In Defence of Bankers

In response to the ugly anti-Bankerism that infects our society, I insist on having a word.

I recently crunched the numbers, ran the algorithms, consulted the spreadsheets, and the results are in.

For every one dishonest banker there are at least 1,000,000 foolish American consumers who are ignorant about money, who refuse to save, who do not invest, and who absolutely must spend their cash on every consumer gadget, frivolous toy, and 2,000-square foot home they can't afford.

Of course I'm not absolving banks of any responsibility. They made mistakes and took foolish risks in a market that is largely rigged. Even more blame should fall on Government, however, which, desperately hungry for votes both native and imported, pushed the banks to lend at increasingly reckless rates.

Greed, of course, is not confined only to bankers and government bureaucrats. It never was.

I know of one 20-year girl in Newport Beach who inherited several million dollars after both parents passed away. Within 3 years the little bitch was broke, having spent the dosh on trips to Hawaii and Europe, clothes, sports cars, drugs, monthly raves in Palm Springs, and who knows what else.

I personally know of ageing, unemployed hippies living in million-dollar homes in Laguna Beach, having inherited them decades ago, and who can barely scrape together enough money to pay property taxes because they're too busy doing drugs and not looking for a job.

Speaking of which, I've met numerous 50-70-year olds who have frittered away their lives waiting for their rich parents to die.

And don't get me started on the throngs of addicts and "disabled" out there, people who have simply dropped out and expect someone else to care for them.

I find this fucking pathetic.

Having lived in and out of this country, and having travelled extensively abroad, I've come to certain conclusions. You know what defines Americans? A pervasive, deep-rooted childishness and immaturity, from which comes the sense of entitlement and greed that got them where they are today.

When I hear American consumers express their hatred for the banks, I immediately think of the young women who make false accusations of rape against a man after a drunken night of seduction and sex.

Embarrassed, and feeling buyer's remorse, they have no other response.

Odey On Stocks

As you know, my role in the hedge fund community these days is tangential at best. But I remain in touch with HF colleagues in London, New York, and San Francisco. And I continue to follow very carefully a handful of HF managers whose thinking I respect and whose results over the years have been more than impressive. Chief among these is Crispin Odey of Odey Asset Management in London. His recent remarks on the stock market (below) contradict the common sentiment of the crowd. Which is why I listen to him. Read for yourself:

'Odey is probably one of the few people in the modern financial world who believes that a "history degree is far more useful than a CFA" and a rarity among fund managers in being as comfortable talking on macro issues and politics as he is about individual stocks. His clients are the end beneficiaries of this intellectual restlessness. His long term track record stacks up against the very best. After a poor 2011 in which his funds were overweight equities too soon, 2012 is so far proving yet another stellar year.
...
Overall, Odey remains bullish on equities and has progressively cut his cash holdings. "But in Europe credit is broken so it is hard to say any trend or rally will be maintained in the long run. The only thing I am absolutely certain of is that cash and bonds will not earn a real return and that equities are cheap. They are cheap because they are unloved and will continue to be volatile, but equities remain the right asset class to hold to protect wealth," he says.'

Scott’s: with Crispin Odey, Founder, Odey Asset Management, EuroWeek, 20 April 2012

City Gent

City Gent

"He used to be the bastion of Britain, sorting the nation's finances out during the week then shooting pheasant at weekends on his estate in Berkshire. These days the city gent has moved rather swiftly to being the country's favourite pariah, and is forced to wear his beloved pin striped suits and bowlers only at night in select gentlemen's clubs, to avoid being stoned in the street."

Am I A Chap?, Gustav Temple (2011)

Coutts & Co

1970: The smart interior of Coutts Bank on the Strand in London. The aristocratic bank
has an illustrious history and counts the Queen among its customers.

Where do you bank? I generally do not like to talk about money, for the very simple reason that I discuss it all day long. I have spent almost my entire working life in a bank of one kind or another, apart from a brief period as a London hack, including stint at Punch. Growing up, Coutts & Co was the bank. As you know, I went to school in England with the sons and daughters of English actresses, American diplomats, European bankers, Egyptian exiles, New York stockbrokers, Persian princesses, and the odd African tribal chieftan's son or two. A cosmopolitan group. For them, Coutts, established in 1692, was the financial institution of choice. A Coutts card or cheque book was a mark of status to be whipped out at the crucial moment at weekend haunts such as Hackett, Henry J Beans, The Australian, and Scalini. Mere mention of the Coutts name takes me back. Have things changed? I understand profit is down at Coutts, now the wealth management arm of Royal Bank of Scotland (RBS), due partly no doubt to the economic crisis. Fortunately I can not say the same thing about my own firm.

Ian Fleming in the City

'Whenever I saw Ian towards the end of his time in the City,' says Cyril Connolly, 'he gave the impression of being a playboy business man with all the money and all the friends he could possibly want. I met him once in Brook Street. He was wearing a blue suit and an Eton Ramblers tie and his appearance was so absolutely correct that it made me think of someone out of a Wodehouse novel.'

The Life of Ian Fleming, John Pearson (1966)

Cavalry Style: Guards Officers

'I never realised', said a Guards general, 'quite how different regiments were until I became a brigade commander. I don't just mean the difference between an infantry regiment and a cavalry regiment, but the difference between two cavalry regiments.'

The contrasts are still noticeable, even if they are a lot less pronounced than in the past, when an officer with a good eye could often spot the regiment of a stranger out of uniform. Some regiments even seemed to produce a physical stereotype--willowy cavalry officers with flopping hair, slim Green Jackets with saturnine good looks, and large, fair-haired and ruddy-faced officers in the Scots Guards--but the exceptions almost certainly outnumbered such a thumbnail rule.

Clothes were a better guide. A waisted, full-skirted hacking jacket 'cut in the cavalry style with ticket pocket' was hard to miss, but to specify the regiment required a mass of minor clues, ranging from the jacket's state of repair to the visibility of a polka-dot handkerchief; while a Coldstreamer who had the cuff buttons of his grey suit arranged in two pairs, like those on his uniform, presented no challenge, and if a gunner could not be spotted by his dapper pinstripe his Labrador would give the game away.

Excerpt from Inside the British Army, by Antony Beevor (1990)