28 April 2008

Now With Hardy Heron (aka Ubuntu 8.04)

At the risk of appearing like someone who is turning into a full-blown nerd of the computer variety, I noted something very interesting yesterday.

I was running the Update Manager function that exists in Ubuntu, and lo and behold, I was prompted to update to Ubuntu 8.04 (Hardy Heron) from what I installed initially, which was Ubuntu 7.10 (Gutsy Gibbon).

This pretty much means that Ubuntu 7.10 now holds the record for the shortest period of time that an operating system has resided on a computer that I own. 5 weeks.

That's not the amazing part. After a bit of thought, I was prompted to think that this could be a service that Microsoft users could benefit from - how cool would it have been if when Windows Vista was released, you ran your Windows Update in Windows XP and a message came up prompting you to upgrade to Windows Vista no questions asked?

Mind you, a great deal of Microsoft's bottom line benefits from being able to flog the latest and greatest version of Windows to users who already use it. C'est la vie.

From what I can see, Ubuntu 8.04 has fixed a few annoying issues that I had when I initially installed Ubuntu 7.10. The fonts are sharper and, I think, nearly comparable to Windows Vista. Previously, they were a bit fuzzy.

But there is one thing that is annoying me at the moment and that is the thing that certain little things that you get when you're browsing which were a pain during 7.10 are completely ridiculous in 8.04.

Quite a lot of the blogs that I read contain embedded YouTube videos. These ran badly in 7.10, now they don't run at all. Trying to find a fix through Google is not bringing up anything at all, except that I should be running Macromedia Flash Player 9. The only problem with this is that there isn't a version that exists for the 64-bit version of Ubuntu that I'm running. Nuts.

So my current goal is trying to replicate the seamless internet browsing that Windows offers, but in my Linux environment, which appears to be easier said than done. Any ideas, anyone?

Now the interesting bit is when I get my shiny new ASUS Eee PC 900 which I plan to run on eeeXubuntu. Scary!

26 April 2008

Great debacles of our time: Brokers get broken

Oh this is a right pickle.

Once upon a time, stockbrokers were venerable institutions with names like JB Were & Sons, Potter Warburg, Ord Minnett and others. They screamed integrity, even if you knew that the way they profited was by buying and selling shares, hence putting them in situations where conflicts of interest can and did arise.

Over time, advising their clients on share trading became much of a side event, as they branched out into areas that could "add value" to their revenue flows.

Derivatives trading became more prevalent. Then full financial planning services. Institutional advice. And margin lending.

About the same time, fund managers, custodians and superannuation funds were finding that they could open up more income flows by lending out their shareholdings to other institutions or investors. The money that flowed from this was valuable.

Why would anyone borrow shares? There appears to be two main drivers for this:

1. Borrowed shares can be sold, thereby covering an activity known as "short selling", which is where you sell securities that you don't possess. You can then buy them back later, which you need to do before passing the securities back.

2. Holders of borrowed ordinary shares can vote on resolutions of listed companies.

The mechanics of stock lending is a weird one to me - and I don't really know the full legal reasons why. When shares are lent, legal title actually passes from the lender to the borrower.

So what actually happens here?

Normally, when title to a security changes hands, there is a Capital Gains Tax (CGT) event. Where stock lending is concerned, for no apparent reason, this rule appears to head straight out the window.

So if the lender is not being pinged for the transfer of securities, one would expect that they have retained some sort of beneficial ownership. In which case, normally, when the shares in question are sold by the borrower - this should give rise to a CGT event for the lender. This doesn't appear to be the case either.

Legal responsibility for the CGT on shares being sold and then bought back would appear, then, to lie in the hands of the borrower. And I'm not really sure how this works, given that what I know of our CGT rules, assets need to be bought before they can be sold.

(Although, it should be noted that most share borrowers fall into the category of "professional investors", in which case, profits retrieved from the selling and buying back of shares would appear, to this observer, to fall into the income category, which makes the whole thing a little bit simpler to work out.)

Which means that ordinary tax laws go out the window a little bit here, and there must be some loopholes or explicit exemptions that are currently in place to facilitate this sort of activity.

But back to brokers again.

Eventually, someone had to connect the dots and work out that margin lending and stock lending could be combined in a profitable way. This would have been a no-brainer for stockbrokers, given that margin lending (or pretty much most lending arrangements for that matter) and stock lending are largely unregulated.

Brokers, who by now had extensive margin lending operations, were changing their arrangements with regards to margin lending subtly. The scope of the change was minor, but a biggie nonetheless: Brokers would assume ownership of the securities outright, rather than merely taking a charge over them.

Then, the broker could on-lend the securities in question.

I don't expect that this is limited to a handful of firms, either. While I have no evidence to back this up, I suspect that the practice is rampant, and it's only some who have been caught doing this.

Consequently, it was only a matter of time before a broker found themselves in hot water over this.

Tricom's problems came to light at the start of this year, when there was a huge slide in the value of stock markets around the globe precipitated by the woes in the US housing and credit markets. Essentially, they had lent out so much of their clients' stock, that when the slide hit and their clients were selling, they couldn't get the stock back in time to enable settlement for the sales made by their clients.

Tricom is still in business. They've since been bailed out by a lot of their owners and clients. Which makes them incredibly lucky.

More worrying was the problems caused by the collapse of another stockbroker not long after. Opes Prime collapsed after similar problems, however Opes Prime's problems were far sillier.

Opes Prime already were exposed to completely ridiculous practices that they'd put in place where they were accepting small listed companies as security for margin loans. This is not normally done.

Normally, margin lenders won't accept shares for security if they lie outside the ASX100, or maybe the ASX200 at a pinch. Opes Prime appeared to accept shareholdings in micro-caps, which was phenomenally silly.

Malcolm Maiden, in The Age described Opes Prime as the "margin lender of last resort".

Indeed, Marcus Padley said somewhere that the value of shareholdings outside the All Ordinaries Index posted as security came to in excess of 65% (if my memory serves me correctly) of Opes Prime's total book. Unbelievable!

Anyway, compounding this was the insistence of Opes Prime to take advantage of lax stock lending laws to move shareholdings between accounts in order to avoid making margin calls on clients' accounts. This was dangerous stuff, and eventually, the losses were going to be big.

ANZ Bank got dragged into this, as they were Opes Prime's principal financier, and held title themselves to much of Opes Prime's stock. How they did this, I'm not really sure. Opes Prime would have been extraordinarily stupid to have allowed ANZ to have ownership of the shares in question, given their practices.

At the end of the day, both the ASX and ASIC have come under heavy fire for allowing situations like Tricom and Opes Prime to happen. I'm not sure why - they couldn't really have prevented this, anyway. I'll talk about this some more in a few moments.

As a postscript to this, broking firm Lift Capital have just gone under, after inappropriate margin lending arrangements with three of the company's directors sent this firm under.

So the question remains - why is only investment covered by the financial services provisions of the Corporations Act? Why isn't lending?

This is more a gripe than a question that I'm going to attempt to answer today.

Standard but necessary disclaimer: This is not advice. Only a complete idiot would think that any of this constituted advice. It's not even vaguely reasonable to consider this to be advice. If you are in any doubt as to the content of this, see a good, independent financial adviser immediately. They do exist.

15 April 2008

Rock epic of the month: "Sheep" (Pink Floyd) 1977

Rock epics of the month is a series of posts where I'll look back on classic examples of what I think is the greatest excess of rock and roll - the rock epic.

Like a lot of Australian males, I went through a Pink Floyd phase during my high school years. This is something that Australian females completely misunderstand.

The Floyd thing usually manifests itself during the lower years of high school, possibly even during primary school, when it gets rebellious and "cool" to sing at the top of your voice in the playground, or possibly even during class, "Hey! Teacher! Leave those kids alone!"

Why the bridge from Alice Cooper's "School's Out" doesn't get quite the same attention is a mystery to me, but I'll continue. ("No more pencils/No more books/No more teacher's dirty looks")

Anyway, later on during high school, someone inevitably passes around a copy of The Wall. Kids love themes of alienation, and it's not long before the movie gets a viewing as well ("Whoa! Check out this bit where Bob Geldof shaves his nipple off!")

Before long, an older brother will suggest that they should give The Dark Side Of The Moon a look. The kids love this, particularly the odd time signature changes of "Money" and the rocking out of "Time". The fact that "Brain Damage" has the word "lunatic" in it is greeted with much hilarity, kinda like what would happen if you said "boobs" in front of Beavis and Butt-head.

Eventually, other Pink Floyd work gets a going over. When I was at high school, the album A Momentary Lapse Of Reason was released which got a few more fans. For the casual fans, it tends to fizzle out after getting into Wish You Were Here.

I stuck it out a little bit longer than this. And I'm glad that I did. Animals was, to me, their best album, and it had a rocking selection of tunes on it. All five of them.

Three of them were extremely long rock epics.

Animals came after they'd finished exercising the collective guilt that they had built up over the missing-in-action guitarist and vocalist Syd Barrett, who had left the band early on in their careers, with the album Wish You Were Here. Animals was a concept album of sorts, inspired by George Orwell's book, Animal Farm. It was also probably the last Pink Floyd album created on group consultation, although the nascent dictatorship of bassplayer Roger Waters was starting to display itself covertly here, even if the only evidence of this was the writing credits - all Waters except "Dogs" which is credited jointly to Waters and guitarist David Gilmour.

was my favourite from this long player. Ten minutes and twenty one seconds of rock.

"Sheep" starts innocently enough, with some baa-ing and some initially cheesy work on the Fender Rhodes by keyboardist Rick Wright. Waters bass starts hinting at things to come, shortly followed by the drums, albeit in an exploratory capacity. Before too long, it launches straight into the main riff and the first verse together. It actually, unlike a lot of Floyd's work, nestles into a groove early on and refuses to leave, right up until the end of the end of the song. Even through the bits where it breaks down to bass and some keyboards.

Waters' vocals sound quite urgent and pained during this song. He wasn't the best vocalist in Pink Floyd - Gilmour was - but his delivery matches the song rather nicely.

Gilmour, on the other hand, lets rip on the guitar in a way that hadn't been heard since Floyd's 1970 album, Meddle. This was probably some of the more aggressive work that he had done.

This song really had everything thrown at it - recorded baa-ing, unusual keyboard textures, highly aggressive guitar, even drummer Nick Mason chimes in with a reading of "The Lord is my shepherd" (Psalm 23) via a vocoder - yet none of it seems out of place. Mainly due to the fact that Waters bass is just point blank refusing to give up the groove it is milking.

And this is another example of a rock epic that builds and builds. In fact it nearly explodes halfway through, before the breakdown. It does finally, before the end, when Gilmour goes bananas with some frenzied strumming which signifies both the climax of the tune, and the start of the final fade-out.

Glorious stuff.

Floyd would go on to record The Wall, and The Final Cut - both of which were dominated more and more by Waters' megalomania. The Final Cut is really, for all intents and purposes, Waters' first solo album.

Floyd split after this. Waters refused to participate when Gilmour and Mason reformed Floyd in the mid eighties to record under the Pink Floyd name, and Wright joined them full time, not long after. Waters sued, lost and then didn't speak to anyone other than Mason for a long time afterwards.

Pink Floyd still record occasionally, sans Waters.

Here's a video someone made for this, starring that sheep screensaver. But that's not all...

Pink Floyd worked on this tune for many years. It was originally called, "Raving and Drooling".

Here's a 1974 bootleg of "Raving and Drooling".

Part 1; and

Part 2.

By 1975, that had changed a bit closer to what appeared on Animals.

Part 1
; and

Part 2.

It's worth listening to hear how this little tune evolved. Enjoy.

08 April 2008

And now, a word from...

I've been a bit quiet of late. One of the reasons for this is that I have a bit on at work.

Another is that I'm spending quite a bit of my time getting my new computer fully set up the way that I like it, which is proving to be a bit of a learning exercise.

I've chosen to run Windows Vista. Windows XP users are probably scratching their heads and asking why am I doing this? Isn't it a piece of crap?

Oh ye of short memories. Windows XP when it originally came out had some bugs, but Microsoft eventually put these right. Albeit with the assistance of a couple of hefty service packs. And now people appear to praise it for it's stability. And what about the resource usage? I think that with my new hardware, I don't have to worry about too much just yet.

I've also chosen to go for Open Office over Microsoft Office. So far, this appears to be a decent call. Although Calc has some issues with charts, so I've kept Excel on. Hopefully this will be dealt with eventually.

I finally had my suspicions confirmed about my McAfee's Security Suite: It really does vandalise the registry of the PC to the point where I had to do a clean install of Vista again just to sort the problem out. I'll come back to this shortly.

I found that there is definitely an order to follow when installing stuff - if you do it in the wrong order, you get grief. And my problems haven't been with Vista per se, just some of the idiotic stuff that my security suite was doing to the registry of this PC. Installing Spybot S&D early on has some definite advantages here - it's quite good at picking up attempted registry edits by over-zealous software.

And back to McAfee for a moment, I've decided for the time being not to install it. I'm comfortable with Windows Firewall just at the moment, and ClamWin seems to do a decent job as an anti-viral. Do I really need the other programs in a security suite? I use Yahoo Mail for my email which is quite good - sometimes too good - at filtering spam, and McAfee's anti-spyware thingy was leagues behind AdAware and Spybot S&D in fighting spyware and malware anyway.

But the big new thing this time around, is that I am dual booting this PC with a Linux variant, this one being Ubuntu. Yes, folks. I am a recently cherry-popped Linux ex-virgin, despite the fact that I shared a house with an almost fanatical KDE developer for a long time.

This should be, could be and is a bit of fun. I am having a good fun time coming to grips with the funny little intricacies of "root" (phwoar! If you're Australian, you'll find this endlessly amusing) and having to enter commands in a terminal to run some applications, as well as other funny things that Linux does that Windows does differently.

And when I run out of stuff to do here, I thought that I'd do up my old PC, because it needs a bit of work. Currently, it can take up to half an hour to boot up with the problem being at the POST stage. It does this thing where it beeps, flashes the lights on the CD/DVD drives and the floppy drive, makes a bit of noise with them and then beeps again before doing the same thing over and over. Once the BIOS kicks in and Windows loads, everything's AOK.

I think that this means that the motherboard is cactus, and I need a new one. That or a power supply. So I guess that I'm going to have to replace them. Which means that I'm not running out of things to do. Someone correct me if you think that I'm barking up the wrong tree.

Incidentally, I don't consider myself nerdly about anything other than finance.

01 April 2008

Holy Frottage, Batman!

Here’s a highly questionable news article:

Sydney – APAA

A church in Sydney is wowing them in the aisles for what appears to be a new take on the gospel message.

Crossfire, a Pentecostal church and Sydney’s fourth largest Christian congregation has seen its regular Sunday attendances triple after the occurrence of a new style of worship. Parishioners are even talking about needing to move to a larger venue.

‘Our current church only seats 2,000. It’s awesome that our church is blessed in such a way that so many more people are able to witness the power of Jesus for themselves,’ said regular attendee, Evangeline Ng.

For the past month or so, it has been literally standing room only at Crossfire’s converted warehouse, situated in the outer south-western suburb of Ingleburn’s industrial estate. Not that this appears to present any difficulty to the church’s flock.

‘It was a miracle. About two months ago, people just stood up and started embracing each other in peace and worship,’ said Pastor Michael Hunt-Hearst, the director of the church. ‘The grace of the Holy Spirit has been with us ever since and we can personally bear witness to the love and unity that our Lord inspires.’

Indeed, love is the word. To the uninitiated, your typical Sunday service at Crossfire appears to erupt in what can only be described as a display of passion as members of the congregation throw their arms around each other and grind against the person or persons nearest to them. It was described by one witness as, ‘a frenzy of uninhibited testament to the Power of God.'

Curious onlookers have been almost turned away, due to the sheer numbers of people who have converged on Crossfire since the word of mouth started spreading. One newcomer said, ‘It’s just too unbelievable for words. The Star [local newspaper servicing the Campbelltown area] ran an article about this last week, and I had to see it for myself.’ The newcomer, who declined to give his name, went on to say that, ‘I’m not particularly religious, but I’m rethinking this as we speak. This is fantastic.’

Our non-religious onlooker proceeded to wander off into the gathered throng and rub himself up against several female parishioners in a way that more closely resembled the dance crazes of ‘freaking’ or ‘lambada’ than actual praise. The ladies in the congregation appeared more than happy to reciprocate, speaking in tongues as they did so.

Of course, the criticism from the more traditional churches in the area has started to trickle out. The minister of the nearby St Andrews’ Uniting Church, the Reverend David Fotheringay said, ‘Naturally, we all worship the Lord in different ways. I’m not sure what the Lord would make of what almost resembles outercourse, though. It’s a bit out there for some.’ St Andrews has seen its regular Sunday attendance dwindle to only a handful over the past few years.

Of the question that Crossfire’s growing popularity represents a threat to his - and others’ - congregation, Rev Fotheringay said, ‘There will always be worshippers who prefer more traditional church services.’

Father Patrick O’Riley of St Augustine’s Catholic Church in Campbelltown is more forthright about Crossfire’s more intimate worshipping style: ‘About a year ago, at the invitation of Pastor Mike, I attended one of their masses (sic). The Pastor did a sermon from Revelation about false prophets, as I recall. The Bible doesn't say anything about frottage, divinely inspired or otherwise.'

Pastor Hunt-Hearst appeared sprightly in the face of such criticism. ‘We have no problem with celebrating the Almighty Power that is God in this way. Indeed, Isaiah prophesised that people would embrace each other in worship. In One Corinthians, Paul talks about having the whole church coming together in unity, and of growing larger through the gifts of the Spirit.’

Gillian Lambert of Campbelltown Area Rape Victims Support Unit is not convinced. ‘We are a little worried that Crossfire’s services could, in time, attract the wrong kind of worshipper and believe that eventually, someone may get stalked or even attacked,’ said Ms Lambert in an email.

The Pastor believes that the ‘miracle,’ as he describes it, is here to stay.

‘We believe that the Spirit will bless other churches around the world in this way, but that there will be many witnesses who will visit Crossfire from around the world to see where it all began, just like in Toronto,’ suggested Pastor Hunt-Hearst, referring to the Toronto blessing, first seen at the Toronto Airport Christian Fellowship.

In readiness, Crossfire’s shop is already selling t-shirts with, ‘Feel the Spirit at Crossfire.’

And as for whether Pastor Hunt-Hearst foresees parishioners eventually having actual sex in the pews? The Pastor laughs for a bit nervously before responding, ‘That’s a bit silly, don’t you think?’

Not as silly as what he thinks.