind you, the way I sing I expect that the neighbours would have preferred a firework through the letter box.

Its somehow reassuring that I was part of such an ancient tradition, saddening that I seem to have been the last generation to do it (pretty sure it's stopped where I grew up) and slightly eerie that what seemed like fun for sweets, where the worst part was getting hot inside a plastic ghoul mask, was the remnant of a blurring of the walls between living and dead.

Meanwhile, while looking for an article about the superposition of Christian meaning onto ancient festivals of one kind or another, I came across this marvellous article. Its a treat. It starts of relatively soberly, pointing out that Christmas has no more to do with Jesus H Christ than it does with the family Ness, but then it proposes banning Christmas. A bit harsh, and I think it focuses too much on fertile crescent religions, rather than Northern European ones, but fair enough if you are a real Puritan.

It goes on. Easter is the work of Ishtar and ancient Babylonian false messiahs (it doesn't seem to have occurred to the author that the replication of the young-god-dead-on-a-tree-and-resurrected meme might have some some significance), Halloween (oh yes) is for SATANISTS and WITCHES and is the same festival where DRUIDS used to perform human sacrifices on the LIVING ROCK of STONE 'ENGE! The writer then descends in comedy gold, sorry, total swivel eyed lunacy, by claiming the Bilderberg group (BONG!) sacrifice humans (BONG!) in a wicker animal (Edward Woodward BONG!) at Bohemian Grove. (TRIPLE BONG ROLLOVER!)

God, I love the internet.

Things we lost in the fire

2008-10-23T22:33:00.000+01:00

While flogging my guts out for the Man today (and further apologies to Sil, whom I was unable to quiz on what 'relaxed and casual' for Top Gear might look like due to the Man's incessant beating of the drum in the rowing deck of the galley in which I must toil) I fell to wondering. and I wondered this:

In the forthcoming / already here recession, what's going to vanish that I won't miss? Hell, what will I be glad to see the back of?

Here's the beginnings of a list. Add to it if you can bothered, and the recession doesn't stop you mucking about when you too should be toiling in the pit.

Shops selling what I can only call girly pish. You know, cards with bows on them for no reason and that kind of thing. Okay in small does, but its got way out of hand.
'Style wine'. I was in a proper pub the other day and the wine list mentioned a Gewurtztraminer, a nice drop right enough, but it was a described as a style wine. Just. Fuck. Off.
Organic tapas. Actually, tapas outside Spain point blank.
Bottled lager in pubs that sell pints
Pseudo science, especially in adverts for beauty products. 'Vitalised with pro-oxy-tetra-lava-kittens.' Well, thank fuck for that.
'Gen Y' being feted in the media for being high maintenance and demanding. No kids, it is all our lot to suffer.
The laissez faire neo-liberal consensus. And that's from an Economist subscriber.
The Labour party being the Tory party
Paris Hilton and her ilk. Okay, I actually expect that as times grow dark we may well seek to distract ourselves with bread and circuses even more, but for a moment I want to imagine a society of Woody Guthrie songs and the dignity of labour
The Republican Party in its current odorous and vile incarnation. John, John, you used to be a principled bastard. A rock ribbed conservative bastard, but now? My God man, how can you sleep at night?

Anyway, you get the idea. Add away in the comments if anyone reads this!

One other note - if, and its still an if, the powers be cursed, Barack Obama wins the election I intend to have a Thanksgiving party on the nearest weekend to, er, Thanksgiving, so if anyone knows a recipe for Pumpkin Pie, or indeed knows what Pumpkin Pie is, let me know. Anyone who knows me and wants to come sing out, and I might even do it rather than just talk about it.

Royal Bank of Socialism

2008-10-20T20:49:00.000+01:00

According to the This is Money website, the new CEO of RBS, one Stephen Hester, who seems to be as smart as a tree full of owls, laid out a six point plan for RBS when he was asked by the Treasury during a snap interview during the bailout negotiations. His plan is a sensible one, but its based on the tacit assumption that idea of Government running a bank is Bad Idea, and that banks should get back to their own commercial ways asap.

Now, I'm not so sure that the idea of HM Government running a large chunk of the UK banking system is such a bad idea. Think of it as a return to the old mixed economy, but with a different idea of what the commanding heights of the economy are. Rather than the state owning utilities and railways under this model, (though there's an idea now I mention it - not sure that pissing off that awful old Trot Bob Crow is a good reason to keep the current totally fucked railway arrangement) the state owns big chunks of banks. Why? Well, here is St Andrew of Wishful Thinking's own plan, if the Treasury would just like to give me a call...

1. The Bank has a role to moderate the economic cycle. Owning a huge chunk of the capacity to lend would be a great way to counter act the natural cycle of capitalism, that is the tendency of the current system to lend too much during bubbles and not enough during downturns, making both worse. HM Royal Bank of Sod-Off-Alan-Greenspan could help balance that

2. The new Bank would play a long term support role for UK Manufacturing. I don't mean a cossetting role here, that insulates companies so when the cull comes it's worse (a la British Leyland) but a bank who's job it is to nurture, grow and support the actual, real, wealth generating economy. The idea is to support good business that might be having a few bad quarters. It won't be easy to find the line between sensible support and market distorting, unsustainable lending, but banks are full of smart people. They'll find it. Incidentally, this idea is supported by that notorious hippy journal, the Financial Times.

3. Support for strategic investments for the UK. I'm thinking of things like renewable energy, fuel cells, carbon capture, coastal defence, nanotechnology. I'm sure you could add to the list. Crucially, these are areas which we expect to make money - which is why we want a Bank to back them, not HMG directly - but they might not make money for years. In other words, the market won't solve these problems unless its given a hell of a shove. Enter the Royal Bank of Shoving.

4. Get shut of banking assets outside the UK that don't support the core mission. So, in terms of the 'City' bits, keep financing, payments and risk management, but bollocks to an Indian or US Branch network. These assets don't matter to the UK taxpayer, so sell them to an organisation that will grow them.

5. Some banking products are downright usurious and vile. I'm thinking of store cards at 25% APR. Undercut them. Make it easy - like three clicks easy - to move your debts to the Royal Bank of Support People. This is no soft option, if you as a customer take the piss then its curtains for you, but this could form part of a programme of proper financial and, hell, even counselling support to get people back on the straight and narrow

6. Finally, act as a bank for rural, isolated or deprived areas that the commercial banks can't justify putting a branch in. This includes shitty bits of the UK, where a branch designed to help rebuild the area might help.

The key point with all of this, is that the New Bank would still be a commercial organisation, run by the same hard nosed commercial bastards it is now, but rather than just focusing on making money, it would have a grander mission. In The Corporation, Joel Bakan argues that if a person acted like a business in focusing on the acquisition of money and never mind the consequences, we'd call them a psychopath and lock them up. (Read the book, by the way, its brilliant). What I'm advocating here is a corporation with a sense of its wider responsibilities as a citizen. It still has to make money, but that's not all it should do. Capitalism with a human face if you like.

And to all those who say that its not the business of Governments to run banks and that the market always knows best: look around. We tried that, and it really, really didn't work.

So foul and fair a day I have not seen

2008-10-13T20:17:00.000+01:00

A mere week has passed since last I came this way, and quite a lot has happened. My fearful feelings of panic last Monday bore horrid fruit; the Dow fell further in a week than it ever did in 1929, inter Bank markets went from bad to simply gone away, Lehman's toxic waste spilled out across the landscape at eight cents in the dollar and serious newspapers carried headlines like 'at the edge of the Abyss.'

I'm not entirely sure that Gordon Brown and his faithful Sancho Alistair have ridden up on white horses and saved us, but they have taken bold, decisive action, and for this moment at least our chances look better than they have in a week.

Part of the Government's plan of course is the effective nationalisation of most of the big banks, and it is part of that that I want to dwell on. Specifically, I'd like to talk about the Tragedie of Frederick Goodwin.

Now Sir Fred 'the Shred' Goodwin is not a figure that attracts much sympathy today. He is the erstwhile Chief Executive of RBS, and is the first and the most high profile banking exec to take the pearl handled revolver into a quiet room and be a good chap. Nonetheless, there is something of the genuinely tragic in the story, tragic in the Shakespearean sense. Here is a man who achieved great, astonishing things and was brought low by the very impulses that drove him to succeed. A flawed, brilliant man, undone by an unescapable twist in his personality. Sounds like tragedy to me.

Goodwin is a Paisley grammar school boy, which puts him in immediate contrast to a Scottish banking environment dominated by the clubbable, networked scions of Edinburgh's public schools. He is in other words an outsider, who rose to his position through a mixture of ambition, luck and a fierce first class intellect. This is a man who was a partner at Touche Ross at 28 - an achievement that takes others a career to achieve, if they achieve it at all. At 32 he ran a department of a thousand souls unpicking the bones of the BCCI fraud, an achievement that made his name. Make no mistake, he may be a cantankerous bastard, who never suffers fools, but he is a genuinely brilliant man.

Up and up he went, chief exec of RBS in his late thirties. Half a dozen years later it was the second biggest bank in the world, and by some measures the thirteenth biggest company on the face of the earth. Goodwin did this in a number of ways. He demanded results and got them. His mastery of the detail (all those years as a forensic accountant) kept the rest of the bank at a pitch of excellence: 'What would Fred think of this?" "Hmmm. Wouldn't buy it.' 'Agree. Do it again.' And he bought NatWest.

Nat West was three times RBS's size. It was also subject to a take over bid by RBS's great rival the Bank of Scotland. In a mixture of courage, astonishing self belief and sheer cold eyed aggression Fred snatched NatWest from BoS (which consoled itself in the arms of Halifax, which also ended badly). Meanwhile, the integration of NatWest and RBS was run so well Harvard Business School wrote a case study about called 'Masters of Integration.'

RBS just grew and grew. It broke its own profit records every year. Further acquisitions followed, in the US, in China, in the UK. In the spring of last year Fred Goodwin had built a machine that seemed capable of anything. No matter what was thrown at it, analysts reports, city sneering, deals on three continents, it just grew stronger and badder and bigger. It was with this machine under his hand that he turned to what was to be his finest, valedictory moment.

The story was beguilingly similarly to the Natwest takeover. Barclays, which was seen as somehow a softer, weaker bank than RBS, was negotiating what seemed to be a cosy merger with the huge, multinational Dutch conglomerate ABN Amro. ABN Amro was a different beast to NatWest through. No stuffy, sloppy, fat English aristo here. No, ABN operated in 54 countries. It had a hundred thousand people. It was worth over 40 billion pounds. No one had ever attempted a hostile take over of such a beast before. The only thing vaguely comparable was the AOL / TimeWarner deal, and that was based on inflated dotcom bubble valuations and it was friendly. AOL wasn't a monster of complexity a world across and three hundred years deep. ABN was.

Fred went for ABN like he'd gone for NatWest. This time he involved other banks in his posse, Fortis of the low countries and Santandar of Spain. They outbid Barclays (again its the self belief, vision, sheer agression) and stuck to it. They stuck to it when ABN sold its US arm, La Salle, which was half the reason RBS wanted it, to Bank of America. They stuck to it through the summer when the credit crunch darkened the horizon and common sense said to lower the bid. No though. He wouldn't back down. Not in the teeth of the most ferocious criticism; never back down.

RBS and its sidekicks horribly overbid for ABN to win the deal. They paid £45 billion in cash money, which was 17 times the book value of the bank. In other words, thats 17 times value of ABNs assets if the bank was to be liquidated. In the good times this would have ben amazingly overpriced, but perhaps just, just, justifiable given the benefits of the ABN deal to RBS and Goodwin's track record of integration, but in the bad times it was madness. And when the deal was signed the bad times were very clearly round the corner. No one expected them to be this bad though.

RBS won ABN and with it set the seeds of its own destruction and that of Goodwin as well. Times grew tighter. RBS had to run the biggest rights issue in European history, asking shareholders for £12 billion to repair the ravaged balance sheet. Goodwin got it, but after paying cash for ABN and repeatedly denying that RBS planned a rights issue, the writing was on the wall. A tiny shift had taken place, in which his brilliant mind and subtle strategic sense had been somehow overwhelmed by the will to win, by the desire to beat Barclays flat, by his own crushing ego. Confidence had become arrogance, aggression hostility, self belief had tipped into overwhelming ego.

From then on in it was chronicle of a death foretold. The financial crisis has laid bare the faults of the ABN deal in dreadful detail, and its architect has been overthrown. Destiny had become hubris, and after hubris, Nemesis.

"He's worth no more

They say he parted well, and paid his score

And so God be with him! Here comes newer comfort."

And now, something funny

2008-10-06T22:26:00.001+01:00

That's enough gloom. This brilliant SNL sketch nails the VP debate. Ah, shucks, thank God for Tina Fey.

Panic on the streets of London

2008-10-06T21:11:00.000+01:00

Its Monday, it must be a meltdown. I was going to open tonight by suggesting that matters would be immeasurably improved if every stock and bond trader on earth had to wait 24 hours and have a really nice calming cup of tea between receiving a piece of information and making a trade. The idea here being that a little cooling off period might help forestall the storm-fronts of fear (or, in the olden days, irrational exuberance) that pass through the markets. Then I stopped and thought about it, and realised that the bastards have had all weekend to take the dog for a walk and drink calming cups of tea, and what to they do? Come into work on Monday morning and TOTALLY FREAK OUT.

Unless you've been doing something interesting today, rather than sitting at work and watching the FTSE attempt to tunnel straight to hell like the rest of us, you'll realise that stock markets have gone down. A lot. There are couple of things about this that make me properly nervous.

The first is that they've had all weekend to be happy that the Paulson plan to save the world has passed Congress, and furthermore all of Congress has buggered off to campaign for their cushy jobs and can't do any more mischief. Instead, our old mate the market is now worrying that the bailout isn't big enough (to put the bailout in scale, if they divided it up between the entire population of Great London it would give everyone $93,000 - so it ain't small), and that the US treasury can't administer it. Seeing as the US Government under the Disgrace can't administer their way out of a paper bag, they may have a point there. Still, there must be some competent people left. Please?

There's also been more bad news. Fortis, a huge Dutch / Belgian bank that no one had heard of has been part nationalised and broken up. Another huge German financial institution that no one has heard of is also boned. Iceland appears to be headed back to the dark ages, which is bad news for Iceland because that's not a country where I'd choose to sit out a dark age (I'd pick Italy, I reckon) and also bad news for the rest of us, because last time they ran out of land and stuff they kicked off in a major way. Wouldn't want to be on Lindisfarne right now, that's all I'm saying. Meanwhile the German government is guaranteeing all deposits, except it isn't, but its now too late and everyone else is guaranteeing things in a mad beggar-thy-neighbour race to the bottom.

But even after that catalogue of doom, there is another reason I'm a bit nervous. Its this: lots of bad things are happening, but I'm not sure that they explain the fact that the FTSE has had its biggest ever one day fall, and the Dow is also gyrating like a drunk stripper, but with less class. In fact I don't think anything really explains the hysterical falls in the markets, and that's what worries me. Panic is setting in. Not fear, or horror, or dread at loosing your shirt on a swop deal with Cuban penny shares, but actual, stone cold, panic.

Now panic is irrational, which means that no rational act by Government or God almighty or Warren Buffet can defuse it. It replaces reason, annihilates thought. Its is extreme and overpowering. The Greeks thought it was caused by the God Pan himself, and they also thought that those whom the Gods wish to destroy they first make mad.

(Incidentally, the thought of that Greek sense of panic - a sudden irrational, overpowering fear overcoming someone in a lonely spot, is a deeply chilling thought.)

Anyway, my point is this - if the markets are panicking, then this is the moment it moves utterly out of control. If it continues to drop, we'll get closer to the capitulation moment, which is sort of the event horizon for financial Armageddon. Its the moment when traders think, 'ah fuck it' and sell everything no matter what the price. Chaos ensues.

Veep veep! says Noddy

2008-10-02T19:20:00.001+01:00

Mr R. Timothy Jonez, of Little Daneland in the Marsh, Oxfordshire, asks:

"Are you going to cover the veep debate? Will it be triumph for the common women who can see Russia from her house, or will Joe Biden rip of Neil Kinnock again?"

The short answer, is not really, because I'm going to the pub, but in the few moments I have before I go and talk to people face to face (shudder) here's my tuppence worth.

- Biden is on a very sticky wicket indeed. If Palin even manages to speak in vaguely coherent sentences, it will be judged a great triumph by a fawning media and she'll be hailed as the next Lincoln. Pray I'm wrong

- Secondly, her whole appeal is based on the media being full of elites who hate her not blinking and her guns / forcing teenagers into loveless marriages / death from above shtick. So, if she does badly - that's the media's fault. Real folks know that its east coast elites up to their usual tricks. (Incidentally, I wish America really did have a liberal media. The world might be less fucked. I also hate the way conservatives have the whole thing in their pocket and then still complain. Bastards)

- Hardly anyone will base their vote on VP anyway. When was the last time you voted in the UK based on the likely choice for Home Secretary? And the Home Secretary has , y'know, powers and things. He or she isn't a heartbeat away from being the most powerful creature on the Earth though, in fairness.

- If they do vote on veep choice, they'll only go to Palin. There's not a soul alive who would vote for Biden but not Barack.

- Biden really, really knows his shit. But he's an old gasbag, so if he gasbags, Palin can play the 'ickle wickle girlie card and win.

- An incompetent, mad, inarticulate women on the GOP ticket is not doing the the great Cause of Women in Rock, sorry, Government a great deal of good. We're not in a place where we can see this just as being about two people, so all its seen through the lens of her gender, which is very annoying, both because we're talking about her gender, not her insane policies, and secondly, that this is still an issue. Fuck's sake, world, sort it out.

- This might be rope a dope. She might have only been pretending to be some one who didn't speak English and might become H L Mencken on stage, and skin ol' Gasbag Joe alive. Unlikely, but hey.

- She has a special move of turning everything into folksy stories. This plays well in small towns, but Vladimir "Stone Cold" Putin doesn't care about folksy stories. She shoots moose? Putin shoots bears. Incidentally, if she can see Russia, Russia can see into her. I have a vision of Putin's great lidless eye, wreathed in flame, atop the Kremlin, his gaze fixed upon Wasilla, Alaska. "I see you. I see you."

- PLEASE PLEASE WIN, JOE. Don't be an arse.

By the time anyone reads this its likely to be over. She can't win? Can she?

Winter is coming

2008-10-01T21:47:00.000+01:00

Its cold in Edinburgh today, that kind of clear autumn cold that rings through the air like a bell. At this time of year, I'm reminded of something Dad always says as autumn closes in; 'the first breath of winter's chill is on the night'. I'd hoped to track down the origin of this rather wonderful line, but google has let me down and I remain in the dark. I'll have to ask the old boy himself.

I did however find this brilliant, but rather miserable poem by recent GPSOE favourite, A. E. Housman (hey, we were in Shropshire for the industrial revolution thing, which led to a discussion about how little those of us who were present know of 'a Shropshire lad').

Twice week the winter through

Here I stood to keep the goal;

Football then was fighting sorrow

For the young man's soul

Now in Maytime to the wicket

Out I march with bat and pad;

See the son of grief at cricket

Trying to be glad

Try I will: no harm in trying:

Wonder 'tis how little mirth

Keeps the bones of man from lying

On the bed of earth

Just because its melancholy, doesn't mean it isn't true. The Buddha recognised three things that characterise this world (the dharma seals). They are: impermanence, no-self, and sorrow.

So it goes.

Why Now; and MechaHillary

2008-09-30T21:07:00.000+01:00

In the midst of last night's screed about the credit crunch, whores, coke, Yale, Minehead and semi demonic beings neither living nor dead, I fell to a-thinkin, which is never a good idea. And my though was this: why now? Why didn't the whole ridiculous, marvellous dance continue on and on? Was it some kind of financial gravity that pulled us all to earth? Did some derivative apple fall on Ben Bernanke's head? Or to put it another way - if the whole thing was a confidence trick based on magic beans, why did it grind to a halt when it did? I mean, we can nail the start of this thing to a particular day - the ninth of August 2007.

The truth of the matter is that I don't know, but I'm on the internet and so therefore will posit a theory which may or may not contain a grain of the eternal. Anyway, this is how science works as Stuart and Karl Popper both assure me.

My theory is that it was driven by two main factors. They are that a load of the cheapo deals that friend Cletus had taken out to buy his shack come to an end, and the second is the rise of commodity prices.

Mortgages deals first. One of the more underhand tricks used by mortgages brokers in the US to get Cletus and his ilk (y'know, decent working people, young families, older folks who'd dreamed of owning their home, mugs like that) to buy, was to offer low low low introductory rates. Not low like you get in the UK, where the intro is 4% and the real rate 6%, but deals where when the intro wears off the repayments go up by between 60 and 150%.

Woah.

Now I don't know about you, but if my mortgages payment went up by 150% I'd be eating out of a tin can. These evil mortgages are called ARM, and we all of us are in ARMs way. Sorry. Anyway, the full sorry saga is in the previous link, which goes to that notorious hand wringing liberal journal, business week. The other thing I'd point out is the date of the article - September 2006. Bear mind as well, that even for people who had normal mortgages interest rates went up from 1% (which is better than free money because its below the rate of inflation!) to 5.35% between 04 and 06.

As business week reports, people whose mortgages are going up start to default, poisioning the well that feeds the magic beans. Winter is coming.

Thing two is that around about this point, the price of stuff (or commodities, as they call it in financial circles) which had been going up for a bit, started to bite. Inflation started to creep up. Oil went up. People whose budgets were based on a historical view of oil at $20 a barrel were looking down the barrel (sorry again) of $70 or $80. There's less money to go round baby, let's stick the keys through the bank's letterbox and light out for the border. Or go and stay at Mom's.

Part of this price rise was driven by ferocious demand from the Chinese. Here is a picture of Chinese ships queuing up outside the coal port of Newcastle in Australia. That's a lot of demand. And part is the old ghost at the table, peak oil.

Anyway, that's my theory - mortgages got harder to repay and people bailed on 'em. This is down to increases in prices and stupid, stupid deals. Fuck me, I'm brilliant.

But why the tenth? That's the day it went public, when BNP Parabis, a big old French bank said they couldn't value their CDO's 'n' shit, because no one was buying or selling them anymore. The magic had worn off the beans. Before then, it had been boiling away for a bit. A subprime lender had filed for bankruptcy. The Fed said they thought the whole thing might cost the then large sum of $100bn. Borrowing was hard to come by. The music hadn't stopped, but it was going seriously out of tune, and yet while it was still playing people were still dancing.

MechaHillary

This excellent piece in Salon reflects on the feelings of a serious feminist about the Sarah Palin broohaha. Now, I am not serious, but I am a little bit of a feminist, insofar as I think people should be judged on their merits, so I've got a refinement to the plan to offer. Rather than Hillary Clinton stopping Palin, we need MechaHillary. You know it makes sense.

Aaaaaalborg

The Danish Pepys might be distressed to learn that while the Wolves still ride high, Danish side Aalborg have been beaten tonight by Manchester United in a shock result. Berbatov scored twice, his first goals for the club, which gives me a excuse to copy this picture of him. What a snakey cool mutherfucker.

Finally, thanks for reading and for your comments. Figure I've got Sil to thank for the traffic. Hope you enjoy it more than work.

2008-09-29T23:49:00.000+01:00

Godzilla and Beaker investigate the credit crunch*

There are two ways to look at the current meltdown in global markets. Both are very tempting, and both contain a kernel of truth.

Way one is the great temptation to dance through the smoking ruins of Wall Street rather like Godzilla or the monster from Cloverfield. With great glee stamp flat the massed hoards of overpaid, emotionally absent, ideologically perverted, morally bereft scum! People who have flown the entire economy into the mountain through their naked, obscene greed and then come winging to the government to help them out. STOMP! Didn't show any solidarity with the miners, when their industry was broken, did you, you fucks? SPLAT! How did you expect it to go on and on and on and on? Don't you realise that this is made up magic beans money? It stopped being a useful way for actually useful to manage risk about thirty years ago. CRUSH! And then look back at the twisted metal and laugh. Bwahahahahaha! No one gives a fuck about your Brietling now, fuckwit.

Way number two is to transform, magically, horribly, from Godzilla into Beaker from the Muppets, and run around because we're all doomed.

All of which is an attempt to say there are two questions here. One are we doomed? And two, do we / Bankers / the Government / purveyors of magic beans deserve it if we are?

First up, in the long term, we are all doomed. I don't mean in an every-man-must-die way here either, but in a very specific Peak Oil way. Whether we hit the peak this year, next year or in five years is almost immaterial because its coming and likely to be soon - too soon for us to invent the first ever energy technology with no downsides to save us. But this is a tale for another day. The question, is the Credit Crunch (aka Cletus' revenge) going to break the economies of the west like a dry twig and leave us queuing for soup and using our iPhones to plug that gap between the cardboard walls of our hovel that the wind whistles through so cruelly? Well, as I see it, mibbees.

The problem is that every vaguely sophisticated economy since the dawn of time needs some kind of a banking function to oil the wheels. Banks are a super cool way of making sure that money flows around and gets to those that need it to make more while making sure that the owners of the original sum make a big fat rake too. It allows people to borrow money and invest in stuff, houses for example, which makes them feel like they are active members of the society. It means that business with short term cash problems don't go bust. In other words, banks at their best, take money that would otherwise be sitting as gold bars under the ground, and make it work for all of our benefit. Some benefit more than others, but no one said life was fair.

If this basic function goes away, even for a few weeks, we are hosed and no mistake. The danger is the credit crunch might make it do just that. Banks at he moment are so short of liquid cash (not other assets, like mortgages or gold or paintings of the Queen) to use to slosh around that they won't even lend to each other. This is really AWOOGA AWOOGA AWOOGA dive dive schnell achtung Englander! bad. To put that in context, by AAADDSAE bad I mean otherwise healthy businesses going bust because of cash flow problems. I mean people, lots of people, losing their savings. I mean no credit to buy anything for an extended period, which means nothing gets bought, so more business go down. All of which equals Jarrow marches, more Steinbeck novels and a really bad time for everybody. And that's before we get to the political consequences.

This basic banking function actually going away though is by no means certain, Paulson plan or no Paulson plan. There are solid banks out there and the Government ain't done yet. Central banks are working like crazy to un-gum the wheels and get this money sloshing around productively again. They might do it.

So, in short, as we stand here is a real possibility of catastrophe - the strongest in my time of Paying Attention - but it is by no means assured. I'm not a betting man, so no odds folks.

Whatever happens though, we are in All Sots Of Trouble right now. Who's fault is it? There are number of candidates; we-the-punters, Wall Street, maths PhDs who should go and work in physics, greedy bottom feeding lowlifes at all turns, the Chinese. So, laydeez and gentlemen, this is our cast of vile miscreants. This is an adult show, so I would advise pregnant ladies or people with heart trouble to read no further.

Perp one: you and me, gentle reader.

The average wallet or purse in the UK has eight credit cards in it. Lots of them are maxed. We have borrowed and borrowed and now we are fuckoed. House borrowing, car borrowing, borrowing at 35% APR to go on fucking holiday to Ibiza for two weeks and shag a telesales worker from Minehead. We were insane in the membrane. This great orgy of borrowing has two horrible consequences. Well three if you count the STDs from Minehead and all the orgies. They are: 1, now we have to pay it back, we're all skint, lots of us are going to default and then we'll never borrow again and he money is gone all gone, do you hear me, and 2, once we ran up the debt it went of to Wall Street and the City to be made into magic bean CDO money. Which brings us to perp two...

The Global Finance System, aka watch and learn Beelzebub.

I'd like to say that once upon the time merchant banks weren't full of absolute cunts who were motivated only by greed and intent on making a huge pile of loot for themselves, and the rest of the world could fall into Satan's fiery maw as far as they could care, but this would be a lie. Finance has never been the natural home of philosopher kings. It is instead the home of the rapacious vultures, dead eyed killers and Brooks Bros clad Nazgul - financiers, neither living nor dead. Two things have happened recently which have made the whole things worse. One, the old rather pissed boys who wore pinstripes and did business over five hour lunches with old, equally pissed, chums from Eton or Yale have slowly left. These guys were no good (see The Great Depression for example) but they were pissed which meant they weren't that quick. Now they have been replaced with guys who are sober (at least during the day - at night they like to take coke and abuse strippers or the homeless), sharp as blades and twice as morality free. The second bad thing is that we have given them really powerful computers and bunch of maths PHDs who should be doing physics to run them.

This has lead to an explosion in financial instruments (translation: nearly but not quite scams). Because everyone who invented, bought and sold these things was trying to scam everyone else involved, it sort of worked and huge, huge piles of loot were made for the Nazgul, the maths PHDs and the pissed old boys who still held stock. Some of this cash even made it to coke dealers and strippers, but not, alas, the homeless. This is called trickle down economics, incidentally.

A lot of the financial instruments were made by getting a bank's PhD to make a magic cauldron on his computer and put in a bit of debt that they might get back, some of the credit card debt that that introduced you to the telesales rep from Minehead, mortgages debt from Alabama etc and so forth, mix it into a shiny new thing called a CDO and flog it to the bank down the road, who put it in their magic cauldron and so we go again.

I could weep.

So now the magic beans have turned back into just-beans, all this has fallen down in a heap and we're all up shit creek. So, are bankers to blame? Yes. But its not just them. For example, why were able to borrow all this money? I mean, we - the public - clearly can't be trusted. Someone must stop us borrowing money we can't afford to pay back. Why didn't that work? Two reasons - one bankers leant it to us because they either actually thought they'd get it back (ha!) or more likely, they could flog the debt for magic beans and get it off their balance sheets. Reason two is that the people who control interest rates - and remember the higher the rate the less borrowing happens - fucked up. Their names are the Federal Reserve and Bank of England.

Fed and Threadneedle.

In fairness to these two august institutions, it wasn't all their fault that they fucked up. Their job, under the current economic model, is to control inflation. (The current economic model is Milton Friedman' s fault, btw). And inflation was low and stayed low. This is the fault of the Chinese (and I for one hail our new masters, the Chinese) because they made loads of crap we wanted to buy and made it really cheap. Made it so cheap in fact that even as we bought more and more, which you'd expect to drive up the price, the price stayed low low low. So did interest rates. So we borrowed, companies borrowed, private equity borrowed, Cletus the slack jawed yokel borrowed. Banks than made all this debt into magic CDOs and sold them to one another and all went round and round until you, me, Cletus and private equity started to default, he music stopped and we stand here, two minutes to midnight.

Lordy, Lordy, Lordy.

More tomorrow if I can be arsed and lights haven't gone out. Tomorrow's installment to include: why did we all default? And why can't I spell or punctuate?

* I came up with this title last, which is shame because it would have made a better blog all round. Sigh.

Good morrow to thee

2008-09-29T23:38:00.001+01:00

After much prompting, here is my blog. It is named after that fine and not-secret-anymore society, the Gentleman's Philosophical Society of Elvet, because no one else will read it. It is a partial record because this is only my burblings, so the following should not be taken as representing the views of the GPSOE, its members, affiliates or employees.

I might even update this one. Let's see, eh?