The Daily Telegraph and Paid for Advertising

Peter Oborne has resigned from the Daily Telegraph because he has realised that the paper was under-cooking the HSBC story because of potential sacrificed advertising revenues.  In an interview, he chastises the Barclay brothers (owners of the Telegraph) for sacrificing journalistic integrity in order to preserve advertising revenues from HSBC (one of the UK's biggest marketing spenders).

Coming from a Telegraph journalist, a sudden pre-occupation with journalistic integrity a couple of years prior to retirement does seem a little rich, but you know, we can accept that. Similar to an elderly slave owner suddenly seeing the errors of his ways as time ticks by and his incapacity to sterilise his guilt, right wing hacks will be similarly struck by the poison they've been spreading their entire lives and take some steps to tear down the unholy edifice they've been building all these years.

Anyway, politics and hatred of The Daily Telegraph aside, what struck me was that most people in many countries now get their written news without paying for it at all; either through the internet or free newspapers.  Considering that services require some form of remuneration to support the individuals that provide said services, these 'free' sources of information have to be paid for.  Again, it's fairly common knowledge that the money that succours these generous journos comes from advertising.

The printed traditional press is suffering, people are reading the fucking freesheets (Standard, Metro, etc) more and more and getting their news from the internet from Bloomberg and idiot newspapers who give their content away for free.  The only way these media sources survive is through advertising.  Therefore, the likelihood that they'll do or say anything that upsets the large organisations that purchase much of their life giving advertising space is very slim. 

I would love to see what the Metro wrote about HSBC; perhaps another thrilling front page about Mcdonalds selling coffee for 49p a cup beat the story on to page 19, next to the full page Tesco advert for their new range of unsecured personal loans which replaced the coverage of their dire financial results.

If people dont pay for things, they wont get the quality they need.  If people pay for things without realising how, it has strange outcomes which make people feel uncomfortable but prevents them from understanding why and where that discomfort is coming from.

Maybe, in the same way Edward Snowden made people realise how Google is not actually 'free', this will help people to see where that discomfort is coming from with a little more clarity.

FX Brokerages

Interesting story about some of these brokers which went to the wall because of the Franc move on Thursday. What is ironic about this is that this may have killed them precisely because of the way these companies made money.

I caveat this is based on admittedly shaky knowledge of how these retail FX brokerage businesses worked and should be considered entirely based on hearsay and deduction, but the model as understood, was to offer huge leverage to clients, wipe their 'equity' out on some small volume based tick in the FX markets (while encouraging them to take long term positions based on research discussing 'exports' and 'non-farm payrolls'), take over their account, close it out with no real loss to the FX brokerage and pocket all the proceeds without real risk to the FX brokerage. This was possible because the 'spreads' (ie price between buy and sell) for these leveraged retail clients offered by the FX brokerages was far wider (and thus liable to their accounts being closed out) than the 'spreads' that the FX brokerages were able to get themselves with their use of the wholesale FX markets. They could take the 'maxed out' account, close it out in the market and pocket the spread.

This is what effectively killed them here, the limits were hit, they took over the accounts, found that even with the crap spreads they were offering their retail clients versus the wholesale market which the firm itself had access to, they still hadn't got anywhere near enough protection against a 25% intra-day move in a currency pair (which had shown low vol for months because of the cap) and then became exposed to the clients losses. Mostly you could go after the clients for their losses, but because of the model explained above, they couldn't because the entire model was built around closing out over-levered clients with no recourse (and taking the difference in the spreads offered when they closed out the account).

They probably had some funky VaR models which they were using to manage their risk in the overall book, because they would have had risk management, but clearly it wasn't working well enough, or it wasn't callibrated to foresee risk scenarios which according to the funky VaR models they used to manage their books, should only have happened once every 5 billion years. Or it wasn't factoring in what the clients were doing.  Maybe this could be an area of focus for the future given the new capital regime which disincentivises any regulated institution from taking any kind of risk on it's own balance sheet...

Maudlin machinations on Nationality

Living abroad and being British are two things that, given our past predeliction for setting off round the globe, should go hand in hand. British people, despite their intransigence and hostility to most things outside their immediate locality, have a long and distinguished track record of heading off round the world. Similarly, despite our aforementioned hostility to those things which are different, we've also been persistently changing our culture to accomodate a fascination with a broader world for the best part of two hundred and fifty years. Now having lived away from the UK for two years, it has been a fantastically interesting experience to observe the ways in which I and my fellow countrymen attempt to recreate a country that admittedly while it has many faults and which we all moan about, cannot be removed from our collective concious. It's almost like being part of some kind of cult, involving strange bland, unhealthy food and even stranger television programs with no potential of being accessible to anyone else on earth; consistently and mysteriously tapping at your pavlovian response node like a lab rat being stimulated by a button which reveals cheese. I would give a lot to be able to remove this nervous tic, but at the same time, I know that its a part of everything that makes people special and interesting to be around. It goes with a culture that is totally heterogenous but at the same time, homogenous. I say this insofar as, despite a lack of common accent, you can immediately identify a "British" person when speaking to them. This is not to say that you immediately strike up a witty conversation in the style of Evelyn Waugh, or even that you in anyway warm to the person in question. It is more like the realisation of a common affliction; "Oh fuck, you're one of them (and by them I mean us)..." The realisation comes quickly, the topics even quicker, the obsession with house prices, the discussion of educational attainment and standards, the shameless oneupmanship and the backhanded compliments, the food discussions, the entertainment observations, the references to utterly obscure art pieces and cultural figures. All of these form a non-exhaustive list of the common factors but there are many others, I can't list them all, if you're British and have lived away, you'll know them. Which is why juxtaposing this strange interaction ritual unique to the British with the behaviours of those from other countries produces an interesting isolation and sense of cultural inferiority. Maybe the role of English as the new 'Lingua Franca' of the modern world, which effectively gives you the benefit of virtually always dealing in your mother tongue but also, at the same time not having a language truly of your own to speak in. I think there is a strange paradox here in that native English speaking people continue to bastardise their own language in the vain hope of creating something that others can't listen to and which is unique to them. However, at the same time, the pressure for conformity which comes from speaking such a widely used language pushes them back to speaking in the venacular which was bestowed upon them. For every person adding new and strange additional words to the language, cutting short sounds and mispronouncing other words the collective pressure of our omnipresent mother tongue drives them back from whence they came. With other languages more variety and subtext seems possible. I guess there is no real point to this ambling monologue, other than to record for my own purposes my own feelings on this cold day in Zurich, in this two thousand and fiifteenth year of our lord, sipping whiskey and listening to a collection of music selected for me by a computer based on my own music tastes, which reveals my own maudlin nature having spent two years observing myself and everyone else from a Swiss perspective. I leave with the words of Arcade Fire singer Régine Chassagne; "I started singing and they told me to stop, Quit these pretentious things and just punch the clock, Sometimes it feels as though the world is so small, Will we ever get away from the sprawl"

Middle Men

Middle Men is a film starring Luke Wilson, it's about the porn industry in the US and how a group of people made a very lucrative business out of setting up and managing a payments network that facilitated subscribers to the various websites.

Good things about the film:

It rips along at a good pace.
It's a reasonably interesting topic.
James Caan is effective and hilariously evil.

Bad things about the film:

Luke Wilson's terrible Ray Liotta style voiceover
Luke Wilson's relationship with his wife, which makes no sense and is one of the least believable I've ever seen.
Questionable moralising throughout.

This is a strange film that got released at about three cinemas worldwide so far as I can tell. It's significantly better than most of the dross on the Sky website so is definitely worth a watch if you've got nothing better to do. There are also loads of cameos that are worth watching out for.

Having a punt

Gambling is a strange affliction. As many bookies have previously noted, the most lucrative customers are usually the desperate, inebriated, stupid or a combination of those three. As far back as I can remember its been something in the UK which carries a very small amount of negative social connotation in comparison to the stigma attached to it in other countries, both western and eastern.

Gambling in the UK is associated with elderly gentlemen having a harmless flutter on a horse race on a saturday, discussing the likely outcome with their friends over a pint and then ambling back for their dinner, having a punt on the grand national based on the name of the horse or possibly at it's most scientific, betting on the likely champions for a forthcoming football season.

This collective lack of awareness as to the dangers of gambling has likely left the UK ripe for the tidal wave of gambling that has hit the UK in the last five years. Anyone who has sat through halftime during a football match will know the vast number of companies seeking to encourage people to follow their convictions and take a punt on the most insignificant of factors. Suddenly had a brainwave as to the number of corners that are going to be awarded to Tranmere? Betfred can offer you 7-4 on their being 5 in the first 17 minutes of the first half and look, Ray Winstone's disembodied head is offering 19/3 on Colchester beating Darlington 2-1! The desire to bet grows stronger.

It doesn't stop there either, with Foxy Bingo allowing you to experience the thrill of someone shouting numbers at you without you having to socialise with other people or, for that matter, putting any clothes on. Coupled with Ladbrokes casino offering all the fun of a casino without the pain of drinking or having to actually leave the house.

You would think that this might have curtailed the growth of physical gambling venues, but there are more bookmakers and casinos than ever.

Either, we as a country are developing a serious gambling habit or there are a lot of bookies that are going to be losing money over the next few years as the advertising budgets fail to drag punters to the website or venue.

Given we have seen very little of the latter I suspect the former. Given the propensity of Britons to hide these things, are we suffering an affliction that we do not wish to uncover for fear of revealing the seriousness with which it has gripped us?

I'm fucked if I know but I do feel strongly that there will be 18 throw-ins in Shrewsbury vs Carlisle. Where's that credit card?

Thanks George

The London Evening Standard, vying for worst newspaper of all time honours with The Metro, told me today as I was reading someone elses paper on the Jubilee line that 'London accepts George's cuts'.

I would just like to let George know that at least one person in London, nay four, do not accept his cuts and will be doing everything humanly possible to depose this cabal of Eton chums before they do anymore damage to the country.

Posted without comment: the BNP

If you needed evidence that people who support the BNP are all, err, 'special', look no further.

It's not the immigrants fault that you borrowed £10,00 from Ocean Finance and spent it all on Wink Bingo. It's also not their fault that you don't have any friends. It's because you're a cunt.

"The BNP are the only party standing up for MY culture. ALL the others are vile culture deniers that deny me a cultural heritage and who are involved in a deliberate programme of ethnocide against my ethnic origins here in my own country of birth and cultural homeland."

Hmmm. I want to desecrate your cultural heritage by banning Bullseye repeats on Challenge TV.

"what a disgrace!!! bnp supporters have their kids took off them grow up!!!! freedom of speech and opinion is what we have which is what my husband fights for! the queen has failed us all as have the government! trrops without proper equipment fighting for u country maam!! loosing their lives while fat mps make greedy claims and you penny pinch with kit! single mothers redundant people and elderly that need the states help but their is none!!!! and why is there no help? because the budget is used up on immigrants they have more say and their feelings are taken into account more than the tax payer! we as tax payers have a right to our own opinions get the immigrants out then there will be enough money for the british people! if we want to get into another country we have to prove we can provide and contribute to their ecomomy but here every one comes cuz they can free load!!!!!!! british people stand up for ur rights stand up for ur opinions and make the right choice its up to us now as her majasty and the government have failed! BNP have my vote!!!!!!!"

Indeed. Your husbands in the army eh? Bet it riles you right up when he comes home talking about the beauties he's seen abroad.

"Immigration should been capped
Ministers should have been arrested
Banker's should have been arrested
the list goes on and on.

One final point it is a shame the Queen did not become more vocal when some of our leaders were found to be on the take.

We are scared to be white anymore!"

Terrified. My fucking duck island cost me a fucking fortune and it got raided by credit crunch immigints.