Wednesday 31 October 2012

Capitalists at work, again

Normal service to be resumed shortly when working hours reduced to less than 18 a day....

Tuesday 30 October 2012

New Nukes, allegedly!

Get well soon Mr Drew.

Sadly for today regular readers will have to put up with my interpretation of events in the world of energy which is somewhat slightly less informed and slightly more strident than our regular poster, Nick Drew.

But the Government is very over-excited today that Horizon, a German vehicle to build nuclear power stations has actually been sold to Hitachi of Japan. They are even paying a £1 billion for the privilege and have signed up Babcocks and Rolls-Royce as partners.

With the UK energy policy in a complete mess, this could be the way out the Government was looking for. What they are not answering though is the really big question - what is the subsidy being bunged at the Japanese?

Now Ed Davey, the rubbish energy minister (he is a sort of living embodiment of a reverse waste to energy process), is happy to tell the ill-informed hacks speaking to him that there is no taxpayer subsidy. Clearly, this is bullshit. What there is to be is an undisclosed massive guarantee around energy pricing which is in effect a tax on all energy users - so that would be everyone then.

Now, Hitachi, desperate as they are given the travails of nuclear in their home market post-Fukushima, are not going to have signed up to this without knowing what their bung is to be. But when will we find out?

The longer we are not told, the worse the news is likely to be. Somehow I doubt the subsidy to shale gas producers would be as big and also the energy would be cheaper, as we can see in the US....

Monday 29 October 2012

The living wage fallacy

When are you poor or not?

This is a favourite topic of our class obsessed media and even more a favourite topics of right on left wing political think tanks. Fresh from the success of pushing the 'relative poverty' mantra about a sate of poverty that could never be esapced even if you made the lowest paid multi-millionaires, we now have the 'living wage' concept.  20% of people are too underpaid, amazing how the statistics come up with an 80//20 division eh? Are the top 20% 'overpaid' too?

Apparently someone else can decide how much money you need to live on (see the problem here? Anyone else married?) happily in various parts of the UK. of course, this is then compared to average hourly wages and hey presto there are literally millions of us below the breadline, all it would take it a measly pay rise to make everyone comfortably off.

There are too many flaws in this sort of conceptualising to even try and point out; where do people live? what stage of their life are they at? (by way of example, I remember being a student and could go out 2 nights for £10 easily - its not that long ago) what are they trying to do? Are they working part-time because someone else is full time? Are they immigrants or others with poor skills?

There are a whole multitude of reasons why people take on poorly paid jobs. Rarely is it because of pure desperation. Even this study finds that the worst paying job is waitressing - and htis is the most causal labour of all, students, overseas visitors, all different types of people and very few making a career at it. Which incidentally does have a causal link to why it is so badly paid; there is demand for this kind of work so employers pay less. In a way they can't manage with say computer programmers.

it makes me long for the study into whether we should even have a minimum wage, I don;t recollect it has ever been done satisfactorily since we introduced that concept; these days of course we are onto the living wage - what next the "comfortable wage"?

Sunday 28 October 2012

Best TV Moment For Quite A While

On the subject of TV:  for this moment alone (Thick Of It, finale, 20:50 onwards - what ensemble acting !) I could almost forgive the BBC everything.



Friday 26 October 2012

I used to think this was i'm not so sure.

I think TV might be on the way out. Not so much the medium of television but the actual television set.

When I started to look at blogs I was quite surprised to find there seemed to be a large number of people who didn't own a Television. This seemed..well..weird. Like not owning a phone. Or a microwave. Or a bed.

Modern conveniences are not expensive. Only 30 years ago television was expensive enough that specialist shops rented them out to our parents. Now Tv, like all modern gadgets has a 'spend what you like' price elasticity. A perfectly serviceable flat screen TV/dvd/bluray and media system is available for about 1/2 a weeks pay from the average wage.

So why, I wondered, didn't people have them? I thought it a bit odd. Was it, like a friend of mine, a fierce unwillingness to pay the BBC any money? Or another friend who has only laptops and just watches DVDs and downloads, not actual live TV?  And I think even 5 years ago that would have been a bit..erm..strange. 
In 2012 there were almost 25 million TV licences sold, almost exactly the number of houses in the UK, raising some £3.8bn for the BBC alone just to make entertainment for us to watch on TV. So if 99.9% of people have a TV, then not having one must be abnormal, right? These odd people making jam by candlelight in their wicker homes instead of watching quality entertainment must be eco loons weeping over a squashed daisy or survivalists stacking guns and taking steroids or religious oddballs searching out the Word.

I have been monitoring my own recent TV use and its dismal. I'm struggling to watch programs I actually like. TV seems to have become old hat. I now watch less than 10 hours a week. I listen to far more radio than Tv.  At least twice as much, maybe 3 times as much. Mostly because its easy to combine with other activities. I listen to music as much as I watch TV. In fact I pay video games more than I watch TV. I certainly use the internet far far more than TV use.

And that is the root of the TVs demise. There are other things to do. And they are now easy to do. Read a book direct on download. Multiplayer mayhem {wars of the roses- a current fav} All night shopping. News. current affairs. Gossip. Politics. Youtube. Facebook. Twitter. And general mooching around.

I am the absolubte focus for TV execs. I have young children that keep me inside in the evenings. My commute is short. I go to bed very late. I have smart TV/iplayer. I have an expensive PVR recorder that can record any possible combination of movies and shows without any hassle.  Yet...
TV doesn't attract me to it much anymore. 

Downton Abbey is the ONLY program that is a must see for Mrs Q and I. One hour a week out of a possible 168 is unmissable. Mrs Q might add Strictly, and I try and watch Match of the Day,but that's still pretty  poor. Poor enough that I could quite easily now dump my expensive TV and media centre and just use the kids portable DVD player and buy that one must have boxset  a year.

Which is what Mrs Q's best friend does. No TV, just a laptop. She won't let her young kids watch TV at all {bit weird} and he's doing an art degree {unusual for a forklift driver,} which consumes all his time. And they also run their own business by night. And they haven't had a TV for 8 years.

And now I get it..They aren't {that} odd. Its just that with modern  pick and mix style entertainment choices they don't need the TV. Its not their go to device. The laptop is.
 Miss Quango {age 9} could watch the iplayer CbbC on the big TV. She doesn't. She watches it on her small screen ipad.

 {I say hers, Its mine. Not that I can ever find it. Its in one of the juniors bedrooms or schoolbags or under their bed. And when I do find it there's 1% battery left as it plays out the last of a cartoon about a musical rainbow pony or an advert for Spiderman real action web shooter guns.} 

When Miss Q decides to have her own place in the next decade or so I can now quite easily imagine she wouldn't even consider buying a TV. It will seem as old fashioned as a record player.

Thursday 25 October 2012

He is joined by a panel comprising Anti-business secretary, tortoise lookalike Vince Cable,
 shadow attorney general Emily Thornberry,{ultimate Islington Champagne socialist. Although she is very sensible for a former TGWU foreperson. She sends her two children to a highly rated selective school outside the borough. Told you she was sensible.} Claire Perry,{Tory class of 2010. Don't know much about her except she wants to end porn on the internet. } UKIP deputy leader Paul 'Nuts' Nuttall {rare outing for UKIP. } and Mehdi 'shouty' Hasan, {Itinerant political director of the Huffington Post website}

Enter your guess for what you believe the regional audience will ask of the panel. Maximum of 5 guesses allowed. Various special rules and vague promises apply that are hidden even more cunningly than in a government manifesto

BQ: Guesses
1. Jimmy Savile. Its the new Leveson. The great white lawyer sharks are circling the BBC and NHS.
2. 1% growth. Can we all go back to spending more than we earn now?
3. Council to pay for inequality. A very, very stupid ruling.See 1 above re sharks.
4. Must be an EU question. Votes for prisoners I'd say.
5.Child benefit caps. "its eugenics" said a mum of 10 on the radio earlier. Hyperbole alert.

The 1%

The 1%

The Office for National Statistics (ONS) confirmed a return to growth of 1% over the three months following a 0.4% contraction in GDP in the previous period.
That was higher than analysts had expected and the strongest quarter of GDP growth for five years.

1% is better than nothing. BQ industries and all my known associates can confirm a good October. Much better than it has been. But it is still a slow slog. Margins are small and the inequalities in retail that punish the high street are only getting wider. 
But, green shoots are there. Finally.

So what is the best way to nurture those fragile buds? Cut taxes? Cut business rates {damn right!}
Stop the payroll taxes? Banker tax? Cut rates to zero? Investment in exporters?Do nothing?
Governments rarely get a second chance to correct their errors. Here is a chance. What should the chancellor be planning?

Wednesday 24 October 2012

Stop QE and raise UK interest rates

QE is not working, we have tried this now for several years, since 2010. Every time the UK tries it the effect gets less and less - the law of diminishing returns.

Worse the more we continue the more likely people will realise the fallacy of pretend money printed to help the Government keep the deficit rising. There is no plan for paying back QE. I have asked several of the leading economists in the City in recent days and all are baffled by the answer. Some say it will be run off, others that it will be monetised. Not one of them seriously believes the bank will put it back to into the market - demand would crash and rates spike.

So the more we do, the more difficulty we are getting into. Worse now, is that the effect is so weak, yes the stock market is stronger and the banks are fully zombified without breaking. But the economy is flat. No new companies are coming in to take out the heavily indebted and so spark a wave of consolidation. The banks roll over loans they know cannot be repaid in nominal terms.

If we raised rates, the situation would change, savers would get a return, as would investors. More normal market disciplines would return - maybe even the banks would be forced to write off more loans and de-zombify the economy.

The pain would be worth the gain, of course, as it would stall house price inflation and favour exports over imports, no Government is going to want to do this. But surely this is the sensible option, going back to normality and away from fantasy? instead we have prediciotns of 3 more years of ultra-low interest rates; and so 3 more years at least of grindin nothingness for the UK economy. My only hope is the notes of the Bank of England meetings show that at least a new way is being discussed, even if only by a minority.

Tuesday 23 October 2012

What is BP Doing ?

We've discussed BP in Russia many times, wondering if they know what they are doing.  We're not the only ones this morning: the Telegraph, whilst airing a view that the shareholders will enjoy the dividend, also carries a more cautionary piece - and quite right, too.

In the context of stories surrounding another Russian energy giant, I've often pointed out that Gazprom never pays cash for anything.  It's always an "asset swap".  And why wouldn't they, being replete with the traditional Russian asset - land under their complete control - and no end of western suckers, always ready to kid themselves that a % of a chunk of said wasteland is worthy of a place on their balance-sheets.

Russian equity has many of the same characteristics: de facto control is everything.  Russians don't know what equity means.  Kto kvo?, as the saying has it - who rules ?  It ain't the shareholders.


Monday 22 October 2012

Iceland or Ireland?

As time goes by we often wonder what would we have done differently if we had our chances again? The fate of life means that we do not get to undo our mistakes or change our choices. Nor do we know how things would have worked out if we had chosen a different path.

Yet, in our economically broken Western world, there is one nation that chose a different path. Iceland did not go for a too big to fail choice - after all who was going to help? Iceland went for the full blame the bankers option, including defaulting on all foreign debt and leaving the UK and Netherlands to pick up the bill for defaulting Icelandic banks.

Ireland went for bailing out banks it could not afford and believing a promise from the EU that it would help out. Now Ireland and Iceland both suffered huge jumps in unemployment, whilst the Irish currency held together, the Krona collapsed and with it living standards in Iceland...fora while.

But here we are 4 years later and Iceland has 2% growth, is being re-rated in the debt markets, has strong exports and a primary budget surplus. Ireland has only the good exports bit, unemployment remains high, even having the euro as its currency has not kept up the living standards as wages have fallen so far.

Indeed in Iceland the rich have suffered by far the most as their assets were wiped out, this has a long-term impact on ability to grow the domestic economy as the savings rate has fallen, but then Iceland's populace has voted in 2 referenda to make sure it happened this way

So here is the comparison, yes Ireland is 10x the size of Iceland and all comparisons will have to be seen in the light of this, but 4 years on and the economies are going in opposite directions. I can;t say that Ireland made the right choice looking at the results - sometimes a hard landing is worth the pain in the medium term.

Sunday 21 October 2012

AIMing Opportunity?

You will have seen our post yesterday that we believe that the FTSE350 mining sector is materially undervalued; in this post we look at the wider AIM index.

AIM is of course a general “risk-on” play. With a whole heap of small companies across many sectors there is little correlation except at a high level. Given the nature of small companies they tend to be event driven stocks too – highly likely to re-rate on good or bad news at specific points in their development cycle. 

Of course since the early 2000’s there has been a big move to list more and more resources stocks, so AIM does have more of a correlation with the mining sector. But there is also a general steep decline in volumes traded over the past 5 years – not that surprising as five years ago was 2007 and the height of the bull market:





2012 to Sep


What we can see thought is s gradual recovery in volumes, this year should top £40 billion of trades the way things look for 3 quarters in. 

Then we have the comparison to the FTSE 100, since May this year there has  a been a big move to separate apart in the index tracking, with the FTSE100 12% better off than the AIM index. Over the last 10 years, this is one of the most extreme moves apart in the indexes. Clearly, the ‘risk-off’ environment with the disastrous macro-economic background has contributed this. What is encouraging thought is that generally the indexes move in tandem – this suggests a decent move up by AIM is possible over the next few months. 

Even better, if you are long on an event driven stock that has positive news, then you may well be in a very sweet spot, with a general index re-rate and also a stock specific re-rate. Time to get searching! 

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Saturday 20 October 2012

"Nobody Knows" - Ain't That The Truth

Everyone knows about Tim Yeo, chair of the Commons Energy and CC committee with significant vested interests in - and plentiful income from - renewable energy schemes (google 'Tim Yeo interests' for reams of stuff).  But sometimes he lets slip.

"You can't have a cap on ['green' subsidies] and guarantee meeting the carbon budgets, because no-one knows what the cost of low-carbon energy will be."

He then goes on to say that it's OK if Osborne insists on a cap in return for even more ludicrous 'carbon budgets', because the cap can later be changed, but the budgets are more binding.  Needless to say this will suit his business interests well.

No-one knows.  Now there's a way to run a policy.


Friday 19 October 2012

Friday Fun: We Are British

A young Taliban, desperate for water, was staggering through the Afghan desert when he saw something in the distance. Hoping to find water, he hurried toward the oasis only to find a British soldier by the well.

The Taliban asked, "Do you have water?" The soldier replied, "There is no water, the well is dry. Would you like to buy a regimental tie instead? They are only £5." 

The Taliban shouted, "Infidel! I do not need an over-priced tie, I need water! I should kill you, but I must find water first!"  "OK," said the soldier, "It does not matter that you do not want to buy our ties and that you hate us.  We are bigger than that. If you continue over that hill to the east for about two miles, you will find our Sergeants Mess. It has all the ice cold water you could want. Insha'Allah." Cursing him, the Taliban staggered away over the hill. 

Several hours later he staggered back, collapsed with dehydration and rasped ... "They won't let me in without a f-----g tie!"

Thursday 18 October 2012

BBC Question Time again. North of the border edition.

David Dimbleby presents Question Time from Easterhouse in Glasgow. Panellists include Deputy First Minister of Scotland Nicola Sturgeon MSP,{always on the show. Always feisty and always seems to do well. A sort of competent Hattie Harman.} Leader of the Scottish Conservative Party Ruth Davidson {Foot in mouth Ruth. So looks like that comedienne Susan Calman.}
Shadow Scottish Secretary Margaret Curran MP,Glasgow East winner. Just shows,  everyone reverts to comfort.}  Daily Telegraph Scottish Editor Alan Cochrane and Mark 'strawberry' Serwotka, General Secretary of the PCS trade union. Strawberry because he's red on the outside yet red on the inside.

Enter your guess for what you believe the regional audience will ask of the panel. Maximum of 5 guesses allowed. Various special rules apply that are hidden even more cunningly than on your utility companies website.
If you have been thinking about playing for a while, but have yet to gather the courage today might be a good time. Put down as guess 1: Scottish Referendum question. That's an easy point.
BQ predicts.
1. Scotland - Are you in or are you out? And there's no deals on offer Ok? Its in or out only. Nothing else. And if you believe that you probably still hang a stocking up for Santa.

2. Unemployment falls except in Scotland. Is that the too heavy public sector being trimmed? Or are the English taking away jobs from those hardworking East European Scots?

3. "Is it fair and equitable that 88% of Scottish households can take more from the taxman than they give." Ruth Davidson thought not. Out Romneying Romney.

4. Bound to be plebgate. I'm sick of it. All this story shows is how much of a really, really skilled operator Alistair Campbell really was. Blairbour certainly had a lot of talent. An evil, kind of megalomaniac talent, but very professional.

5.Remploy end production today. Government disabilities bill and the the report that 100,000 will lose out. Who knows? So much scaremongering and spin nowadays. I'd like C4 FACT CHECK to be made the official UK arbitrator. No one is allowed to release a report or make a speech containing claims of any kind until Cathy Newman has had a look at it first.

Winners were Anon and Hopper with 5. 
The winning prize is to determine if the new voting age should be twelve.

Sorry for the late results posting. I had to make some changes to the leases on some properties that you own, but I rent from you, but then rent back to another colleague, who rents some to me, in order to ensure the best value for you the taxpayer {but mostly for me.}

Ages Since I Fisked

Does anyone fisk anymore, or is it just so 2006 ?  Whatever; the sight of an amusing subsidy-seeking bleat-piece in the Grauniad gets the juices flowing - particularly when it offers a brand new euphemism ! This is by Clare Wenner, "head of renewable transport fuels at the Renewable Energy Association".  We'd guessed, Clare, we'd guessed. 

"Given all the hysteria you'd be forgiven for believing that wiping out the biofuels industry will solve world hunger. It won't... Here in the UK, our home-produced biofuels provide as much high-protein animal feed as low-carbon liquid fuel – essential for our hard-pressed livestock industry. This feed in turn displaces imported soy, which is often associated with high carbon emissions.  

Is the Guardian itself being hysterical ?  Surely not.  Anyhow – with by-products as valuable as that, no need for a subsidy, then ? Oh, right. How silly of me.

Many NGOs also neglect to remind us that one-third of world food is wasted. And extreme weather events consistent with climate change itself are destroying crops – yet transport is a major contributor to carbon emissions. 

Wow. That brainstorming session you had, when you got all the possible arguments on the table and agreed they must all be crammed in – it really paid dividends ! 

The European commission's new proposals aim to dramatically reorientate support towards advanced biofuels. We've been asking for a clear 2020 pathway to reward exactly that. 

Hey, I collect euphemisms for ‘stonking subsidy’ - and ‘clear 2020 pathway’ is entirely new ! Thanks. Split infinitive ?  Let it go, I'm feeling generous now

The proposals – to allow crop-based biofuels to reduce our fossil fuel use by only 5%, and to withdraw the market for these biofuels altogether after 2020 - mean that around £700m of investment in the UK biofuels industry could be in peril. 

How’s that ? Are biofuels going to be banned ? Oh, I see, it’s just that we are not going to be forced to use them quite as much 

You'd think we can go on using oil forever. We can't. And neither can we decarbonise transport at the pace we need to with electric vehicles. EVs can contribute more to climate change than cars running on oil and they can create more toxic waste. Does that mean we trash EVs? Of course not. 

Actually, ahem, we should trash EVs … for every reason under the sun 

But what is particularly galling for the biofuels industry is that we have been attacked with considerably more venom than other non-food uses of land, such as cosmetics, cotton for our disposable clothing culture, or detergents. None of these industries are being made to account for land-use changes."

Nor are they lining up for subsidies

Don’t get me wrong, Clare – we know they would if they could. 


Wednesday 17 October 2012

Jobs keep rising in unrecession

Well, as usual, the economist can't explain how we can be in recession for a year but see the number of unemployed, even the number of youth unemployed, continue to drop in the UK.

Naysayers are prone to jumping on the bandwagon of its all 'self-employed' people who are not working really or part-time jobs. Of course, some of this will be true, but many of the 'self-employed' are reflecting the broader move to contract work in society - a move which has been ongoing since the end of a 'job for life' era in the private sector 20 years ago.

of course, being self-employed and managing to avoid some of those egregious NI taxes, plus pay yourself dividends too may be working out nicely for some people - certainly a whole bunch that I know have done this - anecdotal alert - but I certainly never used to see this on the scale it is now. I wonder why...must be some relationship between high taxes and people doing things to minimise tax payments - any ideas?

Plus of course the Government is for once right to trumpet that the "unforgivable" cuts to public service have led to a net creation of jobs - in fact an all time high. Who would have thought? And of course this is a double bonus, because less state spend is helped by increase tax revenue from private sector jobs.

Given the dire state of the economy in general, its is pleasing that there is one bright spot to write about occasionally!

Tuesday 16 October 2012

Andrew Mitchell should just punch someone.

Chief Whip, and Tribune of the people, Andrew Mitchell is still in the news. Despite the cycle rumbling on for three weeks or more since Mr Mitchell allegedly called members of the police force 'Plebs' he remains a focus of the media. The Left wing papers have been vocal in their calls for the man to resign but so to have the others. The Daily Telegraph also think he should resign his position 'for the good of the nation.' Labour MPs are tabling a publicity stunt motion that would see Mitch paying £1,000 for using a public school word to someone in authority and trying to use the old 'don't you know who I am? line.' A pretty serious offence, granted.

Earlier in political history, whilst in office, the MP for Hull and Deputy Prime Minister of the United Kingdom, John Prescott, punched a member of the public in the face.  Live on TV he turned and lamped a man in acrowd. Mr Prescott had been provoked by the man. An egg had been thrown.
He was told off by the Prime Minister for his poor conduct. A rebuke was his punishment.

The same DPM then went on to have a two year affair with a secretary who was 24 years his junior. He was reported to have used his parliamentary grace and favour flat to carry out the affair. His punishment this time was more severe. He lost his department but kept the free apartments, pensions and salary. The Independent changed their 'Two Jags' tag {because he had insisted on having a ministerial Jaguar} to 'No jobs.'
Eventually he was given a travel brief, sending him to the Far east as a special envoy.He resigned as Deputy Prime Minister when Tony Blair announced his resignation.

 A longtime campaigner against the House of Lords, John Prescott accepted a peerage and entered the House of Lords. He claimed £41,000 in expenses for that role for last year.
He is also standing for the post of an elected police commissioner, paid at some £75,000.

So.. If Mr Prescott never resigned for his misdemeanors, and there were plenty of others involving foreign travel, expenses and a House of Commons credit card, is Andrew Mitchell's offence really a resigning issue?


The Company He Keeps

Speaking of colourful capitalists, my word doesn't Nat Rothschild keep interesting company?  Deripaska, Mandelson, little George Osborne of course and, they do say, Saif Gaddafi.  "Interests in Montenegro, Romania and Ukraine" - and Brazil, Russia, Indonesia ... Today's news is all about him and the noisy crowd at Vallar / Bumi.

Talk about Capitalists at Work!  What an adornment to the City of London - and still only 41. We shall continue to follow his career with interest.  What will the history books say?


Monday 15 October 2012

Virgin to bid for RBS?

I really like Richard Branson, his companies have really changed things and his approach to new ventures and branding ia amazing. One thing he loves to do is make a big splash where there is in fact little chance of real activity. He did this, making a big noise about buying Northern Rock during 2007, which whilst Virgin bought bits in the end, it never really was serious about taking on the whole thing.

Here we are in 2012 and it is the same with the RBS branch network. Virgin have little capital, a poor brand in banking and there is currently not much money to be made in banking. Also, Santander, who having bought Abbey, Bradford and Bingley and a few other banks has lots of experience in bank integration, could not make a deal with RBS work over 2 years!

Yet Virgin is touted as a bidder - it is a great way to get some headlines, but it will never happen. Great PR - Branson at his cheeky best.

Sunday 14 October 2012

RBS in the mire again

News breaks after the markets have closed on Friday (always a bad sign) that the Project Rainbow deal - being the RBS sale to Santander of 20% of its branches, has collapsed. The main reasons given are that the IT infrastructure was not going to be transferred in time for February 2013 and that the Spaniard’s patience with a deal whose heads of terms were signed in March 2010 had run out.
There are other reasons no doubt behind this too. Santander is after all a Spanish business and I can’t imagine the Spanish regulators are very happy about seeing precious capital get allocated to a non-Spanish institution.  Santander UK has also postponed its IPO indefinitely in an additional sign of trouble for the bank.
For RBS, this is a much bigger headache though. Under EU regulations concerning state aid it has to divest itself of the bank by Feb 2013. This just can’t happen now.  There may be no real chance of finding another buyer in short order and in any event, such a small bank is of little use to anyone except perhaps Co-Op and they already have a similar challenge trying to buy a business off Lloyds. This leaves the IPO route, but again, a small bank like this is hardly a tasty morsel for the worst IPO markets in decades.
All this means then that the price action on RBS is going to look pretty bad on Monday. The £1.3 billion is a decent chunk of the equity in the bank and you would expect that 3% of potential equity is gone, which was the sale price. In reality, the markets will not take that so easily is my view. RBS has had a good run in the last couple of weeks as bank liquidity has eased up it has gained nearly 40p on its price  - after this news it will be a real struggle to stay above 220p by the end of next week in my opinion.
Another interesting element is the effect on Lloyds Banking Group, its Project Verde deal to sell branches to the Co-op will have many of the same challenges - can that be completed? This will also likely weigh on the Lloyds shareprice too which has risen to 38p in the last week. Again, expect this to give up recent gains and head back below 35p next week.
Banks used to be boring, will they ever be again?

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Friday 12 October 2012

Friday Street Vignette

Some of you may have noticed that I have not been around  much this week, such is the mistress of capitalism forcing me, err, onto the streets of London this week at the behest of my employers.

Even this harsh labour is not without its fun moments though. One of my favourite at the moment is enjoying the sheer number of Romanian and other East European scam artists who are trying it on. Now this is of course illegal, and the picture to the ledft here, courtesy of this article, shows The streets re teeming with these types and in a way I quite like them, given I know what they are doing it's kind of like playing a 15 second role in a Derren Brown show.

Yesterday I had a new one tried on me as I was walking down Holborn not far from Hatton Gardens. 10 yards in front of me a man looks down and picks up a gold ring - a man's wedding band a bit like the one in the picture below. He starts looking at it and weighing it in the palm of his hand.

As I walk past I casually remark, "good spot!",

As I do so he turns to me and says he is just a tourist and has not need of it and offers it to me for free (at this point the penny drops for me, so to speak).

"Ahh, How kind I say - but really it is of no use to me"

"Take it for your family" he says.

I push it back into his hand, but he give it to me.

"Fine then, thanks" I say as I move to walk away.

"How about some money for my lunch?" he says.

"No cash I am afraid"

"Well, cash machine then" he points vaguely over the road. Now at this point I do consider if he is likely to get too shirty or violent, but it seems unlikely given his size and the busy street we are in.

"Really, have it back, if you need some money go over to Hatton Gardens with it"

"No" he implores "You must take it."#

"I have to go" and with that I turn and walk away. As I do I see the puzzled look on his face. Clearly no one has actually walked yet with the ring whilst not handing over a decent sum of cash - his face is quite a picture.

Anyway, that is a first for me, the 'ringer'  - any other stories like this? I have a few more and I can't believe its just me who keeps bumping into these street conmen.

Thursday 11 October 2012

BBC Question Time Competition

With Grant Shapps,big majority Tory seat holder. Cameron's backer and future big hitter. Caroline Flint, Why do I dislike her so? There's plenty of other incompetents in government. Shadow Energy and climate change..Yes, there is a shadow climate change minister. the science is settled, buried and concreted over with a windmill, rainbow energy, subsidised field of dream planted on top for all our bio fuel needs. Simon Hughes, unsuccessful London mayor candidate and unsuccessful Libby leadership candidate. never mind. Third time lucky. Clegg hasn't long left. Benjamin Zephaniah Jamaican Street poet, which since evil Gove decided on school reforms is no longer on the curriculum. And Cristina Odone.Well traveled across the political spectrum journalist. Can be good.

Enter your guess for what you believe the entirely balanced and impartial regional audience will ask of the panel. maximum of 5 guesses allowed. Various special rules apply that are hidden in the terms and conditions even more cunningly than on your mortgage application.
BQ predicts.
1. We're all still in together. but Cameron's leadership seems secure for a bit longer.
2. GCSE resits. That's not what the unions wanted. Or the parents. Or the kids.
3. BAE merger. Now what are we going to do?
4. Abu Qatada - Last time for him, ending a show running longer than the mousetrap.
5. Lowering the voting age. Will it help? 18-20s are already the least likely to vote.

Dave Did OK. Altogether now ...

Yes, I reckon he did.  Showed he meant business.

Jolly political weather
Government is a breeze
We’ll do whatever -
Whatever we jolly-well please!
And we’re in this together
Coalition’s a social disease
So they’ll string us up together
From the lamp-posts and from the trees

Osborne may be more clever
Boris may make more row
But I’ll be PM for ever
Kiss my arse and bow!
And those buggers will never
Get the job I am doing now
No, none of those buggers will ever
Get the job I am doing now

Others will fill their faces
Dressed in their Bullingdon suits
Kicking over the traces
Filling their wellington boots
As long as they know their places
I just couldn’t give two hoots
Yes as long as they know their places
Well I really don’t give two hoots

Twenty years on, whoever
Is tempted to do as I do
Will probably cobble together
A deal with Clegg Mark 2
And they’ll think they can govern forever
But the people are hard to please
So they’ll still swing together
From the lamp-posts or from the trees !


Wednesday 10 October 2012

The best speech award goes to..

Good speech from Cameron. 

Measured and calm and full of resolve. He had the now obligatory back story too. I expect come the leaders debates all three will be telling us 'whatever happens I've had a great time and its been a wonderful journey and I'm so proud of me family..'

So good.. good plus even. If not great.

For me the real eyeopener was old blondie, Boris Johnson.
 For the first time I could see it. Not just as an MP or as the London Mayor, but as a party leader. I could see people saying '..well..I like I'd vote for him.'
 A very good, showy, funny and flamboyant speech from Boris Johnson.

He has that knack of making politics accessible. Miliband, in his well received speech, said 'One Nation' every 95 seconds to try to make his point. 
Boris says "Hobnobs and Marks and Spencer' and we all get it instantly.

Democrats wrote Reagan off as a shallow movie star. Arnie was 'a no talent Austrian bodybuilder.' 
Clint Eastwood couldn't be a town mayor because he had no political base and no executive training...and he was thought to favour shooting perps over due process!
And that was before today's ever more celebrity obsessed, reality life, vote on/vote off, networked pick n' mix culture.

Could get very interesting.

Tuesday 9 October 2012

Shale Gas - yeah!

At last George Osborne has grabbed hold of those pesky Liberal Democrats and given them a good shaking, As the ever insightful Nick Drew has been writing here of late, there is something seriously amiss with UK Energy policy - that something is, err, energy.

For with Nukes closing, Coal too expensive under emissions schemes and renewable both fantastically expensive and unreliable, a worrisome situation was emerging.

On the other hand, presented to us was a solution. Shale Gas exists in large quantities and although more expensive to produce than normal gas, with some more environmental challenges too, it is much cleaner than coal and plugs straight into a redundant grid with many Gas power stations already in mothball.

So by announcing yesterday tax breaks yesterday we are at last moving forward with a solution to our self-created energy problem. Of course it is not just an energy shortage which is the issue. In the long-term, relying on expensive oil and nuclear will hammer our manufacturing competitiveness as input price inflation eats away at the competitiveness of products. Countries reliant on oil are going to find themselves mashed by the low price of US goods given their lower energy intensity production costs. So goodbye Japan and Germany in the medium-term - closing your nukes and having no alternatives ready and Goodbye France for deciding not to exploit shale.

At last, signs of a decent policy ahead, let's hope Ed Davey and the Liberal Democrats see sense and realise that the lights gong out is not something we want to contemplate and that a dash for gas is the most environmentally friendly option open to us.

Monday 8 October 2012

'Lights Going Out' - no, really?

MSM Catch Up Eventually
Exclusive to all papers, the lights may be going out in 2015 ! 

Well it’s nice when the MSM catch up: we started a little C@W series called ‘watching the lights go out’ way back in 2008 (when the trajectory of declining generation capacity became obvious to anyone paying attention) and have returned to it periodically. 

Of course it’s all being treated as bolt-from-the-blue stuff, which it ain’t. At the same time, it is highly disingenuous for Ofgem to claim they first worked it out in 2009: show us the action-plan you put in place!  Let us read the minutes of heated debates between yourselves and the mad decarbonisers of DECC, when you railed against relying on fantasy nukes and frivolous windfarms.  Actually of course there was a general election just around the corner ... so you buttoned your lips.

Anyhow: for all the journo-come-lately’s, here are a few salient facts. 
  • There are no surprises here (see C@W passim)  
  • It’s fun but fatuous to blame the EC, because the Large Combustion Plant Directive has been in force since 2001 and the closures it will bring about have been locked in and known in detail for years 
  • The situation is much worse in Germany, which will provide a handy test-bed (possibly as soon as this winter) for assessing the consequences, electoral as well as electrical 
  • The lights won’t actually go out very much: but power supplies to industry will interrupted and the economy will definitely suffer 
  • A new round of nuke plant-life extensions will be rapidly granted 
  • EDF will be upping its price for the miserable new-nuke-in-2021, and the DECC-twats will be telling ministers to agree 
Perhaps more significantly, when people see that guaranteed prices of two or three times the current market price are on offer to nukes, every other bugger will naturally want the same, including the only ones that can actually contribute something before 2016, viz owners of currently-mothballed gas-fired plant and prospective developers of the same. DECC will announce its ‘capacity payments’ scheme shortly, which will be the vehicle for this danegeld-fest. 

A more certain way to ensure the doubling or trebling of (wholesale) electricity prices could not have been devised. We can only thank God that the global gas market is too big for the cretins at DECC to tamper with. Having said this, they will probably try.