Some Myths Work

 

UP and Sindh, joined by history, divided by secular democracy

 

Tahir Mehdi (The writer works for Punjab Lok Suhag, a research and advocacy group in Pakistan, with an interest in understanding governance and democracy. He also writes a regular blog in Dawn.com)

The two regions of the subcontinent, Uttar Pradesh in India and Sindh in Pakistan, have both a unique bond and a disconnect. First, the bond: a huge number of Muslims from Uttar Pradesh migrated in 1947 to Sindh. People with Urdu as their mother tongue comprise 21 per cent of Sindh—every fifth inhabitant of Sindh belongs to second or third generation migrants from India, in particular from UP. References to forefathers’ villages, towns or jagirs still moisten many eyes and inspire nostalgia. They all had migrated willingly or unwillingly in pursuit of a peaceful society and prosperity. Their children’s textbooks kept on reminding them over next decades that the cherished dream could never be realised with Hindus roaming around and dominating everything.

The same Uttar Pradesh recently elected members for its 403-seat state assembly. Muslims still live in that province that has a population higher than Pakistan. UP’s population, according to the 2011 census, is 199.6 million. Of these, 19.8 per cent are Muslims. Or, every fifth inhabitant of present-day UP is a Muslim. Muslim candidates were serious contenders for around half of the general assembly seats. In fact, 68 of them went on to become MLAs; 64 Muslims stood second in the constituencies they contested in.

Almost every party fielded Muslim candidates. The Samajwadi Party’s Adil Sheikh defeated assembly speaker Sukhdev Rajbhar, former minister Nand Gopal Gupta was drubbed by SP’s first-timer Haji Parvez Ahmed and four-time BJP winner Inder Dev Singh lost to Mohammad Ghazi. No one cried foul, no allegations of rigging were hurled, no conspiracy theories of undermining Hindutva made the rounds and, above all, no one smelt the infamous ‘foreign hand’ behind the defeat of caste Hindus at the hands of ‘pariah’ Muslims.

The Samajwadi Party raised its tally from 97 (in 2007) to more than a simple majority of 224; the ruling Bahujan Samaj Party crashed from 206 seats to a humble 80. The massive reversal was caused by a four per cent swing in votes, and critics attribute SP’s ascendancy to winning the Muslim vote. Remember that UP is where the capital of Urdu culture, Lucknow, is located; so also the epicentre of Hindutva politics, Ayodhya, and the hometown of secular Indian nationalism (read Congress), Rae Bareli. It’s here that minority Muslim voters have so decisively swung political fortunes. But we were always told that in a democracy where Hindus outnumbered us, we would be forced to live miserable lives on the margins. I was flabbergasted. Does it not turn our history into a farce?

I am not saying that everything is exceptionally bright across the border. People in India too face mammoth challenges—but wait, I think I should not be apologetic about what I want to say and subdue my argument before actually forwarding it, to avoid being labelled unpatriotic. I better say it loud and clear.

Thousands of Hindus migrated from Sindh to India after Partition and are spread all over India. Today, many are prosperous. But, willingly or unwillingly, a few hundred thousand did not migrate. Non-Muslims in Sindh are around 9 per cent of the population, or half the percentage of Muslims in UP. Have you ever heard of a non-Muslim contesting elections and winning too?

They couldn’t even think of such a feat till 2002, when non-Muslims were corralled into reserved seats under the separate electorate system, while Muslim candidates vied for their co-religionists’ votes alone. Two elections ago, we moved to the joint electorate system; since then, only one Hindu candidate for a national assembly seat has polled votes in thousands—Mahesh Kumar, a Pakistan People’s Party nominee. He lost to Arbab Zakaullah of the Pakistan Muslim League by a margin of over a hundred thousand. Rajveer Singh, a Pakistan Muslim League-Functional candidate for the provincial seat of Umerkot, too stood a distant second to the PPP’s Ali Mardan Shah. Dr Daya Ram of the PPP is the only Hindu elected on a provincial seat to date.

That is the disconnect between Sindh and UP. One’s faith in democracy is unwavering, while we have heaped scorn over it for its inability to deliver, and instead have been beating dead horses hoping it would take us to a cherished future. We were told that democracy doesn’t work for us Muslims. It is alien to our culture, and comes to fruition when pollinated by secularism alone, which is heretic. Let me confess today: if being secular means having faith in democracy, I profess it, as I have seen it work miracles.

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The maths formula linked to the financial crash

Black-Scholes: The maths formula linked to the financial crash

By Tim Harford BBC Radio 4, More or Less
 

It's not every day that someone writes down an equation that ends up changing the world. But it does happen sometimes, and the world doesn't always change for the better. It has been argued that one formula known as Black-Scholes, along with its descendants, helped to blow up the financial world.

Black-Scholes was first written down in the early 1970s but its story starts earlier than that, in the Dojima Rice Exchange in 17th Century Japan where futures contracts were written for rice traders. A simple futures contract says that I will agree to buy rice from you in one year's time, at a price that we agree right now.

By the 20th Century the Chicago Board of Trade was providing a marketplace for traders to deal not only in futures but in options contracts. An example of an option is a contract where we agree that I can buy rice from you at any time over the next year, at a price that we agree right now - but I don't have to if I don't want to.

You can imagine why this kind of contract might be useful. If I am running a big chain of hamburger restaurants, but I don't know how much beef I'll need to buy next year, and I am nervous that the price of beef might rise, well - all I need is to buy some options on beef.

But then that leads to a very ticklish problem. How much should I be paying for those beef options? What are they worth? And that's where this world-changing equation, the Black-Scholes formula, can help.

"The problem it's trying to solve is to define the value of the right, but not the obligation, to buy a particular asset at a specified price, within or at the end of a specified time period," says Professor Myron Scholes, professor of finance at the Stanford University Graduate School of Business and - of course - co-inventor of the Black-Scholes formula.

The young Scholes was fascinated by finance. As a teenager, he persuaded his mother to set up an account so that he could trade on the stock market. One of the amazing things about Scholes is that throughout his time as an undergraduate and then a doctoral student, he was half-blind. And so, he says, he got very good at listening and at thinking.

When he was 26, an operation largely restored his sight. The next year, he became an assistant professor at MIT, and it was there that he stumbled upon the option-pricing puzzle.

One part of the puzzle was this question of risk: the value of an option to buy beef at a price of - say - $2 (£1.23) a kilogram presumably depends on what the price of beef is, and how the price of beef is moving around.

But the connection between the price of beef and the value of the beef option doesn't vary in a straightforward way - it depends how likely the option is to actually be used. That in turn depends on the option price and the beef price. All the variables seem to be tangled up in an impenetrable way.
Scholes worked on the problem with his colleague, Fischer Black, and figured out that if I own just the right portfolio of beef, plus options to buy and sell beef, I have a delicious and totally risk-free portfolio. Since I already know the price of beef and the price of risk-free assets, by looking at the difference between them I can work out the price of these beef options. That's the basic idea. The details are hugely complicated.

"It might have taken us a year, a year and a half to be able to solve and get the simple Black-Scholes formula," says Scholes. "But we had the actual underlying dynamics way before."

The Black-Scholes method turned out to be a way not only to calculate value of options but all kinds of other financial assets. "We were like kids in a candy story in the sense that we described options everywhere, options were embedded in everything that we did in life," says Scholes.

But Black and Scholes weren't the only kids in the candy store, says Ian Stewart, whose book argues that Black-Scholes was a dangerous invention.

"What the equation did was give everyone the confidence to trade options and very quickly, much more complicated financial options known as derivatives," he says.

Scholes thought his equation would be useful. He didn't expect it to transform the face of finance. But it quickly became obvious that it would.

"About the time we had published this article, that's 1973, simultaneously or approximately a month thereafter, the Chicago Board Options Exchange started to trade call options on 16 stocks," he recalls.
Scholes had just moved to the University of Chicago. He and his colleagues had already been teaching the Black-Scholes formula and methodology to students for several years.

"There were many young traders who either had taken courses at MIT or Chicago in using the option pricing technology. On the other hand, there was a group of traders who had only intuition and previous experience. And in a very short period of time, the intuitive players were essentially eliminated by the more systematic players who had this pricing technology."

That was just the beginning.

"By 2007 the trade in derivatives worldwide was one quadrillion (thousand million million) US dollars - this is 10 times the total production of goods on the planet over its entire history," says Stewart. "OK, we're talking about the totals in a two-way trade, people are buying and people are selling and you're adding it all up as if it doesn't cancel out, but it was a huge trade."

The Black-Scholes formula had passed the market test. But as banks and hedge funds relied more and more on their equations, they became more and more vulnerable to mistakes or over-simplifications in the mathematics.

"The equation is based on the idea that big movements are actually very, very rare. The problem is that real markets have these big changes much more often that this model predicts," says Stewart. "And the other problem is that everyone's following the same mathematical principles, so they're all going to get the same answer."

Now these were known problems. What was not clear was whether the problems were small enough to ignore, or well enough understood to fix. And then in the late 1990s, two remarkable things happened.

"The inventors got the Nobel Prize for Economics," says Stewart. "I would argue they thoroughly deserved to get it."

Fischer Black died young, in 1995. When in 1997 Scholes won the Nobel memorial prize, he shared it not with Black but with Robert Merton, another option-pricing expert.

Scholes' work had inspired a generation of mathematical wizards on Wall Street, and by this stage both he and Merton were players in the world of finance, as partners of a hedge fund called Long-Term Capital Management.

"The whole idea of this company was that it was going to base its trading on mathematical principles such as the Black-Scholes equation. And it actually was amazingly successful to begin with," says Stewart. "It was outperforming the traditional companies quite noticeably and everything looked great."

But it didn't end well. Long-Term Capital Management ran into, among other things, the Russian financial crisis. The firm lost $4bn (£2.5bn) in the course of six weeks. It was bailed out by a consortium of banks which had been assembled by the Federal Reserve. And - at the time - it was a very big story indeed. This was all happening in August and September of 1998, less than a year after Scholes had been awarded his Nobel prize.

Stewart says the lessons from Long-Term Capital Management were obvious. "It showed the danger of this kind of algorithmically-based trading if you don't keep an eye on some of the indicators that the more conventional people would use," he says. "They [Long-Term Capital Management] were committed, pretty much, to just ploughing ahead with the system they had. And it went wrong."

Scholes says that's not what happened at all. "It had nothing to do with equations and nothing to do with models," he says. "I was not running the firm, let me be very clear about that. There was not an ability to withstand the shock that occurred in the market in the summer and fall of late 1998. So it was just a matter of risk-taking. It wasn't a matter of modelling."

This is something people were still arguing about a decade later. Was the collapse of Long-Term Capital Management an indictment of mathematical approaches to finance or, as Scholes says, was it simply a case of traders taking too much risk against the better judgement of the mathematical experts?

Ten years after the Long-Term Capital Management bail-out, Lehman Brothers collapsed. And the debate over Black-Scholes and LTCM is now a broader debate over the role of mathematical equations in finance.

Ian Stewart claims that the Black-Scholes equation changed the world. Does he really believe that mathematics caused the financial crisis?

"It was abuse of their equation that caused trouble, and I don't think you can blame the inventors of an equation if somebody else comes along and uses it badly," he says.

"And it wasn't just that equation. It was a whole generation of other mathematical models and all sorts of other techniques that followed on its heels. But it was one of the major discoveries that opened the door to all this."

Black-Scholes changed the culture of Wall Street, from a place where people traded based on common sense, experience and intuition, to a place where the computer said yes or no.

But is it really fair to blame Black-Scholes for what followed it? "The Black-Scholes technology has very specific rules and requirements," says Scholes. "That technology attracted or caused investment banks to hire people who had quantitative or mathematical skills. I accept that. They then developed products or technologies of their own."

Not all of those subsequent technologies, says Scholes, were good enough. "[Some] had assumptions that were wrong, or they used data incorrectly to calibrate their models, or people who used [the] models didn't know how to use them."

Scholes argues there is no going back. "The fundamental issue is that quantitative technologies in finance will survive, and will grow, and will continue to evolve over time," he says.

But for Ian Stewart, the story of Black-Scholes - and of Long-Term Capital Management - is a kind of morality tale. "It's very tempting to see the financial crisis and various things which led up to it as sort of the classic Greek tragedy of hubris begets nemesis," he says.

"You try to fly, you fly too close to the sun, the wax holding your wings on melts and you fall down to the ground. My personal view is that it's not just tempting to do that but there is actually a certain amount of truth in that way of thinking. I think the bankers' hubris did indeed beget nemesis. But the big problem is that it wasn't the bankers on whom the nemesis descended - it was the rest of us."

Additional reporting by Richard Knight

Saving Pakistan... And India?

Omar Ali

Pakistan is in the throes of an existential crisis. Pakistan has always been in the throes of an existential crisis. Pakistan’s interminable existential crisis is, in fact, getting to be a bore.  But while faraway peoples can indeed get away from this topic and on to something more interesting, Pakistanis have little choice in this matter; and it may be that neither do Indians.
The partition of British India was different things to different people, but we can all agree on some things: it was a confused mess, it was accompanied by remarkable violence and viciousness,  and it has led to endless trouble. The Paknationalist narrative built on that foundation has Jihadized the Pakistani state, and defanging that myth is now the most critical historic task of the Pakistani bourgeoisie.

Well, OK. We don’t actually all admit any of those things, but all those are things I have written in the past. Today I hope to shed my inhibitions and go further.

First, the crisis. Some friends think I am being unnecessarily alarmist and the only crisis is the presence of American infidels/imperialists in the region. Let America leave and all will be well. Others believe that if the army had a “free hand”, they would have things under control within days.  Let us dispense with both theories. The crisis is not primarily American generated (though they have a long and glorious history of feeding dollars to the crisis) and no one is in complete control.  The existing corruption-ridden state is a British colonial creation struggling to get by alongside an unstable mix of Islamist ideology and a very shallow and self-contradictory foundational myth. Even though the karma of the Raj is potent stuff, it will not last forever against these forces. When it goes, the next step will not be the dawn of Chomskyan enlightened anarchy or democratic socialism; it will either be Salafist Islam or the dissolution of the state. Dissolution being physically and diplomatically difficult (who will handle the scramble over borders that would follow?), Salafist Islam administered by the army (perhaps with a charismatic cricketer as its public face) is the likely option.

Unfortunately, it is not likely to work very well. In fact, it is incapable of sustaining even the bare minimum of modern statehood. Unlike Iranian Islam (which is literate, modern and sophisticated compared to Salafist fantasies) there is no there there.  A militarized salafist Pakistan may hold together a few years in the name of war against the infidels, but after the war (and who wants a war that could go nuclear?) we are left with little more than the vague notion of a rightly guided caliph, the whipping of uppity women and the accelerated cleansing of undesirable smaller sects. After all, if you have a religious state, then you cannot have ten different interpretations of religion (not to speak of ten different religions). Which vision is in charge has to be clear. The state must enforce religious uniformity or become secular. There is no third option.  One can see this principle in operation in Pakistan ever since General Zia started Islamizing in earnest.  Ahmedis were already beyond the pale, but Shias, a sect that provided the founder of Pakistan and were an integral part of Pakistan, now face the prospect of second class citizenship or worse. If you happen to believe in the Salafist project you may find this a desirable endpoint, but everyone else will want to stop this process and reverse it if possible.

To stop short of that particular landing, we have to repair what we have. What we have is very confused and the current “approved” mythology of Partition and an Islamic state serves to increase confusion and undermines what exists. That approved mythology therefore has to be set aside or defanged. This does not mean there are no other problems. There are tons of other problems, and many of them are bigger than salafist Islam in a worldwide context. But those problems are common to the whole region. They are common to the third world. They are even common to the rich countries. They are problems of power arrangements, of unbridled capitalism, of environmental degradation, of  individual alienation and so on. They are, in short, problems of where humankind is in the 21^st century. There are many different approaches to these problems and many different solutions, precisely because we have not yet solved them. But there are other problems that were identified and solved centuries ago. For example, we moved on from the divine right of kings, the segregation of women, even the revolutionary vanguard and national socialism. The notion that we can have a religious state but somehow bypass the known problems of the religious state is not  tenable. But a salafist coup will be just that. The world has moved on, we will have to move on too.

While this explains why Pakistanis need to worry, what about Indians? With enough problems of their own, why should they care two hoots about all this? I think they will have to care because there are clear limits to how far Indians can downgrade the importance of whatever craziness is going down in Pakistan.  IF we go down, we will take a lot of people down with us. India is not protected from the fallout by two oceans or even the high Himalayas. If Pakistan crashes down to Taliban level, India will have to scramble to avoid the fallout and given the realities of geography and the capabilities of the Indian state, that is not a job they can do very well.

There is also a second reason why Indians should worry a little about what happens in Pakistan. India itself is a work in progress. Its integration of British India, modern democratic forms and the ancient but scientifically underdeveloped and culturally heterogeneous civilization of India is not a done deal.  It is easy for commentators to “discover” that India on the ground is not as different from Pakistan as Indians may wish it to be.  I am aware that there are differences and they are real; the stated ideal is superior, the historic basis is sounder, the religious landscape is too heterogeneous to even imagine monocultural purity, the dominant religion is Hinduism and so on; but the existing reality of everyday life is still very far from the ideal. While neither economic development nor democratic rule nor national integration are in imminent danger,  none of these are out of the woods. If Pakistan heads for salafist Islam, India will face not only terrorist attacks or overt hostility, it will find its own problems and weak spots revealed and exploited at a time when it needs to pretend it has moved beyond them in order to actually move beyond them.   

The rational choice therefore is for India to help prevent such an outcome. And luckily, there is much that India can do in that direction.  Trade with India has the potential to transform the economy of Punjab and beyond. Transit to Afghanistan and central Asia will double that dividend. And travel and cultural exchange with India undermine the entire paknationalist narrative (which is why Hafiz Saeed and other Jihadist leaders have been launched to try and stop any such initiatives). While it would be a mistake to get carried away with the possibilities it would also be a mistake to miss opportunities just because the Indian-nationalist narrative emphasizes the differences.

This sort of argument is very infuriating to some Indians (it also makes Paknationalists go ballistic, but I lost that constituency at paragraph two).  To be asked to help not because we are fellow human beings or long lost brothers (we already have that group of Indians lighting candles at Wagah border every year and I love them for it) but because if we really truly catch fire we could set the whole neighbourhood aflame? It sounds almost like blackmail. “Internet Hindus” will obviously want no part of this, but even mainstream analysts can be sceptical; but dear think-tankers, think about it. Trade, travel and cultural exchange with India are the least expensive and most “high-return” means of saving Pakistan from a salafist catastrophe. Realpolitik, not sentimental humanism (I personally approve of sentimental humanism, but that is a separate matter) suggests that India actively take steps to prevent Pakistan from going down to the next level. Realpolitik also suggests that it is still possible. Pakistan is not the basket case it is sometimes projected to be; it is a fertile land with hardworking, enterprising people; a large economy with real possibilities of trade and investment; its ancient Indic cultures and shared Indic languages are still alive and provide a basis for deep interaction. India can open channels to help an alternative national myth to take root and survive in Pakistan even as it takes precautions to wall off harmful trends. Without some deft assistance (and precautionary walling off, the two contradictory trends will have to go together; it is crucial to know which approach is needed where) the “good” side is more likely to go down.

The other big player is, of course, Uncle Sam. But that will have to be the topic of another article. Paknationalists had also set their hopes on Uncle Chin, but that may be wishful thinking.

Rupert Murdoch at the Leveson Inquiry

Rupert Murdoch gives away more than planned at Leveson inquiry

The denials never shifted but, under careful questioning from Robert Jay QC, the tycoon made some serious concessions

• 
• • Nick Davies
  • guardian.co.uk, Wednesday 25 April 2012 19.36 BST

Rupert Murdoch often departed from the script in his evidence at the Leveson inquiry. Photograph: Reuters

 

At one point in his evidence, when he was trying to explain how he dealt with politicians, Rupert Murdoch volunteered: "I'm not good at holding my tongue." It must drive his advisers crazy.
The plan clearly was for Castle Murdoch to be defended with well-constructed walls of obdurate denial, reinforced by occasional bouts of forgetfulness. Certainly, the denials never shifted – and these were big, tough denials: "I've never asked a prime minister for anything in my life … We have never pushed our commercial interests in our papers … I don't know many politicians."

However, in the event, Robert Jay QC kept piercing small gaps in Murdoch's defences. This was partly because Jay had gathered up a prodigious supply of facts, which he fired like slingshot at the castle walls – and partly because the old mogul likes to talk. Jay didn't break in and ransack the place, but he did some damage.

Sometimes the wounds were nothing more than dents in Murdoch's standing, as he acknowledged that it might well be true that he had once listened to Ken Livingstone on television denouncing the "lies and smears of the media" and that he had then declared drunkenly to a roomful of people, "That's me!" Or that he might well have qualified his early approval for Tony Blair by adding that they were not yet ready to take their pants down together.

But sometimes, in the detail behind the denial, he conceded substantial ground. His underlying problem was that he was not listening to Jay and failed to see the subtlety of the allegation that faced him.

Murdoch kept denying that he made deals with politicians, ie, that he simply offered them the support of his paper in return for favours to his business. But Jay suggested: "It operates at a far more sophisticated level, doesn't it?" and went on to quote the reported words of the former Australian prime minister Paul Keating: "You can do a deal with him without ever saying a deal is done."
In the case of Murdoch's relationship with Blair, Jay quoted Murdoch's former editor, Andrew Neil, that there had been "an implicit understanding – never openly talked about between the two men – but an understanding nevertheless".

Murdoch duly put up his well-rehearsed denial – "I never asked Mr Blair for anything, nor did I receive any favour" – and then proceeded to volunteer that he had been in the habit of seeing Blair two or three times a year, as though that were an annual average for most voters to see a national leader.

He described how he had once spent an afternoon at Chequers, telling Blair how much he opposed Britain joining the euro, as though the prime minister had nothing better to do.

To this extraordinary degree of access, he boldly added that he does indeed direct the editorial line of the Sun on major issues, including questions about Europe. And, once again failing to hold his tongue, he went right ahead and admitted what this would mean to a man like Blair: "If any politician wanted my views on major issues, they only had to read the Sun." The Sun relentlessly reinforced the anti-EU message.

Murdoch continued to deny that Blair had ever done anything for him, but then conceded that Blair had "gone the extra mile for him" over European policy, to the point where he had acceded to the Sun's demand that the government should agree to hold a referendum before accepting the new EU constitution.

And Blair had done something very similar by ensuring Britain maintained tough anti-union laws and then underlined the point with an article in the Sun, following which the two men had enjoyed dinner together. Murdoch agreed it was possible he had congratulated Blair on his position.

Similarly, Jay quoted Murdoch's former confidant, Woodrow Wyatt, who was close to Margaret Thatcher and who recorded in his diary that he had once told Murdoch: "Margaret is very keen on preserving your position. She knows how much she depends on your support. Likewise, you depend on her." Murdoch produced his standard denial – "I didn't expect any help from her, nor did I ask for any" – and then found himself accepting that, while the Sun supported her, she had delivered a series of decisions which looked really very helpful indeed, including allowing him to buy the Times and the Sunday Times without referring his bid to the Monopolies and Mergers Commission. She also exempted BSkyB from the regulations in the 1990 Broadcasting Act.

With Gordon Brown and David Cameron, he kept closer to the script but, even so, he caused unnecessary trouble.

He denied discussing the BBC licence fee with Cameron. Enough said. Talking to a prime minister about the licence fee might suggest he had some commercial motive. But then his tongue added: "I wasn't interested in the BBC licence fee. I had been through that with previous prime ministers, and it didn't matter. They all hated the BBC, and they all gave it whatever it wanted."

He set the record straight on Kelvin MacKenzie's claim that Brown had reacted to the Sun's endorsement of the Tories in September 2009 by phoning him and roaring down the phone for 20 minutes. That was "a very colourful exaggeration", he said. Enough? No. He went on to quote a version of the call which was highly likely to provoke a response from Brown, who duly issued a statement saying that Murdoch was wholly wrong and should have the good grace to correct his account.

As he left the inquiry for a break, his tongue was still rolling. Dan Sabbagh, the Guardian's head of media, heard him grumble to his advisers about Lord Justice Leveson: "Let's get him to get this fucking thing over with today." If only they could. Murdoch resumes his evidence on Thursday morning.

Predicting how a player is going to perform has always been a tricky business

Who'd have thunk it?

Ed Smith

April 25, 2012

Did you pick them first time? Did you recognise how good they were at first glance? Or did you conveniently revise your opinion much later, when the results started to come in? 

I've been asking myself that question as I've followed the career of Vernon Philander. He now has 51 wickets in just seven Tests. Only the Australian seamer CBT Turner, who reached the milestone in 1888, has reached 50 wickets faster than South Africa's new bowling sensation. I don't mean any disrespect to the legends of the past, but I think it's safe to say that Test cricket has moved on a bit since the days of Turner. So Philander has had statistically the best start to any Test bowling career in modern history.

Who saw that coming? I can claim only half-prescience, and I sadly lacked the courage to go on the record. I first encountered Philander when I was captain of Middlesex in 2008 and he joined the club as our overseas pro. I didn't know much about him beyond what I'd been told - "Allrounder, hard-hitting batter, maybe a bit more of a bowler." Armed with no more information than that, I found myself batting in the nets against our new signing just a couple of minutes after I'd met him.

After the usual pleasantries, it was down to the serious business of Philander bowling at me on a green net surface with a new ball in his hand. So what did I think? Honestly? I thought: "Hmm, I thought they said he was a 'useful allrounder'? Looks more like a genuine opening bowler to me. But I'd better keep it to myself - maybe I've just lost it a bit?"

Philander was just as impressive in matches as he was in the nets. He quickly went from bowling first-change to opening the bowling, then to being our strike bowler. Was he just having a great run of form or was he always this good? Looking back on it, I wish I'd said to everyone - "Forget the fact he can also bat, this bloke is a serious bowler."

When we form judgments of players, we tend to be conditioned by the labels that are already attached to them - "bowling allrounder", "wicketkeeper-batsman", "promising youngster". Once a player has been put in the wrong box, our opinions tend to be conditioned by what everyone else has said. We are clouded by the conventional wisdom that surrounds us.

Look at Andrew Flintoff. It took years for everyone to realise that he was one of the best fast bowlers in the world in the mid-2000s. That was partly because we were distracted by his swashbuckling batting. We were so busy judging him as an allrounder that we failed to notice that he was holding his own against the best in the world, purely as a bowler.

When I played against Matt Prior in his early days at Sussex I thought he was among their best batsmen. The fact that he also kept wicket led him to be underrated as a pure batsman. He could completely change a game in one session and was the often the player I was most happy to see dismissed.

The dressing room is often too slow to acknowledge that a young player is already a serious performer. It cuts against the overstated notion of "He's still got a lot to learn." I have a strange sense of satisfaction at having helped propel the then little-known fast bowler Graham Onions into the England team. Other players weren't convinced he was the genuine article. But he knocked me over so often in 2006 that I had no choice but to become his greatest advocate. I haven't changed my mind: when he is fit, he is one of the best bowlers around.

I played against Tim Bresnan in one of his first matches for Yorkshire. He thudded a short ball into my chest in his first over. "Can't believe that hurt," one of my team-mates scoffed, "it was only bowled by that debutant bloke." True enough. But every top player has to start out as a debutant.

	The dressing room is often too slow to acknowledge that a young player is already a serious performer. It cuts against the overstated notion of "He's still got a lot to learn"

The gravest errors of judgement, of course, make for the really good stories. When Aravinda de Silva played for Kent in 1995, he brought along a young Sri Lankan to have a bowl in the nets at Canterbury. What did the Kent players think of the young lad, Aravinda wondered? The general view was that he was promising but not worth a contract.

It was Muttiah Muralitharan.

Sometimes, of course, everyone fails to predict the trajectory of a career. Earlier this month, Alan Richardson was named one of the Wisden cricketers of the year. That is exalted company to keep: Kumar Sangakkara and Alastair Cook were among the other winners.

Richardson is a 36-year-old county professional who has played for Derbyshire, Warwickshire, Middlesex and now Worcestershire. For much of his career, Richardson has had to fight for every game he has played. He started out as a trialist, travelling around the country looking for 2nd team opportunities. It wasn't until he turned 30 that he became an automatic selection in first-class cricket.

Richardson was a captain's dream at Middlesex: honest, loyal, honourable, hard-working and warm-hearted. By their early 30s, most seamers are in decline and have to suffer the indignity of watching batsmen they once bullied smash them around the ground. Not Richardson. Aged 34, he taught himself the away-swinger - typical of his relentless hunger for self-improvement. In 2011, Richardson clocked up more first-class wickets than anyone.

About to turn 37, he says his chances of playing for England have gone. I hope he's wrong. No one could more richly deserve the right to play for his country. Watching Richardson pull on an England cap would be one of the finest sights in cricket - the perfect example of character rewarded. And it would be further proof that some cricketers will always be quiet achievers, inching towards excellence without vanity or fanfare. They deserve the limelight more than anyone.

Former England, Kent and Middlesex batsman Ed Smith's new book, Luck - What It Means and Why It Matters, is out now.

Billions wiped off Europe's biggest companies as political rebellion rocks eurozone

More than £122.3bn was wiped off the value of Europe's biggest companies on Monday amid fears that the eurozone's commitment to austerity was being swept away by political rebellion - just as its debts hit record levels.

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Stockmarkets plunged as traders panicked that Angela Merkel could lose her key allies in France and the Netherlands Photo: AP

By Louise Armitstead

10:20PM BST 23 Apr 2012

139 Comments

 

Stockmarkets plunged as traders panicked that Angela Merkel could lose her key allies in France and the Netherlands and that the debt crisis rescue plans could unravel.

The Dutch prime minister Mark Rutte, who is one of the eurozone's "hardliners" on fiscal discipline, dramatically quit in the wake of his coalition's refusal to accept Europe's debt pact. Snap elections could be called as early as June.

Traders were also rattled by Francois Hollande's victory over Nicolas Sarkozy in the first round of the French presidential election. The socialist Mr Hollande has vowed to renegotiate the fiscal pact that including a 3pc of GDP deficit limit.

The political concerns were compounded by data that showed eurozone debt has hit 87.2pc of GDP - the highest level since the launch of the single currency in 1999. Eurostat said that the 17 eurozone members had reduced their deficits from 6.2pc of GDP in 2010 to 4.1pc in 2011 - but overall debt levels had risen by 1.9pc.

Spain, meanwhile, officially sank back into recession as the economy shrank 0.4pc in the first quarter of the year, and German manufacturing shrank at its fastest rate for three years in March. The French composite PMI also fell, according to Markit.

By the end of the day, the Stoxx Europe 600 index has sunk 2.3pc to its lowest level for three months. The German Dax dropped 3.4pc, while France's CAC and Spain's Ibex were down 2.8pc each. In London, the FTSE 100 closed down 1.9pc. In the US, the Dow closed down 0.8pc, the S&P 500 lost 0.8pc and the Nasdaq shed 1pc.

Borrowing costs for the core "sinner states" of Spain and Italy rose back towards "unsustainable" levels. French borrowing costs also rose, widening the spread between oats and German bunds to a record 146.9 basis points. The euro fell almost 1pc against the dollar.

The ECB's bond-buying programme went unused for the sixth week in a row last week, the central bank said. But Brussels moved to reassure markets that the fiscal pact, which Ms Merkel said would "last forever", was still intact.

The European Commission said the pact was signed by states, not governments. "Governments change but commitments on behalf of states cannot be changed without discussion with European partners," said the Commission.

The Dutch finance minister, Jans Kees de Jager, insisted his country would stand by its austerity plans. "The Netherlands will retain its solid fiscal policy and will also show the market it will lower its deficit and also have a path of sustainable government finances," he said.

Crime 'one of the world's top 20 economies', says UN official

Crime generates an estimated $2.1 trillion in global annual proceeds - or 3.6pc of the world's gross domestic product - and the problem may be growing, a senior United Nations official has said.

Criminal groups have shown 'impressive adaptability' to law enforcement actions and to new profit opportunities Photo: PA

Reuters

10:37PM BST 23 Apr 2012

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"It makes the criminal business one of the largest economies in the world, one of the top 20 economies," said Yury Fedotov, head of the UN Office on Drugs and Crime (UNODC), describing it as a threat to security and economic development.

The figure was calculated recently for the first time by the UNODC and World Bank, based on data for 2009, and no comparisons are yet available, Mr Fedotov told a news conference.

Speaking on the opening day of a week-long meeting of the international Commission on Crime Prevention and Criminal Justice (CCPCJ), he suggested the situation may be worsening "but to corroborate this feeling I need more data".

He said up to $40bn is lost through corruption in developing countries annually and illicit income from human trafficking amounts to $32bn every year.

"According to some estimates, at any one time, 2.4m people suffer the misery of human trafficking, a shameful crime of modern day slavery," Mr Fedotov said separately in a speech.

He also cited a range of other crimes yielding big money.

Organized crime, illicit trafficking, violence and corruption are "major impediments" to the Millennium Development Goals, a group of targets set by the international community in 2000 to seek to improve health and reduce poverty among the world's poorest people by 2015, Mr Fedotov said.

Criminal groups have shown "impressive adaptability" to law enforcement actions and to new profit opportunities, a senior US official told the meeting in Vienna.

"Today, most criminal organizations bear no resemblance to the hierarchical organized crime family groups of the past," Principal Deputy Assistant Secretary Brian Nichols said, according to a copy of his speech.

"Instead, they consist of loose and informal networks that often converge when it is convenient and engage in a diverse array of criminal activities," Mr Nichols, of the US Bureau of International Narcotics and Law Enforcement Affairs, added.

He said terrorist groups in some cases were turning to crime to help fund their operations: "There are even instances where terrorists are evolving into criminal entrepreneurs in their own right."