How should we read a statement by George Soros? Carefully.

March 13, 2014

George Soros If I could outguess George Soros I would be very clever and perhaps very rich. But I can offer a few observations about his history which may help interpret his recent comments about a new financial crisis

When George Soros speaks, the financial world listens. He has been speaking in the UK this week [March 2014] of the next financial crisis that he says will come about in part a consequence of weak financial leadership in Europe, and in particular in Germany.

He is particularly remembered for an enormous financial coup as the pound Sterling crashed at the time of Black Wednesday [16th September, 1992]. His success then was through a daring short-selling operation which can be admired for its daring or condemned for its contribution to a global economic crisis. Since then, his espousing of various social causes has led him to be pronounced ‘a dangerous leftist’ by Human Events’ readers, who in an online poll, recently voted him “the single most destructive leftist demagogue in the country.”

Soros is a big player

George is a capitalist superstar or a dangerous leftist supervillain. He may be speaking as an old man and a noted philanthropist concerned only to warn us that Europe is heading for yet more financial trouble. He may be speaking to avert or reduce such a crisis. He may be speaking with no personal agenda.

Or he may have the motives of a inveterate speculator

Or he may have the motives of a inveterate speculator, the gamester whose actions always designed to “tell” what he wants to reveal.

Or he may be plugging his new book

Or he may be plugging his new book, The Tragedy of the European Union, which was published this week, and which itself aligns with his libertarian political philosophy and his altruistic efforts.

Putting lipstick on a Rottweiler

To rephrase a term expressed by the American politician and folk philosopher Sarah Palin, you kin put lipstick on a Rottweiler but underneath it’s still a goddam Rotweiler .

Note to my students

I am not a supporter of either/or logic in assessing complex socio-economic issues. George Soros needs to be studied as a successful thought leader who shows consistency only in his skills of revealing what he wishes to reveal.


Barclays in a spin. Bob Diamond goes, Marcus Agius comes back

July 3, 2012


[Update] In twenty four hours, the LIBOR scandal at Barclays bank results in exit of Marcus Agius as Chairman. Then CEO Bob Diamond quits, and Mr Agius returns as Executive Chairman through the revolving door of fate

Yesterday LWD noted the departure of Mr Agius, and speculated on the future of Bob Diamond. Diamond Bob had gone out of his way to reassure significant financial individuals in and outside Barclays that the story would fade away leaving financial institutions relatively unscathed.

Within twenty four hours, the matter had become the centre of a political as well as a financial storm. It seems that the establishment of parliamentary enquiries to investigate the LIBOR affair had resulted in a decision by Mr Diamond to quit immediately [BBC’s financial sleuth Robert Peston, 8.30 am, July 3rd 2012, shortly after the announcement was made public]

I speculated yesterday that Mr Diamond was a financial asset whose value could fall as well as rise. The fall was more rapid than I could have imagined.

A storm brews

The story is escalating as quickly as any I have followed over many years. In 24 hours there have been debates in the House of Lords and House of Commons. http://www.bbc.co.uk/news/uk-politics-18702653. Those impacted include very senior civil servants, the head of the Bank of England, the fomer head of Barclays, John Varley, high-profile political figures such as George Osborne [who seems to have some part to play in any political story in the UK at present]. Oh, yes, and various financial executives at Barclays and elsewhere who found yesterday a good day for resigning their posts.

Update [6th July 2012]

The Diamond performance to the commons committee attracted widespread attention. The opinions varied from ’10 out of 10’ [for avoiding any ‘confessional’ statement that might be held against him ], to much lower ratings for failing to convince the committee of his integrity [laughter at his perceived obfuscations], and an error of judgment in trying to be too familiar [use of first names . The committee was also rated in some commentaries, but I couldn’t find any assessment that was positive.

I urge students of leadership to get hold of a full copy of proceedings. Also note that for MBA business presentations (not to mention for Newsnight’s Jeremy Paxman) the interviewee would certainly be more promptly advised to deal directly with a simple question (but that’s a bit more advanced than media training 101)


Papandreou, then Berlusconi reluctantly agree to go. Are we seeing a financial version of the Arab Spring?

November 9, 2011

The global financial crisis is claiming its victims as political leaders reluctantly agree to go. Revolution is in the air. Attempts to cling to power appear to be unable to resist the forces of change

It has been a week in which the G20 financial summit fell short of finding a road-map out of the global financial crisis. Yet the meeting triggered off radical changes to the regimes in the most vulnerable Nation States.

First it was Greece

Over the weekend [Nov 6th-7th 2011] it was Greece and Prime Minister George Papandreou.

Then Italy

Then, within days, Italy becomes part of the widening crisis. (Or maybe the wider crisis existed, and attention turns in Domino fashion to the next weakest market?). The once all-powerful Sylvio Berlusconi, survivor of fifty votes of no-confidence, faces one challenge too many.

The rise of the technocratic leader

One interesting theme is that the revolutions are not being led by those seeking to replace the defeated leaders. Rather, there is talk that the new leaders must by ‘technocrats’.

I am reading this to mean that old-style political figures have been ill-equipped to grasp the subtleties of the 21 Century global financial situation. The power-brokers are looking for a new kind of leader beyond the dynastic and partisan.

A rather obvious concern is that the departure of old-style dynastic figures appear to favour advocates of the prevailing financial system. in Greece and in Italy, commentators insist on the need for a technocrat with financial leadership experience to cope with the new circumstances. Elections are in the air.

The Arab Spring

It is tempting to draw an analogy with the so-called Arab Spring (Was it all kicking-off only a few short months ago?)

I do not chose to draw too close a parallel, but the mood for ‘regime change’ seems comparable, the changes themselves inevitable if unpredictable in their consequences. Maybe Angela Merkel is playing the role of NATO, imposing financial no-fly roles to support desired changes?


Ducks Water and Markets

May 10, 2010

We are told by the experts that financial markets don’t like uncertainties. This is about as useful and accurate as saying ducks don’t like water

Week follows week of international turmoil in financial markets. News unfolds rapidly. At the time of writing [10th May 2010] the EC announces a ginormous financial scheme hoping to avoid a domino effect induced by the collapse of the Greek economy. In the UK, we await the opening of the trading markets today, fearful of the impact of the yet-to-be-resolved outcome of last Thursday’s General Election.

This is a time which brings out the worse in commentators. The specific circumstances are avoided, as the experts are invited to explain what is happening. Waking up to such converations this morning, I heard the famous refrain: “Financial Markets don’t like uncertainties” Someone got up very early to share this with me.

Trouble is, the statement is a cop-out. You can translate it as: “Don’t ask me to say something useful about what’s going on. There’s too much of this uncertainty stuff around.” Maybe a few years ago it would have been a surprising thing for a pundit to explain that “markets don’t like uncertainties” to non-financial audiences. Now I expect my taxi-driver to explain what’s going on in such terms.

To trade or not to trade

And it’s not even as plonkingly right a concept as it appears. The one thing which would terrify financial traders would be absence of any uncertainty, that is to say the arrival of perfect information conditions on Earth. Trading relies on uncertainties to permit the exercise of judgement. ‘To trade or not to trade, that is the question’ and then secondary considerations: ‘to sell or not to sell’ and so on.

There is, however, an explanation of why financial folk talk about markets not liking uncertainties. What traders really like is ‘business as usual’ uncertainties within which trading permits big wins coupled with assorted ways of protecting the traders from being directly damaged by losses.

Technically, we should all get a bit more acquainted with the differences between risk management and uncertainties. The former operates with (relatively) trustworthy information. The nasty sort of uncertainties are those which are unanticipated in advance. Now if the financial experts would say a bit more about these concepts, their comments might be more valuable.

Image acknowledgement

Image from Wildfowl and Wetlands Trust


Leaders in the news: Winners and losers

October 13, 2008

Howard Schultz Starbucks

Howard Schultz Starbucks


In times of crisis, some leaders step forward, others are deemed to have failed. There have been examples of each, as the global financial crisis enters a new critical stage

Fred the Shred takes the fall

Pressure mounted on Sir Fred Goodwin to resign as chief executive of Royal Bank of Scotland (RBS) as the bank seeks to tap the Government’s £500 billion rescue fund. The Government is reluctant to a deal with RBS’s participation unless he relinquishes his role. Although he clung on tenaciously this has been a very bad week for Sir Fred. Another former city hero exits ignominiously.

Sir Fred Goodwin 0

Gordon Brown is no dead cat

The deeper the crisis, the more polls seem to swing towards Prime Minister Gordon Brown. David Cameron and George Osborne grudgingly offer support the government. Are we seeing a ‘dead cat bounce’, or is there life in the political career of Gordon Brown? He appears more relaxed in the last two weeks than he has been since taking over from Tony Blair as Prime Minister.

Brown 1, Cameron 0, Osborne 0

Boris Forces Resignation of Sir Ian Blair in Leadership Battle

The resignation of Sir Ian Blair [October 2nd 2008] develops into a political story. The BBC traced his turbulent career. Boris Johnson, incoming Mayor of London, is proving a hands-on leader willing to act forcefully. Sir Ian, under pressure on operational and personal fronts, was called into a ‘meeting without coffee’ by the Mayor before tending his resignation.

Boris 1 Blair 0

Obama and McCain Round 2

The second televised debate between the two candidates [October 7th 2008, Nashville, Tennessee] is as stage-managed as the first.
A key negative moment was was reported widely as

Jabbing his finger and spitting out “that one” instead of naming Barack Obama, John McCain showed an angry side

Polls suggest that Barack Obama is moving ahead.

Obama 1 McCain 0

Dick Fuld faces the music

Dick Fuld, controversial CEO of Lehmans has had a very bad few weeks. When ‘invited’ to testify before a hostile congressional committee following the crash of his company, he demonstrates his robust leadership style, denying wrong-doing or ethical weakness. He ticks the boxes for the callous Wall Street fat cat. Fuld very much the loser here.

Dick Fuld 0

Darling’s drastic rescue bid of the banks and maybe Gordon Brown

As The Times sees it
Chancellor Alistair Darling [October 8th 2008] launched a drastic rescue of Britain’s high street banks [to avoid] a cataclysmic failure of confidence by announcing a part-nationalisation plan with £50 billion of taxpayers’ money. Alistair Darling, like Gordon Brown has had a better week.

Alistair Darling 1

Starbucks, Schultz and the running taps

Howard Schultz, returned to the chief executive role at Starbucks earlier this year, faced with serious loss of froth in the business. Poor figures and closures continue. This week [October 8th 2008] the ‘running taps’ story threatens to sully the firm’s good environmental reputation.

Starbucks 0, Howard Schultz 0

And in the long run?

Not all these cats are dead. And, as we know, cats have seven lives.


David Cameron’s Conference Speech

October 1, 2008

David Cameron approached his annual moment of political opportunity with his approach severely restricted by yedsterday’s offer of support to the Government. Furthermore, his party’s lead in the polls had been eroded after Gordon Brown’s speech at the Labour Party conference a week earlier

The speech took place under remarkable and constraining conditions brought about by the financial and economic turmoil globally. In the UK, the main political parties had agreed a day earlier [September 30th] to cooperate to avoid the partisanship that had continued to block President Bush’s bail-out plan.

Overall impressions

I will stick to offering first impressions of a political outsider. I watched the BBC televised presentation, and reconstructed my jotted notes in what follows [with subsequent observations in parentheses]

Fifteen minutes in. Speech is low key (maybe medium key). [Cameron is able public performer, and this is no exception.[ A bit light on special sparkle, good [audience] rapport. Contrived staging, backdrop of team Cameron. Camera shot of Cameron with Osborne and William Hague. Three-headed creature from Hitch-hikers Guide [or was it Red Dwarf?]

Thirty minutes in. He’s covered the credit crisis and having to work together. [He offered specific conservative perspectives and managed to aspire to short-term collaboration and signal some conservative preferences. But the section was not presented more as a necessity than anything else, and it was less emotive than the broad flow of the speech].

Offered a great deal of in-house popularism. Technique is to draw heavily on a vivid emotional anecdote to carry through a broader policy point.

The wife who died of MRSA
The husband kicked to death
The businessman losing his business

Spent some time dealing with Brown’s jibe at his own novice-status. Argued why experience is not as important as vision and values to change. Audience appreciated the point that otherwise the country would have to go one electing Gordon

Offered pledges – hostages to fortune?

Referendum on Europe [a thrust at Labour’s flip-flopping on this issue]
Becoming “the party of the NHS”
Political perks will “all have to go”
Fixing the broken society

[Enough there] to permit a political debate in the future

emotional climax to long [65 minute] speech. Strong values of conservatives and the Great British Public. Just about carried it [climax]off.

First Reactions

Not a great speech, but remarkably well-presented under tricky circumstances.

Nick Robinson on BBC 1 immdiately afterwards thought David Cameron had invoked the spirit and words on Margaret Thatcher. He called it A Daily Mail speech, with echoes of the 1980s, signalling the party of change, and the leader in waiting. (But Robinson did not mention the affirmation in the speech that there is such a thing as society, contradicting the (in)famous and contrary claim attributed to Mrs Thatcher.

David Cameron had been signalling change and presented himself the catalyst for needed change in his party and the country.

Interestingly, the first comment from a party member leaving the hall was

“I was looking for stability. I was delighted”.

And that says more about the nature of charismatic leadership than about the speech I had been watching and listening to.


The Fate of The Scottish One: A Metaphor for Alex Salmond?

September 20, 2008
The first Scottish Numberplace

The first Scottish Numberplace

Scotland faces job losses in the wake of the tsunami in the world’s financial markets. Alex Salmond leaps into action. But the fate of a Scottish car number plate may be a salutary metaphor for the SNP and its leader

This will be remembered as the week as memorable of the Wall Street Crash in 1929. The upheavals in stock markets around the world were matched by the personal tragedies of countless individuals fearing job losses, pension and savings wipe-ups.

It was hardly worth trying to write a topical blog post, as the big issue moved on in the space of hours, from one story to the next.

One of the stories of the week was the takeover of HBOS by Lloyds TSB. Jobs in Edinburgh were under threat, as Scottish politicians and trade-union leaders were quick to point out.

Alex Salmond was among the most vociferous voices to be heard, as he denounced the bunch of spivs who had effectively stealing Scottish jobs.

A light-hearted diversion

A light-hearted diversion in the middle of the bleakest of weeks was news of the fate of another bit of Scotland’s heritage. S1, the first Scottish car number plate, was flogged off for around £400,000. By the English of course. By a bunch of spivs as Alex might have said.

The winning bidder from the company Bold Registrations, who declined to be named, agreed to pay £397,500, inclusive of buyer’s premium.
He said: “I believe that number plates in general are a good investment, even at this price.
“The registration number will remain in the UK and will be going on an old red Skoda which will be seen around the Midlands.”

I couldn’t help noting the irony of the old red Skoda.

Postscript:

As the week ended, a glimmer of hope reported in the Telegraph
Since Sunday two of the world’s biggest investment banks have collapsed while an emergency takeover had to be arranged for HBOS, Britain’s biggest mortgage and savings bank. The partial recovery came after the US government unveiled a rescue package to take on bad bank debts

Is this a dove bearing a sprig of Scottish heather?


AIG plumps for Willumstad: What took them so long?

July 14, 2008

Update

AIG came to the brink of disaaster in the credit crunch of September 2008. Its newly appointed leader Bob Willumstad may be just the sort of person to steer them out of the current crisis. But will he be given the opportunity?

Original post follows

Bob Willumstad at 62 seemed to have missed out on his dream of running a major corporation. Now he heads the troubled giant AIG. His track record is admirable. Which raises the question: what took appointment boards so long to pick him?

Robert Willumstad was one of the names in the hat in the leadership merry-go-round at City Group with Chuck Prince and Vikram Pandit. He then became part of AIG, another company with leadership difficulties, but still not in the top job.

The Economist

The Economist picks up the story

On June 15th [2008] Mr Willumstad was hastily installed as chief executive of AIG, following the forced resignation of Martin Sullivan after only three years at the helm. He comes with a pedigree few can match. He played a big part in assembling Citi, smoothing over difficult takeovers…But he was also good at the less glamorous stuff largely thanks to tight cost control.

He seems to have ruffled very few feathers along the way. Former colleagues put this down to a combination of unobtrusiveness and honesty. “He’s quiet but very effective,” says Jamie Dimon, chief executive of JPMorgan Chase, who worked alongside Mr Willumstad at Citi. “You get the truth with him. There’s no political agenda.”
Many Citibankers had hoped he would return to take the top job when Mr Prince resigned [November 2007 when]the board approached him but eventually plumped for Vikram Pandit. These qualities set the “quiet giant”, as the six-foot-three Mr Willumstad was once dubbed, in contrast to the blokeish Mr Sullivan and the imperious Mr Greenberg

What took them so long?

One possibility is that quiet competence is often trumped by the more visible characteristics and extraverted style associated with so-called charismatic leaders.

Leaderswedeserve has from time to time returned to the idea of the non-charismatic leader, modest and of fierce resolve. These features were considered to be under-appreciated in many successful leaders, who remained relatively invisible in the heroic accounts in the business press.

Willustad, the quiet giant, may be one more exemplar of the fifth level leader, (Jim Collins) who eventually succeeds, where more blokeish or imperious figures fail. If he does, he also illustrates how so often boards acquire the leaders they deserve.


Celebrity journalists as thought leaders: The case of Robert Peston

December 7, 2007

mark-day.jpg

The Australian journalist Mark Day argues that celebrity journalists today follow far earlier examples. We examine the cases of Mark Twain, Charles Dickens, and Winston Churchill. Parallels with Robert Peston’s role in the Northern Rock drama can be made

Mark Day is the doyen of Australian journalists. He recently raised concerns about the rise of the celebrity journalist, citing cases from Australia, from Rupert Murdoch’s father at Gallipoli to the notorious New York night club story which did the aspirant political leader Kevin Rudd no harm at all. Day suggests TV journalism is continuing the tradition of the celebrity journalist.

It was Mr Day’s reassuringly sage and bewhiskered visage which first grabbed my interest. This, I thought, is the face of someone who speaks with the wisdom of the ages. A role model more callow bloggers. Perhaps it was his headline: Journalists become the news.

Day has his say

Mark Day argues that journalists have always been tempted by celebrity as a route to career success. He cites the example of Keith Murdoch, father of Rupert, and war correspondent at Gallipoli, as well as confidant of the Australian Prime Minister Billy Hughes. Murdoch ’s capacity to become part of the story is famously illustrated in an incident in which he was charged with delivering a letter from Gallipoli to authorities in London. When ‘Intercepted and relieved of his letter’ he wrote his own extended version, handed it over, when it appeared to have had some influence on British understanding of the unfolding military disaster.

Another time, another land. He might have mentioned the rise of Winston Churchill, already famed as war correspondent, and by then heavily involved in the Gallipoli campaign.

We can stretch things even further in considering the merging of journalism and social comment. Take Charles Dickens, for example, who would have been a great TV personality born a century later.

In these enlightened times

Has much changed from the days of Dickens? Not a lot, according to Day. He gives various contemporary examples from political life in Australia. One interesting one is the incident in New York some months ago, involving the youthful Kevin Rudd, at the time a wannabe Prime Minister. The story was internationally covered.

According to The Daily Telegraph

KEVIN Rudd’s hopes of becoming Prime Minister have been rocked by a visit to a New York strip club where he was warned against inappropriate behaviour during a drunken night while representing Australia at the United Nations. Mr Rudd yesterday issued a statement to The Sunday Telegraph, confirming he went to the club. But he said he could not recall what happened at the night spot because he had “had too much to drink”.

Rudd’s embarrassment was short-lived. He went on to victory a few months later.

Day introduces a further twist to the tale suggesting that the incident which had occurred four years earlier, had been rather sleazily treated by the journalists, who had persuaded the notoriously high-minded Rudd to loosen up a bit. But that’s another story. He concludes that the journalist as part of the story is inevitable, and that blogging is an even more exaggerated process in which each blogger seeks to place themselves right at the heart of the story. I plead the Fifth on that one.

The campaigning journalist

Charles Dickens began his journalistic career reproducing the speeches in Parliament for his readership, a feat requiring phenomenal powers of recall. In the meanwhile, he was churning out hugely popular fictional tales which made up an outstanding social commentary of the times. Dickens as performing celebrity became even more the centre of his stories.

Then there was young Winston, whose exploits seem to have had some parallels with those of the first of the Murdoch dynasty, Keith. Churchill’s reports from the Boar war made him famous and wealthy. His fame outlasted his periodic bursts of affluence. But fame and wealth came from his creative tales in which we wrote himself as the central character. And what about Mark Twain, yet another itinerant journalist whose genius with words excused him from proximity with factual reality as he reported on his journeys?

These were early celebrity journalists. They were at times hugely influential. Another example this time from France, is Emile Zola in exposing the Drefus scandal, In this case, the author used his fame to help promote the story, rather than use the story to promote his fame.

Back to the Rock

All of which takes us back to the still smouldering case of Northern Rock. This appears to have acquired its own celebrity journalist in the shape of the BBC’s Robert Peston. It The story continues to run. Now the BBC is able to maintain a stream of exclusive scoops by interviewing someone right at the heart of the story, namely their very own Robert Peston.

Peston’s influence on events these has been mentioned in Parliament. An overview can be found in a newsletter within which the following quote summarizes the impact of Mr Peston’s journalistic activities

The following press release was issued as Update No. 5 on 18/10/2007: Press049_Northern_Rock_Value (mainly to try and stifle some inaccurate press comment), together with the following notes: Some of you may have seen Matt Ridley and Adam Applegarth responding to questions from the Treasury Select Committee on TV news on Tuesday. Not a lot new was learned from the session except that both the Chairman and the rest of the board had volunteered to resign if required. It was also clear from the evidence given, and comments by Robert Peston of the BBC later that evening on BBC TV, that the BBC announced the rescue by the Bank of England in advance of it being issued in a Regulatory News Announcement based on a leak from someone. I have so far heard three different versions of who leaked it so am not sure which is a rumour and which is the truth. But it would appear that this premature announcement stampeded the company into making the announcement and we know that it was not possibly as judiciously worded as it might have been – the end result was an unexpected rush of depositors to withdraw their cash.

Truth, rumours and Robert Peston

The thought expressed in the above had been nagging away as I followed the Northern Rock story. Clearly, The BBC’s Robert Peston was leading the pack. He must have been the envy of less well-connected political journalists around the land.

But how much is straight reporting, how much highly personalized story telling? He is clearly very much part of the story. Peston is doing no more than the heroic journalists from bygone days, who thrilled the public by not just witnessing the story, but by playing a starring role in it. Not so much communicators as creators.

Stop Press

I was about to publish this post when I heard of a story breaking, on BBC’s radio four, related by a familiar voice, that of Robert Peston. The story? A member of the third generation of Murdoch, young James, is making his mark as celebrity journalist. He becomes head of the Dynesty, and heir apparent.