Saturday, December 13, 2008

Madoff's scam straight out of crime comedy book: Not a Penny More, Not a Penny Less by Jeffrey Archer

Obviously crime comedy lovers have their sixth or seventh sense proved right. The Madoff fraud affair on Wall Street is just like it is carried out by Harvey Metcalf who sells shares in a non-existing North Sea Oil producing company. A scam in which he creates exactly the same impression of a well-doing investment fund just like Bernie Madoff did.

Has Madoff read Archers' comedy?
Here the factual insight into the Madoff case:
Henry Blodget from Business Insider has done an excellent job shedding light on the conduct and behaviour. If not knowing it from Yahoo finance, here's the link (Silicon Alley Insider):
"I Knew Bernie Madoff Was Cheating"

Investors held the belief that Madoff was cheating somehow and assumed they would gain because of that. They would not expect a good old-fashioned that it actually was.

"Not a Penny More, Not a Penny Less" was first published in 1976 and been reprinted several times since then. It is an evergreen. We have introduced it in
September on this blog, together with another similar crime comedy classic:
Wodehouse's: "Do Butler Burgle Banks?"

Such scandals, affairs, bankruptcies are, seen historically, time and time again pretty much the same in their core characteristics. The real differences are the scope and size, the amounts of money blown and gone. The amount embezzled between four investors in "Not a Penny more" came to $ 1 Million. 1976 was a time when £ 30,- for petty expenses were expenses, lots of money for that matter.

The same goes for "Do Butlers Burgle Banks?", written and published a bit earlier, and set much further back. A time, when a "deficiency" in a banks balance of say, £ 150 000,- was a mind blowing and existential problem. Whereas today it's billions, if not trillions.

It is probably the much smaller amounts of money at stake or lost in those yesterdays books that make them so easy to read, to understand what is really the core problem. Those billions currently coming up are really a psychological hammer, it takes a while to come to terms, get a clear mind again to tackle the principle problems, criteria, beginning with accounting standards and so forth.

The goal of the heroes in Archer's story is to get all money back
to the cent. And indeed they came close to it more at the end
(but not the very end!):
"He still owes us $ 101 and 24 cents."
"DISGRACEFUL", said Jean-Pierre, "Burn the place down."


Henry Blodget continues to do a great job:
The Perfect Ponzi

And Nina Burleigh sees it from a satirical point of view in the Huffington Post:
Madoff in Manhatten

(Our copies of crime comedies are sold out at the moment, we have to refer potential buyers to the net.)

Wednesday, November 26, 2008

Suspects & Whodoneit? for (Irish) crime, thriller and crime comedy writers: journalists, editors, the media

One group of suspects and potential villains for
crime stories has so far been largely neglected:
editors, journalists and paparazzis.
While every other socially higher standing profession
like the priests and the churches, politicians, judges.
policemen, and so on, had their fair share of scandals
and appear adequately in all the "good books" this is not
the case for the media profession. A grave omission,
isn't it?
And it might also be a new source of income, the new
business model, for quite a lot of journalists who are
getting laid off. All they have to do is write about their
experience as insiders, scandalizing it, add the necessary
amount of money, sex & crime to it and write "paperbacks."
Apart from the opportunity newspapers have to use the
papers to that end. This would be their way of the media
crisis. It is really no wonder readers are vanishing if one
considers how drab they got - and how interesting they
could actually be. It would not easy cost them lots of money
to investigate, nor big expenses would be run up nor other
investments needed. Readers always need something new,
and when it comes to sensations and scandals, something
really surprising. Otherwise people get spoiled, bored and
disappear. Not to mention that advertising revenue, rapidly
dwindling right now, would jump up again and thus everybody
would be happy again.

The absence of some media person as suspicious, dodgy,
maybe even dangerous in TV crime series is THE explanation
why they are getting so boring. Some surprising element
is missing, a surprising twist and the end. That's because
no journalist is getting caught, no editor facing jail for life.
Wouldn't paparazzis make ideal cases as stalkers, for instance?
Wouldn't an editor-in-chief be the ideal character as king-pin
in a drug cartel, a position from which lots is masterminded,
organized, supervised everything kept under control?

One example where a newspaper editor turns out to
be suspicious, maybe even guilty of some heinous crime
in the little town of Lydmouth in the 1950's is in:
Andrew Taylor: Call the Dying

It is a cosy crime set at a time when television sets are
just beginning to be bought and the classical sexual neuroses,
hypocrises and other such related psychological complexes
played a vital part in small town life. The mentioned
newspaper editor is not the main character, just a minor
character. But sufficiently taken on, explored, to make it
nice fictional media critique. For people who just can be
inspired to have a laugh about a media guy.
Taylor has a very dry sense of humour and he can also
understate when necessary superbly.

Whatever they wrote, it was finally used against them:
the libel cases in the McCann case. Here are just a few
of the reports to those:
Madelein McCann: Robert Murat and newspapers

Parents of Madelein McCann accept apology and damages

Tapas 7 in McCann case awarded damages

So, there is no problem sourcing "underlying" material
from actual reality. Someone using or getting inspired by
those libel cases then just needs to have a bit of talent,
dream up characters. A policeman, detective needs to
have a mind of his own when he for instance includes
the media in a crime either as perpetrators straight
away or as associates of crime. One motive, hopes of
financial gains from a case is all evident. And then it is
up to the author how the story unfolds, what is coming to
light in the course of a story. Is it just obstruction of justice
and the investigation that the media people are guilty of?
Or is at a range from parking offenceses (paparazzi photo-
graphers), trespass, complicity to blackmail someone,
sexual exploitation of an occasional "escort" or maybe even
a paying relationship with a druglord. Who knows.

And then there is certainly the possibilty to dig in the
finance crisis and the media complicit in all that.
In the above mentioned McCann libel cases all the lawyers
needed to do gather sufficient evidence was to use newspaper
archives and make copies of it all. Ironically enough, most of
the papers even had online - archives. It couldn't have been
easier for the lawyers.

The same holds true for the media and the finance crisis.
While what they are writing today seems to be the perfect
knowledge, the perfect forecast and prediction something
in the future, all that may look a little bit different when
going back and looking what a paper wrote in the business /
finance section years ago and then go forward towards the
The media are protected by the freedom of speech. Sueing
them for false information or something to that effect may
make it nearly impossible to take them to court successfully.
(It could also be for the reason that nobody so far has even
attempted to do so. In would require a real ace of a lawyer,
in any case.)
But at least in theory it would be very easy to gather really
convincing and definitely enough evidence for such a case.
Mysterious as much of the stock - exchange talk, advice,
and so forth is for most of the consumers, declared laymen
would have absolutely no problem at all in, say a court,
(or reading about in a story). Practically everybody would
understand what sort of mysterious - complex financial
and business writing, including all media frenzy, led to the
financial crisis and the credit crunch.

Not so long ago the papers' property section was full with
expensive properties, all written for people who don't really
need or want to ask about prices, like they would be really
rich oil - sheiks. Interesting was that at times it was in many
cases impossible to tell paid-for PR - articles from estate
agents apart from independently written property articles
about properties. Most of those independent looking articles
included the phone number of an estate agent in all openness.
If only that was not a mistake, albeit a small one.

And they were also big into recommending shares, investment
funds, all sort of financial products. The interesting thing,
the potential nemesis, of everything to do with money and
finance is that afterward one has perfect knowledge. For
example, no problem finding articles about Lehman, Bears Stearns,
and so on years ago and what a certain paper wrote about them
and prophecied (usually with greatest certainty, absolutely
convincing). Every self-declared layman or laywoman just needs
to take a look at those and knows instantly the outcome
(might be quite surprised how easy it is to understand when
doing so, understanding everything in all relaxed ease).
And this is certainly part of the challenge for writers:
to provide the readers with an account what has happened and
what was somehow going on. Kind of a service coming
with the book.

Considering the extent, the sheer extent of the finance crisis
this all calls not just one, but a lot of writers to the task.
In order to have their detetectives and investigators do the
job. Also very much needed. In reality in takes much longer
for the mills of justice beginning to grind, we all know for instance
how the fraud department of the FBI in the USA was down-
sized years ago.

Finally, we come to the question of marketing and selling.
Would books in which the media are criticised one way or
another, editors and journalists stand model as villains
find the approval of the media? Certainly not, one may
assume. Could the media ruin the chances of such books?
Yes and no.
Some longer time ago the Catholic Church was considered all
powerful and they were very much into censuring and damning
books. They did create a lot of problems. But the fact that the
Church was damning a book was time and again reason for its
success, whether it was the condemnation or not. (Quite a few
rather silly, "unworthy" books benefitted from it.)
The same is the case with the media. What really matters, in my
opinion, are the potential readers. And they better be taken
serious, not underestimated. Readers for such books are most
likely to have a mind of their own, are used to use their head,
have a sense of humour and like to have a laugh, occasionally,
about the powers-that-be, at politics and so on. The don't need
any sensation.
Important is in my opinion that the potential is not mislead
about a book. If it is some easy-going fluff, making jokes etc. it
should somehow be told. Creating expectations and betraying
is bad for business.
And, as far as the likely disapproval of the media is concerned,
some discreet hint that a couple of journalists are included in
the suspect / guilty / whodoneit group, that the author is does
not suffer from an authoritarian conscience towards the media,
is a bit respectless, in fact. This might just do the trick, be
enough - and sell the book.

When being critical about the media, one should not forget
those journalists, etc. who are, apart from being occasionally
self - critical, admitting to mistakes, are rightly critical about
the media. Some of the best media criticism is written by
members of that profession. We will introduce some ( more) of
them soon. (So far: Danny Schechter and briefly Jack Shafer).

Very finally, at the very end, an introduction to:
Paul Kilduff: Square Mile (its a link to amazon).

Kilduff wrote four financial thrillers. Square Mile, published in
2000 might provide an interesting look back, at the financial
scene at that time. - And leave the reader wondering what the
hell ever since then.
(We have also introduced Linda Davies on another page of this
blog. She is another great financial thriller writer.)

Tuesday, November 25, 2008

Media: former editor admits media played part in financial crisis

Slowly people from the media begin to admit to
the role of the media in the financial crisis.
The british Guardian currently being the only
newspapers to carry such articles. We appreciate
Will Hutton criticises media's role in financial crisis

Given the extent of the financial crisis and when
one remembers the media frenzy far more has
to come. The media need a bigger confessional
in any case.
And there might even be a market for that, a larger
part of the potentially interested in hearing such
confessions. This might be even the financial rescue
of some. All they have to do is spice such confessions
with a bit of crime, sex & money, sort of scandalizing
it a bit and here we go. Business for the media would
jump up again.
The media, journalists, editors and so forth are the
only socially important profession that has not yet been
scandalized in contrast to the churches, bankers,
politicians, and so forth. Scandals about the media,
involving themselves would thus be reallu necessary as
a matter of principle and something new for a somehow
bored and frustrated audience.
So lets see what's coming.

Friday, November 7, 2008

For angry banking / media consumers: Danny Schechter: Plunder, An investigation of the Subcrime Crisis

We have referred to Danny Schechter (USA)
already before on another page here.
His new book:
Plunder: An investigation into the Subcrime crisis
(September 2008)
here is the direct link to his site and the
Unfortunately the book is not yet available here
in Ireland, therefore we have refer buyers for
it to other sites.
Here is video clip with Danny Schechter from
06 / 07 It is also about:

"In debt we trust", a film he has done last year.
One also gets to know him, that he was working
for TV before he got independent. How he became
a journalist and got very critical about the own
profession and why. (If link to You Tybe clip is not
working, "Danny Schechter" can be found very
easily on You Tube.

And here is a clip to his film "In debt we trust"
Pt. 1

And here is a clip in which he talks about his
book "Plunder"

For readers somehow detached from the newspaper
industry, maybe critical somehow ot it, it may be of
interest to have a look at the various trade publications
and publications in which they are talking about them-
selver, their strategies, and so forth.

It appears that they are living in a world and state of
mind of their very own. Have somehow lost the plot.
Their interest may not meet the interest of the
Here is one, the editorsweblog.

Saturday, November 1, 2008

A decent critic of church, religion and sexual moral: Uta Ranke - Heinemann: Eunuchs for the Kingdom of Heaven

It was a bestseller in the early nineties, is was out of print but is available
on Amazon:
Uta Ranke - Heinemann: Eunuchs for the Kingdom of Heaven

Ranke Heinemann was born in 1927 in Essen in Germany. She studied
theology, had Pope Benedict XVI, Josef Ratzinger, as class mate, taught at
a Catholic seminary from 1955 on and became the first female professor of
theololgy worldwide in 1970. She married in 1954 and has two sons. Her
husband died a couple of years ago.

She taught Catholic theology at the University of Duisburg before teaching in
Essen. Her license to teach theology was revoked by bishop Hengsbach in
1987 after voicing her criticism about the virgin birth on television.
She was a critique anyhow from 1970 on, concerning matters of war
and peace and other issues and was active for humanitarian and peace

The loss of her permission to teach Catholic theology was a bit of a
scandal in Germany. She became professor of history at an independent,
secular, faculty soon after.

Heinemann was critical of the latent homosexuality in the Catholic Church
long before the scandals blew up. The indoctrination of priests going back
a long time meant a hatred of the human body in principle, and an
indoctrinated misogyny on top of that, which bred a particular - abnormal -
kind of homosexuality. In other words, she had good reason to be critical
about theology, knew the stuff from inside out.

Her critique, long before the scandals blew up, included among others
two secret letters from the Vatican concerning homosexuality and the
pedophile scandals. One was  from cardinal Ottaviani in 1962,
(Crimen Sollicitationis) and one from cardinal Ratzinger in 2001
(De Delictis Gravioribus) in which, carrying the threat of excommuniciation,
bishops were commanded to secrecy concerning such matters and scandals.

The Church managed to fool the world by going in the offensive, ranting
about and condemning  the sin of homosexuality,  thus projecting their
offenses upon others. It worked. The whole lot of Church - critical
journalists would, for many years, not take serious any complaints, reports,
etc. about such scandals because of that.

Eunuchs for the Kingdom of Heaven is giving a proper account of the
theological reasoning, what those "fathers" were thinking. And that is
actually a scandal in itself.

Fortunately, quite a lot of what was once moral is meantime obsolete.
The interesting thing  is that the whole lot of that sexual moral is
actually Godless.

As it is, the theologians simply could not justify their moralizing with bits
or pieces from the Old or New Testament, Jesus for instance never
bothered about the sexuality of young people, for instance sex before
marriage nor did he tell his principles to mind such matter. Neither would
he or his principles interrogate married couples about their love and sex
life like theologians later made it their business and major source of

The merits of knowing the history of that moral is that it is easy afterwards
to make such comparisons if someone wants to do that.

Ranke Heinemann is a great example of intellectual sincerity, a quality
not too often found in the theological arena.
When losing her faith in her Church - based faith she did not lose her
faith in God. Her marriage was a happy one, that was very important
for her.

The comments and reviews of readers at amazon give a nice idea what
the book is about. A look at those can be recommended very much.To
quote one of them:

"Did you ever have an intuition that everything was not as simple and rosey
as some would have you believe? Did you ever think that there was more to
the story than was being revealed? If so, then this book is an excellent resource
for you for topics such as misogyny, celibacy, sexuality, family planning and
I am a Roman Catholic and a religious educator, but far from finding the book
to be shocking or full of "dirty words," I found it to be an insightful challenge to
the church to return again to the central teaching of Jesus and to turn away from
its obsession with genitalia and what people do with them. There is more to faith
than that. And only by embracing the truth of our past can we grow beyond it"

The Ryan Report in Ireland, just recently published, brought
the whole issue again to the forefront. A really interesting article
was written in IrishCentral, what outraged Irish Americans
remembered certain things.

Update 2: A recent book review in the Irish Times about a
catholic columnist working for the long defunct National Press from 1963
to 1980 who advised readers about matters of sexual moral makes very
interesting reading. For instance:
It was an Ireland where a young couple, trying vainly to control the size of
their family by the “safe period”, had four children inside five years. They finally
decided that the only way out for them, “Catholic style”, was to abstain from
sexual intercourse altogether. As the young wife concluded grimly, “That was
12 years ago.”

(This book is available in some Dublin public libraries.)

The comments and reviews of readers on amazon are quite
interesting, they give additional information and insight.

Wednesday, October 29, 2008

End of Lifestyle opinions: journalists embark on course of modesty

That the media, first of all newspapers, followed by magazines are
having to face the music and are in serious and increasing financial
problems themselves can be learned from the Google reader on the
right side.

Jack Shafer, media critic at Slate, noted the new trend coming from
Good news from the coming depression
Journalists have discovered it!

It is a funny piece.

Sunday, October 26, 2008

Are financial offshore centres and tax havens going bust, melting down as well? Suspicious silence, non-reporting

While banks and financial institutions all over the
place are ran into serious problems and those problems
are known, reported on, there is an almost suspicious
silence emanating from tax havens.

Tiny as many of them might seem, they are global
players because of the huge assets and funds they
manage and have in their accounts.
There are two basic questions:
A) Have those banks and funds, etc. done better, were
they smarter, more prudent in their conduct? In which
case they would be some sort of positive provocation
to the rest of the financial world.
B) Or have they made the same mistakes and are melting
down just like the others? If that is the case this would
provide the answer to some presently unexplainable
occurrences in the stock markets globally, like forced
sell- offs and so on.

Such a crisis in tax havens would have some interesting
aspects. There are some of the proceeds of drug dealing
stored away, invested. Or Third World politicians are
known to invest all the embezzled money there. Thus one
or the other political scandal would follow in such a case.
And maybe one or the other scandal worthy of tabloid
reoporting and elaborating as well.

It would in any case require some rather old-fashioned
competent reporting, some knowledgeable guys who know
what they are talking about. Drug money of political money,
the proceeds from corruption, are of course stories that take
a longer time to figure out and give an adequate account.

Certainly are differences among those centres how they
handled banking, their legal requirements and so forth.

Here is an article from Jersey (it is possible to go from
the articles linked here to current articles on the following
newspapers, if interested):
Euro talks to protect finance

And here another one from Isle of Man:
The Manx Lads: It's Not Our Fault

Here is one from Guernsey:
Confidence in Guernsey will survive

And here one about the Vatican Bank:
Officials says deposits in Vatican Bank are safe
(The Catholic Church had some problems in
the past, a longer time ago, 1982.)

The Stanford - case brings the issues of sunny islands,
tax havens and more to the front again.
Here a summary so far in the Guardian:
We said, are you this guy ...

All that might be an excuse or reason to visit some of
the news media in the Carribbean directly (this affair
is leading to elections in Antigua, where the Prime Minister
called for elections in March)
The Nation Newspaper, Barbados

the: CaribWorldNews

and the Caribbean Net News

For the record: these are just some of the media in the
As for the USA: there is a link to Silicon Alley Insider
on this blog. A rather new publications, they have their
own style of writing, relaxed, with a sense of humour, yet
professional - and always linking to sources (giving credit
to deserves credit) that is obviously gaining rapid

Fancy some music after so much hard
reading? Here is Harry Belafonte: Island in the sun

Saturday, October 18, 2008

Financial thrillers by former City banker turned writer Linda Davies

Dealing with things financial and moneywise as knowledge-
able authors is obviously a trait of the Davies family.
We introduced "The History of Money" by Glyn Davies.
Daughter Linda Davies on her part wrote a couple
of financial thrillers. Instead of an unnecessary duplicate
introduction, a link here.

Somehow fitting to that we would to introduce
"DealBreaker", an online Wall Street tabloid.
It is, according to its definition, a specific tabloid
that includes Wall Street gossip and news about
people "who are to be considered innocent until
proven guilty".

Matching the themes we have chosen the film music
to the James Bond movie "Goldfinger"/ "Diamond are
forever", Shirley Bessey singing at the occasion.

Re - inventing gun powder, money and banking by way of: The History of Money ; a book suggestion

The finance crisis and bank collapses brought with them
a number of questions. What the hell banks are good
for and needed in the first place, what it would be like
without banks. Or even more radically asking the
question: what would it be like if money would be
abolished. Karl Marx for instance wanted to have
money abolished. that's why the rubel was a real
paradoxon during the Communist period, when the
pircture of Marx, the one who decried its abolishment
was on the Rubel - bills.

One way to get a little bit deeper is reading the history
of money, how and why it evolved a long time ago.
A really proper book on that was written by Glyn
Davies. A link to a synopsis and Davies' biographie

Sunday, October 12, 2008

Were media complicit in finance crisis? First shy confessions from insiders / journalists

Somebody suspecting the media of being complict in
this crisis and interested in related critique can turn
to Danny Schechter, US film maker and author of
several books.
Here an article from him in the Huffington Post in
Nov. 2007 which turns out to be accurate early
Media Complicit in "Shopapokalypse" as consumers
go wild

What is actually overdue are confessions from people
inside the media just like insiders from the finance
industry who tell it all. There would be a lot to tell
in any case.

The first inside criticism was published today, Oct. 13
in the Guardian:
"Why didn't the City journalists see the financial crisis

Certainly there is more to come, has to come. As soon
as any such articles are found, they will pointed out

Tuesday, September 30, 2008

Aspects from the bank rescues: advertising largesse and big bonuses

Banks and financial institutions are big spenders on
A nice little critique on that appeared recently
in Seeking Alpha:
Is Wachovia's $150 Million Ad Account Smart Spending?

Because of the many bankruptcies and bailouts the
whole lot of advertising by the financial sector took
on a rather comic character. Just a couple of weeks
ago a number of such institutions tried to make a
big impression on the media consumers with glossy
ads. Only to find their names big in the headlines
a little bit later.

Pretty drastic were the results of all the ads for credits
in recent years which were all over the media. Many of
those mortgage firms are meantime out of business or
drastically reduced.
It is obviously because the media were the beneficiaries
of these ad revenue that they would not raise hell
about them. There would have been a real need for
scrutiny from an early phase on.

Another aspect to which many people object, find appalling,
are the salaries and bonuses of some in the financial sector.
Really greedy people whom they now have to bail out or
Here an article in Boomberg from last year:

Wall Street Plans $38 Billion of Bonuses as Shareholders Lose

European institutions are not much different either.
It is no wonder when people have grown weary and got

Tuesday, September 23, 2008

Will concerns over banks going bankrupt also hit the media; newspapers and TV?

The events of the financial markets are likely to
affect the media. "Follow the Media" points to
some of the related problems:

"Media World Upheaval - Credit Crunch Hits
Revenue Even More As Alernative Media Grows"

In addition to that it is quite likely that the consumers
are changing their media consumption. For instance
in cases where they feel badly informed, misled.
There was indeed a lot of manipulation going on in
the recent months if not years as it turns out now.
One just has to think of the many assurances made
time and again which were regularly followed by nasty
surprises, exactly the opposite of what experts and
bank economists said on TV. It was really ludicrous.
It would thus be no big surprise if the media worldwide
would be falling out of favour, losing audience and anyhow
really excessive advertising revenue.

The worries and concerns over banks goings bust is
of concern pretty everywhere in Europa and the USA,
possibly people in Asia are asking the same questions.
Thsi means, even without any big busts, the super -
Gau, the meltdown of all public relations efforts and
advertising of banks. The millions spent by them turning
out to be complete waste of money. A case where
advertising and PR backfires, is eventually counter-

"Follow the Media" (link above) also quotes from a survey
conducted in France concerning TV ad popularity.
According to that, "nine out of ten people in France
are not keen on enduring more ads on TV. Eight in
ten believe there are already too many".
The survey was carried by a radio group, thus a bit
biased, but it is vertainly not far off the mark.

Considering the damage and costs those ads for credits
that ran in recent years have caused, surveys might come
to even worse results if that would be included.

It is possible that because of these concerns media
consumers are disconnecting themselves somehow
from the media. They might even liberate themselves
from one or the other medium when it is percerved
as annoying, useless or burden, something to shy away

Sunday, September 21, 2008

Crime comedies amidst the financial market turmoil. Two cosy crime classics:

Jeffrey Archer:
Not a penny more, not a penny less

One million dollars - that's what Harvey Metcalfe, lifelong king of shady deals, has
pulled off with empty promises of an oil bonanza and instant riches. Overnight, four 
men - the heir to an earldom, a Harley Street doctor, a Bond Street art dealer and 
an Oxford don - find themselves penniless. But this time Harvey has swindled the 
wrong men. They band together and shadow him from the casinos of Monte Carlo 
to the high-stakes windows at Ascot and the hallowed lawns of Oxford.Their plan is
simple: to sting the crook for axactly what they lost. To the penny.

Since its first publication in 1978, this book got reprinted 57 times. And it is
probably needing some more reprinting. Never really out of fashion, always good to
read in hindsight of all those smaller and bigger financial scams, it is - as can be
expected - in bigger demand again.

And another classic of this genre:
P. G. Wodehouse:
Do Butlers Burgle Banks?
Situated as it was in a prosperous county town, Bond's Bank had long enjoyed the respectful
confidence of its clients. But when Mike inherited the Bank from his late uncle, Sir Hugo, he was 
shocked to find that, thanks to the prodigal benevolence of his predecessor, the Bank was many
thousands short in the kitty. Time was needed to make up the defalcations, but, as ill luck would 
have it, the Bank Examiners were due immediately to go over the Bank's books. The prospect of 
gaol loomed large. "Unless", said Mike desperately, "some kindly burglar takes it into his head to 
burgle the bank before the Examiners arrive, I'm for it."

It was with no such altruistic thought that, coincidentally, Horace the gentlemanly gangster, had 
indeed planned such an enterprise, but strictly for the benefit of himself and his deserving 
colleagues,  Ferdie the Fly, and Basher, the safe expert. To further his plans, Horace took a job 
as butler to the Bond residence where, inspired by her superlative cooking, he fell in love with Ada, 
Mike's secretary; and as with other ardent lovers before him, the pure flame of love changed his 
motives— if not his intentions. And all might have been well, but for the well meant endeavours of 
Jill, Mike's sprightly fiancee, the intervention of Charlie the Chicago gangster and the suspicions of 
Potter, the hard-faced man from Scotland Yard. All these events, and what eventually fell out, are 
faithfully chronicled in this highly diverting novel by the inimitable P. G. 

Warren Buffetts' famous 2003 warning of the credit crunch and bank failures

A contributing author of Seeking Alpha has dug out
Warren Buffetts letter from 2003:
"Warren Buffett warned us in 2003"

It is indeed a memorable piece in which Buffett
describes the derivates as "financial waepons of
mass destruction".

Sunday, September 14, 2008

Book review: Confessions of a subprime lender. An insider's tale

Richard Bitner was co - owner of a mortgage shop. He saw
the dodgy practices in this industry and got out of it in
2005. In good time, for the company he was a partner in
before went bust in 2007.
His book draws on the experience inside the mortgage
industry and tells it all. According to him it was a matter
of lacking professionalism, crazy loans, greed and outright
fraud. And ignorance.
Bitner pulls the curtain back to reveal the inner workings
of the mortgage industry and explain why the housing crisis
is much worse than people think it is. The books is easy
to read and understand, enlightening and for someone not
affected entertaining like a crime story.

Richard Bitner: Confessions of a Subprime Lender:
An Insider's Tale of Greed, Fraud, & Ignorance

Here a link to his website,
The first chapter can be downloaded free.

Monday, August 4, 2008

Sins of the media in the subprime crisis

That the media are occasionally involved in what turns out
to be huge financial and other problems is nothing new.
Here two articles that, put together, make up an own story,
they are current history.

A pretty stern critique originally and surprisingly published
in the editor & publisher, the trade magazine of the US publishing
industry, Danny Schechter asks:

Where Was Medie When Sub-prime Disaster Unfolded?
"“It is somewhat surprising,” Larry Elliott, economics editor of London’s
The Guardian observed recently, “that there is not already rioting in the
streets, given the gigantic fraud perpetrated by the financial elite at the
expense of ordinary Americans.”

and, further examines the explanations delivered once the scandal broke:
A New York Times columnist even admitted that experts and
advocates first warned them in 2001 that predatory lending practices
were devastating poor neighborhoods but the issue was not covered
in any depth for five years. ... "

Somehow fitting to the above article, here one when,
eventually, the NYT sent a reproter round to a concumer advocacy
office, in February 2008:
Someone to Speak for Borrowers in Trouble

Sunday, July 20, 2008

Parkinson's Law . The rise to the highest level of incompetence Book review

C. N. Parkinson got this little book first published in 1957. In it he describes how to
climb up the career ladder within an organisation. In order to achieve that it is
necessary to boost bureaucracy (the Wiki entry to Parkinson is a bit weak, there
is a bit to Parkinson) increase the size the size of the organisation whatever that is,
a business or government.

Boosting the bureaucracy increases the importance of the department, of the
manager, of the bureaucrat. The bigger that gets, the better. It's all getting ever
more inefficient, becoming a purpose just for its own sake. And hence, the
necessary conditions are set for the aspiring manager to rise to the highest level:
the highest level of incompetence.

That's the highest level achievable in life, in an organisation, in politics, the position
that enjoys the most prestige, the most admiration and is regarded as most
powerful.  It then also enjoys the morbidity of the half witted fascination of the fatal.

Not in the book, because it was a later development, is the large spending on
advertising and PR such managers initiate, with the organisations money of course,
in order to have a lot of media presence, lots of fuss made about them, praises
of all kinds by such lavishly sponsored media, journalists.

This goes on until the manager, the rising star, is becoming too successful in his
way, too expensive his policy and a real problem for which he is finally rewarded
with a big compensation for leaving the company, getting the golden handshake.

Parkinson for instance tells how important it is for someone making a career like this
to meet the right kind of people, for instance inviting crucial people as well as
supporters to diner. Forty or fifty years that meant usually the conspiracy of the now
old fashioned hypocrites, the busy bodies of the local church and the likes.

When such a manager or office holder eventually gets the golden hand shake he is a
rich man, made for life and can comfortably live the rest of his life from what he has
made and the usually high pensions coming with it.

Parkinson got to know this problem in the military after WW II. There he could
observe that kind of growing bureaucracy that, once established, became a factor of
itself, had to be maintained for it's own sake.

Otherwise this rise to the highest level of incompetence is also known as the
"Peter principle", named so after another author, Laurence J. Peter, who
took it all a step further and wrote competently about the highest level of
incompetence. The book was in any case really prophetic, everything he
pointed out as problematic was brought about, kind of created. For instance
the way the banking industry grew into dinosaurs and became a serious
problem for the economies.

When Parkinson wrote this book, the world was still a
sleepy place compared to today.
For instance he talks of the thickness of carpets in offices
to showt the importance of the manager.

Here an article in the UK Times, to compare to today:
April 15, 2007


"City high flyers are spending like there's no tomorrow"

An article written just in time before the credit crunch.
That's just one example if one follows up on Parkinson,
takes a look at real life after reading.
Parkinson's Law can also be observed in politics.

Contemporary examples of people achieving the highest level of
incompetence are the CEO's of banks. They were masters in
creating huge organisations with highly problematic purposes like
inventing the credit derivatives and dealing with them. And who,
when things blow up get their huge bonuses and pensions while
leaving behind torched earth.
They were also lavish spenders on advertising and PR, giving
the media a reason to make a issue out of them, dragging things
along and making matters worse.
A look into the blog CEO watch can be recommended.

Tuesday, July 15, 2008

Stock market predictions, forecasts and history. Our Booktip: Charles R. Geisst: Wall Street: A History

With good reason one of our bestsellers is Wall Street: A History
by Charles R. Geisst.

Looking back on how things worked out or didn't, one has
almost perfect knowledge. One can figure out to the cent or
penny what was going on, how and why, where all the money
went and so forth. Predictions and forecasts made yesterday
or longer ago read completely different afterwards, once
facts have established themselves and become common
It is almost needless to mention that history is a graveyard
of predictions, forecasts, crystall ball reading. If only one had
known, or the parents or grandparents had known how some
stock / company had worked out!

And sometime historians are good in identifying future
problems, in cases when history is repeated, or in explaining
how certain problems were brought about and the consequences
they create.

One of the current underlying problems concerning banks
and financial institutions is the deal-making in cases of

excerpt from an interview:
Charles R. Geisst:
"... Wall Street discovered -- probably in the 1960s and the
1970s in the more contemporary period -- that a fair amount
of money could be made through mergers, and it was actually
much more profitable in some respects than underwriting stock."

"In the 1990s, that just became a boomtown bonanza, if you
will, because the deals were upward of between $10 billion and
$40 billion. Even a couple percentage points off that for fees
could make a very good year for the average Wall Street firm."

And here a glimpse at actual company history, how some of them did.
Seeking Alpha recently came forward with a list of the best and the
worst performers at the US stock market, their market capitalization
Changes in Market Cap for Biggest U.S. Companies
July 29