Who caused the credit crunch?

Out-of-control lending practices? Materialistic borrowers? Ineffectual regulators? Meddling politicians? Nope!

On Hallowe'en, it seems faintly appropriate to relate that according to a High Prophetess of Pentecostalism, it was that bad ol' Devil. He caused the market collapse in 1929, and he wants to cause another. God, of course, wants to stop this, but presumably can't or won't do squat unless we twist the Almighty's arm. Perhaps it's union rules, I dunno.

Anyway, the lunacies in this clip are manifold, and I wouldn't have the time to go into it in detail. Suffice it to say that appearing on Pat Robertson's 700 Club (I think that's how many of his "prophecies" have gone wrong) and talking about repentance for greed would have made my irony-meter blow up, had it not already been in for repairs after reading that Mr. Christian Voice told the BBC that people don't like being preached at. Ironic, eh?

Thanks to Spike at the BHT.

And they call it "science journalism"?

There's a piece of hard-hitting journalism in today's Independent, which breathlessly informs us that scientists can now "prove" that climate change is man-made. Now, I'm well persuaded that on balance, climate change is occurring, and it finds a part of its cause in human activity. I'm even willing to stick my neck out and say that I reckon it's probably more us than not. But any scientist who understands what he's doing will know that he can't "prove" anything of the sort. The best he can do is to say that he is n% confident that a specified human activity has contributed to warming, or something like that.

And in this instance, they may not even do that well. The study cited compared models with experimental data in order to arrive at its result. Yet just because the data fit a particular model, we can say nothing for sure about whether the model is appropriate or correct. In mathematics, this is a known phenomenon. Of course, in science we can give an idea of confidence as to whether the model is appropriate, but this is always contingent, uncertain and within error bounds.

Given that so many of the climate change sceptics are well-versed in all of this, I think it rather behoves "science journalists", who should know better, to be as penetrating, as inquiring, as challenging of the scientists whose work they cover as political journalists are of their own particular focus. Until that happens, will it be much of a surprise if there remain sceptics who complain bitterly about the way the evidence is presented to us?

Well, well, well…

I just discovered Nick Clegg will be on campus this evening, holding a public meeting. But, if I have the chance, what will I ask?

Talk about walking into a man-trap!

On Obama's half-hour advert, run in the States very recently,

McCain spokesman Tucker Bounds seemed to hint that the ad, in itself, was well put together.

"As anyone who has bought anything from an infomercial knows, the sales-job is always better than the product. Buyer beware," he said. (BBC)

Of course, if he makes this complaint too strenuously, then he risks coming across as saying that the McCain campaign's marketing has been worse than the Obama campaign's because the product could well be worse.

Snow leopard wins top photo prize (BBC)

I'd have thought cameras were hard to use without opposable thumbs.

Here's the link, with the winner and four quite amazing runners-up.

UN supremo urges Congo to reverse 'collapse'

Independent.

He also told a cake to un-bake itself, three dead ducks they really ought to try flying, and informed the Universe that the Second Law of Thermodynamics is on hold. Obviously, grit and determination from Congo itself are a necessary condition, but might it not need just a little help from outside, too?

Merchant navy: in dry dock?

One under-reported effect of the refusal by banks to trust each other is the inability of international shippers to get letters of credit. It's akin to the old-fashioned way that merchants used to operate, as Yves Smith of naked capitalism explains:

For those new to this topic, international trade depends to a large degree on letters of credit. While they can help finance shipments, an even more fundamental role is that they assure the shipper that he will be paid for the cargo sent. Without banks using letters of credit as the means to send payment to exporters, parties that are new to each other or conduct business with each other infrequently could never trade with each other. [1]

In other words, the collapse of the Baltic Dry, the standard index for measuring international shipping trade, is a direct effect of the credit crunch and not purely demand-driven. Given that no country (except possibly North Korea, which is hardly a beacon of pretty much anything these days) is entirely self-sufficient in all that it consumes, a collapse in world trade will not only affect consumption of vital necessities like food, but also manufacturing, which will affect jobs.

It's possible, of course, that credit will get moving again before these effects begin to show up seriously. Most countries and regions should have food stocks, and manufacturers can survive some time by giving their workers "hibernation orders", as one factory did recently. But if things carry on too long, then the effects will be serious, and it may perhaps be no exaggeration to say that what could be a simple recession could deepen into something worse.

[1] Source; see also, and also Alphaville.

Teehee!

Hedgies have lost, apparently, billions on Volkswagen as they went short but witnessed the price spike up due to a 'short squeeze'. The BBC reports that what might have happened is that

because Porsche had not declared the proportion of VW shares it controlled, traders may have been indirectly and inadvertently borrowing shares from Porsche, selling them to Porsche, buying them back from Porsche and then returning them to Porsche.

The FT reported, only a week ago, that Porsche was denying all reports of stock-lending. But surely they must have done: it would be a stroke of sheer evil corporate genius. Basically, you would do something like this.

To begin, you will need a large amount of cash and a sizable chunk of the target company, and you need to be pretty sure that there's going to be some serious short interest in it. Oh, and you need to keep the whole thing quiet, or the plan's blown.

Now you lend the stock to hedge funds and other interested traders, who sell it on the market. You make sure that you are the one buying the stock off them, so that each time you do this deal, someone owes you a share in your target.

Repeat step two until the money runs out. Seriously: you can keep "buying" the company beyond the 100% limit this way.

Once the money runs out, call in the hedgies' obligations. They'll start scrambling around, buying all the shares on the open market and sending them your way to repay the share debt they owe. The price will shoot up as a result.

Eventually, they will have exhausted the open market, and the only person left with the shares is you, but there are still share-debts left to pay to you. At this point, you just drip shares into the market, and hedgies start paying you, at vastly inflated prices, in order to give the shares back to you.

Laugh maniacally as you have just managed to pull off one of the greatest bank heists ever, wreck half a dozen hedge funds, and buy an entire company on the cheap and quiet into the bargain. Observe to yourself that not even a Bond villain could carry off such a nefarious scheme. And then chuckle as worried companies start to think seriously about moving their listings from Stuttgart and Frankfurt to London and New York, where the rules about transparency would stop anyone from managing to pull off a stunt like this.

The interview that we ought to hear

To set the scene, imagine switching on your radio at breakfast (yeah, I'm a student) and hearing John Humphrys: it's the Today programme. I shall give only the interviewer's side of exchange.

"It's ten past eight, and I've got John Humphrys in the studio. Mr. Humphrys, why is it that banal village-pump BBC politics so frequently manages to get the prime slot on Britain's premier radio news programme?

"But Mr. Humphrys, with respect, you're not answering the question. There is important news to be reporting on, and you're wasting time on two idiotic comedians who think it's funny to make disgusting phone calls to a retired actor? Get a grip!

"No, Mr. Humphrys, I'm not taking a view on their actions, I was merely explaining the view which you evidently take, since you think what they did was so stupid. And it's not the first time this kind of thing happens. Aren't people entitled to take the view that these two don't deserve the oxygen of publicity?

"Well, so you say. But does the BBC really think that it's an edifying exercise to air its laundry in public like this?

"It was the BBC which first broke this story. Is it really the case that you're so strapped for serious news you have to broadcast rubbish and then report on the inevitable outcry?"

The wasteful West?

Goodness knows, I'm scarcely favourable towards Spiked's "denialist" attitude towards climate change, but a map like this really does illustrate the dilemma which we face, and which Spiked does point up vociferously.

On the one hand, green activists will argue that our use of resources is dangerously high, and when you consider that there are only 2.1 hectares of land per person but our use of resources is equivalent to 5.3, you can see their point. Poverty campaigners will add to this that it is inequitable in the extreme. But on the other hand, the environmentalists' call to cut down and cut back does tend, as Spiked point out, to sound like simply misanthropy, as we don hairshirts and refuse to allow the Third World to share in the benefits we have enjoyed.

There are economic reasons to suppose that restraint is probably not a good idea—perhaps most clearly, the resounding success that was rationing—but the moral case for keeping the poor poor is even harder to sustain. While it is granted that a wasteful use of resources needs to be dealt with, the truth is that "wastefulness" is a relative concept: we are less wasteful than we used to be, and probably more wasteful than we shall be. Development of improved technologies will not only help the developed world, but also the Third World, as the benefits of our standard of living can be exported across the globe at a lower cost to the environment and at a lower cost to the recipients.

I'm not calling for us to adopt the posture of a Pollyanna, but I think there are two things the environmental movement could do its profit. The first is to evince a little more positivity about the potential for progress in these areas. The second is to recognise the misanthropy which genuinely does exist at the lunatic fringe of their movement (eg, eg), and to condemn it without reservation.

PMQ, 29-Oct-2008

Mr. Speaker, the Prime Minister may like to know that BP made £6.4bn in the third quarter of 2008. Does he welcome this success of British industry working overseas, and does he welcome the increased revenue this will result in for the Exchequer, especially in the currently straitened circumstances?

That's in response to the Labour MP who complained about BP's profits. Today's PMQs was exceptionally boisterous, and in leaders' questions, the PM basically refused to answer any questions from either the Leader of the Opposition or the Leader of the Liberal Democrats, except for the very last when Cleggy appeared to have drawn blood. I thought Cameron also landed some pretty hefty blows. The PM was, of course, far more informative for the backbenchers' questions.

Family Service talk, Wordled

I leave guessing the passage as an exercise for amusement.

The big question is, does it meet any of the standard tests?

Uncanny!

It would seem that Top Cat is alive, well, and ministering to a Lutheran church in Bridgeville, PA, under the pseudonym "Don Matzat". And he's doing rather well at it, too.

Now then, now then!

The Wikipedia article on the Reformed Church of France contains the following "gem".

The current Reformed Church profited from liberal currents in reformist theology including, pietism, neo-Lutheranism, Methodism, social Christianity etc.

Well, Mr. Wikipedia, I beg to differ. So I changed it.

From the Grauniad

Polly Toynbee tries to argue that if people won't spend their money, then it's the government's job to spend it for them. What we need, apparently, is our very own FDR. May heaven preserve us from any such fate; the last thing we need is to add a fifth "freedom": "Freedom from Responsibility."

Also, a new section opens up, allowing commenters to vent spleen in a controlled environment. Yes, the Guradina now has an entire section devoted to "belief". Nice to see that in its view, "beliefs" include Islam, Judaism, Catholicism and Atheism, but Protestant Christianity, not so important. Or possibly, not a "belief" but a "fact". Still, I give it time, times and half a time before it descends to the usual standard for media reporting on religion.

Because we're worth it?

Something one occasionally hears from Christians is that "we are worth saving". It seems quite logical, doesn't it, as an explanation for the cross; and it has the benefit of being an apparent explanation of John 3:16, that God so loved the world that he gave his only Son. To the extent that it tries to make us understand our worth in terms of the cross, I can go along with it a little. But I think it falls down in ultimately locating our value inside ourselves, carrying a note of "feel good about yourself" rather than "know your infinite value to the Father in Christ".

Well, in preparation for a speaking engagement at church next Sunday, I was thinking about this in connection with the early verses of Ephesians 2, where we are described as "dead in sin", "sons of disobedience", and "by nature, children of wrath". It's not pretty, is it? It's not very good. And it's certainly not the case that we deserve any good. We're not even worth saving.

And that's why grace is so amazing, isn't it? We're not even worth saving, but God does it anyway: not for any good in us but because of his great and gracious love.

I'm not sure this is a good thing…

…but sixteen leading economists agree with me, writing to the Sunday Telegraph that markets experience corrections inevitably, any fiscal stimulus should be tax cuts, monetary policy is the best tool to use, and that government is inefficient, ineffective and incompetent. The economists, a good mixture of academics and businesspeople, are:

Dr Andrew Lilico, Europe Economics
John Greenwood, Chief Economist, Invesco
Richard Jeffrey, Cazenove Capital Management
Dr Ruth Lea, Economic Adviser, Arbuthnot Banking Group
Trevor Williams, Chief Economist, Lloyds TSB Corporate Markets
Dr Nigel Allington, University of Cambridge
Prof Philip Booth, Institute of Economic Affairs
Prof Tim Congdon, Author, Keynes, the Keynesians and Monetarism
Prof Laurence Copeland, Cardiff Business School
Prof Kevin Dowd, University of Nottingham
Prof Kent Matthews, Cardiff Business School
Prof Alan Morrison, Said Business School
Prof Sir Alan Peacock, Former Chief Economic Adviser, Dept of Trade and Industry
Dr Mark Pennington, Queen Mary College, London
Prof David B. Smith, University of Derby
Prof Peter Spencer, University of York

Economic dispatch: savings ratio

The latest ONS figures for the savings ratio show that for the first quarter of this calendar year, the average household dipped into its savings (or took on debt) to the tune of 1.1% of total resources (gross disposable income plus some investment income). That's the most negative it's ever been for a quarter since the quarterly records began (although the post-war years were certainly worse), and negative figures are not common in the data.

Why's this important? Well, the government, in its "wisdom", has decided that Keynes is worth a go, and so they're going to try to spend their way out of the situation. I've already said, and stand by my opinion, that Keynes is a twit, and that government spending will not help. However, since they are committed to this lunacy, the least we can do is try to understand another reason why it's not going to work.

Our elected Lords of Misrule will need more money in order to finance this spending spree, and there are three ways the government can get it. Firstly, they can tax it; secondly, they can borrow it; or thirdly, they can print it. Taxation slows the economy down, and slowing the economy down in order to speed it up is a bit barmy, so they're not going to do that. Printing is wildly inflationary, and frankly, it's political suicide to try simply printing all the extra cash.

Borrowing, then, is the only resort, but if people are feeling the pinch, then the government's going to be a bit stuck for money. Interest rates will have to rise in order to attract the extra capital, which will push even more borrowers to the wall. Inflation will start up (because public borrowing and spending is always inflationary) which will hurt savers.

Perhaps you begin to see, Keynes never works. But for the fact that public sector workers are overwhelmingly Labour-voting, we would cut spending back to the bare minimum and cut taxes as much as it allowed. We'd let people spend their money where they wish, and if they saved it, we'd celebrate a decrease in the interest rates offered on the High Street. And slowly, people would start to understand that boom and bust are a part of the cycle of free market economics, and that to beat the cycle would be like unto shedding one's own shadow.

Well, that's a relief!

Are you a heretic?

You Scored as Chalcedon compliant You are Chalcedon compliant. Congratulations, you're not a heretic. You believe that Jesus is truly God and truly man and like us in every respect, apart from sin. Officially approved in 451. Chalcedon compliant 100% Nestorianism 50% Monophysitism 33% Adoptionist 33% Donatism 0% Socinianism 0% Albigensianism 0% Monarchianism 0% Modalism 0% Apollanarian 0% Arianism 0% Gnosticism 0% Docetism 0% Pelagianism 0%

(From Monergism.)

Security Service breakthrough in Litvinenko case

(The real story is scarcely more prosaic.)

Thought for the Day, 10-Oct-2008

Two weeks ago (I kept forgetting to post this) Jonathan Sacks delivered the Thought for the Day, and frankly, he was great. He's better than some of the "Christian" contributors: see Rosemary Lane-Priestley's attempt this morning for illustration. And yet I always find myself screaming inside when Jonathan Sacks does TftD, as I wish to myself that he'd just read the New Testament for once!

He told a story of when he and his wife built a sukkah, the traditional Jewish booth used to celebrate the Feast of Booths, when Jews recall the wanderings in the wilderness. A friend of his had got architect's plans and was planning, "a Taj Mahal among tabernacles", while Sacks knew his effort would be disitnctly unimpressive. The result, as he said, was that his friend's "was magnificent; mine looked like an outsized, lop sided cardboard box." That night, a storm came and beat against the sukkot: the Sacks' stayed up, but the friend's fell flat. So the friend came round, to see why his impressive booth had fallen flat while the other had withstood the storm.

He couldn't work out how it had stayed standing despite the winds. Then he discovered why. To keep it stable, I'd joined one of the uprights to the house with a single nail. He gave me a smile and said, 'Now I know that you can build the most elaborate structure, but if it's freestanding, winds will come and blow it down. But if you're joined at one point to something solid, immovable, you'll stay standing throughout the storm.' Then he added these words: 'The name of that nail is faith.'

As you'll recognise, this is almost directly parallel to the parable of the Wise and Foolish Builders, but—and this is the bit that makes me scream inside—although he knows that we must be joined by faith, he doesn't know the One to whom we must be joined, the One who was nailed to a wooden beam for us. How great it would be if the Chief Rabbi of the United Kingdom were to declare one day that he, too, had come to be a part of the remnant of Israel.

Free markets and capitalism: they're different!

In today's Grauniad, Seumas Milne argues that, "The free-market model has been discredited and now its champions are panicking at what might emerge in its wake." Of course, reports of our economic death have been exaggerated, and worse, Milne conflates two quite distinct concepts. He says he's talking about the free market, but in actual fact, he means modern capitalism.

Now, I'm not terribly wedded to modern capitalism, which sounds like an odd thing to say, but what I mean is this. There may be a better alternative out there than modern capitalism, but we're not going to find it by abandoning the free market. It's precisely the freeness of the market which will ensure that if there's a better alternative, someone will find it, bring it to market and make a success of it. Is it better to operate a factory mutually? Then those factories will become increasingly common as they beat their competitors. Or is the capitalist system more effective? Then, as has been usual, our current system will prevail.

Just as at the factory level, so also at the systemic level, Capitalism Mark II, or Marx III, or whatever will become the economic system we all follow, until its weaknesses are shown up and we all look for a new paradigm. It's all a part of the competitive principle at the heart of the free market system, and unless Seumas Milne thinks that we're able to reach absolute perfection, even he will accept the need for a constant ebb and flow.

So cut out capitalism, by all means: anything good within it will grow back pretty quickly. But if we destroy the free market itself, then no good will result.

Give us a caption!

(From the Independent)

PMQ, 22-Oct-08

It wasn't asked, but I'd like it to have been.

Mr. Speaker, the Prime Minister has spoken of "irresponsible lending" and ascribed our current economic woes to this cause. Will he accept that there is such a thing as "irresponsible borrowing"?

Home Office mandarins in civil liberties shocker!

The Windy-pendant reports that

Senior Home Office officials have expressed concern about the Government's controversial plans to set up a new "Big Brother" national database, according to a leaked memo.

Well, they may have designs on our DNA and fingerprints, but at least our phone calls and e-mails will be safe. It's policies like these which make me see the value of a written constitution.

I ought also to alert you to Liberty's Common Values campaign, which aims to help people better to understand the Human Rights Act. Labour brought it in, to much fanfare, but now they seek to obviate it at every opportunity. Reactionaries and populists vilify it as a "charter for lawyers and crooks" (there is a distinction), but they're wrong: it is a setting-forth of those key, fundamental rights and freedoms which we all share and enjoy as members of a free society.

Fixing the roof

This morning, Alistair Darling has been proclaiming the glad news: "Now is the time to let national debt increase!" He's saying that it's now time to run up debt? On today, of all days?

Today also happens—as if this is a co-incidence—to be the day on which the Office for National Statistics has its say on the matter:You can tell they're all statisticians: not a one of them can spot that "Northern" has been mis-spelt. And as you can tell, the spike is a result of Northern Rock. The going rate for North-Eastern votes has risen a little, eh, Gordon?

You can see that debt as a proportion of GDP has been rising since 2001, and GDP rose between '01 and '08, so guess what? Debt's been rising since 2001! Actually, it's really easy to see that debt must have been rising: no-one, not even the Government, can run a deficit without recourse to borrowing. And deficits have been running since '02, so you'd expect debt to have risen since then.

Although it's true that household debt and national debt aren't of necessity linked, it would have been politically difficult for Chancellor Brown to have bemoaned a boom in private debt while loading up on national liabilities; in fact, one might surmise that in many ways, he led the way in the taking on of unnecessary credit. And so while we oughtn't blame the government for more than their proper responsibility allows, it would be fair to observe that the economic "miracle" was built on the shifting sands of easy credit, both public and private, and it is this debt which will now come to sting us as the economy judders down a few gears.

Killed for being a Christian

Gayle Williams was 34, and worked in Afghanistan (profile) with a Christian aid agency called SERVE Afghanistan. Two men on a motorbike gunned down the worker, who helped in the organisation's work to bring education and vocational training to disabled Afghans.

The Taleban claimed responsibility and their spokesman, Zabiullah Mujahed, told the Times, "The reason that we killed her was because she was spreading Christianity." SERVE Afghanistan denies that they engage in evangelism, with the charity's chairman saying, "She was only doing missionary work if that means living a Christian life and helping disabled people."

Two weeks ago at church, we heard a little about the work of some Christian aid workers in the north of Afghanistan, and the representative told us that these families will say they feel safe 95% of the time, and then the other 5% of the time, they're very aware that they are the only white faces in their town, and everyone knows where they live. A story like this brings home quite how worrying that 5% must be.

BBC — Times — Independent — Guardian — Telegraph

On worship

One of the fun things about Issues, Etc. is the ads. Answers in Genesis advertise, as I've said before, as do one or two pro-life organisations, and a ginger group or three, promoting confessional and liturgical Lutheranism. One of these is the Brothers of John the Steadfast, whose advert opens like this:

Historic liturgy … cool.
Liturgical dance … not cool.
Kneeling for the Lords' body and blood on a Sunday … cool.
Sitting in your theatre-style seat with cupholder with your double mocha latte … not cool.

I can never stop myself, when I hear this ad, asking myself, "Why?" Why historic liturgy? Why not liturgical dance? Why kneeling? What are your principles, and where do you get them from? [1]

On the same issue, Issues ran a very good interview last Friday. Obviously there were some theological disagreements, but they were mostly incidental to her point, and apart from those, it's well worth listening to for reasons why children should be involved in corporate worship, and for ideas on how to involve them. The best quote was, "If worship isn't for everyone in the family of God, then it's not for anyone."

The interviewee plugs, at the end, a new resource, called Growing in Worship, for children in Lutheran churches. It presents the week's Collect and a blatant breach of the Second Commandment (*g*) regarding the week's Gospel reading. And I think it's a rather good idea, although it clearly only works in a setting where everyone will be praying and reading the same things.

[1] This kind of question forms the source for my theory that almost everyone actually believes in the Regulative Principle, but its application varies from loose to careful through to "mental".

SFO may launch probe into Peston bank scoops

The Serious Fraud Office could launch an inquiry into BBC business editor Robert Peston's recent string of market-moving banking 'scoops' after David Cameron's Tories raised suspicions that he could have a 'mole' inside 10 Downing Street or the Treasury. (Grauniad)

Good. I don't know whether anything fishy has gone on—that's why the police get asked to investigate, after all—but it has seemed uncanny, the way Robert Peston has seemed to know things almost before they happened.

Well, he wrote Gordon Brown's biography and had "unprecedented access" to Brown and friends for the project, so this may be a simple case of having an extremely good contacts book. But given quite how market-sensitive many of his "revelations" have been, I think it's quite reasonable to expect the SFO to investigate, so as to be absolutely certain that:
(a) he hasn't engaged in insider deals,
(b) the way he's obtained his information has been above-board, and
(c) the government hasn't been feeding him a line for their own ends.

"Gordon Brown launches attack on 'scandalous' Opec"

According to the Graadinu, the "PM outraged that oil cartel is thinking of cutting production in response to falling prices". This is the man who, it is claimed, has a great mastery of economics (his education is in history, folks), and who has been pointing out the importance of cutting down our use of oil because of carbon emissions. And yet he calls for countries to act irrationally, by using up their finites resources in an unprofitable manner, and he wants to continue to encourage our oil use on the current scheme?

Prudence was defenestrated some time ago, and a lady calling herself "Fairness"—although not all she claims to be—has been welcomed with open arms, but, as this episode and the attempt to strong-arm our banks into irresponsible lending shows, the woman who has stolen Gordon Brown's heart is none other than that old madam, Populism herself.

Oh, my twisted tongue!

With thanks to Danny Finkelstein.

As plain as the nose on your face

I love some of the names of American institutions of higher education. They're so… obvious as to their origins and affiliation. See, for example, the following.

Saint Mary's College, Indiana.
Westminster College, Pennsylvania.
Concordia College, Minnesota.
Bellarmine University, Kentucky.
Ursinus College, Pennsylvania.

The common thread, as it happens, is that they're all liberal arts colleges advertising for mathematicians. Not that I'm thinking about the need for a job which will press on me, if all goes well, in a bit over a year's time, anything like that…

Solving executive compensation

Everyone's agreed, executive compensation is a bit of a mess. And everyone agrees that executives need to have their compensation in line with shareholders' interests, which are broadly assumed to be a healthily-increasing share price [1]. Everyone is also agreed that there should be no compensation for failure; in fact, some of us would argue that there should be penalties for failure. It may seem harsh, but it's fair for directors to suffer the same fate as their employers—yes, believe it or not, investors are the directors' employers.

But how do we square this circle? Traditionally, executives have been remunerated in cash—fair enough—with bonuses on top, and equity options (American-style calls) which allow the executive to buy a certain quantity of stock at a certain price within a certain time-frame. It's sometimes even been the case that executives have been paid in options where the exercise price is lower than the market price, giving little incentive for the executive to work for an increase in the share price.

I came up with an alternative plan for executive equity compensation, which ensures that there are penalties for failure as well as rewards for success, and defines failure and success in a reasonable manner. It goes like this:

The Company's remuneration committee, on which the Board ought to have a seat or two, but nothing like a majority, decides on a "competitor group" of companies, against which the Company's performance ought to be measured. Then directors are allowed to participate—up to an agreed limit—in a scheme whereby they receive financial instruments with a current market value of nil.

The instrument is a pair of options: a written call against the competitor group and a bought call for the Company; they will be European-style options with the same strike date. If the Company subsequently out-performs its peers, then this instrument will attain a positive value. If the Company under-performs its peers, then it will attain a negative value. The scale of the reward and penalty can be tuned by taking smaller or larger positions.

As you can see, failure and success are defined sensibly, directors are rewarded and penalised appropriately, and the directors' longer-term interests are aligned with shareholders' interests.

And will we go down this route, or a similar one? Not a chance.

[1] Actually, I'd prefer a moribund share price and a healthily-increasing dividend, but I recognise that I'm not in the majority. I'm happy to compromise on increasing the dividend modestly and keeping the share price chugging along.
[2] If you write a call option then it means that you have the obligation to sell the underlying stock at a certain price. If you buy a call option, then you have a right to buy stock at a given price. Both of these rights cost money; the writers of options give a promise to act as counterparty and are paid for that promise.

You're jolly well not all right, Jacques

In times when my charity towards the EU has worn a little thin, news like this (Torygraph) does precious little to help endear the ne'er-do-wells in Brussels to me. If the paper is to be believed—and confusion currently reigns everywhere, even among the august pages of the Times and the FT—the Government has been willing to look again at the Lloyds TSB dividend issue, but the EU has decided that only a blanket ban on dividends for the duration of the state aid will encourage the company to re-pay the shares swiftly.

Meanwhile, listen long and hard to Government ministers, and even our economic Wunderkind of a Prime Minister, when they say things like, "No-one could have seen this coming." Listen, and then read the Times' list of 10 people who did manage to do the apparently impossible, starting with Vince Cable and ending with Ron Paul.

Oh, yeah

Listen very carefully, we shall ask this only once

The Graudina reports that the Treasury Select Committee is, extraordinarily, asking members of the public to send them the questions they would like to see put to any of the following:

The Rt. Hon. Alistair Darling MP, Chancellor of the Exchequer
Mervyn King, Governor of the Bank of England
Lord Adair Turner, Chairman, Financial Services Authority

You can get in contact through the link given above; the deadline is 48 hours prior to the hearing, which has not yet been determined. I'm thinking carefully about what question/s I'd like to see put to them.

In other news, the Guariand article begins with the good news that the Treasury is in talks regarding the Lloyds TSB dividend, which had effectively been cancelled by the preference deal, but which has so riled institutional investors that they are threatening to rub the HBOS deal out if the dividend isn't restored. For my own part, while I would understand wanting to shore up the balance sheet, the government's insistence preference dividends while forcing a cancellation of the ordinary looks like a way for the government to stick two fingers—or fewer—up to shareholders.

This is particularly frustrating as it is the government's own rules and regulations which have slowly removed the controls, checks and balances which shareholders have over their companies. Nominee accounts make it difficult, if not impossible, to exercise voting rights, and the cosy relationship between government and the pensions industry has seen millions of people who might otherwise have been small shareholders coralled into huge blocs, whose votes on "fat cattery" and other City excesses are wielded by pension fund managers, themselves the ultimate fat cats.

If we're to get back to an age of responsibility, then we could do worse than to start by ensuring that the policies aimed at encouraging people to put their money into the stock market allow those same investors to exercise real control over the companies they part-own. Perhaps something along those lines ought to be my question…

Trades unions, Bastions of Responsibility

Yesterday, reports Christopher Hope of the Torygraph, Derek Simpson of Unite said,

The measures announced today must be bound to undertakings by the banks of no job losses, no repossessions and an end to the bonus culture.

No repossessions, Derek? None? And lending at 2007 levels? Have we gone completely bonkers?

At the Windy-pendant today, you can read Dominic Lawson on what is rapidly sounding like a very plausible claim, It all went wrong when we left the gold standard, and Mary Dejevsky on a similar topic, Don't blame Thatcher – she was all for sound money.

I'm finding it increasingly difficult to find arguments against the proposition that having a system of currency which is known as fiat, where the government basically conjures up new money, and where fractional-reserve requirements allow the banking system effectively to do the same, is far too dangerous a basis on which to run our economy. While an under-grad, I had a friend who bemoaned the fact that we weren't on the gold standard and thought things had gone downhill since we abandoned it. Frankly, I'm beginning to understand his reasoning.

Whaddaya know… two wrongs do make a right!

Says our illustrious PM (not his exact words):

We screwed up on building more housing over the last ten years, so we'll be back to boom and bust a lot more quickly.

From further down the article,

He said the UK problem was not shortage of demand for homes at "the right prices" but a shortage of mortgages "at the right prices for people to buy".

The government's solution to this is to use its current leverage over the banks to make them lend at ridiculously cheap rates to people who can't really afford houses.

If I had the ear of the Prime Minister, I'd have something very simple to tell him. Gordon, pay attention: despite the BBC's wildly optimistic headline, Brown's housing market confidence, this is not a Good Thing. In fact, a similar policy in America is demonstrably a significant part of the nexus of events which caused our current woes.

Matt. 25:31–46

Notorious passage. Almost invariably mis-handled. You'll be lucky to find very many sermons on it, for precisely that reason. Every commentary always begins with these or similar words:

Jesus can't possibly be teaching salvation by works here…

What's it all about? Well, have a look at Matt. 10 first, and then come back.

Are you sitting comfortably? Then I'll begin. "The brethren" are the disciples, particularly in their aspect as witnesses to the gospel—note, there's an application here that all believers are called to witness—and those being judged are judged for their reception of the gospel, as evidenced by their treatment of those who preached the gospel.

Dead easy, when you get that bit, to see the rest of the passage falling into place.

I'm indebted to Knox Chamblin (pdf) and Keener, IVP (html); although not to Lin and VanderLinden, who seem to have popping just a few too many of the little white pills (html).

McCain's lost

McCain’s allies responded by suggesting that [Palin] had her own pastor problems, such as the African minister who prayed to Jesus to protect her from witchcraft when she was running for governor. (Source)

Houses divided against themselves don't stand. The campaign's coming apart at the seams. And though at first, McCain's VP pick seemed tactically astute, it's become apparent that it was strategically lunacy—which is not to say that Joe Lieberman would, necessarily, have been a better choice.

I are a jeenyus

It's official: I got it in one. We're calling it "The Wad War".

John's solution has a faintly Civil Service air about it:

Sir Humphrey Appleby: If we do nothing we implicitly agree with the speech. Two: if we issue a statement we'll just look foolish. Three: if we lodge a protest it will be ignored. Four: we can't cut off aid because we don't give them any. Five: if we break off diplomatic relations we can't negotiate the oil rig contracts. And six: if we declare war it might just look as though we were over-reacting.

Foreign Secretary: In the old days we'd have sent in a gunboat.

But I think this calls for some real vigilantism. The population of Iceland is roughly the same as the number of Icesave customers ripped off by that government's refusal to honour its debts. Therefore, I modestly propose that we tool up all the angry customers and get the Navy to carry them over in longboats.

I can just see the headlines now: "Britain in daring Viking raid on Iceland" (Times); "Raze-kjavik!" (Sun); "House prices in Iceland take a battering" (Mail); and "Hostile M&A activity in the North Sea" (FT).

What do we call this one? A wad war?

After a run on its accounts, the UK financial authorities put Iceland's Kaupthing Edge into administration, arranging the purchase of the Edge's savings accounts, together with accounts from the Heritable Bank (formerly of Landsbanki), by ING Direct [1]. The parent company, Kaupthing, naturally protested from Reykjavik that they were perfectly solvent, and the Icelandic Prime Minister has accused the British government of causing its 'last bank standing' to collapse. On the British side, the defence of the action is that Iceland had refused to honour an international obligation, and that therefore Icelandic banking assets in the UK had to be seized to ensure that depositors' protection could be guaranteed.

We're scarcely at the "full steam ahead—ramming speed!" stage, but after our Government has threatened legal action against the Icelandic government [2], relations between the two countries can't have been so icy for quite a long time.

[1] I had accounts with both institutions, totalling rather a lot of money, so ING are in my very good books at the moment; yet not so good that I'm not going to find an alternative, FSCS-registered and British, home for the instant savings part as soon as is practical.
[2] But who has jurisdiction?

Heck, even Jerusalem's better

It's our church Missionary Sunday this week, and I've been reminded—as our visiting speakeress has chosen it—of the horror that is the song we shall be closing with. It's called Days of Elijah, and it goes a-little a-like a-this:

These are the days of Elijah,
Declaring the word of the Lord:
And these are the days of Your servant Moses,
Righteousness being restored.
And though these are days of great trial,
Of famine and darkness and sword,
Still, we are the voice in the desert crying
'Prepare ye the way of the Lord!'

Behold He comes riding on the clouds,
Shining like the sun at the trumpet call;
Lift your voice, it's the year of jubilee,
And out of Zion's hill salvation comes.

These are the days of Ezekiel,
The dry bones becoming as flesh;
And these are the days of Your servant David,
Rebuilding a temple of praise.
These are the days of the harvest,
The fields are as white in Your world,
And we are the labourers in Your vineyard,
Declaring the word of the Lord!

There's no God like Jehovah.
There's no God like Jehovah!

(Source)

And all I want to do is find the person who wrote this and put a few simple questions to them.

1. Elijah is dead and with the Lord; and John the Baptist is "the Elijah who was to come": in what sense are these "the days of Elijah"?
2. How was righteousness restored in the days of Moses?
3. Didn't Jesus also say that John the Baptist was the voice in the desert?
4. What's a "temple of praise"? Where does it come from in Scripture?
5. And anyway, didn't David pre-date the first temple, never mind re-building one?
6. Did you even go near a Bible while writing this?
7. Why, out of seven biblical images, do you manage to apply perhaps one-and-two-halves correctly?
8. And the big one: why don't you mention—at any point, in any way—the One who definitively declared the word of Lord, constituted the holy temple of God, restored all righteousness and still raises dead souls to new life?

This is perhaps one of the best [worst — Ed.] examples I know of what Nick Page (And now let's move into a time of nonsense, p. 90) skewers with deadly humour as "a kind of spiritual Tourette's syndrome: we're just blurting out Bible verses. We don't mean anything by them; we just can't help ourselves."

Good news!

In the midst of human turmoil and uncertainty, a little good news never goes unappreciated, so here we go. According to Lorenzo Iorio of the Italian Istituto Nazionale di Fisica Nucleare, the Earth isn't in danger of being completely engulfed by the Sun as it reaches red giant phase: our orbit is slowly widening, at a current rate of about 1.3cm/yr, so should the Lord tarry a million years, the Earth will already have moved far enough out to avoid being swallowed whole.

There, isn't that nice to know?

Mark and inwardly digest

The Chancellor has just finished taking questions in the Commons on the Government's response to the credit crunch. He rejected a proposal of George Osborne's to dispose of mark-to-market, the accounting rule which forces banks to value their financial assets according to a market which is currently utterly stuck. It was introduced after the Enron scandal revealed that systematic abuse of accounting principles could permit a company to mis-report its value for a long period before being caught out. But it relies on an orderly market, and we don't have one at the moment.

The Chancellor later said that the assets obtained from the public receivership of Bradford & Bingley would generate good returns which would be used, as was proper, to pay off the B&B's creditors, and commented that the main problem with B&B was that it had assets which had a very low value. Clearly, he thinks that their true value is higher than the currently-quoted market value.

If I had been in the Commons, I think I would have wanted to ask, "Mr Speaker, can the Chancellor explain to the House how it is that the market provides an accurate value of the mortgage book of Barclays Bank, but not of exactly similar assets held by the Government?"

Liberalism and Christianity

I've just finished listening to that radio programme I mentioned a couple of hours ago, and David Parker, the Bible scholar putting Codex Sinaiticus together, came out with a corker. "Christianity should be about discovering the truth, not being given it," he said. Because hard work, and not free gift, is at the heart of the Christian faith, oh yes.

This illustrates baldly why Machen was right to describe liberalism and Christianity as two different religions.

Isn't this Channel Four's schtick?

Radio Four ran a programme this morning—I haven't heard it yet, but will listen sometime this week—presented by Roger Bolton, called "The Oldest Bible" and covering the Codex Sinaiticus. The accompanying article makes the line they're taking quite clear: this document will apparently cause us all to follow Bart Ehrman out of the church and into a studied agnosticism.

We are told, as if this is news, that there have been "thousands of alterations to today's bible." Scribal errors, we call them, and we've been dealing with them for, ooh, centuries.

We're also informed of the shocking revelation that "the Codex contains two extra books in the New Testament." Because it's Christians who produced one unified copy and burnt the different originals, isn't it? Oh, wait… Well, anyway, we're certain that no Christian who's read around the area has heard of the Epistles of Mary, Thomas and Barnabas. Or indeed of the orthodox tradition, including names like Clement and Mathetes.

Bolton goes on to tell us that "although many of the other alterations and differences are minor, these may take some explaining for those who believe every word comes from God." Yup, they do take explaining. But you know, they're explanations which have been around, as I repeat, for centuries, and explanations which have improved as textual science has become better-understood.

Part of the conclusion is that "Fundamentalists, who believe every word in the Bible is true, may find these differences unsettling." Well, I'm no fundamentalist, and it's probably not fair to say the same of James White, but he believes that every word of the Bible is true (provided we're allowed to be sophisticated about this) and has dealt with these issues in what some may term excruciating detail.

Ninja students?

The Times reports that students graduating in 2008 will face not only "unprecedented" levels of debt, but also an employment market which is drying up. After the rise of the ninja mortgage—no income, no job or assets—perhaps the next few years will be 'ninja' ones for another group of people.

The reporter quotes the NUS as estimating

that members accrue an average £12,500 a year in debt

which sounds like either a mis-reported statistic or a complete fabrication, but certainly £12,500 for a three year course is quite normal.

Well, I'm not finishing till 2009 at the earliest, but as you might expect, I know a number of people who will find themselves "the students who walked into the cold"; I also wonder what happened to some of our former PhD graduates who went into high finance. It would be little surprise if the figures for teacher training courses also came out mich higher: not only do they provide something to do for a year, but as long as you're competent, teaching is pretty much a guaranteed job for life.

The boom in house prices was described as a wealth transfer from the young to the old, as first-time buyers paid over the odds to get on the "ladder". And now, are the young paying once again?

Sher and I'd not be startin' from here

I finally worked out what was really bugging me about Merlin. Morgana le Fay is painted as Arthur's love interest, while Guinevere is presented as Merlin's. Morgana, though, is meant to end up a sorceress and antagonist, while Guinevere's station as lady-in-waiting to Morgana is scarcely fitting for the future Queen Consort of Arthur. Merlin, in love with Guinevere, would hardly forgive Arthur for stealing her from him, and yet needs to end up as Arthur's trusted mentor and friend—and in any case, is meant to be decades older than the once and future king—and Arthur should have been made king at fifteen, not still prancing around, mooning over his father's ward-of-court. Unless they've got something so convoluted it would make Hitchhiker's Guide to the Galaxy seem positively linear, the writers can't make the situation as it is connect with the situation as it must be.

"So whenever you see a rainbow"

Last Sunday, I was responsible for the children's talk, and being as it was our Harvest Sunday, I opted to look at the rainbow, and what it means in terms of God's faithfulness. I probably fluffed the Harvest-related point, which is that God promised that summer and winter and springtime and harvest would never cease, but we sang Great is thy faithfulness afterwards, so it's all good.

Anyway, briefly, I rehearsed the story of the flood up to the point of the rainbow, and then observed that the rainbow was given as a memorial. But contrary to what one might think without the text of Scripture in front of us, the message of the rainbow isn't "So whenever you see a rainbow, remember God is love." Instead, it is God who does the remembering.

Moving on to the symbolism, the rainbow is genuinely a bow as in bow-and-arrows [1, 2], and it's not pointing at us as if to say, "Now just you lot behave yourself, savvy?" Instead, God points the bow at himself, as if to say, "I've promised, I'll keep my promise, and if I fail to do so, then may the judgment fall on me."

Of course, God's saying that reminds us of another mountain, many centuries later, when judgment did fall on God's head, not because he had failed to keep his promise, but because we had failed to keep his law. And so it was that God fulfilled his promise of a Saviour in Jesus Christ, God made flesh. Because he did that, he can be called Saviour by everyone and anyone: and since we were expecting a higher number of non-Christians in the congregation that morning, I closed by asking people to consider whether they were able to call Jesus their own Saviour. And that was the sum of the children's talk.

But seeing this post by Wedgewords, a Reformed guy quoting a Lutheran with favour on the sacraments and quoted with favour by Lutherans in return, reminded me that a direction I didn't go in because the context was inappropriate, but which is worth going in nonetheless, is to think about the rainbow as a sacrament [1].

In particular, this business of memorial gets muddled. On the one hand, the Zwinglians make out that we do the remembering; but while we certainly need reminding, it's not we who are the primary "rememberers" in a sacrament. On the other hand, some Romanists—and even, although by no means going the whole hog, Jeremias—go so far as to make out that God really does need a kind of reminder, that there is a sacrifice of the Mass which is re-presenting Christ's one oblation to the Father. This is at least as bad, as it suggests that we hold the primary responsibility for pleading the atoning blood, when before all others, it is Christ our High Priest who does this.

But the rainbow is not set in the sky by our own efforts; rather, it is God's work. And so it is with the Supper: we may gather bread and wine, and we may recite Words of Institution, but fundamentally, the activity is God's as he makes the Supper to be what he has promised that it is.

Therefore, I would contend that the real understanding of memorial is this: that God remembers his promise by renewing it in front of us, and by graciously giving to the people of his covenant the thing which the sacrament sets forth. So in the case of the rainbow, the word isn't from us, "Do you still remember?" but from him, "See? I still remember." And he graciously stops the rain, so that we are not inundated. In the case of the Lord's Supper, he sets forth the Cross—the broken body and shed blood—and says, "See? I still remember," assuring us of salvation, and then he graciously feeds us on Christ, who is all that we need for justification, sanctification and, ultimately, glorification.

[1] I am indebted to Michael Horton, in God of Promise (p. 114), for these insights.
[2] The point about the bow isn't just a quirk of English etymology: it's actually present in the Hebrew, too.

The House voted Yes

263–171.

So that's settled, we're going to fix the problem by taking more of the poison. Debt was our way into this, and debt, we are assured by the politicians, will be our way out. Meanwhile, Dominic Lawson, writing in the Independent, asks where the causes of all this lie. He comes to the obvious, sensible, unpalatable conclusion.

What is the proximate cause of the collapse of confidence in the world's banks? Millions of improvident loans to American housebuyers. Which organisations were on their own responsible for guaranteeing half of this $12 trillion market? Freddie Mac and Fannie Mae, the so-called Government Sponsored Enterprises which last month were formally nationalised to prevent their immediate and catastrophic collapse. Now, who do you think were among the leading figures blocking all the earlier attempts by President Bush – and other Republicans – to bring these lending behemoths under greater regulatory control? Step forward, Barney Frank [Democratic Chairman of the House Financial Services Committee] and Christopher Dodd [Democratic Chairman of the Senate's Banking Committee].

The Democratic candidate, whose party and economic philosophy did so much—admittedly, not everything—to cause this problem [1], will no doubt win the Presidential election by painting his approach as the one which has solved it. And then will come what Lawson describes as "the saddest outcome of all this within America," that "for many years to come banks will demand the most stringent terms for mortgages to the least well off."

Lawson commends Rep. Artur Davis (D-Ala.) for recently confessing the mistakes that his party made. It is to be hoped, although perhaps not expected, that others of his party will be willing to take the blame for all their hands have wrought.

[1] EDIT: I recall recently seeing a video of coverage from the relevant Congressional committees showing Democrats behaving in exactly the way Lawson describes, including a scene with Rep. Maxine Waters (D-Cal.) lauding the Democratic policies which had led to "innovation" such as "the 100% mortgage". Head. In. Hands.

As Major Bloodnok probably never said

"Well, smack me gob and gast me flabber, it's Calamity Mandy!"

Gordon Brown has cast Undead, bringing back that long-dead Spinning Dervish, the EU Trade Commissioner Peter Mandelson, whose career in British politics ought, by Yes Ministerial rights, to have been six feet lower as soon as he stepped off the gravy train that is Parliament and onto the champagne train that is the European Commission: holidays at Knokke-le-Zoute and all that jazz. But no, the man so bad they sacked him twice is back, despite the enduring and mutual antipathy which had existed between the Chancellor and the erstwhile Trade and Industry Secretary, and he's taking up the new-and-improved version of his old brief: Laziness, Lack of Initiative and Messing Around with Things Politicians Don't Understand.

Meanwhile, Mags Beckett has been brought back from political hibernation to run Housing: presumably her master-plan will involve relocating the entire country to caravans. The Black Widow, who has presumably been moved from that brief to stop her from inadvertently revealing the government's top secret panic attacks, has been sent to Europe. If only…

Our man in Washington

The Times reports the leaking of a letter from the Ambassador in Washington, Sir Nigel Sheinwald, to Number Ten, about Barack Obama. The headline is that Our Chap called him "liberal", which must (understanding the term in its American, not European, sense) be a headline akin to "Dog bites man!"

Nonetheless, the article makes for interesting reading, as he gives a good British perspective on the leading candidate in the Presidential race.

The letter to Number 10 predicts there is a potential clash with a future Obama Administration over Iran, even though British Embassy officials have consistently gone on record denying such claims.

…

While approving of his "progressive position on climate change" and "balanced approach to the big security issues", [Sir Nigel] raises concerns over Mr Obama's protectionist leanings on trade.

I suspect that my concerns in overseas elections are broadly in line with classic British concerns: trade, security and foreign policy foremost, with environment, especially as regards the US, also high on the list. Obama, it would seem, gets a thumbs down on trade, a thumbs up on the environment and "could do better" on the security-foreign policy nexus.

Lay down a bottle—for 30 minutes

Yesterday, the Telegraph reported on an invention—commended by an English vintner—which, claims the inventor, will 'age' a bottle of wine in 30 minutes. He zaps the bottle with ultrasonic waves, which presumably are tuned to the resonant frequency of alcohol molecules and this, he says, recreates the effect of years of ageing.

I have to confess to having some scepticism, especially as the inventor claims it even sparked up a glass of orange juice, but if it does work as claimed, I can see not only restaurants, but also supermarkets and off-licences, viewing £350 as a very acceptable outlay for the return it could easily generate.

Stock portfolio, 2009Q2

The main portfolio page has been updated.

Commentary

Okay, so Bradford & Bingley wasn't the most judicious purchase, although I may perhaps be forgiven for hanging on in the hope that it might at least have been bought out; I also didn't sell because the commission would have made the amount recovered almost laughable. This illustrates well why I'm putting in small amounts every month, and diversifying across sectors.

Otherwise, the cool market conditions make for a good buying climate—Warren Buffett, the Sage of Omaha, advises fear amidst greed and greed amidst fear—but given I don't have any excess capital to soak up, I'll just be buying one share, and it's happening next week, so I dunno which yet.

Anyway, dividends rolled in from Tate & Lyle (16.1p per share), United Utilities (31.47p), BT (10.4p), DSG Int'l (3.43p) and today, from Lloyds TSB (11.4p). The total dividends received per unit across the period was 0.900p.

The return of capital from UU. (170p per share) went ahead as previously mentioned, due to the sale of United's electricity arm. I therefore put the money towards a small holding in Scottish & Southern Energy, which makes up for the loss of exposure to electricity.

Activity report

Jul 08
Receive dividend from TATE.
Receive return-of-capital from UU.

Aug 08
Receive dividend from UU.
Buy SSE (Scottish & Southern Energy) at 1501.04p.

Sep 08
Receive dividend from BT.
Receive dividend from DSGI.

Outlook

Looking into 2009Q3, payments have been announced by Trinity Mirror (3.2p), Old Mutual (2.45p) and Brixton (4.9p). Frankly, the way the markets are behaving at the moment, I don't care to call much more than that!

New hedge fund opening

StrategeryCapital Management LLC
"Putting your money where our mouth is."

Read all about it.

That bl**dy idiot's at it again

'Scuse my French, but Peston really gets up my nose sometimes [only sometimes? - Ed.]. He is, once again, describing shareholders of a bank—this time, Lloyds TSB—as "recalcitrant" for opposing a deal which they may quite honestly believe to be a bad one for their company. I wouldn't mind it so much if he described them as sociopaths who would bring the entire system crashing down rather than accept a bad deal, but if a share-holding democracy is to mean anything, then it must mean that shareholders are free to choose without being subject to any authority on Earth. In other words, they're not "recalcitrant", chum, they're "free".

Disclaimer: I hold Lloyds TSB shares, and am voting against my better instincts in favour of the deal. On the business side, I'm still not hugely convinced—and would always take the conservative view in such matters—but I'm not going to be accused of sociopathy. I do think that there's a good chance that HBOS' failing could drag the economy through some pretty miry territory for the next few years, and as much as I'm not convinced about whether it's in my "Lloyds" interest to see the merger happen, it would be even less in my interest for the whole economy to find itself located in a minor tributary without a propulsion aid.