Thursday, February 11, 2016

Living with irrationality

The following was a letter published in The Guardian this morning and I felt I had to quote it because it so closely matches my own views.
Markets are “unnerved”, “market confidence is fast deteriorating”, “market expectations [or should that read speculations?] are not met”, all of which adds up to “global markets being haunted by fear”. Where is the “rationality” in all of this, ie rational people making rational and informed decisions, which presumably is the mantra that underlies the principle and justification of “free market economy”?
Wolfgang Wittwer

Humans are conscious animals. This means we are capable of exercising reason and acting on information and cool judgement. It also means we make gut responses often based on our perceptions of what others are doing or what we think they are doing or what we think they are likely to do. It is this last bit that is crucial for getting a handle on market gyrations. This morning, for example, the FTSE 100 index has dropped some 2.5% since last night, a huge fall but following persistent weakness since the start of the new year. One year ago it was around 7000, now it is hovering at 5500. How can a rational market work in this way? Obviously it cannot. Either everyone got it wrong a year ago or they are all getting it wrong now. The current downswing may prove self-fulfilling in that it creates a climate of uncertainty that causes investment spending to fall and precipitates an economic depression. Or it may be seen, in a few months time, as a foolish over-reaction, as the industrial economy picks up under the stimulus of lower energy prices.

We cannot predict the future with sufficient accuracy and therefore all financial investments take the form of a risk based on a mixture of judgement and instinct. But judgement in this case is also heavily dependent on instinct because the future will hinge on whatever everybody else does and we can only guess at what that may be.

When people, and often they are politicians with little experience in economics, talk about the efficiency of markets and the need for market-based solutions, they betray a frightening ignorance about the way that humans think and act.

I shall probably return to this theme.

Monday, February 08, 2016

Those awful advertising slogans - no 9. Johnny Walker

Here's a truly weird, almost creepy one. An elaborate double-page spread in the "colour supplement" in my weekend paper. A large block of text accompanies a full page picture of a young woman in a bathing suit holding a surfboard. We are told she is of  humble origins in Brazil but is now a professional surfer and is really jolly pleased about it.

Perched discreetly at the foot of one page is the word from our sponsor. Here we learn that the surfer is "a Johnny Walker ambassador because she embraces the philosophy that joy takes you further in life". The strapline appears to be "Walk with joy".

The creepy aspect of this slogan is its similarity to the Nazi slogan "Strength through joy" but whether today's adman is sufficiently well educated to know that, I cannot tell. I can excuse them the "Walk" bit because Johnny Walker's advertising has used that word for ages. However this is not the main point. Why should I think better of them because they are associated with a young lady from a distant country?

Let us begin by considering the central issue raised by the gushing copy about the terrible hardships endured by someone who spends her time paddling about in the warm South American seas.  Does the young lady drink the product? If so, she's keeping very quiet about it. Not one mention of her taking the quick gulp from her hip flask before she tackles a big one off the Amazon. Nothing about her habit of chucking the empties over her balcony at 3am. We are told that she has been able to buy a car with the proceeds of her profession but not whether she takes the odd hearty swig whilst hurtling around the motorways of Rio. Does she take it with ice? Soda? She doesn't ruin it by putting cola in, does she?  In fact, although she is supposed to be an ambassador, there is not a single mention of the whisky, or any of the alcoholic or other products made by the Distillers company. Indeed, her demanding lifestyle probably militates against the taking of whisky - perhaps the odd half glass of beer on a hot day or a drop of rum in the evening might be more likely in any case.

None of this appears to matter though. She is an ambassador (not a mere second secretary or commercial attache, no, it's straight into the top flight of diplomatic ranks for our girl) because she is a bit on the cheerful side. That's all it takes. She does something she likes, and good for her, so that qualifies her for  - well, I don't know what she gets out it. Presumably a healthy fee for having her picture splashed over the advert - she is a professional after all. Perhaps a couple of crates of the hard stuff delivered to her door in an unmarked van once a month.

What else does an ambassador for whisky do? Really, she should be haunting the fashionable bars of Ipanema and Copacabana, putting her arms round her drinking buddies and insisting "você é meu melhor companheiro que você é "1, and then ordering large ones all round. Or putting on elaborate parties where, after the butler has brought round the mounds of chocolates wrapped in silver foil she can further spoil her guests by a liberal distribution of snifters and a merry, nay, joyful, shout of "Há muito mais de onde isso veio"2.

In any case, if a spot of joyfulness is the only qualification to attain this clearly desirable status (I'm assuming that, as an ambassador, you get a decent expense allowance, a reasonable flat in the heart of the diplomatic quarter and luncheon vouchers)  then, listen Messrs. Distillers, I'm your man. I can put on a beaming, gap-toothed smile with the best of them. I'm doing something I dearly love [actually, mentioning you enjoy taking the piss out of admen might not be the most intelligent thing to put in writing: Ed]and unlike your Brazilian surfer chum, I am partial to the occasional drop of the "Scottish product". So here's the deal. I'll be your high commissioner to beautiful Ruislip, you drop round a few botts. in a plain brown bag and everyone wins. I'd certainly be walking with joy, I know that.

1.  "You're my best mate you are". 
2. "There's more where that came from"
Thanks Google Translate

Wednesday, February 03, 2016

Iowa caucuses - a guide to some of the less well known candidates

There are loads of presidential hopefuls running in the caucuses and understandably readers of these columns may be confused about them. We need waste no time in analysing their politics because one and all they affirm they wish to "make America great" and "get America moving"  and to "bring hope" and similar banalities. Instead we shall waste time by introducing the most obscure candidates with the time-honoured device of playing around with their names. For reasons beyond my control, they are all standing for the Republican party.

  • Jim Gilmore - presumably no relation to the well-known guitarist with a certain popular beat combo I have referenced once or twice in these columns. His achievement of 12 votes out of some 190,000 cast must surely be a great source of pride to his fond parents, if nobody else.
  • Rick Santorum - actually this is a village in Hereford. The name, similar to both Buckland Monachorum (Devon) and Rickmansworth (Herts) means something like 'the haystack near the health centre' and refers to the days when infirm peasants, once their medical insurance had run out, would be accomodated in a suitable bale of straw.
  • Chris Christie - Mr. Christie senior was a man of few words and even smaller imagination. Completely stumped to find a name for his son he had got as far as filling in his surname on the birth registration form and then thought 'yeah, that'll do'.
  • Mike Huckabee - A traditional practice amongst East Coast apiarists, the competition to see who can throw a bee the furthest is little known today. In Yiddish the word 'huck' means to hit or throw and the Jewish emigrants to the US in the early 19c were keen to adopt the local customs. One might hear a man dressed in fur hat and long black coat observe despairingly to his wife "Oy, Golde, I gave that bee such a huck and he went nowhere". Whether Mike is aware of his rich cultural heritage is hard to say.
  • Carly Fiorina - Originally a folk duo from northern Spain, Carl y Fiorina scored nul points in the 2008 Eurovision song contest with "Boom za za diddle means I love you", split up, reformed and finally merged into one
  • Rand Paul. Forever finding that officials were crossing out any forms he had filled in, where he had put surname "Paul" and firstname "Rand" on the grounds that he had made a mistake, and in any case faced by deep scepticism that "Rand" is a name, rather than a currency, Mr. Paul dropped out of the running as soon as the results were in. 

Portents of Doom

Whilst the terms of a possible new deal between the UK and the EU are being scrutinised and the people of the Americas begin planning defences against the Zika virus, some of us have been forced to focus on a story that grips to the very marrow.  I shall not go into details for fear of unncessarily distressing some of my more sensitive followers but let this sinister panel, clipped from today's BBC website, tell its own, blood-curdling, story.

Oh, my jammy dodgers and ginger nuts, my custard creams and rich teas, my garibaldies and bourbons of long ago. Washed away in the rising waters and lost to us, abandoned on the flood and drifting helplessly into the gathering murk of a winter's night, never to be dunked again. We hear their pitiful cries of distress but can do nothing. We must be strong to bear this, e'en as we have born disaster of yore. Who can forget the terrible months of the Branston pickle shortage? Whatever happened to the dark chocolate Penguin? Have the faith, my people. Surely the biscuits will come back to us over the foaming deep, one day, one wonderful day of hope in the glorious future.

Whether floods can actually spark anything is a fascinating question into which, I fear, I do not have the time or patience adequately to explore. [Technically no, unless a live electrical appliance is in contact with the water and there is some other apparatus in which a spark might be induced. Or something. But even then it would be the appliance doing the sparking not the floods. OK? Ed.]

Saturday, January 30, 2016

Shock! Man dies! Leaves money to his family!!

Good evening and here is the news

A popular singer, Mr. D Bowie, who became deceased recently, has left his estate to his family. Our arts correspondent says "This has once again shown how revolutionary and important he was and people will be talking about this for a long time to come, or perhaps for ever". Our finance correspondent adds "He certainly left more money than most people will, so this is jolly interesting for anyone keen on knowing about people with more money than they have".

In other news, at least three people in Manchester have visited a chip shop in the last four hours, some trains are running, the seas continue to be wetter than the land and a Government health spokesman has warned members of the public to "wrap up warm" if it becomes cold.

And now more on our top story. Jeremy Grapeshot reports from New York
"It's still bloody cold here following the massive blizzard last week but everyone's heart will beat a little faster with the thought that, if they had married Mr. Bowie, they would now be a lot richer than before".

That, you will be delighted to hear, is the end of the news.

Sunday, January 24, 2016

A spot of the balmies

It seems fair to follow up my previous, meteorologically-themed post, with an update. There may be record-breaking blizzards in North America but we enjoyed positively spring-like conditions today in beautiful Ruislip with the temperature reaching an amazing 14c. The unceasing storms and rain of December and the first part of this month have give way to a bit of cloud here and bit of drizzle there, sufficient to keep the back of my garden slightly flooded (and by slight I mean just a bit of standing water that refuses to go away), but nothing whatsoever to worry about. We did get some real snow the other day but it lasted barely the morning. That might be it this year but of course there's a fair way to go yet.

Speaking of balmies, there are barmies on the horizon as the British Government pursues its quest to renegotiate the terms under which the UK is a member of the EU and we have the fascinating prospect of the Conservative party about to rip itself apart. Several leading members of the Government have declared themselves against it, no matter what Mr. Cameron may achieve in his exhausting and seemingly endless jaunts around Europe trying to drum up support. The latest news is that he might go for a referendum in the early summer, thus irritating the Scottish Nationalists because it will overshadow elections there. But if he delays till the autumn then the split in his party will be revealed in full at the party conference because no elections can ever be held between mid-June and the end of September.

The only sensible referendum would be one where voters could choose between a range of policies but we won't get that. Arguably only people who actually know what the EU is and have some idea about how it works, what it costs and how it is likely to be changed in future should be permitted to vote but we won't get that either. (This is not like voting for an MP, who you know you can chuck out in five years if you have to).  It will be a yes/no and much legal time will be spent on the precise wording. If Mr. Cameron has his way it will read
"Do you agree with the Government's very sensible terms that will guarantee a prosperous future for all within the EU?";
and if his critics win out it will read
"Do you agree that Britain faces utter ruin if it remains in the EU any longer no matter what those cunning foreigners might pretend to concede to us?".

In any case nobody will have the slightest idea whether we will be better off in or out because nobody can predict the future so the whole exercise is daft. I suppose I will have to continue commenting on it because the decision matters, not least because a No vote will inevitably lead to the breakup of the UK because, if one should occur, then sooner or later Scotland will have a second independence referendum, on the grounds that a majority of them wish to remain the EU so why the hell should they follow England out.

It is a cruel irony that the leader of what used to be the "Conservative and Unionist" party should be so keen to jeopardise the Union and his attempts to prevent it will of great interest.

Tuesday, January 19, 2016

A touch of the chills

After a mellow autumn and almost balmy December, it has turned decidedly nippy. The little pond out back froze over for the first time in ages last night and has remained thus, with the mercury hovering around 1c all day. It was pretty bracing on the terraces at Wealdstone FC's home game as well when we did our usual thing of scoring early and conceding a tame one at the death but at least we got a draw. It's always depressing to trudge back through the near-deserted streets of beautiful Ruislip in the freezing cold when your team has been beaten.

Botanists should be watching this spring with great interest. Will the freeze do strange things to the many plants that think that winter is over?