FRIDAY MUSIC: Van Morrison, by JD

No introduction necessary for this man........ "take me back to when the world made more sense"

A demographic question

Energy Trading: Why We Need Those Big Swinging Dicks

Our host asked me to pen this piece - and even came up with the title ... [BSD is © Nick Leeson - Ed.]

He'd seen reference to how Nicola Sturgeon was being disingenuous when she announced her new publicly-owned Scottish energy company saying it would have the advantage of not needing to pay "corporate bonuses":  but that her careful choice of words meant she knew full well there would need to be the customary big bonuses on offer to the energy traders involved.  How so? - couldn't energy trading be automated?  Might I be able to explain ..?

Well, many commodity markets are indeed already characterised by a lot of algorithmic trading.   But the gas and electricity markets are different (and also, for idiosyncratic reasons of market design, Brent crude oil at the 'spot' end of the market - though not in the longer dated, more liquid forwards).  It was once considered by some academics that gas, and still more electricity, was a paradigm case of a commodity that couldn't be traded (for "reasons" I won't bore you with, because they were fallacious). 

Turns out though, it's not impossible to trade them: this was proved triumphantly by *ahem* Enron, as a pure act of intellectual conviction and commercial will.  But it is more difficult - and in the case of electricity, much more difficult. The primary reason is that in most electricity markets there is virtually no inventory to act as a buffer in the market, so that relatively slight physical events (which happen all the time, with major events not uncommon) within and around the extensive infrastructure can have a rapid and profound impact on the supply / demand balance. In those few electricity markets where there is an effective buffer - which mostly means those such as Norway that are dominated by hydro-electricity, where the buffer is represented by water stored in dams and 'ponds' at the top of the mountain - trading is concomitantly easier.  Gas suffers from a similar, though less pronounced problem of limited inventory.

A secondary (and related) reason is the 'granularity'.   Copper, for example, trades in units of one month: gas is traded by the day; and electricity by the hour, or even the half-hour.  The gas grid needs to be balanced daily; and the power grid requires balancing in real time.  There are many, many other related contributory factors besides, making gas and electricity highly dependent on more than just the usual financial principles.  In consequence, gas and electricity prices (wholesale / traded markets) are hugely more volatile than has ever been encountered elsewhere - an order of magnitude more volatile in the case of gas, and often two orders more in electricity.  Phenomena like the growing amount of intermittent wind power in the 'fleet' only serve to make this more extreme.

Until, then, the advent of that Holy Grail - an effective and efficient form of electricity storage on a large scale(1)  - successful trading in these markets requires a unique blend of classical 'financial' trading skills, plus deep understanding of the very extensive physical / infrastructure aspects and their complex dynamics.   As a rule, financial traders hate getting their hands dirty with the physical stuff; and physical specialists don't understand the financial stuff (which can be deeply counter-intuitive to the novice, even the highly numerate novice, as most engineers are). 

So the winners - who really clean up - are those who can be arsed to acquire both sets of skills.   The amateurs get destroyed.  Some household-name big companies have really screwed this up over the years.  Many companies actually outsource their trading requirements to specialists - and pay a nice mark-up, but can then say "we don't need those nasty traders(2) & we don't pay those immoral bonuses".  But of course they do, really - like retaining an overseas 'agent' to do the dirty business with the backhanders. 

I wonder which route the pious Sturgeon is going down?   Sadiq Khan had promised to set up a municipal energy company for London, but seems to have thought better of it which, in my view, is wise.  Keep those big swinging dicks out of sight of the innocent Scottish politician ...

ND
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(1) Mr Musk has a very, very long way to go yet.  He's a great BS-merchant, though.

(2) The traders' culture is abhorrent to the engineering culture that quite naturally dominates the energy co.s.   There are many points of conflict.  When an energy co eventually realises it needs a trading floor (and be willing to pay serious bonuses), it can cause truly dreadful frictions.  Traders and the like have been heard to call the old-timers "Dougs" - dumb old utility guys ...  and since this is a family blog (is that right, Sackers?), I won't relate what the engineers call the traders.

Moving House, by Wiggia

"Having the benefit of readily accessible bacon..."?

This is a short piece on the perils involved in moving house; far away from the daily nonsense about leaving the EU - which in real terms we won't - it was the fact I am in the process of house hunting and this article that brought this on...

http://www.bbc.co.uk/news/uk-41708597

The article is a simple rehash of proposals made many times about simplifying the transaction process and as before, little meaningful will be achieved.

Do I have the credentials to write anything on this matter ? Probably more than almost anyone, would be my answer. For reasons never explained, each time I have moved or attempted to move house I have somehow found myself  the guinea pig to all the nefarious items that can arise during the process.

Without detailing all, it started with our first move when after exchanging contracts we were told two hours later we had a “problem”: our contract had been posted and the vendor of the house we were buying had changed her mind and phoned her solicitor who told her he still had the contracts in the office and would not send them if that was what she wanted. All legal in those pre-electronic days, but we were effectively homeless and all with no redress, a rare event even then but it gives a fair insight into what has followed.

You name it and it has happened to us and that includes incompetent solicitors, two of whom we have had to take to court for redress when they failed to do the job we paid them for. So yes, I am qualified to have an opinion on the whole process.

Government action in this area is bound up with vested interests: the Commons is stuffed with legal representatives of all colours. They have no reason to simplify the house moving process as they will lose money. In fairness - and I don’t like being fair to solicitors - they don’t earn much from a straightforward conveyance, which probably accounts for the number of errors and over-sights we have encountered; giving our house conveyance to the office junior and not checking has consequences.

The only government attempt at reform was the disastrous HIPS pack that took four years to clear Parliament and came with more holes than the Titanic. Again as I pointed out to my useless MP at the time, if the Commons stuffed with legal eagles could not in four years issue a document on the simple ? matter of house purchase  there had to be a reason and it would not be a reason acceptable to the public if revealed. He didn’t like that; they never do.

Estate agents, that merry breed of winkle-pickered, tight-trousered and -waistcoated, size-too-small-suited and (in modern times) mainly bearded individuals, also have a large part to play in the process. They are of course supposed to work for you, the person who pays their commission fee, but that will only apply with an easy (i.e. no work involved) sale. As soon as things go wrong - wrong meaning a slow sale for a variety of reasons - you will find them working for themselves: no sale no commission, so they get you to lower your price after four weeks on the market , start telling prospective buyers behind your back you will take an offer much lower than the asking price and start to  tell you of all the factors your now rubbish property has that is affecting the sale and why the price should be dropped further. They have no interest in you, the payer of their commission, only in getting it off the books, whatever.

I am convinced that the ‘feedback’ one has to endure is part of the wearing down process: the conveying of a viewer's opinion on your house is pointless. "Garden too big" - what am I supposed to do? Didn’t they read the brochure? "Too many front steps" - you can count them in the photos. "Dogs can get out" - my problem? Endless drivel that you could do nothing about even if you wanted to and you can add the comments of those professional viewers to whom house viewing is a weekend pastime: they never actually buy anything, just look and say whatever comes into their heads when asked about the place. It is all a wearing down process, that is if you let or are new to the game; personally I now state I do not want any feedback other than when someone makes an offer.

There are certain elements to selling that are very difficult to assess. A good example in the rare event of several offers is the “cash buyer”: there is no way anyone can prove that a buyer is in that position, it puts him at the head of queue as regards offers for obvious reasons and can demand a premium discount for that; but I have had a so-called cash buyer who - when it came to the crunch and everyone was wondering why the sale was slow - turned out to be negotiating a mortgage. I was not happy but you are then a long way down the train of events and are you on principle going to tell him he lied and get on his bike? Nonetheless there should be a way of verifying a person's status; agents claim they can, my experience says they can’t.

The late discovery of an alleged structural problem is another offer-reducing tactic. Despite having had a survey, at the last minute there is a query on your drains! Or "Do you really own that boundary fence?" Anything to delay and hopefully get a further discount. None of this should happen if the survey has been done and dusted and the searches completed; that should be it, but often it isn’t.

Never get involved in leaving deposits to cover a perceived eventuality discovered at the last moment. Most minor problems of that sort if real can be covered by a simple insurance. If a cash deposit is asked for you can guarantee you will see none of it again despite your own solicitor's guarantee you will - got caught with that one myself and the solicitor totally failed in his duty to keep tabs on it, a story in itself; they are only interested in getting the conveyance off the books.

The one thing that has never been addressed in house buying and selling is having a deposit system whereby when someone makes an offer a deposit is given so that in the event of a buyer pulling out the vendor will not be out of pocket in any way. Why should he? He will have incurred costs by that stage and wasted time. It is the buyer's choice to pull out so he should suffer the costs. This is not of course in relation to survey findings and the like, just the change of mind syndrome. This was once actually proposed but a myriad of dubious reasons came up and it was dropped; again there was no interest in protecting the innocent party.

It would also stop an awful lot of chain break downs caused by one party wanting to bail out on a whim, as often happens.  Many people out there treat house buying as a game; it isn’t.

There have been many attempts (and that is all they were) to shorten the time it takes from offer made to exchange and moving in. Many excuses for the drawn out process are made but all are spurious. During the late eighties property boom houses in London were sold and completed by specialist solicitors in less than 48 hours. Yes you had to pay for a lot of running about getting documentation, but it was proved to be possible, so why the long-winded performance we put up with. Is it another example of being seen to be earning the fee by the time spent on the job?

Gazumping and gazundering should not be allowed, - how many times have we heard that? Yet the position remains that until the exchange actually takes place both practices can be employed, usually at the last moment when someone who is desperate to get the whole thing over and done with will capitulate and accept the lower price or be told they will have to stump up more than agreed as another party has emerged (or not) from the woodwork.

The "other offer" ploy is also used by agents when selling. It can be true but how can you know? I had it used a week ago on a property I was viewing: “We have had a lot of interest and two offers on this property, Sir.” So why have you still got it on the market, I asked, are two offers not enough? Silence; the owner who was present told me later there had been interest but no offers. At times like that you can really build up an intense dislike of the estate agent class.

And there lies another problem. Over many years listening and being involved with what is basically a seriously flawed and corrupt system one does become cynical with a big “C”; estate agents' words and blurb, solicitors “solutions”, all are received with an incredulity as to their worth.

So how is the current move going, you ask. Not good at the moment and we have run out of houses to view. There is a shortage of what we want on the market so our sale is in jeopardy. Not for the first time we may have to start over.

Of course many will ask, why do you keep moving. That is another story. Many moves have been simply because of changing circumstances,not necessarily choice. The only thing that helps with all this is I do not get attached to the property I am in; only once did I feel a pang of remorse when leaving a house. As long as the place suits it will be my home whilst I am there, I do not put down roots; just as well!

I have told before about the image at the top of this piece. It appeared in an estate agent's listing by mistake (?)  The photographer took the picture after the house was put up for sale; it was not intended for the house details, but for a short time it found its way onto the site. Yet I had been told about this pig in the house long before that sale came about, as my plumber had been called to the property/sty to do some work there and saw said pig in situ. The world is a wonderful place...

FRIDAY MUSIC: Slovenia's Got Talent, by JD

This week we present the Gimnazija Kranj Great Symphony Orchestra! There is very little information about them on the web apart from lots and lots of videos. The only thing I can say for certain is that they are a Youth Orchestra in Slovenia and they are very good as you can see from the enthusiastic reception given to them by their audiences.

The Basque Country, A Timely Visit, by Wiggia

Our trip abroad finally took place this year after several canceled efforts due to ill-timed health problems over the last 24 months. Not that all went well on that front, as the wife managed to twist her knee prior to going and it restricted any walking to slow ambles or none at all; on return, a visit to the local surgery showed this to be not a ligament problem as thought but osteoarthritis which has already struck the recipient in several areas, so this is almost certainly the last of my European tours that we have so enjoyed over time.

Northern Spain was a choice for two reasons: firstly, the last time we went there was exactly fifty years ago, the year before we married; and secondly it afforded to avoid the long tiring drive down through France by using the Portsmouth to Santander ferry, a much more relaxed way of travelling and no need for a day to recover after the drive, plus it takes 24 hrs as against two days by road unless you are young and simply don’t stop as I did the first time we ventured south.

Our first stop was Oviedo where having arrived in the dark our satnav decided to die as we approached the city, drawing us into the centre rather than skirting round it to where our hotel was. Needless to say it was festival week and the place was teeming with people on the streets and traffic barely moving. I persevered, with much swearing at the dead guide, until we cleared the worst of the crowds, stopped in a quiet spot and took great delight in being able to foil the damned satnav by producing my old one from under the seat - nobody likes a clever dick but I was right to be smug as it fired up and got us to our destination.

The dead satnav of course was not dead but for a strange reason the micro card would not sit in its slot and kept coming springing out causing a blank screen, solved with a piece of electrical tape also from under the seat; I will have to have a proper look under there to see what other goodies lie waiting to rescue me.

Nice city. Oviedo, and they know how to put on a festival. It seemed every street in the centre had an attraction going at various times of the day and night and whilst in the covered market area a strange but familiar sound came closer: bag pipes, a marching band proving that the Celts have infiltrated this far south to inflict this strange sound on the populace.

The festival is something that we at home are not generally very good at, with exceptions of course, but there is a vast difference between this week-long indulgence in arts, fairs, street theatre and of course eating and drinking and the local efforts I have been witness to that comprise of three lorries with a motley local WI float, a reluctant 12-year-old Carnival Queen and the inevitable Morris Men who for reasons unknown have gone from being a rarity (better days) to what is now a guaranteed place in all carnivals, such is the desire of grown men ? to wave hankies in the air; but I digress.

I am not going to give a running Trip Advisor report on hotels stayed at but I will say all were top class and the staff to the last in all did their best for us; a long time since I could say that about a trip.

One thing became obvious very early on in this tour: the roads around Oviedo alone comprise of more infrastructure that works than in the whole of East Anglia - yes I know we paid for a lot of it through the EU but they have it and we don’t, something very wrong there.

Oviedo is a good base for the delights of northern Spain's wonderful scenery and coast, trips to the enchanting town of Aviles which at first sight looks like an industrial hell hole on the Ria de Aviles but don’t be deceived: the centre is a wonderful mix of styles in architecture and on the opposite bank is the site of the Brazilian architect Oscar Niemeyer, largely responsible for Brasilia, an exponent of modernism; it might not be to everyone's taste - "Telly Tubby land" said the wife - but it is very eye-catching and much is stunning in a modernist way.

Visiting there made me realise just how much contemporary design is in evidence in this part of Spain. There are more shops in that style than in Italy, a country I know very well, and the same style can be seen in hotels, offices and in the design of many homes. In Oviedo the hospital that can be seen for miles resembles a huge multi-layer cake.

Gijon with its two beaches and the inevitable working fishing port is also worth a trip for the harbourside area alone and a bit further north the Penas lighthouse in the style of the area, part lighthouse as we know and part house, this one has a very good maritime museum beneath it.

The other outing from Oviedo was to the Picos de Europa, a stunning national park with Dolomite style mountains and beautiful lakes and valleys. This was one trip limited by the other half's problems as most parking is deliberately well away from the best views and sites though with a modicum of “off-roading” and cries of “You're not going down there!” I  manage to get to some lesser and much quieter spots that were worth the risk of never returning up the road we had come down awhile before.

We left Oviedo and our beautiful hotel converted from a castle and headed to the part of the trip reserved for me, though I could not use those words when explaining that  La Rioja was an essential visit on this trip not just for the wine. I lie a lot in these circumstances, in fact it is a classic wine-producing area surrounded by mountains that give it a backdrop to remember, not unlike many other wine-producing areas world-wide that have the benefits of altitude and the water and protection from the elements the mountains provide. 

Bodegas Ysios, LaGuardia (Rioja country)

Rioja also reflects the desire for modernism in its bodegas. There are many fabulous new buildings in the area plus the Frank Gehry-designed Marques de Riscal hotel; whatever you think of Gehry this building is quite a landmark, worth visiting but very expensive to stay in. I suppose the problem with Gehry is as he has said himself, “The first building was the best and it is all downhill now”; not totally true but there is a modicum of truth in those words.

The Marqués de Riscal Vineyard Hotel, designed by Frank Gehry

To dig out suitable bodegas to visit involved some pre-planning before we left home, but my select list were all bar one visited and the wines sampled and purchased when they came up to the mark.

Which brings me to the second hotel we used: totally different from our castle, this was a derelict merchant's house in the middle of a  nondescript village. Completely renovated a few years ago, it provided comfortable rooms, an amazingly good and cheap restaurant and the only bar in the place where the locals gathered. Very drinkable white wine was available for 90 cents in the bar and the same was 6 euros in the restaurant; you could buy the wine in the local bodega over the road for 2 + euros.

Haro, the wine capital of the region is a must as four of the best wineries in Spain are all grouped around the station area and all have tasting rooms. Muga was the best as it was really a bar and you could taste their finest for a modest fee in very nice surroundings. For those visiting these places you will be tempted to buy but restrain yourself as the Simply supermarket down the road has an enormous selection of Riojas on sale right to the top level and lower prices than the bodegas were selling, as much as a third or more cheaper in some cases, so you should taste in the wineries and buy in the supermarket.

Whilst visiting the neighboring Vina Tondonia one could not help notice an event going on in front of the winery: a large batch of young schoolchildren were making their own wine with the help of the owner, miniature grape presses and various jars bottles etc meaning that grape-stained little hands were much in evidence and a great time was being had by all; this is evidently an annual event at harvest time and was the owner's idea as he had been introduced to wine making the same way when young and has carried on the tradition. I can’t imagine the making of alcoholic drinks at that age would go down well with our PC brigade but it went down well here.

Children learning to make wine

There are some very pretty villages in the Rioja area. We only visited a few but Laguardia, Sajazarra, and Najera spring to mind as well worth visiting along with San Vicente de la Sonserra for its hill top location and views that go with that.

The only failed find with my wineries was Bodegas Muriel: whatever I did, nothing on map or sat nav found the actual winery until I saw an arched entrance with the name. Quickly I turned in but soon realised I had simply driven into the vineyard itself down an ever more bumpy earth track; more cries of “You're not going down there!” but more off-roading got me back on tarmac and I never did find the winery. All of that makes a change for the destination I usually end up in when lost: the industrial estate wins every time.

The colours at this time of year are stunning with the grape harvest in full flow; the leaves on the vines are changing to autumn colours - the genre Vitis is known for coloured leaf climbers but the grape vines are not far behind with ribbons of orange and yellow hues adorning the fields.

I could have spent another day or so in Rioja, it is a lot more than just a wine region with its own style of landscape that compliments the rest of this gorgeous region.

Soon it was time to head north to the coast. Getaria was our destination but finding the hotel produced a story of its own. Once again the vagaries of the satnav came into play: whatever version of the address I put into it the result was a dead end. Numerous requests from the natives produced much pointing and "back there" signals but still no hotel. I pulled up in the street we were on and got the map out - it didn’t help - and then espied an ambulance parked up opposite: he must know the area so I went over with the address.

I handed him the address and he looked long and hard and said nothing, eventually he said "Español?" hoping I could converse as he spoke no English; after I said no he gesticulated and I grasped he was going to take us there, so we arrived at the hotel - which was nowhere near where we had been looking - behind an ambulance, a first for me and something I doubt would be repeated in the UK.

Unlike the previous stops this  was a very modern hotel but very well laid out and comfortable with views over its own vineyards towards the coastal outcrop at Getaria and lighthouse and the lighthouse on top.

One can imagine with the huge Atlantic swell all those lighthouses earn their keep and now of course that swell is haven to surfers who are everywhere along this coast. 

You know you are in Basque country here: all the signs and names have unpronounceable names containing lots of Xs and Zs in combinations that baffle and the Basque flag is flown proudly.

Here on the coast you realise how important fish is to these people: all the small ports have boats of all sizes out all day and into the night, the restaurants  all have fish-dominated  menus and it is an insult (as it is all round this coast including Portugal) to ask for anything but fish, so we didn’t. God knows what we spent on turbot, sea bass, sea bream etc all priced by the kilo, but they were the best fish meals I have ever consumed so it was worth it; but it does not come cheap. Saturday night saw the locals indulging in the same fish: they are prepared to pay for the good stuff as in Japan, where fish is of a higher order in the scheme of things food-wise.

Getaria is home to a superb modern museum dedicated to the late fashion designer Balenciaga who was born here. It's not my thing in the normal run of events but I was very impressed with the layout and presentation of some beautiful clothes... have to be careful here I might just step over the the current gender boundaries and be seen in a dress !

Just up the coast San Sebastian beckoned. It seemed much bigger after fifty years and inevitably is but the handsome buildings in the center all shone and the festooned bridge at the river mouth was just as remembered. The place was teeming with people and had that look of affluence you see in big cities, and whilst the outskirts are like those in most other cities. the  central harbour-side part and promenade is still very good. San Sebastian is another foodie paradise but we stayed with the fishing village fair and did not eat there.

Round Getaria and along that piece of coast a white grape is having a resurgence and is drunk with fish by most of the locals. The grape is Txacoli; not seen in the UK, it is a dry wine with natural spritz and is poured using an aerator on top of the bottle, Whilst the “good with fish” meme may stand up, to me it was the nearest thing to lemonade I have ever encountered in a wine: no subtle hints of lemon here, great gobs of it, not unlike but more overpowering than NZ Sauvignon Blancs that have lost the plot and taste only of gooseberry. No, I did not bring any back, even for the novelty value, though the wife did not mind it; I stuck to the Alborino, which is constantly improving here. There are other rare white grape varieties and I tried a few but in honesty they offered nothing out of the ordinary; but I may not have had the best of them. Needless to say, the names of these grapes all started with the letter X !

I saw little TV on this trip but the Catalan referendum was wall to wall with constant shots of the protagonists and the various police forces being shown in good/bad light according to whose side you followed. What little I could gather from the locals - who managed to find three old ETA members who appeared on TV with masked faces and berets, plus one man with a flag - was that it was as much a protest against the government in general: Rajoy along with all the western leaders is seen as a weak self-serving politician (as they all are nowadays; no change there.)

In fact an interesting part of the trip was meeting various people from all over Europe, the States and Canada who all said the same thing: the general consensus was we are not being served well by any of them, as the status quo does not like being shoved even slightly to one side. The full Trump is evil and the farce of Obama care was spelled out in very plain language. None was a good omen for the west as the problems are mutual and are simply not being addressed.

And just one other thing before the last stage of the journey: Spanish TV is ruled by women. One news program I watched did not have single man in the studio or on location, not one. Even the totally over the top football coverage was not dissimilar; and the face of Zinadine Zidane staring out of the screen was almost 1984 in its omnipresence; and if you believe them, Harry Kane is already playing for Real !

Whilst still visualising Spanish women, they still do wear the sexiest shoes - crippling, but sexy.

And one  observation that was puzzling: there seem to be an inordinate number of old “S” type Jaguars in these parts. One we came across was actually out on hire. Were they a big seller in Spain? I have no idea.

As the trip drew to a close the weather turned foul. We were in a cloud with rain for the last two days and when we left Bilbao on the ferry back the harbour could not be seen as the cloud base was so low. As for Bilbao itself we had no time to do it justice, just one venture into the centre and sample a couple of those wonderful tapas bars - some are really amazing - and back to the hotel for an early start to get the ferry.

A final anecdote: on the multi-laned highway to the port there were five visible accidents involving multiple vehicles in the space of less than a mile; this was on both sides. The irony was that huge signs saying "Drive carefully, this is an accident black spot" were evident everywhere; their driving is still appalling.

As JD is more than aware, having spent time in the country, this part of Spain is a foodie's paradise.  I have never eaten so well across the board, not in France, Italy, anywhere. I would love to return but another fifty years hence? I doubt it !

FRIDAY MUSIC: Iris DeMent, by JD

Iris DeMent is another excellent singer/songwriter who is not as well known as she deserves to be. She has a very distinctive voice which may not be to everyone's liking but there is no denying her wonderful talent and she is highly regarded among other musicians.