Thursday, 29 December 2016


Today investors fret over elections, referendums, a slowdown in China, euro zone debt… the list is endless. Meanwhile journalists are always full of doom and gloom – it sells more papers.

During the week Sir Mervyn King [Fellow of the British Academy] former Governor of the Bank of England spelled out why we should be more confident in Brexit. We could do with a few more stalwarts to promote the same message after the remainers message of doom & gloom never materialised.

2016 has been the year of the improbable. According to Ladbrokes, a £1 bet on Leicester winning the Premier League, the UK voting to leave the EU and Donald Trump becoming US president could have returned over £4.5m.

This year feels like a crescendo of events that started with the 2008 financial crisis. Since it bottomed in 2009 the market has climbed what is often termed a ‘wall of worry’. Commentators have continually expected markets to fall, but instead they have climbed higher and higher. However, fear of falling markets has caused many investors to miss out on this bull market. Of course the smart money has been there.

With most investors in pessimistic mode, there is plenty of cash on the sidelines waiting for an opportunity to enter the market. This means that should markets fall by, say, five or ten percent, the dip could be heavily bought. We saw this with the Brexit referendum, where the market’s fall was quickly reversed.

Low interest rates add to the favourable backdrop for equities. In this environment it’s easy to see the attraction of equity income funds, many of which yield from 3 to 5% at present – albeit that unlike the security of cash, your capital will fluctuate, so you could get back less than you invest.

2017 should be a better year especially if the government coughs up a few bob for social services.

Monday, 12 December 2016

Health and Social Care

There is a lot of talk about NHS funding and services and there is a lot of talk about social care funding or lack of funding and services but rarely do I see the two linked and yet I consider Health and Social Care to have a symbiance with one another.

At the moment, health and social care – the help given mainly to old or disabled patients to help them continue to live at home rather than in hospital or nursing homes – are different systems in England. NHS medical treatment and domiciliary support, which is provided mainly by local councils, are usually not joined-up.

Adult social care has enjoyed an average annual real-terms growth of 5.1 per cent since 1994 but much of this has been absorbed by demographic pressures. Over the past five years spending on services for people with learning disabilities has risen by 20 per cent and for those with physical disabilities by nearly 14 per cent. But spending for older people has increased by less than 3 per cent and has not kept pace with demographic change, according to the Kings Fund.

Mounting demands on care budgets has led the government to identify additional resources in the Spending Review and to commission an independent review to recommend a more sustainable way of funding care for the future. But a tough spending settlement for local government suggests that a funding gap of at least £1.2 billion could open up by 2017 unless all councils can achieve unprecedented efficiency savings. What's more the last autumn statement made it very clear that there was no extra spending for social care in England.

The consequences are that even fewer people will receive the care and support they need. This will have knock-on effects for people needing NHS care as there will be more emergency admissions to hospital, delayed discharges and longer waits for treatment. Currently there is a battle between the hospitals [A&E] and social care. Someone is taking into hospital and treated medically, they are improved and the hospital wants their bed back, but unless the person can leave under their own steam or are moved by social services, bed-blocking can ensue and this is causing friction.

Social care is not simply an adjunct to the smooth running of the NHS. It is possible that under-investment in vital health services, such as continence and community nursing, may generate additional demand for social care support. A better understanding of the reciprocal relationship between spending in health and social care is essential to ensure that they operate as a whole system of care. NHS Health and Social Care have a symbiance with one another and until this is accepted little progress can be made.

Friday, 25 November 2016

The Left Wing

How do losing political movements react to defeat?

They comfort themselves with the notion that the electorate did not properly appreciate their achievements in office, failed to understand what was at stake. Consciously rejecting virtue and reason, through base motives of greed or prejudice they have knowingly chosen the dark side.

This position found a home in Jeremy Corbyn’s Labour Party, which now seems to regard winning elections as at best a secondary concern, and colours the tone of much post-referendum commentary – the suggestion being that many Brexit supporters came to their view through something worse than ignorance.

Disapproval of the voters also seems to be rife among anti-Trump elements. You can see it in the protests, and in the calls for moderate Republicans not to “normalise” the president-elect by taking jobs in his administration.

American voters were crying out for change, yet the Democrats offered its antithesis: the Washington establishment incarnate. People in states and counties the Democrats had come to take for granted worried about their jobs, their futures, prospect for their children, the ballooning cost of healthcare, the state of their roads and bridges, immigration, terrorism, the effect of trade deals on their industries, and America’s place in the world – and the Democratic candidate responded: did you hear what Donald Trump said about an ex-Miss Universe?

But other things that were closer to home mattered more to people than Trump’s flaws, and he was taking about them.

Wednesday, 23 November 2016

Letter from Aleppo

East Aleppo, the heart of Syria’s peaceful revolution, is besieged on all sides and facing unprecedented levels of attacks from the sky as the Syrian regime and Russia moves to ‘exterminate’ all those that remain.

In the last five days all hospitals, including the last children’s hospital, have been bombed out of operation. All White Helmets centres have been destroyed. East Aleppo’s trapped 275,000 residents are living in terror as thousands of missiles, barrel bombs, and mortars rain down on them.

Despite the brutality, the medics, rescue workers, parents, and entire communities refuse to give up. They have rebuilt hospitals time and time again, saved families from under the rubble of non-stop air strikes, and opened schools and libraries underground.

Aleppo, one of the birthplaces of civilisation, has been failed utterly by the leaders of the 'civilised world' who stand by idly and watch this massacre unfold.

[written by a resident]
Daily Dispatch: “No words can describe what we experience and suffer everyday”

Aoum Obaidah, is a mother of three and teacher at an orphanage in Aleppo city. The orphanage looks after 47 children. She writes to you about what life is like for the 90,000 children living under siege in Aleppo.

“I wish the children in Aleppo could breath clean air, free of the smell of gunpowder, chemicals or even death.

The children of Aleppo don't go to school anymore, everything has been destroyed, and even if a school still exists, it’s too dangerous for children to attend.

The children of Aleppo will die eventually, either from the cold, lack of food or medicine. They will die because they don’t have milk or even a piece of bread.

Assad and the Russian's bombs do not differentiate between a stone or a human. I can’t protect my children from the bombs. If a day passes without losing one of them, it is a miracle to me.

When you see a hungry child walking barefoot, then you know he is from Aleppo. When you see a child crying for his mother or father, lost under the rubble, then you know he is living under siege in Aleppo. When you see a child bleeding to death, tears filling his or her eyes, then you know it is a child from Aleppo.

My message to all mothers in the world is, learn and teach others how to keep your children safe, not hungry.

And whatever happens, never let them go.  Always hold them because you never know when you might lose them."

Monday, 21 November 2016


[just about managing]

The new in phrase JAM coined by social media and the need for shorter sentences might be fun, but it does represent about 10 million people fall into this group.

What could this weeks autumn statement say to them?

Since her [Teresa May] statement outside 10 Downing street last June, is it possible for the government to help these people specifically?

Which areas could she help?
Social Care

The only problem I can see with this is, the people who are going to pay for this are the recipients!

Whether or not you regard yourself as a member of this group rather depends on your expectations in life. There are rich folk who will complain that they are “just about managing” to afford a holiday on a palm-fringed island because of the cost of paying the school fees.

In the absence of a clearer direction, the hard Brexiters have been making nearly all of the running in the Tory party. This is making business increasingly nervous that Britain could crash out of the EU without a deal on trade that they can live with.

Friday, 18 November 2016

Child Abuse Inquiry

Aileen McColgan, who was leading the inquiry’s investigation into abuse in the Anglican and Catholic churches, quit over concerns about the inquiry’s leadership, which means there will be a fourth chair. If this isn't a scandal, then what is?

Eight members of the legal team have left in the two years that the inquiry has been running and now serious concerns have been raised over the leadership and transparency and as yet they are still to start the actual work of the inquiry.

Presently MPs are saying that this is a really important inquiry into historical child abuse and it has had a very difficult two-year history so far. What we want is for it to get back on track. There are a lot of survivors depending on it to do a good job.

However, they do not seem to realise that it appears to the outside as a corrupt core.

Now the latest nail in their coffin has come from the Shirley Oaks Survivors Association which says failure to manage the investigation is allowing the abuse to continue. One of the biggest survivors’ groups involved in the independent inquiry into child sexual abuse is to formally withdraw from the investigation, which could start the domino effect for the other groups causing the inquiry to become pointless.

The inquiry while remaining independent now needs a senior figure like a judge to take charge and steer it in the right direction.

Tuesday, 15 November 2016

Proportional Representation

I have spoken about this before after the 2015 election:-

but I feel it needs to be reiterated as now the first past the post system is not fit for purpose.

Proportional representation is a type of electoral system that decides the make-up of a parliament by allocating seats on the basis of the number of votes each party received. Although there are many different types of PR, this is the base requirement for a system to be described as proportional.

Rather than the winner-take all approach of other systems, PR ensures that votes carry equal weight. To do this, multi-member constituencies are used. This means that a single area elects more than one representative. The size of this area can vary according to the system, ranging from the size of the whole country to a county or local vicinity.

As I said earlier PR is dominant over Europe and the rest of the world and it is about time the UK adopted one form of it.

Months after the election result, a new survey by pollsters BMG has found that 57 per cent of the public agree with the principle that “the number of seats a party gets should broadly reflect its proportion of the total votes cast” – compared to only 9 per cent who disagree.

The scientifically weighted poll found a similarly large majority in favour of changing the current voting system. 51 per cent of the population said they were “unhappy with the current electoral system and want it to change” compared to only 28 per cent who want to keep FPTP.

In 2011 the Government held a referendum on whether to replace the current First Past the Post system with another system called Alternative Vote.

Alternative Vote was not a proportional system, however, and failed to inspire any enthusiasm. The bid was defeated and the existing system retained. It must be pointed out that AV has no similarities with PR what so ever and if a PR referendum was called it would be completely different.

The Wiki will give you a complete description of what PR is:-

Friday, 11 November 2016

Post Brexit

The much-hyped severe Brexit recession does not, so far, seem to be materialising – which really shouldn’t be that much of a surprise, the actual economic case for such a recession was surprisingly weak. But we are seeing a large drop in the pound, which has steepened as it becomes likely that this will indeed be a very hard Brexit. How should we think about this?

Originally, stories about a pound plunge were tied to that recession prediction: domestic investment demand would collapse, leading to sustained very low interest rates, hence capital flight. But the demand collapse doesn’t seem to be happening. So what is the story?

From the trade side, imagine a good or service subject to large economies of scale in production, sufficient that if it’s consumed in two countries, you want to produce it in only one, and export to the other, even if there are costs of shipping it. Where will this production be located? Other things equal, you would choose the larger market, so as to minimize total shipping costs. Other things may not, of course, be equal, but this market-size effect will always be a factor, depending on how high those shipping costs are.

In Britain’s case, we think of financial services as the industry in question. Such services are subject to both internal and external economies of scale, which tends to concentrate them in a handful of huge financial centres around the world, one of which is, of course, the City of London. But now we face the prospect of seriously increased transaction costs between Britain and the rest of Europe, which creates an incentive to move those services away from the smaller economy [Britain] and into the larger [Europe]. Britain therefore needs a weaker currency to offset this adverse impact.

The weakening of the pound should achieve this.

Wednesday, 9 November 2016

President Elect

Donald Trump announces that Secretary Clinton has just called him with the congratulations, and so it begins.

Middle class and working class people in America have said they have had enough of corrupt career politicians and now the questions.

Last Friday Donald Trump unveiled a two-minute television advert in which he rails against the political establishment, juxtaposing clips of Hillary Clinton, Barack Obama, George Soros and Janet Yellen against grim images of empty US factories. That was just one piece, but it appears to have worked.

Trump has opposed the proposed Trans-Pacific Partnership deal and called for fundamental changes to the Nafta pact with Mexico and Canada. He has also threatened to impose punitive 45 per cent tariffs on goods from China, stoking fears of a trade war.

Foreign Policy:
Trump has said that Mr Obama’s deal with Iran, which seeks to prevent the Islamic Republic from attaining nuclear weapons, would be dismantled or at least restructured and I suspect a much closer relationship with Russian President Vladimir Putin.

Trump has signed up to the Republican pledge that Mr Obama’s signature Obamacare reforms must be “released and replaced”.

Tax policy:
Trump has promised the biggest tax revolution since Ronald Reagan, pledging to cut taxes across the board. He says no American business would pay more than 15 per cent of their profits in tax, compared with a current maximum of 35 per cent. The top rate of tax would fall from 39.6 per cent as the Republican reduces the number of tax brackets.

Supreme Court:
With the highest court in the land currently split 4-4 between conservative and more liberal judges, Trump faces relatively easy confirmation of his pick by a Republican Senate.

Climate change:
Trump has called global warming a hoax invented by China to make US manufacturers uncompetitive and vowed to “cancel” the Paris climate agreement, which built on a deal Mr Obama struck with China.

Trump has campaigned on his pledge to build a wall on the Mexican border, called for a ban on Muslim immigration and the deportation of 11m unauthorised immigrants. However, he has subsequently made more ambiguous statements, promising instead “extreme vetting”.

Monday, 7 November 2016

American Elections

After what seems like the worst tempered US election ever, America will at last make it's decision next Tuesday [8-NOV-2016].

History may well look back on 2016 as the year when the US finally choose a woman to lead it, or when the post war US global order started too break up.

As I write this, it is too close to call as after the FBI steps in a second time highlighting more of Clinton's missing emails surrounding a sex scandal that outweighs Trumps sexist comments from a decade ago, the gap between them has narrowed to just one point.

Perhaps it will come down to turnout?

How many people are going to turnout and vote?

If it is a low turnout due to disinterest or a high turnout due to "I must for the B as I cannot stand A" scenario, then no one can predict the outcome, it is still all to play for.


The FBI has done it again! In the last 12 hours the FBI has announced that there is NO new evidence in the Clinton emails. Now eleven days ago when they said they had found another stash of emails to investigate, a lot of Americans were going to the early stations to vote, so who exactly is the FBI gunning for?

Thursday, 3 November 2016

Article 50

On Thursday 23-Jun-2016 the people of the country that turned out to vote in the EU Referendum said by 52% to 48% that we should leave.

Today [Thursday 3-Nov-2016] the high court will decide whether parliament is to have a say on the UK’s decision to leave European Union. The lord chief justice is to deliver the high court’s momentous decision on whether parliament or the government has the constitutional power to trigger Brexit.

The outcome of the case, which ventures into constitutionally untested ground, will resolve whether MPs or ministers have the authority to formally inform Brussels about whether the UK intends to leave the European Union. The legal dispute focuses on article 50 of the treaty on European Union, which states that any member state may leave “in accordance with its own constitutional requirements” – an undefined term that has allowed both sides to pursue rival interpretations.

If the outcome rules in a way that MPs will vote, there is the possibility that they will be in favour of remaining.

So what was the point of the referendum?

Wednesday, 26 October 2016

No Man's Sky

No Man's Sky [NMS] is a computer game first appeared on consoles then ported to the PC platform.

NMS has had a troubled history, when first released it appeared to be a tenth of what had previously been advertised and the port to PC did not go well.

No Man's Sky, over the course of few months, have been under criticisms for a whole lot of reasons. From the game being a product of false advertisements down to the studio's recent investigation from ASA [Advertising Standards Authority], these have all been a nightmare for Murray and his team. And surprisingly, with all the on-going buzz about the title, the people behind the game didn't even bother to speak up or whatsoever. Their silence even started way back when people have started complaining about NMS.

The ASA has the power to have advertisements it believes are in breach of its code of conduct withdrawn, and prevent them from appearing again. If an advertiser refuses to comply with an ASA ruling, it can impose sanctions, such as asking internet search websites to remove a marketer's paid-for search ads.

Neither Sony nor Hello Games offered anything close to that level of candour about the game at all, much less addressing the dropped features or less than spectacular  launch of the PlayStation 4 and PC versions of the game.

The inability of either company to communicate anything about the game is destroying how players see it. A number of outlets ran stories about how the concurrent number of players for No Man’s Sky was dropping, and how terrible that was.

The latest ignominy for Hello Games is that their Head Office has been abandoned.

It does not bode well for the future.

Monday, 24 October 2016

Trump's first 100 days

In the same place where Abraham Lincoln delivered one of the most iconic speeches in American history, Donald Trump unveiled his 100-day action plan to Make America Great Again.

“We are a very divided nation,” he told the crowd of local Republicans, adding that “I am a politician and have never wanted to be a politician, but when I saw the trouble our country was in, I knew I could not stand by and watch any longer.”

Describing himself as an outsider who also understands the inner mechanics of our “very broken system,” Trump said that he is capable of delivering “the kind of change that only arrives once in a lifetime.”

Saturday’s speech was slated as an opportunity for the Republican presidential nominee to offer some specific details on how exactly he plans to enact such change. However, Trump spent the first 14 minutes or so railing against what he claims is a 'rigged system', warning against the widely debunked threat of voter fraud and accusing everyone from Democratic rival Hillary Clinton to the FBI, AT&T, Amazon and, above all, the media of corruption.

“They are trying desperately to suppress my vote,” he said. “They are trying to poison the mind of the American voter.”

Before outlining the list of actions he plans to take after his inauguration, Trump first announced what he intends to do immediately after the election: sue each of the women who’ve publicly accused him of sexual assault, unwanted groping, kissing and other inappropriate behaviour.

Trump also listed seven actions he’ll be talking to protect American workers on his first day in office, which include announcing his intention to totally renegotiate NAFTA, which he has announced in virtually every stump speech and debate throughout his campaign, as well as withdrawing the country from the Trans-Pacific Partnership, the controversial trade deal that has not yet been ratified by the U.S.

On day one, Trump vowed also to begin deporting criminal illegal immigrants [drug dealers, gang heads, killers] and suspend immigration from terror-prone regions where vetting cannot safely occur, warning that radical Islamic terror is right around the corner.

Perhaps most notable is the End Illegal Immigration Act, which, he said, “fully funds the construction of a wall on our southern border“.

Friday, 21 October 2016

Is the next financial crisis going to be a surprise?

As central banks around the world pump billions of dollars into the global economy every month and policy makers pass regulations to safeguard against a relapse of the 2008 financial crisis, the market’s best and brightest say some warning signals are flashing at precisely the wrong time. Now, rules to shore up the money-market fund industry that kicked in Friday are stifling the predictive powers of yet another set of gauges. For investors, the big worry is they will end up being taken by surprise when the next crisis hits.

Libor, the rate banks charge each other for dollar loans ranging from one day to one year, has surged to levels not seen since the financial crisis, even as the Fed has left interest rates unchanged this year. Rather than signalling a credit stress event as it once might have, the spike is the result of structural changes.

The new money-market rules have driven about $1 trillion from funds that buy the short-term debt of banks and corporations into those that invest in safer securities such as U.S. Treasury bills. As a result, banks’ unsecured lending rates have soared. Three-month Libor reached 0.88% Wednesday after touching the highest since 2009 last week. The contortions are also seen in Libor’s spread with other rates. The difference between Libor and the overnight index swap rate, another measure of bank funding stress that isolates credit risk, is at the widest since 2012.

Just last month, analysts at Goldman Sachs Group Inc. reminded investors how the so-called TED spread [which tracks the difference between Libor and the yield on similar-maturity Treasury bills] has lost its ability to foreshadow funding stress. They removed it from the bank’s proprietary financial conditions index.

Analysts are losing faith in the U.S. yield curve, a tool used to forecast the direction of the economy, as it signals a recession that many see as premature. The curve is created by tracing a line through yields on bonds of different maturities. Normally, longer-maturity debt has higher yields than short-dated securities. When that inverts, it is seen as a sign the economy is at risk of contracting. In fact, it has happened before each of the past seven recessions.

While the curve has yet to invert, it has flattened significantly. Strategists say the shift is the product of disentanglement between financial markets and macro-economics. The gap between yields on two- and 30-year Treasuries touched 1.4 percentage points on Aug. 30, the lowest since 2008.

In an even more esoteric corner of the market, a proxy for credit risk called the swap spread has been turned on its head not once but twice in recent months. The gap between the rate on interest-rate swaps and similar-maturity Treasury yields, another measure of bank credit quality, has been negative for most maturities for much of the past year as regulations made it cheaper and safer to use derivatives to hedge risk and more onerous and expensive for bond dealers to trade, hold and finance government debt on their balance sheets.

If that wasn’t enough, near-term swap spreads have swung back above zero this year -- not because conditions are normalizing, but rather due to money-market rule changes that are increasing banks’ borrowing costs in an already distorted market.

Wednesday, 19 October 2016

Syria today

This is to give a mention to one of the bravest women on the planet.

Asmaa is a 38 year old White Helmet volunteer living and working in Daraa, the city known for sparking the peaceful uprising in Syria in 2011. Punished for rising up, the city is often cut off from food, medicine and aid. Its residents do everything they can to save each other.

Before the revolution Asmaa worked as a physiotherapist in her own clinic. When the revolution began and protesters were shot by snipers, she started working as a paramedic, rushing to where the bullets were being fired. She was arrested several times by the regime for her humanitarian work. Every time, she went back to treating wounded protesters and those who needed her. Eventually, the regime destroyed her clinic.

Asmaa joined the White Helmets [Syria Civil Defence] in 2015. For her it was a big change: “Before when I worked alone I had only my legs to carry me to the scenes of attacks, or on a lucky day someone would offer a ride on their motorcycle or in their car. Now it’s easier to save people’s lives because there is an entire team of brave humanitarians and an equipped ambulance to get us to those who need us quickly. All that matters to me is that I can help the victims of bombs.”

The thing that keeps Asmaa going is knowing she has the support of her family and community. Asmaa’s father was suffering from a treatable heart condition, but living under siege he lacked the medicine he needed to stay alive. Before he died he would see the work she was doing and tell her “God bless you, God protect you”.

While we wait for politicians to grow a backbone and act to protect civilians, there are very real things we can do to support heroes like Asmaa. The White Helmets need more equipment to save lives, they need to know that if they are wounded they can get medical treatment, or if the worst happens their families will be looked after.

The White Helmets missed out on the Nobel Peace Prize this year, let us mot forget Asmaa and her team mates.

Monday, 17 October 2016

A bank's image

Britain's banks are not reporting the full extent of cyber attacks to regulators for fear of punishment or bad publicity, a recent story by Reuters has shown.

Reported attacks on financial institutions in Britain have risen from just 5 in 2014 to 75 so far this year, data from Britain's Financial Conduct Authority [FCA] show. However, bankers and experts in cyber-security say many more attacks are taking place. In fact, banks are under almost constant attack.

Banks are not obliged to reveal every such instance as cyber attacks fall under the FCA's provision for companies to report any event that could have a material impact, unlike in the U.S. where forced disclosure makes reporting more consistent.

Banks are not alone in their reluctance to disclose every cyber attack. Of the five million fraud and 2.5 million cyber-related crimes occurring annually in the UK, only 250,000 are being reported, government data show. A report published in May by Marsh and industry lobby group TheCityUK concluded that Britain’s financial sector should create a cyber forum comprising bank board members and risk officers to promote better information sharing.

Security experts said that while reporting all low level attacks such as email "phishing" attempts would overload authorities with unnecessary information, some banks are not sharing data on more harmful intrusions because of concerns about regulatory action or damage to their brand.

The most serious recent known attack was on the global SWIFT messaging network in February, but staff from five firms that provide cyber security products and advice to banks in Britain told Reuters they have seen first-hand examples of banks choosing not to report breaches, despite the FCA making public pleas for them to do so, the most recent in September.

The Bank of England has declined to comment and the FCA has also not responded to requests for comment from journalists.

Tuesday, 26 July 2016

Former BHS owner

Sir Philip Green has demanded an "immediate apology" from MP Frank Field for comments he made about his running of the collapsed retailer.


However, it is quite plausible for someone to go on the offence when cornered and Sir Philip Green is definitely cornered after the report from the Business, Innovation and Skills and Work and Pensions committees which is co-chaired by Frank Field.

The report published on Monday after weeks of evidence from former executives and advisers says the “tragedy” of BHS was the “unacceptable face of capitalism” and raises questions about how the governance of private companies and their pension funds should be regulated.

So what did Frank Field say that has aroused Philip Green's ire?

Frank Field, the chair of the work and pensions committee, said: “[Green’s] reputation as the king of retail lies in the ruins of BHS. His family took out of BHS and Arcadia a fortune beyond the dreams of avarice and he is still to make good his boast of ‘fixing’ the pension fund. What kind of man is it who can count his fortune in billions but does not know what decent behaviour is?”

While Green is being nailed by the Business, Innovation and Skills and Work and Pensions committee, who else can feel the heat in connection to BHS?

Financial advisers namely Goldman Sachs, Price Waterhouse Coopers, Deloitte Haskin & Sells, and perhaps more, but these three have been found out to knowing how bad the deal was with Dominic Chappell.

When cornered, he [Green] used the last line of defence for a select committee guest: ignorance. He did not know the ins and outs of Arcadia’s accounts, inviting MPs instead to spend a day with his ‘back office’ of finance staff, and he did not know how the Green family’s trusts work, pointing to wife Tina’s control, a response that is likely to backfire. There might very well be more people and organisations that are neck deep in the BHS scandal, but the first one is Philip Green and he needs to pay, about half a billion pounds apparently.

Thursday, 21 July 2016

Turkey Finance

Turkey’s lira fell to an all-time low after S&P Global Ratings downgraded the country’s debt on concern about an increase in political risk after a failed coup last week and the government declared a state of emergency as it pursues those responsible.

The currency slumped to as low as 3.0973 against the dollar before falling 1.5 percent to 3.0898 on Wednesday. Stocks earlier capped the steepest three-day sell off in three years and bonds tumbled, sending the yield on 10-year notes to the highest since May.

President Recep Tayyip Erdoğan declared a three-month state of emergency in a televised address after a day of meetings with top generals on the National Security Council, and then ministers in cabinet. Since the collapse of the attempted putsch on Saturday, authorities have arrested thousands of army officers, judges and prosecutors, and embarked on a purge of other institutions such as universities.

S&P cut Turkey to BB, two steps below investment grade, from BB+ with a negative outlook, saying the move reflected the further fragmentation of the political landscape after last week’s attempted coup. This will undermine the country’s investment environment, growth and capital inflows into its externally leveraged economy, it said. S&P’s downgrade comes two days after Moody’s Investors Service put the sovereign on review for a possible downgrade.

The failed overthrow attempt has led President Recep Tayyip Erdoğan to crack down on his opponents. About 60,000 people have been detained, suspended, fired or stripped of their professional accreditation since the coup, according to Bloomberg estimates. An announcement will be made after meetings with National Security Council, ruling AK Party government ministers and cabinet.

The financial situation is not good, but I am more worried for the 60,000 detainees and how many can become missing persons.

Monday, 18 July 2016

Turkey Aftermath

It was not much of a coup. The death toll currently stands at 290, according to Turkish officials. Unfortunately for those 290 it was the end.

More than 6,000 people, including senior military officials, have been arrested in the aftermath of the coup attempt against President Recep Tayyip Erdoğan, who promised to “cleanse the virus from all state institutions.” Another phrase he used which sent a chill up the spine of any western liberal was "a gift from God" while referring to the coup. We really do not have any idea what this man is capable of in the future.

The old Turkey’s story is well known: Secularists ran the state and the military which intervened from time to time to cut the religious conservative majority down to size when it gained too much electoral power.

The new Turkey story is about to begin although it probably started back in 2002 when Erdoğan came to power. In the last 12 to 24 months Erdoğan has been clamping down on media based targets to the point where there is only state run media today and most of the free media has disappeared. I find it rather difficult to expect democracy to flourish under these conditions.

As with many coups around the world, the aftermath will be bloody and repressive. It will be rule of the mob, rather than rule of law that will shape Turkish politics and society. More than 1,000 members of the military have been arrested and more than 2,000 judges have been laid off. Pro-government mobs have brutally attacked anyone they perceive as being anti-Erdoğan or anti-government. Darker days lie ahead for Turkey and an awful lot of people will want a better life in the UK now.

Saturday, 16 July 2016

Turkey's Troubles

Headlines Today:-
Turkey coup: President Erdogan says army elements guilty of 'treason', as he tells nation government is in charge, after violent clashes in Ankara and Istanbul leave 'at least 60 dead'.

What has happened and why?

During the night it appears that a small faction of the army has tried to attempt a coup. It appears to be a very small group although they had access to fighter jets, tanks and other military equipment, it does not seem to be the main body of the army as a whole. A more surprising thing is this morning there appears to be no political support whatsoever as all the main factions in parliament have condemned the coup. It will probably be very short and bloody.

President Erdogan came to power in 2002 democratically after the countries people voted for him and against the standing secularists that had been in power. Since then he has tried to move the country more towards the religious side of Islam and has reigned in a lot of power more centrally.

Back in 2013, Turkey witnessed a number of high-profile demonstrations in relation to the current government’s policies and the actions of the country’s then Prime Minister, now President, Recep Tayyip Erdogan. A plan to redevelop a park in central Istanbul adjacent to Taksim Square sparked the unrest. Istanbul, the capital Ankara and a number of other major towns and cities in the country were affected by the demonstrations, but tourism remained largely untroubled in the country as a whole.

Several bomb attacks in recent months, notably the June 28th attack at Atatürk Airport, have rightly horrified the world. Their purpose was less to hurt many people than to put political pressure on the Turkish government and economy.

12 January 2016 there was a suicide bomb attack against tourists in Sultanahmet in Istanbul in which 10 people died. On 19 March 2016 a similar attack against tourists on Istiklal St in Istanbul killed 4 people.

17 February 2016 a large bomb attack near a military barracks on Eskisehir Road in Ankara killed 28 people. On 13 March 2016, a similar attack killed over 30 people at Kizilay Square in central Ankara.

27 April 2016 there was a suspected suicide bomb attack at Bursa Ulu Mosque. The bomber was killed and 7 people slightly injured.

1 May 2016 a bomb attack at the Central Police Station in Gaziantep killed two police officers and injured 23 others.

7 June 2016 a bomb attack in the Vezneciler area of Istanbul killed 7 police officers and 4 civilians. 36 people were injured.

28 June 2016 Ataturk International Airport in Istanbul was attacked. More than 40 people were killed.

Turkey and Syria are very dangerous environments and Turkey is a big tourist destination, so there is a huge pool of people who will be wandering around concerned about the actions over night. As a side note British Airways cancels all flights to and from Turkey on Saturday and specifically BA675 departing from Istanbul on Sunday.

Thursday, 14 July 2016

New Prime Minister

Firstly congratulations to Theresa May for becoming the UK Prime Minister.

Now what does she have to do? Create a government, that is done by appointing ministers as secretary of state to various departments.

The top three jobs are Chancellor, Home Sec & Foreign Sec and they are Philip Redmond, Amber Rudd & Boris Johnson. Then there will be a host of others for health, education, trade, defence, transport, environment and many more.

A new job has been created called Secretary of State for leaving the European Union and this has been given to David Davies, who has written about exiting several times recently and should do well, depending on the reception he gets by European leaders. Talking of new jobs, she has created the minister for international development which has been given to Liam Fox.

One of her jobs will be to keep the four countries together, England, Northern Ireland, Scotland & Wales, not an easy task but one that test her initial period.

We still have one of the biggest budget deficits to get to grips with which will mean more austerity, in  2015 UK government debt amounted to £1.56 trillion, or 81.58% of total GDP, at which time the annual cost of servicing [paying the interest] the public debt amounted to around £43bn, and juggling this could be one of the trickiest issues.

Her statement outside 10 Downing Street started with "I follow in the footsteps of a great modern Prime Minister. The Government I lead will be driven not by the interests of the privileged few but by you. We won't entrench advantages of the fortunate few. We will do everything to help you go as far as your talents can take you." If Theresa May was to continue this rhetoric she might just have a plan that works.

Monday, 11 July 2016

Labour Woes

Today the battle lines are drawn up in the Labour party as a challenger to the leader steps forward in the shape of Angela Eagle.

However, it is not a simple leadership challenge because even though the PLP [Parliamentary Labour Party] has had a vote of no confidence in the leader, which he lost by 172 to 40 and followed by a mass walk out of the shadow cabinet, something that is unprecedented in Labour history, but the leader himself, Jeremy Corbyn absolutely refuses to step down.

This itself has caused an issue which will need to be resolved by the NEC [National Executive Committee] tomorrow [Tuesday 12-Jul-2016] as on one side it appears all candidates need 20% of the PLP support to stand currently 232, however, the media are reporting that 51 are required which is 20% of 255, so I am not sure of the figures. The rules say 15% which would be 38 names.

If that is not complex enough, the leader has said that he does not need any names and will automatically be on the ballot paper, which is why I mentioned the NEC and their role tomorrow in deciding the definition of the rules finally.

One of the reasons the leader is adamant about standing is that the majority of the membership, which has swollen significantly since last year’s figure of 600,000 is now past 800,000 and heading at a rapid rate towards the million, is still behind him and he has been reporting that polls suggest the grassroots Labour voter in the country is behind him, which is a tricky statement to make when most of the Labour Mps who have been voted in by these grassroots supporters are not behind him.

Of course tomorrow the NEC could change everything by saying that the Leader Jeremy Corbyn needs to raise the necessary number of names to stand, which presently would be difficult to achieve and another candidate to oppose Angela Eagle would have to be found.

Saturday, 9 July 2016

America and Guns

The love of guns in the United States has been well documented, as have multiple mass shootings across the country such as those in Orlando, San Bernardino, Newtown, and Virginia. The ease of access to guns in American society comes at a shocking cost. For eight years President Barak Obama has tried to alter the gun laws with little effect because of the power of the Republican lobby.

Currently almost 6,000 people have been killed as a result of gun violence. Despite this high death toll, mass shootings in America show no sign of disappearing. The Stateside obsession with guns can appear baffling to UK observers like me unfamiliar with its origins. I live in the UK where police with guns is becoming more apparent because of terrorist actions world wide, but I can still not buy a gun in my local super market, thanks goodness.

Apart from the laws, the main difference between the UK and the US is the role that guns play in everyday life. In the UK, most gun lovers are involved in shooting sports and are mostly based in the countryside. The idea of using a gun for self-defence is generally pretty shocking in Britain, even within the shooting community, and most people believe that guns should be the preserve of the police or armed forces.

There is another side to America & Guns and that is black & white. Recently it appears that black people are being shot more by white people, is that an over simplification, no it is fact. Alton Sterling, Philando Castile both shot by white American police officers, their crimes unreported but probably didn't deserve the death penalty. They died within 24 hours of each other, Alton Sterling in Baton Rouge on Tuesday and Philando Castile in Minneapolis on Wednesday. Now on Friday Micah Johnson a black person has gone onto the streets of Dallas and started shooting white police officers. Is anyone surprised? Well they shouldn't be. However, sending in a robot with a bomb to kill him, that is a surprise!

This will not change anything as far as gun law is concerned because it is everyone’s right to own a hand gun in America, but personally I find the current situation untenable and the people in charge [the government] needs to address the situation.

Thursday, 7 July 2016

Chilcot Report

I wonder who has read it all, already? Well, everyone who is mentioned in the report and the PM.

Luckily there is a twelve page summary which all the news agencies have used on day one of the published report. Two things are very clear, Sir John does not accuse Tony Blair of deceiving the country on the day war was declared, but he does not hold back in a lot of other areas that are now going to allow a whole host of more questions to be asked.

One of the areas was the idea that we knew very little before we went in, Sir John shows with evidence that knowledge of the factions and their behaviour, the Iranian involvement and Al-Qaeda were well documented before the start. He does not hold back on the state of the equipment or lack of it again backed up with evidence that the British Army were very poorly turned out and loss of life could be linked to this. One thing to mention here is that the military experts have said that the politicians took a short term view and this was reflected in the state of equipment supplied.

He also highlights that the intelligence was floored and more importantly it was not rigorously and independently challenged and should have been.

One of Sir John's comments as he outlined his report was "we all agree that military action is the last resort, however it appears that when the war started even without the benefit of hindsight in 2003 we had not reached the last resort", this leads me to think buried deep in the report there are conclusions or even recommendations that show more diplomacy could have taken place before the troops were sent in.

Sir John refers to sofa government on behalf of Tony Blair were a lot of decisions were made without the full knowledge of the cabinet and nearly hinted at a presidential style of government, could this be one of the lessons that could be learned or does it still happen today?

Monday, 4 July 2016


It appears that there are some people in Labour & the Liberal Democrats that appear to be using the same language, could a new political party rise before recess?

The Labour party itself is rife for a split with the shenanigans that have occurred over the past two weeks, the left and centre are moving away from each other at break neck speed, with a lot of help from Momentum, plans that may go back years.

Recently the Liberal left have been moving, albeit a lot quieter away from the centre ground, are they looking for allies, are the left Liberal Democrats any different from Labour's left?

If both left groups got together as a force could it succeed?

Saturday, 2 July 2016

What comes after Brexit

No plague of killer toads, no economic crash and no World War three.

However, the chancellor has abandoned the punishment budget, the remainers’ are desolate and the Tory war continues with Michael 'I have absolutely no intention of ever being Prime Minister' Gove announcing that he will stand for the leadership stabbing Boris Johnson in the back, front, sides and everywhere else as shown by Boris' speech Friday morning announcing that 'he was not the man' after obviously being told to stand down.

But this is only part of the story, because rather than leaping onto the bandwagon and enjoying the moment at the Conservatives expense, Labour crumbles. During the day nearly every member of the shadow cabinet resigned, it was a bloodbath and it felt that at the end of the day Jeremy Corbyn was phoning round the job centres looking for anyone that would say yes when asked would they be prepared to be a member of a Labour shadow cabinet. One MP Pat Glass broke a Westminster Parliament record by resigning two days after accepting the position.

So where do we stand?

The country is divided, confused, angry, leaderless and this is the perfect time for someone to rise in the aftermath of Brexit. Who will it be?

One thing we should not forget at this time is the result of the Brexit vote was 52/48 or 17 million / 16 million votes. How do the 16 million voters feel right now and do they have anyone standing up for them? It now appears that a referendum is completely different from any other type of election as the losers seem to come away with nothing.

Thursday, 30 June 2016

Brexit Post Mortem

The FTSE100 is down less than almost any other market, it is dominated by large multinationals that benefit from the lower pound, looking at the FTSE250 which focuses on domestic British companies we see a drop of around 10%.

The German and French markets are down by about 8%, they represent the heart of the eurozone. The 8% declines in Germany and France represent fallout damage and the UK is not directly impacted by this.

China actually went up, but they tend to follow their own rules, don't go there.

The FTSE250 did especially poorly on Monday [compared to other markets], which fits the political chaos theory, as the media portrayed the British government as being clueless about how to handle the situation. Things were a bit better on Tuesday and considerably better on Wednesday as the shorters were finished with their business.

What must be realised is this little six day [four business days] break has been a god send to shorters who saw it coming. The Smart Money sold their stock on Thursday during the vote [at it's peak] saw it plummet and then bought it back. They all have the same stock holding they had before but have made a cash bonus from the buy/sell exchange.

This general market pattern was somewhat predictable, prior to the Brexit vote, we’d seen markets rise on optimism that “Remain” would win, and so it was possible to clearly see how investors thought a Brexit vote would affect various markets. Of course hedgers would be betting against this and for a leave win, while they contemplate this scenario they would realise that it is the perfect time for a short session. This is why they are called the Smart Money.

Tuesday, 28 June 2016

It Continues

It might be Wimbledon fortnight, but you would hardly realise it as the only news available is politics.

The Conservative [split party] fight has been put well into the background as the Labour party is heading towards oblivion. Nearly every single member of the shadow cabinet has resigned and the leader has spent the day recruiting new staff by simply giving out jobs to anyone who says yes. Some of the choices cause more trouble than could have been imagined, for example Diane Abbott has been given Health and as it was announced most of the junior ministers in that department resigned. Hardly conducive to a forward looking efficient, professional political unit.

At the end of the day it was being rumoured that Labour might split, so SDP part II was possible. All this venom is directed towards the leader Jeremy Corbyn and to all accounts it appears to be a rout.

The rebels have criticised his performance in the EU referendum and he faces further resignations from the junior frontbench ranks amid fresh calls for him to stand down as leader. He has categorically refused to stand down today saying that if a leadership election was to take place, he would stand and win. Very strong language from someone who appears to have very few standing beside him.

The deputy leader Tom Watson returned from Glastonbury and had a meeting with Jeremy Corbyn and informed him of the state of play. The talks between the two men were described as "civil" by a spokesman for the leader, but a senior Labour source said Mr Corbyn was left in no doubt he had lost the support of the Parliamentary Labour Party. To be honest Corbyn never really had great support from the PLP [Parliamentary Labour Party] it was the membership that he excelled in. As it is possible there might be a general election before the end of the year, it is clear that the PLP need to have someone else at the helm that will allow them to win back government.

This all happened in one day, what next?

Monday, 27 June 2016

It Begins

Will the EU now fall apart?

After the UK Brexit vote handing out a 52/48 Leave result, what do the other 27 countries think?
The first one to watch surprisingly is France. President François Hollande seemed very worried when he made his statement and hardly surprising as he has to face elections next year and Marie-Le-Pen came straight out and welcomed the Brexit result.

However, the German Chancellor Angela Merkel offered Britain an olive branch in the form of an offer of time to exit gracefully. Talking of Chancellors, has anyone seen ours, George Osborne seems to have gone to his room with a big bag of snacks and closed the door.

The markets did flip out spectacularly on Friday, Sterling had it’s biggest fall for decades, apparently and even Government gilts came under pressure although self correction and a statement form Mark Carney the Governor of the Bank of England did make a strong, positive statement that probably helped.

Back home here this weekend has seen one of the most turbulent political times ever in the history of Britain as not only is the Government split and fighting, the opposition seems to have joined in with a mass resignation of the shadow cabinet and all the figures pointing at the leader Jeremy Corbyn. The political press are having a field day.

Then when we have enough news to fill a week, never mind a day, The UK's European Commissioner Lord Hill is to stand down, saying "what is done cannot be undone" after the UK voted to leave the European Union. He will be replaced by Latvian politician Valdis Dombrovskis, currently European Commissioner for the euro.

I promise I am not making this up.

Wednesday, 22 June 2016

BBC Debate

Last night [Tuesday 21-Jun-2016] there was the 'great' EU debate hosted by the BBC in the Wembley Arena.

It was divided into three sections, economy, immigration & Britain’s place in the world, no small feat. What did we learn?

Did the leave side guarantee success after the vote, no, did the remain side guarantee success after the vote, no.

The audience appeared to applaud both sides equally during the three sections, so after two hours one could assume that the country still has not decided, with only two days to go that is not good.

David Cameron the British Prime Minister announced on 20-Feb-2016 the date for the EU Referendum will be on 23-Jun-2016, however the idea for a referendum started after the 2010 general election and the Prime Minister said it would be held before the end of 2017. I find it nearly incredulous that people still have had not enough time to decide which way to vote, and use the weak excuse that politicians should decide.

Mishal Husain had a separate section of 'experts' that unfortunately had their own agenda and did not contribute to the peoples debate that evening.

David Dimbleby did well to hold this gathering together, no mean feat, however did the majority of people listening at home get what they need to make the all important decision for Thursday?

Personally I had decided when David Cameron first announced that there would be an EU Referendum before 2017 and nothing I heard last night or in the past few weeks, months, years has changed my mind, I shall continue to place my ‘X’ in the leave box on Thursday 23-Jun-2106.

Monday, 20 June 2016

Future of MPs

After the death of Jo Cox last week, a lot of attention is now being put into MP security.

While I will happily admit that MPs need their own security as it should not be the place where MPs are open to any type of assault no matter how trivial or serious they are, however, the first thing I think of is a phrase 'security bubble'.

Most MPs if not all will admit that one of the best parts of the job is mixing with the public in particular their constituents. This could become more difficult if they are placed with a security bubble.

If you imagine the position of Judges [and an old adage which might be incorrect] that are transferred from their homes to court on a daily basis have nearly no contact with the public and as a result have absolutely no idea what the public thinks of their decisions.

If this was to happen to MPS our democracy would suffer.

Now how are they going to get the balance right and protect MPs from today’s rough 'n' tumble without going over the top on costs but still allow them free access to the public?

Thursday, 16 June 2016

Jo Cox MP

On Thursday 16-Jun-2016 Labour MP Jo Cox was murdered outside her constituency surgery in Yorkshire.

The incident happened at lunch time but the death announcement was not until late afternoon, presumably certain details had to be confirmed, people informed etc., Up till this time everyone had been posting shock, upset, support for her & family.

Then it began.

Both sides in the EU referendum started making references and comparisons to the incident with the event of 23-Jun-2016.

Lets be fair, it is not right to make political capital from someone's tragedy, people like David Cameron [remain] and Michael Gove [leave] have not said or done anything that can be used by others to promote actions that are cruel and devastating. The media have been given a bashing for the way the referendum has been reported and yet I have seen so many trying to give both side a fair chance, like the Daily Politics for example.

As time moves on other reports appear and the latest is he [the attacker] shouted a phrase before he struck and the phrase has been linked to a political movement. The next questions are political motivation or mental health issues, hardly likely to establish answers to these on the first day, so speculation is rife.

Then terrorism raises it’s ugly head  with statements like “You kill a person because they do not share your beliefs? Last time I heard about something like that, it was called terrorism”. These phrases can be very inflammatory and hide the real reasons behind the facts. I just do not understand how anyone can think someone's opinion about if we are to remain in the EU or leave the EU is worth more than their life.

Jo Cox was, by all accounts as I am not part of the Westminster bubble, a fine parliamentarian and a fine woman. She has been taken from her family and her constituents but her death takes something from all of us as well. Are our MPs going to become more insular then ever in future, will it become virtually impossible to see an MP without an armed guard, is this really how democracy will evolve to?

I hope not.

Tuesday, 14 June 2016

Post Office Home Phone

I get my broadband services from the Post Office, it is called

Some of you might think this is a bad idea.

Yesterday I was receiving ping 12 ~ D/L 12Mbps ~ U/L 0.9Mbps pretty usual for the PO considering what they charge, today I am receiving ping 39 ~ D/L 3.1Mbps ~ U/L 0.4Mbps pretty rubbish.

While I am testing this the phone and consequently the broadband goes off, so I phone them on their 24hr technical support line 0345 600 3210 at 21:22 BST to find a message saying our support line is now closed please goto the website.

If only I had broadband running so that I could go to the website!

What a complete farce.

Monday, 13 June 2016

Persimmon Plc

Persimmon has an executive pay plan which could see top executives at the house building group share approximately £600m over the next five years.

The scheme, one of the largest ever at a FTSE 100 group outside the banking sector, could see group chief executive Jeff Fairburn earn more than £100m. Under the plan, which began as the housing market began its recovery following the 2008 financial crisis, the London-listed company gave approximately 150 managers the chance to earn shares worth 10% of the group's value, provided they hit a number of targets.

Persimmon have said the plan was running comfortably ahead of its targets and shares in the company have soared from £6.20 to £20 and the house builder has defended the scheme, indicating it has returned £1bn to shareholders and invested more than £2bn since the plan was first implemented.

The current housing crisis in the UK requires about 500,000 new homes to be built each year, the current figure being 200,000 but with an estimated 300,000 new migrants entering the country each year the real figure is probably about 1 million new home will be required.

Apart from the immigration issue which is top of the list on the leave / remain campaigns agendas another problem not easily satisfied is how easy it is fro developers to wriggle round local councils. Councils and developers have long been engaged in what amounts to a grand haggle. Developers examine a council’s affordable housing target and then make an opening offer, which is likely to be much lower. It is up to the planning authority to determine whether the basis for the calculations is fair and correct and a battle of the experts often ensues.

Frequently, the developer has not yet bought the site from the landowner, which gives them a significant negotiating advantage because there is a constant threat that if the negotiation doesn’t go their way, they could back out of the deal and the landowner could sell the site for commercial use instead. The local council risks losing not only the affordable homes, but all the homes.

This is a single issue that the Westminster government should get hold of irrespective of the EU referendum.

Friday, 10 June 2016


Her Majesty’s Revenue and Customs has lost public confidence.

Just like any other relationship in life, once the trust between two parties has been eroded it is very difficult to restore, making the association a difficult one to carry on with. This is what has happened with HMRC’s relationship with taxpayers over decades of time.

Amidst all the recent revelations and scathing criticism of HMRC, how can trust in HMRC be restored, particularly when a body such as the [PAC] Public Accounts Committee said it did not have enough information to be able to gauge what HMRC had done about fraud. This, despite the PAC having been presented with the [NAO] National Audit Office’s report on what HMRC had done to combat fraud!

It is fair to say, for those of us who are forced to deal with our tax authority, public confidence in HMRC is not the best and not just because of all the negative press the department has received. This is not just a matter of public perception but the reality is that HMRC is an increasingly faltering government body.

In the good old days, tax advisers and taxpayers alike were able to work closely with their local tax inspector but that was a time when the Inland Revenue, as it was then, was a decent government department that contained well trained staff who possessed a sound knowledge of tax. Today the ever increasing move to force taxpayers to deal with HMRC entirely electronically is ensuring that all personal contact vanishes.

With HMRC on course to reducing its staffing numbers and forging ahead with Making Tax Digital the restoration of public trust in the Revenue seems an unlikely prospect which is a dangerous scenario.

Trust is a two-way process and requires both parties to know that the other is reliable.

Thursday, 9 June 2016

Minimum Wage

It has been said that if the minimum wage increases automation that is a good thing, because obviously automation is good. However, it is important to understand why automation is good, and when it is not.

The most important thing to understand is that automation is not a good thing per se. There is no reason to prefer machines to do a job rather than people. The reason automation is usually good is because it lowers the cost per unit of output. We can get more stuff using less resources. It is not automation that is good, but productivity.

This suggests an easy case where automation would not be good: if the automation doesn’t allow lower costs per output. If a firm automates and replaces £100 worth of labour costs with £110 worth of capital costs and output stays the same, then this is not really anything to celebrate.

But why would a firm do this? Why would this kind of automation ever happen? Perhaps because laws ban the use of cheap labour. If the minimum wage leads firms to automate, but that automation  decreases the cost of output, then this automation does not increase productivity.

That is not to say that all automation that the minimum would generate would increase total costs, especially given the potential for positive spill over from innovation. But it does suggest that when a government mandate generates automation it is not the same thing as automation that is driven by the profit maximising firms seeking to minimize costs and utilise resources efficiently.

It is entirely possible that high minimum wages lead to a much more automated industry that nonetheless produces much less output because costs are higher. Walking into a restaurant and seeing a touchpad for ordering is not necessarily a sign of economic progress. It could be a sign that businesses are being prevented from using the profit maximising mix of labour and capital. This would be especially inefficient, wasteful, and unfortunate if the workers who lost their jobs are not re-employed. With minimum wage at £7.20 rising to £9, this is certainly a risk in many places.

Tuesday, 7 June 2016

US Elections

You thought the Real Donald Trump was bad.

A former State Department IT expert has refused to answer questions about his work on Hillary Clinton’s private email server, keeping its operations shrouded in mystery.

Bryan Pagliano’s legal team have said that he would remain silent during a deposition with the conservative watchdog Judicial Watch, originally scheduled for Monday but now delayed until further notice.

His decision increases the odds that Clinton herself will be forced to testify in the case, and because of quirks of the legal system, his decision to stay quiet could be seen as an implicit confirmation that he or the State Department had done something wrong. Unlike in a criminal case, judges in civil cases such as Judicial Watch’s can draw ‘inferences’ about someone’s guilt from a witness’s decision to plead their rights under the Fifth Amendment. For lawyers, there is a reason to go through the motions and ask questions, even if the response is the same over and over again.

Even if Pagliano doesn’t say a word during the deposition, he will impact the case moving forward.

The open records lawsuit launched by Judicial Watch is aimed at determining whether Clinton and her top staffers thwarted the FOIA [Freedom of Information Act] through her use of a personal email address and private server at her New York home. Pagliano is believed to have set up and maintained the private server, and is likely the one man with a detailed understanding of how it worked and why.

His continued silence has fuelled months of speculation about how Clinton’s email was set up, its digital security and whether it was designed to thwart transparency laws. For Clinton, that means no relief from a political headache that has dogged her campaign for more than a year.

Tuesday, 31 May 2016

On Our Coast

Yesterday two British men were charged with people smuggling after a sinking boat carrying 18 Albanians, including two children, was rescued in the Channel.

Britain is at risk of having a massive migrant crisis like the Mediterranean, experts have warned after a boat of migrants was rescued from the English Channel. The dingy detained yesterday is the second to reach the same location on the Kent coast in just two weeks, sparking fears that many more will attempt the journey. A senior French coastguard has warned the Channel could soon resemble the Mediterranean where thousands of migrants have died. At its shortest point the Kent coast is just under 30 miles across the Channel from France.

The Times reveals that the Home Office dismissed concerns by the independent chief inspector of borders and immigration about the smuggling of people in small boats as "not significant" only months ago. Warnings about Norfolk and Suffolk’s remote creeks and estuaries being attractive to smugglers were ignored, it suggests.

A former head of the Royal Navy described Britain’s borders as a “complete mess” after it emerged just three boats patrol 7,700 miles of coastline. One of the fleet has been sent to the Aegean Sea to tackle the Mediterranean migrant crisis. Both Britain’s Maritime and Coastguard Agency and UHM revenue and Customs officials are said to be “deeply concerned” that the UK has little control of its territorial waters.

Another dinghy with powerful outboard motors was found abandoned on Dymchurch beach. Residents said it was the second attempt in two weeks to smuggle migrants into the UK at the remote spot. A fortnight ago a larger inflatable was found abandoned near the shoreline with up to 30 lifejackets, but no passengers were found.

The discovery will rail concerns the migrants are somewhere in the UK illegally after making the crossing. If this is now the start of something new, then this position needs to be reassessed and resources need to be put in by the government as a matter of priority.

Wednesday, 25 May 2016


The Institute For Fiscal Studies has said today that we do give a 'gross' figure of £350 million pounds a week to the EU but we will not get it back when we leave at the Brexit vote because of the rebate negotiated by Margret Thatcher.

That statement is misleading.

When we leave the EU we will no longer hand over £350 million pounds a week to the EU, that is a fact, I realise that we will not get a rebate and we will not get subsidies, but we will still not hand over £350 million pounds a week to the EU.

Why has the IFS said this today?

One reason is that over 10% of it's income comes directly from the EU and will probably be affected when we leave, Paul Johnson director of the IFS for the past five years admitted this morning.

While the IFS might be politically independent it certainly knows how to protect it's income.

Monday, 23 May 2016

EU Referendum

Yesterday was exactly one month to go until the EU referendum and the people in Britain get to make the most important political decision they’ve made in generations.

The Treasury has launched its latest attack on the UK economy, warning of doom and gloom if we leave the EU. However, the Treasury has a history of getting forecasts wrong. Indeed, George Osborne created the independent Office for Budget Responsibility as he admitted ‘the public and the markets have completely lost confidence in government economic forecasts’.

The Prime Minister has made it clear that he wants Turkey to join the EU. This would give 76 million Turkish citizens the right to live and work in the UK, putting huge pressure on our public services. It is evident that the UK poses a significant ‘pull factor’ as our average salaries are far higher than in Turkey. However, this will also threaten our national security as crime levels are also higher in Turkey, as is gun ownership.

SNP leader Nicola Sturgeon has said "overblown" government warnings about the economic impact of leaving the EU risk alienating the public. The Scottish First Minister and Remain supporter said "fear-based" campaigning could have a negative effect on voters. She was speaking as Tory Leave backers dismissed a Treasury study suggesting Brexit would hit growth, jobs, wages and house prices as "more propaganda".

Exactly how democratic is the EU? What are the economic risks to Britain of the Eurozone crisis? Is EU immigration sustainable or unbalanced in the long term? This struggle remains a work in progress. I may have learned more about Britain’s tortured relationship with the EU in the past few weeks than in all my previous years, but even so my analysis is unlikely to be complete by the day of the vote.

Treasury Forecasts

Monday morning has started with a bang and another scare story from the government in the form of a Treasury statement concerning a plague of frogs, er sorry, I mean recession that would shrink the UK economy by 6%.

Naturally this can be put under the heading of 'dodgy dossier' as there have been so many forecasts [from both sides] which are just that forecasts. The FT has a nice story that the Treasury was so nervous that it employed Charlie Bean, the former deputy governor of the Bank of England, to cast a critical eye over the process and give it the stamp of approval.

Rumours from the conservative back benchers that a new nick name for David Cameron and George Osborne is the Chuckle Brothers I find rather amusing.

Of course the biggest surprise the week before last was when the governor of the Bank of England Mark Carney 'said that Brexit could "materially" hit UK growth and cause the pound to fall "sharply" and inflation to spike'.

Mark Carney will be questioned by the select committee tomorrow [Tuesday 24-Jun-2016] and I eagerly await that meeting.

Thursday, 19 May 2016

Queen's Speech

Out of 30 items mentioned yesterday, only two are new, it is the most recycled Queen's Speech that has ever been given. It is now hardly surprising that so much was leaked before hand as we have heard it all before.

One of the big things that was missing was the new bill of rights and no mention of sovereignty issues.

David Cameron was expected to announce a whole set of new laws in the Queen’s Speech. There will be consultation on a new British bill of rights, which would replace the Human Rights Act. This would assert the supremacy of the UK courts, but would still incorporate the European Convention of Human Rights to which Britain is a signatory. It was not mentioned.

David Cameron said back in February that the measures designed to tackle European Court of Justice powers would "put beyond doubt" the UK parliament's sovereignty. Plans for a new British Bill of Rights were also left deliberately vague while the new Counter Extremism Bill, expected to be one of the most controversial pieces of legislation in the next session of Parliament also had key details missing. Conservatives in favour of Brexit believe that the Government is intent on shelving any kinds of controversial legislation in the run up to next month’s referendum for fear of alienating support for the remain campaign.

So what did we get from the speech?

Digital Economy Bill, Transport Bill, Planning Bill, Jobs Bill, Markets Bill, Bus Services Bill, Pensions Bill, Education Bill, Prisons Bill, most of these are re-hashed from before.

Is the Westminster Government 'really' worried about Brexit, the answer is yes, but what will the public say on 23-Jun-2016?

Tuesday, 17 May 2016

Smart money moves

The great gold rush of 2016 is gathering pace. Holdings in exchange-traded funds have now surged by a quarter, with investors taking advantage of lower prices over the past two weeks to enlarge stakes on rising concern about central bank policy making worldwide.

Gold is the best-performing major metal this year after silver amid rising concern over negative rates in Europe and Japan and whether the Federal Reserve will be able to tighten further. Demand jumped to the second-highest level ever in the first quarter, according to the World Gold Council, and billionaire hedge fund manager Paul Singer has said gold’s rally may just be beginning. Investors are being driven to gold on a structural shift in investment demand.

Firstly, the negative interest rate environment and quantitative-easing policies are reducing the pool of suitable investment options, and making gold less costly to hold, and while there may be more U.S. rate hikes in the pipeline, prevailing rates remain very low. Second, lingering fears of competitive currency devaluations and potentially fresh bouts of market volatility encourage safe-haven demand.

After the Fed raised rates in December, investors have been scaling back expectations of further increases amid concern about the strength of the global recovery. The chances of a hike at next month’s policy meet are just 4%, down from 75% at the start of the year, according to data compiled by Bloomberg. Higher U.S. borrowing costs typically hurt gold prices while boosting the dollar.

While central bank policies may have contributed to gold’s gains this year, some countries’ banks [notably in China, Russia and Kazakhstan] have also been substantial and consistent buyers. The World Gold Council estimates that nations are expected to buy 400 to 600 tons this year, compared with 566.3 tons in 2015.

Monday, 16 May 2016

Budget 2016

What is left from the Budget of 2016? Not a lot!

The first thing to go was disability change and it was nearly instant. People at the time were calling for a failed budget in the first week. The changes to PIP [personal independence payments] were listed in the Treasury document that adds detail to the chancellors statement. However on the following BBC question time the education secretary described the PIP cuts as a suggestion that was under consultation. The next thing we know is they have been cancelled.

Back in March just after the budget was released, the shadow chancellor called on the Budget to be ripped up and begun again, Mr McDonnell claimed the Chancellor “insults this House” with his no-show - while Labour MPs shouted "where is he?" and "frit" as Mr Gauke stood at the despatch box.

Then there was the wobble over the green tax or the rise in VAT from 5% to 20% for renewable energy specifically solar panels it would create a collision between the European Union and the British Parliament. Friends of the Earth highlighted, the solar tax would also have created the perverse situation whereby people ended up paying more tax on solar panels and energy conservation than on energy from polluting sources like oil and coal who would have their low tax rates retained, which would skew the energy market away from clean energy and send Britain’s energy policy in precisely the wrong direction.

Next on the hit list was Academies and this reverse change was released on what has become known as bad new day, slipped out amongst other bad news considered worse than changing every single school into an Academy whether they wanted it or not. The announcement was made at the height of the Junior Doctors strike where they walked out of emergency services.

Now the sugar tax is about to get squished. This looks as though it will come into contention with the EU as it breaches their rules. Oh dear!

Thursday, 12 May 2016

Cheek of the Governor

Bank of England Governor Mark Carney's warning that Britain could be forced into "technical recession" if it leaves the EU has sent a "very clear message" of the risks of Brexit, and appears to be a message straight from Downing Street. In the same breath Carney said it was his duty to be transparent, I think we can see through his transparency.

Supporters of EU leave campaigns accused the Governor of risking a self-fulfilling crisis, as the London markets fell on the Bank's warnings of depressed growth, increased inflation and unemployment and a fall in the value of the pound if Britain votes for Brexit on June 23.

The FTSE 100 closed at a five-week low, down 58.30 points, or 0.95pc, to 6,104.19 after Bank of England governor Mark Carney warned the British economy could fall into recession if the country voted to leave the European Union. Carney certainly knows how to back the odds. The market jitters prompted another dash to safe-haven assets. Gold producer Randgold Resources 1.2pc to £61.70. On the mid-cap index, Polymetal International surged 11.8pc to 780p. The precious metal miner also benefited from a rating upgrade after Goldman Sachs lifted it to “buy” from “neural”.

Speaking after the publication of the latest quarterly inflation report from the Bank's Monetary Policy Committee, the Governor said that Brexit could "materially" hit UK growth and cause the pound to fall "sharply" and inflation to spike, while the economy would suffer as households and businesses reined in spending.

Mark Carney pointed out that the MPC [Monetary Policy Committee] was 100% behind the analysis that a "Technical Recession" was possible after Brexit, how desperate are the remain campaign?

Friday, 29 April 2016

Message from Syria

The following statement has been released by Dr Hatem, the director of the Children’s Hospital in Aleppo.

Last night, 27 staff and patients were killed in an airstrike on Al Quds Hospital nearby. My friend Dr Muhammad Waseem Maaz, the city’s most qualified paediatrician, was killed in the attack. He used to work at our Children’s Hospital during the day and then he’d go to Al Quds Hospital to attend to emergencies overnight.

Dr Maaz and I used to spend six hours a day together. He was friendly, kind and he used to joke a lot with the whole staff. He was the loveliest doctor in our hospital.

I’m in Turkey now, and he was supposed to visit his family here after I returned to Aleppo. He hadn’t seen them in four months.

Dr Maaz stayed in Aleppo, the most dangerous city in the world, because of his devotion to his patients. Hospitals are often targeted by government and Russian air forces.

Days before Dr Maaz’s life was taken, an airstrike hit only 200 metres away from our hospital. When the bombing intensifies, the medical staff run down to the ground floor of the hospital carrying the babies’ incubators in order to protect them.

Like so many others, Dr Maaz was killed for saving lives. Today we remember Dr Maaz’s humanity and his bravery. Please share his story so others may know what medics in Aleppo and across Syria are facing.

The situation today is critical - Aleppo may soon come under siege. We need the world to be watching.

Thank you for keeping us in your thoughts,

Dr Hatem

Thursday, 28 April 2016

Labours Worst Day

The week started with a row brewing over comments by one MP Naz Shah as they were thought to be Anti-Semitic. She was the PPS of the shadow chancellor John Mcdonnell and her comments mentioned the transportation of Jews. The calls went out for her to have the whip removed but this never happened until yesterday [Wednesday 27-Jun-2016].

This morning on his way into Millbank Ken Livingstone is confronted by John Mann and accused of being a "Nazi apologist" and advised about his history being misinformed. Livingstone then starts a round of interviews starting with the BBC News, the Daily Politics and the World at One repeating the same stance on each one that over 47 years he has never heard a member of the Labour Party make Anti-Semitic remarks and also that Naz Shah was not an Anti-Semitic.

The candidate for London Mayor Sadiq Khan said "Ken Livingstone's comments are appalling and inexcusable. There must be no place for this in our party"

Currently Labour MPs are queuing up to demand Ken Livingstone's removal in full public view and the day isn't even over yet.

Monday, 25 April 2016

What a cheek

So President Barak Obama threatens us with a ten year wait for a trade deal if we leave the EU after the referendum vote. What happened to the special relationship then?

Exactly, it has always been spurious that the UK and the US have had a special relationship.

Now the cloak of mysticism has been dropped and the truth is revealed that the only reason the US wants the UK to stay in the EU is for personal reasons and no other.

The European Court of Justice has repeatedly undermined the ability of Britain and America to share intelligence and President Obama should simply ask why a new EU intelligence agency will help, especially as the special relationship does not exist.

Looking forward to the vote on the 23-Jun-2016 even more now so that we can show him we will not be threatened.

Saturday, 23 April 2016

Europe crumbles

Hungary is fighting against forced immigration from Brussels, it was also the first country to build a fence last year.

Other countries may follow suit in opposing these plans and hold their own referendums, taking the power from Brussels and putting it back in the hands of their residents. Slovakia and the Czech Republic have both threatened to take legal action against the EU’s orders to take in migrants.

Austria has also begun sealing off its southern border, introducing checks on the vital Brenner Cross motorway and pledging the implementation of €1m worth of border patrols and security improvements and last week, 2,000 soldiers in Switzerland’s tank battalion were told to postpone their summer holidays in order to be ready to rush to the border with Italy to block migrants making their way from Sicily.

Slovakia and the Czech Republic have both threatened to take legal action against the EU’s orders to take in migrants and the European Commission President has been quoted with “We are no longer respected in our countries when we emphasise the need to give priority to the EU.” Damming stuff indeed.

A non imaginary line is now stretching from the West to the East across the top of the Mediterranean to stop migrants heading North, where will they go next?

Friday, 22 April 2016

Annus horribilis

During yesterdays celebrations this expression was mentioned and I looked to see what it was about:-

12 March, Mauritius, the last Commonwealth realm in Africa, abolished its Monarchy.

19 March, it was announced that Prince Andrew, Duke of York would separate from his wife Sarah, Duchess of York.

23 April, Anne, Princess Royal divorced her husband Captain Mark Phillips.

8 June, Diana, Princess of Wales’s tell-all book Diana, Her True Story was published after being serialised in The Sunday Times. Written by Andrew Morton, it revealed for the first time the unhappy truths of the Princess's marriage – particularly, the affair between Charles, Prince of Wales and Camilla Parker-Bowles – starting the "War of the Waleses".

20 August, scandalous pictures of the Duchess of York being kissed on her feet by her friend, John Bryan, were published in Daily Mirror.

24 August, intimate conversations between the Princess of Wales and James Gilbey from a tape recording of their phone calls were published in The Sun, causing "Squidgygate".

13 November, the affair between the Prince of Wales and Camilla Parker-Bowles was confirmed by a transcript of a recording of their phone calls published in the Daily Mirror, causing "Camillagate".

20 November, just four days before the Guildhall speech, Windsor Castle – one of the main royal residences – caught fire and was seriously damaged. Huge public outcry was aroused against the prospect that the cost of repairs might be on government expenses.

26 November, after lengthy discussions and under enormous public pressure, it was announced that the Queen would start to pay income tax and capital gains tax in 1993. This became the first time for a British monarch to pay income tax since 1931.

9 December, John Major, then Prime Minister of the United Kingdom, announced to the House of Commons that the Prince and Princess of Wales had decided to separate.

Wednesday, 20 April 2016

EU Referendum

Two months to go and the subject could not be hotter.

Last night Nick Robinson reminded us what had happened before in 1974 and the years following. He gave us an idea why we voted the way we did, and what the main topics of the day were at that time. He reminded me why I voted to join the EEC, why I thought it was a good idea and the information that I had been given allowing me to make my decision.

Do I now feel betrayed or misled? No. But I do see how a lot was done without public knowledge and how it is the politicians that make the mess concerning the European Union and how the people have very little to say.

So what did I learn last night and has it changed my mind to vote leave this time?

It started with the 1951 European Steel and Coal Community of West Germany and France, ECSC, later joined by Benelux and Italy. March 1957 brought the Treaty of Rome, and the European Economic Community, with the original six nations. January 1963, at a press conference in Paris, de Gaulle clearly said "Non" to his erstwhile close colleague Harold Macmillan.

Labour held a referendum in 1975 under Harold Wilson which now turns out to be a way to hold the fractious Labour party together rather than a vote on Europe. In 1992 the Conservatives had Maastricht and the treaty led to the creation of the Euro. Then there was the Lisbon Treaty and this was pushed through the back door of Westminster quicker than I can say Nick Robins...

Today, we can say that the Lisbon Treaty is the most important document in the European Union [EU]. It is the newest treaty, the most up to date, and it dictates how European institutions work.

Is today’s EU Referendum going to be much of the same? Possibly if the politicians have their way, they keep saying it is the people's choice, however, if they do not like the answer they will just ask a different question.

Monday, 18 April 2016

Oil still dominates

Oil prices have been persistently low for well over a year and a half now, but as the April 2016 World Economic Outlook will document, the widely anticipated “shot in the arm” for the global economy has yet to materialise. We argue that, paradoxically, global benefits from low prices will likely appear only after prices have recovered somewhat, and advanced economies have made more progress surmounting the current low interest rate environment.

Since June 2014 oil prices have dropped about 65% as growth has progressively slowed across a broad range of countries. This outcome has puzzled many observers who had believed that oil-price declines would be a net plus for the world economy, obviously hurting exporters but delivering more-than-offsetting gains to importers. The key assumption behind that belief is a specific difference in saving behaviour between oil importers and oil exporters [consumers in oil importing regions such as Europe have a higher marginal propensity to consume out of income than those in exporters such as Saudi Arabia].

World equity markets have clearly not subscribed to this theory. Over the past six months or more, equity markets have tended to fall when oil prices fall, not what we would expect if lower oil prices help the world economy on balance. Indeed, since August 2015 the simple correlation between equity and oil prices has not only been positive, it has doubled in comparison to an earlier period starting in August 2014.

One obvious problem in predicting the effects of oil-price movements is that a fall in the world price can result either from an increase in global supply or a decrease in global demand. But in the latter case, we would expect to see exactly the same pattern as in recent quarters, falling prices accompanied by slowing global growth, with lower oil prices cushioning, but likely not reversing, the growth slowdown.

Of course, it would be wrong to conclude that central banks can enhance the benefits of current low oil prices by raising their policy interest rates. On the contrary, all else equal, that action would harm growth by raising real interest rates, and the BoE [Bank of England] has absolutely no intention of raising interest rates.

Wednesday, 13 April 2016

Leveson Two

The government has been quietly sideling Leveson 2 for months but after reported that main stream news papers had spiked a story about the culture secretary and a call girl, it is top news once again.

John Whittingdale last night issued a statement to Newsnight in which he confirmed that he’d had a relationship with a woman who was also a dominatrix. The six-month fling ended before he became Culture Secretary. John Whittingdale said "This is an old story which was a bit embarrassing at the time. The events occurred long before I took up my present position and it has never had any influence on the decisions I have made as culture secretary,”.

Newspapers like the Sun, Mail on Sunday, People and Independent all looked at the story years ago and decided not to run it. But it appears they each decided there was little public interest in doing so. Papers have yet to explain what the public interest is in revealing the celebrity threesome case though.

However, it now appears that John Whittingdale did not tell No10 about his previous relationship when he was offered the Cabinet post. Downing Street say that as a single man this is a private affair, but the potential for future blackmail may worry some in Whitehall.

John Whittingdale once hinted that Leveson 2 should go ahead, but has since changed his mind. Conflict of interest?

Back in December 2015 Leveson 2 was quietly shelved as the conclusion of Operation Weeting left the way open for part two of the Leveson Inquiry to finally commence, but it never happened.

The first inquiry examined the culture, practices and ethics of the British press and published a 2,000-page report in November 2012.

The second part, looking at specific claims about phone-hacking at the News of the World and what went wrong with the original police investigation, was delayed pending the conclusion of criminal prosecutions.

Can the current situation revitalise Leveson 2 or maybe kick start a Leveson 3?


Monday, 11 April 2016

Tax Returns

I have been conflicted over the past week because I have been following the PM on his crusade [I do not think it is a term too strong] against tax dodgers, whether they be large corporates or small time crooks. As recent as 8-Mar-2016 the European Commission made a press release of the following "Tax transparency: Commission welcomes agreement reached by Member States for the automatic exchange of information on country-by-country reports (CbCR) of multinational companies, subject to UK scrutiny".

However, over the past week it has appeared as I get most of my news from the media that the PM is in the gang, this was disappointing to say the least. I realise that politicians can be two faced but this seemed to be more than just a casual stroll through efficient financing. The PM has now published his tax return and it appears a lot of other politicians will follow suit, some will not and the shadow over them will remain.

It has now become clear and thanks to the BBC Radio 4 Today programme that David Cameron has not been dodging [a phrase used by the media this week] his taxes or delving into the murky world of off-shore accounts. I am a saver and I have an ISA and as Jacob Rees-Mogg explained this morning I am an avoider not an evader, which settles my mind considerably.

As far as the EU referendum is concerned mine and the PM's view will continue to differ as I read the  leaflet setting out the governments position that has just popped through the letter box.

Thursday, 7 April 2016

Chinese bond market

Chinese companies cancelled more than double the amount of bond offerings in March compared with a year earlier, as mounting defaults increased financing costs.

At least 62 Chinese firms postponed or scrapped 44.8 billion yuan [$7 billion] of planned note sales last month, compared with 23 companies with 15.7 billion yuan a year ago, according to data compiled by Bloomberg. China Eastern Airlines Corp. cancelled issuance of 3 billion yuan of short-term bills on April 1 because of market volatility, according to a statement on Shanghai Clearing House website Tuesday.

The surge in scrapped offerings reflects investors’ growing concern about default risks amid the worst slowdown in a quarter century. At least 12 companies have missed payments on bonds in the past two years even as the central bank loosened monetary policy to help support the economy. The yield premium of AAA rated corporate securities due in five years over similar-maturity government notes rose 10 basis points last month, the most since November, to 78 basis points.

Fujian Electronics & Information Group Co. cancelled a 300 million yuan planned bond offering on March 31, according to a statement posted on the Chinamoney website, citing market fluctuations. Huafang Ltd. scrapped plans for 150 million yuan issuance of debentures on the same day, it said in a statement on Chinamoney.

It is obvious that it has become more expensive for companies to sell bonds as defaults rise, they want to wait until borrowing costs come down, but is that possible? China is experiencing the free market and it is starting to worry some of the big wigs at the top.