Cardboard Spaceship

Great Tagline

Had Philip Hogden drop a longish comment on my view about the fact that the potential collapse of the Californian economy is not a brand issue.  Obviously, if someone takes the time and courtesy to do that, you want to know more about them.  I went to his site, and the reason I am posting this is because of the tagline on the site, which is to do with international tax advice.

"International tax is complicated. We’re not."

Heh.  That gets my vote as the only financial services slogan I have seen that struck a chord for a long time. 

World's Eight Largest Brand Collapses According to Clueless Shill

Sometimes in the midst of the current drama we see evidence of people (the majority of the population usually,) who have failed to grasp the extent of the problem. 

"the long-term brand and the image are hurt for good."

What is this useless bastard (crisis communications consultant Chris Lehane) talking about?  Crunchy frogs found in a Burger King box?  Accidental inclusion of glass shards in toilet tissue supply? 

Actually, he is talking about the collapse of California, the world's eight largest economy. 

Gives me itchy fists just reading bullshit like that. 

UK and the Bond Vigilantes

Bloody Hell, Harry! as Ron Weasley would say to Harry Potter.

UK GDP has contracted 2.4%, the fastest rate for more than half a century, for an aggregate fall of activity of 4.9% compared with Q1 2008, itself the largest on record.

Still, Gordy and Mandy to the rescue, as they will not cut public spending in a recession, even one of their own making.  The OECD and others think that maybe they should think about it a bit harder. 

In the least surprising development since the Garden of Eden, foreigners are shunning the UK's debt.  Which is a bit of a self-fulfilling cycle.   Because as the interest rates that are paid on bonds are raised, to make them more attractive to investors, then the price of the existing bonds goes down.  (If that sounds daft, it's because you don't understand net present value.) 

 So, if you think that the bonds are going to go down in value, you won't buy them.  So, the government gets a kind of debt strike by foreign investors.  It's dangerous waters, and the bond holders who drive this spiral are called the bond vigilantes. 

Going to be an interesting ride in the UK for the next couple of years. 

FDR Style Bank Holiday as Basel Says Bank Still Toxic?

I have this one under "tin foil hat," but I'm going to blog it because if he's right, this is news.  He in this case is Harry Schultz, of the eponymous Harry Schultz Letter.  (He really sweated on naming that one...) 

Banks going to be closed in a repeat of FDR's bank holiday. 

"In its current issue, HSL reports rumors that "Some U.S. embassies worldwide are being advised to purchase massive amounts of local currencies; enough to last them a year. Some embassies are being sent enormous amounts of U.S. cash to purchase currencies from those governments, quietly. But not pound sterling. Inside the State Dept., there is a sense of sadness and foreboding that 'something' is about to happen ... within 180 days, but could be 120-150 days."

Yes, yes, it's paranoid. But paranoids have enemies -- and the Crash of 2008 really did happen.

HSL's suspicion: "Another FDR-style 'bank holiday' of indefinite length, perhaps soon, to let the insiders sort out the bank mess, which (despite their rosy propaganda campaign) is getting more out of their control every day. Insiders want to impose new bank rules. Widespread nationalization could result, already underway. It could also lead to a formal U.S. dollar devaluation, as FDR did by revaluing gold (and then confiscating it)."

Might be just be more goldbug paranoia, but in a sign of the times, I actually thought about it for a few minutes. 

Why?  Well, this report is about as interesting as official dry document can be, coming as it does from the BIS; the central banker's central bank.  (And the cause of no small amount of tin foil nuttery and New World Order suspicions in its own right.)  If you just need the executive summary, this is a good overview from the Guardian. 

This is part of a long annual report that does a good job of analysing the crisis, even if it is a bit rich that the BIS was at least partly in the firing line for being responsible.  

"Over the past few years, this essential and complex system of finance has
been critically damaged. Evidence of serious trouble emerged when banks
became less willing to lend to each other, because they were no longer sure
how to value the assets held and the promises made – both their own and
those of potential borrowers. For a time, central bank lending was able to fill
the gap. But, as described in Chapter II, from August 2007 the stress in the
financial system increased in waves. By March 2008, Bear Stearns had to be
rescued; six months later, on 15 September, Lehman Brothers went bankrupt;
and by the end of September, the global financial system itself was on the
verge of collapse.

The financial system is based on trust, and in the wake of the Lehman
failure that trust was lost. Ordinary people had placed their confidence in those
who ran and monitored the financial system, only to discover that the system
could fail anyway. The crisis shattered lenders’ trust that a loan previously
thought to be of high quality was likely to be repaid, and it dissolved the
confidence of investors in the long-term safety of their investments. As the
difficult and time-consuming task of cleaning up institutions’ balance sheets
went on, property rights that are normally taken for granted were being
questioned; and so financial institutions – normally run, at least in part, by
traders and loan officers together with the risk managers who try to control
them – were placed in the hands of lawyers. Unfortunately, once lost, trust is
regained only slowly. And before trust can be fully regained, the financial
system will have to be rebuilt.

The modern financial system is immensely complex – possibly too complex
for any one person to really understand it. Interconnections create systemic
risks that are extraordinarily difficult to figure out. The fact that things
apparently worked so well (up until the time that they did not) gave everyone
a false sense of comfort. After all, when things are going well, why rock the
boat? But this understandable complacency, born out of booms that make
everyone better off, sows the seeds of collapse. Hence, as we attempt to
explain and fix what has failed, it is essential to keep in mind that the new
financial system must take better account of our inherently limited ability to
understand complex processes and to foresee their potential for failure."

"And before trust can be fully regained, the financial system will have to be rebuilt."

It's scrunchy scrunchy time for tin foil hat fans everywhere. 

Finally, a Coherent Explanation for Crop Circles

Crop Circles can be beautiful, and whilst I would love to think that aliens would like to spend the insane amount of energy to cross between the stars to do the equivalent of interstaller finger painting, the truth is as every so much more prosaic.

Stoned up Wallabies appear to be the true cause, so Reg Presley can now go back to singing Wild Thing in the local pub.

Slovenia - Great Town if You Can Spell It

Had a trip to Slovenia this week, to the capital, the slightly hard to spell Ljubljana.  Very nice town in a small adrift section of the former Yugoslavia.  Good place to spent a weekend, as the town is small, and well served with restaurants, and the local scenery is nice.  (No more than a weekend, it is small.) 

Here is the main drag down the river, lined on both sides with bustling restaurants, that seemed to have good food. 

I walked down here looking around for an eating place for later, as I went towards the high point of the town, the castle.  The climb was a challenge, because it was 32 or so degrees, and very high humidity, as there was a thunderstorm coming.  The chaps in the window here are in a high state of undress, due to that heat. 

Got to the Castle, which rather than being the closed mausoleum to past conflicts that I expected, has been renovated, and turned into quite a lively arts venue.  Here is the outside.

I had a wander along the walls fo the castle looking out over the town and surrounding scenery, which was quite dramatic given the gathering storm.

Here are a bunch of Slovenians enjoying what could have been a political rally, a poetry event, or just about anything really, as it was all in Slovenian, naturally enough.

But I did find a source of entertainment and refreshment in the form of a local beer.  Certainly quenched the parts that the heat and climb had made dry. 

So after a happy half hour watching this enigmatic gathering, and watching small children terrifying the local pigeons, I wandered back to the centre, but this time I tackled it more directly via a rather dizzying staircase wedged between the town's rather charming houses. 

Could almost be Germany, but just to make sure you are not fooled, there is one communist era monstrosity to make sure that you keep on your toes.  This is the National Ljubljana Bank HQ, and as you can see it subscribes to the Brutalist school of architecture.  (Interesting enough it was also the place where I first saw someone riding a Segway, about four or five years ago.)

So, having made it back, I continued to wander up and down the river cafes, and I noticed that the Slovenians are not big graffitti and tag merchants,. but that they did have some well done examples.  In fact the whole town gives off a rather arts and crafts feel. 

Here is a sort of Banksy style effort.  The wording is translated by Google's Slovenian to English option as "Please Bombs Fall!", which strikes me that it maybe wide of the mark in this case...

Here is another example, rather more whimsical this time:

Finally, rather than Munch's "The Scream," we have Slovenia's "The Yawn".

Rather witty, compared this with the run of the mill tagging crap. 

Next day I gave a speech to a banking congress.  Went fine, except that the host, intending to be complimentary, compared my presentation style to that of John Cleese.   ("Sorry, please excuse him, he comes from Barcelona.")

Only one word of warning - the taxi drivers in Slovenia are without doubt the most dangerous I have ever encountered.  Doing 120 KMH through town in a 50 zone, missing and swerving past other cars by millimetres, undertaking, and some really breath-takingly bad and risky driving.  I mentioned this to the marketing person who had set up the event, and she said:  "ah yes, we're all a bit like that."

Random. 

Spaceship Looks East...

Well, blogging been a bit light this week, as I have been in Istanbul for the last four days of the week, and have spent this weekend making up a demo for an organisation in the Middle East, so keeping busy. 

Some views from Istanbul, which is the most populous city in Europe (yes, yes, half or more of it is over the Bosporus, and doesn't count, but so what.)  Istanbul is an interesting city, not least because of the contrast between its very rich history, and its no less interesting present. 

Here is the Spaceship in its day job guise.  With Colleagues. 

Had an interesting meeting, so it was no waste of time to go there.  Because of how the plane times fell, I have the opportunity to go and do a bit of sightseeing on the last night. 

First, and most obviously I went down to the old town.  (Take a taxi in Istanbul, it's the cheapest and best thrill ride you can get.  They have a really, really free take on how to join and leave a queue of traffic.  It's not aggressive, but it involves rather a lot of fine judgement.) 

Here is the Hagia Sophia, which I could not go into, because it was too late, but it is also beautiful from the outside. 

I did however brave the very talented flow of carpet salesmen outside the Blue Mosque to go in.  (I am not joking, the only thing that seemed to throw them in their pitch was when I said I came from Scotland, as "my friend, I am so sorry for the weather there," does not flog many floor coverings.) 

Here is a picture of a Blue Dome.  Fascinating building, and still an active mosque, so it is very tolerant of the (?) congregation (?) to allow so many visitors.

Then I went to the bazaar, which really does have an awful lot of stuff in it, none of which I bought.  (I did love the motorcycle section though, just because it seems such an improbable thing to haggle over.)

Then I emerged into the evening light next to the Bosporus, and the channel is as advertised, one of the world's busiest shipping lanes, linking the Mediterranean and the Black Sea.  Here is a small sample of local shipping.  (Ferries in this case.)

Finally I saw one of my favourites of the trip, which was the small parade of boats that serve fish kebabs to locals and tourist alike, at about 2 Euros, a very good deal.  Here is one:

The thing that amazed me is that they are cooking with hot plates on these boats, and because of the wash from the large boats that run up and down the channel the whole time, the deck can pitch up to about twenty degrees, while these chaps are cooking and serving hot fish.  This calls for a steady pair of legs and a flagrant disregard for the more conservative norms of work and safety in the traditional West.   Look at this as an example, and this is not as bad as it got.  Imagine running a chip shop in a North Sea gale.  Well done indeed.

Right, that's an update, it's been an interesting few days.  Next week holds Slovenia.  Imagine Berkshire County Council set adrift as an accident of war, and you pretty much have an idea of what it is like. 

Japanese Nationals Caught with Squinty Gajillion in Possibly Real Bonds

Wondering how the USA is going to solve its not inconsiderable debt prolems?  How do China and Japan solve the selling down the bonds without alerting the market and causing a currency collapse? 

Alert minds on the net, (via itulip) spotted this interesting piece of news about a small cross border movement the other day. 

Update:  link above removed as it no longer worked, so I was beginning to doubt the story, but it has now reappeared on more reliable sources such as Bloomberg.

"Italy’s financial police (Guardia italiana di Finanza) has seized US bonds worth US 134.5 billion from two Japanese nationals at Chiasso (40 km from Milan) on the border between Italy and Switzerland. They include 249 US Federal Reserve bonds worth US$ 500 million each, plus ten Kennedy bonds and other US government securities worth a billion dollar each.

Italian authorities have not yet determined whether they are real or fake, but if they are real the attempt to take them into Switzerland would be the largest financial smuggling operation in history; if they are fake, the matter would be even more mind-boggling because the quality of the counterfeit work is such that the fake bonds are undistinguishable from the real ones."

1. Japan is trying to get out of the dollar, really.

2. Some private individual has has a really good day at the casino, and is trying to hide their earnings.

3. Someone in the Yakuza thinks that no-one in a Swiss bank will blink an eyelid at a few tens of billions of bearer bonds, and will take them without question. 

If this story runs, we will find out something interesting one way or another.  (Not to mention why no mainstream press interest.)

Interesting Piece in the Times on Education

There is an interesting piece in the Times on the fact that no matter how much we might all wish it, unlike Lake Woebegone, not every child can be above average, and we might do well to work with this reality in mind. 

That is not why I am posting this, rather it is to quote the following from the comments section:

"Marriage partners seem to attract similar levels of interlect.  And assuming there are those above average, then there must those below."

Well, indeed. 

England Now Officially Totally Useless...

Last one out of England turn off the lights.  All the rich hedgies are going to come and live in a caravan in my garden, and the rest will have to pretend to be South African or Martians.

Why? 

England lost to the Dutch at Cricket.  Honestly.  The English can't even win at games they made up anymore.