Studies and reports on management culture

I thought I should give the access I promised to some reports I have written on management culture. Here they are (all in PDF):

Clive's guide to Portuguese business culture  (2009 - 70kb)

Can Portuguese management compete? (2002 - 400kb)

Can Irish management compete? (2003 - 25kb)

Can Central and Eastern European management compete? (2009 - 4.3 MB)


We collected new data in Portugal in 2009 and will publish an updated Portuguese study during 2010.

Book review: "How Markets Fail" by John Cassidy

There has been almost as much comment and media analysis of the credit crisis as there were panicked trades in the markets at its peak. Most comment has taken an aggressive or defensive position around the role of bankers. John Cassidy’s outstanding book is a dispassionate but engaging look at the historical, economic, sociological and academic context of the sub-prime crash and its terrible aftermath.

Cassidy does have a message, eloquently argued: the vast majority of economists, bankers and policy makers of the last three decades have been blindly irresponsible in their wholehearted espousal of the unfettered free market. Indeed, he refers to the ideologies of the Chicago school as “Utopian Economics”. His arguments are deep, broad and lucid. He shows, quite irrefutably, how the perfect market, enlightened self interest, full information and other such axioms of the Friedman revolution are disastrously simplistic. The evidence of huge areas of hidden information, beauty contest group psychology and the paradoxical force of game theory outcomes is undeniable. The underlying force of markets, “rational self interest” often or even usually works against the mathematics of supply, demand and perfect information. His analysis of the reality of how bubbles happen and how disturbing they are for traditional economic theories of the market is explosively enlightening.

How Markets Fail also looks at the agents behind the disaster of the last two years. Cassidy is especially unforgiving of the once God-like Alan Greenspan. The old Fed Chairman’s explanation for his arrogant irresponsibility in allowing – indeed encouraging – two major speculative bubbles (dot-com and sub-prime) to explode unchecked was a pathetic “The problem is.. a critical pillar to market competition and free markets did break down...that shocked me. I still do not fully understand why it happened.”

Cassidy also looks at the bankers, in particular, the brilliant mathematical minds behind all their risk calculations and the lethal Value at Risk (VAR) model so widely touted as the unsinkable ship for navigating the icebergs of the market. I was shocked to find that these models and, indeed, the bedrock Black-Scholes option pricing formula, are based on long outdated analyses of how markets work, namely the random walk of share prices and a normal distribution curve for market pricing in general. In other words, all that sophisticated, grotesquely overpaid risk analysis edifice was built on an infantile assumption that all trades are independent of each other and traders never follow the herd.

Although there is a good deal of solid economic and  financial analysis in this book it is imminently readable, sometimes un-put-down-able. His description of how the sub-prime market came into existence, grew and exploded reads like a thriller.

If, like me, you were once enthralled by the mathematical, organic beauty of the free market, the self correcting forces that would always take us back to a satisfying and essentially good equilibrium, this book is essential reading. John Cassidy’s alternative prescription, a plea for “reality based economics” that takes into account how bankers, traders, business managers, house-owners and consumers” act in the real, non-utopian world is powerfully defended and should make us take stock and rethink. After all, what has happened is, fundamentally, a massive intellectual failure, a collapse of an ideology of hubristic wishful thinking. We’ve had enough of all that Master of the Universe stuff: what we need is rational, modest, realistic wisdom. How Markets Fail gives us exactly that.

BTW I was childishly pleased to find that what Cassidy writes does, decidedly more soberly and infinitely more academically, back up most of my rant on bankers in December 2009.

2009 - Year of the Banker

OK, first rant coming up. My version of recent financial history.

The world economy is in a terrible state because of bankers. That bald statement really is the truth and the buggers still don't get it. OK, I should also include derivatives underwriters and traders, fund managers, market analysts and credit rating agencies...and the rest. Maybe gullible and, possibly, stupid, house buyers too. Of course, we should never forget to blame estate agents (for everything, as we always do). But it's the bankers who started it. It's the bankers who should have known and were paid a huge amount to know.

What happened? It started at the end of the 90s, with China making lots of currency, especially dollars, and the main place they put it is back in the US economy. Result, lots and lots of cash - liquidity. In short, bankers got their hands on an ocean full of cheap money they'd done nothing to earn. What did they do?  These clever bankers spread the dough around like a lottery winner on cocaine. Once they ran out of even the dodgiest of credit card holders, the shakiest of businesses and the most over-blown of equities to invest in they decided to ride the property bubble and blow it up even more. They ended up throwing billions, no, trillions at mortgages for people who would never be able to pay back the loans, the so called NINJA customers (no income, no job, no assets). They got "creative" by offering suicidal repayment structures with fancy names but which all meant that, give it a couple of years and the repayments would be way beyond the borrowers' financial capabilities.

So at this point it got worse, much worse, because the even cleverer derivatives chaps (almost all solid alpha males on testosterone overdose) then decided to spread the risk - yes, they knew that these "sub prime" (bullshit for wildly dangerous) mortgages were risky - by using more of that famous creativity. These wonderful people did the obvious to the poisonous loans, they securitized them: they found ways of selling on the risks of the loans without making it too obvious what they were doing. This is the financial and almost infinitely more profitable version of respraying a dangerous old car and upping the price tag. They created collateralized mortgage obligations ("CMOs"), mortgage-backed securities ("MBS") and asset backed securities ("ABS"). The sleight of hand is in the risk ratings system. They did deals with the credit ratings agencies by slicing up the risks involved into tiers and spreading them on with nice comfortable ratings letters AAA, AA, BB+ etc. Of course, by then nobody understood - or, more probably, nobody wanted to know - the real cumulative risk on the underlying assets: they were just pieces of (virtual) paper with a reassuringly quantifiable ratings score, not home loans that nobody could repay.

By now all these trillions of dollars in time-bombed, unstable debt instruments had been sold on and re-sold and repackaged thousands of times. The Bankers got even more devious in their need to satisy their greed and open up more credit lines for more of this toxic stuff by moving most of it off their balance sheets into nasty but huge and dangerous "Special Investment Vehicles (SIVs). They could then raise more MBS's etc and sell on bonds and shares in the SIVs without overburdening the balance sheets.  By the time the clever bankers started to deal in derivates on these derivative off-balance sheet instruments (we are now at least five levels of repackaging away from the original sub-prime mortgages), they forgot or chose to forget that they were simply buying back the criminally dodgy loans they and their mates had issued in the first place. In the meantime, all those brilliant derivatives issuers and intermediaries had taken their slices of profit too (in cash, though little was generated) and the recycled loans were not only explosively risky but - the black comedy touch - they were now even more expensive in order to pay for all those slices! But they looked good, all nicely wrapped in pompous and comfortingly arcane acronyms like SIVs, CMOs, MBSs and ABSs. It was not accidental that only a handlful of people understod what these instruments really were.

In parallel, all this business was itself being funded. A lot of the derivatives activity was being funded by further hedging instruments, more financing deals and lots and lots more credit risk spread around with no cash flow measures to back it up.

What happens next is so tragically predictable (in hindsight of course!). The poor suckers (some of them pretty dodgy too but then the bankers never wanted to check how dodgy their customers were) who had taken out the loans couldn't pay once those charming introductory repayment holidays and reduced interest sweeteners ran out. That is, once the home loan repayments actually reflected the true cost of financing the home purchase, the shit hit the fan. Repayments failed and houses were repossessed. Not just thousands but hundreds of thousands.

The property marked crashed. The loans and the fancy instruments grown off them (CMOs and all) became worthless. The bankers financing the sale and purchase of the derivatives found that their customers couldn't in turn pay their loans. The cash - which had never really existed in the first place - disappeared in smoke and the banks started running out of liquidity. The banks lending money to banks stopped trusting that they would get repaid so they turned off the tap and more banks failed. Real businesses making tangible goods and real services found they couldn't get even the simplest operational credit. Consumers, so dependent on huge extensions of credit, stopped buying cars and refrigerators. Industry came to a halt. So, for a little while, did China. So, in a massive detonation, did the banks.

In stepped governments to sort out the whole god-damned mess. Unlike the 30s, this time, by and large, governments got it right: supplying emergency liquidity to keep banks functioning and also fuelling spending with demand side injections to keep industry going. Dear old Keynes became popular again (he'd always been misread anyway, by both sides of the economic divide).

Why am I and so many others so angry at the bankers and all the other financial whizz-kids? Because of their despicable hubris, unlimited arrogance and their systematic theft of our money.These are nasty accusations, I know.

The most basic lesson of finance is that there's no such things as a free lunch. To get a high return you have to take a high risk, to get low risk you have to expect low returns. That is a deep, fundamental law of the financial market. There are no exceptions. Risk and return are always and inescapably positively correlated, even if dislocated temporally. But then the brainiest analysts seemed to forget that axiom and, more importantly, forgot that the toughie in the real world is accurately ascribing a numerical risk to a real asset and its performance over time.  An example of the hubris was my Financial Markets Prof at business school. He is/was a whiz kid fund manager from New York and loved to remind us how clever he and his friends were. Irritating smugness apart, he was, to be fair, an excellent teacher and it was, indeed fascinating. Lots of formulae, lots of equations, lots of enticing maths. Using all this stuff. risk and return (spiced up with volatility) could be packaged into nice clear cut answers: this exact risk needs exactly this return. Exciting intellectual concepts. As a one time mathematician, I loved it. It was comforting, being opened a window into this clever, clever world where all the complexities of the free market could be understood, if you were smart enough, by applying the right equations, by running the best simulations. The Prof was always very clear about just how clever you needed to be. Masters of the Universe (MOUs) had to be dead smart. He once said that only one member of my class - the only one to have a doctorate (even though it was in political economics) - could possibly join this elite. He wasn't interested in the real world of real assets, real company performance, just intellectual fire-power.

Well, Prof, you were dangerously and arrogantly wrong.  In creating all these beautiful risk models you indeed forgot the nee to understand the real risk underlying all the numbers - the quality of a business's management, the stability of someone's job, the real need for a new product, the sustainable value of property - and substituted that unpredictable reality with the false security of statistics and ratings and formulae and equations. Trouble is, you and your comrades made the stupidest error - the statistical assumptions to derive risk values were very crude and ignored the distorted curves and outliers of the real world of imperfect markets. More crudely: shit in means shit out, however shiny the fan.

The little discussed scandal of the ratings agencies made it all so much worse. Fitch's, Moody's, Standard & Poors's  (etc.) risk assessments on countries, business equities, debt obligations and other investments are mostly paid for by the investment banks who need to sell the very instruments being assessed. The agencies therefore had every reason not to tell the dirty truth about the worthlessness of the wonderful new sub-prime derivatives. But of course, Prof, your intellect was what it was all about and why you were so highly paid. The fact that so many of you checked-in common sense, business acumen and, to be honest, integrity at the door on your way in, is what you are all scrambling to hide; it's what is drowned in the testosterone flood.

Then we have the ultimate scandal, where mere mortals like me feel disgust, where we seek the blood of these financial hyenas. This sleight of hand - the swapping of care, integrity and common sense for mathematical nonsense - is paid for not handsomely but outrageously. There are three, malevolent factors here:

1. Only in financial markets and drug dealing do you get paid in the very commodity you deal with. Because bankers et al deal in trillions of (virtual) dollars, euros, pounds, whatever, so they think that a few little percentage points for themselves is reasonable. But it is not. Oil exploration managers don't get paid in oil, even though they are regularly dealing in finds worth billions. Car company executives don't get a percentage of the production, though they are also responsible for turnover in the billions. But bankers and dealers and equity analysts and the rest are different, they take a cut of the product. Why? Because they can. The real scam is that we pay for all this because bankers don't create wealth themselves, they only manage the money of those who do. Our and our businesses' interest rates, bank charges and myriad financial fees end up in their pockets. It is us little people who pay the MOUs.
   
2. The bonuses - again a cut of the product - are paid on the upside and, unlike for real business owners, there is no downside. The upside target is invariably short term. So, when the market is on the up, almost always due to the activities of consumers and industry not those of bankers, all the bonuses are plucked ripe from the heavy laden market tree. When the market goes down, well, a few Bears pick off further winnings by the risky chance of betting short but most stand and watch and simply get lower bonuses (never zero) for a month or two. The parameters are short term, linked to P&L, not to the balance sheet, and rarely look at individual performance over a long period. Economic/financial sustainability of the deals does not come into consideration.
   
3. The people who approve this disgraceful level and structure of remuneration are members of the same club - bank (etc) shareholders are mostly bankers and fund managers. Spot the conflicting interest.

Can anyone tell me why a 22 year old derivatives dealer, whose only skill is that of the poker player (and probably not as good as the best of those) should earn maybe ten or even a hundred times more than an experienced company MD employing 1000 people and making good honest products for consumers and a decent return for his shareholders? You think I exaggerate about the kind of people involved.

James Cayne was appointed CEO of of one of the most prestigious temples of MOU-dom, Bear Stearns, mainly because he was a great bridge player and a successful salesman (originally photocopiers and scrap iron). No qualifications, no experience of running a business but great at calculating short term risk. Wow, no wonder he made hundreds of millions from other people's money and came out with most of it when the company went down the tubes and lost investors billions. Yet it was the brilliant acumen of all those clever bakers that put him at the helm.

I know. Not all bankers are like this. For all the hundreds of MOU investment bankers, fund managers and equity analysts there are thousands of thoroughly decent folk in retail and commercial banking (or even in investment banking). Indeed, there's the rub. The fat cat investment banking types screwed up and the innocent retail/commercial bankers paid the bill. Actually it's worse. To avoid the unthinkable run on retail banks, to protect ordinary consumer and business deposits, we tax-payers ended up bailing out the MOUs who had caused the disaster. Too right they should separate off investment banking and let them fail when they screw up, without taking the rest of us down with them.

We need free markets, we need financial markets, we need derivatives. We really do need clever and creative bankers and their chums but the market needs rules and most of those need to make sure risk is truly assessed, truly managed and truly apportioned, so that bankers do what they are supposed to and manager our money responsibly as well as profitably. Most importantly, if they to continue to get the sureally high returns they think they deserve, then by their own creed, the personal risk to them should be equally high.The present high return, low risk system of remuneration is profoundly dishonest. Anyone can skim the foam of the bull wave and paddle round the flotsam of the bear trough.

The sad thing is that memories are short. In the US, the UK and elsewhere the focus of anger has already moved from these culprits to those who saved us from total meltdown, the much maligned politicians. They may have unwillingly landed us with a huge long term bill to pay but their ethics are pure as angel feathers compared with most MOUs. Without quick and courageous action from Gordon Brown, Barack Obama and even George W, the bankers could well have destroyed Western civilization. Crucially, politicians get thrown out if they screw up and sometimes even if they don't. The Bankers, even those bailed out with our and our children's taxes, are back on bonus and smugness. Big time.

Oh, by the way, if you think all this is just sour grapes or the ignorance of an outsider, see what the former CEO of Barclays, Martin Taylor, has to say about his profession in his opinion article Innumerate bankers were ripe for a reckoning in the FT on 15 December 2009 (thanks to fellow Linked-In users for this one). While this puny blog attacks the wanton irresponsibility of the number crunchers, he focuses more on the innumerates (more strictly speaking, the accounting illiterates) in banking for confusing profit with cash. Interestingly, he reminds us that the mega bonuses are not some necessary, systemic, motivator for the financial whizz kids but a very recent creation of the noughties greed bubble. Rock on. 

Restaurant: O Solar dos Nunes

The "Solar dos Nunes" is the real thing. This small but delightful restaurant in a residential corner of Alcantara, in the West of Lisbon, is Southern Portuguese gastronomy at its heartiest, most authentically rich and splendid best. The Alentejo - the large slice of Portugal which separates the capital and its Tagus river  from the excesses of the Algarve tourist region - is where I would most like to live. From the hot, red-earthed olive and cork oak groves on the coastal plains of the Baixo Alentejo to the string of glorious hill towns such as Évora and Vila Vicosa in the Alto Alentejo, it is beautiful, inspiring and largely unspoilt. The region is famous for pork, game, fish soups, stews, cheeses, sausages and much more. The Alentejo is also justly proud of its its heady, tannined wines, whose modernisation in the 1980s marked the rebirth of the Portuguese wine industry.

The menu at the restaurant is no disappointment. Acorn-fed Pata Negra pigs provide succulent smoked ham for a starter along with fat olives and cholesterol overdosed cheeses. You can then follow with one of the house specials - the intense Sopa Rica de Peixes (Rich Fish Soup), stuffed partridge or hare jugged with white beans. If you can manage it, after this most refined gluttony, squeeze in the Sericá d'Elvas com Ameixas (rich egg pudding with plums) or the even richer Encharcada de Mourão (more sugar, more eggs, more wicked).

Here light lunch is as nonsensical as Coca-Cola in a winery. Be prepared to allow at least a couple of hours (three is more relaxed) and don't even think about committing the unspeakable crime of not accompanying this gastronomical splurge with one of the outstanding Alentejan wines in their excellent list.

For a restaurant that has won so many prizes, it is not expensive. For around EUR 45 a head you can eat really well and drink a decent wine. Another EUR 10 each or so will get you a great wine and an even more memorable meal.

Books: "Mariana" by Katherine Vaz

I adored Mariana the first time I read it 10 years ago and have never understood why it wasn't a best seller. I just re-read it and loved it just as much. It is a wonderful, wildly imaginative read, even though it centres on a true story. Here I reproduce (lazy, I know) a review I posted on Amazon a few years ago.

The story of a 17th century Portuguese nun hardly sounds like inspiring material for a gripping historical novel. Yet Katherine Vaz overpowers the reader with the richness and humour of her writing.

I defy anyone not to fall in love with Sister Mariana de Alcoforado, an aristocratic girl sent to the convent at Beja in Southern Portugal because her elder sister married first. Mariana is still famous in Portugal - as she was throughout Europe in the seventeenth century - for the beautiful, astonishingly frank love letters she sent the French officer who abandoned her after a brief but all-consuming affair. While the letters, in a new translation by Vaz, appear at the centre of the novel and the effects of the affair resonate throughout Mariana's life, the book and Mariana are much grander and more powerful than a simple love story. The book deftly sets the true story of a nun's passion into the richly imagined details of the rest of her life, all against the background of Portugal's desperate struggle to free itself from Spanish rule.

Vaz's imagination and the extraordinary mixture of believable reality and wild spirituality match the best of Isabel Allende. Like Allende she leads us tenderly but mercilessly from scenes of delicious humour - the resurrection of drunken plucked geese, to wrenching courage - the old nun who goes blind playing her beloved organ all night during a battle. Throughout, the character of Mariana is indomitable, grabbing at joy, pain and love with arms wide open, as she inspires and enriches the lives of all those who come into contact with her, including this reader.

Food and movies

I just saw Julie & Julia.  Delightful film - not great but very enjoyable. Meryl Streep - up in my favourite women list with Isabel Allende and Ingrid Bergman - has real fun with one of the two lead characters. Point is, however, not the film but the food. Food is my greatest sensual pleasure - OK, second greatest - and the hallmark of a great film about food is that it makes me itch to go and cook. Julie & Julia is a fine celebration of cooking and eating. Of course, the masterpiece in this genre is the glorious Babette's Feast.  Anyway, here's one of my favourite easy but unusual recipes for chicken, You've got to love, or even be obsessed with, garlic, though. The original version of this comes from Elisabeth Luard's good but patchy European Peasant Cookery.

Garlic Chicken

6 heads of garlic

1 free range chicken, giblets removed

Sprigs of thyme or rosemary and parsley

Glass of dry white wine

Olive oil

Seasoning

A little flour.

You need a large casserole dish with a good lid.

Take the outer peel off the the garlic and separate out the cloves but do not peel off the papery covering on each clove. Line the bottom of the casserole dish with the whole cloves. Lay on the herbs - you can use others but avoid tarragon, which is wonderful with chicken but will swamp the flavour here.

Lay the whole chicken on top of the garlic and herbs. Pour over enough olive oil to cover the garlic and herbs (maybe about 300 ml). Pour over a glass of white wine, Season with pepper and salt

Put on the lid. Mix a little flour (about 2 tablespoons) with some water to make a smooth, fairly stiff paste. Seal the lid with this paste.

Put in a medium oven - 150ºC for about 1.5 hours

Serve with basmati rice - I like a simple pilau - and good bread to mop up the juices. Suck the buttery sweetness out of the whole garlic cloves. Don't eat this the day before an important business meeting.

Best records ever

Trite and predictable but I can't resist listing my best records ever (not just albums, since lots are classical).

Pop & rock & one jazz

Roughly anti-chronological

Favourite Worst Nightmare - Arctic Monkeys

Bahamut - Hazmat Modine

Gulag Orkestar - Beirut

Elephant - White Stripes

What's the Time, Mr Wolf - Noisettes

Best of Nick Cave and the Bad Seeds . Nick Cave & The Bad Seeds

Ten New Songs - Leonard Cohen

X&Y - Coldplay

Collected - Massive Attack

Nevermind - Nirvana

OK Computer - Radiohead

I'm Your Man - Leonard Cohen

Homem Comum -  Caetano Veloso

The Queen is Dead - The Smiths

London Calling - The Clash

Never Mind the Bollocks - The Sex Pistols

Steve McQueen - Prefab Sprout

Hallowed Ground - Violent Femmes

Almost Blue - Elvis Costello

Dread Beat an Blood - Linton Kwesi Johnson

The Great Van Morrison - Van Morrison

Broken English -  Marianne Faithfull

The Roxy and Elsewhere (LIve) - Frank Zappa

For Your Pleasure - Roxy Music
Next - Alex Harvey Band

The Best of Jimi Hendrix - Jimi Hendrix

Led Zeppelin 1 to IV - Led Zeppelin (4 albums)

Dark Side of the Moon - Pink Floyd
Close to the Edge - Yes

Live at Budokan - Bob Dylan

Songs of Love and Hate - Leonard Cohen

Songs of Leonard Cohen - Leonard Cohen

The Essential Miles Davis - Miles Davis

Classical

These are pieces rather than albums as such.

Britten - War Requiem

Gershwin - Rhapsody in Blue
Stravinsky - The Rite of Spring, Petrushka

Shostakovich - 5th, 8th and 10th symphonies, cello concertos, preludes & fugues for piano

Bartok - Concerto for Orchestra, violin concertos

Mahler - all symphonies, Das Lied von der Erde

Wagner - Tristan und Isolde

Debussy - La Mer, L'Après-midi d'un Faune

Beethoven - 7th and 9th Symphonies, Piano Sonatas

Mozart - Don Giovanni, Cosi fan Tutte, Magic Flute, Piano Concerto 20, Symphonies 38 to 41, Clarinet Concerto

Bach - Well Tempered Clavier, Cello Suites, B-minor Mass, double violin concerto

A Song for Francesca - Music in Italy 1330-1430 - Gothic Voices

Vivaldi - Mandolin Concertos, Four Seasons
Mendelssohn - Violin Concerto
Brahms - German Requiem, 3rd symphony
Franck - Symphony in D minor
Berlioz - Symphonie Fantastique
Dvorak - Cello Concerto, New World Symphony
Sibelius - 2nd symphony
Rachmaninov - 2nd piano concerto

Book: "Night Train to Lisbon" by Pascal Mercier

I admit I picked up this book by chance. With five minutes to pick three books in a “3 for the price of 2” offer in a London bookshop, the word “Lisbon” in the title and Isabel Allende’s quote on the cover “A treat for the mind. One of the best books I have read in a long time” got me (read my review of The Sum of Our Days to see how much I adore Isabel Allende). Well, it was wonderful serendipity.

This is a splendid book from a Swiss writer I confess I did not know.  Describing it as a thriller for the intellect sounds pretentious but is accurate. The story is curious: a profoundly staid, middle-aged teacher of classics in Bern suddenly decides, for only the flimsiest of motives, to drop out of his measured life, with no preparation and no explanation to anyone, in order  to follow the trail of a mysterious writer in Lisbon. The heart of the book is Raimund Gregorius’s quest to discover the story of this fascinating philosopher and how he came to write what Raimund feels are poetic and profound ideas about life and existence. Like many such quests, the real story is as much the transformation of the searcher as the revelation of the truth he seeks.

Surprisingly, for a book supposedly about the mind, this is a page turner. The characters are so intriguing, the plot twists so fascinating, that it has the quality of all great novels: you can’t wait to re-immerse yourself in the writer’s world each time you pick up the book and feel bereft when you reach the last page.

My only criticism is the translation from the original German. As a translator myself, I have sympathy with the poorly paid and over-stressed literary translator but, at the very least, the publishers should have taken more care with proof-reading and editing the English version. There are odd shifts between UK and US usage (either is fine but not both), occasional jarring literal translations and too many irritating typos. The translation is pedestrian but not crass and is heavily marred by editorial sloppiness. More importantly, this novel is very much about language and the communication of big ideas. I sometimes had the feeling that the poetry and brilliance of the German text were lost in translation. Having said all that, Mercier’s book is a delight, a work that will resonate in your imagination long after you have finished it even if, like me, you can’t read it in the original.

Restaurant: LA Caffé.

I like to freak out my more conservative clients and candidates at lunchtime by leading them into an upmarket women's clothing store. Only after wending past the chic children's collection do they spot the stairs going up to the LA Caffé* at the back. The concept derives from the Armani café in the heart of a fashion store and this copy by the successful Portuguese brand Lanidor is well executed indeed. There are three outlets at present: I will concentrate on the one near our Lisbon office, on Campo Grande (no. 3B) on the corner with Avenida das Forças Armadas. The one on the Avenida de Liberdade (no.129) is similar and there is another nearby - a tea room this time - further up towards the Marquês de Pombal.

The decor is important, for this is, after all, about fashion - it is sharp, light and invigorating. There is no piped music (hurrah!) but if there were it would be the cooler end of jazz. The service is pleasant and efficient. The food is perfect for a quick lunch, for even the most important of clients, which will allow you to concentrate back in the office afterwards. The theme is Italian bistro, the choices are innovative without pretension and the portions are small but not frugal. Serious thought has gone into the menu, which ranges from sinless salads and the simplest of pastas – the spaghetti alla carbonara is perfect – to hearty risottos and various duck and pork dishes. Yet each dish has an original touch, a tasty nuance, that reminds you this is real food and none is heavy-handed or ostentatious.

The wine list is brief but sensible. The puddings are a must and involve only the mildest of dietary sins. The chocolate muffins in a chocolate are more sensuously chocolatey than a Belgian boudoir; the mango carpaccio in a delicate baked custard is scrumptious.

You will come out of the restaurant only very slightly heavier and with your wallet only very slightly lighter. 30 euros will buy a good meal to delight your clients.

*PS The linguistic pedant in me can't resist a gripe. If a restaurant is meant to be Italian, why can't they do even the tiniest bit of homework and check that it is "café" in French but "caffè" (grave, not acute accent) in Italian. Caffé just makes me and, I daresay, Italians, wince. I am sad to note that LA "Caffé" is not alone in Lisbon in its slipshod pretensions. A case that especially annoyed me was a "Lisbonne Caffé" just on the other side of the street.This ghastly mess of a name managed to combine English word order with the French name of the city, Italian spelling of café and French accentuation - barbarians! It doesn't reflect well on me that I was hugely satisfied when the "caffé" closed down. Gripe over.

Book : "Dreams From My Father", by Barack Obama

This is an important book. It is not a presidential or even a political memoir, as it was written in 1995, 14 years before Barack Obama became President of the United States. It is, rather, an enlightening and moving insight into the black liberal experience in America and, of course, into the deepest parts of the now President's political and emotional psyche. Obama, then newly appointed as the first African-American president of the prestigious Harvard Law Review, bares his innermost feelings about his ambitions, race, inheritance and family as he traces his story and, in particular, his deepest roots in Kenya.

As a white European liberal, I confess reading this book was a revelatory experience. It is the first time I have truly understood the relentless burden that being black in America (or Europe, for that matter) represents: burden as oppression and burden as expectation. Not only is his mind crystal clear - and his writing both direct and breathtakingly poetic - but he also has the analytical advantage of coming to understand his heritage and place in American society as an outsider to the average black and white American cultures. He grew up with his white mother and ever loyal grandparents but his yearning was always for a solid relationship with his absent Kenyan father, a feckless and embittered dreamer who never really faced up to his familial responsibilities.

Obama's unassuming honesty is in many ways the most moving aspect of the story. At no time does he fall into sentimentality, simplistic analysis or self-justification. His description of his youthful dabbling with drugs, casual sex and radical politics and the consequent struggle to develop self-discipline and determination is unostentatiously open and heartening.  His longed-for trip to Kenya to meet his extended family in Africa neither extinguishes nor resolves his confusion about his heritage. Somehow, despite his wildly disjointed upbringing, he emerges from his search for identity as someone supremely at ease with himself, questioning his beliefs but not doubting who he is. In the end, he concludes that he is what he has created not what he has inherited. He is truly grown up - which cannot be said of either of his two immediate predecessors.

Most of all, Dreams of My Father, written without political intent or marketing spin, shows us beyond doubt that the US Presidency is, at long last, in the hands of a good, deeply intelligent and cultured man, driven in a human and unsaintly way only by the wish to do good and achieve great things for his country and his people, of all races. History will record whether he succeeds.

Restaurant: A Travessa.

Travessa do Convento das Bernardas 12 Madragoa - Lisboa

1200-638 LISBOA   +351 - 213 902 034                              www.atravessa.com

A Travessa has been my favourite restaurant in Lisbon since I first entered its first tiny, 6 table space in the Travessa das Inglesinhas (Little Englishwomen’s Alley) over 20 years ago. Its reputation and popularity have rightly grown and so, as result, has the space: it now spreads handsomely over a large part of the cloisters of an old convent further into the old Madragoa quarter. I am half Belgian and have lived in Portugal for most of my adult life, so the mixture of Belgian and Portuguese gastronomy in a delightful old setting is perfect.

Of course, it is the food that draws. The rich variety and succulence of the small starters and hors d’oeuvres, which appear on the table as you hum and haw over your main course or the splendid wine list, are almost a meal in themselves. The freshest and most original of breads with small dishes of heavenly gourmet olive oils from the Alentejo to dip them into, tiny mussels in the lightest of vinaigrettes, grilled peppers, small spicy sausages, pâté with onion jam ...it goes on. The main courses change each day but always include some Belgian favourites such as mussels, skate fried in black butter, steak tartare (actually the Belgians call it filet américain), boudin, as well as great – and super-fresh – Portuguese fish dishes such as grilled Dover sole and black grouper (cherne) in rice, or traditional meats such as black leg (Pata Negra) roast pork and grilled venison fillet with wild mushrooms. The wine list is comprehensive and thoughtful. The puddings are unpretentious and satisfyingly sinful.

Like the best of Belgian cuisine, this is high gourmet without pretension; like the best of Portuguese it is fresh  and honest. The surroundings are delightful – by a huge roaring log fire in winter, under sunshades in the patio in summer.  The service is outstanding. You’ll get a visit from the charming Vivienne, the Belgian owner and founder, and discreet advice from a knowledgeable wine waiter if you need it (I do).

It’s not a cheap restaurant but neither does it suffer from the extortion of the nouveau riche joints where the celebrities go. EUR 50 will get you an excellent meal, EUR 80 an unforgettable blow out. Go on, find something to celebrate with someone you love!

Book: "The Sum of Our Days", Isabel Allende

For the first fiction entry in this series, I just had to choose my favourite modern author. Isabel Allende is an enchantress of words and a mistress of the story. Here is another part of her sporadic autobiography, this time about her life in the United States. This is presented as a sequel to Paula, the extraordinary, wrenching account of the long death of her eponymous daughter but is completely different in tone and scope.

The Sum of Our Days is a comedy of character and of life. If we are to believe her – and I am determined to do so – her life is as rich and as wild as her fiction. Allende’s candour about herself and her family is both shocking and delightful. Her relationship with her American husband and with her children and all the rest of her tribe is always totally over-the-top, passionate to the point of madness. Her self-criticism is comically transparent – she describes herself as the mother-in-law from hell and one can believe it, though it makes hell seem so attractive. Like her novels, every word transmits her unending joy, even, paradoxically, during paralysing depression, in being alive, in being a witness to the miracle of humanity, of individuality, of love. But above all, this book is extremely funny and there are moments which made me laugh till I wept.

Read this book if you need to feel good, really good, about the world and about people. Surely, right now, we all do.

Restaurant: Eira Velha

Rua de Entrecampos 17A, Lisbon.  Tel: (+351) 217 974 960.

Open lunch (12.00-15.00) and dinner (17.00-22.00)  Mon-Fri, except bank holidays.

In this time of economic restraint, it’s good to find a restaurant where you get great food at a low price. This is our favourite, happily in walking distance from our Lisbon Office.

Good, honest quality defines this gem of a restaurant, tucked away behind the Avenida da República in central Lisbon. Don’t go for the decor or for a romantic or business tête-à-tête – the atmosphere is simple, crowded and, at the height of lunch, noisy. The food is outstanding and the prices astonishing. The fish is fresh from the boats and the meat chosen with tender loving care. Everything is cooked simply – no masterful sauces here – but to perfection. After all, why ruin a plump, juicy line-caught Dover sole (Linguado de Anzol) with anything other than a splash of olive oil and lemon and a few slices of garlic? What’s more it will only cost you 8 euros.

The portions are generous and prices include vegetables. All the fish is good but we especially recommend not only the sole but also the sea bream (Douradinha – 6 euros) and the salt codfish baked in olive oil (Bacalhau a Lagareiro – 8 euros). The meat dishes are also excellent, in particular the succulent pork fillet from free-range, acorn-fed pigs, (Secretos do boloteiro grelhados à Eira Velha – 7 euros) and the roast kid (Cabrito assado no forno – 6 euros). Accompanying vegetables are cooked, like the fish and meat, just right – fresh and juicy with the perfect hint of resistance, a welcome smidgeon past “al dente”.

The wine list is just fine: good wines at an honest price.  5 to 10 euros a bottle will bring you some excellent selections. To finish off, don’t resist their home-made chocolate mousse (Mousse de chocolate caseira -  2 euros), which we reckon to be the best in Lisbon.

Book: "The Oxford Book of Science Writing", edited by Richard Dawkins.

The most important word in the title is the last – “writing”. Dawkins’ defining criterion for selection is the quality of the writing. From the giants – Einstein, Crick  and Leakey to name but three –  to those merely sitting on their shoulders, every entry is a linguistic delight. I defy anyone, however, uninterested in science, not to be moved by the passion, imagination and delight of the scientists here talking about what they love. There is something for everyone – cosmology to entomology, genetics to consciousness, the periodic table to the meaning of mathematics.

As with everything he does, Dawkins, himself a giant of genetics, is always supremely confident and this is both good and bad. On the one hand there is a notable bias to subjects related to his own – genetics, evolution, biology. On the other hand, his comments on each entry are sometimes outrageous, often brilliant, always beautifully written and sometimes even better than the article they accompany. The only shame is that he modestly (not an epithet normally attached to him), refuses to include any of his own extraordinary work.

This is a book for dipping into and savouring the odd tasty mouthful or, for avid science fans like me, devouring whole. Above all, this is a celebration of the glorious wonder of science, the breathtaking beauty that awes great scientists in the world they examine, whether it be massive black holes or invisible bacteria. No book-lovers’ collection should be without this book.