How We Love The BBC

And not just for its industrial-scale tax-dodging exploits.

Prepping for the QT quiz on Thursday, and being in Dublin, I reached for BBC breakfast TV; and there was a sober item from Southampton University. Apparently there is some daft new government scheme tightly regulating what A-level requirements universities can now make, and in Southampton's case this has meant, unexpectedly, an intake of 600 undergraduates less than anticipated.  They say that the kids they were unable to extend offers to were genuinely uni-material; and that the budgetary impact of being 600 down is a real problem.

The in situ Southampton interviews were conducted against a back-drop of student breakfast in a University refectory, where various details of the breakfast fare on offer were incidentally on view.

Now I don't know the rights and wrongs of all this - it's a BBC morning TV 'package', after all - but the issue did indeed seem to be a serious one (here's a related Grauniad piece if you're interested).

So then they cut to the studio, and our sofa-borne hosts respond thus:

"was that 'Any 7 items for £3'?  - that's quite a breakfast !"

"yes, it looked really good !"

PAYE scandal ?  How about - why do these people get paid at all ?

ND

Actual ways to fix the deficit; part 1, NHS Privitisation

The UK Deficit and national debt is on the road to hell. With record emigration and immigration the Country is losing its tax base whilst also accruing more and more long term benefit costs as the population ages.

The sad facts are that as much as Labour and Conservatives go at each other, arguing about where £3 billion goes here and there does not really make any difference. The problem with the numbers we have is in the trillions of pounds of problems. Even the annual deficit is well over £100 billion a year - more than the take in VAT for example - and that is just the overspend.

So, if we lived in a real world where people were actually allowed to say the truth rather than deny reality (we know we are not in a real world because the Euro exists and all the politicians in Europe say it will live forever), then we might come up with some radical ideas.



How my NHS would look

 In the 1980's there were some very good privatisations, in the 1990's some less good ones. But if you want one off hits to really help reduce Government debt then privatisation is the way to go. People come off the state payroll and get real jobs instead that pay real taxes, efficiencies can be delivered and saves have new businesses to invest their savings capital into. We end up with a smaller state, taking in more tax. It's a win-win.

However, in the UK lots of the good asset sales have been made, Aviation, Utilities, Telecoms, Rail. There are a few left like Roads, but the tax take is already disproportionate so its a hard sell.

There is only one standout institution left - this is the NHS. Some hospitals in the US make profits of up to 25% (somewhat egregious it sounds, but having been to some the service is great). The NHS budget is about £110 billion. A huge amount, more than is collected by national insurance. If hospitals were privatised, the interest from the private sector would be huge. The various regional or specialised businesses would raise probably over £100 billion  - maybe nearer £150 billion. This is would be a big dent in the deficit, even if we did not allow for any further rationalisation in the business.

Better yet would be to encourage a part-privatised system of insurance for those that can afford it as in France, to replace national insurance and create another new private industry that would generate more jobs and wealth.  

With better offers of healthcare, it may even be we see spending overall on healthcare continue to increase, but as the increase would be in private spend rather than state spend, the effect on the Treasury would be good rather than bad.

Of course, I can imagine people reading this are now worrying about my own mental health. there is no chance of this happening in the UK with Labour and the Tories out-doing one another in their commitment to state-sponsored penury via unsustainable health spending. It's Friday, I like humour on a Friday but this is tinged with regret that no radical solutions are currently being put forward to try to turn the Country around. It is very 1970's managed decline when we need a 1980's drive for renewal.

Question Time compo

Panelists in Manchester, fresh from conference, include Douglas Alexander MP,{Blairite/Brownite kingmaker} Susan Kramer or Baroness Kramer. orange book liberal, and Willie Walsh, hate figure of the left for being a predistributer cap-predator-poncer or something. + expected Ken Clarke {former every ministry under the sun, current roving minister without an office. And Janet Street Porter for the billionth time.

Enter your guess for what you believe the entirely balanced and impartial regional audience will ask of the panel. maximum of 5 guesses allowed. Various special rules apply that are hidden in the terms and conditions even more cunningly than on your mortgage application.

BQ predicts.

1. One Nation under a groove Miliband {its a gift for Lakelander }

2. Planes, trains and contracts under seal

3. Turkey and the coming mid east war.

4. Police funerals and Manchester's gang problem

5. Inflation? dunno really...

Over to you.

Ed Milliband - An empty Prime Minister to be

At least we know now, Ed Milliband knows absolutely nothing about economics. So little that in his most heralded ever speech, he managed just 30 seconds on the economy.

Compared to over an hour of hand-wringing, lefty whining about how the world is not a very good place and would all be better if we were just a bit nastier to the rich and nicer to the poor.  Apparently this follows in the footsteps of Disraeli or some such.

I have been unable to listen to the whole speech in full, given more pressing commitments. On balance it is quite worrying. Labour are likely, barring some large external event, to romp home to an election victory and Ed Milliband will be Prime Minister. To have such a political wonk, with no real experience of running anything, real people or an understanding of how the world works rather than how a wonk thinks the world may work, is pretty worrying.

With the Lib Dems having shaved 10% off their vote the majority of these votes are going to go to Labour if anywhere. So Labour will beat its 29% of the last election and reach more like 35% at worst. So level pegging with the Tories, who seems unlikely to increase their vote and may indeed lose some to UKIP.

Level even being a couple of % behind the Tories will make Labour easily the largest party and Ed Milliband Prime Minister. How Labour fail to get 35% of the vote is beyond me. A lack of Constituency Boundary reform, as Nick Drew wrote here, has sunk the Tories for a generation.

So what Ed Milliband says is of real importance and yet what he actually says turns out to be of no interest or meaning. No policies except further attacks on the Banks (which are OK as things go and are in reality quite small moves from where things will end up under Vickers) and a promise to soak the rich with higher taxes of an undefined nature.

What about the Deficit? What about the National debt? How do we cope with the continuing huge influx of immigrants? How will we keep paying for the NHS? What about really reforming education? What about Trident? What about independence for Scotland?

The list goes on, nothing about any major policy decision. The obvious answer to this to say why give hostages to fortune so far out from an election - my conclusion however is that they don;t have any answers. Just like they didn't last time - spray money around and hope that keeps enough people happy to vote for us. Another dose of this is not going to do the UK any good.

The Cancer at the Heart ofof the Capital Markets

Last week, Martin Wheatley at the FSA was asked to make a pretty rushed judgement on the British Bankers Association ‘s(BBA) setting of the LIBOR rate. As we all know, this is a key rate, less important than it used to be sure, but still key to setting long-term mortgages and bond prices as well as many bank loans.

With the various Global banks involved in the Libor scandal seemingly bang to rights in terms of their guilt for trying to fix LIBOR, it comes as no surprise to learn the Government will now strip the BBA of the right to set it (tactfully the BBA had thrown in the towel earlier) and this will now go to an independent body. Plus, banks will have to quote real trades and not their ‘averages’ and so they will be less able to fudge the numbers going forward. A welcome victory for the market then, with ‘real’ market forces and an independent body be put in charge. As a consequence of the Libor rate rigging scandal, the setting of the Gold rate in London and now various other commodity ‘fixes’ are also under question.

What is also clear to me throughout this whole process is just how much the FSA now distrusts the capital markets, bankers and traders en bloc. If this is to be their new default setting then I can see many more targets for investigations coming. So many in fact the that their action is more likely limited solely due to the FSA’s staffing capacity rather than by the number of potential cases.

Take for example market making in smaller shares in illiquid markets - a real bone of contention for many smaller private investors. The capacity for ‘co-petition’ (as opposed to competition) and for brokers to help each other is huge. Plus, even the FSA admit that around 25% of all trades before major RNS announcements are ‘suspicious’ – in fact they are pleased that this number is actually lower than a few years ago but still substantial and symptomatic of the ‘insider’ riven environment that is the UK markets and that many private investors are sacrificed at the altar of greed due to the information deficiency they suffer. Ask yourself this question - last week Bumi shares fell 20%on the Friday before the announcement of a probe into the company - plainly obvious those “in the know” were stepping aside. What did the company’s broker say? “Nothing suspicious in our book Guv” - despicable!

Then there are the real challenges around ETF’s and so called ‘Delta One’ trades - where synthetic structures do not really hold the underlying assets that buyers think that they do. ETF’s in fact managed to get suspended in 2008 and I personally have not touched them since given the small print they come with that ‘lightly’ informs you that there is no real relationship between the synthetic instrument and the market!

And then the bid daddy of all problems, the one that is technically holding markets back the most – IPO’s. Banks setting the wrong IPO pricing due to vested interests has tarnished the equity markets of late with again Bumi and Facebook being prime examples where billions of pounds of misvaluation occurs… With so few genuine companies willing to risk going public presently, our main indices have become full of foreign natural resources plays and not necessarily for the greater good. We only have to look once more at Bumi this week to see the dangers here of the lack of information and control that concentrated shareholder lists have…

Currently, investment and retails banks are so stuffed with regulatory issues such that they are not focused at all on lending new money – with all the above still on the ‘to do’ list of the regulators, that won’t change any time soon in my opinion.

This post is brought to you by site sponsor Spreadbetmagazine.com

Gazprom: Total Capitulation on Oil

A recondite issue but interesting on several counts.  You may recall the ongoing saga of how Gazprom has refused, loudly and as a matter of high principle, to sell gas on any other basis than with price indexed to that of oil.  How they have been at loggerheads on this with their long-suffering customers since the great gas demand-collapse of 2009 (and have settled with some of them via a price reduction); how their persistent truculence on the issue has caused the Chinese - a natural customer for their gas - to tell them to a take a hike; and how the EC is proceeding against them for this and other behaviours.

(If you don't, click on the Gazprom tag below.)

Well lookee here, what do we find ? - they've sold a decent-sized chunk to Centrica, priced 'at index' - i.e. by reference to UK spot gas prices !  Ain't a buyers' market a wonderful thing for all us consumers ?  To think that this, from the Gazprom spin-machine, was only July !

"the gas pricing debate in Europe is nearing an inflection point with more and more commentators and counterparties accepting the longevity of the oil-price-link over the spot pricing model"

All very interesting, not to say highly gratifying, on at least three grounds. 

• the principle at stake: They Were Wrong, and they know it
• fulfillment of a prediction: you read it here first 

And finally, it neatly makes a point I have been trying to get across to our good friend Budgie.  Now Budgie, you will remember, is strongly of the view that only feeble-minded anglo-saxon free-marketeers (guilty as charged) would be so naive to imagine that other nations will do anything other than pursue their own narrow interests, and open-market fundamentals be damned.  

Well there you go.  The laws of supply and demand can be suspended for a while, by sheer force of stubbornness - but only for a while.  In the long run, this takes more money than, well, more than Gazprom can muster.

Welcome to the market.  It has a way of making itself felt, even to unbelievers.

ND 

The French twist on fairness

Can tax rates at 75% work?

They have been announced after being long trailed as France tries to get it budget deficit in order. Interesting that France is of course running a deficit only half of the UK's; however, starting with a high debt level means that in many ways our positions are fairly similar at a macro level.

75% tax on earnings over a million euro's is not going to lose you many votes, I guess that is the calculation. As in the UK, if it was applied to salaries of over £750,000 then hardly anyone would be hit. Very few work for PAYE wages at this level - oddly, mainly professionals I would imagine like top doctors and lawyers. Most owners at this level would pay themselves dividends in any event in the UK and so avoid that tax in any event. Private Equity earners and Hedge Funds who mind have all legged it to Switzerland already.

Which leads me to wondering why 75%, its such an arbitrary number, why not 100%? If you are going to go down a socialist road like this the 100% income tax level makes a lot more sense, especially at the incredible sum of 1 million euro's a year income and above. Certainly key socialist goals such as levelling societal incomes would be greatly enhanced if you enforced a single, 100% tax on all income over such a level. After all, 75% leaves you with not much anyway given there are sundry taxes to pay as well as this. 100% would be in many ways fairer to society.

And if you were really a serious socialist, you would also impose 100% death duties on all but the family home. That way you could ensure that there was no inter-generational advantages generated, people would spend all their money and so boost the current economy. This would boost fairness measurebaly in society.

Mr Milliband has said how much he admires Francois Hollande - I hope to see some of these ideas in his conference speech.

Question Time returns

The return of Question Time has caught me somewhat unawares. I saw the panel posted on another blog and assumed it was a joke line up... Harpy, Geeky, Moggy, Soppy and Angry.
Alas..it does seem to be true. The venerable show is back with its assorted low fliers,self publicists, lime lighters, aged politicos,hacks and strike makers.

David Dimbleby chairs Question Time from Brighton. On the panel: Labour's deputy leader Harriet Harman MP, chief secretary to the Treasury Danny Alexander MP, Conservative MP Jacob Rees-Mogg, TV presenter Kirstie Allsopp and comedian Steve Coogan

They May Not Mean To, But They Do

Yes, Osborne and his Conservative party strategists f*** it up.

Forgive me if all this is common knowledge but I'm away rather a lot these days.  So, I read that the LibDems are going to block the boundary changes and reduction in number of MPs; but hang on, wasn't that in the Coalition agreement ?  Oh yes, but the LibDems have decided that, having lost Lords Reform (and AV etc etc), they are free to shoot down the boundary changes.  It's all a bit theological.

So I ask Someone Who Knows about these things, and the story goes as follows:  

• The LibDems (not Labour) have the most to lose from boundary changes and were never, ever going to support them
• Nor will the Nats; nor (obviously) Labour
• So they fall
• What's more, they won't even be put to a vote to show the world what complete 4-letter men the LibDems are, because - haha! - the Nats will support it for England but defeat it in Scotland and Wales (it would be separate votes), making their over-representation even greater !
• If the Tories takes this treachery as a pretext to scrap the coalition, under the new '5-year Parliament' rules Lab and LibDem have 14 days to come up with a new coalition, which they surely will do

In short, Boy 'Genius' Osborne and Hague and Letwin and the whole team of Tory 'negotiators' have utterly, utterly, f****d this up.

Now, to basics: back in 2010, was there a more critical issue for the Tories to nail ?  I can't think of anything: this was a once-in-a-lifetime opportunity to fix our outrageous boundary system (forget the reduction in number of MPs), a previous batch of Tories having culpably failed to do it throughout the whole of the 1979-97 period (due to outstanding Labour tactics on the Boundary Commission).

So, knowing (as they must have - mustn't they ..?) the content of bullet #1 above, didn't they realise this had to be structured into the Coalition in such a way as to be proof against LibDem backsliding ?

No ?  Then away with them.  I feel ill.

ND

LIb Dem Conference - is this the start?

Is this the start of a descent into pure madness. I have been excessively busy in the day job this week, which on balance is a good thing; but I note with dismay the ludicrous proposals coming out of the Lib Dem conference.

Clearly they need to win back their left of centre vote, however distant this maybe as a prospect they have to try. So they are trying with an all-out attack on the 'Wealthy' really using the language of the Occupy movement to appeal to their ex-student voters.

Sadly, all the ideas are dismally flawed, wealth taxes are a no, no economically and a certain way to enforce economic decline a la the 1960's and 1970's. Offering pensioners the right to give away money which they can do already under the law is also a little, well, ill-thought out?

But the attack must go on because it is crucial that the wealthy pay for the lack of real cuts to Government spending.

My main worry is that this is the start, the Tories are not happy at being labelled the party of the rich and labour in opposition have the freedom to suggest silly new taxes at will, confident that in 3 years time no one will remember what they were saying. So perhaps the Tories will play ball.

Attacking the rich does not really strike me as a sensible economic strategy, it smacks of desperation to avoid the hard truths about our economic prospects and entitlement culture, again just as in the 1970's when it was wage-bargaining union power and the competitive failings of the state owned industrial base.

One important lesson of the Internet age is the fast transmission of information, people, money - all is movable very easily and efforts to extract more from those who can move will work at the margins but be poisonous in the long-term. if it were a necessary cover for serious reform that would be one thing, but it does appear that it is this scenario in UK politics currently.

You've used all your lifelines...

So, JJB tips into administration.

As an ex-employee of their much more successful rival, I should say Ha-ha?

But not really. From a pure image view JJB always looked sharp whilst Sports Direct makes Lidl look well presented. In market sports casual , or 'sofa clothes' share market Britain price and brand was all important. Mike Ashley at SD buys labels and brings the price way down, volume selling. JD just has better products, even if expensive. JJB never moved on price, preferring to keep its brands exclusive.The poor squeezed middle.

 The model that had made them the largest sports retail company in 2006, was followed long after others were showing how to tread a different path.

JJB is set to close its remaining 180 stores and lose many of its 4,000 staff when KPMG are expected to be appointed to split up the company and sell what they can.  Its long been reported here that they couldn't survive with the Gordon Brown style debts they'd built up in the good times, purchasing other companies and interests that were largely loss making. 

As one wag has written 

"They've had more lifelines than Chris Tarrant." 

So..who's next? Can't see another old C@W  favourite making it beyond the January rent bills. 

HMV , for all the very innovative and solid business plans they have put into place still continues to slide. The Guardian reported that Sales down 14.8% – but retailer hopeful pre-Christmas music, DVD and games releases will boost performance.

yeah...hopefully. But if they are relying on the eighth year of the 'X' factor and Halo 4 and FIFA 2013 .. not that likely.

Currency Wars

This post is brought to you by site sponsor spreadbetmagazine.com

It is rather worrying how little coverage there is in the Western media about the increasingly nasty escalation of the China-Japan stand-off over a few small islands. The Arab Spring which was galvanized through the enormous power of social media may have parallels in China given the strangle hold the authorities have there over main stream media - social media is rather more difficult to keep the reins on…
In  the markets this week ,the big factor continuing to reverberate around the globe is the de-facto potentially unlimited US Quantitative Easing. This huge round of monetary easing is unparalleled in the US and the world to date including Japan.
Back when QE started in 2009 I forecast that it was a ‘Pringles’ event – once started you just can’t stop. And so Ben Bernanke is proving. Many Countries around the world are not unsurprisingly, no particularly enamoured by this new course of money printing. US dollar devaluation only makes it more difficult for developing economies to grow as their products become more expensive on global markets.
The US, by printing money, is trying to generate inflation to help it wipe outs its debt. This inflation though is also being felt in other countries. Their response is to also to try and reduce the value of the currencies through their own forms of QE.
With the dollar falling, there are some potential lucrative investment gains to be made. As the dollar falls, risk assets gain. Also as the dollar falls, the other side of the equation is that the “pair” currencies strengthen, particularly of havens like the Swiss Franc and the Norwegian Krone. Similarly, commodities also generally rise. It is quite hard to see how more money printing in the US and elsewhere does not underpin commodity prices – given the value destruction in the mining sector this year that itself provides a good long-term position for finding value - a stance that is opined in the current edition of spreadbet magazine - http://issuu.com/spreadbetmagazine/docs/spreadbet-magazine-v9_generic.

Finally, in terms of opportunities presented through a falling dollar, this also pushes up food prices. There is of course quite rightly a stigma attached to betting on food prices but spreads and ETF’s are offered.

Below is the HSBC graph of the effects of QE on the dollar – it does work in lowering the dollar and this in turn sets off a competitive devaluation in other currencies around the world. It provides the only solution governments can think of to the current sovereign debt crisis and this is to devalue their debt instead of paying it off as the burden is too large.

The currency wars are here to stay and traders should look to this as a theme to underpin their trading strategies in 2012/13.

BP In Russia - Again

Now obviously I'm supposed to know about this stuff (or else shut up), and I don't have a good record on BP-in-Russia.  In 2003, BP got involved in the TNK-BP joint venture.  Around 6 years ago they were considering an even bigger play in Russia at a time when others were piling in and others still (Shell and yes, even the mighty Exxon) who had already got in were getting a kicking in the usual Russian manner.  On this occasion BP (wisely, in my view at the time) held back.  In due course, 2008, and TNK-BP gets a kicking of its own, with Bob Dudley being sent packing in the boot of a car or some such skullduggery.

But of course those endless reserves of oil and gas are forever beckoning, and Russia's need for inward investment (and technology-transfer) is likewise never-ending.  In due course (early 2011) BP made another bold play, this time linked to Rosneft (a company now more in favour than Gazprom).  At the time I gathered, wink wink nudge nudge, that however implausible, they knew what they were doing.  It rapidly seemed I was wrong however (CU always said this) and the kicking recommenced with even greater ferocity.  How many beatings can a company, already on the back foot after Deepwater Horizon, take ?

But no, they are hanging on in there with another round of Big Plans.  What prize is so tantalisingly close that they can justify the effort ?

Perhaps it's as simple as this: the unchanging fundamentals of Russia's vast natural resources and its extensive needs - $1 trillion, we are told, and who's to doubt it ?  If BP are wrong about this they are in very good company: the Big Oil herd stampedes resolutely eastwards, irrespective of massive periodic setbacks. Putin spent time in London with Cameron during the Olympics, and now more Russians are coming to town to display their wares.

On the other hand, I can't quite shake off the idea that BP is being badly advised ...  this one will run and run.

ND

M&A pick-up a good sign

So now we have Sporting Bet, to add to Glencore/Xstrate and BAE/EADS - OK it is not really on that scale is it? But nonetheless a sign that the long-dormant M&A market maybe starting to awake from its slumber.

Now I am getting a little ahead of myself as I have nto met an investment banker in a happy mood for many moons and they all appear to be just as depressed as ever in September.

The global QE and efforts to revive the economy may though help in the short-term. Even though for sharehodlers M&A is normally a bad idea, for the markets and economy its is a greathing, generating much needed change and getting money spent rather than stored away doing not much.

Also when bad companies go under this is also a good sign - as is the case with Hibu this morning, long a victim of change, Yellow Pages may soon be gone to the cheers of forests worldwide.

Now, let's just hope that after Xcite Energy's proving up of its North Sea field announced today, this minnow can attract some attention.

More banking madness courtesy of Mad Vince

Regular readers will know that we hold no candle for VInce Cable here. Either in person, as an MP or in Government Mr Cable has shown little aptitude for anything except misguided thinking and politicking.

The latest idea being bandied about is a state backed business bank. Already there are plenty of calls for this to be scrapped as an idea. The IPPR reckon it will add too much to the deficit (funny they are less worried when its Labour's plans but anyway...).

The big issue for me is that the UK already owned more than 20% of the Banking sector, Northern Rock bits in run off, 85% of RBS, 43% of Lloyds (which itself absorbed HBOS). With all this in state hands why on earth is there a need for a new channel to market.

Moreover, the reasoning sounds very strange to me. Banks will only lend to good credits and these do not include some businesses that the Government wants to encouraged - that would be because the market thinks they are bad credits then? It'sis that thing called capitalism where a market tells you the real state of affairs and you can't buck them. The best case will therefore include this business bank running up big losses on its loans in all likelihood.

With all the QE in the economy I struggle to believe there is a lack of credit - certainly the bankers I speak to do not see this. they just see a big deleveraging of their own and their customers balance sheets. Which is what we want, private sector borrowing which is unsustainable high to come down.

Then we have the small issue of UK Corporate balance sheets being awash with cash - yet this is not invested? There are lots of ways to encourage this, but it is not through setting up a business bank. If you want investment, increase capital allowances reliefs and taper taxes for new business start-ups.

As ever, a Government is obsessed by debt, so much so that it sees not other solution than more debt. This idea is without merit and understandably therefore is a key policy idea of Vince Cable.

Oil Price Quandry

As much as with my long, high risk, equity positions I am keen for global markets to continue their advances, there is the odd risk factor at play. Economically, the only game in town is oil price. The price of oil has accurately predicted every recession of the post war, even in 2008 there was the massive spike up to $147 preceeding the Great Crash.

The driver of oil price rises (and falls after a sharp fall yesterday remains unexplained) is more of a mystery. In a time fo falling demand across the world, in US, China and Europe, one would not expect a run up in prices. Of course, this is driven by political and macro factors too. Israel faces a choice of striking Iran soon or learning to live with a nuclear armed terror state. A strike on Iran and the price of oil will shoot north of $200 a barrell for sure on a gigantic spike.

Plus there is huge volumes of speculative trading, the more monetary stimulus is pumped into the world, the higher the price of commodities will go. No doubt oil is being affected by this. However the lasting condundrum of this point is that more QE is really becoming self-defeating. As prices rise and inflation is created by the devaulation of fiat currencies, then the consumers of the world have less money to spend, feel poorer and so reduce their demand further - financial repression sets in, even with liquidity at high levels.

Many people suggest watching the gold price to see the true effects of QE; I demur, the price of oil, the driver of all human activity on a global scale, is the key price to monitor.

Ganging up on Gazprom

Here's an amusing turn of events.  At the end of last month, Russia - after 18 years of trying - was admitted to the WTO.

Welcome to the world of free trade !  Within days, the EC announced proceedings against Gazprom under Competition law, on three counts, focusing on Gazprom's activities in Eastern Europe:

• hindering the free flow of gas by use of 'no-resale' clauses in contracts;
• preventing diversification of supply by frustrating third-party access to, and development of, gas infrastructure;
• insisting on pricing gas using oil-indexed pricing formulae.

One hopes the EC doesn't waste too much of our money on their investigation and I can assist them in this regard.  On count 1, a cursory examination of the relevant contracts will do the trick: guilty as charged.  (And while you are at it, check the big gas sales contracts made by Algerian state company Sonatrach to France, Spain and Italy - you'll find the same there, too.)

On the second you may have a bit more trouble because there will be less of a paper-trail, and some of the European companies who could spill the beans are strongly inclined not to.  Nil desperandum, because to establish charge no.3 you need only read the collected public works of Gazprom speakers at energy conferences over the past 5 years.

Putin seems to be sweating a little over this (wonder why ?) and has rushed to hinder the process.  As well he might because there is no telling where this could eventually lead.  (Hint to EC: broaden your scope to Italy ...)

What has triggered this action ?  You may recall that, of the two big German energy companies that have been bleeding white from importing oil-indexed Russian gas, E.on - always much closer to Gazprom - settled earlier this year but RWE was hanging in for much bigger concessions, and they gave fair warning.  This is RWE's ace: they have made several large acquisitions in the Eastern European energy sector, thorough which they obtained all the paperwork necessary to prove the case.

ND

Time to put the foot on the pedal with risk assets

This post is brought to you by site sponsor spreadbetmagazine.com

We posted back in July that the correlation between UK QE and the UK stock markets was likely to be broken as four rounds of QE have now been completed and yet the primary increase in asset prices had been completed after the second round, last year. Indeed in July and August  of this year there was a modest uplift in the UK markets, but nothing overly dramatic, a 100 points on the FTSE here or there.  The real QE impact in the UK has not strangely been from our own domestic monetary activities but from Marc Faber’s favourite person (not!) - Mr Bernanke in the US..
Expectations had been building right through August that the Federal Reserve would have to authorize more QE to help the stalling US economy and the button would be pressed in September to avoid accusations of interfering with the US election cycle. And so it has come to pass with a very big effect on markets with the FTSE poised to break the 6000 barrier. Earlier in the month we wrote that the charts for the FTSE were looking more and more bullish with a move above 6000 very likely.
With ”the can” not just kicked down the road but sent into orbit by Mr Bernanke through the introduction of a new element to the monthly $40bn asset purchases and that is the effective unlimited timescale, we can expect the FTSE to establish itself above 6000 in the weeks ahead.
Throw into the mix the German Court decision which will extend the Euro udge for a few more weeks (let’s not forget the law of diminishing returns applies to Euro bailout announcements and Greece is already asking for a 3^rd bailout) then  September looks to be set fair (a bit like the weather - finally!).
Risk assets are the  ones to take positions in and within those key commodities – gold as a store of wealth against devaluing currencies and copper, which is one of the few commodities to have seen significant de-stocking this year, together with silver we can expect more upside this year. It’s time to be brave. In 2009/10 risk assets moved up 500% from their lows in many cases. The lows are much higher this time, but triple digit profits could be made by Christmas in certain sectors of the markets and if oil goes higher, then our old favourite - the oil explorers sector is likely to a big beneficiary.

Rockstar ate my Curlywurly

As a small boy, spending Christmas at the Selsdon park hotel,  the one of Ted Heath fame, I played table tennis with Alvin Stardust. He also bought my Curlywurly off me as he was peckish. {And paid a substantial amount, which was generous of him. } 
I have always considered this to be the most Z-list of non celebrity stories. Easily topping my backstage pass and access all areas card for Haircut 100. Or the time Lionel Blair needed to borrow a pound in Roehampton Asda.

But Mrs Q told me that Robson Green once asked to borrow a tissue.  She said it with much pride. Now that really is weak.
But her sister topped it!

"Our patio furniture used to belong to Valerie Singelton."
"So you went round her house to buy them?"
"No..They were already here."
"So..how did you know they were Val's?"
"Well..the bloke we bought the house from said he bought them from her from a news-agent's advert.."
"But you have no actual proof?"
"Erm..no..but it is a good story."
"Hmmm....No. Not really."

But it is the current Z-list, non celeb non-event champion anecdote.

If you have a worse, more pointless, less famous, utterly banal sleb story, then the crown might be yours.
Into the comments please.

In third place - GSD with Gary Linekar saw my fence.

In Second place- floppy flops with Tommy Ball's a voyeur.

But..in first place..the winner of the most uninspiring celebrity anecdote is 

Paul : Mungo Jerry should have gone to specsavers.

Ego unbounded and unbent- Peter Cummings

It is very lucky today that I am going to work early enough to avoid breakfast; otherwise on reading the paper I may have choked this from the Telegraph:

"In a statement Mr Cummings said he rejected the FSA's findings but would not be appealing the fine.
He said: "Many people must bear collective responsibility for what happened, including governments and regulators as well as the boards of the banks themselves. But the fact that I am the only individual from HBOS to face investigation defies comprehension.
"The decision to single me out for investigation is even more grotesque given that even the FSA has to admit in its notice that other senior people were involved in the critical decisions for which I am taken to task. This is tokenism at its most sinister, and has made it feel throughout like institutional oppression."


Poor Mr Cummings, responsible in the main for signing off dodgy loans with markers like 'approved for business development purposes' when the Credit teams at HBOS had come back saying not to make the loans as they were too risky. Mr Cummings, who indulged in the ultimate 'pig and pork' banking whereby you lend equity and debt (senior and mezzanine) to a client who if they go belly up you will be guaranteed to be over-exposed and take a massive loss. Real banking 101 stuff. Lo and behold, HBOS lost so much money in 2008 a Government rescue via Lloyds was the only way out. Lloyds has not recovered, still writing off billions in losses on real estate loans, of which almost the whole book came from HBOS Corporate Banking wherein Mr Cummings was the boss.   Of course, he wants to blame regulators (who could have sacked him) or Politicians (who could have given backbone to the regulator) - but no one made him sign-off on these loans.   By my guesstimation he has ended up costing taxpayers a bailout of around £20 billion. A ban from working in the City and a fine is getting of lightly - in the US he would be looking at a long stretch, in China possibly the death penalty.   I generally am happy with the Government proposed reforms to the banking system, they will make it safer - but Mr Cummings did not do anything criminal under current or proposed laws. This should change, if it were me he would be done for treason.