When a man is an island

David Glasheen on Restoration Island in Far North Queensland, of whom I wrote in my Thursday Island travelogue, is still attracting the world's attention. Even the New York Times ran his story.

Just now I received an email from Holland which I redirected to him:

Dear Sir, For an article for a Dutch travelmagazine Columbus, I am writing a coverstory about Island Caretakers. I found a very old blog on your website, from 3th of May 2005. I was very interested in David Glasheen's story, so I would like to contact him to do an interview. Could you please provide me with his contactinformation? Thank you in advance! With kind regards, Mariska van Brederode Columbus Magazine 0031 23 534 6830 info@columbusmagazine.nl

Passing the thyme in the new vegie garden

Shovelling dirt is hard work; luckily, I had a little helper: CLICK ON IMAGE
Buying my cucumber sandwiches has become too expensive and I have decided to (again) grow my own (the cucumbers, that is).

Stay posted on this growing concern.

Trading on thin air

After the failure of (1) Fuel Watch,(2) Grocery Watch, the (3) Education Revolution and School Building Programme, the (4) Childcare Centre Building Program, and the (5) Home Insulation Scheme, Kevin 07 has now also scrapped the (6) Emissions Trading Scheme (ETS).

The ETS was always a scam, an attempt to create a new global derivatives bubble on a trade in thin air, to replace the derivatives bubbles on real estate and stocks that are imploding.

Did Kevin Rudd and Penny Wong decide to deep-freeze their emissions trading scheme, because Goldman Sucks was caught out and charged with fraud?

Remember, Goldman Sucks is the financial power behind carbon trading worldwide:

- Goldman owns 10 per cent of Al Gore’s Chicago carbon exchange;
- Al Gore’s partners in his Generation Investment Management hedge fund in London are all former Goldman Sachs executives—David Blood, Mark Ferguson and Peter Harris;
- Malcolm Turnbull, the man who almost delivered the ETS, by cutting a deal with Rudd without his party’s support, is Goldman Sachs’ main man in Australia.

In “The Great American Bubble Machine” published in the July 2009 edition of Rolling Stone magazine, author Matt Taibbi characterised Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

“The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. … They’ve been pulling this same stunt over and over since the 1920s—and now they’re preparing to do it again, creating what may be the biggest and most audacious bubble yet. … the new game in town, the next bubble, is in carbon credits … a groundbreaking new commodities bubble, disguised as an ‘environmental plan,’ called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.”

If Rudd and Wong dropped the ETS because they were afraid of being drawn into another Goldman Sachs fraud, that’s good.

Of course, they didn't say so. What they did say, in the usual Kevinese gibberish, was something about "extending the implementation phase of the emissions trading scheme".

So this is the 6th failure. Will the new health scheme that no-one understands be Number 7 ? After all, he hasn't been called Kevin 07 for nothing!

P.S. As a rule, I don't pass along these "add your name" lists that appear in emails, BUT this one is important. It has been circulating for months and has been sent to over 20 million people. We don't want to lose any names so just click here, add your name to the end of the list and send it on.

Support for Kevin Rudd Please keep it going! To show your support for Kevin Rudd please go to the end of the list and add your name. 1. Mrs Rudd. 2.

Having a bad day? Think again!

Things Got Ya Down? Well Then, Consider These . . .

In a hospital's Intensive Care Unit, patients always died in the same bed, on Sunday morning, at about 11:00 am , regardless of their medical condition. This puzzled the doctors and some even thought it had something to do with the super natural. No one could solve the mystery as to why the deaths occurred around 11:00 AM Sunday, so a worldwide team of experts was assembled to investigate the cause of the incidents.

The next Sunday morning, a few minutes before 11:00 AM all of the doctors and nurses nervously waited outside the ward to see for themselves what the terrible phenomenon was all about. Some were holding wooden crosses, prayer books, and other holy objects to ward off the evil spirits.

Just when the clock struck 11:00, Pookie Johnson , the part-time Sunday sweeper, entered the ward and unplugged the life support system so he could use the vacuum cleaner.

Still Having a Bad Day?

The average cost of rehabilitating a seal after the Exxon Valdez Oil spill in Alaska was $80,000.00.

At a special ceremony, two of the most expensively saved animals were being released back into the wild amid cheers and applause from onlookers.

A minute later, in full view, a killer whale ate them both.

Still think you are having a Bad Day?

A woman came home to find her husband in the kitchen shaking frantically, almost in a dancing frenzy, with some kind of wire running from his waist towards the electric kettle. Intending to jolt him away from the deadly current, she whacked him with a handy plank of wood, breaking his arm in two places. Up to that moment, he had been happily listening to his Walkman.

Are Ya OK Now? - No?

Two animal rights defenders were protesting the cruelty of sending pigs to a slaughterhouse in Bonn, Germany. Suddenly, all two thousand pigs broke loose and escaped through a broken fence, stampeding madly. The two helpless protesters were trampled to death.

What? STILL having a Bad Day?

Iraqi terrorist Khay Rahnajet didn't pay enough postage on a letter bomb. It came back with 'Return to Sender' stamped on it. Forgetting it was the bomb, he opened it and was blown to bits. God is Good!

There now, Feeling Better?

Liberté, égalité, fraternité, polygamie

A woman driver wearing an Islamic face veil has been fined by French police for not having a clear field of vision. The fine was small, but it garnered big attention Friday and may illustrate what is to come as the president pushes to outlaw the veils nationwide.

Traffic police in the western city of Nantes fined the 31-year-old woman €22 ($29) in early April, her lawyer said. The fine was based on a rule that says drivers should have freedom of movement and a sufficient field of vision, lawyer Jean-Michel Pollono said.

But wait, there's more:

As the case escalated in the media spotlight, Interior Minister Brice Hortefeux's office said he wrote to his counterpart at the Immigration Ministry to request a study into whether the woman's Algerian-born husband could be stripped of his French nationality for suspected illegal behaviour.

In the letter to Immigration Minister Eric Besson, Hortefeux said the man was suspected of polygamy and fraud of state social services by allegedly benefitting from state financial aid for single parents paid to each of his four wives -- all of whom wear veils.

Planning for the end of the world

18 years after the introduction of compulsory superannuation, the Federal Government finally wants to abolish commissions payable to financial planners and force them by law to always act in the best interests of their clients.

What were they doing before? Not acting in the best interests of their clients? Were they just interested in dealing themselves the highest commissions? Such as the $6 BILLION paid in commisssions and kickbacks over the last four years alone? Why am I not surprised? And why did it take our lawmakers 18 years to work that one out?

Financial Services Minister Chris Bowen says that after a string of high-profile corporate collapses in which investors have been burned, such as Westpoint, Storm Financial and Opes Prime, the public has a right to be angry and that the Government has an obligation to act.

"Over the years thousands of Australians have had their life's savings wiped out through inappropriate financial advice," he said.

"Improved disclosure has been tried in the past, it doesn't work.

"We need to send a very clear message through our laws that Australians deserve first-class financial advice. Advice which isn't tainted by commissions or kickbacks, advice which is clearly in their best interests and nobody else's."

But the Opposition - true to its name - claims the reforms are heavy handed, arguing that commissions are appropriate if they are disclosed to clients.

The only thing they should be opposing is the delay in starting these proposed changes: 1 July 2012.

2012? Isn't that supposed to be the end of the world anyway? How convenient!

[More]

Going Sillitoe

The master storyteller of the kitchen sink drama and one of the "Angry Young Men" of the 1950s, Alan Sillitoe, died yesterday, aged 82. In his best-known stories, "Saturday Night And Sunday Morning" and "The Loneliness Of The Long Distance Runner" which chronicled the bleak postwar realities of England's poor, he made the ordinary life into a kind of poetry.

Both stories were made into movies. Perhaps this is a good time to watch them again.

Travels with a Tangerine

This is the story of one of the greatest journeys of all time. In 1325, shortly after the end of the Crusades, a young Moroccan Muslim called Ibn Battutah set out on a pilgrimage to Mecca. It was to become an odyssey from one end of the known world to the other. Little did he realise that this would kickstart a 30-year journey across the world, taking in shipwrecks, black death, slavery, coups, and pirates. In all, he travelled 75,000 miles - more than three times the distance Marco Polo covered. (And in case you were wondering, the Tangerine is Battutah himself. Battutah was born in Tangiers, and residents of Tangiers are known as Tangerines.) Along the way, he was to meet magicians, dervishes, holy men, fire-eaters and other travellers from across three continents. He was by turns scholar, businessman, mystic, warrior; he was imprisoned by mad sultans, was married ten times and had countless concubines. When he got home after 29 years on the road, he wrote it all down. Today, the world is a very different place, and the very British Tim Mackintosh-Smith, an Oxford University classicist who has called the Middle East his home for 25 years, explores the lives of 21st century Muslims around the world, and how their world intersects with the medieval legacy from Battutah’s time. Another perfect read for an armchair traveller like me which I have just bought from the The Book Depository who offer free delivery worldwide.

 

P.S. You can also read - or at least 'test-drive' - the book online at www.archive.org. Simply SIGN UP (it's free!), LOG IN, and BORROW.

 

Tea and ANZAC bikkies

This weekend war memorials across the nation will be the focus of ANZAC remembrance services. From tiny outback hamlets to the capital cities, the solemn strains of the Last Post will sound as wreaths are laid and heads bowed in contemplation of wartime loss. There are about 1,500 memorials to the First World War across the country - so many that Australia has been called a "nation of small town memorials".

Memorials vary greatly in scale and scope. The one that everyone always remembers of course is the little digger on the pedestal. Sometimes with arms reversed and head bowed, sometimes standing erect with his rifle by his side, but then they ranged through a whole variety often depending on the wealth of the district, to really quite elaborate and beautiful bronze statues. Sometimes very martial in their character, soldiers with bayonets fixed and charging, sometimes fairly poignant, rescuing a wounded mate and so on. So they run the whole gamut of those things, but as well as those there are very simple, common memorials in the form of the simple little obelisk; a broken column on a pedestal with the names around the base - very poignant, simple little memorial and that's the most common feature.

A lot of the little diggers that people have come to associate with the Australian soldier so strongly were actually made in Italy. They were almost mass-produced by Italian stone masons and even Italian stone masons in this country.

The conspicuous feature in all the little country towns will always remain those simple memorials that were erected after the First World War. It's a strange paradox, the further we go back in time the stronger the legend appears to become.

LEST WE FORGET.

Go west, young man!

The Australian Opposition Leader, Tony Abbott, has come up with a novel idea - novel if you think finding a job is a crazy concept. Tony looked around and noticed two things, the first being there are a lot of unemployed people getting our money for being unemployed.

You can make a living - not a real great one - by being unemployed, and it's a way of life for some families who honestly don't know about working. The idea gets passed on from one generation to the next until nobody can remember how to screw in a light bulb.

The other thing Abbott observed was the huge shortage of skilled workers in Western Australia. There is a shortage because the Chinese, among other things, realised the Copenhagen conference was a big joke before the Copenhagen conference even happened. So they want coal and iron ore and stuff like that, which for some reason of geography, they don't have but we've got in Western Australia. Except we don't have all the right people in place, literally, to get the job done.

So Tony is tossing around the idea of ... well, encouraging unemployed people to go west by cutting off welfare for under-30-year-olds who won't head where the jobs are. This way you've got two problems solved with one solution, which, because of its simplicity, is probably headed for trouble.

For starters, you can bet Abbott's idea will get the whole welfare lobby going because, down deep, it realises the fewer people who are on welfare, the less you need a lobby for them. So if Abbott's plan works out, then the welfare lobby will have to go west for a job too, and who knows what the cappuchino is like in the Pilbara right now?

(Source Weekend Australian Financial Review)

A poor country full of rich people

Greece is a poor country full of rich people: fewer than 5,000 Greeks declare a taxable income in excess of €100,000 and yet the parking lots outside the Athenian nightclubs are full of Ferraris and Lamborghinis. It is estimated that Greeks evade income tax to the tune of €15 BILLION a year! Others think it could be more than twice that figure.

And yet they're paying themselves pensions which are the highest in Europe: on average 95.7% of their last income! By contrast, German pensioners - who are now called upon to bail out Greece - receive 43%. A quarter of all Greeks work in the public service on comfortable salaries and they can not be terminated.

Here are two real-life examples: Thanssis Avramopoulos and his wife Despona live in their own comfortable apartment in a fashionable suburb of Athens, with two cars parked outside. He's a former telecom worker who at the age of 50 retired with a "golden handshake" of 12 months' salary and a lifelong pension equal to 100% of his last salary. His wife, aged 49, went on a pension seven years ago, at 60% of her last salary for the rest of her life.

Now the European Union and the IMF want to impose some austerity measures before they hand over €60 BILLION. How do the Greeks feel about it? They're protesting.

"Hundreds of dockworkers blocked passenger vessels at Greece's largest port, Piraeus, on Wednesday to protest the austerity measures."

Maybe there were German taxpaying tourists on the boats, who wanted to see for themselves where their money would be going. They may just get to see what they are looking for on a grand scale:

"About half a million Greek civil servants are planning another 24-hour strike on Thursday."

Wow, half a million civil servants! And those are just the ones protesting! (Greece has more than a million public servants.)

Something that has been lost on the press and their readers is the nature of a bailout. When a company, or a country, requires a bailout, they aren't getting the money for themselves. That money goes to the creditors. Otherwise they wouldn't need a bailout.

Where did the UK taxpayers' money go in the Royal Bank of Scotland bailout? It turned out that of the billions of dollars the UK taxpayer gave to Royal Bank of Scotland, USD$841 million of it went to Goldman Sachs to pay for the losses incurred by the bank from its investment in the collateralised debt obligation (CDO) structured by... the "fabulous" Fabrice Tourre.

Can you guess who AIG's single largest creditor was? Yep, Goldman Sachs. So AIG gets bailed too. And the Treasury Secretary just happened to be a former Goldman Sachs CEO...

When you bail out a company (or country), you pay their creditors. The attention should be on them.

Are you wondering who Greece's creditors are? We know Goldman is involved in Greek CDSs again, which they used to help hide Greece's debt levels.

The only good peasant is a dead peasant

Michael Moore's Capitalism, A Love Story has revealed a deep dark secret - so-called Dead Peasant Insurance, the practice of companies taking out secret life insurance policies on their low-level employees, with the benefits paid out to the company upon the employee's death, even if they no longer work at the company. Sounds pretty feudal, even ghoulish, doesn't it? With a very fitting feudal name!

The Wall Street Journal found that numerous corporations purchase such policies on millions of employees, typically without their knowledge. The business is thriving, with premiums growing from $1.5 billion in 2000 to $2.8 billion in 2001. Insurance executives maintain that such policies are "perfectly legal." Among the many hundreds of corporations that have bought such insurance, nicknamed "dead peasant" insurance, are AT&T, Dow Chemical, Nestle USA, Procter & Gamble, Walt Disney and Wal-Mart. In fact, so many companies have them that US Representative Gene Green, a Democrat from Houston, has been attempting to pass a law making it illegal to keep the policies secret.

And what a wonderful corporate tax dodge it is as premiums are tax-deductible and the resulting insurance payouts are tax-exempt! The corporations can even borrow against these policies and the interest paid is also tax-deductible!

These days "Only in America" usually means "Coming Soon to Australia", so if you have been wondering why your company is still keeping you on, now you know it:

You're worth more dead than alive!
Of course, I've always known this about some of my past co-workers!

Send cash, not ash

First it was the imploding Icelandic banks that sent European banks and investors broke. Now it's exploding Icelandic volcanoes that threaten to send major airlines broke.

Iceland's 320,000 people pack quite a punch when it comes to wreaking havoc. Must be the old Viking instinct in them!

A senior moment

A 98-year old woman in the UK wrote this to her bank:

Dear Sir, I am writing to thank you for bouncing my cheque with which I endeavoured to pay my plumber last month. By my calculations, three 'nanoseconds' must have elapsed between his presenting the cheque and the arrival in my account of the funds needed to honour it. I refer, of course, to the automatic monthly deposit of my Pension, an arrangement, which, I admit, has been in place for only thirty eight years. You are to be commended for seizing that brief window of opportunity, and also for debiting my account £30 by way of penalty for the inconvenience caused to your bank. My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. I noticed that whereas I personally attend to your telephone calls and letters, when I try to contact you, I am confronted by the impersonal, overcharging, pre-recorded, faceless entity which your bank has become. From now on, I, like you, choose only to deal with a flesh-and-blood person. My mortgage and loan payments will therefore and hereafter no longer be automatic, but will arrive at your bank by cheque, addressed personally and confidentially to an employee at your bank whom you must nominate. Be aware that it is an offence under the Postal Act for any other person to open such an envelope. Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative. Please note that all copies of his or her medical history must be countersigned by a Solicitor, and the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course, I will issue your employee with PIN number which he/she must quote in dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modelled it on the number of button presses required of me to access my account balance on your phone bank service. As they say, imitation is the sincerest form of flattery. Let me level the playing field even further. When you call me, press buttons as follows: 1. To make an appointment to see me. 2. To query a missing payment. 3. To transfer the call to my living room in case I am there. 4. To transfer the call to my bedroom in case I am sleeping. 5. To transfer the call to my toilet in case I am attending to nature. 6. To transfer the call to my mobile phone if I am not at home. 7. To leave a message on my computer (a password to access my computer is required. A password will be communicated to you at a later date to the Authorized Contact.) 8. To return to the main menu and to listen to options 1 through to 7. 9. To make a general complaint or inquiry, the contact will then be put on hold, pending the attention of my automated answering service. While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call. Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement. May I wish you a happy, if ever so slightly less prosperous, New Year. Your Humble Client

As a long-suffering customer of the Commonwealth Bank - WHICH bank? - I wished I had thought of writing them a letter along those lines!

The Drifters

I "discovered" James Michener's writing in 1975 while I was stationed in Burma. There were no bookshops in Rangoon but there were plenty in Singapore which I visited frequently in the course of my work. The first Michener-novel I found had been published just a few years earlier: The Drifters. I completely fell under its spell.

The novel follows six young characters from diverse backgrounds and various countries as their paths meet and they travel together through parts of Spain, Portugal, Morocco and Mozambique: Joe, a disenfranchised twenty-year-old youth who is enrolled at the University of California during the Vietnam War; Britta, an 18-year-old girl from Tromsø, Norway; Monica who lives with her father in the Republic of Vwarda; Cato, the son of the Reverend Claypool Jackson; Yigal, the son of a dean at a college in Haifa, Israel; and Gretchen, a very intelligent girl from Boston who, at the age of 19, has already completed her bachelors degree, and is working for Senator Eugene McCarthy's presidential campaign.

The story is told from the perspective of the narrator, George Fairbanks, who is an investment analyst for the fictional company World Mutual Bank in Switzerland. Mr. Fairbanks is connected with nearly every character in some way, and they all seem to open up to him throughout the novel in one way or another.

Some memorable quotes and quotes of quotes contained in the book:

Our country is wherever we are well off. -Cicero

For my part, I travel not to go anywhere, but to go. I travel for travel’s sake. The great affair is to move. -Stevenson

Don’t put off for tomorrow what you can do today, because if you enjoy it today you can do it again tomorrow.

A man who leaves home to mend himself and others is a philosopher; but he who goes from country to country guided by blind impulses of curiosity is only a vagabond. -Oliver Goldsmith

Men go abroad to admire the heights of mountains, the mighty billows of the sea, the long course of rivers, the vast compass of the ocean, and the circular motion of the stars, and yet they pass themselves by. -St. Augustine

Young men should travel, if but to amuse themselves.-Byron

The book in its more than 800 pages explores many themes: the Vietnam war, the generation gap, drug addiction, the black problem in America, the future of Israel. It is a remarkabe novel of the Western world's social issues in the late sixties.

Strangely, I didn't identify with any of the young people but with Harvey Holt, who is introduced only in the ninth chapter. He works as a technical representative on radars in remote locations. He is an old friend of Mr. Fairbanks, and has been everywhere from Afghanistan to Sumatra to Thailand. He is a fan of classical music and old movies and very old-fashioned. Enough said?

P.S. Here is an insightful review of the book.

TAREing my hair out

Rudyard Kipling's poem "I keep six honest serving-men" has long been my favourite. So much so that I had a calligrapher inscribe it on a piece of vellum which I framed and hung above my office desk wherever I worked.

So when I became financial controller for a big commodity trader in Saudi Arabia who regularly bought grain in bulk, shipped it to Singapore for bagging, and then sold it in 50kg-bags, it didn't take me long to ask why 20,000 metric tonnes of grain, bought in bulk, should still be only 20,000 metric tonnes after it had been stuffed into 400,000 bags.

How could that be? What about each bag's tare weight of 500 grams? Where had the 200 metric tonnes of grain gone that had been displaced by the weight of the bags? And who had taken them?

Asking my Arab boss was of little help as he had never heard of tare weight. It took me a whole day - and a lot of TAREing-out of hair while sipping dozens of thimble-sized cups of cardamom-flavoured coffee - to convince him that there was something missing. A whole 200 metric tonnes of grain, in fact, from each shipment!

As it turned out, the Chinese bagging contractor in Singapore had not only been handsomely paid by us for the cost of the bags and the labour and the equipment hire but he had also profiteered from the 200 metric tonnes of grain displaced by the weight of the bags which he quietly sold off on his own account - several times a year and at a time when the grain sold for as much as US$800 a metric tonne!

And there was nothing we could do about it as my Arab boss had allowed him to write his own bagging contract which stated - ever so innocently - that each bulk shipment would be reshipped "gross for nett".

Arabs (and many other people, I am sure) don't like to be outsmarted and they like even less to be found out to have been outsmarted. So, yes, we did engage a new bagging contractor and, yes, this time we did write our own contract terms, but, no, my boss never thanked me for having put a stop to this outrageous rip-off. (I never received a Christmas card from the previous bagging contractor either!)

I reflected on this and many other work experiences as I idly paged through my collection of employers' references. Once so highly treasured, they are now, in my retirement, just so many pieces of paper. The mere tare weight of an engrossing career in commerce.

See related story Look what I found on the Internet.

This is super!

Way back in 1992 it was decided that every working Australian should be forced to contribute to retirement funds for their own good. Compulsory superannuation was born and has matured into a giant savings system worth $1.2 TRILLION, a sum its architects love to champion as a triumph of public policy ingenuity.

However, the government would surely have to think twice before creating another compulsory system that allowed commercial interests to profit without restriction from the vast pool of savings that would be up for graps. Compulsory super created a whole new professional middle class of investment funds managers and so-called financial planners (who in the main are commissioned salesmen), while at the same time providing a whole new income stream for those in the accounting and legal professions.

Seemingly overnight, thousands of salesmen, who had previously sold everything from encyclopaedias to second-hand cars, became financial planners in the headlong rush to service this exploding market. In some cases it seemed that their only qualification consisted of having passed the mirror test - meaning, they had a mirror stuck under their noses to see if it would fog up. If it did, they were hired; if it didn't, it meant they were dead, which was the only reason why they weren't hired.

So how many financial planners/advisers are out there? Not the ASIC nor the FAA nor the FPA know (how is that for a regulated and supervised industry?) but some suggest 30,000, others mention 18,000 but here's the clincher: only 14 - YES, FOURTEEN! - are truly independent and offer truly independent advice! - see Trish Power's excellent article. Being such a rare breed, their names are worth mentioning here:

Phillip Thompson, ACT
Daniel Brammall, ACT
Fergus Hardingham, NSW
Chris Browne, NSW
Kevin Smith, NSW
Bill Raffle, NSW
Carolyn Baker, QLD
Richard Starr, QLD
Tony Grlj, QLD
Neil Salkow, QLD
Matthew Ross, VIC
Yoni Stein, VIC
Adrian McMaster, VIC
Travis Morien, WA

The rest are all pushing somebody else's barrow and sell you what earns them the highest commissions (and trailing commissions which are paid to them from hereon ever after, AMEN) rather than what is the best investment for you!

Fund managers' fees are typically percentages that are inevitably geared to total funds under management or advice, not returns to the investor. When annual fees are levied at even an average 1 per cent across financial services, the income stream approaches a staggering $30 BILLION. Today, most funds are charging 2 per cent (and often more!) which, if you factor in only a 5 per cent return after tax (reflecting recent lower performance), gobbles up a staggering 40 per cent of an investor's returns.

This whole new class of rentiers now sit back and live off the dividends of a growing asset they are not themselves growing as they all get a free kick from the market (and charge their investors extra "performance fees") when it goes up and claim it isn't their fault when it goes down. Why should clients pay for this, especially as they are the only ones who bear all the risks?

In another time, tontines used to be a popular form of super. They would pool cash from investors and, as some of them died, all the other members of the pool would get a larger share of the annual income. They became illegal when members began to search out other investors and kill them to increase their own income.

Has anything really changed?



P.S. Here is my advice - which is free, abundant and probably totally useless - to you: cut out the middlemen, cut out the commissions, start your own Self-Managed Superannuation Fund (SMSF). It's not rocket science! Here is a self-education tool to get you started.

Doing God's Work

The Securities and Exchange Commission on Friday charged Goldman Sachs Group Inc. and one of its vice presidents with defrauding investors by misstating and omitting key facts about a financial product related to subprime mortgages.

Fabrice Tourre, a Goldman vice president whom the SEC said was mainly responsible for creating the questionable mortgage product, known as ABACUS, was charged with fraud.

The case also involves John Paulson, a hedge fund investor whose firm Paulson & Co made billions of dollars by betting the nation's housing market would crash. This included an estimated $1 billion from the transaction detailed in the lawsuit, which the SEC said cost other investors more than $1 billion. Paulson was not charged.

The lawsuit puts Goldman Chief Executive Lloyd Blankfein further on the defensive. If you shine a light on a cluster of cockroaches, they scatter and hide. But when you shine a light on a cluster of investment banking conmen, they simply stare back and reply, "The SEC's charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation."

But this is largely a cosmetic fight between two warring factions of the same financial oligarchy. You've got Goldman Sachs, the poster child for Wall Street's innovations and machinations. And you've got the politicians Goldman has done its best to get on its side with campaign money. Both sides have to placate the public, which now knows it's been getting screwed six ways to Sunday.

Having previously declared that he was doing God's Work, Lloyd Blankfein may hope for divine intervention. In his first public statement, Lloyd Almighty issued the following:

"Blessed Are Those Who Ask For Nothing For They Shall Receive It In Abundance.

Blessed Are Those Who Are Merciful For They Are Unsuitable For Employment At Goldman Sachs.

Blessed Are The Goldman Sachs Market Makers, For They Generate Commissions Whether Clients Win Or Lose.

Blessed Are The Foreclosed Of Homes For They Provide Goldman Sachs Some Really Good Deals.

[and]

Blessed Are The Meek Who Inherit The Earth, For the Mineral Rights Are Not Included, And Goldman Sachs Will See Them In The High Court To Challenge Any Inheritance."

How does Goldman Sachs make its profits? Part 1 and Part 2.

The firm was founded in 1869 by Marcus Goldman, a Jewish immigrant from Bavaria (PHEW!!! for a moment I thought he had been German!)                                                [More]

Populate and perish

On Saturday, 3 April 2010, our Prime Minister appointed a Minister for Population. A couple of days too late, Mr Rudd, and perhaps John Cleese would have been a better choice than this Burke from the bush, Tony Burke.

So after Peter Costello's "One for Mum, one for Dad and one for the country", we're now heading for Kevin Rudd's "Big Australia" of standing room only for 36 million by 2050.

Groundhog Day

There is no replay button to life. Never is there a chance to hit rewind, to see how we might have decided differently. Is that good or bad?

It brings to mind the 1993 movie Groundhog Day in which Bill Murray plays a man who wakes up each morning to find it's February 2 (again) and he has the day to live over. Murray is able to conduct a succession of "decision experiments": romancing women, driving drunk, even committing suicide with impunity. After many disastrous attempts, he finally gets his life in order.

The difference between us and Bill Muray is that we aren't allowed to do things over and over again until we get them right - which means, we mostly get them wrong!

The world is full of Tom Sawyers

Remember when Mark Twain's trickster-hero Tom Sawyer is given the irksome chore of whitewashing his auntie's fence? Tom would much prefer to let someone else do it. To achieve that, he pretends to enjoy the job so much that his friends want some of the fun. They beg Tom to let them help, to paint a few strokes at least. Tom refuses, then finally gives in - on the condition that his friends pay him for the privilege of painting the fence.

Tom Sawyer's innocent con game has become the big business model of the twenty-first century. It's called GOOGLE, YouTube, Facebook, Twitter, and ebay. The genius of ebay is that, although it is a retail business, it carries no inventory and incurs no handling costs.

They have all become multimillion-dollar businesses with what is respectfully called user-generated content. All are founded on the premise that users will do all the "work" for free. Someone is making a lot of money - someone, but not the people whitewashing the Internet's fences!

Never thought of it that way? Now you do!

Black is white with a bright ring around it

Click on image for a quick double-check
The Orwellian tone of the heading is justified. You can get people to believe almost anything about their own perception with a little sleight of hand.

The grey colour of square A is identical to the colour of square B.

The illusion is so compelling that it makes a great bar bet. To collect, make sure you have some Post-it Notes. Carefully block off the surrounding checkerboard squares with Post-it Notes, leaving just the squares containing A and B visible. (You'll need about six small notes.) Not until you place the last note does it seem even conceivable that the two colours could be the same. Then suddenly, they "snap" to the same medium grey.

(You can also prove it by copying the image into an art program and sampling the colour of A and then of B, which will show that they are in fact the same colour.)

How does the illusion work? The cylinder casts a shadow, darkening "white" square B (which is really grey). In terms of ink dots on paper, B is the same grey value as "black" square A. But the eye and brain have more important things to do than gauging absolute greyscale values. They are trying to make sense of the world, or in this case, a picture. That means attending to contrasts. We see a checkerboard on which all the "white" squares are the same colour, and a uniform shadow with blurred edges. The contrast between light and shadow doesn't interfere with the contrast of the checkerboard squares, or vice versa.

After this, how can you ever be sure of anything again? The catchword is psychophysics. Read up about it and be amazed!

(Of course, women have always known about psychophysics: if they wanted to look slim, they made friends with fat people. [As for me, I have lots of dumb friends.])

My preferred version of "Desiderata"

You are a fluke of the universe.
You have no right to be here.
Deteriorata. Deteriorata.

Go placidly amid the noise and waste,
And remember what comfort there may be in owning a piece thereof.
Avoid quiet and passive persons, unless you are in need of sleep.
Rotate your tires.
Speak glowingly of those greater than yourself,
And heed well their advice, even though they be turkeys.
Know what to kiss, and when.
Consider that two wrongs never make a right, but that three do.
Wherever possible, put people on hold.
Be comforted that in the face of all aridity and disillusionment,
and despite the changing fortunes of time,
There is always a big future in computer maintenance.

Remember The Pueblo.
Strive at all times to bend, fold, spindle, and mutilate.
Know yourself. If you need help, call the FBI.
Exercise caution in your daily affairs,
Especially with those persons closest to you -
That lemon on your left, for instance.
Be assured that a walk through the ocean of most souls
Would scarcely get your feet wet.
Fall not in love therefore. It will stick to your face.
Gracefully surrender the things of youth: birds, clean air, tuna, Taiwan.
And let not the sands of time get in your lunch.
Hire people with hooks.
For a good time, call 606-4311. Ask for Ken.
Take heart in the bedeepening gloom
That your dog is finally getting enough cheese.
And reflect that whatever fortune may be your lot,
It could only be worse in Milwaukee.

You are a fluke of the universe.
You have no right to be here.
And whether you can hear it or not,
The universe is laughing behind your back.

Therefore, make peace with your god,
Whatever you perceive him to be - hairy thunderer, or cosmic muffin.
With all its hopes, dreams, promises, and urban renewal,
The world continues to deteriorate.
Give up!
                    National Lampoon

Dutyfree

I'm back from the Bay after a long day on radio duty. Plenty of boats logged on but none got into trouble.

Signing off for the weekend.

Over and out.

The Mozart Effect

 

 

Remember this clarinet concerto? Of course, you do! You remember it from the scene in Out of Africa when Denys Finch-Hatton takes Karen Blixen on safari and picnicks with her high up on the Masai Mara plain with a gramophone beside them playing Mozart. [after placing a gramophone in a field near wild baboons who sat around listening, Denys said, 'Think of it: never a man-made sound... and then Mozart!']

If Mozart's Clarinet concerto in A major, K. 622, needed any popularising, this movie did it. It is one of the most magical pieces of music ever composed. A shiver runs down my spine every time I hear it. Don Campbell calls it the “Mozart Effect” in his book of the same name: the ability of music to heal the body, strengthen the mind and unlock the creative spirit.

[voiceover in movie]   "I had a farm in Africa at the foot of the Ngong Hills. The Equator runs across these highlands, a hundred miles to the north, and the farm lay at an altitude of over six thousand feet. In the day-time you felt that you had got high up; near to the sun, but the early mornings and evenings were limpid and restful, and the nights were cold."

All right, let's hear it one more time, adagio, together with some unforgettable scenes from the movie:

 

 

[excerpt from book]   "To Denys Finch-Hatton I owe what was, I think, the greatest, the most transporting pleasure of my life on the farm: I flew with him over Africa. There, where there are few or no roads and where you can land on the plains, flying becomes a thing of real and vital importance in your life, it opens up a world. Denys had brought out his Moth machine; it could land on my plain on the farm only a few minutes from the house, and we were up nearly every day.

You have trememdous views as you get up above the African highlands, surprising combinations and changes of light and colouring, the rainbow on the green sunlit land, the gigantic upright clouds and big wild black storms, all swing around you in a race and a dance. The lashing hard showers of rain whiten the air askance. The language is short of words for the experiences of flying, and will have to invent new words with time. When you have flown over the Rift Valley and the volcanoes of Suswa and Longonot, you have travelled far and have been to the lands on the other side of the moon. You may at other times fly low enough to see the animals on the plains and to feel towards them as God did when he had just created them, and before he commissioned Adam to give them names.

But it is not the visions but the activity which makes you happy, and the joy and glory of the flyer is the flight itself. It is a sad hardship and slavery to people who live in towns, that in all their movements they know of one dimension only; they walk along the line as if they were led on a string. The transition from the line to the plane into the two dimensions, when you wander across a field or through a wood, is a splendid liberation to the slaves, like the French Revolution. But in the air you are taken into the full freedom of the three dimensions; after long ages of exile and dreams the homesick heart throws itself into the arms of space.

Every time that I have gone up in an aeroplane and looking down have realized that I was free of the ground, I have had the consciousness of a great new discovery. "I see,' I have thought. 'This was the idea. And now I understand everything.'"

More about Karen Blixen

A Love Story

I have asked my good friends at amazon.com to send me the DVD Capitalism: A Love Story, another Michael Moore documentary.

The film centres on the financial crisis of 2007–2010 and the recovery stimulus, while putting forward an indictment of the current economic order in the United States and capitalism in general. Topics covered include Wall Street's "casino mentality", for-profit prisons, Goldman Sachs' influence in Washington, DC, the poverty-level wages of many airline pilots, the large wave of home foreclosures, and the consequences of "runaway greed". The film also features a religious component where Moore examines whether or not capitalism is a sin and if Jesus would be a capitalist.

A highlight of the documentary is when Moore interviews Elizabeth Warren, the head of the US Congressional Oversight Committee, the government agency serving as a watchdog for Congress' wrong-doing and investigating Congressional "oversights" (mistakes). He asks her, "Where is the $700 billion bailout money which Congress gave to the big banks and Wall Street investment companies?" There is a dramatic pause and the committee head replies, "I don't know." Advised by Warren to contact Paulson's office for answer, Moore's call is promptly disconnected upon recognition of his identity.

Part 2

TheMoneyMasters.com

The Idle Thoughts of an Idle Fellow

"Now, this is a subject on which I flatter myself I really am au fait. The gentleman who, when I was young, bathed me at wisdom's font for nine guineas a term—no extras—used to say he never knew a boy who could do less work in more time; and I remember my poor grandmother once incidentally observing, in the course of an instruction upon the use of the Prayer-book, that it was highly improbable that I should ever do much that I ought not to do, but that she felt convinced beyond a doubt that I should leave undone pretty well everything that I ought to do.

I am afraid I have somewhat belied half the dear old lady's prophecy. Heaven help me! I have done a good many things that I ought not to have done, in spite of my laziness. But I have fully confirmed the accuracy of her judgment so far as neglecting much that I ought not to have neglected is concerned. Idling always has been my strong point. I take no credit to myself in the matter—it is a gift. Few possess it. There are plenty of lazy people and plenty of slow-coaches, but a genuine idler is a rarity. He is not a man who slouches about with his hands in his pockets. On the contrary, his most startling characteristic is that he is always intensely busy.

It is impossible to enjoy idling thoroughly unless one has plenty of work to do. There is no fun in doing nothing when you have nothing to do. Wasting time is merely an occupation then, and a most exhausting one. Idleness, like kisses, to be sweet must be stolen. " [listen]

These words were not written by me but I am convinced they were written for me - by none other than Jerome K. Jerome (of "Three Men in a Boat" fame) in his delightful book The Idle Thoughts of an Idle Fellow.

And if being idle is not your thing, there are also chapters ON BEING IN LOVE, ON BEING IN THE BLUES, ON BEING HARD UP (the story of my life), ON VANITY AND VANITIES, ON GETTING ON IN THE WORLD, ON THE WEATHER, ON CATS AND DOGS, ON BEING SHY (that's me!), ON BABIES, ON EATING AND DRINKING, ON FURNISHED APARTMENTS, ON DRESS AND DEPORTMENT, and even ON MEMORY.

And then there are always The Second Thoughts of an Idle Fellow.

We could all do with a Zorba in our lives

Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Part 8
Part 9 Part 10 Part 11 Part 12 Part 13 Part 14

If these links no longer work, view the film's opening scene here.
(Click here for another full-length version)

When I watch Zorba the Greek, I am immediately transported back to the almost two years I lived and worked in Piraeus.

The movie faithfully follows the storyline of Nikos Kazantzakis's book. My favourite is the opening scene of a rained-out day spent in a harbourside taverna in Piraeus which reminds me of the many similar days full of melancholy I spent in almost identical tavernas.

The narrator, a young Greek intellectual by the name of Basil, resolves to set aside his books for a few months to travel to Crete in order to re-open a disused lignite mine and immerse himself in the world of peasants and working-class people.

Taking shelter in a harbourside taverna, he is about to dip into his copy of Dante's Divine Comedy when he feels he is being watched; he turns around and sees a man of around sixty peering at him through the glass door. The man enters and immediately approaches him to ask for work. He claims expertise as a chef, a miner, and player of the santuri, or cimbalom, and introduces himself as Alexis Zorba.

The narrator is fascinated by Zorba's lascivious opinions and expressive manner and decides to employ him as a foreman. On their way to Crete, they have a great many lengthy conversations, about a variety of things, from life to religion, each other's past and how they came to be where they are now, and the narrator learns a great deal about humanity from Zorba that he otherwise would not have gleaned from his life of books and paper.

Unlike Basil, I never had the good fortune to make the acquaintance of a Zorba. Couldn't we all benefit from such an acquaintance and such memorable quotes? Zorba is Everyman with a Greek accent!

"Life is trouble; only death is not."

"This is true happiness: to have no ambition and to work like a horse as if you had every ambition. To live far from men, not to need them and yet to love them. To have the stars above, the land to your left and the sea to your right and to realize of a sudden that in your heart, life has accomplished its final miracle: it has become a fairy tale."

"Let your youth have free reign, it won't come again, so be bold and no repenting."

"Every perfect traveller always creates the country where he travels."

"Since we cannot change reality, let us change the eyes that see reality."

"How simple a thing is happiness: a glass of wine, a roast chestnut, a wretched little brazier, the sound of the sea. All that is required to feel that here and now is happiness is a simple heart."

"A man needs a little madness, or else he never dares to cut the rope and be free..."

"When you've made up your mind, no use lagging behind, go ahead and no relenting."

Basil: "Are you married?"
Zorba: "Am I not a man? And is not a man stupid? I’m a man. So I married. Wife, children, house, everything. The full catastrophe."

P.S. Of course, everybody knows that Zorba's dance originated in Australia some 40,000 years ago:

(By the way, a South American scientist from Argentina, after a lengthy study, has discovered that people with insufficient brain and sexual activity read with their hand on the mouse.
DON'T BOTHER TAKING IT OFF NOW. IT'S TOO LATE!!!)

Easter egg on the face

It's over! Easter, I mean. We even had a proper pre-Christian Easter bonfire.

Not that everyone was happy: the Greek Orthodox church celebrates Easter several weeks after 'our' Easter. This allows the Greeks to buy their Easter eggs at half price. However, this year the two Easter coincided. My Greek friend Nick wasn't happy.

But I was happy to wipe the Easter egg off my face and again sit by the quiet river while watching - and occasionally trading - the sharemarket.

BHP reached a new 12-month high today of $44.63 and the All Ords are at 4974. A far cry from their all-time high in November 2007 of 6853 but also comfortably above their nadir in March 2009 of 3121.

Of course, we all know that April is a peculiarly dangerous month to speculate in stocks in. The others are July, January, September, October, November, May, March, June, December, August and February.

However, I am forewarned with my broker's advice which reads, "The market's rise after a period of reaccumulation is a bullish sign. Nevertheless, fulcrum characteristics are not yet clearly present and a resistance area exists 40 points higher in the Dow, so it is clearly premature to say the next leg of the bull market is up. If, in the coming weeks, a test of the lows holds and the market breaks out of its flag, a further rise would be indicated. Should the lows be violated, a continuation of the internediate term downtrend is called for. In view of the current situation, it is a distinct possibility that traders will sit in the wings awaiting a clearer delineation of the trend and the market will move in a narrow trading range."

What? You don't know what this means? What are you, an Australopithecus or something? Allow me to translate it for you: "If the market does not go up or go down, it will remain unchanged."

Padma phoned from Jember and emailed me this photo of herself with her little niece:


She travelled the 150km from Surabaya to visit her sister-in-law's family. Nice part of Java with lots of tea- and tobacco-plantations.