Tuesday, 22 August 2017

Scope for Mischief Here

A document I would very much like to read is the baleful Hinkley Point contract awarded to EDF.  We've seen about 90% of it (as far as one can tell), and that was quite bad enough - but the really juicy stuff was redacted.

There is however someone who has a full copy (or perhaps full-er ...)  - in the European Commission!**
UK calls on EU to prevent leaks of sensitive information after Brexit: Demand for continued protection on departure highlights growing mistrust between London and Brussels 
We may get to see this document after all !

ND 
_______
** they had to approve it, for reasons of 'state aid' 

Monday, 21 August 2017

The end of QE remains unplanned - why?

There is an interesting article by Douglas Carswell on Unherd today.


In it he shows both his grasp of the situation and also the lack of any nous to deal with it.


Correctly, he identifies QE as being one of the main drivers of social ill over the past decade. The rich indeed have got richer through no effort other than pure financial alchemy - assets have gone up in price, if you owned assets, then yippee!


Meanwhile debt has been too cheap, now everyone has debt and even the Government is overly keen on saddling people such as students with debt. The Government has both too much deficit and debt - as do most around Europe.


That this is the fault of the Central Bankers is undeniable - conservative types, as you would want, they have done very little for the past 5 years. Last year in the UK they even decreased rates further.


Worse, there is still no plan for unwinding QE, in an off-guard moment last year one leave to the Bank was busily promoting the opposite - suggesting QE was here forever and interest rates could never be raised back to what were considered normal levels.


I find this very hard to buy, it is the classic "this time, its different" mantra that never works out as its proponents say. What happened was that the economies of the West, loaded by too much private sector debt due to the banking bubble, collapsed and to avoid destruction, the Government took on the debt.


Thanks to that, the Government's are prepared to wait a generation or two for the debt to inflate away (this time via currency depreciation, hence the currency depreciation war of the past 7 years). So there is limited immediate pain. I can see why civil service mandarins and central bankers think this is the best way forward, which for them it is. It sees continuity of service for themselves and their class.


Where Carswell goes well off target is endorsing the mad Labour plans for more debt and financial alchemy to double-down on the mistakes of the past! How even more QE is supposed to fix the current problems is beyond me - asset prices (this time of chosen assets, remember Gordon Brown and the Gold sale!) would still rise and the side effect maybe some more infrastructure - but the main event would be crippling Japan style debt.


The only sensible course is to wean us off QE. This will be painful, reversing QE will reduce Government revenue, which means less spending, because today it is getting on for £10 billion in Government income - all from money printed by its own bank and lent to itself.


We can't raise rates too high, as that affects those most hurt by the debt bubble, those without assets. We will likely need higher taxes on capital gains, including houses, to make up the hole in Government finances.


I don't like ever advocating tax rises, so I won't - the balance to increasing capital gains taxes must be reducing income taxes further - perhaps not quite in balance as their is QE to be unwound and a deficit to clear. But a re-basing of the tax system based on the current economic environment is long-overdue. Really, the most surprising thing is that is a necessity of the change in Central Bank monetary policy and you would think they might raise is sometime, that they don't is a bug of the system where monetary and fiscal oversight are separated.

Saturday, 19 August 2017

Weekend Yarn: An Almighty Fail


Yesterday I poked fun at the non-existent proof-reading skills of my roofer.  But it isn't only humble tradesmen that can come unstuck: it can happen to exalted professionals as well.  Harken to one of Old Drew's war-stories  - and mark well ... 


 *  *  *  *  *

Twenty-five years ago during the first 'Dash for Gas', a sellers' market prevailed for a while in natural gas.  One of the very largest oil-and-gas producers who shall remain nameless, let's call it *xx**,  interpreted this cyclical state of affairs as a licence for unbridled commercial arrogance, and had a juicy chunk of gas for sale.  They put it out to market, telling prospective buyers that the sale would be under the terms of a long-term contract they'd drafted themselves, and the only matter for negotiation was the price:  all other contractual aspects would be per the *xx** diktat.  

This was not the norm: such contracts are very long and generally bespoke, and the details would ordinarily be up for genuine bilateral negotiation.  Several potential buyers read the uncompromising *xx** document and politely observed that the text wasn't beyond improvement, for the benefit of all parties.  They were shown the door.  The winning bidder accordingly sent its negotiators and lawyers simply to check the agreed price had been correctly entered in the space provided, and to conduct the usual round-table proof-reading of the 250-page document.  (Half a dozen people sit there reading one page each in turn, out loud, and it is hoped that typos and other cock-ups will thereby be nailed.)

At one point during proof-reading, progress was momentarily halted when the reader of the page in question read out the phrase "... the either Party ...".  Hoho!, everyone said - that's not English, it's a cock-up!  So they solemnly eradicated the otiose "the" and completed their monotonous task.

A few years later the inevitable happened: the sellers' market became a buyers' market and this particular gas contract became horribly out-of-the-money for the buyer - so much so, the buyer got into financial difficulties and was taken over.  The acquirer of said company set the lawyers to work on the dire contract ... and what did they find?
"Change of Control:  In the event of a change of control of a Party, either Party may terminate this Agreement."
Gotcha!  And the acquirer solemnly served a termination notice.  

Of course, *xx** rushed to the courts claiming Manifest Error: obviously it should have read "the other Party".  Well, usually it would.  But, consistent with the glories of the Common Law, since both buyer and seller were big companies well able to look after themselves, the words of the contract said what they said and the court rightly threw out their case.

And indeed, that was that: with one bound, the acquirer was free of the burdensome deal.  Back at *xx** - a firm well-known for control-freakery - the very senior head of the gas division was rather publicly moved to post that (how shall we put it?) didn't represent a promotion.

There but for the Grace of God ..?  Hard to suppress a chuckle, though, in the circumstances.  Read the bloody small print!  Carefully!!

ND

Friday, 18 August 2017

Always Read The Small Print

One day when I was newly-minted one-pip in the army, one of my soldiers came to me with a form that needed initialling by an officer.  Since this happened at least twenty times a day, it was no big deal.  I could see it wasn't the usual permit for a military vehicle journey or weekend out of barracks - it was something to do with an application for a car loan - but I signed it anyway, without reading the finer details.

It came back to bite me on the bum in less than 48 hours.  I'd inadventently claimed to be "assistant paymaster or equivalent" and was in for a bollocking at Regimental HQ.  Needless to say I made a vow ... 

When, many years later, I found myself dealing ginormous energy contracts, I carried this resolution through by being the annoying negotiator who'd actually read the two-thirds of the 250-page contract that is 'legal boilerplate'.  There'd always be something being passed across in there.  It always makes me snort when advertisers and salespeople people wave airily at the "T's & C's" as if they are some quaint and meaningless decorative runes that appear by convention on ceremonial bits of paper that are scattered around like confetti to celebrate the closing of the deal.  FFS - the "T's & C's" are the deal ! 

Anyhow, to get to the point:  we are having some roofing works done at Schloss Drew, and our shortlisted contractor handed over the usual duplicating-paper sheet with illegible small-print in 6-point (grey) on the back.   Fortunately, my scanner and OCR software are up to the job, and this is just one example of what I found.



Sic !  Suffice to say, the works will be carried out under a contract of my own devising.   I imagine the said contractor (who self-evidently has no more read his own documents than any of his previous clients) will be using my version in the future - and he'll not suffer too much in the event of dispute, since I am nothing if not a reasonable person ...

ND

Wednesday, 16 August 2017

No change in Ireland for Brexit - or is there?

In a week where some demented person having a breakdown is merrily providing the press with all sorts of nonsense stories, reality is slow to creep back to the table.


Just as James Chapman accuses David Davis of being a part-time layabout, he comes forward with all the proposals the EU has been asking for.


Interestingly, the UK Government has chosen the strategy that I find works really well. Admit defeat, agree to the enemy demands and then see what they do. On Ireland, the proposal is that nothing much changes with the exception of some agri-tariffs.


This meets perfectly what the EU wanted; but its a nightmare for Ireland - effectively it means in theory they could end up the "The Jungle" in Ireland, either at the NI border or in NI itself.


To me this is super idea - no immigrant is going to want to hang around forever in the hideous physical and social climate of Northern Ireland - it is like our own version of the successful, but much maligned, Australian strategy of holding immigrants in an off-shore processing centre. 


So we push most of the problems back to the EU by being broadly compliant with their demands. I like this strategy, there are many ways for it to fail - basically, the EU can always be unreasonable whatever we decide to do, given we are leaving and Article 50 is triggered, but this is nice approach.


Shame everyone is too busy slagging off the entire Government to notice or to give it any credit when it does get things right.

Tuesday, 15 August 2017

Power Play or Shell Game?

Eyebrows should be raised as Shell moves into the power market.  Why?  Because oil companies have been proven to be crap at electricity.  That includes Shell itself first time around when they - and BP, and Total, and Statoil, and Conoco, and Amerada Hess ... - tried, and screwed it up (this was in the '90s and early 00's).

It looked so logical, so easy.  They were (and are) big, big companies - energy specialists, no less, who had done OK in the gas markets when they got started around the globe in the 80's and 90's; they knew about trading and risk-management and marketing; they had ultra-credible brand names for the sector.

At least, that's what they thought.   But, to make a long story short, similarities notwithstanding it turns out trading electricity is an order of magnitude more difficult than gas.   There have only been two non-electricity companies to make a serious fist of the power market via organic development: Centrica / British Gas and the mighty Enron, both originally gas players.  (If someone points to Gaz de France - now 'Engie' - or Gazprom's European trading vehicle GM&T, the response is that neither of these moves into power were organic.  GdF simply bought Electrabel; and GM&T hired big teams of existing power specialists (and in any event haven't made waves in the power sector).)

So now Shell are trying again.  They are sticking to the easy segment of the market - sales to industrial customers - and can probably make a go of it if they hire enough of the right people (including at the top: will they make the mistake of assuming one of the old senior oil hands can manage this electricity stuff?).  They have certainly let fly with the PR: see that mighty FT puff-piece linked above, and this gullible nonsense:
"Shell becomes latest energy disruptor: the UK’s energy industry is braced for change as the world’s second-largest oil and gas company is to supply electricity"
The FT piece (Nick Butler, natch: they obviously gave him one of those really nice lunches) is just as sycophantic: 
"Shell’s decision to sell electricity direct to industrial customers is an intelligent and creative one ... Shell has been developing an extensive range of gas assets, with more to come. In what has become a buyer’s market it is logical to get closer to the customer — establishing long-term deals that can soak up the supply ... Shell is likely to be a supplier of choice for industrial and commercial consumers and potentially capable of shaping prices"
Ho hum, let's see how they do.  "Soaking up supply" is a crass business concept in a commodity market.  "Supplier of choice"?  In yer dreams, Shell.  "Shaping prices"?  Nope, just selling on price to buy market share, like any other new entrant in a commodity sector.  When Gazprom entered the industrial market they needed to take a massive haircut as buyers simply laughed and pocketed the windfall while it lasted - which in their case was several years.  Butler actually admits as much: "prices presumably set at a discount to the market". 

Yup. A short-lived price war.  Not so much a disruption as a harmless diversion.   

ND

Sunday, 13 August 2017

Those Oh-So-Rational Germans

A primary go-to website for energy buffs is the excellent Energy Matters blog run by Euan Mearns and Roger Andrews, two first-rate analysts who somehow find time to keep their tremendous material pumping out for free.  Go and have a poke around, if you haven't been there before.  One of their regular features is a handy news round-up each week, from which we obtain this neat evidence of collective madness in Germany.


Yes, (a) the Germans are big fans of their ridiculous 'energy policy' (which sees them paying extravagant electricity prices), and at the same time (b) German CO2 emissions continue to rise.  Expensive and futile virtue-signalling by anyone's standards.

I am sure Greek citizens are equally delighted that their economy is in thrall to German bankers. 

(Meanwhile, in other news Cuadrilla et al are on the march and the shale drilling is underway in N.England ...)

ND

Friday, 11 August 2017

Buzzfeed Brexit review

Normally a vocal part of the daily remain, Buzzfeed has hot off the press a new, large-scale, study into peoples views on Brexit.


It makes poor reading for remainers - after filtering out the mostly contradictory statements which people want as their preferred Brexit, it finds that UKIP and Tories are for a 'Hard Brexit', whilst the Labour and others are split 60/40 in favour of a 'Soft Brexit.'


So this means that the majority prefer a Hard Brexit option in the Country over a soft one and there is really very little appetite for re-running the whole thing as the London Media and Chatterati are endlessly suggesting should happen.


It just goes to show, it really is hard to make people change their minds and that in addition, taking the side of the Elite and Entitled just won't work. For these reasons, Brexit is happening - this is the realisation that keeps both May and Corbyn ignoring the media chatterati; because at the end of the day they have to face the people again one day and need to be seen to be on the side of the people.


So what is the current view, what Brexit are we going to get?

Thursday, 10 August 2017

Nuclear War - the world should make this avoidable

It is really quite worrying that this is being discussed.


What lesson should we really learn, to me the obvious one is that we desperately need the UN Security Council to have more muscle.


North Korea should have been stopped from getting hold of Nuclear Weapons, history has shown us that they are very safe in a MAD environment when controlled by sane Governments. North Korea is not sane, never has been - not an adult country that can be trusted with Nukes.


The list of countries like this is quite long, but not overly so. Few societies manage to fail so spectacularly over such a long-period of time, although being communist tends to be a strong marker for this.


The next on my list is Pakistan, utterly corrupt country and culture with religious extremism thrown in too and an existential fear of India. Only then would we get to the likes of Iran.


However, surely North Korea shows that the sanctions process is very key over the longer term - Iraq, with hindsight, even proves that.


I do wonder now that the hell China is going to do in the current circumstances - after all without Chinese help North Korea would still be a peasant state instead of nuclear armed terror threat. It is hard to know as I guess there is potential for China to like the idea of the North eliminating its rivals in South Korea and Japan - equally though, in statecraft the Chinese operate effectively over decades and are useless when things have to be done over days or weeks. A tricky situation indeed, the US is out of the game now, as any sate is when threatened with MAD.

Tuesday, 8 August 2017

Rights and respobsibilites - online fraud and the security war

Quite interesting, and I dare say, courageous, for the CEO of RBS to come out today and complain about his own customers.


I may be being a little partial, but he basically says they are stupid, fall for obvious scams and as such should not be recompensed.


It is very hard to have much sympathy for RBS  - after all, they managed to blow, er, £48 billion on stupid scams and lending which then then asked the taxpayer to bail out with no hope of ever seeing the money again.


So RBS do not start from a good place to preach. However, it is a growing scandal as to how much banks spend on compensating customers for online fraud, well over £1 billion a year in the UK.


There is a balance to be struck, no one wants to have to remember several passwords and use two or three key input devices in order to access their online accounts; on the other hand, the light touch access is easily hacked.


Online crime must surely be the fastest growing type of crime in the world alongside people trafficking in 2017.


So where does the line lie? It can't be right that people hand over their details to strangers or transfer money to strangers and the bank picks up the tab every time. There is a level of responsibility. On the other hand, people get conned, part the job of the bank is to stop this happening to their valued customers.


It is hard, just last week I was called by a guy who was referencing people I knew, telling me about his company and project and then subtlety asking for some key details from myself. It was a very high level scam (called Spear Phishing apparently) where quite some effort had gone into researching my background and contacts ( I would guess through linked-in). Only some tough questioning on my part made them hang-up the phone. The scammers are getting better and better and the Banks must be really worried about how they can keep up in the security war.


I am still not convinced blaming the customers is the answer, but it shows how worried the Banks are.



Saturday, 5 August 2017

The Impact of 'Police Cuts' Down My Way

A peaceful Saturday morning in the suburbs - but what's this?  Three squad cars turn up, one after another - has a fight broken out in the florists?  Terror in the trattoria?

Details obscured to protect the, ahem, innocent ...
The clue lies above the shopfront with the red awning.  Yes, it's a(nother) coffee morning for the boys and girls in blue.  Like every other morning of the week around here, save the Lord's Day.  And tea in the afternoons.

The percentage of the total patrolling force in this neck of the woods represented by 3 cars-worth at this time of day must be pretty high.  But I'm sure the local commander has bemoaned the impact of budget cuts upon his ability to patrol the streets as he'd like.  

So here's a suggestion ...

ND

Thursday, 3 August 2017

BBC Online - Part 2

 Image result for pravda lenin

  As we saw here, the BBC IS a world leader in news reporting. BBC Worldwide is watched in hotels worldwide. 350 million people a week are reportedly watching some content from the various BBC world channels and programmes made.
Its very, very worthy. Equally as worthy and dull as CNN worldwide. The bland leading the bland.

Closer to home BBc News has dropped huge market share since the digital revolution and the rise of workable, readable smart phones. 3-4% year on year decline since 2012. Predicted 25-30% decline in viewers watching any TV news by 2022. And those that are watching are averaging 61 years of age. 

So to retain market share, online focus must be the future. The man or woman sitting behind a desk format is coming to an end. Which is just as well as TV channels have exhausted the ways of showing the same thing.
 Person behind desk. Phone on desk. No phone. Laptop on desk. Spindly glass desk showing persons legs. Person in front of desk. Balanced on a high stool with no desk. Filmed side on, instead of to camera.. Sitting on a low comfy sofa facing a digital screen. Desk in the middle of a glass box 360* panoramic swiveling. There's really only under the desk and lying flat on the sofa with a bowl of nachos left.

Back to the BBC.

This self censorship is seriously damaging their brand. Because of the politically correct attempts to avoid mention of race or religion in any way, means some news items make no sense at all when read on the BBC website.

During the French election there was a story about riots by French schoolchildren. Secondary school age kids were blockading and threatening to burn down schools. Bizarre. 
The piece suggested this would help Le Pen. 

There was no indication of why this would help Le Pen. No clue at all.
 On further investigation elsewhere the story was about a black boy, who claimed he was caught and raped by the French police with a police baton  This led to the rioting in the black areas of Paris. With a few kids on social media calling for protest and the barricading of streets and schools. 

Essentially, this was a race story. Disaffected banileue youth. Policing, tensions and immigration.
And that's why it would it was thought to favour Le Pen.
Later on the BBc expanded the story and it was reported with context. And made much more sense. But it was a few days on.

A more recent story was the GTA gang in Moscow. 3 defendants killed in courtroom escape bid.
In the BBC piece it emerged that the gang were suspected of killing 17, unrelated, motorists on the roads outside Moscow. For no reason. Over a long period of time. 
Cars had their tires blown with homemade traps. And the occupants murdered. No robbery took place.

What the ..? What's going on here?

The very last sentence of the piece gives a clue. 

One of them had fought for so-called Islamic State in Syria before returning to Russia, Russian television reported.

And going anywhere else reveals this is not a bandit gang story at all. Its a terrorist story. An Islamic state terror group are committing the killings. That's the motive. Killing unbelievers.


Image result for gta gang moscow

On other news sites this is immediately apparent. So why was it not made clear? 
This strange decision to hide facts. Race and religion should not be mentioned. 
Even if it is extremely important to the story.

This is without all the other odd, impersonal noun, choices the wider media have been making recently. 

Truck kills ten on London Bridge.
Women wounded by knife in German supermarket.

Strange choice to make.

 And another reason not to ever bother sitting down to the main news at ten. 
With the solemn woman sat behind/in/on/adjacent to/under/suspended above/ or just flopped on a beanbag beside the desk.

***

All the news that's fit to print. 
New York Times masthead.


All the news deemed fit to print 
Updated millennial masthead ?

Wednesday, 2 August 2017

Is BBC online Pravda ? Or the Sunday Times Style Magazine

Related image


My real issue with the very extensive and incredibly wide ranging BBC Online, Your BBC website of news and sport, is that it isn't very good at informing.
Its pretty good at reporting the news. But just reporting it. Not explaining it. Or contextualizing it. Or investigating it.

Sure, its a supremely slick web page. The latest news is analytically promoted to appear as the top item in search browsers. There is news. Weather. Sport. Politics. Human Interest. Charity. A bit of Religion. A lot of Royal.
World news. Arts. Business. Science. Popular culture. Newspaper headlines. Tech stories. Schools, education and children's news. 

{which is a very good service. Costly for the Beeb to produce. But kids do have a grasp of news they would not otherwise have because of Newsbeat and Newsround.}

Plenty of minority content. UK regional content picked up at great expense and available to view. 
Individual, devolved home nation news, produced  in languages people don't even speak. 
Endless BBC self promotion stories and plugs and the whole webpage, http://www.bbc.co.uk/news links together BBC television, radio and iplayer content.

But, my complaint has long been, although the BBC has the width of a lake, it has the depth of a puddle.

  That is not say BBCOnline isn't quality. A visit to CNN or Fox or Russia Today shows a much inferior content and  navigation web page.
But they don't have the licence fee cash cow. Not the £-billions that the BBC pours into its online and worldwide content. So the BBC should be the best.

The BBc is a great stater page. But it isn't a newspaper. Its not even an informed blog. Its more a colour magazine. Flip through and look at the pictures. A taster for news and issues. A news precis. A guide to whether its worth seeking out further information.

An example would be the current EU airport security checks: Holidaymakers 'face long delays'
Reading the story informs the reader about long delays. Explains that it is new passport readers adding to the time to check. Tells the tale of EU increasing regualtion at borders, to combat terrorism.
Has plenty of comment from airline chiefs and the tourist board. And delayed passengers.
And concludes at the very end that the delays seem to have vanished. So its already a non-story.
A perfect, quick and simple, modern newspaper clickbait online type story. Snips and quote cuts and a modicum of redrafting. With a banner headline and a sad picture. 
Its only lacking
'10 incredible things holiday makers packed in their suitcases. You won't believe number 6 !"

There is no mention of why the process takes longer. Of the fact the hugely expensive new scanning machines don't tell the passenger which way up to place the passport. So failing to work. 
No mention of perhaps the customs should have had more staff for a new process at the start of the holiday season. Or why the EU, with its no compromise ever - no way- no deals on no-borders, or freedom of movement, suddenly felt the need to strengthen border controls.

Its just a collection of statements from interested parties. And that is fine. The BBC prides itself on holding no opinions. And its why if you want to know more, you have to go elsewhere.
Image result for tomorrow's world

It reminds me of watching Tomorrow's World with my best friend's dad. He was a nuclear physicist. 

He once told us kids, sat on the floor in front of the small, fat, telly, that if you had no idea of the subject it all seemed plausible and informative. But if the Tomorrow team strayed into his field, it was clear their discussion and explanations were laughably simple.

"Its quite easy to forget they are just actors. If you don't have any knowledge of what they are talking about."