Slightly dubious finance

It seems that Birmingham Midshires, part of Halifax, part of the HBOS group, is a bunch of bankers.

They seem annually to invent a new sort of savings account, with a name very similar to their previous sort of savings account and a reasonable headline rate; the financially credulous such as myself assume that the account they had already now pays the new rate.

In fact, it turns out that I have a 'Birmingham Midshires Internet Easy Access Issue 6', which pays 5.8%. What they offer on the front page is a 'Direct Internet Savings Account', which pays 6%. There is a limited amount that it's worth worrying about twenty basis points (and I might as well worry about forty-five and move to Sainsbury's Bank), but I feel I should bank with people who don't try to pull that kind of fast one.

Of course, possibly banks which act always in the best interests of their depositors tend not always to give their depositors the best available interest; also, whilst I don't think the present turmoil is the kind of thing that will break savings rather than investment banks, perhaps moving my life savings around during a liquidity crisis is not pure wisdom.

More slightly dubious finance

Mining companies.

I thought I just about understood mining companies. You own some unprepossessing land in Australia, or Kazakhstan, or Chile, under which are rocks made of copper. You buy incredibly expensive machines for grinding the rocks to impalpable dust and getting the copper out. You sell the copper. You pay royalties to the government whose land you own, which they invest wisely in upgrading the railway from Alice Springs to Perth.

Machines wear out on a fairly well-understood schedule; copper is needed both in things that people want, like iPods, and things that people need, like washing-machine motors. In the long term there's the risk that you might find new copper mines more slowly than you use yours up, and there's the risk (faced by mercury miners) that demand might change in secular ways; on the other hand demand might change in other ways - ALCOA used to give away lumps of gallium in the hope that someone find a use for this critical component of microwave amplifiers for mobile phones. But if you're a big miner you might well have a copper mine, an iron mine, a mercury mine which you closed in 1995 and an oil well, and a small amount of funding to a bloke in a back room at CUED perfecting the electrolytic refinement of scandium; as copper gets replaced by plastic, so money that would have gone in your copper purse ends up in your oil wallet, and as people start wanting even lighter, fuel-efficienter aircraft made with aluminium-scandium alloys, so your bloke in the back room at CUED gets to buy a big house in Cherry Hinton.

Over the last few years the shares of the big miners have gone up significantly, with the usual justification being that China has lots of people, and lots of them will want houses, in which are copper pipes and copper wiring.

China still has lots of people; it is not clear that fewer of them want houses in the middle of August than wanted houses in the middle of July. So why have the big miners usually been the reddest and most plummetting shares on the LSE when the LSE goes all red and people start watching Liverpool Street for falling bankers?