Scotland and the referendum

I have wondered all my life about Scotland.

What it means, and what it does not mean.

Who we are, and who we are not.

Growing up close to the border (for there is only one) focuses the mind.  27 miles was all that separated my childhood house from England.  One day far back in my youth (and I mean significantly before I was 10), I declared my intention to use one of my cycle rides with my late, great father, to ride to England.  In my vague memory, it was both a grand statement of intent (a different country no less!) – and eminently achievable.  It was just past Jedburgh, wasn’t it?

Luckily (and not entirely unpredictably) for my Dad, the reality of the task hit long before the border was in sight – in fact, I suspect the wind on the long, open bridge high over the river Tweed was probably the snapping point.  In the end, I satisfied myself with a return trip to Melrose – an awe-inspiring odyssey of about 3 miles in each direction.

Since I can remember, thoughts of Scotland are not separated by much from thoughts of England.  I don’t know if the same is true in Cardiff, but it seems to me that as Scots, we know who we are, because we know very clearly who we are not.  This is not to condone anti-English sentiment – quite the opposite.  It is however important to realise how fundamental the sense of being on the wrong end of an unequal power equation has been, and how unhealthy it seems to me to define yourself in negative, exclusive terms.

Identity of any sort is an often confusing and deceptive construction – a pointless quantising of an endlessly variable reality, and at the same time an essential categorisation system to enable us to deal with the  vastly variable world through which we move.  This is a discussion you could spend forever exploring - time for that later.

Having watched the referendum debate unfold from across the water in Ireland, it has made me proud in a positive way once again to be Scottish.  A famous businessman from Edinburgh – from an immigrant family – once described the “democracy of the people” as one of his favourite things in Scotland, and it has again become raucously, glaringly apparent these last few months, as the debate within Scottish society has left for dead the soundbite digging from the politicians on both sides of the argument.  There’s an old saying if you leave a Scotsman alone on a desert island, he’ll either start a church or an argument – and whilst I haven’t detected any new religious factions (yet – there are still 3 weeks to go) – the noise of the rolling argument is both deafening and invigorating.

I hope for a huge turnout.  It seems unthinkable to me that anyone within Scotland would not take the chance to at least voice their democratic opinion on what seems to me to be the single biggest issue in a generation – or more.  This is not a subject on which anyone can afford to let their vote pass unused.

On the issues, many of them can be argued either way, and neither camp has (for me) put forward anything solid on really any issue.  The ‘yes’ camp has failed to explicitly show how it will be funded, and the ‘no’ camp has failed to show why Scotland would be the only non-viable small European state.  How much oil is left?  You will find an expert who will tell you anything.  The pound, the EU, let no one kid you these issues would not be resolved.  Nuclear weapons, I have no time for - the kind of "protection" and jobs we do not need.  Salmond, and the SNP. I'm not be a big fan, but if they were to deliver independence, they would be free to make their case for election thereafter – and the electorate would then be free to take them or leave them.  Independence is not about the SNP.  It’s about Scotland.

I hope for a yes vote.  I have lots of small reasons, but only two very large ones.

I distrust politicians, but they are predictable.  They are susceptible to all kinds of influence.  For this reason, I’d like to have as much power as possible, as close to the people as possible.  I believe that arms can be twisted harder in Holyrood than they can be in Westminister – the critical mass is smaller, the screw can be turned harder, easier.  Let’s bring the politicians to where they are less comfortable – close to us.

Most crucially for me – what it shouldn’t mean to be Scottish.  The unhealthy dislike of “England” – often verbalised - perhaps an inferiority complex.  A built-in, taught, indoctrinated attitude.  (I blame the predominantly English media for a lot of this, but that’s another day’s work).  For too long Scotland has both been dictated to and held back from deciding matters on our own, for ourselves.  In some ways treated like a child, and as a result we’ve maintained a childlike attitude.

Perhaps, we’ve secretly liked this endless stalemate.  Devoid of responsibility, full of opinions but secretly hoping nobody ever calls our bluff.

It’s time to grow up – to leave the house, pay the bills, do our own washing.  We can be a fairer, more equal society.

The inclination - the "democracy of the people" - has always been there - now we need to deliver ourselves the power to implement that which we believe in.

Noone should think this will be easy - but there’s nothing unviable about Scotland, if we have the courage and the desire to take responsibility for making it so.

Blowing Bubbles

From time to time, I've had some small share stuff going on.  Nothing that's going to buy me as much as a spare tube for my bike, which I seem to need on almost an every-two-days basis at the moment (thanks everyone breaking glass in and around Dublin!) - but as a result of having shares here and there, I preferred to have them through a company that knows what they are doing.

Anyway, said company (Edward D Jones fact fans) occasionally send out letters explaining the state of the world, the markets, etc.  They don't offer to make you rich, which is one of the attractions (most people offering to make you rich actually intend to take your money and make them rich).  But I digress.  I've been trying to dig out one of the letters from Edward D Jones for ages, and I finally found it.

For context... the dot-com bubble in all stock prices Internet-related was exploding from about 1995 until 2000.  The massive collapse of this bubble in prices occurred in spring of 2000, with the NASDAQ peaking on Friday March 10th.  In the following three business days - Monday 13th - Wednesday 15th March, 9% of this peak value was erased.

In April 1999, one year before the cataclysm, I received one of the occasional missives from EDJ.  It still stands today as a spectacular example of someone keeping their heads when everyone else was losing theirs.

Future lessons from the past...

 

 

The debt and the defacit

I've got to admit, I don't get the IMF/EU bailout of Ireland. I mean, I understand it from the IMF/EU point of view - Ireland was about to take down the Euro due to systematic risk, sovereign default, bond jitters, etc.

What I don't understand, is why Ireland is taking the so-called "bailout". If the state needs to borrow in order to keep funding services, logic might suggest that there are too many services going on and that they need to be cut. To borrow in order to pay for them surely just means paying interest on the loans, as well as for services that we can't afford anyway.

So never mind the defacit (which I take to be the gap between annual revenue and expenditure) - if the overhanging total debt is not payable, would it not be better to default now, face all the consequences early and get it done with, rather than kicking the can down the road on a debt that will ultimately require default anyway - while we all make the money-lenders a bit richer via interest in the meantime?

Aphex Twin - Analogue Bubblebath

Friday morning.

The UK managed to nearly-elect a conservative government, which is probably what will ensue. There is a honking financial hole to be dealt with, and a conservative government will almost certainly mean that the burden will fall most harshly on the poorest and least able to defend themselves.

The Euro is about to split up. And that's not hyperbole or metaphor. Effects on poor people - see above.

Turn it up and let it go.

Freefall and denial in the Irish Housing Market

The Irish housing market (and the ongoing attendant commentary) is pretty interesting.

I purchased a house with my better half (deciding that we couldn't wait forever) early in 2006. As luck would have it, that turned out to be very shortly before the peak of a historically insane price bubble, which is now in the process of bursting in an extended and messy fashion. They say the secret of comedy is in the timing.

Since 2006 or 2007, there's been an ongoing fall in the value of houses here, but recently there's been intermittent talk of green shoots of recovery, a bottoming out, a slowing down in the rate of descent (you always know you're in trouble when things getting worse at a slower rate is presented as an improvement), the start of a recovery etc etc.

For some reason connected no doubt to my interest in economic trends, statistics, truth, and a desire to view life-changing financial crisis through the prism of small, cute coloured Excel graphs, I started tracking the asking prices in our immediate neighbourhood in September 2006, about 6 months after we purchased.

Since then, every month (or thereabouts), I tap in the asking price for every house in about a half-mile radius that is on the market. While this doesn't give an accurate picture of prices achieved, it's a good guide to the trend. You can also make a reasonable assumption that when prices are falling, the achieved prices are below the asking price, and the opposite when prices are rising - in other words, the achieved price most likely drags the asking price around kicking and screaming behind it.

So based on the figures I have for my own area of Dublin (old settled low-density ex-council estate close to the town centre, for those seeking Irish context), from Sept 2006 to October 2009, here is what has happened.

Asking prices stalled in summer-autumn 2006, and remained static until Feb 07, when I recorded the first fall in my area. (My guess: achieved sale prices stalled somewhere around summer 06, and started to fall back prior to that Christmas.)

Between Feb 07 and May 08 asking prices fell slowly and steadily, shedding around 8.6% from the peak during this 15-month period (averaging a 0.7% drop per month).

Something went seriously to hell in spring 08, because around May prices started falling off a cliff. In the 17 months from May 08 to Oct 09, asking prices dropped 31% from the May 08 figure (averaging a 2.5% loss every month).

So where are we now?

Well my figures from the official asking prices (which come from a variety of estate agents) say this: we are currently in a situation as of Oct 09 where asking prices are 39% off their late 06 peak. So the next time you hear a news item telling you that house prices might fall by up to 40%, it's worth remembering that in reality, they already have. Not only that, there's nothing in the figures I've collected in my area to even hint that there's a floor in sight - the asking prices this month have fallen as much as any other month in the last 12.

Apart from the rash of unemployment in Ireland, a major reason for the continued express-elevator treatment house prices are undergoing, is the fact that the banks have abused their position as lenders, speculated wildly in markets and products in which they had no understanding of the risks, and now we the public are supposed to be paying through our taxes to keep them afloat.

As a result of the fact that the banks and financial houses are sitting on a carelessly stacked wobbling deck of completely opaque financial products, nobody knows where all the debt is. It's sort of like playing pass the parcel where everyone has a parcel, and a few of the parcels have booby-trapped bombs inside - except nobody playing the game thought to check before starting. The music has stopped, everyone has been left holding a package, and nobody wants to open theirs. Everyone wants to pass their package on, but nobody wants to take anybody else's. Endless stalemate - and the dissipation of trust that results means that the banks are not lending anything, to anybody.

In short, the banks totally irresponsible game of pass-the-parcel in the hope of astronomical profits has led them into a cul-de-sac where they are terrified to loan to anyone - they may need all the cash they can possibly lay their hands on when they are finally forced to take their grubby little grabbing hands and open their little parcels.

Without banks prepared to loan, there can be no mortgage approvals. Without mortgage approvals, the only way is down.

Minus 39 percent, and falling...

Lisbon 2

Ok I'm stumped.

For those that don't know, today is the second referendum on the proposal that Ireland sign up to the Lisbon Treaty, which is a European wide treaty. It's worth mentioning at this point that it's an absolute and utter disgrace that a second referendum be held on the same treaty, with the same question to the population only 1 year after the Irish were asked the first time. There was a valid referendum, to which a valid answer was given on a high turnout - to be ignoring that outcome and asking the Irish people to vote again is only a tiny step above outright fixing of the first vote on the scale of democratic abuses.

Deep breath, calm down. Ok.

Those that are for the treaty say it will safeguard jobs and workers rights, stop human trafficking in the EU, rescue Ireland from recession, and generally hold off the threat of Europe hating us at any point soon. Those against it say it will increase military spending, break trade barriers, lower worker rights and protections, and generally mean the end of all good life as we know it.

I find it hard to trust either side to be honest (although I'd without a doubt come down on the 'No' side if I had the choice to make).

The greatest conundrum I have with Lisbon is this: Michael O'Leary (head of Ryanair), has reportedly spent half a million Euros supporting the "Yes" side. Now, Michael O'Leary wouldn't spend one of George Galloway's thin dimes on a life jacket if one of his planes was going down in the Irish Sea and he thought he had a chance of swimming to shore for free. What does this mean? It means that when O'Leary is prepared to blow half a million Euros on what is seemingly a political event, something very very big is up.

I can't figure it out - what is there hidden in this treaty, that makes O'Leary so desperate to see it go through?

Chic, Billy Brag, and Electric Picnic 2009

Last Friday was the first one in a while with no Friday tune – the reason being that I was out of town, visiting Electric Picnic in County Laois. If there was a weblink for County Laois, I'd link it - but Laois isn't that sort of place.

I haven’t been to a festival for years – in fact I haven’t stayed as a punter overnight at a festival ever (only when I’ve been working) so it was interesting to see it from the other side.

The EP forums show a mixture of reviews, from great reviews of bands to dodgy reviews of the sound on some stages, and some concerns that there were less random art happenings going on than recent years, prices of food were high, the bad weather was dealt with too little and too late, and security was arbitrary and didn’t seem knowledgeable. Some of these things, EP may have to look at for next year – particularly some unsavoury crowd elements who people seemed to think were a bit more in evidence this year than last year. The beauty of the festival is that it’s not like rival festy Oxygen - it's more chilled, more arty, appears less commercially inclined, and has a friendlier crowd - they need to work hard to keep it that way. Reducing the capacity slightly, and turning the lineup slightly more non-mainstream might be a couple of subtle ways they can influence the crowd that are attracted.

That said, I had a great time. Great music, good sound if you stood in half-sensible places, lots of different stuff going on (like the tent with the Hookah on the right - I didn't get a Hookah, but we did grab some Brandy Chais later on Sunday when the relentlessness started to tell), and what I thought was reasonably priced food etc. I would also say that the €3 deposit on the plastic beer glasses was a brilliant judgment – I didn’t see one left around all weekend, so loud applause on that front.

Another great thing is being with an Irish crowd, particularly at a 'boutique' festival like this - it's very, very friendly even when it's massive. Generally, it's just lots of people having a great time.


To the music, and first up was Lykke Li. I’d never seen her before, and she was wearing some weird black thingy that didn’t really stick out in a dark tent with a dark background, but… she was really good live. Fascinating tunes (she’s a bit nuts), loads of energy, and really interesting. She’s got a mad haunting voice. I’d go see her again in a second.

Then we caught a bit of Seasick Steve on the main stage. The main stage didn’t work quite as well as the tents – the atmosphere wasn’t contained and amplified in the same way, which may have been something to do with the weather not being amazing, but he’s got mad energy and is a lot of fun.

Next up were Rodrigo y Gabriela, a duo from Mexico City with amazing acoustic guitar skills. They had the tent up and rocking, although for some reason I couldn’t quite put my finger on, it didn’t feel quite right. I think it’s that they would have been much better in a smaller venue – there was a weird mismatch between the music and the size of the tent, and it didn’t ever sit quite right, despite the fact that they were great.

Last act I grabbed on Friday night was Orbital, who somehow I’ve managed to avoid seeing live for the last 10-15 years. A properly seminal duo from the fledgling UK house scene of the late 80s and early 90s, they backdropped broken jackhammer machine beats with surprisingly melodic weaving synthlines, and it was this accessible sound that helped them to propel house and techno into the consciousness of the public at large. They were good, very slick, and played all the big tunes. My only problem with them now is that they are living off a back catalogue from a decade ago. It’s already a bit nostalgic for a music act - they need to write some new tunes, or they will turn into a touring glass museum case. And they should write some new tunes, because they do the live electronics thing more engagingly than nearly anyone else when they are on it. Here’s vintage Orbital – booked as the first ‘dance’ act ever to headline at Glastonbury in 1994, they shredded the place. Amazing times - this is "Chime"...

Apart from that, I saw a tiny bit of Madness on the main stage, who were doing the Madness thing – you’d probably have to be down the front for it really to work. Or perhaps better weather would have yielded a more Madness-friendly atmosphere...

Practically my only must-see of the weekend was Billy Brag, and I managed to see his entire set. He was as usual, direct (just him and a guitar), soulful, and of course had a little bit of politics sprinkled about, including a couple of digs at the second Irish vote on the European Lisbon treaty that’s upcoming, a vote of confidence on Obama’s ability to deliver universal health care, and loads of other stuff. And as usual, he was absolutely brilliant – I just never get tired of seeing him and listening to him.


Here’s Billy playing at SXSW, with a nearly completely rewritten version of “Great Leap Forwards” for the US audience. He lasts on the original for about one verse, and then suddenly he’s off into military spending, universal healthcare, double standards in democratic participation and media complicity. Mostly without missing a beat on the guitar either.

Billy Brag is a legend, and he's a knowledgeable and an active one at that. An inspiration.

Saving the best till last – playing inside a huge tent on Saturday evening, were Chic.

There’s not much I can find to say about this – they were one of the most amazing bands I’ve ever seen. Masses of people on stage, phenomenal singers, great drums and bass, horns, seriously funky guitar, and I’ve nearly never heard a band sounding so tight and rehearsed – they had it nailed.


And the back catalogue – to die for. Chic were famous for their hits “Le Freak” and my personal favourite “Good Times”, (which in it’s later sampled format helped the Sugarhill Gang drag hip-hop off the block and launch it kicking and screaming into the stratosphere with the outrageous sampling lift that was “Rappers Delight”). But aside from music that Chic actually recorded, they also produced the Sister Sledge album “We are family”, Diana Ross’ “Diana” (featuring the stunning ‘Upside Down’), David Bowie’s “Let’s Dance” (could they write basslines or what?!), Duran Duran, Madonna. On and on it goes.

And they played half of these in the tent. We are family, Upside Down, Let’s Dance, Le Freak, Good Times, just insane. They were instrumental in disco, one of their tracks helped put hip-hop where it is, and together with Bootsy, Kraftwerk, Roland and Yamaha, they are partially responsible for birthing house and techno. It’s long past time for Chic to get some serious recognition.


So seeing as a nice person already has it up on youtube, here (while it lasts) is a recording from inside the tent. The camera mic clearly isn’t up to the bass, but you get the picture.

And dance we did. We all did. Come back Chic…

Beyond reasonable doubt in Scotland

Today, the Scottish Justice Secretary announced that Abdelbaset Ali al-Megrahi, the man jailed for the bombing of Pan Am Flight 103 was to be released “on compassionate grounds”. After serving years in jails in Scotland al-Megrahi, who has terminal cancer, will fly home to die.

Who coordinates how public discourse is shifted? The news of his release happened only today, but already it is well established by the media that we are not to discuss whether he committed the crime in the first place, and we are not to discuss whether he should have been imprisoned. We are not to discuss the huge holes in the evidence, and we are not to discuss the fact that even a cursory reading of the judges verdict would have led you to believe that this man should never have been convicted.

The only question we are apparently supposed to discuss is: should this dying man have been released “on compassionate grounds”?

To assess how reliable the conviction was, it’s instructive to go back over excerpts from the transcript of the original trial verdict.

One of the key factors in the conviction of al-Megrahi was his identification by a Maltese shopkeeper called Tony Gauci. Gauci gave evidence that al-Megrahi purchased clothing from his shop, later allegedly found in close proximity to bomb components from flight 103. From the trial verdict (with my emphasis):

A major factor in the case against the first accused is the identification evidence of Mr Gauci. For the reasons we have already given, we accept the reliability of Mr Gauci on this matter, while recognising that this is not an unequivocal identification

In other words, the judges acknowledge the crucial importance of the identification by Tony Gauci (a Maltese Shopkeeper) of the accused, and then go on to say that while it is not an “unequivocal” identification, the judges accept its reliability. And why do they accept its reliability? From earlier in the judgement, they explain the sequence of events (edited here) with Mr Gauci that leads to them judging this identification as reliable:

Gauci is first interviewed by police on 1st September 1989, where he describes the gentleman he sold clothes to as 6 feet tall or greater, with a big chest and a large head. On 13th September. Gauci clarifies the man’s age as “about 50”. On 14th September, Gauci is shown 19 photographs, and he indicates that one of the photographs (which was not al-Megrahi) is of a man who appears “similar” to the man who purchased the clothes, but is too young. On 26th September, Gauci is shown 24 more photographs, and he indicates that the man he sold the clothes to is not present, but that one man in the photographs has the same shape of face and style of hair, and three other photographs are of men of the correct age. On 6th December, Gauci is shown another selection of photographs, and does not identify anyone from them. Some time around the end of 1989 or the beginning of 1990, Gauci’s brother shows him a newspaper article about the Lockerbie disaster, which contains the word “bomber” across a photograph of the wreckage of Pan Am 103. In the article are also images of two men – one of which was also marked with the word “bomber”. Gauci thought that one of the photographs showed the man who had purchased the clothes from his shop – the man he identified in the paper was Abo Talb. On 10th September 1990 (a year after the first interviews), Gauci is again shown 39 photographs, and does not identify anyone from these pictures – stating that he has never seen a photograph of the man who bought the clothing. On 15th February 1991 (a year and a half after the initial interviews), Gauci is shown 12 photographs, and says none of them are of the correct age. When asked by police to look carefully and allow for age difference, he pointed out one of the photographs, saying the face was “similar to the man who bought the clothing”. He also said “It’s been a long time now, and I can only say that this photograph 8 resembles the man who bought the clothing, but it is younger”. The policeman concerned (DCI Bell) later gave evidence that the person in photograph 8 was al-Megrahi.

So this is the eyewitness that is “reliable” in the opinion of the judges – an eyewitness who after at least 6 separate interviews and identification sessions, and being shown over 94 photographs over a period of 17 months, is only able to say that a single face is “similar”, and “resembles” a man who bought clothing in his shop. On this account, the entire case hangs.

So how were the judges able to take this “reliable” account, and plug it in to a watertight prosecution case?

From the judgement again (with my emphasis):

From his [Gauci’s] evidence it could be inferred that the first accused was the person who bought the clothing which surrounded the explosive device. We have already accepted that the date of purchase of the clothing was 7 December 1988, and on that day the first accused arrived in Malta where he stayed until 9 December. He was staying at the Holiday Inn, Sliema, which is close to Mary’s House. If he was the purchaser of this miscellaneous collection of garments, it is not difficult to infer that he must have been aware of the purpose for which they were being bought. We accept the evidence that he was a member of the JSO, occupying posts of fairly high rank. One of these posts was head of airline security, from which it could be inferred that he would be aware at least in general terms of the nature of security precautions at airports from or to which LAA operated… It is possible to infer that this visit under a false name the night before the explosive device was planted at Luqa, followed by his departure for Tripoli the following morning at or about the time the device must have been planted, was a visit connected with the planting of the device.

In other words, al-Megrahi could be the person that purchased the clothing. And he was staying in Malta, close to the clothes shop. And if he bought the clothes that ended up in the bomb, he probably knew about the bomb. He might know about general security arrangements at “airports”. It’s possible his visit to Malta was connected with the planting of the device [bomb].

Do the words “beyond reasonable doubt” keep ringing in the ears of anyone except me?

Green shoots, turkeys, and endless deleveraging

Back to the talk of “green shoots” in the economy – this is getting talked up a bit both in the US and Europe at the moment, and it’s worth taking a look at how valid it might be.

Counterpunch and many of the writers on it have really been hitting the nail on the head the last couple weeks – start with Dave Lindorff, who explains that the collapse in house prices in the US has destroyed the equity that consumers were able to borrow against. In effect, much of the economic activity in the US in the last decade was spending done with borrowed money – money borrowed against houses on the understanding that the price rises would stick, and money borrowed on credit cards on the understanding that jobs could be used to pay off the balance down the road. Now that jobs are being shed indiscriminately, and the real estate market is shelled, how can real spending-driven economic activity recover?

Where is the consumer spending supposed to come from that used to represent a whopping 70% of economic activity in a United States that long ago stopped making things? The answer is: nowhere.

Lindorff also refers to the fact that consumers simply could not borrow if they wanted to – the banks are not lending. Do they know something they don’t want to tell us? Lindorff again (my bold):

That’s why card companies like American Express and many Visa and MasterCard issuers, instead of just charging a late charge when card-holders miss a monthly payment deadline as in the past, are now just jacking up the interest rate they charge, --in American Express’s case to 28% or over 2% a month! That’s not the action of a bank that is expecting to get repaid by a valued customer—it’s the extortionate action of a usurer that wants to extract as much money as possible from a borrower that it expects to have go bust.

The ever reliable Mike Whitney also talks eloquently about the Federal Reserve in the US pumping money in to banks with the full knowledge that this will likely result in stock market speculation, driving the recent rally in the States. This means that the run up in the stockmarket stateside is not based on any fundamentals (employment, housing market, spending by joe public) whatsoever, but is simply the government funnelling money to financial institutions knowing that it will likely end up in the stockmarket, inflating values against the fundamentals – a game that can have only one conclusion. To add to that, Whitney highlights another problem that has been bubbling under for some time now – that is the trouble that the US is starting to experience in getting foreign governments and central banks to participate in the auctions of US dollar bonds. This (auctioning off US government bonds) is how the US has been funding its astonishing national debt for some time now, but unfortunately it does require confidence on the part of foreign governments and investors that the dollar won’t collapse, rendering the bonds they have purchased near-worthless.

As the fundamentals of the US economy get in to worse and worse shape, the likelihood of a dollar collapse gets closer and closer. Foreign governments would prefer not to have a sudden dollar collapse – they (China particularly) have so much money tied up in the US that a sudden collapse would be catastrophic for them also, so there is an element of chicken and egg. However, while nobody wants to be the one to cause the panic and run for the exits first, people (similar to the end of a large sporting event) are starting to put their things in their pockets and silently slip on their coats, hoping that nobody notices and they can be out of the door before they get trampled in the stampede and lose everything. The day of reckoning comes ever closer.

Finally, Whitney talks here about the roots of the destruction of the US economy – something that should have resonance in every other economy with over-extended consumers, rising unemployment and a housing market crash (here’s looking at you Iceland, Ireland, the UK, Spain, Eastern Europe, who knows where else):

A careful reading of the FRBSF's Economic Letter shows why the economy will not bounce back. It's mathematically impossible. We've reached peak credit; consumers have to deleverage and patch their balance sheets. Household wealth has slipped $14 trillion since the crisis began. Home equity has dropped to 41 per cent (a new low) and joblessness is on the rise. By 2011, Deutsche Bank AG predicts that 48 per cent of all homeowners with a mortgage will be underwater. As the equity position of homeowners deteriorates, banks will further tighten credit and foreclosures will mushroom.

In other words, the borrow-to-spend game relied upon the public having confidence that they would have the money from a job to pay back the borrowings, and that they would remain in a position of strength to pay back their mortgage in a house rising in value. There is now no confidence, for many people there are no jobs, and for many there is nothing but a vast collapse in house prices.

It’s going to take a very long time for the public to start to pay off the debts that they have personally accumulated, and until that time, it seems unlikely that they will be willing to stimulate the economy by spending unnecessarily. The game is up.

On a related tip, there’s a slightly heavy but quite interesting article here by hotshot of the month Nassim Nicholas Taleb, exploring the limits of statistics as a tool and parts of life where statistics are used with disastrous results. It’s particularly interesting because he talks at length about banks using statistics methods to analyse risk, without really understanding the statistics or the risks.

Here’s his somewhat hilarious metaphor for a turkey using statistical methods incorrectly to analyse it’s own risk:

A Turkey is fed for a 1000 days—every days confirms to its statistical department that the human race cares about its welfare "with increased statistical significance".

On the 1001st day, the turkey has a surprise.

Which begs the question - if we are the turkeys, is day 1001 in our past - or is it still to come?

Nationalise the banks!

It's pretty obvious at this point that the banking system worldwide is in a vast mess, and (despite what they may tell you), it's not looking any rosier for the near future.

The "green shoots" in the US seem to constitute a speculative stock market run due to the massive multiple stimulus actions (paid for by the taxpayer), which have underpinned a bounce (of the dead cat variety?) in the market which isn't based on any fundamental health in the economy. In other words, when this stock market bounce runs out of steam and investors (realising that there are no sound fundamentals) run for the exits again, hold on tight.

We've heard many times that the banks are "too big to fail" - that they are of such systematic importance to society as a whole, that they simply cannot be allowed to go bankrupt - and that this systematic importance is the reason that we (the taxpayers) have to underpin the banks balance sheet when push comes to shove. Now, I can accept the premise that the banks are so important that they cannot be allowed to fail, and therefore, that we as a society may have to support them, financially if necessary.

What I cannot understand is - if we as taxpayers accept there is a need to support a crucial industry such as banking with our own money when the going is tough for them, then why would we allow our interest in the banks to be sold for a moderate profit when the banks return to health, and leave the serious money to be made by corporate interests when the banks are back to printing money off our backs as we struggle to repay our own private debts to them?

In other words - if the banks are of such societal importance, why are they not permanently nationalised? This way, when times are tough, we back the banks. When times are good, the profits from banking would benefit all of society, not just shareholders and vastly overpaid board members. I guess the answer is in the italics.

If we are going to socialise the risk, can we at least socialise the profit too?

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The other thought that occurred to me recently was that it is very odd that when there is a balance-sheet crisis in the health industry (the industry that keeps us alive), it requires either new work practices, more efficiencies, less/more management, or best of all, more privatisation.

Contrast this with when there is a balance-sheet crisis in the banking industry (the industry that keeps us in debt), - this type of crisis requires a eye-bogglingly vast bailout with your own money (and your children, and your grand children's money) to ensure its continued survival in its present form.

What actually is going on in Iran?

There are some fascinating thoughts from Paul Craig Roberts on Counterpunch.

The full article ("The U.S. Regime-Change Recipe for Iran") is here - my excerpts of the most interesting nuggets are as follows...

On May 16, 2007, the London Telegraph reported that Bush regime official John Bolton told the Telegraph that a US military attack on Iran would “be a ‘last option’ after economic sanctions and attempts to foment a popular revolution had failed.”

We are now witnessing in Tehran US “attempts to foment a popular revolution” in the guise of another CIA orchestrated “color revolution.”

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Even if the mullahs hold together and suppress the protests, the legitimacy of the Iranian government in the eyes of the outside world has been damaged. Obama’s diplomatic approach is over before it started. The neocons and Israel have won. ... One cannot avoid the conclusion that the West wants the 1978 Iranian Revolution overthrown and intends to use deception or violence to achieve that goal.

According to a wide variety of news sources (for example, London Telegraph, Yahoo News, The Globe and Mail, Asbarez.com, Politico), “Before the polling closed Mr. Mousavi declared himself ‘definitely the winner’ based on ‘all indications from all over Iran.’ He alleged widespread voting irregularities without giving specifics and hinted he was ready to challenge the final results.” ... Mousavi’s premature claim of victory before polling was over or votes counted is clearly a preemptive move, the purpose of which is to discredit any other outcome. There is no other reason to make such a claim.

In Iran’s system, election fraud has no purpose, because a small select group of ruling mullahs select the candidates who are put on the ballot. If they don’t like an aspiring candidate, they simply don’t put him on the ballot.

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Neoconservative Kenneth Timmerman let the cat out of the bag that there was an orchestrated “color revolution” in the works. Before the election, Timmerman wrote: “there’s talk of a ‘green revolution’ in Tehran.” Why would protests be organized prior to a vote and announcement of the outcome? Organized protests waiting in the wings are not spontaneous responses to a stolen election.

A writer on pakalert.wordpress.com says that he was intrigued by the sudden appearance of tens of thousands of Twitter allegations that Ahmadinejad stole the Iranian election. He investigated, he says, and he reports that each of the new highly active accounts were created on Saturday, June 13th. “IranElection” is their most popular keyword. He narrowed the spammers to the most persistent: @StopAhmadi, @IranRiggedElect, and @Change_For_Iran. He researched further and found that On June 14 the Jerusalem Post already had an article on the new twitter. He concludes that the new Twitter sites are propaganda operations.

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The unexamined question is Mousavi and his motives. Why would Mousavi unleash demonstrations that are obviously being used by a hostile West to discredit the government of the Iranian Revolution that overthrew the US puppet government? Are these the actions of a “moderate”? Or are these the actions of a disgruntled man who kept his disaffection from his colleagues in order to gain the opportunity to discredit the regime with street protests? Is Mousavi being manipulated by organizations funded with US government money?

The KLF / JAMS - It's Grim up North

Bill Drummond and Jimmy Cauty have always been up to wierd stuff. Cauty is from Liverpool, and Drummond is from Scotland. For a few years in the 90s, they formed "The KLF" together, and launched in to a bizarre and temporary career as art-pop terrorists, foisting a unique, strange and fascinating series of pop/dance singles on the charts.

One of their later singles was "It's Grim up North", and although I didn't understand it at the time, it's come to seem more and more significant to me as I've grown up.

The "North" in the song refers to the North of England. A place of stunning scenery, post-industrial waste-towns and cities, riven with unemployment, it's generally experienced from one of the few major motorways that arc across this part of England. The main artery (the M6) runs from Birmingham directly North, passing between Liverpool and Manchester before trailing up all the way to the border with Scotland. On the other side of the country, the oscillating disaster that is the M1/A1 grinds slowly up the East Coast, passing Hull, and eventually reaching Newcastle, before snaking up and around in to Edinburgh.

Linking these two is the M62, which cuts directly East-West from Liverpool to Hull. Driving from, to or through "the North", you spend a lot of time on these motorways, gliding past parts of England forgotten or deliberately neglected for huge parts of the 80s by London and Thatcher, with the attendant social problems and unemployement that resulted.

In "It's Grim up North", the KLF somehow captured this atmosphere in one of the most surreal tunes ever to make the UK charts. Set entirely in front of a rain-drenched motorway underpass, a searing industrial kick drum thunders out underneath klaxons and horns, as a litany of distored Northern English placenames is intoned from a guy standing in the driving rain in front of the biggest pile of back-floodlit speakers. Political parties seeking to fight the BNP should at least have to watch this video and soak it up a little bit.

It somehow captures the bleak and resiliant spirit of the North, in the context of the never-sleeping dirty motorways that constantly stream through it. The most amazing moments of the tune are halfway through, as the grinding industrialism breaks and slowly melts into the plaintive and powerfully epic "Jerusalem". Tied up in "little England" psychology (check Jerusalem at the last night of the Proms from London for some idea), nothing is guaranteed to fill the hearts of middle class England with more pride.

Two completely disparate atmospheres, one track. As musical pivot it's incredibly skilfull - as a cultural counterpoint, it's jaw-dropping.

Across 110th Street on the Emerald Isle

Here's a stunning performance by Bobby Womack, with a double-header of songs - California Dreaming, and the incredible "Across 110th Street", which is as relevant today as it was the day it was written (1973).

I've always found something quite magnetic about "Across 110th Street" - it explains urban decay and what follows more accurately than any dry text is likely to, and it's an amazingly soulful song. With Womack's voice, it's even better, and this performance with just an acoustic guitar is about as good as it gets.

It's a timely song as well, and it's a warning following the insane property bubble and unhindered development that's been happening in Ireland for the last 15 years. This frenzy of development was one of the first things that struck me when I moved to Ireland in 2003 - building of shoddy housing estates, on the extreme periphery of cities, and some of the larger towns. This is exactly what happened in Scotland back in the 60s with the concrete tower blocks - which were the great new thing at the time. The problem is that the estates typically don't get finished, you can't walk to anything or anywhere, public transport is patchy, and viable and plentiful services such as schools, shops, and a proper sense of community are never developed.

Take a very poorly positioned housing estate that sprawls for miles and is walking distance to nowhere, fail to complete it, fail to put in public transport, fail to add shops, gardens, parks and community, and then throw in a price crash trapping owner-occupiers on the estate, and a recession with job losses sapping them of any money they might have remaining, and watch the inevitable outcome.

A lot of people in dream housing estates are going to find themselves across 110th street in the next few years...

Tariq Ali - "The Clash of Fundamentalisms"

I've read "The Clash of Fundamentalisms" by Tariq Ali over and over, and it really is (so far) the best single book I've found for anyone who wants the non-rocket-science overview of what is really going on in the Middle East.

It covers the origins of Islam and its spread, Jerusalem and the crusades, the Ottoman empire, the schism between Sunni and Shia Islam and the place of women within the religion, Saudi Arabia and Wahhabism, the formation of Israel, Zionism, Palestine, Iran, Pakistan, Afghanistan, Indonesia, Bali, and 9/11.

I cannot recommend this highly enough - it sounds like a lot of heavy subjects, but it's split into neat chapters on each one, well written, easy to read, and a good balance of little historic titbits, quotes and stories.

It's utterly illuminating, and a very honest and straightforward picture of the situation in all of these countries. Fascinating stuff.

Afghanistan, Slam, Money, U2, and Waves

It feels like a random Friday, so this post is just what it says in the title - a random collection of Friday thoughts.

Firstly, on the subject of the previous post, there’s fairly hairy account on Counterpunch of how things are breaking down in Afghanistan. Check it out here. It’s not very promising.

I’d like to thank Mr Steven Scanlan for his very nice comment on the post regarding Slam @ The Arches. I spent a long time waiting to see those amazing nights captured in words, and after convinced myself that nobody else had done it, I did it myself. It sat on my computer for 2 years unfinished because I couldn’t get it right, and only late last year did I finally find the inspiration to finish it off and get it posted. It’s great to know that someone I don’t know remembers it just like I do. I’m not tripping, my memory is not playing tricks on me, I’m not glorifying it unnecessarily – it really was that good.

Economics. Mike Whitney (again on CP) has a very interesting article on the problems Eastern Europe may cause the world financial system. Equating the fall of the current economic system to a potential resurgence in fascism seems a little bit far-fetched, but stranger things have happened, and as one of my great musical and political heroes Mad Mike pointed out in his legendary Jockey Slut interview back in 1994, “Every time it gets tight over in Europe the nationalists want to come out and blame all the foreigners for all their problems”, so go figure. The BBC this morning has the news that there’s a €24.5 Billion rescue package for the banks in Eastern Europe. How far that will go in very tight credit markets when Whitney quotes sources as saying they’ll have to repay or roll over €400 Billion in debts this year, is another question.

U2 – now there’s a current issue. Firstly, because they have a new album about to drop. Secondly, because they moved all of their tax affairs as a band to The Netherlands in 2006, depriving Ireland of quite a lot of tax, and that’s a decision that’s coming under quite a bit of pressure as the financial downturn starts to bite. So anyway, the new album can be previewed in 60-second chunks on the Irish Times, and there’s a brief interview with them here. I can’t wait for the album – the sounds and production are always fascinating, and no one has a voice (or lyrics) like Bono. I mean, if you look back over their albums, back to The Joshua Tree and before – every one of them has probably 3 or 4 tracks that any other band would kill to have written just one of. And this continues album after album – just amazing. I’ll have to come back to this another time.

As for the tax thing, they are on a bit of a sticky one here. Having moved their tax affairs to The Netherlands around the time that Ireland announced that it was (quite rightly) putting a cap on the tax-free allowance for artists, they’ve come in for all sorts of ungodly stick for robbing their native country of the tax which their global enterprise could bring to Ireland. As Bono would explain it in the above interview, Ireland has been the net beneficiary of tax incentives in the last 10-20 years, as so many companies have based themselves here as a tax haven, and so his point is that there is a lot of hypocrisy in targeting U2 for moving to a more advantageous tax situation. I think that’s a bit weak personally. While the Irish may not criticise other companies for coming in to the country to set up in a favourable tax environment, people in the countries that these companies originate do criticise the movements of these companies, and in the US Obama is now specifically financially targeting companies that ‘offshore’ operations and jobs to reduce costs and save taxes. So if it’s right for the US to criticise companies offshoring jobs and facilities to Ireland, then it’s certainly right for Irish citizens to criticize Bono and the lads for their avoidance of Irish tax.

I’m also extremely disappointed to hear that the debate that Bono promised Dave Marsh on the value of celebrity activism is now not going to happen. Apparently, Bono pulled out with no explanation, which is gutting, as I was expecting a stout defence of celebrity activism, which would have been extremely interesting to hear. I’ve always been interested as to why Bono insists on hanging out with world leaders – he does have a constituency of sorts, but he seems to always offer the carrot end of his fame instead of the stick, which doesn’t make very good negotiating sense to me.

Anyway, if you want more Bono, I’d highly recommend the book “Bono on Bono: Conversations with Michka Assayas” – you can find it on Amazon here, although obviously I’d recommend supporting your small local non-chain bookshop. It’s full of fascinating thoughts on music, politics, authenticity and artistry, and is a brilliant and thought-provoking read. It also pretty much explains exactly why Bono does all the activist stuff that he does, if you read closely enough.

To finish off the day, here are some waves. Surfers search and search for the perfect 'peeling' wave. South Africa has probably the most famous one, in Jeffreys Bay, and while it may not go for quite as long, Thurso East on the North coast of Scotland is pretty damn close to perfect.

Here’s a video of it looking both perfect, and frighteningly big. Happy Friday!

Combat Outpost

The Guardian site is now carrying the latest video dispatch from John D McHugh in Afghanistan.

If you really want to know how things are going, then you can watch the video here.

This is what the US soldiers are facing on a daily basis. Grim, whatever you think of the politics of the situation - the moment where they a British Lee Enfield from 1902 in the mountains of Afghanistan really tells you everything you need to know about fighting in this country.

Andrew Maxwell

Last week I went to a 'proper' comedy gig for the first time in - well - possibly ever. One of my favourites from Irish TV show "The Panel", none other than Dubliner Andrew Maxwell.

Maxwell goes to see Hibs every time he's in Edinburgh, so he's quite clearly a man of vision (especially as he's from Dublin, which is full of more part-time carpet bagging bigot Celtic fans than any other location on the planet). Plus, he's got some quite socialist tendencies, so as a bit of a left-wing type (I'm in to controversial things like free healthcare to everyone at the point of delivery, large-scale cheap public transport, people who are earning vast amounts of money should be taxed heavily - radical stuff right?) - he's often in huge amounts of agreement with what I think.

He made one very interesting point during the gig, which is that while the Israeli Christmas slaughter was happening (my words, not his), RTE (the Irish state broadcaster) didn't want them talking about it. Despite the fact he wanted to talk about it, RTE preferred to edit anything out regarding that, and keep it on light and funny local stories.

Anyway, there's loads of his stuff on the web, including some funny stuff on Hibs and oil.

My favourite of the moment, is his rant about SUVs. Mabye you have to be in Dublin to grasp the full scale of the insanity, greed and reprehensible consumerism that has gripped Ireland and its capital for the last ten years - whatever, Maxwell's rant on The Panel mixed righteous fury about these futile status symbol pedestrian-killers, which some mindblowingly funny spluttering Irish twists on the English language.

"Red as the fucking Mars!"

Ayman al-Zawahiri - "The parting of Bush and the arrival of Obama"

Yesterday, a new audio recording purporting to be from Ayman al-Zawahiri was released, and subsequently circulated globally. Al-Zawahiri is the right-hand man to Osama bin Laden, and widely accepted to be the ideological top man in al-Qaeda.

The prevalent take on this in the western media so far is that the most significant part of the statement is that al-Zawahiri apparently called Barack Obama a "house Negro". Some of the blogs and comments on news articles regarding this redefine irony - there are US citizens seemingly furious that the second-in-command of al-Qaeda was racially denigrating president-elect Obama. It seems to me if you're going to be angry at al-Qaeda, you can find better reasons than the occasional racial slur!

The balanced and incisive Juan Cole has an interesting take here. Cole has several reflections, which I would summarise as follows:

• The Iraqi people never substantially supported al-Qaeda style Sunni extremism, and the actual upshot of the US winding down is that both the US and al-Qaeda have lost in Iraq - and that Iran are the big winners.

• Cole believes al-Zawahiri is terrified of Obama's popularity (particularly outside the US), and that al-Zawahiri fears that support in the Islamic world for anti-US terrorism will collapse with the different dynamic that the new president will bring.

From Cole's article:

Obama has the opportunity to be the most popular US president in the Middle East since Eisenhower. If he is wise, he will defeat al-Zawahiri not just by military means but by stealing away al-Zawahiri's own intended constituency. Obama is about building communities up; al-Zawahiri is about destroying them. If Obama can convince the Arab publics of this basic fact, he will win.

I'd agree that Obama needs to defeat al-Qaeda ideologically, rather than militarily - in fact, I'd argue it is the only possible way to win. There is no point in arresting or assassinating the key players in a terror organisation, if the inspiration they provide to potential terrorists worldwide remains intact. Plus, Obama has some very difficult choices to make with what military action to take, particularly in the unstable and nuclear-armed Pakistan, so it could be argued that leaving bin Laden and his friends intact, while severely toning down US foreign policy might be the best way to de-tooth al-Qaeda.

One way or another, I cannot see how the terror threat can be dealt with without the US getting Israel to get back in line, and that includes reasonably quickly reaching a fully independent Palestinian state, in a physically contiguous area. If Obama can deliver that, then not only would he have achieved the greatest step forward in peace and general human rights within my lifetime, but al-Qaeda would be ideologically sunk.

In any case, I went looking for the full text of the statement. Western news outlets tend to only carry very limited excerpts and quotes, and I'd rather read the full thing myself. I finally found a PDF version claiming to be the translation from the Arabic here.

So, in the style of a western news organisation, here are the quotes that I find interesting:

[addressing Barack Obama]

If you still want to be stubborn about America's failure in Afghanistan, then remember the fate of Bush and Pervez Musharraf, and the fate of the Soviets and British before them.

This is more than a little bit presumptive - Bush's "fate" was to see through his entire double-term, and the party swap that is in progress is probably more due to the current domestic economics of the US than anything else. As for Musharraf, he was ultimately unseated by a groundswell of public opinion within Pakistan due to his increasingly stubborn refusal to relinquish power.

The Soviets and British in Afghanistan is where al-Zawahiri starts to aim slightly more true. Both the Soviets and the British invaded Afghanistan, and both were ultimately sucked in to guerrilla warfare in the country that they could not hope to win. In fact, the US was largely responsible for the Russian invasion of Afghanistan - Zbigniew Brzezinski (the National Security Advisor to Jimmy Carter at the time) specifically wanted to goad the Russians into a long and unwinnable battle in Afghanistan, in order to give the USSR "their Vietnam". As has been pointed out in the past, a guerrilla war is never over until the guerrillas win.

Again to Obama:

You are neither facing individuals nor organisations, but are facing a Jihadi awakening and renaissance

This is an extensively debated point. Is the bin Laden threat still primarily from a centralised, command-and-control organisation (with trained and instructed fighters worldwide), or is al-Qaeda now an ideology which has penetrated worldwide, and which radicalised Muslim youth can use as their inspiration in perpetrating terror attacks as they see fit, without the knowledge of or instruction from the original al-Qaeda structures?

This goes to the heart of the threat facing western civilians. If the answer is the command-and-control structure, then one might imagine occasional, large, devastating set-piece terrorism might be the future, such as 9/11, Bali, the African embassy bombings, and so on. With this structure, effective counter-terrorism, intelligence and global cooperation might manage to put a lid on the current participants (not withstanding the fact that their place can always be taken by others.)

If however the threat from al-Qaeda is now largely ideologically "dispersed" rather than formally controlled, then the danger is much harder to contain, and terror attacks in western countries from previously unknown participants with no direct links or communication with al-Qaeda may occur. It's very, very hard to see how a threat of this sort can ever be contained adequately in a free society, unless you remove the desire of people to attack you in the first place.

Al-Zawahiri seems to be implying that the threat is more of a physically dispersed one, although whether this is current fact, or wishful thinking is a good question. It may well be the latter, as the next section (directed at Muslims worldwide) seems to be a call to arms:

America, the criminal, trespassing Crusader, continues to be the same as ever, so we must continue to harm it, in order for it to come to its senses.

Which brings us to the final passage, part of the end address which is (according to the statement) intended for the citizens of the US:

You incurred defeat and losses from the foolish actions of Bush and his gang, and at the same time, Shaykh Usama bin Laden (may Allah preserve him) sent you a message to withdraw from the lands of the Muslims and refrain from stealing their treasures and interfering in their affairs. So choose for yourself whatever you like, and bear the consequences of your choice, and as you judge, you will be judged.

This seems more aimed at the worldwide Muslim community to me than it does at the US. As Michael Scheuer (who was the creator and chief analyst in the CIA's "bin Laden" unit) pointed out in this fascinating interview in 1996, Bin Laden and al-Qaeda got quite a hard time in Islamic circles after 9/11, for several reasons.

Scheuer, with my italics:

Bin Laden was called on the carpet by his peers in the Islamic militant movement for three things. One was that he didn't give us enough warning. He's now addressed the American people on five separate occasions since 2002. So he's taken care of that one. He was also called on the carpet for not offering us a chance to convert to Islam. He's now done that three separate times, and Zawahiri has done it once. So they've covered that angle. The other thing they were taken to task for was that they didn't have the religious authority to kill as many Americans as they did. In the summer of 2003, he got a religious judgment from a very reputable Saudi cleric that he could use weapons of mass destruction, specifically nuclear weapons, to kill up to 10 million Americans.

So the end of this latest statement from al-Zawahiri could be seen in light of providing further warning to the US and others engaged in military action in countries such as Afghanistan and Iraq.

And I can't help but wonder every time I catch one of these "clearing the decks" type statements that contains a warning, or an offer of a truce - what are they clearing the decks for?

Obama are you watching?

Israel is blockading Gaza. To which they illegally control all entry and exit from.

Oxfam says Gaza is "facing disaster".

The Israeli government are blockading food from civilians for whom they are responsible under the Geneva Conventions.

Obama - are you watching?

Hitting the wall?

This is a particularly interesting press release on the site of the US federal reserve.

It seems to suggest that the US attempted to shift US $150bn in bonds today - offering people the opportunity to purchase US government securities - which as they are priced in dollars, effectively prop up the dollar itself and finance the US national debt. This isn't news, it is a regular happening.

So what is different in this press release? What's different is, of the $150bn on offer, only $12bn was sold.

This may be nothing, or I may have misunderstood seriously - but if the willingness of the world to fund the ongoing debt of the US by purchasing dollars is coming to an end, then it is time to batten down the hatches...