Print Story We deal in lead
By TheophileEscargot (Fri Jan 09, 2009 at 07:47:16 AM EST) Reading, Me (all tags)
Reading: "Wizard and Glass", "Wolves of the Calla", "The Hundred Days", "The Witches of Eastwick".

What I'm Reading
Finished volumes 4 and 5 of Stephen King's Dark Tower series: Wizard and Glass and Wolves of the Calla. As ucblockhead and Breaker said, not really that great. Not absolutely terrible, but pretty bloated and self-indulgent. King seems to have fallen into the Heinlein/Asimov late career trap and tried to stitch everything together into a giant multiverse, which is always a bad idea.

Might not have bothered if I hadn't been on the road with fewer alternatives to read. Since I've got this far may as well finish the last two though.

What I'm Reading 2
The Hundred Days is the second-last completed novel in Patrick O'Brian Aubrey/Maturin series.

Thinking about it, this one might also suffer from late career problems. O'Brian uses the last gasp of the Napoleonic wars, Boney's escape from Elba, to go back to the style of the earlier books. Once again Aubrey and Maturin are spying and fighting their way around the Med: there's not much of the character-driven novel stuff of the last few books.

That works well in some ways, but there's not much new here: O'Brian seems to be reworking plot elements that we've seen before: orphan kids, sailors' superstition, hauling ships' guns to overland heights. Also, big changes happen with small consequences. In what almost seems like a fit of pique, Diana Villiers is killed off-page, and Maturin seems to feel only perfunctory grief before returning to normal. Wonder if this reflects some kind of exasperation with marriage on O'Brian's part..

Still, it's decent enough reading.

What I'm Reading 3
The Witches of Eastwick by John Updike. Never saw the movie. Takes an interesting diversion from his normal angle by describing three magic-using New England witches who start an affair with the Devil.

Found it a bit irritating at first, but the quality of the writing got me hooked. The ending was pretty low-key though: thought there'd be some kind of dramatic witch-burning or confrontation, but not much happens..

Struggling with the horror of being back at work after 30 days off. Urgh. Have bought a lottery ticket but there seems to be no other way out.

Eyes seem to be getting worse. Had some splitting headaches at work till I boosted the font size. Have booked a eye test to see if I need new glasses: only 11 months since the last pair.

Home computer seems to be having some startup problems. If I don't hold the power key down for a few seconds, it doesn't start. Then, about two out of three times the power and fan stay on, but the screen doesn't come on: I have to try a couple of times. Have had it a few years and tempted to just get another one

Not sure what the Tories are doing with their economic plans. I like the idea of breaking the credit crunch by lending directly to borrowers instead of going through the banks: it's what I've been saying all along.

But the plan for a tax cut on savings seems just plain daft at the moment. To smooth out the economic cycle, the government should encourage more saving and less spending in the boom; less saving and more spending in the bust. So this is exactly the wrong time to be encouraging saving. And what happened to all their complaints about excess borrowing? Why increase the deficit in a way that will exacerbate the cycle?

Presumably it's an attempt at populism. The general public don't seem to like counter-cyclical policy, since it's very counterintuitive. But deliberately choosing bad, popular policies seems like a dangerous game: the Tory reputation for economic competence isn't strong enough to mess around with.

It might just be a sign of confusion in the Tory camp: maybe the old guard is forcing inconsistent policy changes on the weakened George Osborne.

Pics. Lego minifig timeline. Will Eisner Spirit splash pages. Ugly: Moon snails.

Video. Foley artists in split-screen. Young girl talking about herself. Lenny Henry Dr Who spoof from 1985.

Articles. Tutu. Recessions as excuses. Unactioned suspect and surveillance

Toons. Vampire.

Misc. Why it's called Operation Cast Lead. I assumed it meant a hail of bullets directed at the Palestinians... UFO wind turbine explanation. Big Fat Blog to close. Top 50 effects shots (MeFi) Mechanical rice-picker at last.

< Yeah, I have a hot ass | I watched Rambo: First Blood last night >
We deal in lead | 29 comments (29 topical, 0 hidden)
late career trap...multiverse by wiredog (4.00 / 1) #1 Fri Jan 09, 2009 at 08:00:22 AM EST
Lots of writers do that. McCaffrey, for example.

Keep that rice picker away from my ears!

Earth First!
(We can strip mine the rest later.)

what's the difference by Dr H0ffm4n (2.00 / 0) #15 Sun Jan 11, 2009 at 11:24:47 PM EST
between a multiverse and a universe whose parts only join up late in fiction?

[ Parent ]
Not sure what McCaffrey's done by R Mutt (2.00 / 0) #19 Mon Jan 12, 2009 at 02:46:10 AM EST
But in "Dark Tower", they travel between the parallel universes of various Stephen King novels. A character from "Salem's Lot" joins them from one universe, then they visit an empty city from "The Stand" in another universe, then travel into our universe and meet Stephen King himself, and so on.

I suppose that's a bit different to Asimov's late efforts, where he tried to join different series' from different time periods together into a single consistent universe/timeline. Seems to be the same impulse though.

[ Parent ]
Recession as an excuse by ucblockhead (4.00 / 1) #2 Fri Jan 09, 2009 at 08:09:30 AM EST
Your link seems borked. I think this is what you want.
[ucblockhead is] useless and subhuman
Comment on contents by ucblockhead (4.00 / 1) #3 Fri Jan 09, 2009 at 08:13:31 AM EST
From what I've seen, lots of companies use it as a way to sell belt tightening to their employees.
[ucblockhead is] useless and subhuman
[ Parent ]
today by garlic (4.00 / 1) #8 Fri Jan 09, 2009 at 12:35:18 PM EST
I got an email saying that merit increases will be limited to 4%, because the pension plan is in trouble and they want to spend money there instead, even though as a defense contractor they expect our next few years we'll make as much profit as the last few years.

[ Parent ]
Could be worse by ucblockhead (4.00 / 1) #10 Fri Jan 09, 2009 at 02:46:47 PM EST
During the dotcom boom, I worked for a company that said "you got top marks in your review so you get the top merit increase of 4%! (prorated to 2.75% because you weren't here a full year.) I hesitate to think what line they are hearing now.
[ucblockhead is] useless and subhuman
[ Parent ]
I certainly understand that. by garlic (4.00 / 1) #11 Fri Jan 09, 2009 at 03:41:12 PM EST
The biggest local competitor in highering engineers used to be motorola.

The message we were sent was in reverse order then what I posted. "We're doing great, and we expect to continue doing great. Except for our pension fund performance, which we're gonna fix! With the money we were going to use for your raises, but we have to do this, even though we're doing great and expect to continue to do great."

[ Parent ]
Thanks! Should be fixed [nt] by TheophileEscargot (2.00 / 0) #5 Fri Jan 09, 2009 at 08:32:56 AM EST

It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?
[ Parent ]
The last book in the Dark Tower series by Breaker (4.00 / 1) #4 Fri Jan 09, 2009 at 08:28:29 AM EST
Is a return to form.  Not as good as the 2nd or 3rd book IMHO though.

Why do you describe Osbourne as "weakened"?

Bearing in mind that the banks are struggling to meet capital adequacy, encouraging people to save is a Good Thing for the banks.  I have heard it bandied around that there's 7 times the amount of savers to debtors -  I'd guess a lot of them are retired, sitting on nest eggs to see them through their autumnal years.  Keeping them happy will be a political gesture, but it'll also mean that the banks actually have cash to lend.

George Osbourne by TheophileEscargot (2.00 / 0) #6 Fri Jan 09, 2009 at 08:40:35 AM EST
After the yacht thing, there was a lot of talk about replacing him. Kenneth Clarke was mentioned. Osbourne seems to be doing a pretty poor job... he really ought to be wiping the floor with Darling and Brown given the current situation.

From what I can see, the banks are sitting on plenty of money, and interest rates are so low they can borrow as much as they like from Bank of England. The problem is they're not willing to lend it.

I think it's the same mixture of herd instinct and agent self-interest that led them to lend so much and so laxly in the boom. "Everyone else is doing it, so it must be OK, and even if it isn't they can't sack me without sacking everyone..."

Daily Mash.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?

[ Parent ]
Labour trolls, mostly by Breaker (4.00 / 1) #17 Sun Jan 11, 2009 at 11:42:54 PM EST
They seemed to be the main cheerleaders for Clarke.

Banks are sitting on plenty of money because they have new, higher CAD to meet.  Brought in as knee jerk by GTLSB, after he lowered them previously.  They need that money to meet regulatory directives.  Plus they know they have a bit of toxic debt remaining out there that must be insured against.

In any case, making sure the banks have "real" cash as opposed to a government injection is a good thing though, no?

[ Parent ]
Hmmm by R Mutt (2.00 / 0) #18 Mon Jan 12, 2009 at 02:10:34 AM EST
Banks are sitting on plenty of money because they have new, higher CAD to meet.
That sounds a bit odd. Do you have a cite for it?

[ Parent ]
GIYF by Breaker (4.00 / 1) #20 Mon Jan 12, 2009 at 05:01:27 AM EST
From Peston on the BBC:

"In normal times, a cut in the Bank Rate would help to boost the flow of new lending. But right now it's not clear that a reduction would have much positive impact

The reason is that the main headache for the banks is that both regulators and markets are forcing them to hold more capital relative to their loans, their assets. "

(emphasis mine).  It would also appear that CAD is more modernly referred to as CAR, so if my dinosaur abbreviation threw you, my apologies.

[ Parent ]
But by R Mutt (2.00 / 0) #21 Mon Jan 12, 2009 at 05:16:01 AM EST
Robert Peston says "regulators and markets". You said "Brought in as knee jerk by GTLSB, after he lowered them previously."

But last thing I heard, Gordon Brown was opposing stronger capital requirements from the EU. So Gordon Brown seems to me to be opposing these stronger capital requirements, not bringing them in.

(Unless GTLSB means someone or something other than Gordon Brown, I may be losing track of the acronyms a bit).

[ Parent ]
And the regulators are given their targets by Breaker (4.00 / 1) #23 Mon Jan 12, 2009 at 08:12:51 AM EST
And policies by whom, exactly? 

From your link:
There was no indication on Wednesday that Britain would remove its opposition to one major proposal from the European Commission, contained in the so-called capital requirements directive. This would require financial institutions to retain a stake of at least 5 percent of the exposures they securitize.

It isn't clear from that link if GTLSB wants a higher or lower capital requirement of securitised assets, only that Britain opposes 5% retention.  In any case, capital requirements extend across all sorts of instrument classes.  In this instance, what the EU is saying is that banks can't bundle up a whole load of securitised debt they own and then flog the lot as a new issue; they have to keep 5% of the issue back. 

In effect, it's an attempt to stop the trading floors packaging up a whole boatload of shit and selling it to the unwary - banks have to eat their own dogfood. 

Retention of a holding in an originate to distribute securitisation issue is one part of capital requirement.  You also have different requirements for different instruments, such as saver's deposits. 

[ Parent ]
Seems a bit of a stretch by R Mutt (2.00 / 0) #24 Mon Jan 12, 2009 at 08:45:48 AM EST
I see Peston opining that one reason the banks are lending less is that markets and regulators are demanding they hold more capital.

("Nuffink to do wiv us, guv" from the banks again).

But some regulations are EU or international. Some come from private institutions like the City of London itself.

Increasing capital requirements in the middle of a recession would be pro-cyclical: making the recession worse. To a private institution, that's fine: it's their job to make money, not end recessions. But it would seem to be a very strange thing for a government to do. (Well, it's reasonable to do it after the recession as the EU directive suggests, but not right now).

I don't see what political benefit it would have for Gordon Brown either. So if it happened, I'm pretty curious about the details.

[ Parent ]
More capital requirements required by Breaker (4.00 / 1) #25 Mon Jan 12, 2009 at 09:45:11 AM EST
On the securitised debt, and on other instruments, including savers deposits.

Increasing capital requirements in the middle of a recession would be pro-cyclical
But the EU is taking action on trying to stop the sale of toxic debt, spreading a bit of pain back to the banks so they follow events more closely instead of gungho "bonuses for everyone" frenzies.  Which are good things, no?

Increasing the liquidity reserve requirement of banks (to cover savers deposits) is so that GTLSB can go "we've upped the limit to 50K guaranteed for savers, saving the world, etc" to the media.

But if the cash requirement for banks was left at the present low levels (dropped by GTSLB in the 90's), then if there is a run on a bank it'll cost shitloads because that 50K is backed by the government (which is effectively us, the taxpayer).  So cash reserve requirements have been increased, as well as the retention of the 5% securitised instrument issues - 2 different requirements that fall under the umrella of capital requirements.

In short, political games for media soundbites that'll extend the recession or cause further taxpayers cash to be handed to the banks.  All the while looking to the press and the voters that he's "saving the world".

One of the problems with all of these cash injections is that they have to be borrowed.  Which means issuance of gilt bonds.  Seeing as even Germany failed to sell all of their new issue government backed bonds recently do you think that UKia will be able to raise money that way anymore?  We're either headed to the IMF, or we fire up those printing presses and get busy, with all of the attendant problems that can cause.  Even worse, GTLSB has reduced transparency of the BoE so he can get away with printing the cash in private for 3 weeks longer.

[ Parent ]
Tenses by R Mutt (2.00 / 0) #26 Mon Jan 12, 2009 at 10:12:04 AM EST
You originally stated, in the present tense: "Banks are sitting on plenty of money because they have new, higher CAD to meet."

But that "Increasing the liquidity reserve" link refers to a consulatation paper for a change that may be be "phased in gradually" in the future.

So it doesn't really make a lot of sense as an explanation for why the banks aren't lending right now.

I've been Googling away and I can't see anything about the UK reducing cash reserve requirements either.

Stumbling and Mumbling had a bit on "printing the cash in private" thing. He points out

2. The Bank couldn’t print money in secret even if it wanted. Quantitative easing (QE) works by the Bank buying assets from commercial banks - and giving them money in exchange. It must, therefore, announce its intentions to do so to banks, and therefore the rest of us.

3. There’s little point doing QE in private. The point of QE is to prevent severe deflation. This is best done by raising inflation expectations, which in turn is best achieved by making as much of a song and dance about printing money as possible. Indeed, in theory it’s possible that the announcement of QE alone would be sufficient to raise inflation.

I think you're getting a bit carried away with some of this stuff. It could be that the "ostensible purpose" is the actual purpose: the Bank of England will be able to make short term loans to troubled banks without their share price plummeting catastrophically when it's revealed in the accounts at the worst possible time.

[ Parent ]
I give up googling for you. by Breaker (4.00 / 1) #27 Mon Jan 12, 2009 at 11:19:40 AM EST
If you're a bank manager right now and you see a whole raft of new legislation coming your way (both being implemented and unknown threat of it) that will mean you have the need for ready cash, do you:
a) hoard cash
b) lend like crazy when you're only going to get 1.5% plus a little?

Thanks for your well thought out and considered opinion on my opinion; I had hoped for a discussion but got ad hominem instead.

[ Parent ]
But that wasn't your original line by R Mutt (2.00 / 0) #28 Mon Jan 12, 2009 at 12:09:14 PM EST
"Brought [note past tense] in as knee jerk by GTLSB, after he lowered them previously. "
It was only after I pointed out that that wasn't true that you decided it was actually the threat of future capital requirements in knee-jerk FSA consultation documents instead.

I think you've read in some blog somewhere that the reluctance of banks to lend is Gordon Brown's fault, and you're trying to reconstruct the argument. But frozen credit markets and reluctance to lend are happening in markets all around the world, even outside Gordon Brown's sphere of influence, so his regulations cannot be primarily responsible for it.

Repeating the point from the beginning of the thread, if I were a bank manager right now, my reasoning would be:

1. If I make a mistake doing the opposite of everyone else, I will be singled out and punished.
2. If I make a mistake doing the same as everyone else, I will have an excuse and they won't be able to single me out.
3. Everyone else is being irrationally reluctant to lend.
4. Therefore I will do the same as them even if it's wrong.

That's how they thought in the lending boom (changing "reluctant" to "eager" in 3), that's how they're thinking now, and that's why we have an economic cycle.

[ Parent ]
Read more financial sites by Breaker (2.00 / 0) #29 Tue Jan 13, 2009 at 03:11:51 AM EST
Bloomberg, Reuters for a start.  Curiously I don't have time to bookmark every single pertinent article for proving my comments / diaries.  Mainstream raw fact  - light down stuff unfortunately gets to the head of Google.

[ Parent ]
Last book by ucblockhead (4.00 / 1) #7 Fri Jan 09, 2009 at 08:54:33 AM EST
Yeah, I agree, though it was still a bit too long. I really liked the ending.
[ucblockhead is] useless and subhuman
[ Parent ]
Ending by Breaker (2.00 / 0) #16 Sun Jan 11, 2009 at 11:38:51 PM EST

[ Parent ]
Computer... by Metatone (4.00 / 1) #9 Fri Jan 09, 2009 at 12:53:34 PM EST
Don't forget to make a backup.

The Tories?
I think their all prisoners of reading too much Amity Schlaes. I heard Andrew Neil quoting it virtually verbatim on the Politics Show and some Tory bloke (Ed Vaizey?) nodding along open-mouthed like Homer Simpson. Vince Cable was remarkably diplomatic in his put-down and Neil went 3 shades of purple, but Vaizey never seemed to notice...

Thirty Days Off? by jimgon (4.00 / 1) #12 Sat Jan 10, 2009 at 05:12:53 AM EST
The only way I could get thirty days off would be by being fired.

Technician - "We can't even get decent physical health care. Mental health is like witchcraft here."
That includes weekends and public holidays by TheophileEscargot (4.00 / 1) #13 Sat Jan 10, 2009 at 06:07:19 AM EST
The law.
It is unlikely that the good of a snail should reside in its shell: so is it likely that the good of a man should?
[ Parent ]
Twenty five days by jimgon (4.00 / 1) #14 Sun Jan 11, 2009 at 07:15:11 AM EST
If I use all my vacation and alloted sick time and base it around a holiday, counting weekends, I can get to twenty five days. 

Naturally I'm jealous of anyone living in a country which actually has protections and privileges for workers.  The US Government only protects employer rights and privileges.  Even in the vaunted Commonwealth of Massachusetts, liberal mecca of the US, employment is an at-will thing with little protections.

Technician - "We can't even get decent physical health care. Mental health is like witchcraft here."
[ Parent ]
We didn't save when we should have. by Tonatiuh (4.00 / 1) #22 Mon Jan 12, 2009 at 07:02:40 AM EST
This means that people will not be able to provide for themselves if they lose their jobs.

So a new government has to encourage people with a job to save some money, just in case, while at the same time encouraging some spending by means of the extra money people would have thanks to the tax cut.

The government's plan seems horribly dangerous: borrow money you don't have (inflationary), print some more (inflationary) and increase the public debt (making us all poorer).

To be honest the Labour government has lost any credibility of economic competence, so we could try the Tories as well anyway.

We deal in lead | 29 comments (29 topical, 0 hidden)