Thursday, 29 March 2007

Yesterday's News Tomorrow

I have been beaten to my post on Charles Clarke's RTS Speech by both Ellee and Nick Robinson; however, I was at least there so will blog my view of events as a hopefull useful addition.

Firstly, I did nothing to embarrass my self or any of the other people there. it was packed with media luvvies as you would expect; but there were at least some interesting and influential people in the audience who asked some good questions.

Overall, Clarke is a man if quite impressive intellect. of course his political views and conclusions are not my cup of tea; but his grasp of the subject and ability to answer long questions in detail is a difficult task that he did well. The waspish Alistair Stewart as host was a less useful interlocutor and he revealed at the beginning what old chums they were from 1960's labour politics.

Anyhow, Clarke's main contention was that the media has grown all powerful. he admits that Blair met with his team after John Smith's death and stated he would become leader of the party and the country by 'using' the media. Clarke is wounded by the 'damage; the media did to his beloved Neil Kinnock (blimey!). He praised Blair and his gruesome twosome for controlling the media.

Of course, not that the media have found out the New Labour control tactics, Clarke does not like it any more and instead asks for more regulation and a change in the press. He admits Labour has to change, but it is more the media's fault.

To me this just sounded like sour grapes; not an unsurprising conclusion about recent speeches from Clarke.

Two points he made though did stick;

1 - the 24 hr news agenda means that Sunday Programmes and the like are always just fishing for soundbites and this destroys their credibility and purpose. This is something I agree with and the pathetic attempts by some of the producers present (none over age 19) to defend this just helped Clarke's case here.

2 - He said history was littered with front running politicians who the media have slayed at the last hurdle, most recently he cited David Davis. He was very keen on Milliband standing or perhaps even himself and fancied someone would stop Broon.

We can but hope he is correct.

Tuesday, 27 March 2007

Light blogging, snowed at work

when is tax freedom day again...?

Slicker is going to the RTS event with Charles Clarke tomorrow; New Labour and the Media 10 years on.

Ideas for suitably inflammatory questions please.

CC pushed a lady over in front of me at Blackfriars station earlier this year, so I want to extract some humiliating revenge...

Monday, 26 March 2007

Gordon's impact on your property choices

I like this piece from the propertyfinder blog, It shows a great example of a Labour stealth tax.

You can see so clearly the effect of tax since 1993 to the present day. It is also a great example of the effect Brown has produced by not keeping taxes up with rises in prices; The same will apply to your wage thresholds and a myriad of other things Gordon has tinkered (or not!) with.

Back under a Conservative government, the tax was a small element of the cots of moving. It it had kept its relationship in the same way today it would only cost £5000 to move instead of nearly £10,000.

As I live in London, these numbers are a vast under-estimate anyway for the region, as many properties cost over the £250,000 mark and then the 3% stamp duty kicks in which really bites.

What a deceptive way to raid us for failed NHS projects and subsidies to French farmers....

Sunday, 25 March 2007

Sunday Business Review - 24/3/07

A linkfest to the 10 most interesting Sunday Business stories in UK papers:

BP to stay in Russian investments - John Browne thinks a chat with Putin is enough. I am not sure Browne's successor will be pleased with such a high risk strategy.

UK business tries to get in on Nuclear Act - A long way to go to match their state-owned EU competition though.

A new world of Open Skies - I was as wrong as always, still amazed that this was signed!

Sub-Prime mortgage fallout out bites UK - still think House prices are going to keep going up?

A good Budget for poor people - from the Guardian Media Group ( now part owned by a PE house!)

Budget a miss - from the Torygraph.

Media Giants start to fight Google - the Times has a positive view of NewsCorp's strategy, as you would expect.

Satellite's still a dog investment - With such high capital requirements, they won't be relocating to the UK anyway after Broon's budget....

The Indy still goes on about green business - An interesting read as it shows why the lack of market forces will stop any major changes to our energy supply. Yet their solution is to regulate, not to marketise?

Another interest rate rise due? - first of several I think , all the models have oil falling in price and so weakening inflationary forces. But if this does not happen, then rises are guaranteed.

Friday, 23 March 2007

Challenge to DC

So at the end of the week it is time to take a step back and consider the future.

Broon has not done so well out of his budget that it is going to secure his premiership. I wonder what the next set of polls will reveal as to his popularity.

However a much worse week for the Tories. Out thought on the budget and shown one more that Labour are masters at stealing their policies.

One thing sticks out to me though. George Osborne has had his day as shadow chancellor. To be fair Broon is a formidable opponent with unprecedented experience; but Osborne has had no radical answers to offer when the country is crying out for it.

I would like to see William Hague appointed as shadow chancellor when the re-shuffle takes place. The reason this is a test for Cameron though is that it will be hard for him to dislodge one of his inner coterie. He needs though to think through the best team to carry the Tories forward in what could still be, even only remotely, an election year.

Tough choices to make, but I don;t think it has worked for Blair in terms of delivery surrounding himself only with his favourites; it gives a government too much inertia.

Wednesday, 21 March 2007

Budget thoughts...

It's late, been working all day since sunrise and more tomorrow so only a few snippets. I see Dale has a good view on the budget and plenty of stuff. More on Doughty Street too which I have on at the moment. Chris Dillow makes some good points, as ever does Wat Tyler.

So my few musings...

1 - In the small part of the speech that I heard today Brown said that this budget was broadly fiscally neutral. So in English that means taxes have gone up a bit overall.

2 - So clearly, all this nonsense about tax cuts is just that. It is noticeable too that some of the proposed 'cuts' or changes are for 2009 or even 2010. Beyond the life of this parliament and hopefully his government. This really is disingenuous politics of the first order.

3 - I am worried though if the media let Broon get away with this sort of lying rubbish (and robbing the poor too!) then the Tories are in for a tough time. Serves them right for being so weak-kneed on tax cuts themselves.

4 - The spending taps to the NHS and Education are still on. This worries me as it is not investment. All the money goes on salaries, pensions and perhaps some failed IT projects. This is money thrown away, all the while the public debt of the country is rising and not being paid off. A sensible government would have a huge surplus now to help come with the coming downturn.

5 - Finally, it is clear to most economists, the bond markets and equity buyers that the world economy, led by the US is going to slow. But not the UK according to magic Gordon?

Shot across the bows of Broon

All over the financial pages the last 2 days has been the proposed merger between Barclay's and ABN Amro.

The latest news suggest that Barclay's is making some serious 'concessions' to get the deal done. However, as usual the Beeb and financial press are missing the obvious. Of course Barclay's may want to move its HQ to Amsterdam to secure the deal. However, you may note that it will also escape the new Broon tax regime and put some distance between itself and the FSA.

Perhaps our often crowed about dominance of the European financial markets is a little weaker than we think. Only recently HSBC threatened to move back to Hong Kong because of high taxes too.

Monday, 19 March 2007

Budget preview

Well I know the budget is only on Wednesday, but I thought it may be a discussion worth having to see what are the treats that Gordon Brown has in store for us tax payers.

At times such as this we need to turn to tax accountants and economists, who have so much skin in the game for a decent look at the prospects for the budget given current economic conditions.

I start with the E&Y view, two horrid ideas here. One is actually extending the reach of Inheritance tax (rather counter to the views of Nick Drew). This is as always a nice socialist and regressive tax.

The second key idea is a new 'planning gain' tax. This is a tax on property where the planing permission has been changed. As such it is a tax on future development. This will utterly stymie the small property developers in favour of large ones. it is also an extra tax as large developers already sign bribes in the form of section 106 (e.g. you can build houses but must pay for a bypass too etc.)

KPMG's view on the state of the economy is as follows:

"There will be questions about the next cycle however. Since the early 2000s, public spending has risen at a much faster rate than the economy as a whole. But without higher taxes, this leeway has been used up, particularly now that public debt has risen to within a few percentage points of its 40 percent of GDP ceiling.

Consequently total public spending growth is slated to slow sharply over the next four years, to below the rate of growth of the economy. Education is expected to be a priority although we will probably have to wait for the Comprehensive Spending Review in the summer for full details of the allocations to health, alleviation of child poverty, etc.

Even this projected squeeze on spending still leaves the public finances looking tight and although there is no immediate need to raise taxes, equally there is no scope to cut them."

PWC have a great predictions website, two of their highlights are the possibility of further green taxes on cars and new taxes for carbon consumption. The Chancellor knows a helpful bandwagon when he sees on.

Finally, Deloitte's Roger Bootle is quite scathing about the state of the economy. he is brave enough to state that the real GDP deficit is more like 90% rather than the 37% the Chancellor fictitiously maintains and also notes taxes need to rise by £10 billion.

So what do you think? My prediction is for more stealth taxes as the Chancellor needs a war chest. He can't go and become PM without any money for baubles to offer. So he will store them up now and try to hide behind all the other mess that Blair and crew are creating.

Mostly, we will be poorer by Friday.

Sunday, 18 March 2007

Sunday Business Round Up 18/3/07

The ten best stories rounded up from the Sunday Business Sections:

Barclays/ABN in merger talks
- now this would be a mega-deal, nearly big enough to sate Bob Diamond's mega-ego.

Brown to offer benign budget - A nice thought and a considered piece, but I doubt it...

Open skies agreement to be stymied
- mutatis mutendes.

Irwin Stelzer hates Greens - Well he should tell his friend Mr Broon in stronger terms then.

Brown to end workers rights - eh? Don't believe everything you read.

Pensions scandal shames Brown
- even The Observer can see this for the disgrace that it is.

Sainsbury's move to towards sale to Private Equity inches on - It is not a business round up without a hat-tip to Private Equity.

Online fraud grows - more care needed with your own finances?

The Pru still does nothing radical- just like last week.

Nuclear decommissioning tender - Interesting that all this work has to be done by foreign firms, some even state owned!

Happy reading.

Saturday, 17 March 2007

A sane view on Global Warming

I saw this morning on the BBC, of all news outlets, a package describing some recent statements by UK based scientists. At last some people who can make sense of the furore of the last couple of weeks.

See here for the BBC report, but I have some of the key quotes below:

"I've no doubt that global warming is occurring, but we don't want to undermine that case by crying wolf." said Professor Collier of the Royal Meteorological Society

This view is shared by Professor Hardaker, the society's chief executive.

"Organisations have been guilty of overplaying the message," he says.

"There's no evidence to show we're all due for very short-term devastating impacts as a result of global warming; so I think these statements can be dangerous where you mix in the science with unscientific assumptions."

Professor Hardaker also believes that overblown statements play into the hands of those who say that scientists are wrong on climate change - that global warming is a myth.

"I think we do have to be careful as scientists not to overstate the case because it does damage the credibility of the many other things that we have greater certainty about," he said.

"We have to stick to what the science is telling us; and I don't think making that sound more sensational, or more sexy, because it gets us more newspaper columns, is the right thing for us to be doing.

"We have to let the science argument win out."

Thursday, 15 March 2007

Loving American lawyers

I know this is a little late with a story, but it did make me laugh yesterday.

Viacom, an American media firm, has decided that it will sue Google and YouTube for £1 billion dollars.

Queue thoughts of Dr. Evil.

The bit that make me laugh is how they came to such a large and exact sum. In my mind I can see the lawyers sitting around and thinking of a stupidly bit number, one spits it out, another doubles it, another adds some zeroes and hey presto, $1 billion. Then they all sit back and dream about the fees....

Wednesday, 14 March 2007

Time called on the US Credit binge; UK to follow in 2007?

The FTSE fell again today, and is now down to 6000.7 and may well go below 6000 tomorrow which is a 10% drop in a couple of weeks.

What has caused this?

Well in the US, there is a fairly rapid bursting of a residential housing asset bubble. New builds are being cancelled and prices of property are down on average 10%. This has caused many of the lenders of sub-prime mortgages (i.e. high risk lending) to get into serious difficulty as people begin to default on their loans. They have done this as interest rates have gone up from 1% to 5% in the past few years. This is the real legacy of Alan Greenspan whose lustre may well fade now the chickens are coming home to roost.

This is a real problem because for the last few years US citizens have been financing credit card bills by withdrawing profits from the equity in their houses. So any large problems with the housing market will reduce consumer spending and bring on a mild recession at the very least.

As we all know, what happens in the US is often followed in the UK. Although we have not gone to the same excesses as in the US, we have some of the same symptoms. Rapidly rising house prices (although we have supply issues unlike the US, giving our prices better underlying reason to rise), huge credit card lending (over £1 trillion now) and rising interest rates. We have a high money supply though which means inflation is more of an issue here than in the US. Perhaps we will be saved the worst by the huge wave of immigration that is keeping wages low and house prices high?

We are likely here in the UK to have a housing dip and credit squeeze. This will slow down the economy more quickly than the treasury is predicting and cause finance issues for our high spending government. On the plus side, perhaps interest rates will not need to go beyond 6%.

We live in interesting economic times though; shame , I preferred the mill pond.

Tuesday, 13 March 2007

Thoughts on Enviroment Policies

There has been so much written and said about the environment in the last few weeks that I barely know where to start. I think first it is best to set out where I sit. The science to me is firmly on the side of man made global warming. I would love to believe the the great climate change swindle, but many of the arguments made in that have been disproved time and again (see for a fully scientific rebuttal). Perhaps the effects will not be as extreme as the likes of George Monbiot would like us to believe, but nonetheless we can all see the climate changing around us rapidly.So we must do something...

But tax is not the answer. Typically our ill-led and unambitious government (and opposition) can only think in one dimension. Tax.

This is not the solution at all, we need a far more market and globally based approach.
We need to finance and support new technologies and research (UK government research budgets have been falling in real terms for years) to find alternative fuels.
We need binding international agreements so that there is no incentive for businesses to practice 'carbon-avoidance.'
We need to follow the better, already tested, policy ideas such as those of Woking Borough Council, which has reduced its energy spend by 90%.

I know the wrong policies though, regressive and unilateral taxes on transport and consumers. These affect the poor the most and leave the rich to go about their chosen lifestyles. I am more or less ashamed of the Conservative policies announced this week, at least the Labour policies are less regressive.

Really if there is one thing emerging from the 'debates' this week, it is that there is already too much hot air in the UK; and this is definitely sharply on the rise.

Sunday, 11 March 2007

Cash for Honours

My 2 pence on the likely outcomes from here on in:

1 - Charges will be brought against key Blair aides. More likely for perverting the course of justice than actually selling honours.

2- Aides, Levy, Blair all look rather bad and try to spin their way out of it. Watch some flack hit the Tories and other parties too. Blair does not have too many days left anyway (see clock in my side panel).

3- Brown 'assumes' power from Blair in May. Declares a fresh start with full state funding for political parties and a backing for a fully elected House of Lords.

4- Somehow, maybe thanks to media leaks, the trial never happens and all is forgotten by the end of the year.

Except of course, that we would no longer live in even a representative democracy. With state funded parties, why would the politicians' need to listen to voters?

Sunday Business Round Up 10/3/07

Shorter round up this week...some of the stories which grabbed me:

Morrison's logo to go - it was not very modern anyway. I like Morrsion's as it happens, their own brands are a mark above the competition as they own more of their suppliers.

The IoD urges tax cuts to Gordon Brown - tax cuts? talk about whistling into the wind...

Boots next for for KKR Private Equity
- a deal that makes more sense as Boots has plenty of assets for the PE boys to leverage and has been under performing for years.

Agri-Business benefits from EU subsidies - yes of course you may say, but this was in The Observer!

London full of Billionaires - Perhaps Blighty is not so bad after all...

The future of the UK; housing crash? - we do tend to follow the US economy occasionally.

Music companies realise they can profit in the download world
- not exactly quick on the uptake though.

Banks fight back on customer overdraft claims - between the banks and consumers the war will go on forever.

The Pru to nothing again - they may take some money back from their funds this time, but he 3rd strategic review in 3 years has the same old conclusion - do nothing.

Friday, 9 March 2007

SkyNet 5; The terminator

yes it is true, we named our new military satellite system after the one in the Terminator series.

If this is not macho enough for you, then weep at its telecoms power and awe. Well, OK not weep, but perhaps be impressed.

I am glad our armed forces will finally be able to use the modern communications systems that us mere office workers take for granted.

However, as ever the cost is astro-nomical; fitting given the subject here.

The PFI deal that it was bought under is a typically hideous beastie. 18 years of future costs and no fixed payments. Extra's added (to the tune of a few hundred million) in 2005 for a little up specking.

Finally, just to sweeten the deal the MoD threw in a few other contracts for radio's and systems.
All this is just yet another condemnation of the MoD's procurement department, surely one of the sectors in Whitehall needing the most urgent overhaul.

Thursday, 8 March 2007

Investigation into Private Equity?

According to the BBC yes, but I notice the terms and conditions of the inquiry mean that there will be no actual result. This is a classic NuLab response to any issue of the day, just like John Reid earlier in the week; something must be seen to be done.

This is more important than anything actually being done. Which of course they can't do, as they don't have any answers.

Top Tory gone in race row

Mercer is sacked by Cameron; what was he thinking? Sad though that a person's job and career can go just on a rash decision, eh Alex?

Wednesday, 7 March 2007

IT Poor Results; The shape of things to come

I posted below about the revolution that is hitting our television industry. Today ITV have announced another poor set of results. ITV are still the largest advertising channel in the UK, but not for long. Google will overtake them in a year or so and as the multi-channel world of Digital television kicks in they will fall even further back.

The future will be subscription and new forms of payment, like ITVPlay and the other gameshows where you pay through calling in with little hope of winning a prize. It will be a very different world and I can't see how the likes of the BBC and ITV can remain in their current format's over the next 5 years.

Monday, 5 March 2007

Digital Telly; a nice denoument for the BBC

The end of the analogue signal is approaching. In the autumn of this year, the first switch off will occur.

This heralds a major change in the way we all get and view our television in future. The Government pursued this idea because it would free up the radio spectrum to be sold again and would leave Britain with an advanced DTT system. So all round a good idea, even if there are hitches in the shape of refusniks' and a lot of analogue TV's to be disposed of.

Hat Tip for Image;

Longer term however, there is a huge shift in the business model coming, to the detriment of the current advertising based model. With a multi-channel TV audience for all channels, the share of the larger channels will fall. So ITV, BBC and Channel 4 will all suffer. This means their advertising revenue will fall off. To help bolster this they will need more popular programmes; but this does not square with their current public service broadcasting obligations.

The Government is of a already retreating on this issue vis-a-vis C4 and ITV by reducing their costs. But for the BBC it is a different game; how can it justify its position as its market share falls?

I don't think it can, but I like the latest idea from John Whittingdale that in future all companies could bid for government funded public service broadcasting; thus removing the need for a BBC monopoly and licence fee.

A market for TV PSB is a much better idea than the current system; we still get the content and have to pay, but not to support the whole administrative monolith that is the BBC.

Sunday, 4 March 2007

Sunday Business Round Up 4/3/07

A much better week this week than last, including the sight of Slicker eating his hat...

Firstly, an entertaining story in the Sunday Telegraph about the future of soft drinks. With all the flavours done, it seems gimmicks will be the new 'new.' Still sounds like fun. Better than the most dull story covered by most but with the Observer link here, about the SKY/Virgin TV boresville.

The main story of the week, the huge market fall (over 10% globally) is surprisingly covered only briefly, although best stories are in here and here. The Mail has a take on how to profit as a small investor in these times; no they don't mention buying a house!

The Sunday Telegraph also covers the credit card story, which continues to bubble away (yes, I know I 'owe' a post on this). This time is is Barclays looking to get out of its credit mess and further bad news for HSBC which is really in the mire in the US with bad mortgage loans (look out for the Woolwich in the UK to suffer the same fate as the year progresses?). The Times reports this story as HSBC writing off $11 billion in loans- that is more than the cost of the business they bought! The Observer has a slightly different take here, as you would expect.

Finally there are a few stories following up on last week's Private Equity binge - here in the Telegraph, a PE bid in The Times,

I always like to include at least one story on our increasing tax burden and its threat to our economic well being - here is one in The Times. Although the Observer has the opposite on how our film industries subsidies are under threat (if only!). The Indy has a nice angle on blaming the tax accountants for the world's woes; I have a tinge of sympathy with the argument here, but not a lot

Finally, the open skies talks I dissed last week have apparently made progress...or maybe not if BA has its way. I remain knife and fork at the ready.

Saturday, 3 March 2007

Not big and not clever

So the news for the last day or two has had this story bubbling under the surface. Some Tourists have been kidnapped on the Ethiopia and Eritrean border.

Now the foreign office is mobilising to try and track them down and I guess negotiate for their release.

It is sad that this has happened to fellow citizens, but really, holidaying in a war zone? Do you think they managed to get any holiday insurance?

Is Disneyland or Magaluf really that bad an option in comparison?

Thursday, 1 March 2007

Dead Cat Bounce

My last post reported the fall in the stock markets around the world that heralded the beginning of the end of the Bull market. Economic fundamentals are just too unbalanced for things to continue as they were.

Yet today, the markets are up a little, after 2 days of falls. Don't be fooled though as hedge funds and others need markets to move up and down to make their margins, one way bets are hard for them to manage.

So today sees some profit taking, but I still believe the bubble is burst. Let's hope it is a nice gentle ride down rather than a collapse...