Archive for the ‘Finance’ Category


January 5, 2020

Since the new decade is branded the ‘roaring twenties’, let’s jump right in and talk money.

In 1641, a Belgian merchant called Nicolas Bourey presented a proposal to the senate of the Lisbon câmara, or council. His document was entitled Proposta de criação de uma ‘tontina’, sistema de apostas sobre a vida—proposal for the creation of a ‘tontine’, a system of bets on life.

On life? For a betting man such as Mr. Wibaux, this sounds like the ultimate pari mutuel—but before we get to the nitty-gritty, let’s take a brief tour of stocks, bonds, perpetuities, and annuities.

When you buy stock, you secure a share in a company, and therefore your financial fate becomes inextricably tied to theirs. A bond, on the other hand, is a loan on your part—all going well, after a fixed period of time you will recover your capital, to which interest has been added on a regular basis.

A perpetuity, on the other hand, guarantees perpetual income, but the capital investment is irredeemable. Although by definition the payments never end, this is an example of the time value of money—despite appearances, the investment is finite, because payments into the far future have a negligible value.

In 1900, you could buy a gentleman’s dress shirt for one dollar; or a toddler’s tricycle; or my favorite: nine bottles of cocaine toothache drops.

Sold over the counter until 1914, these drops were a great way to clear your nasal passages. Fun fact? They still are! And if you worked out that 9 X 15 is more than a buck, your financial future is assured.

Today, that dollar would be worth about three cents—so much for your perpetuity.

And finally, there’s the annuity, where you also forfeit your capital investment in return for a fixed annual income until your death.

As people live longer, that becomes an attractive financial instrument. Say you pay an insurance company eighty thousand dollars when you retire, in exchange of an annuity of four or five grand? The insurer bets on an average life expectancy, but guarantees your payment—that means you don’t run the (very real) risk of outliving your savings.

Appealing as it might sound, society has very little uptake for this product. Perhaps because the fixed nature of the annual income is disappointing, and perhaps because people feel that if they die early, the insurance company essentially ‘steals’ money that would otherwise be bequeathed.

Enter the tontine.

The proposal is dated January 1st, 1641, only one month after Portugal regained its independence from Spain, following sixty years of occupation. The document presented before the Lisbon senate by Monsieur Bourey was short and sweet—twelve articles in all, and this was the first.

…the means through which to obtain one million cruzados, which my petition proposes, consists of having this Senate establish a company with 10,000 members who will contribute each 100 cruzados, which makes one million, and having the interest set at 5%,which amounts to 50,000 cruzados and will be distributed equally, beginning the first year and continuing for each following year of each person’s life, because as soon as they die they will not gain any more dividends and will lose the 100 cruzados they originally invested, so that the surviving investors each year enjoy increasingly higher earnings because the dividends of 50,000 cruzados will always be divided among the surviving investors until 50 years of age and therefore those who live will divide the 50,000 cruzados among themselves and this Senate will be released from the original one million investment as well as the payment of dividends.

And here is the bet on life. Literally, those that live longest will see the most.

The fact that this scheme was proposed a month after Portugal regained independence from Spain is highly relevant—King Joao IV of Braganza was desperately in need of cash—the Portuguese Restoration War lasted almost thirty years, until the treaty of Lisbon was signed in 1668. And Portugal’s timing was pretty good, since Spain was involved in the other thirty years war over the same period.

There are lessons here for America as we enter the new decade—all empires decline, and proliferation of pointless wars on multiple fronts is a key sign of decadence. Now the United States has its own equivalent of Commodus, Nero, and Caligula, history is moving inexorably into a new cycle.

Bourey is long forgotten, much like the decision on his proposal—the tontine, however, lives on.

In 1653, an exiled Neapolitan businessman proposed the same idea to the French king. The Neapolitan was called Lorenzo de Tonti, and the financial scheme bears his name—like Amerigo Vespucci, Tonti named something he never discovered, and the name stuck.

Tonti ended up in the Bastille for his troubles, but shortly thereafter Louis XIV used the tontine to finance the Nine Years War.

A very different Europe in the year 1700, only thirteen generations ago.

In Europe, tontines became a resounding success and were used by many governments to fund war. Why were they attractive to ordinary citizens? Perhaps because we are eternal optimists about our lives, and the appeal that we will benefit more as others disappear is powerful.

Where an annuity is boring, the notion that every time one of the members of the ‘company’ passes my income increases, made the tontina a winner. It also resonates with the concept of not outliving your savings—on the contrary, if you outlive your peers, your income goes up, instead of down, since you may eventually become the grim reaper—of everything.

As the United States shifted to an industrial economy in the late XIXth century, the tontine became a key insurance instrument—first started by the Equitable Life Assurance Society, later to become AXA.

The agricultural society of the US provided a family safety net for the elderly based on a common abode and on the distribution of tasks across generations. As more people migrated to factory work in the cities, that support system disappeared, generating a necessity for other ways to provide for old age.

The tontine was a solution to that problem, releasing children from the encumbrance of their ageing parents. By 1905, six billion dollars were held in tontines, 7.5% of US wealth.

As with every good idea humans ever had, perversion and evil soon appeared on the scene—by the early XXth century, tontines were illegal in many American states.

The concept of betting on life was also widely seen as betting on death—of others. As a consequence, a number of murder mysteries, novels, and movies were spawned by the tontine—all shared a common plot, where members of the company were disposed of to enrich the survivors.

If all this sounds tricky, just remember the tontine is a special sauce—a culinary supremo of greed and fear.

And if you live long enough, you’re guaranteed to win the lottery.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Asian Onions

December 1, 2019

One hundred Indian rupees is worth $1.39 this morning. That’ll buy you one kilogram—just over two pounds—of onions in Mumbai.

In the US, inflation hovers around two percent, and in the EU, the numbers are about the same. In the developed world, inflation is a quiet ogre, but as soon as it stirs, trouble brews.

High values can throw an economy into a tailspin—money becomes worthless, and society reverts to barter.

When you need a log scale to count your money, the giant’s on the rampage.

But Zimbabwe is an extreme example—in Venezuela, the inflation over the past three years was only fifty-three million percent. Other countries have roared into the hundreds and stayed there for decades—Argentina averaged 196% per year since the Second World War.

High inflation over long periods creates a systemic parallel economy where nations live in a nebulous region of black market currency trades. The increase in money supply to meet spending requirements drives up prices, at which point governments print more money, and a stable economic cycle plunges into chaos.

Chaos theory would merit a lifetime of articles, but the key principle is that small changes can cause huge effects—the non-linearity fascinates me, since it can be the cause of incredible disasters.

The effect of hyperinflation is amazing in terms of numbers theory, but in the real world the shifts in state, as the system moves from a stable limit cycle to chaos, can only be qualitatively predicted—by that I mean that you can envisage the types of changes, but you don’t know when, where, or how they’ll happen.

In economic terms, a worthless currency leads to a collapse in imports, since foreign goods can no longer be paid for. In the transportation sector, that means less vehicles—no new ones, no spare parts. Distribution of essential goods stops—food, water, medicine…

People lose their jobs, or are paid a fraction of what they need to survive—think Venezuela right now. And I do mean think. Please read the next paragraph, then just close your eyes for a moment and imagine what it would be like if you were in that position today.

President Maduro (the name means nutcase in Portuguese) increased the minimum wage by 275% in October 2019. Last month, Venezuelans began earning a base of one hundred fifty thousand bolivars, or eight bucks. That buys them nine pounds of meat, or five ounces a day—one hundred forty grams, if you prefer. To make it easy, a gram of meat daily per thousand bolivars per month.

Job losses lead to hunger, hunger leads to strife, both lead to exodus, and ultimately to war for those that remain. War leads to death. Welcome to chaos.

It’s hard to say exactly when the butterfly beat its wings, and just how fast or slow it really was, but the Bolivarian Republic of Venezuela was established only twenty years ago by Hugo Chávez—in a country with the largest oil reserves in the world, a mere three hundred billion barrels, or half the volume of Lake Geneva.

Onions in the market in Mumbai in October 2019 (courtesy of Bloomberg). India is importing from Egypt, and even from the Netherlands.

Which brings me to onions. India, and Southeast Asia in general, use the onion as a universal staple. The gastronomic delights of English food made me fall in love with curry at an early age, and a sure way to learn about a country is to explore its cuisine—yup, eat its food.

To understand a country’s regional dishes is to dive into its diversity—some nations have it, be they large or small—China, India, Italy, Portugal—and some, like the UK, do not.

The Indian onion is a fascinating, and highly divisive, economic indicator. At present, with inflation running at 4.6% year-on-year, vegetable prices are up twenty-six percent.

National politicians are plagued by onions—in the west and north of India, high onion prices are good news, because the staple vegetable is grown mainly in the states of Maharashtra, Gujarat, Karnataka, and Uttar Pradesh. However, in other parts of the huge nation, an increase in onion prices, especially on the present scale, is  extremely unwelcome—hapless Indian politicians are damned if they do and damned if they don’t.

India is a rare beast among huge nations—the largest democracy in the world. In 2019, there were nine hundred million eligible voters, and sixty-seven percent of those turned out to vote. Narendra Modi won, but the economy is hounding him—with the exception of brahmins and pure vegetarians, those voters are onion enthusiasts.

A combination of drought and monsoon rains hit the onion harvest hard, tripling prices, and halving consumption. All Indian onion exports to neighboring countries are currently banned, causing general onion angst in the region, and the government has cracked down on onion smugglers.

I don’t suppose truckloads of smuggled onions will be impossible to detect—I can picture the highly trained Indian frontier K-9 brigade pawing their way through a load, weeping on the job and barking in protest, as their incredibly sensitive noses are violated by the pungent prevaricators.

The Indian government’s export ban caused a seven hundred percent price jump in Dhaka, the capital of Bangladesh. Nepalese consumers considering alternatives apparently view Chinese onions as ‘big and flashy’, which doesn’t sound like a ringing endorsement, so (and after suffering through articles talking ad nauseam about ‘the onion crunch’ etc etc) I can only conclude that it’ll all end in tears.

India is also busy importing onions—the universal base for a curry, whether you’re talking about a South Indian Avial—their website motto is ‘eating plants till we photosynthesize‘ so perhaps a spot of biology revision is in order—or a Mughal Rogan Josh, which is a case of invasive gastronomy from Iran. In passing, another humble contribution to Indian cuisine was the chili, supplied by the bearded invaders of The India Road, having first been brought to Europe by Columbus.

In this wonderful modern world of onion commerce, why not the UK? is there yet another great trade deal in the making?

Hold on to your onions, Boris, there’s hope for you yet.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Private Nyet

November 17, 2019

Netflix recently carried a docudrama called ‘The Laundromat.’ It was billed as an expose of the Panama Papers, so I’ll give it a spin, if you’ll excuse the pun.

Even though the movie was directed by Steven Soderbergh, I was disappointed—as so often happens with TV, the book is much better, but no one reads anymore—I was on four airplanes last week, and I checked—no one reads.

The book is called ‘Secrecy World’, and the guy who wrote it has won a couple of Pulitzer prizes—it shows. The story of Jürgen Mossack and Rámon Fonseca is fairly well-known, not least because between them they set up over two hundred thousand shell companies, servicing clients from all over the world.

Their clients had one thing in common—a keen interest in hiding their money—some due to ill-gotten gains, but many simply to avoid taxation.

Rodents not only access your food storage, but many possess their own larder.

Hiding money to avoid parting with any or all of it is part of human nature—it’s a reflection of our biology; many animals hide their food from others—that’s why dogs bury bones, but the canine banking system isn’t particularly sophisticated when compared to ants or rodents, who use underground galleries, scatter hoarding, and other tricks.

Behavioral traits in primates inevitably led to human socioeconomic systems, and to societal development of rules and regulations—many of these, of course, are a way of taming our animal instincts.

Animals kill each other, and will readily steal food or sex—humans, but many other vertebrates also, found ways to develop societies that allowed peaceful cohabitation—this meant controlling our basic instincts.

But deep down, many of us revert to our unpleasant origins—if we can hurt, we hurt, if we can take, we take—and those in positions of power, who are better placed to take advantage of the system with impunity, abuse the system. It’s worth remembering that impunity means without punishment.

Yes, John Acton had it right: “power corrupts, and absolute power corrupts absolutely”. The full quote is wonderfully prescient:

Power tends to corrupt, and absolute power corrupts absolutely. Great men are almost always bad men, even when they exercise influence and not authority, still more when you superadd the tendency or the certainty of corruption by authority.

A few months ago, Reuters provided an illustration of this abuse, courtesy of Rosneft, the Russian state-owned oil giant.

Rosnest private jet flights to holiday paradises, analyzed by Reuters. As usual, social media is the big giveaway.

By comparing the movements of Rosneft corporate jets with posts on Instagram, Facebook, and other havens of self-indulgence, the news agency was able to piece together a remarkable collection of excursions by the oil major’s top brass.

The company would not comment when confronted with the fifteen Maldives trips, and double that to a range of European destinations, so the operative word is ‘allegedly’. Nevertheless, Reuters strongly suggest that CEO Igor Sechin, or relatives and friends, happened to be at the same vacation spots that the jets visited.

In all, the news agency tracked two hundred ninety corporate flights between 2015 and 2019—ninety-six of them occurred on long weekends or Russian public holidays.

Sechin is close to Putin, who himself features prominently in the Panama Papers.

The most interesting fact I got from the book was the name of one of the most secretive fiscal paradises in the world. Whereas most offshore centers are small islands that have little else to offer apart from tourism, this place stands head and shoulders above the rest.

It’s called the United States of America.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.


November 10, 2019

In November 1987, a schmaltzy English band with the very eighties name ‘The Housemartins’ came up with a tune called ‘Build’. Two years later—to the month—the Berlin Wall came tumbling down.

You can get bits of the wall on eBay, where you can also buy a French commemorative Berlin Wall 2 € coin for double that price—the sort of inflation that would fire the juices of European Central Bankers.

Just as the First World War was ‘the war to end all wars’, so the Berlin Wall was the wall to end all walls. Or so we thought…

It only took five years for another symbolic wall to be built—this one separating Israelis and Palestinians, and since then the wall business has been, if you’ll allow me, going great guns.

The tragicomedy of the Mexican wall continues—yet another dumb idea in the litany of stupidities that characterize American leadership since January 2017—and across the free world, wall-building continues with enthusiasm.

The orange man is fond of grass roots analogies—concrete, coal, barbed wire, and Muslims who die like dogs—but the real walls out there are a metaphor.

A couple of years ago I visited someone in North Carolina—my host had a dog, and I summoned the hound, who was about thirty feet away. The animal was tempted and wagged his tail enthusiastically. It ran eagerly to about ten feet of me, then stopped short.

I understood that the dog sported some kind of electronic collar, and crossing an invisible divide in the garden would deliver an electric shock—the dog clearly understood it too.

No, the real walls are electronic, digital, observational—the ones you can’t tunnel under, climb over, or walk around.

If you’re in doubt, try to use WhatsApp in the Middle Kingdom, or access Google from Shanghai—they call it the Great Firewall of China for a reason.

With perfect timing for the thirtieth anniversary of the fall of the Berlin wall—November 9th 2019—I received a copy of the report ‘The Business of Building Walls’ prepared by the Transnational Institute (TNI), which is the international arm of the Washington, D.C., based Institute for Policy Studies.

I suppose it stems from a lifetime of academic work, but whenever I read a document, my first jump is to the acknowledgments and references. The first tell me where the money came from, and who supported the work, and the second provide me with confidence, or lack of it, on the content I’m about to read.

In TNI’s case, I took the trouble to learn about the organization’s history—there are things I like and others I don’t. But overall, I didn’t get the feeling I was dealing with a product from an organization funded by Russia, MBS, or a friend of Rush Limbaugh—there, I’ve offended everyone.

As you suspected, the business of building walls is big business indeed. The global market is estimated at about eighteen billion dollars per year, with a growth forecast of at least 8% APR.

In Europe, we’re talking about one billion dollars spent in the last thirty years—since the other wall fell. That doesn’t seem huge, but the point is the direction of travel—the European External Borders Fund for the period 2007-2013 was about two billion dollars, and the current budget (Internal Security Fund – Borders Fund) is closer to three billion—Fortress Europe is worried.

The report highlights three European companies that have done themselves proud in this burgeoning market.

A Frenchman, an Italian, and a German walk into a bar… it sounds like the start of a bad joke, but we’re talking about Thales, Leonardo, and Airbus—big business is no joke.

Unless you’re in the millieu, you probably haven’t heard of the first two. Thales pops up occasionally when you’re buying something on the net—they do security certificates, and IT arcana in general. They also recently bought Gemalto, a Dutch computer security firm. But make no mistake, Thales is big, as in twenty billion dollars, and Leonardo is about one third of that size.

Leonardo brings to the table—or to the border, in this case—drones, satellite technology, and a number of other building materials essential for today’s modern wall. You can see a snippet here.

Finally, Airbus is billed in the TNI report as an arms company—I’m flying on one of their planes first thing tomorrow, and naive old moi, I never thought of them as any such thing, but Mr. Google tells a different tale.

These companies are a part of the wall-building military-industrial complex, but they are certainly not the only ones. TNI lists a host corporations that sell razor wire, visa verification, and surveillance of people—inevitably, as in the post-911 US, this will include citizens.

Fascinating reading, with the caveats I mentioned earlier—for instance, at the forefront of OCEANS 2020 is Leonardo, not Airbus. Lobbying plays a big part in all this—since 2014, the three companies I focused on have held 226 registered lobbying meetings with the European Commission.

In that sense, nothing changes—but for the technology, everything changes, and it changes fast.

Wall-building nowadays has morphed like the life of Housemartins’ former bassist Norman Quentin Cook—having already changed his name from the equally boring Quentin Leo Cook—in 1996, he took a quantum leap and reinvented himself as Fatboy Slim.

Right here. Right Now.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Dead and Brexit

November 3, 2019

I got a late start this weekend because of the rugby world cup—I have a soft spot for the Boks, partly due to the tales of good friends who returned to Europe from South Africa, (what was then) Rhodesia, and the ex-Portuguese colonies.

When excitable young teens—and we were all pretty crazy—tell stories to each other, it’s as if you’re there yourself—I knew Jo’burg, braai, and rugby intimately from pictures in my mind.

In 2001, I was down in the Cape with another group—one night, a bunch of us were this close to getting killed by a freight train on the road to Saldanha Bay.

Afterward, I drank a bottle of Pinotage from head to toe, marveling at the fact I was still alive. I fell asleep with the TV on and woke at 4 a.m., bleary-eyed. I kept looking at the news channel—all I could think was, I should be on there!

Seeing the informal housing—a term I first heard from a white South African friend—of the Cape Flats, Mandela’s cell on Robben Island, and the big five running wild, brings home the pain and beauty of the rainbow nation.

To watch the Springboks win the world cup this morning brought tears to my eyes. It’s now on a twelve-year cycle: 1995, 2007, and 2019—how very Chinese of them. South Africa clearly lives its best life in the Year of the Pig—and although 2019 is an earth pig, for the South Africans, it’s clearly a golden pig.

I’ve been observing the antics of the UK general election this week, and in the midst of the mayhem, once in a while the arrogant judgement of the inevitable English rugby win would drop in—unlike Brexit, this was an outcome that was never in doubt—a one hundred pound bet on Friday would have made you three grand.

And since I’m linking (sorry) Murdoch’s organ, to paraphrase Private Eye magazine, I must draw your attention to Farage’s campaign statement Friday—very little was covered by the networks, which fuels Trumpian deep state conspiracy theories—but The Sun, in its infinite Merdochian wisdom, put it on YouTube.

Farage is dangerous—he’s a combination of Trump’s populism and Bannon’s intellect—but he talks better than Trump and dresses better than Bannon. To be fair, neither is a big ask.

Nature’s revenge, according to Private Eye, after Boris claimed ‘I’d rather be dead in a ditch’ than stay in the EU past Halloween.

Now that England’s disillusionment with their national side is complete, we’re left only with the fray. And what a fray it will be.

The whole Farage thesis (and I suffered through it all) is predicated on one idea: a Leave Alliance, where the Brexit Party grabs votes in the north of England—deep Brexit country—and doesn’t split the conservative vote in the home counties—the kicker? Ditch the deal and go for no deal.

Boris is squirming harder than the English forwards, while the Fleet Street press goes nuts about Corbyn, the EU, and the NHS.

Interviewed on Farage’s LBC talk show, the orange man claimed he had no interest in the NHS—just trade. Ordinary Brits scratch their heads at this gem, wondering if the man doesn’t understand the link between the two.

As we approach the 12th of December, all sorts of interesting possibilities arise—mostly in the sense of the Chinese proverb.

The Tories are unlikely to get a majority, despite the polls. This is particularly because the Labour Brexit voters in the north of England will not hold their nose for Boris. They’ll happily vote Nigel, in the same way the US base voted Trump—ordinary folk placing their trust in silver-spoon tycoons with whom they share nothing but delusions.

A post-ballot deal between Boris and Nigel will mean a no-deal Brexit and a compound fracture for the Tories—interesting times ahead there.

Voters from the middle class (Tony Tories?) who might swing left for a Blair clone will not hold their noses and vote Corbyn. With promises such as a lower cap for death duties (I know, inheritance tax is so much more millennial…) and a ban on public (i.e. private) schools, this is a man who has shot himself in both feet. Brexit ambiguity and the promise of a second referendum on yet another deal—which Labour will putatively negotiate but won’t say it supports—makes for a narrative that confuses the party, never mind the people.

Enter the Lib-Dems, who have a clear statement on Brexit. If they win, they’ll ditch it. This is admirable in its clarity, but there are two problems—the first-past-the-post electoral system doesn’t work in their favor, and folks will be skeptical of a one-idea party: you can’t mandate a government for four years under the concept of staying in.

There’s also another detail—the Lib-Dem leader is a Scot, and the English electorate won’t be thrilled with that, although, goodness gracious, no one would ever say so, m’ dear!

So the final permutation is a post-electoral Labour & Lib-Dem deal—which is possible, with the Lib-Dems holding their noses as they dilute their remain pledge and go all out for a second referendum that includes the option of a renegotiated deal.

But that assumes the same Labour MPs who have sat on the fence on Brexit for three years will suddenly become fans of games with frontiers—it’s a knockout!

And just to spice it up, the orang-u-tan arrives in Britain for a NATO summit on December 3rd, a week before the hustings—I hope Boris has a pair of brown underpants at hand.

On that note, I leave you with a prediction and a solution.

The prediction is obvious: we have all the conditions for a hung parliament, and the great Brexit soap continues ad nauseam.

My solution is a shift to Hong-Kong Sevens.

Labour and Tories: guys, sit this one out and enjoy Christmas. Let the Lib-Dems and the Brexit Party come to blows, with the SNP and DUP thrown in the mix.

That lot can settle Brexit in a heartbeat, since their positions are both crystal clear and poles apart.

Before you can say bye-bye Barnier the business will be done—then you can all get back to the full fifteen-a-side game.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.



October 26, 2019

Last Saturday night, I got touted.

I’m using the verb in an unusual way—by convention, when something is touted, it is promoted or claimed.

But when I say I got touted, I wasn’t in any way the object of promotion. On the contrary, I got screwed.

Back in the day (and they’re still around) a tout might approach you at the subway exit, or in a park next to a sports stadium or a concert venue. The show may vary, but the game is unvarying.

I grew up with analog touts—always guys, always shady, slightly more presentable than a heroin dealer, slightly less pushy than a mugger.

The typical tout would operate on behalf of someone else, the toutmeister—the guy with the capital to purchase a stock of tickets in the first place, and to take the financial risk—just as with drugs, and so many other businesses: risk it, buy it, flog it.

But where a human tout might nag and cajole you, there were only three ways he could scam you—falsely persuade you that box office tickets were sold out, hike the price, or sell you a fake ticket.

That last one is a little tricky—to the extent I will only find out in December if the tickets I was touted with are genuine—there may be a Touted Part II.

Many years ago, an English guy I knew was driving along in southern Portugal. A traffic policeman flagged him down and he pulled to a stop by the side of the road, by a row of olive trees. The day was hot, and the cop waited until the dust settled on the verge; then he walked up to the Ford and saluted.

Documentos,” he said.

The Englishman only knew two words in Portuguese. Cerveja—beer, and obrigado—thank-you. In those days, Portuguese people got by in French better than in English, but the two words, together with a little mime, usually did the trick.

Documentos,” the cop repeated.

The man handed him the car registration. The policeman wanted ID.

The Englishman reached into his wallet and produced a single quarter-sheet of paper. It was official-looking, contained his name in an underline at the top, and a list of items below that, together with some numbers and a signature.

The traffic cop scrutinized the British driving license—he had never seen one before. He examined the document again, unable to fathom what any of the words or numbers meant.

Boa tarde.” Satisfied, he handed back the documents, saluted, and headed to his vehicle.

The Englishman put the paper back in his wallet and drove off, grinning. This would make quite a story in the pub. The quarter-sheet was a laundry bill from a Hertford dry cleaner, made out to Mr. Jack Ramsey. Itemized were one pair of trousers and three shirts.

Fake tickets are not easy to spot.

Last week they finally got me—I was touted online. I paid eight times more for a rock concert ticket than the face value printed on it. No redress, no way back.

From time to time, we all find ourselves in situations where we spend more than we planned—I have two cures for that: don’t make the same mistake twice, and work a little harder the following week.

So, I can’t get my money back. But I have a weapon. The pen is mightier than the scam, so let’s get into the weeds.

I was touted by Viagogo, one of a number of sites that specialize in the secondary market for tickets. The company is legally based in Geneva, and therefore neatly dodges EU regulation on consumer protection.

When I looked into Viagogo, I found out that it has been publicly condemned by the UK’s digital minister, Margot James—I didn’t realize Britain had such a thing, and she’s also notched up points in my book by resigning from government on July 18th, 2019, to vote against the prorogation of parliament.

I really didn’t want to go down the hellhole of Brexit today—compared to that, a tout is but a fart: smells foul but disappears quickly—but Margot further warmed my heart by having the whip removed on September 3rd, in what will become known as the Boris Brexitovsky purges.

So, Ms. James told BBC Radio 5 Live that she warned consumers away from ticket reselling platform Viagogo, branding it “the worst”. Apparently, the company had already fallen foul (there’s that smell again) of the British Advertising Standards Authority for imposing “hidden” fees on customers.

Ed Sheeran has also condemned the Viagogo touts—didn’t cheer me up much, but at least I’m in good company.

Digital touts, or more accurately, internet touts, have provide a major disservice to music—and that, friends, is a capital crime in my book.

You may be familiar with the concept of bots. Just as you can read me on your tablet or cellphone, so a bot can access this page, traverse all other links, and collect a history of my mentions of the words ‘sex’, or ‘China’, or ‘orang-u-tan’.

Bots are what allows Google to index pages and process them to help you find stuff. They’re also responsible for the annoying Captcha stuff, and the occasional requirement to click on images with buses—Boris could do that for a living rather than managing a dog’s breakfast.

The secondary market sites got into the bot business—they sent out bots to buy online tickets to concerts, sports events, you name it. Digital touts therefore sucked out the primary market—by the time you heard about a concert, the primary market was empty.

Musicians want fans, and fans want affordable music. This sets door prices, until robotouts screw the whole system—at that point, ticket prices skyrocket, and the audience shifts towards the wealthy—as Lennon famously said in the Albert Hall, ‘the rest of you, just rattle your jewellery.’

Viagogo traps you using four tricks. First, they have a bar at the top of the page where you select the number of tickets you want. My magic number was 2, and I was shown a price. In very small print, and a discreet color, the column header says:


No matter what number you select—customers in good faith will choose the one they need—the price never changes. Even when they break down net costs and tax, they only ever use the single ticket price, with e.g. 4X slyly inserted off to the side.

Second, as soon as you make a choice, a timer window appears, counting down the seconds to pressure you to complete your purchase.

Third: never, throughout the process, are you ever told the face value of the ticket you are buying.

Finally, the total amount you’re spending is not shown at checkout, only in a post-purchase confirmation screen, aka a gotcha screen.

Touts in the UK, Scalpers in the US. Scum of the earth anywhere.

After I fell for this scam, I wondered if I was the only fool in the market… sadly, no. An excellent article published this August in Wired tells us:

Favourite band coming to town? Good luck getting tickets. The touts have already snapped them up – and they’re now listed for ten-times the face value on Viagogo and StubHub. But digital touts may be facing extinction. New technology is making mass buying more difficult, governments are closing in on rogue resellers and even Ticketmaster is shutting down its own resale sites. The only problem? Getting hold of on-demand tickets is unlikely to get any cheaper or easier.

I found out Viagogo has company. Like the four horsemen of the apocalypse, there’s Viagogo, Stubhub, Seatwave, and Get Me In. Four unpolishable turds.

Notice how often I’ve written Viagogo’s name—ordinarily I wouldn’t do this, but I want Viagogo imprinted in your mind, and I want to increase the visibility of this article when some poor sucker searches for Viagogo on the net—I just refuse to link them.

Companies like Viagogo are a collective danger—they disenfranchise the less well-off, make culture less accessible and more elitist, and help widen the gap between the appointed and the disappointed.

These are the recipes for the politics of extremes that has invaded Western society, only three generations after World War II.

As for Viagogo? To use a popular, if unfulfilled, promise, may they die in a ditch.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Hourglass Politics

August 23, 2019

Six in the morning, in the middle of the Scottish lowlands.

A timid dawn casts a faint light over layers of cloud, and seagulls cry overhead—weird, because I’m equidistant from Glasgow and Edinburgh, about as land-bound as you can get in this country of highlands and islands.

But there you go—the seagulls, like the humans they poop on, live in interesting times.

The hourglass is an apt metaphor for the countdown to Brexit—the sand trickles steadily downward with sixty-nine days to go. A political segment of the UK is scheming and plotting to give the hourglass a sharp tap, just as the last grains of sand pass the isthmus, while another is hell-bent on running down the clock.

Here in Scotland, any Brexit conversation quickly shifts to the independence debate—the Scots don’t feel represented by the English, which is certainly justified when you study their history.

A pro-Brexit punter on the radio yesterday explained that Britain had two options—no hope and bob hope—a reference to Bojo, the current UK prime minister Boris Johnson, who is an incarnation of characters from the British comic Beano.

Johnson’s former employer at the Telegraph, puts Beano Boris into perspective.

He’s a sly fox, disguised as a teddy bear.

Bojo got himself photographed yesterday with a shoe plunked on Macron’s coffee table—a pose sure to find favor with the more xenophobic Englishmen—while Macron pointed out, as Merkel had done the previous day, that Europe is more than happy to accept a deal as long as the UK provides a solution to the Irish border question.

What Macron and Merkel don’t want to do is to give Boris an excuse to blame France or Germany before the British people for a no deal. Both were at pains to throw the door wide open, in the knowledge that there is no solution currently acceptable to the Irish.

The smaller nations in the EU smile upon this whole shenanigan, which binds them closer to Europe—after all, this is the first time in history the Irish are successfully thumbing their noses at Westminster without any loss of blood.

The Dutch, Belgians, and Danes dwell on Germany, the Croatians on Italy, the Portuguese on Spain. All the little guys know what it means to get fucked by large neighbors.

The most likely outcome of all this teletubby frolic is that the UK parliament will block no deal, forcing a general election. It’s difficult to see how this can take place before Halloween, but it’s easy to see that the Bojo game will not force a no deal at this time, but aims to win a strong Tory majority at the ballot box that legitimizes his actions.

A Beano-style depiction of Bojo, alongside another paragon of British esoterica, often spoofed as discussing the economics of Carthage.

The opposition are, to use a technical term, screwed, because the alternative to a parliamentary block is effectively a no-deal exit.

General elections it is, which promises a spot of Christmas chaos.

A pro-Europe win, somehow binding Labour and Libdems, brings the threat of a Corbyn government—many Labour voters don’t want that, and no one believes in Corbyn’s pro-Europe credentials—Britain would live the irony of having a remainer, Theresa May, trying to get them out, and a leaver, Corbyn, trying to keep them in.

A pro-Europe win, for many, will also mean a betrayal of the will of the people, as expressed in the Brexit referendum—a second referendum has the same effect, should Brexit be defeated.

A pro-exit win will create the conditions for government policy to be supported in parliament. The question is whether that will force the Tories into an unholy alliance with Farage’s Brexit party, whose success in the European elections earlier this year was largely due to a combination of Brexit-dithering by parliament and to proportional representation.

But the hourglass metaphor extends well beyond Brexit. The consequence of an ever-widening income gap between rich and poor, together with the steady erosion of the middle class, is political extremism.

The rotund, Humpty-Dumpty-like politics of the center, a bell-shaped curve with a narrow band of nutters at either end, has been replaced by a Dolly Parton distribution—twin peaks, if you will—with two separate mounds of fruitcakes.

This is the politics of Italy, Spain, Greece, Holland, Britain, and… oh yes, the United States. The opposite tends to happen in nations where that middle class is growing—even if the political systems do not allow democracy to thrive, Asian countries where the economic extremes are becoming less polarized will tend to a more rotund political landscape.

It’s unsurprising that the shape of wealth distribution will determine that of political preference, having itself at one time been molded by political choices. This is clearly a cyclical system, where those radical preferences will once again shift the form of the wealth curve—the problem lies in the fact that we are all sorcerers’ apprentices—like Dias and Columbus, we sail uncharted waters.

A further complication is that apparently well-behaved, linear systems can easily turn chaotic. In nature, than spells floods and typhoons—in humans, it translates to war and bloodshed.

History teaches us not to underestimate the consequences of our actions.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

The Rogues

June 20, 2019

After spending a whole week in Ireland and England, during which both the weather and politics were disgraceful, I concluded that the U.K. is having a miserable June.

I flew out of a cold and wet Belfast, and by the time I got to Paddington the rain was coming down in sheets. Even the Ubers were begging off—it took three attempts before a Romanian in a silver Mercedes made it to the pick-up point.

The other two drivers who pulled out were also foreign, as was the waiter who brought me dinner, all the receptionists at the hotel, and most of the staff in the office block where my meetings took place.

Later in the day, when Bojo, as Private Eye calls him, took a significant lead in the hustings to become leader of the Tory Party, and therefore prime minister of the U.K., I heard Boris senior on the BBC. Stanley is an avid attention-seeker, and he was more than happy to comment on Bojo to Auntie Beeb.

‘Have you spoken with your son yet, Mr. Johnson?’

‘No, but he sent a message using something called WhatsApp. It’s a new thing, have you heard of it?’ he asked the interviewer (who replied ‘No’).

The Boris team is keeping the Beano-like character under wraps because the man has two things in common with Trump—crazy hair and a natural bent for shooting himself in the foot.

In Private Eye, Boris and his acolytes are often displayed as a set of Beano characters.

With such a significant lead (114 votes, to 43 for his closest contender, Jeremy Hunt), the best thing for Bojo is to keep his mouth shut to avoid clangers.

After the Conservative Party received the trouncing of a lifetime at the hands of Farage’s Brexit Party—the irony that it happened in the vote for the European elections, which the UK should by then not have been a part of, was missed by no one—many feel that stonewalling Brexit will be the end of the Tories.

As I dealt with both business and pleasure in London, it again and again became apparent that the transport and hospitality industry will collapse without foreigners. I recurrently heard Italian, Spanish, Portuguese, as well as the languages of Eastern Europe—you’ll hear them in many key sectors of British society, of which the NHS is the most important.

Nevertheless, the people have spoken, so leave England must, dragging with it the whole of the UK—of the other three, only Wales (pop. 3 million) voted to leave.

The EU set a limit date for Halloween (who says Brussels doesn’t have a sense of humor), and all the Tories running (of which there are really only three or four in the running) strenuously emphasize that Britain will leave—the degree of stridency about leaving without a deal is what sets them apart.

How easy is it to leave without a deal?

To analyze the question, let’s first look at the opposite—leaving with a deal. Theresa May failed miserably in her attempts to do so, Brussels has repeatedly stated there will be no further negotiation, and Boris is intensely disliked by the European Union.

Some of the other contenders for the Tory leadership have been involved in the Brexit negotiations—they all know exactly what’s achievable, i.e. nothing. In their hearts, the British also know this.

The House of Commons will not support the current deal. But will also not support a no-deal exit. One of the ironies of this process is that many Labour constituencies who voted leave have a ‘remain’ member of parliament. Those MPs, who sit in Westminster, are stuck between a rock and a hard place—they are fully aware that their constituents will crucify them.

If those MPs back a no-deal, the consequences for livelihoods of their voting base will be considerable—the voters will blame them and throw them out. If the MPs do the opposite, their voters will react with fury—betrayed by their representative, who will be thrown out.

Unfortunately, for the conservatives, much the same is coming. If parliament finally approves the same deal (since no other deal is likely), hard-line Brexiteers will be incensed. If it doesn’t, and Johnson forces a hard Brexit, a general election is almost inevitable.

To force a hard brexit against the will of the politicians, the only option is to prorogue parliament—effectively suspending it over the limit date so MPs cannot block the withdrawal. The main (pro)rogue, Dominic Raab, is out of the race, but there are still a few rogues left.

The debates have been appalling, without a glimmer of an idea. Today, only four candidates are left, and by tomorrow we’ll be down to Bojo and Hunt. Of course, it may be that the usual Tory skulduggery steps in and chucks the current second, replacing him with Gove or even Sajid Javid—Rory Stewart was apparently only carried through so Tories could hear him debate.

Historically, as both Thatcher and Major discovered when they beat the front runner, the top dog doesn’t win—maybe when the vote goes out to the Conservative Associations the  curse will rise again.

Whoever wins, the exchange rate of the pound will flutter on the wings of the forthcoming discussions, reflecting ebb and flood. The coming months are short—July means vacation time in northern Europe, August is the same in the south—before we know it, there’ll be trick-or-treat.

One or the other, but not both. Five days after Halloween is Guy Fawkes night—maybe this time the houses of parliament really will blow up.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.


May 26, 2019

I considered May Day as an alternative title, but I chose the more panic-stricken naval distress call.

The resignation of the British prime minister has been on the cards for a while—and now it’s official. If she were a monarch, her epithet would have been May the Moribund, the Westminster equivalent of the zombie.

Hard-core supporters of Brexit love to point out three things:

  • Contrary to doomsday predictions, the UK has been doing fine after the referendum vote in 2016
  • Border delays or paralysis due to a no-deal scenario are a conspiracy of Project Fear
  • The EU needs the UK far more than the UK needs the EU, so trade agreements are assured

I don’t agree with the doomsday stuff, but then only fools believe economic predictions. The whole concept lacks a paradigm, and empirical predictions for both economics and weather only work in the very short term and in the long term—though that last one is questionable.

Apart from  the lack of a paradigm, economic forecasting is inevitably flawed because it deals with humans. It can potentially work if it is unadvertised. The prediction is made, locked in a drawer, and revealed a year later, whereupon it is found to be reasonable. The Achilles’ heel is that it has to be disclosed to be acted upon, at which point humans react, thereby shifting the model conditions and outcome.

But my main objection is because people react, they don’t proact—in other words, they haven’t acted yet because there was nothing to act upon.

There still isn’t, but it’s a comin’ to an economy near you. The UK is now firmly between the devil and the deep blue sea—the ocean is the forthcoming rapprochement with the US, if a hard-line Tory such as Johnson or Raab becomes prime minister. Trump will encourage this, partly because he sees Brexit as a confirmation of his line of isolationism.

May succeeded Cameron following his resignation, and the appearance of a substitute Tory now will set a poor example of yet another unelected prime minister—Brits like to choose their leaders at the ballot box.

The trouble with calling elections is the Tories will lose—and that’s where the devil comes in.

Jeremy Corbin is a red rag to the business bulls, and most in the conservative party are scared to death he might show up.

If a Tory brexiteer takes the helm, WTO rules are the most likely outcome—the deadline is Halloween, and many EU politicians feel that the dog and pony show laid on by the UK since 2016 is sinking the union itself and must be stopped.

As usual, ordinary Brits are completely self-absorbed, and completely fail to understand that most citizens of Europe don’t give a shit about all the UK toing and froing.

Border issues will be a reality, at least for some time, because national connections are generally difficult unless simplified through agreement, which is precisely what EU membership provides.

Trade, on the other hand, is a different matter. Even with a no-deal exit, trade deals with Europe will in time be forged—it just won’t happen now.

What will happen now is the following, if my crystal ball is to be trusted. Despite (or perhaps because of) his buffoonery, Johnson will be the next prime minister.

The UK will move to leave the EU as quickly as possible. Since no alternative deals are on the table, or apparently acceptable, this will be a fracture, rather than an amicable parting. The UK will attempt to quickly strike bilateral trade relationships.

Quick is tough, as Trump learned the hard way with NAFTA and China. It’s easy and populist to break agreements—think Paris Climate Change, Trans-Pacific, and Iran.

Doing nothing after is possible, perhaps even popular, but unless you’re addicted to the poison cup, consider why Obama and others entered into treaties in the first place—the answer, of course, is for the common good. It’s possible that previous leaders misjudged those benefits, and the conditions thereof, but it’s unlikely—there is only one world power in the field of poor judgement, and that’s the orange man.

The UK joined the common market for the same reason, i.e. the common good, although a majority of British citizens now feel they will do better outside it—that was a nation’s democratic choice, and it must be respected.

Should there be a second referendum, the UK has been obsessing about the questions—the solution to that is trivial—a second referendum would have three: Leave with no deal; Leave with the deal; Remain. If the two leaves combined beat remain, then the higher of the two leaves stands. If they don’t, the vote is remain.

The ‘deal’ was the May deal, now it would be whatever else is forthcoming. If we take Brussels at face value, whatever other deal comes to the table won’t differ much from this one.

But there will be no second referendum—diehard Tory brexiteers will prefer to leave with no deal, and the devil take the hindmost. In this case the devil is Corbyn, and he will.

After the Halloween Brexit, the Labour party will clamor for a general election—this will happen within a year, at the latest, to avoid fracturing the whole country. At that stage, Johnson will lose, and the Tory leadership will pass on to someone else who will take the party through the inevitable desert crossing that awaits it.

This narrative is a sad one for Labour, because it will be in charge of a Britain hamstrung by Brexit, bilateral deals of any significance will be a distant twinkle, and it’s impossible to visualize Corbyn as an international deal-maker.

If my crystal mojo is working, then in one year Johnson will fall, and in one legislature Labour will fall. The Conservatives will return to power in a few years on the fallacious argument that the left made a pig’s ear of Brexit.

As with any self-inflicted wound, the periphery suffers first. England’s progress will be interesting to watch, but the reaction of Scotland and Northern Ireland will be fascinating.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

Made in China

May 12, 2019

Look at your belongings—much of what you own is made in China. The Middle Kingdom is the world’s factory, and the United States is the supermarket—in this simplistic view of planetary order, Europe is the museum.

In particular, China is the semiconductor capital of the world, which makes it a powerhouse in tomorrow’s digital society.

The orang-u-turn decided to show America how a deal is really done, taking on the tariff war to please an electorate that depends on all things Chinese—the poor and disenfranchised in the States buy the cheaper goods, hardly any of which are made in the USA.

China stands accused of unfair trade practices—largely driven by government support or participation in business. Europe and the US, on the other hand, draw a clear line between private and public sector, and fight monopolies and cartelization.

At the heart of the dispute is the enormous trade deficit between the US and China, but also the obligation of foreign companies to disclose trade secrets in order to operate in the Middle Kingdom—like Robert Johnson at the crossroads, US corporations sell their soul to the devil so they can play guitar.

Americans see all these aspects as unfair, and the Trump narrative of bringing back blue-collar jobs is the Eldorado, but quite how this is to be done is, to quote Churchill, ‘a riddle, wrapped in a mystery, inside an enigma’. A typical factory worker in Shenzen receives 2725 yuan per month, or around four hundred bucks, while their equivalent in the US gets $22,425 per year—a monthly salary of almost nineteen hundred bucks.

If the labor cost of product manufacture increases five-fold, you can expect a price hike. But analysts worked out that the cost difference of a US-made iPhone would only be a hundred bucks if all parts were made in the States.

If this were a job-rich activity, the difference would be much higher, so these numbers tell the story in one word—robots.

So, no new jobs. But those hundred bucks are make-or-break when it comes to price wars, and a lead weight for folks already below the waterline.

Semiconductors R Us. Computer City in Guangzhou, China.

When it comes to the garment industry, or other labor-intensive manufacture, the problem differs—here, blue-collar America would be out of their new-found jobs in a heartbeat, unable to compete on price.

The only way the weaving and dyeing of the industrial revolution might return to developed countries is through AI, and the same is true for much of the heavy industry sector, including steel production. As long as there are folks in Asia, Africa, and South America prepared to work long hours in dangerous conditions for paltry wages, no tariffs will ever save the Western World.

Furthermore, in the West the environmental costs to our waters and to our atmosphere are too high a price to pay. Legislation enacted through the US EPA, the European Environment Agency, and other agencies adds to the costs of production, making it impossible for North America and Europe to compete.

In the US, the American way of life is widely regarded as a summit to which other nations aspire; this regard is itself aspirational—few Europeans would agree. The annual quality of living survey shows the top US city (San Francisco) comes in at number thirty-four, and eight of the top ten cities are in Europe.

The perception that the American way is the way, and the lack of understanding of other societal models, is at the root of the collapse of the trade talks. The Chinese Communist party implements a command economy with a bruising fist, just as the Soviets, East Germans, and so many others did in the past.

Since Deng Xiaoping—the little bottle—China started applying a different economic model, using test areas such as Shenzhen, but no Chinese thought for one second the regime would fall.

In practice, private enterprise has always been beholden, and at the highest level controlled, by the Party. In Chinese society, the two are inextricably linked—it is possible for politicians to do business, but it is not possible for businessmen to do politics.

The notion that an American businessman, and not a particularly good one at that, will impose a new value system upon the Middle Kingdom is laughable. Chinese society, as it stands today, will never accept a private model where government is not involved—it was government that set up China Inc.

China has a number of disadvantages in this war, including exposure, but it has two major advantages—time and control. Time, because like the Taliban, it needs only wait for the next US election, voter fatigue, or an economic crisis in the US, and North American priorities will quickly shift—this is partly why democracies have a tough time with asymmetric warfare, as evidenced by Iraq, Afghanistan, and Syria.

Control, because the Chinese political system can make the country turn on a dime and stay the course—whereas the American elephant can’t dance. Control, because severe economic hardship in China is enforceable, whereas in the US it’s not. Finally, control, because as Mao famously noted during the Korean war, ‘one dead American is a tragedy, one million Chinese is a statistic.’

Nanjing Dong Lu, leading to the Shanghai Bund, part of the International Settlement (1863-1941)

The Chinese know they are the celestials, and they resent everything about the mei guo ren—long memories do not forget the oppression of Chinamen who built the American railways, the Shanghai international concessions, the Korean war, and US support for Japan and South Korea.

In this foolish and naive attempt to impose societal change through trade negotiation, Trump is once again making a poor decision, regardless of how unfair Chinese trade practices really are, or are perceived to be.

Just as with Kim Jong-un, the border wall, and the anti-immigration laws, the orange man is seeking a second term using a simple recipe to please his base—he wants to show he tried, and build the narrative that he won. Whatever needs to be completed will be done in the following four years—in the minds of simple people, the story flies.

A year and a half away from the US elections, the Democratic field can only be described as chaos. And although the sitting president has solved nothing, he stands every chance of being re-elected.

With respect to his self-serving objectives, Trump shows extremely good judgement, as he has all his life.

From an international perspective, the forthcoming American election is a struggle between Russia and China. Regardless of the Manchurian candidate controversy, it is unquestionable that Russia is stronger if China is damaged and the European Union weaker.

Election meddling will again be rife, with the Chinese supporting the Democrats and the Russians backing their man.

May you live in interesting times.

The India Road, Atmos Fear, Clear Eyes, and Folk Tales For Future Dreamers. QR links for smartphones and tablets.

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