Crushing Brown's Re-Launch: All Eyes on Osborne

Here at C@W we have long expressed our reservations about the Boy Osborne, notwithstanding his significant tactical triumph at last year’s Party Conference. Now he has the chance to prove himself, one way or the other.

It is no secret that McBroon is pinning his entire political survival on yet another re-launch: only this time it has been many weeks in the planning and can be expected to be a major offensive on several fronts, deployed with all the tools and tricks at NuLab’s disposal – not a matter for levity. As set-piece battles go, this one has the potential to be a decisive encounter. For the Tories, the re-launch must be crushed.

A basic military precept is that, whilst strategic surprise is an extreme rarity, by careful planning one can achieve tactical surprise. Two familiar examples are the Normandy Landings, and the ground-attack phase of Desert Storm. NuLab’s recent performances have been pathetic, but for one last throw of the dice, who knows ?

The initiative lies broadly with the red forces on this occasion - although the blues could usefully snipe in the interim. What the Tories must ensure is that this campaign becomes Brown’s Kursk peninsular – a clear ‘beginning-of-the-end’ engagement where the defending Russians comprehensively trounced the German attackers by astute preparation for the anticipated assault: after which Brown can do nothing but fall back and back until he is left only with the metaphorical pistol-in-the-bunker option.

The entire Conservative hierarchy have critical rôles to play in this: but it falls to Osborne to show us he is true Chancellor material. What have you got, George ? We’re watching, and there’s a lot at stake.

ND

Zoom away

So the airline Zoom has has today with a number of passengers left stranded abroad. Not flying with a travel agent has become dangerous on these smaller airlines as more and more go under. We have already see Maxjet and Silverjet go this year, now Zoom.

Even some of the larger national carriers like Al Italia and Aer Lingus are on very shaky financial ground.

This has all been predicted to happen for some time, but there is clearly a structural over-capacity in the market, even Ryan Air is cutting flights.

On the flip side, more established airlines like Virgin Atlantic are sailing along nicely. I know who I would fly with...

Happy Landings

EU really mad; Official

There is a lot of discussion about weirdo's and madness on the internet today, so perhaps I can join in....


The US Dollar fell from its six month highs today (phew, fingers crossed for me as I am going to NYC in a couple of weeks), but get this - here is why:

"The U.S. dollar tumbled from six-month peaks against the euro on Wednesday, as comments by a European Central bank official rekindled speculation about an interest rate increase in the euro zone to quell persistent inflation pressure."

Just for fun, go read Ambrose Evans-Pritchard in today's Telegrpah discussing the economic situation across Europe. Collapse everywhere, even Germany hurt by the strong currency, and the idea is to raise interest rates?

This 'inflation' we are suffering will end in tears for us all. As oil has dropped 20% in a month and money supply has dried up it is not so hard to predict a sharp drop in inflation - it is a lagging indicator in any event.

If the EU raise interest rates it will utterly wreck Spain, Denmark, the Baltics and Italy. Why would they do this unless they wanted to ruin the eurozone. They can't possibly want to do this, so the 'EU Official' who said this must be mad.

UPDATE: From a Bank of England MPC member today in the Guardian...

Blanchflower described the BoE's forecast earlier this month of the economy standing still over the next year as "wishful thinking" and said things could be easily a lot worse.

"We are going to see much more dramatic drops in output," Blanchflower said. "The way to get out of it is to act, by interest rate cuts and fiscal stimulus and other things to try help people who are hurt through this."

"Sitting by doing nothing is not going to get us out of this and hoping that a knight in shining armour will come and lift us out of this is optimistic in the extreme."

And he said that an expected boost to exports from a weaker pound was unlikely to prove the "great rescuer" of the economy.

Gratuitous Plug ...

... for the Grauniad. On a bad day I wonder why I read this rag, there is only so much belly-laughing to be had from reading La Toynbee: but on a good day it puts the increasingly pitiful Torygraph to shame (the Times having long since been beyond the pale).


Here are:
- the best article on the Olympics I've read, by the great Simon Jenkins
- a very workmanlike (OK, work-womanlike) demolition of the idea of an energy-co windfall tax

Both on the same day !
ND

The Stealth Tax that is Non-Enforcement of the Law

We know that crime costs us money, not least by way of increased insurance premiums. Sometimes one gets an inkling of just how much.

Today I had the annual pleasure of renewing my car insurance, as part of which process I was offered additional cover against the eventuality of suffering at the hands of an uninsured driver, of which there are estimated to be well over a million. Living in Saaf London, I confidently assume I travel the same roads as a goodly number of the uninsured, (whose documentation is likely to be deficient in more ways than one): so I accepted, and can thus put a personal price on this particular little crime.

Such crimes – lack of car tax and lack of insurance – must be some of the easiest offences to detect, prove and punish. Vehicles tend to poke their noses out into the world of surveillance cameras, and are themselves assets – presumably of some value to the driver, if not much to the motor trade.

The usual reason for a policy of ignoring crime is to keep the numbers in check and assure us that “crime is down”. In this case, to find it is to be able to prosecute it, so one would imagine it would boost the clear-up rates rather nicely.

So one can be fairly certain that the reason these laws are enforced with such dilatory negligence is that various NuLab client groups are disproportionately involved. Result – privatisation of the consequences, and a yet another tax on the law-abiding.

The list of parallels – TV licences, fly-tipping etc ad nauseam must be lengthy. It would be interesting to know (a) if instructions to go easy on selected ‘demographics’ have ever been issued in writing; and (b) if any think-tank is making a systematic reckoning of this doubly-disguised stealth-tax.This, surely, represents a target for tax-cuts that George Osborne could sign up to.

ND

PS – any comment starting with the words “well, overall crime is down” may receive an uncharacteristically discourteous response

BBC 3 . Get them young

Continuing a look at the value of the BBC. BBC 3 is the "Yoof" channel. Aimed at the advertisers favourite 18-34 audience it is a mix of comedy, eastenders, drama/ docu drama and chat.

Main programs are Little Britain, Lilly Allen and friends, family guy and that two packets of crisps show that seems to run forever. The audience is 2.6% among 25-34 year olds, and 1.7% among all individuals, although the % may be more as the station does not run during the day { it uses the CBBC stream}. The station has a budget of 93million pounds a year, which is considered quite large in the media world.

Defenders of the channel point out Gavin and Stacy, Sex..with Mum & Dad.. Funland,..Man Stroke Woman.. Doctor Who Confidential and Torchwood are all successful shows that have transfered to other channels, having got their start on BBC3.

Critics point out that they are good enough to be made by any network and don't need taxpayers funding,plus the costs of running an extra channel, to be aired.

There is a lot of truth in that. "Edgy" or alternative format comedy has been being made for a long time. Frost report, Not the nine o'clock news, Blackadder, Hyperdrive, Buzzcocks,Spaced, The Young Ones plus many many more homegrown and from overseas.

As the Guardian said

The BBC's accounts for the year to March 31 2007 showed that the true cost of BBC3, when distribution and infrastructure support are taken into account, is £119m, or roughly £600m if this figure is extrapolated over five years.

That's an awful lot of licence fee payers cash for not that many viewers, some would argue. Does it continue to be money well spent?

Answers in the comments please.

Off topic - Wednesday's Olympic reaction today

Here we go, our heroes from China back with us and the news channels saved - a story of sorts to turn with through the bank holiday.

I have loved the Olympics and it is great to see us do well for a change and in contrast to our Football team; But I know what is coming next, a dearth of stories in the press. What to do?

The reframe.

How can we compare these heroes to the past, they have had so much money lavished on them? How can we compare them to the true heroes who are our soldiers fighting wars?
Did they do it for GB or are they all actually extremely selfish, dedicated individuals who won golds for themselves having trained all their lives for it?

Please stick other predictive columns in the comments, we can tot up how many we get right on Friday.

Reality Bites

Very busy this week and busy today with birthday of 1 year old to which Mr Quango is coming too, though I am not sure we will have room in our small garden for his Helicopter; Mrs CU is also worried about the quality of sandwiches and bites that we have in case we upset such an esteemed MP.

Anyway, I missed this week blogging on the final announcement that we are to have a UK recession. This is bad news for us all. Although the original report says 0% growth this is very likely to get revised down and so 2008 growth so far is .2% - before inflation which is at least 3.8% average.

All the economists see this as being the first of a protracted set of numbers; I can't disagree I am afraid and think 2009 will be as bad as 2008 if not worse. Yikes,

Good signs that things are deteriorating are events like this. HBOS, utterly ruined by the credit crunch, is reducing agencies and cutting staff. This will have a long way to run. The hope must be that high inflation at least prevents us entering a Japanese 'lost-decade' with no growth.

(If your wondering what this means, well the Japanese banks in the late 80's did what ours have just done. But with no inflation to whittle away the value of the debts, the economy became moribund for over 10 years. With us, 5% inflation should mean we get away with a lot less than a decade of no growth)

Peparing for the September re-launch

As soon as Gordon Brown is back from China we can expect a deluge of press activity. What could the world of business help with in terms of expertise in this 5th re-launch:






In the beginning was the Plan.
And then came the Assumptions.
And the Assumptions were without form.
And the Plan was without substance.
And darkness was upon the face of the Staff.
And they spoke among themselves, saying,
"This is even more stupid than last times, a veritable pile of poo."
And the Staff went unto their Managers and said,
"It is a pail of dung, and we can't live with the smell.
And the Managers went unto their Superiors, saying,
"It is the container of the excrements, and it is very strong,
such that none may abide by it."
And the Mangers went unto their Directors, saying,
"It is a vessel of fertilizer, and none may abide its strength."
And the Directors spoke among themselves, saying to one another,
"It promotes growth, and it is very powerful."
And the Directors went to CEO, saying unto him,
"This new plan will actively promote the growth and vigor of the company
with very powerful effects."
And the CEO looked upon the Plan and saw that it was good.
And the Plan became Policy.
And that is how sh*t happens.

Now you tell us?

This will not be front page in The Sun, but nonetheless it is worrying, if predictable news. The ONS has withdrawn publication of its housing statistics for this last period as they are not satified with their quality.

This comes fast on the heels of the retail sales numbers which went up slightly when all the economists had retail sales as expected to fall; sales everywhere I look, but activity up?

Not sure how the Bank of England can do a great job on monetary policy when the stats it relies on are themselves so questionable. Perhaps this explains why the votes are so split.

Who would have imagined that this would occur? Move the ONS to Wales, have most of the staff leave and then the quality of their output decreases,then increase the level of political 'supervision'; Unbelievable that this would lead us to this situation, isn't it?

BBC . 2 are you sitting comfortably

Well the case for BBC news was fair, but the comments were not. Surely the thousands of hours of radio must make the case for a compulsory subscription service.

RAJAR the radio ratings compilers show the BBC have tens of thousands more listeners than its nearest rivals.

Radio 2 :162,446 Radio 4 : 121,626 Radio 1 :101,625 Radio 5 :47,150 Classic FM :39,295 TalkSport :18,989 Magic : 14,773 Radio 3 : 12,116

Radio 2 has been the most listened to station for years and years. Its soft fluffy BBC to the core.
Terry Wogan , Ken Bruce, Jeremy Vine, Steve Wright, Chris Evans. A mix of music, not too young, not too old, some quizzes, some chat, some phone-ins and some big and small name guests. Personally, despite its lightness and lack of any real depth I believe it beats the pants off any daytime TV channel.
Like all BBC shows its slickly produced, gives the weather and news and is very very comfortable and reliable for its middle England target audience.

Radio 4 you could say the same, except without the music and a lot more culture and some of the best comedy that you will ever hear. Gardening and travel and politics its like the listening equivalent of BBC 2, much as Radio 2 is BBC 1 for the ears.

I listen to radio every day and my only real complaint is that as its BBC it always has to 'balance' every issue, seek an alternative point, have no individual presenters comment or allow a topic to become 'dangerous' in any way. But then again I am its target audience, no wonder I like it!

Radio 5 has less of a share than I would have guessed but why on earth the 'beeb' continues to put radio 3 on fm when radio 5 has 4 times the audience and would only grow without all that AM hiss, is a mystery. [well snobbery probably]

So, the BBC is the absolubte master of the airwaves and it has countless regional stations too. The real regional ones like Ulster are comparable to the commercial 'giants' like LBC 97.3 or Virgin.

And yet this very success begs the question..

'If BBC radio is demonstrably this desirable for the public, surely it would continue to be so under the same or similar format with the same coverage in the private sector?'

I personally would vote to leave BBC Radio almost as it is but must conceed...

If Kiss 100 can succeed with its numbers that are 10% of radio one, then wouldn't a commercial outfit be interested in the 55% of the listeners dominance of the BBC franchise? These are Tesco type market share figures that companies dream of. The figures are even better than they appear as the 55% is All BBC against All Independents. Like for like stations and its more like 80% share. If you could buy Radio One then your only real competitor would be Radio Two. And they aren't even fighting for the same territory!

BAA break-up

This time last year, and in many business news reviews, I have noted the dire straits that BAA has been in. Financially, the acquisition by Ferrovial was a disaster. The costs of funding could not be refreshed due to the credit crunch and the business was forced to seel World Duty Free; the most profitable piece of the company. 200 redundancies were announced too.

However, the decision by the Government today will save Ferrovial's bacon in many ways. Expectation of the break up had allowed Ferrovial to finally re-finance the debt, given the proviso that big chunks could eb paid back from any forced sale.

OS instead of hammering Ferrovial and forcing it to pay for its mistake, the management will escape this disaster with money in their pockets.

Far more worrying is the need to sell off 2 London Airports, rather than just Gatwick as expected. Whilst I am all in favour of competition as a capitalist, sometimes it does not work perfectly. Witness rail privatisation. The Government really controls new runways and terminal buildings etc, not the private sector. This is already a distorted market.

Perhaps though competition will win through and help to deliver better services out of the decaying infrastructure that is the Southern Airports. On the downside I see that Ryanair, a truly mercenary and terribly behaved company, are dying to buy Stanstead. As Unscrupulous mercantilists they would wreck the airport for other operators and push up charges for passengers on other airlines.

If you think that BAA is a bad owner, replacing them with Ryaniar will not be a step forward.

"US bank to fail"...UK banks too?

Credit market turmoil has driven the U.S. into a recession and may topple some of the nation's biggest banks, said Kenneth Rogoff, former chief economist at the International Monetary Fund

This is the latest news to hit the US markets. Of course Bear Stearns has already been palmed off to JP Morgan. In the UK we have had Northern Rock and Alliance and Leicester has an emergency sale of itself to Santander to prevent collapse - just today it has acknowleged that in effect it cannot survive if the sale falls through.

Bradford and Bingley is also only fit to prepare itself for a fire sale.

This is not a good run of events and clearly the weak are already fallen. Now what is being discussed is some of the larger beasts also succumbing to what is effectively financial gout; Bursting with debt and greed they can only stagger to a final fall.

In the US Lehman Brothers was considered just a few weeks ago as in a serious state. It has just put up a big part of its business for sale, scotching the current view that the driving down of its share price was all just speculation.

In the UK the main banks have fallen again today - but could one of the big ones collapse? It is still a distinct possibility. With no more access to the capital markets, the government spent out on Northern Wreck and high costs for bond issuance the banks are very much stuck.

HBOS, RBS, Barclays and Lloyds in that order are under threat. HSBC seems too big to fail but its frankly unfeasible scale of CDO's and other toxic mess could even hurt the biggest beast of all.

But will it happen - I am not sure. What I can see is a third leg to the credit crunch, with a consequent retrenchment from the gains of recent months and so another 'test' for our financial institutions. More will be found wanting if this occurs.

Summer meltdown

Fresh back from my holiday I was unsurprised to see the August weather in full British mode of perpetual rain and misery.

On the other hand I was thinking it would be good to see a real summer meltdown to improve things.


Sadly in this case it is the nations finances in meltdown and not anything meteorologically related.

Tomorrow the latest figures for the PSBR will be released and the Government thinks the debt will reach £43 billion this year. However, this is likely to be out by at least 20%. The government has predicted economic growth at 100% above the private sector economists forecasts.

The graph above form the ONS shows the year to date picture of the public sector finances. Not pretty reading is it?

A few months ago I wrote that he Government could be engaged in a Scorched Earth policy to ruin the country and damn the Tories to a very difficult time in office. On reading Yvette Cooper today and listening to the Government in general I am more and more convinced that this is the case.

Either that or they really are all a bunch of incompetent numpties....

This is BBC . 1

CU proposed a few weeks back that the BBC should be stripped of its ability to charge a licence fee from every home in the land and compete on a level playing field with its rivals.

Contentious issue for sure. There is an awful lot of love for 'Auntie' as it provides so much for relatively little from its audience. £139.00 a year compared to Sky's average of £450.00 or £320 if you bought The Times every day.
BBC gets some £4 billion a year budget and employs 28,500 people. ITV has around £1.2 billion revenue and needs to make a profit to stay in business. ITV are shedding staff in an attempt to reduce costs by some £40-50 million.

The usual arguments for the BBC are quality of programs, news coverage , global recognition, innovation , children's channels , political coverage, sports coverage , unbiased reporting, radio , culture and current affairs excellence websites and plenty more.
Against is biased coverage , left wing , slow to respond , overmanned , wasteful , dumbing down , Politically Correct and others.

To attempt to tackle this emotive subject let's break it down into easy to digest pieces.

So, let's just look at News.

The usual argument for the BBC's news is that its the best in the world and without state funding it would some how morph into FOX NEWS.
Quite how the BBC would suddenly become a right wing news station I don't know. Channel 4 isn't. ITV news at 10 isn't. Channel 5 news [if you can call it that] isn't either. Sky news isn't Fox news yet they come from NewsCorp.
The fact is Fox news is an American channel for an American audience. It isn't for Europe.

As for the best in the world I recently watched coverage of two major events on foreign TV. The Olympics and the Russian incursion into Georgia. Coverage was on BBC Prime, BBC World, Sky News, EuroNews, TF1 News and CNN.

On the Olympics BBC was unsurprisingly very good. Plenty of coverage, lots of reports and reporters, lots of comment. It was easily as good if not better than anyone else.
But on the Russian story it was lacking the pace of Sky, the pictures of CNN or the depth of Euronews. Little content for a good long while as the story unfolded. It seemed that the BBC was waiting to see how events unfolded so as to decide how to report it. The other networks had already made their decisions and were running with the action / what would happen next / comment / history / opinions / economists / what does this mean for ... stories / human interest story etc.
The Beeb appeared, to me at any rate, very slow of the mark . Lots of pictures of a map of southern Russia and a narration.
CNN had them beat.

I missed all of C4 and ITV so maybe BBC was better here in the UK, but so far in the News arguments its Rest of the World - 1 BBC - 1

Back to work..for now

6am start for the first day too, just to kick things off again. Anyway, I return somehwat impoverished by Mrs CU and the kids.

Work will just have to pay.

On the other hand this story really impresses me. Why work when you can just be paid to get abuse? I get abuse everyday, sadly not of an exciting sexual nature, however I thought taking the abuse from clients, managers etc was what they paid me for in the first place.

Perhaps I need to consult a laywer asap...

Guardian Cat Fight ! Bunting Decks Toynbee

No biting or gouging please, ladies ...

One conflict after another this week as a different pair of feuding foes square up. This time it's the Gruaniad's Madeleine Bunting, giving her take on Scandinavian society:

"It's easy to romanticise the welfare priority and democratic values, but it's all built on very un-British restrictions of freedom"

So what, do I hear you mutter ? So, la Bunting's dear friend Polly Toynbee, she of the serial crushes on successive socialist hopefuls, is known to harbour a slightly different view. Well, very different ...

"the most successful societies the world has ever known"

Game on ! this will not go unanswered, I confidently predict. No biting or gouging please, ladies.

Incidentally, though I don't have the reference to hand, Sackerson hosted a fantastic comment several months ago from a reader who had detailed insight into the extraordinarily repressive nature of Swedish society. It made chilling reading - Sackers, can you oblige ?

ND

Oil and Nuclear Power

Back in the 1980s, after the massive oil-price hikes of 1973 and 1979, scenario planners at BP conceived the notion of ‘One Last Shock’. Their thesis was that the world could take a third and final oil-price surge, but no more: Something Else would happen to prevent there being another. Energy substitution, perhaps.

Now nuclear power is certainly an alternative source of energy, but it can mean something else as well.

The geopolitics of oil are never far from the headlines: and now events in Georgia have seen the two Cold War protagonists fronting up to each other again (troops only a few miles apart).

Here are a couple of ways of looking at things.

Few of the ‘unarmed’ nations would have the slightest difficulty in rectifying their position (and indeed one might surmise a couple of them have contingency plans).

Now the other way around:

Notice anything ?

If we were to think briefly about the big holders of oil reserves, Iran and Saudi Arabia come immediately to mind. Ponder on.

ND

Blimey: Sterling / Dollar 13 August 2008

Down, and down again.

This doesn't look good for UK food & fuel ...



ND

Meanwhile . . .

We haven't used this graphic for a bit - since 21st January, in fact.

After the unexpected interlude, things seemed to have picked up where they left off then, at $ 1.95.

ND

The Bear Welcomes You To His Chess-game

In a previous incarnation I spent a number of years studying the Bear and its military. Somewhat immodestly I shall quote from the C@W predictions for 2008

"after the Olympics Russia will make a provocative intervention in another country, just to prove it can"

Pausing briefly to acknowledge the timing error, we should elaborate this point. Russia is often best thought of as a testy old man camped out at a dusty village tavern with a chess-board and several bottles on his table. He looks sluggish and overweight. But he’s seen you coming; he is full of contempt and resentment; and if you sit down at his table he will wipe the floor with you at whichever of his two favourite sports you challenge him.

The Bear has grudges aplenty and, well tanked-up on oil & gas revenues, is in the mood to do something about it. Noting that China has been acting with impunity, and assessing a window of US lame-duck weakness, he sees a fine opportunity to roll back some of the geopolitical gains made right across the Former Soviet Union by the contemptible ‘only superpower’. Whoever is the next US President can expect to start from a position a good few miles further to the west and the south than Cheney would have wanted: Georgia chastised, the Ukraine chastened, and the ‘Stans all realizing that when push comes to shove, they are on their own.

The key feature of chess is that both sides can see all the other’s pieces and dispositions. Cunning and understanding are all. Do we credit GW with either ? or GB ?

ND

Gold's Down - What's Up ?

OK, time for taking stock. Having been following gold for well over a year now, I had it firmly identified as a hedge against bad news.

Now we have fairly heavy fighting in Georgia, with Bush huffin' n puffin' - this is serious, folks - and it plummets.

Need to recalibrate here ...

ND

Top 10 Blogs

On holiday too. So while pouring some 1664 Blanc, which tastes like snakebite, a quick reflect.
These are the blogs that I have bookmarked so are likely to be the most looked at by myself.
Dale and Guido of course and in no particular order:

Blue Eyes
Letters From A Tory
Norfolk Blogger
Political Betting
John Redwood
Ambush Predator
Mark Wadsworth
Dave's Part
Dizzy
Newmania

Hatfield Girl,Tuscan Tony,Burning Our Money,Asquith and counter news are all regularly read too.

Ahh well, now to get this wine open and tomorrow enjoy more 30' heat.

Christopher Booker: some harsh realities on energy

Not a full Sunday review, but for anyone interested in UK energy policy, read this succinct piece from Christopher Booker today:

“Within a few years, Britain will face an unprecedented crisis, thanks to the shambles the Government has made of our energy policy. After years of dereliction … only a crash programme of measures could keep our lights on …

With this colossal crisis fast approaching, our ministers are still lost in the cloudcuckooland of Mr Brown's £100 billion "green energy" plan, to meet our EU target of generating a third of our electricity from renewables by 2020. Not an energy expert in the country says this is remotely feasible."

He concludes (my emphasis):

“Tragically, no one seems to remain in more blissful ignorance of all these harsh realities than our Conservative opposition which, when the crisis arrives, may well be in power. Not only will those at the top of the Tory party, on present showing, have no idea why the lights are going out, but they will have even less idea of what to do about it - because by then it will be too late."

He is right on the basic analysis: and I fear he may be right about the Tories too. We shall need to take a little look for ourselves in the coming days.

ND

Top Ten Blogs

Mr Dale, King of all he surveys in the blogsphere, is having his annual awards for best blogs.

By reading this you have already entered into a binding contract to vote for this blog and failure to do so means we will pursue you in the courts if necessary. We track ISP numbers (Sate-Control by Labour seems to be be seeping into my very soul....)

Anyway, I am sure Bill Quango and Nick Drew will have there say, but in no order here are my top 10 'political' blogs:

Mutley
Iznewmania
Croydonian
Blue Eyes
Sackerson
Mark Wadsworth
Devil's Kitchen
Letters from a Tory
Wolfie
Tim Worstall

Guido and Lord Dale, both of which are unmissable for me, will get enough votes from others...

(Stumbling and Mumbling, Burning Our Money, JMB, Ellee Seymour, Dizzy and everyone else missed off will no doubt be covered by the remaining editors...)

Hiatus

Working has its side benefits and the Slickers are off for a week on vacation. Mr Drew has been instructed to stay at the coal face and keep you merrily entertained as best he sees fit.

I look forward to returning to a country considerably richer in gold and preferably with a new Prime Minister - yet somehow I get the feeling I could write the same thing year.....

Also I have decided no blackberry, no phone and no access to computer at all for the week; heaven or hell I will find out soon enough.

Jeux Sans Braincells: Scargill vs Monbiot

It’s August. The whole of the BBC has gone to Beijing. The Silly Season is in full swing, hurrah ! And … Arthur Scargill returns to the energy fray, scene of his glorious proletarian victories of the 1980’s.

Piqued by George Moonbat’s declaration of everlasting war upon coal and newfound acceptance of nukes, Arthur wishes to offer a modest counter-proposal or two of his own:

(1) “Britain needs an integrated energy policy that will produce 250m tonnes of indigenous deep-mine clean coal per year - from which could be extracted all the electricity, oil, gas and petrochemicals that our people need".

Integrated, and balanced, too, don’t you feel ? And on the subject of balanced …

(2) “I challenge George Monbiot to test out which is the most dangerous fuel - coal or nuclear power. I am prepared to go into a room full of CO2 for two minutes, if he is prepared to go into a room full of radiation for two minutes".

Now this is tempting. I’m sure what Arthur was really volunteering for was a couple of minutes in a room full of carbon monoxide, and as a service to the Nation, doubtless George will oblige us by picking up the gauntlet. I feel also that others should be joining the challenge, by immersing themselves for two minutes in their own effluent: Alan Johnson in a vat of MRSA; Hilary Benn in agricultural slurry; bullshit also of course for several more of their Cabinet colleagues …

Sadly, and before we get carried away here, the Grauniad has consulted a potential umpire for this little bout of Jeux Sans Frontieres, the Health Protection Agency. Putting on their most disapproving faces, these worthies “would not sanction admission to either room.”

‘It's a hypothetical experiment on an emotive issue and it would never get approval on ethical grounds’ said a spokeswoman.”

Sanity prevails and we can all go back to watching the Olympics. Now there’s a real contest in a fog of CO2 ...

ND

PS, to judge from the photo, Scargill's previous encounters with CO2 gave him a nasty case of that unpleasant miners' complaint, toxicombova

Are Barclay's playing the hiding game?

I have no info but am surprised, as are most analysts (of which I am not btw), that barclays is able to declare all its nasty leveraged loans as non-toxic and requiring minimal write-down. In addition its UK write-downs on cards etc are very low.

My hunch, based on instinct and no data, is that there is some arbitrage going on here. Whilst Barclay's maintains this position it can borrow and lend in better circumstances than its UK rivals, HBOS and RBS. As such it is hoovering up mortgage share of the market by way of example.

If and when it 'comes' clean, then it will have bolstered itself at a time when the opposition was caught low. This is a dangerous game if that is what is being played.

Otherwise they are just really lucky the ego's of their management team last year lost out to RBS, sparing shareholders the denoument of acquiring ABN and then writing off most of its value within months....

Thought for the day.

I am sure I walked past Billy Idol outside Debenham's on Oxford Street yesterday on my way to a meeting, it got me thinking...

"It's nice day for a 'shotgun' wedding,

It's a nice day to start again"

Why it made me think of Milliband and Milburn I don't know, perhaps I need to get out more. Just as well as I am off on hols for a week from tomorrow!

Respect to the Old Troublemaker

Emboldened by Mr Wadsworth's gallery, trying some crayon this time

ND

ITV can't win by design

Here we go again, ITV has announced another poor set of results. To be fair to them they are actually a big improvement on the past year or two, which considering the current economic climate is an achievement.

However, ITV is in long-term decline and is seriously considering giving up its rights as a major broadcaster by having public service commitments. I don't blame it, every good idea is copied by the BBC and even ITV's best sports coverage (Formula 1) is nicked by the BBC.

The BBC, funded by a poll tax on TV owners, even pays its best stars better and is able to deliver better audiences.

There is no level playing field, even Channel 4 gets taxpayer subsidy to boot. Sky is funded by market means that ITV is no doubt looking into as a possible future.

Of course, changes in the market for TV and in viewing habits set a wider context for ITV's decline and ITV too is guilty of some horrible mistakes like the purchase of friends reunited; but do we want the UK market to be dominated by the Islington literati vs the Murdoch dynasty?

In current circumstances where every penny counts for us all, there is no moral justification for the BBC to have Government funding, as I have argued many times. I hope the Conservatives grab this nettle, scrapping such a hugely regressive tax would be popular and improve the health of the media market and save the private sector. If we people want specialised, quality TV entertainment then they will pay for it voluntarily; as SKY has proved with great success.

More tangential, but by my personal belief, is that the BBC employs hundreds (thousands?) of media studies graduates each year which sustains this market - all at taxpayer expense. This encourages Universities to offer such lightweight courses in the first place. Therefore these people are lost to the productive economy from the age of 17. I don't want less market regulation to re-balance the sector and reduce the artificial demand which hampers private companies and damages the economy.

Stamp Duty

Dithering is damaging.

(Above: Badger and Broon 'assist' the UK housing market)

The recent announcement about vehicle excise duty has damaged the car resale industry.
The value of vehicles that may be in a very high tax band has fallen. If your car MAY be in a high tax band, but may not, depending on the final decision.. would you sell it or hang on?
If you are a dealer with a forecourt full of Ford Focuses that MAY now have a VED of £150 more than a rival car are you selling many?

People without information and feeling uncertain will wait and see so a slowdown is automatic.

Today there is a bungled non denial non confirmation from the Chancellor that there may be a cut in Stamp Duty,may be a suspension, maybe a deferment in some cases or maybe nothing.
The housing market, already in deep deep trouble, will now glide to a halt as purchasers who are already wondering if they should wait a bit longer for lower prices, now believe that possible savings on tax can be had.
Stamp Duty of 1% on the average price home of £100,000 is a £1000 saving. Not bad if you are struggling for the £5000+ deposit. On a £300,000 home its 3% or £9,000. Would you give that up to HMG if you may not have to?

The problem isn't whether its a good or a bad idea to alter stamp duty, to allow the market to stabilise or to reinvigorate falling tax receipts by offering a discount to First time buyers.
The issue is this damaging and politically motivated method of government whereby change is 'hinted' at to either reassure, float an idea, shore up support or destabilise an opponent.

We strongly believe that any announcement is being held for the coming Labour Party Conference, probably with a further hint on vehicle excise duty and any other good news that can be found. That may make good political sense but shocking and damaging economic sense.

Anyone remember what happened when a previous chancellor pre-announced that he had some gold that he was thinking of selling?

Keeping the Lights On: Part 94

Lenin memorably defined communism as Marxism plus electricity: and who’d want to find out what capitalism minus electricity would be like ? The Battle of Kingsnorth – over the future of a planned new coal-fired power plant - sees a collision between pragmatism and fantasy: doubtless a good time will be had by all, and Plod will coin it in overtime.

In the middle of this comes a highly illuminating contribution jointly from Greenpeace and the WWF, who’ve commissioned consultants Pöyry to ‘prove’ that no new coal stations or nukes are required to keep the lights on - because renewables can do the trick. Here’s what they say.

“The report finds that, if the UK Government is able to achieve its commitments to meet EU renewable energy targets and its own ambitious action plan to reduce demand through energy efficiency, then major new power stations (burning either coal or gas) would not be needed to ensure that Britain can meet its electricity requirements up to at least 2020” (WWF)

“We can plug the 'energy gap' without building big new power plants - whether they're coal or nuclear powered. And to do it, the government just needs to meet its existing energy efficiency and renewables targets” (Greenpeace)

‘If’, and ‘just’ – how much is swept along with those words ! As we’ve said before, if an athlete just runs 30% faster, he can run the 3-minute mile But he can’t. So he won’t.

As part of our usual service to readers, C@W has read the report, which inevitably skates lightly over several critical issues. Firstly, it accepts the UK will meet it clearly infeasible EU renewables targets, and that efficiency measures will ensure that UK electricity demand will fall. Next, it avowedly chooses to consider neither the capital cost of the ‘requisite’ renewables plants, nor the impact on UK power prices. Finally, it treats in the most cursory, nay, negligent manner, the difficulties of operating a grid with colossal amounts of wind power in the fleet, a subject we may return to.

If … just … nope: it’s CAN’T & WON’T.

And of course HMG knows this all too well. Expect Kingsnorth to get the go-ahead. Sorry, George Monbiot, but efficient new coal plant has a key role in keeping the lights on.

ND

Buisness to bail out Brown on 10p tax

There is some speculation at the moment that the government is putting pressure on the LPC to recommend an increase in the minimum wage. The LPC [low pay commission] is an independent body tasked with setting the minimum wage.
Minimum wage is currently £5.52 and the proposal is a rise to £5.73 or 3.8%.
This is probably a fair increase but the issue is the government wants them to recommend an increase.. because of the abolition of the 10p tax rate.

Raising the wage will allow the government to say that they have made up for the losses people may have incurred, and so don't need to fund those emergency measures for another year, but of course they have not made up anything.

1] The increase returns people to where they were before they lost out. Hardly a pay rise!
2] It is also a pay rise for everyone whether they were winners or losers under the 10p tax disaster and u-turns. Over compensating again.
3] Employers have to find the money, not Gordon and the Treasury, so a big boost for government coffers.
4] As employers and employess pay national insurance contributions of 23.8% (11% paid by the employee and 12.8% by the employer) and employees pay income tax, raising the minimum wage actually raises tax receipts slightly.
5] Insisting employers pay more for staff, during a recession/downturn is poor strategy. Jobs will be cut, they can't not be.

And, of course, it is not for HMG to ask for anything from independent bodies.
They are INDEPENDENT.

But that's unlikely to stop them asking..

HSBC Half-Right?

The normally excellent Robert Peston has his thoughts here on HSBC's results this morning. Following on from LLoyd's 70% fall and the disasters at HBOS and expected at RBS - these HSBC results seem to be a shining star.

However, looking at the writedowns they have more than written off now their entire investment in HSBC USA; why don't they just close the business altogether?

Also they are still taking huge write downs, bigger than their rivals. HSBC moved some of it's SIV's (enron-style accounting that was previously hidden) onto their balance sheet in January and are now slowly writing this off. The difference with HSBC is that it has the capacity to do these write off's over time.

As such it will be many quarters before HSBC returns to it previously profitable position. Only by compairing to other banks can this be seen as success....

A Very Good Article. In the Guardian. Really

OK OK, I know - how did I find it amongst all the guff; why am I rootling around in the dustbin, etc etc

But here it is

A masterly summary of the state of play for modern financial theory and doctrinaire capitalists like, err ... me

Have a read

ND

So who will be in Charge; Fisking the Shadow treasury team

In a follow-up effort to a post earlier this week on the Labour Treasury, I present to you the opposition and likely team to inherit a terrible mess in desperate need of sorting out.

George Osborne, Shadow Chancellor - St. Paul's and History at Oxford. Very short time as a journalist before becoming a policy wonk for the next few years until he was elected as an MP. Only 37 years old too.
Not the person I would want in charge in desperate economic times really, as lacking in experience and qualifications as his opposites in the Labour camp. Perhaps a job swap with William Hague would be in order?

Philip Hammond Shadow Chief Secretary to the Treasury - Oxford PPE, I am reliably informed he was known there as "the tool for getting stones out of horses' hooves." Huge experience in business, mainly in private sector and also the world bank. Elected in 1997 and been a minister ever since more or less.

A great number two with plenty of experience to rely on, not the perhaps most charismatic and inspiring person to listen too, but great knowledge and understanding.

Justine Greening, Shadow Treasury Minister- An MBA and a finance Manager at Centrica (apparently still according to her website...). One of the few qualified accountants in Parliament.

Can't have any complaints here about experience or qualifications, bit young for a top job, but will come in time.
David Gauke, Shadow Treasury Minister - State schools and Oxford, then a career in City law for 10 years before being elected.

Apart from my personal predilection for banning all lawyers from parliament on the grounds of conflict of interest, he seems a useful member of the team with decent City experience.

Mark Hoban, Shadow Treasury Minister - LSE economics degree and then a long career at PWC. Can't see that he made partner (might be wrong?). Another qualified accountant. Been in Parliament since 1997.

Another person with good business experience and a long career behind him before joining parliament

Overall - Really, compare this list to the Labour team that I fisked earlier this week. It really is chalk and cheese, they are simply so much more experience and qualified to run the Treasury. How labour could keep a lead on running the economy? Only by pure spin. Only the leader of the team is lacking in experience, but with such strong support he might just be ok.

Bronze all over

Thanks to you all, We came 3rd in the best business blog category in these awards. Given that there are some good blogs out there, this is very pleasing.

Thanks for all your votes. Next time they will be bought in advance at our irregular drinking session. Don't forget Dale's votes too - would be nice to be 3rd their too!

Smug Corner: Peking - Duck!

Time for another retrocast update. Our predictions for 2008 included this one:

"there will be unrest in China, and the government will feel confident enough to suppress it, even during the Olympics ..."

And now take a look at this report on recent goings-on.

Dangerous times . . .

ND


Hat-tip: James Schneider

BE / EDF: The Fat Lady is Still in the Wings

We’ve been following this one for a while, and the main points haven’t changed. BE is a massive decommissioning liability (as well as falling to pieces) but with some excellent brownfield sites: EDF is an even bigger liabilityand Sarkozy is playing a devious game in the strategic interests, naturellment, of La France.

Notwithstanding French protestations that the UK isn’t perhaps all they hoped it would be for new nuke developments, it seems more likely the institutional investors’ veto is the main reason for the current hiccup. If, as it seems, they are taking a punt on UK electricity prices rising still further, well, that’s not a particularly contrarian speculative view. Wholesale power price increases go straight to a nuke’s bottom line, because of course their fuel costs aren’t correlated, unlike those of gas and (to a lesser extent) coal.

Here’s some other points to bear in mind:

· Strange to relate, there really is a shortage of really good UK brownfield power-plant sites, and not just for nukes: it’s to do with cooling water requirements. Both E.on and RWE would love to get their hands on some ...

· Centrica is a really important player in all this, with lots at stake. They’ve made a lot of £££ since 2002 through very adroit dealings with BE, and need more of the same

· Schadenfreude aside, we can’t be indifferent to all this governmental ineptitude: the lights really will start going out in the next 6-8 years …

PS, for a truly fatuous commentary, how’s this from the FT ?

"The fact that [EDF] is owned by the French state is of no importance. EDF can be trusted to behave like a conventional commercial enterprise and there is no strategic reason to prevent a French company from running UK nuclear power plants"

With suckers like that writing for prestigious financial papers, what hope do we have that Brown and his sorry, distracted crew will think any more clearly ?

ND