Arsenal

I really wonder why Adebayor hasnt left Arsenal already!

Day that mob justice worked

The link is here

sorry for the lack of posting!

Windows 7

A quote from the BBC:

We were able to shave 400 milliseconds off the shutdown time by slightly trimming the WAV file shutdown music
John Curran, Microsoft UK's director

Wow that sort of time saving will certainly make me shell out for one! Time is money!!

A short defence of bankers

This is a short post, the inspiration of which came from watching the news!

What made me wonder was why is there quite widespread castigation of bankers but not lawyers? Of course there is a case to answer as to the causes of the recession, what I am pondering is the salary aspect.

• The median salary for bankers and lawyers must be fairly similar at most levels, I would have thought that most senior lawyers and QC's earn very similar levels of income to a investment bank MD or Partner at a hedge fund
• At least banking has made big efforts to incorporate gender equality into the system, are we still waiting on a female member of the House of Lords? (I don't think pay equality is anywhere near close though)
• Also race hasn't really proved to be a deterrent to a career in banking Stan O'neil from ML and Anshu Jain from DB is evidence of this.
• Also its much less of a old boys club, whilst there are many Oxbridge grads in banking the senior levels are peppered to a higher degree with other university graduates, unlike the QC class.

I know al ot of my evidence is incomplete but I don't suspect I am far off the mark.

I guess the key is the lawyers ability to keep their mouths shut and heads down!!!

Chris

Google Street View

I really don’t understand the opposition to Google Street View. They say it’s a gross invasion of privacy, but Google is just taking the photo’s from the street, you see nothing that you wouldn’t see if you had been bothered to get up and go see!

As far as I see it if you were to ban Street View you should ban people been out on the street, there should be a curfew because the public should not be able to view things from public spaces. Now that is a restriction on civil liberty, not been able to take a photograph is another example (how do you get proof of a police officer doing something wrong). The protestors are barking up the wrong tree.

What’s the difference with Street View and someone who has a photographic memory?

Protests

I have very strong views on the protest today, which I will blog on in the future however after keeping an eye on the BBC coverage I saw a brief interview with one of the senior members of WarOnWant. I went to their website, and suprisingly disagreed with most that was written. I decided to send them an email which I reproduce below, any reply from WarOnWant I will of course publish to give them right of reply.

Dear Sir or Madam,

I saw one of your colleagues on the
BBC coverage of today’s riots.

I would like to question you on the accuracy of your campaign on the Financial Crisis. However I would like to point out that I do not think the actions of the banks are 100% right, however I do think that they are more right than some of the misguided and ill thought out anti-capitalist campaigns.

First of all from the synopsis on your website I think that you clearly misunderstand the important role banks play in an economy. I wonder what you expect would have
happened if the UK banking system had collapsed late last year. It very nearly did and survived only with the aid of the UK Government. Please also don’t forget that this crisis is global and that several major US banks also came very close to collapse.

I do wonder when people make claims about “bailing out the bankers” that they understand that the risks to the population at large were massive, and that is the sole reason why the governments stepped into prop up the banks. It is not just Fred Godwin who was bailed out, but your grandparents (who may have had savings at RBS), it was your local corner shop (who may have had a business account at RBS). You could forget your pension, you could bet your last pound (although that won’t be worth anything anyway because people would resort to bartering) that equity markets would have collapsed at least 75%, any bonds that you owned would be worthless, tens of millions of people in the UK would have seen their future retirement wiped out. The values of these assets would have collapsed because there would be no economy, no economic activity would take place. You wouldn’t be able to pay for goods at Tesco, Tesco wouldn’t be able to buy goods from there supplier, there supplier would not be able to buy anything from the farmer. You don’t need to be on dragons den to work out that the value of a company with no revenue and no profit is zero.

You say that “the poorest … struggle to make ends meet” but do you seriously expect them to be in a better position if there was no banking system?

You do not make this argument explicitly but it is implicit underneath your light touch regulation statement that bankers have been greedy in making profits. Now the generic argument here is that bankers made loans to people who couldn’t afford it. I do not defend this. What I do defend however is the notion that only one side of the deal is to blame. Do people not understand that when they enter into a contractual agreement , it is assumed that they know the risks involved in keeping up their end of the bargain. There was always a possibility that they could lose their job. If the person realized that they would have to pay £500 per month on a loan when they only have disposable income of £700 per month was unaffordable and they still
took out the loan then more fool them. In this last case, the banker does have a responsibility but so too does the applicant, and that is undeniable. Savers too make the mistake of frowning upon people borrowing money (read the comments section of any newspaper story commenting on a rise in BoE base rates) blissfully unaware that it is these borrowers who are paying the savers interest. The bank acts purely as a middle man putting buyer and seller together. This is how commercial banking works and this is how investment banking works. This IS a system that in general works, it just needs ‘tinkering’ around the edges. I agree stronger regulation is needed, so too is stronger risk management. At the same people need to be more aware of finance, how financial products work and how they are ALL interconnected. This is not a failure by one man as so many people try and claim but a system wide failure.

I would like to know how much impact you think the World Bank, IMF and WTO have on global trade. Most countries can and do flaunt these rules at will (developing and developed). The IMF is far too small to help most of the developed economies. There has been a strong debate that the IMF and World Bank which were born in a different economic era are no longer fit for purpose. You are correct that the IMF and World Bank are dominated by the words most powerful nations, they have provided most of the funding for these organizations. Who in your ideal scenario would you have as “in control” of these organizations? Do you realize that the IMF’s founding purpose was to stop currency crisis? It wasn’t to act as a development agency, it was set up to act as a surveillance unit to monitor its members countries fiscal and monetary policies.

I would be keen to find out more about how you envisage that the system “based on principles of public benefit … through democratic control” would work. It seems to me to bear very strong similarities to communism, which unless you missed history lessons as well as economic lessons at school you will know that as a system it failed.

As George Orwell wrote: “Four legs good, two legs bad”

I look forward to a constructive dialogue

Robert Pestilance

My favourite topic: The brainless scaremongering of the dumbed down Beeb reporter Mr Robert Peston.

To be fair, as I have said before I think that there are a lot of people who are been affected by this crunch (and incidentally were affected by the bubble but everyone likes to take a free ride there) who don't understand finance, which is fine and I think as a finance professional we as an industry have a responsibility to educate people. i think Mr Peston does a good job of making things simple to understand but in doing so he misses the point.

As is often the case the beauty of finance is in the detail and I think that Mr Peston glosses over it too much. Take for example his blog entry talking about China's stimulus package:

Wen Jiabao announced that China's budget deficit this year will be 950bn yuan.
That sounds like a big number - and it is an all-time record for China.

But, in relative terms, it's a flea bite compared with public-sector borrowing in the
UK.

Converted to sterling, that 950bn yuan is equivalent to roughly £100bn.

If you just read the first paragraph you could be forgiven for mistaking the world was about to end. But wait a minute, that's in Yen, how many yen could I get for a pound, oh I think I could get roughly 9.5 Yen for each of my sterling.

To be fair I'm been picky, if he didn't include the words "That sounds like a big number" I would be OK. But he did and it just illustrates a growing contempt on his part for the rational argument.