I'm still convinced that many in the financial community deserve far harsher treatment than they've so far received - if they didn't know what would happen, they should have.
But I've been casting about for some deeper structural reason - what allowed financiers to kid themselves that they were acting reasonably, or at least assure themselves that they had followed official guidelines and were "covered"?
So I looked for something relating to the regulation of fractional reserves, and came across references to the Basel Accords (I and II). These are an attempt to "harmonise" central banking policies in developed nations, and perhaps can serve as an object lesson (especially for EU enthusiasts) about international legislation.
Here is the conclusion of an analysis of the two Accords (highlights mine):
One very important fact to assess is the achievements and limitations of each Basel Accord. The first Basel Accord, Basel I, was a groundbreaking accord in its time, and did much to promote regulatory harmony and the growth of international banking across the borders of the G-10 and the world alike. On the other hand, its limited scope and rather general language gives banks excessive leeway in their interpretation of its rules, and, in the end, allows financial institutions to take improper risks and hold unduly low capital reserves.
Basel II, on the other hand, seeks to extend the breadth and precision of Basel I, bringing in factors such as market and operational risk, market-based discipline and surveillance, and regulatory mandates. On the other hand, in the words of Evan Hawke, the U.S. Comptroller of the Currency under George W. Bush, Basel II is “complex beyond reason” (Jones, 37), extending to nearly four hundred pages without indices, and, in total, encompassing nearly one thousand pages of regulation.
The author's concern is that the rules can permit the risk of assets in emerging markets to be understated, and as it turns out the Trojan horse came in through another gate; but in complexity lies opportunity, and in rule-following lies the illusion that personal responsibility is thereby written off.
Tuesday, December 02, 2008
Monday, December 01, 2008
The eyes, look at the eyes
I referred recently to some BNP supporters as "scrubbed-up thugs"; sadly, that also is the impression given by some New Labour apparatchiks.Is it true that, like Cordelia and the Fool, Ed Balls and Nick Griffin have never been seen together?
"When the going was good"
Marc Faber, on Bloomberg: "US stocks will rally further he maintains, at least for a short while. In January to March next year you must get out as the economy will implode."
And he's a gold bug again - and says hold it outside the US, as many have long recommended.
And he's a gold bug again - and says hold it outside the US, as many have long recommended.
Cruising for a losing
Mish's graph suggests houses could lose another 40% or so over the next 7 years.
Saturday, November 29, 2008
Tony Murdoch, Rupert Blair
Reading Michael Wolff's article in the Spectator today, I was struck by the uncanny resemblance of his subject to another. Here, with only a few substitutions, cuts and emendations, is my version.
Blair’s big secret is that he doesn’t have one
Wednesday, 26th November 2008
Sackerson reveals how he secured Tony Blair’s co-operation for his biography and discovered that this political titan has no interest in posterity. He is, at heart, a political operator
There is, on the one hand, the unparalleled national dominance in politics that Tony Blair and his New Labour have achieved. And yet, on the other, there’s an almost endearing attention-deficit lack of organisation and heedlessness that I witnessed in many years of chatting with Blair and his ministers.
The fact that I was talking so often and so openly with Blair was as good an example as any of the absence of planning and strategy that backs up one of the country’s greatest control freaks. Indeed, throughout the company, people kept saying to me (and among themselves): has he lost his mind, spilling the beans? Why is he doing this? What is he thinking?
The answer involves, I believe, New Labour’s essential political advantage and fundamental personality trait: Blair and Labour act without thinking very much. Or the only sustained thinking that goes on is about what he might be thinking. And that’s extremely hard because the man, contravening all rules of modern analytic politics, acts almost entirely on impulse — his method is all based on instinct, urge, gossip (i.e. a more or less random collection of things he’s been told), and the impelling force of immediate and casual circumstance. It’s serious ADD.
It was during his takeover in the 1990s of the Labour Party — a set of brilliantly executed strategic moves that occurred mostly without any kind of analysis about why he might be changing it and what he would be getting after he took charge — that Blair and I began our interviews. I had gone to the publisher of my last book and argued that there might be a chance Blair would agree to a long exclusive interview — the kind which, out of impatience or defensiveness, he had never granted. I sensed he might be open to the attention — that he was proud of winning the Labour Party.
Blair found himself talking to me with no plan or agreement or understanding or even time constraints. For the first several years of our interviews, he was clearly wondering how it was that I had got there. Only the fact that he is a very polite man, and conflict averse — at least in a one-to-one sense — kept him, I often felt, from tossing me out on my ear.
The vastness of an organisation like New Labour, dominating nearly every political platform in the country, makes it perceptually almost impossible not to believe that there is a vision here, a method and a far-reaching intelligence (pernicious or otherwise).
This was what I obviously tried to probe, sitting with Blair for nine months. What’s going on in there? What does he know?
To be with Blair, to view him, to get inside his head, and to understand how he does political, you have to take away all technology — that is, all the web-searches, all the data, all the correspondence, all the communications resources, that ministers everywhere rely on. Blair, at 55, can’t use a computer, doesn’t get email, can’t get his cell phone to work properly, can’t even imagine changing the variables on a spread sheet. (The fact that New Labour often bills itself as a technologically farsighted, aggressive and clever party is amusing to everyone there.) During the campaign to take over New Labour, Blair’s spies and surrogates would email Blair’s 54-year-old wife, Cherie, and she’d read to him from her mobile phone. Indeed, while many people at New Labour were trying to talk about the cross-platform synergies at New Labour and the future of electronic voting, Blair was only ever talking about the Party.
Psychologically, he is far from modern too. He can’t question his own motivations (a curious problem for a biographer). He truly doesn’t believe in interpretation. His face draws back, and he scowls in a remarkably dismissive way if you try to suggest that there might be a deeper pattern to his actions — that there might be meaning beyond living to fight another day. Accordingly, he has surrounded himself with a cadre of unanalysed people who believe it’s best to act before thinking too much. Curiously, his children are reasonably nuanced thinkers, which is perhaps one reason he thinks they are the most brilliant people in the country.
He has no historic interest — even in himself. This sets him at odds from most men of accomplishment, who generally cherish all their achievements. Blair hardly remembers his. The past has receded. He cuts himself off from it. In conversation, he often loses or transposes decades. This is only partly age. More to the point, he obviously has no use for memory. That’s a distraction. He is not demoralised by defeats. He’s not aggrandised by victories. When you interview him, you can’t, profitably, ask about what has occurred, you can only engage with him if you talk about what’s going on now. What’s on your mind this morning, Mr B? Who are you feeling competitive with today? What fly is buzzing near your face?
He is, and runs his career like, an ambitious man. He’s a dealmaker. No more, no less. No better, no worse. What he values is the ability and inclination to make split-second decisions. He’s rather proud when that ability is not slowed by too much information or explanation. He is most motivated by the last interesting thing someone told him — whether it is true is not as important as how it will read. Sitting with Blair for so many years, I’d regularly see the odd bits of information come in (my stock obviously went up when I offered him a tidbit), and be directed to a political researcher, or become part of his world-view or some instant political decision-making process. (At a cocktail party, he meets someone from Afghanistan, who suddenly informs his view of that conflict; at another party he meets someone who knows a policeman on Long Island, and that colours his view about a lecture tour in New York) He has no interest in understanding himself, because he sees himself as an everyman. He’s Mr Basic, Mr Uncomplicated; he has no airs, no fancy aspirations. He can trust his own gut. And why should he remember the past, he has to be in tomorrow’s papers? And once again beat the competition.
I have sometimes had the feeling, over the past years of talking to Blair and New Labour ministers, that his people are humouring him. That he is not so much, in Alistair Campbell’s formulation, the Sun God, who people cannot question, but instead a sort of long-running joke in which everybody at New Labour — so many of them career employees — is complicit. The joke is that this greatest of modern political men, the architect of the synergised, cross-platform, integrated, national political party, has no vision, no method, no strategy. Nor, likewise, does this man, perhaps the individual with the single most powerful political voice of our time, have any politics — save for what makes for good newspaper copy or puts money in his own pocket. Rather it’s all made up — what he buys, how he spends, what he believes, who he supports — on the fly.
In my interviews, Blair, even though a professional in the political world, was guileless — or ultimately unconcerned. It was a book, for one thing, and, as his advisers suggested to me, he might never have read one. What’s more, to think about how he might be portrayed would be to have an idea of his own self — to have to dwell on things he is incapable of or vastly uninterested in dwelling on. And yet he did it — blabbered away for years. With hardly a thought he exposed himself, his family and all his ministers to a biographer who one day happened to walk into his office. Even prospective immortality is something, at New Labour, which you just throw against the wall and see if it sticks.
Blair’s big secret is that he doesn’t have one
Wednesday, 26th November 2008
Sackerson reveals how he secured Tony Blair’s co-operation for his biography and discovered that this political titan has no interest in posterity. He is, at heart, a political operator
There is, on the one hand, the unparalleled national dominance in politics that Tony Blair and his New Labour have achieved. And yet, on the other, there’s an almost endearing attention-deficit lack of organisation and heedlessness that I witnessed in many years of chatting with Blair and his ministers.
The fact that I was talking so often and so openly with Blair was as good an example as any of the absence of planning and strategy that backs up one of the country’s greatest control freaks. Indeed, throughout the company, people kept saying to me (and among themselves): has he lost his mind, spilling the beans? Why is he doing this? What is he thinking?
The answer involves, I believe, New Labour’s essential political advantage and fundamental personality trait: Blair and Labour act without thinking very much. Or the only sustained thinking that goes on is about what he might be thinking. And that’s extremely hard because the man, contravening all rules of modern analytic politics, acts almost entirely on impulse — his method is all based on instinct, urge, gossip (i.e. a more or less random collection of things he’s been told), and the impelling force of immediate and casual circumstance. It’s serious ADD.
It was during his takeover in the 1990s of the Labour Party — a set of brilliantly executed strategic moves that occurred mostly without any kind of analysis about why he might be changing it and what he would be getting after he took charge — that Blair and I began our interviews. I had gone to the publisher of my last book and argued that there might be a chance Blair would agree to a long exclusive interview — the kind which, out of impatience or defensiveness, he had never granted. I sensed he might be open to the attention — that he was proud of winning the Labour Party.
Blair found himself talking to me with no plan or agreement or understanding or even time constraints. For the first several years of our interviews, he was clearly wondering how it was that I had got there. Only the fact that he is a very polite man, and conflict averse — at least in a one-to-one sense — kept him, I often felt, from tossing me out on my ear.
The vastness of an organisation like New Labour, dominating nearly every political platform in the country, makes it perceptually almost impossible not to believe that there is a vision here, a method and a far-reaching intelligence (pernicious or otherwise).
This was what I obviously tried to probe, sitting with Blair for nine months. What’s going on in there? What does he know?
To be with Blair, to view him, to get inside his head, and to understand how he does political, you have to take away all technology — that is, all the web-searches, all the data, all the correspondence, all the communications resources, that ministers everywhere rely on. Blair, at 55, can’t use a computer, doesn’t get email, can’t get his cell phone to work properly, can’t even imagine changing the variables on a spread sheet. (The fact that New Labour often bills itself as a technologically farsighted, aggressive and clever party is amusing to everyone there.) During the campaign to take over New Labour, Blair’s spies and surrogates would email Blair’s 54-year-old wife, Cherie, and she’d read to him from her mobile phone. Indeed, while many people at New Labour were trying to talk about the cross-platform synergies at New Labour and the future of electronic voting, Blair was only ever talking about the Party.
Psychologically, he is far from modern too. He can’t question his own motivations (a curious problem for a biographer). He truly doesn’t believe in interpretation. His face draws back, and he scowls in a remarkably dismissive way if you try to suggest that there might be a deeper pattern to his actions — that there might be meaning beyond living to fight another day. Accordingly, he has surrounded himself with a cadre of unanalysed people who believe it’s best to act before thinking too much. Curiously, his children are reasonably nuanced thinkers, which is perhaps one reason he thinks they are the most brilliant people in the country.
He has no historic interest — even in himself. This sets him at odds from most men of accomplishment, who generally cherish all their achievements. Blair hardly remembers his. The past has receded. He cuts himself off from it. In conversation, he often loses or transposes decades. This is only partly age. More to the point, he obviously has no use for memory. That’s a distraction. He is not demoralised by defeats. He’s not aggrandised by victories. When you interview him, you can’t, profitably, ask about what has occurred, you can only engage with him if you talk about what’s going on now. What’s on your mind this morning, Mr B? Who are you feeling competitive with today? What fly is buzzing near your face?
He is, and runs his career like, an ambitious man. He’s a dealmaker. No more, no less. No better, no worse. What he values is the ability and inclination to make split-second decisions. He’s rather proud when that ability is not slowed by too much information or explanation. He is most motivated by the last interesting thing someone told him — whether it is true is not as important as how it will read. Sitting with Blair for so many years, I’d regularly see the odd bits of information come in (my stock obviously went up when I offered him a tidbit), and be directed to a political researcher, or become part of his world-view or some instant political decision-making process. (At a cocktail party, he meets someone from Afghanistan, who suddenly informs his view of that conflict; at another party he meets someone who knows a policeman on Long Island, and that colours his view about a lecture tour in New York) He has no interest in understanding himself, because he sees himself as an everyman. He’s Mr Basic, Mr Uncomplicated; he has no airs, no fancy aspirations. He can trust his own gut. And why should he remember the past, he has to be in tomorrow’s papers? And once again beat the competition.
I have sometimes had the feeling, over the past years of talking to Blair and New Labour ministers, that his people are humouring him. That he is not so much, in Alistair Campbell’s formulation, the Sun God, who people cannot question, but instead a sort of long-running joke in which everybody at New Labour — so many of them career employees — is complicit. The joke is that this greatest of modern political men, the architect of the synergised, cross-platform, integrated, national political party, has no vision, no method, no strategy. Nor, likewise, does this man, perhaps the individual with the single most powerful political voice of our time, have any politics — save for what makes for good newspaper copy or puts money in his own pocket. Rather it’s all made up — what he buys, how he spends, what he believes, who he supports — on the fly.
In my interviews, Blair, even though a professional in the political world, was guileless — or ultimately unconcerned. It was a book, for one thing, and, as his advisers suggested to me, he might never have read one. What’s more, to think about how he might be portrayed would be to have an idea of his own self — to have to dwell on things he is incapable of or vastly uninterested in dwelling on. And yet he did it — blabbered away for years. With hardly a thought he exposed himself, his family and all his ministers to a biographer who one day happened to walk into his office. Even prospective immortality is something, at New Labour, which you just throw against the wall and see if it sticks.
Friday, November 28, 2008
Damian Green update
I've just heard Geoff Hoon on Radio 4's "Any Questions?" trying to defend the arrest etc. of MP Damian Green. I can only think he was chosen because he is somehow politically expendable. The transcript will be available in a few days here.
His Wikipedia entry says "His notorious skill is 'stonewalling' - deflecting difficult questions by 'playing a straight bat', or appearing to do so." Maybe so. But all it did - for me and the audience - was pretty much to damn him, and by implication the government.
His Wikipedia entry says "His notorious skill is 'stonewalling' - deflecting difficult questions by 'playing a straight bat', or appearing to do so." Maybe so. But all it did - for me and the audience - was pretty much to damn him, and by implication the government.
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