I thought I’d continue in trivial vein today. After all, it you can’t be trivial when the world as you know it is collapsing around you, when can you be? I’m reminded of the time, back in 1972, when the Chief Purser of a BOAC flight from Melbourne descended from First Class to remonstrate with me for being ‘flippant’ during an emergency. My crime? To ask the near-hysterical air-hostess for bread so we could toast it against the 30 metre flames shooting out of the port engines. “If we’re going down,” I’d said, “we might as well eat on the way.” There’s no amusing some people.

So, here’s a transcript of a conversation my partner had at an Orange phone shop yesterday, about their 3G modem:-
Can we test it to make sure it works up in the hills?
No, we don’t allow that. You can’t have it without signing a contract first.
But what if it doesn’t work there. Can I return it and cancel the contract?
Only if it’s broken.
So, we could be stuck for 18 months with a product that doesn’t work costing us 45 euros a month?
Well, if it didn’t work, you’d just have to fight [pelear] with Orange about terminating the contract.

Slightly dubious about this, I thought I’d have a go today – with exactly the same result. But for this addition:-
Vodafone [British, by the way] are willing to let us test the modem.
Well, Orange [French, en passant] isn’t.
But what if there’s no cover up there?
Well, if you have an Orange mobile and that works, the modem will work?
Are you sure?
Yes.
100 per cent sure?
Yes.

Frankly, I can’t say I share her confidence and a Spanish friend listening to this chat rudely laughed out loud at the suggestion of a guarantee of workability. But, then, his partner’s doesn’t work in the centre of Pontevedra, so he’s a bit biased.

But to get more serious . . . I’ve just had another belated but fascinating dip into the June issue of Prospect magazine and here are some quotes from a book review, headed End of the cult of finance? The book in question is The Trillion Dollar Meltdown, by Charles Morris:-

J K Galbraith once observed that all financial crises produce similar responses: someone has to be blamed; there is a headlong rush to regulate and reform; and, amid the intense focus on the idiosyncrasies of the crisis, the thing that actually caused it all in the first place – speculation – gets overlooked.

Accusations and the rush to regulate are all around but there is little discussion about how we allowed speculative fever in housing and financial markets to become so intense that it turned into a bust.

If the book has a fault it is that it focuses too narrowly on the USA. This is a Western financial crisis, if not quite a global one.

As Galbraith observed, booms arise from a poor memory, so that each new generation proclaims its brilliance in financial innovation – confident in the “specious association of money and intelligence.” On this occasion, the specious association was expressed through financial instruments such as structured credit, derivatives, asset-backed securities and collateralised debt obligations. But these were no more the cause of the crisis than a car’s accelerator pedal is the cause f a road accident.

History shows that periods of sustained low inflation tend to be accompanied by asset-price bubbles – and that’s something central banks should have pounced on.

So, in the end, if there is a finger of blame, it points unequivocally at the authorities – the central banks, financial regulators and, ultimately, governments.

To have a 2 per cent inflation target and ignore sustained double-digit house price inflation, is like following a strict food diet while drinking unlimited alcohol.

The “Minsky moment” is the point at which systemic risk in the financial system threatens a melt-down and demands unorthodox intervention to restore stability. . . . The time to worry about ‘moral hazard’ [letting lenders or investors avoid the consequences of their risky behaviour]has long passed. The costs of inaction are now too high. In democratic countries, public authorities have to intervene and, yes, it’s possible that some lenders or investors will be bailed out who shouldn’t be. So be it. Governments then then act to restrict such risky behaviour in the future.

Governments may need to use public money to fund the recapitalisation of banks. The quid pro quo for this will be greater regulation. . . In the rush to regulate, we may overdo it and stifle innovation. . . . One thing’s for sure, the cult of finance will be eclipsed – at least until it adjusts to the new world in which it finds itself.

So, it’s good to know that, as President Zapatero has told us the crisis is all the fault of the Americans and that Spanish financial institutions are the most robust in the world, there can’t have been a speculative property bubble here in Spain and all the clever Spanish financial wizards must have eschewed the fevered activities of their colleagues around the globe.

Staying with banking but descending from the heights of generalities to the depths of specifics, it seems that Spanish banks will not be behind the door when it comes to generating new or increased sources of revenue. A lawyer friend told me this morning that some British clients had yesterday been charged more than 1,000 euros simply for the issue of the [compulsory] bankers’ draft with which they paid for a Galician house costing 100,000. The cost for these used be around 0.2% of the amount, though Citibank charged me a fixed rate of only 70 euros back in the pre-history of July. When my friend challenged the bill, the bank explained it was a reflection of tough times. And then immediately reduced it to 250 euros. Sometimes it’s good to pelear. Especially in Spain. But my partner and I aren’t planning on doing it with Orange. Even if she is French.

Finally – Is it only a few months since a friend of mine here was telling me what an impressive, if expensive, place Iceland was? You can probably pick up the entire country for a couple of hundred euros now. Or at least its national debt, if you fancy wrapping it up in a bundle and selling it on. Assuming there’d be a taker. There used to be one born every minute but they appear to be in short supply just now. Apart from innocent taxpayers, of course. American, British, German – and Spanish. Hell, that includes me. Twice.