Thursday 31 October 2013

Question Time: Politicians Dread Judge's "I am the Law" comments. - 2013 AD edition

 David Dimbleby chairs the topical debate from St Austell, Cornwall. On the panel, business minister Matthew Hancock MP, shadow work and pensions minister Chris Bryant MP, Liberal Democrat Jeremy Browne MP, author and journalist Harriet Sergeant and the Gay Times columnist and campaigner for transgender rights Paris Lees

Its that busy season for me - Halloween into Xmas. So ..sorry for the laboured title.
Bonus point for whoever can do it better.

 This week's early bird is Mark Wadsworth.
But he cannot claim first place this week. That goes to whoever posts next.

1. Hacking trial - press regulation - free speech - surveillance state etc.

2. Energy company rip off, why does faster switching make it better? You just get ripped off faster! Green taxes.

3. Those bloody Yanks, you just can't trust them, eh? Did they all used to work for News Of The World or something? Who says they didn't hack Cameron's phone - or is he simply too unimportant to bother with? And why are they going to deport that hacker chappy, what he did was no worse than the Yanks.

4. What are people on the panel doing to support Children In Need?

5. Hospital closures, savage Tory cuts. No QT submission is complete without some "savage Tory cuts".

Who is more evil - USA or Germany?

A nice little interlude today with he USA saying that Germany's drive to exports and to keep home consumption low is hurting the eurozone and is a terrible economic model. Much better to be like the USA and splurge your way to victory by printing limitless amounts of the world's reserve currency so pushing up inflation for everyone else across the globe. Hmmm...this is a hard one:

Source of Global financial crisis
Source of rapacious investment banks, namely the vampire squid of Goldman Sachs
Home of money-printing
Not averse to using its military to achieving economic ends
Huge long term debt crisis
Divided Government regularly frightens world markets
Did handily step in to lend $3 trillion to stop the world ending in 2008

Land of Tight money and the bundesbank
Happy to allow a weak euro to subsidise its exports at the expense of other countries import costs
No longer prone to using its military to achieve economic ends
Preaches consumption restraint and practises it too
Prone to lecturing other on their failings
Lacks empathy to support Countries in Eurozone affected by its policies

It's a close call to decide who is worst, both Countries are very keen on mercantilist policies and self-interest. The comments below will decide it....

Wednesday 30 October 2013

UK Sharia Bonds - What's That All About?

As part of the government's blitz of 'look what we're doing' announcements, we now have "Britain to become first non-Muslim country to launch sharia bond: David Cameron to unveil £200m Sukuk".  So what's going on here ?

a.  Political Significance

A couple of weeks ago I posted about how the UK is kow-towing to the Chinese as part of our economic escape plan.
This is a particularly acute risk for the UK ... In our semi-detatched euro-positioning, our vulnerability to having the City isolated by jealous continental and American financial authorities, and our commendable centuries-old willingness to roam the high seas, we will always be inclined to 'trade our way out of trouble'. Now true commercial trade is a great thing and would indeed be the ideal way forward. But increasingly what we see is a baser trade: the prostituting of our institutions to the whim of Russian and Chinese wealth. If they want to lavish their money on our libel courts or Mayfair shops, that's one thing. But it won't be ending there. Today we see the first of the mega-bargains our desperate UK politicians will enter in order to engineer short- and medium-term relief from our woes. Faustian is just one way to describe it.
There, I was writing about the nuclear deal, but of course that was part of Osborne's Sino-package that included a putatively huge and strategic banking 'n' finance deal.  These are the kind of moves that can leave green-eyed Frankfurt and New York grasping vainly at thin air, reinforcing London as "the undisputed capital of the world".  At least, that's how the dream story-line runs.  Brown hoped to do the same, but Osborne is acting more decisively.

The sharia leg of this burgeoning development causes nervous murmurs on the home political front - see this piece at ConHome.  Should it ?  Given that in technical terms the distinguishing  features of sharia finance are, to the unbeliever, quirky to the point of quaint (see below), objectively the whole thing is a bit like the 'ethical investment' industry: why not let anyone who wishes to cut themselves off from the full range products, do so if they choose?

But obviously there is a heavyweight cultural overlay to this, and maybe objectively speaking is not enough.  C@W readers know that I am 'relaxed' about all sorts of 'alien' business influences and ownerships in the UK.  To me it is part and parcel of what I take to be a very traditional British openness to trade and cultural curiosity (which, by the way, is only one strand of British tradition as I know full well).

But I am not remotely relaxed about the rule of UK law and for me there is a simple bottom line.  Provided all this UK sharia stuff is subject to the same banking regs as everything else (and these are enforced with the full force of law, see C@W passim), let's go for the money and leave Frankfurt and New York fuming.  This proviso is not trivial, and not just because enforcement of banking regs had become a sick joke.  It must surely be the case that hawala transfers are routinely used to dodge western banking regulations (not to mention money laundering); and bringing any such system into mainstream scrutiny must be a highly desirable goal of policy - nay, even an imperialistic power-grab!

I am guessing C@W readers will have the usual interesting range of views - so have at it in the comments! 

b.  Financial Aspects

Sharia finance properly analysed is a subset of general Finance-with-a-capital-f, delineated by some strict rules around interest-payments which must not feature in the story of what A pays to B.  Recalling the informal definition of a Swap - the exchange of cash flows between consenting adults - most sharia-compliant deals are what are known in the real world as total return swaps (TRS), and there is nothing scary or alien about them per se. Of course, they are a bit more complicated than plain vanilla loans etc - but so what?  Lots of financial instruments are.

Far from scary, putting aside the political stuff I'd say the whole thing is pretty amusing.  The restrictions that make these deals sharia-compliant remind one of nothing so much as the crazy, tortuous tax regulations which make certain kinds of (e.g.) UK film investments qualify for attractive tax breaks.  In other words, they are an adventure-playground for shyster tax-lawyers, and sharia will be just the same**.  The arguments over what counts as what; the twisted convolutions required to label interest payments as anything but interest, are hair-splitting sophistry - literally theological.  There already is a service industry around this, with "Islamic scholars" getting good money for certifying individual deals.  The People of the Book know all about this stuff, too, and what a gravy-train for the City it promises to be !

** Just as with 'ethical investments', one imagines there are disappointments ahead for those who place great store by what they are being sold truly complying with the advertised principles.  I suppose that in some countries, anyone caught playing fast and loose with the sharia interest rules might have their parts cut off  ... a risk that the City boys will need to factor in for themselves, eh? 

Tuesday 29 October 2013

Will they, won't they split RBS?

Politics and Banking have has an interesting relationship this past 5 years or so. What with the small matter of the Financial Crisis and part-nationalisation of major banks and full nationalisation of some smaller ones. The Poltiicians have been firmly in control, of what they know not.

The latest project to come up is what to do with RBS. Lloyds has been set forth on the road to full privitisation with a sucessful sale of shares the other month. Next year will see the Government holding whittled down to next to nothing, in plenty of time for the election, natch.

RBS presents a more worrisome challenge. The banks historic incompetencie's are vast, with a huge array of mis-selling, rigging and general lending splurge having laid waste to both its management and balance sheet. Stephen Hester did a good job of steering the bank away from the brink and now new management has the job of building for the future. The bank though is still brought low by its bad debts - a sterling job has been done to sell its non-core assets down from £350 million to more like £80 million, but the buffer that was trading profit that allowed it to balance profits and losses (well, sort of, RBS has been the least profitable of the big banks by far since 2008) has been closed down. This leaves a steadier income stream from corporate and SME banking, but a less profitable future.

So clever Mergers and Acquisitions advisors at Blackrock have been telling the Government to split the bank to make the good part easier to put back into the private sector. meanwhile the bad part can sit on government books just like Northern Wreck and slowly lose taxpayers money into the distant future. The split and sale has a positive outcome for those wishing to see deal activity and also for a stock market which likes nice easy bets, like the Royal Mail.

Also a thorny issue for the Government though is that the most under-performing part of RBS is its Ulster Bank - a part of the UK which needs help and does not need a banking crisis of sudden call in of credit lines. This issue is the main one which has driven the Government side of the need to split the bank.

From the bank side a split would be disastrous, the need to split out employees, systems and balance sheet is a hard job. So hard that Santander got bored of waiting to acquire a mere 5% of the bank and walked away from its deal to buy Williams and Glynn after 18 months. To inflict another large change on the bank would surely cripple its market focus and suck in all resources for another 2 years.

So a lot depends on the results on Friday, which should be announced with the decision about whether to make a split into a bad bank. If things have continued to turn around, perhaps the Government will leave it be, with a fig leaf of a faster closure of the investment bank or an 'internal' split of the bank, pushing its restructuring and Non Core units together. if things have nor progressed, then the dealmakers will have their day and RBS will be consigned to the same bin as Northern Rock, having turned our only to have managed to have its suspended for 5 years and then imposed after all.

Monday 28 October 2013

October 1987 / October 2013

 A thought crossing my mind today was to think back to the last time a huge storm hit Southern England. Once that had far more impact than today. That storm was in 1987. Also that month as well as the horrific weather we saw the Great Crash of Black Monday, which as a week before the storm. Although the great crash was a huge event, it did not spark off a huge recession in the way that the financial crash of 2008 did.

 The markets were toppy at the time after years of unfettered growth from the mid-eighties and the prevalence of a new product called mortgage backed securities that had accessed new cash flows for investors. Still, by numbers it was a huge fall, as October crashes often are. Also it was out of the blue, which is what makes it stick in so many peoples memories.

Even if we had a big run on the FTSE now, there would be a more resigned air to it by market participants - there are just too many known dangers for people to be worried about right now. Still, only a couple of days left in October and then we can head into the annual run up to Christmas which should see market drift up towards year highs from where we are placed.

Sunday 27 October 2013

Secret History: Invasion - Grenada 1983

History Corner British Island Outposts (3)   As signalled in posts from earlier in the year featuring Cyprus and The Falklands, there is a significant island anniversary this year.  It is exactly 30 years since the USA invaded Grenada, and I have been watching out for revelations under the 30-year rule.  But the disclosures have not added much to the sum total of human knowledge, so I'm going to tell you the tale.

Grenada, a Caribbean island, is (and was) an independent Commonwealth country whose head of state is the Queen, so the British link remains strong.  It had been a hot-bed of leftist activity for several years and in '83 the prime minister Maurice Bishop, himself the beneficiary of a coup in '79, was toppled by the deputy PM and topped shortly after.  America saw the hands of Cuba and N.Korea at work, and on 25th October invaded with overwhelming force.  The Governor-General assumed power and things more-or-less settled down thereafter - see Wiki for more detail (Clint Eastwood's Heartbreak Ridge is not what might be called a source of factual information).

The aspect most people hereabouts know is that Ronald Reagan's temerity in invading a Commonwealth country sent Margaret Thatcher into a fearful bate.  On Monday 24th, the day before the invasion, Parliament had been told by Foreign Secretary Geoffrey Howe that stories of an imminent US incursion were not correct.  The documents tell of her considerable displeasure, and Reagan's 'embarrassment'.  But that's about as far as it goes.

There's more to know.  The outstanding British Falklands operation of 1982 (with the rather attractive political dividend we've discussed before) had been carefully noted by Reagan and his people.  The USA had been slowly recovering from the Vietnam debacle, building up volunteer armed forces and generally trying to rehabilitate its wounded military pride.  There had been no significant operations since 'Nam; and an opportunity to have a crack at some plausible bad guys was too good to pass up.  So they didn't.

By the same bellicose logic, however, Thatcher herself was quite taken by the Falklands experience (as was the whole of British politics - how could they not be - most famously including one ACL Blair) and had every intention of replicating it.  Bishop was topped on 19th Oct, and Britain was not terribly well placed to mount Caribbean operations on the necessary scale within the week.  But of the course the USA was.

Urgent British planning had commenced at the weekend (22nd/23rd) but of course nothing was remotely ready by the Monday when the statement in Parliament was made.  The USA, in it's back yard, was always going to beat the UK to the punch, whatever the niceties of the Commonwealth connection.

So Thatcher was left a spectator, and great was her fury.  But it was not simply because of failure on the part of Reagan to observe some kind of protocol vis-à-vis the Commonwealth; it was because she was denied her Falklands II.

The government, of course, doesn't publish the documents it ought to by law.  It never has - see this recent Grauniad article.  There is just the merest hint of the real Grenada story in the public domain.  When after the invasion Howe addressed the Commons again, he stated: "We were given no indication that [the USA] favoured encouraging or joining in any military intervention"  (my emphasis).  But that's about as far as it goes.

So now you know.


Friday 25 October 2013

Friday fun - Boardroom beats.

A bit of Friday fun.
Comments using musical lines have been creeping into the workplace.
{Have they? No idea - but I saw these and would have given them a smiley thumbs up if I knew how.}

"Don't ask him. He can't even remember if the Buffalo Girls go round the outside or the inside."
"And last item on the agenda today.. did we ever actually get to the bottom of who let the dogs out?"
"we will still need you and we will still feed you, when you're sixty-four...  But at sixty-five you're redundant."
"we missed the last quarter..So now we know what it feels like when doves cry.."
"Whine on you lazy diamond."

And a favourite that happened in a dull meeting some years back. When the 
'Are there any questions ?' was asked, someone replied..
 " Er..yes ..What is luh uhh uhh uhh uhhve anyway?  Does anybody, love anybody, anyway?"

And a film one from 'As Good As It Gets' that I liked. Some reps were trying to sell us a product, something like the amstrad emailer,  that they couldn't really explain why we would need it. 

"Go sell hazy someplace else. We're all stocked up here."

Any more workplace lyrics, quotes or quips into the comments.

Thursday 24 October 2013

BBC Question Time Competition - Call my bluff edition

David Dimbleby chairs the topical debate from Liverpool, with Conservative education minister 
Liz trust fund Truss.
Labour's shadow energy secretary Caroline 'not good enough for window dressing' Flint,{I bet Miliband regrets giving this suddenly media spotlight post to a proven incompetent. Cameron certainly must regret letting the Limps have command of this key battleground issue.}
  President of the Liberal Democrats Tim 'I want to be leader..I want to be leader' Farron,
 Author of the book 'The diary of Owen Jones, aged 13¾' - Owen Jones

Mail on Sunday columnist Peter 'Pippa's favourite' Hitchens.

2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter @BillQuango 

Number of wins 

Nick Drew -2

Mark Wadsworth - 1

 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 

Kilgore Trout - 1
 Measured - 1
DJK - 1
CityUnslicker -1
This week's question time predictions are from MARK WADSWORTH
 Dimbletie - Green and yellow stripes.

1. Grangemouth refinery to close - is Cameron continuing Thatcher's war on the industrial North?

2. Getting rid of green taxes, freezing petrol duty to encourage more cars onto the road, nuclear subsidies, didn't Cameron say that this was going to be the "greenest government ever'?

3. That royal christening thing - was it kept deliberately low key for fear of triggering riots again like after major in your face royal displays of unearned wealth and power?

4. Jimmy Savile and compensation culture - is the rest of the UK finally catching up with Liverpool?

5. False widow spider - is this scare story to compensate us for that we didn't have any "super bug" scare stories over the summer? Is the NHS equipped to deal with the massive influx of bite vicitms? Apparently, its bite gives you headaches and nausea but is usually not fatal. So no more harmful than drinking booze, really.

"Roll Back Green Taxes" - Two Powerful Principles

OK, so we all know the right answer is to repeal the 2008 Climate Change Act and/or remember that the soi-disant 'legally binding target" for CO2 emissions is not what the greenies would have us believe.

BUT this is a post for the real world, in which the LibDems have a veto on anything so radical.  Nevertheless, there are still useful things to be done that:  can be promoted with compelling logic; do not prejudice taking a more radical approach in the event the Tories one day have a free hand (no laughing at the back); and will in some measure actually have the desired effect

As he comes to review the panoply of green imposts, Cameron should employ these two practical and powerful principles:

  • no UK emissions target ahead of actual back-of-the-pack EU achievement 
  • only intervene strictly according to merit-ranking on the MACC

The first is self-explanatory, and Osborne's recent rhetoric (OK, recent drivelling) has been feeling towards this really obvious approach.  It really shouldn't be impossible to sell this politically; we could all come up with appropriate slogans.

MACC may need more explanation.  The Marginal Abatement Cost Curve is a very simple concept.  Rank CO2 abatement measures according to how much the cost per unit abated by that method, from least to most expensive.  The cheapest actually don't cost anything, of course, they are profitable to carry out - without subsidy - and hence "self-financing" (the bars below the X-axis on the left hand end, mostly efficiency measures).  So an MAC curve looks like this.

Each bar represents a different abatement method.  The width of each bar shows the quantity of abatement that each method could yield.  An MACC will apply to a given country or sector, because each one will differ in the details of its energy-economy, and of the abatement-potential of the various measures.  (If, for example, in a particular country all light bulbs have already been switched to energy-saving, that abatement technique no longer has any potential there).

The basic use for the MACC is to read off what should be the cost of achieving a particular level of abatement: if we want X million tonnes, we read across from left to right until the cumulative widths of the bars hits X: then we read up the Y-axis to find out (a) the marginal abatement cost - i.e. the most we need to pay per unit to achieve our target, and (b), integrating under the curve to that point, the total cost involved.

There is a truly obvious assumption being made here: you always do the cheapest things first.  Right ?  I mean, if there are lots of self-financing measures available, maybe overall we could meet a target and actually make money !

Wrong.  The idiots at the helm throw money at measures that are way up the right-hand end of the curve, e.g. solar power in NW Europe.   It's genuinely outrageous.  Why they do this is an interesting topic in itself: but enough said for now.  The point is, there is real scope for cutting out this nonsense, and what could be more easily defended than sticking to the left-hand end of the curve ?

[One last comment: some of the "self-financing" items never get financed because the relevant parties don't have the capital (insulation for cash-strapped tenants being the classic example).  This may fairly be described as a technical market failure, but we understand it well enough and there is an excellent case for government stepping in to intermediate.  They mandate a bit of this via the energy companies, but the schemes have been maladroit and they should do better.]

So - there you go, Dave: C@W points the way.  Get cracking & do something useful.


Wednesday 23 October 2013

Grangemouth Petrochemicals to close

Well, that went well for McCluskey and his loony Unite friends at Grangemouth. The company, Ineos, losing £10 million a month, has decided to close the petrochemical part of the site as it can't make any profits on the products without changes to the organisation of the company. So that's 880 jobs then. In addition, it is hard to see the refniery staying open too much longer when the high-value added piece of hte jigsaw is next door and has closed down.

As noted in the comments to the previous post, Unite told their memebers and the world that their members would be better off on the dole than working. Funny that, the average salary in Grangemouth according to Adzuna is £35,000 a year, 12% above average - I wonder if all those well paid oil and gas jobs help boost that figure?

Even better the Scottish Government are looking for a buyer of a company they don't own. The treu face of SNP Marxism and Unite infiltration is never far below the surface.

There is a huge amount of nonsense written about race to the bottom; but this is a potentially competitive site, with a company willing to invest, being closed down by Unions and workers who don't fancy it. End of.

The sooner Scotland votes for indepdendence the better; in deed more so now as we will be able to sell them products from Southern refineries and pertochemical plants. The whole sotry also helps to frame the SNP claim's to endless funds from the North Sea oil. Grangemouth is having to look further afield for quality oils from which to extract gas as the North Sea declines and this is a big factor in its increasing cost base.

Reality seems far from intruding into this sad episode though.

Tuesday 22 October 2013

Grangemouth - another fine mess

It's a sad state of affairs up at Grangemouth. This is one of the most significant refinery and chemical production centres in the Uk. The most important in Scotland by a long way. In the world today, refining has become a difficult business as the margins have been squeezed.

Why so squeezed, well a glut of new infrastructure has been built and at the same time world oil production has levelled off. Gas from fracking has increased, but LNG is a vastly different infrastructure. As well as over-capacity, since 2008, finance for commodity transactions has been withdrawn by banks. When a site like grange mouth, which needs about $10 billion a year of oil to refine, struggles to get credible finance then the business is in trouble. Ineos the owner, is a Chinese company and this was hoped to be the solution to the problem. But with margins tight they are trying to get the workforce to accept lower pensions and pay freezes. Unite Union are dad against and the Scottish Government, full of Unite reps, has decided to try to find a new owner.

This all rather sadly reminds me of Petroplus and its Coryton refinery. There the banks withdrew the credit line and the company collapsed, no new buyer was found and the refinery has closed. Now at Grangemouth the same story is playing out. It's hard to blame workers for refusing harsher terms, but equally what at the Unions doing thinking another purchaser will be on the horizon.

If Chinese investors can't find the money then no one else will be able too. It's a terrible waste, look at ND's post on Teeside below and you can see how much valuable heavy infrastructure is being wasted by very poor macro-economic management in the UK.

Monday 21 October 2013

Enter The Chinese Dragon - and the start of bonded servitude

Under foreign flags
Readers of C@W are aware that I am generally untroubled by inward investment and foreign ownership of UK assets, though this is clearly not a view shared by all who visit these pages.

The Chinese aspect in today's jaw-dropping (if highly trailed) nuclear announcement is a bit different, though.  There is the national security angle, of course, and many will be most agitated by that.  I don't dismiss it, but it's not what strikes me the hardest.  Security of supply is a non-issue: the Americans tried to pin that on Russia as a gas supplier during the Cold War and it never stuck.  Safety ?  Technology ?  All issues that can be resolved - if you count buying the ridiculous EDF / Areva EPR technology as a good idea in the first place.

More foreign flags
I am more concerned about what it signals, or rather confirms, about what I have long felt to be the probable strategic response of European governments to our parlous financial position.  A couple of years ago I wrote that when we are really up a gum tree the Chinese will have a deal for us, and we will meekly sell the farm.

This is a particularly acute risk for the UK, in my assessment.  In our semi-detatched euro-positioning, our vulnerability to having the City isolated by jealous continental and American financial authorities, and our commendable centuries-old willingness to roam the high seas, we will always be inclined to 'trade our way out of trouble'.  

Now true commercial trade is a great thing and would indeed be the ideal way forward.  But increasingly what we see is a baser trade: the prostituting of our institutions to the whim of Russian and Chinese wealth.  If they want to lavish their money on our libel courts or Mayfair shops, that's one thing.  But it won't be ending there.

Today we see the first of the mega-bargains our desperate UK politicians will enter in order to engineer short- and medium-term relief from our woes.  Faustian is just one way to describe it.  Another would be the PFI-ing of the UK economy to China.  Future generations will curse Camerosborne roundly, as they pay grotesque prices for electricity and probably a great deal more.

And the prices may not only be measured in currency.  Bonded servitude may be the term we are looking for.


So, Farewell, Teesside Power

As the goverment's monstrous Hinkley decision is rolled out ...

The Teesside Power Plant at Wilton, near Middlesborough is the world's largest CCGT / CHP plant, at 1,875 MW.  Commissioned in 1993 by Enron (who else) it had a chequered career in the post Enron world and is now apparently to close.  There has been some ill-informed comment about how old and inefficient it is - but I can tell you more.
No shed: no soft engineers need apply
First of all, marvel at its looks - it's the bit within the red ring (and has nothing to do with the big cooling tower behind).  Why is it all so exposed; where is the typical power station turbine hall, or 'shed' ?  Well, there isn't one, and power plants (like oil refineries) don't need sheds, they are perfectly well-suited to the outdoors.  The sole purpose of a shed is to keep pampered electrical engineers' clip-boards dry, for which boon they expect developers to spend many thousands of unnecessary wedge.  It took Enron to call BS on this: let the soft gits get wet, like civil engineers do.  The result is something that was built in record time (two years instead of the three that is still to this day considered standard for plants less than half the size). and looks pleasingly space-age.

What about those claims of inefficiency ?  This is easily explained.  In 1990, the start of the first Dash For Gas, everyone else was being suckered into buying new turbine technology: GE Frame 9's and various ABB / Siemens / Alsthom offerings of notionally, nay revolutionary higher efficiency.  Problem was, it didn't work at first, and several other plants starting up in the 1991-94 period spent their early months in pieces on the deck being re-built.  An efficiency of 43% x something (Teesside) = more electricity and revenue generated than 48% x nothing (everyone else).

Enron, by contrast, chose slightly less efficient, but tried-and-tested multi-fuel Westinghouse kit - 8 gas turbines and, crucially, two steam turbines (the bright blue chunks in the middle) - in two clusters of 4 + 1 (see aerial photo), hence the racy 4-tube exhaust stacks.  They worked brilliantly from the word go; the project came in under budget and under time and was a wonder of the world in its day, with awestruck visitors from all over the world.
2  x  (4  +  1)
It was from this platform, plus other gas infrastructure they built on Teesside - gas processing, gas import/export, gas distribution, black-start capacity, fuels storage, high-quality steam distribution ... that Enron's mighty European energy trading business of the 1990s was built.  Enron optimised the hell out of it all.  After their demise (2001) the power plant became a pawn in complex litigation and was operated in the most pedestrian fashion simply to keep a modest cash-flow stream coming to service the considerable debt involved.  The system was never optimised again, because only the Big E knew how to do it.

I could tell you a load of entertaining stories about it, and maybe I will.

Should it be closing ?  If you take the nameplate efficiency (43%) then it is certainly outclassed by the 55%+ plant that has been built in recent years.  So, in the hands of its current pedestrian owners GDF (I am being restrained) yes, it is clearly a candidate for closure.  We'll never know what it would be doing today in the hands of Enron, but they'd certainly be squeezing a lot more out of the entire set-up than "43%" implies.

What a distressing waste.


Saturday 19 October 2013

Weekend Arts: Lowry

Source: Wiki (see terms of use)
You can always get me along to an exhibition of an artist with a clear world-view, even if it's not one I particularly like.  Only just squeaked in to the Tate Lowry, though, which closes this weekend.

No great visual revelations here - you know pretty much what you are going to get, wall after wall of it (none of his strange erotic stuff included in this show).  But there are several really illuminating things to be learned that you won't find in wiki.
  • He can properly be placed squarely in the French tradition of Utrillo and Pissarro, having been formally trained at the Manchester School of Art by the less well-known impressionist Valette.  Indeed, he (Lowry) exhibited in Paris more than in England in his early years.  (To judge from the single Valette in the show - a grand urban nocturne - the master was, *ahem* perhaps better than the student ... just a matter of taste, obviously)
  • He was a fire-watcher on a high factory roof during WW2, which readily explains the perspectives of many of his post-war paintings.
  • He was capable of taking the piss in no uncertain terms.  Two separate paintings are exhibited side-by-side without comment, one entitled 'People arriving at work' and the other 'People going home from work'.  They are essentially identical (not mirror-images), down to the colour of individuals' coats
  • He had a short 'welsh' period when he painted some more-studious-than-usual / less generic, and rather magnificent Welsh landscapes  
  • Gates and gateways clearly had significance for him (might be a fruitful opening for psychological speculation)
This is all a bit late to count as a recommendation for any except London-area readers - sorry about that - but it's meant that way.  Time well spent.


Friday 18 October 2013

No rate rise in 2014 says Bank of England

How has it come to this? the Bank of England has a new obsession with 'forward guidance' - which as Terry Smith writes in the Telegraph today is a ridiculous statement, as if there is backward guidance!

But now Spencer Dale has decided to tell everyone that he does not think the economy will be in good enough shape to raise rates in 2014. We are only just into Q4 of 2013, but the sages of finance can see well into the distance.

Well, this tells me a few things:

1 - Clearly the economic recovery is not going to be very good, perhaps even dropping off from here on in. If growth continues at 0.5% per quarter, how can rates not adjust to what we would see a normal growth? therefore, the BOE must believe growth is going to be well below that next year, maybe 1.5% or so.

2 - Who cares about a housing bubble? Certainly not the Bank of England. As it happens, I don't think there is much of one either yet. But I do see an problem, not of 2007 proportions, in Commercial Real Estate. Yields are 5% and falling for prime buildings. Even in regional cities they are 7% for good properties. How these deals will make sense when rates rise I do not know.

3 - Long term huge damage is being done. people now in their mid-twenties do no know what a real interest rate rise feels like, except if they use Wonga perhaps. Debts on property are building up with people thinking 4 or 5 percent is a big mortgage. In the 1970's, 1980's and 1990's we had multiple periods of 10%+ rates and 15%+ mortgages. How are people going to adjust when normality returns? The longer the BOE leave it, the more conditioned to ultra low rates people become.

4 - Savings, what's the point? With super low rates but still mediocre inflation, money and saving have no value, getting into debt becomes the sane choice. It's a huge moral hazard, all taken it the name of defending the Banks and the deficit.

Thursday 17 October 2013

Question Time - Anything you say may be deleted, redacted, or made up statements inserted and used in evidence against you ..edition

David Dimbleby chairs the topical debate from Basingstoke.{oh ..bad luck!}
 His guests are immigration minister, Mark Harper MP; 
Labour's shadow education secretary, Tristram Hunt MP; 
Diane James of UKIP; 
Daily Telegraph chief political commentator Peter Oborne; 
playwright and chancellor of Kingston University Bonnie Greer.

2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter- its often better than the actual show. Lots of rants and that moment when you read something written by someone else who is clearly 100% wrong. How can someone be 100% wrong? if you want to know, listen to Larry Lamb on a Sunday morning on LBC 97.3 - 100% wrong on pretty much everything.


BQ believes:
Dimbytie - Eco green with sky blue

- Are the police to be trusted or is just a few ten thousands of rotten apples- Savile, Hillsborough, Duggan, Mitchell Lawrence?
- Obama saved the day and saved the world from the US version of  UKIP - Bonnie?
- Should Vince Cable be sacked for finally doing something right? 
- China - Can we have a massive sale and flog them everything we have?
- Maddie. Is it right that one family can monopolise the media?

Number of wins 
Mark Wadsworth - 1
Nick Drew -1
 Malcolm Tucker -1 
  Hopper -1
Dick the Prick -1 
Kilgore Trout - 1
 Measured - 1

Working again

Not only I am working like a zero-contract hours slave this week, blogger is playing up and not letting me access the blog particularly easily.

I Will try to return later, hopefully by the the US Congress will have saved the world again and the Royal Mail will be back at 330p too....busy day!

Wednesday 16 October 2013

Property: Bubbles, Bursting Bubbles and Better Markets

Real estate is clearly the topic du jour, if not du siècle, seeing as how the whole economy is endlessly to be pumped up like an old tyre with property inflation.

Now here's a thing, spotted by Timmy.  One of the new Nobel laureates, Robert Shiller, is an efficient markets theorist and Shiller, says our Tim,
"is certain that the housing crash was caused by not enough speculation, not too much. If there had been a futures market in housing, the ability to sell short, then the bubble would never have grown so big."
How so ?  Well, because derivatives would enable investors to go short, which is what is needed to correct a price ramp driven by long-only forces.  In the absence of a user-friendly derivatives contract, only heavy-duty professionals can conduct shorting operations, and even they may find it difficult to create the instrument they need synthetically or by proxy.  Some, we know, consider shorting as the work of the devil but they are wrong (see this exchange dating way back): the problems come when shorting is not available to all.  Markets need long/short symmetry to work efficiently.

In fact, lots of people could make use of a deep, tight-spread property derivatives market - and not just speculators (though they are ultra-important providers of liquidity):
  • the house owner who needs to move elsewhere for a year: if he sells in order to be able to rent, he loses his position in the housing equity market and, if there is inflation, may find it difficult to re-enter at the same level.  But he can't afford the rent without selling; and doesn't want the hassle of letting his current property.  He needs a property-value forward contract (if he is content to be fully hedged), or an option (if he wants to retain the upside and is willing to pay the option-premium) 
  • the London house owner who is moving to Manchester for five years, after which she expects to retire to the home counties.  She wants to buy in Manchester but fears prices in the South East may surge ahead of those in the NW.  She needs a 5-year basis swap on the SE-NW differential. 
There is in fact a UK property derivatives market but I've never heard of a retail punter using it for proper hedging or investment purposes (has anyone ?), suggesting that it's not sufficiently liquid.  Also, it doesn't yet offer the kind of instruments in (locational) basis I described above.
[History corner: just at the point it went bust, Enron was about to make a market in UK property indices, basis and all.  It was going to buy Canary Wharf as its anchor in the 'physical' market, as a prelude to offering paper.]

The beauty of property is that loads of people are willing  - only too willing - to take spec positions on both sides, which is what generates the liquidity and tight spreads needed by the hedgers.  Absence of such willingness is what did for the weather derivatives market, which has never really taken off as it was supposed to do.  The simple fact is, no serious punter really has a view on next summer's average temperatures.  

So - good on Shiller, and roll on the liquid property-values market.  And let's subject future property price ramps to the full rigour of the short-sellers.


Tuesday 15 October 2013

US Debt day this will be a real crisis

I have not really concerned myself too much with the US being unable to get approvals through the Senate and Congress about its Government shut down or the potential of not raising its debt ceiling. This is no doubt because, along with everyone else, I have seen this wolf-crying movie and am pretty sure I know how it ends. There is some messy, not quite complete, deal which is struck on the last day and all is fine.

However, one day I also know that the story of the boy who cried Wolf has a different ending. In the US the Tea Party is reviled by the left, but many of its members have really quite orthodox idea about money. The Democrats, whilst not as hateful of capitalism as our Labour party, have followed the same approach of creating a client state of welfare recipients. Moreover, this group is not only large, but in real terms poor. The poor of America are in a far worse state than say the poor of the UK. Society is split and the economy is recovering but no one thinks the US is going to rise again to have 50% of world GDP, just as the UK won't return to its pre-WW1 heyday either.

The US budget is though in better shape than most European ones and thanks to Shale Gas the US has discovered another motor to go with its computer-based technology leadership. The US is not going to collapse or face a fate like that of France in the near future, where lack of leadership and competitiveness will enforce a period of absolute decline.

However, one day the deficit must be addressed and the endless debts too. Plus as the society ages the Country must face up to pension and health care costs. In many ways, this is what the Tea Party want to do today, rather than wait another decade. They don't have much support for this view and their constant clashes in Congress are probably not helping. But then again, President Obama is also being hard nosed with them, calculating he can get his spending through and welfare bills maintained or increased with higher taxes. It did not quite work last time and ended with Sequestration.

So one day, the Republicans and their Tea Party elements are going to think they have nothing to lose and indeed, that chaos maybe the only way back for them. In the UK we had Gordon Brown with his scorched earth policy for 2 years who played a similar, but opposite role. Politics is dirty and the collateral damage to the economy and people is worth it for the ideologues. So whilst I think there will be a deal today, one day the boy who cried Wolf will be right and the debt ceiling won't be raised.

Monday 14 October 2013

Whatever happened to the right to buyers?

The council house sell off was the worst event to befall the UK since the Beeching axe of the railways.
This meme runs virtually unchallenged through politics today. Even the Tories, who once had 
private ownership as the SPQR Eagle atop the standard of their all conquering 1980's legions are less keen to talk about it today.

Mainly, one assumes, as house building has not kept pace with demand. And that the sale of council houses saw the 'profits' ploughed into anything else but more housing. 
That is not a surprise. The idea was not to give tenants a house and then build another one for some else. It was to remove people from state dependency for their property and, as a bonus, turn socialists into capitalists through asset transfers.

Now..The thing that I genuinely do not understand is this. Why has selling the council houses resulted in a national social housing shortage?  Selling the council houses should have had nothing to do with this.

Mrs Q - council child, family of 7, 2nd generation, Irish immigrant family, does not live in the council house her dad bought in 199x. 

He lives in it. With her youngest sister.

If the family had decided against buying that home in 199x, as they very nearly did,  he would still be living in it. Just not as the owner. The net effect of this house sell off on habitation and housing stocks was nil. All that happened was the council no longer had the house, but also no longer had a family to house within it.

So..where does this idea that the sell off was responsible for the housing crisis come from ? If anything, it must have lowered house prices, during the sell off. When cheap homes were being dished out by local authorities at below market value.

Unless all the people who bought their homes subsequently decided to rent them out, or sell them on to the private sector and then moved back into social housing, there should have been no effect on housing at all. The vast majority  of people that bought those houses, still live in them today.  Or their  descendents live in them, which they would have done anyway.

Mrs Q's youngest sister would have an automatic right to that 3 bedroom terrace if the old man passed away through her continuous residence there since her birth. Or, if they had chosen to remain at the family home, one of the other 4 siblings could claim the right to occupancy.
Ma Q- 

The fact the sell off money did not go towards building more social housing is kind of irrelevant. Because if those houses were never sold in the first place, the numbers of people currently living in local authority housing would be higher. 
Isn't it only those who bought, and then died and who's children would have not had any need of social housing, but inherited a house to sell, contributed to the reduction in social housing availability?
And those numbers must surely be relatively small.

 Is not net immigration and a failure to build more housing to accommodate a rising population to blame? The changes in living arrangements, divorce  rates, the rise of single parent families and an increase of around 10 years in UK life expectancy since 1980, really to blame?

So..have I missed something so blindingly obvious that I must remove this post in embarrassment?
And is it that 'the Great British Sell Off is responsible for a lack of current affordable and free housing' is a myth? 

Political Treat Withheld: Oborne Bottles It

So Peter Oborne hasn't delivered his promised revelations about Alastair Campbell's evil doings.  Small boy offers to grass up big bully, but then he doesn't.  Whatever could have happened there ..?

And what were our closing words of encouragement for little Peter ? No last-minute failure of nerve, now ...


Friday 11 October 2013

Sell Royal Mail while the sun is shining

Everyone in the City said buy in, everyone has. So now the simple matter is that if everyone is a buyer, then who is left to sell. There is only one way the story ends and it is unlikely it ends with Royal Mail shareprice above £5. Cash your chips if you can!

Thursday 10 October 2013

BBC Question Time compo:

David Dimbleby chairs the topical debate from Cambridge. 
On the panel are business minister and Liberal Democrat, Jo 'sisterhood' Swinson MP
 Labour MP, Diane 'sacked' Abbott.
 Conservative MP, Adam ' the British Chuka Umunna' Afriyie; 
Sarah 'the one on the panel you don't know' Churchwell, professor of American literature at the University of East Anglia; and The Times columnist, 
Matthew ' softy' Parris.


2 pt for a correct guess of the colour or pattern of Dimbleby's tie.{before 10pm}
2 pt for an accurate spot for each of the question asked
2 pt for being the sole entrant to correctly predict a question asked

1 arbitrary point for any partially correct questions, witty phrases, spotting the soundbite, joke, tweet or posting in the comments first.

And the league table will be winner = 1pt
Everyone else - Zero.

Twitter- its often better than the actual show. Lots of rants and that moment when you read something written by someone else who is clearly 100% wrong. How can someone be 100% wrong? if you want to know, listen to Larry Lamb on a Sunday morning on LBC 97.3 - 100% wrong on pretty much everything.


BQ believes:
Dimbytie - Simply Red

- Eu referendum. Will it happen?
- Release of Baby P mum- And social care failures
- How many illegal immigrants shall we say came into the country? 
- Royal Mail - priced to cheap?
- Energy price rises on the way. Shall we call Ed and let him know? 

Number of wins 
Mark Wadsworth - 1
Nick Drew -1
Malcolm Tucker -1 
Hopper -1
Dick the Prick -1 
Anon - 1


Wednesday 9 October 2013

Delivering the recovery

Delivering the recovery

A spin off from the discussion on Royal Mail privatisation was 'is royal mail finished as a business?'
or  .. is there any way to make delivering stuff pay? 
Obviously there is at a price. UPS - DHL- Parcelforce will charge around £15 to pickup a box of almost any weight from your house and guarantee to take it somewhere else. The faster something is needed the more it costs. About £50 to send a document to Washington DC in 2 days.

The cheaper couriers will pick up a number of small sized parcels from your house for about £4 each and deliver them elsewhere, without guarantees.  And you can post a small sized box yourself at the Post Office for £3. 

This shows how hard it is to price deliveries and collections. Those small carriers Hermes and such, lose money. They lose money even though they can, at any time, pass everything in their depots to Royal Mail to deliver and cream off a %.

How much are we prepared to pay for a delivery? A good example of in-elasticity in the pricing is shoes.
Basic, UK footwear. Trainers. Slipper boots. Crocs and sandals. In the keenly priced £5-£20 this was quite a good business for online sellers. 
But in April, Royal Mail decided to increase the price of postage from £2.20 a box to £5.20. Around 135% overnight increase. Some prices went higher to around £8 a box.
And as a result the market collapsed. No point buying online for cheap goods if they cost MORE than in the local shops. There are no figures to point to. But the Communications union estimates over the counter ebay postings have fallen  by some £10 million in the 6 months since the increase. 

So clearly there is a price ceiling on what the consumer will pay for delivery.

And, as the local couriers lose money, £4 a packet to collect from Sunderland and deliver to North Wales isn't enough to make any money. But we won't pay more? So what is to be done?

Plus..we aren't happy with the service we already have anyway. We don't want to have to go to a depot.
{ which are pretty appallingly run - Anyone who thinks nationalisation of any industry would be good thing need only turn up to a large town sorting office to try and claim a parcel under the Stalinist bureaucracy that views you as, at best,  interrupting valuable state business with your presence.}

We won't go to a depot. We won't wait in. We don't want something left with a neighbour. We don't want deliveries while we are at work. And we definitely don't want to pay any money for a service.
What the data says is we want to go to a local shop, day or night, and pick up our stuff, quickly and without any hassle like I.D. cards.

Trouble with that, is there is no money in that either. Mail companies have tried to sell the idea on footfall. You can attract people to your shop! 

Get knotted! 

If retailers want footfall for free they can have a sale. Or sell low margin drivers like cigarettes and newspapers. None wants to have a very low profit, large space use, labour intensive operation where something as simple as price and forget baked beans could be put instead.

The internet and e-tailing is the future. We know this. 
But how to make it pay? The lower costs of selling online allow a greater profit. Except that online competition forces prices lower, which is a main reason shoppers search there in the first place. So the usual margins apply. 

Either postage prices must rise to accommodate an easy, secure, convenient, tracked, slick, posting/delivery/returns service. 

Etailers must accept lower margins for larger volumes, {which they already do - 25% is normal. On street is 80-100%}

Or the mail carriers are going to have to deliver and collect cheaper and better than they do now. 

With privatisation price rises are the most likely. But that is where we began and it won't necessarily improve the service in any way.

Press Freedom is a boring subject

Here we are today, with the Government in a nice fix of its own making over Press Freedom. The Left, in the form of Labour and 'Hacked-Off', together with the Guardian spinning some crucial lies at the right time, have managed to get a majority in Parliament on their to to regulate the press by statute. So ending 300 years of Press Freedom. What do 'the people' think - er, nothing, this is nto really one for the man on the Clapham Omnibus is it. Indeed, after the scandal of phone hacking most people probably think the Press needs its wings clipping. I could not agree more, but with a whole host of journalists awaiting trial we are already at the point where future journo's will think twice before doing anything to get a story?

But the whole press issue is boring, of more interest is the direction of travel. How long will the writers of this blog continue to be able to publish without being registered or be able to publish with anonymity? We have been writing for 7 years now, but I doubt that will last another 7 years without state intrusion. Across the world there are great attacks on press freedom, often in a mis-applied response to the rise of twitter and facebook as forums for information sharing.

However, newspapers who are shock story driven, are overly keen to promote themselves as this thin end of the wedge, when the collective behavoiur of the editors has been abhorrent for years. Just look at the Gaurdian's relativistic morals publishing of Edward Snowden's revelations or the Mail happily laying into the dead if it helps make their point.

How can we stop the politicians form hiding there affairs and expenses (which explains the keeness of the dishonourbale members to vote for regulation on all sides of the house) but also tame the wilder elements on the press who are happy to ruin peoples' lives for the sake of a few extra copies? As often, the simple way is actually to carry on as is. The Written press is dying out anyway with newspaper sales and revenues collapsing. it's current desperation is bourne out of its failing business model. Let's instead allow it to blow itself out, but not let the politicians ape France and be able hide their indiscretions and wrong-doings.

Tuesday 8 October 2013

IMF Updgrade; interesting politics

There are some downsides to the IMF upgrading the UK growth forecast for the year. Think of the Balls household for a start with poor Ed hiding under the bed and waiting for tomorrow. Although it also highlights how effectively the Labour party have been at pretending they are not interested in this. This whole crisis of living meme is a very good on account of it being perfectly true. Quite how it is the Tories fault I am not sure, but the Country is so much poorer and money goes not very far at all these days; so its great politics. As long as Labour can try and get the public to forget about how we got here in the first place.

Also this illustrates a huge downside of the Coalition, they thought they needed as long as possible to turn the Country around. But here we are with growth just a little later than expected. In fact, it is quite possible there will be another downturn of sorts before the election. if only they had a choice about when the election was we could be looking at one in May next year, with promises of growth to come. Instead, it will be 'come what may' in, er, May 2015. Abdicating control of the timing of elections was a very odd thing for the Government to do, especially given the bias against current Government in the electoral system.

Monday 7 October 2013

Royal Mail now...BBC next?

It is not that surprising for the Government to put the Royal Mail privatisation away at a good price. After all, its a dog of a business with a limited future. Think Yellow pages of 5-10 years ago. The model of delivering me 90%+ junk mail is a poor one and the likes of Amazon etc are edging into full-time competitive behaviour or doing joint ventures with commercial rivals like Argos.

Royal Mail has a strongly unionised workforce and a commitment to the Government to maintain unaffordable business like universal delivery. So to sell the idea, they price it cheap, don't account for land values and let this slip pre-IPO as well as taking on the pension liabilities for the taxpayer. It's a good story for investors today and if you trade the share there is a good chance of making a nice 15%-30% upside. Long-term, a dog is a dog, the world is not going back to sending hand-written letters and nor will people always send real Christmas cards which is a significant chunk of the business.

However now that this taboo is broke ,we know there will also be public offers for Lloyds in Q1 of next year and possibly for RBS too. Merrily, a slate of privatisations. This leaves one commercial monster out there for the Government, the BBC. This would be the holy grail as the BBC is after all a very good business with a market share that won't easily be attacked by the competition and some very strong content and services, like its website, that should prevail even in a competitive market. Plus, subscribers, that is everyone, can be given shares for free on account of them building up the business.

If these privatisations prove popular in the short-term then this should be in the manifesto's of UKIP and the Conservatives for the next term of Parliament. It's for the BBC to work out how it copes with the end of state-enforced revenue-raising, but I have a feeling that a giant endowment from the sell-off will go a long way to easing the blow.

Sunday 6 October 2013

The Week Ahead: A Political Treat In Store

I have long advocated that the BBC, as a public service (remember public service, Aunty?) should set up a sting to reveal the full nastiness of subterranean political 'briefing' operations.  Complete with high-quality recordings of Mad Al Campbell uttering lurid threats down the telephone, or Bully Balls spinning against Miliband.  For balance they'd probably need to conduct one such sting per party, even though everyone acknowledges the Labour Party is far the nastiest: so for good measure we'd get Team Boris scheming against Osborne, and the who-knows-what that goes on among the LibDems.  If it was done well, we'd even get TV footage.

Of course, under the great banner of 'protecting one's sources', or 'the sanctity of the Lobby system' (aka naked fear of what the bully might actually do in future), the omerta reigns supreme, and no-one has ever played back the tape of Brown being described by the Blair camp as psychologically flawed.

But all this may be about to change !  For Peter Oborne, stung by Mad Al's egregious recent claims that he was whiter than white in his days at No.10, and in particular 'always respected politicians', says that in the middle of the coming week he is going to dredge up from deep storage concrete proof of the bastard's trash-talking of Labour ministers.

Can't wait.  Should liven up the Leveson debate no end, and generally add to the gaiety of the nation.  Good on yer, Oborne.  No last-minute failure of nerve, now ...


Saturday 5 October 2013

Weekend Bleat: Illiteracy @ The Guardian

I credit the Grauniad with being the home of some very good writing.  But their editorials and op-eds are frequently penned by people with a truly deficient grasp of the English language.

The following is a case in point: a piece of outright ignorance which is pretty shameful for a broadsheet newspaper with liberal and literary pretensions.
"The last paragraphs of the Mail's editorial manage to elide Karl Marx and the 'hammer and sickle' with Ed Miliband's stance"
'Elide' is a perfectly good English word, and it does not mean what this idiot thinks.  For fun, I searched their website for other uses of  'elide', and at least 95% are equally wrong (and more than one writer is involved in this stupidity).  I say 'at least': it could be more, but there are just a couple of instances where you can't be certain what they intend and they might just actually mean what the sentence says.  Here are some more, all from the same bunch, all in the last few months.
"The narrative voice can elide with the young narrator..."
"The conversation tend (sic) not to simply be about governmental matters but frequently elide into discussions about ..."
"Grayling manages not only to elide criminality with stupidity, but also ..."
"Different periods elide to consistently potent and surprising effect"
"The rhetoric of public interest tends to become elided with the self-interest of ..."
(Hats off to Nicholas Lezard for a rare instance of correct usage.)

The malady is not difficult to diagnose.  They are looking for a clever word for 'slide', or 'slide together', and 'elide' is just so tempting ... Pathetic, really.  The best they could plead in defence is that they are using it as a kind of shorthand for 'elide the distinction between' - and that's pretty thin.

It's a nice example of its kind but by no means alone; and there's no defence in calling me an inflexible pedant who is unable to accept the evolution of language.  Of course language evolves, and words subtly change their nuances over time, there are no end of examples.  I might fairly have employed the word 'grotesque' in several of the sentences above, but its use today is quite different to that of 150 years ago.   

A current case in point might be 'kudos'.  Americans throw kudos around all over the place, clearly under the impression that it is a plural noun, where 'a kudo' is presumably thought to be what we might call a plaudit, or a brownie-point.  Of course they are wrong (with a small 'w') about this but it's clear enough what is intended, it's pretty harmless, and a few decades from now it will be the new de facto meaning of the word.

But when clearly based on ignorance, Outright Wrong is Outright Wrong; and it can even be serious.  Take 'failsafe'.  This is a very important concept in engineering design, with handy metaphorical or analogical uses in other contexts.  But it is clear that many idiot writers and broadcasters think it means 'foolproof' or 'impossible to fail'.  Young engineers nowadays must presumably be carefully told of the real, rigorous meaning in their training, to ensure they aren't blithely misunderstanding it based on the careless usage they were brought up on.

Well-educated folk that C@W readers are, you will definitely have some favourites of your own, in all these categories:  annoying, harmless and dangerous.   Care to share them ..?