New Job - New Home back in South London

Now, I have always regarded myself as a South London lad. In fact, I would often mock the expression that all City traders were barrow boys by stating that I came from "Sarf Lundun" and switch back to my normal voice (which may fix me as a South London boy in many people's eyes).

Aside: Is everyone else shocked when they hear their voice recorded? It seems that the brain lets you hear what you want to hear and the world gets the truth!

Well, back to the story. Leaving the District Bank meant leaving the flat in Watford so we were desperately looking for somewhere to go. Valerie's Mum mentioned that Valerie's Dad's aunt (Margaret) was soon to have a few rooms spare as her son, Basil, was leaving to get married. I was amused to hear that the flat was in Norbury which is about 2 miles from Streatham, where I was born. Back to my old stamping grounds as Roger and I used to do our Bob-A-Jobbing in that area. We went down to have a look and what we were offered was the upstairs of her house - sharing the bathroom. This gave us a living room, a bedroom and a kitchen. As there was just the two of us and the rent was right, we jumped at the chance. There was only one small problem - Valerie was working at the Wembley branch of the bank - a commute that was impossible. Once again, the District Bank proved that it looked after its staff by transferring her to their branch in Croydon - just as simple bus ride 3 miles down the A23.  However, I was back to travelling into the City from south of the river.  I had a choice, from Norbury station, of going into London Bridge Station and walking over the river or going into Blackfriars Station and getting back up Queen Victoria Street and across to Mincing Lane - where Julius Baer was sited. In the end, I used to get on the next train and not really care which station I went to.

Back to the flat. Auntie Margaret was a "funny" little lady but very quiet and undemanding as a landlord. The first thing that Valerie wanted was to redecorate the living room to match the large pair of orange curtains that she had got me to make at Watford. Her idea of matching meant that we had one wall and the whole ceiling painted orange and some trendy dark brown patterned paper on the rest. I wish I had a photo as the effect was "amazing" and you can read what you like into that word. Valerie was over the moon with the effect.  All of our furniture fitted so we had the nice pine table, chair, bench and my brother's bed settee in the room along with a large orange bean bag.

The kitchen was quite small but had room for a kitchen cabinet. It was very similar to this one:

Then we had the cooker, sink/draining board and our twin-tub washing machine. Remember twin-tubs? One side did the washing and the other side had a spin dryer. This one is similar to the one we had.

I was proving to be a bit of a handy man, even though I had never had any instruction from my Dad - who was definitely NOT a handy man. It was just as well because there was no power point in the kitchen (the cooker was gas powered). I found myself making up an extension lead to run enough power from a 13amp socket in the hall through to the kitchen so that the washing machine would work. Because of the power consumption, I had to make this using some high capacity mains cable. In fact, I did such a good job with it that it is still in use in 2015 powering the Bread Maker on our kitchen. It has been taken apart just once in its life to refresh the screw terminals.

We brought our two cats with us when we moved. Tweetsie was her usual serene self whilst Tinker, who was already a nervous wreck, took advantage of the peace and quiet downstairs to spend most of his time with Auntie Margaret. We left Tinker behind when we finally moved as he couldn't cope with any change or disruption. Maybe, if I had named him after a short line railroad, he would have coped better!

Life was quite good in Norbury. We were two short bus rides from my Mum and Dad and easy access to the train to get to Valerie's Mum and Dad although I have no memories of making that sort of trip. My Best Man, Roger lived a short distance away so he often came to stay over night. It was here that I really got into Hi-Fi in the proper sense of the word. The expression is over used nowadays for very mundane musical reproduction but in those days Hi-Fi was very different from what Mr. Average listened to. My first step on the ladder had me buying a Heathkit kit of parts to build an amplifier. This was a good quality valve based amp. that was well matched against my Garrard SP-25 record deck and Decca Deram ceramic cartridge. I also made up a pair of speakers from a plan in one of the Hi-Fi magazines. These turned out really well and we kept them for quite a while. I learned an awful lot about soldering and making electronic bits from the Heathkit kit and the end result was well worth the effort. However, fairly soon, I was able to consider upgrading to a transistorised amplifier. Oh, Wow. How exciting the world was then with all of these electronic marvels coming along. We had  a great Hi-Fi shop up in Streatham High Road just by St. Leonard's Church. I spent quite a lot of money in Frances of Streatham.

So, I am in a new job, Valerie is in a new branch and we are both in a new flat. Interesting times!

Julius Baer International the first couple of weeks.

I had thought about going to a Canadian Bank, as I was quite well equipped for trading Canadian Dollars but in the end, I went to work for a start-up situation (as we would call it now).  This was a joint venture which had been created by Bank Julius Baer in Zurich in  conjunction with a UK based finance company called United Dominions Trust. I didn't know very much about balance sheets and bank trading limits coming from the District Bank. We pretty much dealt with most banks so my appreciation of credit worthiness was limited to a few absolute no-no counterparts. I soon found out different!

The bank was owned 50/50 and had a massing £500,000 capital. This is the equivalent of about £8,000,000 in today's money so not as bad as it seems but, in retrospect, not good. I had an interview with the Managing Director - Henri Jacquier - and the Manager - David Mann. Jacquier was known to me as he had been Treasury manager of Klienwort Benson, a well know merchant bank and was widely known in market circles but David Mann was an unknown to me. He came from Hill Samual and had made his mark in the more traditional finance areas on mer4chant banking. The interview seemed to go quite well but I wasn't confident because they didn't have any dealers working for them and I was only 23 years old so the likelihood of me becoming their only dealer seemed very remote.

Remember that I was earning around £800p.a. at the time and that Valerie's salary brought our total up to around £1,500 p.a. Thus, when I received a letter from them not only offering me the job but also offering me £1,500 p.a., I was amazed. Their letter, signed by David Mann, turned out to be typical of him in that it contained a lot of talk that turned out to be hot air. He wrote that I was to have the job - fair enough - but that I would also be paid to sit exams which would make it possible for me to operate in the world of the Stock Exchange. This was something that I knew little about (apart from what I had learned in my banking exams) so it sounded quite exciting. In true David Mann fashion, it never came off.

I took the job but, when I resigned from the District Bank I found out that I was quite liked there and that my leaving came as a disappointment to them. Still, I explained that I needed the extra money as I wanted to buy a house and expected to start having children soon. Plus, I was aware of the forthcoming merger of the three banks into the National Westminster Bank and expected that we, as the smallest unit, would get little consideration when it came to handing out jobs. As it ended up, I was partially right in that my boss, John Botevyle, ended up outside of trading and Peter Johnston spent his whole time at NatWest as No.2 on the DM desk. Not quite what I wanted. The other thing that was pointed out was that we would have to give up the bank flat in Watford and find somewhere else to live. I knew that but it was another bit of stress in the move.

Still, I left and turned up in Mincing Lane to their new offices. My, was it a small organisation. There was HJ and DM as mentioned. The Assistant Manager was a Swiss German from Julius Baer in Zurich - Peter de Muralt. There were two secretaries - Miss Pfaff from Zurich and Gloria (but I can't remember he surname). At the same time that they took me on, they also employed Peter Hedges to be the banking/back office manager and young girl assistant to him. It was somewhat of a reality shock to find that I really was the only guy who knew anything about FX and Money Markets - and my Money Market knowledge was pretty thin! One thing I did know was the difference between an Authorised Bank (AB) and a Licensed Deposit Taker (LDT). Every new banking institution, at that time, had to serve time as a LDT before achieving AB status. This normally took about 9 months provided that no rules were broken. The first thing that I found, when I started work, was that the rules, most definitely, had been broken. LDTs were only permitted to carry out money market business - in other words they could borrow and lend money - but only carry out FX transactions within the Exchange Control act which meant that they had to obtain BofE permission, via a green Form E, before any such activity. What I saw immediately on joining was that the bank had outstanding FX forward transactions for which they had no permission. I tackled the management on this and was shocked to find that they thought that it was permissible! This was senior management from established banks proving that they didn't know the rules! I insisted that they must go to the BofE and regularise the situation, otherwise they were unlikely to pass the BofE's rules for obtaining full Authorised Banking status as soon as possible.

A meeting took place(without me and without my bosses explaining that they were only there because a 23 year old dealer had told them to be!). It seems that they had fallen into the trap of believing that they were permitted to swap one currency for another provided that it was part of a funding operation. What they were doing, before I joined, was going to Julius Baer in Zurich for all of their funding. This was provided in Swiss Francs. They were then selling the SF spot (two days time) and buying them back at the required maturity date (say, three months time) against US dollars, which is what they needed. Although there was no exchange risk in this, because the exchange rates were fixed at the beginning, they were still carrying out banned transactions. As they had come clean, the Bank of England looked kindly on them and, unusually, gave them permission to carry on doing this provided that they, retrospectively, presented a Form E quoting a specific reference. Well, that was good enough for me so I could carry on doing what was necessary. In fact, it quite shocked me as I hadn't really considered what working for a bank with such a small capital would entail. It didn't matter to anyone else as they were involved in all the other activities of international banks but it mattered to me as I was severely constrained in what I could do. I did manage to fill my time but it wasn't easy.Still more of that later.

Wrap up on the District Bank Years

Just a few things to touch on and then we move to pastures new.

I never took too many trading positions except in the trading of investment and property currency but occasionally I would get the chance to quote Deutsche Bank in Dusseldorf for forward D Marks. This was generally not successful as they were normally dealing with a few banks at a time so the market always moved against me but sometimes it worked if I sat on the position long enough.

Someone had the great idea, following a visit by the Commercial Bank of Greece (CBG) that we should enter the Greek Drachma market. This was a lightly supported market in the UK so it seemed like a good opportunity. CBG would regularly give us fixed trading prices for Drachma against USD so we could generate Cable business as well. It wasn't our biggest earner but it was an introduction to Greek banks which was useful in later years.

One day, at lunch with Mike - a Swiss Franc broker from Harlow Meyer - he told me of a simple way that they had of calculating forward Swissy/GBP  swap prices from Swissy/USD and USD/GBP. I expressed an interest as it was something that I got involved in on occasion. He sent me round a few sheets of paper which had a table written out in long hand - not many photocopiers around at that time. You could read off the Swissy GBP price by finding the required two rates around the edges with the answer being at the conjunction on the table. I was quite thrilled with this until John Botevyle told me that, until I could explain how it was calculated, I wasn't allowed to use it. Although I had been good at maths at school, I wasn't up to the explanation at that time and neither could Mike so I had to leave it alone. In later years I was not only able to understand it but I ended up working out where it was too simplistic and creating a formula that did really work.

The final crunch came during a conversation I was having on the phone with Brian Bennett - a Canadian $ broker at M.W. Marshall. I was bemoaning the fact that I didn't get a job within the bank that I thought was coming my way. The bank had decided to re-invent County Bank. County Bank was one of the constituent parts of the District Bank back in its history and the idea was that it would now be a merchant bank like organisation. The plan was that I would become the one and only dealer at this new bank when it started. This filled me with excitement but my hopes were dashed when they decided that what they wanted was not a dealer but a processor to manage the transactions. This resulted in someone called Ramsbottom from head office in Manchester getting the job. This upset me as it would have been quite exciting and very good for my career. Brian's suggestion was that I leave and go to join one of the myriad overseas banks that were either arriving in London hotfoot after the regional American banks. On muttering about job security and other worries, Brian asked what salary I was on. At the time I was on around £850p.a. (see earlier discussions about present value!). My coming clean resulted in guffaws of laughter. On asking what was so amusing, he pointed out that I could probably get close to doubling that! Now he was talking. He gave me a few more insights and suggested that I should get on with it.

There was another reason that I was interested in his comments. This was that the District Bank was due to be merged into the National Westminster Bank along with National Provincial Bank and Westminster Bank. This wasn't due to take place until the 1st of January 1970 so about 18 months in the future but firstly, I needed extra money now and I wasn't at all sure what the deal was going to be when we all got merged into one dealing room. For all I knew, they wouldn't want our little team and I didn't fancy trying to get another dealing job having been left out in the cold. Also, I wasn't at all sure that a 100% salary hike would be on offer. So, I started looking.

I didn't want to go to an American bank. As a genre, they had a reputation for pushing you out if you didn't meet their high up-front targets. I hadn't worked with any targets so far and was a bit hesitant of taking on what could be a life changer. I started checking the Financial Times on a Thursday as that was the day that dealing room appointments were listed. True to form, there wasn't much about. Isn't life always like that?  I remember one interview at the Trade Development Bank where the interviewer seemed only interested in finding out the names of our biggest customers so that one didn't work. I can't remember too much about any other interview but the one that interested me most was with a new startup bank that was being created by Bank Julius Baer in Zurich. I will go through that in more detail in the next posting.

District Bank Wrap up - Part 2

So, I am getting close to leaving the bank now so I had better fill you in on some of the last few interesting items.

I must come back to the discussion regarding the Bank of England support that we were providing. However, first I have to explain how the New York money market worked in those days (sorry!). Unlike in London, where everything is cleared between banks on the same day, there were two processes in New York. There, they had a cleared market (FedFunds) and an uncleared one (Clearing House Funds). Basically, anything transferred between commercial banks in New York was regarded as uncleared until it had been held overnight. Anything transferred over a Federal Reserve Bank of New York account (called the Fed from now on) would be regarded as cleared. Cleared meant that it was accepted that the account being charged had sufficient credit for the charge to be paid and thus would not be returned unpaid on the next day.

All dollar transactions in the London FX markets and all of the money market dollars (called EuroDollars if transacted in London) were in Clearing House Funds and thus not really good value until the next day. As, at that time, most London banks had no real knowledge of these complications, no one actually ever thought about it. However, it came to our notice that the Bank of England was paying us out of their Fed account. Actually, our agent in NY, The Bank of California (BoC), pointed this out. It was important because of the way that the NY market worked. If you, as a bank, needed cleared funds today but only had Clearing funds, then you could buy the Fed Funds on the NY market. Effectively, you did a deal with another bank that had Fed Funds in their account. They released the Fed Funds to you and you transferred the Clearing funds to them along with one working day's interest. This was necessary because there were things that they couldn't do with Clearing funds so they had to hold onto them for the one day to make them cleared. Understand? No, I didn't think you would but just read on and don't worry about it.

So, here was us being paid in Fed Funds and paying out Clearing Funds on a daily basis and sometimes in the region of $200,000,000 at a time. BoC told us that they could buy the FedFunds from us for that one days interest and pay the Clearing Funds on our behalf. This sounded like a good idea, especially if the settlement day was on a Friday because that would mean three days interest over the weekend (more about this later - you lucky people). We thought that we should check with the Bank to see if they had any objections, although what we did with our Fed Funds was our business. In those day, of course, everyone kept on good terms with the Old Lady and never wanted to upset her. She told us that it was fine with her but to remember that, should the Sterling market improve between the trade date and the value date (two days) she could always reverse the trade. BoC was happy to have a cancellation up to 12 o'clock NY time so this was going to work. In fact, if I remember, they only ever reversed one transaction. We made quite a lot of money doing this. In fact, in discussion with National Provincial Bank, who owned the District Bank, it turned out that they hadn't ever thought of this, and better still, didn't have any mechanism for doing the deals. They started paying their Fed Funds over to us to dispose of so we gained even more!

This all came to a halt on 19th November 1967. Valerie and I were sitting in front of the television watching, I seem to remember, Midnight Lace - a film staring Doris Day - when the BBC interrupted the film to announce that the pound had been devalued from it 2.80 parity against the dollar to 2.40. Remember that we had been trading at or around the 2.7810 mark. I own up to actually crying at that point. We had put an awful lot of work into our support operations, as had the other clearing banks and it was now to no avail.

On sitting down on Monday morning, we surveyed the market and were amazed to see that overnight swap transactions were trading at 100s of % per annum where normally they would have traded at the equivalent of around 6 - 8%. The one day premium for purchasing Sterling overnight calculated out at these huge rates, purely because everyone outside of the UK had sold sterling and needed to obtain these overnight funds on a daily basis. They had all been expecting the devaluation but hadn't expected such a high daily cost. If you think about it, an annual interest rate of 365% represented 1% for any single day. You would have to move your shortage of sterling from Monday (as it was) to Wednesday so that you could close out your short trade and take your profit. To do this would cost you 2% of your capital so that reduced your gain from the devaluation. BoC NY always left an overnight order with us to cover their Sterling position but we couldn't execute it because, eventually, the cost reached a daily price of 4%. We called them on their opening and , although they were horrified, they had no option but to do the deal. Because of exchange control restrictions, we were (as was every bank in London) unable to lend Sterling overseas so we couldn't help the directly.  We could take a small advantage from it because we, like every other bank in London, had a small BofE limit to sell Sterling and buy it back later (the so called spot-against-forward limit). As a Clearing Bank we always had access to cheap Sterling to lend on the London money market so we took advantage of our unused portion of this and made a nice little profit ourselves.

For a further comment on how London was affected by the the vagaries of the New York Money Markets, check out my 'aside' about the short term London Eurodollar market.

Sorry that this is so technical but I don't think it would be right just to tell you about the easy things. This was such an important part of my life that I really needed to get it down on "paper". I still have a few things to tell you about before I actually leave the District Bank for pastures new. Once they are cleared up, I can also get back to our newly married life.

The London EuroDollar market in the 1960s and 70s - Fed Funds and Clearing Funds

Having been bored to tears with my description of Fed Funds and Clearing House Funds, I am now going to subject you to a treatise on how this affected the London EuroDollar market.

I have tried to explain how you could convert Fed Funds into Clearing Funds and vice versa - basically there was a one working day interest allowance that accrues to a Fed Fund balance when it is converted to Clearing funds. OK, in English, this means that if you have $1,000,000 of Fed Funds and you exchange them for Clearing Funds with a current interest rate of 5% you get $50,000 (being 5% interest for one year) divided by 360 (the US always uses 360 as a year base whilst the UK always uses 365) so you would transfer away $1,000,000 for Fed Funds and receive 1,000,138.89.

Now the interesting thing is that if you did this on a Friday, the interest received would be $138.89 * 3 because the Clearing Funds would require 3 days (Saturday to Monday) to become cleared funds.

In the early 60s, banks in London were content to deal in Clearing funds and not concern themselves with Fed Funds as no-one (except for a small number of US banks) had access to such things in the normal course of business. Step forward to the influx of regional US banks from about 1965 onwards - more specifically to the arrival of National Bank of Detroit (NBD) onto the London scene. Now NBD were in London for one single reason - to tap the EuroDollar market for funds to repatriate back to Detroit for internal use. They quickly worked out the problem with trading in London, vis-a-vis Fed Funds, which is what they were after. So, if they borrowed money on a Friday, they would pay 3 days interest until Monday but would only get 1 days Fed Funds interest from Monday to Tuesday. Are you beginning to see how this works? But, and it is a big but, if they borrowed Clearing funds in London on a Thursday, they only paid one day's interest but got Fed Funds for the three day weekend. Rapidly, they started to bid up on the Thursday market and everyone cottoned onto the weekend so the  borrowers dropped out until the price plummeted.

E.G. Day to day funds are 5%.
Mon - Tues = 5%
Tues - Wed = 5%
Wed - Thur = 5%
Thur - Fri = 15%
Fri - Mon = 1 5/8%

BTW, the NBD gained a nickname in the market. They were known as the "Flying A**hole" for some reason!

The problem got even more complicated. If a one month trade started on a Thursday but finished on a "standard" day of the week, the rate would be inflated by the 3 day effect of the Thursday - Friday and likewise, if a period started on a Friday and ended on a "standard" day, the rate would be reduced because of the weekend rate effect. This caused great complications and there were dealers out there who spent their lives working out rates for strange periods in the hope of catching people out. In fact, some years later, I wrote a computer program for my bank that did all of the calculations. Until everyone else woke up to trading desk software, this gave us a great edge in the money markets.

I left the market in 1985 so I am not sure when, or if, this pattern dies out.

Wrap up on District Bank - Part 1

As Peter took over the day-to-day roles, I took on a new job of managing the Investment Currency and Property Currency books. These things are all forgotten now but there is an interesting history here. After WWII there was an extreme shortage of foreign exchange in the UK and exchange controls were imposed. These were very strict and even covered the amount of cash that could be taken on holiday. This amount, incidentally, was very small and made it difficult to have any sort of real break overseas. Payments for imports were also heavily controlled but permission could be give by the use of what was called the Green Form. This form, along with supporting documentation had to be presented for each and every payment overseas for the import of goods. Each bank could approve up to a certain amount but above that, the form had to go to the Bank of England for approval.

We had two senior personnel in the Foreign Department that were responsible for this. Mr. Harris was one but I can't remember the other chaps name. Harris was quite friendly but the other chap kept himself to himself so I didn't really get to know him. I only knew Mr. Harris to talk to because I was a dealer and his office had a door into the Dealing Room. The hierarchy was very strict in those days.

Anyway, back to the main topic. Two aspects over overseas business that were extremely heavily controlled were securities and property transactions. The rules were quite simple, and very onerous. You only got involved if there was a lot of money involved. There were three rules that really mattered

• To purchase an investment or a property overseas, any foreign currency funds needed to be purchased on the special markets that existed for such funds. As the pool of funds could only be fed by the sale of an asset overseas, there was a substantial premium attached to these. If I remember correctly, the premium for Investment Currency was around 29 - 30% and for Property Currency it was a whopping 50 - 55%. This was because of the lack of disposal of foreign assets. The reason for this is explained below.
• Whenever an investment or property overseas was disposed of, the resultant funds were regarded as Investment or Property Currency. These were different from normal foreign currency funds as any repatriation of funds required that 25% of the proceeds had to be disposed of on the normal currency markets.
• There was no way to increase the amount of available funds as all funds available were created by the liquidation of previously held assets.

Thus, any overseas investment required the payment of a substantial premium to obtain the currency. Then, when you sold up, you only got that premium back 75% of the proceeds. This not only made the whole process extremely expensive but, due to the constantly depleting pool of funds, the situation always got worse.

My job was to not only manage the book, which meant buying and selling on these markets to meet customer needs and maintaining the bank's records of our translations but also to make a profit where I could. This meant that I would trade on the markets and buy an excess when appropriate. I did this quite well and it became a speciality of mine. There were a limited amount of banks in the market that made trading prices. I remember dealing regularly with Hill Samuel and Guinness Mahon (the dealer there was a Mr. Galvanoni I seem to remember).

One day there was quite a flurry of activity in the bank with everyone gossiping about what was going on. Suddenly, I was asked to sell a substantial amount of Property Currency to one of our large property company customers. On asking for the property details, I was told that it didn't matter as he was only going to sell it back to us. It turned out that the owner of the company had bought a property overseas without going through the Property Currency market and that he had been found out by the Bank of England. He no longer had the property but that didn't impress them one bit. As he was a person of some standing in the City (the BofE thought such things were important back then when they really worried about the City's reputation), it seems that they had called him in, given him a dressing down and then gave him 20 minutes to sort it out so that he met the rules. He had then hot footed it round to us and hence my sudden involvement. After buying the currency at a 55% premium and selling just 75% back at a similar price, he found the cost of his misdemeanour.

Me and the Bank of England

One of the interesting buttons on my desk was marked BofE. This was a direct line through to the dealing room of the Bank of England. In my early days, this wasn’t really used so I got used to it being there but of no real meaning. Then, one day, I got into work before John Botevyle to find the red light to them was lit. This meant that they had called and no one had answered. I rang them back to be greeted with a complaint that the room wasn’t manned when they wanted us. I explained that it was only 8.50 and we didn’t open until 9am, which didn’t impress the chap on the other end at all. He told me that, as we weren’t there when he wanted us, he had done a deal on our behalf. It turned out that the BofE had bought five million pounds from Swiss Bank Corporation (SBC) in Zurich but, as was usual at that time, she (the BofE was always referred to in the feminine – this coming from here sobriquet of ‘The Old Lady of Threadneedle Street’, or just ‘The Old Lady’) was putting the deal through us to avoid her name going on a deal in another jurisdiction. I accepted this – what else could I do – and processed the deal. 

I explained to John and his comment was that they hadn’t done this for some time so the pressure on the pound must be building up. “Expect more of these” was his comment.  It seems that the pound was slipping below the bank’s bottom limit of 2.7820 and she had to intervene. Putting it through us solved her problem. Over the coming weeks, this became a regular operation.  One day, I took a phone call at around 9.10 to find that I was talking to SBC Zurich directly. He told me that he had done a deal with “our mutual friend” for three million pounds and that we were to process it. It shows that even the Swiss banks took the anonymity of the BofE seriously such that he wouldn’t even speak the name over the telephone. Quite why the BofE didn’t tell us herself I never understood but it only happened on one occasion.

From then on things hotted up and we found ourselves fully engaged in the BofE support operations. It was very exciting to read in the paper that the BofE had done x millions in the market on a day only for me to know that we had done more than the stated amount along with two other banks being involved. As the BofE never disclosed or confirmed her involvement, it was always the Evening Standard’s guess that got published. We, once again, come back to the inflation multiplier to get a real idea of the amounts involved in this operation. I know that on some days, we traded fifty million pounds on the bank’s behalf. In today’s money this represents around £790,000,000 or £2,500,000,000 in salary adjusted pounds – yes, two and a half billion! On the one day in the month that the trade figures were announced, thing got even hotter. 

The balance of trade flows was a closely watched statistic at that time and the UK was consistently importing much more than it exported. It still does but, in those days, the financial standing of the UK was precarious and we relied totally on our ability to balance our books to maintain our foreign currency reserves. Nowadays, we have a similar trade problem but the UK has a great standing as a secure haven for funds and thus inward investment keeps this in some sort of kilter. During the depths of the crisis, the country was fast running out of money and had to negotiate a range of currency swaps whereby we loaned Sterling to, say, the Swiss central bank and they lent us Swiss Francs. This was fine provided that the BofE could maintain the value of the pound but if there should be a devaluation, then the country would lose a lot on the exchange rate when unwinding the swap.

This came to a head one glorious day when the BofE decided that there weren’t enough Dollars in the kitty to continue supporting the market. They came up with, what they saw, as a brilliant idea. Why not support the market by selling dollars for delivery in three months time. Normally, the liquidity in the money markets was much greater than the exchange market as it responded to investment, whereby the exchange market was all about day-to-day cash requirements. Because of the difference between dollar and sterling interest rates, buying pounds for future delivery was different from the spot rate. With interest rates as they stood at that time, the difference between the current spot price and the three months forward exchange rate was around one a one half cents. This meant that, if the BofE wanted to support the pound at 2.7820, then they would have to offer to buy pounds in 90 days at 2.7666. This was tantamount to a devaluation in all but name but only around 2 1/2 %. I am not sure just how much of this the government understood. The Chancellor of the Exchequer was Jim Callaghan, who was not a banker or a finance man, so relied on the BofE to advise him. The truth was that, should the pound stay at its current value then the BofE would make a profit when the time came to settle these trades. However, should the pound devalue by any more than 2 ½ % then there would be a nominal loss. It seemed likely, if the pound did ever devalue that it would be by around 15% or so which would result in the bank and therefore the country having a large exchange loss.

Well, it started at around 10 am. I took a call that told me to go into the market and buy up to 50 million pounds at the current three months outright price. After shaking my head in disbelief, I told John what we had been asked to do. We went to our main broker for Cable (USD/GBP), which was M.W. Marshall, and gave them the order to buy up to 5 million. We didn’t was to show our hand too quickly. We shortly received that amount. What was interesting was that the name on the trade was N.M. Rothschild. Now NMR (as they were known) was not a spot market trader except for their own customer requirements so this was unusual. What was happening, of course, is that the broker was getting a swap price from NMR; i.e. NMR was buying the pounds on the spot date and selling them back at a fixed price on the three months date. That left the broker to find a spot counterpart. Let’s say that this was SBC London. So SBC London sold the spot pounds to NMR. Then NMR sold the forward pounds to us, thus completing the deal and achieving the BofE’s requirement that their pounds only went out in the future. Fifty million pounds later, we advised the BofE that we were done. I assume that they had other clearing banks doing the same as us.

Shortly after we had completed, I had to go to another department for something and, on getting in the lift, found that the Head Office General Manager; i.e. the overall boss of all the foreign activity in the bank – was also in that lift. “Hello Pennington (no Christian names in those days). What’s happening in the markets?” I was particularly proud that, as a mere 22 year old, I was on talking terms to the big boss. “Oh, we are supporting the pound by buying three months outright.” “That’s surprising. Whom are we dealing with?” “Oh, N.M. Rothschild on every trade.” Said I without too much thought. “How much have we done?” he asked. “Around 50 million.” Says I. “Hmmm. What is our trading limit for Rothschild?” he asked. I had to admit that it was only 5 million but explained that it would not have been possible to turn down any trade as the market was too volatile and if we had stopped then we would get it thick in the ear from the Old Lady. Fortunately, he realised that firstly, it was John Botevyle’s decision, not mine, and that I was probably right. On telling John of the exchange, we both felt that, although we had broken the bank’s rules, we couldn’t have done anything else. Oh what fun we had!

I remember one other incident with the BofE. One day, they told me to do ‘a bit’. After 20 million, I reported back to be blasted out of my chair because they thought that ‘a bit’ was a lot less than that amount. Two hours later, they told me, again, to ‘do a bit’. I reported back on 5 million and got blasted for not doing enough. The only answer possible in all of this to the chief dealer of the BofE was ‘Yes sir.’!

Appendix

A worked example of a three months forward price.

Exchange Rate	GBP	USD
2.7820	6.9	4.55
Spot	£1,000,000.00	$2,782,000.00
Interest 90 days	£17,013.70	$31,645.25
2.7666	£1,017,013.70	$2,813,645.25
Forward Swap	0.0154

So, in the above example, you could obtain 6.9% interest on the pounds but only 4.55% on the USD. For someone to take your dollars and to give you pounds, they would lose 1.35% on the deal. Therefore, the exchange rate on the forward end had to vary from the spot by that amount for anyone to do the exchange deal. The outright exchange price is calculated by dividing the sterling amount into the dollar amount. The spot rate is subtracted from this rate to give the “swap” price of -154 premium as it would be quoted in the markets. Clear? I thought not!

Having the time of my life - Canadian Dollars

When you see the real story of 1967 to 1968, you will see why I spent so much time discussing inflation. The numbers involved look quite small now but, unless you have lived through the ensuing period, you won't appreciate just how much the prices in the UK have changed. As explained, everything in 1967 has to be multiplied by 1,575%. Yes, that is right. Everything is nearly 16 times dearer now than it was then.

A good example is a car. The Ford Anglia (as we rented for our honeymoon) was a popular car in 1967 and the deluxe version - lots of chrome but with a heater as an optional extra and no radio - was £596. Using our inflation multiplier, this makes the car cost £9,387 in current terms. This is for a basic car - hand wind windows, no heater or radio, top speed around 73mph and a 0-60mph of 30 seconds - yes, thirty seconds - and 39mpg! You can see the full details - HERE. The list price for a current Ford Fiesta is £9,995 but this is an immeasurably superior car. 0–60mph is 16.9 secs, top speed is 94 mph and average mpg is 54.3 and with all the amenities that we expect.

OK, back to life. District Bank was a small clearing bank with around 570 branches. It was purchased by the National Provincial Bank in 1962 - with 1,500 branches - and ran as a separate entity until the big National Westminster Bank merger in 1970. We had some fairly large clients, however, due to the bank's large number of branches in the north of England. Customers included Radio Rentals, Leek & Moorlands Building Society and Unilever. Unilever had a Deutsche Mark account with us in London and would quite regularly call us to top up the account. On most occasion, this was for DM1,000,000 (around 6.5 million pounds at todays exchange rate). The big one was Turner Brothers (TB) - latterly Turner Newall. This company was a customer of our head office in Manchester. They imported much of their raw materials from Canada. As Manchester had no ability to fix exchange rates above a fairly small amount, they always had to contact us in London for the current Canadian Dollar/ Pound exchange rates on the transactions. As TB took constant deliveries of material, they had a wide spread of maturities that they needed prices for. These prices were for them to buy forward Canadian Dollars over around 10 - 15 maturity dates running out for about 3 - 4 months. They needed these prices as they were contracting to buy regular shipments and the dates chosen for the exchange deals matched the major dates. The process would go as follows:

"Can we have outright prices for Turners for..." with a list of dates. The trades would have been simple but the total amount that they were requesting was normally around Can$ 15,000,000. Although they were buying for future dates, we had to buy the total amount on the current spot (2 day delivery) market and then cover the forward dates by doing what were known as forward swaps. The forward market was tied to interest rate movements so was relatively stable over a couple of days whilst the spot market moved all the time based on current supply and demand.  This is where the inflation calculator comes into play. In the current environment, fifteen million doesn't sound too large amount when you think about some London house prices but... at current inflation levels, we are talking about two hundred and thirty six million dollars! Now the spot market in London was good for about two million at that time, if you were lucky. The Canadian banks in London had a bit of a stranglehold on the market. Royal Bank of Canada (RBC) and Bank of Montreal (BOM) were the two main supporters of the market but there was another couple of problems. Firstly, there were only two brokers in London allowed to quote Can$ - M.W. Marshall and Godsells. Both of these would normally have a firm price (i.e. one that could be traded on rather than a guess) but only in one million dollars. We had fifteen million to buy! The main banks in Canada would probably deal for two million at a time. Both RBC and BOM were good traders in Montreal (Montreal was the main trading centre then - Toronto nowadays) with Mercantile Bank of Canada (25% owned by Citibank NY) a bit behind. This meant that, if we were quick, we could get two million done in London; another six million in Montreal and hope to clear the rest in New York. There were two problems. Firstly, we had to give Turner Brothers a set of fixed prices and secondly, given the state of international telephone calls at that time (our two telephone lines ran through the bank's switchboard!) we would have to use our one telex machine to contact any overseas bank. The manager, John Botevyle, would take the London brokers and my job was to get on the telex. We would try and time it so that I had at least got one bank on the line when John hit London so that we could do as much as we could simultaneously. Having dealt with one bank, I would quickly dial another. Two was about as much as we could manage before the news got out in Montreal that there was a big buyer. My job then was to switch to New York and try and get the balance done. It was VERY exciting.

Once the spot price was fixed, we could relax a little. We still had to move the maturity of the trades from two days ahead up to at or around the trading dates for Turner Brothers. This was John's main task. He used to spread the trades in the market so that we took on about 6 or 7 standard trading dates to make the initial task easy. Over the next few weeks, we became a mainstay in the Canadian Dollar 'cock' date market. 'Cock' dates were any date that didn't correspond to a standard date. The market traded one week, 1, 2, 3 and 6 months on a standard basis. However, like us, all banks needed explicit cover for dates that were off that schedule. Also, apart from the Canadians, most banks didn't have an underlying interest in Can$ so wanted to cover any commitment that they had. Our constant developing of non-standard dated transactions in the size that we had enabled us to quote into that market very competitively so John developed us into a fairly important part of the Canadian Dollar forward market.

Next time, I will discuss our other regular involvement in the Canadian Dollar and also how we got caught up in the Greek Drachma market!

Note: What was a Telex machine?

Inflation Indices and Billions!

To understand the forthcoming blog post, you need a minimal understanding of inflation mathematics.

The world I traded in back in the mid-1960s was a world  miles away from where we are now. Firstly, I will show you how the exchange rates have changed over those  47 years.

		31/03/67	18/11/14
German Mark	DEM	11.11	2.4477	22%
Norwegian Kronor	NOK	19.91	10.54	53%
Swiss Franc	CHF	12.10	1.5030	12%
Canadian $	CAD	3.01	1.7670	52%
US $	GBP	2.7932	1.5656	56%

As you can see, the pound has suffered quite substantially against all of these currencies - not too bad against the Norwegian Kronor and the US$  but terribly against the Swiss Franc and the Deutsche Mark. The rot started back in the early 1960s and built to a peak in the late 1970s and early 1980s until inflation was got "sort of" under control.

It is difficult to understand the prices of things in those days. Houses sold for £5,000 to £6,000, cigarettes were 20p - 30p a packet and petrol was around 6/- (30p a gallon  - yes gallon - not litre - we didn't understand litres in those days). To understand them, you must know the inflation multiplier for use between 1967 and now. According to my information this number is 15.78. This means that all the above prices have to be multiplied by that to get a 2014 equivalent. This results in the following:

1967	2014
£5,000.00	£78,900.00
£6,000.00	£94,680.00
£0.30	£4.73
£12,624.00	£40,000.00

 This makes houses and petrol look cheap but allowance needs to be made for salaries at the time.  As a 7 year experience bank clerk working in the dealing room, I was earning £800p.a.. This equates to £12,650. I would guess that someone with 2 years trading experience now would be earning at least £40,000p.a. Using this as a multiplier the numbers come out like this:

1967 2014 Salary Adjusted £5,000.00 £78,900.00 £250,000.00 £6,000.00 £94,680.00 £300,000.00 £0.30 £4.73 £15.00 £12,624.00 £40,000.00 317%

As you can see, this makes house prices look almost normal. £15.00 per gallon equates to £3.34 per litre as against the current pump price of £1.24 so petrol and cigarettes look cheap at current prices.

I will now look at the type of trading amounts that were usual in the City at that time. 

1967	2014
£5,000.00	£78,900.00
£100,000.00	£1,578,000.00
£1,000,000.00	£15,780,000.00
£50,000,000.00	£789,000,000.00

The £5,000 figure represents the type of amount that we would trade against the smaller currencies, so we would keep NOK100,000 in our account at Den Norske Bank Oslo. Normal trades in GBP/USD would be for £358,000 (USD$1,000,000 as we always trading in foreign currency amount in the London broking market - never is Sterling) which is the equivalent now of £5.6 million. I will discuss in the next article about our trading in Canadian Dollars but suffice it to say for now that our regular trading amount was CAD 15,000,000 which, nowadays, equates to around £78,000,000! Wow, we knew it was big but not that big!

Next time, I will talk about how all of this is relevant to our trading on behalf of one major customer and the Bank of England.

One of the most exciting years of my life! Part 1.

The year that lasted from June 1967 to June 1968 was a very exciting one for me. It was a year of extreme financial turmoil that left a newly married 22 year old in the middle with a small role to play.

Firstly, a reminder of the background. I was the number two in the District Bank's dealing room. District Bank was one of the smaller UK clearing banks with around 570 branches. It was wholy owned by the National Provincial Bank. For more details check out either Wikipedia or the RBS heritage site (RBS being the eventual owner). The head office was in Manchester but all of the FX trading was carried out in the London Office. Sometime during this year we had an extra team member join - Peter Johnston (maybe wrong spelling - sorry Peter). Peter joined the bank in the same week as me in the Walks Department (see earlier blog entry) and at that time was Assistant Foreign Cashier. On being asked to suggest a new member of the team, I was pleased to recommend him. As a member of the Clearing House, we had a direct line through to the Bank of England which enable them to place orders with us to be executed on their behalf in the markets. At that time, it was unheard of for central banks to intervene in the markets in their own name. They also would never confirm intervention nor would they discuss the amounts involved.

1967-68 was 12 months that encompassed a huge Sterling currency crisis, a Sterling devaluation, an international gold crisis and riots in the streets of Paris that shut the banks for a while. Through all of this, I was to play a small and, but not to me, insignificant part.

Let us start with the latter part. For a quick run down, check out the Wikipedia entry. The main effect on me was that the banks in Paris all closed down meaning that the turnover in the French Franc currency market trickled to a halt because no payments could be executed. We had some discussions with a couple of banks in Paris and it turned out that they were perfectly willing to quote us prices in French Francs with the understanding that the normal 2 day delivery of funds would have to be suspended - funds would transfer to settle all outstanding deals when the banks in Paris were working normally again. This gave us the opportunity to enter the London French Franc market as a market maker - something that was normally done by the likes of Credit Lyonnais and Banque National de Paris. We had a very successful run at this and made quite a lot of money as none of the London based French banks seemed to want to get involved - at least we didn't see them.

Now, we come to the gold crisis of March/April 1968. From 1961, the major central banks had agreed to hold the price of gold at $35 per ounce. This had suffered some strains but had generally held in place. However, stresses in the market from the devaluation of Sterling in late 1967 (see later) caused a huge run on gold. Eventually, President de Gaulle decided that France would no longer participate in the "Gold Pool" as it was called. This had become a heavy net provider of gold to the market due to the fixed price in a crises. De Gaulle decided that he wanted to hold gold, not sell it so the French central bank (The Banque de France) started repatriating all of its US Dollar trade receipts to New York for payment in Gold. Eventually, the Gold Pool couldn't hold. On March 8th, 100 tons was sold by the pool - against only 5 tons on the previous day. the following Wednesday it was 175 tons and on the Thursday 225 tons! Needless to say, this could not go on. The Queen declared Friday that week a bank holiday and the gold market was closed for two weeks. It finally opened with a two tier market of official sales between central banks at $35.20 but all other trades at a market price.

Aside: The change from $35 to $35.20 is interesting. Up until then all supply had come from London but the swing from then was to a New York delivery - the 20 cents represented the cost of transporting the gold!

All of this made the exchange markets extremely volatile and I was pretty much rooted to my desk for the period. In fact I was due to visit our Manchester Head Office during this time. The idea was that I would spend a few days up there to see what they did and explain to them what we did. Their exchange desk was purely a reporting desk to us and they had no role in fixing rates for customers over and above a small amount, which they would do at rates updated by me during the day. This means that they had to request rates from us for any large transactions - again, more of this later. I was delayed in going up to Manchester. I was quite proud when I did finally check into my hotel. I was greeted with the expression - "oh, you were the one delayed by the gold crisis". I never felt more important!

All, in all, both of these events were headline news in the newspapers and I was really proud to read about the day's events in the Evening Standard on the train ride home and think that I had been in the middle of it all. However, the best bit was yet to come!

Watford

Well, here we are, living in a flat in Watford. Never been to Watford until we checked out the flat and we knew nothing about the area whatsoever. The flat was a bit - well - it needed quite a bit of work. We found insects crawling around the kitchen sink and all the rooms needed some redecoration. So, the first thing that we did was - get two cats! Well, this is obviously a first step in married life. One was a kitten and the other was a grown cat with problems.

Given my interest in American railways, the obvious choice of name for the kitten was Tweetsie. Tweetsie is the pet name for the East Tennessee and Western North Carolina Railroad. This was a narrow gauge railroad and one of my favourite topics in Lucius Beebe's book Mixed Train Daily. The other cat, a solid black coated one, Valerie decided to call after the only cat she had had before - Tinker. Tinker had a terrible case of nervousness which we never really got out of her.

On the first Saturday of us returning from our honeymoon, we went shopping in the town. As our flat was over the bank branch, we were right in the middle of town anyway so it was no great journey. I have tried to look it up on the map but Watford has changed so much in the intervening years that the old centre of town seems to be unrecognisable. Wandering round the corner, we saw that there was a large department store named Trewins. This turned out to be a branch of John Lewis and caused us to take a step that stayed with us until very recently. We opened an account with them. We recently closed the account because they were discontinuing it. The account we had was a John Lewis only account which limited our purchases but the new John Lewis card is a Visa so it can be used like any other credit card. We wanted to get rid of all our credit cards when I retired so, sadly, we closed the account after 45 years!

The flat had two bedrooms so the second one promptly got a model railway installed although this wasn't very successful. I brought the basic part of the railway with me - Roger and I had built the baseboard in his back garden when we knew we had some decent space. However, I didn't really have any spare money at that time so it did what a few of my railways have done. It languished and the room turned into a dump room. By the time we moved out it was even difficult to open the door, so bad was the stuff piled in there. We decided that we had to completely refurbish the kitchen so, with the help of my best man Roger, we stripped all the paint off the built in dresser and ripped out all the plasterwork around the sink. One of our wedding presents was a refrigerator which we installed too soon as we managed to drop some paint stripper down the front of it. From then on the fridge had some very nice stick-on flowers decorating it. Valerie was sure that it looked better for this enhancement. We made quite a good job of the kitchen. We also redecorated the living room using, what became, Valerie's regular wallpaper as it seem to follow us around!

We had bought ourselves a bed and a mattress and my Mum and Dad gave us a new table, two chairs and a bench as a wedding present. To show how trendy we were, these all came from Habitat in the Fulham Road - a shop only opened by Terence Conran in 1964, since when we had been regular browsers. It also introduced us to paper lampshades, which I think will always be associated with us as they also followed us from house to house. Valerie's mother and father gave us the fridge. My brother gave us his old bed settee, which was a bit battered but did for us and enabled Roger and Valerie's sister Marian to stay over sometimes (not together of course :-)

It wasn't a bad place to live but it was 32 miles to Romford for Valerie's parents and 25 miles to Streatham for mine. As we didn't have a car, this made visiting fairly expensive. At the time, we were  extremely stretched for money as we had taken out a little bit of finance for the bed plus we had my train ticket to the City and Valerie's to Wembley, where she now worked. I can't remember the journey to Streatham particularly because, I would think, that it was my normal journey to work and then my old journey home. However, getting to Valerie's parents was a problem. There was no direct train route and we would have had to travel up to Euston, across London to Liverpool Street and then out to Romford. Not an easy, or cheap, journey. What we did find out was that there was a Green Line bus route that went directly.

This was quite a long drive but it was cheap and just involved sitting on one bus.

Although my trip to work was different - I had to walk to Watford Junction station, take a train to Euston and then take the Northern Line Underground to the Bank station - Valerie's was all new. Her job had moved to the Wembley branch of the bank and that was completely new. I don't even think that she had had an interview. Moving branches wasn't like that. You just got allocated to a new one and off you went to find out what you found out! The work would have been familiar as she had worked at the bank's Oxford Street and Regent Street branches in the West end for the latter part of her time before she was married. Her job was to enter cheques, credits, etc. into the bank's accounting machines. Mind you, I think that her biggest attribute was to push the work through to get out quickly. In those days a bank branch's hours were 10am to 3pm and as soon as the day's work was cleared everyone went home. Oh, was she good at that! She doesn't remember much about the work there (she doesn't remember much about anything in the past so it is no good asking her) but one of the other members of staff was a boy called Dave Foreman. I mention him because he turned up many years latter as a dealer at National & Grindlays bank - which eventually became part of the Australia and New Zealand Bank.

What do I remember most about living in Watford? Hearing there Salvation Army play on a Sunday underneath our living room window; watching Doris Day in Midnight Lace on the TV and seeing a news flash of Harold Wilson announcing the 1967 devaluation of the pound, of which more later; going to an evening party in the City, getting on the stopping trains that finished at Watford, rather than the fast which went to Bletchley and then sleeping on for 30 minutes at Watford Junction station ever grateful that I did get the stopper; Valerie pouring boiling water all over her hand when straining the potatoes and spending Christmas Eve at the hospital rather than travelling to her mothers. That doesn't seem much for our first year together but actually, we slipped into married life very easily. We were very hard up at the end of every month and the one big memory is of us during that first winter playing cards (rummy is the only game that Valerie has ever mastered) at the kitchen table keeping warm by opening the door of the gas oven and lighting it after a meal of bread and jam. I think that it was this that prompted me eventually to look at my position in the bank. Firstly, I went looking for a better paid job - I know that I had an interview at Burroughs in Dunstable regarding becoming an accounting machine rep but it was obvious that that wouldn't suit my style. Eventually, I left the bank and went out into the big wide world of international banking to make my fortune.

We stayed at Watford for just 14 months. It was tied to the job and when I decided to leave the bank and take that important first step into the dark, we lost the flat and had to find another place to live...

Honeymoon

I told you about the trip to Heathrow. What I didn't tell you was that my wife (oh how she loved that title) had forgotten her hair dryer and it wasn't possible to go on holiday without it. You will see later why that was ironic. So, we ended up back at Mother's house on Sunday morning before starting out for real. I would like to say that we had pre-booked a wonderful holiday in the sun but if you knew my wife... We started out with cash in our pockets - no credit cards in those days - a hired car and enough luggage for 5 - 7 days.

Which way to go? Well, neither of us really knew so we headed off to Wales. After a long journey, we ended up on the North Wales coast at Llandudno booking into the Hydro Hotel. Nowadays it is a multi-starred place with good Trip Advisor ratings. I am sorry to say that this did not apply to us. Remember that I was 22 and Valerie was 20. We were world wise - Not! Having booked a room, we were shown up and found that it was the pokiest room you can imaging with outdated furniture and a view of the dustbins out the back. Fortunately, we hadn't paid a deposit or anything so we turned round and walked out. It was just as well we did because we headed out on the A5 which drives right across north Wales to Oswestry. On the way, we came to a small village called Bethesda and came across a small motel out in the country. The difference was chalk and cheese. We had a view up the mountainside and could see sheep grazing. From a small room with no facilities, we had a lovely room with an en-suite shower. It being our second day of marriage and a shower cubicle... Well, that was a first and last!

We had a nice two days there. We had a trip up to Rhyl to see a film - A Countess from Hong Kong starring Sophia Loren and Marlon Brando and a hit song for Petula Clark - This is my song.  Two days - time to move on. My wife has a wanderlust at times like this. Where next then? Oh, the Lake District sounds nice, says she. Off we go and somehow find an extremely nice hotel that is all pine cladding. The significance of this will be obvious to those who know Valerie. For the rest of you, it will emerge in later life. Not only was it all pine clad but - and this was a first for us - had duvets on the beds. We had never seen such things at that time. Again, a lovely couple of days but where next. "Oh, I know", says Valerie, "why don't we go down to Chippenham". We can stay at the Angel Motel and go and see my grandparents. Now, Valerie's grandfather was not a bundle of fun. In fact he was the most hidebound misery that I think I have ever met. Every meal and tea break had to be to exact time and I never heard him crack a smile, let alone laugh. Grandmother was alright but very staid. What did I say? "Oh, alright".

Distances: Romford to Llandudno = 268 miles. Llandudno to The Lake District = 161 miles. The Lakes to Chippenham, Wilts = 252. Not bad for little old England and a guy who hadn't driven for a few years. Fortunately, the M5 motorway was substantially complete at this time and took us south of Birmingham. Someway on the journey, whilst on the motorway the clutch started to slip and going up one long steep hill, it finally lost all contact with the engine. Remember that this was a brand new Ford Anglia so this should not have happened. We pulled onto the hard shoulder and I walked to the nearest telephone to call the RAC (Royal Automobile Club) as their service was included in the hire. Whilst we were waiting, an extremely smart AA (Automobile Association) man turned up. He tried the clutch and announced that we would need a tow to a garage. We thanked him and, sitting there worried, waited for the RAC man. A scruffy RAC van with an even scruffier driver turned up.  Ten minutes later we were on our way, him having adjust the clutch cable which had slipped. Good man!

Somewhere out there on these trips Valerie took a liking to a set of Carmen Heated Hair Rollers. Remember that we had to go back for a hair dryer? I can't remember how it came up or why they became so important but I do remember that the whole time we were at the Angel Motel we were driving throughout that part of Wiltshire looking for the rollers. Not any old Carmen rollers but a specific set! It seems that everyone stocked the make but almost never this special set. Eventually, in Cirencester, we found this exact set and we were able to do something that I wanted. A trip to the Royal Tank Corps museum at Bovington seemed a great idea, but we had run out of time so we went home. It was to be many a long year before I got to see the tanks.

We came back to Watford to open up our new home for Valerie to start her new position at the bank's Wembley branch on the Monday morning. I was to try the new commute from Watford to London, Euston and a Northern Line Underground train to the Bank Station and get back into the hurly burly of the bank's dealing room at a time of huge balance of payments crisis for the UK.My days were to get even more interesting.

The bouncing ball

I have managed to find the video of our wedding. I have cropped it to show the bouncing ball incident. If you look carefully under the car at around the 27 second mark, you will see the ball bouncing. The red mini following is that of my best man - Roger Whittle who chased us up the road flashing his headlights!


I have also uploaded the complete wedding video, just in case you want to see the whole thing. There are many people in the video that, sadly, are no longer with us so it brings back many memories.

Oh, what wonderful memories. We have been married for 47 years now and I have known and loved Valerie for 51 years.