Dear friend,

Two irrelevances:

Irrelevance number one.

My wife is Spanish and hates the BBC, the UK’s public-funded state television and radio network.

When I say she hates the BBC, what I mean is that she hates the compulsory television licence used to fund it. Every household in the UK that owns a television must buy one of these pieces of paper at a hefty annual cost of around $200.

As far as I know the UK is the only country in the world that goes in for this sort of thing. In return for this the BBC has a charter to provide good service the consumer and doesn’t run adverts to spoil the public’s viewing pleasure.

But it is rather sinister in the way it tries to scare the populace into paying up for the licence, regularly running unpleasant Big Brother-style advertising campaigns. These tend to imply that if you don’t get a licence they’ll be onto you like a shot and have you in a forced labour camp until you pay up.

Anyway, being used to free television, my wife doesn’t understand why the BBC can’t run adverts, stop trying to scare us and cease to be a financial burden on our household.

She seizes upon any negative to reinforce this conviction — and last night she got some unlikely ammunition in the form of irrelevance number two.

Irrelevance number two

Last night on the BBC’s flagship evening news programme, as near-civil war raged in Iraq and the foreign policy debate twisted after the US mid-terms, the BBC devoted a full five minutes to the death of a horse.

Of course this was no ordinary horse. It was a much-loved racehorse called Desert Orchid (or Dessie to his friends). The British people loved Desert Orchid because he usually won.

Betting on Desert Orchid in his prime in the late 1980s was a near dead-cert for punters and a nightmare for bookmakers.

They still had to quote prices on all the horses or lose their reputation — but for some high-profile races they knew they were in for a financial clobbering if Dessie romped home — and romp home he usually did.

I’m no horse racing fan, but even I had heard of him. The whole country had a lot of fun making a few pounds at the expense of the unloved bookmakers.

With horse races writing a balanced book is dead easy — in theory.

Until a horse like Desert orchid comes along and makes it almost impossible.

So underwriters — beware Desert Orchid-type risks if you possibly can.

But I suspect no amount of modelling or ERM will help you avoid the big one when it comes.

What did my wife make of it last night's offering?

"The BBC is crazy! $200 for news and they tell me about a horse!"

Not even Dessie could win them all!

R.I.P. Desert Orchid – the four-legged Cat loss