Vox O’Malley demonstrating it on a variety of kitchen implements. I can make their money disappear as well.

Just a weblog:

William Crawley’s entertaining summary of his interview with Pete Rollins at ikon, Belfast.

Pete’s unfolding (apocalyptic) response to William’s question “Do you believe in God”?

Fascinating stuff: Belief, ontology, empiricism, commitment, language – all in the mix.

Voxless

Max has been geeking out

Day 1

Day 4

Max O’Malley is amazed at how fast information travels.

Amongst some papers I discovered a brochure for the Presbyterian Mutual Society, it is undated but seems to be around 2002/2003. On looking at it I have some questions for the church and the former Board of Directors during the period from then until its collapse.
“What is the Presbyterian Mutual Society?”

According to the brochure:

I think the phrase “encourage Presbyterians to save through their own church“ and “for their mutual benefit” drives a horse and cart through the “legally distinct” duck and cover move we have heard (see Question 3 below).

What Assurance was given to investors?

A “categorical assurance” was given by the directors in this brochure that under no circumstances do they “speculate” with funds “entrusted to their care” but rather funds are used to advance loans to shareholders of the Society who wish to borrow.

Secondly if there is an excess of money (ie. if more money comes in than borrowers want to borrow) that excess will be invested “on the best terms available in established banks in Northern Ireland”.

So, according to this official brochure investor’s money is either out on loan to other PMS members or in cash accounts in Northern Ireland banks. The big question is one of security then? The excess money will only be invested in cash, an investment that (aside from bank collapse) does not go down.

How secure was the other money out on loans? The brochure answers these concerns:

What is acceptable as security?

The loans are secured by Property deeds, life assurance policies in excess of the amount owed and guarantors. Small loans under £5,000 were permitted unsecured which I’m sure were not a big part in the society’s collapsing asset value.

So, to any investor their money is well secured both the collateralised loans and the excess cash. Worst case scenario would be some guarantors not paying up in which case the society would have legal call on their assets or some houses used as security had significantly lost their value. Neither of these seem to be the problem with the mutual’s assets as far as we can tell. Instead somewhere along the line the makeup of the society changed to (as far as we can tell):

Questions

1. When did these rules of the society change? At some point they began to invest excess cash, not in bank accounts but directly in property and therefore expose investor’s money to greater risk than this brochure indicated. By anyone’s measure this is “speculating”.

2. Did the society inform all members of the change in their investment risks? I may have missed this discussion but so far I don’t see it on any of the news reports. Perhaps other terms and conditions contained clauses that allowed changes without informing investors? If the society had of continued with the level of security as described in this brochure their assets would not have been so radically diminished as they are rumoured to be now (40% / 50%??). In fact all the money is likely to have been completely secure. The Directors made the choice to wander from this investment approach, not the investors as far as I can see.

3. Why did a church spokesman claim in a Newsletter article the phrase describing the society was “inaccurate” when it was printed on official Presbyterian Mutual Society brochures? Does no one else have these brochures in their possession anymore?

The Newsletter article (original) states:

“Dr Watts states there is no connection between the Presbyterian Church and the Presbyterian Mutual Society,” said the reader.

“But the Church’s Board of Mission in Ireland website says, ‘The Presbyterian Mutual Society was established in 1982 to encourage Presbyterians to save through their own church and manage such savings for their mutual benefit to enable shareholders to borrow at a competitive rate of interest’.”

[this seems to be the exact wording of the brochure above, yet...]

A spokesman for the Presbyterian Church said the website statement was “inaccurate”.

He said: “No one has denied the links between PCI and PMS and the blurring of divisions that has led to this inaccurate statement that encourages Presbyterians to ’save through their own church’.

“The particular website it appears on was an interim site of the Board of Mission in Ireland and should have been taken down before it launched its official site at www.missionireland.org.

“However, it serves to illustrate that while the Church and the society are separate legal entities, that has at times been unclear.”

So at its outset the society gave indications in its literature of its clear (“categorical assurance”) of security, anyone looking at the information would feel that their money was safe. At some point things changed dramatically from that first advertised. Did future brochures (post 2002/2003) indicate this change in where investor’s money was going? And, more importantly were pensioners who had invested their retirement lump sums or redundancy money on the basis of the brochure I have informed by letter or some other method that their money had changed from a secured loan / cash investment to a part speculative property fund?

I hasten to add that I have not had any personal money in the Presbyterian Mutual; I am an interested member of the Presbyterian church whose day job has involved talking to many distraught elderly people whose incomes in particular have been destroyed by these events.

You have all heard of the Coop, right? Well a few years ago the “Co” started an internet only banking organisation called “Smile”. It was the early days of internet banking and only the young and foolhardy like myself were willing to part with the traditional bricks and mortar bank approach and commit my money to an organisation that existed only on “t’internet”.

I’m happy I did for a number of reasons, not least that my money is invested using a strict ethical policy that means the money I save with the bank is not loaned out to companies or organisations that are environmentally damaging or have questionable activity in human rights and international development. According to Smile’s website they have withheld £1 billion of our money from businesses who want the money but who conflict with the ethical policy. That means the money goes to businesses with more favourable ethics.

It is as simple as that. But I also like smile because it is a great bank, good rates of interest, their website is really easy to use (and I have seen some AWFUL banking websites) and they have had firm internet security right from the outset.

Being part of the Co-operative Bank means Smile shares the values of the Co-operative movement, dedicated to a fairer means of distributing profit. That means they are not driven by the decisions of shareholders. The Co-operative Bank with Smile is still the only UK clearing bank with an ethical policy.

A good bank, owned by their members with a good policy. What more could you ask for?

Caution: They do have a credit card which is coloured pink – in several recent purchases I have made the till operators have looked at it and laughed at me. Some people just need to grow up!

By the way, I don’t work for Smile nor get any kind of backhander, back rub or honorary directorship for promoting them.

Rick Johnston,

Independent Financial Adviser: www.sjfs.biz

[This article was originally published on www.ajustlife.org]

Imagine a bank that looks like this (simplified for my benefit as much as anything else!):

It has £100,000 of money on deposit. According to banking rules, each bank is allowed to loan out 90% of the money it holds on deposit. Or to put it another way it must keep 10% of the money it holds as customer deposits in cash reserves. Most people don’t need their money as cold hard cash but banks keep this amount for those that do. The rest can be given out to loan customers (at an interest rate of course).

The bank also may own other assets such as Government bonds or property. It cannot loan a percentage of these assets though they make up the accounts of the bank.

Quantitative easing to my knowledge purchases these assets from the banks for cash. The Bank of England twists a few dials in its big Computer Cash machine creating for itself, say £50,000 extra cash. It passes this £50,000 to Bank A in exchange for £50,000 worth of its assets.

The Bank of England now own the assets and Bank A now has £50,000 more of cash reserves. This means if it wants, under the 90% cash reserves rule – it only needs to hold 10% of this (£5,000), the rest it can loan out to you and I for car loans, mortgages or a wee wad of cash to get that Llama farm started you always thought of. The amount of cash in the economy should then increase by £45,000 through the purchases made by those taking out the loans. But better than that, imagine if this £45,000 goes directly to you when someone purchases that 1 bedroom flat you have just sold.

Assuming you are already living somewhere else and decide not to pay off the mortgage that money will probably end up in Bank B or Bank C (as an independent financial adviser I go for Bank B). This new bank on receipt of your deposits can now do what Bank A has done with its extra cash… it can loan out 90% of the £45,000 you just gave it as a deposit. 90% x £45,000 = £40,500 money available to be loaned out from this new bank deposit to some other friend of yours to purchase their first gold laminated dustbin or to set up an ethical business in the developing world. (Money is just the opportunity, it has no taste or ethics of its own). Can you see how the picture develops ? The money supply “expands”

However.

The banks may not decide to loan out the cash. It remains only a potential increase in the amount of cash swilling around. The bank could just hold it in its reserves. This is the risk, this is the experiment.

Vox O’Malley – also a Financial Adviser HERE and developing an ethical investment site HERE

So, here is what seems to be happening in my best layman’s terms. The businesses in our economy are not selling enough stuff because we are not buying enough stuff.

The businesses are not making enough profits and some are even making a loss therefore they decide to cut their costs which in some cases results in making people redundant. Those businesses then cut costs and increase their profit but the income normally received by the people made redundant is no longer out there being spent on other businesses.

The economy as a whole shrinks – businesses don’t want to take on new staff, develop new things for us to buy or take risks with new ventures. Ordinary people are nervous about their jobs and future income and so keep their money rather than spend it, further reducing the likelihood of stuff being made and sold.

Banks, who normally create more money by lending money to us at various interest rates through mortgages or personal loans, are nervous about the level of “bad debt” they own. To counteract this bad debt they want to keep as much good money on their accounts (in the form of our savings and deposits) and are extra nervous about creating any more bad debt by lending to people like you and me.

But the economy and the businesses which support our income and fill the government vaults with taxes need us to purchase their goods and services. So the Bank of England has dropped their interest rate consistently to help pump more cash into our hands. Anyone with a mortgage linked to this rate will have seen some extra cash in their bank account over the last period. Perhaps we have used this to buy more iPods, food or holidays but equally we might have just put it back in the banks as savings or paid off more of our mortgage debt. So, some of the rate drop “works” by increasing the purchasing of stuff but in other cases it just stays in bank accounts or reduces our personal mortgage debt. If these rate drops don’t do enough then the Bank needs to come up with additional options to get cash swilling around in the economy – getting more money to us in such a way as to make us feel “flush” enough to spend on the goods & services our businesses want to sell.

So the latest trick is “Quantitative Easing”… dealt with in part 2

As appeared on Radio 4’s “The Write Stuff” and deserving wider attention. Apologies to any offended and have to say that I enjoy Auntie Bessie’s Yorkshire Pud’s.

in the style of “Rabbie” Burns

Address to an English Dish

Raise hae your tassie and gie place
To palest of the puddin race
First milk and beef fat you procure
And mix them up with eggs and flure
Pop in pan and cuik it guid
And then you’ve made a Yorkshire puid

Draw close your joint stool and then eight
the muckskipe lying on your plate
Bleath it bransom break and brelly
Twill lie heavie on your bellie
Tak days of running to dislodge
That great insipid lump ay stodge

Thank God for haggis
It’s the fuid
to gi more strength than Yorkshire puid
that pockie English tak for dinner
To make their thin bluid even thinner
Most palid of all lunchkeen snacks

For TIMOROUOS

COWERING

SASENACHS!

The BBC covered the event [Vox O'Malley can be seen coyly entering and high fiving the double line of Apple staff.] and several bloggers recorded the occasion, Here and Here.

I was there from 6:40am, an enthusiastic effort on my part. The crowd were in great spirits and I met some great people – thanks also to Starbucks for donating free mini hot chocolates!

At the risk of adding cheese to the Apple pie, I did think it was an unusual sight in cynical Belfast to see such smiles, albeit for a beloved retail brand. It was, I do think, and is, “good” for Belfast.

My own footage is here: