Tuesday 30 April 2013

Lloyds turning the banking tanker

As many regular readers will know I have a fairly bi-polar view of the economy. On the one hand doomsayers predicting the end is nigh are ALWAYS wrong in the same way that those who keep buying gold even right past the high point are going to get burned. However, the idea that some kind of strong recovery from the Financial Crisis is not any more plausible either.

It takes 10 years to recover from such Financial Crashes and we are only 5/6 years in, so plenty of 0% growth success stories will run.

Having said that it is quite encouraging to see Lloyds Bank return to profit today, even better is the underlying reasons; primarily they are managing to wind down their bad debt book at a good pace which means they can find buyers at above pure firesale prices. Secondly their core commercial and retail business remains strong and finally their costs cutting is reducing costs much faster than any losses can be piled up.

On the downside of the cost cutting is lots and lots of lost jobs, tens of thousands; generally though you could hear a pin drop in sympathy with the loss of lots of Banking jobs. Lloyds was never a big casino bank though and was pretty spread out across the Country to these losses are a shame, if necessary. I note too far less outsourcing by this bank (and RBS) to India and the Far East now that they are state owned.

Given Barclays and now Lloyds are in much better shape it only really leaves RBS holding us up.

Recover in the banking sector is a key step, of course the recovery has come due to the fact they won't lend any more on anything like reasonable terms, but you can't build Rome in a day

Monday 29 April 2013

Cyprus: Not So Much A Haircut ...

How much would you like off?
Under a headline 'Bank of Cyprus Executes Depositor Bail-In', the DTel gives us the ghastly numbers.
  • 37.5% of deposits over €100k converted to equity
  • a further 22.5% held in reserve 
  • yet a further 30% frozen
(The core phrase there seems highly apposite, doesn't it ?   '...Cyprus Executes Depositor ...')

Now then, you Scotties, how about independence and joining the Euro ?

I was also interested to read a couple of weeks ago that Germany's 'Council of Wise Men' have declared that deposits are all too easily spirited away (and depositors are all too often German); so that the next rescue should be based on property levies.  They've noticed that when property holdings are taken into account, Germans are by no means the wealthiest folk in Europe.

That's all well and good on paper, O Wise Ones, but (a) you'll need to mark those property values to market quite carefully; and (b) who has the liquid assets to pay property levies on the required scale ?  And if they do, pray where do they keep them ?


Saturday 27 April 2013

Compo: Names for the potential Scotts currency

What would the currency of an independent Scotland be called?
What name sums up the spirit of the new nation? Or stereotypes the nation nicely?

The Hadrian ?
The Bravehart?
The Sectarian ?

fire away...

Friday 26 April 2013

Margaret Hodge shows she is witless fool, again.

Ban accountants from helping with complex accounting issues, that is the latest idea from Margaret Hodge who is an inept fool, well out of her depth on the Public Accounts Committee.

She has really got to me recently with her pathetic grandstanding on Google paying tax etc. Hodge is a world-class lefty hand-wringer who blames the problems on the users rather than the software to borrow some tech speak. And makes a nice lot of witless grands

The reason accountants have to advise the Government on Tax law is because it runs to 11,000 pages, that's right eleven thousand. It's a bit complicated. You do indeed need a degree from Oxbridge to understand even a bit of it. It's why even the top accountancy firms have to employ thousands of specialists.

The real issue is of course not that these accountants then abuse their position of insight to try and avoid taxes; that is merely a statement of the bleeding obvious.

No, its that by asking tax accountants to review tax law you are only going to get one answer; more tax law. For this is their bureaucratic living and as we know, bureaucracy is very keen on darwinism and seeks to expand at all times. The issue lies not with the Big 4 but with the Government itself.

So the key is not to ban experts from helping the Government, that is just silly. The key is to reduce the amount of taxation law - the person to lead this certainly needs legal and accounting advice, but they need to start from a base of trying to halve the laws.....oddly I thought this is what we employed politicians for. To be the ones who direct the experts in the right direction?

Thursday 25 April 2013

Question Time: Abu edition. Pt 94.

 David Dimbleby chairs Question Time from Worcester in the last programme before the local elections.
On the panel are 4 people you've never heard of and one you are about to hear a lot about. Economic secretary to the treasury, Sajid Javid MP; shadow energy and climate change minister, Luciana "I can't comment about Suarez as i'm a girlie" Berger MP; deputy leader of the Liberal Democrats, Simon 'slippery' Hughes MP; Nigel Farage MEP, leader of UKIP; and Natalie Bennett, leader of the fairyland CCCP Party.
This tournament is still sponsored by 
Timbo 614
Week 13

DtP 94

ND 85

BQ(MP) 82
 Timbo614 81

 Hopper 79
 Measured 78
 GSD 70

Malcolm Tucker 69
Budgie 67 
 Botogol 65
kynon 63

Blue Eyes 58

Idle 44
Taff -38
CU 31 

 Andrew - 9
Sackerson - 7
James Higham - 7 

I will have an early punt on the three obvious ones
  1. 0.3% its better than 0% increase, but only just. Plan B?
  2. Should the UK dump the ECHR and put old tubby beard in a rowboat, point him at France and wish him luck crossing the shipping lanes on his way to Strasbourg?
  3. Papers reject Leveson deal. Should they all be nationalised. 
  4. Local elections. UKIP & Labour are standing in wards where i've never seen either before. Are Cameron & Clegg about to see a much,much worse than the expected 300-400 seat loss?
Web snooper's bill. Now Lib Dems are against. Good. 
Dimbletie - A flower motif on blue.

Wednesday 24 April 2013

Postcard from Portoro┼ż (2)

So what’s with Slovenia & Croatia ? Firstly, Croatia got almost all the coastline – and all the islands – after WW2. Slovenians go to Croatia en masse for the beaches, and many of them have holiday homes there. Almost all of them can understand Croatian & vice-versa; and those over 30 learned Serbo-Croat properly at school, meaning reading’n’writing it (in Cyrillic: Slovene is in Latin script). They share the output of a jointly-financed nuclear power plant situated in Slovenia (a Westinghouse jobber, none of your Soviet junk), and of course a reliable nuke represents a reliable cash-flow: always good for lining pockets ... So they airily talk about building another; but (need I say?) it is completely out of the question. 
That's Croatia over there - but should it be?
And in July, Croatia too will be an EU member (though joining Slovenia as a eurozone member is a remote prospect indeed). So – brotherly neighbours ? Not a bit of it, for the border is hotly disputed - enter 'dragonja croatia' in the googlemaps search-bar and see the dotted lines.  In particular, a significant 500m of estuary held by the Croats would mean a lot to their Northern neighbour which only enjoys 46 km of coastline and just one port, Koper. The 500m would transform their access to the Adriatic and international shipping lanes. (I’ve met a disputed border once before, in my soldiering days, helping Oman repel the Yemenis in the ‘80s. They can get very nasty indeed.)
Source: Wiki

Also, while Slovenia is rather more equally split as between white and red, in WW2 Crotia was - how shall we put this – rather more uniformly white. So the tensions remain. In fact, Croatia technically shouldn’t be able to join the EU party at all (or NATO) until this spat is settled – but they will (and have), bcause the expansionists decree it. 

Meanwhile, the issue has gone to binding arbitration, and who knows what happens then ?  But it's all a bit parochial compared to relations with Germany, which will be the subject of the next postcard. 


Tuesday 23 April 2013

Finally - something that can definately be cut!

Our language was designed a long time ago, in a different era. It is no longer fit for the 21st century.
Over the years a number of immigrant language words have joined our native English. Latin. Greek. French. German. Hindi.Arabic. They've all come over here and taken over the jobs of hardworking English words.

That has left a number of letters virtually redundant. These letters have the same status as other, more hardworking letters. They consume space on a keyboard. yet some of them do little or no work at all.

Q is an example. Q does virtually nothing. In the picture above Q is for Queen. And Q is always for Queen because we struggle to think of even a single other word that starts with Q.
A hardworking letter, like S or T, goes to work and sees Q, still in bed, and likely to stay there all day. And Q can't even function on its own. In needs U to help. That's two letters in use.

Let us abolish Q.

If we need a word like queue, quick or Quaker, we can use C.
Cueue, Cwick and Cwaeker.
And X. X is worse than Q - X-ray and X-men, which aren't a real words anyway, and Xylophone, that just seems to be a word made up to give X something to do. Z is on the abolition list too, but a Z-X merger could save Z.
Zylophone. Z-ray. Z-men. Job done - goodbye X .

K is another letter on thin ice. Hardworking C is a ready made replacement.
Kitchen - Citchen
Greek - Greec
Smack - Smac.
Knowledge - duh! Nolledge.

 Special K is the real loser here. And Potassium. They can rebrand. Scrabble users will have to adjust but within 1 generation those missing letters will be forgotten.

Think of the space saved on keyboards that could be put to much better use such as incorporating a ½ or a  € or the common @ on its own key.
Thinner dictionary. Less school time learning wasteful letters. Easier for foreigners. 
This is a cut worth making.

And apostrophes. Goes without saying they are out. Waste of time possessives.
The Kings arms
The King's arms.
Oh, how will we know what this means without apostrophes?
Well, Lynne Truss, just look at the context. 

"We shall meet at the Kings arms." 

Does that mean a reunion at an  inn or a public house or by the upper limbs of two or more male monarchs? Not hard to figure out.

So, that's enough cuts for starters. But Capital letters, semi colon and inverted commas, plus the letter J are on notice.
J has a worse record in English use than X or Z. But kind of hard to write just jerk the juice jug without it.

An end to cuts?

There is some very good journalism in The Times today (paywall, so no point with a link!) discussing the new spending round the Government is about to embark up on and how much ministers are trying to fight off the coming cuts.

As always the Treasury gets the blame and the Ministries decide that the only cuts that can be made are to the Alzheimer's clinic and the Hospital.

The thing is, can the UK really hack this austerity thing? I don't think so, the need is for wholesale privatisations - selling the BBC would be top of my list along with a chunk of the specialist health services and bigger infrastructure. That along with stopping the Government from doing big chunks of what it currently tries to do.

However, there are no votes in this approach from a populace used to the Nanny state; so what to do? I can see the default position being minor cuts, more tax rises and a slow Japan style death with the national debt slowly climbing towards Italian and then Japanese levels whilst politicians hand out the treats to harvest votes.

Monday 22 April 2013

The Next Bailout - Slovenia? Postcard From Portoro┼ż

Slovenia - not Venice
Never been to this country before, which is a shame because it's a really nice place. At least I made it here before it all falls apart: Slovenia seems to be on everyone’s shortlist for the next eurozone casualty. They are earnestly hoping to see the Troika here soon: they do not want to be behind Spain in the queue, for fear the EC/ECB/IMF will have nothing left by then. Also, they want to be sorted well before their southerly neighbour joins the EU (which makes matters rather urgent ...): Croatia, they say, will bring the entire show down for sure – a real basket case, deeply indebted, deeply corrupt and completely dysfunctional.

What will precipitate a Slovenian crisis ? It may be the impending loss of the Prime Minister, who has said she’ll resign if it can be proven that she copied-and-pasted her Masters dissertation. A panel of two professors armed with Google are convening. Google Maps has already brought down one minister, who claimed a non-permitted building development on his land was already there when he bought the site. It was the work of a few clicks to prove it wasn’t ... 

So what am I doing here ? Energy of course.  Slovenian energy users are suffering badly from the fact (previously unknown to me) that the single-market reforms in gas and power (which – despite what Budgie says – are working pretty well in most countries and really well in some) have passed them by. No-one can be arsed to bring EC sanctions to bear on the bad actors in a country as small as this (pop. 2 million). So, despite nestling between the fairly good market of Austria and the improving market of Italy, they are stuck in a pre-competitive, illiquidity time-warp. I can only offer a few palliative suggestions, and the unhelpful comment that it took more than a decade in Germany ... Hopefully, energy-market liquidity will trickle across their borders soon and they can break out of the state-dominated inefficiency trap with some spot-priced gas imports to undercut the ubiquitous Gazprom oil-indexed contracts. 

Winged Lion - omnipresent
Ah, but how will they transact in international energy markets if they go tits-up ? Well, for starters the private sector already uses Austrian banks for all significant deals, it’s only a short drive to the nearest Austrian town from wherever you are. Prepayment generally does the trick, however bad for the working capital. And they’ll need to do their business under an external jurisdiction, because you can’t get a Slovenian commercial-court judgement, bent or otherwise, in under three years.  But people will always need electricity ... well, right up until the point where it doesn’t matter anyway.

Anyway – it’s the weekend and just the weather for a bit of sight-seeing. This region was of course Venetian territory in years gone by, and Slovenia avoided the post-Yugoslavian fighting, so there are plenty of unspoiled things to see, overseen by the old winged lion. The country is still fixated by which side your family was on in WW2 – were you red or white ?  So - don’t mention the war ... Good luck to them: white and red, they are a pleasant bunch. 


Saturday 20 April 2013

Energy Policy via Blackmail & Megaphone Diplomacy

So the government doesn't care if the nuclear strike-price negotiations drag on or even fail - and now EDF says it doesn't care much either.  Not quite what either party was saying just a few frantic weeks ago, but there we are.  What a game.

Meanwhile in Germany, a part of the world where energy policy is even more dysfunctional and the lights going out is an imminent prospect, there is desperate scrambling just to keep some existing gas-fired plants open.  A very clear preview of what will shortly be the primary focus of attention in  the UK, I do believe.  And unlike debates about power sources for 2025, this one is for real.


Friday 19 April 2013

AST are pants

Chart forAscent Resources PLC (AST.L)

Ascent Resources, £5k down the swanny for me on yet another AIM share where the directors seem to think that never performing on commercial promises and constant cash calls at ever lower prices is a good idea!


Thursday 18 April 2013

Question Time : Ding Dong edition

David Dimbleby chairs Question Time from Aldershot. Panelists include Michael'Vampire' Howard, Caroline 'Foxy' Flint MP,{foxy as in she should be hunted} Sarah "Sit Down comedienne"Teather MP, Amanda "Anti-Hacked" Platell and Griff Rhys"career change" Jones.

DTP is doing a Man Utd and pulling away at the top of the table.
ND makes a spirited drive to remain in contention.
Botogol ? drifting down the leaderboard.
And Idle-Blue eyes- Taff - Jh and CU are all also in their own version of the The Johnstone's Paint Trophy. The winner of these 5 will also receive full winner's recognition.

This tournament is still sponsored by 
Timbo 614

Week 12

DtP 89

ND 84

 Timbo614 77
BQ(MP) 76
Measured 74
 Hopper 72
 GSD 70

 Botogol 65
Budgie 64
kynon 62
Malcolm Tucker 61

Blue Eyes 54

Idle 40
Taff -33

CU 24

James Higham - 7 
Andrew - 2

Another "Hope" fizzle

- Growth predictions falling
- Unemployment up
- Businesses still closing
- Banks still full of bad loans
- Public sector wages going up at 3% and Prviate Sector at 1%
- Misssing deficit reduction targets
- Commodity prices falling
- Baltic Dry index collpasing again

Every year since 2011 we have now seen the same pattern, people come back to their desks across the world after the New Year and think "this time, its different." Every year we ge to March/April and nothing has changed, the hope dies and the markets go on a big down turn. We all end up depressed again. markets wise the old "Sell in May" meme is going to do well this year again too.

Clearly in the UK spcifically the deleverage of private debts has not happened fast enough to allow any new growth. The control of the public sector debt from completely spiralling out of control, if not actually reducing at all, has meant a lethargic austerity.

We will see this pattern again next year too perhaps - maybe in 2015 things will improve.

It's not very fun though, is it?

Wednesday 17 April 2013

Tesco fall in the Pond

And so another defeat by the yanks. Tesco's venture into US food retailing has come a cropper and cost the company a good few billion. Indeed, just to close the business int he US will cost them £1.2 billion. New CEO Philip Clarke has clearly had enough of the airmiles for this stuff as he has decided to sell underperfoming businesses in Japan and slow the growth in China too.

UK companies never make it in the US, the scale and level of competition is high and understanding such a complex market takes a lot of energy, effort and luck. Tesco had not enough of any of these. Although there is a nice meme here that Tesco tried to sell fresh food to areas of cities that were undeserved and failed, similarly Jamie Oliver (once of Sainsbury's) tried to repeat his school meals schtick in California and got nowhere with it.

Perhaps the people there are not interested in polenta-based food choices?

Not only this but the US is the home of Walmart and it was quite ambitious to think it could be challenged in its home territory. Let's consider the reverse, how has Walmart done in the UK, it bought ASDA, but how much market share has ASDA grabbed since it was bought - not much really, not even as much as Morrisons.

I wonder which will be the next UK company to try and conquer America - maybe it is M&S's turn again...

Tuesday 16 April 2013

Desperation Stakes Are High at EDF

With desperately-orchestrated DTel articles like this and this and this reaching a crescendo, we know the wind is not blowing EDF's way on the 'negotiations' over the strike-price they'd like from us  - and the guarantees, and the caps on clean-up costs, and all the other concessions on their secretive shopping-list. 
In trouble
  • "Britain's energy security will be put at risk and future generations left to suffer with higher bills if ministers fail to agree a deal with EDF Energy"
  • "With the possible exception of the defence of the realm, it is hard to think of an issue more critical to any government than ensuring the future of the nation’s energy supply"
  • "Hitachi is increasingly reluctant to build Britain's next wave of nuclear reactors and may pull out of its deal with the Government unless terms are improved, with devastating effects on UK energy policy"
 Yes, the bright orange turd is in trouble.

We may hope that the FT's Nick Butler has got it right when he says that the government has, at long last, realised there is no hurry whatsoever on our side of this - and not before time.  For those who haven't signed up to FT blogs, here's the salient passage:
"The range of options available means that new nuclear is not essential. It may be desirable as part of a diverse mix but not at any price. If Centrica can walk away so can the UK taxpayer. The important clarity emerging from the last few weeks is that the government has understood that there is no need to rush. New nuclear could not come onstream before 2020 at the earliest and therefore cannot assist with the medium term challenge. The overall approach is to be business like and pragmatic."
Sounds good to me.


update:  even Pesto's on it now 

Monday 15 April 2013

Posy Simmonds Hits The Mark

Yes, still busy, so another quick plate-spinner in our long-running service to C@W readers: you-probably-don't-read-the-Grauniad-so-you-won't-have-seen-this

It's the 'Grantham Fairytale' King Ironsides, a short Posy Simmonds classic that you will be glad you read: a delightful tribute to Mrs T that makes several good points, fairly and kindly, in the way that only Simmonds can.

The enjoyment is tripled by imagining the legions of Guardianistas who like to think that Posy is an identikit thatcher-hating feminist harridan, and will have multiple burst blood-vessels by the time they get to the final sentence.

One has to think the better of the Grauniad for having published it.


Saturday 13 April 2013

Some Weekend Reading

Rather busy at the moment, and for a couple of weeks to come, but I still make time for the Grauniad - to keep up the blood-pressure, and the supply of recreational belly-laughs.

Here are two pieces you might like.  Firstly, a classic Moonbat.  I like George, he's obviously got some defects in his wiring, but he's an honest fellow and genuinely willing to change his views when the inconvenient facts get right under his nose.  And that, friends, is the mark of someone whose right brain has proper control over their doctrinaire left.  Here, he's noticed that Europe's 'green' policies (inter alia) are simply exporting our emissions to China et al on a grand scale.  Well yes of course!- but it's a pleasure to see a greenie-leftie wise-up to this fact. 

Also a lot of fun to read the bonkers comments that follow.  Which brings us onto the second piece: a little essay on the demise of the UK coal industry, and the consequent flurry of staggering CiF ignorance and horrible greenie-leftie agonising on the subject.  Actually, not so many of the greenies in evidence here - they obviously don't feel very welcome on a pro-Scargill thread.  Watch for the good 'Pat Logan' valiantly injecting facts into an otherwise fact-free desert.


Friday 12 April 2013

Am I a nannying lefty after all?

I read today that the OFT is looking into the way in which in-game payments can be made on various game apps.

Now given I have 3 young children who are nearly as obsessed as I am about playing silly games on tablets, this is something I do worry about. Can the kids accidentally run up a bill of a few hundred pounds without us adults noticing?

Normally of course the rule would be Caveat Emptor (albeit the games are almost always offered free now). However, with minors involved it is different, my little boys have only a vague concept of money (learned from their mother, they simply ask for unlimited amounts of money and then spend it as fast as they can...).

So where is the line as minors cannot be treated as a normal case due to their lack of ability to make commercial decisions. So on this one I am going to come down on the side of making strict rules and access to purchases (such as the need for a password every time), mandatory.

So in the end, have I ended up as a hand-wringing socialist? Vote on the left

Thursday 11 April 2013

Question Time: Iron Lady edition

David Dimbleby presents Question Time from Lady Thatcher's former constituency of Finchley.
On the panel are Conservative Cabinet Minister Ken 'Europe' Clarke MP, Labour's former Home Secretary David 'people's republic of South Yorkshire' MP, former leader of the Liberal Democrats Ming 'Sprinter' Campbell MP, Guardian columnist Polly 'Pol Pot' Toynbee and Lady Thatcher's authorised biographer Charles Moore, Speccy and telegraph journo.

I can only guess that Arthur Scargill wsn't available. 

BQ guesses.
Thatcher's funeral costs. What a disgrace!
Thatcher to blame for pretty much everything, but we'll say today's banking crisis.
Phillpott  - Why did Thatcher make him kill his offspring?
Disability living, bedroom tax, and millionaire tax rates came into effect this week- Thatcher strikes again!

That's probably all they will have time for. Probably not even that with all the posturing.Twitter should be interesting. Always a very balanced, thoughtful, polite and restrained place Twitter...

We run until the summer holiday recess.

This tournament is still sponsored by Timbo 614 {although he has been very quiet lately}

Week 11

DtP 86

ND 76
 GSD 70
BQ(MP) 70
Measured 72
Hopper 71
Timbo614 71

 Botogol 65
Budgie 60
kynon 56
Malcolm Tucker 59

Blue Eyes 46

Idle 37

Taff -30
CU 24

James Higham - 7

Wednesday 10 April 2013

Miners and Thatcher

She won't go away.. 
I know we said no more ..but..

Listening to Nicky Campbell this morning an ex-miner was arguing with an old lady from a different mining town. The debate was Baroness Thatcher's funeral and how this is an insult to the nation.

The miner was saying about the devastation in the mining towns of Wales. How nowadays the sons of miners were reduced to driving to work in a factory packing food for airlines.

The poor man didn't seem to realise the irony of it. The airliners replaced ships. The motorcar and trucks replaced the railways. Neither use coal as a fuel. 
Peak coal use in the UK {and steel} was in 1911. The height of the railways, the tail end of the Industrial revolution and the peak of the Royal Navy with its coal powered fleets and steel built warships and merchant fleets. Shipbuilding and mining were supreme. Motorcars in private ownership numbered just 477. 

Coal was the United State's first big industry. 
"By 1909, the United States had already become the world’s largest coal producer. Churning out more than 418 million tons. Their mines were 35% greater in output than Great Britain’s 268 million tons making the formerly number one UK second worldwide. Germany was a distant third at only 217 million tons." 
By 1929 it was 608 million tons in the USA. The crisis in mining and shipbuilding came in 1930 after the Wall Street crash. Coal production in the US was around half of the 1929 levels in 1932.
Docks were deserted. Orders were nil. And unemployment and hunger arrived. The UK, The British Empire, was already dependent on the United States economy for trade. And there was no trade.

The miners were hit by no demand and mechanisation. That's where the wage deflation came from. When miner's talk about pittance wages its because a once thriving industry was on its knees and it was take lower wages or lose jobs. Union membership boomed.
World War one and Two saved coal and steel and shipbuilding, heavy industry, railways in the UK and the USA. But pre and post war, oil was in and coal was out. Its amazing it lasted so long.

The miner who lamented the loss of the pits must surely ask himself if he really believes that without Thatcher his mine would still be open? When an old lady said she was glad her son worked in the factory. "Safe..clean..fixed hours..meal times..no health risks..no turmoil..no danger..I'm so glad he never went down into the dark and the danger..so glad.."

"True...But he's on a quarter of the wages!"

And there is the problem. Coal mining paid well, because it was dangerous but also because it was essential.  Once it was no longer essential, or at least available cheaper from other sources , and mechanised, those high wages could never stay. I'm always amazed that people seem to think the mines would still be open today without Thatcher. Surely, if they were economical and the whole miner's strike was an ideological event only, then the 13 years of Labour rule would have seen them all reopened.
The hard left union mine worker's say they weren't because the labour party wasn't a labour party.
But even a moment's consideration shows that glib assertion can't be substantiated by facts.
The unions bankrolled the party. 
The party , if it could, would have helped the unions. It did for other unions. It was happy to allow the creation of today's super unions from the merging of smaller ones. 

And Harold Wilson closed the mines anyway. 93 mines in the 1960s.
Margaret thatcher closed 22.  Few blame Wilson for manufacturing decline.
The last pit, the last shipbuilder, the last steel works in the north east all closed under the Blair government. The first Japanese car plants arrived under the Tories.

Not being a miner I will never understand this work/life bond to place and job.
This blaming someone for an end of an era.

My very first job was a telex operator. I worked in Carnaby street, in London's West End, for an American firm and was paid very well. I started at 10am. The overnight workload took until about midday to process. Then it was a two hour lunch until the New York office opened at 2.00pm and sent a load more stuff over.
I was 17. Allowed to wear my own lunatic 1980's fashion clothes at a time when suits and ties were mandatory in almost every job. I had an easy, undemanding, well paid job, in a fashionable area of the capitol city.
Then one day, the evil, youth hating, Thatcher deregulated the telecoms industry and someone invented the fax machine and suddenly I was out of a job.

I suppose if I had worked in a telex machine operating community, where my father and grandfather had been telex machine operators and had fought for the rights of telex operators to a living wage, I might have been even more upset. But I doubt it.

But at no time did I expect, then or since, that the work I did should always be available to me because I wanted to do it, at wages and terms that I wanted to work for, for as long as I wanted to do it and if it wasn't then the government should subsidise it so that it was.

Xcite Energy - progress at long last

It is a while since I posted on any of my share portfolio. Eagle-eyed readers without ad blocks will note that our one time site sponsorship with spreadbetmagazine (still a fab blog for trading insights) is at an end and during that time I posted about trading more over there.

So now there maybe a slight renaissance on this site from time to time.

Most of my trading has long since slowed down since I ended up in events based shares where there has been a lack of events. This tends to mean a diminution of value over time and so it has proved. However, having the courage of my convictions I have remained on board with most of them - of the for highs of trading the big dipper and upper of 2008/9/10. That as both fun and very profitable.

However, this week, perennial no-news or bad-news only, has pulled a stormer. Being a small north sea explorer who at one time had found only 22 million barrels of confirmed reserves was a real trial, seeing it high share price drop by over 75%. Now though, after all, the speculation turns out to be true and they have confirmed 250 million barrels of oil. Even in the North Sea this is a big find for a company that owns 100% of the field.

Now since the highs of 2010 there has been significant dilution, which perhaps means the days of £4+ are distant. But even so, current deals in the north sea see reserves changing hands for about $6 a barrel - Xcite is currently priced at $2. So even a quick raid by a predator would result in an upside of say 200%-300%. This is more like it.

However, Xcite's board voted in a poison pill to stop bids sometime ago and it does not expire for another year. So instead the Board are looking for a field partner to develop what will be a very expensive field  - BP are already involved a little and companies like Premier and Cairn Energy have not had much luck drilling recently overall and maybe tempted to acquire reserves. This is before far eastern companies take a look.

This will take a few months yet and given that Xcite has a history of under-performing on financial needs, it is not surprising the share price has not budged much even as reserves double. Given it is an AIM share there will be wobbles along the way and maybe even opportunities to buy at nearer a pound; but long-term the assets are worth treble this so I am happy to hold for another year or so as the story unfolds.

Tuesday 9 April 2013

Thatcher 2.0

Of all the nice and nasty things said about Margaret Thatcher since the sad news of her death yesterday, we that she was a driven woman who knew her own mind and had a desire to get things done. Right or Left she was a woman of action.

Equally unanimous is the derision for the current leaders of Cameron, Clegg and Milliband for their uniformly weaselly approach to politics which allows strong positions only to be taken on minor or non-issues like gay marriage or support for foreign aid (this is a bit disingenuous to Cameron re Education and Welfare, but its not like these are his ideas, is it?).

So if the Iron Lady was in her pomp now, what would the UK be doing about its problems? I posit it would be something like the following:

1. Europe - Nothing different I feel, Thatcher saw the post-war need for a more united Europe although her fear of a united Germany has come to pass in a way which she would not have expected with its use of the Euro as a tool for domination.

2. Economy - Taxes would have been cut and the deficit would have grown, now we would be worrying if the rise in revenues was going to make up for extra debt pile. Thatcher would have trod carefully on the Welfare budget as she always did.

3. Immigration - A staunch nationalist, Thatcher would have worked hard to stop unlimited immigration, she understood families and resisted big cultural changes - this is the issue she would be targeting the EU on re allowing too much transfer of people.

4. Unemployment - With visions of the damage of high inflation I doubt the policy of QE and the ultra-low rates that have created zombie banks and companies would have been passed. Unemployment would thus be higher with more companies going to the wall, but perhaps more like the USA our recovery would be quicker as new firms rose from the ashes.

So what would a strong leader do now, there are always constraints and you can't wave a wand - what would we want a new Thatcher to do to turn our Country around from the financial crisis?

Monday 8 April 2013

Margaret Thatcher: 1925-2013

Lady T. has died, age 87.
 A  genuine change politician. A conviction politician. A politician who utterly dominated politics and in some eyes still does.
Someone who left the nation vastly different from when she found it.
Divisive, to be sure. But, as Andrew Marr said in his History of Modern Britain,

Politically, Thatcher has made us all her children. Of the prime ministers since the war, she was the one who changed the political weather.

Reader's thoughts on the Thatcher era? 

On Marginal Tax Rates

Apologies for a very pedantic piece on a Monday morning, but someone has to raise it. Today is the first day of the next tax year and so there is some play in the media about the various tax effects of the budget and previous budget as to what all of those who may be due pay some tax may experience in their wage packets.

Much of the discussion, as one would expect, is around who wins and who loses and indeed who got the worst deal and who the best.

(Incidentally, I watched a very dispiriting programme at 10am on the BBC yesterday in which an entire army of lefties insisted we should simply redistribute all wealth communist style as all 'earned' wealth had been stolen - the couple of game sane people in the room Nicki Campbell allowed to be shouted down at all times. Owne Jones is getting far too much airtime for his raving communist schtick).

Anyhow, apart from my whimsy, I am puzzled by the way in which certain tax cuts and such are discussed. For example, the lowering of the 40p tax band is rigthly described as a rise, whilst the increase in the tax free allowance is a cut. This much I can follow.

But Grant Thornton have been peddling some PR line about the terrible effects of marginal rates on tax on the poor. It describes that due to reductions in tax credits and other beenfits, people will suffers 73% rates of tax on their earnings.

My point is that this just is not the case. In the example of people earning say £42,000, they now have to pay more tax over to the taxman. For someone earning £15,000, they don't pay anymore more tax. What happens to them is that their welfare gift from the State is reduced as they earn more. They don't pay more over, they just receive less unearned income from taxpayers. I agree that the net effect feels the same and will be disincentive to work harder for limited rewards - but it is not a marginal tax rate. A tax rate implies that earning more will cost you more in tax. This is not the case with low earners. They don't pay more tax as a result of the reforms, indeed low earners are the recipients under this Government of a hug tax break as the personal limit has been upped considerably in 3 years. What they are feeling now is the attempt to reduce susbisdy for their wages as they earn more.

This grates becuase it misses a fundamental point over who is really paying tax and who is not. In this sense it is directly related to the ridiculous concept of a bedroom tax, which is another conflation led by the left of a welfare reduction being described as a tax when it is no such thing.

The points may seem pedantic etimology; yet their effect is high, they lead people to think the Government is raising taxes on them when it is doing no such thing. If all cuts to any welfare budgets or spending get described in future as tax rises then we have truly entered a parallel, and confused, world.

Sunday 7 April 2013

Am I Allowed To Say This?

The Thought Police have been out in force this week, reading the Riot Act to those with the temerity to make connections between the callous and sometimes lethal actions of ne'er-do-wells, and their unearned sources of income.  One understands that the days of freedom of blog-speech may be numbered, but I'm chancing my arm anyway.

Since, as people of good will, we are all presumably moved to lament extreme outcomes such as tragic, if unintended waste of life all the way to actual loss of life; and even to deplore the often squalid lifestyles observed among those who do not work, it is surely legitimate to consider what might be the contributary factors, perhaps to see if something intelligent can be done by outside agency to minimise the problem.  

Some of these may be factors such as innate personal flaws - some would say evil, or original sin - of the individuals concerned, though this is hardly a fashionable line of enquiry.  If we aren't content to stop there (not least because there isn't much we can do about that), it is at least reasonable to consider economic and social factors and the part they may have had to play.  At this point we are drawn to ask: if a person is in circumstances where they are being funded in a life of idleness, may this not drain away the resources of judgement and personal responsibility they would have needed to exercise routinely had they been purposefully engaged in a day-to-day working environment - instead of festering on their sofas at home ?  And might a regular need to exercise these desirable faculties not have prevented them from behaving in the reckless and callous ways that have tragically resulted even in loss of life, albeit unintended, of their nearest and dearest ?

I refer, of course, to the squalid case of Hans Rausing, whom few would doubt was morally undermined by his unearned income and consequent corrosive idleness.  May we say this lead to the death of his wife ?  Yes, I think we may and, if moved to deplore such outcomes, we should.

So I do.  Innate wickedness may exist, but it has less purchase on purposefully busy lives in constructive social contexts.  We should do what we can to foster such conditions, and certainly not undermine them with our actions, political or otherwise.  That's what I think.


Friday 5 April 2013

Parliamentary Standards Commission into the BOE/Treasury?

The HBOS leadership team is roundly and rightly condemned for the horrendous mess they made of HBOS. Under their watch a stable, non-investment bank was turned into a leverage monster which has blown up to a cost of something like £25 billion to UK taxpayers and now helps play a key role in crippling Lloyds and holding back our economic growth.

As I have said many times before, what has been done should be a crime and these men should be facing a long stretch in chokey - luckily for them the inept system that we have for tracking white collar crime means they are free instead to spend their ill-gotten gains and live the life of riley.

However, these constant reports into RBS, HBOS and such like play so nicely into the zeitgeist of banker bashing. But we all know that the decisions these men took must be put into context. Alan Greenspan had pumped up a huge bubble of leverage in America and the Bank of England had willingly followed his lead.

Moreover, the UK Government was blinded by its tax receipts and was inclined to watch on, glad of the money coming in which it could use to bribe voters with unrealistic promises of public services.

So where is the report into the Bank of England and the Government ministers of the time? I hope they are just waiting for St Mervyn to retire before taking him to the Tower, but somehow I doubt it.

Thursday 4 April 2013

Ban the bomb -

 CND - Cameron's nuclear deterrent

The UK would be "foolish" to abandon Trident in the face of the potential threat of nuclear attack from North Korea and Iran, David Cameron has said.

 The Lib Dems want the UK to explore a cheaper alternative to the Tories' £20bn plan to replace Trident..

 Shadow defence minister Kevan Jones said it was "absolutely right and necessary" for the UK to retain an independent nuclear deterrent..

 North Korea, one of the axis of evil, is a nutter country. A personality cult, divine leader, communist propagandist full blown looney tunes nation. They need a really big deterrent to keep them in check. 
China which props the basket case up.

Or we can tell ourselves a nuclear deterrent is what stops North Korea invading Seoul in a bid to finally end the tie-breaker that began in 1950.
Ok, but that doesn't mean we need to have our own UK nuclear weapons. The North Koreans fear South Korea and Japan and the USA. Possibly Russia. Possibly China. I doubt we figure very much int their calculations.
For our defence we are protected by Nato. An attack on one member is an attack on all.  We are also in the EU. We could expect some assistance from the rest of Europe. Amongst the other European nations only France has Nuclear weapons.  Like us, Its a way of keeping the big seat on the security council of the UN. 

But Germany doesn't have a seat or Nuclear deterrents and it gets along just fine. Germans aren't worried about a sudden attack and not being able to respond because 

A} The US and Nato membership IS the deterrent

B} Not having nukes doesn't make a nation more likely to attack. 

C} Non rational nations and leaders are just that. Irrational. 
1940s Imperial Japan, a nation of 33 million , about the same size as the United Kingdom, declared war on or caused war with China, Dutch Empire, The British Empire, The British Commonwealth including some heavyweights such as Canada, Australia, New Zealand, New Guinea, The Philippines, Free France and the United States of America. The prospects for victory for the army of Nippon was 1 in a 1000. Didn't stop them.

Non Nuclear missile Argentina wasn't worried about Armageddon retaliation from Nuclear armed Britain when it invaded British territory in 1982. The UK was never going to use them. What situation would we use them?

Cameron sounds very Jim Hackerish in his claims that we need the bomb.
We don't. We just need allies who do. The current policy of cutting ground troops, helicopters and equipment to keep a fleet of Thermonuclear Trident submarines that we will never use seems a bit ..inefficient?

Wednesday 3 April 2013

My MEP Working Hard For Me

This chappie is Charles Tannock, one of my MEPs.  I've met him several times, he's a cheerful enough cove, quite good company over drink. 

And now he would like me and my fellow electors to know what he's up to: he's sent us all a glossy brochure entitled 'Working For You Since 1999'.  The thing is, working for me obviously doesn't represent a full time job for Charles, and he has a lot of spare time.  But fortunately he's found no end of opportunities for outdoor relief: this is what he's been doing (I quote verbatim):
"I have echoed the Cypriot government's demands for an end to the Turkish occupation of the north of the island ...
"I have been especially vociferous in support of Serbia and Macedonia

"I have forged close links with the Latin American diaspora ... I have been a firm friend of Columbia (and) was decorated with the Order of San Carlos

"I work to promote a just and peaceful resolution of the Nagorno-Karabakh frozen conflict ... (and) am a proud recipient of the Medal of Mkhitar Gosh from the President of Armenia ...
"I welcome the peaceful transformation of [Taiwanese] relations with mainland China ...

"I support London's vibrant Somalilander community ..."
The Order of San Carlos !  (is that perhaps a joke ?)  What a man - he must surely be a shoo-in for re-election next year.  One thing, though: do we really need to pay him when he's clearly enjoying himself so much ?


Come to think of it, the Medal of Mkhitar Gosh is probably a joke, too.  I don't think he realises they are taking the piss ...  

Tuesday 2 April 2013

What happened to the COE and are they right?

Once up on a time, the Church of England was considered the Tory Party at prayer. No longer, now instead we have a whole Easter weekend given over to hand-wringing by the COE about potential welfare cuts and harming the poorest in society.

The leftie take-over of the church is complete, even if it is run by an Etonian.

I don't know how this came to pass, less do I care how it has happened,  except to note that the Catholic leader was more concerned with the meaning of Easter and the Jewish and Islamic leaders have chosen not to get engaged in this level of political involvement. It makes me remember a very good old story and TV series. The Church of England's investment portfolio is £8 billion and this is before donations are taken in any current year.

Having said the above though, the rise of technology is indeed imposing a great burden on society and it increases its capital demands. Fewer people can do more work than ever before and lever the benefits - however, for the whole population this leaves a lack of work above the manual level and a sharp digression in the spread of wealth. Those who do good jobs have to work hard and are well rewarded, those who do not struggle on and are recipients of welfare.

In an odd way, the leisure time that was supposed to be the gift of technology to humanity, has gone to the welfare recipients not the workers. The workers though have the higher standard of living but are required to subsidise those who cannot/do not work. It's a tough position and with an ageing population and over-promised pension commitments, something the State is not going to cope with very well.

At the ballot box too the situation will become strained, with more votes in wanting higher welfare than votes in wanting to reduce taxes on jobs and work and parties may well split even more along socio-economic lines. In this world, a first past the post system may well prove a poor system of Government.

So we will need to have extensive welfare as the price of capital intensive and successful businesses, it is the modern price we will pay to keep stability. however, the current welfare reforms seek to reduce the dependency which is the crucial aspect - more people can work than do and with more entrepreneurial spirit there is potential for more jobs and job creation that we have - but the limit is finite and certainly likely to be well short of full employment.

Monday 1 April 2013

Breaking News - Banking Levy

Its shocking news! This reprinted below.

In every country in Europe levies on bank deposits were enacted last night. A 9.9% tax for all bank accounts exceeding 100,000 euros and 6.7% on anything below that.
Every business bank account, investment account, savings and ordinary account was included.

Herman Van Rompuy, leader of the European council,made a brief statement to journalists.

"The Euro crisis is over! The debt is gone. The banks are solvent and Europe is saved!"

He said there will be a full ECB statement later today.
He refused to take any questions but did confirm to journalists that all banks in Europe would remain closed until Wednesday and when asked if exchange controls were being introduced replied, 
"there is some possibility, yes."

The United Kingdom, though not a member of the Euro currency, also decided to adopt the levy. Chancellor George Osborne explained his decision in an interview to air on ITV's Daybreak tomorrow.

"If we did not take this tough and painful decision whilst the rest of Europe did, then we would instantly become the most indebted nation in Europe, if not the entire world. We would be finished. And savings rates have been so poor its better for investors to now have a small percentage of their cash in bank shares, that someday will make a decent profit, rather than keep on whining about low interest rates."

When asked if this confiscation would have a disastrous effect on the economy he replied,

"No, I don't think so. Having done it once, people can reasonably expect we will do it again if certain conditions arise and they would therefore be better off spending any money they have on big tellies or smart phones or even a new fleece? The economy is about to receive a big consumer spending boost."

Asked whether his coalition allies and the opposition would agree to this extreme measure Mr Osborne said,

"Well they should. It was their idea.  The mansion tax would have been an overnight grab of already taxed, built up wealth. A taking by levy. And the polls showed nearly everyone was in favour of it. The problem with that was it wouldn't actually raise much money and was merely a political gesture. 
But, to take wealth from everyone, well that raises a lot of money. And as its a percentage of accumulated wealth the rich will pay much, much more than the poor. We are all in it together."

European Central Bank President Mario Draghi is expected to make a full statement later today. He indicated the move secures Europe and has now made banking union possible through wise government intervention.

In Germany Angela Merkel told supporters that

 " Spaniards and Greeks will do anything, and I mean anything to stay in the Euro.  Any level of austerity.  Any level of unemployment.  Any negative measure of growth.  Any instability.  Ireland would rather accept 10 years of decline rather than try to live outside of the Euro. And Cyprus? Cypriot citizens did nothing when we took their money away. If people will stand for that, they will stand for anything. Everyone recognises that the Euro is essential for Europe. And everyone wants to be part of it. Whatever the price."

Nigel Farage of the eurosceptic UKIP party has tweeted 'OMG!FMBA!'