Wednesday, 31 October 2007

Trick or Treat From This Latter-day Locke

Evidently stung by having been caught out re-hashing other people’s speeches, Gordon Brown has taken time out from his busy schedule to compose an epic address ‘On Liberty’. Why he would wish to be known as the author of this first-year undergraduate essay is anybody’s guess.

But he has certainly managed to include some Hallowe’en horrors.

Jack Straw will investigate the idea of a freedom of expression audit for future legislation

Yes, Jack Straw - just the man, I should say, and Walter Wolfgang agrees. (Didn’t credit Brown with such a wicked sense of humour !)

whenever there are question marks over the ability to express dissent the balance should be with those taking action to defend and extend the liberty of individuals and their freedoms to express their views

A very revealing formulation, this. Why should the balance be with those taking actions to defend … why not with the dissenters themselves, hmm ?

Next, the government is “at all times [to] apply the liberty test”. Ye-es, and we know Brown’s form on applying tests of his own devising – ask Blair & Co about the famous “five tests”.

Not to worry: “today our abhorrence of torture is and must be unequivocal

He’s obviously planning to have a little word with King Abdullah . . .


Horrible face image from FreeDigitalPhotos

Tuesday, 30 October 2007

So Much Hot Air

Yesterday, Mr Benn (Hilary of that ilk, clearly a diminutive of Hilarious) delivered himself of a ‘major speech’ on Britain’s Low Carbon Future. Given the fatuous position of the Government we have drawn attention to many times, did he start with an apology for testing our collective patience over the years with infeasible ‘commitments’, followed by a promise to stop the pretence forthwith? No: he proposes to plough on regardless, starting with this:

I think we all know why we are here … it is a time – above all – for leadership.”

Leadership, eh ? This is exactly what Blair laid claim to as regards reducing carbon emissions, so perhaps the swivel-eyed one can tell us the fruits of all this over ten years ? Yes, indeed he can.

The UK was the first country ever to use carbon emissions trading, the first to put climate change at the heart of a G8 presidency, the first to call a debate on climate change in the UN security council

So: we're well out in front when it comes to talk: but what about yer actual carbon ? Curiously he failed to mention that the outcome of all this leadership is that the UK is emitting more CO2 now than when Labour came to power.

And may we hope for more of this fine leadership ? Oh yes.

now we will be the first country in the world to put forward a legally binding framework for reducing emissions over time.”

Getting the lawyers in ! Why didn’t they think of that before ?


Monday, 29 October 2007

Is the City dirty?

Amongst all the interesting news today, Oil heading for $100 a barrel and gold heading for $800 a snippet slipped out today.

This article shows that our regulator, recently shown by the Northern Rock scandal to not perhaps be the heroic organisation it once claimed, has some fairly serious reservations about Hedge Funds.

In this case it has reviewed them and found that many lack any serious controls to prevent market abuse. Given the huge power of these funds to short-sell shares and decide on the success or failure of merger and acquisitions this is a serious accusation.

More than that it adds to the study already done that showed up to 25% of M&A deals had some dodgy looking share deals associated with them in the past few years.

All this leaves a rather nasty taste in the mouth (this phrase always reminds me of rhubarb crumble, but I digress). how are the small retail investors to prosper when the big boys are keen on large stitch ups and how are we to judge funds success when they may have been cheating the market rather than playing fair?

All in all a difficult situation and deserving of more headlines and action than many of the other stories of the day. Certainly more important than the Government interfering in the workings of the mortgage market.

Sunday, 28 October 2007

28 October - Business Round Up

Another quite exciting week in the business news; indeed the past 6 months have seen a huge jump in the importance of business news as the credit crunch and general economic situation grabs peoples' attention for the first time in years; probably since the end of the dotcom boom.

I have added a couple of international stories this week for some variety too.

Here are 10 stories that you should read this weekend:

Buy Gold - Even the Observer is getting on the bandwagon. Of course when everyone else jumps on board it is probably time to get off....

US Inflation worries
- From the NY Times, the issues of the housing market fall have led to the spectre of inflation being somewhat hidden in the US. However, prices have risen.

..and yet US interest rates might fall - When read with the story above we can see how truly difficult the problems are for the world's largest economy. Also what happens in the US may happen here in a few months?

UK ducks Climate Targets - As reported earlier in the week, John Hutton and the Labour Government are going to try and get out of the 20% renewables by 2020 target. Of course as Nick Drew has said before, they could never hit these. Never again can we put any faith in so called green initiatives; they are so much hot air...

Supermarkets attacked on land banks - The UK Supermarkets have a large amount of retail land held onto for 'anti-competitive' reasons. This is one area where I side with the regulators and say the land should be sold for wider economic benefits if the supermarkets are not going to develop it.

Resolution battle - A company started just 5 years ago, Resolution plc, that looks after so called Zombie Pension funds is the centre of a bid battle between Pearl and Standard life. The Chairman and founder, Colin Cowdrey stands to make £150 million; and he deserves it too for creating business magic and a whole new sector in the pension market.

C&W pensions - And whilst we are on this topic, here is another large company that is seeking to offload its pensions issues to a 3rd party. This is a long-term story that will run and run.

Northern Rock - GMAC is revealed as a bidder with JC Flowers; the firm most likely to rescue the bank of England and the UK Government....I mean Norther Rock, oops.

Asian Market bubble - From the Hong Kong Standard comes the news that the HK market ended up at over 30,000 for the first time ever. Still going strong, but putting even more pressure on the HK dollar peg with the US$.

Comment of the week - John Waples in the telegraph has an excellence piece on the false market in Northern Rock shares and says trading should be suspended.

Friday, 26 October 2007

Noticed the Post?

My reliable informant in the Post Office has informed of something that has happened since the end of the postal strike.

Being a corporate wage slave myself it is not something that affects me personally, but the time of the only postal of the day is no mid-morning, not 9am or earlier.

This is of little concern to those out all day but must be of a lot more interest to those running small businesses and reliant on an efficient and early postal service.

Convenient of both the Post Office management and Unions to remain schtum about this development....

Wednesday, 24 October 2007

The Thoughts of Chairman Matt

Not being a Telegraph reader, I’ve been spared several years of their sometime star columnist Matt Ridley’s pontificating on the evils of state intervention. Yes, this is Matt Ridley the recently-resigned Chairman of Northern Rock who (pardon my ignorance) turns out not only to be a stellar company chairman and versatile journalist but also a noted biologist and theorist of natural selection. With strong academic views on why government should not intervene in private enterprise.

Here are some of the thoughts of Chairman Matt, courtesy of a few minutes googling:

▪ "The more money a group receives from the taxpayer, the more it demands and the more it complains"

▪ "A Government that confiscates unprofitable firms from private owners so that it can subsidise them itself does not do its taxpayers a service"

▪ "Wherever the state has turned provider, it soon crowds out private rivals"

▪ "State control, whether in ancient Egypt or modern North Korea, has gone with tyranny, not freedom"

▪ "From British Leyland to British lay-bys, from the herring fishery to the National Health Service, public ownership always means neglect and under investment"

▪ "Governments do not run countries, they parasitise them"

Ironic, huh ? We don’t necessarily expect intellectual consistency from run-of-the mill businessmen. But maybe we could hope for better from an academic ?


UPDATE: £ 20 billion and counting . . .

Feb 2008 UPDATE: did I hear £ 105 billion . . ?

Tuesday, 23 October 2007

Debt collectors preparing to call on us all....

I spotted an excellent article in the under-rated The Business magazine. Here is the first paragraph:

"THE government’s private finance initiative (PFI) liabilities have rocketed 14.5% to £181bn ($368bn, E260bn) over the past 10 months, according to information buried in the pre-Budget report (PBR)."

That is a huge jump for an economy expanding at 3% per annum at best.

Add this to the the £1,363 billion in personal debt and the £574 billion in Government debt.

This brings it to a grand total of £2,118 billion of total debt.

This translates to £84,720 of debt per household (the best measure as it approximates net taxpayers best of all).

This is a huge amount, the interest on this alone must be something in the order of £6000 per year or £500 a month!

No surprise then that the graph above shows a rapid rise in insolvencies.

Of course some of this is long-term debt and mortgages account for half of this burden.

Nonetheless we are in a difficult position debt wise and the boom of the last few years has clearly been financed by both increased mortgage borrowing of up to £200 billion and Government spending of another £200 billion.

There is no way to finance us out of a recession now; so I bet Brown and Darling are praying somehow that we avoid one

Lib Dum leadership

I had a poll going, strangely broken now, to decide who I should vote for were I to join the Lib Dems for the leadership campaign. To be honest I only wanted to vote for Sarah Teather as only she could only lead the party to the future that it demands...

Sadly she decided not to stand an instead we have a love in contest between Nick Clogg (hat-tip Newmania) and Chris Doom.

Nice to see they have learned no lessons from the Labour leadership coronation...

Monday, 22 October 2007

Badger Culling - latest breaking news

Strange news to report today as far as I can tell the UK Labour government are in full rebellion against the Brown Machine. Indeed there is now talk of a crisis in finances and tonight it has emerged that there strong discussion of the need for a cull.

First up is Badger. Badger has been in a poor state, marooned in his set and beset by critics, since the Magpie Budget where he was forced to steal others' clothes to cover his own lack of ideas. This has led the Sir David King, the Government's chief scientist to say today that "Together with five well-respected experts, I have assessed the ISG report and other research relating to badgers...It is clear that badgers are a continuing source of infection and could account for 40% of.... breakdowns in some areas. "

However, an alleged friend of David Blunkett, John Bourne added "
If you wish to go down the culling route, you have to do what the Irish are doing in large parts of their country and that is eliminate"

In Defence of badger the leader of the Badger Trust, Dr Richard Yarnell, a person apparently close to G. McBroon is leading the campaign for the protection of badgers and has come out with a strong defence and
said the latest report amounted to a "shameful political fix" and it "beggared belief" that the government was even thinking about implementing a cull."

The Government has also commissioned some Opinion Research, perhaps by Debroah Mattinson
which says a that out of a survey of 47,000 people 95% were against a cull; however it seems that this research was done before the latest outbreaks in the last month.

However given this Government's record on culls since the Foot in Mouth incident on June this year I do indeed fear for the not-so-humble Badger.

Do you think this is right? Should Badger be culled and if so by a knife in the back or s sniper shot to the head?

We live in confusing times....

Sunday, 21 October 2007

Sunday Business Round Up - 21st Ocotber

Another Sunday and back to business as Sport has been quite unsatisfying enough this week! Maybe the markets can cheer us all up....or maybe not...

BLACK MONDAY REPEAT - This is the only story in town today. If you are a trader of owning shares then tomorrow is going to be a very interesting day indeed. With a large fall on Friday no one is sure if there will be a rout tomorrow...

Oil price nears $100 a barrel - Well,. hedge funds need to speculate somewhere.

LSE protected? - By Qatari sovereign fund. An interesting angle on this story.

The day of the undead M&A story - Swiss re and Standard Life to buy Resolution zombie fund.

No UK Housing Crash - The view of Ernst & Young

...or maybe there will be - According to The Observer.

Globalisation effects- Private jet sales take off.

HSBC still under pressure - from 'radical' activist investor. It would be ground-breaking if such a campaign was to work on such a global player.

Weakest article of the week - Everything is fine - A puff piece (from Ed Balls?) about how great Labour really are in the Observer.

Should the crisis have happened... - Could the Northern Rock crisis have been all the back of England's fault?

Friday, 19 October 2007

The Stuff of Champions

For younger readers, this is snooker player Joe Johnson who won the World Championship in 1986.

Though a splendid fellow, in his time as World Champion he embarrassed himself consistently on the green baize, winning nothing all year.

Yet despite this sustained run of miserable form, at the next World Championships he made it through to a second successive final.

Remind you of anything ?

We must hope the parallels end there . . .


Thursday, 18 October 2007

BBC Job cuts

With my 'back to the 1970's theme ' hat on I see that the NUJ has been out today threatening BBC management for daring to suggest 1,800 job cuts.

This for everyone not losing their job is good news; firstly many of the jobs will go through natural wastage in any event. Secondly the BBC has been expanding hugely in the last 10 years and there is no reason to continue its growth at this rate.

However we are stuck with the BBC until 2016 thanks to the new licence agreement. This is potentially 3 elections away.

My plan for the BBC would be as follows:

1. Scrap the licence fee. this is a very regressive tax that affects the poor disproportionately. instead fund any public broadcasting out of the government general fund.
2. If the government wants to continue to subsidise the television sector then it should offer tax cuts as an incentive to produce rather than penal charges to consume.
3. To keep a certain amount of public broadcasting on the television the government should take up David Elstein's brilliant idea of auctioning off subsidy to make and show specific programmes.
4. With this in place the BBC could be fully commercialised. I happen to be of the opinion that its output will be better than now with the added vie of privatisation.
5. Funds also withdrawn from Channel 4 as this channel too should not need any good subsidy.

We would have a stronger, more vibrant and more cost efficient television sector overall.

Whenever the BBLefties go on about quality just remember who made The Soprano's, 24 and the West Wing and who makes What not to Wear, Spooks and Holby City?

Wednesday, 17 October 2007

Insurance in the Aftermath

Insurance has always struck me as one of the unsung wonders of capitalist civilisation – a private, commercial means of spreading the cost of some of the worst contingencies of the human condition. Churchill’s characteristically romantic and ringing advocacy of insurance is well-known*.

But after the floods of the summer, we appear to be seeing the insurance paradigm in retreat before the ravages of climate change: the API has suggested that it will not be able to offer cover for large numbers of properties unless the government builds more flood protection. Is this just trying it on à la banking industry ? - or the recognition that some things are just too big, too actuarially iffy for private commerce to be able to step up to the plate.

Similar thought-processes stem from the prospect of advanced genetic screening: what commercial cover will be available for those known to have ultra-high predisposition towards expensive disease ?

The future may thus be characterised by, on the one hand greater certainties in areas previously seen as subject to random events, and on the other, reduced certainties in the face of global upheavals of several kinds. If this is right then a very disquieting shift will take place, towards ever greater roles for government – not, in this scenario, by dint of a socialistic land-grab, but of a capitalistic retreat. This is not a happy prospect.

We have several insurance practitioners amongst our readers: any views ?


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* "If I had my way, I would write the word INSURANCE over the door of every cottage and upon the blotting book of every public man, because I am convinced that for sacrifices which are inconceivably small, families can be secured against catastrophes which otherwise would smash them up forever”.

Monday, 15 October 2007


As well as fighting in Europe for his fabled ‘red lines’, Brown’s hapless troops must play their part to defuse one of Blair’s little Euro time-bombs. As picked up in Mr Unslicker’s weekend roundup below, in his last attendance at the Council of Ministers in March Blair was party to the agreement that the EU would collectively meet a ‘binding’ obligation for 20% of its primary energy needs to be met by ‘renewables’ by 2020.
Which country is to do what, and how ? The ‘burden-sharing’ negotiations are beginning in earnest. With the UK presently getting less than 2% of our energy from so-called renewable sources (laughably, this includes the burning of foot-n-mouth carcasses etc, surely a reductio ad absurdum), it is deeply implausible the UK could get anywhere near the 20%, irrespective of how much money is thrown at it.
Civil servants have all manner of weasely advice for ministers, leaked in August, as to how we can wriggle off this 20% hook. The UK’s devious position is angering several of our EU ‘partners’, not to mention assorted greenies and of course the greedies - the renewables industry, anxious for ever more massive subsidies for its ridiculously uneconomic schemes.
Underlying all this faffing about is a much more serious issue. Not only does the ‘Department for Business, Enterprise and Regulatory Reform’ have no idea how the target could be met in practical terms – it doesn’t even know where our electricity will be coming from at all beyond around 2020.
Certainly it can summon up scenarios for future ‘generation mix’, but given the certainty of nuclear and ‘old-coal’ plant closures, and the long lead-times for new developments (especially - don't laugh - nucs and dream-schemes like the Severn Barrage), they all look highly optimistic. So much of future capacity must come in large chunks of new-build that if we are going to meet our needs at all it will be from good old coal and gas, not the relatively tiny (as well as expensive) increments in which renewables come. There is nothing concrete behind the optimism: merely blind faith in a poorly understood laissez-faire philosophy that the market will provide.
Perhaps they might like to get off their empty nuclear fixation and sort out the bread-and butter issue of being sure the the lights will stay on, before committing us to their fantasy feel-good targets.

Sunday, 14 October 2007

Sunday Business Round up: Jump start

Well after a fantastic day of sport yesterday it is harder than usual for me to turn to the business pages. However, there are some interesting things in the news this week. The Virgin offer for Northern Rock being one of the more interesting...

Virgin bid for Northern Rock - Branson is to see if he can fix the NR. I think this is usual good business by Sir Richard. NR is a gold plated government institution now so is in a healthy position for the long term(?) Particularly if Beardie can get his hands of the assets for free! Many of the papers though always pooh-pooh Virgin, for base reasons of hating entrepreneurial success is my guess!

Chinese banks move up a gear - By financing BA planes they show they are moving up to compete with the international banks.

Green Vision - This article on green permits shows, as Nick Drew has done many times, just how far away UK government rhetoric is from the reality of what we can deliver in terms of green power.

Court ends strikes - Finally some sense in the Post office debacle. With both management and the Unions in the wrong, the future of the Post Office looks bleak.

Lawyers - Cashing in on Miner's woe by the million. An old story, but still worth a read if you had not seen it before.

Darling's future - Business and Unions are to unite to fight the Government's changes to Capital Gains tax.

and finally - a story about a city trader and how he gets his bonus; I have no idea if this is even remotely accurate.

Saturday, 13 October 2007

Ride That Luck !

Ever since their shambolic arrival at the World Cup, England has been favoured by Lady Luck:

> First opponents USA
: we were always going to lose to South Africa, but imagine if Tonga had been first up
> Excellent build-up via Samoa and Tonga: the sort of warm-up sequence most teams try to organise before turning up in the first place
> Australia in the quarters: we were always going to draw a Pool winner, and Australia were the easiest for England
> France in the semis
: the Old Enemy is a much more straightforward proposition than the All Blacks would have been

Ride that luck - and onwards to the final !

Friday, 12 October 2007

Friday; what Work has taught me this week

If you view your problem closely enough you will recognize yourself as part of the problem.

In any decision situation, the amount of relevant information available is inversely proportional to the importance of the decision.

The secret to success is sincerity. Once you can fake that, you've got it made.

Just because it's hard, doesn't mean it's worth the effort.

Thursday, 11 October 2007

FTSE Edges towards new high

As ever the Finance markets are often very unpredictable. The past month has seen a full recovery on the main market in London of all the losses from the credit crunch; this is despite the ongoing problems at Northern Rock (borrowing more from the government with every passing day) and the troubles in the commercial paper market.

Why, then?

Well, for one thing the US 0.5% interest rate cut has stimulated demand in the US and pushed up the Dow and Nasdaq. Also a weakening dollar is starting to help US exports. This partially explains the UK markets as we follow the US closely as an Anglo-Saxon economy.

If you look at this graph too, you can seen the sector split too. Mining has been very good (not that I can advise, but nearly all my small investment capital is in Gold and Natural Resources) as have Oil and Financial Services. You may wonder at Financial services but the banks until this quarter have been making record profits and the Life sector has picked up too.

Is this a dead cat bounce though? Always hard to predict. The FTSE All-Share is up 12% on the year so far, with the Samll Caps much less buoyant then the FTSE100. Times look tougher ahead into the new year. If houses prices do go down thought then shares will look a better asset class, so there may be some odd feedback support for a little while.

Wednesday, 10 October 2007

House Prices Under Stress

A clear winner in the Stress Test poll (see sidebar) – almost a third of you interested to explore a rapid collapse in UK house prices (we characterised this as 50% in 12months). Well, lots of us have houses !

Some interest also in thinking through the impact of 5 more years of Broon – perhaps a little less likely now, a week being a very long time etc etc – and 10% inflation during a severe downturn.

An interesting view was posted on the house-price scenario: “it would also be almost physically impossible for this to happen”, said Anon, in a long comment which made several good points.

I’d respond to this in two ways. Firstly, one of the purposes of stress-testing is to confront the possibility of something close to a discontinuity: such things do happen from time to time.

Secondly, though, I’d question just how infeasible a 50% drop is. As Idle commented on the estimable Electro-Kev’s blog:

when prices have been going up at 15% a year, just losing the last two years' worth of (overshoot) price growth will mean a 32% correction. Three years' growth lost = 52%

Now 50% in a single year would be steep, for sure: but many a commodity market has melted down more dramatically than that.

Finally, let’s watch very closely for the details of the forthcoming CGT changes. If the 10% rate for assets owned more than 2 years is indeed to be replaced by an 18% rate on a known date early in 2008, this – as Dearime suggested - could do a ‘reverse Lawson’ on house prices irrespective of the looming downtrend. Government intervention is a frequent trigger for market discontinuities – unintentional, as often as not !


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Poll result:

Which scenario is most useful for stress testing ?

> Food prices treble – 11%
> Cybercrime: no refunds – 7 %
> House prices collapse – 32%
> 10% inflation + downturn – 18%
> Successful terror attack – 11%
> 5 more years of Brown – 21%

Links Update

I have used this evening to try and visit a few more blogs and to update my links a little. Let me know if there is anyone I have missed out who either links to me or is wrongly excluded.

Special mention to Mark Wadsworth and Sackerson as new members of the tiny UK blogging community who focus on business and economics.

Tuesday, 9 October 2007

Pre-Budget and Comprehensive Spending Review

"Badger" Darling was doing his masters bidding today in presenting to Parliament this report. A pre-election fest for us all, with no election. Quite scary when you look at the giveaways, practically nothing.

The cupboard is very bare now and there are no more baubles left for us; In the bleak midwinter...

So my 2 cents:

Taxes - A small concession to married couples for inheritance tax; Aping the Tories without going as far as them. No move on corporation tax, a tax rise for Capital gains, some vaguery about hitting non-doms; overall a little tax grab here and quite a nasty one for entrepreneurs who have invested heavily in R&D and building their own companies (as if the PE boys will notice!). Finally, some peanuts for local government, although that will be lots of money for the few Labour councils that are left as other councils won't be likely to be favoured. Council taxes still expected to rise at above inflation rates. Ouch.

Economy & Public Debt - Slight reduction in forecasts for growth - still wildly optimistic but then we would expect nothing else. A promise of no real tax cuts to come. Said nothing on Northern Rock as plans are clearly still be re-written in the Treasury as the lending situation becomes more murky. On the government side some heroic lies have been spun that will come back to bite hard if the opposition remembers them. There is simply no way the UK net debt will be £23 billion by 2010 ( that won't even cover the Olympics, will it?). Equally another £10 billion of savings is pure chicken feed, a mere rounding error as Chris Dillow points out.

CSR Spending - Health to still have more money poured into it. No mention of re-negotiating the GP's settlement or how the trusts are going to cope with the PFI debts going forward.

to get more money for personalised learning (another dead end waste of time. it is discipline and staff motivation that is needed, not this). More money to to go on investment in research; hopefully no the abused corporate R&D tax credit scheme. However with the tax change on entrepreneurial investment this all seems very disjointed.

Housing - Help for people to renovate poor housing, beyond me why this is needed as there is a clear economic incentive to develop your own property as it is. tampering with mortgages too in an effort to reduce our addiction to variable rates. Another poor idea as very few people will want to fix something now and miss an opportunity in the future; why is the government trying to in the game of guessing people's risk appetites?

Other baubles - not much for culture, a pittance for the army, some very belated funding for flood defences, more money for overseas aid and more money for people with kids on benefits ( loving the incentives here, i hope you are too..)

This lot must make some shocking reading to Labour supporters everywhere. There is no effort at reform in here, they can't even copy the Tory policies properly and the money has run out for any kind of sizeable giveaways to the core public sector constituency on whom they rely for votes....And this in 2008 when growth has been very resilient. The guarantee of tax rises next year are going to be very unpopular as the economy cools and house prices give way.

Sunday, 7 October 2007

When will the next Election be then?

Well, with Brown pulling out of having an election on 2007 we can now think about when the next likely date will be.

For 2008 it seems the odds are against it given that Brown has just turned down the opportunity of having one now. However 2008 is the also likely to be the last year of any real growth in the economy and the time for a referendum (or not) on the EU treaty; so there may yet be an outside chance.

In 2009 we will be in a very different economic position. Companies will be finding it hard to make money, the government will be trying to cut spending to match the tax receipts and this will be upsetting the unions. In addition consumer spending will be down as people finally try to repay all the debt they have taken out. One outrider is that a significant percentage of people in negative equity that will drag down the housing sector too.

So that leaves 2010, when an election will have to be called come what may. If we are lucky the economy may be showing signs of picking up; equally if we have followed a lax monetary policy the recession may have been put off until then. It will be difficult for Alistair Darling to actually put off the recession long enough for an election. If they do manage it then it is goodnight for whoever wins the election as the economy will be in shreds.

So overall my money is on 2010 and 3 more years of Gordon Brown as PM.

Tomorrow I will look over the Comprehensive Spending Review and what hat means for our taxpaying finances over the next 3 years.

Happy Days

Return of the Business Round-up

After last week's hiatus to do the international Carnival of Capitalism it is back to the UK business round up. A mix of the best and oddest stories from the business pages of the Sunday Broadsheets.

This week the focus has been more on politics and the busy hacks in business journalism will have been able to rest their wrists a little more. Expect business news to make the running for sometime yet though as the economy enters its rocky patch...

Citibank to bail out Northern Rock- If this happens it will please the bank of England, currently sat on £10 billion of 'security' in the form of Northern Rock mortgages.

CSR - Alistair Darling is going to announce the Government's spending priorities this week and will expect tiny reductions in spending. Some of this article is out of date given that Brown has run from an election.

Darling breaks his Golden rules - On the other hand, this piece in the Independent shows just how poorly our public finance are considering we have been through the boom times and are now into bust.

Merill Loss - £2.25 billion loss is a high price for the credit crunch. What the insiders want to know is what happens next quarter though. have the banks really come clean on everything? My hunch is no, as these figures, bad as they are do not relate adequately to the amount of assets now unsaleable.

RBS victory? - Barclay's were finally found out int he bid for ABN Amro. Now RBS has to show that it is worth the price it is about to pay.

Supermarkets face action - This story is always in the papers, yet somehow the supermarkets manage to play the market and deliver us all lower prices as we want in these inflationary times.

Arsenal takeover saga moves on
- Another bid that is set to run for ages. Now the Arsenal board are teaming up with the American they originally spurned....all keeping up with this?

Royal Mail Strike - This will have no winners. The unions are going to cause more job losses than necessary and the pathetic management are going to post an even bigger lost than necessary. A sad reflection that we have this 1970's battle in 2007.

Identity theft
- A below the radar story here. The lesson is clear though, be careful to whom you give your personal information, lest it is stolen.

UK consumer spending - There are a few articles today on the consumer spending figures. This is a good article as it shows how the credit crunch is affecting the big spending first. As time goes on this will trickle back further into everyday spending.

Friday, 5 October 2007

Random Friday thoughts

So if Brown does not go for an election does this mean we will be calling him Gordon Brown-pants next week?

I am really getting irked by people who wear ipods and are oblivious to everyone else, they walk into you because they have lost their sense of hearing and personal space; They are a commuting nightmare. It gets worse when they turn up the tunes so loud that you are forced to listen to their squealy R'n'B gangsta trash. It takes the individualist society to a new level.

Tomorrow we look at private schools for the kids. The fees are absolutely, jaw-droppingly insane; and yet there is little choice as the state schools fall ever further behind due to their marxist doctrines. I am a firm believer two that the only things you can really give your kids is a good education and stable, secure home life. No doubt by Sunday I will be in full force to Mrs Slicker about the needs for her to return to work quick sharp...sadly my hard sales skills are of no use dans le maison.

UPDATE: What a day. Brown living up to his nickname as given above and will look like a right sour puss for months to come. Then both the Aussies and Kiwi's sent back on long-haul!
Bring on the French next weekend...

Thursday, 4 October 2007

Tony Ryan, 1936-2007

Boy, I remember Ryanair ! I used to have a lot of business in Cork, and the 06:00 from Stansted was the the only way to go. Chaos ! Fighting for the good seats (the ones that weren't ripped), hoping the 50 pence plastic beakers of water wouldn't run out - all to the cheery banter of the stag parties, the golfing and fishing expeditionaries, who would loudly barrack the in-flight announcements from the back and crack non-stop jokes to raise the spirits of those in steerage, i.e. everyone. (Were they really already drunk at 06:00 ?)

Never mind; the Cork taxi drivers would always offer their cordial, jovial sympathy. Tony Ryan, RIP.

Forget Barclays and ABN Amro - tell us your Ryanair stories ! No slander of product, mind ...


Wednesday, 3 October 2007

In Times of Stress ...

Alongside mathematical methods, a key risk-management discipline is to conduct Stress Tests. Statistics alone don't capture what can happen in extreme events, which occur more frequently than simple probability-distributions would suggest. A stress-test scenario doesn't come with a probability: that's the point. But thinking it through carefully can be very illuminating.

One problem is paucity of imagination: the worst we can envisage is what has happened before. When oil was last at $10 (1998!), very few companies were stress-testing for $80: (who is testing at $ 500 now?). When Enron was the pre-eminent market-maker for every wholesale energy player, few were considering its sudden melt-down: (who is modeling the collapse of a really big bank now?).

As an experiment - which might even be of benefit to readers in their personal financial planning - we are running a short series on this topic. To get the ball rolling, here are a few: vote in the Poll (in the sidebar) for which one you find most illuminating (or frightening!).

Then give us your own ideas ! Remember: s**t happens !


Notes on the Poll questions:

1. Food: Price of food trebles
2. Cybercrime: Gets so bad that banks stop authomatically refunding victims

3. House prices: Crash by 50% in one year
4. Inflation: Hits 10% during sharp economic downturn
5. Terror(1): successful attack on City / Parliament
6. Terror(2): 5 more years of Gordon Brown

The Troops Return: A Statesman Speaks

Tuesday, 2 October 2007

Working Hours

Thanks to all the voters who entered into the poll on hour many hours we all work a day. There were 50 votes so I make that quite a decent effort for one of these polls. The results are still in the sidebar until tomorrow when Nick Drew has new one to go in.

Here are the results for analysis:

16 (32%)
16 (32%)
12 (24%)
6 (12%)

I am pleased to see that so many people manage to work less than 7 hours a day. You only live once and I don't think at the pearly gates or wherever we end up you will look back and wish you had spent more time in the office. Some of you probably have better things to do than work anyway- Gordon steals most of it anyway!

8 hours too is a commendable achievement in clocking on and off to an exact time. If you voted in this category is it because you work just to get the money or are indeed your employers (yourself included possibly) fair and honest?

Part of me thinks thought that some explanation for the 64% in these two categories is a dissatisfaction with your work ?

Then we get to the 1/3rd of us who seem to put the hours in. This poll was inspired by my current 70 hour weeks in a new job. Hopefully once I am up to speed this can be reduced to something more akin to the EU maximum (48 hrs). On the other hand, I don't hate what I do and am paid well there is little to moan about beyond not seeing the family quite enough. My guess is that this applies to most of the voters here, some of whom are no doubt self-employed too as building a business requires endless work; and for little reward in the beginning too.

That is my take, what is yours?

Monday, 1 October 2007

UK Politics: Tory economic policies

Quick take on this today due to work interfering somewhat with blogging. Sadly I am no Dizzy, Croydonian or Iain able to swan off to the conference for a few days...

Five main ideas stick out:

Inheritance tax threshold to £1 million
; a good idea and despite what the Labour party say, it is clear that many more people in the future will be hit by this. Particularly in the South East. I don't see how this helps win the midlands and Northern marginals, but than I am no political strategist.

Moving the Stamp duty threshold to £250,000 for first time buyers; This is also a good idea, a few months ago I would have been critical as it would over-heat the housing market further, whereas this idea may now stop a real property price crash in the current challenging circumstances.

Non-Domicile's to pay £25,000; Where do I sign up to only pay £25k a year in tax? It is a good one-off idea but this is one where no one can be sure of the real amount of money this will raise. It won't put the Non-Doms off living here (cough, tested this idea on one already today so I have clearly tested this as fully as the Tories or Labour have...).

Green tax on aircraft; This idea is just a pure revenue grab like Gordon Brown's APD tax rise. People might swallow this but I hate the concept of stealth taxes and it is disappointing to see it from the Conservatives.

Finally, George Osborne announced that Tory spending plans overall would remain the same as Labour plans for the first 3 years. Oh, yeah? The economy will slow down int he next three years and the Government will receive a lot less tax receipts - so on current spending we are heading for massive borrowing or service cuts. This announcement is a hostage to fortune. One radical way to combat the sow down would be huge tax cuts across the board in the manner of George Bush.

That would be a better and braver plan.

What do you think and what one policy would you have suggested