Wednesday, April 22

Changing fashions

At some stage in life we relish the crisp feeling of a freshly ironed garment, a new shirt, a snappy suit or formal attire for that special occasion. During such occasions or be it frequently for those more fashion conscious, it is inevitable fashions sway our choice. Fashions and tastes repeat in all walks of life, whether spiritual or secular,since even those most sacred ideas will eventually be jettisoned or rebirthed to reflect changing ideas.As we add new rules we dismantle the old ones to leave the only certainty, which is change.

Take poetry for example. Those elaborate rhyming masterpieces have given way to modern free verse.The rules for free verse (if there are any) are only described in such subjective terms that only the finest distinction exists between a highly abbreviated short story and free verse poetry. Rhyming poets convert their poems to free verse to be fashionably commercial- if they want to be considered for publishing. Rhyming poetry is now mostly confined to greeting and Christmas cards. Rhyming is thought to undermine a poet’s freedom to create clarity and purpose. Will rhymed poetry ever come back into fashion? -Maybe!!

Music is another entering new cycles. Most types conform to mathematical intervals as anyone with an ear will attest. Try singing or playing a musical instrument off its designated musical key signature and what you hear is very unpleasant. But contemporary modern music is experimenting with discordant sounds to create for its listener a new experience. As you listen to it, it can grow on you and so you get used to it; although to my ear it will never replace the more traditional music. But what was once fashionable in everyday popular music has also changed enormously from the days when you sang along with the latest hit record. It has become more fashionable to choose your own genre and be entertained with its many different facets. I am yet to meet anyone who claims to like all the different styles such as classical, opera & operetta, Gilbert & Sullivan, choral, lieder, pop, musical theatre, jazz, folk, rap, hip hop,soul,baroque,classic rock, heavy metal, punk rock and country or blues. Interestingly enough classical music and opera has increasingly entered our daily lives in unexpected fashionable ways: cartoons, movies, advertisements and on TV shows. Classical themes help create an emotional mood to prompt an audience to be in a more receptive state of mind to the words and images.I think it will become even more fashionable to link music to your presentations and to choose that genre which best represents words and images.

It has become fashionable to suggest that a new model is required in economics because of the failure to predict or prevent the current economic crisis. But thinking in economics is paramount since economics is unlike Science which can perform repeated scientific experiments within a controlled laboratory to prove causation. Economics studies society in the raw whilst it is in a state of flux experiencing changing fashions and technology.It aims for the best model in the interests of the public good. It started out with Adam Smith’s idea that the invisible hand of the market provided what was needed in spontaneity and natural restoration. John Keynes’s mathematical modeling predicated a government’s need to intervene with increased spending measures (creating a budget deficit) and money supply during any downturn and for the reverse to apply during overly expansionary periods. Both measures were demonstrated to restore the economy to its optimum state of equilibrium when demand and supply are in balance.
However he would have assumed governments were net savers during those periods of relative prosperity so that the accumulated surplus was available during an impending downturn.
This theory was further endorsed by acclaimed economist Paul Samuelson whose extensive mathematical modeling further endorsed Keynesian economics. But it was in 1970’s the economist Hyman Minsky further refined Keynesian theories to support intervention in the financial markets. Minsky’s theory was surprisingly simple yet very elegant and influenced by his understanding of human nature. In a nutshell his idea was that as prosperity lengthened over the economic cycle an overly optimistic euphoria inevitably occurs as part of human nature. More and more of a cavalier approach would begin to take hold to ensure aggregated savings dissipated in favour of more risk and debt. This would lead inevitably to a financial crisis unless there is government intervention via the central bank to quell any early signs. Otherwise if unchecked any bubble developing will inevitably burst and reap havoc with accompanying credit tightening as the economy subsequently contracts with all of its ensuing misery.
His ideas necessitated the need for preemptive action to control any tell tale signs of an impending bubble or excesses through regulation to put the spark out before it does too much damage. But his ideas were soon to be out of fashion and his books failed to make the required reading list in the graduate schools. In stark contrast deregulation became the latest fashion that characterized the economic management from the 1980’s and ensured the sub prime fiasco could flourish unhindered. In just the few intervening years immediately prior to the sub prime fiasco twice as many homes were sold in the USA as what averaged the proceeding period.

Given the Minsky model; banks would never have been allowed to become so highly leveraged, to create immense non disclosed off Balance Sheet vehicles, to allow prudential lending standards to be waived and to allow Hedge Funds free reign with immunity from transparency and regulation.

I think it’s time for a fashionable change.

Saturday, April 18

Growing up in Australia

Recently while engaged with my grand children playing games in the back yard, it caused me to consider how much has changed from my childhood days growing up in Australia. Australia then was influenced by large scale immigration which later, not only changed our food and what we drank, but underwrote the multicultural country we are today. Most artists then needed to travel overseas to further their careers and although our first cultural icon, The Australian broadcasting commission had been established in 1932 (The ABC) it was not until 1956 that The Australian Opera was established, followed in 1959 by the National Institute of Dramatic Art and in 1961 the Australian Ballet. But most of our culture influence still came from abroad. The “Dream machines” manufactured in America gave us such icons as Roy Rogers with those captivating tales of the Great Dividing Range to dominate my childhood memories, along with British spitfires and adventures set in England. Australia in custom and culture was said to be more English than the English; perpetuated by constant pilgrimages by our Prime Minster Sir Robert Menzies to the “Mother Country’ as he reminded us. He was our longest serving Prime Minister, serving between 1939-1941 and then for an uninterrupted period from 1949-1966; retiring at aged 70. But Australia also continued on at times in blissful ignorance, with racial prejudice and abuses never far away, hidden away by a majority who enjoyed a seemingly carefree existence as distinct from our Aborigines who were only being given the vote in 1962.

My early childhood memories were very happy ones. I grew up in the picturesque small dairy farming town of Kyogle situated on the NSW side of the border with Queensland. The back fence was all that separated our house from fields of grazing cattle and the river; an endless source of entertainment and excitement for me. I was scarcely ever indoors, coming in only at the shrill cry from my mother “The Search” a call to us to come indoors to listen with bated breath to the daily radio broadcast of “The Search for the Golden Boomerang”. Radio, books, comics, making sling shots, playing in the dirt under the house, bows and arrows, climbing trees or exploring the river banks with family cats and dogs kept us actively interested so I can never recall feeling bored. In later life when I first watched the same radio script on TV, I was sorely disappointed. Actors and sets seemed surprisingly insipid and imprisoned on an impoverished tiny screen compared to the images conveyed by exciting radio broadcasts.

I loved the weekly visit to the movies.Coming home afterwards we feasted on hot chips, smothered in salt and dripping with fat, wrapped up unceremoniously in old newspapers- it was indescribable manna from heaven to me and no doubt frightfully unhealthy. When I returned home it was time to re enact the scenes, embellishing the story line to make it more exciting whilst playing in the bush outside.

Supermarket shopping didn’t exist but there was a constant stream of merchants and visitors to our house; the milkman at first light filling your jug with fresh milk and cream, a baker carrying his basket under his arm of freshly baked bread exuding its enticing aroma, the postman’s shrill whistle, ice from an ice cart for your ice chest, an insurance man collecting the premiums and an occasional salesperson selling encyclopedias and so on.

Each week the faithful ‘Dunny man” had to carefully exchange your full dunny for an empty one which was an operation that required a combination of brute strength (as they were rather heavy when full) and skill to ensure you didn’t spill any of the contents out while lifting on to the truck. The contents were respectively referred to as “Night Soil”.

My best pal conveniently lived next door; he was several years older and the wrestling champion of the local neighborhood and my experience wrestling with him turned out to be invaluable when I went off to school, when dealing with an older school bully. He launched an attack on me on the way home; and I though I was a goner but resolved to do my best. To my surprise as the small crowd gathered around to watch I managed to get a decent head lock on him and wrestled him to the ground. To my astonishment and relief it was soon over; as he heeded the chant of the crowd. “He’s got you!. He’s got you!! Give-up. Give Up!!”

Christmas time was always an exciting time and receiving a Bike for a Christmas present eclipsed all known previous joyous experiences. My parents had laid a string throughout all of the rooms of the house and back down the stairs to be attached to the bike situated on the front lawn. Christmas morning at first light they invited me to follow the string and see what was on the end of it. Needing no encouragement I tore through the house and in a state of heightened excitement to finally survey a wondrous bike. I immediately hopped on and cycled away. It didn’t matter a fig to me that it was an old bike, painted and spruced up with a false “Malvern Star” sticker on it.
It was the best thing that could have ever happened. It was only in later life when I recalled the details in my mind of bubbly paint work covering up rust and the shiny new bell on an otherwise heavy old frame. Freedom is an elusive state but I never felt as carefree as when riding that bicycle around in the country.

When Queen Elizabeth’s visited Australia no one really knew why we should all be excited.It was as if we were all swept along with this national bout of infectious enthusiasm and delight for the Queen. The cheers of the schoolchildren echoed everywhere as the Queen was greeted with unanimous delight. We travelled a long distance by train with thousands of cheering country children to catch a glimpse and listen to her speeches.

Growing up in Australia in the fifties is similar in many ways to what is described by author Bill Bryson’s account of the life and times of the Thunderbolt Kid in America when he recalls that “growing up was easy. It required no thought or effort on my part. It was going to happen anyway”.

Friday, April 10



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We gathered to meditate on the most sacred day of the year. The focus of our ceremony was the seven sayings of Christ uttered when he was dying on the cross. Through a series of psalms, reflections and sacred music, we were led to the foot of the Cross.

later in the darkened church the lighted candles represented our world about to be plunged into darkness.

The lights were gradually extinguished throughout the ceremony until only one flame remained, symbolising Christ. When the last light disappeared a loud noise (strepitus) was made to remind us of the earthquake on that fateful day on Calvary.

Friday, April 3

G20 junket summit

I didn’t expect much from what might cynically be described as a 2 day G20 junket summit so I was pleasantly surprised when I read about the overall result. Credit is due for the extra funding measures to be provided for the IMF to provide additional drawing facilities for developing nations and for agreed tighter regulatory measures over executive pay, hedge funds, credit ratings/banks and the long overdue proposed sanctions on known tax havens. The biggest obstacle remaining are those few very large and technically insolvent USA banks (from a total of over 8,000 banks) presiding over frozen credit markets which have kept interest rate spreads artificially high. But it now seems inevitable more control will be exercised over the Banks or even some nationalized, should the latest plan prove ineffective.

The Meeting of the G20 was symbolic in that:

It was more representative than previous G7 meetings dominated by the USA and excluding China. The G7 has literally become ‘dead in the water’ since it’s dominant members became heirs to a lack of good governance with reckless leveraged lending that successfully exported the toxic assets all over the globe as AA A rated securities to unsuspecting buyers; the genesis of the current crisis. Obama typified the new administrations fresh approach by stating he was there to listen.

Secondly it recognizes the reality of the global village. It might be good practice to grow your own where you can close to home, but there is no escaping our interconnectivity and the need to act in concert with one another. It is of particular importance for the ongoing developing nations which although culturally different need to work together for a more sustainable future. It is a lot easier to raise issues such as human rights and climate change and so on when you’re actively involved in a relationship than when you’re locked behind an iron curtain.

Finally it will form the groundwork for a more sustainable future since the exchange of fresh ideas from a much larger audience will become an oasis for new innovations. One that I like was fielded from Beijing’s Professor Yu Qiano, of Tsinhua University who, it was reported in the Australian Financial review of the 3rd April in an article entitled “G 20 politics thwarts innovation”, was concerned (and justifiably in my view) about an expanding USA treasury bubble (as a consequence of expanded public debt financing) leading to the dollar tumbling in value and causing havoc to Asian creditors with resultant higher inflation. His solution involves Asia ceasing to buy US Treasuries in favour of acquisitions into a special purpose vehicle whose purpose would be to fund future capital infrastructure projects within the USA supported by a guaranteed sovereign risk rating. These Funds received into the special purpose vehicle would therefore not be used as was past practice to fund over consumption but rather future investments in infrastructure. The indebtedness could be redeemed from a conversion to equity if the US government so desired at any time. It’s not an idea that is likely to pass through the current politics but that may change further down the track when inflation finally rears its head.