Tuesday 30 September 2014

Shale: Let The Bribery Begin

The great trick with shale is to proceed logically.   If there is as much UK potential as Cuadrilla and IGAS believe (and they really, really do: they wet themselves every time they think about it which is a dead giveaway), let them play 'put yer money where yer mouth is'.  Ever-thrusting INEOS* has just made a sensible move; offering 6% of revenues to landowners and locals: a kind of voluntary royalty that starts to create the same kind of favourable dynamic you get in the USA where real royalties are payable. 'Bribes and bulldozers' ?  Sounds good to me.  Trying to develop trillions of cubic feet of onshore gas on the cheap, in a densely populated area, is just, well, silly.

Sniffing the air - it's diesel fumes from drilling rigs, BTW -  I'd say the path is fairly clear for the UK shale explorers now.  The man in the street (falsely believing we get our gas from Russia, it seems) is pretty much minded to let them go ahead.  Swampy and his friends are looking forward to scrimmages in country lanes, which is their democratic right.  The Old Bill is looking forward to plenty of overtime, and private security firms to deploying a lot of cheap-labour patrols and barbed wire.  Local authorities are looking forward to some extra revenues: and land-owners will get a bit of the action, too.  Water companies will sell a lot of water, and put a bunch of land to more productive use.  University departments from geology to chemical engineering are angling for lucrative projects.  A raft of service industries will make hay selling shovels to the gold prospectors.  The PR industry will be conducting community outreach projects on a scale beyond their wildest dreams.  And not a subsidy in sight !

Funnily enough, in the end it is probably 50:50 at best as to whether there's anything to be done by way of large-scale development in the UK because, quite objectively, the production costs will be high here and gas prices are seriously declining across the globe.  In a race between developing, say, Algerian shale (they have astronomic potential in their Big Open Spaces) and UK shale, my money is on Algeria.  And - of course - Russian pipeline gas is cheaper still!  But hey, so long as it's not public money ...

A final word on 'bribes'.  A lot of lefty-greenies hold up Norway as a paragon of how oil and gas development should be done:  tax it big, and create a SWF.  Well OK, with a population of 5 million that's probably right.  But do they know how licences are awarded in Norway ?  The bidders put their money on the table at the Ministry of Petroleum, on top of which they offer creative ideas like we will also sponsor this little fishing village (which, needless to say, is otherwise completely unviable).  "Bribery" ?  Well, if you must.

ND

* I've always liked INEOS (and BTW have no shareholding or other interests in it).  Emerging as did several companies from the bloated, decaying corpse of once-glorious ICI, it represents the 'creative destruction' that is capitalism.  In their final years the management of ICI were a disgrace.  They held the stewardship of unique and fabulous assets from Chesire to Teesside; became fat and lazy; and as their indolence and lack of imagination led inevitably to decline, they concentrated on seeking special treatment from government, threatening job losses if they didn't get their way.   Darwinian dynamics brought the story to its conclusion

Monday 29 September 2014

UKIP won't cost the Tories an election they want to lose anyway

Boris Johnson and the rest of the Tory front bench are clearly very angry at uppity UKIP ruining their conference by stealing their pesky MP's.

From the tone of the Tories, they did not seem to like these Carswell and Reckless people anyway.

However, it is the Tories who are right to be angry, after 4 years of Government, they have never been ahead in the polls since 'austerity' started - and they won't be until they leave Government in May 2015.

Why is this?

Well there are some interesting points that the Tory party seems to have missed:

1) The Boundaries of the current parliament are hugely in favour of Labour, by as much as 3% of the vote. The Tories had a chance to change this, but were beaten politically by the Liberal Democrats over AV and Lords reform.
2) This is not a minor issue, the Lords really does need reform. Alot of the Scottish referendum debate was around how Westminster is a closed shop and not very democratic. The Lords is key here, a reformed Lords could be the Federal key to governing the UK. The Tories walked away from all this, saying it is inconsequential.
3) There are not votes for Tories in 'Austerity' light. When the Euro Crisis came along the Tories copied Ed Balls plan. So they have the image of austerity to harm them, but no fruits to offer in terms of the Country's finance now being more sound - anyone who looks in detail can see any small accident and our rickety public finances will be finished.
4) The Tories promised huge cuts in immigration - immigration has expanded overall under the Tories. There is more than ever, over 250,000 net new people last year. No wonder we have a housing crisis.
5) We have been offered Scottish Referendums, referendums on AV - everything but the EU - the monster which forces Immigration and other issues to be so painful. Whilst the establishment might win a referendum, a refusal to offer a real one for years is a useless political fix which Cameron is now paying for.

Finally, and most importantly, is the betrayal of Thacther's legacy to blue collar workers. Low taxes, the ability to buy a home, the ability to get on in life. All of these things were strangled by the workfare of Labour and the high taxes this imposed on those of limited means. It has meant that under about £40,000 a year of income there is little real difference in living standards for many people. - it is a socialist utopia. The Tories have done very little to change this, fiddling at the edges. It is not surprising so me that traditional Tory areas like Kent and Essex, full of aspiring and hard working blue collar workers, are the first to give up - seeing that Tories are little different to Labour in offering a statist solution on incomes.

Ed Milliband offers this same solution, you may as well vote for the real deal; which is why he will be Prime Minister next year.

Friday 26 September 2014

Parliament to vote for war against Eurasia

It does not seem very popular today to be against the UK getting involved in Iraq and Syria, but then again, MP's and the media like to have short memories.

There is no strategy whatsoever for the intervention. The RAF are going to bomb a few trucks and kill some terrorists. That is the good bit, the more of them that are dead the better given their unhinged barbarity they wish to inflict on everyone else in the world.

But with no troops on the ground, no rapprochement with Assad, no chance of Kurdish or Iraqi forces really being capable of offensive duties, what will this achieve? I have not even mentioned the Free Syrian Army, for good reason too, it is worthless and struggles to hold any territory inside of Syria.

Plus we have Libya - this sad country does not make the news now, the world having moved on. But Libya has not moved on, it has moved backwards, by about 100 years. Split by rival militias with either General warlords or lunatic religious terrorists. Libya was once a prosperous country, a small population and plentiful resources of oil and gas. A nice Mediterranean climate to boot.

What did Western intervention achieve in Libya in the long-term. Gaddafi is gone and replaced by a worse situation, much like Iraq. Extremism has a new fertile territory.

There was no plan in Libya and there is no plan for Syria. Iraq perhaps could be returned to its whole but this is unlikely as the schism in the Muslim world between Shia and Sunni is akin the the reformation in Europe. This will not be settled over a few years but many decades.

When the UK voted to not go into Syria last year, people now say this made it worse and allowed IS to flourish. This is a simplistic approach to what happened. IS grew from funding from Qatar and Saudi Arabia who now at last seem to be realising the need to kill the monster they have created. IS grew because Shia Iraqi government lost support in Northern Iraq. The governance of Iraq needs attention, which it is now getting.

The problem of IS is not a creature of the West. The crazy terrorists use Western hostages and threaten the West for purposes of extortion and to gain more enlistees. We would do better to ignore them and encourage the regional powers to annihilate them. Bombing randomly from afar will do little or nothing to improve the situation and only goes to further enhance copycat terrorism around the world in the Phillipines etc.

Instead a vote is for a permanent war against radical Middle East factions, one that is stateless and probably impossible to win through military means. We have tried for nearly 20 years and still the war goes on. It is hauntingly similar to Orwell's Eurasia war of 1984.

Thursday 25 September 2014

BBC Question Time - charity shield edition

The Great BBC Question Time Bake Off begins tonight.
These first episodes have a lot of ground to cover and usually the editor adds some random questions from months ago. Presumably so we know they've been paying attention and not just on the sort of long holiday a teacher would envy.

So, the first edition back is the charity shield match. Tonight's winner gets to add that silverware to their Question Time Trophy cabinet.

A bit easier tonight as the momentous events have been quite recent. And the location of the show is a bit of a clue to the BBC's thinking.
David Dimbleby presents topical debate from Kelso in the Scottish Borders, with an audience from both the English and Scottish sides of the border.
The panel includes Labour's shadow attorney general Emily Thornberry MP, the Scottish government's finance secretary John Swinney MSP, Conservative chairman of the defence select committee Rory Stewart MP, Scotsman columnist Lesley Riddoch and editor-at-large of the Independent on Sunday, Janet Street-Porter.

Scoring
1 or 2 points for each correct question asked. Depending on how close to the actual wording.
5 points for guessing the colour/design of  the Dimbleby tie. 2 points for nearest match if no outright winner

1 point for each witty comment/excessive punning/ lampoon/mock/clever theme  that you put into the comments
1 point for the first entrant each week 
1 point for random other reasons

Capitalists@Work BBC Question Time competition is proud to support Politicians in Need.
{of votes}.
Sponsored by Benson's Beds. "For a great night in, go to Benson's."
 62 Camberwell high street - Sleeping on the job is what we do."

BQ Suspects
 - Is Independence now dead for a generation?
 -  Should there be a seperate English parliament?
 - Has David Cameron renegaded on his unlimited cash for Scotland promise already ?
 - Should the UK become involved with the US led mission to attack IS in Iraq?
{And should there be a referendum in pacifist Scotland on this? - And why has such a historically warlike nation, very good at fighting, suddenly all become softy-girly-weeds?}
&
- Just because its the labour conference, NHS cash, hospital, funding crisis, mansion tax, privatisation of healthcare borefest. probably from "on message" Miss Soundbite herself , Emily Thornberry. -Or as she's known in the House - THE REGURGITATOR.

Obama Still Baiting Putin

Obama has certainly got his teeth into the gritty foreign policy thing, which all feels rather more real-world than the 'hopey-changey' thing.  He is being roared on by, well, almost everyone; and his coalition-building is on a par with that of George Bush Snr 1990-91, which is saying something.  (It can have its downsides: I well recall the chaos of trying to 'coordinate' an Egyptian armoured column in the attack on Saddam's forces in Kuwait ... a story for another time).

This coalition apparently even includes warplanes from Denmark and Holland, as well as Oz and  France, which is beginning to make the UK look like a real laggard.  Step forward Ed Miliband, whose duplicitous dealings with Dave last time around seem to be the cause.  If Mili is in an uncomfortable position, with several of his MPs beholden to Moslem voters, well, there's a thing.  He should note the actions of the aforesaid Danes and Dutch, who have their own very pressing problems in that regard.  The invitation, Ed, is to stand up and be counted.  Sorry about your Conference and that.

Interesting and significant, isn't it, that Obama used his pulpit to berate Putin again.  This is really baiting the man:  I know you have a Security Council veto, but you're going to hear this anyway. This may be very finely judged, or it may backfire, particularly in the longer term: but it wins a bunch of friends across Eastern Europe.

I wonder if he is going to take the Chinese up on their offer of a few weeks ago ?

Meanwhile, back in his Caledonian fastness, Alex Salmond would like it to be understood that everything's jolly unfair ...

ND

Wednesday 24 September 2014

How can Labour or the Tories fight an election on the NHS?

Westminster, we have a problem it goes like this:

- Current annual deficit - £75 billion, stable and not falling due to a low rise in income taxes

- Total UK debt  - £1.225 trillion and rising rapidly

- NHS shortfall in 2014 - £2 billion

- Predicted NHS Shortfall by 2020 - £30 billion.

- Total Government spend 2014 - predicted £636.6 billion versus £720 billion spending (OBR)

In addition, Mr Milliband yesterday said that he would save our NHS , budget this year £108 billion, from the evil Tories.

And, worse than this, Mr Balls and Mr Osborne are agreed that by 2018/19 the deficit will be eliminated and therefore in real terms we need to have a further £50 billion of cuts over the next four years from 2015. To this we can add the £30 billion of NHS spending.

This £80 billlion is 12.5 of current spending - equivalent to the whole of education and defence spending.

There is simply no way of raising revenues from the economy anywhere near enough to cover this predicted hole in the NHS alone. This is before we add in social care and sweets for all that parties must promise to get elected.

The entire 2015 election according to Labour will be fought on non-economic criteria as they are so far behind on this. But the truth is, even the Tories do not want to fight on the real economic criteria becuase they too know there is no answer apart from drastic cuts to spening. Let's say, end housing benefit and tax credits, plus raise top rate of income tax and a mansion tax, with capital gains at 40%  - this would just about get you to the point where the hole would be filled.

There is a solution of course, end the NHS as it is, focus on people's basic needs and grow and insurance industry out of the nascent one that we have. Make people realise the true cost of care.

To me the NHS, wonderful that it is in so many ways, is the epitomy of the magic money tree theory - worse because we and our loved ones are all mortal in the end. As we have it, it is totally unsustainable without in short order sacrificing much of the national resources into it - but people may vote for that anyway, unaware of the reality for which they are voting.


Tuesday 23 September 2014

Film Industry: Ripe for Culling

Visiting a stately pile that is often used for film shoots, I happened upon a remarkable document.  It reveals the number of film crew required for the following scenes:

  • Driveway of house:  carriage drives by - 90 crew
  • Back lawn: Lizzie watches Mr Darcy gallop up to house - 90 crew
  • Main stairs:  Lizzie agrees to dance - 30 crew 
  • Ballroom - 50 crew, 150 extras 
  • The Bennetts leave the house - 90 crew

The word "required " is of course used loosely.   I think we can confidently analyse the situation as follows: it would not be plausible to claim that 90 people fit on a staircase, therefore a random number of 30 is chosen.  A ballroom, being bigger, can plausibly accommodate a few more - on top of the generously-stocked company of extras.  However, any number of people can fit into an outdoor location, so the full complement is allotted whenever the open skies beckon.
 
You can bet the budget reflected this generous allocation of manpower, even if rather fewer than 90 people were actually, errr, working.  A striking reminder of the days before the Times moved to Wapping and put paid to print unions stuffing Fleet Street payrolls with individuals such as D.Duck and M.Mouse, all of whom were said to put in full shifts every night - and certainly drew full wages.

This is what happens when tax-breaks are awarded to a favoured sector of the economy. The filming schedule cited above was from 10 years ago, but did the financial crisis change things fundamentally ?   Still some modest scope for cost reductions in this particular 'industry', I should think.

ND

Monday 22 September 2014

Minimum Wage - crush the weak

Caught the James O'Brien show on LBC, on Monday morning. 
Mr O'Brien, who is the voice of  the left at LBC, was overjoyed that Labour had pledged a minimum wage of £8. Really, really happy. It's something I've heard him argue for a few times. Pay people more.

He put forward this hypothesis. If your business could not stand a measly wage rise for its employers to £8 from  the current £6.50 then your business is a zombie business and should go bankrupt. There is no point hanging on trying to make a go of it. Just close up. Shut the doors..Call in the administrator.

Now, the actual Labour party announcement is £8 over the course of a parliament. So its probably only an inflation + rise anyway. £1.50 over 5 years. A real non-annoncement if ever there was one. A miliband special.
 It was £5.80 in 2009. So has risen by 70p/hour during the great recession. It will do better than that in a more profitable climate.
And it wasn't clear if Labour also want to include the £8/ph for 16+17 years olds too. That would be about a 100% payrise for them. 

So, i have no real problem with a £1.50 rise over 5 years. Except if we were in a recession in 5 years time for any number of reasons from ISIS to Putin to EU vacuum cleaner motor  type regulations running amok, it would be pretty stupid to put up wages.

However, what is a problem, is Mr O'Brien's complete disconnect from reality. He was genuinely, genuinely saying, it is better to close a business than to let people be paid below £8 per hour.

He seemed to believe that a wage rise would not affect business. He quoted his favourite enemies of banks and supermarkets and multi-nationals, making millions in profits, whilst their lowly cleaners struggle on £6.50 an hour. 
SUCK IT UP capitalists! You CAN afford it! And if you can't ..tough..

Mr O'Brien is normally a well reasoned broadcaster. Thoughtful. Witty.Clever. A keen mind that is skilled at analysing what his callers are suggesting and quickly seeking out the flaws or surprises of what they propose. All while keeping the program flowing and the news and traffic on time. 
He is a good radio host.

But

In this instance, he's a lefty mental. He is someone unwilling to fully examine exactly what he himself proposes. Something he would never let a caller get away with. He was seriously talking of an £8 wage - tomorrow!

For instance, the NHS. Under these proposals, the budget for the NHS has just risen by some 19%-25% The number of workers, directly employed some 1.8 million, { indirectly, 4 million? }. The wages of EVERYONE must rise under minimum wage. Its no use paying a cleaner the same as a cleaning supervisor..all must have an increase.
Taxes must rise. That £1.50 is going to be gone with a 27% minimum rate of tax again.

Every council in the land has just had a whack. So council taxes must rise

Airlines and airports with their £99 a ticket deals must take a 20% hit on the nose.


A hairdresser operates on a physical employed basis. An owner can only cut so much hair themselves. So they have to employ. Can they put up the price of a haircut by 20% to meet the increase in wages? 
if they do, and the one over the road doesn't, how will they manage?
Mr O'Brien says the owner should just earn less money. And if her business is not already making enough to meet the rise, she should close up. 
he cares not for the owner taking all the risks. The employes, whose investment in the business is usually nil, is worth more and must come first

A corner shop makes some 10% profit from cigarettes. About 4% from national lottery. 12-25% from  magazines, fresh food, chilled goods etc. There is no margin to raise. 
Its a very, very competitive business with the big boys having the upper hand. Mr JamesOB is handing the largest corporations, in every sector the entire playing field. His support, his actual demand that the smallest must quit, leaves only the biggest players. The very companies that he continually attacks, for their dodgy corporation tax funneling through low tax havens. Their zero hour contracts. Their squeezing of suppliers. Their destruction of the high street...

He's proposing that only the megacorps will be left. 
The man is creating his own Skynet.

On top of that the inflation effects of a 20% payrise for all tomorrow have been documented well enough in this country in the 70s and 80s.  The effect on employment would be catastrophic. A wage hike tomorrow means limited hiring for 2-5 years except at the most profitable companies. It probably also means redundancies. Certainly it means  less hours. The businesses that pay minimum wage are in the low skilled, high employee count sectors. An £8 min wage does nothing to the more skilled sectors, who must be paying over that now for the majority of their people already. It hits the low skilled/unskilled. The very people that James feels deserve help the most.

Labour are also promising a job guarantee for every young person. That job wil be on this same national minimum wage.
How exactly are they to do that if the smallest of small businesses are closing? And not just the smallest. DairyCrest are announcing cuts to its workforce as it announces it will close bottling plants. 

I wonder if the workers there were asked if they wanted a pay freeze or a job, what they would say?
Mr O'Brien does not believe they should be asked . Just close the business down and let the workforce take up the much better paid jobs that will be on offer elsewhere.

Quite where these jobs will be, he doesn't say. Maybe a massive increase in  artisan bakeries and bespoke furniture covering stores. Designer curtains shops and specialty food emporiums. Those who can charge £7 for a loaf or £6000 for a coffee table can afford to pay any hourly rate the government requires.

For the real high street outside of Chiswick, where budgets are not the same as in West London media sector joint incomes,  there is always Wonga, Ladbrokes, Poundland, The Heart Foundation, Brighthouse and the tattoo parlour to work in.

Oh, By the way Mr -  Ed Balls,Mr  James O'Brien. It is the low paid commission that sets minimum wage and NOT the government. If you aren't going to listen to them, then abolish them.

And add those jobs to that ever growing dole queue.




"Greater Scrutiny"? Desperate Stuff from Miliband

Well it's not going to be business as usual for a couple of weeks, is it ?  Party Conference season will see to that, unless ISIL or Putin really pull a stunt.

Choker
I understand the case for pessimism but am still very upbeat about the opportunity presented to Dave.  When we watch Miliband on prime politico-TV spluttering that he's not against English MPs being given greater scrutiny of legislation affecting England, we know he is completely disoriented.

Greater scrutiny ?   Everybody with a perspective on UK local government immediately recoils from the word.  It was introduced when the old local council 'committee system' was overthrown by the 'cabinet system'.  For those who don't know, prior to being allowed 'cabinet' government, the bulk of local authorities' decisions not delegated to council officers were taken by all-party committees, so that back-bench councillors - who would sit on several such committees - had a fair crack at genuine involvement.  This system wasn't without its flaws; but back-bench involvement was much diminished when it was replaced by 'cabinet', where all decisions are taken by a majority-party clique (and a well-paid clique at that).  The sop thrown to back-benchers was 'scrutiny' - powerless question-time sessions in which cabinet members have to explain themselves.  (The same thing happens in those few areas with executive mayors, when it is the Mayoral coterie that offers itself up for interrogation.)

The consequence of this is that non-cabinet councillors, which includes most of even the ruling party's number, get no closer to decision-making than asking the odd question of an actual decision-maker once a quarter.  They secretly hate it, even though (like parliamentary select committees) they try to puff themselves up and make it sound important - Keith Vaz in Toytown.

Now of course Westminster backbenchers already have this system: the Standing Committees that (despite the name) are convened specifically to go through each piece of draft legislation, line by line.  They are allowed to propose amendments, too, if they dare: but are ruthlessly whipped and have barely any meaningful autonomous impact, mostly serving to give the government a bit of breathing-space to introduce its own amendments (via compliant back-benchers) as the inevitable nonsenses in a hastily-drafted Bill become apparent.  

So for Mili to offer Greater Scrutiny as his solution to the WLQ is a mighty insult to all concerned, and one that any politico feels all too keenly.  Is that the best you've got ?   A really tangible expression of pure political panic, of existential angst.  In the season of last-before-election Party Conferences, he needs above all to be declaring glorious, dividing-line policies.  And what's he got ?  A 'constitutional convention'; the minimum wage; a promise his wife will be out on the campaign trail; and scrutiny.

Joker
Now we at C@W have a distinctly limited regard for the strategy skills of George 'Genius' Osborne; but it occurs to me that these are the situations perfectly suited to his student-politics talents.  In parallel with several months of serious decision-making (and I still fondly hope someone is up to this challenge ...)  there is the childlishly enjoyable task of making Miliband wet himself in public.  It ought to be posssible to paint him into a very damp and uncomfortable corner for the remaining duration of the Parliament, and the old Camerosborne double act should be capable of that.

And maybe - just maybe - atone for their grotesque mis-step on Boundary Changes.  Because this is an existential crisis for the Tories, too.

ND 

Friday 19 September 2014

Scots win Independence, delayed by one year to 2017

If Cameron now wins the election narrowly in 2015, as is possible, there will be an EU Referendum in 2017. England will vote for withdrawal and Scotland will not. Scotland will then demand to be 'free' within the EU (oh, the irony) and the devolved Parliament will demand it.

Chances of happening, not that low really, 8-1 perhaps?

Opportunity Knocks

The aftermath of the referendum is one of those rare moments on the battlefield when a genuine opportunity presents itself for a decisive, pivotal move.  It falls to Cameron.

And he even looks up for it.  Is there someone, anyone in the whole of the Tory Party (or on its payroll) with the strategic nous to follow through ?

A man can hope ...

ND

Thursday 18 September 2014

Uninstalling Scotland

Free up a bit of disk space: a programme we no longer need, cluttering up the memory?



Or something worth keeping, just because ..?

Wednesday 17 September 2014

One more day Scotland!

Struggling against the weight of work to find time to post properly. However, later this week should ease up.

The polls are so close in the Scottish referendum that it looks to me like Yes will win as the polls won't have caught enough first time voters. Salmond's convincing performance opposite Brown and Milliband, as well as Cameron should still win through.

Not long to go....

Tuesday 16 September 2014

Phones4U administration - more internet driven destruction?

Who would have thought those nice price comparison websites with their silly adverts and easy to use functionality could destroy so much of the British way of life?

When I say Way of Life, I really mean it. After over 200 years ago now Napoleon tried to insult the British by saying they were a nation of shopkeepers... it has been a long time that the UK has had a huge part of the economy in retail - understandable for such a traditionally strong trading nation.

However, the Internet is the biggest economic and social invention of recent ages, likely that it will become the biggest driver of change in the history of the world, equalling the industrial revolution.

And in many respects, change has come quickly. Only 15 years ago we had the dotcom bubble and plenty of people laughing at the failure of the Internet start-ups. Of course, over time, every single prediction about the net has come true; we all have broadband, most people use it every single day, it accounts for a large and growing amount of expenditure, it has gone mobile. The predictions seem to be about 5 years wrong every time in terms of practicality, but they come true in the end.

Now with Phones4U, a retail option of offering multiple service providers is gone. Instead the remaining networks will either sell themselves or over the Internet. Hundreds of shops and employees are going. Carphone Warehouse merged with Dixons, so their own shops are going the same way.

Phone shops have been ubiquitous on UK High streets for 20 years and their small spaces are not ideal for other venues so they will prove hard units to fill.

My thoughts are what is next for the Internet monster:

1. Banks
2. Estate Agents
3. Job Agencies
4. Supermarkets
5. White Goods stores

I am unsure as to what remains in the very long-term apart from charity shops, coffee shops, bars and restaurants with a smattering of clothes shops.

Monday 15 September 2014

Sweden shows the path for UKIP

In a vision of the future, the election in Sweden over the weekend will I think presage exactly the same result that we are likely to have in the UK (assuming for a second a Scottish no vote). The left-wing Social Democrats have the most seats, beating out the right of centre Government, but not by too much.

They are well short of a majority and must now look to various minor parties to for a minority Government. The only major party that is in a position to suppor them is a 'right wing' anti-immigration party - the Sweden Democrats. A brief googling will show the remarkable similarities to UKIP of the Sweden Democrats. Hard to picture them as extreme right wing, more like just anti-immigration which has caused huge social change in Sweden and led partially to the ending of their Welfare economy too.

The Social Democrats are Labour. They did not increase their share of the vote by much, but the right wing lost 7% to Sweden Democrats, read UKIP.

So despite a poor campaign and poor offer the left wing centre party is really still at a historic low and will struggle to form a meaningful Government.

Strikingly this is exactly where the UK will be next year. With polling in the low 30%'s Ed Milliband will form either a slim majority or just fall short. With the Liberals halved in size the natural partner would be UKIP, who he won't touch. So the smashed Liberal Democrats may get to go into Government, but surely to bed hop will just finish the party?

Anyhow, it is a very accurate predictor of the UK political scene to come and must make for a further headache for David Cameron.

Sewage, Garbage & Keynes

Outpouring
The long-awaited but much contested London 'super-sewer' has been approved by Eric Pickles, to no-one's great surprise.  Thames Water, of course, are telling stories of how much cleaner the river will be when the 'Thames Tideway Tunnel' provides the capacity required to properly handle the extra volumes of water from severe rainstorms.

In recent months I have been told, seperately by a civil engineer and a financier, that this is so much garbage.  (Incidentally, it's fairly clear that both their private vested interests are best served by the project going ahead - indeed, by any massive project going ahead.)  The reason is that, thanks to new planning & building standards as part of a very successful programme called SuDs - Sustainable Urban Drainage Systems - the overload on the existing system at times of sudden downpours has been reducing steadily, and will reduce further as more and more developments are made using these techniques.  The spec for the super-sewer was drawn up before SuDS really started in earnest: comparable to investing in a scheme for disposing of the 'ever-increasing' amounts of horse manure produced by all those horse-drawn vehicles on the streets of London Town.

No light at the end
But let's not get hung up on the facts.  We've commented here before that the UK's substantial civil engineering industry is heavily dependent on a rolling rogramme of public giga-projects: Channel Tunnel, Jubilee Line, London Ring Main, T5, Olympics, Crossrail, HS2 etc etc. In other words Keynes, as ever, still rules.  We may be fairly sure a large part of the insouciance with which Whitehall as a whole accommodates the nonsense of windfarms is all part of the same unstated policy.  And of course windfarms are even better than digging holes & filling them back in, because they cause systemic problems that trigger the next round of projects!  Just a shame (I hear you chorus) that such a large proportion of the money is spent with foreign firms ...
 
And all with almost-guaranteed rates of return: and (mostly) paid for by consumers on their bills - what's not to like ?  The likes of National Grid and Thames Water couldn't survive without this ceaseless round of 'activity'.   

Light at the end of the tunnels ?  There is no end.

ND

Friday 12 September 2014

Change is Coming to the UK, in comedy form

I don't know about everyone else but this Scottish referendum malarkey is quite the most enjoyable political event to watch from a far as I can remember.

As a distraction for the rather sad and uncertain wide world it is great, here are the highlights for me thus far:

1 - It's all about Hate; hate of the English and the Tories. Scotland already has its own parliament, its own NHS, its own tax raising powers (never used), it own currency notes, its own national football and other international teams, its own culture, its own legal code. It's a Country, it just does not like having remote Tory Government in Europe, although it also has a right wing led Government in Europe and does not complain about that. The undercurrent of anti-English hate and justification for it is hilarious.

2 - Yes or No, its the end of the Union. With more powers to Scotland surely even our pathetic set of Westminster politicians are going to struggle not to sort out the West Lothian question. This means split Government for the UK and an end to Labour being able to pass legislation in England with no majority in the Country. That will be fun, if the Politicians dodge this, then UKIP will make great hay.

3 - All of Cameron, Milliband and Clegg are immensely unpopular in their different ways. Normally one party manages to lead with a duffer, but at the moment we have three duff leaders all in their Prime. The Peter principle of professional politicians has evolved to fulfil its destiny.

4 - One small poll this way or that has moved markets, I even make £20 betting just on the moves to Yes after a single poll. To see the media and politicians gripped like this is hysterical.

Really, it will be sad next Thursday when it is all over No have won (keep going Yes Scotland, my heart is with you, but my head says No will do it 55%-45%).

5 - But it won't be over will it. Anti-English Salmond will still be First Minister or his equally shouty deputy Sturgeon, the vote will be close and there will be demands for a re-count and re-run etc. So maybe that will provide us with some enjoyment for the Winter months.

Thursday 11 September 2014

An Early Job Application From Ed Davey

Here's someone who'd like to think he's in with a shout of a nice job after the next election: 
 "I do pay tribute to the previous Government. Because the political consensus constructed around the 2008 Climate Change Act was not a foregone conclusion"
Ah yes, that would be Ed Davey launching the UK's strategy for the next round of international  climate change waffle, praising Ed "socially unacceptable to oppose windfarms" Miliband.  

There is certainly a lot of socially unacceptable wind in the air.

ND

Wednesday 10 September 2014

Can We All Have Jobs at the FT?

There's a chap called Nick Butler at the FT who writes a weekly energy blog.  I presume he draws a salary.  Now we all know how tough it is to write one blog post a week - sheesh, sometimes I can hardly manage two !

Anyhow, he's noticed the oil price is falling, just like we have.  So what does he write ?  Back To Basics For The Energy Sector, that's what.   He reckons that oil companies will be in a spot of bother, Sherlock, and this is his sage advice, his hard-hitting 4-point plan (I am not making this up.)
  1. Cut Costs:  "goodbye to the corporate jets, the lavish expenses and the padded leather of town centre offices
  2. Cut assumptions about future price rises (sic): consider a $80 scenario
  3. Drop projects that don't fly at $80
  4. More R&D on cost-cutting technology
Cut costs, oh wow !  $80 - how radical is that ?  - the insight, the wisdom, the sheer creativity and innovation of it !  Oil company CEOs everywhere will be ordering extra copies of the FT so that every manager can have her own !

The R&D one made me laugh out loud.  There cannot be an industry on the planet that puts more effort and money into radical cost-cutting technologies.  Single-lift platforms; horizontal drilling; unmanned facilities; the list goes on.  This is the industry that survived $10 as recently as 1998.  

The only oil companies that can't see life at anything less than $120 are the smallest, most desperate exploration-only shops, who will simply have to relinquish their acreage to someone bigger.  And life will go on.

Meanwhile, I understand the newspaper business isn't so profitable these days: and if the FT wants any cost-cutting suggestions ...

ND

Tuesday 9 September 2014

Oil price is weak on fundamentals

A previous post on oil prices generated a comment on why is this happening. As ever there are several factors, but the outlook for peak oil and ever increasing prices has really changed in the last few years.

Firstly, US production has increased hugely and is expected to further. Imports are down to 9 million barrels a day and production is forecast to grow. Plus growth of shale gas is helping to reduce the need for oil imports. In addition, Europe's slowing economy and changing supply mix is reducing demand. This does not quite offset growth in demand from developing Countries, but demand growth is 0.2 million barrels a day average over the year, which is basically 0.3% annual growth at the moment.

This is whilst Libyan and Iranian supplies are offline, amazingly Iraqi production averages are the same since ISIS invaded, Russia too has maintained output.

Whilst this macro level picture is of a world not flooded with oil, but stable nonetheless, there are a lot of micro factors at work. See today Ryanair buying 100 Boeing MAX 737's. These planes carry more passengers and are 18% more fuel efficient than the planes they replace. Ryanair spends €2 billion a year on jet fuel, so if they manage to replace their whole fleet its a €380 million saving. Equally it is 20 million less tons of jet fuel needed per year - equivalent to 150 barrels of oil per day - which is about 0.3% of global output of jet fuel. And this is just one company.

With the move towards more efficient engines, improved power stations and more renewables, plus the shale oil and gas revolution, it is likely than until war hits Saudi and Qatar, the oil price will remain weaker for some time to come.

Monday 8 September 2014

Meanwhile, In The Real World ... $99.50

While Westminster and Edinburgh dance to the SNP's childish jig, here's a graph that will be making Snake-Oil Salmond a little leery. 


Yep, $100 has been breached.  Could be some resistance here of course, but maybe not enough for those who look to their oil revenues for political underpinning.

Salmond ?  Yes, but he's a silly sideshow.  It's Putin for whom $99 is a serious, serious nightmare:  clean underpants, please, for the gentleman in the Kremlin.

What will he do now ?

ND

Prospect of is already Independent Scotland already boosting the UK economy as a whole


The Pound has dropped to a low of $1.61 to the Dollar - its lowest for 3 months. it year low is at £1.57 so it is well on the way to being at this level or better with just 10 days until the Scottish referendum result.

The Scottish referendum is the gift that keeps on giving, not only may the UK soon be shot of its Socialist extremists, but also the 20% over value of the Pound (its trade weight is currently 83 against a basket of currencies, this implies a near 20% over-valuation) will come off.

This will cause imports to be more expensive and so drive inflation, but at the same time will help an export sector that has run into a wall in 2014 in the face of an over-expensive currency rate driven not by fundamentals but by the choice of the Pound as a safe haven currency.

Perhaps the loss of Scotland will permanently diminish the Pound (I doubt it really, Scotland is 8% of the economy at most) as a reserve currency. This would have good benefits for the economy with almost no downsides - those only being that larger corporate transactions would have to move to dollars or euro's, but not matter. The status of long-dated gilts will in reality underpin Sterling's utility for decades to come.

Moreover, the FTSE is harmed by the earnings of so many of its companies being in dollars which is then reflected into poor returns due to currency exchange. The move down of the Pound will improve the overall PE ratio of the FTSE. Of course a high priced FTSE will lose some lustre too in the run up to the referendum.

We can only hope this continues and the whole show is not ruined by a 'No' vote in the election on the 19th September which will return us to the status quo position and represent a significant detrimental adjustment.

CU

Tanks and Harriers

Can't resist giving these plates an extra spin or two.

Part the 1st: Tanks  -  an important point that's been missed in discussion so far:  tanks are for taking the offensive.  There are plenty of satisfactory defensive ways of defeating the other guy's tanks: with current technology, AT helicopters are #1 choice but these things have their cycles and in future years it may be flocks of cheap light drones. 

But for offensive operations in the field you need a good MBT, classically defined by speed & maneouverability + firepower + ability to take a hit from the small and medium stuff that panicky, out-maneouvred defenders will chuck at it.   [Mr W's point about protection against radiation is a good one, and he could have added protection against CW as well.  These are extensions of the above-specified protection against general battlefield shit.]

Why are tanks needed?  have a look at my post of last weekend which, by the way, fairly well predicted what happened last week (*takes bow*)  to wit, the Russsians made as much of a grab as they could in a few hours.  An armoured grab.  Only armour (or helo-mounted heavy infantry) can do this reliably.  Paratroops, and heavy APC-mounted infantry can each make a case for being second-choice if they are (a) operating against very, very thin defences and (b) lucky.  But the swift, land-based smash-and-grab offensive (and I do mean both smash, and grab) must be spearheaded by tanks, followed through quickly by infantry.

Not surprising that this basic point has been missed because the UK hasn't been thinking in offensive mode for a very, very long time (Kuwait 1991, I'd say, given how poorly we performed in Iraq the second time around).  So the answer to BQ's question starts with:  are we going on the land-offensive any time soon ?   Answers on a postcard ...

BTW, some may be inclined to repy: OK, then why did defence-oriented BAOR have so many MBTs ?  There are several answers, of which the 3rd is the most interesting.  

(a) armies traditionally prepare to fight the last war instead of the next one. In pre-1989 BAOR, 'Germany' to us meant 1945 = offensive ops;

(b) cavalry always clings to tradition - and is indulged - even more than anyone else;

(c) there were some very attack-minded generals in the NATO of the 1970's and 1980's, surprising though this may sound (US, British and particularly German).  I may write another post on this for a quiet weekend.

Part the 2nd: Harriers  - SW is of course right to note how difficult and unforgiving they are (were) to fly - even more difficult than helicopters.  This is actually a major failing.  One of the key principles of armament is: make it robust and (relatively) simple to use & maintain because it needs to be used by ordinary mortals under great stress.  Many a "fine weapons system" has surprised its owners (and not in a good way) when failing to meet these criteria.

(One of the worst experiences of my life was watching a Harrier squadron CO fly into a tree on take-off, he did not survive.)  

Obviously the RAF and RN made good operational use of the Harrier over the years. In the Falklands it was of course faute de mieux: and I wonder if Woodward might have preferred the old Ark Royal with a full complement of F4s (and Gannet AEWs) ?  It's hard to avoid suggesting the Harrier's achievements were against 2nd division opposition.  The many BAOR Harrier pilots I knew gave themselves no chance against the SA assets integral to GSFG divisions; and the 3-squadron RAFG 'Harrier Force' was assumed to be reduced to zero effectiveness in under 3 days of all-out combat.

Postscript:  SW is absolutely right about RAF / RN rivalry, a death-match that's been running for close on a century now.  I went to a dinner last week and had my ear bent for an hour by a sailor on exactly this topic. 

ND

Saturday 6 September 2014

YouGov poll has Yes leading by 1% - A look to the future ?




This historic video was taken in 2019 at the height of the "Freezing Cold " war. 
Hadrian's Wall was almost complete along the entire border with England.
In 2018, to prevent the continuing flight of North Britons to South Briton the Socialist-Nationalist government of the People's Democratic Republic of Scotland rebuilt the ancient wall across the border. 
Most famously at Berwick-upon-Tweed, where redrawn border concessions had been agreed upon partition in 2017, and so put the city on the very border. The wall now cut across, and so divided the city, into Socialist and Capitalist halves.
The wall went across roads, railways, tramlines, electricity cables and water pipes. The wall extended right along the border. In some places being high concrete blocks in others barbed wire. But all along the frontier on the Northern side were searchlights, watchtowers, guard dogs and thousands of land mines.
Access across was severely restricted. There were a handful of checkpoints that citizens could cross at, notably Checkpoint Hamish. However those over the age of 65 were permitted to travel to the south as they were of no further service to the state. In practice this meant for 95% of the population of Scotland could leave.


A 'cold climate' war existed between England and Scotland for 7 years, until political pressure, chronic shortages, economic collapse led to the fall of Socialist-Nationalism in what is now the Northern Territory.

Largely forgotten today, but at one time tens of soldiers stood ready on both sides of the wall, preparing for the outbreak of war. 


Notable incidents during the 'freezing cold war' :

June 2017 - The Shetland Airlift
August 2018 - Building of the Tartan Curtain
April 2018 - Start of the International Lace Race
July 2019 Formation of the Welshpool Pact
September 2020 - Socialist-Nationalist invasion of the Isle of Man
May 2023 The Kirkcaldy missile crisis
October 2024 Fall of the Gretna Wall



Notable books and films set during the very, very cold war.:

The guy who went up to the cold.
Letter to Holyrood
Our man in Horton Kirby
From Renfrew with love.
The Hunt for Red O'Donnell
The Bedsocks incident
Ice Station Musselburgh
Slimey's People


Incidents at the wall


  • Little Mix 'Freedom' concert causes riots on the north side of the wall as thousands gather.
  • Pope declares Scottish Whiskey an 'evil' and tosses bottle of Glenfiddich over the wall into the Northern sector.
  • During an international friendly at Wembley Stadium, Gordon Strachan and the Scottish Football team defect.
  • Nigel Farage revealed as a Major in the First Chief Directorate of the SNP. Leader of the Dulwich College five, a  group of double agents that also contained Daniel Hannan, Douglas Carswell, Theresa May and a fifth member who has never been identified. Nigel is granted asylum in Glasgow and promoted to colonel.
  • Outbreak of the Vietlamb War - SNP directly funds and equips the Welsh Insurgency leading to civil war and reintroduction of conscription throughout England.
  • Prime Minister Boris Johnson urges President Sturgeon to "erm..erm..oh golly..erm..tear down..this..erm..whassit-thingey..!"


Friday 5 September 2014

How many tanks should the UK have ?


Commentators in the Telegraph regularly complain that 'Commie Cameron' has left the UK dangerously exposed to a foreign invasion. Tank number cuts are usually cited .

How many tanks should the UK have ?
I really don't know.  I suppose it depends on what you intend to do with them.
To repel an invasion of our shores from a newly Independent Scotland? Probably 10 should do.

Our other major enemies at present - Isis. - They have a handful, so probably 20-50 should be enough. Say 100 to be on the safe side and to offset amour's notouriously poor serviceability.



According to this chart, from 2013, before the cuts to the military had taken effect, the UK had 407 tanks. Defined as an armoured vehicle, with turret and a main armament designed to fight other armour, 407 includes all the Challenger IIs and sounds like a pretty decent number. Probably too many really. Who are we going to fight, on our own, who has more than 400 tanks?
Russia tops the Tank strength table by country chart with 15,500 AFV's, but we wouldn't fight Russia on our own, if at all.

I don't like this chart. It looks wrong. Its supposed to use the CIA factbook data, but other sources I can find also give use same CIA data.
The chart says Ukraine has 4000+ tanks. But that must be from around 2000. Today the figure is more like 650, according to wiki. Ukraine's Tank Graveyard was featured in a Daily Mail story not long ago. Lines of disused scrap armour. Syria's 5000 might have been correct pre-civil war. They never threw any away so had loads of T-62 and earlier types.

 UK is ranked 39th on armour, but we are, using same CIA factbook source, 5th in the world for military spending. Something doesn't add up.

In 2013 the BBC, doing a 'why does the army have more horses than tanks' piece, found that there were 334 tanks {and 501 horses}.

Lord Dannatt, former head of the British Army, said recently that by 2015, UK will deploy just 227 tanks.
That could be a problem if Syria really does still have 4950 tanks, as stated on that data. 
Taking out our tanks on refits, repairs, maintenance, training, on Nato duty, and whatnot, doesn't leave very many, even with a maximum effort. 227 seems much too few.

So the army must have been overjoyed when at the NATO conference in Wales the Brass have asked for more tanks for Nato. And the UK has responded with a £3.5bn order for 589 SCOUT SV vehicles.
WOW! Champagne day for the army!.

But these are scout vehicles?  589 scouts? Two scouts for each MBT ? Or are these APC's, being designated as Tanks?

Someone with greater knowledge needed to explain it to us. Will we now have some 700 odd light and 100 heavy tanks? Or what?



Thursday 4 September 2014

FTSE nears 1999 highs, but for how long?


Of all the times to do this, at the beginning of September, on anniversary of the Wall Street Crash no less.

As most people know, September is traditionally when we have big stock market corrections, macro conditions in the world at the moment are the most perilous politically in my lifetime. Economically, China is slowing, the Eurozone really feeling the effect of sanctions whilst UK and USA run along on QE funded property fantasies.

Whilst it seems unlikely there should be a huge crash now, a correction is certain in September and October - will the FTSE finish the year at all time highs - it should on any kind of historically analysis (on an inflation basis we are 30% off real highs anyway).

Somehow I doubt it though, I can see the year ending for the market at around 6700-6800 after an Xmas recovery from a very rocky patch later this year.

Next year I foresee being very bearish.

*And this is without a Yes vote in the Scottish referendum which would be around 5% off the FTSE in the short term I would imagine.

Wednesday 3 September 2014

The Scottish Currency Union delusion

With the momentum strongly with the Yes campaign, Scotland could be hurtling towards independence. Certainly the passions North of the Border have been aroused and the vote may well get close to 80% turnout. On that basis it would seem more likely that Yes might just squeak a win.

In trying to defend the status quo, the political party leaders at Westminster have been determined to say that under no circumstances will there be a full currency Union. It has been a great tool for the campaign, as it focus' on the heads and not the hearts. The Heart felt vote will always be for an Independent nation, as its is more aspirational than more of the same.

However, why, as a person living in Southern England, do we care if there is a Currency Union. Scotland demands a seat at the Bank of England as its price. Fine, let is have one - after all the MPC is a vote of 12, Scotland having one is about right in terms of economic contribution. Scotland will not dictate the votes on interest rates.

Scotland too would have to sign up to strictures around public spending, Tory ones in times of a Tory Government and Labour ones in times of a Labour Government. That means they would have limited impact on their macro spending.

So in effect, nothing would really change economically for the Scots or have any real impact on the UK as it remained.

Currency Union does not really hold any big bad macro effects, except if Scotland went off the rails and tried to print its own money etc - something that even Greece could not do. Plus over time, the Scots would issue their own debt and so would have the markets act directly to help persuade a Scots Government of the nature of debt and spending.

As such, I think all the Westminster MP's are lying and in the end if the vote is Yes then the likelihood is there will be a Currency Union - not having one is unnecessarily spiteful and also probably against the terms of the treaty signed when the referendum was first agreed to.

Without a Currency Union the Scots economy faces a very uncertain and bleak future, that much is true.

Tuesday 2 September 2014

Privatisation, Taxation and Monopoly

Returning to the Grauniad Privatisation piece and our discussion of a couple of weeks ago: one of our commenters, Andrew, picked up on the writer's summation, which revolved around a point about taxation.  Here's a key extract from the end of the essay. 
A tax is generally thought of as something that only a government can levy, but this is a semantic distortion that favours the free market belief system. If a payment to an authority, public or private, is compulsory, it's a tax. We can't do without electricity; the electricity bill is an electricity tax. We can't do without water; the water bill is a water tax. Some people can get by without railways, and some can't; they pay the rail tax. Students pay the university tax. The meta-privatisation is the privatisation of the tax system itself ...  The commodity that makes water and power cables and airports valuable to an investor, foreign or otherwise, is the people who have no choice but to use them. We have no choice but to pay the price the toll-keepers charge. We are a human revenue stream; we are being made tenants in our own land, defined by the string of private fees we pay to exist here. 
Well.  Firstly, his list is silly, mixing categories that should be kept separate. If can't do without it is to be a criterion, what about food then ?  From first-hand experience, the public bakeries in Russia were pretty awful: everyone tried to get their bread elsewhere.  The only tax involved in food provision is VAT (if any, generally not) and perhaps a payroll tax if it hits supermarkets particularly.  The margin extracted by Mr Tesco is subject to competitive pressure.  So can't do without it isn't right; and to include electricity in with the rest is only fair if you've proved or decided that competition is impossible in that sector.  I say it's entirely possible - though also entirely fair to debate (as we often do) the regulatory shortcomings we currently suffer from.  Is he proposing 'electricity-free-at-the-point-of-use', like health services ?  We know where that leads.  Airports shouldn't be included either: his list only makes sense if it sticks to genuine 'natural monopolies'.  

Secondly, we all agree that monopolies need toughing-up rigorously on all occasions (see earlier post).  Everyone knows that monopolies are what every evil rent-seeker desires above all else - they have changed hands for large sums of money or other consideration at every point in history. What's that got to do with privatisation?  Again, it's a debate about regulation (and perhaps social subsidies for impoverished energy users etc), not private ownership.  Any 'authority' in charge of a true monopoly service, however 'owned', is prone to charging too much - call it tax, rent or whatever you like.  Why does the writer assume publicly-owned monopolies will be the more likely to act 'progressively'?  It  might be true if they are state-subsidised, or have a 'progressive' pricing policy - but again, this has little to do with the main thrust.  More significantly, experience - see that earlier post again - is that they charge wildly too much in absolute terms because they are so staggeringly inefficient.

(Historical note: British Gas had its de jure monopoly taken away some years before it was privatised.  this altered precisely nothing.  It was then sold off with its de facto monopoly intact: again, this achieved nothing - at first.  It was only when the regulator took the gloves off that the glacier started to melt - with very striking and highly beneficial consequences for consumers.  By the way, the old BG did indeed have a 'progressive' pricing policy, entirely of its own devising and with no statutory mandate.  It decided that medium-sized industrial customers would subsidise both the very largest industrials, and the residential customers.  But it charged everyone more than was necessary, as eventually became evident.)

So - we will be 'taxed' by monopoly services however they are owned.  Minimising the tax is the name of the game.  If you want some examples of really outrageous 'taxes' on which no-one ever gave me any choice, how about:
  • the extra amount on my home insurance to cover the activities of burglars
  • the extra on my car insurance to finance the 'crash-for-cash' and 'imaginary whiplash' brigade
  • the extra on my general tax bill to pay for treating pie-munchers on the NHS 
  • [ ... your favourite example here ... ]
The taxation argument is entirely spurious.  The essential services will get paid for anyhow, and the primary issue is to find whatever keeps the costs lowest.  All empirical evidence points to nationalisation being a very poor approach.

ND

Monday 1 September 2014

Donetsk: Putin Speaks

The city was founded in 1869 by a Welsh businessman, John Hughes (sic).  In 1924 it was renamed Stalino.  

- Wiki


You learn something every day.

ND

The coursing damage of oil money

Norway, the only Country in the world ever not to have totally squandered its oil wealth. Virtually every other country has become exceedingly corrupt on the back of oil wealth, although how much of a contribution it makes to the overall economy has a great bearing too.

I note the US has bouts of being unduly affected by major oil and gas effects, from way back in time with Standard Oil, to the Halliburton of today. But oil is not the sole contributor to the US economy, so although effective in pushing foreign policy agendas and such like, it is rarely totally dominant.

Other countries fair less well, the states of Africa become kleptocracies for decades and only finally now are making some progress, having learned the hard way from Chinese intervention and constant civil war. But the greatest oil state in Africa, Nigeria, is still very corrupt and hosts Boko Haram - the south of the Country, Imo, is poisoned beyond recognition and resembles parts of China more than Africa's beauty.

The main threats, rapidly growing, in the world today focus around the Sunni sponsored growth of Whabbist Islam, Shia countering sponsored by Iran and Russian attempts to re-create Greater Russia.

All of these are funded, not so much directly but States (Iran being the exception), but by wealthy oligarchs. Naive Qatari and Saudi shaikhs channelled the money to build Al-Nusra in Syria which in turn spawned IS. They still do, the army of IS being paid for by these funds in the main and the mercenaries fighting for them (its never all about religion is it, remember the crusades) being paid up to $10,000 a month to fight. No wonder IS managed to amalgamate all the disparate Syrian and Iraqi forces - the side with the richest battalions wins.

Outside of the Syria-Iraq disaster, but sadly forgotten on the sidelines, is the sad case of Libya, with warlords fighting over key resources and the key oil terminal at Ras Lanuf for funding. Libya has entered firmly into failed state category. the only saving grace for the world is that the Libyan population is small - half the size of London and similar to Scotland, so the effect of a rapidly growing diaspora will be minor.

In Ukraine, Oligarchs were first responsible for raping the country, then fighting to get their placemen elected and thence now to defending or attacking Eastern Ukraine. Some of the oligarchs are Russian and some are Ukrainian. Their money and power,  mainly taken from either oil or coal mining, allows them more power than State actors. Putin himself plays the role of the Oligarch personified as a State actor, having subsumed the nascent democracy of Russia.

So much of the difficulty of ending the conflicts at the moment is to do with the funding and support for them. Much as Israel/Palestine has always had backers on both sides, wars that continue this way mean money for the those involved. They are harder to end than more conventional state wars because the financial conduits are hard to close.

Moreover, the rich men who support the wars have little stake in the post-war settlement. They care nothing of the country or people whom they fund to fight (like Gaza these past sad years). being removed, personally they are at no risk.

All of these men became able to influence through the immense power of controlling oil resources. I am no leftie nor greenie, but the world is a harder, sadder place for this and with resources running out over time the fighting over them and with their riches will surely only become tougher.

The world was a better place when they wasted their money on wine, yachts and women.