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Agius self-assured as you’d expect and still loyal to Diamond, despite the fact both have resigned their posts – ex-chair Agius is now temporarily de-facto acting CEO – a little Putin & Medvedev there 😉

Plenty of admission of specific failures. Very clear message that Diamond was and still is wanted and seen as very strong in terms of business leadership from his board and from shareholders. Basically it was the personal loss of regulator confidence that forced the resignation. His full-year severance pay (ex bonuses etc.) is clearly a retainer for his continued cooperation and availability to the bank.

Clear that bankers were in state of terror at the time, but interesting aside that regulators’ saw Barclays itself as the best in class on compliance amongst the big banks.

Other main issue is the demarcation between investment and retailing arms and the “culture” that may or may not be shared within parts and across the whole, and the fact that Diamond was part of the move to unify – mentioned earlier note (1) here. Pretty clear that independence of investment and retailing is going to become the regulators’ preferred strategy going forward – not that that actually excuses local moral failures, whatever the divisional culture. May be that the counter-intuitive unification is actually the better option ? (Lord Thurso – who seems very respectful of Agius personal integrity – is on the right lines … which layers of culture matter is beyond any one business … IMHO)

Interesting also that many of the other perps in other banks were ex-Barclays people … no doubt quite common, as in many industries. Culture is always in layers within and across organizations. Use of the word “low-balling” also tells a story about the original “crime”. Not really concerned here with whether the original manipulation was immoral or illegal – anti-trust collusion – everyone seems to agree it was wrong, whatever I think (I have a bigger agenda) – but low-balling does suggest it was a normal negotiation game as part of setting rates – achieving a low rate was what everyone believed was needed at the time, understood – whatever their individual motivations or (lack of) instructions. A case of ends not justifying means, but clear ends nevertheless.

[Post Note :

This interesting point from Robert Peston last week. When is low-balling, lying ?

 “[Barclays] understated [their borrowing rates] to try to reassure the market.

Barclays’ defence is that it was dreadfully unfair that its perceived borrowing costs were higher than other banks. And it is convinced that many of these banks were even bigger liars than it was about what they were paying to borrow.

It also points out that in practice its balance sheet, its finances, were in fact stronger than many of these other banks: its creditors were wrong, it would say, to have so little trust in it [due in part to the complexity and opacity of some of its financial instruments].

So was its lie about what it was paying to borrow justified – especially if the survival of the bank was at stake? And if Paul Tucker at the Bank of England encouraged Barclays to lie, as is implied by Diamond’s memo, would he have been justified in doing so?

As it happens, a number of senior figures in the City who are unconnected to Barclays think this lying was the right thing to do in the circumstances. They think Mr Tucker encouraged Barclays to lie and they applaud him for doing so.

You might well say that is evidence of a cancerous moral relativism at the heart of the City. Or you might applaud their common sense realism.”

My point exactly. Those who did the dirty deed took one on behalf of the whole bank. And, of course, Tucker didn’t actually ask them to lie, to low-ball, he just needed to point out that being too high was a problem, for everyone’s confidence in a time of extreme “skittishness”.]

Niall Ferguson’s latest Reith Lecture.

Internet social networks communicate, may even communicate collective action and action collective communications, but don’t themselves take collective physical action.

Drawing extensively on de Toqueville. US experience of low individual reliance on central government and state institutions, and high propensity to form voluntary institutions for so many different ends and moral purposes. Spontaneous participation in the troupe, beyond the family. Historically, statistically such participation is declining and expectation of state responsibility for action is growing. (State should only interfere for common good – over and above the legal framework – for natural monopolies across the troupes, protection from tyrrany of majorities, etc.)

Education for example: Biodiversity of mixed and varied private and public schooling arrangements is preferable to any dead-hand of monopoly. (NB Education is a huge part of Burke’s partnership across the generations.) Good public / state education is also good, measures of quality would probably include community participation.

The challenge is still a class / affluence gap in propensity to voluntary participation ?
“Think before taking sides” – a good message, a la Zizek.

Good to hear Baroness Betty Boothroyd on BBC R4 Today this morning.

Reform needs institutional conservatism. I for one cannot believe the hypocrisy of those baying for blood at government culpability in so many political and economic so-called scandals, yet demanding popular elections for the second chamber. Reckless and ill-considered outrage, as she says.

[Surely the value of British tradition is obvious.]

I’ve certainly expressed neo-pan-Darwinian views on natural evolution that might be called “group selection” – in fact I’ve even defended group-selection per se. I am one of those who sees evolution by natural selection as the best idea anyone ever had, that I’m happy to apply it to practically any situation – even one where cause and effect benefits of any change may be explained in real-time, in a single “generation”.

So I’m guilty as charged here by Pinker. Clearly if we’re going to limit the word evolution to original-Darwinian natural selection – where it’s numbers of copies we’re valuing, and mutations are entirely blind to their effects. Then “group selection” in human affairs – and the affairs of social creatures generally – is something entirely different. Sure it is.

Sure we’re valuing other qualities of life and measures of existence than just head-count and group-count. And sure, in communities of less intelligent creatures, where individual immediate choice can be barely if at all aware of causation effecting future group and individual benefit, then all group behaviour including relative behaviour between group members, is ultimately, reductively, seated in attributes of the individuals. Tell us something we don’t know.

The interesting ground is the middle ground.

At one extreme, parallels in ant analogies and hive rhetoric are surely more poetic than scientific, and undoubtedly more concerned with the natural processes of group-effects on group member selection, and group success, than selection of the groups themselves. Nevertheless real effects.

And at the other, if it were purely a numbers game, then let’s just give up now and admit the bacteria as champions. But, as intelligent humans, with far more sophisticated values than arithmetic, we’re sadly arrogant enough to believe our knowledge gives us control over cause and effect, over multiple time-scales, here and now, later in our lifetimes, and in the legacy bequeathed to future generations.

In reality what we’re concerned with is natural processes of change over one or more cycles, given our imperfect knowledge. These cycles are indeed fractal over many different layers and time-scales and definitely involve – if not blindness – uncertain feedback against the imperfect knowledge and facility used on each cycle of change.

Real allure, wrong definition. The real difference between the sides in the group selection debate are differences in what to value, what matters. Definitions and numbers are very low value indeed.

Latest (3rd of 4) of Niall Ferguson’s Reith Lectures The Rule of Law and its Enemies – The Landscape of the Law, first broadcast last week, continues the agenda that simple law is best for global economic progress.

The point of law is fundamentally property and contracts rights – wide-acceptance, cost-effective execution and reliable-enforcement – thereby minimising overhead cost and risk of doing business beyond your immediate social neighbourhood. Interesting that laws of precedent must (do) rest on common law of what is good, and what is law good for (and that common law is based on social interaction between neighbours, extended by communication to wider society – one source of hypocrisy – imperfect empathy as well as imperfect knowledge). The point of precedent being to ensure that evolutionary changes in law, as society and environment change, are always coherent – consistent within a shared narrative – proceeding step-wise from precedent, anchored but not fixed by precedent. Another of these clear “progressive evolution requires institutional conservatism” messages.

Beyond Law-101 above, the point is primarily one of balance between private and public institutions for setting and enforcing laws of business, without either becoming an over-powerful dead hand – monopolistic on one hand, bureaucratic on the other. The bureaucracy of complex legislation leads to the rule of lawyers (as in the US), rather than law. Ultimately we depend on the true independence of judiciary, rather than judiciary (and executive politics) as extensions of the legal profession.

Let’s hope there is more than Law 101 in the 4th and final extended lecture tomorrow.

Look I still don’t buy it.

A particle suggesting / equivalent to the Higgs ? So all the attempted explanations / metaphors / fancy visualizations to date, tell us that the Higgs Field is about “stuff” that resists the movement of other particles and explains the inertial resistance to movement of those particles we know as “mass”.

So how is it the Higgs Boson has more that 130 times the mass of any other sub-atomic particle ? Where does “it” get its mass from. How can the field explaining mass of other particles comprise particles that already have (lots of) mass ?!? What does a Higgs Boson actually have to do with the Higgs Field ?

All these poxy metaphors are failing to tell us something. Emperors and clothes spring to mind.

[Post Note: Also good to see rejection of the God Particle metaphor – not just because of the two-way offence at bringing God needlessly into the political science debate – but because it grossly inflates the significance of the Higgs Boson – it’s just one potential missing piece in the standard model, with plenty more missing pieces – gravity anyone – and many more opportunities for the standard model itself to be proven entirely wrong.]

Interesting (from Forbes via LinkedIn) story of how storm power outages put Amazon Cloud down – how much depends on Amazon resources and how resilient the cloud actually is – a lot and not very it seems.

A variation on an early theme, but it seems some women may have the power to perceive many more colours than the rest of us. (Interestingly, converse to the fact that colour-blindness – two-cones – is most closely associated with men, “tetrachromats” – four-cones –  apparently tend to be women.) Hat tip to Catless at Bif Riv.

(NB “Mary the Colour Scientist” is part of a thought experiment where the individual perception of colour cannot be shared between us or related to any empirical scientific explanatory knowledge of colour as electromagnetic wavelengths of light. Mary for gender-equality-political-correctness-of-science in this case, not the super-human power of women.)

This i-Squared event is also a Google+ debate on the Balotelli quote “Football has been too tolerant of racism“.

I’m going to disagree. It’s not racism, it’s culturally engrained “otherism”. The lack of respect engendered by seeing the rest of your world as other. Rival football fans are simply an ideal place to see the underlying issue at work – after all being on opposing sides is the point of it.

As a football fan (or a “supporter” on any side of any debate or argument – more to the point) it is apparently expected that as well as supporting your own case you will rubbish the opposing case by rubbishing the opposition. I regularly get laughed at when, as a supporter of my team, that unless it’s actually witty or relevant I cannot ever condone insulting and abusing the opposing fans, players and staff, or labelled a tone-troll if I point out such behaviour in a more academic debate. In something as trivial as a sport (ie more important than life and death remember), particularly a “man in the street” sport like football, it is pretty well accepted that it’s normal behaviour to rubbish the opposition based on what’s different about them – norf vs sarf London, yid vs gentile, east or west end of the M4, city vs sheep-shagger, south vs north, east or west of the Pennines, Manc vs Scouse, catholic vs protestant, one side or the other of the the tracks or Stanley Park or the Manchester ship canal, whatever.

Good natured banter is one thing, even “offensive” humour if it’s witty and accompanied by self-evident underlying love and respect, but direct personal abuse and attacks on the “others” based on their otherness should be a no no. The colour or race of an opposing player is just another “handle” for the accepted attack, and of course when the teams are from different countries so many more historical, cultural, ethnic, geographical differences to pick-on. Don’t get me started on “gyppos” … and for chrissakes don’t mention the war, any war, you choose.

If this was just a problem with the uncouth, uneducated “man in the street” and just with “race” that would be one thing. But even educated would-be intellectuals seem to have fallen hook, line and sinker for the “attack” side of any argument. It’s critical thinking, it’s scientific, after all – scientistic anyway. Us vs the bankers, the government, the capitalist, the tax man, … the tax avoider. So many current debates – the Lords Spiritual, you name it. Me vs whatever makes you different from my moral high ground. Objective otherness stinks anywhere and everywhere – (except inside empirical science).

Who let the dogs out?

Huh ? Isn’t that what banks do ? Surely the Libor is an “offered” rate – surely the point is to negotiate around your strengths and weaknesses. I can see why people might be jealous of their success, and shocked by their risk-taking with hindsight, but what have they actually done wrong ? Broken some regulation no doubt. (Adds interest to Niall Ferguson’s “Rule of Law and its Enemies” – one of the enemies is dumb regulations. Comment below.)

[Post Notes :

OK – so where are the real issues.

(1) The problem was with Barclays Capital (as was) which was only ever loosely affiliated with Barclays as an operation. Had it’s own investment banking culture separate from retail. Diamond had already taken steps to get a grip – get one culture under one brand. (NB the “problem” is old 2008/9? and not news. The only news is Barclays being the first of the banks to have their fine announced, they are not the only investment bank involved.)

(2) The setting of Libor itself depends on returns of capital costs from banks to the central regulator – which I have to say sounds mad in the first place – a circular chicken and egg. Anyway, so even being conscientious, this is presumably a calculation for the bank – many transactions, many rates, many things to take into account. Even being prudent some judgement about which things to take into account, to err on which side is prudent and good business, incentives, etc? So to “lie” is a tough call when “reporting” – all reporting is a negotiation in my experience. In terms of who benefits / suffers my understanding is that the process of under-reporting costs generally kept rates lower and maintained confidence in stability ? (Not to be undervalued given the state of banking at the time.)

(3) Collusion between competing banks in establishing the numbers to report. Much more serious competitive anti-trust issue, though again it seems the incentives were the other way as far as costs to customers are concerned – opposite of monopolistic / cartel issues behind such rules – tricky one. The key thing here is who, how long, who knew, who sanctioned it. Culture. (The same “Murdoch” scenario.)

(4) The unprofessional tone of communications as rates were “successfully” negotiated. (Not actually seen emails, just a couple of apparent quotes so far – I’m researching that.) Black humour in coded language between workers at the work face, at the expense of the “clients” is perfectly normal, even in “caring”  industries like teaching and health-care or any “support” services, so in a cut-throat financial risk-taking environment, it must be deadly I would imagine.

The real issue is 3 above, and whether the culture and incentives were right for the operation. Major problem is the regulators being so slow to act. Clearly with the banking system in crisis, poachers and gamekeepers both had incentives to be cautious in public. But this “news” is long after the events and long after changes are in motion to fix things, and long after recognition for further overhaul of regulation. Diamond seems like the last person you’d want to lose from the process right now (3 excepted).

PS The “Light Touch” meme is so misleading. The touch should be firm sure, the action decisive, but it should not be intrusive into the whole process. Simple but firm. We need good regulation, not more regulation. And what is good … continues …]