Friday 26 February 2021

Scrapping Sentinel: Massive Government Mistake

My special subject being aired now.  For the past 12+ years, the RAF has operated the Sentinel R1, a very capable and sophisticated piece of surveillance kit that all you one-time aircraft spotters will know about, and the rest can read more here

The Sentinel has been of extraordinary value to HMG, in ways that will not find detailed expression in the public domain but you can readily imagine.  (Start by searching on Operation Shader to get the general idea.)  Osborne, that f*****g 'genius' whose entry in the history books will be 100% damning, decided to scrap them for cost-cutting reasons but Cameron was persuaded (well, begged by our allies) not to follow through, so they were given a 5-year life extension.

But now their last mission has been flown, and there's no 1-1 replacement in sight.

I despair. 


Wednesday 24 February 2021

Are wild markets a late stage symptom of the policy disease?

 When can we be rid of this virus? No, not Covid, the Federal Reserve. 

Yes, I know, you think I am about to enter a conspiracy world of who owns the Fed and how it is all some cabal of Jeremy Corbyn's deepest and closest friends. 

Well, sorry to disappoint, but instead there is a huge story here. When Tesla fell on Monday 20%, erasing in truth only a month or so's gains, Bitcoin fell in sync. Suddenly, Jerome Powell, chair of the Federal Reserve, decided to remind the markets that the Fed would not remove the trillions of excess liquidity from the economy anytime soon. The liquidity is a feature, not a bug of the current system. 

The same is the case with our own Bank of England, but we have not had a huge run up in share prices and other assets like the US. Here, Government debt has easily absorbed all the extra debt created by the Central Bank. 

In the US, we are seeing crazy wild markets. Bitcoin and other digital currencies are hitting all time highs, SPAC's (Special Purpose Acquisitions Companies) are literally raised like South Sea bubble entities - "for reasons for which no one is to know the purpose." Sadly, I see the FT and lawyers etc rushing to promote shell companies in the UK and to try to get SPAC's registered here. 

SPAC's are a sign though, as are the crazed valuations of a few successful stocks. There is not much to invest in and there is far, far too much money chasing it. Private Equity sits on its largest amount of 'dry powder' - money raised but not deployed, ever. This is getting put into SPAC's to 'deploy' it but really it is just moving around savings and charging fees to the investors. 

With the markets the way they are, the underlying economy is in a wild phase itself with Covid smashing some sectors and boosting others. Forcing technology change in a year that would have taken a decade before. 

Central banks have created this monster and Governments love it - after all for them it is the magic money tree come true. Massive extra spending and no inflation. If inflation comes about then it is easy to cancel the fantasy QE bonds so goes the Central Bank theory and reduce money supply.

See below for what we are really doing though - a huge currency debasement strategy with apparently limited inflation impact. 

I am thinking hard on how this ends. In 2006, a huge run up in credit and debt ended in Great Recession, which was entirely predictable for 2 years beforehand. Here we see the Central Banks juicing the market and Covid providing both the spark but also the cover. My base case is the blow off phase lies ahead of us still - perhaps after another run up of asset prices. In reality the end phase must be some serious inflation or, if the Central Banks execute on slimming their balance sheets, huge deflation and bust. Either way, it is not a happy ending. 

Tuesday 23 February 2021

Census and Civilisation

The government publicity machine has limbered up into a state of high activity preparing the ground for the 2021 Census.    I view this as a very big deal.

There are probably some libertarians out there who view the census as either an outrage, or as a silly exercise to be ignored and maybe even evaded.  Can't agree; I'm squarely with Caesar Augustus and William of Normandy in these matters.  The keeping of accurate public records is essential to civilisation as we know it.  (Some even say it's the primary legitimate function of government.)  Obviously it can be portrayed as a tool of subjugation, but that's ridiculous: if there's to be government at all, it must be properly informed.  Someone once wrote (Orwell?) that until some date early in 20thC, a law-abiding English gentleman need never come into day-to-day contact with the authorities.  Well, maybe, but along with other hitherto scrupulous public record-keeping we have a fine and lengthy tradition of accurate census-taking every 10 years, interrupted only by WW2: and nobody got to exempt themselves from it.

Except, that is, until this century, when the government started getting mealy-mouthed about kicking the doors in of people who won't cooperate.  Well, it would be too dangerous for the census agents, wouldn't it?  And maybe they didn't want to know exactly how many beds-in-the-shed were not being reported, because of, errrr, sensitivities.  So then we resort to "statistical methods" - like calculating how many people live in *recalcitrant* towns by measuring the sewage, FFS!  And who knows what indirect methods they'll be falling back on this time around, to fill in the gaping holes that we may confidently predict will still be left after their publicity drive, "primarily online" data gathering, and isolated "support" visits to dwellings.  Obviously they have a covid excuse this time, but there's no doubt they were never going to replicate the old-school 100% blitz on doorsteps by enumerators to collect the forms, check the contents and attempt to suss out the dubious stuff & report to higher management for the boot-boys to follow up.

Any pre-emptive willingness to accept anything less than 100% survey is an absolute, abject abrogation of government responsibility.  "Why you should take part?  - To help make sure you and your community get the services you need ..."  Well, I suppose that's a perfectly sensible, positive pitch in PR terms - and, to be fair, the words 'must', 'by law', 'offence', and 'fined up to £1,000' do appear on that website.  

But I guess we are all pretty sceptical as to whether this writ will run in certain districts we could all name.   Just now a mighty controversy rages about why BAME communities are disproportionately "vaccine-hesitant", even when strikingly against their prima facie best interests**.  Sometimes we hear that it's because they distrust the authorities generally.  Worthy bland appeals to self-interest notwithsanding, this "general distrust" seems highly likely to extend to official data-gathering, does it not?

Incidentally, if I prove to be wrong about this I will be the first to applaud.  Because it really needs to be done, and done properly.  A government that doesn't even know its people is not really a legitimate government at all, it's just a big, lazy, cowardly, ignorant, hulking factor in the background of people's lives.



**  (OK, the comments page is there for you to take issue with this ...)

Sunday 21 February 2021

Desert Storm(4): the Scud Attack on Israel, and after ...

Last time, we saw how the cornered Saddam didn't take things lying down, but embarked on bold 'surprise' initiatives at the outbreak of the shooting war 30 years ago.  

It was a creditable effort to redress the balance a bit in his favour.  Both the invasion of Khafji and the Scud attack on Israel can be seen as attempts to provoke the start of a ground war on terms of his own choosing, i.e., before the Coalition forces had fully lumbered into their desired state of readiness.  

Not a bad line of thought on Saddam's part, because it was indeed only after more than a month of offensive air operations Jan-Feb 1991 that Norman Schwarzkopf felt ready to pull the trigger on the ground war.  And the onset of hotter weather - not to mention political impatience - was giving his vast, unwieldy logistical undertaking as much of a hurry-up as could possibly be imagined.  So, yes, the Coalition might have been thrown off kilter if Saddam's surprises had provoked ill-prepared ground operations ... and heavy casualties ... and adverse public reaction ...

Regrettably, the Scud aspects of Desert Storm (and after) are one area where I can't recount everything I know.  However, there are still several interesting aspects that don't stray too far from what's in the public domain if you know where to look.  (Hint: the fulsome websites of the US military and CIA, where paranoia about the past is not much in evidence.)

Firstly, we knew what we were worried about and had established a very excellent monitoring system that gave us real-time 'Scud Alerts' - real-time notification of missile launches, and very fast (and accurate) calculations on the trajectory and predicted target.  Such was the state of development of satellite TV at the time, spookily we could often tune in to live broadcasts from Israel and watch the buggers landing, as it happened.

We therefore instantly knew that Israel was a primary strategic target.  (Other Scuds landed on Saudi targets, too.)  We also had rather good coverage of the whole region, of course** and immediately noticed Something Else.  Upon the Scuds hitting home, some 50-60 Israeli aircraft took to the skies.  And you didn't need to be a genius to guess what some of them were carrying under the fuselage.  On the one hand, they would have wanted to keep their weaponry safely off the ground.  On the other, they may well have decided to deploy said weaponry somewhat further to the east ...

The red telephones were buzzing off their hooks.  Manifestly, wise counsels prevailed, and Israel decided to take it on the chin - and not without casualties.  As with several self-denying actions of both the Russians and the USA over the nuclear decades (and probably India and Pakistan, too), you have to say this speaks well for the maturity of international statesmanship when the chips are down.  It's not comfortable to think what might have happened if Saddam had gone for chemical warheads.

Scud-hunting thereafter became even more of a preocupation than it had been before - which is saying something.  Anyone who is interested in these things will doubtless already have read the various first hand accounts of in-country SAS operations.  There was a lot more besides.  How do you hide a Scud launcher?  They are mobile, but really quite big.  Answer: there are cunning places you can use like underneath bridges over roads.  Also, Iraq itself is really quite big, too.  And, as mentioned before, even if you've spotted something on a satellite image, in those days the 100% computerised, 100% accurate locational techniques we now enjoy were not available.

We definitely didn't find them all during the 1991 conflict itself (though we did find all the superguns - a tale for another day).  The Scud story, of course, moves seamlessly on from Desert Storm into Operation Rockingham, and thence into the whole WMD saga that still rumbles to this very day.



** As often mentioned hereabouts, the significance of Cyprus to UK foreign policy cannot be overstated

Friday 19 February 2021

How it’s going - Covid economic shock

If only because I am bored of seeing the usual suspects say the UK has had the worst global recession due to Covid and the most deaths and what an exceptional horror story we are etc etc. 

As always in reality, it is much greyer, the major economies of Europe have been in a very similar vein, except Germany who avoided the tough first wave and they only compare the the USA who have not closed down as much as Europe (but, on balance have the same level of deaths broadly, if not a little better). 

But funnily, I don't read anywhere that the USA has done better than Europe throughout the pandemic from both a medical and economic perspective? I wonder why?

Wednesday 17 February 2021

Fun and Games with Hydrogen in ... Germany

The whole hydrogen thing is very interesting in loads of dimensions.  We've debated several of them, above and below the line, in a number of posts over the past several months, this one being quite recent.

For present purposes, some definitions:

  • 'Grey' hydrogen is what almost all past and current industrial hydrogen has been: manufactured essentially from unabated fossil fuels, = lots of CO2 as a by-product
  • 'Blue' H is currently a fanatsy - manufactured, more-or-less conventionally or with some newer technologies, from natural gas AND with the resultant CO2 sequestered
  • 'Green' H is currently uneconomic - manufactured from water by electrolysis: no CO2 at all
  • I won't detain you with 'Turquoise' H (sic

As noted before, the gas industries of the world, petrified by the prospect of asset stranding on an humungous scale, are piling - with deadly serious intent - into hydrogen as their putative saviour, thinking that (a) in many cases it can utilise their existing infrastructure downstream (distribution, storage); (b) it plays readily to their existing engineering skills; (c) everyone loves them for it; (d) in due course there will be some subsidy-dosh on offer; (e) whisper it quietly, but while we are waiting for Green H to become a serious economic proposition, there might be a big role for Blue, or even ...Grey! 

Which brings us to Germany, our old friends with the fine words, *noble aspirations*, and demented policies.  They are dead keen to be at the forefront of the H-revolution, and are Absolutely Adamant it must be Green H and nothing else.  They have also been solemnly told by their scentific advisers (a panel of government and industry types) that there is no way in Hell that there will be economic Green H possible by 2030**.  But they don't want to be sitting on the sidelines while the pragmatic Brits get started with Grey (as we are doing already) and Blue.  So ... "we may have to import it to get started".  Hahahah!

And where might it come from?  And might it be, errrr, Grey? 

Germany in talks with Russia over hydrogen importsbut coy about 'colour' (RechargeNews). Germany is in talks about the import of “CO2-neutral” hydrogen from Russia, energy minister Peter Altmaier said during a virtual conference on bilateral relations. The minister was, however, unclear whether discussions concerned imports of green hydrogen produced via electrolysis from renewable electricity, or blue hydrogen from natural gas linked to carbon capture and storage (CCS) from a nation that is already Germany's biggest gas supplier.  

Yup, I think we may be sure that'll be a deep shade of Grey.  If not, *ahem*, Red ...  Did CU mention schadenfreude?



** They may be wrong about that: the technology is really motoring

Monday 15 February 2021

More Energiewende fun

I feel bad to be ragging on the Germans again this week, after all I am quite a Germanophile in actuality. However, as my co-blogger ND writes frequently the Energiewende (which means Energy transition in English) is a real piece of live modelling on the stupidity of politicians to want their virtue signalling to come true.

This past week has seen a deep freeze in Germany and as so often in the European Winter very little wind at ground level. As you can see above, the solar panels are not much use when covered by a couple of inches of snow and the wind turbines are still without any wind. The renewables contribution to the German network dropped to between 0-2%...from a nominal 33% which is what they were claiming last year for the success of energiewende.

Maybe some self-heating tiles would help the solar? Nonetheless, this weekend saw lots of coal back-up coming online in Germany together with some neighbourly calls to France for some of their nuclear capacity which Germany has been so busy shutting down. 

If only there was a word for this in English to match the German Schadenfreude.

Friday 12 February 2021

Germans REALLY Don't Understand Markets (part 94)

Now I know this becomes repetitive** ...   and by "Germans" here, I mean ... and their pocket euro-wallahs in Brussels

Europe Considers Steps to Curb Speculation in Carbon Market 
(Bloomberg). The European Union is considering curbs on speculation in the world’s biggest carbon market where record prices have lured hedge funds in search of profits. EU emission permits jumped to an all-time high of EUR 40.12 on Thursday, extending their gains to about 70% over the past year. That gain, in part, has been down to large-scale investors speculating in the market. Europe’s cap-and-trade program, started in 2005, is the region’s key policy tool to cut pollution. The European Commission, the EU’s regulatory arm, could introduce a limit on the number of CO2 allowances that can be held by investors in a central registry of the Emissions Trading System, according to people with knowledge of the matter. Doing this would prevent financial investors holding too much sway in the market.


(a) the record high prices this week have b*****-all to do with speculation, and EVERYTHING to do with very cold weather, and euro-policies that are SPECIFICALLY DESIGNED TO INCREASE THE PRICE OF CARBON.

Can I make myself plainer?  FFS!

(b) if you suppress spec interest in a market, you starve it of liquidity - the quickest route to the death of the market.

To give an example:  20 years ago, the Next Big Thing was going to be weather derivatives.  Oh, people said, this'll be a tremendous market - loads of people want to hedge their exposure to weather: look, lots of people insure against it already - and lots more could benefit from the clever products you can design using derivatives. 

Well, the "market" was duly set up, and away it went.  Lots of capable banks and energy companies and trading houses and exchanges invested time & effort & people to become players.  But ... nothing, much.  

Why?  Because nobody is willing to take the other side of the bet:  literally no punter is willing to gamble on what the temperature will be next July!  (Unlike the price of crude oil, or gold, or the FTSE, or Bitcoin etc etc.)  So - no speccies in the "market" ... and no market.  Simples.

Left to their own devices, these euro-types are going to make some big, big mistakes.  Can a Tobin Tax be far behind?



** For those who haven't heard this story from me before:  When the EU Emissions (i.e. carbon) Trading Scheme was first mooted, the Germans insisted that the initial allocation of permits should be fairly lavish, and free (as opposed to auctioned).  In this way, they said, it would have no impact on German electricity prices (based, as they were, on coal).  I and others told them that, whatever became the price of carbon when trading started, the price of electricity would increase by exactly that amount, free allowances or not.  Oh no, they said - how could that be?  All our generators have sufficient free allowances.  Yes, J├╝rgen, but as soon as there's a market price on them, they have an opportunity-value ... 

A lo!  When market trading of carbon commenced, the price of electricity in Germany (as anywhere else where prices were set by fossil fuels), went up by exactly the coal-equivalent amount!  Teuful! - how can this be?!  And the Bundestag held a parliamentary inquiry! 

Thursday 11 February 2021

Musk, market manipulation and the rhyme of the dotcom bubble

 2021 is so 2021.

First, we have the pandemic.

Second, we have a trumped-up Trump impeachment (he maybe more hurt by the news his twitter ban is now permanent). 

Thirdly, we have Elon Musk.

Now, like him or loathe him, Elon is a very astute man when it comes to creating hype and monetising it. Firstly he helped build paypal, now a fundamental core of internet transactions. Then a whole load of hype and tech based companies, including the very successful Space X, less successful Hyper-Loop and of course the enigma that is Tesla. 

Tesla, via a great product and just incredible amounts of hope and hype, has made Elon the richest man in the world on paper. He has many devoted fans who hang off his every tweet. And he has a strong personality, not a very nice one to judge by his ex's comments, but a strong one. 

And now this week he has pushed Tesla and his own money into Bitcoins and Doge coins. Tesla taking $1.5 billion in BTC has pushed it upwards towards $50,000 per coin. (Doge is a pure fantasy coin that has limitless amounts, pushing it is a pure hype meme in the form of a Ponzi scheme). Saying that Tesla will accept BTC payments for its products though is very smart. Once BTC gains acceptance as a currency with some use other than an electronic store of value, it become a more valuable item. 

Already, using the hype generated by his action, Tesla has made more money on paper from BTC investment than it ever has on selling its nice but very expensive cars. 

How the US financial regulators must be having nightmares, they are now duelling with the world's richest man and his army of fans, all the while trying to stop another reverse robinhood diminution of retail investors funds. 

It is so 2021, social media, dumb money released by the Lockdowns effectively, the power of hype and ponzi all wrapped up for the Regulators. So tempting to call this the late stage bubble. It certainly feels like February 2001 again. But this time, the market is so liquid due to all the Central Bank money printing, the blow-off phase may last for months yet? 

Tuesday 9 February 2021

Is Boris really the worst Prime Minister for Covid?

Yesterday's excellent post on the dire May/Hammond combo made me think about how alternative realities may have come to pass. The events since 2016 have been very unpredictable and at many moments the history of the UK could have easily been different. A simple one would have been for the arch-remainers to sign up to May's BRINO for example. Oh, how they wish they did now to my constant joy. If they had, there would be no Boris government now, but continuity May until 2022, with the benefit of total reliance on the DUP. 

However, along comes covid, she dithers in March 2020. She would have dithered, as May was never decisive plus always had to seek the counsel of the DUP.  It would be as bad if not worse than Boris in the first wave and then with BRINO we would have signed up to the EU vaccine scheme with a much worse position now. Hammond would have been more cautious than Sunak and so the economy maybe inw worse shape than it is now, but that is harder to say as Sunak's profligacy we may come to regret.


Perhaps May loses to Corbyn in 2017 or somehow he become PM.

Along comes Covid, again dithering with the crazy team in Labour (Abbott, Burgon - remember these idiots?) then followed by a huge lockdown for months enabling a full on discussion about a socialist revolution in the UK to stop people ever working having to do Capitalist work again. Constant musing about nationalising broadband and the trains in the name of the pandemic. Nothing to do to really fix the pandemic as the Tankies think for them this is the 2nd coming for communism. Of course, Labour would also have signed up to EU vaccine scheme plus decided to declare that the poor people of the world and especially Palestinians need vaccines more than we do in the UK with our magnificent NHS. 

There are no other alternatives, Keir Starmer was not leader in any way to take over. This was the world as it could have been with only 3 choices - May, Corbyn or Boris. 

So in conclusion you can think Boris is a useless dud surrounded by incompetent fools - but look at the alternative, his 4/10 is still better either of the other options that we had. 

Monday 8 February 2021

Brexit: Hammond and May - Totally Unforgiven

This Grauniad piece confirms all our worst suspicions about the utter uselessness of the May government, and (IMHO) Hammond in particular.  David Davis comes out very badly, too. 

I think she believed that she could park Brexit as just something we will get done: ‘It has been decided. Now let’s move on, and let me tell you about the Theresa May vision of the future’ … what the masterplan was, she didn’t know – because Nick Timothy hadn’t formulated it at that stage.” 

Declaration: this grieves me because I happen to know all these three personally - they are my exact contemporaries.  The vacuity of May came as no surprise.  Hammond was much more of a disappointment, a dismay that set in quite soon after the off, and was fully formed in twelve months.  Unless Gove has (against all the evidence thus far) in fact pulled off some remarkable, practical Brexit-related measures that have yet to materialise at the docks and ports of the UK, I reckon history will be very unkind to Hammond for his self-evident passive sabotage of what could have been several years of purposeful, relatively inexpensive preparation. 

Davis is perhaps more interesting.  Ex SAS, he is one of several identifiable special-forces archetypes.  Like all of them, he is totally self contained, self sufficient and self assured: and capable of serious application.  Unlike some he is matey, flippant, and impulsive, sometimes acting fast and without much preparation, expecting speed - plus surprise! - and ability to wing it effectively, gunslinger style, to carry the day.  There's sometimes a need for that in special forces actions: they don't always get much time to prepare.

But when you do have time (and by Heaven they did in 2016-2017), it's folly to crash in through the saloon doors and face down the other side like Clint Eastwood in Unforgiven.  The EC was waiting for him, fully prepared - and long-time masters of the slowing-down tactic.  What a prat.

So: a prat running the negotiations (we may discard Liam Fox utterly); Hammond, a highly intelligent saboteur; May, an empty vessel, grotesquely out of her depth but lacking the honesty to acknowledge it and disqualify herself.  What a disaster.   


Saturday 6 February 2021

Desert Storm (3): Saddam could still SURPRISE

There's an old military precept**, expressed in various ways:

There's no such thing as strategic surprise - but there can always be tactical surprise

This is generally taken to be a memo item for commanders (particularly those many who are somewhat lacking in native creativity) to incorporate in their plans a carefully thought-through surprise for the enemy.  Just because it's clear to all that you are poised and ready to attack, doesn't mean you should simply blow the starting whistle and advance in a line on the obvious axis (think Normandy 1944).  It's all closely bound up with deception, another strongly advisable tool for every commander to pack in his kit - and much emphasised in British military doctrine, often to the bewilderment of more linearly-thinking allied leaders.

But it's also good advice for commanders who are themselves the ones mostly obviously holding the initiative on the battlefield.   Maybe the other side isn't going to take your next powerful move lying down: perhaps something really unexpected is going to come flying over the battlements in your direction.  No plan benefits from being thrown even a little off-balance before you've got properly started.

By the January of thirty years ago, it was pretty obvious to Saddam that he was about to face a formidable aerial bombardment.  Far from concealing it, Bush's coalition had been keen he should understand the sheer might of the aviation they possessed - not least to deter a further invasion, into Saudi Arabia, before coalition ground forces were ready.  Enough, you'd think (or indeed hope), to cow even a tooled-up maniac like Saddam, who'd had his share of setbacks against a much lesser foe in Iran.  

But, just as we'd been surprised by some of the military innovations the Iraqis had come up with over the course of that earlier conflict, we had to cater for several initiatives we hadn't necessarily, errr, expected in detail...

1.  The Scud campaign

We knew he had Scuds, including some with chemical warheads.  We'd deployed very advanced kit to detect their launches, and accurately predict their trajectories (all of which worked very well, incidentally).  We were searching diligently for the launchers as best we could, across the whole of Iraq.

What we hadn't banked on was an immediate Scud assault on Israel, as soon as we opened hostilities at the end of Desert Shield / start of Desert Storm, on 17th January 1991. 

I mean: Saddam had seen the world's response to his attack on modest little Kuwait.  Who, in his shoes would choose to open a new front against Israel ?   But he did.  I'll be writing more about Scuds in future installments.

2.  Iraqi airforce decamps to ... Iran!

Yup, as Desert Storm commenced a large number of Iraqi planes headed immediately eastwards over the Iranian border, and landed there.  To be fair, this is nowadays mostly attributed to individual (albeit clearly pre-planned) defections rather than a cunning ploy to preserve the Iraqi airforce.  Still, it didn't half give us pause for thought.  In conjunction with the attack on Israel ... does he have an *understanding* with Iran ..?

3.  The attack on Khafji (Saudi Arabia)

Now this really is a classic.  The defender makes the first move, catching the attacker unawares.   As Wiki has it

Saddam Hussein, who had already tried and failed to draw Coalition troops into costly ground engagements by shelling Saudi Arabian positions and oil storage tanks and firing Scud surface-to-surface missiles at Israel, ordered the invasion of Saudi Arabia from southern Kuwait. 

Yes, that was the point: still, in January, we weren't ready for ground fighting.  The aerial phase was always going to come first, but ideally we might have moved to ground ops rather sooner: as mentioned before, the logistical challenges were great, but the weather would soon be heavily against us.  The shelling was no great surprise, but Khafji was.  I leave you to refresh your memory on that episode on Wiki. 

Gotta have realistic respect for the other side.  He was making a proper fight of it -  and not everyone thought he would.  Surprise, eh?  Catches you every time. 



** not just military in its application, of course.  Just because I know I'm going to die, doesn't necessarily mean I won't be caught out when it actually happens 

Friday 5 February 2021

Friday Fun - "We're alrigght!"

 So with the vaccine first phase roll out going very well and the lockdown working from a cases perspective, we have seen two weeks now in the UK of rapidly falling cases and hospitalisations. 

Inevitably we are back to splits in the cabinet about when and how to ease back to real life. It seems to me this might happen a lot more quickly than we think, having all been battered with bad news for so long, hope is hard to create.

What do you think will happen?

A) end of lockdown in early March, into national tier 2, end of that by June. then next winter occasional tiering in areas with low vaccine uptake or new variants. International travel dependent on other countries getting their vaccine act together. 

B) Tier 4 by end of march, slow reduction in tier levels over the summer, with most restaurants and shops open by May or June. Maybe even sports events over the summer. 

C) Lockdown until end of April to really lower cases and allow vaccine her immunity effect to kick-in. Tier 3 over the summer and then staying there until year end and the whole population vaccinated. 

Which will it be, the sun is our I am plumping for A...

Extra points if you can name the accent in my head of the phrase, together with the date and place. 

Thursday 4 February 2021

Capitalist Conspiracy? - there's a smell in the air

Ordinarily we may be derisively dismissive of the Capitalist Conspiracies of fevered bedsit lefty imaginations.  Obviously there are some active business folks who would qualify as capitalists (by virtue of their day jobs) who self-interestedly conspire on this and that, of greater or lesser legality or moral rectitude.  People have been actively working to obtain monopolies since time immemorial, and the law has something to say on the subject.  But since *capitalism* isn't a political movement^^ it doesn't really admit of conspiracies in the way that, say, Trotskyites or revolutionary marxists dream of.

That said, there are some pretty distasteful politico-financial pitches circulating just now.  Most of you will have seen the grinning face of Nigel Farage (not least on the ads that blogger inserts on our pages, and ubiquitously on Guido).  His promotion is at once blatantly political and blatantly self-interested.  He wants us all to get rich by cashing in on Brexit, via a little scheme he has in mind ...

I can't see Nigel enhancing his rep much in this way, not withstanding its anti-establishment tone: and it kinda suggests he doesn't plan on making a serious run at the 2024 GE.      

But all that's pretty tame and domestic (and above-board in regulatory terms), compared to certain ghastly current US scams which I have no intention of linking to on this site, but which pitch mercilessly to the rabid tendency in US "politics", making it virtually their patriotic duty to hand over all their wordly wealth to, errrr, a little scheme ...  The promoters have presumably already identified their heavily fortified bunker-on-the-Brazilian-beach for the inevitable day when it all goes tits-up, and some extremely angry owners of patriotic firearms come looking for a righteous refund.  

Bernie Madoff, when all said and done, only plundered the gentry, who were satisfied to let the law run its course.  He probably doesn't fancy reprising his ponzi schemes to fellow inmates of the federal pen ...



^^ I haven't forgotten that we haven't followed up yet on this post from the end of last year: 

Tuesday 2 February 2021

AstraZenenca Contracts: Amateur Lawyers at Work

Declaration: I am not a lawyer...

... just an old commercial negotiator, fairly well versed in the 'anglo' commercial law that dominates world trade.  With these instincts, my ears pricked up when I heard sundry euro-wallahs stating rather unequivocally that AZ was in breach of its contractual obligations to make "best efforts" on their vaccine delivery obligations to the EC.

Now "best efforts" is not a particularly English-law phrase - I associate it more with the American jurisdictions (Texas, New York) which I meet in the energy business.  We tend to go for "endeavours".  But here's the point: best endeavours is a very demanding obligation.  Roughly speaking, it means, if you can (legally) do it, you must - at whatever cost to yourself.  In any sphere where obligations can be genuinely difficult to perform, you'd mostly want to be held only to reasonable endeavours; a middle course being all reasonable endeavours.  Then, there would probably be a contractual definition of what's considered reasonable; but in the absence of that, there's no end of case law as to what constitutes reasonableness.  It would rarely include willfully breaching properly disclosed pre-existing commitments.  So - taking the reports at face value, I'm starting to think AZ might be on thin ice.

Then ... a redacted version of one of the vexed contracts was published.  Of course, any redaction makes definitive interpretation impossible for the third-party reader**: but one couldn't but help notice that AZ had only committed to "best reasonable efforts".   Ahhhh.  And the contract defines "reasonable" in a fairly conventional way.  Now it has also to be noted immediately that the contract is subject to Belgian law, about which I know nothing whatever; but still.  Suddenly, this amateur is starting to suspect the euro-tossers are protesting too much - a feeling reinforced by their shrill, know-nothing tone as contrasted to the measured, thorough responses of the rather impressive AZ CEO Soriot (French) who seems to be comprehensively the master of his brief.

Still, a bunch of truly amateurish lawyers - German and EC officials (and their apologists on CiF, naturally) were thundering pacta sunt servanda ... yes, yes, we know about that.  Germans are very ready with this stuff, Latin and all, until they run into a situation where they don't like the consequences, e.g. as in this first-hand story I've recounted several times here and elsewhere.  It's then down to looking for some Civil Code let-out (when they're weaseling in a relatively civilised way); or just plain blustering and bullying, might-is-right.  It infects the whole of the EU - the "rules-based" EU as it likes to claim, hahah.  Until it suits them otherwise.

And then they wonder why the whole of global commerce is conducted under English / American law, wherever humanly possible ...  They've gone a bit quiet for now, anyhow. 



** As we now discover:  UPDATE - it turns out that in the contract, AZ was granted a sweeping indemnity from liability, the very thing the euro-wallahs claimed they'd been taking pains (and time) to keep out of their vaccine dealings, unlike, errrr, the reckless UK / US buyers ... 

Monday 1 February 2021

#Wallstreetbets - the madness continues

What will we see this week.

Last week we have not seen the biggest short covering by Hedge Funds since 2009. Around 30% of short positions have been closed in favour of longs. This does not move the market yet, as the net impact is very little (you buy  longs to cover shorts and sell shorts to buy longs). But it does show the Hedge Funds don't want to end up like Melvin Capital, who are $7 billion down on shorting GME. 

The regulators have stepped into to stop the retail madness, by limiting purchases in the likes of #GME and #AMC through regulatory pressure. This is not going to end well for Robinhood trading, who would struggle under ther weight of capitl being deployed through the platfom anyway. 

#GME is going to continue this week, the issue is the underlying company is not worth anything like the value now ascribed. The WallStreetbets reddit's are full of the 'gamma' surge as Melvin and others are forced to quit their shorts and buy up the shares- forcing the price astronimically high. This happened with VW in 2008, when it briefly because the most valuable company in the world, after annoucing its merger with Porsche. 

Newly rich retail investors in the US are going to like this game and look for other options. Odd cryptocurrency choices like Dogecoin will have a wild week and there is talk of buying physical silver. This is an interesting play, there has long been an excess of paper contracts in the silver market and a huge price spike could well cause an issue. Silver is an in demand product with a rising price in any event. But it is 100x the size of #GME at worst. The player on on the other end is not a small hedge fund, but he largest and canniest bank in the world, JP Morgan. 

Not gonne lie, very exciting week and have freed up some play money to get involved, should be fun. The worst part is the pump and dump scum who are masquerading at WallStreetBets types, just creaming money off the newbies, sad to see by creating Whattsapp and Telegram groups with 'tips' they are all set to be short on. In the world of finance though, playing nasty is the only way.