Wealth, Power and Me

michael's moving house

2011-08-28T01:05:00.004+01:00

The beautiful room below is in Woodland House, for many years the home of Michael Wiinner - one of my all time favourites. Film director, restaurant critic, larger than life character - a loveable, kind and hugely generous man, a great and discreet giver to charity, and an all round genuine and nice human being.

The room is presently his bedroom in his house in Holland Park, which he has just put on the market for more than £60 million.

The architect Richard Norman Shaw built the house in the Queen Ann style during Queen Victoria's reign for the artist Sir Luke Fildes, and Edward V11 had his portrait painted by Fildes in this room, which was originally Fildes's studio. The king commented that he considered the room one of the finest in London - I certainly agree, it's an absolute stunner.

The house is Michael's childhood home, he moved in with his parents shortly after the war in 1946. Then the house was leased out as two separate flats and the basement was damp and mouldy. It is now a home cinema, as below.

Determined to keep the property after his parents moved out in 1972, Michael bought it for £150,000 and started to buy out the tenants.
Originally, he planned to leave it to Kensington and Chelsea council, but it is leasehold and I understand the council wanted him to purchase the freehold, which would cost £15 million.

If he sells the property at the asking price, he will pay something in the region of £28 million in tax. Below are a couple of views of the exterior of Woodland House.

The property has 46 rooms, 7 bathrooms, 9 lavatories and a swimming pool and Michael now feels it's just too much trouble to keep up. Even a simple task like changing the light bulbs is a major job - 'it costs me a fortune to have man in to do it,' he says, 'I paid £1000 the other day.'

At 75, and about to marry for the first time, Michael and Geraldine are looking for a simpler life style, and Geraldine finds the property 'a bit forbidding.' An apartment, they think. A penthouse with great views, and a terrace with flowers, perhaps.

Much will have to go from the great house, some nice pieces of jade have already been auctioned off at Sotheby for £460,000, and there will be a bigger Christie sale shortly. Meanwhile, several Old Masters have already been sold.

And a much loved neighbour will be left behind, Jimmy Page, the heart and soul of the greatest rock band ever, Led Zeppelin. Once a truly demonic, or more accurately, daemonic character, who really set the bench mark for bad behaviour and who now, Michael says, is teetotal and all that, and just bobs up and down the road with his shopping, quiet as a mouse. Jimmy, you always had style, and you've still got it, style and class.

So, all moves are a type of rite-of-passage, and a little sad, however much we look forward to the next place, the next stage in the journey, and after all, Michael will be leaving behind a house full of astonishing memories of some of the greatest people in show business, who partied and loved and laughed in that big old place.

But Michael's a big character and though the new place may be smaller, he will be just as big, with that great big heart of his, so I wish him bon voyage, happy landings, safe journey to the new home - and much happiness in his new lifestyle as a solid married man, at last.

Cass

(thanks to Daily Mail and particularly to Murray Sanders, for that beautiful photo of a beautiful room).

How rich is the Queen

2011-04-22T22:22:00.001+01:00

It's difficult to avoid the royal wedding, so, as this blog is about money, let's look at the wealth of the royals, starting with the queen, and one of her favourite castles.

Her private wealth is estimated at $500 million.
This comes from property, including Balmoral Castle in Scotland (above), stud farms, a fruit farm, and marine land throughout the UK, extensive art and fine jewellery and one of the world's largest stamp collections, started by her grandfather.

In the lists of the rich $500 million is not very impressive. That is because most of her wealth is tied to her position and belongs to the Crown Estate and not to her personally. That includes $10 billion worth of property, plus Buckingham Palace, worth an extra $5 billion approx, and the royal art collection.
She also receives from the government an annual stipend of $12.9 million.

Of course, that $500 million personal wealth is only an estimate. It would be odd if someone in possession of that amount of personal money did not follow the suggestions of her advisers and place some of her money off shore. I suspect we are looking at the tip of the iceberg here, because of course the figure given concerns only those assets that can be readily traced.

(I've given value in dollars, following Forbes research).

Tomorrow, let's look at what we know of the financial affairs of her son, the heir to the throne, Prince Charles, and his sons, including the bridegroom to be, Prince William.

Offshore Banking, Numbered Accounts, and bye bye UBS

2011-03-10T22:15:00.005Z

This is about bank privacy in the age of Wikileaks.
If you want expert advice of course you would go to a financial adviser. What follows are my general thoughts on offshore banking, from the point of view of the very interested observer. And it involves much talk about the IRS (the tax collecting arm of the US Treasury).

First, it needs to be said, and said often, that these days the majority of people go offshore for perfectly legitimate reasons, being more interested in asset protection and capital preservation - and privacy and not having their details leaked all over the internet - than anything to do with tax.

And remember, tax planning, tax avoidance is NOT illegal. Tax evasion is.
The United States Supreme Court has stated that "The legal right of an individual to decrease the amount of what would otherwise be his taxes or altogether avoid them, by means which the law permits, cannot be doubted." See Gregory v. Helvering.

After the UBS/IRS storm a lot of investors, not surprisingly, are wary of Swiss banks.

You're a beautiful little country, Switzerland,
but we're saying Good Bye!
(photo from Switzerland.trips.com)

Privacy is an important part of international planning and the feeling now is that privacy is under threat in Switzerland.

There has been a big fall-out from the UBS debacle, when the bank handed over names and private details of 4,450 of its clients to the American I.R.S. UBS has closed thousands of accounts where American residents or citizens were involved as signatories, including those who had been with them for decades. I make no more comment on the behaviour of UBS than to say this tells me all I need to know about Swiss banking.

Sadly but understandably after all this, Americans are not these days sought after as clients and their options are becoming limited.

So, for offshore banking, where are we now?

In earlier days one was recommended to the smaller Cantonal Banks in Switzerland, small local banks unknown outside their local area of Switzerland, who operated *numbered accounts (see below) and who did not outsource yet had the sophisticated expertise of their bigger cousins. The cantonals were thought to be safer, and because of their low profile less likely to be the target of people like the IRS. There are 24 of these small commercial banks, who account for 30% of Swiss banking business.

However, the IRS have opened branches all over the place, and are bustling about the world busying themselves with everyone's private affairs, and are at this moment chasing one of the larger cantonals, Basler Kantonalbank, and prosecuting a former UBS banker turned investment adviser, for advising his American client to conceal a cantonal account from the IRS. So that's the end of Cantonal Banks for most people. And Switzerland, too, as far as I'm concerned.

The fact is that, in the climate created by the IRS, no financial advisers or banks want anything to do with the unfortunate American client these days, because they would expect to have the IRS breathing down their necks at every turn. It's as though the IRS doesn't want Americans to take their money out of the US. America of all places is the land of the free but these days Americans don't seem to have much freedom of movement with regard to their own money. It;s more a case of 'listen up, dude, keep your money at home or we're going to hound you to hell and back'.

*(All bank accounts are numbered, of course. But what is traditionally meant by the Numbered Account is one which does not appear on the bank's computer system. Your name and details will be in the bank's vault, and accessible and known only to a very few people, often just the President of the bank and one other highly placed person. The Wikileaks problem only arises when your private details are accessible to comparatively junior members of staff, who have no real stake in the bank, and usually have a grudge against their employer, and are simply looking to make money through their inside knowledge. So, in these days of Wikileaks, it is essential to have a classic Numbered Account as described above.)

So, if not Switzerland, where?

We have to refer to citizenship here. These days, because of the IRS, US citizens' options are more limited than, say, Canadians or Australians - many offshore banks no longer accept Americans as clients.

But even if you are a European, including UK citizens, you have to be careful. For you, the European Union Savings Tax Directive applies, so you must look for one of the tax-haven banking countries that is not a signatory to this treaty. That cuts out Switzerland (see what I mean), Andorra and the Cayman Islands for a start, and means you must look further afield to places like Panama or Singapore.

Obviously, Singapore has attracted a lot of attention, particularly from American investors. But again, it seems to me one has to be careful. Canadians might be OK, but be aware that both the EU and especially the UK, have strong influences there, and have proved very antagonistic to quite legitimate offshore banking.

Anyway, Europeans are not the target market for Singapore, though they are generally welcome. And Americans? They will be accepted, but the number of banks willing to work with Americans is smaller, I hear, and the entry level in terms of minimum deposits is quite a bit higher.

Personally, I agree with the advice that it's better to go for less high profile banks, and most certainly a bank that does not have offices or branches in your own country. And no out-sourcing. Glossy ads and high profile marketing attract far too much attention. And do not go for convenience. Keep as far away as possible, geographically and culturally, from your home country and the places where all your fellow countrymen do their offshore banking.

For Europeans, think Latin America, maybe Panama and Uruguay. For Americans, look in the more obscure corners of Europe. But basically, look around and check them all out for yourself, because everyone's requirements are different.

And look for the culture of the bank and of it employees. Because we now have the added problem of the leaking culture, the disloyal, grudge-bearing syndrome of those that take their employers wages and then turn on them and their clients and sell private information to the highest bidder. And don't tell me there's any other nobler motive. It's done for money, pure and simple.

Insist on a real Private Numbered Account.

And monitor the situation the whole time, because things, institutions, laws, change - so keep your eyes on your investments, don't leave it entirely to your advisers, check everything frequently and keep watchful.

And Good Luck.

The Good, the Bad, and Swiss Banks

2011-03-08T16:38:00.006Z

When I was a child I was taught that there were only two certain things in life: death and taxes. When I became a teenager, I amended that. There were three things that were certain: death, taxes - and the privacy of a Swiss Bank account.

In an uncertain world, you could put your faith in the numbered account of a Swiss bank, and know that your assets were safe, hidden from prying eyes, accessible only to yourself. In a world in which you could trust no-one, the one exception was the Swiss bank.

Now death and taxes reign supreme. As for the Swiss banks - how are the mighty fallen.

A year or so ago, after a protracted, bitter fight with the American IRS (the US Treasury office that deals with income tax affairs), UBS (United Bank of Switzerland) caved in and handed over many names and details of its clients' private financial affairs.

counter hall of UBS Zurich

Following this painful episode, new legislation was put into place making it more difficult, for instance, for plundering rulers to open accounts in Switzerland.

What now is the position of the Swiss banks? If discretion and secrecy have gone, what rules are we left with? UBS have frozen the funds of several dictators in the past few months. Why? Let's take the case of Hosni Mubarak, the fallen former President of Egypt.

UBS held funds for Mubarak for years, apparently quite happily, with no reservations, and considerable profit to themselves.

This situation lasted until Wednesday, 10 February 2011.
On Thursday, 11 February, Mubarak left office, and retreated to his home in Sharm-el-Sheikh. Within two hours the bank had frozen his assets for approximately 3 years.

A couple of questions come to mind. Under a freeze, does a bank still take a fee for holding the assets, and can that bank still lend that money out at interest? UBS do not at this time appear to be returning it immediately to the Egyptians, though, to be fair to the Swiss, they have an extremely good record recently in returning money to the country of origin.

And James Nason, of the Swiss Bankers Association, speaks forcibly in defence of Switzerland in that regard:
" The case of the late Nigerian dictator Sani Abacha was a classic example. The Swiss investigation into Abacha funds at Swiss banks revealed that a substantial proportion of his plundered funds had first been laundered by banks in the US and UK. A subsequent investigation by the UK banking regulator (FSA) in fact revealed that between 1996 and 2000, 23 British banks laundered some USD 1.3 billion of Abacha’s illicit assets. In September 2000 Nigeria’s ambassador to Switzerland, Mr. Ogbe Obande, told Swiss Radio: “I’m happy to say without equivocation that so far Switzerland has given the best cooperation to Nigeria in its quest to recover the looted property stashed in banks across Europe and the Americas.”

Switzerland remains the only country in the world to have returned Abacha funds to Nigeria and Nigeria remains frustrated at the lack of cooperation from the UK and US. Yet the media continue to give the impression that Switzerland was the only country whose banks accepted Abacha funds.

But one can't blame people for asking - if Mubarak is such an offensive client, why did they accept his money in the first place? He's still the man he was, and the money they're holding is still the same money they've been holding, I presume for some time.

How do the Swiss themselves explain this? James Nason has been telling Robert Brookes of http://www.swissinfo.ch/ that Swiss banks are obliged by legislation to stick to strict regulations when opening and handling accounts.

"There are very strict procedures in place, so-called due diligence procedures, basically "know your customer” rules," he says. "First the bank has to decide if it wants a business relation with this person. If you’re a so-called “politically-exposed person” (Pep), that means somebody holding an important public office in a foreign country, the bank has to assess how much of a legal or reputational risk you might pose.

If it decides to go ahead, one basic question is: Can you prove your identity? The banks are obliged by law to verify the identity of the client so they will want to see some kind of official identification document. Then the third and a very important step is to find out: Are these your assets you’re bringing to the bank or do these assets belong to someone else? The bank is also legally obliged to find out who the beneficial owner of the assets is or are."

Know your customer. Unless Swiss bankers all live in monastic seclusion high up in the Alps and never read the papers, how could they not know of Mubarak. He was a world figure, had been in charge in Egypt for 30 years, the bank had 'known' him and his character and his way of running his country, for years.

Presumably, when opening his account, they had inquired "Are these your assets you’re bringing to the bank or do these assets belong to someone else?"

And, presumably, the answer given was satisfactory, otherwise they would have refused him as a client.

Though in defence of the Swiss, it should also be pointed out that sometimes monies paid into a Swiss Bank have already passed through other banks, say in the US or the UK, where the 'know your customer rules' are not as strict.

Mr Nason also explains that they "put clients in different risk categories, so for example an 80-year-old grandmother from the next village would be a low-risk client whereas a 28-year-old casino owner from St Petersburg, for example, or a defence minister from a country notorious for corruption would obviously be considered to pose a higher risk."

One would assume the President of a country notorious for corruption would pose as high a risk as a defence minister. Certainly, immediately Mubarak fell from power, the bank took a strong moral view and froze his assets.

Mr Nason goes on: "There are very clear regulations in place. If a bank notices a suspicious transaction or it has well-founded suspicions that something like money laundering is going on, the bank is obliged by law to freeze the account and report it to the authorities, the Money Laundering Reporting Office. In some countries a bank would have to wait for a court order in order to freeze the funds but in Switzerland a bank can act on its own initiative. The authorities then have five working days to investigate and then they will tell the bank what to do."

Things now being as they are, one wonders why anyone these days would place their money with a Swiss bank who assesses a client as suitable, strikes a contract with that client to look after their funds, maintains that position for years, and then in a matter of two hours turns on the client, and freezes all their assets. If Mubarak's money was legitimate when he was in power and the bank accepted it, then surely it was still legitimate when he was no longer in power?

Swiss authorities explained the quick freezing of the account by saying it was taken "to avoid any misappropriation of Egyptian Government assets."

That doesn't quite answer the question.

I'm not discussing morality here - it's a murky area, one person's morality is another's immorality - I am simply looking at the business side of things. But if morality comes into it, then surely it comes in on both sides.

A bank is in the business of attracting wealthy clients, offering them expertise, protection for their assets and advice. That is the contract they strike with the client. Surely, if they take the client's funds, earning good profits out of doing so, they owe some loyalty to that client. Wouldn't it be reasonable, when seeing that client heading for the rocks, to give them some advance warning - something along the lines of 'look old man, your future is not looking good, we advise you to remove your money from our bank pdq otherwise we will be forced to freeze your assets.' Whatever the banker thinks of the client privately, he has taken the money, entered into a deal with the client and used it to the advantage of his bank.

Mind you, even as I write this a little voice in my head says softly are you sure freezing an account is exactly what you think it is, are you sure there aren't angles you've missed? No, I'm not sure, because money is a complex creature, where money is there will always be angles, tricks of the trade, ways around things - angle within angles! I can think of a couple myself . . .

There's no denying that the agonising battle between UBS and the Americans has cast a very long shadow on the Swiss banks.
And regarding the rash of frozen funds lately, there does seem to be something interesting happening on two fronts, both in relation to the rich and the Swiss Banks, and attitudes by the Swiss Banks to American clients.

More of than on the next post - and where to put money now the Swiss have fallen from grace.

(You can read the whole interview with Nason at www.swissinfo.ch dated 1 February 2011.)

the photo of UBS is from a 'wallpaper' site which encourages me to pass the contents of the site onwards, to facebook etc, so I take it I am able to use what is a very good photo).

It's the money, stupid

2011-03-06T23:36:00.004Z

Who says money can't buy you health? Below is the list of the average age of death of citizens of various countries. Look who is at the top. Good old Monaco. See? Being rich is good for your health. Which should motivate everyone to get out there and make as much money as possible.

Remember the words of the old song:

What happens when you're 70,

Must come a time, 70,

When you're old and it's cold

And who cares if you live or you die.

Your only consolation's the money

You may have put by.

The Prince's Palace, Monaco

The Casino, Monaco

Monaco 89.8

Japan 82.2

Australia 81.7

Canada 81.3

France 81.l

Italy 80.3

Ireland 80.1

UK 79.9

Netherlands 79.6

Germany 79.4

U.S.A. 78.2

China 74.5

India 66.5

Russia 66.
Angola 38.5

(with thanks to the late, great Lionel Bart for the lyrics quoted above).

GOLD ETERNAL

2011-03-04T21:41:00.000Z

This is the second piece about gold I 've done recently. That's because I love gold. I love its beauty, I love the sheen of it, the way it glows magically in a softly lit room or against a dark background. But I also love it because it's the only thing in the shifting, unstable world of fianance that is real. In the end, when trouble really hits and all that currency paper and coinage is valueless, gold will still be there, glowing amid the revolutions and the war and the flames. Gold is eternal money.

Gold is what it is. It doesn't represent anything but itself. It's not made by man. And it can't be destroyed by man. It doesn' t react with water. It doesn't corrode. It can be melted but that doesn't change its value. It's still gold, pure intrinsic wealth.

That's why the really rich don't bother trading it. They keep it, and when they die they pass it on to their children. It's the ultimate insurance, the ultimate security.

The stock market may collapse, your great houses fall about your ears, the country you're in disintegrate, all you may be left with is your gold. And that is all you need. Because gold is eternal money.

The last post on gold discussed which nations hold the most gold. At No 1 was America. The US keeps its stock of gold at Fort Knox. And below is one of the most awesome photos I've seen. It was taken at Fort Knox and it shows a room lined from top to bottom with solid gold bars. Imagine standing in the middle of that room. Breathtaking. And I wonder how many rooms there are like that.

Photo courtesy of solarnavigator.net - I site I came upon accidentally, and I thank the site for a really great photo.

This post takes another look at gold economically, this time from the point of view of what the Telegraph calls 'gold gobblers' - those nation who have the most passion for acquiring gold. Wise nations.

India

India had the highest consumer demand for gold in 2010. The country bought 963.1 tonnes of the precious metal, valued at $38.1bn (£23.4bn).
The main driver behind Indian demand is jewellery, with a 47pc increase in Q4 2010 demand compared with Q4 2009. This was boosted by Diwali celebrations, the biggest gold consumption period in India.

China and Greater China
Greater China lies in second place in terms of gold demand, although when combined with demand from the mainland, it easily sits in top spot.
Consumer demand was valued at $24bn for 2010, with demand on the mainland (ranked in third place) valued at $23bn last year

USA
US demand for gold jewellery has been slowing over the past 10 years, while investment demand has risen. Demand stood at 233.3 tonnes in 2010, with a value of $9.4bn.

Germany
European gold consumers were mostly driven by concerns over sovereign debt in 2010. and fled to gold for safety. Germany have even started offering gold in vending machines in Berlin's first 'Gold To Go' gold bar dispenser at Galeries Lafayette, where customers can buy gold bars weighing between one and 250 grams.
German demand stood at 126.9 tonnes in 2010, with a value of $5.04bn.

Turkey
Following several quarters of decline in the Turkish jewellery market, Q4 demand in 2010 was up 7pc compared with Q4 2009. Total demand in 2010 was 114.6 tonnes, valued at $4.5bn.
Consumers in Turkey are now focusing more on buying 22 carat gold, rather than 14 carat, in recognition of gold's investment properties.

Switzerland
Switzerland, which is one of Europe's largest gold investment markets, saw total gold demand of 91.7 tonnes in 2010, valued at $3.6bn.

Vietnam
While gold jewellery demand outside India and China lagged behind in 2010, Vietnamese consumer demand remained robust.
Total demand reached 81.4 tonnes in 2010, with a value of $3.2bn.

UAE
The UAE experienced a 6pc decline in gold jewellery demand in 2010. However, gold demand for investment rose 37pc.
Total demand stood at 72 tonnes in 2010, representing a value of $2.8bn

I never agreed diamonds were a girl's best friend. Diamonds can be destroyed, throw one in the fire and it burns down into the carbon it basically is. You can't do that with gold. Gold is forever.

Man's best friend lives the good life in China.

2011-02-28T15:50:00.005Z

Money changes everything, sometimes in the most unexpected ways.

With wealth and the rise of a prosperous middle-class in China, the dog has come into its own.

The dog loving community is on show everywhere, and its beloved pooches will be decked out in jackets, and smart cravats, with bows in their hair and bells on their toes - well, on their feet, anyway.

(AFP in Daily Telegraph)

Sad, you think? Think again. Think Money.

That's just what 34 year old Tang Yang thought, when he realised his girlfriend was spending approx. £45 a month feeding her pet rabbit.

He dreamed of a sort of Facebook for pets. And so www.goumin.com (loosely translated as dogpeople.com) was born.

Now, seven years on, Mr Tang already has 530,000 pet owners registered on his site, with 600 joining every day. He reckons he will have no trouble raising the $10m (£6.2m) to fund his expansion plans, with a possible public listing in a few years.

It's estimated that pet owners spend somewhere around $2 million a years on their pets.

It's the same old story. Find what lots of people like and, regardless of what you think about their choices, you'll find that's where money is to be made.

However, with wealth come the problems of over supply and flooding of the market. So much so that a new law has had to be rushed through. From May 15, only one dog per houseshold will be permitted. However, people who already have two or more licensed doggies can keep them.

But from May 15th puppies must be given to eligible no-dog households or government-approved agencies, before the pups are 3 months old.

Rather sensible really. It's all apart of the regulations concerning the environment, in regard to unscooped waste and sanitation rules.

So doggies like this buddle of fluffy fur with panda eyes, will have to be as well trained and well behaved as their middleclass owners the world over. (photo courtesy of Daily Telegraph, AP).

Yes, it's a dog's life in China these day.

Foolish dictators and clever bankers

2011-02-21T23:32:00.098Z

On the L. The Channel Islands

I do wonder sometimes about the commonsense of the rich. I'm not concerned with morality, too much hypocrisy hovers around that concept. But I am surprised at the lack of foresight that so often brings disaster down upon the heads of those leaders we are seeing tumbling from power at the moment.

Take Mubarak. Some people have thrown around ridiculous figures suggesting his wealth is of the order of 70billion pounds. But even if he had only a paltry l or 2 billion pounds, I question the wisdom of how he handled it. Because the way he handled it made him very unpopular, and now he's lost the lot.

It seems such an unnecessary disaster to have brought upon himself. Over the years he has been in power in Egypt, commonsense should have told him that if he donated a portion of his large private fortune to his country - perhaps set up an efficient health service, or revamped the economy so it provided more jobs for more people - he would still be left with loads of money, plus, in his position, the endless capacity to make more. And by putting some of his gains back into the public pot he might have been loved by his countrymen and ended up dying a great and admired leader.
As it is, he has ended up with nothing, with all his funds frozen by some Swiss bank, and everyone hating his guts.

The same has happened to the Tunisian top man, Zine El Abidine Ben Ali, who has taken refuge in Saudi. The Ivory Coast President, Laurent Gbagbo, (disputed since a controversial election decision) has also had his assets frozen by the Swiss.

You'd think that when the first fallen dictator had his assets frozen, the others would move pdq to get their money out of the hands of the Swiss banks whilst they were still in power. But they don't seem to learn that they can't rely on the Swiss Banks when trouble hits. A bit slow on the uptake, you could say.

In a previous post I spoke about the increasing gap between the rich and the rest of the world - and the fact that history shows that gap is dangerous and ultimately ends in trouble, and often in revolution. In many parts of the world, we're now seeing that happen. Yet, if the rulers in each case had not been so greedy, and had distributed a portion of their great wealth to ensure the wellbeing of their citizens, the end result would be good karma for them and they'd still be as rich as Croesus anyway. Why is it some of the rich rulers don't see this?

With corporations it's a very different story. A ruler's first job should be to run his country well, and look after its citizens in a civilised way. A corporation is different. It is a business. And when it's a bank, its purpose is to make money and safeguard the money of its depositors and its shareholders.

Take Barclays, for instance. A likely bunch of lads, much in the news this week.

Barclays made £11.6 billion in 2009. Astonishingly, the total tax it paid on this in the UK was only about £113 million.
This has obviously outraged a lot of people. Naturally. Especially as the UK desperately needs all the tax revenue it can get.

Let's try and untangle some of what's going down here with Barclays. This is as I see it.

Of the overall total tax bill Barclays paid of £1.3billion, £200 million or so related to the sale of Barclays Global Investors' (BGI) - (and the large profit involved in that sale is due to the hugely generous rules on capital gains by corporates introduced by Gordon Brown, a great friend of powerful corporations. Did you think it was only Tony Blair who liked the rich? Check again, Brown cosied up to the rich, too. ) - and the rest to ordinary activities.

In June 2009, BlackRock agreed to acquire Barclays Global Investors (BGI) from Barclays for about £13.5 billion - this was reported to be one of the largest deals in the money managment industry.
Under the terms of the deal for BGI, Barclays received $6.6bn in cash and a 19.9pc stake in BlackRock, worth $6.9bn.

The deal was also said to produce a windfall of about £607.5m for 200 of the most senior staff at BGI, including the truly dazzling Bob Diamond, the president of Barclays, who was said to receive approx. $30m, and joins the Black Rock board. (And who is rumoured to be in line for a £9m bonus from Barclays).

In 2008, if you remember, unlike several other major banks Barclays resisted taking a bail-out from the Government as crisis swept the through the system, so this injection of cash strengthened Barclays' capital position, and its financial position was given a green light from the Financial Services Authority.

The current rate of corporation tax in the UK is 28% but Barclays only pays 23% - good tax planning, that. Global banks like Barclays, which has hundreds of overseas subsidiaries, including many in tax havens, do not generate all of their profits in their domestic market.

Barclays biggest commercial loan book is in the US, but its biggest retail operation is in the UK. Around 78% of its profits come from Barclays Capital, believed to be largely located in London and New York. Yet only 10% of Barclays worldwide corporate tax is paid in the UK.

This seems to be because Barclays, a UK bank , is able to offset all its head office costs and all its losses on Barclays Corporate (and there may be losses in Europe, too) into the UK to offset what profits it does make here, so paying a astonishingly low amount of tax in its home country, the UK.

Barclays says:
"The corporate tax affairs of an organisation with the global footprint of Barclays are complex and not reducible to simplistic comparisons. Any link between Barclays Group profits and the amount of tax paid to the UK government is inappropriate - there is no direct correlation between the two."

The Cayman Islands

A disingenuous reply, of course. As though having 30 subsidiaries in the Isle of Man, 38 in Jersey and 181 in the Cayman Islands,  is unconnected with tax? It is connected with tax, but nothing of what Barclays has done is illegal. They are a business operation and their job is to maximise their profits, not to help bail out the UK.

On the other hand, the job of the UK government is to protect the interests of its citizens and get the economy back on track as soon as possible. So the fact that income tax which might have been paid into the Treasury coffers, thus helping to ease the present financial climate, has been diverted to lower-tax territory,  creates an awkward situation.

I am in favour of tax havens. Often, my hard earned money is taxed and used incompetently, and wasted by the Government, or spent on projects with which I do not agree, and to which I do not willingly contribute. However, I also strongly believe in the tax system, to fund education, health care, the police for instance, and I would always pay what I am legally bound to pay. But if I were wealthy and had a lot of money left over, having done my duty by the Inland Revenue I would certainly move that money out of the reach of the Government and put it somewhere safe, in a low taxed territory. And then, I would have more of my money to devote to causes in which I passionately believed, and where I could see for myself that the money was
being spent efficiently and doing good.

Tax avoidance, in other words intelligent tax planning, is perfectly legal according to the law of the land. Of course, when the rich, and huge corporations like Barclays, do just that, the Government loses much needed tax revenue.  But after all, it's the Government that makes the law of the land and the Government needs to encourage the rich to come to the UK because it's profitable for the country.

It is a balancing act for the politicians and the economists  and in times of prosperity the system works well. It's only in times of trouble, like the present, when the gap between the rich and the rest of the population becomes too obvious and too large, that resentment begins to build up.

And that has the potential to lead to trouble.

The Rich Really Are Different - And You'd Better Believe It

2011-02-11T10:53:00.008Z

If you were rich, you could buy this apartment on 5th Avenue in New York.

or you could gaze out on Central Park from the balcony of this apartment below which used to belong to Madoff - before he was caught, of course.

So let's talk about being rich and what it means in the year 2011.

London is still the 24 hour centre of the global financial world. It is big in stocks and shares, but it's the intangible, the international that it specialises in. And it's the international bit that we're concentrating on in this post.
1.7 trillion dollars of currency passes through London's trading Rooms every day,
2/5th of the global market
70% of eurobond business is done in London
The City contributes 10% GDP to the UK economy.
In the City, good old London still rocks!

Alan Greenspan was, from 1987 - 2006, the legendary chairman of the United States Federal Reserve, in other words he was head of the central banking system of the United States of America, one of the most influential men in the world, and the high priest of free market capitalism.

Discussing our present economic situation, Greenspan says, "Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals...
"Large banks, are doing much better and large corporations are in excellent shape. But the rest of the economy, small business, small banks, and a very significant amount of the labour force, which is in tragic unemployment, long-term unemployment - are pulling the economy apart. They are fundamentally two separate types of economies."

And he is right.

Two huge trends have developed over the past 30 years that have seriously reshaped the world's economy.

One is a surge in the size and connectedness of international markets, which has created a burst of global prosperity that has lifted hundreds of millions out of absolute poverty and into the middle class, particularly in the rising Asian power-houses of China and India.

But the second trend, even as the global economy has grown overall, is that within countries the gap between rich and poor has increased. For example: In the US, between 2002 and 2007, 65% of all income growth went to the top 1% of the population. And the divide has not only opened up in the US and European countries, the gap has developed in the booming emerging markets, too. The gap between rich and poor in Communist China is as big as that of the USA.

On one side you have the super-rich.
On the other side? Everybody else.

This dramatic split has been named 'the plutonomy' - it describes a society where the majority of wealth is controlled and consumed by an ever-shrinking minority of the very very rich.

So obviously, the economic growth of that society becomes dependent on the fortunes of that very very rich group.

And that rich group are different to the rich of previous years.
For the most part, today's rich are not a leisured, landed gentry of inherited wealth.
Emmanuel Saez, an award winning economist who is one of the premier students of the super-elite, has found that in 1916, the richest 1% of Americans received only one-fifth of their income from paid work. In 2004, that figure had tripled, to 60%.

Many of today's plutocrats are the beneficiaries of globalisation. And even those who made their money at home have figured out that to make more they need to embrace the global economy.

As a result, there is a growing trans-global community of peers who have more in common with one another than with their countrymen back home.
They belong to no country. They acknowledge no borders.
Whether they maintain primary residences in New York or Hong Kong, Moscow or Mumbai, today's super-rich are increasingly a nation unto themselves. They have, in fact, created their own virtual country.

If you lived in the country of the rich you, too, could watch TV in your deliciously modern (and rather) macho dream of a pent house in Moscow, in the wonderful Triumph building, designed by Geometrix, complete with Russian bear bearing down on you from the ceiling. And you could sip your vodka in the early evening while viewing Moscow from your balcony. (courtesy of Adelto)

One of the places where that virtual country meets up is in Davos, Switzerland, at the annual meeting of the World Economic Forum (WEF), the premier convener of the global super-elite. But there even the very very rich are getting worried that income inequality has grown to extremes.

The Forum's Global Risks report for this year's conference reports that "Economic disparity and global governance failures both influence the evolution of many other global risks and inhibit our capacity to respond effectively to them"

So the global risk context in 2011 is defined by a 21 Century paradox: as the world grows together, it is also growing apart.

And here we have the dilemma.

In today's hyper competitive global economy we need our super rich and the innovative companies they create more than ever. But they need us too - as consumers, as employees, as fellow citizens.

But here is the lesson of history. In the long run super elites can only survive in one of two ways - by suppressing dissent, or by sharing the wealth.

Seems it pays sometimes to be generous and share a little of your billions.

(many thanks to Paul Mason and Chrystra Freeland).

Julian Assange in court Monday

2011-02-06T23:50:00.004Z

Tomorrow, 7 February, Julian Assange, the face (and heart) of Wikileaks, faces a court hearing to fight extradition to Sweden concerning sex assault claims made against him by two Swedish women. The hearing is expected to take two days. There is suspicion that the accusations by the women are politically motivated. The judge is expected to defer the decision. If the ruling goes against Assange, he will appeal the decision all the way up to the supreme court.

Sofia Wilen and Anna Ardin

(Photos courtesy of Whyfame.com posted Dec 8 2010, but a number of sites have photos of the two women. One site has also posted their addresses and phone numbers.)

Assange himself fears being eventually handed over the USA, where he feels he would not get a fair hearing and could face the death penalty for violation of the Espionage Act of 1917. Because of the current extradition proceedings between Sweden and Britain, handing him over to a third country would require approval from both countries, says Nils Rekke, legal chief at the Stockholm prosecutor's office. Rekke notes that Britain is a closer ally to the United States.

According to the Swedish Justice Ministry, since 2000, the U.S. has requested the extradition of seven citizens from Sweden. Five of the requests were approved, and two were rejected because the suspects were no longer believed to be in Sweden.

Britain and the U.S. signed a fast-track extradition treaty in 2003 intended to speed the transfer of terror suspects. Since it came into force in April 2007, 23 people have been extradited from the U.K. to the U.S., according to British government figures. Extradition lawyer Karen Todner said Assange would probably stand a better chance of resisting extradition to the U.S. if he were in Sweden than if he were in the U.K.

Some questions arise as to whether the Swedish government has been influenced by pressure from the US to seek Assange's detention. However, most Swedish legal experts agree prosecutors would never accept orders from politicians, which is illegal. But supporters of Asange note that Sweden has responded to US pressure before, including in the crackdown on file-sharing site The Pirate Bay, and the secret rendition of two Egyptian terror suspects.

GOLD IS STILL KING

2011-02-04T23:16:00.007Z

Leaving aside for moment the subject of power and power plays, as in Egypt and Wikileaks, let's talk about the other great subject, wealth.
We saw in Tunisia that when a leader/dictator falls, or runs into trouble, the first thing they do is to ship gold out of the country - and rumour says that Mubarak's family has already shipped tons of gold to the Netherlands.

In time of civil breakdown and real trouble, gold is still king.

Maybe the psychologically flawed and incompetent UK ex Chancellor, Gordon Brown, forgot that, when between 1999 and 2102, in 17 auctions, Brown as Chancellor of the Exchequer, sanctioned the sale of 395 tonnes of gold, 60% of the UK gold reserves, just before a protracted bull market. In other words, at the bottom of the market, at the lowest possible price, announcing in advance that he was going to do so, thus ensuring a loss to the country of 2 billion pounds.

Critics say that signalling such a large sale of bullion to gold traders, the Government helped to drive the precious metal to a 20-year low.

Philip Hammond, shadow secretary to the Treasury, said: "Gold traders confirm that it was because the Government announced in advance that it was planning to sell such a large quantity of gold that the markets became depressed. The low price Gordon Brown got for selling our gold wasn't caused by bad luck. It was a staggering display of economic incompetence that has landed taxpayers with a $7 billion black hole."

Figures released by the Treasury since show that the total proceeds from the sales was around $3.5billion. According to a Parliamentary answer, if the gold was sold last month, on December 15, it would have raised $10.5billion.

The difference - $7billion - would be worth £4.7billion if the proceeds were converted into pounds yesterday.

Returning to the present, the price of gold reached an all-time high of $1432 per ounce in December, rising 29% in 2010 following uncertainty in the equity markets and European sovereign debt problems.

The biggest individual holders of gold - Central banks, International entities and governments - are believed to account for approximately 16.5 percent of the world's gold, holding about 29,978 tons.

So out of interest, let's look at the chart telling us which countries hold the most gold. Here's the top 15. Guess who is at No 1? Yes, you're right.

gold bar and roulette wheel

1. USA

Value: $387.32 billion dollars

Tons: 8,965.6

2 GERMANY

Value: $161.99 billion dollars

Tons: 3.749.8

3. IMF

Value: $135.56 billion dollars

Tons: 3,137.9

4 ITALY

Value: $116.75 billion dollars

Tons: 2,702.6

5. FRANCE

Value: $115.97 billion dollars

Tons: 2,684.6

6. CHINA

Value: £$50.90 billion dollars

Tons: 1,161.9

7 SWITZERLAND

Value: $49.53 billion dollars

Tons: 1,146.5

8. RUSSIA

Value: $36.91 billion dollars

Tons: 854.5

9 JAPAN

Value: 36.43 billion dollars

Tons: 843.5

10 NETHERLANDS

Value: $29.67 billion dollars.

Tons: 675.2

11. INDIA

Value: $26.56 billion dollars

Tons: 614.8

12. EUROPEAN CENTRAL BANK

Value: $23.88 billion dollars

Tons: 522.7

13. TAIWAN

Value: $20.17 billion dollars

Tons: 466.9

14 PORTUGAL

Value: $18.21 billion dollars

Tons: 421.6

15 VENEZUELA

Value: $17.33 billion dollars

Tons: 401.1

However, I have heard it said that gold is the most secretive of all markets, so all published statistics from whatever the source may be open to question!
(Photos courtesy of fotosearch.com).

BEHIND THE KILL SWITCH

2011-02-04T01:04:00.002Z

Returning to my post on the switch-off of the Internet in Egypt on the first day of the current protests, Laura Flanders blogged an interesting piece in The Nation a couple of days ago, on the Social Media Off-Switch.

A US-based company seems to be the maker of the Internet off-switch. Tim Karr of Free Press notes the US company Narus, sited in California, was founded in 1997 by Israeli security experts.

(Free Press is a liberal non-profit reform group who are, in their own words, "working to make media reform a bona fide political issue in America. Powerful telecommunications, cable and broadcasting companies have plenty of lobbyists to do their bidding. We're making sure the public has a seat at the table, and we're building a movement to make sure the media serve the public interest.")

As the lobbyists put it: “Narus is the leader in real-time traffic intelligence for the protection and management of large IP networks…. Used by the world’s service providers and governments, Narus has developed and patented state-of-the art algorithms to detect network anomalies and manage unwanted IP traffic. Additionally, Narus has the unique ability to precision target and fully reconstruct all types of IP traffic, including e-mail, Web mail and instant messages.”

Egypt Telecom, the state-owned communications company, are a client of Narus. Others include Pakistan and Saudi Arabia. During Iran’s protests in 2009, dissidents were tracked, imprisoned and in some cases executed by the use of what seems to have been similar technology.

Narus is owned by Boeing, the nominally US-based company that has outsourced jobs all over the world—and the US State Department has been promoting them. So I guess the US has also bought this tool for themselves - though it's obvious that any country would find this an extremely useful tool to have in times of trouble.

TOR, EGYPT AND ANONYMITY

2011-01-31T12:38:00.001Z

Below another great photo courtesy of The Independent. Protesters in Cairo fleeing tear gas

Following on from the previous piece on authoritarian governnments' ability to cut their citizens off from access to internet, there was a very interesting and explanatory piece in the Boston Globe Sunday, discussing TOR, which I refer to below:

TOR is a piece of free software to enable anonymity on line. It prevents somebody watching your Internet connection from learning what sites you visit, and it prevents the sites you visit from learning who you are.
It was formed in 2001 after two MIT (Massachusetts Institute of Technology) students developed the software with a US Navy laboratory.

According to the Executive Director of Tor, over the past 3 days 120,000 people, most of them Egyptian, have downloaded Tor software. It helps activists protect their identity from surveillance by repressive regimes, and get around blocked sites.

Since only the most internet savvy know how to use such software, there is enormous value in training people to use it, said John Palfrey, co-director of the Berkman Center for Internet and Society at Harvard University.

Iranian activists downloaded its software en masse duirng the massive protests after the contested 2009 presidential elections. Chinas has repeatedly tried to block Tor downloads and denied visas to the Tor activists who have trained people from over 20 countries, in workshops in Hong Kong and Europe.

One of Tor's main software developers, Jacob Appelbaum, traveled to Cairo at the end of 2009 to hold workshops on how to use the software. The training clearly paid off, because before the internet 'died' in Egypt last Thursday, so many people rushed to download TOR that one of its servers crashed.

A few pathways to the net have remained, including one ISP (Internet Service Provider) which services banks or the Egyptian stock market.

To read the original article, google Boston Globe and search for Foreign Activists Stay Coverered Online by Farah Stockman, Jan 30,2011.

THE DAY THE INTERNET VANISHED

2011-01-29T22:44:00.058Z

Below is courtesy of the Independent. A great shot of the building of the National Democratic Party, on fire.

As Egypt burns, we're seeing an unexpected use of power, and a pretty scary one, at that - the arbitrary removal by the authorities of the peoples' main means of communication with the outside world.

One of the most powerful tools in the world today, which is open to everyone, is the Internet. The Egyptian authorities have simply disconnected the country from the Internet, including Facebook, Twitter etc. and also disconnected the mobile phone network.

Egypt has one of the most advanced telecommunications markets in the Middle East yet shortly after midnight a couple of days ago, internet traffic in and out of the country slumped, Facebook received "only minimal traffic from Egypt, and Google Inc said people in Egypt are unable to access Google and You Tube.

Jim Cowie, chief technology officer at Web-monitoring firm Renesys Corp, says: "It probably doesn't require flipping a switch or pulling a plug. Network engineers can log into routers and type in text that blocks service providers from sending out a signal. To shut down the Web, the government likely told network providers to "turn off" connectivity, a legal directive under Egypt's telecommunications laws.

Vodafone said it was ordered to suspend mobile-phone services in selected areas. "Under Egyptian legislation, the authorities have the right to issue such an order and we are obliged to comply with it", Vodafone explain.

So, while Egypt has opened up the telecommunications market, operators are still controlled by the authorities - in other words, they can be silenced whenever the government wants.

So, the obvious question after this is: does every country, including the UK and US, for instance, have it in their power to cut us all off from these services whenever they choose to do so?
That's a frightening thought - though I assume that in a democracy, the authorities would never do this. Come on, they wouldn't, would they? Could they?

For the answer to this, http://www.bloomberg.com/news/2011-01-28/the-day-part-of-the-internet-died-egypt-goes-dark.html It's a great piece.

REVENGE, RETRIBUTION AND ANONYMOUS WARRIORS

2011-01-28T15:04:00.018Z

Moving away from the light-hearted approach to Wikileaks, and its glamorous leader, Julian Assange, here's a small piece about the more serious side of things.

The basic subject is, as usual, power. In the case that follows, we're looking at the power used by the authorities to attempt to deal with the power wielded by the urban warriors on the internet.

The five people, between 15 - 26, arrested yesterday for mounting the revenge DDOS attacks that temporarily crippled Visa, PayPal and Mastercard, after they cut off financial services to Wikileaks, have now been released on bail.

A DOS (Denial of Service) attack works by flooding a server with more network traffic than it is capable of processing. This hinders or prevents the server’s normal operation and sometimes causes its complete failure. In a DDOS (Distributed Denial of Service) attack, as in this case, multiple PCs coordinate the attack.

The arrests are the first in investigations in the UK by the Metropolitan Police's Central 'e' Crime Unit, and are "part of an ongoing investigation into Anonymous which began last year following criminal allegations of DDOS attacks by the group against several companies," Scotland Yard said. "This investigation is being carried out in conjunction with international law enforcement agencies in Europe and the US."

These attacks are illegal in the UK under the Computer Misuse Act and carry a maximum fine of £5,000 or a max. of a 10 year sentence.

The FBI has issued more than 40 search warrants across the US in connection with its investigations into Anonymous.

The 5 arrested are assumed to have links with Anonymous, a leaderless internet-based group, sometimes referred to in the press as hacktivists, though it's not accurate to refer to them all as hackers. Anyone can join Anonymous by downloading software and following the group's instructions, so joining hundreds of other computers, which can be brought into play to mount DDOS attacks. Members are mostly young and male. Since the Wikileaks saga got going, the membership of Anonymous has increased.

It's ironic that the 5 arrested, though apparently having links with Anonymous, seemed unable to keep themselves anonymous, as the police found them through their IP (Internet Protocol) addresses, which they hadn't hidden. There is technology out there that makes one's connection anonymous, so neither the authorities nor anyone can see who is behind the computer. Of course, maybe the 5 didn't want to hide themselves. Who knows? But as they were displaying their addresses for all to see, I'm surprised the police took so long to get to them.

The Wizard of Oz

2011-01-11T02:21:00.004Z

Julian Assange is a wiz of a wiz, if ever a wiz there was.  Put him, a computer and the internet together, add a big rebellious anti authority streak, a bunch of devoted followers and fans, and there's nothing much he can't do.   He is a top-of-the-class hacker, an all time uber geek, a punk rock pirate.

And a babe magnet on a big scale. Just check out the girly sites on the web devoted to this man, with his doe eyes and pale skin bathed in the strange white light of theTV screens and flash cameras that capture his image so regularly. With a toss of that white blonde hair, and a rare enigmatic smile,  he draws women to him - even though a couple of ladies have been giving him some aggro in Sweden lately. Something to do with condoms, or the lack of . . .

But there seems to be a protective female shield put up around our boy - remember, it was the beautiful socialite Jemima Khan who put up a lot of the bail money to spring him from prison recently, and he came out to an adoring throng with phrases like 'I want to have your baby' tossed at him.

Rolling Stone has claimed him for their own - but is this photogenic, softly spoken, brilliant computer programmer and man-on-a-mission, who has taken on the power of the USA by publishing something like 91,000 classified US documents on the war in Afghanistan, about to crash and burn? Whatever happens, we're not just talking about a pretty face here. Julian Assange has a hell of a lot of courage but he's made some very powerful enemies.

Is he hero or villain? Or just, for all his brilliance, a touch naive -  an extraodinarily gifted product of a very troubled childhood.

He was reportedly born in 1971 in Townsville in Australia. He and his mother and half-brother spent his childhood fleeing the father of that half-brother. It seems this man became a member of a scary cult, led by a female ex-nurse who had her own weird ideas on kidnapping and bringing up children.

In all, Julian was enrolled in 17 schools and six universities by the time he finally came into adulthood.. He took adult education classes in physics and maths at Melbourne Uni and launched himself into the mysterious world of hackers. In 1995 he developed 'Strobe', the first free port scanner, which allowed hackers to penetrate networks throughout the world. Two years later he developed another piece of encryption software, to allow hackers to conceal their identities when penetrating computers worldwide.

He discussed his expertise in the wonderfully titled 'Underground Tales of Hacking, Madness and Obsession on the Electronic Frontiers", published in 1997.

(Also, along the way, he married and acquired a son).

And in 2006 he put all these stunning computer skills together to set up Wikileaks.

And that's very much an on-going story, for later.

Leaks

2011-01-09T23:34:00.002Z

It's nearly the witching hour in London so here's a bit of fun to go to bed with:

What more can I say . . .

Doing 2011 the Roman way

2011-01-03T01:41:00.004Z

Mr Abramovich threw a 5 million pound bash at the complex he bought recently at Governor Bay on St Barts.

Mr A bought the complex, shown on the R, in 2009. (The photo was taken by Laurent Benoit, famous for great shots of megayachts, and the marina at St Barts, where he lives). It comprises 70 acres and cost approx. 90 million dollars, which makes it one of the most expensive private properties ever sold.

It consists of a cluster of cottages round a main villa, open Balinese bungalow-style buildings, so it's apparently like you're living on the beach. Personally, I've never liked the sound of this, a bit like a super version of carry-on-camping - not for me. I wouldn't turn it down if it was offered, mind you, but I'd sell it on immediately and find something a little more civilised.

As the for the NY Eve do, well, absolutely everybody who was anybody in the entertainment world seemed to be there and they're all listed in the popular papers, all predictable, and so I want bother naming them all. You know who they are, anyway: the surgically beautiful Miss Demi Moore and her like and the shoals of pretty little things who swarm around the big fish as they cruise the world's oceans on their megayachts.

Lots of money sloshing around and every entertainment money can buy - including underwater speakers and a swim-up bar - but as I've said before, wealth does not necessarily equate with power, and show-biz wealth, outside the flimsy world of illusion the celeb/showbiz crowd inhabit, definitely doesn't equate with real power in the real world. So, who were the really powerful people at that shindig? As often, the really interesting people didn't get a mention and no doubt very wisely kept well away from the cameras.

So let's move on, nothing interesting to see here.

And by the photo of Roman in the Daily Maily, he's bored by the whole thing. After all, he's done it so often before. Maybe he's just doing it for Daria Zhukova ('Dasha' to her friends), his present partner.
This photo was taken by BigPicturePhotos( this is quite a routine one for them, for they do take the most magnificent photos).

I'm a great admirer of Abramovich, he survived the fire-storm of the fall of Communism. He deserves everything he's got - for his courage, his brain power, and for holding his nerve when so many others lost their's. He remains one of the oligarchs who is still safe in his own country. He remains a friend of Vladimir. He hasn't made any mistakes. Machiavelli would bow before him. And I mean that as a compliment.

Intelligence is not much good if it doesn't go hand in hand with the survival instinct. I don't see any intelligence in deliberately alienating people who have real power, unless you're pretty sure you have the resources and back up to win them round to your views. Otherwise you end up like poor old unwise Khodorkovsky, once the richest man in all Russia, and now languishing in a prison cell in Sibera. Where's the sense in that?

So that's the end of the NY celebrations - back to more serious things tomorrow.

Seeing 2011 in

2011-01-02T19:13:00.004Z

Before work starts in earnest tomorrow, let's look at where some of the wealthy and powerful are spending the New Year break.

The Chancellor, George Osborne, is in Switzerland. At Klosters apparently, tho' his office said Davos, where the annual World Economic Forum is held. Of the two I prefer Davos - but there's not a lot in it, the two resorts are only 10km apart and share the same ski slopes.

The Royals prefer Klosters. This gorgeous shot above is of Klosters at night, (thanks to the skisafari.com site who will tailor-make skiing hols for you, if you'd like to join the royals and George.)

Davos was immortalised in literature in Thomas Mann's The Magic Mountain, and its dry, pollen free air has attracted a lot of health research institutes, who have settled there.

If you need a hotel in Davos, George when last there stayed at the Fluela Hotel, pictured R. It's a traditional 5-star, been going since 1868 and the same family still own it. They say no more than 130 guests and no less thant 90 staff to care for them - and it's opposite the train station. Crackling log fires and a pianist in the bar - and it greatly endears itself to me because it allows pets. No charge for the animals, but their food is extra - come on, now, you can't have everything. I think Mr Osborne shows a lot of taste in having picked this hotel to stay in on an earlier visit.

And where is Mr Roman Abramovich? Doing something quiet and low key for the New Year, I expect. But perhaps not. Next post coming up.

The ice-man cometh . . .and all that

2010-12-27T03:42:00.005Z

Power and the sources of power, and the people who wield it, fascinate me. Yet I find the Wikileaks saga, with its cool blonde condom-hating front man, Julian Assange, an example of a rather spurious type of so-called power - in fact, there's something vaguely comical about the whole thing.

The organisation is murky in the extreme, the cast of characters are, to put it mildly, unusual in their life styles and behaviour, and it is never obvious who is briefing who, lying or telling the truth, pushing a hidden agenda or simply fantasizing and making some of it up as they go along. It's a beautifully complex story and God alone knows who and what is at the back of it because for the life of me I can't see anything that tells me who is funding it, and what the overall agenda is.

As Wikileakileaks.org says, Wikileaks' tagline is 'We open governments' yet the organisation itself is about as open as North Korea.

Assange's admirers seem to particularly love him because he's sticking one to the good old US of A. Yeah, right. He doesn't seem to like condoms either - though he says himself that women have been very generous to him. Seems it's not just gentlemen who prefer blondes.

He has a certain star quality, he's photogenic - and, though I hate to use that cliched word, face to face he probably has charisma. My goodness, I'll be saying he's got the X-factor next. Time to move on and ask what he's actually done.

Amid all this fuss and uproar, what has Wikileaks really achieved? As far as I can see, nothing has been leaked that most people interested in current affairs didn't already know, or suspect. So the Saudis have been urging the US to bomb the hell out of Iran? Come on, is anyone really suprised that having Ahmadinejad as a near neighbour on the other side of the Persian Gulf makes the Saudis nervous?

Where did it all this begin? Maybe I'll take a look at the history of it in the New Year.

Ice Cold in Norfolk

2010-12-25T16:47:00.004Z

And who colder than the Ice King himself, judging from the photos and demeanour of the exotic Julian Assange?

Assange walked free on 16 December - temporarily on bail and staying withVaughan Smith in Norfolk, at Ellingham Hall, Vaughan's 600 acre 10 bedroom Georgian mansion, pictured on L.

Vaughan Smith is ex Grenadier Guards. Won the inter-Army shooting championships. Became independent cameraman and video journalist working in many of the major conflict zones.

He is also is the founder of the Front Line Club, a media club in Norfolk Street, near Paddington Station. Picture and info below from the Frontline Club webset.

The Frontline Club opened its doors soon after the Frontline Television News agency closed down. Frontline TV was created over Christmas lunch in the midst of the chaos and confusion of the Romanian revolution. It went on to become a key player in the independent fringe of television newsgathering.

The Club quickly became a centre for a diverse group of people united by their passion for quality journalism and dedication to ensuring that stories that fade from headlines are kept in sharp focus. It exists to promote freedom of expression and support journalists, cameramen and photographers who risk their lives in the course of their work.

More to come but for now Christmas Day evening begins in earnest, and I have to dress for dinner (yes, my host and hostess expect that sort of thing, and why not) and get into the spirt of things.

Reactivating this blog and wishing you all a very Happy Winter Holiday.

2010-12-25T15:39:00.037Z

Christmas Tree and Angels at Rockefeller Center.

Christmas Day 2010 and, after a year's absence, I am reactivating this blog. 2010 was a busy year, and I had a book to write - the book is approaching the finishing post, so I now have time to devote to keeping this blog going as well.

I'm Christmassing in New York, and flying back, hopefully, tomorrow. Due to weather, everyone else got away before me, so Christmas Day, though very civilised, has not been the one I planned. With various aspects of work/life on my mind, I'm taking time out from my host and hostess's Christmas party to allow myself a short diversion to catch up on my favour subject - where does real power lie, and who has it? A short post may follow, to get the ball rolling, then it'll be time for dinner, and after Boxing Day all should be back to normal.

A friend in Tomsk

2009-12-07T05:40:00.007Z

Events yesterday, with the news that Russian may have been behind the leaked climate-change emails from the UEA, seem to support the interesting argument by Evgeny Morozov I discussed in my last post.
(photo of Tomline from Mail on Sunday).

Morozov suggests that the commonly held belief that the internet has put power into the hands of activists and democracy supporters, so they can therefore make their voices heard and influence events, is an illusion..

As he points out, protests are very easy to organise and launch from the Internet, but because it's done so openly on sites like Twitter, it's also much easier to monitor - and control.   Morozov illustrates this with the recent Iranian protests. Activists used Twitter to get a lot of young people out on the streets - but the authorities now know who those people are.

And in any case, with the increasing availability and use of data mining, can any activist be sure the authorities are not reading their emails or decrypting their internet traffic, how ever well they try to hide their tracks?

It doesn't require much sophistication to obtain a password of one Facebook user, and from that link on to his other social internet connections. The Iranian authorities were well aware that Twitter and Facebook members were behind the 'green revolution' in which thousands of American Twitterers coloured their profile pictures green in sympathy with the democracy lovers out on the streets.

But  the fact that the Iranian authorities now have proof that foreigners are interfering in their country's affairs, isn't going to help the home grown young activists much, is it?

The Daily Mail yesterday suggested that the hacked emails from the University of East Anglia were released to the world via a tiny internet server in Tomsk.

The server, Tomcity, and its parent company Tomline, offer an internet security business to prevent hacking and bugs. Other division of the firm are involved in laying the cable which provides high-speed internet access to companies in the Siberian city. The server is believed to be used mainly by Tomsk State University, one of the leading academic institutions in Russia, and other scientific institutes.

.In 2002 Tomsk students reportedly launched a 'denial of service' attack on a portal whose site material reporting on Chechnya angered the Russian authorities. It was said that they had been used by the Russian secret service, FSB, to shut down the website - an accusation which can be plausibly denied by the government, of course.

Whatever? As far as I'm concerned, in this instance I'm all in favour of the hackers.   The climate change issue is a bandwagon, and we're all entitled to know both sides of the argument. So anyone who enables us to get more information about something which will inevitably involve all of us paying even more taxes, is to be congratulated.

So Professor Ross McKitrick doesn't agree with Professor Jones - so what? It's a free country, McKitrick is entitled to disagree and have his views considered - not dismissed out of hand as 'garbage by Jones, who tried to stop his work being published.

Of course, there's more to this story, but it's early hours Monday now, so more on this later.Except to quote from Tom Lehrer, a very funny and clever academic American satirist and singer, who once had a famous number involving Tomsk which begins:

I have a friend in Minsk,
Who has a friend in Pinsk,
Whose friend in Omsk,
Has friend in Tomsk   . . .. .

and ends:
To Tomsk, to Omsk,
To Pinsk, to Minsk,
To me the news will run . .. .

So more news on this will run on this site later - and meanwhile you can pick up Lehrer on You Tube, singing about his friend in Tomsk called Lobachevsky.

(And look out for Evgeny Morozov's book on the internet and democracy, due out in 2010 - he's a very interesting writer).

Power and the Internet

2009-12-04T15:50:00.005Z

In a week in which Murdoch took on Google and Mandelson took on Murdoch, I thought I'd have a look at one of the key sources of power in the world, the Internet, with its ability to give everyone a public voice. At first glance it looks as though the individual, however lowly, can now join up with similarly minded others and really begin to change the world.

But is that, in fact, just a comforting illusion to allow people to believe they are gaining control?

The conventional view is that in this new world of the world wide web governments are bound to lose control, being eventually forced to cede it to angry, freedom loving, energetic young netizens, spreading their own agendas on their blogs and social networks.

Big names go along with that view. Nicholas Negroponte, author of the seminal text, Being Digital,  sees modern technology leading to the the future decline of the nation state. Many agree with him, believing that by using the power of the Internet, networks of activists can gradually take over and do for the power of the establishment.

But some people see it differently. Evgeny Morozov, Fellow of Georgetown University, for instance, writing for Forbes, takes a more wary view point - and makes a very sound case for it.

It's true that on the surface, it looks as though we are at the beginning of people power. In the recent past, we've seen, for instance, how a network of social netizens can whip up a storm against a journalist writing about the death of a boy band singer ie: Jan Moir and Stephen Gateley - or get together a concerted attack by the many on the one solitary voice who accused an actor of being boring on Twitter ie. Stephen Fry. In both case, the mob was whipped up very efficiently.

But this has nothing to do with real power, it's an emotional storm in a very small teacup.

As Morozov points out, because a group can be pulled together very quickly on line, to express virtuous outrage about pop stars and actors, climate change, poverty, the war in Irqa etc. so can more heavyweight groups be pulled together. ie: networks of religious fanatics: ultra nationalists: and internet adept groups from Latin America. He points out how warring Mexican gangs are big on You Tube, touting their latest guns and upload graphic videos of the beheading of their enemies. The internet is not just in the hands of harmless well meaning do-gooders.   The net is there for saints and sinners alike.

History shows it is usually unwise to underestimate the power of the establishment to adapt to new challenges. Morozov points out that authoritarian states have shown a capacity to embrace new technology very efficiently. He cites the propaganda films of Leni Riefenstahl in Nazi Germany, or the brain washing radio broadcasts in the old Soviet Union.

And the establishment learns fast, and has access to some of the best advisers. Clever young geeks can work for governments of many different persuasions. Some of them hack for fun, but some talent will sell itself to the highest bidder, and that bidder may be an authoritarian government. Most powerful governments, like China, have moved on from the crude model of controlling online discussions by censorship and filtering. The Chinese soon realised that didn't work when everyone had access to publishing on line with blogs, twitter, my Space etc.

So what did China do? They created a decentralized, 20,000-person-strong group of what is known as the 50-cent party, members of which get 50 cents for each comment they post -  they identify sensitive online discussions and try to hijack the conversation in directions supportive of the government.

Examples like the above are what Morosov calls the Spinternet. Every government does it differently.

The Russians outsource to new media start-ups, who then create social networks and blogs that promote a pro-Kremlin ideology. The Russian parliament has been discussing a 'Blogger's Chamber' that would invite famous bloggers (obviously those taking the party line) to set their own standard of what can and cannot be discussed. A good example here of the apparent ceding of state power that, in reality, simply reinforces the establishment's control over the Russian internet.

The Nigerian government has been reported to be constructing an 'anti-blogging project' that would fund hundreds of pro-government voices, paying them in cybercafe vouchers, to counter the influence of oppositional bloggers.

In Iran, the clerics have Qom-based blogging workshops, to control much of the online discourse about religious issues. And the Iranian authorities have already singled out Facebook and Twitter as sources of the 'color revolution' that got thousands of American twitterers coloring their profile picture green in sympathy for the freedom seeking activists in Iran.

The examples above, given by Morozov, concern authoritarian states. But it would be naive to assume that our democracy-loving states are not doing exactly the same thing.

So maybe the future does not look that rosy for the little man at his laptop trying to organise a movement for some noble cause he believes in. Perhaps Big Brother is even now peering over his shoulder and assessing whether he needs to be reined in. One can only hope that he is also peering over the shoulders of the bad boys who are planning more destructive things - and let us hope he believes with absolute surety that he can distinguish between the the good and the bad.

But hang on, that's just what authoritarian states believe they can do, isn't it?

What a moral morass this whole field is!

Evgeny Morozov is contributing editor to Foreign Policy, blogs, and is Yahoo Fellow at Georgetown University for the study of diplomacy.
He has a book coming out next year, published by Public Affairs, about the Internet and Democracy, and I'll certainly be at Amazon on publication day ordering a copy.

Birkenfeld billions

2009-12-02T01:45:00.007Z

Je Reviens - unfortunately sometimes life and work just get in the way of blogging - so let's just blame my recent silence on 'Events, dear boy, events.'

So, back to business, to find that the wonderful UBS/Birkenfeld story has moved into even more interesting territory, as Brad the whistleblower bites back. I've long thought there was endless money to be made out of this saga and that Bradley Birkenfeld would come out of prison, write a best selling book, then Hollywood would come along and make a great film out of the whole thing.

Who to play Birkenfeld? That's a tricky one - depending on whether you view him as hero, or villain. Tom Cruise for either, perhaps?

Anyway, to update: The New York Times is reporting that Brad Birkenfeld and his lawyers are hoping to use a new federal whistleblower law to claim a multibillion-dollar reward from the American Government.

Birkenfeld, who begins his prison term in January, is being represented by the executive director of the National Whistleblowers Center, Stephen M. Kohn. It was Mr Kohn who sucessfully represented Linda Tripp when she helped to expose the Monica Lewinsky scandal in the Clinton years.

According to the NY Times, Mr Kohn says, 'We are seeking at least several billion dollars.' (Big thinking here, does no-one think in terms of millions anymore?)
Legal experts say the odds in their favour are pretty good.

Brad Birkenfeld pleaded guilty in June 2008 to conspiring to defraud the US government, but - surprise, surprise - in spite of that, whistleblowing experts think he has a persuasive case to make a claim.

A spokesman at Phillip & Cohen, a law firm that specializes in large whistle-blower claims, is reported as saying 'It was very useful information from inside UBS that Mr Birkenfeld provided. The law is pretty clear on this."

Mr Kohn stands to reap a fortune if Bradley Birkenfeld wins.

I have to 'fess up here and say I have nothing but admiration for this display of chutzpah. Can't blame Birkenfeld for trying and if he and Kohn bring this off they deserve a standing ovation. But now that Birkenfeld himself has opened the gates to an absolute onslaught on tax havens, when they get their billions where will they put them?

Off shore account, anyone . . .

The Blackberry Five safe and well, thanks to City Critters and the fats cats at Goldman Sachs

2009-11-15T11:12:00.002Z

Because it's Sunday and it's nice to post good news ocasionally, I couldn't resist following up my earlier New York/Goldman Sachs kitten story, with this great photo of the five abandoned kittens - who were finally rescued by the lovely people at City Critters, with a little help from their friends at Goldman Sachs, who paid for the little critters' medical checks and helped place them in good homes.

The kittens were rescued by http://www.citycritters.org/ - a small animal rescue group in New York, staffed with voluntary help by people who all have fulltime day jobs as well. They mainly work with the many cats living rough in the city - and some dogs, too.

They're a great organisation, and do a lot of good. If you're interested, live in New York, or just like cats, visit their website, where you can also make donations for the animals.

The charming photo is courtesy of someone - (sorry, don't have your name) - posting a comment and photo in Downtown Express, the newspaper who was covering the story.

I used to live in New York on the corner of Bleeker and have many happy memories of catching the No 10 bus almost outside the apartment, and heading up town for yet another wonderful New York kinda day.

Diamonds in toothpaste and hissy fits - an everyday tale of whistle blowing

2009-11-13T21:22:00.019Z

In this piece I'm assembling the facts as I see them, about the origins of the row between the Swiss Bank UBS and the US income tax people at IRS.

It falls neatly into a story of both wealth and power. In this case the wealth of the invidual, set against the power of Government bodies and commercial organisations. Plus here we have an added element in the mix, the power of one very disgruntled whistle blower.

In 2001, Igor Olenicoff, a multi-millionaire real estate mogul living in California, flew to Switzerland to meet Bradley Birkenfeld. (Birkenfeld is on the left of the photo - from the Daily Telegraph).

This was to prove a very unlucky meeting for Mr Olenicoff, and for many others, and it proved to be the starting pistol that begun the present IRS blitz on off shore companies and so-called tax havens. And nearly brought down one of the great banks of the world, UBS, the Swiss bank specialising in wealth management.

Birkenfeld, now 44, had lived in Switzerland for 13 years, working as a financial adviser to the rich. Since 2001 he has been a director with UBS, living the charmed life of a highly paid expert in tax affairs. He had a million-dollar house under the Matterhorn in Zermatt and an apartment in Geneva and drove a 50,000 dollar BMW.

Birkenfeld looked after important clients for UBS's private bank, catering for US citizens with offshore accounts. Earlier, Birkenfeld had worked for Barclays Bank in Geneva and Mr Olenicoff had been one of his clients. When he left Barclays to become a director at UBS, Birkenfeld took Mr Olenicoff with him. Mr Olenicoff was his biggest client.

Using offshore accounts is not illegal for United States taxpayers, but hiding income in so-called undeclared accounts is. Switzerland does not consider tax evasion a crime, and using undeclared accounts is legal there.

Mr Olenicoff had approached Birkenfeld in good faith, believing, as any of us would, that he was dealing with a decent and trustworthy professional man, representing one of the great banks of the world. He naturally assumed that everything he said would be in confidence as he was talking to a man whose profession was advising on offshore banking. No doubt, Mr Olenicoff was paying a lot of money for the privilege of Birkenfeld's discretion and advice. It seems to me he was betrayed, in the most treacherous manner, by an individual who was himself doing exactly what he was condemning his client for doing. The hypocrisy of Birkenfeld's behaviour is staggering - not to speak of his stupidity in thinking he could get away with it.

Birkenfeld took Mr Olenicoff's money, gave him advice, helped him move possibly hundreds of millions of dollars from the Bahamas to Switzerland, smuggled several hundred thousands worth of diamonds into the States, hidden in a tube of toothpaste -

- and then sold both his long term client and his ex-employers (who had kept him in luxury for years) straight down the river and into the hands of the IRS, the American tax authorities. The IRS, who didn't see this one coming, took a little time before they realised that their whistleblower, the apparent hero who was claiming virtuously to be so shocked when he found out what UBS was doing that it was his moral duty to tell on them, was hiding the fact that he himself had been doing exactly the same thing.

That's why, unusually for a whistleblower, he's just go 40 months in a state penitentiary, instead of the praise he might have got.

And the whole tacky story seems to have had its roots in little more than a hissy fit by Birkenfeld when he got a less than favourable annual report from UBS, and a smaller bonus than he was expecting. He flounced out of UBS and into the hands of the taxmen, taking his unsuspecting client with him.

Shakespeare talks of how 'one may smile, and smile, and be a villain.'
Well, for 40 months at least, I suspect Birkenfeld won't be doing much smiling.

And by the way, the client who trusted him got a suspended sentence, paid back some $50 million, and was fined $3,500. Maybe, like me, the court had considerable sympathy for Igor Olenicoff.

EVEN GOLDMAN SACHS CAN GET IT WRONG

2009-11-13T12:41:00.041Z

The downside of being rich and successful is that you have to be ultra careful of your image.

There are certain groups it's safest not to get involved with. Animal lovers, for instance - and, particularly, cat lovers: steer well away from anything to do with fluffy, pretty, helpless little kittens. Put one foot wrong, and these people will mark you out, tell all their pals, and start a campaign against you - modern technology makes it frighteningly easy to do.
(This great photo is thanks to flickr via Marissa Cap)

Goldman Sachs quite accidentally became involved with a bunch of kittens. Seems their intentions were good - but  they took their eye off the catnip ball. And look what happened.

In New York, Rich Brotman runs an animal rescue service called City Critters.

In August, he found a litter of five abandoned kittens on a construction site on which Goldman Sachs are building their new HQ.  The youngsters were nicknamed Blackberries because of their dark coats.

Rich Brotman took the baby moggies home and approached Goldman S about help for paying the medical costs involved in making sure the animals were in good health. He also asked GS to canvas their employees, to see if anyone would like to adopt the the little fellows. Goldman Sachs were pleased to help.

However, it wasn't long before things were going rapidly downhill for the company.

In October a local New York paper claimed that promised money for the veterinary bills had not been forthcoming - and, insult to injury, the kittens had been brutally abandoned as no-one had given them homes.

In no time at all, this story was all over the internet, the blogosphere was in uproar, and Goldman Sachs wereThe Great Satan and marked with the number of the Beast, 666.  None of it was helped by the fact the company had just announced $3.2billion quarterly profits. All that cash floating around - and 5 little kittens abandoned to their fate. Oh, dear!

Except, it turned out it was all a big understanding, as the Goldman Sachs boys belatedly leapt into action to point out. All the bills had been paid - the delay had not been on their side, they had been waiting to be billed by the vet. And all the kittens had found good homes, two of them going to a friend of the Goldman Sachs lawyer. And, they added plaintively, they would never be unkind to kittens.

Goldman S should learn from this.  Their public image is not good at the moment, and when that happens, people will pounce on anything that seems to confirm that. It's obvious what happened here. To GS it was a minor incident, they agreed to do something about the kittens, and they did. Bills take time to come in, and get processed by whatever the section of their accounts dept is that deals with homeless kittens. Their mistake was in not keeping in touch and explaining things.

It could have been such a great tale to improve their image. They messed up. Maybe they should realise that a good PR department is worth just as much as their uber-clever money men. A shake up of their PR people, perhaps?

Goldman Sachs and The Dumb God

2009-11-10T02:46:00.004Z

I quote below two excerpts I rather liked from John Arlidge's long interview in the Sunday Times on 8 November with the Chairman and CEO of Goldman Sachs, Lloyd Blankfein.

But before that, in view of the publicity that has been given to a careless passing reference to God towards the end of the interview, (and which has occasioned a number of lunatic fringe contributions in the comments column) , I thought I'd start with one of my own favourites quotes. It comes from Ben Johnson's comedy, Volpone. Here is Volpone, the old fox himself , speaking as he gazes lovingly on his gold:

"Riches, the dumb god, that givest all men tongues,

That canst do nought, and yet mak'st men do all things;

The price of soul; even hell, with thee to boot,

Is made worth heaven"

First said in 1606, Johnson's words are as accurate today as they were then. Money still enables you to do all things . . .

So here are two short excerpts from John Arlidge's interview with Lloyd Blankfein.

Blankfein, acknowledging the public dislike of the banks these days, says:

"I know I could slit my wrists and people would cheer." But then, he slowly begins to argue the case for modern banking. "We’re very important," he says, abandoning self-flagellation. "We help companies to grow by helping them to raise capital. Companies that grow create wealth. This, in turn, allows people to have jobs that create more growth and more wealth. It’s a virtuous cycle." To drive home his point, he makes a remarkably bold claim. "We have a social purpose."

Later, Arlidge discusses why Goldman Sachs came out of the sub prime mortgage debacle better than other banks. He points up the fanatical attention to detail that characterises the company, and explains:

"Take the sub-prime mortgage sector, the ticking toxic debt bomb that detonated the economic crisis. One year before bad home loans brought down Lehman and Bear Stearns, forced shotgun marriages of Merrill Lynch to Bank of America and HBOS to Lloyds, and made Royal Bank of Scotland a national joke, Goldman’s daily valuations revealed it had suffered modest losses in its mortgage holdings for just over a week. At most banks, the losses might have gone unnoticed or been dismissed as a rounding error, but Goldman convened a meeting of senior bankers to try to find out what was going on. Even though the housing and mortgage markets were still buoyant, the bank did not like what it saw and began reducing its exposure. When the credit crunch hit, its losses in the mortgage sector were only $1.7 billion, lower than any other big investment bank. UBS lost $58 billion."

Note the final sentence. How are the mighty fallen? $58 billion down the drain - God in Heaven, what were UBS doing? Whatever possessed them to get into such murky waters when their whole raison d'etre is asset and wealth management

As for the apparent quote from Blankfein, 'I'm just a banker doing God's work," - for goodness sake lighten up, you people, it was a joke!

The Taxmen, The Bank and The Rat

2009-11-08T02:14:00.008Z

Getting together this piece about the IRS/UBS row over tax - triggered by the treachery of one Bradley Birkenfeld, left, a man who makes Judas Iscariot look like a Saint - it seemed to me that in essence the whole thing comes down to two words: Freedom or Tyranny.

Those are dramatic words, but this latest attack on the personal money of the

individual is a pretty dramatic affair.

In the violent slugfest between the IRS, the tax collecting arm of the United States Government, and the Swiss Bank UBS, specialising in wealth and asset management, we seem to be seeing a clear attempt by one side, aided and abbetted by the OECD, to do away with the long accepted distinction between tax avoidance and tax evasion - to the detriment of every one of us, rich or not.

Bear with me, because this is the boring bit where we have to define our terms.

In any civilised country, two elements of the tax system have always been recognised - Tax Avoidance and Tax Evasion.

Tax Avoidance is legal. Tax Evasion is not.

To put it simply, Tax Avoidance is me exercising my god given right to hang on to my hard earned money and not hand over unreasonably large chunks of it to a bunch of greedy politicians.

Tax avoidance is the legal exploitation of the tax system, to try and reduce the amount of tax that is payable by means that are within the law, while at the same time - and this is the relevant bit to the present row - making full disclosure of income to the tax authorities.

Examples of tax avoidance are, for instance, using tax deductions, changing ones business structure through incorporation, or establishing an offshore company in a tax haven.

Tax Evasion, however, involves deliberate efforts by individuals, or firms etc, to evade the legitimate payment of taxes by illegal means.
This usually means taxpayers deliberately misrepresenting or concealing the true state of their affairs, and includes dishonest tax reporting, such as underdeclaring income, profits or gains - or overstating deductions.

So, Evasion is naughty. Avoidance is good, because in a free country money belongs to the people who produce and earn it.

Of course, anybody in their right mind knows a certain level of tax is necessary - a portion of the wealth produced by the population must be given up to pay for the public good - for a decent health service, decent education, a trustworthy system of justice, national defence et al.

But why should we give the government an unlimited claim on our money to use as they see fit? And for what? Corporate bail outs, pet projects, foreign aid - the list goes on and on.

That's why this particular battle makes me nervous. Not because I'm rich. I'm not - though one day, in a good old capitalist society, I might be. And then I will want talented people around who will come to my aid and protect me from the grasping hands of my government.

Is there something a touch malevolent about the IRS relentless pursuit of UBS and it's clients? A sort of old fashioned socialist desire to punish people for having money?

Yes, I do know that in this difficult financial landscape, all Governments are scratching round to find every and any source from which they can raise revenue.

And I am not saying the wealthy are perfect - but tell me who is?

Mr Timothy F Geitner is the Secretary of the Treasury, the American equivalent of the UK's Chancellor of the Exchequer. I guess that makes him the boss of the IRS boys.

Do the words 'without sin' and 'casting the first stone' ring a bell, anyone?

more to come -including who are the OECD, and what's in it for them?

With A Little Help From My Friends . . .

2009-11-06T00:17:00.038Z

Any blog centred on the wealthy and powerful is bound to spend time discussing the answer to the eternal question about money:
When you've finally got it, where do you put it, and who are your friends?

This year has seen probably the most vicious and sustained attack ever on the two institutions who provide the answer to that question -- Tax Havens and Offshore Banking.

I am of course referring to the long running bout of fisticuffs between the American tax authority, IRS, and the investment bank UBS - sparked off by the rodent-like Mr Bradley Birkenfeld.

But before I embark on this sorry affair - with it's still strangely uncertain ending - I'll try to define the terms in play here. I'm going back to basics to talk about Tax Havens and Offshore Accounts. For those of you who are not enchanted by money, this may be a bit tedious, so it might be an idea to leave now and go and do something more interesting.

Meanwhile, off we go, beginning with - What exactly is a Tax Haven?

The FT Lexicon defines a tax haven as:
"A country with little or no taxation that offers foreign individuals or corporations residency so that they can avoid tax at home."

Expanding somewhat on that, The Economist tends to use Geoffrey Powell's explanation. Powell is the former economic adviser to Jersey and he says:
“ What identifies an area as a tax haven is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a world wide demand for opportunities to engage in tax avoidance.”

In a report in December 2008 the US Government Accountability Office expanded even further and said the following were indications of a tax haven:

nil or nominal taxes
*lack of effective exchange of tax information with foreign tax authorities
lack of transparency in the operation of legislative, legal or administrative provisions.
no requirement for a substantive local presence
self promotion as an offshore financial center

*note this one particularly, because it's the one that really got the goat of the IRS, and fuelled their thuggish bullying of UBS (as you can tell, I'm nothing if not impartial in this story!).

UBS is the Union Bank of Switzerland, a premier global financial services firm offering wealth management, investment banking and asset management. As they say on their website:

UBS is one of the world's leading financial firms. And we operate in two locations. Everywhere and right next to you.

Unfortunately, everywhere included America and right next to included Mr Igor Olenicoff, a multi-millionaire real estate mogul living in California, who was unlucky enough to innocently seek the help of one Bradley Birkenfeld, an employee of UBS.

But I'm jumping ahead. Before that, one more definition - offshore banking. The growth of tax havens is primarily due to the considerable growth of offshore banking, and this expansion is due to the globalization of the world's businesses.

So, what is offshore banking?
An offshore company is a business entity organized outside the primary jurisdiction of its home country. It locates all or some of its business operations in offshore havens, to take advantage of the low tax incentives they offer.
Offshore companies are regulated by their foreign tax havens, though it's fair to say that offshore companies operate in a pretty loose regulatory environment.
A company frequently incorporates in an overseas juridiction to avoid the extremely high taxation which they are paying in their home country.
An offshore company will be protected by the laws of their new domicile and obviously the laws enacted by these tax havens will be advantageous to the interests of the relocating company. For example, if you are trying to sue a company domiciled in the Cayman Islands, you would have to sue this company in the Cayman Islands where this company is chartered and incorporated. The laws in the Caymans are more considerate toward the interest of these companies than those, say, of the United States.

Some countries, such as the United States, have increasingly sought measures to regulate offshore companies which also operate in the United States. Some new laws have barred offshore companies from retaining employees in their offshore jurisdictions. There are also new regulations on the kinds of business operations which these companies could move to the offshore locations. Some countries have started to enact new measures aimed at making it illegal for companies to conduct business in the low-tax havens.

But there are big guns on both sides of this divide and the story aint over yet.

Next time, the battle in detail between the taxmen and the defenders of the rights of an individual to protect his own money. At this stage in the battle, it looks as though the taxman is winning - but nothing in the world of high finance is ever quite what it seems . . .

Private and Public Knowledge.

2009-11-05T12:20:00.016Z

Before I post a piece on Tax Havens and Offshore companies, this is a little prologue.

As I state in the heading of this blog, I make no moral judgements. Moral judgements easily become absolutes, and I'm nervous of absolutes.

All the information in the Sark piece is in the the public domain for the whole world to read. In fact, I stumbled across it quite accidentally. One of the great bonuses for a writer is the amount of information one acquires unexpectedly on the internet when searching for something completely different. I was actually searching for more detailed architectural information on Fort Brecqou, (which I absolutely love, and three cheers to the twins for conceiving and creating such a glorious building - and for those of you who are scathing about it, treat yourself to a good book on architecture and see what the experts say).

(I've posted photos of the castle on the two previous posts, so here for a change is the landing stage at Brecqhou - one of Ningaloo's excellent photos on Flickr. It's a bit small because my system for some reason wouldn't enlarge it. The notice board reads 'Private Island, No Mooring or Landing").

When I came across this stuff about the Larkers, I was intrigued. Especially as it fits in with a point I make over and over again. In all matters in life, unless you're actively marketing a product, a low profile is a good thing. If I was renting myself out as a company director I would, unlike some people, make very sure I knew the people I was getting into bed with, and what business they were in. But, even if it were all above board, if I discovered that the information about what I was doing was on line, I would feel uneasy.

Especially at this present time when, because of the Birkenfeld case and the tricky footwork of the OECD on tax havens, a lot of very sharp eyes are on the world of offshore companies.

The fact of present-day life is that almost any information can be acquired within minutes by someone sitting at home with a computer and an on-line connection. And any of it can be transmitted in a matter of minutes to the whole world.

I'm afaid times they are a-changing, Sark . . .

But moving on from this outpost of a bygone age, my next piece is going to be about the Birkenfeld/UBS storm and the OECD.

But let's remember one thing before any further discussion of tax havens and offshore companies - these are not illegal. Rules may vary from country to country, but the concept of tax havens and offshore companies is not illegal.

In this supposedly free Western world, we are still at liberty to try and protect our own hard earned cash from the greedy incompetent hands of our politicians (and in the UK, we now know the high moral ground on which these noble men stand!) But that protection is under fierce attack. I, in my miniscule way, would like to offer a defence of freedom.

More to follow . . .

Sark, Larks - and tax havens

2009-11-04T01:25:00.054Z

I suppose one of the considerations for choosing Brecqhou on which to build a great house is that Sark, of which Brecqhou is a sort of fiefdom (though the Barclays are changing all that; after all, when you've paid 2.3 million pounds for an island you are nobody's fiefdom!) - has no income tax. There's not a person in the world who doesn't want to own property and be resident in a place which has no taxes, me included. But I'm not sure I would have wanted close proximity to Sark.

In fact, Sark not only has no income tax, but no capital gains or inheritance taxes. There is no VAT and many businesses can be run without having to register for or charge it. And Sark has no company register.

The tax free status of Sark led, inevitably, to the jauntily called Sark Lark, though this is just another name for the old company-director-for-hire game. But times have changed. The Barclay brothers acknowledge that, and, along with the British Government, of which Sark is a Crown Dependency, take a dim view of the Larkers.

Sark has a population of about 600, and at one point it was said that most of the adult population was involved in the business of directorships. A resident of Sark, for instance, offers himself as a company director to some mysterious off shore company about which he knows nothing and for which he has no responsibility. This company pays no tax and is not required to declare its true ownership.  This arrangement can be lucrative, with directors' fees ranging from one to two hundred pounds, upward to tens of thousands of pounds.

Naturally, the would-be-director, having a high opinion of human nature, assumes the company he is linking up with is highly respectable. Nobody willingly wants their name associated with a bunch of money launderers involved in all manner of skullduggery.

However, greed is part of human nature and let's be honest about this, we all like money. This sort of set up looks very appealing. And the odd directorship or two is doing no-one any harm, is it? But, when it gets to the point where people might, for instance be company director of 700 companies, or perhaps have a couple of dozen phone lines running into their house,  or maybe, even, regularly have letters addressed to 200 different companies rolling through the letter box - then that is raising the bar, somewhat. And shortening the odds on trouble. I have to say, people playing this game are a lot bolder than me.

All it needs is for just one of a person's multitude of companies to crash land publicly, and in no time at all the boys in blue are coming up the garden path closely followed by several dozen hacks and the paparazzi, and that person's  photo is spread all over the newspapers alongside assorted crooks and conmen, and life is looking pretty ugly. And it wouldn't do much for the reputation of of the Bailiwick of Guernsey and the reputation of the Channel Islands generally.

Once upon a more innocent time, this sort of larking about was fun. But these days, with drugs lords and arms kings moving money around the world one step ahead of the authorities, and Bin Laden and his band of romantically garbed young men out and about fundraising successfully for their cause, none of this looks quite so clever, or safe.

Sark, though independent, is also part of the Bailiwick of Guernsey and in 2000 the Bailiwick introduced the Fiduciaries Law, which looked as though it would bring the Sark Lark to an end. But it's clear that hasn't happened.

The Barclays object to the practice.  So would I, in their position. And even in my lowly position, I object. This is a dangerous climate at the moment for anybody who wants the right to hold on to their own hard-earned money and find somewhere safe to put it. We are in the midst of a concerted attack on the whole concept of off shore funds and tax havens, by both the OECD in Europe and, in America, by the IRS tenacious pursuit of the Swiss bank UBS.

There are black and white lists of tax havens that are acceptable or not, as the case may be. And on the whole it is better not to be on the black list. It's always better not to draw attention to yourself. Sark's behaviour unfairly draws unwelcome attention to the Channel Islands, which run their affairs in a perfectly orderly manner. Like most so-called tax havens, the Channel Islands have reciprocal Tax arrangements with the UK and most other countries in the world. Sark has no such arrangement.

Some years ago my favourite high IQ guru, Lord Mandelson, was speaking in Guernsey. He was asked about the European attitude to the Channel Islands. He gave his usual wise advice. He said they were not really on the EU's radar screen and advised that they should 'remain unintroduced.' Exactly. Keep a low profile. Sark could spoil all that with its unsubtle greed. It's a quaint little feudal system which looks increasingly out of touch with the real world

Next post is going to be about where we are at present in relation to the fight back by the off shore world, against the present attack on its belief in its right to some measure of privacy to protect itself and those it shelters.

TWINS, FAIRY TALE CASTLES AND MYSTERIOIUS ISLANDS

2009-10-31T23:51:00.110Z

This is Fort Brecqhou, the mysterious Folly of the Barclay Brothers. (And this great photo is from Weydonia on Wikepedia.)

I think this fairy tale castle, a stunning combination of Gothic castle and grand palace, built on Brecqhou, a rocky island in the Atlantic measuring 200 acres (under half a mile), definitely counts as a first rate modern folly, a flight of fancy brought to life by the whim of two rich men.

It cost the Barclays Brothers 2.3million pounds to buy Brecqhou island and a further 90million, so it is said, to build this wonderful cloud capped tower of a palace. But as with all magic castles, mystery hovers over it and leaves me wondering . . .

I have a passion for islands, and in many ways the Barclays boys, David and Frederick, have bought exactly the sort of island I would go for. They didn't do the boring conventional thing and buy in a hot climate, in the Caribbean like Branson, or the Bahamas like Depp, or off Madeira like Spielberg. They bought in the Northern clime, in the cold Atlantic. OK, so Brecqhou is one of the Channel Islands and it's washed by the warm waters of the Gulf Stream. But in winter it's still a mighty chilly place.

But that's what I love about it - imagine it in deep mid-winter, heavy dark clouds looming over its battlements, stormy seas beating around the shoreline, howling wind and rain battering the sturdy modern windows, and inside all the warmth and comforts of the 21st century. The kitchen stocked with goodies from Harrods (or better still, Selfridges) food department, great wines in the cellar and chrystal champagne chilling in the huge freezers. How deliciously cosy is that! Especially for those of us who secretly harbour the Gothic tendency!

But despite my huge affection for the twins for creating something I would love to own and live in, I'm left wondering - why Brecqhou? Why that particular island? In many ways, it's not an ideal choice.

The Brothers, Sir David and Sir Frederick Barclay, twins born 10 minutes apart, have bought, run and sold businesses in property, hotels, shipping, leisure, gas and oil and the motor industry, turning over billions of pounds in their extraordinary careers. Plus turning many millions over to charity.

Not bad for boys who grew up in a family of 10 children, a family which their travelling salesman father brought down from Scotland in the 1930s during the great Depression, as he looked for work. The twins grew up in a house on the wrong side of the railway tracks in Kensington, West London, which they shared with several other families.Then, in 1947, when the twins were 13, their father died after a routine operation.

At 16 the brothers left school and begun their working life in the accounts department of GEC. But not for long. They left pdq to set up a painting and decorating business - and the rest, as the cliche goes, is legend - though I would say it's tenacity, brains, talent and a lot of hard work.

Once upon a time, a young David took his mother to tea at the Ritz in London. He told her that one day he would own the hotel. And now he does. And among many other possessions, he and his brother own The Telegraph stable of publications.

The brothers give huge sums to charity, donating £11m to Great Ormond Street Hospital in one year, and handing £3m to Alder Hey children's hospital in Liverpool in another. They were deservedly knighted for services to charity in 2000.

Journos sometimes refer to the Barclays as the Brothers Grimm - a bit unfair, this. Presumably it's because the brothers highly value their privacy. But surely the cleverest of the rich do try and adopt a low profile? There's enough free floating envy and hatred directed at the rich at the best of times, especially in the UK. Blinging it about and shouting how clever you are is never a smart move.

So you don't buy an island unless you want privacy - to choose the people you want to be with, to do your own thing , and just to be yourself, and for a brief moment retreat to the comfort of your own little world.

But strangely, as this photo below shows, Brecqhou is not a very private island. It is extremely close to another, rather bigger island, Sark. This is a shot of Brecqhou taken from Sark. A strong swimmer could probably make it across the divide between the two islands. (many thanks and credit to lostajy on flickr for this atmospheric photo).

David and Frederick Barclay bought Brecqhou in 1993. As the photo shows, it is separated from Sark by an extremely narrow sound, Le Goulliot Passage, which is traversed frequently by yachts in summer and fishboats all year. So there's a lot of sea traffic constantly in close proximity to Brecqhou all the year round. There are cameras around the the island's perimeter and there are Bond-style rumours of patrolling guards, possibly armed. Well, why not? It's a dangerous old world out there.

The island is 20 miles off Normandy and has its own water and electricity supply. General supplies are ferried in by boats, led by the Brecqhou Warrior.

The castle or fort was designed by Charles's fav architect, Terry Quinlan, who did Poundbury, the POW's experimental village in Dorset.
According to the entry in the excellent DiCamillo Companion website on architecture, Fort Brecqhou is the largest house build in Britain in the last 200 years. The entry then goes on:
"The house is a granite-clad castle on a quadrangular plan, built in the castellated Gothic style, complete with circular turrets at the 4 corners. It features giant twisted chimneys of the style developed during the reign of Henry VIII (this chimney style is unique to English architecture). The island was purchased by the Barclay brothers in 1993 for £2.3 million, with the cost of building the house, gardens, and outbuildings estimated at £90 million."

Truly, Brecqhou is a magnificent honey coloured cliff top fortress. Mock Gothic with towers, spires, gilded turrets, battlements, and a moat.
Within its thick walls is a Banqueting room 80 meters long, with gold leaf ceiling. And I'm told there's a hand painted ceiling in the Library inspired by the Sistine Chapel in Rome.
The walls are 3 ft thick granite.
There are 2 swimming pools and a helicopter pad.
There are outbuildings and cottages for the family, and presumably the staff, in the grounds.
And, predictably, rumour says there's an underground nuclear bunker.
Building was finished in 1996 after some 90,000 tons of materials were carried in by boat.

But the island is very close to its neighbour, Sark. Too close for comfort, perhaps? And Sark's curious 'house rules' impinge on Brecqhou. Sark believes in primogeniture, (an exclusive right of inheritance belonging to the eldest son). Has Sark not heard of rights for women and the feminist movement? The Barclays, like all reasonable people, want to be able to leave their money to their children as they wish. They took the island to the European Court of Human Rights and won, when the Court ruled against Sark's law of primogeniture.

So why did the twins buy Brecqhou, and not some other island unemcumbered by the feudal habits of their neighbour, in whose fiefdom they actually are?

But what could be better could also be worse. Cars are forbidden on Sark. And the big cheese on the island is referred to as the Seigneur - droit de seigneur and all that! Come on, it does rather bring up visions of lowly peasants doffing their caps to the High and Mighty. Definitely not for me. Though recently, thanks to Dave and Fred, his power has been curtailed.
But, Ah Ha, hang on a minute. Hey, There's no income tax!
So not everything is bad about little Sark.

And then there's the famous, or infamous or according to your view, 'Sark Lark'

But let's leave the 'Sark Lark' for the next post.  Personally I think it's all rather jolly, but then I'm a great believer in the freedom of the individual . . .

The Follies of the Rich

2009-10-30T02:37:00.053Z

One of the great things about the rich is that they can be as eccentric as they like, because they have the cash, and status, to indulge their wildest fantasies and fancies. Traditionally, the rich have always been great creators of Follies - the word Folly here being used in the sense of light-heartedness, not in the sense of something ill-advised. Indeed, the UK is said to have more architectural follies than anywhere else in the world.

Classically, Follies are buildings that have no practical purpose and are there purely for ornamentation. Follies began as decorative additions on the great estates of the late 16th and early 17th centuries and became hugely popular in the couple of centuries which followed. Some great estates already had picturesque ruins of monastic houses, for instance, but others lacked any such genuine and atmospheric buildings. So, the fake romantic and theatrical eye catchers begun to appear in the grounds of the big houses.

Below are a couple of examples of traditional follies - both from the grounds of Stowe in Buckinghamshire, courtesy the National Trust. On the left is the Temple of Venus and on the right the deliciously quirky triangular Gothic Temple - both serving no purpose except to please and amuse.

However, some Follies did have a practical use, as in the hunting tower at Chatsworth, shown below.

In the modern world, I guess we could say that Roman Abramovich's Eclipse - the biggest yacht in the world, as we all know - is an example of the Folly of a rich man. It is a magnificent feat of design and construction. But it's not a Folly I would have fancied. (see my earlier post about hubris).

I'm going to talk about another Folly, created by a couple of rich men, which is much more to my personal taste - but not until tomorrow, as the witching hour has long since come and gone.

So, tomorrow, let's have a look at the fairy tale residence of the Brothers Grimm - the wild and romantic Fort Brecqhou.

(for anyone interested in modern follies, see The Folly Fancier on my blog list, it's a great blog).

The richest man in the world - or not, as the case may be

2009-10-28T00:33:00.005Z

In 2008 Forbes placed Warren Buffett as the richest man in the world. Current opinion appears to place Bill Gates in that position, with Buffett coming in second.

Buffett, now in his late seventies, has just given 37 billion dollars to the Bill and Melinda Gates Charitable Foundation.

As he is currently in the news because of the very good recent interview with Evan Davis, I thought I'd give him a brief mention. Brief, because it's very rare for me to find a man of great wealth as excruciatingly boring as I find Buffett. He's a rich version of a dull man from the suburbs of Omaha, Nebraska, who appears to have been driven from his early youth to acquire huge sums of money, without seeming to know what to do with it when he got it. And when he gives it away, as my second para shows, he doesn't give it to a personal cause of his own, but to other people who do know what to do with it. For some reason, he seems to be regarded as a bit of a saint.

Buffett's profession is investments, that's all he does; he does it brilliantly, but it's all he does. He doesn't make, produce or create anything, except money.

Bill Gates, on the other hand, changed the world. That's why his photo is up here and not Buffett's.

(This great shot of Gates, all youth and geekiness, is from the seattleworld blog site.)

There's a good piece by Jeremy Warner in the Telegraph about the Davis/Buffett interview. As Warner points out, Buffett says he doesn't like the greed fuelled ways of Wall Street, but, as a little research shows, he still invests in the Wall Street big beasts such as Salomon Brothers and Goldman Sachs. Buffett says he thinks derivatives are 'financial weapons of mass destruction", yet it's clear that over the past year he has in bought extensively in these markets.

Buffett very nearly run into trouble with the regulators over sharp practices in his insurance subsiduary General Re, wholly owned by Berkshire Hathaway, Buffett's holding company. One unnamed associate said that "with a history as complex as Buffett's, there's bound to be an indictment in there somewhere".

In the Evans interview, Buffett reprised his often expressed view that the rich should pay higher taxes and not grumble about it. He doesn't seem to acknowledge that the basic objection, of rich and poor alike, is not to the concept of taxes - most people agree on the need to fund things like the health services, education etc. - but to having large chunks of their hard earned money taken off them by incompetent politicians who've never worked in a real job in their lives, and have no idea of how to handle the money efficiently when they get it.

Buffett also believes in not leaving money to his three children. That about sums up Warren Buffett to me. The man from Omaha is just not my kind of rich man.

Next post will be about two rather different rich men. They're not currently in the news, but I'm going to do a piece on them anyway - because I'm really rather taken with them.

Egghead Central or the Hadron Collider at Cern

2009-10-22T01:13:00.009+01:00

Temporarily branching off at a rather sharp angle, this post was sparked off by an article in The Times a couple of days ago on the troubles at the CERN accelerator in Switzerland.

As an experimental outfit Cern and its Hadron collider is phenomenally expensive to run, requires a huge input of wealth, and has been running for years. And it has, potentially, awe-inspiring power to change our world.

So, we have my two favourite words, wealth and power.

Without falling into conspiracy-theory-land, this article led me to ask - whose is the ultimate controlling hand or hands behind Cern? Where does the power lie to control and, maybe, manipulate, Cern?

We know it is a joint exercise with many European countries involved, all of whom contribute varying sums to it: we know there are observers from other countries: and in-put by scientists from just about every country in the world.

We know Cern, is big and impressive. Left is an aerial photograph (courtesy of the Cern website) of the 17 or so miles of tunnel through which the experiments are conducted. This concrete lined tunnel runs underground for 17 miles, at varying depths of 50 - 175 metres, beneath the Franco-Swiss border near Geneva.

In trying to answer my own question, the only information I find at a brief gallop through the web deals almost exclusively with the science side of Cern, basically physicists doing their own thing. There are the rash of more imaginative sites, with their talk of fascinating things such as ULF (ultra low frequencies) and UHF (ultra high frequencies) used to control weather, and the human system itself (that is scary.) But however accurate or inaccurate, these sites are still science based. It's all good stuff, but it's not what this post is about. This post is about people, and specifically people who wield power. We don't want to wander off into Dan Brown territory.

(Not that I have anything against Dan Brown, you understand. Respect to any writer who can sell as many copies as Danny boy can - and keep their private life moderately private.)

But back to my basic point. Cern is an organisation which needs huge sums of money to survive, and has the potential to wield real power. It's funded and run by a large, diffused group of people and countries, of whom most members are non scientists and probably do not fully understand what is going on.

In any organisation run by groups and committees,who are loosely joined and consist of many disparate interests, there tends somewhere in that set up to be a power base. It may not be obvious. It may be quite small. But with such huge sums of money invested, and possible world changing technology involved, surely Cern is not solely in the hands of uninformed politicians and physicists playing their wonderful, glittering games.

Who takes the ultimate decisions as to which experiment gets the most money? Who has the power to suggest or veto whatever is decided on? Where and who are the people, (as opposed to the scientists) the big names, who have control over Cern?

Am I missing something here? Am I asking a naive question, perhaps?

It's just that I have observed that within every big impressive project involving lots of money and the capacity to influence the way things are, there is always a small group of ambitious, clever men, anxious to get a handle on the goodies.

Well, it's late, and before I lose my credibility entirely, and descend into the script of a Bond movie, I will close down for the night, but leave one question open:

Are there lurkers in the shadows behind the big Daddy Hadron Collider?

Cherchez le pouvoir . . .

introducing Oleg Deripaska

2009-10-07T17:05:00.147+01:00

The reason for the delay in putting up this post is that the story of Oleg Deripaska is a hugely complex one, and indeed his present position is very complicated. He has large borrowing debts, and is also embroiled in several legal disputes, at least one already going through the courts. He has enemies.

But let's start with the official background. Deripaska is the head of the largest producer of aluminium and alumina in the world, Rusal. Below is an excerpt from his company's website:

"Having raised his initial capital by trading in metals, Oleg Deripaska acquired shares in the Sayanogorsk Aluminium Smelter and became its Director General in 1994. In 1997, Mr. Deripaska initiated the creation of the Sibirsky Aluminium Group, which was Russia’s first vertically integrated industrial group. It brought together Russian leading aluminium and alloys producers and three years after its inception the Sibirsky Aluminium Group became one of the world's top ten producers of aluminum products. The Sibirsky Aluminium Group was renamed Basic Element in 2001.

In 2000-2003, Mr. Deripaska was Director General of Russian Aluminium (RUSAL), which was set up as a result of the combination of aluminium smelters and alumina refineries of the Sibirsky Aluminium Group and the Sibneft oil company. In 2007, RUSAL, the SUAL Group and alumina assets of Glencore International AG merged to create United Company RUSAL, the world's largest aluminium and alumina producer. Oleg Deripaska became Head of the United company in 2009."

This cool professional description of Deripaska's rise conveys nothing of his climb out of poverty and obscurity to fight his way through a virtually lawless world of great danger - in which his life was frequently on the line - to finally survive and emerge one of the wealthiest and most powerful men in Russia.

Deripaska's life story so far is the stuff of a great book - a page-turning thriller that, turned into a work of fiction, would look just that, fiction. But it all happened. Frederick Forsyth, Ken Follet, Robert Harris, Jeffrey Archer, where are you?

Oleg Deripaska is, in some ways, the most interesting of the Russian oligarchs. The majority of them, generally speaking, are essentially money men. Deripaska is an intellectual. But an intellectual who rose to become, at one point, the richest man in Russia - tho' he's slipped a bit in the present financial climate.

He was born in 1968 and grew up in a small rural village in southern Russia with his widowed mother, and sometimes his grandparents when his mother, a clever woman and herself an engineer, was working in another city. He graduated with honors in physics from Moscow State University in 1993, and in 1996 he got an economics degree from the Plekhanov Russian Academy of Economics.

But he soon saw that theoretical physics was not going to get him very far in the chaotic world of post Communist Russia. He tried his hand as a metal trader. And it was under the tumultuous reign of Boris Yeltsin that Deripaska begun his abrupt, and some say violent, rise to wealth and power. Though in the chaotic conditions of a society in meltdown, it's clear that anyone who did not defend themselves violently would simply not come out alive.

Among all the battles for control of state assets in 1990s, none were more violent and bloody than the so-called "aluminum wars" when organized-crime gangs hired by competing interests assassinated dozens of people, in the fight to control the smelters of the aluminium industry.   Executives, politicians and reporters were run over, shot, had their throats cut or died in mysterious air crashes. The worst fighting was said to be around the Krasnoyarsk plant in Siberia. They called it the "Wild East". Out of this bloodbath of corpses and bits of body parts, Deripaska emerged the winner. Maybe because he was a lot brighter than the physical heavies battling around him, kept a very cool head, and held his nerve.

Deripaska himself says he owes his success to a lot of hard work. He certainly owes much of his success to great courage, boldness and brains.  One of his business associates is quoted as saying many people underestimated Deripaska. "He is one of the most intelligent people you've ever met,' he says, "and it's matched by ambition."

Early on, Deripaska understood that success in this new Russia would come from a mixture of force, poltical influence and personal connnections. In 2001, he married Yeltsin's granddaughter. He is very close to Putin, they go ski-ing together. Though rumour says there has been a little coolness of late - though it's possible that is just for public show.

And in 2004, Deripaska became pals with Lord Mandelson and the heir to the Rothschild dynasty, Nat, both of whom holidayed on his yacht.

Lord Mandelson himself has denied that, as the EU Trade commissioner, he gave trade concessions of up to £50m. a year to Russia's then richest man.  During his commissionership, there have been two cuts in EU aluminium import tariffs which have benefited Rusal by tens of millions of pounds a year.

But these are complicated areas of negotiation and as David O’Sullivan, the European Commission’s director-general of European trade, has said: “Decisions regarding these cases have been taken in full transparency and are firmly rooted in EU law and in the interests of EU companies."

Balzac had a word for it

2009-10-07T08:22:00.007+01:00

"Behind every great fortune lies a great crime."

That phrase is often attributed to Balzac, but in fact what Balzac actually said was:

"Le secret des grandes fortunes sans cause apparente est un crime oubli, parce qu'il a t proprement fait."

which, translated, is:

"The secret of a great success for which you are at a loss to account, is a crime that has never been found out, because it has been properly executed."

This might perhaps be applied to many rich men or woman, of course. But it's particularly linked with sudden and dramatic acquisition of great wealth. The modern-day example of this is the rise of the Russian oligarchs.

But surely, when great wealth is acquired in situations where the laws of the country have broken down and anarchy reigns, the normal laws of polite civilised liberal behaviour cannot really be applied. For instance, it's easy to criticise from an expensive property in liberal old Hampstead, and take that greatly favoured piece of real estate known as 'the moral high ground', when you have legitimately earned your money from one of the noble professions, and/or most likely inherited some of it, too. For such people it must be difficult to put themselves in the place of men with no professional background, no family with money, with nothing in fact but their brains, who started off from zero in the violent and chaotic conditions of post Communist Russia.

Lev Cherney, brother of Michael, another successful man we will meet later, who came up the hard way, said to my mind perfectly reasonably:

"Very often the most likely to succeed in these stormy oceans are not the picture-perfect, clean-shaved, deep-tanned, well-built and fashionably attired yachtsmen under the immaculate white sails - but unpleasant-looking ugly skippers in command of a pirate ship."
He added: "One should not be appalled. These are the laws of intial capital acquisition, applicable everywhere."

Note the last sentence. "These are the laws of intial capital acquisition, applicable everywhere."

In other words, he agrees with Balzac.

So, next post, let's look at a striking example of someone who has soared close to the sun from a standing start - and ask, will he yet burn his wings? I'm talking, of course, about that well known friend of Nat Rothschild and Lord Mandelson, the aluminum King himself, Oleg Deripaska.

More next time . . .

the power behind the throne

2009-09-29T08:23:00.371+01:00

The aim in writing this blog is to post daily (or as near that as possible, work allowing)) on the world of the wealthy and powerful.

In the news currently, is this man:

he isn't wealthy in the sense of the Russian oligarchs or the Rothschilds with their untold billions, though he is certainly not poor. But he is a classic example of power - how to get it, how to hold it, how to wield it, and how to come back bigger and better when you temporarily lose it.

Yes, we meet again the brilliant and mysterious Lord Mandelson, Baron of Hartlepool and Foy - known to his glamorous friends, and many enemies, as The Dark Lord, Mandy - or, so rumour says, to Rupert Murdoch as starfucker.

Mandy was one of the architects of New Labour and officially the King of Spin. He was Labour's campaign manager in 1997 when the party returned to power with a phenomenal majority, after 15 years in the wilderness. And that was the beginning of Mandy's rise to power, for he had backed Tony Blair for the No 1 job at No 10.

The combination of Mandelson and Blair made Mandelson. Every power-behind-the-throne merchant needs a good 'man up front', and Tony was the perfect partner.

Tony was friendly and likeable where Mandy was menacing: Tony was warm and emotional where Mandy was cool and calculating: Tony was 'a pretty straight sort of guy' as he would label himself, where Mandy was a complex and secretive character. Mandy was media savvy, ruthless in his dealings with the press, Tony was the photogenic, spell-binding speaker with the great smile. The dark and the light. The Ying and theYang. A marriage made in heaven.

There were a couple of slip-ups - The Dark Lord has always had a tendency to recklessness - but even the slip-ups turned out well because with Tony's support, Mandy became European Trade Commissioner, and that job gives its holder access to real power on the world stage.

How Mandy used it, and how it elevated him into the circles where true power exists, we'll talk about in my next post.

At the moment, back in London, Mandy has become almost overnight not only a member of the House of Lords, but the UK's Secretary of State, Secretary of State for Business, Innovation and Skills, President of the Board of Trade and Lord President of the Council. All this without even being an elected as an MP. How about that for style?

But what need has he of all these names and titles? He is, in fact, the top man of the UK, the Prime Minister in everything but name, the power behind the power that rests in the occupant of No 10 Downing Street.

- or, as history might say, Lord Mandelson is the alter rex, the other King.

Yes, Lord Mandelson understands power, he knows where it lives, he has a feel for it and is comfortable around it. And though he has many enemies, powerful people like and appreciate him. And that's important. Brilliance is not enough. The right people have to like you.

Of course, those who don't like him use adjectives such as complex, vengeful, dangerous; they talk of his combination of suave charm and icy menace.

But the people who like him see clearly his strengths - his steadiness in a crisis, his ability to communicate a sense of purpose, his sense of humour and his refusal to despair.

We last met him a few posts back, wheeling and dealing in Montenegro with two particularly powerful people who like him, Nat Rothschild and Oleg Deripaska.

Oleg Deripaska - now there's a man of power. Let's take a look at Oleg and the Mandelson connection next time.

But it's the witching hour in London so that's all for tonight.

.

Roman, Eclipse and hubris

2009-09-27T23:22:00.020+01:00

Abramovich's Eclipse, the biggest yacht ever built.

Something worries me about Roman and his Eclipse and I hear from afar the faint sound of distant warning bells. I'm a great fan of Abramovich, and I hope I'm wrong. But he is truly tempting fate.

The Greeks had a word for it - as always. The word was 'hubris'.

The dictionary meaning is - excessive pride: presumption: arrogance: insolence.

To the ancient Greeks in their world, it meant you were putting yourself on an equal footing with the Gods. You were saying to them, 'look how rich I am, and how powerful, and how big - as big and rich and powerful as you'.

The Greek Gods, a querulous and nasty tempered bunch at the best of times, took a very dim view of this sort of behaviour and always took their revenge on any such display of cheek and chutzpah.

For instance, Bellophoron was a great hero and slayer of monsters and his most famous deed was to kill the infamous chimera , a fire-breathing monster which had been terrorizing the countryside and taking many lives.

Seeing how all his predecessors had met horrible deaths when approaching the monster from the ground, Bellophoron, a very bright boy, decided the only way to succeed in dispatching the chimera was from the air.

He turned to Athena, one of the great Goddesses, and prayed in her temple all night, whereupon Athena, impressed with such a show of faith, gave Bellophoron the magical Pegasus, a winged horse. So, flying high above the fiery blasts coming out of the chimera's three mouths, our hero did for the chimera, to much acclaim and praise from all and sundry.

That was the problem. Success went to his head and he became positively triumphalist, thinking himself as good as anyone, and better than most, and figuring he belonged right up there with the Gods. So, taking his magic horse, he flew straight out of this world and up, up and away in the direction of Mount Olympus, the home of the Gods.

Unfortunately, they saw him coming - well, you would, wouldn't you, when a intruder hoves in sight on a flying horse. So gossip says Zeus, the top God, sent a buzzing fly to distract and irritate Bellerophon and he fell from Pegasus back into the world below. From that day forward, injured, and cursed by the Gods, Bellerophon, wandered alone, devouring his own soul and avoiding the paths of men until he died.

Greek legends are full of stories of brave, beautiful, gorgeous young men, heros and winners all of them - who tempted Fate, or drew to themselves the attention of some jealous God.

Of course, we're all so civilised now we don't believe in Gods, or Fate, or whatever you call whatever is out there watching our escapades.

But if you look around the world, you'll see that hubris is still a recognisable factor in many a modern hero's downfall.

I'm surprised and disappointed in Abramovich. For a long time he was famous for keeping a low profile. It worked. It was a smart thing to do. Now he really has raised his head above the parapet. And it worries me that there are a lot of envious people out there who will have him in their sights.

more on the fabulous Eclipse

2009-09-25T23:15:00.007+01:00

photo courtesy of the Daily Mail.

As promised, more details on Eclipse - the yacht to end all yachts. Owned by the amazing Roman Abramovich:

Eclipse, which has said to have more than doubled in cost to £724 million, glided out of Hamburg a week or so ago on its maiden voyage. It will be put through its paces over 10 days. under the watchful eye of 150 engineers and maritime experts.

Eclipse has 2 helipads, 2 swimming pools - the biggest doubles up as a dance floor when drained - and 6ft-wide cinema screens in 24 guest cabins.

The master suite has a retractable roof, so its owner can sleep under the stars.

With piracy on the high seas becoming a problem, Eclipse has a hull and windows able to withstand a missile attack. And just in case, it has a mini-sub for emergency get-aways.

It will also be fitted with a missile defence system. What can I say but 'Wow'.

Roman is due to take delivery of Eclipse on December 22 - and what a Christmas present that will be!

The definitive size of Eclipse cannot be confirmed owing to a confidentiality clause, but a spokesman for the shipyard says "It will be the largest private yacht of all time.' Rumour says it is 557 ft.

(The current record for a large yacht is held by - surprise, surprise - Dubai, in the shape of a 524 foot vessel owned by Sheikh Mohammed bin Rashin al-Maktoum, the prime minister of the United Arab Emirates.)

Abramovich also own the world's biggest private jet, a Boeing 767 nicknamed 'The Bandit'.

Eclipse is likely to need a crew of at least 60 people, said to include a security team of former veterans of the French Foreign Legion.

The most unusual feature of Eclipse is the anti-paparazzi shield. Infrared lasers detect the electronic light sensors in nearby cameras. When it detects such a device, it fires a focused beam of light at the camera, disrupting its ability to record an image.

More, and somewhat less frivolous, comments on all this to come on my next post.

Abramovich eclipses them all

2009-09-24T01:09:00.046+01:00

Said to be the llth richest man in the world, Roman Abramovich already has 3 rather super yachts.

The first, Pelorus, was originally built for a Saudi shekih. It is used for entertaining and has room for 22 guests and 40 staff. It also has two helipads, an indoor pool and a steam.

the second, Escsasea, has a Chinese themed interior and is mainly used for cruising.

The third, Sussuro, is used for short journeys and to loan out to friends

Annual overhead for the boats is said to be more than £15million, and it costs £73,000 just to fill up the tanks of his current largest boat.

But hold on to your hats, boys, here comes No.4, the long rumoured and absolutely legendary yacht-to-top-all-yachts . . . . . . .

" ECLIPSE "

a 557 footer costing around £300 million.

Doesn't the sight of this baby, unveiled in Hamburg shipyard recently, take your breath away?
And, what do you know, it comes with its own missile defence system.

It's late in London now, and I'm to bed to get my beauty sleep, but Eclipse deserves a bigger and better post to describe all its many wonders.
So watch out for the next instalment tomorrow.
Until then, Goodnight.

St. Barthelemy - or St. Barths to its friends

2009-09-22T14:08:00.033+01:00

St. Barthelemy is an island in the French West Indies and is a favourite playground for the rich and powerful.

Below you'll see the very short runway - this must be fun for the pilot!

The final two minutes of the approach to St Barths is extremely dramatic. The plane clears a very steep hill, banks, then dips abruptly to a tiny runway the size of a New York City block, which ends on the beach - St Jean's beach, as regular users will know. Coming in, the plane flies so low passengers can practically read the headlines on the magazine of beach dweller - though sunbathers are advised not to lay around on the part of the beach right by the end of the runway!

This little island is of international renown, a home and haven to the rich and famous, where they go to get away from the rest of the world. Houses here are among the most wanted in the world. Yet St Barths is a mere 25 square kilometers - Manhattan is twice as large.

It is a duty free port and often called the Paris of the Caribbean. Hermes and Cartier as there, plus many small boutiques, such as the legendary Stephane and Bernard.

As well as private residences it has the Guanahani Hotel, with its superb restaurant, Bartolomeo. For more fun, there's Le-Ti St Barths restaurant - where the Satuday night parties are legendary.

And now Roman Abramovich has splashed out £55 million on a 70-acre estate on the island. It has a large villa, Balinese-style bungalows, swimming pools and two floodlit tennis courts.

And it looks out onto Gouverneur Bay, where Roman will be able to moor his new yacht - the fabulous 557-foot long Eclipse, officially the largest yacht in the world. How about that for thinking big?

Next post, we'll have a look at the Eclipse in detail.

I'm back - with hot properties and powerful men

2009-09-21T22:15:00.016+01:00

Back, with apologies! This was intended to be a daily log, but I'm just finishing a book which I must complete before Christmas, and with that and other work, my blogs have been shamefully neglected. However, here I am again, and hope to do better. So, off we go with our friends, the rich and powerful.

And what better example of both adjectives than the man I consider one of the hottest lookers of them all - Roman Abramovich, as above, in thoughtful mood.

What has the gorgeous Roman been up to? Well , he's been adding to his extensive property portfolio.

But before we go any further let's pause for a moment, and consider this question: if you had endless wealth, where in the world would you buy property, and how many homes would you buy? This is a game I often play myself, so I'm prepared when the moment comes. I already have my answer. Have you decided? So now, let's look at one rich man's answer to that question.
(Though I'm sure these are only the well known properties owned by Mr A. There will always be many things in the lives of the very which about which we know nothing. And why not? If you can't afford secrets, what's the point of being rich? )

Roman's main residence is in Russias, a 42 hectare country estate outside Moscow.

However, he also has homes in London, in the capital's most ritzy neighbourhood. He is currently merging eight apartments into one huge home in Lowndes Square, Knightsbridge. With properties in this area selling for something like £4,00 a square foot, the house when finished could be worth around £120/150 million.

He also owns a place on the French riviera, the Chateau de la Croe in Cap d'Antibes, formerly the home of the late Duke of Windsor.

In America, he has two properties in Snowmass Village, Colorado, a popular winter resort for skiing and snow boarding. He paid $11.8 million for a 5,600-square-foot ski-in ski-out house. Then two months later he paid $36.4 million for a 200 acre ranch in Wildcat Ridge. The property Roman has bought is a 14,300-square-foot house, it has 11 bedrooms and came with custom made furniture, includng a chair made of leather and mink. The former owner was Leon Hirsch, the surgical equipment tycoon.

Top left is an example of a property on the Ridge, don't know who this one belongs to, but it sure is pretty, and gives you a good idea of what you're getting when you buy on the Ridge.

Mr A's latest buy is a 70-acre estate in St Barthelemy, in the French West Indies. At nearly $90-million sale price, this has to be one of the most expensive private homes every sold.

Next post, we'll discuss more about St Barts, and why property there is amongst the most wanted in the world.

Cold steel and the Billionaires Club

2009-08-28T15:59:00.005+01:00

More news of holidaying yacht owners. Lakshmi Mittal, the steel billionaire, is mooring his yacht in Porto Cervo, Sardinia, this August.

He and his wife, Usa, were at the birthday celebrations for Fawaz Gruosi, who owns de Grisogono, the watch and jewellery maker, and who numbers the Saudi royal family among his customers.

Also there was JCB digger owner Sir Anthony Bamford and his wife, along with Russian oligarch Vladislav Doronin.

The party was thrown at the legendary Billionaires Club (above) by Flavio Briatore.

The Billionaires Club is Flavio Briatore's ultra expensive hill top disco in Porto Cervo in Sardinia, only open in high season, from the end of June through August. Here you can send £10,000 on dinner alone in the restaurant, Cipriani, and splash $50,000 on a methuselah of Cristal.

It's near the harbour and awash with low lighting, Persian rugs and beautiful people.

But be warned, the New York Times reported recently that the hotspot has gone downmarket lately - why, some recent visitors aren't even millionaires, let alone billionaires!

There's a lot of it about, particularly in Russia.

2009-08-26T23:34:00.006+01:00

Forbes says there are now 110 dollar billionaires in Russia, with more in Moscow than in any other city in the world. Only America has more. And there are many multimillionaires.

Rich Russian parents send their children to English boarding schools, but not until they've finished their early education at Mes, the elite Moscow Economic School. Abramovich's children went to school here. So did Khodorkovsky's - he was once Russia's richest man but now languishes in jail. The children of Pyotr Aven, one of Russia’s first oligarch bankers, now in England, are former pupils. Oleg Deripaska, 40, is Russia’s richest man – worth about £14 billion - and he has a child at Mes.

Entry costs £25,000, although parents are said to pay far more to get their child in. Average yearly fees are around £7,000 – a fraction of what it later costs to send them to Britain.

The children arrive in Porsche Cayennes, Maseratis, BMWs, 4WDs and so on, accompanied by tough looking security men armed with guns. The kids are adorned with designer clothes and jewelled watches, with credit cards, i-phones, mobiles, nannies, bodyguards and bulletproof cars.

The place to live is off Rublyovo-Uspenskoye Shosse, a road that snakes westwards out of Moscow through forests of silver birches and pines. Known as Rublyovka, the area is Moscow’s Beverly Hills, home to the gated compounds of oligarchs, government ministers, Kremlin officials, the Russian president, Vladimir Putin, and his successor, Dmitry Medvedev. Along the road, stretches of forest are boxed in behind 16ft-high metal fences surveilled by CCTV cameras and patrolled day and night by private security guards.

Near by is Barvikha Luxury Village, an elite shopping complex. Lamborghini and Ferrari have a showroom here. The Bentley dealership sells a car a day. Gucci, Prada and Armani are here, as is Dolce & Gabbana, and Brioni, the Italian fashion house whose custom-tailored suits can cost up to £15,000, and Bottega Veneta, where you can buy a handbag for £10,000.

The rich ski in Courchevel and swim off yachts in Sardinia and St Tropez.

16 years after the collapse of communism, it's amazing what a little touch of captialism can do.

the background on Porto Montenegro - with names

2009-08-26T00:25:00.014+01:00

Extracts from a good explanatory article in TourismeRoi, written last year, and full of interesting names and facts about the Porto Montenegro development.

On the left Peter Munk

Berth of a nation by ERIC REGULY - Friday, August 01, 2008: BUDVA, MONTENEGRO.

Peter Munk and I are in the library of the “Te Manu,” a white floating palace built in Italy, owned by a Mexican, named after the Polynesian word for “bird” and chartered for the week by the chairman and acting CEO of Barrick Gold and his family.

The yacht is anchored in Budva, a medieval town turned bustling resort on the coast of Montenegro, one of the breakaway republics of the shredded Yugoslavia. It has four levels, a crew of 11 and an interior clad with pear, cherry and walnut panelling. At 49.4 metres (160 feet), it is one of the biggest and most expensive of its kind in the rarefied world of superyachts – generally defined as crewed pleasure boats of 30 metres or longer. This one rents for $175,000 to $210,000 (U.S.) a week.

Te Manu is more than a boat. It is also Mr. Munk's office. But the affairs of the world's biggest gold company are not on his mind. Porto Montenegro is. The table is strewn with notes, plans and diagrams for the superyacht marina and luxury resort that is the billionaire's newest and most glamorous project.

He and his high-profile backers recently became Montenegro's biggest foreign investors, with their €260-million-plus ($405-million) plan to make Porto Montenegro the Mediterranean's, perhaps the world's, premier superyacht destination.

Mr. Munk is tackling this project at 80, making him one of the world's oldest CEOs. Porto Montenegro proves he's one of the most energetic too. “Peter Munk is amazing,” says fellow Canadian gold magnate Pierre Lassonde, the former president of Newmont Gold. “He will be 81 this fall and he is still building projects. My definition of young is when your coefficient of dreams to memories is greater than one. Peter only talks about the future. The past rarely comes into his conversation.”

Porto Montenegro will transform the Montenegrin economy for the better, Mr. Munk promises. “It will improve the prosperity of the country and raise its status internationally,” he says.

But the project has had a rough start. Thousands of Montenegrins took to the streets in protest when word got out that the old Arsenal navy yard would be recast as a playground for the rich. Some locals think Munk and Co. are building something akin to a gated community for floating Russian billionaires – Russian tourists and investors are already so thick on the ground that the country is known as “Moscow by the Med.” Marine biologists fear the yacht harbour will damage the already stressed ecology of the Bay of Kotor, the Med's only fjord and one of the loveliest anchorages on the planet.

Montenegro presses against Croatia, Bosnia, Serbia and Albania on the southern fringes of the Dalmatian Coast. Green mountains plunge into the Adriatic, the water is clear cerulean blue. Ancient towns, dot the shores. Hotels, restaurants and shops are springing up, but the densities and the prices are nowhere near the horrific levels of France's Côte d'Azur.

If Mr. Munk gets his way – there is no reason to think he won't, given the money already invested and the approvals obtained – the Te Manu won't stick out from the crowd at Porto Montenegro, some 15 kilometres north of Budva. The Bay of Kotor marina will have berths for 650 yachts, 150 of them superyachts. Boats as long as 150metres could be accommodated in a pinch.

Oliver Corlette explains why a marina capable of taking that many superyachts will find an eager market. He is the Australian-born, 33-year-old managing director of Porto Montenegro and came into the Munk family fold through the New York office of Onex, controlled by Gerry Schwartz, where he worked on the private equity team with Anthony Munk, Peter's son. Anthony is a Porto Montenegro investor.

Mr. Corlette says there is simply no room anywhere for the new flotilla of superyachts. Antibes, in the south of France, is probably the Med's biggest superyacht marina; it can accommodate only a few dozen of the biggest boats. The problem is so many superyachts are being built. “The modern yachts are like ships,” he says. “Harbours like Monaco and Antibes were created at a time when 30 metres was considered huge. It's not any more.”

At last count, more than 900 superyachts were under construction as the new millionaires and billionaires from Russia, India, China and parts in between put deposits on the ultimate status symbols. Porto Montenegro will be able to cope with a number of these boats once the marina is finished in a couple of years.

Mr. Munk says the economics of marina ownership are irresistible. Marinas are like hotels in the sense the guest rents a small bit of real estate – a dock in the captain's case. Hotels require extensive refurbishing to remain competitive. The non-stop capital expenditures drain cash flow. “The port business is like the hotel business, except there are no capital expenditures after you build the cement docks,” he says.

A year lease on a superyacht dock would start at €100,000 or so. But the yachts also need to be cleaned, fuelled, repaired and refurbished. Superyachts, says Mr. Corlette, cost about €1-million a metre to build. The annual operating bill works out to about 10 per cent of the construction cost – the tab to run a 40-metre yacht would come to €4-million a year. Porto Montenegro hopes to grab much of this spending. Mr. Munk hopes to become a partner in the commercial shipyard, called Bijela, across the bay from Porto Montenegro, and convert it into a yacht-repair business.

Mr. Munk landed Porto Montenegro through a combination of luck, good timing and impeccable connections.
He has chartered yachts for much of his adult life and he remembers the time several years ago when he kissed off Monaco, the over crowded Mediterranean anchorage of the yachting elite. He jumped overboard for a swim, felt something brush his skin and realized he had had an encounter with a condom.
No more Monaco. But where was he to go? It wasn't long before he found a potential yachties' paradise in a broken half-country called Montenegro. “I didn't even know where Montenegro was,” he says.

Four years ago, at a dinner party in London, he was approached by a friend who told him he should invest in Montenegro, then still attached to Serbia and going nowhere, thanks to the economic sanctions imposed on Serbia and Montenegro in the 1990s, when war was ripping the Western Balkans apart. “I said forget it – it's not even a real country,” Mr. Munk said.

But Mr. Munk soon changed his mind. He called Robert McDougall, Canada's ambassador in Belgrade. “The ambassador said Montenegro is going to be independent and was convinced it would become like Monaco,” Mr. Munk says. “I trusted him.”
Another phone call was made by Mr. Munk's friend Oleg Deripaska, the Russian billionaire and owner of Basic Element, the powerful industrial group that last year invested $1.5-billion (Canadian) in Canada's Magna International auto parts company and bought Montenegro's aluminum smelter, called KAP, the year before. “Oleg made the first phone call to the prime minister [of Montenegro, Milo Djukanovic] and opened the door for me,” he says.

Before he knew it, Mr. Munk was flying over the tiny country of 700,000 people in a military helicopter, peering down at potential development sites. And there it was – the Bay of Kotor. “I had never seen a place like this,” he says. “I fell in love with it.”

The bay is a geographical wonder. Lord Byron called it “the most beautiful encounter between the land and the sea.” Its steep, rugged mountains frame a natural harbour that is well shielded from the Adriatic and has about 100 kilometres of coastline. The bay takes the rough shape of a figure eight, with the inner and outer portions pinched in the middle by a narrows.

The inner bay has a delicate ecosystem. It is fed by mountain springs, producing brackish water. It is also home to two perfect medieval towns, Kotor itself and nearby Perast, both ruled by Venice from the 1400s to the late 1700s. Kotor features a UNESCO-protected fortified wall that snakes for four kilometres over its mountain backdrop. Perast is famous for its baroque palaces and churches.

The outer bay has been prized as naval base since the Roman empire. In the Middle Ages, it was a Venetian military outpost. In the late 1800s, the Bay of Kotor became one of the three bases of the Austro-Hungarian navy. After the end of the First World War in 1918, it became part of Yugoslavia. Josip Broz Tito, the country's leader after the Second World War, employed it as the port of the Yugoslav Navy. Later, after passing through the hands of Serbia and then Montenegro, the ships and submarines became idle. The Arsenal base, which covers 24 hectares near the town of Tivat, was rotting away, though it still employed 480 workers when Mr. Munk first saw it.

Where the locals saw decay, Mr. Munk saw a seaside ribbon of yachts, luxury hotels, condos, restaurants, casinos and a golf course – the “next Monaco,” as Mr. Corlette puts it. Mr. Munk convinced the Montenegrin government that turning the Bay of Kotor into an elite tourist destination was the proper strategy – the small country didn't have the infrastructure for mass tourism. Somewhere between 3,000 and 5,000 jobs would be created.

Mr. Munk flew in George Nicholson, the chairman of George Nicholson International, the best-known yacht management and brokerage company, to see the Arsenal site early last year. Mr. Nicholson declared it ideal for superyachts. “George measured the docks,” says Mr. Munk. “We went to Kotor and Budva and he said it was like St. Tropez in the 1940s.”

The Montenegrin prime minister, Mr. Djukanovic became a friend – The prime minister and his wife were lunch guests on the Te Manu on the day I interviewed Mr. Munk. A tender was called and Mr. Munk's holding company, Adriatic Marinas, won three consecutive 30-year property leases – effectively ownership – for a relatively small amount of money. In exchange, Adriatic Marinas made commitments to buy out the Arsenal naval workers, pay for the environmental cleanup and the like. Mr. Munk is investing €50-million to €75-million of his own money into the project.

He owns about 54 per cent of Adriatic Marinas. The rest is held by an all-star team of investors. They include Mr. Deripaska; Anthony Munk; Nathaniel Rothschild, the Atticus Capital partner and the man in line to become the fifth Baron Rothschild; Lord Jacob Rothschild, Nathaniel's father; Bernard Arnault, the French billionaire who is chairman of the luxury goods group LVMH; and Sandor Demjan, the chairman of TriGranit, one of the largest property developers in Central and Eastern Europe.

Mr. Munk owns about 18 per cent of TriGranit, where Nathaniel Rothschild is also an investor; the Hungarian company will handle construction at Porto Montenegro. The World Bank and the European Bank for Reconstruction and Development (EBRD) are sinking small fortunes into local water, sewage, roads and electricity systems.

News of the Porto Montenegro project and the mysterious clan of wealthy investors triggered fear and loathing in the country. “The resistance was huge,” Mr. Munk says. “A lot of the [foreigners] they had been exposed to were rip-off artists.”
About 3,500 Montenegrins took to the streets in Tivat to protest the loss of the Arsenal jobs. “The people were very emotional,” says Dragan Kankaras, 48, the bearded Tivat mayor. “The Arsenal existed for 120 years and it was the biggest employer in the region. People were afraid of change.”

Some Montenegrins suspected the prime minister didn't strike the best deal for the citizens – the government has no direct investment or board governance role in Porto Montenegro, though all the zoning and planning had to be approved by the government. While some admire Mr. Djukanovic as the father of the newly independent Montenegro, others think he is not to be trusted. Last summer Italian prosecutors accused him of conspiring with the Mafia to smuggle cigarettes into the European Union between 1994 and 2002. He denies the charges. He also sued a local newspaper whose editor claims he was beaten up on Mr. Djukanovic's orders.
Montenegro's opposition, led by Nebojsa Medojevic has said he sees the super-rich snapping up the country's prime assets in “colonial” style and has accused the government of corruption in development projects.

The good news for Mr. Munk and his backers is that the Porto Montenegro protests are melting away as the lure of new jobs captures the Montenegrins' imagination and the Munk goodwill machine, which includes scholarships, English lessons and university support, rolls forward.

The Arsenal naval yard, where Porto Montenegro is to be built, is in a sorry state. The remnants of the once proud Yugoslav and Serbian navies await their appointment with the cutting torch.
Submarine lie rusting in the dock. Mr. Munk's small marketing team plans to turn one into a museum with a Cold War flavour. Other subs are being cut up in the yard by sweaty workers in the Montenegrin summer's blast-furnace heat. Two millennia of naval history have come to an inglorious end.

But the vast concrete docks are largely intact. So is a massive crane that will act as a sort of marina beacon. Even though construction has yet to start, it's just possible to get a sense of the future Porto Montenegro. The flat area behind the main docks, right on the water, will be the home of a 150-room Four Seasons hotel and about 250 condo units.

The large swath of property away from the harbour is to become a new city. It will have a conference centre and hotel, a market square where the subs are now being dismantled, an art gallery, a museum, a sports complex and 10,000 square metres of retail space, including a supermarket and a department store. A few kilometres away, near Tivat's airport, which is already jammed with private jets, an 18-hole golf course is to be built. The marina will be in operation in 2010, the Four Seasons a year later.

Sandra Bijelic, an employee in a Tivat real estate office that is doing booming business with Russian clients, says “It will be good for us to have employment for our people, but Tivat and Kotor must have their soul.”

Vesna Macic, 36, a scuba-diving biologist at the University of Montenegro's Institute of Marine Biology, worries that the environmental controls won't be strict enough to prevent oil and chemicals from infiltrating the Bay of Kotor. “If big yachts come here, they have to take on fuel,” she says. “The problem is that they could pollute very easily. And do we have to have a golf course? We don't have enough drinking water in this country. Golf courses take a huge amount of water. So do yachts.”

Mr. Munk and his team say nothing was worse than the dilapidated Arsenal site, with its seabed covered in pollutants from rusted, leaky ships. All of it will be cleaned up, they insist. The yachties will pump vast loads of money into the economy. Jobs will be created. Plus he's having fun. “I don't play bridge and I'm a lousy skier,” he says. “But I have some ability to create and we are creating something wonderful here.”

Bilderberg 2

2009-08-25T14:48:00.007+01:00

For starters, this is a reasonable run-down on Bilderberg, by a BBC journo, and published in BBC News On-Line magazine in 2004. No doubt thing have moved on, but here are the basics of the story:

"Bilderberg: The ultimate conspiracy theory - By Jonathan Duffy - BBC News Online Magazine

The Bilderberg group, an elite coterie of Western thinkers and power-brokers, has been accused of fixing the fate of the world behind closed doors. As the organisation marks its 50th anniversary, rumours are more rife than ever.

Given its reputation as perhaps the most powerful organisation in the world, the Bilderberg group doesn't go a bundle on its switchboard operations.

Telephone inquiries are met with an impersonal female voice - the Dutch equivalent of the BT Callminder woman - reciting back the number and inviting callers to "leave a message after the tone".

Anyone who accidentally dialled the number would probably think they had stumbled on just another residential answer machine.

Leiden in Holland, is the inauspicious base of the Bilderberg group
But behind this ultra-modest façade lies one of the most controversial and hotly-debated alliances of our times.

On Thursday the Bilderberg group marks its 50th anniversary with the start of its yearly meeting.

For four days some of the West's chief political movers, business leaders, bankers, industrialists and strategic thinkers will hunker down in a five-star hotel in northern Italy to talk about global issues.

What sets Bilderberg apart from other high-powered get-togethers, such as the annual World Economic Forum (WEF), is its mystique.

Not a word of what is said at Bilderberg meetings can be breathed outside. No reporters are invited in and while confidential minutes of meetings are taken, names are not noted.

The shadowy aura extends further - the anonymous answerphone message, for example; the fact that conference venues are kept secret. The group, which includes luminaries such as Henry Kissinger and former UK chancellor Kenneth Clarke, does not even have a website.

DISCREET AND ELITE
This year Bilderberg has announced a list of attendees
They include BP chief John Browne, US Senator John Edwards, World Bank president James Wolfensohn and Mrs Bill Gates

In the void created by such aloofness, an extraordinary conspiracy theory has grown up around the group that alleges the fate of the world is largely decided by Bilderberg.

In Yugoslavia, leading Serbs have blamed Bilderberg for triggering the war which led to the downfall of Slobodan Milosevic. The Oklahoma City bomber Timothy McVeigh, the London nail-bomber David Copeland and Osama Bin Laden are all said to have bought into the theory that Bilderberg pulls the strings with which national governments dance.

And while hardline right-wingers and libertarians accuse Bilderberg of being a liberal Zionist plot, leftists such as activist Tony Gosling are equally critical.

A former journalist, Mr Gosling runs a campaign against the group from his home in Bristol, UK.

"My main problem is the secrecy. When so many people with so much power get together in one place I think we are owed an explanation of what is going on.

Timothy McVeigh was among those who believed the conspiracy theory
Mr Gosling seizes on a quote from Will Hutton, the British economist and a former Bilderberg delegate, who likened it to the annual WEF gathering where "the consensus established is the backdrop against which policy is made worldwide".

"One of the first places I heard about the determination of US forces to attack Iraq was from leaks that came out of the 2002 Bilderberg meeting," says Mr Gosling.

But "privacy, rather than secrecy", is key to such a meeting says Financial Times journalist Martin Wolf, who has been invited several times in a non-reporting role.

"The idea that such meetings cannot be held in private is fundamentally totalitarian," he says. "It's not an executive body; no decisions are taken there."

As an up-and-coming statesmen in the 1950s, Denis Healey, who went on to become a Labour chancellor, was one of the four founding members of Bilderberg (which was named after the hotel in Holland where the first meeting was held in 1954).

His response to claims that Bilderberg exerts a shadowy hand on the global tiller is met with characteristic bluntness. "Crap!"

"There's absolutely nothing in it. We never sought to reach a consensus on the big issues at Bilderberg. It's simply a place for discussion," says Lord Healey.

Formed in the spirit of post-war trans-Atlantic co-operation, the idea behind Bilderberg was that future wars could be prevented by bringing power-brokers together in an informal setting away from prying eyes.

"Bilderberg is the most useful international group I ever attended. The confidentiality enabled people to speak honestly without fear of repercussions.

"In my experience the most useful meetings are those when one is free to speak openly and honestly. It's not unusual at all. Cabinet meetings in all countries are held behind closed doors and the minutes are not published."

That activists have seized on Bilderberg is no surprise to Alasdair Spark, an expert in conspiracy theories.

"The idea that a shadowy clique is running the world is nothing new. For hundreds of years people have believed the world is governed by a cabal of Jews.

"Shouldn't we expect that the rich and powerful organise things in their own interests. It's called capitalism."

Initially, it sound glamorous and mysterious - but then you add the ovweight Mr Kenneth Clarke, and Mr Denis Healey as one of its founding fathers, and it begins to lose some of its shine.

Personally, I've always rather like Healy and Clarke and thought they talked sense, but I don't see them as Lords of the Universe. They have always been politicians, and therefore wage slaves, have never made enormous sums of money through their own brain power, courage, energy and application, and indeed seem the epitome, in spite of the Oxford degree, of the slightly inhibited but hugely respectable lower middle class suburbanites, given to the standard political thinking of one of the two main political parties. No evidence of original or bold thinking there.

More to come on this.

Bilderberg

2009-08-25T01:26:00.004+01:00

The Bilderberg Group is an unofficial, invitation-only club of around 130 people, most of whom are persons of influence in the fields of politics, business, and banking, and who meet annually in luxury hotels or resorts around the world.

Meetings are normally in Europe, and once every four years in the US or Canada.

The 2009 Bilderberg meeting was in Athens, from 14 -16 May.

Everyone seems to be sworn to secrecy, press coverage not allowed, altho' special well trusted journos do attend, but keep silent.

Naturally, all this lead to huge conspiracy theories. Is this the master race planning take-over of the world: is it that hoary old rumour that the Jews are at the back of everything and planning to run the word? is it the Illuminati - if they ever existed? the Knights Templars - tho' hang on, aren't they the Illuminati by another name?

More to come on this one.

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The Prince and the Kings in the new playground of the rich

2009-08-24T09:59:00.028+01:00

To Home Base this morning to look at mirrors for living room, which is half way through being redecorated. How prosaic is that?

So let's move on swiftly to the rich, a much more fun subject, and follow up on the Lockerbie story I posted on yesterday - tho' now the coverage has moved on to the personalities involved.

So, more on the rich world playground which is in full swing in the Adriatic.
Above is the Hotel Splendid, Becici, the setting for the get- together of the Prince of Darkness and his pals, with further details supplied this morning by the Daily Mail.

"And what a small world it is. In March this year, Prince Andrew went to Montenegro to open the new British embassy there.

During the trip he took time out to be shown round the £500million Porto Montenegro marina which is being developed on the coast near Tivat.

Two of the main investors in the project are Mr Deripaska and his financial adviser Mr Rothschild. Indeed, the former's business interests make him the largest private employer in Montenegro.

Early last year, when he was still EU Trade Commissioner and not yet ennobled, Peter Mandelson announced that he had secured a bilateral agreement with the tiny Adriatic nation.

'Today's signature is an important milestone,' he declared at the time. Montenegro's progress toward becoming a reliable world trading partner had been ' remarkable'. Mr Deripaska must have been delighted.

It later emerged that during Lord Mandelson's tenure as commissioner, there had also been two cuts in EU aluminium import tariffs, which has benefitted Mr Deripaska's company Rusal - the EU's biggest importer of the raw metal - by tens of millions of pounds a year.

In June this year what was described as the most lavish celebration ever held in the Adriatic took place near the Tivat marina.

Saif Gaddafi had chosen the Splendid hotel in Becici as the location for his 37th birthday party. Among the guests, who flew in on a fleet of a dozen or more private jets, were Prince Albert of Monaco, Mr Deripaska and Mr Rothschild.

Saif is said to be interested in investing in Montenegro. Presumably he and Mr Deripaska had plenty to talk about - the Russian also controls the oil company Russneft and Libya is looking for foreign investors in the energy industry. Business and pleasure combined in one ostentatious display. "

In the comments, a writer asks an intriguing little question: All Bilderberg members . . . ?

You don't know what Bilderberg is? Watch and learn, reader.

The Prince of Darkness, Montenegro and Lockerbie

2009-08-23T23:54:00.018+01:00

Left is Porto Montenegro

I am in the final stages of finishing my second book, hence this blog has been neglected. But from now on, tho' I may not always have the time to write it up from the personal daily perspective, I'll try at least to post anything that is of particular interest to me in the news of the day.

Those of you who know my Money blog (also 'resting' whilst I bring my book to a close), will expect the items selected to in one way or another concern my favourite subject, that mysterious and enchanted world of the very rich.

And enchanted so describes that world, for to be enchanted is to be subject to magical influences, to be bewitched, to be put under a magical spell - and all those things come about when you enter the world of the rich, for its high voltage air crackles with magic.

As the cliched quote says "The rich are different." Most people say that comes from Scott Fitzgerald, but what he actually said was: "Let me tell you about the very rich. They are different from you and me," and the famous misquote actually comes from Hemingway.

Personally I like "The rich are different, they pay less taxes." It is reminiscent of that other lovely 'rich' quote, courtesy of J. Paul Getty - "The meek shall inherit the earth, but not the mineral rights."

So, here is the Sunday Telegraph debating the mystery of the release of the Lockerbie bomber, and the involvement therein of The Prince of Darkness , as he wheels and deals among his delightfully rich friends:

"Mandelson, his wealthy friends and the Libyan connection"

Lord Mandelson, the Business Secreatry, is facing growing questions over his links with Saif Gaddafi, the son of Libyan leader Colonel Gadaffi, following the release of Lockerbie bomber Abdelbaset Ali Mohmed al Megrahi.

In a destination that developers predict will soon make the tax haven of Monaco look "second rate", it was described as the most glamorous party ever seen in the Adriatic.

As the champagne flowed, fireworks lit up the night sky, a dozen private Lear jets were parked on a nearby runway and giant yachts were moored offshore.

The fabulously wealthy guests at the appropriately-named Splendid Hotel included Prince Albert of Monaco and Lakshmi Mittal, the steel magnate.

Also at the resort were Oleg Deripaska, the Russian entrepreneur, and Nat Rothschild, the British financier - both close allies of Lord Mandelson, the Business Secretary. The billionaires held a business meeting the following morning.

And who hosted the 37th birthday party in June in one of the trendiest locations in Montenegro – a newly-independent nation whose cause Lord Mandelson has repeatedly championed?

The unlikely host – hundreds of miles from his African homeland – was Saif Gadaffi, the son of the Libyan leader, who, it emerged last week, has met Lord Mandelson twice in the past four months.

At at least one of those meetings, the fate of Abdelbaset Ali Mohmed al Megrahi, the only man convicted of the Lockerbie bombing, was discussed.

In October 2008, just days after his return to the Cabinet to shore up Gordon Brown's ailing leadership, Lord Mandelson admitted that his links to Mr Deripaska, the billionaire Russian oligarch, stretched back years more than he had earlier admitted.

Lord Mandelson, who denies acting improperly or trying to influence Mr MacAskill's decision, most recently met Mr Gaddafi "fleetingly" at the Rothschild's family's Greek £30 million estate on Corfu – just a week before it emerged that Megrahi was set to be freed because he is suffering from aggressive and terminal prostate cancer.

According to Lord Mandelson's spokesman, the Business Secretary also met the met the man tipped to be the next leader of Libya at an official engagement in London in May this year.

Less than a decade ago Libya was a pariah nation that was not only blamed for Lockerbie but also had a long history of sponsoring international terrorism.

Saif Gadaffi, 37, the favoured of Colonel Gadaffi's seven sons, is an architect, businessman and politician, who was educated at the London School of Economics.

In recent years Mr Gadaffi has forged a firm friendship with Mr Deripaska and Mr Rothschild, Lord Mandelson's friends.

Mr Rothschild hosted a party Mr Gaddafi in New York late last year. More recently, Mr Gadaffi has developed personal links with the Business Secretary himself.

Indeed, Lord Mandelson's spokesman said this weekend that he hopes to see more of the Libyan politician in the coming months.

What is not known is the extent of the personal business interests that Mr Gaddafi, who has a penchant for pet tigers, now has in Montenegro, a nation that Lord Mandelson has supported during its three years since gaining independence.

Libya has significant business links in Montenegro, and judging from his recent birthday party, Mr Gaddafi is clearly quite a "player" in the country.

Mr Deripaska and Mr Rothschild have invested heavily in the £500 million-plus Porto Montenegro project to make the country the "premier marina destination in the Mediterranean".

Lord Mandelson, as EU Trade Commissioner, championed Montenegro's entry into the World Trade Organisation (WTO) saying last year: "Montenegro has made remarkable progress in preparing for WTO entry.... The EU is a strong supporter of Montenegro's entry into the WTO, and is proud to be the first partner to conclude bilateral accession talks."

But, crucially, did Lord Mandelson, who in 2006 ended EU trade tariffs on aluminium thereby hugely benefiting Mr Deripaska's business interests, lobby for Mr Megrahi's release?"

Day One

2009-05-31T09:56:00.016+01:00

I'm starting this new blog because the previous blog pulled in a lot of viewers who were obviously only passing by. I think it was because I used a title that was eye-catching to the zillions of people who are interested in "writing". It's a bore to get lots of one-off hits, pushing one's readership count up for no good reason. So I'm starting again with a very individual title, which should not attract the idle flickers-through-blogs-about-writing crowd.

I will be posting every day and some days will be more interesting than others.

And because I like a blog with pictures, I'm adding one now.

Above is an example of rampion, a plant of the bellflower family: it's a biennial plant grown as an annual vegetable for it leaves and roots. It has beautiful flowers, though there's something spikey and maybe a little unfriendly about them, which makes me slightly uneasy.

That may be because the German name for this plant is Rapunzel - the name of one of the Bros. Grimm's most famous and odd fairy tales I read a as a child.

For that reason I have used rampion in the mystery book I'm writing at the moment, to point up something mysterious and worryingly odd about the heroine.

In the fairy story, Rapunzel was a beautiful girl with enormously long golden tresses, who was imprisoned in a high tower by an wicked enchantress. The tower had no door and no staircase, just one small window.

When the enchantress wanted to take food to her prisoner, she would stand beneath the tower and call "Rapunzel, Rapunzel, let down your long hair." Rapunzel would let down her thick golden locks and the enchantress would climb up.

One day, as in all good fairy tales, a handsome prince rode past and saw the enchantress calling and climbing up the tower. When she had gone, he did the same, and, of course, rescued the beautiful girl - and naturally they both lived happily ever after.

Tho' I suspect Rapunzel never cut her hair, just in case. One never knows, with an enchantress!