Wednesday 28 February 2007

Is The End Nigh?

Stock Markets around the world suffered huge falls yesterday. All triggered by a near 10% fall in the Shanghai Stock Market.
The falls were so rapid that the traders were unable to complete deals yesterday, meaning that the trades will have to be done today and so the markets will suffer equally sharp falls today.
Will this trigger a downturn? I think it might, as all the ingredients are there for a slowdown in the world economy. Even the venerable Alan Greenspan said only on Monday that the US was in for a recession. When the US has a recession, so does most of the world.
The imbalance of the carry trade (this is the rest of the world borrowing from Japan at 0.5% interest rates) has helped to boost markets, but the position has to be 'unwound' in the long term as it boosts excessive risk taking. In the US and UK the asset bubble caused by the cheap money, in houses, equities, minerals and even money (in the form of consumer credit lending) in fact in almost everything, has helped maintain a frothy economy despite many of the fundamentals being wrong. For example, the high UK tax burden should have held our economy back recently, the carry trade explains why not, along with cheap goods for China that it finances which hold down our inflation.
If the Chinese Government does intervene more in its burgeoning economy then this trend will last. In some ways to get the pain done now in a short slowdown is better than letting it carry on for another year.
However, if you have investments in ISA's and other liquid assets, think about doing something. When the markets collapse if you sit still you lose the most. Think about switching to cash or defensive stocks if you can.

Tuesday 27 February 2007

Government spin Murdoch

The Government have today taken up the powers of the 2002 Enterprise act to order an investigation into BSkyB's purchase of a 17.6% stake in ITV (here).

This is despite the fact that the OFT already have an investigation going on into the purchase. So now taxpayer's are paying for 2 separate investigations into the ownership of BSkyB.

No doubt Alistair Darling is hoping to make a Government 'stand' against Rupert Murdoch; just a few months before Gordon Brown assumes the Premiership and Darling himself becomes Chancellor. This stand against evil Rupert will no doubt go down well with the Labour Troops.

However, under the recent Communications act the Government cravenly allowed companies to buy into terrestrial channels. This was to allow Murdoch to buy into Channel 5 - indeed it was christened the Murdoch Clause. Now that Murdoch Junior has abused this the Government are able to feign injury.

Not riled enough is my bet for anything to happen. Everything BSKYB have done is legal and Virgin Media are just bitter. So this is all about grandstanding and points scoring; but don't worry, it is only taxpayers who have to foot the bill.

Sunday 25 February 2007

Sunday Business News Round-Up

On Ellee's advice, I present below some key stories from the UK Sunday broadsheets:

Private Equity as ever features strongly this week. The Sunday Times can't seem to make up its mind. Commenter John Warples thinks its PR is bad, but that it is a force for good; meanwhile Debenham's , now floated with its PE team in charge, continues to abuse the market. The Observer continues the theme with a story on PE executive pay; what a surprise for them to focus on this? The Sunday Telegraph is on on the act too by reporting , with others, on the proposed TXU take-over; the largest yet by PE houses.

The Times too carries the slowest and dullest story ever on 'open-skies' talks. These have been going 20 years without success. Other standard stories are of the growth of Asia, this week the Telegraph's piece is on the proposed listing in London of a Communist party paper. Also the Independent there is a usual story about how Iraq is all about Western greed for Oil.

However, the generally pro-Labour paper saves its best piece for the key story of the week; Gordon Brown's £10 billion red tape extravaganza which is throttling UK businesses. The Observer shows a classic of this kind with its story on Travel Insurance mis-selling. Even the Left though have been able to see what a total mess of pensions Broon has made, with two stories this week in the Observer; one comment piece and one report on the high court pensions decision of earlier in the week.

Overall not the most exciting weekend of reporting this week. The Private Equity story is building more these days, just in time for the bust probably. There is little news on the real stories about inflation, interest rates, personal credit collapse and the over-heated property market. I await next weeks news...

Friday 23 February 2007

A different take on Road Pricing; UK Transport

Given Tony Blair's email response to the road pricing petition on the No.10 website there has been much reflection on the issue of transport in the UK.

No doubt, there are many reasons to be against road pricing and it does not surprise me that the feeling against it is so strong. 85% of UK passenger Journeys' are taken by car; so any tax raid on this element of our life will no doubt be resisted.

However, the Government is in a bind. The Eddington report, which I discussed last year ,has left a number of dilemma's. Air is the best solution to inter-regional travel and is the least expensive but has 'environmental' effects. Rail has had £12 billion a year invested since Hatfield, but capacity increase has been minimal. The roads meanwhile make do with £660 million invested in the Highways Agency, whose existence is now under review by Shriti Vadera at the Treasury.

Even if the massive investment is rail was to double capacity (which is very unrealistic) then this would only have a 3% effect on travel outcomes in the UK. Whereas a smaller investment in road capacity and improvements would have a vastly greater impact on the 85% of all journey's taken.

The case is clear for more road investment is undeniable. Fuel and Motoring taxes generate over 12% of government income, yet total transport spend is 4% (see Treasury Stats).

A future Tory government must grasp this nettle; road pricing or not the roads that are the lungs of our economy must be heavily invested in and the relative waste of resources plunged into Rail must be cut. Failure to do this will increase the transport chaos we face, which is why Labour's policy has been such a failure for the past 10 years; you can't ignore the economic realities and replace them with wishful thinking.

Thursday 22 February 2007

The Future of Blogging

In Egypt a blogging student has been jailed for criticising Islam and their President. He has now to serve 4 years in what I imagine are not very pleasant conditions in Egyptian jails.

More worryingly, Broon is looking for ideas for his 1st hundred days; I hope he does not see this....

Victory for the Pensioners in battle, but a War Lost.

The Government has failed to escape the Courts' after all and is now going to have to pay the legal bills of those pensioners protesting at their harsh treatment at the hands of the Government.

The Government is clearly concerned at the cost to the taxpayer of potentially guaranteeing all failed pension funds.

Perhaps they should have thought of this before the £5 billion a year tax raid that has so undermined the pensions industry.

Also I see a long-term view taken by Labour here; after all, these people are now poor and dependent on the State for their future well-being?

Are they going to vote for any party that suggests reducing the size of the state?

Tuesday 20 February 2007

City Bonus's - let them pay for our failure

A first for me, a link to The SUN.

Basically, an aide to the Mayor is jumping on the Hain bandwagon and suggesting a windfall tax on City Bonus's.

This is of course economic nonsense; but then to add insult to injury he suggest this money could be used to fund the Olympics.

So in short, the uncosted and untested project for the Olympics, never put to the vote, should be paid for by City worked who have probably worked 16 hour days for years to earn their cash.

This idea is somewhat underwhelming to me. As a point of record, I am not a recipient of these payments; yet I do see what people to do get them. It ain't pretty and it ain't nice. Only last week a young lawyer got so stressed by it all he jumped to his death in the Tate Modern.

But then spending other people's money is what socialists preach best of all. Time for us to get rid of Ken and his ilk.

Sunday 18 February 2007

Sunday Business Paper Review

As promised a few weeks ago.

This is not a review of the news today, but of the general coverage of 'business' news in the Sunday papers over time.

Firstly, I happen to think that the coverage is overall actually very good. considering the natural secrecy of corporates, particularly private equity and venture capitalists, together with their easy access to expensive lawyers, a lot of information comes out to us. in fact, with the standard so high I am not surprised the Sunday Business did not make it.

Some of it even within a decent enough timescale to help with buying or selling shares in the market. Having said that, the real money is made these days by the in-house desks of investment banks; if you think that staying up with events by reading newspapers business pages is going to keep you informed enough to compete then think again.

Anyway, enough pre-amble, here are my musings:

1st Place: The Sunday Times, this is quite surprising for me. The daily edition of the newspaper is terrible in its business journalism. Clearly, they have a different breed of hack for the Sunday's edition. The weekly take on a big story is often insightful and balanced. The long interview with a CEO, although fawning, at least provides some depth of character. The columnists are pretty good; except for Irwin Stelzer, but I find him quite funny, similar to The Hitch.

2nd Place: The Sunday Telegraph, it was close. The ST is a good read for business, full of depth. Dan Roberts, the editor, lacks punch in his columns though and is too generous his targets. Always a hard call for journalists that but he falls the wrong side of the line and leads the coverage this way. However, the ST has the best business website by far, better than the revamped Times.

3rd Place: The Observer, As with the weekday output at The Guardian the depth and quality is of a high order. You will be surprised no doubt to hear that I don't buy it often, so to read it as part of this review I found insightful. I don't think the business hacks can have much in common with the others journo's at the paper. They are balanced, insightful and pay less attention to to the Unions than you might think. So what is wrong? Ina word the coverage is great, the columnists are really bad. I give you George Monbiot, moonbat king and Larry Elliot, economics editor for Pravda.

As for the other broadsheets; The Indy, has good detail but such a tilt to the left (today's is a great example) that balance goes out of the window.

The tabloids are somewhat easier, as they don't really have any serious business focus. The MOS, does not even have any information online. In the paper itself a couple of derisory pages are followed by concerns with mortgage rates as you would expect!

The Express, News of the World and Sunday Mirror are all equally worthless; but then they have more serious material to cover.

What do you read and what are your views?

Thursday 15 February 2007

Work interrupting with Blogging

So posting will be light. This week I have mainly been reading:

Croydonian - The place where elite commenters such as Verity, Nick Drew and Hatfield Girl make their play....
Newmania - A winding road through Conservatism and Islington
James Higham - As always, nourishing obscurity.
Ellee Seymour - The latest from the world and the blogsphere.
Peter Hitchens - *cough* comedy blog-stylee
Mr Eugenides - Always a fine read for mastication of Government Ministers.

so go surf in awe.....

Wednesday 14 February 2007

Valentine's Day Massacre

Bah Humbug. last night Slicker was in a queue 50 long to buy a Valentine's day card in a shop near Charring Cross. My devotion to corporate marketing disgusted myself and I came up with the following equation:



(This is Don Lewin, CEO of Clinton Cards, looking Smug)

Not very exciting, but a great testament to the power of corporate marketing. Valentines day is a UK tradition, taken to the USA and from there exported around the world. Even countries such as Japan have been infected with the need to buy cards. Although in Japan the women buy chocolates for all their male colleagues at worked. As ever they take a western idea and improve upon it.

However, in Sri Lanka the normally timid Buddhist leaders have spoken out against the 'Commercial Conspiracy' that is Valentines day. Iranian hardline leaders do not favour the day either, but as usual it is very popular in Iran.

From an economic perspective, Generally Awesome has some good tips, albeit too late. If your relationship is in trouble then a pre-Valentine's break-up is the best for financial and emotional security.

Finally, I would tip Hallmark and Clinton Cards, except that I can't and it is too late anyway. Florists have their best day of the year too, so sell shares today as they may well have peaked.

Perhaps look to buy before their next marketing scams such as Mother's Day. Hallmark's turnover is now $4.8 billion; a pretty good commercial success I would say.

Tuesday 13 February 2007

Time Wasting

Inspired by DevilsKitchen and Tom Paine I wasted 42 seconds of my life filling this in, very rewarding it was too.

Your Vocabulary Score: A

Congratulations on your multifarious vocabulary!
You must be quite an erudite person.

Sunday 11 February 2007

Party Funding: End Game?

So the final discussions of Sir Hayden Philips with the political parties have been leaked here, to the Sunday Times.

My reaction; Non-plussed to say the least.

In a very predictable cosy stitch up the main proposals are for 60p per vote for Westminster elections and 30p per vote for European elections.

The cost of this is said to be £28 million a year. Typically there is an immediate underplay of the hand here as of course a reformed House of Lords will add another 30 million or so votes into the post and increase this figure to more like £40 million.

Donations to parties are set to be capped at £50,000. So What, I say? All this will do is increase soft money and other ways of donating. I like 18 Doughty Street and think it is great, but it is also the first real appearance of soft money campaigning in the UK.

Finally, parties are only eligible for money is they have at least 2MPs, (Elected Lords?), MSP's or Euro MP's. So the main idea seems to be to keep the Status Quo. In fact it promotes the government by giving them more money by right than any other party. Thus those in and around power wish to perpetuate their own system.

All at our expense. I feel the need for a Downing Street petition, but to what effect?

It is a sorry situation all round and I welcome any ideas for how we can protest further.

Thursday 8 February 2007

'The Strongest economy in our country's history' says Tony Blair

OK, so Prime Minister's Questions is not renowned worldwide for the trading of a factually correct information, but this outburst by Blair, in support of Brown, is beyond belief.

Before examining further, it did get worse;

"This chancellor has produced the strongest economy, the lowest interest rates, the lowest unemployment, the highest employment, in our country's history," said Mr Blair.

This requires some understanding of the terms, as well as what has been ignored, to understand the depth of the rubbish being spouted here. It is the equivalent to seeing entire air-fleets of pigs flying in V formation over London.

So from the beginning; the strongest economy. Since 1997, average UK growth has been 2.6%. This is in line with the long-term trend started after the Thatcher economic revolution in 1983. However, at the end of 2005/6 general government debt was £529.1 billion, equivalent to 42.1 per cent of GDP (here). So alot of this growth has been funded by government debt. This is before we add PFI projects into the mix; this would change skew the numbers even further (see Wat Tyler)

Of course we will always have a historically, by numbers, 'the strong economy.' This is due to inflation. But say in 1850, the UK have 50% share of global GDP, today we have 5%. IS our economy the strongest it has ever been?

"The lowest interest rates" well last month the bank of England raised rates to 5.25% and they are heading upwards. So this statement must be a non-sequitor. A few years ago we did briefly have low interest rates and low inflation - but this has all changed radically with both heading upwards quickly now. Real Inflation RPIX is at at least 4.4% currently.

"the lowest unemployment" - so is this true in that unemployment peaked in 1993 at 3 million and has declined ever since. However this effect has bottomed out in the last 2 years and unemployment is now creeping up again. The other part Mr Blair ignores is that those on benefits, including sickness benefits, has shot up. This skews the unemployment figures and shows how much is now hidden.

"the highest employment" - again similar to above, with a growing economy and growing population it would be difficult to see how you could have anything other than this term. he is in effect congratulating Mr. Brown for not overseeing a huge recession. Also of course the 500,000 immigrants who have found jobs in the UK since 2001 help this figure; but what other effects do they have on our society?

No wonder people don't take Blair seriously, as can be seen he just misquotes and fibs openly in Parliament. Time to go with Broon to follow swiftly after. Sadly, I think I may be referring to this post in a year or so's time as the recession sets in....

Wednesday 7 February 2007

Desperate times still for the British Army

It seems nothing can stop the troubled times for our armed forces, globalisation is affecting even the army these days and the government is not to rely on Chinese mercenaries.....

Tuesday 6 February 2007

UKIP has become TIP

..but are their policies just the left over, slightly rancid, rubbish that no one else wants anymore but can't find a place to borrow?

over to the great DK for a riposte.

Campaign worth backing

I blogged recently on the disaster awaiting is in the form of State Funding for Political Parties.

This coincides with a new Doughty Street 'Attack Ad.' I have mixed views on these ad's so far. The tax one was a good idea and worked quite well until the end, but really I have not seen the commercial of political benefit in them yet....but this changes today.

The new ad, on 'State Funding' is a great leap forward. A worthy campaign too, as the Main Stream Media are too pre-occupied with John Reid's latest insane-idea-for-the-day.

Backed by Philip Oppenheimer money (he also sponsors a good sight, which is remarkably detailed and considered given its not so subtle agenda).

Have a look, have a think, start telling everyone. No more money from taxpayers for the politicians, make them earn their own corn like the rest of us.

Sunday 4 February 2007

Praise indeed for Guido Fawkes

As if by magic, while hunting for links for another post (I'll save that one for another day) I found this:

Dear Dr. Guido,
I thank you very much, also on behalf of our Managing Director Dr. Keitel, for the forwarding of your book on the Hitler bunker. As we could evict, our indications have been only a supplementary help.
Thanks to your work, has been written a book on the Führer bunker able to answer to many demands, up to now outstanding. Of particular aid have been the maps, the photographs and the graphics, compiled by you, that give to the readers a vision of the site and the architecture of the bunker. Moreover, the documentation concerning the relationship established after the end of the war around the bunker has given rise to our interest.
We congratulate you heartily with the hope and firm belief that many readers will think the same and that will be able to appreciate your deep work.Best regards.

Jutta Hobbiebrunken - Director of Communication HOCHTIEF
( HOCHTIEF is the company that built the Berlin Führer bunker, in 1944) November 2002

I could not agree more, Jutta. However, I wonder whether you look identical to the man in the picture?

Friday 2 February 2007

A Pyrrhic victory in Cash-For Honours

First of all, if I lost you already.

Anyway, as Ellee says, what a week for right-wing blogging. Guido and Iain leading the news agenda of the MSM with the Smith Institute scandal (Guido) and the Tax Advert on by 18 Doughty Street.

Yet the biggest story as been the continuing Cash for Honours scandal (If this is really a scandal, this just has not been looked into before in such detail methinks).

Seeing Blair, shorn of all credibility and pathetically going on Today this morning (transcript here) to announce nothing more than he as still living in 10 Downing Street, had me laughing and full of glee.

Yet on reflection I am worried. At the back of my mind I wonder what Sir Hayden Phillips is thinking about all this. His weak and ill-considered report has been under attack by all the political parties.

Unsurprisingly, they all want more of our money to pay for their spinning and campaigning. The fall-out from Cash for Honours is likely to be they get their wish granted.

This is most distressing; we rid ourselves of Blair, Broon is hopefully hobbled and yet it will still cost us money. Tax-payer funding will also ruin our political system, ensuring legions more of unworldly, inexperienced political apparatchiks become our leaders.

Thursday 1 February 2007

How long for Blair?

Cameron demanded him to leave yesterday, the papers were all full of it today, even the police seem to be chipping in with handy leaks.

So how long will Blair stay? I think my clock saying May 5th will still be proved correct. The man wants a 'legacy' and in his desperation will keep firmly in Downing Street.

He still has a few institutions of our country to ruin, the latest 'renewal' to be focused on The House of Lords.

Yet still I think he is a better option than Mad Gordon; that tax-raising maniac could be the end of us.

I can only therefore conclude with;

Tony Stay! Tony Stay!