Occasionally, I have got into trouble over debts,
specifically not paying them or not paying them in time. Usually
this was due to forgetfulness in which case I would pay promptly when
reminded, but sometimes it was because the money wasn't there, and
wasn't even coming in. I do not recall, however, a single instance
where I was advised that the cure for my unpaid financial obligations
was to borrow even more and to spend more and worry about settling my -
by then much increased debt - at some indeterminate date in the future.
The universal advice was to stop spending and start earning and repay my
creditors, a cure which never failed.
I am no financial guru, but that is essentially why I
feel very uncomfortable by the solutions proposed by Barack Obama,
Gordon Brown and others more learned than I. They say that the
problem of financial institutions collapsing under gigantic toxic loans
that will never be repaid and the associated world recession will be
spend more money by buying more goods
this can be achieved if already indebted governments borrow a lot
more money and pour it into their economies so that it filters
through to individual spenders.
This money will be repaid through future taxes once the
global economies recover. Like Colgate, this has a certain ring of
confidence to it, but when you ponder why the solution to debt is
additional debt it's looks more like a smear of toothpaste.
You could argue that there might be some merit in a
financial stimulus if funded by money you already have. But
certainly not if it requires trillions of dollars of debts so large that
they can never be repaid via existing workers but must be passed on to
their children and grandchildren. If it's wrong for children to
filch money from their mother's purse or their granddad's pocket, you
have to wonder why the reverse is apparently OK, for that is what will
have to happen. Furthermore, with Europe's demographic suicide now
well underway (birthrates of
babies per woman vs replacement rate of 2.1), there will not be any
- or at least insufficient - grandchildren to pick up the tab.
To the extent that there is virtue in a stimulus,
however, there is already a huge one underway, and it's not costing the
West a penny. Consider -
A year ago the price of a barrel of oil was in the
averaged $99.6 for the year, according to the US Energy Information
Administration. Today it's in the $40s and is forecast to average
A year ago
OECD consumption was averaging 47.8 million barrels per day; this
year it's predicted to be down about 4% to 45.8m b/d. When you do
the sums, this means that the OECD spent $1.74 trillion on its oil in
2008, but this figure will be only $0.70 trn this year. In other
words, oil price alone will provide a stimulus to OECD economies of over
a trillion dollars this year - roughly what the G20 has just agreed to
give the IMF.
But the OECD as a whole consumes in total some 240
quadrillion Btu of energy a year. Oil's 45.8m b/d (equivalent to 97
qdrn Btu per year) thus works out at a 40% market share.
Since all energy prices roughly track that of oil, this means the total
energy stimulus this year is in the order of $2˝
This could be compared to
$3.3 trn, except his is spread over several years and will have to
be repaid by future generations, whereas the $2˝
trn energy stimulus is happening in 2009 alone with no repayments at
And this energy stimulus will continue
for as long
as the oil price stays low,
and the oil
price will stay low for as long as demand is depressed,
will remain depressed for as long as the global economy is
which is exactly the period for which you want and need
People often say these days that money is the lifeblood
of the economy which is why banks must be saved at all costs.
Personally, I think oil is as much the lifeblood because it permeates
through to every corner of business and life and therefore so will the
The energy price reductions that were seeing
today will make everything else cheaper from food to logistics to
agriculture to industry to construction; the effect is already
noticeable, which brings me to the next point.
Throughout my long and disreputable lifetime, prices have inexorably
risen, sometimes fast, more often slowly. But this year looks like
being the first time that average prices
could actually fall, for very many decades.
On the one hand,
this can have the negative effect of slowing spending as people wait to
see can they buy the same thing more cheaply tomorrow. On the
other, however, lower prices make goods and services more accessible
than they were a year ago.
Though I can't begin to quantify it,
this too would amount to a big financial stimulus: the same money being able to
buy more than it could before.
The economic meltdown began when it became clear that householders in
America with so-called sub-prime mortgages were going to default in
large numbers. These were people who had been granted mortgages
even though it was clear that they did not, and were not likely to, have
the means to repay them unless house prices continued to boom above the
inflation rate ad infinitum. They were very foolish to take out
the loans; the lending institutions were equally foolish to provide
them, though continually pressed to do so by posturing politicians
anxious to show they
about the less well off.
But all price booms eventually burst. For house prices the
bursting began in America last year, first with those sub-prime
properties, then with all American properties, and then across the
globe. The bigger the house price boom, the bigger the bust.
For developers with acres of unsold properties this has been an
unmitigated disaster, and only slight less so for millions of
householders who have found themselves in negative equity. And
yet, this process too has its silver lining.
For the past decade, housing has become more and more out of reach for
more and more people, especially the young; politicians have been devising
ever more fancy wheezes to help
“first-time buyers” by knocking a few percent off through tax breaks and
other subsidies. But with prices now crashing by up to 50%
- both purchase prices and rents - such efforts are redundant.
Suddenly houses are worth closer to what it costs to build them.
For would-be house buyers and renters, this too amounts to a huge
financial stimulus that enables people to buy and rent accommodation at
realistic prices for the first time in a decade, despite the associated
misery of those who are foreclosed upon. Nobody said Capitalism
was merciful; just that it is the best and fairest system of wealth
creation compared to all the others.
Again, it is impossible to quantify the housing crash stimulus but it's
definitely there and definitely huge. And people will be better
able to take advantage of it thanks to ...
Near Zero Interest Rates
Historically low interest rates are hurting prudent savers who are have
been putting away deposits for years and conserving their accumulated
wealth in cash rather than equities, but since they have nowhere else to
go no-one else cares about them.
However near zero interest rates
also mean not only cheaper loans, but excellent margins for banks.
As well putting more cash in the pockets of existing borrowers, there is
thus now a double incentive to borrow and invest anew, whether in homes
or in industry, whilst the much-chastened banks are likely to
stress-test their lendings far more scrupulously than during the boom.
This adds up to yet another giant stimulus, again relatively cost-free
if you discount the under-rewarded savers.
People keep saying interest rates cannot go below zero, but I wonder.
Banks are, or should be, safe havens for our money. It seems
entirely plausible to me that they might one day decide to charge us for
the privilege, just as we might have to pay a company to store our
personal effects if, for example, we move abroad.
Charging customers to store their money is in effect to impose a
negative interest rate, which then raises the beguiling prospect of
paying people to take out a mortgage, while still leaving a spread for
the bank to make a profit!
So perhaps the interest-rate stimulus has still to get even bigger.
Curse on the Baby-Boomers
I cannot calculate how many trillions the non-energy
part of all these bonanzas will amount to, in addition to energy's $2˝
trillion this year. But it is remarkable that they are all,
Suffice it to ask: why are OECD governments so keen to
create further, artificial stimuli through debt, when they stay silent
about the far bigger stimuli already coursing through their economies?
For today’s baby-boomers will surely and righteously be
cursed by their progeny for the massive stimulated debt legacy that we
are unapologetically bestowing upon them with such cavalier
A recent visitor to Venice exhorted me to go and have a
look at that magical city before it sank beneath the sea. No doubt
a victim, I mused, of Nobel Laureate ex-VP Al Gore's global warming
while not yet a beneficiary of POTUS#44 Barack Obama's
promise to make the oceans recede. But no, I was corrected,
Venice's is a problem not of rising sea levels but of falling land, an
altogether different challenge unrelated to man-induced climate change.
Actually, more and more evidence, from all quarters, is
emerging all the time that climate change itself is unrelated to
“man-induced climate change”. And that man's attempts to
change “man-induced climate change” by doing clever green things
is as ineffectual as his CO2 emissions and other anti-green activities.
As for the fourth, I have reproduced an article
heavy blow to wind power strategy”
from the Offshore Engineer (where “offshore”
means in the actual ocean rather rather than distant tax havens).
It was written last month by
Michael Economides, a much respected engineering professor in
Houston, whom I have met a number of times during consultancy activities
in the Middle East. (It's also available
online but kind of awkward to get to.) He makes a handful of
points that are at the same time blindingly obvious yet - because they
destroy the case for wind power - have remained largely unknown to the
Wind power is
only to the extent that you ignore the price of installing and
maintaining it, and - above all - the cost of construction, operation
and fuel for back-up fossil-fuelled power for when the wind fails.
For it is an inconvenient truth that Mother Nature's wind is
intrinsically unreliable. Even in the UK which - like Ireland -
has plenty of wind and coastline, the average load factor is only 27%.
Therefore you have to fall back on conventional power generation
whenever the wind drops. So for every megawatt of windpower you
install another megawatt of oil- or gas-based power.
Or find a
big reservoir at the top of it,
pumps to pump water up the mountain when the wind blows,
water-powered turbines to generate electricity for when the wind
speed is insufficient.
Either way, regardless of whether you regard a landscape
of wind turbines to be a visual abomination or a thing of beauty, it is
a far more expensive option than convention power generation.
Moreover, since windfarm backup power plants are usually
built to the cheapest of standards, and such plants never like being
continually started up and shut down again, they are inefficient,
high-maintenance facilities that burn almost as much fuel as if you had
no windpower at all.
Due to this need for back-up power or power-storage,
windpower can never, ever be economic in its own right.
The result is that it is only viable when boosted by
hefty, permanent taxpayer subsidies. Last year, these amounted to
a billion dollars in the UK alone, which will rise to six billion pa by
2020 to support 25 gigawatts of windpower. That's how much the UK
needs to meet its CO2 reduction obligations under the diabolical Kyoto
protocol, having achieved a reduction from
1997 to 2005 of precisely zero percent.
As Prof Economides summarises,
“Independent reports have consistently revealed an
industry plagued by high construction and maintenance costs, highly
volatile reliability and a voracious appetite for taxpayer subsidies
... Wind power
[is] expensive, unreliable and it
won’t [even] save natural gas.”
The necessary subsidies are, of course, all part of the
$100 billion annual cost of meeting the CO2 demands of the Kyoto
protocol on its 162 ratifiers.
A colleague tells me he has installed a solar panel in
the roof of his house. With generous government green grants his
payout is apparently three years, after which the savings on his
electricity bills will go straight to his pocket. No wonder
everyone wants to emulate him.
But without the subsidies - another little chunk of
Kyoto's $100 bn - the payout would be 29 years, which would obviously
interest no-one. This means that those taxpayers who do not
avail of these subsidies are lining the pockets of those that do, all in
the name of fighting climate change.
If only all things that had a cost were paid for by
someone else. Let's start with my mortgage ...
At the G20 summit in London, why does the elected
president of the world's most successful democracy, one founded on
“we the people”, feel he has to bow, bend his knee,
kow-tow and grovel before the second-generation feudal monarch of one of
the world's worst tyrannies?
In Buckingham Palace he felt no such urge
to even nod his head when introduced to
the current incumbent of an ancient hereditary monarchy stretching
back more than a thousand years. A monarchical head of a
No wonder France's president is laughing
Red-blooded Americans find their president's fawning
Wounded members of the British armed forces were invited
to join the England soccer squad, during a break from training, for
lunch at a hotel near Arsenal's training ground close to Watford.
In the midst of the merriment, David Beckham was introduced to Commando
Ben McBean from the Royal Marines, who had had a leg blown off in
Afghanistan. As Mr Becks commiserated with him over his disabling loss,
they shook hands warmly. But he went pale as Officer McBean
screamed, “My arm! My arm!”, for it had come off in his hand.
It was of course a prosthetic arm and Officer McBean was performing his
latest party piece, with no sense of self-pity whatsoever.
England were preparing for a couple of World Cup
qualifier matches against Slovakia and Ukraine, which would be a very
arduous and stressful process. But England captain, John Terry,
had it exactly right when he observed that it was the Servicemen and the
Servicewomen in the battlefields of Afghanistan and Iraq who are the
As we cheer our favourite sports teams and sporting
personalities to victory or lament their defeats, we should remember
that these are just games. What is going on in Afghanistan, Iraq
and elsewhere is real life - and real death. And that is where the
real heroes, such as Officer McBean, are to be found and where many have
given their brave young lives.
pole vaulter Romain Mesnil, silver medallist at the 2007 World
Championships and also (according to himself) Vice Champion of Europe
and of the World, has lost his clothing sponsorship from Nike, if not
his clothing. So he has come
up with a novel way of publicising his plight in an effort to find a
He has posted on
this video of him running naked through the streets of Paris, carrying
a giant phallic symbol
his pole as if about to
vault, or something. Naturally this quickly found its way to YouTube and several
TV news bulletins.
There's no doubting the spread of his message, but you would
think that the best thing is for the IAAF to ask him to compete in the
nude. Judging from the expression on the faces of the people he runs
past in the street, it would be a massive crowd puller.
“I think I can say that in an important
conference we have found a very good, almost
historic compromise in a unique crisis. This time the
world does not react as in the 1930's.”
German chancellor Angela Merkel
gives an encouragingly upbeat assessment
of the outcome of the G20 meeting in London.
The French president, Nicolas Sarkozy,
said the result was “more than we could have hoped for”.
Quote [private source]:
“Don't worry mate, we've got them all on film and
we'll pick them all up later and give them a good kicking in the
back of the van.”
An unnamed policeman, when asked
why the cops were not arresting people
who had just trashed a London branch of the Royal Bank of Scotland
as part of G20 demonstrations.
[Hat tip: Philip in Dublin]
Four young people were indeed
later arrested for the offence
No news about the kicking.
- - - - - - O B A M A - - - - - -
“The Taliban fighters of the Mullah Dadullah Front
in Afghanistan have rejected the offer of talks from US President
Barack Obama to moderate Taliban and have said they are not ready to
hold negotiations with Obama.”
The Taliban respond to president Barack Obama's
“call for negotiations withmoderate Taliban”
“Today, thanks to great achievements, the threat to
Iran has been lifted, and no power in the world entertains the
notion of taking action against the Iranian nation.”
Iran's president Mahmoud Ahmadinejad
responds to Mr Obama's
Barack Obama must stop Iran from acquiring nuclear weapons —
and quickly — or an imperilled Israel may be forced to attack Iran’s
nuclear facilities itself.”
Benyamin Netanyahu, the new Israeli prime
and an ex-Commando,
lays it on the line for the new American president:
Iran - or I will.
Mr Netanyahu believes history has shown that
Jews cannot afford to take a benign view of existential threats.
“We were seeing the same mismatch between the regulatory
regimes that were in place and er ...
pause[I'VE LOST MY TRAIN OF THOUGHT AGAIN] ... the
highly integrated, er, global capital markets that have emerged
... pause[I'M REALLY WINGING IT NOW].... Dealing with
the, er, problem of derivatives markets, making sure we have set up
systems, er, that can reduce some of the risks there. So, I actually
think ... pause[FANTASTIC. I'VE LOST EVERYONE, INCLUDING MYSELF]
... there's enormous consensus that has emerged in terms of what
we need to do now and, er ...
pause[I'M OUTTA HERE. TIME FOR
THE USUAL CLOSING RUBBISH] ... I'm a great believer in
looking forwards than looking backwards.”
President Obama, at his joint G20 press
conference with Gordon Brown,
explains who is to blame for the financial crisis
Mark in New Hampshire]
Quote: “Did you know your first name means ‘Peach’ in
Hungarian? No? Well, now you do.”
A young lady from Heidelberg
sheds a fruity light on Barack Obama
meeting in Strasbourg
- - - - - - U K - - - - - -
“Yesterday we had a very British coup d'état when
the Governor of the Bank of England sent his tanks down the Mall,
effectively seized control of the British economy through his
command of monetary policy, and put the Government under house
Vince Cable, the Liberal Democrat's Treasury
terrifies the British Government
after Governor Mervyn King warned last month
that proposed Government debt was unsustainable.
“The senior officer in charge is
confident we handled this incident as professionally as possible. In
a situation like that you could end up with more deceased bodies
than you had in the first place.”
A South Yorkshire Police spokeswoman explains
why the police prevented neighbours
from rescuing three-year-old Louis Colly from his burning house
thereby ensuring that he was frazzled to death,
as were his father and mother
who had been screaming
“Please save my kids!”
Far from trying to rescue the child themselves,
South Yorkshire Police are not happy, it would seem,
unless the number of “deceased bodies” is high enough
to meet their exacting standards, in this case three.
Oh, and there were of course
no “deceased bodies in the first place”.
- - - - - - I R E L A N D - - - - - -
“Our constitution does not allow us to take on
any non-nationals at the moment.”
Derry Coughlan, Chairman of the Cork Taxi Drivers’
claims that his 350-strong Association is neither discriminatory nor racist.
Lama Niankowe a Cork taxi driver from Nigeria says
he was told the Association was for Irish drivers only.
Quote [Setanta TV, not online]:
“If Munster were in charge of the banks, we'd still all be
Daire O'Brien, TV sports commentator,
after Munster's rugby team had just scientifically and clinically
demolished their Irish arch-rivals Leinster, 22-5
“The Lemon Tree”, by Sandy
is a delightful novel-style history of modern Israel and Palestine told
through the eyes of a thoughtful protagonist from either side, with a
household lemon tree as their unifying theme.
But it's not
entirely honest in its subtle pro-Palestinian bias, and therefore needs
to be read in conjunction with an antidote, such as
This examines events which led to BP's 2010 Macondo blowout in
the Gulf of Mexico.
BP's ambitious CEO John Browne expanded it through adventurous
acquisitions, aggressive offshore exploration, and relentless
cost-reduction that trumped everything else, even safety and long-term
Thus mistakes accumulated, leading to terrifying and deadly accidents in
refineries, pipelines and offshore operations, and business disaster in
The Macondo blowout was but an inevitable outcome of a BP culture that
had become poisonous and incompetent.
However the book is gravely compromised by a
litany of over 40 technical and stupid
errors that display the author's ignorance and
It would be better
to wait for the second (properly edited) edition before buying.
As for BP, only a
wholesale rebuilding of a new, professional, ethical culture will
prevent further such tragedies and the eventual destruction of a once
mighty corporation with a long and generally honourable history.
nonagenarian Alistair Urquhart’sincredible story of survival in the Far
East during World War II.
After recounting a
childhood of convention and simple pleasures in working-class Aberdeen,
Mr Urquhart is conscripted within days of Chamberlain declaring war on
Germany in 1939.
From then until the
Japanese are deservedly nuked into surrendering six years later, Mr
Urquhart’s tale is one of first discomfort but then following the fall
of Singapore of ever-increasing, unmitigated horror.
After a wretched
journey Eastward, he finds himself part of Singapore’s big but useless
Taken prisoner when Singapore falls in
1941, he is, successively,
part of a death march to Thailand,
a slave labourer on the Siam/Burma
railway (one man died for every sleeper laid),
regularly beaten and tortured,
racked by starvation, gaping ulcers
and disease including cholera,
a slave labourer stevedoring at
shipped to Japan in a stinking,
closed, airless hold with 900 other sick and dying men,
torpedoed by the Americans and left
drifting alone for five days before being picked up,
a slave-labourer in Nagasaki until
blessed liberation thanks to the Americans’ “Fat Boy” atomic
distraught and traumatised on return to Aberdeen yet disdained by the
British Army, he slowly reconstructs a life. Only in his late 80s
is he able finally to recount his dreadful experiences in this
There are very few
first-person eye-witness accounts of the the horrors of Japanese
brutality during WW2. As such this book is an invaluable historical
“Culture of Corruption:
Obama and His Team of Tax Cheats, Crooks, and Cronies”
This is a rattling good tale of the web
of corruption within which the American president and his cronies
operate. It's written by blogger Michele Malkin who, because she's both
a woman and half-Asian, is curiously immune to the charges of racism and
sexism this book would provoke if written by a typical Republican WASP.
With 75 page of notes to back up - in
best blogger tradition - every shocking and in most cases money-grubbing
allegation, she excoriates one Obama crony after another, starting with
the incumbent himself and his equally tricky wife.
Joe Biden, Rahm Emmanuel, Valerie Jarett,
Tim Geithner, Lawrence Summers, Steven Rattner, both Clintons, Chris
Dodd: they all star as crooks in this venomous but credible book.
ACORN, Mr Obama's favourite community
organising outfit, is also exposed for the crooked vote-rigging machine
This much trumpeted sequel to
Freakonomics is a bit of disappointment.
It is really just
a collation of amusing
little tales about surprising human (and occasionally animal) behaviour
and situations. For example:
Drunk walking kills more people per
kilometer than drunk driving.
People aren't really altruistic -
they always expect a return of some sort for good deeds.
Child seats are a waste of money as
they are no safer for children than adult seatbelts.
Though doctors have known for
centuries they must wash their hands to avoid spreading infection,
they still often fail to do so.
Monkeys can be taught to use washers
as cash to buy tit-bits - and even sex.
The book has no real
message other than don't be surprised how humans sometimes behave and
try to look for simple rather than complex solutions.
And with a final
anecdote (monkeys, cash and sex), the book suddenly just stops dead in
its tracks. Weird.
A remarkable, coherent attempt by Financial Times economist Alan Beattie
to understand and explain world history through the prism of economics.
It's chapters are
organised around provocative questions such as
Why does asparagus come from Peru?
Why are pandas so useless?
Why are oil and diamonds more trouble
than they are worth?
Why doesn't Africa grow cocaine?
It's central thesis
is that economic development continues to be impeded in different
countries for different historical reasons, even when the original
rationale for those impediments no longer obtains. For instance:
Argentina protects its now largely
foreign landowners (eg George Soros)
Russia its military-owned
businesses, such as counterfeit DVDs
The US its cotton industry
comprising only 1% of GDP and 2% of its workforce
The author writes
in a very chatty, light-hearted matter which makes the book easy to
However it would
benefit from a few charts to illustrate some of the many quantitative
points put forward, as well as sub-chaptering every few pages to provide
natural break-points for the reader.
This is a thrilling book of derring-do behind enemy lines in the jungles
of north-east Burma in 1942-44 during the Japanese occupation.
The author was
a member of Britain's V Force, a forerunner of the SAS. Its remit was to
harass Japanese lines of
command, patrol their occupied territory, carryout sabotage and provide
intelligence, with the overall objective of keeping the enemy out of
is admirably yet brutally frank, in his
descriptions of deathly battles with the Japs, his execution of a
prisoner, dodging falling bags of rice dropped by the RAF, or collapsing
in floods of tears through accumulated stress, fear and loneliness.
He also provides some fascinating insights into the mentality of
Japanese soldiery and why it failed against the flexibility and devolved
authority of the British.
The book amounts to
a very human and exhilarating tale.
Oh, and Irwin
describes the death in 1943 of his colleague my uncle, Major PF