Russian out of Cyprus

We’ve had a couple of holidays in Cyprus, in mid-summer when it is stiflingly hot. We stayed in a villa in the hills above Paphos. The routine was: get up late, have brunch, laze around while the sun was high, then head to the beach in late afternoon for relief. The first time we visited, in 1999, I was struck by the amount of Russian spoken on the beach and in town. With hindsight this was probably the vanguard of a surge in Russian connections with the island. This year it is estimated that over $30bn of deposits in Cyprus banks is from Russian sources. Russian depositors surely weren’t the only ones: there are thousands of UK expats on the island with money in local banks. The similarities with Iceland are quite striking: Icelandic banks were offering these great interest rates to foreigners to the extent that its bank assets grew to 12x GDP. We had many friends in the UK who were only too happy to put their cash with Icelandic banks, only to squeal like crazy when the banks were nationalised. Cyprus was doing the same thing and although the bank asset-GDP ratio only reached 7x, this is still pretty ballistic. Caveat emptor! South African bank assets are less than 1x GDP, for example. Bank failures have been around for a long time: the collapses in the US and England in the early 1800s are well documented. In short, we need banks but they will constantly come back to bite us – that’s leverage and no amount of regulation is likely to change it. The QSL is from the Cyprus Telecommunications Authority, a radio-telephone utility service in Nicosia, heard on 8mHz in London in 1995, using 3 kW.

Please Sixto Rodriguez, avoid the Great American Songbook

Sixto Rodriguez loves SA and SA loves him. We went to his latest show and knew we were being just a little bit had. But we didn't care. Here is a guy whose music is iconic for a generation of South Africans and even some of their kids. In the 70s just about everyone I knew had a vinyl copy of Cold Fact, his best album. You heard it at parties, on lazy Sunday afternoons, wherever. In the Oscar-winning documentary, Searching for Sugar Man, which had many grown men crying, much was made of the 'anti-apartheid anthems' in his discography. This is poppycock. We just liked the music - his plangent voice, punchy lyrics, simple arrangements, catchy tunes. And in his concerts he still mostly pumps out those same songs. Unfortunately, his backing group was totally over the top. For starters, no less than two drummers with full kit and separate congas. Then a rhythm guitar with six and twelve strings, Rodriguez himself on rhythm and finally lead and bass guitars. It was hilarious at times. There were moments when the backing band lost the plot. For one song, a cover of 'Fever', Rodriguez strummed a few bars while the band stood nonplussed before the base player suddenly twigged, shouted it out and then they quickly chimed in. There were also a couple of songs out of the Great American Songbook, the kind of stuff that Rod Stewart and Robbie Williams have puked out when past their prime. Rodriguez did a version of 'I Only Have Eyes for You' which was written in 1934. It made me cringe, out of tune and out of character, appalling. Someone shouted from the crowd, "I love you, Rodriguez" and he shouted back, "I know it's the drinks but keep talkin' baby!" This is a stock line he delivers over and over round the world and it still gets a laugh. Anyway, this wiry construction worker deserves his place in our hearts. He's an American from Detroit but his parents came from Mexico. The QSL is from Radio XEG in Monterrey, Mexico, heard booming in one morning in 1991 in Morgan Bay, South Africa on AM 1050, a distance of more than 10000 miles.

Central banks light the fuse

Central banks are in overdrive, red blood corpuscles pumping. QE 'over-the-horizon' is the play. There are variations in style but the game is essentially the same: ensure abundant liquidity at the core of the financial system. Numerous targets are deployed but the ultimate objective is to re-stimulate spending. I created an indicator based on excess manufacturing and labour capacity in the US. Even if some capacity is left permanently obsolete, there appears to be plenty of space to accommodate a big pickup in demand. So far the indicator has retraced from record lows only to the point where previous recessions ended. Some economists are calling for a nominal GDP target i.e. a combination of inflation plus real growth. Don't worry about inflation, they say, it's a long way off. For now I share this view. What I see is the winding up of a new global cycle, ultimately likely to end in tears, but which for the moment is actually accompanied by a high degree of scepticism. The wall of worry remains - this is usually good for risk assets. We are some way from buy-in and even further away from euphoria. But the almost unlimited licence now claimed by central banks is setting the charge for the next bubble. Recently we've seen a spate of articles claiming that irresponsible bankers and the private sector should not have sole right to driving the new cycle. Rather, the public sector is equally if not more entitled, especially when it comes to creating new capacity, sorely needed around the world. And why shouldn't central banks buy the paper government issues to fund this? This theme looks set to run and run. Japan's central bank funding of state spending in the 1930s has already risen like a phoenix and the arrival of Mark Carney from Canada at the Bank of England looks set to take the idea another step further. Carney was born in Canada's Northwest Territories. The QSL is from Cambridge Bay Aeradio in NWT, Canada. This remote station, using 5 kW, was heard in Johannesburg in 1991 in contact with transcontinental aircraft.

To what or not to what?

Unobtrusively, ineluctably and relentlessly a certain horrifying usage of English has crept up on us, here in South Africa but also in the UK. I'm not sure where it first gained coinage but it was always lurking in the shadows. For decades it had made sporadic appearances only thankfully to recede back within its confines. But now it is unleashed - instead of the exception it's becoming the rule. I'm referring to the howler: 'than what', as in 'this is much worse than what I thought it was'. You come across it in multiple guises: another example: 'analysts were surprised by the company's earnings guidance which was much higher than what management had indicated last month'. Whenever I hear that intrusive 'what' I scream silently, no please, not another one. Every time another 'what' is uttered, universal usage is tipped another notch in its favour. Soon it will be deemed wrong not to 'what'. Language police will pounce on offenders. Non-whatters will be ridiculed for their ignorance. 'Than what' is in the same category as 'as well' where the accent is on the 'as', not the 'well'. Only, 'than what' is far more widespread and gathering steam. In fact it appears to have taken over. Another travesty that appears to be gaining momentum is the use of 'desert' instead of 'dessert' in restaurants. Suddenly it's all over the place. Or maybe, its all over the place? It's not that I'm advocating a reversion to Fowler's A Dictionary of Modern English Usage (published 1926) or anything but really, you just don't need the 'what', it's superflouous. The QSL is from BBC Radio Kent, heard in London in 1996. Note the lovely oast house logo on the letter. Henry Watson Fowler was born in Kent.

It's a load of old Coppock

The market rally continues with equities putting on a good show around the world. By just about any short-term measure the market is very overbought. It looks well primed for any adverse news to trigger a pull-back. But on the flipside, there is such a cacophony telling us this is the year of the equity and for moving down the risk curve that many players may just buy into any weakness in fear of being left out. Because we know we can't really see the future and that forecasting is a mug's game, we resort to all kinds of techniques to help us decide which way to turn. Still very popular, despite scorn from some in the investment community, is technical analysis. And there is no shortage of different versions. As one of my earliest teachers taught, "The beauty of technical analysis is in the eye of the beholder." In other words you have to find your own way, there is no magic potion. But it does have value. Technical experts are feverishly rolling out their Bollinger bands and Coppock indicators, trend reversals, point-and-figure upside targets and the like. Coppocks measure long-term trends. You can use data going back 50 years and only find a dozen or so buy signals, so they can seem pretty persuasive. The problem is that when you look at a 50-year chart on a single page it doesn't give you a sense of how much pain you might have to take while you're waiting for it to work. Tiny little blips on the chart could be twisting your stomach upside down from day to day. Edwin Coppock developed the curve in 1962 for the Episcopal Church in San Antonio basing his calculations on bereavement and mourning periods. It's useful if you apply it in your own way but can cause its own kind of bereavement as well! The QSL is from WOAI San Antonio, TX, a clear channel station heard in Morgan Bay, South Africa in 1987.

Mark Twain in January, May and October

As Mark Twain's Pudd'nhead Wilson said: "October. This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February." It's pretty close to the mark - there ain't really much to say about a particular month, although that won't stop people from saying it. But 2013 has started with a bang. Stocks are up strongly, the best 'January effect' since 1997. Where else are you gonna go when global economic activity is re-accelerating and central bankers are keeping their feet on the gas? Suddenly, there's a convergence of views by global strategists that this is the year of rotation for equities. After a long period where cyclical stocks were under the cosh, now they appear to be emerging from the shadows. In contrast, high-flying consumer stocks had a bit of a wobble in the month as some pundits look ahead to a time when interest rates in rich countries actually may start to rise. No, surely not! Anyway, one is sceptical about such a January effect which originally claimed that stocks rose in January after falling in December as people sold their bad calls to generate tax losses. Locally, the claim is that investors returning from their summer holidays are all fired up with new ideas from tips heard on the beach. Whatever the truth, stocks have actually been rising since mid-November with just a brief downward blip in late-December. There's also supposed to be 'sell in May and go away' and everyone's always a bit nervous in October, when the crashes of 1929, 1987 and 2008 occurred.  Mark Twain was brought up in Hannibal, Missouri. The QSL is from KMOX, St Louis, MO, heard in Morgan Bay in 1987. St Louis is about 100 miles downriver from Hannibal. KMOX is one of the originals, first signing on in 1925.

The Antarctic will be Fiennes and cold

Ranulph Fiennes is en route to Antarctica on yet another caper. This time he's to cross the continent in winter, enduring the most inhospitable conditions imaginable. Transporting the team to its start point in Queen Maud Land is Agulhas, the now-retired trusty South African ice-breaker that long served SA's southern bases on Marion Island and Sanae, the Antarctic base. In a recent BBC News Quiz one panelist meanly quipped that Fiennes has left a body part on every continent, in a lifetime of incredible expeditions. This is a tough one - around 3800km of skiing, with one day's rest of every four. Along the Solar Plateau in mid-winter the thermometer can dip to -90C, with not a hint of sunlight. One can only laud the charity they are supporting, Seeing is Believing, but I've reservations about the whole concept of powered vehicles traversing the pristine continent. Extreme World Races with their Arctic trucks and dices across the continent have pioneered Fiennes' route. His Mobile Vehicle Landtrain will consist of two Caterpillar tractors with plenty of fuel, so the team is not going to freeze to death. I know, it's progress and yes, I've got a car and ships with engines have been travelling to the Antarctic for yonks but I guess it's the same feeling I have about jetskis on lagoons or beach buggies on white sandy beaches. At least Fiennes will be able to claim a genuine first, not like the European explorers of old, like Speke and Livingstone, who competed desperately to be the first to see things which other humans had observed for hundreds of years before. Also unlike Livingstone, the Antarctic team will know exactly where it is, whereas the African explorer became hopelessly lost. The QSL is  a telegram from South Africa's Sanae Base in Antarctica, using just 1 kWatt, heard in 1985 in a link-up with Derdepoort to facilitate weekly radio-telephone calls for the team at the base. It's one of a bunch of Antarctic radio QSLs collected in the 1980s.