Saturday 30 June 2012

the bombing war.

Rowan Moore of the Observer wrote a piece last Sunday about the bomber command memorial .
The result is a work of wishing away, of ignoring time, place and moral difficulty. The possibility of achieving something even slightly like the Vietnam memorial in Washington, which also had to recognise heroism applied to a questionable purpose, was ruled out from the start. There, many veterans expressed a wish for something classical, but once Maya Lin's reflective wall of names was installed, few wished it to be otherwise. I don't want to deny old men, who endured more than we can imagine, the ability to remember. But there could have been better ways than this.

So, he didn't much like it. He managed to squeeze a few mentions of an opportunity lost to portray regret. Complex moral issues or better yet a have created a very modern structure. He seems a little upset that the 80 year old airmen wanted this design. He even managed to fit in a former Tory party treasurer Lord Ashcroft mention. 15 commenter's on CIF mostly disagreed with him.

Johnathon Jones wrote a similar article on Friday. Slightly more critical of both monument and bombing. So far 993 comments and counting. I've read about a hundred. I'd estimate he has less than 5% support for his views on either the monument or his examination of the bombing war . And in the main they aren't rants. They are measured and knowledgeable pieces. Some are factually incorrect, but not wildly so. There is a comment that the Germans only bombed civilians by accident when a lost plane jettisoned its bombs over a city. That was actually the start of the Blitz, as the Luftwaffe had orders not to bomb London. City bombing had been going on since at least 1937 by the Japanese in Shanghai and at Guernica by the Germans. And the British had been bombing rebellious Iraqi tribes people since the 1920's.

 On the history, where much of the criticism comes from from the readers, neither article is factually wrong. They both acknowledge the huge losses of bomber command. 55,000 killed. {the US 8th airforce lost about half that number.} They both explain that the crews were very brave to fly... But then comes the inevitable ethical debate about bombing civilians.

Had Gadaffi survived he may well have faced war crimes for bombing rebel cities. Assad is going to be in the dock for shooting unarmed rebels and using artillery. But this is now. Not 1941. revisionist history makes me boil. Context is everything in history. What's the point of asking if a modern family would go to a medieval hanging as a fun day out?

In truth the RAF had a poor war. Fighter command and the tactical air force in France in 1940  were almost completely destroyed. The RAF had insisted on a heavy bombing force pre war, when resources were really scarce and funding below requirements. Yet when war broke out the bomber force was completely inadequate. It didn't have a heavy bombing force at all. Just some rather poor medium bombers. The RAF found it could not find its targets. If it did find them it suffered very heavy casualties, and even if it hit them its numbers were too small to achieve much and its bombs often failed to go off at all. In 1941 more RAF aircrew were killed on operations than German civilians by those same operations. 
Navigational aids were non existent. Maps useless. Training unrealistic. Results negligible.
That's how 'bomber ' Harris got the job in the first place. He was to sort out RAF Bomber command's failures and make them the war winning weapon that had been promised. And although he never achieved that he certainly transformed the air war.

Harris was as single minded as Field Marshall Haig had been in the last war and with much the same results. The necessary equipment, tactics and technology just weren't available at the time to break the deadlock. So the air war became an attrition war. That's a very important point in any discussion about the effectiveness or necessity of bombing.

The bombers {Commonwealth and USA} had to attack targets where they could do damage. As in the UK, German barracks were in cities and towns. As were the man train terminus and the docks and the depots and the warehouse and factories. And once the attrition war was decided on, the bombers needed to attack targets the enemy must defend. 

 Amongst the CIF writers are references to the  flak guns ,the German 88 mm, 15,000 deployed within the Reich as AA guns, but could have been used as Anti tank guns that were lethal to tanks if diverted to front line use. In 1940 the Germans had about 2,000 searchlights. By wars end this was almost 14,000. And each searchlight and flak post needed manpower day and night. The Luftwaffe estimated it took 3,300 88mm shells to bring down an aircraft. The expenditure in AA ammunition was so great that there were shortages in the German army from the start of 1943 that were never replaced.
This is all true but it  would be a pretty poor result if 55,000 men died to keep just 15,000 AT guns and 300,000 boy soldiers and injured soldiers from the front lines.

That German armaments increased during the critical 1942-1945 years are used as an explanation that the bombers failed. That isn't true. The increases came from structural, resources priority and procurement changes set about in 1940/41 when Germany belatedly realised it was going to need a whole lot more equipment than it was making. And if the bombing was ineffective why did Germany attempt to move its factories underground. Just imagine what that actually means. Moving complex machinery and all its civilian workers , and outright slaves too, into underground caves where light, cooling, sanitation, air and power all have to be supplied. Where space is a premium. No one voluntary builds a factory underground.

It is true that the area bombing campaign was wasteful. German industry actually fell apart once the rail and waterways were knocked out and the fuel plants damaged. The Germans were short 36.5 million tons of coal in winter 1944.The coal was in the Ruhr and the Ruhr was almost sealed off because of destroyed infrastructure. If Harris had been less of a fanatic he might have been able to achieve a more rapid collapse of the Axis without the continuation of Area bombing into 1945 when the heaviest and most destructive, and probably unnecessary, raids took place.

But that must not be seen in isolation. That's my issue with the Guardian writers. War is war.
All of WW2 was about attrition. It was a more mobile  WW1, but still an attrition war. From the sea lanes vs submarines to the artillery duels and fuel supply issues of the desert war to the slog through Normandy and the Ukraine and up the Solomon Islands and the jungles of Burma. It was an attrition war. Whoever had the most usually won. 

This was especially true in the factory war. By the time the 40,000 airframes for German fighters were produced in 1944 {up from 3,000 in 1941}  there was no longer the fuel, spare parts, engines, pilots, trainers or logistics available to get them into the air.

The RAF forced the Germans to fight a battle they were not prepared for and did not want to have to fight at all. By attacking the Germans had to defend. With the American air force in the war and long range fighters and better night time aids by the end of 1943 the Luftwaffe was running out of planes and pilots. And each time a target was hit they lost a little more replacement production too. Whether from the factory making piston engines or the killed skilled worker or the rubbled railway that the train bringing raw materials could not now pass through. By 1944 the German airforce was on the defensive, largely unable to mount any kind of attack. The thousands of pilots needed to attack the bombers over the Reich had had to have been withdrawn from Russia.

So by that criteria the men of Bomber command achieved just as much as any of the other services. The 'did bombing achieve' question is decisively answered. Yes it did. 

Air power never did what the bomber barons had promised. It did not end the war. It did not reduce the enemies means of production to the point that they could no longer continue. . The civilian deaths were terrible. But all WW2 was a war against civilians where the fighting took place. Military deaths, including all the executed and starved prisoners of war, 22-25 million.  Civilians killed totaled from 40 to 52 million, including 13 to 20 million from war-related disease and famine.

The USA's strategic bombing survey estimated a maximum of 600,000 German civilian deaths by bombing. Some 10 times the UK's number. Japan had around 500,000 civilian dead. Shocking as these figures are they still account for only 2% of WW II civilian deaths and leave 50 million other dead civilians killed in war by bombing and other means.
The number is too huge to contemplate.
But without the bombing it might well have been even higher.

 I don't know much about architecture . For a London memorial the bomber command one looks like it would certainly complement in size and scale, materials and design the other memorials and monuments in and around the Park Lane/Green Park area. But its not really my field so I'll leave that to the Guardian arts writers.

I suggest they also leave the moral history lesson to others.

War is cruelty. There's no use trying to reform it, the crueler it is the sooner it will be over.
-William Tecumseh Sherman

for the history buffs only

In BQ's opinion,  only the Royal Navy and merchant marine can claim to have had a really successful war. The Navy's successes far outweighed its failures. They triumphed in almost all of the battles they fought and defeated the submarine menace so that it was effectively over by 1943. Not a single German submarine got to any of the boats on D-Day. Or sunk any of the flotilla that invaded North Africa. Of the first wave of boats on D-Day, the minesweepers, they expected to take 50% losses. They didn't take one. The navy recused the army from Dunkirk. Again from Norway. Again from Greece and again from Crete. In Greece and from previous actions Royal Navy loses had been so heavy that the RN was in danger of having no capital ships left.
There was a gloomy conference about whether it should even try to evacuate troops from Crete.
"The Navy has never let the Army down" said Admiral Sir Andrew Cunningham, one of our greatest and least known Admirals.

And despite the heavy naval losses they prevented German sea troops from landing and evacuated a large part of the army successfully.
The navy existed to protect the sea lanes and to transport the army to and from its destination. In WW2 It achieved that spectacularly.

The army, like the air force had a much less successful war. Undeniably the best fighters on the allied side in France up to Dunkirk, the army was still defeated and almost destroyed, and lost all of its heavy equipment so painstakingly built up on meager budgets since 1931. The army enjoyed early success in Libya and Eritrea but was soon heavily defeated in the desert, Greece and Crete. The far east was a shambles with the Japanese achieving their D+28 week goals in 6 weeks and loss of the far east almost to India. The threat of a Japanese assault on Australia found the British Empire without any resources to send and one of the Empire's best allies, who's defence had always been implied,  had to rely on the USA for protection. 

It wasn't until late 1942 that the army came good and became a match for the Germans. By 1944 it was spent. Fighting troops had been in the line too long and were tired and replacements had been defending coastal forts in he UK for years and were not ready for battle. The British army was relatively poor after D-day and the battle honours, excluding the elite units, are few. Also bomber command was taking the brightest and best of available young men for the air war. The army had to make do with what was left after the navy had also taken its share.

Fighter command and the tactical air force in France were almost completely destroyed. Poor tactics and poor communications and a failure to realise that because our AA fire was ineffective the enemies wasn't. It was lethal. The battle of Britain was a great success but after the RAF used its its planes on sweeps over France. The idea was to scare up the Hun into a fight. The Germans simply attacked the sweeps when they were tactically advantaged  and ignored them when they weren't. Many RAF planes were lost and so many pilots too, in a fairly pointless 'dawn patrol' mentality.

Raf coastal command had been so neglected {for want of more bombers} between the wars that it was totally inadequate for its very important and soon to be realised essential role of protecting the seas from raiders and submarines. It took a long time to become properly equipped and until 1943 to be effective.

It really wasn't until 1944 that both RAF fighter and bomber arms became truly powerful in their roles. The Typhoon and Tempest rocket firing planes had a success rate against armoured vehicles attributed them that was so high, that even the US army requested RAF strikes from them. Quite unprecedented. 

Post war evaluation revealed that these strikes were never as effective as thought at the time. The large numbers of claimed tank kills was greatly exaggerated. A plane traveling at tree top level at 400 mph and trying to hit a vehicle the size of a panel van with what amounted to little more than a firework device was not going to be very accurate. But the Germans really feared them. One senior panzer commander was incensed and wrote of the stupidity of his crews in leaping from a 40 ton, steel protective container to rush around outside amongst the explosives and bullets. German troop movements slowed to a crawl and then became a night time only operation.

This is just an observation. There is no 'who's braver than whom.'  In battles fought and own losses vs enemies, and objectives achieved the royal Navy seems a clear winner. 
The army and air force might claim that is because the navy totally hogged the tiny defence budget from 1931 up until 1937. Admiral Cunningham said the Navy's success was down to tradition.
And having a former first lord of the Admiralty as PM probably didn't hurt either.

It was once noted to Admiral Cunningham that a defeated opposing Admiral had kept a copy of the 'Life of Nelson' by his bedside. 

 'Well, he evidently didn't read it.'


Friday 29 June 2012

Forza Italia?

Firstly an unlikely, yet impressive, victory over Germany in the Euro 2012 Semi-Final followed up with the Euro meetings. And an amazing second victory for Monti and his colleagues  in terms of getting a second Germany cave in. 

Of course, it still needs to be ratified in Germany -  bit its a big victory, Using the ESM to buy bank debt driect means that in effect Germany is recapitalising the Southern European states. 

Long-term this may still not save the Euro given its structural issues - but this is a big step for Germany as it changes the terms of the game.

A better day at last, except if your German perhaps...

Thursday 28 June 2012

Question Time: The last of the U-turns edition?

 Score 1pt for each correct question you guess that is asked by someone in the BBC Question Time Audience. maximum of 5 questions.
Enter your guesses into the comments.

Follow live on Twitter -{Slightly more fun than it sounds} ~ 

Bill Quango Thinks
1. 3p tax rise abandoned. Junior lieutenant sent over the top. Lions led by Donkeys?
2. House of lords reform snorefest.
3. Barclays cheat. RBS shuts itself down. Bankers..who needs them?
4. Queen shakes hand of enemy. Historic, unprecedented, meeting etc. BBC have been over the top smarming on this. Trying to make up for the  flotilla disaster I suppose.-Prince Philip went to Hirohito's funeral. Meeting ones mortal  enemies is hardly new.
5. Regional benefits. {BBC had an excellent program on this. Everyday items, toothpaste, dry cleaning, shoes as well as rents and car prices, and the north south divide. - incredible differences. At least 1/3 cheaper past Nottingham. {Baldrick will do his nut on this. North south divider. Punishing the poorest. Stripping those who have nowt of the little they haven't got. Equality can go hang! it won't ever come to pass Tony. Don't let it worry you.}

Week 7
appointmetotheboard - 14

Measured - 11
Bill Quango MP - 11
Mark Wadsworth - 10  
Timbo614 - 9
Hopper -9
Nick Drew - 8
Miss S-J - 7 
GSD - 6 
Budgie -6
Malcolm Tucker - 6
 Dick the Prick - 6
Lilith - 4
 Sebastian Weetabix - 3
Hovis - 3
Philipa - 2
Miss CD - 2
Andrew - 1
Cityunslicker  - 1
James Higham - 0
 Game next week and that might be the last of the season.

How did Barclays make it through that dark days of 2009?

So back to 2007 and the heady days as the crisis which ash felled the world brewed. of course, as we blogged here, it was reasonably obvious a bust would come, although the extent of it was under-estmiated by several fold.

However, if you were a Bank you could see the leverage wall collapsing, worse events took place as time wore on in 2008 and 2009; Banks started going to the wall for lack of liquidity. Fear of lending to one another gripped the market and we had a credit crunch.

The lack of liquidity could kill a bank, even a huge one like Wall Street leviathan, Lehman Brothers. It becamse crucial that Banks knew who could still borrow, who was still 'safe.' One such bank as risk was Barclays.

And now it come to light that they were consipirng to affect the LIBOR rate, to show them in a better light, to show the market they were still a trusted bank perhaps. Barclays makes much of its ability not to tkae a Government stake in 2008 - it did really via Qatar, just not a UK stake. Barclays share price went from 350p to 60p in a few weeks. How much of an imapct did this LIBOR manipulation have here (and follwoing this logic through, save the British taxpayer even more money, albeit by potential deception?)

 Senior Barclays directors were conniving in trying to fix the market for Libor. It maybe that this will only ever be viewed as a kind of day trade strategy where they sought overnight margin from a rate that benefitted them and their loans versus other market participans - but I wonder if this does go higher up the Bank to support the macro position described above?

By whistle-blowing Barclays are probably covered against future investigations and the other Banks will soon get their own place in the limelight of shame. It's a sad story though and shows that even the heart of the markets cannot be trusted, a sad day for financial capitalism and the reputation of London - but a better day hopefully as it lead to positive changes at the Banks (or their regulators keeping a better watch).

Wednesday 27 June 2012

FSA & Barclays

< Sees bandwagon, *jumps* ... >

Bit of a coincidence, after the Goodwin post below.  One might have thought, after all the FSA mea culpa in 2008, they would have jumped all over Barclays this time.  But no, they have blown them a kiss.

This is par for the course.  From my own little corner of the universe I can relate that several years ago a fairly clear-cut prima facie case of the same kind of distorted price-reporting - this time in the energy sector, and again involving a blue-chip, household name player - was brought to their attention.  They did nothing - nothing at all.

How can the Barclays case (and, we are led to believe, several more that will come to light in due course) not be one of making a false market ?  All the comments on the previous post bear repeating.  It Has To Be Prison.

Finally, late at night, I have just nearly fallen off my chair as Emily Brainless on Newsnight offers the observation: "it hasn't been proved that anyone lost money over this".  What the **** ?!  The whole point of distorting LIBOR was to make the other side lose money (and win bonus for the dealmaker concerned), on each and every occasion !  Sole purpose of the exercise: and self-evidently, it sometimes had the desired effect - read the emails you stupid woman.


Sticking It To Fred Goodwin

If Jeff Skilling of Enron can be serving 24 years 4 months in gaol (with fine of $45 million for good measure), all because he misled investors, we've wondered here several times why UK banksters couldn't be pursued on similar grounds.

In fact, belatedly some of them are indeed being pursued - if only in a civil suit - on exactly that basis.  Not surprisingly it's Fred Goodwin and the RBS boys: let's face it, the RBS case was pretty egregious.

We'll be watching with interest.  The article linked above suggests that focus is on the prospectus for an RBS rights issue.  This is an aspect that I've never really understood: corporate lawyers are always very much more twitchy about what gets said in a prospectus than what gets written in annual reports and accounts.  As we know, many AR's are a crock of the rankest ordure, but a prospectus is held to higher standards.  Could one of our lawyers explain why this is ?


Tuesday 26 June 2012

Whither the taxes?

Government borrowing for May is at record levels. Instead of a drop we are seeing a big increase over last year, from £15.2 billion to 17.9 billion. Simply put, although the austerity drive is seeking to curb the growth of the Government, the weak economy is reducing tax receipts at an even faster rate.

We are running very hard to go nowhere at all it seems. The only good news is that the continuing low gilt rates means that higher borrowing can be absorbed more easily than expected; but as the Government's headline goal is to shrink the deficit, this will be seen as failure.

Not that even more spending is going to help boosts tax receipts. Hopefully this goose is cooked once and for all. More Government spending is not helping boost the short-term economy substantially and payments made to pensions and benefits are a drain. An argument should be made for more capital investment as this should stimulate the economy - but with such opposition to HS2 and Heathrow expansion the Government is scared of large infrastructure programmes.

So how do we raise tax receipts - the contrarian view would be to lower taxes. Less taxes means more spending which in turn stimulates the economy and also increases consumption taxes like VAT. With such as high tax burden coupled with no return on savings people are not spending but trying to save and deleverage. Lower taxes would help to speed up this process and so bring forward eventual economic recovery. We need an emergency budget to start making some radical changes and probably a new Chancellor too.

Monday 25 June 2012

Are there really votes in Reality?

David Cameron's bold statements today on welfare look set to pave a new way forward for the political debate on public spending.

One thing the Government has grasped is that we are spending as a nation far too much money on Government sponsored handouts of one form or another. With the deficit stubbornly refusing to move, so holy cows will have to be slaughtered to right the Country's balance sheet.

The basic tenet that some of the more egregious benefits such as constant support for those who choose to have many children, support for those who could live at home etc should not really be that controversial. However, it always will be as the Government is taking away free money potentially - no one is going to be happy about that. Worse, with no tax cuts in sigh for the masses of taxpayers, this could well be a policy with no beneficiaries. Those who lose money are angry and those who still pay high taxes are still unhappy.

This is an unfortunate dilemma for any government in the UK which needs to be faced in the near future. benefits have been pushed beyond the means of the Country to pay them. This has allowed Labour to develop its own client base of voters - which of course is why this was allowed to happen in the first place.

The killer question is are the general public able to see the basic economic rational behind these sorts of policies. Or will the opposition and media whip up a frenzy of the poor being attacked by rich Bullingdon Tories?

Whether or not these proposals go anywhere, this is simply the key battleground in UK politics for the next 5 years. Either the reality-deniers win by promises of pure populism and dismal financial management or the conservatives win and manage to roll-back the state to something just-about-affordable. Sadly, I think the money at the moment would have to go on the reality deniers.

Friday 22 June 2012

Did The Earth Move ?

After all the bed-wetting amongst the green fraternity occasioned by two tiddly earth tremors in the Blackpool area after Cuadrilla went prospecting for shale gas, it's amusing to learn that geologists reckon Carbon Capture & Storage will cause earthquakes too.

Now hydro-electricity dams are fairly well-known to cause earthquakes as well.  So if we can just demonstrate that nukes and windfarms do the same ... a level playing-field !  What every green technologist claims to believe in.

A good weekend, and triple* subsidies all round !


* Quintuple for solar PV, of course

Bank Downgrades

Are perhaps a little more important than people realise. Of course many will understand that if a bank is downgraded then the cost of its borrowing will rise. If like RBS and Lloyds your cost of borrowing is already higher than that of your competitors then this is bad for business.

Of course, what is really bad for business is that the solvent banks like HSBC do not want to offer all the lending that the market suggests they could - this leads to firms wanting to borrow to go back to RBS and Lloyds, even as the interest rates creep up.

So a set of bank downgrades will lift the overall cost of borrowing in the UK, albeit not by too much.

However, many of the more complex transactions that banks have entered into have various default clauses in them - mainly against the customer not paying the interest, but some on the Bank for non-performance. One such frequent clause is the rating status of the lending bank. Thus the bank can be in default on its own obligations - remedies for this will of course be costly for the Bank in question.

In addition, may banks are in the clover due to the Swaps they sold to protect against rising interest rates which then collapsed in 2008. This means the banks are in a big profits on these swaps, even the the assets they lent against have fallen in value. The twist of the downgrade is customers being in a position to negotiate a set off of one against the other.

None of this makes pleasant reading if you are a major clearing bank today. In as much as people don't care they soon will if the crisis continues to deepen and the banks seize up altogether, shafted by the complexity of their position and inability to cope with the macro mess politicians have created.

Thursday 21 June 2012

Question Time . Looney left/Righteous right special.

David Dimbleby chairs from West Bromwich. On the panel are justice secretary Ken 'sleepy night snoozey snooze' Clarke, shadow health secretary Andy 'Gloria' Burnham, general secretary of the Unite trade union Len 'Lenin was a wimp' McCluskey, economist Ruth 'Maggie didn't go far enough' Lea and Midlands businesswoman of the year Julie 'Double Diamond' White.

 Score 1pt for each correct question you guess that is asked by someone in the BBC Question Time Audience. maximum of 5 questions.
Enter your guesses into the comments.

Follow live on Twitter -{Slightly more fun than it sounds} ~ 
BQ suggests
1.Jimmy Carr. {Why is it so hard to understand Twiiterers. Its not the money, its the hypocrisy}. Anyway ..Was Dave right
2. Greek election has saved the euro - discuss without resolution.
3. GCSE vs O level. Labour looking very scared about this already. Lots of disinformation going out and its just an idea at the mo.
4. Should any child be able to photograph their dinner?
5. Falklands. Didn't get asked last time..but its come up again so rehash this one. Argentina has 20% inflation and has run out of cash.  Our navy is even smaller than in 1982. However so is theirs. Our airforce is bigger. And better. Theirs is smaller. And worse. [is it possible to fly a Typhoon from Devon to Stanley? Last week i was told no. But not even with air to air refueling and stops in USA?}

Week 6
appointmetotheboard - 11

Measured - 10
Timbo614 - 8
Hopper - 8
Nick Drew - 8
Bill Quango MP - 8
Mark Wadsworth - 7 
Miss S-J - 7 
GSD - 6 
Budgie -6
Malcolm Tucker - 5
 Dick the Prick - 5
Lilith - 4
 Sebastian Weetabix - 3
Hovis - 3
Philipa - 2
Miss CD - 1
Andrew - 1
Cityunslicker  - 1
James Higham - 0

The Russians Are Coming ... and the Chinese

When you have a dysfunctional energy policy - HMG, this means you - regular investors will stay away.  So then who can you get to build the nuclear power stations you've decided you need ?

Why, the Chinese !  They've got lots of money, and their safety standards are ... errr, ... their standards are well known.

And when gas-fired power plants are really under the cosh, because the electricity market is being trashed by subsidised wind-farms and your crazy 'market reforms', who will want to step in and buy them ?

Why, the Russians !

We debate foreign ownership periodically around these parts and of course I'm on the side of letting 'em buy the assets if they want to pay over the odds. And of course several of you are not.  But as I said on Sackerson's estimable blog in connection with the Chinese buying farms in New Zealand, unless the Peoples Liberation Army moves into the cowshed I am not sure what the problem is.

The key, surely, is that the assets in question should be regulated to our standards in every respect; and that we can be sure the PLA isn't metaphorically taking up residence.  In the case of a nuke, I have my doubts even on the former. Right now the government is so desperate to get nukes built, it is bending over backwards and being royally shafted by EDF on the financial front.  I wouldn't put it past them to be 'flexible' on safety standards either.

As regards Gazprom buying Sutton Bridge, well, you've read me many a time saying that Gazprom has never paid cash for anything (hence they'll never buy Centrica, as is regularly touted) - they always find some sucker to pony up the capital for them via an 'asset swap' or some such delusion.  This being the case, and since the seller is another big energy company (EDF again !) I could quite imagine a deal might be do-able here.  

Gazprom's UK marketing + energy-trading empire GMT has grown hugely in the past 3 years, and conducts day-to-day business in a fairly conventional manner.  It probably fancies itself making good use of a CCGT plant like Sutton Bridge (though it might like to check out the load factors on gas-fired plants in the UK over the past 9 months, see 3rd para above.  Actually, why I am helping them avoid overpaying for an asset ?  Because I don't like EDF, that's why.)

Might frighten the horses, though ... and the occupants of the cowshed.


Tuesday 19 June 2012

Falklands distraction

Whilst waiting for the non-even that is likely to be the g20 communique, this little spat between Cameron and Argentina's President Kirchner is quite amusing.

Kirchner's increasingly pathetic ramblings about the 'Sovereignty issue' are starting to have a negative feedback effect on the Country. Cameron helpfully pointing out that Argentina's policy of nationalisation is not really a world leading achievement.

Shame Kirchner could not point out our nationalised banks in return, but then I guess her advisers are not so well informed or numerous as her British counterpart.

A little bit of manufactured nationalism, seems to suit all sides perhaps? I expect this story to drone on.

Danger: Revisionists@Work

June, it seems, is Re-Writing History Month.

We start with C@W favourite Hector Sants as he heads for the hills and tells us that "the Bank of England could have avoided a run on Northern Rock if they had taken up his idea to provide a loan to Lloyds TSB to buy the bank."

Alternatively Hector, if we are exploring counterfactuals, you could have supervised Northern Rock properly in the first place, which would look even better on your CV.

Eclipsing this local hero is global megastar José Manuel Barroso at the G20 summit. Evidently the old ones are the best ones, for he gives us: "This crisis was not originated in Europe … this crisis originated in North America".

Always goes down a treat, that one.  Remind us Jose, which were the first two banks to go under in 2007, even before the Crock ?  Ah yes, they were German banks. Still, if you use Gordon Brown as your script-writer, accuracy limps along in last position.

And speaking of the master, how he must have loved being in front of Leveson: so much re-writing to do, and so little time !  A pity it will be his Lordship that will have his hand on the Big Pen.


Monday 18 June 2012

Barmy Army Goes Cultural in Ukraine

You couldn't really make this up: but someone having done so, it certainly sets the mind racing.

Yes, on its rest days the Barmy Army pays a cultural visit to ... Chernobyl

'Tourists have to sign lengthy disclaimer forms and guides who show them around the area are only permitted to work for two weeks at a time before having to leave the area. Trips on the days England are not playing are booked solid with supporters keen to explore one of the most notorious tourist destinations in the world ... “England fans have perhaps got an unfair reputation because of the past and people think we just get drunk when we go to matches overseas. But there are thousands of football supporters who take a real interest in the countries they visit".'

Well indeed.  It keeps them off the streets and, truth be told, what you might pick up at Chernobyl could be a sight less problematic than from some of the dodgier venues in downtown Kiev.  I am told that during the Beijing Olympics, tourists were taken on tours of reeking open-cast neodymium mines; and when South Africa hosted the World Cup they offered evening pedestrian excursions to Soweto that proved very popular.

Question is - what shall we offer our own international guests when July comes around ?  The Shale Gas Earthquakes of Blackpool ?  The Victorian Sewers of old Soho ?

Suggestions ?


Eurogeddon goes on - grexit postponed?

Europe's never-ending supply of tin cans
Probably the worst result possible in the Greek election. A narrow and unconvincing win by the pro-bailout parties - with the crazies like Syriza and New Dawn Nazi's getting ever more percentages of the vote.

Perhaps they will get a Government that agrees to follow the austerity route, but the dynamic of the Greece economic collapse means that bail-out is just going to be followed by needs for another bailout. An 10 year internal devaluation is not a plausible or realistic scenario.

What we have got is another decent effort at can kicking - lustfully jumped on by all the Euro elites as some kind of salvation. However, Spain is not sorted, nor Portugal, nor Italy  - so none of the PIGS then. They have been PIGS for a long-time.

Of course, there is still a chance that the a Government can't be formed and we go around the houses again and have new elections, so the whole dispiriting enigma can continue for a few more weeks and months at least.

Now to the G20 and let's see what non-event communique they can come up with later tonight and tomorrow...

Friday 15 June 2012

Squeaky Bum Time - Grexit on the cards

Ok, no one knows what is going to happen. However, the signals are coming fast and strong now. The Chancellor George Osborne's announcement last night of another type of credit loan to the Banks shows they know perhaps a little more than they let on.

(As a quick aside, its a balance sheet recession, the issue in an acute crisis such as this is demand not credit. For once I'd be in favour of some big Govt capital spending increase, without actual economic activity we could have a 2008 recession rerun. Credit supply is only a part of the problem so this seems to me to be half an answer - this is not long-term keynesianism I am advocating, its a crisis response).

I see events unfolding thus:

Sunday - Inconclusive Greek general election, a total rerun of last time (the polls are almost identical). So no new Government on Monday and Syriza getting a chance next week to try and form a Government. Loans and market confidence in Greece evaporates.

Monday - Some chaos on the markets, Spain and Italy find funding hard - but no October 2008 crash, yet. G20 meeting will avoid this as traders and investors wait and see

Tuesday/Wednesday - Now what? Does the Troika give more money to Greece and will it matter? With bad policy management this could see some very sharp drops if policy response is not forthcoming from the G20.

All in all, shaping up to be a very interesting week - clogging will be heavy here in contrast to the lightness of the past week due to heavy workloads being endured by your contributors.

PS  And can England even beat Sweden tonight...

Thursday 14 June 2012

Trading Update June 2012

Gloom, gloom and more gloom - and that's just the weather.

Oh dear, this was not the time to be long shares with the Euro crisis at its zenith (well, its current zenith). Sticking to my strategy of holding whilst waiting for the event driven shares to meet their events has been a paper disaster.

However, a quick review of where the various investments are:

AST - Finally, progress is being made with Ascent Resources. With huge reserves proved up and some money in the bank to start production the company is off. Sadly, with credit so tight it is going to be a slow slog to fund more gas production from meagre revenues. Hopefully a buyout will happen. The largest onshore gas field is Europe will be a nice morsel for some business, probably at a firesale price too.

IAE - Bought here waiting for an offer that the Company turned down, should have sold on the loss, did not and now this is drifting down with the market. At £250 million valuation for a company pumping 20k barrels of oil a day, this is badly out of kilter and will come back, as will the buyers of such safe North Sea assets.

GKP - A terrible run since the takeover rumours, 60% down from its high, still though finding more oil than it can do anything with, now starting to pump significant amounts. Needs an Iraqi oil law and that is someway away yet. Worth well over £5 on takeover.

EMED - Sigh, 4 years and counting for permitting. Slowly edging there for Q3. Share price tanking in the meantime.

XEL - Xcite the most frustrating, drilling completing financing all agreed, placing done for the last piece, BP as off take partner. All in place to start developing a large North Sea field....yet the price falls with the market. NPE sale this week if applied to XEL would value the business at £3.85...the share price is dropping below 80p.

Overall down now 15% on the year, having been ahead 80% at one point. These AIM shares are a little volatile.

Question Time Quiz strikes again

David Dimbleby chairs Question Time from Stockton-on-Tees. On the panel: television executive and former Director General of the BBC  Greg 'Hutton did me in' Dyke, President of the Liberal Democrats Tim 'on the fence' Farron MP, Mail on Sunday columnist Peter 'panto' Hitchens, Housing Minister Grant 'U-turn' Shapps MP and Shadow Attorney General Emily 'All us Islingtonites have been mugged''Thornberry MP.

Score 1pt for each correct question you guess that is asked by someone in the BBC Question Time Audience. maximum of 5 questions.
Enter your guesses into the comments.

Follow live on Twitter -{Slightly more fun than it sounds} ~ 

BQ suggests
1. Leveson Day 3,000 - Dodgy George, Deadpan Dave and Delusional Gordon.
2. Spain. Is it right that Italy should borrow at 6% to lend to Spain at 3%, to save Europe's banks?
3. Syria. We begged Russia to do something and they have. They've sold the Syrians some attack helicopters. Happy?
4. Snooping bill. Really? Does it need a bill? ho's monitoring every comment in Britain, including this one?
5. Falklands. Argentina has 20% inflation and has run out of cash. A referendum might take the wind out of their 1980's sails. * Our navy is even smaller than in 1982. However so is theirs. Our airforce is bigger. And better. Theirs is smaller. And worse. [is it possible to fly a Typhoon from Devon to Stanley?]

Week 5
Measured - 10
appointmetotheboard - 8
Mark Wadsworth - 7
Nick Drew - 7
Bill Quango MP - 7
GSD - 6 
Timbo614 - 5
Malcolm Tucker - 5
 Hopper - 5
Dick the Prick - 4
Lilith - 4
 Miss S-J - 4  
Budgie - 3
Sebastian Weetabix - 3
Hovis - 3
Philipa - 2
Miss CD - 1
Andrew - 1
Cityunslicker  - 1
James Higham - 0

Tuesday 12 June 2012

Your guide to the Euro zone 2012 game

 For our readers who haven't been following the latest Euro 2012 game, here is a guide.

We've helpfully predicted the near future so you don't have to keep following it on Newsnight.



 Eu 2012 Groups & Schedule

 Group A

Russia 21 03 6
Czech Rep. 11 1-2 4
Poland 03 00 3
Greece 01 2-1 1

Greece, as expected, go out of the group early with a -77 billion goal difference

Czech Republic does well and decides to join the 'New EU' euro currency in 2014

 Poland decides to keep the Zloty, so goes out early.

Russia couldn't care less about the Euro yet goes through to influence. Hikes the price of gas.

Group B

Germany 30 0850 9
Denmark 20 14 6
Netherlands 10 2-1 3
Portugal 00 3-1 0

Portugal leaves the Euro directly behind Greece once they see the Drachma take off

Netherlands misses budget target and fails to get through. The shock result of the tournament.

Denmark coattails Germany and slips into 'New Eurozone'

Germany tops the group and goes on to win mastery of the entire New EU' finances and budgets

 Group C

Croatia 12 02 5
Spain 03 00 3
Italy 03 00 3
R. of Ireland 02 1-2 2

Croatia scheduled to enter in 2013 anyway, just joins the 'New Eu and New Euro-Xtra currency'

Italy limp into the next round after some incredibly fortuitous refereeing decisions & the largest bailout in history

Spain just keeps drawing {bailouts} and finally falls out of the EU over the Bankia crisis 

Ireland originally got through, but were ordered by Brussels to play their matches again until they lost. Fails to enter New EU

Group D

Ukraine 11 11 4
England 12 00 5
France 21 00 7
Sweden 00 3-1 0

France gratefully goes through to the New EU finals

England despite team UK's best efforts, also goes through, hoping to be kicked out soon

Sweden and Ukraine go home but weren't Euro currencies anyway, so  just continue to make unhelpful comments from the sidelines.