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Secretary of State Clinton?

Hillary Clinton might just make it to the West Wing of the White House; with reports affirming Clinton on a 'short list' for Secretary of State according to the LA Times.

Hillary Rodham Clinton emerged Friday as a top contender to be secretary of State after flying to Chicago the day before and meeting privately with President-elect Barack Obama, former advisors to the senator from New York said.

Obama is weighing other prominent elected officials for the post of the nation's top diplomat, but has zeroed in on the former first lady and runner-up for the Democratic presidential nomination, according to one of her campaign aides.

Bill Richardson and John Kerry are also in the running. In terms of foreign policy credentials, does anybody remember the slight oversight from the primaries? When she 'misspoke' about landing in Bosnia under sniper fire and having to rush across the tarmac? Here's a reminder of what really happened.

Newswrap

A brief round the grounds of the stories this afternoon

The fate of ABC Learning centres is one step closer to being decided as Julia Gillard confirmed expressions of interest over the company and its assets were open for lodgement with the receiver.

"A number of organisations have already contacted the receiver, and others have contacted various arms of government, with a view to expressing their interest in potentially buying or otherwise operating individual, or several ABC Learning Centres,"

This comes amidst claims that the company may have breached legislative ratios for staff to children.

 

The NSW government is hemorrhaging money and ministers, with Premier Nathan Rees sacking his second minister in as many weeks, while unveiling a mini-budget that will leave the state $1 billion in the red. Tony Stewart was alleged to have verbally abused one of his staffers at a charity function. The budget drips with cuts to infrastructure spending, variable fees on Harbour Tunnel and Bridge, as well as deferring the abolition of some state taxes that should have disappeared with the introduction of the GST. The mini-budget was prompted by a collapse in the flow of stamp duty into the NSW coffers.

Despite Petro Georgiou warning against political attacks on members of the public service, Don Randall launched a broadside at Ken Henry; Treasury Secretary. Just a couple of weeks ago, he was forced to table an apology in parliament for attacking RBA Governor Glenn Stevens, suggesting the rate rise during the last electoral campaign were politically, rather than economically motivated. Georgiou said the Coalition must be "very careful about attacking Treasury or their institutional representatives". On Remembrance Day; it seems that Randall forgot.

Lest we ever forget

An inspiring Editorial from the team at the Australian on Remembrance Day.

"The Great War generation set an example for all ages

IN inevitable ways, Remembrance Day 2008 is one of the more poignant since those that immediately followed World War I, when a fledgling nation recalled its enormous sacrifice in that conflict amid the faces of the families and friends of the dead in nearly every community.

Today, 90 years after the Armistice between the warring powers on the Western Front took effect at the 11th hour, we mourn the more than 60,000 Australians who died, without the presence of a single survivor from those shipped overseas.

We, as modern Australians, are learning more about the experiences of the Great War generation and the unique heritage they bequeathed of a country that has volunteered more in blood and treasure to freedom around the world than could rightly be asked of it. It is well known that Australia lost more in the services for its population in that war than did other countries.

Prominent among the heroes has been, ironically perhaps, one of the most privileged, the Western Front commander of the Australians, Lieutenant General Sir John Monash. As Mr Fischer and others are seeking, it would do well for the Rudd Government to promote Monash posthumously in recognition of his achievements and sheer humanity.

There are millions of Australians whose families arrived after 1918, but whose nations also fought in World War I. Many of these also remember today with sadness. They include Turkish Australians, whose old country was briefly, and terribly for both nations, Australia's enemy but has since become a friend.

We bear two obligations to those who died and the many thousands who lived on with awful injuries: never to forget what they did, and never to retreat from their still astounding example of generosity towards the defence of every peoples' liberty.

The five craziest mortgage deals

From The Times Money Central

In the booming years of the recent past, we borrowed as much as we liked at low rates of interest with hardly a thought of how we would pay it all back. The trillion-pound debt mountain grew as we used our homes, our estimated salaries, even our future bonus-earning potential to ask for even more cash from the banks, who were only too happy to oblige.

The mortgage deals available in these credit-rich years demonstrate just how easy it was to borrow huge sums of money. Here are the five most outrageous mortgage deals available during the decade and a half of excess.

1) The "Together" mortgage

The notorious Together deal from Northern Rock and other deals like it, which allowed homeowners to borrow up to 125 per cent of the value of their home, have at times been blamed for the entire negative equity epidemic facing British homeowners.

The deals were a combination of a secured mortgage worth 95 per cent of the property's value and a unsecured personal loan for the final 30 per cent. The loan was at the same cheap rate as the mortgage.

Mortgage experts argue that at the end of the 1990s, 125 per cent deals made sense in certain cases. The value of homes doubled in value in the space of a decade and a 125 per cent deal quickly represented only 60 or ever 50 per cent of the property's sale price. However, thousands of homeowners have been caught out. Those who took out these loans at the peak of the housing boom, between 2004 and 2007, now have mortgages which greatly exceed the value of their homes and no other bank, including Northern Rock, will lend to them.

Northern Rock certainly wasn't the only lender who offered 125 per cent deals. Another big provider of the loans was Bradford & Bingley. In the last year both lenders have been nationalised, and 125 per cent deals have disappeared.

2) Eight to ten times your salary

In the midst of the credit boom lenders were happy to lend 8 or 10 times salary. And in some cases, this could include expected bonuses.

Morgan Stanley, the investment bank bought to its knees by toxic sub-prime mortgage-backed securities, was offering 8-times-salary deals though its Advantage brand in the UK. Meanwhile, GE Home Lending, owned by General Electric, the monolithic US enterprise, offered 10 times salary through its First National brand.

3) Foreign currency mortgages

Last year nearly 90 per cent of new loans in Hungary were in a foreign currency, mostly Euros or Swiss Francs. The exchange rate meant that these loans were much cheaper than mortgages in forints, the Hungarian currency.

However, the problem with foreign currency loans is that as your home currency declines relative to the foreign currency, the cost of making your loan payments rises considerably.

The bad news for Hungarian homeowners has been that as the economic crisis ripples across the continent, currencies have been fluctuating wildly. The Euro has soared against the Hungarian forint, reaching a peak of 286 forints last week compared to a low of 229 last July, adding vast sums to the cost of mortgage and loan repayments for ordinary Hungarians who were not warned of the hidden risks behind their low cost loans.

4) Libor mortgages

Borrowers with less than perfect credit histories, known as sub-prime, have always faced prohibitively high interest rates because lenders insist on pricing in the risk that they slip into arrears.

In recent years a number of lenders specialising in sub-prime have bumped borrowers who have come to the end of their fixed rate deals onto a variable rate that is tagged to three-month libor, an interbank money market rate which has soared in recent months as the financial crisis knocked the confidence of institutions in the City.

As Aaron Strutt, of Chase de Vere Mortgage Management, a broker, explains: "Thousands of borrowers who have been coming to the end of their mortgage deals are unwittingly reverting to a margin above libor, which could be as much as 10 per cent".

Libor has been falling in recent weeks, much to the relief of these homeowners, but it is still over a 1.3 percentage points higher than the base rate.

5) The Rover 200 mortgage

A good mortgage deal will sell itself, as lenders have found to their dismay in recent months as a pole position in the best-buy tables results in a deluge of enquires.

But a bad deal? Well, a bad deal requires something more. In the case of West Bromwich Building Society it required a free Rover 200. The deal was partly inspired by geographical logistics, as the ill-fated Longbridge plant which made the car was sited near West Brom's head office.

However, the 200 was more of a curse than a blessing for over-excited homeowners. The model was dogged by problems with reliability from the start. To matters worse, there was scarcely a profit to be made from flogging it, as heavy depreciation and a glut of cars on the second hand market made it difficult to sell on.

And the mortgage itself? Homeowners would have been better off opting for a best-buy mortgage with the most competitive rate and buying a new, more reliable car with the savings.

Blog from Microsoft Word 2007 Test

Blog from Microsoft Word 2007 Test

The devastating double leak

Cabinet leaks are never fun. Unless you’re on the other side of the chamber and can dine out for weeks at a time on the information. There’s a couple of things alarming about the recent leaks, both regarding petrol.The first leak regarded Martin Ferguson’s objections to the Fuel Watch scheme inside the apparent sanctity of Cabinet; and he was forced to front the press with an admission of arguing against it in Cabinet, but he backed the policy as Cabinet had decided it. Embarrassing.

The second, and in my opinion far more damaging, appeared last night in a Laurie Oakes exclusive. It showed that several departments (Finance, Industry, Treasury and the PM’s own DPM&C) had provided advice that the introduction of the Fuel Watch scheme nationally would impose high compliance costs on independent retailers, and eventually have an upward influence on prices rather than the opposite.

The FuelWatch scheme has at its centre an idea to set the prices the night before and not have them change for the duration of the day, under threat of fines and other penalties. Even if this is on a day by day basis, it resembles the introduction of a price floor and a price ceiling, which tends to disrupt prices. The effort of attempting to collate prices from across an entire nation is admirable, but by forcing service stations to set their prices in advance may preclude consumers from accessing fuel at the lower prices. Over the course of say, a week, the average price will be set for the entire week; eliminating the fuel price drop on Tuesdays. Is this really going to help working families*, who know of that lower price?

The Government has firmly relied on the economic modelling from the ACCC, but newspaper headlines around the country suggest he has actually misrepresented the advice. A highlighter was passed across the table in Question Time yesterday, which asked the PM to highlight the relevant sections of the ACCC report, an offer that was passed up. Kevin Rudd was shuffling papers like a casino croupier, putting them into different piles on the Table.

But back to Cabinet leaks. It’s very worrying to have a Cabinet leaking this early into the life of a government. The electronic system for circulating Cabinet papers may not be as secure, or the bureaucrats who had their advice ignored got angry. All sensitive leaks are investigated, but the culprit is often never found. Which leads to the suggestion that Ferguson himself may be angry about being overridden in Cabinet, or that his criticism was not given a fair hearing. Marn’ being of the Victorian Left, could this be the factions reasserting themselves. If their views aren’t respected, they may leak.

As I recall, the various incarnation of the Howard Government rarely leaked, as Howard made sure that each of the opposing views was heard, even if he didn't act on it. Cabinet was tight. If every minister's decision is leaked, it just encourages discussion out of cabinet. Ironically, the corridors of Parliament House are far less secure than the Cabinet Room. As petrol prices continue to rise, maybe a bit of panic is settling in. After the Opposition's divisions on the excise, it must be a welcome change to have some disunity in the government.


*If I hear the term working families once more from Kevin Rudd, I’m liable to put a brick through my television.

I cannot believe this

What has Sarkozy actually achieved since being achieved since being elected, from his policy basket.

France will keep its 35-hour working week in order to enable employees to add tax-deductible overtime to their salaries and boost growth, President Nicolas Sarkozy said on Tuesday.

Petrol Competition

Petrol once again has dominated politics, this time with the Prime Minister admitting that more could be done on the GST applied to the fuel excise, or the entire excise. Any change would certainly impact on the budget of states, through the GST collection. Maybe Brendan Nelson has found a way to cause some disquiet amongst the wall to wall Labor governments? As I’ve said before, I disagree with the “five cents off” provision, mainly as it can be easily wiped out by an overnight change in the oil price.
Then again, politics is never always necessarily about what’s right for the economy, often rank populism gets you air.

Brendan Nelson is starting to find his own way. An opposition leader always lurches from one ‘important/crucial test’ to another. In Nelson’s case, it was navigating the opening of the new parliament, climate change and most recently the Budget Reply. Unfortunately, it never stops, as the Gippsland by-election is the next stop. But Nelson has managed to appeal to Rudd’s me-tooism, and he’s now (reviewing) at least the budget measures. The next couple of weeks will be tough for Rudd, as he has to deal with the comment that his government has done everything physically possible to help with the cost of living. The increase in fuel prices must transfer through to the cost of consumption goods; ‘working families’ must be really pleased that no further help is in the offing from government.

To be fair to Rudd and his government, a lot of the price increases are not due to Australian factors; petrol is a component of the CPI, but he must deal with the promises made at the election to all those he promised life would be better.

So You Think You Can Sue...

In one of those weird alignments of celebrity, politics, war and scandal, the allegations aired in a Department of Defence document smack of chauvinism, and those stereotypes the army is desperate to avoid. The story was broken by former Bulletin editor Gary Linnell; who pointed out a slightly seedy connection or pun:

Zaetta was the co-host of 1990s television show Who Dares Wins, which is also the motto of the Australian SAS.

The claims were contained in a defence briefing document which had as recipients Defence Minister and other departmental honchos suggested that the Bollywood star had engaged in inappropriate conduct with troops, despite briefings that fraternizing with troops would be a breach of internal Defence regulation. Kevin Rudd has to deal with the fallout:

Defence has apologised in terms of their handling of this particular document.

There is a full defence investigation under way in relation to two matters - what transpired there (Afghanistan) and, secondly, on the question of the actual handling of this document.

He also reaffirmed Ms Zaetta's right to sue if the document proved to be incorrect. The defamation payout may however not compensate her for the mud that may stick to her and rub off on a Bollywood career, with The Hindustan Times' main online headline: "Who dares loses. Starlet Tania romped with troops in war zone."

In a conservative movie culture where producers have been sued for allowing an on screen kiss, even the allegations of misbehaviour may be enough to end her career.

And thanks to the magic of Youtube, here's a bit of Tania circa 2002, co-hosting Who Dares Wins with Mike Whitney.

HECS Repayments

In the press over the last couple of days, Bruce Chapman, the inventor/architect of the HECS system has suggested that sportspeople who have benefited from training at government at government institutions such as the Australian Institute of Sport, and the elite sport bodies dotted around the states.

The first targets of course, are those who possess a huge public profile, such as Lleyton Hewitt. Earning over AU$15 million per year, the repayment of Australia’s investment in him would be a drop in the ocean. Scholarships for sports at the AIS are within the region of $50,000; an amount that is somewhat equivalent to some HECS debts built up by university students over the course of their degree.

Lleyton's manager said he only received support for one year, and did not 'live in' at the AIS. So reasonably, he would not be liable for the full amount.

It seems unfair to try and retrospectively enforce it on those who have already had success, as the motivations for entering the ‘elite sports system’ are determined not just by the scholarship but things such as the repayment of debt. The potential repayment threshold should be set at a level that does not interfere with their capacity to progress in the sport.

Surprisingly Angus McFarland, National Union of Students President, is against such a proposal ever making it onto the statute books.

Sport is a cultural investment in the country, and athletes give a lot back to the community in the pride that we get from their achievements internationally.

Unfortunately, someone still has to pay for it. In a case of selective hearing, the NUS is happy for payments to flow from HECS style levies into its own coffers:

Under the NUS model, a compulsory HECS-style levy would be charged for student services. Students could then choose whether to become a member of their university student union. Fees from those students who chose not to would be used for a “Community Facilities Fund”, which would be used for such things as “student space, computer labs and sporting grounds.

It is always an honour to represent your country in your field, whether it be science, sport or occasionally holding your end up in a London pub, each of us has been trained. In the upcoming Olympics, beyond the scholarships provided by the AIS, there is a huge amount of government support that is often never seen, and oft forgotten when athletes mount the dais.

The expansion of the system should not be seen as lingering toll poppyism, and making a grab at money for those who are rich, and can pay. In the case of gymnasts, whose careers in the Olympic fields are short when very young, they have an entire lifetime ahead of them in which to repay the amount. The program shouldn’t be about naming and shaming those who should pay but haven’t, the system should be based on fairness. Some free-marketeers would question the existence of the original HECS system; but inherently, this allows the collection to occur rather than not. The administration costs are yet to be seen; would it be a revenue positive proposition?

I can’t predict their goodwill, but it would be very Australian to give something back voluntarily as recognition that the reasons for their success is shared between their own aptitudes and talent, as well as the Australian people, whose taxes were used to develop them. A side question would be how to treat Australians who list their primary place of residence as being outside Australia (Pat Rafter and Bermuda anyone?), and how legally income can be collected.

At ANU, Professor Denniss is preparing a list of the top 50 earning Australians who have received support, probably with an implicit requirement that they pay it back. Tennis is again at the forefront, with Jelana Dockic estimated to have had $250,000 of contributions made. In 'absconding' she has followed the lead of many young graduates who head overseas and don't repay their uni fees. Often the main purpose is not to avoid the tax, but to explore working in other countries. Chapman had a solution for this that he presented last year:

"The first way to fix the overseas problem is write on the bottom of HECS contracts that in the event that you are going overseas for six months or more, you are obligated by law to pay the minimum HECS," Professor Chapman said. He said while this repayment would not be linked to income, it was not much money and most graduates going overseas to travel or work could afford to pay.

(Electoral) Petrol Shock?

Currently, the most politically divisive issue relates to bowser prices at the local forecourt. Brendan Nelson's budget reply was sprinkled with opposition to many of the means testing provisions, as well as his pledge to cut fuel excise, which is interesting in itself.

Rudd strategy to provide relief is to give assistance in the broader "family" budget and lift the burden through tax and transfer payments. This frees up money to pay for the rising cost of petrol. If you're not a working family though, you're missing out on that end.

Nelson's excise play was openly opposed by his Treasury spokesman, Malcolm Turnbull. He's now fallen into line, but not without some damage to the consistency of the position adopted. I personally disagree on two fronts. The first is that for each cent 'saved' by motorists, there is huge amount of money to be set aside for it in the forward estimates period, that can certainly be spent on infrastructure projects. The other has particular regard to the huge rises in the cost of raw oil, and any potential savings to be wiped out, especially with the sharp rise in the price of crude. The fluctuations, with an increasing trend, would make very little difference.
Then again, if you're not a motorist, you miss out on the relief there. It's being sold as a 'real' tax cut.

Although it feels like we've come full circle on the link between Petrol and by elections. The Age editorialised on 26 April 2002:

A fortnight before the Ryan by election, Mr Howard cut fuel excise by 1.5 cents a litre and cancelled twice-yearly indexation for inflation - at a cost to revenue of $2.6 billion over four years. Then on the eve of the Aston by election, a turning point in the Coalition's fortunes, he launched an inquiry, to report back last month, into fuel taxation and pricing.

Sound familiar? Replace Ryan with Gippsland, and the method of cutting fuel costs. That was the last major change to the pricing of fuel in the country, at least from the government side. The then Howard government also gave back the "Tax on A Tax" by eliminating the GST applied on fuels.

Not surprisingly, the Nationals candidate in that by election, Darren Chester, is 100% in support of that same policy, despite the three corner contest between Labor, Nationals and Liberals:

“Cutting the fuel excise by five cents per litre is a saving of about $3 per tank on the family Falcon and the benefits would flow through to reduced transport costs for industry."

The by election caused by the retirement of Peter McGauran becomes the first test of whether the electorate feels Kevin Rudd has delivered on the style promised on the hustings in November last year. Do families feel that the government has done all within its power to limit increases in grocery, house and petrol prices. The realpolitik comes into play now, and it tests Brendan Nelson in particular.

The other sentiment that may flow through (and I've been waiting for it) is that consumers have to realise that their contribution to stem global warming needs to be paid out of their pockets. Turnbull has even called for petrol to be excluded from the trading scheme. The effects unfortunately don't stop on the petrol side, with the Oz reporting that the European Union has estimated the prices of cars themselves may rise by up to 6%.

Wayne Swan, enjoying the limelight from a budget that was seen a firm but fair, can only look forward to more leadership tension within the Liberal party.

Kevin Rudd appeared on the ABC program Q&A, and was very smooth. It reminds of the UK based TV show called "Question Time" and I think this is where the show will head, as Difference of Opinion fell flat in delving too far into subject material without making it interesting. The format would not have suited John Howard, as I think he would really struggled to keep that slightly petulant side of his persona in check. An ABC audience is not a place where Howard thrived; perhaps that's part of why there was a large amount of control on media appearance and set pieces were always tight.

Rudd on the other hand appeared relaxed and eager to talk, and was open to all sorts of question, some which he dodged very nicely (he must have swotted up), although Tony Jones is going to need to watch that the questioners don't run the show with continuous supplementaries and interjections, it kills the flow.

Hiatus Interruptus

The cobwebs have certainly been growing around here, I'd almost forgotten all about this blog. Reading back over the 40ish posts so far, I can't say my mind has changed. I would not have picked the outcome of the US Primaries, and didn't foresee the long honeymoon that would accompany Kevin Rudd through the first six months of his government, or the dwindling oppositions at a Federal level, Victoria, West Australia, New South Wales, Tasmania and generally low levels elsewhere. The Queensland conservative parties have to make up their minds about merging, and the ACT opposition leader has a very young leader.

So I'm coming back to blogging, and I'll start off slowly, but with a distinctly Australian feel. There'll certainly be more important stories as they emerge on the international front, but depending on their importance and relevance may not be in the same amount of detail.

The apology is in order, but how much will it cost.

Australia recently got something off its chest, an apology for acts perpetrated on its indigenous people, removing aboriginal children from their families and placing them with 'white' Australians or creating them state wards. Many feel the apology it is certainly a step in the right direction, and ends a period where a government flatly denied apologising for something that was not directly doing. Kevin Rudd put it this way:

"We have to remove the great stain on this nation's sould. It's time for fresh ideas for Australia's future."

A change of tack from where John Howard had previously stated:

Australians of this generation should not be required to accept guilt and blame for past actions and policies over which they had no control

It would to unwise suggest that he had no care for the aboriginal people, the draconian intervention in the Northern Territory, to protect many from dangers within their own communities, has started to bear fruit:

Cynthia Watson is one of 100 people who live in the Mount Nancy aboriginal township on the fringe of Alice Springs, one of the towns covered in the legislation. Police and soldiers have replaced town drunks, and Watson, 25, spends her welfare on feeding her four children, aged 2 to 11.

"No more grog means we have fewer fights,'' said Watson, who is camping with her children in Canberra.

There is a place for acknowledging mistakes in politics, and the concensus was heartening, many in Australia and around the world feel that Australia has matured a little after the apology has been given.

When I was younger, I remember listening to a speech in legalese from a QC, who explained that governments are much the same as private companies when it comes to the continuity of its legal form. A change of government does not equate to a dissolution of partnership, but moreso to a change of directors. Hence an admission of past liability does open a government up to legal preceedings. That QC is likely to be offering his services pro-bono to pursue the case: I remember him saying in particular nothing can be done until the governments makes some sort of admission. You'll forgive me for not remembering the the case law he was relying on.

The West Australian Aboriginal Legal Service has already started preparing a test case, which in the case of it suceeding, would today's twenty-somethings paying towards something that did not occur in their generation. The sums being bandied about vary.

Swept up in their goodwill they may have forgotten the consequences of such an admission. Howard surely saw this, and maybe his reasoning for not offering an apology was not only based on his sense of egalitarianism, but also on the future impact of apoligies on the nations' finances. I'm not saying it would be the only reason though.

French Air Controllers in their ivory towers

If there was ever a strike that was completely self-serving and foolish in equal parts, then it would be the French Air Traffic controllers. Not all of them, just those responsible for the Orly airspace. Charles de Gaulles, Beauvais and others are now operating with minimum disruption, but the downstream costs to airlines having to cancel, reschedule flights and breach curfew is costing them big, the passengers finding alternate routes no doubt delighting train operator SNCF.

The dispute centers around Air Traffic Centers of the greater Parisian area being bundled into a single larger operation, eliminating the costly and complex process of switching planes as they pass through the airspace of several towers. Hence, it would be in the interests of passengers being safer and having to pay less through ticket prices for the process. The union at Orly tower is the only one protesting the decision (it is more unionised), but the four other unions involved in representing the other airports have signed off on the amalgamation, after some extensive consultation. The outcome of the plan would be to bring Paris into line with aviation standard practice in large cities worldwide.

Imagine if you were flying from Dulles International (DC) to Logan International (Boston), and be cleared through the airspace of Reagan, Baltimore, Philadephia, Newark,Teterboro, JFK, and La Guardia in turn. Crazy considering the amount of traffic. That's what one union is all for in and around Paris.

Unions can believe in the greater good, a bit of give and take, can't they? Well, the reason the Orly CGT objects to the proposal is nothing to do with job cuts, working conditions or evil corporate bosses: They would not control the union in the new workplace.

School holidays are begginning for many French families, and this will be a further reminder that much power still remains in the hands of few. Often in these cases, the travelling public has an amount of sympathy for employees in the travel industry who exercise their right to strike; they also work.

However, when the puerile reason for the strike is revealed, the goodwill will evaporate quicker than a New Years' resolution. The government would have all the support it needs to legislate the changes forcefully, potentially and ironically putting all of the traffic controllers into a worse position that previously, despite the agreements reached between all the other parties.

So as the inconveniences mount to the travellers, the costs to the airlines, and the risk to passengers, I would urge the Air Traffic controllers to see what's approaching on the radar.

The Archbishop and the Sharia

I thought that I'd go back to first principles when looking at exactly what Dr. Rowan Williams has said with regard to the possibility of sharia law existing within the body of British Law.

The integral speech is available here, and I guess that he is due some credit for raising the issue of Sharia law, and the large numbers of British Muslims. But is the Archbishop straying from his brief if making comment on this? Surely very few in his flock are also Muslims: so why is he advocating on their behalf? The splashes across UK papers, including one headline "What a burkha" have universally panned the speech, reporting and editorialising that the speech was divisive rather than uniting of Britons.

A couple of quotes:

'In The West', writes Tariq Ramadan in his groundbreaking Western Muslims and the Future of Islam, 'the idea of Sharia calls up all the darkest images of Islam...It has reached the extent that many Muslim intellectuals do not dare even to refer to the concept for fear of frightening people or arousing suspicion of all their work by the mere mention of the word'.

So if Muslims don't raise it for that very reason, why did the Archbishop wish to inject himself into this debate?

There is a risk of assuming that 'mainstreram' (sic) jurisprudence should routinely and unquestioningly bypass the variety of ways in which actions are as a matter of fact understood by agents in the light of the diverse sorts of communal belonging they are involved in.

This is where the ire would probably have begun to be raised. Williams posits that a separate body of law, or procedure, should be put together to judge those based on those very communal belongings. It smells of tokenism, and pandering to minorities. Looking specifically at an Islamic example, this can be taken to mean that certain actions would be excusable purely because of a person's identification with the Muslim religion.

Certainly there is a place for leniency, and taking into account all the relevant factors before a judgment is rendered by a judge. They're called pre-sentencing reports, and are compiled after a verdict has been given. These do not defer the progress of a trial from the application of transparent and consistent justice. This is not to mention that many Muslims have immigrated quite legally to the UK in search of a better life. There are sacrifices and benefits from that, and one is to faithfully obey British law.

There needs to be access to recognised authority acting for a religious group: there is already, of course, an Islamic Shari'a Council, much in demand for rulings on marital questions in the UK; and if we were to see more latitude given in law to rights and scruples rooted in religious identity, we should need a much enhanced and quite sophisticated version of such a body, with increased resource and a high degree of community recognition, so that 'vexatious' claims could be summarily dealt with.

So what the Archbishop is asking for is a devolution of decision making away from appointed judges, and into the hands of religious advisory bodies, who would (apparently) be able to make better decisions with regards to questions with regard to religious contexts. I don't suggest the bodies should be banned, far from it. Many seek answers on matters of religion from their own clerics, elders and priests and that right should extend to Imams (and others). I would just as much object that the Synod of the Church of England have to deal with any 'vexatious' issue, with legally binding results. Not surprisingly, the decisions of the Islamic Shari'a Council relating to marriage are not recognised by UK courts.

The problem here is that recognising the authority of a communal religious court [...] would in effect not merely allow an additional layer of legal routes for resolving conflicts and ordering behaviour but would actually deprive members of the minority community of rights and liberties that they were entitled to enjoy as citizens.

So here's the rub. Where would the establishment of these courts be recognised within the court hierarchy? Are they at the very bottom, along with the magistrates' courts, or do they become an alternate court of last appeal, if the subject matter is dealing with Muslim business. My firm belief is that the current system is able to deal with all sorts of different instances. The precedents established are conservative enough to be understood, and argued, but flexible enough to change with the times, and the influx of a Muslim population is just another event to be adapted to. This should not be done through the introduction of a two religion system in the country. The Catholics of the United Kingdom, the Orthodox Jewish population and the Hindu population would all be entitled then to their own 'special' courts, that would only tear further at the social fabric.

I could go on quoting Williams, his speech runs for quite some length. He does not have the same faith I have in the transparency and supremacy of law in this country. I am going to give the final word to Peter Costello, a former Treasurer of Australia, who in 2006 had some advice for those asking for Sharia law to be incorporated alongside Australian law.

The radical Muslim Cleric Ben Brika was asked in an interview in August 2005:-
But don't you think Australian Muslims living in Australia also have a responsibility to adhere to Australian law?

To which he answered:- This is a big problem.
There are two laws there is an Australian law and there is an Islamic law.

No this is not a big problem. There is one law we are all expected to abide by. It is the law enacted by the Parliament under the Australian Constitution. If you can't accept that then you don't accept the fundamentals of what Australia is and what it stands for.

Our State is a secular State. As such it can protect the freedom of all religions for worship. Religion instructs its adherents on faith, morals and conscience. But there is not a separate stream of law derived from religious sources that competes with or supplants Australian law in governing our civil society.

The source of our law is the democratically elected legislature. There are countries that apply religious or sharia law Saudi Arabia and Iran come to mind. If a person wants to live under sharia law these are countries where they might feel at ease. But not Australia.

And the citizenship pledge should be a big flashing warning sign to those who want to
live under sharia law. A person who does not acknowledge the supremacy of civil law laid down by democratic processes cannot truthfully take the pledge of allegiance. As such they do not meet the pre-condition for citizenship.

Before entering a mosque visitors are asked to take off their shoes. This is a sign of respect. If you have a strong objection to walking in your socks don't enter the mosque. Before becoming an Australian you will be asked to subscribe to certain values. If you have strong objections to those values don't come to Australia.

Keating pops up again...speaking ill of the dead.

As an Australian Prime Minister, I hold Paul Keating in reasonably high regard. He was a treasurer who prepared Australia for the 90s and 00s by deregulating vast swathes of the economy and floating the dollar inter alia. He was also highly eloquent, and was not afraid to trade barbs in Parliament and out, dressed in his Zegna suits.

"All tip and no iceberg", "desiccated coconut araldyted to the seat", "I want to do you slowly" are all phrases that have entered the public consciousness thanks to him. Keating's failing, and there's a little bit of it in each of us, is to think himself invincible. His prompt exit from public life after his defeat to Howard in 1996 has made him bitter, and the only time Keating seems to appear is when his own legacy is attacked, or he is attacking someone else's: even if they are on his side of politics. The pithy soundbite became his tool, and he cannot point to any great achievements on his own behalf, or in assisting Australia and Australians since leaving. I always wondered whether he would be proud being remembered, post-politics, as a walking soundbite.

Keating has served up a septic cocktail of old age, vitriol and grudge in flaming Padraic McGuinness. Padraic was certainly an eccentric character, who is difficult to tag with any specific political tag. He's edited the AFR and Quadrant as well as being an economist for a Soviet Bank. Peter Coleman, a former editor of The Bulletin remembers:

You would find him at the anarchist meetings in Whitechapel, probably heckling the speakers, or in Hampstead giving blood for the Vietcong while getting stuck into the communists, or in the pages of Oz magazine ridiculing prohibitionist drug laws and moronic druggies.

I've met 'Paddy' on a couple of occasions, and despite his penchant for black dressing, which I recall had something to do with combining the roles of priest, satanist and confessor, as well as not showing dirt (according to him), found him fascinating. I have to confess that some of the subject matter flew right over my head, and I was forced into the awkward 'smiling and nodding' routine hoping the line of conversation would progress no further.

With some of Quadrant now being online, and widely distributed, it's growing as a literary journal of note. Padraic made sure that there were no sacred cows, whether they were the sacred belief of the left or right, as long as the debate was cooly academic. The material is often inaccessible, and the subject matter obscure. Keith Windshuttle truly came to prominence when he was published by McGuinness, on an alternate interpretation of early Australian settlement and the 'Stolen Generation'. So despite being labeled 'right-wing' like its editor, it was more difficult to classify, as it promoted debate on topics important to the Nation.

Keating of course is a master of timing, and has waited to have the last say before Padraic's funeral. He rants:

In a long public life I have made it a rule never to speak ill of the dead; to not criticise someone who can no longer respond to the criticism.I am going to break that rule in the case of Paddy McGuinness.

I do so for this reason: in the last two decades of his life, McGuinness heaped more vitriol and contumely on me than anyone in public life."Working on the notion that 'the dogs may bark but the caravan moves on', I rarely responded to his unreasonable and unceasing tirades.

So, in that piggy bank of reasonableness, I have a massive store of credits that, in all fairness, I am in a moral position to draw on."

Paul, how childish. Just because you can't defame the dead, doesn't mean you should. You have had the chance to resolve your differences with him for the last two decades of his life, and you've never complained or expressed concern about Padraic's actions in the public domain. Could it be that the complaints you make are unreasonable, and that bravado exterior is concealing a cowardly runt? You've just admitted that your own moral are lacking, by confessing you made an exception in his case.

It's ironic he should talk about banking and pigs. Does he not forget how his personal bank account was allegedly credited from a Darling Downs piggery?

Vale Padraic.

Sarkozy clips Ryanair's left and right wings....Sues for breach of privacy

Ryanair, a highly entrepreneurial airline, has always sailed a little close to the wind with some of its advertising and branding. Like a Costco or WalMart, Ryanair has stacked it high and sold it cheap, amassing the scalps of airlines along the way, such as Buzz, or severely dinting the profits of the so-called 'national flagship' airlines (Aer Lingus, BA, Lufthansa, Air France).
Most famously was Ryanair taking on the BA/Lingus duopoly on travel between London and Dublin. They broke it, and Lingus is now forced to fly small aircraft out of Stansted, while Ryan flies 15 times a day to Dublin.

The airline realises that if you're going to cover your costs (and maybe make a profit!) flying people around, you can have a half full cabin paying high fares or a chock-full paying little. Ryanair has inversed that traveler's addage of "it's not about the destination, it's the journey".

The fact that these cheap fares are available means that air-travel is within reach of everyone, not just those using other people's money to fly. This is not flying to enjoy, but flying to smell the camembert of a true French fromagerie, to taste Guinness at its source or to feel the sand between toes on a Tenerife beach.

Now, there are a few groundings to this seemingly perfect scenario. Critics of the airline (often the scorned full-fare competitors) say: "You pay peanuts, you get monkeys". The critics are correct to some degree. Let's take an example:

If I booked a flight today from London Stansted to Belfast International for Travel on June 2 returning June 16 the fare is 2 pence. Fine but; this does NOT include:

• Taxes of £22.48 and £26.20 for each leg of the trip, which includes government, airport and assorted such as a wheelchair levy (even if you don't use one!): £48.68



• Have a bag to check in? Double whammy! You pay for the privilege of the check-in attendant's time and expertise (£3 per leg) as well as the transport of the bag (£6 per leg): £18



• I won't include Priority Boarding and Travel Insurance in the cost as they are optional extras, but they are available for £3 and £7 a leg respectively.



• Visa? MasterCard? £3 per passenger per leg, Debit £1 per passenger per leg. For a single passenger, negligible, but booking for a family of 5 would make this an extra £30! £6
  Total Taxes and Extras £72.68
  

So you can understand the poor passenger's gripe when a fare is advertised at £0.02, but ends up being £72.70 (taxes included). Nor does Ryanair necessarily fly to mainstream airports. Beauvais is an hour's bus outside Paris, Prestwick is down by the Troon golf course, and Torp is well out of Oslo past snow covered fields, transfers are an extra cost. Nor does the airline offer refunds of any kinds. Nor does the airline offer large baggage allowances.

But, despite the pledges of many travelers to give up the airline because of these differences, money talks. Ryanair is often the cheapeast way to see some destinations, despite the so called 'stealth taxes' imposed by the airline. Ultimately, the customer has everything laid out in front of them, and a final price to pay to their airline. They can still choose to proceed.
Update: After putting this up, I checked the EasyJet equivalent for the same day, approx same flight times, 1 pax with 1 bag, and they came to £51.96, a good £20 cheaper than Ryanair. Competition exists at the low cost end market also, and EasyJet's baggage allowance is 20kgs, to RyanAir's 15kgs.

But ultimately, Ryanair is not competing with full fare airlines. Ryanair is competing with train and shipping lines. Part of a European holiday involving a crossing of either the English Channel or the Irish Sea usually meant bringing along the family car in the hope of saving the (often exorbitant) cost of rental, especially in pre-Schengen days. Now the money saved on flights can be used to rent.

Advertising: Sharp but risky
The longer than expected background brings me to today's news that Carla Bruni and Nicholas will be suing for invasion of privacy. They are seeking €500,000 and €1 respectively, with Bruni's picture used for commercial purposes without payment commanding the largest sum.
Carla's speech bubble says:
With Ryanair, all my family can come to my wedding.
The smart advertising makes the connection between the size of Ms Bruni's Italian family and her imminent wedding to President Sarkozy.

UPDATE 2
Sarkozy has decided to settle for a euro, but Carla Bruni is carrying on the action. Ryanair has offered to donate 5000 Euros. A spokesman for Sarkozy said:

"For the President of the Republic it is a question of principle. As for Carla Bruni, it's her profession, it's her image. She has suffered a financial loss,"he told a regular weekly news briefing.

Francis Taitgen, the Ryanair lawyer has claimed free speech when defending the company's actions. Taitgen said Ryanair agreed to publish the judgment in three newspapers and to make a 5,000 euro donation to charity but he said Bruni should accept that she was in a special position.

"She declares that she comes before you as a model and singer who earns a great deal of money. But this is not the photo of a singer! It is the photo of a woman with the man she loves!," he told the court."When one has the immense good fortune to have glory and fame, one should accept the inconvenient aspects," he said.

But this isn't the first time Ryanair has found itself in hot water over its tack on advertising. Just a couple of months ago, it released a glamour charity calendar with its female staff strutting their stuff in various airside locales.

But that's not all, the airline was also rapped over the knuckles by the British Ads agency over the "Hottest Back to School Fares" newspaper ad featuring a skirt clad young woman exposing quite a bit of skin.

I feel Ryan's biggest faux pas was when they charged a man 18 pounds for use of a wheelchair. The UK Court of Appeal found that Ryanair and Stansted had discriminated against disabled people.

Update 3

Its flamboyant CEO Michael O'Leary, has a few quotable quotes with regards to regulation, the environment and the state of the travel industry:

• On the right to fly: "For years flying has been the preserve of rich fuckers. Now everyone can afford to fly."



• Travel agents: "Screw the travel agent. Take the fuckers out and shoot them. What have they done for passengers over the years?"



• On Ryanair's strict no-refund policy: "We don't fall all over ourselves if they... say my granny fell ill. What part of no refund don't you understand? You are not getting a refund so fuck off."



• On Jurgen Weber, Lufthansa CEO: "Weber says Germans don't like low fares. How the fuck does he know? He's never offered them any. The Germans will crawl bollock-naked over broken glass to get them."



• On co-existence with British Airways: "There is too much: 'we really admire our competitors'. All bollocks. Everyone wants to kick the shit out of everyone else. We want to beat the crap out of BA. They mean to kick the crap out of us."
  

Tidnup has flown Ryanair on a dozen occasions, to Destinations such as Glasgow (Prestwick), Dublin, Edinburgh, Paris (Beauvais) and Oslo (Torp).

Rogue Trader's CV

Thanks to The Deal, Rogue Trader Kerviel's CV is available. I'm not sure if he'll be able to achieve the goal he has set himself now.

KERVIEL Jerome
Jeromekerviel@hotmail.com

OBJECTIVE Reach a position as a retail listed derivative products trader, managing a volatility and Delta One book

EDUCATION
MASTERS in Finance (Organisation and Control of financial markets)University of Lyon, September 2000
Bachelor Degree in Finance University of Nantes, 1996 1999

WORK EXPERIENCE
Societe Generale S.A., Paris, France Trader and Market Maker for Delta One Products March 2004 - Today
Trading : Market making of Listed Delta One products
Including open end and closed end Turbos (Single Stocks, Index, Forex and Rate Futures), ETFs and secondary market for Certificates
ETFs structuration - Management of the collateral with Lyxor Asset Management
Development of managing tools (Excel VBA macro)
New Underlyings Study to develop the product range
Participation to the specification for the implementation of turbos to the Clickoptions platform

Societe Generale S.A., Paris, France Trader Assistant - Basket Trading and Delta One Products
August 2002 - February 2004
Valuation and Risk Analysis explanation for Basket Trading (Single Arbitrage book) and Delta One Products
Strategies Backtestings
Short positions hedge
Process automation and managing tools development

Societe Generale S.A., Paris, France
Middle Office - Referential Team August 2000 - July 2002
Products modeling
Process automation
Excel macro Development for the exotic Desk
Participation to the single referential project

ACTIVITIES
Judo - 8 years practice -
Trainer for children's Sailing

SKILLS
English : working language
Microsoft Office Package - Visual Basic
Licensed for EUREX, XETRA, EURONEXT

The Return of Il Cavalieri?

Romano Prodi's fragile government crumbled yesterday, with the Italian Senate affirmatively voting on a motion on no-confidence. Prodi's thin majority was built on a fractured coalition, and government after his victory over Silvio Berlusconi last year was not expected to be smooth. Just look at the makeup of it:

Mr Prodi's Government, made up of nine parties ranging from Communists to Catholics, was Italy's 61st in 63 years. If elections are held, Mr Berlusconi's opponent on the Left designated as Mr Prodi's successor will be Walter Veltroni, the Mayor of Rome and leader of the new Democratic Party, a fusion of former Communists and liberals.

No surprises then, that Silvio is throwing his hat back in the ring:

The Centre Right popped open champagne bottles last night, with Silvio Berlusconi, the opposition leader and media tycoon, exclaiming jubilantly: "To the ballot boxes!" He predicted that the Centre Right would have a great majority, adding: "The country needs a government that works".

The President, Giorgio Napolitano, now faces a difficult balancing act. He will now consult with the leaders of each of the parties in the parliament, to see if he can string together a coalition from what is available, but Prodi has already ruled out continuing in a prime ministerial capacity.
Both left and right have generally been in disarray since the vote, the former unable to quite grasp they have effectively lost government, and the former fighting amongst themselves to position their different parties as the forerunner of a victorious coalition.

The President would also have the ability to have a caretaker government administer the country until a referendum on electoral reform is held; I think is the cause of all the troubles in the first place; specifically Proportional Representation (PR). Ironically, it was Silvio who converted Italy from a mix of first past the post and PR to full PR for the Chamber of Deputies.

We'll see what happens in the next week or two.

Which UK bank will reveal a Rogue Trader?

UK Banks, their shareholders and the tri-partied supervisory regime will be bracing for the possibility that a financial institution within the UK has its own Rogue Trader problem.

The ripple effect of SocGen's problem will be for the risk management teams to get together with the auditors, and ensure that each of the trades made have a genuine closeout. That is, for every buy order closed, there is a genuine seller and vice versa. I think the key to Jérôme Kerviel's deception is that he knew exactly how to bypass the existing systems (he'd worked in the back office after all), or that the 'error' account was getting a workout. Nick Leeson, knocked one spot further down on the Rogue Hall of Fame, was famous for using account number 8888 to bundle his mis-trades into.

That same ripple effect will be onto the size of these accounts, and checking that there has been no collusion between institutions and their clients. One of the favourite methods goes as follows.

Share trading at $5
Trader sells shares to client at $4.50
Client sells shares at $5 for 50c profit.
The profit is split between the two parties, the insider getting it paid into an offshore account.

This can easily be written off as mistakes, oversights, or 'fat-button' trading. As banks start to account and assess their books and the risks that accompany it, who will be the first to write off?

With the UK being home to several multinational banking companies, who operated in much the same markets as SocGen. But if this can happen to SocGen, the undisputed market leader in derivatives trading, it can happen to anyone. Who in the UK will put up their hand first?

To prevent such further occurences, you need only look at the Chinese Walls regulations that prevent information from flowing from its advisory divisions to its proprietary trading desks. Ie, in advising a company that is making a takeover, information should not be passed to the traders.

In this case a new Chinese Wall, perhaps call it a Jérôme Wall in honour of the man of the hour, should be applied by market supervisors and legislators to ensure greater independence between the trading and backroom/settlement. This should assuage the minds of those who are afraid of Trading Loss Risk, by reducing it.

Update: Fat Button Trade
Financial News online has a countdown of some very funny "fat finger" trades. Genuine mistakes, but rather costly. My favourite is rugby related:

Heads up at Bank of America, September 2006
Not so much wrong-fingered as wrong-balled.

A Bank of America trader’s keyboard was set up to execute an order when the senior trader gave the signal – he just had to press enter. However, he failed to notice an errant rugby ball thrown in his direction, which landed on his keyboard and executed the $50m trade ahead of schedule. The ball thrower, a graduate trainee, was given a severe reprimand but no further action was taken.

Another trader said: “Rugby balls are a regular danger on any trading floor so the victim trader ought to have hedged against this possibility.”

Trader had family problems

According to the AP:

Managers who briefed Union officials on Thursday told them that the trader was having "family problems." The union official said the trader "might have lost his mind a bit"

One of his former teachers, Gisele Reynaud, described Kerviel as a "brilliant" student. She taught him at a university in Lyon, where he graduated in 2000 after an intensive year-long course in how to track, monitor and keep account of the type of trades that he went on to do at Societe Generale. She said the course was very technical and intense, and included accounting, information technology and law. "He was a nice guy," Reynaud said. "He was brilliant".

Rogue Trader's Mugshot

Well, we know what he looks like now, and that he was on a salary of around 100,000 Euros, bonus included, and that he didn't enrich himself in the process. With thanks to the FT for the shot.

Update:
Also we know that he completed a Masters of Market Finance (specialising in Market Operations) from the Lyon 2 University in France, and has been employed as a Trader at Delta One Products, a SocGen subsidiary since 2000. (from a Wink.com search)

Update 2: Again from the FT; Jean-Pierre Mustier, Head of Investment Banking at SocGen on how he did it:

Jean-Pierre Mustier, head of investment banking who had been seen as a potential successor to Mr Bouton, said the position occupied by the rogue trader was only expected to generate €20m of revenue a year. “The specific pattern of his transactions was that they used fake transactions rolled on a permanent basis,” said Mr Mustier.

Société Générale cops the Rogue Trader...to the tune of 4.9 Billion Euros

Société Générale this morning alerted the market that it had lost a significant amount from the actions of a Jérôme Kerviel, rogue trader....the words that send a frisson down the spine of any Hollywood producer, good ones. Less good frissons may be felt of those who worked around and above the as yet unnamed trader; people responsible for his oversight have also been relieved of duty. The trader has, according to a letter from the President of the SG group, been "mis à pied" (stood down).

Before we analyse this latest, let's take a walk down Rogue memory lane, and count the cost of each:

• Brian Hunter; Amaranth Advisors LLC: After studying weather patterns and other data Hunter, Head Energy Trader, made an enormous wrong-way bet that a Katrina-like hurricane would cause the difference between summer and winter natural gas prices to widen dramatically.Instead, a mild hurricane season caused that spread to collapse, wiping out about US$5 billion in value.
  
  Speculation is that Amaranth may have conducted most of its trading away from the Nymex in a bid to "corner" the long contract on natural gas futures. Regulators don't have the same amount of reach in Over the Counter markets as exchanges.
  
  
• Nick Leeson; Barings plc: Probably the most world famous case, inspiring a novel and movie. Leeson placed a short straddle (essentially betting that the Japanese stock market would not move significantly overnight) on Singapore and Nikkei exchanges. However, the Kobe earthquake hit early in the morning on January 17 1995, sending Asian markets, and Leeson's investments, into a tailspin.
  
  Leeson attempted to recoup his losses by making a series of increasingly risky new investments, betting the Nikkei Stock Average would make a rapid recovery. But the recovery failed to materialize, and he succeeded only in digging a deeper hole. Losses eventually reached US$1.4 billion, twice the bank's available trading capital. Barings declared insolvent, and sold to ING for the princely sum of £1.
  
  Sentenced to six and a half years in a Singapore prison, he was released in 1999. In 2005, soccer team Galway United FC named Leeson its General Manager. That same year, Virgin Books published his personal story/self-help book, titled "Back From The Brink, Coping With Stress."
  
  
• Yasuo Hamanaka, Sumitomo: Hamanaka was also known as "Mr. Five Percent," according to the New York Times, because he once bought as much as 5% of all the copper traded in the world each year. He pleaded guilty in 1997 to hiding more than US$2.6 billion in trading losses and served seven years in prison. Copper futures plunged in 1996 after it was discovered that Hamanaka had artificially propped up prices.
  
  
• John Rusnak, Allied Irish Bank: Rusnak lost millions for Allfirst Financial, an Allied subsidiary, by incorrectly gauging the movement of the Japanese yen against the dollar. He forged paperwork to cover further trades and losses he says he incurred in a failed attempt to win the money back for Allfirst, based in Baltimore. He lost US$691 million over five years before his activities were discovered in 2002.
  
  
• Unknown “fat-fingered” trader, Mizuho Securities: Trader sold 610,000 shares in job recruiting company J-Com Co. for 1 yen apiece, instead of an intended sale of 1 share at 610,000 yen. Mizuho said it was unable to cancel the order, causing it to lose about US$340 million. The mistake was attributed to the “fat-finger” syndrome, shorthand for gaffes made when traders hit the wrong button on a keyboard and lose a bundle.
  The Tokyo stock exchange later acknowledged that a glitch in its system made it impossible to cancel the trade. Mizuho and the exchange have discussed sharing some of the losses, but have so far failed to reach an agreement.
  
  
• Nelson Bunker Hunt and William Herbert Hunt bought more than 100 million ounces of silver bullion in 1979 and 1980, causing silver prices to soar to a record of more than $50 an ounce before a sharp plunge. After the crash, the brothers were left with silver obligations of $1.75 billion and a silver hoard of 59 million ounces valued then at $1.2 billion, indicating a loss of US$550 million, according to the Journal. The Hunts, whose fortune was once estimated at $6 billion, filed for bankruptcy protection in 1988.

So if that's a hall of fame of the worst of financial trading losses, then this is a pretty bad one. I would suspect that he had a good working knowledge of the back room operations of the bank, and the exact limits on trading so that he could really make the most of his position. Although the bank has been batted around by the credit crunch, it has plenty of assets against which to increase its working capital, borrowing to "more than cover" its recent losses due to the activities.

Fitch has dropped its long term issuer rating from "AA" à "AA-" estimating that if the the fraud has happened in specific circumstances, it "raises questions on the effectiveness of (risk management) systems and creates a reputations risk for the company. S&P has will be reviewing its rating with a view to downgrade.

Update: His name is Jérôme Kerviel. More from the Wall Street Journal:

The bank identified the trader as Jerome Kerviel. Mr. Kerviel, 31, joined Societe Generale in August 2000 and was working as a trader on the futures desk at the bank's headquarter near Paris. He was in charge of futures hedging on European equity market indices, known as "plain vanilla" futures.

The bank said he was able to dupe the bank's own security system because he had inside knowledge of the control procedures gained from previous jobs with the bank. (Backroom knowledge pays in this case)

Though Societe Generale says it first learned of what it termed "massive fraudulent directional positions" on Jan. 19, it waited until it could close out those trades before going public with the problem. Winding down the trades, the bank said, resulted in a €4.9 billion write-down, making it potentially the largest loss ever from an alleged rogue trader. (Those recent equity market falls would not made the positions any smaller).

Star Power for Obama...

His warm-up acts came straight from the A-list: the singer Usher, the actress Kerry Washington, and the actor Chris Tucker. They walked on stage to deafening cheers. But they were here not as performers, but as recruiters for Saturday's primary.

He's really concentrating on making sure that his supporters turn out, especially youth who could be considered apathetic.

Can Gordon Hack the PMQs bear pit?

via Mike Smithson at PB.com

According to a report in the Independent yesterday Gordon Brown is telling friends that the public is being increasingly repelled by PMQs and that the Commons exchanges are now of little use in discussing the issues of the day. He’s reported as saying that “nothing prepares you” for the ferocity of a packed chamber in full cry” and that the weekly event is worse than it has ever been.

Tony Blair was a PMQ master, complete with his 'plastic fantastic' tabulated folder. If the answer didn't happen to be there, he just batted it off or made reference to the Tories' time in London. Brown's eyesight makes it difficult for him to use the same folder system, and maybe he isn't completely comfortable with the opposition benches vocally baying for his blood on a weekly basis.

However, if Westminster is the Mother of all parliaments, and the UK the greatest democracy, then the least that can be expected is vocal opposition in a healthy debate over the country. PMQ is also one of the few times that the Lib Dems and Tories can get traction on issues, such as the consistent Northern Rock question from David Cameron in the last couple of weeks. It can backfire though, as a PM on fire can really give heart to his MPs before they go home to their constituenties.

Although with the polls giving him a landslide loss, you could be forgiven for not wishing to front.

Update:
Here's a snippet of the "packed chamber at full cry".

Les 400 coups, or 314 of them?

In the movie "Les 400 Coups", a youngster played by Jean-Pierre Léaud is disowned by his parents and thrown into the state juvenile system for his crimes. "Les 400 Coups" literally translates as the 400 Blows. Today saw the leaking of a document prepared by Jacques Attali, a former advisor to Francois Mitterand, with 314 ways to "unleash economic growth" in France. Sounds good doesn't it?

To Bernard Fixot, the editor of this review who hoped that it would be launched in book form before being pre-empted on a news website, the leak was considered "Theft, concealment and forgery". Especially when it was to be launched amid great fanfare, and make some money for the (hard copy) publishers. That doesn't relate to the content though.

Mitterand once described Attali, the author of said report thus:

“I don’t need a computer; I’ve got Attali.”

The words of a past advisor to a socialist president wouldn't encourage great confidence in the majority of sitting MPs. However, he has come up with some good ideas to modernise France out of its (well earned) reputation for being a nanny state, and failing to make improvements in areas such as the public sector since the second world war. Despite the good idea, there is no 'mode d'emploi' (user guide) to go with the suggestions. The implementation is thus left up to the current Government, whose Prime Minister is now outpolling the President in terms of popularity.

Oh yes, and even the author has a bearish outlook on the state of the French economy:

“France remains very largely a society of connivance and privileges”, Mr Attali says, in a leaked draft of the report.

Some of the key suggestions include:

• Each child should have mastered French, English, the three Rs, Information Technology and the ability to work in groups by the time they complete their first year of high school.
• 10 centres of excellence for higher learning and research to be established around the country, as well as having the means for France to become a leader in fields to matter in the future.
• Link together towns and suburbs known as 'Ecopolis', integrating green and communications technology.
• Very high speed Internet for all, whether at work or at home.
• Reduction of old departements administrative set-up into more regional structures, and urban councils.
• Freeing up retail business to trade on their own terms. It is illegal to affix the word "Soldes" (sale) unless in the government mandated period. This is crazy.
• Freeing up quotas on taxis, hairdressers, vets and lawyers. A bit of competition would only benefit consumers wouldn't it?

Less bureaucrats, more flexible workforce, less waste. The suggestions also seem to rebalance the immense tax burden that is place on those in the private sector who subsidise the benefits, conditions and retirement of those who work in the public; a polarising gripe considering how large the layers of bureaucracy make the French public service. There will be a summer of discontent and riots if this plan is implemented too viciously, and the French will be up to their old tricks in taking to the streets.
Sarkozy is still acting on the strength of the mandate he garnered in his own election, and that of his parliamentary colleagues. He is acting, because he can see the fabric of the nation fraying under the weight of its generosity, built up over the post-war generations.

The final word goes to Marine Le Pen of the National Front (remember her father Jean-Marie?) tagging Mr Attali as Attila (boom boom):

"because this is a precise and organised plan for ensuring the death of the French nation as we know it”.

You know what, she's absolutely right. The French nation as it is cannot continue to survive: it must follow the Darwinian philosophy of evolving or dying.

Update: Sarkozy's Parliamentary Majority is 314. Coincidence?

Cabotage: Sabbotage or Sage?

Is the Australian government showing its first signs of shifting left, despite its promises of economic conservatism?

KEVIN Rudd will clamp down on overuse of foreign-owned ships to transport freight around the nation's coastline in a bid to bolster the shipping industry. The Prime Minister is also set to require foreign vessels in Australian waters to observe an International Labour Organisation convention guaranteeing fair pay and conditions for all seafarers. In a shift in approach from that of the previous Howard government, Labor will review coastal shipping laws to uncover ways to lift the domestic shipping fleet's share of the domestic freight market from its current level of about 80 per cent.

The last I remember of the ILO was when they scuttled attempts to man the wharves in Australia with non-union labour, circa Peter Reith and the early days of the docks crisis. The Maritime Union of Australia, at the time on the receiving end of those reforms, will certainly be the main beneficiary. Paddy Crumlin, the MUA secretary was certainly excited after meeting with Albanese:

"He said we'd be going back to the platform."

The platform in question consists of some ambiguously worded resolutions from last year's Labor national conference. My concern here is the inflationary effect of higher wages on the dockside (and at sea) being passed on to consumers and aiding inflation which is already rising. It is of such concern that the former Razor Gang could now be renamed the Axe Gang. Furthermore, as foreign operators are locked out of operating domestic cargo routes, a regime of quasi-protectionism begins to appear. Cabotage is not a good policy for a government that had promised to be freer of union influence than its predecessors, and this looks suspiciously like payback.

Explanation of Cabotage: The right of a country to operate internal traffic, especially air traffic, using its own carriers and not those of other countries

Update: Preview Clip from the ABC(AU) dramatisation of the events on the waterfront.

Hillary Wins again...Bring on South Carolina

The New York senator had 51 percent of the vote to Obama’s 45 percent, with nearly 90% precincts reporting. Edwards faded to a distant third place with 4 percent of the vote.

The holding of the Casino Caucuses have been a real dog fight. Firstly agreed month ago by the Democrats, only to be challenged in court by supporters of the Clinton camp after the endorsement of the the 60,000-member Culinary Workers Local went to Obama. It was also the first time we saw Bill Clinton loose his cool on the campaign trail, specifically with regard to that lawsuit.


You'll have the South Carolina results soonish...I'm not going to pick between John McCain and Mick Huckabee.

Best of (other) Blog

Thought I might include some of the better blogs that I've come across my time on the interweb, and since I'm not explicitly commentating on politics myself, I've filed under non-political. It's also an exercise in waiting for the Democratic numbers to come through!
The criteria I've tried to judge by are:

• They are not the output or comment blog of a print/tv/radio outlet


• They occasionally morph into newsmakers, rather than newstakers (which this site truly is)


• They have something that distinguishes them from other, and are thought provoking.

Of course, you'd need to rank them across the political spectrum and by country. I've forgone the use of conservative, liberal so as not to confuse the readers from Australia. So:

US Left
Daily Kos: Particularly remembered for comments from Bill O'Reilly who declared that Satan was running the Kos, and that readers of such 'far-left websites' are devil worshippers. If Bill says it's that bad, it must be good.

The Huffington Post: Since its inception in 2005, by Arianna Huffington, this has blossomed into a must stop for left-learners, with many heavy hitters and celebrities, as well as a core group of regulars make it worthwhile reading.

US Right
The Drudge Report: Although missing the punch for big stories that appeared (such as the Newsweek's' withholding of the Lewinsky story), there are still little nuggets of gold on a site that is very 'link heavy', and a little difficult to navigate (Thank god for tabs in browsers, I still keep heading back there).

Power Line:A triumvirate of lawyers press the conservative cause here, with Time Magazine's Blog of The Year award, and there is always interesting content, some which may feature here by link. No long winded personal rants here, it's pretty succinct and crisp. These guys aren't soft on Republicans either, and will call them for working against America and its interests

UK Left
Recess Monkey: Parliamentary Insider's blogs, that always has the who, what, where, and how of apparently anything that moves inside and around the Palace of Westminster. Although previously not allowing comments to focus on their output, they've opened up the blog, and have "interesting" photos of MPs at events.

Newer Labour: Simple blog advocating how a post Blair Labour party should advance, which will be particularly interesting when the election really starts to get on the boil. Interesting links from someone who clearly has an insight inside. Self described as Labour's soft left.

UK Right
Guido Fawkes (Paul Staines): In his younger days, the now unmasked author of this blog described his politics as 'Margaret Thatcher" on steroids. A critic of the cosy relationship between media and politics, he often obtains documents from political insiders, such as Peter Hain's leadership documents.

Conservative Home: Although not official Conservative fodder, this does give coverage of UK politics from a conservative perspective, with lots of extra policy material and updated regularly, you do get a flavour of politics from the right

AU Left
Larvatus Prodeo: I would have put Red Rad in here, had it not retired in 2005. LP is a broad and broadly inclusive and occasionally cutting blog, with many contributors, who all think before posting, which makes a change from other blogs on the interweb. I might fail on that criterion right there.

John Quiggin: An older statesman of the blogosphere, Quiggin's insight into economics is not to be sniffed at. You can find him in the AFR, but the blog is certainly seperate, and it's not always serious, thick and boring (as far as economic commentary goes)

AU Right
Andrew Landeryou: Shaming the nameless, and naming the shameless. Landeryou takes his readers through an American prism of commentary on Oz Politics, never short of patriots, traitors and hacks. Interesting relationships with university pollies haven't stopped his ability to scoop, or his distaste for left MSM.

Tim Blair: What hasn't Tim Blair done over the last few years? Opinion editor for the Telegraph, Bulletin opinion writer. He won't be blogging for a while, as he's going under the knife for abdominal cancer. Maybe the surgery will mellow him out? His painkillers at one stage allowed him "to watch Al Gore's Inconvenient Truth without twitching." I wish him all the best.

Romney Wins again....Democrats Counting

Romney takes gold again, but other candidates had gone to South Carolina, where delegates are automatically awarded to the winner, this not being the case in NV:

“Today, the people of Nevada voted for change in Washington. For far too long, our leaders have promised to take the action necessary to build a stronger America, and still the people of Nevada and all across this country are waiting. Whether it is reforming health care, making America energy independent or securing the border, the American people have been promised much and are now ready for change.”

Counting for the Democrats has begun: Hillary and Barack neck a neck with 6% counted. Results as they come in available here

Horse Trading and Brokered Conventions

Ruth Marcus in the Washington Post ponders what the outcome of Super Tuesday would make towards the respective conventions to be held in Minneapolis/St Paul for the GOP, and Denver for the Democrats.

We're reminded of 'The Superdelegates' (hell of a title to have), and their impact on the nomination of Walter Mondale:

There was just one glitch: Mondale was about 40 delegates short. Hart had won California; even worse, Mondale had not done well enough there to pick up as many delegates as the campaign had counted on. So frantic Mondale aides hit the phones to the superdelegates. These were the Democratic insiders who had been given a big new voice in the process, a change to party rules engineered by Mondale backers anticipating the need for just such a firewall. Mondale managed to pull it off that day.

Although John Edwards may be out of the main game, by picking up the rudimentary amount of delegates with 15% of the vote, he can have significant sway as to whom these votes will flow to. A stronger than expected vote for Edwards could mean the end of Hillary, and by that I mean off the ticket.

Edwards and Obama have acted in unison of late, particularly in the New Hampshire Debate, where they both took debating potshots at Hillary, while defending each other slightly. If Edwards had to choose to park his delegates with one of the front runners, it would certainly be Barack. Note that when a candidate withdraws, their slate of delegates is no longer bound, but the recommendation of the person they were originally bound to vote for would hold a lot of sway.

Here's where the horsetrading becomes interesting. It is not implausible for a gentleman's agreement to cut Hillary out. Edwards delivers his candidates to Obama, and Obama, obligingly, invites him to run for Vice-President on his ticket. The task is now especially difficult for HRC, as she is competing with an electoral beast with two heads. Taking on one of the remaining candidates leaves another to creep forward, with complacency not achieving anything. Hillary's results on Super Tuesday are hence vitally important, not only for keeping her competitive, but to see off the other two

This opens up a further hypothetical, of whom Hillary would select as her vice-presidential running mate. If there is bad blood between the trio, HRC may select outside, bringing into the range the possibilities range Kuccinich, Richardson and Biden. Which raises another question; just how important is the quality of a VP candidate on a ticket, and if the scenario follows, it be a "HILLARY CLINTON/candidate x" campaign.

Back to the Superdelegates, who account for one-fifth of the votes on the floor and are made up of:

• All Democratic members of the United States Congress
• Democratic governors
• Various additional elected officials
• Members of the Democratic National Committee

Clinton currently leads the list of congressional endorsements, and could play havoc with the strange goings on discussed above. Legal challenges from states that have had their delegates 'unseated' could also play. Can't say the race is boring anyway.

As for the Republicans, well, Michigan's results hasn't helped anyone sorting the proverbial from clay. Writing before the Michigan vote, Peter Baker of the Washington Post gets caught up in brokered fever:

If Romney wins his home state today(and he did), then the first three major contests will have produced three winners after former Arkansas governor Mike Huckabee's victory in Iowa and McCain's triumph in New Hampshire. Even if McCain wins today in Michigan and manages to keep the momentum rolling into South Carolina on Saturday, Rudy Giuliani waits in Florida, and if the former New York mayor wins there on Jan. 29, the Republicans could head into Super Tuesday on Feb. 5 with no clear front-runner.

I've also come across delegate widgets from socialmedia.biz via my direct democracy, I find them quite handy! Get your own here
Note the Democratic counter exclude those superdelegates.