Category: Uncategorized

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 …]

Financial markets, their regulation and the politics around them are so complex, that changes of regulatory input produce practically indeterminate, unpredictable outcomes. The most complex system of systems that humans have ever engineered. More misguided regulation can make the system more fragile, not less. Less is in fact more. More local failures – bonfires – should be allowed to take their natural course, than fixes that increase the risk of a wider system failure – a conflagration or forest fire. Remember Darwin got his original “survival of the better suited” model from economics – Malthus.

Experience and prudence at the (local) operational management level are more valuable than (wider) externally imposed rules. And experience means history – knowing, understanding and learning from history. History understood on both conservative and revolutionary “occupy wallstreet” /”anti-capitalist” sides of any debate.

Enforcement of law (regulation) remains key, but with simpler clearer (moral principal) rules rather than many fine detailed regulations, it is much easier to punish transgressors “pour encourager les autres”. The rule of law rather than the “rule of lawyers”.

Niall Ferguson’s 2nd BBC R4 Reith Lecture “The Rule of Law and its Enemies – #2 The Darwinian Economy” from the New York Historical Society.

[And Post Note : George Monbiot tweets his complaint at the “idiots” responding to his latest post-Rio piece. No time for detailed review and comment this time – but it’s the same argument. It’s a predictably failed attempt at too much big governance of the most complex system – humans and the ecosphere. Local application of “values” much more likely to work – but that’s real values based on historical knowledge, not just individual interpretation of scientific claims and myths. Better to understand why Rio failed, than simply blame and criticise “everyone” for its failure George.

I’m guessing these are the 516 (at the last count) idiots George is referring to ?

“The world has grown weary of the environmentalists, their sick destructive political agenda and their frankly ridiculous hysteria.”

Though you’d have to agree George’s own tone is so melodramatic and OTT. If ever a debate needed some reasonable wisdom injected into it. A pox on both their houses.]

A “Mind Hack” from PsyBlog. From Shawn Callahan at Anecdote, via Twitter.

Edmund Burke’s words quoted by Niall Ferguson in the first of his 2012 Reith Lectures “The Rule of Law and its Enemies – #1 The Human Hive“.

Glorious vs inglorious revolutions in the light of the Arab Spring. Revolution against “extractive” rule, but for what ? Representative democracies that allow the current generation to vote for its own needs, at the expense of the needs of multi-generational institutions, are doomed to degenerate. Long-lived institutions, and the laws that enforce them, have credibility in terms of liability for debt, unlike easy-come, easy-go elected governments – which represent a positively reinforced death spiral.

The eminent economic historian Professor Niall Ferguson argues that institutions determine the success or failure of nations. In a lecture delivered at the London School of Economics and Political Science, he says that a society governed by abstract, impersonal rules will become richer than one ruled by personal relationships. The rule of law is crucial to the creation of a modern economy and its early adoption is the reason why Western nations grew so powerful in the modern age.

But are the institutions of the West now degenerating? Professor Ferguson asks whether the democratic system has a fatal flaw at its heart. In the West young people are confronting the fact that they must live with the huge financial debt generated by their parents, something they had no control over despite the fact that they were born into a democracy. Is there a way of restoring the compact between different generations?

The problem is with the complexity, dysfunctionality, opacity and even fraudulence of economic governance and regulation – not the existence of such institutions. Historically these are the source of sustainable growth and the evolution of wealth – ie it’s not individual entrepreneurism per se, but the institutions that support their functioning. Sustainability involves true valuation of sovereign assets as well as true liability beyond accounting debts, including environmental and natural resources. Populations confuse real grievances with symptoms for underlying problems and causes, and consequently left / liberal groups are exploited to misguided ends. It’s just not cool to be conservative. Who knew the Tea Party was right ? (Funny, I made this comment before, about the superiority of conservative values. And here, Daniel Kahneman pointing out that individual freedom of choice needs the guidance of conservative governance.)

Need to listen to the remaining 3 of 4.

Not a fan of Louise Mensch, and I doubt her microblogging venture will rival Twitter, but she’s right.

No useful discussion ever made progress without on-topic content moderation (or more than 40 words). And good moderation is a time consuming skill. What was it Einstein said about editors?

Oh, and the new site name “menshn.com” is not a pun on her name -yeah, right.

Interesting. Reading Henry Stapp’s Mindful Universe – too early to review, but it is excellent so far. Scientism based on 300 years of engrained classical physics has simply not learned the the role of human consciousness in quantum mechanics – to the detriment of of all human endeavours, not just science generally and science of mind specifically.

The interesting surprise was to find Laura Mersini-Houghton on the editorial board of the lay science book series of which Mindful Universe is a part. And yes, I did also mention the link between Stapp and Rovelli in that previous link to Stapp above.

Small (well, cosmic actually) world of people talking sense.

[Post Note : Deeper into Mindful Universe, it’s a tougher read – not exactly for the lay reader but more the non-specialist scientist – all I can do is trust his reasoning / conclusions.]

Roy’s Corner in Malmo.

It’s been on the cards for a while since Petroplus went bust – but a sad day for refining in the UK. Remember some interesting projects at Coryton.

The cost-effectiveness and over-capacity arguments leave me wondering about strategic dependency on wherever the cost-effective capacity remains – what is that, just 4 or 5 liquid fuel refinery complexes left in the UK ? (Fawley, Pembroke, Grangemouth, Stanlow, Carrington, Humberside and Teesside, a couple of which only do chemical intermediates, and a couple more also in doubtful commercial operations ?)

Henry Stapp’s words quoted by Brian Josephson, were one of the first occasions I was turned on to considering that (eastern) mysticism might have something real to add to science. Both serious physicists, the latter a Nobel prizewinner, both interestingly, present at the 2003 Science of Consciousness event in Tucson. At the time (noted in 2005 paper) it was a real “does not compute” (*) moment for me, that set the tone for a whole decade of open-minded gathering of unlikely sources here on psybertron.

Quantum non-locality & collapse effects were very fashionable, not least with Stuart Hameroff director of the Tucson Centre for Consciousness studies and co-founder of the event, and co-founder with Roger Penrose of the tubules and quantum coherence “Orch-OR” theories of mind. At that point I seem to have left Stapp behind – I found the Penrose-Hameroff stuff too literal, too “physical” a model of the possibility suggested. (For those of us who hold a monism underlying both physical and mental, we need to be careful not to preference one over the other.)

Anyway, long story short, at last month’s Tucson event Sue Blackmore ended up in a debate with Deepak Chopra in the War of the Worldviews. Comments on Sue’s blogs including Ten Zen and the Guardian “Comment is Free” (it never is) almost universally panned Chopra as a charlatan, a con man, a “snake oil salesman” for his mystical agenda – inflamed by his wealth-making activities. One particular commenter on Ten Zen, amidst a string of incoherent rants against Sue – against accepted scientific views – mentioned Stapp. So I looked him up. He has a new 2011 edition of his recent 2007 “Mindful Universe – Quantum Mechanics and the Participating Observer”.

We have a recurring problem, a Catch-22 I’ve called it before. It’s a language and communication problem. If you have a problem with science, it’s very hard to talk about it without being scientific, and using the common sense science language of subjects and objects – of course if it’s not scientific, your talking pseudoscience. Mysticism is not “paranormal”, it’s just not necessarily science as we know it. All talk becomes mumbo-jumbo. Catch-22.

When I linked to Carlo Rovelli here, it was because we have a scientist who seems to have spotted where the fault lies. With a metaphysics underlying science, that is invisible to science as we know it; as engrained in our common folk-science psyches.

(*) Ironic that I should use this “compute” expression, because I’ve since formed the view that the underlying monism is probably information – significance difference and dynamic processing of relations. Ooh look – quantum computing.

[Post Note : Also ironic that after posting that, I find Stapp correspondence suggesting Rovelli was going in the wrong direction.
www-physics.lbl.gov/~stapp/Rovelli.doc
http://www-physics.lbl.gov/~stapp/RovelliRel.txt ]

Due to work-related installs and reconfigurations of our server, I lost visibility of all my normal WordPress and other static content for a few days. But after a reset it looks like everything is up and back to normal. No damage done.

Sorry for any inconvenience.