Tuesday, 30 June 2009

Alistair Darling to resign on 21st July

There are some assumptions behind the statement in the title. Some more likely than others:

- in the first place, revised GDP figures out today for Q1 2009 show the economy lost 2.4% of GDP in a single quarter. The worst performance since 1958. This is 20% worse than the first estimate released on 21st May 2009.

- As such, then next release by the ONS of GDP stats will be on 21st July or thereabouts for Q2. There is a general feeling that Q2 has not been as bad as Q1 by a long way. However, there has still been significant economic contraction.

- This means that any fall over 1.1% will mean GDP has already fallen by 3.5% this year. In the first two quarters. This is the fall predicted by Darling for the whole of 2009 - let alone just the start.

- So, IF Darling had any honour, he would resign, as the budget he has signed off on is quite clearly blow to pieces within 6 months and therefore the UK will need to quickly redress its spending position in line with the new lower GDP.

Will he do it though? I don't see the Government having a good record on falling on points of honour, or even dishonour. Instead perhaps they will come up with some more lies about how growth will magically appear in the second half of the year to balance out the falls in GDP.

This Government is well to course to bequeath to its successor the worst fiscal mess in the history of the Great Britain; although I have yet to see their plans for Danegeld (in the modern world, perhaps this is the IMF?)

Monday, 29 June 2009

Short the Bear

Whilst (Prime Minister) Putin has been making great hay on the world stage about resilient Russia and the need for a new currency to replace the Dollar, the truth is also out there.

Russia's economy is collapsing at 7.6% a year; it is a performance worthy of Newcastle United.

Now, only two years after trying on the game of resource nationalisation, it seems Russia is retreating by inviting Shell back in.

Desperate Shell will take the bait; but the bear is very wounded right now. Any further collapse in commodity prices will utterly wreck the economy. I fully expect commods to re-trench later this year after their current spike. Industrial demand is just no there right now.

Russia is in for a tough time. Sadly this means more diversionary foreign wars and intervention to distract Mother Russia's masses.

Sunday, 28 June 2009

Saturday, 27 June 2009

Pooh Corner

They're changing guard at Westminster Palace
Speaker Martin went down with Malice
Malice is threatening Bercow too
”His Tory friends are terribly few”
Says Malice

They're changing guard at Westminster Palace
Bercow’s taken the poisoned chalice
The bumptious git had better beware
“If he crosses Dave, he hasn’t a prayer”
Says Malice

ND

Friday, 26 June 2009

New, previously undiscovered, Michael Jackson video has been found.

A previously undiscovered Michael Jackson video of his hit "Beat It" has just been discovered at his studio in L.A.
A spokesperson said the Mr Jackson had recently become 'much more political' and was very concerned about the erosions of freedoms in the world in places like Iran and North Korea but especially the United Kingdom of Great Britains."
He was planning to release this video at the first O2 concert as a "Message of support to the People of the United States of England in your time of struggle."

If you can't beat them, whinge like Virgin Media

The title effectively sums up the arguments by the cable/adsl media industry against Sky Television and in particular Sky Sports.

I don't have Sky myself, but have done in the past. I find it very expensive and a luxury - but the service is very good. The content is the best of all the possible providers. This is because Sky is the best run business with the most capital available to it.

Contrast Virgin, the old NTL business nearly destroyed by Lord Carter in a former life. This itself was an amalgamation of two failing cable networks (Telewest and Cable & Wireless).

Even with the advantages of cable broadband, these legacy companies just can't cut it. And new entrant BT is just as bad. Expensive and long contracts for poor content; deliver the truly awful firm that is BT - perhaps soon to expire under the weight of pensions obligations in any event.

So what does the competition do; they whinge, they have their insiders like Lord Carter, they go on a regulatory offensive.

Now proposals are out to force Sky to demand less for its expensively assembled content. This in itself is market abuse. it is not Sky's fault the competition has been rubbish for over 15 years.

Sky costs you nothing if you don't have. No taxpayers are harmed in its creation (well, OK, they do pay very little corporate tax).
This new approach just shows the Government does not understand markets still; there are winners and losers in all functioning markets.

Thursday, 25 June 2009

The Banks Always Knew The Score

. . . so failure is culpable

It has long been our contention that the risk-management functions within the banks always knew the score. If evidence is needed, look no further than this solid GS presentation, which provides an excellent aide memoire for anyone interested in risk management. Non-execs of banks, please note.

It's dated 2009 but there's nothing here that couldn't have been written before 2007. Indeed, most of it was being practised in *ahem* Enron when I was, err, familiar with its goings-on a decade before that. You could almost say it wasn't rocket science, although one or two of the calculations involved actually are.

As far as an outsider can tell, Goldmans has always maintained these disciplines internally (whilst no doubt exploiting the hell out of counterparties who didn't). Oh yes, and they are doing very nicely, thanks.

So - why didn't the others ? Because - see GS slide 8 - the correct risk discipline requires explicitly recognising the cost of carrying risk, on the P&L. Lazy bankers would prefer not to be reminded of their risks in such a bonus-impacting manner. And of course it was no part of Gordon Brown's job as Chancellor to confront lazy bankers: "what I didn't want was for Britain to be outside the mainstream". The rest is history.

Take 'em out and shoot 'em, the lot.

NP

When will the IMF ask for the keys to the Treasury?

You might think this is an incendiary headline, but really it only reflects the growing consensus among neutral observers of the UK's fiscal position.

Even Guido is reporting what Mervyn King said yesterday to the House of Commons Select Committee. Effectively, the UK is on an unsustainable spending spree. Worse, it was on one before the crisis started.

The OECD predicts the UK will have the worst fiscal deficit next year in the Western world, worse that Iceland and Ireland. Iceland has already been bailed out by the IMF and Ireland by the EU (under the radar). yet the UK is worse set to spend more.
Mervyn suggests that printing money and huge guilt sales are being accepted by the markets now as the price of avoiding total financial meltdown. but the time will come soon when they demand an end by forcing up interest rates.

The major ratings agencies too have the UK on watch for downgrade, which really seems inevitable and will push our debt burden up further.

All eyes are actually on the election next year. Outside observers expect the Tories to win and implement massive spending cuts. Only this will avoid an IMF bailout (unless there is some huge recovery turn around in the meantime, which is unlikely to say the least).

If Labour are re-elected then the IMF will storm the treasury immediately, via a collapse in the Gilts bond market - this is nailed on now with Gordon Brown going on about spending ever more money in a make-believe utopian socialist fantasy.

The reality is now that the 'money' being 'spent' now is mainly printed:

Extra Government debt estimated to be taken on this year - £170 billion
Money to be printed by the Bank of England - £150 billion

What a mess.

I think the saddest thing, is just like personal debt, everything can seem fine until the end, when the bailiff's come round and you lose your house and all your possessions. Until then the mirage can be maintained. I think this macro level shock it is going to come as a big surprise in 2010 to most people in the UK.

Wednesday, 24 June 2009

They think its all over.. It is now.


Setanta has finally gone off the air for good in the UK. The Irish broadcaster slipped into administration some £200 million in debt and costing at least 200 jobs. Lots of babble on the Beeb about poor customers still having to pay for a blank screen but as its a monthly subscription service, one of its attractions and weaknesses, it shouldn't be hard to stop the direct debit. Poor punters..out of pocket £12.99 max. Could the business model have worked without the recession?

Setanta needed 2 million subscribers to break even. That was a big ask. Sky, has 9 million and has taken 25 years to build up. Setanta did not do badly with viewers, getting 1.2 million, but there was no room for the unexpected. Like a global recession or the bad publicity from a poor customer service problem. Also Setanta did not appear to offer value for money. A Sky package costs far more but also includes far more. Especially a lot more of much better football matches. Then add in movies and sports and comedy and lifestyle and documentary and music , sci-fi/horror/shopping/quiz and many other channels. Setanta was not bad value for a die hard, rugby, golf and footy fan, but it did lead to football fans feeling they were being asked to pay twice. The competition rules, largely bought in to break up the Sky monopoly were inadequate. Only one of the six sold packages needed to be sold to a second bidder as well. This was the inferior tea time kick off, early start games.

But the real question that should have been asked when the directors sat down to work out their plan to topple Sky was


"Hasn't this been tried before? like ITV digital?"

The Setanta plan was thinking that people would not pay for Championship football but WOULD pay for Premiership football. That was a little bit wishful. Footy fans will pay a huge amount to watch Liverpool vs Man Utd but not a lot for Stoke vs West Brom. Setanta made the classic mistake of over paying for a product.

There are other reasons too. Short term private investment income, when long term investment was required. That same long term investment made very difficult to find when TV rights are sold in 3 year packages. Once Setanta lost two of its three
Premiership rights for 2010-2013 back in February it was all over bar the switch off.

Small "Cap" Corner

Some of my recent trading has been into smaller caps than I used to try with. These are much higher risk investments than others, so I try to keep the sums down to a few hundred in each one. My worst one managed to lose me 75% of money money in a few days!
On the other hand, African Copper made 300% in a few days a month or two later, so what goes round comes round.

Most small cap stocks on AIM or the FTSE main market are total dogs, the key is trying to find the few who are not. In addition, because of the very small amount of shares available, there are big pump and dump operations built up to screw private investors by persuading them to buy into an already overpriced stock.

Finally, the market makers hold a whip hand with so few shares and little volume available; they can to some extent manipulate the price of shares for their own profits.

All the above should serve as a warning that investing in small caps is just gambling, hence the need to keep stakes low. However, below are some of the companies I have either investments in or are on my watch list:

African Eagle Resources - This company has discovered a huge mine in Africa and is looking to confirm in the near future its potential. Plus it has the benefit of being well connected to transport which makes the mine viable, unlike many other African projects. The share price is currently 9p, although this week has been very volatile as investors await news on the quality of the find.
African Copper - An African company that owns a mine which it is looking to try to re-open after flooding, it currently has secured financing and if and when the mine opens the shares valuation will be much higher than the current 6p. This share has been pumped and dumped, so maybe wait until the price finds its new level before buying in.

Braemore Resources - This company has run out of money developing mining technology and could well go bust. Hence a share price of 3.5p. However, there are known to be several suitors for its leading technology - will they buy the company or just the technology from the administrators? One for the very brave only!

Heritage Oil - OK, so this is quite a big company now, but it was not a few months ago when i looked at it. With a huge oil find in Iraq, plus production too, this a a stable company. A recent announced merger with Turkish company Genel could propel it into the FTSE100. A share price of under £5 is a bargain.

Addax petroleum - Lots of M&A in the oil sector and this is another not so small firm about to get gobbled up by China or Indian state businesses. The share price has risen aplenty, but in my view there is still a decent premium from the £25 per share to an offer which should be roundabout £30. Short-term bet only this one.

Minerva - Property company with £600 million of debts, trying to re-finance and there should be an annoucement this week. At 13p per share it is priced to go bust, if they get the refi away then the share will go on a major rally, if not then it will head toward zero. Another one for the brave.

Right, I am always open to offers - anyone care to share their tips?

Tuesday, 23 June 2009

Is the FTSE going to tank now?

Friday and Monday have seen over 4% wiped off the value of the FTSE 100. That is a nice reminder of how things were back in Sept-October last year.


With this fall, there is much commentary in the finanical press about the end of the bear market rally and the next big dip.

What I think is less noticed is that the FTSE100 is still 8% down year to date, and that is after a year where it fell 30%. This is not exactly a great time for investors. If the FTSE falls now it is likely to be by a few more percent, not decimation.

As much as the comment now is that the rally is overdone, it is possible that the opposite is true too.

Having said that, I am preparing stop losses and positions generally for a renewed collapse in September/October of this year. We will need to see sustained improvements in many of the economic figures being published to say that we really have hit a bottom. Counter to this though, I expect inflation to kick-in next year and in an inflationary environment the stock market will be your friend

Monday, 22 June 2009

Bercow elected Speaker of Commons

Not a very economic story I know, but still, what a disgrace. The Labour party, vote for the candidate the Tories don't want. What a tribal bunch.

To make it worse it does not even seem to me that Bercow will do much other than pander to his own ego. If he wanted to do that he should have started a blog.

Guido called it right and has won a few hundered quid...I prefer African Eagle Resources for my punting money this week.

New site to cause terror in Right thinking people

If Alice is not enough to keep our spirits low, in league with The Major, then here is another new website which has a lovely clock just showing what a truly terrible job our Government and politicians are doing:

Debtbombshell.com

Plus of course, today saw yet another big fall in the FTSE 3% in two trading days. Is the end of the bear market rally is upon us?

RBS needs to be guided by Hester

This is the the story about Steven Hester being awarded a reasonable sum of money for leading RBS. I don't really see that he is being over payed.

if you run an organisation of 300,000 people then you deserve to get paid a few quid, I don't think he will get much chance to spend it with the hours he will be putting in.

However, I hope he gets the job right; RBS is in a very difficult position with huge amounts of bad loans still on its books. There is no magical way out for RBS and in particular a further collapse in the commercial property market could heavily impact RBS, and therefore the taxpayer.

What is less talked about is Sir Philip Hampton. Am I the only one who remembers this? Sir Philip led a massive rescue of BT because he and the CEO had bust the company. It has never recovered from this debacle and now is rated at just £1 for its shares, as opposed to the £4 they were then.

I hope Hester has the sense to not listen to Sir Phillip too closely....

Sunday, 21 June 2009

Big Companies UK in Big Trouble

We have seen Woolworths finally disappear from the high street as a result of this recession (and not replaced with any new place yet on my local high street).

However, for all the green shoot talk, the economy remains in a very dark place. Car production figures out this week were spun as being good because the rate of decline was reducing. The top line though is that demand is 50% down year on year. Similarly in the housing market, much is made of property prices stabilising a little; but the facts are sales are 66% down on the levels of last January.

These figures show that many people have their jobs and livelihoods threatened, as the economy moves to operate at a new, lower level of productivity. Let alone the Government who will be collecting fare less taxes to try and pay back its newly minted debt.

In the corporate world, here are 3 household names whose market and finances suggest they could not last another year of this in their current form:

1. British Airways - like Woolies, BA has been in trouble periodically for years. Massive unionisation leaves it very exposed to the competition of Easyjet and Ryanair. It has lots of cash, but is burning through this very quickly. Its pension deficit is twice the size of the company and is hampering attempts to merge with Iberia. BA has strong management, despite what bitter staff say and this is a big bonus, but with demand at these levels, the company has a tough time ahead. (Shareprice wise, I can't see any value until their shares go to nearly £1).

2. Vauxhall - Part of GM Europe that has now been sold to Manga of Canada/Russia. Vauxhall makes good cars but for a small market that is suffering from huge drop in demand. With a global corporate looking to reduce its capacity in line with the new market realities, there will be big cuts and Vauxhall is top of the list. I can't see Luton remaining open and Ellesmere port must be under threat. When Longbridge was shut its factory was moved to China, perhaps a similar fate awaits Vauxhall vans and maybe cars too.

3. Comet - This UK retailer is owned by French company KESA. It was spun out of Kingfisher (now B&Q) a few years ago. High street electrical retailers have been struggling for a long-time. Main rival DSG is though still just profitable and has recently raised cash to pay down debt. Comet is in a worse position, with the parent company unlikely to risk all to save the business; in addition with a bad recession in Europe there are a myriad of ways for KESA to be losing money across its businesses. All this before US chain Best Buy comes in and starts shaking up the market this year.

Saturday, 20 June 2009

Have a Care, Ed Miliband


In April Ed Miliband seemed to have squared the circle between maintaining some potentially problematic green positions, and keeping the lights on. In a neat bit of realpolitik he ruled that only ‘carbon-capture ready’ new coal plants would be granted approval – but set the CCR bar really low, maximising the chances that some much-needed new coal plants will actually get built.

It seems however that he’s not content with this clever stroke: he’s out to consultation on a material extension of CCR, and in grave danger of overdoing things.

New coal fired power stations should only be given consent in the UK if they demonstrate CCS on at least 300MW net (around 400MW gross) of capacity from day one. Each demonstration project would have to store 20 million tonnes of CO2 over 10-15 years. The proposed framework recognises that CCS demonstration will only proceed with Government intervention. A financial incentive funded by electricity suppliers will support up to four commercial-scale CCS demonstrations in the UK

CCS means actual carbon-capture-and-storage; and “funded by electricity suppliers” means of course that they will be responsible for levying us all to fund these demonstration projects.

Arguably, Machiavelliband may still have a weasel in mind:

We expect operators to make all reasonable efforts to maximise the operation of the full chain of a CCS demonstration

As any lawyer will tell you, “reasonable efforts” implicitly recognizes economic reality, and falls a long way short of “best endeavours”. But then he ups the ante significantly:

If operation of commercial-scale CCS proves to be particularly difficult or costly**, there is a risk that operators will choose not to make reasonable efforts to operate [the demonstration project] … We would not consider this to be acceptable … our initial preference is … the [entire] power station should not be allowed to continue operation

And so it goes on. Consult away, Ed, but don't expect private companies to invest on that basis. It begins to look more like one of Brown’s scorched earth strategies than intelligent energy politics.

ND


** which isn’t hard to envisage when, on the government’s own numbers (see above), it takes 400 MW of gross CCS capacity to yield 300MW of output, i.e. 25% is required just to run the CCS !

Friday, 19 June 2009

VAT increase angers retailers


Retailers have lambasted Government plans to bring the rate of VAT back up to 17.5% on New Years’ Eve as “insane”. Retailers are angry that the government is planning to increase the tax from its temporary rate of 15% at a key sales period, a move which, they say, will put further strain on the struggling industry.

A spokesman for the Treasury said there were no plans to alter the 13-month scheme.

Well they had better think again. Its the hardest day of the year to get people to work. Its even harder to get sober ones to work. Its also a day when the Head office and administration and IT departments are not usually working. Its a ghost day. Very little happens in the morning but there is a steady flow of the public from around 12pm when they crawl out of bed and bumble around looking for bargains. So quite uniquely the shops get busier as the day goes on, getting to the busiest point at about 5pm when most stores close up. It is a very, very bad day to try and implement a major change like a VAT increase.

Sir Stuart Rose, executive chairman at M&S, said the timing of a return to the 17.5% rate should be discussed with retailers. "Increasing VAT on New Year's Eve is an insane time," he told The Times. "If the Government had any sense, they would delay it for a month. The tax rise is at the worst possible time - right in the middle of the sales period”. The VAT cut was generally seen as pointless, despite positive words from some retailers. The VAT cut wasn't deep enough to 'kick-start' spending and the government claims of family savings of £200 month were quickly downsized to £10 week. It was estimated to cost £90million to implement and it was largely unwelcome. Treasury mandarins seemed to believe that marketing and display departments would love a £21.83 price point, as if they had thousand of unused merchandising cards for oddball prices just sitting in storage.

Sir Stuart is half right.The VAT cut cost £12.5 billion.
The Treasury cannot add another billion pounds to its debts. By the 5th January the "sales" are running, but the queues are over. The quietest trading time of the year begins. That is the time to change over. However I fear Mr Rose and the BRC are overlooking something that was very big news when the VAT cut was announced. Something that might make the New Year less jolly..



Thursday, 18 June 2009

Lord Butler Finds His Voice


This is Baron Butler of Brockwell, a decent and much-honoured man, who will go to his grave regretting that he failed to speak more plainly in his 2004 Report on the UK's intelligence failings prior to the Iraq war.

He'd hoped that his habitual Mandarin- speak code would make his findings clear. He realised immediately he was wrong, and that the Guilty Men had thereby been let off the hook. It haunts him still.

Today he has done his best to repair that mistake. In the circumstances, it's not a bad effort: and over the months to come who knows ? it might even rectify the situation rather well.

Perhaps the Guilty Men may yet be deprived of the honours they still seek, and be plagued by the restless nights they deserve.

Sleep a little easier, Lord Butler.


ND

Fred's pension

The ex-RBS CEo has come over all MP like and wants to hand back the money even though he did nothing legally wrong.

He still gets £342k a year. Not enough to keep a football club going then....

However, yet again the MSM are missing the point that he earned this money whilst a partner at Accountancy giant Deloitte. Where he was the partner appointed to wind-up the bankrupt BCCI bank.

So Sir Fred has made two fortunes in his career, one tidying up the mess of a broken bank and the next doing the opposite....

Mervyn King: Vote Tory for sane policies

This is the gist of his aggressive speech at mansion house last night. After Alistair Darlings' soporific musings on nothing in particular, Mr King came the fore in saying:
1. Government spending is out of control (and implicitly we will have our debt rating downgraded without some concrete policies); this is an attack on both main parties.

2. A plan is needed to REDUCE the deficit; this is in direct contrast to Brown/Darling who have said spending will increase.

3. The Bank of England needs more powers; again this is the Tory policy and the opposite of Labour, who said everything is fine really.

4. The big banks are too big and ways must be found to control them, this is partly an extension of point 3, but again is the idea being floated by Richard Spring of the Tories to separate Investment banking and Retail banking.


On reading the reviews of this speech, there is no other way to see it. it is a huge criticism of the current Government and a vote of confidence in the opposition. I don't think the Bank of England Guvnor has set himself into such a position, certainly not since independence in 1997.

No doubt, Mr. Brown will come up with some new ideas to restrict the independence of the Bank in short order. The FSA is much more compliant with his views after all...

Wednesday, 17 June 2009

Darling, to the City; Que Paso?

As usual, the mansion house speech by the Chancellor is being leaked to friends this morning. So after dinner this evening it will be an even more riveting listen for the audience. Hearing Darling say something you have already heard about, in that wonderful voice of his.....I hope they are serving black coffee!
Worse, the UK Government proposes to do nothing of any import, as posted here Monday. The FSA is fine, the Bank of England is fine and so on. Minor changes needed, biff those nasty hedgies etc.

No mention that the Labour Government might cave into Europe and see the City (and thereby the Country it supports, like it or not) ruined. No mention that Obama and the Tories think radical change is needed.

No mention that the Banks themselves are in favour of an overhaul to Basle 2 regulations and the imposition of rules for pro-cycliality (that is, fixing the roof while the sun is shining in bank lending terms).

Nope, we have finger in the ears government today. After all none of this is our fault, it all started in America.

Tuesday, 16 June 2009

UK Inflation; Refusing to conform

This is a story that can be overdone in the reporting of it, but nonetheless is of some import.

The UK CPI inflation rate has dropped from March 09 to April 09 by 0.1%. Instead of 0.3%. Ho hum big deal, the rate is now just 0.1% above the Bank of Balls (that should read England, ed) target of 2%.

However RPI remains firmly in negative territory at -1.2%.

Much of the media is saying that this fall less than economists predicted is very worrying. Well yes and no. Economists tend to get everything wrong and over the past year they have been living up to this reputation spectacularly. It does not matter if things are about by 10 basis points or so.

However, inflation is being loaded into the system via printing money. Just today a very canny hedge fund (up 234% last year, no less) decided that hyperinflation was on the cards and it has started to raise funds for a new fund to make money out of this. last year they thought the banks would all fail, so I for one am not going to bet against them. They have a lot more riding on it than the say so of economists.

CPI does not look like it is going to go negative this year, or to do so only for a few weeks; so hooray for Printing money! The pain of this success is yet to come, that is for 2010 and beyond.

Digital Britain - Who cares?

This morning the Government published a very expensive white paper on digital Britain. Unsurprisingly the narcissistic media like the BBC are running with it as a top story of crucial import.
But really, who cares? Having read the briefs, there is nothing in the report that a competent department of state could drive through without the assistance of a White paper report.
This paper cost a ton of money and was completed by Lord Carter, respected so much by the Prime Minister he was removed from his position at No. 10 within months of his joining. So it has credibility for the ages. The City knows this is simply his pitch to get the CEO's job at ITV.

In addition, a fag end government is in no place to really drive through any of these changes in any event. There is no time in the parliamentary calendar; they are too busy choosing a new speaker.

The best thing to do with this report is to make sure it is the last one. The UK's finances are in a shocking state, as Guido reports today, this is just another waste of money on hot air that we do not need.

Monday, 15 June 2009

The real dividing line between the Conservatives and Labour

I recently thought that right leaning bloggers, such as Dale + even more independent minded ones were wrong to demand that the conservatives should be honest about tax cuts.

I knew Brown's boys would never admit to a penny off any department and would be proclaiming ever higher spending, financed out of exaggerated, badly rounded, misrepresented and just plain untrue tractor stats.

Labour have been proclaiming Tory cuts mean an end to hospitals, schools and even food for pensioners.

My argument was never give your opponent the argument they crave. Brown desperately wanted the Tories to say they would make cuts of any size, to let him make his social concious, spending is just investment arguments, against the heartless Tories of the 80's.Labour are the party of investment, the Tories are the party of cuts. Today the shadow chancellor decided to do just that in a piece in The Times.

Having seen Question Time last week when Peter Hain tried just such a tactic, he was eventually reduced to pleading that if the audience didn't vote labour then they would only have themselves to blame when the cuts came. The audience , by around 2/3 , did not agree. People do appear to have understood that there is no money. No money today and no money tomorrow. Even more astounding was the media. The bloggers pointed out the holes in the Labour arguments immediately, but the newspapers, the networks and even the BBC were not fooled either. Instead of reading the press release , they actually analysed it. Just yesterday John Pienaar again contradicted the studio anchor and his 'Tory are milk snatchers' guest, making the point that what the Tories propose and what Labour propose are within a hair of each other.


The new strategy of telling a version of the truth, that I thought very risky, does seem to being received quite well.. the people do appear to understand. Whether this will continue when they are told the details, like schools must merge, class sizes must rise, train tickets must go up 15%, parking charges will triple etc remains to be seen. For now it appears that Gordon Brown is making a mistake. He is fighting a previous war, with old, obsolete tactics. He does not seem to have learnt, post Expensegate, that saying "I will be more open and honest"is not enough. He needs to be seen to be open and honest and with Malik and Iraq he is off to a very bad start.

The Conservatives can manage to simplify their message to chime with all the workers being asked to take zero or minus pay rises, or who have had to cut out holidays or luxuries. If you spend £4 when you get in £3 you will eventually have maxed out your credit card, and will be paying a hell of a lot of interest on what you have spent. This message does have power. It points out the previous overspending of Labour and highlights that further continuous overspending is impossible. It can highlight the astronomical black hole in government spending and income, and allows the Tories to say at least they are being honest, unlike ponzi Brown who promises what he knows he can't deliver. There is the rich vein of broken manifesto promises, from student fees to the top rate of tax, for Mr Osborne and the shadow cabinet to mine.

If the media continue to probe and expose the economics of the situation, George Osborne's new found honesty may just be letting Gordon Brown dig himself into a verbal hole increasingly difficult to spin his way out of. It allows the Tories to steal the PMs 'prudent'cloak, his trans-pear-en-sea rhetoric, his honesty helm and move Gordon's favourite 'public investment' ground onto the less certain 'debt crisis' territory.

I was wrong to worry. Rather than be the argument trap that Brown has laid for Cameron, it appears to be the argument that Cameron wants, and Brown may fall for.

Bank Regulation to the fore


Over the weekend the first leaks of what changes to financial regulation seeped out of Washington and London. Peston has the highlights and his take on it here.

What is missing though is anything either exciting or bold. It is firmly in the lets tweak things a bit and hope it never happens again bit.

There is for example no core consideration of preventing banks from becoming too big to fail. This was the biggest issue in the crisis. AIG, a non-bank but still a big trader, has cost the US Treasury over $100 billion, which will never be seen again. Indeed much of that money seems to have come the way of Barclays and RBS banks'.

So no big knife to cut up the industry, little comment on the need for any accounting changes or thoughts about what may cause the trip up next time.

What does this tell us? That in their hearts, the US and UK Government know that they were the prime cause of the crisis with low interest rates and large money supplies warping the system. If they did not think this, the changes put forward would be more radical.

Sunday, 14 June 2009

Shrinking Before Our Eyes

So, today our Thomson Local directory for 2009-10 drops onto the mat. Comparing with last year's edition (covering the same geographical area):


- Total number of companies listed: virtually unchanged
- Total ads, by page-area: down 29.9%

There is obviously a lag-effect going on here - and possibly some bravado, as Thomson carries on listing companies it hasn't heard from for a while, to keep spirits up. But it is surely only a matter of time before the collapse in advertising translates into a fall in the number of firms with a pulse.

ND


photo (c) N Drew 2009

Friday, 12 June 2009

They all confess in the end..


Following the murder of the Leningrad Party Secretary, and Stalin's rival, Sergei Kirov in 1934, an assassination almost certainly ordered by Stalin himself, the Moscow trials took place. At the trials old Bolshevik veterans confessed to the world their most conspiratorial crimes against the state that they had helped to create. Krestinsky held out, the only accused to do so. he denied he was a traitor, or a Trotskyite, or that he had committed any crime at all. He was led away and brought back to the trial the following day where he was asked again..

Krestinsky:{accused} Yesterday, under the influence of a momentary keen feeling of false shame, evoked by the atmosphere of the dock and the painful impression created by the public reading of the indictment, which was aggravated by my poor health, I could not bring myself to tell the truth, I could not bring myself to say that I was guilty. And instead of saying, "Yes, I am guilty," I almost mechanically answered, "No, I am not guilty."
Vyshinsky:{judge} Mechanically?
Krestinsky: In the face of world public opinion, I had not the strength to admit the truth that I had been conducting a Trotskyite struggle all along. I request the Court to register my statement that I fully and completely admit that I am guilty of all the gravest charges brought against me personally, and that I admit my complete responsibility for the treason and treachery I have committed.


Former Comrade Hazel Blears held out a little longer. But she too decided to confess today to the Manchester evening news.

An apologetic Hazel Blears has revealed three major regrets - including her 'cruel' YouTube joke against Gordon Brown.

The Salford MP wished she had not worn a brooch saying 'rocking the boat' the day after her shock decision to quit the Cabinet looked set to end the prime minister's reign.

And she bitterly regretted the timing of her resignation, on the eve of European elections, that saw Labour's vote dip under 16 per cent for the first time in nearly 100 years.

"I genuinely thought I could go without it sparking off this huge firestorm. In hindsight that judgement was wrong," she said."I should have waited until after the election. The effect on the party is something I will live with forever."

The Rocking The Boat brooch, seen as a not-very-subtle message to Mr Brown, was a gift from her husband.

"It was a stupid thing to do but I think it was just trying to put a brave face on - not going out cowed on the basis of expenses claims that genuinely are not true," Mrs Blears said.

Kretinsky was innocent of anything except being a communist and a threat to Stalin's future power. He was only trying to save his and his families lives. Hazel was suddenly made aware she could be deselected and have to answer some uncomfortable questions about capital gains tax and tax evasion.

Krestinsky was shot. Hazel was only shot to ribbons.

Stalin took personal charge of the investigation into Kirov's murder. Everyone connected with the killing, including many of their families, were shot or suddenly and surprisingly ceased to continue living or just disappeared. Has anyone seen Jacqui Smith recently? And will there be any more 'spontaneous displays of remorse' from the other failed plotters?

On the move

Moving home this weekend, which means no broadband, no time for blogging and lots of stress. Not many posts from me until next week!
Have a good weekend all.

CU

Thursday, 11 June 2009

North West Hutton: An Old Oilman's Story

Draw up a sandbag and swing the lamp …

The other day I noticed an article announcing that the largest offshore oil platform ever to be dismantled - North West Hutton, from the North Sea – had finally been brought to shore for scrap. This has indeed been a technical triumph – but not necessarily for the reasons BP would have you believe ...

* * * * * * *
North West Hutton was discovered in 1975 by Amoco, 130 km north east of Shetland in 143 m of water. It was indisputably a huge find, set to rival its neighbour, the mighty Brent: but its geology was complex: “a series of tilted fault blocks and extreme lateral and vertical heterogeneity”, i.e a large number of small, hard-to-access segments or, in the words of the senior Amoco geologist, “a tub of guts”.

But engineers love building things: so the owners went ahead and built a huge 39,000 tonne platform, which went into production in 1983. However, even after 55 wells were drilled, the worst fears were realised and the field would not yield its oil. Production should have been 130,000 barrels per day: it peaked momentarily at 86,000 and fell back to 20,000 – a technical and economic disaster, made worse by the oil price collapse of 1986.

A disaster of another kind happened at Piper Alpha in 1988, and the Cullen Enquiry recommended that expensive safety modifications be made to offshore installations. By its tenth birthday, the financial status of North West Hutton was distinctly sub-economic - a candidate for early decommissioning.

But abandoning North Sea platforms comes at a huge capital cost: so every day’s delay in recognising the inevitable is money in the bank. And every small thing that can be done to eke out its life is an effort well spent.

Amoco set to with a will. An new Offshore Installation Manager (OIM) was appointed; a feisty Welshman, the kind of engineer who sees things in black and white. If a widget is strictly needed, it stays: if it isn’t, it goes. He started stripping things off the platform on a very large scale – and as with so many engineering projects, there was plenty of gold-plating to sacrifice. And with every widget that goes overboard, another widget – whose only purpose was to monitor the first one, goes too. Soon, he’d stripped the platform down to the bare essentials – and that was pretty damned bare – slashing operating costs and buying several years of delay.

Ten years on, with BP now in charge and oil prices even lower, the inevitable seemed at last to be nigh: so a complex decommissioning scheme was devised (no hurry, chaps!) ‘Production’ – by now a derisory trickle - ceased in 2002: the scheme was approved in 2006 … and in 2009 it’s all over.

Funny business, economics. Happy days !

ND

Wednesday, 10 June 2009

A newly spun plan for Northern Rock

The Treasury, ever keen to help out its former/current leader, Mr G. Brown, is today alleged to be looking at a sale of Northern Rock by the end of this year; just to show how right the Government has been in this crisis.

I doubt this will happen as the current sunny uplands of green shoots are going to get a rough ride when we come round to September/October again, if not before.

Also, what is Northern Rock now? 50 high street stores, a current account and savings business and a £100 billion mortgage book of dodgy interest only mortgages. Plus the Government has sunk £3 billion into the beast to maintain its capital.

Then there is the work out of the funding structure Granite and the fact that the Government wants to use the Rock to encourage more lending to residential mortgage market. No one will buy this at a good price and half the banks in the UK won't be allowed to for competition reasons in any event.

Instead there will be a 'spin' operation:

*Northern Wreck will be stripped of all toxic assets that will be lumped elsewhere in UKFI (the Government vehicle).

*Only the savings and 'good' mortgage book (what is left of them, most of these mortgagees have been pushed to refinance elsewhere and the money used to repay the £25 billion loan, did I mention the Rock still owes another £8 billion).

*Accounting trickery will be used to show most of the Government money is repaid or converted in bonds or some such mechanism.

*A willing buyer, like Virgin Money, will be found and will pay a sum of money that can then magically be shown to have made a profit, say £1 billion or so for the taxpayer.

Champers all round for the Socialists who have outsmarted the Capitalists!

(N.B Event not to be held in the same room in the treasury where the hidden losses and toxic assets are to be left to quietly rot away, out of sight and mind of the voters)

Tuesday, 9 June 2009

What is the Peston agenda?

I note today that one of the UK's top business bloggers, Robert Peston, is again following a track on Executive Pay. This time about a retiring Shell executive.

Robert has posted a few times on this topic recently. Perhaps he sees the MP's expenses story and thinks there is a read across to a juicy business topic?

To me, Fat Cat Salary stories are a nothing, the money generally spent on Executive pay is a nothing in large companies compared to the price of decisions and investments the guys/gals make; If they do a bad job they get fired too. Shareholders can hold them to account if they can be bothered. Major corporates are not run like the BBC after all!

I do though wonder if Mr Peston has another agenda, is it possible this is a mild broadside about one's own pay negotiation? Are there not some rather fat cats within the BBC with whom one would like to be remunerated at a similar level, like Wossy for example?

We shall see in due course, will he stay or will he go?

Monday, 8 June 2009

Will Brown sink the £ and FTSE?

Even as I write there is speculation of an emergency Cabinet meeting being held this afternoon ahead of the meeting of the Parliamentary Labour Party this evening.
Also the FTSE has been down well over 1% today, dragged down by State owned banks and mining companies on the whole. The £ too has shed over 5% in a week against the dollar on the back of UK Government instability (Now there is a short opportunity I should have seen!).

I think the meetings today are over-hyped and that the media storm will blow itself out and Brown will remain in office but not in power. However,I hope I am wrong and stranger things have happened in politics.

All the whole, the markets have been in a very low volume funk for the last week or so. The power of the bull run from March is clearly at an end as the Summer encroaches upon us. Now is a dangerous time for the rally to be exposed as a Bear Market rally and a new dive in the FTSE and £ could be very dangerous.

At this time, having an unstable Government is about the worst political thing we could have, even more dangerous than Ed Balls as Chancellor. Labour need to sort it out one way or the other. More dithering will chop 5% off the FTSE this week. My short will go on later today at this rate....

Euro election spin


If the Conservatives are polling 29% in East Renfrewshire then its very bad news for Labour.
UKIP and Tory splitting the vote between them and still managing to come 1st and 2nd.
Lots of Labour talking heads and Meps and MPs and bloggers talking up how in 2004 they suffered a reverse but bounced back.

A good bit of driftwood to clutch at in the stormy political sea. Except it is nonsense.
The 2004 kicking was specifically aimed a hurting Tony Blair. Not Labour.

The public and especially Labour voters wanted to punish him for Iraq.
The Euro elections were a perfect opportunity. Kick the party without doing it any real harm. Send a message loud and clear without fear of letting in the Tories.

This time it is different. Very different.
Despite every protestation that Gordon Brown is solving the economic crisis not enough voters believe that he is. Many believe he caused it. More that he has not done enough to solve it and what he has done has been wasteful and partisan.
If voters have been repeatedly told that there is a load of help for them at JobCentrePlus but there isn't anything more than there would be in normal circumstances, then all those, and other, promises appear false.

Labour ministers and activists who are expecting a big bounce back are deluded. Of course there will be a boost, but on these figures there is no possible recovery.
Hoping something may turn up is ridiculous. Something might, but it might also get worse.
The economy might improve but it might not. And the normal travails of politics will continue.
Dangerous dogs, gang crime, flooding or a doctor refusing a minister access to a hospital because
of some funding issue, or something. These stories occur all the time. They all wear down an incumbent. Labour could not allow even one more "Baby P" story to break, yet is entirely powerless to prevent them.

The Tories, in their darkest days, did not think that they would become the third party of politics. As it stands Labour must give serious consideration to becoming the Fourth.

Sunday, 7 June 2009

Final Salary Pensions? Only in Parliament

In a truly awful weekend for the UK; Government paralysed, celebrities like Suralan given jobs in Government, the Prince of Darkness promoted to be the real Prime Minister. There is another longer running story that is very bad news.

This is that many companies are using the recession to end their final salary pension schemes, even to current members. I know, pensions is not the most exciting subject, but this is sad news for all the generations of this country.

I am saving for a private pension, by my own reckoning I will end on about one fifth of my final salary is I save 10% a month of my salary. Final Salary schemes on average are 4x as generous as this. It is a huge pay-cut too all staff who are taken out of such schemes or whose companies close them.

Even worse, the reason they are closing is because companies cannot afford them at the moment and the Government has robbed with taxes the other types of pensions savings.

Only the Public sector and MP's will soon be left with such generous pensions provision. And this is payed for by the put-upon private sector who will have to find new ways of reducing employee wages in order to pay taxes and try to make profits.

The situation is untenable and will come to a head one day in a political crisis that will make today's events look like a mild disagreement at a dinner party.

Saturday, 6 June 2009

Ken Livingstone: A Prediction

Amidst all the talk of Mandelson having gripped the situation, let us observe the familar figure of Ken Livingstone shuttling between the studios, putting in a series of characteristically pugnacious, steely and intelligent ultra-loyalist performances. He's playing a blinder, according to some Labour insiders.

Here's a prediction.

Commissar Ken will be positioning himself assiduously as the authentic voice of sane, electable, never-say-die Labour. He will bag a safe seat (if any there be) in the widespread post-PorkerGate fallout. He will exert himself tirelessly at the GE.

And then ...


ND

Friday, 5 June 2009

What a disaster. Live !


Poor Gordon, trying to conduct a reshuffle, being undermined by his new appointments quitting as he speaks. Gordon has denied that he ever wanted to move the chancellor from his post. Brown is using his ability to tell and retell a lie over and over while making it sound like the truth to great effect. He even managed to make the appointments of Dawn Primalo and Glynis Kinnock sound like the bringing in of positive assets to his government, instead of the scrapings at the bottom of a very empty barrel.

Here we have had a sweepstake on future cabinet appointments this week. I thought I was on a loser with my poor picks, but now I'm not so sure.

- Gary Neville
- Adam West
- Katie Price
- Diversity
- Sir Ranulph Fiennes

{ if you want to play yourselves its easy. Pick a cabinet post, say minister for local government, and then go to google serchbox. close your eyes and bash the keyboard three times. The first coherent name out is your choice. Try it.Best entries into the comments for final adjudication
It seemed a far-fetched way to run a country last week, but today..its as good as any other method in use.}

Exclusive: Pictures of No10 reshuffle 'war room'

This was a live picture taken by our man-on-the-inside just minutes ago, as as Gordon Brown shuffles round key advisers on his 'war map' during this momentus day in UK politics.
BBC Live blog, eat your hearts out, you've missed the story again!

Labour Resignation Quiz


Who is the man in the story Dennis MacShane is referring to and when is the incident?



"Mr MacShane voiced the hope that the government would quickly recover from
the resignation, in contrast to the last government, which was severely
damaged by John Major's dithering over troublesome ministers. "Compared to
the Tory resignation sagas, when ministers hung on for days and days, the
Prime Minister has reacted quickly and cleanly."

Thursday, 4 June 2009

Political Funeral Blues

Hide all the clocks, and hide that mobile phone,
The Cabinet’s told Brown he’s on his own.
Prepare the padded cell; sedate the bum
And let the headshrinks in their white coats come.
ND

Making Democracy Work

I voted for Tim Worstall and his team today. If you have not voted yet ask yourself, why not? 70% odd percent of our legislation comes from Brussels so in many ways the Euro elections are more important than the General Election.




Even better, go vote and then look at this new site launched by Tim Montgomerie, the Union of Voters. I think this is a great idea, one thing recent events have proven is that a step in the right direction for this country would be one that ends the culture of the' Westminster Village.'

Wednesday, 3 June 2009

Apprentice Final: What Sir Alan does not say?

The BBC series The Apprentice with Alan Sugar (A man I could not imagine working for in a million years!) reached a semi-final. 3 of the remaining candidates got fired, whilst 2 remain. The clear favourite is Kate Walsh (Picture at the bottom)who is easy on the eye to say the least. Kate is a good candidate and 27, with bags of experience. Perhaps not the most dynamic but I can see her getting her way in a male dominated office environment. Rather like the Winner Sir Alan picked when Michelle Duberry, pictured to the left, in 2006. Michelle though did not last long and went her own way to find success.
Perhaps the harshest eviction was to Debra Barr, pictured classily in her undies. Debra being 23 clearly is not someone you would want to pay £100,000 a year to with so little experience. Sir Alan avoided this and simply said she was too divisive and driven; criticising someone in his own image!



Still, who says the BBC don't do quality entertainment...

Farewell Then, Vauxhall ? Bring on The Russians.

Never mind the demise of assorted clapped-out old bangers of Labour ministers: are we to lose Vauxhall - producer of the rust-buckets of my boyhood ?


Perhaps Mandelson can have a word with some of his Russian chums ... Interesting factoid: the Russian word for a main railway station - Вокзал - is a transliteration of Vauxhall. (I used to have an office beside the one below, in Moscow.) The noun derives from our own Thames-side locale all right: but opinion is divided as to whether it was the station there, or the pleasure-gardens of yore, that inspired the Russians thus.

So Deripaska should be in like a ferret up a trouser-leg ! At least I think that's what Mandelson meant.

ND

Defending Ed Balls for Chancellor..


In 2007 Ed Balls was an outside bet to be made Chancellor of the Exchequer in the new government of all the talents. A massive promotion for the most junior of Treasury Ministers . But Balls had long been a loyal apparatchik to the great helmsman.

Commentators thought he would be a disaster. Despite being a better economist and a better politician than Darling, he suffered the exact same lack of communication and lack of empathy and personal skills and boorishness that afflicted his master. He also possessed the same tribalism, bias, partisan party loyalty and above all arrogance. The city thought little of him.
John Rentoul at the Independent, almost alone,wrote that Balls should be Chancellor. Iain Dale had a nice line on Rentoul's piece.

" Rentoul comes up with all sorts of historical justifications for it, all sorts of quotes praising Mr Balls and meets all the objections to him head on, bar one. And that is that Ed Balls is, well, a bit rubbish."

It was rumoured that it was Balls/Cooper who were pushing Gordon Brown to call the earliest of early elections. They would capitalise on a Tory government in disarray, a honeymoon period, the defeat of the Blairites, the removal of Blair himself and gaining from a big bounce in the polls.
In the end it proved a poor decision that began the demise of Brown.
However this should not detract from the fact that Ed Balls was right. Brown should have called an election. It would have headed off a lot of the problems he faces today.
Balls understands strategy.

Balls has developed. He has powerful contacts. Look at how little his own second home claims have featured. The Mackay/Kirkbrides hounded from office. Balls/Cooper barely rates a mention. That is not an accident. Its contacts. The Times ran "ED BALLS, the schools secretary, used Damian McBride,to smear ministerial rivals and advance his own ambitions," Anyone remember? Did it harm him? Ed Balls has that political savvy.

As the schools minister he said sorry for baby P, way, way in advance and at odds with the PM.
Minutes before at PMQ's Cameron was actually flinging papers in anger at Brown for his lack of human feeling over the death of the child. Gordon Brown wouldn't say sorry. He accused Cameron of making political capital from the death. The Prime minister gave one of his worst ever, slab faced, boring, robotic, unsympathetic readings of a prepared statement. {youtube pmq's 12/11/08}.
Ed Balls has said sorry many times. And said it with enough contition for it sound genuine.

Ed Balls has not had much success as Schools Minister. The Sats for 14 years olds disaster. The pointless "parenting contracts" , the lack of funding for 17, 18 years olds staying in school. "So What?" The list is long, the successes few, the failures many.
But Ed Balls is a political animal in the same mould, from the same streets as Brown, McBride, Watson and Campbell.. At this time, at the end of this government, this is probably what Brown needs. He has lost his street bruisers. His whips aren't whipping. McBride has gone.Tom watson is going. He needs a powerful brawler. Someone who knows that if the ship sinks, then he sinks with it. Politically its just the right thing to do. Brown's enemies are plotting. Upsetting Blairites and backbenchers is hardly a problem now. Its scorched earth time. Alistair Darling finally defies the PM at the last budget and said NO." No, there is no more money. No more money for 20 years!"Ed Balls may not be so worried about finding some stimulus money and the Prime Minister has an opportunity to tip Mr Darling into a face saving, "reward for a tough job" position at the recently vacant Home Office.

In the Prime Minister's words,
"Its the right thing to do."


Well the right thing for him. If its right for the country though...?

Tuesday, 2 June 2009

A look back at Jacqui Smith's tenure.

A quick look at Jacqui Smith's time at the Home Office.
She hasn't suffered the same level of anger from her constituents as Julie Kirkbride did from hers. Both were popular MP's but somehow JS seems to have escaped the wrath that forced Kirkbride to quit. Quite how Jacqui manages it I have no idea. The "Timney" letters were enough to discredit her completely in my eyes a long while back. Since then she has soared ever lower.

Still she was the first UK female Home Secretary. A place in the history books assured. Even if only as a perfect example of the Peter Principle in action.



Return of the Pound; Get your summer holiday money now!


The UK Pound Sterling, long-suffering under the control of Mr. A Darling and Mr. M. King, has staged something of a rally these past few weeks.

Not long ago sinking below parity with the Euro was the talk of the town and reaching parity with the US Dollar. But like a phoenix from the flames, the pound has reached nearly 1.15 to the Euro and the US Dollar rate is a mighty 1.64 today.

Behind the rises are a big move in closing short positions on the Pound and also a flight away from the dollar into more risky assets. As such demand for dollars goes down and so the currency falls.

However, there is no sign as to whether this is a longer-term trend coming into play. More likely, this currency reversal will itself reverse when the equity markets end their rally in the next couple of months.

As such, if you are planning a trip abroad over the summer, think carefully about when you buy your currency. Now may be a good time if you can afford to put the money aside. Alternatively, watch the global markets, if there is a strong downturn the currencies will follow quickly, so don't dither.

Monday, 1 June 2009

Franco-German Lynch Mob Approaching the City

While Brown fiddles . . .

Gordon Brown is (to use William Hague’s memorable phrase) ‘on manoeuvres’ in every broadcasting studio in the land, trying to sell his mendacious official lines on recent political history, and to deflect the nation’s attention from his manifold sins and wickednesses with risible constitutional plans.


Thus is his own attention deflected from the serious stuff that is going down at the court of President Barroso. The green-eyed Euro-monster has decided to lay claim to future financial regulation, the better to strip London of its central position in world finance – an ambition long nurtured in Frankfurt and Paris alike. The lynch-mob is approaching the City.

Personally I am ambivalent on Euro-regulation: in my own sector (energy, in case you hadn’t noticed!) the Commission is squarely on the side of the angels, and has battled manfully and tenaciously against entrenched Franco-German resistance to open markets.

But on financial regulation I fear the worst. We weren't *ahem* entirely fullsome in our praise here (and here ... and here ... and here ...) for the Turner Review - but at least the FSA is dealing quickly, fairly openly, and with some degree of sophistication with the right issues. Brown – if you are not going to call your innings to an appropriately early close, at least get out there and slog for Britain against the barbarians.

ND