Monday 10 January 2011

Welcome to 2011

In many ways in the world of work this is really the first week of 2011. Many people took time to get back to the office last week which was a 4 day week in any case. Only now are people dusting off their to do lists from last year and working out what to do next. Only this week do the first important meetings of the year happen.

As it happens with regards to the above, 3 stories have all appeared today which will be defining issues for the coming year:

1 - David Cameron is hosting a meeting of UK PLC Chief Exec's who are going to announce about 50,000 jobs to be created by them, in a show of what the Private Sector can do to ballast potential public sector job cuts. As the year goes on and the real public sector cuts start up then this movement in unemployment numbers will be a key barometer for the Coalition Government.

2 - Just yesterday the Prime Minister rounded on Public Sector bank bonus' and the neurotic Lib Dems have waded in further today. The idea of bonus' tied to lending is, when you think about it for a second, totally demented. State owned banks need to be prudent to avoid making more losses in order that one day they can be sold, here are their owners ordering them to be reckless. Bizarre, but likely to continue ad nuaseam.

3 - The biggie comes last, Portugal is set to try and raise money on the international markets this week, the appetite for this will tell us quickly how soon the Euro crisis will be upon us. A very bad week and it could be here already, a better week with Portugal submitting to German and French pressure for a bail-out could postpone the crisis for a month or two yet.


Bill Quango MP said...

You've missed the most important event. Ed Miliband and Alan Johnson's press conference calling for a reversal of the vat rise {something they rule themselves} and a retention of the 50p tax rate {possibly..again, it depends if the feel they are going need higher rate votes}

Did you see the shadow chancellor on SKY. Hilarious.

Labour leader Ed Miliband has defended shadow chancellor Alan Johnson after he appeared not to know the rate of National Insurance paid by employers.

On Sunday, Mr Johnson said the rate stood at 20% - it is in fact 12.8%.

Old BE said...

"Employers' national insurance contribution" is a bit like the "Holy Roman Empire".

Osborne could do worse than to merge income tax and national insurance without changing the rates just so we can all see what we are paying.

Electro-Kevin said...

Today is the 10th.

We grumble about working for the Govt 'til June but, to be fair, it seems we only start working halfway through bloody February anyway.

Country's bonkers.

Timbo614 said...


Quite - I have worked the last 9 days straight (excluding yesterday)! Was worth it though :)

Budgie said...

Presumably Portugal is the reason shares seem to have drifted off since just after the holidays?

CityUnslicker said...

Budgie the FTSE was looking quite over-bought. The Santa Rally happens every year to help fund managers hit targets and secure their bonus. Then in Jan as often as not reality hits and some better persepctive is taken.

Still, yes in short, the Euro crisis is looming and that is affecting shares too.

tory boys never grow up said...

Here's a radical idea for capitalists - why not link bank senior employees remuneration to their companies share price.

Barclay's share price is now about what it was in 1997 - in 1997 the highest paid director of Barclays received £728k.

The Government has capitulated totally over bankers' bonuses - we all know that this is the case and everything else is hot air.

As for the underlying assumption that markets are able to price risk properly (rather than creating volatility from which the more rapacious are able to profit) how much more evidence do you need. Last year of course was a boom year for asset backed securities and related junk if we follow that logic. Not a few commentators are now saying that the market has overstated the risk in Euro sovereign debt - and they expect strong recoveries during the current year.

Personally - I spend my time looking at capital inflows into and out of the economies concerned and relative price levels, rather than current market prices.

Anonymous said...

Here's a radical idea for capitalists - why not link bank senior employees remuneration to their companies share price.

They sort of do. With banker's being paid a large chunk of their bonuses in shares, nonredeemable for 'x' years.

tory boys never grow up said...

They sort of do. With banker's being paid a large chunk of their bonuses in shares, nonredeemable for 'x' years.

If they were given a contract for differences then this might be the case - but even if the share price stays the same (as with Barclays) the amount they take home has increased even though the share price hasn't. Perhaps they should pay something back if the share price falls!

Bill Quango MP said...

But how could that work.. really?
And shouldn't this equally apply to public sector workers?

My council is one of the most indebted in the country. Should all those bonuses be paid back now they realise that they have 'overspent?'

Every worker will have got a bonus. The top tier would have got tens, if not hundreds, of thousands of pounds.
If a school is bottom of the league tables should the head give back some salary?

Its tempting I grant you but...

tory boys never grow up said...

For any underperforming entity - the senior people should suffer some reduction in remuneration when the entity's performance goes backwards. There should not only be a ratchet upwards when there are good years - otherwise you get the ridiculous situation where the CEO of Barclays pay has increased tenfold (since 1997) while the share price has remained the same. The justification for such high remuneration is usually that those concerned have added value - when this is demonstrably not so in many cases. The Govt/FSA have clearly not walked the walk on this matter - and have just caved into vested interests - and even the most ideological of capitalists should be capable of reaching a similar view .