TalkRhubarb

On the Today program yesterday morning  Merryn Somerset-Webb (editor of Money Week and former stock broker) was given the unenviable task of explaining “collateralised debt obligations” in just two minutes .  Some of these mysterious financial wotsits linked to the American subprime mortgage market were blamed for falls on stock markets all around the world last week.  So how do you invigorate such a somniferous topic?  You talk about dodgy pork fillets and iffy sausages of course!  

Read on for the transcript:

MSW: “The best way of thinking about this is to go right back to the beginning and think about what bank used to do.  It used to be a bank lent you money to buy a house and then they kept that loan on their books and managed the risk themselves.  Over the last few years as the derivatives market has grown and grown they’ve stopped doing that and they’ve started taking the loan they’ve lent-the money they’ve given you - chopping the loan into little bits and passing it on.  The idea being that if they give lots of loans, bring them all back in, chop them up and then sell them on to other people, the risk of each loan is spread around the place.”

Sarah: “But of course it means your more likely to lend to somebody because you are not carrying the risk yourself”

MSW: “Absolutely.  So that has meant that there have been many, many, many more loans so much, much much more risk in total, which is then supposedly being spread everywhere.  And that is in some ways a good thing, in some ways a bad thing.  If you think of it like for example having one pork fillet that you know might be off and lots that you think probably aren’t. Instead of just taking the one that’s off and either throwing it away or perhaps eating it yourself just to be sure, you chuck it into a sausage machine and then you make lots of sausages all of which might make everybody a tiny bit ill, and that’s basically what’s happened in this market. Does that make sense?

Sarah: “It does, I’m just wondering what’s going to happen now.  We’ve got 30 seconds”

MSW: “So now, all these sausages out there and people are saying ‘I don’t know which sausage is going to make me ill, therefore I don’t want any of them’ .  So suddenly we can’t put a value on ANY of these loans that are out there at all.  Nobody wants them, nobody wants to buy them, nobody wants to tell you what they’re worth, and that has translated into the whole market as a credit problem, because these sausages -or loans - are used as security for other things”

Sarah:”And so everybody is infected and that doesn’t sound good long term.”

MSW:”Well I don’t know that it is good.  I mean the idea of spreading risk is nice, the idea of spreading so much risk you don’t know where it is, is not nice.”

Sarah: Merryn Somerset-Webb, Thank you.

She must be right, today there’s news of an E.coli outbreak in Paisley due to some dodgy cold meat from Morrison’s, and the FTSE 100’s down 0.5%…

Updated Mentioning the E.coli seems in particularly poor taste now that someone has died I do hope the others infected are all right soon.

This story on
BBC News about a guy in a wheelchair taken for a ride on the front of a truck, had me wondering if I was reading a “Little Britain” Lou and Andy sketch. But it just goes to show that truth really is stranger than fiction.

Never look on the darkside of life

It’s election day tomorrow and Ian says it’s too close to call.

I feel I must vote. Despite the combination of low turnouts and living in a constituency with a Labour majority so large that any other vote may only be useful in helping some other poor candidate get enough votes to get their deposit back. Despite the lack of credible candidates I can actually believe in. Despite a choice of where to place my vote that is as bewilderingly wide as it is infinitesimally shallow. I must because many don’t have that privilege. But mostly I must because it validates my haranguing of my elected representatives for the rest of their term.

Investment in health and education is laudable, but who’s paying for all those schools and hospitals? They’re all built with money from a PFI mortgage our children and grandchildren will have to repay. And of course Gordon Brown’s made sure they don’t know the size of their debt because PFI doesn’t appear as public borrowing. That makes the country’s finances look better than they really are.

Where is the candidate with the courage of their convictions? Where is the candidate willing to say that to deal with poverty and health and education and housing and asylum is going to cost you, and here’s how much?

And if there was such a candidate, would I vote for them?

Maybe there aren’t those candidates because they know I’m as hypocritical in the ballot box as they know I think they are in their council office.

But maybe that can change. I live in hope.

. Nomes has some great pics of the Nedbank (click picture for link). Neds are getting more and more sophisticated all the time. Now they’ve moved into financial services whatever’s next? An airline? Answers on a postcard please.

We’ve moved and our new house is totally boxtastic. I’m hoping all the boxes everywhere will provide an extra layer of insulation.
I’m asking myself several questions:
1) Where did we keep all this stuff in the flat?
2) Why did we bring so much of it with us?
3) Why didn’t I get the removers to put more of it in the garage?

I’ve spent the last 10 days painting, laying carpets, plumbing in washing machine and dishwasher and getting stitched up at the local casualty department. The latter being the result of stabbing myself with a screwdriver. So we’re settling in nicely.

Ok that’s stretching it a bit. But this article on BBC News immediately brought to my mind the Babelfish from the Hitchhikers Guide to the Galaxy. Researchers at Carnegie Mellon have created a device that translates mouthed words into one of a number of languages. With a very limited vocabulary of less than three hundred words, and only an 80% success rate, it’s clearly not a product that’s going to be available anytime soon. And that’s a shame, because I was looking forward to special promotions at Amazon along the lines of “Free Babelfish with every Hitchhikers Guide DVD”. It would be a great way to get rid of excess stock of the dire movie adaptation.

The BBC has an article on taking pictures from the Higher Art examround the country in a bus.
You can see the 10 of the pictures here.
We’ve known Josh Wilkie’s family (his is the bright and cheerful still life - picture 5) since Faith was very small. Josh is studying chemistry rather than taking his art further academically, which you might think is a shame. Personally, I feel that some things are more fun when they’re your hobby rather than your job. Why is it that professionalism sucks so much of the of the life out of things? “Amateur” has as it’s root “for the love of”, and I find the passion and inclusivity of an amateur often much more inspiring than the stand-offish exclusivity of many a professional.

faithruth.JPG

Originally uploaded by talkrhubarb.

A couple of Birthday cake photo’s from Pip’s party and two from Faith’s party are on flickr. NOt very imaginative I’m afraid, but they all had a good time even if it was exhausting for us parents!

Who remembers “Global Hypercolor” T-shirts from the late 80’s? They were the coolest thing since airtex shirts for at least 20 minutes, using fabric that changed colour depending on temperature. Because most people want to hide the fact that their armpits are warmer than the rest of their body rather than advertise the fact, it’s not their rapid demise that puzzled me so much as how they ever became de rigeur in the first place. But there’s never been any rationale to fashion that I can follow. This trip down memory lane was prompted by a BBC news article today about high tech fabrics. I’ll be interested to see if these do any better than their predecessors. Maybe they’ll prompt a Global Hypercolor resurgence. I’m off to rummage through my T-shirt drawer. I feel an ebay listing coming on…