Tuesday, 30 October 2012

Hurricane Sandy

New York city is like a ghost town apparently as residents are "told" to leave.

One of the infrastructures affected is the underground metro. Well it is best to be safe than sorry. The trouble is the reason for shutting it down is the risk of flooding as it has been predicted that three metre waves could hit and therefore the city will be breached.

If that is the case, then the underground will be flooded, How will all that water be removed from the tunnels to allow the railway to reopen once the wind has passed? Thinking of our tube system if it was to get flooded extensively, I am not sure there is a way to empty the tunnels that quickly.

On another point, if this storm is one thousand miles across and sweeps across land, that's a lot of downed power lines. How long before electricity is restored?

I suspect that the two to three days of the storm will be frightening and devastating, but the two to three weeks or even months of clear up will be horrendous...

Monday, 29 October 2012

More Spanish misery

Yesterday there were more large scale protests in Madrid, however, one thing struck me.

Early in the day, Police protested [I must point out peacefully and orderly] outside the government buildings against cuts in staff, equipment & services, then they left and made a quick change and returned in riot gear before the main groups of protesters arrived.

I think they should be given credit for this behaviour.

Saturday, 27 October 2012


This week a debate burst into the open.

Sir Mervyn King, governor of the Bank of England, found himself fighting a rearguard action against a groundswell of support for “dropping money from helicopters” – something proposed by Milton Friedman in 1969 as the ultimate cure for intractable economic depressions, described as “Quantitative Easing for the People.”

He had to speak out because the sort of calculations presented last summer started to catch on. The Bank of England has spent £50 billion over the past six months to support bond prices. That could instead have financed a cash handout of £830 for every man, woman and child in Britain, or £3,300 for a typical family of four.

He felt obliged to counterattack on behalf of traditional central banking. In a speech on Tuesday he set out to “distinguish between ‘good’ and ‘bad’ money creation” and denounced “talk about the possibility that money created by the Bank could be used directly to finance additional government spending, or even that money could be given away.”

People are now accusing him of zig-zagging through the economic world sporadically, however, I believe he is trying to get the rest of us to understand slowly the need for change, which is acute...

Friday, 26 October 2012

The bleeding obvious

Hardly a month goes by without some new ‘independent’ report, or TV programme, demanding that we make it even easier for people to wreck their lives, and their families’ lives, by taking drugs.

This stuff – which always includes the claim that ‘the war on drugs has failed’ – is then swallowed uncritically by the BBC and almost all the newspapers.

It is tosh.

There has been no war on drugs in this country for 40 years.

Thursday, 25 October 2012

Rent swappers

Every day another new MP is found out to be rent swapping.

Why are they not put in prison for seven days?

When they come out their seat is up for grabs...

Wednesday, 24 October 2012

Piers Morgan

Do you remember Piers Morgan saying via a dodgy video link during the Leveson enquiry that he had "NO KNOWLEDGE" of any hacking?

Yesterday the Mirror group lost 12% of it's value in a day, why? It appears he lied.


Tuesday, 23 October 2012

Everyone has a bad day

O.J. Simpson was acquitted of criminal charges for allegedly murdering his ex-wife. He only had one bad day. You also have to consider his football records.

Bill Clinton said, "It's the economy, stupid," I took that to mean the economy is just one issue among many. I don't know how else to interpret that.

Nixon got a bum deal with that Watergate thing. That was just one mistake.

If President Obama decides to give America's nuclear codes to Iran, let's agree to count that as one mistake that should be weighed against all of his good work.

Yes, I'm following the American elections, that is I think I'm following them, I'm rather glad that I do not have a vote in that country...

Monday, 22 October 2012

Jimmy Saville the star

Panorama has just broadcast a 60 minute programme which leaves no doubt that:-

1) Jimmy Saville was a paedophile

2) the BBC is corrupt to the core

3) We, the public, the institutions, the police are still dragging our feet over this issue.

The latest statement from the CPS says they do not have enough evidence to act, well perhaps they should look a bit harder...


The Home Secretary Teresa May MP has decided that Gary McKinnon will not be extradited to the US to face trial concerning hacking into state computers.

This decision has been based on his health which as he suffers from Asperser’s syndrome a form of autism puts him into the realm of suicide, which is covered under section 3 of the human rights act.

So is this in the public interest, or is the government testing the water?

Friday, 19 October 2012

Energy debate

Today Ofgem has made a statement. After a decade of thinking about it and a year of talking about it, they now say that there should be reform of the energy situation in this country - LOL!!

What they said today could have been said 12 months ago when they made a statement that the measures could be implemented by winter 2012, so in fact they are still dithering and have no intention of pumping up the speed of this issue.

Angela Knight of Energy UK has been speaking today and constantly using the phrase my customers. For people who join late or are only half listening to the conversation will think she is talking about the consumer, whereas she is actually talking about the big six, which I suspect are making sure she does not go without.

She also repeatedly said that the people want choice, the people demand choice. However, the people want the cheapest deal and that does not figure in her equation...

Thursday, 18 October 2012

Energy matters

It appears that the Prime Minister David Cameron has become so frustrated by the current energy situation in this country that he has stood up and spoken. So what is the problem?

Energy prices and energy companies profits have risen year on year at far greater speeds that consumers inflation rates. The current size of energy company profits are obscene compared to the "we are all in it together" statement.

The last 15 years has seen 6 companies become a cartel in energy and I believe the PM has become fed-up at the lack lustre way Ofgem has dragged it's feet in regulating the industry and has decided to start the debate. Considering the row I have just seen in the commons, it looks like the debate has begun.

Jimmy Saville's MP

On Monday afternoon in the House of Commons Fabian Hamilton MP for the area of Leeds that Jimmy Saville lived in, decided to attack the Culture Secretary Maria Miller MP about who and what was being investigated. His main point was that no one should be excempt from investigation into this matter that is gaining ground because of public disgust.

I wonder if Fabian Hamilton will be asked as to what he knew about the vile character of Jimmy Saville and what he did about it!

Wednesday, 17 October 2012

Job creation at it's best

The Department of Transport is now asking Virgin to continue operating the service, which runs from London to Scotland, for a further nine to 13 months from December, while it runs a competition for an interim agreement.

A year!!

A year just to decide who should run the railway line?

What a joke...

Tuesday, 16 October 2012

Public Debt

Are we now after all the conferences have finished, in a situation where all political parties agree that public debt must be reduced?

Suppose the public debt has no impact on current investment or current consumption, or the entire future path of consumption from now until the end of time.

If the government gives a lot of money to people who are old right now, and as a result they consume more right now, then by assumption the currently young must consume less right now. Since we are assuming no change in the paths of aggregate consumption and investment from now until the end of time, all generations excluding the currently old must consume less, in aggregate.

Suppose the current old generation consumes £100 billion more. Also assume that each future generation, including the current younger generation consumes £1 billion less over their lifetime.  Then assume that after 100 generations Earth is destroyed by an asteroid.  QED.

Now how does that help the one million 18-24 year olds who are unemployed today?

Monday, 15 October 2012

It's a different world...

McLaren is a Formula 1 Motorsport team. It cheated. It obtained confidential information about another team, Ferrari, which McLaren intended to use for its advantage.

This was found out by the bodies that run Formula One (The Federation L'Automobile (FIA) and World Motor Sport Council (WMSC) the FIA's General Assembly). Accordingly they decided that McLaren had broken its rules: the International Sporting Code (ISC) which are enshrined contractually in the Concord Agreement between FIA, Formula One Administration Limited (FOA) and the teams. They issued a fine of £32 million.

Then it got interesting.

McLaren did its tax return and stated that it had a reduction of gross income of £34 million (fine plus related stuff) and what's more this loss is deductible against earnings.

The UK tax authority HMRC disagreed.

There was a trubunal.

McLaren won.


Saturday, 13 October 2012

Chief Whip

The focus has once again turned towards Andrew Mitchell. I have no idea why. Three weeks ago this happened


Now the heat is being turned up again. Is the PM having a rethink, or is someone digging in the background. Either way my opinion still stands, he should have left before, he should leave now.

Move along...

Friday, 12 October 2012


The Syrians might regret bombing that Turkish village.

A Syrian passenger plane forced to land in Ankara was carrying Russian-made munitions destined for Syria's armed forces, ratcheting up tension in the region.

The grounding of the plane was another sign of Ankara's growing assertiveness towards the crisis in Syria. Turkey's chief of staff warned on Wednesday the military would use greater force if Syrian shells continued to land in Turkey.

Turkey has become one of Syrian President Bashar al-Assad's harshest critics during a 19-month-old uprising that has killed some 30,000 people, providing sanctuary for rebel officers and pushing for a foreign-protected safe zone inside Syria.

The pictures just shown concerning the hospital that has been bombed twelve times so far, now only has two beds left for the injured. It has to be said that this situation is appalling and I wish more could be done on the ground today...

Monday, 8 October 2012

Double Standards

Jeremy Hunt the health secretary has just said in his personal view that the abortion limit should be lowered to 12 weeks from 24 weeks.

Two years ago he said that the number of children people have is their choice.

I wonder what has happened in the last two years, except losing Rupert Murdoch as friend...

Sunday, 7 October 2012

Chief Whip hides = oxymoron

In what is shaping up to be the most tempestuous Tory conferences in half a decade, discipline is out of the window as Andrew Mitchell announces he is unable to attend in the wake of gate-gate. For the Chief Whip to be forced to hide under a rock is both a humiliation and a real problem for the PM. Mitchell apparently does not want to be a distraction.

Making the statement that the Chief Whip is 'not' going to the party conference is a distraction, so the strategy has already failed. The Chief Whip is responsible for discipline and behaviour and has a hard time with his own path.

It is going to take more than a pretty speech to pull this lot out of the ever deeper hole...

Friday, 5 October 2012

An example

I've been looking this week at the Vickers's Report by the banking commission, which has looked at banking today and what should be done to mitigate future crisis.

It has been said by many commentators recently that capitalism is failing. If that is true what should it be replaced with? No one seems to know, which is a worry. I would like to simply one aspect of capitalism to see if it needs to be replaced.

An employer has a work force at a time when workers are scarce, he has to pay them more than he wants to, to be able to compete with other employers which in turn hurts his profits. If this happens across the entire economy then consequently employers are squeezed and eventually collapse, thereby putting workers out of work. Now we have a situation where there are more workers than jobs and employers start paying less and therefore make more profits.

If this circle was true, then why isn't it happening today?

One of the reasons is change. We need change, we cannot stop change, it is inevitable. So, what's next?

Thursday, 4 October 2012

What are the economic costs of reform?

Regulating the amount of equity that a bank must hold may therefore be reflected in a higher weighted average cost of funding. However, the higher private costs that come from differential tax treatment are not social costs. Government now has a policy instrument – the bank levy, now yielding £2.5bn a year – that directly influences UK bank costs. The higher tax yield from more equity could for example be offset by lowering the levy, should that appear desirable to Government.

There is ample evidence of credit provision pre-crisis on unduly easy terms, for example in parts of the mortgage market. However, the possible impacts on the price of bank credit are very small in absolute terms, and much less than the 0.25% changes in official interest rates that commonly occurred before the crisis.

While the costs to banks of funding themselves would rise as a result of the loss-absorbency recommendations, the increases would be relatively limited and any costs to the economy as a whole would be smaller still.

Using cost as an excuse to "NOT" revert the banks to the way they were [separate institutions] will not wash as the cost to the world of them being amalgamated has been a disaster...

Wednesday, 3 October 2012

Vickers's Report - Pros & Cons

If ring-fenced banks were not able to perform their core economic function of intermediating between deposits and loans, the economic costs would be very high. If all current retail deposits were placed in narrow banks, around £1tn of deposits which currently support credit provision in the economy would no longer be able to do so.

Alternative sources of credit could arise – for example if narrow banks could invest only in short-term UK sovereign debt (‘gilts’) the current investors in gilts would need other assets to invest in, since the stock of gilts would be more than taken up by the demand from narrow banks. Thus, those investors might become direct lenders.

Such a system would be less efficient, given that the synergies within banks would be removed, leading to increased costs for customers.

Either way, narrow banking would mean that ring-fenced banks could not be a source of stable credit supply during times of stress. Instead, the supply of credit would move entirely to a less regulated sector.

More issues?

Tuesday, 2 October 2012

Vickers's Report - snippet

Scope of ring-fence

Which activities should be required to be within the retail ring-fence? The aim of isolating banking services whose continuous provision is imperative and for which customers have no ready alternative implies that the taking of deposits from, and provision of overdrafts to, ordinary individuals and small and medium-sized enterprises (SMEs) should be required to be within the ring-fence.

The aims of insulating UK retail banking from external shocks and of diminishing problems (including for resolvability) of financial interconnectedness imply that a wide range of services should not be permitted in the ring-fence. Services should not be provided from within the ring-fence if they are not integral to the provision of payments services to customers in the European Economic Area.

The Commission’s view, in sum, is that domestic retail banking services should be inside the ring-fence, global wholesale/investment banking should be outside, and the provision of straightforward banking services to large domestic non-financial companies can be in or out.

What this does is return banking to what it once was before someone had the bright idea of amalgamating all banks. What goes around comes around...

Monday, 1 October 2012

What's in twelve months?

Age of consent in the UK is 16 and in France is 15, one of the reasons why Jeremy Forrest & Megan Stammers went to France, apparently.

Is there now going to be a debate about the age of consent or will it be passed over? Has this story been brought about because of the age difference? Is it just a coincidence?

What I do not understand is why for the past week has the country been enthralled in a couple on holiday! The coverage has been staggering when you consider what is happening in the rest of the world, Syria being an example as 100+ people a day are still losing their lives as the Regime is not powerful enough to dislodge the rebels.