From today’s Telegraph…

Switzerland’s top banker has warned of massive losses from the unfolding credit crisis, describing the collapse in US lending standards as “unbelievable”.

Jean-Pierre Roth, president of the Swiss National Bank, said market turmoil was far from over as tremors from the sub-prime debacle continued to rock the world.

“We’re certainly not at the end of the story. There are question marks surrounding the development of the American economy,” he said. “Something unbelievable happened. People who had neither income nor capital got credit with very attractive conditions. Now reality is striking back,” he said.

In Germany, the state bank SachsenLB admitted that it had received a €17.3bn bail-out after its investment arm Ormond Quai racked up huge losses on US sub-prime debt. It had previously denied holding direct exposure to sub-prime…

The Economist deployed a nice simile to explain what’s been going on:

THE old-fashioned financial system was like Old Maid, a parlour game once beloved of small children. The banks were like players, dealt hands from a pack of cards, which they swapped among each other. At the end, one player was left holding a lonely queen—a bad debt, if you will—and lost. Over the past few decades the game has changed. Securitisation has snipped the old maid into pieces; new faces, such as hedge funds, have joined the party, enabling the banks to distribute those pieces among a larger number of players. When the game is over, lots of players are left holding small losses instead of one player holding a big one.

During two exceedingly prosperous decades, that theory seemed to work just fine. But the swings in almost all financial markets this month have made dispersed risk suddenly morph into dispersed mistrust. The uncertainty has been magnified by the way that bad risks have become so hard to value. Investors have bought asset-backed securities that use shaky subprime mortgages in America as collateral, but as defaults have risen, the value of that collateral has tumbled. Meanwhile, collateralised-debt obligations (CDOs), made up of clumps of those securities and laced with leverage, have become almost impossible to trade. So none of the players really knows how much he has lost. While this uncertainty lasts, investors are taking it out on the banks that peddled the securities by dumping their shares; and the banks are taking it out on those they sold them to by demanding more collateral on their loans. The banks have even grown cagey about lending to each other.

And the conclusion?

At the end of Old Maid as banks used to play it, the loser would take a big write-off and then everyone could start playing again. In the new version, the use of leverage means the game is being played with hundreds of packs of cards and by thousands of different players. “Securitisation,” says Avinash Persaud of Intelligence Capital, a financial adviser, “has meant that credit risks have moved from knowledgeable, long-term hands, to fast hands, where the principal risk-management strategy is to sell before prices fall more”. Working out who has won and who has lost in this round will take a long time.

So while every day the markets don’t fall is a relief, there’s a dark cloud hanging over the entire system, and nobody knows yet how big it is.

From an ad in today’s New York Times.

I’ve been taking photographs for over 50 years, and have never yet pushed a shutter. Who writes this stuff?

… in 1968, the Soviet Union and other Warsaw Pact nations invaded Czechoslovakia to crush the ”Prague Spring” liberalization drive of Alexander Dubcek’s regime.

Bill Deedes, the wonderful old bird who was the model for William Boot, the hapless war correspondent in Evelyn Waugh’s Scoop, has passed away at the grand age of 94. There’s a nice obit in — not surprisingly — the Telegraph. Excerpt:

As editor of the Telegraph he would wear a cardigan with garish luminous socks, smoke from a cigarette holder and address the most insignificant sub-editor as “My lord” or “Shquire”.

His mangled metaphors were legendary: “You can’t make an omelette without frying eggs”; “one swallow doesn’t make an impression”; “we should nail our matchbox to the mast”; “the Tories should pull their trousers up”.

Once or twice a day he would be found enjoying a pint at the King and Keys, next door to the paper’s premises in Fleet Street. It would have been difficult to imagine anyone less afflicted by the strains, frustrations and insecurities which so often haunt the seats of power.

Evidently life had treated Bill Deedes very well, and he was perfectly willing to acknowledge the fact.

Indeed, with his shushing articulation and somewhat distrait manner, Bill Deedes might appear as hardly more than an amiable buffer – a distant cousin, perhaps, of Bertie Wooster, certainly an eminently suitable golf partner for Sir Denis Thatcher, Bt.

This image was reinforced by his caricature in Private Eye as Dear Bill, the recipient of Denis Thatcher’s fictitious epistolary confidences. Deedes played up to this gentle mockery.

When he wrote to Private Eye to correct them on some point, he relished the opportunity to use the formula which the magazine imputed to his editorial corrections: “shome mishtake shurely.”

Even amidst the troubles that enveloped his editorship he appeared to some to be benignly disengaged. “The snapshot I carry of Bill in my head,” noted the paper’s cartoonist Nicholas Garland, “is of him tilted back in his chair with one foot on his desk; smoke is curling from his cigarette; his tie is loosened, and he is grinning.”

But this supposed exponent of the easy option had won the Military Cross during the war. This seeming flaneur found his content in unremitting work.

This apparent bumbler was one of the best journalists of his time, always eager for travel and adventure, fertile in shrewd perceptions, and blessed with the ability to convey them with a clarity and simplicity none but the best writers attain…

“”According to most studies”, says Jerry Seinfeld, “people’s number one fear is public speaking. Number two is death. Death is number two. This means to the average person, if you go to a funeral, you’re better off in the casket than doing the eulogy.”

Bearing this in mind, perhaps a guide to making great presentations would be useful?

All part of the service.