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Sunday, February 28, 2010

The Painted Veil

Somerset W. Maugham's story "The Painted Veil" confirms his belief that there is a true harmony in the contradictions of mankind and that the normal is in reality the abnormal. "The ordinary is the writer's richest field," he stated in THE SUMMING UP (1938), which also has become something of a guidebook for creative writing.

Maugham tells his stories in clear, economical style with cynical or resigned undertone. As he put it, "I have never pretended to be anything but a story teller. It has amused me to tell stories and I have told a great many. It is a misfortune for me that the telling of a story just for the sake of the story is not an activity that is in favor with the intelligentsia. I endeavour to bear my misfortunes with fortitude."

He takes the title to his story "The Painted Veil" from Percy Shelley's Sonnet

" Lift not the painted veil . . ."

Lift not the painted veil which those who live
Call Life: though unreal shapes be pictured there,
And it but mimic all we would believe
With colours idly spread, --- behind, lurk Fear
And Hope, twin Destinies; who ever weave
Their shadows, o'er the chasm, sightless and drear.
I knew one who had lifted it --- he sought,
For his lost heart was tender, things to love,
But found them not, alas ! nor was there aught
The world contains, the which he could approve.
Through the unheeding many he did move,
A splendour among shadows, a bright blot
Upon this gloomy scene, a Spirit that strove
For truth, and like the Preacher found it not.

and the story's 'punchline' "The dog it was that died" from Oliver Goldsmith's

An Elegy on the Death of a Mad Dog

Good people all, of every sort,
Give ear unto my song;
And if you find it wondrous short,
It cannot hold you long.

In Islington there was a man,
Of whom the world might say
That still a godly race he ran,
Whene'er he went to pray.

A kind and gentle heart he had,
To comfort friends and foes;
The naked every day he clad,
When he put on his clothes.

And in that town a dog was found,
As many dogs there be,
Both mongrel, puppy, whelp and hound,
And curs of low degree.

This dog and man at first were friends;
But when a pique began,
The dog, to gain some private ends,
Went mad and bit the man.

Around from all the neighbouring streets
The wondering neighbours ran,
And swore the dog had lost his wits,
To bite so good a man.

The wound it seemed both sore and sad
To every Christian eye;
And while they swore the dog was mad,
They swore the man would die.

But soon a wonder came to light,
That showed the rogues they lied:
The man recovered of the bite,
The dog it was that died.

Unfortunately, this line is not used in the superbly-made film of the same name which was shot on location in Guangxi province in China in an absolutely stunning landscape.

Maugham's travels and mine crossed many times even though he passed away the year I first set out to see the world. I once even stayed in the Somerset Maugham Suite in Singapore's Raffles Hotel!

Many of his stories are set in the islands of the South Pacific and in exotic locations in South East Asia, and they have been my travel companions during all those years. Here are some of them:

THE TREMBLING OF A LEAF - Little Stories of the South Sea Islands
German Harry
French Joe
The Lotus Eater

Lord Jim


He was an inch, perhaps two, under six feet, powerfully built, and he advanced straight at you with a slight stoop of the shoulders, head forward, and a fixed from-under stare which made you think of a charging bull. His voice was deep, loud, and his manner displayed a kind of dogged self-assertion which had nothing aggressive in it. It seemed a necessity, and it was directed apparently as much at himself as at anybody else. He was spotlessly neat, apparelled in immaculate white from shoes to hat, and in the various Eastern ports where he got his living as ship-chandler's water-clerk he was very popular.

A water-clerk need not pass an examination in anything under the sun, but he must have Ability in the abstract and demonstrate it practically. His work consists in racing under sail, steam, or oars against other water-clerks for any ship about to anchor, greeting her captain cheerily, forcing upon him a card—the business card of the ship-chandler—and on his first visit on shore piloting him firmly but without ostentation to a vast, cavern-like shop which is full of things that are eaten and drunk on board ship; where you can get everything to make her seaworthy and beautiful, from a set of chain-hooks for her cable to a book of gold-leaf for the carvings of her stern; and where her commander is received like a brother by a ship-chandler he has never seen before. There is a cool parlour, easy-chairs, bottles, cigars, writing implements, a copy of harbour regulations, and a warmth of welcome that melts the salt of a three months' passage out of a seaman's heart. The connection thus begun is kept up, as long as the ship remains in harbour, by the daily visits of the water-clerk. To the captain he is faithful like a friend and attentive like a son, with the patience of Job, the unselfish devotion of a woman, and the jollity of a boon companion. Later on the bill is sent in. It is a beautiful and humane occupation. Therefore good water-clerks are scarce. When a water-clerk who possesses Ability in the abstract has also the advantage of having been brought up to the sea, he is worth to his employer a lot of money and some humouring. Jim had always good wages and as much humouring as would have bought the fidelity of a fiend. Nevertheless, with black ingratitude he would throw up the job suddenly and depart. To his employers the reasons he gave were obviously inadequate. They said 'Confounded fool!' as soon as his back was turned. This was their criticism on his exquisite sensibility.

To the white men in the waterside business and to the captains of ships he was just Jim—nothing more. He had, of course, another name, but he was anxious that it should not be pronounced. His incognito, which had as many holes as a sieve, was not meant to hide a personality but a fact. When the fact broke through the incognito he would leave suddenly the seaport where he happened to be at the time and go to another—generally farther east. He kept to seaports because he was a seaman in exile from the sea, and had Ability in the abstract, which is good for no other work but that of a water-clerk. He retreated in good order towards the rising sun, and the fact followed him casually but inevitably. Thus in the course of years he was known successively in Bombay, in Calcutta, in Rangoon, in Penang, in Batavia—and in each of these halting-places was just Jim the water-clerk. Afterwards, when his keen perception of the Intolerable drove him away for good from seaports and white men, even into the virgin forest, the Malays of the jungle village, where he had elected to conceal his deplorable faculty, added a word to the monosyllable of his incognito. They called him Tuan Jim: as one might say — Lord Jim.

So begins one of my favourite stories by one of my favourite authors, Joseph Conrad. The narrator of the story, Marlow, a world-weary sea captain, identifies deeply with Jim's fallibilities, and constantly ponders the meaning of Jim's story as Jim continues to wander from job to job, "fling[ing] away [his] daily bread so as to get [his] hands free to grapple with a ghost".

I can relate to that!



P.S. Here is the full text of "Lord Jim". And here's the audio book. And here is Joseph Conrad's even more famous book, "Heart of Darkness".

Saturday, February 27, 2010

Dedicated to my Kamloopsian friend

Clipped participles

I've just returned from radio duty with "The Grumpy Old Men and the Sea", officially known as Marine Rescue.

It was a slow drive home as I was stuck behind one of those low-loaders pulling half a house up the mountain. It gave me lots of time to ponder about the "D"-less sign in front of me.

"Shouldn't it be 'OVERSIZED LOAD'?" I kept asking myself. "Is this a compromised spelling or a compromise spelling?"

Of course, it should be "oversized" but, like the captain of the H.M.S. Pinafore, these truckers never use the big, big "D."

I arrived at Nelligen, grammatically completely "D"-stabilised.

Friday, February 26, 2010

I travel because I like to move from place to place

With a glass of Chateau Cardboard beside me, I am perusing the webpages of Greyhound Australia for some inspirational travel ideas.

And I think I have found it: a 45-day travel pass on any Greyhound coach from Sydney to Cairns, stopping over in as many places for as long as I like (within the overall 45-day time limit).

It's the journey, not the destination that matters to me, or as Somerset W. Maugham put it so well:

I travel because I like to move from place to place. I enjoy the sense of freedom it gives me, it pleases me to be rid of ties, responsibilities, duties, I like the unknown; I meet odd people who amuse me for a moment ... ; I am often tired of myself and I have a notion that by travel I can add to my personality and so change myself a little. I do not bring back from a journey quite the same self that I took.

And these are the odd people who may be able to amuse me on the way:

Manfred and Urs in Brisbane, do you read this?

Put a beer in the fridge for me, Andrew in Mackay!

We met on Thursday Island, Dave; let's get together again when I come to Babinda!

Jim and Brian in Cairns, you can fight over who will drive me out to the airport!

Thursday, February 25, 2010

Long Service Leave is what you get paid for being bored for ten years

Ulladulla Harbour

We drove to Ulladulla where we had lunch at the local bowling club. Their meatloaf is a treat - and a bargain at five dollars - and I washed it down with a glass (or two) of riesling.

The same friendly young man who always collects the empties was on duty. Tongue firmly in cheek, I suggested that he must be due for long service leave soon. "Actually, I am due for my 10-year long service leave this April," he replied.

I looked at him again and tried to visualise what his life had been like, collecting empty glasses for the past ten years, and what his future would be. Perhaps, when the old steward behind the bar had retired, our young man would take over as barman, and in due course retire himself and hand over to another young man who has been collecting empty glasses for the past ten years.

Do such men have dreams? Do they live lives of quiet desperation? Or are they happy with their lot? Perhaps they have found the solution to the mystery of existence which is to say that there is no great mystery at all because human existence is mostly about food, sleep, sex, and finding harmless and pleasant ways to fill in the rest.

I shall be back in April to "celebrate" the young man's tenth anniversary and perhaps find the answers to my questions!

Sunday, February 21, 2010

Will we ever know the truth?

Anything you scan do, I scan do better!

Well, I can now after having bought the OTEK FS-501 Film and Slide Digital Scanner. No more fiddling with tricky computer software as it allows for stand-alone operation without computer.

It has 5 MegaPixels resolution for 35mm film strips and mounted slides, a 2.4" LCD colour display, and an in-built 32MB memory for image storage as well as a memory card slot.

And operating it is as easy as 1-2-3:

1. Gather all your slides and 35mm negatives

2. Switch on the scanner

3.Insert memory card and press button to save the digital images

And there you are, ready to relive your past of forty, fifty years ago!

Saturday, February 20, 2010

Home is the sailor, home from the sea

Another day at Marine Rescue - aka Grumpy Old Men and the Sea!
It was perfect boating weather and plenty of boats were out.

And we had a Code 1: Man overboard!

In fact, FOUR! Two octogenarians and their middle-aged son and daughter-in-law in a tiny 3-metre flat-bottomed dinghy with just enough freeboard to display the boat's registration.

They had underestimated the swell which swamped their boat, then overturned it, trapping the old lady beneath the hull! High drama which ended when we could bring them all safely ashore.

Then a 10-metre sloop, which we had been tracking since leaving the Shoalhaven, entered the Bay and proceeded to cut at right angle across the bar at low tide. We radioed her to "do a 180" before she could get stuck on the bar. She is now anchored in the lee of Snapper Island to await the next high tide around midnight before following the leads into the Bay.

Thursday, February 18, 2010

This is hard to digest

February 1974 ? I left this one behind on Bougainville Island

Reader's Digest Association Inc, whose namesake magazine has been a staple of dentists' waiting-rooms for generations, has filed for bankruptcy.

If indeed this most widely-read magazine goes out of circulation, it will be mourned like an old friend albeit a much-maligned and much-neglected one as I haven't read a Reader's Digest for twenty years.

However, I used to read its German edition "Das Beste" in my youth and later subscribed to its English edition as my only 'literary' lifeline while living in remote parts of the world where the only other reading matter was the label on beer bottles.

The much-anticipated monthly arrival of the magazine and its bi-monthly companion, the condensed book, became a measure of time itself: usually, with half-a-dozen "Reader's Digest" and a couple of condensed books piling up on my bedside table, I somehow knew it was time to move on again!

Sunday, February 14, 2010

Cyclone Rene

It looks like Cyclone Rene is heading straight for Tonga! It may strike the islands in Ha'apai around midnight tonight!

My friend Horst on his tiny island Uiha had better hold on to his hat!

Monday 15/2/10 update: Cyclone Rene has scored a direct hit in Ha'apai. The centre of the storm went over the island of NOMUKA, pretty close to Lifuka. A website says it is the worst cyclone in 50 years. Storm damage in Vava'u so far seems to be small, mainly mangoes and breadfruit knocked off the trees.


Time out for a commercial!

Go and read the "What's new at Nelligen?" blog!

The week that was!

A 12-year-old girl has dropped divorce proceedings against an 80-year-old man her father forced her to marry in exchange for a dowry. Media in Saudi Arabia report the girl's father arranged the marriage last September for a dowry worth $25,000. The girl has now withdrawn proceedings and told the court she agrees to the marriage out of respect to her father.

The internet will potentially lose one of its main sources of bestiality videos under a ban approved by the upper house of the Dutch Parliament. The new law bans human sex with animals which had been legal in the Netherlands, as long as it could be proven the animals were not injured.

An Arab ambassador in Dubai annulled his wedding after discovering that his bride, who wore the niqab, had a beard and squinted. The marriage had been arranged through pictures given by the bride’s family that were later proven to be those of the sister of the bride-to-be. During the brief meetings with his fiancĂ© the ambassador was unable to see her face as she was fully veiled. Once the marriage contract had been signed, he tried to kiss his wife and discovered “she had a beard and squinted.”

Kyrgyzstan is preparing to roll out a new system under which the millions of sheep residing in the mountainous state will receive their own high-tech passport, state television reported. First Deputy Prime Minister Akylbek Japarov says the government has drafted a bill to deliver cutting-edge passports to the nation's sheep. "We are ready to make a passport for each sheep," he said in an address to Parliament.

Jim Bradlley, Ontario’s transportation minister, said he was proud of having helped to introduce the 'distracted driving laws'. He said he wanted to make these law much more encompassing in the near future. He was quoted as saying; “Sure talking on a cell phone while driving is dangerous but there are many other activities occuring during driving that are just as dangerous if not more-so.” “For example the other day I was almost side-swiped by a man that was completely distracted while picking his nose, and I don’t mean just a nose scratch - he was in up to his knuckle”.

The Shady Lady Ranch in Nevada successfully won state and county approval to clear the way for the "prostidude," the state's first male prostitute.

Taxi drivers in Southampton who put up stickers in their cabs saying they speak English have been accused of racism and warned they face suspension.

Akbar Zeb must be one of Pakistan's most valuable diplomatic aces because they keep floating his name as potential ambassador to United Arab Emirates, and Bahrain, and now Saudi Arabia. All three countries have rejected him, though, because in their Arabic dictionaries, "akbar zeb" means "biggest dick."

Ogling over women's breasts is good for a man's health and can add years to his life, medical experts have discovered. According to the New England Journal of Medicine, "Just 10 minutes of staring at the charms of a well-endowed female is roughly equivalent to a 30-minute aerobics work-out" declared gerontologist Dr. Karen Weatherby.

Don't we live in a wonderful world? What is man, when you come to think about it, but a minutely set, ingenious machine for turning, with infinite artfulness, the red wine of Shiraz into urine?

Happy Valentine's Day! I'm off to Karachi!

Activists of Pakistani religious party "Jamat Ahl-e-Sunnat" hold a heart-shaped placard that reads 'it's not matter of heart it's a matter of faith" during a rally against Valentine's Day celebrations in Karachi

Valentine's Day is considered a pagan holiday by Muslims. Hundreds of people have gathered in the Pakistani city of Karachi to demonstrate against Valentine's Day. The protesters set fire to cards, posters and cuddly toys and labelled the Pakistanis who celebrate Valentine's Day as followers of Western culture. Conservative political parties have called for a government ban on Valentine's Day, labelling it un-Islamic.

In Saudi Arabia they have banned red flowers or red anything and the religious police are out in force. In Kuwait, Islamist MPs said yesterday they will study the possibility of amending existing laws in a bid to ban the celebrations of "alien events" like the Valentine's Day. Even in Indonesia, religious leaders consider it forbidden.

Happy Valentine's Day! Must rush! My flight for Karachi is boarding!

To make an omelet, you have to collect some eggs ...

... and I have been collecting dozens over the past week during which I have been looking after my neighbours' chooks who have gone to Tasmania.

The neighbours have gone to Tasmania, not the chooks! The chooks are still here, all four of them: Henny, Penny, Molly and Dolly, and they are busy laying one egg each every day.

Yesterday I had to shoo Dolly off the nest to get at the eggs and the way she looked at me with her beady eyes made me feel like a thief.

Anyway, they'll be spared this morning's visitation as it has been raining all night and still is and I don't fancy trudging through a rain-soaked forest. They still have enough food and they certainly don't lack water on a morning like this

See you tomorrow morning, Henny, Penny, Molly and Dolly!

With all that experience in avian behaviour, I wrote to Oxford University offering my assistance after they have just spent three years and £300,000 of taxpayers' money confirming that ducks like rainy weather.

I emailed them to say that "I can do the same research for a fraction of your cost! For, let's say, 3 pounds, and a carton of Foster's, I can carry out extensive research into duck-behaviour on your behalf. Please let me know when your next research is due to start."   I am still waiting for their reply.

If it walks like a duck, and has gone quackers, it may be an Oxford University research scientist!

Saturday, February 13, 2010

Thursday, February 11, 2010

Whoops! Why everyone owes everyone and no one can pay

As we stagger out of recession, we might forget how close our cosy, liberal democracies were to imploding. It’s easy to ignore the trillions of dollars poured into the ether, the billions of dollars of national debt nobbling our future.

"To use a technical economic term," writes Lancaster, " we are screwed." The aim of his excellent book "Whoops!" is to explain how we got to this place where the only financial sunny side is that we’re not Icelandic. He is an outsider — not an economist, a financial reporter or a navel-gazing banker, but a novelist. This detachment is hugely useful in his quest to demystify the arcane world of banking. Those too close often fail to ask the right questions for fear of seeming stupid; and that has been part of the problem.

Lanchester argues that the credit crunch emerged in a peculiar climate: the post-Cold War victory of capitalism. The West’s ideological triumph spawned a rampaging version of laissez-faire capitalism. The leading proponents of this wild west capitalism, the bankers, had enormous political influence, in London and Washington, and encouraged the “aggressive deregulation” of financial markets.

Into this climate came sub-prime mortgages and the mis-pricing of the risks attached to the product. This is where Lanchester’s masterly prose comes into its own. All those of us who reported the early days of the credit crunch swap tales of trying to untangle the acronyms and tell the story in layman’s terms. It was a time of late nights and tortured rewriting of stories; of sinking exhausted into a vat of wine; of dreaming of collateralised debt obligations (CDOs) and structured investment vehicles (SIVs). So it was with awe, and a little professional envy, that we read Lanchester’s lucid untangling of these complex financial instruments. This book, aimed at the non-expert, carries the reader through the derivatives market, without need of booze or towels.

The crux of the story is this: how did a semi-fraudulent business selling home loans to those who could not afford them turn into a multibillion-dollar merry-go-round between the world’s biggest financial institutions, which nearly brought us all to our knees when the music stopped?

First, then, there are the home loans. Loosening the US mortgage rules in the 1980s opened up the so-called sub-prime market — loans aimed at those too poor or saddled with poor credit histories to qualify for a normal mortgage. As long as the risks are properly assessed, this is, in theory, a reasonable business. If a borrower is higher risk, the lender charges more interest.

While this market was developing, the bankers were in search of new ways of making money. Post-Enron, and the dot-com crash, shares were looking moribund and bond markets in a low-interest-rate era were scarcely any sexier. House prices, however, were rising; and the mortgage market looked like a good place to play.

Here comes the first acronym. Mortgage-backed CDOs already existed. A CDO is, Lanchester explains, “a pool of debt being paid back by a group of borrowers, which is added together and then sold on as a set of bonds paying a range of different interest rates”. The advantages are threefold — CDOs spread the risk of the debts turning bad and there are two streams of revenue, a fee for setting it up and one from the repayments on the bonds.

These CDOs were attached to conformist mortgages, ones where the risk of default was low. But the growth market was in sub-prime loans, which came with a different range of risks. Another financial innovation — securitisation — came into its own. This allowed the bankers to package the debts and rely on safety in numbers and default averages. Once a mathematical whizz-kid had come up with a formula to securitise sub-prime mortgages, the banks were away. The market in sub-prime mortgage-backed CDOs grew extraordinarily quickly, until it resembled an inverse pyramid. A giant market in CDOs was propped up by a mob of unscrupulous, commission-hungry mortgage salesmen selling increasingly toxic loans to America’s poor.

As Lanchester says: “The whole business was set up to lend ... [generating] huge amounts of sub-prime debt so that the industry could create all the CDOs it wanted.”

Another central tenet of Lanchester’s argument is that the dominance of mathematicians and financial modelling in these markets completely distorted notions of risk. The maths said that the CDOs were safe as US treasury bonds. The maths said that there was no risk. “A part of my brain follows the explanation,” Lanchester writes. “But a larger part is left reeling with incredulity that anyone could be so stupid/clever as to believe that human fallibility could be engineered into non-existence.”

He tops it off with the best description of the 15-year evolution of the credit derivatives, in a single sentence: "It's as if people used the invention of seat belts as an opportunity to take up drunk driving."

Then, Lanchester argues, the regulators, in Britain and in the US, totally failed to recognise the dangers inherent in this explosion of complex financial instruments. The culprit, he believes, is the assumption that markets will always effectively price risk. The regulators, Alan Greenspan chief among them, did not believe that they had to police these risks because the markets would do it for them.

Lanchester’s central thesis is uncontroversial. This is unashamedly a book for beginners; an informed outsider’s explanation of a series of extraordinary events. Its strength lies in its wit, and Lanchester’s underlying outrage at the moral failures that allowed the capitalist cowboys to break the bank.

It is not, however, the credit-crunch masterpiece. While Lanchester is brilliant on the origins of the crisis he is less thorough on the second half of the credit crisis — the bit when all the assets backed by toxic debt began to infect the assets backed by solid debt. The credit crunch also encompassed the total freeze on borrowing between banks, the breaking of thousands of deals that went beyond the CDOs and into other markets. It was about a corrosive atmosphere of fear and mistrust that destroyed the web linking the world’s economies and financial institutions.

Lanchester is also less than satisfying on why the crisis happened. The credit crunch, for all its origins in flawed mathematical formulae, was a very human debacle. Mathematicians are used to discounting common sense — any complex maths tells us that the true nature of the physical world runs contrary to intuition. Time and space warp and bend; the maths tells us it is so, yet our common sense revolts at the notion. Our fallibility was not factored into the equations. It is blindingly obvious that in a non-mathematical world, CDOs were structurally flawed. Why did that fact not matter to anyone involved?

The answer lies in the people involved in the drama — you and me with our thirst for debt and housing; the lenders, the bankers, the salesmen, the economists, the regulators and the mathematicians. All of us colluded in a debt bubble, with varying degrees of ignorance and cynicism. It’s too simple to say that bankers were clever but ruthless, regulators were stupid and we were innocent victims. The real picture is infinitely more nuanced. Lanchester sees this, but the absence of flesh-and-blood characters on his pages leaves him trying to capture the nuances with generalisations. Bankers “treated the rules as things designed by thick people to slow them down and hamper their rightful profitability”.

The book of the credit crunch will, I would bet, be a novel. The choice at present is between explicatory works of nonfiction, and a breed of confessional “I was too busy taking coke and spending my bonus on hookers”-type bank-lit.

The book that has come closest to explaining the “why” of the credit crunch was written 132 years ago. In "The Way we Live Now", the fictional account of a bubble in railway shares, Anthony Trollope draws exquisitely the dance between Augustus Melmotte, the financier who believes his own hype, and the politicians and investors who want to trust him. Trollope writes of the increasingly arrogant Melmotte: “It can hardly be said of him that he had intended to play so high a game, but the game he had intended to play had become thus high of its own accord. A man cannot always restrain his own doings, and keep them within the limits which he had himself planned for them.”

We are still looking for a modern Trollope to chronicle this crisis and its architects.

P.S. I bought my copy from the Book Depository who ship worldwide POST-FREE! Here you can watch other people shopping at the Book Depository.

The Banks are having a lend of us!

Here is an interesting comment by someone directly affected by this.

And here is more.

Recap: Let's say a homeowner has just lost his home in default and OneWest sells the property.

The original loan amount was $500,000. Missed payments and other foreclosure costs bring the amount up to $550,000. At 70%, OneWest bought the loan for $385,000

Let's assume the home's current value is about $185,000 and OneWest sells the home for that amount. Total loss for OneWest is $200,000. But this is not how FDIC determines the loss.

FDIC takes the $500,000 and subtracts the $185,000 Purchase Price. Total loss according to the FDIC is $315,000. If the FDIC is covering “ONLY” 80% of the loss, then the FDIC would reimburse OneWest to the tune of $252,000.

Add the $252,000 to the Purchase Price of $185,000, and you have One West recovering $437,000 for an “investment” of $385,000. Therefore, OneWest makes $52,000 in additional income above the actual Purchase Price loan amount after the FDIC reimbursement.

Those "banksters" at OneWest make more money if their borrowers default!

Wednesday, February 10, 2010

Bloody huge profits (BHP)

BHP Billiton (BHP) announced its first-half results this morning. They are quite a bit better than expected: net profit of $US6.14bn ($US5.7bn excluding significant items) compared to the $US5.1bn analysts expected. They also declared a US42c dividend, up from US41c.

The shares went from yesterday's closing price of $39.85 to $41.24 in early-morning trading but are currently around $40.15, up a mere 0.75% whereas its rival RIO put on over 2%. As Professor Julius Sumner Miller used to ask, "Why is it so?"

Big increases in production volumes combined with the sharp rebound in commodity prices and demand towards the end of last year will translate into a large increase in BHP’s profitability and cash flows this half-year and, despite its reservations about the health of developed economies and the maintenance of China’s demand in the near term, the group remains very confident about the longterm outlook.

BHP Billiton believes with a passion in the long-term China and India stories and that the slow-down in global mineral expansion projects which took place in 2007 will lead to supply shortages in the medium term. BHP Billiton has found that the diversity of its mineral sources insulates it from the worst of downturns because normally there are at least one or two products doing well. The company has virtually no debt with its nominal net debt of around $8 billion being well under 10 per cent of market capitalisation.

BHP closed the day at $39.88. My target price is $44.

And here's something to ponder:

"IN THE STOCK MARKET (as in much of life), the beginning of wisdom is admitting your ignorance. One of the many things you cannot know about stocks is exactly when they will up or go down. Over the long term, stocks generally rise at a nice pace. History shows they double in value every seven years or so. But in the short term, stocks are just plain wild. Over periods of days, weeks and months, no one has any idea what they will do. Still, nearly all investors think they are smart enough to divine such short-term movements. This hubris frequently gets them into trouble."

James K. Glassman, Co-Author of Dow 36,000

Tuesday, February 9, 2010

Shit happens!

My good friend Cameron Menhenick is building a new house at # 1 Sproxton Lane. Everything is coming along nicely: the roof is on, the walls are in, the watertanks installed and the new 'youbeaut' biodegradable septic system connected.

And then the rains came! More than 100 mm of it! And up popped the septic tanks like mushrooms after the rain, floating on the rainwater that had filled the excavated holes.

Shit happens!

The only death we experience is other people's

Ray in January 2007 sitting at the cash register in his Kuranda junk shop

Thinking back over my past trips to Cairns, Cooktown and the Atherton Tablelands, I emailed Regine Bergmann of Australian Property Connection in Cairns who during my first visit in 2003 (and again in 2005 and 2007) had shown me several properties in Kuranda.

We had a common acquaintance in Ray Mullins who ran a second-hand shop in Kuranda Village. Ray owned several properties in and around Kuranda and the Tablelands and planned to build a block of apartments in the Village. He had spent half a lifetime in New Guinea and we shared a common knowledge of many of the other expatriates and local identities. We used to talk and talk while he tended to his 10-cent sales and I spent time in his two-computer "Internet Café". That never stopped him from charging me every last cent of every last minute I spent on his computer but I didn't mind as in time I came to appreciate his dry sense of humour and his grumpy outlook on life and I asked Regine to give him my regards:

Hello Regine,
looks like you haven't got many Kuranda properties for sale. Anyway, we are still down here at "Riverbend". I hope you are keeping well! if you see Ray in his junk shop in Kuranda, say hello to him from me. Has he built his units in Kuranda yet? He and I are both slowly running out of time so he'd better hurry!

I didn't have long to wait for her reply:

Hello Peter,
Nice hearing from you and for as long as you enjoy yourself, that is all that counts. Prices are down here at the moment, but are already going up again. Ray Mullins ran out of time, he passed away a few months ago, only aged 62. Peter, it was nice to hear from you and maybe one of these days you will visit Cairns again.

How sad to hear of Ray's passing! And he was younger than me! Well, Ray, here's my last tribute to you. I've always enjoyed our little talks about everything and anything but especially the world's woes and wickedness. Kuranda won't be the same without you!

Sunday, February 7, 2010

When PIGS can fly!

After the emergence of the BRICs - Brazil, Russia, India and China - pushed the sharemarket to new highs, the financial troubles of the PIGS - Portugal, Italy, Greece and Spain - are pulling it down again. I am sticking with the "stronger for longer" resources sector and am heavily overweight in BHP. Time will tell!

In the meantime, don't believe all that doomsday talk about the coming of the end of the world because some little PIGS in Europe can't pay their debts. That's hogswash!

Saturday, February 6, 2010

Langshaw of long ago

Some time ago, when I visited WATERWAYS' Batehaven office to renew my boat license, I needed a Justice of the Peace to witness my signature. The nearest JP I knew was several kilometres down Beach Road in Batemans Bay but the staff at WATERWAYS directed me to a property valuer's office next door. The valuer, a Richard Langshaw, was also a JP, I was told.

As I walked into their office, the man himself came towards me, shook my hand, and ask, "And how are you, Peter?"

After I had picked up my jaw from the floor, I asked how he knew my name. "I never forget the man who gave me my first job!" he said.

Of course! Young Richard Langshaw! It was early 1979 and I had just returned from my latest overseas assignment with the Penang Port Commission in Malaysia and, with nothing else to do, had taken a job as accountant with "Kirk's Queanbeyan Truck Centre" in Canberra.

I 'automated' their accounting processes by installing a mechanical ledger machine and hiring young Richard, who had just come out of school, to operate it.

I didn't stay long and moved on to bigger and better things. And so did young Richard who became a registered real estate valuer with his own firm of Langshaw Valuations (although after reading on its website that "Langshaw Valuations, under its previous trading entity, was established in 1964", I guess it must have been started by his father).

Anyway, it's always good to see a young man succeeding in life! Congratulations, Richard, and well done!

Friday, February 5, 2010

BINGO !

Last night was Bingo Night at the Tomakin Sports & Social Club. The wet weather stopped some people from coming but not the 50-or-so regulars some of whom play bingo every night!

They wouldn't be the only ones who have gone mad about bingo: rumour has it that the mathematician Carl Leffler who had the task of creating bingo cards with the least-likely winning combinations had gone mad by the end of the twelve months it took him to invent 6000 different bingo cards. It is estimated that there are over 552,446,474,061,129,000,000,000,000 possible bingo card combinations (you may wish to double-check this).

For those who are not addicted to Bingo and don't even know what it is, here is a brief description of the game:

A typical bingo ticket is shown to the right. It contains twenty-seven spaces, arranged in nine columns by three rows. Each row contains five numbers and four blank spaces. Each column contains either one, two, or very rarely three, numbers:

The first column contains numbers from 1 to 9,
The second column numbers from 10 to 19,
The third 20 to 29 and so on up until the last column, which contains numbers from 80 to 90 (the 90 being placed in this column as well).

The game is presided over by a caller who calls out the numbers, validates winning tickets, and announces the prize for each game before starting. The caller then begins to call numbers as they are randomly selected.

The winning combinations are:
Line — covering a horizontal line of five numbers on the ticket.
Full House — covering all fifteen numbers on the ticket.

As each number is called, players check to see if that number appears on their tickets. If it does, they mark it with a special marker called a "dabber" or a "dauber".

When all the numbers required to win a prize have been marked off, the player shouts in order to attract the caller's attention. There are no formal rules as to what can be shouted, but most players shout "Yes" or "Bingo". (Some players may go completely nutters and jump up and down and go hysterical even though the biggest prize money is just $50 a game!) An official then goes and checks the claim (or carries the by then comatose claimant out on a stretcher).

This official was me!

The other member of the Marine Rescue team was Kingsley Forster who, it turned out, had been a "kiap" in the Sepik District and the Western Highlands of Papua New Guinea in the early 60s which meant that we had plenty to talk about in between selling tickets and handing out prize money.

Thursday, February 4, 2010

Facing up to it!

Sorry but I've been away from the computer for a bit.

Padma gave me a haircut and thought that while she was at it, she would give me a facial as well. What do you think of the little vegetarian touch? (to celebrate Australia's multi-culturalism, we used a Lebanese cucumber)

Anyway, it's all finished now and I'm feeling fresh and clean but I'm a little worried about the two lumps growing on my chest and my high-pitched voice.

I guess I had better jump onto my menstrual cycle and do a bit of exercising to get back into shape!

No comment!

Tuesday, February 2, 2010

This week's social colander

"Riverbend"'s usual tranqillity has been postponed as I attend to various extramural activities.

On Thursday night I run a Bingo Night at the Tomakin Sports & Social ClUb as a fundraiser for the Marine Rescue.

On Friday I am selling raffle tickets in the Bay, also for the Marine Rescue.

On Saturday it's Radio Room Duty again with Marine Rescue.

And on Saturday I visit nearby neighbours (here's a bit of tautology for you but when you live in the country you do have nearby and far-away neighbours, not to mention the neighbours-from-hell) to be instructed in the art of chicken-feeding and -watering. They leave on a two-week trip to Tasmania and have entrusted me with the task of looking after the chooks during their absence. I've already done some preparatory reading ...

Monday, February 1, 2010

Meet the Mozart of the Insurance Industry

Click on image to enlarge

A friend has just sent me this group photo of the Braunschweig branch of the Hamburg-Bremer Feuer-Versicherungs-Gesellschaft where I served my articled years.

The photo was taken in 1963. I was a non-conformist even then as evidenced by my crossed legs. Or was it a full bladder?

I had just completed my articles but at 17 I was still younger by at least a year than anyone else who was only then starting theirs. Call me the Mozart of the Insurance Industry!

Of course, you recognise me in the photo, don't you?
(a tip: I am NOT the one with the handbag!)