Germanation

The year just goes on getting more and more exciting. Not only did the private banker's favourite secret - the res non-dom - become part of the Daily Mail's lexicon last week, but now we have a new country in Europe, all the budding flowers in my ecological island have been wiped out by frost, and a British bank is to be run by Alistair Darling. How they have ended up nationalising the Rock after all these months of twittering... But there are plenty of others to commentate on that story this evening. I'm rather more fascinated by what is going on in Germany.

In case you haven't heard, the CEO of Deutsche Post, the exceedingly rich and delightfully named Mr Klaus Zumwinkel, has just resigned after allegations/confessions of tax evasion on a monumental scale. Somehow he has been channelling millions of euros through undeclared trusts in Lichtenstein. Was it all Mr Zumwinkel's own nefarious work, or should we detect the hand of an artful private banker getting creative on his behalf?

If so, said banker has been busy. Apparently, German prosecutors are building cases against 750 other people who have been up to the same Licht-trickery. I'll say that again: seven hundred and fifty people about to get done for the crime of retaining a private banker just a little too good at his job. Wasn't me, I can assure you, and I'm fairly sure no one in this office has been involved. But we will, no doubt, see.

One almost feels sorry for the Germans, what with the "lust trips" at VW (remember the 30,000 euro prostitute bills?) and the bribery and tax evasion scandals elsewhere. It does rather seem that the malaise cuts right to the heart of the establishment (Zumwinkel is a McKinsey man, after all). I have only a handful of German clients - they tend to stick to their own, and send all their money to Switzerland (or is it Lichtenstein?) - but I dare say we shall all be sharing in the economic fallout from this one.

Last Resort

I don't know about you, but I can't help feeling slightly disappointed to see the ECB and Bank of England step in to rescue us all from our own stupidity. Same with the new guarantees for Northern Rock.

Obviously, it's good news for the markets, for clients, for those vanishing bonuses - I wouldn't have it any other way.

But one feels rather as a boy might on a school orienteering trip if, on getting lost, he was quickly recovered by a teacher who had been covertly trailing him against just such an eventuality. Yes, it is lovely to be warm and drinking cocoa again, but it does make one feel very small. Having problems? Here's 170 billion euros to sort it out.

Not very good for our collective backbone, that kind of fairy godmother intercession, is it?

Now lets all cross our fingers and ask Father Christmas to make those billions of cheap pounds and euros count.

Volatile Times

It hasn't been a very pleasant couple of weeks in the City. Too much uncertainty, too much worry about credit and interest rates and where the next slap of volatility is going to come from. What this means for the private banker is endless telephone conversations with nervous clients who want to know if now is the time to be buying gold (no!), or getting out of dollar-denominated funds entirely (possibly), and by the way what is going on with Northern Rock?

We factor in a certain amount of stroking time to this job, but the past fortnight has allowed me little chance to do anything else. It's hard enough keeping up oneself with what is going on in China, or the US credit market, without having to relate it to others the next minute in a smoothly-glossed patina of reassuring professional expertise.

The trouble is, of course, none of us really know what's going on. Perhaps a couple of geniuses out there know whether the FT-SE 100 is settling into a gentle downward slide that will continue for the rest of the year, or can predict which will be the next bank to announce a £1.3 billion write-off. But most of us are just blindly stumbling from day to day trying to do the best we can with the deeply questionable information we receive.

Brighter clients have always known this; they accept it and stick with us for want of any better alternative. The danger in times like these is that the less bright clients will start to wise up to our fumbling, and in panic withdraw their portfolios and bury their heads in nice safe gold.

There's an interesting thing you learn about private banking after you've been doing it for a while. Really, it doesn't matter all that much how good your investment performance is, so long as you can persuade your client that it is better than the general market. This can be done even in contradiction of the hardest of facts. It is the skill that defines the good "farmer". It combines good expectation management with a certain amount of technically-impressive bullshit.

I suspect I shall be getting a lot of practice over the coming weeks.