Tuesday, 30 November 2010

New UK Nuke To Be Built . . . Errr

Stirring headline in the Telegraph:

"Consortium to build UK nuclear power plant: three more energy companies have officially joined the race to build nuclear plants in Britain. Scottish & Southern, GDF Suez and Iberdrola are planning to construct their plant adjacent to the Sellafield nuclear site in Cumbria"

Wow, that must have made Chris 'Crapper' Huhne's day. Oh, wait a minute ...

"They will not make a final decision on whether to go ahead with the project for another five years"

Ah, that sort of 'race'. Keep up at the back, there ...


Next steps in the Euro Crisis

As said here many times previously, the euro is a currency union that was never going to survive its first real crisis. Well today, here we are right in the eye of the storm. People like William Buiter are feeling free to chuck around assertions that the periphery countries of Europe are all insolvent.

The crisis, which I fully expected to subside with the irish bailout until Q1, is continuing. Goldman Sachs' intervention suggests that the US is keen to keep the Euro area in focus for a while and see what damage it can inflict on Germany and France. German bonds are now tracking the perphery bonds, the crisis is everywhere.

There are though only 2 real options left now:

1. Massive Quantitative easing from the European Central Bank. The bailout funds are not big enough or accessible quickly enough so a one off debasement will really help here. Of course, this is great for German exports and less good for the US where it is itself using quantitative easing to try and devalue its currency.

2. Full Fiscal Union - the other approach is to end nation state soveriengty over their own fiscal affairs. Bonds issued centrally would be of better able to finance the periphery and only marginally more costly to Germany and France.

However, which of these is easier to implement politically and practically. Number one by a mile; more QE it is then....

Monday, 29 November 2010

Goldmans lay into the Euro

Could not help but be fascinated by the interview with Jim O'Neill, finding time at Goldmans not to work on a huge leverage buyout of Man Utd, he opines on the Euro.

Nothing wrong with that, we are all doing this it is a serious issue. Now very poor Telegraph writing has this being a Black Swan article. Now of course Black Swan is Nasim Taleb, another US economist. Not Jim O'Neill, the journalist wants to the reader to get scared though is the message this is sending me.

Then O'Neill goes onto say the Euro is over-valued (against what? and how in a currency war...the US and UK are printing money out of thin air). So now my question is, what is the Goldman angle?

Goldman are the Squid of old, the arch users of everyone and everything in the world. This statement will therefore be well considered. Are Goldman's here helping the US Government by trying to get the Euro more into focus?

Or are Goldman's short the Euro and keen to press home now whilst their positions are good and to buy them time before any bailout may work?

What do you think, these moments are always significant?

Sunday, 28 November 2010

Another Sunday, Another Irish bailout

Storm clouds gather again
Here we go again, hot of the Pestowire (showing signs of life recently now that world financial confliction is back upon us?), news that the UK is to offer the biggest bilateral loan to Ireland. At 5.8% no less. Which all in all is a pretty good deal given that the UK is currently borrowing from the markets at 3.3%.

A cool £96 million profit there for the UK in arbitrage terms - beware what you read about the UK adding to its woes here, it is nothing of the sort. Worse news for Ireland though is that teh National Pension fund is being pressed in for the bailout. If this does not work, there is nothing left - the Eurocrats are forcing everything to be bet on the non-default scenario.

However, also coming out it the news that the Germans are up for doubling the Euro Bailout fund so that it can cope with a Spain rescue in the near future. This will be another drain on UK resources and the margins on the loans won;t be so attractive compared to our increasing debt burden.

All in all I quite like this as it means we reach the end game sooner - we will learn whether there is enough political and economic capital to save the Euro during this crisis. Sadly, as it is an economic millstone, I think it will be saved.

Saturday, 27 November 2010

Its growth Jim, But not as we know it..

Retail sales growth improves
High street retail sales growth sped up in November
The business lobby group's distributive trades survey showed a balance of 43% of retailers reported a rise in sales in November against a year earlier, with grocers and clothing retailers the main winners.

Hooray! Except... what have we been saying here for months about the inflationary pressures on certain sections of the retail industry? Was it 'Both grocers an clothing have been badly hit by the rise in the cost of commodities, grain and cotton.."

The cotton 15 year high price was in May, when the last of the Xmas stock was bought. Since then India has put further export restrictions on the fibre, which can only make things worse. China has released its grain reserves onto the market to try and reduce food inflation in China, CPI running at 4.4% there.

Rises in sales do not necessarily mean an increase in footfall and higher quantity consumer spending or greater profits. If anything the high street is quiet. Only the last two weeks have sen the sort of movement that indicates a good Christmas, and, in general, not by enough.
The December figures will be helped a little by the beat the Vat spending, but not until companies report profits in 2011 will we really know what's occurred.

Not that that will stop the newspapers running their seasonal 'shoppers shake off austerity and beat the Vatman' story. They will print the till receipt year on year figures and that will look good..even though it probably isn't.

{Big seller is the cuddle chimp. And the musical snowblower. {it plays jingle bells and has lights .} BQ Industries, somewhat unexpectedly, sold out of those in October.
The more traditional 'Better homes than yours ' type items, like tall pyramid advent candles and top quality wrapping paper and bows, etc, have barely moved as yet.

Standard's Slipping - Again

CU has had cause to chastise the Evening Standard for its poor financial reportage; and I return for a spot of R&R to find therein a piece of complete (and possibly libellous) fiction, penned by one Nick Goodway, who is berating Clare Spottiswoode for her performance as Chair of the Independent Commission on Banking.

"This is the same Spottiswoode who was head of the regulator Ofgem when British Energy virtually went bust"

Errr, no. Such a short sentence, and so little truth. Spottiswoode was never head of Ofgem. At the time when BE went under (2002), she was the newly-appointed non-exec Deputy Chairman of BE itself. Far from the implied role in its demise, she was in fact one of the players who helped clean up the mess. For the avoidance of doubt, she is not my aunt or anything ... I just don't like outright nonsense polluting the airwaves.

That said, it isn't wrong to be keeping an eye on La Spotti and her Commission over the coming months. Her track record as a regulator (Ofgas 1993-98, by the way) was one of enthusiastic free-market rhetoric at the macro level, and rather depressing regulatory capture by British Gas at the detailed level, where much of the action always is. She could never quite believe that polite men in smart suits could be lying through their teeth to her.

Having the right instincts is fine as far as it goes, but will she be a match for smooth bankster-lobbyists when it comes to the all-important nitty-gritty ? She relied heavily on others to do that stuff for her at Ofgem, and it is to be earnestly hoped the Commission is properly staffed.

We shall see.


Friday, 26 November 2010

Euro crisis helps Germany, hurts UK

As posted previously, I am very cynical about the German moves of the past few weeks. They have not helped their fellow eurozone member at all; in fact quite the opposite.

However buried in here is bad news for the UK too. The bearish commentariat which passes for a financial press in the UK tried hard to look down on GDP numbers that were at 0.8% for Q3. The really good sign was that exports were finally picking up, giving the UK an out from trying to grow its already bloated services sector or increase Government spending.

So the really big downside to the Euroe crisis is the effect on the euro/£ exchange rate, which has been quite precipitous for the last month and shows now sign of abating. German exports are getting an Irish markdown at the moment making it harder for the UK to compete commercially in Europe. Throwing us back to square one again in terms fo battling our fiscal deficit....

These currency wars are very complex, are they not?

Happiness ... Happiness ..

How happy are you?
Feeling like there's a lot to smile about?

Answers in the comments.
Do you

A} Feel more optimistic or more pessimistic about 2011
B} Feel more happy or less happy about the new government
C} Thinking of emigrating or have quashed all thoughts of emigrating.
and finally
D} Are you more or less happy now that the government is asking you how happy you are.

Thursday, 25 November 2010

Question time

BBC says David Dimbleby is joined in Maidstone by

Ken Clarke MP {Justice secretary, big beast,euro-joiner}
Gloria de Piero MP {presenter and Labour MP with a tiny majority.}
Lord Ashdown,{former leader of liberal democrats, venerable politico and man with teeth gritted to destruction over coalition with Tories..but he will hide it well enough.}
Nigel Farage MEP{ Leader of UKIP, eurosceptic and someone who isn't collecting as many airmiles as he used to.}
and Kate Mosse {fantasy author..she should be in good company.}

Q1. Euro bailout for Ireland
Q2. Student moans
Q3. End of the euro. {Dimby will quote the Ken was wrong piece}
Q4 Is everybody happy? {see previous post..and fill in the questionnaire too!}
Q5. Immigration cap

So - What Are The Hot Topics in Germany ?

Letter from Germany

So if Germans aren’t obsessing over the Irish bailout, what are the main topics of conversation ?

Well, obviously there is always the old stalwart of the Battle of Stuttgart Station. All they are trying to do is make this rather inconvenient old terminus into a through route. But the greens have taken against it, and the ensuing conflict makes Swampy and his struggle against the Newbury bypass look like a toddler’s tantrum.

These Teutonic nimbys, who in truth seem as much nihilists as environmentalists, are really looking forward to the Big Event – the comeback tour of the Atomkraft? Nein Danke movement. Aroused from dormancy by Merkel’s temerity in extending the life of Germany’s nukes by fiat, they are already swarming all over the railway tracks in front of the nuclear waste trains in their tens of thousands, and lighting up Berlin with torchlight demos on a very big scale indeed. What japes! Don’t these frivolous people realize they are in charge of the whole of Europe ? On a bad day they seem pretty ungovernable to me.

Which brings us to the other great topic of conversation: they may be about to scrap military conscription. Yup, it’s still compulsory around these parts, although at call-up time very large numbers conveniently remember they are conscientious objectors. They need to make their case to be let off to do community service instead; but you can download a well-drafted letter from the web to assist in your application. Tens of thousands do just that – and work for a pittance in hospitals etc - a rather handy source of cheap labour: so scrapping this system is not uncontroversial.

In any event, it’s likely to be only a de facto scrapping: compulsory citizen-soldiership is written into the postwar constitution on the basis it makes the army one with the people, and neutralizes it as a civil threat.

Trouble is, with the passing of the Cold War as a source of motivation, it somewhat neutralizes it as an effective army. Germans still make good soldiers: but the conscripts often work with kit that is 30 or more years old, and are in no shape to deploy for action. As with most conscript armies in peacetime, the serious soldiers yearn to go 100% professional. It’s probably what they will do.

Something else to take the mind off boring old bailouts.


Tuesday, 23 November 2010

Ireland: A Real Live Stress-Test Unfolds

Quick comment from Germany:

That Irish Bail-out ... looks like those feeble bank "stress tests" might themselves be put to the test. And still they resist increases in CapAd requirements.

In the circumstances of mid 2010 it was always fatuous to simulate exposure to PIGS sovereign risk with a haircut alone, as we argued at the time, and may shortly discover for real.

It all depends on how quickly events develop. So far, Drew's Law of Slow-Mo Dominos is holding ...


Trading update

(picked a day for it, off 2.5% on the day!). Overall up 60% on the year at the moment. Current plan to to sell out of XEL after news next week and start to build EMED as it becomes isable for next year. GKP probably only has a couple of quarters too before it is taken out as well. Plan build up IAE and AEY with that money.

2010 YTD

Monday, 22 November 2010

CDO's explained

I like this site; meant to link last week but only just got round to it due to illness

Competition: Win Return Flights to Florence with CityJet

Win flights to Florence, Italy. Picture - Punto Vecchio Florence. Copyright CityJet To celebrate the commencement of their new service to Florence, CityJet are giving away a pair of return flights to the Tuscan city.
There are many beautiful towns and cities in Italy, but Florence really is one of the country's crown jewels. The medieval centre is home to the imposing Duomo cathedral, Uffizi art gallery and the stunning Punto Vecchio (Old Bridge) over the River Arno.

 For many visitors though, the first stop is the Galleria dell'Accademia which houses Michelangelo's statue of David.
There's so much to enjoy in Florence, from the beautiful buildings and art, to the delicious local food and of course Chianti, the wine of Tuscany. If you've got time, hire a car for a day and take a trip to nearby Pisa for a view of the Leaning Tower and on to Siena; a historic hilltop town famous for it's Il Palio; an annual horse race around the central square.
Win flights to Florence, Italy. Picture - CityJet Cabin Crew. Copyright CityJet
About CityJet's New Florence service

CityJet will start a new scheduled service to Florence from London City Airport on Monday 10th January 2011.
The new service will operate six times a week with fares from just £69 one-way all inclusive.

There will also be some flights over the Christmas period - giving you the chance to enjoy the festive season in the heart of the beautiful Tuscan countryside.
Fill in the form on this Florence Competition page to be in with a chance to WIN 2 x FREE return flights on CityJet's latest route!
For more information on Florence see here.

Competition Terms and Conditions:
- Competition period (to register): 15 NOV - 15 DEC
- To fly within 6 months of 15 JAN 2011.
- Open to all over 18 years old, all countries but only LCY-FLR-LCY tickets
- Non refundable, non exchangeable, cannot be resold, no cash value
- Entry not open to employees of CityJet, LondonNet and Tailsweep

Cutting immigration nonsense from the City

I am fully behind the Government's plan to cut the numbers of Non-EU immigration work visa's. My two pennies is from seeing how this works in practice. So much is written about the desperate need for IT skills of which the UK has so little.

However, this is not what I have seen in the real world. In the real world there are people in the UK who want one wage, and typically less experienced and capable, but much cheaper people from South Asia. What consultants like Oracle, HP and other firms want to do is import more of this more cost efficient labour into their supply chain to lower their costs; and why not for them, it works just fine.

For UK workers though this is less beneficial, skills are lost and although it may be fair to argue that the UK workers are demanding too high wages, you often can't compare in terms of experience and capability.

Therefore there is a lot more to this argument than the sort of trite pumped our by the City about the issue being low wage replacement being misguided. This is on the money in terms of policy, allowing the UK time to adjust. India and others are going to grow anyway, no need to actively destroy our own industries along the way.

Sunday, 21 November 2010

Smoked bear for breakfast, but for how much longer?

The Irish bailout is in the can. As always with these types of events, the final blood is extracted on a Sunday night before the markets open on a Monday. news like this is bound to be worth a percent or two on the FTSE.

For Ireland, it hopefully does provide the finality of knowing that there is not more despair to come. Indeed, the bottom has been reached with this guarantee. Not great for the Irish taxpayers, but a deal to stop the rot. No news yet as to what taxes are going to be hit other than the personal taxes.

Really though, as a bull since 2009 all this helps my  long investment portfolio. However, the day comes closer that the bailouts are not going to work anymore. I never go in for all the Gold-loving end of the world shtick, but we are where we are. Countries like Spain and Italy are not going to get bailed out by Germany and France, except though either default or inflation. The USA is in a bad place too, with a weak Government and rampant spending.

All is not going to end well, but these types of bailouts could go on for years, or if you read carefully well sourced information like this, then it won't be long.

Saturday, 20 November 2010


New series to possibly replace 'The Brownadder.'

Pilot episode,
so comments gratefully received.

New faces.

A blue ministerial car is pulling up to the imposing gates at the houses of Parliament. A guard salutes then opens the giant gates. There is a clang of a metal door closing. The clink of solid keys in iron locks..

The voice-over of an old fashioned High Court judge declares..

“David, Stanley, {not} Thatcher, you have been found guilty of failing to achieve an overall majority, and it is now my duty to pass sentence.

You are an habitual politician, who accepts failure as an occupational hazard, and presumably accepts a life in parliament in the same casual manner.

We therefore feel constrained to commit you to the maximum term allowed for these offices — you will form a coalition for five years.”

Scene 1. The Westminster jail cell, home for the next five years to Dave Not-Thatcher. Wearing the typical prisoners issue blue shirt he is putting a few things into his corner cupboard over the sink. A comb. A Montblanc pen. Silver hairbrushes, ipad, tin of snuff..

[enter the prison warden, old Mr BarrowCable. Mr BarrowCable is a very liberal minded warden, not particularly suited to the realities of his office. He much prefers to try and gently persuade or encourage the politicians under his charge. He is the mirror opposite of the harsh disciplinarian, humourless, Scottish, Chief warden Mr McEye who believes, correctly, that kindly Mr BarrowCable is frequently taken advantage of by the prisoners.]

“Now come along Thatcher.. turn off Sky News. Hurry up. I’ve got your new cell mate outside.”

“Oh I see..I see..like that is it?" whined Dave. " I mean..I’ve done years in politics me Mr BarrowCable. I fought an election. Why should I ‘ave to share with anyone? I gained 100 seats, din’ I. .....

"36.1% of the vote. I overturned a 60 seat majority. I transformed the Toxic Tories into an electable party. Gaw'd help us I even put a bleedin' windmill on me roof and rode about on a yuppie bicycle with a seat that felt like I was sitting on a trowel. Sideways on! I've still got grout marks I 'ave Mr BarrowCable. 'Ave a look ".. complained Not-Thatcher, twisting his buttocks around towards BarrowCable.

BarrowCable made a pained a face and replied, "Oh do stop being so prickly Not-Thatcher. He's a perfectly nice young lad, but he needs some guidance. Seems many in his own party feel he's gone completely off the rails. Turned into a bit of a young hooligan, out in the streets breaking manifesto promises and kicking in previous binding commitments.. he needs someone with some experience. Someone to show him how to get by in politics. Someone to teach him how to U-turn properly. ."

Dave looked unconvinced. He liked having his own cell, own space and own agenda.

"No see, its just not on. I can't share a government with some limp, lentil eating, tree hugging Liberal bed-wetter can I, Mr BarrowCable ?….No offence..”

“Well he is coming in!" exclaimed the warden crossly,but with a hint of triumph. " You should have thought of all this before you backed out of your Lisbon Treaty referendum commitment and ring fenced Foreign aid.. You wouldn’t be in here now would you?" Mr BarrowCable softened his tone and tried to convince Not-Thatcher

"Now come along..He’s only a young lad. First time inside a cabinet. He’ll be nervous. A bit frightened and scared. I shouldn’t wonder that he’s full of highly idealised manifesto pledges and dreams of creating a sense of …well, of fairness, .. a nice fairness throughout the country..He’s like a young visionary Beveridge..”

“And you want me to knock all that naffin' cobblers out of his head?” suggested Dave.

“Oh No , Not-Thatcher. Not that at all. I want you to nurture him. Show him the ropes..let him find his feet in these difficult times..” said Mr BarrowCable imploringly.

“All right then, Mr BarrowClable, all right. I suppose its better than 'avin' Liam Fox in 'ere. Just for you, like. But you’ll owe me. I’ll see what I can do..” replied Dave, sitting down on the prison issue Louis XIV engraved chair.
“‘Ere.” he exclaimed..”.’Ee’s not a nonce is he? A bit of a Laws? I mean, he is a Liberal ain't he. I don’t mind if he is a bit Alan, after all we're all very keen on Faries in the New Blue these days..just that they tend to use a lot of aftershave, know what I mean? Can’t stand all that Henry Cooper splashing about. Not as if I can just open a window is it?….Nah..I don’t mind if he is a bit lukewarm.. just so long as he’s not a bleedin’ socialist all right?. Got to draw the line somewhere. They get right up my nose they do.”

“Right then.. I’ll bring him in..” said BarrowCable, fetching the second prisoner from the landing.

“Dave Not-Thatcher…meet your new cell mate ... Lennie Cleggber”


Friday, 19 November 2010

Woe is me

My head feels like that of the Irish Finance Minister....

Thursday, 18 November 2010

David Dimbleby will be joined in Swansea by:
Chris Grayling, {DWP minister and short-listed for Bigot of the year }
Carwyn Jones, {1st minister for Wales and former Swansea boy}
Kirsty Williams, {leader of the Welsh Liberal Democrats .. can we see where this is going?}
Nerys Evans {The Plaid Cymru member to round out the table}
Lionel Barber {Journalist and UK FT editor}
Kelvin MacKenzie.{Murdoch's man, Scots attacker and clown}

Choose up to six questions you think may be asked tonight and put them into the comments. Going to be a bit regional. Scotland is normally good, Wales ..less so. We shall see.
Winner chooses the venue for the Royal Wedding

BQ say: Look away now if you don't want a hint

1. Welsh + Scots assembly cuts
2. Ireland is a mess.. bail 'em out.
3. Andy Coulson {no one cares but lets do it anyway}
4. Austerity weddings
5. Fifa corruption and UK footie bid.

Wednesday, 17 November 2010

Political Crisis of the Euro will end in revolution

Sadly a long time ago now, I wrote my Master's thesis on what had then been a big macroeconomic event, the UK's withdrawal from the ERM in 1992. The focus of the paper was to study just how much the political decision making had NOT been influenced by economic reality. Perhaps unsurprisingly the conclusion was that the ignorance of the true economic reality of the UK joining the ERM by Michael Hesletine and others was a key driver in the crisis. Economically the UK was never going to survive in a fixed rate system against the D-Mark.

So too, today, 20 years later and we see a very similar story being played out. the Peripheral Euro Countries have been smashed by the economic costs of being tied to the D-mark; now known as the Euro. Germany in turn has decided enough is enough and there are noises about not bailing out Periphery Countries without them ceding political and economic policy to Germany.

The Euro was a political project in 2000 and has sailed serenely on the back of a nice boom that lasted for 8 years nearly. Now in the first crisis it is in big danger of collapse. The Politicians of Europe are not ready for true economic unity and this is what a single currency area demands. German taxpayers are not ready to subsidise Irish and Spanish ones despite them having the interest rates and overall fiscal policy set to suit the Germans themselves. In short, the politics is too selfish.

Due to my study of the the ERM I have always been very sceptical of the potential for the Euro to succeed and perhaps now it is coming to pass; the choice is economic union with political union or not. I very much doubt we can have true economic Union when the EU institutions are so unpopular.

What is the great shame is that is the EU had not become a bureaucratic leviathan and instead had followed a US model of democracy we might be ready for closer Political integration.

There will be a fudge today to smooth the markets, but the real crisis in Greece and Ireland won't go away, just as it did not after May and the last bout of crisis. Something really has to give eventually, I am interested to see just how many time the can will be kicked down the road before the revolution (this may be one way or the other in terms of greater or lesser EUnity).

Tuesday, 16 November 2010

Chris Blackhurst is losing it

Chris Blackhurst is the City editor of the Evening Standard and from reading his recent City pages he seems to be hating his job and railing against the world. Normally times likes these call for a post from Money is the Way, but tonight's ES really caught my eye.

The main for this story is an interview with Clive Cowdery and a writeup of what a good guy he is (and this is true at least); but the real agenda is an attack on the Coalition cuts and how these are really targeted at the middle class; my view is that this is the writer himself speaking about his own situation. There is a gratuitous attack on Nick Clegg below the piece to, harping on about the University Fees issue.

Next up today, as if to confirm this, is an attack on City Law firms and how sexist they are. Mr. Blackhurst recounts his own interview failure of decades ago and manages to make himself feel better that lawyers are all horrible and old fashioned. He has a single source on which to hang his tirade (N.b. Cityunslicker works for a large City law firm 70-30 ratio of Women to Men).

In recent weeks too there has been backing for the Student protests with a nice unbiased interview with Ronnie Cohen, high profile Labour supporter who amazingly thinks the Coalition is going too far too fast. Perhaps unsurprisingly he has a strong case of envy for those who work in the City too, they are of course overpaid compared to himself.

I find it odd that the Evening Standard is keen to have such an unreconstructed and bitter lefty as its City editor. Surely their readers, being in chunky part Commuting City Workers, would want to read something of how the current issues should be dealt with rather than polemics against the City and the Government. After all, it was the Labour Government that bears the main responsibility for this mess, a fact often glossed over by the ES City Editor these days....

Monday, 15 November 2010

Ireland not keen on a bailout

Following speculation all weekend that an Irish bailout would be announced, the past 24 hours have seen in stead some strong backtracking by various Irish officials - here is what occurred to me after I kissed the Blarney Stone:

1. Only low level Irish officials are denying there are talks, allowing for the Finance Minister of Prime Minster to come out later in the week.
2. Angela Merkel appears now to be nailed as the source of the current issues by saying (rightly, but for the wrong reasons) that bondholders will have to suffer future pain..i.e. Ireland will be forced into a limited default of some sort.
3. The FTSE and other markets have reacted poorly, but not too poorly to this news. Clearly a full bailout is good for equities and bonds as it suggests taxpayers footing the bill. The Euro will have the opposite trajectory.
4. This source which reflects well current European Commission thinking, makes it clear over a week ago that the Eu does have an end game of stopping Ireland having a low tax basis for Corporates. This will be fun for the UK companies like Shire that shifted their domicile to Ireland to avoid high UK taxes!
5. No wonder the Irish are not keen on the bailout now that they have heard the terms on offer.

So Ireland is going to be made a full member of the EU. As expected, the 2007-10 crisis is not going to be wasted by Eurocrats in ending Countries fiscal autonomy. Which in many ways is a more honest, and essential, approach for a single European currency. The downside if you happen to live in one of the PIIGS countries is that Germany and France are going to make you pay for a long time, whilst they in turn make money off their loans to the PIIGS and entrench their domination of the European Political Economy.

For the UK this is all positive, it will reinforce the sensible decision to stay out of the Euro and as Ireland is our largest trading partner and only other major EU English speaking Country stabilising the Country is a price worth paying.

Saturday, 13 November 2010

Irish bailout , why now?

Some definite strange things going on at the moment. The news of the proposed Irish bailout is the lead story of the news today. Why now?

Ireland does not need to access the markets for months, much of the economic news coming out of Ireland in recent months is quite positive; not great, but not too bad. There are serious underlying issues, that can't be avoided, a huge amount of criminality at AIB and the other banks, clearly going into the Irish Government, has caused their extreme situation (together, of course with membership of the totally unsuitable Euro).

So why now? There is market pressure to do something. As a private investor I am happy, other people, mainly European taxpayers are going to throw some money at the situation and that will help to stabilise jumpy markets. That is a terrible reason to open up the cheque book for 80 Billion Euros.

There must be something else driving this. Perhaps the European Central bankers have decided the back stop needs to be Ireland so that Spain, Portugal and Italy do not become bigger concerns; but this could and should have been addressed months ago.

The timing is odd here, it will be interesting to find out the truth one day.

Friday, 12 November 2010

Students circulate petition

From one of my favourite, backstabbing boardgames.
JUNTA by West end Games
{an 80's classic that has been re-released as
a board and a card game.}

When I played this with my brothers we couldn't see the point of this event card and so threw it away.

Ahhh...the innocence.

Germany sides with China against UK

Well perhaps we should not be that surprised. At the G20 meeting in South Korea (hat-tip of the day to whoever told this porky of the Daily Mail which they have fallen for) a very sketchy agreement on what to do with the World's currencies is being hammered out.

I doubt it is going to lead to very much as the G20 is a nice global talking shop.

However, when it comes to managing trade imbalances Germany is backing China. Both these countries follow mercantilist policies of boosting exports and restraining domestic demand. This helps to foster the deficits with the US and UK. Clearly in a free market system the exchange rates of countries would adjust to correct the imbalances. China and Germany would get richer compared to the US and UK, who would now be able to export more as their labour costs had relatively declined.

But China and Germany don't play this game. China holds the Yuan at a pegged rate to the dollar, costing it internal overpsend but hollowing out the USA. Germany is in the Euro and poorer Euro countries help to reign in the strength of the currency where the D-Mark once soared.

In response the US has gone for Quantitative Easing - they have every reason too despite it being a dangerous gamble.

Today though reading the reports, Germany has not backed China in resisting a real cap on trade imbalances and trying to rebalance the world. The UK is onside with the USA. German politicians are also criticising Ireland and Greece for their poor deficit positions; partly caused by the Euro having interest rates set for Germany and it is also having the effect of weakening the Euro, which helps German exports globally.

In times of stress you learn who your friends really are; Die Deutschen spielen schmutzig

Thursday, 11 November 2010


David Dimbleby is joined in London by Theresa May MP,{home secretary, police reformer, shoe fetishist and spacewoman}.
Caroline Flint MP, {former housing minister and window dressing. Seems to be the only spokesperson for Labour at the moment.}
Sir Sherard Cowper-Coles, {diplomat. His job to sort the Afghanistan conflict. good luck with that!}
Clive James {so venerable that when filing in forms, under TITLE he could write 'the legendary' }
and Douglas Murray.{oh dear. journo..who's being set up for both the Woolas and the Irish questions. poor sod.}

Choose up to 5 questions that you think will be asked on tonights show. Thank you Dick the Pr*k. I may stop by biased BBc later.
Anyone who gets question one wrong suffers a further two point penalty. This weeks winner is allowed to choose the new decor for CCHQ.

Q1. student riots has it damaged a legitimate protest.
Q2. NUS responsibility for damage?
Q3. Should unemployed be forced to work.
Q4. Phil Woolas is innocent!
Q5. Boris Bus?..nah..probably something about China.

Carol Seargant - Still on the merry go round

Now just last year Capitalists@Work had this exclusive on another sad story of whistleblowing in the City. Lloyds Bank stood accused of misleading its Scottish Widows Policy holders by an whistleblower who thought the bank was trying to pull a fast one that would end up in an Equitable life style fiasco.

The net result was sacking for the whistleblower and a swift move (reward) for Carol Sargeant from the FSA where she ruled in Lloyds' favour on the allegations to Lloyds itself to be a well paid Head of Risk.

A sorry tale of City merry-go-rounding.

Now today, perhaps rather predictably, the saga is raised again. Only this time the redoubtable Mrs Seargent is to go back to lead the 'new' FSA from Lloyds- nothing like having a gamekeeper-turned poacher-turned gamekeeper again.

Sadly, no one seems to care that she has still never even tried to explain her position on Scottish Widows. Safe to say I won't be surprised to see her put in charge of whistleblowing in the City - which is all fine and dandy as long as it does not affect one's own career, of course.

Fighting In The Streets Foretold

Well, it turns out the poll-tax rioters were indeed burnishing their rusty metal stakes in their dingy garrets after all.

And initial pessimism was well-founded. It's taken longer than I expected, but here we are, and they have to get it out of their systems. This process tends to take a while - years, not months from past experience - but it had to start soon, and now the battle lines are drawn.

It's by no means a bad position. This hasn't been simmering, it's boiled over immediately. As with the miners' strike, the Labour Party is inherently wrong-footed. The Crow tendency will be itching to pitch in, but the TUC as a whole will be bemused.

And the big unsayables are at last being said. It is indeed immoral that non-working families should be better-off than the famous hard-working families who featured so prominently in Gordon Brown's empty rhetoric - hard-working families who've quickly spotted who is really on their side. The Housing Benefit row was a perfect way of bringing it out, and if credit goes to Osborne for this, then I'm the first to give it, previous skepticism notwithstanding.

Many a hard-pressed copper is going to suffer in all this (hope the Home Office is as well-prepared now as it was in 1984): and in different ways, so are the many families who had been cruelly conned over many years (including the period of Thatcher's governments, be it said) into believing that mass idleness was a sustainable lifestyle. It's an evil, as Beveridge stated clearly.

Iain Duncan Smith's timetable is very protracted, and perhaps inevitably so. If we have political geniuses at the helm, as we are sometimes given to believe (G.Osborne, this means you), all their tactical prowess will be tested to the full over the next four years, to buy the time needed for the longer strategy to play out.

We shall see.


Wednesday, 10 November 2010

Postal vision goes undelivered.

Not very convinced about the government's Post Office scheme. It seems geared to pushing sub offices into small supermarkets. Under current models that is impossible. There isn't the staff in the supermarkets to deal with the work. And the real problem is the work only attracts a pittance so its not cost effective to employ someone to do it.

Meanwhile, Lord Mandelson's old preferred bidder for Royal Mail,
Dutch TNT, has seen a 24% fall in profits and is currently embroiled in a dispute with the mail unions. TNT this week described Union demands as "irresponsible, not feasible, and contrary to recognition that TNT Post needs to make major savings". Strikes are likely as the union has demanded that 4,500 redundancies are too many to bear. In Finland the unions ae back to work after a dispute had stopped deliveries. Just in time if the backlog is to be cleared for the Christmas rush. Magyar Posta, Hungary's postal operator is cutting back office jobs to save money. Lithuania post has upped its prices..as will Royal mail by some 10-12%, which is a bit more than usual.

Its all a mess.
There isn't enough money to be made from delivering everything to everyone, everyday, for almost nothing.

Royal mail customers broadly support a 5 day a week service, with some demands on a better service, according to the soon to be scrapped PostComm.
Trying to keep the service as it was in the 1980's has meant that RM have shed workers and started delivering later in the day with longer rounds for each postal worker. Not very satisfactory for anyone. Something needs to be done. And someting more than the very lukewarm, almost Blair like style, spin over substance, proposals announced yesterday.

The government is talking bold, but its actions are really just privatisation. No PostBank, and although we here have long said that wouldn't happen, its stil a big blow to making PO viable.

Expect much higher prices and far, far fewer post offices in the near future.

Iraqi Government - still not there after 8 months

It took Cameron and Clegg just 4 days to sort out a coalition agreement. However in Iraq it has taken eight months and counting. To be fair, the result was so close in Iraq that the minor parties don't have enough sway to form a Government with just one side.
Eight months is apparently a new world record for trying to form a Government after an election. In a bigger sense it shows just how hard it is for Country's to adjust after Despotism, War and then occupation. In Iraq too the spoils are enormous as the Country sits on massive oil reserves and a world thirsty for access to them.

Thursday is yet another deadline in the process, when Parliament meets to discuss the key posts of the new Government. Hopefully a deal can be struck but the bargaining is intense and as far as can be seen publicly a deal is a way off.

If the Kurdish faction, the equivalent of the Liberal Democrats, can see sense they will abandon the Presidency and take over the oil ministry in order that they can secure their share of the new oil revenues.

I hope they can put a Government together this week as the violence is beginning to spiral again.

Tuesday, 9 November 2010

An Invitation to Write Your Own Cheque

We have highlighted before the propensity of the Coalition to swallow the special pleading of the subsidy-wallahs of the energy industry: but it’s getting beyond a joke. The Telegraph – clearly the lobbyists’ vehicle of choice - has reported energy minister Charles Hendry as saying

“... that two more incentives would be needed for nuclear beyond the Government's plans for a ‘carbon floor price’ [which] will artificially raise the cost of carbon allowances to penalise fossil fuel generators and reward low-carbon power”

But there’s more.

“on top of this reform [sic], he is ‘very much’ in favour of capacity payments for low-carbon electricity generation – an option championed by EDF. This would reward companies for making their electricity generation capacity available to the grid, even if it is just as a back-up.”

And he’s not done yet.

“Mr Hendry acknowledged that this would still not be enough to persuade [hah !] nuclear companies to build their plants in the UK. ‘There will still need to be an additional third mechanism,’ he said, adding that an obligation on suppliers to provide a certain proportion of low-carbon power or contracts-for-difference in the electricity market are two key options under consideration.”

And the Telegraph concludes with this statement of the bleedin’ obvious:

“The reforms are a sign that the Government has been listening closely to industry concerns [no shit !] EDF is planning to build Britain's first nuclear power station by 2018, but its chief executive, Vincent de Rivaz, has long been pushing for market reform to ensure that the £20bn investment is affordable.”

Market reform ?! Affordable ! The man is being invited to write his own cheque ! This may yet push me to become a swear-blogger ...


Monday, 8 November 2010

Government Business Plans; A Whitehall Dream policy

Big fanfare at Whitehall today about the launch of new Government business plans. Now I am all for business plans, the key to a successful business and this is perhaps what the Coalition are getting at - set some goals and sending out the Departments to achieve them. However, as with a Company, business plans are best judged annually or over 3 or 5 years rather than posted up live.

To turn the Government into the equivalent of a quarterly driven US conglomerate may not be the success that the ministers think it will.

On the plus side the BBC seem dead against it so it is doing some good already.

Also the spurious point about people being able to see what Government is doing and how it is achieving things is a complete red herring. No one is interested in looking up to see how our diversity programmes are progressing - this aspect is a waste of money on the website. The time devoted to filling it out will become gargantuan as Whitehall has a bureaucracy designed to make form filling into an artform capable of absorbing millions of hours of Labour.

The Sir Humphrey's have worked their magic here, taking a very good initial idea and wending it into something that will keep their minions occupied doing something nicely bureaucratic and pointless instead of productive and useful.

Saturday, 6 November 2010

Phil Woolas: Let Joy Be Unconfined

Well this has made my week, and no mistake. With the 'retirement' of McNulty, Woolas was unchallenged as the most odious of the bunch.

Now all they need to do is to fix the outrageous postal voting scandal ...

Oh, and one other thing to make my weekend complete: England to beat the Kiwis this afternoon. Conditions are identical to that of the famous afternoon in November 1993: glorious autumn day, England not given a prayer ... It was the first match with the 'new' North and East stands in place at Twickenham, and the crowd were excited to find that the extended high concrete roofing had the effect of bouncing sound back into the bowl. After the haka, a tentative burst of Swing Low was tried - and it echoed around marvellously. Spirits were suddenly high: hey, this is great !

And so was the score-line of 15:9, marred only by Jamie Joseph's disgraceful footwork on the ankle of the prone Kieran Bracken, on the pitch for his first cap. Joseph perpetrated his outrage in full view as the action moved upfield, and the crowd let him know what they thought. The boy Bracken was strapped up, though, and he soldiered on.

The NZ supporters got rock-all on the train back to Waterloo. But they took it in good part.


Someones knees are jerking

“Following recent incidents with improvised explosive devices, the Secretary of State for Transport has issued directions prohibiting the carriage by air of ink or toner cartridges, with immediate effect. For the avoidance of doubt the definition of ink or toner cartridges are defined as a cartridge weighing more than 500g designed for the use in printing equipment such as printers, photocopiers and fax machines.

In order to comply with this direction fully, Parcelforce Worldwide will not be able to accept any ink or toner cartridges destined to Northern Ireland or the Channel islands or any destination overseas on any Parcelforce Service until further notice.

This impacts both inland and international carriage of ink and toner cartridges by Royal Mail (much inland postage is still carried by plane).

Post Office, ParcelForce and Royal Mail staff have been instructed to check customs labels to see if a product contains printer ink. Seeing as the person sending an item is the one who fills in a customs form then it shouldn't be beyond the wit of the average terrorist to write "Bread Bin" instead of "Printer ink" or "Bomb."

It seems this handy new prohibition will prevent businesses or citizens in the UK sending 'Printer cartridges' to Yemen. Presumably this will stop Al Qaeda receiving used toner packs for recycling into environmentally friendly high explosives. It won't stop them stuffing table lamps, beanbags, hollowed out books, video games consoles, DVD recorders, toasters or anything else that can packed with Semtex or TNT. Unless there was some specific reason printer cartridges were chosen as a method of concealing an explosive device,maybe concealing the odour or something, I can't see how this helps.

Will this change make air cargo safer? Or is it just a do something announcement?

Canon recycle all their European cartridges in Bretagne. Bound to be a problem for many of the major suppliers of toner.