Where do the smart, furtune-seeking graduates go?

The answer to this question goes in waves, according to the zeitgeist, and mirrored by the (ridiculous) starting salaries on offer.  Someone might put approximate years to these, but by my reckoning these are what we've witnessed over the past several decades, in rough chronological sequence of their peak vogue.  There's obviously overlap.

-  McKinseys and the like

-  Tech, of the NASDAQ tech-boom vintage: (various flavours during that run, but at one time B2B was the thing)

-  Investment banks

-  Green investment vehicles

-  Hedge funds

-  "Blockchain" (as a buzzword) /  crypto

-  Commodities trading (as a specific hedgie emphasis)

-  "AI" (as a buzz-phrase) / LLMs

Now, it seems, space flight has a massive vogue.  This one differs a bit, because to enter this field at least a high percentage of recruits will need to be decent engineers of one stripe or another - actual hard graft!  For some of the others, BS + "potential" were the criteria; although the ability to do Hard Sums also featured.

So - what do your bright young acquaintances all aspire after?  What is going to cream off / trendily waylay the next generation of ambitious wannabes?

ND

Father Ted: 30 years of comic joy

Some things that come your way are so engaging, they are automatically memorable, no effort required.  As with most memory-related issues, this is probably a stronger phenomenon with those of, errr, fewer years on the clock:  at a time where nobody could readily muster a tape recorder (and long before video), we'd all turn up at school reciting, word-perfect[1], the best lines of complete dialogue from the previous day's Round the Horn, Monty Python and Sorry I'll Read That Again.  And I can still give The Glidd of Glood (albeit that masterpiece is now available online now - but I've always been able to since first broadcast, long before ... etc etc).

Topping the charts, so far as I am concerned, is Father Ted.  So many extraordinary set-piece gags, many of them just a couple of seconds long [You let Dougal do a funeral?!], strung together in perfect half-hours strings of pure pearls.  And now it's been 30 years ...  scarcely seems possible.  Three short series, one superb Xmas Special; just 25 episodes.  And then Dermot Morgan dropped dead, 24 hours after filming the last one.  That's heavy stuff, as comedy goes.

A decade or so ago, business took me for a sustained period to Dublin.  To my delight, in the office where I was consulting, of a quiet moment[2] or in the staff canteen during lengthy ad hoc mid-morning breaks[3], someone would launch an apposite Father Ted line, and everyone would gleefully chorus the script that followed.  Happily, I was able to join in.  Taking care not to regale them with my attempt at an Oirish accent ... [4]  

Your nominations, please, for best Father Ted one-liner or five-second clip.  Here's a good one for starters.

ND

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[1]  At least that's how I, *ahem*, remember it ...

[2]  There were, just occasionally, quiet moments.  Mostly, it was uproarious.  A remarkable "working" environment - highly enjoyable & something of a career highlight in its unique way.

[3]  Over the massive rock cakes they would all eat.  "Mid-morning" pretty much started at 10:00. 

[4]  Unless the occasion called for the Cork accent, as some sketches do.  Dubliners (including Ted himself: A Song for Europe) affect not to be able to understand it, and they don't mind a bit of mockery in that direction.

PS: I can't resist one more story.  The department held a quiz night in a big upstairs room in one of those rickety pubs you get, even in the smarter reaches of Dublin.  Beer flowed, the craic was amazing.  Spot prizes were given throughout the proceedings, and one of these saw a likely lad summoned to the front to receive a smart little box.  This he ceremonially opened before the assembled host (senior management present), and exclaimed in disgust: Aaah, shoite! Feckin' commmpany cofflinks!  As they say in those parts, you Brits think Father Ted is comedy, but actually it's a documentary.

EDF and its nukes: "we're sh*t, and we know we are'

As so frequently stated hereabouts since forever (since 2007, to be precise), the whole point of French energy policy is to have someone else pay for France's humungous nuclear decommissioning liabilities. 

Now they'd like "negotiations" over Hinkley Point C and Sizewell C to be merged into one big financing deal.  Well, well.  

First of all, what "negotiations" are needed over HPC, pray?  We already have a definitive financing deal: a binding contract that clearly has EDF on the hook for the stonking cost overruns.  (Its alternative is to walk away: such is that inane deal, struck by the dickhead Osborne and signed by the fragrant May, that EDF is under no obligation to finish the thing at all.)  Do contracts signed by the French mean anything?  Silly question.

Second, why would we buy a second nuke - of the very same design - from the same imbeciles who clearly acknowledge they can't finish the first, under a different deal structure where we are on the hook for the inevitable overruns?

Is there any point in telling Starmer and Miliband to grow a pair - maybe just one pair between the two of them?  EDF are shit project managers; and successive governments have been shit negotiators.  Each deserves the other.

ND 

Self-sufficiency steel? Ore? Coal, oil ... gas storage ..?

The old debate we often return to, has surfaced again a propos of steel manufacturing.  To what extent is self-sufficiency in strategic commodities and capabilities to be maintained?  Procured?  Or even desired?  Some have strong inclinations to one extreme or the other, whatever the prevailing circumstances.  I tend to say that there's no immutable answer, no formulaic way of "optimising".  War and peace are critical input variables: but also the key given fixed externalities.  China has no oil, as I once diplomatically reminded a Chinese commissar who had just scorned Europe's enthusiasm for electricity interconnection and stated that a nation should not rely on imports of such a vital resource.

In the here and now, I and many others would put primary steel manufacturing on the strategic side of the line.  Clearly, Starmer has taken the same view at Scunthorpe (though curiously unmoved by Port Talbot, as the Welsh Nats bitterly remind him and indeed by Grangemouth / SNP), leading others to note that those vital "raw materials" we were all on the edge of our seats waiting for ten days ago, came from, errr, elsewhere (abroad).

Then comes Nils Pratley, extending the debate to gas storage and specifically, Centrica's huge offshore Rough storage facility.  Pratley is usually quite sound, and here he sets out a reasonably balanced range of pros and cons.

Steel was a security risk. What about UK gas storage? The government refused to allow steel furnaces to be turned off. Should it be happy with just six days of stored gas?

So here we go again.  

Nobody could disagree that now and for many years to come, gas ticks the 'strategic necessity' box.  Since we ceased to be self-sufficient in natural gas in terms of production from our own territorial waters (the early 00's), without any government intervention or subsidy the miracles of the free market secured a healthily diverse range of import sources and facilities through which to convey them.  How so?  We've told this story before.  

Because the decline of indigenous production could be, and was, seen coming a mile off, demand remained strong, and the companies involved were themselves strong, capable and confident. And that's where we are: able (as the energy crisis of 2021-3 showed) to withstand remarkable buffeting from the global market, and still keep homes warm.  For sure, the cost of doing so [i.e. paying world prices] was to some extent socialised, but the means of doing so were free-market means.  

And all this happened without Rough, which had been "permanently shut down" (© Centrica 2017 et seq) some years before as being uneconomic to its owners, the Tory government having more than once declined to bail them out.  But lo!  Miraculously, it transpired Rough had not been permanently shut down, but merely mothballed, and was rapidly pressed back into service by Centrica to avail itself of the profitable opportunities presented by Putin's gas crisis.

See, here's the problem in this very particular case: Centrica has form as a would-be subsidy-farmer.  That's the trouble with going down the "strategic" road.  Just like "green" or any other government-favoured enthusiasm, once the subsidies are spotted, every man-jack starts greenwashing / strategy-washing or whatever.  It becomes very hard to disentangle what could be a respectable strategic case from their self-interested special-pleadings.  

Even in 2025, with that recent crisis experience in hand, for all the ticks that natural gas puts in the 'strategic necessity' box, I'm not sure Centrica should be indulged.

ND 

Easter sermon: the 'religious' Russian character

Icon, pressed into military service        see Update note below:  (Russian MoD)

So Putin has graciously declared an Easter truce[1], doubtless hoping to impress the simpleton Witkoff.  A little while back we had a long thread in which the matter of judging Russian attitudes to this and that cropped up BTL.  I said I would add some additional thoughts to this suggestion regarding how Russian propaganda goes down with Russians:

[Russians] are, at the same time, (a) very good at reading between the lines; but (b) "believing" the crap, in some strange way. It's a bit like "well obviously this is crap, but it's our crap". I find this has religious echoes: "well obviously transubstantiation is, errr, a bit odd - but it's what we believe" Orwell, of course, suggested "Doublethink" as the technique involved. Western psychologists use "cognitive dissonance" - at least, when the doublethink is causing psychological disquiet: but that's what is notably missing from many Russians, which is why I reach for a religious-type explanation

There's an additional reason for religion coming into the account, and not just because today is Easter Sunday.  Russians are strikingly religious, with a small 'r', in ways that the ancients would have understood rather than how we understand it now in the west.  They are not even remotely all practising Christians, or "believers" as they they term it: that was thoroughly shaken out of the system by the militant atheism of 20th century communism (although a wholly quiescent Orthodox church survived, of course, even in Stalin's long reign; and he reignited it to a degree - for his own narrow purposes - during WW2).  But as, in their own way, is the case with many of Judaeo-Christian-heritage in the USA and Europe, Russians very clearly recognise their Orthodox heritage, which under Putin's regime (building on Yeltsin's) has been progressively bigged-up in several very public ways, including the rebuilding of a mighty cathedral in Moscow and Putin himself engaging in various devotional practices, consulting priests for omens etc.   

But the average Russian can also appear totally godless in their everyday behaviours and attitudes.  (Read this account of the extreme brutalism inherent in the Russian military, and by extension in society more generally.)  In what sense, then, are they 'religious'?  In short, I suggest it is in the same way that the ancient Romans insisted very forcefully on their own piety: by giving a form of recognition to superior powers - of some ill-defined nature: the gods, or the fates, if you like (Russians are nothing if not fatalistic) - powers that are "out there"; that are extremely powerful and, what's worse, capricious; and that demand from mortals respect , but not any particular ethical conduct or way of life.

Here's the thing that will come as a surprise to anyone not following Russian writings on the war in Ukraine.  There is a major, officially-endorsed campaign underway to make the war a religious crusade.  Two aspects will illustrate it: suspend your disbelief and research it for yourself if you find this hard to credit.

Firstly, no end of religious devices are being deployed in support of the war - going way beyond a bit of morale-boosting and comfort from the padre.  Well, they say there are no atheists in a fox-hole, but ...  The earthly remains of various saints and historic Russian figures are being circulated around the frontline - often, broken up into bits so as to increase the number of troops that can receive the spiritual benefit of close contact with these relics.  Crosses bearing Putin's initials are being distributed, particularly to troops in the most dangerous positions.  Priests are officiating at all manner of exorcisms and the conferring of blessings[2].  When these measures prove ineffective as, curiously, they often do[3], all manner of dark rumours circulate as to what it all portends.

Secondly, a campaign is underway to eliminate neo-paganism from the soldiery at the front. 

I need hardly go on: you already think I'm kidding.

Hence, why one might readily look for a 'religious' aspect in how propaganda works in Russia.  If it comes across as an edict from on high, well, the audience hasn't lost its cynicism or ability to detect BS[4].  But they are inclined to 'accept' it.  It's their BS.  Let Trump not imagine he readily knows how to deal with them.  

Happy Easter!  To believers and non-believers alike.

ND

UPDATE: as luck would have it, the Russian Ministry of Defence just published the above pictures, with announcement here.  What it doesn't tell you is that Putin has initialled this beautiful replica icon in two places: but it was decided not to include this aspect in the official announcement.  

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[1]  Kadryov's militant Islamic 'Akhmat' Chechen forces are flamboyantly breaking the Easter truce, and publishing videos, just to make the point

[2]  Here's Khinshtein, a Kremlin apparatchik appointed to oversee the 'liberation' of the Kursk region occupied for more than 6 months by Ukraine, having his office blessed 

[3]  Examples: (i) when bits of saints are blown to smithereens as the golf-cart conveying them to the front is hit; (ii) when priests conducted a ceremony on day three of a particularly problematic fire at an oil depot, in order to advance the work of extinguishing the blaze; whereupon one of the fuel tanks promptly exploded and the fire burned for more than a week thereafter.  (Have you made contact with the right side, oh hieromonk?)

[4]  Russian milbloggers often provide assistance for those who can't decode it for themselves.  I particularly enjoyed the acid comment following one of the endless reports of a drone being shot down over a Russian oil facility with "fragments of the destroyed drone causing a fire".  Shooting down a drone directly over the target like that, the milblogger drily opined, "is a posthumous achievement". 

"... knows one sex from the other ..."

My tiny baby brother

has never read a book

Knows one sex from the other

all he has to do is look

Doin' a-What Comes Naturally**, from Annie Get Your Gun

Well yes.  And we get there in the end (if I may use that phrase) as the Supreme Court makes an intelligent ruling on a key aspect of the trans nonsense.  It remains to unhook the NHS from that lunacy.

There are two aspects to this I find very interesting.  Firstly, not so long ago the mainstream progressive left had been wholly captured by the "Self-ID Trans" madness, so that it was de rigeur to mouth "some men have a cervix / some women have a penis" etc etc.  I had this down as a shibboleth, a marker of progressive belonging, being so deliberately crazy that it took a major effort of intellectual self-abasement to adopt it - like any uncomfortable initiation test.  Yes, in order to be a Catholic in the Middle Ages you had to sign up for literal transubstantiation; and to be one of the Progressive gang, you are obliged to pretend you believe that a trans woman is literally a woman.  Well, make that "are" into a "were", because I don't detect any of that on the mainstream left just now (though still perhaps amongst the Greens?)  Mercifully, it evaporated some time over the last 12 months or so - something to do with the General Election, I'm guessing.  A very big relief to many, we may be sure.

Second, however, is something that seems to be taking its place, and might possibly be around a bit longer.  There seems now to be a reaction of, well, the Supreme Court's ruling is what it is, but the whole matter is so complex and "granular", it doesn't resolve the myriad of practical questions.  The efforts made to make the waters seem as muddy as possible range from the properly nuanced to outright sophistry.

Armed with the SC ruling as a thoroughly commonsense-affirming breakthrough, we can cut through this second-tier crap relatively easily by noting that society often has annoying problems when willful, sometimes rather unfortunate people are determined to behave oddly, noisily and angrily in public.  Can these ever be resolved by the Supreme Court?  Well, no.  It's not the SC's job, but rather, the thankless task of unfortunate school teachers, policemen, NHS staff, HR directors etc etc.  As with stroppy children, be they genuinely disturbed or just playing up, the key is to steer them gently but firmly and confidently into some sensible, pragmatic, quietist outcome.  Easier said than done, I know - but it's the eternal (and hopefully only occasional) lot of responsible adults.

ND

________________

** The film version of this song is slightly bowdlerised: the original contained some fruitier verses 

British Steel [2]: where IS *Immingham*?

As recounted here before, in every energy co I worked for I always took every sensible opportunity to visit the plant - and make my staff do the same.  In an intrinsically physical business, a decent first-hand understanding of the hardware, the people that operate it, and the issues they must deal with, is IMHO damn' important for every one of a multitude of reasons.  (That includes getting the most and the best out of those folks on a sustained and sustainable basis, BTW.) 

With that as one's attitude, one quickly gets to share the disdain of the folks at the plant for those who treat the industrial nitty-gritty as something rather alien that happens somewhere, who-knows-quite-where, but in any case a long way from London & the Home Counties.  Is "Teeside" on the River Tee, perhaps?  It is in this spirit that over the past few days I have caught two different broadcasters offering the following couple of gems:

    "Scunthorpe get its raw materials** from somewhere called Immingham ..."

    "... the port of Immingham, in the North East of England"

That would be, errr, the second largest port by tonnage in the UK - wherever this obscure place might actually be.  Finally and at last, today I heard "... from Immingham, 20 miles to the East".  A simple and correct relativistic formulation which absolves them from knowing where either town actually is.  

Of course it's also somewhat rich to hear Greens and progressives of the non-labourist ilk eulogising belatedly over retaining a domestic, coal-fuelled virgin steel manufacturing capability, for building all that wonderful Net Zero kit, new houses etc etc, doncha know?  Well yes, here at C@W and its BTL friends, we always did know.  Pig-ignorant metro-gits.

ND

_________

** I swear the whole weekend went past without that convenient blanket euphemism "raw materials" being explicated as dirty old iron ore and COAL 

Are they mad? The new legislation on British Steel

Extremely odd things are happening all over just now and perhaps we are becoming inured to disturbing novelty.  In the UK, some might date this to 2015 and the rise of Corbyn, passing through Brexit, in an ever-rising, ever-accelerating crescendo of covid, Ukraine and now the daily lunacies of Trump.

Personally, however, I have rarely been more shocked than when I read this today: 

Emergency legislation allowing the government to instruct companies to keep loss-making steel operations in England open, or face criminal penalties for their executives, were passed yesterday during an extraordinary sitting of parliament.

For context: I bow to no man on the strategic imperative of being able to make steel in this country.  (Obviously, not everyone need agree.)  Nor do I object to swift and decisive use of the levers of power: in fact, more often I am criticising the inertia and lack of imagination of those who hold those levers limply in their idle hands.  

And I don't have the time to read up on the exact legislation in full, which may, I suppose, in the round be less shocking than the above summary suggests.  

But ... criminal penalties?  For an economic "offence"?  Obviously, there are such liabilities upon employers that flout health and safety regulations.  But financial affairs are intrinsically civil matters: are there any other even vaguely equivalent precedents?  The "personal liability" precedent that came immediately to mind to this former councillor was Thatcher's legislation on local authorities: to prevent rogue "socialist" councils like Lambeth and Liverpool from taking the piss at annual budget time, she made the chief finance officer personally liable for balancing the budget, with powers granted to the said official to impose balance if the democratically elected members persisted in mulishly voting for infeasible financial plans.  But these were not criminal matters.  Is Starmer proposing to bang up Chinese nationals ..?  Who was it that thought a sober grey lawyer would at least bring stable, rule-of-law government to the land?

Legislate in haste, repent at leisure.  In the wrong hands this precedent will be a joy to every mad leftist and green in the land.  You pick a piece of policy, and declare it a criminal offence to carry out any act inconvenient for said policy, property rights be damned.  What am I bid for failure to install heat pumps?  "Well, climate change threatens the well-being of everyone on the planet, it's preventing genocide we are talking about here!  It's obviously a criminal matter!!"   You can generate further nightmares for yourself.  Or indeed, generate a few prime candidates of your own for criminalisation!  It needn't only be leftists that play the game: we can all join in, see how they like that.  We are constrained only by the limitations of our imagination. 

Am I alone in my state of shock at all this?  Or do I just need to read the whole thing properly, and calm down?

ND

Volatility rules!

VOLATILITY is a bit of a speciality of mine.  When natural gas was first traded, that was in the teeth of assertions from certain no-nothing economists, purely on fallacious a priori grounds, that gas was a "paradigm case" of a commodity that could not be traded.  The market price routinely exhibited vol that was unparalleled for a liquid traded asset (barring the odd rogue stock), and the economists crowed: there you go, this is set for crash-and-burn.  But as the market matured, and was self-evidently not crashing / burning, and the vol persisted ... it became apparent that it was a feature, not a bug, for which reasons can be adduced.  The maths of gas market price-formation and vol was quickly established, and everyone with a stomach for roller-coasters settled down to enjoy the ride.

When electricity was first traded, well, that was considered  even more deeply impossible by the aforesaid eejits.  And electricity prices manifest vol that was completely off the scale - some three orders of magnitude higher than previously encountered anywhere (except nat gas - just one to two orders higher).  And the maths of elec price formation proved much more difficult to establish.  But established it was, and off we went.

It is first-hand experience of all this that informs what follows.

1.  Volatility is like heartbeat, or (switching idioms) friction.  No heartbeat = no life.  No friction = no traction.  But too high a heartbeat, and you're also looking at death.  Too much friction, and you are looking at everything grinding to a halt.

2.  Some folks benefit from vol:

(a) those who've placed market bets on vol, which is fairly easy to do if you understand financial derivatives.  Easiest of all, for stocks & shares there is the "fear index", a.k.a the CBOE Volatility Index (VIX).  Needless to say, this is riding high right now.

More generally, for those to whom these terms are familiar, you can put on long calls and an equal number of long puts, with the strike-price either at, or either side of, the current price (depending on your precise strategy and how much premium you are willing to pay).

(b) those who've invested in 'flexibility' assets, a.k.a optionality in the financial jargon; e.g. (in my neck of the woods) a flexible oil refinery (which can benefit from volatility in the prices of crude oil and finished products); a flexible gas-fired power station (prices of gas, power and carbon); a flexible gas storage facility or electricity battery (prices of gas / elec now, and forward prices of gas / elec for forward time periods; a flexible power interconnector (prices of elec here, and over there) etc etc etc.  As vol goes up, the value of your option-asset goes up.  As Black & Scholes proved, in their Nobel-prize-winning work, vol is a primary component of option value.

 3.  For everyone else, high vol, like high friction, is unequivocally a cost.  And eventually, when we reach the upper end of the heartbeat / friction spectrum it weighs on everyone.  The cry of "risk off" goes up, and big players withdraw from the market, at which point another critical variable - liquidity - starts to loom very large.  There are b-a-d things down that path, too.  Don't let the know-nothing optimists tell you this is all for the best in a funny sort of way.  It ain't.  It's unequivocally bad.

Much more of Trump's casual lunacy and I think that end is in sight.

ND

Estate agents: getting "creative" again ...

... but this time with a pair of expensive new-builds and the CGI set to "turbo-bollocks".

Our previous two gems of the estate agent's art featured creative euphemisms for "surrounded by dense woodland and distinctly short on basic amenities" in the vicinity of Schloss Drew.  This, also in Croydon, is different:  we're moving to the brave newbuild world of 7-bedroom, 6-bathroom, 4,000 sq ft Executive Housing, smack on the A232 - a very busy main road that boasts five bus routes passing the front door sorry, good transportation links.  Only smart CGI is good enough for these.

"... proudly occupying an enviable raised position"

Looking nice, eh?  As well they might be, this "grand opus of luxury living ... pinnacle of sophistication" is asking £1.7 million** for each.  But look carefully: any sign of a garage or two for these upscale dwellings on a main road?  Errr, that would be 'No': all you get is "Parking space - driveway" - and for the left-hand one, a very modest driveway it is, too, down the side: enough for just a single car by the looks of it, maybe two - in tandem - at a pinch.  And a fine feat of reversing will be required for the one on the right, because the only road access is via the ramp on the left, and thence on up across the front of both houses.  And this is for 7-bedroom houses, FFS.

Now: consider the access driveway ramp to that "enviable raised position".  Nice broad gentle slope, fairly scenic?  A gentle rise of 8 steps, past grass and bushes, for pedestrian access to the front door?  Enough of the CGI, here's a photo of the thing taken today.  That front retaining wall is an absolute necessity for the looming mound behind, especially over on the right where the number of steps is 12, not 8 (11 steps on the left).  If anything that ramp off the main road is even steeper than it looks here: "pinnacle" indeed. 

The garden at the back is precipitous, too.  And just to round things off, here's another actual photo - from the estate agent this time, boasting of a "leafy outlook" to the front. 

Errr, yeah, in summer when the leaves are out, if you confine your gaze to the street-side plane-tree top-cover.  Otherwise, it's a procession of bright red double-decker buses.

The only saving grace, I suppose, is that folks always do their DD for a house purchase in person.  Don't they ..?

ND

_____________________

** by way of calibration to local prices, £1.4m will buy you this, on the genuinely prestigious estate on the hilltop directly behind the above new-builds, but comfortably off the main road.  

1930's: a bit dated but very solid build, these properties buff up beautifully for a couple of hundred grand: splendid garden: all on the level: backing on to a fine park: immaculate - check it out.  And, errr, no shortage of parking!

Photo credits:  the last pic is ShineRocks estate agents.  If the copyright holder of the CGI confection above would like to be credited, just drop me a note in the comments and we'll be happy to name you.

"UK to be Superpower" & other Starmerite nonsense

Those few very-longtime readers we still attract, might recall I spent a while on business in The Gambia a decade ago, and very educational it was, too.  One of the things I learned was that by the time of roundabout now (i.e. 2025) The Gambia would have become an *Economic Superpower*.  Sic!  You can read about it here, in this rambling presidential state-of-the-nation address of the time from His Excellency Sheikh Professor Alhaji Dr Yahya Jammeh Babili Mansa. 

And what a state the nation was in!  (E.g. no 'phones in my "4-star" Sheraton, no reliable electricity, etc etc.)  But I think his noble mission has failed.  He's no longer around to carry the can, however: he was deposed shortly afterwards in an unusually peaceful coup.

Which brings us to Starmer, Reeves, Miliband, and their curious brand of self-aggrandizing nonsense.  First, you recall, we are to become a "Clean Energy Superpower" - by 2030, I believe.  That's without having a manufacturing base for solar panels, wind turbines, even steel these days (can we still manage concrete?), nor a workforce of adequate skills or size.  Perhaps "clean-energy-equipment importing superpower"?  But it doesn't have quite the same grandiose ring, does it?  Everyone in the government photo (from the link above) seems to think it's pretty funny, and I'm sure we all get the joke.

What, and defence too?  Minister, stop, I'll wet myself!!  

Anyhow, not satisfied with this newly-minted aspirational status, we are also now to become a "Defence Industrial Superpower"!  And that, too, without, errr, a manufacturing base for chips, steel, ... etc etc. 

Amazing stuff.  I am sure the rest of the world's minor powers are shaking in their boots.  With laughter.  Meanwhile, our bold triumvirate of superpower-mongers might care to study the fate of his Gambian Excellency.  

ND

Business Blunderers #1 - cont: it gets funnier

Continuing the story of Sir Archibald Forster's Big Business Blunders ...

For a period in the 1980s, the old monopoly British Gas had been paying ever higher prices for new long-term purchase contracts from North Sea gas producers: it was a sellers' market.  This came about from an archetypal monopoly planning cock-up: they'd contracted vast quantities of gas in long-term contracts during the huge boom of the late 1960's, priced in single-digit pennies per therm.  Being thus sated, they'd bought very little in the 1970s.  One day, they re-did the supply/demand sums and noticed - guess what? - a looming shortage!  Owing to the low gas price and, at the same time, booming oil prices after the twin crises of 1973-4 and 1979, everybody was exploring only those hydrocarbon plays that looked set to yield oil.  And new gas developments take several years to bring on stream.  

So, being a monopoly and not caring what things cost (they know who's gonna foot the bill, haha!), BG did the rounds, telling everyone that they'd be willing to pay more than 20 p/th - a gigantic price increase - for any new gas supplies that anyone could develop.  (The output of an entire field would be sold under a single contract for decades of delivery, years in advance.)  This sent every NS producer back into the vaults where they stored their old drilling logs, looking for long-forgotten gas discoveries they’d ignored as being totally uneconomic at those 1960’s prices.  Sure enough, new gas fields began to be offered and, true to its word, BG started a price-ramp of several years for new gas that by the mid 1980s saw prices in the high 20s of p/th.  A classic sellers' market phase in the great commodities cycle. 

Though no gas expert, Archie, headstrong Esso Chairman & CEO, somehow got it into his head there was no end to this ramp.  Esso had enjoyed a couple of big sales at stonking prices in this period, and one of his JVs now had a couple more new gas fields to offer BG.  Forster decided that he would triumphantly be the first to breach 30 p/th.  He convinced the JV partners to go along with an eye-watering opening offer of 34p.  Many of us were unconvinced, but were willing to go along for the ride.   Unfortunately, thus emboldened, Forster flamboyantly guaranteed to his Exxon overlords that a price in the 30s would in due course be delivered.  Sadly, he’d failed to notice the laws of supply and demand grinding slowly into action.  High prices bring forth, errr, lots of supply; and he’d not heeded warnings that a glut was coming inexorably down the production-line.  

When his hapless negotiators rocked up at BG, in response they got given a long and detailed list of new fields currently on offer.  BG stated it would only need to buy a couple of these, and told them to go away and recalibrate their aspirations to less than half of what they’d walked in the door with.  Yep, we were now in a buyer's market.

Cue carnage at Esso: was this right?  Why didn’t "we" see this coming?  Etc etc - the usual search for scapegoats.  It would have been fun to be a fly on the wall when Archie broke the fell news to his US masters; but BG was right: it was indeed sitting on a glut, as a bit of belated due diligence readily confirmed.  For its new gas fields Esso subsequently settled for 16 p/th**.  A salutary tale indeed. 

So many life-lessons - as my 11-year old granddaughter would say.

ND

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**  There's another lesson here.  In order to "justify" asking for 34p/th, the negotiators had been primed to say that detailed engineering confirmed this was nothing more than was needed, based on the ever-rising cost of offshore development.  Gosh, yes.  The JV had indeed concluded internally that a price in the high '20s was needed, even if 34 was taking the piss.  So: how come we didn't pack our bags and just go home, sadder and wiser, and leave the stuff in the ground?  

Answer: huge engineering projects build up serious momentum (see HS2, Sizewell C etc etc).  Big project teams had already been assembled: plum jobs awarded: a great deal of engineering work already done: we were not about to walk away from these sunk costs.  The teams were told to take out their sharpest pencils and bring the costs down - massively.  And lo - they succeeded!   As I've found many, many times in business life, engineers, like so many of the rest of us, are basically lazy and complacent; and if they think money is no object, they pile it on.  ("Safety" is the usual reason given for gold-plating - and who dares to second-guess them on that?)  But if they are told their jobs depend on it, suddenly they are capable of amazing innovation and rationalisation!  It is ever thus.  Only a good kicking does the job.

Miliband's perfect positioning

By way of elaboration on my assertion last week that Miliband can't remotely be discounted should Starmer topple in the near future, look at this telling chart from the loyalist LabourList platform and its Survation polling:

Survation / LabourList:     click link above for full-size

Every Cabinet member has seen their ratings fall after Reeve's efforts of last week: but L'il Ed's fell the least by far; and with Rayner heading west with all the rest, he's now miles out in front with Labour supporters.

He'll be making very careful decisions in the event his damn-fool energy policy dreams come under even more pressure from Reeves and her Growth-At-Any-Cost strategies.  Would yet another serious slap in the face be the ideal time to quit?  Or exactly the moment not to rise to the bait, and to hang on grimly instead, making the usual offstage noises and pointed absences that ensure everyone knows his true feelings?  The almost-iron rule of UK leadership elections is that Leaders of the two main parties only ever come from the ranks of the Cabinet / Shadow Cab.  And whilst in government, when the Chosen One becomes PM immediately?  That really is an iron rule.**

ND

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** The Corbyn Exception relates, of course, to a period of opposition - and even that needs qualifying for special circumstances, because there was only a 'shadow-shadow' cabinet in being during the short inter regnum of Harriet Harman, following the resignation of, errrr, one Ed Miliband.

Trump's Tariffs: the uselessness of economists

I heard a nice joke the other day:  

After astrology, came astronomy.  After alchemy, came chemistry.  And after economics ..? 

The world has been watching and waiting in a state of fear and loathing for Trump's long-awaited, bizarrely-telegraphed barrage of punches.  What will happen now?

To me, the hilarious aspect is that nobody has a clue.  I suppose everyone agrees it will act as a brake on world trade.  Well, duh.   OK, and ... ?

If macro-economics means anything whatsoever by way of a 'science', there should be a definitive answer when such extreme measures are taken.  And to me, an avowed econo-skeptic, this all looks to be as significant as, say, the oil-price hike of 1973-4. 

Anyone round here got anything better?  What we're after is solid, unequivocal, drop-dead economy-related predictions beyond the short-term and the trivial.

ND

Business Blunderers I Have Known (1)

Continuing from Jailbirds and Rogues ...

Archie Forster (Sir Archibald, 1928-2001) was Chairman / CEO etc of Esso = Exxon-in-the-UK.  I met him occasionally, he being the top Esso participant in a joint venture I was involved with.  He was a cheerful, bustling cove, but his business history told clearly of a dynamic and steely character, with much conventional success along the way (within the one-company career - and Exxon is an odd company). 

Once he got to the top, however, there were reasons to doubt his judgement and what must have been a heads-down, over-confident, solo decision making style ...  

The first story revolves around his determination to cash in the very valuable SW1 HQ property Esso occupied for many years - 1,200 people, multi-storey carpark, occupying more than an entire block on Victoria Street - and move somewhere cheaper.  Esso's geography dictated somewhere west and possibly south of London: its worldscale refinery is at Fawley, near Southampton;  it had a smaller refinery at Milford Haven; a research centre at Abingdon; and, not coincidentally, Forster lived in Winchester.  When we met Esso folks, they'd give us the latest office relocation update like Father Ted used to update Dougal on tales from the confessional: although it was meant to be secret, all the Esso guys had their contacts in the company treasury who would tell them the addresses of where they were sending the latest batch of cheques made payable to estate agents.  And so we learned of the search progressing along the M4 corridor, right out to Swindon - but seemingly there was something wrong with all of the sites they were offered.

Suddenly, a breakthrough!   A big, cheap, brownfield site (the old Goblin Teasmade factory) became available near Leatherhead, right on the M25, on the London side of the motorway.  Forster was delighted.  Excellent transport links; south-westerly from London; and, he had heard from somewhere, if the move was within the M25 - and it was, just - no redundancy would need to be paid to staff that didn't want to leave SW1.  Shedding staff without cost was part of the cunning plan.

Boy, was he wrong.  (a) The 16 miles between SW1 and Goblin is far further than a move which is of such short distance, it lets you off making redundancy payments.  Oh, and (b) although smack on the M25, it was not on a junction, and the nearest one is an absolute pig at rush hour.  Loads of staff considered Leatherhead / M25 a much different proposition to the comfortable public-transport journey to Victoria SW1, and took the money.  Being an upfront cost, the fat redundancy bill significantly impaired the deemed economic benefits of the relocation exercise, even if losing staff was part of the plan.  But he ploughed on anyway.

Embarrassing enough for his dealings with his masters in Florham Park NJ: but the second tale is, if anything, even funnier worse ...  to be continued.

ND