Tag: Integrity

Britain’s National Interest ….

When is a National Interest not in the national interests?

“The Guardian”, a British newspaper, ran a story on October 30th quoting British Prime Minister Gordon Brown as gordon-brownsaying:

“If you have the chance for that to happen, it is in Britain’s national interest. But of course it may not happen, and there are other candidates as well.

This was in relation to the possible nomination of former British Premier Tony Blair as the first President of Europe as prescribed by the Lisbon Treaty, the EU’s attempt to rationalize its processes and – according to critics – take the EU forward on its seemingly-inevitable path to political union.

Now, a couple of things stuck me forcefully about this statement.

First, WHAT EXACTLY has choosing the first European President got to do with Britain’s national interest? Should we not be first of all concerned with EUROPE’S interest? Is a preoccupation with OUR national interest in the spirit of European partnership at all?

Secondly, HOW exactly could Britain’s national interest be supposed to benefit from the President being British? Would he somehow be expected to favour Britain? Perhaps swing lucrative aerospace contracts our way?

In other words, what Brown said was ridiculous, betraying a narrow, partisan view of what European cooperation is all about. Now I have many problems with the EU, but that doesn’t mean I like to see Britain taking such a parochial and frankly selfish standpoint.

I would feel no pride whatsoever just to see a Brit as President, nor would I expect or indeed wish any particular aspect of British national interest to be furthered just because the EU President was British.

On the contrary, I believe Britain’s image has immensely suffered with the current shenanigans involved in Whitehall’s lumbering attempts to push Blair’s candidacy, including reportedly sharp exchanges between Brown and other leaders Tony-Blair1at the current summit. It was – to me if apparently not to Blair and his advisors – blindingly obvious that the only way for Blair to have any chance of getting this post was to be humble, discreet, lofty and statesmanlike. Instead, we have seen reports to the effect that he would take the job “if it were big enough” and that various political worthies have been “sounded out” about whether they would serve under him in Brussels.

A large dose of hubris is in order I am afraid, and in any case Blair’s chances seem to be fading fast, not least because German Chancellor Angela Merkel is said to have become aware of how “unpopular Blair is in his own country”, in contrast to his international image as globe-strutting statesman.

Blair’s future does not interest me overmuch; I am more concerned by the current PM’s lack of judgement and statesmanship.

By Chris Snuggs

Remarkable people update

Another quick look at Riverford Organics and a lesson for all.

Further to my post on Guy Watson of Riverford Organics, in the mini-series on remarkable people:

A couple of Saturdays ago (October 24), we had a great time out at Wash Farm, the home of Riverford Organics.

Our five year old son enjoys eating sweetcorn. Recently, having carried the weekly veg box from our doorstep to the sweetcornkitchen calling “Riverford coming through!”, he was then delighted to report: “there are three sweetcorns”, there having been two in previous weeks!

riverford 008On Saturday, he marched into a field of sweetcorn and, as if he had done it for years, went straight to a plant and, explaining what he was doing, tested the crop for size and ripeness and picked it by breaking it off like an expert. He then handed it to me and proceeded to pick many more of them. When I asked him how he knew what to do, all was revealed: “I saw it on the telly!”.

As luck would have it, I encountered Guy Watson at the event and it was great to shake his hand and offer a few words of congratulation on what he has done. Of course, he has no idea who I am!

Their customer service is great; and now they are embarking on more market research to understand better how their customers use their products! [See the relevant edition of their newsletter here!] [The subject of a Post on Market Research coming out soon. Ed.]

Although I am not an expert, I know enough to know that this is remarkable. To think about how customers are using the product, to measure it, to go into customers homes and find out what they are really doing with your products: this is at the pinnacle of good customer research!

No doubt there are others, but I have only ever heard of one other company who paid so much attention to customers in their homes. It was Intuit, the highly regarded US software vendor which, for decades, has consistently beaten Microsoft at providing accounting software. Their representatives would wait in a shop for a customer to buy their product and then request permission to travel with them to their home to record exactly what experience they had with installing and using it!

Final report from the day at Riverford: the event on Saturday was “Pumpkin Day”, its primary purpose being to buy (and have carved) your pumpkin for Hallowe’en. There was a competition to guess the weight of a (largish) pumpkin; I guessed by comparative lifting of the pumpkin and of said five-year-old son, and based my estimate on information from his mother about his most recent weight! Guess what? I have just heard that I won! So a case of (organic, of course) red wine is now expected to materialise alongside this weeks box of vegetables!

By John Lewis

P.S. The Riverford Blog is a good read

Sherry responds to John

A Post published today by John Lewis raises the question of why not consumer protection for financial ‘products.

Sherry’s reply.

A great question, John: why do we not have a threshold level of safety for financial products, as we do with cars and toys?

Well, for one, if a financial product “fails,” the consequence is purely financial – it is not injury or death.  A financial product simply represents a financial investment today in exchange for financial payoffs tomorrow.

The less certain those payoffs, the higher the minimum required return on that investment. If the returns were certified or regulated in some way, risk would be reduced, and the required return would also fall.  Limiting risk exposure throws out the baby with the bath water:  less risk means lower returns on the investment.  Look at the real returns to U.S. Treasury Bills – they are almost zero!

There is a role for regulation in financial products and that is for disclosure of relevant information.  When we invest in a financial product, we are putting our money at risk in exchange for future expected cash flows.  We forecast those cash flows on the basis of material information about the firm, its products or services, and its management and strategy.

Even here there is a fine line between the right to know and proprietary information that enables a firm to invest its own funds in the hope of generating a large return in exchange for taking risks.

The Securities and Exchange Commission’s requirement for a 20-day window between the time a bidder makes a tender offer for a target and the time the target shareholders must decide whether to accept the offer or not is an example of a regulation that crosses the line, in my view.

In a misguided attempt to protect shareholders from fly-by-night tender offers, the SEC has created an environment where multiple competing bids can arise, driving down the return to the original bidder and limiting the incentives for firms to productively redeploy assets through tender offers.

By Sherry Jarrell

Consumer ‘safety’ for financial products

Are we missing a lesson that has been applied for years?

I have resisted any temptation to comment on the economic situation on Learning from Dogs. The contributions from others are based on far more knowledge and understanding of the subject then I will ever have.

However, I feel obliged to ask humbly for some clarification about something that bothers me. Are we putting the cart before the horse? Are we ignoring the relationship between provider and consumer in finance?

The regulatory regime applied to the vast majority of products which are allowed to be sold to the public is such that toasterthere are probably more stringent safety standards for an electric toaster than for most, if not all, financial products!

Much of the talk of regulation and restraint, in the current climate, seems to relate to remuneration of people working for financial organisations. But, why does it matter what they receive? In other fields, success is rewarded and the shareholders, admittedly fairly indirectly, have some say on the policy in that area. Why should they not pay what they wish?

On the other hand (to coin an economic phrase!),  the minimum standards of the products are set by regulators.

In other fields, if a supplier cannot demonstrate, to the satisfaction of the regulators, that its product meets specified safety standards, then that product is not allowed to be offered.

It is very simple! I am not referring to contracts, customer service, compensation and so on; I am referring to a threshold level of safety below which the product is not allowed to be sold or operated. Think: “cars”, “aeroplanes”, “electrical appliances”, “children’s toys”, and … well anything else!

To be even clearer, this is not about “perfect safety” which is, of course, not available at any price. This is not about blame. This is not about guarantees. It IS about inspection, testing, certification, regulation … oh and policing!

Can anyone explain why this approach cannot be applied to financial products? (Sherry attempts to here.)

By John Lewis

p.s. as chance would have it the image of the toaster at the head of this Post was taken from an article talking about a recall of the Viking Toaster – point made rather well, don’t you think?

More truth about this crisis

“Never in the field of financial endeavour has so much money been owed by so few to so many. And, one might add, so far with little real reform.”

Thus spoke Mervyn King, governor of the Bank of England, on Tuesday night, 20th October, to a group of Scottish

Mervyn King
Mervyn King

business people.  Echoing one of Churchill’s many famous sayings, Governor King is probably one of the highest ranking people around to state, at last, what everyone on the Clapham Omnibus (a London bus route) knows to be obvious.  Whether the forces can build to a point where common sense is applied by Governments before we enter another Great Depression is another matter.

Mention of the Great Depression (the last one) triggers a step back in time.

On June 16th 1933 Franklin Roosevelt signed into law the Glass-Steagall Act.  In fact that was the second Act signed

Senator Carter Glass
Carter Glass

into law, the first Act was passed by Congress in February 1932 and was largely designed to stop deflation.  The second Act was, in a sense, much more important because it set out to prevent bank holding companies from owning other financial institutions.  It was repealed on November 12th, 1999 by the Gramm-Leach-Bliley Act. Just a little under 10 years ago.  10 years which have seen the biggest boom-bust probably ever in modern history.  And has much of the Western world slipping into another great depression.

US Senator Carter Glass and US Congressman Henry B. Steagall must be turning in their graves

Steagall
Henry Steagall

But thank goodness for investigative journalism and the role of the Internet in creating a truly open ‘meeting place’.

Read more about this Post

The Polanski Affair

France, Polanski and respect for the Law.

Roman-Polanski2
Polanski

I have always associated France with surrealism after, at a fairly young age, seeing those amazing photos of early 1920s surrealist art by Duchamp, Ernst and others. In recent days this surrealist experience has returned with a vengeance in the bizarre case of Roman Polanski, with a reported 62% of French people believing that the arrest of Polanski in Switzerland was an unjustified affront to a long-standing resident “artist” and citizen of France.

The strongest condemnation of this arrest was initially by the French Minister of Culture, Mr Frédéric Mitterand, who said the affair “had no sense” and who expressed his “profound emotion” at the arrest of this “film director of international repute.”

Read more of Polanski’s arrest

Insulting us, postscript

Just a few figures that underline reality.

US rent indexes declined in September. Last time this happened was 1992.

US Consumer Price Index fell 1.3%, year on year, in September 2009. Note that it bottomed at -2.1% y/y in July 2009, making it the largest annual contraction since 1949.

September’s US food prices fell (-0.2%) in September, the first annual decline in over 40 years.

US industrial production, as of August, was down (-10.7%) compared to August 2008.

Just a US problem?

Japanese industrial production, as of August, was down (-22.7%) compared to August 2008.

Britain’s industrial production, as of August, was down (-9.3%) compared to August 2008.

Eurozone area industrial production, as of August, was down (-15.9%) compared to August 2008.

Meanwhile the banks steam ahead reporting huge profits ……

Crazy world!

By Paul Handover

Climate warming?

What’s the truth about climate warming, e’rr change?

I will put my hand up to subscribing to the notion of humans having such an effect on Earth’s atmosphere that climate warming was likely, inevitable and could be the destruction of life, as we know it.  It seemed to fit the idea of mankind being disconnected from the planet and completely out of touch with the reality that our Earth is a fragile place, our atmosphere a (relatively) very thin ‘skin’ around our planet and few of us spare a second thought for protecting the environment for the generations to come.

earth-moon

But gradually the faint sounds of opposition to the ‘simple’ argument that man is screwing up the Planet have become clearer.  The latest is a very clear cry.

Read more about this Post

Integrity vs Entertainment

It’s a funny old world …

Recently I was asked to run a detail lasting 4 hours in an Airbus simulator, for a film crew coming from Australia.

I was told by the training office that this was just operating the instructor panel on the simulator to help them get the information they needed regarding certain situations that would be explained in a television documentary to be aired on a Sunday evening weekly program.

A320 simulator 'cockpit'.
A320 simulator 'cockpit'.

Apparently the various people involved had visited Airbus, and were due to return to Australia for interviews with some of the major airlines operating Airbus aircraft.

I soon gathered that the likely scenario was to be the loss of instrumentation and automation as experienced by an A380 crew recently, and what might have been the case with the A330 lost over the Atlantic.

Read more about this Post

Integrity of explorers

Achievements and integrity

What do the achievements of explorers like Sir Ranulph Fiennes and Ann Daniels have to do with “integrity”? It certainly is about directing a huge effort towards something larger than oneself, while exposing oneself to considerable risk. It is also about taking single steps and trusting that they add up to something. However, there is perhaps another aspect.

It is my understanding, without being a psychologist, that it is all in the mind; and one can detect this in their interviews. For example, Ann Daniels clearly loves being “on the ice”, especially floating ice that is moving, sometimes in the wrong direction! Her references to phoning her children very occasionally while away also indicate that she is not concerned about being away from them.

Take your own baggage

It is also my understanding that there is one aspect that psychologists have discovered is required for this kind of activity. It is a characteristic that they have found in people who are remarkably successful at it. Perhaps it was spotted in Ann Daniels by the people who selected her for her first expedition.

It is not easy to describe, but it is the characteristic that, psychologically, these people “take themselves with them” when they travel. When they are in all sorts of very demanding situations, they are not wishing that were back at home in a cosy environment. They are completely “present”, as others have described it (including on this blog). They have all their feelings, psychological baggage and all, “with them”.

Perhaps there is something that we can all learn from this.

More on remarkable people …

By John Lewis