Don't Be Jealous

Each  morning this week I’m greeted with a Snapchat from one of the kids from HK. He’s there for the Sevens. Don’t ask how a student can afford to be in HK for the Sevens because I’d also like to know and I’d also like to be there.

pick up point

pick up point

I haven’t been to HK since the eighties when I enjoyed two weeks acclimatisation there prior to going to Brunei for a Jungle Warfare Instructors course. We thought we were on a jolly for two weeks; the Army didn't. We spent the two weeks doing early morning runs and PT on the beach and long tabs in the New Territories by day. We had just one day and night off at the end and we made full and comprehensive use of it. As I said to the boy before he left, “whatever you do son, don’t go near Hot Lips bar in Kowloon.”

Alas, I discover it is no more. Like many things it is consigned to history’s rubbish bin but I did find a description of Hot Lips on the "Going Downhill," blog which sounds pretty much like an echo of my own! Anyway, Going Downhill  gives  Hot Lips, and HK in the eighties, a pretty good description which some of you who were there might enjoy.

"Gone is the Hot Lips Bar romanticized by an article in the New Yorker magazine referring to reminiscences of the movie “World of Suzie Wong”. One executive guest, I took around to see the city, wanted to go there. Soon after we entered the Hot Lips, we sat down in a large booth, the required escorts came and sat down next to us, the obligatory watered down drinks came and we of course we gladly paid. The escorts were definitely not comparable to Susie as their glow of youth had now to be applied with brushes, but they were reasonably attractive and had good teeth."

As it happened, when there we moved on to a bar in Cameron Road, the name of which was forgotten about 5 minuteness after walking into it, but I seem to recall spending a solid shift in there with occasion forays to place next door for a rejuvenating sauna. We started chatting to an American there who was revisiting the places he'd been on R&R from Vietnam. I obviously wasn't in Vietnam but I'd kind of like to do a "bars of my youth," trip...... or would I just be left sad and disappointed? ...... probably.


Old market hands always have half an eye on EM bonds and currencies. It’s there that fires often start. That’s a concern when we look at the chart above.

In blue we see a basket of 20 EM currencies which has slumped to a record relative to the MSCI Emerging Markets Index. Currencies have fallen faster than equities as risk appetite for riskier assets weakens and the USD strengthens.. When the two moved out of step in October 2007 and January 2011, shares slid 66 % and 28% respectively, within a year or less.

Happy Days!

Remind me again, why is everyone whinging about French rugby.......... looks in great nick to me.

Happy Friday and it's off to Headquarters tomorrow for the France match. I'm so excited I could scream like a little girl with her fingers trapped in a car door. Bit pathetic really for a middle aged man but there we have it. The recurring joy of three pints of Guinness before and after a game shared with 82,000 like minded souls is a joy to cherish and one that remains undimmed, unlike most other things in my life.

Of course the odd stick is thrown into the spokes but we never quite fall off. Twickenham itself doesn't help with its ridiculous DJ prompting, ersatz piped singing and fireworks before kick off which is all as banal as it is unnecessary. Just leave the crowd be and the rugby will take care of the atmosphere. The growing "Engurland," element in the crowd is contemptible and so far resisting all attempts at retraining but we'll get there. Other gripes include the £1 deposit for a beer glass which effectively has just increased the queues and people who hold up queues even more when they pay for a beer with cards, "no, go away unwashed student person.... we don't use cards for a beer," and the loud mouthed Welshman that I always seem to have sitting behind me, wherever I am in the stadium, giving me a running commentary. 

I was going to add to this some negative comments about the "kicking" game which is in vogue this year. I find it as irritating now as I did when Jonathan Webb used to hoof the ball down the park in the late eighties / early nineties in a two man game of aerial ping pong. I was going to say these things come in cycles. Actually, having taken a cursory look at the stats, I would have been talking drivel which, is not at all unusual. 

With thanks to, we discover that in the England game, Ireland kicked the ball 38 times. Since 2009, a sample of 99 matches, we also see that a total of 38 kicks is the 21st highest in that period and the same number that England recorded against Wales last year. While there has been more talk on the subject the actual number of kicks in the games is pretty consistent. You can read more about the geeky stats at rugby world, (games catching up with American Football in the statistician department). I wanted though, to make a very simple point. Much sports media attention, and after match pub chat has focused throughout the tournament on the use of kicks from both an attacking and defensive perspective. There is just one wee, incy, wincy flaw in this Northern Hemisphere introspection.

Luke Morahan against the Lions in 2013; "they keep giving me the ball boss"

That would be the Southern Hemisphere currently licking their lips at the prospect of all these high balls raining down on them, gifting possession. 

Philippe Saint-Andre - taking it all on the chin at the moment but for years had us on the edge of our seats.... for all the wrong reasons!

I also wanted to just mention the French who have been in a world of pain and confusion in recent years. Some of the best and most memorable rugby I've ever watched has been with Les Bleus as it has for us all, (France v NZ 1999 at Twickenham, best match I've ever witnessed). Obviously, England fans know all about pain and confusion so I wanted to tip my hat to Philippe Saint-Andre who, rightly or wrongly, is enduring the worst of it and his 1991 try against England, voted in England's centenary year, 2009, the best try ever scored against us at Twickenham. 

Where The Bodies Are Buried, (The New Yorker magazine piece)

The brutal story of Jean McConnville, widow and mother of ten who was abducted and murdered by the Provisionals as a suspected "tout," in Dec 1972 will be remembered by most. One of "the Disappeared," her body was eventually discovered in 2003 by a dog walker.

This well written piece in the New Yorker by Patrick Radden Keefe is of interest to those who remember such incidents or who are students of the Troubles.

Happy St Patricks Day by the way.

Markets; Beware Sharks

If you invest in, work in, regulate or comment on markets you should watch the video above. If by chance you were ambling along in life thinking that those who should know better learn from their mistakes then you're not thinking.

We find ourselves again at or near the peak of a market cycle in which bubbles have been allowed to grow and mature. The end game will be every bit as ugly, if not more so, than those we've seen before.

We are about to see a series of cycle turns occur simultaneously over the next 30 trading days, which include a Fibonacci Cluster turn window with 10 observations. Within this 30 trading day period are a number of very unusual astrological events, which can affect markets. In the past, I have pointed out that major trend turns often come around the spring equinox, which this year arrives within the above Fibonacci Cluster, on March 20th, 2015.

Within this cluster turn period,  we also have a rare Total Solar eclipse (also on March 20th, 2015), the first day of the Hebrew calendar, (Nissan 1, evening also on March 20th), and a New Moon on March 20th. March 20th is also a quadruple witching hour on Wall Street.

Also within this Fibonacci cluster turn period, on April 1st, 2015 is a phi mate turn date, and on April 4th we see a Bradley model turn date, which is also Passover, and also has a Full Moon - not just any Full Moon, but a Blood Moon, the third of four in the 2014-2015 tetrad, a very rare event, that has the additional extremely rare occurrence that all four of these Blood Moons fall on the Hebrew Holy days of Passover and the Feast of Tabernacles (Genesis 1:14). Tell me none of this matters. 

For those who care, 

US economic surprises are at their lowest since 2009. On Friday the Atlanta Fed lowered its Q1 GDPNow forecast to 0.,6% from 1.2%. Investment Bank forecasts are way off the beat here.

Source; US Census Bureau; the blue mark indicates the level when Lehman happened. The uptick is not good.

Source; US Census Bureau; the blue mark indicates the level when Lehman happened. The uptick is not good.

Retail sales, wholesale sales and rail traffic are all at multiyear recessionary lows while the wholesale inventories to sales ratio is at levels which usually spark an equity correction. In fact, we haven’t seen some of this data sink to these levels since Lehman. Earnings estimates point to a 4.9% decline in Q1 which is the largest drop since 2009, yet the market then anticipates a dramatic recovery. Insider selling meanwhile has leapt to warning levels. With this backdrop the Fed’s response will of course be closely watched with many fingers on hair triggers. If they play safe and delay rate rises to start later than expected a period of market turmoil will follow.

The reason the dollar is so strong is quite simply because the US is in better shape than is either Europe, China or Japan and that’s not saying very much. Japan has become one big old peoples home and is currently, in financial terms, eating itself with the only JGB bid coming from the BoJ and public debt at 240% of GDP. Just to orientate you, 40% of tax recepits go on interest on public debt with the 10 year yield at 0.4%. Interest rates at normal levels would absorb all tax receipts and lead to a brutal tax burden on the remaining workforce that hasn’t yet retired. There are words to describe Japans situation, professional courtesy precludes their use here. Europe is mired in centralist socialism and China has just gone through an epic and badly handled credit boom.

The madness in Europe speaks for itself. The ECB is now literally destroying the Euro in a disastrous quest to restart economic growth by monetising $1.2 trillion of mostly European government debt. But Europe’s stagnation is not due to  insufficient private sector borrowing or interest rates that discourage it. The problem is a state sector that has reached nearly 50% of GDP and is thereby smothering entrepreneurs and investment everywhere on the continent. It also  means a public debt burden so high that prohibitive levels of taxation are unavoidable. Stated differently, Europe’s economic growth problem is structural and was the result of statist policies over many decades.  The only thing Draghi will accomplish with his massive bond buying campaign is to drive the Euro to par and below; and enable Europe’s government, all of which can now borrow long-term money at 1% or less, to kick the can down the road, thereby insuring that Europe’s eventual day of fiscal reckoning will be oh so cataclysmic.

 All of these will experience financial disorder and turmoil at some point but for now, let’s take a quick look at just one of those, China. I’m a long time China bear in that I’ve never bought into the “China will save the world,” view that some have promulgated over recent years. Yes, China has kept pricing low and created demand for exports but actually, it takes a very long time to transform an economy and China now is running straight into problems resulting from its credit boom.

While analysts have been lowering Chinese growth estimates those estimates are coming down from a very high level. Current estimates of 7% growth are still too optimistic. Is China turning into Japan? That’s the new topic. Chinese debt stands at $30 Trillion, up $9 trillion since 2008 and debt is 200-300% of GDP counting Shadow Banks.  If the average interest rate is 7% (banks 6% shadow banks 10%), the economy would need to grow 21% in real terms to service the debt and that’s not happening.

Since that cannot happen, banks cannot make loans without injections from PBOC. A fundamental problem is 100% of new credit goes to rollovers. This creates a Zombie economy effect with no credit demand. Steel demand is down, electricity is down, cement demand is down and growth is likely to be sub-zero this quarter. The economy is not growing.

 Moreover, there is massive overcapacity in petrochemicals, construction machinery, steel, cement, aluminium, and housing. The housing excess is extreme with 70 million units of new housing in the pipeline. It will take years of growth to fill capacity.

Aluminium official said privately debt Is $1 trillion, profit 20 billion. Local governments force mills to open because smelters cannot make payments, banks have NPLs. Smelters are capital, not labour intensive.

 The  consumer sector is tracking close to 0% growth as well, average days of clothing inventory is 174 days, electronics 123 days. Consumer companies on the China exchange decline in gross revenue is 2% for the year, 6% third quarter.

 QE3 created a flow of speculative money into China. That tap is shut off and capital flight is accelerating and is a growing problem. Policy now is not about jobs but about keeping money flowing and all capital is used to avoid defaults. We may therefore happily anticipate more defaults, a substantial devaluation, more anti-corruption raids, (especially in financial services), and a clamping down of foreign influence. The consequent demand shock will continue to ripple out. Be prepared not to be surprised by China and if you have money in there I’d mostly be getting it out.

 As China comes closer to a crash landing, the China-dependent EM economies are rapidly faltering. Brazil will suffer sequential years of GDP decline for the first time since 1930-1931.  In fact the China-led global commodities and industrial production boom is cooling so fast that global CapEx in mining and energy, materials processing, manufacturing and shipping is on the verge of a huge downward correction. That will also hit the high end machinery and engineering exporters like Germany and the US, creating a further negative loop in the gathering deflationary crisis.

These ricocheting impacts from the China implosion will drive the dollar still higher. That’s because Chinese companies have borrowed something like $1.5 trillion in external dollar markets, and the EM economies which boomed from the China trade also borrowed trillions in dollar markets, owing to the cheap dollar interest rates manufactured by the Fed, and the global scramble for “yield”  by dollar based money managers.

The flood of cheap dollar based capital which flowed into China and the EM appeared to fuel economic miracles in countries like Indonesia, Brazil and Turkey. Unfortunately, the financial boomerang is flying back at them at devastating speed.  As China and the EM struggle against global deflation, their economies are faltering and exchange rates are sinking. Accordingly, they are desperately trying to hedge their immense dollar exposures, a process which drives the USD steadily higher.

There is a message here in it’s the most important I can see. That is, a soaring dollar is not good on any level and it is certainly not reflecting stability. Rather, because other regions are in a bigger mess than is the US the rising dollar is a red flag which is screaming that instability is hurtling down the track toward us.


Ms Karaki; Black Belt in Putting You In Your Place

This is a viral video of Rima Karaki, a Lebanese lady who specialises in putting opinionated and self absorbed men in their place. She's obviously been under instruction from Mrs Flashbang. Now, aren't the BBC looking for a new producer to keep you-know-who in his place if he returns from suspension? Don't thank me, I'm here to help.

Salmond Crosses the Line

VC's of Wellington College

These pages are full of instances of people speaking before engaging their brains, me included. Alex Salmond though crossed the line yesterday when he said, in referring to David Cameron and the "debate" debate,  “He should have been called to account last year and should be called to account this year. Like most posh boys, given half a chance, he’ll run away from a fight."

Just for reference Mr Salmond, below you can see the number of boys on the Roll of Honour for the Great War from each of the following schools,

  • Eton 1157
  • Marlborough 733
  • Wellington 707
  • Charterhouse 687
  • Rugby 686
  • Cheltenham 675
  • Harrow 644
  • George Watson's 605
  • Dulwich 506
  • Winchester 505
  • St Paul's 490
  • Glasgow High 478
  • Malvern 457
  • Uppingham 451
  • Tonbridge 415

Top Gear; Three Men & A Babe

Three middle aged blokes doing bloke things in a bloke manner

Back in the nineties I used to marvel at how sober suited American business on trips to the UK and Europe would immediately go “off piste,” when it came to the après. They drank, smoked and flirted way more than they would ever do at home. While that may be true of many men on business travel, as a group they simply seemed more enthusiastic than did any other because some said, “they got to be guys again.”

American Bloke

That is, at home under a suffocating thought police in the work place and tight domestic reins they could finally drink more than two beers and enjoy a packet of Malboro or a cigar without looking over their shoulder.

The suffocating  thought control has of course, over the years, infected our own society and this perhaps explains some of the joy and popularity of Top Gear. Three middle aged blokes doing bloke things in a bloke manner without regard to any pronouncements from health or transport Quango’s. The audience, from schoolboys to middle aged men take solace in life beyond their own and its become Sunday night escapism for many, most of whom have only a passing knowledge of cars and beyond a lottery win, no chance of driving most of those on the show.

British Bloke

After the latest storm in a teacup, (an apology, a handshake and a beer is all that was required to calm things down here), the shows future is in question. The odd thing is, most of the 700,000 who have now signed the petition to reinstate Clarkson would be include the many who have been complaining about the stale format and scripted and contrived adventures on the show in recent years.

Who is to say this situation isn't just as contrived? Are we seriously asking is Clarkson a bloke or a Diva? After all, the publicity is global and they've got every media organisation by the nose. Viewing numbers will rocket when they have milked this and finally do the apology, handshake and beer thing.

Jodie Kidd from the Classic Car Show and Sabine Schmitz from the German Top Gear

Competition of course is encroaching. Jodie Kidd on the Classic Car Show is somewhat easier on the eye than Big J so a media frenzy over a minor tiff is a cheap way of maintaining global dominance. In their shoes, I’d sort out the issue today, get Clarkson back on board while telling him not to be a big girl Diva, (if indeed he was), and just for extra spice hire Sabine Schmitz making a team of four........... Three Men & A Babe. Job jobbed, move on. Oh and Jeremy, or Punchy Clarkson as we affectionately know you, if you have to practise stick to Piers; no one complains when you do that. 

Tales from the Lines; Whisky Galore 2

Listening to Norman Wisdom on Desert Island discs, (recorded in 2001) the other day, I was struck when he said his six years in the Army in India were the happiest and most carefree of his life. That was true for many of us and some of the experiences, well, you just couldn't make them up…… 

Way back when, well; 1974 in fact was the year of the protestant workers strike against the Sunningdale agreement in Ulster. They were turbulent times. A million workers went on strike and the Province very quickly ran out of foodstuffs, fuel supplies, and even more drastically, heaven forbid; booze. Spirits were still plentiful but beers and lagers, draught or cans/bottles quickly disappeared from pubs and clubs and more importantly, from the soldiers 'Choggi-Wallahs,' (the equivalent of a roadside burger van inside the security bases in Northern Ireland run by Pakistani gentlemen under very trying conditions but who served the soldiers needs at all hours). Here then, is a story from those days of the strike and the resultant drought, passed on by a friend from the Pipes & Drums of the Royal Highland Fusiliers and participant in events.  

 “This would test resolve to the limit as Regiments throughout the Province reported a massive rise in church attendance, as thirsty squaddies sang their hearts out in the hope of receiving a wee wafer and a glug of wine. Our very own Jock Regiment, (1 RHF) felt the "drouth" more than others, and a bunch of "Blue-noses" from the 'Soo-side' changed their name from the Thornliebank True Blues to the "Thornliebank Temperance Tank-Rule Loyals" 

The lack of public services, especially rubbish removal was causing problems in the security bases, and the CQMS's (Company Quarter Master Sergeant), had to find ways to sort out the problem. Many things were tried but proved to be of no use until someone decided that 'incinerating' the rubbish in a skip would quickly get rid of the problem. Our support company CQMS soon became a 'dab' hand at the 'Towering Inferno' lark using keroscene to jolly things along, until one day, he took his duties to new heights.

 The CQMS was going about his business, standing by watching our rubbish going up in smoke. Our foot patrols were out and about our area chatting to the goodies and the baddies, just letting everyone know that we were there, and our mobile patrols were doing their thing further afield, mainly ’snap’ VCP’s between Woodburn and Twinbrook.

With the rubbish well ablaze in the skip there he was, standing by, perhaps adding a few pieces of cardboard here and there, when…………”BOOM!” “Whit the fu?!” First thoughts were that we were under RPG or mortar attack and everyone stood to. Now, just after the explosion, there was a period of complete silence. No shouting, no running about like headless chickens, just complete silence. Then it started, slowly at first; Clang!....Clang!.... Clang!... Clangety –Boing!-Boing! Kerplunckety.. Clang! As, from the sky there fell all around the base, Stewartstown road, Blacks Road and the homes across from our base, hundreds of empty beer cans.  I kid you not, the whole area around our base was littered with empty cans. Long Life lager, Tennents Lager, McEwans beer and lager, Carlsberg, Tuberg and many others. No-one was hurt, but remember, the whole province was dry and had been for many weeks.

Where did we get the booze? We kept that to ourselves until we were leaving (the P&Ds had to leave early for KAPE tour), then we passed the location on to the ‘Chunkies’ (Assault Pioneers), but the Mortars had eventually ‘found’ our source themselves. I will never say where it was, although it was 40 years ago. Things did go ‘quiet’ on the ‘booze,’ run for a few days but thirst became a priority again after nothing was found in any of our accommodation blocks (but no one could ‘search’ the wee “Tea stop” I had right across from our base). I had the back door key to the house, to use at any time day or night. So there you have it , yes, we were ‘dry’ after the “Big Bang!” but only for a couple of days. 

CONTACT! Wait out!

“Hello zero, this is 55c CONTACT Blacks Road wait out!”
“Hello zero, this is 55c, we are being bombarded with missiles from the sky over!”
“Hello 55c, This is zero, we seem to be under attack also, take cover, and go firm where you are, over”
“Zero, this is 55c Wilco, out”

Ops officer shouts for CSM. “Sergeant Major, where is all that smoke coming from?”
CSM: It is coming from our ‘rubbish’ skip sir”
Ops Offr: “Why is our rubbish skip on fire Sergeant Major?”
CSM: “Today is the day the colour sergeant ‘incinerates’ our rubbish sir” Due to the workers strike, we do not get our rubbish uplifted, so the CQMS just, sort of, sets it on fire.”

OC: Sergeant Major, we have never had this problem before, so why now?”
CSM: “Once we put the fire out sir, we found the remains of a Calor gas cylinder. I know the troops were told not to put them in the skip, whether they were empty or not, but someone slipped up this time.”

OC: “Er sergeant major, where do you think all those empty beer cans came from?”
CSM: “I don’t know sir, but I will be having words with our ‘choggi-wallah’ ASAP sir”.

55c: “Hello zero, this is 55c, things have gone quiet out here and we only have one injury, sustained when one of my section thought he would ‘show off’ to the local kids, by trying to ‘head’ one of the empty beer cans as it dropped from the sky, but unfortunately for him, it was not an empty can, someone had mistakenly thrown away a ‘full’ can. Is it OK to RTB?”

Zero: “55c, return to base now and after ‘clearing’ your weapons, report to the CQMS stores where you will collect brushes and shovels and help clean up our part of “Andytown!”

55c: (without transmitting) “Clean up Andytown, fur fexsake the only thing that would clean up that shithole would be an A-10 Tomcat or a B-52 dropping bucket loads of Napalm!”
“Right lads, after we finish this ‘clean up job’ report to my room for a wee ‘swally!”

“Yeehaw, let’s hear it for 55 Charlie”……….”Cheers”..….psssshhhtttt (that is the sound of a cool can of lager preparing to disappear.)   

I often wondered what the RHF NIREP (daily Battalion report), would have read like up at Brigade HQ in Lisburn. I can just see the Brigade commander chatting to the Brigade Ops Officer. "Clarence dear boy, what is this nonsense from the "Jocks" in Andersontown?" "The company based at Woodburn Camp Belfast, came under attack from 'Airborne' frigging BEER cans, are you having a laugh Clarence?" Anyway, how come when the whole province is 'gasping' for some light refreshment, the only people with access to any booze are some musical "Bootlegging" Jocks!" "But sir........!"......."Never mind the 'buts' Clarence, get your backside up to Andytown and source their 'supply', I am fed up at "Mess Nights" with the PMC ringing the bell, and all we can frigging pass is bloody MILK!"’’


The Defence debate rumbles on and it is heartening that after a generation of cuts some members of the House and senior officers are standing up to state the case for steadiness in the Defence budget. Whether anyone is listening is another question. The Prime Minister apparently said this to LBC when he was asked about the complaints from senior figures, ‘Obviously, they have their own book to talk – sometimes quite literally a book to talk – and sometimes they just want to make their views known,’ and former Defence Secretary now Foreign Secretary Phillip Hammond’s reported quote to Tory MP’s “there are no votes in Defence,” is nothing but disgraceful. 

Without going over much travelled ground about new and growing threats to our security may I just ponder on one thing, for today at least. 

n 1914 many people expected war with Germany but most assumed it would be at sea. That left most of them untroubled given the Fleet was twice the size of any other two navies at the time combined. The pesky Kaiser had other ideas and soon the Expeditionary Force under Sir John French, a small well trained and well led force of professional soldiers 100,000 strong was dispatched to France. 

The Kaiser wasn’t at all happy about this insolent move and regarded it as a 'treacherous' decision by Britain to go to war against Germany. In fact, he issued an order that Sir John's 'contemptible' little army be defeated forthwith.  

Army Order Issued by Emperor William II, 19 August 1914

It is my Royal and Imperial command that you concentrate your energies, for the immediate present, upon one single purpose, and that is that you address all your skill and all the valour of my soldiers to exterminate first the treacherous English and walk over General French's contemptible little army. Headquarters, Aix-la-Chapelle 

Unfortunately, that is exactly what they did. By the end of November 1914 the original BEF had ceased to exist and most of the original 100,000 were casualties, exhausted and overwhelmed.

The pre war British Army was equipped, trained and experienced in expeditionary warfare throughout the Empire. The current British Army is positioned in pretty much the same way. The default Government decision for any global stress point is send in a troop of Special Forces, send in some training guys for whoever is perceived that week to be on our side and if pushed, send some non-lethal equipment. Then, if things start to warm up do not very much for as long as possible giving the bad guys time to embed themselves, perhaps have a debate in the House of Commons and hope to lose and if pushed to the limit, ping off a few fast jets (if we have any spare), or fire off some Cruise missiles from a far away sub. As soon as is then practical pull everyone out, hand out a new medal and move on, thanking “the best Forces in the world.”

I know its kind of unbelievable but that really is the way some highly placed politicians and their non-military advisors think. They genuinely believe that anything other than light intervention is unthinkable in the modern environment.

Of course, that approach is all very well and works, right up until we walk into an enemy every bit as well equipped, trained and led as are we. That's mostly what happened to the old BEF. Then, all the metrics change. It’s at that point that we face an elevated risk of high casualties. When we don’t have enough replacement troops to rotate to give those on the ground proper rest. When we don’t have reserves to call upon. When we don’t have enough kit in our war stores to replace the damaged and lost. When other enemies attempt to exploit our focus elsewhere but when we’re not resourced to contain more than one situation.

We were very lucky not to suffer more casualties in Iraq and Afghanistan. There were many situations when sub units came close to being overwhelmed, (unfortunately a Military Police patrol in Iraq was). If this Government, and whoever is the incumbent after May, continues to play fast and loose with Defence there will be a consequence and that consequence is pretty simple to anticipate; more dead soldiers, a potential repeat of the military and political humiliation of Basra or possible worse..... much worse.

There is a school of thought incidentally that having failed twice in ten years, arguing over an Army strength of 82,000 or 50 odd thousand is rather irrelevant given 82,000 is just too small to offer a credible force for anything other than operations with a small Division. There is also a reasonable criticism of Army leadership both from outside and from within that it did little to offer politicians good guidance before recent conflicts and were in denial during them but are busy rewriting the recent past and its context. There is some truth in all of that.

Nonetheless, nobody likes a man who argues about the bill with a waiter who can’t talk back. Kind of the same with politicians and soldiers. 

Hodge; Head Dementor of HSBC

Commons Public Accounts Committee - Head Dementor

The insipid performance of Rona Fairhead the other day in front of the Commons Public Accounts Committee was less than inspiring. She allowed herself to be bullied to the point of evisceration by its chair, Margaret Hodge. Rona Fairhead is a director of HSBC and heads the BBC Trust. Mrs Hodge suggested, or demanded, that “you should consider your position and you should think about resigning, and if not, I think the government should sack you.” Fair and even handed then.

HSBC is a global behemoth which is reaping the reward for the stupid Republic National Bank purchase in  1999, for that I suspect is the source of so much of the recent Swiss allegations. After the takeover all those years ago it only took two years for the first fines to appear, $606m in restitution for cheating Japanese customers. That was a $10bn purchase which is right up there in the stupid stakes with the $16bn purchase of Household International, a company that was a serial offender, a few years later. More fines are just inevitable, notwithstanding the growing reputation damage.   

Let’s face it, given the jaw dropping fees and mundane advice received from Swiss Private Banks there are only three reasons to have an account in one. First, to hide money, second, to avoid taxation or third, because you have lost confidence in your country of origins prudential management of its financial system and regard inherent risks as too high not to have a safe bolt hole. Perhaps, all three play a part. On that basis then, Rona Fairhead’s ability to do the “smell test,” of what is reasonable looks impaired and her and other executives excuse that “they didn’t know,” excuses nothing. 

The 2012 300 page Senate report on HSBC, which described its woeful money laundering controls, described the banks compliance culture as “pervasively polluted for a long time.” HSBC is a bank that the UK needs, not least of all because of its long standing Asian links but it is, like many banks, just too big to manage. The organisation badly needs an imaginative go-forward plan. It is unwieldy, inflexible and massively bureaucratic, (someone told me they have 1500 people in change management whatever the hell that is). The shares may be occasionally attractive to short duration traders but as an investment I’m not sure how one begins to attempt to fathom out the complexities of the investment case. There is more we don’t know than there is that we do. 

Mrs Fairhead is by all accounts a decent person but diligence and detail is everything when in a position of responsibility in banks, the personal compliance risks are simply too high for it to be otherwise which is why its becoming increasingly challenging to hire the right people, many of who only see potential reputational downside in accepting senior posts. Moreover, the blank refusal of the previous Labour administration to accept any responsibility for the GFC (Great Financial Crisis), is simply deluded. 

No matter, I’m here to help and Mrs Fairhead may wish to take advice from the brilliant Bird & Fortune in their handling of post crisis interviews.