Blogs

I'm pleased to see that Arthur's Seat is active again. No, not the volcano. The Blog.

And a warm welcome to The Steamie, a proper blog from the folks at the Scotsman.

What's in a name?

When I get fed up with politics I can always return to my love of photography, despite the current threats.

One of my favourite publications is Outdoor Photography. Nothing political there surely.

But what's this? In the current issue's Reader Workshop one of the featured photographers goes by the name of Karlmarx Rajangam.

I really do feel sorry for this chap.

Living beyond "our" means

George Kerevan is one of the Scotsman's best writers. But he's dead wrong on this one:

The article is behind the subscription wall but this is from the dead tree version:

Of course, a fall in sterling still means an implicit wage cut – it's just that we don't see it in happening in our wage packet. A cheaper pound means the imported plasma television is more expensive, as is everything else that is imported, including food, so our real standard of living has been cut. The charm of this approach is that the pain is spread equitably.

No, no, no.

There's nothing equitable about this at all. The financial crisis has been caused by imprudent citizens, by incompetent bankers and, above all, by central banks acting under the control of economically ignorant politicians.

My mother's lifetime savings are being used to fund her increasingly expensive residence in a nursing home. Mr Kerevan thinks it's equitable for her savings to be depreciated in order to bail out spendthrift citizens and politicians. Perhaps she should have blown the lot.

I'm in a somewhat similar situation. I have no debts and a bit of savings. And it took a lot of hard work to get to this position. I can well remember when my total wealth was about £50.

To sort this mess we need to have a massive cut in public expenditure and a return to sound money.

My friend Brian agrees.

Is Damian Green a photographer?

It's not just opposition MPs who have to watch out. Here in Edinburgh the war on photography continues.

You'd have thought that the disasters that have befallen HBOS and RBS would have made the City Council all the more determined to protect our tourist industry, especially in the run up to the busy Hogmanay season that's so important for the winter economy. Tourism is probably now our biggest single private sector industry. But oh no, there's no innocent activity that escapes the attention of Big Brother:

I have spoken to Mr. John Paul Murphy who is in charge of the Edinburgh Winter Festivals and the German Market falls under his jurisdiction. He has informed me that we will be required to be "accredited" with a pass. Once we are in possession of the pass, we will have unlimited use of the site to take photography. To this end, he has asked me to gather full names of those wishing to attend on Saturday. If you are uncomfortable printing your full name in this forum, I fully understand and in that case, please mail me your full name in order that you may be granted a pass.

As a sub-note I am not entirely satisfied with this situation and fully intend to delve further into the violation of photographer's rights and will most likely call upon Jacquiline Smith (Home Secretary) and my local MP

The German Market takes place in Princes Street Gardens, one of the most photographed places in the UK. But the Council goons now want the names of local photographers so they can be "accredited" to take photographs in a public space in the centre of our capital city.

One of the bizarre things about the war on photography is the attention paid to SLRs, or "professional cameras" in goonspeak. I'd be astounded if more than one percent of SLRs go to professionals. The vast majority of them are bought by keen amateurs. Normal law-abiding and tax-paying individuals. The people who pay the Council employees' wages. The irony is this: lots of compact cameras that don't seem to worry the camera Gestapo in the the least have longer reaching zoom lenses than are used on most SLRs.

I bet that Damian Green was an amateur photographer and that's really why he was arrested.

Oh dear...

...it's happened again:

Hearts have confirmed their players have not received their wages on time for the second time this season.

If the players don't get paid they aren't going to win, are they?

But on the other hand:

Hearts extended their winning run to five matches with victory over Rangers at Tynecastle.

Do we actually need to pay them?

Seriously though, and writing as a former finance director, the one thing you avoid at all costs is not meeting the payroll on time.

More photos...

...are up on the other blog.

They're from Dumfries and Galloway

and Melrose.

James Clerk Maxwell

James Clerk Maxwell
Originally uploaded by David Farrer

Here are some photos from the James Clerk Maxwell statue unveiling.

Will General Motors file for bankruptcy on Monday morning?

Probably not. I expect that the politicians will bail GM out. But maybe its time is up.

If you accept the Austrian view of economics - as I do - then this whole financial mess won't resolve itself until all of the world's malinvestments have been liquidated. By malinvestments I mean everything that's been spent on business ventures as a direct result of all that monetary expansion that wouldn't have occurred in a free market.

Bailouts by Bush, Brown and the rest may delay the day of reckoning for a while but can't change the ultimate end game. The world watches. Gold was up 7.66% on Friday despite the manipulation.

(UPDATE: there's going to be a lot of anger before things are resolved. I bet McCain's glad to be out of it.)

Off the rails

So, train fares are going up again:

Train passengers in Scotland face a 6% rise in the price of most tickets from January - almost 2% above the current rate of inflation.

Hang on a moment; this implies that inflation is around 4%.

No, it's not. Inflation is actually running at 15.1%. The price increases will follow.

And we ain't seen nothing yet...

Last Tango in Clarkston

I note that the Secretary of State for Scotland has joined in the Strictly Come Dancing row:

"The fact is the judges don't know what this programme is all about.

"I watch the programme with my family."

Mr Murphy said it was "family entertainment and good fun and John is emblematic of that, rather than taking himself so seriously".

"I think we need to get rid of the judges rather than John."

What Mr Murphy has realised is that most people like to make their own judgment as to what they like. Yes, experts have their place, but when it comes down to it we like to have the final say and if the "experts" don't like it, then tough.

So why on earth is Mr Murphy in the Labour party? The whole purpose of that organisation seems to be to pick the most useless experts it can find and ram their opinions down our throats.

Do banks want our money?

One of my clients tends to have several hundred thousand pounds on deposit at any one time. I suggested that it might be a good idea to spread the cash around three banks instead of one. The Board agreed and back on Tuesday 4th I wrote to HSBC, Barclays, Nationwide and the Clydesdale to see what terms they could offer. So far only one bank has responded. The Clydesdale replied by phone the next day and sent a follow-up letter. There's been nothing from the other three. Do they need our money or are they totally incompetent?

GM's performance

General Motors has been a bit down recently but it's gone up again today.

Now we know why...

Blogged out...

... at the moment and have a chest infection.

Back ASAP.

Glenrothes

Earlier today I decided to go out for a drive. Perhaps inspired by this photo the silver Hyundai headed out on the A90, over the Bridge and into deepest Fife. Yes, I was on my way to Glenrothes.

Saltire
Originally uploaded by David Farrer

The first thing I noticed was the compete absence of posters on lampposts. Here in Edinburgh elections mean party posters on virtually every lamppost to be seen. I noticed the same phenomenon in Glasgow during the recent by-election over there. Turning off the main road I drove through the village of Cardenden, home place of Ian Rankin and, inevitably, Inspector Rebus. I saw one window poster - for the Labour candidate Lindsay Roy. That was your lot.

When I got to Glenrothes proper I had a wee drive round the town and then parked by the main shopping centre. I paid my £1 for all day parking and went into the overheated mall. You could have been anywhere in the UK judging by the shops. At the far end I did see a TV cameraman talking to a couple of press photographers but there was no sign of any action. Back nearer the car I spotted some yellow balloons outside. I was handed a leaflet, which contained an attack on "greedy bankers who bet everything on black and want bailed out when it comes up red." Aha! Some libertarians? Sadly no: they were from the Scottish Socialist Party, and also called for "free" school meals, "free" public transport and "free" prescriptions. "Free" at the point of consumption I presume. Where's Adam Smith when you need him?

Then I spoke to a lady at the SNP stand.

"How's it going," I asked.

"Fine, and you are?"

"David Farrer, I blog at Freedom and Whisky."

"And I'm one of your readers, she replied"!

It turned out that I was speaking with Tricia Marwick, the local MSP.

I was told that the lamppost laws are different in Fife. We chatted about the campaign and also about the American election. Obama reminded Tricia of Tony Blair. That wasn't a compliment. I defended Sarah Palin on the gun question and was reminded that politicians here haven't yet realised that crime goes down when law-abiding folk are armed...

Ms Marwick pointed me in the direction of Markinch, which is a pleasant little village on the edge of Glenrothes itself. There I found the SNP headquarters. I parked the car and just walked right in. It occurred to me that I'd have been shot by now had I been at the Obama or McCain campaign offices without an appointment. After explaining that I was a blogger, a media lady was called to speak to me. We had a nice chat and I heard that there was no sign of any "Brown Bounce" in Glenrothes following his recent career move to become saviour of the world's finances. Quite the opposite, if anything.

I was told that there was to be a "photo opportunity" in the nearby Carlton Cafe and that I was free to go along. I sat down and ordered a coffee. A few minutes later in walked Peter Grant, the SNP candidate, together with the First Minister himself. They sat down at the next table where they had a televised and photographed chat with two "switching" voters. A small group of protesters were also in the Carlton and they were objecting to the SNP's lack of funding for their group. Salmond offered to talk to them later. After taking a few photos, I left.

Afterwards it occurred to me how lucky we are that an unknown member of the public can walk right into an election campaign office, without producing any ID, and then sit in a public cafe at the table next to the country's First Minister with no vetting whatsoever.

Of course, the young mother and father with the two children at the table to my right were probably from the SAS...

Alex Salmond
Originally uploaded by David Farrer

Peter Grant
Originally uploaded by David Farrer

Pepe

Here is Mrs F&W's mother's award-winning guard dog in action:

Talking of banks...

... here are some photos I took in the City last Friday.

Note the window cleaner:

When I'm cleaning windows!
Originally uploaded by David Farrer

The way we were

One of my grandfathers was Provost of Annan. He served on the Audit Committee of the Annan Savings Bank, which was founded back in 1835. In 1875 the Annan Bank incorporated the remaining 28 accounts of the neighbouring Ruthwell Parish Bank, which was the world's first savings bank.

I recently dug out my copy of the 1967 Annual Report of the Annan Bank. Let's have a look at an extract from the Auditors' Report:

We have examined the Depositors' Accounts in the Books of the Savings Bank and have checked the same with the List of Depositors' Balances, which amount with interest to £1,678,456. A copy of this List certified by us is open to inspection at the Savings Bank by Depositors for the purpose of comparing the amounts in their Pass Books with their balance shown on the list.

During the year we have visited the Savings Bank in business hours and have compared 2,321 Pass Books with the relative Depositors' Accounts in their Ledger and found them to agree.

In all 6,216 accounts were open, so over one third of customers' Pass Books were actually verified individually by the Auditors. Not quite like today, I think.

And what about the Bank's investments, which totalled £1,828,753?

Certificates or other evidence representing the whole of the Investments held by the Savings Bank as at 31st January, 1967, have been produced to us and found to be in order.

The Bank's investments were extremely conservative. There's no mention of derivatives or the like, although one does wonder whether it was wise to have as much as £1,000 tied up in "Office premises, furniture and equipment."

Isn't it time for prudent and cautious local bankers to make a comeback?

Back Again

Here are my photos from the Libertarian Aliance Conference that was held at the weekend.

The two star speakers:

David Friedman
Originally uploaded by David Farrer

Hans-Hermann Hoppe
Originally uploaded by David Farrer

No Win situation...

I see that Oprah may be the next US ambassador in London. Not a good idea, I think. These days we need someone who is knowledgeable about economics.

Now, I fully understand that President Obama will want to appoint some fellow persons of colour to key positions. Who we need in Grosvenor Square is Thomas Sowell. Not only is Sowell one of America's greatest economists, he is considerably blacker than Obama. And he's a keen photographer.

It's a no-brainer. And Tom can moonlight by teaching economics to Mr Brown and Mr Darling.

Should Sowell be unavailable, Alvin Hall is the obvious second choice.

Small world

Back in 2005 I was at an Edinburgh event attended by David Cameron. The soon-to-be Tory leader entered the room and worked the crowd. He shook my hand and said: "Hello, I'm David Cameron." "Hello, I'm David Farrer," I replied. The chap to my left looked at me. Cameron turned to my neighbour and once again said: "Hello, I'm David Cameron." And my neighbour replied: "Hello, I'm David Purdie." I stared at my neighbour.

As Cameron moved on Messrs Farrer and Purdie said simultaneously "St Quivox Road?" And yes, we had both lived a few doors apart in that street in Prestwick around forty years earlier.

I knew from my mother that David Purdie had become a doctor but not that he was now a prominent public speaker. Anyway, he's now on the blogroll and having heard David speak at the Adam Smith dinner I can confirm that Dr Purdie is indeed a successful practitioner of his new calling.

Too few banks?

Here's an interesting comment from "Ben Franklin" (post number 73) on the Belmont Club:

The only other thing I would add is that I am in the advertising industry and most of the ads for sub-prime loans had dried up before the recent bail-out bill. As soon as that went through the volume for these ads went up 10 times. Whatever the government did to “fix” the problem ain’t working because all they did was just give everyone who didn’t make money the first time around another shot at the craps table.

The small business community that I am a denizen of is absolutely livid at the bailout because they see very clearly what has happened. They have good noses for how to make money and can see how the government system could be exploited by people less wise or scrupulous than they are. It seems funny this should be the case when all of the Harvard MBA’s in Washington and on Wall Street drove right into it.

So the sub-prime lenders haven't learnt and the spending goes on. But why not if the taxpayer will bail you out? I see that the American small business community opposes the US bailout but I get the impression that bank bailouts are more popular here in the UK. So why the difference?

I'd guess that it's because there are far more banks per-capita in the US than in this country. Effectively we have only five banks that cater for almost all business customers. If even one goes down the contagion could destroy any or all of the other four. In the US there's a greater likelihood that your bank is sound. So what is the British government proposing? A merger between Lloyds and HBOS reducing the total to four! Or even fewer if nationalisation continues. This is the opposite of what we should be doing. It would be far healthier if we had more banks that competed vigorously and under such a regime the failure of one bank would be less likely to be systematic.

Oh, the inhumanity

How about this?

GMAC to limit car loans to buyers with good credit

Money and Credit

Here's Brian Micklethwait's latest podcast on the current crisis. This one takes the form of a discussion between Brian and fellow libertarians Antoine Clarke and Michael Jennings. Listen to this and be assured that there are some people who understand what's going on and what needs to be done, and not done.

I saw that Guido (another long-term libertarian) is showing a picture of The Theory of Money and Credit by Ludwig von Mises. Mises was the most prominent of the Austrian School of Economics that was briefly mentioned in Brian's podcast. I looked out my copy last night and was rather shocked to note that I'd bought it in 1973! Such a pity that none of our politicians today would spend time reading Mises. How different things could be.

Day of reckoning?

It's becoming almost impossible to keep with events at the moment. I phoned a colleague at around 9.15 this morning to tell him that RBS shares had been suspended. That turned out to be a false rumour but since then both RBS and HBOS shares have lost 40% of their value. This evening it's being reported that all British banks will be partly nationalised. Bank of America is down 19% at the moment but who knows what'll be the situation in ten minutes' time?

Meanwhile I read that Iceland has arranged for a 4 billion Euro loan from Russia.

But read this:

The government of Iceland is using the threat of a €4 bn loan from Russia in exchange for a 99-year lease on the airport at Keflavik - a former American air base - as leverage to obtain financial support from the West.

So perhaps it's not yet a done deal. I suppose one advantage of a Russian takeover of Keflavik would be a cut in the outrageous price of beer in the terminal. That's a joke by the way. More seriously, I recall reading a thriller in which WW3 starts with a Soviet "container ship" running aground on Iceland and out of it emerges troops and tanks who promptly defeat the Americans and take over the US anti-submarine base. Needless to say the good guys won in that case. Now? I haven't a clue, except to say that von Mises must be laughing in his grave.