Avoid interviews that can be edited. When I advised politicians there was always one no-no when it came to interviews. Avoid all programs where they edit interviews. Programs like 60 Minutes and Four Corners were always politely refused anything other than live appearances.

This morning Prime Minister Julia Gillard will understand why. Letting the journalists select a few grabs from a lengthy interview made her last night look shifty and untrustworthy.

Her advisers should know better but then, she chose them didn’t she.

Kevin Rudd was much wiser in not agreeing to sit down for the Four Corners inquisition. Perhaps the man is learning!

Reserve Bank turns to the wisdom of The Saints. Two songs that bookend side one of The Saints’ 1978 album Eternally Yours feature in today’s words of wisdom from the Australian Reserve Bank to the financial markets about the complications in pricing risk.

Addressing a Bloomberg seminar in Sydney, Guy Debelle, the Bank’s Assistant Governor (Financial Markets) told his audience that so far this year the influence of European financial markets on Australia had been been a more positive story than it was at the end of the last year with the European Central Banks’s three-year liquidity operation.the major instigator of the change.

But what of the future? Well the Assistant Governor said that whether this happier state of affairs persisted was difficult to tell. There have been outbreaks of optimism over the past couple of years which were dashed. He concluded:

I think the only thing which is certain, is that uncertainty is likely to persist for some time to come. In that regard I’d like to finish with a variation on the famous Rumfeldian take on uncertainty, recently articulated by David Murphy on his Deus Ex Macchiato blog: There are known unknowns and unknown unknowns, which complicate the pricing of risk, but over the past decade, there has also been a fair few examples of “too-lazy-to-be-knowns”.

European sovereign debt before 2007 might conceivably fall into that category. While mispricing due to Knightian uncertainty is excusable, mispricing due to laziness is not. As I said last November, you’ve got to Know Your Product, otherwise, it can quickly turn into a case of No, Your Product.

The Assistant Governor’s footnote:

Aficionados of the Saints will be aware that these two songs bookend side one of Eternally Yours. This can be translated into financial terms as:If you owe the bank $100, that’s your problem. If you owe the bank $100 million, that’s the bank’s problem.

Perhaps these extracts from the lyrics will help you better understand the point:

Know Your Product

your never gonna get me what I want
all that smooth talking brain washing
ain’t gonna get me what I need

No, Your Product

You know the damage gets done so fast
it’s all the truths that just don’t last

An unwelcome promotion for Sydney. The latest Worldwide Cost of Living Survey by the Economist Intelligence Unit shows that Sydney has risen from 71st to 7th since 2001 on an index measuring the cost of an expatriate lifestyle in over 130 cities using a weighted average of the prices of 160 products and services. On a measure where New York is rated at 100, Sydney has reached over 140..

Supporting Babur’s birthday. Having received no Valentine’s Day messages of any kind I am supporting the decision of the government of Uzbekistan to cancel all such nonsense and celebrate instead the birthday of  the Moghul emperor Babur, whose birthday falls on 14 February. The BBC reports that Babur, a descendant of Genghis Khan and founder of a culturally rich and tolerant empire across South and Central Asia, will be commemorated in readings and poetic festivals.

He was clearly a great man deserving of remembrance.

As Wikipedia notes:

Though religion had a central place in his life, Babur also approvingly quoted a line of poetry by one of his contemporaries: “I am drunk, officer. Punish me when I am sober”. He quit drinking alcohol before the Battle of Khanwa, only two years before his death for health reasons, and demanded that his court do the same. But he did not stop chewing narcotic preparations, and did not lose his sense of irony.

He wrote:

Everyone regrets drinking and swears an oath (of abstinence); I swore the oath and regret that.